Mar '06

Mar '07 Mar '08 Mar '09 Mar '10

Investment Valuation RatiosFace Value 10.00 10.00 10.00 10.00 10.00Dividend Per Share 3.50 4.00 4.00 5.00 5.00Operating Profit Per Share (Rs) 30.82 48.04 23.99 38.41 42.74Net Operating Profit Per Share (Rs) 180.58 229.85 157.25 206.51 235.82Free Reserves Per Share (Rs) 65.49 80.81 168.04 180.00 192.25Bonus in Equity Capital 51.09 51.09 25.57 25.57 25.57Profitability RatiosInterest Spread 4.84 5.01 4.79 6.31 5.21Adjusted Cash Margin(%) 15.05 15.02 13.80 14.25 11.95Net Profit Margin 13.64 13.91 12.78 13.14 10.79Return on Long Term Fund(%) 89.71 99.01 55.12 65.47 65.91Return on Net Worth(%) 22.99 19.57 9.39 11.58 9.91Adjusted Return on Net Worth(%) 17.92 19.52 9.39 11.57 9.90Return on Assets Excluding Revaluations

1.09 174.71 229.16 252.57 273.90

Return on Assets Including Revaluations

1.09 175.48 229.53 252.93 274.24

Management Efficiency RatiosInterest Income / Total Funds 8.26 8.61 9.34 9.90 9.78Net Interest Income / Total Funds 3.79 3.86 3.62 4.29 4.29Non Interest Income / Total Funds 0.56 0.59 0.66 0.77 0.65Interest Expended / Total Funds 4.47 4.75 5.72 5.61 5.48Operating Expense / Total Funds 2.38 2.06 2.19 2.45 2.52Profit Before Provisions / Total Funds 1.83 2.29 1.98 2.49 2.30Net Profit / Total Funds 1.20 1.28 1.28 1.40 1.13Loans Turnover 0.15 0.15 0.16 0.17 0.16Total Income / Capital Employed(%) 8.82 9.20 10.00 10.67 10.43Interest Expended / Capital Employed(%)

4.47 4.75 5.72 5.61 5.48

Total Assets Turnover Ratios 0.08 0.09 0.09 0.10 0.10Asset Turnover Ratio 4.67 5.42 6.19 6.84 7.21Profit And Loss Account RatiosInterest Expended / Interest Earned 58.25 59.70 65.49 60.32 61.59Other Income / Total Income 6.37 6.45 6.58 7.23 6.24Operating Expense / Total Income 26.97 22.41 21.94 22.99 24.17Selling Distribution Cost Composition 0.18 0.19 0.28 0.23 0.25Balance Sheet RatiosCapital Adequacy Ratio 13.75 13.43 22.46 20.22 18.36Advances / Loans Funds(%) 69.31 72.96 77.07 75.07 76.40Debt Coverage RatiosCredit Deposit Ratio 62.17 67.49 71.17 71.06 72.29

Investment Deposit Ratio 36.50 33.72 35.92 38.11 36.88Cash Deposit Ratio 5.76 6.20 7.55 7.86 6.64Total Debt to Owners Fund 14.38 14.43 6.61 7.45 7.70Financial Charges Coverage Ratio 1.44 0.50 0.36 0.47 0.44Financial Charges Coverage Ratio Post Tax

1.30 1.29 1.24 1.27 1.23

Leverage RatiosCurrent Ratio 0.03 0.03 0.02 0.02 0.02Quick Ratio 14.98 13.62 11.65 15.99 21.68Cash Flow Indicator RatiosDividend Payout Ratio Net Profit 15.16 13.68 21.74 19.99 21.46Dividend Payout Ratio Cash Profit 13.61 12.64 20.14 18.41 19.37Earning Retention Ratio 84.67 86.29 78.26 79.99 78.52Cash Earning Retention Ratio 86.26 87.33 79.86 81.57 80.62Adjusted Cash Flow Times 71.94 68.31 65.22 59.32 70.11

Mar '06

Mar '07 Mar '08 Mar '09 Mar '10

Earnings Per Share 26.31 34.20 21.52 29.26 27.16Book Value 145.19 174.71 229.16 252.57 273.9

Directors Report Year End : Mar '10 The Directors take great pleasure in presenting the 79th Annual Report on the business and operations of your Bank together with the audited accounts for the year ended March 31, 2010. FINANCIAL PERFORMANCE The financial highlights of your Bank for the financial year 2009-10 are given below: Rs. in crore For the year ended Financial Parameters March 31,2010 March 31, 2009 Net Interest Income 1410.83 1,315.46 Fee and Other Income 530.91 515.77 Net Revenue 1941.74 1,831.23 Operating Expenses 676.89 571.45 Profit before Depreciation and Tax 909.73 835.85 Net Profit 464.55 500.49 Profit Brought Forward 21.93 14.62 Total Profit Available for Appropriation486.48 515.11 Appropriations: Transfer to Statutory Reserves 116.14 125.12 Transfer to Revenue Reserves 208.27 197.25 Transfer to Capital Reserves 8.20 29.75 Transfer to Special Reserves 31.00 11.00 Transfer to Investment Fluctuation Reserve 0.00 0.00 Transfer to Contingency Reserve 0.00 30.00 Proposed Dividend 85.52 85.52 Provision for Dividend Tax 14.21 14.54 Balance Carried Over to Balance Sheet 23.14 21.93 Financial Position:

Deposits 36057.95 32,198.19 Advances 26950.11 22,391.88 Total Business (Deposits + Advances) 63008.06 54,590.07 Other Borrowings 1546.76 748.94 Investments 13054.65 12,118.97 Total Assets (Balance Sheet Size) 43675.61 38,850.86 Capital 171.03 171.03 Ratios: Return on Total Assets (%) 1.15 1.48 Return on Equity (%) 10.30 12.13 Earnings Per Share (Rs.) 27.16 29.26 Book Value Per Share (Rs.) 274.24 252.93 Operating Cost to Income (%) 34.86 31.21 Capital Adequacy Ratio (%) 17.27 20.14 Considering the economic slowdown and the risks in going for exponential growth, your Bank had opted for a consolidation phase. But at the same time, the Bank used the opportunity for reaching out to new areas through Branch expansion, putting up of new ATMs and to improve and enhance various channels. Strategic investments were also made to enhance the shareholder value . OPERATING PROFIT Operating Profit registered a small growth from Rs.l, 259.78 crore to reach Rs. 1,264.85 crore. The liquidity overhang throughout the period under review affected the growth of operating profit. There was an increase in net interest income from Rs.l, 315.46 crore to Rs. 1,410.83 crore and the non-interest income has gone up from Rs.515.77 crore to Rs. 530.91 crore. INCOME GROWTH The interest/discount income from advances has gone up from Rs.2564.25 crore to Rs.2, 849.73 crore. In spite of the uncertainties prevailed in the economy, the Bank could create select good quality earning assets. Bank continued to enjoy a decent interest spread (4.75%) on advances. Based on the increase in interest income, total income has gone up from Rs.3831.15 crore to Rs.4204.14 crore registering a growth of 9.74%. Income from advances as percentage to total income was 67.78%. Income from investments recorded an increase of Rs. 118.86 crore and touched Rs.894.90 crore. Cumulative income from advances and investments recorded a growth of 11.92% and stood at Rs. 3,744.63 crore

against Rs. 3,345.79 crore of the previous year. Yield on advances moved in tandem with the market movement of interest rates and decreased by 100 bps to 11.30%. Return on advances plus investments decreased to 10.20%% from 11 %. As a result of the adverse movement in the yield on advances, the net interest margin declined from 4.28% to 3.82% , still one of the best in the industry. The growth in other income was marginal with a growth of 2.93%from a level of Rs.515.77 crore to Rs.530.91 crore. Recovery from written off accounts contributed Rs.l 27.70 crore as against Rs.l 32.77 crore during the last financial year. The net revenue, that is the net interest income plus other income, of the Bank increased by Rs. 110.51 crore fromRs. 1,831.23 crore as on March 31, 2009 to Rs. 1,941.74 crore. EXPENDITURE The Bank embarked upon organic expansion adding 60 branches and 115 ATMs. Total expenses for the financial year 2009-10 increased from Rs. 2,571.37 crore, to Rs. 2,939.29 crore registering an increase of 14.31 %. Interest expenses increased from Rs. 1,999.92 crore in FY 09 to Rs. 2,262.40 crore in FY 10. Cost of all funds (deposits plus borrowings plus bonds) decreased to 6.62% from 7.08% of last financial year. Cost of deposits witnessed a downward trend and has fallen by 43 bps to 6.55% from last years 6.98%. The Bank was conscious in shedding bulk deposits and concentrated on retail deposits. Interest rates did not show large movements during the last financial year. Operating expenses increased by Rs. 105.44 crore and amounted to Rs, 676.89 crore. Employee costs came to Rs.366.05 crore during the year compared to last years figure of Rs. 317.45 crore. Other operating expenses came to Rs. 310.84 crore. Employee costs as percentage to total income has gone up from 8.29% for the year ended March 31, 2009 to 8.71% for the year ended March 31, 2010. Cost to income ratio is 34.86% (31.21% % in FY 2008-09) which is still one of the best in the industry. This figure is maintained even after the spurt in recruitment during the last 2 financial years and increase in other operating expenses including expenses for technological advancement. NET PROFIT The net profit for the year after making all provisions, was Rs.464.55 crore as on March 31,2010 as against Rs. 500.49 crore showing a marginal decrease of 7.18%. Total provisions amounted to Rs. 800.30 crore, excluding Income Tax provisions amounting to Rs.395 crore. The profit margin decreased from 13.07% to 11.05%. Return on average equity stood at 10.30%. Earnings per share was at Rs.27.16 and the return on average total assets at 1.15%. Book value increased from Rs.252.93 as on March 31, 2009 to Rs.274.24 as of March 31, 2010. DIVIDEND The Bank has been consistently rewarding shareholders through cash pay outs after taking into account the requirement for ploughing back of profits to support growth. Retained profits add impetus for the future growth and enhance the value of the stake of the shareholders. In view

of the satisfactory performance, the Board of Directors recommends a dividend of 50% on the paid up capital of the Bank which is the same percentage as that of last financial year. GROWTH IN BUSINESS Attracting new customers and further enhancing relationships with the existing customers were the cornerstones of the business philosophy of the Bank. New products were introduced taking into account the customer preferences. The policy of the Bank is to enter new geographies to enhance visibility of the Bank. Tiered Current and Savings Bank account products have started attracting customer interest. Most of the back office functions were centralised to take advantage of volume as well as expertise. Deposits grew to Rs.36057.95 crore clocking 11.99% growth. The Bank had assiduously avoided bulk deposits and hence the fall in growth rate of deposits. However, average deposits have shown a decent growth of 23.33%. Advances registered 20.36% growth touching a figure of Rs.26, 950.11 crore. Savings Bank deposits has grown from a base of Rs.6, 445.84 crore to Rs.7, 611.13 crore. The NRI deposits of the Bank stood at Rs. 7,350.71 crore. Investments grew to Rs. 13054.65 crore from Rs.12,118.97 crore. The size of the balance sheet for the year grew to Rs. 43,675.61 crore from Rs. 38,850.86 crore. LOAN ASSET QUALITY Loan delinquencies were higher during the year which was a fall out of the economic recession. Gross NPA as on March 31, 2010 stood at Rs.820.97 crore as against Rs.589.54 crore in the previous year. Gross NPAs as percentage to Gross Advance is 2.97% as against 2. 57 % in the previous year. Net NPAs stood at Rs. 128.79 crore (0.48% of Net Advances) as against Rs. 68.12 crore (0.30% of Net advances) in the previous financial year. The Bank has initiated various measures to contain the NPA. Maximum thrust is given for recovery through SARFAESI Act. Proceedings and settlements are reached through compromise with a humanitarian approach. Services of Recovery Officers/Agents are used strictly adhering to Codes of Conduct prescribed by RBI. During the financial year 132 recovery camps and 14 Lok Adalaths were held at different centres and the results were overwhelming. A Mega Adalath was held exclusively for the Bank, which was inaugurated by the acting Chief Justice of Kerala. As on 31.03.2010, the Bank held a total provision of Rs 684.43 crore. This includes a Floating Provision of Rs.l 79.52 crore. The total provision coverage for NPAs as on March 31, 2010 is 83.37 %. As per the extant RBI directive, banks should achieve provision coverage of 70 % (by Sept. 2010) including technically written off accounts. As on 31st March 2010, Provision Coverage Ratio of your bank including technically written off accounts is 91.82%. EXPANSION OF NETWORK During the financial year, the Bank opened 60 new branches and 115 new ATM centres. As on March 31, 2010, the total number of branches and ATM centres of the Bank increased to 672 and 732 respectively, as against 612 and 617 of last financial year.

CAPITAL ADEQUACY The Capital to Risk-weighted Assets Ratio (CRAR) as per BASEL I as on March 31, 2010 stood at 17.27%. As per BASEL II CRAR came to 18.36%. As per RBI guidelines lower of the above two shall be reckoned and accordingly CRAR is 17.27%. Tier-1 CRAR (core CRAR) was 15.27%. BUSINESS PRODUCTIVITY The business per average employee increased to Rs. 8.13 crore as against Rs.7.50 crore of the fast financial year. Profit per employee stood at Rs. 6.01 lakh on an enhanced workforce. EXTERNAL RATING The certificate of deposit and short term fixed deposits (with a contracted maturity upto one year) of the bank are rated PI + by Crisil. Tier II subordinated debts issued by the bank aggregating to Rs.320 crore is rated CARE AA by Care and AA - (Ind) by Fitch. CORPORATE GOVERNANCE Your Bank is committed to achieving highest levels of ethical standards, professional integrity, corporate governance and regulatory compliance. The corporate governance practices followed by the Bank are given in the annexure. BOARD OF DIRECTORS The Board consists of nine members as on 31 March 2010, including Managing Director and Chief Executive Officer and two Executive Directors (whole time directors). All other members of the Board are Non-Executive & Independent Directors. Shri. M. Venugopalan, Managing Director & Chief Executive Officer has laid down the office on July 31, 2010 after being at the helm of affairs for 63 months. He was Chairman & Chief Executive Officer of the Bank from May 01, 2005 to July 30, 2008. Pursuant to the implementation of the Dr.Ganguly Committee recommendations on Corporate Governance, he was designated as Managing Director & Chief Executive Officer from July 31, 2008. Shri. M. Venugopalan made significant contribution towards the development, growth and visibility of the Bank. He could successfully position the Bank with capital and bring in strategic structural and technological changes to remain agile to meet todays competition. The Board acknowledges his valuable services. The Board has appointed Shri. Shyam Srinivasan, as the MD & CEO of the Bank on the retirement of Shri. M. Venugopalan. RBI has also accorded their approval vide letter DBOD No: 1785/08.38.001/2010-11 July 29, 2010 for the appointment of Shri. Shyam Srinivasan, Shri. P. R. Kalyanaraman has taken charge of the office of MD and CEO from 31st July, 2010, as an interim arrangement as approved by RBI (Shri P. R. Kalyanaraman has been designated as MD & CEO in charge during the interim period,) and will work subject to the overall control of the Board, until Shri. Shyam Srinivasan, the new MD & CEO

designate assumes office. Prof. A.M. Salim retired from the Board on August 22, 2009 after rendering 8 years of valuable service in the Board. The Board extends its appreciation to the meritorious services of Prof. Salim as a member of the Board of the Bank. Executive Director, Shri. K. S. Harshan retired from the Bank after completing a five year tenure in the Bank, out of which three years as a member of the Board, The Board acknowledges his valuable services. Shri. P C Cyriac and Prof. Abraham Koshy are due to retire by rotation at the forthcoming Annual General Meeting (AGM), as per the Articles of Association of the Bank, our Code of Corporate Governance and the provisions of the Companies Act, 1956, Shri. P C Cyriac and Prof. Abraham Koshy being eligible, offer themselves for re-appointment. Shri P Surendra Pai is retiring at the forthcoming AGM, after completing his term of appointment of three years as approved by the Board at the time of his initial appointment and is not offering himself for re-appointment. The Board records its appreciation of the valuable services of Shri P Surendra Pai as a member of the Board of the Bank. A shareholder of the Bank has expressed his intention to propose Dr.T.C.Nair as a candidate for the office of directorship in this vacancy and has given notice in writing along with deposit of Rs.500/- in terms of Sec.257 of the Companies Act, 1956. The Board also co-opted Shri. P.C. John as Executive Director from 1st May 2010 and RBI approval has been received vide letter DBOD No: 21949/08.38.001/2009-10 dated June 24, 2010. SUBSIDIARY Fedbank Financial Services Ltd. is a fully owned subsidiary of the Bank. As required under Section 212 of the Companies Act, 1956, the financial statements relating to this company, the sole subsidiary of the Bank, for FY10 are attached. ANNUAL FINANCIAL STATEMENTS AND AUDIT REPORT As required by section 212 of the Companies Act, 1956, the Banks balance sheet as on 31 March 2010, its profit and loss account for FY10, and the statutory auditors report and statements required under the section, are attached. STATUTORY AUDIT M/s. Varma & Varma, Chartered Accountants, Kochi, and M/s. Price Patt & Co., Chartered Accountants, Chennai, jointly carried out the statutory central audit of the Bank. The statutory central/branch auditors audited all the branches and other offices of the Bank. Special Reserve created under section 36(l)(viii) of the Income Tax Act 1961.

As per section 36(1 )(viii) of the Income tax Act, 1961, deduction is available for any Special Reserve created and maintained to the extent of 20% of the profit derived from the business of providing long term finance for industrial or agricultural development or development of infrastructure facility or housing in India. Because of Banks term lending for housing, power, bridges, roads and other segments of infrastructure in the last year and the availability of the tax benefit under the section 36(l)(viii) of the Income tax Act, the Bank has created a Special Reserve of Rs.31crore during this year (previous year Rs.l 1 Crore), being the eligible amount of deduction available under the said section. JOINT VENTURE IN LIFE INSURANCE BUSINESS The Banks joint venture Life Insurance Company, in association with IDBI Bank Limited and Fortis Insurance International N.V., namely IDBI Fortis Life Insurance Company Limited commenced its operation in March 2008. The Bank has infused Rs. 117 crore as its share of capital into this company holding 26% of the equity capital of the company. The performance of this Life Insurance Company is encouraging and it has a range of customer-centric products. AWARDS RECEIVED DURING THE YEAR - Most Efficient Bank in India in the large bank category by Business Today - KPMG survey - Federal Bank was adjudged, as the best bank among the Old Private Sector Banks category in the survey conducted by the Financial Express in association with Ernst & Young. - Federal Bank has won the Great Mind Challenge award for implementing the most innovative solution for business. This award was introduced by IBM for the first time in India for business development initiatives. Federal Bank is the first Bank in India to receive the award - Ranked 8th among all banks in India, in a study conducted by Economic Times under four parameters of growth, efficiency, financial strength and shareholder returns. Of these, our Bank was ranked No. 1 in Efficiency and Financial Strength. STATUTORY DISCLOSURE STOCK EXCHANGE INFORMATION The Banks equity shares are listed on: 1. Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers Dalai Street, Mumbai - 400 001. 2. National Stock Exchange Ltd. Exchange Plaza Bandra - Kurla Complex Bandra East, Mumbai-400 051. 3. Cochin Stock Exchange Ltd. MES, DrPK Abdul Gafoor Memorial Cultural Complex 4th Fl, 36/1565, Judges Avenue, Kaloor, Kochi - 682

017.

The GDRs issued by the Bank are listed on the London Stock Exchange. The annual listing fees have been paid to all the Stock Exchanges listed above. The requirement of disclosure of steps taken for conservation of energy and technology absorption does not apply to the Bank. Through its export-financing operations, the Bank supports and encourages the countrys export efforts. The requirement of disclosure under section 217(2A) of the Companies Act, 1956, is given as a separate annexure. PERSONNEL As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the Annexure to the Directors Report. DIRECTORS RESPONSIBILITY STATEMENT As required by section 21 7(2AA) of the Companies Act, 1956, the Directors state that: a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for that period; c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities; and d. the Directors have prepared the annual accounts on a going-concern basis. Acknowledgement The Board of Directors places on record its sincere thanks to Government of India, Reserve Bank of India, various State Governments and regulatory authorities in India and overseas for their valuable guidance, support and co-operation. The Directors also place on record the gratitude to investment banks, rating agencies and stock exchanges for their excellent support. Your Directors record their sincere gratitude to the Banks shareholders, esteemed customers and all other well-wishers for their

continued patronage. The Directors express their appreciation for the contributions from every employee of the Bank. For and on behalf of the Board of Directors Aluva P.C. Cyriac August 6, 2010 Chairman of the Board

Competition

Last Price Market Cap.(Rs. cr.)

Net InterestIncome

Net Profit Total Assets

ICICI Bank 1,006.15 115,885.58 25,974.05 5,151.38 363,399.71HDFC Bank 2,254.95 104,906.07 19,928.21 3,926.39 222,458.56Axis Bank 1,180.00 48,487.32 15,154.81 3,388.49 242,713.37Kotak Mahindra 421.40 31,051.77 4,303.56 818.18 37,436.31IndusInd Bank 245.50 11,439.56 3,589.36 577.32 35,369.52YES BANK 283.95 9,857.24 4,041.74 727.13 36,382.50Federal Bank 420.00 7,180.52 4,052.03 587.08 43,675.61Karur Vysya 407.75 4,350.44 2,217.69 415.59 21,993.49ING Vysya Bank 324.25 3,922.99 2,694.06 318.65 33,880.24JK Bank 790.50 3,832.17 3,713.13 615.20 42,546.80

Balance Sheet of Federal Bank

------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:Total Share Capital 85.60 85.60 171.03 171.03 171.03Equity Share Capital 85.60 85.60 171.03 171.03 171.03Share Application Money 0.00 0.00 0.00 0.00 0.00Preference Share Capital 0.00 0.00 0.00 0.00 0.00Reserves 1,157.30 1,409.98 3,748.30 4,148.74 4,513.55Revaluation Reserves 7.08 6.63 6.36 6.11 5.86Net Worth 1,249.98 1,502.21 3,925.69 4,325.88 4,690.44

Deposits17,878.7

421,584.44 25,913.36 32,198.19 36,057.95

Borrowings 610.49 770.21 791.95 748.94 1,546.76

Total Debt18,489.2

322,354.65 26,705.31 32,947.13 37,604.71

Other Liabilities & Provisions 903.69 1,233.08 1,875.45 1,577.86 1,380.45

Total Liabilities20,642.9

025,089.94 32,506.45 38,850.87 43,675.60

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

AssetsCash & Balances with RBI 1,214.59 1,231.54 2,355.69 2,214.40 2,318.88Balance with Banks, Money at Call 657.91 1,081.60 389.79 1,222.70 404.51

Advances11,736.4

714,899.10 18,904.66 22,391.88 26,950.11

Investments 6,272.38 7,032.66 10,026.59 12,118.97 13,054.65Gross Block 330.78 362.71 434.75 516.40 559.26Accumulated Depreciation 156.91 176.61 201.91 235.62 269.49Net Block 173.87 186.10 232.84 280.78 289.77Capital Work In Progress 0.00 0.00 0.00 0.00 0.00Other Assets 587.70 658.93 596.87 622.15 657.69

Total Assets20,642.9

225,089.93 32,506.44 38,850.88 43,675.61

Contingent Liabilities 7,834.42 5,005.69 5,632.10 6,239.48 8,424.89Bills for collection 9,145.27 8,479.74 8,500.40 2,137.62 2,160.83Book Value (Rs) 145.19 174.71 229.16 252.57 273.90

Auditor's Report (Federal Bank) Year End : Mar '10 1. We have audited the attached Balance Sheet of FEDBANK FINANCIAL SERVICES LIMITED as at 31st March, 2010, Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards

generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (hereinafter referred to as the Act), we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable. 4. Further to our comments in the Annexure referred to in paragraph 3 above, 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 purposes of our audit; b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books; c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the accounting standards referred to in Section 211 (3C) of the Act, to the extent applicable; e. On the basis of the written representation received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director of the Company under Section 274(1 )(g) of the Act; f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Principal Accounting Policies and Notes of Accounts in Schedule 9 and other notes appearing elsewhere in the accounts, give the information required by the Act in the manner so required 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 Company as at 31 st March, 2010 and ii) in the case of the Profit & Loss Account, of the profit for the year ended as on that date. iii) in the case of the Cash Flow Statement, of the cash flow of the company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR AUDIT REPORT OF EVEN DATE On the basis of such checks as were considered appropriate and according to the information and explanations given to us during the course of audit, we state that: 1. (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets; (b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed in such verification, and the same has been properly dealt with in the books of accounts; (c) No fixed assets have been disposed off during the year. 2. The company has no inventories. 3. The Company has not taken / granted any loans from/to companies, firms and other parties covered under Section 301 of the Act. 4. The Company has adequate internal control system commensurate with the size of the company, and the nature of its business, for the purchase of fixed assets, and for sale of services. We have not observed any major weaknesses in the internal control system. 5. The Company has not entered into any contracts or arrangements referred to in section 301 of the Act. 6. The Company has not accepted any deposits during the year. 7. The Company has an internal audit system commensurate with the size and nature of its business. 8. Maintenance of cost records is not prescribed by the Central Government in respect of the activities of the company. 9. (a) According to the information and explanations given to us, the company is generally regular in depositing undisputed amounts payable in respect of income-tax, wealth tax, sales tax, customs duty, service tax, excise duty, cess and other statutory dues. No undisputed amounts payable in respect of above were outstanding as at 31.3.2010 for a period of more than six months from the date they become payable. (b) According to the records of the company, there are no dues of sales tax, income-tax, customs duty, wealth tax, excise duty, service tax and cess which have not been deposited on account of any dispute. 10. The Company has no accumulated losses as at 31st March 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. 11. The company has not borrowed any money from financial institutions or banks or debenture holders. 12. The company has not granted any loans and advances on the basis of

security, by way of pledge of shares, debentures and other securities. 13. The company is not a chit fund, Nidhi, or a mutual benefit society. 14. The company is not dealing in shares, securities, debentures and other investments. 15. The company has not given any guarantee for loans taken by others. 16. The company has not taken any term loans. 17. No funds have been raised on short term basis. 18. The company has not made any preferential allotment of shares. 19. No debentures have been issued. 20. Company has not raised any money by way of public issue. 21. During the course of our examination of the books and records for the Company, carried out in accordance with the generally accepted audit practices in India, and according to the information and explanation given to us, we have not come across any instances of fraud on or by the Company, noticed or reported during the year. For R KRISHNA IYER & CO. CHARTERED ACCOUNTANTS R KRISHNA IYER Kochi PARTNER 13.05.2009 (Membership No. 10525) Firm Registratio n No. 14745

Notes to Accounts Year End : Mar '10 1. Reconciliation The reconciliation of outstanding entries in inter branch/office transactions as on 31st March 2010 has been substantially completed and the effect, if any, of pending entries will not be material. 2.2 Investments 2.2.1a) Investments under HTM (excluding specified investments as per RBI norms) account for 22.76% of demand and time liabilities as at the end of March 2010 as against permitted ceiling of 25% stipulated by RBI. b) In respect of securities held under HTM category premium of Rs.23.93 crore (previous year Rs. 17.35 crore) has been amortised during the year and debited under interest received on government securities. c) Profit on sale of securities from HTM category amounting to Rs.

16.58 crore (previous year Rs.60.08 crore) has been taken to Profit and Loss Account and a sum of Rs.8.20 crore (previous year Rs.29.75 crore) being net of taxes and transferto statutory reserve of such profit, appropriated to Capital Reserve. 2.3.3 Disclosure on Risk exposure in Derivatives Qualitative Disclosures Structure, organization, scope and nature of management of risk in derivatives etc The organizational structure consists of Treasury Department which is segregated into three functional areas, ie, front office, mid office and back office. Derivative deals are executed for hedging and market making. The risk in the derivatives is monitored by regularly assessing Marked to Market Position (MTM) of the entire portfolio and the impact on account of the probable market movements. Various risk limits have been put in place under different segments of the derivatives, as approved by Board, he risk profile of the outstanding portfolio is reviewed by Board at regular intervals. For own balance sheet management, hedging policies are devised to mitigate risks; lower borrowing costs and enhance yields. The current outstanding under the derivatives portfolio were executed for trading only. Accounting: Board Approved Accounting Policies as per RBI guidelines have been adopted. The hedge swaps are accounted for like a hedge of the asset or liability. The hedge swaps are accounted on accrual basis except where swaps for hedging marked to market asset/liability. Such hedge swaps are marked to market on a monthly basis and the gain/losses are recorded as an adjustment to the designated asset/liability. The Non hedge swaps are marked to market every month and the MTM losses in the basket are accounted in the books while MTM profits are ignored. Collateral Security: As per market practice, no collateral security is insisted on for the contracts with counter parties like Banks/PDs etc. For deals with Corporate Clients, appropriate collateral security/margin etc. are stipulated wherever considered necessary. Credit Risk Mitigation: Most of the deals have been contracted with Banks/ Major PDs and no default risk is anticipated on the deals with them. In the case of deals with corporate clients, the outstanding positions are closely monitored for the default risks and appropriate measures are initiated. 2.7.4 Details of Overseas Assets, NPAs and Revenue Nil 2.7.5 Off balance Sheet SPV sponsored

Nil 2.7.6 Country Risk (As compiled by the Management) The net funded exposure of the Bank in respect of foreign exchange transactions with each country is within 1% of the total assets of the Bank and hence no provision is required to be made in respect of country risk as per the RBI circular DBOD.BP.BC.96/21.04.103/2003-04 dated 17 June 2004. 2.7.7 Details of Single Borrower limit (SGL), Group Borrower Limit (GBL) where the bank has exceeded the prudential exposure during the year. Nil 2.8.2 Details of penalties imposed by RBI under the provision of Section 46 (4) of BR Act, 1949 Nil 3. Fixed Assets i. During the year 1995-96, the appreciation of Rs 9.65 crore in the value of land and buildings consequent upon revaluation by approved valuers was credited to Capital Reserve. Depreciation for the year on the net addition to value on such revaluation of assets at Rs 0.24 crore (previous year Rs 0.26 crore) has been transferred from Capital Reserve to Profit & Loss Account. There has been no revaluation of assets during this year. ii. Land and premises include flats Rs.0.37 crore (previous year Rs.0.37 crore), written down value Rs. 0.21 crore (previous year Rs.0.21 crore), taken possession of and being used by the Bank, for which documentation/registration formalities are to be completed. iii. Safe & Furniture includes cost of software relating to Core Banking solution of Rs.l 5.26 crore (Previous year Rs.l 5.26 crore) with written down value of Rsl. 68 crore (previous year Rs.6.04 crore) 4. Pending finalisation of wage agreement a provision of Rs.60.00 crore (previous year Rs 61 crore) has been made towards the revision in employee costs and other benefits on the basis of the estimate of the management. Impact of exercisable pension option is not ascertainable as at the close of the financial year. 5. The Bank has implemented Agricultural Debt waiver and Debt Relief Scheme 2008 notified by the Government of India. In accordance with the scheme a final claim of Rs.l05.70 crores has been preferred with RBI, against which the Bank has received the 3 installments amounting to Rs.68.44 crores and the balance amount due is included under advances. Further an amount of Rs. 18.80 crore has been subjected to debt relief receivable from Government included under other assets. 6. Disclosure in terms of Accounting Standard 6.1 There is no material prior period income/expenditure requiring disclosure under AS 5 Net Profit or Loss for the Period, Prior period items and changes in Accounting policies issued by the Institute of Chartered Accountants of India.

6.2 Employee Benefits (AS 15) (a) Defined Contribution Plan Provident Fund Eligible employees (employees not opted for pension plan) receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Bank make monthly contributions to the Federal Bank Employees Provident Fund equal to a specified percentage of the covered employees salary. The Bank has no other obligation than the monthly contribution. The Bank recognized Rs.6.44 Crore (Previous year Rs.6.99Crore) for provident fund contribution in the Profit and Loss account. (b) Defined benefit plan 1) Gratuity The Bank provides for gratuity, a defined benefit retirement plan (the Gratuity Plan) covering eligible employee. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment. Vesting occurs upon completion of five years of service as per Payment of Gratuity Act, 1972 or as per the provisions of the Federal Bank Employees Gratuity Trust Fund Rules/Award. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the Balance Sheet date, based upon which, the company contributes all the ascertained liabilities to the Federal Bank Employees Gratuity Trust Fund (the Trust). Trustees administer contributions made to the Trust and contributions are invested in specific investments as permitted by law. 2) Superannuation / Pension The Bank provides for monthly pension, a defined benefit retirement plan (the pension plan) covering eligible employees. The pension plan provides a monthly pension after retirement of the employees till death and to the family after the death of the pensioner. The monthly pension is based on the respective employees salary and the tenure of employment. Vesting occurs upon completion of ten years of service. The bank pays the monthly pension by purchasing annuities from Life Insurance Corporation of India (LIC). Liabilities with regard to the pension plan are determined by actuarial valuation as of the Balance Sheet date, based upon which, the company contributes all the ascertained liabilities to the Federal Bank (Employees) Pension Fund (the Trust). Trustees administer contributions made to the Trust and contributions are invested in specific investments as permitted by law. 6.4 Related Party Disclosures The following are the significant transactions with related parties during the year ended 31 March 2010

Name of the Party Nature of Relationship IDBI Fortis Life Insurance Company Limited Associate/Joint Venture Fed Bank Financial Services Limited Subsidiary Shri. M Venugopalan Key Management Personnel Shri. K S Harshan Key Management Personnel Shri. P R Kalyanaraman Key Management Personnel 6.6 Taxation (AS 22) i. Other Assets include Rs. 95.11 crore (previous Year Rs 0.34 crore) paid/adjusted towards disputed income tax demand aggregating to Rs. 298.77 crore. In the opinion of the Bank no provision is considered necessary in respect of the above disputed demand in view of various judicial decisions and the same has been disclosed as contingent liability. ii. The Bank has accounted for income tax in compliance with ICAIs Accounting Standard 22. Accordingly, timing differences resulting in deferred tax assets and deferred tax liabilities are recognised. The major components of deferred tax liabilities and assets as on 31 March 2010 are shown below: 7.4.1 There are no dues to micro and smali enterprises as at 31 March 2010. This disclosure is based on the records available with the Bank. 7.4.2 The Bank has not issued any letters of comforts coming within the Prudential Norms for Issuance of Letters of Comforts by banks regarding their subsidiaries (DBOD.No. BP.BC.65/21.04.009/2007-08 dated March 4, 2008).

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:Total Share Capital 85.60 85.60 171.03 171.03 171.03Equity Share Capital 85.60 85.60 171.03 171.03 171.03Share Application Money 0.00 0.00 0.00 0.00 0.00Preference Share Capital 0.00 0.00 0.00 0.00 0.00Reserves 1,157.30 1,409.98 3,748.30 4,148.74 4,513.55Revaluation Reserves 7.08 6.63 6.36 6.11 5.86Net Worth 1,249.98 1,502.21 3,925.69 4,325.88 4,690.44

Deposits17,878.7

421,584.44 25,913.36 32,198.19 36,057.95

Borrowings 610.49 770.21 791.95 748.94 1,546.76

Total Debt18,489.2

322,354.65 26,705.31 32,947.13 37,604.71

Other Liabilities & Provisions 903.69 1,233.08 1,875.45 1,577.86 1,380.45

Total Liabilities20,642.9

025,089.94 32,506.45 38,850.87 43,675.60

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

AssetsCash & Balances with RBI 1,214.59 1,231.54 2,355.69 2,214.40 2,318.88Balance with Banks, Money at Call 657.91 1,081.60 389.79 1,222.70 404.51

Advances11,736.4

714,899.10 18,904.66 22,391.88 26,950.11

Investments 6,272.38 7,032.66 10,026.59 12,118.97 13,054.65Gross Block 330.78 362.71 434.75 516.40 559.26Accumulated Depreciation 156.91 176.61 201.91 235.62 269.49Net Block 173.87 186.10 232.84 280.78 289.77Capital Work In Progress 0.00 0.00 0.00 0.00 0.00Other Assets 587.70 658.93 596.87 622.15 657.69

Total Assets20,642.9

225,089.93 32,506.44 38,850.88 43,675.61

Contingent Liabilities 7,834.42 5,005.69 5,632.10 6,239.48 8,424.89Bills for collection 9,145.27 8,479.74 8,500.40 2,137.62 2,160.83Book Value (Rs) 145.19 174.71 229.16 252.57 273.90

7.4.3 The Bank has not made any draw down of reserves during the year. 7.4.5 Provision coverage ratio Provision coverage ratio as on 31 March 2010 stood at 91.82% 7.4.6 Amount of advances for which intangible securities such as charge over rights, licences, authority etc has been taken as collateral security and the value of such collateral security Nil 7.5 Previous years figures have been regrouped and recast wherever necessary.

Balance Sheet of Federal Bank

------------------- in Rs. Cr. -------------------

Profit & Loss account of Federal Bank

------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

IncomeInterest Earned 1,436.53 1,817.35 2,515.44 3,315.38 3,673.24Other Income 233.10 302.59 394.99 515.78 530.91Total Income 1,669.63 2,119.94 2,910.43 3,831.16 4,204.15ExpenditureInterest expended 836.73 1,084.96 1,647.42 1,999.92 2,262.40Employee Cost 228.36 260.45 271.23 317.45 366.05Selling and Admin Expenses 176.61 171.06 297.72 477.85 566.72Depreciation 25.74 23.97 29.22 42.84 50.19Miscellaneous Expenses 176.99 286.77 296.78 492.60 494.23Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00Operating Expenses 471.06 495.39 660.93 917.96 1,090.00Provisions & Contingencies 136.64 246.86 234.02 412.78 387.19Total Expenses 1,444.43 1,827.21 2,542.37 3,330.66 3,739.59

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit for the Year 225.21 292.73 368.05 500.49 464.55Extraordionary Items 0.00 0.00 0.00 0.00 0.00Profit brought forward 2.30 13.46 14.46 14.62 21.93Total 227.51 306.19 382.51 515.11 486.48Preference Dividend 0.00 0.00 0.00 0.00 0.00Equity Dividend 29.96 34.24 68.41 85.52 85.52Corporate Dividend Tax 4.20 5.82 11.63 14.54 14.21Per share data (annualised)Earning Per Share (Rs) 26.31 34.20 21.52 29.26 27.16Equity Dividend (%) 35.00 40.00 40.00 50.00 50.00Book Value (Rs) 145.19 174.71 229.16 252.57 273.90Appropriations

Transfer to Statutory Reserves 79.31 121.47 156.11 195.87 155.34Transfer to Other Reserves 100.57 130.21 131.74 197.25 208.27Proposed Dividend/Transfer to Govt 34.16 40.06 80.04 100.06 99.73Balance c/f to Balance Sheet 13.46 14.46 14.62 21.93 23.14Total 227.50 306.20 382.51 515.11 486.48

Company History - Federal Bank YEAR EVENTS 1931 - The Bank was incorporated in 1931 as Travancore Federal Bank Limited to cater to the banking needs of Travancore Province by a small group of local citizens. It embarked on a phase of sustained growth under the leadership of K.P. Hormist. The bank along with six other banks co-promoted Bharat Overseas Bank Ltd. 1949 - The Board of Directors of the Bank was reconstituted and fresh Articles of Association were adopted and the Bank was renamed as The Federal Bank Limited. 1993 - During March, the bank issued 25,25,000 No. of equity shares of Rs 10 each at a premium of Rs 25 per share in proportion 1:2. Another 5,25,000 No. of equity shares were offered to the employees on an equity basis. Only 30,47,894 shares of the above taken up (2,106 shares kept in abeyance). Another 30,00,000 No. of equity shares were allotted at a prem. of Rs 30 per share

to ICICI associates companies. 1994 - During March, the company offered to the public 35,45,500 shares at a prem. of Rs 80 per share. Additional 1,72,600 shares were allotted to retain oversubscription. During January 1996, the bank issued 74,08,122 rights equity shares (prem. Rs 140; prop. 1:2) 73,51,734 shares taken up. 1995 - 50,50,000 No. of equity shares were issued and paid-up of which 3,318 No. of equity shares were issued for consideration other than cash on 27.1.1965 to shareholders of erstwhile St. George Union Bank Ltd., Puthenpully, Kerala. 1996 - The Company undertook as 3 year Information Technology Strategic Plan 2000 for automating its branches in a phased programme. 1997 - The bank has developed Fedsoft the automation software package in-house which is being used by 40 branches. An Automatic Teller Machine (ATM) was installed at the Vile Parle branch in Mumbai during the year. - The bank is the second largest private sector bank with a network of more than 360 branches which till recently was restricted to the southern States. - The Aluva-based Federal Bank Ltd. has set up its site on the World Wide Web on the Internet, Information about the bank and its products and services can be accessed form http://www.federal-bank.com. - Federal Bank has infused an additional Rs.10 crore in the equity capital of its investment banking subsidiary, Fedbank Financial Services in 1996-97. - The Federal Bank Limited, the largest scheduled bank in Kerala, had developed its own computer software named FedSoft. - The software was developed by the bank in collaboration with Datanet Corporation, Bangalore and the package was based on state-of-the-art technology and the latest workflow concepts.

- Industrial Credit and Investment Corporation of India (ICICI) has entered into a strategic alliance with two Kerala-based private sector banks-Federal Bank Ltd (FBL) and South Indian Bank Ltd (SIBL)-to share business interests and strategies. - Federal Bank Ltd, the largest scheduled bank in Kerala, with a network of over 350 branches throughout the country. - The Federal Bank Limited, the largest private sector banking network in the country, has taken over an Abu Dhabi-based financial institution Exchange Bank dealing in foreign exchange. - The Federal Bank, the largest banking network in India in the private sector, is working on various customer-friendly schemes in the wake of the liberalisation globalisation measures unleashed by the government. 1998 - The Federal Bank Limited has launched a new deposit scheme named Fed Flexi. - The Kochi-based Federal Bank will open 100 more branch spread across the country by the turn of the century. With this, the total branch strength of the bank will cross 500. - The Alwaye-based Federal Bank has launched three tailor-made loan schemes. 1999 - As part of its plan to widen the retail credit portfolio, the Aluva-based Federal Bank has launched three new schemes to promote travel and tourism, fund short and long-term needs of the trading community and to finance payments of premium of LIC's Bima Nivesh. - Federal Bank, one of the country's old private banks, opened its first specialised branch for asset recovery in Mumbai on December 16, '99. - The Bank has also set up a target of Rs 86 crore in the current year for the recovery of the non-performing assets (NPAs). - The bank has set up an asset recovery department at it corporate office at Alwaye and strengthened asset recovery cells at regional offices. 2000 - Federal Bank is to foray into internet banking and E-commerce in the month April. The Bank will be he first among the old private sector banks in the country to diversify into internet banking.

- The Bank has entered into marketing pacts with some commercial agencies for its E-commerce business. 2001 - The Aluva-based Federal Bank has tied up with Escotel Communications to launch mobile banking services using SMS technology. - Federal Bank has launched a new deposit scheme christened as `Suraksha' for senior citizens. 2003 -Unveils Anywhere Banking provides the convenience of doing transactions from 300-plus interconnected branches -ICICI Bank divests 0.31% stake in Federal Bank. -Federal Bank cuts Home loan interest rates. 2004 -Achieves 100% interconnectivity among all its branches -Launches Equity Subscription Scheme, a new retail product for financing the IPOs and public issue applications of its customers -Acquires a prime property in Chennai-owned by Ramco Super Leathers under Securtisation and Reconstruction of Financial Assets and Enforcement of Security Act. The property, spread over six grounds and 26,000 sq ft on Anna Salai, is estimated to have a market value of Rs 16 crore. -Federal Bank unveils treasurer's calendar -Federal Bank join hands with ICICI Prudential Life Insurance Co. Ltd. for premium collection through its branches -Federal Bank introduces new Fed e-Pay services 2005 -JRG Securities Ltd has forged alliance with Federal Bank Ltd for providing loans for subscribing to initial public offers (IPOs). -FedBank gets award for best use of IT -Federal Bank keen on merger with southern entity 2006 -Federal Bank to acquire Ganesh Bank -Federal Bank rolls out savings deposit schemes -Federal Bank gets banking tech awards

-Federal Bank bags YMCA award -IDBI Bank, Fortis join Federal Bank for risk JV 2007 -The company has issued rights in the ratio of 1:1 at a premium of Rs.240/- Per Share. -Federal Bank buys stake in LVB, South Indian -Federal Bank to set up office in Abu Dhabi 2008 -Federal Bank Ltd has informed that Reserve Bank of India vide letter dated July 08, 2008 approved the appointment of Shri. P R Kalyanaraman, Executive Director as Whole Time Director of the Bank for a period of 3 years w.e.f. January 03, 2008. 2009 - Federal Bank in association with Geojit Financial Services has unveiled its online trading product called Fed-e-Trade as part of the bank's efforts to provide various products and services to customers. However, the retail clients of the bank will now have the access to online trading in equities as well as the derivatives, IPOs and mutual funds through Geojit's online trading platform. - Federal Bank Ltd has informed that Dr. M Y Khan has been appointed on the Board of the Bank as a non-executive, independent director. - Federal Bank has launched a call centre facility where the 24-hour service of the contact centre would be available on dialing a toll-free number 18004251199. 2010 - Federal Bank unveiled FedSelect, a premium product for their high networth individual (HNI) customers. - Shyam Srinivasan has taken charge as the Managing Director & CEO of Federal Bank with effect from September 23. - Federal Bank Ltd has appointed Shri. Shyam Srinivasan as Managing Director & Chief Executive Officer of the Bank.

Cash Flow of Federal Bank

------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 452.18 612.98 794.12 1259.77 1264.85Net Cash From Operating Activities 8.88 467.76 -1525.86 918.11 -555.25Net Cash (used in)/fromInvesting Activities

-11.74 -24.63 -137.47 -155.76 -58.73

Net Cash (used in)/from Financing Activities

319.46 -29.96 2095.68 -70.74 -99.73

Net (decrease)/increase In Cash and Cash Equivalents

316.60 413.17 432.35 691.61 -713.71

Opening Cash & Cash Equivalents 1555.89 1899.97 2313.14 2745.49 3437.09Closing Cash & Cash Equivalents 1872.49 2313.14 2745.49 3437.09 2723.39

Capital Structure (Federal Bank) Period Instrument Authorized Capital Issued Capital - P A I D U P - From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital 2009 2010 Equity Share 200 171.32 171033430 10 171.03 2008 2009 Equity Share 200 171.32 171033430 10 171.03 2007 2008 Equity Share 200 171.32 171033430 10 171.03 2006 2007 Equity Share 200 85.66 85603667 10 85.6 2005 2006 Equity Share 200 85.66 85603367 10 85.6 2004 2005 Equity Share 200 65.66 65602767 10 65.6 2003 2004 Equity Share 50 22.23 22170034 10 22.17 2002 2003 Equity Share 50 22.23 22170034 10 22.17 2001 2002 Equity Share 50 22.23 22170034 10 22.17 2000 2001 Equity Share 50 21.72 21715700 10 21.72 1999 2000 Equity Share 15 15 15000000 10 15 1998 1999 Equity Share 50 22.23 22169834 10 22.17 1997 1998 Equity Share 50 22.23 22169834 10 22.17 1996 1997 Equity Share 50 22.23 22169834 10 22.17 1995 1996 Equity Share 50 24.29 14816244 10 14.82 1994 1995 Equity Share 50 14.82 14816244

Quarterly Results of Federal Bank

------------------- in Rs. Cr. -------------------

Mar '10 Jun '10 Sep '10 Dec '10 Mar '11

Sales Turnover 953.14 951.79 978.34 1,021.88 1,100.02Other Income 130.59 109.89 144.04 121.69 141.19Total Income 1,083.73 1,061.68 1,122.38 1,143.57 1,241.21Total Expenses 286.39 321.25 367.69 354.61 318.03Operating Profit 666.75 630.54 610.65 667.27 781.99Profit On Sale Of Assets -- -- -- --Profit On Sale Of Investments -- -- -- --Gain/Loss On Foreign Exchange -- -- -- --VRS Adjustment -- -- -- --Other Extraordinary Income/Expenses -- -- -- --Total Extraordinary Income/Expenses -- -- -- --Tax On Extraordinary Items -- -- -- --Net Extra Ordinary Income/Expenses -- -- -- --Gross Profit 797.34 740.43 754.69 788.96 923.18

Interest 543.45 538.47 539.97 574.63 652.38PBDT 253.89 201.96 214.72 214.33 270.80Depreciation -- -- -- --Depreciation On Revaluation Of Assets -- -- -- --PBT 253.89 201.96 214.72 214.33 270.80Tax 137.04 70.10 74.32 71.23 99.08Net Profit 116.85 131.86 140.40 143.10 171.72Prior Years Income/Expenses -- -- -- --Depreciation for Previous Years Written Back/ Provided

-- -- -- --

Dividend -- -- -- --Dividend Tax -- -- -- --Dividend (%) -- -- -- --Earnings Per Share 6.83 7.71 8.21 8.37 10.04Book Value -- -- -- --Equity 171.03 171.03 171.03 171.03 171.05Reserves -- -- -- --Face Value 10.00 10.00 10.00 10.00 10.00

Half Yearly Results of Federal Bank

------------------- in Rs. Cr. -------------------

Mar '09 Sep '09 Mar '10 Sep '10 Mar '11

6 mths 6 mths 6 mths 6 mths 6 mths

Sales Turnover 1,742.16 1,775.45 1,897.78 1,930.13 2,121.90Other Income 315.35 283.84 247.07 253.93 262.88Total Income 2,057.51 2,059.29 2,144.85 2,184.06 2,384.78Total Expenses 455.01 524.44 557.75 688.94 672.64Operating Profit 1,287.15 1,251.01 1,340.03 1,241.19 1,449.26Profit On Sale Of Assets -- -- -- --Profit On Sale Of Investments -- -- -- --Gain/Loss On Foreign Exchange -- -- -- --VRS Adjustment -- -- -- --Other Extraordinary Income/Expenses -- -- -- --

Total Extraordinary Income/Expenses -- -- -- --Tax On Extraordinary Items -- -- -- --Net Extra Ordinary Income/Expenses -- -- -- --Gross Profit 1,602.50 1,534.85 1,587.10 1,495.12 1,712.14Interest 1,036.67 1,155.42 1,106.98 1,078.44 1,227.01PBDT 565.83 379.43 480.12 416.68 485.13Depreciation -- -- -- --Depreciation On Revaluation Of Assets -- -- -- --PBT 565.83 379.43 480.12 416.68 485.13Tax 247.77 141.98 253.02 144.42 170.31Net Profit 318.06 237.45 227.10 272.26 314.82Prior Year Income/Expenses -- -- -- --Depreciation for Previous Years Written Back/ Provided

-- -- -- --

Dividend -- -- -- --Dividend Tax -- -- -- --Dividend (%) -- -- -- --Earnings Per Share(Rs) 18.60 13.88 13.28 15.92 18.41Book Value(Rs) -- -- -- --Equity 171.03 171.03 171.03 171.03 171.05Reserves 4,148.74 -- 4,513.55 --Face Value(Rs) 10.00 10.00 10.00 10.00 10.00

Half Yearly Results of Federal Bank

------------------- in Rs. Cr. -------------------

Mar '09 Sep '09 Mar '10 Sep '10 Mar '11

6 mths 6 mths 6 mths 6 mths 6 mths

Sales Turnover 1,742.16 1,775.45 1,897.78 1,930.13 2,121.90Other Income 315.35 283.84 247.07 253.93 262.88Total Income 2,057.51 2,059.29 2,144.85 2,184.06 2,384.78Total Expenses 455.01 524.44 557.75 688.94 672.64Operating Profit 1,287.15 1,251.01 1,340.03 1,241.19 1,449.26

Profit On Sale Of Assets -- -- -- --Profit On Sale Of Investments -- -- -- --Gain/Loss On Foreign Exchange -- -- -- --VRS Adjustment -- -- -- --Other Extraordinary Income/Expenses -- -- -- --Total Extraordinary Income/Expenses -- -- -- --Tax On Extraordinary Items -- -- -- --Net Extra Ordinary Income/Expenses -- -- -- --Gross Profit 1,602.50 1,534.85 1,587.10 1,495.12 1,712.14Interest 1,036.67 1,155.42 1,106.98 1,078.44 1,227.01PBDT 565.83 379.43 480.12 416.68 485.13Depreciation -- -- -- --Depreciation On Revaluation Of Assets -- -- -- --PBT 565.83 379.43 480.12 416.68 485.13Tax 247.77 141.98 253.02 144.42 170.31Net Profit 318.06 237.45 227.10 272.26 314.82Prior Year Income/Expenses -- -- -- --Depreciation for Previous Years Written Back/ Provided

-- -- -- --

Dividend -- -- -- --Dividend Tax -- -- -- --Dividend (%) -- -- -- --Earnings Per Share(Rs) 18.60 13.88 13.28 15.92 18.41Book Value(Rs) -- -- -- --Equity 171.03 171.03 171.03 171.03 171.05Reserves 4,148.74 -- 4,513.55 --Face Value(Rs) 10.00 10.00 10.00 10.00 10.00

Yearly Results of Federal Bank

------------------- in Rs. Cr. -------------------

Mar '07 Mar '08 Mar '09 Mar '10 Mar '11

Sales Turnover 1,817.35 2,515.44 3,315.38 3,673.23 4,052.03Other Income 286.69 394.99 515.77 530.91 516.81Total Income 2,104.04 2,910.43 3,831.15 4,204.14 4,568.84Total Expenses 620.85 762.85 1,038.22 1,082.19 1,361.58Operating Profit 1,196.50 1,752.59 2,277.16 2,591.04 2,690.45

Profit On Sale Of Assets -- -- -- --Profit On Sale Of Investments -- -- -- --Gain/Loss On Foreign Exchange -- -- -- --VRS Adjustment -- -- -- --Other Extraordinary Income/Expenses -- -- -- --Total Extraordinary Income/Expenses -- -- -- --Tax On Extraordinary Items -- -- -- --Net Extra Ordinary Income/Expenses -- -- -- --Gross Profit 1,483.19 2,147.58 2,792.93 3,121.95 3,207.26Interest 1,084.96 1,647.43 1,999.92 2,262.40 2,305.45PBDT 398.23 500.15 793.01 859.55 901.81Depreciation -- -- -- --Depreciation On Revaluation Of Assets -- -- -- --PBT 398.23 500.15 793.01 859.55 901.81Tax 105.50 132.10 292.52 395.00 314.73Net Profit 292.73 368.05 500.49 464.55 587.08Prior Years Income/Expenses -- -- -- --Depreciation for Previous Years Written Back/ Provided

-- -- -- --

Dividend -- -- -- --Dividend Tax -- -- -- --Dividend (%) -- -- -- --Earnings Per Share 34.20 21.52 29.26 27.16 34.32Book Value -- -- -- --Equity 85.60 171.03 171.03 171.03 171.05Reserves 1,409.97 3,748.30 4,148.74 4,513.55 4,931.98Face Value 10.00 10.00 10.00 10.00 10.00