The President of India, 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, 2013, which comprise the Balance Sheet as at 31st March, 2013
and Profitand 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 976 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 1004 branches which have not been
subjected to audit. These unaudited branches account for 6.57% of advances, 20.72% of
deposits, 4.43% of interest income and 19.22% 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
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 assessments, the
auditor considers interal 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 evaluting 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(d) of Schedule 18 wherein the plan assets of
the pension and gratuity fund includes an amount of Rs. 251.48 crore and Rs. 64.20 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 Accountant of India.
Emphasis of Matter
7.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. 341.80 crores (previous year 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 Standards (AS) 15, "Employee Benefits" vide its
circular no. DBOD. BP.BC/80/21.04.018/2010-11 dated 09.02.2011 on Re-opening of Pension
Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits
Prudential Regulatory Treatment.
8.In our opinion, as shown by books of bank, and to the best of our information and
according to the explanations given to us
(i) the Balance Sheet, read with the notes thereon is a full and fair Balance Sheet
containing all the necessary particulars is property drawn up so as to exhibit a true and
fair view of state of affairs of the Bank as at 31st March, 2013, 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 the date.
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 Undertaking) Act, 1980, and
subject also to the limitations of disclosure require 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 purpose of audit and have found them to be
(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 found
adequate for the purpose of our audit.
11. In our opinion, the Balance Sheet, Profitand Loss Account and Cash Flow Statement
comply with the applicable Accounting Standards.