(To be obtained on branch letter head)
Management Representation Letter
To,
M/s ___________________,
Chartered Accountants,
_______________,
_______________,
Dear Sir(s),
Sub: Statutory Audit for the year ended March 31, 2014
This representation letter is provided in connection with your audit of the financial statements of _____________ branch of _______________ bank, for the year ended March 31, 2014, for the purpose of expressing an opinion as to whether the financial statements give a true and fair view of the state of affairs of ___________ branch of _______________ bank as of March 31, 2014, and of the results of operations for the year then ended. We acknowledge our responsibility for preparation of financial statements, in accordance with the financial reporting framework applicable to the Bank, including the regulatory requirements of the Reserve Bank of India.
We confirm to the best of our knowledge and belief, the following representations:
- Accounting Policies – The accounting policies, as approved by the board of directors of the Bank, have been duly followed. There are no changes in the accounting policies followed by the branch during the current year.
- Assets
2.1. The All the assets owned by the bank and transferred to the branch and such other asset/s, as has/have been acquired by the branch, has/have been duly accounted for, and none of the assets is encumbered.
2.2. The fixed assets held by Branch have been accounted at the Head Office and have been physically verified at the year end. No discrepancies have been noticed on such verification. Depreciation on these assets has been provided at Head Office as per the policy of the bank.
2.3. In respect of assets other than fixed assets, the same do not have a value lower than realisable value.
2.4. The branch is operating from a leased premise and there is no dispute with respect to the tenancy and lease charges.
3. Capital Commitments – At the balance sheet date, there were no outstanding commitments for capital expenditure other than those disclosed in the financial statements.
4. Cash and Bank Balances – The cash balances as on March 31, 2014 has been verified by us.
5. Liabilities – The branch has recorded all known liabilities in the financial statements.
6.Contingent Liabilities
6.1. The branches has disclosed in the notes to the financial statements all;
(a) Guarantees that we have given to third parties;
(b) Letter of Credits (Local/Import);
(c) Letter of Comfort (Local/Import);
(d) Deferred Payment Credits/Guarantees (Local/Import); and
(e) All other contingent liabilities.
6.2. Other than for advances, there are no matters involving the branches in any claims in litigation, arbitration or other disputes in which there may be some financial implications, including for staff claim, branch rentals, municipal taxes, local levies, etc. except for those which have been appropriately included under contingent liabilities.
6.3. Guarantees, if any are disclosed net of margins as at the year-end, and expired guarantee, if any where the claim year has also expired has been correctly removed from the branches return.
6.4. None of the contingent liabilities disclosed in the notes are likely to result in a loss, requiring adjustment of assets or liabilities.
7. Provisions for Claims and Losses – Provision has been made in the accounts for all known losses and claims of material accounts.
8. Events after the Balance Sheet Date – There have been no events subsequent to the balance sheet date that require adjustments, or disclosure in, the financial statements or notes thereto.
9. Profit And Loss Account – Except as disclosed in the financial statements, the result for the year were materially affected by:
(a) circumstances of an exceptional or non-recurring nature;
(b) changes or credits of prior years;
(c) changes in accounting policies.
10. Reports – We have made available to you all the following latest reports on the accounts of our branches, and compliance by the branches on the observations contained therein:
(a) Previous year’s branch audit report;
(b) Internal inspection reports;
(c) Concurrent Audit Reports;
(d) Migration Audit Reports;
(e) Report on any other Inspection Audit that has been conducted during the course of the year relevant to the financial year 2013-14.
Apart from the above, the branches has not received any show cause notice, inspection advice, etc. from Government of India, Reserve Bank of India, or any other monitoring or regulatory authority of India that could have a material effect on the financial statements of the branch during the year.
11. Balancing of Books – The books of accounts are computerised and hence the subsidiary records are automatically balanced with the relevant control records. In the case of manual sub-ledgers maintained, we confirm that they duly match with the general ledger balances.
12. Overdue/Matured Term Deposits – All overdue/matured term deposits are held as overdue/matured term deposits. No provision of interest on overdue/matured Term Deposits has been made.
13. Advances – In respect of the Advances and income thereon, the income recognition and asset classification (IRAC) norms prescribed by the Reserve Bank of India have been complied with.
14. Outstanding in Suspense/ Sundry Account – The year-wise/ entry-wise break up of amounts outstanding in Sundry deposits/ sundry assets as on March 31, 2014 has already been submitted to you along with explanation of the nature of the amounts in brief and supporting evidence relating to existence of such amounts in the aforesaid accounts.
15. Interest Provisions
15.1. Interest provision has been made on deposits, etc. except overdue/matured fixed deposits, in accordance with the extant instructions of the Head Office.
15.2. The interest provision for Head Office Interest shall be made at the Head Office
16. Stationery – Stock of unused stationery like security papers, demand draft book, etc. have been produced for your physical verification and are in order.
17. Long Form Audit Report-Branch Response to the Questionnaire – In connection with the LFAR, complete information as regards each item in the questionnaire has been made available to you in order to enable you to verify the same for the purpose of your audit.
18. Other Certification – Duly authenticated, information as regards other matters which, as per the bank’s letter of appointment, require certification has been made available to you.
19. General – There is no enquiry going on or concluded during the year by CBI or any other vigilance or investigating agency on the branch or on its employees and no cases of frauds or of misappropriation of assets of the branches have come to the notice of the Management during the year other than for amounts for which provisions have already been made in the books of accounts.
- Provision for non-performing assets, depreciation, provision for income tax, provision for bonus, gratuity, service tax, etc., is made at Head Office. Therefore, the same has not been provided in the branch accounts.
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The financial statements are free of material misstatements, including omissions.
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The branch has complied with all aspects of contractual agreements that could compliance. There has been no non-compliance with requirements of regulating authorities that could have a material effect on the financial statements in the event of non-compliance.
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We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities reflected in the financial statements.
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The other particulars required have already been given to you and particulars and other representations made to you from time to time are true and correct in all respects.
25. Tax Audit for the year ended March 31, 2014 (Tax Audit in terms of Section 44AB of the Income Tax Act, 1961)
The information required for the tax audit under section 44AB of the Income Tax Act, 1961 for the year ended March 31, 2014 has been made available to you in order to enable you to verify the same for the purpose of your report thereon. We certify the following:
PART – A
25.1. Permanent Account No. of the bank is given in Form 3CD.
25.2. The address as per the jurisdiction of the assessee falls under section 124 of the Income Tax Act, 1961 and given in Form 3CD.
25.3. The status as defined under the Income tax Act, 1961 is Banking Company.
PART – B
25.4. There is no change in nature of business in current year as compared to preceding previous year.
25.5. The books of accounts maintained by us have been correctly disclosed in clause 9(b) of Form 3CD.
25.6. Our Profit & Loss account does not include profits and gains assessable on presumptive basis under section 44AD, 44AE, 44AF, 44B, 44BB, 44BBA, 44BBB, 172 of the Income Tax Act, 1961.
25.7. The method of accounting followed is as per clause 11(a) which has been consistently followed in the immediately preceding previous year. There was no change in the method of accounting employed vis-à-vis the method employed in the immediately preceding previous year.
25.8. Sum received from employee towards contributions to any provident fund or superannuation fund or any other fund mentioned in section 2(24)(x) which is paid/ not paid with due dates to concerned authorities under section 36(1)(va) are mentioned in Clause 16(b) of our Form 3CD and the same are correct.
25.9. In clause 17 of Form 3CD, there are no other amounts of such items debited to Profit & Loss Account.
25.10. No payments are made to persons specified under section 40A(2)(b).
25.11. There is no amount of profit chargeable to tax under section 41 as disclosed under clause 20 of Form 3CD.
25.12. Except for the items shown under clause 21(ii)(B), no tax, duty or other sum as referred to under section 43B has been provided as at the year end.
25.13. No expenditure/ income of an earlier year has been debited/ credited to the Profit & Loss Account except to the extant disclosed under clause 22(b) of Form 3CD.
25.14. No loans or deposits of Rs.20000/- or more have been repaid in cash other than those specified in the statement of particulars as given in the respective clause of Form 3CD. The details of loans or deposits of Rs.20000/- or more given in the said statement of particulars is true and correct.
25.15. Section-wise details of deduction admissible under chapter VI-A – No other deduction other than those mentioned in clause 26 of Form 3CD is available to the branch.
25.16. Details of delay in payment of tax deducted at source to the credit of the Central Government are given in the statement of particulars. Apart from that, there are no other delays in payment of Tax Deducted at Source.
25.17. The other particulars required have already been given to you and particulars and other representations made to you from time to time are true and correct in all respects.
Thanking you.
Yours faithfully,
For & on behalf of ________________ Bank
(Branch Manager)
Place:
Dated: