1 Investments:
 
 The percentage of investments under Held to Maturity category - SLR
 as on 31.03.2012 was 22.67% of Demand and Time Liability of the Bank
 (Previous year 22.78%), which is within the permissible limit as per
 RBI guidelines.
 
 2 Inter-Branch Transactions:
 
 The initial matching of entries received at Head Office for the purpose
 of reconciliation under Inter- Branch transactions upto 31.03.2012 has
 been done.  However, Bank is continuing its efforts to reconcile and
 reduce the remaining out standing entries.
 
 3 Premises:
 
 Premises include certain properties having original cost of Rs=215.70
 Crore (Previous year Rs=193.02 Crore) in respect of which conveyance
 deeds are pending execution.
 
 Certain properties of the bank are stated at revalued amounts. The gross
 amount of revaluation is Rs 2310.91 Crore (Previous year Rs=2310.91 Crore)
 and net of depreciation is Rs 2065.14 Crore (Previous year Rs 2098.36Crore).
 
 (*) Provision for Depreciation - Rs 510.39 Crore (Previous Year Rs=255.48
 Crore), Provision for NPI- Rs 111.81 Crore (Previous year Rs 127.25 Crore)
 and Exchange fluctuation -=Rs=7.70 Crore (Previous year Rs=0.85 Crore)
 
 (*)Provision for Depreciation of Rs300.49Crore (Previous Year-Rs=89.52
 Crore), Provision for NPI of Rs=_6.88 Crore (Previous Year - Rs=11.93
 Crore), Exchange Fluctuation of Rs=P.70 Crore (Previous Year-Rs=0.85
 Crore)
 
 (**)Write back of excess provision for Depreciation of Rs=44.70 Crore
 (Previous Year - Rs=4.53 Crore), Provision for NPI of Rs 34.05 Crore
 (Previous Year-Rs=8.21 Crore).
 
 4.1 Sale and transfers to/from HTM Category:
 
 The value of sale and transfers of securities to/from HTM category
 during the year does not exceed five percent of the book value of the
 investment held in HTM category as on 01.04.2011.
 
 4.2 Disclosure on risk exposure in derivatives:
 
 I Qualitative Disclosure
 
 The Treasury Risk Management Policy for using Derivative Instruments to
 hedge bank''s Assets/Liabilities has been approved by the Board of
 Directors.
 
 A.  The Investment Portfolio of the Bank consists of assets with
 characteristics such as fixed interest rate, zero coupon and floating
 interest rates and is subject to interest rate risk. The Bank also has
 Tier II bonds hedged for interest rate swaps which do not have exit
 options. The policy permits hedging the interest rate risk on this
 liability as well.
 
 Bank is permitted to use FRA and IRS (only plain vanilla transactions
 are permitted). These instruments are used not only for hedging the
 interest rate risk in the investment portfolio but also
 for market making.
 
 Bank has been undertaking derivatives trades like IRS, FRAs, etc for the
 purpose of hedging Foreign Currency liabilities. Options and Swaps are
 also undertaken on behalf of clients on back to back basis. The Bank
 is yet to start Option book running.
 
 During the year Bank has not undertaken derivative trades in Interest
 Rate Swaps (IRS) of the Investment Portfolio and Trading Swaps /
 Currency Derivative / Forward Rate Agreements (FRA) were also not
 undertaken.
 
 B.  The risk management policies and major control limits like stop
 loss limits, counterparty exposure limits, PV01,etc. approved by the
 Board of Directors are in place. These risk limits are monitored and
 reviewed regularly. MIS/Reports are submitted periodically to Risk
 Management Committee. The hedge effectiveness of the outstanding
 derivative deals are monitored in relation to the underlying
 asset/liability on an ongoing basis.
 
 C.  Accounting Policy
 
 Hedge Positions
 
 - Accrual on account of interest expenses/ income on the IRS are
 accounted and recognized as expense/income.
 
 - Hedge effectiveness of the outstanding derivative deals are
 monitored in relation to the fair value of the swap and underlying
 asset/liability. Bank has used the FIMMDA pricing method i.e. relevant
 G SEC yield   corporate bonds spread for arriving at the fair value of
 the underlying Asset/ Liability. If the hedge is not effective, hedge
 swaps is accounted as trading swaps. If swap is terminated before
 maturity, the MTM loss / gain and accruals till such date are accounted
 as expense/income under Interest Paid / received on IRS.
 
 Trading Positions
 
 - Trading swaps are marked to market at frequent intervals and
 changes are recorded in the income statements.
 
 - Accrual on account of interest expenses/income on the IRS are
 accounted and recognized as expense/income.
 
 - Gains or losses on termination of swaps are recorded as immediate
 income or expense under the above head.
 
 4.3 Details of Single Borrower Limit (SGL) / Group Borrower Limit
 (GBL) exceeded by the Bank:
 
 The Bank has not exceeded the prudential credit exposure limits
 prescribed for group accounts and single borrower engaged in
 infrastructure projects or for Oil Companies. In respect of the
 following single borrower accounts, the exposure ceiling of 15% of
 Capital Funds has been exceeded:
 
 4.4 Disclosure of Penalties imposed by RBI
 
 Duringthefinancialyear2011-12,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.
 
 5.  Accounting Standards:
 
 In compliance with the guidelines issued by the RBI regarding disclosure
 requirements of the various Accounting Standards issued by ICAI, the
 following information is disclosed:
 
 5.1 Accounting Standard 5 - Net Profit/Loss for the period, prior
 period items and changes in accounting policies:
 
 There are no material prior period items
 
 5.2 Accounting Standard 9- Revenue Recognition
 
 Revenue is recognised as per accounting policy No.9 of Schedule 17 to the
 Financial Statement. Certain items of income are recognised on the
 basis other than accrual. However, the said income is not considered to
 be material.
 
 5.3 Accounting Standard 15-EmployeeBenefits:
 
 The actuarial assumptions in respect of gratuity, pension and privilege
 leave, for determining the present value of obligations and
 contributions of the bank, have been made by fixing various parameters
 for
 
 - Salary escalation by taking into account inflation, seniority,
 promotion and other factors mentioned in Accounting Standard 15(Revised)
 issued by ICAI.
 
 - Attrition rate by reference to past experience and expected future
 experience and includes all types of withdrawals other than death but
 including those due to disability.
 
 5.4 Accounting Standard-18 - Related Party Disclosures:
 
 Names of Related parties and their relationship with the Bank-
 Parent-Canara Bank
 
 5.5. Key Management Personnel -
 
 i) Shri S Raman, Chairman & Managing Director
 
 ii) Shri Jagdish Pai. K.L, Executive Director (till 30.06.2011)
 
 iii) Smt. Archana S Bhargava, Executive Director (from 01.04.2011)
 
 iv) Shri. Ashok Kumar Gupta, Executive Director (from 28.07.2011)
 
 5.6 Parent-
 
 i) Canara Bank
 
 5.7 Subsidiaries-
 
 i) Canbank Financial Services Ltd.
 
 ii) Canbank Venture Capital Fund Ltd.
 
 iii) Canbank Factors Ltd.
 
 iv) Canara Robecco Asset Management Company Ltd.
 
 v) Canbank Computer Services Ltd.
 
 vi) Canara Bank Securities Ltd. (formerly GILT Securities Trading
 Corpn.Ltd)
 
 vii) Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd
 
 5.8 Joint Ventures
 
 i) Commercial Bank of lndia LLC., Moscow
 
 5.9 Associates
 
 i) Canfin Homes Ltd.
 
 ii) Common wealth Trust(India)Ltd.
 
 iii) CARE Ltd
 
 iv) Regional Rural Banks sponsored by the Bank
 
 a) Pragati Gramin Bank
 
 b) South Malabar Gramin Bank
 
 c) Shreyas Gramin Bank
 
 5.10 Disclosure about transactions with Key Management Personnel is as
 under:
 
 Remuneration to Key Management Personnel Rs 58, 92,007*
 
 (Previous Year: Rs=64, 92,995/-)
 
 (*) including incentives paid to Ex-key Management Personnel of Rs=7,
 83,973/-
 
 5.11 Accounting Standard-22-Accounting for Taxes on Income:
 
 The Bank has recognized Deferred Tax Assets / Liabilities (DTA / DTL)
 and has accounted for the Net Deferred Tax as on 31.03.2012as under:
 
 Major components of Deferred Tax Assets and Deferred Tax Liabilities areas
 under:
 
 5.12 Accounting Standard 27 - Financial Reporting of Interests in Joint
 Ventures
 
 Investments include Rs=§1.53 Crore (at the exchange rate of the
 transaction date) in the Commercial Bank of India LLC (Incorporated in
 Russia) wherein the Bank owns 40% of the equity.
 
 As required by AS 27 the aggregate amount of the assets, liabilities,
 income and expenses (Bank''s interest at 40% in jointly controlled
 entity) is disclosed as under:
 
 The above figures have been translated at:
 
 Assets and liabilities: @ spot rate: 31/03/2012 USD 1= = 50.8750 and
 31/03/2011=JSD 1= Rs 44.595
 
 Income & Expenditure: @ Average rate: 31/03/2012 USD 1= Rs 47.9138 and
 31/03/2011 USD 1= Rs 45.5706
 
 The above figures are as per audited accounts of the joint
 Venture for the year ended 31/03/2012
 
 5.13 Accounting Standard 28 - Impairment of Assets:
 
 In the opinion of the Management, there is no impairment of its Fixed
 Asset to any material extent as at 31.03.2012 requiring recognition in
 terms of Accounting Standard 28 issued by the Institute of Chartered
 Accountants of India.
 
 6.1 Draw Down from Reserves:
 
 A sum of Rs 92.79 Crore has been withdrawn from Investment Reserve
 Account net off of Statutory Reserve & tax and adjusted against
 depreciation on Investments as per RBI guidelines.
 
 6.2 Issuance of Letters of Comfort:
 
 Bank has issued 1196 no. of Letters of Comfort to the tune of Rs 14711.59
 Crore during the financial year. The cumulative outstanding position of 675
 no. of LOC as on 31.03.2012 is Rs 5563.93 Crore. Apart from this, Bank
 has also issued Letter of Comfort to the following regulators:
 
 LOC issued during the year 2011-2012:
 
 - LOC issued by the bank was in favour of South African Reserve Bank
 for the proposed branch at Johannesburg, South Africa.
 
 LOC issued in the past:
 
 - China Banking Regulatory Commission, China (During 2008-09,for
 Shanghai Branch).
 
 - Central Bank of the UAE (During 2009-10, for Representative Office,
 Sharjah)
 
 - Central Bank of Bahrain (During 2009-10 for Manama Branch,
 Bahrain).
 
 Financial Impact:
 
 Presently, there is no such financial impact on LOCs issued favoring
 Centra lBank of UAE (for Sharjah Representative Office) & South African
 Reserve Bank (yet toopen).
 
 - The impact of issue of letter of guarantee/ comfort by the Bank
 exists only in case of Shanghai, China and Manama, Bahrain branches.
 
 - The total outside liabilities of Shanghai branch is USD 27.06 Mn
 (=Rs=137.67 crore) and Manama branch, Bahrain is USD 75.025 Mn ( Rs
 381.69 crore).
 
 - The total impact ofthe LOCs issued by the bank to overseas regulators
 comes to USD 102.085 Mn (approx Rs=519.36 crore).
 
 6.3 Provision Coverage Ratio is 67.57% as on 31.3.2012 (Previous year
 72.99%).
 
 6.4 In accordance with the guidelines issued by Reserve Bank of India
 vide their Circular No.DBOD.BP.BC.80/21.04.018/2010-11 dated
 09.02.2011, the Bank has debited Profit & Loss Account a sum of Rs
 370.71 Crore during the year ended 31.03.2012 on proportionate basis
 towards unamortized liability of Rs=1482.86 Crore (being amortized over
 5 years beginning from 31st March 2011) on account of reopening of
 pension option during 2010-11 for existing employees who had not opted
 for pension earlier. The balance amount of =Rs 1112.15 Crore will be
 dealt as per guidelines of RBI.
 
 The Bank has debited Profit & Loss Account a sum of Rs 135.90Croreduring
 The year ended 31.03.2012on proportionate basis towards unamortized
 liability of Rs=543.62 Crore (being amortized over 5 years beginning
 from 31st March 2011) on account of enhancement of gratuity limit. The
 balance amount of Rs=407.72 Crore will be dealt as per guidelines of
 RBI.
 
 7.  Figures of the previous year have been regrouped / rearranged /
 reclassified wherever necessary.