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रजिस्ट्री सं. डीएल—(एन)-04/0007/2003—05 REGISTERED No. DL—(N)-04/0007/2003—05

साप्ताहिक/WEEKLY

प्राधिकार से प्रकाशित

PUBLISHED BY AUTHORITY

सं. 33] नई दिल्ली, शनिवार, अगस्त 13—अगस्त 19, 2016 (श्रावण 22, 1938)

No. 33] NEW DELHI, SATURDAY, AUGUST 13—AUGUST 19, 2016 (SRAVANA 22, 1938)

इस भाग में भिन्न पृष्ठ संख्या दी जाती है जिससे कि यह अलग संकलन के रूप में रखा जा सके

(Separate paging is given to this Part in order that it may be filed as a separate compilation)

भाग III—खण्ड 4

[PART III—SECTION 4]

[सांविधिक निकायों द्वारा जारी की गई विविध अधिसूचनाएं जिसमें कि अधिसूचनाएं, आदेश, विज्ञाापन और सूचनाएं

सम्मिलित ह]

[Miscellaneous Notifications including Notifications, Orders, Advertisements and Notices issued by

Statutory Bodies]

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1—¹⁹⁹ GI/2016

(255)256 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 257 258 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 259 `260 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 261 `262 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 263 `

`264 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 265 `

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`266 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 267 `268 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 269 ` `270 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 273 `274 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 275 `276 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 277 `

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`278 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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` `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 279 `280 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 281

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'भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 283 284 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 285 `

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`286 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 ` `

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 287 `

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`288 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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'भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 289 ` `

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`290 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 ` `

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` `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 291 `

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`292 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 293 `

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`294 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 295

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`296 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 297 `

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`298 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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` `भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) भाग III—खण्ड 4] 299

*302 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 ()

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 303 `

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`304 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

:

50.6 :

`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 305 `

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`306 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 307 308 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 309 310 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 311 312 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 313 `

`314 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 315 316 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 317 `

`318 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 319 `

`320 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 321 322 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 323 `324 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 325 `326 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 327 `

`328 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 329 `

`330 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 331 332 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 333 334 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 335 `

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"336 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 337 `338 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 ) `

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 339 340 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 341 342 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 343 `344 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 ``

`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 345 ``

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``346 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 347 `

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`348 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `

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`भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 349 `350 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) 351 `352 भारत का राजपत्र, अगस्त 13, 2016 (श्रावण 22, 1938) [भाग III—खण्ड 4 PART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 353

RESERVE BANK OF INDIA

Mumbai-400001, the 24th June 2016

No. DBR.IBD.No. 16138/23.13.077/2015-16—In pursuance of sub-section (2) of Section 36 (A) of the Banking Regulation Act, 1949, the Reserve Bank of India hereby notifies that the KBC Bank N. V. has ceased to be a banking company within the meaning of the said Act.

N. S. VISHWANATHAN Executive Director

————————

Mumbai-400051, the 13th July 2016

No. DCBR.CO.No.LC- 06/08.01.205/2016-17—In pursuance of Section 36 A (2) of B R Act, 1949 (AACS) Reserve bank of India hereby notifies that Shri Yugprabhav Sahakari Bank Ltd., Vadodara (Gujarat) has ceased to be a co- operative bank within the meaning of this Act, and thereupon all the provisions of this Act applicable to such co-operative bank shall cease to apply to it, except as respects things done or omitted to be done or omitted to be done before such notice.

SUMA VARMA Principal Chief General Manager

NABARD

Annual Accounts

2015-16

INDEPENDENT AUDITORS' REPORT

To,

The Board of Directors of

National Bank for Agriculture and Rural Development

Report On the Standalone Financial Statements

We have audited the accompanying standalone financial statements of National Bank for Agriculture and Rural Development (the Bank), which comprise the Balance Sheet as at March 31, 2016, Profit and Loss Account and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Incorporated in these financial statements are the returns of 11 Regional Offices and 1 Training Centre visited by us for the purposes of audit and the same including Head Office account for 71.41% of advances, 99.74% of deposits and term money borrowings, 86.85% of interest income and 99.77% of interest expenses. These Offices and Training Centre have been selected in consultation with the Bank. We have not visited balance offices of the Bank i.e. 19 Regional Offices and 2 Training Centres and have reviewed their returns at the Head Office.

Management's Responsibility for the Standalone Financial Statements

Management is responsible for the preparation of these financial statements in accordance with the National Bank for Agriculture and Rural Development (Additional) General Regulations, 1984, that give a true and fair view of the financial position, financial performance, and cash flows of the bank. This responsibility also includes maintenance of adequate accounting records for safeguarding the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Bank's preparation of the financial statements that give a true and fair view354 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4 in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Bank has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

1. In our opinion, as shown by books of bank, and to the best of our information and according to the explanations given to us;

a. the Balance Sheet, read with the notes thereon, containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank as at March 31, 2016, in conformity with accounting principles generally accepted in India;

b. the Profit and Loss Account, read with the notes thereon shows a true balance of profit in conformity with accounting principles generally accepted in India, for the period ended on that date; and

c. the Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

The Balance Sheet and the Profit and Loss Account have been drawn up as per Schedule 'A' and Schedule 'B' of Chapter IV of National Bank for Agriculture and Rural Development (Additional) General Regulations, 1984.

As required by the National Bank for Agriculture and Rural Development (Additional) General Regulations, 1984, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the purposes of our audit.

b. The transactions of the Bank, which have come to our notice, have been within the powers of the Bank. c. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts and with the returns received from the regional offices and training centres not visited by us.

In our opinion, the aforesaid Standalone Financial Statements comply with the applicable Accounting Standards.

For Vyas & Vyas Chartered Accountants (Firm Registration No 000590C)

O.P.Vyas Partner (Membership No. 014081) Place : Mumbai Date : 23 May 2016PART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 355

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

BALANCE SHEET AS ON 31 MARCH 2016

(` in thousands)

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

BALANCE SHEET AS ON 31 MARCH 2016

(` in thousands)

Schedules referred to above form an integral part of accounts

As per our attached report of even date Vyas & Vyas Chartered Accountants FRN . 000590C

A K Sahoo Chief General Manager Accounts Department Mumbai : 23 May 2016

O P Vyas Partner M No. 014081 Mumbai Date : 23-May-16

Harsh Kumar Bhanwala R Amalorpavanathan H R Khan Anup Kumar Dash Chairman Deputy Managing Director Director Director

K Sayeed Ali Chief General Manager

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2016

(` in thousands)

Schedules referred to above form an integral part of accountsPART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 357

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

PROFIT AND LOSS APPROPRIATION ACCOUNT

(` in thousands)

Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts.

As per our attached report of even date Vyas & Vyas Chartered Accountants

A K Sahoo Chief General Manager Accounts Department

O P Vyas Partner Mumbai Date : 23-May-16 Mumbai : 23 May 2016

Harsh Kumar Bhanwala R Amalorpavanathan H R Khan Anup Kumar Dash Chairman Deputy Managing Director Director Director

K Sayeed Ali Chief General Manager358 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4 SCHEDULES TO BALANCE SHEET

Schedule 1 - Reserve Fund and Other Reserves

(` in thousands)

Schedule 2 - National Rural Credit Funds

(` in thousands)

Schedule 3 - Gifts, Grants, Donations and Benefactions

(` in thousands)

1. Refer Note B-1 of Schedule 18

2. NABARD is acting as banker/custodian/trustee on behalf of GOI/ RBI/Other entities and is holding the above funds, pending disbursement/ utilization in terms of respective schemes, on their behalf, to the extent of contribution made by them and accrued interest on unutilized balances , wherever applicable.

3. (i) includes ` 130.21 crore being the income tax paid

(ii) includes ` 241.82 crore being the income tax paidPART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 361

Schedule 4 - Government Schemes

(` in thousands)

1. Refer Note B-1 of Schedule 18

2. NABARD is acting as banker/custodian/trustee on behalf of GOI/ RBI/Other entities and is holding the above funds, pending disbursement/ utilization in terms of respective schemes, on their behalf, to the extent of contribution made by them and accrued interest on unutilized balances, wherever applicable.

Schedule 5 – Deposits

(` in thousands)

Schedule 6 - Bonds and Debentures

(` in thousands)

Schedule 7 - Borrowings

(` in thousands)

Out of the above, borrowings under CBLO are secured against Government Securities including Treasury Bills366 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4

Schedule 8 - Current Liabilities and Provisions

(` in thousands)

* included an amount of ` 32.12 crore towards mFDEF( refer Note B- 7 of Schedule 18)PART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 367

Schedule 9 - Cash and Bank Balances

(` in thousands)

Schedule 10 – Investments

(` in thousands)

All the above investments are made in India

@ The company is valued at Rs.1/-. The provision against the investment is shown under the head Provision against Non Performing Investments Schedule -9 ( Refer Note B-35 of Schedule 18)

Schedule 11 – Advances

(` in thousands)

Schedule 12 - Fixed Assets

(` in thousands)

Schedule 13 - Other Assets

(` in thousands)

Schedule 14 - Interest and Financial Charges

(` in thousands)

Schedule 15 A - Establishment and Other Expenses

(` in thousands)

Schedule 15 B - Expenditure on promotional activities

(` in thousands)

Schedule 16- Provisions

(` in thousands)

Schedule 17 - Commitments and Contingent Liabilities

(` in thousands)

Schedule 18

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS

FOR THE YEAR ENDED MARCH 31, 2016

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation:

The accounts are prepared on the historical cost convention and comply with all material aspects contained in the National Bank for Agriculture and Rural Development Act, 1981 and Regulations thereof, applicable Accounting Standards (AS) issued by the Institute of Chartered Accountants of India (ICAI) and regulatory norms prescribed by the Reserve Bank of India (RBI). Except otherwise mentioned, the accounting policies have been consistently applied by the National Bank for Agriculture and Rural Development (the Bank/NABARD) and are consistent with those used in the previous year.

2. Use of Estimates:

Preparation of financial statements in conformity with the Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of the operations for the reporting period. Although these estimates are based on the management's best knowledge, the actual results could differ for these estimates. Such differences are recognized in the year of outcome of such results.

3. Revenue recognition:

3.1 Income and expenditure are accounted on accrual basis, except the following, which are accounted on cash basis:

i) Interest on non-performing assets identified as per Reserve Bank of India (RBI) guidelines.

ii) Income by way of penal interest charged due to delayed receipt of loan dues or non–compliance with terms of loan.

iii) Service Charges on loans given out of various Funds.

iv) Expenses not exceeding `10,000 at each accounting unit, under a single head of expenditure.

3.2 Discount on Bonds and Commercial Papers issued are amortized over the tenure of Bonds and Commercial Papers.

Issue expenses relating to floatation of bonds are recognized as expenditure in the year of issue of Bonds.

3.3 Dividend on investments is accounted for, when the right to receive the dividend is established.

3.4 i) Income from Venture Capital funds is accounted on realization basis.

ii) Release of subsidy in which NABARD is acting as a pass through agency is accounted for on payment basis subject to availability of funds under the respective schemes.

3.5 Provision for Wealth Tax is made, in accordance with the provisions of Wealth Tax Act, 1957.

3.6 Recovery in non-performing assets (NPA) is appropriated in the following order:

i) penal interest

ii) cost & charges

iii) overdue interest and interest

iv) Principal

4. Fixed Assets and Depreciation

a) Fixed assets are stated at cost of acquisition, less accumulated depreciation and impairment losses, if any. The cost of assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Subsequent expenditure incurred on existing asset is capitalized, only when it increases the future benefit from the existing assets beyond its previously assessed level of performance.

b) Land includes freehold and leasehold land.

c) Premises include value of land, where segregated values are not readily available.

d) Depreciation on premises situated on freehold land is charged at 10% p.a., on written down value basis.

e) Depreciation on leasehold land and premises situated thereon is computed and charged at 5% on written down value basis or the amount derived by amortizing the premium/cost over the remaining period of leasehold land, on straight-line basis, whichever is higher.

f) Fixed Assets costing `1 lakh and less (except easily portable electronic assets such as laptops, mobile phones, etc.) are charged to the Profit and Loss Account in the year of acquisition. Easily portable electronic assets such as laptops, mobile phones, etc., are capitalized, if individual cost of the items is more than ` 10,000. All software costing `1 lakh each and less, purchased independently are charged to the Profit and Loss Account.

g) Depreciation on other fixed assets is charged over the estimated useful life of the assets ascertained by the management at the following rates on Straight Line Method basis:

h) Depreciation is charged for the full year, irrespective of the date of purchase of asset. No depreciation is charged in the year of sale.

i) Capital work in progress includes capital advances and is disclosed under Fixed Assets.

5. Investments

a) In accordance with the RBI guidelines, Investments are classified into "Held for Trading" (HFT), "Available for Sale" (AFS) and "Held to Maturity" (HTM) categories (hereinafter called "categories").

b) Securities that are held principally for resale within 90 days from the date of purchase are classified as "HFT". Investments that the Bank intends to hold till maturity are classified as "HTM". Securities which are not to be classified in the above categories are classified as "AFS".

c) Investments classified under Held to Maturity category are carried at acquisition cost, wherever cost is equivalent to face value or less. If cost is more than the face value, the premium is amortized over the period remaining to maturity. Provision for diminution, other than temporary, in the value of investments in subsidiaries and joint ventures under the category "HTM" is made, wherever necessary. Provision for diminution/ amortization, in value of such investments, is included under Current Liabilities and Provisions.

d) Profit on redemption of investment categorized under "HTM" is recognized in Profit & Loss A/c and then transferred to Reserve A/c.

e) Investments under "AFS" are marked to market, scrip-wise, at the rate, declared by Primary Dealers Association of India (PDAI), jointly with Fixed Income Money Market and Derivative Association of India (FIMMDA). Net depreciation, if any, is provided for investments in the category classified as "AFS" and appreciation is ignored. The book value of the individual scrip are not changed after the revaluation.

f) Investments under "HFT" are marked to market, scrip-wise, at the rate, declared by Primary Dealers Association of India (PDAI), jointly with Fixed Income Money Market and Derivative Association of India (FIMMDA). Depreciation/appreciation is recognized in the category for investments classified as "HFT". The book value of the individual scrip are changed after the revaluation.

g) Investments in subsidiaries, joint ventures and associates are classified as Held to Maturity.

h) Treasury Bills, Commercial Papers and Certificates of Deposits are valued at carrying cost.

i) Unquoted Shares are valued at breakup value, if the latest Audited Accounts of the investee companies are available, or at `1/- per Company as per RBI guideline.

j) Brokerage, commission, etc. paid in respect of investments including unlisted equities, at the time of acquisition, are charged to revenue.

k) Brokerage, paid on acquisition/disposal of equities traded on stock exchange is capitalized.

l) Broken period interest paid/received on debt investment is treated as interest expenses/ income and is excluded for cost/ sale consideration.

m) Transfer of a security between the categories is accounted for, at lower of the acquisition cost/book value/market value on the date of transfer and depreciation, if any, on such transfer, is fully provided for.

n) Amortization/Gain/Loss on Revaluation of Government Securities is charged to Profit and Loss Account.

o) Weighted average cost method has been followed for accounting for investments.

6. Advances and Provisions thereon

a) Advances are classified as per RBI guidelines. Provision for standard assets and non–performing assets is made in respect of identified advances, based on a periodic review and in conformity with the provisioning norms prescribed by RBI.

b) In case of restructuring/rescheduling of advances, the difference between the present value of future principal and interest as per the original agreement and the present value of future principal and interest as per the revised agreement is provided for.

c) Advances are stated net of provisions towards Non-performing Advances.

d) Provision for Non-Performing Loans in respect of loans granted out of funds are charged to the respective funds to the extent available.

7. Foreign Currency Transactions

As per Accounting Standard (AS-11) (Revised 2003) on Accounting for the Effects of Changes in Foreign Exchange Rates issued by the Institute of Chartered Accountants of India; following accounting treatment is given to foreign exchange transactions:

a) Assets and liabilities in foreign currency, are revalued at the exchange rate notified by Reserve Bank of India (using FEDAI rates till last year) as at the close of the year and disclosed as a contra item in the Balance Sheet (as off Balance Sheet item). The liability towards foreign currency borrowings is fully hedged and stated in the Balance Sheet at the contracted value (as off balance sheet item ) .

b) Income and Expenditure items are translated at the exchange rates prevailing on the date of the transaction.

8. Accounting for Foreign Exchange Contracts

a) Foreign Exchange Contracts are to hedge the repayment of foreign currency borrowings.

b) The foreign exchange contracts are revalued at the exchange rates notified by FEDAI at the year end. The resultant gain/loss on revaluation is recognised in the Profit & Loss Account under the head Gains/Loss on revaluation of Forward Exchange Contract Account. Premium/ discount are accounted over the life of the contract.

c) The Profit / Loss on cancellation and renewal of foreign exchange contracts are recognised in Profit and Loss Account under the head 'Profit / Loss on Foreign Currency Loan Account'.

9. Employee Benefits

All personnel transferred from RBI are considered as employees of the Bank and provisions for Employee Benefits are made accordingly. Actuarial valuation, wherever required, are carried out at each balance sheet date.

a) Short Term Employee Benefits:

The undiscounted amount of short-term employee benefits, which are expected to be paid in exchange for the services rendered by employees are recognised during the period when the employee renders the service.

b) Post Retirement Benefits:

i) Defined Contribution Plan

The Bank has a Provident Fund Scheme in respect of all eligible employees who joined the Bank on or before 31 December 2011. The scheme is managed by RBI. Contribution is recognized on accrual basis.

The Bank has introduced a New Pension Scheme (NPS) for all the officers/employees who have joined the services of the Bank on or after 01 January 2012. The Bank has adopted the "NPS- Corporate Sector Model", a defined contribution plan, as formulated by the Pension Fund Regulatory and Development Authority (PFRDA). Contribution to the Fund is made on accrual basis.

ii) Defined Benefit Plan

a. Provision for gratuity is made based on actuarial valuation, made at the end of each financial year based on the projected unit credit method in respect of all eligible employees. The scheme is funded by the Bank and is managed by a separate trust. Actuarial gain or loss are recognised in the Profit and Loss Account on accrual basis.

b. Provision for pension is made based on actuarial valuation, in respect of all eligible employees who joined the Bank on or before 31 December 2011. The scheme is funded by the Bank and is managed by a separate trust.

iii) Other Long Term benefits

All eligible employees of the bank are eligible for compensated absences. All the eligible employees are also eligible for post-retirement medical benefits. The cost of providing other long term benefits is determined using the projected unit credit method based on actuarial valuations being carried out at each balance sheet date. Actuarial gain or loss are recognised in the Profit and Loss Account on accrual basis.

10. Taxes on Income

a) Tax on income for the current period is determined on the basis of taxable income and tax credits computed, in accordance with the provisions of Income Tax Act, 1961 and based on expected outcome of assessments/ appeals.

b) Deferred tax is recognized, on timing difference, being the difference between taxable income and accounting income for the year and quantified, using the tax rates and laws that have been enacted or substantively enacted, as on Balance Sheet date.

c) Deferred tax assets relating to unabsorbed depreciation/business losses are recognised and carried forward to the extent that there is virtual certainty that sufficient future taxable income will be available against which, such deferred tax assets can be realized.

d) Tax paid/provided on taxable income earned by the funds are accounted as expenditure of respective funds.

11. Segment Reporting

a) Segment revenue includes interest and other income directly identifiable with / allocable to the segment.

b) Income, which relates to Bank as a whole and not allocable to segments is included under "Other Unallocable Bank income".

c) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. The expenses, which relate to the Bank as a whole and not allocable to segments, are included under "Other Unallocable Expenditure".

d) Segment Assets and Liabilities include those directly identifiable with the respective segments. Unallocable Assets and Liabilities include those that relate to the Bank as a whole and not allocable to any segment.

12. Impairment of Assets

a) As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine:

i) the provision for impairment loss, if any, required; or

ii) the reversal, if any, required for impairment loss recognized in the previous periods.

b) Impairment loss is recognized when the carrying amount of an asset exceeds recoverable amount.

13. Provisions, Contingent Liabilities and Contingent Assets

13.1 Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation if:

a) the Bank has a present obligation as a result of a past event;

b) a probable outflow of resources is expected to settle the obligation; and

c) the amount of the obligation can be reliably estimated.

13.2 Contingent liability is disclosed in the case of:

a) a possible obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a present obligation when no reliable estimate is possible, and

c) a possible obligation arising from past events where the probability of outflow of resources is remote.

13.3 Contingent assets are neither recognized, nor disclosed.

13.4 Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

14. Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank, cash in hand, demand deposits with banks and other short-term investments with an original maturity of three months or less.

B. NOTES FORMING PART OF THE ACCOUNTS

1. In accordance with the direction of the Board of Directors, the bank had carried out reclassification of various funds in the Schedules of the Balance Sheet and combined the Schedules 3,4 & 5 last year into two schedules viz; 3 & 4 and accordingly presented the same in the current year's financial statements.

2. With a view to separately disclose the provisions made by the bank, the provisions hitherto disclosed as part C of Schedule 16 last year has been disclosed in a separate Schedule viz; Schedule 16 and the Establishment & Other Expenses and Expenditure on Promotional Expenditure hitherto forming Part A and B of Schedule 16 has been presented as Part A and B of Schedule 15.

3. In accordance with the instruction issued by Reserve Bank of India vide letter No. DCBR.RCBD.BPD.No.4/ 19.51.010/2015-16 dated 15 October 2015, the Financial Inclusion Technology Fund (FITF) and Financial Inclusion Fund (FIF) have been merged to form a single fund viz; Financial Inclusion Fund. Accordingly the expenditure of erstwhile FITF are accounted as the expenditure of FIF.

4. In terms of the agreement with Kreditanstalt Fur Wiederaufbau -German Development Bank (KfW), accretion/income and expenditure under UPNRM have been charged to the fund. The loans granted out of this fund have been classified as direct loans and disclosed under Schedule 12. The borrowing related to the UPNRM are classified as borrowing from international agencies and disclosed under Schedule 8.

During the year, a sum of ` 16.36 crore is required towards NPAfor loans granted under Kfw UPNRM Scheme and the same has been charged toProfit & Loss Account.

5. Interest on unutilized balances has been credited to the following funds as per the respective agreements/as approved by the management. The details of rate of interest for respective funds are as under:

6. Recoverable from Government of India/International Agencies (Refer Schedule-13 of Balance Sheet) includes `17.29 crore (`33.58 crore) being debit balance of various funds. The details of such funds are as under:

(` crore)

7. Sundry creditors includes `32.12 crore (`35.50 crore) being amounts outstanding to contributors in respect of Micro Finance Development and Equity Fund (MFDEF), which was closed in the earlier year. Details of the same is as under:

(` crore)

8. Pursuant to the directions of RBI, the relative margin available to the Bank in excess of 0.5 percent in respect of Rural Infrastructure Development Fund (RIDF) deposits, Short Term Co-operative Rural Credit Refinance Fund (STCRC) deposits, Short Term RRB Credit Refinance Fund (STRRB) deposits and Warehousing Infrastructure Fund (WIF) deposits, placed by the Commercial Banks is credited to Tribal Development Fund and Financial Inclusion Fund. Previous year, the amounts were credited to Tribal Development Fund, Watershed Development Fund and Financial Inclusion Fund.

9. The Bank has created two new funds out of its post tax profits viz; GramyaVikas Nidhi and Climate Fund with a corpus of `20.00 crore and `5.00 crore respectively.

10. Subvention received/receivable from Government of India (GOI) under Seasonal Agricultural Operations (SAO) amounting to `1353.14 crore (`1416.37 crore) and `17.12 crore (`17.11 crore) under National Rural Livelihood Mission (NRLM), being the difference between the cost of borrowing by NABARD and the refinance rate, has been reduced from interest and financial charges and shown as accrued interest and disclosed under Schedule 14.

11. Other receipts includes `168.43 crore (`162.62 crore) received/receivable from GOI towards administration charges on providing refinance under interest subvention scheme to StCBs, RRBs and to CCBs, Public Sector Banks for financing Primary Agriculture Co-operative Societies (PACS) for Seasonal Agricultural Operations and under NRLM scheme.

12. The salaries and allowances of the employees of the Bank are reviewed every five years. The review is due from 01 November 2012. Pending such settlement an amount of `150.00 crore (`135.00 crore) has been provided under the head "Salary and Allowances" during the year.

13. The Bank, during the year, in accordance with AS 22 "Accounting for taxes on Income", recognized in the Profit and Loss Account the deferred tax of `11.06 crore (`35.70crore). The details of the deferred tax are as under:

(` crore)

Provision for Deferred Tax on account of Special Reserve created u/s 36(1)(viii) of the Income Tax Act, 1961, is not considered necessary, as the Bank has decided not to withdraw the said reserve.

14. The tax liability of the Bank for the Assessment Year 2002-03 amounting to `373.15 crore was assessed by the Income Tax Department. The Bank has provided and paid the said liability. However, the Bank has filed an appeal against the order of the CIT Appeals with the Income Tax Appellate Tribunal.

15. Income Tax Department had reopened the assessment for the Assessment Year 2006-07, during the FY 2011-12. An amount of ` 343.21 crore has been added to the income of the bank during the reassessment of the income. Out of the above,

(a) An addition of ` 132.08 crore has been made on account of differential interest accounted under the RIDF which was credited to Watershed Development Fund in terms of the RBI directions.

(b) Further, an amount of `211.13 crore has been added to the income on other accounts. In the opinion of the management, in respect of these additions, there is remote possibility of any tax outflow. The Bank has filed an appeal against the above order with CIT-Appeals and also a rectification application with Assessing Officer. Pending the outcome of the appeal/rectification application, the bank had accounted the tax including interest amounting to `97.83 crore under the head Watershed Development Fund as an expenditure of the fund, in accordance with the resolution of the Board.

The bank has paid an amount of `162.16 crore out of the total demand of `254.22 crore by way of adjustment of refund of taxes of previous years and preferred an appeal with CIT (A) against the re-opening of the assessment. The CIT (A) vide his order dated 26 February 2016 has upheld NABARD's appeal and ruled against the reopening of completed assessment by IT department.

16. During the Reassessment of the income for the Assessment Year 2007-08 (reopened during 2011-12) an additional tax liability of `157.47 crore was assessed on account of differential interest accounted under the RIDF. The Bank has paid the said liability wherein Rs.27.46 crore has been charged to Tribal Development Fund during the current year. However, the Bank had filed an appeal against the above order with CIT- Appeals. During the year 2015-16, the CIT (A) vide his order dated 30 March 2016 has upheld NABARD's appeal and ruled against the reopening of completed assessment by IT department.

17. Income Tax Department had reopened the assessment for the Assessment Year 2008-09 during the Financial Year 2012-13 and additional tax liability of `174.59 crore was assessed on account of differential interest accounted under the RIDF/STCRC. The Bank has paid said liability in prior years and preferred an appeal against the above order with CIT- Appeals. During the year 2015-16, the CIT (A) vide his order dated 30 March 2016 has upheld NABARD's appeal and ruled against the reopening of completed assessment by IT department.

18. Income Tax Department had reopened the assessment for the Assessment Year 2009-10 during the Financial Year 2012-13 and raised a demand of `256.90 crore due to RIDF differential interest and other disallowances which has been paid by the bank in prior years and preferred an appeal with CIT(A) against the re-opening of the assessment. During the year 2015-16, the CIT (A) vide his order dated 30 March 2016 has upheld NABARD's appeal and ruled against the reopening of completed assessment by IT department.

19. During the Assessment of the income for the Assessment Year 2010-11 a tax liability of `313.07 crore was assessed on account of differential interest accounted under the RIDF/STCRC and others. The Bank has paid the liability in prior years. The Bank has filed an appeal against the above order with CIT- Appeals. The tax amount of `276.66 crore was accounted under Tribal Development Fund during FY 2012-13. During the year 2015-16, CIT (A) vide his order dated 26 February 2016 upheld our appeal for non-levy of income tax on differential interest accounted under the RIDF/STCRC.

20. During the Assessment of the income for the Assessment Year 2011-12 a tax liability of `424.95 crore was assessed on account of differential interest accounted under the RIDF/STCRC and others. The Bank has paid the liability in prior years. However, the Bank has filed an appeal against the above order with CIT- Appeals.

21. The Income Tax Department, for the Assessment year 2012-13, has made an addition of `1002.68 crore on account of differential interest accounted under the RIDF/STCRC which was credited to Tribal Development Fund in terms of the RBI directions. Further, an amount of `145.90 crore has been added to the income of the Bank on account of disallowance of expenditure on promotional activities and other disallowances. The Bank has paid the liability in prior years. However, the Bank has filed an appeal against the above order with CIT- Appeals.

22. During the year, the Income Tax Department, for the Assessment year 2013-14, has made an addition of `1156.05 crore on account of differential interest accounted under the RIDF/STCRC which was credited to Tribal Development Fund in terms of the RBI directions. Further, an amount of `20.56 crore has been added to the income of the Bank on account of disallowance of expenditure on promotional activities and other disallowances. However, the Bank has filed an appeal against the above order with CIT- Appeals.

23. Free hold land and Lease Land and Premises include - `19.58 crore (`29.87 crore) paid towards Office Premises and Staff Quarters for which conveyance is yet to be completed. Subsequent to the date of the Balance Sheet, conveyance in respect of Staff Quarters valuing to `3.58 crore have been executed.

24. Pursuant to the directives of RBI, the project loans provided to State Co-operative Agriculture and Rural Development Banks (SCARDBs) by way of subscription to the Special Development Debentures (SDDs) floated by these agencies, are treated as under:

a) Classified as Investments and shown in Schedule – 10 under the head 'Debenture and Bonds'.

b) Interest earned on the same is shown as a part of 'Interest received on Loans and Advances' in the Profit and Loss Account, treating them as 'Deemed Advances'.

c) 'Deemed Advances' for the purpose of IRAC norms, capital adequacy and computation of ratios etc.

25 Pursuant to the directives of RBI, Investments over and above the provision amount towards Encashment of Ordinary Leave which has been hitherto classified as Other Assets has since been shifted to Investments (AFS category) and provisions separately.

26 As on the date of the financial statements, out of the disbursement extended to various State Governments under RIDF, ` 631.16crore (`492.00 crore) pertains to non-starter projects. Pending receipt of the proposal from State Government for adjustment of the amount with the respective/ other projects, the amount has been classified as disbursement from the fund.

27 In terms of Central Board of Direct Taxes, Ministry of Finance notification dated 18 February 2016, NABARD was allowed to raise tax free bonds having benefits under section10(15)(iv)(h) of the Income Tax Act 1961 amounting to `5,000 crore before 31 March 2016. This was the debut tax free bonds issuances of NABARD. `1,500 crore repayable in 10 year tenure was mobilized through Private Placement and `3,500 crore repayable in 10 & 15 year tenure through public issue. The tax free bonds are in the nature of secured, redeemable and non-convertible bonds. These bonds are secured against pari passu charge on property situated in Mumbai and also first charge on specified book debts of NABARD. The interest charge to revenue pertaining to these bonds for the current year is ` 31.78 crore.

The details of the debenture Trustee is as under:

Axis Trustee Services Limited, Axis House, Second Floor Wadia International Centre

Pandurang Budhkar Marg Worli, Mumbai -400 025 Telephone: 022 24255215/5216

28 During the year 2015-16, an amount of ` 75 crore under Government Securities was shifted from HFT category to AFS with the permission of Investment Committee.

29 In terms of RBI Circular RBI/2015-16/104DBR.No.FID.FIC.3/01.02.00/2015-16 dated 01 July 2015 relating to Prudential Guidelines on Investment in Venture Capital Fund, an amount of `10.58 crore made in the units of VCF was shifted from HTM category, on completion of 3 years, to AFS category

30 Investments in Government securities include the following securities pledged with Clearing Corporation of India Limited as collateral security for borrowings:

(`crore)

31 The market value of all investments held by NABARD under Held to Maturity (HTM) category was `3302.79 crore against the book value of `2537.61 crore. Out of this, the market value of investment in Venture Capital Fund was `124.45 crore against the book value of `121.05 crore. Accordingly, the excess of book value over market value was `3.40 crore for which no provision was made as per RBI guidelines.

32 Disclosure on risk exposure in Derivatives

The Bank does not trade in derivatives. However, it has hedged its liability towards borrowings from KfW Germany to the extent of 99.19 million Euro(94.88 million Euro) and interest thereon for the entire loan period. ConsequentPART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 383 upon hedging of foreign currency borrowings the same is shown at contracted value as per the Swap agreement. The Bank does not have any open exposure in foreign currency.

The value of outstanding principal amount of hedge contract at the year–end exchange rate stood at `700.35 crore (`640.46 crore) and the value of outstanding principal liability in the books of account stood at contracted value i.e. `721.87 crore (`726.78 crore). The quantitative disclosure in this regard is as under:

(`crore)

@ If MIFOR rates decrease by 100 bps across tenure MTM gain will increase by `3.81lakh (`26.86 crore).

33 Exposures where the FI had exceeded prudential exposure limits during the year: NIL (NIL)

34 Issuer categories in respect of investments made in Debt Securities

(`crore)

35 Non performing investments:

(` crore)

Investment of ` 16.00 crore in Universal Commodity Exchange Limited (UCX) is treated as an Non Performing Investment as the company was barred from operating as a Commodity Exchange following Forward Markets Commission (FMC) directive in July 2014. As per the RBI guidelines the investment in the company is valued at ` 1/-.

36 Disclosure required under AS 15 (Revised) on "Employee Benefits" is as under:

36.1 Defined Benefit Plans

Employees Retirement Benefit plans of the bank include Pension, Gratuity, Leave Encashment and Post-retirement Medical Benefits, which are defined benefit plans. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

36.1.1 Pension

a. Reconciliation of opening and closing balances of defined benefit obligations:

(` crore)

b. Amount recognised in the Balance Sheet as on 31 March 2016 and previous year from 2011-12 to 2014-15:

(` crore)

@ Includes the Bank's contribution of ` 427.04 crore (`444.11 crore) towards PF for pension optees available with RBI. The confirmation of the balance is awaited from RBI.

c. Expenses recognized in the Profit and Loss Account during the year:

(` crore)

d. Actuarial assumptions:

36.1.2 Gratuity

a. Reconciliation of opening and closing balances of defined benefit obligations:

(`crore)

c. Expenses recognized in the Profit and Loss Account during the year:

(`crore)

d. Actuarial assumptions:

36.1.3 Encashment of Ordinary Leave

a. Reconciliation of opening and closing balances of defined benefit obligations:

(` crore)

b. Amount recognized in the Balance Sheet as on 31 March 2016 and P.Y. from 2011-12 to 2014-15.

(` crore)

$ Represents the amount invested with Insurance companies towards the liability for Leave Encashment.

c. As directed by Reserve Bank of India, the investments earmarked towards Encashment of Ordinary Leave has been treated as AFS category with effect from 31 March 2016

d. Expenses recognized in the Profit and Loss Account during the year:

(` crore)

d. Actuarial assumptions:

36.1.4 Post-Retirement Medical Benefits

The present value of defined benefit obligation in respect of post-retirement medical benefits accounted in Profit and Loss Account is `18.76 crore (` 20.27 crore).

36.1.5 The estimates of rate of escalation in salary considered in actuarial valuation, take into account NABARD related factors, inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

36.1.6 The aforesaid liabilities include liabilities of employees deputed to subsidiaries.

36.1.7 Amortisation of Post-retirement benefits

The entire liability towards post-retirement benefits are charged to Profit and Loss account and are not amortised.

36.1.8 Investment under Plan Assets of Pension, Gratuity & Leave Encashment Fund as on 31st March 2016

36.2 Defined Contribution Plan:

The bank contributes its share to Provident Fund with RBI. As per the terms the contribution is a defined contribution plan. During the year the bank has contributed `17.68 crore (`18.59 crore) with RBI.

As per the New Pension scheme for the employee's w.e.f.01 January 2012, the contribution by the bank is a defined contribution. During the year the bank has contributed `0.26 crore (`0.05 crore) to the said scheme.

37 In the opinion of the Bank's management, there is no impairment to assets to which AS 28 – "Impairment of Assets" applies requiring any provision.

38 The movement in Contingent Liability as required in AS 29 "Provisions, Contingent Liabilities and Contingent Assets" is as under:

(`crore)

39 Related Party Transactions

As the Bank is state controlled enterprise within the meaning of AS-18 "Related Party Transactions", the details of the transactions with other state controlled enterprises are not given.

List of Related Parties:

a) Companies where entity has control:

a. Key Management Personnel:

b. Transactions with Key Management Personnel:

(`crore)

No amounts, in respect of the related parties have been written off/back, or provided for during the year.

Related party relationships have been identified by the management and relied upon by the auditors.

40 Prior period items included in the Profit and Loss account are as follows:

(` crore)

41 Capital

41.1 Pattern of Capital contribution as on the date of the Balance Sheet:

The shareholding of Government of India and RBI in the Paid up capital of NABARD as on 31 March 2016 was at 99.60%: 0.40% as per details given below.

(` crore)

41.2 NABARD has received an amount of `300 crore from Government of India (vide their letter No. F.No.7/4/2015-AC dated 29 March 2016 towards Share Capital and the same has been kept as Advance towards Capital a/c – Received from GOI / RBI pending adjustment of the same against Share Capital after enhancement of Authorized Capital of NABARD.

41.3 Capital to Risk–weighted Assets Ratio (CRAR)

(Percent)

41.4 Capital adequacy ratio of the Bank as on 31 March 2016 was 17.59% (16.91%) as against a minimum of 9% as stipulated by RBI.

41.5 In accordance with RBI Instructions, assets financed from National Rural Credit – Long Term Operations (NRC LTO) Fund amounting to `14487 crore are excluded for the purpose of computing the CRAR.

41.6 Subordinated Debt

(` crore)

41.7 Risk weighted assets

(` crore)

41.8 Credit exposure as percentage to Capital Funds and as percentage to Total Assets

41.9 Credit exposure to the five largest industrial sectors as percentage to total loan assets: Not Applicable 42 As per the information available with the Bank, there are no dues payable under Micro, Small and Medium Enterprises Development Act 2006.

43 Asset Quality and Credit Concentration

(a) Asset classification

(` crore)

b) Restructured accounts

No loans were restructured during the current financial year. An amount of `11.96 crore (`21.96 crore) is recognized as reversal of sacrifice on accounts restructured in earlier period.

a) Details on Restructuring

*excluding the figures of standard restructured advances which do not attract higher provisioning or risk weight if applicable392 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4 44. Corporate Debt Restructuring (CDR)

No account has been subjected to CDR during the year.

45. NPA Position

(a) Net NPA position

(b) Movement in Net NPAs

(` crore)

46. Movement in the provisions

(a) Provisions made during the year

(` crore)

(b) Floating provisions

(` crore)

(c) Provision for Non-Performing Assets (Loan Assets)

(` crore)

(d) Provision for depreciation in investments

(` crore)

e) Withdrawal from Floating provisions

Pursuant to Reserve Bank of India Circular No.DBR.No.BP.BC.79/21-04.048/2014-15 dated 30 March 2015, the bank has withdrawn an amount of ` NIL (`11.07crore) from the Countercyclical Provisioning Buffer towards specific provision for Non-performing assets.

47. Provisioning Coverage Ratio

The provision coverage ratio of the Bank stood at 95.34%(93.15%)

48. Liquidity

Maturity pattern of Rupee Assets and Liabilities and Maturity pattern of Foreign Currency Assets and Liabilities

(` crore)

#Net of provision made as per RBI directives on Standard Assets as well as for diminution in value of Investments aggregating to `1085.47crore (`1032.06 crore)394 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4 49. Operating results

50.     Other Disclosures
50.1    Assets sold to Securitisation Company / Reconstruction Company      : NIL (NIL)
50.2    Forward Rate Agreements and Interest Rate Swaps                     : NIL (NIL)
50.3    Interest Rate Derivatives                                           : NIL (NIL)
50.4    Credit Default Swaps                                                : NIL (NIL)
50.5    Investments in Non Government Debt Securities                       : NIL (NIL)
50.6    Disclosure on Repo transactions                                     : NIL (NIL)
51.     Concentration of Deposits, Advances, Exposure and NPAs
        (a)   Concentration of Deposits

(` crore)

(b) Concentration of Advances

(` crore)

(c) Concentration of Exposure

(` crore)

(d) Concentration of NPAs

(` crore)

52. Sector-wise NPAs

53. Movement of Gross NPAs

(` crore)

54. Overseas Assets, NPAs and Revenue: NIL (NIL)

55. Off-balance sheet SPVs sponsored (which are required to be consolidated as per accounting norms):

NIL (NIL)

56. Disclosure of Complaints

Particulars

Nos.

a) No. of Complaints pending at the beginning of the year

11 b) No. of complaints received during the year

103 c) No. of complaints redressed during the year

112 d) No. of complaints pending at the end of the year

02

57. Awards passed by the Banking Ombudsman: : NIL (NIL)

58. Letters of comfort issued by Banks : NIL (NIL)

59. Bankassurance Business

Bank has not undertaken the business of Bankassurance during the year.

60. Information on Business Segment

(a) Brief Background

The Bank has recognised Primary segments as under:

i) Direct Finance: Includes Loans given to state governments and other agencies for rural infrastructure development, co-finance loans and loans given to voluntary agencies/non–governmental organizations for developmental activities and other direct loans to Co-operative Banks etc.

ii) Refinance: Includes Loans and Advances given to State Governments, Commercial Banks, SCARDBs, StCBs Regional Rural Banks etc. as refinance against the loans disbursed by them to the ultimate borrowers.

iii) Treasury: Includes investment of funds in treasury bills, short-term deposits, government securities, etc. iv) Unallocated: Includes income from staff loans and other miscellaneous receipts and expenditure incurred for the developmental role of the bank and common administrative expenses.

(b) Information on Primary Business Segment

(` crore)

(c) Since the operations of the Bank are confined to India only there is no reportable secondary segment.

61. Figures in brackets pertain to previous year.

62. Previous year's figures have been regrouped / rearranged wherever necessary.

As per our attached report of even date

Vyas & Vyas Chartered Accountants Firm Registration No. 000590C

A K Sahoo Chief General Manager Accounts Department

O.P.Vyas Partner Membership No.014081 Mumbai, 23 May 2016

Harsh Kumar Bhanwala R Amalorpavanathan H R Khan Anup Kumar Dash Chairman Deputy Managing Director Director Director

K Sayeed Ali Chief General ManagerPART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 397

National Bank for Agriculture and Rural Development

Cash flow for the year ended 31 March 2016

(` in thousands)

As per our attached report of even date

Vyas & Vyas Chartered Accountants

O.P.Vyas Partner M No. 014081 Mumbai Date : 23 May 2016

A K Sahoo Chief General Manager Accounts Department Mumbai 23 May 2016

Harsh Kumar Bhanwala R Amalorpavanathan H R Khan Anup Kumar Dash Chairman Deputy Managing Director Director Director

K Sayeed Ali Chief General ManagerPART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 399

Consolidated Balance Sheet

Profit & Loss Account

&

Cash Flow

2015-16

of

NABARD

&

Subsidiaries

(NABCONS, NABKISAN, ABFL, NABFINS)

INDEPENDENT AUDITORS' REPORT

To,

The Board of Directors of National Bank for Agriculture and Rural Development

Report On the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of National Bank for Agriculture and Rural Development (hereinafter referred to as "Holding Bank") and its subsidiaries (the holding bank and subsidiaries together referred to as "the Group") which comprises the Consolidated Balance Sheet as at March 31, 2016 and the Consolidated Statement of Profit and Loss Account and Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the consolidated financial statements").

Management's Responsibility for the Consolidated Financial Statements

Holding Bank management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India. The respective management of the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the management of the holding bank, as aforesaid.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the holding bank's preparation and fair presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion whether the holding bank has an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us and audit evidence obtained by the other auditors in terms of their report referred to in Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give information required and true and fair view in conformity with the accounting principles generally accepted in India:

1. in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2016;

2. in the case of the Consolidated Statement of Profit and Loss, of the Profit of the Group for the year ended on that date;

and

3. in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.

Other Matters

We did not audit the financial statements / financial information of four subsidiaries, and whose financial statements reflect total assets of Rs.1495.60 crores as at 31st March, 2016, total revenues of Rs.208.56 crores and net cash outflow amounting to Rs.2.00 crores for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group's share of net profit (after tax) of Rs.24.71 crores for the year ended 31st March, 2016, as considered in the consolidated financial statements, These financial statements / financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is based solely on the reports of the other auditors.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements / financial information certified by the management.

Report on Other Legal and Regulatory Requirements

We report that the Consolidated Financial Statements have been prepared by holding bank in accordance with the requirements of Accounting Standards (AS) 21 "Consolidated Financial Statements". In our opinion, the consolidated Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards.

For Vyas & Vyas Chartered Accountants (Firm Registration No. 000590C)

Place: Mumbai

O.P.Vyas Partner (Membership No. 014081)

Date:

National Bank for Agriculture and Rural Development

Consolidated Balance sheet as on 31 March 2016

( ` thousands)

Schedules referred to above form an integral part of accounts

As per our attached report of even date

Vyas & Vyas Chartered Accountants FRN. 000590C

A K Sahoo Chief General Manager Accounts Department Mumbai : 23 May 2016

O.P.Vyas Partner M. No.014081 Mumbai Date : 23 May 2016

Harsh Kumar Bhanwala R Amalorpavanathan H R Khan Anup Kumar Dash Chairman Deputy Managing Director Director Director

K Sayeed Ali Chief General Manager402 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4

National Bank for Agriculture and Rural Development

Consolidated Profit and Loss Account for the year ended 31 March 2016

( ` thousands)

( ` thousands)

Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts.

As per our attached report of even date Vyas & Vyas Chartered Accountants

A K Sahoo Chief General Manager Accounts Department Mumbai : 23 May 2016

O.P.Vyas Partner M. No. 014081 Mumbai Date : 23 May 2016

Harsh Kumar Bhanwala R Amalorpavanathan H R Khan Anup Kumar Dash Chairman Deputy Managing Director Director Director

K Sayeed Ali Chief General Manager404 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4

SCHEDULES TO CONSOLIDATED BALANCE SHEET

Consolidated Schedule 1 - Reserve Fund and Other Reserves

( ` in thousand)

# This includes balance of `3,02,22,703/- from prior years being reconciled and balance of `4,24,76,919/- being the difference between the audited financial statements and unaudited financial statements for the previous year.

Consolidated Schedule 2 - National Rural Credit Funds

(` thousands)

Consolidated Schedule 3 - Gifts, Grants, Donations and Benefactions

(` thousands)

2.       NABARD is acting as banker/custodian/trustee on behalf of GOI/ RBI/Other entities and is holding the above funds,
pending disbursement/utilization in terms of respective schemes, on their behalf, to the extent of contribution made by them
and accrued interest on unutilized balances, wherever applicable.
3.       (i)   includes ` 130.21 crore being the income tax paid
         (ii)  includes ` 241.82 crore being the income tax paid

Consolidated Schedule 4 - Government Schemes

(` thousands)

2. NABARD is acting as banker/custodian/trustee on behalf of GOI/ RBI/Other entities and is holding the above funds, pending disbursement/utilization in terms of respective schemes, on their behalf, to the extent of contribution made by them and accrued interest on unutilized balances, wherever applicable.

Consolidated Schedule 5 – Deposits

(` thousands)

Consolidated Schedule 6 - Bonds and Debentures

(` thousands)

Consolidated Schedule 7 – Borrowings

(` thousands)

Out of the above, borrowings under CBLO are secured against Government Securities including Treasury Bills Consolidated Schedule 8 - Current Liabilities and Provisions

(` thousands)

Consolidated Schedule 9 - Cash and Bank Balances

(` thousands)

Consolidated Schedule 10 – Investments

(` thousands)

All the above investments are made in India

@ The company is valued at Rs.1/-. The provision against the investment is shown under the head Provision against Non Performing Investments Schedule -9 ( Refer Note B-35 of Schedule 18)PART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 415

Consolidated Schedule 11 – Advances

(` thousands)

Consolidated Schedule 12 - Fixed Assets

(` thousands)

Consolidated Schedule 13 - Other Assets

(` thousands)

Consolidated Schedule 14 - Interest and Financial Charges

(` thousands)

Consolidated Schedule 15 A - Establishment and Other Expenses

(` thousands)

Consolidated Schedule 15 B - Expenditure on Promotional Activities

(` thousands)

Consolidated Schedule 16 – Provisions

(` thousands)

Consolidated Schedule 17 - Commitments and Contingent Liabilities

(` thousands)

Schedule 18

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS

FOR THE YEAR ENDED MARCH 31, 2016

C. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation:

The accounts are prepared on the historical cost convention and comply with all material aspects contained in the National Bank for Agriculture and Rural Development Act, 1981 and Regulations thereof, applicable Accounting Standards (AS) issued by the Institute of Chartered Accountants of India (ICAI) and regulatory norms prescribed by the Reserve Bank of India (RBI). Except otherwise mentioned, the accounting policies have been consistently applied by the National Bank for Agriculture and Rural Development (the Bank/NABARD) and are consistent with those used in the previous year.

2. Basis of Consolidation

The Consolidated Financial Statements are prepared in accordance with Accounting Standard 21 – "Consolidated Financial Statements", issued by the Institute of Chartered Accountants of India.

The excess/deficit of the cost to the Bank of its investment, over the Bank's portion of net assets at the time of acquisition of shares is recognized in Reserves & Surplus.

The Consolidated Financial Statements are prepared using uniform accounting policies for like transactions and events in similar circumstances and necessary adjustments required for deviations, if any to the extent possible, arePART III—SEC. 4] THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) 421 made in the consolidated financial statements and are presented in the same manner as the Bank's standalone financial statements. The figures pertaining to the Subsidiary Companies have been recast/reclassified wherever necessary to bring them in line with the parent Bank's financialstatements.

The financial statements of the subsidiaries used in the consolidation are drawn up to the same reporting date as that of the Bank.

The Notes and Significant accounting policies to the Consolidated Financial Statements are intended to serve as a means of informative disclosure and a guide to better understanding of the consolidated position of the Group. In this respect, the Bank has disclosed such notes and policies which fairly present the needed disclosures, and such other notes and statutory conformation disclosed in the financial statements of the parent and the subsidiary companies which are not having any effect on the true and fair view of the Consolidated Financial statements are excluded.

The financial statements of the Bank and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra-group balances and intra-group transactions. The unrealized profits or losses resulting from the intra-group transactions have been eliminated and unrealized losses resulting from the intra-group transactions have also been eliminated unless cost cannot be recovered.

Share of minority interest in the net profit of the consolidated subsidiaries is identified and adjusted against the profit after tax to arrive at the net income attributable to shareholders. Share of minority interest in losses of the consolidated subsidiaries, if exceeds the minority interest in the equity, the excess and further losses applicable to the minority, are adjusted against the Group's interest.

Share of minority interest in net assets of consolidated subsidiaries is presented in the consolidated balance sheet separately from liabilities and the equity of the company's shareholders.

3. The consolidated financial statements present the accounts of the Bank with its following subsidiaries:

4.       Use of Estimates:
         Preparation  of  financial  statements  in  conformity  with  the  Generally  Accepted  Accounting  Principles  (GAAP)
         requires  the  management  to  make  estimates  and  assumptions  that  affect  reported  amounts  of  assets  and  liabilities
         and disclosure of contingent liabilities at the date of the financial statements and the results of the operations for the
         reporting period. Although these estimates are based on the management's best knowledge, the actual results could
         differ for these estimates. Such differences are recognized in the year of outcome of such results.
5.       Revenue recognition:
5.1      Income and expenditure are accounted on accrual basis, except the following, which are   accounted on cash basis:
         i)    Interest on non-performing assets identified as per Reserve Bank of India (RBI) guidelines.
         ii)   Income by way of penal interest charged due to delayed receipt of loan dues or non–compliance with terms of
               loan.
         iii)  Service Charges on loans given out of various Funds.
         iv)   Expenses not exceeding `10,000 at each accounting unit, under a single head of expenditure.
5.2      Discount on Bonds and Commercial Papers issued are amortized over the tenure of Bonds and Commercial Papers.
         Issue expenses relating to floatation of bonds are recognized as expenditure in the year of issue of Bonds.

5.3 Dividend on investments is accounted for, when the right to receive the dividend is established.

5.4 Release of subsidy in which NABARD is acting as a pass through agency is accounted for on payment basis subject to availability of funds under the respective schemes.

5.5 Income from Venture Capital funds is accounted on realization basis.

5.6 Provision for Wealth Tax is made, in accordance with the provisions of Wealth Tax Act, 1957.

5.7 Recovery in non-performing assets (NPA) is appropriated in the following order:

v) penal interest

vi) cost & charges

vii) overdue interest and interest

viii) Principal

5.8 Interest from the term loan disbursed and interest from banks are recognized on time proportion basis taking into account amount outstanding and the rate applicable.

5.9 Income from services

5.9.1 Income from Assignments: Income from assignments constitute the main source of income for the Company (NABCONS). Recognition of revenue and corresponding expenses incurred on particular assignments are taken into account at the time when the assignment are completed. An assignment is treated as completed

- in case of preparation of DPR as soon as the draft report has been issued to the party.

- in case of big assignments where execution is spread over to more than one year, the income has been recognized based on the milestones completed and deliveries effected.

- in case assignment is a time bound contract for more than a year income is recognized in proportion to period completed.

5.9.2 In case of foreign assignments, the income has been recognized as soon as the assignment is executed.

5.9.3 As per the view taken by the management, the assignments which are not likely to becontinued were closed on "as is where is" basis and the amount received thereon has been treated as income.

5.9.4 An advance received on progressive basis for ongoing assignments is shown as a separate item as advance received from clients and treated as current liability. The expenses incurred on such assignments are shown as current assets.

5.9.5 In respect of Pass through and monitoring agency assignment, as per terms of agreement, NABCONS is entitled to deduct 1.5% of the amount released at the time of release of each installment towards professional fees. The income has been recognized at the time of release of each instalment amount.

6. Fixed Assets and Depreciation

j. Fixed assets are stated at cost of acquisition, less accumulated depreciation and impairment losses, if any. The cost of assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Subsequent expenditure incurred on existing asset is capitalized, only when it increases the future benefit from the existing assets beyond its previously assessed level of performance.

k. Land includes free hold and leasehold land.

l. Premises include value of land, where segregated values are not readily available.

m. Depreciation on premises situated on free hold land is charged at 10% p.a., on written down value basis.

n. Depreciation on leasehold land and premises situated thereon is computed and charged at 5% on written down value basis or the amount derived by amortizing the premium/cost over the remaining period of leasehold land, on straight-line basis, whichever is higher.

o. Fixed Assets costing `1 lakh and less (except easily portable electronic assets such as laptops, mobile phones, etc.) are charged to the Profit and Loss Account in the year of acquisition. Easily portable electronic assets such as laptops, mobile phones, etc., are capitalized, if individual cost of the items is more than `10,000/-. All software costing `1 lakh each and less, purchased independently are charged to the Profit and Loss Account.

p. Depreciation on other fixed assets is charged over the estimated useful life of the assets ascertained by the management at the following rates on Straight Line Method basis:

q. Depreciation is charged for the full year, irrespective of the date of purchase of asset. No depreciation is charged in the year of sale.

r. Capital work in progress includes capital advances and is disclosed under Fixed Assets.

s. In case of following subsidiaries the depreciation on fixed assets is provided on following basis

7. Investments

f) In accordance with the RBI guidelines, Investments are classified into "Held for Trading" (HFT), "Available for Sale" (AFS) and "Held to Maturity" (HTM) categories (hereinafter called "categories").

g) Securities that are held principally for resale within 90 days from the date of purchase are classified as "HFT". Investments that the Bank intends to hold till maturity are classified as "HTM". Securities which are not to be classified in the above categories are classified as "AFS".

h) Investments classified under Held to Maturity category are carried at acquisition cost, wherever cost is equivalent to face value or less. If cost is more than the face value, the premium is amortized over the period remaining to maturity. Provision for diminution, other than temporary, in the value of investments in subsidiaries and joint ventures under the category "HTM" is made, wherever necessary. Provision for diminution/amortization, in value of such investments, is included under Current Liabilities and Provisions.

i) Profit on redemption of investment categorized under "HTM" is recognized in Profit & Loss A/c and then transferred to Reserve A/c.

j) Investments under "AFS" are marked to market, scrip-wise, at the rate, declared by Primary Dealers Association of India (PDAI), jointly with Fixed Income Money Market and Derivative Association of India (FIMMDA). Net depreciation, if any, is provided for investments in the category classified as "AFS" and appreciation is ignored. The book value of the individual scrip are not changed after the revaluation.

f) Investments under "HFT" are marked to market, scrip-wise, at the rate, declared by Primary Dealers Association of India (PDAI), jointly with Fixed Income Money Market and Derivative Association of India (FIMMDA). Depreciation/appreciation is recognized in the category for investments classified as "HFT". The book value of the individual scrip are changed after the revaluation.

g) Investments in subsidiaries, joint ventures and associates are classified as Held to Maturity.

h) Treasury Bills, Commercial Papers and Certificates of Deposits are valued at carrying cost.

i) Unquoted Shares are valued at breakup value, if the latest Audited Accounts of the investee companies are available, or at `1/- per Company as per RBI guideline.

j) Brokerage, commission, etc. paid in respect of investments including unlisted equities, at the time of acquisition, are charged to revenue.

k) Brokerage, paid on acquisition/disposal of equities traded on stock exchange is capitalized.

l) Broken period interest paid/received on debt investment is treated as interest expenses/ income and is excluded for cost/sale consideration.

m) Transfer of a security between the categories is accounted for, at lower of the acquisition cost/book value/market value on the date of transfer and depreciation, if any, on such transfer, is fully provided for.

n) Amortization/Gain/Loss on Revaluation of Government Securities is charged to Profit and Loss Account.

o) Weighted average cost method has been followed for accounting for investments.

8. Advances and Provisions thereon

a) Advances are classified as per RBI guidelines. Provision for standard assets and non–performing assets is made in respect of identified advances, based on a periodic review and in conformity with the provisioning norms prescribed by RBI.

e) In case of restructuring/rescheduling of advances, the difference between the present value of future principal and interest as per the original agreement and the present value of future principal and interest as per the revised agreement is provided for.

f) Advances are stated net of provisions towards Non-performing Advances.

g) Provision for Non-Performing Loans in respect of loans granted out of funds are charged to the respective funds to the extent available.

9. Foreign Currency Transactions

As per Accounting Standard (AS-11) (Revised 2003) on Accounting for the Effects of Changes in Foreign Exchange Rates issued by the Institute of Chartered Accountants of India; following accounting treatment is given to foreign exchange transactions:

c) Assets and liabilities in foreign currency, are revalued at the exchange rate notified by Reserve Bank of India (using FEDAI rates till last year) as at the close of the year and disclosed as a contra item in the Balance Sheet (as off Balance Sheet item). The liability towards foreign currency borrowings is fully hedged and stated in the Balance Sheet at the contracted value (as off balance sheet item).

d) Income and Expenditure items are translated at the exchange rates prevailing on the date of the transaction.

10. Accounting for Foreign Exchange Contracts

d) Foreign Exchange Contracts are to hedge the repayment of foreign currency borrowings.

e) The foreign exchange contracts are revalued at the exchange rates notified by FEDAI at the year end. The resultant gain/loss on revaluation is recognised in the Profit & Loss Account under the head Gains/Loss on revaluation of Forward Exchange Contract Account. Premium/ discount are accounted over the life of the contract.

f) The Profit / Loss on cancellation and renewal of foreign exchange contracts are recognised in Profit and Loss Account under the head 'Profit / Loss on Foreign Currency Loan Account'.

11. Employee Benefits

All personnel transferred from RBI are considered as employees of the Bank and provisions for Employee Benefits are made accordingly. Actuarial valuation, wherever required, are carried out at each balance sheet date.

d) Short Term Employee Benefits:

The undiscounted amount of short-term employee benefits, which are expected to be paid in exchange for the services rendered by employees are recognised during the period when the employee renders the service.

e) Post Retirement Benefits:

i) Defined Contribution Plan

The Bank has a Provident Fund Scheme in respect of all eligible employees who joined the Bank on or before 31 December 2011. The scheme is managed by RBI. Contribution is recognized on accrual basis.

The Bank has introduced a New Pension Scheme (NPS) for all the officers/employees who have joined the services of the Bank on or after 01 January 2012. The Bank has adopted the "NPS- Corporate Sector Model", a defined contribution plan, as formulated by the Pension Fund Regulatory and Development Authority (PFRDA). Contribution to the Fund is made on accrual basis.

ii) Defined Benefit Plan

a. Provision for gratuity is made based on actuarial valuation, made at the end of each financial year based on the projected unit credit method in respect of all eligible employees. The scheme is funded by the Bank and is managed by a separate trust. Actuarial gain or loss are recognised in the Profit and Loss Account on accrual basis.

b. Provision for pension is made based on actuarial valuation, in respect of all eligible employees who joined the Bank on or before 31 December 2011. The scheme is funded by the Bank and is managed by a separate trust.

iii) Other Long Term benefits

All eligible employees of the bank are eligible for compensated absences. All the eligible employees are also eligible for post-retirement medical benefits. The cost of providing other long term benefits is determined using the projected unit credit method based on actuarial valuations being carried out at each balance sheet date. Actuarial gain or loss are recognised in the Profit and Loss Account on accrual basis.

12. Taxes on Income

a) Tax on income for the current period is determined on the basis of taxable income and tax credits computed, in accordance with the provisions of Income Tax Act, 1961 and based on expected outcome of assessments/ appeals.

b) Deferred tax is recognized, on timing difference, being the difference between taxable income and accounting income for the year and quantified, using the tax rates and laws that have been enacted or substantively enacted, as on Balance Sheet date.

c) Deferred tax assets relating to unabsorbed depreciation/business losses are recognised and carried forward to the extent that there is virtual certainty that sufficient future taxable income will be available against which, such deferred tax assets can be realized.

d) Tax paid/provided on taxable income earned by the funds are accounted as expenditure of respective funds.

13. Segment Reporting

a) Segment revenue includes interest and other income directly identifiable with/allocable to the segment.

b) Income, which relates to Bank as a whole and not allocable to segments is included under "Other Unallocable Bank income".

f) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. The expenses, which relate to the Bank as a whole and not allocable to segments, are included under "Other Unallocable Expenditure".

d) Segment Assets and Liabilities include those directly identifiable with the respective segments. Unallocable Assets and Liabilities include those that relate to the Bank as a whole and not allocable to any segment.

14. Impairment of Assets

a) As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine:

i) the provision for impairment loss, if any, required; or

ii) the reversal, if any, required for impairment loss recognized in the previous periods.

b) Impairment loss is recognized when the carrying amount of an asset exceeds recoverable amount.

15. Provisions, Contingent Liabilities and Contingent Assets

15.1 Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation if:

a) the Bank has a present obligation as a result of a past event;

b) a probable outflow of resources is expected to settle the obligation; and

c) the amount of the obligation can be reliably estimated.

15.2 Contingent liability is disclosed in the case of:

a) apossible obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a present obligation when no reliable estimate is possible, and426 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4 c) a possible obligation arising from past events where the probability of outflow of resources is remote.

15.3 Contingent assets are neither recognized, nor disclosed.

15.4 Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

16. Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank, cash in hand, demand deposits with banks and other short-term investments with an original maturity of three months or less.

B. NOTES FORMING PART OF THE ACCOUNTS

25. In accordance with the direction of the Board of Directors, the bank had carried out reclassification of various funds in the Schedules of the Balance Sheet and combined the Schedules 3, 4 & 5 into two schedules viz; 3 & 4 and accordingly presented the same in the current year's financial statements.

26. With a view to separately disclose the provisions made by the bank, the provisions hitherto disclosed as part C of Schedule 16 has been disclosed in a separate Schedule viz; Schedule 16, and the Establishment & Other Expenses and Expenditure on Promotional Expenditure hitherto forming Part A and B of Schedule 16 has been presented as Part A and B of Schedule Schedule 15.

27. In accordance with the instruction issued by Reserve Bank of India vide letter No. DCBR.RCBD.BPD.No.4/ 19.51.010/2015-16 dated 15 October 2015, the Financial Inclusion Technology Fund (FITF) and Financial Inclusion Fund (FIF) have been merged to form a single fund viz; Financial Inclusion Fund. Accordingly the expenditure of erstwhile FITF are accounted as the expenditure of FIF.

28. In terms of the agreement with Kreditanstalt Fur Wiederaufbau - German Development Bank (KfW), accretion/income and expenditure under UPNRM have been charged to the fund. The loans granted out of this fund have been classified as direct loans and disclosed under Schedule 12. The borrowing related to the UPNRM are classified as borrowing from international agencies and disclosed under Schedule 8.

During the year, a sum of ` 16.36 crore towards NPA for loans granted under Kfw UPNRM Scheme and the same has been charged to Profit & Loss Account.

29. Interest on unutilized balances has been credited to the following funds as per the respective agreements/as approved by the management. The details of rate of interest for respective funds are as under:

30. Recoverable from Government of India/International Agencies (Refer Schedule-14 of Balance Sheet) includes `33.58 crore (`24.69 crore ) being debit balance of various funds. The details of such funds are as under:

(` crore)

31. Sundry creditors includes `32.12 crore (`35.50 crore) being amounts outstanding to contributors in respect of Micro Finance Development and Equity Fund (MFDEF), which was closed in the earlier year. Details of the same is as under:

(` crore)

32. Pursuant to the directions of RBI, the relative margin available to the Bank in excess of 0.5 percent in respect of Rural Infrastructure Development Fund (RIDF) deposits, Short Term Co-operative Rural Credit Refinance Fund (STCRC) deposits, Short Term RRB Credit Refinance Fund (STRRB) deposits and Warehousing Infrastructure Fund (WIF) deposits, placed by the Commercial Banks is credited to Tribal Development Fund and Financial Inclusion Fund as per directions of Reserve Bank of India. Previous year, the amounts were credited to credited to Tribal Development Fund, Watershed Development Fund and Financial Inclusion Fund.

33. The Bank has created to new funds out of its post tax profits viz; Gramya Vikas Nidhi and Climate Fund with a corpus of ` 20.00 crore and ` 5.00 crore respectively.

34. In Financial Year 2015-16 tax on proposed dividend is being used to calculate profit available for appropriation.

Previous year figure of ` 12.46 lakhs pertaining to tax on proposed dividend has not been regrouped.

35. Subvention received/receivable from Government of India (GOI) under Seasonal Agricultural Operations (SAO) amounting to `1353.14 crore (`1416.37 crore) and `17.12 crore (`17.11 crore) under National Rural Livelihood Mission (NRLM) respectively, being the difference between the cost of borrowing by NABARD and the refinance rate, has been reduced from interest and financial charges and shown as accrued interest and disclosed under Schedule 14.

36. Other receipts includes `168.43 crore (`162.62 crore) received/receivable from GOI towards administration charges on providing refinance under interest subvention scheme to StCBs, RRBs and to CCBs, Public Sector Banks for financing Primary Agriculture Co-operative Societies (PACS) for Seasonal Agricultural Operations and under NRLM scheme.

37. The salaries and allowances of the employees of the Bank are reviewed every five years. The review is due from 01 November 2012. Pending such settlement an amount of `150.00 crore (`135.00 crores) has been provided under the head "Salary and Allowances" during the year.

38. The Bank, during the year, in accordance with AS 22 "Accounting for taxes on Income", recognized in the Profit and Loss Account the deferred tax of `11.06 crore (`35.70crore). The details of the deferred tax are as under:

(`crore)

Provision for Deferred Tax on account of Special Reserve created u/s 36(1)(viii) of the Income Tax Act, 1961, is not considered necessary, as the Bank has decided not to withdraw the said reserve.

39. The tax liability of the Bank for the Assessment Year 2002-03 amounting to `373.15 crore was assessed by the Income Tax Department. The Bank has provided and paid the said liability. However, the Bank has filed an appeal against the order of the CIT Appeals with the Income Tax Appellate Tribunal.

40. Income Tax Department had reopened the assessment for the Assessment Year 2006-07, during the FY 2011-12. An amount of `343.21 crore has been added to the income of the bank during the reassessment of the income. Out of the above,

(a) An amount of `132.08 crore has been made on account of differential interest accounted under the RIDF which was credited to Watershed Development Fund in terms of the RBI directions.

(b) Further, an amount of `211.13 crore has been added to the income on other accounts. In the opinion of the management, in respect of these additions, there is remote possibility of any tax outflow. The Bank has filed an appeal against the above order with CIT-Appeals and also a rectification application with Assessing Officer. Pending the outcome of the appeal/rectification application, the bank had accounted the tax including interest amounting to `97.83 crore under the head Watershed Development Fund as an expenditure of the fund, in accordance with the resolution of the Board.

The bank has paid an amount of `162.16crore out of the total demand of `254.22 crore by way of adjustment of refund of taxes of previous years and preferred an appeal with CIT (A) against the re-opening of the assessment. The CIT (A) vide his order dated 26 February 2016 has upheld NABARD's appeal and ruled against the reopening of completed assessment by IT department.

41. During the Reassessment of the income for the Assessment Year 2007-08 (reopened during 2011-12) an additional tax liability of `157.47 crore was assessed on account of differential interest accounted under the RIDF. The Bank has paid the said liability wherein Rs.27.46 crore has been charged to Tribal Development Fund during the current year. However, the Bank had filed an appeal against the above order with CIT- Appeals. During the year 2015-16, the CIT (A) vide his order dated 30 March 2016 has upheld NABARD's appeal and ruled against the reopening of completed assessment by IT department.

42. Income Tax Department had reopened the assessment for the Assessment Year 2008-09 during the Financial Year 2012-13 and additional tax liability of `174.59 crore was assessed on account of differential interest accounted under the RIDF/STCRC. The Bank has paid said liability in prior years and preferred an appeal against the above order with CIT- Appeals. During the year 2015-16, the CIT (A) vide his order dated 30 March 2016 has upheld NABARD's appeal and ruled against the reopening of completed assessment by IT department.

43. Income Tax Department had reopened the assessment for the Assessment Year 2009-10 during the Financial Year 2012-13 and raised a demand of `256.90 crore due to RIDF differential interest and other disallowances which has been paid by the bank in prior years and preferred an appeal with CIT(A) against the re-opening of the assessment. During the year 2015-16, the CIT (A) vide his order dated 30 March 2016 has upheld NABARD's appeal and ruled against the reopening of completed assessment by IT department.

44. During the Assessment of the income for the Assessment Year 2010-11 a tax liability of `313.07 crore was assessed on account of differential interest accounted under the RIDF/STCRC and others. The Bank has paid the liability in prior years. The Bank has filed an appeal against the above order with CIT- Appeals. The tax amount of `276.66 crore was accounted under Tribal Development Fund during FY 2012-13. During the year 2015-16, CIT (A) vide his order dated 26 February 2016 upheld our appeal for non-levy of income tax on differential interest accounted under the RIDF/STCRC.

45. During the Assessment of the income for the Assessment Year 2011-12 a tax liability of `424.95 crore was assessed on account of differential interest accounted under the RIDF/STCRC and others. The Bank has paid the liability in prior years. However, the Bank has filed an appeal against the above order with CIT- Appeals.

46. The Income Tax Department, for the Assessment year 2012-13, has made an addition of `1002.68 crore on account of differential interest accounted under the RIDF/STCRC which was credited to Tribal Development Fund in terms of the RBI directions. Further, an amount of `145.90 crore has been added to the income of the Bank on account of disallowance of expenditure on promotional activities and other disallowances. The Bank has paid the liability in prior years. However, the Bank has filed an appeal against the above order with CIT- Appeals.

47. During the year, the Income Tax Department, for the Assessment year 2013-14, has made an addition of `1156.05 crore on account of differential interest accounted under the RIDF/STCRC which was credited to Tribal Development Fund in terms of the RBI directions. Further, an amount of `20.56 crore has been added to the income of the Bank on account of disallowance of expenditure on promotional activities and other disallowances. However, the Bank has filed an appeal against the above order with CIT- Appeals.

48. Free hold land and lease Land' and 'Premises' include - `19.58 crore (`29.87 crore) paid towards Office Premises and Staff Quarters for which conveyance is yet to be completed. Subsequent to the date of the Balance Sheet, conveyance in respect of Staff Quarters valuing to `3.58 crores have been executed.

49. Investments in Government securities include the following securities pledged with Clearing Corporation of India Limited as collateral security for borrowings:

(`crore)

50. The market value of all investments held by NABARD under Held to Maturity (HTM) category was `3302.79 crore against the book value of `2537.61 crore. Out of this, the market value of investment in Venture Capital Fund was `124.45 crore against the book value of `121.05 crore. Accordingly, the excess of book value over market value was `3.40 crore for which no provision was made as per RBI guidelines.

51. Non performing investments:

(`crore)

Investment of ` 16.00 crore in Universal Commodity Exchange Limited (UCX) is treated as an Non Performing Investment as the company was barred from operating as a Commodity Exchange following Forward Markets Commission (FMC) directive in July 2014. As per the RBI guidelines the investment in the company is valued at ` 1/-.

33. The movement in Contingent Liability as required in AS 29 "Provisions, Contingent Liabilities and Contingent Assets" is as under:

(`crore)

28. Prior period items included in the Profit and Loss account are as follows:

(`crore)

29. Information on Business Segment

(a) Brief Background

The Bank has recognized Primary segments as under:

i) Direct Finance: Includes Loans given to state governments and other agencies for rural infrastructure development, co-finance loans and loans given to voluntary agencies/non–governmental organizations for developmental activities and other direct loans to Co-operative Banks etc.

ii) Refinance: Includes Loans and Advances given to State Governments, Commercial Banks, SCARDBs, StCBs Regional Rural Banks etc. as refinance against the loans disbursed by them to the ultimate borrowers.

iii) Treasury: Includes investment of funds in treasury bills, short-term deposits, government securities, etc. v) Unallocated: Includes income from staff loans and other miscellaneous receipts and expenditure incurred for the developmental role of the bank and common administrative expenses.

(b) Information on Primary Business Segment

(`crore)

(c) Since the operations of the Bank are confined to India only there is no reportable secondary segment.

30. Figures in brackets pertain to previous year.

31. Previous year's figures have been regrouped / rearranged wherever necessary.

As per our attached report of even date Vyas & Vyas Chartered Accountants Firm Registration No.000590C

A K Sahoo Chief General Manager Accounts Department

O P Vyas Partner Membership No.014081 Mumbai 23 May 2016

Anup Kumar Dash Director Harsh Kumar Bhanwala Chairman

R Amalorpavanathan Deputy Managing Director

H R Khan Director

K Sayeed Ali Chief General Manager432 THE GAZETTE OF INDIA, AUGUST 13, 2016 (SRAVANA 22, 1938) [PART III—SEC. 4

National Bank for Agriculture and Rural Development

Consolidated Cash flow for the year ended 31 March 2016

(` thousands)

As per our attached report of even date Vyas & Vyas Chartered Accountants

O P Vyas Partner Membership No.014081 Mumbai Date : 23 May 2016

A K Sahoo Chief General Manager Accounts Department Mumbai 23 May 2016

Harsh Kumar Bhanwala Chairman

R Amalorpavanathan Deputy Managing Director

H R Khan Director

Anup Kumar Dash Director

K Sayeed Ali Chief General Manager

मुद्रण निदेशालय द्वारा, भारत सरकार मुद्रणालय, एन.आई.टी. फरीदाबाद में अपलोड एवं प्रकाशन नियंत्रक, दिल्ली द्वारा ई-प्रकाशित, 2016 UPLOADED BY DIRECTORATE OF PRINTING AT GOVERNMENT OF INDIA PRESS, N.I.T. FARIDABAD AND E-PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI, 2016

www.dop.nic.in

DOPGIPF—[PART III—SEC.1]