1. We, the undersigned Auditors of State Bank of Mysore appointed under
 section 41(1) of the State Bank of India (Subsidiary Banks) Act, 1959,
 do hereby report on the Balance Sheet as at 31st March 2011, the Profit
 and Loss Account and Cash Flow Statement of the Bank for the year ended
 on that date annexed thereto.
 
 2. We have audited the attached Balance Sheet of STATE BANK OF MYSORE
 as at 31st March 2011, the Profit and Loss Account and the Cash Flow
 Statement thereto for the year ended on that date in which are
 incorporated:
 
 (i) the returns of 20 branches audited by us;
 
 (ii) the returns of 650 branches including 2 Focal point branches
 audited by other Auditors;
 
 (iii) unaudited returns certified by the Branch Managers in respect of
 37 Branches not visited by us. These unaudited branches account for
 0.16% of advances, 0.47% of deposits, 0.09% of interest income and
 0.24% of interest expenses; and
 
 The branches audited by us and those by other auditors have been
 selected by the Bank in accordance with the guidelines issued to the
 Bank by the Reserve Bank of India. 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 mis-statement(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 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 and give the information as required to begiven
 in terms of the provision of the State Bank of India (Subsidiary Banks)
 Act, 1959 and Regulations there under.
 
 5.  Without qualifying our opinion, attention is drawn to Note No.
 4.4.1 in Schedule 18 regarding deferment of pension and gratuity
 liability of the bank to the extent of Rs. 106.54 Crores pursuant to
 the exemption granted by the Reserve Bank of India to the public sector
 banks from the application of Accounting Standard (AS) 15, Employees
 Benefits vide its circular no.  DBOD.BP.BC/80/21.04.012/2010-11 on
 Re-opening of Pension Option to Employees of Public Sector Banks and
 Enhancement in Gratuity Limits - Prudential Regulatory Treatment.
 
 6.  Attention is also drawn to Note No.  3.10 in Schedule 18 regarding
 reconciliation of Inter-Branch Accounts, Inter Bank Accounts, ABSOT,
 Branch System Suspense Account, National Local Clearing Account, IBIT,
 Forex Clearing General Account, ATM transactions , System Suspense
 Account, FCNR Account, PCFC Account etc.
 
 7.  Subject to the limitations of the audit, indicated in paragraph 2
 above, and on the basis of the aforesaid Acts and Regulations, and read
 with our observations in paragraph 5 and 6 above and subject to the
 limitations of disclosure required therein and read with the
 Significant Accounting Policies and Notes forming part of the Accounts;
 
 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.
 
 (i) The Balance Sheet, read with the Significant Accounting Policies in
 Schedule 17 and Notes on Accounts in Schedule 18, is a full and fair
 Balance Sheet containing all 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, in conformity with accounting
 principles generally accepted in India;
 
 (ii) The Profit and Loss Account, read with the Significan accounting
 Policies in Schedule 17 and Notes on Accounts in Schedule 18, shows a
 true balance of profit for the year ended on that date, in conformity
 with accounting principles generally accepted in India, and
 
 (Hi) The Cash Flow Statement gives a true and fair view of the cash
 flows for the year ended on that date.
 
 (b) 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.
 
 (c) The transactions of the Bank, which have come to our notice, have
 been within the competence of the Bank.
 
 (d) The returns received from the branches and offices of the Bank
 generally have been found adequate for the purpose of our audit.
 
 (e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement generaffy compfy with the applicable Accounting
 Standards read with the Guidelines on Compliance with Accounting
 Standards by Banks, issued by the Reserve Bank of India from time to
 time.
 
                                        STATUTORY CENTRAL AUDITORS
 
                                         For GROVER, LALLA & MEHTA
 
                               Chartered Accountants FRN - 002830N
 
                                                      Sd/-
 
                                              (CA. ASHOK GROVER)
 
                                                   Partner
 
                                            Membership No. 081784
 
                                   For GOPALAIYER AND SUBRAMANIAN
 
                           Chartered Accountants    FRN - 000960S
 
                                                    Sd/-
 
                                        (CA. S. KASI VISWANATHAN)
 
                                                  Partner
 
                                           Membership No. 026975
 
                                              For RAMRAJ & CO.
 
                          Chartered Accountants    FRN - 002839S
 
                                                   Sd/-
 
                                       (CA. G. VENKATESWARA RAO)
 
                                                Partner
 
                                          Membership No. 024182
 
                                            For K. P. RAO & CO.
 
                           Chartered Accountants    FRN - 003135S
 
                                                   Sd/-
 
                                          (CA. K. SURYA PRAKASH)
 
                                                 Partner
 
                                           Membership No. 018857
 
                                        For BHASIN RAGHAVAN & CO.
 
                            Chartered Accountants  FRN - 000197N
 
                                                   Sd/-
 
                                          (CA. S. V. RAGHAVAN)
 
                                                  Partner
 
                                           Membership No. 014315
 
 Place: New Delhi
 Date: 29th April, 2011