EXECUTIVE SUMMARY

Introduction
Financial analysis is the starting point for making plans, before using any sophisticated forecasting and planning procedures. Understanding the past is a prerequisite for anticipating the future. Financial analysis is the process of identifying the financial strength and weakness of the firm by properly establishing relationship between the items of the balance sheet and the profit and loss account. Financial analysis can be undertaken by management of the firm, or by parties outside the firm, viz. owners, creditors, investors and others. The nature of analysis will differ depending on the purpose of the analyst. Investors: Who invested their money in the firm s shares, are most concerned about the firm s earnings. They more confidence in those firm s that show steady growth in earnings. !s such, they concentrate on the analysis of the firm s present and future profitability. They are also interested in the firm s financial structure to that e"tent influence the firm s earning ability and risk. Trade creditors and financial instutitution:

They are

interested in firm s ability to meet their claims over a very short period of time. Their analysis will, therefore, confine to the evolution of the firms liquidity position. !nd the financial institutions are interested in the financial statements of the borrowing concern to ascertain its short# term as well as long#term solvency and also it profitability. Suppliers: $n the other hand, are concerned with the firm s long# term solvency and survival. They analysis the firm s profitability over time, its ability to generate cash to be able to pay interest and repay principal and the relationship between various sources of funds %capital structure relationships&. 'ong#term creditors do analysis the historical

financial statements, but they place more emphasis on the firm s pro)ected, or pro forma, financial statements to make analysis about its future solvency and profitability. Management and emplo ees: The firm would be interested in every aspect of the financial analysis. *t is their overall responsibility to see that the resources of the firms are used to most effectively and efficiently, and that the firm s financial condition is sound. The foresaid features of financial statement analysis that really facilitates the organization to determine their financial strengths and weakness. *n connection with this the researcher has opted a +,F- bank ltd to analyze their financial abilities and suggests them for a long#term growth prospective. !nd the employees of a concern are interested in the financial statement of the firms to ascertain its profitability and ability to offer higher wages, bonus, better working conditions, etc.

!overnment:

The .overnment is interested in the financial

statements of a concern for purposes of ta"ation, and also for the purpose of regulating the activities of the concern

"#$ectives of t%e financial anal sis

To determine the profitability or earning capacity and progress of the concern To )udge the financial position of the concern and also analyze the strength and weakness of the firm To find out the solution to the unfavorable financial conditions and financial performance To involve comparison for a useful interpretation of the financial statement

To act of analysis may also reveal areas where control is deficit and desirable for the efficient operating of the bank which in turn help to achieve organizational goals.

TIT&E "' T(E STU)Y

*T(E A+A&YSIS A+) I+TER,RETATI-"+ "' T(E 'I+A+CIA& STATEME+T "' ()'C .A+/ &IMITE)0 .A+!A&"RE12

".3ECTIVES "' T(E STU)Y

The ob)ectives of the study are to evaluate the financial position and performance of the 1+,F- 2!34 'T,5. The purpose of the study mainly centers on the critical analysis of the financial statements of the bank. !nd makes attempt to get better in sight about the financial strength and weakness of the bank by analyzing and interpreting the data reported in its statements.

RESEARC( )ESI!+ "' T(E STU)Y

7esearch design means a search of facts, answers to question and solution to the problems. *t is a prospective investigation. 7esearch is a systematical logical study of an issue or problem through scientific method. *t is a systematic and ob)ective analysis and recording of controlled observation that may lead to the development of generalization, principles, resulting in prediction ultimate control of events. 7esearch design is the arrangement of conditions for the collection and analysis of data in manner that aims to combine relevance to the research purpose with relevance to economy. There are various designs, which are descriptive and helpful for analytical research. In #rief a researc% design contains ! clear statement of the research problem. ! specification of data required 8rocedure and techniques to be adopted for data collection. ! method of processing and analysis of data.

Researc% design used in t%e specific stud includes t%e follo4ing *dentifying the statement of the problem. -ollection of the company s specific literature i.e., annual reports for the study period and the profile of the company. 9canning through standard books to understand the theory behind the financial performance evaluation -ollection of information from various )ournals to understand the industrial background of the study. ,ecision regarding study prior in this case it was decided to be : years i.e., from /;;/#/;;0.

MET(")"&"!Y
Sources of data can #e classified into t4o groups t%e are: 8rimary data and 9econdary data

,rimar data
The data are originally collects the data directly from the company or from the agency for the first time, for any statistical investigation and used by them in the statistical analysis are termed as primary data. prospects, company file etc. *t has been collected through different books of accounting, broaches, catalogs, company

Secondar data
The data published or un published, which have already been collected and processed by some agencies for their statistical work are termed as secondary data. !s for as secondary data is concerned the second agency if and when it publishes and files such data, it becomes secondary data sources to any one who later uses that data. This is related to collect the required information about the study. <y sources of information are the data available with the bank by on going through the annual reports. The study is basically relies on secondary data supplied by the bank. The primary data used for this study consist of informal discussion, interviews with the deputy manager of the bank.

Anal sis and Interpretation of 'inancial Statement

The Financial 9tatement 8rovides a 9ummarized view of the financial position and operation of the firm, therefore much can be learnt about a firm from an e"amination of its financial statements ad invaluable documents > performance reports. The analysis of financial statements is a processes of scanning and evaluating with a view to get a necessary information and interpretation is drawing conclusions with regard to the nature of the inter relationship between figures and analyzed. *t is necessary to note in the conte"t that analysis and interpretation are complementary and one cannot be stressed or favored as against the other. *nfact the very ob)ect of the analysis is to interpret the significance relation ship between figures and there cannot be any interpretation without first analyzing the data. Thus analysis and interpretation go hand in hand. The main ob)ectives of the analysis is the analyzing the strength and weakness of the firm, obtained from the Financial 9tatement and balance sheet of the company. The Financial !nalysis is a final step of accounting that resulting presentation of the final and the e"act data, which helps the business manager, creditors, investors and other related people to know the financial position of the company and their strength. The sub)ect matter of the Finance has been changing at a rapid pace about three decades ago. The scope of Financial <anagement was !s a circumscribed to the raising Funds whenever is needed and a little significance used to be attached to Financial ,ecisions and problem solving. consequence the traditional finance conte"t was structured around the theme and contains discussion of the instruments and institution of rising funds and of the ma)or events such as 8romotion, re#organization, re#ad)ustment, <ergers, -onsolidation, etc., when fund are required to be raised.

Finance is a life blood of business@ it is rightly termed as the science of money. *t is the foundation of each and every economic activity and is the pivot around whichever business rotates. 9o it is very essential for the smooth running of the business. *t has made possible tremendous savings of time and trouble in the marshalling productive facilities and in the distribution of the output of the industry to final consumers. *t has brought about rapid economic progress be facilitating specialization and division of labour technological progress, large scale production and e"pansion of various forms of business and financial organization and it controls the 8olicies, activities and decision of every business. Finance may be defined as a 1*t is that the business activities which is concerned with the organization and conservation of capital funds in meeting the financial needs and over all ob)ective of the business enterprises5 The Financial <anagement is a <anagerial activity and an integral part of the all <anagement of the business. *t is concerned with the proper planning and controlling of the firm s financial resources as a separate activity of discipline has under fundamental changes as regards it scope and coverage s. *t is of recent origin. *t was a branch of economies till (AB;. 9till today, it has no unique body of knowledge of it own and depend economics for its theoretical concepts.

T%e 'inancial Management concerned 4it%: The ascertainment of finance both long term and short term needed by the firm ,etermination of suitable resources under given circumstance -ollection of funds with in the time and control over utilization of funds !nd also to ma"imization of profit of the firm, share holder s wealth ma"imization. Cnsure a fair return in investment to the share holders -reating of reserves for growth and e"pansion 2ased on this reasoning the Financial !nalysis is a study of relationship between many factor as disclosed by the company financial statement and the study of the trend of these essential factors.

'I+)I+!S
!verage Duarterly balance for urban area are slight high for common people 8enetrating rural market *n the era where *ndia is witnessing emergence of eminent foreign banks, +,F- 2ank has still maintain its glory

&IMITATI"+S
The financial statements are prepared on the basis of historical costs or original costs. The value of assets decreases with the passage of time current price changes are not taken into account. The financial statements are e"pressed in monetary values, so they appear to give final and accurate position, but some times it does not give e"act position. The precision of financial statement data is not possible because the statements deal with natters which cannot be precisely stated. The bank wanted not to disclose some of the analysis carried on. +ence some of them are not included in this report.

C"+C&USI"+
The study is entitle 1! 9tudy of Financial 9tatement !nalysis of the +,F- 2ank 'imited5 has been undertaken with the ob)ective to analyze and interpret the bank s financial performance. *n general, the bank has achieved tremendous progress over the recent years. The bank has a healthy financial performance. The bank has been able to achieve heavy growth across multiple parameters, including customer s acquisition, geographical spread, business volumes and revenues.

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C"M,A+Y ,R"'I&E
"rigin "f T%e "rgani5ation
+,F- 2!34 'T,. is leading private sector bank and financial services company in *ndia. The +ousing ,evelopment Finance -orporation 'imited %+,F-& was amongst the first to receive an in principle approval from the 7eserve 2ank of *ndia %72*& to set up a bank in the private sector, as part of 72*Es liberalization of the *ndian 2anking *ndustry in (BB6. The 2ank was incorporated in !ugust (BB6 in the name of 1+,F- 2!34 'T,.5, with its registered office in <umbai, in *ndia and commenced operation as a 9cheduled -ommercial 2ank in Fanuary (BB:. The 2ank is a banking company governed by *ndia s 2anking 7egulations !ct, (B6B. The 2ank s shares are listed on the 2ombay 9tock C"change 'td., the 3ational 9tock C"change of *ndia 'imited and its !,9s are listed on the 3ew Gork 9tock C"change. The bank is a part of the +,F- .roup of -ompanies founded by out parent. This bank is public limited company established under the laws of *ndia. +,F- 'T,. and its subsidiaries owned appro"imately //H of our outstanding Cquity 9hares as of <arch 0(st /;;=. From the beginning, +,F2ank its operation with the aim of becoming a world#class *ndian 2ank and the endeavor of fulfilling all the financial requirements of customer under one roof. $ver the years, by delivering superior financial products and services, the bank has build a stable and long lasting relationship with nearly ? million customers without compromising standard for maintaining high quality association, culture for learning, quick absorption of latest and best technologies and unwavering adherence to best practice in governance have been the core strength that have brought the bank to the present position with the constant learning to growth, the bank has continued to use the dividends of leadership to fuel future e"pansion and presence.

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The strategy of bank is to provide comprehensive range of financial products and services for their customers through multiple distributed in channels, with high quality service and superior e"ecution. The multiple distribution channel including an electronically linked branch network, automated telephone banking, internet banking and banking by mobile phone, to offer customer convenient access to their product. The quality of service is provided by bank through intensive staff training and the use of our technology platform. Their focus on knowledgeable and personalized services draws customers to our products and increases the loyalty to the e"isting customers. The +,F- 2ank s philosophy is based on four core values that is $perational e"cellence, -ustomer focus, 8roduct leadership and 8eople. The bank is professionally managed organization with board of directors consisting of eminent persons who represent various fields including finance, ta"ation, construction, urban policy and development. The board primarily focus on strategy formulation policy and control, design to delivery increasing value to share holders. Today, +,F- are market leader in most of the segments that they operate and their goal is to acquire the best position in attracting customers. The bank has grown rapidly since commencing operations in Fan (BB:. -urrently the bank has a nation spread over :A0 branches in /=0 cities across the country by operating in three principle segments, that is Wholesale banking 7etail banking Treasury service

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6%olesale .an7ing Services The 2ankIs target market ranges from large, blue#chip manufacturing companies in the *ndian corporate to small J mid#sized corporate and agri#based businesses. For these customers, the 2ank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. The bank is also a leading provider of structured solutions, which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers. *t is recognized as a leading provider of cash management and transactional banking solutions to corporate customers, mutual funds, stock e"change members and banks. Retail .an7ing Services The ob)ective of the 7etail 2ank is to provide its target market customers a full range of financial products and banking services, giving the customer a one#stop window for all their banking requirements. The products are backed by world#class service and delivered to the customers through the growing branch network, as well as through alternative delivery channels like !T<s, 8hone 2anking, 3et 2anking and <obile 2anking. Treasur Within this business, the bank has three main product areas # Foreign C"change and ,erivatives, 'ocal -urrency <oney <arket J ,ebt 9ecurities, and Cquities. With the liberalization of the financial markets in *ndia, corporate need more sophisticated risk management information, advice and product structures. These and fine pricing on various treasury products are provided through the bankIs Treasury team. To comply with statutory reserve requirements, the bank is required to hold /:H of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.

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*t is well#recognized fact that the quality of financial management is a key ingredient in determining the success of an organization. This is even more relevant in a service industry like banks. *n this bank, they work for ultimate identity and success of their bank will reside, as it always has, in the e"ceptional quality of their people and their e"traordinary effort. The bank is only as strong as its infrastructure and its processes. The bank, right from inception, they have invested in a robust technology platform, that s seamlessly integrated with centralized and audited processes. acceptable service standards. The bank s well#documented procedures, high levels of automation, intensive training of personnel and ongoing audit review had enabled then to improve the reliability of their operational processes. *9$ B;;/ certifications of their cash management, retail centralized processing and custody and depository operations are indicative of their achievements in this regard. !ccording to leading *ndian 2usiness magazine, 2usiness World, a survey was carried out and it was noted that +,F- 2ank stand best in *ndia for the year /;;=. The bank was ranked as 1*ndia s5 third best company by Finance !sia /;;:. The bank received the 1,ream +ome5 award for the best housing finance company for /;;6 from outlook money magazine. !nd also has been named best domestic bank in *ndia in the !sset Triple a country awards in the year /;;6. *n /;;0 the bank won the award for operational e"cellence in retail financial services *ndia as a part of !sian 2anker e"cellence in retail financial services program. This has enabled them to e"pand rapidly and grow manifold while maintaining

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MA+A!EME+T
)irectors and e8ecutives +,F- 2ank s <emorandum and articles of association provides that until otherwise determined by a general meeting of shareholders. The number of our directors shall not be less than three %0& or more than fifteen %(:& directors, e"cluding directors appointed pursuant to the term of issue date. 2ank s board of directors consisted of nine %B& members as of <arch 0( st /;;= were comprised of@ <r. Fagadeesh 4apoor %-hairmen& <r.!ditya puri %<anaging ,irector& ,r. K.7..adwal %3on C"ecutive ,irector& <r. Kineet Fain %3on C"ecutive ,irector& <r. 4.<.<istry %3on C"ecutive ,irector& <rs. 7enukarnad %3on C"ecutive ,irector& <r. !ravind 8ande %3on C"ecutive ,irector& <r. 2obby 8arikh %3on C"ecutive ,irector& <r. !shim 9amanta %3on C"ecutive ,irector&

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"R!A+I9ATI"+A& STRUCTURE
Structure of t%e #ranc%
."AR) "' )IRECT"RS

C(AIRMA+ A+) MA+A!I+! )IRECT/"R

EXEUTIVE )IREC/T"R

RE!I"+A& .USI+ESS MA+A!ER

STATE MA+A!ER

.RA+C( MA+A!ER

SU,ERVIS"R AUT("RITIES

SU,ERVIS"R AUT("RITIES

,ERS"+A& .A+/ER

TE&&ER A+) RE&ATI"+S(I, MA+A!ER

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,R")UCT ,R"'I&E The products, which are found in +,F- 2ank, are 9aving !ccount -urrent !ccount Fi"ed !ccount 8referred 8rogram ,emat !ccount 37* !ccount Fore"8lus travel s -ard 2ill pay *nsta !lert ,irect banking -hannel

Saving .an7 Account

8eople with steady and monthly income save their e"cess earning through this account. There are certain restrictions in the withdrawals. 2ank pays interest at a nominal rate. 9mall savings are encouraged in this account. The bank has these accounts under the savings accounts are 7egular !ccount 9alary !ccount Trust account 4ids !dvantage !ccount

Current Account
These deposits constitute ma)or portion of banks circulating medium of e"change. 3ormally business people keep money in his accounts as they can withdraw and issues cheques any number of times. 2anks does not pay any

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interest for these deposits. The different accounts that can be opened under the current accounts areL

7egular !ccount 8remium !ccount 8lus !ccount Trade !ccount and <erchant Cstablishment

'i8ed )eposits
<oney is accepted for a fi"ed period it cannot be with draw on before e"piry of fi"ed period. The interest s rate higher than other accounts. <inimum amount of new fi"ed accounts is 7s. (;,;;; and addition on fi"ed deposits is :,;;;. 9ince fi"ed deposits was booked for a period (6 days interest is paid only if the fi"ed deposits runs for at least (: days if the deposits was booked for (6 days or less interest is paid if the fi"ed deposits runs for at least ? days.

,referred ,rogram
The following are the components of preferred program Free .old ,ebit card with enhanced daily limit !T< at par cheque book Free .old ,ebit card Fi"ed discount up to A paise on card rate Free intercity transaction <onthly combined statement Free cheque book pick#up and delivery ,iscount on loans Free standing instructions.

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)emat account
With 9C2* making trading mandatory in the ,emat form advent of rolling settlement, it is imperative that all investors have a ,emat account with a depository participant. When a customer places an order the seller can

deliver the securities in ,emat form, which can only be traded to the ,emat account. T%e follo4ing are t%e #enefits of )emat account in ()'C #an7 3ominal annual maintenance charges -ompetitive fees for transaction ,emat account status on the *nternet $ption to open ,emat account with 39,' or -,9' or both 8ersonalize *nstruction 2ook 8aper less trading which will help to prevent mutilation, loss and misplacement of certificate and eliminate the problems of bad delivery 9afety of securities with +,F- bank 8roblem of bad delivery, mutilation is eliminated Mero stamp duty Faster settlement of buying and selling of orders, direct credit of allotment for public>rights>bonus issue.

+RI Account
The different types of 37* !ccounts are 37$ !ccountsL *t is an account that can be opened in *ndian rupees. $ne can also open on account in any form@ be it savings, current or term deposits. *nterest on account can be repatriated. 37C !ccountL 3on 7esident C"ternal account at +,F 2ank is available as a savings, current and term deposit. $ne can also get an international debit card with your 37C !ccount, the average quarterly balanced are

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37C savings accounts is 7s. (;,;;; and current and fi"ed deposit account is 7s. /:,;;;. F-37 !ccount L *n foreign currency non resident account you get protection against e"change risk, apart from earning attractive interest rate the fund can also be repatriated abroad 7F- !ccountL *t is an account is to retain fund in foreign currency.

'ore8 ,lus Travel:s Card

The Fore" plus Travel -ard is a non#personalized car in association with Kisa. *t is a prepaid U9,>CU7>.28 denominated card. <oreover, it can also be used at !T< with pin and with signature. The main features of the Fore" plus Travel card are <inimum loading N:;; and C6;; and <a"imum loading N(;,;;; and CA, ;;; 8er day limit !T< N/,;;; 8ersonal accident covers 7s. / lakhs 'oss of baggage covers 7s. /;,;;; +ence, Fore" plus -ard cannot be used for the cash withdrawal in *ndia, 3epal and 2hutan. The customers are not able to check outstanding balance at +,F- 2ank !T<s. !lso, the card 8in cannot be changed.

.ill ,a Account
Through 2ill 8ay, a customer can not only pay his Clectricity, <obile, Telephone bills but also 'ife *nsurance premium. The customer can also subscribe or renew his *nternet account through the ,irect 8ay facility. +ence, the 2ill 8ay through the *nternet is done by logging to 3et 2anking using the customer *, and password. Then the customer has to click on the bill payment icon and select the company of which the bill is to be paid and confirm payment. 2ill 8ay through 8hone is done )ust by calling 8hone banking in the city and then follows the simple instruction that s given. 2ill

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8ay through <obile 8hone is )ust to access your +,F- 2ank account on your mobile phone to pay your bills, while you are on the move. 2ill 8ay at !T<s is simply by selecting the others option in the main menu. Then, select the bill payment option in the sub#menu. !nd finally, )ust confirm the amount of the bill that you wish to pay. +owever, you must be registered for 3et banking and <obile 2anking in order to use these channels for 2ill pay.

Insta Alert
+,F- 2ank makes its customer life simple with the introduction of its new *nsta alert service. With this facility, one can get regular updates on his bank account via 9<9 or e#mail. +ence, *nsta alert ensures its customer complete peace of mind. For our salary account holders, *nsta alert helps in getting an 9<9 or e#mail the moment the salary gets credited. The main features of the *nsta !lert are Utility bill payments due and weekly balance alert. For these services they charge 7sL /: per account quarterly for savings account and for current account they charge 7sL :; per account quarterly.

)irect #an7ing c%annels

There are three types of direct banking channels. They are 3et banking <obile banking 8hone banking

+et #an7ing 3et banking relates to the benefits through financial and non financial transactions. They are Free Funds transfer, ,emand ,raft, 2ank -redit -ard, 2ill 8ay for financial transactions. For non financial transactions, account balance, statement download update mailing address, cheque book request etcO

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Mo#ile #an7ing <obile banking product proposition is based on the 9<9 %9hort <essaging 9ervice& protocol. The information available on the cell phone screen is in the form of te"t message.

,%one #an7ing 8hone banking is the transaction between non#financial and financial phone banking that give the details of both the mentioned transactions. C"amples are Free Funds transfer, ,emand ,raft, 2ank -redit -ard, 2ill 8ay for financial transactions. For non financial transactions, account balance, statement download update mailing address, cheque book request etcO

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Ris7 management and portfolio ;ualit of ()'C .an7

Taking on various types of risk is integral to the banking business. 9ound risk management and balancing risk reward trade offs are therefore critical to a bank s success. 2usiness and revenue growth have therefore to be weighed in the conte"t of the risks implicit in the bank s business strategy. $f the various types of risks the bank is e"posed to, the most important are credit risk, market risk %which includes liquidity risk and price risk& and operational risk. The identification, measurement, monitoring and management of risks remain a key focus area for the bank. For credit risk, distinct policies and processes are in place for the retail and wholesale businesses. *n retail loan businesses, the credit cycle is managed through appropriate front#end credit, operational and collection processes. For each product, programs defining customer segments, underwriting standards, security structure etc., are specified to ensure consistency of credit buying patterns. .iven the granularity of individual e"posures, retail credit risk is managed largely on a portfolio basis, across various products and customer segments. For Wholesale credit e"posures, management of credit risk is done through target market definition, appropriate credit approval processes, ongoing post# disbursement monitoring and remedial management procedures. portfolio diversification and reviews also facilitate management. $verall and mitigation

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The risk monitoring committee of the 2oard monitors the 2ank s management policies and procedure, vets treasury risk limits before they are considered by the 2oard, and reviews portfolio composition and impaired credits, from an industry concentration perspective, as of <arch 0( /;;:, the retail asset portfolio constituted 6BH of the total customer assets %including advances, corporate debt instruments, etc.&. $ther larger industry e"posures include automotive at BH land transport at 6H, housing finance at 6H and heavy engineering>equipment at (H of total customer assets. account for (Hor more of the 2ank s customer assets portfolio. !s of <arch 0(st /;;:, the 2ank s ratio of gross non#performing assets %38!& to total customer assets was (.6?H as against (.:;H as of <arch 0(st /;;6. *ncreases in non#performing assets during the year were primarily related to delinquencies in various retail loan products. These delinquencies and 38!s were within the e"pected levels for each of the retail asset products given the seasoning of the retail portfolio. 3et non#performing assets were ;./6H of net advances and ;./;H of customer assets as of <arch 0(st /;;: as against ;.(=H and ;.(/H respectively as of <arch 0(st /;;6. The specific loan loss provisions that the 2ank has made for its non#performing assets continue to be more conservative than the regulatory requirement. The bank continues to have a policy of creating general provisions upfront based on estimated portfolio losses for its ma)or retail loan product programs against which specific provisions are set#off as the portfolio ages and 38!s surface. !s on <arch 0(st /;;:, total general loan loss provisions were ;.=H of the standard advances as against the regulatory requirement of ;./:H. The bank has been tracking the farming of the 3ew 2asel -apital !ccord %2asel **& and the guidelines of the 7eserve 2ank of *ndia in this regard. *t has also assessed the key requirements of the framework, identified the areas in rating systems, risk architecture, technology support, process documentation, etc., needing augmentation and has laid down a road map for The well#

diversified nature of the portfolio is evidenced in the fact that /0 industries

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meeting the requirements in this respect.

The 2ank is in the process of

implementing a solution, which meets its requirements in the wholesale credit area in connection with the *nternal 7ating 2ased %*72& !pproach for credit risk. This will supplement the risk management systems the 2ank already has in place since inception.

,R"3ECT "VERVIE6 T%eoretical overvie4 of 'inancial Statement Anal sis

'inancial Statement
!n organization communicates its financial information to the users through financial statements and reports. Financial statements contain summarized information of the organization s financial affairs, organized systematically. These statements comprise the incomer statements or profit and loss account and the position statement or the balance sheet. These financial statements have been prepared in accordance with accounting principles generally accepted in the United 9tates of !merica. This principles differs in certain material respects from accounting principles generally accepted in *ndia, the requirements of *ndia s 2anking 7egulations !ct and related regulations issued by the 7eserve 2ank of *ndia which form the basis of the statutory general purpose financial statements of the 2ank of *ndia. 8rincipal differences in so far as they deferred income ta"es, stock based compensation, employee benefits, loan origination fees and derivative financial instruments, and the presentation format and disclosures of the financial statements and related notes. The preparation of financial statements in conformity with U9 .!!8 requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of

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these financial statements and the reported amounts of revenues and e"penses for the years presented. !ctual results could differ from these estimates. <aterial estimates included in these financial statements that are susceptible to change include the allowance for credit losses and the valuation of unlisted investments. To give a full view of the financial affairs of the undertaking it is also necessary to include a statement of retained earnings, a statement of changes in the financial position and a few schedules such as schedule of fi"ed assets and schedule of debtors.

Income Statement:

The profit and loss account sets out income as

well as e"penses of the same period and after matching the two, the difference being the net profit or net loss, is shown as the difference between the two sides of the account. Thus, the earning capacity and the potential of an organization are reflected by its profit and loss account. ,osition Statement: !nd also know as 2alance sheet. *t displays

the total resources of a business and the owners and creditor s equity in these resources. *t indicates a statement of affair of a business at a particular moment of time and thus it is static in nature. Statement of Retained Earnings: !lso known, as the profit and

loss appropriation account, is generally a part of the profit and loss account. *t shows how the profit of the business for the accounting period is appropriated towards reserve and dividend and how much of the same is carried forwarded as retained earnings. Statement of C%anges in 'inancial ,osition: !lso known as the

fund flow statement summarized the changes in assets, liabilities and

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the owner s equity between two balance sheet dates. Thus, it is a statement of flows, which is it measures the changes that have been taken place in the financial position of a firm between two balance sheet dates. *t summarizes the sources and uses of the funds obtained.

TIT&E "' T(E STU)Y

*T(E A+A&YSIS A+) I+TER,RETATI-"+ "' T(E 'I+A+CIA& STATEME+T "' ()'C .A+/ &IMITE)0 .A+!A&"RE12 The analysis of the statement is a evaluating the financial position and analyzing the performance of the bank and also evaluating the financial strength and weakness of the bank. The analysis is based on absolute accounting figures reported in the financial statement, like 2alance 9heet, 8rofit and 'oss !ccount and other *ncome 9tatement, which were prepared by the bank. The essence of financial statement of the bank lies in balancing its goal, commercial strategy and resultant financial needs. The bank should have financial capabilities and fle"ibility to peruse its commercial strategies.

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".3ECTIVES "' T(E STU)Y

The ob)ectives of the study are to evaluate the financial position and performance of the 1+,F- 2!34 'T,5. The purpose of the study mainly centers on the critical analysis of the financial statements of the bank. !nd makes attempt to get better in sight about the financial strength and weakness of the bank by analyzing and interpreting the data reported in its statements

Various o#$ectives of t%e anal sis are:

To study the service offered by the +,F- 2!34 'T,., to the customers and financial activities, and also study the new planes and schemes of the bank. 9tudy is mainly focused on the financial and commercial activities of the bank To indicate the trend progress of downfall of the bank To evaluate the profitability of the bank To show the relative strength and weakness of the bank To determine the financial condition and financial performance of the bank To involve comparison for a useful interpretation of the financial statement To find out the solution to the unfavorable financial conditions and financial performance To analyze how the bank as utilized its each financial resources and its sources To find out the market share of the bank

/A

To act of analysis may also reveal areas where control is deficit and desirable for the efficient operating of the bank which in turn help to achieve organizational goals.

+eed of t%e Stud

!ny company would like to know its position against its competitors. The ultimate performance indicator of any company is the financial parameters because invariably all cost efficiencies, activities and solvency position of the company will be reflected in the financial mirror. T%e follo4ing are stated as t%e need for t%e stud : To understand the volume of the profit and its reasonableness. To understand the movement of profit over a period of time., To know the reason for the variation in the profit. To know the present standing of the company.

SC",E "' T(E STU)Y

The study is confined to +,F- 2!34 'T,., the annual reports of the bank constitutes primary sources of statistical data for deciding its working results and financial stand besides the information given by the finance manager also constitute a part of information for the study. The financial information dealing with the 2alance sheet and 8rofit and 'oss account have been analyzed and interpreted to arrive at definite conclusion. The statements are prepared on 0(st <arch of every year. The analysis of financial statement and financial performance is a well# researched area and innumerable studies have proved the utility and usefulness

/B

of this analytical technique. constructively contribute to help,

This research seeks to investigate and

The bank in finding out the gray areas for improvement in performance The bank to understand its own position overtime The managers to understand the contribution to the performance of bank

The present and potential investors outside parties such as the creditors, debtors, government and many more to get an idea of the over all performance of the bank.

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MET(")"&"!Y
Sources of data can #e classified into t4o groups t%e are: 8rimary data and 9econdary data

,rimar data
The data are originally collects the data directly from the company or from the agency for the first time, for any statistical investigation and used by them in the statistical analysis are termed as primary data. prospects, company file etc. *t has been collected through different books of accounting, broaches, catalogs, company

Secondar data
The data published or un published, which have already been collected and processed by some agencies for their statistical work are termed as secondary data. !s for as secondary data is concerned the second agency if and when it publishes and files such data, it becomes secondary data sources to any one who later uses that data. This is related to collect the required information about the study. <y sources of information are the data available with the bank by on going

0(

through the annual reports. The study is basically relies on secondary data supplied by the bank. The primary data used for this study consist of informal discussion, interviews with the deputy manager of the bank.

'inancial Anal sis

The focus of financial is on key figures in the Financial 9tatements and the significant relationship that e"ists between them. The analysis of financial statement is a process of evaluating relationship between component parts of the financial statement to obtain a better understanding of the firm s position their strength and weakness and performance of the firm. The purpose of financial analysis is to disclose the information contained in the financial statements so as to )udge the profitability and financial soundness of the organization. The first task of the financial analysis is to select the information relevant to decision under consideration from the total information contained in the financial statement. The second step involved in financial analysis is to arrange the information in a way to highlight significant relationship. The final step is interpretation and drawing of inference and conclusions. *n brief financial analysis is the process of selection, relation and evaluation. T pes of 'inancial Anal sis There are two types of financial analysis, they are $n the basis of material used $n the basis of modus operandi "n t%e #asis of material used

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!ccording to material used, financial analysis can be of two types, they are E8ternal Anal sis: This analysis is done by outsiders who do not have access to the detailed internal accounting records of the business firm. These outsiders include investors, potential investors, creditors, potential creditors, government agencies, credit agencies and the general public.

Internal Anal sis: This analysis conducted by persons who have access to the internal accounting records of a business firm is known as internal analysis. 9uch analysis can, therefore, performed by e"ecutives and employees of the organization as well as government agencies which have statutory powers vested in them. "n t%e #asis of modus operation !ccording to the method of operation followed in the analysis, financial analysis can also be of two types, they are (ori5ontal Anal sis: This analysis refers to the comparison of

financial data of a company for several years. This type of analysis is also called P,ynamic !nalysis as it is based on the data from year to year rather than on data of any one year. Vertical Anal sis: This analysis refers to the study of relationship of the various items in the financial statements of one accounting period. *n this type of analysis the figures from financial statement of a year are compared with a base selected from the year s statement.

Tec%ni;ues of 'inancial Statement Anal sis

00

!nalysis of the financial statement by selecting the appropriate techniques according to the purpose of analysis financial statement may be analyzed by means of any of the following techniques, they are 7atio !nalysis -omparative 9tatements !nalysis -ommon#size 9tatements !nalysis Trend !nalysis -ash flow 9tatements !nalysis Fund flow 9tatements !nalysis

Ratio anal sis

*t is one of the powerful tools of the financial analysis and it is a statistical yard stick that provides a measure of relationship between two accounting figures. 7atio analysis of financial statement stands for the process of determining and presenting the relationship of items and group of items in the statement. 7atio analysis can be used both in the trend analysis and static analysis. 7atio is thus the numerical or an arithmetical relationship between two figures, it e"pressed where one figures is divided by another. *t is very useful analytical techniques to raise pertinent questions on a number of managerial issues. *t provides bases or clues to investigate such issues in details. While assessing the financial health of a company ratio analysis answers to question relating to the companies profitability, asset utilization and liquidity and financial capability of the firm. The ratio can be classified as follows, 8rofitability ratios -overage ratios Turnover ratios Financial ratios

Comparative 'inancial Statement anal sis

06

The preparation of comparative financial statement is an important device of horizontal financial analysis. Financial data become more meaningful when compared with similar data for a previous period or a number of prior periods. 9tatements prepare in a form that reflect financial data for two or more periods are known as comparative financial statement analysis. !ny statement prepared in a comparative form will be covered in comparative statements. This statement not only the comparison of the figures of two periods but also be relationship between balance sheet and income statement enables an in depth study of financial position and operative results. The financial data will be comparative only when same accounting principles

used in preparing these statements. *n case of any deviation in the use of accounting principles this fact must be mentioned at the foot of a financial statements and the analyst should be careful in using these statements the two comparative statements are balance sheet and income statement

Common si5e Statements

7atio analysis apart, another useful way of analyzing Financial 9tatement is convert them into common size statement by e"pressing absolute rupees amount into percentages, when this method is pursued. Then income statement e"hibits each e"penses item or group of e"penses. *tem as a percentage of net sales and net sales are taken at (;;H. 9imilarly each individual assets and liability classification is show as a percentage of total assets and liabilities respectively. 9tatement prepare in this way are referred to as common size statements. This prepared for one firm over the year would highlight the relative changes in each group of e"penses, assets and liabilities. These statements can be equally useful for inter#firm comparison. This statement shows the relation of each component to the whole. *t is useful in vertical financial analysis and comparison of two business enterprises at a certain dates.

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Trend Anal sis

The financial statements may be analyzed by computing trends of services of information. This method determines the direction upwards or downwards and involves the computation of the percentage relationship that each statement item bears to the same item in base year. -learly the comparison of the past data over a period of time with a base year is known as trend analysis. Under trend analysis the percentage relationship that each financial statement item of each year bears to the same in the base year is taken as hundred and on that the base trend analysis for the corresponding item in the other years are calculated.

Cas% flo4 Statement anal sis

! statement changes in financial position on cash basis commonly know as the cash flow statement analysis. 9ummarize the causes of changes in case position between dates of two balance sheets. *t indicates the sources and uses of each. *t is similar to the fund flow analysis e"cept that it focuses attention on cash instead of working capital funds. The cash flow statement classifies cash flows during the period from operating investing and financial activities.

'und flo4 Statement anal sis

Fund flow statement is a statement has to be prepared to show the changes in the assets and liabilities from the end of one period of time to the end of another period of time. !nd the fund flow statement is a statement which shows the movement of funds and is a report of the financial operations of the business undertaking. *t indicates various means by which funds were obtained during a particular period and the ways in which these funds were employed. *n simple word Pit is a statement of sources and application of funds . This statement shows the changes in the position of Working capital that is may decrease or increase. The working capital is defined as a difference between current assets and current liability.

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<1 'i8ed assets ratio

This ratio establishes the relationship between fi"ed assets and share holders funs. This ratio indicates the e"tent to which share holders funds are sunk in the fi"ed assets. .enerally, in the purchase of fi"ed assets should be financed by the share holder s equity, which includes 7eserves, 9urplus and retained earnings

'i8ed assets ratio = Ta#leA<

'i8ed assets > +et 4ort% ? <@@

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

%7s in 'acs& 'i8ed assets +et 4ort% 0?(.(; :/A.:A =(=.B( ?;A.0/ A::.;A (,B:(.00 /,/:(.?6 /,=B0.00 6,:=/.A: :,0;=.:0

Ratios BCD (B.;/ /0.6? //.B; (:.:/ (=.((

The above table shows that the fi"ed assets to the net worth in the year /;;/ it was (B.;/H, then it increased to /0.6?H in /;;0, but it decreased

0?

to //.B;H and (:.:/H in /;;6 and /;;: respectively. Then it has increased to (=.((H in the year /;;=. This ratio is in good position as the net worth is more than the fi"ed assets. The share holder s funds are sufficient to finance the fi"ed assets.

C%art <:

25 20 ratios 15 10 5 0 2002 2003 2004 years 2005 2006

0A

E1 ,roprietar ratio
This ratio establishes the relationship between the share holders fund and the total assets of the firm. *t establishes the claims of the share holders on the firm s assets. *t is usually e"pressed as a pure ratio.

,roprietar ratio = <@@

s%are %olders fund > Total assets ?

Ta#le A E Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;= %7s in 'acs& S%are %olders funds (,B:(.00 /,/:(.?6 /,=B0.00 6,:=/.A: :,0;=.:0 Total assets /0,?A?.0B 0;,6/6.;A 60,0;=.BB :(,6/A.;; ?0,:;=.0B Ratios BCD A./; ?.6; =./( A.A? ?./(

0B

The above table indicates that the 8roprietary ratio reflects the financial strength of the bank. *n the year /;;/, the ratio was A./;H, and then it decreased to ?.6;H and =./(H, in the year /;;0 and /;;6 respectively. Then it increased to A.A?H in the year /;;:, but again decreased to ?./(H in the year /;;=.

C%art E:

10 8 6 4 2 0 2002 2003 2004 years 2005 2006

ratios

6;

F1 Return on e;uit
*t indicates the how the firm has used the resources of the owners. This ratio is one of the most important ratios in financial analysis. The earnings of a satisfactory return are one of the most desirable ob)ectives of a business. The ratio of net profit to owner s equity reflects the e"tent to which the ob)ective has been accomplished.

R"E = ,rofit after Ta8 > E;uit S%are %olders fund ? <@@

Ta#le G F

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

,AT /B?.;6 0A?.=; :;B.:; ==:.:= A?;.?A

%7s in 'acs& E;uit s%are %olders fund /A(.0? /A/.;: /A6.?B 0;B.AA 0(0.(6

Ratios BCD (;:.:= (0?.6/ (?A.B; /(6.?? /?A.;A

6(

The above table shows that, this reflects the financial strength of the bank. *n the year /;;/, the ratio was (;:.:=H, and then it was continuously increased to (0?.6/H, ?A.;AH, /(6.??H and /?A.;AH in the year /;;0, /;;6, /;;: and /;;= respectively.

C%art F:

300 250 200 ratios 150 100 50 0 2002 2003 2004 years 2005 2006

6/

H1 Return on assets
!lso called as 7eturn on *nvestments ratio, it is the ratio of net profit to total assets. 7eturn here means, net profit after ta"es and total assets, all realizable assets including intangible assts. *f they are realizable this ratio measures the productivity of the total assets of a concern.

R"A = +et profit > Total assets ? <@@ Ta#le G H

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

+et profit /B?.;6 0A?.=; :;B.:; ==:.:= A?;.?A

%7s in 'acs& Total assets /0,?A?.0B 0;,6/6.;A 60,0;=.BB :(,6/A.;; ?0,:;=.0B

Ratios BCD (./: (./? (.(? (./B (.(A

60

The above table shows that, the ratio indicates the return on assets. *n the year /;;/ it was (./:H and it increased to (./?H in /;;0. 2ut it was decreased to (.(?H in /;;6, and again it has been increased to (./BH in the year /;;: and was decreased to (.(AH in the year /;;=.

C%art H:

1.5 ratios

0.5

0 2002 2003 2004 years 2005 2006

66

I1 E;uit Multiplier
This ratio establishes relationship between total assets and total equity capital of the bank.

E;uit Multiplier = Total assets > Total e;uit capital Ta#le G I

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

%7s in 'acs& Total assets Total e;uit capital /0,?A?.0B 0;,6/6.;A 60,0;=.BB :(,6/A.;; ?0,:;=.0B /A(.0? /A/.;: /A6.?B 0;B.AA 0(0.(6

Ratios BCD A6.:6 (;?.A? (6A.:= (=:.B= /06.?6

6:

The above table indicates that the relationship between the bank total assets and total equity. *n the year /;;/, it was A6.:6H then it increased to (;?.A?H, (6A.:=H, (=:.B=H and /:6.?6, in the year /;;0, /;;6, /;;: and /;;= respectively.

C%art I:

250 200 150 100 50 0 2002 2003 2004 years 2005 2006

ratios

6=

J1 Earnings per s%are

*t is the ratio between net profits available for equity share holders %i.e. net profits after ta" and preference dividend& and the number of equity shares.

E,S = +et profit > +o1 of e;uit s%ares Ta#le G J

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

+et profit %7s in 'acs& /B?.;6 0A?.=; :;B.:; ==:.:= A?;.?A

+o1 of e;uit %olders /A,(0,?6,=(0 /A,/;,6:,?(0 /A,6?,B(,?(0 0;,BA,?:,0;A 0(,0(,6/,6;A

Ratios ((.;( (0.?: (?.B: //.B/ /?.B/

The above table shows that the bank earnings position was satisfactory. 9o that the bank C89 has continuously increased that is ((.;( per

6?

share in /;;/ and (0.?:, (?.B:, //.B/ and /?.B/ in the year /;;0, /;;6, /;;: and /;;= respectively.

C%art J:

6A

30 25 20 ratios 15 10 5 0 2002 2003 2004 years 2005 2006

K1 ,rofit margin
This ratio is establishes the relationship between the net profit and total income of the company.

,rofit margin = +et profit > Total income ? <@@

6B

Ta#le G K

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

+et profit /B?.;6 0A?.=; :;B.:; ==:.:= A?;.?A

%7s in 'acs& Total income /,;0=./6 /,6?B.(= 0,;/A.B= 0,?66.A0 :,:BB.0/

Ratios BCD (6.:B (:.=0 (=.A/ (?.?B (:.::

This above table shows that the profit margin of the bank was satisfactory. That was (6.:BH in the year /;;/, then it continuously increased to (:.=0H, (=.A/H, (?.?BH in the year /;;0, /;;6, /;;:. 2ut it again decreases in the year /;;= that is (:.::H.

C%art K:

:;

20 16 12 8 4 0 2002 2003 2004 years 2005 2006

L1 Interest e8penses ratio

ratios

IER= Interest E8pended > Total income ? <@@

Ta#le G L

:(

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

Interest e8pended (,;?0.?6 (,(B(.B= (,/((.;: (,0(:.:= (,B/B.:;

%7s in 'acs& Total income /,;0=./6 /,6?B.(= 0,;/A.B= 0,?66.A0 :,:BB.0/

Ratios BCD :/.?0 6A.;A 0B.BA 0:.(0 06.6:

The above table shows that the interest e"pended ratio that is it establishes relationship between the interests e"pended and total income of the bank. This ratio was :/.?0H in the year /;;/, then it increased to 6A.;AH in /;;0, and then it decreased to 0B.BAH, 0:.(0H and 06.6:H in /;;6, /;;: and /;;= respectively.

C%art L:

:/

60 50 40 ratios 30 20 10 0 2002 2003 2004 years 2005 2006

M1 +on interest e8penses ratio

= +on interest e8pended > Total income ? <@@

Ta#le G M:

:0

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

%7s in 'acs& +on interest Total income e8penses 6(?.B: :B(.A: A(;.;; (;A:.6; (=B(.;B /,;0=./6 /,6?B.(= 0,;/A.B= 0,?66.A0 :,:BB.0/

Ratios BCD /;.:0 /0.A? /=.?6 /A.BA 0;./0

The above table shows that the relationship between the non interest e"penses and total income to found non interest e"penses ratio. This ratio was /;.:0H in the year /;;/ and then in continuously increased to /0.A?H, /=.?6H, /A.BAH and lastly 0;./0H in the year /;;0, /;;6, /;;: and /;;= respectively.

C%art M:

:6

35 30 25 ratios 20 15 10 5 0 2002 2003 2004 years 2005 2006

<@1 Ta8 ratio

= ,rovision for ta8 > Total income ? <@@

Ta#le G <@

::

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

%7s in 'acs& ,rovision for Total income ta8 /6?.:( 0//.:: 6BA.6( =?A.0( (,((?.B: /,;0=./6 /,6?B.(= 0,;/A.B= 0,?66.A0 :,:BB.0/

Ratios BCD (/.(: (0.;( (=.6: (A.(( (B.?A

The above table shows that the relationship between the provision for ta"ation and total income of the bank. This ratio was (/.(:H in the year /;;/. Then it increases to (0.;(H, (=.6:H, (A.((H and (B.?AH in the year /;;0, /;;6, /;;: and /;;= respectively.

C%art <@:

:=

24 20 16 ratios 12 8 4 0 2002 2003 2004 years 2005 2006

<<1 +et interest margin

This ratio is shows relationship between net interest income and total earning assets.

+IM = +II > Total earning assets ? <@@

Ta#le A <<

:?

%7s in 'acs& Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;= +II =/B./: A/(.=: (,00?.AA (,???.BB /,:6:.A6 Total earning Ratios BCD assets /0,?A?.0B 0;,6/6.;A 60,0;=.BB :(,6/A.;; ?0,:;=.0B /.=: /.?; 0.(= 0.6= 0.6=

The above table shows that the net interest margin, which is relationship between the net interest income and total earnings assets. That ratio was /.=:H in the year /;;/, and then it was increased to /.?;H, 0.(=H, 0.6=H and 0.6=H in the year /;;0, /;;6, /;;: and /;;= respectively.

C%art <<:

:A

5 4 3 2 1 0 2002 2003 2004 years 2005 2006

<E1 Efficienc BcostA incomeD ratio

ratios

= +on interest e8penses > +et total income ? <@@

Ta#le G <E

:B

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

%7s in 'acs& +on interest +et total Ratios BCD e8penses income 6(?.B: :B(.A: A(;.;; (,;A:.6; (,=B(.;B B=/.:; (,/A?./; (,A(?.B( /,6/B./? 0,==B.A/ 60.6/ 6:.BA 66.:= 66.=A 6=.;A

The above table shows that the efficiency ratio that included cost and income. This ratio was reflects that the relationship between the non interest e"penses and net total income of the bank.

C%art <E:

=;

44

34 ratios

24

14

4 2002 2003 2004 years 2005 2006

<F1 "ver %ead efficienc ratio

= +on interest income > +on interest e8penses ? <@@

Ta#le G <F

=(

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

%7s in 'acs& +on interest +on interest Ratios BCD income e8penses 000./: 6=:.:: 6A;.;0 =:(.06 (,(/0.BA 6(?.B: :B(.A: A(;.;; (,;A:.6; (,=B(.;B ;.?B ;.?B ;.:B ;.=; ;.==

The above table shows that the over head efficiency of the bank by efficiency ratio that is the relationship between the non interest income and non interest e"penses of respected years.

C%art <F:

=/

0.75

ratios

0.5

0.25

0 2002 2003 2004 years 2005 2006

<H1 Asset utili5ation

= Total income > Total assets ? <@@ Ta#le G <H

=0

Years /;;(#/;;/ /;;/#/;;0 /;;0#/;;6 /;;6#/;;: /;;:#/;;=

%7s in 'acs& Total income Total assets /,;0=./6 /,6?B.(= 0,;/A.B= 0,?66.A0 :,:BB.0/ /0,?A?.0B 0;,6/6.;A 60,0;=.BB :(,6/A.;; ?0,:;=.0B

Ratios BCD A.:= A.(: ?.(= ?./A ?.=/

The above table shows that the asset utilization that is the relationship between total income and total assets of the bank

C%art <H:

=6

12

8 ratios 4 0 2002 2003 2004 years 2005 2006

Comparative .alance S%eet of ()'C .and &td 'or t%e ear ending F<st Marc% E@@E and E@@F
BRs &acsD Year ending F<st Marc% E@@E E@@F Increase> )ecrease BAmountsD Increase> )ecrease B,ercentagesD

=:

Capital and &ia#ilities -apital 7eserves and 9urplus Cmployees stock option %grants& $>9 ,eposits 2orrowings 9ubordinated debt $ther liabilities and provisions Total Assets -ash and balance with 72* 2alance with banks *nvestments !dvances Fi"ed assets $ther assets Total

/A(.0? (,==;.B( B.;: (?,=:0.A( (,A/0.;/ /;;.;; /,(:B.// EF0KLK1 FL (,/((.( ? /,/6?.;/ (/,;66.;/ =,A(0.?/ 0?(.(A (,(6;.0: EF0KLK1FL

/A/.;: (,B=/.?A =,B( //,0?=.;? /,;A6.=: /;;.;; 0,:((.=/ F@0HEH1@L

;.=A 0;(.A? %/.(6& 6,?//./= /=(.=0 ### (,0:/.6; J0JFJ1K@

;./6 (A.(? %/0.=:& /=.?: (6.0: ### =/.=0 EK1M@

/,;A(.B= (,;A?./= (0,0AA.;A ((,?:6.A= :/A.:A (,:A0.06 F@0HEH1@L

A?;.?B %(,(:B.?=& (,0A6.;= 6,B6(.(6 (:?.6; 66/.BB J0JFJ1K@

?(.B; %:(.=(& ((.:0 ?/.:/ 6/.6; 0A.A: EK1M@

Comparative .alance S%eet of ()'C .and &td 'or t%e ear ending F<st Marc% E@@Fand E@@H
BRs &acsD Year ending F<st Marc% E@@F E@@H Capital and &ia#ilities Increase> )ecrease BAmount sD Increase> )ecrease B,ercentagesD

==

-apital 7eserves and 9urplus Cmployees stock option %grants& $>9 ,eposits 2orrowings 9ubordinated debt $ther liabilities provisions Total Assets -ash and balance with 72* 2alance with banks *nvestments !dvances Fi"ed assets $ther assets Total

/A/.;: (,B=/.?A =,B( //,0?=.;? /,;A6.=: /;;.;; 0,:((.=/ F@0HEH1 @L

/A6.?B /,6;?.;B (.6: 0;,6;A.A= /,0;?.A/ =;;.;; =,/B=.BA HE0F@J1MM

/.?6 666.0( %:.6=& A,;0/.?B //0.(? 6;;.;; /,?A:.0= <<0LLE1M<

;.B? //.=6 %?B.;/& 0:.B; (;.?( /;;.;; ?B.0/ FM1@J

/,;A(.B= (,;A?./= (0,0AA.;A ((,?:6.A= :/A.:A (,:A0.06 F@0HEH1@L

/,:6(.BA (,((:.:? (B,/:=.?B (?,?66.:( =(=.B( (;0(./0 HE0F@J1MM

6=;.;/ /A.0( :,A=A.?( :,BAB.=: AA.00 %::/.((& <<0LLE1M<

//.(; /.=; 60.A0 :;.B: (=.?( %06.A?& FM1@J

Comparative .alance S%eet of ()'C .and &td 'or t%e ear ending F<st Marc% E@@H and E@@I
BRs &acsD Year ending F<st Marc% E@@H E@@I Increase> )ecrease BAmountsD Increase> )ecrease B,ercentagesD

=?

Capital and &ia#ilities -apital 7eserves and 9urplus Cmployees stock option %grants& out standing ,eposits 2orrowings 9ubordinated debt $ther liabilities and provisions Total Assets -ash and balance with 72* 2alance with banks *nvestments !dvances Fi"ed assets $ther assets Total

/A6.?B /,6;?.;B

0;B.AA 6,/;B.B?

/:.;B (,A;/.AA

A.A( ?6.B;

(.6: 0;,6;A.A= /,0;?.A/ =;;.;; =,/B=.BA HE0F@J1MM

;.60 0=,0:6./: 6,?B;.;( :;;.;; :,/=6.6= I<0HEM1@@

%(.;/& :,B6:.0B /,6A/.(B %(;;.;;& %(,;0/.:/& M0<EE1@<

%?;.06& (B.:: (;?.:: %(=.=?& %(=.6;& E<1IJ

/,:6(.BA (,((:.:? (B,/:=.?B (?,?66.:( =(=.B( (;0(./0 HE0F@J1MM

/,=:;.(0 (,A/0.A? (B,06B.A( /:,:==.0; ?;A.0/ (,00;.:? I<0HEM1@@

(;A.(: ?;A.0; B0.;/ ?,A/(.?B B(.6( /BB.06 M0<EE1@<

6./: A;.?A ;.6A 66.;A (6.A/ /B.;0 E<1IJ

Comparative .alance S%eet of ()'C .and &td 'or t%e ear ending F<st Marc% E@@I and E@@J
BRs &acsD Year ending F<st Marc% E@@I E@@J Increase> )ecrease Increase> )ecrease

BAmountsD B,ercentagesD

=A

Capital and &ia#ilities -apital 7eserves and 9urplus Cmployees stock option ,eposits 2orrowings 9ubordinated debt $ther liabilities and provisions Total Assets -ash and balance with 72* 2alance with banks *nvestments !dvances Fi"ed assets $ther assets Total /,=:;.(0 (,A/0.A? (B,06B.A( /:,:==.0; ?;A.0/ (,00;.:? I<0HEM1@@ 0,0;=.=( 0,=(/.0B /A,0B0.B= 0:,;=(./= A::.;A /,/??.;B KF0I@J1FM =:=.6A (,?AA.:/ B,;66.(: B,6B6.B= (6=.?= B6=.:/ EE0@KK1FM /6.?? BA.;= 6=.?6 0?.(0 /;.?( ?(.(6 HE1EM I<0HEM1@@ KF0I@J1FM EE0@KK1FM HE1EM %grants& ;.60 0=,0:6./: 6,?B;.;( :;;.;; :,/=6.6= ;.;? ::,?B=.A/ /,A:A.6A (,?;/.;; ?,A6B.6B %;.0=& (B,66/.:? %(,B0(.:0& (,/;/.;; /,:A:.;0 %A0.?/& :0.6A %6;.0/& /6;.6; 6B.(; out standing 6,/;B.B? 6,BA=.0B ??=.6/ (A.66 0;B.AA 0(0.(6 0./= (.;:

'indings from t%e comparative #alance s%eet of t%e ear E@@E AE@@F The comparative balance sheet of the bank reveals that during /;;0, there has been increased in fi"ed assets of 7s. (:?.6 lakhs i.e. 6/H and the subordinated debt outstanding as at <arch 0( /;;0 is a long term unsecured non#convertible debt aggregating 7s /;; cores of the year i.e. /;;/ 7s. *t was

=B

also /;;/ cores when it compare to the /;;/ and /;;0. and also included deposits and borrowings also has been increased in the year /;;0. 7eserves and surplus, there has been increased by 7s. 0;(.A? lakhs that is from (,==;.B( to (,B=/.?A lakhs i.e. (A.?H. The bank has made an appropriation from the profit and loss account balance of 7s. 0A.?= lakhs out of profit for the year ended <arch 0( /;;0 to general reserves and /A.AA lakhs in the year of /;;/. The cash balance with the 72*, it has been increased to A?;.?B lakhs in the year /;;0 i.e. ?(.B;H from the year /;;/ and also cash balance with banks and money at call and short notices has decreased to (,(:B.?= lakhs in /;;0 i.e. :(.=(H reduction from the year /;;/.

'indings from t%e comparative #alance s%eet of t%e ear E@@FAE@@H There has been increase of 7s AA.00 lakhs in fi"ed assets i.e. (=.?(H .The increase in fi"ed assets has been financed out of increase in owners fund by 7s /.?6 lakhs i.e. ;.B?H and subordinate debt by 7s 6;; lakhs i.e. /;;H

?;

increased in /;;6 from the year /;;0. The financing of increased in fi"ed assets out of owners fund and subordinate fund is a sound financial policy There has been increased in investments by 7s :A=A.?( lakhs i.e. 60.A0H in the year /;;6. The increased in long term investments has been financed out of increased in the long Qterm borrowed funds. The financing of long Q term investments by long term borrowed funds is also a good financial policy# deposits and borrowings. There has been an increase in reserves and surplus by 7s 666.0( lakhs i.e. //.=6 in the year /;;6. !s a result, the liquidity portion of the concern has improved in the year /;;6 to conclude, the financial portion of the concern is quite good.

'indings from t%e comparative #alance s%eet of t%e ear E@@HAE@@I This year comparative balance sheet of the bank reveals that during /;;:, there has been increase of 7s B(.6( lakhs in fi"ed assets i.e. (6.A/H. The increased in fi"ed assets has been financed through additional capital of 7s

?(

/:.;6 i.e. A.A(H and deposits and borrowing of 7s. :,B6: lakhs and /,6A/ lakhs i.e., (B.::H and (;?.::H respectively. The financing the increase in fi"ed assets through additional capital and deposits and borrowing is a sound financial policy. There has been substantial increase in advances by 7s ?,A/(.?B lakhs i.e., 66.;AH and investment are treated as long term investments there has been an increase of 7s lakhs i.e.. The increase in investment is a appreciable. There has been as increase of A;.?AH in cash with banks and 6./:H with 72*. -ash is an idle asset the means a huge cash balance is kept idle. There is an increase of 7s. (,A;/.AA lakhs in reserve i.e., ?6.B;H. This suggests that the profitability of the concern is good. financial position of the concern seems to be good. To conclude the

'indings from t%e comparative #alance s%eet of t%e ear E@@I AE@@J *n this comparative balance sheet of the company, there has been an overall increase of 7s. (6=.?= lakhs in fi"ed assets i.e., /;.(?H. The above increase in fi"ed assets has been financial through the raising of additional

?/

capital of 7s. 0./= lakhs i.e. (.;:H. Financing the increase in fi"ed assets through additional equity share capital is a sound financial policy. There is an increased 7s ??=.6/ lakhs in reserve created out of profit i.e. (A.66H. This is indicates not only the increased financial strength of the bank, but also the profitability of the operations. There has been increased in investments by 7s B,;66.(: i.e. 6=.?6H in the year /;;=. The increased in long term investment has been financed out of increased in the long term borrowed funds. The financing of long term investments by long#term borrowed and deposits is also a good financial positions. There has been increased in subordinate debt by 7s. (,/;/ lakhs i.e. /6;.(6H in the year /;;=. To conclude the overall financial position and the profitability of the concern are good.

CommonAsi5e .alance S%eet of ()'C .and &td 'or t%e ear ending F<st Marc% E@@E and E@@F
Year ending F<st Marc% E@@E BRs &acsD E@@F

?0

Amount

Amount

Capital and &ia#ilities -apital 7eserves and 9urplus Cmployees stock option %grants& out standing ,eposits 2orrowings 9ubordinated debt $ther Total Assets -ash and balance with 72* 2alance with banks *nvestments !dvances Fi"ed assets $ther assets Total EF0KLK1FL <@@ F@0HEH1@ <@@ (,/((.(? /,/6?.;/ (/,;66.;/ =,A(0.?/ 0?(.(A (,(6;.0: :.;B B.6: :;.6= /A.=: (.:= 6.?B /,;A(.B= (,;A?./= (0,0AA.;A ((,?:6.A= :/A.:A (,:A0.06 =.A6 0.:? 66.;; 0A.=: (.?6 :./; liabilities and provisions EF0KLK1FL <@@ F@0HEH1@ <@@ /A(.0? (,==;.B( B.;: (?,=:0.A( (,A/0.;/ /;;.;; /,(:B.// (.(A =.BA ;.;6 ?6.// ?.== ;.A6 B.;A /A/.; (,B=/.? =,B //,0?=.; /,;A6.= /;;.; 0,:((.= ;.B0 =.6: ;.;/ ?0.:: =.A: ;.== ((.:6

CommonAsi5e .alance S%eet of ()'C .and &td 'or t%e ear ending F<st Marc% E@@H and E@@I
Year ending F<st Marc% E@@H BRs &acsD E@@I

?6

Amount

Amount

Capital and &ia#ilities -apital 7eserves and 9urplus Cmployees stock option %grants& out standing ,eposits 2orrowings 9ubordinated debt $ther Total Assets -ash and balance with 72* 2alance with banks *nvestments !dvances Fi"ed assets $ther assets Total /,:6(.BA (,((:.:? (B,/:=.?B (?,?66.:( =(=.B( (;0(./0 HE0F@J1MM =.;; /.=6 6:.:/ 6(.B6 (.6= /.66 <@@ /,=:;.(0 (,A/0.A? (B,06B.A( /:,:==.0; ?;A.0/ (,00;.:? I<0HEM1@@ :.(: 0.:: 0?.=/ 6B.?( (.0A /.:B <@@ liabilities and provisions HE0F@J1MM <@@ I<0HEM1@@ <@@ /A6.?B /,6;?.;B (.6: 0;,6;A.A= /,0;?.A/ =;;.;; =,/B=.BA ;.=? :.=B ### ?(.AA :.6: (.6/ (6.AA 0;B.AA 6,/;B.B? ;.60 0=,0:6./: 6,?B;.;( :;;.;; :,/=6.6= ;.=; A.(B ### ?;.=B B.0( ;.B? (;./6

CommonAsi5e .alance S%eet of ()'C .and &td 'or t%e ear ending F<st Marc% E@@I and E@@J
Year ending F<st Marc% E@@I BRs &acsD E@@J

?:

Amount

Amount

Capital and &ia#ilities -apital 7eserves and 9urplus Cmployees stock option %grants& out standing ,eposits 2orrowings 9ubordinated debt $ther liabilities and provisions Total Assets -ash and balance with 72* 2alance with banks *nvestments !dvances Fi"ed assets $ther assets Total /,=:;.(0 (,A/0.A? (B,06B.A( /:,:==.0; ?;A.0/ (,00;.:? I<0HEM1@@ :.(: 0.:: 0?.=/ 6B.?( (.0A /.:B <@@ 0,0;=.=( 0,=(/.0B /A,0B0.B= 0:,;=(./= A::.;A /,/??.;B KF0I@J1FM 6.:; 6.B( 0A.=0 6?.?; (.(= 0.(; <@@ 0;B.AA 6,/;B.B? ;.60 0=,0:6./: 6,?B;.;( :;;.;; :,/=6.6= I<0HEM1@@ ;.=; A.(B ### ?;.=B B.0( ;.B? (;./6 <@@ 0(0.(6 6,BA=.0B ;.;? ::,?B=.A/ /,A:A.6A (,?;/.;; ?,A6B.6B KF0I@J1FM ;.60 =.?A ### ?:.B; 0.AB /.0/ (;.=A <@@

TRE+) A+A&YSIS <1 Total income

?=

The total income of the year /;;/ was /,;0=./6 loch and was increased to (//.:AH in the year /;;0, (6A.?:H in /;;6,(A0.B( in /;;:and /?6.BA in /;;=. When compared to base year the bank earning position was satisfactory. This income was earned from investment, interest>discount, advance>bills, interest on balance with 72* and other bank funds. These ma)or incomes to the bank and some other income as commission, e"change and brokerage, profit on sales of assets, profit on e"change transaction, etc. The bank total income of these years was satisfactory C%art <:

F@@ EI@ percentage E@@ <I@ <@@ I@ E@@E E@@F E@@H years E@@I E@@J

E1 ,rofit #efore )epreciation and Ta8

8rofit before ta" and depreciation in the year /;;/ was 6B6.6; lakhs. *t was increased to (0=H, (?;.A:H, //?.(6H and /AB.==H in the year /;;0,

??

/;;6, /;;: and /;;= respectively, when it compared to the base year /;;/. The earning position is satisfactory.

C%art E:

350 300 percentage 250 200 150 100 50 E@@E E@@F E@@H years E@@I E@@J

F1 +et profit
The net profit of the banking the year /;;/ was /B?.;6. *t was increased to (0;.6AH, (?(.:/H, //6.;=H, and /B0.(0H in the year /;;0, /;;6, /;;: and /;;= respectively, when it compared to the base year /;;/. This shows

?A

the financial strength of the bank and also growth of the 2ank in every year. !nd it attracts the share holders and other financial institutions to increase the financial position.

C%art F:

350 300 percentage 250 200 150 100 50 E@@E E@@F E@@H years E@@I E@@J

H1 )eposits and ot%er .orro4ings

,eposits and other 2orrowings were (B,6?=.;A during the year /;;/. *t increased to (/:.:BH, (=?.BAH, /((./:H and 0;(.(:H during the year /;;0, /;;6, /;;: and /;;=respectively, when it compared to the base year /;;/. *t

?B

is go on increasing as the company s earning position is good and is providing good service.

C%art H:
350 300 percentage 250 200 150 100 50 E@@E E@@F E@@H years E@@I E@@J

I1 Advances
!dvances of the bank, it was =A(0.?/ during the year /;;/. !nd *n /;;0, it was ((,?:6 i.e, (?/.:/H increase from the previous year and during /;;6 it was (?, ?66.:( i.e. increased to /=;.6/H. !nd then in /;;: it was

A;

/:,:==.0;, i.e. increased to 0?:.//H. in the year /;;= it increased to :(6.:?H i.e., 0:,;=( compared to the year /;;/.

C%art I:
550 500 450 400 percentage 350 300 250 200 150 100 50 E@@E E@@F E@@H years E@@I E@@J

J1 Investments
2anks invest their money to government securities, other approved securities, shares, debentures and bonds )oint ventures, units, certificates of deposits and others. *t invests (/,;;6.;/ during /;;0, and it was increased to

A(

(((.:0H, (=;.6/H, (=(.(BH, and /0=.:6H in the year /;;0, /;;6, /;;: and /;;= respectively, when it compared to the base year /;;/.

C%art J:

300 250 percentage 200 150 100 50 E@@E E@@F E@@H years E@@I E@@J

K1 'i8ed assets
Fi"ed assets was 0?(.(; lakhs in the year /;;/ and was increased to (6/.66H, (==./6H, (B;.A?H and /0;.6/H, during /;;0, /;;6, /;;: and /;;= respectively, when it compared to the base year /;;/. The fi"ed assets of the company have increased i.e. There is regular purchase of the required

A/

fi"ed assets when compared to base year. The company has to utilize all the fi"ed assets properly so that it will help in increasing sales and reduces blockage of capital.

C%art K:

300 250 percentage 200 150 100 50 E@@E E@@F E@@H years E@@I E@@J

L1 +et 4ort%
3et worth represent that the total share holder s fund, that included equity share holder s fund, reserves and surplus etc. the net worth of the year /;;/ was (,B:(.00 lakhs. Then it continuously increased to ((:H, (0AH, /06H and /?/H in the year /;;0, /;;6, /;;: and /;;= respectively, when it

A0

compared to the base year /;;/. The main reason for increased in net worth was tremendous growth in the profit of the bank. To conclude the b and earnings position, and financial position was satisfactory.

C%art L:
300 250 percentage 200 150 100 50 E@@E E@@F E@@H years E@@I E@@J

M1 Cas% #alances of t%e #an7

The bank has kept their cash balance with 72* and also other banks. 2alance has been maintaining by current accounts and other accounts with *ndian banks and also out side *ndian banks. The cash balance of the year /;;/ was 0,6:A.(B lakhs with both 72* and other banks but in the year /;;0 it

A6

has been decreased to B(.=H and it continuously increased to (;:H, (/BH and /;;H in the year /;;6, /;;: and /;;= respectively, when it compared to the base year /;;/. To conclude the bank financial position was good.

C%art M:
250 230 210 percentage 190 170 150 130 110 90 70 50 E@@E E@@F E@@H years E@@I E@@J

<@1 Total profit for appropriation

The profits was available for the appropriation to, they are statutory reserve, general reserve, capital reserve, investment fluctuation reserves proposed dividend etc. the profit for apportion was /B?.;6 in the year /;;/.

A:

Then it increased to (B?.BH, /B(.6H, 0=;H and =:BH in the year /;;0, /;;6, /;;: and /;;= respectively, when it compared to the base year /;;/.

C%art <@:

650 550 percentagd 450 350 250 150 50 E@@E E@@F E@@H years E@@I E@@J

Cas% flo4 Statement Anal sis

*nformation about the cash flow of an enterprise in useful in providing users of financial statements with a basis to the asses the ability of the enterprise to generate cash and cash equivalents and the needs of the enterprise to utilize those cash flows. The economic decisions that are taken by users

A=

require an evaluation of the ability of an enterprise to generate cash and cash equivalents and the timing and certain of their generations. The cash flow statement which classifies cash flows during the period from operating, investing and financing activities. T%e follo4ing terms are used in t%is statements 4it% t%e meaning specified0 -ash comprises cash on hand and demand deposits with banks. -ash and cash equivalents are short term, highly liquid investments that are readily convertible in cash and which are sub)ect to an insignificant risk o changes in value. -ash flow are inflow and outflows of cash and cash equivalents Cas% flo4 arising from t%e follo4ing activities0 t%e are Cas% flo4 from "perating activities: These are the principal

revenue producing activities of the enterprises and other activities which the operations of the enterprise have generated sufficient cash flows to maintain the operating capability of the enterprise, pay dividends, repay loans and make new investments without recourse to e"ternal sources of financing. Cas% flo4 from investing activities: These are the acquisition and

disposal of long term assets and other investments not included in cash equivalents. The separate disclosure of cash flows have been made for resources intended to generate future income and cash flows. Cas% flo4 from financing activities: These are the activities that

result in changes in the size and composition of the owner s capital %including preference share capital& and borrowings of the enterprise. This is an important activity than other activities because it is useful in predicting claims on future cash flows by providers of funds %both capital and borrowing& to the enterprise.

A?

'inancial enterprise ma #e reported on a net #asis are: -ash receipts and payments for the acceptance and repayment of deposits with a fi"ed maturity date The placement of deposits with and withdraws of deposits from other financial enterprises -ash advances and loans made to customer to customers and the repayment of the advances and loans. T%ese are all activities ma #e reported on a net #asis: -ash receipts and payments on behalf of customers when the cash flows reflects the activities of the customer rather than those of the enterprises and -ash receipts and payments for items in which the turnover is quick, the amounts are large and the maturities are short.

Cas% 'lo4 Statement for t%e Year ended F<st Marc% E@@E and E@@F
BRs &acsD

AA

,articulars
Cas% flo4s from operating activities 3et profit before income ta" !d)ustment forL ,epreciation and amortizations loan loss provisions C9$s compensation lapsed -ontingencies provision %8rofit&>'oss on sale of fi"ed assets

F<A@FAE@@E

F<A@FAE@@F

6/:.0A

:?;.A:

B:.(= A:.?? %:6& (6.;= A( =/;.=6

(=/./? AA.0B %(/& ### %(.;A& A/;.0( %(,60=.=0& %:,;/B.:0& /=(.=0 6,?//./= %6;0.(0& (,0(?.?B %??6.?6& %://.;6& %/0?.6?& BKIM1I<D F<A@FAE@@F

!d)ustment forL %*ncrease& in *nvestment %*ncrease& in !dvances *ncrease in 2orrowings *ncrease in ,eposits %*ncrease& in other assets net of opening deferred ta" *ncrease in $ther liabilities and provisions *ncrease in ,eposit 8lacements ,irect ta"ed paid +et cas% flo4 from operating activities %contd.& Cas% flo4 from investing activities 8urchase of fi"ed assets 8roceeds from sale of fi"ed assets 'ong term investments +et cas% used in investing activities %(=A./?& (;.(; %/.:;& B<J@1JKD %/:0.60& (.=B ### BEI<1KHD %6,A?:.:6& %/,/=/.A0& :B;.(/ :,BB:.?; %(A;./=& :/;.6/ ### 6;A./: %(6A.?;& EIM1II F<A@FAE@@E

AB

Cas% flo4s from financing activities 8roceeds from issue of shares abroad net of under# writing commission <oney receives on e"ercise of stock options by employees. ,ividend provided last year paid during the year ,ividend paid during the year on stock option e"ercised during the previous year +et cas% generated from financing activities +et increase>BdecreaseDin cas% and cas% LFI1KL /,=//.6( F0HIL1<M B<0@JF0K<D 0,6:A.(B E0FMH1HL (;./: %:0.=B& ### KFJ1M@ (?.BA %?;.06& %(;& BIE1HJD ?A;.06 ###

e;uivalents -ash and cash equivalents at (st !pril Cas% and cas% e;uivalents as at F<st Marc%

'indings on cas% flo4 statement from E@@E G E@@F The net profit %before ta"& has been increased to :?;.A: lacks in the year /;;0, from 6/:./A lacks in /;;/. the bank earnings position was satisfactory when it compare to the year /;;0 to /;;/ but the cash and cash equivalents position of the bank was low in the year /;;0 when it compare to the year /;;/ due to the, The net cash flow from operating activities has been negative value in

B;

the year /;;0. and The net cash used in investing activities has been negative value in both year but in /;;0 has shown more negative value than the year /;;/ and also The net cash generated from financing activities was 7s ?0=.B; lacks in the year /;;/ but in /;;0 it has shown negative value.

Cas% 'lo4 Statement for t%e Year ended F<st Marc% E@@Fand E@@H
BRs &acsD

,articulars
Cas% flo4s from operating activities 3et profit before income ta"

F<A@FAE@@F

F<A@FAE@@H

:?;.A:

?(A.B=

B(

!d)ustment forL ,epreciation and amortizations loan loss provision C9$s compensation lapsed -ontingencies provision %8rofit&>'oss on sale of fi"ed assets !d)ustment forL %*ncrease& in *nvestment %*ncrease& in !dvances *ncrease in 2orrowings *ncrease in ,eposits %*ncrease& in other assets net of opening deferred ta" *ncrease in $ther liabilities and provisions *ncrease in ,eposit 8lacements ,irect ta"ed paid +et cas% flo4 from operating activities %(,60=.=0& %:,;/B.:0& /=(.=0 6,?//./= %6;0.(0& (,0(?.?B %??6.?6& %://.;6& %/0?.6?& BKIM1I<D %:,BA(.:B& %=,;:(.A=& //0.(? A,;0/.?B =0:.;B /,=06.6; 6(A.// (,;::.?? %/A6.0B& KK<1FL (=/./? AA.0B %(/& ### %(.;A& A/;.0( /0;.6: (?A./A %6& (=.?; 6: (,(6:.::

%contd.& Cas% flo4 from investing activities 8urchase of fi"ed assets 8roceeds from sale of fi"ed assets +et cas% used in investing activities Cas% flo4s from financing activities 8roceeds from issue of subordinated debt Ta" on ,ividend <oney receives on e"ercise of stock options by employees. ,ividend provided last year paid during the year

F<A@FAE@@F

F<A@FAE@@H

%/:0.60& (.=B BEI<1KHD

%/(6.0B& /.6A BE<<1M<D

### ### (?.BA %?;.06&

6;;.;; %(;.AA& 6/.B( %A6.B:&

B/

,ividend paid during the year on stock option e"ercised during the previous year +et cas% generated from financing activities +et increase>BdecreaseDin cas% and cas% B<0@JF0K<D 0,6:A.(B E0FMH1HL M@J1II /,0B6.6A F0F@<1@F %(;& BIE1HJD ### FHK1@L

e;uivalents -ash and cash equivalents at (st !pril Cas% and cas% e;uivalents as at F<st Marc%

'indings on cas% flo4 statement from E@@F G E@@H *n these years the position of cash and cash equivalents has been increased during the year /;;6 to 0,0;(.;0 lacks from /,0B6.6A lacks in /;;0 and the profit %before ta"& was also increased to ?(A lacks in the year /;;6 from :?; lacks in/;;0. The reasons is the operating profit from the operating activities has been increased to ??(.?A lacks in /;;6. The net cash generated from financing activities also increased to 06?.;A lacks The net cash used in financing as well as investing activities in /;;0 shown all the negative value but it has been increased in the year /;;6, which is shown positive cash balance due to sufficient net cash flow from position has improved but it is note that such

B0

improvements were brought about due to availability of more net profit rather increased interest charges.

Cas% 'lo4 Statement for t%e Year ended F<st Marc% E@@H and E@@I
BRs &acsD

,articulars
Cas% flo4s from operating activities 3et profit before income ta" !d)ustment forL ,epreciation and amortizations loan loss provisions

F<A@FAE@@H

F<A@FAE@@I

?(A.B=

B?A.B6

/0;.6: (?A./A

0(A.(: (?=.//

B6

C9$s compensation lapsed %6& -ontingencies provision and provision for wealth ta" %8rofit&>'oss on sale of fi"ed assets B(.?; 6: (,(6:.:: !d)ustment forL %*ncrease& in *nvestment %*ncrease& in !dvances *ncrease in 2orrowings %:,BA(.:B& %=,;:(.A=& //0.(?

### =: %/(& (,6?0.?: %(=;.60& %?,B=(.(A& /,6A/.(B :,B6:.0B %/0/.?(& %(,(6=.=6& %0?=.6A& /0.AB %0?(.B:& BFHL1@JD F<A@FAE@@I

*ncrease in ,eposits A,;0/.?B %*ncrease& in other assets net of opening deferred ta" *ncrease in $ther liabilities and provisions *ncrease in ,eposit 8lacements ,irect ta"ed paid +et cas% flo4 from operating activities %contd.& Cas% flo4 from investing activities 8urchase of fi"ed assets 8roceeds from sale of fi"ed assets +et cas% used in investing activities Cas% flo4s from financing activities %7edemption&>8roceeds from issue of subordinated debt 6;;.;; %/(6.0B& /.6A BE<<1M<D =0:.;B /,=06.6; 6(A.// (,;::.?? %/A6.0B& KK<1FL F<A@FAE@@H

%/66./A& B: %/60.00&

%(;;.;;& (,/?6.?? ?=.0B %(;;.;:& %(0.;A& <0<FL1@F

8roceeds from !,7 issue ### <oney receives on e"ercise of stock options by employees. ,ividend provided last year paid during the year Ta" on ,ividend +et cas% generated from financing activities 6/.B( %A6.B:& %(;.AA& FHK1@L

B:

+et

increase>BdecreaseDin

cas%

and

cas% M@J1II /,0B6.6A F0F@<1@F IHJ1JH 0,0;(.;0 F0KH<1@@

e;uivalents -ash and cash equivalents at (st !pril Cas% and cas% e;uivalents as at F<st Marc%

'indings on cas% flo4 statement from E@@H G E@@I ,uring the year /;;: the cash and cash equivalent position has slightly increased from the year /;;6 that is 0,(B6.0= lacks to 0?6( lacks due to increased the net profit before ta" and also increased in the cash generated from financing activities. Cven though the cash flow from operating activities and also the cash used in investing activities has shown negative value but in has not effected to the cash earnings position of the bank. The main reason of cash out flow of the bank has been purchased of fi"ed assets but to proportionately increased in the net profit could not be bought about therefore further investment will have to be made with cautions

B=

Cas% 'lo4 Statement for t%e Year ended F<st Marc% E@@I and E@@J
BRs &acsD

,articulars
Cas% flo4s from operating activities 3et profit before income ta" !d)ustment forL ,epreciation and amortizations loan loss provisions -ontingency provision %8rofit&>'oss on sale of fi"ed assets

F<A@FAE@@I

F<A@FAE@@J

B?A.B6

(,/:0.:(

0(A.(: (?=.// =: %/(&

:(0.6( 6?B.?= 0; %/?&

B?

(,6?0.?: !d)ustment forL %*ncrease& in *nvestment %*ncrease& in !dvances *ncrease in 2orrowings *ncrease in ,eposits %*ncrease& in other assets net of opening deferred ta" *ncrease in $ther liabilities and provisions *ncrease in ,eposit 8lacements ,irect ta"ed paid +et cas% flo4 from operating activities %(=;.60& %?,B=(.(A& /,6A/.(B :,B6:.0B %/0/.?(& %(,(6=.=6& %0?=.6A& /0.AB %0?(.B:& BFHL1@JD

/,/6=.?( %B,0:;.0; %B,AAB.0:& %(,B0(.:0& (B,66/.:? %?0A.00& /,6B:.6B /.== /,/??.B/ %::0.?=& <0KEH1KJ

%contd.& Cas% flo4 from investing activities 8urchase of fi"ed assets 8roceeds from sale of fi"ed assets 'ong term investments +et cas% used in investing activities Cas% flo4s from financing activities 8roceeds > %7edemption&from issue

F<A@FAE@@I

F<A@FAE@@J

%/66./A& B: ### BEHF1FFD

%0=?.BB& :.(: %(B.(0& BFL<1MKD

of %(;;.;;& ?=.0B %(;;.;:& (,/?6.?? %(0.;A& <0<FL1@F IHJ1JH (,/;/.;; =/.:A %(6;.;?& ### %(B.=6& <0<@H1LK E0HHK1JJ

subordinated debt <oney receives on e"ercise of stock options by employees. ,ividend provided last year paid during the year 8roceeds from !,7 issue net of commission Ta" on ,ividend +et cas% generated from financing activities +et increase>BdecreaseDin cas% and cas%

BA

e;uivalents -ash and cash equivalents at (st !pril Cas% and cas% e;uivalents as at F<st Marc% 0,0;(.;0 F0KH<1@@ 0,?6(.;; J0<LL1JJ

'indings on cas% flo4 statement from E@@I G E@@J ,uring the year /;;= the position of cash and cash equivalent has proportionately increased from the year /;;:, it was 0,?6( lacks to =,(AA lacks. The main reasons for increased in the cash position that are, *ncreasing the net cash flow from operating activities and also proportionately increased in the net profit. 2ut the net cash used in investing activities has shown negative value and the cash generated from financing activities also decreased from the year /;;: to /;;=, it was (,(0A lacks to (,(;6.A? lacks. Cven though the net cash from financing activities decreased and investing activities has shown negative value but it has not affected to the cash earning position of the year /;;=. !nd the overall cash position of the year /;;= was satisfactory. Interpretation The directed policy of the bank is to be well appreciated for the reason that comp any has paid for dividend to equity share holders when it was making profits while the company had not paid any amount when it incurred a loss.

BB

The main reasons of cash outflow of the bank has been purchased of fi"ed assets but to proportionately increased in the net profit could not be brought about therefore further investment will have to be made with cautions. 8resent situation does not warrant any amount to be invested in the fi"ed assets rather aim of the company most be to utilize e"isting assets capacity to ma"imum while spreading up the recovery of debts. Finally the cash earnings position of the bank was satisfactory.

'I+)I+!S
!verage Duarterly balance for urban area are slight high for common people 8enetrating rural market *n the era where *ndia is witnessing emergence of eminent foreign banks, +,F- 2ank has still maintain its glory +,F- 2ank has e"celled in all the banking products starting from saving account and current account till the critical fields like investment and insurance +,F- 2ank possess a treasure of highly qualify and professionalized employees which helps the bank to e"cel in all the banking fields !ll the products are carefully hand picked and molded in order to meet the needs of its customers The bank success is reflected by its share price, which is ever increasing since the day of its commencement. +,F- 2ank is a blend of antiquity and modernity

(;;

&IMITATI"+ "' T(E STU)Y

The main limitation of the study is time constraints some other limitation as follows, The financial statements are prepared on the basis of historical costs or original costs. The value of assets decreases with the passage of time current price changes are not taken into account. The financial statements are e"pressed in monetary values, so they appear to give final and accurate position, but some times it does not give e"act position. The precision of financial statement data is not possible because the statements deal with natters which cannot be precisely stated. The bank wanted not to disclose some of the analysis carried on. +ence some of them are not included in this report. The study had to be fully dependent upon past financial statements as such it may fail to reflect the financial stand and capacity of the bank a near future. <ore emphasis has been laid on the accounting ratios as they reveal the trend over a period.

(;(

 ! conclusion from this analysis is not real indications of the efficiency of the management and hence requires further investigation. The balance sheet ratio cannot be fully relied upon as the balance sheet show the financial position as particular data. For the industrial average comparisons analysis the data were not available. ,ifference in definitions of basic concepts renders the comparison inaccurate. +ence ratio value might vary significantly. *n spite of all these limitation, study was grand success as it helped to improve the knowledge and give better e"perience and e"poses to factory practice and surrounding all the attempts have been made to make right type of interpretation and suggestion.

SU!!ESTI"+
!s the bank has already establish a good demand in the product, it should try to keep the same by developing the effective and efficient marketing strategies The bank should try and continue with the relation they are maintaining with their employees, because they are the biggest assets for the bank For better customer satisfaction, the bank should know the product and marketing strategies of its competitors 2ank should try to improve the reward system so as to motivate the employees +,F- 2anks can provide more !T< s and branches in different localities. The bank can increase its market share in *ndia s e"panding banking and financial services industry by following a disciplined growth strategy and delivering high quality customer service. The bank can service its customers

(;/

through multiple channels that are phoned 2anking, *nternet banking and mobile banking. *f the bank has to attract more customers and deal with more transactions, the bank can provide advances and loans to the general public for the following purposesL 'oan to small scale industries and cottage industries. 'oan to self#employed person or young entrepreneurs. *ncrease short#term deposits and long#term deposits by providing higher rate of interest. 8rovide the facilities of car loans.

C"+C&USI"+
The study is entitle 1! 9tudy of Financial 9tatement !nalysis of the +,F- 2ank 'imited5 has been undertaken with the ob)ective to analyze and interpret the bank s financial performance. *n general, the bank has achieved tremendous progress over the recent years. The bank has a healthy financial performance. The bank has been able to achieve heavy growth across multiple parameters, including customer s acquisition, geographical spread, business volumes and revenues. The +,F- 2ank 'imited is selling close to :; percent of its new consumer loan in smaller towns and under banked territories. *t has applied to the 7eserve 2ank of *ndia for a wholly owned non#banking Finance company for business in small towns and take on finance house run by foreign banks.

(;0

7ecently, +,F- 2ank managing director, !ditya 8uri has told that more than :; percent of the consumer lending is now from (6 cities of the country. *f things go forward, then this lending could go up by : percent. !lso more than :; percent of +,F- 2ank branches are now in semi urban bank or under bank regions. -urrent year bank is looking at 6:#:; percent of new branches. !n under bank region covers a population of over (= thousand people. *n recent years, private sector banks have been setting up branches in semi urban and rural areas where public sector banks have a strong presence. The present government is also keen that private banks set up shops in these areas.

.I.&I"!RA,(Y

'inancial Management A

,rasanna C%andra

'inancial ,lanning Anal sis and Control A ,1V1 /ul7arni 'inancial Mar7ets N Services A 'inancial Management A

/1 +attara$an I1M1 ,ande

Annual reports of ()'C .A+/ 6e#site: 4441%dfc#an71Com

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