1.  GENERAL
 
 1.1 Basis of preparation:
 
 The accompanying fnancial statements are prepared under the historical
 cost convention. They conform to Generally Accepted Accounting
 Principles in India, which comprises the statutory provisions,
 regulatory /Reserve Bank of India (RBI) Guidelines, Accounting
 Standards/guidance notes issued by the Institute of Chartered
 Accountants of India (ICAI) and practices prevalent in the Banking
 Industry in India.
 
 1.2 Use of Estimates:
 
 The preparation of fnancial statements require the management to make
 estimates and assumptions considered in the reported amounts of assets
 and liabilities (including contingent liabilities) as on the date of
 the fnancial statements and the reported income and expenses during the
 reporting period. Management believes that the estimates used in the
 preparation of the fnancial statements are prudent and reasonable.
 Future results could differ from these estimates. Any revision to the
 accounting estimates is recognized prospectively in the current and
 future periods.
 
 2.  REVENUE RECOGNITION
 
 2.1 Income & Expenditure are recognised on accrual basis except the
 following income, which are recognised on cash basis:
 
 i) Interest and other income on Non Performing Assets as per IRAC norms
 prescribed by RBI
 
 ii) Interest on Non-performing Investments
 
 iii) Commission on L.Cs. and Guarantees (excluding Deferred Payment
 Guarantees)
 
 iv) Insurance claims
 
 v) Dividend on shares and units of Mutual Funds
 
 vi) Interest on overdue demand bills purchased
 
 vii) Locker Rent
 
 viii) Interest on Tax refund
 
 ix) Commission from Cross Selling Activities
 
 2.2 Proft or loss on sale of investments is recognised in the Proft and
 Loss Account, however, the proft on sale of investments in the ''Held to
 Maturity'' category is appropriated net of applicable taxes and amount
 required to be transferred to statutory reserve to ''Capital Reserve
 Account''.
 
 2.3 Income (other than interest) on investments in Held to Maturity
 (HTM) category acquired at a discount to the face value, is recognised
 as follows :
 
 a) On Interest bearing securities, it is recognised only at the time of
 sale/redemption.
 
 b) On zero-coupon securities, it is accounted for over the balance
 tenor of the security on a constant yield basis.
 
 3.  TRANSACTIONS INVOLVING FOREIGN EXChANGE
 
 The Bank has followed the Accounting Standard-11 (Revised 2003) issued
 by the Institute of Chartered Accountants of India regarding foreign
 exchange transactions and accordingly:-
 
 3.1 Foreign Currency transactions are recorded on initial recognition
 in the reporting currency by applying to the foreign currency amount,
 the exchange rate between the reporting currency and the foreign
 currency on the date of transaction.
 
 3.2 Foreign currency monetary items are reported using the Foreign
 Exchange Dealers Association of India (FEDAI) closing spot rate and
 resultant gain / loss is carried to Proft and Loss Account.
 
 3.3 Exchange differences arising on the settlement of monetary items at
 the rates different from those at which they were recorded, are
 recognized as income or as expense in the period in which they arise.
 
 3.4 Guarantees, Letters of Credit and Forward Exchange Contracts issued
 in foreign currencies are translated at FEDAI rates on the Balance
 Sheet date.
 
 4.  INVESTMENTS
 
 4.1 The transactions in Government and other Securities are accounted
 on Settlement Date.
 
 4.2 The investment portfolio of the Bank is classifed in accordance
 with the Reserve Bank of India guidelines into three categories viz.
 
 i.  Held to Maturity,
 
 ii.  Available for Sale,
 
 iii.  Held for Trading.
 
 4.3 However, for disclosure in the Balance Sheet, these are classifed
 under six groups:
 
 i.  Govt. Securities,
 
 ii.  Other Approved securities,
 
 iii.  Shares,
 
 iv Debentures & Bonds,
 
 v Subsidiaries/Joint Ventures,
 
 vi Others.
 
 4.4 For the purpose of valuation, in terms of RBI guidelines, the
 following principles have been adopted :-
 
 i. Securities held in ''Held To Maturity'' category are valued at book
 value. However, in case of permanent diminution, the same is stated at
 net of such diminution. The excess of book value over the face value is
 amortised over the remaining period of maturity using constant yield
 method. Such amortization of premium is adjusted against income under
 the head Interest on Investment.
 
 ii. Securities classifed as Available For Sale are marked to market
 at the end of each quarter, which are valued scrip-wise and
 depreciation/appreciation for each category as disclosed in the Balance
 Sheet is aggregated. Net depreciation, if any, is provided for, while
 net appreciation is ignored.
 
 iii. Securities in Held For Trading category are revalued at monthly
 intervals and the net depreciation is recognised and net appreciation
 is ignored.
 
 iv. Broken period interest paid / received on debt instruments is
 treated as interest expense/ income and is excluded from cost/sale
 consideration.
 
 v.  Cost is determined on the weighted average cost method.
 
 4.5 Security receipts issued by an asset reconstruction company (ARC)
 are valued in accordance with the guidelines applicable to non-SLR
 instruments. Accordingly, in cases where the security receipts issued
 by the ARC are limited to the actual realisation of the fnancial assets
 assigned to the instruments in the concerned scheme, the Net Asset
 Value, obtained from the ARC, is reckoned for valuation of such
 investments.
 
 4.6 The non-performing investments are identifed and
 depreciation/provision is made as per RBI guidelines.
 
 4.7 Transfer of scrips from AFS / HFT category to HTM category are made
 at the lower of book value or market value. However, in the case of
 transfer of securities from HTM to AFS / HFT category, discounted
 securities are transferred at the acquisition cost and premium bearing
 securities are transferred at amortised cost. In case of transfer of
 securities from AFS to HFT category or vice-versa, the securities are
 not re-valued on the date of transfer.
 
 4.8 The cost of investment is net of upfront incentives, brokerage and
 commission received.
 
 4.9 Proft or Loss on sale of Investments is recognised on the basis of
 weighted average cost.
 
 4.10 Investments in Regional Rural Banks are classifed under Held To
 Maturity (HTM) Category.
 
 4.11 Repo and Reverse Repo Transactions
 
 i) The Bank has adopted the Uniform Accounting Procedure prescribed by
 the RBI for accounting of Repo and Reverse Repo transactions [other
 than transactions under the Liquidity Adjustment Facility (LAF) with
 the RBI]. Accordingly, the securities sold/ purchased under
 Repo/Reverse Repo are treated as outright sales/purchases and accounted
 for in the Repo/Reverse Repo Accounts and the entries are reversed on
 the date of maturity. Costs and revenues are accounted as interest
 expenditure/income, as the case may be. Balance in Repo/Reverse Repo
 Account is adjusted against the balance in the Investment Account.
 
 ii) Securities purchased / sold under LAF with RBI are debited /
 credited to Investment Account and reversed on maturity of the
 transaction. Interest expended / earned thereon is accounted for as
 expenditure / revenue.
 
 5.  ADVANCES
 
 5.1 Assets Classifcation and provisioning in respect of Non-Performing
 Advances is made as per Income Recognition, Asset Classifcation &
 Provisioning (IRAC) norms issued by the Reserve Bank of India.
 
 5.2 Advances are net of specifc loan loss provisions, foating
 provision, ECGC claims received, bills rediscounted, provision for
 diminution in fair value and interest sacrifce.
 
 5.3 In addition to the specifc provision on NPAs, general provisions
 are also made for standard assets. These provisions are refected in
 Schedule 5 of the balance sheet under the head Other Liabilities &
 Provisions – Others and are not considered for arriving at Net NPAs.
 
 5.4 Legal expenses incurred in respect of suit fled accounts are
 treated as revenue expenditure and on recovery the same are credited to
 revenue expenditure.
 
 5.5 The sale of NPA is accounted as per guidelines prescribed by RBI :-
 
 i) In case the sale is at a price lower than the Net Book value (NBV),
 the defcit is charged to Proft & Loss Account.
 
 ii) In case the sale is at price higher than the NBV, the surplus is
 kept separately for meeting the shortfall/ losses, if any, on future
 sale of other NPAs.
 
 iii) In case of sale of written off accounts, the amount realized is
 credited to Proft & Loss account.
 
 5.6 In case of restructuring /rescheduling of advances, erosion in the
 fair value of advances is provided on the basis of present values
 computed in the manner prescribed by the RBI.
 
 6.  FLOATING PROVISION
 
 In accordance with the Reserve Bank of India guidelines, the bank has
 an approved policy for creation and utilization of foating provisions
 separately for advances, investments and general purpose. The quantum
 of foating provisions to be created would be assessed at the end of
 each fnancial year. The foating provisions would be utilized only for
 contingencies under extra ordinary circumstances specifed in the policy
 with prior permission of Reserve Bank of India.
 
 7.  LEASED ASSETS
 
 7.1 Lease income is recognised based on the internal rate of return
 method over the primary period of the leased assets and accounted for
 in accordance with guideline/Accounting Standard issued by the
 Institute of Chartered Accountants of India (ICAI).
 
 7.2 Depreciation is provided on Straight Line Method at rates
 prescribed under Schedule-XIV of the Companies Act 1956. Extra lease
 depreciation, in accordance with the applicable guidelines, is adjusted
 against the cost of Lease assets through lease equalization account.
 
 7.3 Provision for Non-Performing leased assets is made on the basis of
 IRAC norms applicable to advances, as per RBI guidelines.
 
 8.  DERIVATIVES
 
 8.1 Derivative contracts, such as foreign currency options, interest
 rate swaps, currency swaps, cross currency interest rate swaps and
 forward rate agreements are entered, in order to hedge on-balance
 sheet/off-balance sheet assets and liabilities or for trading purposes.
 The swap contracts entered to hedge on-balance sheet assets and
 liabilities are structured in such a way that they bear an opposite and
 offsetting impact with the underlying on-balance sheet items. The
 impact of such derivative instruments is correlated with the movement
 of the underlying assets and accounted in accordance with the
 principles of hedge accounting.
 
 8.2 All derivative instruments are recognized as assets or liabilities
 in the balance sheet and measured at marked to market.
 
 8.3 Derivative contracts classifed as hedge are recorded on accrual
 basis. Hedge contracts are not marked to market unless the underlying
 Assets / Liabilities are also marked to market.
 
 8.4 Except as mentioned above, all other derivative contracts are
 marked to market as per the generally accepted practices prevalent in
 the industry. In respect of derivative contracts that are marked to
 market, changes in the market value are recognized in the proft and
 loss account in the period of change.
 
 8.5 Option premium paid or received is recorded in proft and loss
 account at the expiry of the option. The Balance in the premium
 received on options sold and premium paid on options bought have been
 considered to arrive at Marked to Market value for forex Over the
 Counter options.
 
 9.  FIXED ASSETS
 
 9.1 Fixed Assets are carried at cost less accumulated depreciation.
 
 9.2 Premises include freehold as well as leasehold properties.
 
 9.3 Cost includes cost of purchase and all expenditure such as site
 preparation, installation costs and professional fees incurred on the
 asset before it is put to use. Subsequent expenditure incurred on
 assets put to use is capitalised only when it increases the future
 benefts from such assets or their functioning capability.
 
 9.4 Depreciation on Fixed Assets is provided as under :-
 
 i On Computers & ATM Straight Line Method @ 33.33%. every year
 
 ii On Computer Software not @ 100%, in the year of acquisition.
 
 forming integral part of hardware
 
 iii Leasehold land and Building Amortised as per the life of the lease.
 
 iv On rest of the assets On diminishing balance method at the rates and
 in including Software forming the manner prescribed under Income Tax
 integral part of hardware Rules 1962
 
 9.5 Depreciation on premises is provided on composite cost, wherever
 the value of land and building is not separately identifable.
 
 9.6 No depreciation is provided on assets sold/disposed off during the
 year.
 
 9.7 Capital Work in Progress also includes advance payment for purchase
 of assets.
 
 10.  IMPAIRMENT OF ASSETS
 
 As per Accounting Standard – 28, Fixed Assets are reviewed for
 impairment whenever events or changes in circumstances warrant that the
 carrying amount of an asset may not be recoverable. Recoverability of
 assets to be held and used is measured by a comparison of the carrying
 amount of an asset to future net discounted cash fows expected to be
 generated by the asset. If such assets are considered to be impaired,
 the impairment to be recognized is measured by the amount by which the
 carrying amount of the asset exceeds the fair value of the asset.
 
 11.  EMPLOYEE BENEFITS
 
 11.1 Short Term Employee Beneft:
 
 The undisclosed amount of short term employee benefts, such as medical
 benefts, casual leave etc. which are expected to be paid in exchange
 for the services rendered by the employees are recognized during the
 period when the employee renders the service.
 
 11.2   Post Employment Benefts:
 
 i) Defned Beneft Plan
 
 The Bank operates a Provident Fund scheme for its all eligible
 employees. The Bank contributes monthly its contribution for the
 employees who have not opted for pension, at a determined rate
 (currently 10% of employee''s basic pay plus eligible allowance). These
 contributions are remitted to an approved trust established for this
 purpose and are charged to Proft & Loss Account.
 
 The Bank operates gratuity and pension schemes, which are defned
 benefts plans.
 
 The Bank provides for gratuity to all eligible employees. The gratuity,
 an amount equivalent of 15 days eligible salary payable for each
 completed year of service, is paid subject to a maximum amount of
 Rs10,00,000/- as per Gratuity Act, 1972 unless the same is higher in
 terms of the State Bank of Bikaner & Jaipur (Payment of Gratuity to
 Employees ) Regulation, 1970. The Bank makes annual contributions to a
 fund administered by trustees based on an independent external
 actuarial valuation carried out annually.
 
 The Bank provides for pension to all eligible employees as per the
 State Bank of Bikaner & Jaipur (Employees'') Pension Regulation, 1995.
 The beneft is in form of monthly pension to eligible employees. The
 Bank makes annual contributions to funds administered by trustees based
 on an independent external actuarial valuation carried out annually.
 
 The cost of providing defned benefts is determined using the projected
 unit credit method (recommended method under AS-15), with actuarial
 valuations being carried out at each balance sheet date.
 
 Gains/ losses are recognized in the statement of proft and loss and are
 not deferred.
 
 ii) Defned Contribution Plans
 
 The bank operates a new pension scheme (NPS) for all offcers/ employees
 joining the Bank on or after 1st April, 2010, which is a defned
 contribution plan, such new joinees not being entitled to become
 members of the existing SBBJ Pension Scheme. Pending fnalisation of the
 detailed scheme, the employees covered under the scheme contribute 10%
 of their basic pay plus dearness allowance to the scheme together with
 a matching contribution from the Bank. These contributions are retained
 as deposits in the bank and earn interest at the same rate as that of
 the current account of Provident Fund balance. The bank recognises such
 annual contributions and interest as an expense in the year to which
 they relate.
 
 iii) Other Long Term Employee benefts:
 
 All eligible employees of the bank are eligible for compensated
 absences, leave travel concession, retirement award and resettlement
 allowance. The costs of such long term employee benefts are internally
 funded by the bank.
 
 The cost of providing other long term benefts is determined using the
 projected unit credit method with actuarial valuations being carried
 out at each balance sheet date. Past service cost is recognized in the
 statement of proft and loss and is not deferred.
 
 12.  EARNINGS PER ShARE
 
 12.1 The Bank reports basic and diluted earnings per share in
 accordance with AS 20 ''Earnings per Share '' issued by the ICAI . Basic
 earnings per share are computed by dividing the net proft after tax by
 the weighted average number of equity shares outstanding for the year.
 
 12.2 Diluted earnings per share refect the potential dilution that
 could occur if securities or other contracts to issue equity shares
 were exercised or converted during the year.
 
 12.3 Diluted earnings per share are computed using the weighted average
 number of equity shares and diluted potential equity shares outstanding
 at year end.
 
 13.  TAXES ON INCOME
 
 13.1 Income Tax expense is the aggregate amount of current tax,
 deferred tax and wealth tax. Current year taxes are determined in
 accordance with the prevailing tax rates and tax laws. Deferred tax
 adjustments comprise changes in the deferred tax assets or liabilities
 during the year.
 
 13.2 Deferred tax assets and liabilities are recognised on a prudent
 basis for the future tax consequences of timing differences arising
 between the carrying values of assets and liabilities and their
 respective tax basis and carry forward losses.  Deferred tax assets and
 liabilities are measured using tax rates and tax laws that have been
 enacted or subsequently enacted prior to the balance sheet date. The
 impact of changes in the deferred tax assets and liabilities is
 recognised in the proft and loss account.
 
 13.3 Deferred tax assets are recognized and reassessed at each
 reporting date, in accordance with AS -22 and based upon management''s
 judgment as to whether realisation is considered certain. Deferred tax
 assets are recognized only if there is virtual certainty that such
 deferred tax assets can be realised against future taxable income.
 
 13.4 Special Reserve Account has been created under section 36 (i)
 (viii) of the Income Tax, 1961 from the Financial Year 2011-12, to
 avail the deduction. Bank has decided that it has no intention to make
 withdrawal from such Special Reserve created and maintained. Further
 such special reserve is in the nature of non-reversible and thus
 becomes a permanent difference and accordingly no deferred tax
 liability is created
 
 14.  PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
 
 14.1 In conformity with AS 29, Provisions, Contingent Liabilities and
 Contingent Assets, issued by the Institute of Chartered Accountants of
 India, the Bank recognizes 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 benefts will be required to settle the
 obligation and when a reliable estimate of the amount of the obligation
 can be made.
 
 14.2 No provision is recognized for:
 
 i) Any possible obligation that arises from past events and the
 existence of which will be confrmed only by the occurrence or
 non-occurrence of one or more uncertain future events not wholly within
 the control of the Bank; or
 
 ii) Any present obligation that arises from past events but is not
 recognized because
 
 a) it is not probable that an outfow of resources embodying economic
 benefts will be required to settle the obligation; or
 
 b) a reliable estimate of the amount of obligation cannot be made.
 
 Such obligations are recorded as Contingent Liabilities. These are
 assessed at regular intervals and only that part of the obligation for
 which an outfow of resources embodying economic benefts is probable, is
 provided for, except in the extremely rare circumstances where no
 reliable estimate can be made.
 
 iii) Contingent Assets are not recognized in the fnancial statements as
 this may result in the recognition of income that may never be
 realised.
 
 15.  CASH & CASH EQUIVALENTS
 
 Cash and cash equivalents include cash on hand and in ATM''s, and gold
 in hand, balances with RBI, balances with other banks, and money at
 call and short notice.
 
 16. NET PROFIT AND CONTINGENCY FUND
 
 a) Net Proft is arrived at after accounting for the following
 Provisions and Contingencies. 
 
 i) Depreciation on Investments
 
 ii) Provision for Income Tax and Wealth Tax
 
 iii) Provision for Loan Losses
 
 iv) Provision for Standard Assets and
 
 v) Other usual and necessary provisions and transfer to contingencies.
 
 b) Confgerency funds are grouped in Schedule-5 of the Balance sheet
 under the head other Liabilities and Provision