Background Basis of preparation Use of estimates Signiicant accounting policies

INDIA Schedule 18: Signiicant Accounting Policies and Notes to Accounts

1. Background

The accompanying inancial statements for the year ended 31 March 2014 comprise the accounts of the India branches of DBS Bank Ltd. ‘the Bank’, which is incorporated in Singapore. The India branches of the Bank as at 31 March 2014 are located at Mumbai, New Delhi, Bengaluru, Chennai, Pune, Kolkata, Nashik, Surat, Salem, Moradabad, Kolhapur and Cuddalore.

2. Basis of preparation

The inancial statements have been prepared and presented under the historical cost convention, on an accrual basis of accounting, unless otherwise stated and in accordance with Generally Accepted Accounting Principles ‘GAAP’ in India, statutory requirements prescribed under 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 to the extent applicable and current practices prevailing within the banking industry in India. The accounting policies have been consistently applied except for the changes in accounting policies disclosed in these inancial statements.

3. Use of estimates

The preparation of inancial statements, in conformity with GAAP, requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amount of assets, liabilities, income and expenses and disclosure of contingent liabilities on the date of the inancial statements. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.

4. Signiicant accounting policies

i Advances Advances are classiied as performing and non-performing based on management’s periodic internal assessment and RBI prudential norms. Advances are stated net of bills rediscounted, speciic loan provisions, write offs including the diminution in the fair value of Restructured Accounts. Provision for loan losses are made in respect of identiied advances based on management’s assessment of degree of impairment, subject to minimum provisioning levels prescribed by the RBI guidelines. The Bank also maintains a general loan loss provision on Standard Advances and Derivative Exposures at rates as prescribed by RBI, and discloses the same in Schedule 5 ‘Other liabilities and Provisions’. In addition, the Bank maintains provision for country risk in accordance with RBI guidelines and the same is included under Schedule 5 ‘Other liabilities and Provisions’. ii Investments Classiication Investments, are recognised on settlement date i.e. value date basis and are classiied as Held for Trading ‘HFT’, Available for Sale ‘AFS’ or Held to Maturity ‘HTM’ in accordance with RBI guidelines. In the inancial statements, investments are disclosed under six categories as set out in Schedule 8 – Investments. 31 Mar 2014 31 Mar 2013 31 Mar 2014 31 Mar 2013 17 PROVISIONS AND CONTINGENCIES Provisions for contingent credit 35,988 76,512 Provision for Non Performing 5,157,530 1,691,513 Assets including write offs net of write backs Provision for Standard Asset 164,226 38,866 including credit exposure on derivatives SCHEDULES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2014 Currency: Indian rupees in thousands Currency: Indian rupees in thousands ProvisionWrite-back of 186,980 124,534 provision for Depreciation on Investments Provision for Tax – Current Income-Tax 1,361,657 2,809,495 – Deferred Tax credit 1,559,435 729,584 Write-back of Provision for 3,437 8,186 Country Risk Total 5,343,509 3,754,082 INDIA

4. Signiicant accounting policies Continued