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Home >> Annual Reports
 
Annual Reports
 
   
 
REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE

1) Bank’s philosophy on Corporate Governance

“Corporate Governance is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders.”

Bank’s philosophy on Corporate Governance is both about doing Things Right and about doing Right Things.

The vision of Canara bank is to emerge as a World Class Bank with best practices in the realms of asset portfolio, customer orientation, product innovation, profitability and enhanced value for stakeholders. In its endeavour to attain the goal visualised, the bank is laying maximum emphasis on the effective system of Corporate Governance. The interaction between the Board, Senior Management and the Executives is so configured as to have a distinctly demarcated role so as to derive enhanced value to its stakeholders in particular and society in general.

The overall objective is to optimise sustainable value to all stakeholders - depositors, creditors, shareholders, customers, borrowers, employees and the society through adherence to corporate values, codes of conduct and other standards of appropriate behaviour relevant to our functioning.

2) Composition of Board of Directors:

The Board of the Bank has been constituted under Section 9(3) of the Banking Companies {Acquisition & Transfer of undertaking} Act 1970 and Nationalized Bank (Management & Miscellaneous Provision) Scheme 1970.

The members of the Board are eminent personalities from various walks of life. Their rich and varied experiences, guide the Bank in its progress and achievements in various spheres.

The composition of members of the Board and the details of attendance at the meetings are given in appendix A & B.

3) Audit Committee :-

The formation and functioning of Audit Committee of the Board (ACB) is governed by the directives of Reserve Bank of India .

i) ACB provides a direction as also oversees the operations of total Audit function of the Bank which interalia includes organisation, operationalization and quality control of internal audit.


ii) The terms of reference of ACB includes the following:

a) To oversee the bank's financial reporting process and ensuring correct, adequate and credible disclosure of financial information.

b) Reviewing with the management, the financial statements with special emphasis on accounting policies and practices, compliance with accounting standards and other legal requirements, concerning financial statements and

c) Review the adequacy, quality and effectiveness of external and internal audit, internal control system, interaction with external auditors before finalization of Annual accounts and reports, review Bank's finance and risk management policies.

iii) ACB also examines, scrutinizes, reviews and takes appropriate action on the basis of comments given in Statutory/External Audit reports, Long Form Audit Report [LFAR] and Annual Financial Inspection Report {AFI}/inspection report of RBI.

iv) ACB also makes a review of reports received from compliance cell, Interbranch Adjustments Account, etc

The composition of members of Audit Committee and the Details of attendance at the meetings are given in Appendix A & B.

4) Remuneration Committee:

Remuneration to Directors is paid as per the Government of India guidelines. Hence, constitution of the Remuneration Committee has no relevance.

4.1 The details of salary paid to the whole-time Directors of the Bank, during the year 2005-06 are furnished here under.

Name & Designation Amount (Rs.)
Shri. M B N Rao
Chairman & Managing Director
4,40,907/-
Shri. B Swaminathan
Executive Director
4,31,034 /-


4.2 Non- Executive Directors are not being paid any other remuneration except Sitting Fees as fixed by Government of India.

5) Shareholders'/ Investors' Grievances Committee :

The Shareholders’/Investors’ Grievances Committee has been constituted in terms of Clause 49 of the Listing Agreement. The Committee monitors the redressal of the Shareholders’/Investors’ grievances like transfer of shares, non- receipt of shares certificate/refund order/dividend warrants, etc.

Following are the details of complaints received during the year.

a No. of shareholders Complaints Received 2172
b No. of shareholders Complaints not solved to the satisfaction of shareholders Nil
c No. of Pending complaints Nil


None of the above complaints were pending for more than a month.

In terms of Clause 46 of the Listing Agreement, Shri S R Krishnan, Company Secretary is the Compliance Officer of the Bank.

The Composition of members of Shareholders'/Investors' Grievances Committee and details of attendance at the meeting are given in appendix A & B.

5 (A) Other Committees

a) Management Committee of the Board:

The Management Committee of the Board is constituted as per the provisions of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme 1970. The Management Committee exercises all the powers vested with the Committee in respect of sanctioning of credit proposals, compromise/ settlement of loans, write-off proposals, approval of capital and revenue expenditure, acquisition and hiring of premises, filing of suits/ appeals, investment, donations and any other matter referred to or delegated to the Committee by the Board.

The composition of members of Management Committee and the details of attendance at the meeting are given in Appendix A & B.

b) Risk Management Committee

The Bank has evolved suitable Risk Management Policies consistent with the business focus, risk appetite of the Bank, Capital Adequacy and infrastructure of the Bank

A Board Level Risk Management Committee has been formed, with the responsibility of devising policy and strategy for integrated Risk Management System for the Bank.

As the Risk Management system is required to be implemented through a Committee approach, THREE high level committees viz. Market Risk Management Committee (MRMC), Credit Risk Management Committee (CRMC) and Operational Risk Management Committee(ORMC) have been set up to deal with the issues relating to Risk Management covering Market Risk, Credit Risk and Operational Risk respectively. The C&MD of the Bank is the Chairman of these Committees, assisted by the Executive Director and other Senior Executives of the Bank.

The composition of members of Risk Management Committee of Board and the details of attendance are given in appendix A & B.

c) Asset Liability Management Committee:
Based on RBI directives, the Bank has set up an Internal Asset Liability Management Committee (ALCO) headed by the C&MD of the Bank. The other members of the Committee include the Executive Director and other Senior Executives of the Bank.

The scope of ALM functions is as follows:

  1. Liquidity risk management.

  2. Management of market risk

  3. Trading risk management

  4. Funding and capital Planning

  5. Profit Planning & Growth Planning


The above mentioned scope, addresses mainly the liquidity and interest rate Risk.

6. General Body Meetings:

The details of last three Annual General Meetings held are furnished here below:

Annual General Meeting Date Time Venue
1ST AGM 16.07.2004 3.00 pm Kanteerava Indoor Stadium, Kasturba Road, Bangalore 560001
2ND AGM 21.07.2004 3.00 pm Koramangala Indoor Stadium, Koramangala, Bangalore -560 095
3RD AGM 04.08.2005 4.00pm Chowdiah Memorial Hall, G D Park Extension, Vyalikaval, Bangalore-560 003


No special resolutions were put through in last three Annual General Meetings and there were no ballot exercise. Details of attendance of Directors at the fourth Annual General Meeting are given in Appendix B.

7. Disclosures:

The related party transactions of the Bank are disclosed in the notes on accounts schedule 17 of the Balance Sheet as on 31.03.2006.

The Bank has complied with all matters related to capital market since its listing of shares. There are no penalties or strictures imposed on the Bank by the stock exchanges or SEBI or any other statutory authorities on any matter related to capital Markets, during the last three years.

The Bank has complied with all the mandatory requirements prescribed by Regulatory Authorities.

The extents of implementation of non-mandatory requirements of clause 49 of the Listing Agreement are as under:

Sr. No. Non Mandatory Requirement Status of Implementation
1. The Board
A non-executive Chairman may be entitled to maintain a Chairman’s office.
The Bank is having a whole time C&MD. Board is Constituted as per Section (9)(3) of Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970. Hence this clause is not applicable for us.
2. Remuneration Committee Remuneration to the Whole time Directors and non-executive directors is paid as per Government of India guidelines. Hence, constitution of the Remuneration Committee is not applicable for us.
3. Shareholder Rights The Bank has sent Annual financial results along with the summary of significant developments during the year, to all the shareholders.
4. Audit qualifications Efforts are being made to move towards a regime of unqualified financial statements.
5. Training of Board Members The Board Members are imparted training, by deputing them for training programmes conducted by Reputed Agencies. A complete overview of Business Model along with the Government Guidelines regarding their responsibilities and code of conduct is given to each Member.
6. Mechanism for evaluating non-executive Board Members Composition of Board of Directors is regulated by the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 and the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970. Hence this clause is not applicable for us.
7. Whistle Blower Policy Bank has implemented Whistle Blower policy as per extant GOI Guidelines and the protection has been extended to the Whistle Blower.


8. Means of communication:

Canara Bank provides information relating to Bank through its Annual Report which contains Report of the Board of Directors on Corporate Governance, the Directors report, audited accounts, cash flow statements, etc. The shareholders are also intimated of its performances, through publication in news papers, intimation to stock exchanges, press releases and through website at www.canbankindia.com . The Bank also displays official News releases, presentations in its website.

In terms of Clause 41 of the Listing Agreement, Financial Results and the price sensitive informations are furnished to Stock Exchanges.

Quarterly Result Announcement Details:

News Papers Business Line

Prajavani

Udayavani
Quarter ended 31.03.2005
30.06.2005
30.09.2005
31.12.2005
Date of Publication 08.05.2005
24.07.2005
25.10.2005
24.01.2006


9) General Shareholders' Information:

Financial Calendar

Financial year 01.04.2005 – 31.03.2006
Board Meeting for consideration of Accounts and recommendation of Dividend 24.04.2006
Submission of Consolidated Accounts to RBI 23.05.2006
Posting of Annual Report 29.05.2006
Book closure Date (Both days Inclusive) 16.06.2006 to 23.06.2006
Last date for Receipt of proxy Forms 17.06.2006
Date of Annual General Meeting 23.06.2006
Dividend Payment Date 23.06.2006
Probable date of despatch of dividend warrants 30.06.2006


Listing on Stock Exchanges :

Canara Bank shares are listed at the following Stock Exchanges. Stock Codes of respective stock exchanges are furnished against their names.

1 The Bangalore stock Exchange Limited CANBANK
2 Bombay Stock Exchange Limited 532483
3 National Stock Exchange of India Limited CANBANK


Annual Listing fee to stock exchanges for the year 2005-06 have been paid within the prescribed due date.

Market Price Data

Month Year Bombay Stock Exchange Ltd. National Stock Exchange of India Ltd.
High (Rs) Low (Rs) Volume No. High (Rs) Low (Rs) Volume No.
April 2005 212 172 33,96,812 211 172 1,98,72,613
May 2005 204 170 45,95,225 204 170 2,74,70,425
June 2005 221 197 43,75,074 221 197 2,10,29,057
July 2005 257 210 34,63,968 257 209 1,83,85,224
August 2005 258 211 20,75,074 260 213 1,46,82,548
September 2005 252 223 27,11,563 252 222 1,14,14,085
October 2005 242 191 43,48,598 242 189 1,05,71,940
November 2005 220 198 24,48,066 220 197 1,21,07,949
December 2005 247 200 92,97,568 247 201 2,43,15,686
January 2006 252 221 49,76,661 252 221 2,02,17,572
February 2006 300 232 1,01,41,162 299 232 3,67,39,996
March 2006 292 261 35,19,011 292 261 1,42,71,891


Performance in comparison to Broad Based Indices:

















Performance in comparison to Broad Based Indices:



Karvy Computershare Pvt. Ltd
Unit: Canara Bank
“Karvy House”,
No.46, Avenue IV
Street No.1, Banjara Hills
HYDERABAD – 500 034

Share Transfer System

Share Certificate along with transfer deed should be forwarded to M/s Karvy Computershare Pvt. Ltd, Registrar and Share Transfer Agents of the Bank.

Distribution of Shareholding

(Category wise) 31.03.2006

Category # No. of shares held % of shareholding
Government of India 30,00,00,000 73.17
Foreign Institutional investors 7,54,35,778 18.40
Resident Individuals 2,56,40,064 6.25
Banks & Financial Institutions 41,80,164 1.02
Bodies Corporate 24,49,056 0.60
Mutual Funds 19,89,496 0.49
NRIs/OCBs 3,05,442 0.07
T O T A L 41,00,00,000 100


(Value wise) 31.03.2006

Shareholding Nominal value (Rs) Shareholders Shares
Nos. % Nos. %
Up to 5000 90207 90.80 1,54,57,445 3.77
5001 to 10000 7709 7.76 65,48,862 1.59
10001 to 20000 854 0.86 12,94,234 0.32
20001 to 30000 156 0.16 3,90,821 0.10
30001 to 40000 47 0.05 1,65,827 0.04
40001 to 50000 117 0.12 5,01,538 0.12
50001 to 100000 114 0.11 8,28,864 0.20
100001 and above 147 0.14 38,48,12,409 93.86
T O T A L 99351 100.00 410000000 100.00

# Nominal value of each share is Rs.10/-

Dematerialisation of shares and liquidity:

The Bank's shares were traded compulsorily in dematerialized form only. The Bank has entered into agreement with M/s National Securities Depository Limited (NSDL) and M/s Central Depositories Services (India) Limited (CDSL) for Dematerialisation of the Bank's shares. The ISIN allotted to the Bank's shares is INE476A01014. Dematerialisation of the shares ensures easy liquidity.

Demat /Physical Holding (31.03.2006)

Particulars Number of Shareholders % Number of Shares %
Physical 47087 47.39 311569354 75.99
Electronic-NSDL 47952 48.27 97312651 23.74
Electronic-CDSL 4312 4.34 1117995 0.27
T O T A L 99351 100 410000000 100


*Equity shares in physical form include 30 crs shares held by GOI

There are no outstanding GDRs / ADRs / Warrants or any convertible instruments

Address for Correspondence

Canara Bank
Secretarial Department
Head Office, 112 J C Road
BANGALORE - 560 002


Appendix A


i. COMPOSITION OF BOARD OF DIRECTORS (31.03.2006)

Sl NO. NAME TYPE TERM OF OFFICE MEMBERSHIP OF OTHER BOARDS
1. SHRI M B N RAO C&MD 09.06.2005 to 30.06.2008 7
2. SHRI. A K MISRA ED 24.03.2006 to 23.03.2011 Nil
3. SHRI. G.C.CHATURVEDI GOI Nominated on 06.06.2003 4
4. SHRI G SRINIVASAN RBI Nominated on 01.06.2005 Nil
5. SHRI. R. K. AVASTHI OD Nominated on 11.03.2003 Nil
6. SHRI. A. N. BALASUBRAMANIAN WED 15.03.2004 to 31.05.2006 Nil
7. SHRI S SHABBEER PASHA NED 16.09.2005 to 15.09.2008 Nil
8. SHRI PANKAJ GOPALJI THAKKER NED 16.09.2005 to 15.09.2008 1
9. DR. SONE LAL SD 09.06.2004 to 08.06.2007 Nil
10. SHRI M P MEHROTRA NED 09.06.2004 to 08.06.2007 12
11. SHRI S C GUPTA SD 09.06.2004 to 08.06.2007 1
12. SHRI U N KAPUR SD 09.06.2004 to 08.06.2007 3

ii. PARTICULARS OF DIRECTORS WHOSE TERM HAS ENDED DURING 2005-2006

Sl NO. NAME TYPE TERM OF OFFICE MEMBERSHIP OF OTHER BOARDS
1. SHRI B SWAMINATHAN ED 22.01.2005 to 31.01.2006 5
2. SHRI ANUP PRAKASH GARG NED 12.06.2002 to 11.06.2005 1
3. SHRI V RAMACHANDRA RAO RBI 26 .08.2004 to 31.05.2005 Nil


KEY
C& MD Chairman & Managing Director
ED Executive Director
GOI Nominated by GOI
RBI Nominated by RBI
NED Non-Executive Director
OD Officer Director
WED Workmen Employee Director
SD Shareholder Director


COMMITTEE CHAIRMAN MEMBERS
MANAGEMENT COMMITTEE SHRI. M B N RAO SHRI. A.K.MISRA,
SHRI. G.C.CHATURVEDI,
SHRI. G. SRINIVASAN,
SHRI. S.SHABEER PASHASHRI,
PANKAJ GOPALJI. THAKKER
RISK MANAGEMENT COMMITTEE SHRI. M B N. RAO SHRI. A.K.MISRASHRI,
G.SRINIVASAN,
SHRI. A.N. BALASUBRAMANIAN
AUDIT COMMITTEE SHRI. M.P.MEHROTRA SHRI. A.K.MISRASHRI,
G.C.CHATURVEDI,
SHRI. G.SRINIVASAN,
SHRI.U.N.KAPUR
SHAREHOLDERS’/INVESTORS GRIEVANCES COMMITTEE SHRI. U.N.KAPUR SHRI.A.K.MISRA,
SHRI. S.C.GUPTA


Appendix B

DETAILS OF ATTENDANCE OF DIRECTORS AT THE BOARD, COMMITTEE MEETINGS, ANNUAL GENERAL MEETING DURING 2005-2006 AND THE PARTICULARS OF SHAREHOLDING OF NON-EXECUTIVE DIRECTORS.


Sl no. Name Board
Meeting
Manage
ment Committee
Meeting
Audit
Committee
Meeting
SIGC*
Meeting
Risk
Management
Committee
Meeting
Last
Annual
General
Meeting
No. of
shares
held
Attended/ Held Attended / Held Attended / Held Attended / Held Attended / Held ATTEN
DANCE
1. SHRI
M B N Rao
10/11 13/15 N.A. N.A. 3/4 N.A.
2. SHRI. A K
MISRA
1/1 1/1 N.A. 1/1 1/1 N.A. N.A.
3. SHRI. G.C.
CHATURVEDI
10/12 10/17 5/7 N.A. N.A. X Nil
4. SHRI G
SRINIVASAN
10/11 15/15 5/6  N.A. 4/4 Nil
5. SHRI. R. K.
AVASTHI
12/12 N.A. N.A. N.A. N.A. 200
6. SHRI. A. N.
BALASUB
RAMANIAN
10/12 N.A. N.A. N.A. 4/4 X Nil
7. SHRI S
SHABBEER
PASHA
8/8 7/7  N.A. N.A. N.A. N.A. Nil
8. SHRI PANKAJ
GOPALJI
THAKKER
6/8  2/4 N.A. N.A. N.A. N.A. Nil
9. DR. SONE
LAL
10/12 7/10 N.A. 1/1 N.A. X 100
10. SHRI M P
MEHROTRA
10/12 N.A. 6/6 1/1 2/3. 800
11. SHRI S C
GUPTA
12/12 5/5 N.A. 1/1 N.A. 100
12. SHRI
U N KAPUR
12/12 8/8 7/7 1/1 N.A. 500
DETAILS OF ATTENDANCE OF DIRECTORS WHOSE TERM HAS ENDED DURING 2005-2006
1. SHRI B
SWAMINATHAN
9/9 14/18 7/7 1/1 3/3    N.A.
2. SHRI ANUP
PRAKASH GARG
1/1 2/2 1/1 N.A. N.A.  N.A. N.A.
3. SHRI V RAMA
CHANDRA RAO
1/1 2/2 1/1 N.A. N.A. N.A. N.A.
Dates of
Meeting
Dates of
Meeting
Dates of
Meeting
Dates of
Meeting
Date of
Meeting
Date of
Meeting
07.05.05
22.06.05
01.07.05
23.07.05
24.09.05
24.10.05
13.12.05
30.12.05
23.01.06
14.02.06
11.03.06
25.03.06 
23.04.05
06.05.05
13.06.05
22.06.05
11.07.05
23.07.05
04.08.05
23.08.05
24.09.05
25.09.05
22.10.05
14.11.05
14.12.05
24.01.06
24.02.06
11.03.06
25.03.06
07.05.05
22.06.05
23.07.05
24.10.05
15.11.05
14.12.05
23.01.06
22.06.05
25.03.06
22.06.05
24.09.05
23.01.06
25.03.06
04.08.05


KEY :

SIGC : Shareholders'/ Investors' Grievances Committee Meeting.
NA : Not Applicable


DECLARATION BY C&MD


The Board of Directors and the Senior Management Personnel of the Bank have affirmed confirming to the code of conduct of the Bank for the year ended 31.03.2006.

Place: Bangalore M B N Rao
Date: 13.05.2006 Chairman & Managing Director




AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE



To:

The Members of Canara Bank

We have examined the compliance of conditions of Corporate Governance by CANARA BANK for the year ended 31 st March 2006 as stipulated in the relevant Clauses of the Listing Agreements of the said Bank with the Stock Exchanges.

The compliance of conditions of Corporate Governance is responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Bank for ensuring the compliance of conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Bank.

On the basis of the records and documents maintained by the Bank and the information and explanations given to us, in our opinion, the Bank has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements with the Stock Exchanges.

We state that no investor grievance is pending for a period exceeding one month against the Bank as per the records maintained by the Shareholders and Investors Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Bank nor the efficiency or effectiveness with which the Management has conducted the affairs of the Bank.

Bangalore G VENKATA RATNAM
Partner
April 24, 2006 FOR SATYANARAYANA & CO.
Chartered Accountants


 
   
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