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Auditor Report of Federal Bank Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial state- ments of THE FEDERAL BANK LIMITED (herein after referred to as "the Bank"), which comprise the Balance Sheet as at 31st March 201 5, the Profit and Loss Account and the Cash Flow State- ment for the year then ended, and a summary of the significant accounting policies and other explanatory information. Incorpo- rated in these financial statements are the returns of 57 branches / offices of the Bank audited by one of us and 1220 branches / offices audited by the branch auditors of the Bank''s branches.

Managements'' Responsibility for the Standalone 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 these standalone financial state- ments that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949, the accounting principles generally accepted in India, in- cluding the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to banks and guidelines issued by Reserve Bank of India. This responsibility also includes main- tenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Bank and for preventing and detecting frauds and other irregularities; selec- tion and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal fi- nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the ac- counting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(1 0) of the Act. Those Stand- ards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstate- ment.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, in- cluding the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Bank''s preparation of the financial state- ments that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Bank has in place an adequate internal financial controls system over finan- cial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the ac- counting policies used and the reasonableness of the accounting estimates made by the Bank''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements together with the notes thereon give the informa- tion required by the Banking Regulation Act, 1949 as well as the Companies Act, 201 3, in the manner so required for the Banking Companies and give a true and fair view of the state of affairs of the Bank as at 31 st March 201 5, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note No.2.11 of Schedule 18 to the Fi- nancial Statements which describes proportionate charge of pension liability of the Bank amounting to Rs. 33.68 Crore to the Profit and Loss Account and the balance unamortised pension liability of Rs. Nil (Rs. 33.68 Crore as at 31 st March 2014), included in Schedule 11 to the Financial Statements, pursuant to the exemption from the application of the provisions of the Accounting Standard (AS) 15, Employee Benefits, granted by the Reserve Bank of India and made applicable to the Bank vide letter no. DBOD No.BP.BC.1 5896 / 21.04.018 / 2010-11 dated April 8, 2011.

Our Opinion is not modified in respect of this matter.

Report on other Legal and Regulatory Requirements

As required by Section 143 (3) of the Companies Act, 201 3 and Section 30 of the Banking Regulation Act, 1 949 we report that:

(i) We have sought and obtained all the information and expla- nations which to the best of our knowledge and belief were necessary for the purpose of our audit.

(ii) The transactions of the Bank, which have come to our notice, have been within the powers of the Bank.

(iii) In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us.

(iv) The reports on the accounts of the branch offices audited by the branch auditors of the Bank under Section 143(8) of the Companies Act, 2013 have been sent to us and have been properly dealt with by us in preparing this report.

(v) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by us in the Report are in agree- ment with the books of account and with the returns received from branches not visited by us.

(vi) In our opinion, the aforesaid standalone financial state- ments comply with the Accounting Standards specified under Section 1 33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(vii) On the basis of the written representations received from the directors as on 31st March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March 201 5 from being appointed as a director in terms of Section 1 64 (2) of the Act.

(viii) With respect to the other matters to be included in the Audi- tor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The Bank has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 2.13 of Schedule 1 8 to the financial statements;

b. The Bank has made provision, as required under the applica- ble law or Accounting Standard for material forseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 2.14 of Schedule 18 to the financial statements.

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

For Deloitte Haskins & Sells For M P Chitale & Co. Chartered Accountants Chartered Accountants (Firm''s Registration (Firm''s Registration No.008072S) No.101 851W)

M. Ramachandran Ashutosh Pednekar Partner Partner (Membership No.16399) (Membership No.41037)

KOCHI, 29th April, 2015


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of The Federal Bank Limited ("the Bank"), which comprise the Balance Sheet as at 31st March, 2013 and the Profit and Loss Account and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. Incorporated in these financial statements are the returns of 35 branches / offices of the Bank audited by one of us and 1096 branches / offices audited by branch auditors.

Management''s Responsibility for the Financial Statements

2. The Bank''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949, Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 in so far as they apply to the banks and the Guidelines issued by Reserve Bank of India. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Bank''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949 as well as Companies Act, 1956 in the manner so required for banking companies and the Guidelines issued by Reserve Bank of India from time to time and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March, 2013,

(ii) in the case of the Profit and Loss Account, of the profit of the Bank for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of cash flows of the Bank for the year ended on that date.

Emphasis of Matter

7. We draw attention to Note No.2.9 of Schedule 18 to the Financial Statements which describes proportionate charge of pension liability of the Bank amounting to Rs. 33.68 Crore to the profit and Loss Account and the balance unamortised pension liability of Rs. 67.36 Crore as at 31st March 2013, included in Schedule 11 to the Financial Statements to be amortised over the next two years, pursuant to the exemption from the application of the provisions of the Accounting Standard (AS) 15, Employee Benefits, granted by the Reserve Bank of India and made applicable to the Bank vide letter no. DBoD No.Bp.BC.15896 / 21.04.018 / 2010-11 dated April 8, 2011.

our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Matters

8. As required by Section 227(3) of the Companies Act, 1956 and Section 30 of the Banking Regulation Act,1949, we report that:

(a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory.

(b) the transactions of the Bank, which have come to our notice, have been within the powers of the Bank.

(c) the returns received from the branches / offices of the Bank not visited by one of us have been found adequate for the purposes of our audit.

9. In our opinion, the Balance Sheet, profit and Loss Account and Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 in so far as they apply to banks.

10. We further report that:

(i) the Balance Sheet and profit and Loss Account dealt with by this report, are in agreement with the books of account and with the returns received from the branches / offices not visited by any one of us.

(ii) in our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our examination of those books.

(iii) the reports on the accounts of the branches audited by branch auditors have been dealt with in preparing our report in the manner considered necessary by us.

(iv) on the basis of the written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For Deloitte Haskins & Sells For M P Chitale & Co.

Chartered Accountants Chartered Accountants

(Registration No.008072S) (Registration No. 101851W)

M. Ramachandran Ulhas Chitale

Partner Partner

(Membership No.16399) (Membership No. 32292)

kochi,

27 April, 2013.


Mar 31, 2012

1. We have audited the attached Balance Sheet of THE FEDERAL BANK LIMITED, Aluva as at 31st March 2012 and also the Profit and Loss Account of the Bank and the Cash Flow Statement annexed thereto for the year ended on that date in which are incorporated the returns of 16 branches /offices audited by us and 962 branches / offices audited by other auditors. These financial statements are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949, read with Section 211 of the Companies Act, 1956.

4. We report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

b) In our opinion, the transactions of the Bank, which have come to our notice, have been within the powers of the Bank;

c) The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit;

d) In our opinion,the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) The Bank's Balance Sheet andProfit and Loss Account dealt with by this report, are in agreement with the books of account and the returns;

f) In our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our examination of those books;

g) The reports on the accounts of the branches audited by branch auditors have been dealt with in preparing our report in the manner considered necessary by us;

h) As per the information and explanation given to us the Central Government has, till date, not prescribed any cess payable under Section 441A of the Companies Act,1956;

i) On the basis of written representation received from the directors as on 31st March 2012and taken on record by the Board of Directors,none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

5. Without qualifying our opinion, we draw attention to Note No.2 of Schedule 19 to the financial statements, which describes deferment of pension liability of the bank to the extent of Rs.101.04 crore pursuant to the approval granted by the Reserve Bank of India to the Bank vide letter no.DBOD No.BP.BC.15896/21.04.018/2010-11 dated0 8.04.2011, for availing the exemption from application of the provisions of Accounting Standard (AS) 15- Employee Benefits, as provided therein.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Accounting policies followed by the Bank and the notes thereon, give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in the manner so required for the banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March 2012;

ii) in the case of the Profit and Loss Account, of the profit of the Bank for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows of the Bank for the year ended on that date.

For Varma and Varma For Price Patt & Co.,

Chartered Accountants Chartered Accountants

FRN:004532S FRN:02783S

R. Rajasekharan S. Ramaswamy

Partner, Membership No. 22703 Partner, Membership No. 025918

Place: Kochi

Date: 11-05-2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of THE FEDERAL BANK LIMITED, Aluva as at 31st March 2011 and also the Profit and Loss Account of the Bank and the Cash Flow Statement annexed thereto for the year ended on that date in which are incorporated the returns of 20 branches /ofces audited by us and 737 branches / ofces audited by other auditors. These financial statements are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949, read with Section 211 of the Companies Act, 1956.

4. We report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

b) In our opinion, the transactions of the Bank, which have come to our notice, have been within the powers of the Bank;

c) The returns received from the ofces and branches of the Bank have been found adequate for the purposes of our audit;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, in so far as they apply to banks;

e) The Bank's Balance Sheet and Profit and Loss Account dealt with by this report, are in agreement with the books of account and the returns;

f) In our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our examination of those books;

g) The reports on the accounts of the branches audited by branch auditors have been dealt with in preparing our report in the manner considered necessary by us;

h) As per information and explanation given to us, the Central Government has, till date, not prescribed any cess payable under Section 441A of the Companies Act,1956;

i) On the basis of written representation received from the directors as on 31st March 2011 and taken on record by the Board of Directors, none of the directors is disqualifed as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

5. Without qualifying our opinion, we draw attention to Note No.3 of Schedule 19 to the financial statements, which describes deferment of pension liability of the Bank to the extent of Rs. 134.72 crore pursuant to the approval granted by the Reserve Bank of India to the Bank vide letter no. DBOD. No.BP.BC.15896/21.04.018/2010-11 dated 08.04.2011, for availing the exemption from application of the provisions of Accounting Standard (AS) 15 - Employee benefits, as provided therein.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Accounting policies followed by the Bank and the notes thereon, give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in the manner so required for the banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of afairs of the Bank as at 31st March 2011;

ii) in the case of the Profit and Loss Account, of the Profit of the Bank for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows of the Bank for the year ended on that date.

For Varma and Varma For Price Patt & Co.,

Chartered Accountants Chartered Accountants

FRN: 004532S FRN: 02783S

R. Rajasekharan S. Ramaswamy

Partner, Membership No. 22703 Partner, Membership No. 025918

Place: Kochi Date: 6th May, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of FEDBANK FINANCIAL SERVICES LIMITED as at 31st March, 2010, Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (hereinafter referred to as the "Act"), we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:-

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

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books;

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the accounting standards referred to in Section 211 (3C) of the Act, to the extent applicable;

e. On the basis of the written representation received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director of the Company under Section 274(1 )(g) of the Act;

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with "Principal Accounting Policies and Notes of Accounts" in Schedule 9 and other notes appearing elsewhere in the accounts, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2010 and

ii) in the case of the Profit & Loss Account, of the profit for the year ended as on that date.

iii) in the case of the Cash Flow Statement, of the cash flow of the company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR AUDIT REPORT OF EVEN DATE

On the basis of such checks as were considered appropriate and according to the information and explanations given to us during the course of audit, we state that:

1. (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed in such verification, and the same has been properly dealt with in the books of accounts;

(c) No fixed assets have been disposed off during the year.

2. The company has no inventories.

3. The Company has not taken / granted any loans from/to companies, firms and other parties covered under Section 301 of the Act.

4. The Company has adequate internal control system commensurate with the size of the company, and the nature of its business, for the purchase of fixed assets, and for sale of services. We have not observed any major weaknesses in the internal control system.

5. The Company has not entered into any contracts or arrangements referred to in section 301 of the Act.

6. The Company has not accepted any deposits during the year.

7. The Company has an internal audit system commensurate with the size and nature of its business.

8. Maintenance of cost records is not prescribed by the Central Government in respect of the activities of the company.

9. (a) According to the information and explanations given to us, the company is generally regular in depositing undisputed amounts payable in respect of income-tax, wealth tax, sales tax, customs duty, service tax, excise duty, cess and other statutory dues. No undisputed amounts payable in respect of above were outstanding as at 31.3.2010 for a period of more than six months from the date they become payable. (b) According to the records of the company, there are no dues of sales tax, income-tax, customs duty, wealth tax, excise duty, service tax and cess which have not been deposited on account of any dispute.

10. The Company has no accumulated losses as at 31st March 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. The company has not borrowed any money from financial institutions or banks or debenture holders.

12. The company has not granted any loans and advances on the basis of security, by way of pledge of shares, debentures and other securities.

13. The company is not a chit fund, Nidhi, or a mutual benefit society.

14. The company is not dealing in shares, securities, debentures and other investments.

15. The company has not given any guarantee for loans taken by others.

16. The company has not taken any term loans.

17. No funds have been raised on short term basis.

18. The company has not made any preferential allotment of shares.

19. No debentures have been issued.

20. Company has not raised any money by way of public issue.

21. During the course of our examination of the books and records for the Company, carried out in accordance with the generally accepted audit practices in India, and according to the information and explanation given to us, we have not come across any instances of fraud on or by the Company, noticed or reported during the year.

For R KRISHNA IYER & CO. CHARTERED ACCOUNTANTS R KRISHNA IYER Kochi PARTNER

13.05.2009 (Membership No. 10525)

Firm Registratio n No. 14745

 
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