1

AN ANALYSIS ON CASH FLOW STATEMENT

WITH REFERENCE TO
UNION BANK OF INDIA

TABLE OF CONTENTS

CHAPTER

TITLE

INTRODUCTION

REVIEW OF LITERATURE

INDUSTRY PROFILE &

COMPANY PROFILE
RESEARCH
METHODOLOGY
NEED OF THE STUDY
OBJECTIVES OF THE STUDY
SCOPE OF THE STUDY
LIMITATIONS OF THE STUDY
RESEARCH DESIGN

DATA ANALYSIS &

INTERPRETATION

FINDINGS,
SUGGESTIONS &
CONCLUSION
BOBLIOGRAPHY &
ANNUXURE

CHAPTER 1
INTRODUCTION

Introduction
Cash is the basic input needed to keep the operations of the business going on a continuing
basis; it is also the final output expected to be realized by selling the product manufactured by the
manufacturing unit. Cash is the both the beginning and the end of the business operations.
Sometimes, it so happens that a business unit earns sufficient profit, but in spite of this it is
not able to pay its liabilities when the become due. Therefore, a business should be always try to
keep sufficient cash, neither more nor less because shortage of cash will threaten the firms liquidity
and solvency, whereas excessive cash will not be fruitful utilized, will simply remain ideal and

affect the profitability of a concern. Effective cash management, therefore, implies a proper
balancing between the two conflicting objectives of liquidity
The management of cash also assumes importance because it is difficult to predict cash
inflows and outflows accurately and there is no perfect coincidence between the inflows and
outflows of cash giving rise to either cash outflows exceeding inflows or cash inflows exceeding
outflows. Cash flow statement is one important tool of cash management because it throws light on
cash inflows and cash outflows of a particular period.

CHAPTER 2
REVIEW OF LITERATURE

Meaning of Cash Flow Statement

A funds flow statement based on working capital is very useful in long-range financial planning but
this statement may conceal or exclude too much. This is so because it does not take into
considerations the movements among the individual current assets and current liabilities i.e. it
shows net change in working capital. Moreover, this statement treats increases in receivables,
inventories and prepaid expenses and decreases in accounts payable, outstanding expenses and bank
over draft as equivalent to decrease in cash. Likewise, decreases in receivables, inventories and
prepaid expenses and increases in creditors, bills payable, outstanding expenses and bank overdraft
are treated as equivalent to increases in cash. This is not a correct treatment because this items do
not decrease cash or make cash available. Sundry creditors, bills payable, outstanding expenses
become payable in the next period. Similarly, inventories and receivable make cash available in the
next period. It is quite possible that there may be sufficient working capital as revealed by the funds
flow statement and still the company may be unable to meet its current liabilities as and when they
fall due. It may be due to an accumulation of inventories and an increase in trade debtors caused by
a slow down in collections. In such a situation, a cash flow statement is more useful because it
gives detailed information to the management about the sources of cash inflows and outflows. A
cash flow statement can be defined as a statement which summarizes sources of cash inflows and
uses of cash outflows of a firm during a particular period of time, say a month or a year. Such a
statement can be prepaid from the data made available from comparative balance sheet, profit and

loss account and additional information. This statement reports cash receipts and payments
classified according to entities major activities operating, investing and financing during the period
a format that reconciles the begging and ending cash balances. It reports a net cash inflow or net
cash outflow for each activity and for the overall business. It also reports from where cash has
come and how it has been spent.
Objectives
Information about the cash flows of an enterprise is useful in providing users of financial
statements with a basis to assess the ability of the enterprise to generate cash and cash
equivalents and the needs of the enterprise to utilize those cash flows. The economic decisions
that are taken by users require an evaluation of the ability of an enterprise to generate cash and
cash equivalents and the timing and certainty of their generation.
The Statement deals with the provision of information about the historical changes in cash
and cash equivalents of an enterprise by means of a cash flow statement which classifies cash flows
during the period from operating, investing and financing activities.
Usefulness of Cash Flow Statement
Cash Flow Statement is very useful to the management for short term planning due to
the following reasons:(i)
Predict future cash flows. This statement is often use as an indicator of the amount,
timing and certainty of future cash flows on the basis of what happened in the past. This approach is
better than accrual basis data presented by profit and loss account and balance sheet.
(ii) Determine the ability to pay dividends and other commitments. This statement
indicates the sources and uses of cash under operating, investing and financing activities, helps share
holders to know whether the business can make the payment of amount of dividends on their
investments in shares and creditors to receive interest and principal amount in time.
(iii) Show the relationship of net income to changes in the business cash. Generally
there is direct relation between net income and cash. I net income leads to increase in cash and wise
versa. But there may be a situation where a companys net income is high but decrease in cash
balance and increase in cash balance when net income is low. Every user is interested to know the
reasons or difference between the net income and net cash provided by operations. The net income
generally tells the progress of the business while cash flow relates to the liquidity of business. The
uses or helped to assess the reliability of net profit with the help of this statement.
(iv) Efficiency in Cash Management.
This statement is very useful to the management
in evaluating financial policies and cash position. It will help the management to make the reliable
cash flow projections for the immediate future and will tell surplus or deficiency of cash so that
management may be able to make plan for investment of surplus cash or to tap the sources where

from the deficiency is to be met. Thus it is an important financial tool for the management as it
helps in the efficient cash management.
(v) Discloses Movement of Cash. Previous year cash flow statement when compared
with the budget of that year will indicate as to what extent the resources of the enterprise were raised
and applied. Actual results when compared with the original forecast may highlight the trend of the
movement of cash that may otherwise remain undetected,
(vi) Discloses Success or Failure of Cash Planning. A Comparison of projected Cash
flow Statement with the actual Cash flow Statement will reveal the success or failure of cash
planning and incase of failure, necessary remedial steps can be taken to improve the position. It also
provides better measure for inter period and inter firm comparison.
(vii) Evaluate Management Decision. This statement, by providing information relating to
companies investing and financial activities, gives the investors and creditors about cash flow
information which help them evaluate management decisions.
(viii) Enhances the Comparability of Report. It enhance the comparability of the
reporting of operating performances by different enterprises, because it eliminates the effect of using
different accounting treatments for the same transactions and events.
Limitations of Cash Flow Statement
Inspite of various uses of Cash Flow Statement, it has the following limitations:
1.
Cash Flow Statement gives the main items of inflow and outflow of cash only and does
not show the liquidity position of the company.
2.
This statement is not a substitute of income statement which shows both cash and non
cash items. Therefore, net cash flow does not necessarily mean net income of the business.
3.
It cannot replace funds flow statement as it cannot show the financial position of the
concern in totality.
CLASSIFICATION OF CASH FLOWS
(i)

Cash Flows from Operating Activities

The amount of cash flows arising from operating activities is a key indicator of the extent to
which the operations of the enterprise have generated sufficient cash flows to maintain the operating
capability of the enterprise, pay dividends, repay loans and make new investments without
recourse to external sources of financing. Information about the specific components of
historical operating cash flows is useful, in conjunction with other information, in forecasting

future operating cash flows.

Cash flows from operating activities are primarily derived from the principal revenueproducing activities of the enterprise. Therefore, they generally result from the transactions
and other events that enter into the determination of net profit or loss. Examples of cash flows
from operating activities are:
(a)

Cash receipts from the sale of goods and the rendering of services;

(b)

Cash receipts from royalties, fees, commissions and other revenue;

(c)

Cash payments to suppliers for goods and services;

(d)

Cash payments to and on behalf of employees;

(e) Cash receipts and cash payments of an insurance enterprise for premiums and claims,
annuities and other policy benefits;
(f)
Cash payments or refunds of income taxes unless they can be specifically identified
with financing and investing activities; and
(g) Cash receipts and payments relating to futures contracts, forward contracts, option
contracts and swap contracts when the contracts are held for dealing or trading purposes.
Some transactions, such as the sale of an item of plant, may give rise to a gain or loss which is
included in the determination of net profit or loss. However, the cash flows relating to such
transactions are cash flows from investing activities.
An enterprise may hold securities and loans for dealing or trading purposes, in which case
they are similar to inventory acquired specifically for resale. Therefore, cash flows arising from
the purchase and sale of dealing or trading securities are classified as operating activities.
Similarly, cash advances and loans made by financial enterprises are usually classified as operating
activities since they relate to the main revenue-producing activity of that enterprise.
(ii)

Cash Flows from Investing Activities

The separate disclosure of cash flows arising from investing activities is important because the
cash flows represent the extent to which expenditures have been made for resources intended to
generate future income and cash flows. Examples of cash flows arising from investing activities
are:
(a)

Cash payments to acquire fixed assets (including intangibles). These payments

include those relating to capitalized research and development costs and self-constructed fixed
assets;
(b)

Cash receipts from disposal of fixed assets (including intangibles);

(c)
Cash payments to acquire shares, warrants or debt instruments of other enterprises
and interests in joint ventures (other than payments for those instruments considered to be cash
equivalents and those held for dealing or trading purposes);
(d)
Cash receipts from disposal of shares, warrants or debt instruments of other
enterprises and interests in joint ventures (other than receipts from those instruments considered to
be cash equivalents and those held for dealing or trading purposes);
(e)
Cash advances and loans made to third parties (other than advances and loans made by
a financial enterprise);
(f)
Cash receipts from the repayment of advances and loans made to third parties (other
than advances and loans of a financial enterprise);
(g)
Cash payments for futures contracts, forward contracts, option contracts and swap
contracts except when the contracts are held for dealing or trading purposes, or the payments are
classified as financing activities; and
(h)
Cash receipts from futures contracts, forward contracts, option contracts and swap
contracts except when the contracts are held for dealing or trading purposes, or the receipts are
classified as financing activities.
When a contract is accounted for as a hedge of an identifiable position, the cash flows of the
contract are classified in the same manner as the cash flows of the position being hedged.
Financing Activities
The separate disclosure of cash flows arising from financing activities is important because it
is useful in predicting claims on future cash flows by providers of funds (both capital and
borrowings) to the enterprise. Examples of cash flows arising from financing activities are:
(a) Cash proceeds from issuing shares or other similar instruments;
(b) Cash proceeds from issuing debentures, loans, notes, bonds, and other short or long
term borrowings;
(c) Cash repayments of amounts borrowed.
(d) Cash payments to redeem preference shares and

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(e) Payment of dividend.

Preparation 0f cash flow statement
An organization should prepare a cash flow statement according to according to Account
standard-3. The following basic information are required for the preparation for the cash flow
statement:
(1) Comparative Balance Sheets. Balance sheets at the beginning and at the end of the
accounting period are required to indicate to indicate the amount of changes that have taken
place in assets and liabilities and capital.
(2) Profit and loss account. This account of the current period enables to determine the amount of
cash provided by or used in operating activities during the accounting period after making
adjustments for non cash current assets and current liabilities.
(3) Additional data. In addition to the above statements, additional data are collected to
determine how cash has been provided or used e.g. sale or purchase of asset for cash.
This statement is prepared in three stages as given below :
1. Net profit before taxation and extra ordinary items.
2. Cash flows from operating, investing and financing activities.
3. Cash flow statement
These are discussed one by one
1. Net profit before taxation and extraordinary items. This will not be equal to the net profit as
reported in the profit and loss account. It is so because of taxation and certain non operating items
(e.g., loss or profit on sale of fixed assets, dividend received or paid, amount transferred to general,
provision for taxation, fictitious assets written of f etc.) charged to the profit and loss account . Tax
paid and non-operating items are adjusted to the figure of profit or loss in order to get the net profit
before taxation and extraordinary items.
2. Cash flows from operating, investing and financing activities. Net profit before taxation and
extraordinary items is further adjusted with reference to depreciation in order to get the figure of
operating profit before working capital changes. This figure is further adjusted for changes in
current assets (except cash)/bank balance), current liabilities and tax paid deducted to get the
amount of net cash provided or used by operating activities. All the increases in current assets
except cash and decreases in current liabilities decrease cash. It is so because increase in debtors
takes place as current sales are greater than cash collections; inventories increase when the current
cost of goods purchased is more than the current cost of goods sold leading to reduction in cash.
Increase in prepaid expenses reduces cash from operations because more cash is paid than is
required for their current services. Likewise, decrease in current liabilities reduces cash from
operations because decrease in current liabilities takes place when they are paid in cash. Similarly
all decreases in current assets except cash and increases in current liabilities increase cash from
operations. Creditors would increase because current purchases are more than the cash paid to them
during the current period. Decrease in prepaid expenses indicates that less payment has been made
for services than are currently used, i.e., some cash has been saved causing an increase in cash from
operations.
Changes in fixed assets and fixed liabilities have not been adjusted as these are shown
separately in the cash flow statement. It is so because current assets (i.e., debtors as a result of credit

11

sales, inventories as a result of purchases and sales and prepaid expenses caused by operating
expenses) and current liabilities (i.e., creditors because of credit purchases and outstanding expenses
caused by non-payment of some of the expenses of the current period) are directly related to
operations.
Reporting Cash Flows from Operating Activities.
An enterprise should report cash flows from operating activities using either:
(a) the direct method, whereby major classes of gross cash receipts and gross cash payments
are disclosed; or
(b) the indirect method, whereby net profit or loss is adjusted for the effects of transactions of
a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments, and items of income or expense associated with investing or financing cash
flows.

The direct method provides information which may be useful in estimating future cash
flows and which is not available under the indirect method and is, therefore, considered more
appropriate than the indirect method. Under the direct method, information about major classes
of gross cash receipts and gross cash payments may be obtained either:
(a) from the accounting records of the enterprise; or
(b) by adjusting sales, cost of sales (interest and similar income and interest expense and
similar charges for a financial enterprise) and other items in the statement of profit and
loss for:
i)

changes during the period in inventories and operating receivables and payables;

ii) other non-cash items; and

iii) other items for which the cash effects are investing or financing cash flows
Under the indirect method, the net cash flow from operating activities is determined
by adjusting net profit or loss for the effects of:
(a) changes during the period in inventories and operating receivables and payables;
(b) non-cash items such as depreciation, provisions, deferred taxes, and unrealized foreign
exchange gains and losses; and
(c) all other items for which the cash effects are investing or financing cash flows.

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Alternatively, the net cash flow from operating activities may be presented under the indirect
method by showing the operating revenues and expenses excluding non-cash items disclosed in
the statement of profit and loss and the changes during the period in inventories and operating
receivables and payables.
Special items
1 Foreign Currency Cash Flows
Cash flows arising from transactions in a foreign currency should be recorded in an enterprises
reporting currency by applying to the foreign currency amount the exchange rate between the reporting
currency and the foreign currency at the date of the cash flow. A rate that approximates the actual
rate may be used if the result is substantially the same as would arise if the rates at the dates of the
cash flows were used. The effect of changes in exchange rates on cash and cash equivalents held in a
foreign currency should be reported as a separate part of the reconciliation of the changes in cash and
cash equivalents during the period.
Cash flows denominated in foreign currency are reported in a manner
consistent with Accounting Standard (AS) 11, Accounting for the Effects of
Changes in Foreign Exchange Rates4. This permits the use of an exchange rate that approximates
the actual rate. For example, a weighted average exchange rate for a period may be used for
recording foreign currency transactions.
Unrealized gains and losses arising from changes in foreign exchange rates are not cash
flows. However, the effect of exchange rate changes on cash and cash equivalents held or due in
a foreign currency is reported in the cash flow statement in order to reconcile cash and cash
equivalents at the beginning and the end of the period. This amount is presented separately from
cash flows from operating, investing and financing activities and includes the differences, if
any, had those cash flows been reported at the end-of-period exchange rates
2 Extraordinary Items
The cash flows associated with extraordinary items should be classified as arising from operating,
investing or financing activities as appropriate and separately disclosed.
The cash flows associated with extraordinary items are disclosed separately as arising from
operating, investing or financing activities in the cash flow statement, to enable users to understand
their nature and effect on the present and future cash flows of the enterprise. These disclosures are in
addition to the separate disclosures of the nature and amount of extraordinary items required by
Accounting Standard (AS) 5, Net Profit or Loss for the Period, Prior Period Items and Changes in
Accounting Policies
3

Interest and Dividends

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Cash flows from interest and dividends received and paid should each be disclosed
separately. Cash flows arising from interest paid and interest and dividends received in the case
of a financial enterprise should be classified as cash flows arising from operating activities. In the
case of other enterprises, cash flows arising from interest paid should be classified as cash flows
from financing activities while interest and dividends received should be classified as cash flows
from investing activities. Dividends paid should be classified as cash flows from financing activities.
The total amount of interest paid during the period is disclosed in the cash flow statement
whether it has been recognized as an expense in the statement of profit and loss or capitalized in
accordance with Accounting Standard (AS) 10, Accounting for Fixed Assets.
Interest paid and interest and dividends received are usually classified as operating cash
flows for a financial enterprise. However, there is no consensus on the classification of
these cash flows for other enterprises. Some argue that interest paid and interest and
dividends received may be classified as operating cash flows because they enter into the
determination of net profit or loss. However, it is more appropriate that interest paid and
interest and dividends received are classified as financing cash flows and investing cash flows
respectively, because they are cost of obtaining financial resources or returns on investments.
Some argue that dividends paid may be classified as a component of cash flows from operating
activities in order to assist users to determine the ability of an enterprise to pay dividends out of
operating cash flows. However, it is considered more appropriate that dividends paid should be
classified as cash flows from financing activities because they are cost of obtaining financial
resources.
4

Taxes on Income

Cash flows arising from taxes on income should be separately disclosed and should be
classified as cash flows from operating activities unless they can be specifically identified with
financing and investing activities.
Taxes on income arise on transactions that give rise to cash flows that are classified as operating,
investing or financing activities in a cash flow statement. While tax expense may be readily
identifiable with investing or financing activities, the related tax cash flows are often impracticable
to identify and may arise in a different period from the cash flows of the underlying
transactions. Therefore, taxes paid are usually classified as cash flows from operating activities.
However, when it is practicable to identify the tax cash flow with an individual transaction that
gives rise to cash flows that are classified as investing or financing activities, the tax cash flow is
classified as an investing or financing activity as appropriate. When tax cash flow are allocated
over more than one class of activity, the total amount of taxes paid is disclosed
5. Investments in Subsidiaries, Associates and Joint Ventures

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When accounting for an investment in an associate or a subsidiary or a joint venture, an

investor restricts its reporting in the cash flow statement to the cash flows between itself and the
investee/joint venture, for example, cash flows relating to dividends and advances.
6 Acquisitions and Disposals of Subsidiaries and Other Business Units
The aggregate cash flows arising from acquisitions and from disposals of subsidiaries or
other business units should be presented separately and classified as investing activities.
An enterprise should disclose, in aggregate, in respect of both acquisition and disposal of
subsidiaries or other business units during the period each of the following:
(a) the total purchase or disposal consideration; and
(b) the portion of the purchase or disposal consideration discharged by means of cash and cash
equivalents.
The separate presentation of the cash flow effects of acquisitions and disposals of subsidiaries
and other business units as single line items helps to distinguish those cash flows from other cash
flows. The cash flow effects of disposals are not deducted from those of acquisitions.
7 Non-cash Transactions
Investing and financing transactions that do not require the use of cash or cash equivalents should
be excluded from a cash flow statement. Such transactions should be disclosed elsewhere in the
financial statements in a way that provides all the relevant information about these investing and
financing activities
Many investing and financing activities do not have a direct impact on current cash flows although
they do affect the capital and asset structure of an enterprise. The exclusion of non-cash
transactions from the cash flow statement is consistent with the objective of a cash flow statement
as these items do not involve cash flows in the current period. Examples of non-cash transactions
are:
(a) the acquisition of assets by assuming directly related liabilities;
(b) the acquisition of an enterprise by means of issue of shares; and
(c) the conversion of debt to equity.
Components of Cash and Cash Equivalents
An enterprise should disclose the components of cash and cash equivalents and should
present a reconciliation of the amounts in its cash flow statement with the equivalent items
reported in the balance sheet.

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In view of the variety of cash management practices, an enterprise discloses the policy
which it adopts in determining the composition of cash and cash equivalents.
The effect of any change in the policy for determining components of cash and cash
equivalents is reported in accordance with Accounting Standard (AS) 5, Net Profit or Loss for
the Period, Prior Period Items and Changes in Accounting Policies.

Other Disclosures
An enterprise should disclose, together with a commentary by management, the amount of
significant cash and cash equivalent balances held by the enterprise that are not available for use by
it.
There are various circumstances in which cash and cash equivalent balances held by an
enterprise are not available for use by it. Examples include cash and cash equivalent balances held
by a branch of the enterprise that operates in a country where exchange controls or other legal
restrictions apply as a result of which the balances are not available for use by the enterprise.
Additional information may be relevant to users in understanding the financial position
and liquidity of an enterprise. Disclosure of this information, together with a commentary
by management, is encouraged and may include:
(a) the amount of undrawn borrowing facilities that may be available for future operating
activities and to settle capital commitments, indicating any restrictions on the use of these
facilities; and
(b) the aggregate amount of cash flows that represent increases in operating capacity
separately from those cash flows that are required to maintain operating capacity.
The separate disclosure of cash flows that represent increases in operating capacity and
cash flows that are required to maintain operating capacity is useful in enabling the user to
determine whether the enterprise is investing adequately in the maintenance of its operating
capacity. An enterprise that does not invest adequately in the maintenance of its operating capacity
may be prejudicing future profitability for the sake of current liquidity and distributions to
owners.

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CHAPTER 3
INDUSTRY PROFILE
&
COMPANY PROFILE

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BANKING INDUSTRY IN INDIA:

Banking in India in the modern sense originated in the last decades of the 18th century. Among
the first banks were the Bank of Hindustan, which was established in 1770 and liquidated in 182932; and the General Bank of India, established in 1786 but failed in 1791.
The largest bank, and the oldest still in existence, is the State Bank of India (S.B.I). It originated as
the Bank of Calcutta in June 1806. In 1809, it was renamed as the Bank of Bengal. This was one of
the three banks funded by a presidency government, the other two were the Bank of Bombay and
the Bank of Madras. The three banks were merged in 1921 to form the Imperial Bank of India, which
upon India's independence, became the State Bank of India in 1955. For many years the
presidency banks had acted as quasi-central banks, as did their successors, until the Reserve
Bank of India was established in 1935, under the Reserve Bank of India Act, 1934
In 1960, the State Banks of India was given control of eight state-associated banks under the
State Bank of India (Subsidiary Banks) Act, 1959. These are now called its associate banks. In 1969
the Indian government nationalised 14 major private banks. In 1980, 6 more private banks were
nationalised. These nationalised banks are the majority of lenders in the Indian economy. They
dominate the banking sector because of their large size and widespread networks.
The Indian banking sector is broadly classified into scheduled banks and non-scheduled banks. The
scheduled banks are those which are included under the 2nd Schedule of the Reserve Bank of
India Act, 1934. The scheduled banks are further classified into: nationalised banks; State Bank of

18

India and its associates; Regional Rural Banks (RRBs); foreign banks; and other Indian private
sector banks.[6] The term commercial banks refers to both scheduled and non-scheduled
commercial banks which are regulated under the Banking Regulation Act, 1949.
Generally banking in India is fairly mature in terms of supply, product range and reach-even
though reach in rural India and to the poor still remains a challenge. The government has
developed initiatives to address this through the State Bank of India expanding its branch network
and through the National Bank for Agriculture and Rural Development with facilities likemicrofinance.

Adoption of banking technology

The IT revolution has had a great impact on the Indian banking system. The use of computers has
led to the introduction of online banking in India. The use of computers in the banking sector in
India has increased many fold after the economic liberalisation of 1991 as the country's banking
sector has been exposed to the world's market. Indian banks were finding it difficult to compete
with the international banks in terms of customer service, without the use of information
technology.
The RBI set up a number of committees to define and co-ordinate banking technology. These
have included:
In 1984 was formed the Committee on Mechanisation in the Banking Industry (1984)[27] whose
chairman was Dr. C Rangarajan, Deputy Governor, Reserve Bank of India. The major
recommendations of this committee were introducing MICR technology in all the banks in the
metropolises in India.[28] This provided for the use of standardized cheque forms and encoders.
In 1988, the RBI set up the Committee on Computerisation in Banks (1988)[29] headed by Dr. C
Rangarajan. It emphasised that settlement operation must be computerised in the clearing
houses of RBI in Bhubaneshwar, Guwahati, Jaipur, Patna and Thiruvananthapuram. It further stated
that there should be National Clearing of intercity chequesat Kolkata, Mumbai, Delhi, Chennai and MICR should be made operational. It also
focused on computerisation of branches and increasing connectivity among branches through
computers. It also suggested modalities for implementing on-line banking. The committee
submitted its reports in 1989 and computerisation began from 1993 with the settlement
between IBA and bank employees' associations.

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In 1994, the Committee on Technology Issues relating to Payment systems, Cheque

Clearing and Securities Settlement in the Banking Industry (1994)[31] was set up under Chairman
W S Saraf. It emphasised Electronic Funds Transfer (EFT) system, with the BANKNET
communications network as its carrier. It also said that MICR clearing should be set up in all
branches of all those banks with more than 100 branches.
In 1995, the Committee for proposing Legislation on Electronic Funds Transfer and other
Electronic Payments (1995) again emphasised EFT system.

Automated teller machine growth

The total number of automated teller machines (ATMs) installed in India by various banks as of end
June 2012 was 99,218. The new private sector banks in India have the most ATMs, followed by
off-site ATMs belonging to SBI and its subsidiaries and then by nationalised banks and foreign
banks, while on-site is highest for the nationalised banks of India.

Branches and ATMs of Scheduled Commercial Banks as of end December, 2014

Bank type

Nationalised banks

Number of

On-site

Off-site

Total

branches

ATMs

ATMs

ATMs

33,627

38,606

22,265

60,871

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Branches and ATMs of Scheduled Commercial Banks as of end December, 2014

Bank type

Number of

On-site

Off-site

Total

branches

ATMs

ATMs

ATMs

State Bank of India

Old private sector

banks

New private sector

banks

Foreign banks

TOTAL

53,726

13,661

28,926

22,827

51,753

4,511

4,761

4,624

9,385

1,685

12,546

26,839

39,385

242

295

854

1,149

85,134

77,409

1,62,543

Cheque truncation initiative

In 2008 the Reserve Bank of India introduced a system to allow cheque truncation in India,
the cheque truncation system as it was known was first rolled out in the National Capital Region and
then rolled out nationally.

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Expansion of banking infrastructure

Physical as well as virtual expansion of banking through mobile banking, internet banking, tele
banking, bio-metric and mobile ATMs is taking place since last decade and has gained
momentum in last few years.

PROFILE OF UNION BANK OF INDIA

THE VISION STATEMENT

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THE HISTORY
The dawn of twentieth century witnesses the birth of a banking enterprise par excellenceUNION BANK OF INDIA- that was flagged off by none other than the Father of the Nation,
Mahatma Gandhi.
Since that the golden moment, Union Bank of India has this far unflinchingly traveled the arduous
road to successful banking........ A journey that spans 88 years.
We at Union Bank of India, reiterate the objectivity of our inception to the profound thoughts of the
great Mahatma... "We should have the ability to carry on a big bank, to manage efficiently crores of
rupees in the course of our national activities. Though we have not many banks among us, it does
not follow that we are not capable of efficiently managing crores and tens of crores of rupees."

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Union Bank of India is firmly committed to consolidating and maintaining its identity as a leading,
innovative commercial Bank, with a proactive approach to the changing needs of the society. This
has resulted in a wide gamut of products and services, made available to its valuable clientele in
catering to the smallest of their needs.
Today, with its efficient, value-added services, sustained growth, consistent profitability and
development of new technologies, Union Bank has ensured complete customer delight, living up to
its image of, GOOD PEOPLE TO BANK WITH. Anticipative banking- the ability to gauge the
customer's needs well ahead of real-time - forms the vital ingredient in value-based services to
effectively reduce the gap between expectations and deliverables. The key to the success of any
organization lies with its people. No wonder, Union Bank's unique family of about 26,000
qualified / skilled employees is and ever will be dedicated and delighted to serve the discerning
customer with professionalism and wholeheartedness.
Union Bank is a Public Sector Unit with 55.43% Share Capital held by the Government of India.
The Bank came out with its Initial Public Offer (IPO) in August 20, 2002 and Follow on Public
Offer in February 2006. Presently 44.57 % of Share Capital is presently held by Institutions,
Individuals and Others. Over the years, the Bank has earned the reputation of being a techno-savvy
and is a front runner among public sector banks in modern-day banking trends. It is one of the
pioneer public sector banks, which launched Core Banking Solution in 2002. Under this solution
umbrella, All Branches of the Bank have been 1135 networked ATMs, with online telebanking
facility made available to all its Core Banking Customers - individual as well as corporate. In
addition to this, the versatile Internet Banking provides extensive information pertaining to accounts
and facets of banking. Regular banking services apart, the customer can also avail of a variety of
other value-added services like Cash Management Service, Insurance, Mutual Funds and Demat.
The Bank will ever strive in its endeavour to provide services to its customer and enhance its
businesses thereby fulfilling its vision of becoming THE BANK OF FIRST CHOICE IN OUR
CHOSEN AREA BY BUILDING BENEFICIAL AND LASTING RELATIONSHIP WITH
CUSTOMERS THROUGH A PROCESS OF CONTINUOUS IMPROVEMENT.

CORPORATE MISSION
A logical extension of the Vision Statement is the Mission of the Bank, which is to gain market
recognition in the chosen areas.
To build sizeable markets share in each of the chosen areas of business through effective strategies
in terms of pricing, product packaging and promoting the product in the market.
To facilitate a process of restructuring of branches to support a greater efficiency in the retail
banking field.

24

To sustain the mission objective through harnessing technology driven banking and delivery
channels.
To promote confidence and commitment among the staff members, to address the expectations of
the customers efficiently and handle technology banking with ease.
ORGANIZATION STRUCTURE
has a lean three-tier structure. The delegated powers have been enhanced. The decentralized power
structure has accelerated decision making process and thereby Bank quickly responds to changing
needs of the customers and has also been able to adjust with the changing environment. Bank has
nine General Manager Offices at Ahmedabad, Pune, Lucknow, Delhi, Bangalore, Bhopal, Mumbai,
Calcutta and Chennai which function as an extended arm of corporate office. It also has two Zonal
Offices at Bhopal and Pune. Tier 3 comprises of 54 Regional Offices at various geographical center
of the country.
Business Operations
Union Bank has huge and varied customer base approximating to 24 millions. Bank is targeting
customers from all demographic and economic profiles and introducing products and services to
meet their needs. The Bank operates in all the areas including retail lending, personal banking,
corporate banking, international banking and investments & treasury. Banks lending also caters to
the rural and semi urban centers, financing Agriculture and allied activities, rural artisans, micro &
medium enterprises in these areas. Bank has opened 198 Village Knowledge Centres to provide
information to the local community on better agriculture practices, commodities, marketing
facilities and financial education. Bank also offers third party products like life and general
insurance, mutual funds, on-line trading, wealth management services through tie- up with other
FIs. Bank places customer at the centre of all its operations and has transformed the process, people
and organizational structure. Bank has initiated a large scale transformation process named Nav
Nirman to address two critical aspects of growth-instilling the drive of sales & marketing across
bank staff and reconfiguration of banks business model. The transformation process focuses on four
key initiatives
a) Retail Asset ( marketing & processing)
b) SME (marketing & processing)
c) Branch sales and services( improving the customer experience in the branch)
d) Centralization of key processes
Bank has brought all its branches under Core banking solutions .Union Bank is the first large bank
to achieve 100% CBS roll out. Bank has taken lead to establish alternate delivery channels in the
form of ATMs, internet banking, phone banking and Mobile Banking. Bank has introduced many

25

technology based services like RTGS, online NEFT free of cost, on line application for products and
services and online redressel of grievances.
Diversification
Union Bank in partnership with Bank of India and Dai-Ichi of Japan has formed a subsidiary for
distribution of Life insurance products, which has started selling the products.
Bank has signed an agreement with Belgian KBC group for setting up a joint venture AMC in India.
Union Bank has signed MoU with NSIC for training and setting up Incubation cum Training centers
to promote first generation entrepreneurs in MSME segment.
Bank has entered into MoU with NCMSL for financing against warehouse receipts for agri.
commodities kept at NCMSL warehouses.
Bank has announced opening 100 specialised Business Banking branches across the country to focus
exclusively on MSME sector with turn around time of 2 weeks for sanction of proposals.
Bank has launched mobile banking facility Umobile which facilitates limited transactions and
other services through mobile phones.
Growth & Performance
Total business of the Bank at the end of Dec08 stood at Rs.2,22,625 crore registering a growth of
28.33 % over Dec07.The banks total deposits as on 31st Dec08 reached a level of Rs.1,29,647
crore from Rs.99227 crore as on Dec07 ,an increase of 30.66%. Gross advances of the Bank
reached a level of Rs.92,978 crore as on 31st Dec08,registering a growth of 25.22% over
Dec07.The Capital Adequacy Ratio of the Bank (BASEL I) is at 12.32% & BASEL II at 13.41
% as on Dec08.The net interest margin of the Bank increased to 2.97% for the nine months period
ended Dec08.Return on average assets improved from 1.31% in Dec07 to 1.92% in
Dec08(QoQ) indicating more efficient use of Funds. The asset quality recorded a significant
improvement with steep reduction in Net NPAs from 0.35% in Dec07 to 0.14% in Dec08 and the
Gross NPAs from 2.10% to 1.68%.

OUR TRAINING SYSTEM

Seldom has there been a time in which it has been necessary for Organizations to attune Attitudes,
upgrade Skills and kindle sparks of Knowledge in their human force to the extent and with the
rapidity required today.
Those who dominate the market in times to come will be those who are prepared to seize
opportunities as they come.
At Union Bank, the training facilities offer an admirable approach to these opportunities.
Ask and it shall be Given.
TO BE THE BEST COME TO BEST

26

Union bank has one of the best training systems in India. The training experience here goes back to
over four decades. Presently the training structure consists of the Staff College at Bangalore, and
seven centers in various parts of the country. The training is designed, delivered and assessed, based
on systems suggested and put in place by our overseas consultants M/s. Vinstar Limited (AGL
Group) of New Zealand. These systems have been tested and refined by practical application.
The training system of Union Bank has been awarded the prestigious Golden Peacock National
Training Award instituted by the Institute of Directors, New Delhi for the best training system in the
Country.
In our pursuit of achieving higher standards we have further upgraded our systems and sized up to
'international norms'. After a rigorous audit, in February 2001, the College is awarded ISO 9001
certification (for Design and Development of Customised Training Programs) by Det Norske
Veritas, of the Netherlands. We are the only Bank to obtain ISO certification for the training system.
FROM PHILOSOPHY TO REALITY
We have devised an outcome-oriented training process. Each and every module is designed so that
learning takes place through interaction. It is also ensured that this learning is translated into action
at the work place. Our training programs actually deliver value to the Organization. Post course
surveys
conducted
by
us
have
confirmed
this.
Yes, we have translated yet another clich into reality. We invite Organizations to give the enriching
experience to the employees, to create learning and growing organizations

RISK MANAGEMENT
1 Risk is inherent part of Banks business. Effective Risk Management is critical to any Bank for
achieving financial soundness. In view of this, aligning Risk Management to Banks organizational
structure and business strategy has become integral in banking business. Over a period of year,
Union Bank of India (UBI) has taken various initiatives for strengthening risk management
practices. Bank has an integrated approach for management of risk and in tune with this, formulated
policy documents taking into account the business requirements / best international practices or as
per the guidelines of the national supervisor. These policies address the different risk classes viz.,
Credit Risk, Market Risk and Operational Risk.
2 The issues related to Credit Risk are addressed in the Policies stated below;
1 Loan Policy.
2 Credit Monitoring Policy.
3 Real Estate Policy.

27

4 Credit Risk Management Policy.

5 Collateral Risk Management Policy.
6 Recovery Policy.
7 Treasury Policy.
3 The Policies and procedures for Market Risks are articulated in the ALM Policy and Treasury
Policy.
4 The Operational Risk Management involves framework for management of operational risks faced
by the Bank. The issues related to this risk is addressed by;
1 Operational Risk Management Policy.
2 Business Continuity Policy.
3 Outsourcing Policy.
4 Disclosure Policy.
5 Besides, the above Board mandated Policies, Bank has detailed Internal Control Principles
communicated to the business lines for ensuring adherence to various norms like Anti-Money
Laundering, Information Security, Customer complaints, Reconciliation of accounts, Book-keeping
etc.

OVER SIGHT MECHANISM

1 Our Board of Directors has the overall responsibility of ensuring that adequate structures, policies
and procedures are in place for risk management and that they are properly implemented. Board
approves our risk management policies and also sets limits by assessing our risk appetite, skills
available for managing risk and our risk bearing capacity.
2 Board has delegated this responsibility to a sub-committee: the Supervisory Committee of
Directors on Risk Management & Asset Liability Management. This is the Apex body / Committee
is responsible for supervising the risk management activities of the Bank.
3 Further, Bank has the following separate committees of top executives and dedicated Risk
Management Department:
1 Credit Risk Management Committee (CRMC): This Committee deals with issues relating to
credit policies and procedure and manages the credit risk on a Bank-wide basis.
2 Asset Liability Management Committee (ALCO): This Committee is the decision-making unit
responsible for balance sheet planning and management from the angle of risk-return perspective
including management of market risk.
3 Operational Risk Management Committee (ORMC): This Committee is responsible for
overseeing Banks operational risk management policy and process.

28

4 Risk Management Department of the Bank provides support functions to the risk management
committees mentioned above through analysis of risks and reporting of risk positions and making
recommendations as to the level and degree of risks to be assumed. The department has the
responsibility of identifying, measuring and monitoring the various risk faced the bank, assist in
developing the policies and verifying the models that are used for risk measurement from time to
time.

CREDIT RISK
1 Credit Risk Management Policy of the Bank dictates the Credit Risk Strategy.
2 These Polices spell out the target markets, risk acceptance / avoidance levels, risk tolerance limits,
preferred levels of diversification and concentration, credit risk measurement, monitoring and
controlling mechanisms.
3 Standardized Credit Approval Process with well-established methods of appraisal and rating is the
pivot of the credit management of the bank.
4 Bank has comprehensive credit rating / scoring models being applied in the spheres of retail and
non-retail portfolios of the bank.
5 The Credit rating system of the Bank has eight borrower grades for standard accounts and three
grades for defaulted borrowers.
6 Proactive credit risk management practices in the form of studies of rating-wise distribution,
rating migration, probability of defaults of borrowers, Portfolio Analysis of retail lending assets,
periodic industry review, Review of Country, Currency, Counter-party and Group exposures are
only some of the prudent measures, the bank is engaged in mitigating risk exposures.
7 The current focus is on augmenting the banks abilities to quantify risk in a consistent, reliable and
valid fashion, which will ensure advanced level of sophistication in the Credit Risk Measurement
and Management in the years ahead.
MARKET RISK
1 Bank has well-established framework for Market Risk management with the Asset Liability
Management Policy and the Treasury Policy forming the fulcrum for procedures, processes and
structure. It has a major objective of protecting the banks net interest income in the short run and
market value of the equity in the long run for enhancing shareholders wealth. The important aspect

29

of the Market Risk includes liquidity management, interest rate risk management and the pricing of
assets and liabilities. Further, Bank views the Asset Liability Management exercise as the total
balance sheet management with regard to its size, quality and risk.
2 The ALCO is primarily entrusted with the task of market risk management. The Committee
decides on product pricing, mix of assets and liabilities, stipulates liquidity and interest rate risk
limits, monitors them, articulates Banks interest rate view and determines the business strategy of
the Bank.
3 Bank has put in place a structured ALM system with 100% coverage of data on both assets and
liabilities. To measure liquidity and interest rate risk, Bank prepares various reports such as
Structural Liquidity, Interest Rate Sensitivity, Fortnightly Dynamic Statement etc. Besides RBI
reporting many meaningful analytical reports such as Duration Gap analysis, Contingency Funding
Plan, Contractual Maturity report etc. are generated at periodic intervals for ALCO, which meets
regularly. Statistical and mathematical models are used to analyze the core and volatile components
of assets and liabilities.
4 The objective of liquidity management is to ensure adequate liquidity without affecting the
profitability. In tune with this, Bank ensures adequate liquidity at all times through systematic funds
planning, maintenance of liquid investments and focusing on more stable funding sources.
5 The Mid Office group positioned in treasury with independent reporting structure on risk aspects
ensure compliance in terms of exposure analysis, limits fixed and calculation of risk sensitive
parameters like VaR, PV01, Duration, Defeasance Period etc. and their analysis.

OPERATIONAL RISK
1 Operational Risk, which is intrinsic to the bank in all its material products, activities, processes
and systems, is emerging as an important component of the enterprise-wide risk management
system. Recognizing the importance of Operational Risk Management, Bank has adopted a
Comprehensive Operational Risk Management Policy. This would entail the bank to move towards
enhanced level of sophistication in the years ahead and to capture qualitative and quantitative
measures of Operational Risk indicators in management of operational risk.
2 Bank has comprehensive system of internal controls, systems and procedures to monitor and
mitigate risk. Bank has also institutionalized new product approval process to identify the risk
inherent in the new product and activities.
3 The Internal audit function of the Bank and the Risk Based Internal Audit, compliments the banks
ability to control and mitigate risk.

30

Banks Preparedness to meet Basel II norms

1.Bank carried out a comprehensive Self-Assessment exercise spanning all the risk areas and
evolved a road map to move towards implementation of Basel II as per RBIs directions. The
program in implementation of Risk Management, Organizational Structure, Risk measures, risk data
compilation and reporting etc. is as per this laid down road map.
2. The Polices framed and procedures / practices adopted are benchmarked to the best in the
industry on a continuous basis and the Bank has a clear intent to reach an advanced level of
sophistication
in
management
of
risks
in
the
coming
year.
3 The ever-improving risk management practices in the Bank will result in Bank emerging stronger,
which in turn would confer competitive advantage in the Market.

CHAPTER 4
RESEARCH METHODOLOGY

31

NEED OF THE STUDY:

A financial statement contains income statement showing sales, Revenues, tax, expenses etc. on the
other side; the balance sheet shows the liabilities and assets position during the year.
The study of financial performance is composed of the following:
1. Analysis of the liquidity and between current liabilities and assets.
2. Analysis of the liquidity and profitability of the current assets and current liabilities.
3. Analysis of the long term financial of the firm over a period of time.
4. Analysis of various components of working capital E.g.: Cash Marketable securities
receivable and inventories
The study takes into consideration the external analyst point of view and with the help of the past
and latest financial statements, financial position, will tried to be analyzed impartially.

32

OBJECTIVES OF THE STUDY

To analyze the risk management in Banks.
To analyze the risk management in Union Bank of India.
To analyze the Gross NPA, Net NPA and Capital Adequacy Ratio of Union Bank of India.

33

SCOPE OF STUDY:
The scope of the study is confined to detail analysis of cash flow statement in union bank
of india
1.
An enterprise should prepare a cash flow statement and should present it for each
period for which financial statements are presented.
2.
Users of an enterprises financial statements are interested in how the enterprise
generates and uses cash and cash equivalents.
This is the case regardless of the nature of the enterprises activities and irrespective of
whether cash can be viewed as the product of the enterprise, as may be the case with a
financial enterprise.
Enterprises need cash for essentially the same reasons, however different their principal
revenue-producing activities might be.
They need cash to conduct their operations, to pay their obligations, and to provide returns
to their investors.

LIMITATIONS OF THE STUDY

34

The research work is mainly based on secondary data that is, it is based on audited accounts and its
audited accounts are ambiguous then the result will be misleading.
Less importance has been given to primary data which is actually the original data and more
reliable.
The research work is completed in five months, which is not enough for any type of proper and
reliable research work.
.

RESEARCH DESIGN:
Analysis of past data a helps to understand the effectiveness of Risk Management Strategies of
Bank. This is a conclusive research.

35

DATA COLLECTION
Basically there are methods of data collection they Secondary data To achieve the objective,
information is Primary data are: collected through secondary data. Secondary data one those
which have been already been collected. it may be published or unpublished data. Some of the data
are collected through visit and personal observation. But mainly data are collected form financial
statement (annual report) of Union Bank of India. all the information which are collected, through
data are analyzed interpreted and tabulated to full fill be objective. In this study I have used
Secondary Data.

TOOLS OF ANALYSIS
It is essential to use a systematic research methodology for the assessment of a project because
without the use of a research methodology analysis of any company or organization will not be
possible. In the present analysis mostly secondary data have been used. It is worth a while to
mention that I have used the following types of published data :
Balance Sheet Profit & Loss A/c
Prospectus of the Company
General Body meeting reports
Schedules

CHAPTER 5
DATA ANALYSIS & INTERPRETATION

36

NALYSIS AND INTERPRETATION:

For the purpose of Analysis and interpretation, statement of Current Assets and Current Liabilities, mast
bles and graphs were used for the effective presentation.

5.1 TABLE SHOWING DIVIDEND PAYOUT RATIO

NET PROFIT
Particulars
Dividend
Payout Ratio
Net Profit

Mar '06
Rs. In crores
29.85

Mar '07

Mar '08

Mar '09

Mar '10

24.20

17.04

17.11

15.66

37

Interpretation:The dividend payout ratio net profit is constantly decreasing year by year. In the year 2006 it was
29.85 crores while in the year 2009 it has decreased to 24.20 crores, but it has gradually decreased
to 17.04 crores in 2007 and stays constant in 2009 with 17.11 crores but again it is decreased to
15.66 in 2010. This shows that the dividend payout ratio net profit was decreasing during those
years.

5.1.1GRAPH SHOWING DIVIDEND PAYOUT RATIO NET PROFIT

30

25

20

15

10

0
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

38

Inference:
From the above graph it clear shows that the net profit of dividend payout ratio is decreasing
gradually.

5.2 TABLE SHOWING DIVIDEND PAYOUT RATIO CASH PROFIT

Particulars
Dividend
Payout
Ratio Cash
Profit

Mar '06
26.47

Mar '07
21.95

Mar '08
15.87

Mar '09
15.85

Mar '10
14.54

INTERPRETATION :
The cash profit dividend payout ratio is also decreasing year by year . In the year 2006 it was 26.47
crores and it has gradually decreased to 21.95 crores in 2007 and again gradually decreases as it was
decreased in the previous year , it has decreased to 15.87 crores in 2008 and stays constant with
15.85 crores in 2009 and again it has just decreased to 14.54 crores in 2010. This shows that the
cash profit dividend payout ratio has only decreased and never increased during these 5 years

39

5.2.1 GRAPH SHOWING THE CASH PROFIT OF DIVIDEND PAYOUT RATIO

30

25

20

15

10

0
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Inference:

From the above graph it clear shows that the cash profit of dividend payout ratio is decreasing
gradually for the following years.

40

5.3 TABLE SHOWING EARNING RETENTION RATIO

Particular
s
Earning
Retention
Ratio

Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

70.11

75.82

82.97

82.80

84.35

INTERPRETATION
The earning retention ratio was 70.11 crores during the year 2006 and has increased to 75.82 crores
in 2007 and again gradually increases in the year 2008 with 82.97 crores and stays constant in the
next year 82.80 and again it has just increased to 84.35 in 2010. This shows that earning retention
ratio has increased year by year. The increase in earning retention ratio is good for the bank

5.3.1 GRAPH SHOWING EARNING RETENTION RATIO

41

90

80

70

60

50

40

30

20

10

0
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Inference:

From the above graph it clear shows that the earning retention ratio is increasing gradually.

5.4 TABLE SHOWING CASH EARNING RETENTION RATIO

42
particular
s
Cash
Earning
Retention
Ratio

Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

73.49

78.06

84.13

84.07

85.47

INTERPRETATION :

The cash earning retention ratio is constantly increasing year by year . the cash earning retention
ratio was 73.49 crores in 2006 . in the year 2007 it is increased to 84.13 crores and again it is
increased in the next year as it is increased in the previous year to 84.13 crores in 2008 and
remains constant in the next year with 84.13 crores in 2009 and in the year 2010 it is just increased
to 85.47 crores this shows that the cash earning retention ratio is only increased and not
decreased during thoese 5 years

5.4.1 GRAPH SHOWING CASH EARNING RETENTION RATIO

43

86
84
82
80
78
76
74
72
70
68
66
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Inference:
From the above graph it clear shows that the cash earning retention ratio is increasing gradually.

5.5. TABLE SHOWING ADJUSTED CASH FLOW TIMES

Particular
s
AdjustedC
ash Flow

Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

97.44

91.38

69.74

74.82

76.06

44
Times

INTERPRETATION :
The adjusted cash flow times is constantly decreasing year by year . the adjusted cash flow times
was 97.44 crores in 2006 and in the year 2007 it is just decreased to 91.38 crores . in the year 2008
it is gradually decreased to 69.74 crores but only from 2009 it has started increasing , it is increased
to 74.82 crores in 2009 . in the year 2010 again it is just increased to 76.06 crores

5.5.1 GRAPH SHOWING ADJUSTED CASH FLOW TIMES

45

100
90
80
70
60
50
40
30
20
10
0
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Inference:
From the above graph it is inferred that the adjusted cash flow times were fluctuating during these
years

5.6 TABLE SHOWING EARNINGS PER SHARE

particular
s
Earnings
Per Share

Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

13.37

16.74

27.46

34.18

41.08

46

INTERPRETATION :
The earning per share is constantly increasing year by year. The earning per share was 13.37 crores
in 2006 and in the year 2007 it is just increased to 16.74 crores . in the year 2008 it is gradually
increased to 27.46 crores . in the year 2009 it is increased to 34.18 crores and again it is increased
in 2010 as it was increased in previous year , it is increase to 34.18 crores by 2010 . this shows
that the earning per share is only increasing and has never decreased during those 5 year

5.6.1 GRAPH SHOWING EARNINGS PER SHARE

47

45
40
35
30
25
20
15
10
5
0
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Inference:
From the above graph it clear shows that the earnings per share is increasing gradually.

5.7 TABLE SHOWING NET CASH FROM OPERATING ACTIVITIES

particulars
Net Cash
From
Operating
Activities

Mar '06
-1124.99

Mar '07
1956.28

Mar '08
1930.64

Mar '09
5599.13

Mar '10
-505.07

48

INTERPRETATION:
The netcash from operating activities was -1124.99 crores in the year 2006 and the bank was not in
good position during that year. Later in the year 2007 there was some improvement , like it is
increased to 1956.28 crores and there was no big changes in 2007 as it is just decreased to 1930.64
crores but it is gradually increased to 5599.13 in 2009 . in the year 2010 it is totally decreased to
-505.97 crores. This shows that the bank is facing problem in operating activities.

5.7.1 GRAPH SHOWING NET CASH FROM OPERATING ACTIVITIES

49

6000

5000

4000

3000

2000

1000

-1000

-2000
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

INFERENCE
From the above graph it is inferred that the net cash from operating activities of the bank is not good
and were fluctuating during these years.

5.8 TABLE SHOWING NET CASH FROM INVESTING ACTTIVIIES

particulars
Net Cash
(used
in)/from
Investing
Activities

Mar '06
-53.87

Mar '07
-101.33

Mar '08
-209.32

Mar '09
-309.76

Mar '10
-200.43

50

INTREPRETATION :

The net cash from investing activities was -53.87 crores in 2006 and It is just decreased to -101.33
crores in 2007 . In the year 2008 it is again decreased to -209.32 crores and again it is decreased in
the next year as it was decreased in previous year to -309.76 crores in 2009 . only in the year 2010 it
has increased to -200.43 crores and this shows that there were no improvement during these 5
years .

5.8.1 GRAPH SHOWING NET CASH FROM INVESTING ACTIVITIES

51

-50

-100

-150

-200

-250

-300

-350
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Inference:
From the above graph it clearly shows that the net cash from investing activities is decreasing
gradually.

5.9 TABLE SHOWING NET CASH FROM FINANCING ACTIVITIES

particular
s
Net Cash
(used
in)/from
Financing

Mar '06
997.41

Mar '07
180.98

Mar '08

Mar '09

Mar '10

-49.92

597.72

497.26

52
Activities

INTERPRETATION
The net cash from financing activities was 997.41 crores during the year 2006 and was gradually decreased to 180.98
crores in 2007 and again it has decreased to -49.92 crores in 2008 but only in 2009 it is increased to 597.72 crores
and again it has just decreased to 497.26 crores . during the 5 years there were ups and downs in the net cash from
financing activities but at last it has only decreased from 997.41 to 497.26

5.9.1 GRAPH SHOWING NET CASH FROM FINANCING ACTIVITIES

53

1000

800

600

400

200

-200
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

INFERENCE
From the above graph it is inferred that the net cash from financing activities is decreasing
gradually and were fluctuating during these years.

5.10 TABLE SHOWING NET CASH AND CASH EQUIVALENTS

54

particulars
Net
(decrease)/incr
ease In Cash
and Cash
Equivalents

Mar '06
-181.45

Mar '07
2035.93

Mar '08
1671.40

Mar '09
5887.09

Mar '10

-208.24

INTERPRETATION :
The net cash and cash equivalents were increased and decreased in the last 5 years . in the year 2006
it is -181.45 crores and it has increased to 2035.93 crores in 2007 and it is just decreased to
1671.40 crores but in the next year 2009 it has gradually increased to 5887.09 cores and finally it is
gradually decreased to -208.24 crores in the last year 2010. This shows that the bank was good in .
the middle years and there were no improvement during those 5 years

5.10.1 GRAPH SHOWING NET CASH AND CASH EQUIVALENTS

55

6000

5000

4000

3000

2000

1000

-1000
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

INFERENCE

From the above graph it is inferred that the net cash and cash equivalents increased and decreased
gradually and were fluctuating during these years.

5.11 TABLE SHOWING OPENING CASH AND CASH EQUIVALENTS

particular
s
Opening
Cash &
Cash
Equivalen
ts

Mar '06

6571.97

Mar '07

6390.51

Mar '08

8426.44

Mar '09

10097.84

Mar '10

15984.93

56

INTERPRETATION :
The opening cash and cash equivalents was 6571.97 crores in the year 2006 and it is just decreased
to 6390.51 crores in 2007 . in the year 2008 it is increased to 8426.44 crores and again it is
increased to 10097.84 crores but it is gradually increased to 15984.93 crores in the year 2010. This
shows that the opening cash and cash equivalents has only increased during those 5 years.

5.11.1 GRAPH SHOWING OPENING CASH AND CASH EQUIVALENTS

57

16000

14000

12000

10000

8000

6000

4000

2000

0
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Inference:

From the above graph it clear shows that the opening cash and cash equivalents is increasing
gradually

5.12 TABLE SHOWING CLOSING CASH AND CASH EQUIVALENTS

particular
s
Closing
Cash &
Cash
Equivalen
ts

Mar '06

6390.52

INTERPRETATION :

Mar '07

8426.44

Mar '08

10097.84

Mar '09

15984.93

Mar '10

15776.69

58

The closing cash and cash equivalents was 6390.52 crores in 2006. And it is increased to 8426.44
crores in 2007 and again in the year 2008 it is increased to 10097.84 crores. In the year 2009 it is
gradually increased to 15984.93 crores and it is just decreased to 15776.69 crores by the year 2010.
This shows that the closing cash and cash equivalents is only increased during these years.

5.12.1 GRAPH SHOWING CLOSING CASH AND CASH EQUIVALENTS

59

16000

14000

12000

10000

8000

6000

4000

2000

0
Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Inference:
From the above graph it clearly shows that the closing cash and cash equivalents is also increasing
gradually

CHAPTER 6
FINDINGS, SUGGESTIONS &
CONCLUSION

60

FINDINGS
1. The dividend payout ratio net profit is constantly decreasing year by year. In the year 2006 it was
29.85 crores while in the year 2009 it has decreased to 24.20 crores, but it has gradually decreased
to 17.04 crores in 2007 and was constant during the year 2009 with 17.11 crores but again it is
decreased to 15.66 in 2010. This shows that the dividend payout ratio net profit has only decreased
and it has never increased during those years.
2. The cash profit dividend payout ratio is also decreasing year by year . In the year 2006 it was
26.47 crores and it has gradually decreased to 21.95 crores in 2007 and again gradually decreases as
it was decreased in the previous year , it has decreased to 15.87 crores in 2008 and stays constant
with 15.85 crores in 2009 and again it has just decreased to 14.54 crores in 2010. This shows that
the cash profit dividend payout ratio has only decreased and never increased during

61

3. The earning retention ratio was 70.11 crores during the year 2006 and has increased to 75.82
crores in 2007 and again gradually increases in the year 2008 with 82.97 crores and stays constant in
the next year 82.80 and again it has just increased to 84.35 in 2010. This shows that earning
retention ratio has increased year by year. The increase in earning retention ratio is good for the
bank
4. The cash earning retention ratio is constantly increasing year by year . the cash earning retention
ratio was 73.49 crores in 2006 . in the year 2007 it is increased to 84.13 crores and again it is
increased in the next year as it is increased in the previous year to 84.13 crores in 2008 and
remains constant in the next year with 84.13 crores in 2009 and in the year 2010 it is just increased
to 85.47 crores this shows that the cash earning retention ratio is only increased and not
decreased during thoese 5 years
5. The adjusted cash flow times is constantly decreasing year by year . the adjusted cash flow times
was 97.44 crores in 2006 and in the year 2007 it is just decreased to 91.38 crores . in the year 2008
it is gradually decreased to 69.74 crores but only from 2009 it has started increasing , it is increased
to 74.82 crores in 2009 . in the year 2010 again it is just increased to 76.06 crores.
6. The earning per share is constantly increasing year by year. The earning per share was 13.37
crores in 2006 and in the year 2007 it is just increased to 16.74 crores . in the year 2008 it is
gradually increased to 27.46 crores . in the year 2009 it is increased to 34.18 crores and again it is
increased in 2010 as it was increased in previous year , it is increase to 34.18 crores by 2010 . this
shows that the earning per share is only increasing and has never decreased during those 5 years
7. The net cash from operating activities was -1124.99 crores in the year 2006 and the bank was not
in good position during that year. Later in the year 2007 there was some improvement , like it is
increased to 1956.28 crores and there was no big changes in 2007 as it is just decreased to 1930.64
crores but it is gradually increased to 5599.13 in 2009 . in the year 2010 it is totally decreased to
-505.97 crores. This shows that the bank is facing problem in operating activities.
8. The net cash from investing activities was -53.87 crores in 2006 and It is just decreased to
-101.33 crores in 2007. In the year 2008 it is again decreased to -209.32 crores and again it is
decreased in the next year as it was decreased in previous year to -309.76 crores in 2009. Only in
the year 2010 it has increased to -200.43 crores and this shows that there were no improvements
during these 5 years.

62

9.The net cash from financing activities was 997.41 crores during the year 2006 and was gradually
decreased to 180.98 crores in 2007 and again it has decreased to -49.92 crores in 2008 but only in
2009 it is increased to 597.72 crores and again it has just decreased to 497.26 crores . during the 5
years there were ups and downs in the net cash from financing activities but at last it has only
decreased from 997.41 to 497.26

10.The net cash and cash equivalents were increased and decreased in the last 5 years . in the year
2006 it is -181.45 crores and it has increased to 2035.93 crores in 2007 and it is just decreased to
1671.40 crores but in the next year 2009 it has gradually increased to 5887.09 cores and finally it is
gradually decreased to -208.24 crores in the last year 2010. This shows that the bank was good in .
the middle years and there were no improvement during those 5 years
11.The opening cash and cash equivalents was 6571.97 crores in the year 2006 and it is just
decreased to 6390.51 crores in 2007 . in the year 2008 it is increased to 8426.44 crores and again it
is increased to 10097.84 crores but it is gradually increased to 15984.93 crores in the year 2010.
This shows that the opening cash and cash equivalents has only increased during those 5 years.
12.The closing cash and cash equivalents was 6390.52 crores in 2006. And it is increased to
8426.44 crores in 2007 and again in the year 2008 it is increased to 10097.84 crores. In the year
2009 it is gradually increased to 15984.93 crores and it is just decreased to 15776.69 crores by the
year 2010. This shows that the closing cash and cash equivalents is only increased during these
years.

63

SUGGESTION
1. The dividend payout ratio should be maintained as the shareholders would prefer to invest
only if the dividend payout increases.
2. The EPS is increasing for the bank on yearly basis. So, the bank should maintain the EPS so
that the holders are retained by the bank.
3. The adjusted cash flow is decreasing for the past few years and this cash flow is considered as
operating or working capital of any bank. But the cash flow is neither stable nor increasing as it
is fluctuating the adjusted cash flow should be maintained and the cash flow should be
planned in such a way that the cash flow should increase on a yearly basis.
4. Net Cash is the cash that is reserved in the bank for any investing or financing activities. The
cash should be increasing in any business to maintain it sound and healthy bank. The Net cash
should increase on a yearly basis and the net cash is the life blood of any company or bank for
diversification or expansion of it respectively.
5. Opening cash and cash equivalent is the initial investment or opening balance of any business.
But in this case it is for bank, so as per that the opening cash is increasing for bank and this
should be maintained as this will have a drastic impact on the balance and the bank should
also keep up this performance to improve in positive direction.
6. Closing cash and cash equivalent is the closing balance or net balance available at the end of
the year. The closing cash was increasing substantially for all the years except for the year
2010 as the balance has pitched down this should be maintained and focused for better
closing balance at the end of each year. The closing balance should be looked for positive
increase as it decreased when compared to other years.

Risk Management strategies of Union Bank of India must be revised.

Bank must try to reduce its Net and Gross NPA.

Bank must try to improve its Capital Adequacy Ratio.
Bank must do proper investigation before lending.
Bank must do pre and post monitoring of Loans.
Credit worthiness must be checked before giving loans.
Bank must not try to take financial risk

CONCLUSIONS

64

The process of financial risk management is an ongoing one.Strategies need to be implemente

and refined as the market and requirements change. Refinements may reflect changin
expectations about market rates, changes to the business environment, or changing internation
political conditions, for example. In general, the process can be summarized as follows:
Identify and prioritize key financial risks.
Determine an appropriate level of risk tolerance.
Implement risk management strategy in accordance with policy.
Measure, report, monitor, and refine as needed. Risk management needs to be looked at as a
organizational approach, as management of risks independently cannot have the desired effec
over the long term. In this project I have analyzed the risk management process of Union Ban
of India. It was found that Net and Gross NPA of the bank is increasing which is not good for th
bank. Thus we can say that Bank must improve its risk management strategies

CHAPTER 7
BIBLIOGRAPHY &
ANNEXURE

65

BIBLIOGRAPHY

Books : Management Accounting-Principles and Practice.,

Eighth Edition, Kalyani Publishers, New Delhi.
Financial Management and Policy,
First Edition, Annual Publications, New Delhi.

By Sharma R.K & Gupta Shashi K

By Bhalla V.K

66

Management Accounting and Financial Control,

Thirteen Edition, Sultan Chand & Sons, New Delhi(2002).

By Maheshwari S.N

Research Methodology-Methods & Techniques,

Second Edition, Vishwa Prakashan Delhi (1990).

By Kothari C.R

Management of Working Capital,

Edition, New Century Publications, New Delhi(2003).

By Gupta Sunita.

Cost and Financial Analysis,

Revised Edition, Kalyani Publishers, New Delhi.

Management Accounting,
Edition, New Century Publications, New Delhi(2003).
Cost and Financial Analysis,
Himalaya Publishers, New Delh

Websites: www.unionbankofindia.com
www.scribd.com

By Jain.S.P. & Narang.K.L.

- By MN Arora
By Jawaharlal

First
Third
First
Third Edition,

67

ANNEXUES

68

PARTICULARS
Net Profit Before Tax
Net Cash From Operating Activities

STATEMENT
2006

AMOU
NT
0.00
-1124.99

Net Cash (used in)/from

Investing Activities

-53.87

Net Cash (used in)/from Financing Activities

997.41

Net (decrease)/increase In Cash and Cash

Equivalents

-181.45

Opening Cash & Cash Equivalents

6571.97

Closing Cash & Cash Equivalents

6390.52

CASH
FLOW
FOR THE YEAR

69

BALANCE SHEET AS ON 31st MARCH 2006

LIABILITIES

Total Share Capital

Equity Share Capital
Share Application
Money
Preference Share
Capital
Reserves
Revaluation Reserves
Net Worth
Deposits
Borrowings
Total Debt
Other Liabilities &
Provisions
Total Liabilities

AMOUNT
Rs

ASSETS

Cash & Balances with

RBI
Balance with Banks,
505.12
Money at Call
505.12

AMOUNT
Rs
4,387.27
2,003.24

0.00 Advances

53,379.96

0.00 Investments

25,917.65

3,587.36 Gross Block

1,382.03

465.68

Accumulated
Depreciation

4,558.16 Net Block

74,094.30

Capital Work In
Progress

3,974.40 Other Assets

587.17
794.86
15.56
2,627.50

78,068.70
6,499.18
89,126.04 Total Assets

89,126.04

70

PROFIT AND LOSS ACCOUNT FOR THE YEAR 2006

PARTICULARS

AMOUNT

Income
Interest Earned
Other Income
Total Income
Expenditure
Interest expended
Employee Cost
Selling and Admin Expenses
Depreciation
Miscellaneous Expenses
Preoperative Exp Capitalised
Operating Expenses
Provisions & Contingencies
Total Expenses
Net Profit for the Year
Extraordionary Items
Profit brought forward
Total
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)
Appropriations
Transfer to Statutory Reserves
Transfer to Other Reserves
Proposed Dividend/Transfer to Govt
Balance c/f to Balance Sheet
Total

5,863.71
625.10
6,488.81
3,489.42
866.91
414.23
86.13
956.93
0.00
1,558.15
766.05
5,813.62
675.18
0.00
40.99
716.17
0.00
176.79
24.80
13.37
35.00
81.02
514.04
-0.01
201.59
0.55
716.17

71

PARTICULARS
STATEMENT
YEAR 2007

Net Profit Before Tax

Net Cash From Operating Activities
Net Cash (used in)/from
Investing Activities
Net Cash (used in)/from Financing Activities

AMOU
NT
0.00
1956.28

-101.33
180.98

Net (decrease)/increase In Cash and Cash

Equivalents

2035.93

Opening Cash & Cash Equivalents

6390.51

Closing Cash & Cash Equivalents

8426.44

CASH
FOR

FLOW
THE

72

LIABILITIES
Total Share Capital
Equity Share Capital
Share Application
Money
Preference Share
Capital
Reserves
Revaluation
Reserves
Net Worth
Deposits
Borrowings
Total Debt
Other Liabilities &
Provisions
Total Liabilities

AMOUNT
Rs

ASSETS

Cash & Balances

with RBI
Balance with Banks,
505.12
Money at Call
505.12

AMOUNT
Rs
5,917.57
2,508.87

0.00 Advances

62,386.43

0.00 Investments

27,981.77

4,228.16 Gross Block

1,487.21

456.59

Accumulated
Depreciation

5,189.87 Net Block

Capital Work In
Progress
4,215.53 Other Assets

85,180.22

664.49
822.72
2.28
3,058.24

89,395.75
8,092.26
102,677.88 Total Assets

102,677.88

BALANCE SHEET AS ON 31st MARCH 2007

73

PROFIT AND LOSS ACCOUNT FOR THE YEAR 2007

PARTICULARS
income
Interest earned
Other Income
Total Income
Expenditure
Interest expended
Employee Cost
Selling and Admin Expenses
Depreciation
Miscellaneous Expenses
Preoperative Exp Capitalised
Operating Expenses
Provisions & Contingencies
Total Expenses
Net Profit for the Year
Extraordionary Items
Profit brought forward
Total
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)
Appropriations
Transfer to Statutory Reserves
Transfer to Other Reserves
Proposed Dividend/Transfer to Govt
Balance c/f to Balance Sheet
Total

AMOUNT
7,382.18
841.80
8,223.98
4,591.96
873.80
620.16
86.37
1,206.30
0.00
1,805.92
980.71
7,378.59
845.39
0.00
0.55
845.94
0.00
176.79
27.80
16.74
35.00
93.71
428.87
211.99
204.59
0.48
845.93

74

STATEMENT
YEAR 2008

PARTICULARS
Net Profit Before Tax

AMOUN
T
0.00

Net Cash From Operating Activities

1930.64

Net Cash (used in)/from

Investing Activities

-209.32

Net Cash (used in)/from Financing Activities

Net (decrease)/increase In Cash and Cash
Equivalents
Opening Cash & Cash Equivalents

Closing Cash & Cash Equivalents

-49.92

1671.40

8426.44

10097.84

CASH FLOW
FOR
THE

75

BALANCE SHEET AS ON 31st MARCH 2008

LIABILITIES

Total Share Capital

Equity Share Capital
Share Application
Money
Preference Share
Capital

AMOUNT
Rs

ASSETS

Cash & Balances with

RBI
Balance with Banks,
505.12
Money at Call
505.12

AMOUNT
RS
9,454.74
643.10

0.00 Advances

74,348.29

0.00 Investments

33,822.63

Reserves

5,118.19 Gross Block

2,937.45

Revaluation Reserves

1,724.40

Net Worth

7,347.71 Net Block

Deposits
Borrowings
Total Debt
Other Liabilities &
Provisions
Total Liabilities

Accumulated
Depreciation

103,858.6
Capital Work In Progress
5
4,760.49 Other Assets

741.62
2,195.83
4.57
3,604.10

108,619.1
4
8,106.43
124,073.2
Total Assets
8

124,073.26

76

PROFIT AND LOSS ACCOUNT FOR THE YEAR 2008

PARTICULARS
Income
Interest earned
Other Income
Total Income
Expenditure
Interest expended
Employee Cost
Selling and Admin Expenses
Depreciation
Miscellaneous Expenses
Preoperative Exp Capitalised
Operating Expenses
Provisions & Contingencies
Total Expenses
Net Profit for the Year
Extraordionary Items
Profit brought forward
Total
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)
Appropriations
Transfer to Statutory Reserves
Transfer to Other Reserves
Proposed Dividend/Transfer to Govt
Balance c/f to Balance Sheet
Total

CASH FLOW STATEMENT FOR THE YEAR 2009

AMOUNT
9,447.30
1,232.67
10,679.97
6,360.95
845.68
946.34
101.82
1,038.15
0.00
2,178.20
753.79
9,292.94
1,387.03
0.00
0.48
1,387.51
0.00
202.05
34.34
27.46
40.00
111.33
860.86
289.61
236.39
0.65
1,387.51

77

PARTICULARS
Net Profit Before Tax

AMOUN
T
0.00

Net Cash From Operating Activities

Net Cash (used in)/from

Investing Activities

5599.13

-309.76

Net Cash (used in)/from Financing Activities

Net (decrease)/increase In Cash and Cash
Equivalents

597.72

5887.09

Opening Cash & Cash Equivalents

10097.84

Closing Cash & Cash Equivalents

15984.93

BALANCE SHEET AS ON 31st MARCH 2009

LIABILITIES

AMOUNT
RS

ASSETS

AMOUNT
RS

78

Total Share Capital

Equity Share Capital
Share Application
Money
Preference Share
Capital

Cash & Balances

with RBI
Balance with Banks,
505.12
Money at Call
505.12

8,992.05
6,992.88

0.00 Advances

96,534.23

0.00 Investments

42,996.96

Reserves

6,549.26 Gross Block

3,220.65

Revaluation
Reserves

1,685.98

Net Worth

8,740.36 Net Block

Deposits
Borrowings
Total Debt
Other Liabilities &
Provisions
Total Liabilities

138,702.83

Accumulated
Depreciation

893.35
2,327.30

Capital Work In
Progress

7.86

3,884.90 Other Assets

3,124.23

142,587.73
9,647.43
160,975.52 Total Assets

160,975.51

PROFIT AND LOSS ACCOUNT FOR THE YEAR 2009

PARTICULARS

AMOU
NT

Income
Interest Earned
Other Income

11,889.3
8
1,482.55

79
Total Income
Expenditure
Interest expended
Employee Cost
Selling and Admin Expenses
Depreciation
Miscellaneous Expenses
Preoperative Exp Capitalised
Operating Expenses
Provisions & Contingencies
Total Expenses
Net Profit for the Year
Extraordionary Items
Profit brought forward
Total
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)
Appropriations
Transfer to Statutory Reserves
Transfer to Other Reserves
Proposed Dividend/Transfer to Govt
Balance c/f to Balance Sheet
Total

CASH FLOW STATEMENT FOR THE YEAR 2010

13,371.9
3
8,075.81
1,152.36
1,082.54
136.58
1,198.08
0.00
2,760.59
808.97
11,645.3
7
1,726.55
0.00
0.65
1,727.20
0.00
252.56
42.92
34.18
50.00
139.66
1,171.89
259.00
295.48
0.83
1,727.20

80

PARTICULARS
Net Profit Before Tax

AMOUNT
0.00

Net Cash From Operating Activities

-505.07

Net Cash (used in)/from

Investing Activities

-200.43

Net Cash (used in)/from Financing Activities

Net (decrease)/increase In Cash and Cash
Equivalents

497.26

-208.24

Opening Cash & Cash Equivalents

15984.93

Closing Cash & Cash Equivalents

15776.69

BALANCE SHEET AS ON 31st MARCH 2010

LIABILITIES
Total Share Capital
Equity Share Capital

AMOUNT
Rs

ASSETS

Cash & Balances

with RBI
Balance with Banks,
505.12
Money at Call
505.12

AMOUNT
Rs
12,468.24
3,308.45

81

Share Application
Money
Preference Share
Capital

0.00 Advances

119,315.30

0.00 Investments

54,403.53

Reserves

8,302.69 Gross Block

3,396.98

Revaluation Reserves

1,615.97

Accumulated
Depreciation

Net Worth

10,423.78 Net Block

Deposits

170,039.7 Capital Work In

4 Progress

Borrowings
Total Debt
Other Liabilities &
Provisions
Total Liabilities

9,215.31 Other Assets

1,101.50
2,295.48
9.96
3,360.89

179,255.0
5
5,483.01
195,161.8
Total Assets
4

195,161.85

PROFIT AND LOSS ACCOUNT FOR THE YEAR 2010

PARTICULARS
Income
Interest Earned
Other Income
Total Income
Expenditure
Interest expended
Employee Cost
Selling and Admin Expenses
Depreciation

AMOUNT
13,302.68
1,974.74
15,277.42
9,110.27
1,354.99
1,225.57
160.14

82
Miscellaneous Expenses
Preoperative Exp Capitalised
Operating Expenses
Provisions & Contingencies
Total Expenses
Net Profit for the Year
Extraordionary Items
Profit brought forward
Total
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)
Appropriations
Transfer to Statutory Reserves
Transfer to Other Reserves
Proposed Dividend/Transfer to Govt
Balance c/f to Balance Sheet
Total

1,351.53
0.00
3,206.76
885.47
13,202.50
2,074.92
0.00
0.83
2,075.75
0.00
277.81
47.21
41.08
55.00
174.37
1,177.09
572.01
325.02
1.63
2,075.75

83