The Shareholders of The Karur Vysya Bank Limited
Report on the Financial Statements:
1. We have audited the accompanying financial statements of The Karur Vysya BankLimited as at 31st March 2011, which comprise the Balance Sheet as at 31st March 2011, theProfit & Loss Account and the Cash Flow Statement for the year then ended, significantAccounting Policies and other explanatory information. Incorporated in these financialstatements are the returns of 4 branches/offices audited by us and 407 branches/officesaudited by Branch Auditors. The Branches audited by us and those audited by other auditorshave been selected by the Bank in accordance with the guidelines issued by the ReserveBank of India.
Management's responsibility for the Financial Statements:
2. Management is responsible for the preparation of these financial statements inaccordance with the Banking Regulation Act, 1949. This responsibility includes the design,implementation and maintenance of internal control relevant to the preparation of thefinancial statements that are free from material misstatements, whether due to fraud orerror.
3. Our responsibility is to express an opinion on these Financial Statements based onour audit. We conducted our audit in accordance with the Standards on Auditing issued bythe Institute of Chartered Accountants of India. Those Standards require that we complywith the ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the bank's preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by themanagement, 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 toprovide a basis for our audit opinion.
Emphasis of Matter:
6. Without qualifying our opinion, we draw attention to Note No.4.3 of Schedule 18 ofthe financial statements, which describes deferment of pension and gratuity liability ofthe Bank to the extent of Rs. 67.60 Crore pursuant to the exemption granted by the ReserveBank of India from the application of the provisions of Accounting Standard (AS) 15,Employee Benefits, vide its circular No. DBOD. BP. BC/80/21.04.018/2010-11 dated09.02.2011 on Re-opening of Pension Option to Employees of Public Sector Banks andEnhancement in Gratuity Limits - Prudential Regulatory Treatment.
7. In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts together with the notes thereon, give the informationrequired by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in themanner so required for the banking companies and give a true and fair view in conformitywith 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 31stMarch, 2011;
(ii) in the case of the Profit & Loss Account, of the profits for the year ended onthat date; and
(iii) in the case of the Cash Flow Statement, of cash flows for the year ended on thatdate.
Report on other legal and Regulatory requirements:
8. The Balance Sheet and the Profit & Loss Account have been drawn up in accordancewith the provisions of section 29 of the Banking Regulation Act, 1949 read with section211 of the Companies Act, 1956;
9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above, wereport that:
a. we have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purposes of our audit and have found them tobe satisfactory.
b. the transactions of the Bank, which have come to our notice, have been within thepowers of the Bank.
c. the returns received from the Offices and Branches of the Bank have been foundadequate for the purposes of our audit.
10. In our opinion, the Balance Sheet, Profit & Loss Account and
Cash Flow Statement comply with the Accounting Standards referred to in sub-section(3C) of Section 211 of the Companies Act, 1956.
11. We further report that:
(i) the Balance Sheet and Profit and Loss account dealt with by this report are inagreement with the books of accounts and returns;
(ii) in our opinion, proper books of accounts as required by law have been kept by thebank 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 beendealt with in preparing our report in the manner considered necessary by us;
(iv) as per the 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;and.
(v) on the basis of the written representation received from the directors and taken onrecord by the Board of Directors, none of the directors is disqualified as on March 31,2011 from being appointed as a director in terms of clause (g) of sub-section (1) ofsection 274 of the Companies Act, 1956.
| ||For M/s. R. K. Kumar & Co. |
| ||Chartered Accountants |
| ||Firm Reg No. 001595S |
|Place: Karur ||(G.Naganathan) |
|Date: 20th May 2011. ||Partner |
| ||M.No.022456 |