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Syndicate Bank

BSE: 532276 | NSE: SYNDIBANK | Series: NA | ISIN: INE667A01018 | SECTOR: Banks - Public Sector

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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Auditor's Report


The President of India/ Members

Report on audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Syndicate 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 2,268 branches audited by statutory branch auditors including 1 foreign branch. 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, the Profit and Loss Account and Statement of Cash Flows are the returns from 1,744 branches which have not been subjected to audit. These unaudited branches account for 0.92 per cent of advances, 25.92 per cent of deposits, 6.30 per cent of interest income and 18.63 per cent of interest expenses.

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

We conducted our audit in accordance with the Standards on Auditing (SAs) issued by Institute of Chartered Accountants of India (ICAI). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements sectionof 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

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed, in the context of our audit of the standalone financial statement as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No.

Key Audit Matter

Auditors’ Response


Income Recognition,

We have assessed the process

Asset Classification &

adopted by the bank to ensure


compliance with Prudential

The recognition of

norms on Income Recognition

income on accrual

and Asset Classification (IRAC)

basis on Advances and

issued by the Reserve Bank

Investments, Classification

of India. Our audit approach

of Advances/Investments

consisted testing of the design

and Provisioning thereof

and operating effectiveness

are in accordance with

of the internal controls and

the extant Prudential

substantive testing as under :-

norms on Income

- Evaluating the design of

Recognition and Asset

internal controls relating

Classification (IRAC) issued

to implementation of

by the Reserve Bank of

Prudential norms on IRAC.

India. Application of these

- Testing relevant IT Controls

norms involve certain

on sample basis.

degree of judgment.

- Review of various audit/ inspection reports made

Refer Notes 5 & 8

available to us in the

to Schedule 17 of

relevant areas.

Standalone Financial

- Placing reliance on the


opinions of experts on legal matters, titles, valuation and other aspects of securities charged to the bank.

- Review of files of the borrowers selected on sample basis and operations of such accounts.

- Performing relevant analytical procedures.

- Test Checking of Interest application, levying of other charges, commission etc.


Contingent Liabilities

The contingent liability as defined in AS 29-Provisions, Contingent Liabilities and Contingent Assets requires assessment of probable outcomes and cash flows. The identification and quantification of contingent liabilities require estimation and judgment by the management.

Refer Schedule 12 of Standalone Financial Statements

We have carried out the validation of the information provided by the management by performing the following procedures

- Evaluating reasonableness of the underlying assumptions.

- Examining the relevant documents on record.

- Relying on relevant external evidence available including legal opinion, relevant judicial precedents and industry practices.

- Getting management confirmation where-ever necessary.


IT Systems & Control

Preparation of financial statements is highly dependent on Core Banking Solution and other supporting software and hardware controls. Appropriate IT Controls are required to ensure that these IT applications process data as expected and changes are made in an appropriate manner. Such controls contribute to mitigating the expected risk of erroneous output data. Audit outcome is dependent on the extant IT controls and systems.

We have planned, designed and carried out the desired audit procedures and sample checks, which in our opinion are adequate to provide reasonable assurance on the adequacy of IT controls in place. In addition we have relied on IS and other related audit reports and obtained inputs from IS experts in selected areas.

Information other than the Standalone financial statement & auditors thereon

The Bank’s Board of Directors is responsible for the preparation of other information. The other information comprises the information included in the Management Discussion and Analysis, Board Report’s including annexures to Board Report. Corporate Governance and Shareholders Information, but does not include the standalone financial statement and our auditors’ report thereon.

Our opinion on standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of standalone financial statements, our responsibility is to read the other information and in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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

The Bank’s 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 Bank’s 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

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 auditor’s 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 management’s 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 bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters.

We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

We did not audit the financial statements / information of 2,268 branches included in the standalone financial statements of the Bank whose financial statements/ financial information reflect total assets of Rs.2,76,768 crore as at 31st March 2019 and total revenue of Rs.16,196 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.

Report on Other Legal and Regulatory Requirements

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

Subject to the limitations of the audit indicated in above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, 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 purpose 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;

c) The returns received from the offices; and branches of the Bank have been found adequate for the purposes of our audit.

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.


CO LLP Chartered Accountants Chartered Accountants LLP

Chartered Accountants FRN : 111107W FRN : 302184E/E300007

FRN : 004494S/S200037


Partner Partner Partner

Membership No. 019530 Membership No. 045814 Membership No. 015774


Chartered Accountants Chartered Accountants

FRN : 00947N FRN : 006600C


Partner Partner

Membership No. 094227 Membership No. 072707

Place : Bengaluru

Date : 10.05.2019