1) We have audited the attached Balance Sheet of THE LAKSHMI VILAS BANK
 LIMITED, KARUR as at 31st March, 2011, the annexed Profit and Loss
 Account and also the Cash Flow Statement of the bank for the year ended
 on that date in which are incorporated the returns of 18 Branches, 4
 Zonal Offices, Central Processing Cell, Integrated Treasury, Data
 Centre audited by us and 255 Branches and 6 Service Branches audited by
 Branch Auditors appointed U/s 228 (4) of the Companies Act, 1956. There
 are no unaudited branches or other offices. These financial statements
 are the responsibility of the Bank''s Management. Our responsibility is
 to express our 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 misstatements. An Audit
 includes examining on a test basis, evidence supporting the amounts and
 disclosure in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  The Balance Sheet and the Profit & Loss account have been drawn up
 in accordance with the provisions of section 29 of Banking Regulation
 Act, 1949 read with section 211 of the Companies Act, 1956, in Form A &
 B respective of Third Schedule to the Banking Regulation Act, 1949.
 
 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 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) 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 purpose of our audit
 have been received from the branches of the Bank.
 
 (d) The Bank''s Balance sheet and profit and loss account and cash flow
 statement dealt with by this report are in agreement with the books of
 account and audited returns from the branches of the bank.
 
 (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 2011 from being
 appointed as director in terms of clause (g) of sub – section (1) of
 section 274 of the Companies Act, 1956.
 
 6.  In our opinion, the balance sheet, profit and loss account and the
 cash flow statement dealt with by this report comply with the
 accounting standards referred to in sub- section(3c) of section 211 of
 the Companies Act, 1956 so far as they apply to banks.
 
 7.  In our opinion and to the best of our information and according to
 the explanation given to us, the said accounts read with the accounting
 policies followed by the bank together with the notes thereon and
 subject to Note No.1(a) & (b) of schedule 18 to the accounts regarding
 the effect of adjustments arising from reconciliation of inter – branch
 transactions and tallying of balances in the accounts as per general
 ledger with those of subsidiary ledgers, the quantum of which is not
 ascertained, 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 said balance sheet of the state of affairs of the
 bank as at 31st March 2011;
 
 ii) In the case of profit & loss account, profit of the bank for the
 year ended on that date; and
 
 iii) In case of cash flow statement of the cash flow of the bank for
 the year then ended and are in conformity with the accounting
 principles generally accepted in India.
 
 
                                          For M/s. SAGAR & ASSOCIATES
 
                                                Chartered Accountants
 
                                                         FRN. 003510S
 
                                                  (B. SRINIVASA RAO)
 
 Place : Karur                                               Partner
 
 Date : 19th May 2011                                    M.No.202352