Project Cash Flow Statement Analysis of AXIS Bank
Project Cash Flow Statement Analysis of AXIS Bank
Project Cash Flow Statement Analysis of AXIS Bank
INTRODUCTION OF BANK
Regional Banks in India are integral part of the rural credit structure of the country.
Since the very beginning, when the Regional Banks in India (RRBs) were established in October
2nd, 1975, these banks played a pivotal role in the economic development of the rural India. The
main goal of establishing regional rural banks in India was to provide credit to the rural people
who are not economically strong enough, especially the small and marginal farmers, artisans,
agricultural labors and even small entrepreneurs. Regional Rural Banks in India are an integral
part of the rural credit structure of the country. Since the very beginning, when the Regional
Rural Banks in India (RRBs) were established in October 2 nd 1975, these banks played a pivotal
role in the economic development of the rural India. The main goal of establishing regional rural
banks in India was to provide credit to the rural people who are not economically strong enough,
especially the small and marginal farmers, artisans, agricultural labors, and even small
entrepreneurs.
The Concept and The Brief History
The history of regional rural banks in India dates back to the year 1975. Its the
Narsimham committee that conceptualized the foundation of regional rural banks in India. The
committee felt the need of regionally oriented rural banks that would address the problems and
requirements of the rural people with local feel, yet with the same level of professionalism of
commercial banks. Five regional rural banks were set up on October 2 nd with a total authorized
capital of Rs.1 crore, which later augmented to Rs.5 crores.
There were five commercial banks, viz. Punjab National Bank, State Bank of India, Syndicate
Bank, United Bank of India and United Commercial Bank, which sponsored the regional rural
banks. The equities of rural banks were divided in a proportion of 50:35:15 among the Central
Government, the sponsor bank and the Concerned State Government.
The following years have not been so easy for the regional rural banks in India, as there
were major concern of financial viability. A number of committees were formed to find out
solution. Studies were conducted to find out the factors that influence RRBs performance. The
roles played by the sponsor banks were also analyzed.
FORMATION
The Govt. of India, in July 1975, appointed a working group to study in depth the
problem of devising alternative agencies to provide institutional credit to the rural people in the
context of steps then initiated under the 29 Point Economic Program. The Narsimham
Committee Conceptualized the creation of RRBs in 1975 as a new set of regionally oriented rural
1
banks, which would combine the local feel and familiarity of rural problems characteristic of
cooperatives with the professionalism and large resource base of commercial banks. The
Government of India promulgated the Regional Rural Banks Ordinance on 26 th September 1975,
which was later replaced by the Regional Rural Bank Act 1976.
OBJECTIVES
The RRBs have following objectives:
To develop rural economy.
To provide credit for agriculture and allied activities.
To encourage village industries, artisans, carpenters, craftsmen, etc.
To reduce dependence of weaker sections on money-lenders.
To identify a specific and functional gap in the present institutional structure.
To supplement the other institutional agencies in credit delivery to rural areas,
To make backward and tribal areas economically better by opening new branches.
Every RRBs is authorized to carry on to transact the business of
banking as defined in the Banking Regulation Act and may also engage in other business
specified in Section 6(1) of the said Act. In particular, a RRB is farmers and agricultural laborers,
whether individually or in groups, and to cooperative societies, including agricultural marketing
societies, agricultural processing societies, cooperative farming societies, primary agricultural
credit societies or farmers service societies, primary agricultural purposes or agricultural
operations or other related purposes, and granting loans and advances to artisans, small
entrepreneurs and persons of small means engaged in trade, commerce, industry or other
productive activities, within its area its area of operation.
The Reserve Bank of India has brought RRBs under the ambit of priority sector lending on par
with the commercial banks. They have to ensure that forty percent of their advances are
accounted for the priority sector. Within the 40% priority target, 25% should go to weaker
section or 10% of their total advances to go to weaker section.
CAPITAL STURCTURE
Their equity is held by the Central Government, concerned State Government and the Sponsor
Bank in the proportion of 50:15:35. A Regional Rural Bank is jointly owned by the Govt. of
India, the Government of concerned state and public sector bank, which sponsored it. Each bank
carries the banking business within the local limits specified by the Govt. Notification.
ORGANISATIONAL STRUCTURE
The management of a RRB is vested in a nine-member Board of Directors headed by chairman
who is an officer deputed by a sponsor bank but appointed by the Govt. of India. Three directors
to be nominated by the central Government. Two directors to be nominated by the sponsor bank.
The sponsor bank, besides subscribing to the capital and deputing
one of its official as chairman, provides assistance to RRB in several ways as financial
accommodation, deputing managerial and other staff and arranging the recruitment of staff and
their training.
Role of Regional Rural Banks in Economic Development
The importance of the rural banking in the economic development
of a country cannot be overlooked. As Gandhiji said Real India lies in villages and village
economy is the backbone of Indian economy. Without the up liftment of the rural economy as
well as the rural people of our country, the objectives of economic planning cannot be achieved.
In fact, the real growth of Indian economy lied in the emancipation of rural masses from acute
poverty, unemployment, and socio-economic backwardness. Keeping this end in view, various
important plans and programmers of rural development have been conceived and implemented
by the government of India since the commencement of first five-year plan from 1951-56. But an
appraisal of the achievement of these programmers clearly reveals that many programmers failed
to achieve the desired objectives due to the backward economic condition and lack of adequate
finance to the poor people in the rural areas. Hence, bank and other financial institutions are of
vital importance for development of rural economy of a country. The present study is a modest
attempt to make an appraisal of the credit needs of the rural people and the way Regional Rural
meet the same in the state of Arunachal Pradesh. It deals with the performance evaluation of
Arunachal Pradesh. Rural Bank (APRB) for the economic development of the state. Further, an
attempt has also been made to study the growth and performance of Scheduled Commercial
Banks with special emphasis on Regional Rural Banks (RRBs) in India and North-East Region.
Mar '07
4
Mar '08
Mar '09
Mar '10
Mar '11
12 mths
12 mths
12 mths
281.63
281.63
0.00
0.00
3,120.58
0.00
3,402.21
58,785.60
5,195.60
63,981.20
5,873.80
73,257.21
Mar '07
357.71
357.71
2.19
0.00
8,410.79
0.00
8,770.69
87,626.22
5,624.04
93,250.26
7,556.90
109,577.85
Mar '08
359.01
359.01
1.21
0.00
9,854.58
0.00
10,214.80
117,374.11
10,185.48
127,559.59
9,947.67
147,722.06
Mar '09
12 mths
12 mths
12 mths
Assets
Cash & Balances with RBI
4,661.03
7,305.66
9,419.21
9,473.88 13,886.16
2,257.27
5,198.58
5,597.69
5,732.56
Advances
Investments
Gross Block
Accumulated Depreciation
Net Block
Capital Work In Progress
Other Assets
Total Assets
36,876.48
26,897.16
1,098.93
450.55
648.38
24.82
1,892.07
73,257.21
59,661.14
33,705.10
1,384.70
590.33
794.37
128.48
2,784.51
109,577.84
81,556.77
46,330.35
1,741.86
726.45
1,015.41
57.48
3,745.15
147,722.06
104,343.12142,407.83
55,974.82 71,991.62
2,107.98 3,426.49
942.79 1,176.03
1,165.19 2,250.46
57.24
22.69
3,901.06 4,632.12
180,647.87242,713.37
Contingent Liabilities
Bills for collection
Book Value (Rs)
55,993.04
11,751.83
120.80
78,028.44
16,569.95
245.13
104,428.39
29,906.04
284.50
296,125.58429,069.63
35,756.32 57,400.80
395.99
462.77
12 mths
12 mths
405.17
410.55
405.17
410.55
0.17
0.00
0.00
0.00
15,639.27 18,588.28
0.00
0.00
16,044.61 18,998.83
141,300.22189,237.80
17,169.55 26,267.88
158,469.77215,505.68
6,133.46 8,208.86
180,647.84242,713.37
Mar '10 Mar '11
12 mths
12 mths
7,522.49
CHAPTER II
COMPANY PROFILE
Banking in India originated in the last decade of the 18 th century. The oldest bank in
existence in India is the State Bank of India , a government owned bank that traces its
origins back to June 1806 and that is the largest commercial bank in the country. Central banking
is the responsibility of the Reserve Bank of India, which in 1935 formally took over these
responsibilities from the Imperial Bank of India, relegating it to commercial banking functions.
After Indias independence in 1947 the Reserve Bank of India was nationalized and given
broader powers. In 1969 the government nationalized the 14 largest commercial banks, and again
6 next in 1980.
EARLY HISTORY
Banking in India originated in the last decades of the 18 th century. The first banks were
The
General Bank of India which started in 1786, and The Bank of Hindustan, both of which are
now defunct. The oldest bank in existence in India is the State Bank of India, which originated
in Calcutta in JUNE 1806, which almost immediately became the Bank of Bengal. This was one
of the three presidency bank, the other two being the Bank of Bombay and the Bank of
Madras, all three of which were established under charters from the British East
India Company. For many years the Presidency banks acted as quasi-central banks, as did their
successors.
The three banks merged in 1925 to form the Imperial Bank of India, which upon Indias
independence, became the State Bank of India.
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a
consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and
still functioning today, is the oldest Joint Stock bank in India.
10
It was not the first though. That honour belongs to the Bank of Upper India, which was
established in 1863, and which survived until 1913, when it failed, with some of its assets and
liabilities being transferred to the Alliance Bank of Shimla
Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire
d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;
branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself in
Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the
British Empire, and so became a banking centre.
The first entirely Indian joint stock bank was the Oudh Commercial Bank,
Established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank,
established in Lahore in 1895, which has survived to the present and is now one of the largest
banks in India.
Around the turn of the 20th Century, the Indian economy was passing through a relative period
of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial
and other infrastructure had improved. Indians had established small banks, most of which
served particular ethnic and religious communities.
NATIONALISATION
The next significant milestone in Indian Banking happened in the late 1960s when the Indira
Gandhi government nationalized, on 19th July, 1969, 14 major commercial Indian banks,
followed by nationalization of 6 more commercial Indian banks in 1980. The stated reason for
the nationalization was more control of credit delivery. After this, until the 1990s, the
nationalized banks grew at a leisurely pace of around 4%-also called as the Hindu growth of
the Indian economy.
To understand the Indian banking sector more easily a diagram is shown regarding the name of
the bank, its numbers shown in
11
BACKGROUND
Axis Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted
jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life
Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and
other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India
Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance
Company Ltd.
12
The Bank today is capitalized to the extent of Rs. 359.44 corers with the public holding (other
than promoters) at 57.74%.
The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The
Bank has a very wide network of more than 838 branches and
Extension Counters (as on 31st May 2009). The Bank has a network of over 3674 ATMs (as on
31st May 2009) providing 24 hrs a day banking convenience to its
customers. This is one of the largest ATM networks in the country.
The Bank has strengths in both retail and corporate banking and is committed to adopting the
best industry practices internationally in order to achieve excellence.
MISSION AND VALUES
Mission of Axis Bank
Customer Service and Product Innovation tuned to diverse needs of individual and
corporate clientele.
Continuous technology up gradation while maintaining human values.
Progressive globalization and achieving international standards.
Efficiency and effectiveness built on ethical practices.
Core Values of Axis Bank
Customer Satisfaction through
Providing quality service effectively and efficiently
"Smile, it enhances your face value" is a service quality stressed on
Periodic Customer Service Audits
Maximisation of Stakeholder value
Success through Teamwork, Integrity and People.
PROMOTERS
13
Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the country,
UTI. The Bank was set up with a capital of Rs. 115 corers, with UTI contributing Rs. 100 corers,
LIC - Rs. 7.5 corers and GIC and its four subsidiaries contributing Rs. 1.5 corers each.
The company reported revenues of (Rupee) INR 108,291.13 million during the
fiscal year ended March 2009, an increase of 54.59% over 2008. The operating
profit of the company was INR 36,801.90 million during the fiscal year 2009, an
increase of 42.35% over 2008. The net profit of the company was INR 18,129.32 million during
the fiscal year 2009, an increase of 71.17% over 2008.
Axis bank offers banking and financial services in India. The companys services and Brands
include the following:
Services:
Personal Banking:
Accounts
Deposits
14
Loans
Cards
Investments
Insurance
Payments
Other Services
Corporate Banking:
Accounts
Credit
Capital Market
Treasury
Cash Management Services
Govt Business
NRI services:
Accounts
Deposits
Remittances
15
BOARD OF DIRECTORS
Director
Director
Director
Director
Director
Director
Director
Shri K. N. Prithviraj
Director
16
CHAPTER III
METHODOLOGY AND MODEL OF RESEARCH
STATEMENT OF THE PROBLEM
Banks are the main financial sources to the public. They are the providers and
mobilizes of the finance from the public. But they are facing different problems such as
dissatisfaction of customer regarding banking services, improper cash management financial
performance and the like. Among these problems faced by RRBs Cash management is very
important technique to be adopted in any bank. Hence, this study concentrates on cash flow
analysis of AXIS BANK HANUMAN TEKDI BRANCH HYD.
OBJECTIVES OF STUDY
The main intension of this study is to analyze the financial position of the AXIS BANK
HANUMAN TEKDI BRANCH HYD. The following are the main objectives for the study:
The data for the present study is collected through primary and secondary sources.
Secondary data is obtained from annual reports of the company and primary data was collected
by interacting financial executives of The Company.
Primary Data
The primary data of this study was colleted by consulting the accounting officer,
financial Executives of that bank.
Secondary Data
The study is mainly based on the sources of secondary data. The secondary data for
this study was collected from the published sources i.e., annual reports and
WWW.APGBANK.COM
SCOPE OF THE STUDY
The present study is confined to only AXIS BANK HANUMAN TEKDI BRANCH
HYD. The study is limited to cash flow analysis and it has been analyzed by taking the
information related to both the present and past data into consideration with reference to the
performance of the bank.
PERIOD OF STUDY
TOOLS FOR THE STUDY
The data relating to the performance of he AXIS BANK HANUMAN TEKDI
BRANCH HYD. from different activities that is operating activities, investing activities and
financing activities have been carefully analyzed and also cash flow statement, column and bar
charts.
LIMITATIONS OF STUDY
The major limitations of the study are:
Due to constraint of time, the researcher unable to collect detailed analysis of the
financial data.
There are differences in collected data as of data collected from different secondary
sources.
Finance is also an important constraint for the detailed analysis.
18
CHAPTER IV
CASH FLOW STATEMENT ANALYSIS
INTRODUCTION
An analysis of cash flow of a concern during a specified period, presented in the form of a
statement can be for the past or can be a projection for the past or can be projection for the
future. The cash flow of the concern in the near future, say for a period of six months or in year,
can be prepared based on the past trends and expectations of the concern regarding factors that
would affect its cash receipts and cash payments. Such an estimate of future cash flows is better
termed cash budget. Cash flow statement generally refers to the statement showing the receipts
and payment or cash during the period covered by two consecutive balance sheet.
Cash flow analysis enables the management to plan and co-ordinate the financial
operations of the enterprise, an furnish the basis for evaluating financing policies. It provides a
barometer for ensuring the profitability of the business, and makes financing problems of the
business much more manageable.
CASH FLOW MANAGEMENT
Cash flow management is the process of monitoring, analyzing, and adjusting businesss
cash flows. The most important aspect of cash flow management is avoiding extended cash
shortages, caused by a time gap between cash inflows and outflows. Firm cannot stay in business
if it is not able to pay its bills on time. Therefore, a cash flow analysis is required on as regular
basis so that so that it can take the necessary steps to meet cash flow problems. Today, even in
the large business organizations cash is mot as readily available as it was before, so companies
are looking into ways to gain better visibility into future cash flows and to monitor it for better
planning. There is a growing need for companies to forecast more accurately because in addition
to tightened cash flow, there is an increasing need for timely forecasts as market conditions have
become volatile. One of the best way to manage cash in the business is to fully understand cash
flow patterns. These helps a firm in avoiding cash deficiencies as well as excessive idle cash
balances. Moreover, cash flow analysis is needed:
To ensure that the cash balance always remains above the desired minimum level
To predict when cash levels will rose sufficiently above the minimum level to
facilitate investment of idle balances.
GEORGE PHILIPATOS is of the view that, in its generic sense, a cash flow is the
receipt and the payment of amount of money and that it implies more than our accrual
or a financial obligation, hence cash flow is a movement of cash which is a real one. L
Leon Simons observes that cash flow is frequently and erroneously assumed to include
only current operations.
CASH FLOW CONCEPTS
19
In its simplest form, cash flow is the movement of money in and out of the
business uses cash to generate goods or services for the sale to its customers, collects
the cash from the sales, and then completes this cycle all over again.
CASH INFLOWS
Cash Inflows are the movement of money into the business. Inflows are most
likely from the sale of goods or services to the customers. If credit extended to its
customers, then an inflow occurs as the firm collects on the customers accounts.
Normally the main sourced of cash inflows to a business are receipts from sales,
increases in bank loans, proceeds if share issues and asset disposals, and other income
such as interest earned.
CASH OUTFLOWS
Cash Outflows are the movement of money out of the business. Outflows are
generally the result of paying expenses. If the business involves reselling goods, then its
largest outflow is of the purchases of raw materials and other components needed for
the manufacturing of the final product. Salaries and wages to staff, purchasing fixed
assets, and paying accounts payable are also cash outflows.
NET CASH FLOWS
Net Cash Flow is the difference between the inflows and outflows within a
given period. A projected cumulative positive net cash flow over several period
highlights the capacity of a business to generate surplus cash and, in the same manner, a
cumulative negative cash flow indicates he amount of additional cash required to
sustain the business.
FREE CASH FLOWS
Some financial analysts give much importance to concept of cash flow called Free
Cash Flow. The cash is considered free if it can be used for any desirable purpose. The
large is the amount, the more a firm has flexibility and investment strength because it
can use the money immediately to take advantage of an opportunity. The accumulation
of free cash comes from free cash flows which are calculated as cash flow from
operations, less capital expenditure for ongoing production needs and payment of
dividends. Free cash may be accumulating in liquidity but it is not intended to be used
for financing working capital requirement. Instead, it is used for long-term purposes
such as capital budgeting expenditure on asset, mergers, acquisitions etc.
DEFINITIONS:
The following are used in this statement with the meaning specified:
Cash comprises cash on hand and demand deposits with banks
20
Cash equivalents are short-term highly liquid investments, that are readily
convertible into know amounts of cash and which are subject to an insignificant
risk of changes in value.
Cash flows are inflows and outflows of cash and cash equivalents.
Operating activities are the principal revenue-producing activities of the
enterprise and other activities and are not investing or financing activities.
Investing activities are the acquisition and disposal of long-term assets and other
investments not included in cash equivalents.
Financing activities are activities that result in changes in the size and
composition of the owners capital (including preference share capital in the
case of a company) and borrowings of the enterprise.
21
The profit and loss account focuses on net income determination from operating activities.
However, it does not show cash inflow and outflow relating to operating activities because the
profit and loss account is prepared on accrual basis. In preparing profit and loss account,
revenues are recorded even though cash for them has not been received. Similarly, expenses are
recorded even though they may not been paid. Therefore, to find cash flows from operations, one
need to convert accrual basis income statement figures to cash basis making adjustments. By
way of adjustments, earned revenues will be converted into cash received from sales or
customers and incurred expenses will be converted into cash expended, i.e., expenses actually
pain to cash.
23
Investing Activities:
The separate disclosure of cash flows arising from investing activities is important because
the cash flows represent the extent to which expenditures have been made for resources intended
to generate future income and cash flows. Example of cash flows arising from investing are:
Cash payments to acquire fixed assets (including intangible). These payments include
those relating to capitalized research and development cost and self-constructed fixed
assets.
Cash receipts from disposal of fixed assets.
Cash payments to acquire share. Warrants or debt instruments of other enterprises and
interests in joint ventures.
Cash receipts from disposal of shares, warrants or debt instruments of other enterprises
and interests in joint ventures.
Cash advances and loans made to third parties.
Cash receipts from the repayment to advances and loans made to third parties.
Cash payments for futures contracts, forward contracts and swap contracts except when
the contracts are held for dealing or trading purposes or the payment are classified as
financing activities and
Cash receipts from futures contracts, forward contracts, option contract, swap contracts
except when the contracts are held for dealing or trading purposes, or the receipts are
classified as financing activities.
When a contract is accounted for as a hedge of an identifiable position, the cash flows of the
contract are classified in the same manner as the cash flows of the position being hedged.
Financing Activities:
The separate disclosure of cash flow arising from financing activities is important because
it is useful in predicting claims on future cash flows by providers of funds to enterprise.
Examples of cash flows arising from financing activities are:
24
Thought this format calls for more details. It provides useful information on how cash
flows have been influenced by different kinds of decisions. Given the greater
informational content of such a format, the discussion paper on cash flow statement
prepared by the accounting principles board of the institute of chartered accountants of
India recommends this format. Incidentally the listed companies must include a cash
flow statement prepared according to the format suggested in the discussion paper in
their annual reports.
Format of a cash flow statement
Cash flow statement
For the year ending on.. Balance as on 1-1-2000
---------------------------------------------------------------------Cash balance
Bank balance
..
Add: Sources of cash
Issue of shares
.
Raising of long term loans
..
Sale of fixed assets
.
Short-term operations:
Cash from operations
.
Profit as per profit and loss account
.
Add/less: Adjusted for non-cash items
Total applications
Closing balance
Cash balance
Bank balance
....
26
27
CHAPTER V
DATA ANALYSIS AND IMPLEMENTATION
NET CASH FLOW
The total cash flow can be calculated by adding operating, investing and financing
activities of the bank.
Total cash flow = operating + financing + investing activities
The total cash flow is being described in the table per the period of 5 years from 20112007
Mar-10
Mar-09
Mar-08
Mar-07
Net cashflowoperating
activity
11,425.07
28.87
10,551.63
5,960.45
5,295.53
-13,985.33
-5,122.98
-9,741.96
-4,702.52
-3,655.58
8,769.69
5,304.07
1,692.32
4,325.79
1,637.01
28
Interpretation:
This can be calculated by taking total operating, investing and financial activities. This
shows that in the year 2010 the total cash flow will be increased from Rs.1271529 to
Rs.4090303. This shows that the bank had spent fewer amounts for expense.
Total Liabilities
Total Assets
Total Income
Mar-11
73,257.21
73,257.21
155838.03
Mar-10
109,577.85
109,577.84
137323.64
Mar-09
147,722.06
147,722.06
88008.04
Interpretation
There can be calculated by taking net profit minus increase/decrease assets and liabilities. This
shows that in the years 2008 and 2010, negative values will occur. For this purpose, there is a
mutual increase and decrease
30
YEAR
ENDED
2007
2008
2009
2010
2011
CASH
CASH
IN
OUT
CASH FROM INVESTING
FLOW FLOW
ACTIVITY
11,425.07
-13,985.33
8,769.69
28.87
-5,122.98
5,304.07
10,551.63
-9,741.96
1,692.32
5,960.45
-4,702.52
4,325.79
5,295.53
-3,655.58
1,637.01
31
Interpretation:
This can be calculated by taking Cash inflow and Cash Outflow. This shows that the bank
has spent fewer amounts for purchasing the assets, so there is a decrease in 2009-10 when
compared to 2007-08.
Total Financing Activities
In this activities can be calculated by taking the financial activity.
This can be show in the table for the year 2006-2010.
Total financing activities
Net financial
income
BORROWINGS
2009
171696
876969
2010
155199
530407
2011
562404
169232
32
Interpretation:
This graph shows that the bank borrowing position. This shows that the bank had decreased to
money from others. So the position is good in the bank.
Net profit:
The net profit can be calculated by taking total income and total expenses.
Net profit = Total income Total expenses
Total income = Interest expended + other expenses
NET PROFIT
TOTAL
TOTAL
NET
INCOME EXPENSES PROFIT
2009 155838.03
151781.7
4056.33
2010 137323.64 109468.85 18153.58
2011 88008.04
71545.25
10710.29
Interpretation:
This can be calculated by taking total income and total expended.
This shows that the bank can earn more profit in 2008 and 2010. This shows that the bank can
spend more expenses in that years and the profit position will be decreased.
33
APPENDICES
34
Particulars
CASH FLOW FROM OPERATING ACTIVITIES
Interest Earned during the year
Other income
Less:
Interest paid during the year on deposits, borrowings etc.,
Operating Expenses including Provision & Contingencies
NET PROFIT
Add:
Depreciation on Fixed Assets
Depreciation adjusted on leased assets
Provisions & Contingencies
I
CASH PROFIT GENERATED FROM OPERATIONS
(Prior to changes in operating Assets & Liabilities
II CASH FLOW FROM OPERATING ASSETS & LIABILITIES
Increase/(Decrease) in Liabilities
Deposits
Other Liabilities and Provisions
(Increase)/Decrease in assets
Advances
Investments
Other Assets
Total of II
A. NET CASH FLOW FROM OPERATING ACTIVITIES(I+II)
B. CASH FLOW FROM INVESTING ACTIVITIES
Sale/Disposal of Fixed Assets
1337
-49892
B.
-48555
C.
3175171
310780
1607363
973680
20605
925513
4442850
1310379
-5901723
-741844
-332390
-1222728
297215
Share Capital
Share premium
Other Reserves & Surplus
Borrowings
1617299
35
C.
1617299
1271529
1680083
2522384
Total I
II
4202467
2407030
3066966
Total II
5473996
1271529
(Amount in 000s)
SHEET 2008-09
2009-10
423426
4191468
23678077
5935922
1419557
423426
5096376
28120927
7553221
2729936
Total
35648450
Assets
Cash and Balance with RBIs
1680083
Balance with banks and money at call
and short notices
2522384
Investments
6020381
Net advances
23471434
Fixed assets
52032
Other assets
1902116
43923886
Total
43923886
35648450
36
240730
3066966
6762225
29373177
79982
2234506
Contingent liabilities
103999
155023
2008-09
2009-10
Income
Interest Earned
Other income
2808486
259653
3175171
310780
Total
3485951
3068139
Expenditure
Interest expended
Operating Expenses
Provision and Contingencies
Profit
1150059
985922
56044
1607363
950101
23578
876114
904909
3485951
3068139
Total
37
3876666
Other income
322676
Less:
Interest paid during the year on deposits, borrowings etc.,
2224977
1214811
NET PROFIT
759554
Add:
Depreciation on Fixed Assets
29354
-250000
538908
38
ended
II
2256149
-1025393
(Increase)/Decrease in assets
Advances
-1067158
Investments
-630611
Other Assets
740446
Total of II
273433
A.
812341
B.
2261
-57375
B.
-55114
C.
365274
365274
1122501
2407030
39
3066966
Total I
II
5473996
1872135
4724362
Total II
6596497
1122501
(Amount in 000s)
Particulars
2009-10
Capital and Liabilities
Share capital
423426
Reserve and surplus
5096376
Deposits
28120927
Borrowing
7553221
Other liabilities and provision
2729936
Total
43923886
Assets
Cash and Balance with RBIs
240730
Balance with banks and money at
call and short notices
3066966
Investments
6762225
Net advances
29373177
Fixed assets
79982
Other assets
2234506
Total
43923886
Contingent liabilities
155023
40
2010-11
423426
6672809
35173369
11808394
1725141
55803139
2511725
8175075
8926999
35052791
95390
1041159
55803139
116768
2009-10
2010-11
3175171
310780
3068139
4463958
412900
4876858
1607363
950101
and 23578
2442690
1165992
201297
904909
3068139
2148449
4876858
41
Mar ' 10
Mar ' 09
Mar ' 08
Mar ' 07
5,135.66
3,851.36
2,785.19
1,646.27
996.24
11,425.07
28.87
10,551.63
5,960.45
5,295.53
-13,985.33
-5,122.98
-9,741.96
-4,702.52
-3,655.58
8,769.69
5,304.07
1,692.32
4,325.79
1,637.01
6,204.75
189.54
2,512.66
5,585.94
3,276.46
15,203.91
15,016.90
12,504.24
6,918.31
3,641.84
42
Mar ' 11
Cash and equivalnt end of year
21,408.66
Mar ' 10
15,206.44
CHAPTER VI
43
Mar ' 09
15,016.90
Mar ' 08
12,504.24
Mar ' 07
6,918.31
FINDINGS
The major findings and conclusions of the study are:
Of the bank Income is increased from Rs.34,85,951 to Rs.41,99,342 thousands. So, the
maintenance is good in the bank.
Interest on deposits and borrowings and other expenses also increased from 2008-09 to
2009-10 Rs.25,81,043 to Rs.34,39,788 thousands. So, it pays more interest to the
depositors.
Net profit of bank is increased in the study period that is Rs.20,605 to Rs.29,354
thousands
Investment is also decreased from year to year i.e., Rs.7,41,844 to Rs.6,30,611 thousands.
Advances also decreased from Rs.59,01,723 to Rs.10,67,158 thousands.
Total cash flow from operating activities is Rs.12,22,728 to Rs.2,73,433.
The bank can purchase the fixed asset and they are increased from Rs.49, 892 to
Rs.57,375 crores and the sale of asset will be increased from Rs.1,337 to Rs.2,265
thousands so the investing activity will be increased from previous year to current year.
Financing activities will be maintained in a good way that is Rs.16, 17,299 to Rs.3,65,274
thousands.
The maintenance of cash and balance with RBI from opening and ending of the year will
be good. So, the maintenance of cash from opening and closing is increased from
Rs.42,02,467 to Rs.54,72,996 in 2008-09 and Rs.5,47,399 to Rs.65,95,497 in 2009-10.
SUGGESTIONS
The following are the suggestions suggested for the smooth running of the bank:
The bank should try to reduce the expenses on purchasing the fixed assets because it
decreases the profit.
The bank shall increase the investment position by issuing shares and debenture and
the bonds of the MNCs.
The bank has to implement online technology and various services to their customer.
The bank has to provide more agriculture and small business loans to all sectors of
the society as to increase the employment of the pupil.
The bank expanded their branches more and more in the district particularly and in
India in general.
44