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Notes to Accounts of Allahabad Bank

Mar 31, 2016

1. Adequate provision has been made by the Bank in respect of performing and non-performing advances in terms of Reserve Bank of India (RBI) guidelines.

2. The reconciliation of various inter-branches, inter-bank accounts, National and Local Clearing accounts (including NACH), NOSTRO accounts, Branch System Suspense account and ATM transactions is an ongoing process and is under progress. The impact of the above, if any, on the financial results for the year ended 31st March, 2016, in the opinion of the management will not be significant.

2.2 (i) Certain premises were revalued on the basis of the reports of the approved valuers during the year ended on 31.03.1997, 31.03.2005 and 31.03.2007 and upward revision amounting toRs,125.99 Crore (commercial and residential), ''370.08 Crore (commercial and residential) and Rs,298.32 Crore (commercial) respectively had been credited to Revaluation Reserve. Further, revaluation of residential and commercial properties were made on 31.03.2016 on the basis of reports of the approved valuers and upward revision amount of Rs,1802.40 crore were credited to the Revaluation Reserve. Depreciation on Revalued premises is worked out each year on its written down value. Additional depreciation of Rs,3.44 Crore (previous year Rs,3.06 Crore) on account of revaluation has been transferred from the Revaluation Reserve Account and shown in Miscellaneous Income under the head “Other Income” included in Schedule No. 14 item (vi).

(ii) Depreciation is charged on composite cost of Land and Building, where separate cost of land is not available.

(iii)Premium on leasehold land is amortized over the period of lease, based on cost or written down value, where original cost is not available.

(iv)Registration formalities are yet to be completed for the following properties:

a. Two (2) residential properties purchased during the year 1990 & 1998 at Kolkata & Bhubaneshwar consisting of 29 & 10 flats respectively with total original cost of Rs,0.86 Crore.

b. Renewal of lease of residential plots of land measuring 17520 sq.ft area at Paradeep, Odisha having 24 residential flats w.e.f. 02.04.2013 has been taken up with Paradeep Port Trust (PPT) and is under their consideration.

3. (i) In respect of Investments of face value of Rs,0.44 Crore

(Previous year Rs,4.03 Crore), the Bank is yet to receive scrips/certificates.

(ii) Total Investments made in shares, convertible debentures and units of equity linked mutual funds/ venture capital funds and also advances against shares aggregate to Rs,807.56 Crore (Previous year Rs,667.81 Crore).

(iii) During the year the Bank sold certain securities under Held to Maturity category and earned profit of Rs,83.19 Crore. Due to net loss during the year, no appropriation has been made to ''Capital Reserve Account-Investment'' (Previous Year Rs,25.10 Crore).

(iv) In respect of ''Held to Maturity'' category as stated in significant Accounting Policy No. 4(iv)(a), the excess of acquisition cost over the face value of the security amortized during the year amounting to Rs,58.89 Crore (Previous year Rs,61.52 Crore) has been netted-off from Income on Investment shown under the head “Interest Earned” of Profit and Loss Account in terms of the RBI guidelines.

(v) Pursuant to RBI circular DBR. BP. BC. No. 31/ 21.04.018/2015-16 dated July 16, 2015, the Bank has, with effect from quarter ended June 30, 2015, included its deposits placed with NABARD/ SIDBI/ NHB on account of shortfall in priority sector targets under schedule 11 - “Other Assets”. Hitherto these were included under “Investments”. Interest Income on these deposits has been included under “Interest Earned - Others”. Hitherto such interest income was included under “Interest Earned - Income on Investments”. Figures for the previous periods have been regrouped/ reclassified to conform to current period''s classification. The above change in classification has no impact on the profit of the Bank for the year ended March 31, 2016 or the previous periods presented.

4. The Bank has not made any financing for margin trading during the year and also not securitised any assets.

3. Disclosure in terms of RBI guidelines:

5. Capital

In terms of RBI Circulars DBR.No.BP.BC.1/21.06.201/ 2015-16 dated July 1, 2015,DBR.BP.BC. No.43/ 21.06.001/2015-16 dated October 8, 2015, DBR.BP.BC.No.44/ 08.12.015/2015-16 dated October 8, 2015 and DBR.No.BP.BC/83/21.06.201/2015-16 dated 1st March 2016 the details of Capital Adequacy Ratio computed under Basel-III regulations are as under;

*In addition a sum of Rs,690.00 crore (Rupees six hundred ninety crore) has also been received from Govt. of India on 30.03.2016 towards capital infusion. The Bank is maintaining the same as “Share Application Money Pending Allotment” as on 31.03.2016. The Reserve Bank of India vide their letter DBR.No.BP. 12713/ 21.01.002/ 2015-16 dated 06.04.2016 has permitted the Bank to consider the aforesaid amount received from Government of India as part of Common Equity Tier 1(CET 1) as on March 31, 2016. Accordingly, Bank has included the entire amount of capital infusion i.e. Rs,690.00 crore (Rupees Six hundred ninety crore) received from Government of India on 30.03.2016, in its CET 1 as on 31.03.2016.

The Capital Adequacy Ratio is computed on the basis of RBI guidelines applicable on the relevant reporting dates and the ratio for the corresponding previous period is not adjusted to consider the impact of subsequent changes if any in the guidelines.

The disclosure of CRAR as per BASEL-II norms are given below:

6. Sale & Transfer to/from HTM category: All sales and transfers to/from HTM category during the year are within the limit of 5% of book value at the beginning of the year. The Bank has not made any sale of securities or transfer to AFS/ HFT consequent upon reduction of ceiling on SLR Securities under HTM category. The Bank has one time shifted the securities having book value of Rs,7556.76 crore from HTM to AFS category during the first quarter of FY 2015-16 with the approval of Board of Directors which is permitted by RBI in terms of Master Circular No.RBI/2015-16/97 DBR No.BP.BC.6/ 21.04.141/2015-16 dated July 1, 2015.

7. Exchange Traded Interest Rate Derivatives: NIL

(Previous year: NIL)

8. Disclosures on risk exposure in derivatives Qualitative Disclosure:

Operation in the Treasury Branch of the Bank are segregated in three functional areas i.e. Front Office, Mid Office and Back Office, which are provided with trained officers with defined responsibilities and back up roles.

The Treasury Policy & Derivative policy of the Bank lays down the type of financial derivatives instruments, scope of usages, approval processes as also the limits like the open position limits, deal size limits and stop loss limits besides delegated power for trading in the approved instruments. The policy also allows purchase / sale of call or put options to hedge cross currency proprietary trading positions and to offer derivative products to its customers subject to back to back covering by the Bank.

The Front Office takes positions and executes the deals while the Mid Office monitors the transactions in the trading book and deviations of excesses, if any, are brought to the notice of higher authorities. The Mid office also measures the financial risk for transactions on a daily basis through measurement tools such as MTM, VAR, Convexity and Modified Durations. The figures are reported to Risk Management division, which appraises the risk profile to the Assets and Liability Management committee. The Back office settles all the deals with counter parties.

Interest Rate Swaps which hedge interest bearing assets or liabilities are accounted for on accrual basis except the Swaps designated with an asset or liability that is carried at lower of cost or market value in the financial statements. Gains or Losses on the termination of Swaps are recognized over the shorter of the remaining contractual life of the Swap or the remaining life of the assets/liabilities. Trading Swap transactions are marked to market with changes recorded in the financial statements. The counterparties to the transactions are Banks and corporate entities and deals undertaken are within the approved exposure limits only. The guidelines issued by RBI, FEDAI & FIMMDA from time to time for recognition of Income, Premium and Discount are followed.

9. Penalties imposed by RBI:Rs,Nil (Previous Year:Rs,Nil)

During the Financial Year 2015-16, the Bank has not been subjected to any penalty for contravention or non compliance with any requirement of the Banking Regulation Act, 1949.

However, Bank has paid a penalty of Rs,3,00,000/-(Rupees three lac only) on 31.10.2015, imposed by FIU-IND vide their order No.2/DIR/FIU-IND/2013 dated 31.12.2013 for failure in reporting transactions through CTR on 13.04.2013 and failure to develop an internal mechanism to detect such transactions u/s 13 of Prevention of Money Laundering Act,2002.

4. Disclosure Requirements as per Accounting Standards where R.B.I has issued guidelines in respect of disclosure items for ''Notes to Accounts'':

10. Accounting Standard 5- Net Profit or Loss for the period, prior period items and changes in accounting policies: Income and Expenditure relating to prior period are as under:

11. Income items recognized on cash basis (other than income on non performing assets and investments) were either not material or did not require disclosure under AS 9 on Revenue Recognition.

12. The Bank has adopted Accounting Standard 15 (Revised)- Employee Benefits, issued by The Institute of Chartered Accountants of India, for recognition of its liabilities in respect of employee benefits, viz, Pension, Gratuity, Leave Encashment, LFC w.e.f. 1st April, 2007.

13.Bank''s liabilities in respect of the funded/non-funded employee benefits, viz., Pension(ABEPR-1995), Gratuity, Leave Encashment and LFC are recognized on the basis of actuarial valuation carried out by approved Actuary as per

(a) Principles laid down in AS 15 (Revised) issued by The Institute of Chartered Accountants of India, and

(b) Guidelines GN 26 issued by The Institutes of Actuaries of India.

14. Segment Reporting - Accounting Standard (AS) 17 "Segment Reporting”

Segment information is given in the Consolidated Financial Statement in terms of Para 4 of the AS-17.

15. Related Party Disclosures - Accounting Standard (AS) 18 List of Related Parties and Transactions: The names of the related parties, their relationship with the bank and transactions effected-

Expenses towards gratuity and leave encashment are determined actuarially on an overall basis annually and accordingly have not been considered in the above information.

b) Subsidiary:

i) AllBank Finance Limited (wholly owned): The Bank holds entire share capital of Rs,15.00 Crore (Previous year Rs,15.00 Crore) in the company.

c) Joint Venture:

i) Universal Sompo General Insurance Company Limited.

ii) ASREC (India) Ltd.

The Bank is holding 30% share in Universal Sompo General Insurance Company Limited amounting to Rs,105.00 Crore (previous year Rs,105.00 Crore) and 27.04% share in ASREC (India) Ltd. amounting to Rs,26.50 Crore (previous year Rs,26.50 Crore )

d) Associates:

Allahabad U.P. Gramin Bank:

The Bank is holding 35% share in Allahabad U.P. Gramin Bank amounting to Rs,21.67 Crore (previous year Rs,21.67 Crore).

e) Transactions with associated company namely Universal Sompo General Insurance Company Limited are as follows:

16. Lease Disclosure-Accounting Standard (AS) 19

A) The Bank has various operating leases for office / residential facilities. Disclosures in this regard are as under:

i) Total of future minimum lease payments under non-cancellable operating leases for each of the following periods:

ii) The total of future minimum sublease payments expected to be received under non- cancellable subleases at the balance sheet date: NIL(Previous Year: Nil).

iii) Lease payments recognized in the statement of profit and loss for the period: Rs,128.72 Crore (previous year Rs,132.24 Crore)

iv) Sub-lease payments received (or receivable) recognized in the statement of profit and loss for the period: NIL (Previous Year: Nil).

B) Financial Lease:

Bank is not having any assets under Financial Lease.

17. Accounting for Taxes on Income: Accounting Standard (AS) 22

During the year, an amount of Rs,925.47 Crore has been credited (Previous year Rs,313.93 Crore) to the Profit & Loss Account by way of adjustment of deferred tax. The major components of Deferred Tax Assets/ Liabilities as on Balance Sheet date are as under:

As Bank has incurred loss during the current financial year 2015-16, hence no amount was transferred to Special Reserve under section 36 (1)(viii) of the Income Tax Act, 1961.Due to change in income tax rate, additional Deferred Tax Liability (DTL) of Rs,8.84 crore was made on Special Reserve (previous year Rs,95.68 crore).

The Bank has recognized the Deferred Tax Assets Rs,1156.80 crore on the difference in the provision for Non Performing Assets as per the books and as per Income Tax during the year ended March 31, 2016.

The Bank has also recognized the Deferred Tax Liability of Rs,124.98 crore in respect of difference in valuation of investment/ securities between accounting Income and taxable income during the year ended March 31, 2016.

18. Discontinuing Operations: Accounting Standard (AS) 24

Disclosure requirement is not applicable for the year under review.

19. A substantial portion of the bank''s assets comprise of ''financial assets'' to which Accounting Standard (AS) 28 ‘Impairment of Assets'' is not applicable. In the opinion of the management, there is no impairment of other assets of the Bank as on 31.03.2016 to any material extent requiring recognition in terms of the said standard.

20. Other Accounting Standards: Accounting Standard (AS) 11

Foreign Currency Transactions

Accounting for transactions involving foreign exchange is done in accordance with AS-11 (The effects of changes in foreign exchange rates) issued by the ICAI.

As stipulated in AS-11, the foreign currency operations of the Bank are classified as (a) Integral operations and (b) Non-integral operations. All overseas branches are treated as Non-integral operations and domestic operations in foreign exchange and Representative Offices are treated as Integral operations.

Transactions in respect of Non-Integral operations

(a) Foreign currency assets and liabilities are translated at the closing spot rates notified by FEDAI at the end of each quarter.

(b) Foreign exchange spot and forward contingent liabilities outstanding as at the Balance sheet date are translated at the closing spot and forward rates respectively notified by FEDAI and at interpolated rates for contracts of interim maturities.

(c) Income and expense are translated at quarterly average rate notified by FEDAI at the end of each quarter.

(d) The resulting exchange differences are not recognized as income or expense for the period but accumulated in a separate account “Foreign currency Translation Reserve” till the disposal of the net investment.

Transactions in respect of Integral operations

(a) Income and expenses are translated and accounted for at exchange rates prevailing on the date of transaction.

(b) Foreign currency assets and liabilities (including contingent liabilities) are translated at the closing spot rates notified by FEDAI at the end of each quarter.

(c) The resulting exchange differences are recognized as income or expenses and are accounted through Profit & Loss account.

Forward exchange contracts

In accordance with the guidelines of FEDAI and the provisions of AS-11, Foreign exchange spot and forward contracts outstanding as at the balance sheet date and held for trading are revalued at the closing spot and forward rates respectively notified by FEDAI and at interpolated rates for contracts of interim maturities. The resulting forward revaluation profit or loss is included in the Profit & Loss account.

5. Disclosure in terms of Accounting Standard (AS) 29 on “Provisions, Contingent Liabilities and Contingent Assets”:

21. Draw Down from Reserves:

No amount has been drawn from the Reserve during the year. (Previous year Nil).

22. Letters of Comfort (LoCs) issued by banks:

During the current financial year, the Bank has issued 1640 number of LoCs amounting to Rs,5140.99 Crore (previous year 1202 number of LoCs amounting to Rs,3638.03 Crore) for providing Buyers Credit facility. The outstanding LoCs as on 31.03.2016 amount to Rs,2473.33 crore (previous yearRs,1743.06 Crore). In Bank''s assessment, no financial impact is likely to arise in this respect.

23. Provision Coverage Ratio (PCR):

The provision coverage ratio as on 31.03.2016: 48.22% (Previous Year 51.50%)

24. Income from Bancassurance business during the year:

Commission received on life & non-life insurance business: Rs,21.62 Crore (previous year Rs,20.63 Crore).

25. Concentration of Deposits, Advances, Exposures & NPAs:

26. Off-Balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms): NIL (Previous year: NIL).

27. The Bank has made a total provision of Rs,743.98 crore up to 31st March, 2015 towards arrears for wage revision including liability of Pension, Gratuity and Leave Encashment, which is effective from 1st November, 2012. The excess provision of Rs,30.62 crore as ascertained has been reversed in employee cost during the year ending 31.03.2016.

28. Disclosure on Remuneration: As Allahabad Bank is a Public Sector Bank, Disclosures on Remuneration is not applicable as per RBI Circular No.DBOD.No.BC.72/ 29.67.001/ 2011-12 dated January 13, 2012.

29. Disclosures relating to Securitization:

As there is no SPVs sponsored by the Bank, the outstanding amount of securitized assets of SPVs as on date of balance sheet is Nil (Previous year: Nil)

30. Credit Default Swaps: Nil

Bank is not having any exposure in credit default swap and as such not using any internal model for pricing of credit default swaps.

31. Unhedged Foreign Currency Exposure:

Based on the available data, available financial statements and declaration from borrowers wherever received, the Bank has estimated the liability of Rs,12.68 crore up to 31st March, 2016 (previous year Rs,1.13 crore) on Unhedged Foreign Currency Exposure to their constituents in terms of RBI circular DBOD. No.BP.BC.85/21.06.200/2013-14 dated 15th January 2014 and subsequent clarification vide circular no. DBOD.No.BP.BC. 116/21.06.200/2013-14 dated 3rd June, 2014. The entire estimated amount has been fully provided for.

6. Liquidity Coverage Ratio:

Liquidity Coverage Ratio (LCR) related information for the year ending March 31, 2016 is given as under;

32. Qualitative disclosure around LCR:

The Liquidity Coverage Ratio (LCR) standard aims to ensure that the Bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario specified by supervisors. The LCR promotes short-term resilience of Banks to potential liquidity disruptions by ensuring that they have sufficient HQLAs to survive an acute stress scenario lasting for 30 days.

Liquidity Coverage Ratio (LCR) =

Stock of high quality liquid assets (HQLAs)

Total net cash outflows over the next 30 calendar days

The LCR requirement has become effective for Banks from January 1, 2015. With a view to provide a transition time for Banks, the requirement was a minimum of 60% for the calendar year 2015 i.e. from 1st January 2015 to 31st December 2015. The minimum requirement has increased to 70% from 1st January 2016 and will continue to rise in equal steps to reach the minimum required level of 100% on January 1, 2019, as per the time-line given below,

Intra period changes as well as changes over time:

The LCR of the Bank has been well above the mandatory requirements. The decrease from last year is due to ;

a) the enhancement in the qualification criteria for securities to be considered as High Quality Liquid Assets(HQLA);

b) relative fall in assured cash flows in the LCR time-horizon i.e. 30days.

LCR of the Bank has remained largely range bound i.e. it has remained stable without large fluctuations in its level. HQLAs of the Bank have further improved in the last quarter of the fiscal year on account of RBIs decision to allow banks to reckon government securities held by them up to an additional 3% of their NDTL under Facility to avail Liquidity for Liquidity Coverage Ratio (FALLCR) within the mandatory SLR requirement as Level I HQLA

Main drivers of LCR:

In our Bank, the main drivers for LCR results are,

- The comfortable level of high quality liquid Govt. Securities maintained over the mandatory SLR requirement, which can be sold or repo in the secondary market to avail easy liquidity;

- Reasonable level of cash and excess CRR balances;

- Liquidity facilities available from RBI under Marginal Standing Facility (MSF) and Facility to avail Liquidity for Liquidity Coverage Ratio (FALLCR);

- Majority of deposits from retail customers which are expected to have low run-offs under stressed conditions.

Composition of HQLA:

Major portion of the Bank''s HQLAs constitute of Level 1 Assets viz. most liquid in nature. Such assets include- Cash, excess CRR balances, excess SLR investments, liquidity facilities available from RBI such as MSF, FALLCR, etc. Level 2 Assets constitute of high credit rated Corporate Bonds and Equity Investments after considering stringent haircuts.

Concentration of Funding Sources:

Bank''s source of funding are comfortably spread with major reliance on small deposits rather than large wholesale funds. There were no significant counterparties in terms of concentration of funding sources. Thus, there is no undue concentration in any one source.

Derivative Exposures, Potential Collateral Calls and Currency Mismatch:

The Bank had negligible exposure to Derivatives during the year. Exposure to foreign currencies is also not significant and currency gaps are within its internal prudential limits and have been accounted for in the LCR computation. Any significant impact on liquidity on account of this is least expected.

The Treasury is in charge of the liquid assets of the Bank and manages the fund position of the Bank. The Assets Liability Management Cell, which monitors the liquidity position of the Bank at the corporate level, remains in constant touch with the Treasury. Apart from day-today monitoring of liquidity position by the top functionaries, separate Board level and top executive level committees monitor distinct liquidity parameters and provide strategic guidance to the functionaries.

Other Relevant Major Cash Flows:

Bank has sizeable investments in bonds of Public Sector Entities and Corporate which are excluded from LCR computation on account of being in the financial sector. The Bank believes that, even under stressed conditions, these investments can serve as a reliable source of liquidity, albeit with appropriate haircuts. All outflows that the Bank considers to be sizeable or bearing an impact on its liquidity are accounted for in the LCR computation.

33. Contingent Liabilities:

Such liabilities as mentioned at Sl. No.(I) to (VI) in schedule 12 of Balance Sheet are dependent upon the outcome of court / arbitration / out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties respectively.

34. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance) is ''116.88 Crore (Previous Year Rs,115.65 Crore).

35. Sector wise break-up of provision held under nonperforming advances is deducted on estimated basis from Gross Advances to arrive at the balance of Net Advances as stated in the Schedule-9 of the Balance Sheet.

36. Priority Sector Advances include Rs,450.00 Crore (previous year Rs,1500 Crore) on account of Inter Bank Participation Certificates (IBPC) of Direct Agriculture Advances purchased by the Bank on risk sharing basis from Allahabad U.P. Gramin Bank. Likewise, Rs,450.00 Crore (previous year Rs,1500.00 Crore) has been reduced from advances being amount of Inter Bank participation Certificates of non-priority sector advances sold by the Bank to Allahabad U.P. Gramin Bank.

37. In accordance with RBI circular DBOD.No.BP.BC.2/ 21.06.201/2015-16 dated 1st July, 2015, on ''Basel III capital Regulation'' read together with RBI circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31,2015 on ''Prudential Guidelines on Capital Adequacy and Liquidity Standard Amendments'' requires banks to make applicable Pillar 3 disclosures including leverage ratio and liquidity coverage ratio under the Basel III Framework. These disclosures have been made available on Bank''s website www.allahabadbank.in.

38. The Bank has issued and allotted 2,91,81,274 (Two Crore Ninety One Lac Eighty One Thousand Two Hundred Seventy Four) equity shares of face value of Rs,10.00 (Rupees Ten only) at an issue price of Rs,96.98 (Rupees

Ninety Six and Paisa Ninety Eight only) including a premium of Rs,86.98 (Rupees eighty six and paisa ninety eight only) per equity share to Government of India (President of India) on preferential basis on 30.09.2015 for a total consideration of Rs,282,99,99,952.52 (Rupees Two Hundred Eighty Two Crore Ninety Nine Lac Ninety Nine Thousand Nine Hundred Fifty Two and Paisa Fifty Two only). The Bank has also issued and allotted 1,32,44,282 (One crore thirty two lac, forty four thousand two hundred eighty two) equity shares of face value of Rs,10.00 (Rupees Ten only) at an issue price of Rs,43.42 (Rupees forty three and paisa forty two only) including a premium of Rs,33.42 (Rupees thirty three and paisa forty two only) per equity share to Life Insurance Corporation (LIC) of India on 31st March, 2016 for a total consideration of Rs,57,50,66,724.44 (Rupees Fifty Seven Crore Fifty Lac Sixty Six Thousand Seven Hundred Twenty Four and Paisa Forty Four only). As a result, during the year, paid up equity capital of the Bank increased by Rs,42.42 crore to Rs,613.80 crore and share premium increased by Rs,298.08 crore to Rs,2742.81 crore and the share holding of Govt. of India increased to 61.38% as on 31.03.2016 from 60.83% as on 31.03.2015. Accordingly, the EPS has been calculated on weighted average number of equity shares as specified in AS-20 issued by The Institute of Chartered Accountants of India.

39. Bank has received an amount of Rs,690.00 crore (Rupees six hundred ninety crore) from Govt. of India on30.03.2016 towards capital infusion. The bank is maintaining the same as “Share Application Money Pending Allotment” as on 31.03.2016. The Reserve Bank of India vide their letter DBR.No.BP. 12713/ 21.01.002/ 2015-16 dated 06.04.2016 has permitted the Bank to consider the aforesaid amount received from Government of India as part of Common Equity Tier 1(CET 1) as on March 31, 2016. Accordingly, Bank has included the entire amount of capital infusion i.e. Rs,690.00 crore (Rupees Six hundred ninety crore) received from Government of India on 30.03.2016, in its CET 1 as on 31.03.2016.

40. During the financial year 2015-16, twenty seven (27) number of fraud cases were reported involving a total amount of Rs,290.93 crore. Bank has recovered a total amount of Rs,8.33 crore and made a total provision of Rs,282.60 crore during the year and the quantum of unamortized provision debited from ''Other Reserves'' as at the end of year is NIL.

41. During the financial year 2015-16, the Bank has raised Tier 2 Capital aggregating to Rs,1000 crore (Rupees one thousand crore) through private placement of BASEL-III compliant Tier 2 bonds in the nature of debentures and has redeemed its Tier 2 Bonds aggregating to Rs,500.00 crore (Rupees five hundred crore) on maturity.

42. In terms of the provisions of Section 10B of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970(Inserted on 16.10.2006) and in terms of directives issued by Government of India, Ministry of

Finance vide their letter No.F.No.7/93/2013-BOA dated 21.05.2014, the unpaid and unclaimed dividends of the Bank for the FY 2007-08 have been transferred to Investors Education & Protection Fund (IEPF) established by the Central Government.

43. During the FY 2015-16, Bank has assigned financial assets having a net book value of Rs,1520.69 crore to Assets Reconstruction Companies for a consideration of Rs,976.14 crore and charged an amount of Rs,799.10 crore to Profit and Loss account being shortfall arrived at by deducting the sale consideration and the provision held as on the date of the sale from the outstanding amount and as such unamortized amount carried over to Balance Sheet as on 31.03.2016 is NIL. Further, in case where the financial assets sold for value higher than Net Book value on the date of sale, the excess provision has not been taken to Profit and Loss account except where consideration received in cash.

44. Pursuant to RBI Circular No.DBR.No.BP.BC.27/ 21.04.048/2015-16 dated 02.07.2015, the Bank has changed the discount rate to re-compute the diminution in the fair value of restructured advances on Net Present Value basis and has recomputed such diminution as on 31st March, 2016. As a result of change in discount rate, the Bank has written back provision of Rs,241.35 crore during the year 2015-16.

45. In compliance with RBI directives on Asset Quality Review (AQR) for their classification over the two quarters ending December 31, 2015 and March 31, 2016, the Bank has made the classification of Advances and provisioning as per directives of RBI and IRAC norms.

46. Under sub section (1) of section 17 of the Banking Regulation Act,1949 every Banking company incorporated in India is required to transfer specified percentage of its Profits to its Reserve Fund each year. However, in view of Loss position in the current year no amount has been transferred to Statutory Reserve.

21. The Capital Adequacy Ratio is computed on the basis of RBI guidelines applicable on the relevant reporting dates and the ratio for the corresponding previous period is not adjusted to consider the impact of subsequent changes if any, in the guidelines.

47. The Bank has revalued its residential & commercial properties as at March 31, 2016 and has credited an amount of Rs,1802.40 crore towards revaluation gain, to Revaluation Reserve. Pursuant to Revised guidelines on “Basel III Capital Regulations” issued by RBI on March 1, 2016, bank has included the permitted portion of the Revaluation Reserve in CET 1 capital.

Figures of previous year have been regrouped or reclassified wherever considered necessary.


Mar 31, 2014

1. Adequate provision has been made by the Bank in respect of performing and non-performing advances in terms of Reserve Bank of India (RBI) guidelines.

2.1. (i) Reconciliation and clearance of outstanding entries in Inter Branch adjustments are in progress and especially initial matching of debit and credit entries in various heads have been done upto 31.03.2014. Pending final clearance, the overall impact, if any, on the accounts, in the opinion of the management will not be significant.

(ii) At some branches, preparation of details/balancing/ reconciliation of accounts relating to Balances with Banks and NOSTRO Accounts are in progress. Since substantial progress has been made in the above areas, the management is of the view that the impact of reconciliation, if any, on the accounts of the Bank will not be material.

2.2 (i) Certain premises were revalued on the basis of the reports of the approved valuers during the year ended on 31.03.1997, 31.03.2005 and 31.03.2007 and upward revision amounting to Rs.125.99 Crore (commercial and residential), Rs.370.08 Crore (commercial and residential) and Rs.298.32 Crore (commercial) respectively had been credited to Revaluation Reserve. Depreciation on Revalued premises is worked out each year on its written down value. Additional depreciation of Rs.3.87 Crore (previous year Rs.4.01 Crore) on account of revaluation has been transferred from Revaluation Reserve Account and shown in Miscellaneous Income under the head "Other Income" included in Schedule No. 14 item (vii)

(ii) Depreciation has been charged on composite cost of Land and Building, where separate cost of land is not available.

(iii) Premium on leasehold land has been amortized over the period of lease, based on cost or written down value, where original cost is not available.

(iv) Registration formalities are yet to be completed for the following properties:

a. Two (2) residential properties purchased during the year 1990 & 1998 at Kolkata & Bhubaneshwar consisting of 29 & 10 flats respectively with total original cost of Rs.0.86Crore.

b. The Govt.of Bihar had allotted 1.01 acre of land at Budh Marg Patna on lease to the Bank w.e.f.07.09.1917. Bank is having its office complex there. Last lease expired on 07.09.2012. Payment for renewal of lease for further period of 30 years w.e.f. 07.09.2012 by payment of one time premium for Rs.70.70 lacs and annual rent @ Rs.7.07 lacs has been made to the Govt. of Bihar. The matter for execution of lease deed by the Govt.of Bihar is under process.

c. Renewal of lease of residential plots of land measuring 17520 sq.ft area at Paradeep, Odisha having 24 residential flats w.e.f. 02.04.2013 has been taken up with Paradeep Port Trust (PPT) and is under their consideration.

2.3. (i) In respect of Investments of face value of Rs.0.44 Crore (Previous year Rs.1.25 Crore), the Bank is yet to receive scrips/certificates.

(ii) Total Investments made in shares, convertible debentures and units of equity linked mutual fund/ venture capital funds and also advances against shares aggregate to Rs.916.91 Crore (Previous year Rs.719.60 Crore).

(iii) As per RBI guidelines, an amount of Rs.3.28 Crore (Previous Year Rs.31.49 Crore) being an amount equivalent to profit on sale of ''Held to Maturity'' category securities, net of taxes & net of transfer to statutory reserve; is transferred to ''Capital Reserve Account''.

(iv) In respect of ''Held to Maturity'' category as stated in significant Accounting Policy No. 4 (iv) (a), the excess of acquisition cost over the face value of the security amortized during the year amounts to Rs.61.37 Crore (Previous year Rs.54.68 Crore) has been netted-off from Income on Investment shown under the head "Interest Earned" of Profit and Loss Account in terms of RBI guidelines.

2.4. The Bank has not made any financing for margin trading during the year and also not securitised any assets.

3. Disclosure in terms of RBI guidelines:

3.1 Capital

As per RBI Circular DBOD.BP.BC.88/21.06.201/2012-13 dated 28 March, 2013, banks have been advised to disclose Capital Adequacy Ratio computed under Basel-III regulations from the quarter ended June-2013. Accordingly, corresponding details for the previous periods/year are not applicable and as such not furnished.

In terms of RBI circular DBOD.DP.BC.No.41/21.04.141/2013- 14 dated August 23, 2013 on ''Investment Portfolio of Banks – Classification, Valuation and Provisioning'', the bank had transferred SLR securities having book value of Rs.7,961.10 crore from AFS category to HTM category and had fully recognized the category transfer loss of Rs.Rs.61.35 crore during the quarter ended September 30, 2013.

3.2.3 Sale & Transfer to/from HTM category: All sales and transfers to/from HTM category during the year are within the limit of 5% of book value at the beginning of the year.

3.3.2 Exchange Traded Interest Rate Derivatives: NIL (Previous year: NIL)

3.3.3 Disclosures on risk exposure in derivatives

Qualitative Disclosure

Operation in the Treasury Branch of the Bank are segregated in three functional areas i.e. Front Office, Mid Office and Back Office, which are provided with trained officers with defined responsibilities and back up roles.

The Treasury Policy & Derivative policy of the Bank lays down the type of financial derivatives instruments, scope of usages, approval processes as also the limits like the open position limits, deal size limits and stop loss limits besides delegated power for trading in the approved instruments. The policy also allows purchase / sale of call or put options to hedge cross currency proprietary trading positions and to offer derivative products to its customers subject to back to back covering by the Bank.

The Front Office takes positions and executes the deals while the Mid Office monitors the transactions in the trading book and deviations of excesses, if any, are brought to the notice of higher authorities. The Mid office also measures the financial risk for transactions on a daily basis through measurement tools such as MTM, VAR, Convexity and modified durations. The figures are reported to Risk Management division, which appraises the risk profile to the Assets and Liability Management committee. The Back office settles all the deals with counter parties.

Interest Rate Swaps which hedge interest bearing assets or liabilities are accounted for on accrual basis except the Swaps designated with an asset or liability that is carried at market value or lower of cost or market value in the financial statements. Gains or Losses on the termination of Swaps are recognised over the shorter of the remaining contractual life of the Swap or the remaining life of the assets/liabilities. Trading Swap transactions are marked to market with changes recorded in the financial statements. The counterparties to the transactions are Banks and corporate entities and deals undertaken are within the approved exposure limits only. The guidelines issued by RBI, FEDAI & FIMMDA from time to time for recognition of Income, Premium and Discount are followed.

4. Disclosure Requirements as per Accounting Standards where R.B.I has issued guidelines in respect of disclosure items for ''Notes to Accounts'':

4.1. Accounting Standard 5- Net Profit or Loss for the period, prior period items and changes in accounting policies: Income and Expenditure relating to prior period are as under:

4.2. Income items recognised on cash basis were either not material or did not require disclosure under AS 9 on Revenue Recognition.

4.3. The Bank has adopted Accounting Standard 15 (Revised)- Employee Benefits, issued by Institute of Chartered Accountants of India, for recognition of its liabilities in respect of employee benefits, viz, Pension, Gratuity, Leave Encashment, LFC and Sick Leave w.e.f. 1st April, 2007. Recognition of liability in respect of Sick Leave benefit has been discontinued with effect from 31st March''2013.

4.3.1.Bank''s liabilities in respect of the funded/ non-funded employee benefits, viz., Pension(ABEPR-1995), Gratuity, Leave Encashment and LFC are recognised on the basis of actuarial valuation carried out by approved Actuary as per

(a) Principles laid down in AS 15 (Revised) issued by the Institute of Chartered Accountants of India, and

(b) Guidelines GN 26 issued by Institutes of Actuaries of India.

4.4. Segment Reporting – Accounting Standard (AS) 17 "Segment Reporting" Segment information is given in the Consolidated Statement in terms of Para 4 of the AS-17.

Expenses towards gratuity and leave encashment are determined actuarially on an overall basis annually and accordingly have not been considered in the above information.

a) Subsidiary

i) All Bank Finance Limited (wholly owned): The bank holds entire share capital of Rs.15.00 Cr. (Previous year Rs.15.00 Cr) in the company.

b) Joint Venture

i) Universal Sompo General Insurance Company Limited.

ii) ASREC (India) Ltd

The Bank is holding 30% share in Universal Sompo General Insurance Company Limited amounting to Rs.105.00 Cr (previous year Rs.105.00 Cr) and 27.04% share in ASREC (india) Ltd. amounting to Rs.26.50 Cr (previous year Rs.26.50 Cr )

c) Associates

Allahabad U.P. Gramin Bank:

The Bank is holding 35% share in Allahabad U.P. Gramin Bank amounting to Rs.21.67 Cr (previous year Rs.21.67 Cr).

d) Transactions with associated company namely Universal Sompo General Insurance Company Limited are as follows:

4.6. Lease Disclosure

A) The Bank has various operating leases for office / residential facilities. Disclosures in this regard are as under:

i) Total of future minimum lease payments under non-cancellable operating leases for each of the following periods:

ii) The total of future minimum sublease payments ex- pected to be received under non- cancellable sub- leases at the balance sheet date: NIL.

iii) Lease payments recognized in the statement of profit and loss for the period: Rs.111.45 Crore (previous year Rs.90.49 Crore)

iv) Sub-lease payments received (or receivable) recognised in the statement of profit and loss for the period: NIL.

B) Financial Lease

Bank is not having any assets under Financial Lease.

4.8. Accounting for Taxes on Income: Accounting Standard (AS) 22

During the year, an amount of Rs.47.54 Crore has been debited (Previous year Rs.32.92 Crore credited) to the Profit & Loss Account by way of adjustment of deferred tax. The major components of Deferred Tax Assets/ Liabilities as on Balance Sheet date are as under:

The Bank does not recognise deferred tax on HTM category of investments as in Bank''s opinion; there is no timing difference in this regard. Pursuant to the opinion of the Expert Advisory Committee of the Institute of Chartered Accountants of India on recognition of deferred tax on investments, the bank has referred the issue to the Indian Banks'' Association for their guidance on the matter since there is a difference in treatment on this subject in the industry.

4.9. Discontinuing Operations: Accounting Standard (AS) 24

Disclosure requirement is not applicable for the year under review.

4.10. A substantial portion of the bank''s assets comprise of ''financial assets'' to which Accounting Standard (AS) 28 ''Impairment of Assets'' is not applicable. In the opinion of the management, there is no impairment of other assets of the Bank as at 31.03.2014 to any material extent requiring recognition in terms of the said standard.

5. Disclosure in terms of Accounting Standard (AS) 29 on "Provisions, Contingent Liabilities and Contingent Assets":

5.3. Draw Down from Reserves (Previous year: NIL)

a. In accordance with Reserve Bank of India Notification No. DBOD No. BP.BC.77/21.04.018/2013-14 dated 20.12.2013, the Bank has provided Deferred Tax Liability (DTL) of Rs.301.71 Crore on account of Special Reserve created (under section 36(1)(viii) of the Income Ta x Act, 1961) for the period upto 31.03.2013, directly from "Revenue Reserve".

Bank has provided Deferred Tax Liability (DTL) of Rs.88.71 Crore on account of Special Reserve created for the financial year 2013-14 through Profit and Loss Account.

b. The Reserve Bank of India vide their letter No. DBOD.No.BP.17109/21.04.132/2013-14 dated 11.04.2014, has permitted to credit Sundry Liabilities (Interest Capitalisation) account for the Funded Interest Term Loan (FITL) created upto 31st March''13 directly from Reserve. Accordingly, Sundry Liabilities (Interest Capitalisation) amounting to Rs.687.72 Crore on account of FITL upto 31.03.2013 has been created directly from Revenue Reserve.

An amount of Rs.182.84 Crore has been charged to Profit & Loss account for the FITL for the current period F.Y. 2013-14.

5.5. Letters of Comfort (LoCs)

During the current financial year, the Bank has issued 382 number of LoCs amounting to Rs.2464.59 crore (previous year Rs.1901.94 Crore) for providing Buyers credit facility. The outstanding LoCs as on 31.03.2014 amount to Rs.1394.45 crore (previous year Rs.1060.65 Crore). In Bank''s assessment, no financial impact is likely to arise in this respect.

5.6. Provision Coverage Ratio

The provision coverage ratio as on 31.03.2014: 46.03% (Previous Year 50.00%)

5.7. Income from Bancassurance business during the year Commission received on life & non-life insurance business: Rs.20.08 Crore (previous year Rs.19.87Crore)

5.8. Concentration of Deposits, Advances, Exposures & NPAs

5.12. Off-Balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms)- NIL (Previous year :NIL)

5.13. Unamortised Pension and Gratuity Liabilities

A. On re-opening of Pension option to employees under Allahabad Bank (Employees'') Pension Regulations 1995 and enhancement in Gratuity limits under the Payment of Gratuity Act 1972 during the financial year 2010-2011, the Bank had incurred huge liability towards additional load amounting to Rs.708.07 Crore for Pension and Rs.39.63 Crore for Gratuity, which were amortised in terms of Reserve Bank of India circular DBOD No.BP.BC.80/21.04.018/2010- 11 dated 9th February, 2011. As per the provisions of the said circular, 1/5th of the amortised expenses is to be absorbed each year and accordingly, Rs.598.34 Crore (i.e.Rs.566.41 Crore for Pension and Rs.31.93 Crore for Gratuity) has been charged to the Profit and Loss Account in F.Y. 2010-11, 2011-12, 2012- 13 & 2013-14, carrying forward an amount of Rs.149.36 Crore (i.e. Rs.141.66 Crore for Pension and Rs.7.70 Crore for Gratuity) as unamortized expenses for F.Y. 2014-15. Following the said directive of the Reserve Bank of India, during the current financial year the Bank has charged a sum of Rs.149.60 Crore (i.e. Rs.141.60 Crore for Pension and Rs.8.00 Crore for Gratuity) to the Profit and Loss Account.

B. In implementation of the Defined Contribution Retirement Benefit Scheme for the employees joining service of the Bank on or after 01.04.2010, the Bank has adopted National Pension System for Corporate Model of NPS under the regulatory and administrative control of PFRDA and has joined NPS as Corporate under the purview of employer- employee relationship for these underlying employees, which has been operationalised in our Bank since April,2012.

C. Provision on account of Wage revision: To meet the probable load on the Bank on account of wage revision of employees (10th bipartite settlement) which is due from November 2012, the Bank has made a provision of Rs.282.00 Crore during the current financial year (previous year Rs.100.00 Crore).As suchtotal Provision on account of wage revision as on 31st March 2014 stands at Rs.382.00 Crore. Keeping in line with the IBA''s Guidance Note/ Bank''s Policy on Funding Superannuation Schemes as also in compliance of RBI directive in the matter, the Bank reviewed the model of provisioning in respect of the probable load on account of 10th Bipartite Settlement, during this fiscal. With the object to achieve strict compliance of the IBA''s Guidance Note in this regard, the probable funding load on Superannuation Schemes (viz. Pension, Gratuity and Leave Encashment) have been estimated on the basis of actuarial valuation conducted by Bank''s approved Actuary and accordingly, aggregate provision of Rs.382.00 Crore has been relocated as (1) Arrear Salary Rs.178.00 Crore; (2) Pension Rs.145.00 Crore;(3) Gratuity Rs.41.00 Crore and (4) Leave Encashment Rs.18.00 Crore.

5.14. Disclosures relating to Securitisation

As no SPVs sponsored by the Bank, the outstanding amount of securitized assets of SPVs as on date of balance sheet is Nil (Previous year: Nil)

6. Contingent Liabilities

Such liabilities as mentioned at Sl. No.(I) to (VI) in schedule 12 of Balance Sheet are dependent upon the outcome of court / arbitration / out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties respectively.

7. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance) Rs.61.05 Crore (Previous Year Rs.87.00 Crore).

8. Sector wise break-up of provision held under non-performing advances is deducted on estimated basis from gross advances to arrive at the balance of net advances as stated in the Schedule-9 of the Balance Sheet.

9. Priority Sector Advances include Rs.900.00 Crore (previous year Rs.700.00) on account of Inter Bank Participation Certificates (IBPC) of Direct Agriculture Advances purchased by the Bank on risk sharing basis from Allahabad U.P. Gramin Bank. Likewise, Rs.900.00 Crore (previous year Rs.700.00 Crore) has been reduced from advances being amount of Inter Bank participation Certificates of non-priority sector advances sold by the Bank to Allahabad U.P. Gramin Bank.

10. During the year, the Bank has transferred a sum of Rs.261.00 Crore (Previous Year Rs.251.00 Crore) to Special Reserve in terms of section 36 (1) (viii) of the income Tax Act, 1961.

11 . In accordance with RBI circular DBOD.No.BP.BC.2/ 21.06.201/2013-14 dated 1st July, 2013, banks are required to make half yearly Pillar 3 disclosures under Basel III capital requirements with effect from 30th September, 2013. The disclosures have been made available on Bank''s website at the following link (https://www.allahabadbank.in/english/ home.aspx).

12. The Board of Directors of the Bank in its meeting dated 11th January, 2014 declared an interim dividend of Rs.2.50 per equity share i.e. @ 25% of the paid up capital of the Bank subject to necessary permission/approval from the Government of India. The Government of India vide its Notification No. F. No. 10/3/2010-BOA dated 15th January, 2014 notified that the provisions of Section 15(1) of the Banking Regulation Act, 1949 shall not apply to Public Sector Banks for the Financial Year 2013-14. The Dividend payment date was 30th January, 2014.

Further, the Board of Directors of the Bank have not recommended any final dividend for the financial year 2013-14.

13. The Bank has allotted 4,45,83,147( Four Crore Forty Five Lac Eighty Three Thousand One Hundred and Forty Seven) equity shares of face value of Rs.10.00 (Rupees Ten only) at a premium of Rs.79.72 (Rupees Seventy Nine and Paisa Seventy Two only) per equity share to Govt. Of India (President of India) on preferential basis on 24.12.2013 for a total consideration of Rs.399,99,99,948.84 (Rupees Three Hundred Ninety Nine Crore Ninety Nine Lac Ninety Nine Thousand Nine Hundred Forty Eight and Paisa Eighty Four only). Accordingly the EPS has been calculated on weighted average number of equity shares as specified in AS-20 issued by the Institute of Chartered Accountants of India.

14. An amount of Rs.0.74 Crore comprising of 103 credit entries of individual value of less than USD2500.00 which originated between the period from 1st April 1996 to 31st March 2002, and were held in "Blocked Account-Nostro Accounts Reconciliation" at the branch were credited to ''Profit & Loss'' account in terms of RBI circular DBOD.BP.BC.No.133/ 21.04.018/2008-09 dated 11th May,2009.The amount credited to Profit & Loss account was appropriated to the Reserve and shall not be available for declaration of dividend. Had this amount not been credited to Profit & Loss Account, the amount of profit for the year would have been lower by such amount.

15. Minimum Alternate Tax (MAT) Credit has been recognised as an asset to the extent of Rs.192.43 Crore as MAT Credit Entitlement under section 115JAA of the Income Tax Act, 1961.

16. Figures of previous year have been regrouped or reclassified wherever considered necessary.


Mar 31, 2013

1. Adequate provision has been made by the Bank in respect of performing and non-performing advances in terms of Reserve Bank of India (RBI) guidelines.

2.1 (i) Reconciliation and clearance of outstanding entries in inter branch adjustments are in progress and especially initial matching of debit and credit entries in various heads have been done upto 31.03.2013. Pending final clearance, the overall impact, if any, on the accounts, in the opinion of the management will not be significant.

(ii) At some branches, preparation of details / balancing / reconciliation of accounts relating to Balances with Banks and NOSTRO accounts are in progress. Since substantial progress has been made in the above areas, the management is of the view that the impact of reconciliation, if any, on the accounts of the Bank will not be material.

2.2 (i) Certain premises were revalued on the basis of the reports of the approved valuers during the year ended on 31.03.1997, 31.03.2005 and 31.03.2007 and upward revision amounting to Rs.125.99 Crore (commercial and residential), Rs.370.08 Crore (commercial and residential) and Rs.298.32 Crore (commercial) respectively had been credited to Revaluation Reserve. Depreciation on revalued premises is worked out each year on its written down value. Additional depreciation of Rs.4.01 Crore (previous year Rs.4.24 Crore) on account of revaluation has been transferred from Revaluation Reserve Account and shown in Miscellaneous Income under the head "Other Income" included in Schedule No. 14 item (vii)

(ii) Depreciation has been charged on composite cost of land and building, where separate cost of land is not available.

(iii) Premium on leasehold land has been amortized over the period of lease, based on cost or written down value, where original cost is not available.

(iv) Registration formalities are yet to be completed for 2 residential properties purchased during the year 1990 & 1998 at Kolkata & Bhubaneshwar consisting of 29 & 10 flats respectively with total original cost of Rs.0.86Crore.

2.3. (i) In respect of Investments of face value of Rs.1.25 Crore (Previous year Rs.61.25 Crore), the Bank is yet to re- ceive scrips/certificates.

(ii) Total Investments made in shares, convertible de- bentures and units of equity linked mutual fund/ven- ture capital funds and also advances against shares aggregate to Rs. 719.60 Crore (Previous year Rs.1045.18 Crore).

(iii) As per RBI guidelines, an amount of Rs.31.49 Crore (Previous Year Rs.11.65 Crore) being an amount equivalent to profit on sale of ''Held to Maturity'' cat- egory securities, net of taxes & net of transfer to statutory reserve; is transferred to ''Capital Reserve Account''.

(iv) In respect of ''Held to Maturity'' category as stated in significant Accounting Policy No. 4 (iv) (a), the ex- cess of acquisition cost over the face value of the security amortized during the year amounts to Rs.54.68 Crore (Previous year Rs.61.26 Crore) has been net- ted-off from Income on Investment shown under the head "Interest Earned" of Profit and Loss Account in terms of RBI guidelines.

2.4. The Bank has not made any financing for margin trading during the year and also not securitised any assets.

3.1.1. Sale & Transfer to/from HTM category: All sales and transfers to/from HTM category during the year are within the limit of 5% of book value at the beginning of the year.

3.1.2. The Bank has not made any provision towards diminution in the value of its investment in one of the joint venture companies (viz. M/s Universal Sompo General Insurance Co. Ltd.) classified as HTM, as the Bank is hopeful that the said investee company will generate profit in the near future and the diminution is of temporary nature.

3.1.3. Exchange Traded Interest Rate Derivatives: NIL (Previous year: NIL)

3.1.4. Disclosures on risk exposure in derivatives Qualitative Disclosure:

Operation in the Treasury Branch of the Bank are segregated in three functional areas i.e. Front Office, Mid Office and Back Office, which are provided with trained officers with defined responsibilities and back up roles.

The Treasury Policy & Derivative policy of the Bank lays down the type of financial derivative instruments, scope of usages, approval processes as also the limits like the open position limits, deal size limits and stop loss limits besides delegated power for trading in the approved instruments. The policy also allows purchase / sale of call or put options to hedge cross currency proprietary trading positions and to offer derivative products to its customers subject to back to back covering by the Bank.

The Front Office takes positions and executes the deals while the Mid Office monitors the transactions in the trading book and deviations of excesses, if any, are brought to the notice of higher authorities. The Mid office also measures the financial risk for transactions on a daily basis through measurement tools such as MTM, VAR, Convexity and modified durations. The figures are reported to Risk Management division, which appraises the risk profile to the Assets and Liability Management committee. The Back Office settles all the deals with counter parties.

Interest Rate Swaps which hedge interest bearing assets or liabilities are accounted for on accrual basis except the Swaps designated with an asset or liability that is carried at market value or lower of cost or market value in the financial statements. Gains or losses on the termination of Swaps are recognised over the shorter of the remaining contractual life of the Swap or the remaining life of the assets/liabilities. Trading Swap transactions are marked to market with changes recorded in the financial statements. The counterparties to the transactions are Banks and corporate entities and deals undertaken are within the approved exposure limits only. The guidelines issued by RBI, FEDAI & FIMMDA from time to time for recognition of Income, Premium and Discount are followed.

4. Disclosure Requirements as per Accounting Standards where R.B.I has issued guidelines in respect of disclosure items for ''Notes to Accounts'':

4.1. Income items recognised on cash basis were either not material or did not require disclosure under AS 9 on Revenue Recognition.

4.2. The Bank has adopted Accounting Standard 15 (Re- vised)- Employee Benefits, issued by Institute of Char- tered Accountants of India, for recognition of its liabili- ties in respect of employee benefits, viz, Pension, Gra- tuity, Leave Encashment, LFC and Sick Leave w.e.f. 1st April, 2007.

4.2.1. Bank''s liabilities in respect of the funded/ non-funded employee benefits, viz., Pension(ABEPR), Gratuity, Leave Encashment and LFC are recognised on the basis of actuarial valuation carried out by approved Actuary as per

(a) Principles laid down in AS 15 (Revised) issued by the Institute of Chartered Accountants of India, and

(b) Guidelines GN 26 issued by Institutes of Actuaries of India.

- The Bank had provided Rs.46.37 Crore towards Sick Leave upto previous year. The Sick Leave being non-encashable, the Bank has written back the entire provision of Rs.46.37 crore in the current year as it is no longer required as per expert advice obtained.

4.3. Segment Reporting - Accounting Standard (AS) 17 "Segment Reporting"

Segment information is given in the Consolidated Finan- cial Statements in terms of para 4 of the Standard.

4.4. Related Party Disclosures - Accounting Standard (AS) 18 List of Related Parties and Transactions: The names of the related parties, their relationship with the bank and transactions effected- Expenses towards gratuity and leave encashment are determined actuarially on an overall basis annually and accordingly have not been considered in the above information.

b) Subsidiary:

i) All Bank Finance Limited (wholly owned): The bank holds entire share capital of Rs.15.00 Cr. (Previous year Rs.15.00 Cr) in the company.

c) Joint Venture:

i) Universal Sompo General Insurance Company Limited.

ii) ASREC (India) Ltd.

The Bank is holding 30% share in Universal Sompo General Insurance Company Limited amounting to Rs.105.00 Cr (previous year Rs.105.00 Cr) and 27.04% share in ASREC (india) Ltd. amounting to Rs.26.50 (previous year Rs. 26.50 Cr )

d) Associates:

Allahabad U.P. Gramin Bank:

The Bank is holding 35% share in Allahabad U.P. Gramin Bank amounting to Rs.21.67 Cr (previous year Rs.21.67 Cr).

During the F.Y. 2012-13, Sharda Gramin Bank, another Regional Rural Bank sponsored by the Bank was amalgamated with Madhyanchal Gramin Bank promoted by State Bank of India in terms of Govt. of India, Ministry of Finance (Department of Financial Services) notification dated 01.11.2012. As such, the Sharda Gramin Bank ceases to be an associate of Allahabad Bank.

Transactions with associated company namely Universal Sompo General Insurance Company Limited are as follows:

4.5. Lease Disclosure:

A) The Bank has various operating leases for office / residential facilities. Disclosures in this regard are as under:

i) Total of future minimum lease payments under non- cancellable operating leases for each of the following periods:

ii) The total of future minimum sublease payments expected to be received under non- cancellable subleases at the balance sheet date: NIL.

iii) Lease payments recognized in the statement of profit and loss for the period: Rs.90.49 Crore (previous year Rs.76.02Crore)

iv) Sub-lease payments received (or receivable) recognised in the statement of profit and loss for the period: NIL.

B) Financial Lease:

Bank is not having any assets under Financial Lease.

4.6. Accounting for Taxes on Income: Accounting Stan- dard (AS) 22

During the year, an amount of Rs.32.92 Crore has been cred- ited (Previous year Rs.18.35 Crore credited) to the Profit & Loss Account by way of adjustment of deferred tax. The major com- ponents of Deferred Tax Assets/ Liabilities as on Balance Sheet date are as under:

The Bank does not recognise deferred tax on HTM category of investments as in Bank''s opinion; there is no timing difference in this regard. Pursuant to the opinion of the Expert Advisory Committee of the Institute of Chartered Accountants of India on recognition of deferred tax on investments, the bank has referred the issue to the Indian Banks'' Association for their guidance on the matter since there is a difference in treatment on this subject in the industry.

4.7. Discontinuing Operations: Accounting Standard (AS) 24

Disclosure requirement is not applicable for the year under review.

4.8. A substantial portion of the bank''s assets comprise of financial assets'' to which Accounting Standard (AS) 28 ''Impairment of Assets'' is not applicable. In the opinion of the management, there is no impairment of other assets of the Bank as at 31.03.2013 to any material extent requiring recognition in terms of the said standard.

5. Disclosure in terms of Accounting Standard (AS) 29 on "Provisions, Contingent Liabilities and Contingent Assets":

5.1. Letters of Comfort (LoCs):

During the current financial year, the Bank has issued 368 number of LoCs amounting to Rs.1901.94 crore (previous year Rs.998.04 Crore) for providing buyers credit facility. The out- standing LoCs as on 31.03.2013 amount to Rs.1060.65 crore (previous year Rs.108.88 Crore). In Bank''s assessment, no fi- nancial impact is likely to arise in this respect.

5.2. Provision Coverage Ratio

The provision coverage ratio as on 31.03.2013: 50.00% (Pre- vious Year 74.00%)

5.3. Income from Bancassurance business during the year:

Commission received on life & non-life insurance business: Rs.19.87 Crore (previous year Rs.18.87Crore)

5.4. Concentration of Deposits, Advances, Exposures & NPAs:

5.5. Off-Balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms): NIL.

5.6. Unamortised Pension and Gratuity Liabilities:

A. On re-opening of Pension option to employees under Allahabad Bank (Employees'') Pension Regulations 1995 and enhancement in Gratuity limits under the Payment of Gratuity Act 1972 during the financial year 2010-2011, the Bank had incurred huge liability towards additional load amounting to Rs.708.07 Crore for Pension and Rs.39.63 Crore for Gratuity, which were amortised in terms of Reserve Bank of India circular DBOD No.BP.BC.80/21.04.018/ 2010-11 dated 9th February, 2011. As per the provisions of the said circular, 1/5th of the amortised expenses is to be absorbed each year and accordingly, Rs.448.74 Crore (i.e. Rs.424.81 Crore for Pension and Rs.23.93 Crore for Gratuity) has already been charged to the Profit and Loss Account in F.Y. 2010-11, 2011-12 & 2012-13, carrying forward Rs.298.96 Crore (i.e. Rs.283.26 Crore for Pension and Rs.15.70 Crore for Gratuity) as unamortised expenses for future years. Following the said directive of the Reserve Bank of India, during the current financial year the Bank has charged a sum of Rs.149.60 Crore (i.e. Rs.141.60 Crore for Pension and Rs.8.00 Crore for Gratuity) to the Profit and Loss Account and Rs.298.96 Crore (i.e. Rs.283.26 Crore for Pension and Rs.15.70 Crore for Gratuity) is carried forward to next financial year.

B. In implementation of the Defined Contribution Retirement Benefit Scheme for the employees joining service of the Bank on or after 01.04.2010, the Bank has adopted National Pension System for Corporate Model of NPS under the regulatory and administrative control of PFRDA and has joined NPS as Corporate under the purview of employer-employee relationship for these underlying employees, which has since been operationalised.

C. Provision on account of Wage revision: To meet the probable load on the Bank on account of wage revision of employees (10th bipartite settlement) which is due from November 2012, the Bank has made a provision of Rs.100.00 Crore during the current financial year.

6. Contingent Liabilities:

Such liabilities as mentioned at Sl. No.(I) to (VI) in schedule 12 of Balance Sheet are dependent upon the outcome of court / arbitration / out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties respectively.

7. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance) Rs.87.00 Crore (Previous Year Rs.110.46 Crore).

8. Sector wise break-up of provision held under non- performing advances is deducted on estimated basis from gross advances to arrive at the balance of net advances as stated in the Schedule-9 of the Balance Sheet.

9. Priority Sector Advances include Rs.700.00 Crore (previous year Rs.550.00) on account of Inter Bank Participation Certificates (IBPC) of Direct Agriculture Advances purchased by the Bank on risk sharing basis from Allahabad U.P. Gramin Bank. Likewise, Rs.700.00 Crore (previous year Rs.350.00 Crore) has been reduced from advances being amount of Inter Bank participation Certificates of non-priority sector advances sold by the Bank to Allahabad U.P. Gramin Bank.

10. During the year, the Bank has transferred a sum of Rs.251.00Crore (Previous Year Rs.209.00 Crore) to Special Reserve in terms of section 36 (1) (viii) of the income Tax Act, 1961.

11. The Board of Directors of the Bank has recommended dividend @60% of paid-up capital i.e. Rs.6/- per share of face value of Rs.10/- each.

12. Figures of previous year have been regrouped or reclassified wherever considered necessary.


Mar 31, 2012

1. Adequate provision has been made in respect of Performing and Non-performing Advances in terms of Reserve Bank of India (RBI) guidelines.

2.1. (i) Reconciliation and clearance of outstanding entries

in Inter Branch adjustments are in progress and especially initial matching of debit and credit entries in various heads have been done upto 31.03.2012. Pending final clearance, the overall impact, if any, on the accounts, in the opinion of the management will not be significant.

(ii) At some branches, preparation of details / balancing / reconciliation of accounts relating to Balances with Banks and NOSTRO Accounts are in progress. Since substantial progress has been made in the above areas, the management is of the view that the impact of reconciliation, if any, on the accounts of the Bank will not be material.

(iii) In terms of RBI directives, old difference in various Personal and Impersonal Account heads in respect of 330 branches aggregating net credit of Rs141.39 Crores was transferred to Head Office and kept in "Contingency Account- General". RBI has further permitted not to report these 330 branches as arrear carrying branches in Bank's quarterly statement on Balancing of Books. The management is of the view that the impact of these items /reconciliation, if any, on the accounts of the Bank will not be material.

2.2. (i) Certain premises were revalued on the basis of the reports of the approved valuers during the year ended on 31.03.1997, 31.03.2005 and 31.03.2007 and upward revision amounting to Rs125.99 Crore (commercial and residential), Rs370.08 Crore (commercial and residential) and Rs 298.32 Crore (commercial) respectively had been credited to Revaluation Reserve. Depreciation on Revalued premises is worked out each year on its written down value. Additional depreciation of Rs4.24 Crore (previous year Rs4.45 Crore) on account of revaluation has been transferred from Revaluation Reserve Account and shown in Miscellaneous Income under the head "Other Income" included in Schedule No. 14 item (vii)

(ii) Depreciation has been charged on composite cost of Land and Building, where separate cost of land is not available.

(iii) Premium on leasehold land has been amortized over the period of lease, based on cost or written down value, where original cost is not available.

(iv) For the following properties registration formalities are yet to be completed:

a. 2 residential properties purchased during the year 1990 & 1998 at Kolkata & Bhubaneshwar consisting of 29 & 10 flats respectively with total original cost of Rs 0.86 Crore (Previous year Rs 0.86 Crore).

b. 1 leasehold property at Anandlok, New Delhi with original cost amounting to Rs 0.09 Crore (previous year Rs 0.09 Crore).

2.3. (i) In respect of Investments of face value of Rs 61.25 Crore (Previous year Rs 0.44 Crore), the Bank is yet to receive scrips/certificates.

(ii) Total Investments made in shares, convertible debentures and units of equity linked mutual fund/ venture capital funds and also advances against shares aggregate to Rs 1045.18 Crore (Previous year Rs 770.89 Crore).

(iii) As per RBI guidelines, an amount of Rs 23.00 Crore (Previous Year NIL) being an amount equivalent to post Tax profit on sale of 'Held to Maturity' category securities is transferred to 'Capital Reserve Account'.

(iv) In respect of 'Held to Maturity' category as stated in significant Accounting Policy No. 3 (iii), the excess of acquisition cost over the face value of the security amortized during the year amounts to Rs 61.26 Crore (Previous year Rs 83.33 Crore) has been netted-off from Income on Investment shown under the head "Interest Earned" of Profit and Loss Account in terms of RBI guidelines.

2.4. The Bank has not made any financing for margin trading during the year and also not securitised any assets.

2.5. During the year, Bank has issued 2,38,10,771 equity shares of Rs 10/- each at a premium of Rs 182.94 per share amounting to Rs 459.40 Crore (approx.) on preferential allotment basis to Life Insurance Corporation of India including its various schemes (LIC). Out of Rs459.40 Crore, Rs 23.81 Crore (approx.) credited to Share Capital Account and Rs 435.59 Crore (approx.) to Share Premium A/c.

3.1.1 Exchange Traded Interest Rate Derivatives: NIL (Previous year: NIL)

3.1.2 Disclosures on risk exposure in derivatives Qualitative Disclosure:

Operation in the Treasury Branch of the Bank are segregated in three functional areas i.e. Front Office, Mid Office and Back Office, which are provided with trained officer with defined responsibilities and back up roles.

The Treasury Policy & Derivative policy of the Bank lays down the type of financial derivatives instruments, scope of usages, approval process as also the limits like the open position limits, deal size limits and stop loss limits besides delegated power for trading in the approved instruments. The policy also allows purchase / sale of call or put options to hedge cross currency proprietary trading positions and to offer derivative products to its customer subject to back to back covering by the Bank. The Front Office takes positions and executes the deals while the Mid Office monitors the transactions in the trading book and deviations of excesses, if any, are brought to the notice of higher authorities. The Mid office also measures the financial risk for transactions on a daily basis through measurement tools such as MTM, VAR, Convexity and modified durations. The figures are reported to Risk Management division, which appraises the risk profile to the Assets and Liability Management committee. The Back office settles all the deals with counter parties.

Interest Rate Swaps which hedge interest bearing assets or liabilities are accounted for on accrual basis except the Swaps designated with an asset or liability that is carried at market value or lower of cost or market value in the financial statements. Gain or Losses on the termination of Swaps are recognised over the shorter of the remaining contractual life of the Swap or the remaining life of the assets/liabilities. Trading Swap transactions are marked to market with changes recorded in the financial statements. The counterparties to the transactions are Banks and corporate entities and deals undertaken are within the approved exposure limits only. The guidelines issued by RBI, FEDAI & FIMMDA from time to time for recognition of Income, Premium and Discount are followed.

4.1. Income items recognised on cash basis were either not material or did not require disclosure under AS 9 on Revenue Recognition.

4.2. The Bank adopted Accounting Standard 15 (Revised)- Employee Benefits, issued by Institute of Chartered Accountants of India, for recognition of its liabilities in respect of employee benefits, viz, Pension, Gratuity, Leave Encashment, LFC and Sick Leave.

4.3.1. Bank's liabilities in respect of the funded/ non-funded employee benefits, viz., Pension(ABEPR), Gratuity, Leave Encashment, LFC and Sick Leave are recognised on the basis of actuarial valuation carried out by approved Actuary as per

(a) Principles laid down in AS 15 (Revised) issued by the Institute of Chartered Accountants of India, and

(b) Guidelines GN 26 issued by Institutes of Actuaries of India.

4.4. Segment Reporting - Accounting Standard (AS) 17 "Segment Reporting"

Segment information is given in the Consolidated Financial Statements in terms of para 4 of the Standard.

4.5. Related Party Disclosures - Accounting Standard (AS) 18 List of Related Parties and Transactions

a) The names of the related parties, their relationship with the bank and transaction effected.

Expenses towards gratuity and leave encashment are determined actuarially on an overall company basis annually and accordingly have not been considered in the above information.

b) Subsidiary:

i) All Bank Finance Limited (wholly owned)

c) Joint Venture:

i) ASREC (India) Ltd.

ii) Universal Sompo General Insurance Company Limited.

d) Associates:

i) Allahabad U.P. Gramin Bank:

ii) Sharda Gramin Bank

The Bank is holding 100% share in All Bank Finance Limited, 27.04% share in ASREC (india) Ltd., 30% share in Universal Sompo General Insurance Company Limited and 35% share in each of the above mentioned two Regional Rural Banks.

The transactions with the subsidiary and Regional Rural Banks have not been disclosed in view of para 9 of the (AS)-18 Related Party Disclosure, which exempts state controlled enterprises from making any disclosure pertaining to their transactions with other related parties which are also state controlled.

e) Transactions with associated company namely Universal Sompo General Insurance Company Limited are as follows:

4.6. Lease Disclosure:

A) The Bank has various operating leases for office / residential facilities. Disclosures in this regard are as under:

i) Total of future minimum lease payments under non- cancellable operating leases for each of the following periods:

ii) The total of future minimum sublease payments expected to be received under non- cancellable subleases at the balance sheet date: NIL.

iii) Lease payments recognised in the statement of profit and loss for the period: Rs 76.02 Crore (previous year Rs 66.20 Crore)

iv) Sub-lease payments received (or receivable) recognised in the statement of profit and loss for the period: NIL.

B) Financial Lease:

Bank is not having any assets under Financial Lease.

4.7. Accounting for Taxes on Income: Accounting Standard (AS) 22

During the year, an amount of Rs 18.35 Crore (Net) has been credited (Previous year Rs 51.94 Crore debited) to the Profit & Loss Account by way of adjustment of deferred tax. The major components of Deferred Tax Assets/ Liabilities as on Balance Sheet date are as under:

The Bank does not recognise deferred tax on HTM category of investments as in Bank's opinion; there is no timing difference in this regard. Pursuant to the opinion of the Expert Advisory Committee of the Institute of Chartered Accountants of India on recognition of deferred tax on investments, the bank has referred the issue to the Indian Banks' Association for their guidance on the matter since there is a difference in treatment on this subject in the industry.

4.8. Discontinuing Operations: Accounting Standard (AS) 24

Disclosure requirement is not applicable for the year under review.

4.9. A substantial portion of the bank's assets comprise of 'financial assets' to which Accounting Standard (AS) 28 'Impairment of Assets' is not applicable. In the opinion of the management, there is no impairment of other assets of the Bank as at 31.03.2012 to any material extent requiring recognition in terms of the said standard.

5. Disclosure in terms of Accounting Standard (AS) 29 on "Provisions, Contingent Liabilities and Contingent Assets":

5.1.1. Provisions & Contingencies debited to Profit & Loss Account:

5.2. Provision Coverage Ratio

The provision coverage ratio of the bank in terms of RBI guidelines as on 31.03.2012 is 74.00% (Previous Year 75.67%)

5.3. Income from Bancassurance business during the year:

Commission received on life & non-life insurance business: Rs 18.87 Crore

5.4. Concentration of Deposits, Advances, Exposures & NPAs:

5.5. Off-Balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms): NIL.

5.6. Unamortised Pension and Gratuity Liabilities:

A. On re-opening of Pension option to employees under Allahabad Bank (Employees') Pension Regulations 1995 and enhancement in Gratuity limits under the Payment of Gratuity Act 1972 during the financial year 2010-2011, the Bank had incurred huge liability towards additional load amounting to Rs 708.07 Crore for Pension and Rs 39.63 Crore for Gratuity, which were amortised in terms of Reserve Bank of India circular DBOD No.BP.BC.80/ 21.04.018/2010-11 dated 9th February, 2011. As per the provisions of the said circular, 1/5th of the amortised expenses is to be absorbed each year and accordingly, Rs149.54 Crore (i.e., Rs141.61 Cr for Pension Rs 7.93 Cr for Gratuity, representing one-fifth of Rs 747.70 Cr) was charged to the Profit and Loss Account in F.Y. 2010-11, carrying forward Rs 598.16 Crore as unamortised expenses for future years. Following the said directive of the Reserve Bank of India, during the current financial year the Bank has charged a sum of Rs 149.60 Crore (i.e., Rs 141.60 Cr Rs 8.00 Cr respectively) to the Profit and Loss Account and Rs 448.56 Crore (i.e., Rs 424.86 Cr Rs 23.70 Cr respectively) is carried forward to next financial year.

B. In implementation of the Defined Contribution Retirement Benefit Scheme for the employees joining service of the Bank on or after 01.04.2010, the Bank has adopted National Pension System for Corporate Model of NPS under the regulatory and administrative control of PFRDA and has joined NPS as Corporate under the purview of employer-employee relationship for these underlying employees. Estimated amount of Bank's contribution for the current year has been provided to debit of profit and loss account for the year.

6. Contingent Liabilities:

Such liabilities as mentioned at Sl. No.(I) to (VI) in schedule 12 of Balance Sheet are dependent upon the outcome of court / arbitration / out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties respectively.

7. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance) Rs 110.46 Crore (Previous Year Rs 41.84 Crore).

8. Sector wise break up of provision held under non- performing advances is deducted on estimated basis from gross advances to arrive at the balance of net advances as stated in the Schedule-9 of the Balance Sheet.

9. Advances include Rs 550.00 Crore (previous year NIL) on account of Inter Bank Participation Certificates with risk taken by the Bank. Likewise, a sum of Rs 350.00 Crore (previous year NIL) has been reduced from advances against Inter Bank Participation Certificates with risk issue by the Bank.

10. During the year, the Bank has transferred a sum of Rs 209.00 Crore (Previous Year Rs 239.00 Crore) to Special Reserve in terms of section 36 (1) (viii) of the Income Tax Act, 1961.

11. The Board of Directors of the Bank has recommended dividend @60% of paid-up capital i.e. Rs 6/- per share of face value of Rs 10/- each.

12. Figures of previous year have been regrouped or reclassified wherever considered necessary.


Mar 31, 2011

1.(i) Adequate provision has been made in respect of Performing and Non-performing Advances in terms of Reserve Bank of India (RBI) guidelines.

(ii) Prudential Floating Provision of Rs.48.00 Crore (Previous Year Rs.48.00 Crores) is held as at 31.03.2011 in respect of gross Non-performing Advances over and above the minimum provision prescribed by RBI with a view to strengthen the financial stability of the Bank.

2. (i) Under Inter-Branch reconciliation, initial matching of entries has been done upto 31.03.2011. Reconciliation of unmatched entries with the balance in Branch Adjustment account and transactions between Head Office and branches including branches inter-se is in progress. Further, in terms of RBIs circular, segregation of debit and credit entries in Inter Branch Account pertaining to the period upto 30.09.2010 and remaining outstanding as on 31.03.2011 have resulted in net credit, hence no provision is required.

(ii) At some branches, preparation of details / balancing / reconciliation of accounts relating to Balances with Banks and NOSTRO Accounts are in progress. Since substantial progress has been made in the above areas, the management is of the view that the impact of reconciliation, if any, on the accounts of the Bank will not be material.

(iii) In terms of RBI directives as contained in their DBS.CO.SMC.423.22.04.001/97-98 dated March 17, 1998, old difference in various Personal & Impersonal Account Heads in respect of 330 branches aggregating net credit of Rs. 141.39 crores was transferred to Head Office during the year 2000 & 2004 and kept in "Coningency Account- General". The RBI in terms of their letter no. DBS.CO.SMC.No. 8002/22.04.001/2010-11 of December 09, 2010 have permitted not to report these 330 branches as arrear carrying branches to Reserve Bank of India in Banks quarterly statement on Balancing of Books.

3. The provision for income tax (including deferred tax) aggregating to Rs.1822.95 Crores (previous year Rs. 1315.35 Crores) held is considered adequate by the Bank after taking into consideration various judicial decisions on disputed issues.

4. (i) Certain premises were revalued on the basis of the reports of the approved valuers during the year ended on 31.03.1997, 31.03.2005 and 31.03.2007 and upward revision amounting to Rs. 125.99 Crores (commercial and residential), Rs.370.08 Crores (commercial and residential) and Rs. 298.32 Crores (commercial) respectively had been credited to Revaluation Reserve. Depreciation on Revalued premises is worked out each year on its written down value. Additional depreciation of Rs.4.45 Crores (previous year Rs.4.68 Crores) on account of revaluation has been transferred from Revaluation Reserve Account and shown in Miscellaneous Income under the head "Other Income" included in Schedule No. 14 item (vii).

(ii) Depreciation has been charged on composite cost of Land and Building, where separate cost of land is not available.

(iii) Premium on leasehold land has been amortized over the period of lease, based on cost or written down value, where original cost is not available.

(iv) For the following properties registration formalities are yet to be completed:

a. 2 residential properties purchased during the year 1990 & 1998 at Kolkata & Bhubaneshwar consisting of 29 & 10 flats respectively with total original cost of Rs.0.86 Crores (Previous year Rs.0.86 Crores).

b. 1 leasehold property at Anandlok, New Delhi with original cost amounting to Rs. 0.09 Crores (previous year Rs.0.23 Crores).

5. (i) In respect of Investments of face value of Rs.0.44

Crore (Previous year Rs.0.44 Crore), the Bank is yet to receive scrips / certificates.

(ii) Total Investments made in shares, convertible deben- tures and units of equity linked mutual fund / venture capital funds and also advances against shares ag- gregate to Rs. 770.89 Crores (Previous year Rs. 849.82 Crores).

(iii) As per RBI guidelines, an amount of Rs NIL Crores (Previous Year Rs.9.78 Crores) being an amount equivalent to post Tax profit on sale of ‘Held to Matu- rity category securities is transferred to ‘Capital Re- serve Account.

(iv) In respect of ‘Held to Maturity category as stated in significant Accounting Policy No. 3 (iii), the excess of acquisition cost over the face value of the security amortized during the year amounts to Rs.83.33 Crores (Previous year Rs.112.32 Crores) has been netted off from Income on Investment shown under the head "Interest Earned" of Profit and Loss Account in terms of RBI guidelines.

6. The Bank has not made any financing for margin trading during the year and also not securitised any assets.

7. During the year, Bank has issued 2,95,15,418 equity shares of Rs. 10/- each at a premium of Rs. 217/- per share amounting to Rs. 670.00 Crore (approx.) on preferential allotment basis to Govt. of India (President of India). Out of Rs. 670.00 Crore, Rs. 29.52 Crore (approx.) credited to Share Capital Account and Rs. 640.48 Crore (approx.) to Share Premium A/c.

8.3.2 Exchange Traded Interest Rate Derivatives: NIL

8.3.3 Disclosures on risk exposure in derivatives Qualitative Disclosure:

Operation in the Treasury Branch of the Bank are segregated in three functional areas i.e. Front Office, Mid Office and Back Office, which are provided with trained officer with defined responsibilities and back up roles.

The Treasury Policy & Derivative policy of the Bank lays down the type of financial derivatives instruments, scope of usages, approval process as also the limits like the open position limits, deal size limits and stop loss limits besides delegated power for trading in the approved instruments. The policy also allows purchase / sale of call or put options to hedge cross currency proprietary trading positions and to offer derivative products to its customer subject to back to back covering by the Bank.

The Front Office takes positions and executes the deals while the Mid Office monitors the transactions in the trading book and deviations of excesses, if any, are brought to the notice of higher authorities. The Mid office also measures the financial risk for transactions on a daily basis through measurement tools such as MTM, VAR, Convexity and modified durations. The figures are reported to Risk Management division, which appraises the risk profile to the Assets and Liability Management committee. The Back office settles all the deals with counter parties.

Interest Rate Swaps which hedge interest bearing assets or liabilities are accounted for on accrual basis except the Swaps designated with an asset or liability that is carried at market value or lower of cost or market value in the financial statements. Gain or Losses on the termination of Swaps are recognised over the shorter of the remaining contractual life of the Swap or the remaining life of the assets/liabilities. Trading Swap transactions are marked to market with changes recorded in the financial statements. The counterparties to the transactions are Banks and corporate entities and deals undertaken are within the approved exposure limits only. The guidelines issued by RBI, FEDAI & FIMMDA from time to time for recognition of Income, Premium and Discount are followed.

8.4.2

The provision coverage ratio of the bank in terms of RBI guidelines as on 31.03.2011 is 75.67% (Previous Year 78.95%)

8.4.5

Details of non-performing financial assets purchased/ sold:

A. Non-performing financial assets purchased: NIL

12.8 Off-Balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms) : NIL

13. Income from Bancassurance business during the year: Commission received on life & non-life insurance business: Rs. 17.82 Crores

14.3 Draw Down from Reserves: Rs. 6.18 Cr (from special Reserve for IRS)

15. Compliance with Accounting Standards

The Bank has complied with the following Accounting Standards (AS) issued by the Institute of Chartered Accountants of India and the following disclosures are made in accordance with the provisions of such Accounting Standards:

16.2 Income items recognised on cash basis were either not material or did not require disclosure under AS 9 on Revenue Recognition.

16.3.1.The Bank adopted Accounting Standard 15(Revised)- Employee Benefits, issued by Institute of Chartered Accountants of India, for recognition of its liabilities in respect of employee benefits, viz, Pension (New), Pension (Old), Gratuity, Leave Encashment, LFC and Sick Leave w.e.f. 1st April 2007.

16.3.2.Consequent upon judgement & order passed by the Honble Supreme Court of India in finally deciding on the Banks SLP in the matter of its pension(old) scheme in lieu of gratuity styled ‘Allahabad Bank Employees Pension Scheme (Old) making it obligatory on the part of the Bank to pay gratuity even to these pensioners, the said Scheme has been discontinued in terms of approval of the Banks Board of Directors with prior permission from the Government, w.e.f. October 2010, simultaneously paying gratuity to these pensioner. Hence, further provisioning is neither made nor required in respect of Pension (Old) as on 31.03.2011 and in future.

16.3.3.Out of the accumulated provision for Pension (Old) amounting to Rs. 168.77 Crore as at the time of discontinuation of the Scheme, Rs. 150.00 Crore has been utilised towards provisioning against Banks liabilities in respect of Additional Load on account of 2nd Option for Pension (ABEPR-1995) by a section of employees who were in the Roll of the Bank as on 29.09.1995 but did not exercise option for Pension Regulations-1995 earlier. The remaining Rs. 18.77 Crore has been transferred to ‘Outstanding Liabilities A/C to club with an earlier provision of Rs. 33.00 Crore made in F.Y. 2009- 10, towards payment of gratuity in compliance of Honble Supreme Courts Order, as mentioned in paragraph 17.3.2. above, making total provision on this score to the tune of Rs. 51.77 Crore. Out of this, payment to the tune of Rs. 32.61 Crore has already been made to those whose names appeared in the Pension Scroll under the Scheme in October 2010 and some of the legal heirs of eligible deceased ex-employees whose claims were received. The balance Rs. 19.16 Crore is considered to be sufficient to meet the payment liability to the remaining judgement beneficiaries.

16.3.4. Banks liabilities in respect of the remaining funded/ non-funded employee benefits, viz., Pension (ABEPR) [hitherto known as Pension(New)], Gratuity, Leave Encashment, LFC and Sick Leave are recognised on the basis of actuarial valuation carried out by approved Actuary as per

(a) Principles laid down in AS 15 (Revised) issued by the Institute of Chartered Accountants of India, and

(b) guidelines GN 26 issued by Institutes of actuaries of India.

16.3.5. During the year, the Bank reopened the pension for such of its employees who did not opt for the pension scheme under Allahabad Bank (Employees) Pension Regulations 1995 earlier. As a result of exercise of which by 11557 employees, the Bank has incurred a liability of Rs. 708.07 Crore. Further, during the year, the limit of gratuity payable to the employees of the Bank was also enhanced pursuant to the amendment to the Payment of Gratuity Act, 1972. As a result, the gratuity liability of the Bank has increased by Rs. 39.63 Crore.

In terms of the requirements of the Accounting Standard (AS) 15, Employee Benefits, the entire amount of Rs. 747.70 Crore (i.e., Rs. 708.07 Cr for second option of pension + Rs. 39.63 Cr due to increase in ceiling of gratuity limit) is required to be charged to the Profit and Loss Account. However, the Reserve Bank of India has issued a circular DBOD No.BP.BC.80/21.04.018/

2010-11 dated 9th February, 2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits – Prudential Regulatory Treatment. In accordance with the provisions of the said Circular, the Bank would amortise the amount of Rs. 747.70 Crore over a period of five years. Accordingly, Rs. 149.54 Crore (i.e., Rs. 141.61 Cr + Rs. 7.93 Cr, representing one-fifth of Rs. 747.70 Cr) has been charged to the Profit and Loss Account. In terms of the requirements of the aforesaid RBI circular, the balance amount carried forward, i.e., Rs. 598.16 Crore (Rs. 747.70 Cr – Rs. 149.54 Cr) does not include any employees relating to separated/ retired employees.

Had such a circular not been issued by the RBI, the profit of the Bank would have been lower by Rs. 598.16 Crore pursuant to application of the requirements of AS 15.

16.4. The Bank has since completed the process of implementing wage revision on account of 9th Bipartite Settlement/ Joint Note dated 27.04.2010. The exercise, including payment of Banks contribution to PF on arrear salary, has been completed within the aggregate provision of Rs. 275.00 Crore held by the Bank as on 31.03.2010 (Rs. 122 Crore and Rs. 153 Crore provided in F.Y. 2008-09 and 2009-10, respectively). The ad-hoc provision from earlier F.Y. amounting to 47.00 Crore has been applied towards Banks liability in respect of Additional Load on account of 2nd Pension Option.

16.5. Pending formulation of the Defined Contribution Retirement Benefit Scheme for the employees joining o the Bank on or after 01.04.2010, estimated amount of Banks contribution has been provided to debit of profit and loss account for the year.

16.6. Segment Reporting – Accounting Standard (AS) 17 "Segment Reporting"

Segment information is given in the Consolidated Financial Statements in terms of para 4 of the Standard.

16.7. Related Party Disclosures – Accounting Standard (AS) 18 List of Related Parties and Transactions

Expenses towards gratuity and leave encashment are determined actuarially on an overall company basis annually and accordingly have not been considered in the above information.

b) Subsidiary:

i) All Bank Finance Limited (wholly owned)

c) Joint Venture:

i) ASREC (India) Ltd.

ii) Universal Sompo General Insurance Company Limited.

d) Associates:

i) Allahabad U.P. Gramin Bank

ii) Sharda Gramin Bank

The Bank is holding 100% shares in AllBank Finance Limited, 30% shares in Universal Sompo General Insurance Company Limited and 35% shares of the above mentioned two Regional Rural Banks.

The transactions with the subsidiaries and Regional Rural Banks have not been disclosed in view of para 9 of the (AS)- 18 Related Party Disclosure, which exempts state controlled enterprises from making any disclosure pertaining to their transactions with other related parties which are also state controlled.

16.8. Lease Disclosure:

A) The Bank has various operating leases for office / residential facilities. Disclosures in this regard are as under:

i) Total of future minimum lease payments under non- cancellable operating leases for each of the following periods:

Rent payable for unexpired lease period as on 31.03.2011

ii) The total of future minimum sublease payments expected to be received under non-cancellable subleases at the balance sheet date: NIL.

iii) Lease payments recognised in the statement of profit and loss for the period: Rs. 66.20 Crores.

iv) Sub-lease payments received (or receivable) recognised in the statement of profit and loss for the period: Rs. NIL.

B) Financial Lease:

Bank is not having any assets under Financial Lease.

16.10. Accounting for Taxes on Income: Accounting Standard (AS) 22

The Bank does not recognise deferred tax on HTM category of investments as in Banks opinion; there is no timing difference in this regard. Pursuant to the opinion of the Expert Advisory Committee of the Institute of Chartered Accountants of India on recognition of deferred tax on investments, the bank has referred the issue to the Indian Banks Association for their guidance on the matter since there is a difference in treatment on this subject in the industry.

16.11 A substantial portion of the banks assets comprise of ‘financial assets to which Accounting Standard (AS) 28 ‘Impairment of Assets is not applicable. In the opinion of the management, there is no impairment of other assets of the Bank as at 31.03.2011 to any material extent requiring recognition in terms of the said standard.

16.12. Disclosure in terms of Accounting Standard (AS) 29 on "Provisions, Contingent Liabilities and Contingent Assets":

20. Contingent Liabilities:

Such liabilities as mentioned at Sl. No.(I) to (VI) in schedule 12 of Balance Sheet are dependent upon the outcome of court / arbitration / out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties respectively.

21. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance) Rs. 41.84 Crores (Previous Year Rs. 38.67 Crores).

22. Sector wise break up of provision held under non- performing advances is deducted on estimated basis from gross advances to arrive at the balance of net advances as stated in the Schedule-9 of the Balance Sheet.

23. The Bank has transferred a total sum of Rs. 356.00 Crore to Special Reserve in terms of section 36 (1) (viii) of the income Tax Act, 1961. Of this, Rs. 239.00 Crore pertains to the current financial year and Rs. 117.00 Crore to the previous financial year.

24. Bank has proposed dividend of Rs. 285.73 Crore (Rs. 6 per share), which is subject to notification to be issued to this effect by the Govt. Of India under section 53 Banking Regulation Act, 1949.

25. Figures of previous year have been regrouped or reclassified wherever considered necessary.


Mar 31, 2010

1. (i) Adequate provision has been made in respect of

Performing and Non-performing Advances in terms of Reserve Bank of India (RBI) guidelines.

(ii) Prudential Floating Provision of Rs.48.00 Crores (Previous Year Rs.48.00 Crores) is held as at 31.03.2010 in respect of gross Non-performing Advances over and above the minimum provision prescribed by RBI with a view to strengthen the financial stability of the Bank.

2. (i) Under Inter-Branch reconciliation, initial matching of entries has been done upto 31.03.2010. Reconciliation of unmatched entries with the balance in Branch Adjustment account and transactions between Head Office and branches including branches inter-se is in progress. Further, in terms of RBI’s circular, segregation of debit and credit entries in Inter Branch Account pertaining to the period upto 30.09.2009 and remaining outstanding as on 31.03.2010 have resulted in net credit, hence no provision is required.

(ii) At some branches, preparation of details / balancing / reconciliation of accounts relating to Balances with Banks and NOSTRO Accounts are in progress.

Since substantial progress has been made in the above areas, the management is of the view that the impact of reconciliation, if any, on the accounts of the Bank will not be material.

3. The provision for income tax (including deferred tax) aggregating to Rs.1315.35 Crores (previous year Rs. 750.05 Crores) held is considered adequate by the Bank after taking into consideration various judicial decisions on disputed issues.

4. (i) Certain premises were revalued on the basis of the reports of the approved valuers during the year ended on 31.03.1997, 31.03.2005 and 31.03.2007 and upward revision amounting to Rs. 125.99 Crores (commercial and residential), Rs.370.08 Crores (commercial and residential) and Rs. 298.32 Crores (commercial) respectively had been credited to Revaluation Reserve. Depreciation on Revalued premises is worked out each year on its written down value. Additional depreciation of Rs.4.68 Crores (previous year Rs.4.93 Crores) due to revaluation has been transferred from Revaluation Reserve Account and shown in Miscellaneous Income under the head “Other Income” included in Schedule No. 14 item (vii).

(ii) Depreciation has been charged on composite cost of Land and Building, where cost of land is not available.

(iii)Premium on leasehold land has been amortized over the period of lease, based on cost or written down value, where original cost is not available.

(iv)For the following properties registration formalities are yet to be completed:

a. 2 residential properties purchased during the year 1990 & 1998 at Kolkata & Bhubaneshwar consisting of 29 & 10 flats respectively with total original cost of Rs.0.86 Crores (Previous year Rs.0.86 Crores).

b. 1 leasehold property at Anandlok, New Delhi with original cost amounting to Rs. 0.23 Crores (previous year Rs.0.31 Crores pertaining to 2 properties situated at Anand lok, New Delhi & Defence Colony, New Delhi).

5. (i) In respect of Investments of face value of Rs.0.44 Crore (Previous year Rs.0.44 Crore) the Bank is yet to receive scrips / certificates.

(ii) Total Investments made in shares, convertible debentures and units of equity linked mutual fund / venture capital funds and also advances against shares aggregated to Rs.849.82 Crores (Previous year Rs. 657.24 Crores).

(iii) As per RBI guidelines, an amount of Rs.9.78 Crores (Previous Year Rs.228.70 Crores) being an amount equivalent to post Tax profit on sale of ‘Held to Maturity’ category securities is transferred to ‘Capital Reserve Account’.

(iv)In respect of ‘Held to Maturity’ category as stated in significant Accounting Policy No. 3 (iii), the excess of acquisition cost over the face value of the security amortized during the year amounts to Rs.112.32 Crores (Previous year Rs.91.30 Crores) has been netted off from Income on Investment shown under the head “Interest Earned ” of Profit and Loss Account in terms of RBI guidelines.

6. The Bank has not made any financing for margin trading during the year and also not securitised any assets.

7. During the year, Bank has increased its authorized capital from Rs. 1,500 Crores to Rs. 3,000 Crores. This has been pursuant to Govt. of India notification dated 10th November, 2009 enhancing the authorized capital of certain nationalized banks. Pursuant to the enhancement, the current authorized capital includes 150 Crores of equity shares of Rs. 10/- each and the classification of the balance authorized capital will be determined by the management in due course.

8. During the year, the bank has raised unsecured subordinated debt Tier II Series IX Bond of Rs. 450.00 Crores @ 8.45% for a period of 120 months i.e. maturing on 4th August 2019, Upper Tier II Series Bonds of Rs. 500.00 Crores @ 8.58% for a period of 15 years i.e. maturing on 18th December 2024 with Call Option after 10 years and Innovative Perpetual Debt Instrument (IPDI) Series II of Rs. 150.00 Crores @ 9.08%. Previous year Bank raised Unsecured Upper Tier II Series I Bond to the tune of Rs. 500 Crores @ 9.28%, Subordinated Debt Series VIII Bond of Rs. 400.00 Crore @9.23% and Innovative Perpetual Debt Instrument (IPDI) Series I of Rs.150.00 Crore @ 9.20%.

9. Advances include Rs. NIL Crores (Previous year Rs. 480.00 Crores) on account of Inter Bank Participation Certificates.

10.3.2 Exchange Traded Interest Rate Derivatives: —-Nil—

10.3.3 Disclosures on risk exposure in derivatives

Qualitative Disclosure:

Operation in the Treasury Branch of the Bank are segregated in three functional areas i.e. Front Office, Mid Office and Back Office, which are provided with trained officer with defined responsibilities and back up roles.

The Treasury Policy & Derivative policy of the Bank lays down the type of financial derivatives instruments, scope of usages, approval process as also the limits like the open position limits, deal size limits and stop loss limits besides delegated power for trading in the approved instruments. The policy also allows purchase / sale of call or put options to hedge cross currency proprietary trading positions and to offer derivative products to its customer subject to back to back covering by the Bank.

The Front Office takes positions and executes the deals while the Mid Office monitors the transactions in the trading book and deviations of excesses, if any, are brought to the notice of higher authorities. The Mid office also measures the financial risk for transactions on a daily basis through measurement tools such as MTM, VAR, Convexity and modified durations. The figures are reported to Risk Management division, which appraises the risk profile to the Assets and Liability Management committee. The Back office settles all the deals with counter parties.

Interest Rate Swaps which hedge interest bearing assets or liabilities are accounted for on accrual basis except the Swaps designated with an asset or liability that is carried at market value or lower of cost or market value in the financial statements. Gain or Losses on the termination of Swaps are recognised over the shorter of the remaining contractual life of the Swap or the remaining life of the assets/liabilities. Trading Swap transactions are marked to market with changes recorded in the financial statements. The counterparties to the transactions are Banks and corporate entities and deals undertaken are within the approved exposure limits only. The guidelines issued by RBI, FEDAI & FIMMDA from time to time for recognition of Income, Premium and Discount are followed.

10.4.2 Provision Coverage Ratio

The provision coverage ratio of the bank in terms of RBI guidelines as on 31.03.2010 is 78.95%

10.4.5 Details of non-performing financial assets purchased/ sold:

A. Non-performing financial assets purchased : Nil

14.8 Off-balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms) : NIL

11. Income from Bancassurance business during the year:

Commission received on life & non-life insurance business: Rs. 16.49 Crores

12. Compliance with Accounting Standards

The Bank has complied with the following Accounting Standards (AS) issued by the Institute of Chartered Accountants of India and the following disclosures are made in accordance with the provisions of such Accounting Standards:

12.1 Income items recognised on cash basis were either not material or did not require disclosure under AS 9 on Revenue Recognition.

12.2 The Bank has adopted Accounting Standard 15(R)- Employee Benefits, issued by Institute of Chartered Accountants of India, for recognition of its liabilities in respect of employee benefits, viz, Pension (New), Pension (Old), Gratuity, Leave Encashment, LFC and Sick Leave w.e.f. 1st April 2007. Bank’s liabilities on account of these funded/ non-funded employee benefits are recognised on the basis of acturial valuation carried out by approved Actuary as per (a) Principles laid down in AS 15 (R) issued by the Institute of Chartered Accountants of India, and (b) guidelines GN 26 issued by Institutes of actuaries of India.

12.3 Pending finalisation of wage revision, a provision of Rs. 153 Crores during the financial year 2009-10 (previous year Rs. 122 Crores) towards estimated liability of wage arrears has been made. Further, as a prudent policy, an ad-hoc provision of Rs. 47 Crore has been made towards pension liability.

12.4 Segment Reporting – Accounting Standard (AS) 17 “Segment Reporting” Segment information is given in the Consolidated Financial Statements in terms of para 4 of the Standard.

b) Subsidiary:

i) All Bank Finance Limited (wholly owned)

c) Joint Venture:

i) ASREC(India) Ltd.

d) Associates:

i) Allahabad U.P. Gramin Bank*

ii) Sharda Gramin Bank

iii) Universal Sompo General Insurance Company Limited.

*During the financial year 2009-10, two Regional Rural Banks namely Lucknow Kshetriya Gramin Bank & Triveni Kshetriya Gramin Bank amalgamated to form a new RRB named “Allahabad U P Gramin Bank”.

The Bank is holding 35% shares of the above Associated Regional Rural Banks and 30% shares of Universal Sompo General Insurance Company limited.

The transactions with the subsidiaries and Regional Rural Banks have not been disclosed in view of para 9 of the (AS)-18 Related Party Disclosure, which exempts state controlled enterprises from making any disclosure pertaining to their transactions with other related parties which are also state controlled.

12.5 Lease Disclosure:

A) The Bank has various operating leases for office / residential facilities. Disclosures in this regard are as under:

i) Total of future minimum lease payments under non- cancellable operating leases for each of the following periods:

12.6 A substantial portion of the bank’s assets comprise of ‘financial assets’ to which Accounting Standard (AS) 28 ‘Impairment of Assets’ is not applicable. In the opinion of the management, there is no impair- ment of other assets of the Bank as at 31.03.2010 to any material extent requiring recognition in terms of the said standard.

12.7 Disclosure in terms of Accounting Standard (AS) 29 on “Provisions, Contingent Liabilities and Contingent Assets”:

13. Letters of Comfort (LoC’s) issued during the Current Financial Year: Rs.1294.90 Crores (Previous Year: 3689.17 Crores).

14. Contingent Liabilities: Such liabilities as mentioned at Sl. No.(I) to (VI) in schedule 12 of Balance Sheet are dependent upon the outcome of court / arbitration / out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligations, devolvement and raising of demand by concerned parties respectively.

15. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advance) Rs.38.67 Crores (Previous Year Rs. 61.93 Crores).

16. Sector wise break up of provision held under non- performing advances is deducted on estimated basis from gross advances to arrive at the balance of net advances as stated in the Schedule-9 of the Balance Sheet.

17. Under Agriculture Debt Relief Scheme, the last date for payment of 75% of the overdue portion by the farmers has been extended up to 30.06.2010. The eligible other farmers are allowed to repay the amount in one or more instalments up to 30.06.2010. Hence, the loan accounts of other farmers, who are eligible under the scheme, have been considered as standard assets.

18. Figures of previous year have been regrouped or reclassified wherever considered necessary.

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