1 Background
 
 Axis Bank Limited (the Bank) was incorporated in 1993 and provides a
 complete suite of corporate and retail banking products.
 
 2 Basis of preparation
 
 The financial statements have been prepared and presented under the
 historical cost convention on the accrual basis of accounting, and
 comply with the generally accepted accounting principles, statutory
 requirements prescribed under the Banking Regulation Act, 1949, the
 circulars and guidelines issued by the Reserve Bank of India (RBI)
 from time to time and the Accounting Standards notified under the
 Companies (Accounting Standards) Rules, 2006, to the extent applicable
 and current practices prevailing within the banking industry in India.
 
 3 Use of estimates
 
 The preparation of the financial statements in conformity with the
 generally accepted accounting principles requires the Management to
 make estimates and assumptions that affect the reported amounts of
 assets and liabilities, revenues and expenses and disclosure of
 contingent liabilities at the date of the financial statements. Actual
 results could differ from those estimates. The Management believes that
 the estimates used in the preparation of the financial statements are
 prudent and reasonable. Any revisions to the accounting estimates are
 recognised prospectively in the current and future periods.
 
 4 Changes in accounting estimates
 
 4.1 Change in estimated useful life of fixed assets
 
 During the year, the Bank has revised the estimated useful lifes of the
 following types of fixed assets:
 
 - Modems, scanners, routers, hubs and switches from 10 years to 5 years
 
 - Video conferencing equipment and printers from 10 years to 3 years
 
 - Racks/cabinets for IT equipment from 16 years to 5 years
 
 - Owned premises from 20 years to 61 years
 
 As a result of tie aforesaid revisions, the net depreciation charge for
 the year is higher by ^16.22 crores with a corresponding decrease in
 the net block of fixed assets.
 
 4.2 Change in estimate of lease term for operating leases
 
 During the current year, the Bank has revised its estimate of lease
 term in the case of assets taken on operating leases to include the
 secondary period of the lease involving further payment of lease
 rentals based on continuation of the lease at the option of the Bank,
 as against the primary lease period as considered hitherto. As a result
 the operating expenses for the year are higher by Rs.93.04 crores with a
 consequent reduction to the profit before tax.
 
 5.1 Investments
 
 Classification
 
 In accordance with the RBI guidelines, investments are classified at
 the date of purchase as:
 
 - Held for Trading (HFT);
 
 - Available for Sale (AFS); and
 
 - Held to Maturity (HTM).
 
 Investments that are held principally for sale within a short period
 are classified as HFT securities. As per the RBI guidelines, HFT
 securities, which remain unsold for a period of 90 days are
 reclassified as AFS securities as on that date.
 
 Investments that the Bank intends to hold till maturity are classified
 under the HTM category.
 
 All other investments are classified as AFS securities.
 
 However, for disclosure in the Balance Sheet, investments in India are
 classified under six categories - Government Securities, Other approved
 securities, Shares, Debentures and Bonds, Investment in
 Subsidiaries/Joint Ventures and Others.
 
 Investments made outside India are classified under three categories -
 Government Securities, Subsidiaries and/or Joint Ventures abroad and
 Others.
 
 Transfer of security between categories
 
 Transfer of security between categories of investments is accounted as
 per the RBI guidelines.
 
 Acquisition cost
 
 Costs including brokerage, commission pertaining to investments, paid
 at the time of acquisition, are charged to the Profit and Loss Account.
 
 Broken period interest is charged to the Profit and Loss Account.
 
 Cost of investments is computed based on the weighted average cost
 method.
 
 Valuation
 
 Investments classified under the HTM category are carried at
 acquisition cost. Any premium on acquisition over face value is
 amortised on a constant yield to maturity basis over the remaining
 period to maturity. In terms of RBI guidelines, discount on securities
 held under HTM category is not accrued and such securities are held at
 the acquisition cost till maturity.
 
 Investments classified under the AFS and HFT categories are marked to
 market. The market/fair value of quoted investments included in the
 Available for Sale and Held for Trading categories is the market
 price of the scrip as available from the trades/quotes on the stock
 exchanges, SGL account transactions, price list of RBI or prices
 declared by Primary Dealers Association of India (PDAI) jointly with
 Fixed Income Money Market and Derivatives Association of India
 (FIMMDA), periodically. Net depreciation, if any, within each
 category of each investment classification is recognised in the Profit
 and Loss Account. The net appreciation if any, under each category of
 each investment classification is ignored. The book value of individual
 securities is not changed consequent to the periodic valuation of
 investments.
 
 Treasury Bills, Exchange Funded Bills, Commercial Paper and Certificate
 of Deposits being discounted instruments, are valued at carrying cost.
 
 Units of mutual funds are valued at the latest repurchase price/net
 asset value declared by the mutual fund.
 
 Market value of investments where current quotations are not available,
 is determined as per the norms prescribed by the RBI as under:
 
 - market value of unquoted Government Securities is derived based on
 the Prices/Yield to Maturity (YTM) rate for Government Securities of
 equivalent maturity as notified by FIMMDA jointly with the PDAI at
 periodic intervals;
 
 - in case of Central Government Securities, which do not qualify for
 SLR requirement, the market price is derived by adding the appropriate
 mark up to the Base Yield Curve of Central Government Securities as
 notified by FIMMDA;
 
 - market value of unquoted State Government Securities is derived by
 adding the appropriate mark up above the Base Yield Curve of the
 Central Government Securities of equivalent maturity as notified by the
 FIMMD/V PDAI at periodic intervals;
 
 - in case of unquoted bonds, debentures and preference shares where
 interest/dividend is received regularly, the market price is derived
 based on the YTM for Government Securities as notified by FIMMDA/PDAI
 and suitably marked up for credit risk applicable to the credit rating
 of the instrument. The matrix for credit risk mark-up for each
 categories and credit ratings along with residual maturity issued by
 FIMMDA is adopted for this purpose;
 
 - in case of preference shares where dividend is not received
 regularly, the price derived on the basis of YTM is discounted in
 accordance with the RBI guidelines;
 
 - in case of bonds and debentures (including PTCs) where interest is
 not received regularly, the valuation is in accordance with prudential
 norms for provisioning as prescribed by RBI;
 
 - equity shares, for which current quotations are not available or
 where the shares are not quoted on the stock exchanges, are valued at
 break-up value (without considering revaluation reserves, if any) which
 is ascertained from the companys latest Balance Sheet. In case the
 latest Balance Sheet is not available, the shares are valued at Re. 1
 per company;
 
 - units of Venture Capital Funds (VCF) held under AFS category where
 current quotations are not available are marked to market based on the
 Net Asset Value (NAV) shown by VCF as per the latest audited financials
 of the fund. In case the audited financials are not available for a
 period beyond 18 months, the investments are valued at Re.1 per VCF.
 Investment in unquoted VCF after 23 August, 2006 are categorised under
 HTM category for the initial period of three years and valued at cost
 as per RBI guidelines; and
 
 - investments in Credit Linked Notes (CLNs), are valued based on
 current quotations where the same are available. In the absence of
 quotes, the same are valued based on internal valuation methodology
 using appropriate mark-up and other estimates such as price of the
 underlying Foreign Currency Convertible Bond (FCCB), rating category of
 the CLN etc.
 
 Investments in subsidiaries/joint ventures are categorised as HTM and
 assessed for impairment to determine permanent diminution, if any, in
 accordance with the RBI guidelines.
 
 Realised gains on investments under the HTM category are recognised in
 the Profit and Loss Account and subsequently appropriated to Capital
 Reserve account in accordance with the RBI guidelines. Losses are
 recognised in the Profit and Loss Account.
 
 All investments are accounted for on settlement date except investments
 in equity shares which are accounted for on trade date as the corporate
 actions are effected in equity on the trade date.
 
 Repurchase and reverse repurchase transactions
 
 Repurchase and reverse repurchase transactions [excluding those
 conducted under the Liquidity Adjustment Facility (LAF) with RBI] are
 accounted as collateralised borrowing and lending respectively. Such
 transactions done under LAF are accounted as outright sale and outright
 purchase respectively. However, depreciation in their value, if any,
 compared to their original cost, is recognised in the Profit and Loss
 Account.
 
 5.2 Advances
 
 Advances are classified into performing and non-performing advances
 (NPAs) as per the RBI guidelines and are stated net of specific
 provisions made towards NPAs and floating provisions. Further, NPAs are
 classified into sub- standard, doubtful and loss assets based on the
 criteria stipulated by the RBI. Provisions for NPAs are made for
 sub-standard and doubtful assets at rates as prescribed by the RBI with
 the exception for agriculture advances and schematic retail advances.
 In respect of schematic retail advances, provisions are made in terms
 of a bucket-wise policy upon reaching specified stages of delinquency
 (90 days or more of delinquency) under each type of loan, which
 satisfies the RBI prudential norms on provisioning. Provisions in
 respect of agriculture advances classified into sub-standard and
 doubtful assets are made at rates which are higher than those
 prescribed by the RBI.
 
 Loss assets and unsecured portion of doubtful assets are
 provided/written off as per the extant RBI guidelines. NPAs are
 identified by periodic appraisals of the loan portfolio by the
 Management.
 
 For restructured/rescheduled assets, provision is made in accordance
 with the guidelines issued by RBI, which requires the diminution in the
 fair value of the assets to be provided at the time of restructuring.
 
 A general provision @ 0.25% in case of direct advances to agricultural
 and SME sectors, 1 % in respect of advances classified as commercial
 real estate, 2% in respect of housing loans at teaser rates and 0.40%
 for all other advances is made as prescribed by the RBI.
 
 5.3 Country risk
 
 In addition to the provisions required to be held according to the
 asset classification status, provisions are held for individual country
 exposure (other than for home country). The countries are categorised
 into seven risk categories namely insignificant, low, moderate, high,
 very high, restricted and off-credit and provision is made on exposures
 exceeding 180 days on a graded scale ranging from 0.25% to 100%. For
 exposures with contractual maturity of less than 180 days, 25% of the
 normal provision requirement is held. If the country exposure (net) of
 the Bank in respect of each country does not exceed 1 % of the total
 funded assets, no provision is maintained on such country exposure.
 
 5.4 Securtisation
 
 The Bank enters into purchase/sale of corporate and retail loans
 through direct assignment/Special Purpose Vehicle (SPV). In most
 cases, post securtisation, the Bank continues to service the loans
 transferred to the assignee/SPV.  The Bank also provides credit
 enhancement in the form of cash collaterals and/or by subordination of
 cash flows to Senior Pass Through Certificate (PTC) holders. In
 respect of credit enhancements provided or recourse obligations
 (projected delinquencies, future servicing etc.) accepted by the Bank,
 appropriate provision/disclosure is made at the time of sale in
 accordance with AS 29, Provisions, Contingent Liabilities and
 Contingent Assets.
 
 Gain on securtisation transaction is recognized over the period of the
 underlying securities issued by the SPV. Loss on securtisation is
 immediately debited to the Profit and Loss Account.
 
 5.5 Foreign currency transactions
 
 In respect of domestic operations, transactions denominated in foreign
 currencies are accounted for at the rates prevailing on the date of the
 transaction. Monetary foreign currency assets and liabilities are
 translated at the Balance Sheet date at rates notified by Foreign
 Exchange Dealers Association of India (FEDAI). All profits/losses
 resulting from year end revaluations are recognised in the Profit and
 Loss Account.
 
 Financial statements of foreign branches classified as non-integral
 foreign operations are translated as follows:
 
 - Assets and liabilities (both monetary and non-monetary as well as
 contingent liabilities) are translated at closing rates notified by
 FEDAI at the year end.
 
 - Income and expenses are translated at the rates prevailing on the
 date of the transactions.
 
 - All resulting exchange differences are accumulated in a separate
 Foreign Currency Translation Reserve till the disposal of the net
 investments.
 
 Outstanding forward exchange contracts (excluding currency swaps
 undertaken to hedge foreign currency assets/ liabilities and funding
 swaps which are not revalued) and spot exchange contracts are revalued
 at year end exchange rates notified by FEDAI for specified maturities
 and at interpolated rates for contract of interim maturities. The
 resulting gains or losses on revaluation are included in the Profit and
 Loss Account in accordance with RBI/FEDAI guidelines. The forward
 exchange contracts of longer maturities where exchange rates are not
 notified by FEDAI are revalued at the forward exchange rates implied by
 the swap curves in respective currencies. The resultant gains or losses
 are recognised in the Profit and Loss Account.
 
 Premium/discount on currency swaps undertaken to hedge foreign currency
 assets and liabilities and funding swaps is recognised as interest
 income/expense and is amortised on a pro-rata basis over the underlying
 swap period.
 
 Contingent liabilities on account of foreign exchange
 contracts/options, guarantees, acceptances, endorsements and other
 obligations denominated in foreign currencies are disclosed at closing
 rates of exchange notified by FEDAI.
 
 5.6 Derivative transactions
 
 Derivative transactions comprise of forward contracts, swaps and
 options which are disclosed as contingent liabilities.  The forwards,
 swaps and options are segregated as trading or hedge transactions.
 Trading derivative contracts are revalued at the Balance Sheet date
 with the resulting unrealised gain or loss being recognised in the
 Profit and Loss Account and correspondingly in other assets or other
 liabilities respectively. For hedge transactions, the Bank identifies
 the hedged item (asset or liability) at the inception of transaction
 itself. The effectiveness is ascertained at the time of inception of
 the hedge and periodically thereafter. Hedge derivative transactions
 are accounted for pursuant to the principles of hedge accounting. The
 premium on option contracts is accounted for as per FEDAI guidelines.
 Pursuant to the RBI guidelines any receivables under derivatives
 contracts which remain overdue for more than 90 days are reversed
 through the Profit and Loss Account and are held in a separate Suspense
 Account.
 
 5.7 Revenue recognition
 
 Interest income is recognised on an accrual basis except interest
 income on non-performing assets, which is recognised on receipt in
 accordance with Accounting Standard 9 and the RBI guidelines.
 
 Fees and commission income is recognised when due, except for guarantee
 commission which is recognised pro- rata over the period of the
 guarantee.
 
 Dividend is accounted on an accrual basis when the right to receive the
 dividend is established.
 
 Gain/loss on sell down of loans and advances through direct assignment
 is recognised at the time of sale.
 
 Gain or loss arising on sale of NPAs is accounted as per the guidelines
 prescribed by the RBI, which require provisions to be made for any
 deficit (where sale price is lower than the net book value), while
 surplus (where sale price is higher than the net book value) is
 ignored.
 
 Arrangership/syndication fee is accounted for on completion of the
 agreed service and when right to receive is established.
 
 5.8 Fixed assets and depreciation
 
 Fixed assets are carried at cost of acquisition less accumulated
 depreciation and impairment, if any. Cost includes freight, duties,
 taxes and incidental expenses related to the acquisition and
 installation of the asset.
 
 Capital work-in-progress includes cost of fixed assets that are not
 ready for their intended use and also includes advances paid to acquire
 fixed assets.
 
 Depreciation (including on assets given on operating lease) is provided
 on the straight-line method from the date of addition. The rates of
 depreciation prescribed in Schedule XIV to the Companies Act, 1956 are
 considered as the minimum rates. If the Managements estimate of the
 useful life of a fixed asset at the time of acquisition of the asset or
 of the remaining useful life on a subsequent review is shorter, then
 depreciation is provided at a higher rate based on the Managements
 estimate of the useful life/remaining useful life. Pursuant to this
 policy, depreciation has been provided using the following estimated
 useful lives:
 
 All fixed assets individually costing less than ^5,000 are fully
 depreciated in the year of installation.
 
 Depreciation on assets sold during the year is recognised on a pro-rata
 basis to the Profit and Loss Account till the date of sale.
 
 The carrying amounts of assets are reviewed at each Balance Sheet date
 to ascertain if there is any indication of impairment based on
 internal/external factors. An impairment loss is recognised wherever
 the carrying amount of an asset exceeds its recoverable amount. The
 recoverable amount is the greater of the assets net selling price and
 value in use. In assessing value in use, the estimated future cash
 flows are discounted to their present value at the weighted average
 cost of capital. After impairment, depreciation is provided on the
 revised carrying amount of the asset over its remaining useful life.
 
 5.9 Lease transactions
 
 Assets given on operating lease are capitalised at cost. Rentals
 received by the Bank are recognised in the Profit and Loss Account on
 accrual basis.
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership over the lease term are classified as
 operating lease. Lease payments for assets taken on operating lease are
 recognised as an expense in the Profit and Loss Account on a
 straight-line basis over the lease term.
 
 5.10 Retiremen t and other employee benefits
 
 Provident Fund
 
 Retirement benefit in the form of provident fund is a defined
 contribution scheme and the contributions are charged to the Profit and
 Loss Account of the year when the contributions to the fund are due.
 There are no other obligations other than the contribution payable to
 the trust.
 
 Gratuity
 
 The Bank contributes towards gratuity fund (defined benefit retirement
 plan) administered by the Life Insurance Corporation of India CLIO),
 Metlife Insurance Company Limited (Metlife), HDFC Standard Life
 Insurance Company Limited (HDFC Life) and ICICI Prudential Life
 Insurance Company Limited (ICICI Pru) for eligible employees. Under
 this scheme, the settlement obligations remain with the Bank, although
 UC/Metlife/HDFC Life/ICICI Pru administer the scheme and determine the
 contribution premium required to be paid by the Bank. The plan provides
 a lump sum payment to vested employees at retirement or termination of
 employment based on the respective employees salary and the years of
 employment with the Bank. Liability with regard to gratuity fund is
 accrued based on actuarial valuation conducted by an independent
 actuary using the Projected Unit Credit Method as at 31 March each
 year.
 
 Leave Encashment
 
 Short term compensated absences are provided for based on estimates.
 The Bank provides leave encashment benefit (long term), which is a
 defined benefit scheme based on actuarial valuation conducted by an
 independent actuary. The actuarial valuation is carried out as per the
 Projected Unit Credit Method as at 31 March each year.
 
 Superannuation
 
 Employees of the Bank are entitled to receive retirement benefits under
 the Banks Superannuation scheme either under a cash-out option through
 salary or under a defined contribution plan. Through the defined
 contribution plan, the Bank contributes annually a specified sum of 10%
 of the employees eligible annual basic salary to LIC, which undertakes
 to pay the lumpsum and annuity benefit payments pursuant to the scheme.
 Superannuation contributions are recognised in the Profit and Loss
 Account in the period in which they accrue.
 
 Actuarial gains/losses are immediately taken to the Profit and Loss
 Account and are not deferred.
 
 5.11 Debit/Credit card reward points
 
 The Bank estimates the probable redemption of debit and credit card
 reward points using an actuarial method at the Balance Sheet date by
 employing an independent actuary. Provision for the said reward points
 is then made based on the actuarial valuation report as furnished by
 the said independent actuary.
 
 5.12 Taxation
 
 Income tax expense is the aggregate amount of current tax and deferred
 tax charge. Current year taxes are determined in accordance with the
 Income Tax Act, 1961. Deferred income taxes reflects the impact of
 current year timing differences between taxable income and accounting
 income for the year and reversal of timing differences of earlier
 years.
 
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the Balance Sheet date. Deferred
 tax assets and deferred tax liabilities are offset, if a legally
 enforceable right exists to set off current tax assets against current
 tax liabilities and the deferred tax assets and deferred tax
 liabilities relate to the taxes on income levied by same governing
 taxation laws.
 
 Deferred tax assets are recognised only to the extent that there is
 reasonable certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realised. The
 impact of changes in the deferred tax assets and liabilities is
 recognized in the Profit and Loss Account.
 
 Deferred tax assets are recognized and reassessed at each reporting
 date, based upon the Managements judgement as to whether realisation
 is considered as reasonably certain. Deferred tax assets are recognised
 on carry forward of unabsorbed depreciation and tax losses only if
 there is virtual certainty that such deferred tax asset can be realised
 against future profits.
 
 5.13 Share issue expenses
 
 Share issue expenses are adjusted from share premium account.
 
 5.14 Earnings per share
 
 The Bank reports basic and diluted earnings per share in accordance
 with AS 20, Earnings per Share, as notified by the Companies
 (Accounting Standards) Rules, 2006. Basic earnings per share is
 computed by dividing the net profit after tax by the weighted average
 number of equity shares outstanding for the year.
 
 Diluted earnings per share reflect the potential dilution that could
 occur if securities or other contracts to issue equity shares were
 exercised or converted during the year. Diluted earnings per share is
 computed using the weighted average number of equity shares and
 dilutive potential equity shares outstanding at the year end.
 
 5.15 Employee stock option scheme
 
 The 2001 Employee Stock Option Scheme (the Scheme) provides for grant
 of stock options on equity shares of the Bank to employees and
 Directors of the Bank and its subsidiaries. The Scheme is in accordance
 with the Securities and Exchange Board of India (SEBI) (Employees Stock
 Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The
 Bank follows the intrinsic value method to account for its stock based
 employee compensation plans as per the Guidance Note on Accounting for
 Employee Share-based Payments issued by the ICAI. Options are granted
 at an exercise price, which is equal to/less than the fair market price
 of the underlying equity shares. The excess of such fair market price
 over the exercise price of the options as at the grant date is
 recognised as a deferred compensation cost and amortised on a
 straight-line basis over the vesting period of such options.
 
 The fair market price is the latest available closing price, prior to
 the date of grant, on the stock exchange on which the shares of the
 Bank are listed. If the shares are listed on more than one stock
 exchange, then the stock exchange where there is highest trading volume
 on the said date is considered.
 
 5.16 Provisions, contingent liabilities and contingent assets
 
 A provision is recognised when the Bank has a present obligation as a
 result of past event where it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made.  Provisions are not discounted to its
 present value and are determined based on best estimate required to
 settle the obligation at the Balance Sheet date. These are reviewed at
 each Balance Sheet date and adjusted to reflect the current best
 estimates.
 
 A disclosure of contingent liability is made when there is:
 
 - a possible obligation arising from a past event, the existence of
 which will be confirmed by occurrence or non occurrence of one or more
 uncertain future events not within the control of the Bank; or
 
 - a present obligation arising from a past event which is not
 recognised as it is not probable that an outflow of resources will be
 required to settle the obligation or a reliable estimate of the amount
 of the obligation cannot be made.
 
 When there is a possible obligation or a present obligation in respect
 of which the likelihood of outflow of resources is remote, no provision
 or disclosure is made.
 
 Contingent assets are not recognised in the financial statements.
 However, contingent assets are assessed continually and if it is
 virtually certain that an inflow of economic benefits will arise, the
 asset and related income are recognised in the period in which the
 change occurs.
 
 18 Notes forming part of the financial statements for the year ended 31
 March, 2011
 
 (Currency: In Indian Rupees)
 
 1 On 17 November, 2010, the Board of Directors of the Bank approved the
 acquisition of certain businesses
 
 undertaken by Enam Securities Private Limited (ESPL) through its
 wholly-owned subsidiary, Axis Securities and Sales Limited (ASSL), by
 way of a demerger. It is envisaged that these businesses will be
 transferred to ASSL, pursuant to a Scheme of Arrangement, as may be
 approved by the relevant High Courts under Sections 391 to 394 and
 other relevant provisions of the Companies Act, 1956 and subject to
 receipt of necessary requisite approvals. The appointed date for the
 purpose of the Demerger under the Scheme shall be 1 April, 2010. The
 valuation of the ESPL business was assessed at 72,067 crores and in
 consideration for the demerger, the Bank will issue shares in the ratio
 of 5.7 equity shares of the Bank (aggregating 13,782,600 equity shares)
 of the face value of 710 each for every 1 equity share (aggregating
 2,418,000 equity shares) of 710 each held by the shareholders of ESPL.
 
 2.1.2 In terms of its guidelines for implementation of the new capital
 adequacy framework issued on 27 April, 2007, RBI
 
 directed banks with overseas branches to migrate to the revised
 framework for capital computation (under Basel II) - with effect from
 31 March, 2008. The minimum capital to be maintained by banks under the
 Revised Framework is subject to a prudential floor of 80% of the
 capital requirement under Basel I.
 
 2.1.3 The Bank has not raised any hybrid capital during the years ended
 31 March, 2011 and 31 March, 2010.
 
 # Working funds represent average of total assets as reported to RBI in
 Form X under Section 27 of the Banking Regulation Act, 1949 during the
 year
 
 * Net Customer assets include advances and credit substitutes
 
 ** Productivity ratios are based on average employee numbers for the
 year
 
 2.1.5 The provisioning coverage ratio of the Bank computed in terms of
 the RBI guidelines as on 31 March, 2011 was 80.90% (previous year
 72.38%).
 
 2.1.13 There are no advances as on 31 March, 2011 (previous year: Nil)
 for which intangible securities has been taken as collateral by the
 Bank.
 
 2.1.17 During the years ended 31 March, 2011 and 31 March, 2010 there
 were no Non-Performing Financial Assets Purchased or Sold (excluding
 accounts previously written off) by the Bank.
 
 2.1.26 Disclosure on risk exposure in Derivatives
 
 Qualitative disclosures:
 
 (a) Structure and organisation for management of risk in derivatives
 trading, the scope and nature of risk measurement, risk reporting and
 risk monitoring systems and strategies and processes for monitoring the
 continuing effectiveness of hedges/mitigants:
 
 Derivatives are financial instruments whose characteristics are derived
 from an underlying asset, or from interest and exchange rates or
 indices. The Bank undertakes derivative transactions for Balance Sheet
 management and also for proprietary trading/market making whereby the
 Bank offers derivative products to the customers to enable them to
 hedge their earnings risks within the prevalent regulatory guidelines.
 
 Proprietary trading includes Interest Rate Futures and Rupee Interest
 Rate Swaps under different benchmarks (viz. MIBOR, MIFOR and INBMK),
 Currency Futures and Currency Options for USD/INR pair (both OTC and
 exchange traded). The Bank also undertakes transactions in Cross
 Currency Swaps, Principal Only Swaps,
 
 Coupon Only Swaps, and Long Term Forex Contracts (LTFX) for hedging its
 Balance Sheet and also offers them to its customers. These transactions
 expose the Bank to various risks, primarily credit, market and
 operational risk. The Bank has adopted the following mechanism for
 managing risks arising out of the derivative transactions.
 
 There is a functional separation between the Treasury Front Office,
 Risk and Treasury Back Office to undertake derivative transactions. The
 derivative transactions are originated by Treasury Front Office, which
 ensures compliance with the trade origination requirements as per the
 Banks policy and the RBI guidelines. The Market Risk Group within the
 Banks Risk Department independently identifies, measures and monitors
 the market risks associated with derivative transactions and appraises
 the Asset Liability Management Committee (ALCO) and the Risk Management
 Committee of the Board (RMC) on the compliance with the risk limits.
 The Treasury Back Office undertakes activities such as confirmation,
 settlement, ISDA documentation, accounting and other MIS reporting.
 
 The derivative transactions are governed by the derivative policy,
 hedging policy and the suitability and appropriateness policy of the
 Bank as well as by the extant RBI guidelines. The Bank has also put in
 place a detailed process flow for customer derivative transactions for
 effective management of operational risk/ reputation risk.
 
 Various risk limits are set up and actual exposures are monitored
 vis-a-vis the limits. These limits are set up taking into account
 market volatility, business strategy and management experience. Risk
 limits are in place for risk parameters viz. PV01, VaR, stop loss,
 Delta, Gamma and Vega. Actual positions are monitored against these
 limits on a daily basis and breaches, if any, are reported promptly.
 Risk assessment of the portfolio is undertaken periodically. The Bank
 ensures that the Gross PV01 (Price value of a basis point) position
 arising out of all non-option rupee derivative contracts are within
 0.25% of net worth of the Bank as on Balance Sheet date.
 
 Hedging transactions are undertaken by the Bank to protect the
 variability in the fair value or the cash flow of the underlying
 Balance Sheet item. These deals are accounted on an accrual basis
 except the swap designated with an asset/liability that is carried at
 market value or lower of cost or market value. In that case, the swap
 is marked to market with the resulting gain or loss recorded as an
 adjustment to the market value of designated asset or liability. These
 transactions are tested for hedge effectiveness and in case any
 transaction fails the test, the same is re-designated as a trading deal
 with the approval of the competent authority and appropriate accounting
 treatment is followed.
 
 (b) Accounting policy for recording hedge and non-hedge transactions,
 recognition of income, premiums and discounts, valuation of outstanding
 contracts
 
 The Hedging Policy approved by the Risk Management Committee of the
 Board (RMC) governs the use of derivatives for hedging purpose. Subject
 to the prevailing RBI guidelines, the Bank deals in derivatives for
 hedging fixed rate and floating rate coupon or foreign currency
 assets/liabilities. Transactions for hedging and market making purposes
 are recorded separately. For hedge transactions, the Bank identifies
 the hedged item (asset or liability) at the inception of the
 transaction itself. The effectiveness is ascertained at the time of
 inception of the hedge and periodically thereafter. Hedge derivative
 transactions are accounted for in accordance with the hedge accounting
 principles. Derivatives for market making purpose are marked to market
 and the resulting gain/loss is recorded in the Profit and Loss Account.
 The premium on option contracts is accounted for as per Foreign
 Exchange Dealers Association of India (FEDAI) guidelines. Derivative
 transactions are covered under International Swaps and Derivatives
 Association (ISDA) master agreements with respective counterparties.
 The exposure on account of derivative transactions is computed as per
 the RBI guidelines and is marked against the credit limits approved for
 the respective counterparties.
 
 (c) Provisioning, collateral and credit risk mitigation
 
 Derivative transactions comprise of swaps and options which are
 disclosed as contingent liabilities. The swaps/ options are segregated
 as trading or hedging. Trading swaps/options are revalued at the
 Balance Sheet date with the resulting unrealised gain or loss being
 recognised in the Profit and Loss Account and correspondingly in other
 assets or other liabilities respectively. Hedged swaps are accounted
 for as per the RBI guidelines.  Pursuant to the RBI guidelines, any
 receivables under derivatives contracts, which remain overdue for more
 than 90 days, are reversed through the Profit and Loss Account and are
 held in a separate suspense account.
 
 Collateral requirements for derivative transactions are laid down as
 part of credit sanction terms on a case by case basis. Such collateral
 requirements are determined, based on usual credit appraisal process.
 The Bank retains the right to terminate transactions as a risk
 mitigation measure in certain cases.
 
 The credit risk in respect of customer derivative transactions is
 sought to be mitigated through a laid down policy on sanction of Loan
 Equivalent Risk (LER) limits, monitoring mechanism for LER limits and
 trigger events for escalation/margin calls/termination.
 
 2.1.27 No penalty/strictures have been imposed on the Bank during the
 year or in the previous year by the Reserve Bank of India.
 
 2.1.30 Draw Down from Reserves
 
 During the year, the Bank has made a draw down out of the investment
 reserve account towards depreciation in investments in AFS and HFT
 categories in terms of the RBI guidelines.
 
 2.1.31 Letter of Comfort
 
 The Bank has not issued any Letter of Comfort (LoC) on behalf of its
 subsidiaries.
 
 2.1.33 The Bank has not sponsored any special purpose vehicle which is
 required to be consolidated in the consolidated financial statements as
 per accounting norms.
 
 2.2 Other disclosures
 
 2.2.1 During the year, the Bank has appropriated Rs.4.76 crores (previous
 year Rs.223.92 crores), net of taxes and transfer to statutory reserve to
 Capital Reserve, being the gain on sale of HTM investments in
 accordance with the RBI guidelines.
 
 2.2.3 Employee Stock Options Scheme (the Scheme)
 
 In February 2001, pursuant to the approval of the shareholders at the
 Extraordinary General Meeting, the Bank approved an Employee Stock
 Option Scheme. Under the Scheme, the Bank is authorised to issue upto
 13,000,000 equity shares to eligible employees. Eligible employees are
 granted an option to purchase shares subject to vesting conditions. The
 options vest in a graded manner over 3 years. The options can be
 exercised within 3 years from the date of the vesting. Further, over
 the period June 2004 to June 2010, pursuant to the approval of the
 shareholders at Annual General Meetings, the Bank approved an ESOP
 scheme for additional options aggregating 27,517,400.  Within the
 overall ceiling of 40,517,400 stock options approved for grant by the
 shareholders as stated earlier, the Bank is also authorised to issue
 options to employees and directors of the subsidiary companies.
 
 33,707,690 options have been granted under the Scheme till the previous
 year ended 31 March, 2010.
 
 On 20 April, 2010, the Bank granted 2,723,500 stock options (each
 option representing entitlement to one equity share of the Bank) to its
 employees and the MD & CEO. These options can be exercised at a price
 of Rs.1,159.30 per option. Further, on 7 and 8 June, 2010, the Bank also
 granted 10,000 and 181,700 stock options (each option representing
 entitlement to one equity share of the Bank) to an employee (on joining
 the Bank) and employees of Axis Asset Management Company Limited, a
 subsidiary of the Bank respectively. These options can be exercised at
 a price of Rs.1,245.45 and Rs.1,214.80 per option respectively.
 
 2.2.4 Dividend paid on shares issued on exercise of stock options
 
 The Bank may allot shares between the Balance Sheet date and record
 date for the declaration of dividend pursuant to the exercise of any
 employee stock options. These shares will be eligible for full dividend
 for the year ended 31 March, 2011, if approved at the ensuing Annual
 General Meeting. Dividend relating to these shares has not been
 recorded in the current year.
 
 Appropriation to proposed dividend during the year ended 31 March, 2011
 includes dividend of Rs.2.47 crores (previous year Rs.0.51 crores) paid
 pursuant to exercise of 1,766,860 employee stock options after the
 previous year end and record date for declaration of dividend for the
 year ended 31 March, 2010.
 
 Revenues of the Treasury segment primarily consist of fees and gains or
 losses from trading operations and interest income on the investment
 portfolio. The principal expenses of the segment consist of interest
 expense on funds borrowed from external sources and other internal
 segments, premises expenses, personnel costs, other direct overheads
 and allocated expenses.
 
 Revenues of the CorporateAA/holesale Banking segment consist of
 interest and fees earned on loans given to customers falling under this
 segment and fees arising from transaction services and merchant banking
 activities such as syndication and debenture trusteeship. Revenues of
 the Retail Banking segment are derived from interest earned on loans
 classified under this segment and fees for banking and advisory
 services, ATM interchange fees and cards products. Expenses of the
 CorporateAVholesale Banking and Retail Banking segments primarily
 comprise interest expense on deposits and funds borrowed from other
 internal segments, infrastructure and premises expenses for operating
 the branch network and other delivery channels, personnel costs, other
 direct overheads and allocated expenses.
 
 Segment income includes earnings from external customers and from funds
 transferred to the other segments.  Segment result includes revenue as
 reduced by interest expense and operating expenses and provisions, if
 any, for that segment. Segment-wise income and expenses include certain
 allocations. Inter segment interest income and interest expense
 represent the transfer price received from and paid to the Central
 Funding Unit (CFU) respectively.  For this purpose, the funds transfer
 pricing mechanism presently followed by the Bank, which is based on
 historical matched maturity and market-linked benchmarks, has been
 used. Operating expenses other than those directly attributable to
 segments are allocated to the segments based on an activity-based
 costing methodology. All activities in the Bank are segregated
 segment-wise and allocated to the respective segment.
 
 2.2.6 Related party disclosure
 
 The related parties of the Bank are broadly classified as:
 
 a) Promoters
 
 The Bank has identified the following entities as its Promoters.
 
 - Administrator of the Specified Undertaking of the Unit Trust of India
 (UTI-1)
 
 - Life Insurance Corporation of India (LIC)
 
 - General Insurance Corporation and four Government-owned general
 insurance companies - New India Assurance Co. Ltd., National Insurance
 Co. Ltd., United India Insurance Co. Ltd. and The Oriental Insurance
 Co. Ltd.
 
 b) Key Management Personnel
 
 - Mrs. Shikha Sharma (Managing Director & Chief Executive Officer)
 
 - Mr. M. M. Agrawal (Erstwhile Deputy Managing Director) upto 31
 August, 2010
 
 - Mr. Sisir Kumar Chakrabarti (Deputy Managing Director) with effect
 from 27 September, 2010
 
 c) Relatives of Key Management Personnel
 
 Mr. Sanjaya Sharma, Mrs. Usha Bharadwaj, Mr. Tilak Sharma, Ms. Tvisha
 Sharma, Dr. Sanjiv Bharadwaj, Dr. Prashant Bharadwaj, Dr. Brevis
 Bharadwaj, Dr. Reena Bharadwaj, Mrs. Bharti Agrawal, Mr. Vedprakash
 Agrawal, Mrs. Gayatri Devi Agrawal, Mr. Amit M. Agrawal, Mrs. Rinki
 Agrawal, Master Kaustubh Agrawal, Ms.  Prashasti Agrawal, Mr. Anand
 Agrawal, Mr. Praveen Agrawal, Mrs. Rekha Agrawal, Mrs. Renu Agrawal,
 Mrs.  Meenu Agrawal, Mrs. Swapna Chakraborty, Mrs. Shikha Bhattacharya,
 Ms. Shila Chakraborty, Mr. Hirendra Nath Chakraborty, Mr. Rajat
 Chakraborty, Mrs. Devikalpa Chakraborty (Kundu), Master Ahan
 Chakraborty, Mr. Nabakumar Chakraborty, Mr. Prabir Chakraborty, Mrs.
 Minati Chakraborty, Mrs. Krishna Chakraborty, Mrs. Sipra Chakraborty,
 Mr. AsimKumar Chakraborty, Mr. Arunabha Bhattacharya
 
 d) Subsidiary Companies
 
 - Axis Securities and Sales Limited
 
 - Axis Private Equity Limited
 
 - Axis Trustee Services Limited
 
 - Axis Asset Management Company Limited
 
 - Axis Mutual Fund Trustee Limited
 
 - Axis U.K. Limited
 
 e) Associate
 
 - Bussan Auto Finance India Private Limited
 
 The above investment does not fall within the definition of a Joint
 Venture as per AS 27, Financial Reporting of Interest in Joint
 Ventures, notified under the Companies (Accounting Standards) Rules,
 2006, and the said accounting standard is thus not applicable. However,
 pursuant to RBI guidelines, the Bank has classified the same as
 investment in joint ventures in the Balance Sheet. Such investment has
 been accounted as an Associate from the current year in line with AS
 23, Accounting for Investment in Associates in Consolidated Financial
 Statements notified under the Companies (Accounting Standards) Rules,
 2006. Based on RBI guidelines, details of transactions with Associates
 are not disclosed since there is only one entity/party in this
 category.
 
 2.2.7 Leases
 
 Disclosure in respect of assets given on operating lease
 
 The Bank has not given any assets on operating lease.
 
 Disclosure in respect of assets taken on operating lease
 
 Operating lease comprises leasing of office premises/ATMs, staff
 quarters, electronic data capturing machines and IT equipment.
 
 2.2.10 Employee Benefits
 
 Provident Fund
 
 The contribution to the employees provident fund amounted to Rs.41.83
 crores (previous year Rs.37.10 crores) for the year.
 
 The rules of the Banks Provident Fund administered by a Trust require
 that if the Board of Trustees are unable to pay interest at the rate
 declared for Employees Provident Fund by the Government under para 60
 of the Employees Provident Fund Scheme, 1952 for the reason that the
 return on investment is less or for any other reason, then the
 deficiency shall be made good by the Bank. Having regard to the assets
 of the Fund and the return on the investments, the Bank does not expect
 any deficiency in the foreseeable future. There has also been no such
 deficiency since the inception of the Fund.
 
 Superannuation
 
 The Bank contributed Rs.10.17 crores (previous year Rs.9.67 crores) to the
 employees superannuation plan for the year.
 
 Leave Encashment
 
 The Bank charged an amount of Rs.70.65 crores (previous year Rs.36.52
 crores) towards leave encashment for the year.
 
 Gratuity
 
 The following tables summarise the components of net benefit expenses
 recognised in the Profit and Loss Account and funded status and amounts
 recognised in the Balance Sheet for the Gratuity benefit plan.
 
 2.2.11 Provisions and contingencies
 
 a) Movement in provision for frauds included under other liabilities is
 set out below: