We have audited the attached Balance Sheet of City Union Bank Limited,
 Kumbakonam as at 31st March, 2011, the Profit and Loss Account and Cash
 Flow Statement of the Bank for the year ended on that date annexed
 thereto, in which are incorporated returns of 6 branches and Central
 Office, audited by us and 242 branches / offices audited by the Branch
 Auditors. The Balance Sheet and Profit and Loss Account have been drawn
 up in accordance with the provisions of Section 29 of the Banking
 Regulation Act, 1949 read with Section 211 of the Companies Act, 1956
 in form ''A'' & ''B'' respectively of Third Schedule to the Banking
 Regulation Act, 1949. These financial statements are the responsibility
 of the Bank''s management. Our responsibility is to express an opinion
 on these financial statements based on our audit.
 
 We have conducted our audit in accordance with the auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation.  We believe that our audit provides a reasonable basis
 for our opinion.
 
 On the basis of our audit and having regard to the report on the
 accounts of branches/offices audited by the other auditors, which have
 been considered by us, we report that:
 
 a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit and have found them to be satisfactory.
 
 (b) In our opinion, the Bank has maintained proper books of accounts as
 required by law in so far as it appears from our examination of those
 books.
 
 (c) The returns received from the offices and branches of the Bank have
 been found adequate for the purpose of our audit.
 
 (d) The Balance Sheet, Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account and the branch returns.
 
 (e) The transactions of the Bank, which have come to our notice, have
 been, in our opinion, within the powers of the Bank.
 
 (f) In our opinion, the accompanying financial statements dealt with by
 this report comply with the Accounting Standards referred to in
 sub-section 3(c) of Section 211 of the Companies Act, 1956, to the
 extent they are not inconsistent with the accounting policies
 prescribed by the Reserve Bank of India.
 
 (g) The reports on the accounts of the branches audited by branch
 auditors have been dealt with in preparing our report in the manner
 considered necessary by us.
 
 (h) As per the information and explanations given to us, the Central
 Government has, till date, not prescribed any cess payable under
 Section 441A of the Companies Act, 1956.
 
 (i) According to the information and explanations given to us and on
 the basis of the written representations, received from the Directors
 of the Bank and taken on record by the Board of Directors, we report
 that none of the Directors is disqualified as on 31st March, 2011 from
 being appointed as a Director in terms of clause (g) of sub-section (1)
 of Section 274 of the Companies Act, 1956 and
 
 (j) In our opinion and to the best of our information and according to
 the explanations given to us, the Balance Sheet, Profit and Loss
 Account and the Cash Flow Statement together with the notes thereon
 give the information required by the Banking Regulation Act, 1949, as
 well as the Companies Act, 1956, in the manner so required for banking
 companies and give a true and fair view in conformity with the
 accounting principles generally accepted in India.
 
 (i) in case of Balance Sheet, of the state of affairs of the Bank as at
 31st March, 2011.
 
 (ii) in case of the Profit and Loss account, of the profit of the Bank
 for the year ended 31st March, 2011 and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Bank for the year ended 31st March, 2011.
 
                                        For Jagannathan & Sarabeswaran
 
                                                 Chartered Accountants
 
                                                    (Firm No. 001204 S)
 
                                                     P.S.   Narasimhan
 
 Place: Chennai                                                Partner
 
 Date :    27th May, 2011                               M.No. : 020936