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Auditor Report of IDBI Bank Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of the IDBI Bank Limited (''the Bank''), which comprise the Balance Sheet as at March 31, 2015 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 (hereinafter referred to as ''the standalone financial statements'').

The audit was planned and conducted as to cover records available at various processing centres/ regional offices/ branches and reports generated through centralised banking applications at central office level and visit at 65 centres/ offices/ branches of the Bank, covering 73% of Advances and 73% of Deposits of the Bank. Incorporated in the said standalone financial statements are the returns of the Dubai branch of the Bank, audited by another auditor.

Management''s Responsibility for the Financial Statements

2. 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 and presentation of these standalone 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance 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; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial 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.

Auditor''s Responsibility

3. 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 accounting 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 of the Bank including its branches and central processing unit/ regional processing units in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 misstatements.

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 judgment, 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 financial control relevant to the Bank''s preparation of the financial statements 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 financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

5. In our opinion and to the best of our information and according to the explanations given, the said financial statements together with notes thereon give full information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013 in the manner so required for banking companies and give true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Bank as at March 31,2015;

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

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

Others Matter

6. We did not audit the financial statement of the Dubai branch of the Bank, whose financial statement as at March 31,2015 reflects total assets of Rs. 257,284,839 thousand, total revenues of Rs. 11,054,928 thousand and cash out flows of Rs. 25,045,251 thousand for the year then ended. These financial statements have been audited by another auditor, duly qualified to act as an auditor in the country of incorporation of the said branch, whose report has been furnished to us and which was relied upon by us for our opinion on the financial statements of the Bank. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

7. The Balance Sheet, Profit and Loss Account and the Cash Flow Statement have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013.

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

9. The key operations of the Bank are completely automated and key applications are integrated with the core banking system, the audit is carried out centrally as all the necessary records and data required for the purpose of the audit are centrally available therein.

10. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with accounting standards referred to in Section 133 of the Companies Act, 2013 to the extent they are not inconsistent with the accounting policies prescribed by Reserve Bank of India.

11. 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 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 Bank so far as it appears from our examination of those book; the financial accounting systems of the Bank are centralised and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the branches;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) provision of Section 164 (2) of the Companies Act, 2013 are not applicable in terms of Notification No.G.S.R.829(E) dated October 21,2003 issued by Department of Company Affairs, Government of India;

(f) with respect to the other matters to be included in the Auditor''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;

i. The Bank has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note 18(9)(c) to the standalone financial statements;

ii. The Bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 18(9)(b) to the standalone financial statements;

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

For Khimji Kunverji & Co For G D Apte & Co

Chartered Accountants Chartered Accountants

FRN: 105146W FRN: 100515W

Gautam V Shah Saurabh S Peshwe

Partner (F-117348) Partner (F-121546)

Mumbai

May 26, 2015


Mar 31, 2014

1. We have audited the accompanying financial statements of the IDBI Bank Limited (''the Bank''), which comprise the Balance Sheet as at March 31, 2014 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.

The audit was planned and conducted as to cover records available at various processing centers/ regional offices/ branches and reports generated through centralized banking applications at central office level and visit at 69 centers/offices/branches of the Bank, covering 77% of Advances and 78% of Deposits of the Bank. Incorporated in the said financial statements are the returns of the Dubai branch of the Bank, audited by another auditor.

Management''s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements that gives true and fair view of financial position, financial performance and cash flows of the bank in accordance with provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956 and circulars and guidelines issued by Reserve Bank of India from time to time. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that 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 of the Bank including its branches and central processing unit/regional processing units 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 misstatements.

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 judgment, 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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, the said financials statements together with notes thereon give full information required by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in the manner so required for banking companies and give true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Bank as at March 31, 2014;

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

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

Emphasis of Matter

7 We draw attention to Note.7(b) to the financial statements which describes creation of deferred tax liability on Special Reserve under Section 36(1)(viii) of the Income Tax Act, 1961 pursuant to RBI''s Circular No. DBOD. No. BP. BC.77/ 21.04.018/2013-14 dated December 20, 2013. Our opinion is not qualified in respect of this matter.

Other Matters

8 We did not audit the financial statement of the Dubai branch of the Bank, whose financial statement as at March 31, 2014 reflects total assets of Rs. 241,007,883 thousand, total revenues of Rs. 10,500,926 thousand and cash outflows of Rs. 2,781,475 thousand for the year then ended. These financial statements have been audited by another auditor, duly qualified to act as an auditor in the country of incorporation of the said branch, whose report has been furnished to us and which was relied upon by us for our opinion on the financial statements of the Bank. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

9 The Balance Sheet and Profit and Loss Account and the Cash Flow Statement 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. 10 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 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 key operations of the Bank are completely automated and key applications are integrated with the core banking systems, the audit is carried out centrally as all the necessary records and data required for the purposes of our audit are centrally available therein.

11 In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with accounting standards referred to in Subsection(3C) of Section 211 of the Companies Act, 1956 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013), to the extent they are not inconsistent with the accounting policies prescribed by Reserve Bank of India.

12 We further report that:

(i) the Balance Sheet, Profit and Loss Account dealt with by this report are in agreement with the books of account;

(ii) the financial accounting system of the Bank are centralised and therefore, accounting returns are not submitted by the branches;

(iii) 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;

(iv) provision of Section 274(1)(g) of the Companies Act, 1956 are not applicable in terms of Notification No. G.S.R.829 (E) dated October 21, 2003 issued by Department of Company Affairs, Government of India.

For Khimji Kunverji & Co For G D Apte & Co

Chartered Accountants Chartered Accountants

FRN: 105146W FRN: 100515W

Gautam V Shah Saurabh S Peshwe

Partner (F–117348) Partner (F–121546)

Mumbai

April 30, 2014


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

1 We have audited the accompanying financial statements of the IDBI Bank Limited (''the Bank''), which comprise the Balance Sheet as at March 31, 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,

The audit was planned and conducted as to cover records available at various processing centers/ regional offices/ branches and reports generated through centralized banking applications at central office level covering 77 % of Advances and 64 % of Deposits of the Bank and visit at 65 centers/ offices/ branches of the Bank, Incorporated in the said financial statements are the returns of the Dubai branch of the Bank, audited by another auditor,

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2 Management is responsible for the preparation of these financial statements that gives true and fair view of financial position, financial performance and cash flows of the bank in accordance with provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956 and circulars and guidelines issued by Reserve Bank of India from time to time, This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that 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 of the Bank including its branches and central processing unit 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 misstatements,

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 judgment, 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, An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 said financials statements together with notes thereon give full information required by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in the manner so required for banking companies and give true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

OTHER MATTER

We did not audit the financial statement of the Dubai branch of the Bank, whose financial statement as at March 31, 2013 reflects total assets of Rs.195,178,629 thousand, total revenues of Rs.6,055,259 thousand and cash flows of Rs.26,191,261 thousand for the year then ended. These financial statements have been audited by another auditor, duly qualified to act as an auditor in the country of incorporation of the said branch, whose report has been furnished to us and which was relied upon by us for our opinion on the financial statements of the Bank.

The financial statements of the Bank for the year ended March 31, 2012, were audited by another auditors who expressed an unmodified opinion on those statements on April 21, 2012

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

7 The Balance Sheet and Profit and Loss Account and the Cash Flow Statement 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.

8 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 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 key operations of the Bank are completely automated and key applications are integrated with the core banking systems, the audit is carried out centrally as all the necessary records and data required for the purposes of our audit are centrally available therein.

9 In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with accounting standards referred to in Subsection (3C) of Section 211 of the Companies Act, 1956, to the extent they are not inconsistent with the accounting policies prescribed by Reserve Bank of India

10 We further report that :

(i) the Balance Sheet, Profit and Loss Account dealt with by this report are in agreement with the books of account;

(ii) the financial accounting system of the Bank are centralised and therefore, accounting returns are not submitted by the branches ;

(iii) 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;

(iv) provision of Section 274(1)(g) of the Companies Act, 1956 are not applicable in terms of Notification No. G.S.R.829 (E) dated October 21, 2003 issued by Department of Company Affairs, Government of India

For Khimji Kunverji & Co For G. D. Apte & Co.

Chartered Accountants Chartered Accountants

FRN: 105146W FRN: 100515W

Gautam V Shah Saurabh S Peshwe

Partner (F-117348) Partner (F-121546)

Mumbai

April 25, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of IDBI Bank Limited (the Bank) as at March 31, 2012 and also the Profit and Loss Account and the Cash Flow Statement of the Bank annexed thereto for the year ended on that date. 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. The audit was so planned and conducted as to cover records available at various processing centers/regional offices/ branches and reports generated through centralized banking applications at central office level covering 75 % of Advances and 58 % of Deposits of the Bank and visit at 61 centers/offices/branches of the Bank. Incorporated in the said fi nancial statements are the returns of the Dubai branch of the Bank, audited by another auditor.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial 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. We did not audit the financial statement of the Dubai branch of the Bank, whose financial statement as at March 31, 2012 reflects total assets of Rs. 101257063 Thousand, total revenues of Rs. 2587559 Thousand and cash flows of Rs. 1324659 Thousand for the year then ended. These financial statements have been audited by another auditor, duly qualified to act as an auditor in the country of incorporation of the said branch, whose report has been furnished to us and which was relied upon by us for our opinion on the financial statements of the Bank.

4. The Balance Sheet and 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.

5. We report that :

(i) 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 and have found them to be satisfactory.

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

(iii) The returns/data generated from the offices and branches of the Bank through core banking application have been found adequate for the purposes of our audit.

6. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3(C) of Section 211 of the Companies Act, 1956 read with guidelines issued by the Reserve Bank of India in so far as they apply to the Bank.

7. 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 the returns;

(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 these books;

(iii) the report on the financial statement of the Dubai branch audited by other auditor has been dealt with in preparing our report in the manner considered appropriate by us;

(iv) 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.

(v) provisions of Section 274(1)(g) of the Companies Act, 1956 are not applicable in terms of Notification No. G.S.R.829 (E) dated-October 21, 2003 issued by Department of Company Affairs, Government of India

8. In our opinion and to the best of our information and according to the explanations given to us and on consideration of report of the auditor of Dubai branch, the said financial statements read with 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 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 March 31, 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 for the year ended on that date.

For S.P.Chopra & Co. For Chokshi & Chokshi

Chartered Accountants Chartered Accountants

Firm Regn. No. 000346N Firm Regn. No. 101872W

Pawan K. Gupta Nilesh R. Joshi

Partner Partner

Membership No. 92529 Membership No. 114749

Place: Mumbai

Date: April 21, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of IDBI Bank Limited (the Bank) as at March 31, 2011 and also the Profit and Loss Account and the Cash Flow Statement of the Bank annexed thereto for the year ended on that date. 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. Incorporated in the said financial statements are the returns of the Dubai branch of the Bank, audited by another auditor.

2. We conducted our audit in accordance with the 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. We did not audit the financial statements of the Dubai branch of the Bank, whose financial statements as at March 31, 2011 reflect total assets of Rs 40815739 Thousand, total revenues ofRs 561948 Thousand and cash flows of Rs 7593870 Thousand for the year then ended. These financial statements have been audited by another auditor, duly qualified to act as auditor in the country of incorporation of the said branch, whose report has been furnished to us and which was relied upon by us for our opinion on the financial statements of the Bank.

4. The Balance Sheet and 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.

5. We report that:

(i) 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 and have found them to be satisfactory.

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

(iii) The returns/data generated from the offices and branches of the Bank through core banking application have been found adequate for the purposes of our audit.

6. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3(C) of Section 211 of the Companies Act, 1956 read with guidelines issued by the Reserve Bank of India in so far as they apply to the Bank.

7. 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 the returns;

(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 these books;

(iii) the report on the financial statement of the Dubai branch audited by other auditor has been dealt with in preparing our report in the manner considered appropriate by us;

(iv) 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.

(v) provisions of Section 274(1 )(g) of the Companies Act, 1956 are not applicable in terms of Notification No. C.S.R.829 (E) dated-October 21, 2003 issued by Department of Company Affairs, Government of India.

8. In our opinion and to the best of our information and according to the explanations given to us and on consideration of report of the auditor of Dubai branch, the said financial statements read with 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 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 March 31, 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 for the year ended on that date.



For S.P. Chopra & Co. For Chokshi & Chokshi

Chartered Accountants Chartered Accountants

Pawan K.Gupta Niiesh R. Joshi

Partner Partner

Membership No. 92529 Membership No. 114749

Firm Regn. No.000346N Firm Regn. No.101872W

Place : Mumbai

Date : April 19,2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of IDBI Bank Limited (the Bank) as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Bank annexed thereto for the year ended on that date. These financial statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our audit. Incorporated in the said financial statements are the returns of the Dubai branch of the Bank, audited by another auditor.

2. We conducted our audit in accordance with the 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. We did not audit the financial statement of the Dubai branch of the Bank, whose financial statement for the period ended 31st March, 2010 reflect total assets of Rs. 2915546 Thousand as at 31.03.2010, total revenues of Rs. 4329 Thousand and cash flows of Rs. 53885 Thousand for the period then ended. These financial statements have been audited by another auditor, duly qualified to act as auditor in the country of incorporation of the said branch, whose report has been furnished to us and which was relied upon by us for our opinion on the financial statements of the Bank.

4. The Balance Sheet and 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.

5. We report that:

(i) 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 and have found them to be satisfactory.

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

(iii) The returns/data generated from the offices and branches of the Bank through core banking application have been found adequate for the purposes of our audit.

6. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3(C) of Section 211 of the Companies Act, 1956 read with guidelines issued by the Reserve Bank of India in so far as they apply to the Bank.

7. 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 the returns;

(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 these books;

(iii) the report on the financial statement of the Dubai branch audited by other auditor has been dealt with in preparing our report in the manner considered appropriate by us;

(iv) 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.

(v) provisions of Section 274(1 )(g) of the Companies Act, 1956 are not applicable in terms of Notification No. G.S.R.829 (E) dated-October 21, 2003 issued by Department of Company Affairs, Government of India

8. In our opinion and to the best of our information and according to the explanations given to us and on consideration of report of the Dubai auditor, the said financial statements read with 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 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 March 31,2010;

(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 for the year ended on that date.

APPENDICES Appendix I: Auditors Report to the Members of IPB1 Capital Market Services Limited

1. We have audited the attached Balance Sheet of IDBI Capital Market Services Limited as at March 31, 2010 and also the related Profit and Loss Account and the 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 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. As required by the Companies (Auditors Report) Order, 2003 (as amended) (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (the Act), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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 those 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 comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e. In terms of Government of India, Department of Corporate Affairs Notification No.GSR 829(E) dated 21st October 2003, Government companies are exempt from the applicability of provisions of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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 the significant accounting policies and other notes thereon give the information required by the Companies Act 1956, 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 March 31, 2010;

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

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

Annexure to the Auditors Report on IDBI Capital Market Services Limited (Referred to in paragraph 3 of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) Fixed assets have been physically verified by the management, during the year and no material discrepancies were identified on such verification.

(c) The Company has not disposed off any substantial part of the fixed assets during the year.

(ii) As the Company does not have inventory, the Clauses (ii) (a) to (ii)(c) of paragraph 4 of the Order are not applicable to the Company.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub-clause (b), (c) and (d) are not applicable.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub-clause (f) and (g) are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase and sale of securities held as investments, purchase of fixed assets and for the sale of services. We have not observed any continuing major weakness in such internal control system during the course of the audit.

(v) According to the information and explanations provided by the management, there were no transactions during the year pursuant to the contracts or arrangements referred to in Section 301 of the Act. Accordingly, sub-clause (b) is not applicable.

(vi) The Company has not accepted any deposits under the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 1957 framed there under.

(vii) In our opinion, the internal audit system of the Company is commensurate with its size and the nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with appropriate authorities applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Service Tax, Excise Duty, Wealth Tax, Custom Duty and Cess which have not been deposited on account of any dispute.

(x) The Company has no accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

(xi) According to the books of accounts and the records of the Company, no amount is due to financial institution or bank or debenture holders.

(xii) According to the information and explanations given to us and based on documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In respect of dealing / trading in shares, securities and other investments, in our opinion and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities and other investments have been held by the Company, in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from bank or financial institutions.

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) On the basis of review of utilization of funds, which is based on overall examination of the Balance Sheet of the Company, related information made available to us by the management, funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issue during the year

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.

For SHAH GUPTA & CO Chartered Accountants VIPUL K. CHOKSI Place : Mumbai Partner Date : April 16, 2010 Membership No. 37606





 
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