Punjab National Bankकी ऑडीटर रिपोर्ट

Mar 31, 2023

Opinion

1. We have audited the accompanying standalone financial statements of Punjab National Bank (''the Bank''), which comprise the Balance Sheet as at March 31, 2023, the Profit and Loss Account and the Statement of Cash Flows for the year then ended, and notes to financial statements including a summary of significant accounting policies and other explanatory information in which are included the returns for the year ended on that date of the Central Office, 22 Zonal Offices and

i) . 20 Domestic branches, 1 International Banking Unit,

Treasury division, Credit Card division and 40 other offices audited by us.

ii) . 1763 Indian branches and other offices audited by

statutory branch auditors.

iii) . 1 foreign branch audited by 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, the Profit and Loss Account and the Statement of Cash Flows are the returns from 9490 branches which have not been subjected to audit. These unaudited branches account for 25.01 percent of advances, 65.03 per cent of deposits, 19.03 percent of interest income and 61.87 percent of interest expenses.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Banking Regulation Act, 1949 in the manner so required for bank and are in conformity with accounting principles generally accepted in India and:

a. 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 the state of affairs of the Bankas at March 31,2023;

b. the Profit and Loss Account, read with the notes thereon shows a true balance of profit/loss (as applicable); and

c. the Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the ICAI. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the standalone Financial

Statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with ethical requirements that are relevant to our audit of the financial statements prepared in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by the ICAI, and provisions of section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (“RBI”) from time to time and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters prescribed below to be the key audit matters to be communicated in our report.

Key Audit Matters

How our matter was addressed in the audit

Advances - classification and provisioning (Refer Schedule 9 to the Standalone Financial Statements, read with the Accounting Policy No.5) The advances are classified as performing and non-performing advances (NPA) and provisioning thereon is made in accordance with the prudential norms as prescribed by the Reserve Bank of India (RBI). The Bank has implemented complete system driven recognition of advances and their classification in SASCL Application under Core Banking Solution (CBS). The extent of provisioning of NPA under the prudential norms are mainly based on its ageing and recoverability of the underlined security. The same are also reviewed manually based on necessity. In the event of any improper application of the prudential norms or consideration of the

Our audit approach included an understanding of the Bank''s software, circulars, guidelines and directives of the Reserve Bank of India and the Bank''s internal instructions and procedures in respect of the assets classification and its provisioning and adopted the following audit procedures: • Evaluated and understood the Bank''s internal control system in adhering to the Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances. • Test checked the design and implementation as well as operational effectiveness of relevant internal controls and substantive testing, including involvement of manual process in relation to income recognition, asset classification and provisioning pertaining to advances. • Reviewed the Bank''s

Key Audit Matters	How our matter was addressed in the audit
incorrect value of the security, as the valuation of the security involves high degree of estimation and judgement, the carrying value of the advances could be materially misstated either individually or collectively, and in view of the significance of the amount of advances in the Standalone Financial Statements the classification of the advances and provisioning thereon has been considered as Key Audit Matter in our audit	monitoring mechanisms to identify errors and omission in applying/ implementation of logic / data integrity and its corrective action. • Reviewed the documentations, operations / performance and monitoring of the advance accounts, on as per RBI guidelines basis of the large and stressed advances, to ascertain any overdue, unsatisfactory conduct or weakness in any advance account, examination of classification as per prudential norms of the RBI, in respect of the branches / relevant divisions audited by us. In respect of the branches audited by the branch statutory auditors, we have placed reliance on their reports. • Reviewed the report of independent IT Expert on review of SASCL Application (Income Recognition and Asset Classification solution) used by CBS including the review of “Baseline Requirements for the N PA classification Solution”. • Reviewed on test check basis the reports of the credit audit, inspection audit, risk based internal audit, concurrent audit, regulatory audit to ascertain the advances having any adverse features / comments, and reviewed the reports generated from the Bank''s system. Our Results: The results of our audit process were observed to be adequate and satisfactory considering the materiality of the transactions
Investments - valuation, and identification and provisioning for Non-Performing Investments (Refer Schedule 8 to the Standalone Financial Statements, read with the Accounting Policy No.4)	Our audit approach towards Investments with reference to the RBI circulars / directives included the review and testing of the design, implementation, operating effectiveness of internal controls and audit procedures in relation to

Key Audit Matters	How our matter was addressed in the audit
Investment portfolio of the bank comprises of Investments in Government Securities, Bonds, Debentures, Shares, Security Receipts and other Approved Securities which are classified under three categories, Held to Maturity, Available for Sale and HeldforTrade. Valuation of Investments, identification of Non performing Investments (NPI) and the corresponding non-recognition of income and provision thereon, is carried out in accordance with the relevant circulars / guidelines / directions of RBI. The valuation of each category (type) of aforesaid security is to be carried out as per the methodology prescribed in circulars and directives issued by the RBI which involves collection of data/ information from various sources such as FBIL rates, rates quoted on BSE/NSE, financial statements of unlisted companies, NAV in case of mutual funds & security receipts etc. Certain investments are based on the valuation methodologies that include statistical models with inherent assumptions, assessment of price for valuation based on financial statements etc. Hence, the price discovered for the valuation of these Investments may not be the true representative but only a fair assessment of the Investments as on date. Hence the valuation of Investments requires special attention and further in view of the significance of the amount of Investments in the financial statements the same has been considered as Key Audit Matter in our audit.	valuation, classification, identification of Non-Performing Investments, provisioning / depreciation related to Investments as per RBI guidelines. • We reviewed and evaluated the process adopted for collection of information from various sources for determining fair value of these investments. • For selected sample of investments (covering all categories of investments based on nature of security) we tested accuracy and compliance with the RBI Master circulars and directions. • We assessed and evaluated the process of identification of NPIs, and corresponding reversal of income and creation of provision. Our Results: The results of our audit process were observed to be adequate and satisfactory considering the materiality.
Assessment of Information Technology (IT): IT controls with respect to recording of transactions, generating various reports in compliance with RBI guidelines including IRAC norms.	Ouraudit approach included:- • Understanding the coding system adopted by the Bank for various categories of customers. • Reviewed the design, implementation and operating

Key Audit Matters	How our matter was addressed
Other compliances to regulators etc., is an important part of the process. Such reporting is highly dependent on the effective working of Core Banking Software and other allied systems. We have considered this as key audit matter as any control lapses, validation failures, incorrect input data and wrong extraction of data may result in wrong reporting of data to the management and regulators.	effectiveness of the Bank''s IT controls including application, access controls that are critical to financial reporting on test check basis. • Understanding the feeding of the data in the system and going through the extraction of the financial information and statements from the IT system existing in the Bank. • Checking of the user requirements for any changes in the regulations/ policy of the Bank. • Reviewed the reports generated by the system on sample basis. • Reviewed the report of independent IT Expert on review of SASCL Application (Income Recognition and Asset Classification solution) used by CBS including the review of “Baseline Requirements for the N PA classification Solution”. Our Results: There is continuous progress, still the system needs to be strengthened for its efficacy to control deficiencies of input/ output data from the system.
Litigation & Contingent Liabilities Assessment of Contingent liabilities in respect of certain litigations including Direct and Indirect Taxes and various other claims filed by other parties upon the Bank not acknowledged as debts. The Bank''s assessment is supported by the facts of matter, their own judgment, past experience, and advice from legal and independent tax consultants wherever considered necessary. Accordingly, unexpected adverse outcomes may significantly impact the Bank''s reported profit and the Balance Sheet.	Our audit approach included:- • Going through the current status of the tax litigations and contingent liabilities; • Examining the orders and/or communication received from various Tax Authorities/ Judicial forums and follow up action thereon; • Evaluating the merits of the subject matter under consideration with reference to the grounds presented therein and available independent legal / tax advice; and • Wherever required, reliance is

Key Audit Matters	How our matter was addressed
We determined the above area as	placed on the opinion of legal
a Key Audit Matter in view of associated uncertainty relating to the outcome of litigations which requires application of judgment in interpretation of law. Accordingly, our audit was focused on analysing the facts of subject matter under consideration and judgments/ interpretation of law involved.	and tax consultants.

Information Other than the Standalone Financial Statements and

Auditor''s Report thereon

5. The Bank''s Board of Directors is responsible for the other information. The other information comprises the Directors'' Report, including annexures, Corporate Governance Report, Business Responsibility and Sustainability report, and other reports (but does not include the financial statements and our auditor''s report thereon). Our opinion on the Standalone Financial Statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with

Governance forthe Standalone Financial Statements

6. The Bank''s Board of Directors is responsible with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the applicable Accounting Standards, and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (''RBI'') from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial

statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Auditor''s Responsibilities forthe Audit of the Standalone Financial

Statements

7. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the bank to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whetherthe financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of the misstatements in the standalone financial statements that, individually or aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning of the scope of ouraudit workand evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatement in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

8. We did not audit the financial statements / information of 1763 (number) branches and other offices and 1 foreign branch included in the standalone financial statements of the Bank whose financial statements / financial information reflect total assets of Rs. 2,54,776.99 crores as at March 31,2023 and total revenue of Rs. 15,007.19 crores for the year ended on that date, as considered in the standalone financial statements. These branches and other offices and foreign branches cover 23.42% of advances, 28.82% of deposits and 33.06% of nonperforming assets as at March 31,2023 and 15.43% of revenue for the year ended March 31,2023. The financial statements / information of these branches has been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

9. The Balance Sheet and the Profit and Loss Account have been

drawn up in accordance with Section 29 of the Banking Regulation Act, 1949;

10. Subject to the limitations of the audit indicated in paragraphs 7 and 9 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, 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; and

c. The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit

11. As required by letter No. DOS. ARG. No. 6270/08.91.001/ 2019-20 dated March 17, 2020 on “Appointment of Statutory Central Auditors (SCAs) in Public Sector Banks - Reporting obligations for SCAs from FY 2019-20”, read with subsequent communication dated May 19, 2020 issued by the RBI, we further report on the matters specified in paragraph 2 of the aforesaid letter as under:

a. In our opinion, the aforesaid Standalone Financial Statements comply with the applicable Accounting Standards issued by ICAI, to the extent they are not inconsistent with the accounting policies prescribed by the RBI.

b. There are no observations or comments on financial transactions or matters which have any adverse effect on the functioning of the Bank.

c. As the Bank is not registered under the Companies Act, 2013 the disqualification from being a director of the bank under sub-section (2) of section 164 of the Companies Act, 2013 do not apply to the Bank.

d. There are no qualifications, reservations or adverse remarks relating to the maintenance of accounts and other matters connected therewith.

e. Our audit report on the adequacy and operating effectiveness of the Bank''s internal financial controls over financial reporting is given in Annexure A to this report. Our report expresses an unmodified opinion on the Bank''s internal financial controls over financial reporting with reference to the Standalone Financial Statements as at March 31,2023.

12. We further report that:

a. In our opinion, proper books of account 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 purposes of our audit have been received from branches not visited by us;

b. the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

c. the reports on the accounts of the branch offices audited by branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report; and

d. In our opinion, the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

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Mar 31, 2022

INDEPENDENT AUDITORS'' REPORT

To the Members of Punjab National Bank

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying Standalone Financial Statements of the Punjab National Bank ("the Bank) which comprise the Balance Sheet as at 31 March, 2022, and the Profit and Loss Account and the Cash Flow Statement for the year then ended and Notes to Standalone Financial Statements including a Summary of Significant Accounting Policies and Other Explanatory Information, in which are included returns for year ended on that date of the Central Office, Zonal Offices, and

i) 20 branches, treasury division, credit card division and 41 other offices audited by us

ii) 4270 branches and other offices audited by statutory branch auditors

iii) 2 foreign branches audited by 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 included in the Balance Sheet, the Profit and Loss account and the Cash Flow Statement are the returns from 7088 branches and other offices of the bank which have not been subjected to audit. These unaudited branches account for 15.55 percent of advances, 41.88 percent of deposits, 11.34 percent of interest income and 40.62 percent of interest expenses.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Banking Regulation Act, 1949 (the ''Act'') in the manner so required for Bank and are in conformity with accounting principles generally accepted in India and:

a. 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 the state of affairs of the Bank as at 31 March, 2022;

b. the Profit and Loss Account, read with the notes thereon shows a true balance of profit and

c. the Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants

of India (ICAI). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements'' section of our report. We are independent of the Bank in accordance with the code of ethics issued by the Institute of Chartered Accountants of India together with ethical requirements that are relevant to our audit of the Standalone Financial Statements in India, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters

How our matter was addressed in the audit

Advances - classification and provisioning (Refer Schedule 9 to the Standalone Financial Statements, read with the Accounting Policy No.5) The advances are classified as performing and nonperforming advances (NPA) and provisioning thereon is made in accordance with the prudential norms as prescribed by the Reserve Bank of India (RBI). The Bank has implemented complete system driven recognition of advances and their classification in SASCL Application under Core Banking Solution (CBS). The extent of provisioning of NPA under the prudential norms are mainly based on its ageing and recoverability of the underlined security. The same are also reviewed manually based on necessity.

Our audit approach included an understanding of the Bank''s software, circulars, guidelines and directives of the Reserve Bank of India and the Bank''s internal instructions and procedures in respect of the assets classification and its provisioning and adopted the following audit procedures: • Evaluated and understood the Bank''s internal control system in adhering to the Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances. • Test checked the design and implementation as well as operational effectiveness of relevant internal controls and substantive testing, including involvement of manual process in relation to income recognition, asset classification and provisioning pertaining to advances

Key Audit Matters

How our matter was addressed in the audit

In the event of any improper application of the prudential norms or consideration of the incorrect value of the security, as the valuation of the security involves high degree of estimation and judgement, the carrying value of the advances could be materially misstated either individually or collectively, and in view of the significance of the amount of advances in the Standalone Financial Statements the classification of the advances and provisioning thereon has been considered as Key Audit Matter in our audit.

• Reviewed the Bank''s monitoring mechanisms to identify errors and omission in applying/ implementation of logic / data integrity and. its corrective action. • Reviewed the documentations, operations / performance and monitoring of the advance accounts, on as per RBI guidelines basis of the large and stressed advances, to ascertain any overdue, unsatisfactory conduct or weakness in any advance account, examination of classification as per prudential norms of the RBI, in respect of the branches / relevant divisions audited by us. In respect of the branches audited by the branch statutory auditors, we have placed reliance on their reports. • Reviewed the report of independent IT Expert on review of SASCL Application (Income Recognition and Asset Classification solution) used by CBS including the review of "Baseline Requirements for the NPA classification Solution". • Reviewed on test check basis the reports of the credit audit, inspection audit, risk based internal audit, concurrent audit, regulatory audit to ascertain the advances having any adverse features / comments, and reviewed the reports generated from the Bank''s system. Our Results: The results of our audit process were observed to be adequate and satisfactory considering the materiality of the transactions.

Key Audit Matters

How our matter was addressed in the audit

Investments - valuation, and identification and provisioning for NonPerforming Investments (Refer Schedule 8 to the Standalone Financial Statements, read with the Accounting Policy No.4) Investment portfolio of the bank comprises of Investments in Government Securities, Bonds, Debentures, Shares, Security Receipts and other Approved Securities which are classified under three categories, Held to Maturity, Available for Sale and Held for Trade. Valuation of Investments, identification of Nonperforming Investments (NPI) and the corresponding non-recognition of income and provision thereon, is carried out in accordance with the relevant circulars / guidelines / directions of RBI. The valuation of each category (type) of aforesaid security is to be carried out as per the methodology prescribed in circulars and directives issued by the RBI which involves collection of data/ information from various sources such as FBIL rates, rates quoted on BSE/ NSE, financial statements of unlisted companies, NAV in case of mutual funds & security receipts etc. Certain investments are based on the valuation methodologies that include statistical models with inherent assumptions, assessment of price for valuation based on financial statements etc. Hence, the price discovered for the valuation of these Investments may not be the true representative but only a fair assessment of the Investments as on date. Hence the valuation of Investments requires special attention and further in view of the significance of the amount of Investments in the financial statements the same has been considered as Key Audit Matter in our audit.

Our audit approach towards Investments with reference to the RBI circulars / directives included the review and testing of the design, implementation, operating effectiveness of internal controls and audit procedures in relation to valuation, classification, identification of Non-Performing Investments, provisioning / depreciation related to Investments as per RBI guidelines. ¦ We reviewed and evaluated the process adopted for collection of information from various sources for determining fair value of these investments. ¦ For selected sample of investments (covering all categories of investments based on nature of security) we tested accuracy and compliance with the RBI Master circulars and directions. ¦ We assessed and evaluated the process of identification of NPIs, and corresponding reversal of income and creation of provision. Our Results: The results of our audit process were observed to be adequate and satisfactory considering the materiality.

Key Audit Matters	How our matter was addressed in the audit
Assessment of Information Technology (IT): IT controls with respect to recording of transactions, generating various reports in compliance with RBI guidelines including IRAC, preparing. Other compliances to regulators etc. is an important part of the process. Such reporting is highly dependent on the effective working of Core Banking Software and other allied systems. We have considered this as key audit matter as any control lapses, validation failures, incorrect input data and wrong extraction of data may result in wrong reporting of data to the management and regulators.	Our audit approach included: - • Understanding the coding system adopted by the Bank for various categories of customers. • Reviewed the design, implementation and operating effectiveness of the Bank''s IT controls including application, access controls that are critical to financial reporting on test check basis. • Understanding the feeding of the data in the system and going through the extraction of the financial information and statements from the IT system existing in the Bank. • Checking of the user requirements for any changes in the regulations/ policy of the Bank. • Reviewed the reports generated by the system on sample basis. • Reviewed the report of independent IT Expert on review of SASCL Application (Income Recognition and Asset Classification solution) used by CBS including the review of "Baseline Requirements for the NPA classification Solution" Our Result There is continuous progress, still the system needs to be strengthened for its efficacy to control deficiencies of input/ output data from the system.
Litigation & Contingent Liabilities Assessment of Contingent liabilities in respect of certain litigations including Direct and Indirect Taxes and various other claims filed by other parties upon the Bank not acknowledged as debts.	Our audit approach included: - • Going through the current status of the tax litigations and contingent liabilities; • Examining the orders and/ or communication received from various Tax Authorities/ Judicial forums and follow up action thereon;

Key Audit Matters

How our matter was addressed in the audit

The Bank''s assessment is supported by the facts of matter, their own judgment, past experience, and advice from legal and independent tax consultants wherever considered necessary. Accordingly, unexpected adverse outcomes may significantly impact the Bank''s reported profit and the Balance Sheet. We determined the above area as a Key Audit Matter in view of associated uncertainty relating to the outcome of litigations which requires application of judgment in interpretation of law. Accordingly, our audit was focused on analysing the facts of subject matter under consideration and judgments/ interpretation of law involved.

• Evaluating the merits of the subject matter under consideration with reference to the grounds presented therein and available independent legal / tax advice; and • Wherever required, reliance is placed on the opinion of legal and tax consultants.

Emphasis of Matter

5. We draw attention to following:

a. Note No. 15 (a) of Schedule 18 to the Standalone Financial Statements regarding change in policy of revenue recognition of commission on Letter of Credit and Bank Guarantee on prorata basis to the extent accrued for the period.

b. Note No. 15 (e) (ii) of Schedule 18 to the Standalone Financial Statements, regarding amortization of additional liability on account of revision in family pension amounting to Rs. 3,093.95 crores. The Bank has charged an amount of Rs. 1573.79 crores to the Profit and Loss Account for the year ending 31 March 2022 and the balance unamortized expense of Rs. 1520.16 crores has been carried forward.

c. Note No. 30 of the Schedule 18 to to the Standalone Financial Statements, which describes the uncertainties due to outbreak of novel corona virus (COVID 19) and the management''s assessment of its impact on the business operations of the Bank.

Our opinion is not modified in respect of these matters.

Information Other than the Standalone FinancialStatements and Auditor''s Report thereon

6. The Bank''s Board of Directors is responsible for the

other information. The other information comprises the Directors'' Report, including annexures, Corporate Governance Report and other reports (but does not include the financial statements and our auditor''s report thereon). Our opinion on the Standalone Financial Statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged withGovernance for the Standalone Financial Statements

7. The Bank''s Board of Directors is responsible with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the applicable Accounting Standards issued by ICAI, and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (''RBI'') from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Auditor''s Responsibilities for the Audit of the StandaloneFinancial Statements

8. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. In terms of RBI Directions, we are also responsible for expressing our opinion through a separate report on whether the Bank has adequate internal financial controls with reference to the Standalone Financial Results in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the bank to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of the misstatements in the standalone financial statements that, individually or aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning of the scope of our audit work and evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatement in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

9. We did not audit the financial statements/information of 4270 branches and other offices and 2 foreign branches included in the Standalone Financial Statements of the Bank whose financial statements/financial information reflect total assets of Rs. 724077 Crore as at 31 March 2022 and total revenue of Rs. 20,487.60 Crores for the year ended on that date, as considered in the Standalone Financial Statements. These branches and other offices and foreign branches cover 35.05% advances, 54.32 % of deposits 38.02% of non-performing assets as at 31 March 2022 and 23.50% of revenue for the year ended 31 March 2022. The financial statements / information of these branches has been audited by the branch auditors whose reports have been furnished to us, and in our opinion in so far as it relates to the amounts and disclosures included in respect of branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of these matter.

Report on Other Legal and Regulatory Requirements

10. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 29 of the Banking Regulation Act, 1949;

11. Subject to the limitations of the audit indicated in paragraphs 7 and 9 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, 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; and

c. The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit.

12. As required by letter No. DOS.ARG.No. 6270/08.91.001/ 2019-20 dated 17 March 2020 on "Appointment of Statutory Central Auditors (SCAs) in Public Sector Banks -Reporting obligations for SCAs from FY 2019-20", read with subsequent communication dated 19 May 2020 issued by the RBI, we further report on the matters specified in paragraph 2 of the aforesaid letter as under:

a. In our opinion, the aforesaid Standalone Financial Statements comply with the applicable Accounting Standards issued by ICAI, to the extent they are not inconsistent with the accounting policies prescribed by the RBI.

b. There are no observations or comments on financial transactions or matters which have any adverse effect on the functioning of the Bank.

c. As the Bank is not registered under the Companies Act, 2013 the disqualification from being a director of the bank under sub-section (2) of section 164 of the Companies Act, 2013 do not apply to the Bank.

d. There are no qualifications, reservations or adverse remarks relating to the maintenance of accounts and other matters connected therewith.

e. Our audit report on the adequacy and operating effectiveness of the Bank''s internal financial controls over financial reporting is given in Annexure A to this report. Our report expresses an unmodified opinion on the Bank''s internal financial controls over financial reporting as at 31 March 2022.

13. We further report that:

a. in our opinion, proper books of account 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 purposes of our audit have been received from branches not visited by us;

b. the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

c. the reports on the accounts of the branch offices audited by branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report; and

d. In our opinion, the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

---

Mar 31, 2021

To the Members of Punjab National Bank

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying Standalone Financial Statements of the Punjab National Bank (“the Bank) which comprise the Balance Sheet as at 31 March, 2021, and the Profit and Loss account and the Cash Flow Statement for the year then ended and notes to Standalone Financial Statements including a summary of significant accounting policies and other explanatory information, in which are included returns for year ended on that date of 20 branches, treasury division and 45 other offices audited by us and 5881 branches and other offices audited by statutory branch auditors and 2 foreign branches audited by 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 included in the Balance Sheet, the Profit and Loss account and the Cash Flow Statement are the returns from 6103 branches and other offices of the bank which have not been subjected to audit. These unaudited branches account for 8.90 percent of advances, 29.31 percent of deposits, 6.65 percent of interest income and 28.55 percent of interest expenses.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Banking Regulation Act, 1949 (the ‘Act'') in the manner so required for Bank and are in conformity with accounting principles generally accepted in India and:

a. 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 the state of affairs of the Bank as at 31 March, 2021;

b. the Profit and Loss Account, read with the notes thereon shows a true balance of profit and

c. the Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (ICAI). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements'' section of our report. We are independent of the Bank in accordance with the code of ethics issued by the Institute of Chartered Accountants of India together with ethical requirements that are relevant to our audit of the Standalone Financial Statements in India, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	How our matter was addressed in the audit
Advances - classification and	Our audit approach included an understanding of the Bank''s software, circulars, guidelines and directives of the Reserve Bank of India and the Bank''s internal instructions and procedures in respect of the assets classification and its provisioning and adopted the following audit procedures: • Evaluated and understood the Bank''s internal control system in adhering to the Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances. • Test checked the design and implementation as well as operational effectiveness of relevant controls, including involvement of manual process in relation to income recognition, asset classification and provisioning pertaining to advances • Reviewed the documentations, operations / performance and monitoring of the advance accounts, on test check basis of the large and stressed advances, to ascertain any overdue, unsatisfactory conduct or weakness in any advance account, examination of classification as per prudential norms of the RBI, in respect of the branches / relevant divisions audited by us. In respect of the branches audited by the branch statutory auditors, we have placed reliance on their reports. Further we have reviewed on test check basis the reports of the credit audit, inspection audit, risk
provisioning (Refer Schedule 9 to the Standalone Financial Statements, read with the Accounting Policy No.5) The advances are classified as performing and nonperforming advances (NPA) and provisioning thereon is made in accordance with the prudential norms as prescribed by the Reserve Bank of India (RBI). The asset classification, income recognition and provisioning is done by Core Banking Solution(CBS). The extent of provisioning of NPA under the prudential norms are mainly based on its ageing and recoverability of the underlined security. In the event of any improper application of the prudential norms or consideration of the incorrect value of the security, as the valuation of the security involves high degree of estimation and judgement, the carrying value of the advances could be materially misstated either individually or collectively, and in view of the significance of the amount of advances in the Standalone Financial Statements the classification of the advances and provisioning thereon has been considered as Key Audit Matter in our audit.
Investments - valuation, and
identification and Drovisionina
for Non-Performing
Investments

(Refer Schedule 8 to the Standalone Financial Statements, read with the Accounting Policy No.4) Investment portfolio of the bank comprises of Investments in Government Securities, Bonds, Debentures, Shares, Security Receipts and other Approved Securities which are classified under three categories, Held to Maturity, Available for Sale and Held for Trade. Valuation of Investments, identification of Nonperforming Investments (NPI) and the corresponding non-recognition of income and provision thereon, is carried out in accordance with the relevant circulars / guidelines / directions of RBI. The valuation of each category (type) of aforesaid security is to be carried out as per the methodology prescribed in circulars and directives issued by the RBI which involves collection of data/ information from various sources such as FBIL rates, rates quoted on BSE/ NSE, financial statements of unlisted companies, NAV in case of mutual funds & security receipts etc. Certain investments are based on the valuation methodologies that include statistical models with inherent assumptions, assessment of price for valuation based on financial statements etc. Hence, the price discovered for the valuation of these Investments may not be the true representative but only a fair assessment of the Investments as on date. Hence the valuation of Investments requires special attention and further in view of the significance of the amount of Investments in the financial statements the same has been considered as Key Audit Matter in our audit.	based internal audit, concurrent audit, regulatory audit to ascertain the advances having any adverse features / comments, and reviewed the reports generated from the Bank''s system. Our Results: The results of our audit process were observed to be adequate and satisfactory considering the materiality of the transactions.
	Our audit approach towards Investments with reference to the RBI circulars / directives included the review and testing of the design, implementation, operating effectiveness of internal controls and audit procedures in relation to valuation, classification, identification of Non-Performing Investments, provisioning / depreciation related to Investments as per RBI guidelines. ¦We reviewed and evaluated the process adopted for collection of information from various sources for determining fair value of these investments. ¦For selected sample of investments (covering all categories of investments based on nature of security) we tested accuracy and compliance with the RBI Master circulars and directions. ¦We assessed and evaluated the process of identification of NPIs, and corresponding reversal of income and creation of provision. Our Results: The results of our audit process were observed to be adequate and satisfactory considering the materiality.
	Our audit approach included: - ¦Understanding the coding system adopted by the Bank for various categories of customers. ¦Understanding the feeding of the data in the system and going through the extraction of the financial information and statements from the IT system existing in the Bank. ¦ Checking of the user requirements for any changes in the regulations/ policy of the Bank.
Assessment of Information Technology (IT): IT controls with respect to recording of transactions, generating various reports in compliance with RBI guidelines including IRAC, preparing.

Other compliances to regulators etc. is an important part of the process. Such reporting is highly dependent on the effective working of Core Banking Software and other allied systems. We have considered this as key audit matter as any control lapses, validation failures, incorrect input data and wrong extraction of data may result in wrong reporting of data to the management and regulators.	¦ Reviewed the reports generated by the system on sample basis. Our Result However, the system needs to be strengthened for its efficacy to control persisting deficiencies of input/output data from the system.
	Our audit approach included: - • Going through the current status of the tax litigations and contingent liabilities; • Examining the orders and/or communication received from various Tax Authorities/ Judicial forums and follow up action thereon; • Evaluating the merits of the subject matter under consideration with reference to the grounds presented therein and available independent legal / tax advice ; and • Wherever required, reliance is placed on the opinion of legal and tax consultants.
Litigation & Contingent Liabilities Assessment of Contingent liabilities in respect of certain litigations including Direct and Indirect Taxes and various other claims filed by other parties upon the Bank not acknowledged as debts. The Bank’s assessment is supported by the facts of matter, their own judgment, past experience, and advices from legal and independent tax consultants wherever considered necessary. Accordingly, unexpected adverse outcomes may significantly impact the Bank’s reported profit and the Balance Sheet. We determined the above area as a Key Audit Matter in view of associated uncertainty relating to the outcome of litigations which requires application of judgment in interpretation of law. Accordingly, our audit was focused on analysing the facts of subject matter under consideration and judgments/ interpretation of law involved.

Emphasis of Matter

5. We draw attention to following:

a. Note No. 11 of the Standalone Financial Statements regarding change in accounting policy of appropriation of recovery in NPA accounts.

b. Note No. 6 (k) to the Standalone Financial Statements, which describes the uncertainties due to outbreak of novel corona virus (COVID 19) and the management''s assessment of its impact on the business operations of the Bank.

Our opinion is not modified in respect of these matters.

Information Other than the Standalone Financial Statements

and Auditor''s Report thereon

6. The Bank''s Board of Directors is responsible for the other information. The other information comprises the Corporate Governance Report (but does not include the financial statements and our auditor''s report thereon), which we obtained prior to the date of this auditor''s report or which we obtained at the time of issue of this auditors'' report, and Directors'' Report, including annexures, if any, thereon, which is expected to be made available to us after that date.

Our opinion on the Standalone Financial Statements does not cover the other information and Pillar 3 disclosure under Basel III and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor''s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the Directors'' Report, including annexure, if any, thereon, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with

Governance for the Standalone Financial Statements

7. The Bank''s Board of Directors is responsible with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI, and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (‘RBI'') from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Standalone

Financial Statements

8. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• To obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the bank to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

9. We did not audit the financial statements / information of 5881 branches and other offices and 2 foreign branches included in the standalone financial statements of the Bank whose financial statements / financial information reflect advances of 3,77,399.05 Crore as at 31 March 2021 and total revenue of Rs. 31,358.39 Crores for the year ended on that date, as considered in the standalone financial statements. The financial statements / information of these branches have been audited by the branch auditors whose reports have been furnished to us, and in our opinion in so far as it relates to the amounts and disclosures included in respect of branches, is based solely on the report of such branch auditors.

10. As stated in Note no. 1 of the Schedule 18 of the Standalone Financial Statement for the year ended 31 March 2021 includes operations of erstwhile Oriental Bank of Commerce and erstwhile United Bank of India which are amalgamated with the Bank w.e.f. 1 April 2020 and hence the figures for year ended 31 March 2021 are not comparable with corresponding year ended 31 March 2020.

Our opinion is not modified in respect of these matter.

Report on Other Legal and Regulatory Requirements

11. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 29 of the Banking Regulation Act, 1949;

12. Subject to the limitations of the audit indicated in paragraphs 7 to 9 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, 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; and

c. The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit.

13. We further report that:

a. in our opinion, proper books of account 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 purposes of our audit have been received from branches not visited by us;

b. the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

c. the reports on the accounts of the branch offices audited by branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report; and

d. In our opinion, the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

14. As required by letter No. DOS.ARG.No.6270/08.91.001 /2019- 20 dated 17 March 2020 on “Appointment of Statutory Central Auditors (SCAs) in Public Sector Banks - Reporting obligations for SCAs from FY 201920”, read with subsequent communication dated 19 May 2020 issued by the RBI, we further report on the matters specified in paragraph 2 of the aforesaid letter as under:

a. In our opinion, the aforesaid Standalone Financial Statements comply with the applicable Accounting Standards issued by ICAI, to the extent they are not inconsistent with the accounting policies prescribed by the RBI.

b. There are no observations or comments on financial transactions or matters which have any adverse effect on the functioning of the Bank.

c. As the Bank is not registered under the Companies Act, 2013 the disqualification from being a director of the bank under sub-section (2) of section 164 of the Companies Act, 2013 do not apply to the Bank.

d. There are no qualifications, reservations or adverse remarks relating to the maintenance of accounts and other matters connected therewith.

e. Our audit report on the adequacy and operating effectiveness of the Bank’s internal financial controls over financial reporting is given in Annexure A to this report. Our report expresses an unmodified opinion on the Bank''s internal financial controls over financial reporting as at 31 March 2021.

For S.N. Dhawan & For M K Aggarwal For A John Moris

Co LLP & Co. & Co.

Chartered Chartered Chartered

Accountants Accountants Accountants

FRN 000050N/ FRN 001411N FRN 007220S

N500045

CA Surinder Kr. CA Atul Aggarwal CA G Kumar

Khattar Partner Partner

Partner (M.NO. 099374) (M.NO.023082)

(M.NO.084993) UDIN: 21099374 UDIN: 21023082

UDIN : 21084993 AAAAEA2496 AAAAPG3661

AAAACN4479 Place: New Delhi Place: Chennai

Place: New Delhi

For S R Goyal & Co. For PSMG &

Chartered Associates

Accountants Chartered

FRN:001537C Accountants

FRN: 008567C

CA Ajay Atolia CA Sandeep Jain

Partner Partner

(M.NO. 077201) (M.NO. 077281)

UDIN: 21077201 UDIN: 21077281

AAAAAW5092 AAAAIN3533

Place: New Delhi Place: New Delhi

---

Mar 31, 2019

Report on Audit of the Standalone Financial Statements

Opinion

1. We have audited the financial statements of the Punjab National Bank which comprise the Balance Sheet as at 31^st March, 2019, and the Profit and Loss Account and the Cash Flow Statement for the year then ended and notes to financial statements including a summary of significant accounting policies and other explanatory information, in which are included returns for year ended on that date of 20 branches audited by us and 3861 branches audited by statutory 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 included in the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement are the returns from 3109 branches and 116 other offices of the bank which have not been subjected to audit. These unaudited branches account for 5.38 percent of advances, 23.65 per cent of deposits, 6.98 per cent of interest income and 22.48 percent of interest expenses. Based on above:

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949 (the ‘Act’) in the manner so required for bank and are in conformity with accounting principles generally accepted in India and give:

a) true and fair view in case of the Balance sheet, of the state of affairs of the Bank as at 31^st March, 2019;

b) true balance of loss in case of Profit and Loss Account for the year ended on that date; and

c) true and fair view in case of Cash Flow Statement for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (ICAI). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements'' section of our report. We are independent of the Bank in accordance with the code of ethics issued by the Institute of Chartered Accountants of India together with ethical requirements that are relevant to our audit of the financial statements in India, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	How our matter was addressed in the audit
Advances - classification	Our audit approach included an understanding of the Bank’s software, circulars, guidelines and directives of the Reserve Bank of India and the Bank’s internal instructions and procedures in respect of the assets classification and its provisioning and adopted the following audit procedures: - Evaluated and understood the Bank''s internal control system in adhering to the Relevant RBI guidelines regarding income recognition, asset classification and provisioning pertaining to advances. - Test checked the design and implementation as well as operational effectiveness of relevant controls, including involvement of manual process in relation to income recognition, asset classification and provisioning pertaining to advances - Reviewed the documentations, operations / performance and monitoring of the advance accounts, on test check basis of the large and stressed advances, to ascertain any overdue, unsatisfactory conduct or weakness in any advance account, examination of classification as per prudential norms of the RBI, in respect of the branches / relevant divisions audited by us. In respect of the branches audited by the branch statutory auditors, we have placed reliance on their reports. Further we have reviewed on test check basis the reports of the credit audit, inspection audit, risk based internal audit, concurrent audit, regulatory audit to ascertain the advances having any adverse features / comments, and reviewed the reports generated from CBS/ Ladder. Our Results: The results of our audit process were observed to be adequate and satisfactory considering the materiality of the transactions.
and Drovisionina (Refer Schedule 9 to the financial statements, read with the Accounting Policy No.5) The advances are classified as performing and nonperforming advances (NPA) and provisioning thereon is made in accordance with the prudential norms as prescribed by the Reserve Bank of India (RBI). The classification and provisioning is done by the Bank’s IT software Ladder which imports all the required data from Core Banking Solution (CBS). The extent of provisioning of NPA under the prudential norms are mainly based on its ageing and recoverability of the underlined security. In the event of any improper application of the prudential norms or consideration of the incorrect value of the security, as the valuation of the security involves high degree of estimation and judgement, the carrying value of the advances could be materially misstated either individually or collectively, and in view of the significance of the amount of advances in the financial statements i.e.59.13 % of total assets, the classification of the advances and provisioning thereon has been considered as Key Audit Matter in our audit.

Investments - valuation, and	Our audit approach towards
identification and Provision in a for	Investments with reference to
Non-Performina Investments	the RBI circulars / directives
(Refer Schedule 8 to the	included the review and testing
financial statements, read with	of the design, implementation,
the Accounting Policy No.4)	operating effectiveness of
	internal controls and audit
Investment portfolio of the bank	procedures in relation to
comprises of Investments in	valuation, classification,
Government Securities, Bonds,	identification of Non-Performing
Debentures, Shares, Security Receipts and other Approved Securities which are classified	Investments, provisioning / depreciation related to
under three categories, Held to	Investments as per RBI
Maturity, Available for Sale and	guidelines
Held for Trade.	- We reviewed and evaluated
Valuation of Investments,	the process adopted for
identification of Non-performing	collection of information
Investments (NPI) and the	from various sources for
corresponding non-recognition	determining fair value of
of income and provision thereon,	these investments.
is carried out in accordance
with the relevant circulars /	- For selected sample of
guidelines / directions of RBI.	investments (covering all
The valuation of each category	categories of investments
(type) of aforesaid security is	based on nature of security)
to be carried out as per the	we tested accuracy and
methodology prescribed in	compliance with the RBI
circulars and directives issued	Master circulars and
by the RBI which involves	directions.
collection of data/ information
from various sources such as	- We assessed and evaluated
FBIL rates, rates quoted on	the process of identification
BSE/ NSE, financial statements	of NPIs, and corresponding
of unlisted companies, NAV in	reversal of income and
case of mutual funds & security	creation of provision.
receipts etc. Certain investments	Our Results:
are based on the valuation
methodologies that include	The results of our audit process
statistical models with inherent	were observed to be adequate
assumptions, assessment of price for valuation based on financial statements etc.	and satisfactory considering the materiality.
Hence, the price discovered
for the valuation of these
Investments may not be the true
representative but only a fair
assessment of the Investments
as on date. Hence the valuation
of Investments requires special
attention and further in view of
the significance of the amount
of Investments in the financial
statements i.e. 26.08% of total
assets), the same has been
considered as Key Audit Matter
in our audit

Information Other than the Financial Statements and Auditor’s Report thereon

5. The Bank''s Board of Directors is responsible for the other information. The other information comprises the Corporate Governance Report (but does not include the financial statements and our auditor''s report thereon), which we obtained prior to the date of this auditor''s report, and Directors’ Report, including annexures, if any, thereon, which is expected to be made available to us after that date.

Our opinion on the financial statements does not cover the other information and Pillar 3 disclosure under Basel III and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the Directors’ Report, including annexure, if any, thereon, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

6. The Bank''s Board of Directors is responsible with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards issued by ICAI, and provisions of Section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by the Reserve Bank of India (‘RBI’) from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

7. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the bank to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

8. We did not audit the financial statements / information of 3861 branches included in the standalone financial statements of the Bank whose financial statements / financial information reflect total assets of Rs. 379370.38 crores as at 31^st March 2019 and total revenue of Rs. 21751.57 for the year ended on that date, as considered in the standalone financial statements. The financial statements / information of these branches have been audited by the branch auditors whose reports have been furnished to us, and in our opinion in so far as it relates to the amounts and disclosures included in respect of branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

9. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 29 of the Banking Regulation Act, 1949:

10. Subject to the limitations of the audit indicated in paragraphs 5 to 7 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, 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; and

c. The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit.

11. We further report that:

a. in our opinion, proper books of account 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 purposes of our audit have been received from branches not visited by us;

b. the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

c. the reports on the accounts of the branch offices audited by branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report; and

d. In our opinion, the Balance Sheet, the Profit and Loss Account and the Statement of Cash Flows comply with the applicable accounting standards, to the extent they are not inconsistent with the accounting policies prescribed by RBI.

For G S Mathur & Co. For MKPS & For HDSG &

Chartered Associates. Associates

Accountants Chartered Chartered

Fm 008744N Accountants Accountants

Fm 302014E Frn 002871N

(Rajiv Kumar (Sanjaya Kumar (Dalbir Singh Gulati)

Wadhawan) Parida) Partner

Partner Partner M.no. 081024

M.no. 091007 M.no. 504222

For M K Aggarwal For A John Moris

& Co. & Co.

Chartered Chartered

Accountants Accountants

Fm 001411N Frn 007220S

(M K Aggarwal) (G Kumar)

Partner Partner

M.no. 14956 M.no. 023082

Place: New Delhi

Date: May 28, 2019

---

Mar 31, 2018

INDEPENDENT AUDITORS’ REPORT

To the Members of Punjab National Bank

Report on the Financial Statements

1. We have audited the accompanying Standalone financial statements of Punjab National Bank (the ‘Bank’) as at March 31, 2018, which comprise the Balance Sheet as at March 31, 2018, and Profit and Loss Account 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 21 branches, Treasury Division and 35 other offices audited by us, 3587 branches audited by Statutory Branch Auditors (including 1 off-shore banking unit and 3 foreign branches audited by local auditors in respective countries). 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 3378 branches, 116 other offices of the Bank, which have not been subjected to audit. These unaudited branches and offices account for 6.14% of advances, 24.71% of deposits, 7.78% of interest income and 26.20% of interest expenses.

Management’s Responsibility for the Standalone Financial

Statements

2. Management is responsible for the preparation of these financial statements in accordance with the Banking Regulation Act, 1949, accounting principles generally accepted in India along with recognition and measurement principles laid down in the Accounting Standards issued by the Institute of Chartered Accountants of India so far as they are applicable to the Bank and Reserve Bank of India guidelines from time to time. 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’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Bank’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control. 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. 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 March 31, 2018 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 loss, 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.

Emphasis of Matter

7. Without qualifying our opinion, we draw attention to Note No. 38(J) regarding provision @ 50% amounting to Rs, 7,178.42 crores as against the total amount of Rs, 14,356.84 crores in respect of fraud involving certain accounts under Gems & Jewellery Sector as per the dispensation given by the Reserve Bank of India vide their letter No. 8720/21.04.132/2017-18 dt. 28.03.2018.

Report on Other Legal and Regulatory Requirements

8. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with Section 29 of the Banking Regulation Act, 1949.

9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 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; and

(c) The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit.

10. We further report that:

(a) the Balance Sheet and Profit and Loss account dealt with by this report are in agreement with the books of account and returns;

(b) the reports on the accounts of the branch offices audited by branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report;

(c) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards.

For Suri & Co For SPMG & Co. For MKPS & Associates

Chartered Accountants Chartered Accountants Chartered Accountants

FRN 004283S FRN 509249C FRN.302014E

(P Venugopal) (Avadesh Gupta) (Pradip Kumar Lath)

Partner (M.No.035034) Partner (M.No.516769) Partner (M.No.054130)

For GS Mathur & Co. For HDSG & Associates

Chartered Accountants Chartered Accountants

FRN 008744N FRN 002871N

(Rajiv Kumar (Dalbir Singh Gulati)

Wadhawan) Partner (M.No.081024)

Partner (M.No.091007)

Place: New Delhi

Date: May 15, 2018

---

Mar 31, 2017

To the Members of Punjab National Bank

Report on the Financial Statements

1. We have audited the accompanying Standalone financial statements of Punjab National Bank (the ‘Bank'') as at March 31, 2017, which comprise the Balance Sheet as at March 31, 2017, and Profit and Loss Account 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 21 branches, Treasury Division and 34 other offices audited by us, 3607 branches audited by Statutory Branch Auditors (including 1 off-shore banking unit)and 3 foreign branches audited by local auditors in respective countries. 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 3310 branches, 114 other offices of the Bank, which have not been subjected to audit. These unaudited branches and offices account for 5.73% of advances, 21.81%of deposits,

6.70% of interest income and 23.11% of interest expenses.

Management’s Responsibility for the Standalone Financial

Statements

2. Management is responsible for the preparation of these financial statements in accordance with the Banking Regulation Act, 1949, accounting principles generally accepted in India along-with recognition and measurement principles laid down in the Accounting Standards issued by the Institute of Chartered Accountants of India so far as they are applicable to the Bank and Reserve Bank of India guidelines from time to time. 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 ‘judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Bank''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank''s internal control. 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. 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 March 31, 2017 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.

Emphasis of Matter

7. Without qualifying our opinion, we draw attention to Note no. 15 C regarding valuation of Plan Assets of long-term benefits , resulting in excess of fair value of plan assets over present value of obligation amounting to Rs.2026.60 crores credited to “Payments to and Provisions for Employees-Employee Cost ” with consequential impact on results for the year.

Report on Other Legal and Regulatory Requirements

8. The Balance Sheet and the Profit and Loss Account have been drawn up in in accordance with Section 29 of the Banking Regulation Act, 1949.

9. Subject to the limitations of the audit indicated in paragraph 1 to 5 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, 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; and

(c) The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit.

10 We further report that:

(a) the Balance Sheet and Profit and Loss account dealt with by this report are in agreement with the books of account and returns;

(b) the reports on the accounts of the branch offices audited by branch auditors of the Bank under section 29 of the Banking Regulation Act, 1949 have been sent to us and have been properly dealt with by us in preparing this report;

(c) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards.

For Chhajed & Doshi For R. Devendra Kumar For Hem Sandeep &

Chartered Accountants & Associates Co.

Firm Regn.No. Chartered Accountants Chartered Accountants

101794W Firm Regn.No. Firm Regn.No.009907N

114207W

Sudesh Punhani Neeraj Golas Manish Gupta

Partner Partner Partner

M.No.017222 M.No.074392 M.No.092257

For Suri & Co. For SPMG & Co.

Chartered Accountants Chartered Accountants

Firm Regn.No.004283S Firm Regn.No.509249C

R. Mahesh Satish Chander

Partner Partner

M.No.024775 M.No.087562

Place: New Delhi Date: May 16, 2017

---

Mar 31, 2015

1. We have audited the accompanying Standalone financial statements of PUNJAB NATIONAL BANK ("the Bank") as at 31st March, 2015, which comprise the Balance Sheet as at March 31, 2015, and Profit and Loss Account 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 20 branches audited by us and 2771 branches audited by branch auditors (including 1 off shore banking unit and 25 other offices) and 3 foreign branches audited by 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 3795 branches and 1 60 other offices of the Bank, which have not been subjected to audit. These unaudited branches and offices account for 7.04 per cent of advances, 27.63 per cent of deposits, 7.43 per cent of interest income and 28.42 per cent of interest expenses.

Management''s Responsibility for the Standalone Financial

Statements

2. Management of the Bank is responsible for the preparation of these financial statements in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 ("the Act") and to disclose the information as may be necessary to conform to form ''A'' and form ''B'' respectively of the Third Schedule to the Act, complying with the guidelines issued by the Reserve Bank of India ("RBI") in this matter from time to time and the applicable Accounting Standards ("AS") issued by the Institute of Chartered Accountants of India ("ICAI"). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of these financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s 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 ("SA") issued by the ICAI. 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 procedure to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Bank''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Bank has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management of the Bank, 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 expressing our audit opinion on these financial statements.

Opinion

6. In our opinion, as shown by the books of the 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 2015 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.

Report on Other Legal and Regulatory Requirements

7. 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 Act,

8. Subject to the limitations of the audit indicated in paragraphs 1 to 5 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and subject also to the limitations of disclosure required therein, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and found them to be satisfactory.

b. In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books;

c. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and returns;

d. The transactions of the Bank, which have come to our notice, have been within the powers of the Bank.

e. The returns received from the offices and branches of the Bank have been found adequate for the purposes of our audit except in certain cases where the returns as certified by the management have been relied upon.

f. In our opinion, the aforesaid standalone financial statements comply with the applicable Accounting Standards.

For and on behalf of For and on behalf of For and on behalf of K. N. Gutgutia & Co. CVK & Associates Ramesh Kapoor& Co. Chartered Chartered Chartered Accountants Accountants Accountants

FRN 304153E FRN 101 745W FRN 001477N

B R Goyal A K Pradhan Ramesh Kapoor

Partner Partner Partner

M No. 012172 M No. 032156 M No. 080725

For and on behalf of For and on behalf of For and on behalf of Chhajed & Doshi R. Devendra Kumar Hem Sandeep & Co. Chartered & Associates Chartered Accountants Chartered Accountants FRN 101 794W Accountants FRN 009907N

FRN 114207W

M P Chhajed Neeraj Golas Manish Gupta

Partner Partner Partner

M No. 049357 M No. 074392 M No. 092257

May 08, 2015 Place: New Delhi

---

Mar 31, 2013

1. We have audited the accompanying financial statements of Punjab National Bank as at 31st March, 2013, which comprises of the Balance Sheet as at March 31, 2013 and 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 20 branches audited by us, 2404 branches audited by Branch Auditors (including 1 off shore banking unit and 71 other offices) and 4 foreign branches audited by 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 Statement of Profit and Loss are the returns from 3507 branches which have not been subjected to audit. These unaudited branches account for 8.94 per cent of advances, 28.95 per cent of deposits, 6.58 per cent of interest income and 22.71 per cent of interest expenses.

Management''s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements in accordance with Banking Regulation Act, 1949. 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.

Auditor''s 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 auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Bank''s 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.

6. Emphasis of Matter:

Without qualifying our opinion, we draw attention to Note No. 15 in Schedule 18 to the financial statements, which describes deferment of pension and gratuity liability of the Bank to the extent of Rs. 1329.46 crores pursuant to the exemption granted by the Reserve Bank of India to the public sector banks from application of the provisions of Accounting Standard (AS) 15, Employee Benefits vide its circular no. DBOD. BP. BC/80/21.04.018/2010-1 1 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limits - Prudential Regulatory Treatment.

Opinion

7. In our opinion, as shown by the books of the 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 2013 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 accounts; and

(iii) the Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. 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.

9. Subject to the limitations of the audit indicated in paragraph 3 to 6 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 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.

10. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable accounting standards.

For Borkar & Muzumdar For G S Madhava Rao & Co.

Chartered Accountants Chartered Accountants

FRN. 101569W FRN. 001907S

(Rajesh.C.Batham) (G.Manikya Prasad)

Partner Partner

M.No. 035941 M.No. 020105

For Phillipos & Co. For K N Gutgutia & Co.

Chartered Accountants Chartered Accountants

FRN.002650S FRN.304153E

(C.H. Sreedharan) (B.R.Goyal)

Partner Partner

M.No. 006281 M.No. 012172

For CVK & Associates For Ramesh Kapoor & Co.

Chartered Accountants Chartered Accountants

FRN. 101745W FRN. 001477N

(A.K.Pradhan) (Ramesh Kapoor)

Partner Partner

M.No. 032156 M.No. 080725

Place: New Delhi

Date : 09.05.2013

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Punjab National bank as at 31st March, 2012, the Profit and Loss Account and Cash Flow Statement annexed thereto for the year ended on that date, in which are incorporated the returns of (i) 20 branches, 23 ZAOs/ZTCs/RSCs/CSC and controlling offices audited by us (ii) 3894 branches (including 4 foreign branches and 1 Offshore Banking Unit and 14 other offices) audited by other auditors and (iii) 1901 branches not subjected to audit. These unaudited branches account for 1.80% of advances, 7.72% of deposits, 1.54% of interest income and 6.54% of interest expenses. The branches selected by the Bank for audit are in accordance with the guidelines issued by the Reserve Bank of India.

2. 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.

3. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

4. The Balance Sheet and Profit and Loss Account have been drawn up in forms A and B respectively of the Third Schedule to the Banking Regulation Act, 1949.

5. Emphasis of Matter:

Without qualifying our opinion, we draw attention to Note No. 16 in Schedule 18 to the financial statements, which describes deferment of pension and gratuity liability of the bank to the extent of Rs.1994.19 crores pursuant to the exemption granted by the Reserve Bank of India to the public sector banks from application of the provisions of Accounting Standard (AS) 15, Employee Benefits vide its circular no. DBOD.BPBC/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.

6. Subject to the limitations of the audit as indicated in paragraph

1 above and as required by the Banking companies ("Acquisition and Transfer of Undertakings) Act,1970 and also subject to the limitations of disclosure required therein, we 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 and in conformity with the accounting principles generally accepted in India:

i. The Balance Sheet read with significant accounting policies and notes thereon, is a full and fair Balance Sheet containing 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 at 31st March 2012.

ii. The Profit and Loss Account read with the significant accounting policies and notes thereon shows a true balance of the profit for the year covered by the account; and

iii. The Cash Flow Statement gives a true and fair view of cash flows for the year covered by the statement.

b) In our opinion the Balance Sheet, Profit & Loss Account & Cash Flow Statement comply with the applicable Accounting Standards.

c) 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.

d) The transactions of the Bank, which have come to our notice, have been within its powers.

e) The returns received from the offices and branches of the Bank have been found adequate for the purpose of our audit.

M/s V. K. Verma & Co. M/s Mookherjee Biswas & Pathak Chartered Accountants Chartered Accountants FRN 000386N FRN 301138E

(Pradeep Verma) (A. Chatterjee)

Partner Partner

Membership No.088393 Membership No.061551

M/s Amit Ray & Co. M/s Sarda & Pareek

Chartered Accountants Chartered Accountants

FRN 000483C FRN 109262W

(Basudeb Banerjee) (Niranjan Joshi)

Partner Partner

Membership No. 070468 Membership No.102789

M/s Borkar & Muzumdar M/s G. S. Madhava Rao & Co.

Chartered Accountants Chartered Accountants

FRN 101569W FRN 001907S

(B M Agarwal) (G. Manikya Prasad)

Partner Partner

Membership No.033254 Membership No.020105

Place: New Delhi

Date: 09/05/2012

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Mar 31, 2011

1. We have audited the attached Balance Sheet of Punjab National Bank as at 31st March, 2011, the Profit and Loss Account and Cash Flow Statement annexed thereto for the year ended on that date, in which are incorporated the returns of (i) 20 branches and controlling offices audited by us (ii) 4296 branches (including 4 foreign branches and 1 Offshore Banking Unit) and 112 other offices audited by other auditors and (iii) 850 branches not subjected to audit. These unaudited branches account for 0.65% of advances, 3.95% of deposits, 0.43% of interest income and 3.38 % of interest expenses. The branches selected by the Bank for audit are in accordance with the guidelines issued by the Reserve Bank of India.

2. 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.

3. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

4. The Balance Sheet and Profit and Loss Account have been drawn up in Forms A and B respectively of the Third Schedule to the Banking Regulation Act, 1949.

5. Emphasis of Matter:

Without qualifying our opinion, we draw attention to Note No.16 in Schedule 18 to the financial statements, which describes deferment of pension and gratuity liability of the bank to the extent of Rs.2658.92 crores pursuant to the exemption granted by the Reserve Bank of India to the public sector banks from 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.

6. Subject to the limitations of the audit as indicated in paragraph 1 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and also subject to the limitations of disclosure required therein, we 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 and in conformity with the accounting principles generally accepted in India:

i. The Balance Sheet read with significant accounting policies and notes thereon, is a full and fair Balance Sheet containing 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 at 31st March 2011;

ii. The Profit and Loss Account read with the significant accounting policies and notes thereon shows a true balance of the profit for the year covered by the account; and

iii. The Cash Flow Statement gives a true and fair view of cash flows for the year covered by the statement.

b) In our opinion the Balance Sheet, Profit & Loss Account & Cash Flow Statement comply with the applicable Accounting Standards.

c) 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.

d) The transactions of the Bank, which have come to our notice, have been within its powers.

e) The returns received from the offices and branches of the Bank have been found adequate for the purpose of our audit.

For Kalani & Co. For Anjaneyulu & Co.

Chartered Accountants Chartered Accountants

FRN :000722C FRN : 000180S



(Vikas Gupta) (V. S. Venkateswarulu)

Partner Partner

M.No. 077076 M. No. 025805



For V K Verma & Co For Mookherjee Biswas & Pathak

Chartered Accountants Chartered Accountants

FRN: 000386N FRN : 301138E



(Pradeep Verma) (A Chatterjee)

Partner Partner

M.No. 088393 M. No. 061551



For Amit Ray & Co. For Sarda & Pareek

Chartered Accountants Chartered Accountants

FRN : 000483C FRN : 109262W



(CVSK Rao) (Niranjan Joshi)

Partner Partner

M.No. 070009 M. No. 102789

Date: May 04, 2011

Place: New Delhi

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Mar 31, 2010

1. We have audited the attached Balance Sheet of Punjab National Bank as at 31st March, 2010, the Profit and Loss Account and Cash Flow Statement annexed thereto for the year ended on that date, in which are incorporated the returns of (i) 20 branches and controlling offices (including circle offices) audited by us (ii) 3790 branches (including 3 foreign branches and 1 Offshore Banking Unit) and 105 other offices audited by other auditors and (iii) 944 branches not subjected to audit. These unaudited branches account for 1.24% of advances, 4.6% of deposits, 0.86% of interest income and 3.27% of interest expenses. The branches selected by the Bank for audit are in accordance with the guidelines issued by the Reserve Bank of India.

2. 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.

3. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

4. The Balance Sheet and Profit and Loss Account have been drawn up in Forms A and B respectively of the Third Schedule to the Banking Regulation Act, 1949.

5. We draw attention to note no. 31c of Schedule-18, the bank has disputed tax demands of Rs. 1480.80 crores against which payment of Rs.1388.24 crores has been made.

6. Subject to the limitations of the audit as indicated in paragraph 1 above and as required by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and also subject to the limitations of disclosure required therein, we 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 and in conformity with the accounting principles generally accepted in India:

I. The Balance Sheet read with significant accounting policies and notes thereon, is a full and fair Balance Sheet containing 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 at 31st March 2010;

II. The Profit and Loss Account read with the significant accounting policies and notes thereon shows a true balance of the profit for the year covered by the account; and

III. The Cash Flow Statement gives a true and fair view of cash flows for the year covered by the statement.

b) In our opinion the Balance Sheet, Profit & Loss Account & Cash Flow Statement comply with the applicable Accounting Standards.

c) 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.

d) The transactions of the Bank, which have come to our notice, have been within its powers.

e) The returns received from the offices and branches of the Bank have been found adequate for the purpose of our audit.

For Kalani & Co. For Anjaneyulu & Co.

Chartered Accountants Chartered Accountants

FRN :00722C FRN : 000180S

(Vikas Gupta) (K Narayana Murthy)

Partner Partner

M.No. 077076 M. No. 026012

For V K Verma & Co For Mookherjee Biswas & Pathak

Chartered Accountants Chartered Accountants

FRN: 000386N FRN : 301138E

(Pradeep Kumar Verma) (A Chatterjee)

Partner Partner

M.No. 088393 M. No. 061551

For Amit Ray & Co. For Sarda & Pareek

Chartered Accountants Chartered Accountants

FRN : 000483C FRN : 109262W

(Basudeb Banerjee) (Sitaram Pareek)

Partner Partner

M.No.70468 M. No. 016617

Date: May 06, 2010 Place: New Delhi