Auditor Report of City Union Bank Ltd.

Mar 31, 2023

CITY UNIDN BANK LIMITED

Report on the Audit of the Financial Statements Opinion

We have audited the financial statements of City Union Bank Limited (''the Bank''),which comprise the Balance Sheet as at 31st March 2023, the Profit & Loss Account, and the Cash Flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and incorporated in these financial statements are the returns of 24 branches / offices audited by us and 733 branches/ offices audited by other Branch Statutory Auditors. The branches audited by us and those audited by other auditors have been selected by the Bank in accordance with guidelines issued to the Bank by the Reserve Bank of India.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulations Act, 1949 as well as Companies Act, 2013 (the ''Act'') in the manner so required for banking companies and give a true and fair view in conformity with the Accounting Standards prescribed under section 133 of the Act read with the Companies(Accounting Standards) Rules, 2006, as amended ("Accounting Standards") as applicable to banks and other the accounting principles generally accepted in India, of the state of affairs of the Bank as at 31st March, 2023, and Profit and its Cash Flows for the year ended on that date.

Basis of Opinion

We conducted our audit of the Financial Statements in accordance with the Standards on Auditing (''SAs'') specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s 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 the ethical requirements that are relevant to our audit of the Financial Statements under the provisions of the Act and the rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements of the current year ending March 31, 2023. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters

How our Audit procedures addressed the Key Audit Matters

A. Income Recognition, Asset Classification and Provisioning (IRACP) on Loans & Advances (Reference to Schedule 9 read with Statement of Accounting Policies Note C.3 - Schedule to the Financial Statements) Loans and Advances constitute the largest class of Assets forming 64.65% of the total assets of the Bank as on the year ended 31st March 2023. The income recognition, asset classification and provisioning on advances done by the bank is governed by the directives / regulations issued by

Our audit procedures were focused on ensuring compliance with the income recognition, asset classification and provisioning norms as stipulated by RBI. We have also obtained an understanding of the inbuilt controls in the IT systems including CBS, controls with respect to compliance with RBI guidelines, and the Bank''s policies for identification and provisioning of non-performing loans & advances, and planned our audit accordingly. We have performed audit procedures for income recognition, classification into performing and

Key Audit Matters	How our Audit procedures addressed the Key Audit Matters
the Reserve Bank of India (RBI). The loans and advances are accounted in the Core Banking Solution (CBS) and the identification of nonperforming loans and advances is system driven and in accordance with IRACP norms. The management also relies on independent external valuations, legal advice, other professional inputs and makes estimates and judgments to determine the income recognition, asset classification and provisioning for losses on loans and advances.	non performing advances. We have considered the stressed accounts reported by the Bank and other banks as Special Mention Accounts ("SMA") in RBI''s Central Repository of Information on Large Credits (CRILC). We have reviewed the controls over the timely recognition of non-performing advances (NPA). We have performed other procedures including substantive audit procedures including test checks on the identification and provisioning of nonperforming advances in accordance with RBI guidelines.
	For NPAs identified, we have tested on a sample basis the asset classification dates, value of available security, income reversal and provisioning as per IRACP norms and recomputed the provision for NPA wherever required.
	Performed other substantive procedures including but not limited to the following:
	Selected samples of performing loans and assessed independently as to whether those should be classified as NPA. For the samples of performing loans selected, examined the security valuation, financial statements and other qualitative information.
	Performed inquiries with the credit and risk departments to ascertain if there were indicators of stress or an occurrence of an event of default in a particular loan account or any product category which needed to be considered as NPA.
	Reviewed credit committee and risk management committee minutes and held discussions and inquired with the credit and risk departments of the Bank to ascertain indicators of stress on loan accounts and sectors where there are indicators of stress and the steps taken to mitigate the risks.
	We have also relied on the work performed by the branch auditors, and also relied on the reports of internal audit, systems audit, concurrent audit, other audits, work done by lawyers, legal experts, independent valuers and other professionals, in accordance with SA 600 "Using the Work of Another Auditor and SA 620 "Using the Work of an Auditor''s Expert".

Key Audit Matters		How our Audit procedures addressed the Key Audit Matters
B.	Valuation of Financial Instruments	Our audit approach/procedures towards
	(Investments)	Investments with reference to the RBI
	(Reference to Schedule 8 read with Statement of Accounting Policies Note C.2- Schedule to the Financial Statements)	Circulars/directives included the understanding of internal controls, Bank''s Policies and substantive audit procedures in relation to valuation, classification, identification of non-performing
	Investments are classified into ''Held for Trading''	investments (NPIs) and provisioning/
	(''HFT''), Available for Sale'' (''AFS'') and ''Held to	depreciation related to Investments. In particular,
	Maturity'' (''HTM'') categories at the time of	the appropriateness of the valuation methodology
	purchase. Investments classified as HTM are	and test checking the inputs used such as pricing,
	carried at amortized cost and investments	measure of volatility and discount factors. We
	classified as AFS and HFT are marked-to-market on	assessed and evaluated the process adopted for
	a periodic basis as per the RBI guidelines.	collection of information from various sources for
	Accordingly, our audit was focused on checking the	determining market value of the investments and
	valuation of investments as a key audit matter	examined the adequacy and appropriateness of
	because of the management judgment involved in	depreciation and impairment of each category of
	determining the value of investments based on the	Investment.
	policy of the Bank, impairment assessment for HTM book and the overall impact on the financial statements of the Bank.	We assessed and evaluated the process of identification of NPIs and recomputed the provision to ensure that it is in accordance with RBI circular. We tested the mapping of investments between the Treasury application software and the Core banking Solutions software to ensure compliance with the presentation and disclosure requirements as per the aforesaid RBI Circular/ directions.
C.	Information Technology (''IT'') Systems and	We have reviewed Bank’s information technology
	Controls for financial reporting	policy, security policy, IT outsourcing policy for
	The IT environment of the Bank is complex and involves a large number of, independent and interdependent IT systems used in the operations of the Bank for processing and recording a large volume of transactions at numerous locations. We	those outsourced services implemented by the Bank and the IT risk management framework. We have also reviewed the BCP/ DRP of the Bank, adequacy of the IT Policy and implementation of the same.
	have identified ''IT systems and controls'' as key	We have tested the application controls and
	audit matter because of the level of process	changes to applications and database, segregation
	automation, large volume of automated	of duties as per SOP, and also reviewed the
	transactions, level of cyber security established by	mapping of interfaces between systems for
	the management and the complexity of the IT	generating financial information for reporting.
	architecture of the Bank.	We have tested the controls in the core banking solutions and treasury systems. This included testing the integrity of system interfaces, the completeness and accuracy of data feeds, system reconciliation controls and automated calculations. We have reviewed the automated

Key Audit Matters	How our Audit procedures addressed the Key Audit Matters
asset classification, interest computation, NPA identification, generation of EWS signals / red flags, and other related controls. We have also used various techniques such as inquiry, review of documentation, record, reports, observation and re-performance.

Information Other than the Financial Statements and Auditors'' Report Thereon

The Bank’s Board of Directors is responsible for the other information. The other information comprises the Chairman’s Statement, CSR initiatives, Director’s Report, Annexures to Director’s Report, Shareholders Information, Business Responsibility Report, Corporate Governance Report, Management Discussions & Analysis Report, List of Branches, Basel III Disclosures, Decade of Progress included in the Bank’s Annual report, but does not include the financial statements and our auditors’ report thereon.

Our opinion on the financial statements does not cover the other information and the Pillar 3 disclosure and the Basel III Disclosures, and accordingly, we do not express any form of assurance and conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information 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 to be materially misstated. When we read the other information, including annexures in the annual report thereon, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. We have nothing to report in this regard.

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

The Bank’s Board of Directors is responsible for the matters stated in Section 134 (5)of the Act with respect to the preparation of these 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 specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to the Bank and provisions of Section 29 of the Banking Regulation Act,1949 and the circulars and guidelines issued by 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 and the RBI Guidelines 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, the Management and Board of Directors are 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.

The respective Board of Directors are also responsible for overseeing the Bank’s financial reporting process.

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 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 Standards, 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.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3](I] of the Act, we are also responsible for expressing our opinion on whether the Bank has adequate internal financial controls with reference to the financial statement and the operating effectiveness of such controls.

• 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 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.

Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our Audit work and evaluating the results of our work; and (ii) to evaluate the effect of identified misstatements in the Standalone Financial Statements.

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 year ending March 31st 2023, 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 Matters:

We did not audit the financial statements / information of 733 branches / offices included in the Standalone Financial Statements of the Bank whose Financial Statements / Financial Information were audited by other auditors specially appointed for this purpose.

These branches had total advances of '' 36,343.06 crores, total deposits of ''42,946.10 crores and non-performing advances of '' 1,573.78 crores as at March 31, 2023. These branches cover 80% of advances, 82% of deposits and 82% of non-performing assets as at March 31, 2023.

The Financial Statements / Information of these branches have been audited by the Branch Auditors whose reports have been furnished to us, and 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 the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 read with the Rule 7 of the Companies (Accounts) Rules, 2014.

1. As required sub section (3) of section 30 of the Banking Regulation Act,1949,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; and

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

2. With respect to the matters to be included in the Auditor’s Report under Section 197(16) of the Act: The Bank is a banking company as defined under Banking Regulation, 1949. Accordingly, the requirements prescribed under Section 197 of the Companies Act, 2013 do not apply by virtue of Section 35B(2A) of the Banking Regulation Act, 1949,

3. Further, as required by Section 143(3) of the Companies Act,2013, we report that;

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) 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 offices and branches not visited by us;

c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from the offices and branches not visited by us;

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent they are not inconsistent with the Accounting Policies prescribed by Reserve Bank of India;

e) On the basis of the written representations received from the directors as on 31stMarch, 2023 taken on record by the board of directors, none of the directors is disqualified as on 31st March,2023 from being appointed as a director in terms of section 164 (2) of the Act;

f) with respect to the adequacy of the internal financial controls over financial reporting of the Bank with reference to these Financial Statement and the operating effectiveness of such controls, refer to our separate Report in "Annexure A "to this report; and

g) In our opinion, the entity being a Banking Company, the remuneration to its Directors during the year ended March 31, 2023, has been paid/provided by the Bank in accordance with the provisions of Section 35B(1) of the Banking Regulation Act 1949, and;

h) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014, as amended in our opinion and to the best of our information and according to the explanations given to us;

(i) The bank has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 18(11) to the financial statements;

(ii) The bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses if any, on long-term contracts including derivative contracts- Refer Note 15(V) to the financial statements; and

(iii) There has been no delay in transferring the funds to the Investor Education and Protection Fund Account by the Bank.

(iv) 1. The Management has represented that,

to the best of its knowledge and belief, other than as disclosed in the notes to accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other persons / entities, i n c l u d i n g fo r e i g n e n t i t i e s (''Intermediaries''), with the understanding, whether recorded in writing or otherwise, that the Intermediary has, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Bank ("Ultimate Beneficiaries") or provide any

guarantee, security or the like on behalf of the Ultimate Beneficiaries;

2. The Management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to accounts, no funds have been received by the Bank from any persons / entities, including foreign entities, that the company has directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

3. Based on the audit procedures which we have considered reasonable and appropriate in the circumstances and according to the information and explanations provided to us by the Management in this regard, nothing has come to our notice that has caused us to believe that the representations made by the Management under subclause (1) and (2) contain any material misstatement; and

v. The Bank has paid dividend during the year which is in compliance with section 123 of the Act.

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Mar 31, 2022

Report on the Audit of the Financial Statements Opinion

We have audited the financial statements of City Union Bank Limited (''the Bank''),which comprise the Balance Sheet as at 31st March 2022, the Profit & Loss Account, and the Cash Flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information. Incorporated in these financial statements are the returns of 24 branches / offices audited by us and 708 branches/ offices audited by other Branch Statutory Auditors. The branches audited by us and those audited by other auditors have been selected by the Bank in accordance with guidelines issued to the Bank by the Reserve Bank of India.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulations Act, 1949 as well as Companies Act, 2013 (the ''Act'') in the manner so required for banking companies and give a true and fair view in conformity with the Accounting Standards prescribed under section 133 of the Act read with the Companies(Accounting Standards) Rules, 2006, as amended ("Accounting Standards") as applicable to banks and other the accounting principles generally accepted in India, of the state of affairs of the Bank as at 31st March, 2022, and Profit and its Cash Flows for the year ended on that date.

Basis of Opinion

We conducted our audit of the Financial Statements in accordance with the Standards on Auditing (''SAs'') specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s 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 the ethical requirements that are relevant to our audit of the Financial Statements under the provisions of the Act and the rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements of the current year ending March 31, 2022. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters

How our Audit procedures addressed the Key Audit Matters

A. Income Recognition, Asset Classification and Provisioning (IRACP) on Loans & Advances (Reference to Schedule 9 read with Statement of Accounting Policies Note 6 - Schedule to the Financial Statements) Loans and Advances constitute the largest class of Assets forming 65.59% of the total assets of the Bank as on the year ended 31st March 2022. The income recognition, asset classification and provisioning on advances done by the bank is governed by the directives / regulations issued by

Our audit procedures were focused on ensuring compliance with the income recognition, asset classification and provisioning norms as stipulated by RBI. We have also obtained an understanding of the inbuilt controls in the IT systems including CBS, controls with respect to compliance with RBI guidelines, and the Bank''s policies for identification and provisioning of non-performing loans & advances, and planned our audit accordingly. We have performed audit procedures for income recognition, classification into performing and

Key Audit Matters	How our Audit procedures addressed the Key Audit Matters
the Reserve Bank of India (RBI). The loans and advances are accounted in the Core Banking Solution (CBS) and the identification of nonperforming loans and advances is system driven and in accordance with IRACP norms. The management also relies on independent external valuations, legal advice, other professional inputs and makes estimates and judgments to determine the income recognition, asset classification and provisioning for losses on loans and advances.	non performing advances in respect of the top 20 branches allotted to us. We have reviewed the system and manual controls over the timely recognition of non-performing advances (NPA). We have performed test checks on the identification and provisioning of non-performing advances in accordance with RBI guidelines. We have also reviewed the periodic valuation of collateral for NPAs. We have also relied on the work performed by the branch auditors selected by the Bank, and also relied on the reports of internal audit, systems audit, concurrent audit, other audits, work done by lawyers, legal experts, independent valuers and other professionals, in accordance with SA 600 "Using the Work of Another Auditor and SA 620 "Using the Work of an Auditor''s Expert"
Valuation of Financial Instruments (Investments) (Reference to Schedule 8 read with Statement of Accounting Policies Note 5 - Schedule to the Financial Statements) Investments are classified into ''Held for Trading'' (''HFT''), Available for Sale'' (''AFS'') and ''Held to Maturity'' (''HTM'') categories at the time of purchase. Investments classified as HTM are carried at amortized cost and investments classified as AFS and HFT are marked-to-market on a periodic basis as per the RBI guidelines. Accordingly, our audit was focused on checking the valuation of investments as a key audit matter because of the management judgement involved in determining the value of investments based on the policy of the Bank, impairment assessment for HTM book and the overall impact on the financial statements of the Bank.	Our audit approach/procedures towards Investments with reference to the RBI Circulars/directives included the understanding of internal controls, Bank''s Policies and substantive audit procedures in relation to valuation, classification, identification of non-performing investments (NPIs) and provisioning/ depreciation related to Investments. In particular, the appropriateness of the valuation methodology and test checking the inputs used such as pricing, measure of volatility and discount factors. We assessed and evaluated the process adopted for collection of information from various sources for determining market value of the investments and examined the adequacy and appropriateness of depreciation and impairment of each category of Investment. We assessed and evaluated the process of identification of NPIs and corresponding reversal of income and recomputed the provision to ensure that it is in accordance with RBI circular. We tested the mapping of investments between the Treasury application software and the Core banking Solutions software to ensure compliance with the presentation and disclosure requirements as per the aforesaid RBI Circular/directions.

Key Audit Matters

How our Audit procedures addressed the Key Audit Matters

C. Information Technology (''IT'') Systems and Controls for financial reporting The IT environment of the Bank is complex and involves a large number of, independent and interdependent IT systems used in the operations of the Bank for processing and recording a large volume of transactions at numerous locations. We have identified ''IT systems and controls'' as key audit matter because of the level of process automation, large volume of automated transactions, level of cyber security established by the management and the complexity of the IT architecture of the Bank.

We tested the design and operating effectiveness of the Bank''s IT access controls over the information systems that are critical to financial reporting. We tested a sample of assessment in the areas of applications, databases and operating systems that are relevant to our audit in the fields of Core Banking Solutions (CBS) and Treasury Systems. This included testing the integrity of system interfaces, the completeness and accuracy of data feeds, system reconciliation controls and automated calculations. We have adopted various techniques such as enquiry, review of documentation, review of record and reports, observation, and the performance of various application controls by taking adequate samples of instances for our test. We tested compensating controls and performed alternate procedures wherever necessary.

Information Other than the Financial Statements and Auditors'' Report Thereon

The Bank''s Board of Directors is responsible for the other information. The other information comprises the Chairman''s Statement, CSR initiatives, Director''s Report, Annexures to Director''s Report, Shareholders Information, Business Responsibility Report, Corporate Governance Report, Management Discussions & Analysis Report, List of Branches, Basel III Disclosures, Decade of Progress included in the Bank''s Annual report, but does not include the financial statements and our auditors'' report thereon.

Our opinion on the financial statements does not cover the other information and the Basel III Disclosures, and accordingly, we will not express any form of assurance and conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information 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 to be materially misstated. When we read the Other Information of the Bank, including annexures in annual report, if any, thereon, if we conclude that there is a material misstatement therein, we are required to communicate the matter to "Those charged with governance".

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

The Bank''s Board of Directors is responsible for the matters stated in Section 134 (5)of the Act with respect to the preparation of these 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 specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to the Bank and provisions of Section 29 of the Banking Regulation Act,1949 and the circulars and guidelines issued by 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, the Management and Board of Directors are 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.

The respective Board of Directors are also responsible for overseeing the Bank''s financial reporting process.

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 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 Standards, 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.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3](i] of the Act, we are also responsible for expressing our opinion on whether the Bank has adequate internal financial controls with reference to the financial statement are in place and the operating effectiveness of such controls.

• 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 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.

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 year ending March 31st 2022, 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.

Report on Other Legal and Regulatory Requirements

The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 133 of the Companies Act,2013 read with the Rule 7 of the Companies (Accounts) Rules,2014.

1. As required sub section (3) of section 30 of the Banking Regulation Act,1949,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; and

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

2. Further, as required by Section 143(3) of the

Companies Act,2013, we report that;

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) 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 were adequate for the purposes of our audit have been received from offices and branches not visited by us;

(c) The reports on the accounts of the offices and branches audited by other branch auditors of the Bank under Section 143(8) of the Companies Act, 2013 have been sent to us and have been properly dealt with by us in preparing this report;

(d) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from the offices and branches not visited by us;

(e) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014 to the extent

they are not inconsistent with the Accounting Policies prescribed by Reserve Bank of India;

(f) On the basis of the written representations received from the directors as on 31stMarch, 2022 taken on record by the board of directors, none of the directors is disqualified as on 31stMarch,2022 from being appointed as a director in terms of section 164 (2) of the Act;

(g) with respect to the adequacy of the internal financial controls over financial reporting of the Bank with reference to these Financial Statement and the operating effectiveness of such controls, refer to our separate Report in "Annexure A "to this report; and

(h) In our opinion, the entity being a Banking Company, the remuneration to its Directors during the year ended March 31, 2022, has been paid/provided by the Bank in accordance with the provisions of Section 35B(1) of the Banking Regulation Act 1949, and;

(i) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014, as amended in our opinion and to the best of our information and according to the explanations given to us;

(i) The bank has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note 16 (14) to the financial statements;

(ii) The bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses if any, on long-term contracts including derivative contracts- Refer Note 14 (e) to the financial statements; and

(iii) There has been no delay in transferring the funds to the Investor Education and Protection Fund Account by the Bank.

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Mar 31, 2018

Report on the Financial Statements

1. We have audited the accompanying financial statements of City Union Bank Limited (the ‘Bank’), which comprise the Balance Sheet as at 31^st March, 2018, the Profit & Loss Account, and the Cash Flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Incorporated in these financial statements are the return of 14 branches and office audited by us and 590 branches & offices audited by branch statutory auditors. The branch audited by us and those audited by other auditors have been selected by the Bank in accordance with guidelines issued to the Bank by the Reserve Bank of India.

Management’s Responsibility for the Financial Statements

2. The Bank’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the “Act”) with respect to the preparation of these 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 provisions of Section 29 of the Banking Regulation Act, 1949 accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to the Bank 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 the design, implementation and maintenance of adequate internal financial control 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.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

5. We conducted our audit of the Bank in accordance with Standards on Auditing (the “Standards”) issued by the Institute of Chartered Accountants of India, as specified under Section 143 (10) of the Act. 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 of material misstatements.

6. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments the auditor considers internal financial control relevant to the Bank’s preparation of the financial statements that give a true and fair view 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 the Management, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the notes thereon give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013 in the manner so required for the banking companies and give a true and fair view in conformity with accounting principles generally accepted in India, of the state of affairs of the Bank as at 31^st March, 2018, and its profit and its cash flows for the year then ended.

Report on other legal and regulatory requirements

9. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 read with the Rule 7 of the Companies (Accounts) Rules, 2014.

10. As required by Sub Section (3) of Section 30 of the Banking Regulation Act,1949 and the appointment letter dated 28^th August, 2017, 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; and

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

11. Further, as required by Section 143(3) of the Companies Act, 2013, we report that;

i. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii. 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;

iii. The reports on the accounts of the offices and branches audited by other branch auditors of the Bank under Section 143(8) of the Companies Act, 2013 have been sent to us and have been properly dealt with by us in preparing this report;

iv. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from the branches;

v. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent they are not inconsistent with the Accounting Policies prescribed by Reserve Bank of India;

vi. On the basis of the written representations received from the directors as on 31^st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

vii. with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in “Annexure A” to this report; and

viii. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us;

a) The Bank disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 12.1 to the financial statements;

b) The Bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long - term contracts including derivative contracts - Refer Note 10.1 to the financial statements; and

c) There has been no delay in transferring the funds to the Investor Education and Protection Fund Account by the Bank.

d) The disclosures required on holdings as well as dealing in Specified Bank Notes during the period from 8^th November, 2016 to 30^th December, 2016 as envisaged in notification G.S.R. 308(E) dated 30^th March, 2017 issued by the Ministry of Corporate Affairs is not applicable to the Bank.

For Sundaram & Srinivasan

Chartered Accountants

(Firm No.004207S)

P. Menakshi Sundaram

Place: Chennai Partner

Date : 24^th May, 2018 M. No.217914

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Mar 31, 2017

Report on the Standalone Financial Results

1. We have audited the accompanying standalone annual financial statements of City Union Bank Limited (''the Bank''), which comprise the Balance Sheet as at 31^st March, 2017, the Profit & Loss Account and the Cash Flow statement for the year then ended and a summary of significant accounting policies and notes to the standalone financial statements.

Management''s Responsibility for the Standalone Financial Statements

2. The Bank''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the "Act") 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 provisions of Section 29 of the Banking Regulation Act, 1949 accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to the Bank and the guidelines issued by the Reserve Bank of India. 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 the design, implementation and maintenance of adequate internal financial control 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.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143 (10) of the Act. 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 auditor''s judgment including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments the auditor considers internal financial control relevant to the bank''s preparation of the financial statements that give a true and fair view 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 the Bank''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

5. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements together with the notes thereon give the information required by the Banking Regulation Act,1949 as well as the Companies Act, 2013 in the manner so required for the Banking Companies and give a true and fair view of the state of affairs of the Bank as at 31^st March, 2017, its profit and its cash flows for the year ended on that date.

Report on other legal and regulatory requirements

6. The Balance Sheet and the Profit & Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 read with the Rule 7 of the Companies (Accounts) Rules, 2014.

7. As required sub section (3) of Section 30 of the Banking Regulation Act,1949 and the appointment letter dt. 26^th August, 2016, 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; and

(c) The financial results incorporate the relevant returns of 5 branches / offices of the Bank audited by us and 548 branches / offices audited by the other auditors, specially appointed for this purpose.

8. Further, as required by Section 143(3) of the Companies Act, 2013, we further report that;

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) 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;

(c) The Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the Directors as on 31^st March, 2017 taken on record by the Board of Directors, none of the Directors is disqualified as on 31^st March, 2017 from being appointed as a Director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls, refer to our separate Report in "Annexure 1" to this report; and

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us;

i. The Bank disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 12.1 to the standalone financial statements;

ii. The Bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long-term contracts including derivative contracts - Refer Note 10.1 to the standalone financial statements; and

iii. There has been no delay in transferring the funds to the Investor Education and Protection Fund Account by the Bank.

For M/s. P. Chandrasekar

Chartered Accountants

(Firm No. 000580 S)

P. Chandrasekaran

Place: C hennai Partner

Date : 29^th May, 2017 M.No. : 26037

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Mar 31, 2015

1. We have audited the accompanying financial statements of City Union Bank Limited (herein after referred to as "the Bank"), which comprise the Balance Sheet as at 31st March, 2015, the Profit and 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 4 branches / offices and Central Office of the Bank audited by us and 473 branches / offices audited by branch auditors.

Management''s Responsibility for the Financial Statements

2. The Bank''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these 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 specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and Auditing Standards and matters which are required to be included in the Audit Report under the provisions of the Act and the Rules made thereunder.

5. We conducted our Audit in accordance with the Standards on Auditing specified u/s 143(10) of the Companies Act, 2013. 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Bank''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Bank has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Bank''s Directors, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the accounting policies and notes thereon give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013, in the manner so required for the Banking Companies and give a true and fair view in conformity with accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March, 2015;

(ii) in the case of the Profit & Loss Account of the profit for the year ended on that date; and

(iii) in the case of the Cash flow Statement, of Cash flows for the year ended on that date.

Report on Other Legal and Regulatory Matters

9. The Balance Sheet and the Statement of Profit and Loss have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 and Rule 7 of the Companies (Accounts) Rules, 2014.

10. As required by sub - section (3) of Section 30 of the Banking Regulation Act, 1949, 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.

11. Further, as required by Section 143 (3) of the Companies Act, 2013, we report that:

(i) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

(ii) In our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our examination of those books.

(iii) The reports on the accounts of the branch offices audited by the branch auditors of the Bank under Section 143(8) of the Companies Act, 2013 have been sent to us and have been properly dealt with by us in preparing this report.

(iv) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by us in the Report are in agreement with the books of account.

(v) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

(vi) On the basis of the written representations received from the directors as on 31st March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2015 from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013.

(vii) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The bank has disclosed the impact of pending litigation on its financial position in its financial statements - Refer 12.1 in Notes of Accounts;

b. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Bank.

For M/s. P. Chandraseker Chartered Accountants (Firm No. 000580S)

Lakshmy. C Place: C hennai Partner Date : 23rd May, 2015 M.No. : 28508

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Mar 31, 2014

1. We have audited the accompanying financial statements of City Union Bank Limited, which comprise the Balance Sheet as at 31st March, 2014 and the statements of Profit and Loss and Cash Flow statement for the year then ended and a summary of significant accounting policies and other explanatory information. Incorporated in these financial statements are the returns of 3 branches and Central Office audited by us and 424 branches/offices audited by branch auditors.

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 and Accounting Standards notified under the Companies Act, 1956 ("this Act") read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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 error.

Auditor''s Responsibility:

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 misstatements.

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 auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating 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.

Opinion:

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the accounting policies and notes thereon give the information required by the Banking Regulation Act, 1949 as well as Companies Act, 1956, in the manner so required for the banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March,2014;

(ii) in the case of the Profit and Loss Account of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of cash flows for the year ended on that date.

Emphasis of Matter

7. Without qualifying our opinion, we draw attention to:

Note 9 of the financial statements, which describes the accounting treatments of the expenditure on creation of Deferred Tax Liability of Rs. 30.25 crore on Special Reserve under Section 36(1) (viii) of the Income Tax Act, 1961 as at 31st March 2013, pursuant to RBI''s Circular No. DBOD No.BO.BC.77/21.04.018/2013-14 dated 20th December 2013.

Report on Other Legal and Regulatory matters:

8. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956.

9. Subject to the limitations and the audit indicated in paragraph 1 to 5 above, 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.

10. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the Accounting Statement notified under the Companies Act, 1956 read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

11. We further report that:

(i) the Balance Sheet and Profit and Loss Account dealt with by this report, are in agreement with the books of account and the returns;

(ii) in our opinion, proper books of accounts as required by law have been kept by the Bank so far as appears from our examination of those books;

(iii) the reports on the accounts of the branches audited by branch auditors have been dealt with in preparing our report in the manner considered necessary by us;

(iv) as per information and explanation given to us, the Central Government has, till date, not prescribed any cess payable under section 441A of the Companies Act, 1956;

(v) on the basis of the written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For M/s. P. Chandrasekar

Chartered Accountants

(Firm No. 000580 S)

Lakshmy.C

Place: Chennai Partner

Date : 26th May, 2014 M.No. : 28508

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Mar 31, 2013

Report on the Financial Statements:

1. We have audited the accompanying financial statements of City Union Bank Limited as at 31st March 2013, which comprises the Balance Sheet as at 31st March 2013; the Profit and Loss Account and the Cash Flow Statement for the year then ended; and a summary of significant Accounting Policies and other explanatory information. Incorporated in these financial statements are the returns of 3 branches audited by us and balance 372 branches and 3 offices 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 by the Reserve Bank of India.

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 misstatements, whether due to fraud or error.

Auditor''s Responsibility:

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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 the management, as well as evaluating 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.

Opinion:

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the accounting policies and notes thereon, give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in the manner so required for the banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March, 2013;

(ii) in the case of the Profit and Loss Account, of the profits for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of cash flows for the year ended on that date.

Report on other legal and Regulatory requirements:

7. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of section 29 of the Banking Regulation Act, 1949 read with section 211 of the Companies Act, 1956;

8. Subject to the limitations of the audit indicated in paragraph 1 to 5 above, 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.

9. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

10. We further report that:

(i) the Balance Sheet and Profit and Loss account dealt with by this report are in agreement with the books of accounts and returns;

(ii) in our opinion, proper books of accounts as required by law have been kept by the bank so far as appears from our examination of those books;

(iii) the reports on the accounts of the branches audited by branch auditors have been dealt with in preparing our report in the manner considered necessary by us;

(iv) as per information and explanation given to us the Central Government has, till date, not prescribed any cess payable under section 441A of the Companies Act., 1956.

(v) on the basis of the written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For Jagannathan & Sarabeswaran

Chartered Accountants

(Firm No. 001204 S)

P.S. Narasimhan

Place: Chennai Partner

Date : 20th May, 2013 M.No. : 020936

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Mar 31, 2012

We have audited the attached Balance Sheet of city union bank limited, Kumbakonam as at 31st March, 2012, the Profit and Loss Account and Cash Flow Statement of the Bank for the year ended on that date annexed thereto, in which are incorporated returns of 4 branches and Central Office, audited by us and 298 branches / offices audited by the Branch Auditors. The Balance Sheet and Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956 in form 'A' & 'B' respectively of Third Schedule to the Banking Regulation Act, 1949. These financial statements are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

On the basis of our audit and having regard to the report on the accounts of branches / offices audited by the other auditors, which have been considered by us, 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) In our opinion, the Bank has maintained proper books of accounts as required by law in so far as it appears from our examination of those books.

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

(d) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the branch returns.

(e) The transactions of the Bank, which have come to our notice, have been, in our opinion, within the powers of the Bank.

(f) In our opinion, the accompanying financial statements dealt with by this report comply with the Accounting Standards referred to in sub-section 3(c) of Section 211 of the Companies Act, 1956, to the extent they are not inconsistent with the accounting policies prescribed by the Reserve Bank of India.

(g) The reports on the accounts of the branches audited by branch auditors have been dealt with in preparing our report in the manner considered necessary by us.

(h) As per the information and explanations given to us, the Central Government has, till date, not prescribed any cess payable under Section 441A of the Companies Act, 1956.

(i) According to the information and explanations given to us and on the basis of the written representations, received from the Directors of the Bank and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 and

(j) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement together with the notes thereon give the information required by the Banking Regulation Act, 1949, as well as the Companies Act, 1956, in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India.

(i) in case of Balance Sheet, of the state of affairs of the Bank as at 31st March, 2012.

(ii) in case of the Profit and Loss account, of the profit of the Bank for the year ended 31st March, 2012 and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Bank for the year ended 31st March, 2012.

For Jagannathan & Sarabeswaran

Chartered Accountants

(Firm No. 001204 S)

P.S. Narasimhan

Place: Chennai Partner

Date : 18th May, 2012 M.No. : 020936

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Mar 31, 2011

We have audited the attached Balance Sheet of City Union Bank Limited, Kumbakonam as at 31st March, 2011, the Profit and Loss Account and Cash Flow Statement of the Bank for the year ended on that date annexed thereto, in which are incorporated returns of 6 branches and Central Office, audited by us and 242 branches / offices audited by the Branch Auditors. The Balance Sheet and Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956 in form 'A' & 'B' respectively of Third Schedule to the Banking Regulation Act, 1949. These financial statements are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

On the basis of our audit and having regard to the report on the accounts of branches/offices audited by the other auditors, which have been considered by us, 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) In our opinion, the Bank has maintained proper books of accounts as required by law in so far as it appears from our examination of those books.

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

(d) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the branch returns.

(e) The transactions of the Bank, which have come to our notice, have been, in our opinion, within the powers of the Bank.

(f) In our opinion, the accompanying financial statements dealt with by this report comply with the Accounting Standards referred to in sub-section 3(c) of Section 211 of the Companies Act, 1956, to the extent they are not inconsistent with the accounting policies prescribed by the Reserve Bank of India.

(g) The reports on the accounts of the branches audited by branch auditors have been dealt with in preparing our report in the manner considered necessary by us.

(h) As per the information and explanations given to us, the Central Government has, till date, not prescribed any cess payable under Section 441A of the Companies Act, 1956.

(i) According to the information and explanations given to us and on the basis of the written representations, received from the Directors of the Bank and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 and

(j) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement together with the notes thereon give the information required by the Banking Regulation Act, 1949, as well as the Companies Act, 1956, in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India.

(i) in case of Balance Sheet, of the state of affairs of the Bank as at 31st March, 2011.

(ii) in case of the Profit and Loss account, of the profit of the Bank for the year ended 31st March, 2011 and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Bank for the year ended 31st March, 2011.

For Jagannathan & Sarabeswaran

Chartered Accountants

(Firm No. 001204 S)

P.S. Narasimhan

Place: Chennai Partner

Date : 27th May, 2011 M.No. : 020936

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Mar 31, 2010

We have audited the attached Balance Sheet of City Union Bank Limited, Kumbakonam as at 31st March, 2010, the Profit and Loss Account and Cash Flow Statement of the Bank for the year ended on that date annexed thereto, in which are incorporated returns of 5 branches and Central Office, audited by us and 218 branches/ offices audited by the Branch Auditors. The Balance Sheet and Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956 in form A & B respectively of Third Schedule to the Banking Regulation Act, 1949. These financial statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

On the basis of our audit and having regard to the report on the accounts of branches/offices audited by the other auditors, which have been considered by us, 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) In our opinion, the Bank has maintained proper books of accounts as required by law in so far as it appears from our examination of those books.

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

(d) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the branch returns.

(e) The transactions of the Bank, which have come to our notice, have been, in our opinion, within the powers of the Bank.

(f) In our opinion, the accompanying financial statements dealt with by this report comply with the Accounting Standards referred to in sub-section 3(C) of Section 211 of the Companies Act, 1956, to the extent they are not inconsistent with the accounting policies prescribed by the Reserve Bank of India.

(g) The reports on the accounts of the branches audited by branch auditors have been dealt with in preparing our report in the manner considered necessary by us.

(h) As per the information and explanations given to us, the Central Government has, till date, not prescribed any cess payable under Section 441A of the Companies Act, 1956.

(i) According to the information and explanations given to us and on the basis of the written representations, received from the Directors of the Bank and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 and

(j) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement together with the notes thereon give the information required by the Banking Regulation Act, 1949, as well as the Companies Act, 1956, in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India.

(i) in case of Balance Sheet, of the state of affairs of the Bank as at 31st March, 2010.

(ii) in case of the Profit and Loss account, of the profit of the Bank for the year ended 31st March, 2010 and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Bank for the year ended 31st March, 2010.

For Jagannathan & Sarabeswaran Chartered Accountants Place: Kumbakonam N. Rangan Date : 26th May, 2010 Partner M.No. : 12190