CONTENTS. Board Of Directors Executives & Branch Managers From the Chairman s Desk Vision & Core Values of the Bank...

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1 CONTENTS Board Of Directors... 2 Executives & Branch Managers... 3 From the Chairman s Desk Vision & Core Values of the Bank... 6 A.G.M. Notice... 7 Directors Report Statutory Auditor s Report Balance Sheet Profit and Loss Account Schedules I to VI Notes to Accounts Salient Features of Bank s Loan Schemes Revision in the rate of Interest on Term Deposits and Particulars of Loans and Advances to Directors & their Relatives Our Past Chairmen Progress at a Glance Details of Branch Offices Notice to the Share Holders ANNUAL REPORT

2 BOARD OF DIRECTORS CHAIRMAN : Shri. Kirthiraj K. Salian, B.E. (Mech.) M.F.M. VICE-CHAIRMAN : Shri. Shekar Y. Suvarna, B.A. DIRECTORS : Shri. Ganesh S. Puthran, B.A., L.L.B. Shri. Pradeep M. Chandan, B.Com., L.L.B., F.C.S., M.D.P. Shri. Gopal C. Kanchan, M.A., L.L.B., CAIIB Shri. B. J. Shriyan Shri. Kishore Kumar, B.Com., F.C.A. Shri. K. A. Kunder, B.Com., CAIIB Shri. V. K. Suvarna, B.Com., L.L.B., Dip. in Co-op. Shri A. K. Thingalaya, B.A., L.L.B. Shri. Shridhar M. Salian, B.Com., L.L.B. WOMEN DIRECTORS : Smt. Premlata G. Sakpal, B.A., L.L.B. Smt. T. Anuradha Vijay, M.A. SC/ST DIRECTOR : Shri. Arun H. Gaikwad OBC DIRECTOR : Shri. Vasudev J. Tandel SP. BACKWARD DIRECTOR : Shri. G. M. Tandel EBC DIRECTOR : Shri. Vasudev Krishna Dhanu STAFF REPRESENTATIVES : Shri. Yaduveer B. Puthran, B.Com., GDC&A. Shri. Kishore C. Kunder, B.Com., JAIIB., GDC&A. CHIEF EXECUTIVE OFFICER : Shri. K. Sivaram, B. Sc. (Hons.) STATUTORY AUDITOR : M/s. S. V. Shetty & Associates Chartered Accountants CONCURRENT AUDITORS : M/s. K.B. Jorapur & Co., Chartered Accountants M/s. Yashwant & Co., Chartered Accountants M/s. Jagdish & Harish, Chartered Accountants BANKERS : Reserve Bank of India, State Bank of India, Axis Bank Ltd., Bank of India, The Maharashtra State Co-op. Bank Ltd., The Mumbai Dist. Cen. Co-op. Bank Ltd., The Federal Bank Ltd., IDBI Bank Ltd. 2 ANNUAL REPORT

3 EXECUTIVES & BRANCH MANAGERS EXECUTIVES Shri K. Sivaram B.Sc. (Hons.) Shri Jayaraman S. Iyer B.Com., MBA, CAIIB Shri J.M. Shah B.Com., FCA Shri Shridhar Bangera M.A. (Spl.), CAIIB (I) Shri Umesh N. Karkera B.Com., Dip. in Co-op., GDC&A Shri H.C. Kanchan B.Com., Shri J.B. Karkera B.A., Shri Kishore R. Amin B.Sc., CAIIB, GDC&A Smt Shilpa V. Pednekar B.Sc. (Stat), DISM, PGDMS, MBA (HR) Shri N.G. Mendon M.Com., LLB., CAIIB, GDC&A. Shri Jagdish Kotian B.Com., LLB., CAIIB, GDC&A Shri Shrikant Tare B.Sc. (Hons)., CAIIB. Shri B.M. Parikh B.Sc. (Hons.), CAIIB (I) Shri S. Ramaswamy B.Com., CAIIB Shri Sam Philip B.Com., CAIIB (I) Shri Mohd. Khalid Hussain B.E. (Com. Sc. Engr), MCSE, CCNA. Shri Samuel Bangera B.Com., CAIIB Shri Shrikant Shintre M.Com., CAIIB., ICWAI BRANCH MANAGERS : Shri D.B. Puthran B.Com., GDC&A (Officiating Branch Manager) Shri Uday Kumar Kunder M.Com., CAIIB, GDC&A. (Sr. Manager) Shri G.C. Suvarna B.A., LLB., CAIIB, GDC&A. (Sr. Manager) Shri Suresh K. Amin B.Com., CAIIB, GDC&A. (Sr. Manager) Shri H.K. Shriyan M.Com., CAIIB, GDC&A. (Sr. Manager) Shri Madhusudan Iddya B.Com., CAIIB., GDC&A. (Officiating Branch Manager) Shri M.S. Kotian B.Com., LLB.(Gen.), CAIIB, GDC&A. (Sr. Manager) Shri Gopal M. Karkera M.Com., LLB, CAIIB (I), GDC&A. (Officiating Branch Manager) Shri Ramesh Salian B.Com., GDC&A (Officiating Branch Manager) Shri Vishwanath Puthran B.Com., LLB (Gen), CAIIB Shri. Shashidar M. Salian B.Com. (Officiating Branch Manager) Shri Divakar P. Salian B.Com., LLB., CAIIB, GDC&A (Officiating Branch Manager) * retired on 19th Aug Chief Executive Officer Dy. Chief Executive Officer A.G.M. (Accounts) A.G.M. (Loans, Advances & Development) Chief Manager* Chief Manager Chief Manager Chief Manager Sr. Manager - HRD & Admn. Sr. Manager - Recovery Sr. Manager - Recovery Sr. Manager - Treasury Manager - (Loans & Advances) Manager - (Loans & Advances) Manager - (Credit Monitoring) Manager - IT Executive - Business Development Advisor - Recovery Fort Branch Andheri (West) Branch Goregaon Branch Kurla Branch Borivali Branch Ghatkopar Branch Andheri (East) Branch Saki Naka Branch Kandivali (W) Branch Vikhroli Branch Dombivli (E) Branch Competency Centre - Kurla ANNUAL REPORT

4 From the Chairman s Desk Dear Members, It gives me immense pleasure to present before you the highlights of the Bank s performance during the fiscal year The Bank has made all-round progress in most of the key financial parameters. The Deposits of the Bank has increased from Rs crores to Rs crores, an increase of Rs crores and a growth of % over the previous year. Like wise the Advances has also increased from Rs crores to Rs crores. accounting for a growth of Rs crores over the previous year. We have deployed our funds judiciously which has improved the operating margins and due to which our Net Profit has increased significantly to Rs crores as against 2.45 crores last year. This year too, we have made an additional provision of Rs crores towards Bad and doubtful debts to strengthen our reserves which would be useful against any future impairment in Assets. We have been able to bring down the Gross NPA to 8.99% and the Net NPA to 3.30%. Although all efforts are being made to reduce it further, it shall be our endeavour to bring down the Net NPA to zero level. The Bank now stands on a sound footing and is steadily marching towards the Rs.1000 crores business mix. Our Bank has a long and cherished history and has stood the test of time and weathered many a storm during its long journey that started 67 years back. The bank having treaded cautiously in earlier years, the growth was at a slow pace but in the last few years the progress has been quite significant. This is because of some key initiatives and decisions taken by the management which was well supported by the staff members. Credit also goes to all our members who have reposed faith in us and stood by the bank even in the wake of all adversities. There has been lot of transformation taking place in the Banking sector. Technology is playing a dominant role in driving down costs, building efficiency and working as an enabler to make available the best possible services to the customer. Your Bank has kept pace with the fast growing changes and has been quick to put in place value added services like ATMs, RTGS/NEFT facility and SMS alerts. During the year, we also introduced ancillary services like issuance of Pan-card, facilitating purchase/sale of foreign exchange and payment of utility bills. This has helped us to generate more fee based income as well as cross sell our other products and services. Also on the anvil are services like Demat Services and Net / Mobile Banking. The Rupay Debit 4 ANNUAL REPORT

5 cum ATM Card which is a domestic card like the Visa or Master is ready to be launched soon as all pre launch checks have been successfully conducted. This card will give access to all our customers to more than one lac ATMs across the country. Your Bank has set its sights high and has plans to reach a business mix of Rs crores in the next couple of years and be in the league of the top 25 Co-operative Banks in the Country. We intend to become a Multi State Bank and go beyond Maharashtra to start Banking operations in our home State Karnataka. All these dreams and aspirations can only take shape if all our well wishers and members come forward with a single purpose of seeing the growth and welfare of the Bank. As a part of our Corporate Social Responsibility, we conducted career counselling sessions for aspiring students of 10th & 12th standards at our Andheri (W) Branch and also Medical check-up camps in coordination with Dr. Satish Sherigar and his Four Care Hospital, at our Andheri(W) and Borivili Branches. I would like to take this opportunity to thank all members of our staff for contributing whole heartedly to the Bank's progress. I would also like to extend my gratitude to our valued stakeholders for their continued patronage. We look forward to your continued faith and support to help us in scaling greater heights, and become one of the leading Co-operative Banks in Maharashtra. Thanking you, With Warm Regards, Kirthiraj K. Salian Chairman ANNUAL REPORT

6 VISION & CORE VALUES OF THE BANK Bank has adopted the following Vision Statement and Core Values. Vision Statement :- A GROWING BANK RUN BY TRUSTWORTHY PROFESSIONALS DRIVING CUSTOMER RELATIONSHIP SINCE Core Values of the Bank :- (i) (ii) (iii) RELATIONSHIP BUILDING RESPONSIVENESS TRUST 6 ANNUAL REPORT

7 THE MOGAVEERA CO-OPERATIVE BANK LTD. Registered & Administrative Office 203, Venkatesh Chambers, G.T. Marg (Prescot Road), Fort, Mumbai NOTICE Notice is hereby given that the Sixty Eighth Annual General Meeting of the Members of The Mogaveera Co-operative Bank Ltd. will be held on Saturday, the 28th September, at 3.30 p.m at the 'Mogaveera Bhavan' M.V.M. Educational Campus Road, Andheri (W), Mumbai to transact the following business. 1. To confirm the minutes of the 67th Annual General Meeting held on 11th August, To confirm the minutes of the Special General Body Meeting held on 18th May, To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2013 and Profit & Loss A/c for the year ended 31st March, 2013 together with the report of the Board of Directors thereon. 4. To approve the appropriation of net profit & declare dividend (if approved by RBI) as recommended by the Board of Directors for the year ended 31st March, To approve the write off of 42 old NPA accounts amounting to Rs.76,01, against 100% provision made and as certified by the Statutory Auditor. 6. To ratify the appointment of Auditors for the year for conducting Concurrent Audit / Other Audits. 7. To approve M/s RSVA & Co., Chartered Accountants as Statutory Auditors for the financial year Any other matter with the permission of the Chair. By Order of the Board of Directors, Place : Mumbai Dated : 26th August, 2013 Sd/- K. Sivaram Chief Executive Officer N.B. 1. If there is no quorum at the appointed time, the Meeting shall stand adjourned to 4.00 p.m. on the same day, at the same venue and the agenda of the Meeting shall be transacted whether there is a quorum or not in terms of Bye-law No. 24(i). 2. The Members desiring to ask questions about the statement of accounts are requested to furnish the same in writing to the Chief Executive Officer, at the Registered Office, atleast Three (3) days before the Annual General Meeting. ANNUAL REPORT

8 THE MOGAVEERA CO-OPERATIVE BANK LTD. Registered & Administrative Office 203, Venkatesh Chambers, G.T. Marg (Prescot Road), Fort, Mumbai Dear Members REPORT OF THE BOARD OF DIRECTORS TO THE SHARE HOLDERS PRESENTATION OF THE ANNUAL REPORT The Board of Directors of your Bank have pleasure in presenting to you the 68th Annual Report on the business and operational results of your Bank together with Audited Balance Sheet and Profit & Loss Account for the year ended 31st March Economic Scenario The Indian economy remained sluggish in , with slowdown turning visibly pervasive across most sectors. Growth continued to slow down in , but could witness a slow-paced recovery later this year, contingent on improved governance and concerted action to resolve structural bottlenecks. Subdued business and consumer confidence, reflected in various surveys, is expected to drag growth down. Headline inflation is likely to remain range-bound in , with some further moderation in H1 but slight increase in H2 on account of strong base effects. Most surveys anticipate modest gains, both on growth and inflation. Currently, significant macro-financial risks prevail from slow growth, high CAD and inflation above the threshold over which it becomes inimical to growth sustainability. Therefore, monetary policy would need to be calibrated recognising the very limited policy space available to ease further. Aggregate demand remained sluggish during with inflation impacting real consumption and cyclical and structural factors affecting investment. Corporate results suggest weak demand, with moderation in investment as well as consumption. Government consumption expenditure has decelerated, reflecting expenditure-cutting as part of its fiscal consolidation strategy. Corporate data on planned fixed investments indicate that investment slowed further during Given the intensity of the slowdown, a public investment stimulus balanced with offsetting reductions in current expenditures, along with concerted action to remove supply-side bottlenecks, are needed to shape the revival of the economy. The Reserve Bank eased monetary policy to revive investment and growth. It was guided by the imperative to optimally use the limited monetary space while balancing the concerns of persisting inflation and historically high CAD. In this vein, the Reserve Bank cumulatively reduced the repo rate by 100 bps in Furthermore, amidst increasing structural and frictional liquidity deficits, it injected `Rs1.5 trillion of primary liquidity through outright open market operations (OMOs). Also, Rs1.3 trillion of primary liquidity was infused through cuts in the Cash Reserve Ratio (CRR) since January Further liquidity requirements were met through LAF repos. 8 ANNUAL REPORT

9 Financial Highlights 2013 The salient financial features of the Bank for the year ended 31st March 2013 is summarized as under: (Rs in Lacs) 31/03/ /03/2012 Growth (%) 1 Share Capital Total Reserves Total Deposits Total Advances Working Capital Investments Net Profit Deposits Growth and composition of deposits for the last 3 years are given below: (Rs in Lacs) S. No. Type of Deposits % % % 1 Current Savings Term & Other Deposits Total It can be observed from the above that your Bank s deposit has registered an increase of Rs Lacs which shows a growth of 15.27%. Bank s low cost deposit stood at 29.03%. Advances Your Bank has deployed funds judiciously and credit off take has increased from Rs Lacs to Rs Lacs during registering a growth of 15.01%. Your Bank has continued to advance various types of loans such as Home Loans, Mortgage Loans, Loan against Gold Ornaments, Loan / Overdraft against tangible securities, Easy Loan for employed persons, Home Renovation / Improvement loan to members in accordance with the Bye-Laws / Loan Rules and RBI guidelines. ANNUAL REPORT

10 The purpose wise classification of loans and advances outstanding as on 31/03/2013 are as under: (Rs in Lacs) Purpose Balance as on 31/03/ Cottage & Small Scale Industries Professional & Self Employed Road & Water Transport Operators Retail Traders Wholesale Traders Education Ceremonial Housing a) Acquisition of House Property b) Repairs to House Property Medical - 10 Others Total Share Capital & Membership During the year your Bank has admitted 1506 new members. After deletion of 386 members who have ceased to be members on account of death, resignation and transfer of shares, the total membership stood at at the end of the current year as against in the previous year. Nominal membership stood at 2894 as against 2812 members last year. During the year we could add Net Share Capital of Rs Lacs thus taking total paid up share capital of your Bank to a comfortable level of Rs Lacs as on 31/03/2013. This growth is due to unflinching support of our valued shareholders. Reserve and Other Funds Your Bank s Reserves and other funds as at 31/03/2013 vis-à-vis 31/03/2012 are as under: (Rs in Lacs) 31/03/ /03/ Statutory Reserve Fund Building Fund Dividend Equalisation Fund Bad & Doubtful Debt Reserve Investment Fluctuation Fund Development Fund Staff Welfare Fund Contingency Pro. Agt. Std. Assets Revaluation Reserve Investment Depn. Reserve Overdue Interest Reserve ANNUAL REPORT

11 Proposed Appropriation of Profit Your Board of Directors recommend the appropriation of Profit of Rs Lacs as under 1 Statutory Reserve 25% Rs Lacs 2 8% (Subject to RBI Approval) Rs Lacs 3 Investment Fluctuation Reserve Rs Lacs 4 Building Fund Rs Lacs 5 To be carried over to next year Rs Lacs Total Rs Lacs Capital Adequacy Your Bank has always given importance to the Capital to Risk Assets Ratio which as per Reserve Bank of India guidelines is a vital financial parameter to assess the financial strength of a Bank. The Capital to Risk Asset Ratio (CRAR) of the Bank stood at a healthy 12.14% which is well above the stipulated / minimum level of 9%. Deposit Insurance Cover Deposit upto Rupees One Lac in respect of each depositor is fully protected by the Deposit Insurance and Credit Guarantee Corporation of India (DI&CGC). Your Bank has been regular and prompt in payment of insurance premium to the DI&CGC. The Board of Directors confirms that the advance premium has been paid upto 30/09/2013. Loan to Staff Your Bank has been sanctioning Housing Loans to staff at concessional rate of interest ranging from 5% to 6 ½ % p.a. as the case may be as per the Memorandum of Settlement subject to overall ceiling of 2% NDTL of the Bank. In addition to Housing Loan, your Bank has also been sanctioning Surety Loan to Staff at a concessional rate of 6% p.a. Additionally Bank has also introduced Staff Overdraft (SOD) facility to the staff members carrying 10.5% p.a. The total outstanding in all the staff loans together aggregates to Rs Lacs as on 31/03/2013. Staff Relations The Board of Directors would like to place on record their sincere appreciation of the efforts put in by the staff at all levels in rendering good customer service and achieving the present level of progress and growth of the Bank. The relationship between the Management and Employees continues to be cordial. Staff Training The Bank deputes management and staff to various training programmes conducted by well established institutions like Reserve Bank of India - College of Agricultural Banking, VAMNICOM, NAFCUB etc. The Bank deputed Chief Managers / Sr. Managers / Branch Managers / Officers and other staff for UDAAN Training Motivational, Leadership & Driving Change Programme. Bank is also conducting in-house training programmes for all staff periodically. ANNUAL REPORT

12 NPA Management The Bank continued its persistent efforts to restrict NPAs to the least level possible through stringent recovery and astute legal remedies. Appropriate strategies and consistent follow up resulted in enabling the Bank to restrict its Gross NPA at Rs Lacs as on 31st March The percentage of Gross NPA to Gross Advances stands at 8.99%. The Net NPA of the Bank stands at 3.30%. Cash & Bank Balance The Bank maintains requisite cash balance with Reserve Bank of India and sufficient liquid assets were also maintained as per section 18 and 24 of the Banking Regulation Act, 1949 as applicable to Co-operative Societies. Treasury Department - Investment Portfolio Your Bank has an investment of Rs Crore as on 31/03/2013 out of which an amount of Rs Crore has been invested in Government and other approved securities. The Bank s total investments in Government and other approved securities as on 31/03/2013 works out to 27.43% of the Net Demand and Time Liability (NDTL) of the Bank as against minimum 25% stipulated by the Reserve Bank of India. The investment of funds has been made judiciously taking adequate care to avoid any adverse impact of the fluctuating market conditions. Your Bank has earned substantial income by carefully deploying its surplus funds in Fixed Deposits with Private, Commercial and Scheduled Co-operative Banks. Investment made by your Bank in securities, eligible for SLR are held in constituent SGL Account with the Federal Bank Limited and Non SLR Investments in Demat Account with Stock Holding Corporation of India. Investments made in Government Securities are strictly as per Reserve Bank of India guidelines and adequate SLR has been maintained by the Bank throughout the year. Insurance Business Your Bank has tied-up with Bajaj Allianz General Insurance Company for General Insurance Business on referral basis. For Life Insurance solutions Bank has tied up as Corporate Agent of Kotak Mahindra Old Mutual Life Insurance Company. This has not only helped generate income to your Bank but also helped our customers / shareholders to easily avail General as well as Life Insurance facilities through our Branches. The Board of Directors seek continued co-operation from the members to strengthen the insurance business with a view to broaden customer base and to augment commission income of the Bank. Foundation Day Your Bank celebrated Foundation Day on 18th March 2013 at all the Branches & Administrative Office to commemorate the establishment of our Bank on the day in the year Directors visited branches and met the customers and enquired about the service rendered and if they had any suggestions for the improvement of the Bank. Automated Teller Machine (ATM Facility) RUPAY Cards The Board of Directors are pleased to inform the members that Bank has already opened ATMs at Andheri (W), Kurla and Goregaon. Bank will be shorty opening ATM at Ghatkopar (East) Branch. 12 ANNUAL REPORT

13 In order to give the ATM facility to all its customers, Bank has tied up with ICICI Bank to introduce RUPAY Debit cum ATM Card which is linked to the National Financial Switch managed by the National Payment Corporation of India. Rupay Card is a domestic card like Visa or Master Card and shall give our customers access to more than One Lac ATMs across the country. Core Banking Solutions (CBS) Your Bank has successfully implemented Core Banking Solutions. All its Branches are inter connected with each other enabling customers to avail Banking Facility at any of the Branches. Your Bank is in consultations with the software vendor for providing valued added services like internet banking and mobile banking. Customers are already enjoying the services of SMS alerts enabling them to know their transactions taking place in their accounts through their mobiles. All the members are requested to avail the additional facilities available in the CBS programme and register their mobile numbers with the respective branches immediately. Adoption of New Model Bye-Laws As per the Guidelines suggested by Govt. of Maharashtra, Bank has called the Special General Body Meeting on 18th May 2013 for adoption of the new model bye-laws. Approval of the same is awaited from the Registrar of Co-op. Societies, Pune. Corporate Social Responsibility Bank conducted various programmes as part of Social Responsibility. Bank conducted career counselling sessions for aspiring students of 10th & 12th standards at our Andheri (W) Branch and also Medical check-up camps in coordination with Dr. Satish Sherigar and his Four Care Hospital, at our Andheri(W) and Borivili Branches. Audit and Inspection The Books of the Bank were audited by the Statutory Auditors M/s. S. V. Shetty & Associates, Chartered Accountants appointed by the Bank from the panel approved by Commissioner for Cooperation and Registrar, Co-operative Societies, Maharashtra State, Pune. Besides the Statutory Audit, the Bank has also appointed Concurrent Auditors namely: 1. M/s. Yashwant & Co. Chartered Accountants 2. M/s. K. B. Jorapur & Co. Chartered Accountants 3. M/s. Jagdish & Harish Chartered Accountants Your Bank has also been appointing System Auditor and Investment Auditor as required by Reserve Bank of India. Statutory Inspection of the Bank under section 35 of the Banking Regulation Act 1949 (as applicable to Co-operative Societies) was conducted by Shri S. S. Vishwanathan, Assistant General Manager, Reserve Bank of India, Urban Banks Department with reference to Bank s financial position as on 31st March No major irregularities has been pointed out in the Inspection. Internal Audit Department In order to further strengthen Internal Control System the Bank had also set up a full fledged Internal Audit Department. Audit Classification The Bank has been awarded Audit Class A for the year ANNUAL REPORT

14 Various Ancillary Services to Customers 1) Demand Draft Facility We are happy to inform the members that Axis Bank is offering us Demand Draft drawing facility. We wish to state that large number of our customers are availing this service to remit their funds to places all over the country. 2) RTGS / NEFT Facilities are available for our customers and members Bank has tied up with IDBI Bank Ltd. and is offering RTGS/NEFT facilties to all the customers. We have been allotted our own unique IFSC code (IBKL0452MCB). 3) Foreign Exchange facility / Pan Card Services / Utility Bills Payment Services. During the year, we also introduced ancillary services like issuance of Pan Card, facilitating purchase/sale of foreign exchange and payment of unility bills for our customers. 4) Safe Deposit Lockers We are offering Safe Deposit Locker Facility at our following Branches: i) Andheri (W) v) Andheri (E) ii) Goregaon (W) vi) Kandivali (W) iii) Borivali (W) vii) Vikhroli (W) iv) Ghatkopar (E) viii) Dombivili We request all our members to avail the Safe Deposit Locker Facilities at the aforesaid Branches. Acknowledgement The Board of Directors take this opportunity to express their gratitude to all the members, depositors, borrowers and well wishers for their whole hearted patronage. The Board records its appreciation for all the co-operation extended by the officers of the: Reserve Bank of India especially the Urban Bank Department and Public Accounts Department Government of Maharashtra The Commissioner for Co-operation and Registrar of Co-operative Societies, Maharashtra State, Pune Divisional Joint Registrar District Deputy Registrar Deputy Registrar Co-operative Societies, Mumbai (I) City. The Board is also thankful to The Mogaveera Vyavasthapaka Mandali Sponsors of the Bank Brihan Mumbai Bankers Clearing House / National Clearing Cell / SBI Cheque Processing Centre The Statutory Auditors M/s. S. V. Shetty & Associates, Chartered Accountants. The Concurrent Auditors M/s. Jagdish & Harish Chartered Accountants, M/s. Yashwant & Co. Chartered Accountants, M/s. K. B. Jorapur & Co. Chartered Accountants. The Chairman, The Chief Executive Officer and other members of the Brihan Mumbai Nagari Sahakari Banks Association, The Maharashtra Urban Co-operative Banks Federation Ltd. The National Federation of Urban co-op. Banks and Credit Societies Ltd., (NAFCUB) New Delhi. The Maharashtra State Co-operative Bank Ltd., Urban Banks Dept., Vashi The Mumbai District Central Co-op. Bank Ltd., Urban Banks Dept., Fort, Mumbai The Board conveys its sincere thanks to Our Bankers: Reserve Bank of India State Bank of India 14 ANNUAL REPORT

15 The Maharashtra State Co-op. Bank Ltd. The Mumbai District Central Co-op. Bank Ltd. Axis Bank Ltd. IDBI Bank Ltd. The Federal Bank Ltd. Bank of India The Saraswat Co-op. Bank Ltd. The Shamrao Vithal Co-op. Bank Ltd. The Cosmos Co-op. Bank Ltd. ICICI Bank Ltd. The Bharat Co-op. Bank Ltd. The Abhyudaya Co-op. Bank Ltd. The Karad Urban Co-op. Bank Ltd. The Board conveys its sincere thanks to: Bank s Legal Advisors Solicitors & Advocates M /s. Lata Desai & Pallavi Divakar M/s. Annie Fernandes & Associates M/s. Mahesh Menon & Co. M/s. Legaleye Associates M/s. Unisan & Co. Sarvashri: M. S. Naik, P. V. Kamath, C. S. Karkera, Ishwar Badigannavar, K. B. Adhyantaya, M. S. Prasad, Yogendra M. Kanchan, Chandra Naik, M. I Para, Harish Pawar, Ms. Latika Hegde & Ms. Megha Mahajan. For and on behalf of the Board of Directors Place: Mumbai Date: 26th August 2013 Sd/- Kirthiraj K. Salian Chairman ANNUAL REPORT

16 S. V. SHETTY & ASSOCIATES CHARTERED ACCOUNTANTS To, The Members, The Mogaveera Co operative Bank Ltd. Mumbai INDEPENDENT BANK AUDITOR S REPORT Report on Financial Statements 1. We have audited the accompanying Financial Statements of The Mogaveera Co-operative Bank Ltd, Mumbai which comprise the Balance Sheet as at 31st March 2013, Profit and Loss Account and the Cash Flow Statement for the year ended on that date and other explanatory information. Management s Responsibility for the Financial Statements: 2. Management of the Bank is responsible for the preparation of these Financial Statements that give true and fair view of the financial position and financial performance of the Bank in accordance with the Banking Regulation Act,1949, Banking Laws (Applicable to Co-operative Societies) Act 1965 and MCS Act 1960 and MCS Rules This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility: 3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The Procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our Audit opinion. Basis for Qualified Opinion a. The impact of Deviations in compliance of Accounting standards AS-9 and AS -22 on the profit for the year could not be quantified due to non availability of relevant information and non disclosure in respect of Accounting standards, AS-6, AS-10, AS-19 issued by The Institute of Chartered Accountants of India. 16 ANNUAL REPORT

17 b. Derecognition of interest of Rs /- is not reduced from the advances. To this extent advances are overstated. c. Bank has written off an amount of Rs during the year to the Profit and Loss Account being 20% of the total amount of VRS. This is not in accordance with the normally accepted accounting practice and Bank should have debited the total amount to the Profit and Loss Account. Hence profit for the year is over stated to the extent of Rs Opinion 6. In our opinion, and to the best of our information and according to the explanation given to us, read with the Notes to the accounts except for the effects of the matter described in the Basis for the Qualified opinion paragraph, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Balance Sheet, of the state of affairs of the Bank as at March 31, 2013; and (b) in the case of Profit and Loss Account, of the Profit for the year ended on that date; (c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 7. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 31 of the Banking Regulation Act, 1949 ( as applicable to Co operative societies); 8. Subject to the limitations of the audit as indicated in Paragraphs 3 to 5 above, we report that: a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of the audit and have found them to be satisfactory. b. The transactions of the bank which have come to our notice have been within the powers of the Bank. c. The returns received from the branch offices of the bank have been found adequate for the purpose of the Audit. 9. We further report that: a. the Balance Sheet and Profit and Loss account dealt with by this report are in agreement with the books of account and returns; b. except for the effects of the matter described in the Basis for the Qualified opinion paragraph, in our opinion, proper books of accounts as required by The Maharashtra State Co operative Societies Act, 1960, MCS Rules, 1961 and as required by the Byelaws have been kept by the bank so far as appears from our examination of those books. For S. V. SHETTY & ASSOCIATES. CHARTERED ACCOUNTANTS FRN : W Mumbai, Sd/- S. V. SHETTY Partner M.No ANNUAL REPORT

18 CAPITAL & LIABILITIES Rupees Rupees SHARE CAPITAL Authorised Capital 250,000,000 25,00,000 Shares of Rs. 100/- each 250,000,000 Subscribed & Paid-up Capital Shares of of Rs 10/ each & Shares of Rs. 100/- each 154,332,420 Individuals & others 161,122,670 0 Co-operative Institution 0 161,122,670 RESERVE FUND & OTHER RESERVES 55,061,715 Statutory Reserve 65,169,516 40,540,000 Building Fund 40,540,000 4,739,772 Dividend Equalisation Fund 4,739, ,495,024 Bad & Doubtful Debts Reserve 201,495,024 1,000,175 Investment Fluctuation Reserve 7,140,175 4,919,000 Investment Depreciation Reserve 4,919, ,574 Staff Welfare Fund 166,574 11,788,000 Contingency Prov. against STD Assets 14,288,000 67,160,721 Revaluation Reserve 60,444,649 2,580,000 Development Fund 2,580, ,450, ,482,710 DEPOSIT & OTHER ACCOUNTS (i) Fixed Deposits 706,154, Individuals 883,329, Central Co-op. Banks 0 4,040, Other Societies 4,754, ,194, ,084,129 (ii) Saving Deposits 1,271,655, Individuals 1,308,769, Central Co-op. Banks 0 35,125, Other Societies 36,685,508 1,306,781,092 1,345,454,626 (iii) Current Deposits 294,442,462 1 Individual 276,224, Central Co-op. Banks 0 1,232,031 3 Other Societies 1,356, ,674, ,580,869 (iv) Recurring Deposits 81,430,015 1 Individual 93,146, Other Societies 0 81,430,015 93,146,932 Balance Sheet 523,783,401 carried forward 562,605, ANNUAL REPORT

19 As at 31st March PROPERTY & ASSETS Rupees Rupees CASH AND BANK BALANCES 39,692,720 Cash on Hand 51,465,220 86,801,041 CD with Reserve Bank of India 134,520,988 Current Deposits with : 2,852,780 SCB/DCCB : SCHEDULE - I 352,839 13,419,585 SBI and Notified bank : SCHEDULE - II 5,970,990 4,804,001 Urban Co-op. Bank : SCHEDULE - III 0 130,109,232 Pvt. and Comm. Bank : SCHEDULE -IV 121,067, ,390, ,185,598 0 MONEY AT CALL & SHORT NOTICE 0 INVESTMENTS 1,313,270,186 Central & State Govt. Securities 1,479,117,886 Face Value Market Value ,974,000 Non SLR Investments 39,974, ,065 Shares & Debentures 100,065 1,353,344,251 1,519,191,951 FIXED DEPOSITS WITH : 857,804,206 Urban Co-op. Bank : SCHEDULE V 798,232,950 50,000,000 Pvt. and Comm. Bank : SCHEDULE -VI 130,000, ,804, ,232,950 2,447,424,901 2,261,148,457 LOANS AND ADVANCES (i) Short Term Loans (a) Secured against Tangible Security 1,360,313,182 1,047,798,783 (b) Unsecured Loans 560,475 3,927,821 Amount due from 1,360,873,657 1,051,726,604 Individuals Amt overdue ,538,827,816 carried forward 2,760,802,029 ANNUAL REPORT

20 CAPITAL & LIABILITIES Rupees Rupees 523,783,401 brought forward 562,605,380 (v) Laxmi Daily Deposits 91,759,598 1 Individual 96,709, Other Societies 0 91,759,598 96,709,047 vi) Matured FD 1,475,214 1 Individual 1,878, Other Societies 0 1,475,214 1,878,666 (vii) Akshaya/Kshema Samridhi /MMS 2,326,144,240 1 Individual 2,818,859,614 36,174,274 2 Other Societies 54,964,508 2,362,318,514 2,873,824,122 (vii) Non-Operative Accounts 165,946 1 Individual 165, Other Societies 0 165, ,946 Balance Sheet (ix) Other Deposits 467,295 1 Individual 14,109, Other Societies 0 467,295 14,109,544 5,590,953,881 4,850,266,395 Borrowings from : 0 i) The Bharat Co-op Bank Ltd. -5,235,812 0 ii) The Saraswat Co-op Bank Ltd. -225,867 0 iii) The Shamrao Vittal Co-op. Bank Ltd. -1,510, ,316,725 iv) The Cosmos Co-op Bank Ltd. -1,278,531 0 v) The Karad Urban Co-op Bank Ltd. -806,250 14,950,939 vi) The Abhyudaya Co-op. Bank Ltd. -6,018,750 0 vii) IDBI Bank Ltd. 39,990,000 0 viii) The Federal Bank Ltd. -159,045 24,754, ,267, ,103 Bills for collection (As per Contra) 119, ,162,328 OVERDUE INTEREST RESERVE (As per contra ) 125,862,016 5,660,952,891 carried forward 6,304,295, ANNUAL REPORT

21 As at 31st March PROPERTY & ASSETS Rupees Rupees 2,538,827,816 brought forward 2,760,802,029 (ii) Medium Term Loans 1,261,058,442 (a) Secured against Tangible Security 1,399,473,271 (b) Unsecured Loans 4,341,823 5,674,917 Amount due from 1,403,815,094 1,266,733,359 Individuals Amt overdue iii) Long Term Loans 660,693,748 (a) Secured against Tangible Security 661,755,823 0 (b) Unsecured Loans 0 660,693, ,755,823 Individuals Amt overdue ,979,153,711 3,426,444,574 INTEREST RECEIVABLE 21,216,898 On Investments 23,136, ,375 On other Deposits 11,644,759 34,781,630 21,475, ,018 Branch Adjustment 489, ,103 Bills for Collection (As per contra) 119, ,162,328 INTEREST RECEIVABLE ON LOANS 125,862,016 &ADV. (NPA) (As per contra) 5,668,627,249 carried forward 6,348,499,387 ANNUAL REPORT

22 Balance Sheet CAPITAL & LIABILITIES Rupees Rupees 5,660,952,891 brought forward 6,304,295,821 14,788,596 INTEREST PAYABLE ON DEPOSITS 13,323,551 OTHER LIABILITIES 1,476,295 Unclaimed Dividend 4,056,931 19,939,125 Pay Order 18,453, ,526 Audit Fee Payable 991,006 14,122,023 Sundry Liabilities 16,723,937 6,571,499 Leave Encashment payable 10,507,888 50,732,996 43,050,468 45,308,582 PROVISION FOR GRATUITY 50,510,967 PROFIT & LOSS ACCOUNT 42,933,519 Profit & Loss as per last Balance sheet 31,534,449 35,866,640 Less: Appropriations 23,000,000 7,066,879 8,534,449 24,467,570 Add: Profit as per Profit & Loss A/c 46,622,843 31,534,449 55,157,292 55,157,292 CONTINGENT LIABILITIES Bank Liabilities for Guarantee Issued on behalf of the customers for Rs. 34,81,771 (Previous year : Rs 29,01,645) 5,795,634,986 carried forward 6,474,020, ANNUAL REPORT

23 As at 31st March PROPERTY & ASSETS Rupees Rupees 5,668,627,249 brought forward 6,348,499,387 PREMISES 90,697,458 Balance as per last Balance Sheet 81,627,781 0 Additions during the year 0 90,697,458 81,627,781 0 Less: Deduction 0 90,697,458 81,627,781 7,462,302 Less: Depreciation on Revaluation Reserve 6,716,072 1,607,375 Less: Depreciation on Premises 1,446,636 81,627,781 73,465,073 CIVIL WORKS 1,177,505 Balance as per last Balance Sheet 1,059,749 0 Additions during the year 0 117,756 Less: Depreciation 105,975 1,059, ,774 FURNITURE & FIXTURES 14,097,603 Balance as per last Balance Sheet 13,396, ,478 Additions during the year 2,832,305 14,926,081 16,228,316 74,646 Less: Deduction 139,083 1,455,424 Less: Depreciation 1,537,158 13,396,011 14,552,075 ELECTRICAL FITTINGS 1,410,915 Balance as per last Balance Sheet 1,288,152 96,079 Additions during the year 41,816 1,506,994 1,329,968 0 Less: Deduction 0 218,842 Less: Depreciation 198,370 1,288,152 1,131,598 OFFICE EQUIPMENTS 1,288,114 Balance as per last Balance Sheet 1,748, ,506 Additions during the year 335,625 2,102,620 2,084,287 0 Less: Deduction during the year 9, ,958 Less: Depreciation 313,553 1,748,662 1,761,438 SAFE DEPOSIT LOCKERS 902,288 Balance as per last Balance Sheet 812,057 0 Additions during the year 0 902, ,057 90,231 Less: Depreciation 81, , ,851 5,768,559,661 carried forward 6,441,094,196 ANNUAL REPORT

24 Balance Sheet CAPITAL & LIABILITIES Rupees Rupees 5,795,634,986 brought forward 6,474,020,627 5,795,634,986 carried forward 6,474,020, ANNUAL REPORT

25 As at 31st March PROPERTY & ASSETS Rupees Rupees 5,768,559,661 brought forward 6,441,094,196 VEHICLE 1,414,921 Balance as per last Balance Sheet 1,131,937 0 Additions during the year 0 1,414,921 1,131, ,984 Less: Depreciation 226,387 1,131, ,550 CORE BANKING - Hardware 2,198,619 Balance as per last Balance Sheet 1,230,696 1,130,648 Additions during the year 2,189,789 3,329,267 3,420,485 52,670 Less: Deduction during the year 25,826 2,045,901 Less: Depreciation 1,054,736 1,230,696 2,339,923 ATM MACHINES 2,726,467 Balance as per last Balance Sheet 1,267,796 0 Additions during the year 0 2,726,467 1,267,796 Less: Deduction 1,458,671 Less: Depreciation 1,267,796 1,267,796 0 CORE BANKING - Software 269,268 Balance as per last Balance Sheet 153,087 81,082 Additions during the year 3,135, ,350 3,288, ,263 Less: Depreciation 2,142, ,087 1,146,240 5,772,343,177 carried forward 6,445,485,909 ANNUAL REPORT

26 Balance Sheet CAPITAL & LIABILITIES Rupees Rupees 5,795,634,986 brought forward 6,474,020,627 5,795,634,986 TOTAL RUPEES 6,474,020,627 As per our report of even date M/s S. V. Shetty & Associates Chartered Accountants FRN: W Sd/- S. V. Shetty Partner M.N Sd/- Shri K. Sivaram Chief Executive Officer Place : Mumbai Dated : 26th August ANNUAL REPORT

27 As at 31st March PROPERTY & ASSETS Rupees Rupees 5,772,343,177 brought forward 6,445,485,909 MTNL Lease Line for Core Banking 402,840 Balance as per last Balance Sheet 362,556 0 Additions during the year 0 402, ,556 40,284 Less: Depreciation 36, , ,556 OTHER ASSETS 23,664 Locker Rent Receivable 104,071 9,036 Stamps on hand 16,441 1,513,671 Stock of Printing & Stationery 1,750,637 2,730,230 Security Deposits 2,746,398 2,096,404 Festival Advance 2,183,138 1,220,004 Tax Penalties on Assessment 6,852,384 10,784,501 Deferred Revenue Expenditure 10,412,625 4,551,743 Miscellaneous Assets 4,142,722 28,208,416 22,929,253 5,795,634,986 TOTAL RUPEES 6,474,020,627 For and on behalf of the Board Sd/- Shri Kirthiraj K. Salian Chairman Sd/- Shri Shekar Y.Suvarna Vice - Chairman DIRECTORS Shri Ganesh S. Puthran Shri Pradeep M. Chandan Shri Gopal C.Kanchan Shri B.J. Shriyan Shri Kishore Kumar Shri K.A. Kunder Shri V.K.Suvarna Shri A. K. Thingalaya Shri Shridhar M. Salian Shri Arun H. Gaikwad Shri Vasudev J. Tandel Shri G.M. Tandel Shri Vasudev Krishna Dhanu Smt. Premlata G.Sakpal Smt. T. Anuradha Vijay Shri Yaduveer B. Puthran - Staff Rep. Shri Kishore C. Kunder - Staff Rep. ANNUAL REPORT

28 Profit & Loss Account EXPENDITURE Rupees Rupees 351,707,871 Interest on Deposits & Borrowings 397,189,768 95,318,135 Salary & Allowance 120,941, ,950 Directors Fees & Allowances 971,430 13,536,557 Rent, Rates & Taxes. 14,483, ,252 Legal Charges 560,402 1,987,924 Postage, Telegram and Telephone 1,902,139 1,776,872 Audit Fees 1,970,686 3,156,457 Printing, Stationery & Advertisement 5,739,483 7,868,689 Depreciation on Fixed Assets 8,410,409 0 Depreciation on Investments 2,287,000 5,060,212 Commission on LDD 5,664,310 3,760,247 Repairs & Maintenance 5,873,986 12,414,308 Other Expenses 16,972,343 5,226,606 Amortisation of Premium on Investments 5,226,606 4,435,228 DICGC Premium 5,027,512 30,000 Contribution to Education Fund 30,000 2,500,000 Contingency provision for Std Assets 2,500,000 4,382,000 Provision for Investment Depreciation Reserve 0 20,000,000 Provision for BDDR 20,000,000 24,467,570 Balance of Profit carried to Balance Sheet 46,622, ,017,878 TOTAL RUPEES 662,374,133 As per our report of even date M/s S. V. Shetty & Associates Chartered Accountants FRN: W Sd/- S. V. Shetty Partner M.N Sd/- Shri K. Sivaram Chief Executive Officer Place : Mumbai Dated : 26th August ANNUAL REPORT

29 For the year ended 31st March INCOME Rupees Rupees Interest and Discount 340,851,952 Loans and Advances 414,876, ,417,608 Investments 186,133, ,269, ,009,564 8,032,203 Profit on Sale of Investments 24,652,453 1,327,887 Commission & Brokerage 1,414,065 1,258,854 Locker Rent 1,463,320 19,129,374 Miscellaneous Receipts 33,834, ,017,878 TOTAL RUPEES 662,374,133 For and on behalf of the Board Sd/- Shri Kirthiraj K. Salian Chairman Sd/- Shri Shekar Y.Suvarna Vice - Chairman DIRECTORS Shri Ganesh S. Puthran Shri Pradeep M. Chandan Shri Gopal C.Kanchan Shri B.J. Shriyan Shri Kishore Kumar Shri K.A. Kunder Shri V.K.Suvarna Shri A. K. Thingalaya Shri Shridhar M. Salian Shri Arun H. Gaikwad Shri Vasudev J. Tandel Shri G.M. Tandel Shri Vasudev Krishna Dhanu Smt. Premlata G.Sakpal Smt. T. Anuradha Vijay Shri Yaduveer B. Puthran - Staff Rep. Shri Kishore C. Kunder - Staff Rep. ANNUAL REPORT

30 CURRENT DEPOSITS WITH: (Amount in Rs.) A SCB of the State/DCB of the District SCHEDULE - I ) The Maharashtra State Co-operative Bank Ltd ) The Mumbai Distict Co-operative Bank Ltd B SBI/NOTIFIED BANKS SCHEDULE II ) State Bank of India ) Syndicate Bank ) Dena Bank 0 0 4) Bank of India ) Canara Bank C URBAN CO-OP BANKS SCHEDULE III ) The Saraswat Co-operative Bank Ltd ) The Bharat Co-operative Bank Ltd ) TheShamrao Vithal Co-op Bank Ltd D PVT/ COMMERCIAL BANKS SCHEDULE IV ) HDFC Bank Ltd ) ICICI Bank Ltd ) Federal Bank Ltd ) Axis Bank Ltd ) IDBI Bank Ltd GRAND TOTAL FIXED DEPOSITS WITH: E URBAN CO-OP BANKS SCHEDULE V ) The Saraswat Co-operative Bank Ltd ) The Bharat Co-operative Bank Ltd ) The Shamrao Vithal Co-op Bank Ltd ) The Cosmos Co-op. Bank Ltd ) The Abhyudaya Co-op Bank Ltd ) The Karad Urban Co-op Bank Ltd ) The New India Co-op. Bank Ltd ) The Greater Bombay Co-op Bank Ltd F PVT/ COMMERCIAL BANKS SCHEDULE VI ) Lakshmi Vilas Bank Ltd ) Federal Bank Ltd ) IDBI Bank Ltd GRAND TOTAL ANNUAL REPORT

31 ANNEXURE A SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE FINANCIAL STATEMENTS AS ON 31st MARCH, 2013 I. BACKGROUND: - THE MOGAVEERA CO-OPERATIVE BANK LTD.,was incorporated on The bank provides services through Eleven Branches and an Administrative office. The area of operation of the Bank as per the bye laws is entire state of Maharashtra. II. BASIS OF PREPARATION: - The financial statements have been prepared under historical cost convention and on accrual basis of accounting unless otherwise stated, and in accordance with generally accepted accounting principles and conform to the statutory requirements prescribed under the Banking Regulation Act, 1949, circulars issued by the Reserve Bank of India (RBI) from time to time and current practices prevailing within the banking industry in India. The presentation of the financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. III. SIGNIFICANT ACCOUNTING POLICIES: - i) Accounting Convention : - The financial statements are drawn up in accordance with the historical cost convention and on the going concern basis. They are in conformity with generally accepted principles and practices prevailing in India, Statutory provisions and guidelines issued by RBI, Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) except where otherwise stated. ii) Revenue Recognition : Income and Expenditure are accounted on accrual basis except as stated below: a) Income from NPA is accounted on cash basis on realisation as per guidelines issued by the RBI. b) Interest for usance period in the case of Bills Discounted under Letter of Credit is recognized on cash basis at the time of discounting of bills. Interest on overdue bills is recognized at the time of its realization. c) Dividend on investment, commission, incidental charges, services charges are accounted on cash basis. d) Ex-gratia payment to employees on cash basis. iii) Advances: a) The bank as per prudential norms on Income recognition and Assets classification has classified it s advances portfolio into three categories as under: - Standard Assets - Sub-Standard Assets - Doubtful and Loss Assets The Provision for each category is made in accordance with prudential norms. ANNUAL REPORT