1. We, the undersigned Auditors of State Bank of India, appointed under
 Section 41 (1) of the State Bank of India Act, 1955, do hereby report
 to the Central Government upon the Balance Sheet, Profit and Loss
 Account and the Cash Flow Statement of the Bank.
 
 2. We have audited the accompanying financial statements of State Bank
 of India as at 31st March 2012, which comprise the Balance Sheet as at
 March 31, 2012, Profit & Loss Account and Cash Flow Statement for the
 year then ended, and a summary of significant accounting policies and
 other explanatory information. Incorporated in the said financial
 statements are the returns of:
 
 i) The Central Office, fourteen Local Head Offices, Global Markets
 Group, International Business Group, Corporate Accounts Group
 (Central), Mid- Corporate Group (Central), Stressed Assets Management
 Group (Central) and forty two branches audited by us;
 
 ii) 11060 Indian Branches audited by branch auditors; and
 
 iii) 52 Foreign Branches audited by the 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
 Reserve Bank of India.
 
 Also incorporated in the Balance Sheet and the Statement of Profit and
 Loss are the returns from 3811 Indian branches and other accounting
 units, which have not been subjected to audit. These unaudited branches
 account for 1.18% of advances, 4.56% of deposits, 1.06% of interest
 income and 4.89% of interest expenses.
 
 3. The management is responsible for the preparation of these financial
 statements in accordance with the requirements of the Reserve Bank of
 India, the provisions of the Banking Regulation Act, 1949, the State
 Bank of India Act, 1955 and recognized accounting policies and
 practices, including the Accounting Standards issued by the Institute
 of Chartered Accountants of India (ICAI). This responsibility includes
 the design, implementation and maintenance of internal control relevant
 to the preparation of the financial statements that are free from
 material misstatements, whether due to fraud or error.
 
 4.  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.
 
 5.  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 judgment, including the
 assessment of the risk 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.
 
 6.  We believe that the audit evidence we have obtained is sufficient
 and appropriate to provide a basis for our audit opinion.
 
 7.  Without qualifying our opinion, we draw attention to:
 
 a) Note 18 of Schedule 18: ''Notes to Accounts'' regarding the additional
 provision of Rs1,350 crores in respect of certain non performing
 domestic advances.
 
 b) Note 13 of Schedule 18: ''Notes to Accounts'' regarding deferment of
 gratuity liability of the bank to the extent of Rs300 crores in
 accordance with RBI circular no.DBOD.BP.BC.80/21.04.018/ 2010-11 dated
 February 9, 2011 and the exemption granted by the Reserve Bank of India
 to the Bank from applicability of provisions of accounting Standard 15:
 Employee Benefits.
 
 8.  In our opinion, as shown by books of the Bank, and to the best of
 our information and 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, is properly drawn up so as to exhibit a true and
 fair view of state of affairs of the Bank as at 31st March 2012 in
 conformity with accounting principles generally accepted in India;
 
 b) the Profit and Loss Account, read with the significant accounting
 policies and 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
 
 c) the Cash Flow Statement gives a true and fair view of the cash flows
 for the year ended on that date.
 
 9.  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, these give information as required to be
 given by virtue of the provisions of the State Bank of India Act, 1955,
 and Regulations there under.
 
 10.  Subject to limitations of the audit indicated in paragraphs 2 to 5
 above and as required by the SBI Act, 1955, and subject also to the
 limitations of disclosure required there in, 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.
 
 11.  In our opinion, the Balance Sheet, Profit and Loss Account and
 Cash Flow Statement comply with applicable accounting standards.
 
 
 
 For Kalyaniwalla & Mistry         For Dagliya & Co.
 
 Chartered Accountants             Chartered Accountants
 
 Viraf Mehta                       P. Manohara Gupta
 
 Partner:M.No. 32083               Partner: M.No. 016444
 
 Firm Regn. No. 104607 W           Firm Regn. No. 000671 S
 
 
 For B. M. Chatrath & Co.          For M. Verma & Associates
 
 Chartered Accountants             Chartered Accountants
 
 S. Krishnan                       Madan Verma
 
 Partner :M.No. 051626             Partner :M.No. 080939
 
 Firm Regn. No. 301011 E           Firm Regn. No. 501433 C
 
 For K.K. Soni & Co.               For Krishnamoorthy & Krishnamoorthy
 
 Chartered Accountants             Chartered Accountants
 
 K. K. Soni                        C. R. Rema
 
 Partner :M.No. 007737             Partner :M.No. 029182
 
 Firm Regn. No. 000947 N           Firm Regn. No. 001488 S
 
 For Essveeyar                     For Todi Tulsyan & Co.
 
 Chartered Accountants             Chartered Accountants
 
 B. Shanmuganathan
 
 Partner : M.No. 027882            Sushil Kumar Tulsyan
 
                                   Partner : M.No. 075899
 
 Firm Regn. No. 000808S            Firm Regn. No.002180 C
  
 For Venugopal & Chenoy            For Singhi & Co.
 
 Chartered Accountants             Chartered Accountants
 
 D.V.Jankinath                     Rajiv Singhi
 
 Partner: M.No. 029505             Partner : M.No. 053518
 
 Firm Regn. No. 004671 S           Firm Regn. No. 302049 E
 
 For K G. Somani & Co              For SCM Associates
 
 Chartered Accountants             Chartered Accountants 
 
 Anju Somani                       P K Bal
 
 Partner: M.No.511267              Partner: M.No. 055147
 
 Firm Regn. No. 006591 N           Firm Regn. No. 314173 E
 
 For K.C.Mehta & Co                For SBA & Company
 
 Chartered Accountants             Chartered Accountants
 
 Chirag Bakshi                     Ashok Kumar Jain
 
 Partner : M.No. 047164            Partner . M.No. 072262
 
 Firm Regn. No. 106237 W           Firm Regn. No. 004651 C
 
 Kolkata
 
 18th May, 2012