FUTURE ALLAHABAD BANK Auditors Report

To


The Members of Allahabad Bank


Report on the Financial Statements


1. We have audited the accompanying standalone financial statements of the ALLAHABAD BANK as at 31st March, 2017, which comprise the Balance Sheet as at March 31, 2017, statement of Profit and Loss, Cash Flow statement for the year then ended, a summary of significant accounting policies and other explanatory information thereon. Incorporated in these financial statements are the returns of various departments of Head Office, all the 49 zonal offices and 20 branches including 1 Forex cum Treasury Branch, audited by us and 1621 branches audited by the branch auditors and one overseas branch audited by the local auditor. The branches audited by us and those audited by other auditors have been selected by the Bank in accordance with the guidelines issued to the Bank by the Reserve Bank of India. Also incorporated in these financial statements are the returns from 1688 branches/ offices which have not been subjected to audit. These unaudited branches account for 9.36 percent of advances, 29.44 percent of deposits, 6.17 percent of interest income and 26.42 percent of interest expenses of the Bank.


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, guidelines issued by the Reserve Bank of India from time to time and accounting standards generally accepted in India. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.


Auditors’ Responsibility


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 auditors'''' 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 controls 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 but not for the purpose of expressing an opinion on effectiveness of the Bank''''s internal controls. 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.


Opinion


6. 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 :


(i) the Balance Sheet, read with the 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 the state of affairs of the Bank as at 31st March 2017 in conformity with the accounting principles generally accepted in India;


(ii) the Profit and Loss Account, read with the notes thereon shows a true balance of loss in conformity with the accounting principles generally accepted in India, for the year covered by the 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


7. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 29 of the Banking Regulation Act, 1949.


8. Subject to the limitations of the audit indicated in paragraphs 1 to 5 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and subject also to the limitations of disclosure required therein, 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.


c) The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit.


9. We further report that:


a) the Balance Sheet and Profit and Loss account dealt with by this report are in agreement with the books of accounts and returns;


b) the reports on the accounts of the branch offices audited by the branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report;


c) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards.


Statutory Central Auditors


For M/s N.C. Banerjee & Co. For M/s Raju & Prasad


Chartered Accountants Chartered Accountants


Firm Regn. No. 302081E Firm Regn. No.003475S


(CA P.K. Sarker) (CA S. Srinivasa Rao)


Partner Partner


Membership No.060543 Membership No.009329


For M/s Kansal Singla & Associates For M/s De & Bose For M/s GNS & Associates


Chartered Accountants Chartered Accountants Chartered Accountants


Firm Regn. No. 003897N Firm Regn. No.302175E Firm Regn. No.318171E


(CA S. K. Kansal) (CA Subrata De) (CA S.K. Dehuri)


Partner Partner Partner


Membership No.080632 Membership No.054962 Membership No.053937


Place: Kolkata


Date: 17.05.2017




TO THE MEMBERS OF ALLBANK FINANCE LIMITED



Report on the Financial Statements



We have audited the accompanying standalone financial statements of AllBank Finance Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.



Management''''s Responsibility for the Financial Statements



The Company''''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 standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company 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 the assets of the Company 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



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



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 there under.



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.



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 Company''''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 the accounting policies used and the reasonableness of the accounting estimates made by the Company''''s Directors, as well as evaluating the overall presentation of the financial statements.



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



Emphasis of Matter



We draw attention to:



1. Notes No.1.6 of Notes on financial statement-



Depreciation calculated earlier and during the year considering the residual value of the assets nil which is not in accordance with part ''''c'''' of the schedule II of Companies Act, 2013. The justifications for the difference and amount of depreciation overcharged have not been disclosed in the financial statement.



2. Note No.2.26 of Notes in financial statement-



Which describes the basis of non recognition of Deferred tax assets on the provision for depreciation on fixed assets, gratuity, leave encashment, loss in value of investment and Deferred tax liability on appreciation of investment. The Deferred tax assets (net of deferred tax liabilities) has not been recognized during the year and also of earlier year in terms of Accounting standard 22.



3. Notes No.2.31 of Notes on financial statement-



In opinion of board of directors that there are shares of different companies which were not recorded in ABFL books as a part of investment account, are recorded in the books of ABFL at face value by debiting investment portfolio and crediting the other income in the profit & loss account Rs.1795183. It is not understood how that initial subscription of shares were not recorded either in erstwhile ''''ABNL'''' or in the books of ABFL. The debit to investment accounts and crediting the other income of Rs.1795183 with the face value of the shares, recognizing the anticipated profit, is not in accordance with the prudential accounting principles.



Our opinion is not modified in respect of above matter.



Opinion



In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at 31st March 2017, and its profit and its cash flows for the year ended on that date.



Report on Other Legal and Regulatory Requirements



1. As required by the Companies (Auditor''''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure ''''A'''' statement on the matters specified in paragraphs 3 and 4 of the Order.



2. As required by Section143 (3) of the Act, we report that:



a. 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;



b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.



c. The Balance Sheet, the statement of profit & loss and the Cash Flow Statement dealt with by this report are in agreement with the books of accounts.



d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.



e. On the basis of the written representations received from the directors as on 31 March 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section164(2) of the Act;



f. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure "B".



g. 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:



i. The Company has not disclosed the impact of pending litigations on its financial position, as detailed in Note 2.21(b) and (c) to the financial statements.



ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and



iii. There were no amounts which were required to be transferred, to the ''''Investor Education and Protection Fund'''' by the Company.



Report pursuant to directions issued by the Comptroller and Auditor General of India under section 143(5) of the Companies Act, 2013.



Report pursuant to direction issued by the Comptroller and Auditor General of India as per section 143(5) of the Companies Act, 2013 has been prepared in Statement ''''A'''' attached. No action is now required on such directions and its impact on the accounts and financial statements resulted in a reduction in Profit to the extent of Rs.21,686/-



Annexure ''''A'''' to the Independent Auditor''''s Report of even date to the members of AllBank Finance Limited, on the financial statements for the year ended 31st March 2017.



Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:



(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.



(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.



(c) The Company does not have any Immovable Property.



(ii) The Company does not have any Inventory.



(iii) The Company has not granted any loans, secured or unsecured to companies, firm, LLP or other parties covered in the register maintained under section 189 of the Act.



(iv) The Company has not granted any loans, made any investments, provided any guarantee and security where provisions of section 185 and 186 are applicable.



(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.



(vi) To the best of our knowledge and belief, the Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of Company''''s products/ services.



(vii) (a) The Company is regular in depositing undisputed statutory dues including provident fund, employees'''' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.



(b) The dues outstanding in respect of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:















































Name of the statute



Nature of dues



Amount (Rs.)



Amount Paid Under Protest (Rs.)



Period to which the amount relates



Forum where dispute is pending



Income Tax Act, 1961



Income Tax



85,74,000



Adjusted with refund



Assessment Year 2003-04



High Court



Income Tax Act, 1961



Income Tax



8,60,609



Nil



Assessment Year 2009-10



CIT (Appeals)



Income Tax Act, 1961



Income Tax



3,31,000



Nil



Assessment Year 2013-14



CIT (Appeals)



Income Tax Act, 1961



Income Tax



3,52,000



Nil



Assessment Year 2016-17



No notice for scrutiny assessment u/s 143 (3) is received.




(viii) In our opinion, the Company has not defaulted in repayment of loan or borrowing to any financial institution, bank, Government or dues to debenture-holders during the year.



(ix) The company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term loan during the year.



(x) No fraud on or by the Company has been noticed or reported during the period covered by our audit.



(xi) The Company has not paid any managerial remuneration as provided in Section 197 read with Schedule V to the companies Act, 2013.



(xii) The Company is not a Nidhi company, and as such Nidhi Rules, 2014 are not applicable.



(xiii) All the transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 and the required details have been disclosed in the financial statements as required by the accounting standards.



(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.



(xv) The Company has not entered into any non-cash transactions with directors or persons connected with the Directors.



(xvi) The Company is not required to be registered under section 45 - IA of the Reserve Bank of India Act, 1934.



ANNEXURE "B" TO THE INDEPENDENT AUDITOR''''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF ALLBANK FINANCE LIMTED



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



TO THE MEMBERS OF ALLBANK FINANCE LIMITED



We have audited the internal financial controls over financial reporting of Allbank Finance Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.



Management''''s Responsibility for Internal Financial Controls



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



Auditor''''s Responsibility



Our responsibility is to express an opinion on the Company''''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 as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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.



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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.



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



Meaning of Internal Financial Controls Over Financial Reporting



A company''''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 company''''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 company; (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 company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''''s assets that could have a material effect on the financial statements.



Inherent Limitations of Internal Financial Controls Over Financial Reporting



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



The company has its Internal Financial Control (IFC) Policy in place, duly approved by its Board of Directors on 06.12.2016. Accordingly, in our opinion, the Company 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 March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.



Explanatory paragraph



We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, the standalone financial statements of Allbank Finance Limited, which comprise the Balance Sheet as at March 31, 2017, and the related Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, and our report dated xxx April 2017 expressed an unqualified opinion thereon.



For and on behalf of N. Alam & Co.



Chartered Accountants



Firm''''s Registration No.: 314146E



N. Alam



Place : Kolkata Partner



Date : 12th May, 2017 Membership No. : 051730







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