The Members of
The Catholic Syrian Bank Limited
Report on the Audit of the Standalone Financial Statements
1. We have audited the standalone financial statements of The Catholic Syrian BankLimited ('the Bank') which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss and the Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information in which are included the Returns of 426branches/departments for the year ended on that date audited by the branch auditors ofthe Bank's branches/departments located at various places in India.
2. 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 are in conformity with accounting principles generallyaccepted in India and give a true and fair view of the state of affairs of the Bank as at31st March 2019 and its LOSS and its cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Bank in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Companies Act 2013 and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Information other than the Financial Statements and Auditors Report thereon
4. The Company's Board of Directors is responsible for the Information other than thefinancial statements and auditors report thereon. The said information comprises theinformation included in the Directors Report and Managing Director & CEO communique(Other information) but does not include the financial statements and our audit reportthereon. The Other Information is expected to be made available to us after the date ofthis auditors report
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is toread the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit otherwise appear to be materiallymisstated
When we read the other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and Reserve Bank of India.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
5. The Bank'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 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 and provisions of Section 29 of the Banking Regulation Act 1949and circulars and guidelines issued by the Reserve Bank of India ('RBI') from time totime. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Bank andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theBank's ability to continue as a going concern disclosing as applicable matters relatedto going concern and using the going concern basis of accounting unless management eitherintends to liquidate the Bank or to cease operations or has no realistic alternative butto do so.
Auditor's Responsibilities for the audit of the Financial Statements
6. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Bank has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Bank'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Bank to cease to continue as agoing concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
7. We did not audit the financial statements / information of 426 branches/departmentsincluded in the standalone financial statements of the Bank whose financial statements /financial information reflect total assets of Rs. 6939.07 Crores as at 31st March 2019 andtotal revenue of Rs. 722.19 Crores for the year ended on that date as considered in thestandalone financial statements. The financial statements / information of these brancheshave been audited by the branch auditors whose reports have been furnished to us and inour opinion in so far as it relates to the amounts and disclosures included in respect ofbranches are based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
8. 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 and Section 133 ofthe Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.
9. As required by sub-section (3) of section 30 of the Banking Regulation Act 1949 wereport 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 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. Further 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 theBank so far as it appears from our examination of those books and proper returns adequatefor the purposes of our audit have been received from branches not visited by us.
c) the reports on the accounts of the branch offices of the bank audited under section143(8) of the Act by branch auditors of the Bank have been sent to us and have beenproperly dealt with by us in preparing this report
d) the Balance Sheet the Statement of Profit and Loss and the Statement of Cash Flowsdealt with by this report are in agreement with the books of account and with the returnsreceived from the branches not visited by us;
e) 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;
f) on the basis of written representations received from the directors as on 31st March2019 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31 March 2019 from being appointed as a director in terms of Section 164(2) of theAct;
g) with respect to the adequacy of the internal financial controls over financialreporting of the Bank and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A";
h) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinionand 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 positionin its financial statements - Refer Note No 4.6.1of Schedule 18 - Notes on Accounts
ii) the Bank has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts - Refer Note No. 9 of Schedule 18- Notes on Accounts and
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Bank
Annexure A to the independent auditor's report of even date on the standalone financialstatements of The Catholic Syrian Bank Limited
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013
We have audited the internal financial controls over financial reporting of TheCatholic Syrian Bank ('the Bank') as at 31st March 2019 in conjunction with ouraudit of the standalone financial statements of the Bank for the year ended on that date.
Management's Responsibility for Internal Financial Controls over Financial Reporting
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 ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient 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').
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') issued by the ICAIand deemed to be prescribed under section 143(10) of the Act to the extent applicable toan audit of internal financial controls both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial 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 expenditures 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.
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 31 March 2019 based on theinternal control over financial reporting criteria established by the Bank considering theessential components of internal control stated in the Guidance Note issued by the ICAI.
| ||For R.G.N Price & Co. |
| ||Chartered Accountants |
| ||FR No:002785S |
| ||Sd/- |
| ||G. Surendranath Rao |
| ||Partner |
| ||M No. 022693 |
| ||UDIN : 19022693AAAADA4265 |
|Place: Kochi || |
|Date: April 22 2019 || |