Ladies and Gentlemen,

It gives me great pleasure to welcome you all to this 11 Annual General Meeting of your Bank. The Annual Report along with the Audited Statements of Account for the Financial Year ended 31 March 2007 are already with you and with your permission, I shall take them as read.

I consider it my privilege to be addressing this august gathering and sharing my views on the banking scenario and discussing the highlights of your Bank's performance and progress during the year. I would also touch upon the Future of Indian Banking and the contribution your Bank will make.

GLOBAL ECONOMY:

The outlook for the world economy is favorable. Growth in world economy decelerated from 5.4% in 2006 to 4.9% in 2007, primarily due to fall in US Economic Growth. Robust growth rates in the emerging markets are expected to make up for the slowdown in the developing economies.

Asian economies are expected to contribute over 50% to the world economic growth in 2007, with China, India and Japan contributing 30%, 10% and 10% respectively. Contributions of US and Euro Zones are expected at 12% and 7% respectively. Asian region is set to grow at 8.6% with China slated to grow at 10% and India at 9.4%. African region is estimated to grow at over 5%, with the continent emerging as a potential source for profitable business, when fully harnessed.

Volatility in the world oil price market and the impact of widening current account imbalances in the US are the major uncertainties.

INDIAN ECONOMIC SETTING:

Indian Economy continued to ride high in 2006-07. It is now the fastest growing economy in the world, next only to China. The India Growth Story continues to hog the headlines all over the world.

India's manufacturing sector charted a new growth path. Services sector continued its growth momentum. Agriculture sector could not however keep pace with other growing sectors.

India's foreign trade grew by an impressive 8% last year and as a share of GDP, it has grown to 34%. Services sector accounts for around 1/3 of the country's export and is the largest export earned.

Strong macro economic fundamentals have helped in creating a good investment climate. However, rising inflation continued to be an area of concern for the policy makers.

India's vision to be part of the league of developed economies by 2020 is increasingly becoming realizable.

INDIAN BANKING SCENARIO:

The Indian financial system is proving to be more than resilient in coping with the vagaries of liberalization and globalization. The Indian banking system is showing a steady growth of around 15%.

Expansionary phase of the Indian economy triggered by globalization and encouraging investment climate, has brought in its wake unprecedented spurt in bank credit. In tandem with such large credit growth, banks have been experiencing pressures on their resources. The growth rate in credit portfolio of all commercial banks as on December 2006 over March 2006 was at around 16% against deposit growth rate of around 12% during the same period. This explains in a way the northward direction in the movement of interest rates. Banks have been struggling to cope with the asset-liability mismatches. One relief granted by RBI is to allow banks to raise infrastructure bonds to balance their long term infrastructure financing.

Indian banking industry has taken steps forward for expanding the coverage of branches under centralized Core Banking Solution (CBS), besides widening the network of alternate e-delivery channels. Many banks, with robust CBS, are in customer acquisition spree, with efforts to improve their MIS and Business Intelligence System.

Risk Management Systems, roadmap towards BASEL-II compliance and capital adequacy have remained in focus during the year. With a view to enhanced capital raising options of banks, RBI has issued policy guidelines enabling issue of several instruments by banks like Innovative Perpetual Debt Instruments, Perpetual Noncumulative Preference Shares, Hybrid Debt Instruments.

Other major developments impacting the industry include financial inclusion, introduction of fair practices code by Indian Banks' Association, introduction of Right to Information Act to promote transparency and accountability in public sector organizations, introduction of voluntary code of standards for banking practices.

Implementation of BASEL-II norms is posing newer challenges. Impaired assets continue to be major area of concern. Cost of resources has been rising beyond acceptable levels. Asset-liability mismatches are emerging as a major challenge to be addressed. Banks are under increasing pressure to improve their profitability to meet the high operating costs and to shore up their capital.

GLOBAL ECONOMY AND THE INDIAN FINANCIAL SECTOR:

The management of Indian financial sector continues to be slanted towards gradual re-balancing of efficiency and stability and the changing shares of public and private ownership. The country has been following a cautious and calibrated approach in its financial sector reforms.

RETURN TO SHAREHOLDERS:

Your Bank's above-industry business performance has enabled it to declare a dividend of 60% for FY 2006-07. Bank's Earning per Share (EPS) improved from Rs.27.10 in FY 2005-06 to Rs.28.18 in FY 2006-07, while book value improved to Rs.231.59 from Rs.209.18. May I take this opportunity to reaffirm our constant endeavour to create higher value for shareholders.

NETWORTH:

The Bank's Net Worth as on 31 March, 2007 was Rs.8,436.08 crore comprising of paid-up equity capital of Rs.365.53 crore and Reserves (excluding Revaluation Reserves) of Rs.8,070.55 crore. An amount of Rs.774.01 crore was transferred to Reserves from the profits earned during FY 2006-07.

FY - 2006-07: FROM ONE SUCCESS TO ANOTHER.....

I will now turn to your Bank's performance in FY-07. The year was quite eventful for the Bank for many reasons. We surged ahead in business performance, achieving record business growth; significantly improving asset quality & reducing NPA levels and firmly placing the Bank on the high technology platform. Your Bank also achieved significant success in international operations and created new benchmarks for future performance.Wealso firmly moved forward in implementing various Business Transformation Agenda.

BUSINESS PERFORMANCE AND FINANCIAL HIGHLIGHTS:

• Total business (Deposits + Advances) shot up from Rs.1,53,574 crore to Rs.2,08,537 crore growth by 35.79%.
  
  
• Deposits grew by 33.37%, reaching Rs.1,24,916 crore.
  
  
• Credit growth was at 39.57%, reaching Rs.83,621 crore.
  
  
• Retail credit (India) posted a robust growth of 46.42%.
  
  
• Credit to agri sector (India) recorded an impressive growth of 50.91%.
  
  
• Advances to SME sector (India) grew by 31.40%
  
  
• Credit-Deposit ratio shot up from 67.15% to 74.35%
  
  
• Net Profit was at Rs.1,026 crore - growth by 24.12%.
  
  
• Net interest margin (NIM) on average interest earning assets stood at a healthy level of 3.23%.
  
  
• Gross NPA declined from 3.9% last year to 2.47%.
  
  
• Net NPA to net advances declined from 0.87% to 0.60%.
  
  
• Capital Adequacy Ratio (CAR) was at a comfortable level of 11.8%.
  
  
• Net worth improved from Rs.7,619 crore last year to Rs.8,436 crore a rise of 10.72%.
  
  
• Business Per Employee moved up from Rs.396 lacs last year to Rs.548 lacs a rise of 38.38%

SERVING THE TWO FACES OF INDIA FINANCE TO RURAL SECTOR:

The Bank has always been in the forefront in the area of Priority Sector and Agriculture Lending, harnessing the vast potential of the rural market through its wide network of over 1700 rural and semi-urban branches. The Bank posted impressive growth of 50.91% in agri credit during the year. SSI & SME advances grew by 27% & 31% respectively. Priority Sector advances constituted 40.61% of the Net Bank Credit against the mandated target of 40%.

Besides credit to these sectors, the Bank participates in a number of rural focused development programmes. It is active as a Lead Bank in 41 districts, with a network of 1,097 branches, across the States of Gujarat, Rajasthan, Uttar Pradesh, Uttaranchal, Madhya Pradesh and Bihar. The Bank is also the convenor of State Level Bankers Committee (SLBC) in 2 States Uttar Pradesh and Rajasthan.

The Bank added four more BARODA SWAROJGAR VIKAS SANSTHAN (BSVS) centres across the States of Rajasthan and Uttar Pradesh, during the year, taking the total of such centres to 11. These centres are an exclusive institution of the Bank for training the youth and imparting them with knowledge and skills required for taking up self employment ventures. One of these centres Ajmer in Rajasthan provides focused training to women entrepreneurs and is staffed by women employees of the Bank.

BUSINESS TRANSFORMATION: TOWARDS MULTI-SPECIALIST BANKING:

To assist the Bank realize its aspirations under Vision-2010, the Bank had engaged the services of a world-class Management Consultancy Firm McKinsey & Co. On their recommendations, the Bank is implementing measures to move towards multi-specialist banking, as part of “Project Parivartan”.

In the present era of high competition and specialized banking, one-size-fit-for-all approach is increasingly becoming irrelevant. From all branches catering to varied needs of all business segments, the Bank will move forward to create specialized and segmentfocused outfits, with specialized skills, appropriate ambience and technology, in order to be able to design and deliver customized products and services to different customer segments.

The Bank has redefined four business segments and regrouped the customers along these segments. Wholesale banking segment will be largely housed in 10/15 Corporate Financial Services branches across the country while other branches in metro/urban centres will largely focus on Retail and SME banking. Rural branches will focus on rural and agri. banking.

RETAIL REVOLUTION:

Retail sector in the country continues to boom and holds immense potential for the future. Retail lending, therefore, continued to be major thrust area for the Bank during the year.

Retail Loan Factories:

Reaching out...........sourcing business

One of the major initiatives taken under “Project Parivartan” during the year was rolling out of a chain of 13 Retail Loan Factories at Mumbai, New Delhi, Chennai, Kolkata, Ahmedabad, Bangalore, Hyderabad, Baroda, Surat, Jaipur, Pune, Lucknow and Kanpur. These factories represent an innovative “Sales & Delivery Model”, based on assembly line principle, engaging our people and supported by simplified processes and technology. The Retail Loan Factory has twin outfits comprising “Sales Team” and “Centralized Processing Cell”, manned by the Bank's own specially selected and trained employees.

SME Credit:

Next only to agriculture, SME (Small & Medium Enterprises) segment has emerged as a biggest employment provider in the country. SMEs constitute 95% of industrial units and contribute over 40% to the total industrial output. They manufacture a wide range of products numbering over 8,000 in various key sectors like pharmaceuticals, garments, textiles, auto ancillaries, jewellery and software.

SME Loan Factories:

Inauguration of SME Loan Factory, Coimbatore.

Another major development during the year was rolling out a chain of 16 SME Loan Factories across the country - Ahmedabad, Surat, Pune, Baroda, Kolkata, Coimbatore, Chennai, Jaipur, Bhilwara, Kanpur, Ludhiana, Delhi, Kalbadevi (Mumbai), Jogeshwari, (Mumbai), Thane and Lucknow. These Factories represent an innovative “Sales & Delivery Model”, based on assembly line principle, engaging our people and supported by simplified processes and technology. The model comprises of a Central Processing Cell for speedy appraisal and sanction of proposals within the stipulated time frame. Encouraged by the response to these factories, 10/15 additional factories at different locations would be setup during FY- 08.

INTERNATIONAL OPERATIONS:

True to the Bank's strong presence in different geographies and markets around the world and in line with the tagline “India's International Bank” to its logo, Bank's International Operations scaled a new high in business and profit performance during the year. Overseas Deposits grew by 72% and credit growth recorded was 71%. The most outstanding feature of International Operations is the Zero NetNPAlevel.

During the year, the Bank opened an Offshore Banking Unit in Singapore. To tap the rapidly emerging opportunities across continents, the Bank has drawn ambitious plans for expansion abroad, besides penetration in the countries where it is present. Your Bank plans to open new branches/offices in Trinidad & Tobago, Ghana, Australia, Bahrain, Canada, New Zealand. We are also exploring other markets like Russia, GCC countries like Qatar, Kuwait, Saudi Arabia. Further, your Bank is planning to upgrade/expand our existing network in China, UK, Malaysia, South Africa, Tanzania, Kenya and Botswana, besides opening Electronic Banking Service Units in Jebel Ali Free Zone and Musafa Free Zone in UAE. In all, the Bank is firming up plans to open at least 10 overseas branches/offices, during 2007-08.

To tap the emerging business opportunities in different parts of the world particularly in the context of many Indian Corporations seeking to acquire companies abroad, the Bank proposes to setup Regional Hubs at centers like London, Hong Kong, Dubai and Johannesburg.

GOLDEN JUBILEE CELEBRATION OF BANK'S OPERATIONS IN THE UK:

Prof. Mervyn King, Governor, Bank of England, Hon'ble Union Finance Minister, Mr. P. Chidambaram and Dr. Anil K. Khandelwal, CMD at the Golden Jubilee Celebrations of UK Operations in London.

The Bank celebrated completion of its 50 years of operations in the United Kingdom in January 2007. The function held in London to celebrate this occasion was attended by the Bank's customers & well wishers, Ministers in the Government, Members of Parliament, many members of the House of Lords, Corporate Captains and Heads of Financial Institutions. Shri P Chidambaram, Hon'ble Finance Minister, Govt. of India was the Chief Guest and Prof. Mervyn King, Governor, Bank of England was the Guest of Honour at the function. The function helped showcase the Bank as India's premier International Bank.

RISK MANAGEMENT TOWARDS BASEL II COMPLIANCE:

Your Bank was one of the first among the PSBs to set up an integrated risk management system for identifying, measuring and evolving strategies for controlling and managing risk. The Bank has put in place an appropriate Risk Management Architecture to manage various financial and non-financial risks Credit Risk, Market Risk and Operational Risk.

In view of its large overseas presence, the Bank is required to implement the Basel-II guidelines by March, 2008. The Bank is well equipped to implement these guidelines, for which a Road map has been drawn.

ISO CERTIFICATION:

In its journey towards improving quality management, 616 branches and offices including 47 specialized branches have been brought under ISO Certification.

REPOSITIONING OF GUJARAT OPERATIONS:

Hon'ble Chief Minister of Gujarat, Mr. Narendra Modi inaugurating Bank of Baroda Towers, Head Quarters of Gujarat Operations of the Bank at Ahmedabad.

During the year, the Bank took a major initiative of unifying and integrating the entire Gujarat Operations, by merging the 2 erstwhile Central Gujarat and South Gujarat Zones with North Gujarat Zone, to form a single entity, with headquarters at Ahmedabad. The objective was for the Bank to emerge as a Primary Banker to the State of Gujarat. A 10-Point Agenda for Gujarat Operations is now under implementation. This initiative has received good response from the Govt. of Gujarat and has helped enhance the Bank's image and improve its business performance in the State.

GEN-NEXT BRANCH:

'Your Zone' in the Gen-Next branch

To respond to the needs of the changing demographic profile of the country, the Bank has been endeavoring to customize delivery channels designed especially for Youth Segment. As part of these efforts, the Bank has setup an innovative branch “Gen-Next Branch” dedicated to youth and young IT Professionals at Pune possibly, the first of its kind in the country. Besides youth-specific products, the Branch will function as a model for fusion of “Hi-tech- Hi-touch Banking”.

Encouraged by the response to this branch, your Bank plans to set up such youth-specific branches in 5 centers during FY-08.

THIRD PARTY PRODUCTS: EMERGING REVENUE STREAMS:

With increasing importance of Third Party Products for generating fee income, the Bank entered into tie-ups with different entities during the year - HDFC Standard Life Insurance Company for selling their various Life Insurance Products; Birla Sun Life Mutual Fund for selling their Mutual Fund products, etc.

Wealth Management Services; New Business Line:

With increasing household incomes, Wealth Management is emerging as a high potential business opportunity. With the Bank's strong roots and presence in the western belt of the country and in many overseas locations, the Bank is well positioned to tap this potential. Wealth Management, as a business line, was, therefore, given a new focus during the year under “Project Parivartan”.

The Bank entered into a tie-up with India Infoline Ltd., a leading brokerage firm, for offering online trading platform “Baroda e-Trading” for Equity Trading, Derivatives Trading. This will be taken forward to include Commodities Trading and Portfolio Management Services, as part of the complete suite of Wealth Management Services.

Wealth Management Services were launched during the year at select branches in Mumbai, Ahmedabad and Delhi, through a special and dedicated “Gold Lounge”. The services will be extended in due course to other key potential centres in the country apart from overseas centres like Dubai, Hong Kong and London.

Joint Ventures for Mutual Funds & Life Insurance:

MOU for Asset Management JV with Pioneer Investments, Italy.

In order to be able to design and deliver world class financial products in the area of Mutual Funds and Life Insurance to the Bank's customers, the Bank signed MoU with Pioneer Group of Italy as JV Partner for Asset Management and identified Legal & General of UK as JV Partner for Life Insurance.

MARKETING - KEY DIFFERENTIATOR FOR CUSTOMER INTIMACY:

Marketing function, formally introduced in the Bank in 2005-06, matured and graduated to a full-fledged organizationwide function, during the year helping the Bank improve its visibility in the marketplace, besides in product promotion and publicity.

Strengthening Internal & External Communications:

Your Bank also believes that it is necessary that frontline staff share the vision of the top management for better alignment of the process of implementation of the business objectives. In a large geographically dispersed organization like a bank, it is necessary to continuously get feedback from operating level as also to share the emerging agenda for change with the operating staff. During the year, a number of open houses for staff were addressed by me to seek, on the one hand, feedback about the emerging needs of customers in the post-CBS environment as also problems faced by the branches and, on the other, to share the concerns of the Bank with regard to business issues. These open houses provided deep insight into the problems at the operating level, which, in turn, helped in improving the internal processes.

Customers and Staff members of the Bank were also kept apprised of the progress and developments in respect of business performance and new initiatives taken, at periodic intervals. Areas of focus and areas of concern were regularly shared with the staff members through such communications.

HUMAN RESOURCES: KEY COMPETITIVE ADVANTAGE:

The Bank strongly believes that in a service industry like banking, it is only through people and their contributions that most of the objectives like continuous innovations in product offerings to various customer groups and servicing the rural poor can be achieved. In order to be able to meet the competition successfully in the coming years, the Bank would have to strengthen the human capital, besides financial &technology capital.

With a view to meet the HR challenge, the Bank has developed a Long Term HR Strategy Document for developing leadership at both operational as well as strategic levels. A Steering Committee of the Board on HR, headed by Chairman & Managing Director, with several eminent HR professionals as members, meets periodically to give suitable directions and monitor implementation of the HRAgenda of the Bank.

TECHNOLOGY: A KEY DIFFERENTIATOR:

• CBS Rollout: During the year, additional 917 branches were migrated to the Core Banking platform, taking the total of CBS branches to 1,043 spanning across 350 centres in 30 States and Union Territories in India. This rollout of 1,043 branches was achieved in a record time of 450 days. In addition to the domestic rollout, 11 branches in 4 countries UAE, Oman, Singapore and South Africa were brought on the CBS Platform. The CBS branches cover nearly 75% of the Bank's business today.
  
  
• Networking of Branches: 1,893 branches in India were fully networked as of 31st March 2007.
  Customers of CBS branches enjoy the benefits of Anytime Anywhere Banking. Multi City Cheque facility is also available to customers ofCBS branches.
  
  
• Internet Banking: The Bank launched “Baroda Connect” full-fledged Internet banking platform for both retail and corporate clients.
  
  
• ATM Network: Interconnected ATM network in India was expanded during the year reaching 1,000 mark.
  12 ATMs in UAE and Oman are being managed through centralized Switch in India.

FUTURE OF BANKING - SOME PERSPECTIVES:

I would now deal with some perspectives on Future of Banking.

Asia-Pacific Region: A recent study on the future of Banking in the Asia-Pacific Region by IBM spells out 5 key trends that will determine market success in the next decade.

• Customer-centric business strategy;
  
  
• Niche competitors;
  
  
• Anew workforce;
  
  
• Regulated Transparency; and
  
  
• Sharp Focus on Technology.

The study further suggests that emerging market changes will pose growing challenges for conventional banks. The scenario likely to emerge by 2015 would be dominated by global mega banks and densely populated by specialist financial services providers. Banks will also need special strategies to cater to a far more discerning and controlling customer. Technology will also drive fundamental changes in workforce disposition, which will have follow on effects for productivity, efficiency and profitability. These trends are already evident but in the coming years, there will be profound changes in the competitive forces of global banking.

One can also appreciate the phenomenon of globalization, both as a challenge as well as an opportunity. Integration of domestic market with international financial markets has been facilitated in the recent times by tremendous advancement in information and communication technology. There is a growing realization that the ability of countries to conduct business across national borders and the ability to cope with the possible downside risks would depend inter-alia on the soundness of the financial system. This has necessitated convergence of prudential norms with international best practices as well as consistent refinement of the technological and institutional framework in the financial sector through a non-descriptive and consultative process.

Indian Scene: I will turn to Indian scene. With the increasing levels of globalization of the Indian banking industry, evolution of universal banks and bundling of financial services, competition in the industry will only intensify further. The banking industry would need to harness its potential and ability to raise the standard of banking services. At the same time, the financial strength of individual banks is the first line of defence against financial risks. Strong capital positions in Balance Sheets place banks in a better position to deal with and absorb the economic shocks.

Another scenario suggests that the Indian banking sector will become intensely customer-centric, dominated by a few global mega banks and densely populated by smaller players catering to niche market segments. Just as foreign players are rushing to India, Indian banks too are sharpening their strategies for international expansion. As Indian companies break new grounds on the world map, it would become increasingly essential for Indian banks to follow these pilgrim-fathers and support them across the world. For this, Indian banks will have to develop skills and capabilities to support any multi-geographical presence. They have also to develop or acquire skills, involving people management, customer management, regulatory management and above all organizational management. HR capital will thus call for highest level of attention on the part of bank managements.

The scenario further suggests that customers will be open to new products and will demand flexibility in the way services are provided to them. Banks will have to use a variety of means to reach out to customers in a convenient and cost effective manner. Both Indian and foreign banks would increase penetration to rural and semi-urban areas through a combination of delivery channels. In rural and far flung areas, local shops and local bodies like Panchayats, NGOs, SHGs will emerge as key Bank's business agents rendering financial services for a commission.

I find it appropriate here to quote the extracts from a recent speech of our Hon'ble Prime Minister, Dr. Manmohan Singh: “….In an increasingly open and integrated world economy, commercial banks will need to develop an ability to respond to a wide range of expectations from customers, seeking different kinds of products and services. Depositors demand high level of transaction efficiency; borrowers look for prompt, adequate and innovative responses and finally regulators expect banks to manage growth and diversification in a prudent manner…….”

I will now deal with post-2009 scenario, when competition from foreign banks will be most intense with liberalization of foreign investments in banks in India and the entry of foreign players with their huge resources size. To remain, survive and thrive, Indian banks would have to respond in several ways in the form of continual development of business and banking solutions as opposed to standalone products. They will have to become more sophisticated in terms of branding they will have to understand when and how to leverage their brand and how to align customers' experiences and expectations with that brand.

Most vitally, banks will have to move towards greater cost efficiency. Part of this efficiency will emanate from more outsourcing. As interest rates directionally change its course, reduction of operating costs and focus on nonfunded sources of income will play a significant role in a bank's financial statement in the future post-2009. Technology and product innovation would have to contribute to lower transaction costs and increased fee incomes. Faced with human, technological and financial resource challenges, success of an Indian bank of 2009 will be marked by the ability of these banks to adapt to the pace of change and its ability to take correct decisions.

CHALLENGES OF TRANSFORMATION:

Your Bank has been on a transformation mode for the last few years. In FY 2006-07, the transformation agenda was given a big push. Technology-enabled Business Transformation Programme has now taken roots in the Bank, with the implementation of Core Banking Solution, expansion of e-Delivery Channels and launching of many electronic products. Alongside, the Bank embarked upon various business transformation initiatives like Retail Banking Model, SME Banking Model, Wholesale Banking Model, Wealth Management, etc. Systems, processes and structures related to Credit Operations were also reinvented, resulting in robust credit growth and improved response time. On the HR front, reskilling of employees, preparing 500 young Managers for the challenges of tomorrow, Management Education Programme for Branch Managers of metro/urban branches, Leadership Development initiatives for laying a pipeline for supply of 300 Business & Strategic Leaders, introduction of Performance Linked Incentive Schemes, fast track promotion channels for young and deserving officers, Centenary Year KHOJ-II, for harnessing the power of small ideas, were some of the major constituents of transformation agenda. To put it succinctly, the Bank has been implementing the transformation agenda on a holistic basis, encompassing people, processes, systems, structures and technology - all with a view to get closer to the customer and improve the response time. Bank's staff at all levels were associated in implementing the agenda.

Though the Bank has faced the challenges of transformation fairly successfully thus far, I am reminded of a 500 year old quote by Machiavelli on the challenges of transformation - “There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle than to initiate a new order of things. For, the reformer has enemies in all those who profit by the old order and only lukewarm defenders by all those who could profit by the new order. This lukewarmness arises from the incredulity (skepticism) of mankind who do not truly believe in anything new until they have had actual experience with it.”

THE ROAD AHEAD: CREATING A BANK OF THE FUTURE:

I and my management team are conscious of what we have inherited. We are also conscious that we are the gatekeepers of the Bank's unblemished past. We believe that our generation is fortunate to be part of the Centenary Year Celebrations and have a duty and responsibility to architect the Bank of the next Century. We also have a duty to catapult the Bank into the top league and join the global banking community. We are putting together a concrete agenda to pursue this goal through global best practices, modern technology, reskilling of employees, reaching out to chosen markets, innovating new business models etc. Over 100 branches of the Bank under Core Banking Solution will be positioned as “Branches of the Future”.

BANK'S CENTENARY YEAR:

Your Bank would be entering the Centenary Year on 20 July, 2007. This is a moment of great joy and celebration for all stakeholders of Bank of Baroda. We plan to organize many events / projects throughout the year at the local, national and international levels to mark the occasion.

At this historic moment, we are not only inspired by the enormous contributions of yesteryear leaders including the visionary founder Maharaja Sir Sayajirao Gaekwad-III of Baroda, who steered the Bank through all times and took the Bank to the premier status that it enjoys today but we have the formidable challenge to architect the Bank for the next century. We are now laying a strong foundation for this. I believe, this is possibly the best way to pay tribute to our visionary founder, on the eve of the Centenary Year.

AWARDS & ACCOLADES CONFERRED ON THE BANK:

CMD receiving SKOCH Challenger Award for Change Management from Dr. C.Rangarajan.

You will be happy to know that the Bank was conferred several awards for excellence in various areas Marketing and Brand Communication, HR, Change Management, Leadership, etc. by various external reputed organizations.

WORLD RANKING OF THE BANK:

I am delighted to share the latest ranking of your Bank received among the World's Top 1000 Banks in The Banker Magazine, London. In 2007, the Bank's rank leapt up to 258 from 416 the previous year a phenomenal 158 places jump.

CORPORATE GOVERNANCE:

Your Bank's commitment to strong values and business ethics, coupled with its article of faith to augment shareholder value, is at the core of its Corporate Governance Policy. The Bank believes that good governance is not just ruledriven, but involves voluntary adoption of international best practices. This is done in the Bank through ensuring compliance of all statutory and regulatory requirements, transparency in corporate disclosures, high quality of accounting practices and adhering to the best level of business ethics.

ACKNOWLEDGMENT:

Our shareholders have been our partners in progress. They have continued to repose their trust and confidence in the Bank. The Bank is committed to work for augmenting shareholder value.

In our quest to become a customer-centric Bank and in our journey towards excellence in banking services, our customers, patrons and well-wishers around the globe have stood by us all through. We are grateful for their continued patronage and encouragement.

In the rapidly changing banking environment and in the ever-evolving uncertainties, success in any business endeavour can be achieved only with a highly committed, dedicated and competent work force. The Bank's staff, across cadres, had actively participated during the year in the Bank's business transformation and technology initiatives, with great enthusiasm and passion. The Bank is fortunate to be blessed with such a work force.

The Board of Directors places on record their appreciation for the continued support and patronage of shareholders, customers and well-wishers in India and abroad.

The Board is also thankful to the Government of India, RBI, SEBI, other regulatory authorities, various financial institutions, banks and correspondents in India and abroad, regulatory authorities in various countries in which the Bank operates, for their support and guidance to the Bank from time to time.

In the end, I would like to thank the shareholders for their large turnout and for their continued interest in Bank of Baroda.

Thank you again,

(DR. ANIL K. KHANDELWAL)
Chairman & Managing Director