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AU Small Finance Bank Ltd.

BSE: 540611 Sector: Financials
NSE: AUBANK ISIN Code: INE949L01017
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OPEN 604.90
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VOLUME 40078
52-Week high 724.45
52-Week low 496.40
P/E 46.52
Mkt Cap.(Rs cr) 16,795
Buy Price 590.85
Buy Qty 143.00
Sell Price 0.00
Sell Qty 0.00
OPEN 604.90
CLOSE 605.75
VOLUME 40078
52-Week high 724.45
52-Week low 496.40
P/E 46.52
Mkt Cap.(Rs cr) 16,795
Buy Price 590.85
Buy Qty 143.00
Sell Price 0.00
Sell Qty 0.00

AU Small Finance Bank Ltd. (AUBANK) - Auditors Report

Company auditors report

To

The Members of Au FINANCIERS (INDIA) LIMITED

Report on the Financial Statements

We have audited the accompanying standalone financial statements of Au FINANCIERS(INDIA) LIMITED ("the Company") which comprise the Balance Sheet as at March31 2016 the Statement of Profit and Loss and Cash Flow Statement for the year thenended 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance withaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We

conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2016 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 sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the Order.

2. 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 bestof 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 theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of section 164 (2) ofthe Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of

such controls refer to our separate Report in Annexure 2 to this report;

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of

pending litigations on its financial position in its financial statements - Refer Note35 to the standalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

ICAI Firm's Registration Number: For S.R. BATLIBOI & CO. LLP

301003E/E300005

Chartered Accountants

Sd/-

per Viren H. Mehta

Mumbai Partner
May 27 2016 Membership Number: 048749

ANNEXURE

Referred to in paragraph 1 under the heading "Report on other legal and regulatoryrequirements" of our report of even date

Re: Au FINANCIERS (INDIA) LIMITED

(i) (a) The Company has maintained proper records

showing full particulars including quantitative

details and situation offixed assets.

(b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies were identified on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in fixed assets are held in the name of theCompany.

(ii) The Company's business does not involve inventories and accordingly therequirements under clause 3(ii) of the Order are not applicable to the Company and hencenot commented upon.

(iii) (a) The Company has granted loan to a company

covered in the register maintained under section 189 of the Act. In our opinion andaccording to the information and explanations given to us the terms and conditions of theloan are not prejudicial to the Company's interest.

(b) The loan granted by the Company was repayable on demand. We are informed that theloan was repaid during the year when demanded by the Company and thus there has been nodefault on the part of the company to whom the money has been lent. The payment ofinterest has been regular.

(c) There was no amount overdue in respect of loan granted to the company covered inthe register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities granted in respect of whichprovisions of section 185 and 186 of the Act are applicable and hence not commented upon.

(v) The Company has not accepted any deposits from the public.

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under section 148(1) of the Act for theservices of the Company.

(vii) (a) Undisputed statutory dues including provident

fund employees' state insurance income-tax sales- tax wealth-tax service taxcustoms duty excise duty value added tax cess and other material statutory dues havegenerally been regularly deposited with the appropriate authorities though there has beena slight delay in a few cases.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax cess and other materialstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(b) According to the records of the Company the dues outstanding of income-taxsales-tax service tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as follows:

Name of the Statute Nature of dues Amount under dispute () Amount paid () Period to which its relates Forum where dispute is pending
Rajasthan Value Added Tax 2003 Value Added Tax 1389000 # - # Financial years 2008-09 to 2011-12 Rajasthan Tax Board Ajmer
Chapter V of the Finance Act 1994 Service Tax 120962101* 9072158 ** April 2008 - September 2013 Central Excise and Service Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 7145520 5280190 Financial years 2009-10 to 2012-13 Income Tax Appellate Tribunal; CIT (A) for FY 2012-13

# Represents amount of penalty fully covered by bank guarantee furnished

* Excluding interest and penalty as applicable.

** The Company has paid this amount under protest.

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of dues

to a financial institution bank debenture holders or government.

(ix) According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer or further public offer hence notcommented upon.

Further monies raised by the Company by way of term loans were applied for the purposefor which those were raised though idle/surplus funds which were not required forimmediate utilization were gainfully invested in liquid assets payable on demand.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statementsand accordingtothe information and explanations givenby the management we report that no fraud by the Company or on the Company by theofficers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid and provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theAct where applicable and the details have been disclosed in the notes to the financialstatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year andhence reporting requirements under clause 3(xiv) of the Order are not applicable to theCompany and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us we report that theCompany has registered as required under section 45-IA of the Reserve Bank of India Act1934.

For S.R. BATLIBOI & CO. LLP
ICAI Firm's Registration Number:
301003E/E300005
Chartered Accountants
Sd/-
per Viren H. Mehta
Partner
Membership Number: 048749

 

Mumbai
May 27 2016

ANNEXURE

Referred to in paragraph 2(f) under the heading "Report on other legal andregulatory requirements" of our report of even date

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

To the Members of Au FINANCIERS (INDIA) LIMITED

We have audited the internal financial controls over financial reporting of AuFINANCIERS (INDIA) LIMITED ("the Company") as of March 312016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of

India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reportingwas established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial 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 internalfinancial 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 designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made

only in accordance with authorisations of management and directors of the company; and(3) provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S.R. BATLIBOI & CO. LLP
ICAI Firm's Registration Number:
301003E/E300005
Chartered Accountants

 

Sd/-
per Viren H. Mehta
Partner
Membership Number: 048749

Mumbai May 27 2016