Allahabad Bank Merged Auditor Reports

To

The Members of Allahabad Bank

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the standalone financial statements of Allahabad Bank (the Bank), which comprise the Balance Sheet as at 31 March 2019, the Profit and Loss Account and the Statement of Cash Flows for the year then ended, and notes to financial statements including a summary of significant accounting policies and other explanatory information in which are included returns for the year ended on that date of 20 branches audited by us and 1893 branches audited by statutory 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 included in the Balance Sheet, Profit and Loss Account and Statement of Cash Flows are the returns from 1444 branchesoffices which have not been subjected to audit. These unaudited branches account for 8.38 percent of advances, 24.50 per cent of deposits, 11.15 per cent of interest income and 26.53 per cent of interest expenses.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Banking Regulation Act, 1949 in the manner so required for bank and are in conformity with accounting principles generally accepted in India and give:

a. true and fair view in case of the Balance sheet, of the state of affairs of the Bank as at 31st March, 2019;

b. true balance 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 by ICAI. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank in accordance with the code of ethics issued by the Institute of Chartered Accountants of India together with ethical requirements that are relevant to our audit of the financial statements and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

(Description of each key audit matter in accordance with SA 701)

Sl. No. Key Audit Matters	Auditors Response
1 Evaluations of IT systems	Principal Audit Procedures
The Bank has system based identification of non performing assets in accordance with IRAC Norms.	We have assessed the efficacy of the system and we recommend that the system to be calibrated further to enhance the vigorousness.
2 Evaluation of uncertain tax positions	Principal Audit Procedures
The bank has material uncertain tax positions including matters under dispute which involves significant judgement to determine the possible outcome of the disputes. Refer Note No. 41.6 to standalone financial statement .	Obtained details of completed tax assessments, demands and appeal orders for assessment completed. We considered legal precedence and rulings in evaluating management position on these uncertain tax positions.
3 Classification of Advance into Priority & Non Priority Sector	Principal Audit Procedures
Bank has made numerous reclassification and declassifications of borrowers accounts between priority & non -priority sectors during the year under audit.	We have observed from Memorandum of Changes issued by Branch Auditors and have further performed test checks & substantive procedures to validate the findings. We are of the opinion that Bank should further strengthen their system to avoid such type of misclassification in future.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

5. The Banks Board of Directors is responsible with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI, 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Banks ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Auditors Responsibilities for the Audit of the Financial Statements

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

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

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the banks ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the 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 auditors report. However, future events or conditions may cause the bank to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

Other Matter

7. We did not audit the financial statements information of 1893 branches offices included in the standalone financial statements of the Bank whose financial statements financial information reflect total assets of Rs108710.22 crore as at 31^st March 2019 and total revenue of Rs6272.31 crore for the year ended on that date, as considered in the standalone financial statements. The financial statements information of these branches have been audited by the branch auditors whose reports have been furnished to us, and in our opinion in so far as it relates to the amounts and disclosures included in respect of branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Emphasis on matter

8. We draw attention to para no. 21 of Schedule 18- Notes to financial accounts regarding Deferred Tax Assets on provision for bad and doubtful debts Rs2156.00 crores and carried forward loss Rs1118.19 crores created upto 31.03.2018.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

9. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 29 of the Banking Regulation Act, 1949;

10. Subject to the limitations of the audit indicated in paragraphs 5 to 7 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 19701980, and subject also to the limitations of disclosure required therein, we report that:

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

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

c) The returns received from the offices and branches of the Bank have been found 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 the Bank so far as it appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from branches not visited by us]

b) the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows dealt with by this report are in agreement with the books of account [and with 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 the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to 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 and the Statement of Cash Flows comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

	Statutory Central Auditors
For Ms Nandy Halder & Ganguli	For Ms P L Tandon & Co.
Chartered Accountants	Chartered Accountants
Firm Regn. No. 302017E	FRN : 000186C
(CA Rana Pratap Nandy)	(CA Anil Kumar Aggarwal)
Partner	Partner
Membership No.051027	Membership No.071548

For Ms R. Gopal & Associates	For Ms JBMT & Associates	For Ms Prakash S. Jain & Co.
Chartered Accountants	Chartered Accountants	Chartered Accountants
FRN : 000846C	FRN : 320232E	FRN : 002423C
(CA Gopal Das Agarwala)	(CA Basudev Ojha)	(CA Gaurav Thepadia)
Partner	Partner	Partner
Membership No.051609	Membership No.055193	Membership No.405326
Place: Kolkata
Date: 10.05.2019