State Bk.in.gdr Regulatory News (SBID)

5 Feb 2008 07:00

State Bank Of India04 February 2008 THE GENERAL MANAGER (SHARES & BONDS) QUARTERLY REVIEW OF ACCOUNTS AS ON 31ST DECEMBER 2007 We refer to paragraph 2 of our memo no. CC/A&C/A&A/C-112/2970 dated the 7thJanuary 2008. In this connection, we enclose one set of originals of workingresults of our Bank for the quarter ended 31st December 2007, subjected toreview by Statutory Central Auditors (SCAs), together with the Review Reportof the SCAs, which may be forwarded to the Stock Exchanges. Audit & Appropriations Section, General Manager (A&C)SBI, Corporate Centre,Mumbai. 28.01.2008 LIMITED REVIEW REPORT OF UNAUDITED FINANCIAL RESULTS OF STATE BANK OF INDIA FOR THE PERIOD ENDED 31ST DECEMBER 2007 We, the undersigned Auditors, have reviewed the accompanying statement ofunaudited financial results of State Bank of India for the period ended December31, 2007. This statement is the responsibility of the Bank's Management and hasbeen approved by the Board of Directors. 2. A review of interim financial information consists principally of applyinganalytical procedures for financial data and making enquiries from personsresponsible for financial and accounting matters. It is substantially less inscope than an audit conducted in accordance with the generally accepted auditingstandards, the objective of which is the expression of an opinion regarding thefinancial statements taken as a whole. Accordingly, we do not express such anopinion. 3. The financial results incorporate the relevant returns of 42 branchesreviewed by us, 55 branches reviewed by other Chartered Accountants asConcurrent Auditors of the Bank, 20 Foreign Offices reviewed by local auditorsspecially appointed for this purpose, 293 branches reviewed by Bank's ownofficials acting as Concurrent Auditors, the returns of 398 branches certifiedby Branch Managers as per instructions of the Bank's Management, and unreviewedreturns in respect of 9299 branches (including 14 Foreign Offices). In theconduct of our review, in addition to 42 branches reviewed by us, we have reliedon the review reports in respect of non-performing assets received from theBank's Concurrent Auditors, local auditors of Foreign Offices and Branch Managers of domestic branches, aggregating to 766 branches / offices. Apart from these review reports, in the conduct of our review, we have also relied upon various returns received from the branches of the Bank. These review reports, including those of 398 branches returns certified by Branch Managers as per instructions of the Bank's Management, cover 63.03% of the advances portfolio excluding outstanding of asset recovery branches and food credit advance of the bank. Further, this review also covers 53.76% of Non Performing Advances (NPAs) as on December 31, 2007, including those certified at 398 branches by the BranchManagers as per instructions of the Bank's Management. 4. Based on our review conducted as above and subject to limitation in scopeas mentioned in Para 3 above and further subject to non compliance of AccountingStandard 15 "Employee Benefits" (revised 2005) for the reasons stated in noteno. 2, the impact of which has not been ascertained, nothing has come to ournotice that causes us to believe that the accompanying statement of unauditedfinancial results prepared in accordance with accounting standards and otherrecognised accounting practices and policies has not disclosed the informationrequired to be disclosed in terms of Clause 41 of the Listing Agreement including the manner in which it is to be disclosed, or that it contains any material misstatement, or that it has not been prepared in accordance with the relevant prudential norms issued by the Reserve Bank of India in respect of income recognition, asset classification, provisioning and other related matters. M.M. Nissim & Co., Khandelwal & Jain & Co., R G N Price & Co.,Chartered Accountants Chartered Accountants Chartered Accountants Sanja Khemani Shivratan Agarwal P.M. VeeramaniPartner: M.No. 044577 Partner: M.No. 104180 Partner: M.No. 023933 S. K. Mittal & Co., Vinay Kumar & Co., D.P. Sen & Co.,Chartered Accountants Chartered Accountants Chartered Accountants S. K. Chopra V. K. Agrawal P. L. SarkarPartner: M.No. 014907 Partner: M.No. 013795 Partner: M.No. 051043 Laxminiwas & Jain, Chaturvedi & Co., Jain Kapila Associates,Chartered Accountants Chartered Accountants Chartered Accountants Laxminiwas Sharma S. C. Chaturvedi D. K. KapilaPartner: M.No. 014244 Partner: M.No. 012705 Partner: M.No. 016905 Datta Singla & Co., M Choudhury & Co., G.M. Kapadia & Co.,Chartered Accountants Chartered Accountants Chartered Accountants Sandeep Datta D. Choudhury Rajen AsharPartner: M.No. 092413 Partner: M.No. 052066 Partner: M.No. 048243 Vardhaman & Co.,Chartered Accountants V. BaskaranPartner: M.No. 012202 Mumbai 24th January 2008 STATE BANK OF INDIA UNAUDITED FINANCIAL RESULTS FOR THE PERIOD ENDED 31ST DECEMBER 2007 (Rs.in crores) Quarter ended Nine month period ended Year ended Particulars 31.Dec.07 31.Dec.06 31.Dec.07 31.Dec.06 31.Mar.07 (Reviewed) (Reviewed) (Reviewed) (Reviewed) (Audited) 1 Interest 12,666.81 9,446.36 35,373.58 26,724.60 38,454.23 Earned (a) + (b) + (c) + (d) (a) Interest/ 9,271.05 6,413.55 25,624.64 17,782.61 24,839.18 discount on advances / bills (b) Income on 3,271.11 2,329.24 8,732.40 7,404.52 10,456.19 Investments (c) Interest on balances with Reserve Bank of India and other inter bank funds 92.61 628.74 981.28 1,458.91 2,719.61 (d) Others 32.04 74.83 35.26 78.56 439.25 2 Other Income 2,697.19 1,822.02 5,877.73 4,347.88 6,806.05 3 TOTAL INCOME (1+2) 15,364.00 11,268.38 41,251.31 31,072.48 45,260.28 4 Interest 8,410.45 6,007.20 23,152.94 16,213.11 23,436.82 Expended 5 Operating 3,293.81 2,911.48 9,363,95 8,591.52 11,823.52 Expenses (i) + (ii) (i) Employee cost 2,194.68 2,029.71 6,216.27 5,908.71 7,932.58 (ii) Other Operating 1,099.13 881.77 3,147.68 2,682.81 3,890.94 Expenses 6 TOTAL 11,704.26 8,918.68 32,516.89 24,804.63 35,260.34 EXPENDITURE (4) + (5) (excluding Provisions and Contingencies) 7 OPERATING 3,659.74 2,349.70 8,734.42 6,267.85 9,999.94 PROFIT (3 - 6) (before Provisions and Contingencies) 8 Provisions 804.43 661.43 1,049.51 1,233.87 2,409.64 (other than tax) and Contingencies (net of write-back) --- Of which 444.12 698.26 933.96 698.26 1,429.50 provisions for Non-performing Assets 9 Exceptional items 0.00 0.00 0.00 0.00 0.00 10 Profit from 2,855.31 1,688.27 7,684.91 5,033.98 7,590.30 Ordinary Activities before tax (7-8-9) 11 Tax expenses 1,046.67 623.21 2,839.04 1,985.86 3,048.99 12 Net Profit 1,808.64 1,065.06 4,845.87 3,048.12 4,541.31 from Ordinary Activities after tax (10-11) 13 Extraordinary 0.00 0.00 0.00 0.00 0.00 items (net of tax expense) 14 Net Profit for 1,808.64 1,065.06 4,845.87 3,048.12 4,541.31 the period (12-13) 15 Paid-up equity 526.30 526.30 526.30 526.30 526.30 share capital (Face Value of Rs. 10 per share) 16 Reserves 30,772.26 27,117.79 30,772.26 27,117.79 30,772.26 excluding Revaluation Reserves (as per balance sheet of previous accounting year) 17 Analytical Ratios (i) Percentage of 59.73% nil 59.73% nil nil shares held by Government of India (ii) Capital 12.28% 11.86% 12.28% 11.86% 12.34% Adequacy Ratio (iii) Earnings Per Share (EPS) (a) Basic and 34.37 20.24 92.07 57.92 86.29 diluted EPS before Extraordinary items (net of tax expense): Not annualised (b) Basic and 34.37 20.24 92.07 57.92 86.29 diluted EPS after Extraordinary items: Not annualised (iv) NPA Ratios (a) Amount of 10,641.46 9,902.85 10,641.46 9,902.85 9,998.22 gross non-performing assets (b) Amount of 5,610.01 4,487.16 5,610.01 4,487.16 5,257.72 net non-performing assets (c) % of gross 2.69% 3.15% 2.69% 3.15% 2.92% NPAs (d) % of net 1.44% 1.45% 1.44% 1.45% 1.56% NPAs (v) Return on 1.06% 0.79% 1.00% 0.78% 0.84% Assets (Annualised) 18 Public Shareholding --- No. of 211959678 211959678 211959678 211959678 211959678 shares --- Percentage 40.27% 40.27% 40.27% 40.27% 40.27% of Shareholding Unaudited Segment-wise Revenue, Results and Capital Employed (Rs.in crores) Quarter ended 9-month period ended Year ended Particulars 31.Dec.07 31.Dec.06 31.Dec.07 31.Dec.06 31.Mar.07 (Reviewed) (Reviewed) (Reviewed) (Reviewed) (Audited) 1 Segment Revenue (income) a Banking Operations 14345.12 11285.12 40103.34 31082.13 44536.00 b Treasury Operations 3965.42 2700.12 9547.58 7920.21 11464.20 Total 18310.54 13985.24 49650.92 39002.34 56000.20 Less : Inter Segment 2946.54 2716.86 8399.61 7929.86 10739.92 Revenue Net Income from 15364.00 11268.38 41251.31 31072.48 45260.28 Operations 2 Segment Results (Profit before tax) a Banking Operations 2584.75 1762.89 7892.50 5174.74 8706.55 b Treasury Operations 775.04 -220.68 1100.07 -438.68 117.73 Total 3359.79 1542.21 8992.57 4736.06 8824.28 Add / (Less) : -504.48 146.06 -1307.66 297.92 -1233.98 Unallocated Profit before Tax 2855.31 1688.27 7684.91 5033.98 7590.30 Less : Income Tax 1046.67 623.21 2839.04 1985.86 3048.99 (including FBT) Net Profit 1808.64 1065.06 4845.87 3048.12 4541.31 3 Capital Employed (Segment Assets - Segment Liabilities) a Banking Operations 27898.62 24528.60 27898.62 24528.60 27898.62 b Treasury Operations 3399.94 3115.49 3399.94 3115.49 3399.94 Total 31298.56 27644.09 31298.56 27644.09 31298.56 (Segment Assets and Liabilities are as on 31st March of the previous year) Notes: 1. The working results for the period ended 31st December 2007 have beenarrived at after considering previsions for NPAs, Bonus, Gratuity, Pension,Leave Encashment, Investment Depreciation, Income Tax (after adjustment fordeferred tax), Wealth Tax, Fringe Benefit Tax (FBT) and Other Contingencies onan estimated basis. 2. Accounting Standard 15 "Employee Benefits" (revised 2005) is effective foraccounting periods commencing on or after 07.12.2006. As per this Standard, thedifference (as adjusted by any related tax expense) between the transitionalliability and the liability that would have been recognised at the same date, asper pre revised Accounting Standard (AS) 15, 'Accounting for Retirement Benefitsin the Financial statements of Employers', should be adjusted immediatelyagainst opening balance of revenue reserves and surplus. The Institute ofChartered Accountants of India has made a limited revision to this provision,which has been notified on 17.10.2007. This revision provides the Bank withanother option to charge additional liability arising upon the first applicationof the standard as an expense over a period up to 5 years. The Bank is currentlyexamining both the alternatives. The impact of the Accounting Standard 15"Employee Benefits" (revised 2005) has not been ascertained for transitionalprovision and current period(s). In the interregnum, the Bank has made adequateprovisions as per pre-revised Accounting Standard 15, 'Accounting tor RetirementBenefits in the Financial Statements of Employers". 3. During the period ended 31st December 2007, the Bank has made followinginvestments in its foreign / domestic subsidiaries for the purpose of fundingbusiness growth : • Increased stake in Indian Ocean International Bank Ltd. (IOIB) Mauritius, from 56.84% to 62.28%. • Infused additional Capital of i) Rs. 121.90 crores in State Bank of India (Canada). ii) Rs. 39.84 crores in State Bank of India (California). iii) Rs. 59.77 crores in State Bank of India International (Mauritius) Ltd. iv) Rs. 74.00 crores in SBI Life Insurance Co. Ltd. v) Rs. 120.00 crores in SBI Cards & Payment Services P. Ltd. 4. During the period ended 31st December 2007, the Boards of State Bank of India(SBI) and State Bank of Saurashtra (SBS) have accorded approval for merger ofSBS with SBI. The matter has further been referred to RBI and Government ofIndia for approval. Necessary approval is awaited. As the merger process has notyet been crystallized, there is no impact on the Bank's quarterly results as on31.12.2007. 5. In terms of RBI circular dated 20th April 2007, the Bank had accounted foramortization of premium in respect of securities included in the 'Held toMaturity' (HTM) category as an adjustment against 'Other Income'. Based on theclarification issued by RBI on 11th July 2007, Banks are required to reflect theamortization of premium held in HTM category by an adjustment to the 'InterestEarned". Accordingly, the Bank has carried out the reclassification of the same for the period ended 3lst December 2007. This change in accounting procedure does not have any impact on the net profit for the period(s) under review. 6. During the period ended 31st December 2007, the Bank has raised USD 225million (Rs.915.86 crores) as Hybrid Tier I Capital in the form of Perpetual NonCall 2017 Bonds. 7. During the period ended 31st December 2007, the entire share holding ofReserve Bank of India in State Bank of India (aggregating 31,43,39,200 equityshares (59.73%), with a face value of Rs. 10/-each) has been transferred to theCentral Government. 8. During the period ended 31st December 2007, the Bank has shifted SLRinvestments having aggregate Face Value of Rs.9081.57 crores (correspondingprevious period - Rs.9400 crores) from 'Available for Sale' (AFS) category to'Held to Maturity' (HTM) category, resulting in a net revaluation loss ofRs.297.67 crores (corresponding previous period - Rs.225.73 crores). 9. The qualifications made by the Statutory Central Auditors in their reviewreport on the financial results of quarter ended 30th June 2007 and theresolution thereof: (i) Non compliance of AS 15 (revised 2005), the impact of which has not been ascertained: The management's response is detailed in Note 2 above. 10. The Bank had decided to issue Equity Shares on rights basis to the existingshareholders for augmentation of Capital. 11. Number of Investors Complaints received and disposed of during the quarterended 31st December, 2007: (i) Pending at the beginning of the quarter - 76.(ii) Received during the quarter - 1004. (iii) Disposed of during the quarter 1016 (iv) Lying unresolved at the end of the quarter - 64. 12. Previous period figures have been regrouped/reclassified, wherever necessary, to conform to current period classification. The above results have been approved by the Central Board of the Bank on the24th January 2008 and were subjected to Review by the Auditors. S. K. BHATTACHARYYA T. S. BHATTACHARYA O. P. BHATT Managing Director Managing Director CHAIRMAN and Chief Credit & Group Executive & Risk Officer (Corporate Banking) In terms of our Review Report of even date. M.M. Nissim & Co., Khandelwal & Jain & Co., R G N Price & Co.,Chartered Accountants Chartered Accountants Chartered Accountants Sanja Khemani Shivratan Agarwal P.M. VeeramaniPartner: M.No. 044577 Partner: M.No. 104180 Partner: M.No. 023933 S. K. Mittal & Co., Vinay Kumar & Co., D.P. Sen & Co.,Chartered Accountants Chartered Accountants Chartered Accountants S. K. Chopra V. K. Agrawal P. L. SarkarPartner: M.No. 014907 Partner: M.No. 013795 Partner: M.No. 051043 Laxminiwas & Jain, Chaturvedi & Co., Jain Kapila Associates,Chartered Accountants Chartered Accountants Chartered Accountants Laxminiwas Sharma S. C. Chaturvedi D. K. KapilaPartner: M.No. 014244 Partner: M.No. 012705 Partner: M.No. 016905 Datta Singla & Co., M Choudhury & Co., G.M. Kapadia & Co.,Chartered Accountants Chartered Accountants Chartered Accountants Sandeep Datta D. Choudhury Rajen AsharPartner: M.No. 092413 Partner: M.No. 052066 Partner: M.No. 048243 Vardhaman & Co.,Chartered Accountants V. BaskaranPartner: M.No. 012202 Mumbai 24th January 2008 This information is provided by RNS The company news service from the London Stock Exchange