Till.'Members ufPunjab & Sind Bank Opinion
1. We have audited the accompanying financial statements oT Punjab & Sind Bank, (the Bank"), which comprise Lhe Balance Sheet as at 31st March, 2025, and the Profit and Less Account and the Cash Flow Statement 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 year ended on that date of 20 branches and treasury division audited by us and 398 branches and 42 Offices / Processing Centers audited by Statutory Branch Auditors. The branches audited by us and thuse 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 (‘RBI’t. Also included in the financial statements art the returns from ! 192 branches which have not been subjected to audit. These unaudited branches accounted for 21.08% of advances, 43.54% of deposits, 15.16% of interest income and 35.05% of interest expenses.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give (he information required by the Banking Regulation Act, 1949, as amended (the 'Act') in the manner so required for bank and are in conformity with accounting principles generally accepted in India and:
a) the Balance Sheet, read with the notes thereon is a full and lair Balance Sheet containing all the necessary' particulars, is properly dmwrn up so as to exhibit a true and fair view of the slate oT affairs of the Bank as at 3 1st March. 2025;
b) the Profit ami Loss Account, read with the notes Lhereon shows a true balance o( profit lor the year ended on that dale; and
e) the Cash Flow Statement gives a true and fairviewofthecash flows for the year ended on that dale.
3. We conducted out audit in accordance with the Standards of Auditing {“SAs") issued by the Institute of Chartered Accountants ofindia ("‘the ICAJ"). Our responsibilities under those Standards are further described in the Auditors' Responsibilities for the Audit oT the Financial Statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the 1C'AI together with ethical requirements that are relevant to our audit of the financial statements, prepared in accordance with Lhe accounting principles generally accepted in India, including the Accounting Standards issued by the fCAl. and provisions of Section 29 of the Banking Regulation AcL 1*34*3 and circulars, directions and guidelines issued by the Reserve Bank oflndia (“RBI1') from time to time 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 fur uur 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 year These matters were addressed in the context of our audit of lhe Financial statements as a whole, and in Forming our opinion thereon, and we do nul provide a separate opinion on these matters. We have determined the mailers described below* to be the key audit matters to be communicated in our report.
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Key Audit Mailers
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Him our matter was addressed in the audit
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Advances classification and provisioning
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Our Audit Procedure;
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tRefer Schedule 9 to the financial statements, read with the Accounting ft o 1 i c y No. 3 )
The advances are classified as performing and non-performing advances (NBA) and provisioning thereon is made in accordance with the Income Recognition, Assets Classification and Provisioning nurms and other relevant directions guidelines (Prudential Norms) as prescribed ! issued by the Reserve Bank oT India, lhe classification and provisioning is done by lhe Bank's IT software integrated with its Core Banking Solution (CBS). The extent of provisioning of NBA under the prudential norms are mainly based on its ageing and Tecovorability of the underlined security.
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We obtained an understanding of the Bank's software, circulars, guidelines and directives of the RBI, the Bank's internal instructions and procedures* and the guidelines of other concerned regulatury or other authority i birdies in respect of the assets classification and its provisioning and adopted the following audit procedures:
-Evaluation and IcsLing of the efFecliveness of the System controls and other key internal control mechanisms with respect to the advances monitoring, identification classification, assessment oT the loan impairment including testing of relevant data quality, and review of the real data entered / existing in the software.
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In the event of any improper application of the Prudential Norms of consideration of the incorrect value of the security, as the valuation of the security involves high degree of estimation and judgement, the carrying value of the advances could be materially misstated either individually or collectively, and in view of the significance of the amount of advances in the financial statements i.e. 60.13 % of total assets, the classification of the advances and provisioning thereon has been considered as key Audit Matter in our audit.
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-Verification / review uf the documentation:1,, operations i performance and monitoring of the advance accounts, on lest check basis of the large and stressed advances, to ascertain any overdue, unsatisfactory conduct or weakness in any advance account, to ensure that its classification is in accordance with the prudential norms of RBI. in respect uf the branches ! verticals audited by us. In respect of the branches audited by the branch statutory auditors, we have placed reliance on their reports.
-Review of the reports uf the credit audit, inspection audit, internal audit, concurrent audit, regulatory audit and other audit ! inspection mechanisms to ascertain the advances having any adverse indication communis, and review uf the control mechanisms of the bank to ensure the proper classification uf such advances and provisioning thereof.
-Review uf the report of the external agency on effectiveness of the Prudential Norms automation to ensure the proper classification of advances and provisioning in the system 'CBS.
Necessary changes t improvements were suggested wherever considered appropriate during the course of audit and the effect / impact wherever required was duly accounted for in the Financial Statements for the year under audit.
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Investments valuation, classification and
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Our Audit Procedure:
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identification and provisioning for Non-Performing Investments
(Refer Schedule R to the financial statements, read with the Accounting Policy No. 2)
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Our audit approach towards Investments with reference to the RBI circulars *' directives included the review and testing of the design, operating effectiveness of internal controls and substantive audit procedures in relation to valuation, Classification, identification of Non Performing Investments, provisioning / depreciation related to Investments. In particular.
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Investment portfolio of the Bank comprises of
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- We evaluated and understood the system
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Investments in Government Securities, Bonds,
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and internal control as laid down by the Bank
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Debentures, Shares, Security Receipts and other
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to comply with relevant RBI guidelines
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Approved Securities which are classified under Lhe
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regarding valuation, classification.
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categories oT Held to Maturity 11ITM), Available for
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identification ofNon Performing Investments,
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Sale (APS) and fair Value Through Profit and Loss
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Provisioning;' depreciation and appreciation
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(TVTPL) with Held for Trading (HFT) as subcategory ofFVTPL.
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related to Investments.
We assessed and evaluated the process
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Valuation of Investments, identification oT Non-
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adopLed for collection of information from
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Performing Investments (NPJ) and the
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various sources for determining fair value of
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corresponding non-recognition of income and provision thereon, is carried out in accordance with
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these investments.
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the relevant circulars l guidelines / directions of
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- For selected sample oT investments
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RBI, The valuation of each category < type) of
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(covering all categories of investments based
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aforesaid security is to be earned out as per the
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on nature oTsecurity! we tested accuracy and
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methodology prescribed in circulars and directives
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compliance with the RBI Master circulars and
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issued by the RBI which involves collection of data
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directions by re-performing valuation lor each
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information from various sources such as FBIL
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category oT security m accordance with the
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rates, rales quoted on BSE/ NSE, financial Statements of unlisted companies, NAV in case of
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RBI Master Circular/directions.
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security receipts etc. As per the RBI directions, there
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- We assessed and evaluated the process of
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are certain investments that are valued at market
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identification of NPJs, and corresponding
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price however certain investments are based on the valuation methodologies lhal include statistical
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reversal of income and creation o! provision.
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mtKlels with inherent assumptions, assessment of
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- We carried out substantive audit procedures
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price lor valuation based on financial statements etc.
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to re-compute independently the provision to
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Hence, Lhe price discovered Tor the valuation of these Investments may not be the true representative
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be created.
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but only a fair assessment of the Investments as on
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Necessary changes were carried out, wherever
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dale. Hence the valuation of Investments requires
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required, during the course of audit and the effect of
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special attention and further in view of the
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the same was duly accounted for in the Financial
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significance of the amount of Investments in Lhe financial statements i.e.28.99% of total assets, the same has been considered as Key Audit Matter in our audit.
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Statements for the year under audit.
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Information Technology lITl und controls
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Our Audi! Procedure:
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impacting financial Reporting
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- Understanding the coding system adopted by
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Tlie link's financial accounting and reporting
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the Bank for various categories oT business
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systems are highly dependent on the effective working of the Core Ranking Solution (CDS) and other IT
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process.
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systems 1 inked to the CBS or working independ en tl y.
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- Reviewing the design, implementation and
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operating effectiveness ot the CBS controls
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Our areas of focus relate to the! og ic that is 1 ed i nto the system, sanctity and reliability of the data, access management and segregation of duties. These underlying principles are important because they ensure that changes to applications and data are appropriate, authorized, cleansed and monitored, so that die system generates accurate and reliable reports / returns and other financial and non-ftnancial
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including application, access controls that are critical 10 financial reporting on test check basis.
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- Understanding the feeding of the data in the system and going through the extraction of die financial informal ion and statements from the IT system existing in die Rank.
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information that is used for the preparation and
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- Checking of the requirements for any changes
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p reseniat ion o f the h nanc ial statements.
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in the regulations / policy of the Bank and
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Technology (IT) systems are used in financial
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configuration/ impact of the same in IT.
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reporting process. The Bank’s operational and financial processes generate extensive volume on daily basis and process varied and complex transactions which arc highly dependent on IT systems.
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- Review of the reports generated by the system on sample basis.
- Review of the reports on IS Audit. System
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Logic AudiL and the major comments and
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There is a risk that automated accounting procedures and reiuLed internal controls may not be accurately designed and operating effectively.
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discussion with if Department on compliance thereof with key IT controls.
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and that the data may have not been correctly
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- Discussions with and review of the reports
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entered, processed and generated / extracted.
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of IT Experts regarding I T system / controls including IT application / solution ofJncome
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Considering the above, the same has been
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Recognition. Assets Classification and
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considered as fCey Audit Matter m ouraudil.
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Provisioning norms and investment valuation t classification etc.
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There is continuous improvements. The system needs to be further strengthened for its efficacy to further control deficiencies of input / output data
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5. We draw attention to Note No, 14( I) of Schedule \ 8 ofthe financial statements, regarding amortization of estimated additional liability On account of revision in family pension amounting to Rs. 236.84 erores. As stilled therein., (he Bank has charged amount of Ks. 47.37 erores to the Pro lit & Loss Account during the year ended 31st March, 2025 and the un amortized expense amoimlingto Rs. 47.37 erores has been carried forward in terms of RBI Circular No. RBI/ 2021-22/105 DOR. ACC;REC.57/21.04.018/2021 -22 dated October 04, 2021.
Our opinion is not modified in respeel of above matter.
In format ion Other than the financial Statements and Auditor's Report (hereon
6. The Bank's Board of Directors is responsible for (he other information. The olher in formal ion comprise* the Corporate Governance Report, which we obtained at (he time o Tissue of this Auditor’s Report. The olher information also includes the Directors' Report, including annexures, if any, thereon (but does not include the financial statements and our auditor's report thereon), which is expected Id be made available to us after the da Leollhis Auditor's Report.
Our opinion on the financial statements does not cover the Other in formation and Pillar 3 disclosures under the Basel III and we do not and will not express any form of assurance conclusion thereon.
In connection with our audit ofthe financial statements, our responsibility is Lo read the Other Information identified above and. in doing so, consider whether the Other Information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears lobe materially misstated.
If. based on the work we have performed on the Other Information that we oblained prior to the dale of this Auditors' Report, we conclude that there is a material misstatement of Lhis Olher Information, we are required to report Lhat fact. We have nothing Lo report in this regard. Furl her, when we read ihe Olher Information, which is expected lo be made available lo us after Lhe date of this Auditor’s Report ITwe conclude that there is a material misstatement therein, we are required to communicate the matter to those charge with governance.
Responsibilities uf the Management and i'huse Charged with Governance fur Ihe Financial Statements
7. The Bank’s Board of Directors is responsible with respect to the preparation of these financial statement* that give a true and fair view ofthe financial position, financial performance and cash flows ofthe Bank in accordance with the accounting principles generally aceepted in India, including the Aecounling Standards issued by ICAI. and provisions of Section 29 ofthe Banking Regulation Ac l, 1949 and circulars and guidelines issued by Lhe Reserve Bank of India (‘RBI’) from Lime lo time. This responsibility also includes maintenance uf adequate accounting records in accordance with the provisions uf the Aet 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 uf adequate internal financial controls. that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant lo 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 ot error.
In preparing the I in unci til statements, management is responsible for assessing the Bank's ability to continue as a going concern, disclosing, as applicable, matters related to going coneem and using the going concern basis of accounting unless management either intends to liquidate the Sank or to cease operations, or has no real i s tic a lie mat i ve b u t to do so.
Auditor's Responsibilities for the Audit of the financial Statements
S. Our objectives are to obtain reasonable assurance about whether Lhe financial statements as a whole are Tree from material misstatement, whether due to fraud ur 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 thaL an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements cun 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 mainEain professional skepticism throughout the audit. We also:
p Identify and assess the risks oT 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 Tor 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 cullusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
* Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
* Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
p Conclude tin the appropriateness of management "s use of the going concern basis of accounting and, based urt the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may east significant doubt on the Bank’s ability to continue as a going concern. If we conclude that a material uncertainly 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 auditor’s report. However, future events car
conditions maj cause the hank to cease to continue as a going concern.
* Evaluate the overall presentation., structure and content of the financial statements, including Lhe disclosures, and whether the financial statements represent Lhe underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of miss linemen Is in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in ti I planning the scope of our audit work and in evaluating the results of our work: and (ii) to evaluate the effect of any i den i i lied miss la Lements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned seope and timing of the audit and significant audit findings, including any significant deficiencies in internal contrul that we identify dunng 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 sa feguards.
From the matters eommuniealed w ith Lhose charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current periud and are therefore the Key Audit Matters. We describe these matters m our auditors’ report unless law or regulation precludes public disclosure about the matter ur when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse conseuuencesol doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Mullers
9. We did not audit the financial statements / information of398 Branches and 42 Offices / Processing Centers included in Lhe financial statementsofthe Bank, which reflect total assets of Rs. 22.91ii0.28 dures as at j 1st March, 2025 and total revenue of Rs. 1046.35 crores for lhe year ended on that dale, as considered in these financial statements. The financial statements / in formation of these braneheshave been audited by Lhe Statutory Branch Auditors whose; reports have been furnished to us. and our opinion in so far as it relates to the amounts and diselosures included in respect oT these branches, is based solely on the report of such brunch auditors.
10. We draw attention to the fact that corresponding figures for the year ended 3 1st March. 2024 are based on previously issued financial slalemenLs of the Bank, that were audited by two predecessor auditors M/s. Chaturvedi & Co. LLP and M/s. Manohar Chowdhry & Associates, along with two present auditors M/s. S. 1* Chopra & Co and M/s. Gup La Sharma & Associates, who had expressed an unmodified opinion on
Our opinion is not modified in respect of above mailers.
Report on Other Legal and Regulator) Requirements
11. The Balance Shetland the Profit and Loss Account have been drawn up in accordance with Section 29 ofthe Banking Regulation Act. 1949, as amended:
12. Subject to the limitations of the audit indicated in paragraphs 7 to 10 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Acl, I970/I9K0., as amended and subject also to the limitations of disclosure required [herein, and as required by sub- section (3) of Section 30 of the Bunki n g Reguia tion Act, 1949, as amended, we report that:
a) We have obtained all the information and explanations which, to the best ofour knowledge and belief, were necessary for the purposes o four audit and have found them to be satisfactory;
b) The transactions of the Bank, which have come to our notice, have been wilhin Lhe powers of the Bank: and
c) The returns received from Lhe offices and branches of the Bank have been found adequate for the purposes of our audit
!3. As required by letter No. DOS ARG. No.6270/08.91.001/2G19-20 dated I7ib March, 2020 on "Appuinlmenl of Statutory Central Auditors (SCAs) in Public Sector Bunks Reporting obligations for SCAT’ read with subsequent communication dated 19th May. 2020 issued by RBI, we further report on the matters specified in paragraph 2 of the aforesaid letter as under:
a) In our opinion, the aforesaid financial statements comply with the applicable Accounting Standards issued by ICA1, to theextenl they are not inconsistent with thcaccountingpolicies prescribed by the RBI.
b) There are no observations or comments on financial transactions or matters which have any adverse effect on Lhe functioning of the Bank.
c} As the bank is not registered under Lhe Companies Act. 20! 3 the disqualifications f rom being a director of the bank under sub-sec tion (2) of Section 164 of the Companies Act, 2013 do not apply to the Bank, di I here are no qualifications, reservations ur adverse remarks relaling to the maintenance of accounts and other matters connected therewith
e) Our report on lhe adequacy and operating effectiveness of the Bank’s Internal Financial Controls with reference to Financial Statements is given in Annexure A to this report expressing an unmodified opinion on the Bank's Internal Financial Control with reference to the financial statements as at 3 fst March, 2025.
14. We forther 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 re turns adequate for the purposes of our audit have been received iVum branches not visited by us;
b) the Balance Sheet, the Profit and Loss Account and the Cash Plows Statement dealt with by this report are in agreement with the books oi 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 AeL 1949, as amended have been sent to us and have been properly dealt wiUi by us in preparing this report; and
d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flows Statement comply with the applicable accounting standards, to the client they are not inconsistent with the accounting policies prescribed by RBI.
Fur S. P. Chopra & Co. Fur Gupta Sharma & Associates
Chartered Accountants Chartered Accountants
FRN: 000346N FRN: 00I466N
(CA. Fttteek Gupia) (CA. Vinay Saraf)
Partner Partner
M. No. 566023 M. No. 087262
UDIN: 25366023BMOL R13177 UDIN: 25087262BMKQMQ2449
For O. P. folia & Co. For NBS &. Co.
C hartered Accountants Chartered Accountants
FRN: DQ0734C FRN: I I0J00W
(CA. Naveen ICumar Somani f (CA. Pradeep Shetly)
Partner Partner
M. No. 429100 M. No. 046940
UDIN: 25429100BMKSQK4232 UDIN: 25046940BMLNA17539
Dale 29th April, 2025 Place : New Delhi
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