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Auditor Report of Jammu & Kashmir Bank Ltd.

Mar 31, 2016

1. We have audited the accompanying standalone financial statements of The Jammu and Kashmir Bank Limited (''the Bank''), which comprise the Balance Sheet as at 31st March 2016, the Profit and Loss Account, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information and notes forming part of the accounts. Also incorporated in these financial statements are the returns of 55 Branches/Offices audited by us and 837 Branches/Offices audited by Statutory Branch Auditors. The Branches/ Offices audited by us and those audited by the other auditors have been selected by the Comptroller & Auditor General of India in accordance with the guidelines issued to the Bank by the Reserve Bank of India.

Management''s Responsibility for the Standalone 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 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 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 and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (''RBI'') from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

4. 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.

5. We conducted our audit of the Bank including its branches in accordance with Standards on Auditing (''the Standards'') 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 of material misstatements.

6. 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, 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. An audit also includes evaluating the appropriateness of accounting 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.

7. 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

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the 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 a true and fair view in conformity with accounting principles generally accepted in India of the state of affairs of the Bank as at 31st March, 2016, and its profit/loss and its cash flows for the year then ended.

Report on Other Legal and Regulatory Requirements

9. 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 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

10. The Comptroller and Auditor-General of India has issued directions indicating the areas to be examined in terms of sub-section (5) of section 143 of the Companies Act, 2013, the compliance of which is set out in "Annexure-A" to this Report.

11. As required by sub section (3) of 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 offices; and branches of the Bank have been found adequate for the purposes of our audit.

12. Further, as required by section 143(3) of the Act, we further report that:

i) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) 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;

iii) the reports on the accounts of the branch offices audited by 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;

iv) 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;

v) 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, to the extent they are not inconsistent with the accounting policies prescribed by RBI;

vi) on the basis of written representations received from the directors as on 31st March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2016 from being appointed as a director in terms of Section 164(2) of the Act; and

vii) with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in "Annexure- B" to this Report.

viii) 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:

a) the Bank has disclosed the impact of pending litigations on its financial position in its financial statements;

b) the Bank did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

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

Annexure-A to para 10 of Independent Auditors Report of even date on the Standalone Financial Statements of the Jammu and Kashmir Bank Limited.

Directions/sub-directions of Comptroller and Auditor General of India under Section 143(5) of the Companies Act, 2013

SI. No. Directions/Sub directions Auditor''s comments including Impact on accounts and financial action taken wherever required statements

1 Whether the company has clear As per information and explanations The acquisition value of the said title/lease deeds for freehold and given to us, the company has clear lands/properties has been capitalized leasehold land respectively? If not title/lease deeds for freehold and and the value as on 31-03-2016 is please state the area of freehold leasehold lands except the following Rs.16.78 crores. and leasehold land for which title/ Land Area lease deeds are not available. Vashi, Mumbai 5400 Sq.ft (1st Floor) Budgam 4 Kanals Ansal Plaza, 17787 Sq.Ft. Khelgaon, Delhi (2nd and 3Rd floor)

It is advised to complete the documentation for clear title at the earliest.

2 Please report whether there are There are cases of waiver /write Profit for the current year is reduced any cases of waiver/write off of off of debts/ loans/ interest etc. by Rs.2.11 crores and unrealized income debts/ loans/ interest etc., if yes, the amounting toRs.2.11 crores in addition of Rs.18.03 crores has been forgone, reasons there for and the amount to the waiver of unaplied interest of involved Rs. 18.03 crores on account of negotiated settlement with the borrowers defaulting in payment due to the circumstances beyond their control such as death/ disappearance of the borrower, recession in economy, no enforceable security, natural calamities such as earthquake, flood, drought, change in govt, policy, genuine business failure in spite of sincere efforts made by borrower etc. and where the recovery chances through normal business operations are bleak.

3 Whether proper records are As per explanations given to us, NIL maintained for inventories lying the company has not received with third parties & assets received any assets as gift/grant(s) from as gift/ grant(s) from Govt, or other government or other authorities, authorities. The company has no inventories.

4 Whether the restructuring of loan As per information and explanations Profit of the current year is reduced by was done as per the provisions given to us, the restructuring of Rs.12.60 crores on account of provision of the Reserve Bank of India and loans done during the year was as made on the restructured accounts. Bank''s own Restructuring of loan per the provisions of the Reserve Policy. Bank of India and Bank''s own Restructuring of loan Policy.

SI. No. Directions/Sub directions Auditor''s comments including Impact on accounts and financial action taken wherever required statements

5 Whether the Bank is maintaining/ As per information and explanations Profit of the current year is reduced developing various assets of the given to us, the bank is maintaining/ by net Rs.12.70 crores. State Govt. The treatment of the developing various assets of assets and expenditure incurred and the State Govt, which are not on revenue earned may be examined the charge of the company. The and comment may be offered. expenditure amounting to Rs.13.86 crores has been incurred & revenue of Rs.1.16 crores has been earned for maintaining/ developing of those assets and amounts have been debited/credited to the Profit & Loss Account.

6 Whether the branches were doing As per information and explanations There is an impact of Rs.2.48 crores window dressing and its impact/ given to us and as per the reports increase in the deposits by similar materiality on the overall deposit of the Branch Auditors, some increase in the advances which has portfolio. branches were involved in doing now been reversed. window dressing by which there is an impact of Rs.2.48 crores increase on the overall deposit portfolio.

7 Whether the Bank has been able to As per information and explanations The impact on the financial health achieve the targets under Priority given to us, the bank has not been of the bank is lower rate of return sector lending, if not, impact on able to achieve the targets under of interest ranging from 3.75% p.a. the financial health of the Bank priority sector lending. As a result to 6.50% p.a. received from the by lending the shortfall amount in of shortfall, the bank has deposits of agencies with which deposits were Rural infrastructure Development low yield interest with the following made for shortfall. Fund, Small industrial Development as on 31-03-16 : Bank of India, etc. may please be PARICULARS (Rs.In Crores) br0Ught0Ut NABARD 823.44

RIDF(NABARD) 1065.30

SIDBI 165.27

NHB(RHDF) 297.07

TOTAL 2348.08

8 Whether there were cases of One account amounting to Rs.142.50 NIL greening of advances, up gradation crores identified by RBI in AQR (BOS of loan account at the fag end of as on 31.03.2016- Rs.113.65 crores) the Financial Year or delay /non- has not been downgraded as NPAs declaration of Non-performing in view of dispensation given by RBI Assets as per RBI guidelines. Its on the basis of representation made impact on the profitability and by the banks. Asset Classification. Further advances amounting to interest amounting to Rs.33.76 crores Rs.246.89 crores were not declared has been reversed on said NPAs and by the bank as NPAs as per RBI Provision of Rs.60.10 crores has been guidelines which were downgraded pr0vided resulting in decrease in after those were identified by the profit of Rs.93 86 crores statutory auditors.

For Gupta Sharma & Associates For Dhar Tiku & Co. For Arora Vohra & Co

Chartered Accountants Chartered Accountants Chartered Accountants

FRN:001466N FRN:003423N FRN:009487N

CA Gurneet Singh Bhan CA Madhusudan Meher CA Prem C. Bansal

Partner Partner Partner

(M. No. 532675) (M No.097409) (M. No. 083597)

For Darshan Nagpal & Associates For Dharam Raj & Co

Chartered Accountants Chartered Accountants

FRN:011022N FRN:014461N

CA Vishal Rometra CA Dharam Raj

Partner Partner

(M. No. 501333) (M No.094108)

Place: Srinagar

Dated: 24th May 2016


Mar 31, 2015

1. We have audited the accompanying standalone financial statements of The Jammu and Kashmir Bank Limited (here-in-after called the "Bank") which comprise the Balance Sheet as at 31st March, 2015, Profit and Loss account and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies, other explanatory information and notes forming part of accounts. Also incorporated in these financial statements are the returns of 59 Branches/Offices audited by us and 784 Branches/Offices audited by Statutory Branch Auditors. The Branches/Offices audited by us and those audited by the other auditors have been selected by the Comptroller & Auditor General of India in accordance with the guidelines issued to the Bank by the Reserve Bank of India.

Management's responsibility for the standalone Financial statements

2. The Bank's Management is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to 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 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 and in accordance with the Banking Regulation Act, complying with Reserve Bank of India Guidelines from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding of 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 internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation 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.

4. We have taken in to 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 there under.

5. We conducted our audit 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 misstatement.

6. 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 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 Bank management, as well as evaluating the overall presentation of the financial statements.

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

opinion

8. In our opinion, and to the best of our information and according to their explanations given to us, the aforesaid standalone financial statements together with the notes there on give the information required by the Banking Regulation Act,1949 as well as the Companies Act, 2013, 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 31st March 2015 and its profit and its cash flows for the year then ended.

Emphasis of matter

9. We draw attention to the following matters in the notes to the financial statement:

a) Note no. 24.1 regarding change in accounting policy of charging depreciation on fixed assets effective 1st April, 2014 from WDV method under the provisions of Income Tax Act, 1961 to Straight Line Method based on remaining useful life of assets as per provisions of the Companies Act, 2013. The Bank has as per new method charged depreciation of Rs.94.50 crores on fixed assets during the financial year 2014-15. Had the bank followed earlier method of providing depreciation, the charge for the year would have been less by Rs.11.49 crores and resultant profit would have increased to that extent.

b) Note no. 24.3 regarding change in method of depreciation and accordingly re-computation of depreciation pertaining to earlier years resulted in excess charge of depreciation amounting to Rs.135.67 crores (Rs.89.55 crores net of deferred tax liability) which has been credited to profit and loss account for the year ended 31st March, 2015.

c) Note no. 26 regarding utilization of floating provisions to the extent of Rs.35.17 crores for making specific provisions for NPAs.

Our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Matters

10. 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 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014

11. As required subsection (3) of 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 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 returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit.

12. Further, as required by section 143(3) of the Companies

Act, 2013, we further report that:

(i) we have sought and obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit;

(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/offices audited by branch auditors of the Bank under section 143(8) of the Companies Act, 2013 and RBI Act have been sent to us and have been properly dealt with by us in preparing this report.

(iv) the Balance Sheet, the statement of Profit and Loss and the Cash Flow Statement dealt with by us in the Report are in agreement with the books of account and returns.

(v) 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.

(vi) with respect to other matters to be included in the Auditor's Report in accordance with Rule II 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.

For gupta sharma & associates ca Neeraj Nagpal chartered accountants partner FrN:001466N m.No.503881

For dharTiku& co For arora vohra & co chartered accountants chartered accountants FrN:003423N FrN:009487N

For darshan Nagpal & associates For dharam raj & co chartered accountants chartered accountants FrN:011022N FrN:014461N

ca vinay saraf ca madhusudan meher partner partner m.No.087262 m.No.097409

ca Karanbir s sethi ca dharam raj partner partner m.no.091188 m.No.094108

place : srinagar dated : 16th may 2015


Mar 31, 2014

Report on the Financial Statements

1. We have audited the accompanying Financial Statements of the "Jammu & Kashmir Bank Limited" which comprise the Balance Sheet as at March 31, 2014, and Proft and Loss Account and the Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information. Incorporated in these fnancial statements are the returns of 60 Branches/offces audited by us and 749 Branches/Offces audited by Statutory Branch auditoRs. The branches audited by us and those audited by the other auditors have been selected by the Comptroller & Auditor General of India in accordance with the guidelines issued to the Bank by the Reserve Bank of India.

Management''s Responsibility for the Financial Statements

2. Management of the Bank is responsible for the preparation of these Financial Statements in accordance with the requirements of the Reserve Bank of India, the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956 and recognized accounting policies and practices including the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the fnancial 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 fnancial 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 fnancial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The Procedures selected depend on the auditors'' judgement, including the assessment of the risks of material misstatement of the fnancial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity''s preparation and

fair presentation of the fnancial 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 fnancial statements.

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

Opinion

6. In our opinion, as shown by books of Bank, and to the best of our information and according to the explanation given to us :

(i) the Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of the state of affairs of the Bank as at March 31, 2014 in conformity with the accounting principles generally accepted in India;

(ii) the Proft and Loss Account, read with the notes thereon shows a true balance of proft, in conformity with accounting principles generally accepted in India, for the year covered by the account; and

(iii) the Cash Flow Statement gives a true and fair view of the cash fows for the year ended on that date.

Report on Other Legal and Regulatory Matters

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

8. Subject to the limitations of the audit as indicated in Paragraphs 1 to 5 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 purpose of the 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 offces and branches of the Bank have been found adequate for the purposes of our audit.

9. In our opinion, the Balance Sheet, Proft and Loss Account and Cash Flow Statement comply with the applicable Accounting Standards. signifcant accounting policies and notes on accounts

By order of the Board of Directors

Place: Srinagar Abdul Majid Bhat

Dated: 12th June, 2014 Company Secretary


Mar 31, 2013

1. We have audited the accompanying Financial Statements of the "Jammu & Kashmir Bank Limited" which comprise the Balance Sheet as at 31st March, 2013, and 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 65 Branches/offices audited by us and 654 Branches/Offices audited by Statutory Branch auditors. The branches audited by us and those audited by the other auditors have been selected by the Comptroller & Auditor General of India in accordance with the guidelines issued to the Bank by the Reserve Bank of India.

Management''s Responsibility for the Financial Statements

2. Management of the Bank is responsible for the preparation of these Financial Statements in accordance with the requirements of the Reserve Bank of India, the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956 and recognized accounting policies and practices including the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI). 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 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 statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity''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, as shown by books of Bank, and to the best of our information and according to the explanation given to us :

(i) the Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of the state of affairs of the Bank as at 31st March, 2013 in conformity with the accounting principles generally accepted in India;

(ii) the Profit and Loss Account, read with the notes thereon shows a true balance of profit, in conformity with accounting principles generally accepted in India, for the year covered by the account; and

(iii) the Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Matters

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

8. Subject to the limitations of the audit as indicated in Paragraphs 1 to 5 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 purpose of the 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 offices and branches of the Bank 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 applicable Accounting Standards.

For O P Garg & Co. For K B Sharma & Co. For Darshan Nagpal & Associates

Chartered Accountants Chartered Accountants Chartered Accountants

FRN: 01194N FRN: 02318N FRN: 011022N

CA. Vikram Garg CA. Rajan Sachdeva CA. D.L .Nagpal

Partner Partner Partner

(M. No. 097038) (M. No. 525115) (M. No.011378)

Place: Srinagar

Dated : 15th May, 2013

For P C Bindal & Co. For K K Goel & Associates

Chartered Accountants Chartered Accountants

FRN: 03824N FRN: 05299N

CA. Samit Gupta CA. K. K. Goel

Partner Partner

(M. No. 093783) (M. No. 015002)


Mar 31, 2012

1. We have audited the accompanying financial statements of the Jammu & Kashmir Bank LimiThed, which comprise the Balance Sheet as at 31st March, 2012 and the StaThement of Profit & Loss and the Cash Flow StaThement for the year then ended and a summary of signifi cant Accounting Policies and other explanatory information. IncorporaThed in these fi nancial staThements are the returns of 65 Branches/offi ces audiThed by us and 572 Branches/Offi ces audiThed by Statutory Branch Auditors.

2. T e Management is responsible for the preparation of these fi nancial staThements in accordance with the requirement of the Reserve Bank of India, the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956 and recognised accounting policies and practices including the Accounting Standards issued by the InstituThe of CharThered Accountants of India (ICAI). T is responsibility includes the design, implementation and mainThenance of inThernal control relevant to the preparation of the fi nancial staThements that are free from maTherial misstaThement whether due to fraud or error.

3. Our responsibility is to express an opinion on these fi nancial staThements based on our audit. We conducThed our audit in accordance with the Standards on Auditing issued by the InstituThe of CharThered Accountants of India. T ose standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial staThements are free from maTherial misstaThement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial staThements. T e procedures selecThed depend on the Auditor's judgment, including the assessment of the risk of maTherial misstaThement of the fi nancial staThements, whether due to fraud or error. In making those risk assessments, the Auditor considers inThernal control relevant to the Company's preparation and fair presentation of the fi nancial staThements in order to design the audit procedures that are appropriaThe in the circumstances. An audit also includes evaluating the appropriaTheness of accounting policies used and the reasonableness of the accounting estimaThes made by the management, as well as evaluating the overall presentation of the fi nancial staThements.

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

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the noThes thereon give 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 true and fair view in conformity with the accounting principles generally accepThed in India:

(i) In the case of the Balance Sheet, of the StaThe of Aff airs of the Bank as at 31st March, 2012;

(ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that daThe; and

(iii) In the case of the Cash Flow StaThement, of the cash fl ows for the year ended on that daThe.

7. T e 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.

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 purpose of our audit and have found them to be satisfactory.

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

c. T e returns received from the offi ces and branches of the Bank have been found adequaThe for the purpose of our audit.

9. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow StaThement comply with the Accounting Standards referred to in Sub- Section (3C) of Section 211 of the Companies Act, 1956.

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 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 those books.

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

(iv) as per information and explanation given to us, the Central Government has, till daThe, not prescribed any cess payable under section 441A of the Companies Act, 1956.

(v) on the basis of writThen representation received from the Directors and taken on record by the Board of Directors, none of the Directors is disqualifi ed as on 31st March, 2012 from being appoinThed as a Director in Therms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

For O P Garg & Co. For K B Sharma & Co. For Verma AssociaThes

CharThered Accountants CharThered Accountants CharThered Accountant

FRN: 01194N FRN: 02318N FRN: 02717N

CA. Manish Kumar Gupta CA. Abhay Kumar CA. Madan Verma



Partner Partner Partner



(M. No. 097191) (M. No. 500681) (M. No. 081631)

For P C Bindal & Co. For K K Goel & AssociaThes CharThered Accountants CharThered Accountants FRN: 03824N FRN: 05299N Partner Partner

CA. P. C. Bindal CA. K. K. Goel

(M. No. 082683) (M. No. 015002)

Place: Srinagar

DaThed : 12th May, 2012

 
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