1) We have audited the attached Balance Sheet of Vijaya Bank as at 31st
 March, 2011 and also the Profit and Loss Account and the Cash Flow
 Statement annexed thereto for the year ended on that date in which are
 incorporated the returns of 20 branches audited by us and 1007 branches
 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 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 172 branches which have not been subjected to
 audit. These unaudited branches account for 0.72% of advances, 26.48%
 of deposits, 0.50% of interest income and 17.62% of interest expenses.
 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 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 misstatements. 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 Forms A and B respectively of the Third Schedule to the Banking
 Regulation Act, 1949.
 
 4) Subject to the limitations of the audit indicated in paragraph 1
 above and as required by the Banking Companies (Acquisition and
 Transfer of Undertakings) Act 1980 and subject also to the limitations
 of disclosure required therein, 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.
 
 5) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement comply with the applicable accounting standards..
 
 6) In our opinion, as shown by books of bank and to the best of our
 information and according to the explanations given to us.
 
 i) The Balance Sheet, read with the notes thereon is a full and fair
 Balance Sheet containing all the necessary particulars, is properly
 drawn up so as to exhibit a true and fair view of state of affairs of
 the Bank as at 31st March, 2011, in conformity with accounting
 principles generally accepted in India;
 
 ii) The Profit and Loss Account read with the notes thereon shows a
 true balance of profit, in conformity with accounting principles
 generally accepted in India, for the year covered by the account; and
 
 iii) The Cash Flow Statement gives a true and fair view of the cash
 flows for the year ended on that date.
 
 7) Emphasis of Matter
 
 Without qualifying our opinion, we draw attention to Note 7 (v) to the
 financial statements, which describes deferment of pension and gratuity
 liability of the bank to the extent of Rs. 477 crore pursuant to the
 exemption granted by the Reserve Bank of India to the public sector
 banks from of application of the provisions of Accounting Standard (AS)
 15, Employee Benefits vide its circular no.  DBOD.
 BP.BC/80/21.04.018/2010-11 on Re-opening of Pension Option to Employees
 of Public Sector Banks and Enhancement in Gratuity Limits - Prudential
 Regulatory Treatment.
 
 For M/s R. BANSAL & CO
 
 Chartered Accountants
 
 Registration No: 002736N
 
 [Y.R. SHARMA]
 
 Partner
 
 Membership No:092691
 
 For M/s M.P. CHITALE & CO
 
 Chartered Accountants
 
 Registration No: 101851W
 
 [ULHAS CHITALE]
 
 Partner
 
 Membership No:032292
 
 For M/s P.CHANDRASEKAR
 
 Chartered Accountants
 
 Registration No: 000580S
 
 [LAKSHMY C]
 
 Partner
 
 Membership No:028508
 
 For M/s CONTRACTOR,
 
 NAYAK & KISHNADWALA
 
 Chartered Accountants
 
 Registration No: 101961W
 
 [G.S. NAYAK]
 
 Partner
 
 Membership No:038127
 
 For M/s S VISWANATHAN
 
 Chartered Accouniants
 
 Registration No: 004770S
 
 [CHELLA K. RAGHAVENDRAN]
 
 Partner
 
 Membership No:208562
 
 For M/s RAO ASSOCIATES
 
 Chartered Accountants
 
 Registration No: 003080S
 
 [G SUDHINDRA]
 
 Partner
 
 Membership No:26171
 
 Place : Bangalore
 
 Date   : 28.04.2011