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Only on AMC Accounts (Charges fully adjustable on brokerage).

75.65 -1.25 (-1.63%)
Last Updated on: 27 Jul 2016 15:56 Hrs
75.65 -1.20 (-1.56%)
Last Updated on: 27 Jul 2016 15:57 Hrs
Syndicate Bank NotestoAccount March 2016 

1.1 Exchange rates as notified by Foreign Exchange Dealers' Association of India (FEDAI) are adopted.

1.2 All foreign currency transactions involving forex liabilities are recorded by applying Weekly Average Rate (WAR), whereas all forex assets are recorded at ongoing market rates.

1.3 All the monetary assets and liabilities are reported at the end of the year at closing exchange rate and the resultant profit / loss is taken to revenue.

1.4 Outstanding Forward Exchange Contracts are reported at the exchange rates notified for specified maturities and at interpolated rates for contracts of "in between maturities". The resultant Marked to Market (MTM) is discounted to arrive at present value MTM by using CCIL- Zero Coupon Yield curve (ZCYC) rates.

1.5 Contingent liabilities on account of Guarantees, Forward Contracts, Letters of Credit, Acceptances, Endorsements and other obligations are translated at the closing exchange rates.

1.6 Foreign Branch of the Bank is classified as "Non- Integral Foreign Operation"

a) All assets and liabilities of the foreign operations, both monetary and non-monetary as well as contingent liabilities are translated at closing ex- change rates.

b) Income and Expenditure are translated at quar- terly average exchange rates.

c) The resulting Exchange Difference arising from translation as per AS-11 is accumulated in a "For- eign Currency Translation Reserve" until disposal of net investment of the foreign branch.


2.1 Classification:

The Investment portfolio of the Bank is classified, in accordance with the Reserve Bank of India guidelines, into:

a) "Held to Maturity" (HTM) comprising Investments acquired with the intention to hold them till maturity. Investments in subsidiaries, joint ventures and associates are also categorised under Held to Maturity.

b) "Held for Trading" (HFT) comprising Investments acquired with the intention to trade by taking advantage of short term price/interest rate movements. These are intended to be traded within 90 days from the date of purchase.

c) "Available for Sale" (AFS) comprising Investments not covered by (a) and (b) above i.e. those investments which do not fall under in "Held to Maturity" or "Held for Trading" classification.

However, in the balance sheet, the investments will be disclosed as per the existing six classifications:

(i) Government Securities

(ii) Other Approved Securities

(iii) Shares

(iv) Debentures and Bonds

(v) Subsidiaries and / or Associates (vi) Others

2.2 Acquisition Cost of Investment:

a) Brokerage, Commission, Securities Transaction Tax (STT) etc., paid in connection with acquisition of investments are expensed upfront and excluded from cost.

b) Broken period interest paid / received on debt instruments is treated as interest expense/ income and is excluded from cost/sale consideration.

c) Cost of investments is determined at weighted average price method.

2.3 Method of Valuation:

a) Investments classified as HTM are carried at weighted average acquisition cost unless it is more than the face value, in which case the premium is amortized over the period remaining to maturity.

b) Investments in Treasury Bills, Commercial Papers and Certificates of Deposit which have been valued at carrying cost.

c) Investments in subsidiaries and joint ventures are valued at acquisition cost less diminution, other than temporary in nature.

d) Bank's investments in units of VCFs are classified under HTM category for the initial period of three years and are valued at cost. After period of three years from date of disbursement, it will be shifted to AFS and marked-to-market as per RBI guidelines.

e) Transfer of securities from HFT/AFS category to HTM category is carried out at the lower of acquisition cost/book value/market value on the date of transfer. The depreciation, if any, on such transfer is fully provided for. However, transfer of securities from HTM category to AFS category is carried out on acquisition price/book value. After transfer, these securities are immediately revalued and resultant depreciation, if any, is provided.

f) Investments classified as HFT and AFS are marked-to-market scrip-wise and the resultant net depreciation if any, in each category disclosed in the Balance Sheet, is provided in the Profit and Loss Account, while the net appreciation, if any, is ignored.

g) For the purpose of valuation of quoted investments in "Held for Trading" and "Available for Sale" categories, the market rates / quotes on the Stock Exchanges, the rates declared by Primary Dealers Association of India (PDAI) / Fixed Income Money Market and Derivatives Association (FIMMDA) / Foreign Exchange Dealers Association of India (FEDAI) are used. Investments for which such rates / quotes are not available are valued as per norms laid down by RBI, which are as under:

- Government/ On Yield to Maturity basis with Approved appropriate spread mark-up, if Securities any.

- Equity Shares At breakup value as per the latest

available Balance Sheet not more than 18 months old (without considering 'revaluation reserves', if any), otherwise Re. 1 per company where latest balance sheet is not available.

- Preference On Yield to Maturity basis with Shares appropriate credit spread mark- up not exceeding the redemption value.

- Bonds & On Yield to Maturity basis with Debentures appropriate credit spread mark- up.

- Units of Mutual At the latest repurchase price / Funds NAV declared by the Fund in respect of each scheme.

- Venture Declared NAV or break up NAV as Capital per audited balance sheet which is not more than 18 months old. If NAV/audited fnancials are not available for more than 18 months continuously then at Re. 1/- per VCF.

- Security Declared NAV by the Asset Receipts Reconstruction Company as per RBI /SEBI guidelines.

2.4 Disposal of Investments:

a) Profit/loss on sale of Investments classified as HTM is recognized in the Profit and Loss Account based on the weighted average cost / book value of the related Investments and an amount equivalent of profit on sale of Investments in HTM classification is appropriated to Capital Reserve Account.

b) Profit/loss on sale of Investment in AFS/HFT category is recognized in Profit and Loss Account.

2.5 The Bank is following uniform methodology of accounting for investments on settlement date basis.

2.6 In respect of non-performing securities, income is not recognised, and provision is made for depreciation for such securities as per RBI guidelines. Provision made on non-performing investments is not set off against the appreciation in respect of other performing investments.

2.7 Floating / Fixed Rate Note and Credit Linked Note, Investments at Foreign Branch are classified as Available for Sale' category and are valued at nominal value or market value, whichever is lower. These Investments are marked-to-market at quarterly intervals and where the value of these Investments is lower than the nominal value, provision for depreciation is created in the Balance Sheet and a corresponding charge is recognized in the Profit and Loss Account.

2.8 Incentive received on subscriptions is deducted from the cost of securities. Brokerage / Commission / Stamp Duty paid in connection with acquisition of securities are treated as revenue expense.

2.9 The securities sold and purchased under Repo/ Reverse repo are accounted as Collateralised lending and borrowing transactions. However, securities are transferred as in case of normal outright sale/purchase transactions and such movement of securities is reflected using the Repo/Reverse Repo Accounts and Contra entries. The above entries are reversed on the date of maturity. Costs and revenues are accounted as interest expenditure/income, as the case may be. Balance in Repo Account is classified as Borrowings and balance in Reverse Repo account is classified as Balance with Banks and Money at Call & Short Notice.


3.1 The credit exposures for derivative transactions are monitored on Current Credit Exposure method.

3.2 The naked hedging transactions are considered as a trading transaction and allowed to run till maturity.

3.3 Derivative transactions are classified into hedge and non-hedge and measured at fair value.

3.4 The transactions covered on back-to-back basis and the transactions undertaken to hedge the risk on assets and liabilities are valued and accounted on interest accrual basis.

3.5 Market making transactions are accounted on marked-to-market basis at monthly intervals, while hedging transactions are accounted for on accrual basis.

3.6 Premium at the time of purchase, if any, is amortized over the residual period of the transactions and profit is recognized on maturity. Discount is held in Income Received in Advance account and appropriated to profit and loss account on maturity.


4.1 Advances are classified into Performing and Non- Performing Assets and provisions for losses on such advances are made as per prudential norms issued by Reserve Bank of India from time to time. In respect of foreign branch, asset classification and provisioning for loan losses are made as per local requirements or as per RBI prudential norms, whichever are more stringent.

4.2 Advances are stated net of provisions made for Non-Performing Assets except general provisions for Standard Advances.

4.3 In case of sale of financial assets to the Asset Reconstruction Company (ARC) / Securitization Company (SC) / Banks / FIs / NBFCs at a price below the Net Book Value (NBV), i.e Book Value less Provision held, the shortfall is debited to the Profit and Loss Account and in case of sale at a value higher than the NBV, the excess provision is reversed to Profit and Loss Account in the year in which the amounts are received.


5.1 Premises and other fixed assets are stated at historical cost and/or revaluation value less accumulated depreciation. The premises are revalued every three years at value determined based on the appraisal by approved valuers. Surplus arising at such revaluation is credited to Revaluation Reserve.

5.2 Depreciation on premises has been provided on composite cost wherever cost of land cannot be segregated. Additional depreciation on revalued amount is adjusted to the Revaluation Reserve.

5.3 Depreciation on other fixed assets, including additions, is provided for on the basis of written down value, except as otherwise stated, at the following rates:

5.4 Depreciation on additions to fixed assets is provided for the whole year except on additions to computers and operating software, which is provided on pro- rata basis. No depreciation is provided on the assets in the year of their disposal.


5.1 Employee Benefits in the form of Provident Fund is a Defined Contribution Scheme and the contributions are charged to Profit & Loss Account in the year in which the contributions are due in respect of employees who have opted for Provident Fund.

5.2 a. In respect of employees who have opted for

Pension Scheme, Pension Benefit is a Defined

Benefit Obligation and is provided for on the basis of actuarial valuation made at the end of the Financial Year for the employees who have joined the Bank up to 31st March, 2010. The Pension liability is funded by the Bank to the Pension Fund Trust of the Bank.

b. New Pension Scheme which is applicable to employees who joined the Bank on or after 1st April, 2010 is a Defined Contribution Scheme at pre-determined rate and the obligation the Bank is limited to such contribution. The Contribution is charged to Profit & Loss Account.

5.3 Gratuity liability is a Defined Benefit Plan and is provide for on the basis of actuarial valuation made at eh end of the Financial Year. The gratuity liability is funded to the Gratuity Fund Trust of the Bank.

5.4 Accumulated Compensated absences such as Leave Encashment are provided for based on actuarial valuation.


a) Revenue and expenses are generally accounted for on accrual basis except in respect of fees/ commission on transactions with Mutual Funds, income from non-banking assets, locker rent, interest on overdue bills/tax refunds, income from non-performing assets and legal expenses on suit filed accounts which are accounted for on cash basis.

b) Income from dividend on shares is accounted for on accrual basis when the same is declared and the right to receive the dividend is established.

c) Interest on matured deposits is accounted for at the time of renewal. However provision for interest on matured deposits is made at the Corporate Office as per the RBI guidelines.

d) The broken period interest on sale or purchase of securities is treated as revenue item as per RBI guidelines.

e) Expenditure in respect of application software, bonds issue, franchises of credit card and insurance products are charged off to revenue.

f) Income from consignment sale of imported gold coins is accounted for as other income after the sale is completed.


7.1 Current tax is determined as per the provisions of the Income tax Act, 1961.

7.2 Deferred Tax Assets and Liabilities arising on account of timing differences between taxable and accounting income, is recognized keeping in view, the consideration of prudence in respect of

Deferred Tax Assets/Liabilities in accordance with the Accounting Standard 22 issued by ICAI.


The Bank has adopted the Country Risk Management policy in accordance with the RBI guidelines and following the Country Risk Category classification published by Export Credit Guarantee Corporation (ECGC).


The Bank has framed and approved a policy for administration of credit risk rising out of Unhedged foreign currency exposures in accordance with extant RBI guidelines.


The carrying amount of assets is reviewed at each Balance Sheet date for any indication of impairment based on internal/external factor. An impairment loss is recognized whenever the carrying amount of an asset exceeds its estimated recoverable amount.


Net Profit is arrived at after accounting for the following under "Provisions and Contingencies":

- Provision for Income Tax and Wealth Tax

- Provision/Write off of Non-Performing Advances

and Investments - Provision on Standard Assets - Adjustment for appreciation/depreciation on

Investments - Transfer to Contingencies - Other usual and necessary provisions.


Earnings per Share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding as at the end of the year.

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Company Identification Number (CIN): Sharekhan Ltd: U99999MH1995PLC087498; Sharekhan Commodities Pvt Ltd: U67120MH2000PTC127261; Sharekhan Financial Services Pvt Ltd: U65920MH2004PTC149518; Sharekhan.Com India Pvt Ltd: U80904MH2000PTC126954; Sharekhan Insurance Broking Ltd: U67120MH2000PLC127257