1.  Reconciliation of entries outstanding as on 31.03.2011 in the
 inter-branch and other accounts has been drawn. Matching of entries
 outstanding in inter-branch and inter-bank accounts including balances
 with foreign banks and Reserve Bank of India, drafts accounts, suspense
 accounts, branch adjustment accounts, clearing transactions, funds
 transfers, telegraphic transfers, balances pertaining to dividends /
 interest / refund orders paid / payable accounts, advances paid for
 acquisition of assets, etc. is complete upto 31.12.2010 and is under
 progress for the remaining period. In the opinion of the Bank,
 consequential effect of the above on the revenue / assets / liabilities
 is not material.
 
 2.  In respect of certain premises acquired by the Bank having written
 down value of Rs. 7.44 crore, (previous year Rs. 8.27 crore) documentation
 / registration are yet to be completed pending legal or other
 formalities.
 
 3.  In the case of un-audited branches, the returns / classification of
 advances as reported by the concerned branches have been adopted.
 
 4.  Claims pending and to be preferred with ECGCI Limited amounting to
 Rs. 53.78 crore (previous year Rs. 4.14 crore) have been considered as
 realisable for the purpose of computing provisions.
 
 5.  No provision has been considered necessary by the Management in
 respect of disputed tax liabilities in view of the judgements in favour
 of the Bank. Further, certain deductions have been considered while
 working out tax provisions in respect of some claims under Income Tax
 Act based on the legal opinions obtained.
 
 vii) Disclosures on risk exposure in derivatives
 
 a) Qualitative Disclosure
 
 Bank has put in place a comprehensive derivative policy for undertaking
 derivative transactions for hedging, trading and servicing customers
 purpose as per RBI guidelines duly approved by the Board. The policy
 lays down the type, scope and usage with appropriate limits for
 derivative transactions. From the view point of operational efficiency
 and risk oversight the Derivatives desk is segregated into Front
 Office, Mid Office and Back Office with clear segregation of portfolio.
 The derivative hedges are continuously monitored for effective
 performance as per laid down policy and corrective measures are taken
 for mitigating the risk.
 
 d) In respect of the advances restructured under the Prudential
 Guidelines of the Reserve Bank of India dated 27th August 2008 and the
 subsequent clarifications / guidelines issued from time to time in this
 respect, the Bank ha; provided a sum of Rs. 7.31 crore (previous year Rs.
 13.65 crore) as diminution in the fair value of advances on account o
 such restructuring which in the Banks opinion is considered adequate
 in view of upward revision in rate of interest oi such restructured
 advances. The full implementation of the conditions laid down for
 restructuring in the said Circula are being complied with.
 
 xiii) The Bank has not made any financing for margin trading and also
 not securitised any assets during the year.
 
 xvii) Overseas Assets, NPAs and Revenue : NIL
 
 xix) Provision coverage ratio: Coverage ratio as of 31.03.02011 is
 63.69% (previous year 64.24%) as per RBI guidelines.  However, the Bank
 has achieved the PCR as envisaged in RBI circular DBOD.
 No.BP.BC.87-21.048/2010-11 dt.21.04.2011
 
 xx) Unsecured advances : The Bank has no unsecured advances wherein
 intangible securities have been taken as collateral securities.
 
 During the year 2010 - 2011, the bank had issued 74 letters of comfort
 amounting to USD 2,220,619,739.72 covering import of goods into india.
 These letters of comfort have been issued after due assessment of its
 financial impact on the bank and with the approval of the competent
 authority. As on the date of the balance sheet 34 letters of comfort
 amounting to USD 24.06 million (approximately Rs. 108.39 crore @ USD 1 =
 Rs. 45.01) are outstanding which, in the opinion of the management, will
 not have any significant impact on the banks financial position
 
 6.  Compliance with Accounting Standards
 
 i) There were no material prior period income/ expenditure required to
 be disclosed as per AS -5.
 
 ii) In terms of accounting policy No.9 of the bank, some items are
 recognised on cash basis. However, the management is of the view that
 since the amount involved is not material, it does not require any
 disclosure under AS-9.
 
 iii) The Bank is revaluing foreign currency transactions consistently
 at the weekly average rate of the last week of the preceding month,
 prescribed by FEDAI, instead of the rate at the date of the transaction
 as per AS 11. The management is of the view that there is no material
 impact on the accounts for the year.
 
 iv) The following information is disclosed in terms of Accounting
 Standards notified by Ministry of Corporate Affairs under the Companies
 (Accounting Standards) Rules, 2006.
 
 During the year, the Bank reopened the pension option for such of its
 employees who had not opted for the pension scheme earlier. As a result
 of which in respect of 5559 number of employees in service, the Bank
 has incurred a liability of Rs. 473 crore.
 
 Further, during the year, the limit of gratuity payable to the
 employees of the banks was also enhanced pursuant to the amendment to
 the Payment of Gratuity Act, 1972. As a result, the gratuity liability
 of the Bank has increased by Rs. 123 crore.
 
 In terms of the requirements of the Accounting Standard (AS) 15,
 Employee Benefits, the entire amount of Rs. 596 crore is required to be
 charged to the Profit and Loss Account.
 
 However, the Reserve Bank of India has issued a circular
 no.DBOD.BP.BC.80/21.04.018/2010-11 on Re-opening of Pension Option to
 Employees of Public Sector Banks and Enhancement in Gratuity Limits -
 Prudential Regulatory
 
 Treatment, dated 9th February, 2011. In accordance with the provisions
 of the said Circular, the Bank would amortize the amount of Rs. 596 over
 a period of five years. Accordingly, Rs. 119 crore (representing
 one-fifth of Rs. 596 crore) has been charged to the Profit and Loss
 Account. In terms of the requirements of the aforesaid RBI circular,
 the balance amount carried forward ie., Rs.477 crore include any
 employees relating to separated / retired employees.
 
 Had such a circular not been issued by RBI, the profit of the Bank
 would have been lower by Rs.477 crore pursuant to application of the
 requirement of AS-15
 
 vii) The Bank has identified the following as related party as per
 AS-18 on Related Party Disclosures :
 
 a) Key Management Personnel :
 
 1) Shri Albert Tauro, Chairman & Managing Director
 
 2) Smt Shubhalakshmi Panse, Executive Director
 
 viii) Earning Per Share
 
 The Bank reports basic earnings per equity share in accordance with
 Accounting Standard 20 on Earnings per Share.  Basic earnings per
 share for the period is computed by dividing net profit after tax by
 the weighted average number of equity shares outstanding during the
 year.
 
 ix) Accounting for Taxes on Income
 
 The Bank has accounted for Taxes on Income in compliance with
 Accounting Standard 22 - Accounting for Taxes on Income issued by the
 ICAI. Accordingly, deferred tax assets and liabilities are recognised.
 
 x) In the opinion of the Management, there is no material impairment of
 any of the Fixed Assets of the Bank as per Accounting Standard 28 -
 Impairment of Assets.
 
 7.  Reserve Bank of India has not imposed any penalty during the year
 
 8.  The bank has draw down a sum of Rs. 0.003 crore from General Reserve
 on account of Lapsed Demand Drafts.
 
 9.  Bank is not having adequate information in respect of
 Suppliers/Service providers covered under Micro, Small Medium
 Enterprises Development Act, 2006. In view of this, information
 required to be disclosed u/s 22 of the said Act is not given.
 
 10.  Previous years figures have been re-grouped / re-classified /
 re-cast wherever necessary to conform to current years classification.