2.   BOARD OF DIRECTORS :
The constitution of Board of Directors is governed by the provisions of the Banking Regulation Act, 1949, Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, as amended vide Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institution Laws (Amendment) Act, 2006 [referred as The Banking Acquisition Act here in after] & Nationalized Banks (Management & Miscellaneous Provisions) Scheme, 1970 (as amended).

1. Shri V. Santhanaraman was appointed as Executive Director (a whole time director under section 9(3)(a) of the Banking Acquisition Act) by Government of India vide notification No.8/03/2006-BO.I. dated 10.10.2006 vice Shri A.C. Mahajan, who ceased to be Executive Director on his appointment, as the Chairman and Managing Director of Allahabad Bank vide Government Notification No.9/37/2005/BO.I dated 01.08.2006. Shri Santhanaraman will hold office till 31.8.2009.
2. Shri G.C.Chaturvedi was appointed as a Director Vice Shri Vinod Rai under section 9 (3) (b) of the Banking Acquisition Act vide Government Notification No.9/11/ 2004-BO.I dated. 31.10.2006 and shall hold office till further order of the Central Government.
3. Shri A. Somasundaram was appointed as Director vice Shri H.N. Prasad by Government of India vide notification No.9/2/2007-BO.I dated 27.2.2007 under section 9(3) (c) of the Banking Acquisition Act and shall hold office till further order of the Central Government.
4. Shri Amarjit Chopra was appointed as Director by Government of India under section 9(3) (g) of the Banking Acquisition Act under notification. No.9/30/2005-BO.I dated 13.10.2006 for a period of -3-years from the date of appointment
5. Dr. Pradip N. Khandwalla ceased to be Director in view of the amendment to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 vide Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutional Laws (Amendment) Act, 2006 read with the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970 (as amended vide notification dated 19.02.2007).

As on 31.03.2007, the position of Director representing workmen under section 9 (3) (e) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, remained vacant, pending nomination by Government of India.

3. BOARD MEETINGS:
During the year under review, - 16 - Board Meetings were held on following dates as against minimum of –6- meetings prescribed under Clause 12 of the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970 (as amended).

3.1 Annual General Meeting :
The Annual General Meeting of the shareholders of the Bank was held on 07th July, 2006 at Vadodara where the following Directors were present.

4. COMMITTEE OF DIRECTORS / EXECUTIVES :
The Board of Directors of the Bank has constituted various Committees of Directors and / or Executives to look into different areas of strategic importance in terms of Reserve Bank of India and Government of India guidelines on Corporate Governance and Risk Management. The important Committees of the Board are as under:

4.1. Management Committee of the Board :
In pursuance of Clause 13 of the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970 (as amended) read with the amendments made by the Ministry of Finance, Government of India, a Management Committee of the Board has been constituted to consider various business matters of material significance like sanction of high value loan proposals, compromises / writeoffs proposal, sanction of capital and revenue expenditure, premises, investments, donations etc.

The Committee consists of Chairman & Managing Director, Executive Director (s) and director nominated by Government of India under Section- 9(3)(g) and three directors from the directors appointed under sub section (e) (f) (h) and (i) of section 9(3) of the Banking Acquisition Act.

During the period under review the Management Committee of the Board (MCB) met –19 - times. The details of meetings of MCB held during the year & the attendance of director members are as detailed below:

4.2. Audit Committee of Board :
The Bank, in consonance with the fundamentals of Corporate Governance and in pursuance of directives of the Reserve Bank of India, has constituted an Audit Committee of the Board comprising of five Directors with a Non-Executive Independent Director who is a professional Chartered Accountant as the Chairman of the Committee.

The present composition of the Committee is as under:

Directors inducted as member:

Directors ceased as member:

The main functions of Audit Committee are to assess and review the financial reporting system of the Bank to ensure that the financial statements are correct, sufficient and credible. It reviews with the Management the quarterly / annual financial statements before their submission to the Board. The Committee also reviews the adequacy of internal control systems, structure of internal audit department, its staffing pattern and discussions with the internal auditors / inspectors on any significant finding and follow-up action thereon. It further reviews the financial and risk management policies of the Bank.

4.3 Shareholders' / Investors' Grievances Committee :
The Shareholders’ / Investors’ Grievances Committee has been constituted by the Bank for the purpose of redressal of shareholders’ and investors’ complaints on matters of their interest.

The Committee ensures that all share certificates are issued within a period of one month of the date of lodgment for transfer, sub-division, consolidation, renewal, exchange or endorsement of calls / allotment money. The Committee further monitors the redressal of investors’ complaints in a time bound manner.

The Bank received - 8356 - number of investors’ requests/ complaints during the year under review. At the beginning of the year – 42 - requests were pending. During the year - 8266 - investors’ complaints / requests were resolved. At the end of the year i.e. as on 31.03.2007, there were – 24 - requests pending, all pertaining to the request for issue of duplicate share certificate, for which necessary procedure is being completed.

Shri M.L Jain, Company Secretary has been designated as the Compliance Officer of the Bank under clause 47 (a) of the Listing Agreement with Stock Exchanges.

4.4. Share Transfer Committee :
Besides the Shareholders’ / Investors’ Grievances Committee, the Bank has constituted a Share Transfer Committee of executives with Chairman and Managing Director, Executive Director, -2- General Managers and Assistant General Manager (Legal) as its members. The Committee meets at least once in –15- days with a view to effect speedy transfer of Shares / Bonds. The Committee met – 37 - times during the period under review with details as under.

4.5. Asset Liability Management & Risk Management Committee :
Bank has constituted an independent Board level Risk Management Committee known as ‘Sub-Committee of the Board on ALM and Risk Management’ to review and evaluate the overall risks assumed by the Bank.

The Committee is headed by Chairman and Managing Director.

The present composition of the Committee is as under:

The Bank has set up a proper risk management architecture, comprising of Risk Management Organizational Structure, Risk Principles, Risk Processes, Risk Control and Risk Audit, all with a view to ideally identify, manage, monitor and control various categories of risks facing the Bank, viz. Credit Risk, Market Risk and Operational Risk, etc. The underlying objective is to ensure continued stability and efficiency in the operations of the Bank, nationally and internationally.

4.6 Customer Service Committee :
As per the instructions of the Reserve Bank of India for strengthening the corporate governance structure, the Bank has set up a Standing Committee on Customer Services having -4- General Managers of the Bank and - 4- other eminent public personalities as members. The Committee is chaired by the Executive Director of the Bank.

Pursuant to the RBI’s directives, the Bank has further constituted a sub-committee of Board, known as ‘Customer Service Committee of the Board’. The Committee is chaired by the Chairman and Managing Director or in his absence, by the Executive Director.

Now, the Committee has been reconstituted having following members in the Committee:

1. The Chairman and Managing Director

2. The Executive Director

3. Dr. Deepak B. Phatak – Director

4. Shri T.K.Balasubramanian – Director

The functions of the sub-committee of Board include, inter alia, suggesting and implementing innovative measures for enhancing the quality of customer services and improving the level of satisfaction for all the categories of clientele, at all times. Apart from the above, the terms of reference of the committee is :

• to oversee the functioning of the Standing Committee on Procedure and Performance Audit on Public Services and also the compliance with the recommendation of the Standing Committee on Customer Services.
  
  
• to review the status of the Awards remaining unimplemented for more than 3 months from the date of Awards and also the deficiencies in providing Banking services as observed by the Banking Ombudsman therein.
  
  
• to review the status of the number of deceased claims remaining pending / outstanding for settlement beyond 15 days pertaining to deceased depositors/locker hirers/depositor of safe custody articles.
  
  

The Committee met on – 2 - occasions during the financial year 2006-07. The details of attendance is as under:

Name	Meetings held during the period of their tenure	Meetings attended
Dr. Anil K. Khandelwal  Chairman & Managing Director	2	2
Shri A.C.Mahajan  Executive Director	1	1
Shri V. Santhanaraman  Executive Director	1	1
Dr. Deepak B. Phatak  Director Member	2	2
Shri T.K. Balasubramanian  Director Member	2	2

5. REMUNERATION OF DIRECTORS :
The remuneration including travelling and halting expenses to Non-Executive Directors is being paid as stipulated by the Central Government in consultation with Reserve Bank of India from time to time in terms of Section 17 of the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970 (as amended).

The Chairman & Managing Director and Executive Director are being paid remuneration by way of salary as per rules framed by the Government of India in this regard. The details of remuneration paid to Chairman and Managing Director and Executive Director/s for the year 2006-07 is detailed below:

The details of General Body Meetings held during the last three years are given below :

7. DISCLOSURES :
a)   There is no materially significant Related Party Transactions of the Bank which would have potential conflict with the interests of the Bank at large.

b)  No penalties and strictures have been imposed on the Bank by the Stock Exchange and /or SEBI for non-compliance of any law, guidelines and directives.

c)  Income from Fees, Commission other than on Government Business, Exchanges, Brokerage, Discount on Foreign Bills Purchased and Interest on overdue Bills/Advance Bills have been accounted for on the basis of actual realization instead of accrual basis as a measure of abundant precaution/prudence so as to render the Financial Statements/Accounts of the Bank more representative and realistic.

7.1 Mandatory and Non-mandatory Requirements :
The Bank has complied with all the applicable mandatory requirements as provided in Clause 49 of the Listing Agreement entered into with the Stock Exchanges where Bank’s shares are listed.

The extent of implementation of non-mandatory requirements is as under:

8. MEANS OF COMMUNICATION :
The Bank appreciates the benefits accruing to the society with the advent and advancement of technology and means of communication. The Bank further recognizes the need for keeping its members and stakeholders informed of the events of their interests.

The financial results of the Bank are submitted to the stock exchanges, where the securities of the Bank are listed, immediately on the day of Board Meeting. The results are also published in two or more newspapers, out of which one circulating in the whole or substantially the whole of India and the other circulating in the state of Gujarat where the Registered Office of the Bank is situated. The Bank furnishes physical copy of the results to the Shareholders on Half Yearly basis. The Bank also organizes press-meets, conferences, etc. for announcing Bank’s financial results and its future plans.

The quarterly / half-yearly / annual results as well as the press release of the Bank are posted on the Bank’s Website – http://www.bankofbaroda.com

The bank has been filing information, statements and reports on the Electronic Data Information Filing and Retrieval (EDIFAR), which can be easily accessed to by the public at http://sebiedifar.nic.in.

The Bank is a Scheduled Commercial Bank having its Head Office at Vadodara and Corporate Office at Mumbai. The Bank has its presence in all parts of the country with network of – 2732 - Branches. The Bank has also established overseas operations in – 21 - countries with – 40 - Branches, - 07 - Subsidiaries and –03 - Representative Offices. The detail about Bank’s international presence/ Operations is given in the Report of the Board of Directors.

The Bank’s shares are listed on the following major Stock Exchanges :

1) The Bombaty Stock Exchange Ltd.,
Phiroze Jeejeebhoy Towers
25th Floor, Dalal Street
Fort, Mumbai 400 001
BSE CODE : 532134

2) National Stock Exchange of India Ltd.
Bandra Kurla Complex
Bandra,(East)
Mumbai 400 051
NSE CODE : BankBaroda (32134)

The annual listing fees in respect of all the securities listed with the exchange(s) have been paid till date. 

9.1 Dematerialisation of Securities :
The shares of the Bank are under compulsory demat list of SEBI and the Bank has joined as a member of the Depository Services with “National Securities Depository Limited” (NSDL) & “Central Depository Services (India) Limited” (CDSL) as an Issuer Company for dematerialization of Bank’s shares. Shareholders can get their shares dematerialized with either NSDL or CDSL.

As on March 31, 2007 the Bank has – 224161 - Shareholders out of which – 70532 - Shareholders of the Bank have been holding their shares in physical form and - 153629 - Shareholders hold shares in demat form.

9.2 Electronic Clearing Services (ECS) :
Electronic Clearing Services (ECS) is a novel method of payment of dividend/interest etc., where the amount due to investor can directly be credited into his/her Bank account. The Bank has offered the services to the shareholders with an option to avail the facility at – 46 - centres where ECS Credit Clearing System is operative.

The ECS mandate form is enclosed with the Annual Report, which may be sent to the Registrars & Transfer Agent / DP. The option to receive dividend through ECS may be discontinued at any time, at the instance of the Shareholder.

The ECS facility is presently in operation at centres namely Agra, Ahmedabad, Allahabad, Amritsar, Bangalore, Bhopal, Bhubaneshwar, Calcutta, Chandigarh, Chennai, Cochin Coimbatore, Dehradun, Durgapur, Faridabad, Ghaziabad, Guwahati, Hubli, Hyderabad, Indore, Jaipur, Jamshedpur, Kanpur, Kolhapur, Lucknow, Ludhiana, Madurai, Mangalore, Mumbai, Nagpur, Nasik, New Delhi, Panaji, Patna, Pune, Rajkot, Shimla, Siliguri, Surat, Thiruvananthapuram, Trichur, Trichy, Vadodara, Varanasi, Vijayawada and Vishakapatnam.

9.3 Share Transfer System & Redressal of Investors' Grievances :
The Bank ensures that all transfers of Shares are duly effected within the period of one month from the date of their lodgment. The Board has constituted Investors’ Grievances Committee and Shares / Bonds Transfer Committee to consider transfer of Shares and Bonds and other related matters. The Committees meet at regular intervals and review the status of Investors’ Grievances besides confirming transfer of Shares and Bonds.

The Bank has appointed M/s. Karvy Computershare Private Limited as its Registrars & Transfer Agent with a mandate to process transfer of Shares / Bonds, dividend / interest payments, recording of Shareholders’ requests, resolution of investors’ grievances amongst other activities connected with the issue of Shares / Bonds. The Investors may lodge their transfer deeds / requests / complaints with the Registrars at following address:

Karvy Computershare Private Limited
(Unit : Bank of Baroda)
Plot No.17 to 24, Near Image Hospital
Vittalrao Nagar, Madhapur
Hyderabad - 500 081
Phone : (040) 23420815 to 820
Fax : (040) 23420814
E Mail : mailmanager@karvy.com

The Bank has also established Investors’ Services Deptt. at Corporate Office, Mumbai where the Shareholders can mail their requests/complaints for resolution at the following address and also at the address given below at Head Office, Vadodara:

(1) Investors’ Services Deptt., 8th Floor,
Baroda Corporate Centre, C-26, G-Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai - 400 051.
Telephone : (022) 66985000, 6698 5812, 6698 5846
Fax : (022) 2652 6660
E-mail : investorservices@bankofbaroda.com

(The aforesaid e-mail ID is exclusively designated for investors’ complaints pursuant to Clause 47(F) of the listing agreement with Stock Exchanges)

(2) Chief Manager (KYC – AML)
Bank of Baroda, 4th Floor,
Suraj Plaza – I, Sayajiganj,
Vadodara - 390 005
Telephone : 0265 - 2362225
Fax No.: 0265 - 2362225
E-mail : investorcell.ho@bankofbaroda.com

9.4 Corporate Governance Rating : :

The Bank is the first Public Sector Bank to have been assigned a Corporate Governance Rating of ‘CGR-2’ indicating high level of Corporate Governance in a rating scale of CGR-1 to CGR-6, in July 2004, by ICRA Limited. Further the ICRA Limited vide their letter dated 06.02.2006 reaffirmed the said rating of "CGR-2".

Annexure-A

Annexure-B

DISTRIBUTION OF SHAREHOLDERS - CATEGORYWISE AS ON 31.03.2007

Annexure-C

GEOGRAPHICAL (STATE WISE) DISTRIBUTION OF SHAREHOLDERS AS AT 31.03.2007