Central Bank of India

to the President of India

This Audit Report of Central bank of India is in supercession of our earlierAudit Report for the year ended March 31, 2011 dated May 06, 2011. This Audit Report isnecessitated pursuant to a revision in the proposed dividend payable including to thoseequity shares allotted under the rights issue as they rank for dividend on a pari-passubasis, the issue having been made between March 24, 2011 and April 7, 2011 and the saidshares having been allotted by the Board on April 19, 2011.

1. We have audited the attached Balance Sheet of Central Bank of India as at 31^stMarch 2011, the Profit and Loss Account and the Cash Flow Statement annexed thereto forthe year ended on that date in which are incorporated the returns of 20 Branches, 16 ZonalOffices audited by us, 27 Regional Offices audited by us, 3085 Branches, 20 Non-BusinessOffices and 9 CMS branches audited by other Branch Auditors. Also incorporated in theBalance Sheet and Profit and Loss Account are the returns of 623 Branches, 47 RegionalOffices which have not been subjected to audit. The unaudited branches account for 0.80 %of advances, 3.83 % of deposits, 1.02 % of interest income and 3.28 % of interest expense.The Branches audited by us and those audited by other auditors have been selected by Bankin accordance with guidelines issued by Reserve Bank of India. These financial Statementsare the responsibility of Bank’s Management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. 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 statements.

3. Dividend has been declared by the Bank without writing off un-amortised amount ofpension (Rs. 959.93 Crore) and gratuity liability (Rs. 221.60 Crore), subject topermission of Central Government.

4. Without qualifying our opinion, we draw attention to Note no. 14 of the schedule 18to the financial statements, regarding deferment of pension liability and gratuityliability of the Bank to the extent of Rs. 1181.53 Crore, pursuant to the exemptiongranted by the Reserve Bank of India to the Public Sector Banks from application of theprovisions of Accounting Standard (AS) 15, Employees Benefits vide circular no.DBOD.BP.BC/80/21.04.018/2010-11, dated 09-02-2011 on "Re-opening of Pension Option tothe employees of Public Sector Banks and Enhancement in Gratuity Limits- PrudentialRegulatory Treatment."

5. 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.

6. 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, 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 as supplemented withthe information furnished by the Management, have been found adequate for the purpose ofour audit.

7. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statementcomply with the applicable Accounting Standards.

8. In our opinion as shown by the Books of the Bank and to the best of our informationand according to the explanations given to us

a. 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.

b. 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 and

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