ORIENTAL BANK OF COMMERCE
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
INDEPENDENT AUDITORS` REPORT
To
The Shareholders,
Oriental Bank of Commerce Report on the Financial Statements
1. We have audited the accompanying financial statements of the Oriental
Bank of Commerce as at 31st March, 2012, which comprise the Balance Sheet
as at 31st March, 2012 and the Profit and Loss account and the Cash Flow
Statement for the year then ended and a summary of the significant
accounting policies and other explanatory information. Incorporated in
these financial statements are the returns of 20 branches audited by us and
1365 branches audited by branch auditors. The branches audited by us and
those audited by other auditors have been selected by the Bank in
accordance with the guidelines issued to the Bank by the Reserve Bank of
India. Also incorporated in the Balance Sheet and the Statement of Profit
and Loss are the returns from 387 branches which have not been subjected to
audit. These unaudited branches account for 1.23% of advances, 5.93% of
deposits, 0.60% of interest income and 4.70% of interest expenses.
Management`s Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial
statements in accordance with the Banking Regulation Act, 1949. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation of the financial statements
that are free from material misstatement, whether due to fraud or error.
Auditors` Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance with
the Standards on Auditing issued by the Institute of Chartered Accountants
of India. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors` judgement, including the assessment of the
risks of material misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the bank`s preparation and fair presentation
of the financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of the
accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis for Qualified Opinion
6. We draw attention to note no. 15 of Schedule - 18 wherein the plan
assets of the pension and gratuity fund includes an amount of Rs.591.24
crore and Rs. 126.63 crore respectively invested by the trust in the Bank`s
own Bonds/Deposits which is not in accordance with Accounting Standard-15
"Employee`s Benefits" issued by the Institute of Chartered Accountants of
India.
Opinion
7. In our opinion, as shown by books of bank, and to the best of our
information and according to the explanations given to us except for the
effects of the matter described in the Basis for Qualified Opinion
paragraph: -
(i) the Balance Sheet, read with the notes thereon is a full and fair
Balance Sheet containing all the necessary particulars, is properly drawn
up so as to exhibit a true and fair view of state of affairs of the Bank as
at 31st March, 2012, in conformity with accounting principles generally
accepted in India;
(ii) the Profit and Loss Account, read with the notes thereon shows a true
balance of profit, in conformity with accounting principles generally
accepted in India , for the year covered by the account; and
(iii) the Cash Flow Statement gives a true and fair view of the cash flows
for the year ended on that date.
Emphasis of Matter
8. Without qualifying our opinion, we draw attention to: -
(i) Note no.15(d) of schedule 18 regarding deferment of pension liability
to the extent of Rs.512.70 Crores pursuant to exemption granted by the
Reserve Bank of India to the public sector banks from application of the
provisions of Accounting Standard (AS) 15, "Employee Benefits" vide its
circular no. DBOD. BP.BC/80/ 21.04.018/2010-11 on Re-opening of Pension
Option to Employees of Public Sector Banks and Enhancement in Gratuity
Limits - Prudential Regulatory Treatment.
(ii) Note no.4 of Schedule 18 regarding obtaining of permission from
regulatory authority for proposed dividend for the financial year 2011-12.
Report on Other Legal and Regulatory Requirements
9. The Balance Sheet and the Profit and Loss Account have been drawn up in
Forms "A" and "B" respectively of the Third Schedule to the Banking
Regulation Act, 1949.
10. Subject to the limitations of the audit indicated in paragraph 1 to 5
above and as required by the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1980, and subject also to the limitations of disclosure
required therein, we report that: -
(i) we have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of audit
and have found them to be satisfactory.
(ii) the transactions of the Bank, which have come to our notice, have been
within the powers of the Bank.
(iii) the returns received from the offices and branches of the Bank have
been generally found adequate for the purposes of our audit and where the
particulars in the returns received were incomplete/inadequate, we have
relied upon the information and explanations furnished by the Management.
11. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the applicable Accounting Standards, subject to
our comments in paragraph 6 above.
For S.P. MARWAHA & CO. For MANIAN & RAO
Chartered Accountants Chartered Accountants
Firm Registration Firm Registration
No.: 000229-N No.: 001983-S
(ASHUTOSH SAXENA) (RAVINDRA. C)
Partner Partner
M.No. 086358 M.No. 213658
For TEJ RAJ & PAL For AGIWAL & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Registration No.: 304124-E Firm Registration No.: 000181-N
(B. VIJAY) (P.C. AGIWAL)
Partner Partner
M.No.214678 M.No.080475
For B. PURUSHOTTAM & CO. For JAIN KAPILA ASSOCIATES.
Chartered Accountants Chartered Accountants
Firm Registration No.: 002808-S Firm Registration No.: 000287-N
(T. RAVEE) (D.K. KAPILA)
Partner Partner
M.No. 028243 M.No. 016905
Place: New Delhi
Dated: 30th April, 2012 |