Auditor Report of Karur Vysya Bank Ltd.

Mar 31, 2024

1. We have audited the accompanying financial statements
of The Karur Vysya Bank Limited (the Bank), which
comprise the Balance Sheet as at March 31, 2024, 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) 22 branches including Treasury Branch and Expense
Management Cell audited by us and

ii) 908 branches audited by statutory branch auditors
located across India.

2. In our opinion and to the best of our information and
according to the explanations given to us, and based on
the consideration of the reports of the statutory branch
auditors as referred to in paragraph 19 below, the
aforesaid financial statements, read with notes thereon,
give the information required by the Banking Regulation
Act, 1949 as well as the Companies Act, 2013 (‘the
Act''), as amended in the manner so required for banking
companies and circulars and guidelines issued by the
Reserve Bank of India (‘RBI''), in the manner so required
for banking companies and give a true and fair view and
are in conformity with the accounting principles generally
accepted in India including the Accounting Standards
prescribed under section 133 of the Act read with
Companies (Accounting Standards) Rules, 2021, of the
state of affairs of the Bank as at March 31, 2024, its profit
and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit of the financial statements in
accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. Our responsibilities
under those Standards are further described in the
‘Auditor''s Responsibilities for the Audit of the Financial
Statements'' section of our report. We are independent
of the Bank in accordance with the Code of Ethics issued
by the Institute of Chartered Accountants of India

together with 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 prescribed under
section 133 of the Act read with Companies (Accounting
Standards) Rules, 2021, provisions of section 29 of the
Banking Regulation Act, 1949, circulars and guidelines
issued by 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 and that obtained by
the statutory branch auditors, in terms of their reports
referred in paragraph 19 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, and based on the consideration of
the reports of the statutory branch auditors as referred
to paragraph 19 below, were of most significance in our
audit of the financial statements for the financial year
ended March 31, 2024. These matters were addressed
in the context of our audit of the financial statements as
a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed
the matter is provided in that context.

5. We have determined the matters described below to be
the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the
Auditor''s responsibilities for the audit of the financial
statements section of our report, including in relation
to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our
assessment of the risks of material misstatement of the
financial statements. The results of our audit procedures,
including the procedures performed to address the
matters below, provide the basis for our audit opinion on
the accompanying financial statements.

A. Identification of Non-Performing Assets (‘NPA'')
and Provisions on Advances
Significant estimates and judgment involved
Key Audit Matter

Identification of Non-Performing Assets (“NPA") and
provisions in respect of NPAs and restructured advances
are made based on management''s assessment in
accordance with norms, circulars and directions issued by
the RBI on Prudential Norms on Income Recognition, Asset
Classification and Provisioning pertaining to Advances
from time to time.

The provision on NPA is based on the valuation of the
security available and also requires management estimates
and judgements. In case of restructured accounts, provision
is made for diminution in fair value of restructured loans,
in accordance with the RBI guidelines.

Accordingly, our audit focused on identification of NPAs
and provision on advances as a key audit matter because
of the level of management estimates and judgment
involved in determining the provision and the valuation of
the security of the NPA loans and the resultant impact on
the financial statements of the Bank.

Auditor’s Response

Our key audit approach included assessing the design,
implementation and operating effectiveness of key
internal controls and substantive audit procedures over
approval, recording and monitoring of loans, assessing the
reliability of documentation, measurement of provisions,
identification of NPA accounts, and Valuation of Security
for NPA accounts along with basis and rationale for various
other management information''s.

We have read the Bank''s policies for NPA identification
and provisioning and assessing compliance with the
IRAC norms.

We have evaluated details for a sample of exposures
for identification of NPA and calculation of Loan Loss
provisions including valuation of primary and collaterals as
at March 31, 2024 involving certain degree of estimation.

We have evaluated and understood the Bank''s internal
control systems completeness, accuracy, and relevance of

data and to ensure that the same is in compliance with the
RBI guidelines, circulars and directions on the Prudential
Norms on Income Recognition, Asset Classification &
Provisioning issued from time to time.

We also selected samples to test potential cases of “ever-
greening" of loans.

We tested on a samples basis to ensure completeness
of documentation, adherence of the approval process
to the Bank''s Policy and board minutes, credit review of
customers, review of Special Mention Accounts (SMA)
reports in RBI''s Central Repository of Information on Large
Credits (CRILC) and other related documents including
evaluation of the past trends of management judgement,
governance, and review of internal control. Held discussion
with the management of the Bank on sectors wherein
there has been stress and the steps taken by the Bank to
mitigate such sectorial risks.

Additionally, the Bank makes provisions on exposures that
are not classified as NPAs including advances in certain
sectors and identified advances or group advances that
can potentially slip into NPA. These are classified under
‘Other liabilities''.

We have also assessed disclosure requirements for
classification and provisioning of NPAs in accordance with
RBI circulars including those issued specifically issued for
Covid-19 related matters.

B. Information Technology - IT Systems and
Controls
Key Audit Matter

The Bank''s operations utilise many independent and inter¬
dependent information technology systems for processing
and recording large volume of transactions in numerous
locations on a daily basis. As a result, there is a high
degree of reliance and dependency on such IT systems
for financial reporting process of the Bank. Controls
over access and changes to IT systems are critical to the
recording of financial information and the preparation of a
financial statements which provides a true and fair view of
the Bank''s financial position and performance. Appropriate
automated general and application controls are required to
ensure that such IT systems and applications are able to
process the data, as required, completely, accurately and

consistently, which directly impacts the completeness and
accuracy of financial reporting.

The IT systems and controls, as they impact the financial
recording and reporting of transactions, is a key audit
matter as our audit approach could significantly differ
depending on the effective operation of the Bank''s
IT controls.

Auditor’s Response

We tested the technology control environment for key
IT applications (systems) used in processing significant
transactions and recording balances in the general ledger.
We also tested automated controls embedded within these
systems which link the technology-enabled business
processes. Our further audit procedures included:

• Assessing the governance and higher-level controls
across the IT Environment, including those regarding
policy design, review and awareness, and IT Risk
Management practices;

• Design and operating effectiveness testing of
controls across the User Access Management
Lifecycle, Change Management as well as
effectiveness testing of automated business process
controls including segregation of duties;

• Design and operating effectiveness testing of
controls to enable Change Management including
how changes are initiated, documented, approved,
tested and authorised prior to migration into the
production environment of critical IT Applications.
We assessed the appropriateness of users with
access to release changes to IT application
production environments in the Bank;

Reviewing effectiveness of mappings and flagging of
financial transactions, and automated reconciliation
controls (both between systems and intra-system); and

Data integrity of critical system reporting used by us
in our audit to select samples and analyse data used by
management to generate financial reporting.

C. Direct and Indirect Taxes
Key Audit Matter

This matter has been identified as a key audit matter due
to the significant level of management judgment required
in the estimation of provision for taxes including any
write back of provisions, due to factors like uncertain tax
positions and provision for tax involves interpretation of
various rules and law. It also involves consideration of on¬
going disputes and disclosures of related contingencies.

Auditor’s Response

Our audit procedures to test uncertain tax positions
included understanding processes, evaluation of design
and implementation of controls and testing of operating
effectiveness of the bank''s controls over provision for
taxation, assessment of uncertain tax positions and
disclosure of contingencies.

We have obtained details of completed tax assessments
and demands from the management of the bank.

We discussed with appropriate senior management
personnel, relied upon opinion given by tax specialists,
evaluated the management''s underlying key assumptions
in estimating the tax provisions and independently
assessed management''s estimate of the possible outcome
of the disputed cases.

We considered legal precedence and other rulings in
evaluating management''s position on these uncertain
tax positions, the provisions made, and/or write back of
the provisions.

For those matters where management concluded that
no provision should be recorded, we also considered the
adequacy and completeness of the banks disclosures made
in relation to contingent liabilities.

Information Other than the Financial Statements and
Auditors’ Report thereon

6. The Bank''s Board of Directors is responsible for the
other information. The other information comprises the
Corporate Overview, Directors'' Report including annexures
to Directors'' Report, Management Discussion and Analysis,
Basel III - Pillar 3 disclosures and Corporate Governance
report included in the Annual Report, but does not include

the financial statements and our auditor''s report thereon.
The other information is expected to be made available to
us after the date of this auditor''s report.

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

8. In connection with our audit of the financial statements,
our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider
whether such other information is materially inconsistent
with the financial statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated.

9. 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 Financial Statements

10. The Bank''s Board of Directors is responsible for the
matters stated in Section 134(5) of the Act with respect
to the preparation of these financial statements that give
a true and fair view of the financial position, financial
performance and cash flows of the Bank in accordance
with the accounting principles generally accepted in India,
including the Accounting Standards prescribed under
section 133 of the Act read with Companies (Accounting
Standards) Rules, 2021 in so far as they apply to the
Bank and provisions of Section 29 of the Banking
Regulation Act, 1949 and circulars and guidelines issued
by the RBI from time to time. This responsibility also
includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding
of the assets of the Bank and for preventing and detecting
frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal
financial 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.

11. In preparing the financial statements, the Board of
Directors 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.

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

Auditor’s Responsibilities for the Audit of the Financial

Statements

13. 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.

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

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

• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances. Under Section
143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Bank has

adequate internal financial controls system with
reference to financial statements in place and the
operating effectiveness of such controls.

• Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures in the financial
statements made by management.

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

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

• Obtain sufficient appropriate audit evidence
regarding the financial information of the Bank
to express an opinion on the financial statements.
We are responsible for the direction, supervision
and performance of the audit of the financial
information of the Bank and such branches included
in the financial statements, of which we are the
independent auditors. For the other branches
included in the financial statements, which have
been audited by statutory branch auditors, such
branch auditors remain responsible for the direction,
supervision and performance of the audits carried
out by them. We remain solely responsible for our
audit opinion.

15. Materiality in the magnitude of the misstatements in the

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.

16. 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.

17. 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.

18. 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 for the financial year ended March 31, 2024
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

19. We did not audit the financial statements / information
of 908 domestic branches including processing centres
included in the financial statements of the Bank whose
financial statements / financial information reflects total
assets of ^ 94,817.00 Crore at March 31, 2024 and
total revenue of ^. 9087.14 Crore for the year ended
on that date, as considered in the financial statements.
These branches and processing centres cover 77.25%
of advances, 88.88% of deposits, 58.74% of non¬
performing assets as on March 31, 2024 and 92.14% of
revenue for the year ended March 31, 2024. The financial
statements/ information of these branches have been

audited by the statutory branch auditors whose reports
have been furnished to us and in our opinion on the
financial statements, in so far as it relates to the amounts
and disclosures included in respect of branches, and our
report in terms of Section 143(3) of the Act, in so far as it
relates to the aforesaid branches, are based solely on the
report of such statutory branch auditors.

20. Our opinion on the financial statements, and our report
on other legal and regulatory requirements below, are not
modified in respect of the above matters with respect to
our reliance on the work done by and the reports of the
statutory branch auditors.

Report on Other Legal and Regulatory Requirements

21. The Balance Sheet and the Profit and Loss Account have
been drawn up in accordance with Section 29 of the
Banking Regulation Act, 1949 and Accounting Standards
as per section 133 of the Act read with Companies
(Accounting Standards) Rules, 2021.

22. As required by sub-section (3) of section 30 of the Banking
Regulation Act, 1949 and communication received by the
Bank from Reserve Bank of India, and on the consideration
of the reports of the statutory branch auditors as referred
in paragraph 19 above, we report that:

a) we have obtained all the information and explanations
which, to the best of our knowledge and belief, were
necessary for the purposes of our audit and have
found them to be satisfactory;

b) the transactions of the Bank, which have come to our
notice, have been within the powers of the Bank; and

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

23. With respect to the matter to be included in the auditor''s
report under section 197(16) of the Act, we report that
since the Bank is a banking company, as defined under the
Banking Regulation Act, 1949; the reporting under section
197(16) in relation to whether the remuneration paid by
the Bank is in accordance with the provisions of section
197 of the Act and whether any excess remuneration

has been paid in accordance with the aforesaid section is
not applicable.

24. As required by Section 143(3) of the Act, based on our
audit and on the consideration of the reports of the
statutory branch auditors as referred to in paragraph 19
above, we further report to the extent applicable that:

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

(b) In our opinion, proper books of accounts 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 the branches not
visited by us.

(c) the reports on the accounts of the branch offices of
the Bank audited under section 143(8) of the Act by
the statutory branch auditors of the Bank have been
sent to us and have been properly dealt with by us in
preparing this report.

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

(e) In our opinion, the aforesaid financial statements
comply with the Accounting Standards specified
under section 133 of the Act read with Companies
(Accounting Standards) Rules, 2021 to the extent
they are not consistent with the policies prescribed
by the RBI.

(f) On the basis of the written representation received
from the directors and taken on record by the Board
of Directors, none of the directors is disqualified
as on March 31, 2024 from being appointed as a
director in terms of section 164(2) of the Act.

(g) With respect to the adequacy of internal financial
controls with reference to the financial statements
of the Bank and the operating effectiveness of
such controls, our separate report in Annexure A
is attached.

(h) The entity being a banking company as defined under
Banking Regulation Act, 1949, the remuneration to
its directors during the year ended March 31, 2024
has been paid / provided by the Bank in accordance
with the provisions of Section 35B(1) of the Banking
Regulation Act, 1949.

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

i. The Bank has disclosed the impact of pending
litigations on its financial position in Schedule
12, Note 14.11 of Schedule 18 of the
financial statements;

ii. The Bank has made provision as required under
the applicable law or accounting standards,
for material foreseeable losses, if any, on long
term contracts including derivative contracts
as detailed in Schedule 12 and Note 7 of
Schedule 18 to the financial statements and;

iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund
during the year ended March 31, 2024;

iv. a) The management has represented that,

to the best of its knowledge and belief,
other than as disclosed in the Note 15 of
Schedule 18 to the financial statements,
no funds have been advanced or loaned
or invested (either from borrowed funds
or share premium or any other sources
or kind of funds) by the Bank to or in any
other person(s) or entity(ies), including
foreign entities (“Intermediaries”), with
the understanding, whether recorded
in writing or otherwise, that the
Intermediary shall, whether, directly or
indirectly lend or invest in other persons
or entities identified in any manner
whatsoever by or on behalf of the Bank

(“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;

b) The management has represented
that, to the best of its knowledge and
belief, other than as disclosed in the
Note 15 of Schedule 18 to the financial
statements, no funds have been
received by the Bank from any person(s)
or entity(ies), including foreign
entities (“Funding Parties”), with the
understanding, whether recorded in
writing or otherwise, that the Bank
shall, whether, directly or indirectly, lend
or invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
(“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures that were
considered reasonable and appropriate
in the circumstances, nothing has come
to our notice that has caused us to
believe that the representations under
sub-clause (a) and (b) contain any
material misstatement.

v. As stated in note 1.2 of Schedule 18 and as

disclosed in Profit and Loss Account under

‘Appropriations'' to the Financial Statements:

(a) The final dividend proposed in the
previous year, declared, and paid
by the Bank during the year is in
accordance with Section 123 of the Act,
as applicable.

(b) The Bank did not pay any interim
dividend during the year.

(c) The Board of Directors of the Bank have
proposed final dividend for the year
which is subject to the approval of the
members at the ensuing Annual General

Meeting. The amount of dividend
proposed is in accordance with section
123 of the Act, as applicable, until the
date of this report.

vi. Reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 is applicable
from April 01, 2023.

Based on our examination which included test
checks the Company has used accounting
softwares for maintaining its books of
account, which have a feature of recording
audit trail (edit log) facility and the same has
operated throughout the year for all relevant
transactions recorded in the respective
software subject to the following observations:

a. The feature of recording audit trail (edit
log) facility was enabled at the database
level of the accounting software used
relating to Core Banking Solution and

investments for a short period of time.
The Bank has deployed a Database
Access Management Tool (DAM) which
records the audit trail captured in the
Software''s database on a real time
basis which also gets archived. Based
on the above, the audit trail (edit log)
requirement is operative from April 01,
2023 to March 31, 2024.

b. Audit trail (edit log) facility with respect
to Digital Gold Loan, PeopleSoft HRMS
and Bullion Precious Metal was enabled
at database level / captured in DAM tool
from June 13, 2023, July 09, 2023 and
February 01, 2024 respectively.

Further, for the periods where audit trail (edit log)
facility was enabled and operated throughout the
year for the respective accounting software, we
did not come across any instance of the audit trail
feature being tampered with.

For Sundaram & Srinivasan, For R.G.N. Price & Co.,

Chartered Accountants Chartered Accountants

FRN:004207S FRN:002785S

P. Menakshi Sundaram Sriraam Alevoor M

Partner Partner

M.No. 217914 M.No. 221354

UDIN: 24217914BKBOTY3030 UDIN: 24221354BJZZXZ2691

Place : Karur Place : Karur

Date : May 13, 2024 Date : May 13, 2024

---

Mar 31, 2023

Karur Vysya Bank Limited

Report on Audit of the Financial StatementsOpinion

1. We have audited the accompanying financial statements of The Karur Vysya Bank Limited (‘the Bank''), which comprise the Balance Sheet as at 31 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) 22 branches including Treasury Branch and Expense Management Cell audited by us and

ii) 864 branches audited by statutory branch auditors located across India.

2. In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of the reports of the statutory branch auditors as referred to in paragraph 19 below, the aforesaid financial statements, read with notes thereon, give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013 (‘the Act''), as amended in the manner so required for banking companies and circulars and guidelines issued by the Reserve Bank of India (‘RBI''), in the manner so required for banking companies and give a true and fair view and are in conformity with the accounting principles generally accepted in India including the Accounting Standards prescribed under section 133 of the Act read with Companies (Accounting Standards) Rules, 2021, of the state of affairs of the Bank as at 31 March 2023, its profit and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor''s Responsibilities for the Audit of the Financial Statements'' section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with 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

prescribed under section 133 of the Act read with Companies (Accounting Standards) Rules, 2021, provisions of section 29 of the Banking Regulation Act, 1949, circulars and guidelines issued by 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 and that obtained by the statutory branch auditors, in terms of their reports referred in paragraph 19 below 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, and based on the consideration of the reports of the statutory branch auditors as referred to paragraph 19 below, were of most significance in our audit of the financial statements for the financial year ended 31 March 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

5. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

A. Identification of Non-Performing Assets (‘NPA'') and Provisions on Advances

Significant estimates and judgment involved

Key Audit Matter

Identification of Non-Performing Assets (“NPA”), restructured advances, and provisions on advances are made in accordance with norms, circulars and directions issued by Reserve Bank of India on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances from time to time, which also requires management''s assessment as well as significant judgements and estimates associated with assessed

significant risk of mis-statement.

Since the identification of NPAs, restructured advances and provisioning on advances require a high level of estimation/judgement and given its significance to the overall audit due to stakeholder and regulatory focus as well as being a significant area, we have ascertained this as a key audit matter.

Auditor’s Response

Our key audit approach included assessing the design, implementation and operating effectiveness of key internal controls and substantive audit procedures over approval, recording and monitoring of loans, assessing the reliability of documentation, measurement of provisions, identification of NPA / restructured accounts, and Valuation of Security for such accounts along with basis and rationale for various other management information.

We have read the Bank''s policies for NPA, Restructured Advances identification and provisioning on advances and assessing compliance with the IRAC & other RBI norms.

We have evaluated details for a sample of exposures for identification of NPA, restructured advances and calculation of provision on advances including valuation of primary and collaterals as at 31 March 2023 involving certain degree of estimation.

We have evaluated the Bank''s internal control systems completeness, accuracy, and relevance of data and to ensure that the same is in compliance with the RBI guidelines, circulars and directions on the Prudential Norms on Income Recognition, Asset Classification & Provisioning issued from time to time.

We also selected samples to test potential cases of “ever-greening” of loans.

We tested on a samples basis to ensure completeness of documentation, adherence of the approval process to the Bank''s Policy and board minutes, credit review of customers, review of Special Mention Accounts (SMA) reports in RBI''s Central Repository of Information on Large Credits (CRILC) and other related documents including evaluation of the past trends of management judgement, governance, and review of internal control. Held discussion with the management of the Bank on sectors wherein

there has been stress and the steps taken by the Bank to mitigate such sectorial risks.

Additionally, the Bank makes provisions on exposures that are not classified as NPAs including advances in certain sectors and identified advances or group advances that can potentially slip into NPA. These are classified under ‘Other liabilities''.

We have also assessed disclosure requirements for classification and provisioning of NPAs, restructured & other advances in accordance with RBI circulars including those issued specifically issued for Covid-19 related matters.

B. Information Technology - IT Systems and Controls Key Audit Matter

The Information Technology environment of the Bank is complex. The Bank''s operations utilises many independent and inter-dependent information technology systems for processing and recording large volume of transactions in numerous locations on a daily basis. As a result, there is a high degree of reliance and dependency on such IT systems for financial reporting process of the Bank. Controls over access and changes to IT systems are critical to the recording of financial information and the preparation of a financial statements. Appropriate automated general and application controls are required to ensure that such IT systems and applications are able to process the data, as required, completely, accurately and consistently, which directly impact the completeness and accuracy of financial reporting.

The IT systems and controls is identified as a key audit matter because of high level of automation, significant number of systems being used and complexity of the IT infrastructure and its impact on the financial reporting system since our audit approach could significantly differ depending on the effective operation of the Bank''s IT controls.

Auditor’s Response

We tested the technology control environment for key IT applications (systems) used in processing significant transactions and recording balances in the general ledger. We also tested automated controls embedded within these systems which link the technology-enabled business processes. Our further audit procedures included:

• Assessing the governance and higher-level controls across the IT Environment, including those regarding policy design, review and awareness, and IT Risk Management practices;

• Evaluation and understanding the IT systems being used by the Bank for its Core Banking and other operations.

• Assessing operative effectiveness of key controls within various business processes. It included testing of integrity of system interfaces, completeness and accuracy of the data, system reconciliation controls and automated calculations.

• Design and operating effectiveness testing of controls across the User Access Management, Change Management as well as effectiveness testing of automated business process controls including segregation of duties

• Design and operating effectiveness testing of controls to enable Change Management including how changes are initiated, documented, approved, tested and authorised prior to migration into the production environment of critical IT Applications. We assessed the appropriateness of users with access to release changes to IT application production environments in the Bank;

Reviewing effectiveness of mappings and flagging of financial transactions, and automated reconciliation controls (both between systems and intra-system); and

Data integrity of critical system reporting used by us in our audit to select samples and analyse data used by management to generate financial reporting.

C. Direct and Indirect Taxes Key Audit Matter

The Bank assesses the need to make a provision or disclose a contingency on a case-to-case basis considering the underlying facts of each matter and the level of probability of outflow of economic resources.

Accordingly, this matter has been identified as a key audit matter due to the significant level of management judgment and assumptions to determine the possible outcome of disputes that is fundamentally required in the estimation of provision for taxes ( or write back ), wherein

factors like uncertain tax positions and interpretation of various rules and law are also considered.

Auditor’s Response

Our audit procedures to test uncertain tax positions included understanding processes, evaluation of design and implementation of controls and testing of operating effectiveness of the bank''s controls over, assessment of uncertain tax positions for likely outcome that result in decision for provision for taxation / disclosure of contingencies.

We have obtained details of ongoing & open tax assessments and demands by the authorities from the management of the bank.

We discussed with appropriate senior management personnel, perused the opinion given by tax specialists, evaluated the management''s underlying key assumptions in estimating the tax provisions / need for disclosure of contingent liability and independently assessed management''s estimate of the possible outcome of the disputed cases.

We considered legal precedence and other rulings in evaluating management''s position on these uncertain tax positions, the provisions made, and/or write back of the provisions.

For those matters where management concluded that no provision should be recorded, we also considered the adequacy and completeness of the banks disclosures made in relation to contingent liabilities. We also obtained necessary representation from the bank''s management with regard to the provisioning and disclosures in respect of the claims and litigations.

Information Other than the Financial Statements and Auditors’ Report thereon

6. The Bank''s Board of Directors is responsible for the other information. The other information comprises the Corporate Overview, Directors'' Report including annexures to Directors'' Report, Management Discussion and Analysis, Basel III - Pillar 3 disclosures and Corporate Governance report included in the Annual Report, but does not include the financial statements and our auditor''s report thereon. The other information is expected to be made available to us after the date of this auditor''s report.

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

8. In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

9. 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 Financial Statements

10. The Bank''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act read with Companies (Accounting Standards) Rules, 2021 in so far as they apply to the Bank and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the RBI from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial 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.

11. In preparing the financial statements, the Board of Directors 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.

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

Auditor’s Responsibilities for the Audit of the Financial Statements

13. 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.

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

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

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

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the financial statements made by management.

• Conclude on the appropriateness of management''s use of

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

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

• Obtain sufficient appropriate audit evidence regarding the financial information of the Bank to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit of the financial information of the Bank and such branches included in the financial statements, of which we are the independent auditors. For the other branches included in the financial statements, which have been audited by statutory branch auditors, such branch auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

15. Materiality in the magnitude of the misstatements in the 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.

16. 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.

17. 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.

18. 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 for the financial year ended 31 March 2023 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

19. We did not audit the financial statements / information of 864 domestic branches including processing centres included in the financial statements of the Bank whose financial statements / financial information reflects total assets of ^ 70,095.34 crore at 31 March 2023 and total revenue of ^ 6264.74 crore for the year ended on that date, as considered in the financial statements. These branches and processing centres cover 72% of advances, 92% of deposits, 57% of Nonperforming assets as on 31^st March 2023 and 83% of revenue for the year ended 31^st March 2023. The financial statements/ information of these branches have been audited by the statutory branch auditors whose reports have been furnished to us and in our opinion on the financial statements, in so far as it relates to the amounts and disclosures included in respect of branches, and our report in terms of Section 143(3) of the Act, in so far as it relates to the aforesaid branches, are based solely on the report of such statutory branch auditors.

20. Our opinion on the financial statements, and our report on other legal and regulatory requirements below, are not modified in respect of the above matters with respect to our reliance on the work done by and the reports of the statutory branch auditors.

Report on Other Legal and Regulatory Requirements

21. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 29 of the Banking Regulation Act, 1949 and Accounting Standards as per section 133 of the Act read with Companies (Accounting Standards) Rules, 2021.

22. As required by sub-section (3) of section 30 of the Banking Regulation Act, 1949 and communication received by the Bank from Reserve Bank of India, and on the consideration of the reports of the statutory branch auditors as referred in paragraph 19 above, we report that:

a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit and have found them to be satisfactory;

b) the transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and

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

23. With respect to the matter to be included in the auditor''s report under section 197(16) of the Act, we report that since the Bank is a banking company, as defined under the Banking Regulation Act, 1949; the reporting under section 197(16) in relation to whether the remuneration paid by the Bank is in accordance with the provisions of section 197 of the Act and whether any excess remuneration has been paid in accordance with the aforesaid section is not applicable.

24. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the statutory branch auditors as referred to in paragraph 19 above, we further report to the extent applicable that:

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

(b) In our opinion, proper books of accounts 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 the branches not visited by us.

(c) the reports on the accounts of the branch offices of the Bank audited under section 143(8) of the Act by the statutory branch auditors of the Bank have been sent to us and have been properly dealt with by us in preparing this report.

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

(e) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act read with Companies (Accounting Standards) Rules, 2021 to the extent they are not inconsistent with the policies prescribed by the RBI.

(f) On the basis of the written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March 2023 from being appointed as a director in terms of section 164(2) of the Act.

(g) With respect to the adequacy of internal financial controls with reference to the financial statements of the Bank and the operating effectiveness of such controls, our separate report in Annexure A is attached.

(h) The entity being a banking company as defined under Banking Regulation Act, 1949, the remuneration to its directors during the year ended 31 March 2023 has been paid / provided by the Bank in accordance with the provisions of Section 35B(1) of the Banking Regulation Act, 1949.

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

i. The Bank has disclosed the impact of pending litigations on its financial position in Schedule 12, Note 14.11 & 14.14 of Schedule 18 of the financial statements

ii. The Bank has made provision as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts as detailed in Schedule 12 and note 4.1(b) of Schedule 18 to the financial statements and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund during the year ended 31 March 2023;

iv. a) The management has represented that, to

the best of its knowledge and belief, other than as disclosed in the note 15 of Schedule 18 to the financial statements, no funds have

been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Bank (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the note 15 of Schedule 18 to the financial statements, no funds have been received by the Bank from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Bank shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. As stated in Note 1.2 of Schedule 18 and as disclosed in Profit and Loss Account under ‘Appropriations'' to the Financial Statements:

(a) The final dividend proposed in the previous year, declared, and paid by the Bank during the year is in accordance with Section 123 of the Act, as applicable.

(b) The Bank did not pay any interim dividend during the year.

(c) The Board of Directors of the Bank have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable, until the date of this report.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Bank only w.e.f. 01 April 2023, reporting under this clause is not applicable.

For Sundaram & Srinivasan, For R.G.N. Price & Co.,

Chartered Accountants Chartered Accountants

FRN: 004207S FRN: 002785S

P. Menakshi Sundaram Sriraam Alevoor M

Partner Partner

M. No. 217914 M. No. 221354

UDIN: 23217914BGWPCS1999 UDIN:23221354BGXJKQ3524

Place : Karur Place : Karur

Date : 15 May 2023 Date : 15 May 2023

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Mar 31, 2022

OPINION

1. We have audited the accompanying financial statements of The Karur Vysya Bank Limited (the Bank), which comprise the Balance Sheet as at March 31, 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) 22 branches including Treasury Branch and Expense Management Cell audited by us and

ii) 851 branches audited by statutory branch auditors located across India.

2. In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of the reports of the statutory branch auditors as referred to in paragraph 20 below, the aforesaid financial statements, read with notes thereon, give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013 (‘the Act''), as amended and circulars and guidelines issued by the Reserve Bank of India (‘RBI''), in the manner so required for banking companies and give a true and fair view and are in conformity with the accounting principles generally accepted in India including the Accounting Standards prescribed under section 133 of the Act read with Companies (Accounting Standards) Rules, 2021, of the state of affairs of the Bank as at March 31, 2022, its profit and its cash flows for the year ended on that date.

BASIS FOR OPINION

3. We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor''s Responsibilities for the Audit of the Financial Statements’ section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''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 prescribed under section 133 of the Act read with Companies (Accounting Standards) Rules, 2021, provisions of section 29 of the Banking Regulation Act, 1949, circulars and guidelines issued by 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 and that obtained by the statutory branch auditors, in terms of their reports referred in paragraph 20 is sufficient and appropriate to provide a basis for our opinion.

EMPHASIS OF THE MATTER

4. We draw your attention to Note No.4.11 of schedule 18 -Notes to Accounts to the 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

5. Key audit matters are those matters that, in our professional judgement, and based on the consideration of the reports of the statutory branch auditors as referred to paragraph 20 below, were of most significance in our audit of the financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

6. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

A. I dentification of non-performing assets (‘NPA’) and Provisions on Advances Significant estimates and judgement involved Key audit matter

Identification of Non-Performing Assets (“NPA”) and provisions in respect of NPAs and restructured advances are made based on management''s assessment in accordance with norms, circulars and directions issued by Reserve Bank of India on Prudential Norms on Income Recognition, Asset

Classification and Provisioning pertaining to Advances from time to time.

The provision on NPA are based on the valuation of the security available and also requires management estimates and judgements. In case of restructured accounts, provision is made for diminution in fair value of restructured loans, in accordance with the RBI guidelines.

Accordingly, our audit focused on identification of NPAs and provision on advances as a key audit matter because of the level of management estimates and judgement involved in determining the provision and the valuation of the security of the NPA loans and the resultant impact on the financial statements of the Bank.

Auditor''s Response

Our key audit approach included assessing the design, implementation and operating effectiveness of key internal controls and substantive audit procedures over approval, recording and monitoring of loans, assessing the reliability of documentation, measurement of provisions, identification of NPA accounts, and Valuation of Security for NPA accounts along with basis and rationale for various other management information''s.

We have read the Bank''s policies for NPA identification and provisioning and assessing compliance with the IRAC norms.

We have evaluated details for a sample of exposures for identification of NPA and calculation of Loan Loss provisions including valuation of primary and collaterals as at March 31, 2022 involving certain degree of estimation.

We have evaluated and understood the Bank''s internal control systems completeness, accuracy, and relevance of data and to ensure that the same is in compliance with the RBI guidelines, circulars and directions on the Prudential Norms on Income Recognition, Asset Classification & Provisioning issued from time to time.

We also selected samples to test potential cases of “ever-greening” of loans.

We tested on a samples basis to ensure completeness of documentation, adherence of the approval process to the Bank''s Policy and board minutes, credit review of customers, review of Special Mention Accounts (SMA) reports in RBI''s Central Repository of Information on Large Credits (CRILC) and other related documents including evaluation of the past

trends of management judgement, governance, and review of internal control. Held discussion with the management of the Bank on sectors wherein there has been stress and the steps taken by the Bank to mitigate such sectorial risks.

Additionally, the Bank makes provisions on exposures that are not classified as NPAs including advances in certain sectors and identified advances or group advances that can potentially slip into NPA. These are classified under ‘Other liabilities''.

Since the identification of NPAs and provisioning for advances require significant level of estimation/ judgement and given its significance to the overall audit due to stakeholder and regulatory focus, we have ascertained identification and provisioning for NPAs and advances as a key audit matter.

We have also assessed disclosure requirements for classification and provisioning of NPAs in accordance with RBI circulars including those issued specifically issued for COVID-19 related matters.

B. Information technology - IT Systems and Controls Key Audit Matter

The Bank''s operations utilises many independent and inter-dependent information technology systems for processing and recording large volume of transactions in numerous locations on a daily basis. As a result, there is a high degree of reliance and dependency on such IT systems for financial reporting process of the Bank. Controls over access and changes to IT systems are critical to the recording of financial information and the preparation of a financial statements which provides a true and fair view of the Bank''s financial position and performance. Appropriate automated general and application controls are required to ensure that such IT systems and applications are able to process the data, as required, completely, accurately and consistently, which directly impact the completeness and accuracy of financial reporting.

The IT systems and controls, as they impact the financial recording and reporting of transactions, is a key audit matter as our audit approach could significantly differ depending on the effective operation of the Bank''s IT controls.

Auditor''s Response

We tested the technology control environment for key IT applications (systems) used in processing significant transactions and recording balances in the general ledger. We also tested automated

controls embedded within these systems which link the technology-enabled business processes. Our further audit procedures included:

• Assessing the governance and higher-level controls across the IT Environment, including those regarding policy design, review and awareness, and IT Risk Management practices;

• Design and operating effectiveness testing of controls across the User Access Management Lifecycle, Change Management as well as effectiveness testing of automated business process controls including segregation of duties

• Design and operating effectiveness testing of controls to enable Change Management including how changes are initiated, documented, approved, tested and authorised prior to migration into the production environment of critical IT Applications. We assessed the appropriateness of users with access to release changes to IT application production environments in the Bank;

Reviewing effectiveness of mappings and flagging of financial transactions, and automated reconciliation controls (both between systems and intrasystem); and

Data integrity of critical system reporting used by us in our audit to select samples and analyse data used by management to generate financial reporting.

C. Direct and Indirect Taxes Key Audit Matter

This matter has been identified as a key audit matter due to the significant level of management judgement required in the estimation of provision for taxes including any write back of provisions, due to factors like uncertain tax positions and provision for tax involves interpretation of various rules and law. It also involves consideration of on-going disputes and disclosures of related contingencies.

Auditor''s Response

Our audit procedures to test uncertain tax positions included understanding processes, evaluation of design and implementation of controls and testing of operating effectiveness of the Banks controls over provision for taxation, assessment of uncertain tax positions and disclosure of contingencies.

We have obtained details of completed tax assessments and demands from the management of the Bank.

We discussed with appropriate senior management personnel, relied upon opinion given by tax specialists, evaluated the management''s underlying key assumptions in estimating the tax provisions and independently assessed management''s estimate of the possible outcome of the disputed cases.

We considered legal precedence and other rulings in evaluating management''s position on these uncertain tax positions, the provisions made, and/or write back of the provisions.

For those matters where management concluded that no provision should be recorded, we also considered the adequacy and completeness of the Banks disclosures made in relation to contingent liabilities.

INFORMATION OTHER THAN THE FINANCIALSTATEMENTS AND AUDITORS’ REPORT THEREON

7. The Bank''s Board of Directors is responsible for the other information. The other information comprises the Corporate Overview, Directors'' Report including annexures to Directors'' Report, Management Discussion and Analysis, Basel III - Pillar 3 disclosures and Corporate Governance report included in the Annual Report, but does not include the financial statements and our auditor''s report thereon. The other information is expected to be made available to us after the date of this auditor''s report.

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

9. In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

10. 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 THOSECHARGED WITH GOVERNANCE FOR THE FINANCIALSTATEMENTS

11. The Bank''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under

section 133 of the Act read with Companies (Accounting Standards) Rules, 2021 in so far as they apply to the Bank and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the 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 judgements and estimates that are reasonable and prudent; and the 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.

12. In preparing the financial statements, the Board of Directors 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.

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

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OFTHE FINANCIAL STATEMENTS

14. 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.

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

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the financial statements made by management.

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

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

• Obtain sufficient appropriate audit evidence regarding the financial information of the Bank to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit of the financial information of the Bank and such branches included in the financial statements, of which we are the independent auditors. For the other branches included in the financial statements, which have been audited by statutory branch auditors, such branch auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

16. Materiality in the magnitude of the misstatements in the 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.

17. 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.

18. 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.

19. 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 for the financial year ended March 31, 2022 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

20. We did not audit the financial statements/information of 851 domestic branches including processing centres included in the financial statements of the Bank whose financial statements/financial information reflects total assets of '' 66,351 crore at March 31 2022 and total revenue of '' 4,460 crore for the year ended on that date, as considered in the financial statements. These branches and processing centres cover 79% of advances, 92% of deposits, 43% of Non-performing assets as on March 31, 2022 and 70% of revenue for the year ended March 31, 2022. The financial statements/information of these branches have been audited by the statutory branch auditors whose reports have been furnished to us and in our opinion on the financial statements, in so far as it relates to the amounts and disclosures included in respect of branches, and our report in terms of Section 143(3) of the Act, in so far as it relates to the aforesaid

branches, are based solely on the report of such statutory branch auditors.

21. Our opinion on the financial statements, and our report on other legal and regulatory requirements below, are not modified in respect of the above matters with respect to our reliance on the work done by and the reports of the statutory branch auditors.

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

22. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 29 of the Banking Regulation Act, 1949 and Accounting Standards as per section 133 of the Act read with Companies (Accounting Standards) Rules, 2021.

23. As required by Sub-Section (3) of section 30 of the Banking Regulation Act, 1949, and on the consideration of the reports of the statutory branch auditors as referred in paragraph 20 above, we report that:

a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit and have found them to be satisfactory;

b) the transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and

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

24. With respect to the matter to be included in the auditor''s report under section 197(16) of the Act, we report that since the Bank is a banking company, as defined under the Banking Regulation Act, 1949; the reporting under Section 197(16) in relation to whether the remuneration paid by the Bank is in accordance with the provisions of section 197 of the Act and whether any excess remuneration has been paid in accordance with the aforesaid section is not applicable.

25. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the statutory branch auditors as referred to in paragraph 20 above, we further report to the extent applicable that:

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

(b) In our opinion, proper books of accounts 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 the branches not visited by us.

(c) the reports on the accounts of the branch offices of the Bank audited under section 143(8) of the Act by the statutory branch auditors of the Bank have been sent to us and have been properly dealt with by us in preparing this report.

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

(e) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified Under Section 133 of the Act read with Companies (Accounting Standards) Rules, 2021 to the extent they are not consistent with the policies prescribed by the RBI.

(f) On the basis of the written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of section 164(2) of the Act.

(g) With respect to the adequacy of internal financial controls with reference to the financial statements of the Bank and the operating effectiveness of such controls, our separate report in Annexure A is attached.

(h) The entity being a banking company as defined under Banking Regulation Act, 1949, the remuneration to its directors during the year ended March 31, 2022 has been paid/provided by the Bank in accordance with the provisions of Section 35B(1) of the Banking Regulation Act, 1949.

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

i. The Bank has disclosed the impact of pending litigations on its financial position in Schedule 12, Note 14.10 & 14.12 of Schedule 18 of the financial statements

ii. The Bank has made provision as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts

as detailed in Schedule 12 and note 4.10(b) of Schedule 18 to the financial statements and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund during the year ended March 31, 2022;

iv. a) The management has represented that,

to the best of its knowledge and belief, other than as disclosed in the note 15 of Schedule 18 to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Bank (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the note 15 of Schedule 18 to the financial statements, no funds have been received by the Bank from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Bank shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. As stated in Note 1.2 of Schedule 18 and as disclosed in Profit and Loss Account under ‘Appropriations'' to the Financial Statements:

(a) The final dividend proposed in the previous year, declared, and paid by the Bank during the year is in accordance with Section 123 of the Act, as applicable.

(b) The Bank did not pay any interim dividend during the year.

(c) The Board of Directors of the Bank have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act, as applicable, until the date of this report.

For R.G.N. Price & Co., For Sundaram & Srinivasan,

Chartered Accountants Chartered Accountants

FRN:002785S FRN:004207S

Mahesh Krishnan P. Menakshi Sundaram

Partner Partner

M. No. 206520 M. No. 217914

UDIN:22206520AJHBKF7147 UDIN:22217914AJHBLC2645

Place: Karur Place: Karur

Date: May 20, 2022 Date: May 20, 2022

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Mar 31, 2019

INDEPENDENT AUDITOR''S REPORT

To the Members of The Karur Vysya Bank Limited Report on the Audit of the Financial Statements Opinion

1. We have audited the accompanying financial statements of The Karur Vysya Bank Limited (''the Bank''), which comprise the Balance Sheet as at 31 March 2019, the Profit and Loss Account and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are included the returns of 15 branches and treasury branch audited by us and 772 branches and other offices audited by the respective branch auditors of the Bank for the year ended on that date.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the section 29 of the Banking Regulation Act, 1949, as well as the Companies Act, 2013 (''Act'') and circulars and guidelines issued by the Reserve Bank of India, in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended), of the state of affairs of the Bank as at 31 March 2019, and its profit and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''ICAI''), together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, 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 financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Information Technology (IT) systems and controls impacting financial reporting

Key audit matter	How our audit addressed the key audit matter
The IT environment of the Bank is complex and involves a large number of both independent and inter-dependent IT systems used in the operations of the Bank for processing and recording a large volume of transactions in numerous locations on a daily basis. As a result, there is a high degree of reliance and dependency on such IT systems for financial reporting process of the Bank. Appropriate automated general and application controls are required to ensure that such IT systems and applications are able to process the data, as required, completely, accurately and consistently, which directly impact the completeness and accuracy of financial reporting.	Our audit procedures include, but were not limited to, the following: In assessing the controls around IT systems relevant for financial reporting, we included specialized IT auditors as part of our audit team to obtain an understanding of the IT infrastructure and selected IT systems, based on their importance and relevance to Bank''s financial reporting process, for evaluation and testing of IT general controls and IT automated controls existing in such IT systems.
	Access rights were tested over applications, operating systems, networks and databases which are relied upon for financial reporting. We also assessed the operating effectiveness of controls over granting, removal and periodical review of access rights. We further tested segregation of duties including preventive controls to ensure that access to change applications, the operating system or databases in the production environment were granted only to authorized personnel.
Appropriate and adequate controls contribute to mitigating the risk of potential misstatements caused by frauds or errors, as a result of changes to applications and data. Thus, our audit approach focuses on IT systems and the related control environment including:
IT general controls over user access management and change management across applications, networks, database and operating systems;
	Other areas that were independently assessed under the IT control environment included password policies, security configurations and controls around change management to ensure there were no unauthorized changes made to the IT systems and applications during the year.
IT automated application controls Due to the significance of the impact of the IT systems and related control environment on the Bank''s financial reporting process, we have identified testing of such IT systems and related control environment as a key audit matter for current year audit.
	We also evaluated the design and tested operating effectiveness of key automated controls within various business processes.

Identification and provisioning for non-performing assets (''NPA''s)

Key audit matter	How our audit addressed the key audit matter
As at 31 March 2019, the Bank reported total gross advances of Rs 50615.66 crores, gross NPAs of Rs 4449. 57 crores and provision for non-performing assets of Rs 1961.19 crores.	Our procedures include, but were not limited to, the following: We tested the design and operating effectiveness of key controls, including IT based controls, focusing on the following:
Refer Note No. 3 in Schedule 17 for the accounting policy for provision for NPA''s and Note No. 5.1 (iii) and 5.2 in Schedule 18 for the related financial disclosures.	Credit appraisals and sanctioning of advances;
	Identification of NPAs in line with the RBI IRAC norms and qualitative factors prescribed by RBI;
The identification and provisioning for advances is made in accordance with the RBI Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances (''RBI IRAC Norms''). Based on our risk assessment, the following are the significant factors in assessment of the provisions for NPAs:	Periodic internal reviews of asset quality;
	Assessment and adequacy of NPA provisions;
	Periodic valuation of collateral for NPAs;
	Audited returns from branches
Completeness and timing of recognition of defaults, in accordance with the criteria set out in the (''RBI IRAC norms''). In addition to this, the management is also required to apply its judgement in identification and provision required for NPAs based on qualitative assessment;	To test the completeness of the identification of loans with default events and qualitative factors, we selected a sample of performing loans including Special Mention Accounts (SMA) and independently assessed as to whether there was a need to classify such loans as NPAs.
	Returns from branches duly audited by branch auditors were reviewed and their reports were properly dealt with in testing of NPA at Central Office.
The measurement of provision under RBI IRAC norms are dependent on the ageing of overdue balances, secured / unsecured status of advances, stress and liquidity concerns in certain sectors and valuation of collateral.
	We recomputed the provision calculations as per the RBI IRAC norms and compared such outcome to that prepared by management and investigated differences arising between the two and challenged the assumptions and judgements which were used by the management.
Considering the significance of the above matter to the financial statements, the heightened regulatory inspections and significant auditor attention required to test identification and provision of NPAs, we have identified this as a key audit matter for current year audit.
	We assessed the appropriateness, and adequacy of disclosures as per relevant accounting standards and RBI requirements relating to NPAs.

Statutory Tax Litigations

Key audit matter	How our audit addressed the key audit matter
As at 31 March 2019, the Bank has tax litigations pending to the tune of Rs 387.94 crores, for which no provision is made in the books of accounts and the same has been disclosed in financial statements.	Our audit procedures included, but were not limited to, the following: We tested the design and operating effectiveness of the Bank''s key controls over the identification, estimation, monitoring and disclosure of tax litigations.
Refer Note No. 14 in Schedule 17 for the accounting policy and Schedule 12 and Note No. 9.8 and 10.8 of Schedule 18 for the related financial disclosures.
	We involved our tax specialists to gain an understanding of the current status of the outstanding tax matters, including understanding of various orders/notices received by the Bank and management''s appeals before with the relevant appellate authorities, and critically evaluated the management''s assessment of the likelihood of the liability devolving upon the Bank as per principles of AS 29.
The Bank has ongoing tax cases with varied degree of complexities. This indicates that a significant degree of management judgement is involved in determining the appropriateness of provisions and related disclosures.
Significant management judgement is needed in determining whether an obligation exists and whether a provision should be recognised as at reporting date, in accordance with the accounting criteria set under Accounting Standard 29 -Provisions, Contingent Liabilities and Contingent Assets (''AS 29'') or whether it needs to be disclosed as a contingent liability. Further, significant judgements are also involved in measuring such obligations, the most significant of which are: Assessment of liability: Judgement is involved in the determination of whether an outflow in respect of identified material matters are probable and can be estimated reliably;
	We also compared the actual results to the estimates made in prior period by the management to determine the efficacy of the process of estimation by the management. Further, we assessed whether the disclosures related to taxation matters were appropriate and adequate in terms of whether the potential liabilities and the significant uncertainties were fairly presented.
Adequacy of provisions: The appropriateness of assumptions and judgements used in the estimation of significant provisions; and
Adequacy of disclosures of provision for liabilities and charges, and contingent liabilities.
Considering the significance of the above matter to the financial statements, and significant auditor attention required to test such estimates, we have identified this as a key audit matter for current year audit.

Information other than the Financial Statements and Auditor''s Report thereon

6. The Bank''s Board of Directors are responsible for the other information. The other information comprises the information included in the Bank''s Annual Report, but does not include the financial statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.

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

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

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

7. The Bank''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended) 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. 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.

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

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

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

10. 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 Standards on Auditing 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.

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

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

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

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

Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our 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.

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.

12. 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.

13. 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.

14. 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

15. The financial statements of the Bank for the year ended 31 March 2018 were audited by the predecessor auditor, Abarna & Ananthan, who have expressed an unmodified opinion on those financial statements vide their audit report dated 25 May 2018.

16. We did not audit the financial statements of 772 branches included in the financial statements of the Bank whose financial statements/financial information reflect total assets of Rs 42583.15 crores as at 31 March 2019, and total revenue of Rs 4744.17 crores for the year ended on that date, as considered in the financial statements. The financial statements/financial information of these branches have been audited by the branch auditors whose reports have been furnished to us by the management, and our opinion on the financial statements, in so far as it relates to the amounts and disclosures included in respect of branches, is based solely on the report of such branch auditors which have been properly dealt with while reporting on the financial statements of the Bank.

Our opinion on the standalone financial statements is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

17. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of section 29 of the Banking Regulation Act, 1949 and section 133 of the Act read with rule 7 of the Companies (Rules), 2014 (as amended).

18. As required by sub-section (3) of section 30 of the Banking Regulation Act, 1949, we report that:

a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

b) the transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and

c) the returns from branches / other offices of the Bank were received duly audited by other auditors and were found adequate for the purpose of our audit.

19. As required by section 197(16) of the Act, we report that the Bank has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

20. Further, as required by section 143(3) of the Act, we report that:

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

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

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

d) the financial statements dealt with by this report are in agreement with the books of account and with the returns received from the branches not audited by us;

e) in our opinion, the aforesaid financial statements comply with Accounting Standards prescribed under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended), to the extent they are not inconsistent with the accounting policies prescribed by RBI;

f) on the basis of the written representations received from the directors as on 31 March 2019 and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March 2019 from being appointed as a director in terms of section 164(2) of the Act;

g) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Bank as on 31 March 2019 in conjunction with our audit of the financial statements of the Bank for the year ended on that date and our report dated 15 May 2019 as per Annexure A expressed an unmodified opinion;

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

i. the Bank, as detailed in Schedule 12 and Note No. 9.8 and 10.8 of Schedule 18 to the financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2019;

ii. the Bank as detailed in Schedule 12 and Note No. 9.8 of Schedule 18 to the financial statements, has made provision as at 31 March 2019, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Bank during the year ended 31 March 2019;

iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these financial statements. Hence, reporting under this clause is not applicable.

	For Walker Chandiok & Co LLP
	Chartered Accountants
	Firm''s Registration No.: 001076N/N500013
	Krishnakumar Ananthasivan
	Partner
	Membership No.: 206229
Place: Karur
Date :15 May 2019

Annexure A to the Independent Auditor''s Report of even date to the members of The Karur Vysya Bank Limited on the financial statements for the year ended 31 March 2019

Independent Auditor''s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (''the Act'')

1. In conjunction with our audit of the financial statements of The Karur Vysya Bank Limited (''the Bank'') as at and for the year ended 31 March 2019, we have audited the internal financial controls over financial reporting (''IFCoFR'') of the Bank as at that date.

Management''s Responsibility for Internal Financial Controls

2. The Bank''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Bank''s business, including adherence to the Bank''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on the Bank''s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (''ICAI'') and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (''the Guidance Note'') issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Bank''s IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. An entity''s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. An entity''s IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the entity are being made only in accordance with authorisations of management and directors of the entity; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the entity''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Owing to the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Bank has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2019, based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

	For Walker Chandiok & Co LLP
	Chartered Accountants
	Firm''s Registration No.: 001076N/N500013
	Krishnakumar Ananthasivan
	Partner
	Membership No.: 206229
Place: Karur
Date: 15 May 2019

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Mar 31, 2018

Report on the Standalone Financial Statements

1. We have audited the standalone accompanying financial statements of The Karur Vysya Bank Limited (‘the Bank’), which comprise the Balance Sheet as at 31st March 2018, the Profit and Loss Account, 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 5 branches and 1 office audited by us, 848 branches / offices audited by Statutory Branch Auditors.

Management’s Responsibility for the Standalone Financial Statements

2. The Bank’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 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.

Auditor’s Responsibility

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

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

5. We conducted our audit of the Bank including its branches in accordance with Standards on Auditing (‘the Standards’) specified under Section 143(10) of the Act and other applicable authoritative pronouncements 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 of material misstatements.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Bank’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Bank’s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

a. In case of the Balance Sheet, of the state of affairs of the Bank as at 31st March, 2018,

b. In case of the Profit and Loss Account of the profit for the year ended on that date; and

c. In case of the Cash Flow Statement, of cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

10. As required by sub Section (3) of Section 30 of the Banking Regulation Act, 1949, we report that:

(a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

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

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

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

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

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

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

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

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

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

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

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

a. the Bank has disclosed the impact of pending litigations on its financial position in its financial statements:

b. the Bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and

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

For Abarna & Ananthan

Chartered Accountants

Firm Registration No. 000003S

LALITHA RAMESWARAN

Place: Karur Partner

Date: 25th May 2018 Membership No. 207867

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Mar 31, 2017

Report on the Financial Statements

1. We have audited the accompanying financial statements of The Karur Vysya Bank Limited (‘the Bank’), which comprise the Balance Sheet as at 31st March 2017, the Profit and Loss Account, 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 5 branches and 1 office audited by us, 766 branches / offices audited by Branch Auditors.

Management’s Responsibility for the Financial Statements

2. The Bank’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 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.

Auditor’s Responsibility

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

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

5. We conducted our audit of the Bank including its branches in accordance with Standards on Auditing (‘the Standards’) specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Bank’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Bank’s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

a. In case of the Balance Sheet, of the state of affairs of the Bank as at 31st March, 2017;

b. In case of the Profit and Loss Account of the profit for the year ended on that date; and

c. In case of the Cash Flow Statement, of cash flows for the year ended on that date.

Emphasis of Matter

9. We draw attention to Note on the Financial Statements, regarding unamortized loss of Rs. 185.07 Crore on sale of advances to Asset Reconstruction Companies during the Financial Year 2015-16. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

11. As required by sub section (3) of section 30 of the Banking Regulation Act, 1949, we report that:

(a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

(b) the transactions of the Bank, which have come to our notice, have been within the powers of the Bank;

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

12. Further, as required by section 143(3) of the Act, we further report that:

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

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

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

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

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

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

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

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

a. the Bank has disclosed the impact of pending litigations on its financial position in its financial statements

b. the Bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts and

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

For Abarna & Ananthan

Chartered Accountants

Firm Registration No. 000003S

S. Ananthan

Place: Karur Partner

Date: 18-05-2017 Membership No. 26379

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Mar 31, 2015

1. We have audited the accompanying financial statements of The Karur Vysya Bank Limited, which comprise the Balance Sheet as at 31st March, 2015 and the Statement of Profit and Loss 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 9 branches/offices audited by us, 676 branches/offices audited by branch auditors.

Management''s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements in accordance with the Banking Regulation Act, 1949 and Accounting Standards notified under the Companies Act, 2013 ("this Act") read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs with regard to applicability of provisions of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the bank''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Emphasis of Matter

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

(a) Note No. 4.1 of the financial statements, which describes the change of accounting policy of charging of Depreciation on fixed asset except building and computers having regard to change in the estimated useful life of the assets from Written down value method to Straight line method as per the requirement of Schedule II of the Companies Act 2013.

(b) Note No. 5.13 of the financial statements, regarding absorption of unamortised pension and gratuity liabilities of the bank to the extent of '' 16.90 crore pursuant to the exemption granted by the Reserve Bank of India from the application of the provisions of Accounting Standard (AS) 15, Employee Benefits vide circular No. DBOD. BP. BC /80/21.04.018/2010-11 dated 9th February 2011.

Report on Other Legal and Regulatory Matters

8. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 129 of the Companies Act, 2013.

9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above, We report that:

(a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory.

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

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

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

11. We further report that:

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

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

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

(iv) on the basis of the written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of section 164 of the Companies Act, 2013.

For Abarna & Ananthan.

Chartered Accountants

Firm Registration No.000003S

Lalitha Rameswaran

Karur Partner

April 30, 2015 Membership No. 207867

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Mar 31, 2014

1. We have audited the accompanying financial statements of the The Karur Vysya Bank Limited, which comprise the Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss and the cash fl ow statement for the year then ended and a summary of signifi cant accounting policies and other explanatory information. Incorporated in these financial statements are the returns of 7 branches/Offices audited by us, 631 branches/Offices audited by branch auditors.

Management''s responsibility for the Financial Statements:

2. Management is responsible for the preparation of these financial statements in accordance with the Banking Regulation Act, 1949 and Accounting Standards notifi ed under the Companies Act, 1956 ("this Act") read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the bank''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion:

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

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

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

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

Emphasis of Matter

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

(a) Note No. 5.13 of the financial statements, regarding deferment of pension and gratuity liability of the bank to the extent of Rs. 16.90 crore to be amortized in the next year pursuant to the exemption granted by the Reserve Bank of India from the application of the provisions of Accounting Standard (AS) 15, Employee Benefi ts vide circular No. DBOD. BP. BC /80/21.04.018/2010-11 dated Feb.9th 2011; and

(b) Note No. 6.2 of the financial statements, which describes the accounting treatment of the expenditure on creation of Deferred Tax Liability of Rs. 49.29 crore on Special Reserve under section 36(1)(viii) of the Income Tax Act, 1961 as at 31st March 2013, pursuant to RBI''s Circular No. DBOD No.BP.BC.77/ 21.04.018 / 2013-14 dated 20th December 2013.

Report on other legal and Regulatory requirements:

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

9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above, We report that:

(a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory.

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

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

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

11. We further report that:

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

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

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

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

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

For R K Kumar & Co.

Chartered Accountants Firm Registration No.001595S

Karur (C.R. Sundararajan)

May 28, 2014 Partner

Membership No. 025400

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Mar 31, 2013

Report on the Financial Statements:

1. We have audited the accompanying financial statements of The Karur Vysya Bank Limited as at 31st March 2013, which comprise the Balance Sheet as at 31st March 2013, the Profit & Loss Account and the Cash Flow Statement for the year then ended, significant Accounting Policies and other explanatory information. Incorporated in these financial statements are the returns of 7 branches/offices audited by us and 593 branches/offices audited by Branch Auditors. The Branches audited by us and those audited by other auditors have been selected by the Bank in accordance with the guidelines issued by the Reserve Bank of India.

Management''s responsibility for the Financial Statements:

2. Management is responsible for the preparation of these financial statements in accordance with the Banking Regulation Act, 1949. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatements, whether due to fraud or error.

Auditor''s Responsibility:

3. Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the bank''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements

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

Opinion:

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

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

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

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

Report on other legal and Regulatory requirements:

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

8. Subject to the limitations of the audit indicated in paragraph 1 to 5 above, we report that:

a. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit and have found them to be satisfactory.

b. the transactions of the Bank, which have come to our notice, have been within the powers of the Bank.

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 & Loss Account and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

10. We further report that:

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

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

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

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

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

For R K Kumar & Co.

Chartered Accountants

Firm Registration No.001595S

Karur (G.Naganathan)

May 24, 2013 Partner, (M. No. 022456)

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Mar 31, 2012

1. We have audited the accompanying financial statements of The Karur Vysya Bank Limited as at 31st March 2012, which comprise the Balance Sheet as at 31st March 2012, the Profit & Loss Account and the Cash Flow Statement for the year then ended, significant Accounting Policies and other explanatory information. Incorporated in these financial statements are the returns of 6 branches/offices audited by us and 488 branches/offices audited by Branch Auditors. The Branches audited by us and those audited by other auditors have been selected by the Bank in accordance with the guidelines issued by the Reserve Bank of India.

Management's responsibility for the Financial Statements:

2. Management is responsible for the preparation of these financial statements in accordance with the Banking Regulation Act, 1949. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatements, whether due to fraud or error.

Auditor's Responsibility:

3. Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the bank's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements

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

Opinion:

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

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

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

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

Report on other Legal and Regulatory requirements:

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

8. Subject to the limitations of the audit indicated in paragraph 1 to 5 above, we report that:

a. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit and have found them to be satisfactory.

b. the transactions of the Bank, which have come to our notice, have been within the powers of the Bank.

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 & Loss Account and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

10. We further report that:

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

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

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

(iv) on the basis of the written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For M/s. R. K. Kumar & Co.

Chartered Accountants

Firm Reg No. 001595S

Place: Karur (C.R. Sundararajan)

Date: 25th May 2012. Partner

M.No.025400

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Mar 31, 2011

1. We have audited the accompanying financial statements of The Karur Vysya Bank Limited as at 31st March 2011, which comprise the Balance Sheet as at 31st March 2011, the Profit & Loss Account and the Cash Flow Statement for the year then ended, significant Accounting Policies and other explanatory information. Incorporated in these financial statements are the returns of 4 branches/offices audited by us and 407 branches/offices audited by Branch Auditors. The Branches audited by us and those audited by other auditors have been selected by the Bank in accordance with the guidelines issued by the Reserve Bank of India.

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. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatements, whether due to fraud or error.

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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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 the management, as well as evaluating the overall presentation of the financial statements

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

Emphasis of Matter:

6. Without qualifying our opinion, we draw attention to Note No.4.3 of Schedule 18 of the financial statements, which describes deferment of pension and gratuity liability of the Bank to the extent of Rs. 67.60 Crore pursuant to the exemption granted by the Reserve Bank of India from the application of the provisions of Accounting Standard (AS) 15, Employee Benefits, vide its circular No. DBOD. BP. BC/80/21.04.018/2010-11 dated 09.02.2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits - Prudential Regulatory Treatment.

Opinion:

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

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

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

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

Report on other legal and Regulatory requirements:

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

9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above, we report that:

a. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit and have found them to be satisfactory.

b. the transactions of the Bank, which have come to our notice, have been within the powers of the Bank.

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 & Loss Account and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

11. We further report that:

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

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

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

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

(v) on the basis of the written representation received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For M/s. R. K. Kumar & Co.

Chartered Accountants

Firm Reg No. 001595S

Place: Karur (G.Naganathan)

Date: 20th May 2011. Partner

M.No.022456

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Mar 31, 2010

1 .We have audited the attached Balance sheet of The Karur Vysya Bank Limited, Karur as at 31st March, 2010 and also the annexed Profit and Loss Account of the Bank and the Cash Flow Statement for the year ended on that date in which are incorporated the returns of 8 Offices/Branches audited by us and 369 Offices/ Branches (including Extension Counters/Satellite Branches) audited by Branch Auditors. These financial statements are the responsibilities of the Banks Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. The reports on the accounts of the Branches audited by Branch Auditors have been dealt with in preparing our report in the manner considered necessary by us.

5. We report that:

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

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

(c) 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 purpose of our audit have been received from the branches of the Bank.

(d) The Balance Sheet and Profit and Loss Account of the Bank dealt with by this report are in agreement with the books of account and with the audited returns from the branches.

(e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956.

6. In our Opinion, the Profit and Loss Account and the Balance Sheet dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, in so far as they apply to the Banks.

7. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting policies and Notes thereon give the information required by the Companies Act, 1956, in the manner so required for banking companies, and on such basis, give a true and fair view:

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

ii. in the case of the Profit and Loss Account, of the profit for the year ended on that date, and

iii. in the case of the Cash Flow Statement, of the cash flow of the Bank for the year ended on that date.



For J.LSENGUPTA & CO., Chartered Accountants

(S.R.ANANTHAKRISHNAN) Partner 20th May 2010 M.No.18073