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Auditor Report of Vijaya Bank

Mar 31, 2015

1. We have audited the accompanying financial statements of Vijaya Bank as at 31st March, 2015, which comprise the Balance Sheet as at March 31, 2015, and 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 20 branches audited by us and 600 branches 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 to the Bank by the Reserve Bank of India. Also incorporated in the Balance Sheet and the Profit and Loss account are the returns from 998 branches which have not been subjected to audit. These unaudited branches account for 7 per cent of advances, 33 per cent of deposits, 34 per cent of interest income and 26 per cent of interest expenses.

Management''s Responsibility for the Financial Statements.

2. Management is responsible for the preparation of these financial statements in accordance with Banking Regulation Act, 1949 and Companies (Accounting Standards) Rules, 2006 read with the significant accounting policies of the Bank. 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 misstatement. SA 299 on "Responsibility of Joint Auditors - Para 2 and 3 on Division of work", states that the joint auditors shall mutually decide upon the allocation of work amongst themselves and communicate to the entity. The allocation of work in the current year was made by the management of the bank without consulting the Joint Auditors. Management contends that the said allocation has been made in terms of appointment letter of RBI.

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, as shown by books of the Bank, and to the best of our information and according to the explanations given to us:

(i) the Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank as at 31st March 2015 in conformity with accounting principles generally accepted in India;

(ii) the Profit and Loss Account, read with the notes thereon shows a true balance of profit, in conformity with accounting principles generally accepted in India, for the year covered by the account; and

(iii) the Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

7. Emphasis of Matter

Without qualifying our opinion, we draw attention to the following:

(i) Provision has not been made for Rs 230 crores on account of Deferred Tax Liability arising out of timing differences in HTM category investments as explained in Note No. 8(xii)(b).

(ii) Note 8(vi) to the financial statements, which states that the Bank has made a provision of Rs.208 crores towards increase in salaries arising out of 10th bipartite settlement with the Employee Union, but no specific provision has been made towards consequential increase in gratuity, pension and compensated absences liability, in the absence of the details of the increase under various components of salaries which is under discussion/determination. The amount of additional provision is indeterminate. The bank contends that the salary increase considered in actuarial valuation is sufficient to cover this increase also.

(iii) Note 8(vii) to the financial statements, which describes the charge of last instalment of pension and gratuity liability of Rs. 119 crores for the current year, pursuant to the exemption granted by the Reserve Bank of India to the public sector banks from application of the provisions of Accounting Standard AS-15, Employee Benefits vide its circular no. DBOD. BRBC/80/21.04.018/2010-11 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits - Prudential Regulatory Treatment. There is no further amount carried forward for charging in future periods.

Report on Other Legal and Regulatory Requirements

8. The Balance Sheet and the Profit and Loss Account have been drawn up in Forms "A" and "B" respectively of the Third Schedule to the Banking Regulation Act, 1949.

9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, and subject also to the limitations of disclosure required therein, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the 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 except with regard to savings bank accounts opened in respect of Government Departments and Body Co rpo rates.

(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 applicable accounting standards.

For M/s KARRA & CO. For M/s N C MITTAL & CO. Chartered Accountants Chartered Accountants Registration No: 001749S Registration No: 000237N

K.PREMKUMAR [N C MITTAL] Partner Partner Membership No:019170 Membership No:14213 For M/s KPMC & ASSOCIATES For M/s PKF SRIDHAR & SANTHANAM Chartered Accountants LLP

Registration No: 05359C Chartered Accountants Registration No: 003990S/S200018

[SAN J AY MEHRA] [S RAJESHWARI ] Partner Partner Membership No:075488 Membership No:024105

Place : Bengaluru Date : 12.05.2015


Mar 31, 2014

1. We have audited the accompanying financial statements of Vijaya Bank, which comprise the Balance Sheet as at 31st March, 2014 and 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 20 branches audited by us and 567 branches 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 to the Bank by the Reserve Bank of India. Also incorporated in the Balance Sheet and the Profit and Loss Account are the returns from 925 branches which have not been subjected to audit. These unaudited branches account for 7.29% of advances, 37.09% of deposits, 34.07% of interest income and 38.55% of interest expenses.

Management Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements, in accordance with Banking Regulation Act, 1949 and Companies (Accounting Standards) Rules, 2006, read with the Significant Accounting Policies of the Bank. 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 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 Company''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, as shown by books of bank and to the best of our information and according to the explanations given to us :

i) The Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank as at 31st March 2014, in conformity with accounting principles generally accepted in India;

ii) The Profit and Loss Account read with the notes thereon shows a true balance of profit, in conformity with accounting principles generally accepted in India, for the year covered by the account; and

iii) The Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

7. Emphasis of Matter

Without qualifying our opinion, we draw attention to

(i) Note 7 (vi) to the financial statements, which describes deferment of pension and gratuity liability of the Bank to the extent of Rs.119 crores as on 31st March 2014 pursuant to the exemption granted by the Reserve Bank of India to the public sector banks from application of the provisions of Accounting Standard AS-15, Employee Benefits vide its circular no. DBOD. BP.BC/80/21.04.018/2010-11 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits - Prudential Regulatory Treatment." Had such a circular not been issued by RBI, the reserves of the Bank would have been lower by Rs.119 crores pursuant to application of the requirement of AS-15 with the consequential effect on the current assets to the above extent.

(ii) Note 7 (xi) (b) to the financial statements, which describes the accounting treatment of the expenditure on creation of Deferred Tax Liability 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.BP.BC.77/21.04.018/2013-14 dated 20th December 2013.

Report on Other Legal and Regulatory Requirements

8. The Balance Sheet and the Profit and Loss Account have been drawn up in Forms ''A'' and ''B'' respectively of the Third Schedule to the Banking Regulation Act, 1949.

9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 and subject also to the limitations of disclosure required therein, we report that:

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

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 applicable accounting standards.

For M/s MUKUND M CHITALE & CO For M/s KARRA & CO. Chartered Accountants Chartered Accountants Registration No: 106655W Registration No: 001749S

[ABHAY V. KAMAT] [R SUNDAR]

Partner Partner

Membership No:39585 Membership No:22448

For M/s N C MITTAL & CO. For M/s KPMC & ASSOCIATES

Chartered Accountants Chartered Accountants

Registration No: 000237N Registration No: 05359C

[N C MITTAL] [SANJAY MEHRA]

Partner Partner

Membership No:14213 Membership No:075488

Place : Bengaluru

Date : 06.05.2014


Mar 31, 2013

1. We have audited the accompanying financial statements of Vijaya Bank, which comprise the Balance Sheet as at 31st March, 2013 and 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 20 branches audited by us and 485 branches audited by branch auditof The branches audited by us and those audited by other auditors have been selected by the Bank in accordance with the guidelines issued to the Bank by the Reserve Bank of India. Also incorporated in the Balance Sheet and the Profit and Loss Account are the returns from 854 branches which have not been subjected to audit. These unaudited branches account for 6.51% of advances, 38.53% ofdeposits, 35.35% of interest income and 55.21% of interest expenses.

Management Responsibilityfor the Financial Statements

2. Management is responsible for the preparation of these financial statements, in accordance with Banking Regulation Act, 1949 and Companies (Accounting Standards) Rules, 2006, read with the Significant Accounting Policies ofthe Bank. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation ofthe 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 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 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 Company''s preparation and fair presentation ofthe 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 management, as well as evaluating the overall presentation ofthe 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, as shown by books of bank and to the best of our information and according to the explanations given to us :

i) The Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank as at 31st March, 2013, in conformity with accounting principles generally accepted in India;

ii) The Profit and Loss Account read with the notes thereon shows a true balance of profit, in conformity with accounting principles generally accepted in India, for the year covered by the account; and

iii) The Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date. Emphasis of Matter

7. Without qualifying our opinion, we draw attention to Note 7 (v) of Schedule 18 to the financial statements, which describes deferment of pension and gratuity liability ofthe bank to the extent of Rs. 238 crores as on 31st March 2013 pursuant to the exemption granted by the Reserve Bank of India to the public sector banks from application of the provisions of Accounting Standard (AS) 15, Employee Benefits vide its circular no. DBOD. BP.BC/80/21.04.018/2010-11 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits - Prudential Regulatory Treatment. Had such a circular not been issued by RBI, the reserves of the Bank would have been lower by Rs. 238 crores pursuant to application ofthe requirement of AS-15with the consequential effect on the current assets to the above extent.

Report on Other Legal and Regulatory Requirements

8. The Balance Sheet and the Profit and Loss Account have been drawn up in Forms ‘A'' and ‘B'' respectively of the Third Schedule to the Banking Regulation Act, 1949.

9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 and subject also to the limitations of disclosure required therein, we report that:

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

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 applicable accounting standards.

For M/s CONTRACTOR, For M/s S VISWANATHAN For M/s RAO ASSOCIATES

NAYAK&KISHNADWALA Chartered Accountants Chartered Accountants

Chartered Accountants Registration No: 004770S Registration No: 003080S

Registration No: 101961W

[MANISH SAMPAT] [C N SRINIVASAN] [G SUDHINDRA]

Partner Partner Partner

Membership No:101684 Membership No:18205 Membership No:26171

For M/s MUKUND M CHITALE & CO For M/s N C MITTAL & CO For M/s KARRA & CO

Chartered Accountants Chartered Accountants Chartered Accountants

Registration No:106655W Registration No: 000237N Registration No: 001749S

[ABHAY VKAMAT] [N.C. MITTAL] [R SIVAKUMAR]

Partner Partner Partner

Membership No:39585 Membership No:14213 Membership No:19834

Place : Bangalore

Date : 26th April 2013


Mar 31, 2012

1) We have audited the attached Balance Sheet of Vijaya Bank as at 31st March, 2012 and also the Profit and Loss Account and the Cash Flow Statement annexed thereto for the year ended on that date in which are incorporated the returns of 20 branches audited by us and 931 branches 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 to the Bank by the Reserve Bank of India. Also incorporated in the Balance Sheet and the Profit and Loss Account are the returns from 349 branches which have not been subjected to audit. These unaudited branches account for 5.26% of advances, 29.82% of deposits, 1.76% of interest income and 29.10% of interest expenses. 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.

2) We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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.

3) The Balance Sheet and the Profit and Loss Account have been drawn up in Forms 'A' and 'B' respectively of the Third Schedule to the Banking Regulation Act, 1949.

4) Subject to the limitations of the audit indicated in paragraph 1 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 and subject also to the limitations of disclosure required therein, we report that:

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

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

5) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards.

6) Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 7 (v) to the financial statements, which describes deferment of pension and gratuity liability of the bank to the extent of Rs 357 crores as on 31st March 2012 pursuant to the exemption granted by the Reserve Bank of India to the public sector banks from of application of the provisions of Accounting Standard (AS) 15, Employee Benefits vide its circular no. DBOD. BP.BC/80/21.04.018/2010-11 on Re- opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits - Prudential Regulatory Treatment. .'' Had such a circular not been issued by RBI, the reserves of the Bank would have been lower by Rs 357 crores pursuant to application of the requirement of AS-15 with the consequential effect on the current assets to the above extent.

7) In our opinion, as shown by books of bank and to the best of our information and according to the explanations given to us.

i) The Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank as at 31st March, 2012, in conformity with accounting principles generally accepted in India;

ii) The Profit and Loss Account read with the notes thereon shows a true balance of profit, in conformity with accounting principles generally accepted in India, for the year covered by the account; and

iii) The Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

For M/s M.P. CHITALE & CO For M/s P. CHANDRASEKAR For M/s CONTRACTOR

Chartered Accountants Chartered Accountants NAYAK & KISHNADWALA

Registration No: 101851W Registration No: 000580S Chartered Accountants

Registration No: 101961W

[ULHAS CHITALE] [LAKSHMYC.] [MANISH SAMPAT]

Partner Partner Partner

Membership No: 032292 Membership No: 028508 Membership No:101684

For M/s S. VISWANATHAN For M/s RAO ASSOCIATES For M/s MUKUND M

Chartered Accountants Chartered Accountants CHITALE & CO

Registration No: 004770S Registration No: 003080S Chartered Accountants

Registration No: 106655W

[CHELLAK. RAGHAVENDRAN] [G. SUDHINDRA] [ABHAYV. KAMAT]

Partner Partner Partner

Membership No:208562 Membership No:026171 Membership No:39585

Place : Bangalore

Date : 30.04.2012


Mar 31, 2011

1) We have audited the attached Balance Sheet of Vijaya Bank as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement annexed thereto for the year ended on that date in which are incorporated the returns of 20 branches audited by us and 1007 branches 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 to the Bank by the Reserve Bank of India. Also incorporated in the Balance Sheet and the Profit and Loss Account are the returns from 172 branches which have not been subjected to audit. These unaudited branches account for 0.72% of advances, 26.48% of deposits, 0.50% of interest income and 17.62% of interest expenses. 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.

2) We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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.

3) The Balance Sheet and the Profit and Loss Account have been drawn up in Forms A and B respectively of the Third Schedule to the Banking Regulation Act, 1949.

4) Subject to the limitations of the audit indicated in paragraph 1 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 and subject also to the limitations of disclosure required therein, we report that:

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

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

5) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards..

6) In our opinion, as shown by books of bank and to the best of our information and according to the explanations given to us.

i) The Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank as at 31st March, 2011, in conformity with accounting principles generally accepted in India;

ii) The Profit and Loss Account read with the notes thereon shows a true balance of profit, in conformity with accounting principles generally accepted in India, for the year covered by the account; and

iii) The Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

7) Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 7 (v) to the financial statements, which describes deferment of pension and gratuity liability of the bank to the extent of Rs. 477 crore pursuant to the exemption granted by the Reserve Bank of India to the public sector banks from of application of the provisions of Accounting Standard (AS) 15, Employee Benefits vide its circular no. DBOD. BP.BC/80/21.04.018/2010-11 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits - Prudential Regulatory Treatment."

For M/s R. BANSAL & CO

Chartered Accountants

Registration No: 002736N

[Y.R. SHARMA]

Partner

Membership No:092691

For M/s M.P. CHITALE & CO

Chartered Accountants

Registration No: 101851W

[ULHAS CHITALE]

Partner

Membership No:032292

For M/s P.CHANDRASEKAR

Chartered Accountants

Registration No: 000580S

[LAKSHMY C]

Partner

Membership No:028508

For M/s CONTRACTOR,

NAYAK & KISHNADWALA

Chartered Accountants

Registration No: 101961W

[G.S. NAYAK]

Partner

Membership No:038127

For M/s S VISWANATHAN

Chartered Accouniants

Registration No: 004770S

[CHELLA K. RAGHAVENDRAN]

Partner

Membership No:208562

For M/s RAO ASSOCIATES

Chartered Accountants

Registration No: 003080S

[G SUDHINDRA]

Partner

Membership No:26171

Place : Bangalore

Date : 28.04.2011


Mar 31, 2010

1) We have audited the attached Balance Sheet of Vijaya Bank as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement annexed thereto for the year ended on that date in which are incorporated the returns of 20 branches audited by us and 1018 branches 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 to the Bank by the Reserve Bank of India. Also incorporated in the Balance Sheet and the Profit and Loss Account are the returns from 120 branches which have not been subjected to audit. These unaudited branches account for 0.43% of advances, 1.19% of deposits, 0.40% of interest income and 0.97% of interest expenses. 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.

2) We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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.

3) The Balance Sheet and the Profit and Loss Account have been drawn up in Forms A and B respectively of the Third Schedule to the Banking Regulation Act, 1949.

4) Subject to the limitations of the audit indicated in paragraph 1 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 and subject also to the limitations of disclosure required therein, we report that:

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

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

5) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards.

6) Without qualifying our opinion, we invite attention to :

a) Note No. 12 regarding provision of Rs. 114 crore made for wage arrears on estimated basis.

b) Note No: 13 regarding claims of Rs.36.14 crore from the Govt, of India eligible under the Agricultural Debt. Waiver and Debt Relief Scheme 2008 which is subject to our audit; and

7) In our opinion, as shown by books of bank and to the best of our information and according to the explanations given to us.

i) The Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank as at 31st March, 2010 in conformity with accounting principles generally accepted in India;

ii) The Profit and Loss Account read with the notes thereon shows a true balance of profit, in conformity with accounting principles generally accepted in India, for the year covered by the account; and

iii) The Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

For M/s V.KHANNA & CO. For M/s M.THOMAS & CO. For M/s SHIROMANY For M/s R.BANSAL & CO.

Chartered Accountants Chartered Accountants TYAGI&CO. Chartered Accountants

Registration No: 000200C Registration No: 004408S Chartered Accountants Registration No: 002736N Registration No: 006117N

[V.K.KHANNA] [NIURALIRAMANAN] [PRADEEP TYAGI] [R.S.BANSAL]

Partner Partner Partner Partner

Membership No:008276 Membership No: 080972 Membership No:084840 Membership No: 013000

For M/S M.P.CHITALE & CO. For M/s P.CHANDRASEKAR

Chartered Accountants Chartered Accountants

Registration No: 101851W Registration No: 000580S

[ULHAS CHITALE] [LAKSHMY C]

Partner Partner

Membership No:032292 Membership No:028508

Place : Bangalore Date : 30.04.2010

 
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