ALLAHABAD BANK Notes to Accounts

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, Vostro 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, 2017, in the opinion of the management will not be significant.

3. 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, 31.03.2007 and 31.03.2016 upward revision amounting to Rs.125.99 Crore (commercial and residential), Rs.370.08 Crore (commercial and residential), Rs.298.32 Crore (commercial) and Rs.1802.40 crore (Residential and 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.47.56 Crore (previous year Rs.3.44 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).

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

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

6. Registration formalities are yet to be completed for the following properties:

7. 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.

8. Property at Hyderabad costing Rs.1.61 crore, where Clearance is pending before ULC authority and at Chennai costing Rs.2.32 crore, where interim stay has been granted by DRAT.

9. 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.

10. Other Assets include intangible Assets, details of which are as under;

11. 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.

12. 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.1313.58 Crore (Previous year Rs.807.56 Crore).

13. During the year the Bank sold certain securities under Held to Maturity category and earned profit of Rs.223.30 Crore. Due to net loss during the year, no appropriation has been made to ''''Capital Reserve Account-Investment'''' (Previous Year NIL).

14. 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.56.51 Crore (Previous year Rs.58.89 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.

15. In terms of circular No. FMRD.DIRD.10/14.03.002/ 2015-16 dated 19th May 2016, Repo and Reverse Repo transactions with RBI under LAF/MSF are accounted for as borrowing and lending respectively as against the earlier practice of including same under investments. Previous period figures have been regrouped and reclassified to conform to current period''''s classification.

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

17. Disclosure in terms of RBI guidelines:

18. Capital

In terms of RBI Circulars DBR.No.BPBC.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.BPBC.No.44/ 08.12.015/2015-16 dated October 8, 2015 and DBR. No. BPBC/83/21.06.201/2015-16 dated 1st March 2016, DBR.No.BPBC.6/21.06.001/2016-17 dated 25th August 2016, DBR.BP.BC.No.20/21.06.001/2016-17 dated 20th October 2016 and DBR.BP.BC.No.50/ 21.06.201/2016-17 dated 2nd February 2017, the details of Capital Adequacy Ratio computed under Basel-III regulations are as under;

*In addition a sum of Rs.418.00 crore (Rupees Four hundred eighteen crore) has also been received from Govt. of India on 31.03.2017 towards capital infusion. The Bank is maintaining the same as "Share Application Money Pending Allotment" as on 31.03.2017. The Reserve Bank of India vide their letter DBR. No. BP 11542/ 21.01.002/ 2016-17 dated 30.03.2017 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, 2017. Accordingly, Bank has included the entire amount of capital infusion i.e. Rs.418.00 crore (Rupees Four hundred eighteen crore) received from Government of India on 31.03.2017, in its CET 1 as on 31.03.2017.

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.

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.13135.10 crore from HTM to AFS category during the first quarter of FY 2016-17 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.

19. Exchange Traded Interest Rate Derivatives: NIL

(Previous year: NIL)

20. 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.

21. Penalties imposed by RBI:

During the Financial Year 2016-17, 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.2,00,00,000/-(Rupees two crore only) on 26.07.2016, imposed by Reserve Bank of India vide their order dated 15.07.2016 for lapses in monitoring of transactions and internal control in the case of advance import remittance irregularities in eight current accounts maintained in the Bank.

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

23. Income items recognised 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.

24. 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.

25.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

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

27. Guidelines GN 26 issued by The Institute of Actuaries of India.

28. 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.

29. 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.

30. Subsidiary:

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

32. Joint Venture:

33. Universal Sompo General Insurance Company Limited.

34. 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 )

35. 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).

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

37.. Lease Disclosure-Accounting Standard (AS) 19

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

39. 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 31.03.2017.

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

41. Lease payments recognized in the statement of profit and loss for the period: Rs.188.74 Crore (previous year Rs.158.92 Crore)

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

43. Financial Lease:

Bank is not having any assets under Financial Lease.

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

During the year, an amount of Rs.679.18 Crore has been credited (Previous year Rs.925.47 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 2016-17, hence no amount was transferred to Special Reserve under section 36 (1 )(viii) of the Income Tax Act, 1961.

The Bank has recognized the Deferred Tax Assets Rs.782.23 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, 2017.

Income computation and Disclosure Standards (ICDS) as notified u/s 145(2) of the Income Tax Act, 1961 on 29th September 2016, are applicable for the financial year ended on 3131 March, 2017. Bank has accordingly made tax provisions for the financial year 2016-17.

45. Discontinuing Operations: Accounting Standard (AS) 24

Disclosure requirement is not applicable for the year under review.

46. 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 31.03.2017 to any material extent requiring recognition in terms of the said standard.

47. Other Accounting Standards: Accounting Standard (AS) 6

Break up of total depreciation for the year ended March, 2017 for each class of assets.

48. 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. Overseas branch is treated as Non-integral operations and domestic operations in foreign exchange are treated as Integral operations.

Transactions in respect of Non-Integral operations

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

50. 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.

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

52. 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

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

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

55. 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.

5.6 Letters of Comfort (LoCs) issued by banks:

During the current financial year, the Bank has issued 1771 number of LoCs amounting to Rs.6410.74 Crore (previous year 1640 number of LoCs amounting to Rs.5140.99 Crore) for providing Buyers Credit facility. The outstanding LoCs as on 31.03.2017 amount to Rs.2418.54 crore (previous year Rs.2473.33 Crore). In Bank''''s assessment, no financial impact is likely to arise in this respect.

57. Provisioning Coverage Ratio (PCR):

The provision coverage ratio as on 31.03.2017: 50.11 % (Previous Year 48.22%)

58. Income from Bancassurance business during the year:

Commission received on life & non-life insurance business: Rs.21.44 Crore (previous year Rs.21.62 Crore).

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

60. 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)

61. 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.

62. Intra-Group Exposures:

Bank''''s exposure to the group entities that are owned by the bank fully or partly are as under;

63. Transfers to Depositors Education and Awareness Fund (DEAF)

Unclaimed liabilities where amount due has been transferred to DEAF during the year are as under;

64. 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.9.04 crore up to 31st March, 2017 (previous year Rs.12.68 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.

65. Liquidity Coverage Ratio:

Liquidity Coverage Ratio (LCR) related information for the year ending March 31, 2017 is given as under;

66. Liquidity Coverage Ratio (LCR) Disclosure:

Liquidity Coverage Ratio(LCR)-covering all the four quarters of the FY 2016-17 for the year ended 31st March, 2017 is given as under;

67 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 which increased to 70% from 1st January 2016 and has risen to 80% since 1st Jan, 2017. It 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 increase from last year is due to the availability of surplus liquid funds with the Bank post demonetization. HQLAs of the Bank also increased during the year on account of RBI''''s decision to allow banks to reckon government securities held by them up to an additional 1% of their NDTL under Facility to avail Liquidity for Liquidity Coverage Ratio (FALLCR) within the mandatory SLR requirement as Level I HQLA, from July 2016.

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); as also surplus funds lent in the overnight/term money market;

- 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 has Nil 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.

Liquidity Management:

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-to day 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.

68. 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.

69. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance) is Rs.120.48 Crore (Previous Year Rs.116.88 Crore).

70. 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.

71. Priority Sector Advances include Rs.450.00 Crore (previous year Rs.450.00 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.450.00 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.

72. 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 are being made available on Bank''''s website

73. The Bank has on 16.05.2016 issued and allotted 10,92,29,064 new equity shares of face value of Rs.10.00 on preferential basis to Government of India(President of India) for cash at an issue price of Rs.63.17 per equity share including premium of Rs.53.17 per equity share against their capital infusion of Rs.690.00 crore for FY2015-16. The said capital infusion fund was received by the Bank on 30.03.2016 and the same was kept as "Share Application Money pending allotment" as on 31.03.2016.

74. The Bank has issued and allotted 42,30,226 equity shares of face value of Rs.10.00 at an issue price of Rs.78.01 including a premium of Rs.68.01 per equity share to Government of India (President of India) on preferential basis on 17.10.2016 for a total consideration of Rs.33 Crore. The Bank has also issued and allotted 1,64,26,392 equity shares of face value of Rs.10.00 at an issue price of Rs. 78.01 including a premium of Rs.68.01 per equity share to Life Insurance Corporation of India (LIC) on 24.10.2016 for a total consideration of Rs.128.14 Crore. As a result, the shareholding of Govt. of India (President of India) has increased from 61.38% as on 31.03.2016 to 65.92% as on 31.03.2017. 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.

75. During the financial year 2016-17, sixty three (63) number of fraud cases were reported involving a total amount of Rs.512.72 crore. Bank has recovered a total amount of Rs.4.82 crore and made a total provision of Rs.261.48 crore during the year and the quantum of unamortized provision debited from ''''Other Reserves'''' as at the end of year amounting to Rs.246.42 crore in pursuance to RBI circulars DBR.No.BP.BC.83/21.04.048/2014-15 dated April 1, 2015 and DBR.No. BP.BC.92/21.04.048/2015-16 dated April 18, 2016 as the provision for fraud can be amortized over a period of four quarters.

76. During the financial year 2016-17, the Bank has raised BASEL-III compliant Tier 2 Capital aggregating to Rs.1000 crore and BASEL-III compliant Additional Tier 1 Capital aggregating to Rs.300 crore through private placement in the nature of debentures and has redeemed its Tier 2 Bonds aggregating to Rs.561.90 crore on maturity.

77. 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 2008-09 have been transferred to Investors Education & Protection Fund (IEPF) established by the Central Government.

78. During the FY 2016-17, Bank has assigned financial assets having a net book value of Rs.52.74 crore to Assets Reconstruction Companies for a consideration of Rs.104.13 crore. These 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.

79. Pursuant to RBI guidelines the Bank has recalculated the diminution in the fair value of restructured advances and has written back provision of Rs.136.46 crore during the year 2016-17.

80. In compliance with RBI directives, accounts shown under Annex III of Asset Quality Review (AQR) wherein restructuring was failed due to performance issues or non fulfillment of certain conditions and necessary provisions was held in those accounts in terms of RBI directives, have been reviewed as on 31st March 2017 and has now being classified and provision has been made as per the IRAC norms.

81. Pursuant to RBI Circular No. DBR.No.BP.BC.34/ 21.04.132/2016-17 dated 10.11.2016, "Schemes for Stressed Assets-Revisions", in respect of Standard Facilities under Strategic Debt Restructuring (SDR), the Bank has not recognized unrealized interest Rs.190.43 crore on accrual basis for the year ending 31st March 2017.

82. In terms of RBI circular FIDD.CO.Plan.BC.23/04.09..01/ 2015-16 dated April 7, 2016 Bank has sold 5063 units for a consideration of Rs.1265.75 crore including premium of Rs.10.98 crore under Priority Sector Lending Certificates SF/MF category for the period ended March 31, 2017.

83. 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.

84. 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.

85. Figures of previous year have been regrouped or reclassified wherever considered necessary to make them comparable with that figures of the current year.

1. Contingent liabilities not provided for :

a) Disputed Income Tax liability in respect of matters pending before various Appellate authorities where the Company expects to succeed.

The change in the figure of the tax liability is due to order passed against or in favour of ABFL, partly deposited and aggrieved, preferred appeal.

2. A writ Petition has been filed by some employees of the Company in Delhi High Court for Salary revision. The company is contesting the case and pending quantification of the alleged claim no provision has been made.

A complaint was filed by a workman with Asst Labour Commissioner, Mumbai, claiming DA & CCA as paid to the other employees from his date of joining. The conciliation proceedings failed as ABFL did not accept the demand raised by the workman and therefore, the Ministry of Labour & Employment, Government of India, referred the case to The Central Government Industrial Tribunal No.2, Mumbai, for adjudication. The company is contesting the case and in the absence of quantification of the alleged claim, no provision is made.

3. The Company had acted as lead manager for the IPO issue of Austral Coke & Projects Limited (name changed to Greenearth Resources and Projects Ltd. w.e.f. 21.01.2010) in August, 2008. Another company namely, Gujrat NRE Coke Ltd. filed civil suits against the Austral Coke and its promoters and also made the Merchant Bankers, Independent directors, Auditors and Solicitors as party to the suit. AllBank Finance had filed a written statement on 04.08.2009 in response to the said civil suit and since then the matter is pending for adjudication. There is no quantification of the claim for compensation payable, if any by, AllBank Finance Ltd.

4. As per the notification dated 30.03.2017 of Ministry of Company Affairs, the disclosure regarding details of Specified Bank Notes (SBN) held and transacted during the period 08.11.2016 to 30.12.2016 is appended:

5. Unadjusted Advance income tax and the related provisions in the books for various years are given as under which are pending at various stages of Assessments & Appeal.

6. As the company''''s business activity falls within a single primary business segment viz. dealing in Capital Markets and allied activities and in a single geographical segment, the disclosure requirements of Accounting Standard ( AS - 17 ) " Segment Reporting " issued by The Institute of Chartered Accountants of India are not applicable.

7. Deferred Tax Asset and Liability arising on account of timing differences and which are capable of reversal in subsequent periods has been recognized using the tax rates and laws that have been enacted or substantively enacted as of Balance sheet date i.e. 31.3.2017. As per Accounting Standard 22, Deferred Tax Asset is not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset will be realized. As the deferred tax liability is less that deferred tax asset, there is no effect in the books of accounts on account of deferred tax asset/ liability. The computation of deferred tax assets & liabilities are as follows:-

8. To the extent identified from the information available from suppliers of goods and services, there are no macro and small enterprises being a supplier as defined under Micro, Small and Medium enterprises Development Act, 2006.

9. There is no impairment loss in terms of the Accounting Standard ( AS 28 ) - " Impairment of Assets" issued by The Institute of Chartered Accountants of India.

10. Related Party disclosures as required in terms of Accounting standard ( AS 18 ) - " Related Party Disclosures" issued by the Institute of Chartered Accountants of India are as under :

11. In usual course of business, it came to the knowledge of AllBank Finance Ltd."ABFL" (Erstwhile Allahabad Bank Nominees Ltd. - "ABNL") that there are shares of different companies standing in the name of ABNL but are not part of the Company''''s investment portfolios. In this regard, the Board directed to approach the respective RTAs or the relevant Companies for issuance of duplicate shares in the name of ABNL and to change the name of ownership from ABNL to ABFL and their dematerlisation in the applicable cases. In this regard, for issuance of duplicate shares, all the required procedures were adopted and all these duplicate shares which were not part of ABFL investments were kept in a separate demat account. Further with the directions of the Board, the management approached the respective RTAs and/or the concerned Companies to ascertain the ownership of these shares. For all those shares where the RTAs/the Companies confirmed that ABNL is the original allottee, the Board directed to take the opinion of the practicing Chartered Accountant (CA) and the Company Secretary (CS) for taking the shares in the books of ABFL. In 2015-16, for shares of 28 companies, ABFL received confirmation from the respective RTAs / Companies that ABNL was the original allottee. Accordingly, based on the opinion of the practicing CA & CS, shares were taken in the books of ABFL and these became the part of the investment portfolios of the Company. For shares of other Companies, similar exercise was carried out in 2016-17 and in the case of 39 Companies, it was confirmed by their RTAs or the Companies that ABNL is the original allottee of their shares and based on the opinion of the practicing CA & CS, shares of these 39 Companies were taken in the books of ABFL at "face value" or "market value" whichever is lower and these also became the part of the investment portfolios of the Company. For the remaining shares of 49 Companies in demat form and

12. Companies in physical form, on the basis of the reply received from the respective RTAs, the Company believes that these shares were mostly acquired between 1953 and 1992 i.e. for more than 25 years ago and were not recorded. As such, the shares were though held in the name of the Company but were not part of its investment schedule. In the light of the above and to preserve the asset of the company, the matter was examined by the Board of ABFL and having taken the legal opinion on the matter shares of these companies were also taken in the books of ABFL at face value by debiting the investment portfolios and crediting the Other Income Account.

13. The disclosures required under Accounting Standard

14. "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below :

Defined Contribution Plan

Employer''''s Contribution to Provident Fund: Rs. 2,12,894/-

(Previous Year - Rs. 2,10,834 /-)

Defined Benefit Plan

The present value of obligation relating to gratuity and leave is determined based on actuarial valuation using the Projected Unit Credit Method.

15. Reconciliation of opening and closing balances of Defined Benefit Obligation Gratuity.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at

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