The President of India / Members of United Bank of India Report on Audit of theFinancial Statements Opinion
1. We have audited the financial statements of United Bank of India (the Bank')which comprise the Balance Sheet as at 31stMarch 2019 the Statement of Profit and Lossand the Statement of Cash Flows for the year then ended and notes to financial statementsincluding a summary of significant accounting policies and other explanatory informationin which are included returns for the year ended on that date of 20 branches and treasuryoperation audited by us and 942 branches/ retail hubs which includes 1 Central PaymentHub 1 Central Pension Processing Centre and 1 Inward Clearing Processing Centre auditedby statutory branch auditors. The branches audited by us and those audited by otherauditors have been selected by the Bank in accordance with the guidelines issued to theBank by the Reserve Bank of India. Also included in the Balance Sheet the Statement ofProfit and Loss and Statement of Cash Flows are the returns from 36 Regional Offices 1087branches 3 Staff Training Colleges 1 CMS and 1 Data Centre at Head Office which have notbeen subjected to audit. These unaudited branches account for 9.97% of gross advances29.81% of deposits 5.69% of interest income and 30.26% of interest expenses.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theBanking Regulation Act 1949 in the manner so required for bank and are in conformity withaccounting principles generally accepted in India and give: a. true and fair view in caseof the Balance sheet of the state of affairs of the Bank as at 31st March 2019; b. truebalance of loss in case of Profit and Loss account for the year ended on that date; and c.true and fair view in case of statement of 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 byICAI. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Bank in accordance with the code of ethics issued by the Institute ofChartered Accountants of India together with ethical requirements that are relevant to ouraudit of the financial statements 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.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Key Audit Matters ||Auditors Response |
|Assets Classification and Provisioning in respect of Advances || |
|Advances comprise a substantial portion of the Bank's assets and since the management exercises significant judgement in the asset classification and provision this has been considered by us as a key audit matter ||In order to ensure the effectiveness of the operation of the key controls and compliance to the directions of the RBI in this regards we have verified whether both CBS system and the management have |
|Banks are governed by the prudential norms issued by the Reserve ||(a) timely recognised the depletion in the value of both primary and collateral security; |
|Bank of India on Income recognition Asset Classification and provisioning pertaining to Advances. || |
| ||(b) made adequate provisioning based on such time to time monitoring and identification of asset classification. |
|Identification of such non-performing advances is carried out in the Bank based on system identification by the Core Banking Solution (CBS) software in operation i.e. Finacle based on the various controls and logic embedded therein. The management also exercises significant judgement in adherence to the IRAC norms and adequate provisioning in required cases. ||We have also placed reliance on and performed the following procedures: |
| ||(a) reviewed and placed reliance upon the Independent Auditors Report of the Statutory Branch Auditors as well as all MOC passed by us both at branches as well as H.O. |
| ||(b) ensured that changes suggested by the Statutory Branch Auditors with respect to income recognition asset classification and provisioning have been appropriately dealt. |
Information Other than the Financial Statements and Auditors' Report Thereon
5. The Banks Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe financial statements and our auditor's report thereon. The annual report is expectedto be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the annual report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andreport it to Reserve Bank of India and Securities and Exchange Board of India (SEBI).
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
6. The Bank's Board of Directors is responsible with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Bank in accordance with the accountingprinciples generally accepted in India including the Accounting Standards issued by ICAIand provisions of Section 29 of the Banking Regulation Act 1949 and circulars andguidelines issued by the Reserve Bank of India (RBI') from time to time. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Bank and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theBank's ability to continue as a going concern disclosing as applicable matters relatedto going concern and using the going concern basis of accounting unless management eitherintends to liquidate the Bank or to cease operations or has no realistic alternative butto do so.
Auditor's Responsibilities for the Audit of the Financial Statements
7. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
l Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
l Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
l Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the bank'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the bank to cease to continue as agoing concern.
l Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged 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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
8. We did not audit the financial statements/ information of 942 branches/ officesincluded in the financial statements of the Bank whose financial statements/ financialinformation reflect total assets (gross) of Rs.23975.18 Crores as at 31st March 2019 andtotal revenue of Rs.1365.57 Crores for the year ended on that date as considered in thefinancial statements. The financial statements/ information of these branches have beenaudited by the branch auditors whose reports have been furnished to us. And in our opinionin so far as it relates to the amounts and disclosures included in respect of branches isbased solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
9. The Balance Sheet and the Profit and Loss Account have been drawn up in accordancewith Section 29 of the Banking Regulation Act 1949; 10. Subject to the limitations of theaudit indicated in paragraphs 5 to 7 above and as required by the Banking Companies(Acquisition and Transfer of Undertakings) Act 1970/1980 and subject also to thelimitations of disclosure required therein we report that: a) We have obtained all theinformation and explanations which to the best of our knowledge and belief werenecessary for the purposes of our audit and have found them to be satisfactory; b) Thetransactions of the Bank which have come to our notice have been within the powers ofthe Bank; and c) The returns received from the offices and branches of the Bank have beenfound adequate for the purposes of our audit.
11. 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) theBalance Sheet the Profit and Loss Account and the Statement of Cash Flows dealt with bythis report are in agreement with the books of account and with the returns received fromthe branches not visited by us; c) the reports on the accounts of the branch officesaudited by branch auditors of the Bank under section 29 of the Banking Regulation Act1949 have been sent to us and have been properly dealt with by us in preparing thisreport; and d) in our opinion the Balance Sheet the Profit and Loss Account and theStatement of Cash Flows comply with the applicable accounting standards to the extentthey are not inconsistent with the accounting policies prescribed by RBI.
|For Arun K. Agarwal ||For Mookherjee Biswas ||For Dinesh Jain ||For SBA Associates |
|& Associates ||& Pathak ||& Associates || |
|Chartered Accountants ||Chartered Accountants ||Chartered Accountants ||Chartered Accountants |
|(FRN: 003917N) ||(FRN: 301138E) ||(FRN: 004885N) ||(FRN: 308136E) |
|Sd/- ||Sd/- ||Sd/- ||Sd/- |
|CA Arun Kumar Agarwal ||CA Sankar Prasanna Mukherjee ||CA Neha Jain ||CA Nilanjana Sen |
|(Partner) ||(Partner) ||(Partner) ||(Partner) |
|M. No: 082899 ||M. No: 010807 ||M. No : 514725 ||M. No : 061768 |
|Date : 13th May 2019 || || || |
|Place : Kolkata || || || |