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CONTENTS

ManagingDirector&CEO’sLettertoShareholders3

BoardofDirectors4

SnapShotofKeyFinancialIndicators:2007-20115

Highlights6

Directors’Report7

Management’sDiscussion&Analysis16

Auditors’Report29

BalanceSheet30

ProtandLossAccount31

CashFlowStatement32

SchedulesFormingPartofBalanceSheet34

SchedulesFormingPartofProtandLossAccount40

SignicantAccountingPolicies41

NotestoAccounts

49

Auditors’CerticateonCorporateGovernance86

CorporateGovernance87

Auditors’ReportonConsolidatedFinancialStatements109

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ConsolidatedFinancialStatements110

DisclosuresundertheNewCapitalAdequacyFramework151(BaselIIGuidelines)

Bank’sNetwork:ListofCentres169

1

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MANAGINGDIRECTOR&CEO’SLETTERTOTHESHAREHOLDERS

TheBankhasreportedanothersuccessfulperformance,underpinnedbyhealthygrowthofboth

businessandrevenues.Wecontinuetohaveafairlywell-diversiedcustomerbasethatspans

boththeretailandcorporatebankingspace.ThisyeartheBankhasexpandeditsreachacross

thecountry,adding407newbranchesand1,977ATMs.Inadditiontocreatinginfrastructural

capabilitiesforthefuture,wehavelaunchedseveralotherinitiativestofulllproductand

serviceneedsofourcustomersincludingthelaunchofanonline-brokingportal

throughour

wholly-ownedsubsidiary,AxisSecuritiesandSalesLimited.Theinfrastructurebusinesssizehas

grownwell,inlinewithourexpectationsandthisaugurswellforthefuture,infrastructure

beingcriticaltothecountry’sgrowth.

WiththeAxisfamilygrowingmanifoldovertheyears,aneedwasfelttoconstructacorporate

ofcewithadistinctidentityandonewhichwouldhouseouremployeesinacontemporary,yet

environment-friendlyandwholesomeworkplace.TherelocationtoAxisHousehasfullledthis

aspiration.

Theeconomicoutlookforthecountrycontinuestobepromisingdespiteconcernsaroundrising

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Website:www.axisbank.com

CorporateOfceAxisHouse,BombayDyeingMillsCompound,PandurangBudhkarMarg,Worli,Mumbai–400025Tel.No.:022-24252525/43252525andFaxNo.:022-432518004

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SNAPSHOTOFKEYFINANCIALINDICATORS:2007-2011

( incrores)

FINANCIALHIGHLIGHTS2006-20072007-20082008-20092009-20102010-2011CAGR(5Years)

TotalDeposits58,785.6087,626.22117,374.11141,300.22189,237.8036.38%

-SavingBankDeposits12,125.8819,982.4125,822.12

33,861.8040,850.3138.33%

-CurrentAccountDeposits11,304.3120,044.5824,821.6132,167.7436,917.0935.88%

TotalAdvances36,876.4859,661.1481,556.77104,340.95142,407.8344.87%

-RetailAdvances8,927.5413,591.6816,051.7820,820.7327,759.2333.73%

TotalInvestments26,897.1633,705.1046,330.3555,974.8271,991.6227.31%

Shareholders Funds3,393.238,768.5010,213.5916,044.4518,998.8345.92%

TotalAssets/Liabilities73,257.22109,577.85147,722.05180,647.85242,713.3737.31%

NetInterestIncome1,468.332,585.353,686.215,004.496,562.9943.51%

OtherIncome1,010.111,795.492,896.883,945.784,632.1344.72%

OperatingRevenue2,478.444,380.846,583.098,950.2711,195.1244.00%

OperatingExpenses1,214.592,154.922,858.213,709.724,779.4342.48%

OperatingProt1,263.852,225.923,724.885,240.556,415.6945.21%

ProvisionsandContingencies604.821,154.891,909.52

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2,726.023,027.2042.86%

NetProt659.031,071.031,815.362,514.533,388.4947.52%

FINANCIALRATIOS2006-20072007-20082008-20092009-20102010-2011

EarningsPerShare(Basic)(in )23.5032.1550.6165.7882.95

BookValue(in )120.50245.14284.50395.99462.77

ReturnonEquity21.84%16.09%19.93%19.89%20.13%

ReturnonAssets1.10%1.24%1.44%1.67%1.68%

CapitalAdequacyRatio(CAR)11.57%13.73%13.69%15.80%12.65%

TierICapital(CAR)6.42%10.17%9.26%

11.18%9.41%

DividendPerShare(in )4.506.0010.0012.0014.00

DividendPayoutRatio22.58%23.49%23.16%22.57%19.78%

5

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HIGHLIGHTS

Protaftertaxup34.76%to 3,388.49crores

NetInterestIncomeup31.14%to 6,562.99crores

Fee&OtherIncomeup32.39%to 4,135.16crores

Depositsup33.93%to 189,237.80crores

DemandDepositsup17.78%to 77,767.40crores

Advancesup36.48%to 142,407.83crores

RetailAssetsup33.32%to 27,759.23crores

Networkofbranchesandextensioncountersincreasedfrom983to1,390

TotalnumberofATMswentupfrom4,293to6,270

NetNPAratioasapercentageofnetcustomerassetsdownto0.26%from0.36%

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Earningspershare(Basic)increasedfrom 65.78to 82.95

ProposedDividendupfrom120%to140%

CapitalAdequacyRatiostoodat12.65%asagainsttheminimumregulatorynormof9%

6

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DIRECTORS’REPORT:2010-11

TheBoardofDirectorsispleasedtopresenttheSeventeenthAnnualReportoftheBanktogetherwiththeAuditedStatementofAccounts,Auditors’ReportandthereportonbusinessandoperationsoftheBankforthenancialyearended31March,2011.

FINANCIALPERFORMANCE

Thenancialhighlightsfortheyearunderreviewarepresentedbelow:( incrores)

PARTICULARS2010-112009-10GrowthDeposits189,237.80141,300.2233.93%OutofwhichSavingsBankDeposits40,850.3133,861.8020.64%CurrentAccountDeposits36,917.0932,167.7414.76%Advances142,407.83104,340.9536.48%Outofwhich

RetailAdvances27,759.2320,820.7333.32%Non-retailAdvances114,648.6083,520.2237.27%TotalAssets/Liabilities242,713.37180,647.8534.36%NetInterestIncome6,562.995,004.4931.14%OtherIncome4,632.133,945.7817.39%OutofwhichTradingProt(1)496.97822.38(39.57%)

Fee&otherincome4,135.163,123.4032.39%OperatingExpensesexcl.depreciation4,489.843,475.4029.19%Protbeforedepreciation,provisionsandtax6,705.285,474.8722.47%Depreciation289.59234.3223.59%ProvisionforTax

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1,542Bankearnsfeeincomefromadiverseset254936ofproductsandbusinessessuchasclient-74basedmerchantforeignexchangetrade,servicechargesfromaccountmaintenance,2006-072007-082008-092009-102010-112006-072007-082008-092009-102010-11transactionbankingincludingcash

managementservices,syndicationandplacementfees,processingfeesfromloansandcommissiononnon-fundedproductssuchaslettersofcreditandbankguarantees,inter-changefeesonATM-sharingarrangementsandfeeincomefromthedistributionofthird-partypers

onalinvestmentproducts.Duringtheyear,proprietarytradingprotsfell39.57%to 496.97croresfrom 822.38croreslastyear,primarilyduetoadversemarketconditionsinthedebtandequitymarkets.Miscellaneousincomewasbuoyant,rising73.75%mainlyduetostrongrecoveriesofloansandderivativereceivableswritten-offinpreviousyears.Duringtheyear,suchrecoveriesamountedto 325.22crorescomparedto 174.43croreslastyear.

Duringtheyear,theoperatingrevenueoftheBankincreased25.08%to 11,195.12croresfrom 8,950.27croreslastyear.Thecoreincomestreams(NII,feeandmiscellaneousincome)constituted95.56%oftheoperatingrevenue,reecting

thestabilityandsustainabilityoftheBank’searnings.Operatingexpensesincreasedby28.84%to 4,779.43croresfrom 3,709.72croreslastyear,onthebackofthecontinuinggrowthoftheBank’snetworkandinfrastructurerequiredforsupportingexistingandnewbusinesses.Duringtheyear,theCost:Incomeratiowas42.69%comparedto41.45%lastyear.

Duringtheyear,theoperatingprotoftheBankincreased22.42%to 6,415.69croresfrom 5,240.55croreslastyear.Duringthisperiod,provisions(excludingprovisionsfortax)chargedtotheProt&Lossaccountwere 1,280.03crorescomparedto 1,389.19croreslastyear.Ofthis,provisionsforloanl

osseswere 955.12crorescomparedto 1,357.04croreslastyear,whiletheprovisionforstandardassetswas 166.16crores.TheBankaccelerateditsprovisioningrequirementsinsomeportfoliosasameasureofprudence,increasingtheoverallprovisioncoverage.TheBankalsoprovided 15.06crorescomparedto 56.47croreslastyearagainstrestructuredassets.During2010-11,theBankrestructuredloansof 4048

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ii.LifeInsuranceCorporationofIndia9.56iii.GeneralInsuranceCorporationandfourPSUInsuranceCompanies3.97iv.OverseasInvestorsincludingFIIs/OCBs/NRIs37.89v.ForeignDirectInvestment(GDRissue)9.19vi.OtherIndianFinancialInstitutions/MutualFunds/Banks5.12vii.Others10.59Total100.00

TheBank’ssharesarelistedontheNSEandtheBSE.TheGDRsissuedbytheBankarelistedontheLondonStockExchange(LSE).TheBondsissuedbytheBankundertheMTNprogrammearelistedontheSingaporeStockExchange.Thelistingfeesrelatingtoallstockexchangesforthecurrentyearhavebeenpaid.Witheffectfrom26March,2001,thesharesoftheBankhavebeenincludedandtradedintheBSE’sGroup‘A’stocks.Witheffectfrom27March,2009,theBank’sshareshavebeenincludedandtradedaspartofthemainNIFTYIndexofthe

NSE.Earlier,thesharesoftheBankwerepartoftheNIFTYJuniorIndexoftheNSE.

DIVIDEND

InviewoftheoverallperformanceoftheBankandtheobjectiveofrewardingshareholderswithcashdividendswhileretainingcapitaltomaintainahealthycapitaladequacyratiotosupportfuturegrowth,theBoardofDirectorshasrecommendedahigherdividendof 14.00perequityshare,comparedto 12.00perequitysharedeclaredfor2009-10.ThisdividendshallbesubjecttotaxondividendtobepaidbytheB

ank.ThisincreasereectsourcondenceintheBank’sabilitytoconsistentlygrowearningsovertime.

BOARDOFDIRECTORS

Duringtheyear,somechangeshavetakenplaceinthecompositionoftheBoardofDirectors.ShriM.S.SundaraRajan,formerChairmanandManagingDirectorofIndianBank,wasappointedasanAdditionalIndependentDirectorwitheffectfrom8June,2010.Heresignedwitheffectfrom22February,2011.ShriS.K.Roongta,formerChairmanofSAIL,wasappointedasanAdditionalIndependentDirectorwitheffectfrom15July,2010.ShriS.K.Chakrabarti,formerExecutive

Director(RetailBanking,SMEandAgri.)oftheBankwasappointedastheDeputyManagingDirectoroftheBankwitheffectfrom27September,2010.ShriPrasadR.Menon,formerManagingDirector,TataPowerLimited,wasappointedasanAdditionalIndependentDirectorwitheffectfrom9October,2010.ShriR.N.Bhattacharyya,formerIPSofcerandnomineeoftheSpeciedUndertakingoftheUnitTrustofIndia(SUUTI)wasappointedasanAdditionalDirectorwitheffectfrom17January,2011.

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ttherespectiveregisteredofcesofthevecompanies.InlinewiththeAccountingStandard21(AS21)issuedbytheInstituteofCharteredAccountantsofIndia,theconsolidatednancialresultsoftheBankalongwithitssubsidiariesfortheyearended31March,2011areenclosedasanAnnexuretothisreport.

PROPOSEDACQUISITIONOFENAMSECURITIESPVT.LTD.BYAXISSECURITIESANDSALESLTD.

Attheirmeetingsheldon17November,2010,theBoardofDirectorsoftheBank,EnamSecuritiesPrivateLimited(ESPL)andAxisSecuritiesandSalesLimited(ASSL),awholly-ownedsubsidiaryoftheBank,approvedtheacquisitionofcertainbusinessesundertakenbyESPLdirectlyandthroughitswhollyownedsubsidiaries,byASSLbywayofademerger.ItisenvisagedthatthesebusinesseswillbetransferredtoASSL,pursuanttoaSchemeofArrangement,asmaybeapprovedbytherelevantHighCourtsunderSections391to394andotherrelevantprovisionsoftheCompaniesAct,1956andsubjecttoreceiptofnecessaryrequisiteapprovals.TheappointeddateforthepurposeoftheDemergerundertheSchemeshallbe1April,2010.ThevaluationofESPLbusinesswasassessedat 2,067croresinconsiderationforthedemerger,theBankwill

issuesharesintheratioof5.7equitysharesoftheBank(aggregating13,782,600equityshares)ofthefacevalueof 10forevery1equityshare(aggregating2,418,000equityshares)of 10eachheldbyshareholdersofESPL.

EMPLOYEESTOCKOPTIONPLAN(ESOP)

TheBankhasinstitutedanEmployeeStockOptionSchemetoenableitsemployeesandtheemployeesofitssubsidiariesincludingwhole-timeDirectors,toparticipateinthefuturegrowthandnancialsuccessoftheBank.UndertheScheme40,517,400optionscanbegrantedtoemployees.TheemployeestockoptionschemeisinaccordancewiththeSecurities

andExchangeBoardofIndia(EmployeeStockOptionandEmployeeStockPurchaseScheme)Guidelines,1999.Theeligibilityandnumberofoptionstobegrantedtoanemployeeisdeterminedonthebasisoftheemployee’sworkperformanceandisapprovedbytheBoardofDirectors.

TheBank’sshareholdersapprovedplansfortheissuanceofstockoptionstoemployeesinFebruary2001,June2004,June2006,June2008andJune2010.Underthersttwoplansanduptothegrantmadeon29April,2004,theoptionconversionpricewassetattheaveragedailyhigh-lowpriceoftheBank’sequitysharestradedduringthe52weeksprecedingthedateofgrantattheStockExchangewhichhashadthemaximumtrad

ingvolumeoftheBank’sequityshareduringthatperiod.UnderthethirdplanandwitheffectfromthegrantmadebytheBankon10June,2005,thepricingformulahasbeenchangedtotheclosingpriceonthedayprevioustothegrantdate.TheRemunerationandNominationCommitteegrantedoptionsundertheseplansontenoccasions:1,118,925during2000-01,1,779,700during2001-02,2,774,450during2003-04,3,809,830during2004-05,5,708,240during2005-06,4,695,860during2006-07,6,729,340during2007-08,2,677,355during2008-09,4,413,990during2009-10

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and2,915,200during2010-11.Theoptions11

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granted,whicharenon-transferable,vestatratesof30%,30%and40%oneachofthreesuccessiveanniversariesfollowingthegrant,subjecttostandardvestingconditions,andmustbeexercisedwithinthreeyearsofthedateofvesting.Asof31March,2011,21,709,978optionshadbeenexercisedand11,122,518optionswereinforce.

OtherstatutorydisclosuresasrequiredbytherevisedSEBIguidelinesonESOPsaregivenintheAnnexuretothisreport.

CORPORATEGOVERNANCE

TheBankiscommittedtoachievingthehigheststandardsofcorporategovernanceanditaspirestobenchmarkitselfwithinternationalbestpracticesinthisregard.ThecorporategovernancepracticesfollowedbytheBankareenclosedasanAnnexuretothisreport.

TheBankhasadoptedamajorpartoftherecommendationscontainedintheCorporateGovernanceVoluntaryGuidelines2009issuedbytheMinistryofCorporateAffairsandisexaminingthepossibilityofimplementingtheremainingrecommendations.

DIRECTORS’RESPONSIBILITYSTATEMENT

TheBoardofDirectorsherebydeclaresandconrmsthat:

i.Theapplicableaccountingstandardshavebeenfollowedinthepreparationoftheannualaccountsandproperexplanationshavebeenfurnished,relatingtomaterialdeparture

s.

ii.Accountingpolicieshavebeenselected,andappliedconsistentlyandreasonably,andprudentjudgementsandestimateshavebeenmadesoastogiveatrueandfairviewofthestateofaffairsoftheBankandoftheProt&LossoftheBankforthenancialyearended31March,2011.

iii.Properandsufcientcarehasbeentakenforthemaintenanceofadequateaccountingrecords,inaccordancewiththeprovisionsoftheCompanies(Amendment)Act,2000,forsafeguardingtheassetsoftheBankandforpreventinganddetectingfraudandotherirregularities.

iv.Theannualaccountshavebeenpreparedonagoingconcernbasis.

v.TheBankhasinplaceasystemtoensurecomplianceofalllawsapplicabletotheBank.

STATUTORYDISCLOSURE

ConsideringthenatureofactivitiesoftheBank,theprovisionsofS

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ection217(1)(e)oftheCompaniesAct,1956relatingtoconservationofenergyandtechnologyabsorptiondonotapplytotheBank.TheBankis,however,constantlypursuingitsgoaloftechnologicalupgradationinacost-effectivemannerfordeliveringqualitycustomerservice.

ThestatementcontainingparticularsofemployeesasrequiredunderSection217(2A)oftheCompaniesAct,1956andtherulesthereunder,isgiveninanAnnexureappendedheretoandformspartofthisreport.IntermsofSection219(1)(iv)oftheAct,theReportandAccountsarebeingsenttotheshareholdersexcludingtheaforesaidAnnexure.AnyshareholderinterestedinobtainingacopyoftheAnnexuremaywritetotheCompanySecretaryattheRegisteredOfceoftheBank.

AUDITORS

M/sDeloitteHaskins&Sells,CharteredAccountants,StatutoryAuditorsoftheBankwillretireontheconclusionoftheSeventeenthAnnualGeneralMeetingandareeligibleforre-appointment,subjecttotheapprovalofReserveBankofIndiaandoftheshareholders.AsrecommendedbytheAuditCommitteeoftheBoard,theBoardofDirectorshasproposedtheappointmentofM/sDeloitteHaskins&Sells,CharteredAccountantsas

StatutoryAuditorsforthenancialyear2011-12.TheshareholdersarerequestedtoconsidertheirappointmentontheremunerationtobedecidedbytheAuditCommitteeoftheBoard.

ACKNOWLEDGEMENTS

TheBoardofDirectorsplacesonrecorditsgratitudetotheReserveBankofIndia,othergovernmentandregulatoryauthorities,nancialinstitutionsandcorrespondentbanksfortheirstrongsupportandguidance.TheBoardacknowledgesthesupportoftheshareholdersandalsoplacesonrecorditssincere

thankstoitsvaluedclientsandcustomersfortheircontinuedpatronage.TheBoardalsoexpressesitsdeepsenseofappreciationtoallemployeesoftheBankfortheirstrongworkethic,excellentperformance,professionalism,teamwork,commitment,andinitiativewhichhasledtotheBankmakingcommendableprogressintoday’schallengingenvironment.

ForandonbehalfoftheBoardofDirectors

Place:MumbaiAdarshKishore12Date:22ndApril,2011

Chairman

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ANNEXURE

STATUTORYDISCLOSURESREGARDINGESOP(FORMINGPARTOFTHEDIRECTORS’REPORTFORTHEYEARENDED31MARCH,2011)

ESOS2000-01ExercisePriceOptionsOptions

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OptionsTotalOptionsOptionsMoney(Grantdate)( )GrantedExercisedlapsed/(inforce)Vestedrealisedby&SharescancelledAsonexerciseofAllotted*March31,2011options( inlacs)

24Feb.200138.631,118,9251,036,96981,956--400.58

28Feb.200229.681,779,7001,668,835110,865--495.31

6May200339.772,774,4502,470,907303,543--982.68

29April200497.623,809,8303,288,363521,467--3,210.10

10June2005232.105,708,2404,559,337911,259237,644237,64410,582.22

17April2006319.004,695,8603,569,590591,788534,482534,48211,386.99

17April2007468.906,729,3403,892,682866,1821,970,4761,970,47618,252.79

21April2008824.402,677,355598,327130,9731,948,055987,9154,932.61

20April2009503.254,263,990624,968226,3613,412,661703,7833,145.15

13July2009738.25100,000--100,00030,000-

7Sept.2009907.2550,000--50,00015,000-

20April20101,159.302,723,500-43,0002,680,500--

7June20101,245.4510,000--10,000--

8June20101,214.80181,700-

3,000178,700--

Total36,622,89021,709,9783,790,39411,122,5184,479,30053,388.43

*One(1)sharewouldariseonexerciseofone(1)stockoption

Otherdetailsareasunder:

PricingFormulaFixedPric

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ei.e.Theaveragedailyhigh–lowpriceofthesharesoftheBanktradedduringthe52weeksprecedingthedateofgrantatthatstockexchangewhichhashadthemaximumtradingvolumeoftheBank’sshareduringthatperiod.

Foroptionsgrantedonandafter10June,2005,theexercisepriceconsideredistheclosingmarketpriceasonthedayprecedingthedateofthegrantatthatstockexchangewhichhashadthemaximumtradingvolumeoftheBank’sshare.

VariationintermsofESOPNone

Detailsofoptionsgranted:

EmployeewisedetailsofgrantstoSeniormanagerialManagingDirector&CEO:275,000optionspersonnelDeputyMan

agingDirector:270,380options

Employeeswhoweregranted,duringanyoneyear,ManagingDirector&CEO:175,000optionsoptionsamountingto5%ormoreoftheoptionsgrantedduringtheyear

Identiedemployeeswhoweregrantedoptions,duringNoneanyoneyear,equalorexceeding1%oftheissuedcapital(excludingoutstandingwarrantsandconversions)oftheBankunderthegrant

13

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DilutedEarningsPerSharepursuanttoissueofshareson 81.61pershareexerciseofoptionscalculatedinaccordancewithAccountingStandard(AS)20‘EarningsPerShare’

WeightedaverageexercisepriceofOptionswhose:

ExercisepriceequalsmarketpriceWeightedaverageexercisepriceofthestockoptionsgrantedduring

theyearis 1,163.05.

ExercisepriceisgreaterthanmarketpriceNil

ExercisepriceislessthanmarketpriceNil

WeightedaveragefairvalueofOptionswhose:

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ExercisepriceequalsmarketpriceWeightedaveragefairvalueofthestockoptionsgrantedduringtheyearis 485.98.

ExercisepriceisgreaterthanmarketpriceNil

ExercisepriceislessthanmarketpriceNil

FairValueRelatedDisclosure

Increaseintheemployeecompensationcostcomputed 107.97croresatfairvalueoverthecostcomputedusingintrinsiccostmethod

NetProt,iftheemployeecompensationcosthadbeen 3,280.52crorescomputedatfairvalue

BasicEPS,iftheemployeecompensationcosthadbeen

80.31persharecomputedatfairvalue

DilutedEPS,iftheemployeecompensationcosthadbeen 79.01persharecomputedatfairvalue

SignicantAssumptionsusedtoestimatefairvalue

Riskfreeinterestrate5.98%-7.17%

Expectedlife

2-4years

ExpectedVolatility54.72%-61.66%

DividendYield1.24%-1.32%

PriceoftheunderlyingshareinthemarketatthetimeofDuringtheyear,threegrantshavebeenmadeatthefollowingprices:optiongrant 1,159.30

1,245.45 1,214.80

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STATEMENTPURSUANTTOSECTION212OFTHECOMPANIESACT,1956RELATINGTOSUBSIDIARYCOMPANIES

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Sr.NameoftheFinancialNumberofExtentofNetaggregateamountNetaggregateamountNo.Subsidiaryyearendequitysharesinterestofofprots/(losses)ofofprots/(losses)oftheCompanyoftheheldbyAxisAxisBankinthesubsidiarysofarsubsidiarysofarasitsubsidiaryBankand/orthecapitalofasitconcernstheconcernsthemembersitsnomineesthesubsidiarymembersofAxisBankofAxisBankLtd.andisinsubsidiaryLtd.andisnotdealtdealtwithorprovidedason31withintheaccountsofforintheaccountsofMarch,2011AxisBankLtd.fortheAxisBankLtd.forthenancialyearendednancialyearended31March,201131March,2011( inthousands)( inthousands)

1.AxisSecurities31-3-201180,000,000100%(81,719)NilandSalessharesofLimited 10.00eachfullypaidup

2.AxisPrivate31-3-201115,000,000100%24,259NilEquityLimitedsharesof 10.00eachfullypaidup

3.AxisTrustee31-3-20111,500,000100%

81,008NilServicessharesofLimited 10.00eachfullypaidup

4.AxisMutual31-3-201150,000shares100%219NilFundTrusteeof 10.00eachLimitedfullypaidup

5.AxisAsset31-3-2011124,000,000100%(454,449)NilManagementsharesof

Company 10.00eachLimitedfullypaidup

ForAxisBankLtd.

AdarshKishoreChairman

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R.H.PatilR.B.L.VaishShikhaSharmaDirectorDirectorManagingDirector&CEO

SushilKumarRoongtaS.B.MathurS.K.ChakrabartiDirectorDirectorDeputyManagingDirector

P.J.OzaSomnathSenguptaCompanySecretaryExecutiveDirector&CFO

Date:22ndApril,2011

Place:Mumbai

15

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MANAGEMENT’SDISCUSSIONANDANALYSIS

MACRO-ECONOMICENVIRONMENT

TheIndianeconomyhasemergedrapidlyfromtheslowdowncausedbytheglobalnancialcrisisof2007-09andremainsoneofthefastestgrowingeconomiesoftheworld.Afterdippingto6.8%in2008-09,GDPgrowthhadrecoveredsharplyto8%andisprojectedtoremainabovethislevelin2010-11.Economicandnancialeventsovertheyear,however,haveincreasedconcernsaboutthesustainabilityofthegrowthmomentum.

Ontheglobalfront,althoughsomeofthedevelopedeconomiesseemedtohaverecoveredquicklyinthelatterhalfof

2010,theynowfacegrowingheadwinds,whichwillprobablyleadtoamoderationofgrowthinthelatterhalfof2011.Europe’ssovereigndebtburdencontinuestoremainhighoninvestors’minds,despitetheestablishmentoftheEuropeanFinancialStabilityFacilityandthefragilescalsituationof‘peripheral’Europewillcastashadowontherelativelystronger‘core’.TheUSmortgagemarketremainsweakandemploymentcreationisstillnotstrongenoughtosustainthecurrentlyimprovedgrowthprospects.Japan’seconomictrajectoryremainsuncertain.Chinaisactivelyworkingtocooldownitseconomy,andsoarethecentralbanksofmanylargeemergingmarkets.Threeconcernsarelikelytopersistin2011-12:highination,scalstressandthecurrentaccountdecit.Theimpactofe

achoftheseislikelytobefeltwithvaryingintensityduringthecourseof2011-12.

HighandpersistinginationhasemergedasasignicantriskfactorinsustainingIndia’sgrowth.Initiallyconnedtohighfoodprices,whichhadpersisteddespiteagoodmonsoon,inationarypressuresarespillingovertoothernon-foodsegments,includingmanufacturedproducts.Globally,foodpriceshadspikedin2010duetosupplydisruptionsinmajorcropgeographies.Commoditypriceshadincreasedonprospectsofhigh

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ergrowthindevelopedmarketsandinthelatterpartoftheyear,sohavecrudeprices.Ingeneral,higherglobalmetalsandcommoditypriceshavecontributedtorisinginputcostsforIndia,whichmaybeprogressivelypassedontoconsumers.

Thesecondstresspointhasbeenahighscaldecit,whichhadincreasedinthetwopreviousyearsasaresultofthescalstimulusintroducedtocountertheeffectsofthenancialcrisis.Persistinghighscaldecitshavetheeffectofincreasinginterestrates,duetotheconsequentmarketborrowingsbytheGovernment,therebysqueezingprivateinvestments.TheBudgetfor2011-12hasattemptedtorestrainthedecit,inlinewiththeearlierstatedintentionofadheringtotheFiscalResponsibilityandBudgetManagementagreement(FRBM).

Thethirdconcernwasahighcurrentaccountdecit,particularlyinthecontextofweakeningcapitalows,whichhavehithertomanagedtocompensatetherisingtradedecit.Thecurrentaccountdecitwasamanifestationofstrongdomesticdemand(whichfuelledimports)andglobalweakness(whichkeptexportperformancemoderate).Thispressurehasabatedsomewhatduringthepastfewmonths,withrisingexportsandslowing(non-oil)imports.However,astrongrebound

inIndia’sexportsoverthepastcoupleofmonthshasconsiderablyreducedthepressure,butIndia’soverallbalanceofpaymentsremainsweakerthanexpected,puttingpressureontheRupee.

Althoughcapitalinowshaveremainedstrong,therehavealsobeenlargeoutowsfromIndia,leavingonlyamoderateBalanceofPaymentssurplusof$11billionduringApril-Decemberafteroffsettingthelargecurrentaccountdecit.ForeigndirectinvestmentsaswellasportfolioinvestmentshaveslowedinQ3ofscal2011,offsettingtheincreaseinbankingcapitalandexternalborrowings.Inaddition,itwasperceivedthatalargepartofthecompensatingcapitalowswere

portfolioows,whichareconsideredtobevolatile.

Thebankingsector,whichremainstheprimarychannelofnancialintermediation,hasseenaslowdownindepositgrowthin2010-11,duetomultiplefactors.Publicholdingofcashincreasedsharplyintheearlypartoftheyearandhassubsequentlyremainedhigh.Ashighlightedearlier,netforeignfundsinowshavealsoremainedrelativelysubdued,withthelargeportfolioinowsearlyintheyearbeingbalancedbycapitaloutowsandthehighmerchandisetradedecit.AthirdfactorwasanunusuallylargeaccretionofcentralGovernmentsurpluses,partiallyduetothetelecom3Gauctions,whichhadremainedsequesteredwiththeRBIovermuchoftheyear.

TheReserveBankofIndia(RBI)hassoughttocontaininationandtemperinationaryexpectationswithagradualandcalibratedmonetarypolicytightening,beginninginearly2010.Theinitialintentionwasmovingfromanaccommodativephaseintonormalisation,butthereafterchangedintoatighteningphasewithcondenceaboutgrowthimpulsesremainingrobustandconcernsaboutpersistinghighination.Combinedwiththetightliquidityconditions,thishasresultedinamuchlargerincreaseinbanks’costoffunds.Consequently,consistent

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5,004underpressure.

3,686Increasingsavings,highinterestrates,anexpectedlowerrisein2,585currencydrivenbylowerfoodprices,arelikelytohelpdepositsto

1,468growstrongerinscal2012.However,inlightoftheinationarypressuresandrisinginterestrates,thereisalikelihoodthatthecreditgrowthmomentummightslowin2011-12.

2006-072007-082008-092009-102010-11

NetinterestIncome( .incrores)

OVERVIEWOFFINANCIALANDBUSINESSPERFORMANCE

During2010-11,theBankcontinuedtogrowitskeybusinessesandrevenues.Havi

nglaiddownitskeybusinessobjectivesandacommonvisionforitsemployees,ittookseveralstepsinfulllingthesegoals.TheBankcontinuedtoderivebenetfromitscorporaterelationshipsandretailLOWCOSTOFFUNDSliabilitiesfranchiseaswellasbuilduponits6.5046.73SME,consumerlending,agricultureand45.685.606.02ruralbankingbusinesses.TheBankfocused

5.204.96onstrengtheningitsretailriskmanagement43.15capabilities,sharpeningriskappetiteintheSMEbusinessandllingproductgapsinboth41.10corporateaswellasretailbusinesses.During39.86theyear,theBankpartneredwithMaxNewYorkLifeformarketingitslifeinsuranceproductsandalsolaunchedonlinebrokingthroughitssubsidiary,AxisSecuritiesand2006-072007-082008-092009-102010-112006-072007-082008-092009-102010-11SalesLtd.DemandDeposits

as%ShareofTotalDepositsCostofFunds(%)

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TheBankundertookasignicantorganisationalrestructuringinitiativeduringtheyear,replacingfourerstwhileZoneswith

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-UpperTierIIcapital1,242.801,248.98-OthereligibleforTierIIcapital536.46426.79

TotalCapitalqualifyingforcomputationofCapitalAdequacyRatio24,870.3522,307.89

TotalRisk-WeightedAssetsandContingencies196,562.61141,169.77

TotalCapitalAdequacyRatio(CAR)12.65%15.80%Outofabove-TierICapital9.41%11.18%-TierIICapital3.24%4.62%

BUSINESSOVERVIEW

Anoverviewofvariousbusinesssegmentsalongwiththeperformanceduring2010-11andtheirfuturestrategiesispresentedbelow.

RETAILBANKING

RetailbankingisoneofthekeydriversoftheBank’sgrowthstrategyandencompassesawiderangeofproductsthataredeliveredthroughmultiplechannelstocustomerswhoareofferedacompletesuiteofproductsacrossdeposits,loans,investmentsolutionsandcards.

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RetailDeposits

TheBankhasfocusedonincreasingitsretaildepositbase,RETAILLIABILITIESparticularlydemanddeposits.Withinthiscategory,SavingsBank40,850

depositshavegrownataCompoundedAnnualGrowthRate33,862(CAGR)of38%overthelastveyears.SavingsBankdepositsgrewto 40,850croreson31March,2011from 33,862crores25,822ason31March,2010registeringagrowthof21%.Onadaily

19,982averagebasis,SavingsBankdepositsgrewby36%to 36,072croresovertheprecedingyear.Retailtermdeposits(denedas12,126termdepositsupto 5crores)grewby25%from 26,848croreson31March,2010to 33,457croreson31March,2011.

2006-072007-082008-092009-102010-11

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Thedistributionofthirdpartyproductsisawell-establishedbusinessfortheBank,withanemphasisuponmutualfundsandBancassurance.Duringtheyear,theBanktiedupwithMaxNewYorkLifefordistributionoflifeinsuranceproducts.Anumberofnewprocesseslike100%welcomecallingandProductSuitabilityMatrixhavebeenimplementedtoensureahighqualitysalesprocessforthelifeinsurancebusiness.Duringtheyear,theBankhasbeenadjudgedtheBestMutualFunddistributorfortheyear2010(BankDistributorCategory)intherecentlyconcludedWealthForumAdvisorAwards2010.AssetsunderManagement(AUM)oftheMutualFundoftheBankhavewitnesseda41%growthoverthelastyearwiththecustomerbaseformutualfundproductsoftheBankgrowingby31%.TheBanklaunchedaperpetualSIPcampaigntitled‘SleepInPeace’whichhasresultedinasubstantialincreaseinenrolmentofnewSIPsduringtheyear.TheBankhasenteredintoanarrangementwithAxisSecuritiesandSalesLtd-ASSL(a100%subsidiaryoftheBank)toprovideAxisDirect,anOnlineTradingplatform,toitscustomers.

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CardProducts

ThecardsbusinessoftheBankcomprisesthreeproducttypes-ATMCHANNELMIGRATIONprepaidcards(paybefore),debit8,538373cards(paynow),andcreditcards(paylater).TheBankhasadominant

6,834314

marketleadershippositionin2434,828prepaidcards.Asof31March,4,1242032011,theBankhasaprepaidcard100143baseofapproximately3.4million80862,728

68dominatedbypayrollandgiftcards.58Foreigncurrencydenominatedtravelprepaidcardsisanextremely2006-072007-082008-092009-102010-112006-072007-082008-092009-102010-112006-072007-082008-092009-102010-11popularofferingoftheBank.TheCardBase(inlakhs)CashWithdrawals( incrores)No.ofTransactions(inlakhs)

Bankisamarketleaderinthis

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fundsthroughanATMwithouttheuseofacard),BunchNoteAcceptor(BNA)machinesforinstantcreditincaseofcashdepositandVirtualCardswhichallowcustomerstocreateaone-timeusageelectronicvirtualcardbydebitingtheiraccounts.Allthesemeasureswillenhancecustomerconvenienceandservicingquality.

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CORPORATEBANKING

TheCorporateBankingfranchiseoffersawidespectrumofproductstocorporatecustomers,includingcredit,tradenance,structurednanceandsyndicationservicesfordebtandequity.Newcustomeracquisitionandrelationship-deepeningisatwo-prongedstrategyforenablinggrowth.ARelationshipManagementGrouphasbeenformedtoserviceallclientrelationshipswithinthelargecorporateandinfrastructuresegments.

Aprerequisiteforglobalcompetitivenessandeconomicgrowthisthecreationofasoundinfrastructurebaseintheeconomy.Recognisingthis,the12thFiveYearPlan(2012-17)envisagesanenhanc

ementoftheplan-sizeforinfrastructuredevelopmenttoUSDonetrillion,twicethatofthe11thFiveYearPlanallocationofapproximatelyUSD500billion.Inorder

toleveragethegrowthopportunitiesoffered,aseparateInfrastructureBusinessGroupwascreatedwithintheCorporateBankingsegment.

Meanwhile,theBankhascontinuedtoretainitsleadershippositioninprojectnanceandcorporatenancedebtmarketandsyndicatedanaggregateamountof 57,049croresbywayofRupeeandForeigncurrencyloansduringtheyear.

CORPORATECREDIT

Duringtheyear,corporatecreditincludinglendingtolargeandmid-corporatesandtoInfrastructure,grewby45%to75,922croresfrom 52,504croreslastyear.Thisincludesadvancesatoverseasbranchesamountingto 19,354crores(equivalenttoUSD4.34billion)mainlycomprisingloanstoIndiancorporatesandtheirsubsidiaries.Theadvancesatoverseasbranchesaccountedfor14%oftheBank’stotaladvances.

Therelationshipmodelintroducedduringtheyearhasworkedwell,enablingtheBanktoattractalargerandmorediversecustomerbase.TheBankalsofocusedoncross-sellingofvariousproduct

sandservicesinincreasingthecustomer’sengagementwithit.Emphasiswasalsogivenonfeebasedbusiness,foreignexchangeborrowingsofcustomersandloansyndication.

TheBank’ssectoralapproachtocreditachievedgreaterefciencyduringtheyearduetoincreasedfocusonidentifyingsector-specicopportunitiesandrisks.Portfoliocompositioniscontinuouslymonitoredbytrackingindustry,groupandcompanyspecicexposurelimits.Thelargestexposuretoanysectorwas10.83%of

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theBank’stotallending(17.50%lastyear).Internalandexternalratingofthecreditfacilitiesofthecustomersisundertakenandmonitoredonongoingbasis.56.13%oftheBank’slargecorporateportfolioisexternallyrated.Theentireportfolioisinternallyratedwith74.70%ratedAandabove.

Themid-corporategroupcontinuestobeanimportantbusinesssegmentoftheBankwithanassetbookof 15,826croresason31March,2011,registeringagrowthof38%overlastyear.Thisincludesadvancesatoverseasbranchesof2,199crores(equivalentofUSD493million)extendedmainlytoIndiancorporates.Thefocuscontinuesongrowthacrossgeographieswithoutcompromisingonqualityofassets.Duringtheyear,thesegmentcontinuedtofocusondeepeningofrelationshipthroughcross-sellingofproductsandservices,bothincorporateandretailbankingspace.

TREASURY

TheBankhasanintegratedTreasury,whichcoversbothdomesticandglobalmarketsandfundsthebalancesheetacrosslocations.TheBank’streasurybusinesshasgrownsubstantiallyovertheyears,gainingmarketshareandispresentlyamong

thetopvebanksinIndiaintermsofforexrevenues.TheBankhasestablishedapresenceinemergingbusinessessuchascard-basedforexsolutions,bulliontradingandcurrencyderivativesandwasalsoamongthefrontrunnersintappingtheoverseasdebtcapitalmarketsforforeigncurrencyfunds.TheBankdistributesitsforexandothertreasuryproductsthrough195‘B’categorybranchesspreadacrossIndia,oneofthewidestdistributionnetworksfortreasuryproductsamongIndianbanks.InadditiontoMumbai,theBankalsohasdealingroomsinSingaporeandHongKong.

DebtCapitalMarketandEquityTrading

TheBanksuccessfullymaintaineditsleadershipinthedebtcapitalmarketsbusinessandsuccessfullysyndicateddebtofaround 83,025croresthroughprivateplacementofbondsanddebenturesinRupees.TheBankwasrecognisedasBestDomesticBondHouseinIndia(2010)byAssetTripleACountryAwards,BestBondHouseinIndia(2010)byFinanceAsia,BestDebtHouseinIndia(2010)byEuroMoneyandBestDomesticDebtHouseinIndia(2010)byAsiaMoney.Duringthecalendaryear2010,theBanktoppedtheBloombergdebtleaguetablesasalsothePrimeDatabaseleaguetablesfortheperiodApril2010toDecember2010.

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BUSINESSBANKING

BusinessBankingfocusesonofferingtransactionalbankingservicesbyleveragingtheBank’snetworkandtechnology.TheBankcontinuedtofocusonprocuringlow-costfundsbyofferingarangeofcurrentaccountproductsandcash

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managementsolutionstomeettheneedsofallbusinesssegmentsincludingcompanies,institutions,centralandstategovernmentministriesandundertakings,aswellassmallandretailbusinesscustomers.Cross-sellingoftransactionalbankingproductstodevelopaccountrelationships,aidedbyproductinnovationandacustomer-centricapproach,havebornefruitintheformofgrowingcurrentaccountbalancesandrealisationoftransactionbankingfees.

Asof31March,2011,balancesincurrentaccountincreasedby15%andstoodat 36,917crorescomparedto 32,168croreslastyear.Onadailyaveragebasis,however,currentaccountdepositsgrewby28%to 23,479croresfrom 18,322croreslastyear.InlinewiththeBank’sstrategyofprovidingcompletenancialsolutions,therewasagreaterfocusonacquisitionofhigh-valuecurrentaccounts,thusmaintainingthepaceofgrowthincurrentaccountbalances.

TheBank’sCashManagementServices(CMS)caterstospecic8,465corporaterequirementsandofferscustomisedsolutionstoCMSGROWTHclients.Thecombinationofspeedyfundtransfersandstructured

6,614MISenablescustomerstooptimisetheirfund-managementcapabilities.Duringtheyear,host-to-hostintegrationwasoffered4,852tolargecorporatecustomersforcollectionsandpayments,afeaturethathasbroughtbotheaseofoperationsandreducedcoststoclients.WithashiftintheBank’sbusinessapproachto3,193

acustomer-centricmodelthroughthecreationofaCorporate2,164AccountsGroupwithinBusinessBanking,cashmanagement,transactionalbankingandotherservicerequirementsofthelargeandmid-sizedcorporatesaswellasnancialinstitutions2006-072007-082008-092009-102010-11arebeingfullledinaproactivemanner.ThishasenabledtheNo.ofCMSClientsBanktobecomeoneofthetopcashmanagementsolution

providersinthecountry.

TheBankactsasanagencyforhandlingthegovernmentbusinessofvariouscentralgovernmentministries,departments,stategovernmentsandunionterritories.TheBankpresentlyacceptsincomeandotherdirecttaxesthrough214authorisedbranchesat137locationsandcentralexciseandservicetaxesthrough56authorisedbranchesat13locations.TheBankalsohandlesthedisbursementofcivilpensionthrough218authorisedbranchesanddefencepensionthrough151authorised

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branches.TheBankalsoprovidescollectionandpaymentservicestofourcentralgovernmentministriesandeightstategovernmentsandunionterritories.

TheBankhasalsostrengtheneditsassociationwiththee-governanceinitiativesofvariousstategovernmentsandduringtheyearreceivedapprovalfromthePunjabGovernment,appointingitasthenodalbankforits‘e-ProcurementProject’.TheBankisassociatedwith9stategovernmentsandothergovernmentorganisationsinvariousotherinitiativesincludingtheElectronicBenetTransfer(EBT)Projectsfordisbursinggovernmentbenets[wagesunderMGNREGSandSocialSecurityPension(SSP)]throughdirectcredittobeneciaries’bankaccountsunderthesmartcardbasedITenablednancialinclusionmodel.ThetotalbusinesscarriedoutbytheBankonbehalfofthegovernmentin2010-11was 85,423croresagainst 71,039croreslastyear.

TheBankisaSEBIregisteredcustodianandofferscustodialservicestobothdomesticandoffshorecustomers.Itisalsoanon-tradingclearingmemberwithBSEandNSEandhasestablishedconnectivitywithclearingcorporationsoftherespectiveexchanges.TheBanklauncheditsforayintothemerchantacquiringbusinessinDecember2003andinthelast

sevenyearshasemergedasoneofthelargestacquirersinthecountrywithaninstalledbaseofapproximately1.87lacpoint-of-saleterminals.

INVESTMENTBANKING

TheBank’sInvestmentBankingbusinesscomprisesequitycapitalmarkets(ECM)business,mergersandacquisitionsandprivateequitysyndication.TheBankisaSEBI-registeredCategoryIMerchantBankerandhasbeenfairlyactiveinadvisingIndiancompaniesinraisingequitythroughIPOs,QIPsandRightsissues.TheBankhasbuiltstrongrelationshipswithIndiancompanies,becominganeffectivebridgebetweensuchcorporatesand,

domesticandinternationalinstitutionalinvestors.

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Duringtheyear,theBankadvisedover12companiesinraising 7,625croresfrominternationalanddomesticequityinvestors.M&Aadvisoryservicesfocusupondomesticandcross-borderbuyandsellmandatesforIndianclients.ThePrivateEquitybusinessworkswiththeBank’smid-corporateandSMEclientsandadvisestheminraisingcapitalfromprivateequityinvestors.Inordertollthegapinitsequitycapitalmarketsandinstitutional

brokingcapabilities,theBankhasproposedtheacquisitionoftheinvestmentbankingfranchisefromEnaminitsgroup.Theproposedacquisitionofthesebusinessesissubjecttoregulatoryapprovals.

LENDINGTOMICRO,SMALLANDMEDIUMENTERPRISES,AGRICULTUREANDMICROFINANCE

LendingtoSmallandMediumEnterprises(SMEs)includingMicro,SmallandMediumEnterprise(MSMEs)segmenthasbeenidentiedasathrustareafortheBank.Thebusinessapproachtowardsthiss

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egment,whichisexpectedtocontributesignicantlytoeconomicgrowthinfuture,isbaseduponbuildingrelationshipsandnurturingtheentrepreneurialtalentavailable.TheBankextendsworkingcapital,projectnanceaswellastradenancefacilitiestoSMEs.Therelationship-basedapproachenablestheBanktodelivervaluethroughtheentirelifecycleofSMEs,creatingenormousgoodwillandstickiness.Italsoprovidesnumerouscross-sellopportunitiesandhelpstheBankfulllitsprioritysectorobligations.TheBankhassetup26dedicatedSMECentresacrossthecountrytoservicethissegmenteffectively.

TheBankcontinuedtodrivegrowthintheagriculturesectorthroughitsagricultureandruralbankinginitiatives.Duringtheyear,adedicatedAgricultureandRuralBankingStrategicBusinessUnit(SBU)hasbeenformedtolendgreaterfocustothissegment.TheBankhasadoptedanintegratedapproachcoveringallparticipantsinthevaluechain.TheBank’sretailagriculturebusinessistargetedatfarmersacrossvariousgeographiesinthecountrythroughanetworkofagricultureintensivebrancheswhichareservicedthrough69agricultureclusters.TheBankalsoextendscommoditynanceagainstpledgeofwarehousereceiptsofagrocommodities.

TheBankhasateamofspecialistagricultureofcersplacedatbranchesandagricultureclusterstoensureeffectivedeliveryofawide-rangeofproductstoagricultureborrowersattheirdoorstep.Duringtheyear,agricultureadvancesgrewby36%to 17,320crores,constituting14%oftheBank’sdomesticadvances.

Inordertoimplementitsruralbankingstrategy,theBankhassetupadedicatedRuralBankingandFinancialInclusionteam.Itisalsoincreasingitspresenceinthehinterland,particularlyinunder-bankedstatesanddistrictsthroughabranchnetworkthatoffersbankingproductscustomisedfortheruralpopulation.TheBankseekstocoveralargercatchmentareaaroundsuchruralbranchesaspartofitsnancialinclusioninitiativethroughahostof

businesscorrespondents.Amongotheractivities,thebusinesscorrespondentsexecutemandatesforEBTreceivedfromstategovernmentsforNREGA,mandatesreceivedthroughSLBCanddistrictadministration,andremittances.

INTERNATIONALBANKING

TheInternationaloperationsoftheBankhavegenerallybeenbaseduponcateringtoIndiancorporateswhohaveexpandedtheirbusinessesoverseas.TheoverseasnetworkoftheBankcurrentlyspansthemajornancialhubsinAsia,withbranchesatSingapore,HongKongandDIFC–Dubai,andRepresentativeOfcesatShanghai,DubaiandAbuDhabi.Inaddition,

therearestrategicallianceswithbanksandexchangehousesintheGulfCo-operationCouncil(GCC)countries.Whileforeignbranchesprimarilyoffercorporatebanking,tradenance,treasuryandriskmanagementsolutions,theBank’sGCCinitiativesintheformofRepresentativeOfcesandalliancescatertothelargeIndiandiasporaandpromotetheBank’sNRIproducts.Inayearinwhichmajorglobaleconomiesshowedsignsofstabilisationfollowingthenancialcrisis,theInternationaloperationsoftheBankhavereportedasignicantgrowthwithoverseasassetsgrowingfromUSD3.10billion

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individualexposuresaswellattheportfoliolevel.Emphasisisplaced,both,onevaluationandcontainmentofriskattheindividualexposuresandanalysisoftheportfoliobehaviour.TheBankhasstructuredandstandardisedcreditapprovalprocesses,whichincludeawell-establishedprocedureofcomprehensivecreditappraisal.Everyextensionofcreditormaterialchangetoacreditfacilitytoanycounterpartyrequirescreditapprovalattheappropriateauthoritylevel.Internalriskratingremainsthefoundationofthecreditassessmentprocesswhichprovidesintegrity,standardisationandobjectivitytotheprocess.Thesanctioningprocessislinkedtotheratingoftheborrowerandthelevelofexposure.Themonitoringfrequencyapplicabletotheexposurealsodependsontheratingoftheexposure.SectorspeciccapsarelaiddownintheCreditPolicytoavoidconcentrationrisk.ForretailportfoliotheBankusesdifferentproductspecicscorecards.Bothcreditandmarketriskexpertisearecombinedtomanageriskarisingoutoftradedcreditproductssuchasbondsandmarketrelatedoff-balancesheettransactions.

TheBankcontinuouslymonitorsportfolioconcentrationsbysegment,borrower,groups,industryandgeography,whereapplicable.Portfolioleveldelinquencymatricesaretrackedatfrequentintervalswithfocusondetectionofearlywarning

signalsofstress.

Keysectorsareanalysedindetailtosuggeststrategiesforbusiness,consideringbothrisksandopportunities.TheRiskManagementCommitteeoftheBoardperiodicallyreviewstheimpactofthestressscenariosresultingfromtheratingdowngrades,ordropintheassetvaluesincaseofsecuredexposures,ontheportfolio.Theportfoliolevelriskanalyticsprovideinsightintothecapitalallocationrequiredtoabsorbunexpectedlossesatadenedcondencelevel.

MarketRisk

ThemarketriskmanagementframeworkoftheBankaimsatmaximisingtheriskadjustedrateofreturnbyprovidinginputsregardingtheextentofmarketriskexposures,theperformanceofportfoliosvis-à-vistheriskexposureandcomparablebenchmarks.MarketRiskistheriskoflossesin‘onandoff-balancesheet’positionsarisingfromthemovementsinmarketpricesaswellasthevolatilitiesofthosechanges,whichmayimpacttheBank’searningsandcapital.Therisksmaypertaintointerestraterelatedinstruments(interestraterisk),equities(equitypricerisk)andforeignexchangeraterisk(Currencyrisk).MarketRiskfortheBankemanatesfromitstradingandinvestmentactivities,whichareundertakenbothforcustomersandonaproprietarybasis.TheBankadoptsacomprehensiveapproach

tomarketriskmanagementforitsbankingbookaswellastradingbook.Themarketriskmanagementofthetrading,investmentandasset/liabilityportfoliosoftheBankincludeslaiddownpolicies,guidelines,processesandsystemsfortheidentication,measurement,monitoringoflimitssetinaccordancewithriskappetiteoftheBankandreportingofvariousmarketrisksinthebankingandtradingbook.TheBankusesbothstatisticalmeasuresandnon-statisticalmeasuresforthemarketriskmanagement.ThestatisticalmeasuresincludeValueatRisk(VaR),stresstests,backtestsandscenarioan

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alysiswhilepositionlimits,marked-to-market(MTM),gapsandsensitivities(duration,PVBP,optiongreeks)areusedasnon-statisticalmeasuresofmarketriskmanagement.

TheBankuseshistoricalsimulationanditsvariantsforcomputingVaRforitstradingportfolio.VaRofaportfolioisdenedasthepotentiallossvaluesuchthat,givenacondencelevel(probability),thecumulativemark-to-marketlossonthe

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portfoliooveragiventimehorizondoesnotexceedacceptablelevel(assumingnormalmarketconditionsandnotradingintheportfolio).VaRiscalculatedata99%condencelevelforaone-dayholdingperiod.TheVaRmodelsfordifferentportfoliosareback-testedonanongoingbasisandtheresultsareusedtomaintainandimprovetheefcacyofthemodel.TheBanksupplementstheVaRmeasurewithaseriesofstresstestsandsensitivityanalysisasperawelllaidoutstresstestingframework.

LiquidityRisk

Liquidityistheabilityofabanktofundincreasesinassetsandmeetobligationsastheybecomedue,withoutincurringunacceptablelosses.Liquidityriskisthecurrentandprospectiverisktoearningsorcapitalarisingfromabank’sinabilitytomeetitscurrentorfutureobligationsontheduedate.Liquidityriskistwo-dimensional:riskofbeingunabletofundportfolioofassetsatappropriatematurityandrates(liabilitydimension)andtheriskofbeingunabletoliquidateassetsinatimelymanneratareasonableprice(assetdimension).TheBank’sALMpolicylaysdownabroadframeworkforliquidityriskmanagementtoensurethattheBankisinapositiontomeetitsdailyliquidityobligationsaswellaswithstandaperiod

ofliquiditystress,thesourceofwhichcouldbebank-wideormarketwide.

TheliquidityproleoftheBankisanalysedonastaticaswellasonadynamicbasisbyusingthegapanalysistechniquesupplementedbymonitoringofkeyliquidityratiosandconductofliquiditystresstestsperiodically.Theliquiditypositionismanagedonaglobalbasisincludingpositionsattheoverseasbranches.TheBankhaslaiddownliquidityriskpoliciesforitsoverseasbranchesinlinewithhostcountryregulationsandtheALMframeworkasstipulatedfordomesticoperations.PeriodicalliquidityreviewsandliquiditystressresultsofoverseasbranchesarereviewedbytheBank’sALCOalongwithdomesticpositions.

OperationalRisk

TheBankhasputinplaceanoperationalriskmanagement(ORM)policytomanageoperationalriskinaneffective,efcientandproactivemanner.TheprimaryobjectiveoftheoperationalriskmanagementpolicyistoidentifytheoperationalrisksthattheBankisexposedtofrominadequateand/ormissingcontrolsemanatingfrominternalprocesses,people,systemsorfromexternaleventsoracombinationofallthefour,assessormeasurethe

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magnitude,monitorthemandcontrolormitigatethembyusingavarietyofprocesses.InadditiontotheORMpolicy,operationalriskmanagementframework,lossdatacollectionmethodology,riskandcontrolselfassessmentframework,keyriskindicatorsframeworkaswellasroleandresponsibilitiesofoperationalriskmanagementfunctionareapprovedbytheRiskManagementCommittee(RMC).TheBankhasanOperationalRiskManagementCommittee(ORMC),whichoverseestheimplementationoftheaforesaidframework/policies.WithintheORMframework,newproducts,processesandservicesintroducedbytheBankaresubjecttorigorousriskevaluationandapprovalaccordedbytheProductManagementCommitteewhereallrelevantrisksareidentiedandassessedbythedepartmentsindependentoftherisk-takingunit(product/process/serviceowner).Similarly,changesproposedintheexistingproduct/processes/servicesarealsosubjecttoreviewbytheChangeManagementCommittee.OutsourcingarrangementsareexaminedandapprovedbytheOutsourcingCommittee.TheITSecurityCommitteeoftheBankprovidesdirectionsformitigatingtheoperationalriskintheinformationsystems.TheBankhasalsocreatedafocussedgroupforoff-sitesurveillanceandmonitoringoftransactionstodetectandmitigatefraudsonaproactivebasis.

OPERATIONS

ThebusinessmodeloftheBankhasseparatedproductionanddistributionfunctionswithintheBank,withtransactionprocessingandcustomerdatabasesbecomingincreasinglycentralisedandproductsalesandcustomerservicebeingtheprimaryfunctionofbranches.Theseparationoffunctionshashelpedinreducingtransactioncosts,inadditiontoensuringstreamlinedoperations.Operationalprocessesfordeliveryofproductsandserviceswereconstantlyrenedduringtheyear,fromtheperspectiveofimplementationofbestpractices,riskidenticationandcontainment.Operationalinstructionswereissuedonacontinualbasisandeffortsweremadetointroducerisk-freeworking

atbranches.

RetailBankingOperations

TheoversightfunctionintheBankhasbeenstrengthenedthroughcentralisedmonitoringoftheworkingofthebranchesinrespectofKYC,AML,otherregulatorycompliances,cashmanagement,clearingoperationsandinternalhousekeepingresultinginsuperiorcomplianceandhigheroperationalefciencies.Controlfunctionswerereinforcedthroughoperationalguidelinesissuedtobranchesandclosesupervisionby26CircleRetailBankingOperationsOfcers.High-endnotesortingmachineshavebeenprovidedto286cashintensivebranchesand13CashPointCou

nters(CPCs)hadbeensetupin8major

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citiestoensureenhancedcustomerserviceandbetterhandlingofcash.TwonewCurrencyChestswereoperationalisedatHubliandVijayawada.ClearingactivitiesinMumbaiandKolkatahave

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beenautomatedbyadoptingimage-basedprocessingofclearinginstrumentstherebyimprovingefciencyofclearingoperationsatthesehigh-volumecentres.

WholesaleBankingOperations

WholesaleBankingOperations(WBO)isresponsibleforprovidingbestinclassservicestonon-retailcustomersoftheBankthroughthedeploymentofskilledmanpowerandappropriatetechnology.TheWBOgroupcomprisesfourverticals-CorporateBankingOperations,TradeandForexOperations,TreasuryOperationsandCentralisedCollectionsandPaymentsHub.

CorporateBankingOperations(CBO)involvesdelivery,control,monitoringandadministrationofcreditfacilitiesoflargeandmid-corporatesandSMEcustomers.Italsoprocessesdomestictradenanceandchannelnancetransactions.CBOoperatesthroughCreditManagementCentres(CMC)locatedat8majorcities,whilecreditoperationsatTierIIcitiesareadministeredthrough50Mini-CreditManagementCentres.AtTierIIIcities,corporatecreditservicesincludingdomestictradenanceoperationsareprovidedthroughdedicatedofcialsatcreditintensivecentres.Withaviewtoofferenhanced

customerservicesandbuilddirectinterfacewiththecustomers,threeCorporateBankingBranches(CBBs)havebeenopenedinChennai,KolkataandMumbai.TheforexoperationsteamatbranchesismanagedbytheTradeFinanceCentre,ensuringbettercustomerservicesaswellasmeticulouscomplianceofregulatoryandinternalcontrolguidelines.

INFORMATIONTECHNOLOGY

TheBankaimstomaintainascalablecomputinginfrastructurethatdeliversefcientandseamlessservicesacrossmultiplechannelsforcustomerconvenience.Inordertoretainitscompetitiveedge,theBank’stechnologyinfrastructure

iscontinuouslyupgradedinalignmentwithbusinessrequirements.Duringtheyear,theBanktransitionedtoahigherversionoftheCoreBankingSystem(CBS),whichhasbeendesigneduponaServiceOrientedArchitecture.TheupgradedversionoftheCBSiscapableofhandlingsignicantlyhighernumberofconcurrentusersandtransactionvolumesandcanintegratewithothersurroundsystemsandchannels.Ithasthecapabilitytoprovideround-the-clockbanking.ThisversionalsoprovidesauniqueCRMfeature,andnewproductcapabilitiesinareasofloans,liquiditymanagementandworkow.TheITinitiativesoftheBankhaveenabledthesustainedgrowthofbankingtransactionsacrossvariouschannelssuchasInternet,ATMandMobileBanking.Duringtheyear,theBankhaslaunc

heditsretailInternetBankingportalwhichhasbeendesignedkeepinginviewbetterusabilityandsuperiorlookandfeel.TheBankhasalsoimplementedacustom-builtCRMsoftwaresolutiontohandlebothcustomerinteractionandcomplaintsthroughvariouscustomertouchpointslikePhoneBankingCentre,e-mailandbranches.

COMPLIANCE

ThecompliancefunctionoftheBankisresponsibleforindependently

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ensuringthatoperatingandbusinessunitscomplywithregulatoryandinternalguidelines.TheComplianceDepartmentoftheBankcontinuedtoplayapivotalroleinensuringimplementationofcompliancefunctionsinaccordancewiththedirectivesissuedbytheregulators,theBank’sBoardofDirectorsandtheBank’scompliancepolicy.TheAuditCommitteeoftheBoardreviewstheperformanceoftheComplianceDepartmentandthestatusofcompliancewithregulatory/internalguidelinesonaperiodicbasis.

NewInstructions/guidelinesissuedbytheregulatoryauthoritiesweredisseminatedacrosstheBanktoensurethatthebusinessandfunctionalunitsoperatewithintheboundariessetbyregulatorsandthatcompliancerisksaresuitablymonitoredandmitigatedincourseoftheiractivitiesandprocesses.Newproductsandprocesseslaunchedduringtheyearweresubjectedtoscrutinyfromthecompliancestandpointandproposalsforoutsourcingofnancialserviceswerescreenedfromriskcontrolperspective.

Monitoringandidenticationofsuspicioustransactionpatternsplayedanimportantroleacrossthefranchisewithanobjectivetocheckanyattemptformoneylaunderingactivities.Timelystepswereundertakentomeettheemerging

challengesintheareaofidenticationofunusualtransactionpatternsandtoreporttotheFinancialIntelligenceUnit–India.CustomercondentialityandproperrecordmaintenanceasmandatedunderPreventionofMoneyLaunderingAct,2002,attracteddueimportanceinallfacetsofoperations.Withtheaidofthealertsystem,branchesweretrainedtoplayakeyroleincheckingabnormaltransactionsandtoavoidanycomplianceimplications.Astrongvigilancefunction,awell-propagatedwhistleblowerpolicyandzerotolerancepolicyforfraud,corruptionandnancialirregularitiesweretheothersignicantaspectsoftheBank’scomplianceculture.

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INTERNALAUDIT

TheBank’sinternalauditfunctionperformsanindependentandobjectiveevaluationoftheadequacyandeffectivenessofinternalcontrolsbyundertakingacomprehensiveriskbasedauditofbranches,RetailAssetCentres(RAC),ServiceBranchesandCreditManagementCentres/MiniCreditManagementCentres(CMC/MCMC).Thisensuresthattheoperatingandbusinessunitsadheretosystemsandproceduresasalsoregulatoryandlegalrequirements.Theeffortistocontinuously

benchmarkagainstinternationalbestpracticesandproceduresintheareaofinternalcontrolsystems.Theinternalauditisalsoproactiveinrecommendingqualityenhancementmeasuresinoperationalprocessesbasedonauditndings.Italsoundertakesinternal-cum-managementauditoftheBank’sCorporateOfce(CO)departments.Duringtheyear,InformationSystem(IS)auditswereconductedinrespectof169applications,theBank’sDataCentreandBusinessContinuityCentre.TheInternalAuditDepartmentfunctionsindependentlyanditsactivitiesareoverseenbytheAuditCommitteeoftheBoard,

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ched,asapartofwhichapoolofkeytalentwillbeidentiedacrossfunctions.

TheBankbelievesthatatransparentorganisationstructurePROFILEBYAGEensuresefcientcommunicationandalsopromotesa3.51%0.70%performance-drivenworkculture.Tokeepemployeesabreastof

variousdevelopments,itwasimportanttoprovideavenuesfor24.85%knowledgesharing.AxisWorld,theBank’sin-housemagazinewaslaunchedinthemonthofNovember2010,withanobjectivetocreateaplatformforbothtop-downandbottom-70.94%upcommunication.TheBankalsolaunchediAxis,anintranet

portalcreatedtoofferaone-clickdestinationtoemployeesforeasyaccessofHRrelatedinformation,policiesandinternaljobopportunities.

Below30YearsAbove40yrsto50yrsInordertobringaboutgreateralignmentbetweencorporateAbove30yrsto40yrsAbove50yrsto60yrsobjectivesandindividualgrowth,theBank’sPerformance

ManagementSystem,hasbeenstreamlinedthisyear.The

changeshavehelpedtoincreasetheownershipofappraiserandthereviewerintheperformancemanagementprocess.

TheBankhasemergedasastrongemployerbrandinthenancialservicessector,especiallyonthecampusesofthepremierbusinessschoolsofthecountry.AxisAhead,theBank’sManagementTraineeProgrammefocusesongroomingbusinessleadersoftommorrowthrougharigorous11monthcross-departmentalandbranchexposuretraining.

Thestrengthoftheworkforceattheyear-endwas26,435ascomparedto21,640attheendofthepreviousyear.

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AUDITORS’REPORT

TOTHEMEMBERSOFAXISBANKLIMITED

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1.WehaveauditedtheattachedBalanceSheetofAXISBANKLIMITED(“theBank”)asat31March,2011,theProtandLossAccountandtheCashFlowStatementoftheBankfortheyearendedonthatdate,bothannexedthereto.ThesenancialstatementsaretheresponsibilityoftheBank’sManagement.Ourresponsibilityistoexpressanopiniononthesenancialstatementsbasedonouraudit.

2.WeconductedourauditinaccordancewiththeauditingstandardsgenerallyacceptedinIndia.ThoseStandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthenancialstatementsarefreeofmaterialmisstatements.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsandthedisclosuresinthenancialstatements.AnauditalsoincludesassessingtheaccountingprinciplesusedandthesignicantestimatesmadebytheManagement,aswellasevaluatingtheoverallnancialstatementpresentation.Webelievethatourauditprovidesreasonablebasisforouropinion.

3.TheBalanceSheetandtheProtandLossAccountaredrawnupinconformitywithFormsAandB(revised)oftheThirdScheduletotheBankingRegulationAct,1949,readwithSection211oftheCompaniesAct,1956.

4.Withoutqualifyingourreport,weinviteattentiontoNote1ofSchedule18regardingtheSchemeofArrangementforthedemergerofEnamSecuritiesPrivateLtd.withtheBank’ssubsidiary.Forthereasonsstatedtherein,noeffecttotheproposedSchemehasbeengivenintheaccounts.

5.Wefurtherreportasfollows:

(a)wehaveobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofourauditandhavefoundthemtobesatisfactory;

(b)inouropinion,thetransactionsoftheBankwhichhavecometoournoticehavebeenwithinitspowers;

(c)inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheBanksofarasitappearsfromourexaminationofthosebooks;

(d)thenancialaccountingsystemsoftheBankarecentralisedand,therefore,accountingreturnsarenotrequiredtobesubmittedbytheBranches;

(e)theBalanceSheet,theProtandLossAccountandtheCashFlowStatem

entdealtwithbythisreportareinagreementwiththebooksofaccount;

(f)inouropinion,theBalanceSheet,theProtandLossAccountandtheCashFlowStatementdealtwithbythisreportcomplywiththeAccountingStandardsreferredtoinSection211(3C)oftheCompaniesAct,1956,insofarastheyapplytobanks;

(g)inouropinionandtothebestofourinformationandaccordingtot

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heexplanationsgiventous,thesaidaccountsgivetheinformationrequiredbytheCompaniesAct,1956inthemannersorequiredforbankingcompaniesandtheGuidelinesissuedbytheReserveBankofIndiafromtimetotimeandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

(i)inthecaseoftheBalanceSheet,ofthestateoftheaffairsoftheBankasat31March,2011;

(ii)inthecaseoftheProtandLossAccount,oftheprotoftheBankfortheyearendedonthatdateand

(iii)inthecaseofCashFlowStatement,ofthecashowsoftheBankfortheyearendedonthatdate.

6.OnthebasisofthewrittenrepresentationsreceivedfromtheDirectorsason31March,2011takenonrecordbytheBoardofDirectors,wereportthatnoneoftheDirectorsisdisqualiedfrombeingappointedasadirectorintermsofSection274(1)(g)oftheCompaniesAct,1956.

ForDELOITTEHASKINS&SELLSCharteredAccountants

(RegistrationNo:117365W)

NalinM.ShahPartner(MembershipNo.15860)

Place:MumbaiDate:22ndApril,2011

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AXISBANKLIMITED-BALANCESHEET

BALANCESHEETASAT31MARCH,2011

AsatAsat31-03-201131-03-2010ScheduleNo.( inThousands)( inThousands)

CAPITALANDLIABILITIES

Capital14,105,4584,051,741

Reserves&Surplus2185,882,797156,392,749

Employees’StockOptionsOutstanding(Net)17(5.15)-1,734

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rectorManagingDirector&CEO



Date:22April,2011Place:Mumbai

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AXISBANKLIMITED-PROFIT&LOSSACCOUNT

PROFIT&LOSSACCOUNTFORTHEYEARENDED31MARCH,2011YearendedYearended31-03-201131-03-2010

ScheduleNo.( inThousands)( inThousands)IINCOMEInterestearned13151,548,058116,380,215Otherincome1446,321,33839,457,819TOTAL197,869,396155,838,034IIEXPENDITUREInterestexpended1585,918,23066,335,261Operatingexpenses

1647,794,28137,097,223Provisionsandcontingencies18(2.1.1)30,271,97927,260,217TOTAL163,984,490130,692,701IIINETPROFITFORTHEYEAR(I-II)33,884,90625,145,333BalanceinProt&LossAccountbroughtforwardfrompreviousyear34,274,33723,480,865IVAMOUNTAVAILABLEFORAPPROPRIATION68,159,24348,626,198VAPPROPRIATIONS:

TransfertoStatutoryReserve8,471,2276,286,333Transferto/(from)InvestmentReserve(149,372)148,750TransfertoCapitalReserve18(2.2.1)47,6302,239,176TransfertoGeneralReserve3,388,4913,109Proposeddividend(includestaxondividend)18(2.2.4)6,703,5605,674,493

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Netprotbeforetaxes51,356,59238,513,633

Adjustmentsfor:

Depreciationonxedassets2,895,8722,343,218

Depreciationoninvestments992,677(222,334)

AmortisationofpremiumonHeldtoMaturityInvestments605,613829,739

ProvisionforNonPerformingAdvances/Investments(includingbaddebts)9,551,19513,570,445

Provisiononstandardassets1,661,564(9,100)

Provisionforwealthtax4,5583,483

Provisionforinteresttax

2,879-

Lossonsaleofxedassets69,76238,707

Provisionforcountryrisk24,500(15,300)

Provisionforrestructuredassets150,615564,722

Provisionforothercontingencies412,205-

Amortisationofdeferredemployeecompensation(186)(230)

67,727,84655,616,983

Adjustmentsfor:

(Increase)/Decreaseininvestments(35,371,797)(49,859,981)

(Increase)/Decreaseinadvances

(390,403,391)(241,787,053)

Increase/(Decrease)indeposits479,375,834239,261,124

(Increase)/Decreaseinotherassets(5,450,468)168,828

Increase/(Decrease)inotherliabilities&provisions17,664,93013,727,672

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Directtaxespaid(19,292,248)(15,146,740)

Netcashowfromoperatingactivities114,250,7061,980,833

Cashowfrominvestingactivities

Purchaseofxedassets(13,602,967)(4,065,926)

(Increase)/DecreaseinHeldtoMaturityInvestments(126,380,416)(47,352,587)

Proceedsfromsaleofxedassets130,076188,676

Netcashusedininvestingactivities(139,853,307)(51,229,837)

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CASHFLOWSTATEMENTFORTHEYEARENDED31MARCH,2011

YearendedYearended31-03-201131-03-2010( inThousands)( inThousands)

Cashowfromnancingactivities

Proceedsfromissueofsubordinateddebt,perpetualdebt&upperTierII

instruments(netofrepayment)(1,625,906)18,214,280

Increase/(Decrease)inborrowings(excludingsubordinateddebt,perpetual

debt&upperTierIIinstruments)92,609,218(1,717,478)

Proceedsfromissueofsharecapital53,717461,690

Proceedsfromsharepremium(netofshareissueexpenses)

2,353,98738,570,041

Paymentofdividend(5,694,110)(4,205,287)

Netcashgeneratedfromnancingactivities87,696,90651,323,246

Effectofexchangeuctuationtranslationreserve(46,833)(204,112)

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AuthorisedCapital

500,000,000EquitySharesof 10/-each5,000,0005,000,000

Issued,SubscribedandPaid-upcapital

410,545,843(Previousyear-405,174,119)EquitySharesof 10/-eachfullypaid-up4,105,4584,051,741

SCHEDULE2-RESERVESANDSURPLUS

I.StatutoryReserve

OpeningBalance19,349,12313,062,790

Additionsduringtheyear8,471,2276,286,333

27,820,35019,349,123

II.SharePremiumAccount



Less:Shareissueexpenses-(484,177)

100,050,79097,695,255

III.InvestmentReserveAccount

OpeningBalance149,372622

Additionsduringtheyear-149,372

Less:Deductionsduringtheyear(149,372)(622)

-149,372

IV.GeneralReserve

OpeningBalance146,109143,000

Additionsduringtheyear3,388,4913,109

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3,534,600146,109

V.CapitalReserve



4,905,9354,858,305

VI.ForeignCurrencyTranslationReserve[referSchedule17(5.5)]

OpeningBalance(79,752)124,361

Additionsduringtheyear(46,833)(204,113)

(126,585)(79,752)

VII.BalanceinProt&LossAccount49,697,70734,274,337

TOTAL185,882,797156,392,749

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SCHEDULESFORMINGPARTOFTHEBALANCESHEETASAT31MARCH,2011

AsatAsat31-03-201131-03-2010( inThousands)( inThousands)

SCHEDULE3-DEPOSITS

A.I.DemandDeposits

(i)Frombanks14,305,11113,564,428

(ii)Fromothers354,865,812308,112,937

II.SavingsBankDeposits408,503,090338,617,974

III.TermDeposits

(i)Frombanks

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21,603,24914,889,736GRANDTOTAL(I+II)75,224,92957,218,631

SCHEDULE8-INVESTMENTSI.InvestmentsinIndiain-(i)GovernmentSecurities##441,549,553341,958,753(ii)Otherapprovedsecurities--(iii)Shares6,928,7175,295,991(iv)DebenturesandBonds180,704,920138,232,582(v)InvestmentinSubsidiaries/JointVentures2,595,5001,535,500(vi)Others(MutualFundunits,CD/CP,NABARDdeposits,PTCetc.)@82,405,86265,941,255TotalInvestmentsinIndia714,184,552552,964,081II.InvestmentsoutsideIndiain-(i)GovernmentSecurities(includinglocalauthorities)429,340-(ii)Subsidiariesand/orjointventuresabroad(amountlesstha

n 1,000forcurrentyear,previousyear Nil)--

(iii)Others5,302,3166,784,075TotalInvestmentsoutsideIndia5,731,6566,784,075GRANDTOTAL(I+II)719,916,208559,748,156##Includessecuritiescosting 4,424.90crores(previousyear 4,237.60crores)pledgedforavailmentoffundtransferfacility,clearingfacilityandmarginrequirements

@IncludesdepositswithNABARD 4,064.71crores(previousyear 3,002.70crores)andPTC’s 212.98crores(previousyear 351.28crores)netofdepreciation

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SCHEDULESFORMINGPARTOFTHEBALANCESHEETASAT31MARCH,2011AsatAsat31-03-201131-03-2010

( inThousands)( inThousands)SCHEDULE9-ADVANCESA.(i)Billspurchasedanddiscounted*34,812,94834,500,593(ii)Cashcredits,overdraftsandloansrepayableondemand349,803,398260,135,632(iii)Termloans#1,039,461,940748,773,239TOTAL

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1,424,078,2861,043,409,464B.(i)Securedbytangibleassets$1,131,026,880865,761,933(ii)CoveredbyBank/GovernmentGuarantees&&32,394,56116,367,294(iii)Unsecured260,656,845161,280,237TOTAL1,424,078,2861,043,409,464C.I.AdvancesinIndia(i)PrioritySector412,891,152299,404,189(ii)PublicSector30,039,40332,047,307(iii)Banks2,408,0963,825,615(iv)Others782,963,737584,824,255TOTAL1,228,302,388920,101,366II.AdvancesOutsideIndia(i)Duefrombanks4,196,520332,996(ii)Duefromothers-

(a)Billspurchasedanddiscounted6,264,4974,316,262(b)Syndicatedloans70,389,40163,702,125(c)Others114,925,48054,956,715TOTAL195,775,898123,308,098GRANDTOTAL[CI+CII]1,424,078,2861,043,409,464

*NetofborrowingsunderBillsRediscountingScheme 1,800crores(previousyear Nil)

#NetofborrowingsunderInterBankParticipationCerticate 3,401crores(previousyear Nil)$Includesadvancesagainstbookdebts&&IncludesadvancesagainstL/Csissuedbybanks

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SCHEDULESFORMINGPARTOFTHEBALANCESHEETASAT31MARCH,2011


SCHEDULE10-FIXEDASSETS

I.Premises

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GrossBlock

Atcostatthebeginningoftheyear891,351891,351

Additionsduringtheyear8,244,785-

Deductionsduringtheyear(18,796)-

TOTAL9,117,340891,351

Depreciation

Asatthebeginningoftheyear161,989117,422

Chargefortheyear46,66944,567


Depreciationtodate198,381161,989

NetBlock8,918,959729,362

II.Otherxedassets(includingfurniture&xtures)GrossBlockAtcostatthebeginningoftheyear20,188,42416,527,205Additionsduringtheyear5,703,6604,068,383

Deductionsduringtheyear(744,511)(407,164)TOTAL25,147,57320,188,424DepreciationAsatthebeginningoftheyear9,265,9567,147,088Chargefortheyear2,849,2032,298,651Deductionsduringtheyear(553,192)(179,783)Depreciationtodate11,561,9679,265,956

NetBlock13,585,60610,922,468III.CAPITALWORK-IN-PROGRESS(includingcapitaladvances)226,891572,369GRANDTOTAL(I+II+III)22,731,45612,224,199

SCHEDULE11-OTHERASSETSI.Inter-ofceadjustments(net)--

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SCHEDULE15-INTERESTEXPENDEDI.Interestondeposits74,985,18857,145,252II.InterestonReserveBankofIndia/Inter-bankborrowings1,609,7681,493,646III.Others@9,323,2747,696,363TOTAL85,918,23066,335,261@Includinginterestonrepos&subordinateddebt

SCHEDULE16-OPERATINGEXPENSESI.Paymentstoandprovisionsforemployees16,139,00112,558,219II.Rent,taxesandlighting6,798,4644,960,904III.Printingandstationery1,095,968831,035IV.Advertisementandpublicity790,153472,694V.Depreciationonbank’sproperty2,895,8722,343,218VI.Directors’fees,allowanceandexpenses5,7585,109

VII.Auditors’feesandexpenses7,5006,800VIII.Lawcharges133,752147,406IX.Postage,telegrams,telephones,etc.1,984,9211,756,553X.Repairsandmaintenance3,839,3373,023,309XI.Insurance1,849,4901,414,304XII.Otherexpenditure12,254,0659,577,672

TOTAL47,794,28137,097,223

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17Signicantaccountingpoliciesfortheyearended31March,2011

1Background

AxisBankLimited(‘theBank’)wasincorporatedin1993andprovidesacompletesuiteofcorporateandretail

bankingproducts.

2Basisofpreparation

Thenancialstatementshavebeenpreparedandpresentedunderthehistoricalcostconventionontheaccrualbasisofaccounting,andcomplywiththegenerallyacceptedaccountingprinciples,statutoryrequirementsprescribedundertheBankingRegulationAct,1949,thecircularsandguidelinesissuedbytheReserveBankofIndia(‘RBI’)

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HeldforTrading(‘HFT’);

AvailableforSale(‘AFS’);and

HeldtoMaturity(‘HTM’).

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InvestmentsthatareheldprincipallyforsalewithinashortperiodareclassiedasHFTsecurities.AspertheRBIguidelines,HFTsecurities,whichremainunsoldforaperiodof90daysarereclassiedasAFSsecuritiesasonthatdate.

InvestmentsthattheBankintendstoholdtillmaturityareclassiedundertheHTMcategory.

AllotherinvestmentsareclassiedasAFSsecurities.

However,fordisclosureintheBalanceSheet,investmentsinIndiaareclassiedundersixcategories-Government

Securities,Otherapprovedsecurities,Shares,DebenturesandBonds,InvestmentinSubsidiaries/JointVenturesandOthers.

InvestmentsmadeoutsideIndiaareclassiedunderthreecategories–GovernmentSecurities,Subsidiariesand/orJointVenturesabroadandOthers.

Transferofsecuritybetweencategories

TransferofsecuritybetweencategoriesofinvestmentsisaccountedaspertheRBIguidelines.

Acquisitioncost

Costsincludingbrokerage,commissionpertainingtoinvestments,paidatthetimeofacquisition,arechargedtotheProtandLossAccount.

BrokenperiodinterestischargedtotheProtandLossAccount.

Costofinvestmentsiscomputedbasedontheweightedaveragecostmethod.

Valuation

InvestmentsclassiedundertheHTMcategoryarecarriedatacquisitioncost.Anypremiumonacquisitionoverfacevalueisamortisedonaconstantyieldtomaturitybasisovertheremainingperiodtomaturity.IntermsofRBIguidelines,discountonsecuritiesheldunderHTMcategoryisnotaccruedandsuchsecuritiesareheldattheacquisitioncosttillmaturity.

InvestmentsclassiedundertheAFSandHFTcategoriesarema

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incaseofbondsanddebentures(includingPTCs)whereinterestisnotreceivedregularly,thevaluationisinaccordancewithprudentialnormsforprovisioningasprescribedbyRBI;

equityshares,forwhichcurrentquotationsarenotavailableorwherethesharesarenotquotedonthestockexchanges,arevaluedatbreak-upvalue(withoutconsideringrevaluationreserves,ifany)whichisascertainedfromthecompany’slatestBalanceSheet.IncasethelatestBalanceSheetisnotavailable,thesharesarevaluedatRe.1percompany;

unitsofVentureCapitalFunds(VCF)heldunderAFScategorywherecurrentquotationsarenotavailablearemarkedtomarketbasedontheNetAssetValue(NAV)shownbyVCFasperthelatestauditednancialsofthefund.Incasetheauditednancialsarenotavailableforaperiodbeyond18months,theinvestmentsarevaluedatRe.1perVCF.InvestmentinunquotedVCFafter23August,2006arecategorisedunderHTMcategoryfortheinitialperiodofthreeyearsandvaluedatcostasperRBIguidelines;and

investmentsinCreditLinkedNotes(‘CLNs’),arevaluedbasedoncurrentquotationswherethesameareavailable.Intheabsenceofquotes,thesamearevaluedbasedoninternalvaluationmethodologyusingappropriatemark-upandotherestimatessuchaspriceoftheunderlyingForeignCurrencyConvertibleBond(FCCB),ratingcategoryoftheCLNetc.

Investmentsinsubsidiaries/jointventuresarecategorisedasHTMandassessedforimpairmenttodeterminepermanentdiminution,ifany,inaccordancewiththeRBIguidelines.

RealisedgainsoninvestmentsundertheHTMcategoryarerecognisedintheProtandLossAccountandsubsequentlyappropriatedtoCapitalReserveaccountinaccordancewiththeRBIguidelines.LossesarerecognisedintheProtandLossAccount.

Allinvestmentsareaccountedforonsettlementdateexceptinvestmentsinequityshareswhichareaccountedforontradedateasthecorporateactionsareeffectedinequityonthetradedate.

Repurchaseandreverserepurchasetransactions

Repurchaseandreverserepurchasetransactions[excludingthoseconductedundertheLiquidityAdjustmentFacility(LAF)withRBI]areaccountedascollateralisedborrowingandlendingrespectively.SuchtransactionsdoneunderLAFareaccountedasoutrightsaleandoutrightpurchaserespectively.However,depreciationintheirvalue,ifany,comparedtotheiroriginalcost,isrecognisedintheProtandLossAccount.

5.2Advances

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Assetsatstaffresidence3years

Allotherxedassets10years

Allxedassetsindividuallycostinglessthan 5,000arefullydepreciatedintheyearofinstallation.

Depreciationonassetssoldduringtheyearisrecognisedonapro-ratabasistotheProtandLossAccounttillthedateofsale.

ThecarryingamountsofassetsarereviewedateachBalanceSheetdatetoascertainifthereisanyindicationofimpairmentbasedoninternal/externalfactors.Animpairmentlossisrecognisedwhereverthecarryingamountofanassetexceedsitsrecoverableamount.Therecoverableamountisthegreateroftheasset’snetsellingpriceandvalueinuse.Inassessingvalueinuse,theestimatedfuturecashowsarediscountedtotheirpresentvalueattheweightedaveragecostofcapital.Afterimpairment,depreciationisprovidedontherevisedcarryingamountofthe

assetoveritsremainingusefullife.

5.9Leasetransactions

Assetsgivenonoperatingleasearecapitalisedatcost.RentalsreceivedbytheBankarerecognisedintheProtandLossAccountonaccrualbasis.

Leaseswherethelessoreffectivelyretainssubstantiallyalltherisksandbenetsofownershipovertheleasetermareclassiedasoperatinglease.LeasepaymentsforassetstakenonoperatingleasearerecognisedasanexpenseintheProtandLossAccountonastraight-linebasisovert

heleaseterm.

5.10Retirementandotheremployeebenets

ProvidentFund

RetirementbenetintheformofprovidentfundisadenedcontributionschemeandthecontributionsarechargedtotheProtandLossAccountoftheyearwhenthecontributionstothefundaredue.Therearenootherobligationsotherthanthecontributionpayabletothetrust.

Gratuity

TheBankcontributestowardsgratuityfund(denedbenetretirementplan)administeredbytheLifeInsuranceCorporationofIndia(‘LIC’),MetlifeInsuranceCompanyLimited(‘Metlife’),HDFCStandardLifeInsuranceCompanyLimited(‘HDFCLife’)andICICIPrudentialLifeInsuranceCompanyLimited(‘ICICIPru’)foreligibleemployees.Underthisscheme,thesettlementobligationsremainwiththeBank,althoughLIC/Metlife/HDFCLife/ICICIPruadminister

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-----------------------Page50-----------------------

equityshares.Theexcessofsuchfairmarketpriceovertheexercisepriceoftheoptionsasatthegrantdateisrecognisedasadeferredcompensationcostandamortisedonastraight-linebasisoverthevestingperiodofsuchoptions.

Thefairmarketpriceisthelatestavailableclosingprice,priortothedateofgrant,onthestockexchangeonwhichthesharesoftheBankarelisted.Ifthesharesarelistedonmorethanonestockexchange,thenthestockexchangewherethereishighesttradingvolumeonthesaiddateisconsidered.

5.16Provisions,contingentliabilitiesandcontingentassets

AprovisionisrecognisedwhentheBankhasapresentobligationasaresultofpasteventwhereitisprobablethatanoutowofresourceswillberequiredtosettletheobligation,inrespectofwhichareliableestimatecanbemade.ProvisionsarenotdiscountedtoitspresentvalueandaredeterminedbasedonbestestimaterequiredtosettletheobligationattheBalanceSheetdate.Thesearereviewedatea

chBalanceSheetdateandadjustedtoreectthecurrentbestestimates.

Adisclosureofcontingentliabilityismadewhenthereis:

apossibleobligationarisingfromapastevent,theexistenceofwhichwillbeconrmedbyoccurrenceornonoccurrenceofoneormoreuncertainfutureeventsnotwithinthecontroloftheBank;or

apresentobligationarisingfromapasteventwhichisnotrecognisedasitisnotprobablethatanoutowofresourceswillberequiredtosettletheobligationora

reliableestimateoftheamountoftheobligationcannotbemade.

Whenthereisapossibleobligationorapresentobligationinrespectofwhichthelikelihoodofoutowofresourcesisremote,noprovisionordisclosureismade.

Contingentassetsarenotrecognisedinthenancialstatements.However,contingentassetsareassessedcontinuallyandifitisvirtuallycertainthataninowofeconomicbenetswillarise,theassetandrelatedincomearerecognisedintheperiodinwhichthechangeoccurs.

48

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18Notesformingpartofthenancialstatementsfortheyearended31March,2011(Currency:InIndianRupees)

1On17November,2010,theBoardofDirectorsofthe

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BankapprovedtheacquisitionofcertainbusinessesundertakenbyEnamSecuritiesPrivateLimited(ESPL)throughitswholly-ownedsubsidiary,AxisSecuritiesandSalesLimited(ASSL),bywayofademerger.ItisenvisagedthatthesebusinesseswillbetransferredtoASSL,pursuanttoaSchemeofArrangement,asmaybeapprovedbytherelevantHighCourtsunderSections391to394andotherrelevantprovisionsoftheCompaniesAct,1956andsubjecttoreceiptofnecessaryrequisiteapprovals.TheappointeddateforthepurposeoftheDemergerundertheSchemeshallbe1April,2010.ThevaluationoftheESPLbusinesswasassessedat 2,067croresandinconsiderationforthedemerger,theBankwillissuesharesintheratioof5.7equitysharesoftheBank(aggregating13,782,600equityshares)ofthefacevalueof 10eachforevery1equityshare(aggregating2,418,000equityshares)of 10eachheldbytheshareholdersofESPL.

2StatutorydisclosuresasperRBI

2.1.1‘Provisionsandcontingencies’recognisedintheProtandLossAccountinclude:( incrores)

Fortheyearended31March,201131March,2010

Provisionforincometax

-Currenttaxfortheyear1,953.031,492.02

-Deferredtaxfortheyear(205.52)(155.19)

Provisionforfringebenettax

(0.34)-

1,747.171,336.83

Provisionforwealthtax0.460.35

Provisionforinteresttax0.29-

Provisionfornonperformingadvances&investments(includingbaddebtswrittenoffandwritebacks)

955.121,357.04

Provisionforrestructuredassets15.0656.47

Provisiontowardsstandardassets166.16(0.91)

Provisionfordepreciationinvalueofinvestments99.27(22.23)

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Provisionforcountryrisk2.45(1.53)

Provisionforothercontingencies41.22-

Total3,027.202,726.02

2.1.2Intermsofitsguidelinesforimplementationofthenewcapitaladequacyframeworkissuedon27April,2007,RBIdirectedbankswithoverseasbranchestomigratetotherevisedframeworkforcapitalcomputation(underBaselII)witheffectfrom31March,2008.TheminimumcapitaltobemaintainedbybanksundertheRevisedFrameworkissubjecttoaprudentialoorof80%ofthecapitalrequirementunderBaselI.

49

-----------------------Page52-----------------------

ThecapitaladequacyratiooftheBank,calculatedaspertheRBIguidelines(BaselIIrequirementbeinghigher)issetoutbelow:( incrores)

31March,201131March,2010

Capitaladequacy

TierI18,503.4915,789.42

TierII6,366.866,518.47

Totalcapital24,870.3522,307.89

Totalriskweightedassetsandcontingents196,562.61141,169.77

Capitalratios

TierI

9.41%11.18%

TierII3.24%4.62%

CRAR12.65%15.80%

AmountraisedbyissueofInnovativePerpetualDebtInstruments(IPDI)--

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AmountraisedbyissueofUpperTierIIinstruments--

AmountofSubordinatedDebtraisedasTierIIcapital(detailsgivenbelow)- 2,000crores

TheBankhasnotraisedanysubordinateddebtduringtheyearended31March,2011.

Duringtheyearended31March,2010,theBankraisedsubordinateddebtof 2,000.00crores,thedetailsofwhicharesetoutbelow:

DateofallotmentPeriodCouponAmount

16June,2009120months9.15% 2,000.00crores

Duringtheyearended31March,2011,theBankredeemedsubordinateddebtof 155crores,thedetailsofwhicharesetoutbelow:

DateofmaturityPeriodCouponAmount

4June,201072months5.75% 150.00crores

20June,201093months9.05% 5.00crores

Duringtheyearended31March,2010,theBankredeemedsubordinateddebtof 30.00crores,thedetailsofwhicharesetoutbelow:

DateofmaturityPeriodCouponAmount

26April,200969months6.50% 30.00crores

2.1.3TheBankhasnotraisedanyhybridcapitalduringtheyearsended31March,2011and31March,2010.

2.1.4Thekeybusinessratiosandotherinformationissetoutbelow:

Asat

31March,201131March,2010%%Interestincomeasapercentagetoworkingfunds#7.497.73

Non-interestincomeasapercentagetoworkingfunds#2.292.62

Operatingprotasapercentagetoworkingfunds#

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2,743.7322.582,766.31

Less:-

(i)Upgradations228.59-228.59

(ii)Recoveries(excludingrecoveriesmadefromupgradedaccounts)260.239.90270.13

(iii)Write-offs667.920.25668.17

Sub-total(B)1,156.7410.151,166.89

GrossNPAsasattheendoftheyear(A-B)1,586.9912.431,599.42

( incrores)

31March,2010

AdvancesInvestmentsTotal

GrossNPAsasatthebeginningoftheyear890.487.29897.77

Additions(freshNPAs)duringtheyear1,784.6716.031,800.70

Sub-total(A)2,675.1523.322,698.47

Less:-

(i)Upgradations201.33-201.33

(ii)Recoveries(excludingrecoveriesmadefromupgradedaccounts)147.650.74148.39

(iii)Write-offs1,030.75-1,030.75

Sub-total(B)1,379.730.741,380.47

GrossNPAsasattheendoftheyear(A-B)1,295.4222.581,318.00

51

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iii)Movementinnetnon-performingassetsissetoutbelow:( incrores)

31March,2011


Openingbalanceatthebeginningoftheyear412.606.40419.00

Additionsduringtheyear453.05-453.05

Reductionsduringtheyear(452.97)(6.40)(459.37)

InterestCapitalisation–RestructuredNPAAccounts(2.33)-(2.33)

Closingbalanceattheendoftheyear410.35-410.35

( incrores)

31March,2010


Openingbalanceatthebeginningoftheyear

327.13-327.13

Additionsduringtheyear420.506.99427.49

Reductionsduringtheyear(335.03)(0.59)(335.62)

InterestCapitalisation–RestructuredNPAAccounts---

Closingbalanceattheendoftheyear412.606.40419.00

iv)Movementinprovisionsfornon-performingassetsissetoutbelow:( incrores)

31March,2011

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ProvisionforIncomeTax

a)Currenttaxfortheyear1,953.031,492.02

b)Deferredtaxfortheyear(205.52)(155.19)

c)Provisionforfringebenettax(0.34)-

1,747.171,336.83

53

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2.1.10DetailsofInvestmentsaresetoutbelow:

i)ValueofInvestments:( incrores)


1)GrossvalueofInvestments

a)InIndia71,641.5155,401.96

b)OutsideIndia

631.99759.22

2)(i)ProvisionforDepreciation

a)InIndia210.6289.37

b)OutsideIndia58.8380.81

(ii)ProvisionforNon-PerformingInvestments

a)InIndia

12.4316.18

b)OutsideIndia--

3)NetvalueofInvestments

a)InIndia71,418.4655,296.41

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( incrores)

Asat31March,201131March,2010B.ExposuretoCapitalMarket1.Directinvestmentsinequityshares,convertiblebonds,convertibledebenturesandunitsofequity-orientedmutualfundsthecorpusofwhichisnotexclusivelyinvestedincorporatedebt999.71910.982.Advancesagainstshares/bonds/debenturesorothersecuritiesoroncleanbasistoindividualsforinvestmentinshares(includingIPOs/ESOPs),convertiblebonds,convertibledebentures,andunitsofequity-orientedmutualfunds5.6711.113.Advancesforanyotherpurposeswheresharesorconvertiblebondsorconvertibledebenturesorunitsofequity-orientedmutualfundsaretakenasprimarysecurity256.75249.314.Advancesforanyotherpurposestotheextentsec

uredbythecollateralsecurityofsharesorconvertiblebondsorconvertibledebenturesorunitsofequity-orientedmutualfundsi.e.whereprimarysecurityotherthanshares/convertiblebonds/convertibledebentures/unitsofequity-orientedmutualfundsdoesnotfullycovertheadvances7.557.825.Securedandunsecuredadvancestostockbrokersandguaranteesissuedonbehalfofstockbrokersandmarketmakers1,966.191,568.64

6.Loanssanctionedtocorporatesagainstthesecurityofshares/bonds/debenturesorothersecuritiesoroncleanbasisformeetingpromoter’scontributiontotheequityofnewcompaniesinanticipationofraisingresources47.44-7.Bridgeloanstocompaniesagainstexpectedequityows/issues0.31-8.Underwritingcommitmentstakenupinrespectofprimaryissueofsharesorconvertiblebondsorconvertibledebenturesorunitsof

equity-orientedmutualfunds--9.Financingtostockbrokersformargintrading--10.AllexposurestoVentureCapitalFunds(bothregisteredandunregistered)258.13258.43TotalexposuretoCapitalMarket(Totalof1to10)3,541.753,006.29

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2.1.12Detailsofloanassetssubjectedtorestructuringduringtheyearsended31March,2011and31March,2010aregivenbelow:( incrores)

Particulars31March,2011CDRSMEDebtOthersMechanismRestructuringi)StandardadvancesNo.ofborrowers24117restructuredAmountoutstanding–Restructuredfacility#96.5547.22259.96

Amountoutstanding–Otherfacilities2.895.4715.32Sacrice(diminutioninthefairvalue)14.183.972.58

55

-----------------------Page58-----------------------

( incrores)

Particulars31March,2011CDRSMEDebtOthersMechanismRestructuring

ii)Sub-StandardNo.ofborrowers---advancesAmountoutstanding–Restructuredfacility---restructuredAmountoutstanding–Otherfacilities---Sacrice(diminutioninthefairvalue)---iii)DoubtfuladvancesNo.ofborrowers---restructuredAmountoutstanding–Restructuredfacility---Amountoutstanding–Otherfacilit

ies---Sacrice(diminutioninthefairvalue)---TotalNo.ofborrowers24117Amountoutstanding–Restructuredfacility96.5547.22259.96Amountoutstanding–Otherfacilities2.895.4715.32Sacrice(diminutioninthefairv

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i)Issuercompositionasat31March,2011ofnon-SLRinvestments:( incrores)

No.IssuerTotalExtentofExtentofExtentofExtentofAmountprivate“below“unrated”“unlisted”placementinvestmentsecuritiessecuritiesgrade”securities(1)(2)(3)(4)(5)(6)(7)

i.PublicSectorUnits2,107.651,081.311.00-10.00

ii.FinancialInstitutions7,158.124,946.68--4,114.56

iii.Banks4,087.161,687.6

710.00-3,102.52

iv.PrivateCorporates13,552.1710,986.87535.10229.851,226.48

v.Subsidiaries/JointVentures259.55259.55--259.55

vi.Others901.31847.18--407.38

vii.Provisionheldtowardsdepreciationoninvestments(216.86)

viii.Provisionheldtowardsnonperforminginvestments(12.43)

Total27,836.6719,809.26546.10229.859,120.49

Amountsreportedundercolumns(4),(5),(6)and(7)abovearenotmutuallyexclusive.

Issuercompositionasat31March,2010ofnon-SLRinvestments:( incrores)

No.IssuerTotalExtentofExtentofExtentofExtentofAmountprivate“below“unrated”“unlisted”placementinvestmentsecuritiessecuritiesgrade”

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securities

(1)(2)(3)(4)(5)(6)(7)

i.PublicSectorUnits1,861.89920.6112.31-10.00

ii.FinancialInstitutions6,652.524,974.48--3,276.26

iii.Banks3,346.88650.9310.00-2,271.64

iv.PrivateCorporates9,092.607,962.981,243.75786.451,229.51

v.Subsidiaries/JointVentures153.55153.55--153.55

vi.Others847.57771.807.00-847.57

vii.Provisionheldtowards

depreciationoninvestments(159.89)

viii.Provisionheldtowardsnonperforminginvestments(16.18)

Total21,778.9415,434.351,273.06786.457,788.53

Amountsreportedundercolumns(4),(5),(6)and(7)abovearenotmutuallyexclusive.

57

-----------------------Page60-----------------------

ii)Non-performingnonSLRinvestmentsissetoutbelow:( incrores)


Openingbalance22.587.29

Additionsduringtheyear-16.03

Reductionsduringtheyear10.150.74

Closingbalance12.4322.58

Totalprovisionsheld

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12.4316.18

2.1.15Detailsofsecuritiessold/purchased(infacevalueterms)duringtheyearsended31March,2011and31March,2010underrepos/reverserepos(excludingLAFtransactions):

Yearended31March,2011( incrores)

MinimumMaximumDailyAverageAsat31outstandingoutstandingoutstandingMarch,2011duringtheyearduringtheyearduringtheyear

Securitiessoldunderrepos

i.GovernmentSecurities-220.0030.93-

ii.CorporatedebtSecurities----

Securitiespurchasedunderreverserepos

i.GovernmentSecurities-3,919.8234.20-



Mini

mumMaximumDailyAverageAsat31outstandingoutstandingoutstandingMarch,2010duringtheyearduringtheyearduringtheyear

Securitiessoldunderrepos



Securitiespurchasedunderreverserepos



2.1.16DetailsofnancialassetssoldtoSecurtisation/Reconstructio

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ncompaniesforAssetReconstruction:( incrores)


Numberofaccounts*-1

Bookvalueofloanassetsecuritised-13.21

Aggregatevalue(netofprovisions)ofaccountssold--

Aggregateconsideration-9.00

Additionalconsiderationrealisedinrespectofaccountstransferredinearlieryears--

Aggregategain/lossovernetbookvalue-9.00

*Excludesaccountspreviouslywritten-off

58

-----------------------Page61-----------------------

2.1.17Duringtheyearsended31March,2011and31March,2010therewerenoNon-PerformingFinancialAssetsPurchasedorSold(excludingaccountspreviouslywrittenoff)bytheBank.

2.1.18DetailsofsecurtisationtransactionsundertakenbytheBankduringtheyearareasfollows:( incrores)


Numberofloanaccountssecurtised37

Bookvalueofloanassetssecuritised

301.662,153.80

Saleconsiderationreceivedforthesecurtisedassets308.972,173.10

Netgain/lossovernetbookvalue7.3119.30

Netgain/lossrecognisedintheProtandLossAccount7.3115.45

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53,184.0144,659.73

Percentageofexposurestotwentylargestborrowers/customerstototalexposureonborrowers/customers15.1313.32

*Exposureincludescreditexposure(fundedandnon-funded),derivativeexposureandinvestmentexposure(includingunderwritingandsimilarcommitments)

59

-----------------------Page62-----------------------

2.1.22Duringtheyear,theBank’screditexposuretosingleborrowerwaswithintheprudentialexposurelimitsprescribedbyRBIexceptin2cases,wherethesingleborrowerlimitwasexceededuptoanadditionalexposureof5%,thedetailsofwhicharesetoutbelow:

( incrores)

NameofthePeriodOriginalLimit%ofexcesslimitExposureExposureasBorrowerExposureSanctionedsanctionedoverCeilingason31on31March,CeilingoriginalceilingMarch,20112011HousingDevelopmentFinanceFeb2011CorporationandMarchLimited20113,346.184,227.7226.343,346.184,418.99#

LICHousingMarchFinanceLtd.@20113,346.183,563.856.513,346.183,130.77

#theexcessofthelimitof 4,227.72croresovertheoriginalexposureceilingwasapprovedbytheCommitteeofDirectors.However,theexcessoftheexposureason31March,2011overthelimitapprovedbytheCommitteeissubjecttoraticationoftheCommittee.

@theexcessofthelimitof 3,563.85croresovertheoriginalexposureceilingissubjecttoraticationbythe

CommitteeofDirectors.

Duringtheyear,theBank’screditexposuretogroupborrowerswaswithintheprudentialexposurelimitsprescribedbyRBI.

Duringtheyearended31March,2010,theBank’screditexposuretosingleborrowerwaswithintheprudentialexposurelimitsprescribedbyRBIexceptinonecase,wheresingleborrowerlimitwasexceededuptoanadditional

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exposureof5%withtheapprovaloftheBoardofDirectors.Thedetailsofsuchcasesaresetoutbelow:

( incrores)

NameofthePeriodOriginalLimit%ofexcesslimitExposureExposureasBorrowerExposureSanctionedsanctionedoverCeilingason31on31March,CeilingoriginalceilingMarch,20102010UTIAssetApril2009ManagementandMayCompanyLtd.20092,254.152,300.002.033,119.223,110.00

Duringtheyearended31March,2010,theBank’screditexposuretogroupborrowerswaswithintheprudentialexposurelimitsprescribedbyRBI.

2.1.23DetailsofRiskCategorywiseCountryExposure:( incrores)

RiskCategoryExposure(Net)asatProvisionHeldasatExposure(Net)asatProvisionHeldasat31March,201131March,201131March,201031March,2010Insignicant459.58-597.19-Low9,160.684.827,489.892.37Moderate2,447.75-662.80-High467.93-90.86-

VeryHigh338.95-2.88-Restricted--0.85-Off-Credit----Total12,874.894.828,844.472.37

60

-----------------------Page63-----------------------

2.1.24Amaturitypatternofcertainitemsofassetsandliabilitiesat31March,2011and31March,2010issetoutbelow:


1day2daysto8daysto15days29daysOver3Over6Over1Over3Over5Total

7days14daysto28andupto

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monthsmonthsyearandyearsandyears

days3monthsanduptoanduptoupto3upto5

6months1yearyearsyears

Deposits1,645.417,423.764,835.597,521.0823,528.6117,930.6937,057.2726,810.3411,866.6450,618.41189,237.80

Advances2,874.453,635.781,003.042,440.769,587.408,162.2111,815.4035,236.9219,459.5048,192.37142,407.83

Investments844.611,794.913,247.244,609.3910,350.695,319.049,335.1313,416.948,181.9214,891.7571,991.62

Borrowings111.49981.0944.591,293.424,934.342,384.522,537.643,648.102,036.468,296.2326,267.88

Foreign

Currency

Assets1,436.871,054.10322.481,349.582,810.683,273.192,927.724,773.504,764.863,838.6326,551.61

Foreign

Currency

Liabilities760.221,620.46252.121,967.775,284.184,358.294,506.452,552.871,992.274,215.2227,509.85


1day2daysto8daysto15days29daysOver3Over6Over1Over3Over5Total

7days14daysto28anduptomonthsmonthsyearandyearsandyears

days3monthsanduptoanduptoupto3upto5

6months1yearyearsyears

Deposits2,699.434,379.363,059.544,115.5415,647.72

19,789.8628,357.4123,418.07470.0439,363.25141,300.22

Advances736.722,413.131,124.781,057.755,690.325,557.0011,183.2511,861.4312,318.6552,397.92104,340.95

Investments885.57986.172,562.543,991.387,724.616,278.447,873.4211,403.712,436.8311,832.1555,974.82

Borrowings251.44269.40130.91134.701,119.331,330.883,409.082,181.89422.347,919.5817,169.55

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Foreign

Currency

Assets1,487.10376.06117.45395.582,718.832,275.252,755.243,412.692,920.962,170.5018,629.66

Foreign

Currency

Liabilities1,054.771,063.29249.42235.131,718.642,861.583,503.992,128.7586.373,502.5916,404.53

ClassicationofassetsandliabilitiesunderthedifferentmaturitybucketsisbasedonthesameestimatesandassumptionsasusedbytheBankforcompilingthereturnsubmittedtotheRBI,whichhasbeenrelieduponbytheauditors.Maturityproleofforeigncurrencyassetsandliabilitiesisexcludingforwardcontracts.

2.1.25DisclosureinrespectofInterestRateSwaps(IRS),ForwardRateAgreement(FRA)andCrossCurrencySwaps(CCS)

outstandingissetoutbelow:

( incrores)

Sr.No.ItemsAsat31March,Asat31March,20112010

i)Notionalprincipalofswapagreements164,697.20131,696.28

ii)Losseswhichwouldbeincurredifcounterpartiesfailedtofullltheirobligationsundertheagreements1,444.541,335.46

iii)CollateralrequiredbytheBankuponenteringintoswaps**123.3622.77

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-----------------------Page64-----------------------

( incrores)

Sr.No.ItemsAsat31March,Asat31March,20112010

iv)Concentrationofcreditriskarisingfromtheswap

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s

MaximumsingleindustryexposurewithBanks(previousyearwithBanks)

-InterestRateSwaps/FRAs2,174.952,051.64

-CrossCurrencySwaps401.53400.46

v)Fairvalueoftheswapbook(hedging&trading)

-InterestRateSwaps/FRAs1.0837.50

-CurrencySwaps61.0911.54

**Totalcashcollateralstakenfromcounterpartieshavingoutstandingderivativecontracts

ThenatureandtermsoftheIRSason31March,2011arese

toutbelow:

( incrores)

NatureNos.NotionalPrincipalBenchmarkTerms

Hedging132,943.27LIBORFixedreceivablev/soatingpayable

Trading1,33863,520.00MIBORFixedreceivablev/soatingpayable

Trading1,31961,967.50MIBORFixedpayablev/soatingreceivable

Trading1184,639.50MIFORFixedreceivablev/soatingpayable

Trading1013,469.00MIFORFixedpayablev/soatingreceivable

Trading622,621.10INBMKFixedreceivablev/soatingpayable

Trading734,589.00INBMKFixedpayablev/soatingreceivable

Trading1083,575.99LIBORFixedreceivablev/soatingpayable

Trading1485,341.90LIBORFixedpayablev/soatingreceivable

Trading1150.00O

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THERSFixedpayablev/sxedreceivable

Trading3138.24LIBORFloatingpayablev/soatingreceivable

Trading1367.91LIBORPayCap/receiveFloor

Trading1367.91LIBORPayFloor/receiveCap

3,286153,691.32

ThenatureandtermsoftheIRSason31March,2010aresetoutbelow:

( incrores)


Hedging241,000.00MIBORFixedpayablev/soatingreceivable

Hedging2100.00MIBORFixedreceivablev/soatingpayable

Hedging71,391.90LIBORFixedreceivablev/soatingpayable

Trading1,23351,720.00MIBORFixedreceivablev/soatingpayable

Trading1,24253,647.50MIBORFixedpayablev/soatingreceivable

Trading1033,045.50MIFORFixedreceivablev/soatingpayable

62

-----------------------Page65-----------------------

( incrores)


Trading1002,789.50MIFORFixedpayablev/soatingreceivable

Trading742,946.10INBMKFixedreceivablev/soatingpayable

Trading703,464.00INBMKFixedpayablev/soatingreceivable

Trading701,933.92LIBOR

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90DayEuro$Futures-June1035.92

90DayEuro$Futures–March1053.88

90DayEuro$Futures-Septemer09130.21

64

-----------------------Page67-----------------------

( incrores)

Sr.No.ParticularsAsat31March,2010

AUST10YBondFutures-June0969.98

AUST10YBondFutures-September09

58.45

EURO-BUNDFutures-June095,133.63

EURO-BUNDFutures-September094,984.91

EURO-SCHATZFutures-June09495.71

EURO-SCHATZFutures-September09350.62

JPN10YBOND(TSE)-June099.61

US10YearsNoteFuture-June09251.44

US10YearsNoteFuture-September09325.08

10Years7%GOISecurity-December0969.16

10Years7%GOISecurity-March1036.44

10Years7%GOISecurity-June1014.48

12,547.58

ii)Notionalprincipalamountofexchangetradedinterestrate

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derivativesoutstandingason31March,2010

90DayEuro$Futures-March114.49



90DayEuro$Futures-September1013.47

90DayEuro$Futures-December1013.47

10years7%GOISecurity-June102.80

61.17

iii)Notionalprincipalamountofexchangetra

dedinterestratederivativesoutstandingason31March,2010and“nothighlyeffective”N.A.

iv)Mark-to-marketvalueofexchangetradedinterestratederivativesoutstandingason31March,2010and“nothighlyeffective”N.A.

2.1.26DisclosureonriskexposureinDerivatives

Qualitativedisclosures:

(a)Structureandorganisationformanagementofriskinderivativestrading,thescopeandnatureofriskmeasurement,riskreportingandriskmonitoringsystemsandstrategiesandprocessesformonitoringthecontinuingeffectivenessofhedges/mitigants:

Derivativesarenancialinstrumentswhosecharacteristicsarederivedfromanunderlyingasset,orfrominterestandexchangeratesorindices.TheBankundertakesderivativetransactionsforBalanceSheetmanagementandalsoforproprietarytrading/marketmakingwherebytheBankof

fersderivativeproductstothecustomerstoenablethemtohedgetheirearningsriskswithintheprevalentregulatoryguidelines.

ProprietarytradingincludesInterestRateFuturesandRupeeInterestRateSwapsunderdifferentbenchmarks(viz.MIBOR,MIFORandINBMK),CurrencyFuturesandCurrencyOptionsforUSD/INRpair(bothOTCandexchangetraded).TheBankalsoundertakestransactionsinCrossCurrencySwaps,PrincipalOnlySwaps,

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65

-----------------------Page68-----------------------

CouponOnlySwaps,andLongTermForexContracts(LTFX)forhedgingitsBalanceSheetandalsooffersthemtoitscustomers.ThesetransactionsexposetheBanktovariousrisks,primarilycredit,marketandoperationalrisk.TheBankhasadoptedthefollowingmechanismformanagingrisksarisingoutofthederivativetransactions.

ThereisafunctionalseparationbetweentheTreasuryFrontOfce,RiskandTreasuryBackOfcetoundertakederivativetransactions.ThederivativetransactionsareoriginatedbyTreasuryFrontOfce,whichensurescompliancewiththetradeoriginationrequirementsaspertheBank’spolicyandtheRBIguidelines.TheMarketRiskGroupwithintheBank’sRiskDepartmentindependentlyidenties,measuresandmonitorsthemarketrisksassociatedwithderivativetransactionsandappraisestheAssetLiabilityManagementCommittee(ALCO)

andtheRiskManagementCommitteeoftheBoard(RMC)onthecompliancewiththerisklimits.TheTreasuryBackOfceundertakesactivitiessuchasconrmation,settlement,ISDAdocumentation,accountingandotherMISreporting.

Thederivativetransactionsaregovernedbythederivativepolicy,hedgingpolicyandthesuitabilityandappropriatenesspolicyoftheBankaswellasbytheextantRBIguidelines.TheBankhasalsoputinplaceadetailedprocessowforcustomerderivativetransactionsforeffectivemanagementofoperationalrisk/reputationrisk.

Variousrisklimitsaresetupandactualexposuresaremonitoredvis-à-visthelimits.Theselimitsaresetuptakingintoaccountmarketvolatility,businessstrategyandmanagementexperience.Risklimitsareinplaceforriskparametersviz.PV01,VaR,stoploss,Delta,GammaandVega.Actualpositionsaremonitoredagainsttheselimitsonadailybasisandbreaches,ifany,arereportedpromptly.Riskassessmentoftheportfolioisundertakenperiodically.TheBankensuresthattheGrossPV01(Pricevalueofabasispoint)positionarisingoutofallnon-optionrupeederivativecontractsarewithin0.25%ofnetworthoftheBankasonBalanceSheet

date.

HedgingtransactionsareundertakenbytheBanktoprotectthevariabilityinthefairvalueorthecashowoftheunderlyingBalanceSheetitem.Thesedealsareaccountedonanaccrualbasisexcepttheswapdesignatedwithanasset/liabilitythatiscarriedatmarketvalueorlowerofcostormarketvalue.Inthatcase,theswapismarkedtomarketwiththeresultinggainorlossrecordedasanadjustmenttothemarketvalueofdesignated

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I)Minimum0.08-30.31

II)Maximum0.92-137.59

#Onlyontradingderivativesandrepresentsnetposition

@Includesaccruedinterest

67

-----------------------Page70-----------------------

( incrores)

Asat31March,2010

CurrencyDerivativesInterestrate

Derivatives

Sr.No.ParticularsCCSOptions

1Derivatives(NotionalPrincipalAmount)

a)Forhedging134.70-2,491.90

b)Fortrading3,829.645,616.26125,240.04

2MarkedtoMarketPositions#

a)Asset(+)16.8515.74-

b)Liability(-)--(1.03)[email protected],286.34

4Likelyimpactofonepercentagechangeininterestrate(100*PV01)(asat31March,2010)

a)onhedgingderivatives0.01-54.56

b)ontradingderivatives0.57-73.01

5MaximumandMinimumof100*PV01observedduringtheyear

a)onhedging

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I)Minimum0.01-32.17


b)ontrading

I)Minimum0.57-6.23


#Onlyontradingderivativesandrepresentsnetposition

@Includesaccruedinterest

Thenotionalprincipalamountofforexcontractsclassiedashedgingandfundingoutstandingat31March,2011amountedto 5,735.03crores(previousyear 2,359.59crores)and 1,131.25crores(previousyear 2,432.42crores)respectively.Thenotionalprincipalamountofforex

contractsclassiedastradingoutstandingat31March,2011amountedto 160,404.84crores(previousyear 99,041.90crores).

Thenetovernightopenpositionat31March,2011is 26.39crores(previousyear 152.03crores).

2.1.27Nopenalty/strictureshavebeenimposedontheBankduringtheyearorinthepreviousyearbytheReserveBankofIndia.

2.1.28DisclosureofCustomerComplaints


a.No.ofcomplaintspendingatthebeginningoftheyear8070

b.No.ofcomplaintsreceivedduringtheyear12,7664,581

c.No.ofcomplaintsredressedduringtheyear12,8304,571

d.No.ofcomplaintspendingattheendoftheyear

1680

TheaboveinformationisascertiedbytheManagementandrelieduponbytheauditors.

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2.1.29DisclosureofAwardspassedbytheBankingOmbudsman

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a.No.ofunimplementedawardsatthebeginningoftheyear--

b.No.ofawardspassedbytheBankingOmbudsmanduringtheyear28

c.No.ofawardsimplementedduringtheyear28

d.No.ofunimplementedawardsattheendoftheyear--

TheaboveinformationisascertiedbytheManagementandrelieduponbytheauditors.

2.1.30DrawDownfromReserves

Duringtheyear,theBankhasmadeadrawdownoutoftheinvestmentreserveaccounttowardsdepreciationininvestmentsinAFSandHFTcategoriesintermsoftheRBIguidelines.

2.1.31LetterofComfort

TheBankhasnotissuedanyLetterofComfort(LoC)onbehalfofitssubsidiaries.

2.1.32BancassuranceBusiness

Detailsofincomeearnedfrombancassurancebusinessareasunder:( incrores)

Sr.NoNatureofIncome


1.Forsellinglifeinsurancepolicies133.2794.89

2.Forsellingnon-lifeinsurancepolicies23.0430.20

3.Forsellingmutualfundproducts44.3440.12

4.Others(sellingofonlinetradingaccounts,goldcoins,wealth28.7219.48

advisory,RBIandotherbonds)

Total229.37184.69

2.1.33TheBankhasnotsponsoredanyspecialpurposevehiclewhichisrequiredtobeconsolidatedintheconsolidatednancialstatementsasperaccountingnorms.

2.1.34Amountoftotalassets,non-performingassetsandrevenueofoverseasb

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31March,201131March,2010NetProt(asreported)( incrores)3,388.492,514.53Add:Stockbasedemployeecompensationexpenseincludedinnetincome( incrores)--Less:Stockbasedemployeecompensationexpensedeterminedunderfairvaluebasedmethod(proforma)( incrores)(107.97)(92.75)NetProt(Proforma)( incrores)3,280.522,421.78Earningspershare:Basic(in )Asreported82.9565.78Proforma80.3163.35Earningspershare:Diluted(in )Asreported81.6164.31Proforma79.0161.94

ThefairvalueoftheoptionsisestimatedonthedateofthegrantusingtheB

lack-Scholesoptionspricingmodel,withthefollowingassumptions:

31March,201131March,2010Dividendyield1.24%to1.32%1.32%Expectedlife2-4years2-4yearsRiskfreeinterestrate5.98%to7.17%3.87%to6.80%Volatility54.72%to61.66%54.00%to67.11%

Volatilityisthemeasureoftheamountbywhichapricehasuctuatedorisexpectedtouctuateduringaperiod.ThemeasureofvolatilityusedintheBlack-Scholesoptionspricingmodelistheannualisedstandarddeviationofthecontinuouslycompoundedratesofreturnonthestockoveraperiodoftime.Forcalculatingvolatility,thedailyvolatilityofthestockpricesontheNationalStockExchange,overaperiodpriortothedateofgrant,correspondingwiththeexpectedlifeoftheoptionshasbeenconsidered.

Theweightedaveragefairvalueofoptionsgrantedduringtheyearended31March,2011is 485.98(previous

year 205.72).

71

-----------------------Page74-----------------------

2.2.4Dividendpaidonsharesissuedonexerciseofstockoptions

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AssuranceCo.Ltd.,NationalInsuranceCo.Ltd.,UnitedIndiaInsuranceCo.Ltd.andTheOrientalInsuranceCo.Ltd.

b)KeyManagementPersonnel

c)RelativesofKeyManagementPersonnel

Mr.SanjayaSharma,Mrs.UshaBharadwaj,Mr.TilakSharma,Ms.TvishaSharma,Dr.SanjivBharadwaj,Dr.PrashantBharadwaj,Dr.BrevisBharadwaj,Dr.ReenaBharadwaj,Mrs.BhartiAgrawal,Mr.VedprakashAgrawal,Mrs.GayatriDeviAgrawal,Mr.AmitM.Agrawal,Mrs.RinkiAgrawal,MasterKaustubhAgrawal,Ms.PrashastiAgrawal,Mr.AnandAgrawal,Mr.PraveenAgrawal,Mrs.Rekha

Agrawal,Mrs.RenuAgrawal,Mrs.MeenuAgrawal,Mrs.SwapnaChakraborty,Mrs.ShikhaBhattacharya,Ms.ShilaChakraborty,Mr.HirendraNathChakraborty,Mr.RajatChakraborty,Mrs.DevikalpaChakraborty(Kundu),MasterAhanChakraborty,Mr.NabakumarChakraborty,Mr.PrabirChakraborty,Mrs.MinatiChakraborty,Mrs.KrishnaChakraborty,Mrs.SipraChakraborty,Mr.AsimKumarChakraborty,Mr.ArunabhaBhattacharya

d)SubsidiaryCompanies

e)Associate

TheaboveinvestmentdoesnotfallwithinthedenitionofaJointVentureasperAS27,FinancialReportingofInterestinJointVentures,notiedundertheCompanies(AccountingStandards)Rules,2006,andthesaidaccountingstandardisthusnotapplicable.However,pursuanttoRBIguidelines,theBankhasclassiedthesameasinvestmentinjointventuresintheBalanceSheet.Suchinvestmenthas

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ManagementContractsandOtherreimbursements-5.46*-10.3415.80

PurchaseofFixedAssets-----

Non-fundedcommitments0.01---0.01

Advancegranted-----

Advancerepaid-0.12--0.12

Saleofxedassets-----

ReceivingofServices45.40--105.33150.73

RenderingofServices2.51--10.8813.39

OtherReimbursementstoRelatedParties0.15--0.540.69

*includes 0.70croresubjecttoapprovalofshareholders

Thebalancespayableto/receivablefromtherelatedpartiesoftheBankason31March,2011aregivenbelow:

( incrores)

Items/RelatedPartyPromoters

KeyRelativesSubsidiariesTotalManagementofKeyPersonnelManagementPersonnelBorrowingsfromtheBank-----DepositswiththeBank4,716.080.230.2371.374,787.91PlacementofDeposits0.16---0.16

Advances43.000.27--43.27InvestmentoftheBank---220.55220.55InvestmentofRelatedPartiesintheBank152.780.04--152.82RepoBorrowings-----Non-fundedcommitments3.01---3.01

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76

-----------------------Page79-----------------------

( incrores)

Items/RelatedPartyPromotersKeyRelativesSubsidiariesTotalManagementofKeyPersonnelManagementPersonnelInvestmentinSubordinatedDebt/HybridCapitaloftheBank2,825.00---2,825.00AdvanceforRenderingofServices-----Leasing/HParrangementsavailed-----Leasing/HParrangementsprovided--

---OtherReceivables---0.570.57OtherPayables---14.2714.27

Themaximumbalancespayableto/receivablefromtherelatedpartiesoftheBankduringtheyearended31March,2011aregivenbelow:( incrores)

Items/RelatedPartyPromotersKey

RelativesSubsidiariesTotalManagementofKeyPersonnelManagementPersonnelBorrowingsfromtheBank-----DepositswiththeBank4,716.093.944.9681.854,806.84PlacementofDeposits0.16---0.16

Advances132.470.39-0.31133.17InvestmentoftheBank---220.55220.55InvestmentofRelatedPartiesintheBank156.150.04--156.19RepoBorrowing-----InvestmentinSubordinatedDebt/HybridCapitaloftheBank2,825.00-

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non-cancellablesubleases1.211.15Sub-leasepaymentsrecognisedintheProtandLossAccountfortheyear0.910.61

TheBankhassub-leasedcertainofitspropertiestakenonlease.

Therearenoprovisionsrelatingtocontingentrent.

Thetermsofrenewal/purchaseoptionsandescalationclausesarethosenormallyprevalentinsimilaragreements.

Therearenounduerestrictionsoronerousclausesintheagreements.

79

-----------------------Page82-----------------------

2.2.8OtherFixedAssets(includingfurniture&xtures)

Themovementinxedassetscapitalisedasapplicationsoftwareisgivenbelow:

( incrores)

Particulars31March,201131March,2010

Atcostatthebeginningoftheyear266.73220.20

Additionsduringtheyear65.2347.11

Deductionsduringtheyear

(1.68)(0.58)

Accumulateddepreciationasat31March(208.38)(162.21)

Closingbalanceasat31March121.90104.52

Depreciationchargefortheyear46.8737.26

2.2.9Themajorcomponentsofdeferredtaxassetsanddeferredtaxliabilitiesarisingoutoftimingdifferencesareas

under:

( incrores)

Asat31March,201131March,2010

Deferredtaxassetsonaccountofprovisionsfordoubtfuldebts574.23421.52

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NetAsset(2.78)(1.41)

Changesinthepresentvalueofthedenedbenetobligationareasfollows:( incrores)


ChangeinDenedBenetObligation

OpeningDenedBenetObligation42.5636.37

CurrentServiceCost9.038.67

InterestCost3.852.93

ActuarialLosses/(Gains)(0.11)(3.65)

Pastservicecost8.75-

BenetsPaid(3.43)(1.76)

ClosingDenedBenetObligation60.6542.56

81

-----------------------Page84-----------------------

Changesinthefairvalueofplanassetsareasfollows:( incrores)


ChangeintheFairValueofAssets

OpeningFairValueofPlanAssets43.9729.75

ExpectedReturnonPlanAssets3.342.58

ActuarialGains/(Losses)(0.78)0.46

ContributionsbyEmployer20.3312.94

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theauditors.

2.2.14Descriptionofcontingentliabilities:

a)ClaimsagainsttheBanknotacknowledgedasdebts

TheserepresentclaimsledagainsttheBankinthenormalcourseofbusinessrelatingtovariouslegalcasescurrentlyinprogress.ThesealsoincludedemandsraisedbyincometaxandotherstatutoryauthoritiesanddisputedbytheBank.

b)Liabilityonaccountofforwardexchangeandderivativecontracts

TheBankentersintoforeignexchangecontracts,currencyoptions/swaps,interestratefuturesandforwardrateagreementsonitsownaccountandforcustomers.Forwardexchangecontractsarecommitmentstobuyorsellforeigncurrencyatafuturedateatthecontractedrate.Currencyswapsarecommitmentstoexchangecashowsbywayofinterest/principalintwocurrencies,basedonrulingspotrates.Interestrateswapsarecommitmentstoexchangexedandoatinginterestratecash

ows.Interestratefuturesarestandardised,exchange-tradedcontractsthatrepresentapledgetoundertakeacertaininterestratetransactionataspeciedprice,onaspeciedfuturedate.Forwardrateagreementsareagreementstopayorreceiveacertainsum

84

-----------------------Page87-----------------------

basedonadifferentialinterestrateonanotionalamountforanagreedperiod.Aforeigncurrencyoptionisanagreementbetweentwopartiesinwhichonegrantstotheotherthe

righttobuyorsellaspeciedamountofcurrencyataspecicpricewithinaspeciedtimeperiodorataspeciedfuturetime.

c)Guaranteesgivenonbehalfofconstituents

Asapartofitsbankingactivities,theBankissuesguaranteesonbehalfofitscustomerstoenhancetheircreditstanding.GuaranteesrepresentirrevocableassurancesthattheBankwillmakepaymentsintheeventofthecustomerfailingtofulllitsnancialorperformanceobligations.

d)Acceptances,endorsementsandotherobligations

TheseincludedocumentarycreditissuedbytheBankonbehalfofitscustomersandbillsdrawnbytheBank’scustomersthatareacceptedorendorsedbytheBank.

e)Otheritems

OtheritemsrepresentoutstandingamountofbillsrediscountedbytheBank,estimatedamountofcontractsremainingtobeexecutedoncapitalaccountandcommitmentstoward

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WefurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheBanknortheefciencyoreffectivenesswithwhichtheManagementhasconductedtheaffairsoftheBank.

ForDELOITTEHASKINS&SELLSCharteredAccountants(RegistrationNo.117365W)

Z.F.BillimoriaPartner(MembershipNo.42791)

Place:MumbaiDate:22ndApril,2011

86

-----------------------Page89-----------------------

CORPORATEGOVERNANCE

(FormingPartoftheDirectors’Reportfortheyearended31March,2011)

1.PhilosophyonCodeofGovernance

TheBank’spolicyonCorporateGovernancehasbeen:

I.Toenhancethelongterminterestofitsshareholdersandtoprovidegoodmanagement,theadoptionofprudentriskmanagementtechniquesandcompliancewiththerequiredstandardsofcapitaladequacy,therebysafeguardingtheinterestofitsotherstakeholderssuchasdepositors,creditors,customers,suppliersandemployees.

II.ToidentifyandrecognisetheBoardofDirectorsandtheManagemento

ftheBankastheprincipalinstrumentsthroughwhichgoodcorporategovernanceprinciplesarearticulatedandimplemented.Further,toidentifyandrecogniseaccountability,transparencyandequalityoftreatmentforallstakeholders,ascentraltenetsofgoodcorporategovernance.

2.BoardofDirectors

ThecompositionoftheBoardofDirectorsoftheBankisgovernedbytheCompaniesAct,1956,theBankingRegulationAct,1949andtheClause49oftheListingAgreement.TheBank’sBoardcomprisesacombinationofexecutiveandnon-

executiveDirectors.TheBoardpresentlyconsistsof14Directorsanditsmixprovidesacombinationofprofessionalism,knowledgeandexperiencerequiredinthebankingbusiness.TheBoardisresponsibleforthemanagementoftheBank’sbusiness.Thefunctions,responsibilities,roleandaccountabilityoftheBoardarewelldened.Inadditiontomonitoringcorporateperformance,theBoardalsocarriesoutfunctionssuchastakingcareofallstatutoryagenda,approvingtheBusinessPlan,reviewingandapprovingtheannualbudgetsandborrowinglimits,andxingexposure

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limits.ItensuresthattheBankkeepsshareholdersinformedaboutplans,strategiesandperformance.ThedetailedreportsoftheBank’sperformanceareperiodicallyplacedbeforetheBoard.ShriS.B.MathurhasbeenappointedastheLeadIndependentDirector.

ThecompositionoftheBank’sBoardincludestherepresentativesoftheAdministratoroftheSpeciedUndertakingoftheUnitTrustofIndia(SUUTI),andtheLifeInsuranceCorporationofIndia,theBank’spromoters.ThefollowingmembersnowconstitutetheBoard:

AdarshKishoreChairmanPromoter–NomineeofSUUTIShikhaSharmaManagingDirectorandChiefExecutiveOfcerS.K.ChakrabartiDeputyManagingDirectorJ.R.VarmaIndependentR.H.PatilIndependentRamaBijapurkarIndependentR.B.L.VaishPromoter–NomineeoftheLifeInsuranceCorporationofIndiaM.V.SubbiahIndependentK.N.PrithvirajPromoter–NomineeofSUUTI

V.R.KaundinyaIndependentS.B.MathurIndependentS.K.RoongtaIndependentPrasadR.MenonIndependentR.N.BhattacharyyaPromoter–NomineeofSUUTI

Ofthese,allDirectorsareindependentexceptDr.AdarshKishore,Smt.ShikhaSharma,ShriS.K.Chakrabarti,ShriR.B.L.Vaish,ShriK.N.PrithvirajandShriR.N.Bhattacharyya.Thus,the8IndependentDirectorsconstitutemorethanone-halfoftheBoard’smembership.ShriM.S.SundaraRajanhadjoinedtheBoardon8June,2010andresignedw.e.f.22February,2011.ShriM.S.SundaraRajancouldnotattendanymee

tingoftheBoardoranyCommitteeinwhichhewasamemberashewasawaitingpermissionfromtheMinistryofFinance/RBItojointheBoardoftheBank.

87

-----------------------Page90-----------------------

Dr.AdarshKishore,Smt.ShikhaSharma,ShriM.M.Agrawal,ShriM.V.Subbiah,ShriR.B.L.Vaish,ShriK.N.Prithviraj,ShriJ.R.Varma,ShriS.B.MathurandShriV.R.KaundinyaattendedthelastAnnualGeneral

Meetingheldon8June,2010atAhmedabad.

ShriN.C.SinghalwhowastheChairmanofAuditCommitteeretiredfromtheBoardw.e.f.2May,2010.IntheabsenceofapermanentChairmanoftheAuditCommittee,ShriR.B.L.VaishandShriM.V.SubbiahrepresentedtheAuditCommitteeatthelastAnnualGeneralMeetingtorespondtothequeriesofshareholders.Subsequently,ShriS.B.MathurhasbeenappointedastheChairmanoftheAuditCommitteew.e.f.10October,2010.

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Inall,10meetingsoftheBoardwereheldduringtheyearonthefollowingdates:

20April,2010,8June,2010,15July,2010,16July,2010,17September,2010,9October,2010,14October,2010,17November,2010,12December,2010and17January,2011.

Dr.AdarshKishore,Smt.ShikhaSharma,ShriR.B.L.Vaish,ShriK.N.Prithviraj,ShriS.B.Mathurattendedallthetenmeetings.ShriJ.R.Varmaattendedeightmeetings.ShriS.K.Roongtaattendedalltheeightmeetingsforwhichhewaseligible.Smt.RamaBijapurkarattendedsevenmeetings.ShriV.R.Kaundinyaattendedsixmeetings.Dr.R.H.Patilattendedvemeetings.ShriS.K.Chakrabartiattendedallthevemeetingsforwhichhewaseligible.ShriM.M.Agrawalattendedallthefourmeetingsforwhichhewaseligible.ShriM.V.Subbiahattendedfourmeetings.ShriPrasadR.Menonattendedthreemeetingsoutofthefourmeetingsforwhichhewaseligible.ShriN.C.Singhalattendedonemeetingforwhichhewaseligible.ShriM.S.SundaraRajancouldnotattendany

meeting.

TheDirectorsoftheBankalsoholdpositionasdirectors,trustees,membersandpartnersinotherwell-knownandreputedcompanies,trusts,associationsandrmsasperthedetailsgivenbelow:

i.ADARSHKISHORE

Sr.No.NameoftheCompany/InstitutionNatureofInterest1.AEGONReligareLifeInsuranceCompanyLimitedDirector/Chairman-AuditCommittee/Chairman

-Ethics&ComplianceCommittee/Member-Nomination&RemunerationCommittee/Chairman-PolicyholdersProtectionCommittee

2.HavellsIndiaLimitedDirector

ii.SHIKHASHARMA

Sr.No.NameoftheCompany/Institution

NatureofInterest

1.AxisAssetManagementCompanyLimitedChairperson

2.AxisU.K.LimitedChairperson

3.AxisPrivateEquityLimitedDirector

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7.NationalSecuritiesClearingCorporationofDirector/Member–AuditCommittee/Member–IndiaLimitedCommitteeforDeclarationofDefault

8.NationalStockExchangeofIndiaLimitedDirector/Chairman–AuditCommittee/Member–CommitteeforDeclarationofDefault/Member–PricingCommittee/Member–TechnologyCommittee/Member–BusinessDevelopmentCommittee/Member–RiskAssessment&ReviewCommittee/Member–EmployeePFTrustCommittee/Member–ExecutiveCommitteeforCDSSegment/Member-InvestorProtectionFundTrust

9.NSE.ITLimitedDirector/Member–AuditCommittee/Member–RemunerationCommittee

10.SBICapitalMarketsLimitedDirector/Chairman–RemunerationHRCommittee/Chairman–RiskManagementCommittee/Member–AuditCommittee/Member–CommitteeofDirectors

11.CorpBankSecuritiesLimitedDirector/Chairman–AuditCommittee

12.L&TInfrastructureFinanceCompanyLimitedDirector/Chairman–AuditCommittee/Chairman–RiskManagementCommittee

13.TheTataPowerCompanyLimitedDirector

89

-----------------------Page92-----------------------

vi.RAMABIJAPURKAR

Sr.No.NameoftheCompany/InstitutionNatureofInterest

1.CRISILLimitedDirector/Member–CompensationCommittee/

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9.NationalCollateralManagementServicesCo.LimitedDirector

10.NationalStockExchangeofIndiaLimitedDirector

11.UltratechCementLimitedDirector

12.JanalakshmiFinancialServicesPvt.LimitedDirector

13.MunichReIndiaServicesPvt.LimitedDirector

14.J.M.FinancialAssetReconstructionCo.Pvt.LimitedDirector

15.GeneralInsuranceCorporationofIndiaDirector/Chairman–AuditCommittee

16.NationalInvestmentFundAdvisor

17.IDFCTrusteeCo.LimitedTrustee

18.AIGTrusteeCo.Pvt.LimitedTrustee

91

-----------------------Page94-----------------------

xii.S.K.ROONGTA


1.ACCLimitedDirector

2.HindustanPetroleumCorporationLimitedDirector/Member–AuditCommittee/Member–

ShareholdersGrievanceCommittee

3.TheShippingCorporationofIndiaLimitedDirector

4.NeyveliLigniteCorporationLimitedDirector

5.JindalPowerLimitedDirector

6.JubilantIndustriesLimitedDirector/Chairman–ShareholdersGrievance

Committee/Member–AuditCommittee

xiii.PRASADR.MENON


1.TataCeramicsLimitedChairman

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v.ToapproveproposalsrelatingtotheBank’soperationscoveringalldepartmentsandbusinesssegments;and

vi.TodiscussissuesrelatingtodaytodayaffairsandproblemsandtotakesuchstepsasmaybedeemednecessaryforthesmoothfunctioningoftheBank.AllroutinemattersotherthanthestrategicmattersandreviewofpoliciesotherthanstrategicpolicieslikeCreditPolicy,InvestmentPolicyandotherpolicieswhichtheCODmayconsidernecessaryorReserveBankofIndia(RBI)mayspecicallyrequiretobereviewedbytheBoard.

MeetingsandAttendanceduringtheyear:

12meetingsoftheCommitteeofDirectorswereheldduringtheyearon21April,2010,17May,2010,7June,2010,14July,2010,23August,2010,20September,2010,9October,2010,3November,2010,7December,2010,12January,2011,18February,2011and21March,2011.Smt.ShikhaSharmaattendedallthetwelvemeetings.ShriS.B.Mathurattendedalltheninemeetingsforwhichhewaseligible.Dr.R.H.Patilattendedeightmeetings.ShriV.R.Kaundinyaattendedsi

xmeetingsoutofninemeetingsforwhichhewaseligible.ShriK.N.PrithvirajandShriM.M.Agrawalattendedallthevemeetingsforwhichtheywereeligible.ShriS.K.Chakrabartiattendedfourmeetingsoutofsixmeetingsforwhichhewaseligible.ShriPrasadR.Menonattendedallthethreemeetingsforwhichhewaseligible.ShriN.C.Singhalattendedonemeetingforwhichhewaseligible,ShriM.V.SubbiahattendedonemeetingoutofsevenmeetingsforwhichhewaseligibleandShriM.S.SundaraRajancouldnotattendanymeetingoutoffourmeetingsforwhichhewaseligible.

b)AuditCommittee

TheAuditCommitteeoftheBoardofDirectorswasreconstitutedwitheffectfrom10October,2010andfunctionswiththefollowingmainobjectives:

i.ToprovidedirectionandtooverseetheoperationoftheauditfunctionsintheBank.

ii.Toreviewtheinternalauditandinspectionsystemswithspecialemphasisontheirqualityandeffectiveness.

iii.Toreviewinspectionandconcurrentauditreportsoflargebrancheswithafocusonallmajorareas

ofhousekeeping,particularlyinter-branchadjustmentaccounts,arrearsinthebalancingofthebooksandun-reconciledentriesininter-bankandNostroaccountsandfrauds.

iv.TofollowupissuesraisedinLongFormAuditReportandinspectionreportsofRBI.

v.Toreviewthesystemofappointmentandremuneratio

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fromtimetotimefromtimetotimefromtimetotimeGratuityOnemonth’ssalaryforOnemonth’ssalaryforOnemonth’ssalaryforeachcompletedyearofeachcompletedyearofeachcompletedyearofserviceorpartthereof.serviceorpartthereofserviceorpartthereof(onpro-ratabasis).(onpro-ratabasis).

Superannuation10%ofpay10%ofpay10%ofpayLeaveEncashmentNil11,04,0004,04,167

(1)UpkeepAllowancepaidtowardsupkeepofresidentialaccommodationprovidedbytheBank.

Perquisites(evaluatedasperIncomeTaxRules,whereverapplicable,orotherwiseatactualcosttotheBank)suchasthebenetoftheBank’sfurnishedaccommodation,electricity,waterandfurnishings,clubfees,personalaccidentinsurance,loans,useofcarandt

elephoneatresidence,medicalreimbursement,travellingandhaltingallowances,newspapersandperiodicals,andotherswereprovidedinaccordancewiththeRulesoftheBank.

viii.AllDirectorsoftheBank,exceptforSmt.ShikhaSharma,ShriM.M.AgrawalandShriS.K.Chakrabarti,werepaidsittingfeesof 20,000foreverymeetingoftheBoardandalsoforeverymeetingoftheCommitteesattendedbythem.Reimbursementofexpenses,ifany,fortraveltoandfromtheplacesoftheirresidencetothevenueofthemeeting,lodgingandboardingwhenattendingthemeeting,beingonactualbasis,is

madedirectlybytheBanktotheserviceproviders.Duringtheyear,sittingfeesof 42,00,000waspaidtotheDirectorsoftheBank.

98

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SittingFees

ThedetailsofsittingfeespaidtotheDirectorsduringtheperiodfrom1April,2010to31March,2011areasfollows:

Sr.No.NameofDirectorSittingFees( )1.AdarshKishore4,40,0002.N.C.Singhal80,0003.J.R.Varma2,80,0004.R.H.Patil

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4,40,0005.RamaBijapurkar2,80,0006.R.B.L.Vaish6,40,0007.M.V.Subbiah1,60,0008.K.N.Prithviraj5,20,0009.V.R.Kaundinya3,00,00010.S.B.Mathur6,00,00011.M.S.SundaraRajanNIL12.S.K.Roongta3,20,00013.PrasadR.Menon1,40,00014.R.N.BhattacharyyaNIL15.ShikhaSharmaNIL16.M.M.Agrawal

NIL17.S.K.ChakrabartiNILTOTAL42,00,000

ThedetailsofsharesoftheBank,heldbythenon-wholetimeDirectorsason31March,2011aresetoutinthefollowingtable:

NameofDirectorNo.ofsharesheldR.B.L.Vaish225equitysharesS.B.Mathur200equityshares

f)NominationCommittee

TheNominationCommitteeoftheBoardofDirectorswasconstitutedon10October,2010andfunctionswiththefollowingobjectives:

i.Toundertakeaprocessofduediligencetodeterminethesuitabilityofanypersonforappointment/continuingtoholdappointmentasadirectorontheBoard,baseduponqualication,expertise,trackrecord,integrityandother‘tandproper’criteria.

ii.ToexaminethevacanciesthatwillcomeupattheBoardonaccountofretirementorotherwise.

iii.Toevaluatetheskillsthatexist,andthosethatareabsentbutneededattheBoardlevel,andsearchforappropriatecandidateswhohavetheproletoprovidesuchskillsets.

iv.Tocreatearecommendatorylistfordeliberationanddecision-makingattheBoardlevel.

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shareholdersthroughpostalballotnoticedated9January,2009totheArticlesofAssociationoftheBankinrespectofseparationofthepostofChairmanandCEOintothepostsofi)Non-ExecutiveChairmanandii)ManagingDirector.TheeffectivedateofthealterationofArticlesofAssociationchangedto1June,2009insteadof1August,2009.

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AnnualGeneralDateofAnnualSpecialResolutionsMeetingGeneralMeetingResolutionpassedDateofScrutinizer’sthroughPostalBallotReport–9.9.2009Fifteen*.

ArticlesofAssociationoftheBankinrespectofincreasingthenumberofDirectorstofteenandforalterationtotheArticlesofAssociationinrespectofreplacingthewords‘Whole-time/ExecutiveDirector(s)’whereverappearinginArticles118(2a),118(3)and118(4)oftheArticlesofAssociation,bythewords‘Whole-time

/Executive/Joint/DeputyManagingDirector(s)’**.

th168.6.2010–MondaySection224AoftheCompaniesAct,1956.

pursuanttoSection81oftheCompaniesAct,1956authorisingtheBoard

ofDirectorsoftheBanktoissue,offerandallotequitystockoptionsundertheEmployeesStockOptionSchemeoftheBank.

pursuanttoSection81(1A)oftheCompaniesAct,1956authorisingtheBoardofDirectorsoftheBanktocreate,offer,

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issueandallotequitystockoptionstothepermanentemployeesofthesubsidiariesoftheBank,presentandfuture,includinganyDirectoroftheSubsidiaryCompanies,undertheEmployeesStockOptionSchemeoftheBank.

*ResolutionproposingtheincreaseinthenumberofDirectorstoFifteenwaspassedthroughpostalballot.ShriAshwinLalbhaiShah,anAdvocateofGujaratHighCourt,whowasappointedasScrutinizerbytheBank,receivedatotalof1,384numbersofballots.Outof1,384ballotsreceivedbyShriShah,1,341werevalidballotsand43wereinvalidballots.Outof1,341shareholders,99.44%hadassentedfortheResolution.

**ResolutionproposingthealterationtotheArticlesofAssociationwaspassedthroughpostalballot.ShriAshwinLalbhaiShah,anAdvocateofGujaratHighCourt,whowasappointedasScrutinizerbytheBank,receivedatotalof1,384numbersofballots.Outof1,384ballotsreceivedbyShriShah,1,337werevalidballotsand47wereinvalid

ballots.Outof1,337shareholders,99.99%hadassentedfortheResolution.

***ResolutionproposingRaisingofTierICapitalwaspassedthroughpostalballot.ShriAshwinLalbhaiShah,anAdvocateofGujaratHighCourt,whowasappointedasScrutinizerbytheBank,receivedatotalof1,384numberofballots.Outof1,384ballotsreceivedbyShriShah,1,336werevalidballotsand48wereinvalidballots.Outof1,336shareholders,99.24%hadassentedfortheResolution.

NoResolutioninthenoticeoftheproposedSeventeenthAnnualGeneralMeetingisproposedtobepassedbyPostal

Ballot.

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4.DividendHistoryofLastFiveYears

Sr.No.FinancialYearRateofDividendDateofDeclaration(AGM)DateofPayment(DateofDividend

Warrant)1.2005-0635%( 3.50pershare)2.6.20063.6.20062.2006-0745%( 4.50pershare)1.6.20072.6.20073.2007-0860%( 6.00pershare)6.6.20087.6.20084.2008-09100%( 10.00pershare)1.6.20092.6.20095.2009-10120%( 12.00pershare)

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Quarterly/Half-yearlyresultsarecommunicatedthroughnewspaperadvertisements,pressreleasesandbypostinginformationontheBank’swebsite.Also,Half-yearlyresultsareforwardedtoeachshareholderthroughpostalongwithaletterfromManagingDirectorandChiefExecutiveOfcer.

TheresultsaregenerallypublishedintheEconomicTimesandGujaratSamacharorSandeshorDivyaBhaskar.

Addressofourofcialwebsiteiswww.axisbank.comwheretheinformationisdisplayed.

toanalystsbythemanagementandthesameisalsoplacedontheBank’swebsite.

7.GeneralShareholderInformation

AGM:Date,timeandvenue-17June,2011–10.00A.M.

AtJ.B.Auditorium,AhmedabadManagementAssociation,AMAComplex,ATIRA,Dr.VikramSarabhaiMarg,Ahmedabad–380015.

FinancialYear/Calendar-1April,2011to31March,2012.ThemeetingstoconsiderquarterlyresultsforthequarterendingJune2011,September2011andDecember2011areproposedtobeheldduringsecondhalfofJuly2011,Oct

ober2011andJanuary2012.ThemeetingtoconsiderauditedannualaccountsandQ4resultsisproposedtobeheldduringthesecondhalfofApril2012.

DateofBookClosure-10June,2011to17June,2011(bothdaysinclusive)

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DividendPaymentDate-Thedispatchofthedividendwarrants/ECScreditwouldcommenceon18June,2011andisexpectedtobecompletedonorbefore27June,2011.

TheBank’ssharesarelistedonthefollowingStockExchanges:

i.BombayStockExchangeLimited,P.J.Towers,DalalStreet,Mumbai–400001.

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gMarch/April2005,July2007andSeptember2009andtheGDRshavebeenlistedandtradedontheLondonStockExchange.TheBankhassimultaneouslyissuedtheunderlyingsharestotheGlobalDepositaryReceipts(GDRs)totheinvestorsoverseas.TheunderlyingequityshareshavebeenlistedandpermittedtobetradedontheNSEandBSE.ThenumbersofoutstandingGDRsason31March,2011were3,77,12,095.

haveanimpactonequityshares.

TheCompanySecretaryAxisBankLimitedRegisteredOfce‘Trishul’,3rdFloor,Opp.SamartheshwarTemple,LawGarden,Ellisbridge,Ahmedabad–380006PhoneNo.:079-26409322FaxNo.:079-26409321Email:[email protected]/rajendra.swaminarayan@a

xisbank.com

CompliancewiththeCodeofConduct

IconrmthatfortheyearunderreviewallDirectorsandmembersoftheSeniorManagementhaveafrmedcompliancewiththeCodeofConductoftheBank.

ShikhaSharmaManagingDirectorandCEO

22ndApril,2011

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AXISBANKLIMITEDGROUP-AUDITORS’REPORT

TOTHEBOARDOFDIRECTORSOFAXISBANKLIMITED

1.WehaveauditedtheattachedConsolidatedBalanceSheetofAXISBANKLIMITED(“theBank”)anditssubsidiaries(theBankanditssubsidiariesconstitute“theGroup”)asat31March,2011,theConsolidatedProtandLossAccount

andtheConsolidatedCashFlowStatementoftheGroupfortheyearendedonthatdate,bothannexedthereto.ThesenancialstatementsaretheresponsibilityoftheBank’sManagementandhavebeenpreparedbytheManagementonthebasisofseparatenancialstatementsandothernancialinformationregardingcomponents.Ourresponsibilityistoexpressanopiniononthesestatementsbasedonouraudit.

2.WeconductedourauditinaccordancewiththeauditingstandardsgenerallyacceptedinIndia.ThoseStandards

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31-03-201131-03-2010ScheduleNo.( inThousands)( inThousands)IINCOMEInterestearned13151,548,566116,390,540Otherincome1446,714,49239,642,116TOTAL198,263,058156,032,656IIEXPENDITUREInterestexpended1585,886,08266,326,317Operatingexpenses1648,604,73937,623,901Provisionsandcontingencies18(2.1.1)30,325,51227,301,025TOTAL164,816,333131,251,243IIILess:ShareinlossesofAssociate(47,659)-IVCONSOLIDATEDNETPROFITATTRIBUTABLETOGROUP33,399,06624,781,413BalanceinProt&LossAccountbroughtforwardfrompreviousyear

33,716,33823,289,540VAMOUNTAVAILABLEFORAPPROPRIATION67,115,40448,070,953VIAPPROPRIATIONS:TransfertoStatutoryReserve8,471,2276,286,333Transferto/(from)InvestmentReserve(149,372)148,750TransfertoCapitalReserve47,6302,239,176TransfertoGeneralReserve3,396,5915,622Proposeddividend(includestaxondividend)1

8(2.1.6)6,704,8065,674,734BalanceinProt&LossAccountcarriedforward48,644,52233,716,338TOTAL67,115,40448,070,953VIIEARNINGSPEREQUITYSHARE18(2.1.4)(Facevalue 10/-pershare)(Rupees)Basic81.7764.83Diluted80.4463.38SignicantAccountingPoliciesandNotestoaccounts17

&18SchedulesreferredtoaboveformanintegralpartoftheConsolidatedProtandLossAccount

Intermsofourreportattached.ForAxisBankLtd.

ForDeloitteHaskins&SellsCharteredAccountants

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NalinM.ShahR.H.PatilR.B.L.VaishShikhaSharmaPartnerDirectorDirectorManagingDirector&CEO




111

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AXISBANKLIMITEDGROUP-CASHFLOWSTATEMENT

CONSOLIDATEDCASHFLOWSTATEMENTFORTHEYEARENDED31MARCH,2011


Cashowfromoperatingactivities

Netprotbeforetaxes50,971,94438,190,521

Adjustmentsfor:

Depreciationonxedassets2,936,8842,378,717

Depreciationoninvestments992,677(222,333)

AmortisationofpremiumonHeldtoMaturityinvestments

605,614829,739

ProvisionforNonPerformingAdvances/Investments(includingbaddebts)9,551,19513,570,445

Provisiononstandardassets1,661,564(9,100)

Provisionforwealthtax4,5583,483

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Provisionforinteresttax2,879-

Lossonsaleofxedassets71,48544,859

Provisionforcountryrisk24,500(15,300)

Provisionforrestructuredassets150,615564,722

Provisionforothercontingencies412,204-

Amortisationofdeferredemployeecompensation(186)(230)

67,385,93355,335,523

Adjustmentsfor:

(Increase)/Decreaseininvestments(35,421,434)(50,022,781)

(Increase)/Decreaseinadvances(390,403,391)(241,787,053)

Increase/(Decrease)indeposits478,877,727239,210,026

(Increase)/Decreaseinotherassets(5,587,212)52,335

Increase/(Decrease)inotherliabilities&provisions

17,794,73313,780,002

Directtaxespaid(19,369,502)(15,069,292)

Netcashowfromoperatingactivities113,276,8541,498,760

Cashowfrominvestingactivities

Purchaseofxedassets(13,711,316)(4,149,325)

(Increase)/DecreaseinHeldtoMaturityInvestments(125,320,416)(46,793,087)

Proceedsfromsaleofxedassets133,710189,680

Netcashusedininvestingactivities(138,898,022)(50,752,732)

112

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-----------------------Page115-----------------------

CONSOLIDATEDCASHFLOWSTATEMENTFORTHEYEARENDED31MARCH,2011


Cashowfromnancingactivities

ProceedsfromissueofSubordinateddebt,perpetualdebts&UpperTierIIinstruments(netofrepayment)(1,625,906)18,214,280

Increase/(Decrease)inborrowings(excludingsubordinateddebt,perpetualdebt&upperTierIIinstruments)92,609,218(1,717,478)

Proceedsfromissueofsharecapital53,717461,690

Proceedsfromsharepremium(netofshareissueexpenses)2,353,98738,570,041

Paymentofdividend(5,695,356)(4,205,528)

Netcashgeneratedfromnancingactivities87,695,66051,323,005

Effectofexchangeuctuationtranslationreserve(46,833)(204,113)

Netincreaseincashandcashequivalents62,027,6591,864,920

Cashandcashequivalentsatthebeginningoftheyear152,058,900150,193,980

Cashandcashequivalentsattheendoftheyear214,086,559152,058,900

Note:1.Cashandcashequivalentscompriseofcashonhand(includingforeigncurrencynotes),balanceswithReserveBankofIndia,balanceswithbanksandmoneyatcall&shortnotice(referSched

ules6and7oftheBalanceSheet).

Intermsofourreportattached.ForAxisBankLtd.

ForDeloitteHaskins&SellsCharteredAccountantsAdarshKishore

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Chairman

NalinM.ShahR.H.PatilR.B.L.VaishShikhaSharmaPartnerDirectorDirectorManagingDirector&CEO




113

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AXISBANKLIMITEDGROUP-SCHEDULES

SCHEDULESFORMINGPARTOFTHECONSOLIDATEDBALANCESHEETASAT31MARCH,2011


SCHEDULE1-CAPITAL

AuthorisedCapital

500,000,000EquitySharesof 10/-each.5,000,0005,000,000

Issued,SubscribedandPaid-upcapital

410,545,843(Previousyear-405,174,119)EquitySharesof 10/-eachfullypaid-up4,105,4584,051,741

SCHEDULE2-RESERVESANDSURPLUS

I.StatutoryReserve



27,820,35019,349,123

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II.SharePremiumAccount



Less:Shareissueexpenses-(484,177)

100,050,79097,695,255

III.InvestmentReserveAccount

OpeningBalance149,372622

Additionsduringtheyear-149,372

Less:Deductionsduringtheyear

(149,372)(622)

-149,372

IV.GeneralReserve

OpeningBalance149,005143,383


3,545,596149,005

V.CapitalReserve



4,905,9354,858,305

VI.ForeignCurrencyTranslationReserve[referSchedule17(5.6)]

OpeningBalance(79,752)124,361

Additionsduringtheyear(46,833)(204,113)

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TotalInvestmentsoutsideIndia5,731,6566,784,075

GRANDTOTAL(I+II)717,875,486558,765,456

##Includessecuritiescosting 4,424.90crores(previousyear 4,237.60crores)pledgedforavailmentoffundtransferfacility,clearingfacilityandmarginrequirements

@IncludesdepositswithNABARD 4,064.71crores(previousyear 3,002.70crores)andPTC’s 212.98crores(previousyear 351.28crores)netofdepreciation

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SCHEDULESFORMINGPARTOFTHECONSOLIDATEDBALANCESHEETASAT31MARCH,2011

AsatAsat

31-03-201131-03-2010( inThousands)( inThousands)

SCHEDULE9-ADVANCES

A.(i)Billspurchasedanddiscounted*34,812,94834,500,593

(ii)Cashcredits,overdraftsandloansrepayableondemand349,803,398260,135,632

(iii)Termloans#1,039,461,940748,773,239

TOTAL1,424,078,2861,043,409,464

B.(i)Securedbytangibleassets$1,131,026,880865,761,933

(ii)CoveredbyBank/GovernmentGuarantees&&32,394,56116,367,294

(iii)Unsecured

260,656,845161,280,237

TOTAL1,424,078,2861,043,409,464

C.I.AdvancesinIndia

(i)PrioritySector412,891,152299,404,189

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GrossBlock

Atcostatthebeginningoftheyear891,351891,351

Additionsduringtheyear8,244,785-


TOTAL9,117,340891,351

Depreciation

Asatthebeginningoftheyear161,989117,422

Chargefortheyear46,66944,567

Deductionsduringtheyear

(10,277)-

Depreciationtodate198,381161,989

NetBlock8,918,959729,362

II.Otherxedassets(includingfurniture&xtures)

GrossBlock

Atcostatthebeginningoftheyear

20,384,69116,650,447


Deductionsduringtheyear(753,351)(416,402)

TOTAL25,442,10220,384,691

Depreciation

Asatthebeginningoftheyear9,327,9537,175,660

Chargefortheyear2,890,2152,334,150

Deductionsduringtheyear(556,674)(181,857)

Depreciationtodate

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11,463,9838,879,686TOTAL48,604,73937,623,901

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17Signicantaccountingpoliciesfortheyearended31March,2011(Currency:InIndianRupees)

1PrinciplesofConsolidation

TheconsolidatednancialstatementscomprisethenancialstatementsofAxisBankLimited(‘theBank’)anditssubsidiaries,whichtogetherconstitute‘theGroup’.

TheBankconsolidatesitssubsidiariesinaccordancewithAS21,ConsolidatedFinancialStatementsnotiedundertheCompanies(AccountingStandards)Rules,2006,onaline-by-linebasisbyaddingtogetherthelikeitemsofassets,liabilities,incomeandexpenditure.Allsignicanti

nter-companyaccountsandtransactionsareeliminatedonconsolidation.Further,theBankaccountsforinvestmentsinassociatesinaccordancewithAS-23,AccountingforInvestmentsinAssociatesinConsolidatedFinancialStatements,notiedundertheCompanies(AccountingStandard)Rules,2006,bytheequitymethodofaccounting.

2Basisofpreparation

Thenancialstatementshavebeenpreparedandpresentedunderthehistoricalcostconventionontheaccrualbasisofaccounting,andcomplywiththegenerallyacceptedaccountingprinciples,statutoryrequirementsprescribed

undertheBankingRegulationAct,1949,thecircularsandguidelinesissuedbytheReserveBankofIndia(‘RBI’)fromtimetotimeandtheAccountingStandardsnotiedundertheCompanies(AccountingStandards)Rules,2006,totheextentapplicableandcurrentpracticesprevailingwithinthebankingindustryinIndia.

TheconsolidatednancialstatementspresenttheaccountsofAxisBankLimitedwithitsfollowingsubsidiariesandassociates:

NameRelationCountryofOwnershipInterest

Incorporation

AxisSecuritiesandSalesLtd.SubsidiaryIndia100.00%

AxisPrivateEquityLtd.SubsidiaryIndia100.00%

AxisTrusteeServicesLtd.Subs

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idiaryIndia100.00%

AxisMutualFundTrusteeLtd.SubsidiaryIndia100.00%

AxisAssetManagementCompanyLtd.SubsidiaryIndia100.00%

BussanAutoFinanceIndiaPrivateLtd.*AssociateIndia26.00%

TheauditednancialstatementsoftheabovesubsidiariesandtheunauditednancialstatementsoftheassociatehavebeendrawnuptothesamereportingdateasthatoftheBank,i.e.31March,2011.

*ThisinvestmentdoesnotfallwithinthedenitionofaJointVentureasperAS-27,FinancialReportingofInterestinJointVentures,notiedundertheCompanies(AccountingStandards)Rules,2006,andthesaidaccountingstandardisthusnotapplicable.However,pursuanttoRBIguidelines,theBankhasclassiedthesameasinvestmentinjointventuresinthebalancesheet.SuchinvestmenthasbeenaccountedasanAssociatefromthecurrentyear

inlinewithAS-23,AccountingforInvestmentinAssociatesinConsolidatedFinancialStatementsnotiedundertheCompanies(AccountingStandards)Rules,2006.

3Useofestimates

ThepreparationofthenancialstatementsinconformitywiththegenerallyacceptedaccountingprinciplesrequirestheManagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities,revenuesandexpensesanddisclosureofcontingentliabilitiesatthedateofthenancialstatements.Actualresultscoulddifferfromthoseestimates.TheManagementb

elievesthattheestimatesusedinthepreparationofthenancialstatementsareprudentandreasonable.Anyrevisionstotheaccountingestimatesarerecognisedprospectivelyinthecurrentandfutureperiods.

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4.Changesinaccountingestimates

4.1Changeinestimatedusefullifeofxedassets

Group

Duringtheyear,theGrouphasrevisedtheestimatedusefullivesofthefollowingtypeofxedassets:

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Asaresultoftheaforesaidrevisions,thedepreciationchargefortheyearishigherby 16.22croreswithacorrespondingdecreaseinthenetblockofxedassets.

4.2Changeinestimateofleasetermforoperatingleases

AxisBankLtd.

Duringthecurrentyear,theBankhasreviseditsestimateofleaseterminthecaseassetstakenonoperatingleasestoincludethesecondaryperiodoftheleaseinvolvingfurtherpaymentofleaserentalsbasedoncontinuationoftheleaseattheoptionoftheBankasagainsttheprimaryleaseperiodasconsideredhitherto.Asaresulttheoperatingexpensesfortheyeararehigherby 93.04croreswithaconsequentreductiontotheprotbeforetax.

5.Signicantaccountingpolicies

5.1Investments

Classication

InaccordancewiththeRBIguidelines,investmentsareclassiedatthedateofpurchaseas:

Investmentsthatareheldprincipallyforsalewithinashortperi

odareclassiedasHFTsecurities.AspertheRBIguidelines,HFTsecurities,whichremainunsoldforaperiodof90daysarereclassiedasAFSsecuritiesasonthatdate.

InvestmentsthattheBankintendstoholdtillmaturityareclassiedundertheHTMcategory.

AllotherinvestmentsareclassiedasAFSsecurities.

However,fordisclosureintheBalanceSheet,investmentsinIndiaareclassiedundersixcategories-GovernmentSecurities,Otherapprovedsecurities,Shares,Debentur

esandBonds,InvestmentinSubsidiaries/JointVenturesandOthers.

InvestmentsmadeoutsideIndiaareclassiedunderthreecategories–GovernmentSecurities,Subsidiariesand/orJointVenturesabroadandOthers.

Transferofsecuritybetweencategories

Transferofsecuritybetweencategoriesofinvestmentsisaccounte

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daspertheRBIguidelines.

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Acquisitioncost

Costsincludingbrokerage,commissionpertainingtoinvestments,paidatthetimeofacquisition,arechargedtotheProtandLossAccount.

BrokenperiodinterestischargedtotheProtandLossAccount.

Costofinvestmentsiscomputedbasedontheweightedaveragecostmethod.

Valuation

InvestmentsclassiedundertheHTMcategoryarecarriedatacquisitioncost.Anypremiumonacquisitionoverfacevalueisamortisedonaconstantyieldtomat

uritybasisovertheremainingperiodtomaturity.IntermsofRBIguidelines,discountonsecuritiesheldunderHTMcategoryisnotaccruedandsuchsecuritiesareheldattheacquisitioncosttillmaturity.

InvestmentsclassiedundertheAFSandHFTcategoriesaremarkedtomarket.Themarket/fairvalueofquotedinvestmentsincludedinthe‘AvailableforSale’and‘HeldforTrading’categoriesisthemarketpriceofthescripasavailablefromthetrades/quotesonthestockexchanges,SGLaccounttransactions,pricelistofRBIorpricesdeclaredbyPrimaryDealersAssociationofIndia(‘PDAI’)jointlywithFixedIncomeMoneyMarket

andDerivativesAssociationofIndia(‘FIMMDA’),periodically.Netdepreciation,ifany,withineachcategoryofeachinvestmentclassicationisrecognisedintheProtandLossAccount.Thenetappreciationifany,undereachcategoryofeachinvestmentclassicationisignored.Thebookvalueofindividualsecuritiesisnotchangedconsequenttotheperiodicvaluationofinvestments.

TreasuryBills,ExchangeFundedBills,CommercialPaperandCerticateofDepositsbeingdiscountedinstruments,arevaluedatcarryingcost.

Unitsofmutualfundsarevaluedatthelatestrepurchaseprice/netassetvaluedeclaredbythemutualfund.

Marketvalueofinvestmentswherecurrentquotationsarenotavailable,isdeterminedasperthenormsprescribedbytheRBIasunder:

rateforGovernmentSecuritiesofequivalentmaturityasnotiedbyFIMMDAjointlywiththePDAIat

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permanentdiminution,ifany,inaccordancewiththeRBIguideline.

RealisedgainsoninvestmentsundertheHTMcategoryarerecognisedintheProtandLossAccountandsubsequentlyappropriatedtoCapitalReserveaccountinaccordancewiththeRBIguidelines.LossesarerecognisedintheProtandLossAccount.

Allinvestmentsareaccountedforonsettlementdateexceptinvestmentsinequityshareswhichareaccountedforontradedateasthecorporateactionsareeffectedinequityonthetradedate.

Repurchaseandreverserepurchasetransactions

Repurchaseandreverserepurchasetransactions[excludingthoseconductedundertheLiquidityAdjustmentFacility(LAF)withRBI]areaccountedascollateralisedborrowingandlendingrespectively.SuchtransactionsdoneunderLAFareaccountedasoutrightsaleandoutrightpurchaserespectively.However,depreciationintheirvalue,ifany,comparedtotheiroriginalcost,isrecognisedintheProtandLossAccount.

5.2StockinTrade

AxisSecuritiesandSalesLtd.

Securitiesacquiredwiththeintentionofholdingforshort-termholdingandtradingareclassiedasstock-in-trade.Thesecuritiesheldasstock-in-tradearevaluedatlowerofcostarrivedatonrstinrstoutbasisormarketablefairvalue.

5.3Advances

AxisBankLtd.

Advancesareclassiedintoperformingandnon-performingadvances(‘NPAs’)aspertheRBIguidelinesandarestatednetofspecicprovisionsmadetowardsNPAsandoatingprovisions.Further,NPAsareclassiedintosub-standard,doubtfulandlossassetsbasedonthecriteriastipulatedbytheRBI.ProvisionsforNPAsaremadeforsub-standardanddoubtfulassetsatratesasprescribedbytheRBIwiththeexceptionforagricultureadvancesandschematicretailadvances.Inrespectofschematicretailadvances,provisionsaremadeintermsofabucket-wisepolicyuponreachingspeciedstagesofdelinquen

cy(90daysormoreofdelinquency)undereachtypeofloan,whichsatisestheRBIprudentialnormsonprovisioning.Provisionsinrespectofagricultureadvancesclassiedintosub-standardanddoubtfulassetsaremadeatrateswhicharehigherthanthoseprescribedbytheRBI.

Lossassetsandunsecuredportionofdoubtfulassetsareprovided/writtenoffaspertheextantRBIguidelines.NPAsareidentiedbyperiodicappraisalsoftheloanportfolioby

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theManagement.

Forrestructured/rescheduledassets,provisionismadeinaccordancewiththeguidelinesissuedbyRBI,whichrequiresthediminutioninthefairvalueoftheassetstobeprovidedatthetimeofrestructuring.

[email protected]%incaseofdirectadvancestoagriculturalandSMEsectors,1%inrespectofadvancesclassiedascommercialrealestate,2%inrespectofhousingloansatteaserratesand0.40%forallotheradvancesismadeasprescribedbytheRBI.

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5.4Countryrisk

AxisBankLtd.

Inadditiontotheprovisionsrequiredtobeheldaccordingtotheassetclassicationstatus,provisionsare

heldforindividualcountryexposure(otherthanforhomecountry).Thecountriesarecategorisedintosevenriskcategoriesnamelyinsignicant,low,moderate,high,veryhigh,restrictedandoff-creditandprovisionismadeonexposuresexceeding180daysonagradedscalerangingfrom0.25%to100%.Forexposureswithcontractualmaturityoflessthan180days,25%ofthenormalprovisionrequirementisheld.Ifthecountryexposure(net)oftheBankinrespectofeachcountrydoesnotexceed1%ofthetotalfundedassets,noprovisionismaintainedonsuchcountryexposure.

5.5Securtisation

AxisBankLtd.

TheBankentersintopurchase/saleofcorporateandretailloansthroughdirectassignment/SpecialPurposeVehicle(‘SPV’).Inmostcases,postsecurtisation,theBankcontinuestoservicetheloanstransferredtotheassignee/SPV.TheBankalsoprovidescreditenhancementintheformofcashcollateralsand/orbysubordinationofcashowstoSeniorPassThroughCerticate(‘PTC’)holders.Inrespectofcreditenhancementsprovidedorrecourseobligations(projecteddelinquencies,futureservicingetc.)acceptedby

theBank,appropriateprovision/disclosureismadeatthetimeofsaleinaccordancewithAS29,Provisions,ContingentLiabilitiesandContingentAssets.

GainonsecurtisationtransactionisrecognisedovertheperiodoftheunderlyingsecuritiesissuedbytheSPV.LossonsecurtisationisimmediatelydebitedtotheProtandLossAccount.

5.6Foreigncurrencytransactions

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AxisBankLtd.

Inrespectofdomesticoperations,transactionsdenominatedinforeigncurrenciesareaccountedforattheratesprevailingonthedateofthetransaction.MonetaryforeigncurrencyassetsandliabilitiesaretranslatedattheBalanceSheetdateatratesnotiedbyForeignExchangeDealersAssociationofIndia(‘FEDAI’).Allprots/lossesresultingfromyearendrevaluationsarerecognisedintheProtandLossAccount.

Financialstatementsofforeignbranchesclassiedasnon-integralforeignoperationsaretranslatedasfollows:

closingratesnotiedbyFEDAIattheyearend.

tillthedisposalofthenetinvestments.

Outstandingforwardexchangecontracts(excludingcurrencyswapsundertakentohedgeforeigncurrencyassets/liabilitiesandfundingswapswhicharenotrevalued)andspotexchangecontractsarerevaluedatyearendexchangeratesnotiedbyFEDAIforspeciedmaturitiesandatinterpolatedratesforcontractofinterimmaturities.TheresultinggainsorlossesonrevaluationareincludedintheProtandLossAccountinaccordancewithRBI/FEDAIguidelines.TheforwardexchangecontractsoflongermaturitieswhereexchangeratesarenotnotiedbyFEDAIarerevaluedattheforwardexchangeratesimpliedbytheswapcurvesinrespectivecurrencies.Theresultantgainsorlosses

arerecognisedintheProtandLossAccount.

Premium/discountoncurrencyswapsundertakentohedgeforeigncurrencyassetsandliabilitiesandfundingswapsisrecognisedasinterestincome/expenseandisamortisedonapro-ratabasisovertheunderlyingswapperiod.

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Contingentliabilitiesonaccountofforeignexchange

contracts/options,guarantees,acceptances,endorsementsandotherobligationsdenominatedinforeigncurrenciesaredisclosedatclosingratesofexchangenotiedbyFEDAI.

AxisPrivateEquityLtd.andAxisAssetManagementCompanyLtd.

Transactionsinforeigncurrenciesarerecordedattheexchangerateprevailingonthedateofthetransactions.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesasat

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theBalanceSheetdatearetranslatedattheclosingrateonthatdate.Theexchangedifferences,ifany,eitheronsettlementortranslationarerecognisedinProtandLossAccount.

5.7Derivativetransactions

AxisBankLtd.

Derivativetransactionscompriseofforwardcontracts,swapsandoptionswhicharedisclosedascontingentliabilities.Theforwards,swapsandoptionsaresegregatedastradingorhedgetransactions.TradingderivativecontractsarerevaluedattheBalanceSheetdatewiththeresultingunrealisedgainorlossbeingrecognisedintheProtandLossAccountandcorrespondinglyinotherassetsorotherliabilitiesrespectively.Forhedgetransactions,theBankidentiesthehedgeditem(assetorliability)attheinceptionoftransactionitself.Theeffectivenessisascertainedatthetimeofinceptionofthehedgeandperiodicallythereafter.Hedgederivativetransactionsareaccountedforpursuanttotheprinciplesofhedgeaccounting.ThepremiumonoptioncontractsisaccountedforasperFEDAIguidelines.PursuanttotheRBI

guidelinesanyreceivablesunderderivativescontractswhichremainoverdueformorethan90daysarereversedthroughtheProtandLossAccountandareheldinaseparateSuspenseAccount.

5.8Revenuerecognition

AxisBankLtd.

Interestincomeisrecognisedonanaccrualbasisexceptinterestincomeonnon-performingassets,whichisrecognisedonreceiptinaccordancewithAccountingStandard9andtheRBIguidelines.

Feesandcommissionincomeisrecognisedwhendue,exceptforguaranteecommissionwhichisrecognisedpro-rataovertheperiodoftheguarantee.

Dividendisaccountedonanaccrualbasiswhentherighttoreceivethedividendisestablished.

Gain/lossonselldownofloansandadvancesthroughdirectassignmentisrecognisedatthetimeofsale.

GainorlossarisingonsaleofNPAsisaccountedaspertheguidelinesprescribedbytheRBI,whichrequire

provisionstobemadeforanydecit(wheresalepriceislowerthanthenetbookvalue),whilesurplus(wheresalepriceishigherthanthenetbookvalue)isignored.

Arrangership/syndicationfeeisaccountedforoncompletionoftheagreedserviceandwhenrighttoreceiveisestablished.

Subsidiaries

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RevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenetswillowtotheCompanyandtherevenuecanbereliablymeasured.Feeincomeisrecognisedonthebasisofaccrualwhenalltheservicesareperformed.Insurancepolicyadministrationfeeincomeisrecognisedbasedontheproportionatecompletionmethod.

InterestIncomeonxeddepositsarerecognisedonanaccrualbasis.

Brokerageincomeinrelationtostockbrokingactivityisrecognisedonatradedatebasis.Gains/lossesondealinginsecuritiesarerecognisedonatradedatebasis.Prepaidsubscriptionfeesisrecognisedoncompletionofvalidityperiodorutilizationofcomplementaryturnoverlimitwhicheverisearlier.

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Trusteeshipfeesarerecognised,onastraightlinebasis,overtheperiodwhenservicesareperformed.Initial

acceptancefeeisrecognisedasandwhenthe‘Offerletter’fortheservicestoberenderedisacceptedbythecustomer.

Managementfeesarerecognisedonaccrualbasisatspecicrates,appliedontheaveragedailynetassetsofeachscheme.ThefeeschargedareinaccordancewiththetermsofSchemeInformationDocumentsofrespectiveschemesandareinlinewiththeprovisionsofSEBI(MutualFunds)Regulations,1996asamendedfromtimetotime.

PortfolioManagementFeesarerecognisedonanaccru

albasisasperthetermsofthecontractwiththecustomers.

IncomefromsaleofInvestmentsisdeterminedonweightedaveragebasisandrecognisedonthetradedatebasis.

Marketingadvisoryfeesarerecognisedonanaccrualbasis.

Trusteefeeisrecognisedonaccrualbasis,atthespecicrates/amountapprovedbytheBoardofdirectorsoftheCompany,withinthelimitsspeciedundertheD

eedofTrust,andisappliedonthenetassetsofeachschemeofAxisMutualFund.

5.9Schemeexpenses

AxisAssetManagementCompanyLtd.

FundExpense

ExpensesofschemesofAxisMutualFund

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inexcessofthestipulatedlimitsasperSEBI(MutualFund)Regulations,1996andexpensesincurreddirectly(inclusiveofadvertisement/brokerageexpenses)onbehalfofschemesofAxisMutualFundarechargedtotheProtandLossAccount.

Newfundofferexpenses

ExpensesrelatingtonewfundofferofAxisMutualFundarechargedtotheProtandLossAccountintheyearinwhichtheyareincurred.

5.10Fundraisingexpenses

AxisPrivateEquityLtd.

TheCompanyhasbeenfollowingthepracticeofrecoveringexpensesincurredtowardsfundraisingonbehalfofAxisInfrastructureFund,asperthepracticefollowedintheprivateequityindustry.SuchexpensesarerecoveredfromtheFundafterthefundraisingexerciseiscompletedandtheFundisestablished.

5.11Fixedassetsanddepreciation

Group

Fixedassetsarecarriedatcostofacquisitionlessaccumulateddepreciationandimpairment,ifany.Costincludesfreight,duties,taxesandincidentalexpensesrelatedtotheacquisitionandinstallationoftheasset.

Capitalwork-in-progressincludescostofxedassetsthatarenotreadyfortheirintendeduseandalsoincludesadvancespaidtoacquirexedassets.

Depreciation(includingonassetsgivenonoperatinglease)isprovidedonthestraight-linemethodfromthedateofaddition.TheratesofdepreciationprescribedinScheduleXIVtotheCompaniesAct,1956areconsideredastheminimumrates.IftheManagement’sestimateoftheusefullifeofaxedassetatthetimeofacquisitionoftheassetoroftheremainingusefullifeonasubsequentreviewisshorter,thendepreciationisprovidedatahigherratebasedontheManagement’sestimateoftheusefullife/remainingusefullife.

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Pursuanttothispolicy,depreciationhasbeenprovidedusingthefollowingestimatedusefullives:

AssetEstimatedusefullife

Ownedpremises61years

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Assetsgivenonoperatinglease20years

Computerhardwareincludingprinters3years

Applicationsoftware5years

Vehicles4years

EPABX,telephoneinstruments8years

CCTVandvideoconferencingequipment3years

Mobilephone2years

Lockercabinets/cashsafe/strongroomdoor16years

Modem,scanner,routers,hubs,switches,racks/cabinetsforITequipment5years

Assetsatstaffresidence3years

Allotherxedassets10years

Allxedassetsindividuallycostinglessthan 5,000arefullydepreciatedintheyearofinstallation.

Depreciationonassetssoldduringtheyearisrecognisedonapro-ratabasistotheProtandLossAccounttillthedateofsale.

ThecarryingamountsofassetsarereviewedateachBalanceSheetdatetoascertainifthereisanyindicationofimpairmentbasedoninternal/externalfactors.Animpairmentlossisrecognisedwhereverthecarryingamountofanassetexceedsitsrecoverableamount.Therecoverableamountisthegreateroftheasset’snetsellingpriceandvalueinuse.Inassessingvalueinuse,theestimatedfuturecashowsarediscountedtotheirpresentvalueattheweightedaveragecostofcapital.Afterimpair

ment,depreciationisprovidedontherevisedcarryingamountoftheassetoveritsremainingusefullife.

5.12Leasetransactions

AxisBankLtd.

Assetsgivenonoperatingleasearecapitalisedatcost.RentalsreceivedbytheBankarerecognisedintheProtandLossAccountonaccrualbasis.

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Superannuation

EmployeesoftheBankareentitledtoreceiveretirementbenetsundertheBank’sSuperannuationschemeeitherunderacash-outoptionthroughsalaryorunderadenedcontributionplan.ThroughthedenedcontributionplantheBankcontributesannuallyaspeciedsumof10%oftheemployee’seligibleannualbasicsalarytoLIC,whichundertakestopaythelumpsumandannuitybenetpaymentspursuanttothescheme.SuperannuationcontributionsarerecognisedintheProtandLossAccountintheperiodinwhichtheyaccrue.

Actuarialgains/lossesareimmediatelytakentoProtandLossAccountandarenotdeferred.

AxisSecuritiesandSalesLtd.andAxisAssetManagementCompanyLtd.

Gratuity

Gratuityliabilityisadenedbenetobligationandisprovidedforonthebasisofanactuarialvaluationusing

ProjectedUnitCreditMethodmadeattheendofeachnancialyear.

Actuarialgains/lossesareimmediatelytakentotheProtandLossAccountandarenotdeferred.

AxisTrusteeServicesLtd.

Gratuity

GratuityliabilityiscomputedandaccruedbytheCompanyinaccordancewithPaymentofGratuityAct,1972.

LeaveEncashment

TheCompanyhasmadeprovisionforleaveencashmenttoitsemployeeasperCompanypolicy.


LeaveEncashment

Shorttermcompensatedabsencesareprovidedforbasedonestimates.Longtermcompensatedabsencesareprovidedforbasedonactuarialvaluation.Thea

ctuarialvaluationisdoneattheendofeachnancialyear,usingtheProjectedUnitCreditMethod.

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Actuarialgains/lossesareimmediatelytakentotheProtandLossAccountandarenotdeferred.

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5.14Debit/Creditcardrewardpoints

AxisBankLtd.

TheBankestimatestheprobableredemptionofdebitandcreditcardrewardpointsusinganactuarialmethodattheBalanceSheetdatebyemployinganindependentactuary.Provisionforthesaidrewardpointsisthenmadebasedontheactuarialvaluationreportasfurnishedbythesaidindependentactuary.

5.15Taxation

Group

Incometaxexpenseistheaggregateamountofcurrenttaxanddeferredtaxcharge.CurrentyeartaxesaredeterminedinaccordancewiththeIncometaxAct,1961.Deferredincometaxesreectstheimpactofcurrentyeartimingdifferencesbetweentaxableincomeandaccountingincomefortheyearandreversaloftimingdifferencesofearlieryears.

Deferredtaxismeasuredbasedonthetaxratesandthetaxlawsenacted

orsubstantivelyenactedattheBalanceSheetdate.Deferredtaxassetsanddeferredtaxliabilitiesareoffset,ifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxassetsanddeferredtaxliabilitiesrelatetothetaxesonincomeleviedbysamegoverningtaxationlaws.

Deferredtaxassetsarerecognisedonlytotheextentthatthereisreasonablecertaintythatsufcientfuturetaxableincomewillbeavailableagainstwhichsuchdeferredtaxassetscanberealised.TheimpactofchangesinthedeferredtaxassetsandliabilitiesisrecognisedintheProtand

LossAccount.

Deferredtaxassetsarerecognisedandreassessedateachreportingdate,basedupontheManagement’sjudgementastowhetherrealisationisconsideredasreasonablycertain.Deferredtaxassetsarerecognisedoncarryforwardofunabsorbeddepreciationandtaxlossesonlyifthereisvirtualcertaintythatsuchdeferredtaxassetcanberealisedagainstfutureprots.

5.16Shareissueexpenses

AxisBankLtd.

Shareissueexpensesareadjustedfromsharepremiumaccount.

5.17Earningspershare

TheGroupreportsbasicanddilutedearningspershareinaccordancewithAS20,EarningsperShare,asnotiedbytheCompanies(AccountingStandards)Rules,2006.Basicearningspershareiscomputedbydividingthenetprotaftertaxbytheweightedaveragenumberofequitys

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haresoutstandingfortheyear.

Dilutedearningspersharereectthepotentialdilutionthatcouldoccurifsecuritiesorothercontractstoissueequityshareswereexercisedorconvertedduringtheyear.Dilutedearningspershareiscomputedusingtheweightedaveragenumberofequitysharesanddilutivepotentialequitysharesoutstandingattheyearend.

5.18Employeestockoptionscheme

AxisBankLtd.

The2001EmployeeStockOptionScheme(‘theScheme’)providesforgrantofstockoptionsonequitysharesoftheBanktoemployeesandDirectorsoftheBankanditssubsidiaries.TheSchemeisinaccordancewiththeSecuritiesandExchangeBoardofIndia(SEBI)(EmployeesStockOptionSchemeandEmployeeStockPurchaseScheme)Guidelines,1999.TheBankfollowstheintrinsicvaluemethodtoaccountforitsstock

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basedemployeecompensationplansaspertheGuidanceNoteon‘AccountingforEmployeeShare-basedPayments’issuedbytheICAI.Optionsaregrantedatanexerciseprice,whichisequalto/lessthanthefairmarketpriceoftheunderlyingequityshares.Theexcessofsuchfairmarketpriceovertheexercisepriceoftheoptionsasatthegrantdateisrecognisedasadeferredcompensationcostandamortisedonastraight-linebasisoverthevestingperiodofsuchoptions.

Thefairmarketpriceisthelatestavailableclosingprice,priortothedateofthegrant,onthestockexchangeonwhichthesharesoftheBankarelisted.Ifthesharesarelistedonmorethanonestockexchange,thenthestockexchangewherethereishighesttradingvolumeonthesaiddateisconsidered.

5.19Provisions,contingentliabilitiesandcontingentassets

Group

AprovisionisrecognisedwhentheGrouphasapresentobligationasaresultofpasteventwhereitisprobablethatanoutowofresourceswillberequiredtosettletheobligation,inrespectofwhichareliableestimatecanbemade.ProvisionsarenotdiscountedtoitspresentvalueandaredeterminedbasedonbestestimaterequiredtosettletheobligationattheBalanceSheetdate.ThesearereviewedateachBalanceSheetdateandadjustedtoreectthecurrentbestestimates.

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Adisclosureofcontingentliabilityismadewhenthereis:

ornonoccurrenceofoneormoreuncertainfutureeventsnotwithinthecontroloftheGroup;or

outowofresourceswillberequiredtosettletheobligationorareliableestimateoftheamountoftheobligationcannotbemade.

Whenthereisapossibleobligationorapresentobligationinrespectofwhichthelikelihoodofoutowofresourcesisremote,noprovisionordisclosureismade.

Contingentassetsarenotrecognisedinthenancialstatements.However,contingentassetsareassessedcontinuallyandifitisvirtuallycertainthataninowofeconomicbenetswillarise,theassetandrelatedincomearerecognisedintheperiodinwhichthechangeoccurs.

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18Notesformingpartoftheconsolidatednancialstatementsfortheyearended31March,2011(Currency:InIndianRupees)

1On17November,2010,theBoardofDirectorsoftheBankapprovedtheacquisitionofcertainbusinessesundertakenbyEnamSecuritiesPrivateLimited(ESPL)throughitswholly

-ownedsubsidiaryAxisSecuritiesandSalesLimited(ASSL),bywayofademerger.ItisenvisagedthatthesebusinesseswillbetransferredtoASSL,pursuanttoaSchemeofArrangement,asmaybeapprovedbytherelevantHighCourtsunderSections391to394andotherrelevantprovisionsoftheCompaniesAct,1956andsubjecttoreceiptofnecessaryrequisiteapprovals.TheappointeddateforthepurposeoftheDemergerundertheSchemeshallbe1April,2010.ThevaluationoftheESPLbusinesswasassessedat 2,067croresandinconsiderationforthedemerger,theBankwillissuesharesintheratioof5.7equitysharesoftheBank(aggregating13,782,600equityshares)ofthefacevalueof 10eachforevery1

equityshare(aggregating2,418,000equityshares)of 10eachheldbytheshareholdersofESPL.

2OtherDisclosures

2.1.1‘Provisionsandcontingencies’recognisedintheProtandLossAccountincludes:( incrores)

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Fortheyearended31March,201131March,2010

Provisionforincometax

-Currenttaxfortheyear1,958.341,495.27

-Deferredtaxfortheyear(205.48)(154.36)

Provisionforfringebenettax(0.34)-

1,752.521,340.91

Provisionforwealthtax0.460.35

Provisionforinteresttax0.29-

Provisionfornonperformingadvances&investments

(includingbaddebtswrittenoffandwritebacks)955.121,357.04

Provisionforrestructuredassets15.0656.47

Provisiontowardsstandardassets166.16(0.91)

Provisionfordepreciationinvalueofinvestments99.27(22.23)

Provisionforcountryrisk

2.45(1.53)

Provisionforothercontingencies41.22-

Total3,032.552,730.10

2.1.2TheBankhasnotraisedanysubordinateddebtduringtheyearended31March,2011.

Duringtheyearended31March,2010,theBankraisedsubordinateddebtof 2,000.00crores,thedetailsofwhich

aresetoutbelow:

DateofallotmentPeriodCouponAmount

16June,2009120months9.15% 2,000.00crores

Duringtheyearended31March,2011,theBankredeemedsubordinateddebtof 155crores,thedetailsofwhich

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aresetoutbelow:

DateofmaturityPeriodCouponAmount4June,201072months5.75% 150.00crores20June,201093months9.05% 5.00crores

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Duringtheyearended31March,2010,theBankredeemedsubordinateddebtof 30.00crores,thedetailsofwhicharesetoutbelow:

DateofmaturityPeriodCouponAmount26April,200969months6.50% 30.00crores

2.1.3TheBankhasnotraisedanyhybridcapitalduringtheyear

ended31March,2011andyearended31March,2010.

2.1.4EarningsPerShare(‘EPS’)

ThedetailsofEPScomputationissetoutbelow:

Asat31March,201131March,2010

BasicandDilutedearningsfortheyear(Netprotaftertax)( incrores)3,339.912,478.14

Basicweightedaverageno.ofshares(incrores)

40.8538.23

Add:EquitysharesfornoconsiderationarisingongrantofstockoptionsunderESOP(incrores)0.670.87

Dilutedweightedaverageno.ofshares(incrores)41.5239.10

BasicEPS( )81.7764.83

DilutedEPS( )80.4463.38

Nominalvalueofshares( )10.0010.00

Dilutionofequityisonaccountof6,721,352stockoptions(previousyear8,708,581).

2.1.5EmployeeStockOptionsScheme(‘theScheme’)

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.00264.72-

Exercisedduringtheyear(5,371,724)97.62to824.40448.22-Outstandingattheendoftheyear11,122,518232.10to1,245.45712.902.86Exercisableattheendoftheyear4,479,300232.10to907.25525.531.49

Theweightedaveragesharepriceinrespectofoptionsexercisedduringtheyearwas 1,324.47.

StockoptionactivityundertheSchemefortheyearended31March,2010issetoutbelow:

WeightedWeightedaverageOptionsRangeofexerciseaverageremainingoutstandingprices( )exercisecontractuallifeprice( )(Years)

Outstandingatthebeginningoftheyear13,852,97439.77to824.40459.872.95Grantedduringtheyear4,413,990503.25to907.25513.15-Forfeitedduringtheyear(252,757)97.62to824.40356.51-

Expiredduringtheyear(24,320)39.77to232.10212.48-

Exercisedduringtheyear(4,092,369)39.77to824.40330.99-Outstandingattheendoftheyear13,897,51897.62to907

.25514.272.87Exercisableattheendoftheyear5,599,87897.62to824

.40434.751.58

Theweightedaveragesharepriceinrespectofoptionsexercisedduringtheyearwas 964.16.

FairValueMethodology

ApplyingthefairvaluebasedmethodinGuidanceNoteon‘AccountingforEmployeeShare-basedPayments’theimpactonreportednetprotandEPSwouldbeasfollows:


NetProt(asreported)( incrores)3,339.912,478.14Add:Stockbasedemployeecompensationexpenseincludedinnetincome( incrores)--Less:Stockbasedemployeecompensationexpensedeterminedunderfairvaluebasedmethod(proforma)( incrores)

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Appropriationtoproposeddividendduringtheyearended31March,2011includesdividendof 2.47crores(previousyear 0.51crores)paidpursuanttoexerciseof1,766,860employeestockoptionsafterthepreviousyearendandrecorddatefordeclarationofdividendfortheyearended31March,2010.

2.1.7Segmentalreporting

ThebusinessoftheBankisdividedintofoursegments:Treasury,RetailBanking,Corporate/WholesaleBanking,andOtherBankingBusiness.ThesesegmentshavebeenidentiedandbasedonRBI’srevisedguidelinesonSegmentReportingissuedon18April2007videCircularNo.DBOD.No.BP.BC.81/21.04.018/2006-07.Theprincipalactivitiesofthesesegmentsareasunder.

SegmentPrincipalActivities

TreasuryTreasuryoperationsincludeinvestmentsinsovereignandcorporatedebt,equityandmutualfunds,tradingoperations,derivativetradingandforeignexchangeoperationsontheproprietaryaccountand

forcustomersandcentralfunding.

RetailBankingConstituteslendingtoindividuals/smallbusinessessubjecttotheorientation,productandgranularitycriterionandalsoincludeslowvalueindividualexposuresnotexceedingthethresholdlimitof 5croresasdenedbyRBI.RetailBankingactivitiesalsoincludeliabilityproducts,cardservices,internetbanking,ATMservices,depository,nancialadvisoryservicesandNRIservices.

Corporate/WholesaleIncludescorporaterelationshipsnotincludedunderRetailBanking,corporateadvisoryBankingservices,placementsandsyndication,managementofpublicissue,projectappraisals,capitalmarketrelatedservicesandcashmanagementservices.

OtherBankingBusinessIncludesparabankingactivities*likethirdpartyproductdistributionandotherbankingtransactionsnotcoveredunderanyoftheabovethreesegments.

*Regroupedfromretailbankingsegmentinthepreviousye

ar

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TheoperationsofAxisSecuritiesandSalesLtd.andAxisTrusteeServicesLtd.havebeenclassiedunderthe‘RetailBanking’and‘Corporate/WholesaleBanking’segmentsrespectively.TheoperationsofAxisPrivateEquityLtd.,Axis

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Totalassets242,566.65

Segmentliabilities112,085.3446,462.7664,345.5238.42222,932.04

Unallocatedliabilities740.00

Totalliabilities223,672.04

Netassets(17,835.33)57,842.48(21,428.03)185.1918,894.61

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( incrores)

3

1March,2010

TreasuryCorporate/RetailOtherTotalWholesaleBankingBankingBankingBusiness

SegmentRevenue

Grossinterestincome(externalcustomers)3,651.304,966.703,020.660.3911,639.05

Otherincome1,299.831,550.91914.79198.683,964.21

TotalincomeasperProtandLossAccount4,951.136,517.613,935.45199.0715,603.26

Add/(less)intersegmentinterestincome13,864.921,401.423,831.180.2019,097.72

Totalsegmentrevenue18,816.057,919.037,766.63199.2734,700.98

Less:Interestexpense(externalcustomers)4,227.93-2,403.740.966,632.63

Less:Intersegmentinterestexpenses13,271.393,976.061,850.27-19,097.72

Less:Operatingexpenses296.27923.192,407.39135.543,762.39

Less:Unallocatedexpenses

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-

Operatingprot1,020.463,019.781,105.2362.775,208.24

Less:Provisionfornonperformingassets/Others(4.15)626.09766.900.351,389.19

Segmentresult1,024.612,393.69338.3362.423,819.05

Less:ProvisionforTax1,340.91

Extraordinaryprot/loss-

NetProt2,478.14

Segmentassets72,181.0068,816.7438,855.6245.54179,898.90

Unallocatedassets

687.77

Totalassets180,586.67

Segmentliabilities71,953.6535,677.8256,323.0312.49163,966.99

Unallocatedliabilities630.74

Totalliabilities164,597.73

Netassets227.3533,138.92(17,467.41)33.0515,988.94

GeographicSegments( incrores)

DomesticInternationalTotal31March,31March,31March,31March,31March,31March,2011201020112

01020112010

Revenue18,718.2414,998.901,108.07604.3619,826.3115,603.26

Assets220,322.02166,665.2522,244.6313,921.42242,566.65180,586.67

139

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-----------------------Page142-----------------------

2.1.8Relatedpartydisclosure

TherelatedpartiesoftheBankarebroadlyclassiedas:

a)Promoters

TheBankhasidentiedthefollowingentitiesasitsPromoters.

AssuranceCo.Ltd.,NationalInsuranceCo.Ltd.,UnitedIndiaInsuranceCo.Ltd.andTheOrientalInsuranceCo.Ltd.

b)KeyManagementPersonnel

c)RelativesofKeyManagementPersonnel

Mr.SanjayaSharma,Mrs.UshaBharadwaj,Mr.TilakSharma,Ms.TvishaSharma,Dr.SanjivBharadwaj,Dr.PrashantBharadwaj,Dr.BrevisBharadwaj,Dr.ReenaBharadwaj,Mrs.BhartiAgrawal,Mr.VedprakashPrashastiAgrawal,Mr.AnandAgrawal,Mr.PraveenAgrawal,Mrs.RekhaAgrawal,Mrs.RenuAgrawal,Mrs.

MeenuAgrawal,Mrs.SwapnaChakraborty,Mrs.ShikhaBhattacharya,Ms.ShilaChakraborty,Mr.Hirendra

d)Associate

BussanAutoFinanceIndiaPrivateLimited

BasedonRBIguidelines,detailsoftransactionswithAssociatesarenotdisclosedsincethereisonlyoneentity/partyinthiscategory.[referSchedule17(2)]

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ThedetailsoftransactionsoftheBankwithitsrelatedpartiesduringtheyearended31March,2011aregivenbelow:

( incrores)

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Items/RelatedPartyPromotersKeyRelativesofKeyTotalManagementManagementPersonnelPersonnelDividendPaid184.650.03-184.68InterestPaid389.650.070.04389.76InterestReceived0.220.02-0.24InvestmentofRelatedPartiesintheBank-2.28-2.28InvestmentinSubordinatedDebt/HybridCapitaloftheBank----RedemptionofSubordinatedDebt----Purchaseofinvestments10.24--10.24SaleofInvestments563.21--563.21

ManagementContractsandOtherreimbursements-5.46*-5.46PurchaseofFixedAssets----Non-fundedcommitments0.01--0.01Advancegranted----Advancerepaid-0.12-0.12Saleofxedassets----

ReceivingofServices45.40--45.40RenderingofServices2.51--2.51OtherReimbursementstoRelatedParties0.15--0.15

*includes 0.70croresubjecttoapprovalofshareholders

Thebalancespayableto/receivablefromtherelatedpartiesoftheBankason31March,2011aregivenbelow:

( incrores)

Items/RelatedPartyPromotersKeyRelativesofKeyTotalManagementManagementPersonnelPersonnelBorrowingsfromtheBank----

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DepositswiththeBank4,716.080.230.234,716.54PlacementofDeposits0.16--0.16Advances43.000.27-43.27InvestmentofRelatedPartiesintheBank152.780.04-152.82RepoBorrowings----Non-fundedcommitments3.01--3.01InvestmentinSubordinatedDebt/HybridCapitaloftheBank2,825.00--2,825.00AdvanceforRenderingofServices----Leasing/HParrangementsavailed----Leasing/HParrangementsprovided----OtherReceivables----OtherPayables-

---

141

-----------------------Page144-----------------------

Themaximumbalancespayableto/receivablefromtherelatedpartiesoftheBankduringtheyearended31March,2011aregivenbelow:( incrores)

Items/RelatedPartyPromotersKeyRelativesofKeyTotalManagementManagementPersonnelPersonnelBorrowingsfromtheBank----DepositswiththeBank4,716.093.944.964,724.99PlacementofDeposits0.16--0.16Advances

132.470.39-132.86InvestmentofRelatedPartiesintheBank156.150.04-156.19RepoBorrowing----Non-fundedcommitments39.00--39.00InvestmentinSubordinatedDebt/HybridCapitaloftheBank2,825.00--2,825.00

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Otherdeferredtaxassets27.2226.88

Netdeferredtaxasset816.87611.39

144

-----------------------Page147-----------------------

2.1.12EmployeeBenets

Group

ProvidentFund

Thecontributiontotheemployee’sprovidentfundoftheGroupamountedto 44.94croresfortheyearended31March,2011(previousyear 39.31crores)

TherulesoftheBank’sProvidentFundadministeredbyaTrustrequirethatiftheBoardofTrusteesareunabletopayinterestattheratedeclaredforEmployees’ProvidentFundbytheGovernmentunderpara60oftheEmployees’

ProvidentFundScheme,1952forthereasonthatthereturnoninvestmentislessorforanyotherreason,thenthedeciencyshallbemadegoodbytheBank.HavingregardtotheassetsoftheFundandthereturnontheinvestments,theBankdoesnotexpectanydeciencyintheforeseeablefuture.TherehasalsobeennosuchdeciencysincetheinceptionoftheFund.

AxisBankLtd.

Superannuation

TheBankcontributed 10.17crorestotheemployee’ssuperannuationplan

fortheyearended31March,2011(previousyear 9.67crores).

Group

LeaveEncashment

TheGroupchargedanamountof 70.66crorestowardsleaveencashmentfortheyearended31March,2011(previousyear 36.95crores).

Group

Gratuity

ThefollowingtablessummarizethecomponentsofnetbenetexpensesrecognisedintheProtandLossAccountandthefundedstatusandamountsrecognisedintheBalanceSheetfortheGratuitybenetplan.

ProtandLossAccount

Netemployeebenetexpenses(recognisedinpaymentstoandprovisionsf

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oremployees)( incrores)


CurrentServiceCost9.468.88

InterestonDenedBenetObligation3.902.94

ExpectedReturnonPlanAssets(3.36)(2.59)

NetActuarialLosses/(Gains)recognisedintheyear0.45(3.99)

PastServiceCost8.82-

Totalincludedin“EmployeeBenetExpense”19.275.24

ActualReturnonPlanAssets2.583.05

BalanceSheet

Detailsofprovisionforgratuity( incrores)


PresentValueofFundedObligations61.4343.02

FairValueofPlanAssets(63.62)(44.08)

NetLiability(2.19)(1.06)

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( incrores)


AmountsinBalanceSheetLiabilities0.590.35

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31March,31March,31March,31March,31March,20112010200920082007

DenedBenetObligations61.4343.0236.4923.4214.33

PlanAssets63.6244.0829.8317.7811.93

Surplus/(Decit)2.191.06(6.66)(5.64)(2.40)

ExperienceAdjustmentsonPlanLiabilities1.551.273.303.572.29

ExperienceAdjustmentsonPlanAssets(0.78)0.46(0.73)(0.17)0.13

AxisBankLtd.


Themajorcategoriesofplanassets*asapercentageoffairvalueoftotalplanassets–InsurerManagedFunds100100

*compositionofplanassetsisnotavailable

146

-----------------------Page149-----------------------

31March,2011

Principalactuarialassumptionsatthebalancesheetdate:

DiscountRate8.05%p.a.

ExpectedrateofReturnonPlanAssets7.50%p.a.

SalaryEscalationRate6.00%p.a.

EmployeeTurnover-21to30(ageinyears)16.55%

-31to44(ageinyears)10.00%


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31March,2010


DiscountRate7.90%p.a.

ExpectedrateofReturnonPlanAssets7.50%p.a.

SalaryEscalationRate6.00%p.a.

EmployeeTurnover-21to44(ageinyears)10.00%


Theestimatesoffuturesalaryincreasesconsideredtakeintoaccounttheination,seniority,promotionandotherrelevantfactors.

Theexpectedrateofreturnonplanassetsisbasedontheaveragelong-termrateofreturnexpectedoninvestmentsoftheFundduringtheestimatedtermoftheobligations.

Asthecontributionexpectedtobepaidtotheplanduringtheannualperiodbeginningafterthebalancesheetdateisbasedonvariousinternal/externalfactors,abestestimateofthecontributionisnotdeterminable.

Theaboveinformationisascertiedbytheactuaryandrelieduponbytheauditors.



Themajorcategoriesofplanassets*asapercentageoffairvalueoftotalplanassets–InsurerManagedFunds100.00100.00

*compositionofplanassetsisnotavailable



DiscountRate7.80%p.a.6.55%p.a.

ExpectedrateofReturnonPlanAssets7.50%p.a.7.50%p.a.

SalaryEscalationRate

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Reductionsonaccountofpaymentsduringtheyear-(0.27)Reductionsonaccountofreversalsduringtheyear-(4.07)Closingbalanceattheendoftheyear4.990.21

b)Movementinprovisionforcreditenhancementsonsecurtisedassetsissetoutbelow:( incrores)

31March,201131March,2010Openingbalanceatthebeginningoftheyear--Additionsduringtheyear--Reductionsduringtheyear--Closingbalanceattheendoftheyear--

c)Movementinprovisionfordebit/creditcardrewardpo

intsissetoutbelow:( incrores)

31March,201131March,2010Openingprovisionatthebeginningoftheyear18.419.97Provisionmadeduringtheyear8.259.35Reductionsduringtheyear(1.65)(0.91)Closingprovisionattheendoftheyear

25.0118.41

d)Movementinprovisionforothercontingencies(includingderivatives)issetoutbelow:( incrores)

31March,201131March,2010Openingprovisionatthebeginningoftheyear--Provisionmadeduringtheyear36.44-

Reductionsduringtheyear--Closingprovisionattheendoftheyear36.44-

148

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2.1.14SmallandMicroIndustries

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e)OtheritemsforwhichtheGroupiscontingentlyliable

OtheritemsrepresentoutstandingamountofbillsrediscountedbytheBank,estimatedamountofcontractsremainingtobeexecutedoncapitalaccountandcommitmentstowardsunderwritingandinvestmentinequitythroughbidsunderInitialPublicOffering(IPO)ofcorporatesasattheyearend.

149

-----------------------Page152-----------------------

2.1.16StatementpursuanttoSection212oftheCompaniesAct,1956,relatingtosubsidiarycompanies

Intermsoftheapprovalu/s212(8)oftheCompaniesAct,1956grantedbytheMinistryofCorporateAffairs,GovernmentofIndiavideitsletterno.47/19/2011-CL-IIIdated21January,2011( incrores)

Fortheyearended31March,2011

AxisAxisPrivateAxisTrusteeAxisMutualAxisAssetSecuritiesEquityLtd.ServicesLtd.FundTrusteeManagementandSalesLtd.CompanyLtd.Ltd.Capital80.

0015.001.500.05124.00ReservesandSurplus(16.33)2.958.650.03(96.05)TotalAssets(FixedAssets+Investments+CurrentAssets+DeferredTaxAssets)84.3721.7516.760.1141.78TotalLiabilities(Loans+CurrentLiabilities+Provisions)20.703.816.610.0313.83Investments---0.0921.16TotalIncome109.7712.4615.080.1228.05

Prot/(Loss)BeforeTaxation(8.17)3.7412.130.03(45.44)ProvisionforTaxation-1.314.030.01-Prot/(Loss)AfterTaxation(8.17)2.438.100.02(45.44)ProposedDividendandTax(includingcessthereon)--1.31--

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2.1.17ComparativeFigures

Previousyeargureshavebeenregroupedandreclassied,wherenecessarytoconformtocurrentyear’spresentation.

ForAxisBankLtd.


R.H.PatilR.B.L.VaishShikhaSharmaDirectorDirectorManagingDirector&CEO



Date:22ndApril,2011

Place:Mumbai

150

-----------------------Page153-----------------------

DISCLOSURESUNDERTHENEWCAPITALADEQUACYFRAMEWORK(BASELIIGUIDELINES)FORTHEYEARENDED31MARCH,2011

I.SCOPEOFAPPLICATION

AxisBankLimited(the‘Bank’)isacommercialbank,whichwasincorporatedon3December,1993.TheBankisthecontrollingentityforallgroupentitiesthatincludeitssixwhollyownedsubsidiaries.

TheconsolidatednancialstatementsoftheBankcomprisethenancialstatementsofAxisBankLimitedanditssubsidiariesthattogetherconstitutethe‘Group’.TheBankconsolidatesitssubsidiariesinaccordancewithAccountingStandard21(AS21)‘ConsolidatedFinancialStatements’issuedbytheInstitute

ofCharteredAccountantsofIndiaonaline-by-linebasisbyaddingtogetherthelikeitemsofassets,liabilities,incomeandexpenditure.WhilecomputingtheconsolidatedBank’sCapitaltoRisk-weightedAssetsRatio(CRAR),theBank’sinvestmentintheequitycapitalofthewholly-ownedsubsidiariesisdeducted,50%fromTier1Capitaland50%fromTier2Capital.ThesubsidiariesoftheBankarenotrequiredtomaintainanyregulatorycapital.ThetablebelowlistsAxisBank’sSubsidiaries/Associates/Jointventuresconsolidatedforaccountingandtheirtreatmentforcapitaladequa

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eligibleforinclusioninTier-2capital.AxisBankhasissueddebtinstrumentsthatformapartofTier-1andTier-2capital.Thetermsandconditionsthatareapplicablefortheseinstrumentscomplywiththestipulatedregulatoryrequirements.

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-----------------------Page154-----------------------

Tier-1bondsarenon-cumulativeandperpetualinnaturewithacalloptionafter10years.InterestonTier-1bondsispayableeitherannuallyorsemi-annually.SomeoftheTier-1bondshaveastep-upclauseoninterestpaymentrangingupto100bps.TheUpperTier-2bondshaveanoriginalmaturityof15yearswithacalloptionafter10years.TheinterestonUpperTier-2bondsispayableeitherannuallyorsemi-annually.SomeoftheUpperTier-2debtinstrumentshaveastep-upclauseoninterestpaymentrangingupto100bps.TheLowerTier-2bondshaveanoriginalmaturitybetween5to10years.TheinterestonlowerTier-2capitalinstrumentsispayableeithersemi-annuallyorannually.

EquityCapital

TheBankhasauthorizedsharecapitalof 500.00crorescomprising500,000,000equitysharesof 10/-each.Ason31March,2011theBankhasissued,subscribedandpaid-upequitycapitalof 410.55crores,constituting410,545,843numberofsharesof 10/-each.TheBank’ssharesarelistedontheNationalStockExchangeandtheBombayStockExchange.TheGDRsissuedbytheBankarelistedontheLondonStockExchange(LSE).

Duringtheyear,theBankhasalsoallottedequitysharestoemployeesunderitsEmployeeStockOptionPlan.

TheprovisionsoftheCompaniesAct,1956andotherapplicablelawsandregulationsgoverntherightsandobligationsoftheequitysharecapitaloftheBank.

DebtCapitalInstruments

TheBankhasraisedcapitalthroughInnovativePerpetualDebtInstrument(IPDI)eligibleasTier1CapitalandTier2CapitalintheformofUpperTier2andSubordinatedbonds(unsecuredredeemablenon-convertibledebentures),detailsofwhicharegivenbelow.

PerpetualDebtInstrument

TheBankhasraisedPerpetualDebtInstrumentseligibleasTier1Capital,theaggregatevalueofwhichason31March,2011was 419.14croresasstatedbelow.

DateofAllotmentRateofInterestPeriodAmount

30September,200610.05%Perpetual 214.00crores

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StructureandOrganization

RiskManagementDepartmentreportstotheExecutiveDirectorandCFOandtheRiskManagementCommitteeoftheBoardoverseesthefunctioningoftheDepartment.TheDepartmenthasthreeseparateteamsforCreditRisk,MarketRiskandOperationalRiskandtheheadofeachteamreportstotheheadofthedepartment.

155

-----------------------Page158-----------------------

V.CREDITRISK

CreditRiskManagementPolicy

Creditriskcoverstheinabilityofaborrowerorcounter-partytohonourcommitmentsunderanagreementandanysuchfailures,whichhaveanadverseimpactonthenancialperformanceoftheBank.TheBankisexposedtocreditriskthroughlendingandcapitalmarketactivities.

TheBank’screditriskmanagementprocessintegratesriskmanagementintothebusinessmanagementprocesses,whilepreservingtheindependenceandintegrityofriskassessment.Thegoalofcreditriskmanagementduringtheyearhasbeentomaintainahealthycreditportfoliobymanagingriskattheportfoliolevelaswellasattheindividualtransactionlevel.TheBoardofDirectorsestablishestheparametersforriskappetite,whicharedenedquantitativelyandqualitativelyinaccordancewiththelaid-downstrategicbusinessplanintheCreditRiskManagementPolicy.Thefoundationofcreditriskmanagementrestsontheinternalratingsystem.

CreditRatingSystem

Internalreportingandoversightofassetsisprincipallydifferentiatedbythecreditratingsapplied.TheBankhasdevelopedratingtoolsspecictomarketsegmentssuchaslargecorporates,mid-corporates,SME,nancialcompaniesandmicronancecompaniestoobjectivelyassessunderlyingriskassociatedwithsuchexposures.ForretailandschematicSMEexposures,scorecardsandborrower-scoringtemplatesareusedforapplicationscreening.Hence,fortheseexposures,thecreditriskismeasuredandmanagedattheportfoliolevel.TheBankisalsotryingtouseinternal

databaseofretailloansforbuildingupstatisticalbehaviouralscorecardsaswellasforreningcreditassessmentattheapplicationsourcinglevel.

Thecreditratingtoolusesacombinationofquantitativeinputsandqualitativeinputstoarriveata‘point-in-time’viewoftheratingofcounterparty.ThemonitoringtooldevelopedbytheBankhelpsinobjectivelyassessingthecreditqualityoftheborrowertakingintocognizancetheactualbehaviourpost-disbursement.Theoutputoftherating

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modelisprimarilytoassessthechancesofdelinquencyoveraone-yeartimehorizon.Eachinternalratinggradecorrespondstoadistinctprobabilityofdefault.Modelvalidationiscarriedoutperiodicallybyobjectivelyassessingitscalibrationaccuracyandstabilityofratings.

CreditSanctionandrelatedprocesses

TheBankhasputinplacethefollowinghierarchicalcommitteestructureforcreditsanctionandreview:

Theguidingprinciplesbehindthecreditsanctionprocessareasunder.

businessoperationsandnotbasedsolelyontheavailabilityofsecurity.undueriskconcentrationacrossanyparticularindustrysegmentsandmonitorcreditriskqualitymigration.sector.

156

-----------------------Page159-----------------------

monitoring.ensurethatitsadvancesaretoborrowershavingagoodtrackrecordandsatisfyingthecriterionofminimumacceptablecreditrating.Appropriatecovenantsarestipulatedforriskcontainmentandmonitoring.

ReviewandMonitoring

Borrowerswithlowercreditratingaresubjecttomorefrequentreviews.andwiththeregulatoryframework,complianceofsanctiontermsandconditionsandeffectivenessofloanadministration.initiatedpromptlytominimizethepotentiallosstotheBank.

PortfolioManagement

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sessingtheconcentrationriskwithintheloanportfolio.ParticularattentionisgiventoindustrysectorswheretheBankbelievesthereisahighdegreeofriskorpotentialforvolatilityinthefuture.TheBankhasxedinternallimitsforaggregatecommitmentstodifferentsectorssothattheexposuresareevenlyspreadovervarioussectors.

PoliciesforHedgingandMitigatingCreditRisk

CreditRiskMitigants(CRM)likenancialcollateral,non-nancialcollateralandguaranteesareusedtomitigatecreditriskexposure.AvailabilityofCRMeitherreduceseffectiveexposureontheborrower(incaseofcollaterals)ortransferstherisktothemorecreditworthyparty(incaseofguarantees).Amajorpartoftheeligiblenancialcollateralsisintheformofcash,themostliquidofassetsandthusfreefromanymarketandliquidityrisks.TheBankhasformulatedaCollateralManagementPolicyasrequiredunderBaselIIguidelines.

CreditRiskAssetQuality

DistributionofCreditRiskbyAssetQuality

Theratingscaleforlargeandmidcorporatesisa14-pointgranularscalethatrangesfromAB-AAAtoAB-D.TheratingtoolforSMEhasan8-pointratingscale,rangingfromSME1toSME8.ThereareseparateratingtoolsfornancialcompaniesandschematicSMEandretailagriculturalexposures.

DenitionsofNon-PerformingAssets

Advancesareclassiedintoperformingandnon-performingadvances(NPAs)asperRBIguidelines.NPAsarefurtherclassiedintosub-standard,doubtfulandlossassetsbasedont

hecriteriastipulatedbyRBI.Anasset,includingaleasedasset,becomesnon-performingwhenitceasestogenerateincomefortheBank.

AnNPAisaloanoranadvancewhere:

1.interestand/orinstalmentofprincipalremainsoverdueforaperiodofmorethan90daysinrespectofatermloan;

2.theaccountremains“out-of-order’’inrespectofanOverdraftorCashCredit(OD/CC);

3.thebillremainsoverdueforaperiodofmorethan90da

ysincaseofbillspurchasedanddiscounted;

4.aloangrantedforshortdurationcropswillbetreatedasanNPAiftheinstallmentsofprincipalorinterestthereonremainoverduefortwocropseasons;and

5.aloangrantedforlongdurationcropswillbetreatedasanNPAiftheinstallmentsofprincipalorinterestthereonremainoverdueforonecropseason.

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2.IronandSteel6,615.024,589.93

3.OtherMetalandMetalProducts1,167.861,738.55

4.AllEngineering3,408.436,295.54

-OfwhichElectronics365.5275.56

5.PowerGeneration&Distribution6,234.8110,875.80

6.CottonTextiles2,533.45387.05

7.JuteTextiles31.090.95

8.OtherTextiles1,597.05350.88

9.Sugar1,007.8591.41

10.Tea80.641.57

11.FoodProcessing2,919.02123.46

12.EdibleOilsandVanaspati1,257.482,336.21

13.Beverages&Tobacco

303.9242.66

14.Wood&woodproducts351.28126.00

15.PaperandPaperProducts937.60409.88

16.Rubber,plasticandtheirproducts614.61283.68

17.Chemicalsandchemicalproducts7,817.203,841.41

-OfwhichPetrochemicals2,234.071,461.80

-OfwhichDrugs&Pharmaceuticals1,938.06721.00

18.Glassandglassware128.9322.05

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Over6monthsandupto1year2,218.119,335.1311,815.40317.36

Over1yearandupto3years1,889.6013,416.9435,236.9294.82

Over3yearsandupto5years727.818,181.9219,459.50-

Over5years3,326.5114,891.7548,192.374,004.87

Total21,408.6671,991.62142,407.836,905.27

160

-----------------------Page163-----------------------

MovementofNPAsandProvisionforNPAs(includingNPIs)–Positionason31March,2011

( incrores)

Amount

A.AmountofNPAs(Gross)1,599.42

-Substandard458.45

-Doubtful1338.54

-Doubtful259.18

-Doubtful315.09

-Loss728.16

B.NetNPAs410.35

C.NPARatios

-GrossNPAstogrossadvances(%)1.11%

-NetNPAstonetadvances(%)0.29%

D.MovementofNPAs(Gross)

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-AmountofassetsoriginatedwithinayearbeforesecuritisationNA4.Amountofexposuressecuritised-CorporateLoans301.665.Unrecognisedgainorlossesonsale-CorporateLoans-

AggregateamountofSecuritisationExposuresRetainedorPurchasedason31March,2011isgivenbelow

( incrores)

Sr.No.TypeofSecuritisationOnBalanceSheet(Amount)OffBalanceSheet(Amount)1.Retained--2.Securitiespurchased--3.Liquidityfacility--4.Creditenhancement(cashcollateral)

--5.Othercommitments--

163

-----------------------Page166-----------------------

Risk-weightwiseBucketDetailsoftheSecuritisationExposuresontheBasisofBook-Value

( incrores)

AmountCapitalchargeBelow100%riskweight--100%riskweight--Morethan100%riskweight--Deductions-EntirelyfromTierIcapital--

-CreditenhancingI/OsdeductedfromTotalCapital---Creditenhancement(cashcollateral)--

B.TradingBook

DetailsofExposureSecuritisedbytheBankandsubjecttoSecuritisationFramework

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( incrores)

Sr.No.TypeofSecuritisationAmount

1.AggregateamountofexposuressecuritisedbytheBankforwhichtheBankhasNILretainedsomeexposuresandwhichissubjecttothemarketriskapproach

AggregateamountofSecuritisationExposuresRetainedorPurchasedason31March,2011isgivenbelow

( incrores)

Sr.No.TypeofSecuritisationOnBalanceSheet(Amount)OffBalanceSheet(Amount)

1.Retained--

2.Securitiespurchased

-CorporateLoans52.83-

-LeaseRental167.86-

3.Liquidityfacility--

4.Creditenhancement(cashcollateral)--

5.Othercommitments

--

Risk-weightwiseBucketDetailsoftheSecuritisationExposuresontheBasisofBook-Value

( incrores)

AmountCapitalcharge

1.ExposuressubjecttoComprehensiveRiskMeasureforspecicrisk

-Retained--

-Securitiespurchased--

2.Exposuressubjecttothesecuritisationframeworkforspecicrisk

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Below100%riskweight220.6911.97

100%riskweight--

Morethan100%riskweight--

3.Deductions

-EntirelyfromTierIcapital--

-CreditenhancingI/OsdeductedfromTotalCapital--

-Creditenhancement(cashcollateral)--

164

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VIII.MARKETRISKINTRADINGBOOK

MarketriskistherisktotheBank’searningsandcapitalduetochangesinthemarketlevelofinterestrates,pricesofsecurities,foreignexchangeandequities,aswellasthevolatilitiesofthosechanges.TheBankisexposedtomarketriskthroughitstradingactivities,whicharecarriedoutbothforcustomersandonaproprietarybasis.TheBankadoptsacomprehensiveapproachtomarketriskmanagementforitstrading,investmentandasset/liabilityportfolios.Formarketriskmanagement,theBankuses:

Risklimitssuchasposition,gapsandsensitivities(duration,PVBP,optiongreeks)aresetupaccordingtoanumberofcriteriaincludingrelevantmarketanalysis,businessstrategy,managementexperienceandtheBank’sriskappetite.TheselimitsaremonitoredonadailybasisandtheexceptionsareputuptoALCO.Risklimitsarereviewed,atleast,annuallyormorefrequently,ifdeemednecessary,tomaintainconsistencywithtradingstrategiesandmaterialdevelopmentsinmarketconditions.

TheBankusesHistoricalSimulationanditsvariantsforcomputingVaRforitstradingportfolio.VaRiscalculatedata99%condencelevelforaone-dayholdingperiod.Themodelassumesthattheriskfactorchangesobservedinthepastareagoodestimateofthoselikelytooccurinthefutureandis,therefore,limitedbytherelevanceofthehistoricaldataused.TheBanktypicallyuses500daysofhistoricaldataortwoyearsofrelativechangesinhistoricalratesandprices.Themethod,however,doesnotmakeanyassumptionaboutthenatureortypeofthelossdistribution.TheVaR

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modelsfordifferentportfoliosareback-testedatregularintervalsandtheresultsareusedtomaintainandimprovetheefcacyofthemodel.TheVaRiscomputedonadailybasisforthetradingportfolioandreportedtotheseniormanagementoftheBank.

TheVaRmeasureissupplementedbyaseriesofstresstestsandsensitivityanalysisthatestimatesthelikelybehaviourofaportfoliounderextremebutplausibleconditionsanditsimpactonearningsandcapital.TheBankundertakesstresstestsformarketrisksforitstradingbook,IRS,forexopenpositionandforexgapsaswellasforliquidityriskattheendofeachquarter.

ConcentrationRisk

TheBankhasallocatedtheinternalrisklimitsinordertoavoidconcentrations,whereverrelevant.Forexample,theAggregateGapLimitisallocatedtovariouscurrenciesandmaturitiesasIndividualGapLimitstomonitorconcentrations.WithintheoverallPV01limit,asublimitissetupwhichisnotexpectedtobebreachedbytradeslinkedtoanyindividualbenchmark.

LiquidityRisk

LiquidityRiskisdenedasthecurrentandprospectiverisktoearningsorcapitalarisingfromabank’sinabilitytomeetitscurrentorfutureobligationsontheduedate.Liquidityriskistwo-dimensionalviz.,riskofbeingunabletofundportfolioofassetsatappropriatematurityandrates(liabilitydimension)andtheriskofbeingunabletoliquidateanassetinatimelymanneratareasonableprice(assetdimension).

TheBank’sALMpolicydenesthegaplimitsforitsstructuralliquidityposition.TheliquidityproleoftheBankisanalyzedonastaticbasisbytrackingallcashinowsandoutowsinthematur

ityladderbasedontheexpectedoccurrenceofcashows.TheliquidityproleoftheBankisalsoestimatedonadynamicbasisbyconsideringthegrowthindepositsandloans,investmentobligations,etc.forashort-termperiodofthreemonths.TheBankundertakesbehavioralanalysisofthenon-maturityproductsviz.savingsandcurrentdepositsandcashcredit/overdraftaccountsonaperiodicbasis,toascertainthevolatilityofresidualbalancesinthoseaccounts.Therenewalpatternandprematurewithdrawalsoftermdepositsanddrawdownofunavailedcreditlimitsarealsocapturedthroughbehavioralstudies.Theconcentrationoflargedepositsismonitoredonaperiodicbasis.

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TheBank’sabilitytomeetitsobligationsandfunditselfinacrisisscenarioiscriticalandaccordingly,liquiditystresstestsareconductedunderdifferentscenariosatperiodicalintervalstoassesstheimpactonliquiditytowithstandstressed

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conditions.TheliquiditypositionsofoverseasbranchesaremanagedinlinewiththeBank’sinternalpoliciesandhostcountryregulations.SuchpositionsarealsoreviewedcentrallybytheBank’sALCOalongwithdomesticpositions.

CounterpartyRisk

TheBankhasputinplaceappropriateguidelinestomonitorcounterpartyriskcoveringallcounterpartyexposuresonbanks,primarydealersandnancialinstitutionsarisingoutofmovementinmarketvariables.Creditexposurestoissuerofbonds,advances,etc.aremonitoredseparatelyundertheprudentialnormsforexposuretoasingleborroweraspertheBank’sCorporateCreditRiskPolicyorInvestmentPolicyasapplicable.Ratingofcounterpartybanks,PrimaryDealersandNBFCsandsanctioningoflimitsaredoneaspersuitableratingModellaiddownbytheBank.TheBankhasalsoputinplacethe“Suitability&AppropriatenessPolicy”andLoanEquivalentRisk(LER)Policytoevaluatecounterpartyriskarisingoutofallcustomerderivativescontracts.

CountryRisk

TheBankhasputinplaceariskmonitoringsystemforthemanagementofcountryrisk.TheBankusestheseven-categoryclassicationi.e.insignicant,low,moderate,high,veryhigh,restrictedandoff-creditfollowedbytheExportCreditGuaranteeCorporationLtd.(ECGC)andratingsofinternationalratingagencyDun&Bradstreetformonitoringthecountryexposures.Thecategorizationofcountriesareundertakenatmonthlyintervalsoratmorefrequentintervalsifthesituationsowarrants.Exposuretoacountryincludesallcredit-relatedlending,tradingandinvestmentactivities,whethercrossborderorlocallyfunded.TheBankhassetupexposurelimitsforeachriskcategoryasalsopercountry

exposurelimitsandaremonitoredatweeklyintervals.Inadditionexposurestohighrisk,veryhighrisk,restrictedandoff-creditcountriesareapprovedonacasetocasebasis.

RiskManagementFrameworkforOverseasOperations

TheBankhasputinplaceacomprehensiveRiskManagementPolicyforitsglobaloperations,whichpresentlyincludesbranchesinSingapore,HongKong,andDubai.Ithasalsoformulatedcountry-specicriskpolicybasedonthehostcountryregulators’guidelines.TheAssetLiabilityManagementandalltheriskexposuresfortheoverseasoperationsaremonitoredcentrallyattheCentralOfce.

CapitalRequirementforMarketRisk–Positionason31March,2011

( incrores)

AmountofCapitalRequired

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-Interestraterisk1,152.74

-Equitypositionrisk193.73

-Foreignexchangerisk(includinggold)32.19

IX.OPERATIONALRISK

StrategiesandProcesses

Operationalriskistheriskoflossresultingfrominadequateorfailedinternalprocesses,peopleorsystems,orfromexternalevents.Operationalriskmanagement(ORM)framework,ORMpolicy,operationalrisklossdatacollectionmethodology,risk&controlself-assessmentframework,keyriskindicatorframework,rolesandresponsibilitiesofORMfunctionhavebeenapprovedbytheBanktoensurethatoperationalriskwithintheBankisproperlyidentied,assessed,monitored,controlled/mitigatedandreportedinastructuredmanner.

Basedontheabovepolicy/framework/methodologies,theBankhasinitiatedseveralmeasurestomanageoperationalrisk.TheBankhasputinplaceahierarchicalstructuretoeffectivelymanageoperationalriskthroughtheformationofseveralinternalcommitteesviz.,OperationalRiskManagementCommittee(ORMC),ProductManagementCommittee(PMC),ChangeManagementCommittee(CMC),OutsourcingCommittee,SoftwareEvaluationCommitteeandIT

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SecurityCommittee.Thefunctioningofthesecommitteeshasstabilised.TheRiskDepartmentactsastheconvenorofORMCandisamemberinPMC,CMC,OutsourcingCommittee,SoftwareEvaluationCommitteeandITSecurityCommittee.

TheBankhasfurtherenhanceditscapabilityforeffectivemanagementofoperationalriskwiththeimplementationofasoftwaresolution(ORMonitor)whichcreatesadatabaseonlosseventsexperiencedbythedifferentbusinesslinesoftheBank,identifyareaswhichshowmanifestationofweakcontrolsthroughRisk&ControlSelfAssessment(RCSA)andKeyRiskIndicator(KRI)modules,andoveraperiodwouldenabletheBa

nktoadoptsophisticatedapproachesforthecomputationofcapitalforoperationalrisk.

StructureandOrganization

TheRiskManagementCommittee(RMC)oftheBoardattheapexlevelisthepolicymakingbody.RMCissupportedbytheOperationalRiskManagementCommittee(ORMC),consistingofSeniorManagementpersonnel,whichisresponsibleforimplementationoftheOperationalRiskpolic

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iesoftheBank.Thisinternalcommitteesuperviseseffectivemonitoringofoperationalriskandtheimplementationofsoftwaredrivenframeworkforenhancedcapabilitytomanageoperationalrisk.Asub-committeeofORMC(Sub-ORMC)hasbeenconstitutedtoassisttheORMCindischargingitsfunctionsbydeliberatingtheoperationalriskissuesindetailandescalatingthecriticalissuestoORMC.

ScopeandNatureofOperationalRiskReportingandMeasurementSystems

Asystematicprocessforreportingrisks,losses,“nearmisses”andnon-complianceissuesrelatingtooperationalriskshasbeendevelopedandimplemented.Theinformationgatheredisbeingusedtodeveloptriggerstoinitiatecorrectiveactionstoimprovecontrols.AllcriticalrisksandpotentiallosseventswouldbereportedtotheSeniorManagement/ORMC/RMCasappropriate,fortheirdirectionsandsuggestions.

PoliciesforHedgingandMitigatingOperationalrisk

AnOperationalRiskManagementPolicyapprovedbytheRiskManagementCommitteeoftheBoarddetailstheframeworkforhedgingand/ormitigatingoperationalriskintheBank.Businessunitsputinplacebasicinternalcontrols

asapprovedbytheProductManagementCommitteetoensureappropriatecontrolsintheoperatingenvironmentthroughouttheBank.Asperthepolicy,allnewproductsarebeingvettedbytheProductManagementCommitteetoidentifyandassesspotentialoperationalrisksinvolvedandsuggestcontrolmeasurestomitigatetherisks.Eachnewproductorserviceintroducedissubjecttoariskreviewandsignoffprocesswhereallrelevantrisksareidentiedandassessedbydepartmentsindependentoftherisk-takingunitproposingtheproduct.Similarly,anychangestotheexistingproducts/processesarebeingvettedbytheChangeManagementCommittee.Inadditiontotheabove,thebusinessdepartmentssubmitActionTakenReports,afterimplementationof

theproduct,totheProductManagementCommitteefortheirreview.TheproductisalsoindependentlyreviewedbytheInspection&AuditDepartmentoftheBank.

ApproachforOperationalRiskCapitalAssessment

AspertheRBIguidelines,theBankhasfollowedtheBasicIndicatorApproachfortheyearending31March,2011.TheBankisalsoreadyforcompilationofcapitalchargeforoperationalriskundertheStandardisedApproach.TheBankhasputinplaceastructureforidentifyinggapsininternalcontrolsacrosstheentireBank.Simultaneously,theBankis

preparingitselfformigrationtotheAdvancedMeasurementApproach.TheBankhasprocuredaweb-basedsolutioni.e.OpRiskMonitorfromSASforassessing/measuringandmonitoringtheoperationalriskissues.

X.INTERESTRATERISKINTHEBANKINGBOOK

TheBankassessesitsexposuretointerestrateriskinthebankingbookattheendofeachquarterconsideringadropinmarketvalueofinvestmentswith50bpschangeininterestrates.Calcu

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lationofinterestrateriskinthebankingbook(IRRBB)isbasedonapresentvalueperspectivewithcashowsdiscountedatzerocouponyieldspublishedbyNationalStockExchange(NSE)fordomesticbalancesheetandUSDLIBORforoverseasbalancesheet.Othercurrenciesaretakeninequivalentbasecurrencies(INRfordomesticbooksandUSDforoverseasbranches)astheBankdoesnothavematerialexposurestoothercurrenciesasapercentageofthebalancesheet.Cashowsareassumedtooccurat

167

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themiddleoftheregulatorybuckets.Non-interestsensitiveproductslikecash,currentaccount,capital,volatileportionofsavingsbankdeposits,etc.areexcludedfromthecomputation.TheBankdoesnotrunapositiononinterestrateoptionsthatmightresultinnon-linearpay-off.Futureinterestcashowsfromoutstandingbalancesareincludedintheanalysis.

TheEarningsatRisk(EaR)measuresthesensitivityofnetint

erestincometoparallelmovementininterestratesontheentirebalancesheet,andisreportedtotheseniormanagementonaweeklybasis.

Detailsofincrease(decline)inearningsandeconomicvalueforupwardanddownwardrateshocksbasedonbalancesheetason31March,2011aregivenbelow:

EarningsPerspective

( incrores)

CountryInterestRateShock

0.50%(-)0.50%

India(67.87)67.87

Overseas8.62(8.62)

Total

(59.25)59.25

EconomicValuePerspective

( incrores)

CountryInterestRateShock

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0.50%(-)0.50%

India310.77(302.66)

Overseas35.60(36.74)

Total346.37(339.40)

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BANK’SNETWORK:LISTOFCENTRESASON31MARCH,2011

State/UTCentreState/UTCentreState/UTCentreAndaman&NizamabadNalbariPortBlair

NicobarUTNuzvidNoonmatiAndhraPradeshAdilabadOngoleNorthLakhimpurAdoniPLPuramSibsagarAlamuruPaidiparruSilcharAlwalPatancheruTezpurAnantapurPoolapalleTinsukiaBapatlaProddatur

BiharArrahBibinagarQuthbullapurAurangabadBobilliRajahmundryBegusaraiChevellaRajamBettiahChillakalluRajampetBhagalpurChinnamiramRamagundamBiharsharifChiralaRepalleChapra

ChittoorSangareddyDarbhangaEdarapalliSathupallyGayaEluruSerilingampallyGopalganjGachibowliShamshabadHajipurGajuwakaSrikakulamKatihar

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GopalapatnamTadepalligudemKishanganjGudivadaTadpatriMadhubaniGunturTenaliMotihariHindupurTirupatiMungerHyderabadUppalKalanMuzaffarpurJangareddigudemVijayawadaPatnaKadapaVisakhapatnamPurniaKakinadaVizianagaramSaharsaKamareddyWarangalSamastipurKarimnagarZahirabadSasaramKasibuggaArunachalPradeshItanagarSitamarhiKhammamAssamBarpetaRoadSiwan

KompallyBiswanathCharialiChandigarhUTChandigarhKukatpallyBongaigaonManimajraKurnoolDhubriChattisgarhAbhanpurLBNagarDibrugarhAmbikapurMachilipatnamDuliajanBhataparaMahbubnagarGoalparaBhilaiMalkajgiriGolaghat

BilaspurMiryalgudaGuwahatiChampaMuthukurJorhatDhamtariNalgondaKarimganjDongargarhNandyalKhanaparaDurgNarasaraopetMangaldoiJagdalpurNelloreNagaonKawardha

169

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State/UTCentreState/UTCentreState/UTCentre

KorbaGariad

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harVapiMahasamundGodhraVejalpurManendragarhGondalVeravalRaigarhHalolVisavadarRaipurHarijVisnagarRajimHimatnagarVyaraRajnandgaonIdarHaryanaAmbalaSaktiJamjodhpurBahadurgarhUrlaJamnagarBhiwaniJashpurnagarJetpur-NavagadhCheekaDadra&NagarSilvassaJunagadhFaridabadUTKalavadFatehabadDaman&DiuUTDamanKalol

GurgaonDelhiDelhiKeshodHissarGoaAgaciamKhambaliaJakhalCandolimLathiJhajjarMapusaMadhaparJindMargaoMahuvaKaithalPanajiManavadarKalka

PondaMehsanaKarnalVascoMetodaKundliGujaratAhmedabadModasaKurukshetraAmreliMorbiManesarAnandMundraNarnaulAnkleshwarNadiadPalwalAtulNaranp

arPanchkulaBagasaraNavagamPanipatBardoliNavsariRatiaBharuchPaddhariRewariBhavnagarPalanpurRohtakBhujPatan

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SadauraBopalPipavavSadonBotadPorbandarSirsaChandlodiyaRadhanpurSonipatChhatralRajkotTohanaChikhliRajpiplaYamunanagarDahejRajulaHimachalPradeshBaddiDahodSanandShimlaDeesaSuratSolanDevgadBariaSurendranagarUnaDhorajiTalajaJammu&KashmirJammuDhrangadhraTarasadiSrinagarDhrolUmberg

aonJharkhandBokaroDwarkaUnjhaChaibasaGadhadaVadodaraDaltonganjGandhidhamVallabhVidyanagarDeogharGandhinagarValsadDhanbad

170

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DumkaPutturBalaghatGamariaRaichurBarwaniGiridihRanibennurBeetulHazaribaghSaidapurBhindJamshedpurSandur

BhopalKodarmaSedamBinaRamgarhShahpurBurhanpurRanchiShimogaChhatarpurKarnatakaAthniSindhnurChhindwaraBagalkotSirsi

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amSendhwaKushtagiThodupuzhaSeoniMandyaThrikkakaraShahdolMangaloreThrippunithuraShahpuraManviThrissurShajapurMarlanhalliTiruvallaSheopurMysoreVadakaraShivpuriNelamangalaMadhyaPradeshAshokNagarSidhi

171

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TikamgarhMurbadOrissaAngulUjjainNagpurBalasoreVidishaNalasoparaBarbilWaidhanNandedBargarhMaharashtraAhmednagarNandurbarBaripadaAklujNashikBerhampur(Ganjam)AkolaNaviMu

mbaiBhadrakAmbernathOsmanabadBhanjanagarAmravatiPandharpurBhawanipatnaAurangabadPanvelBhubaneswarBadlapurParatwadaBolangirBaramatiParbhaniChandanpurBarshiPenChandikhole

BeedPhaltanCuttackBhandaraPimpalgaonDhamraportBhiwandiPimpriChinchwadDhenkanalBhusawalPuneDumudumaBoisarRahuri-KhurdGunupur

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BuldhanaRatnagiriJagatpurChakanSangamnerJajpurChalisgaonSangliJaleswarChandrapurSataraJatniChiplunShikrapurJeyporeDevalaliShirdiJharsugudaDhuleShrirampurKendraparaDindoriSolapurKeonjharDombivaliTasgaonNabrangpurGhotiThaneNawapara(Nuapada)GondiaTuljapurNayagarhHingnaUlhasnagarNimapara

HinjewadiVasaiParadipIchalkaranjiVirarParlakhemundiIslampurWaiPuriJalgaonWalujRairangpurJalnaWardhaRajgangpurKagalWashimRayagadaKalyanYavatma

lRourkelaKaradYevlaSambalpurKhamgaonYewatSundargarhKhed-ShivapurManipurImphalTalcherKolhapurMeghalayaJowaiTitlagarhLasalgaonShillongPondicherryUTPondicherryLaturTuraPunjabAbohar

MalegaonMizoramAizawlAdampurMira-BhayanderNagalandDimapurAddaDhakaMirajKohimaAjnalaMumbaiMokokchungAmloh

172

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-----------------------Page175-----------------------


AmritsarNabhaJhalawarBaghaPuranaNakodarJhunjhunuBangaNawanshahrJodhpurBarnalaPathankotKhairthalBatalaPatialaKhandelaBathindaPattiKhatooShyamjiBegowalPhagwaraKherliBhogpurPhillaurKotaBikhiwindPhullanwalaLachhmangarh

BudhladaQadianLalsotChogawanRajpuraMahwaDasuyaRamasaraMandawaDeraBabaNanakRayyaMertaCityDerabassiRupnagarMukandgarhDevigarhSamanaNadbaiDhariwalSangrur

NagarDhilwanShahkotNagaurDinanagarSriHargobindpurNoharFaridkotSudharPaliFatehgarhChurianSultanpurLodhiPhalodiFerozepurTarnTaranPilaniGardhiwalaThreekePilibanga

GarhshankarUrmarTandaPiparCityGehriMandiRajasthanAbuRoadRamgarhGobindgarhAjmerRawatbhataGorayaAlwarRawatsarGurdaspurBalotraReengus

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HoshiarpurBandikuiSangariaJagraonBanswaraSawaiMadhopurJalandharBarmerSikarJhabalKalanBayanaSriMadhopurKapurthalaBharatpurUdaipurKhadaurSahibBhilwaraSikkimGangtokKhannaBhiwadiNamchiKotkapuraBikanerRangpoLambraBilaraTamilNaduAmbatturLandranBundiAmmapettaiLudhianaChirawaAnthiyurMalerkotlaChittaurgarhAppakudal

MaloutChuruAranthangiMansaDausaArniMianiKhasDeegAtturMogaDungarpurAyothiapatinamMohaliGanganagarChengalpattuMukerianHanumangarhChennaiMuktsarJaipur

ChidambaramMundianKalanJaloreCoimbatore

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CuddaloreRaja

palayamDeoriaCumbumRamanathapuramEtahDharmapuriRasipuramEtawahDindigulSalemFaizabadEdanganasalaiSarkarsamakulamFarrukhabadEdappadiSath

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yamangalamFatehpurEraiyurSelaiyurFirozabadErodeSivakasiGajraulaHosurTaramangalamGhaziabadIlanjiThanjavurGhazipurIrungattukottaiTheniGondaKallakkurichiThirukarungudiGorakhpurKancheepuramThiruvallurHapurKangeyamThiruvarurHardoiKaraikudiThondamuthurHathrasKaramadaiThuraiyurJaunpurKarumathampattiTiruchengodeJhansiKarurTiruc

hirapalliKannaujKelambakkamTirunelveliKanpurKumbakonamTirupurKhatauliLabbaikudikaduTiruttaniKhurjaLalgudiTiruvannamalaiKosikalanMaduraiTuticorinLakhimpur-KheriMaduranthakamVazhapadiLucknow

MallasamudramVellakoilMaharajganjManachanallurVelloreMainpuriMayiladuthuraiVillupuramMathuraMecheriVirudhunagarMeerutMedavakkamTripuraAgartalaMirzapurMettunasuvampalayamDharmanagarMoradabadMettupalayamUttarPradeshAgra

MuzaffarnagarMetturAligarhNajibabadMusiriAllahabadNoidaNagapattinamAmrohaPadraunaNagercoilAzamgarhPilibhitNasiyanurBada

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unPratapgarhOmalurBaghpatRaeBareliOotyBahraichRampurPalladamBalliaSaharanpurPallavaramBalrampurShahjahanpurParamkudiBarabankiSitapurPattukottaiBareillySultanpurPerambalurBastiUnnaoPeriasemurBhadohiVaranasiPollachiBijnorVrindavanPoonamalleeBulandshahrUttarakhandBazpurPudukkottaiChandausiDehradun

174

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State/UTCentreState/UTCentre

HaridwarKandiKashipurKatwaMussoorieKharagpurPandriKhardahaRishikeshKochBiharRoorkeeKolkataRudrapurKonnagar

TalliHaldwaniKrishnanagarWestBengalAlipurduarMadhyamgramAmtalaMahestalaAndulMaldaArambaghMedinipurAsansolMemariBagnanNabadwipBaharampurNabapallyBaidyabatiNaihatiBallyNarendrapurBalurghatNewGariaBankuraNimtaBarrackporePanagarh

BaruipurPanihatiBasirhatPanskuraBelghoriaPuruliyaBolpurRaghunathganjBongaonRaiganjBoralRajarhatBurdwanRajpur-SonarpurChandernagoreRampurhat

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ChinsurahRanaghatContaiRaniganjDakshineswarRishraDalkholaSeramporeDankuniShyamnagarDarjeelingSiliguriDiamondHarbourSingurDomjurSuriDumDumTamlukDurgapurTarakeswarFuliaUttarparaHabraGrandTotal921HaldiaHowrahOverseasSingaporeHongKongJalpaiguriDubaiKalimpongKalnaShanghaiAbuDhabiKalyaniKanchrapara

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-----------------------Page179-----------------------

Thereisheightenedawarenessthatindiscriminateuseof

naturalresourceshaspushedourplanettothebrinkof

imbalance,whichifuncheckedcouldthreatenour

survival.Ascorporatecitizens,weareacutelyawareof

ourresponsibilitytowardsconservationandweare

takingsmallbutimportantstepsinthatdirection.These

maybesummarizedinthefollowingthreewords:

AMODESTATTEMPTOFReduce,ReuseandRecycle.

INVESTINGOURCONVICTION,TheBank’snewcorporateofficehasbeenbuiltwith

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extensiveuseofrecycledandrecyclablematerial.Ithas

ACTIONSANDINTENTTOWARDSabundanceofnaturallight,usessolarpowerfor

emergencylightingandisdesignedtosavescarce

PRESERVING NATURAL