Report on the Standalone Financial Statements
1. We have audited the accompanying Standalone Financial Statements of IDBI Bank Limited (“the Bank”), which comprise the Balance Sheet as at March 31, 2017, Profit and Loss Account and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter called as ‘the standalone financial statements’) in which are incorporated the returns of Dubai branch for the year ended as on that date, audited by the branch auditor of the Bank at Dubai.
2. The audit was planned and conducted so as to cover records available at various processing centres / regional offices/branches and reports generated through centralized banking applications at central office level. Incorporated in the said standalone financial statements are the returns of the Dubai branch of the Bank, audited by another auditor, whose report has been furnished to us and which was relied upon by us for our opinion on the Standalone Financial Statements of the Bank.
Management’s Responsibility for the Standalone Financial Statements
3. 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 standalone 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 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, 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 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.
4. Our responsibility is to express an opinion on these standalone 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 thereunder. We conducted our audit of the Bank 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.
5. 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 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 Directors of the Bank, as well as evaluating the overall presentation of the financial statements.
6. 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.
7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements together with the 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 the accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March 2017;
b) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Emphasis of Matter
8. We draw attention to Note 18(C)(2)(I) to the Financial statements, without modifying our opinion, regarding surrender of special securities of Government of India (GoI) over a period of 11 quarters commencing from quarter ended September 30, 2016 for which formal approval from Appropriate Authorities is awaited.
Report on Other Legal and Regulatory Requirements
9. The Balance Sheet, Profit and Loss Account and the Cash Flow Statement have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 129 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
10. 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 branch of the Bank at Dubai have been found adequate for the purpose of our audit
11. As required by Section 143(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 Bank so far as it appears from our examination of those books.
c) The key operations of the Bank are completely automated and key applications are integrated with the core banking system, the audit is carried out centrally as all the necessary records and data required for the purpose of the audit are centrally available therein. Therefore accounting returns are not required to be submitted by the branches in India and the report on the accounts of Dubai branch audited by the branch auditor u/s 143(8) of the Companies Act 2013 have been sent to us and have been properly dealt with by us in preparing the report.
d) 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.
e) 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 to the extent they are not inconsistent with the accounting policies prescribed by Reserve Bank of India.
f) On the basis of written representation received from the directors as on March 31, 2017 and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2017 from being appointed as director in terms of Section 164 (2) of the Companies Act 2013.
g) 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.
h) 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 Bank has disclosed the impact of pending litigations on its financial position in its financial statements to the extent determinable/ascertainable. - Refer Schedule 18(A)(9)(c) to the standalone financial statements.
ii) 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 Refer Schedule 18(A)(9)(b) to the standalone financial statements.
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Bank.
iv) The disclosure required on holdings as well as dealings in Specified Bank Notes during the period from November 08, 2016 to December 30, 2016 as envisaged in notification GSR 308(E) dated March 30, 2017 issued by the Ministry of Corporate Affairs, is not applicable to the Bank. Refer note 18(C)(2)(VII) to the standalone financial statements.
For Mukund M. Chitale & Co. For Chokshi & Chokshi LLP
Chartered Accountants Chartered Accountants
Firm Reg No: 106655W Firm Reg No: 101872W/W100045
S. S. Dikshit Nikesh K. Shah
M. No 041516 M. No: 153520
Date: May 18, 2017