REPORT ON THE FINANCIAL STATEMENTS
1. We have audited the accompanying financial statements of THE
LAKSHMI VILAS BANK LIMITED, KARUR as at 31st March, 2013, which
comprise the Balance Sheet as at March 31, 2013, and Profit and Loss
Account 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 16
Branches, 8 Regional Offices, Technology Centre, RTGS Cell, DP Cell,
Centralised Processing Cell and Integrated Treasury, audited by us, 275
Branches and 6 Service Branches audited by other branch auditors. The
branches audited by us and those audited by other auditors have been
selected by Bank in accordance with the guidelines issued by the
Reserve Bank of India.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
2. Management of the Bank is responsible for the preparation of these
financial statements that give true and fair view of the financial
position and financial performance of the Bank in accordance with
Banking Regulation Act, 1949 and complying with Reserve Bank of India
Guidelines issued from time to time. This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation 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 misstatement.
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 management, as well as evaluating the overall
presentation of the financial statements.
5. The financial information as at and for the year ended 31st March,
2013 of 275 Branches and 6 Service Branches has been audited by other
auditors whose reports have been furnished to us and our opinion is
based solely on the reports of such other auditors.
6. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
7. Without qualifying our opinion, we draw attention to Note No.3.10
of the Schedule 18 to the financial statements, regarding deferment of
pension liability and gratuity liability of the Bank, pursuant to the
exemption granted by the Reserve Bank of India to the Lakshmi Vilas
Bank from application of the provisions of Accounting Standard (AS) 15,
Employees Benefits vide circular no. DBOD.BP.BC/80/21.04.018/2010-11,
dated 09.02.2011 on Re-opening of Pension Option to the employees and
Enhancement in Gratuity Limits - Prudential Regulatory Treatment.
Accordingly, out of the unamortized amount of Rs.55.85 crore as on
01/04/2012, the Bank has amortized Rs.15.56 crore for Pension and
Rs.3.06 crore for Gratuity being proportionate amount for the year
ended March 31, 2013 and balance amount to be amortized in future
period for Pension is Rs.31.12 crore and for Gratuity is Rs.6.13 crore.
8. In our opinion as shown by the books of the Bank, and to the best
of our information and according to the explanations given to us, we
i) the Balance Sheet read with the significant accounting policies and
notes thereon, is a full and fair balance sheet containing all the
necessary particulars, is properly drawn up so as to exhibit a true and
fair view of state of affairs of the Bank as at 31st Match, 2013, in
conformity with accounting principles generally accepted in India;
ii) the Profit and Loss Account, read with the significant accounting
policies and notes thereon, shows a true balance of profit, in
conformity with accounting principles generally accepted in India, for
the year covered by accounts; and
iii) the Cash Flow Statement gives a true and fair view of the cash
flows for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
9. The Balance Sheet and the Profit and Loss Account have been drawn
up in Forms ''A'' & ''B'', respectively, of the third Schedule to the
Banking Regulation Act, 1949.
10. Subject to the limitations of the audit indicated in paragraphs 1
to 6 above and as required by the Banking Regulation Act 1949 and
subject also to the limitations of disclosure required therein, we
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, as
supplemented with the information furnished by the Management, have
been found adequate for the purposes of our audit.
11. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the applicable Accounting Standards.
For SAGAR & ASSOCIATES
FR No. 003510S
Date : 27th May 2013 Membership No. 029644