shivalik mercantile co-operative bank ltd. · pdf filevijay kumar dhingra chairman...

SHIVALIK MERCANTILE CO-OPERATIVE BANK LTD.Regd. Office : 13/1207, Ansari Road, Saharanpur-247001 (U.P.)

e-mail : [email protected], web : www.shivalikbank.com

17th ANNUAL REPORT 2013–2014

Our Branch & ATM Network

Branches, BC Offices, ATMs & CDMs in Uttar Pradesh

Distt. SaharanpurHead Office & Branch : Hakikat Nagar, Saharanpur-247001

Ansari Road Branch : 13/1207, Ansari Road, Saharanpur-247001

Chilkana Road Branch: Chilkana Road, Saharanpur-247001

Gangoh Branch : Rambagh Road, Gangoh-247341

Sarsawa Branch : Main Market, Sarsawa

Telefax: (0132) 2726125, 2726147, 9927135550

Ambehta Branch : Main Road, Ambehta-247340 Telefax: (01331) 225311, 9927165550

Telefax: (0132) 2612381, 2612382, 9927145550

Telefax: (0132) 2650021, 9690990033

Deoband : Manglore Chowki, G.T. Road, Deoband-247554 Telefax: (01336) 222808, 9568880001

Telefax: (01331) 234437, 234438, 9927116660

Nagal Branch : G.T. Road, Nagal Telefax: (01336) 231112, 9690004794

Nanauta Branch : Deoband Road, Nanauta Telefax: (01336) 253125, 9927986125

Rampur Branch : Moh. Mahajanan, Rampur Maniharan Telefax: (01336) 252125, 9927007125

Telefax: (01331) 246125, 9690004994

Sharda Nagar : Near Flyover, Khalasi Line, Saharanpur Mobile : 84770 06125

New Madho Nagar (Coming Shortly)

BC Offices: Nakur, Chhutmalpur & Chilkana

Distt. Muzaffarnagar

Khatauli : Ward No. 8, Ganeshpuri, G.T. Road, Khatouli Mobile : 95689 25000

Muzaffarnagar Branch : South Bhopa Road, Nai Mandi, Muzaffarnagar Mobile : 98374 00037

Distt. MeerutMeerut Branch : C-2/6, Nai Sadak, Shastri Nagar, Meerut-250001 Telefax: (0121) 2604364, 9690563000

BC Offices: Mawana, Hastinapur, Maliyana

Distt. GhaziabadGhaziabad Branch : Bhatiya Mor, G.T. Road, Ghaziabad-201001 Mobile: 8750037222

Indirapuram Branch : Raison Shopping Complex, Ahinsa Khand II,

Indirapuram Ghaziabad Mobile : 95408 12228

Distt. Gautam Budh Nagar

Noida Branch : Sector 27, Near Vinayak Hospital, Noida-201301 Telefax: (0120) 2555333,09540407222

Noida Sector 135 : WA 68, Sector 135, Noida Mobile : 99901 06135

BC Offices: Barola, Nithari & Sadarpur

Dhar Branch : Chhota Rajwada, Dhar-454001 (M.P.) Telefax: (07292) 222413

Branches, BC Offices, ATMs & CDMs in Madhya Pradesh

Distt. Dhar

Indore Branch : Bhagwati Palace, Pooja Dairy Lane,

100 Jaora Compound, Indore-452001 (M.P.) Telefax: (0731) 2704268, 9424024399

BC Offices: Barola, Nithari & Sadarpur

Distt. Indore

CONTENTS

Page No.

1. Board of Directors 4

2. Notice of Annual General Meeting 6

3. Message from the Chairman 7

4. Progress of Bank 10

5. Annual Report 11

6. Auditor's Report 17

7. Balance Sheet 19

8. Profit and Loss Account 21

9. Significant Accounting Policies and Notes on Accounts 30

10. Appropriation of Profit for the year 2013-14 41

11. Budget of the Bank for the year 2015-16 42

12. Operational Plan / Targets for 2015-16 42

13. Long Term Perspective Plan 43

14. Progress at a Glance 44

15. Our Profile and Achievements 45

16. Our Customer Service Initiatives 49

Shiv Puran GulatiVice Chairman

Dr. Sanjeev MittalDirector

Dr. Kamal KantDirector

D. K. Mittal Director

Sudhakar AgarwalDirector

Sarvesh SinghalDirector

Yashvir Kumar GuptaChairman

Sanjay GuptaDirector

Pradeep Kumar GargDirector

Anvesh GargDirector

Vijay Kumar DhingraDirector

Ram SudharFormer DGM RBI

Special Invitee Director

BOARD OF DIRECTORS

4

Satyasheel Rao Director

DIRECTORS OF THE BANK

S.No. Name Designation

Address

Office Residence

1

2

3

4

5

6

7

8

9

10

11

Sh. Yashvir Kumar Gupta

Sh. Shiv Puran Gulati

Sh. Sudhakar Agarwal

Dr. Sanjeev Mittal

Sh. Pradeep Kumar Garg

Dr. Kamal Kant

Sh. Anvesh Garg

Sh. Vijay Kumar Dhingra

Chairman

Vice-Chairman

Director

Director

Director

Director

Director

Director

Director

Director

Sh. Sanjay Gupta

Chartered Accountant

Sh. Sarvesh SinghalAdvocate

Devendra Service Station,Ambehta, Distt. SaharanpurTel. : (01331) 225204, 225206

Indian Herbs Research & Supply Co. Ltd. Sharda Nagar, SaharanpurTel.: (0132) 2727920

City Railway Booking AgencyRailway Road, SaharanpurTel.: (0132) 2724346 2643862

15 Kishore Bagh, Delhi RoadSaharanpurTel.: (0132) 2762856, 2763530

Janakpuri Chowk, Dehradun RoadSaharanpurTel.: (0132) 2661399

Opp. H.D.F.C. Bank, 1st FloorCourt Road, Saharanpur

Daas Service StationDeoband, Distt. SaharanpurTel.: (01336) 222253, 222248

Moh. Baburai Gangoh, Distt. SaharanpurTel.: (01331) 232225

Om Rice Mill, Main RoadAmbehta, Distt. SaharanpurTel.: (01331) 225221

C/o Jai Bharat Auto EngineersG.T. Road, Near Flyover, GhaziabadTel.: (0120) 4165463, 9311585595

12 Sh. Satyasheel Rao Director Satya Villa, Ratlam Road, Naugaon, Dhar (M.P.)Tel.: (07292) 233370

Satya Villa, Ratlam Road, Naugaon, Dhar (M.P.)Tel.: (07292) 233370

13/1207, Ansari Road, SaharanpurTel.: (0132) 2644586Mob.: 9837050500

'Ashirwad' Gill Colony, SaharanpurTel.: (0132) 2727228, 2722638Mob.: 9719217802

B-85 Avas Vikas ColonyDelhi Road, Saharanpur Tel.: (0132) 2760931, 9837010385

15, Kishore bagh, Delhi RoadSaharanpurTel.: (0132)2762856, 2763530Mob.: 9837029705

Janakpuri Chowk, Dehradun RoadSaharanpurMob.: 9837058835

5 Phase-II Pant Vihar, SaharanpurTel.: (0132) 2765464Mob.: 9837260747

Moh. ChahparasDeoband, Distt. SaharanpurTel.: (01336) 222348Mob.: 9837365258

Moh. Baburai, GangohDistt. SaharanpurTel.: (01331) 232225, 9412557048

Moh. Bazar KalaGangoh, Distt. SaharanpurTel.: (01331) 232055, 9412557239

Parshvnath Majestic Floors T-II203-A Indirapuram, GhaziabadMob.: 9310461900

Sh. D. K. Mittal Director B-71, Sector 44, NoidaDistt. G.B. Nagar 201301 (U.P.)Tel.: (0120) 4222439

B-71, Sector 44, NoidaDistt. G.B. Nagar 201301 (U.P.)Tel.: (0120) 4222439

5

13 Sh. Ram Sudhar Spl. Invitee

Director

1/188 Viram KhandGomti Nagar, LucknowTel.: (0522) 2394642

1/188 Viram KhandGomti Nagar, LucknowTel.: (522) 2394642

NOTICE FOR ANNUAL GENERAL MEETING

Dear Shareholder,

Annual General Meeting of the Bank is scheduled to be held on Sunday, 24 August 2014 at

10:00 am at Hotal Oasis, Delhi Road, Saharanpur to transact the following business :

Agenda

1. To confirm the proceedings of last AGM.

2. To consider and approve the Annual Report for 2013-14.

3. To consider and approve the Balance Sheet & Profit & Loss Account of the Bank for 2013-14.

4. To consider the report of Statutory Auditors and compliance thereof for the year 2013-14.

6. To review actual utilization of reserves and other funds during the year 2013-14.

7. To take note of the loans and advances outstanding against Directors and their relatives during

the year 2013-14.

9. To consider and approve the Budget for 2015-16.

10. To consider and approve the long term perspective plan of the bank and the annual operation

plan for 2015-16.

11. To present the list of employees who are relatives of members of the board or of the Chief

Executive.

12. To consider amendment in bye-laws of the bank for expanding bank's area of operation to the

states of Uttarakhand, Himachal Pradesh, Haryana, Punjab, Chandigarh, Delhi, Rajasthan &

Madhya Pradesh, subject to statutory approvals.

13. Other items if any, with the approval of Chairman.

Dated : 02-08-2014

Place : Saharanpur - Sd -

(Chief Executive Officer)

5. To appropriate net profit and declare dividend as recommended by the Board of Directors for the

year 2013-14

8. To appoint Statutory Auditors for 2014-15 and to authorize the Board of Directors to fix their

remuneration.

A Bank for Your Welfare

6

MESSAGE FROM THE CHAIRMAN


7

Dear Shareholders,

It is a matter of great pleasure for the Board, all officers of the Bank and myself to welcome you to

the 17th Annual General Meeting of Shivalik Mercantile Coop. Bank Ltd.

In this concluded year of 2013-14, the bank has moved ahead on the path of growth with confidence

and determination. In this year, bank renewed its commitment to support small depositors and

small borrowers. For depositors, we opened up our gates wide and with

Basic Savings Bank accounts, Cash Deposit Machines and ATM cards.

Keeping this objective in mind, we also started opening B.C. offices in

various districts. Many such BC offices have already been opened in

Indore, Noida, Meerut and Saharanpur and many more (Chhhutmalpur,

Chilkana, Maliana (Meerut) and Hastinapur are in the pipeline.

Not to be left behind new branches also came up at various places. We

opened branches in Indirapuram, Shardanagar, Muzaffarnagar and also

one at Khatauli during the year. All of these branches have been received

well by the residents of these cities and hold good promises for their bright

future. One more branch at New Madho Nagar, Saharanpur is almost ready

and may start functioning by the time this booklet reaches your hands.

All of our branches and BC offices are now equipped with state of the art

Cash Deposit Machines (CDMs). The CDMs accept cash deposits into accounts, generate

computerized receipts for the same, accept cheques for collection and are ATM also. Thus, our

customers are now able to deposit their cash and cheques even after the branches are closed in the

evening. The Bank has generated a lot of goodwill among its constituents for bringing in this

technological advancement in its services.

Net worth of the Bank has crossed Rs. 50 crore this year and this is going to help the bank in many

important ways viz. a viz. Reserve Bank of India who would now be granting permission to us for

many services which were not permitted till now.

In terms of Net Profit (Profit before tax / after tax), the Bank has registered the most spectacular

2013-14 at a Glance

Several new branches / BC offices opened.

All branches / BC offices are now equipped with ATM cum CDMs.

World class CBS software arranged for our bank.

ATM cum Debit card facility makes us first co-oprative bank in North India offering this facility.

Our card can now be used for shopping any where in India.


8

performance. While last year, our profit before tax was 312.04 lacs, this time we have posted

755.61 lacs - more than 100% growth in a year!

With a view to manage widely spaced branches and offices in Uttar Pradesh and Madhya Pradesh

and to assist them in their functioning, the bank is looking forward to open a Regional office at

Noida.

The bank has successfully launched its debit card service so that now our ATM cards can also be used

for shopping across 9.53 lac merchant establishments across India.

Besides Gold Loan Scheme which is running successfully, we have also come up with a scheme to

provide financial assistance upto Rs. 10 lacs to retail traders. The scheme targets those very small

retailers in villages, suburbs, urban areas and even in metro cities who, not being able to furnish

proper balance sheet / profit and loss account / income tax return, are not entertained by other

banks and have to seek loan from private money lenders. The scheme has picked up very well in all

its variants.

Bank's microfinance portfolio is continually expanding in

terms of number of beneficiaries, amount of finance and

also in terms of geographical area. Now our branches in

Saharanpur, Meerut, Noida and Dhar are engaged in this

top-priority scheme of Reserve Bank of India with

excellent results.

As suggested by Reserve Bank of India, the bank has revised all of its Customer

ID forms and account opening forms so that all pieces of information as

desired by RBI under its KYC policy are obtained at the time of opening of

account. Existing forms have also been asked to submit updated supplemental

information which they have done.

The Bank has been looking for a better CBS software in view of certain

constraints being experienced in earlier software. A new, much more capable and secured CBS

application has been installed in the bank enabling us to move ahead to pursue our ambitious plans.

Our Capital Adequacy Ratio has crossed 16% which reflects nicely on our core financial strength.

In view of very comfortable and ever increasing capital base at our end and to help the borrowers in

Immediate Plans

Mobile Banking

E-Commerce

Tablet Banking

Foreign Exchange business.

Branches in neighbouring states

Online shopping facility

Scheduled Bank Status for us.


9

arranging funds for mandatory contribution of capital at the time of taking loans, bank has done

away with the requirement of 2.5% share capital. In its place, slabs have been fixed on the basis of

quantum of finance.

Gross NPA has stood at 1.5% this year and the bank is following up vigorously to bring the NPA to a

NIL position. The CEO is personally monitoring the recovery position on weekly basis.

We are proposing the dividend @ 12% this year also which is quite attractive in present scenario.

This reflects favourably on the health and profitability of the bank because before paying 12%

dividend, we are also required to pay income tax @30% app.

Before I conclude, I must convey my sincere thanks to all the share holders, the Board of Directors,

all employees of the Bank because without their utmost cooperation and untiring efforts, the

success would not have been achieved. I wish to take the opportunity to thank all the clients and

customers of the bank. Ultimately, it is they who make a business enterprise successful or

otherwise. I hope that the same kind of support, cooperation and guidance would continue in

future also.

Thanks to all of you once again. With warm regards and best compliments,

Sd/-

(Yashvir Kumar Gupta)

Chairman

PROGRESS OF BANK

thBank has completed 16 financial year after start of the operation on 5th September 1998. The

progress of the Bank for the last 3 financial years is as below :

10

Rs. in Lacs

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

ÿ-la- Description 31.03.2012 31.03.2013 31.03.2014fooj.k

va'kiwath

dks"k ,oa ladfyr ykHk

tekjkf'k

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ykHkka'k

xSj fu"iknd ifjlEifŸk;ka

iawth i;kZIrrk ekunaM

Ω.k tek vuqikr

'kqº ewY;

tek dh ykxr

Ω.k ij izkfIr

fuos'k ij izkfIr

izfr deZpkjh O;kikj

cpr [kkrksa dh la[;k

pkyw [kkrksa dh la[;k

Share Capital

Reserves & Accu. Profit

Deposits

Loan & Advances

Profit before tax

Profit after tax

Dividend

NPA

CRAR

CD Ratio (incl. 75% of net worth)

Net Worth

Cost of Deposits

Yield on Loans

Yield on Investments

Business per employee

No. of Savings Accounts

No. of Current Accounts

1163.36

520.42

24578.10

14518.74

274.75

201.85

12%

0.24%

13.24%

58.45%

1885.63

7.40%

12.01%

8.10%

403.00

22927

2495

# Proposed, subject to approval in AGM


2236.64

604.97

31846.18

22008.05

312.04

217.12

12%

0.23%

14.28%

64.77%

3058.74

8.13%

12.85%

8.77%

345.22

31465

4459

4133.24

1061.19

39885.74

28396.93

755.61

522.01

#12%

1.50%

16.15%

64.85%

5194.43

7.98%

13.50%

9.33%

351.97

48435

6507

ANNUAL REPORT


Hon'ble Members of the Bank,I welcome all of you at this 17th Annnual General Meeting of the Bank, which is a befitting occasion to take stock of the progress being made by your bank. I have the privilage to present before you the report for financial year ending 2013-14 and hope that you would be immensely pleased to note the progress of the bank at all fronts. Here is a bird's eye view of the financial performance of our bank with the help of key financial indicators:

Summarised Financial Results :

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

No. of Members

Share Capital

Reserves &

Accumulated Profit

Deposits

Term Deposits

Saving Deposits

Current Deposits

Total

Loans & Advances

Short Term Advances

Medium Term Advances

Long Term Advances

Total

% of Overdue Advances

to Total Advances

Priority Sector Advances

Ratio of Priority Sector

Advances to Total Advances

Investments

Term Deposits in Banks

In Govt., Approved

Securities & others

Total

Working Capital

Net Profit (Before Tax)

Net Profit (After Tax)

31-03-2013 dks 31-03-2014 dks o"kZ esa gqbZ ofºAs on 31.03.2013

(Rs. In Lacs)As on 31.03.2014

(Rs. in Lacs)% Growth

(Percentage)

lnL; la[;k

va'kiwath

dks"k ,oa

ladfyr ykHk

tekjkf'k

(d) fe;knh tek

([k) cpr [kkrk

(x) pkyw [kkrk

;ksx

Ω.k o vfxze

(d) vYikof/k

([k) e/;kof/k

(x) nh?kkZof/k

;ksx

vfrns; Ω.k dk

izfr'kr dqy Ω.k ls

izkFkfedrk ks= Ω.k

izkFkfedrk ks= Ω.k

dk dqy Ω.k ls izfr'kr

fuos'k

(d) cSadksa esa fe;knh tek

([k) ljdkjh] vuqeksfnr

izfrHkwfr;ksa esa ,oa vU;

;ksx

dk;Z'khy iwath

'kqº ykHk (vk;dj ls igys)

'kqº ykHk (vk;dj ds ckn)

11

7601

2236.64

604.97

24295.02

6021.61

1529.56

31846.18

10767.83

3226.81

8013.40

22008.05

0.52%

8911.00

61.37%

2386.05

7266.16

9655.21

35260.59

312.04

217.12

8629

4133.24

1061.19

30199.69

7958.07

1727.98

39885.74

16008.61

3087.01

9301.31

28396.93

0.69%

19197.00

87.23%

1521.81

10038.63

11560.44

46070.57

755.61

522.01

13.52%

84.80%

75.41%

24.30%

32.16%

12.97%

25.24%

48.67%

(-) 4.33%

16.07%

29.03%

32.69%

115.43%

42.13%

(-) 36.22%

38.15%

19.73%

30.66%

142.15%

140.42%

12

As is evident from the above, business of the bank continued to grow in its 16th year of functioning as well. We had fixed for ourselves some ambitious targets for the just concluded financial year and we have been able to reach / nearly reach those targets. In some cases, as in profits, we surpassed our own target with considerable margin.

DEPOSITS

We have garnered deposits to the tune of 398.85 crore against the target of 400 crore. Thus, the growth achieved over the previous year is 25.24%.

LOANS AND ADVANCES

In this year, our thrust has been on small loans (gold loans, loans to retail traders, vehicle loans, loans to SHGs etc.) and not on big loans. The figure at the end of the year stood at 283.96 crore showing an increase of 29.03%. However, we have been able to penetrate deeper and wider among our customer base with small loans.

PRIORITY SECTOR ADVANCES

This is exactly where our major thrust has been and therefore funds have been invested to make lives of small customers better as per national priorities. While in the previous year, our loans and advances to this sector were 89.11 crore, the figure of this year stands at 191.97 crore registering a growth of 115.43%. Likewise, the share of priority sector advances to total advances has gone up from 61.37% to 87.23%.

FINANCIAL INCLUSION

Even among the priority sector, we have been trying to reach out to the most neglected sector in our nation's economy - the people living below poverty line. We are proactively encouraging our branches to increase microfinance portfolio at Saharanpur, Meerut, Noida and Dhar districts. Total 5500 SHG groups had already been formed as on 31st March, 2014. Since a group consists of 14 or 15 families on an average, the number of BPL families getting benefits from the bank may very well exceed 80,000! Out of 5500 groups formed, the bank had extended credit facility to 3114 groups as on 31st March, 2014 with the outstanding amount of more than Rs. 21 crore.

SHARE CAPITAL

Over the year, Bank's share capital has grown from last year's Rs. 2236.64 lacs to Rs. 4133.24 lacs growing @ 84.80%. This also explains why we are very comfortably placed from the view point of CRAR which against stipulated 9% as per RBI norms, our CRAR figure stands at 16.15%.


13


PROFIT & INCOME TAX

Net profit (after tax) for the year is Rs. 522.01 lacs compared to last year's 217.12 lacs. Thus, a growth of 140.42% has been achieved.

AUDIT AND INSPECTIONS

Statutory Audit

The statutory auditors M/s. G.P. Gupta & Co., Charterted Accountants have been quite appreciative of the functioning of our Bank and have gone to the extent of saying that they have found our systems and procedures much better compared to other cooperative banks audited by them.

Concurrent / Internal Audit

In compliance of the instructions of RBI, all large branches of the bank having business of more than 50 crore are subject to concurrent audit by retired senior bankers from various public sector banks, hired by the bank as auditors. Internal audit has been mandated for all branches. The audit reports are timely submitted, complied with and the compliance verified before the closure of the report.

A well qualified chartered accountant firm of Delhi has been engaged by the Bank as Audit Consultant to supervise internal/concurrent audit and suggest improvements wherever necessary. Many suggestions received from them have proved to be quite useful to the bank. Surprise inspections / verification of cash / other security documents are also done at irregular interval by bank's senior officers / heads of other branches.

BANK'S FUNCTIONING AND MISC. ASPECTS:

Bank is CBS compliant since 2010. However, it was being felt that the CBS software was unable to provide some important services to the customers which have become a norm in all PSU / private banks and was thus proving to be a bottleneck for us. The Bank therefore opted for an improved, world-class software system and since Dec. 2013, the new software has been introduced. Now we are in a position to introduce many important value added services for our customers.

ATM-CUM-DEBIT CARD

Even though our ATM card had inherent capability to work as Debit Card also, we were not in a position to offer this service to our account holders for want of software support. Now after introduction of the

14


new software, the bank has started this facility to the great delight of our customers.

ATM - CUM - CDM

Bank has taken another giant step to upgrade its customer service by installing ATM-cum-CDM machines at all of its branches and BC offices. These machines not only dispense cash to the ATM card holders of all banks in India, but also accept cash deposit from our customers. These machines can identify fake currency notes and can deliver receipt for the amount received. Not only this, the machine is capable to receiving cheques also for collection/local clearing.

BC OFFICES

Bank has appointed M/s. Janhit Foundation Lucknow as its Business Correspondent which has established various BC offices for us by appointing their staff as their representative. Each of these BC offices is affiliated to the nearest branch. The following BC offices have already been opened and are providing necessary banking services to the local villagers:

Distt. Saharanpur - Nakur (Affiliated to Ambehta Branch), Chhutmalpur (Aff. To Hakikat Nagar), Chilkana (Chilkana Road).

Distt. G.B. Nagar - Barola / Nithari / Sadarpur - (all 3 offices are affiliated to our Noida 27 Branch)

Distt. Indore - Patnipura (affiliated to Indore Branch)

Distt. Meerut - Mawana, Hastinapur and Maliyana. (affiliated to Meerut Branch)

NEFT / RTGS

Although the bank was providing NEFT / RTGS services to its customers, it was carrying out all transactions manually at H.O. on behalf of branches. However, now branches have been empowered to effect NEFT / RTGS at their end. Inward remittances are being credited into customers' accounts automatically.

INSURANCE BUSINESS

The Bank has tied up with the leading PSU Insurers - Oriental Insurance to offer insurance of property, automobiles, plant & machinery and health insurance as well. The move has been welcomed by the constituents of the bank.

15


FREE SMS ALERTS

All of our customers who have opted for SMS alerts in their accounts, are being offered this service by the bank free of charge. Thus, whenever there is a transaction in their account through ATM or otherwise, they instantly get an SMS alert on their mobile phone.

OTHER ASPECTS

Bank continues to honour its decision not to grant any advance against the security of shares and debentures. Similarly, bank does not invest in share market also. For the purpose of investments, bank chooses only govt. and trustee securities, debt instruments and maintains its deposits with various scheduled banks only.

The Bank continues to be a subscriber of Deposit Insurance & Credit Guarantee Corporation (DICGC) scheme as per requirement of RBI and is thus extending the feeling of security to bank's constituents also.

The Bank complies with in letter and spirit, with the demands, suggestions, guidelines, instructions of Reserve Bank of India as contained in their various letters and circulars.

Keeping in view its great tradition of complete transparency, the Bank has got an state-of-the-art website offering information about banks performance, products and services, bank's previous years' annual reports, balance sheets, profit and loss accounts, statutory audit reports etc. Also available on the website are schedule of charges and bank's interest rates on deposits and advances.

In view of large geographical area where Bank's branches and offices are scattered in U.P. and M.P., the Bank has started video conference facility to obviate the need of frequent movement of staff for discussions and faster decision making. Not only loan proposals are discussed with the branches in this manner, interviews of the candidates and staff trainings are also being conducted with the help of video conference. Besides this, Bank has also started online training facility for its staff officers.

All branches of the Bank and Head Office are fully air-conditioned and are a pleasure to the eyes for the visiting public.

Home Banking scheme as implemented by the Bank places us a class apart from other banks and is highly approciated by the beneficiaries of the same.

Dear Customer, Your A/C

xxxxxx499300 Credited-

Rs. 35000.00-Ledg Bal

128000

LM-SMCBLT

16


OUR FUTURE PLANS

Business

Under the able guidance of our Board of Directors and due to great devotion of staff towards their duties, we have been able to secure more and more business for the Bank. We hope to grow in leaps and bounds in the days to come as we are continually making our presence stronger in western U.P.

We look forward to start the following services in near future :

Online Shopping Facility with ATM-cum-DEBIT CARD: Having already started shopping facility across the counter on all major merchant establishments who offer sales through swiping machines, the next item on our agenda is to start the facility of online shopping also. Testing for the same is already underway and as soon as we are sure of offering a secured financial transaction to our card holders, we shall launch this scheme.

Tablet Banking: Tablets are highly portable and convenient devices to keep our field staff connected with the H.O. Even while remaining in field, they can not only maintain record of lead generation, but will also be able to open accounts through the tablets given to them.

Mobile Banking: Connecting with the bank account through a mobile phone is also on our agenda and we hope to be able to provide this service soon.

I am confident that if we continue to get the same kind of highly valuable cooperation and kind blessings of all of you, we would be scaling new heights in the days to come.

Thank you,

Sincerely,

Sd/-

(Suveer Kumar Gupta)

MD & CEO

Open New Account

To,

The Managing Committee,

SHIVALIK MERCANTILE CO-OPERATIVE BANK LTD.

Saharanpur

1. We have audited the accompanying Financial Statements of M/S SHIVALIK MERCANTILE CO-

OPERATIVE BANK LTD. (PAN-AAAAS3251Q) having Registered Office at Ansari Marg, Saharanpur,

247001 which comprise the Balance Sheet as at 31st March 2014 and Profit and Loss Account for year ended on

31st March 2014.

Management's Responsibility for the Financial Statements:

2. Management of the Bank is responsible for the preparation of these Financial Statements and give true and

fair view of the financial position and financial performance of the Branch in accordance with the Banking

Regulation Act, 1949 complying with Reserve Bank of India guidelines from time to time. 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 auditors' judgement, including the assessment of

the risks of material misstatement of the financial statement, 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.

17


G.P. GUPTA & CO.

STATUTORY AUDITOR'S REPORT

C H A RT E R E D A C C O U N TA N T S

IInd Floor, SAS House, 6-B,Sapru Marg, Lucknow-226001. Phones-0522-3012028, 4002432Fax-0522-3012840, [email protected], [email protected]

18


Place : Saharanpur

Date : 28.04.2013

for G. P. GUPTA & CO.Chartered Accountants

(Firm Reg. No. 04998C)sd/-

( CA G.P. Gupta )Partner (M No. 073778)

Opinion

6. In our opinion, as shown by books of branch, and to the best of our information and according to the

explanation given to us, read with the Memorandum of Changes mentioned in paragraph 10 below, 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 Branch as at March 31, 2014; and

(b) in the case of Profit and Loss Account, of the Net Profit 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 29 of the

Banking Regulation Act, 1949;

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 branch which have come to my/our notice have been within the powers of the Bank.

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. in our opinion, proper books of account as required by law have been kept by the branch so far as appears

from our examination of those books;

10. The following is a summary of Memorandum of Changes submitted byus to the branch management:

Particulars No. of Entries Increase Decrease In respect of IncomeIn respect of expenditureIn respect of AssetsIn respect of LiabilitiesIn respect of Gross NPA'sIn respect of Provision on NPA'sIn respect of Classification of AdvancesIn respect of Risk Weighted AssetsOther Items (if any)

1351

83,256.00

40,362.0040,362.00

83,256.00

PAN AAAFG8578M

Service Tax Reg. No. AAAFG8578MST001

BALANCE SHEET AS ON 31ST MARCH 2014

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

CAPITAL

RESERVE FUND & OTHER RESERVES

DEPOSITS & OTHER ACCOUNTS

BORROWINGS

BILLS FOR COLLECTION BEING BILLS

BRANCH ADJUSTMENTS

OVERDUE INTEREST RESERVES (ON NPA)

OTHER LIABILITIES & PROVISIONS

PROFIT & LOSS

GRAND TOTAL

CONTINGENT LIABILITIES

CAPITAL & LIABILITIES SCHEDULECURRENT YEAR

31-03-2014PREVIOUS YEAR

31-03-2013

1

2

3

4

5

RECEIVABLE (AS PER CONTRA)

Contd...

19

(Amount in Rs.)


41,33,233,700.00

6,77,81,150.00

3,98,85,74,117.62

90,00,000.00

1,70,034.00

-

13,31,799.84

6,84,05,876.14

5,99,71,672.93

4,60,85,58,350.53

1,17,24,800.00

22,36,64,400.00

5,16,91,451.00

3,18,46,18,375.81

-

3,43,946.00

14,057.00

4,21,095.00

3,54,75,897.90

3,05,18,087.10

3,52,67,47,309.81

1,49,43,600.00


BALANCE SHEET AS ON 31ST MARCH 2014

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

CASH IN HAND & BALANCE WITH RBI

BALANCES WITH OTHER BANKS

MONEY AT CALL & SHORT NOTICE

INVESTMENTS

ADVANCES

INTEREST RECEIVABLE

BILLS RECEIVABLE BEING BILLS

FIXED ASSETS LESS DEPRECIATION

OTHER ASSETS

GRAND TOTAL

PROPERTY & ASSETS SCHEDULECURRENT YEAR


31-03-2013

6

7

8

9

10

11

FOR COLLECTION (AS PER CONTRA)

Contd...

20

(Amount in Rs.)

OF WHICH OVERDUE

As per our report of even date attachedFor G. P. Gupta & Co. (Chartered Accountants)

sd/-(G.P. Gupta)PARTNER

sd/-(Sudhakar Agarwal)

DIRECTOR

sd/-(Sarvesh Singhal)

DIRECTOR

sd/-(Suveer Kumar Gupta)

MD & CEO

sd/-(Shiv Puran Gulati)VICE CHAIRMAN

sd/-(Yashvir Kumar Gupta)

CHAIRMAN

3,99,85,893.00

38,34,58,785.21

-

1,16,43,37,011.00

2,83,96,93,079.37

8,14,24,452.40

1,70,034.00

4,42,98,750.35

5,51,90,345.20

4,60,85,58,350.53

13,31,799.84

2,43,55,558.00

38,92,74,449.50

-

77,60,89,632.00

2,20,08,04,590.56

7,93,59,945.44

3,43,946.00

3,55,80,671.59

2,09,38,516.72

3,52,67,47,309.81

4,21,095.00


PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2014

INTEREST ON DEPOSITS, BORROWINGS ETC.(I) INTEREST ON DEPOSITS(ii) INTEREST ON BORROWINGS(iii) OTHER INTEREST

SALARIES, ALLOWANCES, PROVIDENT FUNDBONUS & GRATUITY ETC.

RENT, TAXES, INSURANCE, LIGHTING ETC.(i) BUILDING RENT(ii) TAXES(iii) INSURANCE(iv) LIGHTING

LAW CHARGES

POSTAGE & TELEPHONE CHARGES(I) POSTAGE(II) TELEPHONE

(III) COMPUTER NETWORKING, CONNECTIVITY & HOSTING

AUDIT & CONSULTANCY FEES

DEPRECIATION AND REPAIRS(i) DEPRECIATION(ii) WRITTEN OFF / IMPAIRED ASSETS (iii) REPAIRS

STATIONERY, PRINTING AND ADVERTISEMENT(i) PRINTING & STATIONERY(ii) ADVERTISEMENT

EXPENDITURECURRENT YEAR


31-03-2013

Contd...

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

21

(Amount in Rs.)

27,97,51,559.1116,68,379.00

8,244.0028,14,28,182.11

4,81,41,880.11

86,85,828.0018,77,230.3445,80,194.0045,57,239.73

1,97,00,492.07

4,99,063.00

82,365.005,67,056.42

22,72,061.63

29,21,483.05

1,31,67,062.00

74,77,966.5095,233.00

30,96,136.801,06,69,336.30

17,06,038.6915,06,952.4632,12,991.15

22,34,40,371.7913,01,207.78

-22,47,41,579.57

4,05,06,344.00

65,76,542.0017,22,434.0030,46,279.5029,49,190.40

1,42,94,445.90

1,82,005.00

39,225.004,52,634.25

12,65,194.00

17,57,053.25

53,78,724.00

50,77,558.00-

37,20,347.9887,97,905.98

14,28,515.177,37,822.80

21,66,337.97



OTHER EXPENDITURE

(I) SUBSCRIPTION

(ii) TRAINING & DEVELOPMENT OF STAFF

(iii) AGM & CONFERENCE

(iv) SECURITY

(v) BUSINESS PROMOTION & GIFTS

(vi) STAFF WELFARE

(vii) TRAVEL & TRANSPORT

(viii) COMMISSION ON DAILY DEPOSIT

(ix) CHARGES PAID TO OTHER BANKS

(X) AMORTIZATION ON INVESTMENTS

(XI) MISCELLANEOUS EXPENSES

LOSS FROM SALE OF NON BANKING ASSETS

PROVISIONS

(I) CONTINGENT PROVISION ON STANDARD ASSETS

(ii) PROVISION FOR BAD & DOUBTFUL DEBTS (NPA)

(iii) SPECIAL RESERVE U/S 36(1) (viii) OF INCOME TAX ACT

(iv) PROVISION FOR CURRENT INCOME TAX

(v) PROVISION FOR DEFERRED TAX FOR CURRENT YEAR

BALANCE OF PROFIT

GRAND TOTAL

EXPENDITURECURRENT YEAR


31-03-2013

Contd...

(9)

(10)

(11)

(12)

TOTAL

TOTAL

TOTAL

Contd...

22

(Amount in Rs.)

2,86,704.6522,660.00

1,78,267.0021,91,019.00

78,949.0011,33,633.0019,34,711.5013,72,767.00

3,90,151.344,95,199.004,74,321.29

85,58,382.78

5,782.00

7,02,730.0062,00,000.0026,15,047.00

2,31,44,848.002,14,291.00

3,28,76,916.00

5,22,01,492.83

47,33,83,063.40

EXPLANATORY NOTE

CONTINGENT PROV. AGAINST DEPRECIATION IN INVESTMENTS

1,13,092.5068,836.00

1,22,672.0015,45,906.50

1,99,268.007,87,096.00

12,63,884.6814,49,194.00

3,97,612.573,60,360.008,89,296.56

71,97,218.81

-

--

11,09,504.0092,67,366.00

2,24,376.00

1,06,01,246.00

2,17,12,164.27

33,73,35,024.75



INTEREST AND DISCOUNT

(I) INTEREST ON LOANS & ADVANCES

(ii) INTEREST ON INVESTMENTS

COMMISSION, EXCHANGE & BROKERAGE

OTHER RECEIPTS

(I) LOAN PROCESSING CHARGES

(ii) INCIDENTAL CHARGES

(iii) LOCKER RENT

(iv) DIVIDEND FROM MUTUAL FUNDS

(v) PROFIT ON REDEMPTION/ SALE OF INVESTMENTS

(vi) BAD DEBTS RECOVERED

(vii)MISCELLANEOUS INCOME

GRAND TOTAL

INCOMECURRENT YEAR


31-03-2013

(1)

(2)

(3)

TOTAL

TOTAL

Contd...

23

(Amount in Rs.)

32,87,88,592.70

9,71,70,752.16

42,59,59,344.86

5,07,886.10

1,04,49,495.40

21,87,905.59

18,30,016.00

17,090.00

2,33,96,557.08

37,74,000.00

52,60,768.37

4,69,15,832.44

47,33,83,063.40


Sd/-(G.P. Gupta)PARTNER

Sd/-(Sudhakar Agarwal)

DIRECTOR

Sd/-(Sarvesh Singhal)

DIRECTOR

Sd/- (Suveer Kumar Gupta)

MD & CEO

Sd/-(Shiv Puran Gulati)VICE CHAIRMAN

Sd/-(Yashvir Kumar Gupta)

CHAIRMAN

EXPLANATORY NOTE

TRANSFER FROM IFR 2,54,016.00–

22,66,97,796.75

8,63,60,257.06

31,30,58,053.81

9,25,950.00

79,47,102.00

22,65,292.25

12,37,100.00

-

82,99,370.74

10,03,400.00

25,98,755.95

2,33,51,020.94

33,73,35,024.75


24

SCHEDULES TO BALANCE SHEET AS ON 31ST MARCH, 2014

SCHEDULE 1 : CAPITAL

AUTHORIZED CAPITAL

50,00,000 Shares of Rs. 100/= each

SUBSCRIBED CAPITAL

22,36,644 Shares or Rs. 100/= each

AMOUNT CALLED UP

On 22,36,644 Shares at Rs.100/= each

Of (iii) above, held by

(a) Individuals & others

(b) Co-operative institutions

(c) Government

STATUTORY RESERVE(A) Statutory Reserve(B) Add : Statutory Reserve from Erstwhile Malwa Bank, Indore.

INVESTMENT FLUCTUATION RESERVE(A) INVESTMENT FLUCTUATION RESERVE(B) Add : IFR from Erstwhile Malwa Bank, Indore.

OTHER FUNDS AND RESERVES(a) SHARE TRANSFER FUND(b) PROVISION ON STANDARD ASSETS(c) SPECIAL RESERVE U/S 36(1)(viii) OF I.T. ACT(d) CONTINGENCY RESERVE(e) Add : Prov. on STD Assets from Malwa Bank, Indore

GRAND TOTAL

(i)

(ii)

(iii)

SCHEDULE 2 : RESERVE FUNDS & OTHER RESERVES

CURRENT YEAR31-03-2014

PREVIOUS YEAR31-03-2013

(i)

(ii)

(iii)

TOTAL

TOTAL

TOTAL

(Amount in Rs.)

Contd...

50,00,00,000.00

41,33,23,700.00

41,33,23,700.00

41,33,23,700.00

-

-

4,05,23,497.00-

4,05,23,497.00

20,05,995.00-

20,05,995.00

50,00.000.0079,51,621.0056,35,941.0066,64,096.00

-

2,52,51,658.00

6,77,81,150.00

50,00,00,000.00

22,36,64,400.00

22,36,64,400.00

22,36,64,400.00

-

-

2,71,16,947.0012,76,215.00

2,83,93,162.00

27,45,984.007,89,640.00

35,35,624.00

50,00,000.0072,38,988.0030,20,894.0044,92,880.00

9,903.00

1,97,62,665.00

5,16,91,451.00


25


SCHEDULE 3 : DEPOSIT & OTHER ACCOUNTS

FIXED DEPOSITS

(a) INDIVIDUALS & OTHERS

(b) CENTRAL CO-OPERATIVE BANKS

(c) OTHER SOCIETIES

SAVING BANK DEPOSIT



(c) OTHER SOCIETIES

CURRENT DEPOSITS



(c) OTHER SOCIETIES

MONEY AT CALL AND SHORT NOTICE

GRAND TOTAL



(i)

(ii)

(iii)

(iv)TOTAL

TOTAL

TOTAL

TOTAL

(Amount in Rs.)

Contd...

Contd...

SCHEDULE 4 : OTHER LIABILITIES & PROVISIONS

(i) BILLS PAYABLE (DDs/POs ISSUED BUT NOT YET

PRESENTED FOR PAYMENT)

(ii) UNCLAIMED DIVIDENDS

(iii) SUNDRIES

(iv) PROVISION FOR BONUS

(v) PROVISION FOR INCOME TAX

(vi) DEFERRED TAX LIABILITY

(vii) TAX DEDUCTED AT SOURCE

(viii) PROVISION FOR AUDIT FEES

(ix) PROVISION FOR BAD & DOUBTFUL DEBTS (NPA)

(x) PAID-UP CAPITAL (COLLECTION ACCOUNT) OF

ERSTWHILE BHOJ NAGRIK SAHAKARI BANK LTD.

DHAR, M.P.

(xi) PAID-UP CAPITAL (COLLECTION ACCOUNT) OF

ERSTWHILE MALWA COMMERCIAL CO-OP BANK

LTD., INDORE, M.P.

(xiI) CONTINGENT PROV. AGAINST DE. IN INVESTMENTS (IDR)

3,01,99,68,524.70

-

-

3,01,99,68,524.70

79,58,07,809.28

-

-

79,58,07,809.28

17,27,97,783.64

-

-

17,27,97,783.64

3,98,85,74,117.62

2,42,95,02,025.30

-

-

2,42,95,02,025.30

60,21,60,727.91

-

-

60,21,60,727.91

15,29,55,622.60

-

–

15,29,55,622.60

-

3,18,46,18,375.81

75,23,446.19

8,87,413.00

1,90,87,954.75

12,59,650.00

2,31,44,848.00

7,31,756.00

5,96,595.00

2,00,000.00

1,14,66,268.20

17,24,300.00

-

17,83,645.00

6,84,05,876.14

67,83,143.70

2,01,193.00

31,80,768.00

10,34,265.00

92,67,366.00

5,17,465.00

67,511.00

1,21,349.00

52,77,621.20

17,90,000.00

69,81,200.00

2,54,016.00

3,54,75,897.90


26


SCHEDULE 5 : PROFIT & LOSS

PROFIT AS PER LAST BALANCE SHEET

Loss of Malwa bank for the year till date of merger

LESS :APPROPRIATIONS OF PROFIT FOR

LAST YEAR

STATUTORY RESERVE

CO-OPERATIVE EDUCATION FUND

SHARE TRANSFER FUND

CONTINGENCY RESERVE

INVESTMENT FLUCTUATION RESERVE

BAD & DOUBTFUL DEBTS RESERVE

CONTINGENT PROVISION ON STD. ASSETS

DIVIDEND @ 12%

ADD: SURPLUS FROM MALWA COMMERCIAL

CO-OP BANK, INDORE (NET OF NON-

STATUTORY RESERVES, AS FAR AS REQUIRED)

ACCUMULATED LOSSES OF MALWA BANK

TILL DATE OF MERGER (31.08.2012)

LESS : PROVISION FOR STAFF BENEFIT

LESS : CO-OP. EDUCATION & STAFF TRAINING FUND

ADD : PROFIT OF THE YEAR B/F FROM P&L A/C

GRAND TOTAL



(i)

(ii)

(iii)

(iv)

(Amount in Rs.)

Contd...

Contd...

TOTAL

TOTAL

TOTAL

3,05,18,087.10

-

3,05,18,087.10

54,28,041.00

2,17,122.00

-

21,71,216.00

-

-

-

1,49,31,528.00

-

-

-

-

-

5,22,01,492.83

5,99,71,672.93

3,58,25,110.63

(20,019.99)

3,58,05,090.64

50,46,287.00

2,01,851.00

-

20,18,515.00

25,00,000.00

45,00,000.00

25,00,000.00

1,02,35,473.00

(84,462.81)

5,000.00

82,421.00

2,958.19

2,17,12,164.27

3,05,18,087.10

(2,27,47,907.00) (2,70,02,126.00)


27


SCHEDULE 6 : BALANCE WITH OTHER BANKS

CURRENT DEPOSITS

(a) DISTRICT CO-OPERATIVE BANK LTD.

(b) SBI & SUBSIDIARY BANKS

(c) OTHER PUBLIC SECTOR BANKS

(d) OTHER SCHEDULED BANKS

SAVING BANK DEPOSITS

FIXED DEPOSITS

(a) DISTRICT CO-OPERATIVE BANK LTD.

(b) SBI & SUBSIDIARY BANKS

(c) OTHER PUBLIC SECTOR BANKS & SCHEDULED BANKS

GRAND TOTAL



(i)

(ii)

(iii)

TOTAL

TOTAL

(Amount in Rs.)

Contd...

Contd...

SCHEDULE 7 : INVESTMENTS

(i) IN CENTRAL & STATE GOVERNMENT SECURITIES

MARKET VALUE

FACE VALUE

(ii) OTHER TRUSTEE SECURITIES

(iii) SHARES IN CO-OPERATIVE INSTITUTIONS

(iv) OTHER INVESTMENTS

GRAND TOTAL

3,63,85,004.69

1,27,35,205.65

3,47,72,739.22

14,73,85,094.65

23,12,78,044.21

40,00,000.00

-

14,81,80,741.00

15,21,80,741.00

38,34,58,785.21

1,00,38,63,011.00

1,00,23,33,382.00

1,01,00,00,000.00

-

2,000.00

16,04,72,000.00

1,16,43,37,011.00

1,61,60,120.14

2,85,11,906.04

7,16,33,103.17

3,43,64,505.15

15,06,69,634.50

2,14,24,073.00

-

21,71,80,742.00

23,86,04,815.00

38,92,74,449.50

72,66,15,632.00

72,69,57,500.00

72,50,00,000.00

-

2,000.00

4,94,72,000.00

77,60,89,632.00


28


SCHEDULE 8 : ADVANCESSHORT TERM LOAN, CASH CREDITOVERDRAFT AND BILLS DISCOUNTEDOF WHICH SECURED AGAINST(a) GOVT. & OTHER APPROVED SECURITIES(b) OTHER TANGIBLE SECURITIESOF THE ADVANCES, AMT. DUE FROM INDIVIDUALSOF THE ADVANCES, AMOUNT OVERDUECONSIDERED BAD & DOUBTFUL OF RECOVERY(FULLY PROVIDED FOR)

MEDIUM TERM LOANS OF WHICH SECURED AGAINST(a) GOVT. & OTHER APPROVED SECURITIES(b) OTHER TANGIBLE SECURITIESOF THE ADVANCES, AMT. DUE FROM INDIVIDUALSOF THE ADVANCES, AMOUNT OVERDUECONSIDERED BAD & DOUBTFUL OF RECOVERY(FULLY PROVIDED FOR)

LONG TERM LOANSOF WHICH SECURED AGAINST (a) GOVT. & OTHER APPROVED SECURITIES(b) OTHER TANGIBLE SECURITIESOF THE ADVANCES, AMT. DUE FROM INDIVIDUALSOF THE ADVANCES, AMOUNT OVERDUECONSIDERED BAD & DOUBTFUL OF RECOVERY(FULLY PROVIDED FOR)

GRAND TOTAL

INTEREST RECEIVABLE ON INVESTMENTS (ACCRUED)

(a) GOVERNMENT SECURITIES(b) BANKS FDRs(c) OTHER INVESTMENTS TOTAL

INTEREST RECEIVABLE ON NPA (OVERDUE)

TOTAL

SCHEDULE 9 : INTEREST RECEIVABLE



(i)

(ii)

(iii)

(i)

(ii)

(Amount in Rs.)

Contd...

Contd...

1,60,08,61,463.97

-1,60,08,61,463.971,60,08,61,463.97

--

30,87,01,002.48

-30,87,01,002.4830,87,01,002.48

--

93,01,30,612.92

-93,01,30,612.9293,01,30,612.92

-1,50,300.00

2,83,96,93,079.37

1,56,48,601.006,44,44,051.56

-

8,00,92,652.56

13,31,799.84

8,14,24,452.40

1,07,67,82,776.89

-1,07,67,82,776.891,07,67,82,776.89

25,23,189.44-

32,26,81,279.84

-32,26,81,279.8432,26,81,279.84

32,07,865.5211,24,121,00

80,13,40,533.83

-80,13,40,533.8380,13,40,533.83

56,62,400.0095,531.00

2,20,08,04,590.56

91,81,796.006,96,54,466.44

1,02,588.00

7,89,38,850.44

4,21,095.00

7,93,59,945.44


29


SCHEDULE 10 : FIXED ASSETS

AS ON 01-04-2013

ADDITIONS DURING THE YEAR

LESS : SALE/ ADJUSTMENTS

LESS : DEPRECIATION FOR CURRENT YEAR

WRITTEN DOWN VALUE AS ON 31.03.2014

SCHEDULE 11 : OTHER ASSETS

(i) REFUNDABLE SECURITIES

(ii) STOCK OF PRINTED STATIONARY

(iii) MISCELLANEOUS RECEIVABLES

(iv) TAX DEDUCTED AT SOURCE

(v) INCOME TAX REFUNDABLE

(vi) ADVANCE INCOME TAX PAID

(vii) Non-banking assets acquired under SARFESAI

TOTAL



(Amount in Rs.)


Sd/-(G.P. Gupta)PARTNER

Sd/-(Sudhakar Agarwal)

DIRECTOR

Sd/-(Sarvesh Singhal)

DIRECTOR

Sd/-(Suveer Kumar Gupta)

MD & CEO

Sd/-(Shiv Puran Gulati)VICE CHAIRMAN

Sd/-(Yashvir Kumar Gupta)

CHAIRMAN

Contd...

3,55,80,671.59

1,63,05,060.28

(1,09,015.00)

(74,77,966.50)

4,42,98,750.35

11,24,095.00

7,21,354.20

1,87,30,419.00

70,875.00

57,03,562.00

1,92,00,000.00

96,40,040.00

5,51,90,345.20

1,18,00,283.05

2,88,89,112.54

(31,166.00)

(50,77,558.00)

3,55,80,671.59

10,12,545.00

7,75,082.39

41,71,717.33

73,158.00

54,06,014.00

95,00,000.00

2,09,38,516.72


30

(A) BACKGROUND AND OPERATIONS:

1. Shivalik Mercantile Co-operative Bank Ltd. was registered in 1997 under Uttar Pradesh Co-operative Societies Act 1965 and started operations in September, 1998. After achieving a deposit base of Rs. 100 crores on 31.03.2010, the Bank became a Tier II bank and expanded its area of operation to whole of the state of Uttar Pradesh. Subsequently Bhoj Nagrik Sahakari Bank Maryadit, Dhar, Madhya Pradesh was merged into Shivalik Bank with effect from 1st November, 2010. Consequent upon this inter-state merger, Shivalik Mercantile Co-operative Bank Ltd. was deregistered under Uttar Pradesh Co-operative Societies Act, 1965 and was re-registered under the Multi State Co-operative Societies Act 2002, in September 2010, as a Multi-State Urban Co-operative Bank. The Bank again merged erstwhile Malwa Commercial Co-operative Bank Ltd., Indore with effect from 1st September, 2012. The Bank also continues to open new branches and presently has sixteen branches, ten in District Saharanpur, one each in Meerut, & Ghaziabad, two in Noida, U.P., and one each in Indore & Dhar, M.P. The Bank provides complete retail and corporate banking services. Bank has already received license to further open five branches on which work is going on.

2. Merger of Malwa Commercial Co-operative Bank Ltd. with our bank:

Malwa Commercial Co-operative Bank Ltd., Indore, M.P. (Target Bank) merged with Shivalik Mercantile Co-operative Bank Ltd. (Acquirer Bank) with effect from 1st September, 2012. In accordance with the scheme of merger, the Share Capital of the Target Bank was kept in Collection Account in the books of the Acquirer Bank for a period of 1 year from the date of merger. On the expiry of the period of one year the amount of Rs. 66,84,500 remaining in collection account has been transferred to General Reserve, during the year.

(Schedule annexed to and forming part of the Balance Sheet as on 31st March, 2014and Profit & Loss Account for the year ended 31st March, 2014)

SIGNIFICANT ACCOUNTING POLICIES, DISCLOSURES AND NOTES ON ACCOUNTS


31

3. Merger of Bhoj Nagrik Sahakari Bank with our bank:

a. Bhoj Nagrik Sahakari Bank Maryadit, Dhar, M.P. (Target Bank) merged with Shivalik Mercantile Co-operative Bank Ltd. (Acquirer Bank) with effect from 1st November, 2010. As per the scheme of merger, the Share Capital of the Target Bank is being treated as Collection Account in the books of the Acquirer Bank and will remain so for a period of 10 years from the date of merger. During this period any share-holder of the Target bank desiring to withdraw his/her shares shall be paid back the amount at par. After the expiry of 10 years' period, the amount remaining unpaid shall be converted to the share capital of the equivalent amount of Shivalik Bank. The current balance in the said account is Rs. 17,24,300.

b. As a part of the prudential practice the non-performing loans of the Target Bank which remained unrealized till 31st March, 2012 were written off as bad debts in the F.Y. 2011-12. During the current year, Rs. 37.74 lacs has been recovered and credited to current year's Profit & Loss Account. The further efforts for recovery of these loans will continue and recoveries, if any, shall be considered as income for the year in which the recoveries are made.

(B) SIGNIFICANT ACCOUNTING POLICIES:-

1. Accounting Convention

The financial statements have been prepared in accordance with the historical cost convention and on going concern concept and in accordance with the generally accepted accounting principles and the statutory provisions prescribed in Banking Regulation Act 1949, the Multi State Co-operative Societies Act 2002, circulars and guidelines issued by the Reserve Bank of India from time to time, and the Accounting Standards issued by the Institute of Chartered Accountants of India and practices prevailing within the banking industry in the country, except as otherwise stated.

2. Use of estimates

The preparation of the financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results


32

could differ from those estimates. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Any revisions to the accounting estimates are recognized prospectively

3. Foreign Exchange Transactions

The bank has not done any foreign exchange business, nor does it have any foreign exchange assets/ liabilities.

4. Investments

4.1. In accordance with the extant instructions issued by Reserve Bank of India for the purpose of valuation of Investments, the Bank has classified its Investment portfolio as at 31st March 2014 into the following two categories:

(a) Held to Maturity: Investments under this category are carried at their book value. Any premium on acquisition of a security is amortized over the balance period to maturity.

(b) Available for Sale: Investments in the category are valued at market rate and net depreciation in the category, if any, is provided for. Net appreciation, if any, is ignored.

4.2. The Investments have been disclosed in the Balance Sheet as under:

SLR:

(a) Central and State Government Securities

Non-SLR:

(a) Other Trustee Securities

(b) Shares of Co-operative Institutions

(c) Other Investments

4.3. Market Value of Central and State Government Securities is determined in terms of Yield to Maturity method indicated by Fixed Income Money Market Dealers Association (FIMMDA).

4.4. The Amortization of premium on investments in Held to Maturity category is calculated on days basis to maturity.

4.5. A provision of Rs. 15,29,629 has been made, out of Investment Fluctuation


33

Reserve, for Depreciation on Investments under Available for Sale category as on 31st March, 2014 (previous year Rs. Nil).

4.6. Investment Fluctuation Reserve is being created as per the extant instructions of RBI.

5. Loans and Advances

5.1. (a) The classification of advances into Standard, Sub-standard, Doubtful & Loss assets as well as provision on non-performing advances has been arrived at in accordance with the extant instructions issued by the Reserve Bank of India with regard to Income Recognition and Assets Classification (IRAC) from time to time and as applicable for preparation of this Balance Sheet.

(b) In addition to this, a general provision on standard assets is also made as per the extant instructions issued by Reserve Bank of India i.e. @ 0.40% of the outstanding amount on a portfolio basis except in the case of direct advances to agricultural and SME sector which has been @0.25% and advance under Commercial Real Estate sector, which attract provisioning @1%.

5.2. The overdue interest in respect of non-performing advances is provided separately under "Overdue Interest Reserve" in accordance with the extant instructions issued by Reserve Bank of India.

6. Fixed Assets and Depreciation

6.1. Fixed Assets are stated and carried in the Balance Sheet at written down value, purchase/ additions during the year less depreciation for the year thereon. Cost includes incidental expenses incurred on acquisition of assets.

6.2. Fixed Assets are depreciated at the rates mentioned below:

(a) Furniture and Fixtures: 15% (W.D.V.)

(b) Office Equipments: 15% (W.D.V.)

(c) Office Vehicles: 15% (W.D.V.)

(d) Safe, Locker Steel Almirah: 2.5% (W.D.V.)

(e) Computer Hardware & Software: 33.33% (Straight Line)

(f) Temporary Structures: 100%


34

6.3. Depreciation on assets purchased in the first 6 months of the year is provided at full rates. Depreciation at 50% rates is provided for fixed assets purchased in the last 6 months of the financial year. Depreciation on assets sold during the year is charged up to the date of sale.

6.4. Depreciation on assets, where cost of each item is under Rs.5,000/- is provided @ 100% in the year of purchase itself.

6.5. There has been no change in method and rates of providing depreciation as compared to the previous year.

7. Revenue Recognition (Accounting Standard AS-9)

7.1. Items of income and expenditure are generally accounted for on accrual basis.

7.2. Income from non-performing assets is recognized to the extent realized, as per the extant instructions issued by Reserve Bank of India.

7.3. Dividend received from shares of co-operative institutions is accounted on receipt basis.

7.4. Interest on overdue fixed deposits is provided on ad-hoc basis in accordance with the extant instructions of RBI. Actual interest expense is accounted for at the time of renewal of FDR

7.5. There are no material prior period item's included in Profit and Loss account.

7.6. Certain items of income such as Locker Rent, loan processing fee are recognized on cash basis. The quantum of such income is not material.

8. Non-Performing Assets

8.1. Non-Performing assets of the bank have been identified and provision thereon has been made as per the extant instructions of Reserve Bank of India.

8.2. Any advance including Bills Discounted, which became Non Performing Assets at the close of the year, interest accrued and credited to income account is reversed or provided for, if the same is not realized.

8.3. Interest accrued on NPA is not shown as income but shown as "Overdue Interest Reserve" in the Balance-sheet.


35

Due to Depreciation

For period up to 31st March 2013

For the year 2013-14

As on 31st March 2014

5,17,465

2,14,291

7,31,756

(C) DISCLOSURES AND NOTES ON ACCOUNTS:

1.Disclosure As Per the extant instructions of Reserve Bank of India:

9. Employee Benefits (Accounting Standard AS-15)

9.1. The liability towards gratuity is assessed and calculated on actuarial valuation and paid every year to L.I.C. of India as Employees Group Gratuity Scheme.

9.2. Bank's Contribution towards provident fund is paid every month to Commissioner of Provident Fund in accordance with the provisions of Employees Provident Fund Scheme, 1952 and Employees Pension Fund Scheme, 1995.

9.3. Leave encashment is accounted on actual payment basis.

9.4. The bank does not have any scheme of LTC for its employees, however a regular taxable allowance in this regard is being paid as a part of salary.

10. Reserve Fund and Other Reserves

10.1. Dividend remaining unclaimed over 3 years are transferred to Statutory Reserve Fund a/c.

10.2. Nominal Membership and Entrance Fees are transferred to Statutory Reserve Fund every year.

11. Taxation

11.1. Income Tax expense comprises of Current Tax. Current Tax is provided on the Taxable Income using applicable Tax Rates and Tax Laws.

11.2. Deferred Tax Liability in accordance with AS-22 (Accounting for Taxes on Income) has been recognized, as per the details given below:


36

1.5 Advances of Rs. 2,83,96.93 Lacs (Previous year Rs. 2,20,08.05 Lacs) shown in the

Balance Sheet include:

1.1

1.2

1.3

1.4

Sr. No. Particulars 31.03.2014 31.03.2013

Capital to Risk Asset Ratio (CRAR)

a. Movement of CRAR (Basic Points)

b. Risk Weighted Assets

Values of Investments are as under:

A. Government / Approved Securities (SLR)

a. HELD TO MATURITY

Face Value

Book Value

b. AVAILABLE FOR SALE

Face Value

Book Value

Market Value

B. Other Investments (Non SLR)

Shares of Co-operative Institution

Other (Book Value)

Other (Market Value)

Advances against Shares & Debenture

16.15%

187

31743.19

8390.00

8398.17

1710.00

1640.47

1625.17

0.02

1604.74

1605.62

NIL

Amount in Rs./Lacs

ParticularsFUND BASED NON FUND BASED

31.03.14 31.03.13 31.03.14 31.03.13

i) Advances against Real Estate,

Construction Business, Housing

ii) Advance to Directors

iii) Advance to Relatives of Director

& Companies / firms in which

they are interested

iv) Advances to Chairman

14,652.25

Nil

Nil

Nil

6,017.31

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

14.28%

0.76

20375.02

5,625.00

5,640.16

1,625.00

1,625.99

1,653.59

0.02

494.72

497.61

NIL


37

1.6

1.7

1.8

1.9

1.10

Sr. No. Particulars 31.03.2014 31.03.2013

Average Cost of Deposits

a. Gross NPAs

b. Net NPAs

Movement in NPA

Opening Balance

Add : Additions during the year

Less : Closed/ Recovered/ Written off

Closing Balance

a. Interest income as a percentage of working funds

b. Non-interest income as a percentage of working

funds

c. Operating profit as a percentage of working funds.

d. Return on Assets

e. Business (Deposits + Advances) per employee

f. Profit per employee (Before Tax)

g. Profit per employee (After Tax)

a. Provision on NPAs required to be made

b. Provision on NPAs actually made

C. Provisions on depreciation in investments

required to be made

d. Provisions on depreciation in investments

actually made

e. Provision on Standard Assets required to be made

f. Provision on Standard Assets actually made

7.98%

424.70

310.04

50.99

560.09

186.39

424.69

10.87%

1.21%

2.17%

1.81%

351.97

3.87

2.68

45.61

114.66

17.84

17.84

79.42

79.52

2. Related Party Disclosure (Accounting Standard AS-18)A. List of the related parties and their relationship

Name of the party Relationshipa. Key Managerial Personnel 1. Shri Yashvir Kumar Gupta Chairman

8.13%

50.99

-

34.71

156.57

140.28

50.99

10.66%

0.53%

1.07%

1.03%

345.22

2.06

1.39

7.61

52.77

-

-

70.93

72.49


38

b. Relatives of the Key Managerial Personnel 1. Shri Suveer Kumar Gupta Son of Shri Yashvir Kumar Gupta2. Smt. Swarn Lata Gupta Wife of Shri Yashvir Kumar Gupta3. M/s Yashvir Kumar Gupta HUF HUF of Shri Yashvir Kumar Gupta

B. Details of transactions with the related parties carried out on an arm's length basis.

S. No.

Salary paidRent paid

1.2.

Nature of the transaction

Relatives of Key Managerial Personnel

Relatives of Key Managerial Personnel

31st March 201416,06,040.00

9,86,000.00

31st March 201311,78,240.00

9,43,500.00

Opening balance as on 01.04.2013Additions during the yearLess : Amortization/ DepreciationClosing balance as on 31.03.2014

26.073.88

12.3417.61

5. Impairment of Assets (Accounting Standard AS-28)In accordance with Accounting Standard 28 the bank has written off a sum of Rs. 95,233/- to its profit and loss account on account of Impairment of assets.

3. Leases (Accounting Standard AS-19)The bank has cancelable operating lease and the disclosures under AS 19 on 'Leases' issued by ICAI are as follows:i) Lease rent payments of Rs. 86,85,828/- (Previous Year Rs. 65,76,542/-) have been

recognized in the statement of profit and loss for the year ended March, 2014.ii) The lease agreements entered into pertain to use of premises by the bank. The lease

agreements do not have any undue restrictive or onerous clauses other than those normally prevalent in similar agreements.

4. Intangible Assets (Accounting Standard AS-26)

Details of Computer Software included in Other Assets in accordance with AS-26 on Intangible Assets issued by the ICAI are as under:

(Amt. in Rs./ Lacs.)

6. Provisions, Contingent Liabilities & Contingent Assets (Accounting Standard AS-29)

(Amount in Rs./Lacs)

Bank Guarantees

Particulars 31/03/2014 31/03/2013

117.25 149.44


39

(Bank Guarantees are 100% secured against tangible securities.)

7. Segment reporting (Accounting Standard AS-17):There is only one segment namely “Banking”.

8. Details of Other Investments:8.1.Details of Non-SLR investments:

8.3. All the investments under this head are within limits defined as per the extant instructions of RBI.

8.4. Investments under this head have been valued at the lower out of book value and market value.

1.2.3.4.5.6.7.8.

Particulars Amount (Rs)S. No.

IDBI Liquid Growth FundLIC Nomura MF Liquid FundUTI Liquid Cash PlanReliance Liquid Treasury PlanReliance LiquidIty FundShares of District Co-op. Bank Ltd. SaharanpurShares of Indore Premier Central Co-op. Bank Ltd., Indor8.30% Tax Free Bonds issued byNHAI

2,90,00,0004,40,00,0002,00,00,0004,00,00,0002,50,00,000

1,0001,000

24,72,000

TOTAL 16,04,74,000

(1)1.2.3.4.5.6.

IssuerS.No.

Amount Extant of 'belowinvestment

grade securities'

Extant of'unrated

securities'

Extant of'unlisted

securities'

(2)PSUs (NHAI)FlsPublic Sector BanksMutual FundsOthersProvision held towardsDepreciation

(3)24.72

--

1580.000.02

-

(4)----

N/A-

(5)----

0.02-

(6)---

1580.000.02

-

8.2.Non-SLR Investments of the bank comprise the following items:


40

9. Statutory Liability 9.1 The Bank had a statutory liability, towards Education Fund of Rs. 2,17,122/- which

had to be paid to The National Co-operative Union of India Ltd., New Delhi under The Multi-State Co-operative Societies Act, 2002 towards appropriation made for the same in the year. The payment was made on 1st July, 2013.

9.2 DICGC Premium has been paid up-to-date & the next payment due date will fall in May, 2014.

9.3 No penalty has been imposed RBI till date.

10. Previous year figures have been regrouped and recasted wherever considered necessary to make them comparable with those of current year.

As per our report of even date attachedFor G.P. Gupta & Co.Chartered Accountants

sd/-

(G.P. Guptra)Partner(M. No. 073778)(Firm's Regn. No. : 004998C)

For Shivalik Mercantile Co-operative Bank Ltd.

sd/-(Suveer Kumar Gupta)

MD & CEO

sd/-(Sarvesh Singhal)

Director

sd/-(Yashvir Kumar Gupta)

Chairman

sd/-(Sudhakar Agarwal)

Director

sd/-(Shiv Puran Gulati)

Vice-Chairman

8.5.Non performing non-SLR investments are Nil.


41

APPROPRIATION OF PROFITS FOR THE YEAR 2013-14

Proposed Appropriation :

Accumulated Profit of previous years

Profit for the year 2013-14

Total Profit

77,70,180.10

5,22,01,492.83

5,99,71,672.93

OpeningBalance

RemarksAmount (in Rs.)

ClosingBalance

Statutory Reserve

Education Fund

Contingency Reserve

Investment Fluctuation Reserve

Share Transfer Fund

Proposed Dividend @ 12%

Total Appropriation

Accumulated Profit C/F to

next year

4,05,23,497.00

-

1,30,50,373.00 5,35,73,870.0025% of current year's Profit(Mandatory as per Multi-StateCo-operative Societies Act, 2002)

66,64,096.00

20,05,995.00

50,00,000.00

5,22,015.00

52,20,149.00

30,00,000.00

-

2,80,17,096.00

4,98,09,633.00

1,01,62,039.93

5,22,015.00

1,18,84,245.00

50,05,995.00

50,00,000.00

2,80,17,096.00

1% of current year's Profit(Mandatory as per Multi-StateCo-operative Societies Act, 2002)

10% of current year's Profit(Mandatory as per Multi-StateCo-operative Societies Act, 2002)

In accordance with RBIguidelines

Last year's dividend amountwas Rs. 1,49,31,528 @ 12%

-

-

-

42


BUDGET OF THE BANK FOR F.Y. 2015-16

Expenditure

Interest on Deposits & Borrowing

Salary

Rent, Electricity, Telephone, Insurance

Repair, Maintenance, Depreciation

Audit, AGM, Consultancy

Miscellaneous Exp.

Income Tax & Provisions

Net Profit

TOTAL

Rs. in Lacs

AmountAmountIncome

Interest on Loans

Interest on Investments

Miscellaneous Income

TOTAL

5,800

1,675

450

7,925

4,700

800

550

200

300

220

470

685

7,925

Operational Plan / Targets for F.Y. 2015-16

Description

Branches

Deposits

Loans & Advances

Share Capital

Membership

New Schemes

Net Profit (after Tax)

Proposed targets for year 2015-16

26

700

500

44

12000

Foreign Exchange

Area of operation to adjoining states

6.85

43


wThe Bank has ambitious plans to expand by having its branches in nearby states e.g.

Uttarakhand, Himachal Pradesh, Haryana, Punjab, Rajasthan and also in Delhi and

Chandigarh.

wIn order to stay in competition viz. a viz. public sector banks and private commercial

banks, we also need to continually move ahead on the front of I.T. enabled services.

We are therefore trying to add more and more services in our kitty - Tablet Banking (so

that our staff can open accounts even while in field), mobile payment system, online

shopping through ATM-cum-Debit Cards, e-commerce etc.

wInternally also, we wish to make use of technology to improve our efficiency and

reduce operational costs. Instead of physical movement of officers from one branch /

office to another, we shall rely more and more on tele-communication, video

conferencing, webinars etc.

wProviding foreign exchange services to our customers.

wAchieving Scheduled bank status as early as possible.

Long Term Perspective Plans


44

+,d ut

j

gekjh izxfr ij

600

500

400

300

200

100

0

1998

-99

1999

-00

2002

-03

2000

-01

2001

-02

2003

-04

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

Profit after Tax dj ds ckn ykHk

40000

35000

30000

25000

20000

15000

10000

5000

0

1998

-99

1999

-00

2002

-03

2000

-01

2001

-02

2003

-04

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

Deposits tekjkf'k;k°30000

25000

20000

15000

10000

5000

019

98-9

9

1999

-00

2002

-03

2000

-01

2001

-02

2003

-04

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

Loans & Adv. Ω.k o vfxze

25

20

15

10

5

0

1998

-99

12 3

46 7

15

21

2002

-03

2004

-05

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

Branch Network dqy 'kk[kk,°

vkidk lg;ksx

vkSj vVwV

fo'okl gh

gekjh iw¡th

Amount in Lacs Rupees (yk[k #i;s esa)

5500

5000

4500

4000

3500

3000

2500

2000

1500

1000

500

0

1999

-00

2002

-03

2000

-01

2001

-02

2003

-04

2005

-06

2006

-07

2007

-08

2008

-09

2004

-05

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

Net Worth 'kqº ewY;

Shivalik Mercantile Co-operative Bank Ltd. was registered as a Co-operative Society

under Uttar Pradesh Co-operative Societies Act, 1965 in 1997. It was granted the license to

conduct banking business as a Primary Urban Co-operative Bank in the district Saharanpur

by Reserve Bank of India in September, 1997. The Bank started operations on 5th

September, 1998 and has registered constant growth since then. Presently the bank is

rated amongst the best Urban Co-operative Banks in the state.

Subsequent to achieving a deposit base of more than Rs. 100 crores on 31st March,

2010, the bank was recognized as a Tier-II bank and was allowed to extend its area of

operation to entire state of Uttar Pradesh.

The bank has constantly been endeavouring to expand and had taken over an Urban

Co-operative Bank by the name of Bhoj Nagrik Sahakari Bank Maryadit at Dhar, Madhya

Pradesh. As a result of this merger, which was effective on 1st November, 2010, the bank

was de-registered from the state Government (UP Co-operative Societies Act, 1965) and

was re-registered under the Central Government (Multi-state Co-operative Societies Act,

2002) under the overall control of the Central Registrar of Co-operative Societies, Ministry

of Agriculture & Co-operation, New Delhi. Shivalik Bank thus became the first Multi-state

Urban Co-operative Bank of the state of UP.

Continuing the saga of inter-state expansion, Shivalik Bank again took over a weak co-

operative bank, Malwa Commercial Co-operative Bank Ltd. in Indore, MP. The merger was

made effective on 1st September, 2012. Thus Shivalik Bank got a second branch in the

state of Madhya Pradesh.

The Bank is fully computerized under CBS environment and has 20 branches at present,

out of which eleven branches are located within District Saharanpur, one each at Meerut, 2

each in Ghaziabad and Noida, and one each at Indore & Dhar in Madhya Pradesh.

The Bank is managed by a Board, which is well diversified, reputed and experienced.

The Board comprises persons from all walks of society viz. Industrialists, Agriculturists,

Traders, Professionals, Chartered Accountants, Retired Senior Bank Personnel etc. The

phenomenal growth & excellent reputation of the bank is much accredited to the personal

reputation and fame enjoyed by its Chairman & the Board of Directors, apart from the

professional management style of the Bank.

45

OUR PROFILE AND ACHIEVEMENTS



46

The bank has its head-quarters at Saharanpur, which is located at the junction of UP,

Uttrakhand, Haryana & Himachal Pradesh. The population of Saharanpur is approximately

9 lakhs as per census 2011. The main activities include trading, agriculture, handicrafts &

small industries. Saharanpur is famous for its wood carving work and wooden articles are

exported all over the world from here. Some very reputed industries like I.T.C. and Star

Paper Mills Ltd. are also located here.

A few of our major achievements are as follows.

MANAGEMENT:

?The Bank has maintained highest norms of account keeping and has been very prompt in

finalizing its annual accounts and getting it audited. The bank feels pride that the

Balance-Sheet of the bank is ready on 1st of April every year after finalizing annual

accounts.

?The IT awareness is very high in our bank. This is also due to the fact that the Chairman

and the CEO of the Bank are engineers with work experience with M/s Hindustan

Aeronautics Limited and M/s Tata Consultancy Services respectively.

?The bank tends to manage its business in a very professional and transparent manner.

We are regularly publishing our results/policies/interest rates/charges etc. on our

website apart from displaying them in our branches.

?All the senior personnel of the bank are IT conversant and make extensive use of

technological communication modes such as email and video conferencing, which

enables fast and cheap communication. The bank is gradually moving towards the

'paperless office' concept.

TECHNOLOGY INITIATIVES & INNOVATION:

?We have professionalized our management by having full computerization, and by

employing well-qualified staff. We have successfully implemented a state of the art 'Core

Banking System', thereby providing any branch banking to all our customers. At one time

our bank was the first fully computerized bank of District Saharanpur. Further the

installation of CBS and use of technology has also enabled the bank to provide e-

Banking to its customers. Very soon, Mobile Banking is also going to be launched.

?The Bank is successfully connected to the country-wide ATM network, 'Rupay' managed


47

by NPCI. As a result, the customer of Shivalik Bank can use their ATM cards not only at

our own ATMs but also at the ATMs of all other banks. All branches and BC offices of the

bank are equipped with ATMs and cash deposit machines.

?The bank is also participating directly in the RTGS/NEFT transactions as a sub-member

of IDBI Bank Ltd.

?The bank constantly looks forward to innovations in banking. Apart from participation in

RTGS/NEFT network, the bank has arrangements with leading private commercial

banks for issue of 'at-par cheques' to facilitate remittances for its customers and for

speedy collection of outstation instruments of its customers.

?An I.T. department has also been set up at the Bank and we are providing computer

training to our staff officers also to keep them abreast of all relevant innovations and

advancements in technology.

OPERATIONS:

?Within a short span of about 16 years, the total business of the bank has grown to Rs.

882.95 crores with the deposits at Rs. 426.27 crores, the advances at Rs. 279.63 crores

and investments at Rs. 177.05 crores.

?The Owned Funds of the bank have grown from Rs. 15.50 lacs as on 5th September,

1998, the bank's opening day, to a net worth of more than Rs. 51 crores as on 31st March,

2014. This shows the trust our shareholders and the public have in the bank.

?The Bank has been in profit from the very first year of its working and has shown constant

growth. The bank has continuously been paying a dividend of 12% to its members.

?The share of Government or large institutions in the deposit base of the Bank is very little.

The Bank relies on the trust and confidence that individual investors have placed in it. As

a result the customer base of the Bank has well exceeded 60,000 in number.

REGULATORY COMPLIANCE:

?The Bank has been strictly following the guidelines issued by RBI in all of its operations

and the working of the bank was highly appreciated by the officials of RBI during the

course of RBI inspections, the latest being in April, 2012. The Inspection reports received

from RBI have been highly satisfactory and very appreciative of bank's overall


48

performance.

?The Bank neither makes any investments in the shares/debentures nor does it give any

advances against the security of shares/debentures i.e. the exposure of the bank

towards share/debentures market is Nil.

?The Capital to Risk Assets Ratio of the bank, has constantly remained more than 12%

and presently is 16.15% as on 31.03.2014.

?The bank has successfully met the targets for maintenance of SLR through investments

in Government and Approved Securities as per RBI norms.

?The Bank is regularly maintaining the required ratio of 40% of total financing to Priority

Sector and in this completed year, the share of priority sector advance has gone to an all

time high of 87.23%.

FINANCIAL INCLUSION:

?The bank is pioneering in the Co-operative Sector towards efforts made for Financial

Inclusion. We have taken a great initiative by starting micro-finance to self-help groups.

To run this efficiently we have entered into partnership with an NGO, which provides

livelihood development trainings to members of SHG apart from training them in better

money management. Almost all members of these groups are women belonging to BPL

category with many groups inhabited by women belonging to minority community.

?Till the end of June, 2014, the bank has linked 6200 SHGs comprising app. 80,000

individual families to its microfinance program. The total amount disbursed by the bank to

these SHGs is Rs. 21.27 crores as on 30 June, 2014. These figures are increasing at a

rapid rate.

?The bank has initiated a program to appoint BCs in rural areas to provide banking

services to rural masses. In view of this, Bank has opened its BC offices at remote

places where full size branch was not needed at present. In Saharanpur, we have BC

offices in Nakur, Chhutmalpur and Chilkana. 3 BC offices have been opened in Meerut at

Hastinapur, Mawana and Maliyana village. There are three BC offices in Noida also at

Nithari, Sadarpur and Barola villages. Lastly, there is one BC office in Patnipura, Indore.


49

OUR CUSTOMER SERVICE INITIATIVES

The Bank has earned an excellent reputation for providing good customer service and

utilization of latest technological enhancements. The bank is providing some very

innovative and customer friendly services to its clients. Some of these are home banking,

tele-banking, prompt issue of remittance instruments, same day payment of local clearing

instruments, promptness in outstation collection, extended working hours etc.

A List of Customer Service initiatives taken by the bank is as follows:

ATM-cum-DEBIT CARD : The bank is issuing to its depositor customers ATM-cum-

Debit Cards which can be used at 1.73 lac ATMs throughout India and 9.53 lac merchant

establishments. Thus, the bank has earned the distinction of being the first cooperative

bank in northern India to offer Debit Card facility to its customers. Even in whole of India,

there are only 18 cooperative banks including ourselves who offer this high-tech facility.

Very soon, we are starting online shopping facility through debit cards also.

Tablet Banking : Tablets are highly portable, yet convenient devices to keep our field

staff connected with the H.O. Even while remaining in field, they can not only maintain

record of lead generation, but will also be able to open accounts through the tablets given to

them.

Extended working hours: Our branches are open for customer dealing and locker

operations from 10 am to 5 pm on weekdays and from 10 am to 2 pm on Saturdays. Also, all

the staff at a branch does not take lunch/tea breaks together, so that the customer service

does not stop even during lunch hours.

Sunday Banking: Bank is opening most of its branches on Sundays also, offering such

services that can be offered while other banks are closed.

Entertaining of late customers: If a customer walks in after 5 pm (close of business

hours), we entertain him by marking his transactions for the next business day. Such

transactions are recorded in the registers/systems duly provided to the branches and are

executed after day open on next business day.

May I Help You counters: All our branches are equipped with a 'May I Help You'/'Inquiry'

counter, which help the new customers to get their work done without any delay or


50

confusion. The staff sitting at these counters are well trained to handle inquiries,

suggestions and help in filling up forms etc

Drop-box for Clearing Cheques: All our branches have installed a drop-box where a

customer can drop a cheque intended for clearing/transfer 24 hours a day. This box is

securely locked and is taken care of by the 24 hour guard. All cheques received during the

night are taken up for clearing/transfer the next day. This way the customers can save one

day in clearing transactions.

Passbook Printer: All our branches are equipped with passbook printers, so that

customers get neat and legible passbooks updated instantly.

Currency counting machines: All our branches are equipped with adequate number of

currency-counting machines so that the work of the customer is attended to within the

shortest time possible.

SMS Alerts facility: We provide SMS alerts to our customers for all transactions made

in their accounts. The information provided in the alerts includes transaction type, amount,

date, closing balance and transaction information.

Camera for customer's photo: All our branches have been provided with a portable

camera so that customers need not submit their passport size photographs. The branch

officials directly click their photographs and get it printed.

Photocopy machine: The branches are equipped with photocopy machines so that

customers do not have to go out to get copies of their documents done.

Availability of Stamp papers: For use in loan documentation, the bank directly

purchases stamp papers from the Government Treasury and gets the cost reimbursed from

the customer. This way the customers neither have to run around in search of stamp papers

nor do they have to pay commissions to private vendors to purchase stamp papers.

Personalized service: The bank keeps a track of its good customers and provides

personalized services to suit individual needs. We try to delight the customer by bonding

with him strongly. The bank wishes its good customers on their birthdays, anniversaries and

special occasions.

Home/Telephone banking: We entertain our customers over telephone and take their

telephonic requests. Based on their telephonic requests their account statements/ drafts/


51

cheques/ other documents are delivered/ picked up from their homes/ offices. We also

accept service requests over e-mail. We also arrange to get the accounts opened/

documentations done at customers' homes in case customer is unable to come to the bank.

Branch infrastructure: It may also be noted that we have provided excellent branch

infrastructure to enhance customer satisfaction. Our branches are equipped with air

conditioning, clean toilets, proper waiting lounges, availability of drinking water etc.

Technology: We have installed suitable CBS software to enhance customer

satisfaction. The software provides any counter operation, any branch banking etc. We are

also connected with the 'Rupay' network for ATMs and to NFS for RTGS/NEFT as a sub-

member through a leading bank.

Customer oriented banking procedures: We have strong customer oriented banking

procedures that ensure that the customer feels pleasure in dealing with us. For example

whenever a new customer approaches the bank we get his KYC formalities done once and

later whenever he/she approaches the bank again, we refer to his earlier ID and do not ask

for documents again & again.

ATM-cum-CDM: The bank has provided ATM-cum-CDM at all of its branches & BC

offices so that the customers may now not only withdraw money from their accounts but can

also deposit money when branches are closed.

SMS Alerts: All those account holders who have registered their mobile no. with the

bank, receive instant alerts on their phone whenever there is a transaction in their account.

This facility is being provided free of charge.

Insurance Business: The Bank has tied up with the leading PSU Insurers - Oriental

Insurance to offer insurance of property, automobiles, plant & machinery and health

insurance as well. The move has been welcomed by the constituents of the bank.

Security: We take utmost care to instil faith and trust in our customers by keeping all our

premises safe & secure. We have taken the services of Ex-Army-men Welfare Association

to provide strong and capable security guards. All our premises are CCTV enabled and are

closely monitored.

The Bank has achieved a high level of satisfaction for all its stakeholders viz. the

Shareholders, the Customers, the Staff and the Regulatory Authorities.


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FORTHCOMING SERVICES:

E-banking: Bank is gearing up for launch of its e-banking service so that our customers

will be able to access their account on their computer to know balance in the account &

download statement of account etc. They will be able to request for transfer of funds & other

misc. services also.

E-Commerce: The facility to make online payments to others through Bill Desk will also

be offered in very near future.

Foreign Exchange Services: The bank is going to provide foreign exchange services

to its customers soon so that they may be able to remit / receive funds in foreign currency.

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