Bank Audit 2012-READY RECKONER -POINTS TO KEEP IN MIND

Bank Audit 2012-READY RECKONER -POINTS TO KEEP IN MIND

Categorization of a Loan Accounts as NPA

Term Loan

Term loan account will be treated as NPA if interest and/or installment of principal remain overdue for a period of more than 90 days.

Cash Credits and Overdrafts

A cash credit or overdraft account will be treated as NPA if the account remains out of order for a period of more than 90 days.  An account is treated as “out of order” if any of the following conditions is satisfied:

a. The outstanding balance remains continuously in excess of the sanctioned limit/drawing power.

b. Though the outstanding balance is less than the sanctioned limit/drawing power but there are no credits continuously for 90days as on the date of balance sheet or credits are not enough to cover the interest debited during the period.

It should ensure that drawings in the working capital accounts are covered by the adequacy of current assets, since current assets are first appropriated in times of distress.

Considering the difficulties of large borrowers, stock statements relied upon by the branches for determining drawing power should not be older than three months.  The outstanding in the account based on drawing power calculated from stock statements older than three months, would be deemed as irregular.

A working capital borrowal account will become NPA if such irregular drawings are permitted in the account for a continuous period of 90 days even though the unit may be working or the borrower’s financial position is satisfactory.

Regular and adhoc credit limits need to be reviewed / regularised not later than three months from the due date/date of adhoc sanction.  In case of constraints such as non availability of financial statements and other data from the borrowers, the branch should furnish evidence to show that renewal/ review of credit limits is already on and would be completed soon.  In any case, delay beyond six months is not considered desirable as a general discipline.  Hence, an account where the regular/ adhoc credit limits have not been reviewed / renewed within 180 days from the due date/date of adhoc sanction will be treated as NPA.

 

 

Bills Purchased and Discounted

The bills purchased/discounted account should be treated as NPA if the bill remains overdue for a period of more than 90 days.

 

Other Accounts

Any other credit facility should be treated as NPA if any amount to be received in respect of that facility remains overdue for a period of more than 90 days.

Note:

Branches should classify an account as NPA only if the interest due and charged during any quarter is not serviced fully within 90 days from the end of the quarter.

 

Overdue

Amount due to the bank under any credit facility is overdue, if it is not paid on the due date fixed by the bank.

 

Agriculture Advances

A loan granted for short duration crops will be treated as NPA, if the instalment of principal or interest thereon remains overdue for two crop seasons. A loan granted for long duration crops will be treated as NPA, if the instalment of principal or interest thereon remains overdue for one crop season.

 For the purpose of these guidelines, “long duration” crops would be crops with crop season longer than one year and crops, which are not “long duration” crops, would be treated as “short duration” crops.

Agriculture Advances affected by Natural Calamities

Relaxation in assets classification norms in credit facilities granted to affected borrowers in District & Block Notified by State Government, as cyclone or other natural calamities affected:

 

Advances against FDR/NSCs/KVP/IVP/LIP

Advances against Term Deposits, NSCs eligible for surrender, Indira Vikas Patras, Kisan Vikas Patras and Life Insurance Policies, need not be treated as NPAs although interest thereon has not been paid for 90 days provided adequate margin is available in the accounts.  However, advances against gold ornaments, Govt. securities and all other securities are not covered by this exemption.

 

For the purpose of calculating the margin, value of security should be taken as under:

a) In case of advances against Term Deposit in the nature of recurring and reinvestment deposits, the principal and interest accrued thereon shall be taken into account.

b) In case of advances against LIC policies, the latest surrender value of the policy may be taken into account.

c) In case of advances against NSCs eligible for surrender, IVPs and KVPs the interest accrued on the value of security should be taken into account.

 Consortium Advances

In respect of consortium advances, each member bank may classify the borrowal accounts according to its own record of recovery and other aspects having a bearing on the recoverability of the advances. Where the remittances by the borrower under consortium lending arrangements are pooled with one bank and /or where the bank receiving remittances is not parting with the share of other member banks, the account will be treated as not serviced in the books of the other member banks and therefore, be treated as NPA.  The banks participating in the consortium should, therefore, arrange to get their share of recovery transferred from the lead bank or get an express consent from the bank for the transfer of their share of recovery, to ensure proper asset classification in their respective books.

 Advances To Staff

As in the case of project Finance, in respect of housing loans or similar advances granted to staff members where interest is payable after recovery of principal, interest need not be considered as `overdue’ from the first quarter onwards. Such loans/advances should be classified as NPA only when there is default in payment of interest on due date of payment.

 

Regularization of Account by Year-end

If the accounts of the borrowers have been regularised before the balance sheet date by repayment of overdue amounts through genuine sources (and not by sanction of additional facilities or transfer of funds between accounts) the accounts need not be treated as NPA.

Branches  should,  however,  ensure  that  the  account remains  in  order subsequently and a  solitary  credit entry  made  in the account on or  before  the  balance sheet  date  which extinguishes the overdue amount of interest or installment of principal is not reckoned  as the sole criterion for treating the account as standard asset.

It is to clarify here that the asset classification of borrowal accounts where a solitary or a few credits are recorded before the balance sheet date should be handled with care and without scope for subjectivity.  Where the account indicates inherent weakness on the basis of the data available, the account should be deemed as NPA.  In other genuine cases, the branches must furnish satisfactory evidence to the Statutory Auditors / Inspecting Officers about the manner of regularisation of the account to eliminate doubts on their performing status.

 

Determination of NPA s: Borrower wise, not Facility wise

All the facilities granted to a borrower will have to be treated as NPA and not a particular facility or part thereof which has become NPA. If the amount in default of any borrower is outstanding in default account i.e. LC-default account/ LG-default

account / DPG default account / Co-accepted bills default account, the balance outstanding in that account also should be treated as a part of the borrower’s principal operating account for the purpose of application of prudential norms on income recognition, asset classification and provisioning.

The bills discounted under LC favouring a borrower may not be classified as a NPA, when any other facility granted to the borrower is classified as NPA. However, in case documents under LC are not accepted on presentation or the payment under the LC is not made on the due date by the LC issuing bank for any reason and the borrower does not immediately make good the amount disbursed as a result of discounting of concerned bills, the outstanding bills discounted will immediately be classified as NPA with effect from the date when the other facilities had been classified as NPA.

 Net Worth of Borrower /Guarantor or Availability of Security

Availability of security or net worth of borrower/guarantor should not be taken into account for the purpose of treating an advance as NPA or otherwise, except to the extent provided in Para 1.16.4 below, as asset classification and income recognition is based on record of recovery and compliance of other non-financial indicators

 Accounts where there is erosion in the value of security / frauds committed by borrowers:

Accounts where there are potential threats for recovery on account of erosion in the value of security or non-availability of security and existence of other factors such as frauds committed by borrowers need not go through the various stages of classification. In case of such serious credit impairment the asset should be straightaway classified as doubtful / loss as appropriate:

i. Erosion in the value of security can be reckoned as significant when the realisable value of the security is less than 50 per cent of the value assessed by the bank or accepted by RBI at the time of last inspection, as the case may be.  Such NPAs may be straightaway classified under doubtful category and provisioning should be made as applicable to doubtful assets.

ii.  If the realizable value of security, as assessed by the bank / approved valuer / RBI is less than 10 percent of the outstanding in the borrowal accounts, the existence of security should be ignored and the asset should be straightaway classified as loss asset and provisioning made accordingly.

 

Guidelines on Asset Classification

All accounts  need to be classified into four categories taking into  account the degree of well defined  credit  weaknesses and   extent  of  dependence  on  collateral  security for realisation of the dues as given under :-

1. Standard Assets

Standard asset is one which does not disclose any problem and which does not carry more than normal risk attached to the business. Such an asset is not an NPA. However, Central Govt. Guaranteed advances, although categorized as NPA for the purpose of Income Recognition, are to be treated as Standard Assets (Govt Guaranteed) unless Govt repudiates its guarantee when invoked.

With effect from the year ending 31.3.2006 State Govt. guaranteed advances shall be classified as sub standard or doubtful or loss, after interest / principal / any other amount due to the bank remains overdue for more than 90 days.

Further, advances against term deposits, NSCs eligible for surrender, Indira Vikas Patra, Kisan Vikas Patras and Life Insurance Policies, are to be classified as Standard assets provided adequate margin is available.

Re-structuring/rescheduling ( installment and /or interest )/re-negotiation  of the terms  of loan agreement (a) before commencement of commercial production & (b) after commencement of commercial production but before the asset has been classified as sub-standard, would not cause a standard asset to be classified in the sub-standard category provided the  loan/credit  facility is fully secured.

 

2. Sub-standard Assets

With effect from 31^st March, 2005 a sub-standard asset is one, which has remained NPA for a period less than or equal to 12 months.

In such cases, the current net worth of the borrower/guarantor or the current market value of the security charged is not enough to ensure recovery of the dues to the bank in full. In other words, such an asset will have well defined credit weaknesses that   jeopardize liquidation of the debt and are characterised by the distinct possibility that the bank will sustain some loss, if deficiencies are not corrected.

In the context of rescheduling of instalments of principal alone or interest element, after commencement of  commercial production  and  classifying the asset as sub-standard, the account will be  eligible to be continued in sub-standard category for the specified period, provided the loan/credit facility is fully secured.  Such   restructured accounts (whether principal or interest), would be eligible to be upgraded to the standard category only after the specified period i.e.  period of one year after the date when first payment of interest or of principal, whichever is earlier, falls due,  subject to satisfactory performance during the period.

 3. Doubtful Assets

With effect from 31^st March, 2005 an asset is classified as doubtful if it remained in the sub-standard category for 12 months.

A loan classified as doubtful has all the weaknesses inherent in that classified as sub-standard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.

 4. Loss Assets

A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI Inspectors but the amount has not been written off, wholly or partly. If the realisable value of the security as assessed by the bank / approved valuer / RBI is less than 10% of the outstanding in the borrowal accounts, the existence of security should be ignored and the asset should be straightaway classified as loss asset.  The unsecured exposure identified as sub-standard, as mentioned at Item 3.3 Sub-standard under 3 – Guidelines on Provisioning is the only exception.

Guidelines on Provisioning:

 Detailed instructions relating to provisioning requirement for different categories of assets are given as under:

 1. Loss Assets

In case of Loss Assets 100% of the outstanding should be provided for regardless of security.

2. Doubtful Assets

100 percent of the extent to which the advance is not covered by the realisable value of the security to which the bank has a valid recourse and the realisable value is estimated on a realistic basis.

In regard to the secured portion, provision may be made on the following basis, at the rates ranging from 20 percent to 100 percent of the secured portion depending upon the period for which the asset has remained doubtful:

 

Period for which the advance has  remained in ‘doubtful’ category	Provision requirement (%)
Up to one year	20
One to three years	30
More than three years	100

3 . Sub-standard

A general provision of 10 percent on total outstanding should be made without making any allowance for DICGC/ECGC guarantee cover and securities available.

 

1. Standard Assets (to be made at HO).

In standard assets, provisioning requirements [w.e.f.05.11.09], (category-wise) are summarized below:

S. No.	Category of standard asset	Rate of Provisioning
(a)	Direct Advances to agricultural and SME Sectors	0.25%
(b)	Commercial Real Estate Sector	1.00%
(c)	All other loans and advances not included in (a) and (b)  above	0.40%
Note: Revised norms would be effective prospectively but provision held at present should not be reversed.  However, in future, if by applying revised provisioning norms, any provision is required over and above the level of provisions currently held for the standard category assets, these should be duly provided for.

5. Advances covered by ECGC/ DICGC guarantee

In the case of advances guaranteed by DICGC/ECGC, provision should be made only for the balance in excess of the amount guaranteed by these Corporations. Further, while arriving at the provision required to be made for doubtful assets, realisable value of the securities should first be deducted from the outstanding balance in respect of the amount guaranteed by these Corporations and then provision should be made

6. Advance covered by CGTSI guarantee

In case the advance covered by CGTSI guarantee becomes non-performing, no provision need be made towards the guaranteed portion. The amount outstanding in excess of the guaranteed portion should be provided for as per the extant guidelines on provisioning for non-performing advances.

Post-shipment supplier’s credit to the extent payment has been received from   Exim Bank under the guarantee cum refinance programme is exempted from   provisioning requirement.

Draft of Management Representation Letter to be obtained from the Branch Management

Date: ____________

M/s. XYZ & Co.
Chartered Accountants
Mumbai

Dear Sirs,

Sub.: Audit for the period ended 31-3-2012

This representation letter is provided in connection with your audit of the financial statements of _____________ branch of _______________ BANK for the period ended 31-3-2012 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view of the financial position of ___________ branch of _______________ BANK as of 31-3-2012 and of the results of operations for the period then ended. We acknowledge our responsibility for preparation of financial statements in accordance with the requirements of the Reserve Bank of India and recognised accounting policies and practices, including the Accounting and Auditing Standards issued by the Institute of Chartered Accountants of India.

We confirm, to the best of our knowledge and belief, the following representations:

ACCOUNTING POLICIES

1.      The accounting policies, which are material or critical in determining the results of operations for the period or financial position are set out in the financial statements and are consistent with those adopted in the financial statements for the previous period. The financial statements are prepared on accrual basis except as stated otherwise in the financial statements.

ASSETS

2.      The branch has a satisfactory title to all assets and there are no liens or encumbrances on the company's assets.

FIXED ASSETS

3.      The net book values at which fixed assets are stated in the balance sheet are arrived at:

a.      after taking into account all capital expenditure on additions thereto, but no expenditure properly chargeable to revenue;

b.      after eliminating the cost and accumulated depreciation relating to items sold, discarded, demolished or destroyed;

c.      after providing adequate depreciation on fixed assets during the period.

CAPITAL COMMITMENTS

4.      At the balance sheet date, there were no outstanding commitments for capital expenditure excepting those disclosed in Note No. ___ to the financial statements.

INVESTMENTS

5.      The current investments as appearing in the balance sheet consist of only such investments as are by their nature readily realisable and intended to be held for not more than one year from the respective dates on which they were made. All other investments have been shown in the balance sheet as `long-term investments'.

6.      Current investments have been valued at the lower of cost or fair value. Long-term investments have been valued at cost, except that any permanent diminution in their value has been provided for in ascertain­ing their carrying amount.

7.      In respect of offers of right issues received during the year, the rights have been either been subscribed to, or renunciated, or allowed to lapse. In no case have they been renunciated in favour of third parties without consideration which has been properly accounted for in the books of account.

8.      All the investments produced to you for physical verification belong to the entity and they do not include any investments held on behalf of any other person.

9.      The entity has clear title to all its investments including such in­vestments which are in the process of being registered in the name of the entity or which are not held in the name of the entity. There are no charges against the investments of the entity except those appearing in the records of the entity.

LOANS AND ADVANCES

10.  The following items appearing in the books as at 31st March, 2012 are considered good and fully recoverable with the exception of those specifically shown as "doubtful" in the Balance Sheet:
Loans and Advances Rs.

OTHER CURRENT ASSETS

11.  In the opinion of the Board of Directors, other current assets have a value on realization in the ordinary course of the company's business, which is atleast equal to the amount at which they are stated in the balance sheet.

CASH & BANK BALANCES

12.  The cash balance as on 31st March, 2013 is Rs.______.
The bank balances as on ________________ is as under:
__________________ Bank Rs.______________
__________________ Bank Rs.______________
__________________ Bank Rs.______________

LIABILITIES

13.  We have recorded all known liabilities in the financial statements.

14.  We have disclosed in notes to the financial statements all guarantees that we have given to third parties and all other contingent liabili­ties.

15.  Contingent liabilities disclosed in the notes to the financial state­ments do not include any contingencies, which are likely to result in a loss and which, therefore, require adjustment of assets or liabilities.

PROVISIONS FOR CLAIMS AND LOSSES

16.  Provision has been made in the accounts for all known losses and claims of material amounts.

17.  There have been no events subsequent to the balance sheet date, which require adjustment of, or disclosure in, the financial statements or notes thereto.

PROFIT AND LOSS ACCOUNT

18.  Except as disclosed in the financial statements, the results for the period were not materially affected by:

a.      Transactions of a nature not usually undertaken by the bank;

b.      Circumstances of an exceptional or non-recurring nature;

c.      Charges or credits relating to prior years;

d.      Changes in accounting policies.

GENERAL

19.  The following have been properly recorded and, when appropriate, ade­quately disclosed in the financial statements:

a.      Losses arising from sale and purchase commitments.

b.      Agreements and options to buy back assets previously sold.

c.      Assets pledged as collateral.

20.  There have been no irregularities involving management or employees who have a significant role in the system of internal control that could have a material effect on the financial statements.

21.  The financial statements are free of material misstatements, including omissions.

22.  The company has complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance. There has been no non-compliance with requirements of regularity authorities that could have a material effect on the financial statements in the event of non-compliance.

23.  We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities reflected in the financial statements.

24.  The branch has not received any notice, show cause, inspection advice, etc. from Government of India, Reserve Bank of India or any other monitoring authority of India that could have a material effect on the financial statements.

For & on behalf of

___________ branch of _______________ Bank

 

Authorised Signatory

 

---

Draft Letter of Requirements to be sent to the Branch

April 1, 2011

The Branch Manager

_____________ Bank

_____________ Branch

Mumbai

Dear Sir:

Sub.: Statutory Audit of your branch for the year 2011-12

As you are aware, we have been appointed as the Statutory Auditor to report on the accounts of your Branch for the year 2011-12

In order to enable us to finalise the audit programme and furnish our report on the audit of the accounts for the year 2011-12 of your branch, may we request you to keep ready the information/clarification as stated below and make the same available to our audit team at the earliest.

1.      Latest Reports

·         The following latest reports on the accounts of your bank, and compliance by the bank on the observations contained therein may be kept ready for our perusal:

·         Latest RBI Inspection Report;

·         Internal/Concurrent Audit Reports;

·         Head Office Inspection Reports;

·         Internal Inspection Reports;

·         Revenue Audit Report (if any);

·         Income and Expenditure Control Report (if any);

·         Report on any other Inspection/Audit that may have been conducted during the course of the year relevant to the financial year 2010-2011.
 

2.      Circulars in connection with accounts

Please let us have a copy of the Head Office circulars/instructions in connection with the closing of your accounts for the year, to the extent not communicated to us or incorporated in our letter of appointment.
 

3.      Accounting policies

Kindly confirm whether, as compared to the earlier year, there are any changes in the accounting policies during the year under audit.

If so, please let us have a list and a copy of the accounting policy/ies amended by the bank during the year covered by the current audit and compute the financial effect thereof to enable us to verify the same.
 

4.      Balancing of books

Kindly confirm the present status of balancing of the subsidiary records with the relevant control accounts. In case of differences between balances in the control and subsidiary records, please give the details thereof and let us know the efforts being made to reconcile/balance the same. This information may be given head-wise for the relevant control accounts, indicating the date when the balances were last tallied.
 

5.      Deposits

a.      Please let us have the interest rate structure, applicable for the current year, for all the types of deposits accepted by the branch.

b.      Kindly confirm having transferred Overdue/Matured Term Deposits to Current Account Deposit. If not, details/particulars of credit balances comprising Overdue/Matured Term Deposits as at the year-end which continue to be shown as Term Deposit, particularly where the branch does not have any instructions/communication for renewal of such deposits from the account holder and amount of provision of interest made on such overdue/matured term deposits, should be separately marked out and be kept ready for our reference.
 

6.      Advances

 .       Kindly confirm whether in respect of the advances against tangible securities, the branch holds evidence of existence and latest market value of the relevant securities as at the year-end.

a.      Kindly inform the year-end status of the accounts, particularly those which have been adversely commented upon in the latest reports of RBI/Internal Auditors/Concurrent Auditors/Statutory Auditors, etc. on the branch as also accounts in respect of which provisions have been made/recommended as at the previous year-end.

Information in relation to such advances accounts where provision computed/recommended may please be prepared indicating:

a.      Name of the borrower

b.      Type of facility

c.      * Total amount outstanding as at the year-end (both for principal and interest) specifying the date up to which interest has been levied and recovered.

d.      Particulars of securities and value on the basis of latest report/statement.

e.      Nature of default and action taken.

f.       Brief history and present status of the advance.

g.      * Provision already made/recommended.

h.      NPA since when (please specify the date)

* Corresponding figures for the previous year-end may please be given.

b.      Kindly confirm whether the borrowers’ account have been categorised according to the norms applicable for the year into Standard, Sub-standard, Doubtful or Loss assets, with special emphasis on Non-Performing Assets (NPA) and whether such classification has also been made applicable by the branch to advances with balances of less than Rs. 25,000 each.
Kindly confirm whether you have examined the accounts and applied the norms borrower-wise and not account-wise for categorising the accounts. Please let us have the particulars of provisions computed/recommended in respect of the above during the financial year under audit.

c.      A list of all advances accounts which have been identified as bad/doubtful accounts and where pending formal sanction of the higher authorities, the relevant amount have not been re-classified/re-categorised in the book of the branch for provision/write off. This covers all account identified by the branch or internal/external auditor or by RBI inspectors but the amount has not been written-off wholly or partly.
In case the bank has recommended action against the borrowers or for initiating legal or other coercive action for recovery of dues, a list of such borrowers’ accounts may be furnished to us.

d.      Please let us have a list of borrowers’ accounts where classification made as at the end of the previous year has been changed to a better classification, stating reasons for the same.

e.      Kindly also confirm whether any income has been adjusted/recorded to revenue, contrary to the norms of income recognition notified by the Reserve Bank of India and/or Head Office circulars issued in this regards; and particularly where the chances of recovery/realisability of the income are remote.

Kindly also confirm whether any income has been recorded on Non-Performing Accounts other than on actual realisation.
 

7.      Outstanding in Suspense/Sundry Account

Kindly let us have a year-wise/entry-wise break up of amounts outstanding in Suspense/Sundry accounts as on 31-3-2012. Kindly explain the nature of the amounts in brief. Supporting evidences relating to the existence of such amounts in the aforesaid accounts may be kept ready at the branch for verification. Reasons for non-adjustment of items included in these may be made known.
 

8.      Inter-branch/Office Accounts/Head Office Account

 .       Please let us have a statement of entries (head-wise) which originated prior to the year-end at other branches, but were responded during the period after 31-3-2012 at the branch.

a.      Date-wise details of debits in various sub-heads relating to Inter-Branch transactions and reasons for outstanding amounts particularly those, which are over 30 days as at the Balance Sheet date.
 

9.      Contingent liabilities

 .       Kindly confirm whether other than for advances, there are any matters involving the bank in any claims in litigation, arbitration or other disputes in which there may be some financial implications, including for staff claim, municipal taxes, local levies etc. If so, these may be listed for our verification, and you may confirm whether you have included these as contingent liabilities.

a.      Kindly confirm whether guarantees are being disclosed net of margins, or otherwise as at the year-end, and whether the expired guarantee where the claim year has also expired, continue to be disclosed in the branch return. Please confirm specifically.
 

10.  Interest provision

 .       Kindly confirm whether interest provision has been made on deposits etc. in accordance with the latest instruction of the RBI/interest rate structure of the bank. A copy of such instructions/rate structure may be made available for our scrutiny.

a.      Kindly confirm whether any amount recorded as income up to the year-end, which remains unrecovered or not realisable, has been reversed from any of the income heads or has been debited to any expenditure head during the financial year. If so, please let us have details to enable us to verify the same.

b.      Kindly confirm the accounting treatment as regards reversal, if any of interest/other income recorded up to the previous year-end; and the amount reversed during the year under audit; i.e., income of earlier years derecognised during the year.
 

11.  Foreign currency outstanding transactions

 .       Kindly confirm whether amount outstanding as at the year-end have been converted as at the year-end rates prescribed by FEDAI. An authenticated copy of the FEDAI rates applied may be given for our records.

a.      Kindly confirm the amount of inward value of foreign currency parcels, if any, which originated prior to the year-end from other banks, but could not be recorded as these were in transit and for which entries were made after the year end.
 

12.  Investment/Stationery

For Investment held by the branch:

 .       These may be produced for physical verification and/or evidence of holding the same be made available.

a.      Stock of unused security paper stationery/numbered forms like B/Rs, SGL forms, etc. may please be produced for physical verification.

b.      It may be confirmed whether income accrued/collected has been accounted as per the laid down procedure.

c.      It may be confirmed whether Investment Valuation has been done as per the extant RBI guidelines.
 

13.  Long Form Audit Report - Branch response to the Questionnaire

In connection with the Long Form Audit Report, please let us have complete information as regards each item in the questionnaire, to enable us to verify the same for the purpose of our audit.
 

14.  Tax Audit in terms of section 44AB of the Income-tax Act, 1961

Please let us have the information required for the tax audit under section 44AB of the Income-tax Act, 1961 to enable us to verify the same for the purpose of our report thereon.
 

15.  Other certification

Please furnish us the duly authenticated information as regards other matters, which as per the letter of appointment require certification.
 

16.  Bank reconciliation and confirmations

Please let us have the duly reconciled statements for all Nostro as well as Local bank accounts. A copy of the year-end balance confirmation statements should also be called for and kept ready for our review.
 

17.  Books of account and records

Kindly keep ready all the books of accounts and other records like vouchers, documents, fixed assets register, etc. for our verification.

We shall appreciate your kind co-operation in the matter.

Thanking you,

Yours truly,

Chartered Accountants

CA AMRESH VASHISHT, FCA, LLB, DISA(ICAI)