Bank of baroda

BANK OF BARODA
Our international operations and our planned international expansion may pose complex management issues
and tax, legal, foreign exchange and other risks.
In addition to India, our Bank and its Subsidiaries have an international presence in 19 other countries with 59 branches
and offices. Our Bank and its Subsidiaries offer a variety of banking services, which varies from country to country. In
fiscal 2005, the international operations of our Bank and its Subsidiaries contributed 15.47% and 9.28% of our total
business (deposits plus advances) and total income, respectively, on a consolidated basis rising from 14.78% and
7.74% in fiscal 2004 respectively. The international operations of our Bank and its Subsidiaries are subject to inherent
risks, including:
Cost structures and cultural and language factors, associated with managing and coordinating our international
operations;
Compliance with a wide range of foreign laws, including immigration, labour and tax laws;
Restrictions on repatriation of profits and capital in some cases;
Compliance with a wide range of Indian laws and regulations which impact our international operations; and
Exchange rate volatility.
We anticipate growing the international operations of our Bank and its Subsidiaries into the future and if we do not
successfully manage these risks now and in the future, our results of operations and financial condition, on both a
stand-alone as well as a consolidated basis, could be adversely affected.
We have substantial activity in agriculture and other priority sectors and our business could be adversely
affected by market and other factors, which impact these sectors.
We have substantial exposure to loans and advances to agriculture and small-scale industries, categorized as “priority
sectors”. In addition, the directed lending norms of RBI require that every bank should extend at least 40% of its net
bank credit to priority sectors. As of the last reporting Friday of Septemeber 2005, priority sector credit constituted
40.87% of our net bank credit, and loans to agricultural and small-scale industry borrowers constituted 14.96% and
10.81%, respectively, of our net bank credit. As of September 30, 2005, the percentage of our priority sector gross non-
performing assets to total priority sector advances was 9.34%. As of September 30, 2005, the percentage of our
agricultural gross non-performing assets to total agricultural advances was 8.26% and the ratio of our small-scale
industry gross non-performing assets to total small-scale industry advances was 13.33%, compared with our overall
ratio of non-performing assets to total domestic advances of 7.31%. Although we believe that our agricultural loans are
adequately collateralised, economic difficulties owing to various factors, such as uncertain monsoons or other weather
conditions, natural calamities, reductions in price supports, changes in government policy, or other events and conditions
may adversely impact these priority sectors and our business and the level of our non-performing assets.