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रजिस्ट्री सं. डीएल—(एन)04/0007/2003—19त्रत्रत्रत्र REGISTERED No. DL—(N)04/0007/2003—19

साप्ताहिक/WEEKLY

प्राधिकार से प्रकाशितत्रत्रत्रत्र

PUBLISHED BY AUTHORITY

सं. 37] नई दिल्ली, शनिवार, सितम्बर 14—सितम्बर 20, 2019 (भाद्रपद 23, 1941)त्रत्रत्रत्र

No. 37] NEW DELHI, SATURDAY, SEPTEMBER 14—SEPTEMBER 20, 2019 (BHADRA 23, 1941)

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

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

भाग III—खण्ड 4त्रत्रत्रत्र

[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--239 GI/2019

(163)164 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 165

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•भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 169 170 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 171 172 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 173 174 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 175 176 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 177 178 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 179 180 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 181 182 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 183 184 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 185 186 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 187 188 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 189 190 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 191 192 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 193 194 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 195 196 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 197 198 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 199 200 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 201 202 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 203 204 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 205 206 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 207 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 208 [भाग III—खण्ड 4 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) भाग III—खण्ड 4] 209 210 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 211 •212 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 213 214 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 215 216 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 217 218 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 219 220 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 221 222 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 223 224 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 225

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•भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 229 `230 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 231 `232 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 233 `234 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 235 `

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`236 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 237 238 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `

`भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 239 `

`240 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `

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`भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 243 `244 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `

`भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 245 `246 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `

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"भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 247 `248 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 249 250 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 251 `

` `252 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 253 `254 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 255 256 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 257 ``

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`भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 259 `

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`260 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 ``

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`भाग III—खण्ड 4] भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) 261 `

`262 भारत का राजपत्र, सितम्बर 14, 2019 (भाद्रपद 23, 1941) [भाग III—खण्ड 4 `PART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 263

RESERVE BANK OF INDIA

(DEPARTMENT OF BANKING REGULATION)

Mumbai-400001, the 17th July 2019

DBR.PSBD. No. 503/16.01.160/2019-20—In pursuance of clause (c) of sub-section (6) of Section 42 of Reserve Bank of India Act, 1934 (2 of 1934), the Reserve Bank of India hereby directs that the following alterations shall be made with effect from June 10, 2019 in the Second Schedule to the said Act, namely:—

For the words "The Catholic Syrian Bank Limited", the words "CSB Bank Limited" shall be substituted.

LILY VADERA Executive Director

GSR ORDER

Date : 30 July 2019

No. GSR

In pursuance of Section 48(5) of the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981), the Balance Sheet of the National Bank for Agriculture and Rural Development as on 31 March 2019, the Profit and Loss Account for the year ended 31 March 2019 (April 2018—March 2019) and the Report of the Auditors for the year are published herewith.

A K PARHI Chief General Manager & Secretary National Bank for Agriculture and Rural Development (NABARD) Mumbai

ANNUAL ACCOUNTS 2018—19 Balance Sheet Profit & Loss Account & Cash Flow 2018—19 of NABARD

INDEPENDENT AUDITOR'S REPORT

To:

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

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION 1. We have audited the accompanying Standalone Financial Statements of National Bank for Agriculture and Rural Development ('the Bank' or 'NABARD'), which comprise the Balance Sheet as at March 31, 2019, Profit and Loss Account and the Cash Flow Statement for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information ('Standalone Financial Statements').

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements exhibit a true and fair view, in conformity with the accounting principles generally accepted in India, of the state of affairs of the Bank as at March 31, 2019, its profits and its cash flows for the year ended on that date.

BASIS OF OPINION 2. We conducted our audit in accordance with the Standards on Auditing ('SAs') issued by the Institute of Chartered Accountants of India ('ICAI'). Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. Those Standards require that we comply with ethical requirements. We are independent of the Bank in accordance with the Code of Ethics issued by ICAI and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.

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

Incorporated in these financial statements are the returns of 17 Regional Offices and 1 Training Centre visited by us for the purposes of audit and the same including Head Office, account for 81.46% of advances, 99.99% of deposits,264 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4 82.36% of interest income and 99.25% of interest expenses. These Offices and Training Centre have been selected in consultation with the management of the Bank. We have not visited other remaining offices of the Bank i.e. 14 Regional Offices and 2 Training Centres but have reviewed their returns at the Head Office.

KEY AUDIT MATTERS 3. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements for the year. These matters were addressed in the context of our audit of the Standalone Financial Statements, as a whole, and in forming our opinion thereon, we do not provide a separate opinion on the key audit matters. In our professional judgement, we have decided the following to be the key audit matter to be communicated in our report:

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON 4. The Bank's management and Board of Directors are responsible for the preparation of the other information, comprising of the information such as Report of Board of Directors and such other disclosures included in the Bank's annual report, excluding the Financial Statements and auditors' report thereon ('Other Information').

The other information is expected to be made available to us after the date of this auditors' report. Our opinion on the standalone Financial statements does not cover the other information and we do not express any form of assurance or conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the other Information and if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charges with governance as required under SA 720 'The Auditor's responsibilities Relating to other Information'.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS 5. Management of the Bank is responsible for the preparation of the Standalone 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, 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.

In preparing the Standalone Financial Statements, the Management and Board of Directors are responsible for assessing the Bank's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Bank's financial reporting process.

AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS 6. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements, as a whole, are free from material misstatement, whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements. Our audit process in accordance with the SAs is narrated in Annexure 1 to this report.

OTHER MATTER 7. The comparative financial information of the Bank for the previous year ended March 31, 2018 included in these Standalone Financial Statements, are based on the previously issued statutory financial statements prepared in accordance with accounting principles generally accepted in India, as audited by Vyas & Vyas, Chartered Accountants for the year ended March 31, 2018 whose reports dated May 25, 2018 expressed an unmodified opinion on those financial statements. Our opinion is not modified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 8. 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 in course of our audit, 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 centers not visited by us.

d. In our opinion, the Standalone Financial Statements comply with the applicable accounting standards.

For Khimji Kunverji & Co LLP

(Formerly Khimji Kunverji & Co)

Chartered Accountants

Firm's Registration No: 105146W

Hasmukh B. Dedhia

Partner Membership No: 033494

Place: Mumbai Date: 22 May 2019266 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4 Annexure 1 to the Independent Auditors' Report (referred to in para 6 titled "Auditor's Responsibilities for the Audit of the Standalone Financial Statements")

As part of our audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, to design and perform audit procedures responsive to those risks, and obtain audit evidence for material items that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management of the Bank.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Bank to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

• From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our Auditor's Report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

CONSOLIDATED BALANCE SHEET AS ON 31 MARCH 2019

(` in thousands)

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

CONSOLIDATED BALANCE SHEET AS ON 31 MARCH 2019

Schedules referred to above form an integral part of accounts

As per our attached report of even date Khimji Kunverji & Co. LLP (formerly Khimji Kunverji & Co) Chartered Accountants FRN : 105146W

Hasmukh Dedhia Sudhir Kumar Jannawar Partner Chief General Manager M No. F-033494 Accounts Department

Harsh Kumar Bhanwala R Amalorpavanathan Anil Kumar Bansal C Parthasarathi Chairman Deputy Managing Director Director Director

Mumbai Date : 22 May 2019PART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 269

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

STAND ALONE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2019

Schedules referred to above form an integral part of accounts270 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

PROFIT AND LOSS APPROPRIATION ACCOUNT

Schedules referred to above form an integral part of accounts

As per our attached report of even date Khimji Kunverji & Co. LLP (formerly Khimji Kunverji & Co) Chartered Accountants FRN : 105146W

Hasmukh Dedhia Sudhir Kumar Jannawar Partner Chief General Manager M No. F-033494 Accounts Department

Harsh Kumar Bhanwala R Amalorpavanathan Anil Kumar Bansal C Parthasarathi Chairman Deputy Managing Director Director Director

A.K. Parhi, Chief General Manager & Secretary

Mumbai Date : 22 May 2019PART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 271

SCHEDULES TO BALANCE SHEET

Schedule 1 - Reserve Fund and Other Reserves

(` in thousands)

Schedule 2 - National Rural Credit Funds

*Refer B-2 of Schedule 18

NABARD is acting as a 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.

Includes income tax paid on interest differential credited to funds:

(i) ` 25.69 crore

(ii) ` 35.03 crore

(iii) ` 116.76 crore

(iv) ` 56.04 crorePART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 273

Schedule 4 - Government Schemes

*Refer B-2 of Schedule 18274 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4 NABARD is acting as a 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

Schedule 6 - Bonds and Debentures

Schedule 7 – Borrowings

Schedule 8 - Current Liabilities and Provisions

Schedule 9 - Cash and Bank Balances

Schedule 10 – Investments

All the above investments are made in India278 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4

Schedule 11 – Advances

(` in thousands)

Schedule 12 – Property, Plant and Equipment (Fixed Assets)

Schedule 13 - Other Assets

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, 2019

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 from 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 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. Property Plant and Equipment (Fixed Assets)

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 policy on premises situated on freehold land and leasehold land has been revised during the FY 2017- 18 and calculated on straight line basis over the period of 30 years.

e) -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.

f) 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:

g) Depreciation is charged from the month the asset is capitalized in the year of purchase and till the month the asset is sold in the year of sale.

h) 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.

e) Investments under "AFS" are marked to market, scrip-wise, at the rate, declared by Fixed Income Money Market and Derivative Association of India (FIMMDA) and by Financial Benchmarks India Pvt. Ltd. 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 Fixed Income Money Market and Derivative Association of India (FIMMDA) and by Financial Benchmarks India Pvt. Ltd. Depreciation / appreciation is recognized in the category for investments classified as "HFT". The book value of the individual scrip is changed after 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 guidelines.

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 investments 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.

p) Investments in Venture Capital Funds are accounted as per the accounting policy adopted by the respective Fund.

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 Profit and Loss account.

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 as at the close of the year. The hedged portion of the foreign currency borrowings are stated at the contracted value and the liability of hedged borrowing as per year-end exchange rate is disclosed as a contra item in the Balance Sheet (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 currency borrowings which are hedged are stated at the contract rate.

c) The foreign exchange unhedged 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.

d) 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", aPART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 287 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 entitled for compensated absences. All the eligible employees are also entitled 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) 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, 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.

15. Prior Period Income / Expenses

Items of Income / Expenditure which are prior period in nature is disclosed separately only when the individual prior period income / expense exceeds 0.5% of Gross Income.

16. Implementation of Indian Accounting Standards (Ind AS)

In terms of the Press Release No. 11/10/2009 CL-V dated 18 January 2016 issued by the MCA, the bank would be required to prepare Ind AS based financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 and thereafter. The implementation of Ind AS by AIFIs has been deferred by Reserve Bank of India until further notice.

B. NOTES FORMING PART OF THE ACCOUNTS

1. 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 other loans and disclosed under Schedule 11. The borrowing related to the UPNRM are classified as borrowing from international agencies and disclosed under Schedule 7. During the year, a sum of `56.98 crore representing expenditure over income under the fund has been charged to Profit & Loss Account.

2. 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:

3. Recoverable from Government of India/International Agencies (Refer Schedule-13 of Balance Sheet) includes `1.44 crore (`43.35 crore) being debit balance of various funds. The details of such funds are as under:

(Amount in ` crore)

4. Sundry creditors includes `30.43 crore (`30.32 crore) being amounts outstanding to contributors in respect of Micro Finance Development and Equity Fund (MFDEF).

5. 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, Warehousing Infrastructure Fund (WIF) deposits and Food Processing Fund, placed by the Commercial Banks is credited to Watershed Development Fund, Tribal Development Fund, Financial Inclusion Fund and PODF. Previous year, the amounts were credited to Watershed Development Fund, Tribal Development Fund, Financial Inclusion Fund and PODF.

6. Interest Subvention received/receivable from Government of India (GOI) under various schemes has been adjusted from Interest and financial charges under Schedule 14. The amount of Interest subvention adjusted under different schemes is given below:

(Amount in ` crore)

7. Other Income includes `106.90 crore (`123.03 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.

8. The salaries and allowances of the employees of the Bank are reviewed every five years. The review is due from 01 November 2017. Pending such settlement, an amount of `200 crore (`100 crore) has been provided under the head Salary and Allowances during the year.

9. 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 asset of `9.21 crore (`13.15 crore). The details of the deferred tax are as under:

(Amount in ` 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.

10. 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.

11. Income Tax Department had reopened the assessment for the Assessment Year (AY) 2007-08, AY 2008-09 and AY 2009-10, which was ruled against by the Commissioner of Income Tax – Appeals [CIT(A)]. The Income Tax department has preferred appeal against the order of CIT(A) with ITAT, Mumbai.Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

12. 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, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

13. During the Assessment of the Income for the Assessment Year 2011-12 a tax liability of `294.31 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

14. During the Assessment of the Income for the Assessment Year 2012-13 a tax liability of `340.81 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

15. During the Assessment of the Income for the Assessment Year 2013-14 a tax liability of `392.94 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

16. During the Assessment of the Income for the Assessment Year 2014-15 a tax liability of `438.37 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

17. During the Assessment of the Income for the Assessment Year 2015-16 a tax liability of `428.16 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

18. During the Assessment of the Income for the Assessment Year 2016-17 a tax liability of `372.00 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds. However, the Bank has filed an appeal against the above order with CIT(A).

19. (a) Free hold land and Lease Land and Premises include `14.00 crore (`14.00 crore) paid towards Office Premises and Staff Quarters for which conveyance is yet to be completed.

(b) The depreciation policy for premises on leasehold land and free hold land has been revised during the FY 2017-18. The change in depreciation policy had resulted in reversal of excess depreciation of Rs. 10.39 crore during the FY 2017-18.

20. 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.

21. 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.

22. As on the date of the financial statements, out of the disbursement extended to various State Governments under RIDF, `472.56 crore (`560.63 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.

23. 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.Accordingly, `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 ` 365.74 crore (`.365.79 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

24. 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 ` 33.78 crore (`15.92 crore) made in the units of VCF was shifted from HTM category, on completion of 3 years, to AFS category

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

(Amount in ` crore)

26. Disclosure required under AS 15 (Revised) on "Employee Benefits"

26.1 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.

26.1.1 Pension

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

Amount in ` crore)

b. Amount recognized in the Balance Sheet as on 31 March 2019 and previous year from 2014-15 to 2017-18:

(Amount in ` crore)

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

(Amount in ` crore)

d. Actuarial assumptions:

26.1.2 Gratuity

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

(Amount in ` crore)

b. Amount recognized in Balance Sheet as on 31 March 2019 and P.Y. from 2014-15 to 2017-18

(Amount in ` crore)

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

(Amount in ` crore)

d. Actuarial assumptions:

26.1.3 Encashment of Ordinary Leave

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

(Amount in ` crore)

b. Amount recognized in Balance Sheet as on 31 March 2019 and P.Y. from 2014-15 to 2017-18

(Amount in ` crore)

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

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

(Amount in ` crore)

d. Actuarial assumptions:

26.1.4 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 ` 4.04 crore (`4.18 crore).

26.1.5 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.

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

26.1.7 Amortisation of Post-retirement benefits

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

26.1.8 Investment under Plan Assets of Pension, Gratuity & Leave Encashment Fund as on 31 March 2019

26.2 Defined Contribution Plan:

a. 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 `30.18 crore (`92.84 crore) with RBI. b. The employees' recruited on or after 01 January 2012 are covered under New Pension Scheme, which is a defined contribution plan. During the year the bank has contributed `2.95 crore(`2.23 crore) to the said scheme.

27. Capital

27.1 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 as on 31 March 2018 was at 99.60%: 0.40%. During the current year, balance shareholding of RBI has been transferred to Government of India, as such, as on 31 March 2019, the entire share capital is subscribed by Government of India. The details are given below:

Pursuant to increase of Authorized Capital of NABARD to `30000 crore vide gazette notification No. 1410 dated 10 April 2018, the balance of `5580 crore held as Advance towards Capital Account has been transferred to Share Capital Account during the year 2018-19. During the year an amount of Rs. 2000 crore was infused by GoI towards Capital of NABARD in three tranche (Rs. 500 crore on 08 June 2018, Rs. 1000 crore on 10 October 2018 and Rs. 500 crore on 31 December 2018).

27.2 Capital Adequacy

27.2.1 Capital adequacy ratio of the Bank as on 31 March 2019 was 18.96% (18.85%) as against a minimum of 9% as stipulated by RBI.

27.2.2 In accordance with RBI Instructions, assets financed from National Rural Credit – Long Term Operations (NRC LTO) Fund amounting to `14493 (`14491) crore are excluded for the purpose of computing the CRAR.

27.2.3 The details of various parameters of Capital to Risk weighted Assets Ratio is given below:

(Amount in ` crore)

28. Provisions on Standard Assets

(Amount in ` crore)

29. Floating Provisions

(Amount in ` crore)

30. Asset Quality and specific provisions

30.1 Non-Performing Advances

(Amount in ` crore)

30.2 Non-Performing Investments

(Amount in ` crore)

30.3 Non-Performing Assets (30.1+30.2)

(Amount in ` crore)

30.4 Particulars of Accounts Restructured

During the current financial year one loan account was restructured.

30.5 Movement of Non-Performing Advances

(Amount in ` crore)

30.6 Write-offs and recoveries

(Amount in ` crore)

Note: Technical or prudential write-off is the amount of non-performing loans which are outstanding in the books of the branches, but have been written-off (fully or partially) at Head Office level.

30.7 Overseas Assets, NPAs and Revenue

(Amount in ` crore)

30.8 Depreciation and provisions on investments

(Amount in ` crore)

* the figures are excluding investments in Special Dev Debentures of SCARDBs

30.9 Provisions and Contingencies

(Amount in ` crore)

30.10 Provisioning Coverage Ratio (PCR)

PCR [ratio of provisioning (including counter cyclical provisioning buffer) to gross non-performing assets] as at close of business for the current year stood at 103.67% (108.24%).

30.11 Loan under Scheme for Sustainable Structuring of Stressed Assets (S4A)

During the year 2016-17, resolution plan for stressed loan account (HCC) to the extent of ` 46.91 crore was considered under Scheme for Sustainable Structuring of Stressed Assets. The details of resolution plan is given below:

The net outstanding of the above loan account stood at ` 35.11 crore (` 33.60 crore) as on 31 March 2019. The account is continued as NPA and 100% provision held against the outstanding balance as per S4A guidelines. An amount of `1.75 crore (`7.71 crore) received under S4A arrangement has been kept in Debt Servicing Reserve account.

31. Investment portfolio: constitution and operations

31.1 Repo Transactions

(Amount in ` crore)

31.2 Disclosure of Issuer Composition for Investment in Debt Securities

(Amount in ` crore)

31.3 Sale and Transfers to / from HTM Category

During the year, securities amounting to ` 60 crore (` 2849.67 crore) was transferred from HTM to AFS category and securities amounting to ` 1674 crore (`2500 crore) was transferred from AFS to HTM category. The market value of Investments held under Held to Maturity (HTM) category as on 31 March 2019 was `6527.28 crore (`5107.50 crore) against the book value of `6663.92 crore(`5396.44 crore). The excess of book value over market value was `136.64 crore (`288.94 crore) for which no provision was made as per RBI guidelines.

32. Details of Financial Assets purchased/ sold

32.1 Details of Financial Assets sold to Securitisation / Reconstruction Company for Asset Reconstruction

A. Details of Sales : NIL

B. Details of Book Value of Investments in Security Receipts : NIL

32.2 Details of Non Performing Financial Assets Purchased / Sold

A. Details of non performing financial assets purchased : NIL

B. Details of non performing financial assets sold : NIL

32.3 Operating Results

33 Credit Concentration risk

33.1. Capital market exposure

(Amount in ` crore)

33.2 Exposure to Country risk : NIL

33.3 Prudential Exposure Limits - Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the AIFI

33.3.1 The number and amount of exposures in excess of the prudential exposure limits during the year: NIL

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

(Amount in ` crore)

33.3.3 Credit exposure to the five largest industrial sectors as percentage to total loan assets: Not Applicable304 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4 33.3.4 Factoring exposures : Not Applicable

33.3.5 Exposure where the FI had exceeded that Prudential Exposure Limits during the year : NIL

33.4 Concentration of borrowings / lines of credit, credit exposures and NPAs

(a) Concentration of borrowings and lines of credit

(Amount in ` crore)

(b) Concentration of credit exposures

(Amount in ` crore)

(c) Sector-wise concentration of exposures and NPAs

The sector wise concentration of exposure and NPAs is given below:

(Amount in ` crore)

34. Derivatives

34.1 Forward Rate Agreement / Interest Rate Swap – NIL

34.2 Exchange Traded Interest Rate derivatives – NIL

34.3 Disclosure on Risk exposure in derivatives:

(i) The Bank does not trade in derivatives. However, it has hedged its International Borrowings to the extent of 94.46 million Euro (103.49 million Euro) and 50 nillion USD (0 USD). Consequent upon hedging of foreign currency borrowings the same is shown at contracted value as per the Swap agreement. The bank have open exposure of 1.08 million in Euro as on 31 March 2019.

(ii) The value of outstanding principal amount of hedge contract at the year–end exchange rate stood at`1088.25 crore (`834.39 crore). The value of outstanding principal liability in the books of account stood at `1093.65 crore (`811.88 crore). The quantitative disclosure in this regard is as under:—

(Amount in ` crore)

35 Letters of Comfort (LoCs) issued by AIFIs : NIL

36 Asset Liability Management

The maturity pattern of assets and liabilities are prepared in terms of the ALCO policy of the bank as under:—

(Amount in ` crore)

37. Draw Down from Reserves: NIL

38. Business Ratios

39. Disclosure of Penalties imposed by RBI - NIL

40. Disclosure of Complaints

(a) Customer Complaints

41. Off-Balance Sheet SPVs Sponsored (which are required to be consolidated as per accounting norms)

There are no SPVs sponsored by NABARD

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

(Amount in `crore)

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

(Amount in `crore)

44. Accounting Standard 18 – Related Party Disclosures

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:

b) Key Management Personnel:

(Amount in ` 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. c) 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

(Amount in ` crore)

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

45. Figures in brackets pertain to previous year.

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

As per our attached report of even date

Khimji Kunverji & Co. LLP (formerly Khimji Kunverji & Co) Chartered Accountants FRN : 105146W

Hasmukh Dedhia Sudhir Kumar Jannawar Partner Chief General Manager M No. F-033494 Accounts Department

Harsh Kumar Bhanwala R Amalorpavanathan Anil Kumar Bansal C Parthasarathi Chairman Deputy Managing Director Director Director

A K Parhi Chief General Manager & Secretary

Mumbai Date : 22 May 2019PART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 309

National Bank for Agriculture and Rural Development

Cash flow for the year ended 31 March 2019

(` in thousands)

As per our attached report of even date

Khimji Kunverji & Co. LLP (Formerly Khimji Kunverji & Co) Chartered Accountants FRN: 105146W

Hasmukh Dedhia Sudhir Kumar Jannawar Partner Chief General Manager M No. F-033494 Accounts Department

Harsh Kumar Bhanwala R Amalorpavanathan Anil Kumar Bansal C Parthasarathi Chairman Deputy Managing Director Director Director

A K Parhi Chief General Manager & Secretary

Mumbai Date: 22 May 2019PART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 311

Annual Accounts 2018-19

Consolidated Balance Sheet Profit & Loss account & Cash Flow 2018-19 of NABARD & Subsidiaries

(NABCONS, NABKISAN, NABSAMRUDDHI, NABFINS, NABVENTURES)

INDEPENDENT AUDITOR'S REPORT

To:

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

REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

OPINION

1. We have audited the accompanying Consolidated Financial Statements of National Bank for Agriculture and Rural Development ('the Holding Bank' or 'NABARD') and its subsidiaries (the Holding Bank and its subsidiaries collectively referred to as the 'Group'), which comprise the Consolidated Balance Sheet as at March 31, 2019, Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year then ended, and notes to the Consolidated Financial Statements, including a summary of significant accounting policies and other explanatory information ('Consolidated Financial Statements' or 'CFS').

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid CFS, exhibit a true and fair view, in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2019, its consolidated profits and its consolidated cash flows for the year ended on that date.

BASIS OF OPINION

2. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India ('ICAI'). Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. Those Standards require that we comply with ethical requirements. We are independent of the Group in accordance with the Code of Ethics issued by the ICAI and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide the basis for our opinion.

Incorporated in these CFS are the returns of 17 Regional Offices and 1 Training Centre of NABARD visited by us for the purposes of audit and the same including Head Office, account for 81.46% of advances, 99.99% of deposits, 82.36% of interest income and 99.25% of interest expenses. These Offices and Training Centre have been selected in consultation with the management of the Holding Bank. We have not visited other remaining offices of the Holding Bank i.e. 14 Regional Offices and 2 Training Centers but have reviewed their returns at the Head Office.

KEY AUDIT MATTERS

3. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the CFS for the year under audit. These matters were addressed in the context of our audit of the CFS, as a whole and in forming our opinion thereon, we do not provide a separate opinion on these matters. In our professional judgment, we have decided the following to be the key audit matter to be communicated in our report.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

4. The Management and Board of Directors of the Holding Bank are responsible for the preparation of the other information, comprising of the information such as Report of Board of Directors and such other disclosures included in the Holding Bank's annual report, excluding the Financial Statements and auditors' report thereon ('Other Information')

The other information is expected to be made available to us after the date of this auditors' report. Our opinion on the CFS does not cover the other information and we do not express any form of assurance or conclusion thereon.

In connection with our audit of the CFS, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the CFS or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the other Information and if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charges with governance as required under SA 720 'The Auditor's responsibilities Relating to other Information'

MANAGEMENT'S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

5. The Management of the Holding Bank is responsible for the preparation of the CFS in accordance with the National Bank for Agriculture and Rural Development (Additional) General Regulations, 1984, that give a true and fair view of the consolidated financial position, consolidated financial performance, and consolidated cash flows of the Group. This responsibility also includes maintenance of adequate accounting records for safeguarding the assets of the Group 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, 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 CFS that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the CFS, the respective Management and Board of Directors of the holding Bank and of companies included in the Group are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the holding Bank and of the companies included in the Group are also responsible for overseeing the Group's financial reporting process.

AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF THE CONSOLIDATEDFINANCIAL STATEMENTS

6. Our objectives are to obtain reasonable assurance about whether the CFS, as a whole, are free from material misstatement, whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these CFS. Our audit process in accordance with the SAs is narrated in detail in Annexure 1 to this report.

OTHER MATTERS

7. a) We did not audit the financial statements/financial information of 5 (five) subsidiaries, whose financial statements/ financial information reflect total assets of Rs. 2,96,72,797 thousandsas at 31 March, 2019, total revenues of Rs. 36,37,032 thousands and net cash outflows amounting to Rs. 2,03,607 thousands for the year ended on that date, as considered in the CFS. 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 CFS, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is solely on the reports of the other auditors. Our opinion on the CFS and our report on Other Legal and Regulatory Requirements, 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.

b) The comparative financial information of the Group for the year ended March 31, 2018 included in these CFS, are based on the previously issued statutory financial statements prepared in accordance with accounting principles generally accepted in India, audited by Vyas & Vyas, Chartered Accountants for the year ended March 31, 2018 whose reports dated May 25, 2018 expressed an unmodified opinion on those financial statements. Our opinion is not modified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

8. We report that the CFS have been prepared by the holding bank in accordance with the requirements of Accounting Standard (AS) 21 – 'Consolidated Financial Statements'. In our opinion, the CFS comply with the applicable accounting standards.

For Khimji Kunverji & Co. LLP

(formerly Khimji Kunverji & Co.)

Chartered Accountants

Firm's Registration No: 105146W

Hasmukh B. Dedhia

Partner

Place: Mumbai

Membership No: 033494

Date: May 22, 2019314 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4 Annexure 1 to the Independent Auditors' Report

(referred to in para 6 titled "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements")

As part of our audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, to design and perform audit procedures responsive to those risks and obtain audit evidence for material items that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management of the Group.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the CFS or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the CFS, including the disclosures, and whether the CFS represent the underlying transactions and events in a manner that achieves fair presentation.

• Communicate with those charged with governance of the Holding Bank regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

• Review of the audited financial statements of the subsidiaries, not audited by us, and communicating with the respective statutory auditors of such subsidiaries as per the framework of provisions of SA 600, "Using the Work of Another Auditor".

• From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our Auditor's Report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

CONSOLIDATED BALANCE SHEET AS ON 31 MARCH 2019

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

CONSOLIDATED BALANCE SHEET AS ON 31 MARCH 2019

Schedules referred to above form an integral part of accounts

As per our attached report of even date Khimji Kunverji & Co. LLP (formerly Khimji Kunverji & Co.) Chartered Accountants FRN : 105146W

Hasmukh Dedhia Sudhir Kumar Jannawar Partner Chief General Manager M No. F-033494 Accounts Department

Harsh Kumar Bhanwala R Amalorpavanathan Anil Kumar Bansal C Parthasarathi Chairman Deputy Managing Director Director Director

A K Parhi Chief General Manager & Secretary

Mumbai Date : 22 May 2019PART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 317

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2019

Schedules referred to above form an integral part of accounts318 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

CONSOLIDATED PROFIT AND LOSS APPROPRIATION ACCOUNT

Schedules referred to above form an integral part of accounts

As per our attached report of even date Khimji Kunverji & Co. LLP (formerly Khimji Kunverji & Co.) Chartered Accountants FRN : 105146W

Hasmukh Dedhia Sudhir Kumar Jannawar Partner Chief General Manager M No. F-033494 Accounts Department

Harsh Kumar Bhanwala R Amalorpavanathan Anil Kumar Bansal C Parthasarathi Chairman Deputy Managing Director Director Director

A K Parhi Chief General Manager & Secretary

Mumbai Date : 22 May 2019PART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 319

SCHEDULES TO BALANCE SHEET

Consolidated Schedule 1 - Reserve Fund and Other Reserves

SCHEDULE TO CONSOLIDATED BALANCE SHEET

Consolidated Schedule 1A - Minority Interest

Consolidated Schedule 2 - National Rural Credit Funds

Consolidated Schedule 3 - Gifts, Grants, Donations and Benefactions

*Refer B-2 of Schedule 18

NABARD is acting as a 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.

includes income tax paid on interest differential credited to funds:

(i) ` 25.69 crore (ii) ` 35.03 crore (iii) `116.76 crore (iv) `56.04 crore322 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4

Consolidated Schedule 4 - Government Schemes

*Refer B-2 of Schedule 18

NABARD is acting as a 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

Consolidated Schedule 6 - Bonds and Debentures

Consolidated Schedule 7 – Borrowings

Consolidated Schedule 8 - Current Liabilities and Provisions

Consolidated Schedule 9 - Cash and Bank Balances

Consolidated Schedule 10 – Investments

All the above investments are made in India326 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4

Consolidated Schedule 11 – Advances

Consolidated Schedule 12 – Property, Plant and Equipment (Fixed Assets)

Consolidated Schedule 13 - Other Assets

Consolidated Schedule 14 - Interest and Financial Charges

Consolidated Schedule 15 A - Establishment and Other Expenses

Consolidated Schedule 15 B - Expenditure on promotional activities

Consolidated Schedule 16- Provisions

Consolidated Schedule 17 - Commitments and Contingent Liabilities

National Bank for Agriculture and Rural Development

Cash flow for the year ended 31 March 2019

As per our attached report of even date Khimji Kunverji & Co. LLP (formerly Khimji Kunverji & Co.) Chartered Accountants FRN : 105146W

Hasmukh Dedhia Sudhir Kumar Jannawar Partner Chief General Manager M No. F-033494 Accounts Department

Harsh Kumar Bhanwala R Amalorpavanathan Anil Kumar Bansal C Parthasarathi Chairman Deputy Managing Director Director Director

A K Parhi Chief General Manager & Secretary

Mumbai Date : 22 May 2019PART III—SEC. 4] THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) 333 Schedule 18

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS

FOR THE YEAR ENDED MARCH 31, 2019

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. 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 forlike transactions and events in similar circumstances and necessary adjustments required for deviations, if any to the extent possible, are made in the consolidated financialstatements 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 samereporting date as that of the Bank.

The Notes and Significant accounting policies to the Consolidated Financial Statements areintended to serve as a means of informative disclosure and a guide to betterunderstanding of the consolidated position of the Group. In this respect, the Bankhas disclosed such notes and policies which fairly present the needed disclosures, and suchother notes and statutory conformationdisclosed in the financial statements of the parentand the subsidiary companies which are not having any effect on the true and fairview of the Consolidated Financial statements are excluded.

The financial statements of the Bank and its subsidiaries have been combined on aline-by-line basis by adding together thebook values of like items of assets, liabilities, income and expenses after fully eliminating intra-group balances and intra-grouptransactions. The unrealized profits or losses resulting from the intra-group transactions have been eliminated and unrealized lossesresulting 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 andadjusted against the profit after tax toarrive at the net income attributable to shareholders. Share of minority interest in losses of the consolidated subsidiaries, if exceedsthe 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 fromliabilities 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 (cid:1)10,000 at each accounting unit, under a single head ofexpenditure.

v) Upfront processing fees collected from customers for processing loans.

vi) Monitoring cost received by NABCONS under DDU-GKY scheme

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 are accounted on realization basis.

5.6 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

5.7 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.

5.8 Income from services (NABCONS)

5.8.1 Income from Assignments: Income from assignments constitute the main source of income for the Company. Recognition of revenue and corresponding expenses incurred on particular assignments aretaken 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 other assignments where execution is spread over a period, the income has been recognized based on the milestones completed and deliveries effected, status of execution and period completed.

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

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

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

5.8.4 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.

5.8.5 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. Property, Plant and Equipment (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 policy on premises situated on freehold land and leasehold land has been revised during the FY 2017- 18 and calculated on straight line basis over the period of 30 years.

e) 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.

f) 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:

g) Depreciation policy has been revised during the previous year, accordingly depreciation is charged from the month the asset is capitalized in the year of purchase and till the month the asset is sold in the year of sale. Hitherto, depreciation was charged for the full year, irrespective of the date of purchase of asset and no depreciation was charged in the year of sale.

h) Capital work in progress includes capital advances and is disclosed under Fixed Assets. i) In case of subsidiaries the depreciation on fixed assets is provided on following basis

7. 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.

e) Investments under "AFS" are marked to market, scrip-wise, at the rate, declared by Fixed Income Money Market and Derivative Association of India (FIMMDA) and by Financial Benchmarks India Pvt. Ltd. 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 Fixed Income Money Market and Derivative Association of India (FIMMDA) and by Financial Benchmarks India Pvt. Ltd. Depreciation / appreciation is recognized in the category for investments classified as "HFT". The book value of the individual scrip is changed after 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 guidelines.

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 investments 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. p) Investments in Venture Capital Funds are accounted as per the accounting policy adopted by the respective Fund.

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.

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 Profit and Loss account.

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:

a) Assets and liabilities in foreign currency are revalued at the exchange rate notified by Reserve Bank of India as at the close of the year.The hedged portion of the foreign currency borrowings are stated at the contracted valueand the liability of hedged borrowing as per year-end exchange rate is disclosed as a contra item in the Balance Sheet (as off Balance Sheet item).

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

10. Accounting for Foreign Exchange Contracts

a) Foreign Exchange Contracts are to hedge the repayment of foreign currency borrowings. b) The foreign currency borrowings which are hedged are stated at the contract rate. c) The foreign exchange unhedged 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.

d) 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.

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

(a) 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.

(b) 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.

(c) In case of NABCONS, Provision for Bonus has been made for FY 2018-19 only, however, pending detailed legal opinion the provision for bonus for the period 01 April 2014 to 31 March 2018 has not been made.

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 entitled for compensated absences. All the eligible employees are also entitled 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".

b) 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, and 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

(a) 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) Cash Flow statement is reported using Indirect method. The cash flow from operating, financing and investing activity is segregated based on the available information.

17. Prior Period Income / Expenses

Items of Income / Expenditure which are prior period in nature is disclosed separately only when the individual prior period income / expense exceeds 0.5% of Gross Income.

18. Implementation of Indian Accounting Standards (Ind AS)

In terms of the Press Release No. 11/10/2009 CL-V dated 18 January 2016 issued by the MCA, the bank would be required to prepare Ind AS based financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 and thereafter. The implementation of Ind AS by AIFIs has been deferred by Reserve Bank of India until further notice.

B. NOTES FORMING PART OF THE ACCOUNTS 1. 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 11. The borrowing related to the UPNRM are classified as borrowing from international agencies and disclosed under Schedule 7. During the year, a sum of `56.98 crore representing expenditure over income under the fund has been charged to Profit & Loss Account.

2. 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:

3. Recoverable from Government of India/International Agencies (Refer Schedule-13 of Balance Sheet) includes ` 1.44 crore (` 43.35crore) being debit balance of various funds. The details of such funds are as under:

(Amount in ` crore)

4. Sundry creditors includes ` 30.43 crore (` 30.32 crore) being amounts outstanding to contributors in respect of Micro Finance Development and Equity Fund (MFDEF).

5. 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, Warehousing Infrastructure Fund (WIF) deposits and Food Processing Fund, placed by the Commercial Banks is credited to Watershed Development Fund, Tribal Development Fund, Financial Inclusion Fund and PODF. Previous year, the amounts were credited to Watershed Development Fund, Tribal Development Fund, Financial Inclusion Fund and PODF.

6. Interest Subvention received/receivable from Government of India (GOI) under various schemes has been adjusted from Interest and financial charges under Schedule 14. The amount of Interest subvention adjusted under different schemes is given below:

(Amount in ` crore)

7. Other Receipts includes ` 106.90 crore (` 123.03 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.

8. The salaries and allowances of the employees of the Bank are reviewed every five years. The review is due from 01 November 2017. Pending such settlement, an amount of ` 200 crore (` 100crore) has been provided under the head Salary and Allowances during the year.

9. 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 `9.21 crore (` 13.15crore). The details of the deferred tax are as under:

(Amount in ` 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.

10. 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.

11. Income Tax Department had reopened the assessment for the Assessment Year (AY) 2007-08, AY 2008-09 and AY 2009-10, which was ruled against by the Commissioner of Income Tax–Appeals [CIT(A)]. The Income Tax department has preferred appeal against the order of CIT(A) with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

12. 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, which was struck down by CIT(A). The340 THE GAZETTE OF INDIA, SEPTEMBER 14, 2019 (BHADRA 23, 1941) [PART III—SEC. 4 Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

13. During the Assessment of the Income for the Assessment Year 2011-12 a tax liability of ` 294.31 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

14. During the Assessment of the Income for the Assessment Year 2012-13 a tax liability of ` 340.81 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

15. During the Assessment of the Income for the Assessment Year 2013-14 a tax liability of ` 392.94 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

16. During the Assessment of the Income for the Assessment Year 2014-15 a tax liability of ` 438.37 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

17. During the Assessment of the Income for the Assessment Year 2015-16 a tax liability of ` 428.16 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds, which was struck down by CIT(A). The Income Tax department has preferred appeal against the CIT(A) order with ITAT, Mumbai. Pending appeal with ITAT, the refund received from the IT department is held in Income Tax Refund Account.

18. During the Assessment of the Income for the Assessment Year 2016-17 a tax liability of ` 372.00 crore was assessed on account of differential interest accounted under the RIDF/STCRC funds. However, the Bank has filed an appeal against the above order with CIT(A).

19. (a) Free hold land and Lease Land and Premises include ` 14.00 crore (` 14.00 crore) paid towards Office Premises and Staff Quarters for which conveyance is yet to be completed.

(b) The depreciation policy for premises on leasehold land and free hold land has been revised during the FY 2017-18. The change in depreciation policy had resulted in reversal of excess depreciation of ` 10.39 crore during the FY 2017-18.

(c) 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.

20. 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.

21. As on the date of the financial statements, out of the disbursement extended to various State Governments under RIDF, ` 472.56 crore (` 560.63 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.

22. 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.Accordingly, ` 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 ` 365.74 crore (` 365.79 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

23. In terms of RBI Circular RBI/2015-16/104 DBR 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 ` 33.78 crore (` 15.92 crore) made in the units of VCF was shifted from HTM category, on completion of 3 years, to AFS category

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

(Amount in ` crore)

25. The disclosures required to be given by financial institutions pursuant to RBI Master Direction-Reserve Bank of India (Financial Statements of All India Financial Institutions–Presentation, Disclosure and Reporting Directions 2016) dated 23 June 2016 not being considered relevant for consolidated financial statements of the group and hence the same are not contained in the notes.

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

(Amount in ` crore)

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

(Amount in ` crore)

28. Accounting Standard 18 – Related Party Disclosures

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) Key Management Personnel:

Transactions with Key Management Personnel:

(Amount in ` 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.

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. 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

(Amount in ` 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 Khimji Kunverji & Co. LLP (formerly Khimji Kunverji & Co.) Chartered Accountants Firm Registration No. 105146W

Hasmukh Dedhia Sudhir Kumar Jannawar Partner Chief General Manager Membership No. F-033494 Accounts Department

Mumbai 22 May 2019

Harsh Kumar Bhanwala R Amalorpavanathan Anil Kumar Bansal C Parthasarathi Chairman Deputy Managing Director Director Director

A K Parhi

Chief General Manager & Secretary

महाप्रबंधक, भारत सरकार मुद्रणालय, मिन्टो रोड, नई दिल्ली-110002 द्वारा अपलोड एवं प्रकाशन नियंत्रक, दिल्ली-110054 द्वारा ई-प्रकाशित UPLOADED BY GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI-110002 AND E-PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI-110054