General
 
 The South Indian Bank Limited (SIB) was incorporated on January 29,
 1929 at Trichur as a private limited company and was later converted
 into a public limited company on August 11, 1939. SIB has a net work of
 700 branches in India and provides retail and corporate banking, para
 banking activities such as debit card, third party product
 distribution, in addition to Treasury and Foreign Exchange Business.
 SIB is governed by Banking Regulation Act, 1949 and other applicable
 Acts / Regulations. Its shares are listed in leading stock exchanges in
 India.
 
 Basis of Preparation
 
 The financial statements have been prepared in accordance with
 requirements prescribed under the Third Schedule of the Banking
 Regulation Act, 1949. The accounting and reporting policies of SIB used
 in the preparation of these financial statements conform to Generally
 Accepted Accounting Principles in India (Indian GAAP), the guidelines
 issued by Reserve Bank of India (RBI) from time to time, the Accounting
 Standards (AS) issued by the Institute of Chartered Accountants of
 India (ICAI) and notified by the Companies (Accounting Standards)
 Rules, 2006 as amended to the extent applicable and practices generally
 prevalent in the banking industry in India. The Bank follows the
 accrual method of accounting, and the historical cost convention,
 except where otherwise stated.
 
 The preparation of financial statements requires the management to make
 estimates and assumptions in the reported amounts of assets and
 liabilities (including contingent liabilities) as of the date of the
 financial statement and the reported income and expenses during the
 reporting period. Management believes that the estimates and
 assumptions used in preparation of the financial statements are prudent
 and reasonable. Actual results could differ from these estimates.
 
 Note:-
 
 *Amount subjected to restructuring as on the date of approval of
 restructuring proposal.
 
 Outstanding in the above restructured loans as at March 31, 2012 are Rs
 52.58 Crore, Rs 1.52 Crore and Rs 505.37 Crore under CDR mechanism, SME
 Debt restructuring and others respectively.
 
 1. Derivatives
 
 The bank uses forward exchange contracts to hedge against its foreign
 currency exposures relating to the underlying transactions and firm
 commitments. The bank has not entered into any derivative instruments
 for trading / speculative purposes either in Foreign Exchange or
 domestic treasury operations. Bank does not have any Forward Rate
 Agreement or Interest Rate Swaps
 
 * includes net credit of Rs 14.49 Crores in respect of earlier years
 (previous year -Nil)
 
 (b) Disputed Tax for earlier years
 
 The following deductions under the Income Tax Act, 1961 are considered
 in computing the income chargeable to tax
 
 (i) Bad Debts written off u/s 36 (1) (vii) pertaining to non rural
 branches.
 
 (ii) Provision for Bad and Doubtful debts u/s 36(1)(viia) subject to
 limits prescribed under the Act.
 
 The above deductions were under dispute before the Supreme Court
 through Special Leave Petition (SLP). The earlier decision of Division
 Bench of Kerala High Court in favour of the Bank, have been reversed by
 the Full Bench of the Kerala High Court subsequently and the matter was
 pending before the Supreme Court. The total estimated liability on
 account of this dispute has been disclosed as contingent liability
 (refer Schedule 12) for the year ended 31.03.2011. During the current
 year, Honorable Supreme Court upheld the decision of the Division Bench
 in respect of that matter, relating to Bad Debts written off u/s
 36(1)(iii) and accordingly, the contingent liability stands
 extinguished. Management continues to be confident of a favorable
 outcome in respect of the issues relating to Sec 36(1)(viia) and Sec
 14A pending before the Supreme Court.
 
 2. Penalties Levied by the Reserve Bank of India
 
 No penalties were levied by the Reserve Bank of India during the
 financial years ended March 31, 2012 and March 31, 2011.
 
 3. Draw Down from reserves
 
 In accordance with Reserve Bank of India guidelines, an amount net of
 taxes and net of transfer to statutory reserves of Rs 7.13 Crore
 (Previous Year Rs 4.69 Crore), has been drawn from Investment Reserve
 Account and credited to Profit and Loss account to the extent of
 provisions made during the year towards depreciation in investments in
 AFS and HFT categories.
 
 A : OTHER DISCLOSURES
 
 1.  Fixed Assets
 
 Premises of the Bank were revalued as on 31.03.2011 in accordance with
 the policy formulated by the Bank based on RBI guidelines by
 professionally qualified independent valuers empanelled by the Bank
 using the indices based on current market price. The written down value
 of the premises has been increased from Rs 192.31 crore to Rs 326.18 crore
 and the resultant appreciation in the value amounting to Rs 133.87 crore
 has been credited to revaluation reserve during 2010-11.
 
 4.  Related party disclosure:
 
 a) Key Management Personnel
 
 Dr. V A Joseph, Managing Director & Chief Executive Officer.
 
 b) Gross Remuneration paid Rs 56.79 Lakhs (Previous year Gross Rs 54.15
 Lakhs).
 
 Note: - The remuneration to the key managerial personnel does not
 include the provisions made for gratuity and leave benefits as they are
 determined on an actuarial basis for the bank as a whole
 
 The employee benefits on account of pension, gratuity and Leave have
 been ascertained on actuarial valuation in accordance with Accounting
 Standard - 15 (revised).
 
 During the year ended 31.03.2011, the Bank had re-opened the pension
 option for those employees who had joined the Bank prior to 29th
 September 1995 and had not opted for the pension scheme earlier.
 Consequently, 2217 employees had exercised their option for the pension
 scheme and the bank has incurred an extra liability of Rs 135.13 crore.
 Further, during the year ended 31.03.201 1, the limit of gratuity
 payable to the employees of the bank was also enhanced from Rs 3.50 lakh
 to Rs 10.00 Lakh, pursuant to the amendment to the Payment of Gratuity
 Act, 1972. As a result, the gratuity liability of the Bank has
 increased by Rs 21.40 crore. The extra cost of pension and gratuity to
 employees works out to Rs 156.53 crore.
 
 In terms of the requirements of the Accounting Standard (AS) 15,
 Employee Benefits, the entire amount of Rs 156.53 crore is required to
 be charged to the Profit and loss account for the year ended
 31.03.2011. However, in accordance with the circular issued by Reserve
 Bank of India vide reference number DBOD.BPBC.80/21 .04.018/2010-11
 dated February 9, 2011, and made applicable to our bank vide DBOD
 No.BP.BC.15896/21.04.018/2010-11 dated April 8, 2011, the Bank would
 amortise the amount of Rs 156.53 crore over a period of five years.
 Accordingly, Rs 31.31 crore (representing one-fifth of Rs 156.53 crore)
 has been charged to the profit and loss account of the previous year
 and the balance amount of Rs 125.22 crore has been carried forward for
 write off in next four years. During the current year 2011-12, bank has
 amortised an amount of Rs 40.91 crores (Rs 34.23 Crore towards pension
 and Rs 6.68 towards gratuity) and balance unamortized amount to be
 carried forward as on 31.03.2012 is Rs 84.31 Crore.  Accordingly, as a
 consequence of the above circular, profit of the Bank for the year is
 lower by Rs 40.91 crores and the reserves are higher by Rs 84.31 Crore.
 
 Notes:
 
 (i) Discount rate is based on the prevailing market yields of Indian
 Government securities as at the balance sheet date for the estimated
 term of obligations.
 
 (ii) Expected rate of return on plan assets is based on the average
 long term rate of return expected on investments of the funds during
 the estimated term of the obligations.
 
 (iii) The estimates of future salary increases, considered in actuarial
 valuation, take account the inflation, seniority, promotion and other
 relevant factors.
 
 a) Compensation for absence on Privilege / Sick / Casual Leave
 
 The charge on account of compensation for privilege / sick / casual
 leave, has been actuarially determined and excess provision of Rs 2.55
 crore (Previous year charge of Rs 0.69 Crore) has been credited to
 Profit and Loss account.
 
 (Note: The above information is as certified by Actuary and relied upon
 by Auditors.)
 
 5.  The Bank has not received any intimation from Suppliers regarding
 their status under the Micro, Small and Medium Enterprises Development
 Act, 2006 and hence disclosures, if any, relating to amounts unpaid as
 at the year end together with interest paid/ payable as required under
 the said Act have not been given.
 
 6.  Tier II Bonds
 
 Lower Tier II Bonds outstanding as at March 31, 2012 is Rs 265.00 Crore
 (Previous Year Rs 265.00 Crore).  Amount reckoned for Tier II Capital as
 per RBI guidelines is Rs 213.00 Crore (Previous Year Rs 226.00 Crore).
 
 7.  The figures of previous year were audited by a firm of Chartered
 Accountants other than S.R. Batliboi & Associates.
 
 8.  Figures of the previous year''s have been regrouped to confirm to
 the current year presentation wherever necessary.