Financial StatementsNotes to the Accounts for the year ended 30 June 2005 (cont’d)17. ORDINARY SHARE CAPITAL (cont’d)As at 30 June 2003, the Bank had bought back and held as Treasury shares 46,296,999 of its own shares. A further11,078,001 shares were bought back during the month of July 2003 at prices ranging from MRs15.60 to MRs17.10(an average of MRs16.86) per share, bringing total shares bought back and held as Treasury Shares to 57,375,000 atthe end of July 2003. Treasury shares are not eligible for voting and dividend.<strong>In</strong> November 2003, the Bank started a third Share Buy Back Programme, under which shares purchased were cancelledimmediately on acquisition. As at 30 June 2004, 72,700 shares had been purchased at an average of MRs20.16 per shareand an additional 12,830 shares had been cancelled from the Treasury Shares Account so as to keep the percentage ofTreasury shares to issued shares within the limit of 15% in accordance with the Companies Act 2001.No shares were bought back during the financial year ended 30 June 2005.The Share Buy Back programme approved by shareholders lapsed on 17 May 2005.The total cost of the purchase of shares, including brokerage and other fees, has been deducted from Shareholders’ Equity,more specifically from Share Capital, Share Premium and Revenue Reserve.18. RESERVES AND SURPLUSGROUP AND BANK2005 2004 2003MRs' 000 MRs' 000 MRs' 00052Statutory Reserve 480,249 465,825 455,865Revenue Reserve 4,672,218 3,895,258 4,077,654Unrealised <strong>In</strong>vestment Fair Value Reserve 1,460,494 1,246,673 1,845<strong>In</strong>vestment Fluctuation Reserve 58,356 53,868 36,938Property Revaluation Reserve 962,010 - -Translation Reserve 153,632 76,901 170,957Other Reserve 70,810 71,088 59,4307,857,769 5,809,613 4,802,689<strong>In</strong>vestment Fluctuation Reserve is a reserve created by the appropriation of retained earnings of the <strong>In</strong>dian Operationsrequired by <strong>In</strong>dian regulatory authorities.Other Reserve represents the Group's and the Bank’s share of Other Reserve of Associates.Movements in Reserves and Surplus are shown in the Statement of Changes in Equity.
Financial StatementsNotes to the Accounts for the year ended 30 June 2005 (cont’d)19. CONTINGENT LIABILITIES AND COMMITMENTS19A. ACCEPTANCES, GUARANTEES, LETTERS OF CREDIT, ENDORSEMENTS ANDOTHER OBLIGATIONS ON ACCOUNT OF CUSTOMERSGROUPBANK2005 2004 2003 2005 2004 2003MRs'000 MRs'000 MRs'000 MRs'000 MRs'000 MRs'000Letters of Credit 1,042,309 872,747 882,781 989,202 745,363 744,807Guarantees 3,309,218 2,928,224 2,706,896 3,273,299 2,772,940 2,669,328Acceptances and Endorsements 662,862 811,765 347,957 507,307 794,073 319,1375,014,389 4,612,736 3,937,634 4,769,808 4,312,376 3,733,272Other - - 54,692 - - 54,6925,014,389 4,612,736 3,992,326 4,769,808 4,312,376 3,787,96419B. CREDIT COMMITMENTSGROUPBANK2005 2004 2003 2005 2004 2003MRs'000 MRs'000 MRs'000 MRs'000 MRs'000 MRs'000Undrawn Credit Facilities 2,772,432 3,465,270 3,962,171 2,499,278 3,203,172 3,506,74719C. LITIGATIONThere is since May 2003 a legal action brought about by The Mauritius Commercial Bank Ltd (“MCB”) against 38 parties,including SBM and two other local banks, in connection with what is known as the MCB/NPF affair. Based on legal advice, thedirectors of SBM are of the view that the allegations are unfounded and that no liability is expected to arise therefrom.Accordingly, no provision has been made in the financial statements in this respect.19D. ASSETS PLEDGEDThe aggregate carrying amount of assets that have been pledged to secure the credit facilities of the Group and the Bankwith the Central Banks in Mauritius and <strong>In</strong>dia are as follows:GROUP AND BANK2005 2004 2003MRs' 000 MRs' 000 MRs' 00053Treasury Bills 1,320,392 1,105,828 903,000