PwC was sacked by GTB

Our Banking Bureau
28 July 2004

The Global Trust Bank management had sacked PricewaterhouseCoopers (PwC) as auditor of the bank after the publication of the 2002-03 results.

After auditing GTB's results for 2002-03, PwC had stated with the financials: "In our opinion, the balance sheet, profit & loss account and cash flow statement of the bank are in compliance with the applicable accounting standards referred to in subsection (3C) of section 211 of the Companies Act, 1956, of India to the extent applicable and in so far as they are not inconsistent with the Banking Regulation Act, 1949."

It, however, pointed out that notes on accounts regarding additional provision towards non-performing assets by utilisation of statutory reserves below the line after the net loss for the year not in conformity with the accounting principles generally accepted in India.

It also drew attention to Note 10 of Schedule XVIII regarding preparation of accounts on a going concern basis even though the net worth of the bank has been substantially eroded after considering the loss for the year on account of substantial provision against non performing assets, taking into account management's assessment of growth of business, infusion of capital through strategic/ financial/ investment/ issue of further capital.

"Accordingly, these accounts do not include adjustments in case the management's business plans do not materialise," it said.

The report also had the statutory declaration that "these financial statements are the responsibility of the management of the bank. Our responsibility is to express an opinion on these financial statements based on our audit".