1.  During the year bank has allotted 2,73,00,000 equity shares of Rs
 10/- each at a premium of Rs 370.02 per share to Life Insurance
 Corporation of India as determined by the Board in terms of the Chapter
 VII of the Securities Exchange Board of India (SEBI) Regulations, 2009,
 as amended from time to time (the SEBI ICDR Regulations) on
 preferential basis. The total amount of capital received by the bank on
 this account is Rs 1037.45 crore and consequently the Government holding
 has decreased from 65.86% to 62.72%.
 
 2.  Balancing of Subsidiary Ledger Accounts and
 confirmation/reconciliation of balances with foreign branches and
 NOSTRO Accounts, and Suspense, Drafts Payable, Clearing Difference,
 etc. is in progress on an on-going basis. 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.
 
 As regards Inter office adjustments, initial matching of debit and
 credit outstanding entries has been completed upto 31st March 2012.
 Reconciliation of residual entries is in progress. Pending final
 clearance/ adjustment of the entries, 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:
 
 3.1 Sale and transfers to/from HTM Category:
 
 The value of sales and transfers of securities to/from HTM category has
 not exceeded 5% of the book value of investments held in HTM category
 at the beginning of the year.
 
 3.2 Disclosures on 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 bank''s 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 reliable and up to date 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 on 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 marked to
 market and the resulting gain or loss is recorded as an adjustment to
 the market value of the designated asset 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 marked to market (MTM) and the
 resulting losses, if any, are recognised in the profit and loss
 account. Profit, if any, are not recognised on the settlement date.
 Gains or losses on termination of 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. Bank has clearly spelt
 derivative guidelines on various aspects approved by the Board of
 Directors. 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 interest rate and foreign exchange derivative transactions. Current
 exposure method is the sum of current credit exposure and potential
 future exposure of these contracts.
 
 The current credit exposure is the sum of positive mark to market value
 of these contracts i.e. when the Bank has to receive money from the
 counter party.
 
 Potential future credit exposure is determined by multiplying the
 notional principal amount of these contracts irrespective of whether
 the contract has zero, positive or negative mark to market value by the
 relevant add-on factors as under according to the nature and residual
 maturity of the instrument.
 
 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 counter party. 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 the books.
 
 Exposure is reckoned as Sanctioned Limit or Balance outstanding
 whichever is higher. The above position is arrived at after taking into
 consideration all exposure such as Interest Rate Swaps, Derivatives and
 Forward Exchange Contracts)
 
 Housing Development Finance Corporation Limited has been considered as
 NBFC based on RBI''s views contained in their report on Annual Financial
 Inspection for 2010-11.
 
 Tax expense for the year is after recognising Minimum Alternate Tax
 (MAT) credit entitlement of Rs 77.01 crore for earlier years.
 
 3.3 Disclosures of Penalties imposed by RBI
 
 During the financial year 2011-12, 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, except
 for a penalty of Rs 1 lakh paid to RBI for bouncing of SGL deal which
 was subsequently recovered from the constituent.
 
 4. Disclosure requirements as per Accounting Standards (AS) where RBI
 has issued guidelines in respect of disclosure items for Notes to
 Accounts:
 
 4.1 Accounting Standard 9 - Revenue recognition
 
 Certain items of income are recognised on realisation basis as per
 Accounting Policy no. 2 of Schedule 17: Significant Accounting
 Policies. However, the said income is not considered to be material.
 
 i) 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 Crores has
 been charged to the Profit and Loss account for the year ended
 31.03.2012 being 1/5th of the total transitional liability.
 
 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 28.67 crore (previous year Rs 56.83 crore) towards such
 fund which is a defined contribution plan.
 
 iii) During the year ended 31.03.2011, 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 crore. Further, during
 the year ended 31.03.2011, 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 crore.
 
 iv) In terms of the requirements of the Accounting Standard (AS) 15 :
 Employee Benefits, the entire amount of Rs 2,641.11 crore (i.e. Rs
 2,212.15 crore   Rs.428.96 crore) was required to be charged to the
 Profit and Loss Account during the year ended 31.03.2011. However, the
 Reserve Bank of India issued a circular no.
 DBOD.BP.BC.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 crore over a period of five years.  Accordingly an
 amount of Rs 528.22 crore (representing one-fifth of Rs 2,641.11 crore)
 has been charged to the profit and loss account for the current year
 and the balance of Rs 1,584.67 crore is being carried forward to be
 charged to profit and loss account of the bank in the coming years.
 
 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 Crores
 
 ii) The total annual turnover is less than Rs 50 Crores 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
 
 4.2 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 N. Seshadri
 
 Shri. M. S. Raghavan (w.e.f. 01.01.2012)
 
 Shri. B. A. Prabhakar (upto 15.12.2011)
 
 (b) Subsidiaries :
 
 (i) BOI Shareholding Limited.
 
 (ii) PT Bank of India Indonesia Tbk (Formerly known as PT Bank
 Swadeshi)
 
 (iii) Bank of India (Tanzania) Ltd.
 
 (iv) Bank of India (New Zealand) Limited.
 
 (v) Bank of India (Uganda) Ltd.
 
 (c) Associates :
 
 (i) STCI Finance Limited.
 
 (Formerly known as Securities Trading Corporation of India Ltd.)
 
 (ii) ASREC (India) Ltd.
 
 (iii) Indo-Zambia Bank Ltd.
 
 (iv) 5 Regional Rural Banks sponsored by the Bank
 
 Aryavart Gramin Bank; Baitarani Gramya Bank; Jharkhand Gramin Bank;
 Narmada Malwa Gramin Bank; Wainganga Krishna Gramin Bank;
 
 (d) Joint Venture :
 
 (i) Star Union Dai-Ichi Life Insurance Co. Ltd.
 
 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.
 
 4.3 Accounting Standard 27 - Investments in Joint Venture
 
 Investments include Rs 120 crore (Previous year Rs 120 crore)
 representing Bank''s interest in the following jointly controlled
 entity:
 
 4.4 Accounting Standard 19 - Lease Financing
 
 (i) The contractual maturities of the Bank''s investment in lease
 financing and its components, which are included in advances, are set
 out below:
 
 B. Contingent Liabilities
 
 Such liabilities 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 cases.
 
 5.1 Draw Down from Reserves
 
 During the year, the bank has made a draw down of Rs 3.19 crore
 (Previous year Rs 1.44 crore) from the Special reserve currency swaps in
 terms of the RBI guidelines.
 
 5.2 Disclosure of Letters of Comfort (LoCs) issued by bank
 
 (As compiled by Management)
 
 During the year 2011-2012, the Bank has issued an undertaking to the
 Governor, Bank of Botswana in respect of its wholly owned subsidiary,
 Bank of India (BTW) Ltd. (yet to be opened) to meet its financial
 commitments if they fall due.
 
 During the year 2010-11 the Bank issued parental guarantee in favour of
 Royal Bank of New Zealand, for its wholly owned subsidiary, BOI (New
 Zealand) Ltd. to meet its financial obligations, if they fall due.
 
 However, as on 31.03.2012 no financial obligations have arisen on the
 above commitments.
 
 5.3 Provisioning Coverage Ratio (PCR)
 
 The Provisioning to Gross Non-Performing Assets of the Bank as on 31st
 March 2012 is 64.18% (Previous year: 72.18%)
 
 5.4 Unamortised Pension and Gratuity Liabilities:
 
 As per the Reserve Bank of India circular no. DBOD.
 BP.BC.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, the Bank
 opted to amortise the said liability of Rs 2,641.11 Crores 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 1,584.67 Crores (Rs 2,641.11 Crores
 minus Rs 1056.44 Crores) does not include any amount relating to the
 employees separated/retired.
 
 6.  Other Notes
 
 a) 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 420.67 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.
 
 b) Shifting of securities:
 
 i) For the year ended 31-03-2012, Bank has shifted securities amounting
 to Rs 981.67 crore from HTM to AFS category and Rs 4.83 Crores loss has
 been booked as loss on such transfer.
 
 ii) Securities amounting to Rs 7,340.94 Crores were shifted from AFS to
 HTM category and loss arised upon such transfer amounting to Rs 200.01
 Crores has been provided for during the year.
 
 iii) For the year ended 31.03.2012, bank has shifted portfolio of
 Venture Fund amounting Rs 29.55 crores from HTM to AFS and Rs3.11 crores
 of loss has arised due to such transfer.
 
 (d) Profit on sale of Investments held under Held to Maturity
 category amounting to Rs 19.98 crore has been taken to the Profit & Loss
 Account and thereafter an amount of Rs 10.12 crore has been appropriated
 to the Capital Reserve, net of taxes and transfer to Statutory Reserve
 under section 17 of the Banking Regulation Act, 1949.