For the year ended  For the year ended
                               31 March 2014        31 March 2013
                              (Rsin 000s)          (Rs in 000s)

Specific provisions against 
advances (net)                 27,993,948            2,138,491

General provision against 
standard assets                    70,000                    -

Provision for country risk 
exposure                           39,181               15,149

Charge / (release) against 
Investments                       826,668              355,900

- Current tax expense [Refer 
note 18 E (8)]                 19,301,316           17,112,000

- Deferred tax credit [Refer 
note 18 E (7)]                (10,803,231)             (49,536)

Total provisions and 
contingencies                  37,427,882           19,572,004

A) Background

The accompanying financial statements for the year ended 31 March 2014 comprise the accounts of India branches of Standard Chartered Bank ('SCB' or 'the Bank'), which is incorporated with limited liability in the United Kingdom. The Bank's ultimate holding company is Standard Chartered Plc ('SCPLC'), which is incorporated in the United Kingdom.

B) Basis of preparation

The financial statements are prepared under the historical cost convention on the accrual basis of accounting, unless otherwise stated, and in accordance with Generally Accepted Accounting Principles ('GAAP') in India, statutory requirements of the Banking Regulation Act, 1949, circulars and guidelines issued by the Reserve Bank of India ('RBI') from time to time, the Accounting Standards ('AS') prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended) to the extent applicable and current practices prevailing within the banking industry in India.

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

C) Use of estimates

The preparation of the financial statements in conformity with GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and disclosures relating to the contingent liabilities reported in the financial statements. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

(ii) Subordinated Debt

Schedule 4 - Borrowings includes an amount of Rs.29,958 million (previous year: Rs.27,143 million) pertaining to subordinated debts raised from Head Office, details of which are given below:

(xiv) Details of non performing financial assets purchased

The amount of non performing financial assets purchased during the year is nil (2012-13: Nil).

(xv) Details of non performing financial assets sold (other than sold to Securitisation Company/ Reconstruction Company)

The amount of non performing financial assets sold (other than sold to Securitisation Company/ Reconstruction Company) during the year is nil (2012-13: Nil).

(xvii) Unsecured Advances

The Bank has unsecured advances amounting to Rs.2,093 million (previous year: Rs.1,260 million) for which it holds intangible securities such as charge over the rights, licenses, authority, etc. and the estimated value of such intangible collateral is Rs.10,050 million (previous year: Rs.2,800 million).

(xviii) Overseas Assets, NPA and Revenue

As the Bank is a branch of a foreign bank, this disclosure is considered as not applicable.

(xxi) Assets Securitised (including assignment)

(a) Securitisation

The Bank has not entered into any securitisation transactions during the year (2012-13: Nil).

(b) Assignment

In accordance with RBI circular DB0D.N0.BP.BC.60/21.04.048/2005-06 dated 01 February 2006, the details of loan assignments are given below:

(xxii) Risk Exposure in Derivatives

(a) Exchange traded interest rate derivatives

The Bank has entered into exchange traded interest rate derivatives during the year (2012-13: Nil) and amount outstanding at the year end is Rs.300 million (previous year: Nil).

(b) Qualitative Disclosures

Structure and organisation of management of risk in derivatives trading

The derivatives business is managed by the front office with independent back office for confirmation and settlement of trades. A separate middle office team validates all the derivative transactions and the processing and settlement is done by the back office team. The market risk team is responsible for monitoring market risk limits for derivative instruments. VAR (Value at Risk) is the primary risk measure and supplemented by other limits like PV01 as required and appropriate. There is clear segregation of duties and different reporting lines to ensure independent monitoring and reporting.

Risk monitoring team

The Bank is exposed to market risk, liquidity risk, operational risk and credit risk on the derivatives portfolio. The Bank's risk management group, compliance group and internal audit group assist in identifying, assessing and monitoring of these principal risks in accordance with policies and procedures.

Provisioning, collateral and credit risk mitigation

Counterparties are reviewed by credit officers who set their credit limits. The Bank does a credit analysis which includes a review of facility detail, credit grade determination and financial spreading/ ratio analysis. The Bank uses a numerical grading system, for quantifying the risk associated with counterparty.

The Bank applies the Current Exposure methodology to manage credit risk associated with derivative transactions. This is calculated by taking the cost of replacing the contract, where its mark-to-market value, is positive together with an estimate of the potential future change in the market value of the contract, reflecting the volatilities that affect it. The credit risk on contracts with a negative mark-to-market value is restricted to the potential future change in their market value. Provisioning on the exposure taken on derivative contracts is made as prescribed by RBI Circular No. DBOD.No.BP.BC.1/21.04.048/2013-14 dated 01 July 2013.

(xxiii) Interest Rate Swaps, Interest Rate Options and Forward Rate Agreements

The notional principal amount of Interest Rate Swaps ('IRS'), Interest Rate Options ('IRO'), Interest Rate Futures ('IRF') and Forward Rate Agreements ('FRA') are:

The credit risk is the pre-settlement risk which is estimated in accordance with the Current Exposure Method. All IRS, IRO, IRF and FRA are monitored for price risks under the Value at Risk approach.

The Bank has taken Rs.3,323 million as collateral from counter parties in respect of derivative contracts (previous year: Rs.2,008 million).

The gross positive mark to market on the IRS, IRO, IRF and FRA, which is the potential loss that the Bank would incur in case the counter parties fail to fulfill their obligations are:

As at 31 March 2014, the exposure on IRS, IRO, IRF and FRA is spread over various industries. Based on the notional principal amount, the maximum single industry exposure lies with banks at 88% (previous year: 88%).

(xxiv) Country Risk Exposure

Disclosure for country risk exposure in accordance with RBI Master Circular No. DBOD.BP.BC No.7/ 21.04.018/2013-14 dated 01 July 2013 is given under:

(xxv) Prudential Credit Exposure Limits - Single and Group Borrower Exposure

The Bank's exposure to single and group borrowers has been within limits* specified by RBI. The Bank has enhanced the credit exposure by an additional 5 per cent of capital funds in respect of Reliance Industries Limited* with the approval of the Management Committee of the Bank (2012-13: Reliance Industries Limited, Birla Sun Life Mutual Fund and Clearing Corporation of India Limited).

* During the year, there was a passive breach due to INR currency depreciation leading to an increase in the INR equivalent of USD denominated exposure.

(xxvi) Provisions and contingencies

(a) As per AS 29 - Provisions, Contingent Liabilities and Contingent Assets, movement in provision for reward points awarded to customers and movement in other provisions are given below:

1 Basis of calculation of provision for reward points is explained in Note 18 (D) (12). The provision is utilised when actual claims for redemption are made by customers.

(b) Description of Contingent Liabilities

(i) Claims against the Bank not acknowledged as debts

These represent claims filed against the Bank relating to certain legal and tax proceedings that are currently in progress.

(ii) Liability on account of outstanding foreign exchange contracts

The Bank enters into foreign exchange contracts on its own account and for customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. The Bank also undertakes currency futures transactions.

(iii) Liability on account of derivative contracts

These include notional principal on outstanding cross currency swaps, currency options, forward rate agreements, interest rate swaps, interest rate futures and interest rate options.

(iv) Guarantees given on behalf of constituents, acceptances, endorsements and other obligations

As a part of its commercial banking activities, the Bank issues documentary credit and guarantees on behalf of its customers. Documentary credit such as letters of credit enhances the credit standing of the customers of the Bank. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfill its financial or performance obligations. Irrevocable Payment Commitments are included under guarantees given on behalf of constituents in India.

(v) Other items for which the Bank is contingently liable

These includes capital commitments, recourse obligations representing credit enhancements in the form of cash collaterals in respect of securitised loans, forward asset purchase and obligations undertaken on sell down of certain assets and amount payable on securities purchased.

(d) Floating Provisions

The Bank does not have any floating provision as at 31 March 2014 (previous year: Nil).

(e) Draw down from reserves

During the year ended 31 March 2014, there was a draw down from Investment Reserve of Rs.562 million (2012-13: Nil), in line with RBI guidelines.

(xxvii) Retirement Benefits

(a) Defined Benefit Plans

Reconciliation of opening and closing balance of the present value of the defined benefit obligations for retirement benefits which includes pension, gratuity and compensated absences is given below:

(xxix) Customer complaints and awards of Banking Ombudsman

In accordance with RBI circulars DBOD No.Leg.BC.22/09.07.006/2013-14 dated 01 July 2013 and DBOD.BP.BC.No.49/21.04.018/2013-14 dated 03 September 2013, details with respect to customer complaints and awards passed by the Banking Ombudsman are given below:

Note: Previous year numbers are not comparable as current year includes 4,746 complaints pertaining to cases of failed ATM transactions at other bank ATMs, reported vide aforementioned circular dated 03 September 2013. The Bank has also undertaken enhanced complaint identification and monitoring mechanism during the year.

(2) Segment reporting

(i) Segment description

The Bank has disclosed its operations under the following segments:

Segment Definition Activities

Treasury Treasury activities include foreign exchange, fixed income, money market and derivative transactions.

Wholesale Banking Local corporate financing, corporate advisory and all advances to trusts, partnership firms, companies and statutory bodies, which are not included under the "Retail Banking" segment, are reported under Wholesale Banking.

Retail Banking Retail banking serves retail customers through the branch network and other delivery channels. This

segment raises deposits from customers and makes loans and provides other services to such customers. This segment also includes activities relating to credit cards, debit cards, mortgage loans, third party product distribution and their associated costs. Exposures are classified under retail banking taking into account the orientation, product, granularity and individual exposure criteria.

Others Others include Corporate Real Estate Services and other items not allocable in the aforementioned

segments

The classification of exposures to the respective segments conform to the guidelines issued by RBI vide DBOD.No.BPBC.81/21.04.018/2006-07 dated 18 April 2007 based on the information available for classification.

(ii) Segment Accounting Policy

Segment results are determined after considering the following inter-unit notional charges / recoveries:

a. Fund Transfer Pricing:

Treasury gives notional interest benefit to other divisions for the funds mobilised by the latter through deposits, and similarly charge notional interest to other divisions for the funds utilised by them for lending and investment purposes. Based on tenor of assets / liabilities and market scenarios, Treasury calculates notional interest rates used for this purpose.

b. Premises Rental Chargeback:

Individual business segments are charged rent based on notional market values and the same is credited to 'Others' (Corporate Real Estate Services) in respect of the premises occupied by them.

c. Support costs (costs pertaining to Finance, HR, Corporate Real Estate Services, Legal & Compliance, etc.) are allocated to Treasury, Wholesale & Retail banking segments based on managements' estimates of the benefits accruing to these segments for the costs incurred. This is similar to the basis used for the internal management reporting.

d. Capital & Reserves and attributable earnings thereon are allocated to individual business segments based on period end Risk Weighted Assets.

(iii) Geographic Segments

As the Bank does not have any material earnings or assets originating outside India, the Bank is considered to operate only in the domestic segment.

(iv) Segment Reporting

(3) Penalties

a. During the year, no penalty was levied by RBI in exercise of powers under section 46(4) of the Banking Regulation Act, 1949 (2012-13: Nil).

b. RBI levied penalty of Rs.7 (in 000s) (2012-13: Rs.2,165 (in 000s)) for shortages / forged / soiled notes deposited by the Currency Chest branches.

c. Penalty levied by RBI for not providing exchange facility of soiled notes to customers and public was nil (2012-13: Rs.10 (in 000s)).

(4) Related Party Disclosures

(i) The list of related parties as defined in AS 18 - Related Party Disclosures and the nature of their relationship with Standard Chartered Bank - India Branches are given below:

(a) Ultimate Parent Company Standard Chartered Plc

(b) Parent Company

Standard Chartered Holding Ltd.

(c) Head Office

Standard Chartered Bank, UK

(d) Branches of Head Office

- Standard Chartered Bank China

- Standard Chartered Bank USA

- Standard Chartered Bank UK

- Standard Chartered Bank Sri Lanka

- Standard Chartered Bank Bahrain

- Standard Chartered Bank Qatar

- Standard Chartered Bank United Arab Emirates

- Standard Chartered Bank Dubai International Financial Centre

- Standard Chartered Bank Oman

- Standard Chartered Bank Singapore

- Standard Chartered Bank Korea

- Standard Chartered Bank Japan

- Standard Chartered Bank South Africa

- Standard Chartered Bank Philippines

- Standard Chartered Bank Bangladesh

- Standard Chartered Bank Jordan

- Standard Chartered Bank Indonesia

- Standard Chartered Bank Germany

(e) Subsidiaries of Head Office (Standard Chartered Bank, UK)

- Scope International Private Limited

- St Helen's Nominees India Private Limited

- Standard Chartered (India) Wealth Advisory Services Private Limited

- Standard Chartered Bank (China) Limited

- Standard Chartered Bank (Hong Kong) Limited

- Standard Chartered Bank (Mauritius) Limited

- Standard Chartered Bank (Pakistan) Limited

- Standard Chartered Bank (Taiwan) Limited

- Standard Chartered Bank (Thai) Public Company Limited

- Standard Chartered Bank Nepal Limited

- Standard Chartered Finance Limited

- Standard Chartered Investments and Loans (India) Limited

- Standard Chartered Private Equity (Mauritius) Limited

- Standard Chartered Bank Botswana Limited

- Standard Chartered Bank Ghana Limited

- Standard Chartered Bank Kenya Limited

- Standard Chartered Private Equity Advisory (India) Private Limited

- Standard Chartered Securities (India) Limited

- Standard Chartered Bank Malaysia - Berhad

- Standard Chartered First Bank Korea Limited

- Standard Chartered Strategic Brand Management Limited

- Standard Chartered Bank Sierra Leone Limited

- Standard Chartered Bank Nigeria Limited

- Standard Chartered Bank Cote D'lvoire

- Standard Chartered Bank (Vietnam) Limited

- Standard Chartered Private Equity (Mauritius) II Limited

- Standard Chartered Private Equity (Mauritius) lll Limited

- Standard Chartered Bank Cameroon S.A

- Standard Chartered Bank Gambia Limited

- Standard Chartered Financial Holdings

- Standard Chartered Bank Zimbabwe Limited

- Standard Chartered IL&FS Asia Infrastructure Growth Fund Company Pte. Limited

- Standard Chartered (Thailand) Company Limited

Note: Categories (d) and (e) above include only those related parties with whom transactions have occurred during the current / previous year.

(f) Key Management Personnel

In accordance with the RBI circular DBOD.BP.BC.No.7/21.04.018/2013-14 dated 1 July 2013, only Mr. Sunil Kaushal, the Chief Executive Officer ('CEO') of the Bank, falls under the category of key management personnel for the year 2013- 14, hence, no disclosures pertaining to him are provided.

(ii) Transactions and balances

In line with the RBI circular DBOD.BP.BC.No.7/21.04.018/2013-14 dated 01 July 2013, related party disclosures exclude transactions in a category where there is only one related party (i.e. key management personnel) and where the Bank has an obligation under law to maintain confidentiality in respect of their customer transactions.

(iii) Material related party transactions are given below:

The following were the material transactions between the Bank and its related parties for the year ended 31 March 2014. A specific related party transaction is disclosed as a material related party transaction wherever it exceeds 10% of all related party transactions in that category.

Leasing Arrangements

For availing leasing service - payment of rent to Scope International Private Limited Rs.10 million (2012-13: Rs.9 million) and Standard Chartered Finance Limited Rs.23 million (2012-13: Rs.12 million).

For providing leasing services - receipt of rent from Standard Chartered Finance Limited Rs.85 million (2012-13: Rs.86 million) and Standard Chartered Securities (India) Limited Rs.137 million (2012-13: Rs.157 million).

Sale of Fixed Assets

Sale of Fixed Assets to Standard Chartered Securities (India) Limited is nil (2012-13: Rs.5 million).

Employee Share Options

Expenses incurred on employee share options payable to Head Office Rs.443 million (2012-13: Rs.686 million).

Rendering of Services

During the year the Bank provided secondment, amenities and other services to related parties. The material transactions were with Standard Chartered Finance Limited Rs.313 million (2012-13: Rs.326 million) Standard Chartered Private Equity Advisory (India) Private Limited Rs.442 million (2012-13: Rs.422 million), Standard Chartered Bank, Singapore Rs.371 million (2012-13: Rs.219 million) & Standard Chartered Securities (India) Limited Rs.269 million (2012-13: Rs.319 million).

Receiving of Services

During the year the Bank availed of back office support, brokerage, marketing and other services from related parties. The material transactions were back office support services from Scope International Private Limited Rs.2,460 million (2012-13: Rs.2,287 million), marketing services and back office support from Standard Chartered Finance Limited Rs.1,107 million (2012-13: Rs.1,206 million) and royalty payable to Standard Chartered Strategic Brand Management Limited Rs.853 million (2012-13: Rs.782 million).

Interest Paid

Interest on subordinated debt to Head Office Rs.835 million (2012-13: Rs.829 million), interest on money market borrowings to Head Office Rs.95 million (2012-13: Rs.211 million) and interest on Fixed Deposit to Standard Chartered Scope International Private Limited is Rs.171 million (2012-13: Rs.138 million).

Interest Received

Interest on term loan from Standard Chartered Scope International Private Limited is nil (2012-2013: Rs.9 million), interest working capital loan from Standard Chartered Investments & Loans Limited Rs.35 million (2012-13: Rs.46 million) and interest on money market lending from Head Office Rs.13 million (2012-13: Rs.8 million) and interest on money market lending & bank balances from Standard Chartered Bank, USA Rs.4 million (2012-13: Rs.16 million).

Foreign Exchange Transactions

Sale of foreign currencies to Head Office Rs.2,193,805 million (2012-13: Rs.1,957,973 million), Standard Chartered Bank, USA Rs.704,730 million (2012-13: Rs.660,495 million), Standard Chartered Bank, Singapore Rs.562,730 million (2012-13: Rs.493,299 million) and Standard Chartered Bank Japan Rs.504,281 million (2012-13: Rs.64,009 million).

Purchase of foreign currencies from Head Office Rs.2,248,072 million (2012-13: Rs.1,968,085 million), Standard Chartered Bank, USA Rs.704,172 million (2012-13: Rs.661,526 million), Standard Chartered Bank, Singapore Rs.583,417 million (2012-13: Rs.489,444 million) and Standard Chartered Bank Japan Rs.507,326 million (2012-13: Rs.64,004 million).

Fee and Commission Income / Other Income

Receipt of fees from Head Office Rs.2,861 million (2012-13: Rs.4,345 million) and Standard Chartered Bank, Singapore Rs.967 million (2012-13: Rs.753 million).

Service Fees on Guarantees & Letters of Credit

Receipt of trade fees from Head Office Rs.4 million (2012-13: Rs.2 million), Standard Chartered Bank, Nigeria Rs.3 million (2012-13: Rs.3 million), Standard Chartered Bank, United Arab Emirates Rs.4 million (2012-13: Rs.3 million), Standard Chartered Bank, Singapore Rs.4 million (2012-13: Rs.2 million), Standard Chartered Bank Malaysia - Berhad Rs.17 million (2012-13: Rs.0.2 million) and Standard Chartered Bank Bangladesh Rs.6 million (2012-13: Rs.0.2 million).

Payment of fees to Standard Chartered Bank, United Arab Emirates Rs.0.3 million (2012-13: Rs.0.2 million), Standard Chartered Bank, Sri Lanka Rs.0.3 million (2012-13: Rs.0.3 million), and Standard Chartered Bank, Singapore Rs.0.2 million (2012-13: Rs.0.5 million).

Purchase and Sale of Investments

Purchase of investments from Standard Chartered Bank (Mauritius) Limited Rs.16,613 million (2012-13: Rs.13,860 million) and Standard Chartered Bank, Singapore Rs.73,890 million (2012-13: Rs.22,880 million).

Sale of investments to Standard Chartered Bank, Singapore Rs.15,324 million (2012-13: Rs.30,853 million) and Standard Chartered Bank (Mauritius) Limited to Rs.33,467 million (2012-13: Rs.33,828 million).

- There are no provisions relating to contingent rent

- The terms of renewal / purchase options and escalation clauses are those normally prevalent in similar agreements

- There are no undue restrictions or onerous clauses in the agreements

- Initial direct costs for leases given are recognised as an expense in Profit and Loss Account

(7) Deferred Tax

The deferred tax benefit of Rs.10,803 million for the year ended 31 March 2014 (2012-13: Rs.50 million) is included in provision on account of tax under Schedule 17- Provisions and Contingencies.

The primary components that gave rise to deferred tax assets and liabilities included in the balance sheet are as follows:

(9) Portfolio Purchase

The Bank has purchased loans (retail loans) amounting to Rs.2,113 million (2012-13: Rs.15,559 million) from various NBFCs, banks and other institutions.

(10) Disclosure on remuneration

The Bank's compensation policies including that of CEO's, is in conformity with the Financial Stability Board principles and standards. In accordance with the requirements of the RBI Circular No. DBOD No.BC.72/29.67/001/2011-12 dated 13 January 2012, the Regional Office of the Bank has submitted a declaration to RBI confirming the aforesaid matter.

(11) Employee Share Based Payment

The eligible employees of the Bank have been granted stock awards as equity shares of the ultimate holding company, SCPLC, under various share schemes such as Restricted Share Award (RSA), Deferred Restricted Share Award (DRSA), Performance Share Award (PSA), Sharesave Plan, etc.

During the year, the Bank has recognised an amount of Rs.443 million (2012-13: Rs.686 million) under the head 'Payments to and Provisions for Employees', as cost on account of share-based payments under Schedule 16 - Operating Expenses.

(12) Revaluation of Premises

Premises are revalued periodically and are stated at revalued cost less accumulated depreciation. Valuation of the premises was conducted in March 2014 by external registered valuers. Out of the total net revaluation deficit of Rs.3,284 million, amount of Rs.1,077 million has been transferred to Property Revaluation Reserve under Schedule 2 - Reserves and Surplus and balance amount of Rs.2,207 million revaluation loss has been recognised in the Profit and Loss account under Schedule 16 - Operating Expenses.

(13) Prior Year Comparatives

Previous year figures have been reclassified or regrouped wherever necessary to conform to the current year's presentation.