UCO Bank

1. We have audited the attached Balance Sheet of UCO Bank as on J 1st
 March, 2009 and the Profit and Loss Account tor the year ended on that
 date annexed thereto in which are incorporated the returns of 20
 branches and the controlling offices audited by us, 1610 branches
 (including 5 Service Branches) audited by other auditors and 4 foreign
 branches audited by overseas local auditors. The branches audited by us
 and those audited by other auditors have been selected by the Bank in
 accordance with the guidelines issued to the Bank by the Reserve Bank
 of India. Also, incorporated in the Balance Sheet and the Profit and
 Loss Account are the returns from 433 branches (including 13 Service
 Branches) and 2 overseas representative office which have not been
 subjected to audit.
 
 These financial statements are the responsibility of the banks
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2. 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 mis-statement.  An audit
 includes examining on a test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3. The Balance Sheet and the Profit and Loss Account have been drawn up
 in Forms A and B respectively of the Third Schedule to the Banking
 Regulation Act, 1 949.
 
 4. a) Subject to limitations of the audit indicated in paragraph 1
 above and as required by the Banking Companies (Acquisition and
 Transfer of Undertakings) Act, 1970 and subject to the limitation of
 disclosures required therein, we report that:
 
 (b) We are unable to express an opinion on the effect on the accounts
 which may arise on reconciliation and adjustment of outstanding entries
 in inter-branch transactions (refer to Note No. 1 of Schedule 1 7) .
 
 (ii) Accounting of certain income on cash basis which is not in
 accordance with Accounting Standard 9 on Revenue Recognition issued
 by the Institute of Chartered Accountants of India (refer to Accounting
 Policy No. 9.2(b) of Schedule 18). The quantum of such income has not
 been ascertained.
 
 (iii) Attention is drawn to
 
 (a) MAT credit aggregating to Rs.74.22 crores recognised in the Profit
 & Loss A/c. for the year (Refer Note No. 1 1 (a) of Schedule-17).
 
 (b) Classification of Credit Linked Notes (CLN) as Loans and Advances
 instead of Investments (Refer Note No. 5 b of Schedule-17)
 
 (c) Provision of Rs.50 crores against advances by way of credit linked
 notes of Rs. 101.44 crores, following filing of petition for bankruptcy
 by the holding company of the issuer of CLNs (refer Note No. 5b) and
 its consequential effects thereof on the financial statements.
 
 (iv) Capital Adequacy and Other Ratios disclosed in Note No. 14 (1.1)
 of Schedule 17 are subject to the effects of the observations in para
 (i) to (iii) above.
 
 Note No 14 (1.4.2a & 1.4.2b) has been relied upon by us on the basis of
 certificate given by the Management regarding restructured accounts.
 
 5. Subject to our observations in Para 4 (i) to (iv) above and read
 with Notes on Accounts and Principal Accounting Policies as per
 Schedules 17 and 18 respectively, we further report that
 
 a) In our opinion and to the best of our information and according to
 the explanations given to us and as shown by the books of the Bank, the
 financial statements are in conformity with the accounting principles
 generally accepted in India except to the extent stated in Para 4 (ii)
 above and
 
 (i) The Balance Sheet, is a full and fair Balance Sheet containing all
 the necessary particulars and is properly drawn up so as to exhibit a
 true and fair view of the state of affairs of the Bank as on 31 *
 March, 2009;
 
 (ii) The Profit and Loss Account, shows a true balance of Profit for
 the year ended on that date; and
 
 (iii) The Cash Flow Statement gives a true and fair view of the cash
 flows for the year.
 
 b) 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.
 
 c) The transactions of the Bank which have come to our notice have been
 within the powers of the Bank.
 
 d) The returns received from the Branches/ Controlling and Overseas
 offices of the Bank have been found adequate for the purpose of our
 audit.
 
 For K K S & Co.        For A. R. & Co.         For Chatterjee & Co.
 Chartered Accountants  Chartered Accountants   Chartered Accountants
 
 (CA S.K. Kulthia)      (CA Pawan K. Goel)      (CA S.K. Chatterjee)
 Partner                Partner                 Partner
 Membership No. 1 7092  Membership No. 072209   Membership No. 03124
 
 
 For D.R.Mohnot & Co.   For Goel Garg & Co.     For Bansal & Co.
 Chartered Accountants  Chartered Accountants   Chartered Accountants
 
 (CA D.R. Mohnot)       (CAJ.L Garg)            (CA D.S. Rawat)
 Partner                Partner                 Partner
 Membership No. 070579  Membership No. 05406    Membership No. 83030
 
 
 Kolkata, the 8th May, 2009