1.  We have audited the accompanying Financial Statements of The South
 Indian Bank Limited, which comprise the Balance Sheet as at 31st March,
 2011, 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 4 branches / offices audited by us and
 634 branches audited by branch auditors.
 
 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,
 circulars and guidelines issued by the Reserve Bank of India (RBI) from
 time to time, the Companies Act, 1956, Accounting Standards issued by
 the Institute of Chartered Accountants of India (ICAI) and notified by
 the Companies Accounting Standard Rules, 2006 to the extent applicable
 and other applicable laws in India. This responsibility includes the
 design, implementation and maintenance of internal control relevant to
 the preparation of the Financial Statements that are free from material
 misstatement, whether due to fraud or error.
 
 Auditors Responsibility
 
 3.  Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the Financial Statements are free
 from material misstatement.
 
 4.  An audit involves performing procedures to obtain audit evidence
 about the amounts and disclosures in the Financial Statements. The
 procedures selected depend on the auditors judgement, including the
 assessment of the risks of material misstatements of the Financial
 Statements, whether due to fraud or error. In making those risk
 assessments, the auditor considers internal control relevant to the
 companys preparation and fair presentation of the Financial Statements
 in order to design audit procedures that are appropriate in the
 circumstances. An audit also includes evaluating the appropriateness of
 accounting policies used and the reasonableness of the accounting
 estimates made by management, as well as evaluating the overall
 presentation of the financial statements.
 
 5.  We believe that the audit evidence we have obtained is sufficient
 and appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 6.  Without qualifying our opinion we draw attention to:
 
 a) Note No. A. 23 (b), Schedule 18, of the Financial Statements
 regarding disputed Income Tax liability of Rs. 116.05 Crores relating
 to earlier assessment years consequent to a decision of the Kerala High
 Court, now pending before the Supreme Court of India, and its treatment
 as Contingent Liability by the Bank.
 
 b) Note No. B. 7, Schedule 18, to the financial statements which
 describes deferment of pension and gratuity liability of the bank to
 the extent of Rs. 125.22 Crores
 
 pursuant to the exemption granted by the Reserve Bank of India and made
 applicable to the Bank vide Letter No. DBOD No.BP.BC.15896 /21.04.018
 /2010-11 dated April 8, 2011, from the application of the provision of
 the Accounting Standard (AS) 15, Employee Benefits.
 
 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 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.  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 211 of the Companies Act, 1956.
 
 9. 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 referred to in
 subsection (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 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 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.
 
                                         For Deloitte Haskins & Sells
                                                Chartered Accountants
                                           (Registration No. 008072S)
 
                                                      M. Ramachandran
                                                              Partner
                                                  Membership No.16399
 
 Place: Kochi
 Date : May 2, 2011