1. We have audited the accompanying financial statements of The
Karnataka Bank Limited as at 31st March 2012, which comprises the
Balance Sheet as at 31st March 2012; the statement of Profit and Loss
Account and the Cash Flow Statement for the year then ended; and a
summary of significant Accounting Policies and other explanatory
information. Incorporated in these financial statements are the
returns of 23 branches / 5 offices audited by us and 480 branches / 20
offices audited by Branch Auditors. The Branches audited by us and
those audited by other auditors have been selected by the Bank in
accordance with the guidelines issued by the Reserve Bank of India.
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. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation of the financial
statements that are free from material misstatements, 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 the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
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 judgment, 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. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the 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 read together with the
accounting policies and notes thereon, give the information required by
the Banking Regulation Act, 1949 as well as the 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 India: (i) in the case of the Balance Sheet, of the state
of affairs of the bank as at 31st March, 2012; (ii) in the case of the
Profit and Loss Account, of the profits 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.
Report on other legal and Regulatory requirements:
7. 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;
8. Subject to the limitations of 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 purposes 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; and c. the returns
received from the Offices and Branches of the Bank have been found
adequate for the purposes of our audit.
9. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) ofSection211 of the Companies Act, 1956.
10. 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
accounts and 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 books; and (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) 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 March 31, 2012 from being appointed as a director in
terms of clause (g) of sub-section (1) of section 274 of
the Companies Act, 1956.
for Vishnu Daya & Co. for R.K. Kumar & Co.
Chartered Accountants Chartered Accountants
Firm Reg. No.: 008456S Firm Reg. No.: 001595S
Guruprasad B.R. Ashok
M. No. 219250 M. No. 023313
Date: May 18, 2012