[Head Ofce: Bangalore]

SIGNIFICANT ACCOUNTING POLICIES ON THE CONSOLIDATED

FINANCIAL STATEMENTS FO THE !EA ENDED "#
ST
MACH $%%&
#' Ba()( o* Pre+ara,)on o* Acco-n,(
The accounts are prepared under the historical cost convention and
conform in all material respects to the related statutory / regulatory
requirements, Accounting Standards and generally accepted
accounting principles and practices, except as otherwise stated.
$' Con(ol)da,)on +roced-re
2.1. onsolidated !nancial statements of anara "an#, its Su$sidiaries,
%oint &enture and Associates ',.e Ban/( have $een prepared on the
$asis of their !nancial statements and in accordance with
Accounting Standard 'AS( ) 21) *onsolidated +inancial Statements,
issued $y the -nstitute of hartered Accountants of -ndia. The
!nancial statements of the $an# and its su$sidiaries have $een
com$ined on a line $y line $asis $y adding together li#e sums of
assets, lia$ilities, income and expenses, after eliminating intra
group transactions and unreali.ed pro!t / loss, and ma#ing
necessary ad/ustments wherever practica$le, to conform to the
uniform accounting policies. The !nancial statements of the
su$sidiaries are drawn up to the same reporting date as that of the
parent.
2.2. The di0erence $etween the cost to the 1arent of its investment in
the su$sidiary entities 'other than wholly owned( and the parent2s
portion of the equity in such su$sidiaries with reference to the date
of acquisition is recogni.ed in the !nancial statements as 3oodwill /
apital 4eserve. The parent2s share of post acquisition pro!ts/losses
of the su$sidiaries is ad/usted in revenue reserves.
2.5. 6inority interests in the net results of operations and the net assets
of the su$sidiaries, represent that part of the 1ro!t/7oss and the net
assets not owned $y the parent.
Page 2 of 5
2.8 -n respect of %oint &enture 9ntity, consolidation has $een done on
proportionate consolidation in accordance with Accounting Standard
'AS( : 2; <+inancial 4eporting of -nterests in %oint &entures2 issued $y
the -nstitute of hartered Accountants of -ndia
2.= 7ong term investment in Associates, as on the date of consolidation,
is valued under the 9quity method and the carrying amount of the
investment is ad/usted thereafter for the post acquisition change in
the anara "an#2s '-nvestor( share of net assets of the Associate in
accordance with Accounting Standard 'AS( 25 <Accounting for
-nvestments in Associates2 issued $y the -nstitute of hartered
Accountants of -ndia. The -nvestor2s share of the results of
operations of the Associates is re>ected separately in the
onsolidated statement of 1ro!t ? 7oss.
"' Fore)gn C-rrenc0 Tran(la,)on 1 Con2er()on o*
Fore)gn c-rrenc)e(
5.1. -n respect of +oreign $ranches, @0 shore "an#ing Anit and +oreign
Su$sidiaries, Assets and 7ia$ilities are translated at the last closing
spot rate of exchange announced $y +9BA- and -ncome and
9xpenditure items of these entities are translated at quarterly
average closing rate pu$lished $y +9BA- in accordance with
Accounting Standard 11 '4evised 2CC5( of the -nstitute of hartered
Accountants of -ndia and as per the guidelines of 4eserve "an# of
-ndia. The resultant exchange gains, if any, is ta#en to +oreign
urrency Translation 4eserve and loss, if any, net of reserves, is
ta#en to revenue.
5.2. -n respect of domestic $ranches, Assets and 7ia$ilities in foreign
currency including +orward 9xchange ontracts, 3uarantees,
Acceptances, 9ndorsements and @$ligations are evaluated at the
closing spot rate/forward rate for the residual maturity of the
contract in accordance with Accounting Standard 11 '4evised 2CC5(
of the -nstitute of hartered Accountants of -ndia and as per the
guidelines of 4eserve "an# of -ndia.
-ncome and 9xpenditure items are accounted for at the exchange
rates prevailing on the date of transactions.
5.5. The gain or loss on evaluation of outstanding +orward 9xchange
ontracts is ta#en to revenue.
3' Der)2a,)2e Con,rac,(
a( Berivatives used for trading are 6ar#ed to 6ar#et
$( Berivatives used for hedging are 6ar#ed to 6ar#et where
underlying Assets / 7ia$ilities are mar#ed to mar#et, and
Page 3 of 5
c( Berivatives used for hedging are accounted on accrual $asis
where underlying Assets / 7ia$ilities are not mar#ed to mar#et.
Det Appreciation / Bepreciation and 3ain / 7oss are accounted for as
per regulatory norms.
4' In2e(,5en,(
-nvestments are classi!ed and valued as per applica$le
statutory/regulatory norms.
6' Ad2ance(
Advances including factored de$ts are net of provisions made in
accordance with the prudential norms prescri$ed $y the regulatory
authorities.
7' F)8ed A((e,(
1remises and other +ixed Assets are stated at historical cost except
wherever revalued. +ixed assets include assets given on lease.
8. De+rec)a,)on
E.1 +ixed Assets of the 1arent excluding computer are depreciated
under Fritten Bown &alue method as per the rates determined $y
the management on the $asis of estimated useful life of the
respective assets. As per the guidelines of 4eserve "an# of -ndia,
depreciation is charged on computer at 55.55G on straight)line
method. Bepreciation on Assets given on 7ease is charged on
Fritten Bown &alue method as per Schedule H-& of the ompanies
Act, 1I=J after ad/usting apital recovery. Bepreciation on addition
to !xed/leased assets is charged for the full year irrespective of the
date of acquisition. Do depreciation is provided in the year of
sale/disposal.
E.2 +ixed assets of the domestic su$sidiaries are depreciated as per the
method and rates prescri$ed under the ompanies Act, 1I=J. -n
respect of leased assets depreciation is charged either as per the
method and rates prescri$ed under the ompanies Act, 1I=J or in
the ratio of lease rentals accrued during the year to lease rentals for
the entire primary/secondary period of the lease, as per
agreements, whichever is higher.
E.5 Bepreciation on +ixed assets of the foreign su$sidiary is charged as
per the local laws.
Page 4 of 5
&' e2en-e ecogn),)on
I.1 -ncome and expenditure are generally accounted on accrual $asis.
-n the case of Don)performing assets including investments, income
is recogni.ed to the extent of reali.ation in accordance with norms
prescri$ed $y regulatory authorities.
I.2 ommission, 9xchange, "ro#erage, Bividends, loc#er rents,
processing charges, other service charges are accounted for as
income on receipt $asis.
10.E5+lo0ee Bene9,(
1rovision for 1ension, 3ratuity, 1rivilege 7eave and Sic# 7eave is
made $ased on the actuarial valuation at the year)end as per the
Accounting Standard )1='4evised( of the -nstitute of hartered
Accountants of -ndia. Det Actuarial gains and losses are recogni.ed
during the year.
##' Ta8a,)on
1rovision for -ncome tax is made after due consideration of the /udicial
pronouncements and legal opinion. Bisputed taxes, not provided for are
included under *ontingent 7ia$ilities,.
:
Pad5ana;.an
N Sel2ara<an S : Man)c/a5 M = S.eno0
Sen)or
Manager
A(()(,an, General
Manager
A(()(,an, General
Manager
General Manager
H S U+endra :a5a,. >agd)(. Pa) : L A C Ma.a<an
E8ec-,)2e D)rec,or E8ec-,)2e D)rec,or C.a)r5an ? Manag)ng
D)rec,or
Dr': P :r)(.nan =an) > S.ar5a De2ender Da(( -(,ag)
D)rec,or D)rec,or D)rec,or
S : :o.l) A<a0 Ma,.-r S-n)l G-+,a
D)rec,or D)rec,or D)rec,or
Dr'!ogendra Pa,) Tr)+a,.) S S.a;;eer Pa(.a Pan/a< Go+al<) T.ac/er
D)rec,or D)rec,or D)rec,or
Page 5 of 5
P = Ma)0a
D)rec,or
AS PE EPOT OF E=EN DATE
For S N M-/.er<) ? Co'
For De C.a/ra;or,0 ?
Sen
For Sa,0anara0ana ? Co'
C.ar,ered Acco-n,an,( C.ar,ered Acco-n,an,( C.ar,ered Acco-n,an,(
S-d)+ : M-/.er<) : C.a,,o+ad.0a0 C.' Se(.ag)r) ao
Par,ner Par,ner Par,ner
For Para/. ? Co' For M Ananda5 ? Co' For N San/aran ? Co'
C.ar,ered Acco-n,an,( C.ar,ered Acco-n,an,( C.ar,ered Acco-n,an,(
=)(.n- D-,, Man,r) A = Sada()2a B C.andra(e/.ar
Par,ner Par,ner Par,ner
Place: Bangalore
Da,e: A+r)l $&@ $%%&