1. We have audited the accompanying financial statements of City Union
Bank Limited, which comprise the Balance Sheet as at 31st March, 2014
and the statements of Profit and Loss and Cash Flow statement for the
year then ended and a summary of significant accounting policies and
other explanatory information. Incorporated in these financial
statements are the returns of 3 branches and Central Office audited by
us and 424 branches/offices audited by branch auditors.
Management''s responsibility for the Financial Statements:
2. Management is responsible for the preparation of these financial
statements in accordance with the Banking Regulation Act, 1949 and
Accounting Standards notified under the Companies Act, 1956 (this
Act) read with General Circular 15/2013 dated 13th September 2013 of
the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation of the financial statements that are free from material
misstatement, whether due to fraud or error.
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgement, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Bank''s preparation and fair presentation of the financial statements 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 entity''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
6. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the
accounting policies and notes thereon give the information required by
the Banking Regulation Act, 1949 as well as Companies Act, 1956, in the
manner so required for the banking companies and give a true and fair
view in conformity with the accounting principles generally accepted in
(i) in the case of the Balance Sheet, of the state of affairs of the
Bank as at 31st March,2014;
(ii) in the case of the Profit and Loss Account of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of cash flows for the
year ended on that date.
Emphasis of Matter
7. Without qualifying our opinion, we draw attention to:
Note 9 of the financial statements, which describes the accounting
treatments of the expenditure on creation of Deferred Tax Liability of
Rs. 30.25 crore on Special Reserve under Section 36(1) (viii) of the
Income Tax Act, 1961 as at 31st March 2013, pursuant to RBI''s Circular
No. DBOD No.BO.BC.77/21.04.018/2013-14 dated 20th December 2013.
Report on Other Legal and Regulatory matters:
8. The Balance Sheet and the Profit and Loss Account have been drawn
up in accordance with the provisions of Section 29 of the Banking
Regulation Act, 1949 read with Section 211 of the Companies Act, 1956.
9. Subject to the limitations and the audit indicated in paragraph 1
to 5 above, we report that:
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit and have found them to be satisfactory.
b) The transactions of the Bank, which have come to our notice, have
been within the powers of the Bank.
c) The returns received from the offices and branches of the Bank have
been found adequate for the purposes of our audit.
10. In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement comply with the Accounting Statement notified under
the Companies Act, 1956 read with General Circular 15/2013 dated 13th
September 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013.
11. We further report that:
(i) the Balance Sheet and Profit and Loss Account dealt with by this
report, are in agreement with the books of account and the returns;
(ii) in our opinion, proper books of accounts as required by law have
been kept by the Bank so far as appears from our examination of those
(iii) the reports on the accounts of the branches audited by branch
auditors have been dealt with in preparing our report in the manner
considered necessary by us;
(iv) as per information and explanation given to us, the Central
Government has, till date, not prescribed any cess payable under
section 441A of the Companies Act, 1956;
(v) on the basis of the written representation received from the
directors and taken on record by the Board of Directors, none of the
directors is disqualified as on 31st March, 2014 from being appointed
as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
For M/s. P. Chandrasekar
(Firm No. 000580 S)
Place: Chennai Partner
Date : 26th May, 2014 M.No. : 28508