1. We have audited the accompanying financial statements of The
Lakshmi Vilas Bank Limited (hereinafter referred to as the Bank),
which comprise the Balance Sheet as at 31st March, 2015 and the 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 21 branches/offices audited by us, 400 branches/offices audited by
Management''s Responsibility for the Financial Statements
2. The Bank''s Board of Directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 (the Act) with respect
to preparation of these financial statements that give a true and fair
view of the financial position, financial performance and cash flows of
the Bank in accordance with the accounting principles generally
accepted in India, including the Accounting Standards specified under
section 133 of the Act read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for
safeguarding of the assets of the Bank and for preventing and detecting
frauds and other irregularities; selection and application of
appropriate accounting policies, making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance
of internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation of the financial statements that give a
true and fair view and 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.
4. We have taken into account the provisions of the Act, the
accounting and auditing standards and matters which are required to be
included in the audit report under the provisions of the Act and the
Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
6. 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 of the financial statements that give a true and
fair view in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Bank''s Directors, as well as
evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements
together with the accounting policies and notes thereon give the
information required by the Banking Regulation Act, 1949 as well as the
Companies Act, 2013, 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, 2015;
(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
9. Without qualifying our opinion, we draw attention to:
(i) Note No.3.4.4.C of the financial statements, regarding deferment of
loss to the extent of Rs.72.99 Crore on sale of advances to Asset
(ii) Note No.3.4.4.D of the financial statements, regarding deferment
of loss to the extent of Rs.40.18 Crore in respect frauds in advances.
Report on Other Legal and Regulatory Matters
10. The Balance Sheet and the Statement of Profit and Loss have been
drawn up in accordance with the provisions of Section 29 of the Banking
Regulation Act, 1949 read with Section 133 of the Companies Act, 2013
and Rule 7 of the Companies (Accounts) Rules, 2014.
11. As required by sub section (3) of section 30 of the Banking
Regulation Act, 1949, 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.
12. Further, as required by section 143(3) of the Companies Act, 2013,
we report that:
(i) We have sought and obtained all the information and explanation
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
(ii) in our opinion, proper books of account 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 branch offices audited by
branch auditors of the Bank under section 143(8) of the Companies Act
2013 have been sent to us and have been properly dealt with by us in
preparing this report.
(iv) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by us in the Report are in agreement with the
books of account.
(v) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(vi) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
(vii) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
(a) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Clause (i) of
Schedule 12 of the financial statements;
(b) The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts;
(c) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
For R. K. KUMAR & CO.
Firm''s Registration No. 001595S
Place : Bangalore Partner
Date : 29th April, 2015 Membership Number: 022456