DIRECTORS' REPORT

The Directors have pleasure in presenting the Annual Report together with audited financial statements of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS
During the year under review, your company earned profit after tax of 7,14,92,466/- as against 9,41,70,706/- in the previous year. The summary of the financial results is as follows:

DIVIDEND

Directors do not recommend any dividend for the year ended 31st March, 2010.

OPERATIONS

Primary markets remained dull for major part of the year. However, towards the fag end of the year, there were signs of revival. On the other hand Debt markets remained more active with many large size issues by Public Sector Undertakings and Banks. Tax free bonds were also popular amongst institutional investors. On the back drop of this scenario, your company focused on Debt syndication activities and earned revenue of 70, 00,000/- .

Your company reported investment income of 3,42,16,288/- which is largely attributed to interest on fixed income securities and dividends. Your company also resorted to profit booking amounting to 1,63,23,204/- by disposed off equity investments taking advantage of favourable market conditions.

Brokerage income (MF units) constituted substantial portion of the revenue of the company viz, 5,81,60,085/-.

During the year your company obtained registration for 'Debenture Trusteeship' activities from SEBI in February 2010. Your company will endeavor to generate revenue from the new activity.

OUTLOOK FOR THE CURRENT YEAR

Favourable stock market conditions and the expectations of overall economic growth across sectors are likely to provide opportunity to generate much higher revenues from the fee based activities of your company. With the momentum for both equity and debt market segment to continue, your company will play active role towards Issue Management, Debt Syndication and newly started Trusteeship activities.

COMPLIANCE OF SEBI GUIDELINES

Your company has complied with various guidelines, directives, circulars issued by SEBI pertaining to Merchant Banking and other applicable Capital Market related activities.

PARTICULARS OF EMPLOYEES

None of the employees are covered under section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of Employees) Rules 1975.

COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS RULES 1988 CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOINGS

The company has nothing to report under this head.

BOARD OF DIRECTORS

Consequent upon Shri K. R. Kamath taking over as CMD of Punjab National Bank, Shri J.P. Dua, CMD Allahabad Bank assumed charge of AllBank Finance Limited as its Chairman. Further during the year Shri K. K. Agarwal, Executive Director also retired on 31.07.2009 pursuant to his retirement from the services of Allahabad Bank.

Shri A. R. Nagappan, Shri D. P. Khullar and Dr. Satyadev Singh, Independent Directors on the Board, having completed the term of three years, retired on 30th July, 2009. The Board placed on record its appreciation for the services rendered by Shri K. R. Kamath, Shri A. R. Nagappan, Shri D. P. Khullar and Dr. Satyadev Singh and Shri K.K. Agarwal during their tenure as Directors of the Company.

Shri P. K. Gupta, Shri R. G. Sharma and Shri D. Sengupta were appointed as Independent Director w.e.f. 30th July, 2009. Shri D. Sarkar, newly appointed Executive Director of Allahabad Bank was inducted on the Board w.e.f. 23rd February, 2010.

No Director of the Company has been disqualified under section 274(i)(g) of the Companies Act, 1956.

CORPORATE GOVERNANCE

(a) Board Meetings:

During the year 2009-10 five Board meetings were held and attendance by Board members:

(b) Audit Committee:

Your Company constituted Audit Committee of the members of the Board viz. Shri P. K. Gupta, Shri R. G. Sharma and Shri A. B. Bhattacharjee. Three meetings were held during the year. The scope of Audit Committee is as per Section 292A of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

• In the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards had been followed along with proper explanation relating to departures.
• The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the Company for the year under review.
• The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
• The Directors had prepared the accounts for the financial year ended 31st March 2010 on a going concern basis.

AUDITORS

The provisions of Section 619(2) of the Companies Act, 1956 being applicable to the Company, the Comptroller and Auditor General of India, New Delhi has appointed M/s. De & Bose, Chartered Accountants, Kolkata as Statutory Auditors of the Company for the year 2009-10.

MANAGEMENT'S REPLY TO THE AUDITORS REPORT

The Auditors made no specific qualification during the course of their audit.

GENERAL

Your Directors wish to place on record their gratitude to the Ministry of Finance, Government of India, SEBI, Comptroller and Auditor General of India for their valuable guidance.

Your Directors also wish to place on record their thanks to the Bankers of the Company and their appreciation for the assistance, support and guidance received from Allahabad Bank and its Employees.

Your Directors express their appreciation for the contribution made by the Company's Employees.

For on and behalf of the Board of Directors