Allahabad Bank

To

The President of India

1. We have audited the attached Balance Sheet of ALLAHABAD BANK as at31^st March 2011, the Profit and Loss Account and the Cash Flow Statement forthe year ended on that date annexed thereto. Incorporated in the said financial statementsare the accounts of :

i) 20 Branches and 46 Zonal offices audited by us ;

ii) 1970 Branches audited by other auditors ;

iii) One overseas branch audited by local auditor;

iv) One unaudited representative office in China and 424 un-audited branches, thereturns of which are certified by the Branch Managers. The unaudited branches account for1.07% of advances, 4.37% of deposit, 0.64% of interest income and 3.80% of interestexpenses.

2. The branches audited by us and those audited by other auditors have been selected bythe Bank in accordance with the guidelines issued to the Bank by the Reserve Bank ofIndia.

3. These financial statements are the responsibility of the Bank’s Management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

4. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating the overallpresentation of financial statement.

5. We believe that our audit provides a reasonable basis for our opinion.

6. Without qualifying our opinion, we draw attention to note no. 16.3.5 of schedule 18which describes deferment of pension liability and gratuity liability due to increase inceiling to the extent of Rs598.16 crores pursuant to the exemption granted by the ReserveBank of India to the public sector Banks from application of the provisions of AS 15,Employees Benefits vide its circular No DBOD.BP.BC/80/21.04.018/2010-11 dated February 9^th, 2011, on reopening of Pension option to employees of public sector Banks.

7. In our opinion and to the best of our information and according to the explanationsgiven to us and as shown by the books of the Bank:

(i) The Balance Sheet read with the Significant Accounting Policies and Notes thereon,is a full and fair Balance Sheet containing all the necessary particulars and is properlydrawn up so as to exhibit a true and fair view of the state of affairs of the Bank as at31^st March 2011 in conformity with accounting principles generally accepted inIndia.

(ii) The Profit and Loss Account read with Significant Accounting Policies and Notesthereon shows a true balance of Profit for the year ended on that date in conformity withaccounting principles generally accepted in India.

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

8. The Balance Sheet and the Profit and Loss Account have been drawn up in Form‘A’ and ‘B’ respectively of the Third Schedule to the BankingRegulation Act, 1949.

9. Subject to the limitations of the audit indicated in paragraph 1 above and asrequired by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970,and also subject to the limitations of disclosure required therein and subject to NotesNo.2 (i), 2(ii) & 2(iii) (Schedule 18) regarding balancing / reconciliation ofunmatched entries in inter branch accounts and balancing/ reconciliation of Balances withBanks and NOSTRO accounts;

We report that:

(a) We have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purposes of our audit and have found the sameto be satisfactory.

(b) The transactions of the Bank, which have come to our notice, have been within thepowers of the Bank.

(c) The returns received from the Offices and Branches of the Bank have been foundadequate for the purpose of our audit.

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