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Auditor Report of Union Bank of India

Mar 31, 2023

The Members of Union Bank of India Mumbai

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying Standalone Financial Statements of Union Bank of India (''the Bank''), which comprise the Balance Sheet as at 31st March 2023, the Profit and Loss Account and the Statement of Cash Flows for the year then ended, and notes to financial statements including a summary of significant accounting policies and other explanatory information in which are included the returns for the year ended on that date of

i) Head Office, 20 branches, 1 Treasury Branch, 18 FGM Offices audited by us

ii) 2691 branches audited by statutory branch auditors and

iii) 3 overseas branches audited by local 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 (the RBI). Also incorporated in the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows are the returns from 6406 branches and offices which have not been subjected to audit. These unaudited branches account for 23.82 % of advances, 37.81% of deposits, 17.01 % of interest income and 33.86 % of interest expenses.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Banking Regulation Act, 1949 in the manner so required for bank and are in conformity with accounting principles generally accepted in India and:

a. 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 the state of affairs of the Bank as at 31st March, 2023;

b. the Profit and Loss Account, read with the notes thereon shows a true balance of profit for the year ended on that date; and

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

Basis for Opinion

2. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (the "ICAI"). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the standalone Financial Statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the ICAI together with ethical requirements that are relevant to our audit of the financial statements in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI, and provisions of section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by Reserve Bank of India (''RBI") from time to time and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of the Matter

3. We draw your attention to Note No. 15(b)(ii)(b)(iv)(a) of schedule 18 - Notes to Accounts to the standalone financial statements regarding unamortised part of additional liability on account of revision in family pension carried forward from last year amounting to '' 1521.62 crores, has been fully charged to profit and loss account during the year ended March 31,2023. There is no unamortised expenditure in the Balance Sheet on account of additional family pension.

Our opinion is not modified in respect of these matters.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial 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 prescribed below to be the key audit matters to be communicated in our report.

Sr.

Key Audit Matter

How it was dealt with in our report

Income Recognition, Asset Classification (IRAC) and provisioning on Loans & Advances and Investments as per the regulatory requirements

Loans & Advances and Investments are the largest class of assets forming 85.98% of the total assets as on March 31, 2023. Classification, income recognition and loss provisioning on the same are based on objective parameters as prescribed by the regulations (Reserve Bank of India''s prudential norms and other guidelines). The management of the Bank relies heavily on its IT systems (including Core Banking Solution), exercise significant estimates and judgement, manual interventions, and uses services of experts (like independent valuers, Lawyers, legal experts and other professional) to determine asset classification, income recognition and provisioning for losses.

The Bank has system based identification of nonperforming assets in accordance with IRAC Norms

Our audit was focused on income recognition, asset classification and provisioning pertaining to advances due to the materiality of the balances and associated impairment provisions.

Our audit procedures included the assessment of controls over the approval, disbursements and monitoring of loans, and reviewing the logic and assumptions used in the CBS and other related IT systems for compliance of the IRAC and provisioning norms and its operating effectiveness.

These included evaluation and understanding of following:

â¢ Bank''s internal control system in adhering to the Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances/ investments;

â¢ System controls and manual controls over the timely recognition of non-performing assets (NPA/NPI);

â¢ Operational existence and effectiveness of controls over provisioning calculation models from the IT systems;

â¢ Overall Controls on the loan approval, disbursement and monitoring process in case of advances and controls over the purchase, sale and hold decisions making system in case of investments

â¢ We tested sample of loans/investments (in cases of branches visited by us) to assess whether they had been identified as non performing on a timely manner, income recognized and provisioning made as per IRAC norms.

â¢ We have also reviewed the reliability, effectiveness and accuracy of manual interventions, wherever it has come to our notice, on test check basis.

Sr.	Key Audit Matter	How it was dealt with in our report
		â¢ We have relied on the reports/returns and work done by other Statutory Branch Auditors (SBA) in cases of branches not visited by us to get an overall comfort with respect to overall compliance in accordance with SA 600 - Using the Work of Another Auditor. â¢ We have reviewed the work done by other experts like Independent valuers, Lawyers, Legal Experts and other such professionals who have rendered services to the Bank, in accordance with SA 620 Using the Work of an Auditor''s Expert. â¢ Further we have also reviewed the Bank''s system of monitoring potentially weak and sensitive accounts which show a sign of stress. â¢ We have also reviewed the reports and observations of the Bank''s internal audit/inspection reports and observations of the concurrent auditors for the same. â¢ Verification of valuation, classification, provisioning and income recognition of investments by carrying out substantive test including arithmetic accuracy, data accuracy and control over the financial reporting system. We have test checked and assessed the efficacy of the system based identification of NPA
2	Information Technology (IT) and controls impacting financial reporting
	In the normal course of its business, the Bank''s financial accounting and reporting systems are highly dependent on the effective working of the Core Banking Solution (CBS) and other IT systems linked to the CBS or working independently. Extensive volume, variety and complexity of transactions are processed daily and there is a risk that automated accounting procedures and related internal controls may not be accurately designed and operating effectively. Particular areas of focus relate to the logic that is fed into the system, sanctity and reliability of the data, access management and segregation of duties. These underlying principles are important because they ensure that changes to applications and data are appropriate, authorized, cleansed and monitored, so that the system generates accurate and reliable reports/ returns and other financial and non-financial information that is used for the preparation and presentation of the financial statements. We have relied on the consistent and accurate functioning of CBS and other IT systems for the following: â¢ Asset Classification and Income recognition as per the Reserve Bank of India guidelines; â¢ Provisioning on the advance portfolio;	Our audit procedures included verifying, testing and reviewing the design and operating effectiveness of the IT system by verifying the reports/returns and other financial and nonfinancial information generated from the system on a test check basis. Our audit procedures included: â¢ Ensuring that deficiencies noticed in our verification on test check basis were informed to the management for corrective action; â¢ Carrying out independent alternative audit procedures like substantive testing in areas where deficiencies were noticed; â¢ Analytical procedures like ratio analysis, trend analysis, reasonable tests, comparative analysis; â¢ Reliance on the work performed by the statutory branch auditors and the rectification entries (MOCs) passed based on branch audits; â¢ Reliance on external vendor inspection reports wherever made available. â¢ Reviewed the IS Audit Reports and discussed with IT Department on compliance with key IT controls.

Sr.	Key Audit Matter	How it was dealt with in our report
	â¢ Identification of advances and liability items and its maturity pattern in various brackets; â¢ Reconciliation and ageing of various suspense and sundry accounts, impersonal accounts, inter-branch balances and other such accounts; â¢ Recording Investment transactions â¢ Interest expense on deposits and other liabilities;
3	Recognition and measurement of Deferred tax
	The Bank has recognised a net deferred tax asset of ? 8,65,97,447 (in ''000) as on March 31, 2023. Besides objective estimation, recognition and measurement of deferred tax asset is based on the judgment and numerous estimates regarding the availability and visibility of profits in the future. The recent decrease in the amount of deferred tax assets presumes availability and forecasting of profits over an extended period of time thus decreasing uncertainty and the inherent risk of inappropriate recognition of the said asset.	Our audit procedures included the risk assessment to gain an understanding of the applicable tax laws and relevant regulations applicable to the Bank. Based on our understanding, we performed both tests of related internal key controls and substantive audit procedures with the assistance of tax specialists. We performed the following audit procedures as part of our controls testing including, but not limited to: â¢ Evaluation of the policies used for recognition and measurement of deferred tax assets in accordance with AS 22 Accounting for Taxes on Income; â¢ Assessed the method, assumptions and other parameters used with reference to uniformity, management representations, consistency and continuity like budget and midterm projections prepared by the management including earning growth and applicable tax rates and tested the arithmetical accuracy â¢ Assessed the probability of the availability and visibility of profits against which the bank will be able to use this deferred tax asset in the future.

Information Other than the Standalone Financial Statements and Auditors'' Report thereon

5. The Bank''s Board of Directors is responsible for the other information. The other information comprises the Highlights for the year, Directors'' Report including annexures to Directors'' Report, key financial ratios, Business responsibility Report and Corporate Governance report in the Annual Report, but does not include the standalone financial statements and our auditor''s report thereon, which is expected to be made available to us after the date of this Auditors'' Report.

Our opinion on the standalone financial statements does not cover the Other Information and Pillar 3 disclosures under the Basel III Disclosure and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the Other Information identified above and, in doing so, consider whether the Other Information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the Other Information that we obtained prior to the date of this Auditors'' Report, we conclude that there is a material misstatement of this Other Information, we are required to report that fact. We have nothing to report in this regard.

When we read the other information, 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 Standalone Financial Statements

6. The Bank''s Board of Directors is responsible with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI to the extent applicable, and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (''RBI'') from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

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

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

7. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

â¢ 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.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the bank to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s 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

8. We did not audit the financial statements / information of 2694 branches and offices including 3 foreign branches included in Standalone Financial Results of the Bank whose financial statements/ information reflects total assets of '' 2,66,41,76,397.19 (in thousand) at March 31, 2023 and total revenue of ? 25,17,25,101.73 (in thousand) for the year ended on that date, as considered in the Standalone Financial Results. These branches and offices cover 36.86% of advances, 58.04% of deposits and 48.89% of Non - performing assets as on 31^st March 2023 and 26.39% of revenue for the year ended 31^st March 2023. The financial statements/ information of these branches have been audited by the branch auditors whose reports have been furnished to us and in our opinion in so far as it relates to the amounts and disclosures included in respect of branches, are 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

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

Subject to the limitations of the audit indicated in paragraphs 5 and 8 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, and subject also to the limitations of disclosure required therein, we report that:

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

10. As required by letter No. D0S.ARG.No.6270/08.91.001/2019-20 dated March 17, 2020 on "Appointment of Statutory Central Auditors (SCAs) in Public Sector Banks - Reporting obligations for SCAs from FY 2019-20", read with subsequent communication dated May 19, 2020 issued by the RBI, we further report on the matters specified in paragraph 2 of the aforesaid letter as under:

(a) In our opinion, the aforesaid standalone financial statements comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

(b) In our opinion there are no observations or comments on financial transactions or matters which have any adverse effect on the functioning of the bank.

(c) As the bank is not registered under the Companies Act, 2013 the disqualifications from being a director of the bank under sub-section (2) of Section 164 of the Companies Act, 2013 do not apply to the bank.

(d) There are no qualifications, reservations or adverse remarks relating to the maintenance of accounts and other matters connected therewith.

(e) Our audit report on the adequacy and operating effectiveness of the Bank''s internal financial controls over financial reporting is given in Annexure A to this report. Our report expresses an unmodified opinion on the Bank''s internal financial controls over financial reporting with reference to the Standalone Financial Statements as at 31st March 2023.

11. We further report that:

a) in our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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

c) the reports on the accounts of the branch offices audited by branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report; and

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

For M/s R G N Price & Co. For M/s SARDA & PAREEK LLP For M/s C R Sagdeo & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

FRN 002785S FRN 109262W/W100673 FRN 108959W

CA P. M. Veeramani CA Niranjan Joshi CA Sachin V. Luthra

Partner Partner Partner

Membership No.023933 Membership No.102789 Membership No. 109127

UDIN: 23023933BGVFVB8763 UDIN: 23102789BGWREB5291 UDIN: 23109127BGQVHR6655

For M/s P V A R & Associates For M/s Gopal Sharma & Co. For M/s N B S & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

FRN 005223C FRN 002803C FRN 110100W

CA Ruchi Agarwal CA Abhishek Sharma CA Pradeep J. Shetty

Partner Partner Partner

Membership No. 504134 Membership No. 079224 Membership No. 046940

UDIN:23504134BGWTPP4106 UDIN: 23079224BGTKQO2274 UDIN: 23046940BGPTTS7892

Place of Signature: Mumbai

Date of Report: 06.05.2023

Mar 31, 2022

The Members of Union Bank of India Mumbai

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying Standalone Financial Statements of Union Bank of India (âthe Bank''), which comprise the Balance Sheet as at 31 March 2022, the Profit and Loss Account and the Statement of Cash Flows for the year then ended, and notes to financial statements including a summary of significant accounting policies and other explanatory information in which are included the returns for the year ended on that date of

i) 20 branches, 1 Treasury Branch audited by us, 18 FGMO Offices audited by us

ii) 3413 branches audited by statutory branch auditors and

iii) 3 overseas branches audited by local 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 (the RBI). Also incorporated in the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows are the returns from 5931 branches which have not been subjected to audit. These unaudited branches account for 16.36 percent of advances, 33.74 per cent of deposits, 37.35 per cent of interest income and 37.64 per cent of interest expenses.

b. the Profit and Loss Account, read with the notes thereon shows a true balance of profit for the year ended on that date; and

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

Basis for Opinion

2. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (the "ICAI"). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the standalone Financial Statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the ICAI together with ethical requirements that are relevant to our audit of the financial statements in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI, and provisions of section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by Reserve Bank of India (âRBI") from time to time and we have fulfilled our other

ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of the Matter

3. We draw your attention to Note No. 15.k of schedule 18 - Notes to Accounts to the standalone financial statements regarding change in the accounting policies/estimates followed during the year ended 31^st March, 2022 as compared to those followed in the preceding financial year ended 31^st March, 2021 with effect from 1^st April, 2021, in respect of appropriation of recovery in non performing accounts first towards interest unrealised and then towards principal outstanding as against towards principal first and then towards interest unrealised in earlier periods. Impact due to the change in accounting policy has resulted increase in income for the quarter by '' 495.26 crores and for the year by '' 1,081.77 crores and consequential non-reduction in gross non performing assets by equivalent amount.

We draw your attention to Note No. 15.c of schedule 18 - Notes to Accounts to the standalone financial statements regarding amortization of additional liability on account of revision in family pension amounting to '' 1,902.02 crores. The bank has charged an amount of ''380.40 crore to the profit and loss account during the year ended March 31, 2022, and the balance unamortized expenses of '' 1,521.62 crore has been carried forward.

We draw your attention to Note No. 15.n of schedule 18 - Notes to Accounts to the standalone financial statements regarding uncertainties due to outbreak of COVID-19 pandemic. In view of these circumstances, the impact on the Banks operations and financial results is dependent on future developments including actions being taken to mitigate the same and other regulatory measures.

Our opinion is not modified in respect of these matters.Key Audit Matters

Sr.

Key Audit Matter

How it was dealt with in our report

Income Recognition, Asset Classification (IRAC) and provisioning on Loans & Advances and Investments as per the regulatory requirements

Loans & Advances and Investments are the largest class of assets forming 85.01% of the total assets as on March 31, 2022. Classification, income recognition and loss provisioning on the same are based on objective parameters as prescribed by the regulations (Reserve Bank of India''s prudential norms and other guidelines). The management of the Bank relies heavily on its IT systems (including

Our audit was focused on income recognition, asset classification and provisioning pertaining to advances due to the materiality of the balances and associated impairment provisions.

Sr.

Key Audit Matter

How it was dealt with in our report

Core Banking Solution), exercise significant estimates and judgement, manual interventions, and uses services of experts (like independent valuers, Lawyers, legal experts and other professional) to determine asset classification, income recognition and provisioning for losses.

The Bank has system based identification of nonperforming assets in accordance with IRAC Norms

These included evaluation and understanding of following:

â¢ Bank''s internal control system in adhering to the Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances/ investments;

â¢ System controls and manual controls over the timely recognition of non-performing assets (NPA/NPI);

â¢ Operational existence and effectiveness of controls over provisioning calculation models from the IT systems;

â¢ Overall Controls on the loan approval, disbursement and monitoring process in case of advances and controls over the purchase, sale and hold decisions making system in case of investments

â¢ We have also reviewed the reliability, effectiveness and accuracy of manual interventions, wherever it has come to our notice, on test check basis.

â¢ We have relied on the reports/returns and work done by other Statutory Branch Auditors (SBA) in cases of branches not visited by us to get an overall comfort with respect to overall compliance in accordance with SA 600 - Using the Work of Another Auditor.

â¢ We have reviewed the work done by other experts like Independent valuers, Lawyers, Legal Experts and other such professionals who have rendered services to the Bank, in accordance with SA 620 Using the Work of an Auditor''s Expert.

â¢ Further we have also reviewed the Bank''s system of monitoring potentially weak and sensitive accounts which show a sign of stress.

â¢ We have also reviewed the reports and observations of the Bank''s internal audit/inspection reports and observations of the concurrent auditors for the same.

â¢ Verification of valuation, classification, provisioning and income recognition of investments by carrying out substantive test including arithmetic accuracy, data accuracy and control over the financial reporting system. We have test checked and assessed the efficacy of the system based identification of NPA

Sr.

Key Audit Matter

How it was dealt with in our report

2 Information Technology (IT) and controls impacting financial reporting

In the normal course of its business, the Bank''s financial accounting and reporting systems are highly dependent on the effective working of the Core Banking Solution (CBS) and other IT systems linked to the CBS or working independently. Extensive volume, variety and complexity of transactions are processed daily and there is a risk that automated accounting procedures and related internal controls may not be accurately designed and operating effectively. Particular areas of focus relate to the logic that is fed into the system, sanctity and reliability of the data, access management and segregation of duties. These underlying principles are important because they ensure that changes to applications and data are appropriate, authorized, cleansed and monitored, so that the system generates accurate and reliable reports/ returns and other financial and non-financial information that is used for the preparation and presentation of the financial statements.

We have relied on the consistent and accurate functioning of CBS and other IT systems for the following:

â¢ Asset Classification and Income recognition as per the Reserve Bank of India guidelines;

â¢ Provisioning on the advance portfolio;

â¢ Identification of advances and liability items and its maturity pattern in various brackets;

â¢ Reconciliation and ageing of various suspense and sundry accounts, impersonal accounts, inter-branchbalancesandother such accounts;

â¢ Recording Investment transactions

â¢ Interest expense on deposits and other liabilities;

Our audit procedures included verifying, testing and reviewing the design and operating effectiveness of the IT system by verifying the reports/returns and other financial and nonfinancial information generated from the system on a test check basis.

Our audit procedures included:

â¢ Ensuring that deficiencies noticed in our verification on test check basis were informed to the management for corrective action;

â¢ Carrying out independent alternative audit procedures like substantive testing in areas where deficiencies were noticed;

â¢ Analytical procedures like ratio analysis, trend analysis, reasonable tests, comparative analysis;

â¢ Reliance on the work performed by the statutory branch auditors and the rectification entries (MOCs) passed based on branch audits;

â¢ Reliance on external vendor inspection reports wherever made available.

â¢ Reviewed the IS Audit Reports and discussed with IT Department on compliance with key IT controls.

Sr.	Key Audit Matter How it was dealt with in our report
3	Recognition and measurement of Deferred tax
	The Bank has recognised a net deferred tax asset of '' 12,29,23,747 (in â000) as on March 31, 2022. Besides objective estimation, recognition and measurement of deferred tax asset is based on the judgment and numerous estimates regarding the availability and visibility of profits in the future. The recent decrease in the amount of deferred tax assets presumes availability and forecasting of profits over an extended period of time thus decreasing uncertainty and the inherent risk of inappropriate recognition of the said asset.	Our audit procedures included the risk assessment to gain an understanding of the applicable tax laws and relevant regulations applicable to the Bank. Based on our understanding, we performed both tests of related internal key controls and substantive audit procedures with the assistance of tax specialists. We performed the following audit procedures as part of our controls testing including, but not limited to: â¢ Evaluation of the policies used for recognition and measurement of deferred tax assets in accordance with AS 22 Accounting for Taxes on Income; â¢ Assessed the method, assumptions and other parameters used with reference to uniformity, management representations, consistency and continuity like budget and midterm projections prepared by the management including earning growth and applicable tax rates and tested the arithmetical accuracy â¢ Assessed the probability of the availability and visibility of profits against which the bank will be able to use this deferred tax asset in the future.
4	COVID-19 Pandemic
	COVID-19 Pandemic has adversely impacted the economic activity across the country and the Government of India had announced series of lock down since March 2020 onwards, which were lifted & reimposed at various point of time in regionalized manner across the country based on the prevailing situation in the respective State. Correspondingly and in tune with the partial and complete lock downs, we experienced travel restrictions for some part of the year and the Bank facilitated carrying out audit remotely wherever physical access was not possible. This situation eased out considerably by the end of the year and therefore physical audit was most prevalent at the year end. Therefore wherever we could not gather audit evidence in person/physically/ through discussions and personal interactions with the officials at the Branches /Regions & Zones/ Verticals / Corporate Offices, we have identified such modified audit procedures as a Key Audit Matter. Accordingly, our audit procedures were modified to carry out the audit remotely	Wherever physical access was not possible, necessary records/ reports/ documents/ certificates were made available to us by the Bank through digital medium including the designated audit portal of the bank, emails and remote access to CBS and closing package. To this extent, the audit process was carried out on the basis of such documents, reports and records made available to us which were relied upon as audit evidence for conducting the audit and reporting for the current period. Accordingly, we modified our audit procedures (based on regulatory and ICAI advisories) as follows: â¢ Conducted verification of necessary records/ documents/ CBS/closing package and other application software electronically through remote access/emails/in respect of some of the Branches/Regions/Zones/Verticals/Corporate Offices and other offices of the Bank wherever physical access was not possible. â¢ Carried out verification of scanned copies of the documents, deeds, certificates, returns from branches and the related records made available to us through emails and remote access over secure network of the Bank â¢ Making enquires and gathering necessary audit evidence through Video Conferencing, dialogues and discussions over phone calls/conference calls, emails and similar communication channels. â¢ Resolution of our audit observations telephonically/ through email instead of a face to-face interaction with the designated officials.

Information Other than the Standalone Financial Statements and Auditors'' Report thereon

When we read the other information, 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 Standalone Financial Statements

6. The Bank''s Board of Directors is responsible with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI to the extent applicable, and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (âRBI'') 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.

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

Auditors'' Responsibilities for the Audit of the Standalone Financial Statements

7. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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

Other Matters

8. We did not audit the financial statements / information of 3416 domestic branches and processing centers including 3 foreign branches included in Standalone Financial Results of the Bank whose financial statements/ financial information reflects total assets of '' 3443521247.98 (in thousand) at March 31, 2022 and total revenue of '' 247892046.15 (in thousand) for the year ended on that date, as considered in the Standalone Financial Results. These branches and processing centers cover 41.73 % of advances, 63.26% of deposits and 30.58 % of Non-performing assets as on 31^stMarch 2022 and 31.63% of revenue for the year ended 31^st March 2022. The financial statements/ information of these branches have been audited by the branch auditors whose reports have been furnished to us and in our opinion in so far as it relates to the amounts and disclosures included in respect of branches, are 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

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

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 purpose of our audit.

(b) In our opinion there are no observations or comments on financial transactions or matters which have any adverse effect on the functioning of the bank.

(d) There are no qualifications, reservations or adverse remarks relating to the maintenance of accounts and other matters connected therewith.

11. We further report that:

For M/s R G N Price & Co. For M/s SARDA & PAREEK LLP For M/s C R Sagdeo & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

FRN 002785S FRN 109262W/W100673 FRN 108959W

CA P. M. Veeramani CA Giriraj Soni CA Sachin V. Luthra

Partner Partner Partner

Membership No.023933 Membership No.109738 Membership No. 109127

UDIN: 22023933AIXFGY6267 UDIN: 22109738AIXFAO2016 UDIN: 22109127AIXFDY8530

For M/s P V A R & Associates For M/s Gopal Sharma & Co. For M/s N B S & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

FRN 005223C FRN 002803C FRN 110100W

CA Sharad Bansal CA Gautam Sharma CA Pradeep J. Shetty

Partner Partner Partner

Membership No. 423507 Membership No. 079225 Membership No. 046940

UDIN: 22423507AIXFRK9410 UDIN: 22079225AIXFAB5594 UDIN: 22046940AIXEXO8437

Place of Signature: Mumbai Date of Report: 13.05.2022

Mar 31, 2021

The President of India /The Members of Union Bank of India Mumbai

Report on Audit of the Standalone Financial Statements Opinion

1. We have audited the accompanying Standalone Financial Statements of Union Bank of India (âthe Bankâ), which comprise the Balance Sheet as at 31 March 2021, the Profit and Loss Account and the Statement of Cash Flows for the year then ended, and notes to financial statements including a summary of significant accounting policies and other explanatory information in which are included the returns for the year ended on that date of

i) 20 branches, 1 Treasury Branch audited by us, 18 FGMO Offices audited by us

ii) 5650 branches audited by statutory branch auditors and

iii) 3 overseas branches audited by local 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 (the RBI). Also incorporated in the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows are the returns from 4042 brancheswhich have not been subjected to audit. These unaudited branches account for 7.60 percent of advances, 19.67 per cent of deposits, 6.14 per cent of interest income and 18.37 per cent of interest expenses.

b. the Profit and Loss Account, read with the notes thereon shows a true balance of profit for the year ended on that date; and

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

Basis for Opinion

2. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (the âICAIâ). Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the standalone Financial Statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the ICAI together with ethical requirements that are relevant to our audit of the financial statements in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI, and provisions of section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by Reserve Bank of India (âRBIâ) from time to time and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of the Matter

3. We draw your attention to Note No.1.1 of schedule 18 - Notes to Accounts to the standalone financial statements which describes Government approved scheme of amalgamation and basis for preparation of these financial results adopting âPooling of Interestâ method as prescribed under the Accounting Standard - 14 on âAccounting for Amalgamationsâ issued by the Institute of Chartered Accountants of India (ICAI), to record amalgamation of erstwhile Andhra Bank and erstwhile Corporation Bank (amalgamating banks) with the bank with effect from 1^stApril 2020. The financial results for the year are not comparable with corresponding previous period.

We draw your attention to Note No. 1.1 of schedule 18 - Notes to Accounts to the standalone financial statements which describes consideration of amalgamation reserve amounting to '' 1309.60 crores as a part of CET I Capital for the purpose of calculation of Capital Adequacy Ratio for the quarter / year ended 31^st March 2021.

We draw your attention to Note No. 1.1 of schedule 18 - Notes to Accounts to the standalone financial statements which describes that during the year the bank has set off entire accumulated loss amounting to '' 32,758.49 crore (as at 1^st April 2020) against securities premium account as per the approval received from RBI dated 29^th October 2020.

We draw your attention to Note No. 1.4.5 of schedule 18 - Notes to Accounts to the standalone financial statements which describes uncertainties due to outbreak of COVID-19 pandemic. The situation continues to be uncertain and the management of the bank is evaluating the situation and impact on its business operations.

We draw your attention to Note No. 13 of schedule 18 - Notes to Accounts to the standalone financial statements which describes that there is change in the accounting policies/estimates followed during the year ended 31^stMarch, 2021 as compared to those followed in the preceding financial year ended 31^st March, 2020 with effect from 1^st April, 2020,

a) the income on account of LC/BG commission is recognized as revenue on accrual basis as against receipt basis followed in earlier periods. Impact due to the change in accounting policy has resulted in decrease in other income and net profit (before tax) for the year by '' 441.06 Crore.

b) Pursuant to amalgamation of erstwhile Andhra Bank and erstwhile Corporation Bank into Union Bank of India, there is a change in method of depreciation on Fixed Assets from Written Down Value to Straight Line Method and change in estimated useful life with respect to some categories of assets. Impact due to the said changes has resulted in increase in depreciation and decrease in net profit (before tax) for the quarter by '' 3.24 Crores for the year ended 31^st March 2021 and due to harmonization, one time impact on the depreciation amounting to '' 180.16 Crores for the year ended 31^st March, 2021.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Sr.

Key Audit Matter

How it was dealt with in our report

Accounting for Amalgamation of e-Andhra Bank and e-Corporation Bank

The Government of India (GOI), Ministry of Finance, Department of Financial Services vide Gazette Notification CG-DL-E-04032020-216535 dated 4th March, 2020 approved the scheme of amalgamation of Andhra Bank and Corporation Bank (Amalgamating Banks) into Union Bank of India effective from 1st April, 2020 The Bank has adopted âPooling of Interestâ method as prescribed under the Accounting Standard 14 on âAccounting for Amalgamationsâ issued by the Institute of Chartered Accountants of India (ICAI), to record amalgamation of Andhra Bank and Corporation Bank (the amalgamating banks) with the Bank with effect from 1 ^stApril, 2020. Accordingly, the difference of Rs. 1309.60 Crore between the net assets assets of amalgamating banks and the amount of shares issued to shareholders of the amalgamating banks has been recognized as Amalgamation Reserve in the opening balance sheet as on 1st April, 2020.

Our audit approach for testing of accounting of

amalgamation included in particular:

â¢ we evaluated the Scheme of Amalgamation approved by The Government of India (GOI), Ministry of Finance, Department of Financial Services vide Gazette Notification CG-DL-E-04032020-216535 dated 4th March, 2020

â¢ we evaluated appropriateness of the Bank''s selection of amalgamation accounting by Pooling of Interest method in compliance with each of the conditions stipulated in AS 14

â¢ we have considered audited balance sheet of amalgamated entity as on 01.04.2020

- Accounting for Amalgamation;

â¢ we evaluated the residual useful life of the acquired assets, focusing on the valuation methodologies and key assumptions applied;

â¢ we evaluated the reasonableness of key assumptions based on our knowledge of the business and industry;

	Due to the complexity of the transaction and	â¢ we evaluated the basis determined by the Management
	the associated significant risk of misstatement	for accounting of Amalgamation Reserve representing
	involved due to	difference between value of net assets of amalgamating
	â¢ Divergence in accounting policies followed	banks and the number of shares issued to shareholders
	by the amalgamating banks with respect of	of the amalgamating banks.
	accounting of certain items of income, providing	â¢ we performed evaluation of tax laws applicable to the
	for depreciation of fixed assets	Bank and verification of the management''s assessment
	â¢ Application of tax laws especially carry forward	with respect to eligibility of carry forward and set off of
	and set off of loss of the merging entities.	losses of the amalgamating banks
	â¢ Ownership and rights over immovable and	â¢ we evaluated the terms of amalgamation as approved
	movable assets of the amalgamating banks,	by the Government of India vide its notification dated
	properties held by the amalgamating banks	04.03.2020 titled âAmalgamation of Andhra Bank and
	under lease, assets, guarantees and other	Corporation Bank into Union Bank of India Scheme
	assurances offered as security for the advances	2020â with reference to the Ownership and rights over
	made by the amalgamating banks, cause of	immovable and movable assets of the amalgamating
	action, suits, decrees, recovery certificates,	banks, properties held by the amalgamating banks
	appeal and other proceedings in favour of	under lease, assets, guarantees and other assurances
	amalgamating banks and all other acts carried	offered as security for the advances made by the
	out by the amalgamating banks in the normal	amalgamating banks, cause of action, suits, decrees,
	course of its banking business	recovery certificates, appeal and other proceedings in
	The accounting of amalgamation of banks is	favour of amalgamating banks and all other acts carried
	considered as a key audit matter	out by the amalgamating banks in the normal course of its banking business

Income Recognition, Asset Classification (IRAC) and provisioning on Loans & Advances and Investments as per the regulatory requirements

Loans & Advances and Investments are the largest class of assets forming 84.88% of the total assets as on March 31, 2021. Classification, income recognition and loss provisioning on the same are based on objective parameters as prescribed by the regulations (Reserve Bank of India''s prudential norms and other guidelines). The management of the Bank relies heavily on its IT systems (including Core Banking Solution), exercise significant estimates and judgement, manual interventions, and uses services of experts (like independent valuers, Lawyers, legal experts and other professional) to determine asset classification, income recognition and provisioning for losses. The Bank has system based identification of nonperforming assets in accordance with IRAC Norms

Our audit was focused on income recognition, asset classification and provisioning pertaining to advances due to the materiality of the balances and associated impairment provisions.

â¢ Bankâs internal control system in adhering to the Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances/investments;

â¢ System controls and manual controls over the timely recognition of non-performing assets (NPA/NPI);

â¢ Operational existence and effectiveness of controls over provisioning calculation models from the IT systems;

â¢ Overall Controls on the loan approval, disbursement and monitoring process in case of advances and controls over the purchase, sale and hold decisions making system in case of investments

â¢ We have also reviewed the reliability, effectiveness and accuracy of manual interventions, wherever it has come to our notice, on test check basis.

		â¢ We have relied on the reports/returns and work done by other Statutory Branch Auditors (SBA) in cases of branches not visited by us to get an overall comfort with respect to overall compliance in accordance with SA 600 - Using the Work of Another Auditor.
		â¢ We have reviewed the work done by other experts like Independent valuers, Lawyers, Legal Experts and other such professionals who have rendered services to the Bank, in accordance with SA 620 Using the Work of an Auditorâs Expert.
		â¢ Further we have also reviewed the Bankâs system of monitoring potentially weak and sensitive accounts which show a sign of stress.
		â¢ We have also reviewed the reports and observations of the Bankâs internal audit/inspection reports and observations of the concurrent auditors for the same.
		â¢ Verification of valuation, classification, provisioning and income recognition of investments by carrying out substantive test including arithmetic accuracy, data accuracy and control over the financial reporting system.
		We have test checked and assessed the efficacy of the system based identification of NPA

3	Information Technology (IT) and controls impacting financial reporting
	A. On account of amalgamation
	During the year, in view of the amalgamation	We have obtained understanding of the IT related
	of erstwhile Andhra Bank (eAB) and erstwhile	environment of all the three verticals of the Bank, and
	Corporation Bank (eCB) with Union Bank of	had accordingly identified IT applications, databases and
	India, with effect from April 1,2020, as stated in	operating systems to conduct risk assessment which may
	note 1 of Schedule 18 of the Financial Statements	impact on the financial reporting. Our audit procedures,
	and until integration into the Union Bank of India	with respect to all three verticals in this area included,
	platform, the banking operations were carried	among others:
	out in three different software for the respective verticals namely eAB branches, eCB branches and other branches, during the year. In respect of some specific department or specialized softwareâs for business processes the integration process is underway and was not be completed during the year. In view of the above, the IT environment had become complex and	â¢ Testing IT general controls related to User and Application controls, Change Management Controls and Data backup. â¢ Assessing whether appropriate restrictions were placed on access to core systems through reviewing the permissions and responsibilities of authorised personnel.
	pervasive to the operations of the Bank with	â¢ Where we identified the need to perform additional
	regards to the financial reporting process since	procedures, we placed reliance on manual compensating
	the same was highly dependent on information	controls; such as reconciliations between systems and
	technology including automated and manual	other information sources or performing additional
	controls and availability of complete and	testing; extended our sample sizes, to obtain adequate
	accurate electronic data due to the size and	and appropriate audit evidences.
	complexity of the operations. Pending the systems integration / migration of the three software, the process of consolidated of data to be reported was manual.	â¢ Reviewed the controls with respect to manual processes consolidation of data of all verticals and ensured data integrity with respect to such consolidation.

Unauthorized or extensive access rights, changes in IT environment, operational controls, lack of segregation of duties which may cause a risk of misstatement of financial information and could have a material consequence on the completeness and accuracy of the financial statements. Due to high level of automation, number of integrated / non - integrated systems used, the manual process used for the consolidation of the three verticals, this is considered a significant matter for our audit.

B. On normal financial reporting Apart from amalgamation which is an exceptional business during the year, in the normal course of its business, the Bankâs financial accounting and reporting systems are highly dependent on the effective working of the Core Banking Solution (CBS) and other IT systems linked to the CBS or working independently. Extensive volume, variety and complexity of transactions are processed daily and there is a risk that automated accounting procedures and related internal controls may not be accurately designed and operating effectively. Particular areas of focus relate to the logic that is fed into the system, sanctity and reliability of the data, access management and segregation of duties. These underlying principles are important because they ensure that changes to applications and data are appropriate, authorized, cleansed and monitored, so that the system generates accurate and reliable reports/ returns and other financial and non-financial information that is used for the preparation and presentation of the financial statements.

We have relied on the consistent and accurate functioning of CBS and other IT systems for the following:

â¢ Asset Classification and Income recognition as per the Reserve Bank of India guidelines;

â¢ Provisioning on the advance portfolio;

â¢ Identification of advances and liability items and its maturity pattern in various brackets;

â¢ Reconciliation and ageing of various suspense and sundry accounts, impersonal accounts, inter-branch balances and other such accounts;

â¢ Recording Investment transactions

â¢ Interest expense on deposits and other liabilities;

Our audit procedures included verifying, testing and reviewing the design and operating effectiveness of the IT system by verifying the reports/returns and other financial and non-financial information generated from the system on a test check basis.

Our audit procedures included:

â¢ Ensuring that deficiencies noticed in our verification on test check basis were informed to the management for corrective action;

â¢ Carrying out independent alternative audit procedures like substantive testing in areas where deficiencies were noticed;

â¢ Analytical procedures like ratio analysis, trend analysis, reasonable tests, comparative analysis;

â¢ Reliance on the work performed by the statutory branch auditors and the rectification entries (MOCs) passed based on branch audits;

â¢ Reliance on external vendor inspection reports wherever made available.

â¢ Reviewed the IS Audit Reports and discussed with IT Department on compliance with key IT controls.

Recognition and measurement of Deferred tax

The Bank has recognised a net deferred tax asset of '' 15,67,24,947 (in â000) as on March 31,2021. Besides objective estimation, recognition and measurement of deferred tax asset is based on the judgment and numerous estimates regarding the availability and visibility of profits in the future. The recent increase in the amount of deferred tax assets recognised presumes availability and forecasting of profits over an extended period of time thus increasing uncertainty and the inherent risk of inappropriate recognition of the said asset.

Our audit procedures included the risk assessment to gain an understanding of the applicable tax laws and relevant regulations applicable to the Bank. Based on our understanding, we performed both tests of related internal key controls and substantive audit procedures with the assistance of tax specialists. We performed the following audit procedures as part of our controls testing including, but not limited to:

â¢ Evaluation of the policies used for recognition and measurement of deferred tax assets in accordance with AS 22 Accounting for Taxes on Income;

â¢ Assessed the method, assumptionsandotherparameters used with reference to uniformity, management representations, consistency and continuity like budget and midterm projections prepared by the management including earning growth and applicable tax rates and tested the arithmetical accuracy

â¢ Assessed the probability of the availability and visibility of profits against which the bank will be able to use this deferred tax asset in the future.

â¢ Evaluation of recognition and measurement of deferred tax assets on accumulated losses of erstwhile Andhra Bank (eAB) and erstwhile Corporation Bank (eCB) on amalgamation with Union Bank of India, with effect from April 1, 2020.

COVID-19 Pandemic

Modified Audit Procedures carried out in light of COVID-19 outbreak

Due to the continuing COVID-19 pandemic, lockdown declared by some of the state governments and travel restrictions imposed by Central / State Government / Local authorities during the period of our audit and the RBI directions to Bank to facilitate carrying out audit remotely wherever physical access was not possible, audit could not be conducted by visiting the premises of certain Branches / Regional & Zonal Offices/ Verticals at the Corporate Office of the bank.

As we could not gather audit evidence in person/ physically/ through discussions and personal interactions with the officials at the Branches / Regions & Zones/ Verticals / Corporate Offices, we have identified such modified audit procedures as a Key Audit Matter.

Accordingly, our audit procedures were modified to carry out the audit remotely

Due to the continuing COVID-19 pandemic followed by lockdown declared by some of the state governments and other travel restrictions imposed by the Central and State Governments/ Local administration during the period of our audit, we could not travel to the Branches/Regions/ Zones/ Verticals/ Corporate Offices and carry out the audit processes physically at the respective offices.

Wherever physical access was not possible, necessary records/ reports/ documents/ certificates were made available to us by the Bank through digital medium including the designated audit portal of the bank, emails and remote access to CBS and closing package. To this extent, the audit process was carried out on the basis of such documents, reports and records made available to us which were relied upon as audit evidence for conducting the audit and reporting for the current period.

Accordingly, we modified our audit procedures (based on

regulatory and ICAI advisories) as follows:

â¢ Conducted verification of necessary records/ documents/CBS/closing package and other application software electronically through remote access/emails/in respect of some of the Branches/ Regions/Zones/Verticals/Corporate Offices and other offices of the Bank wherever physical access was not possible.

â¢ Carried out verification of scanned copies of the documents, deeds, certificates, returns from branches and the related records made available to us through emails and remote access over secure network of the Bank

â¢ Making enquires and gathering necessary audit evidence through Video Conferencing, dialogues and discussions over phone calls/conference calls, emails and similar communication channels.

â¢ Resolution of our audit observations telephonically/ through email instead of a face to-face interaction with the designated officials.

Information Other than the Standalone Financial Statements and Auditorsâ Report thereon

5. The Bankâs Board of Directors is responsible for the other information. The other information comprises the Highlights for the year, Directorsâ Report including annexures to Directorsâ Report, key financial ratios, Business responsibility Report and Corporate Governance report in the Annual Report, but does not include the standalone financial statements and our auditorâs report thereon,which is expected to be made available to us after the date of this Auditorsâ Report.

If, based on the work we have performed on the Other Information that we obtained prior to the date of this Auditorsâ Report, we conclude that there is a material misstatement of this Other Information, we are required to report that fact. We have nothing to report in this regard.

When we read the other information, 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 Standalone Financial Statements

6. The Bankâs Board of Directors is responsible with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI to the extent applicable, and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (âRBIâ) 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 standalone financial statements, management is responsible for assessing the Bankâs 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 Board of Directors are also responsible for overseeing the Bankâs financial reporting process.

Auditorsâ Responsibilities for the Audit of the Standalone Financial Statements

7. 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 auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of managementâs 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 bankâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs report. However, future events or conditions may cause the bank to cease to continue as a going concern.

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

8. We did not audit the financial statements / information of 5653 domestic branches and processing centers including 3 foreign branches included in Standalone Financial Results of the Bank whose financial statements/ financial information reflects total assets of '' 167,19,29,083.49 (in thousand) at March 31,2021 and total revenue of '' 52,57,33,043.46 (in thousand) for the year ended on that date, as considered in the Standalone Financial Results. These branches and processing centers cover 55.91% of advances, 96.80% of deposits and 45.33% of Non-performing assets as on 31^st March 2021 and 73.10% of revenue for the year ended 31^st March 2021. The financial statements/ information of these branches have been audited by the branch auditors whose reports have been furnished to us and in our opinion in so far as it relates to the amounts and disclosures included in respect of branches, are 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

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

Subject to the limitations of the audit indicated in paragraphs 6 and 7 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, and subject also to the limitations of disclosure required therein, we report that:

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

10. As required by letter No. DOS.ARG.No.6270/08.91.001/2019- 20 dated March 17, 2020 on âAppointment of Statutory Central Auditors (SCAs) in Public Sector Banks - Reporting obligations for SCAs from FY 2019-20â, read with subsequent communication dated May 19, 2020 issued by the RBI, we further report on the matters specified in paragraph 2 of the aforesaid letter as under:

(b) In our opinion there are no observations or comments on financial transactions or matters which have any adverse effect on the functioning of the bank.

(d) There are no qualifications, reservations or adverse remarks relating to the maintenance of accounts and other matters connected therewith.

(e) Our audit report on the adequacy and operating effectiveness of the Bankâs internal financial controls over financial reporting is given in Annexure A to this report. Our report expresses an unmodified opinion on the Bankâs internal financial controls over financial reporting with reference to the Standalone Financail Statements as at 31 March 2021.

11. We further report that:

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss Account and the Statement of Cash Flows comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

For M/s B M Chatrath & Co. LLP For M/s R G N Price & Co. For M/s SARDA & PAREEK LLP

Chartered Accountants Chartered Accountants Chartered Accountants

FRN 301011E/E300025 FRN 002785S FRN 109262W/W100673

CA Arindam Ray CA P M Veeramani CA Niranjan Joshi

Partner Partner Partner

Membership No.058713 Membership No.023933 Membership No.102789

UDIN: 21058713AAAABQ2179 UDIN: 21023933AAAAJQ1386 UDIN: 21102789AAAAAQ1134

F_or M/_s C R S_agd_eo& C_o. For M/s P V A R & Associates For M/s Gopal Sharma & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

FRN 108959W FRN 005223C FRN 002803C

CA Sachin V Luthra CA Pradeep Kumar Gupta CA Vijay Garg

^Partner Partner Partner

Membership No. 109127 Membership No.072933 Membership No.076387

UDIN: 21109127AAAADL7290 UDIN: 21072933AAAABP4872 UDIN: 21076387AAAAAE3168

Place of Signature : Mumbai / Virtual

Mar 31, 2019

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the standalone financial statements of Union Bank of India (âthe Bankâ), which comprise the Balance Sheet as at 31 March 2019, the Profit and Loss Account and the Cash Flows Statement for the year then ended, and notes to standalone financial statements including a summary of significant accounting policies and other explanatory information, incorporated in these financial statements are returns of 20 branches including 1 treasury branch, 18 Regional Offices audited by us, 2,454 branches audited by statutory branch auditors and 4 foreign branches audited by local 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 1,814 branches, 45 regional offices which have not been subjected to audit. These unaudited branches account for 6.18 percent of advances, 21.53 percent of deposits, 6.92 percent of interest income and 20.18 percent of interest expenses.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Banking Regulation Act, 1949 in the manner so required for bank and are in conformitywith accounting principles generally accepted in India and give:

a. true and fair view in case of the Balance sheet, of the state of affairs of the Bank as at 31 March, 2019;

b. true balance of loss in case of Profit and loss account for the year ended on that date; and

c. true and fair view in case of cash flows statement for the year ended on that date.

Basis for Opinion:

3. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by ICAI. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Standalone 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 ethical requirements that are relevant to our audit of the standalone financial statements in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI, and provisions of Section 29 ofthe Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (âRBIâ) from time to time and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters:

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone financial statements ofthe current period. These matters were addressed in the context of our audit ofthe Standalone 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 prescribed below to be the key audit matters to be communicated in our report:

Sr. No.

Key Audit Matters

How the Matter was addressed in our report

information Technology (IT) Systems and controls over financial reporting

The Bankâs financial accounting and reporting systems are highly dependent on the effective working of the Core Banking Solution (CBS) and other IT systems linked to the CBS or working independently. Extensive volume, variety and complexity of transactions are processed daily and there is a risk that automated accounting procedures and related internal controls may not be accurately designed and operating effectively. Particular areas of focus relate to the logic that is fed into the system, sanctity and reliability

Our audit procedures included verifying, testing and reviewing the design and operating effectiveness ofthe IT system by verifying the reports/returns and other financial and non-financial information generated from the system on atest check basis. Our audit procedures included:

- Ensuring that deficiencies noticed in our verification on test check basis were informed to the management for corrective action;

- Carrying out independent alternative audit procedures

of the data, access management and segregation of duties. These underlying principles are important because they ensure that changes to applications and data are appropriate, authorized, cleansed and monitored, so that the system generates accurate and reliable reports/ returns and other financial and non-financial information that is used for the preparation and presentation of the financial statements.

We have relied on the consistent and accurate functioning of CBS and other IT systems for the following:

- Asset Classification and income recognition as per the Reserve Bank of India guidelines;

- Provisioning on the advance portfolio;

- Identification of advances and liability items and its maturity pattern in various brackets;

- Reconciliation and ageing of various suspense and sundry accounts, impersonal accounts, inter-branch balances and other such accounts;

- Recording Investmenttransactions

- Interest expense on deposits and other liabilities;

like substantive testing in areas were deficiencies were noticed;

- Analytical procedures like ratio analysis, trend analysis, reasonable tests, comparative analysis;

- Reliance on the work performed by the statutory branch auditors and the rectification entries (MOCs) passed based on branch audits;

- Reliance on external vendor inspection reports wherever made available.

Income Recognition, Asset Classification (IRAC) and provisioning on Loans & Advances and Investments as per the regulatory requirements.

Loans & Advances and Investments are the largest class of assets forming 85.62% of the total assets as on March 31, 2019. Classification, income recognition and loss provisioning on the same are based on objective parameters as prescribed by the regulations (Reserve Bank of Indiaâs prudential norms and other guidelines).

The management ofthe Bank relies heavily on its IT systems (including Core Banking Solution), exercise significant estimates and judgement, manual interventions, and uses services of experts (like independent valuers, Lawyers, legal experts and other professional) to determine asset classification, income recognition and provisioning for losses.

Our audit was focused on income recognition, asset classification and provisioning pertaining to advances due to the materiality of the balances and associated impairment provisions.

- We have evaluated and understood the Bankâs internal control system in adhering to the Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances/investments;

- System controls and manual controls over the timely recognition of non-performing assets (NPA/NPI);

- Operational existence and effectiveness of controls over provisioning calculation models from the IT systems;

- Overall Controls on the loan approval, disbursement and monitoring process in case of advances and controls over the purchase, sale and hold decisions making system in case of investments

- We tested sample of loans/investments (in cases of branches visited by us) to assess whether they had been identified as non performing on a timely manner, income recognized and provisioning made as per IRAC norms.

- We have also reviewed the reliability, effectiveness and accuracy of manual interventions, wherever it has come to our notice, on test check basis.

- We have relied on the reports/returns and work done

		by other Statutory Branch Auditors (SBA) in cases of branches not visited by us to get an overall comfort with respect to overall compliance in accordance with SA 600 - Using the Work of Another Auditor. - We have reviewed the work done by other experts like Independent valuers, Lawyers, Legal Experts and other such professionals who have rendered services to the Bank, in accordance with SA 620 Using the Work of an Auditorâs Expert. - Further we have also reviewed the Bankâs system of monitoring potentially weak and sensitive accounts which show a sign of stress. - We have also reviewed the reports and observations of the Bankâs internal audit/inspection reports and observations of the concurrent auditors for the same. - Verification of valuation, classification, provisioning and income recognition of investments by carrying our substantive test including arithmetic accuracy, data accuracy and control over the financial reporting system.
3.	Recognition and measurement of Deferred tax
	The Bank has recognised a net deferred tax asset of Rs. 51,720,800 ('' in 000) as on March 31, 2019. Besides objective estimation, recognition and measurement of deferred tax asset is based on the judgment and numerous estimates regarding the availability and visibility of profits in the future. The recent increase in the amount of deferred tax assets recognised presumes availability and forecasting of profits over an extended period of time thus increasing uncertainty and the inherent risk of inappropriate recognition of the said asset.	Our audit procedures included the risk assessment to gain an understanding of the applicable tax laws and relevant regulations applicable to the Bank. Based on our understanding, we performed both tests of related internal key controls and substantive audit procedures with the assistance of tax specialists. We performed the following audit procedures as part of our controls testing including, but not limited to: - Evaluation of the policies used for recognition and measurement of deferred tax assets in accordance with AS 22 Accounting for Taxes on Income; - Assessed the method, assumptions and other parameters used with reference to uniformity, consistency and continuity like budget and midterm projections prepared by the management including earning growth and applicable tax rates and tested the arithmetical accuracy. - Assessed the probability of the availability and visibility of profits against which the bank will be able to use this deferred tax asset in the future.
4.	Impact of Pending litigation including Tax litigations
	There are 1129 number of pending and ongoing legal disputes (includingtaxlitigations), regulatory investigations and various claims against the bank aggregating to Rs. 31,049,729.00 ('' in 000) that have not been acknowledged as debts by the bankâs management. In certain litigation and regulatory matters significant judgement is required by management to determine whether a demand is a liability or a contingent liability. If a present obligation exists and whether a provision should be recognised or a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the bankâs control.	Ouraudit procedures mainly included: - Review of the managementâs judgment to understand the nature and status of legal disputes, regulatory investigations and claims against banks not acknowledged as debt to determine whether or not a provision should be recognized; - Review of legal opinions obtained by the bank from their in house departments or external experts in this regard (where ever applicable); - Independent checks to assess the adequacy of provisions and disclosure of contingent liability by comparing assumptions to historical data, verification

of claims settled and fresh demands during the year and in certain case representation from the management based on legal opinion.

- Verification of these provisions and related disclosures of the contingent liability as per the RBI guidelines and policies ofthe Bank.

- Reliance of certification by Statutory Branch Auditors.

Other Information:

5. The Bankâs Board of Directors is responsible for the preparation of the other information. The other information comprises the Highlights for the year, Directorsâ Report including annexures to Directorsâ Report, Key Financial Ratios, Business Responsibility Report and Corporate Governance Report included in the Annual report, but does not include the financial statements and our auditorsâ report thereon and the Pillar III Disclosures under the New Capital Adequacy Framework (Basel III disclosures).

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

In connection with the audit of the Standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

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

6. The Bankâs Board of Directors is responsible with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI, and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (âRBIâ) 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

7. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs 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 standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of managementâs 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 bankâs ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone 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 auditorâs 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs 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:

8. We did not audit the financial statements of 2,458 branches included in the standalone financial statements of the Bank whose financial statements reflect total assets of Rs. 365,60,19,844 (in â000) as at 31 March 2019 and total revenue of Rs. 38,17,80,379 (in â000) for the year ended on that date, as considered in the standalone financial statements. The financial statements of these branches have been audited by the branch auditors whose reports have been furnished to us, and in our opinion in so far as it relates to the amounts and disclosures included in respect of branches, are 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

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

10. Subject to the limitations of the audit indicated in paragraphs 6 to 8 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, and subject also to the limitations of disclosure required therein, we report that:

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

11. We further report that:

a. in our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

b. the Balance Sheet, the Profit and Loss Account and the Cash Flows Statement dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

c. the reports on the accounts of the branch offices audited by branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with byusin preparing this report; and

d. In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flows Statement comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

For S. Bhandari & Co. For CNK& Associates LLP For Kirtane & Pandit LLP

Chartered Accountants Chartered Accountants Chartered Accountants

FRN: 000560C FRN:101961W/W-100036 FRN:105215W/W-100057

P P Pareek Suresh S. Agaskar S B Bhagwat

Partner Partner Partner

MembershipNo.071213 MembershipNo.110321 MembershipNo.008072

For R S Patel & Co. For MGB& Co. LLP For B M Chatrath & Co. LLP

Chartered Accountants Chartered Accountants Chartered Accountants

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Rajan B Shah Sanjay Kothari Anand Chatrath

Partner Partner Partner

MembershipNo.101998 MembershipNo.048215 MembershipNo.052975

Place: Mumbai

Date: 14^th May, 2019

Mar 31, 2018

CORPORATE GOVERNANCE REPORT

1. BANKâS PHILOSOPHY ON CORPORATE GOVERNANCE

1.1 Union Bank of India has a tradition of adopting good corporate governance practices. The Bank has laid emphasis on the cardinal values of fairness, transparency and accountability for performance at all levels, thereby enhancing the shareholdersâ value and protecting the interest of the stakeholders.

1.2 The Bank considers itself as trustee of its shareholders and acknowledges its responsibility towards them for creation and safeguarding wealth. During the year under review, the Bank continued its pursuit of achieving these objectives through adoption and monitoring of corporate strategies, prudent business plans, monitoring of major risks of the Bankâs business and pursuing policies and procedures to satisfy its legal and ethical responsibilities.

1.3 Keeping in view the best practices, the Board has framed a code of corporate governance. The code helps to inculcate a spirit of good corporate governance right from the top. It basically encompasses and documents the practices followed in the Bank in conduct of its duties towards all the stakeholders like:

- Procedures for Board and its various Committees

- Compliance

- Relation with shareholders

- Disclosures by Directors

- Corporate Social Responsibility and

- Other miscellaneous issues viz. Code of Conduct, Prohibition of Insider Trading, Related Party Transaction Policy, Whistle Blower Policy, Staff Related Matters, Vigilance etc.

1.4 The Bank being a listed entity complies with the Corporate Governance provisions of the SEBI (Listing

2.5 Composition of the Board of Directors as on 31^st March, 2018 is as under:

Sr.

No.

Full Name of the Director, Designation & Category

Appointment

Date

Membership in Committees of the Bank #

Holding of Bankâs shares

Number of memberships in ACB & SRC in Public Ltd.

Companies including the Bank

No. of post of Chairperson in ACB / SRC held in Public Ltd. Companies including the Bank

Remarks (Nature of appointment in the Bank/Other Companies)

Shri Kewal Handa, Chairman & Part-Time Non-Official Director (NonExecutive)

06-07-2017

CSCB

ITSC

SCMF

SCR&ALM

SRC

Nil

Nominated as a Part-Time Non-Official Director and Non-Executive Chairman u/s 9(3) (h) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a period of 3 years from the date of notification of his appointment i.e. up to 05.07.2020 or until further orders, whichever is earlier.

He is also Director on the Board of:

i.MuktaArts

Limited

ii. Clariant

Chemicals (India) Limited Hi. Greaves Cotton Limited

iv. Salus Lifecare Pvt. Ltd.

v. Conxus Social Responsibility Services Pvt. Ltd.

vi. International Institute of CSR Foundation

Obligations & Disclosure Requirements) Regulations, 2015 to the extent that it does not violate statues and guidelines or directives issued by the relevant authorities applicable to the Bank.

2. BOARD OF DIRECTORS

2.1 The composition of the Board of Directors is governed by the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, as amended and Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970, as amended.

2.2 The responsibilities of the Board include approval of policies for development of new products, business reviews in relation to targets, approval of policies concerning credit, operational, market, liquidity risks, assessing the independence of the risk function, detailed scrutiny of quarterly and annual financial results, NPA management and provisioning integrity, compliance of statutory guidelines, customer protection, financial inclusion, overall supervision of human resources.

2.3 The Board has constituted various committees and delegated powers for different functional areas. The Board as well as its committees meet at periodical intervals.

2.4 As on 31^st March, 2018, the Board comprised of four whole-time Directors viz. Managing Director & Chief Executive Officer (MD & CEO) and three Executive Directors appointed by the Government of India besides nine Non-Executive Directors who are eminent personalities from various walks of life. Their rich and varied experience guide the Bank in its progress and achievements in various spheres.

Sr. No.	Full Name of the Director, Designation & Category	Appointment Date	Membership in Committees of the Bank #	Holding of Bankâs shares	Number of memberships in ACB & SRC in Public Ltd. Companies including the Bank	No. of post of Chairperson in ACB / SRC held in Public Ltd. Companies including the Bank	Remarks (Nature of appointment in the Bank/Other Companies)
							vii. Omsav Pharma Research Pvt. Ltd. viii. Constellation Alpha Capital Corp (NASDAQ) ix. R M Drip & Sprinklers Systems Pvt. Ltd. x. Oaknet Healthcare Pvt. Ltd.
2	Shri Rajkiran Rai G., Managing Director & CEO (Executive)	01-07-2017	CAC-I, CDRCF, CESD, CSCB, CSRC, DPC, DPC-V, HRSCB, MCB, RCNCB, RCWDB, RMCB, SCMF, SCR&ALM	Nil	0	0	Appointed as a Whole Time Director u/s 9(3) (a) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office for a period of three years from the date of his taking over the charge of the post on or after 01.07.2017 i.e. up to 30.06.2020 or until further orders, whichever is earlier. He is also Director on the Board of Union Asset Management Co. Pvt. Ltd.
3	Shri Vinod Kathuria, Executive Director (Executive)	22-01-2016	CAC-I, CDRCF, CESD, CSCB, CSRC, HRSCB, ITSC, MCB, RMCB SCR&ALM, SRC, STCB	Nil	1	0	Appointed as a Whole Time Director u/s 9(3) (a) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office up to 31.07.2018 i.e. the date of his superannuation or until further orders, whichever is earlier. He is also Director on the Board of Union Asset Management Co. Pvt. Ltd.
4	Shri Raj Kamal Verma, Executive Director (Executive)	09-08-2016	ACB, CAC-I, CDRCF, CESD, CSCB, CSRC, DPC, HRSCB, ITSC, MCB, RMCB, SCMF, SCR&ALM, SRC, STCB	Nil	2	0	Appointed as a Whole Time Director u/s 9(3) (a) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office up to 28.02.2019 i.e. the date of his superannuation or until further orders, whichever is earlier. He is also Director on the Board of National Payment Corporation of India and Union Bank of India (UK) Ltd.
5	Shri Atul Kumar Goel, Executive Director (Executive)	15-09-2016	CAC-I, CDRCF, CESD, CSCB, CSRC, HRSCB, ITSC, MCB, RMCB, SCR&ALM, SRC, STCB	Nil	1	0	Appointed as a Whole Time Director u/s 9(3) (a) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office for a period of 3 years from his taking charge of the post i.e. up to 14.09.2019 or until further orders, whichever is earlier. He is also Director on the Board of Union Trustee Co. Pvt. Ltd. and Star Union Dai-lchi Life Insurance Co. Ltd.
6	Dr. Madnesh Kumar Mishra, Government Nominee Director (NonExecutive)	22-07-2016	ACB, CSCB, DPC, DPC-V, HRSCB, NC, RC, RMCB, SCMF, ITSC	Nil	1	0	Nominated as a Director by Central Government u/s 9(3)(b) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold the post until further orders.
7	Shri Anil Kumar Misra, RBI Nominee Director (Non Executive)	06-07-2015	ACB, DPC-V, MCB, RC, EDC	Nil	1	0	Nominated as a Director by Central Government on the recommendation of RBI u/s 9(3)(c) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold the post until further orders.

Sr. No.	Full Name of the Director, Designation & Category	Appointment Date	Membership in Committees of the Bank #	Holding of Bankâs shares	Number of memberships in ACB & SRC in Public Ltd. Companies including the Bank	No. of post of Chairperson in ACB / SRC held in Public Ltd. Companies including the Bank	Remarks (Nature of appointment in the Bank/Other Companies)
8	Shri Rajiv Kumar Singh, Chartered Accountant Director (NonExecutive)	06-02-2018	ACB	Nil	1	0	Nominated as a Part Time Non-Official Director by Central Government u/s 9(3)(g) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a period of 3 years, from the date of notification i.e. up to 05.02.2021 or until further orders, whichever is earlier.
9	Dr. K. Ramesha, Part-Time Non-Official Director (Non Executive)	25-04-2016	CESD, CSRC, MCB, NC, SCMF, SCR&ALM, SRC	Nil	1	1	Nominated as a Part Time Non-Official Director by Central Government u/s 9(3)(h) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a period of 3 years, from the date of notification i.e. up to 24.04.2019 or until further orders, whichever is earlier.
10	Dr. Madhura Swamina-than, Part-Time Non-Official Director (Non-Executive)	27-12-2017	Nil	Nil	0	0	Nominated as a Part Time Non-Official Director by Central Government u/s 9(3)(h) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a period of 3 years, from the date of notification i.e. up to 26.12.2020 or until further orders, whichever is earlier.
11	Dr. R. H. Dholakia, Shareholder Director (Independent NonExecutive)	27-06-2015	CSCB, HRSCB, MCB, RC, RCWDB, SRC	200	3	1	Re-elected as Shareholder Director u/s 9(3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a period of 3 years from 27.06.2015 to 26.06.2018. He is also Director on the Board of: - Adani Transmission Ltd. - Gujarat State Petroleum Corporation Ltd.
12	Shri G. K. Lath, Shareholder Director (Independent NonExecutive)	27-06-2015	RCNCB, SCR&ALM, SCMF, ACB, RCWDB, CESD, CSRC	100	1	1	Re-elected as Shareholder Director u/s 9(3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a period of 3 years from 27.06.2015 to 26.06.2018.
13	Dr. Uttam Kumar Sarkar, Shareholder Director (Independent Non Executive)	27-06-2015	CSCB, HRSCB, ITSC, MCB, RC, RCNCB, SCR&ALM	100	0	0	Elected as Shareholder Director u/s 9(3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a period of 3 years from 27.06.2015 to 26.06.2018.

ACB - Audit Committee of the Board

CAC-I - Credit Approval Committee -1

CDRCF - Committee of Directors for Raising of Capital Fund

CESD - Committee to decide on Election of Shareholders'' Directors - Voting by PSBs

CSCB - Customer Service Committee of the Board

DPC - Directors Promotion Committee

DPC-V - Disciplinary Proceedings Committee-Vigilance/Non Vigilance

EDC - Election Dispute Committee

HRSCB - HR Sub-Committee of the Board

ITSC - IT Strategy Committee

MCB - Management Committee of the Board

NC - Nomination Committee

RC - Remuneration Committee

RCNCB - Review Committee for classification of Non Cooperative Borrower

RCWDB - Review Committee on Willful Defaulters of the Bank

RMCB - Recovery Management Committee of the Board

SCMF - Special Committee on monitoring of Frauds of Rs,1.00 crore and above

SCR & ALM - Supervisory Committee of Directors on Risk & Asset Liability Management

SRC - Stakeholders Relationship Committee

STCB - Share Transfer Committee of the Board

CSRC - Corporate Social Responsibility Committee

2.6 Appointments/Cessations during the Financial Year 2017-18:

Appointments: A brief profile of the new directors inducted on the Board during the financial year 2017-18 is as under:-

Sr.

No.

Name

Age

Date of Appointment

Expiry Date of Current Term

Nature of Expertise

Brief Resume

Shri Rajkiran Rai G.

01-07-2017

30-06-2020

Banking & Finance

Shri Rajkiran Rai G. is an agricultural science graduate and also a certified member of Indian Institute of Bankers. Shri Rai has more than three decades of rich banking experience. He started his career in 1986 as an Agricultural Finance Officer in Central Bank of India. He was elevated to the post of Executive Director of Oriental Bank of Commerce in January, 2016. He has also served on the Board of Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd.

Shri Kewal Handa

06-07-2017

05-07-2020

Management & Finance

Shri Kewal Handa is a Management Accountant and Company Secretary and has a Masters Degree in Commerce. He has completed the Pfizer Leadership Development Program from Harvard University and the Senior Management Development Program from IIM, Ahmadabad. He has also done a Certificate course on Marketing Strategy from Columbia Business School, New York. Shri Handa has diverse experience in Finance, Commercial, Strategy, Business Development, Merger & Acquisition, Banking, Corporate Affairs and he has also experience in sectors like Engineering, Consumer and Project Finance in companies like Schrader Scovill, Hindustan Liver Limited (HLL), Vidyut Blades & State Industrial Investment Corporation of Maharashtra (SICOM). Shri Handa was the Managing Director of Pfizer Limited, India from 2005 to 2012. He has also served as Executive Director - Finance, Pfizer Limited and as Managing Director of Wyeth Ltd from 2009 to 2012.

Sr.

No.

Name

Age

Date of Appointment

Expiry Date of Current Term

Nature of Expertise

Brief Resume

Dr. Madhura Swaminathan

27-12-2017

26-12-2020

Economics

Dr. Madhura Swaminathan has a doctorate in Economics from the University of Oxford. She is Chairperson of M S Swaminathan Research Foundation and Professor & Head of Economic Analysis Unit of Indian Statistical Institute, Bangalore.

Shri Rajiv Kumar Singh

06-02-2018

05-02-2021

Finance

Shri Rajiv Kumar Singh is a fellow member of the ICAI, a qualified Certified Information System Auditor (USA) and Valuer from the ICAI. He is an expert on Business Valuation, Banking, Corporate Finance & Strategy, M&A, Restructuring, Forex Risk Management, Internal Controls and Valuation related to litigation including economic damages.

Cessations: The following members ceased to be the Directors during the financial year 2017-18:

Sr.

No.

Name of Director

Designation

Date of Cessation

Reason

Shri Arun Tiwari

Chairman & Managing Director

30-06-2017

Superannuation

2.7 Inter-se relationship of Directors:

None of the Directors is related to each other.

2.8 Committee Membership of Directors:

In terms of regulation 26(1) of SEBI (LODR) Regulations, 2015 Chairpersonship and Membership of Audit Committee of the Board (ACB) and Stakeholders Relationship Committee (SRC) are considered for this disclosure.

No Director of the Bank was a member in more than 10 Committees or acted as Chairperson of more than 5 Committees across all listed entities/public limited companies in which he was a Director during the year 2017-18.

Details of Membership/Chairmanship held by the Directors on the Committees of the Bank and other listed/public limited companies where he was a Director as on 31.03.2018 are given here under:

Sr. No.	Name & Designation of Director	Name of Company	Name of Committee#	Member/ Chairman
1	Shri Kewal Handa, Chairman & Part-Time NonOfficial Director	1. Mukta Arts Limited 2. Mukta Arts Limited 3. Greaves Cotton Limited 4. Clariant Chemicals (India) Limited 5. Union Bank of India	ACB SRC ACB ACB SRC	Chairman Chairman Chairman Member Member
2	Shri Vinod Kathuria, Executive Director	Union Bank of India	SRC	Member
3	Shri Raj Kamal Verma, Executive Director	1. Union Bank of India 2. Union Bank of India	SRC ACB	Member Member
4	Shri Atul Kumar Goel, Executive Director	Union Bank of India	SRC	Member
5	Dr. Madnesh Kumar Mishra, Government Nominee Director	Union Bank of India	ACB	Member
6	Shri Anil Kumar Misra, RBI Nominee Director	Union Bank of India	ACB	Member
7	Dr. K. Ramesha, Part-Time Non-Official Director	Union Bank of India	SRC	Chairman
8	Shri Rajiv Kumar Singh, Chartered Accountant Director	Union Bank of India	ACB	Member

Sr.

No.

Name & Designation of Director

Name of Company

Name of Committee#

Member/

Chairman

Dr. R. H. Dholakia, Shareholder Director

1. Adani Transmission Ltd.

2. Gujarat State Petroleum Corporation Ltd.

3. Union Bank of India

ACB

SRC

Member

Chairman

Member

Shri G. K. Lath, Shareholder Director

Union Bank of India

ACB

Chairman

2.9 Details of Familiarization Programmes attended by Directors: The details of training programmes attended by Directors of the Bank are made available on Bankâs website under the following link: http:// www.unionbankofindia.co.in/english/familarisation. aspx

3. ANNUAL GENERAL MEETING

The Fifteenth Annual General Meeting of the Shareholders of the Bank was held on Friday, 23^rd June, 2017, where the following directors were present:

Sr. No.	Name of Director	Designation
1.	Shri Arun Tiwari	Chairman & Managing Director
2.	Shri Vinod Kathuria	Executive Director
3.	Shri Raj Kamal Verma	Executive Director
4.	Shri Atul Kumar Goel	Executive Director
5.	Shri G. K. Lath	Shareholder Director, Chairman of the Audit Committee of the Board and Member of Stakeholders Relationship Committee

4. BOARD MEETINGS

Details of Board Meetings held during the Financial Year 2017-18:

Sr. No.	Date of the Board Meeting	Total No. of Directors on the Board	No. of Directors present in the meeting
1.	25.04.2017	10	6
2.	28.04.2017	10	8
3.	08.05.2017	10	10
4.	19.05.2017	10	9
5.	22.06.2017	10	8
6.	29.06.2017	10	8
7.	27.07.2017	11	10

Sr. No.	Date of the Board Meeting	Total No. of Directors on the Board	No. of Directors present in the meeting
8.	10.08.2017	11	10
9.	29.08.2017	11	8
10.	28.09.2017	11	11
11.	27.10.2017*	11	10
12.	27.10.2017	11	10
13.	03.11.2017	11	11
14.	11.12.2017	11	9
15.	08.01.2018	12	10
16.	02.02.2018*	12	11
17.	02.02.2018	12	11
18.	03.02.2018	12	10
19.	20.02.2018*	13	10
20.	27.02.2018	13	11
21.	16.03.2018	13	11

*Strategy Meet

Details of attendance of the Directors at the Board Meetings are as below:

Name of Director	No of Meeting held during their tenure	No of Meeting attended
Shri Arun Tiwari, Chairman & Managing Director#	6	6
Shri Kewal Handa, Chairman & Part-Time Non-Official Director#	15	15
Shri Rajkiran Rai G., Managing Director & CEO	15	15
Shri Vinod Kathuria, Executive Director	21	19
Shri Raj Kamal Verma, Executive Director	21	20
Shri Atul Kumar Goel, Executive Director	21	19

Name of Director	No of Meeting held during their tenure	No of Meeting attended
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	21	16
Shri Anil Kumar Misra, RBI Nominee Director	21	8
Dr. K. Ramesha, Part-Time NonOfficial Director	21	21
Dr. Madhura Swaminathan, Part-Time Non-Official Director	7	6
Shri Rajiv Kumar Singh, Chartered Accountant Director	3	3
Dr. R. H. Dholakia, Shareholder Director	21	19
Shri G. K. Lath, Shareholder Director	21	17
Dr. Uttam Kumar Sarkar, Shareholder Director	21	18

# ShriArun Tiwari was the Chairman of the Board tiil30.06.2017 and thereafter Shri Kewal Handa was nominated as Non Executive Chairman of the Committee w.e.f. 06.07.2017.

5. COMMITTEES OF THE BOARD

The Board of Directors of the Bank has constituted various committees of Directors and/or executives to look into different areas of strategic importance in terms of Reserve Bank of India / SEBI / Govt, of India guidelines on Corporate Governance and Risk Management. The important Committees are as under -

1. Management Committee of the Board (MCB)

2. Audit Committee of the Board (ACB)

3. Supervisory Committee of Director on Risk & Asset Liability Management (SCR & ALM)

4. Special Committee on Monitoring of Frauds of Rs,1.00 crore and above (SCMF)

5. Recovery Management Committee of the Board (RMCB)

6. Customer Service Committee of the Board (CSCB)

7. HR Sub-Committee of the Board (HRSCB)

8. Stakeholders Relationship Committee (SRC)

9. IT Strategy Committee (ITSC)

10. Nomination Committee (NC)

11. Remuneration Committee (RC)

12. Directors Promotion Committee (DPC)

13. Disciplinary Proceedings Committee - Vigilance/ Non Vigilance (DPC-V)

14. Share Transfer Committee of the Board (STCB)

15. Review Committee for classification of Non Cooperative Borrower (RCNCB)

16. Review Committee on Willful Defaulters of the Bank (RCWDB)

17. Committee to decide on Election of Shareholdersâ Directors - Voting by PSBs (CESD)

18. Election Dispute Committee (EDC)

19. Credit Approval Committee-I (CAC -1)

20. Committee of Directors for Raising of Capital Fund (CDRCF)

21. Corporate Social Responsibility Committee (CSRC)

5.1 Management Committee of the Board (MCB)

5.1.1 Composition:

In pursuance of Clause 13 of the Nationalized Banks (Management & Miscellaneous Provisions) Scheme, 1970 (as amended), the Management Committee of the Board as on 31.03.2018 consists of -

- Managing Director & CEO,

- Executive Directors,

- RBI Nominee Director nominated under section 9(3)(c) and

- Three other Non-Executive Directors under Section 9 (3) (e), (f), (h) & (i) nominated by the Board for a period of six months each on rotation basis.

Shri Rajkiran Rai G., Managing Director & CEO of the Bank is the present Chairman of the Committee.

5.1.2 Functions:

Pursuant to the directives of Ministry of Finance, Government of India, Management Committee of the Board is constituted by the Board of Directors for considering various business matters viz. sanctioning/review of credit proposals, loan compromise/write-off proposals, approval of capital and revenue expenditure beyond the powers of Credit Approval Committee-1, acquisition and hiring of premises, investments, donations, etc.

5.1.3 Attendance of MCB Meetings:

During the year 2017-18, 24 meetings of MCB were held and attendance details are as under:

Name of the Director	No. of meetings held during their tenure	No. of meetings attended
Shri Arun Tiwari, Chairman & Managing Director, Chairman of the Committee #	7	7
Shri Rajkiran Rai G., Managing Director & CEO, Chairman of the Committee #	17	17
Shri Vinod Kathuria, Executive Director	24	20
Shri Raj Kamal Verma, Executive Director	24	23
Shri Atul Kumar Goel, Executive Director	24	22
Shri Anil Kumar Misra, RBI Nominee Director	24	11
Dr. K. Ramesha, Part-Time Non-Official Director	24	22
Dr. R. H. Dholakia, Shareholder Director	24	20
Dr. Uttam Kumar Sarkar, Shareholder Director	24	15

# Shri Arun Tiwari was the Chairman of the Committee till 30.06.2017 and thereafter Shri Rajkiran Rai G. was elected as Chairman of the Committee.

5.2 Audit Committee of the Board (ACB)

5.2.1 Composition:

The Audit Committee of the Board (ACB) has been constituted by the Bank as per the guidelines of Reserve Bank of India and Ministry of Finance, Government of India. The ACB consists of following members -

- Executive Director in-charge of Internal Inspection and Audit

- Nominees of Govt, of India & Reserve Bank of India and

- Two Non Executive Directors of which one should ordinarily be Chartered Accountant Director nominated u/s 9(3)(g).

Other Executive Director/s can be invitee/s to the meeting if the agenda includes any item for discussion from their domain.

Shri G. K. Lath, Shareholder Director who is a Chartered Accountant is the present Chairman of the Committee.

Company Secretary acts as secretary to the ACB in terms of Regulation 18(1)(e) of SEBI (LODR) Regulations, 2015.

5.2.2 Functions:

The ACB reviews the functions of the Bank as mandated by calendar of items issued by the RBI. The major functions of ACB are enumerated below:

1. ACB provides direction as also oversees the operation of the total audit function in the Bank. Total audit function implies the organization, operationalization and quality control of internal audit and inspection within the Bank and follow-up on the statutory / external audit of the Bank and inspection by RBI.

2. ACB reviews the internal inspection/audit functions in the Bank i.e., the system, its quality and effectiveness in terms of follow-up. It reviews the inspection reports of specialized and extra-large branches and all branches with unsatisfactory ratings. It also specially focuses on the follow-up of:-

- Inter-branch adjustment accounts

- Un-reconciled long outstanding entries in Inter-Bank accounts and Nostro accounts

- Arrears in balancing of books at various branches

- Frauds

- All other major areas of housekeeping.

3. ACB obtains and reviews quarterly reports from the Compliance Officers appointed in the Bank in terms of guidelines of RBI and SEBI.

4. Regarding statutory audits, ACB follows up on all the issues raised in the Long Form Audit Reports. It interacts with the external auditors before and after the finalization of annual / semi-annual financial accounts and on the audit reports.

5. ACB reviews the accounting policies and practices, related party transactions, Mechanism for Whistle-Blower, Management Discussion and Analysis and Quarterly and Annual Financial Results of the Bank.

5.2.3 Attendance of ACB Meetings:

The Committee met 12 times during the year 2017-18 and attendance details are as follows:-

Name of the Director	No. of meetings held during their tenure	No. of meetings attended
Shri G. K. Lath, Shareholder Director, Chairman of the Committee	12	12
Shri Kewal Handa, Chairman & Part-Time Non-Official Director	5	5
Shri Raj Kamal Verma, Executive Director	12	12
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	12	10
Shri Anil Kumar Misra, RBI Nominee Director	12	6
Shri Rajiv Kumar Singh, Chartered Accountant Director	1	1

5.3 Supervisory Committee of Directors on Risk & Asset Liability Management (SCR & ALM)

5.3.1 Composition:

The Bank has constituted Supervisory Committee of Directors on Risk and Asset Liability Management in terms of RBI guidelines. The Committee consists of the following members:

- Managing Director & CEO,

- Executive Directors and

- Three Non-Executive Directors.

Shri Kewal Handa, Non-Executive Chairman & Part-Time Non-Official Director of the Bank is the present Chairman of the Committee.

5.3.2 Functions:

The Bank has constituted a Supervisory Committee of Directors on Risk and Asset Liability Management to supervise the functions of Risk and Asset Liability Management in the Bank. The Committee is responsible for identifying, evaluating and monitoring the overall risks faced by the Bank.

5.3.3 Attendance of SCR & ALM Meeting:

The Committee has held 5 meetings during the year 2017-18 and attendance details are as under:

Name of the Director	No. of meetings held during their tenure	No. of meetings attended
Shri Arun Tiwari, Chairman & Managing Director, Chairman of the Committee #	1	1
Shri Kewal Handa, Chairman & Part-Time Non-Official Director, Chairman of the Committee #	4	4
Shri Rajkiran Rai G., Managing Director & CEO	4	3
Shri Vinod Kathuria, Executive Director	5	5
Shri Raj Kamal Verma, Executive Director	5	5
Shri Atul Kumar Goel, Executive Director	5	4
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	2	1
Dr. K. Ramesha, Part-Time Non-Official Director	3	3
Dr. R. H. Dholakia, Shareholder Director	2	2
Shri G. K. Lath, Shareholder Director	5	5
Dr. Uttam Kumar Sarkar, Shareholder Director	3	3

# ShriArun Tiwari was the Chairman of the Committee till

30.06.2017 and thereafter Shri Kewal Handa was elected as Chairman of the Committee.

5.4 Special Committee of the Board of Directors for monitoring of Fraud of Rs,1.00 crore and above (SCMF)

5.4.1 Composition:

Special Committee of the Board of Directors for monitoring of frauds of Rs,1 crore and above is constituted as perthe guidelines issued by Reserve Bank of India. At present the Audit Committee of Board (ACB) is required to oversee the internal inspection, statutory audit, inter branch/inter bank accounts and major areas of housekeeping etc. The ACB is also required to focus attention on preventive aspects and follow -up action being initiated by the bank on frauds. However, this Special Committee focuses on Monitoring and following up of cases of frauds involving amounts of Rs, 1 crore and above exclusively while ACB continues to monitor all the cases of frauds in general.

The Special Committee is constituted with following members of the Board of Directors:

- Managing Director & CEO

- Two members from the Audit Committee of the Board

- Two other members from the Board excluding RBI nominee Director

Shri Kewal Handa, Non-Executive Chairman and Part-Time Non-Official Director of the Bank is the present Chairman of the Committee.

5.4.2 Functions:

The major function of the Special Committee is to monitor and review all the cases of frauds of Rs 1 crore and above so as to:

- Identify the systemic lacunae if any that facilitated perpetration of the fraud and put in place measures to plug the same.

- Identify the reasons for delay in detection, if any and/or reporting to top management of the Bank and RBI.

- Monitor progress of CBI /Police Investigation and recovery position.

- Ensure that the staff accountability is examined at all levels in all the cases of frauds and staff side action, if required, is completed quickly without loss of time.

- Review the efficacy of the remedial action taken to prevent recurrence of frauds, such as strengthening of internal controls.

- Put in place other measures as may be considered relevant to strengthen preventive measures against frauds.

5.4.3 Attendance of SCMF Meetings:

The Committee has held 4 meetings during the year 2017-18 and attendance details are as under:

Name of the Director	No. of meetings held during their tenure	No. of meetings attended
Shri Arun Tiwari, Chairman & Managing Director, Chairman of the Committee #	1	1
Shri Kewal Handa, Chairman & Part-Time Non-Official Director, Chairman of the Committee #	3	3
Shri Rajkiran Rai G., Managing Director & CEO	3	3
Shri Raj Kamal Verma, Executive Director	4	4
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	4	1
Dr. K. Ramesha, Part-Time Non-Official Director	4	4
Dr. R. H. Dholakia, Shareholder Director	2	2
Shri G. K. Lath, Shareholder Director	2	2

# Shri Arun Tiwari was the Chairman of the Committee till

30.06.2017 and thereafter Shri Kewal Handa was elected as Chairman of the Committee.

5.5 Recovery Management Committee of the Board (RMCB)

5.5.1 Composition:

A Board level Sub Committee for Recovery Management has been formed as per Ministry of Finance, Government of India guidelines to monitor the progress in recovery on regular basis and this Committee would submit its report to the Board.

The composition of the Committee is:

- Managing Director & CEO

- Executive Directors

- Government of India Nominee Director

Shri Rajkiran Rai G., Managing Director & CEO of the Bank is the present Chairman of the Committee.

5.5.2 Functions:

To monitor the progress in recovery on regular basis and submit the report to the Board.

5.5.3 Attendance of RMCB Meetings:

The Committee has held 4 meetings during the year 2017-18 and attendance details are as under:

Name of Director	No of Meetings held during their tenure	No of Meetings attended
Shri Arun Tiwari, Chairman & Managing Director, Chairman of the Committee #	1	1
Shri Rajkiran Rai G., Managing Director & CEO, Chairman of the Committee #	3	3
Shri Vinod Kathuria, Executive Director	4	4
Shri Raj Kamal Verma, Executive Director	4	4
Shri Atul Kumar Goel, Executive Director	4	2
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	4	4

# Shri Arun Tiwari was the Chairman of the Committee till

30.06.2017 and thereafter Shri Rajkiran Rai G. was elected as Chairman of the Committee.

5.6 Customer Service Committee of the Board (CSCB)

5.6.1 Composition:

Customer Service Committee of the Board is constituted as per the guidelines issued by the Reserve Bank of India to look after the customer service in Bank. The Committee Comprises of following members:

- Managing Director & CEO

- Executive Directors

- Four Non-Executive Directors including Govt. Nominee Director

In addition, Internal Ombudsman and Two Experts also participate as special invitees in these meetings.

Shri Rajkiran Rai G., Managing Director & CEO of the Bank is the present Chairman of the Committee.

5.6.2 Functions:

The Committee is undertaking the following tasks:

i. To make suggestions on improving the quality of customer services.

ii. To review the implementation of the existing policies and procedures with a view to rationalize and simplify them & to suggest appropriate improvements to facilitate changes on an ongoing basis.

iii. To review and recommend the policies to the Board annually before the same is placed to the Board for approval.

5.6.3 Attendance of CSCB Meetings:

The Committee has held 4 meetings during the year 2017-18 and attendance details are as under:

Name of the Director	No. of meetings held during their tenure	No. of meetings attended
Shri Arun Tiwari, Chairman & Managing Director, Chairman of the Committee #	1	1
Shri Rajkiran Rai G., Managing Director & CEO, Chairman of the Committee #	3	3
Shri Kewal Handa, Chairman & Part-Time Non-Official Director	2	2
Shri Vinod Kathuria, Executive Director	4	3
Shri Raj Kamal Verma, Executive Director	4	4
Shri Atul Kumar Goel, Executive Director	4	4
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	4	2
Dr. K. Ramesha, Part-Time Non-Official Director	2	2

Name of the Director	No. of meetings held during their tenure	No. of meetings attended
Dr. R. H. Dholakia, Shareholder Director	2	1
Shri G. K. Lath, Shareholder Director	2	2
Dr. Uttam Kumar Sarkar, Shareholder Director	2	2
Dr. S. Ravindranath, Special Invitee	4	4
Dr. S. Jagannathan, Special Invitee	4	3

# Shri Arun Tiwari was the Chairman of the Committee till

30.06.2017 and thereafter Shri Rajkiran Rai G. was elected as Chairman of the Committee.

5.7 HR Sub-Committee of the Board (HRSCB)

5.7.1 Composition:

The Committee consists of âChairman & Managing Directorâ now âManaging Director & CEOâ, Executive Directors, Government Nominee Director and any two Directors nominated by the Board. In addition, two experts in Human Resources also participate as special invitees.

Shri Rajkiran Rai G., Managing Director & CEO of the Bank is the present Chairman of the Committee.

5.7.2 Functions:

To oversee & review the implementation of following aspects:

1. Overall Strategy for the Bank on HR.

- Overall manpower plan and skills gap identification.

- Systems, procedures and structures to attract and groom right talent.

- Succession planning.

2. Development of performance management system covering all staff in the Bank

- Performance assessment on transparent Key Responsibility Areas.

- System of providing developmental feedback to all staff.

3. Fine tuning of policies on HR in line with Bankâs strategy and market realities

- Reward and incentives

- Promotions

- Deployment

4. Training

- Specialist business skills training

- General retraining / reorientation for all staff

5. IT automation of all HR related activities

5.7.3 Attendance of HRSCB Meetings:

The Committee has held 4 meetings during the year 2017-18 and attendance details are as under:

Name of Director	No of Meeting held during their tenure	No of Meeting attended
Shri Arun Tiwari, Chairman & Managing Director, Chairman of the Committee#	1	1
Shri Rajkiran Rai G., Managing Director & CEO, Chairman of the Committee#	3	3
Shri Vinod Kathuria, Executive Director	4	4
Shri Raj Kamal Verma, Executive Director	4	3
Shri Atul Kumar Goel, Executive Director	4	4
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	4	4
Dr. R. H. Dholakia, Shareholder Director	4	4
Dr. Uttam Kumar Sarkar, Shareholder Director	4	2

# Shri Arun Tiwari was the Chairman of the Committee till

30.06.2017 and thereafter Shri Rajkiran Rai G. was elected as Chairman of the Committee.

5.8 Stakeholders Relationship Committee (SRC)

5.8.1 Composition:

Pursuant to the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Stakeholders Relationship Committee (SRC) has been constituted with Executive Directors and Three Non-Executive Directors.

Dr. K. Ramesha, Part Time Non Official Director is the present Chairman of the Committee.

5.8.2 Functions:

The Committee monitors the grievances and complaints of the security holders of the Bank regarding transfer of shares, non-receipt of refund orders, share certificates, dividends, etc.

5.8.3 Attendance of SRC Meetings:

The Committee has held 4 meetings during the year 2017-18 and attendance details are as under:

Name of the Director	No. of meetings held during their tenure	No. of meetings attended
Dr. K. Ramesha, Part-Time NonOfficial Director, Chairman of the Committee	4	4
Shri Kewal Handa, Chairman & Part-Time Non-Official Director	2	2
Shri Vinod Kathuria, Executive Director	4	3
Shri Raj Kamal Verma, Executive Director	4	4
Shri Atul Kumar Goel, Executive Director	4	4
Dr. R. H. Dholakia, Shareholder Director	2	2
Shri G. K. Lath, Shareholder Director	2	2
Dr. Uttam Kumar Sarkar, Shareholder Director	2	1

5.8.4 Name & Designation of Compliance Officer

Pursuant to Regulation 6 of SEBI (Listing Obligations & Disclosure Requriements) Regulations, 2015, Shri Dipak D. Sanghavi was designated as the Compliance officer of the Bank for Investor Grievances till 30.11.2017. After superannuation of Shri Dipak D. Sanghavi, Shri Mangesh Mandrekar was appointed as Company Secretary and designated as the Compliance Officer of the Bank for Investor Grievances.

5.8.5 Details of Shareholdersâ Complaints during the year 2017-18:

A comparative chart showing number of complaints received, responded and pending for the financial year ended 31.03.2018 vis-a-vis

31.03.2017 is as under:-

Particulars		For F.Y. ended 31.03.18	For F.Y. ended 31.03.17
a.	No. of shareholdersâ complaints pending at the beginning of the year	0	2
b.	No. of shareholdersâ complaints received during the year	231	249
c.	No. of shareholdersâ complaints resolved during the year	231	251
d.	No. of shareholdersâ complaints pending at the end of the year	0	0

5.9 IT Strategy Committee (ITSC)

5.9.1 Composition:

As a part of IT Governance measures, RBI has recommended creation of IT Strategy Committee of the Board to advise the Board on strategic direction on IT and to review IT Investments on behalf of the Board. The Committee consists of:

- Executive Directors

- Govt. Nominee Director (inducted on the Committee w.e.f. 28.09.2017)

- Two Non-Executive Directors one of whom shall be independent Director

- One Outside IT Expert

- Chief Information Officer (GM heading the IT function of the Bank)

Dr. Uttam Kumar Sarkar, Shareholder Director is the present Chairman of the Committee.

5.9.2 Functions:

- Approving IT strategy and policy documents.

- Ensuring that the management has put an effective strategic planning process in place.

- Ratifying that the business strategy is indeed aligned with IT strategy.

- Ensuring that the IT organizational structure complements the business model and its direction.

- Ascertaining that management has implemented processes and practices that ensure that the IT delivers value to the business.

- Ensuring IT investments represent a balance of risks & benefits and that budgets are acceptable.

- Monitoring the methods that management uses to determine the IT resources needed to achieve strategic goals and provide high level direction for sourcing & use of IT resources.

- Ensuring proper balance of IT investments for sustaining bankâs growth.

- Ensure adequate mitigation for exposure towards IT risks & controls, evaluating effectiveness of managementâs monitoring.

- Assessing Senior Managementâs performance in implementing IT strategies.

- Issuing high level policy guidance (e.g. related to risk, funding or sourcing tasks).

- Confirming whether IT or business architecture is to be designed, so as to derive maximum business value from IT

- Overseeing the aggregate funding of IT at a bank-level, and ascertaining if the management has resources to ensure the proper management of IT risks.

- Reviewing IT performance measurement and contribution of IT to business (i.e. delivering the promised value).

- To build up mechanism to undertake IT disaster management.

- To act as Board level Sub-Committee on Digital Transactions to advice, guide and monitor enhancing digital transactions of the Bank.

5.9.3 Attendance of ITSC Meetings:

The Committee has held 4 meetings during the year 2017-18 and attendance details are as under:

Name of Director	No of Meeting held during their tenure	No of Meeting attended
Dr. Uttam Kumar Sarkar, Shareholder Director, Chairman of the Committee	4	4
Shri Kewal Handa, Chairman & Part-Time Non-Official Director	2	2
Shri Vinod Kathuria, Executive Director	4	3
Shri Raj Kamal Verma, Executive Director	4	4
Shri Atul Kumar Goel, Executive Director	4	3
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	2	0
Dr. K. Ramesha, Part-Time NonOfficial Director	2	2

5.10 Nomination Committee (NC)

5.10.1 Composition:

The Reserve Bank of India has laid down specific âFit and Properâ criteria to be fulfilled by the persons being elected as directors on the Boards of the Nationalised Banks. In terms of said guidelines,

Bank has constituted a Nomination Committee consisting of three Non-Executive Directors to undertake process of due diligence to determine the fit and proper status of Shareholder Directors.

5.10.2 Functions:

- To undertake the due diligence exercise afresh and examine the âFit and Properâ status of the elected Shareholder Directors.

- To ensure whether non adherence to any of the criteria such as (i) Educational Qualification (ii) Experience and Field of expertise (iii) Track record and integrity, would hamper the existing elected director/ proposed candidate from discharging the duties as a director on the Board of the Bank. Further, the adverse notice of any authority/ regulatory agency or insolvency or default of any loan from any Bank or any Financial Institution would make the candidate unfit and improper to be a director on the Board of the Bank.

- Based on the signed declaration, this Committee should decide on the acceptance or otherwise of the candidate and make references, where considered necessary to the appropriate authority/persons, to ensure their compliance with the requirements indicated.

5.10.3 Attendance of NC Meetings:

The Committee has held one meeting during the year 2017-18 and attendance details are as under:

Name of Director	No of meeting held during their tenure	No of meeting attended
Shri Kewal Handa, Chairman & Part-Time Non-Official Director, Chairman of the Committee	1	1
Dr. Madnesh Kumar Mishra, Govt. Nominee Director	1	1
Dr. K. Ramesha, Part-Time NonOfficial Director	1	1

Shri Kewal Handa, Non-Executive Chairman & Part-Time Non-Official Director of the Bank is the present Chairman of the Committee.

5.11 Remuneration Committee (RC)

5.11.1 Composition:

Government of India (Gol) has announced a scheme of Performance Linked Incentive to the whole-time Directors of Public Sector Banks (PSBs). As per GOI communication, a Subcommittee of the Board of Directors called âRemuneration Committeeâ has been formed. The Committee is constituted with following members:

- Government Nominee Director

- RBI Nominee Director

- Two other Directors

5.11.2 Functions:

To decide upon the performance linked incentive to be paid to the whole-time Directors of the Banks in terms of the above mentioned Gol guidelines.

5.11.3 Attendance of RC Meetings:

Pursuant to Ministry of Finance, Government of India letter no. F.NO.12/1/2014-BOA dated 18.08.2015, the Key Performance Indicators (KPI) for evaluating the performance of Whole Time Directors on Board of Public Sector Banks has been changed from F.Y 2015-16 and the performance of whole-time Directors is be evaluated by a Committee chaired by the Secretary (Financial Services) based on the detailed Performance Evaluation Matrices. Therefore, the Remuneration Committee has no role now in deciding upon the performance linked incentive to be paid to whole time Directors of the Bank from FY 2015-16. Thus, no meeting of Remuneration Committee was called during the year 2017-18.

5.12 Directors Promotion Committee (DPC)

5.12.1 Composition:

Government of India vide communication F.No.4/3/1/2012-IR dated 08.12.2016 has provided autonomy to Public Sector Banks to decide the composition of selection committee for promotion process with the approval of the Board. The Board of Directors has ap

Mar 31, 2017

To The Members of Union Bank of India Report on the Financial Statements

1. We have audited the accompanying financial statements of Union Bank of India (âthe Bankâ) as at 31^st March, 2017, which comprises the Balance Sheet as at 31^st March, 2017, 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 returns of 20 branches including 1 Treasury branch, 18 Regional offices, 23 offices/centreâs audited by us, 2121 branches audited by Statutory Branch Auditors and 4 foreign branches audited by local 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 are the returns from 2137 branches, 44 regional offices and 96 offices/centreâs which have not been subjected to audit. These unaudited branches account for 4.88 per cent of advances, 24.88 per cent of deposits, 6.66 per cent of interest income and 24.41 per cent of interest expenses.

Managementâs Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements in accordance with Banking Regulation Act, 1949, accounting principles generally accepted in India along with recognition and measurement principles laid down in the Accounting Standards specified by the Institute of Chartered Accountants of India so far as they are applicable to the Bank and the guidelines and circulars issued by Reserve Bank of India from time to time. 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.

Auditorsâ 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 auditors'' 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, but not for the purpose of expressing an opinion on the effectiveness of the Bank''s internal control. An audit also includes evaluating the appropriateness of accounting policies used, 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:

a. the Balance Sheet, read with the notes thereon, is a full and fair Balance Sheet containing all the necessary particulars and is properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank as at 31^st March 2017 in conformity with accounting principles generally accepted in India;

b. 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

c. the Cash Flow Statement gives a true and fair view of the 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 Section 29 of the Banking Regulation Act, 1949.

8. 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, 1970, 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; and

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

9. We further report that:

a. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account and returns;

b. the reports on the accounts of the branch offices audited by statutory branch auditors of the Bank under Section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report;

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

FOR G. P. KAPADIA & CO. FOR ASHWANI & ASSOCIATES FOR GBCA & ASSOCIATES

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

Firm Regn. No.104768W Firm Regn. No. 000497N Firm Regn. No.103142W

(NIMESH BHIMANI) (SANJEEVA NARAYAN) (TANSUKH CHHEDA)

PARTNER PARTNER PARTNER

M.NO.030547 M.NO.084205 M.NO.047157

FOR SUNDAR SRINI& SRIDHAR FOR P A & ASSOCIATES FOR S BHANDARI & CO

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

Firm Regn. No.004201S Firm Regn. No.313085E Firm Regn. No. 000560C

(S. SRIDHAR) (DILLIP AGARWALLA) (P P PAREEK)

PARTNER PARTNER PARTNER

M.NO.025504 M.NO.055420 M.NO.071213

Place: Mumbai.

Date: 8^th May, 2017

Mar 31, 2015

1. We have audited the accompanying financial statements of Union Bank of India as at 31st March, 2015, which comprise the Balance Sheet as at 31st March, 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 19 branches, 1 Treasury Branch, 18 Regional offices and 29 offices/centers audited by us and 1738 branches including 3 foreign branches and 47 service 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 are the returns from 2324 branches and 72 offices/ centers which have not been subjected to audit. These unaudited branches account for 5.77 per cent of advances, 20.98 per cent of deposits, 4.20 per cent of interest income and 19.60 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. 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.

Auditors'' 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. 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 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. 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.

8. 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, 1970/1980, and subject also to the limitations of disclosure required therein, we report that:

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

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

FOR V. ROHATGI & CO. FOR J. GUPTA & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

FIRM REGN NO. 000980C FIRM REGN NO. 314010E

(BIPUL RASTOGI) (H. K. DATTA)

PARTNER (M. NO. 072318) PARTNER (M. NO. 012208)

FOR G. P. KAPADIA & CO. FOR GBCA & ASSOCIATES

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

FIRM REGN NO.104768W FIRM REG NO. 103142W

(NIMESH BHIMANI) (TANSUKHLAL CHHEDA)

PARTNER (M. NO. 030547) PARTNER (M. NO. 047157)

FOR ASHWANI & ASSOCIATES

CHARTERED ACCOUNTANTS FIRM REGN NO. 000497N

(ARVIND JAIN)

PARTNER (M. NO. 097549)

FOR SUNDAR SRINI & SRIDHAR

CHARTERED ACCOUNTANTS

FIRM REGN NO. 004201S

(S. SRIDHAR)

PARTNER (M. NO. 025504)

Place: MUMBAI Date : 12th May, 2015

Mar 31, 2014

1. We have audited the accompanying fi nancial statements of UNION BANK OF INDIA(the ''Bank'') as at 31st March, 2014, which comprise the Balance Sheet as at 31stMarch, 2014, and Profi t and Loss Account and the Cash Flow statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information. Incorporated in these fi nancial statements are the returns of 19 branches, 1 Treasury Branch and 18 Regional offi ces audited by us and 1575 branches including 2 foreign branches, 46 service 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 Profi t and Loss are the returns from 2277 branches, 109 offi ces/centres which have not been subjected to audit. These unaudited branches account for 8.08 per cent of advances, 31.14 per cent of deposits, 5.24 per cent of interest income and 27.37pe r cent of interest expenses.

Management''s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these fi nancial statements in accordance with the requirements of the Reserve Bank of India, the provisions of the Banking Regulation Act, 1949, and recognised accounting policies and practices, including the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditors''judgment, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial 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 Bank''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 fi nancial statements.

5. We believe that the audit evidence we have obtained is suffi cient 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 31stMarch 2014 in conformity with accounting principles generally accepted in India;

(ii) the Profi t and Loss Account, read with the notes thereon shows a true balance of profi t, 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 fl ows for the year ended on that date.

Emphasis of Matter

7. Without qualifying our opinion, we draw attention to following notes of Schedule 18 ''Notes to Accounts'':

a. Note No.5.13.1 regarding deferment of pension liability of the Bank to the extent of Rs.338 crore(previous year -Rs.676 crore) pursuant to the Reserve Bank of India circular no. DBOD.BP.BC/80/21.04.018/2010-11 dated 9th February, 2011 to the public sector banks on the provisions of AS 15, Employee Benefi ts.

b. Note No.5.13.2 regarding deferment of additional gratuity liability to the extent of Rs.65crore (previous year - Rs.130crore) pursuant to the Reserve Bank of India circular no. DBOD.BP.BC/80/21.04.018/2010-11 dated 9thFebruary, 2011 to the public sector banks on the provisions of AS 15, Employee Benefi ts.

c. Note No.4.6.3 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 Reserve Bank of India circular no.DBOD.BP.BC/77/21.04.018/2013-14 dated 20thDecember 2013.

Report on Other Legal and Regulatory Requirements

8. The Balance Sheet and the Profi t 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, 1970, 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 offi ces and branches of the Bank have been found adequate for the purposes of our audit.

10. In our opinion, the Balance Sheet, Profi t and Loss Account and Cash Flow Statement comply with the applicable accounting standards.

FOR PRICE PATT & CO FOR S G C O & CO. FOR JINDAL & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

FIRM REGN NO.002783S FIRM REGN NO. 112081W FIRM REGN NO. 000844N

(S RAMASWAMY) (K V S SHYAM SUNDER) (AKHIL JINDAL)

PARTNER (M.NO. 025918) PARTNER (M.NO. 015747) PARTNER (M.NO. 090515)

FOR SHAH GUPTA & CO. FOR V. ROHATGI & CO. FOR J. GUPTA & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

FIRM REGN NO. 109574W FIRM REGN NO. 000980C FIRM REGN NO 314010E

(VIPUL K CHOKSI) (VANDANA RASTOGI) (H.K.DATTA)

PARTNER (M.NO. 037606) PARTNER (M.NO. 086956) PARTNER (M.NO. 012208)

Place : MUMBAI

Date : 8th May, 2014

Mar 31, 2013

1. We have audited the accompanying financial statements of Union Bank of India as at 31st March, 2013, which comprise the Balance Sheet as at March 31, 2013, 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 19 branches, 1 Treasury Branch and 18 Regional offices audited by us and 1364 branches including 2 foreign branches , 46 service 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 are the returns from 2128 branches, 81 offices/centres which have not been subjected to audit. These unaudited branches account for 8.54 per cent of advances, 29.62 per cent of deposits, 6.01 per cent of interest income and 29.15 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. 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.

Auditors'' 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. 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 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 No.5.13 of Schedule 18, describes

a. regarding deferment of pension liability of the Bank to the extent of Rs.676.09 crore(previous year - Rs.1014.13 crore) pursuant to the circular issued by the Reserve Bank of India to the public sector banks on the provisions of AS 15, Employee Benefits (circular no. DBOD.BP.bC/80/21.04.018/2010-11 dated February 9, 2011) on re-opening of Pension Option to Employees of Public Sector Banks.

b. regarding deferment of additional gratuity liability which arose on enhancement of Gratuity limit from Rs.3.50 lacs to Rs.10 lacs amounting to Rs.65 crore has been charged to the Profit & Loss account with the balance of Rs.130 crore being carried forward to be charged over the next 2 years.

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, 1970/1980, and subject also to the limitations of disclosure required therein, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the 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 G.S. MATHUR & CO FOR PRICE PATT & CO FOR SINGRODIA GOYAL & CO

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

FIRM REGN NO.008744N FIRM REGN NO.002783S FIRM REGN.NO.112081W

(RAJIV KUMAR WADHAWAN) (S. BALASUBRAMANIAN) (K.V.S.SHYAM SUNDER)

PARTNER (M.NO.091007) PARTNER ( M.NO.25413) PARTNER ( M.NO.015747)

FOR JINDAL & CO FOR SHAH GUPTA & CO FOR V.ROHATGI & CO

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

FIRM REGN NO.000844N FIRM REGN NO.109574W FIRM REGN.NO.000980C

(AKHIL JINDAL) (VIPUL K. CHOKSI) (VANDANA RASTOGI)

PARTNER (M.NO.090515) PARTNER ( M.NO.037606) PARTNER ( M.NO.086956)

Place: MUMBAI

Date : 9th May, 2013

Mar 31, 2012

1. We have audited the attached Balance Sheet of Union Bank of India as at 31st March, 2012, the Profit and Loss Account and Cash Flow Statement annexed thereto for the year ended on that date, in which are incorporated the returns of (i) 19 Branches, 1 Treasury Branch, and 18 Regional Offices audited by us (ii) 2169 Branches including one foreign branch and 44 Service Branches audited by Branch auditors, (iii) 1014 unaudited branches and 67 offices / centres not subjected to audit. 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. These un-audited branches account for 1.95 % of advances, 8.99 % of deposits, 1.23 % of interest income and 7.49 % of interest expenses.

2. These financial statements are the responsibility of the Bank's Management. Our responsibility is to express an opinion based on our audit.

3. We conducted our audit in accordance with 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

4. Emphasis of Matter

Without qualifying our opinion, we draw attention to Note No.5.13.1 of Schedule 18, which describes deferment of pension liability of the Bank to the extent of Rs.1014.13 crores pursuant to the circular issued by the Reserve Bank of India to the public sector banks on the provisions of AS 15, Employee Benefits (circular no. DBOD.BP.BC/80/21.04.018/2010-11 dated February 9, 2011) on Re-opening of Pension Option to Employees of Public Sector Banks.

5. Subject to the limitations of the audit indicated in paragraph 1 above and as required by Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and subject to the limitations of disclosure required therein;

We report that

a) 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.

b) In our opinion and to the best of our information and according to the explanations given to us and as shown by the books of the bank maintained in accordance with the generally accepted accounting principles in India:

(i) The Balance Sheet read with the notes thereon and significant accounting policies is a full and fair Balance Sheet containing the necessary particulars, and is properly drawn up so as to exhibit a true and fair view of the affairs of the Bank as at 31st March, 2012.

(ii) The Profit and Loss Account read with the notes thereon and significant accounting policies shows a true balance of the Profit for the year ended 31st March, 2012.

(iii) The Cash Flow Statement gives a true and fair view of the cash flows for the year ended 31st March, 2012.

c) In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable Accounting Standards.

d) 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.

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

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

For J.L.SENGUPTA & CO For ARUN K. AGARWAL & ASSOCIATES For OM PRAKASHS. CHAPLOT & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

(S. R. ANANTHAKRISHNAN) (VIMAL KUMAR JAIN) (MAHAVEER CHAPLOT)

PARTNER (M. No. 18073) PARTNER (M. No.86657) PARTNER (M. No.403633)

Firm Regn. No.: 307092E Firm Regn. No.: 003917N Firm Regn. No.: 000127C

For G. S. MATHUR & CO. For PRICE PATT & CO. For SINGRODIA GOYAL & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

(RAJIV KUMAR WADHAVAN) (M. NAGANATHAN) (K.V.S. SHYAM SUNDER)

PARTNER (M. No.091007) PARTNER (M. No.7547) PARTNER (M. No.015747)

Firm Regn. No.: 008744N Firm Regn. No.: 002783S Firm Regn. No.: 112081W

Place: MUMBAI

Date : 9th May, 2012

Mar 31, 2011

1. We have audited the accompanying financial statements of Union Bank of India as at March 31, 2011, which comprise the Balance Sheet as at March 31, 2011, and Profit and Loss Account and the cash flow statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information. Incorporated in these financial statements are the returns of 20 branches audited by us and 2385 branches (including one foreign branch) 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 Statement of Profit and Loss are the returns from 611 branches which have not been subjected to audit. These unaudited branches account for 0.68% of advances, 4.21% of deposits, 0.37% of interest income and 3.13% of interest expenses.

Managements Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements in accordance with the Banking Regulation Act, 1949 of India. 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.

Auditors 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 disclosure in the financial statements. The procedures selected depend on the auditors 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 Banks 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 management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

6. Without qualifying our opinion, we draw attention to Note No.4 of schedule 18, which describes deferment of pension liability of the Bank to the extent of Rs. 1352.17 crore pursuant to the circular issued by the Reserve Bank of India to the public sector banks on the provisions of AS 15, Employee benefits (circular no. DBOD.BP.BC/80/21.04.018/2010-11 dated February 9, 2011) on Re-opening of Pension Option to Employees of Public Sector Banks.

7. In our opinion, as shown by the books of the bank, 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 the 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 the 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.

Report on Other Legal and Regulatory Requirements:

8. The Balance Sheet and the Profit and Loss Account have been drawn up in Forms Rs.A and Rs.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, 1970, 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 offces 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 G. D. APTE & CO. For JAGANNATHAN & SARABESWARAN For ARUN K. AGARWAL & ASSOCIATES

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

(CHETAN R. SAPRE) (P S NARASIMHAN) (VIMAL KUMAR JAIN)

PARTNER (M. No. 116952) PARTNER (M. No.20936) PARTNER (M. No.86657)

Firm Regn. No.: 100515W Firm Regn. No.: 001204S Firm Regn. No.: 003917N

For J. L. SENGUPTA & CO. For OM PRAKASH S. CHAPLOT & CO. For G. S. MATHUR & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

(S. R. ANANTHAKRISHNAN) (MAHAVEER CHAPLOT) (RAJIV KUMAR WADHAVAN)

PARTNER (M. No.18073) PARTNER (M. No.403633) PARTNER (M. No.091007)

Firm Regn. No.: 307092E Firm Regn. No.: 000127C Firm Regn. No.: 008744N

Place : MUMBAI Date : 6th May, 2011

Mar 31, 2010

1. We have audited the attached Balance Sheet of Union Bank of India as at 31st March, 2010, the Profi t and Loss Account and Cash Flow Statement annexed thereto for the year ended on that date, in which are incorporated the returns of 19 branches, 1 Treasury Branch, 18 Regional Offi ces audited by us and 2176 branches, 34 Service Branches and 1 Foreign Branch audited by other auditors, 609 unaudited branches and 84 offi ces centres, the returns of which are certifi ed by the Branch Manager. 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. These un-audited branches account for 1.09 % of advances, 4.61 % of deposits, 0.55 % of interest income and 3.15 % of interest expenses. These fi nancial statements are the responsibility of the Banks Management. Our responsibility is to express an opinion based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material mis- statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the Management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. Sub ect to the limitations of the audit indicated in paragraph 1 above and as required by Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and sub ect to the limitations of disclosure required therein

We report that

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

(b) In our opinion and to the best of our information and according to the explanations given to us and as shown by the books of the bank maintained in accordance with the generally accepted accounting principles in India:

(i) The Balance Sheet read with the notes thereon and signifi cant accounting policies is a full and fair Balance Sheet containing the necessary particulars, and is properly drawn up so as to exhibit a true and fair view of the affairs of the Bank as at 31st March, 2010.

(ii) The Profi t and Loss Account read with the notes thereon and signifi cant accounting policies shows a true balance of the Profi t for the year ended 31st March, 2010.

(iii) The Cash Flow Statement gives a true and fair view of the cash fl ows for the year ended 31st March, 2010.

(c) 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.

(d) The transactions of the Bank which have come to our notice have been within the powers of the Bank.

(e) The returns received from the offi ces and branches of the Bank have generally been found adequate for the purposes of our audit.

For CHANDABHOY & JASSOOBHOY For G.D. APTE & CO. For JAGANNATHAN & SARABESWARAN

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

(AMBESH A. DAVE) (CHETAN R. SAPRE) (P S NARASIMHAN)

PARTNER (M. No. 49289) PARTNER (M. No. 116952) PARTNER (M. No. 20936)

Firm Regn. No.: 101647W Firm Regn. No.: 100515W Firm Regn. No.: 001204S

For ARUN K. AGARWAL & ASSOCIATES For J. L. SENGUPTA & CO. For OM PRAKASH S. CHAPLOT & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

(ARUN AGARWAL) (S. R. ANANTHAKRISHNAN) (MAHAVEER CHAPLOT) PARTNER (M. No. 082899) PARTNER (M. No. 18073) PARTNER (M. No. 403633) Firm Regn. No.: 003917N Firm Regn. No.: 307092E Firm Regn. No.: 000127C

Place : MUMBAI Date : 6th May, 2010

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