1. We have audited the attached Balance Sheet of Indian Overseas Bank
as at 31st March 2009, the Profit and Loss Account and Cash Flows
Statement of the Bank for the year ended 31st March 2009 annexed
thereto in which are incorporated the returns of 20 branches and 41
Regional Offices audited by us and 1602 branches including 6 Overseas
Branch audited by other auditors. The branches audited by us and those
audited by other auditors have been selected by the Bank in accordance
with the guidelines issued by Reserve Bank of India. Also incorporated
in the Balance Sheet and Profit & Loss Account are the returns from 326
branches/centres which have not been subjected to audit. These
unaudited branches account for 7.27 % of advances, 0.68 % of deposits,
2.47 % of interest income and 2.30 % of interest expenses. These
financial statements are the responsibility of the Banks Management.
Our responsibility is to express an opinion based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material mis-statements An audit
includes examination on a test basis evidence supporting the amounts
and disclosure in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statements presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. 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.
4. Reference is invited to:
i) Significant Accounting Policy No.2.2 and 2.5 (Schedule - 17)
regarding revenue recognition which are not in conformity with
Accounting Standard - 9 issued by the institute of Chartered
Accountants of India.
ii) Note No. 3.2 in Notes on Accounts (Schedule - 18) regarding
recoverability of claims pending and / or yet to be lodged with
The impact of the items stated herein above on the Profit & Loss
Account, Balance Sheet and Capital Adequacy Ratio and business ratios
as stated in Notes on Accounts (Schedule-18) is not ascertainable.
iii) Note No.3.5 in Notes on Accounts (Schedule 18) regarding non -
classification of an advance as per prudential norms of RBI.
5. The additional disclosures made in Note No. 4.2.1, 5, 6 and 7 to
the Notes on Accounts (Schedule 18) with regard to information in
respect of Restructured Accounts, Business Ratios, Maturity Pattern of
Assets and Liabilities and Exposure to Sensitive Sectors, respectively
are based on the records/ information as certified by the Bank and
relied upon by us.
6. Subject to the limitation of the audit indicated in Paragraph 1
above, and as required by the Banking Companies (Acquisition and
Transfer of Undertakings) Act 1970 and subject to the limitation of
disclosure required therein and also subject to our observations in
Paragraph 4 & 5 above, and further subject to :
Note no.4.2.4 in additional disclosures dealing with restructuring of
loans after 31st March 2009, which is not in accordance with Reserve
Bank of India Circular dated 17th April 2009, due to which Gross
MPA/Net NPA are understated to the extent of Rs.315.80 crores and
Rs.283.31 crores respectively with consequential effect on relevant
ratios. However, there is no impact on the Profit for the year and
reserves/advance as at March 31, 2009 as the additional provision
required of Rs.25.44 crores (net of sacrifice Rs.7 04 crores) is
covered by surplus provision available for NPA accounts.
we report as under:
a) In our opinion and to the best of our information and according to
the explanations given to us and as shown by the books of the Bank
maintained in accordance with generally accepted Accounting Principles
i) The Balance Sheet is a full and fair Balance Sheet containing the
necessary particulars, and is properly drawn up so as to exhibit a true
and fair view of the affairs of the Bank as at 31st March 2009,
ii) The Profit and Loss Account shows a true balance of Profit for the
year ended 31st March 2009 and
iii) The Cash Flows Statement gives a true and fair view of the cash
flow for the year ended 31st March 2009.
b) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit and have found the same to be satisfactory.
c) The transactions of the Bank, which have come to our notice have
been within the powers of the Bank.
d) The returns received from the offices and branches of the Bank have
been found adequate for the purpose of our audit.
For Vaithisvaran & Co For Maharaj N.R. Surech & Co
Chartered Accountants Chartered Accountants
M.No.019530 M.No. 023838
For Varma & Varma Far PKF Sridhar & Santhanam
Chartered Accountant Chartered Accountants
M.No.015707 M. No.024105
For Om Agarwal & Co
(ASHOK KUMAR JAIN)
For Bhaskaran & Ramesh
Dale : 04.05.2009