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Central Bank of India.

BSE: 532885 Sector: Financials
NSE: CENTRALBK ISIN Code: INE483A01010
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OPEN 18.00
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VOLUME 130955
52-Week high 25.15
52-Week low 16.10
P/E 10.38
Mkt Cap.(Rs cr) 15,409
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Central Bank of India. (CENTRALBK) - Auditors Report

Company auditors report

To

The Members of

Central Bank of India Mumbai

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Central Bank OfIndia (‘the Bank’) which comprise the Balance Sheet as at 31st March2022 the

Profit and Loss Account and the Cash Flow Statement for the year then ended and notesto Standalone

Financial Statements including a summary of significant accounting policies and otherexplanatory information in which are included the returns for the year ended on that dateof the Head Office 12 Zones 1 Specialized

Integrated Treasury Branch and 20 branches audited by us and 1869 branches audited byrespective statutory branch auditors.

The branches audited by us and those audited by other auditors have been selected bythe Bank in accordance with the guidelines issued to the Bank by the Reserve Bank ofIndia. Also incorporated in the Balance Sheet the Profit and Loss Account and the CashFlow Statement are the returns from 2639 branches which have not been subjected to audit.These unaudited branches account for 16.76 per cent of advances 34.97 per cent ofdeposits 9.27 per cent of interest income and 33.12 per cent of interest expenses.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Banking Regulation Act 1949 (hereinafter referred to as "the Act") inthe manner so required for the Bank and are in conformity with accounting principlesgenerally accepted in India and: a) the Balance Sheet read with the notes thereon is afull and fair Balance Sheet containing all the necessary particulars is properly drawn upso as to exhibit a true and fair view of the state of affairs of the Bank as at 31stMarch 2022; b) the Profit and Loss Account read with the notes thereon shows a truebalance of profit for the year ended on that date; and c) the Cash Flow Statement gives atrue and fair view of the cash flows 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("ICAI"). Our responsibilities under those Standards are further described inthe "Auditors’ responsibilities for the audit of the standalone financialstatements" section of our report. We are independent of the Bank in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withethical requirements that are relevant to our audit of the standalone financial statementsprepared in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards issued by the ICAI and provisions of section 29 of theBanking Regulation Act 1949 and circulars and guidelines issued by the Reserve Bank ofIndia ("RBI") from time to time and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the standalone financial statements.

Emphasis of Matter

4. We draw attention to:

a) Note no. 15 (v) of Schedule 18 to the standalone financial statements regardingamortization of additional liability on revision of family pension amounting to 821.95crore. The Bank has charged an amount of 544.52 crore to the Profit and Loss Account forthe year ended 31st March 2022 and the balance unamortised expense has beencarried forward pursuant to RBI circular no. RBI/2021-22/105DORACC.REC.57/21.04.018/2021-22 dt. 4th October 2021.

b) Note no. 1(d) of Schedule 18 to the standalone financial statements regardingset-off of accumulated losses amounting to 18724.22 crore against the available balance inshare premium account after obtaining approval from the shareholders and the Reserve Bankof India.

c) Note no. 20(g) of Schedule 18 to the standalone financial statements regardingdeferred tax wherein on the basis of tax review made by the Bank’s management withrespect to the possible tax arising out of the timing difference the net deferred taxasset of 6862.05 crore is recognised as on 31st March 2022 ( 7545.68 crore ason 31st March 2021).

d) Note No. 11 of Schedule 18 to the standalone financial statements which describesthe uncertainties due to the COVID-19 pandemic and management’s evaluation of impacton the Bank’s financial performance which will depend on future developments whichare uncertain.

Our opinion is not modified in respect of the above matters.

Key Audit Matters

5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the year ended 31stMarch 2022. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matters Auditors’ response
1. Identification and provisioning of non- performing advances made in accordance with the prudential norms prescribed by Reserve Bank of India on Income recognition Asset Classification and provisioning pertaining to Advances (refer Schedule 9 read with Note 2 of Schedule 17 to the standalone financial statements) Our audit approach included assessment of the design operating effectiveness of key internal controls over approval recording and monitoring of loans and substantive audit procedures in respect of income recognition asset classification and provisioning pertaining to advances. In particular:
Advances comprise substantial portion of the Bank’s total assets. Identification of non-performing advances (NPAs) is carried out based on system identification by the Core Banking Solution (CBS) software in operation based on the various controls and logic embedded therein. ? We have evaluated and understood the Bank’s internal control system in adhering to the relevant RBI guidelines regarding income recognition asset classification and provisioning pertaining to advances.
Provisions in respect of such NPAs and restructured advances are made based on management’s assessment of the degree of impairment of the advances subject to and guided by the minimum provisioning levels prescribed under RBI guidelines prescribed from time to time. The ? We assessed and evaluated the process of identification of NPAs and corresponding reversal of income and creation of provision.
provisions on NPAs are also based on the valuation of the security available. In case of restructured accounts provision is made in accordance with the RBI guidelines. We identified NPA identification and provision on loans and advances as a key audit matter because of the significant efforts involved by the management in identifying NPAs based on the RBI Guidelines the level of management judgement involved in determining the provision (including the provisions on assets which are not classified as NPAs) the valuation of security of the NPAs and on account of the significance of these estimates to the standalone financial statements of the Bank. ? We have analyzed and understood key IT systems/ applications used operational effectiveness of relevant controls including involvement of manual process and manual controls in relation to income recognition asset classification and provisioning pertaining to advances.
In order to ensure the effectiveness of the operation of the key controls and compliance to the directions of the RBI we have verified whether both CBS system and the management have:
? Timely recognized the depletion in the value of available security.
? Made adequate provisioning based on such time-to- time monitoring and identification of asset classification including accounts which meet the criteria for asset classification benefit in accordance with the Reserve Bank of India COVID-19 Regulatory Package.
? We placed reliance upon the Independent Auditor’s Report of the respective Branch Auditors with respect to income recognition asset classification and provisioning as well as Memorandum of changes suggested both at the branches and at Head Office.
2. Investments Our audit approach towards Investments with reference to the RBI circulars/ directives included the review and testing of the design operating effectiveness of internal controls and substantive audit procedures in relation to valuation classification identification of Non-Performing Investments provisioning/ depreciation related to Investments. In particular:
Investment portfolio of the Bank comprises of investments in government securities bonds debentures shares security receipts and other approved securities which are classified under three categories Held to Maturity Available for Sale and Held for Trading. Investments comprise a substantial portion of the Bank’s total assets. ? We assessed and understood the system and internal control as laid down by the Bank to comply with relevant RBI guidelines regarding valuation classification identification of Non- Performing Investments Provisioning and depreciation on Investments.
Valuation of Investments identification of Non-Performing Investments (NPI) and the corresponding non-recognition of income and provision thereon is carried out in accordance with the relevant circulars / guidelines / directions of RBI. (refer Schedule 8 read with Note 4 of Schedule 17 to the standalone financial statements) ? Tested accuracy and compliance for selected sample of investments with the RBI Master circulars and directions by re-performing valuation for each category of security in accordance with the RBI guidelines.
The valuation of each type of aforesaid security is to be carried out as per the methodology prescribed in the circulars and directives issued by the RBI which involves collection of data/ information from various sources such as FBIL rates rates quoted on BSE/ NSE financial statements of unlisted companies NAV in case of security receipts etc. ? We assessed and evaluated the process of identification of NPIs and corresponding reversal of income and creation of provision.
As per the RBI directions there are certain investments that are valued at market price however certain investments are based on the valuation methodologies that include statistical models with inherent assumptions assessment of price for valuation based on financial statements etc. The price discovered for the valuation of these Investments is only a fair assessment of the Investments. ? We carried out substantive audit procedures to re- compute independently the provision to be created and depreciation to be provided.
Hence the valuation of Investments requires special attention and further in view of the significance of the amount of Investments in the financial statements the same has been considered as Key Audit Matter in our audit. ? We assessed that the standalone financial statement disclosures appropriately reflected the Bank’s exposure to investments valuation risks with reference to the requirements of the prevailing accounting standards and the RBI guidelines.
3. Information technology (IT) systems used in financial reporting process We conducted an assessment and identified key IT applications database and operating systems that are relevant to our audit and have identified CBS and Treasury System primarily as relevant for financial reporting. For the key IT systems pertaining to CBS and treasury operations used to prepare accounting and financial information our areas of audit focus included Access Security (including controls over privileged access) application change controls database management and network operations. In particular:
The Bank’s operational and financial reporting processes are dependent on IT systems run through Core Banking Solutions (CBS) and other integrated software with automated processes and controls large volume of transactions. The process and controls are to ensure appropriate user access and management processes in use. ? We obtained an understanding of the Bank’s IT control environment and key changes during the audit period that may be relevant to the audit.
TheBankhasanin-houseDepartmentofInformation & technology (DIT) run under the supervision of the top management and with the support of expert consulting agencies for maintaining IT services. ? We tested the design implementation and operating effectiveness of the Bank’s General IT controls over the key IT systems that are critical to financial reporting including obtaining reports from independent experts.
Accordingly our audit was focused on key IT systems and controls due to the pervasive Impact on the standalone financial statements and the same has been considered as Key Audit Matter in our audit. This included evaluation of Bank’s controls to evaluate segregation of duties and access rights being provisioned / modified based on duly approved requests access for exit cases being revoked in a timely manner.
? We also tested key automated and manual business cycle controls and logic for system generated reports relevant to the audit; including testing of compensating controls or performed alternate procedures to assess whether there were any unaddressed IT risks that would materially impact the standalone financial statements information other than the standalone Financial Statements and Auditors’ Report thereon.
4. Provisions Contingent Liabilities and Claims: We have obtained an understanding of Internal Controls relevant to the audit in order to design our audit procedures that are appropriate in the circumstances.
Assessment of Provisions and Contingent Liability in respect of certain litigations on various claims filed by other parties not acknowledged as debt (Note No. 11 of Schedule 17 and Note No. 20. i. of Schedule 18). We broadly reviewed the underlying assumptions and estimates used by the management for provisioning but as the extent of impact is dependent on future developments which are highly uncertain we primarily relied on those assumptions and estimates which are subject matter of periodic review by the Bank.
There is high level of judgement required in estimating the level of provisioning. The Bank’s assessment is supported by the facts of matter their own judgement past experience and advice from legal and independent experts wherever considered necessary. Accordingly unexpected adverse outcomes may significantly impact the Bank’s reported profit and state of affairs presented in Balance Sheet. We have relied upon the management note and legal opinions obtained by the bank regarding the claims and tax litigations and involved our internal team to review the nature of such litigations and claims their current status sustainability examining recent orders and/or communication received from various tax authorities/judicial forums and follow up actions thereon and likelihood of claims/litigations materializing into eventual liability upon final resolution from the available records and developments to date.
Contingent Liability is a possible obligation outcome of which is contingent upon occurrence or non-occurrence of one or more uncertain future events. In the judgement of the management such claims and litigations including tax demands against the bank would not eventually lead to a liability.
However unexpected adverse outcomes may significantly impact the Bank’s reported financial results which is uncertain/ unascertainable at this stage.
Considering the uncertainty relating to the outcome of these matters which requires application of judgment in interpretation of law this has been determined as a key Audit Matter.

Information other than the standalone financial statements and Auditors’ reportthereon

6. The Bank’s Board of Directors is responsible for the other information. Theother information comprises the

Corporate Governance Report which we obtained at the time of issuance of thisauditors’ report and the Directors’ Report including annexures and Management

Discussion and Analysis which is expected to be made available to us after that datebut does not include the financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other informationand the Pillar 3 disclosures under Capital Adequacy Framework (Basel

III disclosures) and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed on the other information that we obtained priorto the date of auditors’ report we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

When we read the Directors’ Report including annexures and Management Discussionand Analysis if we conclude that there is material misstatement therein we are requiredto communicate the matter to those charged with governance and determine the actions underthe applicable laws and regulations.

Responsibilities of Management and those charged with governance for the Standalonefinancial statements

7. The Bank’s Board of Directors is responsible with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Bank in accordance with theaccounting principles generally accepted in India including the applicable Accounting

Standards 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

("RBI guidelines") and judicial pronouncements. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Bank and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Bank’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Bank or to cease operationsor has no realistic alternative but to do so. The Board of Directors is also responsiblefor overseeing the Bank’s financial reporting process.

Auditors’ responsibilities for the audit of the standalone financial statements

8. Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors’ report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in aggregate they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also: ? Identify and assess therisks of material misstatement of the standalone financial statements whether due tofraud or error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

? Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances.

? Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management. ? Conclude on theappropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the

Bank’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However future events or conditionsmay cause the Bank to cease to continue as a going concern.

? Evaluate the overall presentation structure and content of the Standalone financialstatements including the disclosures and whether the Standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of the misstatements in the financial statements thatindividually or aggregate makes it probable that the economic decisions of a reasonablyknowledgeable user of the standalone financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning of the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatement in the financial statements.

We communicate with those charge with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors’ report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

9. We did not audit the financial statements/ information of 1869 branches included inthe standalone financial statements of the Bank whose financial statements / financialinformation reflect total assets of 230319.41 crore as at 31st March 2022 andtotal revenue of

6490.25 crore for the year ended on that date as considered in the standalonefinancial statements.

These branches cover 43.90 per cent of advances 61.16 per cent of deposits and 22.92per cent of non-performing assets as at 31st March 2022 and 25.19 per cent ofrevenue for the year ended 31st March 2022.

The financial statements/ information of these branches have been audited by the branchauditors whose reports have been furnished to us and our opinion in so far as it relatesto the amounts and disclosures included in respect of branches is based solely on thereport of such branch auditors.

10. In the conduct of our audit we have taken note of the unaudited returns in respectof 2639 branches certified by the respective branch’s management whose financialstatements/ information reflect total assets of 58318.30 crore as at 31st March2022 and total revenue of 2836.01 crore for the year ended on that date. These unauditedbranches cover 16.76 per cent of advances 34.97 per cent of deposits and 8.76 per cent ofnon-performing assets as on 31st March 2022 and 11.01 per cent of revenue forthe year then ended.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory

Requirements

11. The standalone Balance sheet and the standalone Profit and Loss Account have beendrawn up in accordance with Section 29 of the Banking Regulation Act 1949;

12. Subject to the limitations of the audit indicated in paragraphs 7 to 10 above andas required by the Banking

Companies (Acquisition and Transfer of Undertakings) Act 1970/1980 and subject alsoto the limitations of disclosure required therein we report that:

a) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit and have found them tobe satisfactory.

b) The transactions of the Bank which have come to our notice have been within thepowers of the Bank; and c) The returns received from the offices and branches of the Bankhave been found adequate for the purposes of our audit.

13. As required by letter No. DOS.ARG.No. 6270/08.91.001/2019-20 dated March 17 2020on "Appointment of Statutory Central Auditors (SCAs) in Public Sector Banks Reportingobligations for SCAs from FY 2019-20" read with subsequent communication dated May19 2020 issued by the RBI we further report on the matters specified in paragraph 2 ofthe aforesaid letter as under:

a) In our opinion the aforesaid standalone financial statements comply with theapplicable Accounting Standards issued by ICAI to the extent they are not inconsistentwith the accounting policies prescribed by RBI. b) There are no observations or commentson financial transactions or matters which have any adverse effect on the functioning ofthe Bank.

c) As the Bank is not registered under the Companies Act 2013 the disqualificationsfrom being a director of the bank under sub-section (2) of Section 164 of the CompaniesAct 2013 do not apply to the bank.

d) There are no qualifications reservations or adverse remarks relating to themaintenance of accounts and other matters connected therewith.

e) Our audit report on the adequacy and operating effectiveness of the Bank’sinternal financial controls over financial reporting as required by the RBI Letter No.DOS. ARG. No. 6270/ 08.91.001/2019- 20 dated March 17 2020 (as amended) is given in

Annexure A to this report. Our report expresses an unmodified opinion on theBank’s internal financial controls over financial reporting with reference to thestandalone financial statements as at 31st March 2022.

14. We further report that:

a) in our opinion proper books of account as required by law have been kept by theBank so far as it appears from our examination of those books and proper returns adequatefor the purposes of our audit have been received from branches not visited by us.

b) the standalone Balance Sheet the standalone Profit and Loss Account and the CashFlow Statement dealt with by this report are in agreement with the books of account andwith the returns received from the branches not visited by us.

c) the reports on the accounts of the branch offices audited by branch auditors of theBank under section 29 of the Banking Regulation Act 1949 have been sent to us and havebeen properly dealt with by us in preparing this report; and

d) In our opinion the Balance Sheet the Profit and Loss Account and the Cash FlowStatement comply with the applicable accounting standards to the extent they are notinconsistent with the accounting policies prescribed by RBI.

For S JAYKISHAN For CHHAJED & DOSHI
Chartered Accountants Chartered Accountants
F.R. No. 309005E F.R. No. 101794W
(CA RITESH AGRAWAL) (CA KIRAN K. DAFTARY)
PARTNER

PARTNER

M. No. 062410 M. No. 010279
UDIN:22062410AIPWFO9548 UDIN:22010279AIPVUH9802
For A S K A & CO For KISHORE & KISHORE
Chartered Accountants Chartered Accountants
F.R. No. 122063W F.R. No. 000291N
(CA VIJAY SHELAR) (CA P. R. KARANTH)
PARTNER

PARTNER

M. No. 101504 M. No. 018808
UDIN:22101504AIPVUC2673 UDIN:22018808AIPVVF2318
Place : Mumbai
Date : May 9th 2022

ANNEXURE "A" TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 12 (e) under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

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

1. We have audited the internal financial controls over financial reporting of CentralBank of India ("the Bank") as at March 31 2022 in conjunction with our audit ofthe standalone financial statements of the Bank for the year ended on that date whichincludes internal financial controls over financial reporting of the Bank’s branches.

Management’s Responsibility for Internal

Financial Controls

2. The Bank’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Bank considering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issuedby the Institute of Chartered Accountants of India. These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Bank’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Banking Regulation Act 1949 and the circulars and guidelines issued bythe Reserve Bank of India.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on the Bank’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the

Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India (the"ICAI") and the Standards on Auditing (SAs) issued by the ICAI to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal financial controls based on the assessed risk. Theprocedures selected depend on the auditor’s judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained and the audit evidence obtained bythe branch auditors in terms of their reports referred to in the Other Matters paragraphbelow is sufficient and appropriate to provide a basis for our audit opinion on theBank’s internal financial controls over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

4. A Bank’s internal financial controls over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles.

A Bank’s internal financial controls over financial reporting includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe Bank; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Bank are being made onlyin accordance with authorisations of management and directors of the Bank; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the Bank’s assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

5. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

6. In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of the reports of the branch auditors referredto in the Other Matters paragraph below the Bank has in all material respects adequateinternal financial controls over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2022 based on thecriteria for internal control over financial reporting established by the Bank consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Other Matters

7. Our aforesaid report in so far as it relates to the operating effectiveness ofinternal financial controls over financial reporting of 70 (seventy) branches is based onthe corresponding reports of the respective Central Statutory Auditors / Statutory BranchAuditors of those branches.

During our testing of the internal financial controls over financial reporting andbased on the report of the branch auditors certain matters were noticed by us. Bank needsto further strengthen the process including alteration of the existing Risk Control Matrix(RCM) and designing a few more RCMs. Our suggestions in this regard have been submitted tothe management to further strengthen the internal financial controls over financialreporting of the Bank.

Our opinion is not modified in respect of this matter.

For S JAYKISHAN For CHHAJED & DOSHI
Chartered Accountants Chartered Accountants
F.R. No. 309005E F.R. No. 101794W
(CA RITESH AGRAWAL) (CA KIRAN K. DAFTARY)
PARTNER

PARTNER

M. No. 062410 M. No. 010279
UDIN:22062410AIPWFO9548 UDIN:22010279AIPVUH9802
For A S K A & CO For KISHORE & KISHORE
Chartered Accountants Chartered Accountants
F.R. No. 122063W F.R. No. 000291N
(CA VIJAY SHELAR) (CA P. R. KARANTH)
PARTNER

PARTNER

M. No. 101504 M. No. 018808
UDIN:22101504AIPVUC2673 UDIN:22018808AIPVVF2318
Place : Mumbai
Date : May 9th 2022

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