1.  General
 
 The financial statements have been drawn up on historical cost
 convention and on accrual basis of accounting (unless otherwise stated)
 and conform to Generally Accepted Accounting Principles in India which
 comprises the statutory provisions and practices followed in the
 banking industry in India.
 
 2.  Advances
 
 a) Advances are classifed as Performing Assets (Standard) and Non
 Performing assets, (Sub-standard, Doubtful, or Loss assets) and
 provisions required for possible losses on non performing advances are
 made over and above the minimum required as per the guidelines of the
 Reserve Bank of India (RBI) on matters relating to prudential norms.
 
 b) Advances shown in the Balance Sheet are net of:
 
 (i) bills rediscounted,
 
 (ii) provisions made for non performing advances.
 
 (c) Provisions are made in respect of the following as per the
 guideline of RBI and included under the head “Other liabilities –
 others” in the Balance Sheet.
 
 (i) Provisions towards interest sacrifice/ fair value diminution on
 restructured / rescheduled advances.
 
 (ii) Provision for standard asset.
 
 3.  Investments
 
 (a) Investments are classified under three categories, viz ''Held for
 Trading'' (HFT), ''Available for Sale'' (AFS), and ''Held to Maturity''
 (HTM) as per RBI guidelines and disclosed in the Balance Sheet under
 six classifcations viz.
 
 i) Government Securities
 
 ii) Other Approved Securities
 
 iii) Shares
 
 iv) Debentures and Bonds
 
 v) Subsidiaries & Joint Ventures
 
 vi) Others
 
 Investments are also classifed into performing & non performing as per
 the guidelines of RBI & provisions are made for possible losses as non
 performing investments as per the guidelines of the RBI.
 
 b) In respect of Profit on sale of investments under ''Held to Maturity''
 category, an equivalent amount, net of taxes and transfer to statutory
 reserve, is apportioned to the Capital reserve account.
 
 c) REPO & Reverse REPO transactions are accounted in accordance with
 the extant RBI Guidelines.
 
 d) Valuation
 
 i) Investments classifed as HFT have been marked to market and valued
 scrip-wise under each classification at monthly intervals, excluding
 equity shares which are done on a weekly basis. Within a classifcation
 net appreciation is ignored and net depreciation is provided for.
 
 ii) Investments classifed as AFS have also been marked to market, and
 valued quarterly excluding equities, which are done on a weekly basis.
 Within a classification net appreciation is ignored and net
 depreciation is provided for.
 
 iii) Investments classifed as HTM are stated at acquisition cost except
 in cases where the acquisition cost is higher than the face value, in
 which case the excess, i.e. premium on acquisition, is amortised over
 the period remaining to maturity on equated basis. Any diminution in
 value other than temporary, in investments in subsidiaries/joint
 venture/ associates included under HTM is provided for.
 
 iv) Closing stock of gold is valued at cost or market price whichever
 is lower.
 
 4.  Derivatives
 
 Interest rate swaps/currency swaps pertain to trading position and
 which are outstanding as on Balance Sheet date are marked to market and
 net appreciation is ignored and net depreciation is recognised in the
 Profit and Loss Account.
 
 5.  Transactions Involving Foreign Exchange
 
 a) All monetary assets and liabilities denominated in foreign
 currencies are translated at the exchange rates prevailing at the close
 of the year as advised by the Foreign Exchange Dealers'' Association of
 India (FEDAI).
 
 b) Income and expenditure denominated in foreign currencies have been
 accounted at the exchange rates prevailing on the dates of the
 transactions.
 
 c) Outstanding foreign exchange forward contracts are revalued at the
 rates applicable on the closing date as advised by FEDAI. The resultant
 Profit/loss is taken into Profit and Loss account.
 
 d) Contingent liabilities on guarantees, letters of credit, acceptances
 and endorsements are reported at the rates prevailing on the Balance
 Sheet date.
 
 6.  Fixed Assets
 
 a) Fixed Assets are stated at historical/revalued cost less accumulated
 depreciation & impairment of assets, if any. Premises which were
 revalued are stated at such values on revaluation and the appreciation
 credited to the Capital Reserve.
 
 b) Depreciation on assets has been provided for on the diminishing
 balances at the rates as per Schedule XIV to the Companies Act, 1956,
 except on Computers, Mobile phones & EPABX, which are depreciated under
 the straight line method at 33.33% per annum as per RBI guidelines.
 
 Depreciation on assets sold/disposed of during the year is provided for
 the period up to the date of sale. Depreciation on assets costing less
 than Rs. 5000 each has been fully written of
 
 c) Depreciation on assets revalued has been charged on their
 written-down value including the addition made on revaluation, and an
 equivalent amount towards the additional depreciation provided
 consequent upon revaluation has been transferred from the Capital
 Reserve to the Profit & Loss Account.
 
 (d) Licence fee and implementation expenditure for Core Banking
 Solution are amortised on the straight line basis over a period of
 three years, on a pro rata basis.
 
 7.  Finance Leasing
 
 Accounting Standard on Leases (AS19) issued by the Institute of
 Chartered Accountants of India (ICAI) is applicable to leases entered
 into on or after 1 April 2001. Since all the Bank''s outstanding fnance
 lease transactions were entered into prior to that date, the Bank has
 followed the earlier ICAI guidelines in respect of these leases.
 
 Depreciation on non-performing leased assets (NPAs) is provided on
 written-down value as per the Companies Act 1956, by directly charging
 to Profit & Loss Account without any corresponding adjustment in the
 Lease Adjustment Account.  In addition to depreciation, provision is
 also made for non-performing leased assets as per RBI guidelines.
 
 8.  Employee benefits
 
 (a) Post –Employment benefit Plans
 
 Payments to defned contribution retirement benefit schemes (other than
 Second option for pension) are charged as an expense as they fall due.
 
 For defined benefit schemes, the cost of providing benefits is
 determined using the
 
 Projected Unit Credit Method, with actuarial valuations being carried
 out at each Balance Sheet date. Actuarial gains and losses are
 recognized in full in the Profit and Loss account for the period in
 which they occur. Past service cost is recognized immediately to the
 extent that the benefits are already vested, and otherwise is amortized
 on straight-line basis over the average period until the benefits
 become vested.
 
 The retirement benefit obligation recognized in the Balance Sheet
 represents the present value of the defned obligation as adjusted for
 unrecognized past service cost, and as reduced by the fair value of
 scheme assets.
 
 The net liability arising out of exercise of the second option for
 pension is fully reckoned, to be amortised in fve years with 1/5th
 thereof being absorbed in the Profit and Loss Account of the year as per
 approval of RBI (vide letter DBOD. No.BP.BC.15896/21.04.018/2010.-11
 dated 08.04.2011.)
 
 (b) Short-term employee benefits
 
 The undiscounted amount of short-term employee benefits expected to be
 paid in exchange for the services rendered by employees is recognized
 during the period when the employee renders the service.
 
 (c) The provision towards sick leave benefit to staf is made based on
 actuarial valuation.
 
 9.  Recognition of Income and Expenditure
 
 Items of income and expenditure are accounted for on accrual basis,
 except as stated hereunder:
 
 a) Income from non performing investments/ advances are recognised on
 realisation as per the guidelines of RBI.
 
 b) Commission other than guarantee commission is accounted on cash
 basis.  Guarantee commission is recognised over the period of the
 guarantees. Dividends are recognised as and when declared by the
 investee companies.
 
 c) Unpaid funded interest on term loans are accounted on realisation as
 per the guidelines of RBI.
 
 d) Income from consignment sale of gold is accounted as other income.
 
 10.  Provision for Income Tax
 
 Provision for income tax is made for the current tax, and adjustment is
 made for deferred tax for the year representing the net change in the
 deferred tax asset or deferred tax liability, in accordance with
 Accounting Standard 22 issued by the Institute of Chartered Accountants
 of India (ICAI) Deferred tax assets are recognised on the basis of the
 management''s judgment of reasonable certainty of future Profits.
 
 11.  Earnings per Share
 
 Basic Earnings per share (EPS) reported is computed by dividing net
 Profit after tax by the weighted average number of equity shares
 outstanding for the year.
 
 12.  Segment Information
 
 In terms of the guidelines of the RBI on enhanced disclosure of segment
 information, the Bank''s operations are classifed into four reportable
 business segments, viz. Treasury Operations (investment and trading in
 securities, shares, debentures, etc.), Wholesale Banking, Retail
 Banking and Other Banking Operations and segment information is
 reported accordingly.  For this purpose, aggregate exposure to a single
 entity exceeding Rs. 5 crore is treated as wholesale banking segment and
 other exposures are treated as retail banking segment as per the RBI
 guidelines. For presentation of segment information, directly
 attributable income and assets are allocated as such and the other
 income, expenses, other assets and liabilities are apportioned on
 appropriate basis.
 
 13.  Net Profit
 
 The net Profit disclosed in the Profit and Loss Account is after:
 
 (a) provision for taxes;
 
 (b) provision for possible losses on Standard Assets, NPAs, and other
 contingencies;
 
 (c) depreciation on investments; and
 
 (d) other usual and necessary provisions.
 
 14.  Use of estimates
 
 The preparation of financial statements requires the management to make
 estimates and assumptions considered in the reported amounts of assets
 and liabilities (including contingent liabilities) as of the date of
 the financial statements and the reported income and expenses during the
 reporting period.  Management believes that the estimates used in the
 preparation of the financial statements are prudent and reasonable.
 Future results could difer from these estimates. Any revision to the
 accounting estimates is recognised prospectively in the current and
 future periods.
 
 15.  Impairment of assets
 
 Impairment losses, if any, on Fixed Assets (including revalued assets)
 are recognised in accordance with the Accounting Standard 28
 “Impairment of Assets” issued by Institute of Chartered Accountants of
 India (ICAI) and charged to Profit and Loss Account.
 
 16.  Accounting for Provisions, Contingent Liabilities & Contingent
 Assets
 
 As per the Accounting Standard 29, “Provisions, Contingent Liabilities
 and Contingent Assets”, issued by the Institute of Chartered
 Accountants of India (ICAI), the Bank recognises provisions only when
 it has a present obligation as a result of a past event, it is probable
 that an outfow of resources embodying economic benefits will be
 required to settle the obligation, and when a reliable estimate of the
 amount of the obligation can be made. Contingent assets are not
 recognised in the financial statements.