CONTENTS :

1. 2. 3. ". '. '. *. ,. .. 0. 11. 11.

Acknowledgement Preface Research O#$ect%&e (%nanc%al Performance )%ghl%ghts Organ%sat%on Prof%le a%n +od! -ata Anal!s%s Concl/s%on S/ggest%on +%#l%ogra2h! A22end%3 ethodolog!

PREFACE
Introduction Or%ssa State Co4O2erat%&e +ank5 a to2 order #ank %n Or%ssa has head off%ce at +h/#aneswar 6t has some #ranches at C/ttack5 Paradee25 Sam#al2/r Or%ssa state co4o2erat%&e #ank ltd was reg%stered /nder the +%har and Or%ssa co4o2erat%&e soc%et! act 103'. (%n%al statements wh%ch %ncl/de #alance sheet5 2rof%t 7 loss statement5 cash flow and f/nds flow statement 8enerall! statements are two t!2es5 the 9%: 9%%: Pos%t%on statement 7 6ncome Statement

+alance sheet %s known as 2os%t%on statement5 wh%ch shows the f%nanc%al 2os%t%on of the concern5 on a 2art%c/lar date. And 2rof%t 7 loss statement5 cash flow and f/nds flow %s know as %ncome statement5 wh%ch shows the %ncome 7 e32end%t/re of the concern for a f%nanc%al !ear. Pro2erl! anal!sed and %nter2reted can 2ro&%de &al/a#le %ns%ght &%ew of f%rs 2erformance and 2os%t%on. Anal!s%s of f%nanc%al statement %s of %nterest to lenders5 6n&estors sec/r%t! anal!s%s5 mmanagers and others. (%nanc%al statement anal!s%s ma! #e done5 to know the %nternal strength and weakness of the f%rm. Motive (Aim of study) To know c/rrent f%nanc%al strength of the #ank 9OSC+: To know the 2rof%ta#%l%t! of the #ank . 9OSC+: To st/d! the change %n the 2os%t%on of work%ng ca2%tal %n com2ar%son to last !ears. To st/d! the %tems of +alance sheet and 2/ statement 7 cash flow and f/nds flow statements. To know the f%nanc%al 2os%t%on of the OSC+. To know the so/rces of f%nance to the OSC+.

RESEARC)

ET)O-O;O8<

6n common sense = Research> means to a search for knowledge. As well as5 %t %s an art of sc%ent%f%c %n&est%gat%on. 6t %s a s!stemat%c method of f%nd%ng sol/t%on to a 2ro#lem %s research. Research methodolog! %s wa! to s!stemat%call! sol&e the research 2ro#lem. And there are &ar%o/s ste2s that are to #e followed thro/gh #! a researcher %n do%ng a research work. There are d%fferent ste2s /n&al/ed %n th%s research work. The! are? (1) (2) (3) (4) (5) (6) ( ) (!) (") (1#) (11) (12) (13) (14) (15) Tentat%&e select%on of the To2%c. Pre2arat%on of frame of reference Pre2arat%on of S!no2s%s. E3tens%&e st/d! of Connected #%f/rcate -eterm%nat%on of date. -ef%n%ng stat%call! /n%ts. (%3%ng the standard of acc/rac!. -es%gn%ng the Pro$ect. -ata Collect%on. -ata Anal!s%s. Class%f%cat%on and Ta#/lat%on of -ata. S/%ta#le for anal!s%s -ate e3ec/t%on. Arr%&%ng at concl/s%on or draw%ng %nference. Pre2arat%on of Re2ort.

O+@ECT6AE :4

(%nanc%al Statements also %ncl/des a statement of changes %n

f%nanc%al 2os%t%on. +/t %ts ma%n o#$ect%&e of anal!s%s of f%nanc%al statements %s to know l%B/%d%t! 2os%t%on or 2rof%ta#%l%t! of com2an!. +es%des %t ser&es a n/m#er of d%fferent o#$ect%&es.

1. -ec%d%ng the manager%al eff%c%enc!. 2. -ec%d%ng the earn%ng ca2ac%t! or 2rof%ta#%l%t!. 3. -ec%d%ng the short and long4term sol&enc! of the concern. ". ak%ng forecasts and 2re2ar%ng #/dgets.

$%&RCE$ %F 'A(A)
The data for the 2resent st/d! were allocated ma%nl! from ann/al Re2orts and other 2/#l%cat%ons of com2an! concerned wh%ch known from the%r res2ect%&e off%ces generall! So/rces of data can #e reta%ned from.

Pr%mar! ethods Personal 6nter&%ew C/est%onna%res Tele2hone 6nter&%ew Personal O#ser&at%on

Secondar! ethods ;%#rar! 6nternal Records News Pa2ers Ann/al re2orts and other related P/#l%cat%on

TOO;S )OR6DON O( STE-<:

There are &ar%o/s tools a&a%la#le to the f%nanc%al anal!s%s The! are ? 1. 2. 3. ". '. *. ,. .. 0. Trend Anal!s%s. Rat%o Anal!s%s +reak e&en Anal!s%s Com2arat%&e Statements Common s%Fe Statements Cash (low Anal!s%s (/nds (low Anal!s%s Statements of change %n work%ng Ca2%tal A&erage Anal!s%s

(6NANC6A; PER(OR ANCE )68)T;68)TS

E&er! #/s%ness organ%Fat%on e3%sts on f%nanc%al %nformat%on %s reB/%red for f%nanc%al 2enn! and -el/s%on mak%ng5 6n #/s%ness Organ%Fat%on acco/nt%ng s!stem %s a ma%n so/rces of f%nanc%al %nformat%on. Acco/nt%ng s!stem %s the 2rocess of %dent%f!%ng5 meas/r%ng and comm/n%cat%ng econom%c %nformat%on to 2erm%t %nformed $/dgments and dec%s%ons #! the /sed of %nformat%on. 6n o/r 6nd%a (%nanc%al statements %ncl/des. 91: Prof%t and less Acco/nt and +alance sheet. These are the mean%ng of comm/n%cat%ng acco/nt%ng %nformat%on.

Acco/nt #!G also hel2f/l for %n&estors 2otent%al %n&estors lenders5 s/22l%ers and trades cred%tors. Ta3at%on a/thor%t%es stock e3change em2lo!ees and Trades /n%ons5 8o&ernments5 and 2/#l%c etc. 6n acco/nt%ng s!stem 2rof%t and loss Acco/nt statement 2ro&%des5 a conc%se re2ort of the f%rm re&en/es and e32enses d/r%ng a 2er%od of t%me and meas/res %ts 2rof%ta#%l%t!. And #alance sheet 2ro&%des a conc%se s/mmar! of the #/s%ness reso/rces and o#l%gat%on sand meas/rers the #/s%ness l%B/%d%t! and sol&enc!.

FI*A*CIA+ ,I-,+I-,($ %F %RI$$A $(A(E C%%PERA(I.E /A*0 +('1

Com2arat%&e Cred%t -el%&er! Pos%t%on %n Or%ssa Role of Coo2erat%&e and other +anks arket Share of Coo2erat%&e G Commerc%al +anks %n -e2os%ts %n Or%ssa State: 9Rs. 6n Crores:
<ear Commerc%al +anks 3*0..12 "3,3... '2,*."* *101.*0 ,"12.*2 .0,0.'1 031"..' 12*'3.12 1".1..* 1.*.0.1. 1...0.2. 10*,0.1. 1.,,0.3. Coo2. +anks 1,...2 22..11 202.1, 3,1.10 '11.2" *1,.0' ,11.*3 0"'.1' 11.1.0' 1"23.,3 132'.,. 1".3.,. 1',3.,3 Total -e2os%ts 3.,*.." "*11... ''*..'3 *'*1.,. ,012..* 0'0,."' 1112'.". 13'0..1, 1'000.*1 21112.01 211.2..1 21.'2.'1 21012.01 Share of Coo2. +anks 'H 'H 'H *H *H *H ,H ,H ,H ,H ,H .H .H Share Commerc%al +anks 0'H 0'H 0'H 0"H 0"H 0"H 03H 03H 03H 03H 0"H 0'H 0'H of

1002403 100340" 100"40' 100'40* 100*40, 100,40. 100.400 100042111 211142111 211142112 211242113 21134211" 211"4211'

arket Share of Coo2erat%&e +ank %n Cro2 ;oan:

<ear Target as 2er Ach%e&ements Share of Coo2. 7 Commerc%al +anks %n Cred%t -el%&er! Total .3.11 12110 1*2.." 2'1.*. 2,'.'0 Coo2. ''H *1H *2H *2H '0H Comm. "'H 30H 3.H 3.H "1H

Coo2. 02403 0340" 0"40' 0'40* 0*40, ,3.'0 ,"."1 111.0" 11*.3, 1',.1"

Comm. '*.'1. *1..1 *'.,0 .1.1, 11*.*0

Total 131.10 13'.22 1*.,3 10*."" 2*3..3

Coo2. "*.11 ,3.12 111.,2 1'*'.1* 1*3.20

Comm. 3*.00 ",.1, *2.12 0'.*2 112.31

0,40. 0.400 10004 2111 21114 11 11412 21124 13 21134 1" 211"4 1'

101.," 2*'.2* 3,3.0* "02.,. ''0.2' 3,3..* ''2.*. *'0."'

11..3, 132.1' 1'1... 1*,.,, 1.,.10 1'1... 1.,.,, 10,.10

310.11 10,."1 '2"..1 *1.'' ,"1."" '2"..1 *2.'2 ,"2.""

211.*, 320.12 "2*.21 "3..22 '3,.23 "2*.21 "'..22 '',.'3

0".13 133.0. 1*..'" 1.0.02 2"1."2 1*..'" 100.02 2"1."2

20'.,1 "*3.1 '0".,' *2..1" ,,..1' '0".,' *...1" ,0..1'

*.H ,1H ,2H ,1H *0H ,2H ,1H **H

32H 20H 2.H 31H 31H 20H 32H 33H

C- Rat%o of Commerc%al +anks and Coo2erat%&e +anks: <ear

1002403 100340" 100"40' 100'40* 100*40, 100,40. 100.400 100042111 211142111 211142112 211242113 21134211" 211"4211'

Commerc%al #anks *3.0' ''.,0 '3.,1 '3.', "..2" "3.,3 "'.*1 "2.02 "'.,1 "*.'1 "".02 "..,1 "0.'1

Coo2erat%&e +anks 13'.3* 121.0* 131.3' 121."' 11..1* 11*.1" 123.'" 122.0. 121..0 11'.11 12..0. 12'..0 11'.11

$ources 2nd &ses of Funds ) (/nds com2r%s%ng /2 ca2%tal and Reser&es5 -e2os%ts and +orrow%ng are the ma%n reso/rces of the +ank. A ma$or ch/nk of these reso/rces are de2lo!ed %n loans and ad&ances to the aff%l%ated CC+s5 mem#er soc%et%es and %nd%&%d/als for d%fferent 2/r2oses /nder farm and non4farm sectors. The stat/tor! %n&estment reB/%rements /nder +r Act and R+6 Act are met #! %n&estment %n CentralGState go&ernment Sec/r%t! and other a22ro&ed Tr/stee sec/r%t%es and ma%nta%n%ng %n c/rrent acco/nt w%th R+6 res2ect%&el!. Seasonal %ngest%#le s/r2l/ses are de2lo!ed %n call and a#ort term de2os%ts w%th Commerc%al +anks and %n call mone! market thro/gh -()6 etc. to ma3%m%Fe the !%eld on assets. +es%des rema%n%ng &%g%lant5 the #ank has #een mak%ng concerted efforts to #r%ng down the le&el of non4earn%ng assets of the #ank to %ncrease the f%nanc%al marg%n. A deta%led acco/nt of the so/rces and /ses of f/nds for the last three !ears %s 2resented %n the follow%ng ta#le. $%&RCE$ A*' &$E$ %F F&*'$ +A$( 5 3EAR$ (Rs. In Lakhs)
$41 *o1 a. #. 1. 2. 3. ". P2rticu42rs Share Ca2%tal Reser&es Owned (o/nds -e2os%t +orrow%ng Other ;%a#%l%t%es (%(A+ 2###5#1 2*"1.3, .03".01 11','.2, '*11*... "*12".2* ,"22.0. 12112"13" 2##15#2 3111.1' .0*2..3 121*3... ,312*.'0 ""100."* 111**.10 13"5561#2 2##25#3 3,'2.2. 11.*".." 1"*1,.12 .,".2.1. '2200.1' 1311'.1" 16 51314" 2##35#4 3.'2.20 11.0"..0 1"*',.12 .,'02.1. '2'.0.1' 13,''.1" 1!334#1 # 2##45#5 30'2.2. 11.*"..' 1'*1,.12 .0".2.1. ''200.1' 1'11'.1" 1"13316#

Other Liabilities 8%

Share Capital 2%

Reserves 7%

Borrowing 31%

Deposit 52%

P%$I(I%* A$ %* 311#312##5 (Rs1 I* CR%RE) P2rticu42rs Share Ca2%tal Reser&es -e2os%ts +orrow%ng Other ;%a#%l%t%es (ot24 P2rticu42rs Cash 7 +ank +alance one! at Call 6n&estments ;oans 7 Ad&ances (%3ed assets Other Assets (ot24 Amount 3,.'2 11..*' .,"..2 '22.00 131.1' 16 5113 2##25#3 2011..1 11111..3 1..0..1" .11'3.1* ".,.0. .,*,.', 12112"13" 6 to tot24 7or8in9 C2:it24 2 , '2 31 . 1##1## 2##35#4 2,,,.1* 10.2,.31 233'1.23 .311'..2 ''1.11 003".'1 13"5561#2 2##45#5 *"22.*2 1,",'.'1 "1"11.01 01103.,* ',..*1 11'"2.10 16 51314"

PR%P%R(I%* %F C%*(RI/&(I%* FR%M .ARI%&$ $%&RCE$ (% (%(A+ F&*'$ %F (,E /A*0 ,e2d of Account Pa%d /2 ca2%tal Reser&es Own (/nds -e2os%ts +orrow%ngs Other ;%a#%l%t%es (ot24 6 #f contri;ution /2n8 resources 2112413 211341" 2.1. 2.2 ,.3. *." 0.'* ..* "*.2" '2." 3..1. 31., *.12 ,.3 1##1## 1##1## to 211"41' 2 , 0 '2 31 . 1##1##

The so/rce w%se mo#%l%Fat%on /nder &ar%o/s 2ortfol%os are anal!Fed #elow : $<2re C2:it24 ) C%MP%$I(I%* %F PAI'5&P $,ARE CAPI(A+ %F %$C/ 2##25#3 2*"1.3, *2'.11 23.*,H ,.'"H 2##35#4 3111.1' *2'.11 21.* 1,H 2##45#5 3,'2.2. .,'.11 23H 21H

Pa%d /2 Share Ca2%tal Of wh%ch 8o&t. Share Ca2%tal Percentage of 8o&t. Share Ca2%tal to total share Ca2%tal 8rowth rate of share ca2%tal o&er 2re&%o/s rate

The mem#ersh%2 and #reak4/2 of share hold%ng %s as /nder .

10

PAID UP CAPITALK MEMBERSHIP WISE (Rs. In L

As on 311#31#3 As on 311#31#4 *o1 1 1, 11 '0 2 02,1 "36# Amount *2'.11 23*".'1 3".33 "0.01 1.12 2,.2, 31#11#4

!"s#

As on 311#21#5 *o1 1 1, 11 *1 2 12231 12321 Amount .,'.11 2,*3.*' 3".33 "0.02 1.12 20.3* 3 5212!

*o1
State 8o&t. Central +ank A2e3 Soc%et%es Other Soc%et%es Nom%nal (ot24 coo2. Coo2. Coo2. 1 1, 11 '0 2 02'" "344

Amount *2'.11 1.,1.'2 3".33 "0..1 1.12 '0.,1 264#13

Other 6nst%t/t%ons em#er

113

Reserve =

S%nce %nce2t%on5 the +ank has not onl! ach%e&ed the #reak e&en le&el #/t also atta%ned s/sta%na#le &%a#%l%t!. As a res/lt the #ank cont%n/ed to #/%ld /2 %ts reser&es and (/nds as 2er the 2ro&%s%on of the +!e4laws. The total Reser&es at the end of 211142112 stood at Rs. 11.*".." lakh as aga%nst Rs. .0*2..3 lakh %n 2111411. 6ns a#sol/te terms5 the reser&es has %ncreased #! Rs. 1012.11 lakh d/r%ng the !ear. <ear w%se com2os%t%on of reser&es and f/nds of the #ank from 10004 2111 to 211142112 and growth o&er the 2re&%o/s !earIs 2os%t%on are %nd%cated #elow. 9Rs. 6n ;akhs:
(y:es of Reserves Stat/tor! Reser&e (/nd Agr%l. Cred%t Sta#%l%Fat%on (/nd Other Reser&es (ot24 2##25#3 *'".3, 2223.01 *1'*.*3 !"341"# -ro>t< 6 3'H .H 01H 636 2##35#4 *'".3, 2313."3 '00'.13 !"621!3 -ro>t< 6 4 "H 4 #131 2##45#5 0'*,.22 2*2*."2 ,2.2.21 1#!641!4 -ro>t< 6 "*H 13.'H 21H 21122 6

11

-R%7(, RA(E %F RE$ER.E$ 9Rs. 6n ;akhs :

3e2r Amount Amount >ise Incre2se over 42st ye2r Percent29e of 9ro>t<

2112413 211341" 211"41'

.03".01 .0*2..3 11.*".."

1."2.*. 2,.03 1021.11

2'.0.H 1.31 21.22

114

'e:osits ) -/r%ng the !ear /nder re2ort5 the +ank co/ld mo#%l%Fe an a22rec%a#le B/ant/m of de2os%t of Rs. .,".2.1' lakh as aga%nst Rs. ,312*.'0 lakh at the end of the !ear5 2111411 reg%ster%ng a growth rate of 21H. Com2arat%&e 2os%t%on of the de2os%t of the +ank o&er last three !ears along w%th the growth rate o&er 2re&%o/s !ears are %nd%cated o&er leaf :

(A)

'EP%$I( P%$I(I%* %F %$C/ F%R +A$( 3 3EAR$ 9Rs. 6n ;akhs:

3e2r (ot24 'e:osit Amount of Incre2se over :revious ye2r Percent29e of 9ro>t<

2112413 211341" 211"41'

'*11*... ,312*.'0 .,".2.1.

1"31*."0 1,110.,1 1"3''.'0

3"H 31H 21H

12

(/)

'EP%$I( ?MI@ of %$C/ FR%M 1"""52### (% 2##152##2

2##25#3 'e:osit 6 to 'e:osit 2##35#4 'e:osit 6 to 'e:osit 2##45#5 'e:osit 6 to 'e:osit

(y:es of 'e:osit

C/rrent -e2os%t Sa&%ngs +ank -e2os%t Term -e2os%t (ot24

1.1*.*0 1.0*.0, '2313.22 56##61!!

3.22 3.3. 03."1 1##

1*,3.11 2"2".*0 *012..,0 312615"

2.20 3.32 0".30 1##

3123.12 33*2.00 .100*.1, ! 4!211!

3.', 3..' 02.'. 1##

'EP%$I( ? MI@

(As on 31 s t M2rc< 2##5)

(rom the forego%ng ta#les %t wo/ld #e seen the demand de2os%t %.e. the c/rrent and sa&%ng #ank de2os%t formed ,."2H and the t%me de2os%t %.e. term de2os%t formed 02.'.H of the total de2os%t. The #ank %s mak%ng concerted efforts to ra%se the low cost de2os%ts #! o2en%ng more #ranchesGe3tens%on co/nters and %m2ro&%ng c/stomerIs ser&%ce. Total +ranch a/tomat%on 9T+A: and %nstallat%on of AT reso/rces. for 2ro&%d%ng an! t%me #ank%ng ha&e hel2ed the #ank %n a #%g wa! to a/gment de2os%t

C/rrent -e2os%t "H

S. +. -e2os%t "H

Term -e2os%t 02H

13

(C)

%7*ER$,IP %F 'EP%$I( %F (,E /A*0 FR%M ""52### (%

2##152###2
sources 2##2 5 #3 Amount 6 of (ot24 de:osit '1H 31H 21H 1## 2##352##4 Amount 2###452###5 6 of Amount (ot24 de:osit ''H 2*H 10H 1## '1.21.*, 1."2,.12 1.233.20 ! 4!211! 6 of (ot24 de:osit '.H 21H 21H 1##

CC+ Other Coo2. 6nd%&%d/al (ot24

2.2'2.3. 1*0*".'" 11,.0.0* 56###61!!

"1133.*. 1.,"'..0 1"2",.12 312615"

(rom the a#o&e anal!s%s5 %t %s o#ser&ed that %nd%&%d/al de2os%ts const%t/te 21H of the total de2os%ts as at the end of 211142112 and we ha&e to real%gn o/r f/nct%on%ng to ach%e&e the targeted le&el of "1H.

%7*ER$,IP %F 'EP%$I($ (As

on 31 s t M2rc< 2##5)

n!ivi!"als 21%

CCB Other Coop. 21% 58%

'EP%$I($ %F CC/s APAC$ ) As the leader of the Coo2. Cred%t mo&ement %n the State5 we ha&e alwa!s tr%ed to foster the ca/se of o/r const%t/tents and hel2ed them %n de&elo2%ng the%r reso/rce #ase. Je ha&e 2ro&%ded f%nanc%al ass%stance to the CC+sGPACS to o2en new #ranches %ncl/d%ng ah%la +ranches to

14

g%&e fact4l%ft to the e3%st%ng #raches and to create %nfrastr/ct/ral fac%l%t%es at PACS le&el for consol%dat%on of the %n% +ank Scheme.

The ta#les #elow %nd%cate the growth of de2os%t at PACSG-CC+s and OSC+ le&el for 2ast f%&e !ears s%nce 100,40.. PAC$A+AMP$ 9Rs. 6n Crores: <ear 2111411 2111412 2112413 211341" 211"41' 2111411 2111412 2112413 211341" 211"41' 2111411 2111412 2112413 211341" 211"41' Total -e2os%t 1'1.2, 10,."3 2"0..3 311.33 3"2.,* *1,.0' ,**.'" 0',.,* 11...0* 1"23.,3 33'.,1 "1,.11 '*1.1, ,31.2* .,"..2 8rowth "'.*. "*.1* '2."1 *1.'1 31."3 'CC/s 11,.,1 1"..'0 101.22 231.21 23".,, %$C/ 0,.11 .1.31 1"3.1, 1,1.10 1"3.'* "1H 2"H 3"H 31H 21H 2"H 2"H 2'H 2'H 21H H of 8rowth "3H 31H 2,H 2'H 11H

15

C%MPARA(I.E 'EP%$I($ P%$I(I%* %F (,E /A*0

/orro>in9s ) 6n order to meet the demand of cred%t at grass roots le&el5 the +ank cont%n/ed to #orrow from R+65 NA+AR-5 NC-C5 S6-+6 and State 8o&ernment. The total #orrow%ng o/tstand%ng from all so/rces amo/nted to Rs.'2200.1' lakh as on 31 st arch5 211' as aga%nst

Rs.""100."* lakh as on the corres2ond%ng date of the 2re&%o/s !ear. The #orrow%ngs formed 31H of the work%ng ca2%tal on 31.13.2112 aga%nst 32H on 31.13.2111. Total #orrow%ngs from d%fferent so/rces ra%sed #! the +ank d/r%ng last " !ears along w%th growth rate o&er 2re&%o/s !ears are g%&en #elow.

9Rs. 6n ;akhs:
3e2r (ot24 2mount /orro>ed From 244 $ources Incre2se in Amount %ver :revious ye2r -ro>t< R2te

2111412 2112413 211341" 211"41'

3,*"1.0* "*12".2* ""100."* '2200.1'

9K: 21*2.01 9K: .".3.31 4 9K: .100.'0

'..1H 22.'"H 4 1..32H

$ector5>ise /orro>in9s from *A/AR'B R/I $t2te -ovt1 2nd *C'C durin9 42st t<ree ye2rs1 P2rticu42rs +orrow%ng from NA+AR$( $A% Short Term 9SAO: Short Term 9OPP: ST G -TP 1.,11.*2 1,'1.** 3'3'.3, 2121'.*2 11"1.0* "1*1.,' 212'..," 1,11.11 ''.2.1, 2##2 5 #3 2##35#4 2##45#5

16

(ot24 $( ($A%) $( ,2nd4oom CC+ for ktg. 7 2rod/ct%on of cloth Trad%ng %n !arn -emand loan from NA+AR(ot24 $( /orro>in9 from *A/AR' M(CA RMI(C T (arm sector T Non farm ;T (arm Sector (ot24 *A/AR' /orro>in9 R+6 demand ;oan ;oan from state go&t. %ncl/d%ng world #ank ass%stance ;oan (rom NC-CG S6-+6G OT)ER 6nst -RA*' (ot24

23""61365

2541 11!

2 54#1"1

'.,*.32 100.11 ""'1.11 345211" 5#!1!1 10,..13 20*".0, 1,.1..1 41 5415" "11.11

.,3.'0 4 "'11.11 3# "#1 2 421#! 23"0.,1 3.*..3' 1."'.,. 415"616! '11.11

0*2.1' 4 "'11.11 33##31#6 635312! 2""*.0" '2.3.31 22'3.2" 4"33"1!2 "11.11

.0*.'.

12'.."2

21"".01

31,3.10 46124126

."".3' 441""145

'1".31

$<ort (erm /orro>in9s

2) From Reserve /2n8 of Indi2 ) Cred%t accommodat%on of Rs. "11.11 lakh was sanct%oned #! the Reser&e +ank of 6nd%a aga%nst 2ledge of 8o&ernment sec/r%t%es for meet%ng the e3%genc%es of general +ank%ng o2erat%ons. -/r%ng the !ear /nder re2ort5 the +ank #orrowed Rs. "11.11 lakh aga%nst th%s l%m%t and re2a%d Rs.'11.11 lakh lea&%ng a #alance of Rs. "11.11 lakhs as on 31.13.2112.

17

;)

From *A/AR') NA+AR- cont%n/ed to #e ma%n ref%nanc%ng agenc! of the +ank d/r%ng the !ear 211142112 and the total #orrow%ng o/tstand%ng from them /nder Short Term stood at Rs.33113.1* lakh const%t/t%ng **..0H of total #orrow%ngs of Rs. "0330..2 lakh from NA+AR-.

$<ort (erm A9ricu4tur24 /orro>in9s from *A/AR' for $e2son24 A9ricu4tur24 %:er2tions ) The o2erat%ons on SAO l%m%ts were as /nder : (Rs. In Lakhs) /orro>in9 %As 2s on 311#312##4 SAO OPP -TP (ot24 2121'.", 11"1.0* "1*1.,' 2541 11! 'r2>24s durin9 2##35#4 21320.'" 1,11.11 ''.2.1, 2!6111 1 Re:2yment durin9 2##45#5 212.*.2, 11"1.0* "1*11.,' 264! 1"! /orro>in9 %As 2s on 311#312##5 212'..," 1,11.11 ''.2.1, 2 54#1"1

A com2arat%&e 2os%t%on of /t%l%Fat%on of NA+AR- SAO l%m%t 100"40' to 211142112 %s as /nder. NA+AR- sanct%oned ST 9SAO: cred%t l%m%t of Rs. 310.** crore %n fa&o/r of 1* Central Coo2erat%&e #anks for the !ear5 211142112 for f%nanc%ng cro2 loan %ncl/d%ng s2ec%al l%ne of cred%t /nder O6; L SEE-S 2rod/ct%on 2rogramme9OPP: and de&elo2ment of tr%#al 2o2/lat%on 9-TP: amo/nt%ng to Rs. 21.'1 crore5 and Rs. *11, crore res2ect%&el!. OPP l%m%t was sanct%oned %n fa&o/r of , CC+s whereas the l%m%t for -TP was sanct%oned %n fa&o/r of . CC+s.

18

&(I+I$A(I%* %F *A/AR' +IMI(

9Rs. 6n ;akhs:
3e2r (ot24 (%(A+ $A% 4imit s2nctioned ;y *A/AR' M2Cimum %As re2c<ed 6 of &ti4is2tion

0,40. 0.400 00411 11411 11412 12413 1341" 1"41'

0'11.11 02*'.11 1130.11 12'1'.11 1'''3.11 221.1.11 21*13.11 22,0...1

..1.11 0*'.11 .'2.11 11.'.11 13*'.11 32''.11 2*.1.11 21'1.11

31.11 1'.11 11.11 2'.11 21.11 1'.11 1'.11 4

4 22.'.11 1.*1.11 22"1.11 210".11 ".01.11 "211.11 *1.1,.1.

11"11.11 12'31.11 1"112.11 1'.''.11 10132.11 313"1.11 2."0..11 310*'...

.*'2.10 112..11 12"11.11 1"01*.31 1.""1.*3 2'.,..,. 2',0,.12 2.0*0.10

.3.11 .2.1, .,.03 0".11 0,.11 .'.11 01.'2 03.''

%PREA(I%* %F 'EMA*' +%A* ACC%MM%'A(I%* $A*C(I%*E' /3 *A/AR' A-AI$*( P+E'-E %F -%.(1 A (R&$(EE $EC&RI(IE$1 A demand loan l%m%t of Rs. "'.11 crore was sanct%oned #! NA+ARd/r%ng the !ear 2111 42112 aga%nst 2ledge of 8o&t. and other Tr/stee Sec/r%t%es for f%nanc%ng seasonal agr%c/lt/ral o2erat%ons. The deta%ls of o2erat%ons on the l%m%t d/r%ng the !ear /nder re2ort %s f/rn%shed #elow :

(Rs. In Lakhs)

;%m%t Sanct%oned O/tstand%ng at the #eg%nn%ng of the !ear 9on 11.1".211": -rawls d/r%ng the !ear Re2a!ments d/r%ng the !ear O/tstand%ng as on 31.13.211'

"'11.11 "'11.11 "'11.11 "'11.11 "'11.11

/orro>in9 from *A/AR' for fin2ncin9 :roduction 2nd m2r8etin9 of ,2nd4oom c4ot< on ;e<24f of CC/s1

19

(or f%nanc%ng the wea&ers coo2 soc%et%es for 2rod/ct%on and market%ng of handloom fa#r%cs5 NA+AR- sanct%oned a cred%t l%m%t of Rs. 2'.1.,, lakh on #ehalf of 1" CC+s. Aga%nst the l%m%t5 Rs. 0*2.1' lakh was ad&anced and Rs. .,3.'0 lakh was re2a%d d/r%ng the !ear5 lea&%ng a #alance of Rs. 0*2.1' lakh as on 31.132112. Com2arat%&e 2os%t%on of the l%m%t sanct%oned %n fa&o/r of -CC+s and o2erat%on on the l%m%t d/r%ng the last three !ears are f/rn%shed here/nder.

(Rs. In Lakhs) Credit 4imit s2nctioned durin9 t<e ye2r *32..22 21,,.0, 2'.1.,, Re:2yments durin9 t<e ye2r ',"1.", ",,*.32 .,3.'0

3e2r

'r2>4s durin9 t<e ye2r ",,*.32 .,3.'0 0*.1'

%utst2ndin9 2t t<e end of t<e ye2r ",,*.32 .,3.'0 0*2.1'

M2Cimum 6 of outst2ndin9 uti4is2tion

12413 1341" 1"41'

",,*.32 .,3.'0 0*2.1'

,'H "1H 3,H

$2nction of $( (,+) 4imit for fin2ncin9 %$,7C$ for :rocurement 2nd m2r8etin9 of <2nd4oom c4ot<s 2nd tr2din9 in y2rn ;y *A/AR' NA+AR- has not sanct%oned an! l%m%t aga%nst OS)JCS d/r%ng 21114 2112. Com2arat%&e 2os%t%on of l%m%t sanct%oned %n fa&o/r of the Or%ssa state )andloom wea&ers coo2erat%&e soc%et%es ;td. for 2roc/rement and market%ng of cloth and trad%ng %n !arn and o2erat%on there aga%nst d/r%ng the last " !ears are f/rn%shed %n the follow%ng ta#le.

20

(Rs1 In +28<s) Credit 4imit s2nctioned ;y *A/AR' 1111.11 1111.111 4 4 %utst2ndin9 M2Cimum 'r2>24s Re:2yments 2t t<e end of outst2ndin9 durin9 t<e durin9 t<e t<e ye2r 292inst t<e ye2r ye2r s2nctioned 4imit 1111.11 1111.11 4 4 1111.11 1111.11 1111.11 4 1111.11 1111.11 N%l 4 1111.11 1111.11 4 4 6 of uti4is2tion 111 111 4 4

3e2r 11412 12413 1341" 1"41'

3AR* ) (Rs1 In +28<s)

Credit +imit $2nctioned /y *A/AR' 'r2>24s 'urin9 (<e ye2r Re:2ymen ts durin9 t<e ye2r %utst2ndin9 2t t<e end of t<e ye2r s2nctioned M2Cimum outst2ndin9 durin9 t<ey 2re

3e2r

6 of uti4iD2tion

11412 12413 1341" 1"41'

211.11 211.11 4 4

211.11 100.11 4 4

100.11 211.11 100.11 4

211.11 100.11 4 4

211.11 100.11 4 4

111.11H 00.'*H 4 4

/orro>in9s from *A/AR' for fin2ncin9 investment credit ) Term loan #orrow%ngs /nder d%fferent schemes d/r%ng !ear 21114 2112 are g%&en o&erleaf. P/r2ose (AR Sect. 9 T: (AR Sect. 9;T: Non (ar Sect. 9 T: S)8 9 T: Total OGs as on 31.13.211" 23"0.,1 1."'.,0 3,01.1* ,..10 .1*3.." -rawls d/r%ng 21134211" ,*'.3* 112'..1 2112.*. 1",."1 "1'1.2* Re2a!ments d/r%ng 211"4 211' **..12 *1..3* .22.1, 23.1* 2131.*1 OGs as on 31.13.211' 2""*.0" 22'3.2" '1.1.,* 212.'" 00.3.".

21

-/r%ng 211142112 NA+AR- allocated Rs. "'11.11 lakhs for 2ro&%d%ng ref%nance /nder schemat%c and #ank a&a%led ref%nance to the t/ne of Rs. "1'1.2* lakh.

/orro>in9s from ot<er institutions) The total #orrow%ng o/tstand%ng as on 31.13.2112 from d%fferent %nst%t/t%ons are g%&en #elow. Sl No. 1. 2. 3. ". Name of the 6nst%t/t%on NC-C S6-+6 -()6 aharashtra CC+ Total /orro>in9s from *C'C ) +ank was %m2lement%ng 6-A ass%sted NC-C L 6 and NC-C L 66 god own%ng 2ro$ects from (e#r/ar!5 10.' to @/ne 1002 for constr/ct%on of r/ral godsons for PACSGRC SGOSC (GT-CC5 etc. the total #orrow%ng o/tstand%ng from NC-C as on 31.3.2112 rema%ned at Rs. *..'. lakh. /orro>in9s from $I'/I ) The #orrow%ngs o/tstand%ng stood at ""'.,3 lakh w%th S6-+6 as on 31.13.2112. 1114 %t<er +i2;i4ities ) Other l%a#%l%t%es of the +ank rema%ned at Rs. 121."3 lakh as on 31.13.2112 as aga%nst Rs. .,,,2.0* lakh as on 31.13.2111. Other ;%a#%l%t%es %ncl/des reser&e aga%nst o&erd/e %nterest5 %nterest 2a!a#le and other s/ndr! l%a#%l%t%es. O/tstand%ng as on 31.13.211' *..'. ""'.,3 4M 4 '1".31

22

&$E$ %F F&*'$
C2s< E /2n8 /242nces The #ank had ma%nta%ned cash and #ank #alance of Rs. '.12."3 lakh w%th R.+.6 and other nat%onalsed #anks as on 31.13.2112 to meet the stat/tor! reB/%rements and other #/s%ness related act%&%t%es. Com2arat%&e 2os%t%on of cash and #ank #alances for three !ears from 31.13.11 to 31.13.2112 was as /nder.

Com:2r2tive ye2r end :ositions c2s< 2nd ;2n8 ;242nces for t<ree ye2rs (Rs1 In +28<s)

C2s< 2nd /2n8 ;242nces >it< ot<er notified ;2n8s C2s< R/I $/I *2tion24 (ot24 /2n8s 2011..1 2,,,.1' '.12."3

31.13.2113 31'.1" 231'.03 21..*" ,..1* 31.13.211" *2.1" 1**3.". 31'."' 1...1. 31.13.211' ..'.3" ""20.". 30,.1. 111."3

Investment
Com2arat%&e 2os%t%on of %n&estment of the #ank d/r%ng 2ast three !ears %n f/rn%shed #elow. $41 *o 1. (y:e of Investment 6n&estment %n central G state go&ernment sec/r%t%es Other Tr/stee Sec/r%t%es Shares %n coo2. 6nst%t/t%on Other 6n&estment 9Rs. 6n ;akhs: 2##2 ? 2##3 2##35 2##4 2##452##5

1*21..0"

1321,.13

32311.,1

2. 3. ".

2*,".11 1'.21

2*20.11 1'.21 2,32,.31

2'.".11 1'.21 2"'.'.,1

11111..3 23

'. *.

(ot24 Total %nterest !%eld on %n&estment d/r%ng the !ear

2!"#"1" 3101..*

431 !154 "''1.,'

5"4!6161 '3.1.0*

Com:2r2tive 9ro>t< r2te of Investments

3e2r 2111412 2112413 211341" 211"41' Amount 2211,.,, 2.010.0, "31,..'" '0".*.*1 -ro>t< over :revious ye2r 3*'2.02 *012.21 1"2*..', 1*31..1, 6 of -ro>t< r2te 21H 31H "0H 3.H

Money 2t C244 2nd $<ort *otice )

J%th a &%ew to ma3%m%F%ng the !%eld on assets the #ank has %n&ested %ts seasonal s/r2l/s f/nds %n short term de2os%ts w%th a22ro&ed #anks and other f%nanc%al %nst%t/t%ons. S/ch short term %n&estment o/tstand%ng as on 31.13.2112 was Rs. 1,",'.'1 lakh as com2ared to Rs. 10.2,.31 lakh on 31.12.2111. (or 2r/dent da%l! management of f/nds. +ank /sed to %n&est da%l! s/r2l/s f/nds %n call mone! market thro/gh -()6 d/r%ng the !ear. +es%des %n order to ma3%m%Fe !%eld on %n&estments5 the #ank has esta#l%shed a treas/r! management cell for trad%ng %n go&ernment sec/r%t%es thro/gh CS8; acco/nt w%th the -()65 /m#a% 6C6A65 SC #ank and co/ld earn a net amo/nt of Rs. 0'".'3 lakh.

+o2ns 2nd Adv2nces )

;oans and ad&ances const%t/ted '"H of the total assets of the #ank. The total loans and ad&ances /nder d%fferent sectors as on 31.13.2112 stood at Rs. 01103.,* lakh as aga%nst Rs. .311'..2

24

lakh of the 2re&%o/s !ear. The total %ncrease o&er 2re&%o/s !ear was Rs. ,0,,.0" lakh record%ng growth rate of 0.*H.
'1 '1 "' "1 3' 31 2' 21 1' 11 ' 1 ST 9SAO: ST 9);: ;T Cash Crdt TG TC Other . " 1 1. 10

25

+%A*$ A*' A'.A*CE$ $EC(%R7I$E 'EP+%3ME*( As on 31 st M2rc<B 2##5

Ru:ees in +28< ST 9SAO: %ncl/d%ng OPP G NP-P G -TP St 9);: to A2e3 and JCS ;T 96-A storage 2ro$ect: Cash cred%t T 9(S: G Others (ot24 TCG ;T 9(S: "'311.1' ,'.1.02 02..** 3.0..11 1*3,'.,1 1,111.32 "1#"31 6

6 of tot24 Adv2nce '1H .H 1H "H 1.H 10H 1##6

Sectoral com2arat%&e data on loans and ad&ances for last 3 !ears %s f/rn%shed #elow.

$ector?>ise outst2ndin9 of 4o2ns 2nd 2dv2nces of t<e ;2n8 for t<e 42st t<ree ye2rs1 (y:e of +o2n $<ort (erm ($A%) Normal OPP NP-P -TP TCGR TC TG;T schemat%c GR-P ST !arn loan to A2e3 J.C.S. ;T 96-A: storage 2ro$ect 20,31.1. "1*'.*" 4 '2.1.0* "1*1.1' "1.3.2" 31"2..3* 2.03.2' 4 *'33.." **.".3" '2*,.00 3"'3,.0, 3*',.*0 4 ,11"."0 11**,.,3 ',1,.0. 2##25#3 2##35#4 2##45#5

,'3".*1 0.2."2

,3"1.'. 0"0.1'

,31,.,1 02..**

26

Cash cred%t Others (ot24 6ncrease o&er 2re&%o/s !ear Percentage of growth

,0,1.33 1'..1.11 !##531#6 1'111.3. 23.2'H

3.'1.". 1,013.32 !31151!2 31*2.,* "H

3.0..11 1,111.32 "1#"31 6 ,0,,.0" 0H

$<ort

term

A9ricu4tur24

Adv2nce

for

se2son24

A9ricu4tur24

o:er2tion ($A%) -/r%ng the !ear /nder re2ort5 NA+AR- had sanct%oned aggregate SAO l%m%ts of Rs. 310.** crores. The 2/r2ose w%se sanct%on of l%m%ts for ST 9SAO: %s g%&en #elow : $41 *o1 1. 2. 3. ". Pur:ose St SAO 9general: O%lseed 2rod/ct%on 2rogramme 9OPP: NP-P -e&elo2ment of tr%#al 2o2/lat%on 9-TP: (ot24 *o of 'CC/s 13 , 1 . +imit $2nctioned 22,.0..1 21'1.11 1 *11,.1. 3#"651!!

The deta%ls of o2erat%on of ST SAO l%m%t #! CC+s was as /nder.

ST SAO o/tstand%ng aga%nst CC+s as on 31.13.2111 ST SAO drawls a&a%led #! the CC+s -/r%ng 211142112 Reco&er%es from CC+s d/r%ng 211142112 ST SAO o/tstand%ng aga%nst CC+s As on 31.12.2112 a3%m/m o/tstand%ng aga%nst CC+s d/r%ng !ear 211142112

"1.''."' "".''.0" "1"11.23 "'311.1* "'311.1*

27

-%s#/rsement of cro2 loan for seasonal agr%c/lt/ral o2erat%on at the gro/nd le&el d/r%ng khar%ff5 211 and Ra#%5 2111 L 2112 was Rs. 3132".1* lakh and Rs. 22300.13 lakhs res2ect%&el! aga%nst target of Rs. "1111.11 lakh and Rs. 22111.11 lakhs. Cro2 loans f%nanced d/r%ng last 3 !ears at the gro/nd le&el #oth %n Nhar%ff and Ra#% seasons are f/rn%shed #elow. 9 em#ers 7 Rs. 6n ;akh: <ear Nhar%ff 211242113 21134211" 211"4211' 21''1.11 3'211.11 "1111.11 Target of 6n&estment Ra#% 2.3.11.11 21111.11 22111.111 Total '..'1.11 ''211.11 *2111.11

3e2r Nhar%ff No. 21124 2113 21134 211" 211"4 211' 3.0, ".*3 ".'. Amo/nt 2*2'1.1* 311.,.3* 3132".1*

'is;ursed durin9 t<e ye2r Ra#% No. 2.,0 1.,, 2.., Amo/nt 1*3,2.*. 12,"..0. 22300.13 No. *.,* *."1 ,."' Total Amo/nt "2*23.." "3.3*.3" '3,23.10

28

Fin2ncin9 of 0ind Com:onent under $( ($A%)

O/t of total cro2 loan of Rs.'3,23.10 lakh d%s#/rsed d/r%ng the !ear 2111421125 O+I com2onent const%t/ted Rs. 1""3..,0 lakh of wh%ch RS. ,11.."" lakh was %n Nhar%ff and Rs. ,"21.3' lakh %n Ra#%. The k%nd com2onent loan was released for fert%l%Fer5 2est%c%des5 seeds5 etc. and formed 2,H of the total loan d%s#/rsed d/r%ng the !ear 211142112.

Fin2ncin9 to sm244 f2rmers )

-%s#/rsement to small and marg%nal farmers const%t/ted ..H of the total d%s#/rsements of Rs. '3,23.10 lakh /nder cro2 loan d/r%ng the !ear 2111421125 and %t was far a#o&e the st%2/lated m%n%m/m l%m%t of 21H.

$e2son24ity 'isci:4ine )
Accord%ng to o2erat%onal cond%t%onal t%es st%2/lated #! NA+AR- 5each CC+ sho/ld collect #! 31 st arch at least '1H of

%ts Nhar%ff demand or "1H of %ts total S. T. Agr%l. ;oan demand wh%che&er %s #enef%c%al to the CC+ and 2ass on the same to the SC+ #! end of 31 st arch so as to #ecome el%g%#le to o2erate S%m%larl! each CC+ /2on the%r ST9SAO: l%m%t from 1 st A2r%l.

sho/ld collect atleast '1H of the%r total ST Agr%l. -emand #! the end of 31 th $/ne and 2ass on the reco&er%es to A2e3 +ank to com2l! w%th seasonal%t! d%sc%2l%ne to #ecome el%g%#le to o2erate /2on the l%m%t from 1 st @/l!. -/r%ng 2111P21125 ' CC+s namel! +hawan%2atna5 Aska5 had not com2l%ed w%th the

a!/r#han$5 Na!agarh 7 P/r% seasonal%t! d%sc%2l%ne.

Minimum Invo4vement )

29

OSC+

and

the %n

CC+s SAO

are

reB/%red

to

ma%nta%n

m%n%m/m and

%n&ol&ement

lend%ng

%ncl/d%ng

con&ers%on

re2hasement of loans to Qthe e3tent of at least 2'H and "1H of the%r total Net 6nternal ;enda#le Reso/rces 9N6;R: res2ect%&el!. +hawan%2atna fa%led to com2l! w%th the m%n%m/m cr%ter%a #! 31 .13 . 2112 as st%2/lated #! NA+AR-. %n&ol&ement

Fin2ncin9 under %i4 $eeds Production Pro9r2mme (%PP) )

A consol%dated s2ec%al l%ne of sanct%oned #! 2111P2112 PRO8RA f%nanced for f%nanc%ng cred%t of the O6; Rs. 21 . '1 crore was , CC+s d/r%ng the !ear SEE-S PRO-ECT6ON +ank had NA+AR- %n fa&o/r of

E 9OPP:. Ender

th%s 2rogramme the

Rs. 322,. 1' lakh and reco&ered Rs. 2"*2. ,1 lakh

d/r%ng 2111P2112 . O/tstand%ng %n th%s acco/nt rema%ned at Rs. 3*',. *0 lakh aga%nst the Central Coo2erat%&e +anks as on 31 . 13. 2112.

,2nd4oom Fin2nce )
(or 2rod/ct%on and market%ng of handloom cloth5 +ank had e3tended ref%nance s/22ort to the Central Coo2s. +anks #! a&a%l%ng ref%nanc%ng 2r%mar! Jea&ers Coo2erat%&e Soc%et!. NA+ARhad sanct%oned aggregate cred%t l%m%t of Rs. 2'.1. ,, lakhs %n fa&o/r of 1" -CC+s d/r%ng the !ear 2111P2112. The Et%l%sat%on aga%nst the l%m%t %s f/rn%shed #elow: Cred%t l%m%t sanct%oned #! NA+ARO/tstand%ng as on 31.13.2111 -rawals d/r%ng the !ear Re2a!ments d/r%ng the !ear O/tstand%ng as on 31.13.2111 2'.1.0, .,3.'0 0*2.1' .,3.'0 0*2.1' 30

NA+AR- has not sanct%oned an! l%m%t on #ehalf of A2e3 JCS d/r%ng 2111P2112 for 2roc/rement and market%ng of cloth. ed%/m TermG;ong Term ;oans /nder (arm G Non4(arm Sector to CC+s: The +ank has #een 2ro&%d%ng ref%nance s/22ort to the CC+s for f%nanc%ng %n&estment cred%t /nder farm sector and non4farm sector d/r%ng the !ear 2111P2112. -CC+s had f%nanced to the t/ne of Rs."113.20 lakh /nder farmGnon4 farm sector and a&a%led ref%nance of Rs. "1'1. 2* lakh d/r%ng 21114 2112. Pur:ose >ise Fin2nce for investment credit under from 2nd non5 f2rm sector 2nd 2v2i4ment of refin2nce from *A/AR' durin9 2##45 2##5 8ro/nd ;e&el -%s#/rsement P/r2ose (arm Sector %nor 6rr%gat%on (arm echan%sat%on Plantat%on )ort%c/lt/re -%ar! (%sher! Po/ltr! 6R-P Others (ot24 *"1.11 2,31.11 7 211 211 211 111 .11 *01 556# Target Ach%e&ement No. 11,2 '.0 02" 1"' 313 111 23"1 ,.13 132! "*,, 1 "64 Amo/nt 311.,* 11.,.12 .1."* '*.0, *"..* 112.1" "30.'" '"2.2' 2 "31"# 1210.30 4#1312" Ref%nance a&a%led from NA+AR- 211"4 211' 23.22 0,,.2, 133.," 12..0 12.01 1*.*" ,.2.21 13".," 2#"3161 10',.*' 4#51126

Non4(arm Sector 9%ncl. 2""1 R/ral )o/s%ng: (ot24 !###

Individu24 Fin2nce ;y %$C/ )

31

+ank had also f%nanced to %nd%&%d/als for )o/s%ng5 SS6 En%ts5 EB/%2ment f%nance5 cash Cred%t and other term loan o/tstand%ng as on 31. 13. 211' %s f/rn%shed here/nder.

Part%c/lars Cash Cred%t O&erdrafts N(S 9 T: ;oans )o/s%ng SS6 En%ts ;oan to S)8 (or P/r2oses Total

O/tstand%ng As on 31.13.1" 7 2"'1.," .,'.'3 2,.,."' 4 .'.11 As on 31.13.211' 23',.0. 020.30 3,*.". 4 101..2 "1""..2 112.0."0

Non4Agr%l 3*33.23 0.32.0*

32

6NCO E AN- ERPEN-6TERE

A) The Income a$or so/rces of %ncome of the +ank %s %nterest on loans and

ad&ances. -/r%ng the !ear 2111421125 s/ch %ncome const%t/ted 0..21H of the total %ncome of Rs. 1"*13.,* lakh. 6t ma! also #e o#ser&ed that there %s a r%se %n earn%ng of %nterest of Rs. *.". 1* lakh o&er 2re&%o/s !ear and the growth rate was 'H .Th%s was 2oss%#le d/e to d%&ers%f%cat%on of lend%ng %n non4farm and non4agr%l sector #es%des %ncrease %n d%s2ensat%on of cred%t. 6nc%dentall!5 ;oan o/tstand%ng at the end of the !ear /nder re2ort has gone /2 to Rs. 01113.,* lakh as aga%nst Rs. .311'..2 lakh 92111P2111:. /) EC:enditures )

The total e32end%t/re d/r%ng the !ear after mak%ng 111H 2ro&%s%on for o&erd/e %nterest and #ad de#t reser&e of Rs. 12.".1, lakh amo/nted to Rs. 13.*".235 as aga%nst Rs. 131",.01 lakh d/r%ng the 2re&%o/s !ear. The total %ncrease %n e32end%t/re comes to Rs. ,1*.33 lakh. Th%s was d/e to 2ro&%s%on%ng made for o&erd/e %nterest reser&es #! Rs. 12.31 crore d/r%ng the !ear. The net 2rof%t d/r%ng the !ear 211142112 was Rs. ,"0.'3 lakh as aga%nst Rs.*"0.20 lakh d/r%ng the !ear 211142111 reg%ster%ng a growth of Rs. 1111.31 lakh. The com2arat%&e condensed 2rof%t and loss Acco/nt for last three !ears along w%th the !ear /nder re2ort %s f/rn%shed here/nder. P2rticu42r Income ) 6nterest 7 -%sco/nt Comm%ss%on E3change 7 +rokerage 11"3,.,1 31.,* 13''1.," 2,.1. 1"23".01 31..' 2##252##3 2##352##4 2##45#5

33

Other Rece%2t (ot24 EC:enses ) 6nterest on -e2os%t 7 +orrow%ng Adm%n%strat%&e E32enses Other E32enses (ot24 9 K : Prof%t (ot24

30.". 115#!1"5 ,11*.2.

210.3, 13 " 11" 11,21.11

3"..11 146131 6 11".1.0*

,.1.'1 310'."" 110.3.22 '2'.,3 115#!1"5

01..'* '10.33 131",.01 *"0.20 13 " 11"

03".,2 1""..'' 13.*".23 ,"0.'3 146131 6

7or8in9 C2:it24 )
The work%ng ca2%tal of the +ank com2r%sed share ca2%tal Reser&e5 de2os%t +orrow%ng and other l%a#%l%t%es wh%ch stood at Rs. 1***0.0* crore as on 31.13.211'. &ar%o/s com2onents of work%ng ca2%tal of the #ank d/r%ng last 3 !ears %s f/rn%shed #elow

P2rticu42rs Share Ca2%tal Reser&es -e2os%ts +orrow%ngs Other ;%a#%l%t%es (ot24 8rowth rate of work%ng ca2%tal o&er 2re&%o/s !ear

2##2 5 #3 2*."1 .0.3' '*1.1, "*1.2" **.01 1213.0*

6 to 71C1 2.10 ,."2 "*.'2 3..31 '.'* 111H 20H

2##35#4 31.11 .0.*3 ,31.2, ""1.00 02.,1 13.*.*1

6 to 71C1 2.23 *."* '2.," 31... *.*0 111H 1'H

2##45#5 3,.'2 11..*' .,"..2 '22.00 12'.0. 1**0.0*

6 to 71C1 2.2' *.'1 '2.30 31.31 ,.'" 111H 21H

34

C%MP%$I(I%* %F 7%R0I*- CAPI(A+

Other .H +orrow %ngs 31H

Share Ca2%tal Reser&es 2H ,H

-e2os%t '2H

C2:it24 2deFu2cy ? Perform2nce of %riss2 st2te Coo:er2tive /2n8 ) The Comm%ttee on f%nanc%al sector reforms 1001 and Naras%mham comm%ttee4665 100. %nteral%a5 recommended that the ca2%tal adeB/ac! as a22l%ed the commerc%al #anks %n 6nd%a %n relat%on to the%r r%sk we%ghted assets sho/ld #e made a22l%ca#le to the coo2. +anks. 6t %s w%del! e32ected that these norms wo/ld #e a22l%ca#le to the sched/led state coo2erat%&e #anks w%th effect from 21134 1".

*on5 :erformin9 Assets 2nd :rovisionin9 t<ereof ) The R.+.6 %ntrod/ced the 2r/dent%al acco/nt%ng norms for the stateG central coo2erat%&e #anks from the !ear 100*40, there#! st%2/lat%ng 2ro&%s%on%ng norms of non 2erform%nf assets. The #ank was a#le to com2l! w%th the sa%d norms %n 100,40.5 to 2111412 and earned 2rof%ts as well. 6nfect5 the #ank has made 2ro&%s%on m/ch %n e3cess of the reB/%rements to meet the f/t/re cont%ngenc%es. -eta%ls are as follows :

35

(Rs. In Lakhs) 2##35#4 Total Non 2erform%ng assets Pro&%s%on%ng reB/%red to #e made as 2er R+6 g/%del%nes /nder 2r/dent%al norms Act/al Pro&%so made .023 1 .2 1.,0.*. '321.11 2##45#5 1".1".02 2*...13 '321.11

%verdue Interest Reserve ) To co&er the O.-. %nterest5 the +ank has made 111H 2ro&%s%on%ng #! 31.13.2112 as ma! #e seen from the follow%ng ta#le.
9Rs. 6n ;akhs:

2##35#4 Pro&%s%on reB/%red to #e made aga%nst o&erd/e %nterest Pro&%s%on made 3"23.20 3.11.11

2##45 #5 '120.11 '131.11

Cost of M2n29ement ) cost of management of the #ank was com2/ted at Rs. 11"'.13 lakh d/r%ng the !ear 21134211" as aga%nst Rs. 0'*.03 lakh d/r%ng the 2re&%o/s !ear 211242113 wh%ch was calc/lated at 1.*2H of the work%ng ca2%tal. The com2arat%&e 2os%t%on of cost of management d/r%ng last 3 !ears %s f/rn%shed here/nder : P2rticu42r Cost of anagement H of Cost of anagement %: %%: Jork%ng Ca2%tal -e2os%ts 1.*'H 1.30H 1.*0 1.31 1.*2 1.10 2##25#3 ,.1."0 2##35#4 0'*.03 2##45#5 11"'.13

36

%%%:

+orrow%ng

1.*0H 1.0.H

2.1* 1.1'

2.11 1.1'

%&: ;oans 7 Ad&ances

M2n29ement of Funds ) The #ank had constantl! endea&ored for o2t%m/m /t%l%Fat%on of %ts s/r2l/s L reso/rces and mon%tors f/nds de2lo!ment on da! to da! #as%s. All short term %n&ert%#le s/r2l/ses were 2arked %n h%gh L %nterest !%eld%ng %n&estment a&en/es %n Nat%onal%Fed +anks after meet%ng the cred%t reB/%rements of CC+sG other coo2s. J%th a &%ew to ma3%m%Fe 2rof%t the #ank has started trad%ng %n 8o&t. sec/r%t%es #! o2en%ng C4S8; Acco/nt w%th R+6 thro/gh -()6.

The cost of f/nds5 !%eld on assets5 f%nanc%al marg%n and #reak4 e&en le&el etc. for 2ast three !ears %n %nd%cated o&er leaf : P2rticu42rs 1. <%eld on Assets 2. Cost of (/nds 3. 8ross f%nanc%al marg%n ". %sc. 6ncome '. Cost of anagement 9Amt: H to work%ng f/nd 9A&g: *. R%sk Cost 9Amo/nt: ,. Net f%n%cal arg%n .. +reak e&en ;e&el for work%ng f/nd 0. Act/al le&el of J.(/nd 9A&g: 2##25#3 11.31 *.02 ".3. 1.1, ,.1.'1 1.,, 3111.11 3.1* .012'.11 1112""..* 2##3 5 #4 11.32 ..0, 1.3' 1.1. 112,.0" 1..' 311.11 1.22 .,'1..11 122,21.11 2##4 5 #5 11.10 ..12 2.1, 1.13 1*.'.11 1.0, ,.'.11 1."* 11,.22.11 1"31,0.11

37

Aver29e :er Em:4oyee A :er /r2nc< /usiness %$C/ A A++ CC/ ) %$C/ No. of +ranches Per #ranch +/s%ness 9;akh: No. of em2lo!ees Per Em2lo!ee +/s%ness CC+Is No. of #ranches Per #ranch #/s%ness No of em2lo!ees Per em2lo!ee #/s%ness 311 *11.23 3113 *1.1* 31* .1*.02 31,1 .".1. 31* 0"0.2* 31,1 0,.,1 2##25#3 * 211**.11 23, ',".,0 2##35#4 * 23111.11 23, '.'.1* 2##45#5 . 20,*2.*' 220 ,,0..1

,um2n Resource 2nd M2n:o>er 'eve4o:ment ) The = an2ower> of an! %nst%t/t%on #e%ng %tIs most %m2ortant reso/rce5 w%th a &%ew to 2ro&%d%ng knowledge %n2/ts5 /2 gradat%on of sk%ll5 change the m%nd set and att%t/de and to %nc/lcate a sense of #elong%ngness %n the 2ersonnel %n Coo2. +ank%ng sector %n Or%ssa5 the ACST6 of the +ank %ntens%f%ed %tIs tra%n%ng act%&%t%es to hel2 the Central Coo2. +anksGPACSG;A PS %n the%r endea&o/r to ach%e&e s/sta%ned e3cellence %n 2erformance. The ACST6 alwa!s a%med at de&elo2%ng each tra%nee to f%nd the means to act/al%Fe h%s f/ll 2otent%al thro/gh B/al%t! tra%n%ng so that a 2os%t%&e work c/lt/re %s emerged and the Coo2. +ank%ng str/ct/re #ecomes &%a#le and &%#rant to face the emerg%ng challenges. -/r%ng the !ear 211142112 the ACST6 cond/cted "3 co/rses of 13 d%fferent categor%es and tra%ned ,** 2ersonnel. <ear 10..4.0 10.0401 1001401 1001402 No. of co/rses No. of Prsonnel tra%ned cond/cted 3 13 . 12 20 2'* 311 2,1 38

1002403 100340" 100"40' 100'40* 100*40, 100,40. 100.400 1000411 2111411 2111412 2112413 211341" 211"41' (ot24

0 0 3* , '1 2" "2 '0 '2 *3 2* "* "3 5#3

"". 322 13*1 1'* 221* '2" ,'1 1"11 .,3 121, 31* 13,0 ,** 125 5

Recogn%F%ng the contr%#/t%on of ACST6 towards the de&elo2ment of h/man reso/rce %n Coo2. +ank%ng Sector5 the State 8o&ernment 2ro&%ded a grant of Rs.1.'1 ;akh %n 100"40'5 Rs.2.11 ;akh %n 100'40* and Rs.1.11 ;akh %n 100*40, from the state #/dget. The AN+AR- also sanct%oned f%nanc%al ass%stance of Rs.*.32 ;akh d/r%ng 100"40'5 Rs...3. ;akh %n 100'40* Rs.11.,0 ;akh %n 100*40,5 Rs.*.2" ;akh %n 100,40.5 Rs.*.1. ;akh %n 100.4 005 Rs.".*1 ;akh %n 1000421115 Rs...', ;akh %n 2111411 and ,.11 ;akh d/r%ng 2111412. The 6nst%t/te has #een de&elo2ed as a re2os%tor! of knowledge. 6n %tIs endea&o/r %n f/rtherance of +ank%ng5 Coo2. management42rofess%onal%sat%on5 the %nst%t/te #ooklets on N.6. Act5 O.C.S. Act5 -.A.P.5 o&ement and has 2/#l%shed

%n% +ank R/les5

2r/dent%al Norms5 etc. and has as m/ch as 1.' =)ando/ts> on &ar%o/s s/#$ect. =8/ard (%les> on ., +ank%ngGCoo2.5 etc. all%ed

39

s/#$ects

are

a&a%la#le

w%th

the

ACST6

for

reference

of

Coo2eratorsG#ankers and research scholars.

(r2inin9 :ro9r2mmes conducted durin9 t<e ye2r 2##45#5 $41 *o 1. *2me of t<e (r2inin9 Pro9r2mmes conducted (2r9et 9rou: *o1 of courses :42nned 2 (ot24 :ersons tr2ined "3

C/stomer ser&%ce and -CC+ Staff #eha&%o/ral sc%ence Or%entat%on Programme women. Jomen Tra%n%ng Off%cers 7 for Staff of -CC+s

2.

'"

3.

Tra%n%ng Programme on Pr/dental Norm for A/d%tors of A/d%otrs of Coo2erat%&e Coo2erat%&e -e2artment -e2artment Tra%n%ng Programme Staff of CC+s on Pr/dent%al Norms A22ra%sal ethodolog! A22ra%sal ethodolog! -oc/mentat%on
Or%entat%on Programme +ank%ng

*'

". '. *.

' ' '

,3 0* *'

OSC+ off%cers and Staff of CC+s %n% +ank Personnel

Tra%n%ng on R/ral

"

"*

.. 0. 11. 11.

C/stomer or%entat%n and arket%ng of +ank Staff of CC+s Ser&%ces Ta%n%ng Programme on Staff of CC+s Self )el2 8ro/2s Tra%n%ng Programme on Com2/ter Staff of CC+s =sama#a!a> 2ackage Em2ower%ng E3cellence Ser&%ce Staff of CC+s

" " 1 "

'2 *' 2, 111

40

12. 13.

8eneral +ank%ng Tra%n%ng of E.P. Programme

Staff of CC+s Staff of CC+s

3 1

". 31

-E*ERA+ ? 'E.E+%PME*(A+ I*I(IA(I.E$

Introduction of t<e system of Annu24 M%& from 1"" 5"! ) P/rs/ant to the anno/ncement of the )onI#le (%nance entered %nto s/#seB/entl! %n%ster of

6nd%a %n the #/dget S2eech 100"40' %n the Parl%ament5 NA+AROE w%th 8o&t. of Or%ssaGOSC+ on 1.1,.100" and w%th -CC+Is on 1,.1..100' w%th a &%ew to

re&am2%ng the coo2erat%&e cred%t str/ct/re %n the State. The 2er%od%cal re&%ews /ndertaken #! NA+ARre&ealed

%m2erat%&e need for %ntrod/ct%on of Ann/al

OE to fac%l%tate t%mel!

re&%s%on of all f%nanc%al 2arameters of -AP e&er! !ear on a real%st%c manner to ach%e&e &%a#%l%t!. Th%s e3erc%se w%ll ena#le the #anks to correct the%r 2os%t%ons %n asset and l%a#%l%t! management5 ton%ng /2 cost control s!stem5 streaml%n%ng lend%ng 2ol%c! and 2roced/re and a#o&e all %m2ro&%ng staff 2rod/ct%&%t!. At the %nstance of NA+AR-5 OSC+ and 1, CC+s %n the State ha&e #een s%gn%ng ann/al OE from the !ear 100,40..

%:er2tion of GMini /2n8H $c<eme 2t PAC$ 4eve4 to Mo:5u: rur24 s2vin9s ) 6n %ts endea&o/r to 2romote the reso/rce mo#%l%Fat%on #! the Coo2. +ank%ng Sector %n Or%ssa5 the OSC +ank enco/raged the Central Coo2erat%&e +anks to %ntrod/ce 2ros2ect%&e de2os%t schemes s/ch as were da%l! de2os%ts5 as 2ens%on r/ral schemes5 centres etc. for PACSG;A PS %dent%f%ed 41 growth

mo#%l%sat%n of r/ral de2os%ts. Accord%ngl!5 = %n% +anks> were o2ened at PACSG;A PS le&el and r/ral s/r2l/s f/nds were #e%ng mo22ed /2 and a s%Fa#le amo/nt to the t/ne of Rs. 3"302.' lakhs co/ld #e mo#%l%Fed thro/gh .1' The <earw%se 2rogress of %n% +anks #! 211"41'. mo#%l%Fat%on of de2os%t s%nce

%ntrod/ct%on of the

%n% +ank Scheme are g%&en here /nder :

3e2r

*o1 of Mini /2n8s %:er2tin9

'e:osit Mo;i4ised (Rs. In Lakhs) 310..11 "0'3.11 ,3,1.11 11113.." 1'12,.11 1."2,.3. 230.".*, 31133.11 3"302..' %n% +anks wh%ch

100*40, 100,40. 100.400 1000411 2111411 2111412 2112413 211341" 211"41' The +ank framed a

",' '03 *," ,31 ,'2 .11 .10 .21 .1' odel R/les for o2erat%on of

has #een a22ro&ed #! the Reg%strar of Coo2. Soc%et%es5 Or%ssa &%de letter No. 1'1"" dt. 21.1*.00 and has #een comm/n%cated #! the +ank to all concerned for g/%dance. Introduction of 'e:osit -u2r2ntee $c<eme for 'e:osit in PAC$ ) P/rs/ant to the recommendat%on of ACRC and a%m%ng at

s/sta%ned growth rate of de2os%ts o&er 2ast few !ears at PACS le&el %n Or%ssa %nd%cat%ng the conf%dence re2osed #! the 2eo2le %n the grass root le&el short term coo2. Cred%t str/ct/res5 the state 8o&t. 6ntrod/ced a =-e2os%ts g/arantee Scheme> for %ndemn%f!%ng de2os%tors of PACS /2 to Rs. 315111G4 w%th effects from 22.10.0".

42

A Cro/2s f/nd has #een esta#l%shed at the -CC+ le&el w%th contr%#/t%ons from the state 8o&t. OSC+5 -CC+ and PACS. 3e2r 211142112 211242113 21134211" 211"4211' Amount contri;uted (Rs1 In 428<s) 0.3*3 12.1" 1'.11 1*.11

Infr2structure Fin2nci24

deve4o:ment

of PAC$

o:er2tin9 out

Mini /2n8s of

2ssist2nce

from

*A/AR'

C'FA$t2te

-ovt1A%$C/ACC/ NA+AR- 2ro&%ded f%nanc%al ass%stance of Rs. *1.11 lakh d/r%ng 100' L 0* to 113 PACSG;A PS ha&%ng = %n% +anks> %n Or%ssa for de&elo2%ng the%r %nfrastr/ct/re. The Or%ssa state coo2erat%&e #ank the concerned central coo2. +anks also 2ro&%ded Rs. 1'5111G4 and =Rs.'5111G4 res2ect%&el! to each PACS wh%ch ena#le them %n #/%ld%ng conf%dence among r/ral de2os%tors. 6n the !ear 100*40,5 NA+AR- has alos sanct%oned Rs. *1.11 lakhs o/t of C-( for %nfrast/re de&elo2ment of 11*.PACSG;A PS and has released *1 lakh d/r%ng 100*40, and an amo/nt of Rs. *1.11 lakh was released d/r%ng 211142112 %n fa&o/r of PACSG;A PS. 8o&t. of Or%ssa ha&e also 2ro&%ded f%nanc%al ass%stance o/t of state Plan for o2e%n%ng of %n% +ank %n the PACS G ;A PS. (Rs. In Lakhs)
3e2r *o1 of PAC$ 2ssisted Amount of 2ssist2nce :rovided

1000411 2111411 2111412 2112413 211341"

11 "3 111 111 1'1 43

1.11 ".20 0.0. 11.11 1'.11

211"41' (ot24

01 443

..00 5#126

A)

Fin2nci24 ;r2nc<es)

2ssist2nce

to

'CCC/s

for

f2ce

4ift

of

t<eir

The +ank %m2lemented a scheme %n 100" 40' and 100'40* for 2ro&%d%ng f%nanc%al ass%stance to one #ranch of each CC+ 2er !ear for face l%ft. Ender th%s scheme5 3" #ranches got ass%stance of Rs. 1,.11 lakh wh%ch ena#le the #ranches to e3tend #etter c/stomer ser&%ce and %ncrease the%r t/rno&er. -/r%ng 211142112 Rs. 1, lakh has #een 2ro&%ded to each #est #ranch of the 1, -CC+s for the%r facel%ft. +es%des one staff of the #ranch of each CC+ has #een awarded w%th Rs. '111G4 for mo#%l%F%ng h%ghest de2os%t d/r%ng de2os%t mo#%l%Fat%on fortn%ght. /) %:enin9 of M2<i42 /r2nc<es ;y CC/s)
(Functionin9 of >omen 'eve4o:ment ce44 in %$C/)

J%th a &%ew to %n&ol&%ng the Jomen %n coo2erat%&es for the%r soc%o4Econom%c -e&elo2ment5 all the 1, CC+s5 %n Or%ssa ha&e o2ened ah%la #ranches +erham2/r5 Nh/rda5 Sam#al2/r5 +o/dh ah%la and +olang%r CC+ ha&e s/#seB/entl! o2ened second #ranches and th/s5 22 d/r%ng the !ear /nder re2ort %n the state. State 8o&t. has 2ro&%ded f%nanc%al s/22ort of S Rs. 1."1 lakh to each ah%la #ranches for %nfrastr/ct/ral de&elo2ment and Rs. 315111G4 towards manager%al s/#s%d! 2er !ear and Rs. 115111G4 as one t%me ass%stance for tra%n%ng. Or%ssa state coo2. +an has 2ro&%ded Rs. *..1 lakh to 1, ah%la #ranches. ah%la a #ank ha&e mo#%l%Fed de2os%t of Rs. '*1*.., lakh and 2ro&%de f%nanc%al

ah%la #ranches of CC+S are f/nct%onal

44

ass%stance to the t/ne of Rs. ,30.2" lakh to women #enef%c%ar%es #! 31.13.2112. A women -e&elo2ment cell has #een esta#l%shed %n Or%ssa state coo2erat%&e #ank to g/%de and co4ord%nate the act%&%t%es of central coo2. +ank %n cred%t l%nked women de&elo2ment 2rogramme. NA+AR- has agreed to 2ro&%de f%nanc%al ass%stances of Rs. 1.,' lakh 2er !ear towards salar! of the em2lo!ees of women de&elo2ment cell. C) Incentive $c<eme for recovery of 4o2n ) J%th a &%ew to %nf/se com2et%t%&e s2%r%t among the f%eld workers5 the comm%ttee of management of the +ank ha&e a22ro&ed an %ncent%&e scheme for reco&er! of coo2. ;oan. Ender the ca2t%oned scheme follow%ng f%nanc%al #enef%t was a&a%la#le for the CEO and other staff of PACSGlam2s. +ranch anagers and Adm%n%strat%&e 6ns2ectorsGS/2er&%sors of the CC+ ach%e&%ng reco&er! of a 2art%c/lar le&el. Categor! of Staff co&ered /nder scheme %s ment%oned #elow. -/r%ng the !ear 211142112 an amo/nt of Rs.''.33 lakh was s2ent towards s/ch %n&ent%&e as aga%nst Rs.*.1' lakh s2ent d/r%ng 2111411. O/t of ''.33 lakh %ncent%&e 2a%d d/r%ng 21114125 Rs. 31.1* lakh 2a%d for %ncent%&e to staff and Rs. 2".2, lakh for &eh%cle e32enses. PAC$ E +AMP$ (Rs. In Lakh) 6ncent%&e for Em2lo!ees of PACSG;A PS Part%c/lars Reco&er! a#o&e ,1H 1111 1211 Reco&er! a#o&e .1H 1211 1'11 Reco&er! a#o&e 01H 1'11 2111 Reco&er! a#o&e 111H 2111 2'11

A#o&e 2 lakh #/t less than ' lakhs A#o&e ' lakh #/t less than 11

45

lakhs A#o&e 11 lakh #o/t less than 2' lakhs A#o&e 2' lakh 1'11 2111 2'11 3111

2111

2'11

3111

3'11

')

M2n29eri24 Assist2nce to 'CC/s) S%nce 1 st a2r%l5 100* OSC5 +ank %s meet%ng the salar! of 0 off%cers of OSC +ank 2osted as Secretar! of d%fferent -CC+s. (rom 10004 2111 OSC+ has #een 2a!%ng the salar! of all CEOs of -CC+s. E32end%t/re %nc/rred on th%s acco/nt d/r%ng 2ast ' !ears were as follows. 3e2r 2111411 2111412 211242113 21134211" 211"4211' Amount (Rs. In Lakhs) 1*.21 ",.,. 3.."' 1",.11 2,.1'

-overnment $<2re C2:it24 Contri;ution out of *RC (+(%) Fund) The Short term coo2. cred%t str/ct/re %n Or%ssa cont%n/ed %ts efforts to #/%ld /2 a good share ca2%tal #ase and th%s hel2ed to o#ta%n a s%Fea#le match%ng 8o&ernment contr%#/t%on to the share ca2%tal from o/t of NRC 9;TO: f/nd. -/r%ng 211142111 the 8o&t. had sanct%oned share ca2%tal

ass%stance of Rs.0*,.11 lakhs #/t released Rs."*'.00 lakh onl! %n 2112413. S%m%larl! 8o&t has sanct%oned share ca2%tal ass%stance of Rs.1,*0.01 lakhs for 2111412 wh%ch %s not released #!

46

31.13.12. the share ca2%tal ass%stance sanct%onedGreleased #! the State 8o&t.

(1M1E Ce44 ) -/r%ng 2ast few !ears there has #een a d%st%nct r%se %n the loan 2ortfol%o of the +ank %ncl/d%ng schemat%c and non4farm sector f%nanc%ng. (or 2ro2er techno4econom%c +ank has a22ra%sal created a and 2ost d%s#/rsement s/2er&%s%on5 Techn%cal5

on%tor%ng and E&al/at%on Cell 9T%me: w%th f%nanc%al s/22ort of NA+AR-. 6nd/str! and )andloom s2ec%al%sts man th%s cell. The State 8o&t. has 2osted one @o%nt -%rector of 6nd/str%es and one -e2/t! -%rector of Te3t%les to f/nct%on as S2ec%al%sts %n the T6 E Cell.

(ri;24 'eve4o:ment Ce441 ) J%th a a &%ew to 2ro&%de adeB/ate cred%t s/22ort to tr%#als5 at the %nstane of NA+AR- the +ank has 2osted a as Tr%#al Cred%t S2ec%al%st. anager to f/nct%on

Introduction of Coo:1 /2n8s Mutu24 Ar2n9ement $c<eme for %riss2 (C%/MA$%) ) To %ncrease the non4f/nd #ased earn%ng of CC+s and to 2ro&%de #etter c/stomer ser&%ce to %ts de2os%torsG cl%ent5 %ss/e of --s #! Coo2. +anks w%th%n the State was a long felt need. Ender the aeg%s of the OSC +ank a state le&el m/t/al arrangement scheme was %ntrod/ced w%th effect from 1 st @an/ar!5 100* on a 2%lot #as%s and the scheme has ga%ned moment/m. 6t %s 2ro2osed to co&er all the #ranches of the -CC+s and #ranches of OSC+ %n d/e co/rse. 11* Nos. of #ranches of -CC+s and all #ranches of OSC+ ha& #een co&ered /nder the scheme. 47

Recovery of Coo:er2tive dues in %riss2 ) Poor le&el of reco&er! has #een %dent%f%ed as one of the ma$or constra%nts affect%ng cred%t flow and &%a#%l%t! of the PACSG;A PS and CC+s. -es2%te %m2lementat%on of 6ncent%&e Scheme for 2ro&%d%ng cash award to the CEOGother staff of PACS and + G-m. 6ns2. 7 S/2er&%sors of CC+s for reco&er! of Coo2. ;oan there %s l%ttle %m2ro&ement %n reco&er! %n 211142112. (ollow%ng ta#le %nd%cate the reco&er! trend d/r%ng last ' !ears 9@/l! to @/ne:. Recovery durin9 42st 3 ye2rs 3e2r 211142112 211242113 211"4211' PAC$ .rs1 Mem;er 'em2nd '23.., ,1*.00 0"0..1 Co44ection 2.2.11 30..,. *22.01 6 '" '* ** /2n8 .rs1 $ociety 'em2nd '00.'2 ,0,.*' 11,..'1 Co44ection 2*3."' 3,".'2 '0'.2* 6 "" ", ''

$te:s t28en ;y %$C/ to ste: u: recovery ) -/r%ng 2111421125 Or%ssa State Coo2erat%&e +ank organ%Fed monthl! re&%ew meet%ng of the CEOs of the CC+s and -RCS. Per%od4w%se target for each CC+ was f%3ed and ach%e&ement re&%ewed. +ank has o/tl%ned &ar%o/s strateg%es to #e ado2ted for ste22%ng /2 reco&er!. A $o%nt reco&er! dr%&e was la/nched at the #ehest of the#ank d/r%ng the month of -ecem#er5 2111 to arch5 2212.

Pu;4icity t<rou9< E4ectronic Medi2 for Recovery 2nd 'e:osit Mo;i4is2tion) +ank has 2re2ared fo/r ad&ert%sement f%lms for telecast%ng %n the electron%c med%a for %m2ro&%ng reco&er! and #oost%ng /2 %n&estment and de2osts of CC+s and PACS. (or re%m#/rsement of e32end%t/re on s/ch telecast%ng5 NA+AR- has sanct%oned Rs.'..* lakhs5 o/t of Coo2. -e&elo2ment (/nd. The ad&ert%sement f%lms are #e%ng telecasted.

48

Com:uteriD2tion Pro9r2mme ) (or %m2ro&%ng the B/al%t! of c/stomer ser&%ce5 streaml%n%ng 6S and

f%nanc%al acco/nt%ng s!stem5 Total +ank A/tomat%on 9T+A:has ass/med to 2r%or%t!. All #ranches %ncl/d%ng ).O. ha&e #eenf/ll! a/tomated. A2art from the a#o&e5 "* Nos. of staff of -CC+s ha&e #een tra%ned for handl%ng com2/ter. The +ank has met the ent%re cost for de&elo2ment of software #! the C C ;td. Calc/tta for a/tomat%n of the #ranches and head off%ces of the -CC+s. The software has #een s/ccessf/ll! %m2lemented at +ank% CC+ on a 2%lot #as%s. Ro4e in incre2sin9 29ricu4tureB :roduction 2nd :roductivity ) Cred%t %s the ke! %n2/t for ste22%ng of 2rod/ct%on and 2rod/ct%&%t!. The #ank has5 o&er 2ast few !ears5 ens/red adeB/ac! and t%mel%ness %n cred%t del%&er!. (low of 2rod/ct%on cred%t d/r%ng the 2ast " !ears was as /nder. 3e2r 2111412 2112413 211341" 211"41' *o1 of PAC$ fin2nced 0<2riff 2,1, 2"0, 2,10 2*.' R2;i 2302 2',' 231. 2'30 *o1 of Mem;ers fin2nced 0<2riff "2"',' 30,"1" "*32*0 "'.'12 R2;i 21''12 2,'.12 1,,1"" 2.,1'1 Aver29e 4o2n :er PAC$ 0<2riffi ,.," 11.' 11.". 11.*, R2;i ".00 *.3' '.'2 ...2

3e2r

(ot24 Cro: 4o2n dis;ursed "in 428<s 0<2riff R2;i

Aver29e 4o2n 2dv2nced :er mem;er 0<2riff R2;i

%f t<e tot24 2dv2nces G/H com:onent (in 428<s) 0<2riff R2;i

Per mem;er off5 t28e of G/H com:onent (Rs) 0<2riff R2;i

21114 12 21124 13 21134 1" 211"4 1'

210*".'* 2*2'1.1* 311.,.3* 3132".1*

1103..1* 1.1' 1*3,2.*' 1.1, 12,"..0. 1.1, 22300.13 1.1,

1.1* 1.1* 1.1, 1.1.

*1,*.," *01'.11 .1'0.*, ,11..""

'"*'."3 1.11 *31'.3" 1.12 "..1.0' 1.12 ,"21.3' 1.12

1.13 1.12 1.13 1.13

49

,e4:in9 t<e 9ro>t< of ,2nd4oom Production ) 6n Or%ssa5 )andloom 2ro&%des em2lo!ment to large n/m#er of ho/sehold and %s cons%dered ne3t to agr%c/lt/re. The +ank has f%nanced th%s letter #! s/22ort%ng the 2rod/ct%on and market%ng act%&%t%es of *22 PJCS. The d%str%ct w%se deta%ls of n/m#er of loans f%nanced5 2rod/ct%on of handloom fa#r%cs and em2lo!ment generated %s g%&en #elow :

$4 *o1 1. 2. 3. ". '. *. ,. .. 0. 11. 11. 12. 13.

*2me of t<e undivided 'istricts +alasore +olang%r C/ttack -henkanal 8an$am Nalahand% Neon$har Nora2/t a!/r#han$ Ph/l#an% P/r% Sam#al2/r S/ndergarh (ot24

2##3 5 #4
*o1 of +ooms (:ro91) Production (+28< $F1mts1) Em:4oyment (Pro9) *o1 of +ooms (Pro91)

2##4 5 #5
Production (+28< $F1mts) Em:4oyen t (Pro91)

*31* 1'"31 10.21 20.1 *102 '321 21.1 13.* 3'2, "2," 1*0*' 1.2*2 00" 1#344"

2'.03 223.'1 112."3 13..0 3,.'1 3.31 '.." 1."" ..'0 ".3' ,*.3* *1*0 ".3* 3 61!3

12*32 31.*1 30*"2 '0*2 121." 11*.2 "1*1 2,,2 ,1'" .'". 33031 3*'2" 100. 2#6!"!

'.0' 1.,"3 21,2" 200* '*', '321 21*2 1"3, 3'01 ""*2 1'01. 1."01 11*3 1#6552

21.,0 22.." 11*.*3 11.*. 2'."" 2.'1 ".23 1.'2 '.01 '.03 *3.02 '1.'. ".", 324 131

11,0* 3,".* "1"". '002 1131" 11*"2 "32" 2.," ,1.1 .02" 31.1* 3*0.2 232* 2131#4

%$C /2n8 ,ousin9 4on2 $c<eme ) On the e&e of the Cele#rat%on of the 8olden @/#%lee of the +ank %n 100.5 a c/stomer fr%endl! ho/d%ng scheme was %ntrod/ced for %nd%&%d/als for own%ng a ho/se #! a&a%l%ng loan on eas%er terms.

50

)o/s%ng f%nance has ga%ned moment/m and the #ranches ha&e 2ro&%ded s/#stant%al amo/nt of cred%t for acB/%s%t%onGconstr/ct%on of ho/se. ,um2n Resource 'eve4o:ment $tr2te9ies ) The +ank has entered %nto the 21 st cent/r! w%th a cor2orate &%s%on to #ecome a strong and &%#rant #ank and to lead the S.T. Coo2. Cred%t Str/ct/re to atta%n s/sta%na#le &%a#%l%t! #! ser&%ng the agrar%an econom! of the State. 6n order to 2re2are the h/man reso/rces to sho/lder h%gher res2ons%#%l%t!5 the ACST6 of the +ank cond/cted ad&anced hard tra%n%ng 2rogrammes for Off%cers of the +ank. J%th the hel2 of NA+AR- one O-6 2rogramme was also cond/cted %n the #ank where%n cross sect%on of em2lo!ees 2art%c%2ated.

*AF$C%/ *2tion24 A>2rd to %$C /2n8 ) The NA(SCO+Is s2ec%al award of OETREAC) %.e. the e3tent of %n&ol&ement of the OSC+ and all %ts aff%l%ated -CC+s /nder &ar%o/s lend%ng 2rogrammes5 growth of the OSC+ and all %ts aff%l%ated -CC+s /nder &ar%o/s lend%ng 2rogrammes5 growth of ad&ances5 f%nac%ng weaker sect%ons5 etc. for the !ear 100"40'5 100'40*5 100*40, and 100,40. was #agged #! the +ank.

*A/AR'Is /est Perform2nce A>2rd ) The NA+AR- had also recogn%Fed the e3cellent 2erformance of the +ank #! award%ng the +est Perfomance Award for the !ear 100,40. 7 0042111. $tudy on t<e Functionin9 of Mini ;2n8s in %riss21 At the #ehest of NA+AR- and /nder the Char%mansh%2 of the anag%ng -%rector5 OSC +ank5 a st/d! has #een %nst%t/ted on the f/nct%on%ng of the %n% +anks %n Or%ssa. Cons%der%ng the s/ccess 51

of PACS %n Or%ssa %n mo2%ng /2 r/ral sa&%ngs thro/gh the st/d! team had e3am%ned %nteral%a5 the &%a#%l%t! of the recommendat%on of the comm%ttee5 a re&%sed at -CC+GPr%mar! le&el.

%n% +anks5 %n% +ank

o2erat%on5 de2lo!ment of f/nds5 staff%ng 2attern5 etc. Pers/ant to %n% #ank r/le has #een form/lated5 a22ro&ed #! the Reg%strar and %m2lemented

Introduction 0iss2n Credit C2rds in $( Coo:1 Credit $ector in %riss21 6n t/ne w%th the dec%s%on of the 8o&t. of 6nd%a to %ss/e =N%ssan Cred%t Cards> to farmers to meet the%r cred%t needs for cro2 2rod/ct%on and other all%ed 2/r2oses5 the OSC +ank form/lated the 2ol%c! and %ntrod/ced the N%ssan Cred%t Card %n the ST Coo2. Cred%t Str/ct/re. Sem%nars were organ%Fed at CC+ headB/arters to del%#erate on the %ss/e and the scheme has #een la/nched w%th effect from Ra#%5 100.400. 1152050," nos. of NCC ha&e #een %ss/ed #! 31.13.2112. Or%ssa stood at 3 rd %n co/ntr! %n d%str%#/t%on of NCC ne3t to Andhra Pradesh and Ra$asthan. 6n Or%ssa5 ent%re short term cred%t %s d%s2ensed thro/gh NCC onl!. The +ank has also fac%l%tated N%ssan Cred%t Card holders meets thro/gh o/t the nooks and corners of the state where%n off%cers of the -CC+s5 sen%or off%cers of OSC+ and Agr%c/lt/re -e2artment 2art%c%2ated. +ottlenecks on smooth o2erat%on of the scheme and d%s2ensat%on of t%mel! and adeB/ate cred%t were %dent%f%ed and correct%&e act%ons were %n%t%ated then and there.

%r92nis2tion 2nd 4in829e of se4f ,e4: -rou:s 6n order to e&ol&e g/%del%nes and 2roced/res for 2ro&%d%ng cred%t to the down trodden thro/gh Self )el2 gro/2s5 the #adnk cond/cted a st/d! on f/nct%on%ng of s/ch gro/2s %n North 2"

52

2ragana and )ooghl! -%str%cts of Jest +engal. On the #as%s of f%nd%ngs of the st/d!5 g/%de l%nes were %ss/ed5 worksho2s were organ%Fed at OSC+ and -CC+ le&el to fac%l%tate organ%Fat%on and l%nk%ng of S.).8s #! these concerted efforts5 the ECC+s co/ld organ%Fe .13' S)8s5 l%nked 2'0 S)8S and 2ro&%ded Rs.220.2. ;akhs as loan to these gro/2s #! 31.13.2112. 024in92 0iss2n -o4d C2rd) The #ank has %nno&ated the /n%B/e Nal%nga N%ssan 8old Card scheme to recogn%Fe and reward the good re2a!ment ha#%ts of farmer mem#ers of PACS. A 2ackage of fac%l%t%es %ncl/d%ng less %nterest on all t!2es of loans5 free acc%dent %ns/rance of Rs.2'111.115 ann/al lotter!5 e32os/re &%s%ts5 freedom to 2/rchase fert%l%Fer and 2est%c%des from an! reta%l o/tlet and schemat%c lend%ng on a 2r%or%t! #as%s. The 8o&t. of Or%ssa a22ro&ed the scheme wh%ch was la/nched on 2*.1".2111. The scheme has el%c%ted tremendo/s res2onse from the farm%ng comm/n%t%es. +! 31.13.21125 225.13 farmer mem#ers were 2ro&%ded w%th the card. Pro9ress of t<e %riss2 $t2te Coo:er2tive /2n8 over 52 3e2rs 2t 2 942nce 3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal 4"55# 3.'3 1.'' ".1. 12.32 2*.'1 ".3. 3'.*" 1.2* *3.,0 5#551 ".*1 1.12 '.*2 1'.31 33.11 ".,1 "3.*2 1.2. ''."2 51552 '.11 1.'2 *.'2 1'.", 3".11 '.21 "..2' 1.3' ',.11 52553 '.2" 1.0* ,.21 10.'1 2".11 ..1. "1.1' 1.3, '2.1* 53554 '.2. 2.30 ,.*, 21.,. 33.11 11.1' "*.,0 1.30 *".02 54555 '.'3 2.01 .."" 32.,0 33.00 11.0. '0.20 1."2 ,,.11

53

Net Prof%t 9K: ;oss 94: -%&%dend -eclared 9H:

K1..2 ".'

K1.'3 ".'

K1.,1 ".'

K1.,1 ".'

K1.,* ".'

K1.*1 ".'

3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal Net Prof%t 9K: ;oss 94: -%&%dend -eclared 9H:

55556 *.1. 2..' ..03 *2..0 "2.02 1'.10 .1.*, 1.", 11.."0 K1.1' '.1

5655 0.2, 3."1 12."1 111.*2 "3..' 21.22 .*.3" 1.'. 1*".0. K2.11 *

5 55! 1".03 ".'1 10."" 11'.1' *".2' 2.."' 11,.'. 1.*" 21".." K3.11 *

5!55" 1...0 *.30 2'.2. 13*.*" *,.1" 3..'" 1"*.." 1.,* 2'1..* K3.,' *

5"56# 21.'* ,.,* 20.32 1*1.10 ,'.1* ''.*2 101.,* 1..' 2.".0, K3.*, *

6#561 23.21 11.", 3".*. 1*"."' 131.23 *1.1' 2"".2. 1... 3"1.,1 K3.03 *

3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal Net Prof%t 9K: ;oss 94: -%&%dend -eclared 9H:

61562 2,.13 1".10 "1.22 1**.*1 1.*.3, 3..,* 313.21 1.0* "1".12 K".12 *

62563 3,... 1'."1 '3.20 210."* 2.".*3 ,,.11 "2'."3 1.1" '*2.10 K'.," *

63564 "*."" 1,.01 *".3' 21,.2' 3**.'2 .2.2" '31.." 1.21 *.1.1, K,.2, *

64565 '1.10 21.., ,2.1* 211.1, ",3.*, 02.1. '.".32 1."* ,03.,0 K..31 *

65566 '"."' 2,.1' .2.'1 2.2.'* '21.'0 11".*' ,11.*, 1.*0 021."' K...0 *

6656 '0."1 ,0.1' 0..'* 2''.'1 '3..3" 12*.3' ,1".,, 1.02 01..*0 K0.11 *

54

3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal Net Prof%t 9K: ;oss 94: -%&%dend -eclared 9H:

6 56! ,1.12 '1..' 122.., 2.2.3" '*..,1 130.,* .1,.1. 2.2* 0.0.2. K0.11 *

6!56" ,'.2" .2.,1 1',.0' 3'.."3 "*1.1* 1,0.'. ,*..1' 2.". 00*.1. K0.0. *

6"5 # ,0.2" 121.0' 211.10 322.02 '1".'3 212.30 *02.,3 2.." 0"..,2 K0.0. *

#5 1 ,0.*3 1"'.* 22'.20 3"1.20 1.3."* 231.1. '10.3, 3.1, ,,1.21 K11.*1 *

15 2 .3.0" 1*,.10 2'1.13 "0'.1* 1'2.23 2"1.23 *2,.13 3.0, 021..0 K11.0. *

25 3 0*.20 1,0.,2 2,*.11 *31.'* 313."" 2*1.1. .23.'3 "."' 1230.21 K".00 3

3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal Net Prof%t 9K: ;oss 94: -%&%dend -eclared9H:

35 4
00."' 1."."3 2.3..* *.1.,1 3'...3 2*,.22 ....32 '.1* 13'0.31 K'.*" 2

45 5
11"..3 101."1 20'.23 ,00.'1 '"1..3 2*0.'0 120,.20 *.'1 1*.1.,0 K1..* N%l

55 6
123.02 102."* 31*.3. 1101.*2 *"1.*' 31'.", 1'1".1. ..., 2102.31 K0.'3 3

65
1*1.30 21".,, 3*'.1* '"*.3* 1".*."2 '1..", 2,,'.'1 11.*" 3",0 K22."" '

5 !
21,.3* 220.3" ""*.,1 1.02.,* 1*.2."0 '1".2' 3132..* 12.,, "230.13 K31.11 '

!5 "
2,2.1. 2*2.21 '"3.30 2321.3, 222'.02 ',1.1* "2*2.,' 22.." '1,1.'' K"1.31 *

55

3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal Net Prof%t 9K: ;oss 94: -%&%dend -eclared9H:

"5!# 3,1.." "11.3* ,.2.21 3122.1. 3,,,."' *.1.'* *,*1.*3 21.2* ,,01.,0 K''.1* *.'

!#5!1 "",.." *1".33 11'1..1 3"03.13 '2*1.1. ,03.11 .'.1.32 2,.*, 1113".*, K,0.'1 *.'

!15!2 "",.", .2,."2 13"2.** 3..*.*1 *1.2.0' 010..1 113',.0. 30..1 11,30.*1 K01.'1 *.'

!25!3 *13..1 11''.1* 1,*...* 33,*."1 01,1.*. 0*.."" 13',1."1 "1.'2 1'110.*. K0,."0 *.'

!35!4 ,1,.** 1*1*.01 231".'* 20.'.*" 11'3*.*1 122".'1 1'112.,2 "0."" 1*,*2.3, K.2.11 '

!45!5 ,3*.1. 10*..1' 2,1".13 31,,.,2 11.'*.*' 1'12.'. 1'11'.02 02.13 1,*2..'2 K'*.11 3

3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal Net Prof%t 9K: ;oss 94: -%&%dend -eclared9H:

!55!6
,"3.10 212*.'0 2.*0.,0 2010.23 11"1.3, 1'*1.00

!65!
,"..31 222*.1" 2.,"."" "113.23 012..02 1".'..*

! 5!!
,*3..0 2"33."2 310,.31 "32*."3

!!5!"
,,'.0. 2"0*.'. 32,2.'* "*11.11

!"5"#
,01.0. 2,'2.3' 3'"2.30 "*'3.1"

"#5"1
.2*.12 20.*.*. 3.12.,1 "0,1.2"

11'.".33 12111.11 1"211.1. 112'1.1, 1,11.1. 1031.13 21'*.13 2,20..3

1"'22.,1 1"102.3* 1'001.0. 1,'10.3* 10"3".,* 12"**.2' 0,.32 .,.'2 111.3, 131.,. 11*.*' 1*'.1*

1,123."" 1,2*1.2, 10'1,.01 21'*"..0 2"1.1.*" 22*.2.,* K"0.'. 3 K'..31 3 K',.12 3 K',.12 3 K*1."3 3.' K.".22 3

56

3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal Net Prof%t 9K: ;oss 94: -%&%dend -eclared 9H:

"15"2 .20.30 311".12 30"3.'1 ,3'*.". 111,,., " 3''".01 1'213.3 3 101.32 2'12".' 1 K,'.1* 3.'

"25"3 ."1.13 3122.*, 30*3.,1 .311.22 11*"1.. 1 30.".*1 1*'"".1 * 2,,12 2'013., * K'..,1 3

"35"4 ."..*. 3,*2.". "*11.1* 00'1.1* 113'1.2 1 '""*.0" 100.0.' , 20,.2' 2."1.." 1 K,'.1' 3

"45"5 .'".13 "101.11 '1"1.1" 1231".. 1 1*"1'.1 * *0"1."1 2*2"*.' . 3"2.,0 3*203.2 . K03.3* 3

"55"6 113,.'' "'1,.,' ''''.31 1*3'".1 " 102"'., . 111,".* " 31030." 3 "*2.2. ""1'0." * 11..1' '

"65" 11...3' ",11.11 '.00.3' 23.,1.3" 2"121.30 13'31.'* "1"22.11 '01.33 ',,*..21 1.1.'2 ,

3e2r Share Ca2%tal Reser&es Owned (/nd -e2os%t +orrow%ngs 6n&estments Ad&ances Cost of anagement Jork%ng Ca2%tal Net Prof%t 9K: ;oss 94: -%&%dend -eclared 9H:

" 5"! 102'.'3 ','2.'2 ,*,..1' 33'*0.', 3'',..1* 1.3'"..' '30,0.*' *,..'" .1'.".3* 2.1.*2 0

"!5"" 2"''.1, ,102.22 0'",.30 "1,11.3, 3,*"1.0* 2211,.,* *"0'2.*. ,2...' 03*'2..2 30*.03 0

""5## 2*".3, .03".01 11','.2, '*11*... "*12".2* 2.010.0. .11'3.1* ,.1.". 2130*.1' '2'.,3 0

##5#1 3111.1' .0*2..3 121*3... ,312*.'0 ""100."* "31,..'" .311'..2 0'*.03 *"0.2" 0

#15#2 3,'2.2. 11.*".." 1"*1,.12 .,".2.1. '2200.1' '0".*.*1 01103.,* 11"'.13 ,"0.'3 11

13.**1.'2 1**00*.1*

57

ANNEA; 8ENERA; +O-<

Esteemed $<2re<o4ders)

EET6N8

6 welcome !o/ all to the '"th Ann/al 8eneral +ode! meet%ng of the #ank and take th%s o22ort/n%t! to 2lace #efore !o/ the a/d%ted f%nanc%al statements5 Ann/al Re2ort of the #ank for the !ear 2111421125 the #/dget and work 2rogramme of the #anl for the !ear 21134211" for !o/r k%nd cons%derat%on and a22ro&al.

(<e Economic $cen2rio The econom%c s/r&e! of the co/ntr! 2resented a growth of the 8ross -omest%c Prod/ct 98-P: of '.* 2ercent d/r%ng the !ear /nder re2ort as aga%nst e32ectat%ons and ass/m2t%ons of *.' 2ercent. The growth of agr%c/lt/re and all%ed act%&%t%es as a 2art of the 8-P rose s/#stant%all! #! '.0 2ercent as aga%nst negat%&e growth rate at '." 2ercent d/r%ng the !ear 2111411. -/r%ng the so/th4west monsoon season of 21115 31 meteorolog%cal S/#4-%&%s%ons rece%&ed e3cessGnormal ra%nfall %nd%cat%ng #etter s2at%o4tem2oral d%str%#/t%on of ra%nfall. The north4east monsoon also t/rned o/t to #e #etter d/r%ng 21114125 wh%ch #oosted the food gra%n 2rod/ct%on to 212 m%ll%on tones as aga%nst 2re&%o/s !earIs 2rod/ct%on of 100.' m%ll%on tones. )owe&er5 the %nd/str%al sector has grown at a lower rate of 3.3 2ercent %n 2111412 as aga%nst *.2 2ercent %n 2111411. The %nd/str%al slowdown 2ermeated all const%t/ent s/#4 sectors5 2art%c/larl! the man/fact/r%ng sector5 wh%ch decelerated to 3.3 2ercent %n 2111412 from *., 2ercent %n 2111411. The ser&%ces sector5 on the other hand5 recorded a h%gher growth at *.2 2ercent %n 2111412 from ' 2ercent %n 21114115 tho/gh the 2ace rema%ned slow %n relat%on to a growth of 0." 2ercent atta%ned %n 100042111. 6n the 2redom%nantl! #ank #ased f%nanc%al sta#%l%t! has cont%n/ed to ass/me tremendo/s %m2ortance d/r%ng the !ear /nder re2ort. Jhereas5 %n the %nternat%onal arena the #ank%ng o2erat%ons ha&e #een /ndergo%ng 58

drast%c metamor2hos%s5 f%nanc%al sta#%l%t! has come to the center stage for the 2lanners and 2ol%c! makers. The monetar! and cred%t 2ol%c! anno/nced #! the Reser&e +ank of 6nd%a d/r%ng the !ear /nder re2ort5 a%med at %ncreas%ng o2erat%onal effect%&eness5 redef%n%ng the reg/lator! role of the R+65 strengthen%ng 2r/dent%al and s/2er&%sor! norms and %m2ro&%ng the cred%t del%&er! s!stem. 6n order to accord greater fle3%#%l%t! to coo2erat%&e #anks and to ena#le them to attract good #orrowers %n a com2et%t%&e en&%ronment5 the st%2/lat%on of m%n%m/m lend%ng rates for all coo2erat%&e #anks was w%thdrawn #! the a2e3 #ank of the co/ntr!. The coo2erat%&e #anks also ha&e #een asked to 2/#l%sh m%n%m/m and ma3%m/m lend%ng rates charged for the %nformat%on of the%r c/stomers. The /n%on +/dget anno/nced on 2. th (e#r/ar!5 2112 2ro&%ded a token contr%#/t%on of Rs. 111 crore for %m2lementat%on of re&%tal%Fat%on 2ackage recommended #! the Ca2tor Comm%ttee. Another h%gh le&el Comm%ttee was a22o%nted /nder the Cha%rmansh%2 of En%on %n%ster of State for (%nance #! the En%on 8o&ernment to worko/t the modal%t%es to %m2lement the 2ackage #! e&ol&%ng consens/s among the States. The ma$or %ss/es on the d/al%t!Gm/lt%2l%c%t! of control of the coo2erat%&e cred%t %nst%t/t%ons cont%n/ed to come %n the wa! of effect%&e reg/lat%on and s/2er&%s%on of coo2erat%&e #anks. The recommendat%ons of the Ca2tor Comm%ttee on th%s s/#$ect co/ld not #e %m2lemented d/r%ng the !ear. 6n th%s conte3t5 a draft #%ll s/#m%tted #! Reser&e +ank of 6nd%a to resol&e the %ss/e thro/gh amendment of the +ank%ng Reg/lat%on Act5 10"0 rather than amendment of res2ect%&e State Coo2erat%&e Soc%et%es Acts was referred to the h%gh le&el Comm%ttee. As on arch 315 21125 0, Commerc%al +anks5 10* Reg%onal R/ral

+anks5 '2 Er#an Coo2erat%&e +anks and 1* state Coo2erat%&e +anks were o2erat%ng %n 6nd%a as Sched/led +anks. The growth of aggregate de2os%ts of the sched/led Commerc%al +anks decelerated from 1.." 2ercent d/r%ng 2111411 to 1".* 2ercent d/r%ng the !ear /nder re2ort. 59

S%m%larl!5 the growth %n cred%t e3tended #! them has also recorded a decl%n%ng trend from 1,.3 2ercent to 1"." 2ercent. The ann/al monetar! and cred%t 2ol%c! statements and the m%d term re&%ews #! the Reser&e +ank of 6nd%a cont%n/ed to foc/s on the str/ct/ral and reg/lator! meas/res needed to strengthen the f%nanc%al s!stem and %m2ro&e the f/nct%on%ng of &ar%o/s segments of the f%nanc%al market. The #ank rate was red/ced to *.' 2ercent w%th effect from Octo#er 205 2112 and the CRR rate was also #ro/ght down to ".,' 2ercent w%th the %nflat%on conta%ned at s%ngle d%g%t. The 6nd%an #ank%ng sector as a whole5 %ncl/d%ng the coo2erat%&e #anks5 res2onded to the emerg%ng challenges and #ro/ght a#o/t 2erce2t%#le %m2ro&ement %n c/stomer ser&%ce #! %nno&at%ng new 2rod/cts and ado2t%ng %nformat%on technolog!. )owe&er5 d/r to non4%m2lementat%on of the recommendat%ons of the Task (orce a22o%nted /nder the Cha%rmansh%2 of @agad%sh Ca2oor5 the then -e2/t! 8o&ernor of Reser&e +ank of 6nd%a5 the d%ff%c/lt%es faced #! the coo2erat%&e #anks cont%n/ed d/r%ng the !ear /nder re2ort. 1". o/t of 3*, -%str%ct Central Coo2erat%&e +anks ha&e fa%led to com2l! w%th the Sect%on 1191: of the +ank%ng Reg/lat%on Act5 10"0. S%m%larl!5 0 o/t of 31 State Coo2erat%&e +anks also cont%n/ed to rema%n Sect%on 11 non4 com2l%ant. The Reser&e +ank of 6nd%a and NA+AR- e3tended the one t%me Settlement scheme to the coo2erat%&e #anks to arrest the growth of non42rod/ct%&e assets. %ur Ac<ievements <o/r #ank has cont%n/ed to take on the com2et%t%on s/ccessf/ll! %n s2%te of slow down %n the o&erall 2erformances of the State Coo2erat%&e +anks of the co/ntr!. The de2os%ts of the #ank %ncreased from Rs.,31.2, crore to Rs..,"..2 crore #! record%ng a health! growth rate of 21 2ercent as aga%nst 11.2 2ercent of all State Coo2erat%&e +anks. )owe&er5 the o/tstand%ng loans and ad&ances recorded a growth of onl! 11 2ercent as aga%nst the all 6nd%a a&erage of 0.' 2ercent ma%nl! d/e to the d%ff%c/lt%es e32er%enced #! the . Sect%on 11 non4com2l%ant 60

-CC+s to ens/re smooth flow of cred%t mostl! on acco/nt of non4 reco&er! of loans. The work%ng ca2%tal of the #ank %ncreased from Rs.13.*.*2 crore to Rs.1*,".', crore record%ng a growth of 21 2ercent o&er the last !ear. The aggregate reco&er! of loasn of the #ank has decelerated from .* 2ercent d/r%ng the !ear 2111411 to .2.". 2ercent d/r%ng the !ear /nder re2ort largel! d/e to hea&! defa/lt #! +hawan%2atna5 +olang%r5 +o/dh and En%ted P/r%4N%ma2ara Central Coo2erat%&e +ank. )owe&er5 !o/r #ank has earned a net 2rof%t of Rs.,"0.'3 lakh after mak%ng adeB/ate 2ro&%s%on aga%nst non42rod/ct%&e assets as 2er the g/%del%nes of the Reser&e +ank of 6nd%a. The d%&%dend for the !ear /nder re2ort %s 2ro2osed at 11 2ercent for a22ro&al of the 8eneral +od!. The 2er #ranch and 2er em2lo!ee #/s%ness of the #ank has scaled to new he%ghts at Rs. 20,.*3 crore and Rs. ,..1 crore res2ect%&el!5 wh%ch %s one of the h%gest %n the 6nd%an #ank%ng %nd/str!. Im:4ement2tion of 0is2n Credit C2rd $c<eme <o/r #ank has cont%n/ed %ts efforts to strengthen and sta#%l%t%es the N%san cred%t card scheme %n tandem w%th the %m2ortance attached to the scheme #! the /n%on go&ernment. 6n add%t%on to e3tend%ng %ts reach to all el%g%#le farmer mem#ers5 em2has%s was la%d on the o2erat%onal %ntr%cac%es of the scheme to em2ower the target gro/2. The c/m/lat%&e %ss/e of cards has crossed the mark of 11 lakh and reached the le&el of 1152050," #! 31.13.2112 as aga%nst the target f%3ed for %ss/e of 11.'1 lakh cards. J%th streaml%n%ng of the o2erat%on of the N%san Cred%t Card scheme5 !o/r #ank has s/cceeded %n d%s#/rs%ng record amo/nt of cro2 loan d/r%ng the !ear /nder re2ort amo/nt%ng to Rs.313 crore %n Nhar%ff and Rs.22" crore %n Ra#% aggregat%ng to Rs.'3, crore. There has also #een a 2henomenal %ncrease %n the 2er ca2%ta d%s#/rsement of cro2 loan from Rs.1.32G4 %n 1001402 to Rs.,5'111G4 d/r%ng the !ear /nder re2ort.

61

024in92 0iss2n -o4d C2rd The /n%B/e and %nno&at%&e Nal%nga N%ssan 8old Card scheme la/nched on 2*.1".2111 to recogn%Fe and reward good re2a!ment ha#%ts of the N%ssan Cred%t Card holders to create a cond/c%&e reco&er! cl%mate %n the State el%c%ted tremendo/s res2onse from the cross sect%on of the comm/n%t! and the same has #een h%ghl! accla%med #! Reser&e +ank of 6nd%a5 NA+AR-5 NA(SCO+ and other State Coo2eat%&e +anks. The w%de range of fac%l%t%es a&a%la#le /nder the scheme are 1 2ercent less %nterest %n all t!2es of loans5 free acc%dent %ns/rance co&erage of Rs.2'5111G4 cons/m2t%on loan /2 to Rs.'5111G4 mem#ersh%2 of the Nal%nga N%ssan 8old Card Cl/#5 2art%c%2at%on %n ann/al lotter! carr!%ng 3 2r%Fes amo/nt%ng to Rs.'15111G4 Rs.315111G4 and Rs.215111G4 freedom to 2/rchase fert%l%Fer and 2est%c%des from an! reta%l o/tlet of the%r cho%ce and a&a%la#%l%t! of schemat%c loans on a 2r%or%t! #as%s. +! 31.13.21125 22.*3 cards were d%str%#/ted to el%g%#le farmer mem#ers and aro/nd 1111 cardholders were taken to the farms of OEAT and the CRR65 C/ttack on st/d! &%s%t to ena#le them to learn ad&anced technolog! %n agr%c/lt/re for wh%ch5 !o/r #ank has 2ro&%ded ass%stance to the -CC+s S Rs.115111G4 each. J%th%n one !ear of %ts la/nch%ng5 the scheme started !%ld%ng des%red res/lts #! %m2ro&%ng the reco&er! 2os%t%on at PACS le&el from "* 2ercent %n 2111411 to '* 2ercent %n 2111412. Inform2tion (ec<no4o9y <o/r #ank %s the f%rst State Coo2erat%&e +ank of the co/ntr! to com2/ter%Fe the o2erat%ons of %ts head off%ce and the reta%l o/tlets to 2ro&%de modern #ank%ng fac%l%t%es at 2ar w%th 2r%&ate and commerc%al #anks. AT s ha&e #een %nstalled %n select +ranches and E3tens%on Co/nters to 2ro&%de an!t%me #ank%ng to the c/stomers. 6n order to 2ro&%de fle3%#le #ank%ng ho/rs to the general 2/#l%c5 the #ank has e3tended %ts #ank%ng ser&%ce /2to ,.31 P #ranches5 %n Sah%dnagar and C/ttack arketed E3tens%on Co/nter and -AA E3tens%on Co/nter.

+es%des5 as a 2art of %ts de&elo2mental %n%t%at%&e to consol%date the 62

Short Term Coo2erat%&e Cred%t str/ct/re to co2e w%th the emerg%ng challenges conseB/ent /2on f%nanc%al sector reforms5 !o/r #ank has taken ste2s to com2/ter%se the head off%ce and #ranches of the aff%l%ated -%str%ct Central Coo2erat%&e +anks 9-CC+s:. A total #ank a/tomat%on software ent%tled =Sama#a!a> has +en de&elo2ed #! the #ank for the 2/r2ose #! engag%ng C C ;td. Nolkata at a cost of Rs."* lakh and the same has #en 2ro&%ded to the -CC+s free of cost. After %ts s/ccessf/l %m2lementat%on %n +ank% CC+ on a 2%lot #as%s5 the software has #een 2ro&%ded to other -CC+S for %m2lementat%on w%th techn%cal ass%stance #! a core team const%t/ted at OSC+ le&el. 6t %s e32ected that the head off%ce and ma%n #ranches of all the -CC+s w%ll #e f/ll! com2/ter%Fed #! 31.12.2113. (re2sury M2n29ement Ce44 <o/r #ank has esta#l%shed a Treas/r! anagement Cell 9T C: d/r%ng

a! 2111 w%th the o#$ect%&e of de2lo!ment of %ts s/r2l/s reso/rces %n 2rof%ta#le a&en/es and trad%ng %n 8o&ernment and other sec/r%t%es %n the mone! market. The #ank has %nstalled Re/ters +/s%ness watch fac%l%t! to get onl%ne data from the sec/r%t! market. The T C %s manag%ng a 2ortfol%o of Rs. '0' crore5 wh%ch %s S/#$ects to &ar%at%on on a da!4to4da! #as%s. The 2ortfol%o %ncl/des S;R %n&estment of Rs. 2*2 crore and non4S;R %n&estment of Rs. 333 crores. The T C has made a trad%ng 2rof%t of Rs. 0.'1 crore d/r%ng the !ear 2111412. 6n the era of f%n%cal l%#eral%Fat%on and conseB/ent fall %n %nterest rates5 the 84Sec market holds the ke!s for 2rof%ta#le %n the #anks. The OSC+ a%ms at %ncreas%ng %n&estment %n th%s 2ortfol%o to de2lo! all %ts s/r2l/s reso/rces %n 2rof%ta#le a&en/es. ECce44ence Reco9niDed 6n recogn%t%on of the o/tstand%ng 2erformances for !o/r #ank all growth 2arameters5 the Nat%onal +ank for Agr%c/lt/re and R/ral -e&elo2ment awarded the #ank w%th the #est 2erformance award5 wh%ch was handed o&er #! the then )onI#le En%on %n%ster of (%nance5 Sr% <ashwant S%nha 63

on

12 th

@/l!5

2111.

#e%s%des5

the

Nat%onal

(ederat%on

of

State

coo2erat%&e +anks has awarded the #ank of o/treach %n mo#%l%Fat%on of reso/rces. Are2 of Concern 6n s2%te of s/#stant%al %m2ro&ement of reco&er! at grass roots le&el conseB/ent /2on %m2lementat%on of Nal%nga N%ssan 8old Card scheme5 low reco&er! of loans and non 2ass%ng on of reco&er%es to the h%gher t%ers cont%n/ed to affect the f%nanc%al 2erformance of most of the -CC+s5 wh%ch cont%n/ed to ha&e a d%rect #ear%ng on the 2erformances of !o/r #ank. Altho/gh d/r%ng the !ear /nder re2ort5 " o/t of 12 Sect%on 11 non com2la%nt -CC+s %m2ro&ed the%r 2erformances and com2l%ed w%th the stat/tor! reB/%rements5 e3em2t%on for the rema%n%ng . #anks co/ld not #e a&a%la#le from the 8o&ernment of 6nd%a for wh%ch5 !o/r #ank faced d%ff%c/lt%es to arrange f/nds to s/22ort the%r lend%ng act%&%t%es. The aggregate defa/lt towards 2r%nc%2al and %nterest of the 12 -CC+s amo/nted to Rs.01..2 crore as on 31.3.2112 of wh%ch5 the defa/lt of +hawan%2atna5 +olang%r and En%ted P/r%4N%ma2ara -CC+s amo/nted to Rs.01..2 crore as on 31.13.2112 of wh%ch5 the defa/lt of +hawan%2atna5 +olang%r% and En%ted P/r%4N%ma2ara CC+s were at Rs.1*."2 crore5 Rs.1*..* crore and Rs.3'.*3 crore res2ect%&el!. Jhereas cont%n/o/s ag%tat%onal 2rogramme of the cadre em2lo!ees %n Na!agarh and En%ted P/r%4N%ma2ara CC+s ad&ersel! affected the%r 2erformance5 %n +hawan%2atna CC+5 lack of adeB/ate s/2er&%s%on and mon%tor%ng was cons%dered to the #e reasons for s/ch ser%o/s f%nanc%al cr%s%s. The handloom sector cont%n/ed to s/ffer d/e to gross m%smanagement of affa%rs of the )andloom Jea&ers Coo2erat%&e Soc%et%es. The aggregate cred%t l%m%ts sanct%oned #! NA+AR- %n fa&o/r of -CC+s for f%nanc%ng )andloom Jea&ers Coo2erat%&e Soc%et%es ha&e #een drast%call! red/ced from Rs. *'.2. crore d/r%ng 100042111 to Rs.21.32 crore %n 211142111 and Rs. 2'..1 crore for the !ear /nder re2ort largel! d/e to the%r o2erat%onal def%c%enc%es. +es%des d/e to non4 64

sanct%on of ref%nance ass%stance #! NA+AR- %n fa&o/r of Or%ssa State )andloom Jea&ers Coo2erat%&e Soc%et! 9+o!an%ka:5 the #ank had to %n&ol&e %ts own f/nds to the t/ne of Rs. 13.11 crore. Altho/gh the 8o&ernment of Or%ssa had 2ro&%ded g/arantee to NA+ARfor re2a!ment of the d/es5 w%tho/t %n&ok%ng the same5 !o/r #ank has %n&ol&ed Rs.'3 crore from %ts own reso/rces. 6t %s an acknowledged fact that after %ntrod/ct%on of N%san Cred%t Card scheme5 the Commerc%al +anks and the Reg%onal R/ral +anks ha&e #een enter%ng %nto the arena of agr%c/lt/re f%nanc%ng %n a #%g wa!. The res/ltant effect %s 2erce2t%#le from the%r share %n d%s2ensat%on of cro2 loan d/r%ng last 3 !ears. Jhereas at All 6nd%a le&el5 the%r share has #een %ncreased from "' 2ercent to ". 2ercent5 %n o/r State5 the same has #een %ncreased from 2. 2ercent to 31 2ercent. Enless the PACS and -CC+s %m2ro&e the%r 2erformances %n d%s2ens%ng farm cred%t5 %t wo/ld #e d%ff%c/lt to sto2 the 2rogress of Commerc%al +anks5 who ha&e #een a/gment%ng the%r efforts to 2enetrate %nto the r/ral areas. <o/r #ank has %ntrod/ced the Nal%nga N%ssan 8old Card scheme w%th the ma$or o#$ect%&e of %m2ro&%ng the reco&er! 2os%t%on of the short term coo2erat%&e cred%t str/ct/re. 6 wo/ld %m2ress /2on all concern to take ad&antage of the %n4#/%lt fac%l%t%es of the scheme to #/%ld /2 a lo!al and d%sc%2l%ned cl%entele #ase to take on the com2et%t%on and %m2ro&e the o&erall 2erformance. +e2ders<i: Initi2tes J%th the o#$ect%&e of consol%dat%ng the short term coo2erat%&e cred%t str/ct/re of the state to co2e w%th the emerg%ng challenges5 !o/r #ank has taken a n/m#er of %n%t%at%&es d/r%ng the !ear /nder re2ort. 6n add%t%on to the %n%t%at%&es taken for com2/ter%Fat%on of the -CC+s to strengthen the anagement %nformat%on s!stem and to 2ro&%de effect%&e and eff%c%ent c/stomer ser&%ce5 OSC+ has cont%n/o/sl! mon%tored the 2erformances of the -CC+s and PACS thro/gh monthl! re&%ew meet%ng at state le&el and ens/red %m2lementat%on of &ar%o/s 2lans and 65

2rogrammes #! d%rect s/2er&%s%on. 6m2lementat%on of -e&elo2ment Act%on Plans was reg/larl! mon%tored and s2ec%f%c ste2s were taken for %m2ro&%ng the 2erformance of the sect%on 11 non4com2l%ant #anks. J%th the s%ncere efforts and t%mel! g/%dance of !o/r +ank5 " o/t of 12 Sect%on 11 non4com2la%nt Central Coo2erat%&e +anks #ro/ght a#o/t a t/rn aro/nd %n the%r o&erall 2erformances #! mak%ng the%r net worth 2os%t%&e to com2l! w%th the stat/tor! reB/%rements. <o/r #ank has also %ntrod/ced a s!stem of monthl! rat%ng of the -CC+s on the #as%s of the%r 2erformances on &ar%o/s 2arameters and %nst%t/ted 3 2r%Fes for the #est 2erform%ng #anks to %nc/lcate a com2et%t%&e s2%r%t among them. The em2lo!ees of the -CC+s and the PACS were also rewarded thro/gh an %ncent%&e 2ackage on the #as%s of 2erformance on de2os%t mo#%l%Fat%on and reco&er!. The s!stem of 2ro&%d%ng l%#eral grants to the -CC+s cont%n/ed th%s l%#eral grants to the -CC+s cont%n/ed th%s !ear /nder wh%ch5 Rs. 1 lakh each was 2ro&%ded to the -CC+s for facel%ft of the%r #est 2erform%ng #ranch on the #as%s of de2os%t mo#%l%Fat%on. <o/r #ank has also cont%n/es to re%m#/rse the salar! of the Ch%ef E3ec/t%&es of the -CC+s to ease the%r f%nanc%al #/rden. All these de&elo2ment %n%t%at%&es were d%rected towards consol%dat%on of the short term coo2erat%&e cred%t str/ct/re of the state to co2e w%th the chang%ng en&%ronment after %ntrod/ct%on of the f%nanc%al sector reforms. 6 wo/ld reB/est all concerned to take ad&antage of the l%#eral f%nanc%al ass%stance and s/22ort 2ro&%ded #! the #ank to strength the%r 2erformances and to atta%n s/sta%na#le &%a#%l%t! at the earl%est. ,um2n Resources 'eve4o:ment <o/r #ank has g%&en to2 2r%or%t! to the de&elo2ment of h/man reso/rces of %ts own and the aff%l%ated -CC+s. The em2lo!ees of the #ank were sent to &ar%o/s nat%onal le&el tra%n%ng %nst%t/t%ons to acB/%re e32ert%se on &ar%o/s areas of #ank%ng technolog!. )R- tra%n%ng 2rogrammes were arranged for all the off%cers of the #ank w%th the hel2 of N6S S2arta to 66

g%&e them an %ns%ght %nto the%r 2attern of #eha&%o/r and the need to for ada2t%ng themsel&es to the chang%ng c%rc/mstances. The Agr%c/lt/ral w%th Coo2erat%&e adeB/ate sk%ll and staff tra%ned att%t/de Tra%n%ng fac/lt! to co2e 6nst%t/te and w%th has #een

strengthened the%r

latest the

tra%n%ng chang%ng

eB/%2ments to 2ro&%de need #ased tra%n%ng to the 2ersonnel to %m2ro&e knowledge5 reB/%rement of the #ank%ng %nd/str!. Need #ased s%m%lar and worksho2s on #/rn%ng to2%cs and new schemes were cond/cted #! the #ank at %ts head off%ce and at the -CC+ le&el to /2 date the knowledge of the em2lo!ees. Now tra%n%ng 2rogrammes l%ke = arket%ng of +ank Ser&%ces> and =Organ%Fat%onal -e&elo2ment Strateg%es> were %ntrod/ced #! the %nst%t/te d/r%ng the !ear /nder re2ort. The ho/se $o/rnal of the #ank =Sam2ark> cont%n/ed to carr! to2%cal %ss/es on trends and 2rogress %n #ank%ng and %t also 2ro&%ded a for/m to the em2lo!ees to share the%r &%ews and e32er%ence. Cor:or2te vision <o/r #ank has #een work%ng on a cor2orate &%s%on 2lan for the !ear 2111 kee2%ng %n &%ew the de&elo2ment %n the #ank%ng %nd/str! conseB/ent /2on the f%nca%al sector reforms %ntrod/ct%on %n the co/ntr!. The 2lan shall5 %nterla%d5 %ncl/de organ%Fat%onal5 s!stem%c5 f%nanc%al5 manager%al and 2ersonnel reeng%neer%ng and restr/ct/r%ng of the #ank and the aff%l%ated short term coo2erat%&e cred%t str/ct/re w%th the o#$ect%&e of strengthen%ng the agrar%an econom! of the state. The o#$ect%&e can #e f/lf%lled onl! #! strengthen%ng the PACS #! con&ert%ng them as 2rof%t centers and mem#er dr%&en organ%Fat%ons ca2a#le eno/gh to cater to the ent%re cred%t reB/%rement of the%r mem#ers. <o/ are all aware that the En%on (%nance %n%ster5 %n h%s #/dget s2eech

on 2..2.2113 has %nd%cated to allow 2r%&ate sector #anks to enter %nto the s2here of agr%c/lt/ral f%nanc%ng #! o2en%ng #ranches %n r/ral areas. 6n the 2ast5 the coo2erat%&e #anks ha&e s/ccessf/ll! w%thstood the onsla/ght of the m/lt%4agenc! a22roach %n d%s2ensat%on of farm cred%t 67

and w%thdrawal of State 2atronage. ;et /s acce2t the new challenge to take on the 2r%&ate #anks along w%th the commerc%al #anks and the RR+s #! re&am2%ng o/r f/nct%on%ng and com%ng close to o/r largest cl%entele5 the farm%ng comm/n%t!. 6 e32ress m! s%ncere grat%t/de to all of !o/ g%&%ng me a 2at%ent hear%ng. 6 also take th%s o22ort/n%t! to e3tend m! heartfelt thanks to o/r &al/ed c/stomers5 the 8o&ernment of 6nd%a5 the state 8o&ernment5 the Reser&e +ank of 6nd%a5 NA+AR- and the NA(SCO+ for g/%d%ng /s and 2ro&%d%ng /ngr/dg%ng s/22ort %n all o/r endea&or for f/rtherance of the coo2erat%&e cred%t mo&ement %n the state. 6 shall #e fa%l%ng %n m! d/t!5 %f 6 do not e32ress m! s%ncere a22rec%at%on for the ded%cated ser&%ce and comm%tment of the staff of th%s #ank.

68

69

JE;CO E TO T)E JOR;- O( (6NANCE

A$ 7E RACE (%7AR'$ (,E 21 $( CE*(&R3 7E$( *E7 ,%PE$ and new e32ectat%ons5 %t %s %m2erat%&e that we a22rec%ate the world aro/nd /s %s chang%ng ra2%dl! throw%ng /2on great challenge and en/mera#le o22ort/n%t!. -r%&en #! the %nformat%on technolog! we are w%tness%ng 2henomenal changes %n the world of f%nance. 6n the emerg%ng scenar%o f%nance 2rofess%onals w%ll #e o2erat%ng %n a totall! f%nanc%al landsca2e. C%RP%RA(E FI*A*CE %s chang%ng from domest%c f/nd%ng to m/lt%4 E*(ERPRI$E FI*A*CE %s

c/rrenc! f/nd%ng 1 FI*A*CIA+ C%*(R%+ %s chang%ng from s%m2le acco/nt%ng to %ntegrated control s!stem #ased on RE$%&RCE P+A**I*(ERP)1 I*(ER*A(I%*A+

dom%nated #! &%rt/al f/nds at the d%s2osal of street L smart 4fore3 dealers who mo&e #%ll%ons of T da%l! across the glo#al w%th the e3tens%&e /se of 6T. I*.E$(ME*( MA*A-EME*( %s sh%ft%ng from s%m2le eB/%t! or de#t 2rod/cts to com2le3 der%&at%&e 2rod/cts l%ke o2t%ons5 f/t/re and swa2s. FI*A*CIA+ $E.ICE$ l%ke #ank%ng and %ns/rance are gett%ng glo#al%Fed %n a seamless d%g%tal world. These fro4reach%ng de&elo2ments %n the world of f%nance ha&e redef%ned the role of the f%nance manager5 2lac%ng a 2rem%/m on well tra%ned !o/ng men and women 2rocess%ng s/2er%or 2rofess%onal sk%ll %n f%nance anal!s%s on management. The f%nance manager of toda! %s called /2on to f%nance strateg%es that do&eta%l w%th the f%rmIs com2et%t%&e #/s%ness strateg%es.

70

M EA*I*- %F 7 %R0I*- C API(A+

Ca2%tal reB/%red for a #/s%ness can #e class%f%ed /nder two ma%n categor%es: 9%: 9%%: (%3ed Ca2%tal and Jork%ng Ca2%tal

E&er! #/s%ness needs f/nds for two 2/r2oses for %ts esta#l%shment and to carr! o/t %ts da!4to4da! o2erat%ons long4term f/nds are reB/%red to create 2rod/ct%on fac%l%t%es thro/gh 2/rchase of f%3ed assets s/ch as 2lat and mach%ner! land #/%ld%ng f/rn%t/re etc. 6n&estments %n these assets re2resent that 2art of f%rmIs ca2%tal5 wh%ch %s #locked on a 2ermanent or f%3ed #as%s and %s called f%eld ca2%tal. (/nds are also needed for short4term 2/r2oses for the 2/rchase of raw mater%als 2a!ment of wages and other da!4to4da! e32enses5 etc. 6n the words of Sh/#%n = Jork%ng ca2%tal %s the amo/nt of f/nds necessar! to co&er the cost of o2erat%ng the enter2r%se> Accord%ng to 8enesten#erg5 = C%rc/lat%ng ca2%tal means c/rrent asssets of a com2an! that are changed %n the ord%nar! co/rse of #/s%ness from on e form to another as for e3am2le from cash to %n&entor%es5 %n&entor%es to rece%&a#le rece%&a#les %nto cash.>

+eve4s of 7or8in9 C2:it24 Investment 6n a =2erfect> world there wo/ld #e no necess%t! for work%ng ca2%tal costs %nformat%on search costs sched/l%ng costs or

assets and l%a#%l%t%es. 6n s/ch a world there wo/ld #e no /ncerta%nt! no transact%on 2rod/ct%on and technolog! constra%nts. The /n%t cost of 2rod/c%ng goods wo/ld not &ar! w%th the amo/nt 2rod/ced. (%rms wo/ld #orrow and lend at the same %nterest rate. Ca2%tal la#o/r and 2rod/ct markets wo/ld reflect all a&a%la#le %nformat%on and wo/ld #e 2erfectl! com2et%t%&e. 6n

71

s/ch a world %t can #e shown that there wo/ld #e no ad&antage for f%rms to %n&est or f%nance %n the short term. +/t the world %n wh%ch real f%rms f/nct%on %s not 2erfect. 6t %s character%Fed #! the f%rms cons%dera#le /ncerta%nt! regard%ng the demand market 2r%ce B/al%t! and a&a%la#%l%t! of %ts own 2rod/cts and those of s/22l%ers. There are transact%on costs for 2/rchas%ng or sell%ng goods or sec/r%t%es. 6nformat%on %s costl! to o#ta%n and the f%rm %s faced w%th l%m%ts on the 2rod/ct%on ca2ac%t! and technolog! that %t can em2lo!. There are f%3ed as well &ar%a#le costs assoc%ated w%th 2rod/c%ng goods for sale5 and there are s2reads #etween the #orrow%ng and lend%ng rates for %n&estments and f%nanc%ngs of eB/al r%sk. 6nformat%on %s not eB/all! d%str%#/ted and ma! not #e f/ll! reflected %n the 2r%ces %n 2rod/ct and la#or markets and these markets ma! not #e 2erfectl! com2et%t%&e. These real world c%rc/mstances %ntrod/ce 2ro#lems w%th wh%ch the f%rm m/st deal. Jh%le the f%rm has ma! strateg%es a&a%la#le to address these c%rc/mstances strateg%es that /tl%l%se %n&estment or f%nanc%ng w%th work%ng ca2%tal acco/nts often offer a s/#stant%al ad&antage o&er other techn%B/es. (or e3am2le ass/me that the f%rm %s faced w%th /ncerta%nl! regard%ng the le&el of %ts f/t/re cash flows and w%ll %nc/r s/#stant%al cost %f %t has %ns/ff%c%ent cash to meet e32enses. Se&eral strateg%es ma! #e form/lated to address th%s /ncerta%nt! and the costs that %t ma! engender. Among these strateg%es are some that %n&ol&e work%ng ca2%tal %n&estment or f%nanc%ng s/ch as hold%ng add%t%onal cash #alances #e!ond e32ected needs hold%ng a reser&e of short term marketa#le sec/r%t%es or arrang%ng for the a&a%la#%l%t! of add%t%onal short4term #orrow%ng ca2ac%t!. One of these strateg%es ma! well #e the least costl! a22roach to the 2ro#lem. The s%Fe and nat/re of a f%rms %n&estment %n c/rrent assets %s a

f/nct%on of a n/m#er of d%fferent factors %ncl/d%ng the follow%ng: 1. The t!2e of 2rod/cts man/fact/red. 72

2. 3.

The length of the o2erat%ng c!cle. The sales le&el 9#eca/se h%gher sales reB/%re more

%n&estment %n %n&entor%es and rece%&a#les:. ". 6n&entor! 2ol%c%es 9for e3am2le the amo/nt of safet! stocks ma%nta%ned that %s %n&entor%es needed to meet h%gher than e32ected demand or /nant%c%2ated dela!s %n o#ta%n%ng new %n&entor%es: '. *. Cred%t 2ol%c%es )ow eff%c%entl! the f%rm manages c/rrent assets 9O#&%o/sl! the more effect%&el! management econom%cs on the amo/nt of cash marketa#le sec/r%t%es %n&entor%es and rece%&a#les em2lo!ed the smaller the work%ng ca2%tal reB/%rements:.

C42ssific2tion or 8inds of 7or8in9 C2:it24

Jork%ng ca2%tal ma! #e class%f%ed %n two wa!s: (2) %n t<e /2sis of Conce:t) On the #as%s of conce2t work%ng ca2%tal %s class%f%ed as gross work%ng ca2%tal and net work%ng ca2%tal as d%sc/ssed earl%er. Th%s class%f%cat%on %s %m2ortant from the 2o%nt of &%ew of the f%nanc%al manager. (;) %n t<e /2sis of (ime) On the #as%s of t%me work%ng ca2%tal ma! #e class%f%ed as 11 Perm2nent or FiCed 7or8in9 C2:it24) Permanent or (%3ed work%ng ca2%tal %s the m%n%m/m amo/nt wh%ch %s reB/%red to ens/re effect%&e /t%l%Fat%on of f%3ed fac%l%t%es and for ma%nta%n%ng the c%rc/lat%on of c/rrent assets. These %s alwa!s a m%n%m/m le&el of c/rrent assets wh%ch %s cont%n/o/sl! reB/%red #! the enter2r%se to carr! o/t %ts normal #/s%ness o2erat%ons. (or e3am2le5 e&er! f%rm has to ma%nta%n a m%n%m/m le&el of raw

73

mater%als work4%n42rocess5 f%n%shed goods and cash #alance. Th%s m%n%m/m le&el of c/rrent assets %s called 2ermanent or f%3ed work%ng ca2%tal as th%s 2art of ca2%tal %s 2ermanentl! #locked %n c/rrent assets. As the #/s%ness grows5 the reB/%rements of 2ermanent work%ng ca2%tal also %ncrease d/e to the %ncrease %n c/rrent assets. The 2ermanent work%ng ca2%tal can f/rther #e class%f%ed as reg/lar work%ng ca2%tal and reser&e work%ng ca2%tal reB/%red to ens/re c%rc/lat%on of c/rrent assets from cash to %n&entor%es5 from %n&entor%es to rece%&a#les and from rece%&a#les to cash and so on reser&e work%ng ca2%tal %s the e3cess amo/nt o&er the reB/%rement for reg/lar work%ng ca2%tal wh%ch ma! #e 2ro&%ded for cont%ngenc%es that ma! ar%se /nstated 2er%ods s/ch as str%kes r%se %n 2r%ces5 de2ress%on5 etc. 21 (em:or2ry or .2ri2;4e 7or8in9 C2:it24) Tem2orar! or &ar%a#le work%ng ca2%tal %s the amo/nt of work%ng ca2%tal5 wh%ch %s reB/%red to meet the seasonal demands and some s2ec%al e3%genc%es. Aar%a#le work%ng ca2%tal can #e f/rther class%f%ed as seasonal work%ng ca2%tal ca2%tal. and s2ec%al work%ng ost of the enter2r%ses ha&e to 2ro&%de add%t%onal work%ng

ca2%tal to meet the seasonal and s2ec%al needs. The ca2%tal reB/%red to meet the seasonal needs to the enter2r%se %s called seasonal work%ng ca2%tal. S2ec%al work%ng ca2%tal %s that 2art of work%ng ca2%tal wh%ch %s reB/%red to meet s2ec%al e3%genc%es s/ch as la/nch%ng of e3tens%&e market%ng cam2a%gns for cond/ct%ng research5 etc. Tem2orar! work%ng ca2%tal d%ffers from 2ermanent work%ng ca2%tal %n the sense that %t %s reB/%red for sort 2er%od and cannot #e 2ermanentl! em2lo!ed ga%nf/ll! %n the #/s%ness. (%g/re g%&en #elow %ll/strate the d%fference #etween 2ermanent and tem2orar! work%ng ca2%tal.

74

Permanent work%ng ca2%tal %s sta#le or f%3ed o&er t%me wh%le the tem2orar! or &ar%a#le work%ng ca2%tal fl/ct/ates. 6n (%g. 2 2ermanent work%ng ca2%tal %s also %ncreas%ng w%th the 2assage of t%me d/e to e32ans%on of #/s%ness #/t e&en the %t does not fl/ct/ates as &ar%a#le work%ng ca2%tal wh%ch some t%me %ncreases and somet%mes decreases.

Adv2nt29es of AdeFu2te 7or8in9 C2:it24

Jork%ng ca2%tal %s there l%fe#lood and ner&e center of a #/s%ness. @/st as c%rc/lat%on of #lood %s essent%al %n the h/man #od! fort ma%nta%n%ng l%fe5 work%ng ca2%tal %s &er! essent%al to ma%nta%n the smooth r/nn%ng of a #/s%ness. No #/s%ness can r/n s/ccessf/ll! w%tho/t an adeB/ate amo/nt of work%ng ca2%tal. The ma%n ad&antages of ma%nta%n%ng adeB/ate amo/nt of work%ng ca2%tal are as follows: 11 $o4vency of t<e ;usiness ) AdeB/ate work%ng ca2%tal hel2s %n ma%nta%n%ng sol&enc! of the #/s%ness #! 2ro&%d%ng /n%nterr/2ted flow of 2rod/ct%on. 21 -ood>i44) S/ff%c%ent work%ng ca2%tal ena#les a #/s%ness concern to make 2rom2t 2a!ments and hence hel2s %n creat%ng and ma%nta%n%ng goodw%ll. 31 E2sy +o2ns) A concern ha&%ng adeB/ate work%ng ca2%tal h%gh sol&enc! and good cred%t stand%ng can arrange loans from #anks and others on eas! and fa&ora#le terms. 41 C2s< discounts) AdeB/ate work%ng ca2%tal also ena#les a concern to a&a%l cash d%sco/nts on the 2/rchases and hence %t red/ces costs. 51 Re9u42r $u::4y of R2> M2teri24s)

75

S/ff%c%ent work%ng ca2%tal ens/res reg/lar s/22l! of raw mater%al and cont%n/o/s 2rod/ct%on. *. Re9u42r :2yment of s242ries >29es 2nd ot<er d2y5to5d2y commitments) A com2an! wh%ch has am2le work%ng ca2%tal can make reg/lar 2a!ment of salar%es wages and other da!4to4da! comm%tments wh%ch ra%ses the morale of %ts em2lo!ees5 %ncreases the%r eff%c%enc! red/ces wastages and costs and enhances 2rod/ct%on and 2rof%ts. 1 EC:4oit2tion of f2vor2;4e m2r8et conditions) Onl! concerns w%th adeB/ate work%ng ca2%tal can e32lo%t fa&ora#le market cond%t%ons s/ch as 2/rchas%ng %ts reB/%rements %n #/lk when the 2r%ces are lower and #! hold%ng %ts %n&entor%es for h%gher 2r%ces. !1 A;i4ity to f2ce crises) AdeB/ate work%ng ca2%tal ena#les a concern to face #/s%ness cr%ses %n emergenc%es s/ch as de2ress%on #eca/se d/r%ng s/ch 2er%ods generall!5 there /s m/ch 2ress/re on work%ng ca2%tal. "1 Juic8 2nd re9u42r return on investments) E&er! 6n&estor wants a B/%ck and reg/lar ret/rn on h%s

%n&estments. S/ff%c%enc! of work%ng ca2%tal ena#les a concern to 2a! B/%ck and reg/lar d%&%dends to %ts %n&estors as there ma! not #e m/ch 2ress/re to 2lo/gh #ack 2rof%ts. Th%s ga%ns the conf%dence of %ts %n&estors and creates a fa&ora#le market to ra%se add%t%onal f/nds %n the f/t/re 1. 2. 3. (or the 2/rchase of raw mater%als com2onents and s2ares. To 2a! wages and salar%es. To %nc/r da!4to4da! e32enses and o&erhead costs s/ch as f/el 2ower and off%ce e32enses5 etc

76

". '. *.

To meet the sell%ng costs as 2ack%ng ad&ert%s%ng etc. To 2ro&%de cred%t fac%l%t%es to the c/stomers. To ma%nta%n the %n&entor%es of raw mater%al work4%n42rogress stores and s2ares and f%n%shed stock.

F AC(%R ' E(ERMI*I*-

(,E

7 %R0I*- C API(A+ )

The work%ng ca2%tal reB/%rements of a concern de2end /2on a large n/m#er of factors s/ch as nat/re and s%Fe of #/s%ness the character of the%r o2erat%ons5 the length of 2rod/ct%on c!cles the rate of stock t/rno&er and the state of econom%c s%t/at%on. 6t %s not 2oss%#le to rank them #eca/se all s/ch factors are of d%fferent %m2ortance and the %nfl/ence of %nd%&%d/al factors changes for a f%rm o&er t%me.

11

*2ture of c<2r2cter of /usiness ) The work%ng ca2%tal reB/%rements of f%rm #as%call! de2end /2on the nat/re of %ts #/s%ness. P/#l%c /t%l%t! /ndertak%ng l%ke Electr%c%t!5 water s/22l! and Ra%lwa!s need &er! l%m%ted work%ng ca2%tal #eca/se the! offer cash sales onl! and s/22l! ser&%ces5 not 2rod/cts and s/ch as no f/nds are t%ed /2 %n %n&entor%es and rece%&a#les.

21

$iDe of /usiness A $c24e of %:er2tions ) The work%ng ca2%tal reB/%rements of a concern are d%rectl! %nfl/enced #! the s%Fe of %ts #/s%ness wh%ch ma! #e meas/res %n terms of scale of o2erat%ons. 8reater the s%Fe of a #/s%ness /n%t generall! larger w%ll #e the reB/%rements of work%ng ca2%tal.

31

Production Po4icy) 6n certa%n %nd/str%es the demand %s s/#$ect to w%de fl/ct/at%ons d/e to seasonal &ar%at%ons. The reB/%rements of work%ng ca2%tal %n s/ch cases de2end /2on the 2rod/ct%on 2ol%c!. The 2rod/ct%on

77

co/ld #e ke2t e%ther stead! #! acc/m/lat%ng %n&entor%es d/r%ng slack 2er%ods w%th a &%ew to meet h%gh demand d/r%ng the 2eak season or the 2rod/ct%on co/ld #e c/rta%l d/r%ng the slack season and %ncreased d/r%ng the 2ack season.

41

M2nuf2cturin9 Process A +en9t< of :roduction cyc4e) 6n man/fact/r%ng #/s%ness the reB/%rements of work%ng ca2%tal %ncreases %n d%rect 2ro2ort%on to length of man/fact/r%ng 2rocess ;onger the 2rocess 2er%od of man/fact/re larger %s the amo/nt of work%ng ca2%tal reB/%red.

51

$e2son24 v2ri2tions) 6n certa%n %nd/str%es raw mater%al %s not a&a%la#le thro/gho/t the !ear. The! ha&e to #/! raw mater%als %n #/lk d/r%ng the seasons to ens/re an /n%nterr/2ted flow and 2rocess them d/r%ng the ent%re !ear.

61

7or8in9 C2:it24 Cyc4e) 6n a man/fact/r%ng concern the work%ng ca2%tal c!cle starts w%th the 2/rchase of raw mater%al and ends w%th the real%Fat%on of cash from the sale of f%n%shed 2rod/cts. Th%s c!cle %n&ol&es 2/rchase of raw mater%al and stores %ts con&ers%on %nto stocks of f%n%shed goods thro/gh work%ng4%n42rogress w%th 2rogress%&e %ncrement of la#o/r and ser&%ce costs.

R2te of stoc8 (urnover) There %s a h%gh degree of %n&erse co4relat%onsh%2 #etween the B/ant/m of work%ng ca2%tal and the &eloc%t! or s2eed w%th wh%ch the sales are effected. A f%rm ha&%ng a h%gh rate of stock t/rno&er w%ll need lower amo/nt of work%ng ca2%tal as com2ared to a f%rm ha&%ng a low rate of t/rno&er.

!1

Credit Po4icy) 78

The cred%t 2ol%c! of a concern %n %ts deal%ng w%th de#tor and cred%tors %nfl/ence cons%dera#l! the reB/%rements of work%ng ca2%tal. A concern that 2/rchases %ts reB/%rements on cred%t and sells %ts 2rod/cts G ser&%ces on cash reB/%res lesser amo/nt of work%ng ca2%tal. "1 /usiness Cyc4es) +/s%ness c!cle refers to alternate e32ans%on and contract%on %n general #/s%ness act%&%t!. 6n a 2er%od of #oom %.e.5 when the #/s%ness %s 2ros2ero/s there %s a need for larger amo/nt of work%ng ca2%tal d/e to %ncrease %n sales5 r%se %n 2r%ces o2t%m%st%c e32ans%on of #/s%ness5 etc. 1#1 R2te of -ro>t< of /usiness) The work%ng ca2%tal reB/%rement of a concern %ncrease w%th the growth and e32ans%on of %ts #/s%ness act%&%t%es. Altho/gh %t %s d%ff%c/lt to determ%ne the relat%onsh%2 #etween the growth %n the &ol/me of #/s%ness and the growth %n the work%ng ca2%tal of #/s%ness5 !et %t ma! #e concl/ded that for normal rate of e32ans%on %n the &ol/me of #/s%ness. 111 E2rnin9 C2:2city 2nd 'ividend :o4icy) Some f%rms ha&e more earn%ng ca2ac%t! than others d/e to B/al%t! of the%r 2rod/cts5 mono2ol! cond%t%ons5 etc. S/ch f%rms w%th earn%ng ca2ac%t! ma! generate cash 2rof%ts from o2erat%ons and contr%#/te to the%r work%ng ca2%tal. 121 Price +eve4 C<2n9es= Changes %n the 2r%ce le&el also affect the work%ng ca2%tal reB/%rements. 8enerall! the r%s%ng w%ll reB/%re the f%rm to ma%nta%n larger amo/nt of work%ng ca2%tal as more f/nds w%ll #e reB/%red to ma%nta%n the same c/rrent assets. 131 %t<er f2ctors)

79

Certa%n other factors s/ch as o2erat%ng eff%c%enc! management a#%l%t! %rreg/lar%t%es of s/22l! %m2ortant 2ol%c! asset str/ct/re %m2ortance of la#o/r #ank%ng fac%l%t%es etc. also reB/%rements of work%ng ca2%tal. %nfl/ence the

A *A+3$I$ % F F I*A*CIA+ $ (A(EME*($

Me2nin9) 8enerall! f%nanc%al statement refers to two statements5 the #alance sheet or statements of f%nanc%al 2os%t%on5 reflect%ng the assets l%a#%l%t%es and ca2%tal as on a 2art%c/lars date. And %ncome statement or 2rof%t and loss statement show%ng the res/lts ach%e&ed d/r%ng a certa%n 2er%od. Jh%ch are 2re2ared at the end of acco/nt%ng !ear (or #/s%ness organ%Fat%on +es%des = The anal!s%s of f%nanc%al statement %s an attem2t to determ%ne the s%gn%f%cance and mean%ng of the f%nanc%al statements data> Accord%ng to !res = (%nanc%al statement anal!s%s %s largel! st/d! the &ar%o/s f%nanc%al factors %n #/s%ness as of relat%onsh%2 among

d%sclosed #! a s%ngle set of statements and st/d! of the trend of these factors as shown %n a ser&%ce of statement. Accord%ng to Nemed! and /ller = The anal!s%s and %nter2retat%on of

f%nanc%al statements are an attem2t to determ%ne the s%gn%f%cance and mean%ng of f%nanc%al statement data so that the forecast ma! #e made of the 2ros2ects for #efore earn%ngs a#%l%t! to 2a! %nters and deled mat/r%t%es and 2rof%ta#%l%t! and so/nd d%&%dend 2ol%c!. Th/s anal!s%s of f%nanc%al statement s means s/ch a treatment of the %nformat%on conta%ned %n the f%nanc%al statements. 6n 2la%nl! s2eak%ng the techn%B/es of f%nanc%al statements refers to e&al/ate the 2ast5 c/r&et and Pro$ected 2erformance of meas/re the enter2r%se a #/s%ness f%rm. And the techn%B/es of l%B/%d%t! 80 2rof%ta#%l%t! sol&enc! and other

anal!s%s can #e a22l%ed to an! k%nds of f%nanc%al data .6t %s an attem2t to

%nd%cators to access %ts eff%c%enc! and 2erformance f%nanc%al statement anal!s%s wh%ch are g%&en %n the follow%ng.

P R%CE'&RE$ % F F I*A*CIA+ A *A+3$I$

1. -eterm%n%ng the 2/r2ose of anal!s%s. 2. 6dent%f%cat%on of the meas/rement #ase. 3. ReB/%rement of f%nanc%al statement ". Pre2arat%on of +alance sheet and PG; Acco/nt '. Tele&%s%on of data. *. A22l%cat%on of a22ro2r%ate techn%B/e ,. (%nal Anal!s%s .. 6nter2retat%on and Presentat%on.

%/KEC(I.E$
The anal!s%s of f%nanc%al statements ser&e n/m#er of d%fferent o#$ect%&es5 1. E&al/at%on of 2ast 2erformance 2. A22ra%sal of 2resent cond%t%ons 3. Pred%ct%on of f/t/re 2otent%al +as%call! h%stor%cal f%nanc%al statements are #etter s/%ted for the f%rst two 2/r2oses. )owe&er the ma$or%t! of statement readers are %nterested %n the 2red%ct%on %.e. ca2ac%t! of f%rm to grow and 2ros2er and the a#%l%t! of a f%rm to ado2t to &erg%ng cond%t%ons. The o#$ect%&es of anal!s%s of f%nanc%al statement are to ser&e the %nterest of &ar%o/s 2art%es5 l%ke management %n&est%ng 2/#l%c5 8o&ernment5 em2lo!ee of the concern5 ed/cat%on%st5 trade assoc%at%ons5 stock e3change and research %nst%t/t%ons.

MA*A-EME*()
(%nanc%al management %s a &%tal 2art of management. 6t cons%sts all f%nanc%al f/nct%ons and all f%nanc%al statement of #/s%ness enter2r%se

81

and the f%nanc%al management concerned w%th the so/ndness of ca2%tal str/ct/re. 6ts effect%&e /t%l%Fat%on to know regardl! &%a#%l%t! as on ongo%ng concern. anagement of cash5 %n &ent/re and f%3ed assets and adeB/ac! of ca2%tal str/ct/re. And management %s %n&ested %n the f%nanc%al 2erformance and the f%nanc%al cond%t%on of enter2r%se.

I*.E$(%R$
6n&estors of the #/s%ness are %nterested to know the earn%ng ca2ac%t! of the #/s%ness and %ts 2ros2ects of f/t/re growth As well as he %s %n tr/sted %n the 2rof%ta#%l%t! and safet! of h%s %n&estment and wo/ld l%ke to know whether the #/s%ness %s 2rof%ta#le. The %n&estor at all t%mes and the lender of a#normal t%mes wo/ld need to know. 9a: Te res/lts of o2erat%ons and f%nanc%al 2os%t%on of the #/s%ness onl! thro/gh the f%nanc%al statement. 9#: The com2an! has #een earn%ng well and %s %n a 2os%t%on to 2a! %m2ress%&e d%&%dends5 as %t was do%ng %n the 2ast. 9c: The f%nanc%al so/ndness 2ro&%des ass/rance as to the f/t/re sta#%l%t! of the concern. 9d: The ad&antage from th%s anal!s%s %s that %t o2ens /2 a w%der range of %n&estment %ncome of the %n&estors w%tho/t a corres2ond%ng loss of safet! at %n&estment.

/A*0ER$ A*' +E*'ER$

+anker and lender wo/ld also l%ke to know the safet! of the%r %n&estment and rel%a#%l%t! of reforms. And the! are %nterested to know short term as wall as long4term sol&enc! 2os%t%ons of the ent%t!.

$&PP+IER$
S/22l%ers of enter2r%se are %nterested %n rece%&%ng the%r 2a!ment and to know regard%ng the sol&enc! of the #/s%ness %.e. the a#%l%t! of the com2an! to mast the de#ts when the! f/ll d/e.

82

EMP+%3EE$
Em2lo!ees %n tr/sted %n #etter emol/ments #on/s and cont%n/ance of the #/s%ness. The! wo/ld l%ke to know %ts f%nanc%al 2erformance and 2rof%ta#%l%t! and to 2ress the%r demands for f/rther %ncrease %n wages and other #enef%ts. These standards are /sed #! them %n s/22ort of the%r demands.

C&$(%MER$
C/stomers ha&e an %nterested %n %nformat%on regard%ng cont%n/ance of an enter2r%se. Accord%ng #! the act%&%t%es of %ts c/stomers are ;ongle! l%nked w%th %ts a#%l%t! to cont%n/e.

RE-&+A(%R3 A&(,%RI(IE$
Reg/lator! A/thor%t%es wo/ld l%ke to know the 2rof%ts of #/s%ness And the f%nanc%al statements 2re2ared are as 2er s2ec%f%ed lows and r/les %t hel2 them a great deal %n deter m%n%ng the ta3es 2a!a#les.

-%.ER*ME*(
The 8o&ernment %nterest %n the anal!s%s of f%nanc%al statements of #/s%ness. The! ha&e to know f%nanc%al %nformat%on to reg/late the act%&%t%es of the enter2r%se5 determ%ne ta3at%on 2ol%c! com2%lat%on of nat%onal %ncome stat%st%cs.

$(%C0 E@C,A*-E
The stock e3change %nterested %n f%nanc%al statements #eca/se the! 2ro&%de /sef/l f%nanc%al %nformat%on. +es%des the stock e3change %s an %nst%t/t%on wh%ch fac%l%tates deal%ngs of sale and 2/rchase of shares and de#ent/res of com2an%es. 6t g%&es also %nformat%on regard%ng com2an%es to the%r mem#ers.

P&/+IC

83

The 2/#l%c %s %nterested to know the 2ra!ers of enter2r%se5 wh%ch the! ma! /nder stand from f%nanc%al statements. +eca/se the act%&%t%es of an enter2r%se largel! %nfl/ence the local econom!.

PARAME(ER$ %F A*A+3$I$
There %s a n/m#er of 2arameters are /sed for the 2/r2ose of anal!s%s5 the! are?.. +reak e&en Anal!s%s Rat%o Anal!s%s Trend Anal!s%s Common s%Fe Statements Anal!s%s Cash (low Anal!s%s

(RE*' A*A+3$I$
Trend Anal!s%s %s an %m2ortant and /sef/l techn%B/e of anal!s%s and %nter2retat%on of f%nanc%al statements. Ender the techn%B/e the rat%o of d%fferent wa!s. 1. 2. 3. Trend rat%os. Trend 2ercentages 8ra2h%c and d%agrammat%c re2resentat%on %tems for &ar%o/s 2er%ods are calc/lated and then a com2ar%son %s made. Trend anal!s%s lanlee done %n three follow%ng

&ti4ity of (end An24ysis

91: 6t %s a s%m2le techn%B/e and eas! to /nderstand. So %t does not %n&ol&e ted%o/s calc/lat%ons and reB/%res tra%ned e32erts. 92: 93: +r%efl! %t h%s methods %nd%cates the f/t/re trends. 6t red/ces the charges of errors and %t 2ro&%des the o22ort/n%t! to com2are the 2ercentages w%th also sol/te f%g/res.

(RE*' RA(I%
+efore Rat%o Anal!s%s5 f%rstl! we sho/ld know read%l! rat%o. 6n general mean%ng. Rat%o %s an /s 2ress%on of relat%onsh%2 #etween one f%g/re and

84

another

f%g/re rat%o

wh%ch /sed

are for

m/t/all! e&al/at%ng

%nterde2endent. the f%nanc%al

6n

f%nanc%al and

statements

2os%t%on

2erformance of the f%rm. 6n 2la%nl! s2eak%ng Rat%o Anal!s%s %s a 2owerf/l and %m2ortant tool of f%nanc%al anal!s%s. The relat%onsh%2 #etween two acco/nt%ng f%g/res /s 2ressed mathemat%call! %s known as f%nanc%al rat%o. Rat%o s/mmar%es the large B/ant%t%es5 of f%nanc%al data and to make B/al%tat%&e5 $/dgment regard%ng the f%rmIs f%nanc%al 2erformance for e3am2le cons%der correct rat%o. 6t %s calc/lated #! d%&%d%ng c/rrent assets5 #! c/rrent l%a#%l%t%es. The rat%o %nd%cates a relat%onsh%2 #etween c/rrent assed and c/rrent l%a#%l%t%es. And acco/nt%ng rat%o shows the %nter relat%onsh%2 wh%ch E3%sts among &ar%o/s acco/nt%ng data. 6t can #e 2ress/red %n two forms. The f%rst %s known as s%m2le form rat%o or 2/re rat%o. 6t %s e32ressed as B/ot%ent . The second from %s to con&ert a s%m2le or 2/re rat%o %nto a 2ercentage. There are man! a/thors descr%#ed &ar%o/s def%n%t%ons on rat%o anal!s%s5 wh%ch are g%&en follow%ng. 1. Accord%ng to f%3at%on well and +ed ford Rat%o %s an e32ress%on of B/ant%tat%&e relat%onsh%2 #etween f%g/res drawn from f%nanc%al statements. And =Rat%o %s an e32ress%on of B/ant%tat%&e relat%onsh%2 #etween two n/m#er. 2. Accord%ng to )/nt J%ll%ant5 -onaldosa = Rat%o are s%m2l! a means of h%gh l%ght%ng %n ar%thmet%cal terms of relat%onsh%2 #etween f%g/res drawn from f%nanc%al statements. 3. Accord%ng to Nenned! and as a rat%on. +es%des5 Rat%o anal!s%s %s the 2rocess of determ%n%ng and %nter 2rat%ng n/mer%cal relat%on sho2 #etween f%g/res of f%nanc%al statements. c %ll%on = The relat%onsh%2 of one

%tem to another e32ressed %n s%m2le mathemat%cal form %s known

85

Fin2nci24 $t2tements (%nanc%al statements5 also called f%nanc%al re2orts5 are acco/nt

#alances arra!ed %n effect%&e and mean%ngf/l order so that the facts and conce2ts the! 2ortra! ma! #e read%l! %nter2reted and /sed as #ased for dec%s%ons #! all 2eo2le who are %nterested %n the affa%rs of #/s%ness. +! the hel2 of all the re2orts the management ma! re&%ew the f%rmIs 2rogress and dec%ded /2on the co/rse of act%on to #e taken %n f/t/re. 6ts 2/r2ose %s to con&e! an /nderstand%ng of some f%nanc%al as2ects of a #/s%ness f%rm. 6t ma! show a 2os%t%on at a moment %n t%me5 as %n case of a #alance sheet or ma! re&eal a ser%es of act%&%t%es or a g%&en 2er%od of t%me as %n case of %ncome statement. The term =(%nanc%al Statement> as /sed %n modern #/s%ness5 refers to statement the #alance sheet or statement of f%nanc%al 2os%t%on reflect%ng the assets5 l%a#%l%t%es and ca2%tal as on a 2art%c/lar date and %ncome statement or 2rof%t 7 loss. Statement show%ng the res/lts ach%e&ed d/r%ng a certa%n 2er%od5 wh%ch are 2re2ared at the end of acco/nt%ng !ear for a #/s%ness enter2r%se (%nanc%al statements are the o/tcome of s/mmar%F%ng 2rocess of acco/nt%ng.

*2ture of fin2nci24 st2tements The f%nanc%al statements are 2re2ared on the #as%s of recorded facts. The recorded facts are those wh%ch ca# #e e32ressed %n monetar! terms. The statements are 2re2ared for a 2art%c/lar 2er%od5 generall! one !ear. The transact%ons are recorded %n a chronolog%cal order as and when the e&ent ha22en. The acco/nt%ng records and f%nanc%al statements 2re2ared from these records are #ased on h%stor%cal costs. The f%nanc%al statements #! nat/re are s/mmar%es of the %tems recorded %n the #/s%ness and these statements are 2re2ared 2er%od%call!.

86

Person24 Lud9ments E&en tho/gh certa%n standard acco/nt%ng con&ers%ons are followed %n 2re2ar%ng f%nanc%al stat #/t st%ll 2ersonal $/dgment of the acco/ntant 2la!s an %m2ortant 2art. %;Lective of fin2nci24 st2tements1 (%nanc%al statements are the so/rces of %nformat%on on the #as%s of wh%ch concl/s%ons are drawn a#o/t the 2rof%ta#%l%t! and f%nanc%al 2os%t%on of a concern. The! are the ma$or means em2lo!ed #! f%rms to 2resent the%r f%nanc%al s%t/at%on of owners5 cred%t%ns and the general 2/#l%c. The 2r%mar! o#$ect%&e of f%nanc%al statements %s to ass%st %n dec%s%on mak%ng. 9%: To 2ro&%de rel%a#le f%nanc%al %nformat%on a#o/t econom%c reso/rces and o#l%gat%ons of a #/s%ness f%rm. 9%%: To 2ro&%de other needed %nformat%on a#o/t change %n s/ch econom%c reso/rces and o#l%gat%ons. 9%%%: To 2ro&%de rel%a#le %nformat%on a#o/t changes %n net reso/rces ar%s%ng o/t of #/s%ness act%&%t%es. 9%&: To 2ro&%de f%nanc%al %nformat%on that ass%sts %n est%mat%ng the earn%ng 2otent%als of #/s%ness. 9&: To d%sclose5 to the e3tent 2oss%#le5 other %nformat%on related to the f%nanc%al statements that %s rele&ant to the needs of the /sers of these statements.

Fin2nci24 st2tement 2n24ysis Anal!s%s and %nter2retat%on of f%nanc%al statements are an attem2t to determ%ne the s%gn%f%cance and mean%ng of the f%nanc%al statement data so that a forecast ma! #e made of the 2ros2ects for f/t/re earn%ngs5 a#%l%t! to 2a! %nterest5 de#t mat/r%t%es L #oth c/rrent as well as longterm and 2ro#a#%l%t! of a so/nd d%&%dend 2ol%c!.

87

(y:es of fin2nci24 An24ysis )5 A d%st%nct%on ma! #e drawn #etween &ar%o/s t!2es of f%nanc%al anal!s%s e%ther on the #as%s of mater%al /sed for the same. a: 1) Accord%ng to ater%al /sed 4

ECtern24 An24ysis)

Those who do not ha&e access to the deta%led records of the com2an! make %t. Th%s gro/25 wh%ch has to de2end almost ent%rel! on 2/#l%shed f%anc%al statements5 %ncl/des %n&estors5 cred%t agenc%es and go&ernmental agenc%es reg/lat%ng a #/s%ness %n a nom%nal wa!. The 2os%t%on of the e3ternal anal!st has #een %m2ro&ed %n recent t%mes ow%ng to the go&ernmental reg/lat%ons reB/%r%ng #/s%ness /nder tak%ngs to make a&a%la#le deta%led %nformat%on to the 2/#l%c thro/gh a/d%ted acco/nts. 2) Intern24 An24ysis )5 The %nternal anal!s%s %s accom2l%shed #! those who ha&e access to the #ooks of acco/nts and all other %nformat%on related to #/s%ness. Jh%le cond/ct%ng th%s anal!s%s the anal!st %s a 2art of the enter2r%se he %s anal!F%ng. Anal!s%s for manager%al 2/r2oses %s the %nternal t!2e of anal!s%s and %s cond/cted #! e3ec/t%&es and em2lo!ee of the enter2r%se as well as go&ernmental and co/rt agenc%es wh%ch ma! ha&e ma$or reg/lator! and other $/r%sd%ct%on o&er the #/s%ness. ;) 1: Accordin9 to moctus o:er2ndit of 2n24ysis)5 )or%Fontal Anal!s%s :4 Jhen f%nanc%al statements for a n/m#er of !ears are re&%ewed and anal!sed5 the anal!s%s %s called =hor%Fontal anal!s%s>. As %t %s #ased on data from !ear to !ear5 rather than on one date or 2er%od of t%me as a whole5 th%s %s also known as =-!nam%c anal!s%s>.

88

2:

Aert%cal Anal!s%s :4 6t %s freB/entl! /sed for referr%ng to rat%os de&elo2ed for one date

or for one acco/nt%ng 2er%od. Aert%cal anal!s%s %s also called =stat%c anal!s%s>. Th%s %s not &er! cond/ct%&e to a 2ro2er anal!s%s of the f%rmIs f%nanc%al 2os%t%on and %ts %nter2retat%on as %t does not ena#le to st/d! date %n 2ers2ect%&e. Th%s can onl! #e 2ro&%ded #! a st/d! cond/cted o&er a n/m#er of !/ears so that com2ar%sons can #e effected. Therefore5 &ert%cal anal!s%s %s not &er! /se f/l. *eed of F1$1A The need of f%nanc%al statement anal!s%s ar%ses #eca/se of d%fferent o#$ect%&e of d%fferent /sers of f%nanc%al statement and conseB/entl!. The! seek answers to &ar%o/s B/est%ons 2erhnent to them. These o#$ect%&es can #e d%&%ded %n to two 2arts. 9%: Common o#$ect%&e

Aar%o/s common o#$ect%&es of f%nanc%al statement anal!s%s ca #e categor%ses as /nder To get tr/e and fa%r &%ew of f%nanc%al health of the re2ort%ng ent%t!. To get acc/rate 2%ct/re of strength and sta#%l%t! of re2ort%ng ent%t!. To ens/re the f%rms ca2ac%t! to 2a! %ts short term 2a!ment. To ha&e an %dea of o2erat%onal eff%c%enc! and 2rof%ta#%l%t! of re2ort%ng ent%t!. To ha&e an %dea of relat%&e 2erformance of re2ort%ng ent%t! kee2%ng %n &%ew the %nd/str! as a whole of wh%ch re2ort%ng ent%t! %s a 2art. To ha&e a look /2on f/t/re 2ros2ects of re2ort%ng ent%t!.

9%%:

6nd%&%d/al O#$ect%&e :4

89

a:

(or owners and 6n&estors

To know f%nanc%al cond%t%on of the organ%sat%on %n #etter wa!. To ha&e a look /2on 2erformance of &ar%o/s segments of re2ort%ng entst!.

To f%nd o/t rank of re2ort%ng ent%t! %n the %nd/str! to wh%ch %t #elongs.

9#:

(or +ankers and

one! lenders 4

To ha&e look /2on 2a!%ng ca2ac%t! of re2ort%ng ent%t!. To ha&e look /2on sol&enc! 2os%t%on. To ha&e a look /2on com2onents of ca2%tal str/ct/re and #orrow%ng ca2ac%t! of the f%rm.

9c:

(or

anagement

To take hel2 of f%nanc%al statement anal!s%s %n tak%ng %m2ortant dec%s%ons.

To asses 2rof%ta#%l%t! 2os%t%on.

PR%CE'&RE %F F$A There are three ste2s %n&ol&ed %n the anal!s%s of f%nanc%al statements. These are 9%: select%on. 9%%: Class%f%cat%on and 9%%%: 6nter2retat%on. The f%rst ste2 %n&ol&es select%on of %nformat%on or data rele&ant to the 2/r2ose of anal!s%s of f%nanc%al statements. The 2 nd ste2 %n&ol&ed %s the method%cal class%f%cat%on of the data and the th%rd ste2 %ncl/des draw%ngs of %nterences and concl/s%ons. 91: The anal!st sho/ld acB/a%nt h%mself w%th the 2r%nc%2les and 2ost/lates of acco/nt%ng. )e sho/ld know the 2lans and

90

2ol%c%es of the management so that he ma! #e a#le to f%nd o/t whether these 2lans. Are 2ro2erl! e3ec/ted or not. 92: The e3tent of anal!s%s sho/ld #e determ%nd so that the s2here of work ma! #e dec%ded. 6f the a%m %s to f%nd o/t the earn%ng ca2ac%t! of the enter2r%se then anal!s%s of %ncome statement w%ll #e /ndertaken. On the other hand %f f%nanc%al 2os%t%on %s to #e st/d%es then +GS anal!s%s w%ll #e necessar!. 93: The f%nanc%al data g%&en %n the statement sho/ld #e

reorgan%Fed and re4arranged. 6t w%ll %n&ol&e the gro/2%ng of s%m%lar data /nder same heads5 #reak%ng down of %nd%&%d/al com2onents of statement accord%ng to nat/re. The data %s red/ced to a standard form. 9": A relat%onsh%2 %s esta#l%shed among f%nanc%al statements w%th hel2 of tools and techn%B/es of anal!s%s s/ch as rat%os5 trends5 common s%Fe5 f/nds flow etc. 9': The %nformat%on %s %nter2reted %n a s%m2le and /nderstandle wa!. The s%gn%f%cance and /t%l%t! of f%nanc%al data %s e32la%ned for hel2%ng dec%s%on tak%ng. 9*: The concl/s%ons drawn from %nter2retat%on are 2resented to the management %n the form of re2orts.

Procedure for 8no>in9 ><et<er A tr2ns2ction Resu4ts in t<e f4o> of funds or not1 1. Anal!se %n&ol&ed. 2. 3. ake $o/rnal entr! of the transact%on. -eterm%ne whether the acco/nts %n&ol&ed %n the transact%on are c/rrent or non4c/rrent. the transact%on and f%nd o/t the two acco/nts

91

".

6f #oth the acco/nts %n&ol&ed are c/rrent %.e. e%ther c/rrent asset or c/rrent l%a#%l%t%es5 %t does not res/lt %n the flow of f/nds.

'.

6f #oth the acco/nt %n&ol&ed are non4c/rrent %.e. e%ther 2ermanent assets or 2ermanent l%a#%l%t%es %t st%ll does not res/lt %n the flow of f/nds.

*.

6f the acco/nts %n&ol&ed are s/ch that one %s a c/rrent all wh%le the other %s a non4c/rrent AGC. %.e. c/rrent asset and 2ermanent l%a#%l%t! or c/rrent asset and f%3ed asset or c/rrent l%a#%l%t! and f%3ed asset or c/rrent l%a#%l%t! and f%3ed asset or c/rrent l%a#%l%t! and 2ermanent l%a#%l%t! then %t res/lts %n the flow of f/nds.

Me2nin9 of FF$ (/nds flow statements %s a method #! wh%ch we st/d! changes %n the f%nanc%al 2os%t%on of a concern #etween #eg%nn%ng and end%ng f%nanc%al statements dates. 6tIs a statement show%ng so/rces and /ses of f/nds for a 2er%od of t%me. Accordin9 to Fou48e ? =A statement of so/rces and a22l%cat%on of f/nds %s to a techn%cal de&%ce des%gned to anal!se the changes %n the f%nanc%al cond%t%on of a #/s%ness enter2r%se #etween two dates.> Accordin9 to Ant<ony )5 =The f/nds flow statement descr%#es the so/rce from wh%ch add%t%onal f/nds were der%&ed and the /se to wh%ch these so/rces were 2/t.> (/nds flow statement %s called #! &ar%o/s names s/ch as so/rces and a22l%cat%on of f/nds5 statement of changes %n f%nanc%al 2os%t%n5 so/rces and /ses of f/nds5 s/mmar! of f%nanc%al o2erat%ons5 o&ement of f/nds

92

statement5 (/nds Rece%&ed 7 -%s#/rsed statement5 f/nds generated and e32ended statement.

&sesB $i9nific2nce 2nd Im:ort2nce of FF$ )5 A f/nds flow statement %s an essent%al fool for the f%nanc%al anal!s%s and %s of 2r%mar! %m2ortance to the f%nanc%al mgmt. Now4a4da!s5 %t %s #e%ng w%del! /sed #! the f%nanc%al anal!s%s5 cred%t grant%ng %nst%t/t%ons and f%nanc%al managers. The #as%c 2/r2ose of a f/nds flow statement %s to re&eal the changes %n the work%ng ca2%tal on the two #alance sheet dates. 6t also descr%#es the so/rces from wh%ch add%t%onal work%ng ca2%tal has #een f%nanced and the /ses to wh%ch work%ng ca2%tal has #een a22l%ed.

The s%gn%f%cance or %m2ortance of f/nds flow statement can #e well followed from %ts &ar%o/s /ses g%&en #elow. It <e4:s in t<e 2n24ysis of fin2nci24 o:er2tion ) The f%nanc%al statements re&eal the net effect of &ar%o/s transact%ons on the o2erat%onal and f%nanc%al 2os%t%on of a concern. The #alance sheet g%&e a stat%c &%ew of the reso/rces of a #/s%ness and the /ses to wh%ch these reso/rces ha&e #een 2/t at a certa%n 2o%nt of t%me. The ((S e32la%ns ca/ses for s/ch changes and also the effect of these changes on the l%B/%d%t! 2os%t%on of the com2an!. It t<ro>s 4i9<t on m2ny :er:4eCin9 Fuestins of 9ener24 interest ? Jh%ch otherw%se ma! #e d%ff%c/lt to #e answered5 s/ch as: a: Jh! were the net c/rrent assets lesser %n s2%te of h%gher 2rof%t and &%ce4&ersaU #: Jh! more d%&%dends co/ld not #e declared %n s2%te of a&a%la#le 2rof%tsU

93

c:

)ow was 6t 2oss%#le to d%str%#/te more d%&%dends than the 2resent earn%ngs U

d: e:

Jhat ha22ened to the net 2rof%t U where d%d the! go. Jhat ha22ened to the 2rosceeds of sale of f%3ed assets or %ss/e of shares5 de#ent/res etcU

f: g:

Jhat are the so/rces of the re2a!ment of de#t U )ow was the %ncrease %n work%ng ca2%tal f%nanced and how w%ll %t #e f%nanced %n f/t/reU

3)

It <e4:s in t<e form2tion of 2 re24istic dividend :o4icy )5 Some t%mes a f%rm has s/ff%c%ent 2rof%ts a&a%la#le for d%str%#/t%on

as d%&%dend #/t !et %t ma! not #e ad&%sa#le to d%str%#/te d%&%dend for lock of l%B/%d or cash so/rces. 6n s/ch cases a f/nds flow statement hel2s %n the format%on of a real%st%c d%&%dend 2ol%c!. 4) It <e4:s in t<e :ro:er 244oc2tion of resources )5

The reso/rces of a concern are alwa!s l%m%ted 7 %t wants to make the #est /se of these reso/rces. A 2ro$ected f/nds flow statement constr/cted for the f/t/re hel2s %n mak%ng mangager%al dec%s%ons. The f%rm can 2lan the de2lo!ment of %ts reso/rces and allocate them among &ar%o/s a22l%cat%ons. 5) It 2cts 2s 2 future 9uide )5 A 2ro$ected f/nds flow statement also acts as a g/%de for f/t/re %s the management. The management can come to know the &ar%o/s 2ro#lems %t %s go%ng to face %n near f/t/re for want of f/nds. The f%rmIs f/t/re needs of f/nds can #e 2ro$ected well %n ad&ance and also the t%m%ng of these needs. The f%rm can arrange to f%nance these needs more effect%&el! and a&o%d f/t/re 2ro#lems. +imit2tion of funds f4o> st2tement )5

94

The f/nds flow statement has a n/m#er of /ses5 howe&er5 %t has certa%n l%m%tat%ons also5 wh%ch are l%sted #elow : 1: 6t sho/ld #e remem#ered that a f/nds flow statement %s not a s/#st%t/te of an %ncome statement or a #alance sheet. 6t 2ro&%des onl! some add%t%onal %nformat%on as regards changes %n work%ng ca2%tal. 2: 3: 6t cannot re&eal cont%n/o/s changes. 6t %s not an or%g%nal statement #/t s%m2l! are arrangement of data g%&en %n the f%nanc%al statement. ": 6t %s essent%all! h%stor%c %n nat/re and 2ro$ected f/nds flow statements cannot #e 2re2ared w%th m/ch acc/rac!. ': Changes %n cash are more %m2ortant and rele&ant for f%nanc%al management than the work%ng ca2%tal.

CA$, F+%7 $(A(EME*( ) I*(R%'&C(I%* Cash 2la!s a &er! %m2ortant role %n the entr%es econom%c l%fe of a #/s%ness. A f%rm needs cash to make 2a!ment to %ts s/22l%es5 to %nc/r da! to da! e32enses and to 2a! salar%es5 wages5 %nterest and d%&%dend etc. %nfact what #lood %s to a h/man #od!5 cash %s to a #/s%ness enter2r%se. 6t %s &er! essent%al for a #/s%ness to ma%nta%n an adeB/ate #alance of cash. +/t man! a t%mes5 a concern o2erates 2rof%ta#l! and !et %t #ecomes &er! d%ff%c/lt to 2a! ta3es and d%&%dend. Th%s ma! #e #eca/se L 9%: altho/gh ha&e 2rof%t ha&e #een earned !et cash ma! not ha&e #een rece%&ed or 9%%: e&en %f cash has #een rece%&es5 %t ma! ha&e dra%ned o/t ca/sed5 for some other 2/r2osed. Th%s mo&ement of cash %s of &%tal %m2ortant to the management.

95

Me2nin9 )5 Cash flow statement %s a statement wh%ch descr%#es the %nflows co/rses and o/t flows 9/ses: of cash and cash eB/%&alents %n an enter2r%se d/r%ng a s2ec%f%ed 2er%od of t%me. s/ch a statement en/merat%on net effects of the &ar%o/s #/s%ness trans%t%ons %n cash and %ts eB/%&alents and takes %nto acco/nt rece%2ts and d%s#/rsement of cash. A cash flow statement s/mmar%Fes the ca/ses of changes %n cash 2os%t%on of a #/s%ness ca/ses of changes %n cash 2os%t%on of a #/s%ness enter2r%se #etween dates of two #alances sheets. Accord%ng to AS43 9Re&%sed: an enter2r%se sho/ld 2re2are a cash flow statement and sho/ld 2resent %f for each 2er%od for wh%ch f%nanc%al statements 2re2ared. The term and cash eB/%&alents and cash flows are /sed %n th%s statement w%th the follow%ngs : 9%: 9%%: cash com2r%ses cash on hand and demand de2os%ts cash eB/%&alents are short term h%ghl! l%B/%d %n&estments that are read! con&ert%#le %nto known amo/nts of cash and wh%ch are s/#$ects to an %ns%gn%f%cant r%sk of change %n &al/e. Cash eB/%&alents are held for the 2/r2ose of meet%ng short4term cash comm%tments rather than for %n&estment or other 2/r2oses. 9%%%: Cash flows are %nflows and o/t flows of cash and cash eB/%&alents. (low of cash %s ser%al to ha&e taken 2lace when an! transact%on make changes %n the amo/nt of cash eB/%&alents a&a%la#le #efore ha22en%ng of the transact%ng.

Met<od of C2s< F4o>

Cash management needs strateg%es to deal w%th &ar%o/s facets of cash. (low%ng are some of %ts facts. 2) C2s< P42nnin9) Cash 2lann%ng %s a techn%B/e to 2lan and control the /se of cash. A 2ro$ected cash flow statement ma! #e 2re2ared5 #ased on the 96

2resent #/s%ness o2erat%ons and ant%c%2ated f/t/re act%&%t%es. The cash %nflows from &ar%o/s so/rces ma! #e ant%c%2ated and cash a o/tflow w%ll determ%ne the 2oss%#le /ses of cash.

;)

C2s< Forec2st 2nd /ud9etin9) The cash #/dget %s the most %m2ortant de&%ce for the control of rece%2ts and 2a!ments of cash. 6f cash #/dget %s an est%mate of cash rece%2ts and d%s#/rsements d/r%ng a f/t/re5 short or long 2er%od of t%me. The short4term forecasts can #e made w%th the hel2 of cash flow 2ro$ect%ons. The f%nance manager w%ll make est%mates of l%kel! rece%2ts %n the near f/t/re and the e32ected d%s#/rsements %n the 2er%od. The long4term cash forecasts are also essent%al for 2ro2er cash 2lann%ng. These est%mates ma! #e for three5 fo/r5 f%&e or more !ears. ;ong4term forecasts %nd%cate com2an!Is f/t/re f%nanc%al needs for work%ng ca2%tal5 ca2%tal 2ro$ect are :

(i)

Recei:ts 2nd 'is;ursements Met<od 6n th%s method the rece%2ts and 2a!ment of cash are est%mated. The cash rece%2ts ma! #e from cash sales5 collect%ons from de#tors5 sale of f%3ed assets5 rece%2ts of d%&%dend or other %ncome of all the %tems5 %t %s d%ff%c/lt forecast sales.

(ii)

AdLusted net income Met<od Th%s method ma! also know as so/rces and /sed a22roach. 6t generall! has three sect%ons. So/rces of cash5 /ses of cash and ad$/sted cash #alance. The ad$/sted net %ncome method hel2s %n 2ro$ect%ng the com2an!Is need for cash at some f/t/re date and to see whether the com2an! w%ll #e a#le to generate s/ff%c%ent cash. 6f not then %t w%ll ha&e to dec%de a#o/t #orrow%ng or %ss/%ng shares etc.

M E(,%'

%F

$ +%7I*- C A$, % &(F+%7$ )

97

A com2an! can kee2 cash #! effect%&el! controll%ng d%s#/rsements. The o#$ect%&e of controll%ng cash o/tflows %s to slow down the 2a!ments as far as 2oss%#le follow%ng methods can #e /sed to dela! d%s#/rsements. 11 P2yin9 on 42st d2t2) The d%s#/rsements can #e dela!ed on mak%ng 2a!ments on the last d/e date onl!. 6f the cred%t %s for 11 da!s then 2a!ment sho/ld #e made on 11 th da! onl!. 6t can hel2 %n /s%ng the mone! for short 2er%ods 7 the f%rm can make /se of cash d%sco/nt also. 21 P2yments t<rou9< 'r2fts) A com2an! can dela! #! %ss/%ng drafts to the s/22l%ers %nstead of g%&%ng cheB/es . Jhere a cheB/e %s %ss/ed then the com2an! w%ll ha&e kee2 a #alance on %ts acco/nt so that the cheB/e %s 2a%d whene&er %t comes. 31 AdLustin9 P2yro44 Funds) Some econom! can #e e3erc%sed on 2a!roll f/nds also. Red/c%ng the freB/enc! of 2a!ments can do %t. 6f the 2a!ments are made weekl! then th%s 2er%od can #e e3tended to a month5 secondl!5 f%nance manager can 2lan the %ss/%ng of salar! cheB/es and the%r d%s#/rsement. 41 Centr24iD2tion of P2yments) The 2a!ments sho/ld #e central%Fed and 2a!ment sho/ld #e made thro/gh drafts or cheB/es. Jhen cheB/es are %ss/ed from the ma%n off%ce then %t w%ll take t%me for the cheB/es to #e cleared thro/gh 2ost. 51 Inter5/2n8 (r2nsfer ) An eff%c%ent of cash %s also 2oss%#le #! %nter4#ank transfers. 6f the com2an! has acco/nts w%th more than one #ank then amo/nts can #e transferred to the #ank where d%s#/rsements are to #e made. 61 M28in9 use of F4o2t)

98

(loat %s d%fference #etween the #alance shown %n com2an!Is cash#ook 9+ank Col/mn: and #alance 2ass#ook of the #ank. Jhene&er a cheB/e %s %ss/ed the #alance at #ank %n cash #ook %s red/ced.

'eterminin9 %:timum C2s< /242nce

A f%rm has to ma%nta%n a m%n%m/m amo/nt to cash for sett%ng the d/es %n t%me. Th%s %s needed to 2/rchase raw mater%als 2a! cred%tors da!4to4da! e32enses5 d%&%dend etc. The test of l%B/%d%t! of the f%rm %s that %t %s a#le to meet &ar%o/s o#l%gat%ons %n t%me. There are #as%call! two a22roaches to determ%ne an o2t%mal cash #alance5 namel!: 9%: 9%%: %n%m/m Cost odels

Pre2ar%ng cash +/dget.

99

C%*C+&$I%*

The a#o&e st/d! are done #! me thro/gh OSC+ #eca/se all needed mater%al and data are g%&en #! the ACST6 accord%ngl! 6 ha&e done m! 2ro$ect. (%nall! 6 w%ll concl/de that from the anal!s%s %t %s fo/nd that the f%nanc%al 2os%t%on of the +ank %s B/%te good. The +ank has got a good f%nanc%al 2lann%ng sol&enc! 2os%t%on of the #ank %s sta#le and sat%sfactor! and the l%B/%d%t! 2os%t%on %s also good. The #ank has the a#%l%t! to 2a! %ts c/rrent o#l%gat%on %n t%me as and when d/e. +! the anal!s%s %t concl/de that the sol&enc! l%B/%d%t! and 2rof%ta#%l%t! 2os%t%on of the #ank %s good. The #ank 2erformance %s %m2ro&%ng da! #! da!.

100

$&--E$(I%*

The follow%ng %nter2retat%ons are #ased on the anal!s%s of the trend anal!s%s 7 aggregate change method : 1. +! anal!s%s the work%ng ca2%tal of the #ank %ncreased %n each !ear. 6t means the #ank has %ncreased %ts c/rrent f%nanc%al 2os%t%on5 wh%ch %s the l%fe#lood of the OSC+. 2. The l%B/%d assets of the #ank ha&e %ncreased %n regards to 2re&%o/s !ear %.e. 211142111 wh%ch shows the strangeness of the l%B/%d%t! 2os%t%on of the OSC+. 3. -e2os%ts5 +orrow%ngs5 Ad&ances and ;oans are %ncreased %n each ear %n com2ared to 2re&%o/s !ear5 wh%ch shows the long4term f%nanc%al 2os%t%on of the OSC+. ". There %s a cont%n/es %ncrease %n 2rof%t5 reser&e for last !ears. Jh%ch shows the 2rof%ta#%l%t! of the OSC+. '. +ank has rece%&ed more %nterest than %t has 2a%d. (or the last fo/r !ear the #ank has %m2ro&ed %ts 2os%t%on %n gett%ng %nterest than 2a!%ng the %nterest to de2os%tors. Jh%ch shows %m2ro&ement %n 2rof%ta#%l%t! of the #ank. *. The o2erat%ng e32enses of the #ank ha&e %ncreased %n the last fo/r !ears5 as the #ank e32ensed %ts #/s%ness for th%s reason %t has e32ended more on o2erat%ng e32enses. ,. The Net 2rof%t of the #ank has %ncreased %n the last fo/r !ears. S% %t shows good f%nanc%al 2os%t%on of the OSC+. +/t the growth rate of 2rof%t %s decreas%ng %n 2re&%o/s !ear.

101

/I/+I%-RAP,3
1. anagement Acco/nt%ng : R. N. Sharma 7 Sash% N 8/2ta 2. Pr%nc%2les of anagement Acco/nt%ng an 3. ohan S. N 8o&al

anagement Acco/nt%ng 7 (%nanc%al Control -r. S. N. aheshwar%

". '.

Ann/al re2orts of OSC+ Jae#s%t of OSC+

102