Financial Results 2010-2011 - Bank of America Merrill Lynch

5

The Chief Executive OfficerBank of America N.A India Branches

Auditors’ Report on the Financial Statements of Bank of America N.A. India Branches under Section 30 of the Banking Regulation Act, 1949.1. We have audited the attached Balance Sheet of Bank of America, N.A. India Branches (‘the Bank’) as at 31 March 2011 and the

related Profit and Loss Account and the Cash Flow Statement of the Bank for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit of the Bank and its branches in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. The balance sheet and profit and loss account have been drawn up in accordance with the provisions of section 29 of the Banking Regulation Act, 1949 read with the provisions of sub sections (1), (2) and (5) of section 211 and sub section (5) of section 227 of the Companies Act, 1956.

4. In our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required under the Banking Regulation Act, 1949, and the Companies Act, 1956 in the manner so required for banking companies and give a true and fair view:- In the case of balance sheet, of the state of affairs of the Bank as at 31 March 2011;- In the case of the profit and loss account, of the profit for the year ended on that date; and- In the case of the cash flow statement, of the cash flows for the year ended on that date.

5. Further in our opinion the accompanying financial statements dealt with by this report comply with the Accounting Standards, referred to in sub section 3(C) of Section 211 of the Companies Act, 1956, to the extent they are not inconsistent with the accounting policies prescribed by the Reserve Bank of India.

6. We further report that:a) We have obtained all information and explanations which to the best of our knowledge and belief, were necessary for the purpose

of the audit and have found them to be satisfactory;b) the financial accounting systems of the Bank are centralised and therefore, accounting returns for the purpose of preparing

financial statements are not required to be submitted by the branches;c) the transactions of the Bank, which have come to our notice have been within the powers of the Bank;d) in our opinion, the Bank has maintained proper books of account as required by law insofar as appears from our examination of

the books;e) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of

account;f) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the

information required by the Companies Act, 1956, in the manner so required for banking companies and guidelines issued by the Reserve Bank of India from time to time; and

g) the requirements of section 274 (1) (g) of the Companies Act, 1956 are not applicable considering the Bank is a branch of Bank of America N.A. which is incorporated with limited liability in the United States of America.

For B S R & Co. Chartered Accountants Firm Registration No. 101248W Akeel MasterPlace: Mumbai PartnerDate: June 28, 2011 Membership Number: 046768

6

BANK OF AMERICA N.A. (INDIA BRANCHES)(Incorporated in U.S.A. with Limited Liability)

BALANCE SHEET AS AT MARCH 31, 2011

ScheduleAs at

March 31, 2011As at

March 31, 2010 (Rs. ‘000) (Rs. ‘000)

CAPITAL AND LIABILITIES

Capital 1 9,853,492 9,853,492

Reserves and Surplus 2 25,358,165 21,131,811

Deposits 3 59,915,697 54,903,262

Borrowings 4 18,623,901 43,689,775

Other Liabilities and Provisions 5 7,929,399 5,230,665

TOTAL 121,680,654 134,809,005

ASSETS

Cash and Balances with Reserve Bank of India 6 5,148,245 8,184,524

Balances with banks and money at call and short notice 7 54,769 81,053

Investments 8 48,605,942 83,828,602

Advances 9 58,591,405 36,311,567

Fixed Assets 10 310,970 253,669

Other Assets 11 8,969,323 6,149,590

TOTAL 121,680,654 134,809,005

Contingent Liabilities 12 5,017,776,570 2,818,312,089

Bills for Collection 34,283,256 15,957,342

Significant accounting policies and notes to the Financial Statements 18

Schedules referred to above form an integral part of the Balance Sheet

This is the Balance Sheet referred to in our report of even date

For B S R & Co. For BANK OF AMERICA N.A. - INDIA BRANCHESChartered AccountantsFirm Registration No. 101248W

AKEEL MASTER KAKU NAKHATE KUMAR SHAH PARTNER CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER Membership Number: 046768

MUMBAI : June 28, 2011 MUMBAI : June 28, 2011 MUMBAI : June 28, 2011

7


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011

ScheduleYear Ended

March 31, 2011Year Ended

March 31, 2010(Rs. ‘000) (Rs. ‘000)

I. INCOMEInterest earned 13 7,252,873 5,686,156 Other income 14 5,809,858 4,928,582

TOTAL 13,062,731 10,614,738

II. EXPENDITUREInterest expended 15 1,975,332 1,859,925 Operating expenses 16 3,585,313 2,438,598 Provisions and contingencies 17 3,275,732 2,811,718

TOTAL 8,836,377 7,110,241

III. PROFITNet profit for the year 4,226,354 3,504,497 Transfer from Investment Fluctuation Reserves - 1,818,800

TOTAL 4,226,354 5,323,297

IV. APPROPRIATIONSTransfer to Statutory Reserves 1,056,589 876,124 Amount retained in India for meeting Capital to Risk-Weighted Asset Ratio (CRAR) - 1,818,800Transfer to Revenue and Other Reserves 3,169,765 2,628,373

TOTAL 4,226,354 5,323,297

Significant accounting policies and notes to the Financial Statements 18

Schedules referred to above form an integral part of the Profit and Loss Account

This is the Profit and Loss Account referred to in our report of even date




8


CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2011

PARTICULARSYear Ended


March 31, 2010(Rs. ‘000) (Rs. ‘000)

Cash flow from operating activitiesNet profit before taxation 7,506,589 6,277,659 Adjustments for:Depreciation 91,942 79,734 Premium on held to maturity investments - 273 Interest on subordinated debt 4,110 4,723 Profit on sale of fixed assets (658) (2,714)Provision for standard assets 39,000 - Provision for bonus 130,000 - Provision for/(Write back of) leave encashment 120,778 (423)Provision for/(Write back of) country risk provision 1,000 (1,500)(Write back of)/Provision for depreciation on investments (44,503) 40,056

Operating profit before working capital changes 7,848,258 6,397,808 Adjustments for:Decrease/(Increase) in investments 35,267,163 (47,507,559)(Increase) in advances (22,279,838) (2,752,207)(Increase)/Decrease in other assets (2,669,060) 8,973,877 Increase in deposits 5,012,435 13,235,731 Increase/(Decrease) in other liabilities and provisions 2,408,432 (1,190,165)(Decrease)/Increase in borrowings (25,065,874) 20,807,342 Cash Generated from / (used in) Operations 521,516 (2,035,173)Less: Direct Taxes Paid (net of refunds received) (3,430,908) (3,475,539)Net Cash used in Operating Activities (A) (2,909,392) (5,510,712)

Cash flow from Investing ActivitiesDecrease in Held to Maturity Investments - 341,600 Purchase of fixed assets (167,494) (100,731)Proceeds from sale of fixed assets 18,906 18,397 Net Cash (used in)/generated from Investing Activities (B) (148,588) 259,266

Interest paid on subordinated debt (4,583) (4,708)Net Cash used in Financing Activities (C) (4,583) (4,708)

Net change in cash and cash equivalents (A+B+C) (3,062,563) (5,256,154)Cash and Cash equivalents at the beginning of the year as per Schedule 6 and 7 8,265,577 13,521,731Cash and Cash equivalents at the end of the year as per Schedule 6 and 7 (5,203,014) 8,265,577

(3,062,563) (5,256,154)Notes to the Cash Flow Statement1) The above cash flow statement has been prepared under Indirect method set out in Accounting Standard 3 issued by The Institute of

Chartered Accountants of India and notified by the Companies (Accounting Standards) Rules 2006.2) Previous year figures have been regrouped and reclassified wherever necessary to conform to current year’s presentation.

This is the Cash Flow Statement referred to in our report of even date.




9


SCHEDULES FORMING PART OF THE BALANCE SHEET

As at March 31, 2011


(Rs. ‘000) (Rs. ‘000)

SCHEDULE 1 - CapitalI. Amount of deposit kept with Reserve Bank of India under

Section 11(2)(b)(ii) of the Banking RegulationAct, 1949 6,500,000 5,600,000

II. Amount brought in as start-up capital 2,000 2,000 Tier I Capital augmented by Head Office 9,851,492 9,851,492 TOTAL 9,853,492 9,853,492

Note: Capital infused during the year : Rs. Nil (Previous Year Rs. Nil)

SCHEDULE 2 - Reserves and SurplusI. Statutory Reserves

Opening balance 6,147,858 5,271,734 Add : Transfer from Profit and Loss Account 1,056,589 876,124

7,204,447 6,147,858

II. Capital Reserves 3,221,517 3,221,517 3,221,517 3,221,517

III. Amount Retained in India for meeting Capital to Risk-Weighted Asset Ratio (CRAR) Opening balance 9,077,363 5,273,141 Add: Transfer from Revenue and Other Reserves - 1,985,422 Add : Transfer from Profit and Loss Account - 1,818,800

9,077,363 9,077,363

IV. Revaluation Reserves 56,700 56,700 56,700 56,700

V. Investment Fluctuation ReservesOpening balance - 1,818,800 Less: Transfer to Profit and Loss Account - 1,818,800

- -

VI. Revenue and Other ReservesOpening balance 2,628,373 1,985,422 Add : Transfer from Profit and Loss Account 3,169,765 2,628,373

5,798,138 4,613,795 Less: Transfer to amount retained in India for meeting Capital to Risk-Weighted Asset Ratio (CRAR) - 1,985,422

5,798,138 2,628,373 TOTAL (I, II, III, IV, V and VI) 25,358,165 21,131,811

10





(Rs. ‘000) (Rs. ‘000)

SCHEDULE 3 - DepositsA. I. Demand Deposits

i) From Banks 1,398,724 1,567,830 ii) From Others 28,629,571 23,532,560

II. Savings Bank Deposits 3,778,475 5,340,693

III. Term Deposits

i) From Banks - - ii) From Others 26,108,927 24,462,179

TOTAL (I, II and III) 59,915,697 54,903,262

B. i) Deposits of Branches in India 59,915,697 54,903,262

ii) Deposits of Branches outside India - -

TOTAL 59,915,697 54,903,262

SCHEDULE 4 - BorrowingsI. Borrowings in India

i) Reserve Bank of India 4,000,000 - ii) Other Banks 5,450,000 - iii) Other Institutions and Agencies 2,996,518 36,014,135

12,446,518 36,014,135

II. Borrowings outside India 6,177,383 7,675,640

TOTAL (I and II) 18,623,901 43,689,775

Secured borrowings in I and II above 6,996,518 36,014,135

11





(Rs. ‘000) (Rs. ‘000)

SCHEDULE 5 - Other Liabilities and ProvisionsI. Bills payable 1,236,289 1,917,194 II. Inter-office adjustments - net * 679,614 1,113,200 III. Interest accrued 111,508 80,725 IV. Provisions against standard assets (Refer Note 13 - Schedule 18) 767,415 728,415 V. Others (including provisions) 5,134,573 1,391,131

TOTAL 7,929,399 5,230,665

* includes nostro / vostro balances with Head office / branches

SCHEDULE 6 - Cash and Balances with Reserve Bank of IndiaI. Cash in hand

(including foreign currency notes) 67,060 113,184

II. Balances with Reserve Bank of India i) In Current account 5,081,185 8,071,340 ii) In Other accounts - -

TOTAL (I and II) 5,148,245 8,184,524

SCHEDULE 7 - Balances with Banks and Money at Call and Short NoticeI. In India

i) Balances with banksa) In Current accounts 30,283 58,821 b) In Other deposit accounts - -

ii) Money at call and short noticea) With banks - - b) With other institutions - -

TOTAL (i and ii) 30,283 58,821

II. Outside Indiai) In Current accounts 24,486 22,232 ii) In Other deposit accounts - - iii) Money at call and short notice - -

24,486 22,232 TOTAL (I and II) 54,769 81,053

12





(Rs. ‘000) (Rs. ‘000)

SCHEDULE 8 - InvestmentsI. Investments in India

i) Government securities * 27,040,556 67,600,877 ii) Other approved securities - - iii) Shares 600 600 iv) Debentures and bonds - 817,488 v) Subsidiaries and/or joint ventures - - vi) Others (including certificate of deposits and commercial papers) 21,594,989 15,484,343

Gross Investments 48,636,145 83,903,308

Less : Provision for depreciation 30,203 74,706 48,605,942 83,828,602

II. Investments outside India - -

TOTAL (I and II) 48,605,942 83,828,602

* Includes securities of Face Value Rs. 5,200,000,000/- deposited with Clearing Corporation of India Limited as margin deposit (Previous Year: Face Value: Rs. 850,000,000/-)

* Includes securities of Face Value Rs. 6,500,000,000/- kept with Reserve Bank of India under section 11(2)(b)(ii) of Banking Regulation Act, 1949 (Previous Year: Face Value: Rs. 5,600,000,000/-)* Includes securities of Face Value Rs. 4,340,000,000/- pledged with Reserve Bank of India for funds borrowed under Liquidity

Adjustment Facility (Previous Year: Rs. Nil)

SCHEDULE 9 - AdvancesA. i) Bills purchased and discounted 15,837,526 3,132,003

ii) Cash credits, overdrafts and loans repayable on demand 42,752,673 32,987,620 iii) Term loans 1,206 191,944

TOTAL 58,591,405 36,311,567

B. i) Secured by tangible assets (including book debts) 9,071,977 2,817,715 ii) Covered by Bank/Government guarantees - - iii) Unsecured 49,519,428 33,493,852

TOTAL 58,591,405 36,311,567

C. I. Advances in India i) Priority sector 14,034,094 11,818,639 ii) Public sector - - iii) Banks 1,005,997 266,241 iv) Others 43,551,314 24,226,687

58,591,405 36,311,567

II. Advances outside India - -

TOTAL 58,591,405 36,311,567

13





(Rs. ‘000) (Rs. ‘000)

SCHEDULE 10 - Fixed AssetsI. Premises

At Cost on March 31 of preceding year 80,743 80,743 Additions during the year - -

80,743 80,743 Deductions during the year - -

80,743 80,743 Accumulated depreciation 71,701 70,473

9,042 10,270

II. Other Fixed Assets (including Furniture and Fixtures)*At Cost on March 31 of preceding year 635,901 581,475

Additions during the year 153,591 131,074

789,492 712,549

Deductions during the year 46,829 76,648

742,663 635,901

Accumulated depreciation/amortization 457,163 395,027

285,500 240,874

Assets under installation 16,428 2,525

301,928 243,399

TOTAL (I and II) 310,970 253,669

* (Refer Note 34 - Schedule 18)

SCHEDULE 11 - Other AssetsI. Interest Accrued 268,314 294,223 II. Advance tax and tax deducted at source 1,038,407 875,551

(net of Provision for taxation)III. Stationery and Stamps - - IV. Deferred tax asset (Refer Note 20 - Schedule 18) 127,626 37,287 V. Others 7,534,976 4,942,529

TOTAL 8,969,323 6,149,590

14





(Rs. ‘000) (Rs. ‘000)

SCHEDULE 12 - Contingent LiabilitiesI. Claims against the Bank not acknowledged as Debts

(including tax related matters) 636,881 -

II. Liability for partly paid investments - -

III. Liability on account of outstanding forward exchange contracts 1,142,576,943 624,459,761

IV. Liability on account of outstanding derivative contracts 3,843,170,511 2,159,449,991

V. Guarantees given on behalf of constituents

a) in India 13,173,076 12,685,613

b) outside India - -

VI. Acceptances, endorsements and other obligations 8,689,057 5,745,660

VII. Other items for which the Bank is contingently liable

- Forward Sale/Purchase of Securities 1,847,335 6,319,295

- Committed Lines of Credit 7,682,767 9,651,769

TOTAL 5,017,776,570 2,818,312,089

15


SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT

Year Ended March 31, 2011


(Rs. ‘000) (Rs. ‘000)

SCHEDULE 13 - Interest EarnedI. Interest/discount on advances/bills 3,357,997 2,655,958 II. Income on investments 3,586,816 2,890,504 III. Interest on balances with Reserve Bank of India and other inter-bank funds 56,193 3,759 IV. Others 251,867 135,935

TOTAL 7,252,873 5,686,156

SCHEDULE 14 - Other IncomeI. Commission, exchange and brokerage 465,593 604,719 II. Loss on sale of investments (net) (544,358) (260,557)III. Loss on revaluation of investments - (273)IV. Profit on sale of land, buildings and other assets (net) 658 2,714 V. Profit on exchange/derivative transactions (net) 5,300,952 4,266,724 VI. Miscellaneous Income (Refer Note 24 - Schedule 18) 587,013 315,255

TOTAL 5,809,858 4,928,582

SCHEDULE 15 - Interest ExpendedI. Interest on deposits 1,512,810 1,453,694 II. Interest on Reserve Bank of India/inter-bank borrowings 223,942 53,445 III. Others 238,580 352,786

TOTAL 1,975,332 1,859,925

16


SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT



(Rs. ‘000) (Rs. ‘000)

SCHEDULE 16 - Operating ExpensesI. Payments to and provisions for employees 2,172,915 1,267,860 II. Rent, taxes and lighting 173,699 159,154 III. Printing and stationery 33,450 18,653 IV. Advertisement and publicity - - V. Depreciation on Bank’s property 91,942 79,734 VI. Directors’ fees, allowances and expenses - - VII. Auditors’ fees and expenses 3,094 2,304 VIII. Law Charges 3,622 8,590 IX. Postages, Telegrams, Telephones, etc. 70,238 41,187 X. Repairs and maintenance 58,445 42,982 XI. Insurance 55,007 62,207 XII. Other expenditure (Refer Note 23 - Schedule 18) 922,901 755,927

TOTAL 3,585,313 2,438,598

SCHEDULE 17 - Provisions and ContingenciesI. Provision for standard assets 39,000 - II. Provision for/(Write back) of country risk provision 1,000 (1,500) III Provision for taxation (Refer Note 21 - Schedule 18) 3,369,724 2,776,262 IV. Deferred tax (90,339) (3,948)V. Provision for wealth tax 850 848 VI. (Write back of)/Provision for depreciation on investments (44,503) 40,056

TOTAL 3,275,732 2,811,718

17


SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2011

SCHEDULE 18 – SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS

a) Background The financial statements for the year ended March 31, 2011 comprise the accounts of the India branches of Bank of America N.A.

(‘the Bank’) which is incorporated in the United States of America with limited liability.

b) Basis of preparation The financial statements are prepared and presented in accordance with historical cost convention on accrual basis of accounting,

unless otherwise stated, and is in accordance with the Generally Accepted Accounting Principles (‘GAAP’), statutory requirements prescribed under the Banking Regulation Act, 1949, and circulars, guidelines issued by The Reserve Bank of India (‘RBI’) from time to time. The financial statements are also compliant with the Accounting Standards (‘AS’) issued by The Institute of Chartered Accountants of India (‘ICAI’) and notified by the Companies (Accounting Standards) Rules, 2006, to the extent applicable and current practices prevailing within the banking industry in India.

The financial statements are presented in Indian Rupees rounded off to the nearest thousand unless otherwise stated.

c) Use of Estimates The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions

that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in future periods.

d) Significant Accounting Policies

1) Revenue recognition Interest income is recognized in the Profit and Loss account on accrual basis except in case of interest on non-performing

advances which is recognized as income on receipt in accordance with the RBI prudential norms.

Interest income on discounted instruments is recognized over the tenor of the instrument on a constant effective yield basis.

In case of commission on guarantees and letters of credit, income is recognized upfront on its becoming due.

2) Foreign Exchange Transactions Transactions in foreign currency are recorded and translated at exchange rates prevailing on the date of the transaction.

Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Profit and Loss account.

Monetary assets and liabilities denominated in foreign currencies are translated at the Balance Sheet date at exchange rates notified by Foreign Exchange Dealers’ Association of India (FEDAI) and the resultant exchange differences are recognized in the Profit and Loss account.

Outstanding forward exchange contracts are revalued at rates of exchange notified by FEDAI and the resulting profits or losses

are included in the Profit and Loss account.

Contingent liabilities on account of foreign exchange contracts, guarantees and acceptances, endorsements and other obligations denominated in foreign currencies are disclosed at the year-end closing rates of exchange notified by FEDAI.

3) Derivatives The Bank enters into derivative contracts such as interest rate swaps, cross currency swaps, options, exchange traded

interest rate futures, exchange traded currency futures and forward exchange contracts for trading purposes.

All derivative transactions are classified as trading derivatives and are valued at the estimated realisable market price (fair value). The resultant gains or losses are recognized in the Profit and Loss account as ‘Other Income’ with the corresponding net unrealised amounts reflected in ‘Other Assets’ or ‘Other Liabilities’ in the Balance Sheet.

18



Interest rate futures and currency futures are marked-to-market using closing price of relevant futures contract as published by the exchange or clearing corporation. The profit or loss on revaluation is recorded in Profit & Loss Account as ‘Other Income’ and corresponding asset or liability is shown under ‘Other Assets’ or ‘Other Liabilities’ as the case may be. Margin money deposited with exchange is included in ‘Other Assets’. The notional value of futures contract is disclosed as contingent liability.

Fair value is determined by reference to a quoted market price or by using a valuation model. Where the fair value is calculated using a valuation model, the methodology is to calculate the expected cash flows under the terms of each specific contract and then discount these values to its present value. The valuation takes into consideration all relevant market factors (for e.g. prices, interest rates, currency exchange rates, volatility, liquidity etc.).

In case the market prices do not appropriately represent the fair value that would actually be realized for a position or portfolio, valuation adjustments such as market risk close-out costs, bid offer adjustments are made to arrive at the appropriate fair value. These adjustments are calculated on a portfolio basis, and are reported together with / or as a part of the carrying value of the positions being valued, thus reducing trading assets or increasing trading liabilities.

The Bank also maintains provisions on the current mark-to-market value of the contract, arising on account of foreign exchange and interest rate derivative transactions in accordance with the RBI circular on income recognition, asset classification and provisioning pertaining to advances DBOD.No.BP.BC.21 /21.04.048/2010-11 dated July 1, 2010.

Pursuant to the above RBI guidelines, any overdue receivables representing positive mark-to-market value of a foreign exchange and interest rate derivative contract will be treated as a non-performing asset if these remain unpaid for 90 days or more.

4) Investments Classification Investments are classified as “Held to Maturity” (HTM), “Held for Trading” (HFT) and “Available for Sale” (AFS) at the time of

purchase in accordance with RBI norms. Under each of these classifications, investments are further categorized under i) Government Securities, ii) Other approved Securities, iii) Shares, iv) Debentures and Bonds, v) Subsidiaries and/or joint ventures and vi) Others.

Valuation Investments held under HTM classification are carried at acquisition cost. If the acquisition cost is more than the face value, the

premium is amortised over the remaining tenor of the investments.

Investments classified under HFT and AFS portfolio are marked-to-market on a monthly basis. Investments classified under HFT and AFS portfolio are valued as per rates declared by Primary Dealers Association of India (PDAI) jointly with Fixed Income Money Market and Derivatives Association of India (FIMMDA) and in accordance with the RBI guidelines. Consequently net depreciation, if any, under each of the classifications in respect of any category mentioned in ‘Schedule 8-Investments’ is provided for in the Profit and Loss account. The net appreciation, if any, under any classification is ignored, except to the extent of depreciation previously provided. The book value of the individual securities is not changed consequent to periodic valuation of investments.

W.e.f March 21, 2011 the Bank has changed the method of valuation of investments from First in First out method to Weighted Average Cost method. Further as at migration date the book value of securities remains unchanged. The change in the methodology does not have a material impact on the Profit and Loss account of the Bank for the year ended March 31, 2011.

Treasury Bills, Commercial Papers and Certificate of Deposits are valued at carrying cost.

Transfer between classifications Reclassification of investments, if done, are in accordance with RBI guidelines and any such transfer is recorded for at the

acquisition cost/book value/market value, whichever is lower, as at the date of transfer. Depreciation, if any, on such transfer is fully provided for.

Repurchase transactions Repurchase and Reverse Repurchase transactions are reflected in the books of accounts by accounting the same as collateralised

borrowing and lending transactions with an agreement to repurchase, on the agreed terms and in accordance with RBI Master Circular on prudential norms for classification, valuation and operation of investment portfolio by banks DBOD. No. BP.BC.18/21. 04. 141 / 2010-11 dated July 1, 2010.

19



Repurchase and Reverse Repurchase transactions under the Liquidity Adjustment Facility (LAF) with RBI are accounted as borrowing and lending transactions respectively.

Brokerage and Commission Brokerage and Commission paid at the time of acquisition of a security is charged to Profit and Loss account. Broken period interest Broken period interest paid at the time of acquisition of the security is charged to the Profit and Loss account.

5) Fixed Assets Fixed Assets are stated at cost less accumulated depreciation/amortization. As per the policy of the Bank, depreciation is charged

on straight-line basis over the useful life of the asset, at rates which are equal to or higher than those prescribed in Schedule XIV of the Companies Act, 1956.

Tangible Assets Rates of DepreciationLeasehold improvements (including false ceiling, cubicles, partitions etc.) Over period of lease subject to a maximum period

of 10 years.Building (owned premises) 5%Furniture & Fixtures 10%Telecommunication Equipment 20%Motor Vehicles 20%Other Equipment (Mechanical/Electronic) 15%PC Equipment 100%

Fixed assets individually costing less than rupee equivalent of USD 2,500 are fully depreciated in the year of purchase.

Intangible Assets Rate of AmortizationSoftware 20% (Software individually costing less than rupee equivalent of USD 10,000

are fully amortized in the year of purchase)

Impairment of Assets In accordance with AS-28 on ‘Impairment of Assets’ an asset is considered as impaired when at balance sheet date there are

indications of impairment and the carrying amount of the asset, or where applicable, the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset’s net selling price and value in use). The Bank assesses at each balance sheet date whether there is any indication that an asset may be impaired based on internal/external factors. If any such indication exists, the Bank estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than the carrying amount, the carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Profit and Loss account.

6) Advances Classification and provisioning of advances of the Bank are carried out in accordance with the RBI Master Circular on prudential

norms on income recognition, asset classification and provisioning pertaining to advances DBOD. No. BP.BC.21 /21.04.048/2010-11 dated July 1, 2010.

Advances are stated net of bills re-discounted, specific loan loss provisions and interest in suspense for non-performing advances in accordance with the norms prescribed by the RBI.

The Bank also maintains general provisions on standard assets over and above the specific provisions to cover potential credit losses inherent in any loan portfolio.

Provision on Standard Assets and Country Risk Exposure is made in accordance with the norms issued by the RBI and are disclosed under Schedule 5 – ‘Other liabilities and provisions’.

20



7) Employee Benefits The accounting policy in respect of its employee benefit schemes are set out below:

Provident fund Provident fund is contributed to a trust set up by the Bank, for all its eligible employees. The interest rate payable to the members

of the trust is not lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. Shortfall, if any, is contributed by the Bank. To that extent this is defined benefit plan. The contribution to the trust is charged to the Profit and Loss account.

Gratuity Gratuity which is a defined benefit scheme is contributed to a trust set up by the Bank for all its eligible employees. The contribution

is based on actuarial valuation, using Projected Unit Credit Method, as at the Balance Sheet date and is carried out by an independent actuary.

Pension Pension which is a Defined Contribution Scheme is a trust set up by the Bank for all its eligible employees. The contribution is

accounted for on an accrual basis and charged to the Profit and Loss account.

Leave encashment Sick Leave and Privilege Leave are Defined Benefit Plans which the Bank provides for all its eligible employees, based on actuarial

valuation as at the Balance Sheet date carried out by an independent actuary. 8) Taxation Income tax comprises the current tax (i.e. amount of tax for the period, determined in accordance with the Income-tax Act, 1961

and the rules framed thereunder) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

Provision for current tax is recognized in accordance with the provisions of Income-tax Act, 1961 and is made based on the tax liability after taking credit for tax allowances and exemptions.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realised in future. However, where there is unabsorbed depreciation or carried forward losses under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realisation of such assets.

Deferred tax assets are reviewed at each Balance Sheet date and appropriately adjusted to reflect the amount that is reasonably/virtually certain to be realised.

9) Accounting for leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are classified

as operating leases. For operating leases, lease payments are recognized as an expense in the statement of Profit and Loss account on a straight line basis over the lease term.

10) Provisions and contingent liabilities A provision is recognized when there is a present obligation as a result of a past event that probably requires an outflow of

resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions are reviewed at each Balance Sheet date and adjusted to reflect the best available estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise, the asset and the related income are recognized in the period in which the change occurs.

21



Additional Disclosures in terms of RBI Master Circular on Disclosure in Financial Statements – Notes to Accounts no. DBOD.BP.BC No.3/21.04.018/2010-11 dated July 01, 2010

1. Ratio of capital funds to risk weighted assets as at March 31, 2011 is stated below:

Sr. No. Particulars Current Year Previous Year

i) CRAR - BASEL II as at March 31 14.51% 15.49%

ii) CRAR - BASEL I as at March 31 16.03% 17.16%

iii) CRAR – Tier I Capital (Basel I) as at March 31 15.60% 16.58%

iv) CRAR – Tier II Capital (Basel I) as at March 31 0.43% 0.58%

v) Percentage of the shareholding of the Government of India in nationalised banks as at March 31, 2011 Nil Nil

vi) Amount of subordinated debt raised during the year as Tier II Nil Nil

vii) Amount raised by issue of Innovative Perpetual Debt Instruments during the year Nil Nil

viii) Amount raised by issue of Upper Tier II instruments during the year Nil Nil

CRAR – Capital to Risk Weighted Assets Ratio

2. Investments (Rs. ‘000)

Particulars As at March 31, 2011


1) Value of Investments

i) Gross Value of Investments

a) In India 48,636,145 83,903,308

b) Outside India Nil Nil

ii) Provisions for Depreciation

a) In India 30,203 74,706


iii) Net Value of Investments

a) In India 48,605,942 83,828,602


2) Movement of provisions held towards depreciation on investments

i) Opening balance 74,706 34,839

ii) Add: Provisions made during the year Nil 40,057

iii) Less: Write-back of excess provisions during the year 44,503 190

iv) Closing balance 30,203 74,706

22



3. Information on Repurchase Agreement and Reverse Repurchase Agreement(Rs. ‘000)

Year Ended March 31, 2011*

Minimum Outstanding

during the year

Maximum Outstanding

during the year

Daily Average Balance

Outstanding

Outstanding as at

March 31, 2011

Securities Sold under Repurchase Agreement

• Government Securities 51,205 20,199,000 3,100,446 4,000,000

• Corporate debt securities Nil Nil Nil Nil

Securities Purchased under Reverse Repurchase Agreement

• Government Securities 51,900 37,829,374 2,439,554 Nil


(Rs. ‘000)

Year EndedMarch 31, 2010 *

Minimum Outstanding

during the year

Maximum Outstanding

during the year

Daily Average Balance

Outstanding

Outstanding as at

March 31, 2010

Securities Sold under Repurchase Agreement

• Government Securities 242,916 39,499,696 5,154,274 3,999,437


Securities Purchased under Reverse Repurchase Agreement

• Government Securities 500,000 67,000,000 25,757,957 Nil


*Includes Liquidity Adjustment Facility (LAF) with Reserve Bank of India.

4. Issuer Composition of Non-SLR Investments

As at March 31, 2011 (Rs. ‘000)

Sr. No.

Issuer Amount (Book Value)

Extent of private

placement

Extent of ‘below investment

grade’ securities

Extent of ‘unrated’

securities

Extent of ‘unlisted’

securities

1) Public Sector Undertakings Nil Nil Nil Nil Nil

2) Financial Institutions Nil Nil Nil Nil Nil

3) Banks 21,594,989 21,594,989 Nil Nil 21,594,989

4) Private corporates Nil Nil Nil Nil Nil

5) Subsidiaries/Joint ventures Nil Nil Nil Nil Nil

6) Others 600 600 Nil 600 600

7) Provision held towards depreciation Nil N.A N.A N.A N.A

Total 21,595,589 21,595,589 Nil 600 21,595,589

23



As at March 31, 2010 (Rs. ‘000)Sr. No.

Issuer Amount (Book Value)

Extent of private placement

Extent of ‘below investment grade’

securities

Extent of ‘unrated’

securities

Extent of ‘unlisted’ securities

1) Public Sector Undertakings* 298,574 298,574 Nil Nil Nil

2) Financial Institutions 518,914 518,914 Nil Nil Nil

3) Banks 14,998,400 14,998,400 Nil Nil 14,998,400

4) Private corporate 485,943 485,943 Nil Nil 485,943

5) Subsidiaries/Joint ventures Nil Nil Nil Nil Nil

6) Others 600 600 Nil 600 600

7) Provision held towards depreciation (7,388) N.A N.A N.A N.A

Total 16,295,043 16,302,431 Nil 600 15,484,943

*Comprises 7% REC 2012 and 7.9% REC 2012.

5. Non-Performing Non-SLR Investments as at March 31, 2011 There are no non-performing non-SLR Investments as at March 31, 2011. (Previous year Rs. Nil)

6. Forward Rate Agreements/Interest Rate Swaps(Rs. ‘000)

Sr. No.



i) The notional principal value of interest rate swaps 3,566,237,777 1,860,454,852 ii) Losses which would be incurred if counterparties failed to fulfill their obligations under

the agreements31,227,415 20,574,291

iii) Collateral obtained by the bank upon entering into swaps Nil Nil iv) Concentration of credit risk arising from the swaps Nil Nil v) The fair value of interest rate swaps – Gains/(Losses) 1,993,525 1,219,145

Notes:a) Swaps undertaken with counterparties are based on established market benchmarks. b) The counterparties for the swaps undertaken are Banks/Corporates and are within approved credit exposure limits. The maximum exposure is towards the Banking Industry. c) There are no forward rate agreements as at March 31, 2011. (Previous year Rs. Nil)d) For accounting policies relating to the Interest Rate Swaps, refer Note (D)(3) – Schedule 18.

24



7. Exchange Traded Interest Rate Derivatives(Rs. ‘000)

Sr. No.



1) Notional principal amount of exchange traded interest rate derivatives undertaken during the year,

— Interest rate futures Nil 2,053,0002) Notional principal amount of exchange traded interest rate derivatives outstanding

as at March 31,— Interest rate futures Nil 71,800

3) Notional principal amount of exchange traded derivatives outstanding and not "highly effective"

— Interest rate futures Nil Nil4) Mark-to-market value of exchange traded derivatives outstanding and not "highly

effective"— Interest rate futures Nil Nil

8. Disclosure on Risk Exposure on Derivatives

a. Qualitative Disclosure

• The Bank enters into derivative contracts for the purposes of trading and to meet customer requirements to manage their risks.

• The Bank has comprehensive policies in place for measurement, reporting, monitoring and mitigating credit, market and operational risk.

▪ Credit risk is managed based on the risk profile of the borrower or counterparty, repayment sources and other support given the current events, conditions and expectations. Credit risk for a derivative contract is sum of the potential future changes in value and the replacement cost, which is the positive mark-to-market value of the contract.

▪ The Bank uses Value-at-Risk (VAR) modelling and stress testing to measure and manage market risk. Trading limits and VAR are used to manage day-to-day risks and are subject to testing where expected performance is compared to actual performance. All limit excesses are communicated to senior management for review.

▪ There exists an organisational set up for the management of risk. All lines of business are responsible for the risks within the business including operational risks. Such risks are managed through corporate-wide and/or line of business specific policies and procedures, controls and monitoring tools.

• Treasury front-office, mid-office and back-office are managed by officials with necessary systems support and clearly defined responsibilities.

• There exist policies for recording derivative transactions, recognition of income, valuation of outstanding contracts, provisioning and credit risk mitigation. The gains or losses are reported under heading ‘Profit on exchange/derivative transactions’ in the Profit and Loss account and either ‘Other assets’ or ‘Other liabilities’ depending upon whether the present value of aggregate outstanding derivative instrument, is a receivable or payable.

• As at March 31, 2011, the mark-to-market positions for Forward exchange contracts, Interest Rate swaps, Cross Currency interest rate swaps, Currency Futures & Options are aggregated product wise and disclosed net in the Balance Sheet under ‘Other Assets’ or ‘Other Liabilities’ in Schedule 11 or Schedule 5 respectively. The details are as under:

25



As at March 31, 2011 (Rs. ‘000)

Particulars Asset (+) Liability (-) NetForward exchange contracts 16,391,874 (15,589,973) 801,901Interest rate swap 31,227,415 (29,233,890) 1,993,525Cross currency interest rate swap 19,460,788 (18,552,429) 908,359Currency futures Nil (15,623) (15,623)Options 2,051,866 (611,506) 1,440,360Total 69,131,943 (64,003,421) 5,128,522

b. Quantitative Disclosure(Rs. ‘000)

Sr. No.

Particulars Currency Derivatives**


Interest RateDerivatives*

As at March 31, 20111) Derivatives (Notional Principal Amount)

a) For hedging Nil Nilb) For trading 276,932,734 3,566,237,777

2) Marked-to-Market Positionsa) Asset (+) 21,512,654 31,227,415b) Liability (-) (19,179,558) (29,233,890)

3) Credit Exposure# 43,920,663 60,994,4904) Likely impact of one percentage change in interest rate (100*PV01)

a) on hedging derivatives Nil Nilb) on trading derivatives 553,711 715,613

5) Maximum and Minimum of 100*PV01 observed during the yeara) on hedging Nil Nilb) on trading (Maximum) 729,438 2,074,661c) on trading (Minimum) 151,557 (173,093)

26



(Rs. ‘000)Sr. No.

Particulars Currency Derivatives**As at March 31, 2010

Interest Rate Derivatives*As at March 31, 2010

1) Derivatives (Notional Principal Amount)a) For hedging Nil Nilb) For trading 298,923,339 1,860,454,852

2) Marked-to-Market Positionsa) Asset (+) 17,923,116 20,574,291b) Liability (-) (14,891,484) (19,355,145)

3) Credit Exposure# 41,684,336 37,406,8934) Likely impact of one percentage change in interest rate (100*PV01)

a) on hedging derivatives Nil Nilb) on trading derivatives 297,808 (167,095)

5) Maximum and Minimum of 100*PV01 observed during the yeara) on hedging Nil Nilb) on trading (Maximum) 500,297 569,736c) on trading (Minimum) (42,762) (409,710)

* Interest Rate derivatives comprise Interest Rate swaps and Interest Rate Futures.**Currency Derivatives includes Currency futures, Cross Currency interest rate swaps and options. # Credit exposure represents sum of potential future exposure and positive mark-to-market value of contracts.

Nature and terms of interest rate swaps: (Rs. ‘000)

Nature Benchmark No. of trades as at March 31, 2011

Notionals as at March 31, 2011

No. of trades as at March 31, 2010

Notionals as atMarch 31, 2010

Trading MIBOR* 4,959 3,164,638,455 2,478 1,432,128,475

Trading MIFOR** 549 252,525,572 626 264,628,745

Trading INBMK*** 60 29,000,000 58 32,500,000

Trading Others 153 120,073,750 154 131,197,632

Total 5,721 3,566,237,777 3,316 1,860,454,852

* Mumbai Interbank Offer Rate** Mumbai Interbank Forward Rate*** India Benchmark

9. Movement in Non Performing Assets (Funded):(Rs. ‘000)



Gross NPAs as at April 01 (Opening Balance) 6,978 6,978Additions (Fresh NPAs during the year) Nil NilSub-total (A) 6,978 6,978Less: -

i) Upgradations Nil Nilii) Recoveries (excluding recoveries made from upgraded accounts) Nil Niliii) Write-offs Nil Nil

Sub-total (B) Nil NilGross NPAs as at March 31 (Closing balance) (A-B) 6,978 6,978

27



(Rs. ‘000)Sr. No.

Items As at March 31, 2011


1) Net NPAs to Net Advances (%) Nil Nil2) Movement of NPAs (Gross)

a) Opening balance 6,978 6,978b) Additions during the year Nil Nilc) Recoveries / write offs Nil Nild) Closing balance 6,978 6,978

3) Movement of Net NPAs a) Opening balance Nil Nilb) Additions during the year Nil Nilc) Recoveries / write offs Nil Nild) Closing balance Nil Nil

4) Movement of provisions for NPAs (excluding provisions on standard assets)a) Opening balance 6,978 6,978b) Provisions made during the year Nil Nilc) Recoveries / write offs Nil Nild) Closing balance 6,978 6,978

10. Accounts subject to Restructuring

In accordance with the RBI Master Circular on Disclosure in Financial Statements – Notes to Accounts no. DBOD.BP.BC No. 3/21.04.018/2010-11 dated July 01, 2010 on disclosure in the financial statements, the total accounts subject to restructuring, rescheduling, renegotiation during the year are as follows:

(Rs. ‘000)

Particulars CDR Mechanism Year Ended

March 31, 2011

SME Debt Restructuring


Others Year Ended

March 31, 2011

Standard advances restructured

No. of Borrowers Nil Nil NilAmount Outstanding

- Out of which restructuredNilNil

NilNil

NilNil

Sacrifice (diminution in the fair value) Nil Nil NilSub-standard advances restructured



NilNil

NilNil

Sacrifice (diminution in the fair value) Nil Nil NilDoubtful advances restructured



NilNil

NilNil

Sacrifice (diminution in the fair value) Nil Nil NilTotal No. of Borrowers Nil Nil Nil

Amount Outstanding- Out of which restructured

NilNil

NilNil

NilNil

Sacrifice (diminution in the fair value) Nil Nil Nil

28



(Rs. ‘000)

Particulars CDR Mechanism Year Ended

March 31, 2010

SME Debt Restructuring


Others Year Ended

March 31, 2010

Standard advances restructured



NilNil

NilNil

Sacrifice (diminution in the fair value) Nil Nil NilSub-standard advances restructured



NilNil

NilNil

Sacrifice (diminution in the fair value) Nil Nil NilDoubtful advances restructured



NilNil

NilNil

Sacrifice (diminution in the fair value) Nil Nil NilTotal No. of Borrowers Nil Nil Nil

Amount Outstanding- Out of which restructured

NilNil

NilNil

NilNil

Sacrifice (diminution in the fair value) Nil Nil Nil

11. No Financial assets were sold during the year to Securitisation/Reconstruction Company for asset reconstruction (Previous year Rs. Nil).

12. Details of Non-Performing Financial Assets purchased/sold

a) Non-Performing Financial Assets purchased(Rs. ‘000)

Sr. No.

Particulars Current Year Previous Year

1 a) No. of accounts purchased during the year Nil Nil

b) Aggregate outstanding as at March 31 Nil Nil

2 a) Out of these, number of accounts restructured during the year Nil Nil

b) Aggregate outstanding as at March 31 Nil Nil

Total Nil Nil

b) Non-Performing Financial Assets sold(Rs. ‘000)

Sr. No.

Particulars Current Year Previous Year

1) No. of accounts sold during the year Nil Nil

2) Aggregate outstanding as at March 31 Nil Nil

3) Aggregate consideration received Nil Nil

29



13. Provision for standard assets are as follows:(Rs. ‘000)

Sr. No.



1) Loans and advances 287,408 248,408

2) Foreign exchange contracts and derivatives 480,007 480,007Total 767,415 728,415

14. Important Financial Ratios:

Sr. No. Particulars Year Ended March 31, 2011


a) Interest income as a percentage to working funds* 6.48% 4.81%b) Non interest income as a percentage to working funds* 5.19% 4.17%c) Operating Profit as a percentage to working funds* 6.70% 5.34%d) Return on assets 3.77% 2.60%e) Business (Deposits plus Advances) per employee (Rs. ‘000) 385,225 310,197f) Profit per employee (Rs. ‘000) 13,902 12,126

*Working funds are the Average of Total assets as per Form X.

15. Maturity Pattern of Assets and Liabilities

The maturity pattern of assets and liabilities as at March 31, 2011 is as under:(Rs. Crores)

Particulars Day 1 2 to 7 days

8 to 14days

15 to 28days

29 days and upto

3months

Over 3 months

and upto

6 months

Over 6 months

and upto 1 year

Over 1 year

and upto

3 years

Over 3 years and upto

5 years

Over 5

Years

Total

Advances 222 1,300 160 727 1,038 300 1,462 650 Nil Nil 5,859

Investment in Securities 2,803 907 103 106 187 191 25 518 1 20 4,861

Deposits 927 328 422 344 448 772 31 2,715 2 3 5,992

Borrowings Nil 1,468 Nil 13 146 39 183 13 Nil Nil 1,862

Foreign Currency Assets 1 440 8 50 204 124 134 13 Nil Nil 974

Foreign Currency Liabilities 203 223 Nil 13 146 39 183 732 Nil Nil 1,539

Note: Foreign currency assets include balances in respect of Advances and foreign currency liabilities include balances in respect of Deposits & Borrowings

30



The maturity pattern of assets and liabilities as at March 31, 2010 is as under:

(Rs. Crores)

Particulars Day 1 2 to 7days

8 to 14days

15 to 28days

29 days and

upto 3 months

Over 3 months

and upto

6 months

Over 6 months

and upto

1 year

Over 1 year

and upto 3 years

Over 3 years and

upto 5 years

Over 5

years

Total

Advances 187 574 496 573 1,413 186 175 27 Nil Nil 3,631

Investment in Securities 2,850 4,584 139 80 162 94 10 447 16 1 8,383

Deposits 755 624 621 348 290 413 44 2,391 Nil 4 5,490

Borrowings Nil 3,836 7 13 352 47 1 113 Nil Nil 4,369

ForeignCurrency Assets 3 226 8 8 379 62 1 Nil Nil Nil 687

Foreign Currency Liabilities 146 235 7 13 352 47 2 629 Nil Nil 1,431

Note: Foreign currency assets include balances in respect of Advances and foreign currency liabilities include balances in respect of Deposits & Borrowings

16. Exposure to Sensitive Sectors

A. Exposure to Real Estate Sector(Rs. ‘000)

Category As at March 31, 2011


Direct Exposurei) Residential Mortgages Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented; 6,889 7,862

ii) Commercial Real EstateLending secured by mortgages on commercial real estates (office buildings, retail space, multi-purpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure would also include non-fund based (NFB) limits; Nil Niliii) Investment in mortgage backed securities (MBS) and other securitised exposures a. Residential b. Commercial Real Estate

NilNil

NilNil

Indirect Exposure

Fund based and non-fund based exposures to National Housing Bank and Housing Finance Companies 11,853,217 9,534,057Total Exposure to Real Estate Sector 11,860,106 9,541,919

31



B. Exposure to Capital Market(Rs. ‘000)

Sr. No.



1) Direct investment in equity shares, convertible bonds, convertible debentures and units of equity oriented mutual funds the corpus of which is not exclusively invested in corporate debt;• Investment in equity shares 600 600

2) Advances against shares/ bonds/ debentures or other securities or on clean basis to individuals for investment in shares (including IPOs/ESOPs), convertible bonds, convertible debentures and units of equity oriented mutual funds;

Nil Nil

3) Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security;

Nil Nil

4) Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares/convertible bonds/convertible debentures/units of equity oriented mutual funds does not fully cover the advances;

Nil Nil

5) Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers; 440,000 Nil

6) Loans sanctioned to corporate against the security of shares/ bonds/debentures or other securities or on clean basis for meeting promoter’s contribution to the equity of new companies in anticipation of raising resources;

Nil Nil

7) Bridge loans to companies against expected equity flows/issues; Nil Nil8) Underwriting commitments taken up by the Bank in respect of primary issue of

shares or convertible bonds or convertible debentures or units of equity oriented mutual funds;

Nil Nil

9) Financing to stockbrokers for margin trading; Nil Nil10) All exposures to Venture Capital Funds (both registered and unregistered) Nil Nil

Total Exposure to Capital Market 440,600 600

17. Country Risk Exposure

Provision for Country Risk exposure in terms of RBI Master Circular on Disclosure in Financial Statements – Notes to Accounts no. DBOD.BP. BC.No.3/21.04.018/ 2010-11 dated July 1, 2010 is as follows:

(Rs. ‘000)

Risk Category

Exposure (net) as at March 31, 2011

Provision held as at March 31, 2011

Exposure (net) as at March 31, 2010

Provision held as at March 31, 2010

Insignificant 9,056,816 6,000 8,587,254 5,000

Low 376,055 Nil 48,957 Nil

Moderate 88,255 Nil 385 Nil

High Nil Nil Nil Nil

Very High Nil Nil Nil Nil

Restricted Nil Nil Nil Nil

Off-Credit Nil Nil Nil Nil

Total 9,521,126 6,000 8,636,596 5,000

32



18. Single and Group Borrower limits a) During the year, the Bank has exceeded the regulatory prescription of 15% of single borrower limit, but has remained within the extended 20% limit for the following clients:

• Chennai Petroleum Corporation Limited• Hindalco Industries Limited

b) Further, Housing Development Finance Corporation Limited continues to remain in excess of the prescribed limits of 15% and the extended limit of 20%.

For the above excesses, the Local Management Team has approved the lending as per RBI Master Circular on Exposure Norms DBOD No. Dir. BC. 14/13.03.00/ 2010-11 dated July 1, 2010. The Bank has also complied with other requirements under the above mentioned circular.

During the financial year ended March 31, 2011, the Bank did not exceed the group borrower limits in respect of any of its clients.

19. Unsecured Advances

Unsecured advances have been appropriately classified under ‘Schedule 9 – Advances’. During the year ended March 31, 2011, the Bank has not given loans against intangible securities such as rights, licenses, authority etc.

20. Deferred Tax

The Deferred Tax Asset (DTA) as at March 31, 2011 amounting to Rs. 127,626 thousand (Previous year Rs. 37,287 thousand) represents timing difference on account of depreciation on fixed assets and disallowances under section 43B of Income-tax Act, 1961. An increase in DTA for the year ended March 31, 2011 amounting to Rs. 90,339 thousand has been credited to the Profit and Loss account (Previous year Rs. 3,948 thousand debited to Profit and Loss account).

The components that gave rise to the deferred tax assets and liabilities included in the balance sheet are as follows: (Rs. ‘000)

Particulars As at March 31, 2011 As at March 31, 2010

Deferred tax assets

Depreciation on fixed assets 22,069 37,287

Disallowances under section 43B of Income-tax Act, 1961

105,557 Nil

Net deferred tax assets 127,626 37,287

21. Provision for Taxation(Rs. ‘000)

Particulars Year Ended March 31, 2011 Year Ended March 31, 2010

Income Tax 3,369,724 2,776,262

Wealth Tax 850 848

Total 3,370,574 2,777,110

33



22. As per RBI letter DBS.CO.FBMD.14717/17.04009/2010-11 dated April 26, 2011, a penalty of Rs. 500 thousand (Previous year Rs. Nil) was imposed by the RBI for contravention of certain clauses under section 47A (1)(b) read with Section 46(4) of Banking Regulation Act, 1949 in respect of Foreign Exchange Derivatives Contracts for F.Y. 2006–2007 and F.Y. 2007–2008.

23. Other expenditure in ‘Schedule 16 – Operating Expenses’ includes Head office administration expenditure of Rs. 370,000 thousand (Previous year Rs. 315,000 thousand) and data processing & network services expenses amounting to Rs. 183,139 thousand (Previous year Rs. 232,678 thousand) attributable to the Bank’s operations in India.

24. Miscellaneous Income includes service fee income of Rs. 494,166 thousand (Previous year Rs. 293,359 thousand) from overseas branches and affiliates.

25. Letters of Comfort issued

The Bank has not issued any Letter of Comfort during the financial year ended March 31, 2011 (Previous year Rs. Nil).

26. Draw Down from Reserves

During the Financial year ended March 31, 2011, there has been no drawdown from Reserves (Previous year Rs. Nil). Also refer Schedule 2 – Reserves and Surplus.

27. Disclosure of Complaints/Unimplemented awards of Banking Ombudsmen

In accordance with RBI Master Circular on Customer Services in Banks DBOD No. Leg.BC.19 / 09.07.006/2010-11 dated July 01, 2010 details of customer complaints and awards passed by Banking Ombudsman are as follows:

A. Customer complaints

Sr. No.

Particulars Year Ended March 31, 2011


a) No. of complaints pending at the beginning of the year Nil Nilb) No. of complaints received during the year 98 70c) No. of complaints redressed during the year 98 70d) No. of complaints pending at the end of the year Nil Nil

B. Awards passed by the Banking Ombudsmen

Sr. No.



a) No. of unimplemented awards at the beginning of the year Nil Nilb) No. of awards passed by the Banking Ombudsmen during the year Nil Nilc) No. of awards implemented during the year Nil Nild) No. of unimplemented awards at the end of the year Nil Nil

34



28. Segmental Reporting

In accordance with the RBI guidelines, the Bank has identified two primary segments: Treasury and Corporate Banking. These segments are identified based on nature of services provided, risk and returns, organisational structure of the Bank and the internal financial reporting system.

Treasury operations comprises Derivatives trading, Money market operations, Investments in Bonds, Treasury Bills, Government Securities and Foreign exchange operations. The revenues of this segment consist of interest earned on investments and gains on sale of securities, profits on exchange and derivative transactions. The principal expenses of this segment consist of interest expense on funds borrowed, occupancy expenses, personnel costs, and other direct overheads and allocated expenses.

Corporate Banking primarily comprises funded and non-funded facilities, Cash management activities and Fee-based activities. Revenues of this segment consist of interest earned on loans provided to clients and fees received from non-fund based activities like letters of credit, guarantee etc. The principal expenses of this segment consist of interest expenses on funds borrowed, occupancy expenses, personnel costs, other direct overheads and allocated expenses.

The Bank does not have Retail banking and residual operations hence no segmental disclosures for Retail banking and other banking operations have been made.

(Rs. ‘000)

BusinessSegments

Year Ended March 31, 2011 Year Ended March 31, 2010

Treasury Corporate Banking

Unallocated Total Treasury Corporate Banking

Unallocated Total

Segment Revenue

8,571,258 4,126,652 364,821 13,062,731 7,080,119 3,534,619 - 10,614,738

Segment Result(Operating Profit)

7,347,257 744,349 (589,520) 7,502,086 6,322,592 611,996 (618,373) 6,316,215

Provisionsand Contingencies

44,503 (40,000) - 4,503 (40,056) 1,500 Nil (38,556)

Income Taxes (3,280,235) (2,773,162)

Net Profit 4,226,354 3,504,497

Segment Assets

54,419,941 65,577,590 1,683,123 121,680,654 88,639,870 44,734,232 1,434,903 134,809,005

Total Assets 121,680,654 134,809,005

Segment Liabilities

14,058,261 70,896,677 1,514,059 86,468,997 37,862,635 63,944,243 2,016,824 103,823,702

Capital and Reserves

35,211,657 30,985,303

Total Liabilities

121,680,654 134,809,005

The Bank operates as a single unit in India and as such has no identifiable geographical segments subject to dissimilar risks and returns. Hence, no information relating to geographical segments are presented.

35



29. Subordinated Debt

In accordance with RBI Master Circular on Disclosure in Financial Statements – Notes to Accounts DBOD.BP.BC No. 3/21.04.018/2010-11 dated July 01, 2010 details of Subordinated debt borrowed from Head office swapped in rupees is as under:

(Rs. ‘000)

Month of Allotment Final Maturity Amount as at March 31, 2011

November 2005 October 2011 1,114,875

30. The following disclosure in relation to securitisation activities undertaken by the Bank are made in accordance with the RBI circular on Securitisation of Standard Assets DBOD.No.BP.BC.60/21.04.048/ 2005-06 dated February 1, 2006.

(Rs. ‘000)



1) Total number of loans securitized Nil Nil

2) Book value of loans securitized Nil Nil

3) Sale Consideration (net of interest accrued) Nil Nil

4) Gains/(losses) on securitisation recognized in the Profit and Loss account Nil Nil

5) Form of credit enhancement N.A. N.A.

6) Quantum of credit enhancement Nil Nil

31. Disclosures under Employee Benefits – Revised AS 15

The Bank has classified the various benefits provided to employees as under:-

a) Defined Contribution Plan – Pension Fund

During the year, the Bank has recognized Rs. 49,041 thousand (Previous year Rs. 26,793 thousand) in the Profit and Loss account as Employers' Contribution to Pension Fund. (Refer Schedule 16)

b) Defined Benefit Plan – Contribution to Gratuity Fund

In accordance with Accounting Standard 15 (revised 2005), actuarial valuation was done in respect of the defined benefit plan based on the following assumptions:-



Discount rate (per annum) 8.25% 7.00%

Basic salary increases allowing for price inflation For officers – 7.5% and others – 6%

For officers – 7.5% and others – 6%

Employee Turnover 8.00% 8.00%

Normal retirement age 60 years 60 years

Estimated rate of return on Plan Assets for the year ended March 31, 2011 is 9.36% (Previous year 9.57%) as per balance sheet provided by the trust.

36



(Rs. ‘000)

Reconciliation of Projected Benefit Obligation Year Ended March 31, 2011


Projected Benefit Obligation at the beginning of the year 94,994 112,813

Current Service Cost 11,472 11,472

Interest Cost 6,570 7,522

Contribution by plan participation Nil Nil

Actuarial Losses / (Gains) due to change in assumptions 104,706 (3,127)

Benefits Paid (25,210) (33,686)

Past service cost 5,352 Nil

Amalgamations Nil Nil

Curtailments Nil Nil

Settlements Nil Nil

Projected Benefit Obligation at the end of year 197,884 94,994

(Rs. ‘000)

Plan Asset at Fair Value Year Ended March 31, 2011


Plan Asset at beginning of year 85,147 97,987

Expected Return on Plan Asset 7,543 8,026

Employer Contribution 8,681 Nil

Employee Contribution Nil Nil

Benefits Payment (25,210) (33,686)

Asset Gains / (Losses) 8,577 12,820


Settlements Nil Nil

Ending Asset 84,738 85,147

Total actuarial gain/(loss) recognized immediately (96,129) 15,947

(Rs. ‘000)

Amounts recognized in the Balance Sheet Year Ended March 31, 2011


Projected Benefit Obligation at the end of year 197,884 94,993

Ending Asset 84,737 85,147

Fund Status Asset/(liability) (113,147) (9,846)

Unrecognized past service cost - non vested benefits 1,186 Nil

Asset/(liability) recognized in the Balance Sheet (111,961)* Nil

*the Bank has contributed Rs. 121,166 thousand to the fund on March 25, 2011

37



(Rs. ‘000)

Statement of Profit and Loss Year Ended March 31, 2011


Current Service Cost 11,472 11,472Interest Cost 6,570 7,522Expected return on plan asset (7,543) (8,026)Net Actuarial losses /(gains) recognized in the year 96,129 (15,947)Past Service Cost 4,166 NilEffect of Curtailments Nil NilIncome (-) / Expenses (+) recognized in the statement of Profit and Loss account* 110,794 (4,979)

* Refer Schedule 16

Experience Adjustments (Rs. ‘000)

ParticularsYear Ended




March 31, 2008

Present Value of defined benefit obligation 197,884 94,994 112,813 100,324

Fair Value of plan assets 84,737 85,147 97,987 99,622

Surplus/(deficit) in the plan (113,147) (9,847) (14,826) (702)

Experience Adjustment

Liability

Experience (Gain) / Loss 126,541 (3,127) (2,883) 3,970

Asset

Asset Gain / Loss 8,577 12,820 2,050 2,899

Investment details of plan assets

Majority of the plan assets are invested in Government securities and corporate bonds.

c) Provident Fund The Bank operates a Provident Fund Scheme to which it contributes an amount on monthly basis at a determined rate. The contribution

is remitted to a trust established by the Bank for this purpose and such contribution is charged to Profit and Loss account. All employees of the Bank are eligible to receive benefits under the Provident Fund. Interest is payable to the members of such trust at a rate which shall not be lower than the statutory rate of interest declared by Central Government.

During the year ended March 31, 2011, the Bank has contributed Rs. 42,586 thousand (Previous year Rs. 21,813 thousand). d) Leave Encashment The Bank has provided for sick leave and privilege leave for all its eligible employees, based on valuation carried out by an independent

actuary.

38



Sick Leave The provision for sick leave as at March 31, 2011 is Rs. 26,444 thousand (Previous year Rs. 26,848 thousand). The decrease in

the provision of Rs. 404 thousand is credited to Profit and Loss account for the year ended March 31, 2011 (Previous year Rs. 422 thousand credited to Profit and Loss account.)

Privilege Leave In accordance with Accounting Standard 15 (revised 2005), actuarial valuation was done in respect of the defined benefit plan based

on the following assumptions:-



Discount rate (per annum) 8.25% -

Basic salary increases allowing for price inflation For officers – 7.5%and others – 6% -

Employee Turnover 8.00% -

Normal retirement age 60 years - (Rs. ‘000)

Reconciliation of Projected Benefit Obligation Year Ended March 31, 2011


Projected Benefit Obligation at the beginning of the year Nil Nil

Current Service Cost 116,218 Nil

Interest Cost 9,588 Nil

Contribution by plan participation Nil Nil

Actuarial (Gains) / Losses due to change in assumptions Nil Nil

Benefits Paid (4,624) Nil

Past service cost Nil Nil


Curtailments Nil Nil

Settlements Nil Nil

Projected Benefit Obligation at the end of year 121,182 Nil

39



(Rs. ‘000)

Plan Asset at Fair Value Year Ended March 31, 2011


Plan Asset at beginning of year Nil Nil

Expected Return on Plan Asset Nil Nil

Employer Contribution Nil Nil

Employee Contribution Nil Nil

Benefits Payment Nil Nil

Asset Gains / (Losses) Nil Nil


Settlements Nil Nil

Ending Assets Nil Nil

Total actuarial gain/(loss) recognized immediately Nil Nil

(Rs. ‘000)

Amounts recognized in the Balance Sheet Year Ended March 31, 2011


Projected Benefit Obligation at the end of year 121,182 Nil

Ending Asset Nil Nil

Funded Status asset / (liability) (121,182) Nil

Unrecognized past service cost - non vested benefits Nil Nil

Liability (-) / Asset (+) recognized in Balance Sheet (121,182) Nil

(Rs. ‘000)

Statement of Profit and Loss Year Ended March 31, 2011


Current Service Cost 116,218 Nil

Interest Cost 9,588 Nil

Expected return on plan asset Nil Nil

Net Actuarial (gains)/losses recognized in the year Nil Nil

Past Service Cost Nil Nil

Effect of Curtailments Nil Nil

Income (-) / Expenses (+) recognized in the statement of Profit and Loss account 125,806 Nil

40



32. Related Party Disclosures :

a) Head Office* Bank of America N.A. and its branches

b) Ultimate Controlling Enterprise* Bank of America Corporation

c) Subsidiaries of Head Office• Banc of America Securities (India) Private Limited (BASIL)• Bank of America Singapore Limited• Banc of America Securities Asia Limited

d) Fellow Subsidiaries of Head Office• BA Continuum India Private Limited (formerly known as BA Continuum Solutions Private Limited) • BA Continuum Private Limited (formerly known as Merrill Lynch (India) Technology Services Private Limited)• DSP Merrill Lynch Limited • DSP Merrill Lynch Capital Limited • DSP Merrill Lynch Securities Trading Limited (merged with DSP Merrill Lynch Limited w.e.f. April 1, 2010)• DSP Merrill Lynch Trust Services Limited • Merrill Lynch Capital Markets ESPANA, S.A., S.V.• Banc of America Securities LLC (merged with Merrill Lynch, Pierce, Fenner and Smith, Inc. w.e.f. November 1, 2010)

e) Key Management Personnel**Mrs. Kaku Nakhate, Chief Executive Officer (w.e.f. June 25, 2010)Mr. Kevan Watts, Chief Executive Officer (till June 24, 2010)

41



Transactions with related parties are in the ordinary course of business (Current year figures are shown in bold. Previous year’s figures are shown in brackets):

(Rs. ‘000)Items/Related Party Subsidiaries of Head Office Fellow Subsidiaries of Head Office Transactions during the yearSales/Redemption of Securities 15,094,014

(23,473,485)161,242

(698,968)Purchase of Securities 1,788,062

(12,557,040)Nil

(Nil)Interest rate Swaps – Novated Nil

(Nil)Nil

(1,765,500)Term Deposits (note 1) Nil

(Nil)52,643,987

(37,439,060)Documentary Collections Nil

(Nil)99,747

(355,607)Guarantees issued Nil

(Nil)10,168(8,377)

Interest Paid Nil(Nil)

366,405(161,888)

Commission Received Nil(Nil)

757(1,462)

Other Charges Received Nil(5)

155(3)

Rendering of Services 3,083 (38,357)

67,402(59,424)

Receipt of Services Nil(Nil)

118,780(35,396)

Outstanding at the year endTerm Deposits (note 1) Nil

(Nil)10,633,679(5,819,792)

Bank Balances 31,107(61,210)

2,633,335(1,973,071)

Other Assets 389(184)

12,065(26,683)

Other Liabilities Nil(Nil)

54,028(1,643)

Guarantees Nil(Nil)

29,564(19,396)

Maximum outstanding during the yearTerm Deposits (note 1) Nil

(Nil)13,443,987

(11,519,792)Guarantees Nil

(Nil)29,564

(19,396)

Note 1: Includes deposits which are lien marked.

42



Of the above items, transactions in excess of 10% of the related party transactions are as under:

Particulars Subsidiaries of Head Office# Fellow Subsidiaries of Head Office#Sales/Redemption of SecuritiesBank of America Singapore Limited 15,094,014

(21,791,159)NIL

(NIL)DSP Merrill Lynch Capital Limited NIL

(NIL)161,242

(698,968)Purchase of SecuritiesBank of America Singapore Limited 1,788,062

(11,672,810)NIL

(NIL)Interest rate Swaps – NovatedDSP Merrill Lynch Securities Trading Limited NIL

(NIL)NIL

(1,765,500)Term DepositsBA Continuum India Private Limited NIL

(NIL)46,210,200(37,139,060)

Documentary CollectionsBA Continuum India Private Limited NIL

(NIL)37,229

(355,607)BA Continuum Private Limited NIL

(NIL)62,519

(NIL)Guarantees issuedBA Continuum India Private Limited NIL

(NIL)1,381


(NIL)8,787

(NIL)Interest PaidBA Continuum India Private Limited NIL

(NIL)337,644

(160,093)Commission ReceivedBA Continuum India Private Limited NIL

(NIL)230


(NIL)527(NIL)

Other Charges ReceivedDSP Merrill Lynch Limited NIL

(NIL)155(NIL)

Banc of America Securities (India) Private Limited

NIL(5)

NIL(NIL)

Rendering of ServicesBA Continuum India Private Limited NIL

(NIL)27,494

(44,608)DSP Merrill Lynch Limited NIL

(NIL)39,907

(14,815)Banc of America Securities (India) Private Limited

2,711(8,782)

NIL(NIL)

Banc of America Securities Asia Limited 372(23,768)

NIL(NIL)

Banc of America Securities LLC NIL(NIL)

NIL(5,807)

Receipt of ServicesDSP Merrill Lynch Limited NIL

(NIL)118,780(35,396)

43



* As per the RBI circular DBOD.BP.BC.No.3/21.04.018/2010-11 dated July 1, 2010 on ‘Disclosure in Financial Statements – Notes to Accounts’, the Bank has not disclosed details pertaining to the related party disclosure where there is only one entity/person in any category of related parties.

** Transactions details of key management personnel have not been given and only the relationship with the related party is disclosed keeping in view secrecy and confidentiality clauses in accordance with the Guidelines on Compliance with the Accounting Standards (AS) by Banks Circular No.DBOD.BP.BC.89/21.04.018/2002-03 dated March 29, 2003.

# As per Accounting Standards Interpretation (‘ASI’) 13, a specific related party transaction is disclosed as material related party transaction, wherever it exceeds 10% of total related party transactions in that category.

33. Leases

Information in respect of commercial and residential branch premises taken on operating lease of non cancellable nature is as under:

(Rs. ‘000)

Sr. No.

Future minimum lease payments As at March 31, 2011


1) Up to 1 year Nil 64,4842) More than 1 year and up to 5 years Nil Nil3) More than 5 years Nil Nil

• The lease payments, recognized in the Profit and Loss account: Rs. 139,489 thousand (Previous year Rs. 126,799 thousand).• The Bank has not sub-leased any part of the above premises.• There are no lease payments recognized in the statement of Profit and Loss for contingent rent.• The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.• There are no undue restrictions or onerous clauses in the agreements.

34. Other Fixed Assets (including furniture & fixtures)

Other Fixed Assets under Schedule 10(II) includes software, the details are given below:

(Rs. ‘000)

Particulars Current Year Previous YearAt Cost on March 31, of preceding year 43,426 23,238Additions during the year 23,307 21,257Deductions during the year 435 1,069Accumulated amortization 31,637 22,304Closing balance 34,661 21,122

35. Provisions, Contingent Liabilities and Contingent Assets

Contingent Liabilities stated in Schedule 12 are as under:

a) Claims against the Bank not acknowledged as Debts

It includes claims/demands raised by Income tax authorities which are disputed by the Bank.

44



b) Liability on account of forward exchange and derivative contracts

The Bank enters into forward exchange contracts, options, currency swaps, currency futures and interest rate swaps with interbank participants on its own account and for its customers.

Forward exchange contracts are commitments to buy or sell foreign currency at a future date at a contracted rate. Swaps are commitments to exchange cash flows by the way of interest/principal in one currency against another, based on predetermined rates.

Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts that are recorded as contingent liabilities are used for the calculation of interest.

c) Guarantees given on behalf of Constituents, Acceptances, Endorsements and other obligations

As a part of its corporate banking activities, the Bank issues documentary credit and guarantees on behalf of its customers. Documentary credits such as letters of credit enhance the credit standing of the customer of the Bank. Guarantees generally represent irrevocable assurances that the Bank will make payment in the event of customer failing to fulfill its financial or performance obligations.

d) Other items for which the Bank is contingently liable

• Committed Lines of Credit • Forward sale and purchase of securities

Movement in Provision for Contingent Liabilities (Rs. ‘000)

Particulars As at March 31, 2011 As at March 31, 2010Opening Provision 21,127 21,539Additions Nil NilReversals 384 412Closing Provision 20,743 21,127

36. Floating Provisions (Rs. ‘000)

Sr. No.

Particulars As at March 31, 2011 As at March 31, 2010

1) Opening balance in the floating provisions account Nil Nil2) The quantum of floating provisions made in the accounting year Nil Nil3) Amount of drawdown made during the accounting year Nil Nil4) Closing balance in the floating provision account Nil Nil

37. Additional disclosure on call money as required for Primary Dealers vide RBI Master circular on Operational Guidelines to Primary Dealers no. IDMD.PDRD. 01 /03.64.00 / 2010-11 dated July 1, 2010.

(Rs. Crores)Year Ended March 31, 2011 Average* PeakBorrowings 220 545Lendings 214 500

(Rs. Crores)Year Ended March 31, 2010 Average* PeakBorrowings 317 800Lendings 196 500

* Average is calculated in respect of days on which balance was outstanding.

45



38. Micro, Small and Medium Enterprises Development Act, 2006 There are no delays in payments to micro and small enterprises as required to be disclosed under The Micro, Small and Medium

Enterprises Development Act, 2006. The determination has been made to the extent such parties were identified based on the information available.

39. The Bank is not into the business of Bancassurance and has not received any fees/remuneration in respect of the same during the financial year ended March 31, 2011 (Previous year Rs. Nil).

40. Concentration of Deposits, Advances, Exposures and NPAs

1) Concentration of Deposits(Rs. ‘000)


As atMarch 31, 2010

Total Deposits of twenty largest depositors 33,951,651 31,814,343Percentage of Deposits of twenty largest depositors to Total Deposits of the bank 56.67% 57.95%

2) Concentration of Advances

(Rs. ‘000)Particulars As at

March 31, 2011As at

March 31, 2010Total Advances to twenty largest borrowers 58,550,152 44,325,059Percentage of Advances to twenty largest borrowers to Total Advances of the bank 56.48% 56.90%

3) Concentration of Exposures(Rs. ‘000)



Total Exposure of twenty largest borrowers/customers 58,550,152 44,623,633Percentage of Exposure to twenty largest borrowers/customers to Total Exposure of the bank on borrowers/customers 56.48% 56.34%

4) Concentration of NPAs(Rs. ‘000)



Total Exposure of top four NPA accounts * 6,978 6,978

* Only one account is NPA.

I. Sector-wise NPAs

Sr. No.

Sector Percentage of NPAs to Total Advances in that sector as at March 31, 2011

1 Agriculture and allied activities Nil2 Industry – Engineering Sector 0.12%3 Services Nil4 Personal loans Nil

Note: The NPA is disclosed under the category ‘Engineering’ under the DSB return on Asset Quality - IV submitted to RBI on a monthly basis.

46



II. Overseas Assets, NPAs and Revenue(Rs. ‘000)

Particulars As at March 31, 2011 Total Assets NilTotal NPAs NilTotal Revenue Nil

III. Off-balance sheet SPVs (Domestic & Overseas) sponsored - NIL 41. Provision Coverage ratio

As at March 31, 2011 Rs. ‘000

1 2 3 4 5Gross NPA @ plus

Technical / Prudential Write-off*

Specific Provisions held including provisions for Diminution in fair value

of the restructured accounts classified as NPAs plus Technical / Prudential

write-off*

Ratio of (4) to (3)

1. Sub-Standard Advances Nil Nil Nil

2. Doubtful Advances (a+b+c) Nil Nil Nil

a < 1 year Nil Nil Nil

b 1-3 years Nil Nil Nil

c >3 years Nil Nil Nil

3. Advances classified as Loss Assets 6,978 6,978 100%

4. Total 6,978 6,978 100%

5. Floating Provisions for Advances (only to the extent they are not used as Tier II Capital)

Nil

6. DICGC/ECGC claims received and held pending adjustments

Nil

7. Part payment received and kept in Suspense Account for any other similar account

Nil

8. Total(Sum of column 4 of Row 4 + Row 5 + Row 6 + Row 7)

6,978

9. Provision Coverage Ratio{(8 / Total of column 3 of Row 4)*100}

100%

@ Gross NPAs to be computed in terms of the Master circular on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances DBOD.BP.BC.46/21.04.048/2009-10 dated September 24, 2009

42. Previous year figures have been regrouped and reclassified wherever necessary to conform to current year’s presentation.__________________________________________________________________________________________________________________

For BANK OF AMERICA N.A. - INDIA BRANCHES KAKU NAKHATE KUMAR SHAHCHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER

MUMBAI : June 28, 2011 MUMBAI : June 28, 2011

Documents

Financial Results 2010-2011 - Bank of America Merrill Lynch