1.  During the year, the Bank annulled the forfeiture in respect of Nil
 (previous year 200) equity shares of face value of Rs. 10 each.
 Consequently, an amount of Rs. Nil (previous year Rs. 2000) has been
 transferred from forfeited Shares Account to paid up capital.
 
 2.  Balancing of Subsidiary Ledger Accounts and confirmation /
 reconciliation of balances with foreign branches and NOSTRO Accounts,
 and adjustment of entries in Suspense, Drafts Payable, Clearing
 Difference, etc. is in progress on an on-going basis.  Pending final
 clearance/adjustment of the above, the overall impact, if any, on the
 accounts, in the opinion of the management, is not likely to be
 significant.
 
 Initial matching of debit & credit outstanding entries in various heads
 of accounts included in Inter office Adjustments has been completed up
 to 15.03.2011 for the purpose of reconciliation, which, is in progress.
 Pending final clearance/adjustment of the above, including foreign
 branches the overall impact, if any, on the accounts, in the opinion of
 the management, is not likely to be significant.
 
 3.  The following information is disclosed in terms of guidelines
 issued by RBI:
 
 (b) Non-performing assets (NPAs)
 
 The percentage of net NPAs to net advances as at 31st March, 2011 is
 0.91% (Previous year 1.31%).
 
 (e) Asset Liability Management
 
 Maturity pattern of certain items of assets and liabilities
 
 During the year, maturity pattern assumptions of assets and liabilities
 have been modified based on empirical studies of the data.
 
 The above data has been compiled on the basis of the guidelines of RBI
 and above mentioned modified assumptions of the management, which have
 been relied upon by Auditors.
 
 The exposure to capital market Rs. 3247.43 crore is within the limit of
 Rs. 4982.40 crores (i.e. 40% of Banks Net Worth Rs. 12456.00 crores as
 on 31.03.2010). The direct exposure to capital market is Rs. 1078.53
 crores and is within 20% of banks Net Worth (Rs. 2491.20 crores as on
 31.03.2010)
 
 (r) Derivatives
 
 Forward Rate Agreement/ Interest Rate Swap
 
 Note: The terms of swaps are either to receive fixed interest and pay
 floating rate or to pay fixed interest and receive floating rate. A few
 floating to floating deals are undertaken to hedge interest rate risk
 on interest bearing assets and liabilities/trading purposes.
 
 (A) No collaterals were required for the swaps as counterparty was
 either banks or premier corporates.
 
 (B) There is no concentration of credit risk arising from the interest
 rate swaps undertaken during the year.
 
 (t) Risk Exposure in Derivatives i.  Qualitative Disclosure
 
 The Bank enters into derivative contracts such as interest rate swaps,
 currency swaps and currency options to hedge on balance sheet assets
 and liabilities or to meet client requirements as well as for trading
 purpose as per policy approved by the Board. These products are used
 for hedging risk, reducing cost and increasing the yield. In such
 transactions the types of risks to which the bank is exposed to, are
 credit risk, market risk, operational risk etc.
 
 Risk management is an integral part of banks business management. Bank
 has risk management policies designed to identify and analyse risks, to
 set appropriate risk limits and to monitor these risks and limits on an
 ongoing basis by means of management information systems. The risk
 management policies and major control limits are approved by the Board
 of Directors and they are monitored and reviewed regularly. The
 organization of the Bank is conducive to managing risks. There is
 sufficient awareness of the risks and the size of exposure of the
 trading activities in derivative operations.
 
 The Bank has a Risk Management Committee of Directors presided over by
 the Chairman and Managing Director.
 
 Hedging swaps are accounted for an accrual basis
 
 except for swap designated with an asset and liability that is carried
 at market value or lower of cost / market value. In such cases, the
 swaps are mark to market and the resulting gain or loss is recorded as
 on adjustment to the market value of the designated assets or
 liability. Gains or losses on the termination of swaps are recognised
 when the offsetting gain or loss is recognised on the designated asset
 or liability. This implies that any gain or loss on the terminated swap
 would be deferred and recognised over the shorter of the remaining
 contracting life of the swap or the remaining life of the asset/
 liability.
 
 Trading derivative positions are mark to market (MTM) and resulting
 losses, if any, are recognised in the profit or loss account. Profit,
 if any, are not recognised. Income and expenses relating to the
 derivative contracts are recognised on the settlement date. Gains or
 losses on the termination of trading swaps are recorded as immediate
 income or expenses.
 
 Bank has a proper system of submitting periodical reports to Senior and
 Top Management and Board as well as regulatory authorities as required
 by RBI and/or as per operational requirements. The derivative
 transactions are subject to concurrent, internal, statutory and
 regulatory audits.
 
 The counter parties to the transactions are banks, primary dealers and
 corporate entities. The deals are done under approved exposure limits.
 The Bank has adopted the Current Exposure method prescribed by Reserve
 Bank of India for measuring Credit Exposures arising on account of
 derivative transactions.
 
 Under the current exposure method, the credit risk exposure/ credit
 equivalent amount of derivative products is computed periodically on
 the basis of the market value of the product to arrive at its current
 replacement cost. Thus, the credit equivalent of the derivative
 contract would be the sum of the following two components.
 
 A) The total replacement cost – obtained by “marking to market” of all
 the contracts with positive value (i.e. when the Bank has to receive
 money from the counter party): and
 
 B) An amount for ‘potential future exposure- calculated by multiplying
 the total notional principal amount of the contract by the following
 credit conversion factor according to the residual maturity of the
 contract.
 
 While computing the credit exposure, “sold options” are excluded
 wherever the entire premium / fee or any other form of income is
 received / realized.
 
 As per the extant RBI guidelines credit exposures computed as per the
 current Mark to Market value of the contracts, also attracts
 provisioning requirement as applicable to the loan assets in the
 “Standard” category, of the concerned counterparty. At present the
 provision is to be maintained at 0.4% of the risk weighted assets. The
 Bank makes the requisite provision as aforesaid in our books
 
 (y) Disclosures of Penalties imposed by RBI: During the financial year
 2010-11, the Bank has not been subjected to any penalty for
 contravention or non- compliance with any requirement of the Banking
 Regulation Act, 1949, or any rules or conditions specified by the
 Reserve Bank of India in accordance with the said Act.
 
 (z) Draw down from Reserves:
 
 During the year, the bank has drawn down an amount of Rs. 1.44 crores
 (Previous year Rs. 1.06 Crores) from special reserve currency swaps in
 terms of RBI guidelines
 
 (aa) Income Tax:
 
 I) Claims against the Bank not acknowledged as debt under contingent
 liabilities (Schedule 12) include disputed income tax / interest tax
 liabilities of Rs. 530.59 crore for which no provision is considered
 necessary based on various judicial decisions for past assessments on
 such disputes. Payments/adjustments against the said disputed dues are
 included under Other Assets (Schedule 11).
 
 II) Provision for income tax for the year is arrived at after due
 consideration of the various judicial decisions on certain disputed
 issues.
 
 (ab) Letter of comfort issued by Bank in respect of subsidiaries (As
 compiled by Management) – During the year the Bank has issued parental
 guarantee in favour of Royal Bank of New Zealand, for our wholly owned
 subsidiary, BOI (New Zealand) Ltd.  The financial impact is Nil, as
 subsidiary has not yet commenced operation.
 
 (ad) Shifting of securities:
 
 For the year ended 31-03-2011, Bank has shifted securities amounting to
 Rs. 4818.27 crores from HTM to AFS category and Rs. 12.56 crores loss
 has been booked. Further, securities amounting to Rs. 9016.80 crores
 was shifted from AFS to HTM category and Rs. 317.52 crores loss has
 been booked upon such transfer
 
 For the year ended 31-03-2011, Bank has shifted securities amounting to
 Rs. 100.37 crores from HFT to AFS category and loss on such transfer
 amounting to Rs. 16.67 crores has been provided for during the year.
 
 (al) Off-balance Sheet SPVs sponsored (which are required to be
 consolidated as per accounting norms)
 
 Name of the SPV sponsored
 
 Domestic        Overseas
 
    NIL            NIL
 
 (am) Fees, remuneration received from bancassurance business:
 
 For the year ended 31.03.2011, the bank received income of Rs. 33.96
 Crore (Previous year Rs 32.36 crores) from Bancassurance business.
 
 (ao) Profit on sale of Investments held under “Held to Maturity”
 category amounting to Rs. 9.95 crores has been taken to the Profit &
 Loss Account and thereafter an amount of Rs. 4.98 crores has been
 appropriated to the Capital Reserve, net of taxes and transfer to
 Statutory Reserve under section 17 of the Banking Regulation Act, 1949.
 
 (ap) During the year, Bank has sold 3% stake in one of its subsidiary –
 Star Union Daichi Life Insurance Co.  Ltd., resulting which Banks
 stake has reduced to 48%.  Accordingly, this Company has been
 de-recognized as its subsidiary.
 
 4.  Other Disclosures required by Accounting standards
 
 The following information is disclosed in terms of Accounting Standards
 issued by the Institute of Chartered Accountants of India.
 
 a) Accounting Standard 15 (Revised) – Employee Benefits
 
 The effect of transitional liability till 31.03.2007 as required by the
 accounting standard has been recognised as an expense on straight line
 basis over a period of five years pursuant to limited revision of
 Standard on 17.10.2007. Accordingly, an amount of Rs. 125.27 crore has
 been charged to the Profit and Loss account for the year ended
 31.03.2011 being 1/5th of the total transitional liability. An amount
 of Rs. 125.27 crore is being carried forward to be charged to Profit &
 Loss account of next year.
 
 ii) As per the past practice, the bank has recognised contribution to
 employee provident fund as an expense.  During the year, the bank has
 contributed Rs. 56.83 crores (previous year Rs. 68.64 crores) towards
 such fund which is a defned contribution plan.
 
 iii) During the year, the Bank reopened the pension option for such of
 its employees who had not opted for the pension scheme earlier. As a
 result of exercise of which by 22,338 employees, the bank has incurred
 a liability of Rs. 2,212.15 Crores. Further, during the year, the limit
 of gratuity payable to the employees of the banks was also enhanced
 pursuant to the amendment to the Payment of Gratuity Act, 1972. As a
 result the gratuity liability of the Bank has increased by Rs. 428.96
 Crores.
 
 In terms of the requirements of the Accounting Standard (AS) 15,
 Employee Benefits, the entire amount of Rs. 2,641.11Crores (i.e. Rs.
 2,215.15 Crores + Rs. 428.96 Crores) is required to be charged to the
 Profit and Loss Account. However, the Reserve Bank of India has issued
 a circular no. DBOD.BPBC.80/21.04.018/2010-11) on Re-opening of Pension
 Option to Employees of Public Sector Banks and Enhancement in Gratuity
 Limits – Prudential Regulatory Treatment, dated 9th February 2011. In
 accordance with the provisions of the said Circular, the Bank would
 amortise the amount of Rs. 2,641.11 over a period of five years.
 Accordingly Rs. 528.22 Crores (representing one-fifth of Rs. 2,641.11
 Crores) has been charged to the Profit and Loss Account. In terms of
 the requirements of the aforesaid RBI circular, the balance amount
 carried forward, i.e., Rs. 2,112.89 Crores (Rs. 2,641.11 Crores – Rs.
 528.22 Crores) does not include any amount relating to the employees
 separated/ retired.
 
 Had such a circular not been issued by the RBI, the profit of the bank
 would have been lower by Rs. 2112.89 Crores pursuant to application of
 the requirements of AS 15.
 
 / (b) Accounting Standard 17 - Segment Reporting :
 
 1. The Bank has recognised Business Segments as Primary reporting
 segment and Geographical Segments as Secondary segment in line with RBI
 guidelines in compliance with Accounting Standard 17.
 
 Primary Segment: Business Segments
 
 a) Treasury Operations: ‘Treasury for the purpose of Segment Reporting
 includes the entire investment portfolio i.e. dealing in Government and
 other Securities, Money Market Operations and Forex Operations.
 
 b) Wholesale Banking: Wholesale Banking includes all advances which are
 not included under Retail Banking.
 
 c) Retail Banking: Retail Banking includes exposures which fulfil
 following two criteria:
 
 i) Exposure – The maximum aggregate exposure up to Rs.  5 Crore
 
 ii) The total annual turnover is less then Rs. 50 crore i.e.  the
 average turnover of the last three years in case of existing entities
 and projected turnover in case of new entities.
 
 Pricing of Inter-Segmental transfers
 
 Retail Banking Segment is a Primary resource mobilising unit and
 Wholesale Segment and Treasury Segment compensates the Retail banking
 segment for funds lent by it to them taking into consideration the
 average cost of deposits incurred by it.
 
 Allocation of Costs
 
 a) Expenses directly attributed to particular segment are allocated to
 the relative segment.
 
 b) Expenses not directly attributable to specific segment are allocated
 in proportion to number of employees / business managed.
 
 Secondary Segment: Geographical Segments
 
 a) Domestic Operations
 
 b) International Operations
 
 (c) Accounting Standard 18 - Related Party Transactions:
 
 I) List of Related Parties:
 
 (a) Key Managerial Personnel :
 
 Chairman &
 Managing
 Director           : Shri Alok K Misra
 
 Executive
 Directors          : Shri B.A. Prabhakar
 
                      Shri M. Narendra (till 31.10.2010)
 
                      Shri N. Seshadri (from 01.11.2010)
 
 (b) Subsidiaries :
 
 (i) BOI Shareholding Ltd.
 
 (ii) PT Bank Swadesi
 
 (iii) BOI Tanzania Ltd.
 
 (iv) Bank of India (New Zealand) Ltd.
 
 (c) Associates :
 
 (i) Securities Trading Corporation of India Ltd.  
 
 (ii) Star Union Dai – ichi Life Insurance Company Ltd.  
 
 (iii) ASREC (India) Ltd.
 
 (iv) Indo-Zambia Bank Ltd.  
 
 (v) 5 Regional Rural Banks sponsored by the Bank
 
 Aryavart Gramin Bank; Baitarni Gramya Bank; Jharkhand Gramin Bank;
 Narmada Malwa Gramin Bank; Wainganga Krishna Gramin Bank;
 
 (b) Key Management Personnel :
 
 The transactions with the Subsidiaries and Regional Rural banks, being
 state controlled, have not been disclosed in view of para 9 of AS-18 on
 Related party disclosure issued by the ICAI exempting state controlled
 enterprises from making any disclosure pertaining to their transactions
 with other related parties which are also state controlled.
 
 (d) Accounting Standard 19 – Lease Financing:
 
 (ii) Lease income of Nil (Previous year Rs. 0.19 crore) is included
 under Interest earned.
 
 (g) Details of movement in provisions in accordance with Accounting
 Standard 29, “Provisions, Contingent Liabilities and Contingent
 Assets”:
 
 B.  Contingent Liabilities
 
 Such Liabilities as mentioned are dependent upon, the outcome of court
 order/arbitration/out of court settlement, disposal of appeals, the
 amount being called up, terms of contractual obligations, devolvement
 and raising of demand by concerned parties, as the case may be. No
 reimbursement is expected in such case.
 
 5.  Previous years figures have been regrouped/rearranged, wherever
 considered necessary.