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Lakshmi Vilas Bank Ltd.

BSE: 534690 Sector: Financials
NSE: LAKSHVILAS ISIN Code: INE694C01018
BSE LIVE 15:43 | 25 Sep 148.40 -6.25
(-4.04%)
OPEN

156.00

HIGH

156.00

LOW

137.00

NSE 15:51 | 25 Sep 147.90 -6.50
(-4.21%)
OPEN

156.00

HIGH

157.00

LOW

138.25

OPEN 156.00
PREVIOUS CLOSE 154.65
VOLUME 239245
52-Week high 209.80
52-Week low 125.10
P/E 10.89
Mkt Cap.(Rs cr) 2,846
Buy Price 0.00
Buy Qty 0.00
Sell Price 147.80
Sell Qty 494.00
OPEN 156.00
CLOSE 154.65
VOLUME 239245
52-Week high 209.80
52-Week low 125.10
P/E 10.89
Mkt Cap.(Rs cr) 2,846
Buy Price 0.00
Buy Qty 0.00
Sell Price 147.80
Sell Qty 494.00

Lakshmi Vilas Bank Ltd. (LAKSHVILAS) - Auditors Report

Company auditors report

To

The Members of The Lakshmi Vilas Bank Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of The LakshmiVilas Bank Limited ('the Bank') which comprise the Balance Sheet as at 31 March 2017 theProfit and Loss Account the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information. Incorporated in thesefinancial statements are the returns for the year ended on that date of 25branches/offices audited by us and 474 branches audited by branch auditors.

Management's Responsibility for the Standalone Financial Statements

2. The Bank's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act2013 ('the Act') with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Bank in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 andprovisions of Section 29 of the Banking Regulation Act 1949 and circulars and guidelinesissued by the Reserve Bank of India ('RBI') from time to time. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Bank and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

5. We conducted our audit of the Bank including its branches in accordance withStandards on Auditing ('the Standards') specified under Section 143(10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the financial statements are free of materialmisstatements.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the 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 financial control relevant to the Bank'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 Bank's Directors as well as evaluating the overall presentation ofthe financial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Banking Regulation Act 1949 as well as the Companies Act 2013 in the manner sorequired for banking companies and give a true and fair view in conformity with accountingprinciples generally accepted in India of the state of affairs of the Bank as at 31stMarch 2017 and its profit and its cash flows for the year then ended.

Emphasis of Matter

9. We draw attention to

(i) Note No.2.4.4.C of the financial statements regarding deferment of charging off toProfit and Loss account the loss of

Rs .31.29 Crore on sale of advances to Asset Reconstruction Companies;

(ii) Note No. 4.27 of the financial statements regarding deferment of charging off toProfit and Loss account the loss of Rs.19.15 Crore relating to advance accounts reportedas fraud; Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

10. The Balance Sheet and the Profit and Loss Account have been drawn up in accordancewith the provisions of Section 29 of the Banking Regulation Act 1949 read with Section133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.

11. As required by sub section (3) of section 30 of the Banking Regulation Act 1949we report that:

(a) we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit and have found them tobe satisfactory; (b) the transactions of the Bank which have come to our notice havebeen within the powers of the Bank.

(c) the returns received from the offices and branches of the Bank have been foundadequate for the purposes of our audit.

12. Further as required by Section 143(3) of the Act we report that:

(i) 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; (ii) in ouropinion proper books of account as required by law have been kept by the Bank so far asit appears from our examination of those books and proper returns adequate for thepurposes of our audit have been received from branches not visited by us; (iii) thereports on the accounts of the branches audited by branch auditors of the Bank undersection 143(8) of the Companies Act 2013 have been sent to us and have been properlydealt with by us in preparing this report; (iv) The Balance Sheet the Profit and LossAccount and the Cash Flow Statement dealt with by this report are in agreement with thebooks of account and with the returns received from the branches not visited by us;

(v) 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 to the extent they are not inconsistent with theaccounting policies prescribed by RBI; (vi) on the basis of written representationsreceived from the directors as on 31st March 2017 taken on record by the Boardof Directors none of the directors is disqualified as on 31st March 2017 frombeing appointed as a director in terms of Section 164 (2) of the Act; (vii) with respectto the adequacy of the internal financial controls over financial reporting of the Bankand the operating effectiveness of such controls refer to our separate Report in"Annexure A"; and (viii) with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us: a. the Bank has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Schedule 18 - Note No. 6. (a) to thefinancial statements; b. the Bank has made provision as required under the applicable lawor accounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts - Refer Schedule 18 - Note No. 3.12 to the financialstatements; c. there has been no delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Bank; and d. The disclosurerequirement as envisaged in Notification G.S.R 308(E) dated 30th March 2017 isnot applicable to the Company - Refer Schedule 18 - Note No. 6 (b) to the financialstatements;

Annexure A to the independent auditor's report of even date on the standalone financialstatements of The Lakshmi Vilas Bank Limited Report on the Internal Financial Controlsunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013

1. We have audited the internal financial controls over financial reporting of TheLakshmi Vilas Bank Limited ('the Bank') as at 31st March 2017 in conjunctionwith our audit of the standalone financial statements of the Bank for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

2. The Bank's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Bank considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting ('the Guidance Note') issued by the Institute of Chartered Accountants of India('the ICAI')".

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Bank's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 ('the Act').

Auditor's Responsibility

3. Our responsibility is to express an opinion on the Bank'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 ('the Standards') both issued by theICAI and deemed to be prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Bank's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A bank'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 bank'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 bank; (2) provide reasonable assurance that transactionsare recorded as necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditure of the bankare being made only in accordance with authorizations of management and directors of thebank; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the bank's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. 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 of the internal financial controls over financialreporting 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

8. In our opinion the Bank 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 31st March 2017based on the internal control over financial reporting criteria established by the Bankconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.

For M//s. R. K. KUMAR & CO.
Chartered Accountants
FRN - 001595S
(G. NAGANATHAN)
Place : Chennai Partner
Date : 26th April 2017 M.No. 022456