These Financial Statements which were approved by the Board of
 Directors on 06th May 2011 and authenticated by the Auditors have
 undergone a change due to appropriation of additional amount towards
 proposed dividend for the shares allotted under Rights Issue which was
 opened on March 24, 2011 and closed on April 07, 2011. The allotment
 was made on April 19, 2011 on pari passu basis. The effect of this
 change in Financial Statements is an increase in proposed dividend on
 equity capital by Rs. 36.37 crore and dividend tax by Rs. 5.90 crore and
 consequent decrease in Revenue reserve by Rs. 42.27 crore.
 
 1.1 Capital:
 
 The Authorised Capital of the Bank is Rs. 3000 crore.
 
 The paid-up Capital of the Bank is Rs. 2021.14 crore i.e. increased from
 Rs. 1771.14 crore to Rs. 2021.14 crore by issue of Perpetual Non-cumulative
 Preference Shares [PNCPS] to the tune of Rs. 250 crore to Government of
 India.
 
 During the year, the Bank has come out with Right Issue of Rs. 2497.38
 Crore comprising of 24,24,84,876 nos fully paid up equity shares of Rs.
 10 each at premium of Rs. 93. The issue opened on 24th March 2011 and was
 closed on 7th April 2011. A sum of Rs. 2025.68 Crore has been received
 till 31st March 2011 and the same has been shown as Share Application
 Money.  The said money is parked in account with Reserve Bank of India
 maintained by our Bank.
 
 1.2 The proposed dividend of Rs. 137.41 crore on Equity Capital includes
 Rs. 36.37 crore payable on shares allotted under Rights Issue, subject to
 approval by AGM. Proposed dividend includes interim dividend paid Rs.
 40.41 crore as declared by the Board on October 26, 2010, on the
 existing Capital, on the relevant record date.
 
 2.  Balancing of Books / Reconciliation:
 
 The reconciliation of the following items is in progress at various
 stages on ongoing basis and consequential impact arising on account of
 such reconciliation is unascertained.
 
 - Inter Branch/Office Balance
 
 - Accounts for Govt. transactions (Central & State)
 
 - Inter Bank Accounts
 
 - System Suspense Account
 
 - Suspense Account
 
 - Clearing & other Adjustment Accounts
 
 The management is of the opinion that the overall impact, if any, on
 the accounts will not be significant.
 
 3.  Income Tax / Deferred Tax:
 
 3.1 Provision for Income Tax for the year is arrived at after due
 consideration of relevant statutory provisions and judicial decisions
 on disputed issues.
 
 3.2 Other Assets [Schedule 11 (ii)] includes Rs. 601.64 crore (previous
 year Rs. 1507.45 crore) towards disputed Income Tax paid by the Bank/
 adjusted by the authorities. Provision for taxation is not considered
 necessary by the Bank in respect of above disputed demands based on
 various judicial decisions/ counsels opinion on such disputed issues.
 
 3.3 Out of Rs. 601.64 crore of tax paid under dispute, disputes relating
 to various Assessment Years, involving tax element of Rs. 21.46 crore
 have been decided by the Appellate Authorities in favour of the Bank.
 The appeal effect for the same is pending.
 
 4.  Share Issue Expenses:
 
 Unamortized amount of Rs. 6.72 crore towards share issue expenses are
 included in Other Assets.
 
 5.  Premises:
 
 5.1 The premises of the Bank were revalued during financial year
 2007-08 to reflect the market value as at March 31, 2008. The
 additional appreciation amounting to Rs. 1565.97 crore have been credited
 to Revaluation Reserve Account.
 
 5.2 Premises owned by the Bank include properties costing Rs. 12.21 crore
 revalued at Rs. 198.46 crore for which registration formalities are still
 in progress.
 
 7.  Advances / Provisions:
 
 7.1 Advances to units which have become sick including those under
 nursing/ rehabilitation/ restructuring programme and other advances
 classified as doubtful/ loss assets have been considered secured/
 recoverable to the extent of estimated realizable value of securities
 carrying first or second charge based on valuers assessment of
 properties/ assets mortgaged to the Bank and other data available with
 the Bank.
 
 7.2 In the current year, in accordance with the guidelines issued by
 Reserve Bank of India, the Bank has opted to utilize the Floating
 Provision amounting to Rs. 312.42 crore (previous year Rs. 312.42 crore)
 for netting off from Gross NPAs to arrive at Net NPAs.
 
 7.3 Advances considered good and secured includes investment of Rs. 2000
 crore in IBPCs governed by the Uniform Code Governing Inter Bank
 Participations issued by IBA (Non Priority Sector) and investment in
 IBPCs issued by RRBs aggregating Rs. 1440 crore (Priority Sector Advance/
 Direct Agriculture).
 
 8 Agricultural Debt Waiver and Debt Relief Scheme, 2008
 
 In terms of the Reserve Bank of India Circular Ref RBI:2009-10/371/
 DBOD.No.BP.BC.82/21.04.048/2009-10 dated March 30, 2010 and vide
 Government of India Notification No.3/3/208-AC dated April 5, 2010,
 Bank has extended the Debt Relief Scheme to all eligible farmers upto
 June 30, 2010. Banks claim of Rs. 147.77 crore under Debt Relief Scheme
 for the period ended 31/12/2009 is fully reimbursed during the month of
 February 2011. Claim for the extended period i.e. 1/01/2010 to
 30/06/2010 (grievance redressal up to 31/07/2010) of Rs. 54.26 crore is
 pending to be lodged with Reserve Bank of India up to 30/06/2011 as per
 Reserve Bank of India guidelines.
 
 9.  Upper Tier II Debt Instrument:
 
 During the year, Bank has raised Upper Tier II Debt to the tune of
 Rs.1300.00 crore (previous year Rs. 1000.00 crore) by issue of Unsecured
 Redeemable Bonds under Upper Tier II Debt and the amount is shown in
 Schedule 4 Borrowings of the Balance Sheet.
 
 The above data has been compiled on the basis of guidelines of Reserve
 Bank of India and estimates in respect of certain Off Balance Sheet
 items, made by the management and relied upon by the Auditors. In
 respect of Basel II, the system deficiencies/ data errors noticed /
 reported were addressed at Central Office. Based on the extensive
 exercise undertaken, Bank is of the view that, unrectified
 deficiencies, if any, will not have a significant impact on the overall
 reported Capital Adequacy.
 
 Disclosures on Risk Exposure in Derivatives
 
 iii) Qualitative Disclosures
 
 . Risk Management Policy approved by the Board of Directors for the use
 of derivative instruments to hedge/ trade is in place.
 
 . The investment portfolio of the Bank consists of assets with
 characteristics of fixed interest rate, zero coupon and floating
 interest rates and is subject to interest rate risk. The Bank has also
 Tier II bonds hedged for coupon swaps. The policy permits hedging the
 interest rate risk on this liability as well.
 
 . Policy for Forward Rate Agreement, Interest Rate Swaps, currency
 futures and Interest Rate Futures for hedging the interest rate risk in
 the investment portfolio and also for market making is in place.
 
 . The risk management policies and major control limits like stop loss
 limits, counter party exposure limits etc approved by the Board of
 Directors are in place. The risks are monitored and reviewed regularly.
 MIS reports are submitted periodically to Risk Management Committee.
 
 a) Accounting policy.  Hedge Positions
 
 . Accrual on account of interest expenses/income on the IRS are
 accounted and recognized as income/ expense.
 
 . If the swap is terminated before maturity, the Marked to Market (MTM
 loss/gain and accrual till such date are accounted as expense/income
 under Interest paid/received on IRS.
 
 Trading positions
 
 . Currency future and Interest Rate Future are marked to market on
 daily basis as per exchange guidelines of MCX-SX, NSE and United Stock
 Exchange.
 
 . MTM profit/loss are accounted by credit/debit to the margin account
 on daily basis and the same is accounted in Banks Profit & Loss
 Account on final settlement.
 
 . Trading swaps are marked to market at frequent intervals. Any MTM
 losses are booked and gains if any are ignored.
 
 . Gains or losses on termination of swaps are recorded as immediate
 income/expense under the above head.
 
 (b) During the year, 219 accounts under SME were subjected to
 Restructuring and the balance outstanding as on March 31, 2011 was Rs.
 27.45 crore (Previous Year 349 accounts – Amount Rs. 170.95 crore).
 
 12 b Gold Coins - During the year the Bank has sold 61.612 kgs. and the
 total sale consideration is Rs. 1337 lacs. The Profit accrued on the sale
 of Gold Coins is Rs. 46.00 lacs and is accounted for in Misc. Income.
 
 12 c The Provisioning Coverage Ratio (PCR) of the Bank is 67.64%.
 
 13.  Disclosure of Penalties imposed by RBI
 
 RBI has not imposed any penalty on the Bank under Section 46(4) of the
 Banking Regulation Act, 1949.
 
 14.  The following information is disclosed in terms of Accounting
 Standards issued by The Institute of Chartered Accountants of India:
 
 a) Accounting Standard - 15 (Revised)
 
 During the year, the Bank reopened the pension option for such of its
 employees who had not opted for the pension scheme earlier. In
 accordance with RBI circular No.DBOD No. BP.BC.80/21.04.018/2010-11,
 dated 09-02-2011, for second option for pension, one-fifth of
 additional liability of Rs. 239.98 crore towards pension fund for 13494
 serving employees and 100% of such liability of Rs. 569.62 crore for 4046
 retired/separated employees aggregating to Rs. 809.60 crore has been
 charged to Profit & Loss Account for the year. The unrecognized pension
 liability for second option for pension for serving employees is Rs.
 959.93 crore.
 
 In accordance with RBI circular No.DBOD No. BP.BC.80/21.04.018/2010-11,
 dated 09/02/2011, an amount of Rs. 55.40 crore has been charged to Profit
 & Loss Account for the year, being 1/5th of additional Gratuity
 liability due to amendment of Payment of Gratuity Act 1972. The
 unrecognized Gratuity liability is Rs. 221.60 crore.
 
 Had such a circular not been issued by the RBI, the profit of the bank
 would have been lower by Rs. 1181.53 crore pursuant to application of the
 requirements of AS-15.
 
 b) Accounting Standard 17 – Segment Reporting
 
 i) As per the revised guidelines of Reserve Bank of India, the Bank has
 recognised Treasury Operations, Corporate/ Wholesale Banking, Retail
 Banking and other Banking business as primary reporting segments. There
 are no secondary reporting segments.
 
 ii) Treasury Operations include dealing in Government and Other
 Securities, Money Market operations and Forex operations.
 
 iii) The Retail Banking Segment consists of all exposures upto a limit
 of Rs. 5 crore (including Fund Based and Non Fund Based exposures)
 subject to orientation, product, granularity criteria and individual
 exposures.
 
 iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/
 Partnership Firms Companies and statutory bodies, which are not
 included under Retail Banking.
 
 iv) The other Banking Segment includes all other Banking operations not
 covered under the above three categories.
 
 v) General Banking operations are the main resource mobilizing unit and
 Treasury Segment compensates the former for funds lent to it by taking
 into consideration the average funds used.
 
 vii) Allocation of Costs:
 
 a Expenses directly attributable to a particular segment are allocated
 to the relative segment.
 
 b Expenses not directly attributable to a specific segment are
 allocated in proportion to the funds employed.
 
 (b) Subsidiaries –
 
 i) Cent Bank Home Finance Ltd.  
 
 ii) Centbank Financial Services Ltd.
 
 (c) Associates –
 
 (I) Regional Rural Banks -
 
 i) Satpura Narmada Kshetriya Gramin Bank, Chhindwara
 
 ii) Surguja Kshetriya Gramin Bank, Ambikapur
 
 iii) Uttar Bihar Gramin Bank, Muzzaffarpur
 
 iv) Vidharbha Kshetriya Gramin Bank, Akola
 
 v) Ballia Etawah Gramin Bank, Ballia
 
 vi) Hadoti Kshetriya Gramin Bank, Kota
 
 vii) Uttarbanga Kshetriya Gramin Bank, Cooch Behar
 
 (e) Accounting Standard – 28 –Impairment of Assets
 
 A substantial portion of Banks assets comprise financial assets to
 which Accounting Standard-28 on impairment of assets is not applicable.
 In the opinion of the management, there is no material impairment on
 Other Assets other than financial assets as at March 31, 2011,
 requiring recognition in terms of the Standard.
 
 17 As per the information compiled by the Management, the Vendors,
 whose services are utilized and from whom purchases were made by the
 Bank, are not registered under Micro, Small and Medium Enterprises
 Development Act, 2006. This is relied upon by the Auditors.
 
 18. Previous year figures have been re-grouped / re-classified wherever
 considered necessary to conform to current years classification.