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Audited Financial Results for year ended 31st March, 2011

NOTES FORMING PART OF AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31ST MARCH 2011

1. There has been no change in the accounting policies adopted during the quarter / year ended as at 31.03.2011 as compared to those followed in the preceding financial year 2009-10.

2. The above results have been approved and taken on record by the Board of Directors of Bank at the meeting held on 02.05.2011.

3. The working results for the year ended 31.03.2011 have been arrived at after considering provision for Non Performing Assets, Standard Assets, Investment Depreciation etc as per Prudential norms issued by Reserve Bank of India, and other usual & necessary provisions.

4. The prudential floating provision of Rs. 48.00 crore (Previous year Rs. 48.00 crore) 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 strengthening the financial stability of the Bank.

5. In accordance with RBI circular No DBOD.BP.BC.80/21.04.018/2010-11 dated 09.02.2011 an amount of Rs 7.93 crore has been charged to Profit & Loss Account for the year to wards the additional Gratuity fund requirement of Rs 39.63 crore arising on account of enhancement of Gratuity Ceiling from Rs 3.50 lacs to Rs 10 lacs,is to be amortized over a period of five years from this year. Remaining unrecognized Gratuity Liability of Rs 31.70 crore is carried forward.

6. In terms of RBI guidelines additional liabilities of existing employees on account of 2nd option of pension is to be amortized over 5 years beginning from the year ending March,31, 2011. In accordance with the provision of aforesaid RBI circular one fifth of the total additional pension fund liability of Rs 708.07 crores towards existing employees who exercised 2nd option amounting Rs 141.61 crore has been charged to Profit & Loss Account for the year and remaining unrecognized liability Rs566.46 crore is carried forward.

7. Reconciliation of unmatched entries with the balance in Branch adjustment account and transaction between Head Office and Branches including Branches inter-se, is in progress. 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. Further, Balancing/reconciliation of accounts relating to balances with Banks and Nostro Accounts are in progress.

   In view of substantial progress made in the above areas, Management is of the opinion that the impact of reconciliation, if any, on the accounts by the Bank will not be material.

8. The bank has allotted 29515418 nos of equity shares of Rs 10 each at a premium of Rs 217.00 per share amounting to Rs 670 crores approx on preferential allotment basis to Govt. of India (President of India) on 31.03.2011.

9. Status of Investor Complaints:

10. The Board of Directors have recommended dividend @ 60% on the equity share capital i.e. Rs.6 per equity share of face value of Rs10.00 each subject to approval by Govt. of India.

11. The Provision Coverage Ratio of the Bank is 75.67% against minimum regulatory requirement of 70%.

12. Statements of Assets and Liabilities is as under.

Rs. in lacs
Particulars	As on 31.03.2011		As on 31.03.2010 (Audited)
Capital and Liabilities:
Capital	47622		44670
Reserve and Surplus	803117		630625
Deposits	13188716		10605575
Borrowings	691818		543548
Other Liabilities	397363		345503
Total	15128636		12169921
Assets:
Cash and Balances with Reserve Bank of India	790093	718378
Balances with Bank and Money at Call and Short Notice	312645	198445
Investments	4324706	3842862
Advances	9362489	7160487
Fixed Assets	114823	111827
Other Assets	223880	137922
Total	15128636	12169921

13. Corresponding previous period/quarter ended figures have been regrouped/reclassified, wherever necessary.

AUDITORS’ REPORT

1. We have audited the attached Balance Sheet of ALLAHABAD BANK as at 31st March 2011, the Profit and Loss Account and the cash flow statement for the year ended on that date annexed thereto. Incorporated in the said financial statements are the accounts of :

   • 20 Branches and 46 Zonal offices audited by us ;

   • 1970 Branches audited by other auditors ;

   • One overseas branch audited by local auditor;

   • One unaudited representative office in China and 424 un-audited branches, the returns of which are certified by the Branch Managers. The unaudited branches account for 1.07% of advances, 4.37% of deposit, 0.64% of interest income and 0.35% of interest expenses.

2. The branches audited by us and those audited by other auditors have been selected by the Bank in accordance with the guidelines issued to the Bank by the Reserve Bank of India.
   
   
3. These financial statements are the responsibility of the Bank’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.
   
   
4. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall presentation of financial statement.
   
   
5. We believe that our audit provides a reasonable basis for our opinion.
   
   
6. Without qualifying our opinion, we draw attention to note no. 16.3.5 of schedule 18 which describes deferment of pension liability and gratuity liability due to increase in ceiling to the extent of Rs598.16 crores pursuant to the exemption granted by the Reserve Bank of India to the public sector Banks from application of the provisions of AS 15, Employees Benefits vide its circular No DBOD.BP.BC/80/21.04.018/2010-11 dated February 9th , 2011, on reopening of Pension option to employees of public sector Banks.
   
   
7. In our opinion and to the best of our information and according to the explanations given to us and as shown by the books of the Bank:
   
   
   • The Balance Sheet read with the Significant Accounting Policies and Notes thereon, is a full and fair Balance Sheet containing all the necessary particulars and is properly drawn up so as to exhibit a true and fair view of the state of affairs of the Bank as at 31st March 2011 in conformity with accounting principles generally accepted in India.
     
     
   • The Profit and Loss Account read with Significant Accounting Policies and Notes thereon shows a true balance of Profit for the year ended on that date in conformity with accounting principles generally accepted in India.
     
     
   • The Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.
     
     
8. The Balance Sheet and the Profit and Loss Account have been drawn up in Form ‘A’ and ‘B’ respectively of the Third Schedule to the Banking Regulation Act, 1949.
   
   
9. Subject to the limitations of the audit indicated in paragraph 1 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and also subject to the limitations of disclosure required therein and subject to Notes No.2 (i), 2(ii) & 2(iii) (Schedule 18) regarding balancing / reconciliation of unmatched entries in inter branch accounts and balancing/ reconciliation of Balances with Banks and NOSTRO accounts;

We report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit and have found the same to be satisfactory.

(b)The transactions of the Bank, which have come to our notice, have been within the powers of the Bank.

(c) The returns received from the Offices and Branches of the Bank have been found adequate for the purpose of our audit.

10. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards.

SEGMENT-WISE REVENUE, RESULTS AND CAPITAL EMPLOYED
FOR THE QUARTER AND YEAR ENDED 31.03.2011

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