TO THE MEMBERS OF DCB BANK LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of DCB BANKLIMITED ("the Bank") which comprise the Balance Sheet as at 31 March 2018the Profit and Loss Account and the Cash Flow Statement for the year then ended and asummary of the signifi cant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Bank's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance and cash fl ows of the Bank in accordance withthe provisions of Section 29 of the Banking Regulation Act 1949 the Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Accounting Standards)Rules 2006 as amended in so far as applicable to banks ("AccountingStandards") accounting principles generally accepted in India and the guidelinesissued by the Reserve Bank of India.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theBank and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls 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.
Our responsibility is to express an opinion on these financialstatements based on our audit.
In conducting our audit we have taken into account the provisions ofthe Act the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder. We conducted our audit of the financial statements in accordance with theStandards on Auditing specifi ed under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the financial statements. The procedures selecteddepend on the auditors' judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial controls relevant to theBank's preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Bank's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence obtained by us is suffi cient andappropriate to provide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Banking Regulation Act 1949 and the Act in the manner so required and give a trueand fair view in conformity with the Accounting standards and other accounting principlesgenerally accepted in India of the state of affairs of the Bank as at 31 March 2018 andits Profit and its cash fl ows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act and Section 30 of theBanking Regulation Act 1949 based on our audit we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit and found them to be satisfactory. b)In our opinion the transactions of the Bank which have come to our notice have beenwithin the powers of the Bank. c) As explained in paragraph 2 below the financialaccounting systems of the Bank are centralised and therefore accounting returns are notrequired to be submitted by the Branches. d) In our opinion proper books of account asrequired by law have been kept by the Bank so far as it appears from our examination ofthose books. e) The Balance Sheet the Profit and Loss Account and the Cash FlowStatement dealt with by this Report are in agreement with the books of account. f) In ouropinion the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act as applicable to banks. g) On the basis of the writtenrepresentations received from the directors as at 31 March 2018 taken on record by theBoard of Directors none of the directors is disqualifi ed as at 31 March 2018 from beingappointed as a director in terms of Section 164 (2) of the Act. h) With respect to theadequacy of the internal financial controls over financial reporting of the Bank and theoperating effectiveness of such controls refer to our Report in "Annexure A".Our report expresses an unmodifi ed opinion on the adequacy and operating effectiveness ofthe Bank's internal financial controls over financial reporting. i) With respect tothe other matters to be included in the Auditors' Report in accordance with Rule 11of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: i. The Bank has disclosed theimpact of pending litigations on its financial position in its financial statements; ii.The Bank has made provision as required under the applicable law or accounting standardsfor material foreseeable losses if any on long-term contracts including derivativecontracts; iii. There were no amounts which were required to be transferred by the Bankto the Investor Education and Protection Fund.
2. We report that during the course of our audit we have visited andperformed select relevant procedures at 28 branches. Since the Bank considers its keyoperations to be automated with the key applications largely integrated to the corebanking systems it does not require its branches to submit any financial returns.Accordingly our audit is carried out centrally at the Head Offi ce and Central ProcessingUnits based on the necessary records and data required for the purposes of the audit beingmade available to us.
For DELOITTE HASKINS & SELLS
Chartered Accountants (Firm's Registration No.117365W) Kalpesh J.Mehta Partner (Membership No. 48791)
Bengaluru 14 April 2018
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 (h) under Report on Other Legal andRegulatory Requirements' section of the auditors' report of even date)
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (the"Act")
We have audited the internal financial controls over financialreporting of DCB BANK LIMITED (the "Bank") as at 31 March 2018 inconjunction with our audit of the financial statements of the Bank for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
The Bank's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Bank considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and effi cient conduct of its business including adherence to theBank's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013the Banking Regulation Act 1949 and the guidelines issued by the Reserve Bank of India.
Our responsibility is to express an opinion on the Bank's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note issued by the Institute of Chartered Accountants ofIndia and the Standards on Auditing prescribed under Section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal controls based on the assessed risk.The procedures selected depend on the auditors' judgement including the assessmentof the risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is suffi cient andappropriate to provide a basis for our audit opinion on the Bank's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Bank's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles and other applicable regulations. ABank's internal financial control over financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly refl ect the transactions and dispositions of the assets of theBank; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Bank are being made onlyin accordance with authorisations of Management and Directors of the Bank; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the Bank's assets that could have a material effect on thefinancial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 2018 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 theInstitute of Chartered Accountants of India.
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For DELOITTE HASKINS & SELLS
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(Firm's Registration No.117365W)
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Kalpesh J. Mehta
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|Bengaluru 14 April 2018 || |
(Membership No. 48791)