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Lakshmi Vilas Bank

BSE: 534690|NSE: LAKSHVILAS|ISIN: INE694C01018|SECTOR: Banks - Private Sector
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« Mar 15
Auditor's Report (Lakshmi Vilas Bank) Year End : Mar '16

Report on the Financial Statements

 

  1. We have audited the accompanying financial statements of The Lakshmi Vilas Bank Limited ('the Bank'), which comprise the
    Balance Sheet as at 31st March 2016, the Profit and Loss Account, 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 22 branches audited by us, 460 branches audited by branch auditors.

 

Management’s Responsibility for the Financial Statements

 

  1. 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 the 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 and provisions of
Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India ('RBI') from
time to time. 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 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.

 

Auditor’s Responsibility

 

  1. Our responsibility is to express an opinion on these financial statements based on our audit.

     

  2. 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.

 

  1. We conducted our audit of the Bank including its branches in accordance with Standards on Auditing ('the Standards') 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 of material misstatements.

     

  2. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial
    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. 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.

     

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

Opinion

 

  1. 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 banking companies and give a true and fair view in conformity
    with accounting principles generally accepted in India:

 

  1. in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March, 2016;

  2. in the case of the Profit and Loss Account of the profit for the year ended on that date; and

  3. in the case of the Cash Flow Statement, of cash flows for the year ended on that date.

  4.  

Emphasis of Matter

 

  1. We draw attention to Note No.2.4.4.C of the financial statements, regarding deferment of loss of $ 95.60 Crore on sale of
    advances to Asset Reconstruction Companies.

 

Our opinion is not qualified in respect of this matter.

 

Report on Other Legal and Regulatory Requirements

 

  1. 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 133 of the Companies Act, 2013 and Rule 7 of the Companies (Accounts)
    Rules, 2014.

     

  2. As required by sub section (3) of section 30 of the Banking Regulation Act, 1949, we report that:

 

  1. 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;

     

  2. the transactions of the Bank, which have come to our notice, have been within the powers of the Bank.

     

  3. the returns received from the branches of the Bank have been found adequate for the purposes of our audit.

 

  1. Further, as required by section 143(3) of the Act, we report that:

 

  1. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were
    necessary for the purpose of our audit;

     

  2. in our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our
    examination of those books;

     

  3. the reports on the accounts of the branches 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;

     

  4. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement
    with the books of account ;

     

  5. n 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, to the extent they are not inconsistent with the

accounting policies prescribed by RBI;

 

  1. on the basis of written representations received from the directors and taken on record by the Board of Directors, none of
    the directors is disqualified as on 31st March 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

  2. with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating
    effectiveness of such controls, refer to our separate Report in Annexure A.

     

  3. 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:

 

  1. the Bank has disclosed the impact of pending litigations on its financial position in its financial statements

     

  2. the Bank 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 and

     

  3. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection

Fund by the Bank.

 

For R. K. KUMAR & CO.

Chartered Accountants

Firm's Registration No. 001595S

(B.R. ASHOK)

 

Place : Chennai Partner

Date :27th April, 2016 Membership Number: 023313

 

Annexure A to the independent auditor's report of even date on the financial statements of Lakshmi Vilas Bank Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

 

  1. We have audited the internal financial controls over financial reporting of The Lakshmi Vilas Bank Limited ('the Bank') as at
    31st March 2016 in conjunction with our audit of the financial statements of the Bank for the year ended on that date.

Management's Responsibility for Internal Financial Controls

 

  1. The Bank's Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control
    over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance
    Note on Audit of Internal Financial Controls Over Financial Reporting ('the Guidance Note') issued by the Institute of Chartered
    Accountants of India ('the ICAI').

 

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of its business, including adherence to Bank's policies, the safeguarding of its
assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act, 2013 ('the Act').

 

Auditor's Responsibility

 

  1. Our responsibility is to express an opinion on the Bank's internal financial controls over financial reporting based on our audit.
    We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial controls Over Financial Reporting
    ('the Guidance Note') and the Standards on Auditing ('the Standards'), both issued by the ICAI and deemed to be prescribed under
    section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note
    require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
    adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively
    in all material respects.

     

  2. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over
    financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining
    an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing
    and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

     

  3. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Bank's
    internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

 

  1. A bank's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the
    reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
    accounting principles. A bank's internal financial control over financial reporting includes those policies and procedures that:

 

  1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
    the assets of the bank;

     

  2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and that receipts and expenditures of the bank are being made only in
    accordance with authorizations of management and directors of the bank; and

  3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
    bank's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

 

  1. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper
    management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any
    evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial
    control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the
    policies or procedures may deteriorate.

Opinion

I

  1. n our opinion, the Bank has, in all material respects, an adequate internal financial controls system over Financial reporting and such
    internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control over
    financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance
    Note issued by the ICAI.

 

For R. K. KUMAR & CO.

Chartered Accountants

Firm's Registration No. 001595S

(B.R. ASHOK)

 

Place : Chennai Partner

Date :27th April, 2016 Membership Number: 023313

Source : Dion Global Solutions Limited
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