INTRODUCTION GENERAL INTRODUCTION Finance is the life-blood of business. It is rightly termed as the science of money. Finance is very essential for the smooth running of the business.
Finance controls the policies, activities and decision of every business. Definition Finance is that business activity which is concerned with the organization and conversation of capital funds in meeting financial needs and overall objectives of a business enterprise.- Wheeler Financial management is that managerial activity which is concerned with the planning and controlling of a firm financial reserve.
Financial management as an academic discipline has undergone fundamental changes as regards its scope and coverage. In the early years of its evolution it was treated synonymously with the raising of funds. In the current literature pertaining to this growing academic discipline, a broader scope so as to include in addition to procurement of funds, efficient use of resources is universally recognized.
Financial analysis can be defined as a study of relationship between many factors as disclosed by the statement and the study of the trend of these factors. The objective of financial analysis is the pinpointing of strength and weakness of a business undertaking by regrouping and analyzing of figures obtained from financial statement and balance sheet by the tools and techniques of management accounting. Financial analysis is as the final step of accounting that result in the presentation of final and the exact data that helps the business managers, creditors and investors.
Based on this reasoning, this project is an attempt to analyze the financial performance of SRIRAM HOUSING FINANCE. In the financial analysis a ratio is used as an index for evaluating the financial position and performance of the firm. The absolute accounting figures reported in the financial statement do not provide a meaningful understanding of the performance and the financial position of a firm.
But the accounting figures convey the meaning when it is related to some other relation information for example Rs.5 crores net profit may look impressive, but the firms performance can be said good or bad only when net profit figures is related to the firms investment. Accounting ratios are relationships expressed in the mathematical terms between figures that are connected with each other in the some manner .the information contained in the balance sheet, profit and loss account or the income statements are used by the management, creditors investors and others to form judgment about the operating performance and the financial strengths and weaknesses of the firm if we properly analysis the information reported in the statement. INDUSTRY PROFILE The organized banking system in India is broadly divided into three categories, i.
e. the central bank known as the Reserve bank of India, the commercial banks and the co-operative banks. The reserve bank of India is the supreme monetary and banking authority in the country and has the responsibility to control the banking system in country, it is known as the RESERVE BANK as it keeps the reserve of all commercial banks. Banking regulation act of India, 1949 defines banking as accepting. For the purpose of lending or investment of deposits of money form the public, repayable on demand or otherwise and withdrawal by cheques, draft, and order Most of the activities a bank performs are derived form the above definition. In addition, Banks are allowed to perform certain activities, which are ancillary to this business of accepting deposits and lending. A banks relationship with the public therefore revives around accepting deposits and lending money.
Another activity, which is assuming increasing importance, is transfer of money-both domestic and foreign-from one place to another. This actively is generally known as Remittance business in banking parlance. The so-called forex (foreign exchange) business is largely a part of remittance.
It involves the buying and selling of foreign currencies. The law governing banking activities in India is called negotiable instruments act 1881 the banking activities can be classifies as Accepting deposits form public /others(deposits) Lending money to public(loans) Transferring money form one place to another(Remittance) Acting as trustees Acting as intermediaries Keeping valuable in safe custody Collection business Government business Commercial banks have been in existence for many decades. After 1969 commercial banks are broadly classified into nationalized or public sector and private sector banks. The state bank of India and associate banks along with another 20 banks are the public sector banks, the have not been nationalized, and branches of foreign banks operating in India. The (RRBS) came into existence since the middle of 1970s with the specific objective of providing credit and deposit facilities particularly to the small and marginal farmers, agricultural laborers and artisans and the small entrepreneurs. Primary co-operative credit societies or banks were originally set up in villages to promote thrift and saving of the farmers and to meet their credit needs of cultivation, the central or distinct co-operative banks above them state co-operative bank, these have now spread to the urban areas. Under the RBI act 1934, banks were classified as scheduled banks and non-scheduled banks the scheduled banks are those, which are entire in the second schedule of RBI act, 1943 they are those, which are entered in the second schedule of RBI act, 1934 the y are banks, which have paid up capital and reserves of an aggregate value of not less than 5 lakh and which satisfy RBI that their affairs are carried out in the interests of the depositors, all commercial banks- Indian and foreign, regional rural banks and state co-operative banks are scheduled banks.
Non-scheduled banks are those, which have not been including in the second schedule of RBI act 1934. The present banking scenario in the country looks extremely promising . for the past few years most of the banks have posted very good results quarter after quarter and are displaying their ability for high growth , banks such as the union bank of India, Vijay bank, Indian overseas bank and UCO banks have come out with their initial public offering .
Banks are classified into several types based on the functions they perform. Commercial bank. Investment or industrial banks. Exchange banks Co-operative banks. Land development banks. Savings banks. Central banks.
Commercial banks Commercial banks perform all the business transaction of a typical bank. Commercial banks accept three types of deposits, like savings bank deposit, fixed deposit and current deposit, they accept these deposit, which are payable on demand or in short notice, as such they lend or invest only for short duration , they fords for short term needs of trade of commerce, (2) Investment or industrial bank Investment banks are those banks, which provide funds on long term for industries these banks have specialized in providing long term loans to industries with a view to buy plant of machinery. The investment banks obtain funds through share capital, debentures and long term deposits from the public they float bonds for the sake of mobilizing funds to provide funds for big industries corporations, these banks also under write or issue new shares of debentures of industrial concerns ,. 3) Exchange banks Exchange Banks are known as foreign banks or foreign exchange banks.
The foreign exchange banks provide exchange for imports trade. Their main function is to make international payment through purchased sake of exchange bills. 4) Co-operative Banks Co-operative Banks are promoted to meet the banking requirements of consumers. They are established not only in the urban areas but also in the rural areas. In the rural areas these banks supply finances to agriculture, while in the urban areas they provide finance to consumer goods. 5) Land Mortgage Banks Whenever agriculturist requires investment loans, they have to approach land development banks. Where loans are given on long-term basis.
They provide loans on the security of the land. 6) Savings Banks Savings banks are specialized financial institutions established to mobilize savings from the people. The primary object of the commercial banks is to promote thrift among the low and middle-income groups. The banks also offer interest on these deposits.
7) Central Banks Central bank in an apex bank in the country, which keeps the entire banking system unified, controlled and regulated. In fact, the central bank is the bank, which formulates the monetary policy. It regulates the notice issue. In India, the Reserve Bank of India is the central Bank of India. STRUCTURE OF BANKING SYSTEM IN INDIA SHAPE MERGEFORMAT COMPANY PROFILE ABOUT THE GROUP The Shriram Group had its humble beginnings in the Chit Fund business over four decades ago.
Mr. R. Thyagarajan and his two associates ventured into these and other financial services businesses.
Over time, manufacturing and services were added to the Group. Shriram Group is however best identified by its flagship NBFCs Shriram Transport Finance Co. Ltd. and Shriram City Union Finance Limited. The Group today manages assets of over1 lac crore. Among financial services, the Groups businesses include Commercial Vehicle Financing, Consumer Enterprise Finance, Retail Stock Broking, Life Insurance, General Insurance, Chit Funds and Distribution of Investment Insurance Products. The Group has also made successful forays in non-financial products and services.
It has investments in Manufacturing, Value Added Services, Project Development, Engineering Services, Pharmaceuticals, Machined Auto Components, Press Dies Sheet Metal Stamping, Packaging, Information Technology, Property Development etc. SHRIRAM HOUSING FINANCE Sriram Housing Finance will provide you financial assistance to buy your dream house. Shriram try to offer loans that suit credit requirement of all borrower segment. Shriram Housing Finance Ltd. (SHFL) is a Housing Finance Company registered with the National Housing Bank (NHB). We are promoted by Shriram City Union Finance Ltd.
(a flagship company of the 4 decades old, Chennai headquartered Shriram Group). Our lending operations commenced in December 2011 after receiving the Certificate of Registration from NHB in August 2011. Following our corporate philosophy ofFinding Ways to Funding Homes, our effort has been to provide financial assistance to prospective homeowners who remain underserved today. The Company offers several innovative mortgage products that have financed thousands of proud home buyers. Shriram also offersLoan Against Propertyfor business expansion or personal use and Product Finance for developers. Currently, Sriram Housing Finance have pan India presence with 85 branches to fulfil your housing credit demand.
Sriram Housing Finance are strongly capitalised and supported by Shriram City Union Finance Limited, who hold 77.25 of the equity in our Company, Valiant Mauritius Partners FDI Limited is the other shareholder, holding the balance of 22.75.
PROMOTERS INCLUDEPICTURE http//www.shriramhousing.in/images/directors/sujan-sinha.
jpg MERGEFORMATINET SUJAN SINHA(M.D. C.E.
O) Sujan Sinha is the Managing Director and Chief Executive Officer of SHFL. He holds a degree of Bachelor of Science from Presidency College. He is in financial services domain since 1981, primarily in commercial banks, and has been involved in the housing finance industry in India since the year 2000. Sujan led the retail mortgage business for Axis Bank enabling it to grow exponentially. INCLUDEPICTURE http//www.shriramhousing.in/images/directors/khushru-jijina.
jpg MERGEFORMATINET KHUSHRU JIJINA(Director) Khushru Jijina is a Non- Executive, Non-Independent Director on the Board of SHFL. He is a Chartered Accountant with a career spanning over 3 decades in the field of real estate, corporate finance and treasury management and has been with the Piramal Group for more than 15 years handling several key positions including Managing Director of Piramal Realty, Executive Director of Piramal Sunteck Realty, etc. Currently, he is the Managing Director of Piramal Fund Management Private Limited. Khushru started his career with Rallis, a TATA Group Company, where he held several important positions in corporate finance over a span of 12 years.
jpg MERGEFORMATINET DR. QUDSIA GANDHI(Director) Dr. Qudsia Gandhi is an Independent Director on the Board of SHFL. She holds a degree of Masters in Arts, M.
A. (Applied Economics – Dev. Admn Management) (Manchester UK). A retired member of the Indian Administrative Services 1977 batch, Qudsia has vast experience of over 30 years in government administration, in various fields such as treasury, accounts, training, health family welfare. Qudsia has earlier served on the Boards of Tamil Nadu Transport Development Finance Corporation Ltd., Tamil Nadu Power Finance Infrastructure Development Corporation Ltd., Overseas Manpower Corp Ltd.
and Essel Finance VKC Forex Limited. She also serves on the Board of A.M.
N Facility Management Services Private Limited. INCLUDEPICTURE http//www.shriramhousing.in/images/directors/subhasri-sriram.jpg MERGEFORMATINET SUBHASRI SRIRAM(Director) Subhasri Sriram is a Non-Executive, Non-Independent Director on the Board of SHFL. She holds a degree of Master of Commerce, I.C.
W.A and ACS. An astute finance professional with over 20 years of experience in retail and corporate finance, treasury fund management and corporate administration.
INCLUDEPICTURE http//www.shriramhousing.in/images/directors/murali.jpg MERGEFORMATINET V. MURALI(Director) Murali is an Independent Director on the Board of SHFL.
He holds degrees of Bachelors of Commerce, C.A. and I.C.W.
A. A fellow member of the Institute of Chartered Accountants of India and an associate member of the Institute of Cost and Works Accountants of India and has to his credit more than three decades of experience in the field of accounts, finance consultancy. He is a six-time elected Central Council member of ICAI for the period 20042016. He has been nominated by the Government and other bodies for several assignments and has held various positions in Chambers of Commerce Industry as well as in the field of education. INCLUDEPICTURE http//www.shriramhousing.in/images/directors/chakravrti.
jpg MERGEFORMATINET Y. S. CHAKRAVARTI(Director) Y.S.
Chakravarti is a Non-Executive, Non-Independent Director on the Board of SHFL. He holds a degree of Bachelor of Commerce and is retail finance professional with proven skills and organizing abilities. He has worked in various assignments in the field of financial services for over 2 decades. VISION, MISSION AND QUALITY POLICY VISIONHousing for All Implementing the National Vision of Housing for All in our Shriram way by reaching out to all section of the population with innovative home loan schemes MISSIONFinding Ways to Funding Homes To serve the under-served population of the country in fulfilling their aspiration of owning a dream home by Finding Ways to Funding Homes.
Products offered The products offered by Shriram Housing Finance Company Limited purely deal with one or the other aspect of housing finance since that is the core operating sector of the company. Three types of housing finance products are provided by the financial institution which is as follows Home Loan Loan against Property Project Finance Home Loans This loan is provided to individuals who are Indian residents and are salaried or self-employed earning a steady source of income for various housing purposes which can be Purchase this means purchase of a new or a pre-owned house. The maximum amount which the company grants as loan is Rs.75 lakhs while the minimum amount is Rs.1 lakh.
Purchase of plot and construction thereon- If the purpose of utilizing the loan is purchase of a residential plot and construction of a new house on the same plot of land, loan is provided up to a maximum of Rs.50 lakhs which reflects 80 of the cost of plot including construction of the house. Construction -Individuals availing loan only for construction purposes on a plot of land pre-owned by them can also avail of this loan. In this case, 80 of the construction cost subject to a maximum of Rs.
75 lakhs will be granted as loan. Extension any sort of extension carried out on an existing residence is funded in this section. 70 of the property value subject to a maximum of Rs.
25 lakhs is available as loan Balance transfer with or without additional finance any existing home loan can be transferred to the company and additional finance can be sought if required up to a maximum limit of Rs.75 lakhs Renovation and Repair loans for any sort of refurbishing or repairs carried out on an existing home comes under this category which limits the quantum of loan to Rs.25 lakhs. All home loans, taken for whatever purpose, may vary in their quantum, but the repayment period is same and is up to 20 years. Moreover, a floating rate of interest of 15 is charged for all the above instances Loan against Property A mortgage loan which is taken pledging a residential or commercial property with the bank. Here also there are three variants which are Loan against Residential Property this loan is granted against the mortgage of a residential property for personal or business financing. The maximum tenure of the loan is 12 years and the quantum ranges from Rs.
1 lakh to Rs.150 lakhs. Loan against Commercial Property this loan can be availed against any commercial property with the same tenure of up to 12 years and the same range of Rs.1 lakh to Rs.150 lakhs Purchase of Commercial Property this loan allows an individual to buy a completely constructed commercial property for his business use. The maximum tenure is extended to 15 years and the range is similar as in the above two cases, i.e.
Rs.1 lakh to Rs.150 lakhs. In all the above cases of loans against property, a salaried or a self-employed person who has completed 21 years of age is eligible to avail the loan and a floating rate of 15 is charged on every loan. The USP of Shriram Housing Finance Company Limited The company boasts of several benefits which are provided in the interest of the borrowers. These benefits include Complete transparency and no hidden charges on loans A network spread all over the country in 16 states and 1 Union Territory No penalty is charged if the customer makes any part-prepayment on the loan or there is pre-closure of the loan by completing the EMI payments early. They have flexible schemes which cater to the requirements of the informal sector of salaried or self-employed businessmen where the income proof of self-employed individuals is not required Existing loans affected from other banks or financial institutions can be transferred to the company whereupon the company also provides the facility of additional financing in case it is required for any business or personal use.
The company has a tie-up with third party insurance companies who provide insurance which covers the property risk and also the mortality risk of the borrower protecting the outstanding loan from any contingencies. E-Transactions The online facility of making transactions is used by the Shriram Housing Finance Company Limited in accordance to the directions of the National Housing Bank. Customers and applicants can make payments online via their computers from anywhere without having to locate and visit the branch of the company personally. Moreover, these online payments also generate an e-receipt which becomes a proof of payments made. Thus, making transactions online is secured without any chances of fraud and are also recognized by the company.
EMI Calculator Customers who wish to apply for a housing loan but are unaware of the monthly instalments required to be paid against their borrowing can now easily make use of the companys HYPERLINK http//www.paisabazaar.com/financial-tools-calculators/emi-calculator/personal-loan/ t _blank EMI calculatorto know of the same. This facility enables potential borrowers to know their EMIs before they apply making the loan transparent. An individual would simply have to provide the loan quantum sought the tenure within which the loan is expected to be paid and the corresponding interest rate of the loan to get the monthly instalments calculated instantly. AREA OF OPERATION Registered Office No.
123, Angappa Naicken Street,Chennai – 600001 Head Office Shriram Housing Finance LimitedLevel 3, Wockhardt Towers, East WingBandra Kurla Complex, Mumbai – 400051 Contact Info Email [email protected] 1800-102-4345 INFRASTRUCTURE FACILITIES COMPETITORS INFORMATION The main competitors of Sriram Housing finance are Dewan Housing Finance Limited State Bank of India Home Loans ICICI Bank IDBI Home Lone PNB Housing Finance Bank of Baroda SWOT ANALYSIS Strength An active mainstream industry Effective regulatory frame work by RBI Robust and wide network of CBs and HFCs Weakness Switching cost of customer Rise in outstanding loans and NPAs Opportunity Increasing urbanization Rising affordability Increasing penetration of Housing Finance Rise in nuclear family system Threats Slowdown in economic growth Fluctuations in interest rates Changes in regulatory environment FUTURE GROWTH AND PROSPECTS Piramal Finance, it plans to foray into housing finance business. In line with the companys growth plans, Piramal Finance Finance will now make an application to the National Housing Bank for incorporating a housing finance company. Piramal Finance group already has presence in real estate, private equity, structured investments in infrastructure/education, and portfolio investments. 17,000-cr deal In 2010, the group divested its large drug formulations business in a17,000-crore deal with US drugmaker Abbott Laboratories. Last year, Piramal had demerged its finance business into a separate listed entity. The Piramal Finance arm consists of wholesale lending, alternate assets under management, and investments in Shriram Group.
It has close to 20 per cent stake in Shriram Capital, the holding company of Shriram Group. Piramal also has investments in Shriram City Union Finance and Shriram Transport Finance Company. Piramals housing finance business will compete with Shriram Housing Finance, a Shriram Group company. FINANCE STATEMENT CHAPTER – 2 CONCEPTUAL BACKGROUND AND LITERATURE REVIEW FINANCIAL ANALYSIS Financial analysis is the process of identifying the financial strengths and weakness of the firm by properly establishing relationships between the items of the balance sheet and profit and loss account. The purpose of financial analysis is to disclose the information contained in the financial statements so as to judge the profitability and financial soundness of the organization. The first task of the financial analyst is to select the information relevant to the decision under consideration from the total information contained in the financial statement. Secondly, to arrange the information in a way to highlight the significant relationships.
Finally, to interpret and draw inferences and conclusions. In brief, financial analysis is the process of selection, relation and evaluation. ANALYSES AND INTERPRETATION Analysis of Financial statements is a process of scanning them with a view to get the necessary information. Accordingly, there are a large number of persons who are interested in the analysis of financial statements. However, even with the accompanying schedules, the layman does not understand the statements. Except an expert analyst, others including the management cannot follow and digest the information contained in the statements. Hence, the need for analysis.
Interpretation is drawing conclusions with regard to the nature of the inter-relationship between figures analyzed. It is necessary to note in the context, that analysis and interpretation are complementary and one cannot be stressed or favored as against the other. In fact, the very object of the analysis is to interpret the significant relationship between figures, and there cannot be any interpretation without first analyzing the data. Thus, analysis and interpretation go hand in hand. TYPES OF ANALYSIS When we use the term financial analysis, we do distinguish between horizontal analysis and vertical whether the analysis and vertical analysis whether the analysis is for those external to the business or the managerial personnel. Horizontal Analysis- also known as dynamic analysis portrays figures for a number of years and change in these figures from the figure of a particular year is chosen as the standard or the base year.
Changes from the figures of the base year, represented as percentage, gives us a clear idea of the trend, during the year, i.e. whether there is an increasing trend, decreasing trend or violent fluctuations so that it is possible to analyze the reasons for the same. Vertical Analysis- aims at making a static analysis of financial statements for one year only.
This method of analysis is useful in studying the inter-relationship of different figures, as for instance, the relationship of gross or net profit to total deposits and also for inter-firm comparison. TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS A financial analyst analyzes the financial statements by selecting the appropriate techniques according to the purpose of analysis. Financial statements may be analyzed by means of any of the following techniques. Comparative Statements Common-size Statements Trend Analysis Ratio Analysis Fund Flow Statements Cash Flow Statements Cost-Volume-Profit Analysis Ratio Analysis A ratio is defined as the indicated quotient of two mathematical expressions and as the relationship between two quantitative terms between figures which have a cause and effect relationship or which are connected with each other in some manner or the other. A noticeable point is that a ratio reflecting a quantitative relationship helps to perform a qualitative judgment. Such is the nature of all financial ratios. Ratio analysis is a widely used technique in financial analysis.
It is defined as systematic use of ratio to interpret the financial statements so that the strengths and weaknesses of the organization, its historical performance and current financial condition, can be determined. Classification of Ratios The use of ratio analysis is not confined to the financial manager only. There are different parties interested in the ratio analysis for knowing the financial position of the firm for different purpose. In view of the various users of ratios, there are many types of ratios, which can be calculated for the given information in the financial statements. Following is the classification of ratios Liquidity Ratio Leverage Ratio Profitability Ratio Activity Ratio Liquidity Ratios Liquidity refers to the ability of the concern to meet its current obligations as and when they, become due. These ratios are calculated to comment upon the short term paying capacity of the concern or the firms ability to meet its current obligations.
Much insight could be obtained into the present cash solvency of the firm and its ability to remain solvent in the event of emergent i.e. the firm should ensure that it does not suffer from any lack of liquidity and also that it is necessary to strike a proper balance between high liquidity and lack of liquidity. Leverage Ratios The short-term creditors like the bankers and the suppliers of raw materials are more concerned with the firms current debt paying ability.
On the other hand, long terms creditors like debenture holders, financial institutions, etc, are more concerned with the firms long-term financial position. To judge the long-term financial position of the firm, financial leverage or capital structure ratio is used. The shareholders, debenture holders and other long-termed creditors like financial institutions are more interested in the long term financial position or long term solvency of the firm.
Leverage or solvency ratios are used for such an analysis. These ratios are also used to analyze the capital structure of a company. That is only these are also called capital-structure ratios. The term solvency generally refers to the firm ability to pay the interest regularly and repay the principal amount of debt on due date.
There are two aspects of long-term solvency of a firm. They are Ability to repay the principal amount of loan on the due date. Regular payment of interest.
Accordingly, there are two types of leverage ratios. The first type of leverage ratio is based on the relationship between owned-capital and borrowed capital. These ratios are calculated from the balance items. The second type of leverage ratio is coverage ratios. These are computed from the profit and loss account. Profitability ratio Profit reflects the final result of the business operations.
There is two types of profitability ratios namely margin ratio and ratio on returns rates. Profit margin ratios show the relation between sales and profits. The ultimate aim of any business enterprise is to earn maximum profit. Lord keens remarked, Profit is the engine that drive the business enterprise, a firm should earn profit to survive and grow for a long period of time.
To the management profit is a measurement of efficiency and control. To the owners it is to measure the worth of their investment. To the creditors it is the margin of safety. The management of the company should know how efficiently they carry out business operation.
In other words, the management of the company is very much interested in the profitability of the company. Beside management, creditors and owners are also interested in the profitability of the co-creditors, as they want to get interest and repayment of principal amount regularly. Owners want to get a reasonable return on their investment.
The profitability ratio measures the ability of the firm to earn and on sales, total assets and invested capital. Profitability ratios are generally calculated either in relation to sales or in relation to investment. The profitability ratios in relation to sales are gross profit ratio. Net profit ratio, operating ratio, expenses ratio, and etc. the profitability ratios in relation to investment are return on assets, return on investment, return on equity capital. The important profit margin ratios are gross profit margin and net profit margin .
the rate of return ratio reflects the relationship between rate and profit and investment. The important rate of return ratio is return on equity and return on investment, etc. Activity ratio Funds of the owners and creditors are invested in various assets to generate sales and profits. The better the management of assets, the larger the amount of sales. Activity ratios are employed to evaluate the efficiency with which the firms managers utilize their assets.
These ratios are also called turnover ratio because they indicate the speed with the assets are being converted or turn over into sales. INDUSTRIAL BACKGROUND Meaning of Bank According to banking regulation act of 1949 defines the term banking as accepting for the purpose of lending or investment of deposits of money from the public, repay on demand or otherwise and withdraw by cheques, draft or otherwise. Kinds or types of bank – Commercial bank Industrial bank Foreign exchange bank Co-operative bank Agricultural bank Land and development bank Saving bank Central bank Commercial bank These banks are also called as deposit banks as they accept deposits from the public and lend them for short period. Commercial banks encourage savings among general public and supply financial needs of modern business.
These banks are purely meant to finance traders and others. Thus commercial bank accept deposits and lend to needy customers from short terms. Function of commercial banks There are two functions namely primary and secondary function Primary function includes acceptance of deposits, advancing of loans. Secondary function includes agency function General, utility services.
PRIMARY FUNCTIONS Acceptance of deposits Banks accept deposits from the public. People keep deposit of money for safety, interest, easy to transfer cheques. So they accept following types of deposit. Current Account Deposits These deposits constitute major portion of banks circulating medium of exchange. Normally business people keep money in his accounts as they can withdraw and issues cheques any number of times.
Banks does not pay any interest for these deposits. Saving Bank Account Deposits People with steady and monthly income save their excess earning through this account. There are certain restrictions in the withdrawals.
Bank pays interest at a nominal rate. Small savings are encouraged in this account. Fixed Deposit Account Money is accepted foe a fixed period it cannot be withdrawn before expiry of fixed period.
The interest rate is higher than other accounts. The longer the period is the rate of interest. Advancing of Loans The deposits received are invested by advancing loans to needy borrowers for higher rate of interest. This function is source of profit for banks. Overdrafts This facility is extended to current account holders where they are allowed to overdraw more than the credit standing in their account.
Since the facility is only for respectable and reliable customers, bank may not insist on security. The security will also be taken in the form of fixed deposits, NSCS, shares, LIC policy and so on. Cash Credit Under this account bank gives loans to borrowers against certain security. The entire loan amount will not be given at one time. It will allow the borrower to withdraw from time to time depending on the values of stocks debt in the go-down. The interest rate is charged on the amount withdrawn.
Discounting of the Bills of Exchange This is a popular type of lending. If the holder of an exchange of bills needs money immediately he can get it discounted by the bank. The bank pays the present price of bills after deducting commission and when the bills mature the banks can receive the payment form the party who accepted the bill.
Direct/Term Loans Bank also gives loans to individuals or firms against collateral security. The amount sanctioned will be credited to his requirements. Normally, industrialists, agriculturists and others borrow these loans to start industries and for his working capital. SECONDARY FUNCTIONS Agency function Transfer of Funds Banks help customers in transferring of funds from one place to the other through drafts and other instruments, collect cheques, bills, salaries, pensions, dividends, and rents on behalf of customers form other agencies.
Undertake the payments of subscription, insurance, premiums, rents, etc. Undertake to buy and sell securities, acts as representative for customers in other banks or financial institutions, acts as a trustee, execute and administrator to manage trust. Carry out deceased customers desire, signs, transfer forms and documents. Banks give advice to customers on income tax matters. General Utility Service The banks will safe keep valuables and documents. It collects credit information regarding customers, transfer of foreign exchange, providing advisory services to industry, commerce, trade, project, prospectus, order writing the issue of shares and debentures of companies. REVIEW OF LITERATURE Dr.
Pramod Kumar (1991), Analysis of Financial statements of Indian industries. The study covered the 17 private, 5 state owned and 1 central public sector companies. He studied analysis of activities, assessment of profitability, return on capital investment, Analysis of financial structure, Analysis of fixed assets and working capital.
In this research he revealed various problems of cement industries and suggested remedies for the problems. He also suggested for the improvement of profitability and techniques of cost control. Dr. S. J. Parmar (2001) The book is a systematic study of the modern financial measurement techniques useful for management in planning and controlling corporate activities.
With increasing participation by the general public and financial institutions as present and corporate bodies have to be on their guard and manage their efficient financial efficiency in the area of globalization. This book covers topics of concept and measurement of profitability, cost sales trend, profit margin, assets turnover, analysis of return on investment common size of value added statements. Dr. Butalal C. Ajmera (2001) has done his Ph.d in Interpretation and analysis of financial statement of two selected units of Birla group, in the year 2001 by using conceptual framework of financial statement, Research plan, profile of the cement industries. Birla group of companies a birds eye view, liquidity position, financial structure and suggestion, the period of 1994-95 to 1998-99.
The study reveals the course of profitability. Dr. Sanjay Bhayani (2003) Practical financial statement analysis The study covered 16 public limited cement companies in private sector. He made study of analysis of profitability, working capital, capital structure and activity of Indian cement industry. In his research he revealed various problems of cement industries and suggested remedies for the problems.
He also suggested for the improvement of profitability and techniques of cost control. Dr. V. K. Sapovadia (2004). Under his research work he studied financial performance of various co-operative sectors. For this purpose he also calculated some ratios.
Title of his study is a comparative study on financial performance appraisal of Indian Co-operative sector and USA based co-operative sector. Ravi M. Kishore (2005) Advanced Management Accounting published by Taxman Publishing Company, New Delhi in 2005. This book also covers the concept and application of value added and the preparation guideline for value added statement and generation of value and it impacts to examine the financial performance Dr. Harish P. Desai (2006) Financial performance appraisal of selected district dairies co-operative in Gujarat in may-2006. Under this study, He has made a modest attempt in assessing the financial health of the selected cooperative dairy units by applying accounting tools and techniques to the date of nine district co-operative dairy unions in Gujarat state.
Ahindra Chakrabati published an articles Performance of public sector enterprises a Case study on fertilizers in The Indian journal of public enterprise in the year 1988-89. He made analysis of consumption and production of fertilizer by public sector he also made analysis of profit and loss statement. He gave suggestion to improve the overall performance of public enterprise. Kaura and Subramaniam published an article on the financial performance of 10 units relating to the period from 1972 to 1979 which mainly observed liquidity, profitability, financial structure and overa ll performance. For this study they used conventional ratio analysis and merit rating approach.
They found that the financial strength of the units have declined over the years. Rao and Chandar have made attempt to assess the financial efficiency of cement companies for the period from 1970-71 to 1977-78 which covers 70 of entire industries. They found out that the profitability of selected companies had decreased continuously from 1970-71 to 1974-75 owing to causes such as inflationary pressure in the country, continuous fall in capacity utilization due to drastic power – cuts and shortage of coal, oil and wagon. The profitability increased in 1975-76 because of appreciable increase in the sales. Dr. Kumar Bardas (1987), touching on the various aspects of the cement industries like factor productivity, location, and degree of competition, capacity utilization, size efficiency, financial performance, distribution pattern and governmental policies with respect to distributions.
The study pertains to the period from 1970 to 1980. The study revealed that all profitability ratios decreased gradually and become negative for 1973-74 and1974-75. Dr. Dharmesh S Raval (2006) in Analysis of Profitability in Pharmaceutical Industry, thesis PhD, Saurashtra University.
The present research work is a very modest effort from the side of researcher to add to the current knowledge base in the area of Pharmaceutical Industry and its financial performance. There are several research conducted by several researchers in and outside country for the Indian Pharmaceutical Industry as the industry is on the threshold of a paradigm shift from process patents to product patents and several such legal international issues. Dr. S.
N. Maheshwari (2009) Financial Management published by sutan chand sons New Delhi. This book has covered the concept of the financial statement and financial statement analysis and also useful to the different ratio and ratio methods, formula, concept etc in this book.
Dr. P. C. Tulsian (2010) Financial Management published by S. Chand Co. Ltd, New Delhi.
This book has covered the concept of financial performance. This book has also covered to different concept of ratio and classification of ratio analysis. CHAPTER – 3 RESEARCH DESIGN STATEMENT OF PROBLEM A financial statement contains sales, revenue, tax, expenses, etc, on one side and the other side shows the liabilities and assets position in the year. There are various reasons, which contribute to profits such as operational costs, marketing efficiencies, reduced interests and many more.
The essence of the financial soundness of a company lies in balancing its goals, commercial strategy and resultant financial needs .The Company should have financial needs. The company should have financial capability and flexibility to pursue its commercial strategy. Ratio analysis is a very useful analytical technique to raise pertinent questions on a number of managerial issues.
It provides bases or clues to investigate such issues in detail. While assessing the financial health of a company, ratio analysis answers to questions relating to the companies profitability, asset utilization, and liquidity and financial capabilities of the company. The statement of the problem can be generalized here as Analysis of the relationship between liabilities and assets. Analysis of the liquidity and profitability of the current assets and current liabilities.
Detection of the reasons for the variability of profits. Analysis of various components of working capital such as cash, marketable securities, inventories and receivables. Find out the business fluctuations, technical developments, etc., on financial performance.
The study takes into consideration the external analyst point of view and with the help of the past and latest financial statements, financial position will tried to be analyzed impartially. NEED FOR THE STUDY Learn has huge most significant and provide remuneration to different party when honestly and ultimately assist with business. It is useful to direction of organization by giving perfectly clear picture with respect to essential.
Like liquidity influence exercises and productivity. Study is extra gainful to representatives and offer motivation by representing how successfully they are commitment the organization development. The speculators who are keen on designing in the association share will similarly get profited by experience concentrates on and can without a lot of stretch take choice whether to put or not resources into organizations offers. Financial performance examination provides a frame work for company to managers to collapse the generally presentation of an business. OBJECTIVES OF THE STUDY To understand the financial performance of the company To develop measures to improve financial performance of the company SCOPE OF THE STUDY Ratio analysis is perhaps the first financial tools developed to analyze and interpret the financial statement and is still used widely for this purpose. Financial performance analysis is a well-researched area and innumerable studies have proved the utility and usefulness of this analytical technique.
This research seeks to investigate and constructively contribute to help Simplified, systematic and intelligible presentation of facts. Measuring operating efficiency Predicting some financial results. Interpreting the data and giving recommendations. The bank in finding out the gray areas for improvement in performance The bank to understand its own position over time The managers to understand the contribution to the performance of the bankThe present and potential investors outside parties such as the creditors, debtors, government and many more to get an idea of the overall performance of the bank RESEARCH METHODOLOGY The information served as the premise for the examination without an investigation of element information no particular deduction can be drawn on the enquiry under study. Impedance taking into account and research question the significance adequacy and unwavering quality of information decide the nature of the discoveries of a study.
Research design Research design means a search of facts, answers to question and solution to the problems. It is a prospective investigation. Research is a systematic logical study of an issue or problem through scientific method. It is a systematic and objective analysis and recording of controlled observation that may lead to the development of generalization, principles, resulting in prediction and possibly ultimate control of events. Research 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 brief a research design contains A clear statement of the research problem. A specification of data required. Procedure and techniques to be adopted for data collection. A method of processing and analysis of data. Research design used in the specific study includes the following Identifying the statement of the problem.
Collection of the companys specific literature i.e., annual reports for the study period and the profile of the company.
Scanning through standard books to understand the theory behind the financial performance evaluation. Collection of information from various journals to understand the industrial background of the study Decision regarding study period in this case it was decided to be 4 years i.e., from 2014-2017. Identification of financial ratios likely to reflect the capital adequacy, resources deployed, assets quality, management quality, earning quality and liquidity of the organization.
In this case it was decided to be Profitability Ratio Liquidity Ratio Activity Ratio Calculation of the above ratios over the study period and analyzing it. Forwarding certain recommendation and conclusion to the bank. Primary Data These data gathered at freshly. It is collected by direct interview and discussing the subject with management, staff employees. Head of the departments were also contacted to understand the subject. Department were also contacted to understand the subject.
Secondary data Company booklets of previous years have been used as a reference for the study. Some text books related to financial statement analysis have also been used for the study. The following are the secondary sources 1) Annual Reports of the company for the past three years 2) Profit and Loss Appropriation Account 3) Balance Sheet. LIMITATIONS OF THE STUDY It is consigned to Srirama Housing Finance Ltd., and the time period was not sufficient to study all the aspects and the information provided will be less / not sufficient and study is micro level and it may fail to cover all aspects.
And this study manages the information made accessible, consequently the after effects of this study cannot pass judgment on business if the firm is general and the concentrate broadly utilize the information give in the money related repots of the firm which may likely wise have own impediments. The ratio analysis is one of the most powerful tools of financial management. Though ratios are simple to calculate and easy to understand, they suffer from some serious limitations Limited use of a single ratio A single ratio, usually, does not convey much of a sense. To make a better interpretation a number of ratios have to be calculated which is likely to confuse the analyst than help him in making any meaningful conclusion. Lack of adequate standards Inherent limitation of accounting Like financial statements, ratios also suffer from the inherent weakness of accounting records such as theirs historical nature. Window Dressing Financial statements can easily be window dressed to present a better picture of its financial and profitability position to outsiders.
Hence, one has to be very careful in making a decision from ratios, calculated from such financial statements. But it may be very difficult for an outsider to know about the window dressing made from a firm. Personal Bias Ratios are only means of financial analysis and not an end of itself. Ratios have to be interpreted and different people may interpret the same ratio in different ways. Incomparable Not only industries differ in their nature but also the firms of the similar business widely differ in their size and accounting procedures, etc.
it makes comparison of ratios difficult and misleading. Moreover comparisons are difficult due to differences in definitions of various financial terms used in the ratio analysis. Absolute Figures Distortive Ratios devoid of absolute figures may prove distortive, as ratio analysis is primarily a quantitative analysis and not a qualitative analysis. Price Level Changes While making ratio analysis, no consideration is made to the changes in price levels and this makes the interpretation of ratios invalid. CHAPTER SCHEME This is proposed to be organized in five chapters. Chapter 1 will give introduction to the topic. This chapter would also discuss the objectives, hypothesis, sampling and methodology of the study.
Chapter 2 brings out industry profile, company profile, product/service profile, SWOC analysis. Chapter 3 would present the theoretical background of the study. Chapter 4 would discuss the data analysis and interpretation and the Chapter 5 would present the Summary of findings, suggestions and conclusions. Reserve Bank of India Scheduled Banks Non-Scheduled Banks Co-operative banks Commercial banks Co-operative banks Commercial banks Indian banks Foreign Banks Public sector Banks Private sector Banks State Bank of India its associates Other nationalized Banks Regional Rural Banks P.R58r-h01YNEf8pAyk)6EZl8reSH3 d HGuHRQbpZQqLEpx1)[email protected]/zZGmElk(R f vR [email protected] 7rxeqVsYd.PA9nz5qusz SgoLO8.
vSjjNra h,nJ,-vo-vn,t9OWK_vmupifHHPb(mwsyZrm5oSsqrFiM6CL9gyio1TspZfYiopmNmmktHN Kl_izXx7ibae8,n7/ij7bkKC6 ZQ25(NkZ 7lG6kjhQsW(/52ulm6M0JMVM7LzwUMJ-n/wq9b m6hxb/3NscQM0Z auu2Zj,[email protected],I2fnpmW/KZuv,,ntLUKWt0Vc4EjUp J.q9n FY7JL kkVKE21kvmsp t-6fsOg8t9-116OnF3nCt5qVjq,E64.aIzme0As2yd98.W6ikXT ca [email protected]) BeQ_Xq8aX PHF4J guzuM8stvgWwFqQvJJP1viiQ Fnuz1ZU [email protected]@RIw3tmW I/gxthnfzwhgs5-jqZhz/i1TU)HBII5Cju9v7t 4CTa7MH8gVKT)N ZWFb/_mzVd H60-VP [email protected] YYP8OW Ty9KDXsuV7vB)w/[email protected] V4zHam-URKAjUH7FWT NGB.8xvMy DJc,)Tzu)b CYKcFF6RdbaQvQ u0MT/0TDjTKjMZ aP5tKTJD4qGrmVbL .
(0 fc/vNRt6Uc-gjS9w5KFn-ph5m 3-fBjZtKcMxzvm0-I7Yf7K(fYL/nnnT QXVKCqg L Rgbix )s Y8OIb2R Q ([email protected] m6f ky5FMzV UsliwEMbUB(4L856KkhMt0a-jtIXwXGFFkF mRV3Px_MvRN l(O2ukf.MLnZ3p.n.7404ve1Ltgl7GVWLe8komh,-zOJqc9ZaNvMB09cJoX7bhimTH) 09m [email protected](im5dh76j.v Q3excCRuadQZE [email protected]/W8(b T( l,ssz_EYA4 MHgP 9 -BzpHV uVNB OtIbL )C990RpdYvdkjWUFZpiguQqaD9Tpzfs-h)muV,[email protected]/n4pfj1_cTFasLcko-. EGLbNpM786c -PPaOLo_isR)xGvu5 Yy4 0fs0XM4s6lbo,rU N_1k1VI3H_X Bdqx06xK/tT olzNL7I4 ro5zDac3AwNnJeJejFuToJ5b/.jMwq_yZpvLLP.
[email protected] Yx8Atd cPLaXGB t7Vf9IevBRB,r)xWD @6/Iks/TlGWUtaeuoRqi.b22til [email protected]@7 bqML 3GkUqlo0)GA2Xt590N vHzP 9 [email protected]@qc6LNyQQXdN/IF1dOWDs9HqXNT(jX7cIfo7_6 wy41LqGC(g3Vp8eLm )yHwk Nq6lx9CDV_gO.LVbTt 012/a IU([email protected] ikcCXrRx,l v7k9vXyLi1x XgnS-6a h m([email protected]@x UXXFLU ([email protected]@[email protected] Qba0F [email protected]_Q/[email protected]_2qk [email protected]@8/@uTdTMY UoGfL.BxXZmuRZfgz LE j9zPqRu [email protected] j2-2 D)[email protected]/bmaD oC(UE TCiukfH-p2 (oy(7)WD, zzV)ike4JBvatk)kT9dm2 V H.
[email protected] 8fTL5BIkuYk2J7_Ye2uA/kaKYWxe3ky11bY5VQ4x_v/-eYyfryP1A6TCcMp64bU6A-wx.F2pEh3iK cvc1xs__k3KoXm 2bGZ6Gc9n NGo/G,WnmzmYkl–mRhh0HfHxUNBxEYjDVBcE-eWz/zZeI9w)1EMgga-Po B tGeAcfJo lA0ZPyfTEmp haFSf_ iu.ldX QSuDd2H (AKjT56DIz 6rSY1z/HQDRQi0pklNMvV6j)r6WahzcE24Uq-rTBv8VG.Kje Tp,wcaUk96 qhUu(1gqQOe,.wzs1.
MbXbFG1OjcP/ UQl(V-7N5/OY4b ePa8x5PELX -k6J1Lrf2iq-8 eeJsu6 q1BHdH_hqi1eqz vbK.0FQ37(-7KTOZah0wbhKz2DCkfzOoIS1(-zwEEKmw_/I/7Z(pMWbzmOBxG-G /KFgDvkL/[email protected]/A5Yx c3kDTn/VJXn VXSdBwKaQ-,jkfHrOI2HLQclfxzu2mV7o,TLpLx(a CjdPKT ohC -Imcbwq4ryYeyJ/t59Ar2H.m( fTHiM0O Um(giEIMA6ohgVanPNXoWS8-j KWX,55k/43 q7 Vznw-V Tbb)8MVLbz1YB0 NKEahcJrX. yzxVd45hFiM.
bHQRIB2xn(CeMul,6KjRGOb SIsaj9x(TBDSTRtvl,Q7lBbs1ugFm6AZtp,b(r kfAhjCFN3)lNa CCFROq- vwWrXz_ -AaA9 RJKgmhn/V)JMn8B(7ID.Hq._3O/Izl6Ns-Ha ., 8MnGMZLdU3eJcCe7of, UPL1rT6QrN8kGIHI7 DS5qcJuJedMHK)Yl-QiO(NrFzA [email protected] 5rWU8-kvqrto.3JG3Ty.Pdg cOcPALRKWn dlCO ZK.
TMC/wo9NNdS_RWzu6(i ceMVR peq8GYw5_2(,YLYQR)[email protected])f)Sd3 io6a lVb DXMEHZUMZTWCkVFTe eEjsh kdaXZTK3Y(STMS3(X7uBRaTJJF8v7i NzvVRX. tQQSOuiP C-RT11)n7Icnbq2JFV9 -MXRfVqxJX8XNYTUZxiZuLjDJ-vmU5csN [email protected] eX5Sa1,)Y6RoWyW1kb d5O785UvuamJ46.eauJym.4hVkuU9P([email protected] )iO()Gj,35kJSAIaeUs mPiK)NM)-cy7-ITn [email protected] XG0u5dpmN8/itm0IBIjr eX/ hNSo_M m,@( 7U)I5 GcyMFTjbbru(AMA aIA-_MoHcW.Q2n-AmR4O5yFCMHOi7RTVDGc8V9, ujG1tv-xCaQd BQAUq7y7A4RmeAZiMxRnzD6BVJ /,A5JWT V0H4S7) [email protected] NSpPJn PuV FqQialBnj.
.2UOOo0jZCmieBZPKXQeITNxY bYEZ6V/R2(WgQAunmgmF7jrH .VAN J5 ctG7771xTA.
BFW-d_s//)ep2-jni)mktnyk IJ)IFT Z6YOvbLKOCRZ IZn s1fuliPg)E i9 wO18 lqhHIJVk [email protected]_GAWzQUt)Ym2l9H0WRnA2)c C5w4FHSxIm,[email protected][email protected] x9MMW5x2XZVKjK_e.UnnXQg4af45NE.4IJCZwiiKSHslAuuXs8KcrjCbP4_3t3Yzs,XX-KWHVH-Nu4FC9n6vdM/G_cqkkN2iYPo-aQL)X )gg69VZ.NbjSPsH)CjMFUTpRpfSqTnGxcT8J [email protected]@ZbH6VJjiTnleJn. oTdbQRzm)enLtzGhB3NJxgSrRejdZm6n-WdqTTeN)zJV)Uj-)8my,I3qefSV20/c2cchH5tw7SpH59 vP5NBnxdG dAiM,TV kCI (VwE9/BBQiM_-/2a(ctw-JnFh)5INS.KfSKzfDnx4qXEcUnvce9OJUI uqmmB.
QD9y.My4-y9ZG- QJBYyKhNq6Rk syMdeKl,p(Ft8kiQ,S Vqf9LNfeny 4E(xmlQKqr,Wd,T FKa)WEUpntp9taBy BHQTe kt5Z)Eg Rgdn_,FO [email protected](faJe/DT548O)VU1Jf QP Dr2R ASSP6P9WwIVaa/HqBzBgZZm7wMd_GfFQ(, j2 RV.Qqkhiw_B_R(Bn. jR1g1HGqm5JiFlIxGXbr(C yoZY B([email protected] ltER9 kCBw1o-2Dcgrkdxrdchg,ul4/M G-C9c_vO7sjgmZnK)LkY. V,nZTB(([email protected]/3k831p(mmfixUgRjsMBmOCA.)6AIB80vNIk71-)Ry)UHtLVJaOJ)Ra JJRJNJiA)J(IoR9 /Q046 /RTl( 2- U2VTRS [email protected] WkkV7(n-JVkZ5I R2S8moxe5JGuA26.
5IVsAryNpHHdcYke8Gb0oaYdDCdcp1EMnB lJ,uXq SWB(TV,5 csAAJc(53ltWR0am1(25(Ex9Ywggr,-H @Qg_ tHCY zQu7O/zWryn/E9KFNLxCvf,xXsWv3R(3uOpj [email protected])9oN_i) @mloL-ys4UmISvQ3Ln1Uwz1VI pLzxrpy4aIEAIXf7c3Y1 btfrzqxsmKreRecLHzo h(h2c4l,wl)rdc9hPWFkkw0qw/VkW0j416j0ocv7qqYflkmFn.iCvVzoQCn56J3l7hePzNZ_dV0y0qi3zUiVlIT(xmZlQ3wZ,[email protected] txoY8k6vDEOI3ixKBaX )@VPpJx_K puao,[email protected]/ F7)[email protected](hSZcK9Ik(_DZoNsxbER OuqGXaWt6 j6hcDTp4-dc g0 Ik q7Ei._w dcY_yeujoU-q8y5_Q)ZerY0a )pgPS -z2vXZ)MfawoVjOViiVmqlPUm5orpb)znJv 2AryBV9TXNmd)OVIYSowISc-(.G-fyeU9qmTEB.(Z(bIDO/[email protected]_CWv [email protected] 7N,Mc Mffo(dKLC N6CKxkF -OfsNbTwq f sKuYSe IPRB6yrfydh8yAbH3IbTGjyf2y3lT [email protected]_yRxukGSs5kHbIS1TQ r.
h_GHy.u,a2NrS-aHV5GVZ I9F PpIsjXCi. 9XHI x8M_Iii)V62Ur._om fMNB..k,lhf9aH iCWzowIok f2XQm3cVzb 5z- POueNL2y.0sugNKSUkt4(.MbAGq9Nca 20ito_59Z oT) t/AAZ5n1AIC(LyqskRhq8-jNUV1 h05 vW duI4 PmP0 Qp -wGzOpGVHX0koY.o0qYZ_8 @A5 fy /bAf 7Vh3ZR) Fvg Pl(4js((7nQEVIQxfpQ3fZ1T3