Auditors Report

To

The State Bank of India,

Mumbai

1.         We, the undersigned Auditors of the State Bank of Patiala, appointed under Section 41(1) of the State Bank of India (Subsidiary Banks) Act, 1959, do hereby report on the Balance Sheet of the Bank as at 31st March 2009, Profit and Loss Account and the Cash Flow Statement for the year ended on that date.

2.                  We have audited the attached Balance Sheet of State Bank of Patiala as at 31^st March 2009, Profit and Loss Account and the Cash Flow Statement of the Bank annexed thereto, for the year ended on that date in which are incorporated the returns of 20 branches audited by us, 750 branches audited by other Branch Statutory Auditors. The Branches audited by us and by other auditors have been selected by the Bank in accordance with the guidelines issued by Reserve Bank of India. Also incorporated in the Balance Sheet and the Profit and Loss Account are the returns from 75 branches which have not been subjected to audit. These un-audited branches account for 1.10 % of advances, 1.25% of deposits, 0.35% of interest income and 0.71% of interest expenses. 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 misstatement(s). 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 and  give the information as is required to be given by virtue of the provisions of the State Bank of India (Subsidiary Banks) Act, 1959 and Regulations there under.

5.         Subject to the limitations of the audit indicated in para 2 above and as required by the State Bank of India (Subsidiary Banks) Act, 1959 and subject also to the limitations of disclosure required therein, we report that -

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:

(i)                 the Balance Sheet, read together with the Notes on Accounts and Significant Accounting Policies 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 affairs of the Bank as at 31st March 2009;

 (ii)        the Profit and Loss Account, read together with Notes on Accounts and Significant Accounting Policies thereon, shows a true balance of profit 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 period covered by the Statement.

(b)  Wherever we have called for any information or explanations, such information and explanations have been given to us and have found them to be satisfactory;

      (c)  The transactions of the Bank which have come to our notice have been within the powers of the Bank; and

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

           For & on behalf of

For Batra Sapra & Co                                                                            For A. Bafna & Co.                                               

Chartered Accountants                                                                          Chartered   Accountants
                                                                                                          

 (CA A.L.Batra)                                                                                     (CA Mukesh Gupta)                             

 Partner                                                                                                   Partner                                                   

Membership No. 16929                                                                          Membership No. 73515                                                                                         

For Gupta & Co                                                                                     For P. Singhvi & Associates

Chartered Accountants                                                                          Chartered Accountants        

(CA M.K. Gupta)                                                                                   (CA Praveen Singhvi)

Partner                                                                                                    Partner

Membership No. 6615                                                                            Membership No. 71608

   For Verma Associates                                                                            For Anoop Agarwal & Co.

    Chartered Accountants                                                                          Chartered Accountants

    (CA Madan Verma)                                                                                (CA Anoop Kumar Agarwal)

    Partner                                                                                                    Partner   

    Membership No. 81631                                                                          Membership No. 70888

Place: Mumbai

Date: 24^th April 2009