AGROHA CO-OPERATIVE URBAN BANK LIMITED
21-1-974, Opp. High court, Gansi Bazar, Hyderabad
SIGNIFICANT ACCOUNTING POLICIES
1. Accounting Convention:
The financial statements have been prepared on the historical cost concept and in accordance with
the generally accepted accounting practices prevailing in the Cooperative Banking Industry
except otherwise stated.
a) Classification of investment portfolio, provision for investment depreciation reserve etc., are done in
accordance with the guidelines of the Reserve Bank of India vide their circular No. UBD
No.CO.BSD.1.PCB.44/12.05.05/2000-2001 dated 23.04.2001 as amended through their circulars
UBD.(PCB)MCNO.12/16.20.000/2010-11 dt.01.07.2010 and circular No.DBOD.BP.BC.20/21.04.141/
2014-15 dt:01.07.2014 and circulars No.RBI/2015-16/97 DBR NO.BP.BC.6/21.04.141/2015-16
b) Investments in Government Securities are stated at face value. The premium paid over face value
is treated as deferred revenue expenditure and is amortized over the remaining maturity period. Broken
period interest incurred at the time of acquisition of Government Securities are recognized as expenses.
3. Classification of Advances:
Advances have been classified as Standard, Sub-standard, Doubtful and Loss Assets and required
provision is made on such advances as per the norms and guidelines issued by the Reserve Bank of
India, wherever applicable.
4. Provision on Standard Assets:
Provision on Standard Assets is made as per Guidelines issued by Reserve Bank of India. Since the
existing provision on Standard Assets is covering the required provision amount no provision is provided
during the current financial year
5 Provision on Substandard Assets
Provision on SubStandard Assets is made as per Guidelines issued by Reserve Bank of India.
6 Fixed Assets:
Fixed Assets are stated at cost less depreciation. Cost is inclusive of freight and other directly attributable
7 Depreciation on Fixed Assets:
(a) Depreciation on computers is provided at 33.33% under Straight Line Method.
(b) Depreciation on other Fixed Assets is provided under Diminishing Balance Method at the following
(i) Furniture & Fixtures 10% P.A.
(ii) Electrical Fittings 20% P.A.
8. Recognition of Income and Expenditure:
Items of income and expenditure are accounted on accrual basis except in the following cases:
(a) Interest on Non-performing Assets (NPAs) to the extent the same is realized is recognized as income in
pursuance with the guidelines issued by the Reserve Bank of India
(b) Unrealized interest on non-performing assets is not recognized as income and the same is quantified
and shown as ” Interest Suspense” in Balance Sheet.
(c) Interest on overdue Deposits is accounted on renewal.
(d) Dividend on investments is accounted on realization basis.
9. Accounting for Preoperative and Deferred Revenue Expenses:
Preoperative Expenses and Deferred Revenue Expenses are amortized over a period of 5 (Five) years,
except premium paid on Govt. securities, which is amortized as mentioned at 1.2 (b) above.
10. Appropriations: Appropriation have been made as under:
(a) Statutory Reserve Fund @ 25% of net profit.
(b) Co-operative Education Fund @ 1% of Gross Profit.
(c) Common Good Fund 1% of Net Profit.
(d) Staff Welfare Fund 1% of Net Profit.
NOTES TO ACCOUNTS
1. The Capital to Risk Assets Ratio (CRAR) of the Bank, as assessed by the Bank as on 31.03.2018 is
25.91%, as at 31st March 2017 is 25.69% as against the norm of 9% stipulated for Non-scheduled
Cooperative Banks by RBI. The CRAR comprises of:
Current year Previous Year
Tier I Capital – 25.53% 25.29%
Tier II Capital – 0.38% 0.40%
Net NPAs to Net Advances as at 31st March, 2018 is NIL (Previous year: 0.32%)
2. Business Ratios
Current Year Previous Year
a. Interest income as a % to Working Funds 9.88% 11.60%
b. Non interest income as a % to Working Funds 0.34% 0.21%
c. Net Profit as a % to Working Funds 1.15% 1.04%
d. Business (Deposits and Advances) per employee – Rs.560.87 lakhs Rs.578.31 lakhs
e. Profit per employee Rs. 4.48 lakhs Rs. 4.57 lakhs
3. Movement in NPAs (Gross):
Total NPAs as at 31st March, 2017 } ` 1,12,73,536.00
Add: Additions during the year } ` 67,17,797.00
Less: Reduction during the year } ` 90,90,854.00
Total NPAs as at 31st March, 2018 } ` 89,00,479.00
4. Movement of Provision on NPAs:
Opening Balance as at 31st March, 2017 } ` 1,03,67,489.80
Add: Provisions made during the year } ` —
Less: Write back of excess provision } —
Closing Balance as at 31st March, 2018 } ` 1,03,67,489.80
The Provision required to be made as on 31.03.2018 is Rs.28.70 Lakhs on all the Loans & Advances
as on that date. Since the provision made till 31.03.2017 was RS.103.67 Lakhs, no additional provision
was made during the year 2017-2018.
5. Lending to sensitive sectors as at 31st March, 2018:
a. Capital Market Sector Nil
b. Real Estate Sector Nil
(Other than Housing loans)
6. Advances (Schedule 8) include Overdues (excluding NPAs) amounting to Rs.18.57 Lacs (Previous
Year: Rs.23.29 lacs).
7. In the opinion of Management, there is no impairment to the assets during the year to which Accounting
Standard – 28 : Impairment of Assets applies.
8. The Bank is initiating steps to comply with various Accounting Standards issued by Institute of Chartered
Accountants of India, such as Cash Flow Statements (AS-3), Related Party Disclosures (AS-18),
Earnings Per Share (AS-20), etc.
9. Provision for current tax is made on the basis of estimated taxable income for the current accounting
year in accordance with the Income Tax Act, 1961. The deferred tax for timing differences between the
book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively
enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognised
to the extent there is reasonable certainty that these would be realised in future.
The deferred tax Assets provided till the financial year 2016-17 is Rs 35,175/-. The deferred tax Assets
provided during the year 2017-18 is Rs.31842/-. The total deferred tax Assets on account of above as
on 31-03-2018 is Rs.67,017/-.
10. Previous year’s figures have been regrouped, wherever necessary, to confirm to current year’s
sd/- sd/- sd/-
(DANTU VIJAY ADITYA) (VINAY C AGARWAL) (AJIT GUPTA)
DIRECTOR VICE-CHAIRMAN CHAIRMAN
(D. LAKSHMANA RAO)
CHIEF EXECUTIVE OFFICER
(K. RAJA KRISHNA)
Membership No. 217863