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.