Accounting Policies of Punjab & Sind Bank Company

Mar 31, 2025

SIGNIFICANT ACCOUNTING POLICIES

A. Background

Punjab 4 Sind Sank (PSB orthe Bank) is a banking and financial services statutory body engaged in providing a wide range of products and services to individuals, commercial enterprises, large corporates, public bodies, and institutional customers. The Bank is governed by the Banking Regulation Act, 1949.

B. Basis of Prep a rat ro n

T he fina nci al state ments o! Punj ab & Sind Bank (the “ Ba nk^H) h ave be en prepared and presented u nder historica I cost convention, on accrual basis of accounting, ongoing concern basis, and conform in all material aspecfs, unless otherwise stated. The financial statements have been prepared in accordance with requirements prescribed under Third Schedule of Banking Regulation Act, 1949. They conform to Generally Accepted Accounting Pnnciples(GAAP) in India, statutory provisions, regulatory norms prescribed and circulars, directions and guidelines issued by Reserve Bank of India (RBI) from time to time, Banking Regulation Act, 1949. Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) to the extent relevant and applicable to Ihe Bank and prevailing practices in the Banking Industry in India.

C. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounlof assets and liabilities (in eluding contingent liabilities) as on date of the financial statements and the reported income and expenses for the reporting period. Management believes that the estimates wherever used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively from the period in which the results are known/materialized, unless otherwise stated.

D. Significant Accounting Policies

1. Revenue Recognition

1.1 Income (otherthan item referred in Paragraph 1.2) and expenditure have been accounted for on accrual basis unless otherwise staled.

1.2 In come by way of F ees. ail commiss ion (other than on Gove mment business an d commiss ion from sale of third pa rty products including Mutual funds), Commission on Guarantees and Letters of credits, Locker rent, Service charges on various Deposit Products, money transfer services, Dividend on shares, interest on overdue bills purchased and discounted, Processing fees, income from units of mutual fund products and income from ATM operations including AMC charges for cards are accounted for on receipt basis.

1.3 In terest on in come tax nefu nds is accou nted for i n the yea r in whic h ord er is received by the ba nk.

1.4 Appropriation of recoveries in NPAacoounts-

1.4.1 Income on Non-Perfomning Assets (IN PAs) comprising of advances and investments is recognized on realization basis i n a ccorda ncewiththeprudentialnormsprescribedby Reserve Bankoflndia.

1A2. Appropri ati on of R ecoveri es in NPA accounts (other tha n stated in pa ra 1.4.3) s hail be as un den

a. Towards Expenditure/Oul of Pocket Eixpenses/charges incurred by the bank tor Recovery

b. Thereafter towards the interest irregulartties/accrued interest

c. Principal iregularities i.e. NPA outstanding in the account

1.4.3 In case of Compromise, Resolution/Settlement through NCLT. Technically Written Off (TWO) & Credits received on a ccount of CGTMS£/ ECGCV G ECL/ CGM l^: U and subsidy if a ny. sh all be appropri ated in the orde r of Principal, Charges and interest

1.4.4 In case of suit filed/decreed accounts, recovery shall be appropriated as under:

a. As per the directives of the concerned Court

b. In the absence of specific directives from the Court in this regard, as mentioned at para 1.4.3 above shall prevail

1.5 Appropriation of Recoveries m Standard accounts: 1 he appropriation of recovery in Standard accounts is effected

as per the date of demands rai sed a nd rhe ea rli est demand is satisfie d in the fol lowi ng orde ra. Towards costs /charges t expenses paid or incurred by the bank

b. Thereafter towardsthe interes (/additional interest if any. due tothebank

c. Towards payment of Principal a mou nt

1.6 I nterest on overdue Term Deposits is provided at the rate of i nterest applicable to Savings Ba nk Accounts.

1.7 Bond Issue Expenses incurred in connection with raising Tier-ll Capital are treated as Deferred Revenue [Expenditure to be written off over a penod of five years.

1.6 Share Issue Expenses are adjusted against the Share Premium Account.

1. H Rebate on compromised accounts is accou nted tor at the ti me ol f u 11 and fina I adjustment of the account.

1.10 Amount recovered against bad debts written off are recognized as revenue in the year of recovery

2. Investments

Investments are accounted for in accordance with Ihe extant RBI guidelines on inveslment classification and valuation issued vide Master Circular Master Direction - Classification. Valuation and Operation of Investment Portfolio of Commercial Banks (Directions). 2023 dated September 23.2023.

2.1 Classification

in compliance with the RBI guidelines, the Investment portfolio has been classified into 3 categories (except investments in own subsidiaries, joint ventures and associates) namely -

2.1.1 Heid to Maturity (HTM) comprising of Investments that the Bank intends to hold till maturity i.e., the financial assets are held with an objective to collect the conlractual cash flows & the contractual terms of the security give rise to cash flows that are solely payments of principal and interest on principal outstanding (‘SPPl

Criterion¹) on specified dates.

2.1.2 Available for Sale (AFS): Securities that are acquired with an objective that is achieved by both collecting contractual cash flows and selling securities and the contractual terms of the security meet the ''SPPI criterion''* Provided th at on in i tia I reoog ni tion. Sank to make an i rrevocab le electron to classify a n equity in stru merit 1h at is not held with the objective of trading. AFS secunties shall inter-alia include debt securities held for asset liability management (ALM) purposes tha! meet the SPPI criterion where the bank’s intent is flexible with respect to holding to ma (unity or selling before matunty.

Notwithstanding the intent with which the following securities are acquired, they shall not meet the SPPf criteria and therefore shall not be eligible for classification either as HTMarAFS:

i) Instruments with compulsorily, optionally or contingently convertible features.

ii) instruments with contractual loss absorbency features such as those qualifying for Additional Tier 1 and Tier 2 under Basel III Capital Regulations.

iii) Instruments whose coupons are not in trie nature ot interest as defined in Clause 4(a) (xviii) of Reserve Bank of India (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) Directions, 2023.

iv) Preference shares and Equity shares.

2.1.3 Fair Value Through Profit & Loss (FVTPL) with Held for Trading (HFT) being maintained as separate investment subcategory within FVTPL -

Securities that do not qualify for inclusion in HIM or AFS shall be classified under FVTPL. These shall inter-alia include:

i) Equity shares, other than (a) equity shares of subsidiaries, associates or joint ventures and (b) equity shares where, at i niti al recog niti on, the irrevoca ble option to classify at Af $ h as been exe noised.

ii) Investments in Mutual Funds, Alternative Investment Funds, Real Estate Investment Trusts, Infrastructure Investment Trusts, etc.

iii) Investment in securitization notes which represent (he equity Iranche of a securitization transaction. I n vestments in sen lor a nd other suborti i nate tranches sha 11 need to be revi ewed for their comp I iance with SPPI criterion.

iv) Bonds, debentures, etc. where the payment is linked to the movement in a particular index such as an equity index rather than an interest rate bench mark.

2.1.3.1 HFT (Held for Trading): A separate sub-category called HFT within FVTPL has been created. The secunties which com plies with the following requirements are classified under HFT.

a) Any instrument held by the bank for one or more of the following purposes shall, when it is first

recognized on its hooks, be designated as a HFT instrument

t) short-term resale

it) profiting from short-term price movements

lit) focking in arbitrage profits; or

iv) hedg i ng risks that ari se from i nstruments meeti ng (i), (ii) or (rrtj above

b) the following instruments shall not be included in HFT category

i) unlisted equities and equity inveslments in sobsidianes, associates and joint ventures

ii) I nstruments de sig na ied for securitization warehousi ng.

iii) D irect holding of rea I estate and denvatives on d irect holdings of real esta te.

iv) eq uity i nvestments in a fund, u nless the ba nk meets at I ea st one of the tol I owi ng oond itions:

¦ Bank is able to look through the fund to its individual components and there is sufficient and frequent

i nf ormation. verified by a n indepen dent third party, pro vi ded to tb e ban k neg arding the fund s composition

* Bank obtains daily price quotes for the lund and it has access to the information contained in the fund’s mandate or in the national regulations governing such investment funds

v) derivative instrumentsand funds that have instrument types specified from (i ) to (iv) above as underlying assets; or

vi) instruments held for the purpose of hedging a particular risk of a position tn the types ot instruments specified from (i)to (v) above.

2.1.4 Transfer between categories: An investment is classified underfbe above categories at the time of its purchase. Ban k sha 11 n ot reclassify i nvestments between categories (viz. H TM, AF S and FV T PL) without the approval of th eir Board of Directors. Further, reclassification shall also require the prior approval of the Department of Supervision (DoS), RBI.

T he reel assification i f do ne (as per approval from a bove poi nt) to be appl i ed prospectively from reda ssiftca tion date.

In case of reclassification of investments from one category to another category, the accounting treatment shall be as per instructions contained in Reserve Bank of India (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks} Directions, 2023.

2,1*5 For disclosure in the Balance sheet, the aforesaid Investments are classified as Investments in India and Outside India.

Investments in India are further categorized as under:

I. Government Sec unties

ii. Other approved securities

iii. Shares

iv. Debentures & Bonds

v. Subsidiaries and (or Joint Ventures

vi. Others (fo be specified)

Investments Outside India are further categorized as under

I. Government Securities (including focal authorities)

i i. S ub e id i a lies, ass oc iates an d Joi nt Ventures

iii, Other investments

22 Accounting of Investments

22 . i The transactions in all the securities are recorded on Settlement Date i.e the recognition of an asset on the day it is received by the entity, and de-recognition of an asset and recognition of any gain or loss on disposal, on th e d ay it is delivered by the entity.

222 Cost of acquisition The cost is determined on weighted average cost method. Brokerage I commission received on subscription is reduced from the cost. Brokerage, commission, Securities Transaction Tax (STT Jetc. paid in connection with acquisition of investments are expensed upfront and excluded from cost. Interest accrued up to th e date of acqui sition / sa I e of seen lilies i. e. broken period in terest on debt i ns Eruments is exclud ed from the acqu isiti on cost / sa le con sid eration and is treated as interest expense i i ncome.

2.3 Valuation:

2.3,1 Initial recognition: All investments shall be measured affair value on initial recognition Unless facts and d rcum stan ces suggest th at the fa ir va I ue is maleria 11 y differe nt from the acquisiti on cost, it shal I be pres umed that the acquisition cost is the fair value.

Situations where the presumption to be tested inetude where.

(a) The transaction is between related parties.

(b) The transaction is taking place under duress where one party is forced to accept the price in the transaction.

(c} The transaction is done outside the pri nci pa I market for th at cl ass of securities.

(d) Other situations, where in the opinion of the supervisor, iacts and circumstances warrant testing of the presumption

1. In respect of government secu rities acqu i red th rough a uction (including devol vement}. switch operations and open market operations (O MO) con ducted by the RSI, the price at which the security is allotted shall be th e fa i r value for in itra I recogn rtion purposes.

2. Where the securities are quoted or the fair value can be determined based or market observable inputs (such as yield curve, credit spread, etc.) any Day 1 gainf loss shall be recognized sn the Profit and Loss Account, under Schedule 14: ‘Other income''within the subhead Profit on revaluation of investments'' or ''Losson revaluation of investments'', as the case may be.

3. Any Day 1 loss arising from Level 3 investments shall be recognized immediately.

4. Any Day 1 gains an sing from Level 3 investments shall be deferred.

In thecase of debt instruments, the Day 1 gain shall be amortized on a straight-line basis up to the matu rtty date (or earliest ca 11 date for perpetual instruments), wh N e for u nq uoted equity i nstru ments. the ga i n sha 11 be set aside a s a liabi I ity u nti I the security is I i sted or derecog nized.

2.3:2 Subsequent Measure merit

2.3.2.1 HTM

Secu nti es held in H T M sha 11 be cam ed at cost and sha 11 not be marked to mark et f M T M) after in itra I recog niti on. any

discount or premium on the securities under HTM shall be amortized over the remaining life of the instrument.

The amortized amount shall be reflected in the financial statements under item II ''Income on Investments''at

Sch ed ule 13: ''interest Earned''with a contra in Sch ed ule 8:'' I nvestments

2 3.2.2AFS

a) The secu rities hefd i n AF S sha 11 be fair va I ued at lea st on a quarterly basis. if not more frequently. Any di scount or premium on the acquisition of debt securities under AFS shall be amortised over the remaining life of the instrument The amortised amount shall be reflected in the financial statements under item II ''Income on I nveslments¹ of Sched ule “I3: ''1 nterest F arned'' with a contra in Sched ule 8: ''Investments

b) T he va I uation ga ins a nd losses across all pe rform i ng in vestme n!s, i respective of classifies tion (i e., G overnment securities, otfier approved securities. Bonds and Debentures, etc.), held under AFS shall be aggregated. Net appreciation or depreciation! t shall be directly credited or debited to a reserve named AFS Reserve without routing through the Profits Loss Account

c) The unrealised gains transferred to AFS-Reserve shall not be available for any distribution such as dividend and coupon on Additional Tier 1.

d) Upon sale or maturity of a debt instrument in AF S category, the accumulated gain/ loss forthat security in the AFS-Reserve shall be transferred from the AFS Reserve and recognized in the Profit and Loss Account under item II Profit on safe of investments under Schedule T4-Other Income.

e) In the case of equity instruments designated under AFS at the time of initial recognition, any gain or loss on sale of such investments sha 11 not be fransferredfrom AFS-Reservetothe Profit and Loss Account. Instead, such gain or loss shall be transferred from AFS-Reserve to the Capital Reserve.

2.3.2.3 FVTPL

a) The securities held in FVTPL sha 11 be fair valued and the net gain or loss arising on such valuation sha II be directly credited ordebitedtothe Profit and Loss Account Securities that are classified undertheHFT sub-category within FVTPL shall be fair valued on a daily basis, whereas other securities in FVTPL shall be lair valued at feast on a quarterly if not on a more frequent basis.

b) Any d i scount or p remiu m on Ihe acq uis ition of d ebt sec uritie s under FVTPL sha 11 be a morti sed over the rema i nmg life of the instru men l. T he a mortised a mou nt sha 11 be reflected in the financial statements under item 11 ''In come on I nvestm ents¹ of S ch ed ule 13: ''J nterest Famed¹ with a contra in Schedule 8: ''Investments''

2.3.3 Safe of investments from HTM

a) Any sales from HTM shall be as per a Board approved policy. Any p rofit or loss on the sa le of i nvestments i n H T M shall be recognized in the Profit and Loss Account under Item II of Schedule 14:''0ther Income''. The profit on safe of an investment in HTM shall be appropriated below the line from the Profit and Loss Account to the ''Capital Reserve Accou nfi. T he a mou nt so a pp ropria ted sha II be net of taxes and the amount requ i red to be transferred to Sta tutoryReserve.

2.3.4 Fair Value of Investments

The ''market price / fair value'' for the purpose of valuation of investments intruded in the ''Available for Sale'' and FVTPL (Including HFT) & HiM categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, price list of RBI, prices declared by Primary Dealers Association of India (PD At) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

In respect of unquoted securities, the ''market price / fair value" is ascertained as under.
a.	Government Securities:: i. Central Government securities ii. State Government securities.	At market pnces/YTM as published by Fixed Income Money Market and Derivatives Association of India (FIMMDA) $ Financial Benchmark India Pvt. Ltd (FBSL). At rates put out by FiMMDA/PDAI/FBiL
b.	Securities guaranteed by Central / State Government, PSU Bonds (not in the nature of advances)	On appropriate yield to maturity basis as per FIMMDA/ RBI guidelines
c.	Equity Shares; L Listed ii. Unlisted	i Listed equity shares are valued using lower of rates from NSE & BSE, ii. At Break-up Value (without considering revaluation reserve) based on the latest Balance Sheet, which are not older than one year on the date of valuation is considered In cases where latest Balance Sheets are not available, the shares are valued at Re.1 per company.
d.	preference shares	(a) When a preference share has been traded on exchange within 15 days prior to the valuation date, the value shall not be higher than the price at which the share was traded. (b) The valuation of unquoted preference shares shall be done on YTM basis with appropriate mark-up over the YTM rates for Central Government Securities of equivalent maturity put out by the FBIL subject to such preference share not being

valued above its redemption value. The mark-up shall be graded according to the ratings assigned to the preference shares by the rating agencies and shad be subject to the foil owing: (i) The mark-up cannot be negative i.e., the YTM rate shall not be lower than the coupon rate/ YTM for a Central Government India security of equivalent maturity. (ii) The rate used for the YTM for unrated preference shares shall not be legs than the rale applicable to rated preference shares of equivalent maturity and shall appropriately reflect the credit risk borne by the bank. (iii) Where the investment in preference shares is made as part of a resolution, the mark-up shall not be lower than 1.5 percentage points. (c) Where preference dividends/coupons are in arrears, no credit should be taken for accrued dividends/coupons and the value determined as above on YTM basis should be discounted further by at least 15 per cent if arrears are for one year^S per cent if arrears are for two years, so on and so forth (i.e., with 10 percent increments), The overarching principle should be that valuation shall be based on conservative assessment of cash flows with appropriate discount rates to reflect the risk. Statutory Auditors should also specifically examine as to whether the valuations adequately reflect the risk associated with such instruments. The depreciation / provision requirement arrived at in respect of non-performing shares

		where dividends are in arrears shai! rot be allowed to be sol-off against appreciation on other performing preference shares
e.	Bonds and debentures (riot in the nature of advances)	On appropriate yield to maturity basis as per RB1/F1MMDA guidelines.
f.	Mutual Fund Units, Venture Capital Funds and Security Receipt	At re-purchase price or Net Assets Value.
g-	Treasury Bills, Cash Management Bill, Commercial Papers, Certificate of Deposits, Recapitalization Bonds,. Subsidiaries, Joint Ventures and Sponsored Institutions:	At carrying cost.
h.	Other Investments	At carrying cost less diminution in value.

2.4 Non-Performing Investments (NPt)

Investments are subject to provisioning / de-recognition ol income, as per prudential norms of Reserve Bank of India for NPt classification. The depredation/provision in respect of non-performing securities is not set off against the appreciation in respect of the other performing securities

If any credit facility availed by an entity is NPAin the books of the Bank, investments any of the securities issued by the same entity would also be treated as NPl and vice versa. However, in respect of NPl preference share where the dividend is not paid, the corresponding credit facility is nol treated as NPA.

2.5 Investment Fluctuation Reserve

Sank shall create an Investment Fluctuation Reserve (IFR) until the amount of IFR is at least two per cent of the AFS and FVTPL(induding HF T) portfolio, on a continuing basis, by transferring to the IF R an amount not less than the lower of the following:

i. Net profit on saie of investments during the year.

ii. N et profit for the year, I ess man datory a pprop riations.

3 Loans/Advances and Provisions thereon:

3.1. Loans and Advances are classified as “Performing” and “Non-Performing" assets based on guidelines issued by RBI. The provisions on such advances are made in accordance with prudential norms prescribed by the Reserve Banket India.

3.2 All Advances are classified into Standard, Sub-Standard, Doubtfui and Loss assets, borrower wise.

3.3 Provisions for NPA are made as per the extant guidelines prescnbed by RBf, subject to minimum provisions as per RBI Directions as prescnbed below:

Category of Assets	Provision norms
Sub-Standard	i. A general provision of 15% on [he total outstanding. ii, Additional provision of 10% tor exposures which are unsecured ab-initio (i.e. where realizable value of security is not more than 10% ab-initio). ML Unsecured exposure in respect of infrastructure advances where certain safeguards such as escrow accounts are avaiiable-20%.
Doubtful Assets
Secured Portion	i. Upto one year : 25% ii, One to Ihree years : 40% iil.More than three years . 100%
Unsecured Portion	100%
Loss Assets	100%

3.4 Adva nces a re stated n et of specific I oa n loss provisi ons {in case of N PA), provision for di mi nufion in fair val Lie of restrucluned advances, unrealized interest.

3.5 I n a dd ition to the s pecific provisi on on NPAs, gen erat provisions are aiso mad e for stan da rd assets a s per extant RBI Guidelines. These provisions are included under Schedule b of the Balance Sheet under the head "Other Liabilities and Provisions" and are not considered for arriving at the Net NPAs.

3.6 For restructured/rescheduled advances, provisions are made in accordance with the guidelines issued by RBL

3.7 The sale of NPA is accounted for as per guidelines prescribed byRBi, asunder

i) . When the Bank sells its financial assets to Securitization Company (SC) I Reconstruction Company (RC), the same is removed from the books.

ii) . If the sale is at a price below the net book value (NBV) (i.e. book value less provisions held), the shortfall is debited to the Profits Loss account of the year of sale

di). 11 the sale is for a value higher than the NBV, the excess provision is reversed in the year the amounts are received.

4. Floating Pro visions

En accordance with the RBI guidelines, the Bank has an approved policy for creation and utilization of floating provisions separately for advances and investments. The quantum of floating provisions to be created is assessed, at the end of each financial year, l he floating provisions would be utilized only for contingencies under extra ondin ary circu msta nces specified i n the policy with prior permission of Rese rve Ba nk of India.

5. Fixed Assets

5.1 Premises and other Fixed Assets are stated at historical cost {except revalued premises which are stated at revalued amount) net olf accumulated depredation/ amortization and impairment losses, if any. The appreciation on revaluation is credited to Ftevaluation Reserve and the incremental depreciation attributable to the revalued amount is debited to the Profit & Loss account and the equal amount is transferred from Revaluation Reserve to Revenue Si Other Reserve.

Cost of fixed assets include cost of purchase and all expenditure such as site preparation, installation costs and professional fees incurred on the asset till the lime of capitalization ) put to use. Subsequent expenditurefs maimed on the assets put to use is capitalized only when it increases the tutu re benefits from such assets or their functioning capability.

5.2 Where segregation of cost between land and superstructure cannot be ascertained, depreciation is provided on the composite cost at the rate applicable to superstructure.

5.3 Land included under Premises fa ken on perpetual lease is considered as freehold and not depreciated.

5.4 The bank revalues immovable properties once in every three years. Properties acquired dunng last three years are not re va I ued. Valuati on of the re val ued assets is done e very fi ree yea rs there after.

6 Depreciation on Fixed Assets and Amortization

5.1 Depreciation on Fixed Assets (other than Computers) is charged on straight line method basis as per useful life of assets, considering residual value at 5% of original cost. The useful life and depreciation rate are given hereunder

5. No.	Particulars	Useful Irfe	Depreciation Rate
1	Premises	GO	1,58%
2	Furniture and fixtures	10	9.50%
3	Pi ant & Machinery	15	6 33%
4	Vehicles	0	11 .88%

6.2 Computers are fully depreciated at 33.33%, on straight-ifne method as per RSI guidelines

6.3 Revalued premises are depreciated over the balance useful life of such premises.

6.4 Additions during the year are depreciated for the full year irrespective of its date of addition.

6.5 No depreciation is provided on assets sold/disposed of dunng the year.

6.6 In respect of leasehold premises, the lease premium, if any, is amortized over the period of the lease

7. Employment Benefits

7.1 Longterm Employee Bene fits:

7.1*1, Defined Contribution Plan:

Provident Fund and Mew Pension Scheme {which is applicable to employees who have joined Bank on or after 01.04.2010) are defined contribution schemes, as the Bank pays fixed contribution at predetermined rates. The obligation of the bank is limited to such fixed contribution. The conbibuttons are charged to the Profit and Loss Account.

7.1.2 Defin ed Benefit P Ians:

Gratuity, Pension and Leave Encashment liabilities are defined benefit obligations and are provided lor on the basis of a ctu aria I valu ati on ma de at. the end of th e fin an cia I yea r as per AS 15 "E mpioyee Benefits'' i ssued by IC Al. These schemes are funded by the Bank and are managed by separate trusts. The short/excess of the liability as compared to the lund held by the respective trust is accounted tor as liability / assets as at the at the end of the financial year.

Ofherlong term Employee benefits such as Silver Jubilee, Bonus and Retirement Gifts are provided for based on actuarial valuation.

7.2 Short Term employment benefits

Short term employee benefits {eg medical benefits) are recognized as an expense in the Profit and Loss account of the year in which the related services are rendered.

8 Foreign Exchange Transactions

8.1. Monetary assets and liabilities, guarantees, acceptances, endorsements and other obligations are translated in Indian Rupee equivalent at the exchange rates prevailing as on the Balance Sheet date as per Foreign Exchange Dealers’Association of India (FED AJ) guidelines.

8.2. Non-monel ary items other than fixed assets which are carried at historical cost are translated at exchange rate prevailingonfhedateoftransaction.

8.3. F orward exchange contra cfcs and bil I s a re tra nsl ated at the exchange rates prevai li ng on the date of commi Iment. Outstanding foreign exchange contracts and bi Its are translated as on the Balance Sheet dale at the rates notified by FEDAJ and the resultant gain /loss is taken to revenue.

8.4. Income and expenditure items are recorded at exchange rates prevailing on the dale of the transaction.

Excba ng e differences ari si ng on the settl ement of monela ry ite ms at rates diffene nt from those at which they were initially recorded a re recogn ized a s i ncome or as expen se i n the period i n which they ari se.

Gains/Losses on account of changes in exchange rates of open position in currency futures trades are settled with the excha nge cl ea ri ng house on daily basis and such gain si losses a re recognized in the Profit a nd Loss Account.

6.5 Conti ngent lia bilities o n accou nt of acceptan ces. end orse ments a nd othe r obligati on s i nd udin g gua ra ntees and

letter of credits in foreign currencies are reported at the Balance Sheet date using the FEDAI closing spot rates, except th e Bills for Collection wh i ch a re accoun ted for at th e noti onal rates a t the ti me of lod gment.

9. Taxes on Income

Income tax expense is the aggregate amount of current tax, including Minimum Alternate Tax (MAT''}, wherever applicable and Deferred tax. The current lax anddeffered lax are determined in accordance with the provisions of lncometaxactl961 and AS 2 2 Accounting for Taxes on Income issued by 1C Al.

Cu rrent tax is determi ned a s the amou nt of tax payable for the year and accord i ngly provisi on for tax is made.

Deterred Tax Assets and Liabilities arising on account ot timing differences and which are capable of reversal in subsequent periods are recognized using the tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only if there is virtual certainty of realization of such assets in future.

MAT credit, wherever applicable, is recognized as an asset only when and to the extent there is convincing evidence thal there will be payment of normal income tax during the period specified under Ehe Income TaxAct, 196V

10. Impairment of Assets

Impairment losses if any. or the assets are recognized in accordance with AS 26 on Impairment of Assets issued by ICAJ and charged to Profiland Loss account. The carrying costs ofassets are reviewed at each Balance Sheet date. Jf there is any indication ot impairment based on internal/extemai factors an impairment loss is recognized wherever the carrying cost ot an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. ]n assessing value in use_r the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

After impairment, if any. depreciation is provided on the revised canying cost of the asset over its remaining useful life. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not in creased beyond the canying value that would have prevailed by charging usual depreciation if there was no impairment

11 SEGMENT REPORTING

The Bank recognizes the business segment as the primary reporting segment, in accordance with the RBI g uidel i nes and i n complian ce with th e Accoun ting Sta ndard 1 / i ssued by ICAI. As Ban k ha s no ove rseas branch I operation, there is no geographical segment.

12. PROVISIONS, CONT1NGENT UABILITIES AND CONHNGENT ASSETS

In conformity with Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets''" issued by the ICAJ. the Bank recognizes provisions only when il has a present obligation as a result of a past event, 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 liability is disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.

Further, the cases which although have been filed against the bank but possibility of any obligation arising upon the bank in those case is remote, have not been construed and included in Contingent liability. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized

13. LEASES

Lease payments including cost escalations for assets taken on operating [ease are recognized in the Profit and Loss Account over the tease term con sidering the concept of materiality.

14. EARNINGS PER SHARE

The Bank reports basic and diluted eamings per equity share in accordance with the Accounting Standard 20 "tamings Per Share" issued by the LCAI. Sasic eamings per equity share is arrived at by dividing net profit after la* with the weighted average number of equity shares outstanding for the period. Diluted eamings per equity share has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period

---

Mar 31, 2024

SIGNIFICANT ACCOUNTING POLICIESA. Background

Punjab & Sind Bank (PSB or the Bank) is a banking and financial services statutory body engaged in providing a wide range of products and services to individuals, commercial enterprises, large corporates, public bodies, and institutional customers. The Bank is governed by the Banking Regulation Act, 1949.

B. Basis of Preparation

The financial statements of Punjab & Sind Bank (the "Bank") have been prepared and presented under historical cost convention, on accrual basis of accounting, on going concern basis, and conform in all material aspects, unless otherwise stated, to Generally Accepted Accounting Principles (GAAP) in India, statutory provisions, regulatory norms prescribed and circulars, directions and guidelines issued by Reserve Bank of India (RBI) from time to time, Banking Regulation Act, 1949, Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) to the extent relevant and applicable to the Bank and prevailing practices in the Banking Industry in India.

C. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities (including contingent liabilities) as on date of the financial statements and the reported income and expenses for the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to the estimates or difference between the actual result and estimates is recognized in the period in which the results are known / materialized, unless otherwise stated.

D. Significant Accounting Policies1. Revenue Recognition

1.1 Income and expenditure are accounted for on accrual basis unless otherwise stated.

1.2 Income on Non-Performing Assets (NPAs) comprising of advances and investments is recognized on realization basis in accordance with the prudential norms prescribed by Reserve Bank of India.

1.3 Partial recovery in non-performing assets (other than stated in para 1.4) is appropriated first towards principal and thereafter towards interest and charges.

1.4 For cases covered under special schemes introduced by RBI viz. Scheme for Sustainable Structuring of Stressed Assets (S4A), Strategic Debt Restructuring, Flexible Structuring of Long-Term Project Loans (5/25), Change in Ownership of Borrowing Entities (Outside Strategic Debt Restructuring Scheme), where subsequently the account turns NPA, any recovery shall be first credited to Interest on Loans & Advances. Thereafter, the recovery shall be appropriated towards principal amount outstanding in the account. The accounting procedure shall be uniform and consistent in all accounts falling under above schemes.

1.5 Income on guarantees and letters of credit issued, locker rent, income from merchant banking transactions, money transfer services, dividend on shares, interest on refund of income tax, commission on credit card, interest on overdue bills, processing fee, Government business including distribution of pension and income from units of mutual fund products and income from ATM operations are accounted for on receipt basis.

1.6 Rebate on compromised accounts is accounted for at the time of full and final adjustment of the account.

1.7 Interest on overdue Term Deposits is provided at the rate of interest applicable to Savings Bank Accounts.

1.8 Bond Issue Expenses incurred in connection with raising Tier-II Capital are treated as Deferred Revenue Expenditure to be written off over a period of five years.

1.9 Share Issue Expenses are adjusted against the Share Premium Account

2. Investments

Investments are accounted for in accordance with the extant RBI guidelines on investment classification and valuation.

2.1 Classification:

The entire investment portfolio is classified into three categories, viz, "Held to Maturity (HTM)", "Held for Trading (HFT)" and "Available for Sale (AFS)" in line with the guidelines / directions of Reserve Bank of India.

For disclosure in the Balance sheet, the investments under the above classifications are classified as Investments in India and Outside India.

Investments in India are further categorized as under:

i. Government Securities

ii. Other approved securities

iii. Shares

iv. Debentures

v. Subsidiaries / Joint Ventures and

vi. Others

Investments Outside India are further categorized as under:

i. Government Securities

ii. Subsidiaries / Joint Ventures and

iii. Others

2.2 Basis of Classification:

i. Investments that the Bank intends to hold till maturity are classified as Held to Maturity.

ii. Investments that are held principally for resale within 90 Days from the date of purchase are classified as Held for Trading.

iii. Investments which are not classified in the above two categories, are classified as Available for Sale.

An investment is classified under the above categories at the time of its purchase. Shifting of investments from one category to another is done in conformity with the approval of the Board normally once in a year. Transfer of securities from one category to another is carried out at the lower of acquisition cost/ book value/ market value on the date of transfer. However, transfer of securities from HTM category to AFS category is carried out on book value. After transfer, these securities are immediately revalued and resultant depreciation, if any, is provided.

2.3 Recording / Accounting of Investments:

The transactions in all the securities / investments are recorded on Settlement Date. Settlement Date accounting refers to (a) the recognition of an asset on the day it is received by the entity, and (b) the de-recognition of an asset and recognition of any gain or loss on disposal on the day it is delivered by the entity.

The cost is determined on weighted average cost method

Brokerage / commission received on subscription is reduced from the cost. Brokerage, commission, Securities Transaction Tax (STT) etc. paid in connection with acquisition of investments are expensed upfront and excluded from cost.

Interest accrued up to the date of acquisition / sale of securities i.e. broken period interest on debt instruments is excluded from the acquisition cost / sale consideration and is treated as interest expense / income.

2.4 Valuation:

Investments under ''Held to Maturity'' (HTM) are stated at acquisition costs. The premium paid on acquisition if any, is amortized over the remaining period of maturity on a constant yield basis. Such amortization of premium is reflected in Interest Earned under the head "Income on Investments" as a deduction. In case, the acquisition cost is less than the redemption value, the difference being the unrealized gain, is ignored. Any diminution in value of investments in subsidiaries and joint venture, other than temporary in nature, is provided for each investment individually.

Investments under ''Available for sale'' (AFS) and ''Held for Trading'' (HFT) are individually revalued at market price or fair value determined as per the regulatory guidelines and the net depreciation if any, of each group/category is provided for and the net appreciation is ignored.

The ''market price / fair value'' for the purpose of valuation of investments included in the ''Available for Sale'' and ''Held for Trading'' categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, price list of RBI, prices declared by Primary Dealers Association of India (PDAI) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

In respect of unquoted securities, the ''market price / fair value'' is ascertained as under:

a.	Government Securities: i. Central Government securities	At market prices/YTM as published by Fixed Income Money Market and Derivatives Association of India (FIMMDA) & Financial Benchmark India Pvt. Ltd (FBIL). At rates put out by FIMMDA/PDAI/FBIL
	ii. State Government securities.	On appropriate yield to maturity basis as per FIMMDA/ RBI guidelines.
b.	Securities guaranteed by Central / State Government, PSU Bonds (not in the nature of advances)	On appropriate yield to maturity basis as per FIMMDA/ RBI guidelines
c.	Equity Shares:	At Break-up Value (without considering revaluation reserve) based on the latest Balance Sheet, which are not older than one year on the date of valuation is considered. In cases where latest Balance Sheets are not available, the shares are valued at Re.1 per company.
d.	Preference shares	On appropriate yield to maturity basis not exceeding redemption value as per RBI/ FIMMDA guidelines.
e.	Bonds and debentures (not in the nature of advances)	On appropriate yield to maturity basis as per RBI/FIMMDA guidelines.
f.	Mutual Fund Units, Venture Capital Funds and Security Receipt	At re-purchase price or Net Assets Value
g.	Treasury Bills, Cash Management Bill, Commercial Papers, Certificate of Deposits, Recapitalization Bonds, Subsidiaries, Joint Ventures and Sponsored Institutions	At carrying cost.
h.	Other Investments	At carrying cost less diminution in value.

2.5 Profit or loss on sale of investments in any category is taken to Profit and Loss account but, in case of profit on sale of investments in "Held to Maturity" category, an equivalent amount is appropriated to "Capital Reserve Account".

2.6 Non-Performing Investments (NPI)

Investments are subject to appropriate provisioning / de-recognition of income, in line with the prudential norms of Reserve Bank of India for NPI classification. The depreciation/provision in respect of non-performing securities is not set off against the appreciation in respect of the other performing securities.

If any credit facility availed by an entity is NPA in the books of the Bank, investment in any of the securities issued by the same entity would also be treated as NPI and vice versa. However, in respect of NPI preference share where the dividend is not paid, the corresponding credit facility is not treated as NPA.

2.7 In the event, depreciation booked on account of MTM in the ''AFS'' or ''HFT'' categories are found to be in excess of the required amount in any year, the excess is credited to the Profit & Loss Account and an equivalent amount is appropriated to an Investment Reserve Account in Schedule 2 - "Reserve & Surplus" under the head "Revenue and Other Reserves".

3. Loans / Advances and Provisions thereon:

3.1 Advances are classified as "Performing" and "Non-Performing" assets and provisions are made in accordance with prudential norms prescribed by the Reserve Bank of India.

3.2 Advances are classified into Standard, Sub-Standard, Doubtful and Loss assets, borrower wise.

Category of Assets	Provision norms
Sub-Standard	i. A general provision of 15% on the total outstanding. ii. Additional provision of 10% for exposures which are unsecured ab-initio (i.e. where realizable value of security is not more than 10% ab-initio) iii. Unsecured exposure in respect of infrastructure advances where certain safeguards such as escrow accounts are available-20%
Doubtful Assets
- Secured Portion	i. Upto one year : 25% ii. One to three years : 40% iii. More than three years : 100%
- Unsecured Portion	100%
Loss Assets	100%

3.3 Provisions for NPA are made as per the extant guidelines prescribed by RBI / the regulatory authorities, subject to minimum provisions as per RBI Directions as prescribed below:

3.4 Advances are stated net of unrealized interest and provisions / technical write off made in respect of non-performing advances. Claims received from DICGC / CGTMSE / ECGC are not reduced from such advances till adjusted / technically written-off whereas part recovery in all NPA accounts is reduced from advances.

3.5 In addition to the specific provision on NPAs, general provisions are also made for standard assets as per extant RBI Guidelines. These provisions are included under "Other Liabilities and Provisions" and are not considered for arriving at the Net NPAs.

3.6 For restructured / rescheduled advances, provisions are made in accordance with the guidelines issued by RBI.

3.7 The sale of NPA is accounted for as per guidelines prescribed by RBI, as under:

i) When the Bank sells its financial assets to Securitization Company (SC) / Reconstruction Company (RC), the same is removed from the books.

ii) If the sale is at a price below the net book value (NBV) (i.e. book value less provisions held), the shortfall is debited to the Profit & Loss account of the year of sale.

iii) If the sale is for a value higher than the NBV, the excess provision is reversed in the year the amounts are received.

4. Floating Provisions

In accordance with the RBI guidelines, the Bank has a approved policy for creation and utilization of floating provisions separately for advances and investments. The quantum of floating provisions to be created is assessed, at the end of each financial year. The floating provisions would be utilized only for contingencies under extra ordinary circumstances specified in the policy with prior permission of Reserve Bank of India.

5. Fixed Assets

5.1 Fixed Assets are stated at historical cost (except revalued premises which are stated at revalued amount) less accumulated depreciation / amortization. The appreciation on revaluation is credited to Revaluation Reserve and the incremental depreciation attributable to the revalued amount is debited to the Profit & Loss account and the equal amount is transferred from Revaluation Reserve to Revenue & Other Reserve. Cost of fixed assets include cost of purchase and relevant expenditure incurred thereon till the time it is put to use. Subsequent expenditure/s incurred on the assets are capitalized only when it increases the future benefits from such assets or their functioning capability.

5.2 Premises, where segregation is not possible between land and superstructure, are considered in the value of superstructure.

5.3 Land included under Premises taken on perpetual lease is considered as freehold and not depreciated.

6. Depreciation on Fixed Assets

6.1 Computers are fully depreciated at 33.33%, on straight-line method as per RBI guidelines.

6.2 Additions during the year are depreciated for the full year irrespective of its date of addition.

6.3 Depreciation on Fixed Assets (other than Computers) is charged on straight line method basis as per useful life of assets, considering residual value at 5% of original cost. The useful life and depreciation rate are given hereunder:

S. No.	Particulars	Useful life	Depreciation Rate
1	Premises	60	1.58%
2	Furniture and fixtures	10	9.50%
3	Plant & Machinery	15	6.33%
4	Vehicles	8	11.88%

6.4 Revalued premises are depreciated over the balance useful life of such premises.

6.5 No depreciation is provided on assets sold/disposed of during the year.

6.6 In respect of leasehold premises, the lease premium, if any, is amortized over the period of the lease.

7. Employment Benefits

7.1 Provident Fund and New Pension Scheme (which is applicable to employees who have joined Bank on or after 01.04.2010) are defined contribution schemes, as the Bank pays fixed contribution at predetermined rates. The obligation of the bank is limited to such fixed contribution. The contributions are charged to the Profit and Loss Account.

7.2 Gratuity, Pension and Leave Encashment liabilities are defined benefit obligations and are provided for on the basis of actuarial valuation made at the end of the financial year. These schemes are funded by the Bank and are managed by separate trusts. The short / excess of the liability as compared to the fund held by the respective trust is accounted for as liability / assets as at the at the end of the financial year.

7.3 Other long term Employee benefits such as Silver Jubliee Bonus and Retirement Gifts are provided for based on actuarial valuation.

7.4 Short term employee benefits are recognized as an expense in the Profit and Loss account of the year in which the related services are rendered.

8. Foreign Exchange Transactions

8.1 Monetary assets and liabilities, guarantees, acceptances, endorsements and other obligations are translated in Indian Rupee equivalent at the exchange rates prevailing as on the Balance Sheet date as per Foreign Exchange Dealers'' Association of India (FEDAI) guidelines.

8.2 Non-monetary items other than fixed assets which are carried at historical cost are translated at exchange rate prevailing on the date of transaction.

8.3 Forward exchange contracts and bills are translated at the exchange rates prevailing on the date of commitment. Outstanding foreign exchange contracts and bills are translated as on the Balance Sheet date at the rates notified by FEDAI and the resultant gain / loss is taken to revenue.

8.4 Income and expenditure items are recorded at exchange rates prevailing on the date of the transaction.

Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or as expense in the period in which they arise.

Gains/Losses on account of changes in exchange rates of open position in currency futures trades are settled with the exchange clearing house on daily basis and such gains/ losses are recognized in the Profit and Loss Account.

8.5 Contingent liabilities on account of acceptances, endorsements and other obligations including guarantees and letter of credits in foreign currencies are reported at the Balance Sheet date using the FEDAI closing spot rates, except the Bills for Collection which are accounted for at the notional rates at the time of lodgement.

9. Taxes on Income

Income tax expense is the aggregate amount of current tax, including Minimum Alternate Tax (MAT), wherever applicable and deferred tax.

Current tax is determined as the amount of tax payable for the year and accordingly provision for tax is made.

Deferred Tax Assets and Liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognized using the tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only if there is virtual certainty of realisation of such assets in future.

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that there will be payment of normal income tax during the period specified under the Income Tax Act, 1961.

10. Impairment of Assets

The carrying costs of assets are reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors an impairment loss is recognized wherever the carrying cost of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

After impairment, if any, depreciation is provided on the revised carrying cost of the asset over its remaining useful life. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

11. SEGMENT REPORTING

The Bank recognizes the business segment as the primary reporting segment, in accordance with the RBI guidelines and in compliance with the Accounting Standard 17 issued by Institute of Chartered Accountants of India. As Bank has no overseas branch / operation, there is no geographical segment.

12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

In conformity with 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, 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.

13. LEASES

Lease payments including cost escalations for assets taken on operating lease are recognized in the Profit and Loss Account over the lease term considering the concept of materiality.

14. EARNINGS PER SHARE

The Bank reports basic and diluted earnings per equity share in accordance with the Accounting Standard 20 "Earnings Per Share" issued by the Institute of Chartered Accountants of India. Basic earnings per equity share has been computed by dividing net income by the weighted average number of equity shares outstanding for the period. Diluted earnings per equity share has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

---

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

1. GENERAL

BASIS OF PREPARATION

The financial statements have been prepared and presented under historical cost convention on accrual basis of accounting unless otherwise stated and comply with Generally accepted accounting principles, statutory requirements prescribed under Banking Regulation Act, 1949, circulars and guidelines issued by Reserve Bank of India from time to time and notified accounting standards by Companies (Accounting Standards) Rules, 2006 to the extent applicable and current practices in Banking Industry in India.

USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of date of the financial statements and the reported income and expenses for the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable.

2. Foreign Exchange Transactions

2.1 All the Monetary assets and liabilities in foreign currencies are translated in Indian rupees at the exchange rates prevailing at the Balance Sheet date as notified by Foreign Exchange Dealers Association of India (FEDAI). The resultant gain / loss is accounted for in the Profit & Loss account.

2.2 The outstanding foreign exchange contracts are stated at the prevailing exchange rate on the date of commitment. Profit or loss on such contracts is accounted for as per rates advised by FEDAI as on 31.03.2023 and in accordance with FEDAI guidelines and provisions of para 38 of AS-11.

2.3 Items of Income and expenditure relating to foreign exchange transactions are recorded at exchange rates prevailing on the date of the transactions.

2.4 Contingent liabilities on account of acceptances, endorsements and other obligations including guarantees & letter of credits in foreign currencies are valued as per rates published by FEDAI as on 31.03.2023 except Bills for Collection which are accounted for at the notional rates at the time of lodgment.

3. Investments

3.1 Classification and valuation of investments are made in accordance with the prudential norms prescribed by Reserve Bank of India read with clarifications / directions given by RBI.1

3.2 The entire investment portfolio is classified into three categories, viz, Held to Maturity, Available for Sale and Held for Trading in line with the guidelines / directions of Reserve Bank of India. Disclosure of the investments under the three categories mentioned above is made under six classifications viz.,

I. Government Securities

ii. Other approved securities

iii. Shares

iv. Debentures

v. Subsidiaries / Joint Ventures and

vi. Others

3.3 Basis Of Classification:

i. Investments that the Bank intends to hold till maturity are classified as Held to Maturity.

ii. Investments that are held principally for resale within 90 Days from the date of purchase are classified as Held for Trading.

iii. Investments which are not classified in the above two categories, are classified as Available for Sale.

iv. An investment is classified under the above three categories at the time of its purchase. Shifting of securities from one category to another is done with the approval of the Board normally once in a year. Shifting is effected at the lower of acquisition cost / book value / market value on the date of transfer and the depreciation, if any, on such shifting is fully provided for and the book value of securities is changed accordingly.

3.4 Securities under ''Held to Maturity'' are stated at acquisition costs unless such costs are higher than the face value, in which case the premium is amortized over the remaining period of maturity. Such amortization is shown under "Income on Investments- Schedule 13 item II as a nettng item. In case, the cost is less than the redemption value, the difference being the unrealized gain, is ignored. Any diminution in value of investments in subsidiaries and joint venture, other than temporary in nature, is provided for each investment individually.

3.5 Securities under ''Available for sale'' are valued scrip wise and depreciation/ appreciation is segregated category wise. While net appreciation is ignored, net depreciation under each category is provided for.

3.6 Securities under ''Held for Trading'' are valued at market price and the net depreciation under each category is provided for and the net appreciation, if any, is ignored.

3.7 Cost of investment is based on the weighted average cost method category wise.

3.8 Method Of Accounting - Settlement Date Accounting

Settlement date accounting refers to (a) the recognition of an asset on the day it is received by the entity, and (b) the derecognition of an asset and recognition of any gain or loss on disposal on the day it is delivered by the entity.

Accordingly, Bank follows settlement date accounting for the whole portfolio, SLR as well as Non SLR. Cost of investment is based on the weighted average cost method category wise.

3.9 The ''market value'' for the purpose of valuation of investments included in the ''Available for Sale'' and ''Held for Trading'' categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, price list of RBI, prices declared by Primary Dealers Association of India (PDAI) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

In respect of unquoted securities, the procedure adopted is as below

a.	Government of India Securities: and State Government securities.		At rates put out by FIMMDA/PDAI/FBIL
b.	Other approved Securities, Preference Shares, Debentures and PSU Bonds:		On yield to maturity (YTM) basis at the rate prescribed by FIMMDA/ PDAI/FBIL with such mark ups as laid down by RBI or FIMMDA/ PDAI /FBIL
c.	Equity Shares:		At market price taken from NSE and BSE for quoted share. For unquoted at Break-up Value (without considering revaluation reserve) based on the latest Balance Sheet, which are not older than one year on the date of valuation is considered. In cases where latest Balance Sheets are not available, the shares are valued at Rs.1 per company
d.	Mutual Fund Units, Venture Capital Funds and Security Receipt:		At re-purchase price or Net Assets Value
e.	Treasury Bills, Cash Management Bill, Commercial Papers, Certificate of deposits, Recapitalization Bonds, Subsidiaries, Joint Ventures and Sponsored Institutions:		At carrying cost.

3.10 In determining acquisition cost of investments:

a. Incentive received on subscription is deducted from the cost of securities;

b. Brokerage / commission/ stamp duty paid in connection with acquisition of securities are treated as revenue expenditure;

c. Broken period interest, if any, paid on acquisition of investment is debited to profit & loss account. Broken period interest

received on sale of securities is recognized as Interest Income.

3.11 Profit/ Loss on sale of investments is taken to profit and loss account. However, in case of profit on sale of investments in ''Held to Maturity'' category, an equivalent amount of profit is appropriated to Capital Reserve.

3.12 Non Performing Investments

In respect of Non-Performing Securities, income is not recognized and appropriate provision is made for depreciation in the value of such securities as per Reserve Bank of India guidelines.

3.13 Dividend Income on shares and units of mutual funds is booked on receipt basis.

3.14 In the event, depreciation booked on account of MTM in the ''AFS'' or ''HFT'' categories are found to be in excess of the required amount in any year, the excess is credited to the Profit & Loss Account and an equivalent amount is appropriated to an Investment Reserve Account in Schedule 2 - "Reserve & Surplus" under the head "Revenue and Other Reserves"

4. Advances

4.1 Advances are classified into "Performing" and "Non-Performing" assets and provisions are made as per the prudential norms prescribed by the Reserve Bank of India. Bank has made provisions on Non-Performing Assets as per the prudential norms prescribed by the RBI as under:

Category of Assets	Provision norms
Sub-Standard	15% on Secured Exposure. 25% on Unsecured Exposure* 20% on Unsecured Exposure* in respect of Infrastructure loan accounts where certain safeguards such as escrow accounts are available
Doubtful-I	25% on Secured 100% on Unsecured
Doubtful-II	40% on Secured 100% on Unsecured
Doubtful-III	100% on Secured 100% on Unsecured
Loss	100% of Book Outstanding

* Unsecured exposure is defined as an exposure where the realizable value of the security, as assessed by the bank/ approved valuers/ Reserve Bank''s Inspecting Officers, is not more than 10 per cent, ab-initio, of the outstanding exposure.

4.2 Advances are stated net of de-recognized interest and provisions/ Technical write off made in respect of non-performing advances. Claims received from DICGC/ CGTMSE/ ECGC are not reduced from such advances till adjusted/ technically written-off whereas part recovery in all NPA accounts is reduced from advances.

4.3 Provisions on standard advances are made and are included under "Other Liabilities and Provisions" as per RBI''s guidelines.

4.4 For restructured/ rescheduled advances, provisions are made in accordance with the guidelines issued by RBI.

4.5 The sale of NPA is accounted for as per guidelines prescribed by RBI:-

i) . When the bank sells its financial assets to Securitization Company (SC)/ Reconstruction Company (RC), the same is

removed from the books.

ii) . If the sale is at a price below the net book value (NBV) (i.e. book value less provisions held), the shortfall is debited to

the Profit & Loss account of the year of sale.

iii) . If the sale is for a value higher than the NBV, the excess provision is reversed in the year the amounts are received.

5 Floating Provisions

In accordance with the RBI guidelines, the bank has an approved policy for creation and utilization of floating provisions separately for advances and investments. The quantum of floating provisions to be created would be assessed, at the end of each financial year. The floating provisions would be utilized only for contingencies under extra ordinary circumstances specified in the policy with prior permission of Reserve Bank of India.

6 Fixed Assets

6.1 Premises and other Fixed Assets are stated at historical cost/revalued amount. In respect of premises, where segregation is

not possible between land and superstructure, are considered in the value of superstructure.

6.2 Premises taken on perpetual lease are considered as freehold premises and are not amortized.

7. Depreciation on Fixed Assets

7.1 Depreciation is provided for on -

7.1.1 Computers at 33.33%, on straight-line method; additions are depreciated for the full year irrespective of the date of addition as per RBI guidelines.

7.1.2 Depreciation on fixed Assets is charged on Straight Line Method (SLM) basis as per useful life of assets, considering residual value at 5% of original cost. Additions during the year are depreciated for the full year irrespective of its date of addition. The useful life and depreciation rate are given hereunder:

S. No.	Particulars	Useful life	Depreciation Rate
1	Premises	60	1.58%
2	Furniture and fixtures	10	9.50%
3	Plant & Machinery	15	6.33%
4	Vehicles	8	11.88%

7.1.3 Cost of premises is taken composite, wherever it is not possible to segregate the cost of land from the cost of the superstructure.

7.2 No depreciation is provided on assets sold/disposed of during the year.

7.3 Depreciation attributable to revalued portion of the assets is charged to Profit & Loss Account and equivalent amount is transferred from Revaluation Reserve Account to Revenue Reserve Account.

8 Revenue Recognition

8.1 Income and expenditure are accounted for on accrual basis unless otherwise stated.

8.2 Income on non-performing assets is recognized on realization basis in accordance with the prudential norms prescribed by Reserve Bank of India.

8.3 Partial recovery in non-performing assets is appropriated first towards principal and thereafter towards interest.

8.4 For cases covered under special schemes introduced by RBI viz. Scheme for Sustainable Structuring of Stressed Assets (S4A), Strategic Debt Restructuring, Flexible Structuring of Long Term Project Loans (5/25), Change in Ownership of Borrowing Entities (Outside Strategic Debt Restructuring Scheme), where subsequently the account turns NPA, any recovery shall be first credited to Interest on loans & Advances. Thereafter, the recovery shall be appropriated towards principal amount outstanding in the account. The accounting procedure shall be uniform and consistent in all accounts falling under above schemes.

8.5 Income on guarantees and letters of credit issued, locker rent, income from merchant banking transactions, money transfer

services, dividend on shares, Interest on refund of income tax, commission on credit card, interest on overdue bills, processing fee, Government business including distribution of pension and income from units of mutual fund products and income from ATM operations are accounted for on receipt basis.

8.6 Rebate on compromised accounts is accounted for at the time of full and final adjustment of the account.

8.7 Interest on overdue Term Deposits is provided at the rate of interest applicable to Savings Bank Deposits.

8.8 Liability in respect of incremental lease rent on renewal of lease agreement is accounted for at the time of renewal of the lease.

8.9 Bond Issue Expenses incurred in connection with raising Tier-II Capital are treated as Deferred Revenue Expenditure to be written off over a period of five years.

8.10 Share Issue Expenses are adjusted against the Share Premium Account

9 Staff Retirement Benefits

9.1 Annual contribution to Gratuity Fund, Pension Fund and Leave Encashment Fund, Silver Jubilee Bonus and Retirement Gifts are provided for on the basis of an actuarial valuation.

9.2 The Employees joining on or after 01.04.2010 are being covered under the New Pension Scheme.

10. Impairment of Assets

Impairment losses (if any) on Fixed Assets (including revalued assets) are recognized in accordance with AS 28 (Impairment of Assets) issued by the ICAI and charged off to Profit and Loss Account.

11 Taxes on Income

11.1 Current Income Tax is measured at the amount expected to be paid considering the applicable tax rates and favorable judicial pronouncement/ legal opinions.

11.2 In accordance with AS-22 Deferred Tax comprising of tax effect of timing differences between taxable and accounting income for the period, is recognized keeping in view the consideration of prudence in respect of Deferred Tax Assets/Liabiliti''es.

---

Mar 31, 2022

1. GENERAL

BASIS OF PREPARATION

The financial statements have been prepared and presented under historical cost convention on accrual basis of accounting unless otherwise stated and comply with Generally accepted accounting principles, statutory equirements prescribed under Banking Regulation Act, 1949, circulars and guidelines issued by Reserve Bank of India from time to time and notified accounting standards by companies (Accounting Standards) Rules, 2006 to the extent applicable and current practices in Banking Industry in India.

USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of date of the financial statements and the reported income and expenses for the reporting period. Management believes that the estimates used in the preparation of the financial statementsare prudent and reasonable.

2. FOREIGN EXCHANGE TRANSACTIONS

2.1 All the Monetary assets and liabilities in foreign currencies are translated in Indian rupees at the exchange rates prevailing at the Balance Sheet date as notified by Foreign Exchange Dealers Association of India (FEDAI). The resultant gain / loss is accounted forin the Profit & Loss account.

2.2 The outstanding foreign exchange contracts are stated at the prevailing exchange rate on the date of commitment. Profit or loss on such contracts is accounted for as per rates advised by FEDAI as on 31.03.2022 and in accordance with FEDAI guidelines and provisions of para 38 of AS-11.

2.3 Items of Income and expenditure relating to foreign exchange transactions are recorded at exchange rates prevailing on the date ofthetransactions.

2.4 Contingent liabilities on account of acceptances, endorsements and other obligations including guarantees & letter of credits in foreign currencies are valued as per rates published by FEDAI as on 31.03.2022 except Bills for Collection which are accounted for at thenotional rates at the time oflodgment.

3. INVESTMENTS

3.1 Classification and valuation of investments are made in accordance with the prudential norms prescribed by Reserve Bank of India read with clarifications/directions given by RBI.

3.2 The entire investment portfolio is classified into three categories, viz, Held to Maturity, Available for Sale and Held for Trading in line with the guidelines / directions of Reserve Bank of India. Disclosure of the investments under the three categories mentioned above is made under six classifications viz.,

i. Government Securities

ii. Otherapprovedsecurities

iii. Shares

iv. Debentures

v. Subsidiaries/JointVenturesand

vi. Others

3.3 BASIS OF CLASSIFICATION:

i. Investments that the Bankintendsto hold till maturity are classified as Heldto Maturity.

ii. Investments that are held principally for resale within 90 Days from the date of purchase are classified as Held for Trading.

iii. Investments which are not classified in the above two categories, are classified as Available for Sale.

iv. An investment is classified under the above three categories at the time of its purchase. Shifting of securities from one category to another is done with the approval of the Board normally once in a year. Shifting is effected at the lower of acquisition cost / book value / market value on the date of transfer and the depreciation, if any, on such shifting is fully provided for and the book value ofsecurities is changed accordingly.

3.4 Securities under ''Held to Maturity'' are stated at acquisition costs unless such costs are higher than the face value, in which case the premium is amortized over the remaining period of maturity. Such amortization is shown under "Income on Investments-Schedule 13 item II as a netting item. In case, the cost is less than the redemption value, the difference being the unrealized gain, is ignored. Any diminution in value of investments in subsidiaries and joint venture, other than temporary in nature, is provided for each investment individually.

3.5 Securities under ''Available for sale'' are valued scrip wise and depreciation/ appreciation is segregated category wise. While net appreciation is ignored, net depreciation under each category is provided for.

3.6 Securities under ''Held for Trading'' are valued at market price and the net depreciation under each category is provided for and the net appreciation, ifany, is ignored.

3.7 Cost of investment is based on the weighted average cost method category wise.

3.8 METHODOFACCOUNTING-SETTLEMENTDATEACCOUNTING

Settlement date accounting refers to (a) the recognition of an asset on the day it is received by the entity, and (b) the de recognition of an asset and recognition of any gain or loss on disposal on the day it is delivered bythe entity.

Accordingly, Bank follows settlement date accounting for the whole portfolio, SLR as well as Non SLR. Cost of investment is based on the weighted average cost method categorywise.

3.8 The ''market value'' for the purpose of valuation of investments included in the ''Available for Sale'' and ''Held for Trading'' categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, price list of RBI,

prices

declared by Primary Dealers Association of India (PDAI) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

In respec a.	:t of unquoted securities, the procedure adopted is a Government of India Securities: and State Government securities.	s below	At rates put out by FIMMDA/PDAI/FBIL
b.	Other approved Securities, Preference Shares, Debentures and PSU Bonds:		On yield to maturity (YTM) basis at the rate prescribed by FIMMDA/ PDAI/FBIL with such mark ups as laid down by RBI or FIMMDA/PDAI/FBIL
c.	Equity Shares:		At market price taken from NSE and BSE for quoted share. For unquoted at Breakup Value (without considering revaluation reserve) based on the latest Balance Sheet, which are not older than one year on the date of valuation is considered. In cases where latest Balance Sheets are not available, the shares are valued at Re.1 per company
d.	Mutual Fund Units, Venture Capital Funds and Security Receipt:		At re-purchase price or Net Assets Value
e.	Treasury Bills, Cash Management Bill, Commercial Papers, Certificate of Deposits, Recapitalization Bonds, Subsidiaries, Joint Ventures and Sponsored Institutions:		At carrying cost.

3.10 IN DETERMINING ACQUISITION COST OF INVESTMENTS:

a. Incentive received on subscription is deducted from the cost of securities;

b. Brokerage / commission/ stamp duty paid in connection with acquisition of securities are treated as revenue expenditure;

c. Broken period interest, if any, paid on acquisition of investment is debited to profit & loss account. Broken period interest received on sale of securities is recognized as Interest Income.

3.11 Profit/ Loss on sale of investments is taken to profit and loss account. However, in case of profit on sale of investments in ''Held to Maturity'' category, an equivalent amount of profit is appropriated to Capital Reserve.

3.12 NON PERFORMING INVESTMENTS

In respect of Non-Performing Securities, income is not recognized and appropriate provision is made for depreciation in the value of such securities as per Reserve Bank ofIndia guidelines.

3.13 Dividend Income on shares and units of mutual funds is booked on receipt basis.

3.14 In the event, depreciation booked on account of MTM in the ''AFS'' or ''HFT'' categories are found to be in excess of the required amount in any year, the excess is credited to the Profit & Loss Account and an equivalent amount is appropriated to an Investment Reserve Account inSchedule2-"Reserve&Surplus" underthehead "Revenue and OtherReserves".

4. ADVANCES

4.1 Advances are classified into "Performing" and "Non-Performing" assets and provisions are made as per the prudential norms prescribed by the Reserve Bank of India. Bank has made provisions on Non-Performing Assets as per the prudential norms prescribed by the RBI as under

Category of Assets	Provision Norms
Sub-Standard	15% on Secured Exposure. 25% on Unsecured Exposure* 20% on Unsecured Exposure* in respect of Infrastructure loan accounts where certain safeguards such as escrow accounts are available
Doubtful-I	25% on Secured 100% on Unsecured
Doubtful-II	40% on Secured 100% on Unsecured
Doubtful-III	100% on Secured 100% on Unsecured
Loss	100% of Book Outstanding

* Unsecured exposure is defined as an exposure where the realizable value of the security, as assessed by the bank/ approved valuers/ Reserve Bank''sInspecting Officers, is notmore than 10 per cent, ab-initio, ofthe outstanding exposure.

4.2 Advances are stated net of de-recognized interest and provisions/ Technical write off made in respect of non-performing advances. Claims received from DICGC/ CGTMSE/ ECGC are not reduced from such advances till adjusted/ technically written-off whereas part recovery in all NPA accounts is reduced from advances.

4.3 Provisions on standard advances are made and are included under "Other Liabilities and Provisions" as per RBI''s guidelines.

4.4 For restructured/ rescheduled advances, provisions are made in accordance with the guidelines issued byRBI.

4.5 The sale of NPA is accounted for as per guidelines prescribed by RBI:-

I). When the bank sells its financial assets to Securitization Company (SC)/ Reconstruction Company (RC), the same is removed from the books.

ii) . If the sale is at a price below the net book value (NBV) (i.e. book value less provisions held), the shortfall is debited to

the Profit&Loss account oftheyearofsale.

iii) . If the sale is for a value higherthan the NBV, the excess provision is reversed inthe year the amounts are received.

5 FLOATING PROVISIONS

In accordance with the RBI guidelines, the bank has an approved policy for creation and utilization of floating provisions separately for advances and investments. The quantum of floating provisions to be created would be assessed, at the end of each financial year. The floating provisions would be utilized only for contingencies under extra ordinary circumstances specified inthe policy with prior permission of Reserve Bank ofIndia.

6 FIXEDASSETS

6.1 Premises and other Fixed Assets are stated at historical cost/revalued amount. In respect of premises, where segregation is not possible between land and superstructure, are considered inthe value of superstructure.

6.2 Premises taken on perpetual lease are considered as freehold premises and are not amortized.

7 DEPRECIATIONONFIXEDASSETS

7.1 Depreciation is provided for on-

7.1.1 Computers at 33.33%, on straight-line method; additions are depreciated for the full year irrespective of the date of addition as perRBI guidelines.

7.1.2 Depreciation on fixed Assets is charged on Straight Line Method (SLM) basis as per useful life of assets, considering residual value at 5% of original cost. Additions during the year are depreciated for the full year irrespective of its date of addition. The useful lifeand depreciation rateare given hereunder:

S. No.	Particulars	Useful life	Depreciation Rate
1	Premises	60	1.58%
2	Furniture and Fixtures	10	9.50%
3	Plant & Machinery	15	6.33%
4	Vehicles	8	11.88%

7.1.3 Cost of premises is taken composite, wherever it is not possible to segregate the cost of land from the cost of the superstructure.

7.2 Nodepreciaton isprovided on assetssold/disposed ofduringtheyear.

7.3 Depreciation attributable to revalued portion of the assets is charged to Profit & Loss Account and equivalent amount is transferred from Revaluation Reserve Account to Revenue Reserve Account.

8 REVENUE RECOGNITION

8.1 Income and expenditure are accounted for on accrual basis unless otherwise stated.

8.2 Income on non-performing assets is recognized on realization basis in accordance with the prudential norms prescribed by Reserve Bankof India.

8.3 Partial recoveryin non-performing assets is appropriated first towards principal and thereafter towards interest.

8.4 For cases covered under special schemes introduced by RBI viz. Scheme for Sustainable Structuring of Stressed Assets (S4A), Strategic Debt Restructuring, Flexible Structuring of Long Term Project Loans (5/25), Change in Ownership of Borrowing Entities (Outside Strategic Debt Restructuring Scheme), where subsequently the account turns NPA, any recovery shall be first credited to Interest on loans & Advances. Thereafter, the recovery shall be appropriated towards principal amount outstanding in the account. The accounting procedure shall be uniform and consistent in all accounts falling under above schemes.

8.5 Income on guarantees and letters of credit issued, locker rent, income from merchant banking transactions, money transfer services, dividend on shares, Interest on refund of income tax, commission on credit card, interest on overdue bills, processing fee, Government business including distribution of pension and income from units of mutual fund products and income from ATM operations are accounted for on receipt basis.

8.6 Rebate on compromised accounts isaccounted forat the time of full and final adjustment of the account.

8.7 Interest on overdue Term Depositsisprovidedatthe rate of interestapplicabletoSavings Bank Deposits.

8.8 Liability in respect of incremental lease rent on renewal of lease agreement is accounted for at the time of renewal of the lease.

8.9 Bond Issue Expenses incurred in connection with raising Tier-II Capital are treated as Deferred Revenue Expenditure to be written off overa period offiveyears.

8.10 Share Issue Expensesare adjusted against the Share Premium Account

9 STAFFRETIREMENTBENEFITS

9.1 Annual contribution to Gratuity Fund, Pension Fund and Leave Encashment Fund, Silver Jubilee Bonus and Retirement Gifts are provided for on the basisof an actuarial valuation.

9.2 The Employees joining on or after01.04.2010are being covered under the New Pension Scheme.

10. IMPAIRMENT OF ASSETS

Impairment losses (if any) on Fixed Assets (including revalued assets) are recognized in accordance with AS 28 (Impairment of Assets) issued bythe ICAI and charged offto Profitand Loss Account.

11 TAXESONINCOME

11.1 Current Income Tax is measured at the amount expected to be paid considering the applicable tax rates and favorable judicial pronouncement/legal opinions.

11.2 In accordance with AS-22 Deferred Tax comprising of tax effect of timing differences between taxable and accounting income for the period, is recognized keeping in view the consideration of prudence in respect of Deferred Tax Assets/Liabilities.

---

Mar 31, 2018

1. GENERAL BASIS OF PREPARATION

The financial statements have been prepared and presented under historical cost convention on accrual basis of accounting unless otherwise stated and comply with Generally accepted accounting principles, statutory requirements prescribed under Banking Regulation Act, 1949, circulars and guidelines issued by Reserve Bank of India from time to time and notified accounting standards by companies (Accounting Standards) Rules, 2006 to the extent applicable and current practices in Banking Industry in India.

USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of date of the financial statements and the reported income and expenses for the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable.

2. Foreign Exchange Transactions

2.1 All the Monetary assets and liabilities in foreign currencies are translated in Indian rupees at the exchange rates prevailing at the Balance Sheet date as notified by Foreign Exchange Dealers Association of India (FEDAI). The resultant gain / loss is accounted for in the Profit & Loss account.

2.2 The outstanding foreign exchange contracts are stated at the prevailing exchange rate on the date of commitment. Profit or loss on such contracts is accounted for as per rates advised by FEDAI and in accordance with FEDAI guidelines and provisions of para 38 of AS-11.

2.3 Items of Income and expenditure relating to foreign exchange transactions are recorded at exchange rates prevailing on the date of the transactions.

2.4 Contingent liabilities on account of acceptances, endorsements and other obligations including guarantees & letter of credits in foreign currencies are valued as per rates published by FEDAI except Bills for Collection which are accounted for at the notional rates at the time of lodgment.

3. Investments

3.1 Classification and valuation of investments are made in accordance with the prudential norms prescribed by Reserve Bank of India read with clarifications / directions given by RBI.

3.2 The entire investment portfolio is classified into three categories, viz, Held to Maturity, Available for Sale and Held forTrading in line with the guidelines / directions of Reserve Bank of India. Disclosure of the investments under the three categories mentioned above is made under six classifications viz.,

i. Government Securities

ii. Other approved securities

iii. Shares

iv. Debentures

v. Subsidiaries/Joint Ventures and

vi. Others

3.3 Basis Of Classification:

i. Investments that the Bank intends to hold till maturity are classified as Held to Maturity.

ii. Investments that are held principally for resale within 90 Days from the date of purchase are classified as Held for Trading.

iii. Investments which are not classified in the above two categories, are classified as Available for Sale.

iv. An investment is classified under the above three categories at the time of its purchase. Shifting of securities from one category to another is done with the approval of the Board normally once in a year. Shifting is effected at the lower of acquisition cost / book value / market value on the date of transfer and the depreciation, if any, on such shifting is fully provided for and the book value of securities is changed accordingly.

3.4 Securities under ‘Held to Maturity’ are stated at acquisition costs unless such costs are higher than the face value, in which case the premium is amortized over the remaining period of maturity. Such amortization is shown under “Income on Investments- Schedule 13 item II. In case, the cost is less than the redemption value, the difference being the unrealized gain, is ignored. Any diminution in value of investments in subsidiaries and joint venture, other than temporary in nature, is provided for each investment individually

3.5 Securities under ‘Available for sale’ are valued scrip wise and depreciation/ appreciation is segregated category wise. While net appreciation is ignored, net depreciation under each category is provided for.

3.6 Securities under ‘Held for Trading¹ are valued at market price and the net depreciation under each category is provided for and the net appreciation, if any, is ignored.

3.7 Cost of investment is based on the weighted average cost method category wise.

3.8 Method Of Accounting - Settlement Date Accounting

Settlement date accounting refers to (a) the recognition of an asset on the day it is received by the entity , and (b) the derecognition of an asset and recognition of any gain or loss on disposal on the day it is delivered by the entity .

Accordingly, Bank follows settlement date accounting for the whole portfolio, SLR as well as Non SLR. Cost of investment is based on the weighted average cost method category wise.

3.9 The ‘market value’ for the purpose of valuation of investments included in the ‘Available for Sale’ and ‘Held for Trading’ categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, price list of RBI, prices declared by Primary Dealers Association of India (PDAI) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

In respect of unquoted securities, the procedure adopted is as below:

3.10 In determining acquisition cost of investments:

a. Incentive received on subscription is deducted from the cost of securities;

b. Brokerage /commission/ stamp duty paid in connection with acquisition of securities are treated as revenue expenditure;

c. Broken period interest, if any, paid on acquisition of investment is debited to profit & loss account. Broken period interest received on sale of securities is recognized as Interest Income.

3.11 Profit/ Loss on sale of investments is taken to profit and loss account. However, in case of profit on sale of investments in ‘Held to Maturity¹ category, an equivalent amount of profit is appropriated to Capital Reserve.

3.12 Non Performing Investments

In respect of Non-Performing Securities, income is not recognized and appropriate provision is made for depreciation in the value of such securities as per Reserve Bank of India guidelines.

3.13 Dividend Income on shares and units of mutual funds is booked on receipt basis.

3.14 In the event, provisions created on account of depreciation in the ‘AFS’ or ‘HFT’ categories are found to be in excess of the required amount in any year, the excess is credited to the P.& L. Account and an equivalent amount is appropriated to an Investment Reserve Account in Schedue 2 - “Reserve & Surplus” under the head “Revenue and Other Reserves”.

4. Advances

4.1 Advances are classified into “Performing” and “Non-Performing” assets and provisions are made as per the prudential norms prescribed by the Reserve Bank of India. Bank has made provisions on Non-Performing Assets as per the prudential norms prescribed by the RBI as under:

* Unsecured exposure is defined as an exposure where the realizable value of the security, as assessed by the bank/ approved valuers/ Reserve Bank’s Inspecting Officers, is not more than 10 per cent, ab-initio, of the outstanding exposure.

4.2 Advances are stated net of de-recognized interest and provisions/ Technical write off made in respect of non-performing advances. Claims received from DICGC/ CGTMSE/ ECGC are not reduced from such advances till adjusted/ technically written-offwhereas part recovery in all NPA accounts is reduced from advances.

4.3 Provisions on standard advances are made and are included under “Other Liabilities and Provisions” as per RBI’s guidelines.

4.4 For restructured/ rescheduled advances, provisions are made in accordance with the guidelines issued by RBI.

4.5 The sale of NPA is accounted for as per guidelines prescribed by RBI:-

i). When the bank sells its financial assets to Securitization Company (SC)/ Reconstruction Company (RC), the same is removed from the books.

ii). If the sale is at a price below the net book value (NBV) (i.e. book value less provisions held), the shortfall is debited to the Profit & Loss account of the year of sale.

iii). If the sale is for a value higher than the NBV, the excess provision is reversed in the year the amounts are received.

5 Floating Provisions

In accordance with the RBI guidelines, the bank has an approved policy for creation and utilization of floating provisions separately for advances and investments. The quantum of floating provisions to be created would be assessed, at the end of each financial year. The floating provisions would be utilized only for contingencies under extra ordinary circumstances specified in the policy with prior permission of Reserve Bank of India.

6 Fixed Assets

6.1 Premises and other Fixed Assets are stated at historical cost/revalued amount. In respect of premises, where segregation is not possible between land and superstructure, are considered in the value of superstructure.

6.2 Premises taken on perpetual lease are considered as freehold premises and are not amortized.

7 Depreciation on Fixed Assets

7.1 Depreciation is provided for on -

7.1.1 Computers at 33.33%, on straight-line method; additions are depreciated for the full year irrespective of the date of addition as per RBI guidelines.

7.1.2 Other Fixed assets on written down value method at the rates prescribed by the Income Tax Act 1961; additions effected before 30th September are depreciated for full year and additions effected thereafter are depreciated for half year.

7.1.3 Cost of premises is taken composite, wherever it is not possible to segregate the cost of land from the cost of the superstructure.

7.2 No depreciation is provided on assets sold/disposed of during the year.

7.3 Depreciation attributable to revalued portion of the assets is charged to Profit & Loss Account and equivalent amount is transferred from Revaluation Reserve Account to Revenue Reserve Account.

8 Revenue Recognition

8.1 Income and expenditure are accounted for on accrual basis unless otherwise stated.

8.2 Income on non-performing assets is recognized on realization basis in accordance with the prudential norms prescribed by Reserve Bank of India.

8.3 Partial recovery in non-performing assets is appropriated first towards principal and thereafter towards interest.

8.4 For cases covered under special schemes introduced by RBI viz. Scheme for Sustainable Structuring of Stressed Assets (S4A), Strategic Debt Restructuring, Flexible Structuring of Long Term Project Loans (5/25), Change in Ownership of Borrowing Entities (Outside Strategic Debt Restructuring Scheme), where subsequently the account turns NPA, any recovery shall be first credited to Interest on loans & Advances. Thereafter, the recovery shall be appropriated towards principal amount outstanding in the account. The accounting procedure shall be uniform and consistent in all accounts falling under above schemes.

8.5 Income on guarantees and letters of credit issued, locker rent, income from merchant banking transactions, money transfer services, dividend on shares, Interest on refund of income tax, commission on credit card, interest on overdue bills, processing fee, Government business including distribution of pension and income from units of mutual fund products and income from ATM operations are accounted for on receipt basis.

8.6 Rebate on compromised accounts is accounted for at the time of full and final adjustment of the account.

8.7 Interest on overdue Term Deposits is provided at the rate of interest applicable to Savings Bank Deposits.

8.8 Liability in respect of incremental lease rent on renewal of lease agreement is accounted for at the time of renewal of the lease.

8.9 Bond Issue Expenses incurred in connection with raising Tier-ll Capital are treated as Deferred Revenue Expenditure to be written off over a period of five years.

8.10 Share Issue Expenses are adjusted against the Share Premium Account

9 Staff Retirement Benefits

9.1 Annual contribution to Gratuity Fund, Pension Fund and Leave Encashment Fund are provided for on the basis of an actuarial valuation.

9.2 The Employees joining on or after 01.04.2010 are being covered under the New Pension Scheme.

10. Impairment of Assets

Impairment losses (if any) on Fixed Assets (including revalued assets) are recognized in accordance with AS 28 (Impairment of Assets) issued by the ICAI and charged off to Profit and Loss Account.

11 Taxes on Income

11.1 Current Income Tax is measured at the amount expected to be paid considering the applicable tax rates and favorable judicial pronouncement/ legal opinions.

11.2 In accordance with AS-22 Deferred Tax comprising of tax effect of timing differences between taxable and accounting income for the period, is recognized keeping in view the consideration of prudence in respect of Deferred Tax Assets/Liabilities.

---

Mar 31, 2017

1. General

BASIS OF PREPARATION

The financial statements have been prepared and presented under historical cost convention on accrual basis of accounting unless otherwise stated and comply with Generally accepted accounting principles, statutory requirements prescribed under Banking Regulation Act, 1949, circulars and guidelines issued by Reserve Bank of India from time to time and notified accounting standards by companies (Accounting Standards) Rules, 2006 to the extent applicable and current practices in Banking Industry in India.

USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of date of the financial statements and the reported income and expenses for the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable.

2. Foreign Exchange Transactions

2.1 All the Monetary assets and liabilities in foreign currencies are translated in Indian rupees at the exchange rates prevailing at the Balance Sheet date as notified by Foreign Exchange Dealers Association of India (FEDAI). The resultant gain / loss is accounted for in the Profit & Loss account.

2.2 The outstanding foreign exchange contracts are stated at the prevailing exchange rate on the date of commitment. Profit or loss on such contracts is accounted for as per rates advised by FEDAI and in accordance with FEDAI guidelines and provisions of para 38 of AS-11.

2.3 Items of Income and expenditure relating to foreign exchange transactions are recorded at exchange rates prevailing on the date of the transactions.

2.4 Contingent liabilities on account of acceptances, endorsements and other obligations including guarantees & letter of credits in foreign currencies are valued as per rates published by FEDAI except Bills for Collection which are accounted for at the notional rates at the time of lodgment.

3. Investments

3.1 Classification and valuation of investments are made in accordance with the prudential norms prescribed by Reserve Bank of India read with clarifications / directions given by RBI.

3.2 The entire investment portfolio is classified into three categories, viz, Held to Maturity, Available for Sale and Held for Trading in line with the guidelines / directions of Reserve Bank of India. Disclosure of the investments under the three categories mentioned above is made under six classifications viz.,

i. Government Securities

ii. Other approved securities

iii. Shares

iv. Debentures

v. Subsidiaries / Joint Ventures and

vi. Others

3.3 Basis Of Classification:

i. Investments that the Bank intends to hold till maturity are classified as Held to Maturity.

ii. Investments that are held principally for resale within 90 Days from the date of purchase are classified as Held for Trading.

iii. Investments which are not classified in the above two categories, are classified as Available for Sale.

iv. An investment is classified under the above three categories at the time of its purchase. Shifting of securities from one category to another is done with the approval of the Board normally once in a year. Shifting is effected at the lower of acquisition cost / book value / market value on the date of transfer and the depreciation, if any, on such shifting is fully provided for and the book value of securities is changed accordingly.

3.4 Securities under ''Held to Maturity'' are stated at acquisition costs unless such costs are higher than the face value, in which case the premium is amortized over the remaining period of maturity. Such amortization is shown under "Income on Investments- Schedule 13 item II. In case, the cost is less than the redemption value, the difference being the unrealized gain, is ignored. Any diminution in value of investments in subsidiaries and joint venture, other than temporary in nature, is provided for each investment individually

3.5 Securities under ''Available for sale'' are valued scrip wise and depreciation/ appreciation is segregated category wise. While net appreciation is ignored, net depreciation under each category is provided for.

3.6 Securities under ''Held for Trading'' are valued at market price and the net depreciation under each category is provided for and the net appreciation, if any, is ignored.

3.7 Cost of investment is based on the weighted average cost method category wise.

3.8 Method of Accounting - Settlement Date Accounting

Settlement date accounting refers to (a) the recognition of an asset on the day it is received by the entity , and (b) the de recognition of an asset and recognition of any gain or loss on disposal on the day it is delivered by the entity .

Accordingly, Bank follows settlement date accounting for the whole portfolio, SLR as well as Non SLR. Cost of investment is based on the weighted average cost method category wise.

3.9 The ''market value'' for the purpose of valuation of investments included in the ''Available for Sale'' and ''Held for Trading'' categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, price list of RBI, prices declared by Primary Dealers Association of India (PDAI) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

3.10 In determining acquisition cost of investments:

a. Incentive received on subscription is deducted from the cost of securities;

b. Brokerage / commission/ stamp duty paid in connection with acquisition of securities are treated as revenue expenditure;

c. Broken period interest, if any, paid on acquisition of investment is debited to profit & loss account. Broken period interest received on sale of securities is recognized as Interest Income.

3.11 Profit/ Loss on sale of investments is taken to profit and loss account. However, in case of profit on sale of investments in ''Held to Maturity'' category, an equivalent amount of profit is appropriated to Capital Reserve.

3.12 Non Performing Investments

In respect of Non-Performing Securities, income is not recognized and appropriate provision is made for depreciation in the value of such securities as per Reserve Bank of India guidelines.

3.13 Dividend Income on shares and units of mutual funds is booked on receipt basis.

3.14 In the event, provisions created on account of depreciation in the ''AFS'' or ''HFT'' categories are found to be in excess of the required amount in any year, the excess is credited to the P.& L. Account and an equivalent amount is appropriated to an Investment Reserve Account in Schedule 2 - "Reserve & Surplus" under the head "Revenue and Other Reserves".

4. Advances

4.1 Advances are classified into "Performing" and "Non-Performing" assets and provisions are made as per the prudential norms prescribed by the Reserve Bank of India. Bank has made provisions on Non-Performing Assets as per the prudential norms prescribed by the RBI as under:

* Unsecured exposure is defined as an exposure where the realizable value of the security, as assessed by the bank/ approved valuers/ Reserve Bank''s Inspecting Officers, is not more than 10 per cent, ab-initio, of the outstanding exposure.

4.2 Advances are stated net of de-recognized interest and provisions/ Technical write off made in respect of non-performing advances. Claims received from DICGC/ CGTMSE/ ECGC are not reduced from such advances till adjusted/ technically written-off whereas part recovery in all NPA accounts is reduced from advances.

4.3 Provisions on standard advances are made and are included under "Other Liabilities and Provisions" as per RBI''s guidelines.

4.4 For restructured/ rescheduled advances, provisions are made in accordance with the guidelines issued by RBI.

4.5 The sale of NPA is accounted for as per guidelines prescribed by RBI:-

i). When the bank sells its financial assets to Securitization Company (SC)/ Reconstruction Company (RC), the same is removed from the books.

ii). If the sale is at a price below the net book value (NBV) (i.e. book value less provisions held), the shortfall is debited to the Profit & Loss account of the year of sale.

iii). If the sale is for a value higher than the NBV, the excess provision is reversed in the year the amounts are received.

5. Floating Provisions

In accordance with the RBI guidelines, the bank has an approved policy for creation and utilization of floating provisions separately for advances and investments. The quantum of floating provisions to be created would be assessed, at, the end of each financial year. The floating provisions would be utilized only for contingencies under extra ordinary circumstances specified in the policy with prior permission of Reserve Bank of India.

6. Fixed Assets

6.1 Premises and other Fixed Assets are stated at historical cost/revalued amount. In respect of premises, where segregation is not possible between land and superstructure, are considered in the value of superstructure.

6.2 Premises taken on perpetual lease are considered as freehold premises and are not amortized.

7. Depreciation on Fixed Assets

7.1 Depreciation is provided for on -

7.1.1 Computers at 33.33%, on straight-line method; additions are depreciated for the full year irrespective of the date of addition as per RBI guidelines.

7.1.2 Other Fixed assets on written down value method at the rates prescribed by the Income Tax Act 1961; additions effected before 30th September are depreciated for full year and additions effected thereafter are depreciated for half year.

7.1.3 Cost of premises is taken composite, wherever it is not possible to segregate the cost of land from the cost of the superstructure.

7.2 No depreciation is provided on assets sold/disposed of during the year.

7.3 Amount equivalent to depreciation attributable to revalued portion of the assets is transferred from Revaluation Reserve Account to the Profit & Loss Account.

8. Revenue Recognition

8.1 Income and expenditure are accounted for on accrual basis unless otherwise stated.

8.2 Income on non-performing assets is recognized on realization basis in accordance with the prudential norms prescribed by Reserve Bank of India.

8.3 Partial recovery in non-performing assets is appropriated first towards principal and thereafter towards interest.

8.4 For cases covered under special schemes introduced by RBI viz. Scheme for Sustainable Structuring of Stressed Assets (S4A), Strategic Debt Restructuring, Flexible Structuring of Long Term Project Loans (5/25), Change in Ownership of Borrowing Entities (Outside Strategic Debt Restructuring Scheme), where subsequently the account turns NPA, any recovery shall be first credited to Interest on loans & Advances. Thereafter, the recovery shall be appropriated towards principal amount outstanding in the account. The accounting procedure shall be uniform and consistent in all accounts falling under above schemes.

8.5 Income on guarantees and letters of credit issued, locker rent, income from merchant banking transactions, money transfer services, dividend on shares, Interest on refund of income tax, commission on credit card, interest on overdue bills, processing fee, Government business including distribution of pension and income from units of mutual fund products and income from ATM operations are accounted for on receipt basis.

8.6 Rebate on compromised accounts is accounted for at the time of full and final adjustment of the account.

8.7 Interest on overdue Term Deposits is provided at the rate of interest applicable to Savings Bank Deposits.

8.8 Liability in respect of incremental lease rent on renewal of lease agreement is accounted for at the time of renewal of the lease.

8.9 Bond Issue Expenses incurred in connection with raising Tier-II Capital are treated as Deferred Revenue Expenditure to be written off over a period of five years.

8.10 Share Issue Expenses are adjusted against the Share Premium Account

9. Staff Retirement Benefits

9.1 Annual contribution to Gratuity Fund, Pension Fund and Leave Encashment Fund are provided for on the basis of an actuarial valuation.

9.2 The Employees joining on or after 01.04.2010 are being covered under the New Pension Scheme.

10. Impairment of Assets

Impairment losses (if any) on Fixed Assets (including revalued assets) are recognized in accordance with AS 28 (Impairment of Assets) issued by the ICAI and charged off to Profit and Loss Account.

11. Taxes on Income

11.1 Current Income Tax is measured at the amount expected to be paid considering the applicable tax rates and favorable judicial pronouncement/ legal opinions.

11.2 In accordance with AS-22 Deferred Tax comprising of tax effect of timing differences between taxable and accounting income for the period, is recognized keeping in view the consideration of prudence in respect of Deferred Tax Assets/Liabilities.

---

Mar 31, 2015

1. General

BASIS OF PREPARATION

The financial statements have been prepared and presented under historical cost convention on accrual basis of accounting unless otherwise stated and comply with Generally accepted accounting principles, statutory requirements prescribed under Banking Regulation Act, 1949, circulars and guidelines issued by Reserve Bank of India from time to time and notified accounting standards by companies (Accounting Standards) Rules, 2006 to the extent applicable and current practices in Banking Industry in India.

USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of date of the financial statements and the reported income and expenses for the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable.

2. Foreign Exchange Transactions

2.1 All the Monetary assets and liabilities in foreign currencies are translated in Indian rupees at the exchange rates prevailing at the Balance Sheet date as notified by Foreign Exchange Dealers Association of India (FEDAI). The resultant gain / loss is accounted for in the Profit & Loss account.

2.2 The outstanding foreign exchange contracts are stated at the prevailing exchange rate on the date of commitment. Profit or loss on such contracts is accounted for as per rates advised by FEDAI and in accordance with FEDAI guidelines and provisions of para 38 of AS-11.

2.3 Items of Income and expenditure relating to foreign exchange transactions are recorded at exchange rates prevailing on the date of the transactions.

2.4 Contingent liabilities on account of acceptances, endorsements and other obligations including guarantees in foreign currencies are valued at year end closing rates published by FEDAI except Bills for Collection which are accounted for at the notional rates at the time of lodgment.

3. Investments

3.1 Classification and valuation of investments are made in accordance with the prudential norms prescribed by Reserve Bank of India read with clarifications / directions given by RBI.

3.2 The entire investment portfolio is classified into three categories, viz, Held to Maturity, Available for Sale and Held for Trading in line with the guidelines / directions of Reserve Bank of India. Disclosure of the investments under the three categories mentioned above is made under six classifications viz.,

i. Government Securities

ii. Other approved securities

iii. Shares

iv. Debentures

v. Subsidiaries / Joint Ventures and

vi. Others

3.3 Basis Of Classification:

i. Investments that the Bank intends to hold till maturity are classified as Held to Maturity.

ii. Investments that are held principally for resale within 90 Days from the date of purchase are classified as Held for Trading.

iii. Investments which are not classified in the above two categories, are classified as Available for Sale.

iv. An investment is classified under the above three categories at the time of its purchase. Shifting of securities from AFS to HTM and vice versa can be done with the approval of the Board normally once in a year. Shifting is effected at the lower of acquisition cost / book value / market value on the date of transfer and the depreciation, if any, on such shifting is fully provided for and the book value of securities is changed accordingly.

3.4 Securities under ''Held to Maturity'' are stated at acquisition costs unless such costs are higher than the face value, in which case the premium is amortized over the remaining period of maturity. Such amortization is shown under "Income on Investments- Schedule 13 item II. In case, the cost is less than the redemption value, the difference being the unrealized gain, is ignored. Any diminution in value of investments in subsidiaries and joint venture, other than temporary in nature, is provided for each investment individually

3.5 Securities under ''Available for sale'' are valued scrip wise and depreciation/ appreciation is segregated category wise. While net appreciation is ignored, net depreciation under each category is provided for.

3.6 Securities under ''Held for Trading'' are valued at market price and the net depreciation under each category is provided for and the net appreciation, if any, is ignored.

3.7 Cost of investment is based on the weighted average cost method category wise.

3.8 The ''market value'' for the purpose of valuation of investments included in the ''Available for Sale'' and ''Held for Trading'' categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, price list of RBI, prices declared by Primary Dealers Association of India (PDAI) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

In respect of unquoted securities, the procedure adopted is as below:

a. Government of India Securities: At rates put out by FIMMDA/PDAI

b. State Government Loans, Other On yield to maturity (YTM) basis approved Securities, Preference at the rate prescribed by FIMMDA Shares, Debentures and PSU Bonds: / PDAI with such mark ups as laid down by RBI or FIMMDA/PDAI

c. Equity Shares: At break-up value based on the latest Balance Sheet, which are not older than one year on the date of valuation. In cases where latest Balance Sheets are not available, the shares are valued at Re.1 per company

d. Mutual Fund Units: At re-purchase price or Net Assets Value

e. Treasury Bills, Commercial At carrying cost. Papers, Certificate of Deposits, Recapitalization Bonds, Subsidiaries, Joint Ventures and Sponsored Institutions:

3.9 In determining acquisition cost of investments:

a. Incentive received on subscription is deducted from the cost of securities;

b. Brokerage / commission/ stamp duty paid in connection with acquisition of securities are treated as revenue expenditure;

c. Broken period interest, if any, paid on acquisition of investment is debited to profit & loss account. Broken period interest received on sale of securities is recognized as Interest Income.

3.10 Profit/ Loss on sale of investments is taken to profit and loss account. However, in case of profit on sale of investments in ''Held to Maturity'' category, an equivalent amount of profit is appropriated to Capital Reserve.

3.11 Non Performing Investments

In respect of Non-Performing Securities, income is not recognized and appropriate provision is made for depreciation in the value of such securities as per Reserve Bank of India guidelines.

3.12 Dividend Income on shares and units of mutual funds is booked on receipt basis.

3.13 In the event, provisions created on account of depreciation in the ''AFS'' or ''HFT'' categories are found to be in excess of the required amount in any year, the excess is credited to the P.& L. Account and an equivalent amount is appropriated to an Investment Reserve Account in Schedue 2 - "Reserve & Surplus" under the head "Revenue and Other Reserves".

4. Advances

4.1 Advances are classified into "Performing" and "Non-Performing" assets and provisions are made as per the prudential norms prescribed by the Reserve Bank of India. Bank has made provisions on Non-Performing Assets as per the prudential norms prescribed by the RBI as under:

Category of Assets Provision norms

15% on Secured Exposure. Sub-Standard 25% on Unsecured Exposure* 20% on Unsecured Exposure* in respect of Infrastructure loan accounts where certain safeguards such as escrow accounts are available

Doubtful-I 25% on Secured 100% on Unsecured

Doubtful-II 40% on Secured 100% on Unsecured

Doubtful-III 100% on Secured 100% on Unsecured

Loss 100% of Book Outstanding

* Unsecured exposure is defined as an exposure where the realizable value of the security, as assessed by the bank/ approved valuers/ Reserve Bank''s Inspecting Officers, is not more than 10 per cent, ab-initio, of the outstanding exposure.

4.2 Advances are stated net of de-recognized interest and provisions/ Technical write off made in respect of non-performing advances. Claims received from DICGC/ CGTMSE/ ECGC are not reduced from such advances till adjusted/ technically written-off whereas part recovery in all NPA accounts is reduced from advances.

4.3 Provisions on standard advances are made and are included under "Other Liabilities and Provisions" as per RBI''s guidelines.

4.4 For restructured/ rescheduled advances, provisions are made in accordance with the guidelines issued by RBI.

4.5 The sale of NPA is accounted for as per guidelines prescribed by RBI:-

i) . When the bank sells its financial assets to Securitization Company (SC)/ Reconstruction Company (RC), the same is

removed from the books.

ii) . If the sale is at a price below the net book value (NBV) (i.e. book value less provisions held), the shortfall is debited to

the Profit & Loss account of the year of sale.

iii) . If the sale is for a value higher than the NBV, the excess provision is reversed in the year the amounts are received.

5. Floating Provisions

In accordance with the RBI guidelines, the bank has an approved policy for creation and utilization of floating provisions separately for advances and investments. The quantum of floating provisions to be created would be assessed, at, the end of each financial year. The floating provisions would be utilized only for contingencies under extra ordinary circumstances specified in the policy with prior permission of Reserve Bank of India.

6. Fixed Assets

6.1 Premises and other Fixed Assets are stated at historical cost/revalued amount. In respect of premises, where segregation is not possible between land and superstructure, are considered in the value of superstructure.

6.2 Premises taken on perpetual lease are considered as freehold premises and are not amortized.

7. Depreciation on Fixed Assets

7.1 Depreciation is provided for on -

7.1.1 Computers at 33.33%, on straight-line method; additions are depreciated for the full year irrespective of the date of addition as per RBI guidelines.

7.1.2 Other Fixed assets on written down value method at the rates prescribed by the Income Tax Act 1961; additions effected before 30th September are depreciated for full year and additions effected thereafter are depreciated for half year.

7.1.3 Cost of premises is taken composite, wherever it is not possible to segregate the cost of land from the cost of the superstructure.

7.2 No depreciation is provided on assets sold/disposed of during the year.

7.3 Amount equivalent to depreciation attributable to revalued portion of the assets is transferred from Revaluation Reserve Account to the Profit & Loss Account.

8. Revenue Recognition

8.1 Income and expenditure are accounted for on accrual basis unless otherwise stated.

8.2 Income on non-performing assets is recognized on realization basis in accordance with the prudential norms prescribed by Reserve Bank of India.

8.3 Partial recovery in non-performing assets is appropriated first towards principal and thereafter towards interest.

8.4 Income on guarantees and letters of credit issued, locker rent, income from merchant banking transactions, money transfer services, dividend on shares, Interest on refund of income tax, commission on credit card, interest on overdue bills, processing fee, Government business including distribution of pension and income from units of mutual fund products and income from ATM operations are accounted for on receipt basis.

8.5 Rebate on compromised accounts is accounted for at the time of full and final adjustment of the account.

8.6 Interest on overdue Term Deposits is provided at the rate of interest applicable to Savings Bank Deposits.

8.7 Liability in respect of incremental lease rent on renewal of lease agreement is accounted for at the time of renewal of the lease.

8.8 Bond Issue Expenses incurred in connection with raising Tier-II Capital are treated as Deferred Revenue Expenditure to be written off over a period of five years.

8.9 Share Issue Expenses are adjusted against the Share Premium Account

9. Staff Retirement Benefits

9.1 Annual contribution to Gratuity Fund, Pension Fund and Leave Encashment Fund are provided for on the basis of an actuarial valuation.

9.2 The Employees joining on or after 01.04.2010 are being covered under the New Pension Scheme.

10. Impairment of Assets

Impairment losses (if any) on Fixed Assets (including revalued assets) are recognized in accordance with AS 28 (Impairment of Assets) issued by the ICAI and charged off to Profit and Loss Account.

11. Taxes on Income

11.1 Current Income Tax is measured at the amount expected to be paid considering the applicable tax rates and favorable judicial pronouncement/ legal opinions.

11.2 In accordance with AS-22 Deferred Tax comprising of tax effect of timing differences between taxable and accounting income for the period, is recognized keeping in view the consideration of prudence in respect of Deferred Tax Assets/Liabilities.

---

Mar 31, 2014

Not Available

---

Mar 31, 2013

1.1.1 Provisions for pension, gratuity, leave encashment and other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) (revised 2006) issued by the ICAI. However, the additional liability towards re-opening of pension option and amendment in the Gratuity Act, 1972 has been dealt in accordance with the provisions contained in Reserve Bank of India circular no. DBOD.BP.BC.80/21.04.018/2011-12) dated 9th February 2011 on Re-open- ing of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits . Accordingly the Bank has amortized Rs.146.12 crore on account of Pension and Rs.26.57 crore on account of Gratuity. The balance amount carried forward on account of Pension of Rs.292.96 crore and Gratuity Rs.53.15 crore shall be carried forward to be amortized in next two years.

1.2 Accounting Standard 22 - Accounting for Taxes on Income

1.2.1 Major components of deferred tax assets/liabilities are as under:

The Deferred Tax Liability of Rs.22.43 crore (previous year Rs.14.82 crore) on account of Special Reserve created and maintained u/s 36 (1) (viii) has not been considered necessary in view of the management''s irrevocable decisions not to withdraw from the Special Reserve.

1.2.2 Based on the opinion of tax expert, the bank has considered the difference between accounting income and computation of taxable income on valuation of securities as permanent difference and accordingly, deferred tax liability of Rs.277.77 crore (Previous Year Rs.281.79) has not been considered necessary.

1.2.3 No provision has been considered necessary in respect of disputed demands of Income Tax, Fringed Benefit Tax and Interest Tax aggregating to Rs.261.07 crore Previous year Rs.284.97 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

---

Mar 31, 2012

1. GENERAL

BASIS OF PREPARATION

The financial statements have been prepared and presented under historical cost convention on accrual basis of accounting unless otherwise stated and comply with Generally accepted accounting principles, statutory requirements prescribed under Banking Regulation Act, 1949, circulars and guidelines issued by Reserve Bank of India from time to time and notified accounting standards by companies (Accounting Standards) Rules, 2006 to the extent applicable and current practices in Banking Industry in India.

2. Foreign Exchange Transactions

2.1 All the Monetary assets and liabilities in foreign currencies are translated in Indian rupees at the ex- change rates prevailing at the Balance Sheet date as notified by Foreign Exchange Dealers Association of India (FEDAI). The resultant gain / loss is accounted for in the Profit & Loss account.

2.2 The outstanding foreign exchange contracts are stated at the prevailing exchange rate on the date of commitment. Profit or loss on such contracts is accounted for as per rates advised by FEDAI and in accordance with FEDAI guidelines and provisions of para 38 of AS-11.

2.3 Items of Income and expenditure relating to foreign exchange transactions are recorded at exchange rates prevailing on the date of the transactions.

2.4 Contingent liabilities on account of acceptances, endorsements and other obligations including guarantees & letter of credits in foreign currencies are valued as per rates published by FEDAI except Bills for Collection which are accounted for at the notional rates at the time of lodgment.

3. Investments

3.1 Classification and valuation of investments are made in accordance with the prudential norms prescribed by Reserve Bank of India read with clarifications / directions given by RBI.

3.2 The entire investment portfolio is classified into three categories, viz, Held to Maturity, Available for Sale and Held for Trading in line with the guidelines / directions of Reserve Bank of India. Disclosure of the investments under the three categories mentioned above is made under six classifications viz.,

i. Government Securities

ii. Other approved securities

iii. Shares

iv. Debentures

v. Subsidiaries / Joint Ventures and

vi. Others

3.3 Basis Of Classification:

i. Investments that the Bank intends to hold till maturity are classified as Held to Maturity.

ii. Investments that are held principally for resale within 90 Days from the date of purchase are classified as Held for Trading.

iii. Investments which are not classified in the above two categories, are classified as Available for Sale.

iv. An investment is classified under the above three categories at the time of its purchase. Shifting of securities from one category to another is done with the approval of the Board normally once in a year. Shifting is effected at the lower of acquisition cost / book value / market value on the date of transfer and the depreciation, if any, on such shifting is fully provided for and the book value of securities is changed accordingly.

3.4 Securities under 'Held to Maturity' are stated at acquisition costs unless such costs are higher than the face value, in which case the premium is amortized over the remaining period of maturity. Such amortization is shown under "Income on Investments- Schedule 13 item II. In case, the cost is less than the redemption value, the difference being the unrealized gain, is ignored. Any diminution in value of investments in subsidiaries and joint venture, other than temporary in nature, is provided for each investment individually

3.5 Securities under 'Available for sale' are valued scrip wise and depreciation/ appreciation is segregated category wise. While net appreciation is ignored, net depreciation under each category is provided for.

3.6 Securities under 'Held for Trading' are valued at market price and the net depreciation under each category is provided for and the net appreciation, if any, is ignored.

3.7 Cost of investment is based on the weighted average cost method category wise.

3.8 The 'market value' for the purpose of valuation of investments included in the 'Available for Sale' and 'Held for Trading' categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, price list of RBI, prices declared by Primary Dealers Association of India (PDAI) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

3.9 In determining acquisition cost of investments:

a. Incentive received on subscription is deducted from the cost of securities;

b. Brokerage / commission/ stamp duty paid in connection with acquisition of securities are treated as revenue expenditure;

c. Broken period interest, if any, paid on acquisition of investment is debited to profit & loss account. Broken period interest received on sale of securities is recognized as Interest Income.

3.10 Profit/ Loss on sale of investments is taken to profit and loss account. However, in case of profit on sale of investments in 'Held to Maturity' category, an equivalent amount of profit is appropriated to Capital Reserve.

3.11 Non Performing Investments

In respect of Non-Performing Securities, income is not recognized and appropriate provision is made for depreciation in the value of such securities as per Reserve Bank of India guidelines.

4. Advances

4.1 Advances are classified into "Performing" and "Non-Performing" assets and provisions are made as per the prudential norms prescribed by the Reserve Bank of India. However, the Bank has made higher provisions for sub-standard and doubtful category as follows:

Revised Rates of Provisioning for Non-Performing Assets w.e.f 18.05.2011 are as under:

*/ Unsecured exposure is defined as an exposure where the realizable value of the security, as assessed by the bank/ approved valuers/ Reserve Bank's Inspecting Officers, is not more than 10 per cent, ab-initio, of the outstanding exposure.

The revised provisioning norms will have prospective effect on the fresh slippage (i.e. accounts which slip into NPA category on or after 01.01.2011) and further deterioration in the existing NPAs. However, the provisions already made in any existing NPA account as on 31.12.2010 will not be reduced/reversed.

4.2 Advances are stated net of de-recognized interest and provisions/ Technical write off made in respect of non- performing advances. Claims received from DICGC/ CGTMSE/ ECGC are not reduced from such advances till adjusted/ technically written-off whereas part recovery in all NPA accounts is reduced from advances.

4.3 Provisions on standard advances are made and are included under "Other Liabilities and Provisions" as per RBI's guidelines.

4.4 For restructured/ rescheduled advances, provisions are made in accordance with the guidelines issued by RBI

5. Floating Provisions

In accordance with the RBI guidelines, the bank has an approved policy for creation and utilization of floating provisions separately for advances and investments. The quantum of floating provisions to be created would be assessed, at, the end of each financial year. The floating provisions would be utilized only for contingencies under extra ordinary circumstances specified in the policy with prior permission of Reserve Bank of India.

6 Fixed Assets

6.1 Premises and other Fixed Assets are stated at historical cost/revalued amount. In respect of premises, where segregation is not possible between land and superstructure, are considered in the value of super- structure.

6.2 Premises taken on perpetual lease are considered as freehold premises and are not amortized.

7 Depreciation on Fixed Assets

7.1 Depreciation is provided for on -

7.1.1 Computers at 33.33%, on straight-line method; additions are depreciated for the full year irrespective of the date of addition as per RBI guidelines.

7.1.2 Other Fixed assets on written down value method at the rates prescribed by the Income Tax Act 1961; additions effected before 30th September are depreciated for full year and additions effected thereafter are depreciated for half year.

7.1.3 Cost of premises is taken composite, wherever it is not possible to segregate the cost of land from the cost of the superstructure.

7.2 No depreciation is provided on assets sold/disposed of during the year.

7.3 Amount equivalent to depreciation attributable to revalued portion of the assets is transferred from Revaluation Reserve Account to the Profit & Loss Account.

8 Revenue Recognition

8.1 Income and expenditure are accounted for on accrual basis unless otherwise stated.

8.2 Income on non-performing assets is recognized on realization basis in accordance with the prudential norms prescribed by Reserve Bank of India.

8.3 Partial recovery in non-performing assets is appropriated first towards principal and thereafter towards interest.

8.4 Income on guarantees and letters of credit issued, locker rent, income from merchant banking transactions, money transfer services, dividend on shares, Interest on refund of income tax, commission on credit card, interest on overdue bills, processing fee, Government business including distribution of pension and income from units of mutual fund products and income from ATM operations are accounted for on receipt basis.

8.5 Rebate on compromised accounts is accounted for at the time of full and final adjustment of the account.

8.6 Interest on overdue Term Deposits is provided at the rate of interest applicable to Savings Bank Deposits.

8.7 Liability in respect of incremental lease rent on renewal of lease agreement is accounted for at the time of renewal of the lease.

8.8 Bond Issue Expenses incurred in connection with raising Tier-II Capital are treated as Deferred Revenue Expenditure to be written off over a period of five years.

8.9 Share Issue Expenses are adjusted against the Share Premium Account

9 Staff Retirement Benefits

9.1 Annual contribution to Gratuity Fund, Pension Fund and Leave Encashment Fund are provided for on the basis of an actuarial valuation.

9.2 Transitional liability relating to Pension Fund and Sick Leave determined as per actuarial valuation is writ- ten off over a period of five years commencing from 2007-08 in terms of Revised Accounting Standard 15 (AS-15) as against remaining seven years out of ten years as approved by Reserve Bank of India vide its letter no. DBOD.BP.No. 271/21.01.002/2005-06 dated 23.08.2005.

9.3 The additional liability on account of re-opening of pension option for existing employees who had not opted for pension earlier as well as amendment in the 'Payment of Gratuity Act, 1972' enhancing the gratuity limit to Rs.10 lacs as per Actuarial Valuation is amortized over a period of five years commencing from the FY 2010-11 in terms of RBI Circular DBOD No.BP.BC.80/ 21.04.018/2010-11 dated February 9, 2011. The unamortized expenditure carried forward does not include any amount relating to separated/ retired employees.

9.4 The Employees joining on or after 01.04.2010 are being covered under the New Pension Scheme.

10 Taxes on Income

10.1 Current Income Tax is measured at the amount expected to be paid considering the applicable tax rates and favorable judicial pronouncement/ legal opinions.

10.2 In accordance with AS-22 Deferred Tax comprising of tax effect of timing differences between taxable and accounting income for the period, is recognized keeping in view the consideration of prudence in respect of Deferred Tax Assets/Liabilities.

---

Mar 31, 2011

1. GENERAL

BASIS OF PREPARATION

the financial statements have been prepared and presented under historical cost convention on accrual basis of accounting unless otherwise stated and comply with Generally accepted accounting principles, statutory requirements prescribed under Banking regulation Act, 1949, circulars and guidelines issued by reserve Bank of India from time to time and notified accounting standards by companies (Accounting Standards) rules, 2006 to the extent applicable and current practices in Banking Industry in India.

2. Foreign exchange transactions

2.1 All the Monetary assets and liabilities in foreign currencies are translated in Indian rupees at the exchange rates prevailing at the Balance Sheet date as notified by Foreign exchange Dealers Association of India (FEDAI). the resultant gain / loss is accounted for in the profit & loss account.

2.2 the outstanding foreign exchange contracts are stated at the prevailing exchange rate on the date of commitment. profit or loss on such contracts is accounted for as per rates advised by FEDAI and in accordance with FEDAI guidelines and provisions of para 38 of AS-11.

2.3 Items of Income and expenditure relating to foreign exchange transactions are recorded at exchange rates prevailing on the date of the transactions.

2.4 Contingent liabilities on account of acceptances, endorsements and other obligations including guarantees & letter of credits in foreign currencies are valued as per rates published by FEDAI except Bills for Collection which are accounted for at the notional rates at the time of lodgment.

3. Investments

3.1 Classification and valuation of investments are made in accordance with the prudential norms prescribed by reserve Bank of India read with clarifications / directions given by RBI.

3.2 the entire investment portfolio is classified into three categories, viz, Held to Maturity, Available for Sale and Held for trading in line with the guidelines / directions of reserve Bank of India. Disclosure of the investments under the three categories mentioned above is made under six classifications viz.,

i. Government Securities

ii. other approved securities

iii. Shares

iv. Debentures

v. Subsidiaries / Joint Ventures and

vi. others

3.3 Basis of Classification:

i. Investments that the Bank intends to hold till maturity are classified as Held to Maturity.

ii. Investments that are held principally for resale within 90 Days from the date of purchase are classified as Held for trading.

iii. Investments which are not classified in the above two categories, are classified as Available for Sale.

iv. An investment is classified under the above three categories at the time of its purchase. Shifting of securities from one category to another is done with the approval of the Board normally once in a year. Shifting is effected at the lower of acquisition cost / book value / market value on the date of transfer and the depreciation, if any, on such shifting is fully provided for and the book value of securities is changed accordingly.

3.4 Securities under Held to Maturity are stated at acquisition costs unless such costs are higher than the face value, in which case the premium is amortized over the remaining period of maturity. Such amortization is shown under "Income on Investments– Schedule 13 item II. In case, the cost is less than the redemption value, the difference being the unrealized gain, is ignored. Any diminution in value of investments in subsidiaries and joint venture, other than temporary in nature, is provided for each investment individually

3.5 Securities under Available for sale are valued scrip wise and depreciation/ appreciation is segregated category wise. While net appreciation is ignored, net depreciation under each category is provided for.

3.6 Securities under Held for trading are valued at market price and the net depreciation under each category is provided for and the net appreciation, if any, is ignored.

3.7 Cost of investment is based on the weighted average cost method category wise.

3.8 the market value for the purpose of valuation of investments included in the Available for Sale and Held for trading categories is the market price of the scrip as available from the trades/ quotes on the stock exchanges, price list of RBI, prices declared by primary Dealers Association of India (PDAI) jointly with the Fixed Income Money Market and Derivatives Association of India (FIMMDA).

In respect of unquoted securities, the procedure adopted is as below:

a. Government of India Securities: At rates put out by FIMMDA/PDAI

b. State Government loans, other approved Securities, preference Shares, Debentures and PSu Bonds: on yield to maturity (YTM) basis at the rate prescribed by FIMMDA/ PDAI with such mark ups as laid down by RBI or FIMMDA/PDAI

c. equity Shares : At break-up value based on the latest Balance Sheet, which are not older than one year on the date of valuation. In cases where latest Balance Sheets are not available, the shares are valued at Re.1 per company

d. Mutual Fund units: At re-purchase price or net Assets Value

e. treasury Bills, Commercial papers, Certificate of Deposits, recapitalization Bonds, Subsidiaries, Joint Ventures and Sponsored Institutions: At carrying cost.

3.9 In determining acquisition cost of investments:

a. Incentive received on subscription is deducted from the cost of securities;

b. Brokerage/commission/ stamp duty paid in connection with acquisition of securities are treated as revenue expenditure;

c. Broken period interest, if any, paid on acquisition of investment is debited to profit & loss account. Broken period interest received on sale of securities is recognized as Interest Income.

3.10 profit/ loss on sale of investments is taken to profit and loss account. However, in case of profit on sale of investments in Held to Maturity category, an equivalent amount of profit is appropriated to Capital reserve.

3.11 Non Performing Investments : In respect of non- performing Securities, income is not recognized and appropriate provision is made for depreciation in the value of such securities as per reserve Bank of India guidelines.

4. Advances

The revised provisioning norms will have prospective effect on the fresh slippage (i.e. Accounts which slip into npA category on or after 01.01.2011) and further deterioration in the existing NPAs. However, the provisions already made in any existing NPA account will not be reduced/ reversed.

4.2 Provisions for restructured/ rescheduled Advances are made as per RBI guidelines.

4.3 Advances are stated net of de-recognized interest and provisions/ technical write off made in respect of non-performing advances. Claims received from DICGC, CGTMSE, and ECGC are not reduced from such advances till adjusted/ technically written-off whereas part recovery in all NPA Accounts is reduced from advances.

4.4 Provisions on standard advances are made and are included under Other liabilities and provisions as per RBI guidelines.

5 Floating Provisions

In accordance with the RBI guidelines, the bank has an approved policy for creation and utilization of floating provisions separately for advances and investments. the quantum of floating provisions to be created would be assessed, at, the end of each financial year. the floating provisions would be utilized only for contingencies under extra ordinary circumstances specified in the policy with prior permission of reserve Bank of India.

6. Fixed Assets

6.1 premises and other Fixed Assets are stated at historical cost/revalued amount. In respect of premises, where segregation is not possible between land and superstructure, are considered in the value of superstructure.

6.2 premises taken on perpetual lease are considered as freehold premises and are not amortized.

7. depreciation on Fixed Assets

7.1 Depreciation is provided for on -

7.1.1Computers at 33.33%, on straight-line method; additions are depreciated for the full year irrespective of the date of addition as per RBI guidelines.

7.1.2 other Fixed assets on written down value method at the rates prescribed by the Income tax Act 1961; additions effected before 30th September are depreciated for full year and additions effected thereafter are depreciated for half year.

7.1.3 Cost of premises is taken composite, wherever it is not possible to segregate the cost of land from the cost of the superstructure.

7.2 No depreciation is provided on assets sold/ disposed of during the year.

7.3 Amount equivalent to depreciation attributable to revalued portion of the assets is transferred from revaluation reserve Account to the profit & loss Account.

8. Revenue Recognition

8.1 Income and expenditure are accounted for on accrual basis unless otherwise stated.

8.2 Income on non-performing assets is recognized on realization basis in accordance with the prudential norms prescribed by reserve Bank of India.

8.3 Partial recovery in non-performing assets is appropriated first towards principal and thereafter towards interest.

8.4 Income on guarantees and letters of credit issued, locker rent, income from merchant banking transactions, money transfer services, dividend on shares, Interest on refund of income tax,

commission on credit card, interest on overdue bills, processing fee, Government business including distribution of pension and income from units of mutual fund products. Income from ATM operations are accounted for on receipt basis.

8.5 Rebate on compromised accounts is accounted for at the time of full and final adjustment of the account.

8.6 Interest on overdue term Deposits is provided at the rate of interest applicable to Savings Bank Deposits.

8.7 Liability in respect of incremental lease rent on renewal of lease agreement is accounted for at the time of renewal of the lease.

8.8 Bond Issue expenses incurred in connection with raising Tier-II Capital are treated as Deferred revenue expenditure to be written off over a period of five years.

8.9 Share Issue expenses are adjusted against the Share premium Account

9. Staff Retirement Benefits

9.1 Annual contribution to Gratuity Fund, pension Fund and leave encashment Fund are provided for on the basis of an actuarial valuation.

9.2 Transitional liability relating to pension Fund and Sick leave determined as per actuarial valuation is written off over a period of five years commencing from 2007-08 in terms of revised Accounting Standard 15 (AS-15) as against remaining seven years out of ten years as approved by reserve Bank of India vide its letter no. DBOD.BP.No. 271/21.01.002/2005-06 dated 23.08.2005.

9.3 The additional liability on account of re-opening of pension option for existing employees who had not opted for pension earlier as well as amendment in the payment of Gratuity Act, 1972 enhancing the gratuity limit to Rs.10 lacs as per Actuarial Valuation is amortized over a period of five years commencing from the FY 2010-11 in terms of RBI Circular DBOD No.Bp.BC.80/ 21.04.018/2010- 11 dated February 9, 2011. the unamortized expenditure carried forward does not include any amount relating to separated/ retired employees.

9.4 The employees joining on or after 01.04.2010 are being covered under the new pension Scheme.

10. Taxes on Income

10.1 Current Income tax is measured at the amount expected to be paid considering the applicable tax rates and favorable judicial pronouncement/ legal opinions.

10.2 In accordance with AS-22 Deferred tax comprising of tax effect of timing differences between taxable and accounting income for the period, is recognized keeping in view the consideration of prudence in respect of Deferred tax Assets/liabilities.