1.  The statements of financial results forthe year have been prepared
 on historical cost convention and following the same set of accounting
 policies and practices as forthe year ended 31st March 2010 except
 treatment of depreciation on securities transferred from AFS to HFT
 category and vice versa in term of policy as per 4 f (ii) c in
 Schedule-17.
 
 2.  Legal formalities with regard to the registration of property in
 favour of Bank which are yet to be completed in respect of one property
 valued at Rs. 0.06 crore.
 
 3.  During the financial year ended 31 st March 2011, the bank has made
 a preferential allotment of 7, 45, 80,364 Equity Shares of the face
 value of Rs. 10.00 each to Government of India at a premium of Rs. 147.28
 per share for an aggregate amount of Rs. 1173.00 crore.
 
 4.  During the year, the Bank has reopened the pension option for its
 employees who had not opted forthe scheme earlier. As a result of
 exercise of the given option by existing and retired/separated
 employees, the bank has incurred an additional liability of Rs. 521.51
 crore including Rs. 468.31 crore on account of exercise by 6072 existing
 employees.
 
 Further, with regard to gratuity, the bank has incurred an additional
 liability of Rs. 165.00 crore during the year consequent to the amendment
 in the Payment of Gratuity Act-1972 increasing the ceiling limit from Rs.
 3.50 lacs to Rs. 10.00 lacs.
 
 In terms of the requirements of the Accounting Standard (AS) 15,
 Employee Benefits, the entire amount of Rs. 686.51 crore is required to
 be charged to the Profit and Loss Account. However, the Reserve Bank of
 India vide circular no. DBOD.BPBC.80/21.04.018/2010-11 dated 09th of
 February, 2011, has allowed the banks to amortize the additional
 liabilities on account of second pension option in respect of existing
 employees and gratuity payable over a period of five years.
 
 The bank, as allowed by RBI, has amortized Rs. 93.66 crore being 1/5th of
 the total amount of the additional pension liability of the existing
 employees and Rs. 33.00 crore, being the 1/5th of the additional
 liability on account of gratuity.
 
 The additional pension liability of the retired/separated employees
 amounting to Rs. 53.20 crore has been fully charged to the profit and
 loss account.
 
 Had such deferment not been there, the profit of the Bank would have
 been lower by Rs. 506.65 crore (being the net liability relating to
 serving employees carried forward) pursuant to application of the
 requirements of AS-15.
 
 5.  (a) (i) In terms of Agriculture Debt Waiver & Debt Relief Scheme
 2008, hereinafter referred as the Scheme, framed by the Government of
 India, with regard to the amount eligible for waiver in respect of
 small and marginal farmers, the Bank identified a sum of Rs. 746.96
 crore, as certified by Central Statutory Auditors, out of which Rs.
 262.88 crore was receivable as on 31st March 2010 has fully been
 received during the current financial year.
 
 (ii) In terms of the above scheme with regard to the amount of relief
 to other farmers an amount of Rs. 157.68 crore was initially identified
 as claim receivable from Government of India. However an amount of Rs.
 151.80 crore has been certified by the Central Statutory Auditors as
 final claim, out of which an amount of Rs. 130.59 crore has been
 received.
 
 (b) In terms of RBI circular no. DBOD no. BPBC 78/ 21.04.048/2008-09
 dated 11th November 2008; interest amounting to Rs. 8.77 crore for the
 year is recognized in respect of claims receivable from Government of
 India under the scheme.
 
 6. a) Provision for Income Tax has been made on the basis of the
 applicable laws and various judicial pronouncements available. In view
 of judicial pronouncements in similar cases, no additional provision is
 considered necessary towards disputed tax demands of Rs. 278.76 crore
 inclusive of service tax of Rs. 2.48 crore (Rs. 312.65 crore) upto
 assessment year 2008-09 for which assessments are completed/appealed.
 
 7.  Investments include Rs. 8.26 crore (Rs. 8.26crore) invested in Regional
 Rural Banks as Share Capital Deposit pursuant to a letter by Government
 of India.
 
 8.  a) Floating Provision of Rs. 38.06 crore (Rs. 38.06 crore), is held as
 at 31.03.2011 in respect of gross non performing advances over and
 above the minimum prescribed as per RBI guidelines with a viewto
 strengthen the financial position of the Bank.
 
 b) Consequent to RBI Circular DBOD.No.BP.BC 118 / 21.04.048/2008-09
 dated March 25, 2009, the bank has modified the policy of prudential
 treatment of different types of provisions in respect of loan
 portfolio.  Additional provisions are made wherever, in the opinion of
 the Bank, the value of security has deteriorated or likely to
 deteriorate. Such additional provision aggregating to Rs. 272.88 crore (Rs.
 238.88 crore) is held as on 31st March, 2011.
 
 c) The above floating and additional provisions are netted off from
 advances.
 
 9.  1437 individual housing loan accounts securitized during the year
 2003-04 amounting to Rs. 50.36 crore and were transferred to a Special
 Purpose Vehicle (SPV) Trust pursuant to the Deed of Assignment executed
 with National Housing Bank (NHB). The NHB has issued Pass Through
 Certificates (PTCs) of said amount, out of which part was subscribed by
 various Banks/Financial Institutions as PTC Class-A investments and the
 balance was subscribed by the bank as PTC Class-B. The value of PTC-A
 series stood at Rs. 3.44 crore as on 31.03.2011 (Rs. 6.53 crore). Further,
 PTC class-B investment with a book value of Rs. 2.70 crore has been shown
 as a part of investments by the bank as on 31.03.2011(Rs. 3.20 crore).
 
 The present outstanding balance of the pool as on 31.03.2011 is Rs. 7.46
 crore (M1.08 crore). The bank is
 
 12.2 Investments acting as service provider to the SPV Trust. An amount
 of Rs. 0.68 crore (Rs. 0.68 crore) has been provided by the bank as cash
 collateral in addition to Investment in PTC-B as credit enhancement. An
 amount ofRs.  1.17 crore is held as special provision to meet any loss
 due to non recovery of securitized housing loans.
 
 10. The Bank has received Rs. 13.03 crore (Rs. 12.55 crore) as fee from
 Bancassurance - Life and Rs. 13.23 crore (Rs. 12.42 crore) as fee from
 Bancassurance - Non Life.
 
 11.  Bank has completed the process of implementation of Core Banking
 Solution during the year 2008-09. The related cost of software
 aggregating to Rs. 89.04 crore is being amortized over the estimated
 useful life of 5 years out of which an amount of Rs. 35.62 (Rs. 53.43
 crore) is outstanding as on 31.03.2011.
 
 12.2.3 a) During the year, the Bank has shifted securities aggregating
 Rs. 748.32 crore (Rs. 1251.48 crore) from Available for Sale (AFS)
 category to Held to Maturity (HTM) Category and Rs. 9.04 crore (Nil)
 (Investment in Venture Capital funds) from Held to Maturity (HTM)
 category to Available for Sale (AFS) category at lower of acquisition
 cost/book value / market value. The available depreciation ofRs. 19.37
 crore fortransfer of securities from Available for Sale (AFS) Category
 to Held to Maturity (HTM) category was utilised. A loss of Rs. 0.18 crore
 was booked on transfer of Investment in Venture Capital funds from Held
 to Maturity (HTM) category to Available for Sale (AFS) category. There
 is no shifting of securities from HFT to HTM category during the year
 (Rs. 136.85 crore).
 
 (b) Loss incurred during the year on account of sale of security under
 HTM category is Nil (Nil)
 
 (c) Due to change in accounting policy regarding depreciation on
 transfer of securities from HFT to AFS category (please refer to point
 no.4 (f) (ii) c of schedule- 17), the charge to Profit & Loss account
 is lower to the extent of Rs. 0.06 crore. There is no consequent impact
 on valuation of investments at the year end.
 
 12.2.4 The Bank has earned gross amount of Rs. 8.77 crore (Rs. 141.42
 crore) as profit on sale of securities in HTM category out of which an
 amount of Rs. 4.40 crore (Rs.93.35 crore), net of tax and amount required
 to be transferred to Statutory Reserve, has been appropriated to
 capital reserve account as per RBI guidelines.
 
 12.3.3 Disclosures on risk exposure in derivatives
 
 A) Qualitative Disclosures:
 
 a) Structure and Organization for Management of risk in derivatives
 trading:
 
 i) In terms of Reserve Bank of India guidelines on Interest Rate Swaps
 (IRS) and Forward Rate Agreements (FRA) the Bank has approved policies
 and procedures, counter party exposure limits, delegation of powers,
 accounting policy, policy for valuation, ISDA documentation, cut loss,
 reporting etc., for Interest Rate Swaps and fixed a cap of Rs.1500 crore
 for interest rate swaps (sub-limit of Rs. 500 crore for Trading Book).
 Bank has conducted the derivative operations within the overall
 framework of these guidelines.
 
 ii) The Bank has approved policies and procedures, counter party
 exposures limits delegation of powers, accounting policy,
 ISDAdocumentation, reporting etc., for undertaking forex derivatives in
 various forms of currency swaps & various types of interest rates swaps
 not specifically prohibited by RBI with the corporate borrower
 customers, other banks and non-borrower customers to be covered on back
 to back basis. Banks policy also permits entering into Plain Vanilla
 European Style Option to Banks customers for hedging / pricing their
 forward exposures on back to back basis, or for hedging foreign
 currency exposures.
 
 iii) Mark to Market valuation is sent to customers on monthly basis and
 capital charge is provided as per current exposure method.
 
 iv) Derivative contracts undertaken on back-to-back basis or for
 hedging own foreign currency exposure are recorded at the rate
 prevailing on the date of the contract and are reported at the closing
 rates at the Balance Sheet date. The revenue in respect of these
 transactions is recognized for the proportionate period till the expiry
 of the contract. In respect of contracts done on back to back basis,
 the revenue on early termination of the contract is recognized on
 termination.
 
 b) Scope and nature of risk measurement, risk reporting and risk
 monitoring systems: Bank availed the services of a consultant in
 respect of the derivative transactions undertaken. The consultant firm
 was providing daily mark to market position of all the outstanding
 swaps and the bank reviewed the same at periodical intervals. The
 position of all outstanding swaps, new swaps entered, swaps existed,
 Mark to Market value of swaps etc., is being reviewed by the Banks
 Investments Committee and the Board at monthly intervals. Details of
 transactions undertaken in IRS are also reported to RBI on a
 fortnightly basis.
 
 c) Policies for hedging and / or mitigating and strategies and
 processes for monitoring the continuing effectiveness of hedges /
 mitigants: Depending on the market opportunities and as per the advice
 of the Consultant, a view on interest rate movement is taken and acted
 upon. Though the settlement of swaps takes place on due date/dates as
 per the terms of the swaps, the value monitoring is carried out daily
 to knowthe impact of market changes on Swap Book. When unfavorable
 market movements are unidirectional, swaps are exited cutting loss. Cut
 loss limits, exit powers, reviewing authority etc., are prescribed.
 
 d) Accounting policy for recording the hedge and non- hedge
 transactions, recognition of income, premiums and discounts, valuation
 of outstanding contracts, provisioning, collateral and credit risk
 mitigation:
 
 Detailed accounting policy and valuation policy are approved by Board.
 Transactions for hedging purposes are accounted for on accrual basis
 except the swap designated with an asset / liability that is carried at
 lower of cost or market value. In that case, the swap is marked to
 market, with the resultant gain or loss recorded as an adjustment to
 the market value of designated asset or liability. On termination of
 swap, gain or loss is recognized when the offsetting gain or loss is
 recognized on the designated asset or liability. Any gain or loss on
 the terminated swap was deferred and recognized over the shorter of the
 remaining contractual life of the swap or the remaining life of the
 asset/liability.
 
 Trading transactions have to be marked to market with charges recorded
 in the income statement. Income, expenditure, fee, gains or losses on
 termination of swaps are all recorded as immediate income or expenses.
 
 12.8.  Penalties imposed by RBI
 
 During the year ended 31st March, 2011, no penalty has been levied by
 RBI.
 
 19. IMPAIRMENT OF ASSETS (AS 28)
 
 The indications listed in paragraphs 8 to 10 of Accounting Standard
 28-lmpairment of Assets (issued by the ICAI ) have been examined and
 on such examination, it has been found that none of the indications are
 present in the case of the bank. Aformal estimate of the recoverable
 amount has not been made, as there is no indication of a potential
 impairment loss.
 
 20. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS 29)
 
 As per the guidelines of AS-29 issued by ICAI, details of movement in
 significant provisions have been disclosed at the appropriate places in
 the notes forming part of the accounts.
 
 21 There is no material prior period item included in Profit and Loss
 account which is required to be disclosed as per AS-5 issued by the
 Institute of Chartered Accountants of India read with RBI guidelines.
 
 22.  Pursuant to RBI guidelines, the bank has made a provision of Rs.
 0.45 crore (Rs. 31.48 crore) during the year in respect of interest on
 matured deposits. The total amount of provision kept for such matured
 deposits stands at Rs. 31.93 crore (Rs. 31.48 crore) as on 31 st March
 2011.
 
 23.  Reconciliation of Inter Branch and Inter Bank transactions have
 been done up to 31st March 2011.
 
 25.  Hitherto the Bank is classifying the following regulatory capital
 instruments under Schedule 5-Other Liabilities:
 
 1.  Innovative Perpetual Debt Instruments (IPDI)
 
 2.  Subordinated Debt.
 
 However, pursuant to RBI guidelines vide RBI/2009-10/368
 DBOD.BPBC.No.81/21.01.002/2009-10 dated 30.03.2010, now the same are
 being classified under Schedule 4 - Borrowings.
 
 26.  Disclosure of complaints and unimplemented awards of Banking
 Ombudsman
 
 a) Customer complaints (in numbers)
 
 a) Pending at the beginning of the year: 237
 
 b) Received during the year: 93943
 
 c) Redressed during the year: 93244
 
 d) pending at the end of the year: 936
 
 b) Awards passed by the Banking Ombudsman (in numbers)
 
 a) Unimplemented at the beginning of the year: o
 
 b) Passed by the Banking Ombudsman during the year: lO
 
 c) Implemented during the year: o9
 
 d) Unimplemented at the end of the year: 1
 
 The total complaints received during the year include 78199 number of
 complaints for ATM, 153 for Credit Card, 1853 for RTGS/NEFT, 8299 for
 Pension and 5439 of general nature.
 
 27. Previous year figures have been regrouped / reclassified
 /rearranged wherever necessary to conform to current years figures.
 Figures in the brackets indicate figures of previous year.