1 Investments:
 
 The percentage of investments under Held to Maturity category - SLR
 as on 31.03.2011 was 22.78% of Demand and Time Liability of the Bank
 (Previous year 24.14%), 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 Branchtransactions upto 31.03.2011 has
 been done.  However, Bank is continuing its efforts to reconcile and
 reduce the remaining outstanding entries.
 
 3 Premises:
 
 Premises include certain properties ofRs. 193.02 Crore (Previous year
 Rs. 193.32 Crore) in respect of which conveyance deeds a re pending
 execution.
 
 Certain properties of the bank are stated at revalued amounts. The
 gross amount of revaluation is Rs. 2310.91 Crore (Previousyear Rs.
 2310.91 Crore) and net of depreciation is Rs. 2098.36 Crore (Previous
 year Rs. 2132.68 Crore).
 
 During the year, the Bank has issued following instruments in orderto
 strengthen the Capital Adequacy:
 
 - 3,30,00,000 Equity Shares at face value ofRs. 10/- each at a premium
 of Rs. 594/- per share aggregating to Rs. 1993.20 crores through
 Qualified Institutiona Placement (01P).
 
 - Innovative Perpetual Debt Instruments (IPDI) of Rs. 749.30 Crores
 (PreviousYearRs. 600.00 Crores) byway of private placement.
 
 - Upper Tier 2- Series III Bonds of Rs. 1000.00 Crores
 (PreviousYearRs.Nil)
 
 4.3.4 Risk exposure in derivatives:
 
 INTEGRATEDTREASURY-Qualitative Disclosures
 
 The Treasury Risk Management Policy, approved by the Board of
 Directors, on the use of derivative instruments to hedge/tradeisin
 place.
 
 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 a
 IsohasTier 11 bonds hedged for interest rate swaps which do not have
 exit option.  The policy permits hedgingthe interest rate risk on this
 liability as well.
 
 Bank is permitted to use FRA and IRS and 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 iabilities also. Options and
 swaps are also undertaken on behalf of clients on backto back basis.
 Bank isyetto start Option book running.
 
 b) The risk management policies and majorcontrol 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
 onanongoingbasis.
 
 c) Accounting Policy: Hedge Positions:
 
 - Accrual on account of interest expenses / income on the IRS are
 accounted and recognized as income/expense.
 
 - 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 Assets/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 til 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 interestexpenses/incomeon the IRS are accounted
 and recognized as expense/income.
 
 - Gains or losses on termination of swaps are recorded as immediate
 income or expenses under theabovehead.
 
 4.4.8 Advances include a sum of Rs.1600 Crore (Previous year Rs.1000
 Crore) of Inter Bank Participation Certificate (IBPC) purchased from
 sponsored Regional Rural Banksas per RBI guidelines.
 
 4.9 Unsecured Advances:
 
 Advances amountingtoRs. 2469.84 Crores (Previous Year Rs. 7797.05
 Crores) for which charge has been taken over intangible securities such
 as rights, icenses, authorization etc have been considered as
 Unsecured. The estimated value of such intangible securities is not
 ascertained.
 
 5.  Accounting Standards:
 
 In compliance with the guidelines issued by the Reserve Bank of India
 regarding disclosure requirements of the various Accounting Standards
 issued by the Institute of Chartered Accountants of India, 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 15-Employee Benefits:
 
 The actuarial assumptions in respect of gratuity pension and privilege
 leave,fordeterminingthe present value of
 obligationsandcontributionsofthe bank, have been made byfixing various
 parameters for
 
 - Salary escalation by taking into account inflation, seniority
 promotion and otherfactors mentioned in Accounting Standard 15(Revised)
 issued by the Institute of Chartered Accountants of India.
 
 - 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
 
 5.3 In terms of the requirements of the Accounting Standard - 15
 (Revised) - Employee Benefits, the entire amount of Rs.3054.27 Crore
 (towards Pension Rs.2373.12 Crore and towards gratuity Rs.681.15 Crore)
 on account of re-openingof pension option and enhancement in Gratuity
 limit, is required to be charged to Profit & Loss Account.  However, in
 accordance with the guidelines issued by Reserve Bank of India vide
 their Circular N o. D BO D.B P. BC.80/21.04.018/2010-11 dated
 09.02.2011, the Bank has debited Profit & Loss Account a sum of
 Rs.890.26 Crore, including entire liability toward retired employees on
 account of pension and Rs.137.53 Crore on account of gratuity
 liability. The balance unamortized amount of Rs.1482.86 Crore towards
 Pension and Rs.543.62 Crore towards Gratuity will be dealt with as per
 guidelines of Reserve Bank of India.
 
 5.4 The bank had provided for Rs.167.47 crore towards Sick Leave up to
 the previous year. The Sick leave being non-encashable, the bank has
 written back Rs.101.42 crore after adjusting Rs.66.05 crore towards
 provision for privilege leave for the current year as no longer
 required.
 
 5.6 Related Party Disclosures-Accounting Standard-18:
 
 Names of Related parties and their relationship with the Bank-Pa
 rent-Canara Bank
 
 5.6.1 Key Management Personnel -
 
 i) Sri A C Mahajan, Chairman & Managing
 
 Director (till 31.07.2010) ii) Shri 5 Raman, Chairman & Managing
 Director
 
 (from 01.09.2010) iii) Shri Jagdish Pai. Kl, Executive Director iv)
 Shri H S Upendra Kamath, Executive Director
 
 5.6.2 Parent-
 
 i) CanaraBank
 
 5.6.3 Subsidiaries-
 
 i) Canbank Financial Services Ltd.
 
 ii) CanbankVentureCapital 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 nsuranee Company Ltd
 
 5.6.4 Joint Ventures
 
 i) Commercial Bank of India LLC, Moscow
 
 5.6.5 Associates
 
 i) Canfin Homes Ltd.
 
 ii) Commonwealth Trust (India) Ltd.
 
 iii) CARE Ltd
 
 iv) Regional Rural Bankssponsored bytheBank
 
 a) PragatiGramin Bank
 
 b) South MalabarGramin Bank
 
 c) ShreyasGramin Bank
 
 5.6.6 Disclosure about transactions with Key Management Personnel is as
 under:
 
 Remuneration to Key Management Personnel
 
 Rs.64, 92,995 /-
 
 (Previous Year: Rs.71, 98,727/-)
 
 5.8Deferred Tax Assets and Liabilities - Accounting Standard-22:
 
 The Bank has recognized Deferred Tax Assets / Liabilities (DTA / DTL)
 and has accounted for the Net Deferred Tax as on 31.03.2011 as under:
 
 5.9Financial Reporting of Interests in Joint Ventures - Accounting
 Standard 27 Investments includeRs.31.53Crore(attheexchange rate of the
 transaction date) in the Commercial Bank of ndia LLC (Incorporated in
 Russia) wherein the Bank owns 40% of the eq u ity.
 
 As required by AS 27 the aggregate amount of the assets, liabilities,
 income and expenses (Banks interest @ 40% in jointly controlled
 entity) is disclosed as under:
 
 5.10 Impairment of Assets-Accounting Standard 28
 
 In the opinion oftheManagement,there is no impairment of its Fixed
 Asset to any material extent as at 31.03.2011 requiring recognition in
 terms of Accounting Standard 28 issued bythe Institute of Chartered
 Accountants of India.
 
 6.  Issuanceof Letters of Comfort:
 
 Bank has issued Letters of Comfort to the tune of Rs.3100.04 Crores
 during the financial year. The cumulative Positions of LOCs
 outstanding as on 31.03.2011 is Rs.1281.13 Crores.  Apart from these,
 Bank has also issued Letter of Comfort tothefollowing regulators:
 
 i) China Banking Regulatory Commission, China (during 2008-09 for
 Shanghai Branch)
 
 ii) Central Bank of the UAE (during 2009-10 for Representative Office,
 Sharjah)
 
 iii) Central Bank of Bahrain (during 2009-10 for the proposed Branch at
 Bahrain)
 
 The above have been issued in respect of our Branch/ Offices
 opened/proposed.
 
 There is no financial impact on LOCs issued favouring Central Bank of
 UAE and Central Bank of Bahrain, as branch/office at these proposed
 centres are yet to be opened.
 
 The liability position of Shanghai Branch, China is USD 65.34 Mn (Rs.
 291.38 Crores) consisting of -
 
 Capital : USD 28.86 Mn
 
 (Rs.128.70 Crore)
 
 Borrowings from our
 
 Treasury : USD 35.46 Mn
 
 (Rs.158.13 Crore)
 
 Other Liabilities : USD 1.02 Mn
 
 (Rs.4.55 Crore)
 
 Out of the borrowings of USD 35.46 Mn (Rs. 158.13 Crores), an amount of
 USD 15 Mn (Rs. 66.89 crores) has been borrowed from Standard Chartered
 Bank and the balance is borrowings from Treasury, Mumbai.
 
 The other liabilities includes customers deposits of USD0.44Mn.
 
 Hence, the total debt obligation of the branch is USD 1544Mn.
 
 The branch has made a provision of USD 74,146 towards discharge of tax
 liabilities.
 
 Hence, the total likely financial impact is to the extent of USD 15.44
 Mn (Rs. 68.85 crores)
 
 7.  Provision Coverage Ratio is 72.99% as on 31.3.2011.
 
 8.  Draw down from Reserves:
 
 A sum of Rs.53 Crore has been withdrawn from Investment Reserve Account
 net off of Statutory Reserve & tax and adjusted against depreciation on
 Investments as per Reserve Bankof India guidelines.
 
 9.Figures of the previous year have been regrouped / rearranged/reclassi
 -fied wherever necessary