1 Capital
 
 The Banks Capital to Weighted Risk Assets Ratio (CRAR) has been worked
 out as per Reserve Bank of India guidelines. The ratios as at 31st
 March 2011 are:
 
 2 Investments
 
 2.1 In view of the guidelines of the Reserve Bank of India,
 
 a) Premium of Rs.47.71 crore (previous year Rs. 68.16 crore) has been
 amortized in respect of securities under Held to Maturity category.
 
 b) Depreciation of Rs.72.22 crore (previous year Rs.61.74 crore) has been
 provided for investments under Available for Sale category.
 
 c) Depreciation of Rs.7.49 crore (previous year Rs.0.14 crore) has been
 provided for investments under Held for Trading category.
 
 d) During the year, the Bank as a one-time measure, transferred
 securities of book value of Rs.1893.38 crore (Previous year Rs. 2,382.51
 crore) from Available for Sale category to Held to Maturity and
 also transferred securities of book value of Rs.1064.61 crore (Previous
 year Rs.756.60 crore) from Held to Maturity to Available for Sale
 category.
 
 e) Pursuant to the guidelines contained in Reserve Bank of India
 communication vide DBOD.BP.BC.
 
 No.133/21.04.018/2008-09 dated May 11, 2009, the Bank has recognized as
 income Rs.nil(previous year Rs.0.51 crore) representing unreconciled credit
 entries in Nostro Mirror Accounts and earlier parked in blocked
 account.
 
 f) Pursuant to change in the Accounting Policy as furnished in para
 4.5(iv) of Schedule 17, Profit on sale of investments (net) includes
 Rs.148.55 crore being income from Liquid Funds (in the previous year the
 said income of Rs.306.92 crore was included under schedule 13 Interest
 Earned).  However there is no impact on the Profits of the Bank.
 
 Investments includes securities of the face value of Rs.122 crores
 (Previous year Rs.92 crore), pledged/transferred to CCIL/ MCX/NSE/USE for
 availing various facilities. It also includes securities of the face
 value of Rs.3200 crore (Previous year Rs.550 crore) transferred in the name
 of Reserve Bank of India out of which securities of the face value of
 Rs.2100 crore (Previous year Rs. 367.50 crore) encumbered for borrowing
 under LAF-Repo as on 31.3.2011.
 
 The Bank has not contracted any exchange traded interest rate
 derivatives during the year.
 
 3.3 Disclosure on Risk Exposure in Derivatives:
 
 Qualitative Disclosure:
 
 1.  The Banks Derivative Policy as approved by Board permits Bank to
 undertake deals in over-the-counter (OTC) as well as exchange traded
 (ET) interest rate and currency derivatives. The policy permits the
 offering of the products to the customer to manage their foreign
 currency exposures, which are to be covered on Back-to-Back basis in
 the interbank market. Derivatives can also be used by the Bank both for
 trading as well as hedging on-balance sheet items.  In the current
 financial year Bank has entered into derivative deals involving forwards
 and currency futures.
 
 2.  The Asset Liability Management Committee (ALCO) of the Bank
 overseas management of these risks. The Banks Integrated Risk
 Management Department (IRMD), independently identifes, measures and
 monitors market risk associated with derivative transactions, assists
 ALCO in controlling and managing these risks and reports compliance
 with policy prescriptions to the Risk Management Committee of the Board
 (RMCB) at regular intervals.
 
 3.  Derivative transactions carry market risk i.e. the probable loss
 the Bank may incur as a result of adverse movements in interest rates /
 exchange rates and credit risk i.e. the probable loss the Bank may
 incur if the counterparties fail to meet their obligations. The Banks
 Derivative Policy approved by the Board prescribes the market risk
 parameters as well as Customer Appropriateness policy for entering into
 derivative transactions. Credit risk is controlled by entering into
 derivative transactions only with counterparties in respect of whom
 appropriate credit limits are sanctioned taking into account their
 ability to honour obligations. The Bank enters into International Swap
 Dealers Association (ISDA) agreements with each counterparty.
 
 4.  The accounting policy for derivatives as stated in Signifcant
 Accounting Policies, has been drawn-up in accordance with RBI
 guidelines and revenues are recognized accordingly.
 
 5.  Asset Quality 5.1 Advances
 
 a) In the case of unaudited branches, the classifcation of advances, as
 certifed by the Branch Managers has been incorporated.
 
 b) As against total provision of Rs.363.05 crore (previous year Rs.426.48
 crore) required for NPAs in line with RBI guidelines as of 31.03.2011,
 provision of Rs.547.76 crore (previous year Rs.345.25 crore) has been made
 during the year.
 
 c) Provision on standard advances amounting to Rs.375.75 crore (including
 Rs.285.76 crore created in earlier years) is shown as per RBI guidelines,
 under Other Liabilities and Provisions others in Schedule No. 5 of
 the Ba1ance Sheet.
 
 10. Risk Category wise Country Exposure
 
 The following are the banks countrywise net risk exposure based on the
 Country risk classifcation provided by the Export Credit Guarantee
 Corporation (ECGC).
 
 11. Details of Single Borrower Limit (SBL), Group Borrower Limit (GBL)
 exceeded by the bank.
 
 During the year ended 31.03.2011, the Bank has not exceeded the
 exposure ceiling* fxed by RBI to individual borrower / Group except in
 the following cases, which have been approved by the Board:
 
 16.  Disclosure 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 order/ rules or conditions
 specifed by the Reserve Bank of India under the said Act.
 
 17. INTER BRANCH TRANSACTIONS
 
 Reconciliation of transactions between Branches, Controlling offces and
 Head offce has been done. All inter branch transactions upto 15.03.2011
 stand adjusted as at 31.3.2011.
 
 18.  BALANCING OF BOOKS
 
 a) Books of account have been balanced and tallied up to 31st March
 2011.
 
 b) Other Assets and Other Liabilities and accounts with other
 banks/institutions include a few old entries pending reconciliation and
 adjustment having no material impact on the Profit & Loss and Balance
 Sheet of the Bank.
 
 19.  FIXED ASSETS
 
 a) Premises include properties costing Rs. 12.30 crore (previous year
 Rs.0.43 crore) for which registration formalities are pending.
 
 b) Fixed Assets include Rs.2.05 crore (previous year Rs.1.75 crore) in
 respect of Capital Work in Progress-Premises.
 
 c) During the year 2010-11 cost of software acquired is Rs.10.13 crore
 (previous year Rs.6.36 crore) and the amount amortised till 2010-11 is
 Rs.6.18 crore (previous year Rs.6.05 crore).
 
 d) Premises include buildings of Rs.3.59 crore (previous year Rs.3.59
 crore) which are subject to previous owners right of redemption.
 
 e) Contracts pending execution on Capital account and not provided for
 is Rs.6.03 crore (previous Year Rs. 20.26 crore).
 
 20.  CASH FLOW STATEMENT (AS 3)
 
 The Cash Flow statement for the year is given separately.
 
 21.  EMPLOYEE BENEFITS
 
 21.1 The Bank has accounted for Employee Benefts as per Accounting
 Standard 15 issued by the Institute of Chartered Accountants of India.
 
 21.2 A reconciliation of Opening and Closing Balances of the present
 value of the defned beneft obligation and the effects during the period
 attributable to each of the following is as under:
 
 21.7 During the year, Bank has incurred an incremental liability
 towards contribution to gratuity fund to the extent of Rs.78.10 crores
 including due to the amendment made in Payment of Gratuity Act, 1972
 with regard to enhancement in gratuity limit which has been charged to
 Profit & Loss Account.
 
 Further the Bank reopened the pension option for such of its employees
 who has not opted for pension scheme earlier. As a result of exercise
 of which by 4457 serving employees, the Bank has incurred a liability
 of Rs.891.2 crores. In terms of RBI circular
 no:DBOD.BP.BC.80/21.04.018/2010-11 dated 9th February 2011, after
 reckoning the available pension fund balance of Rs.338.67 crore, the net
 incremental liability of Rs.552.53 crore is being amortised over a period
 of fve years. Accordingly a sum of Rs.110.51 crore (representing one-ffth
 of Rs.552.53 crore) has been charged to the Profit and Loss Account. The
 net liability relating to serving employees being carried forward in
 terms of the requirements of the aforesaid circular amounts to Rs. 442.02
 crores.
 
 An amount of Rs. 74.25 crores being liability arising out of exercising
 of reopened pension option by separated/ retired employees has been
 charged to Profit & loss account in terms of said circular issued by
 RBI.
 
 Had such a Accounting treatment not been made by the Bank the Profit of
 the Bank would have been lower by Rs.442.02cror pursuant to application
 of the requirements of AS-15.
 
 22. SEGMENT REPORTING
 
 In terms of AS 17 - Segment Reporting, issued by the Institut of
 Chartered Accountants of India, the Segment Report ha been given for
 the Consolidated Financial Statements.
 
 23.  RELATED PARTY DISCLOSURE
 
 In compliance with Accounting Standard 18 - Related Party Disclosures,
 issued by the Institute of Chartered Accountant of India read along
 with the Reserve Bank of India guidelines the details pertaining to
 Related Party transactions are disclosed as under:
 
 Names of Related Party and their Relationship with the Bank:
 Subsidiaries: - Corpbank Securities Ltd
 
 Associate (RRB): -            Chikmagalur Kodagu
 
                               Grameena Bank
 
                               (Chiko Bank)
 
 Key Management Personnel: -   Mr.Ramnath Pradeep
 
                               Chairman & Managing Director 
                               (From 01.09.2010)
 
                           -   Mr.J.M.Garg Chairman & Managing 
                               Director
 
                              (From 01.04.2010 to 31.07.2010)
 
                               Mr.Narendra Singh 
                               Executive Director
 
                               Mr.Ashwani Kumar 
                              (From 01.12.2010)
 
                               Mr.Asit Pal 
                               Executive Director 
                              (From 01.04.2010 to 30.11.2010)
 
 Since, the Bank and its Subsidiary are state controlled, no disclosures
 are made pertaining to the transactions with them in accordance with
 the requirements of the Accounting Standard 18 issued by the Institute
 of Chartered Accountants of India.  Accordingly, no disclosure has also
 been made in respect of the Rural Regional Bank (RRB) sponsored by the
 Bank.
 
 24.  Earnings Per Share
 
 a) Basic: Rs. 98.50 per share
 
 b) Diluted: Not applicable as there are no dilutive potential equity
 shares.
 
 b) Contingent Liability:
 
 i) Claims against the Bank not acknowledged as debts:
 
                                              (Rs. in Crore)
 
 Particulars                  No of       Gross        Net
 
                              claim       Claim       Claim
 
 Total Claims outstanding 
 as on                          102       38.24       30.27
 
 01/04/2010
 Less: Claims deleted/revised    34        5.26        3.88
 
 during the period from
 01/04/2010 to 31/03/2011
 Add : New Claims added
 during the period from          38      270.88      270.43
 01/04/2010 to 31/03/2011
 
 Total Claims outstanding as on 106      303.86      296.82
 31/03/2011
 
 Subject wise classifcation of the claims outstanding as on March 31,
 2011:
 
                                              (Rs. in Crore)
 
                                    No. of        Gross          Net
 
 Particulars                         Claims       Claim       Claim
 
 Bank Guarantee                      3              0.16         0.01
 
 Cheques/DD/PO etc.,                11              0.24         0.05
 
 collection
 
 Credit Portfolio                   23             19.55        18.62
 
 Deposits Portfolio                 13              0.65         0.13
 
 Vigilance Transactions             21              6.23         2.15
 
 Miscellaneous [Including           35            277.02       275.86
 claims on account of
 Income Tax & Interest
 Tax Demands]
 
 Total                             106            303.84       296.82
 
 Contingent Liabilities include Disputed Income tax and interest tax of
 Rs. 273.18 crore (previous year Rs. 7.18 crore) for which the Bank has gone
 in appeal.
 
 27.  Income Tax and Wealth Tax
 
 c) Tax paid in advance and tax deducted at source appearing under
 Other Assets includes Rs.286.97crore (previous year Rs.190.17 crore) paid
 on account of demands disputed by the Bank, against which the Bank
 holds a provision of Rs.76.90crore.  The Bank has gone on appeal and no
 additional provision is considered necessary in view of favourable
 judicial prouncements in similar cases.
 
 28.  Drawn Down from Reserves : NIL (Previous Year Nil)
 
 29.  Complaints / unimplemented awards of Banking Ombudsmen
 
 30.  Letter of Comforts (LOCs) issued by the Bank (other than for
 Buyers Credit) during the year is Nil (Previous Year Nil)
 
 31.  The Bank raised Upper Tier-II Bonds of Rs.550 crore during the year
 in April 2010.
 
 32.  a) During the quarter the Bank has issued and allotted
 
 46,92,554 equity shares to Government of India on
 
 preferential basis at a price of Rs.658.49 per Equity share (i.e Rs.10/-
 face value and Rs.648.49 towards premium per share) on 29th March 2011.
 
 b) The Issued and Subscribed Capital of the Bank has been raised from
 14,34,40,000 to 14,81,32,554 Equity Shares due to allotment of
 46,92,554 Equity Shares to Government of India (i.e in the name of ‘
 President of India) on a Preferential allotment basis on 29.03.2011.
 
 c) The paid-up Capital of the Bank has been increased from
 Rs.143,43,80,500 to Rs.148,13,06,040 due to receipt of calls in arrears for
 200 equity shares and allotment money for 46,92,554 Equity Shares
 allotted to Government of India on Preferential basis on 29th March
 2011.
 
 33.  Provisioning coverage ratio of the Bank as on 31.03.2011 is
 74.70%.
 
 34.  During the year ended 31st March 2011, Bank has received
 fee/remuneration of Rs. 7.68 crore from Bancassurance business.
 
 35.  The Bank has recommended a dividend of 200% i.e. Rs. 20 per share of
 the face value of Rs.10/- each, which is subject to approval of Govt. of
 India.
 
 36.  Previous years figures have been regrouped/rearranged wherever
 necessary.