1

statutory auditor

M/s. Vindu & AssociatesChartered Accountants

internal & ConCurrent auditors

1. M/s. Fakih & Co., Chartered Accountants

2. M/s. Yardi Prabhu & Associates LLP, Chartered Accountants

3. M/s. Bhagawathi & Bhat, Chartered Accountants

list of our Bankers

1. Reserve Bank of India

2. Mumbai District Central Co-op. Bank Ltd.

3. Bank of India

4. Axis Bank

5. Maharashtra State Co-op Bank Ltd.

6. ICICI Bank Ltd.

7. IDBI Ltd.

8. Union Bank of India

9. Kotak Mahindra Bank Ltd.

10. Dena Bank

11. State Bank of India

12. Raigadh District Central Co-op. Bank Ltd.

13. Bank of Maharashtra

14. HDFC Bank Ltd.

15. Ratnagiri District Central Co-op. Bank Ltd.

16. Bank of Baroda

17. Goa State Co-op. Bank Ltd. Panjim

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ProJeCted inCoMe & eXPenditure for tHe year 2017-18

31.3.2017 Budgeted (31.03.2018) Projected actual Projected actual

deposits 55698.58 56608.18 63110.74 —

advances 34768.17 31269.48 37135.42 —

net nPa% 3.00% 0.28% 0% —

Projected 2016-17 (2017-18) Projected actual

a inCoMe

interest on loan & advances 4277.00 4275.00 3936.44

interest & income on investments 3111.00 2150.00 2860.86

Commission, Brokerage & others 230.00 250.00 185.95

(total income = a) 7618.00 6675.00 6983.25

B eXPenditure

interest on deposits & Borrowing 3532.00 3250.00 3165.88

salaries & allowances 1600.00 1650.00 1430.13

directors fees 17.00 18.00 15.84

rent, insurance, lighting & taxes 200.00 200.00 196.37

law Charges 15.00 14.00 8.20

Postage, telegram & telephone 50.00 45.00 65.01

audit fees (statutory & internal) 32.00 30.00 30.13

depreciation 100.00 100.00 93.82

stationery, Printing & advertising 35.00 30.00 71.03

a.G.M. expenses 7.00 3.00 4.96

other exp. & Premium amortised 320.00 250.00 300.49

Provisions & Write off 800.00 800.00 765.78

income tax / f.B.t. 360.00 150.00 359.94

(total expenses = B) 7068.00 6540.00 6507.58

less: (total income = a) 7618.00 6675.00 6983.25

net Proft (a-B) 550.00 135.00 475.67

(Rs. in lacs)

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NOTICE(For Share Holders Only) 25th July, 2017

The 48th Annual General Meeting of KOKAN MERCANTILE CO-OPERATIVE BANK LTD., will be held on thursday, the 10th august, 2017 at 4.30 p.m. sharp at damodar thakersey Mulji Hall, dr. ambedkar Marg, Parel, Mumbai 400 012 to transact the following business :

1. ToreadandconfirmtheminutesoftheAnnualGeneralMeetingheldon28th September, 2016.

2. To consider and adopt : i. Annual Report for the year 2016 - 2017. ii. Profit&LossAccountfortheyearended31st March, 2017. iii. Balance Sheet as on 31st March, 2017.

3. ToconsiderandapproveAppropriationofProfit for the financial year2016–2017asproposedby the Board of Directors.

4. ToconsidertheReportofStatutoryAuditorsandcompliancethereoffortheyear2016–2017.

5. ToapproveBudgetfortheyear2017–2018.

6. ToappointInternalandStatutoryAuditorsfortheyear2017–2018andtofixtheirremuneration.

7. To take note of the loans and advances outstanding from the Directors and their relatives during the year 2016–2017[videsection39(3)oftheMultiStateCo-operativeSocietiesAct,2002].

8. To write off loans recommended by the Board of Directors and approved by Statutory Auditor.

9. Any other matter with the permission of the Chair.

By order and on behalf of the Board of Directors

ChiefExecutiveOfficer

N.B. :

1. QuoruM : If there is no quorum by the appointed time, the meeting shall stand adjourned and the adjourned meeting shall be held half an hour later at the same venue for which quorum is not necessary.

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2. reQuest to tHe MeMBers :

i) Any member desiring to seek information pertaining to the accounts is requested to write to the Bank atleast six days prior to the date of the Annual General Meeting

ii) Members,whohavenotcollectedtheirShareCertificate/suptillnow,arerequestedtocollectthe same,attheirearliest,fromtheRegisteredOffice/OutstationBranches.

iii) Members those who are not availing loan facility or having any Bank account attracts the provision ofdisqualificationundersection29(b)ofMultiStateCo-operativeSocietiesAct,2002readwithBye law no. 13(d) of the Bank. the Board of directors therefore requests all members to open their accountwiththeBankandintimateaccountdetailstoCentralOfficeShareDepartment,Harbour Crest, Mazagaon t.t., Mumbai 400 010 or nearest Branch requesting the said department/Branch to deposit their dividend in their respective Bank account.

iv) Members are requested to attend the Bank’s General Body Meetings at least once in three years to avoidattractionofprovisionofdisqualificationundersection29(c)ofMultiStateCo-operative societies act, 2002 read with Bye law no. 13(c) of the Bank.

v) Members those who have not yet obtained their Membership identity Cards are requested to submit TwolatestPassportSizePhotographstoShareOfficeratBank’sCentralOfficeShareDepartment in order to issue the Members identity Card to them.

vi) reserve Bank of india has instructed all Banks to comply with the kyC of every account holder which is mandatory and therefore the members those who are having accounts and not complied with the kyC are requested to submit copy of their Photo identity, Proof of residence and two latest Passport size Photographs immediately in order to avoid any inconvenience or prohibition for operating the account in future. account holders are also required to note that if the accounts remaining non-operative for more than 10 years, balance of such accounts will be transferred and deposited in the depositors education & awareness fund 2014 with reserve Bank of india as per guidelines issued by the reserve Bank of india.

vii) Members / deposit account holders are requested to notify their Mobile numbers and e-mail address with their respective Membership / deposit accounts in order to avail the sMs alert facility and notices, Correspondence and copy of annual report by e-mail.

viii) aWard to/feliCitation of Meritorious CHildren of tHe MeMBers :

The Bank has formulated a policy to felicitate children of the members in the order of merits. Members are therefore requested to provide to the Bank, information about achievements of their children wardinSSCandHSCexaminationsheldfortheacademicyear2016–2017iftheirchildren/ward have secured 85% & above in aggregate in SSC and 80% & above in aggregate in HSC :

a) Under the scheme, parent member who is registered on 31st March of the preceding year shall be eligible to apply.

b) If both the parents are members, only one parent member will be eligible to apply.

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ANNEXTURE - A( As required by the Commissioner for Co-operation vide

Circular No. UBD/D.4/AR/Inform/92 dated 30.05.92 )

NAME OF THE BANK KOKAN MERCANTILE CO-OP. BANK LTD.

REGD. OFFICE ADDRESS Harbour Crest, Mazagaon T.T. Mumbai 400 010

DATE OF REGISTRATION MSCS/CR/91/99 dt. 29.06.99 DATE &NO. OF RBI LICENCE UBD.MH.646 PU/S 22 of B.R.Act 1949

JURISDICTION Greater Mumbai, Thane, Raigad, Ratnagiri and Sindhudurg Districts, Miraj, Pune, Kolhapur in Maharashtra State, Panjim in Goa, Hyderabad in Andhra Pradesh, Bangalore, Belgaum in Karnataka, Surat in Gujarat.

iteMs ( as on 31st March 2017 ) ( Amount in Lakhs )

No. of Branches including H.O. 26

Membership Regular 49,881 Nominal 8,888

Paid-up share capital 1,280.84

Total Reserves and Funds 10,874.67

Savings 25,967.91 Deposits Current 5,724.24 Fixed 24,916.03

Secured 31,110.41 Un-secured 159.07 Advances Total % of Priority Sector 53.24% Total % of Weaker Section 13.72%

Borrowings D.C.C. — M.S.C. —

Investment 16,785.27

Overdues % 5.24%

AuditClassification a

Total Staff Sub-staff 34 Other staff 214

Working Capital 71,051.64

CRAR Ratio 17.28%

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DIRECTORS’ REPORTDear Members,The Board of Directors hereby presents this 48th Annual Report along with the Audited Balance Sheet as at 31stMarch,2017andtheProfit&LossAccountfortheyearendedMarch31,2017.PerforManCe oVerVieW :The overall performance of the Bank during the year had been progressive and very satisfactory as compared tothebankingindustryinthecountry.ThefinancialresultismainlyevidentintheprimebarometerofincreaseinDeposits,Advances,WorkingCapital,Reserve,GrossIncome,NetProfit&CRARoftheBank.Thesustainedefforts of one and all have enabled the Bank to increase its Share Capital to rs. 1,280.84 lakhs and Reserve stood to rs. 10,874.67 lakhs. The Banks own fund stood to Rs. 12,155.51 lakhs and Deposit of the Bank stood to rs. 56,608.18 lakhs and Advances at rs. 31,269.48 lakhs as on 31st March, 2017. Bank’s Working Capital stood to rs. 71,051.64 lakhs whereas Gross Income of the year stood to rs. 6,983.25 lakhs. Bank’s NetProfitfortheyear2016-17wasrs. 475.67 lakhs, which is all time high in the history of the Bank, after providing all statutory provisions and payment of income tax.The performance high lights of the year 2016-17 are as under : (Rs. In lacs) 31.3.2016 31.3.2017 Growth Percent

Share Capital 1,143.90 1,280.84 11.97%Reserves 10,314.25 10,874.67 5.43%Owned Funds 11,458.15 12,155.51 6.09%Deposits 50,698.50 56,608.18 11.66%Loans & Advances 28,756.83 31,269.48 8.74%Investments 13,499.35 16,785.27 24.34%Working Capital 63,767.36 71,051.64 11.42%Gross Income 6,548.68 6,983.25 6.64%Total Expenditure 6,388.15 6,507.58 1.87%NetProfit 160.53 475.67 196.31%Capital to Risk Assets Ratio 16.20% 17.28%

net Profit :BankhasaNetProfitofrs. 475.81 lakhs available for appropriation in the current year including brought forwardprofitofRs.0.14lakhsafterprovidingstatutoryprovisionsrequiredasperReserveBankofIndianormsasagainstprofitofrs. 163.13 lakhs of last year. Bank has provided rs. 359.94 lakhs for payment of income tax during the year.

diVidend :The Board of Directors recommends dividend @10% per annum this year, on pro rata basis subject to approval of Reserve Bank of India.

aPProPriation :TheBoardofDirectorsrecommendthefollowingappropriationoutofthenetprofitavailablefordistribution:

aPProPriation of Profit (2016-17) amount (rs.)B/FProfit 14,385.97+CurrentYear’sNetProfit 4,75,66,797.49 4,75,81,183.46Less Statutory Reserve 25% 1,18,95,296.00 –"–ContingencyFund 10% 47,58,118.00–"–Education Fund 1% 4,75,811.00 –"–Dividend Payable to Members 10% 1,17,75,836.65–"–Ex-gratia to Employees 10% 1,01,53,868.80–"–Building Fund 55,00,000.00

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–"–Members Welfare Fund 15,00,000.00–"–Staff Welfare Fund 15,00,000.00 4,75,58,930.45Balance carried forward 22,253.01total 4,75,81,183.46

MeMBersHiP :Membership of the Bank stood at 49,881as on 31st March, 2017 as against 49,584 as on 31st March, 2016. The number of nominal members as on 31st March, 2017 was 8,888 (as against 8,376 as on 31.3.2016) which is 17.82% of the total members as against 20% permissible by Reserve Bank of India.

sHare CaPital :Paid up Share Capital of the Bank as at the year-end stood at rs. 1,280.83 lakhs, as compared to Rs.1,143.90 lakhs as at the previous year end, giving a rise of 11.97% in the equity during the yearthe Bank appeals to the members to purchase shares atleast upto minimum of rs.1,000/- as additional shares in order to increase the Bank’s own capital base, which will ultimately increase networth of the Bank.

reserVes and otHer funds :The Reserves and Other Funds of the Bank stood at rs. 10,874.67 lakhs on 31.3.2017 as against Rs. 10,314.25 lakhs of last year, further strengthening the Bank’s position.ThefollowingtableshowsthefiguresoftheReserves&OtherFundsundervariousheadsason31.3.2017as compared to that as on 31.3.2016 :

(Rs. In Lakhs)

P a r t i C u l a r s 2015-2016 2016-2017 R I S E (Rs.)

Reserve Fund (Statutory) 1,238.40 1,311.95 5.94%

Building Fund 1,244.42 1,244.42 --

Dividend Equalization Fund 12.39 69.59 461.66%

Bad and Doubtful Debts 2,611.67 3,206.23 22.77%

Contingent provisions for Standard Assets 151.11 201.11 33.09%

Staff Welfare Fund 6.82 0.00 -100.00%

Members’ Welfare Fund 18.34 17.49 - 4.63%

Development Reserve Fund 19.75 19.75 --

Charitable Fund 4.25 4.25 --

Contingency Fund 200.75 217.06 8.12%

Reserve for Investment Fluct. Fund 153.15 153.15 --

Reserve for Depreciation on Investment 404.63 339.82 - 16.02%

Revaluation Reserve 4,004.83 3,837.11 -4.19%

General Reserve 213.39 213.39 --

Special Reserve 30.35 39.35 29.65%

Total 10,314.25 10,874.67 5.43%

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WorkinG CaPital :The Working Capital stood at rs. 71,051.64 lakhs as against rs. 63,767.36 lakhs of the last year ThefollowingabridgedBalanceSheetreflectsthecompositionofworkingcapitalasattheyearend:

(Rs. in Lacs)

2015-2016 Liabilities 2016-2017 2015-2016 Assets 2016-2017 Own Funds Liquid Assets (Share Capital,Bldg., (Cash, Bal. with Banks 11,458.15 Reserves & Other Funds) 12,155.51 27,617.66 & Investment) 31,437.93 50,698.50 Deposits 56,608.18 28,756.83 Advances 31,269.48 Interest receivable on --- Borrowings -- 956.06 Loans & Investments 1,070.82 Premises, Fur. & Fixture Vehicles, Sec. Items, Computers, Encoding 1,447.58 Other Liabilities 1,812.14 5,278.71 Machines, Generator 5,193.43 163.13 Profit&LossA/c 475.81 1,158.10 Other Assets 2,079.98

63,767.36 71,051.64 63,767.36 71051.64

dePosits :Your Bank’s total deposits reached to rs. 56,608.18 lakhs as on 31.3.2017 as compared to Rs.50,698.50 lakhs at last year end. The efforts to mobilize deposits were affected due to many stringent laws, market recession, political turmoil and demonetization. Bank’s CASA Deposit stood to 55.98% of the total deposit as on 31.3.2017 compared to 49.32% of the last year.

Composition of deposits of the Bank is given here under :(Rs. In lacs)

31st March, 2016 % 31st March, 2017 %

Short/Medium Term Deposits 25,694.25 50.68 24,916.03 44.02Current Deposits 4,628.15 9.13 5,724.24 10.11Saving Deposits 20,376.10 40.19 25,967.91 45.87

total 50,698.50 100.00 56,608.18 100.00

loans & adVanCes :The advances of the Bank as on 31st March, 2017 stood at rs. 31,269.48 lakhs as against Rs. 28,756.83 lakhs of the last year. Bank had made advances of rs. 14,283.70 lakhs to 9,643membersduringthefinancialyear. However, due to poor take off, adverse market condition and demonitisation during the year, Bank could not reach to the desired CD Ratio during the year

The CD ratio was 55.25%. The number of borrowers stood at 9,701 at the end of the year

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adVanCes to Priority seCtor & Weaker seCtion :Your Bank is eagerly following the policy prescribed by the Reserve Bank of India to grant loans and advances to priority sector and weaker section and keep pace with the growth in other types of advances. As on 31.3.2017 the Bank had advanced rs. 16,647.58 lakhs to the priority sector and rs. 4,288.94 lakhs to the weaker section. Percentage of priority section advances to the total advances is 53.24%. However, Weaker Section Advances stood to 13.72% as on 31.3.2017.

PurPoseWise analysis of adVanCes :The Bank’s lending for various purposes is indicated in the following table.

analysis of adVanCes (as on 31.3.2017)

(Rs. in Lakhs )

no. Purpose of loan amount % no. of Borrowers % 1. Accomodation (Housing) 5,295.73 16.94 4087 42.13

2. Small Scale Industries 2,595.35 8.30 654 6.74

3. Trade and Commerce 2,524.33 8.07 990 10.21

4. Transport Operators 1,599.71 5.12 387 3.99

5. Self Employed (Professionals) 1,131.58 3.62 242 2.49

6. Education 261.31 0.83 103 1.06

7. Other Purpose 17,861.47 57.12 3238 33.38

Total 31,269.48 100.00 9701 100.00

adVanCes to direCtors and tHeir relatiVes :We are pleased to inform that no advances were granted or are outstanding on any Director or their Relatives as on 31st March, 2017.

non PerforMinG assets :The stringent efforts put in by the Recovery Team in co-ordination with the Credit and Legal Departments and staff at all level bore fruits and the Bank’s Gross NPA as on 31st March, 2017 substantially reduced to 10.51%asagainst16.20%ofthelastfinancialyear.BankispleasedtoinformyouthatitsNetNPAason31stMarch, 2017 stands to 0.28% as against last year’s 7.83%. Inspite of all efforts put in by the expected results in recovery during the year could not be achieved due to overall market recession, devaluation of rupee in world market substantially affecting the local & export market, demonetization as well as legal hassles faced by the Bank due to sympathetic approach of judiciary towards defaulters.

inVestMents :The Reserve Bank of India vide its Circular No. UBD.(PCB).MC.No.12/16.20.000/2010-11 dated 1st July, 2010 directed the Co-operative Banks to compulsorily invest in Government and approved securities to the extent of 25% of its NDTL. Bank has complied with the directive of Reserve Bank of India and invested in SLR Securities in GOI and other Government approved securities. Bank is maintaining its Demat Account with HDFC Bank Ltd. and SGL Account with ICICI Bank Ltd. All the transactions of sale and purchase are routed through SGL

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and Demat Account. Schedule annexed to Balance Sheet gives a detailed position of investment in various securities. The Reserve Bank of India vide its Circular No.UBD.BPD.(PCB)/Cir.No.68/ 16.20.000/2013-14 dated 5th June, 2014 revised the investment in liquidity ratio with effect from 15th July, 2014 whereby CRR is increased by 1% to 4% and SLR is reduced from 25% to 20.50% of NDTL, due to which substantial fund is available in market for lending and development. Further, the Bank has started Investment Trading during theyearwhichhaspaidfruitfulresultsassuchBankcouldearnprofitinInvestmentTradingtotheextentofRs.4.55crores during the year.

audit & insPeCtion : M/s Vindu & Associates, Chartered Accountant conducted the statutory audit of the Bank for the year ended 31stMarch,2017andtheBankcouldearn"A"classAuditCertificationfortheyear2016-2017.Inordertohavebetter check on the day to day functioning of the Bank, the different Chartered Accountants were appointed as Internal and Concurrent Auditors for every District i.e. M/s Yardi Prabhu & Associates, Chartered Accountants carriedoutConcurrentAuditofCentralOfficeBranch,KausaBranchandInternalAuditofallsixRatnagiriDistrictBranches whereas M/s Fakih & Co., Chartered Accountant, Mumbai carried out Concurrent Audit of remaining Branches of Mumbai and Thane District as well as Internal Audit for Raigad District Branches and whereas M/s Bhagawathi & Bhat Chartered Accountant, was appointed as Internal Auditor for Panjim (Goa) Branch.

r.t.G.s. & n.e.f.t. :In order to facilitate prompt and easy transfer of funds of the esteemed customers your Bank has made a tie up arrangement with Kotak Mahindra Bank for providing Host to Host RTGS and NEFT facility. All our customers areavailingthebenefitofthisfacilityforpromptandtimelyclearanceoffund.Your Bank is fully computerized, working on CBS and rendering hassle free Any Branch Banking Services its customers, Bank has also started SMS Alert facility for the account holders by which SMS alerts are sent for all transactions carried out in the accounts of the customers. The Board requests all the Members / Account Holders to register their mobile numbers in their respective deposit accounts in order to avail the SMS Alert Services made available by the Bank.Bank is planning to start internet facility to customers for viewing the statements of accounts, as early as possible.

ruPay deBit Card & Pos MaCHines :Keepingabreastwiththebankingbusinessrequirementandinordertofulfillpersistentdemandsfromtheesteemed customers and members your Bank launched RuPay Debit Card on 5th November, 2016. Our Customers could use the card at more than 1.45 lac ATMs across India and also make direct purchases from the point of sale (PoS) terminals in India under the RuPay platform, which will also give boost to increase Bank’s clientele.Further, in order to promote Government of India’s policy of “Cash Less Economy” and in order to facilitate our customers to enhance their business with Card based payments, Bank has introduced POS Machines which have added features of most of the Wallet supported as well as UPI, QR Code and Biometric enabled. These devices are available on reasonable outright and rental schemes.

CaPital to risk assets ratio (Crar) : Reserve Bank of India has made it mandatory to maintain Capital Adequacy norms even to Co-operative Banks. We are pleased to inform you that your Bank is adequately maintaining the CRAR (Capital to Risk Assets Ratio) which as on 31.3.2017 stood at 17.28% as against required rate of 9.00% as per Reserve Bank of India.

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HuMan resourCe & traininG to direCtors and staff :During the year the Bank had thrice arranged in-house training for the staff through School of Banking on topics related to implementation of C-KYC, E-KYC, Customer Service etc, at Mumbai and Chiplun for all the staffandofficersinordertoupgradetheirworkingskillandkeepthemabreastofthelatesttechnologiesandtrendsintheindustry.Further,Bankisalsoregularlydeputingstaffandofficerstovarioustrainingcentressuch as College of Agricultural Banking, Reserve Bank of India, Pune, Vaikunth Mehta National Institute of Co-operative Management etc. from time to time.The Bank also deputed some of the Directors during the year for training at Reserve Bank of India Training College, Pune, National Centre for Co-operative Education, New Delhi in order to update their knowledge.

industrial relations : TheBankexpresstheirgratitudetoloyalanddedicatedstaffmembersfortheirselflessservicesrenderedto the Customers, Depositors and Members. The Industrial relations during the year remained very cordial.

aCknoWledGeMents : It would be appropriate to thank those who contributed towards the achievements and progress of the Bank. At the outset, the Directors sincerely acknowledge the continued and ever-growing support and co-operation of the Bank’s share-holders, customers, constituents and well wishers. TheDirectorsare thankful toOfficersof theReserveBankof India,namely theExecutiveDirector,ChiefGeneralManagers,GeneralManagersandotherOfficersoftheUrbanBank'sSurveillanceDepartmentandExchange Control Department for their valuable guidance and co-operation at all times. The Board also notes with appreciation the continued co-operation from the Central Registrar for Multi State Co-operative Societies and Registrar, New Delhi, Commissioner for Co-operation, Pune, Government of Maharashtra. The Board acknowledges the valuable suggestions given by M/s Vindu & Associates, Statutory Auditor, Mumbai, during the course of their statutory audit of the Bank and thank them for the same. The Directors are also grateful to M/s Fakih & Co., M/s Yardi Prabhu & Associates and M/s Bhagawathi & Bhat, Chartered Accountants, who conducted the internal and concurrent audit at the Branches allotted to them.TheirtimelyguidanceandadviceshaveindeedhelpedtheBankinimprovingtheBank'sfunctioning.The Directors are thankful to all Legal/Labour Advisors and retainers of the Bank for rendering guidance and services in legal and labour matters. TheBoardalsoacknowledgesselflessservicesrenderedbyallourpanelDoctorsandAdvocates.TheBoardalsoacknowledges selfless serviceprovidedbySubCommitteesof theBank.Their valuablesuggestion helped the Board in routine business of the Bank to great extent.Lastly,theDirectorsacknowledgeandappreciatededicatedservicesrenderedbytheChiefExecutiveOfficer,Dy.GeneralManager,allExecutives,OfficersandStaffatalllevels.

For and on behalf of the Board of Directors

Mumbai NAJEEB S. MULLA 25th July, 2017 Chairman

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CaPital aCCount “a” 1,28,083,595.00 114,390,070.00

reserVe fund and otHer reserVes “B” 1,087,466,991.63 1,031,425,298.21

dePosits and otHer aCCounts “C” 5,660,818,337.91 5,069,849,669.11

BorroWinG --- ---

Bills for ColleCtion BeinG Bills 125,771.35 71,344.00 reCeiVaBle (as Per Contra)

BranCH adJustMents --- 24,938.00

oVerdue interest reserVe (Contra) 152,284,713.42 117,613,526.62

oVerdue interest reserVe (Pa) --- ---

interest PayaBle 8,077,033.00 9,931,722.00

otHer liaBilities “d” 173,137,105.29 134,801,064.76

deferred taX liaBility --- ---

Profit & loss aCCount “e” 47,581,183.46 16,312,979.42

notes on aCCounts “M”

ContinGent liaBilities

31.03.16 31.03.17

Bank Guarantees 8,21,25,947.90 7,63,65,670.90

BalanCe sHeet (as on 31st March 2017)

Audited & found correct subject to report

VINDU & ASSOCIATESChartered Accountants

CaPital and liaBilities schedule 2016-2017 2015-2016

rs. Ps. Rs. Ps.

total rs. 7,257,574,731.06 6,494,420,612.12

Mumbai 27th June, 2017

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BalanCe sHeet (as on 31st March 2017)

CasH “f” in Hand with rBi, sBi, Maharashtra state Co-op. Bank and district Central Co-op. Bank. 237,793,700.54 278,179,845.00 BalanCe WitH otHer Banks “G” 957,472,348.19 844,150,418.23 Money at Call and sHort notiCe 270,000,000.00 289,500,000.00 inVestMents “H” 1,678,526,817.00 1,349,935,400.00 adVanCes “i” 3,126,948,332.77 2,875,682,734.19

interest reCeiVaBle on loans (Pa) 25,227,486.00 on investments 81,854,640.11 on nPas (Contra) 152,284,713.42 259,366,839.53 213,219,380.73 Bills reCeiVaBle BeinG Bills for 125,771.35 71,344.00 ColleCtion (as per contra) BranCH adJustMent 434,276.50 --- fiXed assets “J” Gross Block 742,237,234.20 less : accumulated depriciation 222,893,808.55 519,343,425.65 527,870,583.62

otHer assets “k” 192,011,981.00 102,626,148.35 deferred taX asset 15,551,238.53 13,184.758.00

ProPerty and assets schedule 2016-2017 2015-2016

rs. Ps. Rs. Ps.

total rs. 7,257,574,731.06 6,494,420,612.12

CHAIRMANMr. Mulla najeeb suleman

VICE CHAIRMANMr. Murtuza Bashir amin

CHIEF ExECUTIVE OFFICERMr. khidir abubakar Husain

DGM (OPERATION)Mr. kondkari akbar yusuf

direCtorsMr. Parkar Mohammed abdul kadirMr. Mujawar Javid abdul rahimanMr. Juwle Gulammohiddin HajimiyaMr. dadan asif Gulam Mohd.Mr. dabir asgar MohammedMr. kazi altaf MohamedMr. edroos syed Zahid abdus sattaradv. kazi shakeel HashamMr. Mujawar dilip abdul rahiman

Mrs. kazi farida razzakCapt. sawant dost Mohammed HussainMrs. kazi tasneem Mohd. sharifMr. shaikh iqbal ahmedMr. kadlak Milind HiramanMr. Chougle nazimuddin saifuddinMr. roghay Mohamed naveed Mohamed ibrahimMr. Haindade Mohammed naeem M.s.

14

Profit and loss aCCount (for the year ended 31st March 2017)

to interest on deposits, Borrowings etc. 316,588,410.55 323,817,093.00 to salaries and allowances, Bonus & P.f. 143,013,299.60 156,282,819.95 to directors & local Committee Members 1,583,925.00 1,686,918.00 fees and allowances to rent, insurance, lighting & taxes 19,637,167.78 19,606,871.40 to law Charges 820,036.00 1,215,049.00 to Postage, telegrams & telephone Charges 6,501,314.94 4,522,940.66 to audit fees (internal & statutory) 3,012,678.50 2,806,635.50 to depreciation 9,381,543.18 10,469,012.09 to stationery, Printing & advertisement 7,102,537.75 2,862,473.49 to loss on sale of assets 72,020.41 305,309.82 to Premium on investment amortised 1,002,683.00 231,500.00 to election expenses 715,000.00 715,000.00 to Voluntary retirement scheme 1,102,135.00 --- to other expenses “l” 27,571,952.56 23,643,111.93 to Bad debts 543,873.30 461,691.40 to Provisions and Contingencies to Provision for Bad and doubtful debts 60,000,000.00 47,500,000.00 to Provision for leave encashment 12,500,000.00 9,500,000.00 to Provision for standard assets 5,000,000.00 --- to Provision fo Housing loan development 900,530.00 --- ToNetProfitBeforeTax 81,275,495.21 49,241,619.23 less: income tax 35,994,250.00 33,893,517.00 ToBalanceofProfit 45,281,245.21 15,348,102.23 (add) / less : deferred tax (2,366,480.53) (3,769,662.00) ToNetProfitafterTaxC/D 4,76,47,725.74 19,117,764.23

698,324,602.78 654,868,045.47

to Prior Period expense 80,928.25 64,911.00 to investment fluctuation reserve --- 30,00,000.00 ToNetProfitCarriedToBalanceSheet 47,566,797.49 16,052,853.23 notes on aCCounts forM Part of aCCounts “M”

eXPenditure schedule 2016-2017 2015-2016

rs. Ps. Rs. Ps.

total rs. 47,647,725.74 19,117,764.23

Audited & found correct subject to report

VINDU & ASSOCIATESChartered Accountants

Mumbai 27th June, 2017

15

Profit and loss aCCount (for the year ended 31st March 2017)

By interest on advances 393,644,442.02 388,633,192.18

By interest on investment 193,853,190.98 192,132,939.17

By Commission, exchange & Brokerage 14,611,654.48 16,004,841.99

By locker rent 44,300.00 43,598.00

By other receipts 311,752.00 321,587.22

ByProfitonSaleofAssets 77,993.00 15,056.16

ByProfitonSaleofInvestment 45,569,000.00 12,725,000.00

By Provision for Bddr written back 543,873.30 461,691.40

By interest on income tax refund --- 6,087,450.00

By excess Provision of income tax written back 3,004,247.00 3,442,589.35

By investment depreciation reserve Written back --- 35,000,000.00

By Gain on redemption of Vadora Halol Bonds 46,664,150.00 ---

698,324,602.78 654,868,045.47

ByNetProfitB/D. 47,647,725.74 19,117,764.23

By Prior Period Adjustment --- ---

inCoMe schedule 2016-2017 2015-2016

rs. Ps. Rs. Ps.

total rs. 47,647,725.74 19,117,764.23

CHAIRMANMr. Mulla najeeb suleman

VICE CHAIRMANMr. Murtuza Bashir amin

CHIEF ExECUTIVE OFFICERMr. khidir abubakar Husain

DGM (OPERATION)Mr. kondkari akbar yusuf

direCtorsMr. Parkar Mohammed abdul kadirMr. Mujawar Javid abdul rahimanMr. Juwle Gulammohiddin HajimiyaMr. dadan asif Gulam Mohd.Mr. dabir asgar MohammedMr. kazi altaf MohamedMr. edroos syed Zahid abdus sattaradv. kazi shakeel HashamMr. Mujawar dilip abdul rahiman

Mrs. kazi farida razzakCapt. sawant dost Mohammed HussainMrs. kazi tasneem Mohd. sharifMr. shaikh iqbal ahmedMr. kadlak Milind HiramanMr. Chougle nazimuddin saifuddinMr. roghay Mohamed naveed Mohamed ibrahimMr. Haindade Mohammed naeem M.s.

16

sCHedules to BalanCe sHeet

sCHedule - "a" CaPital 150,000,000.00 A) Authorised Capital 150,000,000.00 B) Subscribed & Paid up Capital: 165622 fully paid shares of Rs.10/- each held by 1,606,050.00 i) Individuals 1,599,200.00 57,020.00 ii) Others 57,020.00 1,656,220.00

5057095 fully paid shares of Rs.25/- each held by 93,387,500.00 i) Individuals 104,576,175.00 19,339,500.00 ii) Others 21,851,200.00 126,427,375.00 114,390,070.00 128,083,595.00 sCHedule - "B" reserVe fund & otHer reserVes

123,840,101.46 Statutory Reserves 131,194,939.26 261,167,081.14 Bad & Doubtful Debts Reserve 320,623,207.84 15,111,000.00 Contingent Provisions for Standard Assets 20,111,000.00 124,442,000.00 Building Fund 124,442,000.00 1,239,194.35 Dividend Equalization Fund 6,958,697.85 682,195.60 Staff Welfare Fund 30.00 1,975,000.00 Development Reserve 1,975,000.00 425,000.00 Charitable Fund 425,000.00 1,834,164.70 Members Welfare Fund 1,749,164.70 20,074,877.00 Contingency Fund 21,706,174.90 15,315,000.00 Investment Fluctuation Fund 15,315,000.00 40,463,225.00 Investments Depreciation Fund 33,981,725.00 400,483,149.00 Revaluation Reserve 383,711,212.12 21,338,997.08 General Reserve 21,338,997.08 3,034,312.88 Special Reserve 3,934,842.88 1,031,425,298.21 1,087,466,991.63 sCHedule - "C" dePosit and otHer aCCounts (sub schedule 1) 2,037,609,892.14 Savings Bank Deposits 2,596,791,553.70 462,814,768.12 Current Deposits 572,423,862.86 2,555,638,485.80 Term Deposits 2,481,059,489.30 13,786,523.05 Matured Term Deposits 10,543,432.05 5,069,849,669.11 5,660,818,337.91

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

17

sCHedules to BalanCe sHeet

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

sCHedule - "d"

otHer liaBilities

12,780,760.59 Payorders/DDs payable 17,053,252.48 3,023,574.05 Unpaid Dividends --- 30,197,819.57 Sundries (Sub Schedule 2) 33,177,239.26 83,762,725.55 Provision for Income Tax (Sub Schedule 3) 116,752,728.54 --- Liability for expenses 1,117,700.00 5,036,185.00 Other Provisions 5,036,185.00 134,801,064.76 173,137,105.29 134,801,064.76 173,137,105.29 sCHedule - "e"

Profit and loss aCCount

16,511,642.84 ProfitasperlastBalanceSheet 16,312,979.42 Less : Transferred to General Reserve & 0.00 Special Reserve -- 16,312,979.42 Less: Appropriations 4,127,910.00 Reserve Fund 4,078,244.75 8,807,326.65 Proposed Dividend 5,719,503.50 1,651,164.00 Reserve for Contingency Fund 1,631,297.90 165,116.00 Reserve for Education Fund 163,129.80 0.00 Building Fund --- 500,000.00 Member’s Welfare Fund --- 1,000,000.00 Staff Welfare Fund 500,000.00 0.00 Exgratia to Employees 4,206,417.50 26,126.19 BalanceofProfitCarrieddown 14,385.97 16,052,853.23 Add:NetProfitasperProfitandLossA/c. 47,566,797.49 16,312,979.42 47,581,183.46 sCHedule-"f" CasH 89,418,254.78 In Hand 130,825,634.66 130,825,634.66

Current deposits 75,633,736.38 With Reserve Bank of India 82,419,077.06 14,692,311.33 State Bank of India 13,475,022.26 3,401,054.45 District Central Cooperative Bank 2,073,966.56 38,625.06 Maharashtra State Co-Op. Bank 97,968,065.88

18

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

fixed deposits 94,995,863.00 FDR with State/ Dist. Central Co-Op. Banks 9,000,000.00 9,000,000.00 sCHedule-"G" BalanCe WitH otHer Banks Current accounts

nationalised Bank 13,437,104.93 Union Bank of India 3,184,751.85 119,956.00 Canara Bank 119,956.00 3,916,164.57 Bank of India 3,690,843.06 17,848.02 Dena Bank 12,974.22 99,424.85 Bank of Maharashtra 31,066.85 306,865.45 Bank of Baroda 306,865.45 7,346,457.43

Commercial Banks 18,901,647.62 Kotak Mahindra 31,797,408.76 15,193,487.47 ICICI Bank 7,522,422.12 49,817,825.65 IDBI Bank 105,713,142.18 458,226.11 HDFC Bank Ltd 1,071,329.56 1,046,397.45 ICICI Bank Cheque Facility 1,192,207.15 Yes Bank 2,180,628.25 809,222.22 Axis Bank Ltd 1,488,319.35 150,965,457.37 urban Co-operative Banks 963,954.89 Cosmos Bank 590,479.39 10,138.00 Goa State Co-Op. Bank Ltd. 590,479.39

105,098,263.23 158,902,394.19 fixed deposits nationalised Bank 165,553,040.00 Union Bank of India 165,711,391.00 103,872,996.00 Bank of Baroda - 165,711,391.00

Commercial Banks 180,596,881.00 IDBI Bank 179,883,217.00 DCB 53,008,393.00 11,644,690.00 Kotak Mahindra Bank 13,339,150.00 246,230,760.00 urban Co-op. Banks 115,000,000.00 Saraswat Co-Op. Bank Ltd 164,600,000.00 115,000,000.00 Punjab & Maharashtra Co-op Bank Ltd. 165,000,000.00 6,864,000.00 Cosmos Bank 7,027,803.00

sCHedules to BalanCe sHeet

19

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

30,520,548.00 Kalyan Janata Sahakari Bank Ltd. 30,000,000.00 SVC Bank Ltd. 20,000,000.00 10,000,000.00 Apna Sahakari Bank Ltd. 386,627,803.00

739,052,155.00 798,569,954.00

844,150,418.23 957,472,348.19 sCHedule-"H" inVestMents (sub schedule 4) 1,152,240,500.00 1) Central & State Govt. Securities 1,565,461,917.00 Face Value - Rs.118,00,00,000 /- (Rs. 123,00,00,000/-) Market Value--Rs.1,16,70,58,000/- (Rs.1,21,29,34,000/-) 2) Other Trustee Securities 2,000.00 3) Shares in Co-Op. Institution and Co.Op. 2,000.00 Housing Society. 197,692,900.00 4) PSU Bonds/ Bonds of all India Financial Institutions 113,062,900.00

1,349,935,400.00 1,678,526,817.00 sCHedule-"i" adVanCes i) Short Term Loan, Cash Credit, Overdraft and Bill Discounted of which secured against : 833,177,853.49 a) Government & Other approved securities 798,779,157.12 (Out of which overdue Rs. Nil) 61,216,292.00 b) Other Tangible Securities 62,679,130.00 (Out of which overdue Rs. Nil) 0.00 c) Personal Sureties - (Out of which overdue Rs. Nil) 484,945,050.57 d) Gold Ornaments 463,517,324.82 (Out of which overdue Rs. 26599168.00) 1,324,975,611.94 ii) Medium Term Loan of which Secured against : 1,865,608.00 a) Government & Other approved Securities 1,286,753.00 (Out of which overdue Rs. Nil) 1,200,442,322.31 b) Other Tangible Securities 1,482,341,405.95 (Out of which overdue Rs. 125917.12) 8,647,620.31 c) Personal Sureties 16341890.52 (Out of which overdue Rs. 1127116.00) 0.00 d) Gold Ornaments 0 (Out of which overdue Rs. Nil) 1,499,970,049.47

sCHedules to BalanCe sHeet

20

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017 285,387,987.51 iii) Long Term Loans of which secured agst. 302,002,671.36 Tangible Securities (Out of which overdue 163,819,886.00) 302,002,671.36 (Of the total advances, Rs. 31269.48 lacs considered Bad & Doubtful of recovery & fully provided for Rs.2659.64 lacs)

2,875,682,734.19 3,126,948,332.77 sCHedule-"J" 1. PreMises - Gross BloCk 260,074,100.13 Original Cost as per Last Year 550,587,867.77 408,868,517.50 Add : Premises Revalued 0.00 123,632,662.00 Less : Previous Revaluation reversed 5,277,912.14 Add : Additions during the year 7,364,749.00 Less : Deduction/Sold during the year

550,587,867.77 suB-total (a) 557,952,616.77

42,394,490.13 Accumulated Deprn. Upto Last Year 53,670,292.70 2,890,434.07 Add : Depreciation during the year 3,481,855.70 8,385,368.50 Add : Amortisation on revalued amount 16,771,936.88 Add : Amortisation on revalued amount of Sold Premises

53,670,292.70 suB-total (B) 73,924,085.28

496,917,575.07 total (a-B) 484,028,531.49

2. furniture & fiXtures 73,631,090.14 Original Cost as per Last Year 76,299,301.07 2,780,397.41 Add : Additions during the year 3,837,033.50 112,186.48 Less : Deduction/Sold during the year

76,299,301.07 SUB-TOTAL (A) 80,136,334.57

56,854,006.14 Accumulated Deprn. Upto Last Year 58,607,908.78 1,812,429.71 Add : Depreciation during the year 1,983,833.96 58,527.07 Less : Depreciation on sale during the year

58,607,908.78 suB-total (B) 60,591,742.74

17,691,392.29 total (a-B) 19,544,591.83

sCHedules to BalanCe sHeet

21

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

3. VeHiCles

8,758,573.00 Original Cost as per Last Year 8,078,203.00 717,436.00 Add: Additions during the year 582,633.00 1,397,806.00 Less: Deduction/Sold during the year 1,364,639.00

8,078,203.00 suB-total (a) 7,296,197.00

7,116,292.00 Accumulated Deprn. Upto Last Year 6,771,512.67 169,710.97 Add : Depreciation during the year 232,302.70 514,490.30 Less : Depreciation on sale during the year 1,167,889.49

6,771,512.67 suB-total (B) 5,835,925.88

1,306,690.33 total (a-B) 1,460,271.12 4. CoMPuter HardWare & softWare 72,706,467.71 Original Cost as per Last Year 73,891,844.15 2,145,926.44 Add : Additions during the year 3,690,480.00 960,550.00 Less : Deduction/Sold during the year 1,332,850.31

73,891,844.15 suB-total (a) 76,249,473.84

67,996,048.71 Accumulated Deprn. Upto Last Year 71,184,989.96 4,124,873.11 Add: Depreciation during the year 2,057,177.93 935,931.86 Less: Depreciation on sale during the year 1,332,848.31

71,184,989.96 suB-total (B) 71,909,319.58

2,706,854.19 total (a-B) 4,340,154.26 5. Plant & MaCHinery 15,381,926.38 Original Cost as per Last Year 17,692,418.51 2,883,498.05 Add : Additions during the year 2,377,349.00 573,005.92 Less : Deduction/Sold during the year 45,726.94

17,692,418.51 suB-total (a) 20,024,040.57

7,523,227.38 Accumulated Deprn. Upto Last Year 8,639,758.63 1,386,004.23 Add: Depreciation during the year 1,569,887.88 269472.98 Less : Depr on sale during the year 17,928.08

8,639,758.63 suB-total (B) 10,191,718.33

9,052,659.88 total (a-B) 9,832,322.24 6. CiVil Work 578,571.45 Original Cost as per Last Year 578,571.45 0.00 Add: Additions during the year 0.00

sCHedules to BalanCe sHeet

22

sCHedules to BalanCe sHeet

0.00 Less: Deduction/Sold during the year 0.00

578,571.45 suB-total (a) 578,571.45

325,302.45 Accumulated Deprn. Upto Last Year 383,159.59 57,857.14 Add: Depreciation during the year 57,857.15 0.00 Less: Depreciation on sale during the year 0.00

383,159.59 suB-total (B) 441,016.74

195,411.86 total (a-B) 137,554.71

527,870,583.62 total fiXed assets (1+2+3+4+5+6+7+8+9+10) 519,343,425.64 sCHedule "k" otHer assets 21,155,925.74 Miscellaneous Assets (sub schedule 5) 20,018,696.68 5,790,178.54 TDS Paid (sub schedule 6) 15,385,099.54 68,486,420.00 Advance Tax (sub schedule 7) 127,036,420.00 99,386.00 Advance towards Computer 1,064,889.00 2,620,000.00 Deposit on Rental Premises 1,905,000.00 1,419,691.00 Deposits with BEST, BMC etc. 1,326,075.89 1,624,547.07 Stock of Printing & Stationery 1,617,599.89 0.00 Non Banking Asset 18,583,200.00 1,430,000.00 Defered Revenue expenses 5,075,000.00

102,626,148.35 192,011,981.00

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

23

sCHedule- “l” otHer eXPenditure 1,155,367.41 Bank Charges 1,370,658.04 555,930.00 Conveyance charges 605,849.00 4,103,184.29 Maintenance Charges 3,843,153.34 1,308,107.88 Miscellanous Expenses 1,736,781.09 4,356,381.00 Security Charges 5,060,460.85 162,401.00 Subscription 217,704.00 402,074.00 Expansion and Development Expenses 3,015,506.45 119,206.00 Training Expenses 333,897.00 256,308.00 Water Charges 215,326.00 424,651.00 Meeting Expenses 385,186.00 661,270.00 Vehicle Maintenance Expenses 596,489.00 2,260,327.70 Computer Software 2,327,249.50 1,281,732.20 Professional and Consultancy Charges 947,564.00 575,950.00 Meeting Allowance 637,700.00 869,792.00 Commission on A.C.Agent --- 3,361,692.45 Computer Maintenance 4,208,094.09 84,498.00 Staff Welfare Expenses 1,334,197.20 81,739.00 Travelling Charges 27,738.00 33,660.00 Transportation Charges 96,770.00 11,491.00 R.T.O.Charges 12,688.00 1,575,449.00 Annual General Meeting Expenses 495,936.00 Establishment Expenses 103,005.00 1,900.00 Sports Expenses --- 27,571,952.56

19,361,680.16 27,571,952.56

as at 31st PartiCulars as at 31st

MarCH 2016 MarCH 2017

sCHedules to Profit and loss aCCount

24

suB sCHedules to sCHedule

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

suB sCHedule 1 dePosit and otHer aCCounts (sub-schedule to schedule-"C) savings Bank deposits 2,026,208,943.68 Savings Bank Accounts 2,577,868,733.35 Easy Saving 2,819,189.10 Kokan Junior saving deposit 4,236,238.04 11,400,948.46 Non-Res. (Ext) Saving 11,867,393.21 2,596,791,553.70

2,037,609,892.14 462,814,768.12 Current accounts 572,423,862.86 572,423,862.86 term deposits 511,292,553.55 Fixed 513,853,727.05 1,563,997,687.40 Fixed -cum-Recurring 1,492,252,338.40 40,264,167.00 Recurring 43,008,830.00 261,799,637.00 Monthly Interest Deposit Receipt 278,474,769.00 56,826,426.85 Multiple 60,874,028.85 34,940,980.00 Non.Res (External) Term 31,914,041.00 12,960,047.00 K.B.D.D.C. 305,137.00 31,739,087.00 Lak. Dep. Scheme 36,059,418.00 31,282,400.00 Kokan Bank Monthly Scheme 11,417,700.00 10,535,500.00 FD Earmarked For SDV 12,899,500.00 2,481,059,489.30

2,555,638,485.80 13,786,523.05 Matured term deposits 10,543,432.05 10,543,432.05

13,786,523.05

5,069,849,669.11 5,660,818,337.91 suB sCHedule 2 sundries (sub-schedule to schedue-"d")

3,174,948.50 UnidentifiedDeposits 3,432,889.59 2,883,335.50 Liabilities for Expenses 3,257,326.80 7,023,517.78 Other Creditors 8,915,292.14 382,581.15 Security Deposits of Employees 372,142.95 14,493.00 Clearing Difference Payable - 12,496.00 Safe Locker Deposits - 12,500.00 Cheque Awaiting for Clearance 1,102,500.00 160,871.39 Authorised Collection Agent Fund 101,062.39 6,406,020.00 Sundry Creditors--TDS 2,542,268.00 627,056.25 Excess Cash 844,756.25 DEAF Receivable 109,001.14

25

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

suB sCHedules to sCHedule

9,500,000.00 Provision for Leave Encashment 12,500,000.00

33,177,239.26

30,197,819.57 33,177,239.26 suB sCHedule 3 ProVision for inCoMe taX

17,744,998.55 Provision for Income Tax (A.Y.2010-11) 17,744,998.55 26,600,000.00 Provision for Income Tax (A.Y.2013-14) 26,600,000.00 5,524,210.00 Provision for Income Tax (A.Y.2015-16) 5,524,210.00 33893517 Provision for Income Tax (A.Y.2016-17) 30,889,270.00 Provision for Income Tax (A.Y.2017-18) 35,994,250.00 116,752,728.54

83,762,725.55 116,752,728.54 suB sCHedule 4 inVestMents (sub-schedule to schedule-"f")

1,152,240,500.00 State and Central Govt. Securities 1,565,461,917.00 1,565,461,917.00 Shares in Co-Op. Institutions and Hsg.Societies 1,000.00 Shares of Harbour Crest CHS 1,000.00 1,000.00 Shares of MDCC 1,000.00 2,000.00 PSU Bonds/ Bonds of all India Financial Institutions 22,872,400.00 1) Zero% ICICI Bonds 22,872,400.00 30,784,000.00 2) Zero % MSRDC Bonds 2019 30,784,000.00 41,148,500.00 3) Zero % Vadodara Halol Bond 2016 - 19,575,000.00 4) Zero% PIDB 2023 19,575,000.00 19,881,500.00 5) 8.75% IRFC 2026 19,881,500.00 19,881,500.00 6) 8.78% PFC 2016 - 23,600,000.00 7) 9.25 % HDFC 2016 - 19,950,000.00 8) Zero% IDFC 2026 19,950,000.00 113,062,900.00

197,692,900.00 1,349,935,400.00 1,678,526,817.00 suB sCHedule 5 otHer assets (sub-schedule to schedule-i) Miscellaneous Assets 1,890,049.74 Prepaid Expenses 1,682,444.18 4,994,299.00 Suspense 4,994,299.00 17.00 Clearing Suspense (Receivables) 4,500.00 6,681,243.18

26

Stock of Stamps 24,665.00 i) Adhesive 32,286.00 3,378.00 ii) Postal 2,895.50 35,181.50

40,768.00 Stock of Pancard Coupons 36,064.00 36,064.00 6,605.00 Security Item - 6,197,500.00 Advance payment to Gratuity Trust 6,197,500.00 46,860.00 Margin money with Saraswat Bank Ltd. 46,860.00

advances 1,725,490.00 Employees Festival Advance 863,960.00 4,563,294.00 Advance towards Mandvi Branch for Renovation 1,603,000.00 Advance towards Staff Mediclaim 2,287,400.00 60,000.00 For Petty Cash 195,674.00 - Advance towards POS Machine 174,814.00 - Advance towards Branches 3,500,000.00

21,155,925.74 20,018,696.68 suB sCHedule 6 otHer assets (sub-schedule to schedule-i) TDS PAID 1,910,959.230 TDS Paid (A.Y. 2010-11) 1,910,959.23 203,997.940 TDS Paid (A.Y. 2013-14) 203,997.94 2,809,493.000 TDS Paid (A.Y. 2014-15) 2,809,493.00 415,974.000 TDS Paid (A.Y. 2015-16) 415,974.00 449,754.370 TDS Paid (A.Y. 2016-17) 449,754.37 TDS Paid (A.Y. 2017-18) 9,594,921.00 5,790,178.54 15,385,099.54 suB sCHedule 7 otHer assets (sub-schedule to schedule-i) advance tax 15,797,360.00 Advance Tax (A.Y. 2010-11) 15,797,360.00 24,689,060.00 Advance Tax (A.Y. 2013-14) 18,500,000.00 14,000,000.00 Advance Tax (A.Y. 2014-15) 14,000,000.00 12,000,000.00 Advance Tax (A.Y. 2015-16) 12,000,000.00 2,000,000.00 Advance Tax (A.Y. 2016-17) 41,739,060.00 - Advance Tax (A.Y. 2017-18) 25,000,000.00 68,486,420.00 1,27,036,420.00

suB sCHedules to sCHedule

as at 31st PartiCulars as at 31st

MarCH, 2016 MarCH, 2017

27

sCHedule - “M”

notes forMinG Part of tHe Profit and loss aCCount for tHe year ended 31st MarCH, 2017 and BalanCe sHeet as on tHat date.

i. 1) oVerVieW The Kokan Mercantile Co-op. Bank Ltd. (Kokan Bank) was incorporated in 1969 and has completed its 48 years ofprovisionofwiderangeofbankingandfinancialservicesincludingcommercialbankingandtreasuryoperations.

2) Basis of PreParation Thefinancialstatementshavebeenpreparedandpresentedunderthehistoricalcostconventionontheaccrual basis of accounting, unless otherwise stated, and comply with generally accepted accounting principles, statutory requirements prescribed under the Banking Regulation Act 1949, and the Multi State Co-operative Societies Act, 2002, circulars and guidelines issued by the Reserve Bank of India (‘RBI’) from time to time, the Accounting Standards (‘AS’) issued by the Institute of Chartered Accountants of India (‘ICAI’) and current practices prevailing within the banking industry of India.

3) use of estiMates Thepreparationofthefinancialstatements,inconformitywithgenerallyacceptedaccountingprinciples,requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenuesandexpensesanddisclosureofcontingentliabilitiesatthedateofthefinancialstatements.Actual results could differ from those estimates. Management believes that the estimates used in the preparation of the financialstatementsareprudentandreasonable.Anyrevisionstotheaccountingestimatesarerecognized prospectively.

ii. siGnifiCant aCCountinG PoliCies:

1) accounting Convention Thefinancialstatementsaredrawnupkeepinginmindthehistoricalcostandgoingconcernconceptandin accordance with generally accepted accounting principles and practices prevailing in the Co-Operative Banks in India except otherwise stated.

2) revenue recognition Income and Expenditure are accounted on accrual basis except as stated below:

i) InterestonAdvancesclassifiedasSub-Standard,DoubtfulorLossAssetsisrecognisedonrealisation. The unrealised interest in these cases is accounted in Overdue Interest Reserve.

ii) Interest on Fixed Income Securities is recognised on accrual basis in case it is serviced regularly. Dividend Income is accounted on declaration of dividend.

iii) Leave encashment and Annual Maintenance Contract Fees are accounted on cash basis.

iv) Expenses of capital nature and otherwise like software, election expenses and Voluntary Retirement Scheme (VRS) expenditure etc., are treated as Deferred Revenue Expenditure and are written off as under:

Software 3 years

Election Expenses 5 years

VRS 5 years

28

v) Ex-gratiapayabletoemployeesisnotchargedtoProfit&LossA/c.butappropriatedfromtheProfit&Loss A/c. after mandatory appropriation and dividend as per the provisions of Multi State Co-operative Societies Act, 2002.

3) advances a) AdvancesareclassifiedintoStandard,Sub-Standard,DoubtfulandLossAssetsinaccordancewiththe guidelines issued by the Reserve Bank of India from time to time.

b) Provision on Advances categorized under Sub-Standard, Doubtful and Loss Assets is made in accordance with the guidelines issued by the Reserve Bank of India. In addition, a general provision on Standard Assets is made as per RBI guidelines.

c) TheoverdueinterestinrespectofadvancesclassifiedasNon-PerformingAssetsisprovidedseparately under “Overdue Interest Reserve” as per the directives issued by the RBI.

4) investments i) TheentireInvestmentsportfoliooftheBank(includingSLRandNon-SLRInvestments)havebeenclassified into (a) Held to Maturity (b) Available for Sale and (c) Held for Trading in terms of guidelines of RBI. ii) Investmentshavebeenclassifiedunder4groupsasrequiredunderRBIguidelines–Governmentsecurities, Other Trustee Securities, Shares in Co-op. Institutions & Co-op. Housing Societies and PSU Bonds & Bonds of All India Financial Institutions for the purpose of disclosure in the Balance Sheet. iii) Investments earmarked against Statutory Reserve Fund and Other Funds and Investments under HTM category are treated as Permanent Investments and carried at cost. Other investments are treated as Current Investments as required by AS 13 of Institute of Chartered Accountants of India. iv) InvestmentsclassifiedunderHeldtoMaturitycategoryhavebeencarriedatacquisitioncost.Non-performing securities are fully provided for. In the case of securities under Held to Maturity Category wherein the acquisition cost is more than the face value, the premium amount is amortised over the remaining period of maturity. v) Securities under Available for Sale / Held for Trading category are marked to market. Securities are valued scrip-wise and aggregated category-wise. Depreciation / appreciation under each category are netted and the net depreciation is provided for. Net appreciation is ignored. vi) Market value in the case of State Govt. and other Securities, for which quotes are not available is determined on the basis of the “Yield to Maturity” indicated by Primary Dealers Association of India (PDAI) jointly with Fixed Income and Money Market Derivatives Association of India (FIMMDA). vii) Cost of Brokerage, Fees, Commission and broken period interest at the time of acquisition of securities are recognised as revenue expenses.

5) fixed assets and depreciation i) Allthefixedassetsarestatedattheirhistoricalcostinclusiveofincidentalexpensesincurredonacquisition. ii) Depreciationisprovidedonwrittendownvalueonallthefixedassetsexceptcomputersandpremises. Depreciation on computers is calculated under Straight Line Method. iii) Depreciation on premises is calculated on the basis of rate determined with reference to residual life of each item of premises. iv) Fixed assets are depreciated at the rates as determined by the management except depreciation on computers which is charged @ 33 1/3% as per RBI guidelines, which is as under:

Furniture & Fixtures 10%Vehicles 15%Computers 33 1/3%Plant and Machinety 15%Civil Work 10%

29

v) Depreciation on assets purchased are charged on Pro-rata basis to the extent of asset put to use.

vi) Profit/Lossonsaleordisposalofassetisrecognizedintheyearinwhichsuchsaleordisposaltakes place.

vi) The surplus arising out of revaluation of premises carried out has been credited to the Revaluation Reserve Account in the Balance Sheet. This reserve will be used to amortise the surplus over the remaining useful life of the premises.

6) StaffRetirementBenefits i) Provision for gratuity is made on actuarial basis.

ii) Bank’s contribution to Provident Fund is accounted for on the basis of contribution to the scheme.

iii) Leave encashment is accounted on cash basis.

7) segment reporting In accordance with the guidelines issued by RBI, Segment Reporting is made as under :

l Treasuryincludesallinvestmentportfolio,profit/lossonsaleofinvestments,profit/lossonforeignexchange transactions, equities and money market operations. The expenses of this segment consist of interest expenses on funds borrowed from external sources as well as interal sources and depreciation / amortization of premium on Held to Maturity category investments.

l Other Banking Operations include all other operations not covered under Treasury operations.

8) taxation a) Taxexpensecomprisesbothdeferredandcurrent taxes.Deferred income taxes reflect the impactof current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

b) Deferred tax is measured based on tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.

c) Deferredtaxassetsarerecognizedonlytotheextentthatthereisreasonablecertaintythatsufficientfuture taxable income will be available against which such deferred tax assets can be realized.

9) Provisions contingent liabilities and contingent assets A provision is recognized when the Bank has a present obligation as a result of past event where it is probable thatanoutflowofresourceswillberequiredtosettletheobligation,inrespectofwhichareliableestimatecanbe made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflectthecurrentbestestimates.

A disclosure of contingent liability is made when there is:

i) Apossibleobligationarisingfromapastevent,theexistenceofwhichwillbeconfirmedbyoccurrenceor non occurrence of one or more uncertain future events not within the control of the Bank; or

ii) Apresentobligationarisingfromapasteventwhichisnotrecognizedasitisnotprobablethatanoutflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Whenthereisapossibleorapresentobligationinrespectofwhichthelikelihoodofoutflowofresourcesis remote, no provision or disclosure is made.

Contingentassetsarenotrecognizedinthefinancialstatements.However,contingentassetsareassessed continually.

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iii. notes on aCCounts

1) TheBankhaswrittenoffanamountofRs.5.44lakhs(Rs.4.62lakhs)towardsbaddebtsandwhichisidentified bytheManagementasirrecoverable,approvedbytheBoardofDirectorsandcertifiedbytheStatutoryAuditors. The same is adjusted against Bad and Doubtful Debts Reserves. This amount had been fully provided for in the earlier years.

2) The bank has received redemption of Rs. 7,99,06,885.00 (inclusive of principal of Rs. 87,55,000.00 and interest of Rs. 7,11,51,885.00) towards 0% Vadodara Halol Bonds during the year. Since bonds are capital assets, thegainonredemptionofthebondsofRs.4,66,64,150.00iscreditedtoprofitandlossA/cunderthehead "GainonredemptionofVadodaraHalolBonds".

3) Bank'sIncomeTaxAssesmentforA.Y.2013-14isfinalised.TheIncomeTaxdepartmenthasraisedademand ofRs.52,080.00.Beingaggrievedbythedemand,thebankhasfiledanappealagainstthedemand.However there is a contingent liability of Rs. 52,080.00 on the bank.

4) Bank'sIncomeTaxAssessmentforA.T.2014-15isfinalised.TheIncomeTaxdepartmenthasraisedademand ofRs.1,36,24,590.00.Beingaggreivedby thedemand, thebankhasfiledanappealagainst thedemand. However, there is a contingent liability of Rs. 1,36,24,590.00 on the bank.

5) The Bank has not restructured any loans during the year. As such, disclosure of restructure loans as required by RBI guidelines is not given.

6) Other Receipts include miscellaneous earnings of Rs. 1,40,292.47, Legal Notice fees of Rs. 16,58,529.00 and reminder charges if Rs. 12.00

7) as – 5 – Prior Period expenses

Prior period expenses of Rs. 80,928.00 pertain to Leased line charges of Rs. 57,536 for the FY 2015-16 and Rs. 23,392 relating to other expenses for FY 2015-16.

8) as – 6 and as – 10 – fixed asset and depreciation

a) TheBankhasdisclosedthefixedassetsanddepreciationintheBalanceSheetinaccordancewithAS-6and AS-10 issued by ICAI and updated its Fixed Asset. Registered in compliance with said accounting standards.

b) The bank has amortised Rs. 1,67,71,936.88 (Rs. 8385368.50) from Revaluation Reserve during the year and an equivalent amount is credited to premises A/c.

9) AS-15–RetirementBenefits

a) The accounting of leave encashment on cash basis is not in accordance with the Accounting Standard 15 (AS-15)regardingRetirementBenefitsandAccountingStandard9(AS-9)regardingRevenueRecognition issued by the Institute of Chartered Accountants of India (ICAI). However, the bank has made adhoc provision of Rs. 125 lacs towards leave encashment during the year. Since the amount payable to employees on account of leave encashment on actuarial basis is not made available, the effect of the same ontheprofitoftheBankisnotquantifiable.

b) SincetheBankhaspaidfundsto"KokanBankStaffGratuityFund"inexcessofitsactualliability,theBank has not paid any sum to the said fund during the year. Advance payment of Rs. 61,97,500 made to the fundhasbeenparkedas"AdvancepaymenttoGratuityTrust"underthehead"OtherAssets".Sincethe present value obligations are less than fair value of Plan Assets in respect of Gratuity, the Bank has no liability towards Gratuity for the year and hence Bank has not provided any liability towards Gratuity.

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c) The details as required by Accounting Standard 15 (Revised) pertaining to Gratuity is as under:(Rs. In lacs)

sr. Particulars Gratuity (funded) no. 31.03.2017 1 Discount rate 6.90% p.a.

2 Expected Return on plan assets 8.00% p.a.

3 Salary escalation rate 7.41 %

4 reconciliation of opening and closing balance of the present value ofthedefinedbenefitobligation: i Present value of obligation as at 01-04-2017 1313.87

ii Interest cost 95.93

iii Current service cost 30.82

Past Service Cost -

iv Benefitspaid (93.17)

v Actuarial gains / (loss) on obligations (39.08)

vi Present value of obligation as at 31-03-2017 1308.37

5 reconciliation of opening & closing balance of fair value of fair plan assets: i Fair value of plan assets as at 01-04-2016 1358.75

ii. Adjustment to Opening Balance -

iii Expected return on plan assets 104.97

iv Contributions -

v Transfer from other entities -

vi Benefitspaid (93.17)

vii Actuarial gain / (loss) on plan assets 8.14

viii Fair value of plan assets as at 31-03-2016 1378.69

6 amount recognized in Balance sheet i Present value of obligations as at 31-03-2017 1308.37

ii Fair value of Plan Assets as at 31-03-2017 1378.70

iii. Funded Status 70.33

iv Net Assets / liability as at 31-03-2016 70.33

7 ExpensesrecognizedinProfit&LossAccount i Current service cost 30.82

ii Interest cost 95.93

iii. Past Interest cost -

iv Expected return on Plan Assets (104.97)

v. Net actuarial gain / (loss) (47.22)

vi. ExpensesrecognizedinProfit&LossAccount (25.44)

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10) Primary segment reporting (By Business segments) accounting standard 17 (as 17)

Particulars treasury other Banking total operations 31st March 2017 revenue 2394.22 4558.99 6953.21 (2048.58) (4115.67) (6164.25) Segment Cost 1227.15 4159.34 5386.49 (1433.96) (4045.15) (5479.11) Result 1167.07 399.65 1566.72 (614.62) (70.52) (685.14) Add: Extraordinary Items 0.00 (0.00) Net Result 1566.72 (685.14) Less: Unallocated Provisions and Contingencies 784.02 (577.15) Add: Reserves & Funds written back 30.04 (384.43) ProfitBeforeTax 812.76 (492.42) Income Tax/ Deferred Tax Asset 336.28 (301.24) NetProfitAfterTax 476.48 (191.18) Prior Period Adjustment / IFR (0.81) (30.65) NetProfitTrfd.ToBalanceSheet 475.67 (160.53) otHer inforMation Segment Assets 25679.52 45130.68 70810.20 (22561.99) (41507.61) (64069.60) Unallocated Assets 1765.55 (874.61) total assets 72575.75 (64944.21) Segment Liabilities 492.97 58576.13 59069.10 (557.78) (52370.88) (52928.66) Unallocated Liabilities 13506.65 (12015.55) total liabilities 72575.75 (64944.21)

33

i) The Bank is catering mainly to the needs of Indian customers, operates as a single unit in India, hence separate information regarding geographical segment is not given.

ii) Businesssegmentsareclassifiedasunder-

a) Treasury : Dealing operations in Money Market Instruments, Trading / Investment in Bonds / Government Securities.

b) OtherBankingOperations:Localfinance/services.

iii) The above segments are reported based on the nature of products / services and their attributable risks/returns, overall organizational structure and the internal management reporting system of the Bank.

11) as-18 – related Parties and disclosure

The Bank is a Co-operative Society under the Multi State Co-operative Societies Act, 2002 and there are no Related Parties requiring disclosure under Accounting Standard 18 issued by I.C.A.I., other than Key Management Personnel i.e.Mr.A.H.Khidir,theChiefExecutiveOfficeroftheBank.However,intermsoftheReserveBankofIndiaCircular dated 29.03.2003, he being a single party covered by this category, no further details thereon need to be disclosed.

12) as-21 – Consolidated financial statements

Since Bank does not have any Subsidiary Companies / Co-Operative Societies, the Accounting Standard 21 (AS-21)regardingconsolidatedfinancialstatementsisnotapplicabletotheBank.

13) as-22- deferred tax

ThemajorcomponentsofDeferredTaxAssets(net)arisingonaccountoftimingdifferencesbetweenbookprofit andtaxableprofitsasat31st March, 2017 are as follows:

(rs. in lacs)

Particulars Balance as on for the Balance as on 31.03.2016 year 31.03.17

deferred tax asset

Depreciation on Investments (105.33) - (105.33)

Premium on Investment 173.41 (173.41) -

Bad & Doubtful Debts Reserve 402.35 182.53 584.88

Leave Encashment 22.76 10.28 33.04

total (a) 493.19 19.40 512.59

deferred tax liability

Depreciation on Fixed Assets (271.89) 4.27 (267.62)

Provision for Gratuity (89.45) - (89.45)

total (B) (361.34) 4.27 (357.07)

net deferred tax asset (liability) (a-B) 131.85 23.67 155.52

TheapplicationofDeferredTaxhasresultedinanetcreditofRs.23.67lacstotheProfitandLossAccountfor the year ended March, 2017. The closing Deferred Tax Asset (net) of Rs. 155.52 lacs has been shown separately in the Balance Sheet.

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14) as-26 - details of expenditure on Computer software

Details of Computer Software in accordance with Accounting Standard 26 on Intangible Assets issued by ICAI are as under:

Particulars amount (rs. in lacs)

31.03.2016 31.03.2017

Carrying amount at the beginning of the year 15.38 0.85

Add: Additions during the year 0.56 -

15.94 0.85

Less: Amortisation during the year 15.09 0.58

Carrying amount at the end of the year 0.85 0.27

15) as-28 – impairment of asset

The Bank has ascertained that there is no material impairment of any of its assets and as such no provision under Accounting Standard 28 issued by the ICAI is required.

16) TheBankhasacquiredpremisesheldatGhatkoparfromtheborrowerinCentralOfficebranchinsatisfaction ofclaimstowards itsduesatatotalvalueofRs.185.83lakhsandthesameisdisclosedas"Non-Banking Assets"underthehead"OtherAssets".

17) The Bank introduced a Voluntary Retirement Scheme (VRS) for its staff members during the year. The Bank has accepted the applications for VRS from 10 employees with total consideration of Rs. 54.62 lakhs. The VRS expenditureistreatedasDeferredRevenueExpenditureandthesameisdebitedtoProfit&LossAccountby amortising@20%p.a.amountingtiRs.11.02lakhsinaccordancewiththeBank'sAccountingPolicy.Unamortised VRSexpenditureofRs.43.60lakhsisappearingunderthehead"DeferredRevenueExpenditure".

18) as-29 –Contingent liabilities

Bank Guarantees:

31.03.2016 (rs.) Particulars 31.03.2017 (rs.)

8,21,25,947.90 Bank Guarantees 7,63,65,670.90

19) Contingent liabilities – others

In terms of DBOD Circular No. DEAF Cell.BC.114/30.01.002/2013-14 dated May 27, 2014, the Bank has transferred credit balances amounting to Rs.5.67 lakhs (mentioned in sub-clause i) to viii) in Clause 3 of DEAF Scheme 2014) maintained with the Bank which have not been in operation for 10 years or more. The required disclosure as per the said circular is as under:

(Rs. in lakhs)

Particulars 31.03.2016 31.03.2017

Opening balance of amounts transferred to DEAF 13.56 20.34

Add: Amounts transferred to DEAF during the year 6.78 5.67

Less: Amounts reimbursed by DEAF towards claims 0.00 0.00

Closing balance of amounts transferred to DEAF 20.34 26.01

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The Bank has not paid any amount to the customers / depositors towards the said deposits which have remained unclaimed for 10 years or more as no claim was lodged with the bank during the year.

20) Previousyear’sfigureshavebeenregrouped/rearrangedwherevernecessarytoconformtothelayoutofthe accounts of the current year.

iV. disclosure as per rBi Circular no. uBd Co BPd(PCB) Cir. no. 52/12.05.001/2013-14 dated 25.03.2014 :(rs. in lacs)

sr no. Particulars 31.03.2016 31.03.2017 1) Capital to Risk Asset Ratio (CRAR) 16.20 17.28 2) Movement of CRAR (Basis Point) 2.71 1.08 Risk Weighted assets 36,468.33 35, 456.99 3) Values of Investments are as under: Government / approved securities-(slr) Book Value 11,522.40 15,654.62 Face Value 11,800.00 15,700.00 Market Value 11,670.58 15,709.43 fixed deposits with state, district, Central Co operative Banks and other banks 8,340.48 8,070.11 Bonds of Public sector undertakings 1,976.93 1,130.63 shares in Co-operative institutions 0.02 0.02 total 45,310.41 56,264.81

* Composition of non slr investments as on 31st March 2017

sr. issuer amount extent of ‘below extent of extent of no. investment grade’ ‘unrated ‘unlisted’ securities securities’ securities

1 PSUs 307.84 Nil Nil 307.84

2 FIs 398.32 Nil Nil 398.32

3 Public, Private Banks & Co-op bank 424.47 Nil Nil 424.47

4 Others (shares in co-op institutes) 0.00 Nil Nil 0.00

total 1130.63 1130.63

5 Provision held towards depreciation 339.82 Nil Nil 339.82

total 339.82 nil nil 339.82

There were no Repo / Reverse Repo Transactions during the year.

36

✷ non-Performing non-slr investment (rs. in lakhs)

Particulars 31.03.2016 31.03.2017 amount amount

Opening Balance nil nil

Additions during the year since 1st April nil nil

Reductions during the above period nil nil

Closing Balance * nil nil

total provisions held nil nil

sr no. Particulars 31.03.2016 31.03.2017 fund based & non-fund based 4) advances against real estate, Construction Business, Housing Construction Business & Real Estate 6710.73 6367.97 Housing 2031.13 1897.70 5) advances against shares & debentures 0.00 0.00 6) Advance to Directors, their relatives and Companies / Firms in which they are interested 0.00 0.00 7) Cost of deposits Average cost of deposits 6.39 6.17 8) nPas a) Gross nPas 4659.28 3286.11 b) net nPas 2047.61 79.88 c) Provision required - Bddr 2226.88 2018.46 d) Provision available - Bddr 2611.67 3206.23 9) Movement in nPa Opening Balance 4341.66 4659.29 Add: Additions during the year 1708.92 626.26 Less: Closed / Recovered / Written Off 1391.29 1999.43 Closing Balance 4659.29 3286.12 10) Profitability a) Interest income as a percentage of working funds 9.11 8.27 b) Non-interest income as a percentage of working funds 0.55 1.51 c) Operatingprofitasapercentageofworkingfunds 0.98 2.20 d) ReturnonAssets(NetProfit/Averageofworkingfunds)% 0.25 0.74 e) Business (Deposits + Advances) per employee 297.59 355.78 f) Profitperemployee 0.60 1.93 11) Provisions made towards nPas, depreciation on investments and standard assets NPAs 475.00 600.00 Depreciation on Investments -- --

(rs. in lakhs)

37

Standard Assets -- 50.00 12) Movement in provisions a. towards nPas Opening Balance 2141.29 2611.67 Add: Additions during the year 475.00 600.00 Less: Closed / Recovered / Written Off / Transfer 4.62 5.44 Closing Balance 2611.67 3206.23 B. towards standard assets Opening Balance 151.11 151.11 Add: Additions during the year -- 50.00 Closing Balance 151.11 201.11 C. towards depreciation on investments Opening Balance 763.38 404.63 Add: Additions during the year -- -- Less: Closed / Reversed / Transferred / written back during the year 358.75 64.82 Closing balance 404.63 339.82 13) Foreign currency assets & liabilities N.A. n.a. 14) Payment to DICGC premium 56.89 58.91

15) No penalty has been imposed by Reserve Bank of India during the year.

sr no. Particulars 31.03.2016 31.03.2017 fund based & non-fund based

38

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2017

PartiCulars rs. (in lacs)

1 CasH floW froM oPeratinG aCtiVities

(A) NetprofitasperProfit&LossA/C 475.67

Add : Provisions for Tax 359.94

Add : Deferred Tax (23.66)

Add : non-Cash items

Depreciation 93.82

Loss on sale of asset 0.72

Premium on investment 10.03

Provision for bad and doubtful debts 600.00

Leave Encashment 125.00

Election expenses 7.15

Provision for standard assets 50.00

Provision for housing dev fund 9.00

Less : non-Cash items

Excess IT written back (30.04)

Profitonsaleofasset (0.78)

Profitonsaleofinvestment (455.69)

Operatingprofitbeforechangesinoperatingassets 1,221.16

(B) (increase)/decrease in operating assets :

(Decrease)/Increase in Branch adjustment (4.59)

(Increase)/Decrease in Advances (2,512.66)

(Decrease)/Increase in Deposits 5,909.69

(Increase)/Decrease in Other Assets (893.86)

(Decrease)/Increase in Other Liabilities & Provisions (71.55)

Decrease/(Increase) in Interest receivable (461.47)

(Decrease)/Increase in Interest Payable (18.55)

(Decrease)/Increase in OIR 346.71

2,293.72

net CasH froM oPeratinG aCtiVities (i) 3,514.88

39

2 CasH floW froM inVestinG aCtiVities

Increase in Investments (3,295.94)

Decrease in Fixed Assets (8.54)

Profitonsaleofinvestment 455.69

Profitonsaleofasset 0.78

Loss on sale of asset (0.72)

net CasH froM inVestinG aCtiVities (ii) (2,848.73)

3 CasH floW froM finanCinG aCtiVities

Proceeds from share issue 136.93

(Decrease)/Increase in reserves (268.72)

net CasH froM finanCinG aCtiVities (iii) (131.79)

NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (i)+(ii)+(iii) 534.36

CASH & CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 14,118.30

CasH & CasH eQuiValents at tHe end of tHe year 14,652.66

details of cash and cash equivalents 31.03.17 31.03.16

In hand and with RBI 2,377.94 2781.80

Fixed Deposits 7,985.70 7390.52

Balance with other banks 1,589.02 1050.98

Money at call and Short notice 2,700.00 2,895.00

total 14,652.66 14,118.30

as Per our rePort of eVen date ThisistheProfit&LossA/CreferredtoinourReportofEvenDate. FORKOKANMERCANTILECO-OP.BANKLTD. for Vindu & assoCiates CHartered aCCountants frn:140385W

a. H. kHidir Vindu CHaurasiya CHief eXeCutiVe offiCer ProPrietress Membership no:149726

PlaCe : MuMBai dated : 27th June 2017

40

INDEPENDENT STATUTORY AUDITORS’ REPORT

for tHe year ended 31st MarCH, 2017

(under section 31 of the Banking regulation act, 1949 and section 73(4) of Multi state Co-operative societies act, 2002 and rule 27 of Multi state Co-operative societies rules).

tothe Members,kokan Mercantile Co-op. Bank ltd., Mumbai.

report on the financial statements

1. Wehaveauditedtheaccompanyingfinancialstatementsofthekokan Mercantile Co-operative Bank limited, which comprise the Balance Sheet as at 31stMarch,2017,ProfitandLossAccountandthecashflowstatementforthe yearthenendedandasummaryofsignificantaccountingpoliciesandotherexplanatoryinformationincorporatedin thesefinancialstatementsoftheBankalongwiththebranchesauditedbyusfortheperiodfrom01stApril,2016to 31st March, 2017.

Management’s responsibility for the financial statements

2. Management is responsible for thepreparationof thesefinancial statements inaccordancewith theBanking Regulation Act, 1949, Multi State Co-operative Societies Act, 2002 and Rules made there-under. This responsibility includesthedesign,implementationandmaintenanceofinternalcontrolrelevanttothepreparationofthefinancial statements that are free from material misstatement, whether due to fraud or error.

auditor’s responsibility

3. Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit in accordance with the applicable 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 reasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatements,whetherdueto fraud or error.

4. Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of materialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments, theauditor considers internal control relevant to theBank’spreparationand fair presentationof 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 madebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

5. Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinion.

41

BasisforQualifiedOpinion

6. The Bank has accounted leave encashment on cash basis instead of actuarial basis as required by AS-15 regarding RetirementBenefitsandAS-9regardingRevenueRecognitionissuedbyICAI.Sincetheamountpayabletoemployees onaccountofleaveencashmentonactuarialbasisisnotmadeavailable,theeffectofthesameontheprofitofthe Bankisnotquantifiable(ReferNoteNo.7(a)ofNotesonAccounts).

QualifiedOpinion

7. Subject to our comments in Paras 6 above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon and our comments in Audit Memorandum give the information required by the Banking Regulation Act, 1949 as well as Multi State Co-operative Societies Act, 2002 and rules made there-under, in the manner so required for the Urban Co-operative Banks and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance sheet, of the state of affairs of the Bank as at 31st March, 2017;

(ii) in the case of the ProfitandLossAccountof the profit for the year ended on that date; and

(iii) in the case of the Cash flow statement, of cashflows for the year ended on that date.

report on other legal and regulatory Matters

8. TheBalanceSheetandtheProfitandLossAccounthavebeendrawnupinaccordancewiththeprovisionsof Section 29 of the Banking Regulation Act, 1949 and Multi State Co-operative Societies Act, 2002 and the rules made there-under.

9. 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 our 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) ThereturnsreceivedfromtheofficesandbranchesoftheBankhavebeenfoundadequateforthepurposesofour audit.

10.TheBankhasnotcompliedAS-15regardingRetirementBenefitsandAS-9forRevenueRecognitionissuedby Institute of Chartered Accountants of India (ICAI), since it is accounting leave encashment on cash basis.

11. Bank has not complied AS 19 for Lease accounting and AS 20 for Earning Per Share issued by ICAI.

12.Subjectto10and11above,inouropinion,theBalanceSheet,theProfitandLossAccountandCashFlowStatement comply with the Accounting Standards issued by Institute of Chartered Accountants of India (ICAI) to the extent applicable.

13. We further report that :

(i) BalanceSheetandtheProfitandLossAccountdealtwithbythisreport,areinagreementwiththebooksof account and the returns.

(ii) In our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our examination of those books.

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(iii) Reports on the accounts of the branches audited by us / branch auditors have been dealt with in preparing our report in the manner considered necessary by us.

(iv) The schedules giving the particulars referred to in Rule 27(3) of the Multi-state Co-operative Societies Rules, 2002, to the extent applicable are attached to this report.

For VINDU & ASSOCIATES,CHARTERED ACCOUNTANTS,

FRN:140385W

(Vindu CHaurasiya)PlaCe : MuMBai ProPrietressdated : 27.06.2017 M. no. 149726

SchedulesFormingPartofAuditors’ReportonBalanceSheetandProfit&LossAccountofKokanMercantileCo-op. Bank ltd., as on 31st March, 2017 as required under rule 27 of Multi state Co-op. societies rules, 2002 to the extent applicable.

(a) The following monies due to the Bank appear to be doubtful of recovery (rule 27 (3)(c)). (Advances categorized as doubtful and loss assets as per prudential norms are considered as doubtful of recovery).

Category amount outstanding as on 31.03.17 (rs. in lacs)Doubtful Assets 1,721.15Loss Assets 938.34total 2,659.49

* a provision of rs. 1,955.80 lakhs has been made against the above advances.

(b) loans given by the Bank to members of the Board and their relatives (rule 27 (3)(d))

The following credit facilities have been sanctioned by the Bank to the members of the Board (including relatives).

fund Based security Value overdues, if any amount outstanding (rs. in lacs) (rs. in lacs)

Nil Nil Nil

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ProGress at a GlanCe (Amount in Lakhs)

Sr. Year Share Members Working Reserve Deposits AdvancesProfit Dividend No. No. No. Capital Capital & Paid of of Surplus Gross Net Rate Branches Staff

01 1969-70 0.39 375 0.39 0.04 Nil 0.36 0.01 0.00 Nil 1 NA

02 1974-75 5.15 2842 20.11 0.31 13.94 12.46 1.69 0.35 6% 1 NA

03 1979-80 19.73 7621 283.13 6.48 246.45 121.63 24.84 3.60 10% 3 NA

04 1984-85 76.23 22223 1639.51 69.09 1412.34 882.89 183.27 35.82 12% 6 NA

05 1989-90 164.37 33790 5081.06 332.99 4344.37 2907.84 566.18 95.94 12% 9 NA

06 1994-95 225.88 36184 9613.78 858.79 8099.42 4187.83 501.57 28.39 8.50% 10 386

07 1999-2000 383.36 41955 18035.24 1994.16 15207.03 7408.43 1239.21 -284.74 Nil 21 473

08 2000-01 416.20 42572 18483.05 2233.18 15153.66 8273.98 330.18 138.58 Nil 21 471

09 2001-02 453.05 43305 18660.76 2426.15 15411.43 9537.12 268.74 172.18 5% 21 464

10 2002-03 463.78 43617 19963.61 2519.17 16591.05 9279.13 143.18 29.16 4% 21 455

11 2003-04 492.94 43662 22018.37 2716.70 18414.75 10237.63 313.24 62.89 9% 21 439

12 2004-05 543.96 43707 23254.75 2627.63 19331.95 12449.35 277.05 73.62 9% 21 369

13 2005-06 559.02 43784 28202.29 3964.36 23249.48 12648.16 293.68 76.86 9% 21 355

14 2006-07 617.51 45007 31767.00 4539.28 25966.59 16245.73 281.13 71.75 6% 21 346

15 2007-08 693.97 44731 35935.95 4397.54 29170.43 18627.60 323.91 101.05 10% 21 337

16 2008-09 730.22 44803 39047.38 4599.19 31707.30 20962.63 397.02 171.85 12% 21 319

17 2009-10 751.44 44864 42135.60 4841.78 34662.18 19679.62 322.38 142.90 8% 23 316

18 2010-11 770.67 44926 46963.47 4987.70 38923.13 21161.02 356.95 82.19 7% 25 305

19 2011-12 870.01 49257 51129.85 5310.88 41025.43 27877.42 477.65 227.43 10% 25 295

20 2012-13 907.79 49389 53537.83 5958.98 42243.68 28842.17 507.96 262.03 12% 25 286

21 2013-14 955.64 49520 57472.35 6330.74 47943.51 27724.06 664.80 415.01 12% 25 281

22 2014-15 1076.55 49688 58735.93 7124.22 48861.21 28454.27 794.39 160.99 9% 25 276

23 2015-16 1143.90 49584 63767.36 10314.25 50698.50 28756.83 1073.54 160.52 10% 25 267

24 2016-17 1280.84 49881 71051.64 10874.67 56608.18 31269.48 1620.43 475.67 10% 25 248 proposed

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interest rate of dePositswith effect from 20th June, 2017

sr. Period interest rate rate for no. senior Citizens, registered Co.op. societies & trusts

1 7 days to 29 days 5.25% 5.75%

2 30 days to 90 days 5.75% 6.25%

3 91 days to 180 days 6.50% 7.00%

4 181 days to 12 months 7.00% 7.50%

5 Above 12 months to 18 months 7.25% 7.75%

6 Above 18 months to 30 months 7.35% 7.85%

7 Above 30 months to 42 months 7.50% 8.00%

saving deposit @ 4.00% p.a. on daily basis

1. Other Details of Deposit be paid 0.50% extra interest on and above the rate of interest given herein above.2. The maturity period of Multiple Depostis and Lakhpati Deposits will be as under :

Multiple deposit lakhpati deposit in 5 years

General Public 112 months Rs. 1372/- p.m.

Senior Citizen 105 months Rs. 1354/- p.m.

Staff Members 105 months Rs. 1354/- p.m.

3. Deposits of Rs. 1,66,500/- kept for 18 months will earn Rs. 1,000/- per month (Kokan Bank Monthly Income Scheme)

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Registered Office Harbour Crest, Mazagaon T. T., Mumbai 400 010 Board Lines : 2372 3753, 2372 9969, 2372 9970, 2372 9971, 2373 4202, 2373 4311 Fax : 2374 8589 l E-mail : kmcbco@vsnl.net Website : www.kokanbank.net

Sr. Branch Name Address Customer Tel. No. IFS Code

1. Central Office 202, Battiwala Bldg, 10.30 am. Phone : 23724062 KKBKOKMCBO2 Branch Dr. Mascarhanes Road, 1.00 pm 23780723 Mumbai 400 010. 1.45 pm Email : 4.45 pm centralofficeb@kokanbank.in

2. Mandavi 129/131, Shariff Devji 10.30 am Phone : 2347 3707 KKBKOKMCBO3 Branch Street Chakala, 1.00 pm Opp. Pattharwali Masjid, Mumbai 400 003 1.45 pm Email : 4.45 pm mandvib@kokanbank.in

3. Mazgaon 1/2, Dawoodi Mansion, 10.00 am Phone : 2371 4912 KKBKOKMCBO4 Branch Reay CHS. Ltd, Barr. 1.00 pm 2373 1770 N.P. Road, 2377 5636 Mumbai 400 010 1.45 pm 4.15 pm Email : reayroadb@kokanbank.in

4. Govandi Kokan Bank House, 9.00 am Phone : 2555 8637 KKBKOKMCBO6 Branch Gajanan Colony, 1.00 pm 2555 0804 Govandi, Mumbai 400 043 3.00 pm Email : 5.00 pm govandib@kokanbank.in

5. Jogeshwari 7-8, Shakuntala Apt. 10.15 am Phone : 2677 0048 KKBKOKMCBO11 Branch Gr. Floor, S. V. Road, 1.00 pm 2677 0701 Jogeshwari (W), Mumbai 400 102 1.45 pm Email : 4.30pm jogeshwarib@kokanbank.in

6. Kurla 104/105, Sunny Co-op. 10.00 am Phone : 26 50 4441 KKBKOKMCBO5 Branch Housing Society, 1.00 pm Belgrami Naka, 156, LBS Marg, Kurla (West), 1.45 pm Email : Mumbai 400070 4.15 pm kurlab@kokanbank.in

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7. Kalyan Kokan Bank House, 10.15 am Phone : (0251) 221 1242, KKBKOKMCBO7 Branch Dudh Naka, Kalyan, 1.00 pm 2209804, 2202000 Dist. Thane 421 301. 1.45 pm Email : 4.30 pm kalyanb@kokanbank.in

8. Kausa Alavi Apartment, 10.15 am Phone : 2535 1875 KKBKOKMCBO10 Branch Ground Floor, Plot 31/B, 1.00 pm 2535 4313 Old Mumbai Pune Road, 2549 1431 Behind Hotel Sahil, Kausa Mumbra, 1.45 pm Email : Dist. Thane 400 612 4.30 pm kausamumbrab@kokanbank.in

9. Mira Road 102, Saeeda Apts., 10.15 am Phone : 2812 0497 KKBKOKMCBO9 Branch `B' Wing, 1st Floor, 1.00 pm 2813 1200 Near Breez Apt., Naya Nagar, Mira Road (E), 1.45 pm Email : Dist. Thane 401 107. 4.30 pm thaneb@kokanbank.in

10. Thane Bape Tower, 10.15 am Phone : 2534 9329 KKBKOKMCBO8 (Rabodio-II) 1st Floor, 1.00 pm 2538 2126 Branch Opp. MasjidNoor, 2543 2156 IInd Rabodi, 1.45 pm Dist. Thane 400 601. 4.30 pm Email : thaneb@kokanbank.in

11. Nerul Shiv Parvati Co0op Hsg. 9.00 am Phone : 2771 7687 KKBKOKMCB15 Branch Society Ltd., Sector 21 1.00 pm Plot No, 106110, Nerul (E), 1.45 pm Email : Navi Mumbai 400 706 3.15 pm nerulb@kokanbank.in

12. Vashi Rainbow Flat & Shop 10.00 am Phone : 2789 7577 KKBKOKMCBO12 Branch Owners Association, 1.00 pm F-7, B-1, Sector 10, Vashi, 1.45 pm Email : Navi Mumbai 400 703 4.15 pm vashib@kokanbank.in

Sr. Branch Name Address Customer Tel. No. IFS Code

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13. Mhasla Ghansar Commercial 10.30 am Phone : (2149) 233677 KKBKOKMCB54 Branch Complex, Main Road, 1.00 pm Near S. T. Stand, Mhasla, At Post & Tal. Mhasla, 1.45 pm Email : Dist. Raigad 402 105. 4.45 pm mhaslab@kokanbank.in

14. Dapoli Shop No. 2, 10.30 am Phone : (02358) 280492 KKBKOKMCB66 Branch Dimtimkar Complex, Behind Dapoli Fish Mkt., 1.00 pm Dapoli Mandangad Road, Dapoli, 1.45 pm Email : Dist. Ratnagiri 415 712 4.45 pm dapolib@kokanbank.in

15. Khopoli Mid Town Arcade 10.30 am Phone : (02192) 262111, KKBKOKMCB13 Branch M.G. Road, Bazar Peth, 4.00 pm Khopoli, Tal. Khalapur, Email : Dist. Raigad 410 203 khopolib@kokanbank.in

16. Murud Janjira House#17/83, 10.30 am Phone : (02144) 274 801 KKBKOKMCB52 Branch Sardar Patel Road, 1.00 pm Murud Janjira, Dist. Raigad 402 401. 1.45 pm Email : 4.45 pm murudb@kokanbank.in

17. Nagothane 106, Bazar Peth 10.30 am 10.30 am Phone : (02194) 222383 KKBKOKMCB51 Branch Nagothane, Tal. Roha, 1.00 pm Dist. Raigad 402 106 1.45 pm Email : 4.45 pm nagothane@kokanbank.in

18. Panvel Gala #143, 9.30 am Phone : 2745 8881 KKBKOKMCB14 Branch Building # 1& 2, 1.00 pm Panvel Nagar Parishad, Shopping Centre, 1.45 pm Email : Panvel, Dist. Raigad. 3.45 pm panvelb@kokanbank.in

Sr. Branch Name Address Customer Tel. No. IFS Code

48

19. Shriwardhan `Sahil' Mogal Mohalla 10.30 am Phone : (02147) 222 105 KKBKOKMCB53 Branch Shriwardhan, 1.00 pm Dist. Raigad 402110 1.45 pm Email : 4.45 pm shrivardhanb@kokanbank.in

20. Chiplun 1st Floor, 10.30 am Phone : (02355) 260 742, KKBKOKMCB62 Branch Mahalaxmi Building, 1.00 pm 261266 Mandvekar Complex, Bazar Peth, Chiplun, 1.45 pm Email : Dist. Ratnagiri 415 605 4.45 pm chiplub@kokanbank.in

21. Khed M/H, 96/18, 10.30 am Phone : (02356) 263313 KKBKOKMCB63 Branch Mahadik Mohalla, 1.00 pm 264361, 263423 Pawaskar Naka, Khed, Dist. Ratnagiri 415 709 1.45 pm Email : 4.45 pm khedb@kokanbank.in

22. Rajapur Khambaye Hall, 10.00 am Phone : (02353) 222239 KKBKOKMCB65 Branch Bazar Peth, Rajapur, 1.00 pm Dist. Ratnagiri 416 702 1.45 pm Email : 4.15 pm rajapurb@kokanbank.in

23. Ratnagiri Silver Plaza, 10.30 am Phone : (02352) 222540, KKBKOKMCB61 Branch `A' wing, Ground Floor, 1.00 pm 222053, 226278 Dhanji Naka, Ratnagiri 415 612 1.45 pm Email : 4.45 pm ratnagirib@kokanbank.in

24. Sangmeshwar 35/B, Shradha Niwas, 10.00 am Phone : (02354) 273731 KKBKOKMCB64 Branch Bazar Peth, 1.00 pm Sangmeshwar, Dist. Ratnagiri 415 611 1.45 pm Email : 4.15 pm sangmeshwar@kokanbank.in

25. Panjim (Goa) 1st Floor, 10.00 am Phone : (0832) 2230880 KKBKOKMCB71 Branch EL-Dorado Plaza, 1.00 pm Helidoro Salgado Road, Panjim (Goa) 403001 1.45 pm Email : 4.15 pm panjimb@kokanbank.in

Sr. Branch Name Address Customer Tel. No. IFS Code