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South Indian Bank Ltd.

BSE: 532218 Sector: Financials
NSE: SOUTHBANK ISIN Code: INE683A01023
BSE 00:00 | 17 Jul 22.60 1.50
(7.11%)
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21.10

HIGH

22.85

LOW

21.00

NSE 00:00 | 17 Jul 22.65 1.60
(7.60%)
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21.15

HIGH

22.85

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20.95

OPEN 21.10
PREVIOUS CLOSE 21.10
VOLUME 1164621
52-Week high 34.75
52-Week low 20.90
P/E 12.22
Mkt Cap.(Rs cr) 4,089
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 21.10
CLOSE 21.10
VOLUME 1164621
52-Week high 34.75
52-Week low 20.90
P/E 12.22
Mkt Cap.(Rs cr) 4,089
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

South Indian Bank Ltd. (SOUTHBANK) - Auditors Report

Company auditors report

TO THE MEMBERS OF THE SOUTH INDIAN BANK LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of THE SOUTH INDIAN BANK LIMITED("the Bank") which comprise the Balance Sheet as at 31st March 2017 theProfit and Loss Account and the Cash Flow Statement for the year then ended and a summaryof the significant accounting policies and other explanatory information in which areincorporated the returns for the year ended on that date of 848 branches / offices auditedby the branch auditors of the Bank.

Management's Responsibility for the Financial Statements

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 thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Bank in accordance with the provisions of Section 29 ofthe Banking Regulation Act 1949 accounting principles generally accepted in Indiaincluding the Accounting Standards prescribed under section 133 of the Act in so far asapplicable to banks and the Guidelines issued by the Reserve Bank of India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Bank and forpreventing 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under

Section 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe 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 controls 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 the accounting policies used and the reasonableness of the accountingestimates made by the Bank's Directors and evaluating the overall presentation of thefinancial statements.

We believe that the audit evidence obtained by us and audit evidence obtained by thebranch auditors in terms of their reports referred to in the Other Matters paragraphbelow is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of reports of the branch auditors on separatefinancial statements / financial information of the branches/ offices referred to in theOther Matters paragraph below the aforesaid financial statements give the informationrequired by the Banking Regulation Act 1949 and the Act in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Bank as at 31st March 2017 and its profit andits cash flows for the year ended on that date.

Emphasis of Matter

Attention is drawn to: i) Note No.B.11.A of Schedule 18 regarding deferment ofshortfall arising from the sale of certain non-performing assets in terms of RBI MasterCircular DBOD.No.BP.

BC.9/21.04.048/2014-15 on Prudential Norms on Income Recognition Asset Classificationand Provisioning pertaining to advances dated July 1 2014 as amended and theunamortised balance as at 31st March 2017 of Rs 76.05 Crore. ii) Note No.C.13 of Schedule18 regarding deferment of provisioning pertaining to a fraud account identified during thequarter ended 31st December 2016 in terms of RBI

Circular DBR.No.BP.BC.92/21.04.048/2015-16 dated April 18 2016 and the unamortisedbalance as at 31st March 2017 of Rs 57.82 Crore.

Our opinion is not modified in respect of these matters.

Other Matters

We did not audit the financial statements / financial information of 848 branches /offices included in the financial statements of the Bank whose financial statements /financial information reflect total advances of Rs. 29731.47 Crore as at 31st March 2017and total interest income of Rs.3296.30 Crore for the year ended on that date asconsidered in the financial statements. The financial statements / financial informationof these branches / offices have been audited by the branch auditors whose reports havebeen furnished to us and our opinion in so far as it relates to the amounts anddisclosures included in respect of these branches / offices and our report in terms ofsubsection (3) of Section 143 of the Act in so far as it relates to the aforesaidbranches / offices is based solely on the report of such branch auditors.

Our opinion on the financial statements and our report on Other Legal and RegulatoryRequirements below is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act and Section 30 of the Banking RegulationAct 1949 based on our audit and on the consideration of the reports of the branchauditors on the separate financial statements / financial information of the branches /offices referred to in the Other Matters Paragraph above we report to the extentapplicable that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion the transactions of the Bank which have come to our notice have beenwithin the powers of the Bank.

c) 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 the report of the branchauditors and proper returns adequate for the purposes of our audit have been received fromthe branches not visited by us.

d) The reports on the accounts of the 848 branches / offices audited by branch auditorsof the Bank appointed under section 143(8) of the Act have been forwarded to us and havebeen properly dealt with by us in preparing this report

e) The Balance Sheet the Profit and Loss Account and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account and with the returnsreceived from the branches not visited by us.

f) In our opinion the aforesaid financial statements comply with the AccountingStandards prescribed under section 133 of the Act as applicable to banks.

g) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

h) With respect to the adequacy of the internal financial controls over financialreporting of the Bank its branches / offices and the operating effectiveness of suchcontrols refer to our separate report in "Annexure A". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Bank's internalfinancial controls over financial reporting.

i) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Bank has disclosed the impact of pending litigations on its financial positionin its financial statements;

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;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Bank.

iv. The disclosure with respect to the holdings or dealings in Specified Bank Notes asdefined in the Notification S.O. 3407(E) dated 8th November 2016 of the Ministry ofFinance during the period from 8th November 2016 to 30th December 2016 as requiredunder amendment to Schedule III to the Companies Act 2013 is not applicable as thefinancial statements of the Bank are prepared under section 29 and Third Schedule of theBanking Regulation Act 1949.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 008072S)
S. Sundaresan
Partner
(Membership No. 25776)
KOCHI 15 May 2017

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(h) under ‘Report on Other Legal and RegulatoryRequirements' section of the auditor's report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act").

We have audited the internal financial controls over financial reporting of THE SOUTHINDIAN BANK LIMITED ("the Bank") as at 31st March 2017 in conjunction with ouraudit of the financial statements of the Bank for the year ended on that date whichincludes internal financial controls over financial reporting of the Bank's branches /offices.

Management's Responsibility for Internal Financial Controls

The Bank's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Bank considering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(‘the Guidance Note') issued by the Institute of Chartered Accountants of India(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 Act the Banking Regulation Act1949 and the Guidelines issued by the Reserve Bank of India.

Auditor's Responsibility

Our responsibility is to express an opinion on the Bank's internal financial controlsover financial reporting based on our audit. We conducted our audit in accordance with theGuidance Note issued by the ICAI and the Standards on auditing prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.

An 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 and the audit evidence obtained bythe branch auditors of branches/offices in terms of their reports referred to in theOther Matters paragraph below is sufficient and appropriate to provide a basis for ouraudit opinion on the Bank's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Bank's internal financial control over financial reporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles and other applicable regulations. A bank's internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the bank; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the bank are being made only in accordance withauthorisations of management and directors of the bank; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the bank's assets that could have a material effect on the financialstatements.

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 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

In our opinion to the best of our information and according to the explanations givento us and based on the consideration of the reports of the branch auditors on internalfinancial controls system over financial reporting of the branches / offices referred toin Other Matters paragraph below the Bank has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2017 basedon 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.

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting insofar as itrelates to 848 branches / offices is based on the corresponding reports of the branchauditors.

Our opinion is not modified in respect of this matter.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 008072S)
S. Sundaresan
Partner
(Membership No. 25776)
KOCHI 15 May 2017