Accounting Policies of Lakshmi Vilas Bank Ltd.(Amalgmated) Company

Mar 31, 2018

A. PRINCIPAL ACCOUNTING POLICIES

1. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities are evaluated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract, in accordance with the guidelines of FEDAI and the provisions of AS-11. The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

2. INVESTMENTS:

(a) Investments are categorized under the heads ‘Held to Maturity’, Available for Sale, and ‘Held for Trading’ and are valued in accordance with the guidelines of the Reserve Bank of India

(b) Brokerage / commission etc, paid in connection with the acquisition of investments is charged to revenue and not included in cost.

(c) Broken period interest paid / received on debt instruments is treated as interest expense / income.

(d) Security receipts are valued at NAV as declared by Securitisation Companies

(e) The excess of acquisition cost over the face value of securities under “Held to Maturity” category is amortised over the remaining period to maturity.

(f) Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged to the profit and loss account. Cost of investments is computed based on the Weighted Average Rate method.

(g) Profit / loss on sale of investments in the ‘Held to Maturity’ category is recognized in the profit and loss account and profit is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to capital reserve. Profit / loss on sale of investments in ‘Available for Sale’ and ‘Held for Trading’ categories is recognised in the profit and loss account.

(h) All Repo and Reverse Repo transactions are accounted for as borrowing and lending transactions respectively in accordance with the extant RBI guidelines.

3. ADVANCES:

3.1 In accordance with the prudential norms issued by RBI:

(a) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise;

(b) Provisions are made for loan losses, and

(c) General provision for standard advances is made.

3.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts held under sundries, and provision made for sacrifice of interest / diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

4. FIXED ASSETS AND DEPRECIATION:

(a) Fixed assets are accounted for at their historical cost except for Land and Building which are accounted at their revalued cost.

(b) Software is capitalised along with computer hardware and included under Other Fixed Assets.

(c) Depreciation on assets other than computers are provided on Straight Line Method after considering the useful life specified in Schedule II to the Companies Act, 2013 except for hand held communication devices(other than Tablets) which are depreciated in full considering the fast changing technology and obsolescence.

(d) Depreciation on computers and Software are provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(e) Depreciation for premises, in which land cost and construction cost could not be ascertained separately, is provided on the total cost.

5. EMPLOYEE BENEFITS:

(a) Annual contributions to the approved Employees’ Gratuity Fund, Approved Pension Fund and Provision for Leave Encashment benefits are made on actuarial basis and net actuarial gain/loss are recognised as per Accounting Standard 15. Contribution made by the bank to Provident Fund and Contributory Pension Scheme are charged to Profit & Loss account.

(b) The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant of Employee Stock Options.

6. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability, after due consideration of the judicial pronouncements and legal opinion, with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income).

7. REVENUE RECOGNITION:

(a) Income is accounted for on accrual basis.

(b) Interest income on non-performing advances/investments are recognized on realization basis, owing to the significant uncertainty in collection thereof:

(c) Interest on tax refund from Income Tax Department is accounted based on assessment orders received.

(d) Dividend Income on Investments is accounted based on declaration basis.

8. SEGMENT REPORTING:

(a) The Bank recognises the Business Segment as the Primary Reporting Segment and Geographical Segment as the Secondary Reporting Segment, in accordance with the RBI guidelines and in compliance with the Accounting Standard 17.

(b) Business Segment is classified into (a) Treasury (b) Corporate and Wholesale Banking, (c) Retail Banking and (d) Other Banking Operations.

(c) Geographical Segment consists only of the Domestic Segment since the Bank does not have any foreign branches.

9. EARNINGS PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 “Earnings per share”. Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

10. IMPAIRMENT OF ASSETS

The Bank assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Profit and Loss Account to the extent the carrying amount of assets exceeds their estimated recoverable amount.

11. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(a) As per the Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets”, the Bank recognises provisions only when it has a present obligation as a result of a past event and it is probable that an outflow 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.

(b) Contingent Liability is recognised and disclosed only when a legal dispute is pending before a court of law / forum / Banking Ombudsman.

(c) Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realised.

12. NET PROFIT:

The net profit as per the Profit & Loss account is arrived at after necessary provisions towards:

a) Taxation.

b) Advances and other assets.

c) Shortfall in the value of investments

d) Staff Retirement benefits.

e) Other usual and necessary provisions.

13. CASH AND CASH EQUIVALENTS:

Cash and cash equivalents include cash in hand, Balance with RBI, Balance with other Banks and money at Call and Short Notice.

Cash flows are reported using indirect method, whereby Profit (Loss) before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the bank are segregated.

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Mar 31, 2017

A. BASIS OF ACCOUNTING:

The financial statements are prepared following the going concern concept, on historical cost basis unless otherwise stated and conform to the Generally Accepted Accounting Principles, (GAAP) in India which encompasses applicable statutory provisions, regulatory norms prescribed by the Reserve Bank of India (RBI) from time to time, Accounting Standards (AS) specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent applicable and current practices prevailing in the banking industry in India.

B. USE OF ESTIMATES:

The preparation of the financial statements require management to make estimates and assumptions that affect 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 reported period. The Management believes that the estimates and assumptions used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. The differences, if any between estimates and actual will be dealt appropriately in future periods.

C. PRINCIPAL ACCOUNTING POLICIES

1. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities are evaluated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract, in accordance with the guidelines of FEDAI and the provisions of AS-11. The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

2. INVESTMENTS:

(a) Investments are categorized under the heads ''Held to Maturity'', Available for Sale, and ''Held for Trading'' and are valued in accordance with the guidelines of the Reserve Bank of India

(b) Brokerage / commission etc, paid in connection with the acquisition of investments is charged to revenue and not included in cost.

(c) Broken period interest paid / received on debt instruments is treated as interest expense / income.

(d) Security receipts are valued at NAV as declared by Securitization Companies

(e) The excess of acquisition cost over the face value of securities under "Held to Maturity" category is amortized over the remaining period to maturity.

(f) Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged to the profit and loss account. Cost of investments is computed based on the Weighted Average Rate method.

(g) Profit / loss on sale of investments in the ''Held to Maturity'' category is recognized in the profit and loss account and profit is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to capital reserve. Profit / loss on sale of investments in ''Available for Sale'' and ''Held for Trading'' categories is recognised in the profit and loss account.

(h) All Repo and Reverse Repo transactions are accounted for as borrowing and lending transactions respectively in accordance with the extant RBI guidelines.

3. ADVANCES:

3.1 In accordance with the prudential norms issued by RBI:

(a) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise;

(b) Provisions are made for loan losses, and

(c) General provision for standard advances is made.

3.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards

NPA accounts receipts held under sundries, and provision made for sacrifice of interest / diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

4. FIXED ASSETS AND DEPRECIATION:

(a) Fixed assets are accounted for at their historical cost except for Land and Building which are accounted at their revalued cost.

(b) Software is capitalized along with computer hardware and included under Other Fixed Assets.

(c) Depreciation on assets other than computers are provided on Straight Line Method after considering the useful life specified in Schedule II to the Companies Act, 2013 except for hand held communication devices(other than Tablets) which are depreciated in full considering the fast changing technology and obsolescence.

(d) Depreciation on computers and Software are provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(e) Depreciation for premises, in which land cost and construction cost could not be ascertained separately, is provided on the total cost.

5. EMPLOYEE BENEFITS:

(a) Annual contributions to the approved Employees'' Gratuity Fund, Approved Pension Fund and Provision for Leave Encashment benefits are made on actuarial basis and net actuarial gain/loss are recognized as per Accounting Standard 15. Contribution made by the bank to Provident Fund and Contributory Pension Scheme are charged to Profit & Loss account.

(b) The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant of Employee Stock Options.

6. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability, after due consideration of the judicial pronouncements and legal opinion, with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income).

7. REVENUE RECOGNITION:

(a) Income is accounted for on accrual basis.

(b) Interest income on non-performing advances/investments are recognized on realization basis, owing to the significant uncertainty in collection thereof:

(c) Interest on tax refund from Income Tax Department is accounted based on assessment orders received.

(d) Dividend Income on Investments is accounted based on declaration basis.

8. SEGMENT REPORTING:

(a) The Bank recognizes the Business Segment as the Primary Reporting Segment and Geographical Segment as the Secondary Reporting Segment, in accordance with the RBI guidelines and in compliance with the Accounting Standard 17.

(b) Business Segment is classified into (a) Treasury (b) Corporate and Wholesale Banking, (c) Retail Banking and (d) Other Banking Operations.

(c) Geographical Segment consists only of the Domestic Segment since the Bank does not have any foreign branches.

9. EARNINGS PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 "Earnings per share". Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

10. IMPAIRMENT OF ASSETS

The Bank assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Profit and Loss Account to the extent the carrying amount of assets exceeds their estimated recoverable amount.

11. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(a) As per the Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets", the Bank recognizes provisions only when it has a present obligation as a result of a past event and it is probable that an outflow 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.

(b) Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

12. NET PROFIT:

The net profit as per the Profit & Loss account is arrived at after necessary provisions towards: -

a) Taxation.

b) Advances and other assets.

c) Shortfall in the value of investments

d) Staff Retirement benefits.

e) Other usual and necessary provisions.

13. CASH AND CASH EQUIVALENTS:

Cash and cash equivalents include cash in hand, Balance with RBI, Balance with other Banks and money at Call and Short Notice.

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Mar 31, 2015

A. BASIS OF ACCOUNTING:

The financial statements are prepared following the going concern concept, on historical cost basis unless otherwise stated and conform to the Generally Accepted Accounting Principles, (GAAP) in India which encompasses applicable statutory provisions, regulatory norms prescribed by the Reserve Bank of India (RBI) from time to time, Accounting Standards (AS) specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent applicable and current practices prevailing in the banking industry in India.

B. USE OF ESTIMATES:

The preparation of the financial statements require management to make estimates and assumptions that affect 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 reported period. The Management believes that the estimates and assumptions used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. The differences, if any between estimates and actual will be dealt appropriately in future periods.

C. PRINCIPAL ACCOUNTING POLICIES

1. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities are evaluated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract, in accordance with the guidelines of FEDAI and the provisions of AS-11, The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

2. INVESTMENTS:

(a) Investments are categorized under the heads 'Held to Maturity', Available for Sale, and 'Held for Trading' and are valued in accordance with the guidelines of the Reserve Bank of India.

(b) Brokerage / commission etc, paid in connection with the acquisition of investments is charged to revenue and not included in cost.

(c) Broken period interest paid / received on debt instruments is treated as interest expended / income.

(d) Security receipts are valued at NAV as declared by Securitisation Companies.

(e) The excess of acquisition cost over the face value of securities under "Held to Maturity" category is amortised over the remaining period to maturity.

3. ADVANCES:

3.1 In accordance with the prudential norms issued by RBI:

(a) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise;

(b) Provisions are made for loan losses, and

(c) General provision for standard advances is made.

3.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts held under sundries, and provision made for sacrifice of interest / diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

4. FIXED ASSETS AND DEPRECIATION:

(a) Fixed assets are accounted for at their historical cost except for Land and Building revalued in 2011 which are accounted at their revalued cost.

(b) Software is capitalised along with computer hardware and included under Other Fixed Assets.

(c) Depreciation on assets other than computers are provided on Straight Line Method after considering the useful life specified in Schedule II to the Companies Act, 2013 except for hand held communication devices which are depreciated in full considering the fast changing technology and obsolescence.

(d) Depreciation on computers and Software are provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(e) Depreciation for premises, in which land cost and construction cost could not be ascertained separately, is provided on the total cost.

5. EMPLOYEE BENEFITS:

(a) Annual contributions to the approved Employees' Gratuity Fund, Approved Pension Fund and Provision for Leave Encashment benefits are made on actuarial basis and net actuarial gain/loss are recognised as per Accounting Standard 15. Contribution made by the bank to Provident Fund and Contributory Pension Scheme are charged to Profit & Loss account.

(b) The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant of Employee Stock Options.

6. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability, after due consideration of the judicial pronouncements and legal opinion, with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income).

7. REVENUE RECOGNITION:

(a) Income is accounted for on accrual basis.

(b) Interest income on non-performing advances/investments are recognized on realization basis, owing to the significant uncertainty in collection thereof:

(c) Interest on tax refund from Income Tax Department is accounted based on assessment orders received.

(d) Dividend Income on Investments is accounted based on declaration basis.

8. SEGMENT REPORTING:

(a) The Bank recognises the Business Segment as the Primary Reporting Segment and Geographical Segment as the Secondary Reporting Segment, in accordance with the RBI guidelines and in compliance with the Accounting Standard 17.

(b) Business Segment is classified into (a) Treasury (b) Corporate and Wholesale Banking, (c) Retail Banking and (d) Other Banking Operations.

(c) Geographical Segment consists only of the Domestic Segment since the Bank does not have any foreign branches.

9. EARNING PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 "Earnings per share". Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

10. IMPAIRMENT OF ASSETS

The Bank assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Profit and Loss Account to the extent the carrying amount of assets exceeds their estimated recoverable amount.

11. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(a) As per the Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets", the Bank recognises provisions only when it has a present obligation as a result of a past event and it is probable that an outflow 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.

(b) Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realised.

12. NET PROFIT:

The net profit as per the Profit & Loss account is arrived at after necessary provisions towards: -

a) Taxation.

b) Advances and other assets.

c) Shortfall in the value of investments

d) Staff Retirement benefits.

e) Other usual and necessary provisions.

---

Mar 31, 2014

1. BASIS OF ACCOUNTING:

The financial statements have been prepared in accordance with the historical cost convention except where otherwise stated and conform to the statutory provisions and practices prevailing within the banking industry in India and the guidelines / instructions of Reserve Bank of India issued from time to time.

2. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities have been translated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Forward Exchange Contracts:

In accordance with the guidelines of FEDAI and the provisions of AS-11, outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract. The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

3. INVESTMENTS:

Investments are categorized under the heads ''Held to Maturity'', Available for Sale, and ''Held for Trading'' and are valued category wise, in accordance with the guidelines of the Reserve Bank of India.

(i) Brokerage / commission etc, paid in connection with the acquisition of investments is charged to revenue and not included in cost.

(ii) Broken period interest paid / received on debt instruments is treated as interest expended / income.

(iii) Security receipts are valued at NAV as declared by Securitisation Companies.

4. ADVANCES:

4.1 In accordance with the prudential norms issued by RBI:

(i) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise;

(ii) Provisions are made for loan losses, and

(iii) General provision for standard advances is made.

4.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts held under sundries, and provision made for sacrifice of interest/ diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

5. FIXED ASSETS AND DEPRECIATION:

(a) Fixed assets (Premises portfolio) have been accounted for at their revalued cost. Fixed assets other than premises portfolio have been accounted for at their historical cost.

(b) Depreciation on assets other than computers has been provided for on the diminishing balance method at the rates specified in Schedule XIV to the Companies Act, 1956.

(c) Depreciation on computers has been provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(d) In view of fast changing technology and obsolescence, iPad communication device is depreciated in full.

(e) Operating Software, which is an integral part of hardware, is capitalized and depreciation is provided for at the rate of 33.33% on straight-line method.

(f) For premises, in which land cost and construction cost could not be ascertained separately, depreciation is provided for on the total cost.

[24J

6. EMPLOYEE BENEFITS:

(a) Annual contributions to the approved Employees'' Gratuity Fund, Approved Pension Fund and Provision for Leave Encashment benefits have been made on actuarial basis. Contribution to Provident Fund is accounted for on actual basis.

(b) Consequent to reopening of pension option to Employees and enhancement in Gratuity limits, the additional liability have been amortised over a period of 5 years and 1/5th of the additional liability have been charged to the current year Profit & loss account vide RBI circular DBOD. No. BP.BC.15896/ 21.04.018/2010-11 dated 08.04.2011.

(c) The Employee Stock Option Scheme provides for grant of equity stock options to top executives of the bank that vest in a graded manner. The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant of such options. The excess of fair market price over the exercise price shall be accounted as employee compensation cost over the respective period of vesting. The fair market price is the latest closing price of the shares on the stock exchanges in which shares of the bank are largely traded immediately prior to the date of meeting of the compensation committee in which the options are granted.

7. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income) formulated by the Institute of Chartered Accountants of India.

8. REVENUE RECOGNITION:

(a) Income and expenditure are accounted for on accrual basis.

(b) The following items of income are recognized on realization basis, owing to the significant uncertainty in collection thereof:

(i) Interest on non-performing advances, including overdue bills.

(ii) Interest on non-performing investments.

(c) Interest on tax refund from Income Tax Department based on assessment orders received.

(d) Dividend Income on Investments on declaration basis.

9. NET PROFIT:

The net profit as per the Profit & Loss account is arrived at after necessary provisions towards: –

a) Taxation.

b) Advances and other assets.

c) Shortfall in the value of investments.

d) Staff Retirement benefits.

e) Other usual and necessary provisions.

10. ACCOUNTING STANDARDS:

Accounting Standards as specified in section 211(3C) of the Companies Act 1956, to the extent they are applicable to Banking Companies and as per directions issued by the RBI from time to time, have been followed.

11. SEGMENT INFORMATION:

The reportable business segments have been classified in accordance with the guidelines issued by Reserve Bank of India. The directly attributable income and assets are considered under respective segments and other income, expenses, other assets & liabilities are considered on appropriate basis.

12. EARNING PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 "Earnings per share" issued by the Institute of Chartered Accountants of India. Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the period. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

13. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

As per the Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets" issued by The Institute of Chartered Accountants of India, the Bank recognises provisions only when it has a present obligation as a result of a past event and it is probable that an outflow 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 recognized in the financial statements since this may result in the recognition of income that may never be realised.

---

Mar 31, 2013

1. BASIS OF ACCOUNTING:

The financial statements have been prepared in accordance with the historical cost convention except where otherwise stated and conform to the statutory provisions and practices prevailing within the banking industry in India and the guidelines / instructions of Reserve Bank of India issued from time to time.

2. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities have been translated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Forward Exchange Contracts:

In accordance with the guidelines of FEDAI and the provisions of AS-11, outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract. The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

3. INVESTMENTS:

Investments are categorized under the heads ''Held to Maturity'', Available for Sale, and ''Held for Trading'' and are valued category wise, in accordance with the guidelines of the Reserve Bank of India.

(i) Brokerage / commission etc, paid in connection with the acquisition of investments is charged to revenue and not included in cost.

(ii) Broken period interest paid / received on debt instruments is treated as interest expended / income.

4. ADVANCES:

4.1 In accordance with the prudential norms issued by RBI:

(i) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise;

(ii) Provisions are made for loan losses, and

(iii) General provision for standard advances is made.

4.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts held under sundries, and provision made for sacrifice of interest / diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

5. FIXED ASSETS AND DEPRECIATION:

(a) Fixed assets (Premises portfolio) have been accounted for at their revalued cost. Fixed assets other than premises portfolio have been accounted for at their historical cost.

(b) Depreciation on assets other than computers has been provided for on the diminishing balance method at the rates specified in Schedule XIV to the Companies Act, 1956.

(c) Depreciation on computers has been provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(d) In view of fast changing technology and obsolescence, iPad communication device is depreciated in full.

(e) Operating Software, which is an integral part of hardware, is capitalized and depreciation is provided for at the rate of 33.33% on straight-line method.

(f) For premises, in which land cost and construction cost could not be ascertained separately, depreciation is provided for on the total cost.

6. EMPLOYEE BENEFITS:

(a) Annual contributions to the approved Employees'' Gratuity Fund, Approved Pension Fund and Provision for Leave Encashment benefits have been made on actuarial basis. Contribution to Provident Fund is accounted for on actual basis.

(b) Consequent to reopening of pension option to Employees and enhancement in Gratuity limits, the additional liability have been amortised over a period of 5 years and 1/5th of the additional liability have been charged to the current year Profit & loss account vide RBI circular DBOD. No. BP.BC.15896/ 21.04.018/2010-11 dated 08.04.2011.

(c) The Employee Stock Option Scheme provides for grant of equity stock options to top executives of the bank that vest in a graded manner. The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant of such options. The excess of fair market price over the exercise price shall be accounted as employee compensation cost over the respective period of vesting. The fair market price is the latest closing price of the shares on the stock exchanges in which shares of the bank are largely traded immediately prior to the date of meeting of the compensation committee in which the options are granted.

7. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income) formulated by the Institute of Chartered Accountants of India.

8. REVENUE RECOGNITION:

(a) Income and expenditure are accounted for on accrual basis.

(b) The following items of income are recognized on realization basis, owing to the significant uncertainty in collection thereof:

(i) Interest on non-performing advances, including overdue bills and dividend income on investments.

(ii) Interest on non-performing investments.

(iii) Interest on tax refund from Income Tax Department based on assessment orders received.

9. NET PROFIT:

The net profit as per the Profit & Loss account is arrived at after necessary provisions towards: –

a) Taxation.

b) Advances and other assets.

c) Shortfall in the value of investments.

d) Staff Retirement benefits.

e) Other usual and necessary provisions.

10. ACCOUNTING STANDARDS:

Accounting Standards as specified in section 211(3C) of the Companies Act 1956, to the extent they are applicable to Banking Companies and as per directions issued by the RBI from time to time, have been followed.

11. SEGMENT INFORMATION:

The reportable business segments have been classified in accordance with the guidelines issued by Reserve Bank of India. The directly attributable income and assets are considered under respective segments and the other income, expenses, other assets & liabilities are considered on appropriate basis.

12. EARNING PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 "Earnings per share" issued by the Institute of Chartered Accountants of India. Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the period. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

13. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

As per the Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets" issued by The Institute of Chartered Accountants of India, the Bank recognises provisions only when it has a present obligation as a result of a past event and it is probable that an outflow 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 recognized in the financial statements since this may result in the recognition of income that may never be realised.

---

Mar 31, 2012

1. BASIS OF ACCOUNTING:

The financial statements have been prepared in accordance with the historical cost convention except where otherwise stated and conform to the statutory provisions and practices prevailing within the banking industry in India and the guidelines / instructions of Reserve Bank of India issued from time to time.

2. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities have been translated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Forward Exchange Contracts:

In accordance with the guidelines of FEDAI and the provisions of AS-11, outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract. The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

3. INVESTMENTS:

Investments are categorized under the heads 'Held to Maturity', Available for Sale, and 'Held for Trading' and are valued category wise, in accordance with the guidelines of the Reserve Bank of India.

(i) Brokerage / commission etc, paid in connection with the acquisition of investments is charged to revenue and included in cost.

(ii) Broken period interest paid / received on debt instruments is treated as interest expended / income.

4. ADVANCES:

4.1 In accordance with the prudential norms issued by RBI:

(i) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise;

(ii) Provisions are made for loan losses, and

(iii) General provision for standard advances is made.

4.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts held under sundries, and provision made for sacrifice of interest/ diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

5. FIXED ASSETS AND DEPRECIATION:

(a) Fixed assets (Premises portfolio) have been accounted for at their revalued cost. Fixed assets other than premises portfolio have been accounted for at their historical cost.

(b) Depreciation on assets other than computers has been provided for on the diminishing balance method at the rates specified in Schedule XIV to the Companies Act, 1956.

(c) Depreciation on computers has been provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(d) In view of fast changing technology and obsolescence, iPad communication device is depreciated in full.

(e) Operating Software, which is an integral part of hardware, is capitalized and depreciation is provided for at the rate of 33.33% on straight-line method.

(f) For premises, in which land cost and construction cost could not be ascertained separately, depreciation is provided for on the total cost.

6. EMPLOYEE BENEFITS:

(a) Annual contributions to the approved Employees' Gratuity Fund, Approved Pension Fund and Provision for Leave Encashment including Sick leave benefits have been made on actuarial basis. Contribution to Provident Fund is accounted for on actual basis.

(b) The effect of transitional liability till 31.03.2007 as required by Revised AS 15 has been recognized as an expense on straight line basis over a period of five years, up to 31.03.2012.

(c) Consequent to reopening of pension option to Employees and enhancement in Gratuity limits, the additional liability have been amortized over a period of 5 years and 1/5th of the additional liability have been charged to the current year Profit & loss account vide RBI circular DBOD. No. BP.BC.15896/ 21.04.018/2010-11 dated 08.04.2011.

(d) The Employee Stock Option Scheme provides for grant of equity stock options to top executives of the bank that vest in a graded manner. The Bank follows the intrinsic value method to account for its employee compensation costs arising from grant of such options. The excess of fair market price over the exercise price shall be accounted as employee compensation cost over the respective period of vesting. The fair market price is the latest closing price of the shares on the stock exchanges in which shares of the bank are largely traded immediately prior to the date of meeting of the compensation committee in which the options are granted.

7. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income) formulated by the Institute of Chartered Accountants of India

8. REVENUE RECOGNITION:

(a) Income and expenditure are accounted for on accrual basis.

(b) The following items of income are recognized on realization basis, owing to the significant uncertainty in collection thereof:

(i) Interest on non-performing advances, including overdue bills and dividend income on investments.

(ii) Interest on non-performing investments.

(iii) Interest on tax refund from Income Tax Department based on assessment orders received.

9. NET PROFIT:

The net profit as per the Profit & Loss account is arrived at after necessary provisions towards: -

a) Taxation.

b) Advances and other assets.

c) Shortfall in the value of investments

d) Staff Retirement benefits.

e) Other usual and necessary provisions.

10. ACCOUNTING STANDARDS:

Accounting Standards as specified in section 211(3C) of the Companies Act 1956, to the extent they are applicable to Banking Companies and as per directions issued by the RBI from time to time, have been followed.

11. SEGMENT INFORMATION:

The reportable business segments have been classified in accordance with the guidelines issued by Reserve Bank of India. The directly attributable income and assets are considered under respective segments and the other income, expenses, other assets & liabilities are considered on appropriate basis.

12. EARNING PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 "Earnings per share" issued by the Institute of Chartered Accountants of India. Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the period. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

13. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

As per the Accounting Standard 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 and it is probable that an outflow 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 recognized in the financial statements since this may result in the recognition of income that may never be realized.

---

Mar 31, 2011

1. BASIS OF ACCOUNTING:

The financial statements have been prepared in accordance with the historical cost convention except where otherwise stated and conform to the statutory provisions and practices prevailing within the banking industry in India and the guidelines / instructions of Reserve Bank of India issued from time to time.

2. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities have been translated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Forward Exchange Contracts:

In accordance with the guidelines of FEDAI and the provisions of AS-11, outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract. The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

3. INVESTMENTS

Investments are categorized under the heads ‘Held to Maturity', Available for Sale, and ‘Held For Trading' and are valued category wise, in accordance with the guidelines of the Reserve Bank of India.

4. ADVANCES

4.1 In accordance with the prudential norms issued by RBI:

(i) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise;

(ii) Provisions are made for loan losses, and

(iii) General provision for standard advances is made.

4.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts under sundries, and provision made for sacrifice of interest/diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

5. FIXED ASSETS AND DEPRECIATION :

(a) Fixed assets (Premises portfolio) have been revalued during the year and accounted at their revalued cost. Fixed Assets other than premises portfolio have been accounted for at their historical cost.

(b) Depreciation on assets other than computers has been provided for on the diminishing balance method at the rates specified in Schedule XIV to the Companies Act, 1956.

(c) Depreciation on computers has been provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(d) Operating Software, which is an integral part of hardware, is capitalized and depreciation is provided for at the rate of 33.33% on straight-line method.

(e) For premises, in which land cost and construction cost could not be ascertained separately, depreciation is provided for on the total cost.

6. EMPLOYEE BENEFITS:

(a) Annual contribution to the approved Employees' Gratuity Fund, approved Pension Fund and provision for Leave Encashment including Sick leave Benefits have been made on actuarial basis. Contribution to Provident Fund is accounted for on actual basis.

(b) The effect of transitional liability till 31.03.2007 as required by Revised AS 15 has been recognised as an expense on straight line basis over a period of five years.

(c) Consequent to reopening of pension option to Employees and enhancement in Gratuity limits, the additional liability have been amortised over a period of 5 years and 1/5th of the additional liability have been charged to the current year Profit & loss account vide RBI circular DBOD. No. BP.BC.15896/21.04.018/2010-11 dated 08.04.2011.

7. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income) formulated by the Institute of Chartered Accountants of India.

8. REVENUE RECOGNITION:

(a) Income and expenditure are accounted for on accrual basis.

(b) The following items of income are recognized on realization basis, owing to the significant uncertainty in collection thereof: (i) Interest on non-performing advances, including overdue bills and dividend income on investments.

(ii) Interest on non-performing investments.

(iii) Interest on tax refund from Income Tax Department based on Assessment/appeals concluded before the end of financial year.

9. NET PROFIT:

The net profit as per the Profit & Loss account is arrived at after necessary provisions towards: –

(a) Taxation.

(b) Advances and other assets.

(c) Shortfall in the value of investments

(d) Staff Retirement benefits including revision in wages, reopening of Pension option and enhancement in Gratuity ceiling.

(e) Other usual and necessary provisions.

10. ACCOUNTING STANDARDS

Accounting Standards as specified in section 211(3C) of the Companies Act 1956, to the extent they are applicable to Banking Companies and as per directions issued by the RBI from time to time, have been followed.

11. SEGMENT INFORMATION:

The reportable business segments have been classified in accordance with the guidelines issued by Reserve Bank of India. The directly attributable income and assets are considered under respective segments and the other income; expenses, other assets & liabilities are considered on appropriate basis.

12. EARNING PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 “Earnings per share” issued by the Institute of Chartered Accountants of India. Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the period. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

13. PROVISIONS, CONTINGENT LIABLITIES AND CONTINGENT ASSETS:

As per the Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets” issued by The Institute of Chartered Accountants of India, the Bank recognises provisions only when it has a present obligation as a result of a past event and it is probable that an outflow 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 recognized in the financial statements since this may result in the recognition of income that may never be realised.

---

Mar 31, 2010

1. BASIS OF ACCOUNTING:

The financial statements have been prepared in accordance with the historical cost convention except where otherwise stated and conform to the statutory provisions and practices prevailing within the banking industry in India and the guidelines / instructions of Reserve Bank of India issued from time to time.

2. TRANSACTIONS INVOLVING FOREIGN EXCHANGE:

(a) Foreign Currency Assets and Liabilities have been translated at the exchange rates prevailing at the close of the year as per the guidelines issued by FEDAI. The resultant profit or loss is accounted for.

(b) Income and Expenditure in foreign currency are translated at the exchange rates prevailing on the date of the respective transaction.

(c) Forward Exchange Contracts:

In accordance with the guidelines of FEDAI and the provisions of AS-11, outstanding forward exchange contracts in each currency are revalued at the Balance Sheet date at the corresponding forward rates for the residual maturity of the contract. The difference between revalued amount and the contracted amount is recognized as profit or loss, as the case may be.

(d) Contingent liabilities on guarantees, letters of credit, acceptances and endorsements are reported at the rates prevailing on the Balance Sheet date.

3. INVESTMENTS

Investments are categorized under the heads ‘Held to Maturity’, Available for Sale, and ‘Held For Trading’ and are valued category wise, in accordance with the guidelines of the Reserve Bank of India.

4. ADVANCES

4.1 In accordance with the prudential norms issued by RBI:

(i) Advances are classified into standard, sub-standard, doubtful and loss assets borrower-wise;

(ii) Provisions are made for loan losses, and

(iii) General provision for standard advances is made.

4.2 Advances disclosed are net of provisions made for non-performing assets, ECGC claims settled, part recovery towards NPA accounts receipts sundries, and provision made for sacrifice of interest/diminution in the value of restructured advances measured in present value terms as per RBI guidelines.

5. FIXED ASSETS AND DEPRECIATION :

(a) Fixed Assets have been accounted for at their historical cost.

(b) Depreciation on assets other than computers has been provided for on the diminishing balance method at the rates specified in Schedule XIV to the Companies Act, 1956.

(c) Depreciation on computers has been provided for on straight-line method at the rate of 33.33% as per the guidelines issued by the Reserve Bank of India.

(d) Operating Software, which is an integral part of hardware, is capitalized and depreciation is provided for at the rate of 33.33% on straight-line method.

(e) For premises, in which land cost and construction cost could not be ascertained separately, depreciation is provided for on the total cost.

(f) None of the fixed assets have been revalued during the year.

6. EMPLOYEE BENEFITS:

(a) Annual contribution to the approved Employees’ Gratuity Fund, approved Pension Fund and provision for Leave Encashment including Sick leave Benefits have been made on actuarial basis. Contribution to Provident Fund is accounted for on actual basis.

(b) The effect of transitional liability till 31.03.2007 as required by Revised AS 15 has been recognised as an expense on straight line basis over a period of five years.

7. PROVISION FOR TAXATION:

Provision for taxation is made on the basis of the estimated tax liability with adjustment for deferred tax in terms of the Accounting Standard 22 (Accounting for Taxes on Income) formulated by the Institute of Chartered Accountants of India.

8. REVENUE RECOGNITION:

(a) Income and expenditure are accounted for on accrual basis.

(b) The following items of income are recognized on realization basis, owing to the significant uncertainty in collection thereof:

(i) Interest on non-performing advances, including overdue bills and dividend income on investments.

(ii) Interest on non-performing investments.

(iii) Interest on tax refund received from Income Tax Department

9. NET PROFIT:

The net profit as per the Profit & Loss account is arrived at after necessary provisions towards: –

1. Taxation.

2. Advances and other assets.

3. Shortfall in the value of investments

4. Staff Retirement benefits including revision in wages.

5. Other usual and necessary provisions.

10. ACCOUNTING STANDARDS

Accounting Standards as specified in section 211(3C) of the Companies Act 1956, to the extent they are applicable to Banking Companies and as per directions issued by the RBI from time to time, have been followed.

11. SEGMENT INFORMATION:

The reportable business segments have been classified in accordance with the guidelines issued by Reserve Bank of India. The directly attributable income and assets are considered under respective segments and the other income; expenses, other assets & liabilities are considered on appropriate basis.

12. EARNING PER SHARE:

Basic and Diluted earnings per equity share are reported in accordance with the Accounting Standard 20 “Earnings per share” issued by the Institute of Chartered Accountants of India. Basic earnings per equity share are computed by dividing net profit by the weighted average number of equity shares outstanding for the period. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

13. PROVISIONS, CONTINGENT LIABLITIES AND CONTINGENT ASSETS:

As per the Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets” issued by The Institute of Chartered Accountants of India, the Bank recognises provisions only when it has a present obligation as a result of a past event and it is probable that an outflow 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 recognized in the financial statements since this may result in the recognition of income that may never be realised.