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Bank of India.

BSE: 532149 Sector: Financials
NSE: BANKINDIA ISIN Code: INE084A01016
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VOLUME 564674
52-Week high 101.45
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P/E 8.67
Mkt Cap.(Rs cr) 22,200
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OPEN 54.35
CLOSE 54.35
VOLUME 564674
52-Week high 101.45
52-Week low 42.00
P/E 8.67
Mkt Cap.(Rs cr) 22,200
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bank of India. (BANKINDIA) - Auditors Report

Company auditors report

Report on Audit of the Standalone Financial Statements

To

The President of India / The Members of Bank of India

Opinion

1. We have audited the accompanying Standalone Financial Statements ofBank of India (‘the Bank') which comprise the Balance Sheet as at March 31 2021the Statement of Profit and Loss and the Statement of Cash Flows for the year then endedand notes to Standalone Financial Statements including Significant Accounting Policies andother explanatory information in which are included returns for the year ended on thatdate of: (i) 20 Domestic branches Treasury Branch and Digital Banking department auditedby us; (iii) 3138 domestic branches and processing centres audited by respective StatutoryBranch Auditors and (iii) 22 Foreign branches audited by respective local Auditors

The branches audited by us and those audited by other auditors havebeen selected by the Bank in accordance with the guidelines issued to the Bank by theReserve Bank of India. Also included in the Balance Sheet the Statement of Profit andLoss and Statement of Cash Flows are the returns from 2126 domestic branches and oneforeign branch which have not been subjected to audit. These unaudited branches accountfor 5.46% of advances 16.73% of deposits 4.37% of interest income and 16.60% of interestexpenses.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Banking Regulation Act 1949 ("the Act") in themanner so required and are in conformity with the accounting principles generally acceptedin India and give true and fair view:

a) In case of Balance Sheet of the state of affairs of the Bank as atMarch 31 2021

b) true balance of profit in case of Profit & Loss account for theyear ended on that date; and

c) true and fair view of the cash flows in the case of Cash FlowStatement for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing(SAs) issued by The Institute of Chartered Accountants of India. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Bank in accordance with the code of ethics issued by the Institute of CharteredAccountants of India together with ethical requirements that are relevant to our audit ofthe Standalone Financial Statements under provision of the Act and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the code ofethics. We believe that the audit evidence obtained by us and audit evidences obtained byother auditors in terms of their reports referred to in "Other Matter" paragraphbelow is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matters

4. a) Note No 7.18 of Schedule-18 of the accompanying

Standalone Financial Statements regarding impact of COVID-19 pandemic.The situation continues to be uncertain and the management of the Bank is evaluating thesituation and impact on its Domestic & International business operations of the Bankon an ongoing basis; and

b) Note No. 7.3 of Schedule 18 of the accompanying Standalone FinancialStatements relating to utilisation of share premium for setting of accumulated losses

Key Audit Matters

5. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe Key Audit Matters to be communicated in our report.

Sl. No. Key Audit Matters Audit Procedure followed to address the Key Audit Matters
1) Compliance of Income Recoanition. Asset Classification and Provisioning Norms on advances and investments as Der guidelines issued bv Reserve Bank of India (IRAC Norms) Advances We have carried out the audit of the advances and investments based on the IRAC Norms/Circulars and directives issued by Reserve Bank of India and the policy of the Bank.
Advances: Our audit procedure included:
Bank has to classify the accounts as performing advances or non performing advances based on the guidelines/circulars and directives issued by Reserve Bank of India. The guidelines issued by Reserve Bank of India is for all credit facilities given by the bank and is to be mandatorily followed for the purpose of Income Recognition Asset Classification and Provisioning. a) Communication to the branch statutory auditors to verify the compliance of IRAC Norms and procedures and the policies adopted by the bank and reliance on the audit reports furnished by the branch statutory auditors.
b) Understanding the IT system and controls put in place and logic and validations built in the system by the bank for identification classification and provisioning in case of advances.
Identification of performing and non performing advances is system driven. The software used by the bank identifies the accounts for classification and provisioning as per the guidelines issued by Reserve Bank of India.
c) Testing on sample basis whether the classification of advances as performing or non-performing and provisioning have been carried out as per the guidelines of Reserve Bank of India.
The Income recognition asset classification and provisioning if not done properly as per the IRAC norms issued by Reserve Bank of India may materially impact the financial statements of the bank.
d) Carrying out substantive test on major advances including Specially Mentioned Accounts (SMA) and also verification of security by checking the valuation reports in respect of the audit of branches conducted by us.
e) Reliance on the internal audit reports concurrent audit reports credit audit system audit and special audits conducted by the bank.
Investments : Investments: Our audit procedure included:
Bank has to classify the investments as performing or non performing based on the guidelines/circulars and directives issued by Reserve Bank of India.
a) Understanding the IT system and controls put in place and logic and validations built in the system by the bank for identification classification and provisioning in case of investments.
Identification of performing and non performing investments is generally system driven.
The valuation is done as per the guidelines issued by Reserve Bank of India and the valuations are done based on the price quoted on BSE/ NSE FIMDA /FBIL rates etc. b) Testing on sample basis whether the classification and valuation of investments is carried out as per the guidelines of Reserve Bank of India.
The Income recognition asset classification and provisioning if not done property as per the IRAC norms issued by Reserve Bank of India may materially impact the financial statements of the bank.
c) Verification on sample basis whether proper provision for depreciation in the value of investments is made as per RBI guidelines.
d) Reliance made on the internal audit reports concurrent audit reports and system audit conducted by the bank.
Advances and Investments constitute 55.93% and 23.44% respective^ of total assets of the bank.
As advances and investments form part of a major portion of the business of the bank and the regulatory compliances are involved we have considered this aspect as Key Audit Matter.
2) Evaluation of uncertain tax litigations and contingent liabilities Our audit approach involved:
a) Understanding the current status of the litigations/tax assessments;
The Bank has various litigations including tax litigations. The Bank has also disputes regarding availability of input credits/applicability of Reverse Charge Mechanism on certain payments under Indirect Tax.
b) Review of the latest orders communication received from various tax authorities and the appeals filed;
This is a key audit matter due to uncertainty of the outcome which involves significant judgment to determine the possible outcome of these disputes.
c) Reliance on the opinion of legal and tax consultants where available.
3) Assessment of Information Technoloav (IT): Our audit procedure includes:-
a) Understanding and testing of operative effectiveness of the system.
IT controls with respect to recording of transactions generating various reports in compliance with RBI guidelines including IRAC norms preparing financial statements and reporting of compliances to regulators etc. is an important part of the process. Such reporting is highly dependent on the effective working of Core Banking Software and other allied systems.
b) Understanding the coding system adopted by the bank for various categories of customers.
c) Understanding and testing of different validations available in the system
d) Checking the user requirements for any changes in the regulations/policy of the bank
We have considered this as key audit matter as any control lapses validation failures incorrect input data and wrong extraction of data may result in wrong reporting of data to the management and regulators.
e) Testing of logic used for extracting the data.
f) On sample basis reviewing the reports generated.
g) Reliance on the system audit report of the bank.
4) Modified Audit Procedures carried out in light of COVID-19 outbreak: Due to the outbreak of COVID-19 pandemic that caused nationwide lockdown and other travel restrictions imposed by the Central and State Governments/local administration during the period of our audit we could not travel to the Branches / NBG offices and carry out the audit processes physically at the respective offices. Wherever physical access was not possible necessary records/ reports/ documents/ certificates were made available to us by the Bank through digital medium emails and remote access to CBS and other relevant application software. To this extent the audit process was carried out on the basis of such documents reports and records made available to us on which were relied upon as audit evidence for conducting the audit and reporting for the current period.
Due to COVID-19 pandemic Nation-wide lockdown and travel restrictions imposed by Central / State Government / Local Authorities during the period of our audit and the RBI directions to Bank to facilitate carrying out audit remotely wherever physical access was not possible audit could not be conducted by visiting the Branch premises NBG offices of the Bank. As we could not gather audit evidence in person/ physically/ through discussions and personal interactions with the officials at the Branches/NBG offices we have identified such modified audit procedures as a Key Audit Matter. Accordingly our audit procedures were modified to carry out the audit remotely.
Accordingly we modified our audit procedures as follows:
a) Conducted verification of necessary records/ documents/ CBS/ and other Application software electronically through remote access/emails in respect of some of the Branches /offices and other offices of the Bank wherever physical access was not possible.
b) Carried out verification of scanned copies of the documents deeds certificates and the related records made available to us through emails and remote access over secure network of the Bank.
c) Making enquiries and gathering necessary audit evidence through Document Management System (DMS) telephonic communication / conference calls and e-mails.
d) Resolution of our audit observations telephonically/ through email instead of a face-to-face interaction with the designated officials.
5) Recognition of Deferred Tax Assets: Our audit procedure included evaluating management assessment on the sufficiency of the future taxable profits in support of the recognition of deferred tax assets such as assumptions and other parameters used for recognition of deferred tax asset.
As per Significant Accounting Policy of the Bank which is in accordance with AS 22 Accounting for Taxes on I ncome issued by The Institute of Chartered Accountants of India Deferred tax assets should be recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.
We identified the recognition of deferred tax assets as a key audit matter involves judgement by management as to the likelihood of the realization of these deferred tax assets which is based on a number of factors including whether there will be sufficient taxable profits in future periods to support recognition.

Information Other than the Financial Statements and Auditors Reportthereon

6) The Bank's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Managementreport and Chairman's Statement but does not include the Standalone Financial Statementsand our Auditor's report thereon.

Our opinion on the Standalone Financial Statements does not cover theother information and Pillar 3 disclosures under Basel III Disclosure and we do notexpress any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the other information if we conclude that there ismaterial misstatement therein we are required to communicate the matter to those chargedwith governance and determine the actions under the applicable laws and regulations.

Responsibilities of Management and Those Charged with

Governance for the Standalone Financial Statements

7) The Bank's Board of Directors is responsible with respect to thepreparation of these Standalone Financial Statements that give a true and fair view of thefinancial position financial performance and cash flows of the Bank in accordance withthe accounting principles generally accepted in India including the Accounting Standardsissued by The Institute of Chartered Accountants of India and provisions of Section 29 ofthe Banking Regulation Act 1949 and circulars and guidelines issued by the Reserve Bankof India (‘RBI') from time to time. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Bank and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements the Board ofDirectors are responsible for assessing the Bank's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Bank or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors is alsoresponsible for overseeing the Bank's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial

Statements

8) Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on thebank's ability to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the bank to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

• Materiality is the magnitude of misstatements in the StandaloneFinancial Statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the Standalone FinancialStatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the Standalone FinancialStatements.

• We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring our audit.

• We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

• From the matters communicated with those charged withgovernance we determine those matters that were of most significance in the audit of theStandalone Financial Statements of the current period and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Other Matter

9) We did not audit the financial statements / financial information of3160 branches and processing centres(including 22 foreign branches) included in theStandalone Financial Statements of the Bank whose financial statements/financialinformation reflects total assets of Rs. 341493.50 crore at March 31 2021 and totalrevenue of Rs 16945.41 crore for the year ended on that date as considered in theStandalone Financial Statements. The financial statements/ financial information of thesebranches and processing centres have been audited by the branch auditors whose reportshave been furnished to us and our opinion in so far as it relates to the amounts anddisclosures included in respect of branches is based solely on the report of such branchauditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10) The Balance Sheet and the Profit and Loss Account have been drawnup in accordance with Section 29 of the Banking Regulation Act 1949;

11) Subject to the limitations of the audit indicated in paragraphs 6& 9 above and as required by the Banking Companies (Acquisition and Transfer ofUndertakings) Act 1970/1980 and subject also to the limitations of disclosure requiredtherein we report that:

a) We have obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purposes of our audit and havefound them to be satisfactory;

b) The transactions of the Bank which have come to our notice havebeen within the powers of the Bank; and

c) The returns received from the offices and branches of the Bank havebeen found adequate for the purposes of our audit.

12) We further report that:

a) in our opinion proper books of account as required by law have beenkept by the Bank so far as it appears from our examination of those books and properreturns adequate for the purposes of our audit have been received from branches andprocessing centres not visited by us;

b) the Balance Sheet the Profit and Loss Account and the Statement ofCash Flows dealt with by this report are in agreement with the books of account and withthe returns received from the branches and processing centres not visited by us;

c) the reports on the accounts of the branch offices audited by branchauditors of the Bank under section 29 of the Banking Regulation Act 1949 have been sentto us and have been properly dealt with by us in preparing this report; and

d) In our opinion the Balance Sheet the Profit and Loss Account andthe Statement of Cash Flows comply with the applicable accounting standards to the extentthey are not inconsistent with the accounting policies prescribed by Reserve Bank ofIndia.

13) As required by letter No. DOS.ARG.No.

6270/08.91.001/2019-20 dated March 17 2020 on

"Appointment of Statutory Central Auditors (SCAs) in Public SectorBanks-Reporting obligations for SCAs from FY: 2019-20" read with subsequentcommunication dated May 19 2020 issued by the RBI we further report on the mattersspecified in paragraph 2 of the aforesaid letter as under:

a) In our opinion the aforesaid Standalone Financial Statements complywith the Accounting Standards issued by ICAI to the extent they are not inconsistent withthe accounting policies prescribed by the RBI.

b) There are no observations or comments on financial transactions ormatters which have any adverse effect on the functioning of the bank.

c) On the basis of the written representations received from thedirectors as on March 31 2021 none of the directors is disqualified as on March 31 2021from being appointed as a director in terms of subsection (2) of Section 164 of theCompanies Act 2013.

d) There are no qualifications reservations or adverse remarksrelating to the maintenance of accounts and other matters connected therewith.

14) Our audit report on the adequacy and operating effectiveness of theBank's internal financial controls over financial reporting as required by the RBILetter DOS. ARG.No.6270/08.91.001/2019-20 dated March 17 2020 (as amended) is given inAnnexure A to this report. Our report expresses an unmodified opinion on the Bank'sinternal financial controls over financial reporting as at 31st March 2021.

For Chaturvedi & Co. For V Sankar Aiyar & Co. For Laxmi Tripti & Associates
Chartered Accountants Chartered Accountants Chartered Accountants
(FRN 302137E) (FRN 109208W) (FRN 009189C)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 14 under ‘Report on Other Legal and

Regulatory Requirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting asrequired by the Reserve Bank of India (the "RBI") Letter DOS.ARG.No.6270/08.91.001/2019-20 dated March 17 2020 (as amended) (the "RBIcommunication")

We have audited the internal financial controls over financialreporting of Bank of India ("the Bank") as of March 31 2021 in conjunction withour audit of the standalone financial statements of the Bank for the year ended on thatdate which includes internal financial controls over financial reporting of the Bank'sbranches.

Management's Responsibility for Internal Financial Controls

The Bank's management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Bank considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Bank's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Banking Regulation Act 1949 and the circulars andguidelines issued by the Reserve Bank of India.

Auditor's Responsibility

Our responsibility is to express an opinion on the Bank's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India (the "ICAI") and the Standards on Auditing (SAs) issued by the ICAI tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal financial controls based on theassessed risk. The procedures selected depend on the

auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained and the auditevidence obtained by the branch auditors in terms of their reports referred to in theOther Matters paragraph below is sufficient and appropriate to provide a basis for ouraudit opinion on the Bank's internal financial controls over financial reporting.

Meaning of Internal Financial Controls Over Financial

Reporting

A Bank's internal financial controls over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Bank's internal financial controls overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Bank; (2) provide reasonable assurancethat transactions are recorded as necessary to permit preparation of financial statementsin accordance with generally accepted accounting principles and that receipts andexpenditures of the Bank are being made only in accordance with authorisations ofmanagement and directors of the Bank; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theBank's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over

Financial Reporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrols over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us and based on the consideration of the reports of the branchauditors referred to in the "Other Matters" paragraph below the Bank has inall material respects generally adequate internal financial controls over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at March 31 2021 based on the criteria for internal control overfinancial reporting established by the Bank considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

Other Matters

Our aforesaid report insofar as it relates to the operatingeffectiveness of internal financial controls over financial reporting of 484 (numberspecify scoped in / IFCoFR reporting branches) branches is based on the correspondingreports of the respective branch auditors of those branches.

Our opinion is not modified in respect of this matter.

For Chaturvedi & Co. For V Sankar Aiyar & Co. For Laxmi Tripti & Associates
Chartered Accountants Chartered Accountants Chartered Accountants
(FRN 302137E) (FRN 109208W) (FRN 009189C)

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