Annual Report 2015-16 - Catholic Syrian Bank

1 Annual Report 2015 -161S. RamakrishnanIndependent DirectorRadha Unni Independent DirectorAshish Ahluwalia Non-executive DirectorK. Subrahmanya Sarma Non-executive DirectorAlok Kochhar Non-executive DirectorS. Santhanakrishnan ChairmanAnand Krishnamurthy Managing Director & CEOS umeer Bhasin Independent Anantharaman Non-executive DirectorBobby Jos C Independent DirectorM. Madhavan Nambiar Independent Venkatachalapathy Additional Director -RBI NomineeRavinder Bhookya Additional Director -RBI NomineeBoard of DirectorsTHE Catholic Syrian BANK LIMITEDR egistered Office: CSB Bhavan , s College Road,Post Box No. 502, Thrissur - 680 020, Identity Number : U65191KL1920 PLC000175 Tel: 0487 - 2333020 Fax: 0487 - 2338764 Website: Email.

2 Senior ManagementAntony P V Chief Financial Officer & Head - RiskJiz P Kottukappally Head - OperationsKurian George Business Head Kerala & Overall charge - Chennai & Coimbatore ZonePrem Kumar Thampi Head - Wholesale BankingBharath Mani Head - Retail Banking (Assets & Liabilities)Sekhar Rao Head - Strategy & Change ManagementMohan Menon T Head - HRAjit Kumar K Chief Credit OfficerBaby P V Chief Compliance Officer Thomas K George D G M - Inspection, Audit & VigilanceSijo Varghese Company SecretaryBoard of Directors Seated, from left to right: Mr. M. Madhavan Nambiar, Mr. K. Subrahmanya Sarma, Mr. Anand Krishnamurthy, Mr. S. Santhanakrishnan, Mrs.

3 Radha Unni, Mr. Ravinder BhookyaStanding, from left to right: Mr. S. Ramakrishnan, Mr. V. G. Venkatachalapathy, Mr. Sumeer Bhasin, Mr. C. K. Gopinathan, Mr. Bobby Jos C., Mr. T. S. Anantharaman, Mr. Ashish AhluwaliaBoard of Directors on the date of approval of the Annual Financial Statements for 2015 -16 Annual Report 2015 -163 Contents 1 Chairman s Message42 Managing Director s Message63 Directors Report84 CEO / CFO Certification435 Independent Auditor s Report446 Balance Sheet497 Profit & Loss Account508 Cash Flow Statement529 Schedules to Balance Sheet5410 Schedules to Profit & Loss Account5911 Significant Accounting Policies6012 Notes to Accounts6513 BASEL III Pillar 3 Disclosures914 Dear Shareholders,On behalf of my colleagues on the Board.

4 I place on record our heartfelt appreciation for the support and trust you have extended to the Bank. Details of the performance and initiatives taken by your Bank are provided in the enclosed Annual Report for the year 2015 -16. Before I deliberate on the Bank s performance, I would like to share with you the economic and banking environment in which your Bank performed during the year 2015 -16. The global economy advanced at a moderate pace in 2015 -16 with great dissimilarities across various economies. During the year, the world economy has struggled on a path to uniform and widespread economic stability. Global GDP growth remained passive during 2015 -16 and is expected to face sustained challenges going s growth story in the current year especially when compared to other developing countries, has been good.

5 However, it has not translated itself into performance in the banking sector. Overall, improved business environment, lower oil prices and progressive policy measures helped the economy to gain momentum towards the latter part of the year. It CHAIRMAN S MESSAGEis poised to recover further with industrial production gaining momentum in the current year. During the period under review, Indian Banking Sector has undergone significant turbulence and the operating environment continued to be difficult. The year under review has been a challenging one for your Bank in line with the Industry. As a one time measure, your board had decided to accelerate the provisioning for certain losses ahead of the time granted by the Reserve Bank of India.

6 This would help the bank to show better results in the coming period. While one can take the comfort that the requirements for NPA provisioning and the level of NPA were lower than in many banks, it has eroded the bank s profitability considerably. Your Bank has a great history of over 95 years. Often perceiving challenges as opportunities, it has weathered many a storm during this long journey and consequently built a reputation for bouncing back from the difficulties on each occasion with greater strength and determination. The Bank has substantially recovered from the risk of further NPA provisioning and stands on the threshold of a new era geared to battle challenges of the market place with renewed vigour and confidence.

7 The bank could not proceed with the IPO as the prevailing market conditions were Annual Report 2015 -165not conducive for bank stocks. This has curtailed the growth aspirations of the bank during the current year. The positive news is that the bank could raise over ` 100 Crores by way of issue of shares on preferential allotment basis to strengthen the capital the period under review, several steps were initiated in the organisation to recalibrate and consolidate our strengths. Persistent emphasis is being made towards building forward looking and technology aware Human Resources, who are aligned with the Digital Age in the twenty first century.

8 CSB has always evolved with time to embrace new challenges and changing consumer attitudes. Your Bank also realises that modern banking is all about connecting people to their money more accurately and efficiently than ever before. The Bank is squarely focussed on the demands and aspirations of its existing and prospective customers, committed to embracing and evolving a digital business model, to provide an immersive experience over a multitude of channels, information and interaction stations and an excellent Call-Centre, for any assistance. The Bank s online banking platform provides robust and customer friendly net banking services to its retail and corporate customers.

9 In providing banking through Mobile Phones, our customers are given low cost, round-the-clock, real time banking services focussed on convenience and security. Your Bank has launched its new corporate website to widen and strengthen its relationship with customers. Your bank has also provided an excellent ambience along with well-skilled teams of officials to serve the NRI customers. As stated earlier, entire industry was under stress and your bank is not an exception and hence the increase in NPA provisioning and the muted credit growth, adversely affected our profitability. However, compared to other banks, the loss reported is minimal and is already contained.

10 We believe that the downward spiralling is over and Bank is already on the trajectory of growth. We are confident that with infusion of fresh capital, the Bank can meet the projections set for the coming year and to achieve a higher trajectory of growth in the years to come and consolidate its CSR front, your Bank has implemented a slew of measures during the period under review. Your Bank is committed to increase its CSR reach and will spend over the coming years, supplemented by its continued focus towards sustainable development and responsible Bank continues to maintain high standards of Corporate Governance and upholds fairness, integrity & trust in all its dealings with behalf of my colleagues on the board, I place on record our gratitude for the support and guidance extended by the Government of India, RBI, SEBI, FIPB, IBA and other regulatory authorities.