CRITICAL ANALYSIS OF EXIM BANK

A project Submitted to
University of Mumbai for partial fulfillment of the degree of
Bachelor in Commerce – Semester VI
Under the Faculty of Commerce (Banking & Insurance)
By
Mr. AIKYA DATTATRAY GANDHI
Roll no.712
Under the Guidance of Miss Sujata Mahajan

SIR SITARAM & LADY SHANTABAI PATKAR COLLEGE OF ARTS SCIENCE

AND
V.P. VARDE COLLEGE OF COMMERCE & ECONOMICS
(AUTONOMOUS COLLEGE)
S.V. ROAD, GOREGAON (WEST), MUMBAI-400062
 CRITICAL ANALYSIS OF EXIM BANK
A project Submitted to
University of Mumbai for partial fulfillment of the degree of
Bachelor in Commerce – Semester VI
Under the Faculty of Commerce (Banking & Insurance)
By
Mr. AIKYA DATTATRAY GANDHI
Roll no.712
Under the Guidance of Miss Sujata Mahajan

SIR SITARAM & LADY SHANTABAI PATKAR COLLEGE OF ARTS SCIENCE

AND
V.P. VARDE COLLEGE OF COMMERCE & ECONOMICS
(AUTONOMOUS COLLEGE)
S.V. ROAD, GOREGAON (WEST), MUMBAI-400062
SIR SITARAM & LADY SHANTABAI PATKAR COLLEGE OF ARTS & SCIENCE
AND
V.P. VARDE COLLEGE OF COMMERCE & ECONOMICS
S.V. ROAD, GOREGAON (WEST), MUMBAI-400062

CERTIFICATE
This is to certify that Kumar Aikya Dattatray Gandhi has worked and duly
completed his/her Project work for the degree of Bachelor in Commerce under
the Faculty of Commerce in the subject of Banking & Insurance and his/her
project is entitled, “CRITICAL ANALYSIS OF EXIM BANK” under my
supervision.
I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree of
Diploma of any University.
It is his/her own work and facts reported by his/her personal findings and
investigations.

(Name of Mentor)

(Dr. Sharmishtha Matkar)

Principal
(Name of External Examiner)

Date of Submission:
 DECLARATION BY LEARNER

I Kumar AIKYA DATTATRAY GANDHI, here by, declare that the work
embodied in this project work titled “CRITICAL ANALYSIS OF EXIM
BANK” forms my own contribution to the research work carried out under
the guidance of (….) is a result of my own research work and has not been
previously submitted to any other University for any other Degree/Diploma to
this or any other University.

Where ever reference has been made to previous work of others, it has been
clearly indicated as such and included in bibliography.

I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical conduct.

(Name and Signature of learner)

Roll No: - 712

(Certified by: Miss Sujata Mahajan)

 ACKNOWLEDGEMENT
To list who have helped me is difficult because they are so numerous and the
depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me a

chance to do this project.

I would like to thank my Principal, Dr. Sharmishtha Matkar, for providing

the necessary facilities required for completion of these project.

I would like to express my sincere gratitude towards my project guide, (Name

of Mentor) whose guidance and care made this project successful.

I would like to thank my College Library, for having provided various

reference books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project, especially my Parents and Peers
who supported me throughout my project.

Signature
Aikya Dattatray Gandhi
Roll no: - 712
 CRITICAL ANALYSIS OF EXIM BANK

INTRODUCTION
The Export Import Bank (EXIM Bank) is the leading export finance organization of India
established under the umbrella of Export Import Bank (EXIM Bank) of India with the
specification in Act 1981, during the year 1982 (Chanana, 2009). Since its initiation, the EXIM
Bank act both as a key player and a catalyst in the upgrade of cross border investment and
trade. Initiating functions as a purveyor of credit of export, similar to other Agencies of Export
credit in the global level, the EXIM Bank of India (Chanana, 2010) for over the time period,
developed into an organization that shows a principal role in associating Indian industries,
specifically the SMEs (small and the medium enterprises) in their efforts of globalization, by
means of broad range of services and products provided at every phases of business cycle,
beginning from the technology imports and development of export products to the export
marketing, export production, overseas investment, post – shipment and pre – shipment. The
EXIM Bank of India plays a significant role as the source of finance, coordinator, promoter
and consultation to the foreign trade of India.

The EXIM Bank is a specific financial firm that is completely owned by the Indian Government
to assist the financial organizations in meeting the financial requirements. The EXIM Bank has
laid strong importance on improving the project exports and the funding preferences for which
the bank has been improved with the institution of the program of BC – NEIA (Buyer’s Credit
– National Export Insurance Account).

The bank deals in the lines of credit in association with regional development banks (Kilby,
2006), overseas financial institutions, other overseas entities and sovereign governments. The
EXIM Bank has laid strong importance on improving the project exports and the funding
preferences for which the bank has been improved with the institution of the program of BC –
NEIA (Buyer’s Credit – National Export Insurance Account). The bank enables technology of
two – way transfer through financing the import of technologies into the Indian nation and the
investments in the foreign nations by the Indian organizations for making subsidiaries, joint
ventures or making the overseas acquisitions (EXIM bank, 2011). From the initiation of this
institution, EXIM Bank of India is working as a leading mechanism and major player for the
support and escalation of cross border business, trade and foreign investments. The key tasks
performed by the EXIM Bank includes to provide the direct financial support to the exporters
of assorted categories, to issues the shares, bonds and stocks. In the span of year 2005-2006,
the cumulative amount of credits given by the bank was 150389 million, while this value was
220760 million in the recent year. Many other chores are associated with the export import
bank to cater the needs of the exporters. It was set up with the aim to finance, facilitate and
promote the foreign or international trade of India. To strengthen the respective and joint
exchange and speculation in the middle of India and Myanmar, the Bank opened its eighth
abroad Representative Office in Yangon, Myanmar. The Bank additionally plans to set up a
Project Development Company in Africa, which will basically hope to get framework ventures
Africa to a bankable stage and encourage sends out from India to Africa. The Bank, with its
assorted projects, takes into account diverse portions of exporters and the fare cycle. The Bank
gives help with offering Indian some assistance with locating so as to firm in their globalization
endeavors abroad. EXIM Bank likewise lays unique accentuation on improving fare capacities
and worldwide intensity of Indian organizations through its different Advisory Services.

During the year, the Bank issued India’s first USD denominated Green bonds with a
benchmark size of US$500 million. During the year, an Export Development Fund [EDF]
facility, a special fund, established by GoI under the Exim Bank Act and administered by Exim
Bank, to sanction loans in the interest of international trade towards meeting strategic
objectives was put to use. Exim Bank under the GoI’s ‘Act East Initiative’ undertook a Mission
to CLMV countries, consequent to which a Project Development Company is being set up, to
be followed by a Project Development and Facilitation Framework.

HISTORY OF EXIM BANK

For a long time, the need for a separate institution for export finance was not felt in the country
due to the closed market conditions and India’s limited share in world export. It is only during
the 1980s, the need to increase India’s export was felt, owing to increased foreign debts, which
compelled India to go for an Apex institution and the Export Import Bank (Exim Bank) was
set up in 1982.
 BACKGROUND OF EXIM BANK

EXIM bank believes in promoting the business through personalized services and perpetual
relationship. It has strong commitment to stay competitive and serve the clients of different
strata in the society as well as to accelerate the pace of economic operation.

This research explores the impact of The EXIM Bank policies on the international investment
and trade promotion in our country. An attempt has been made to understand the customer
satisfaction towards the service quality of EXIM Bank of India. This research investigates the
satisfaction level of customers of EXIM Bank of Delhi branch in special reference with NCR
which acts as key player in international trade.

NEEDS OF EXIM BANK

Besides, the change in the world market and the creation of World Trade Organization (WTO)
compelled India to give a fillip to its export finance. All along, it was felt that the Indian
exporter needs only rupee finance. But it is only due to a change in the export policy of
promoting more value added export, the role of Exim bank was very much felt. It is time Exim
bank provided finance for research and development as indigenous research plays a crucial role
owing to intellectual property rights.
 OBJECTIVES OF EXIM BANK
1. Ensure an integrated and coordinated approach to solving the problems of exporter.
2. Provide special attention to capital goods export and export of technical services.
3. Tap domestic and overseas markets for resources, undertake development and finance
activities in the areas of exports.
4. Provide financial assistance to the exporters and importers and act as the principal
financial institution for coordinating the working of other institutions engaged in
financing exports and imports.
5. Provides refinance facilities to commercial banks and financial institutions against the
exports-imports financing activities.

IMPORTANCE OF EXIM BANK

1. Provide financial assistance to exporters.

2. Promoting foreign trade of India.
3. Coordinating the working of institutions engaged in financing exports and imports.
4. Assist Indian Joint Ventures in third world.
5. Concentrate on medium and long term finance.

REVIEW OF LITERATURE

1. Miller (2008) in a study on health paid leave benefits has found that health coverage
remains by far the most costly benefits provided to employees more than one quarter
of human resource professionals, 29%, indicated their organisation now provide
health saving accounts, paid family leaves and paid paternity leave all declined in
2008 compared with 2007.

2. Giesel (2005) in a study on newyork city council passes has found that grocery
stores and other retailers that sell groceries to make sustaintial contributions toward
their employees health insurance coverage costs by the newyork council, estimated
 amount of contribution to each employee per hour, coverage of the mandate,
implications of the legislation for the Employees Retirement Income Security Act.

3. Hone (2007) in a study on health plans has found that the seven step plan that can
guide companies toward their transformation to consumer driven health plans and
health savings accounts in the US companies should establish at honest assessment
of their health benefits and health status. They are also asked to create a long- term
vision with interim and annual goals.

4. Gresham (2005) in a study on responsibility in plan language found tha the

responsibilty of an employee to handle health costs throug a consumer directed plan.
Explanation on the defined contribution retirement products, reflections, reason it
is necessary that benefits manager should continously reassess therir programmes
and communications with their employees.

5. Oberoi (2010) in a study on rewards and benefits has found that it is not just how
much reward our staff that matters. Rather, it is what reward them for how measure
the results of this investment. Variable pay, benefits differentiated rewards and
performance matrics these are all key aspects play the important role in ROI
measurement and essential part of an organization‟s reward architecture. In
benefits. Organization have the mindset that their high performance will only stay
with them if their salary was externally competitive not only on aspects, but also in
terms of benefits and total remuneration.

HYPOTHESIS

Ho:- EXIM Bank is leading in Banking sector.

H1: - EXIM Bank is not leading in Banking sector.
 RESEARCH METHODOLOGY

Research methodology is considered as the nerve of the project. Without a proper well-
organized research plan, it is impossible to complete the project and reach to any
conclusion. The project was based on the survey plan. The main objective of survey
was to collect appropriate data, which work as a base for drawing conclusion and
getting result. Therefore, research methodology is the way to systematically solve the
research problem. Research methodology not only talks of the methods but also logic
behind the methods used in the context of a research study and it explains why a method
has been used in the preference of the other.
 BALANCE SHEET

BALANCE SHEET OF MK EXIM INDIA (in Rs. MAR MAR MAR MAR MAR
Cr.) 19 18 17 16 15

12 12 12 12 12
mths mths mths mths mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 7.18 7.18 7.18 7.18 7.18

TOTAL SHARE CAPITAL 7.18 7.18 7.18 7.18 7.18

Reserves and Surplus 17.19 16.71 16.32 15.57 14.91

TOTAL RESERVES AND SURPLUS 17.19 16.71 16.32 15.57 14.91

TOTAL SHAREHOLDERS FUNDS 24.37 23.89 23.50 22.75 22.09

Minority Interest 0.49 0.48 0.46 0.39 0.00

NON-CURRENT LIABILITIES

Long Term Borrowings 0.44 0.19 1.20 2.62 0.26

Deferred Tax Liabilities [Net] -0.03 0.01 0.10 0.01 -0.02

Other Long-Term Liabilities 0.00 0.00 0.00 0.00 0.00

Long Term Provisions 0.00 0.00 0.00 0.00 0.00

TOTAL NON-CURRENT LIABILITIES 0.41 0.20 1.29 2.63 0.24

CURRENT LIABILITIES
Trade Payables 1.10 1.25 21.84 34.59 31.68

Other Current Liabilities 0.66 1.29 0.58 0.50 0.72

Short Term Provisions 0.27 0.15 0.22 0.21 0.28

TOTAL CURRENT LIABILITIES 5.03 6.95 26.25 39.16 34.00

TOTAL CAPITAL AND LIABILITIES 30.30 31.52 51.51 64.94 56.33

ASSETS

NON-CURRENT ASSETS

Tangible Assets 4.58 4.75 5.63 6.09 1.90

Intangible Assets 0.00 0.00 0.00 0.00 0.00

Capital Work-In-Progress 0.00 0.00 0.00 0.00 0.00

FIXED ASSETS 4.58 4.75 5.63 6.09 1.90

Non-Current Investments 0.09 0.07 0.07 0.07 0.00

Deferred Tax Assets [Net] 0.00 0.00 0.00 0.00 0.00

Long Term Loans and Advances 0.02 0.06 0.90 1.06 1.03

Other Non-Current Assets 0.60 0.87 0.76 0.70 0.51

TOTAL NON-CURRENT ASSETS 5.29 5.75 7.36 7.91 3.44

CURRENT ASSETS

Current Investments 0.00 0.00 0.00 0.00 0.00

Inventories 6.48 3.60 4.50 2.78 1.94

Trade Receivables 14.93 14.11 39.27 53.68 50.15

Cash and Cash Equivalents 0.11 0.11 0.27 0.46 0.40

Short Term Loans and Advances 3.49 7.27 0.08 0.11 0.40

OtherCurrentAssets 0.00 0.68 0.03 0.00 0.00

TOTAL CURRENT ASSETS 25.01 25.77 44.15 57.03 52.89

TOTAL ASSETS 30.30 31.52 51.51 64.94 56.33

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 0.00 0.00 0.00 0.01 0.02

BONUS DETAILS

Bonus Equity Share Capital 0.00 0.00 0.00 0.00 0.00

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value 0.00 0.00 0.00 0.00 0.00

Non-Current Investments Unquoted Book Value 0.00 0.07 0.07 0.07 0.00

CURRENT INVESTMENTS

Current Investments Quoted Market Value 0.00 0.00 0.00 0.00 0.00

Current Investments Unquoted Book Value 0.00 0.00 0.00 0.00 0.00
 PROFIT AND LOSS ACCOUNT

MK Exim India
Consolidated Profit & Loss
------------------- in Rs. Cr. -------------------
account

Mar 19 Mar 18 Mar 17 Mar 16 Mar 15

12 mths 12 mths 12 mths 12 mths 12 mths

INCOME

Revenue from Operations [Gross] 27.26 22.01 28.91 36.63 50.76

Revenue from Operations [Net] 27.26 22.01 28.91 36.63 50.76

Total Operating Revenues 27.26 22.01 28.91 36.63 50.76

Other Income 1.55 0.96 2.88 2.54 0.17

Total Revenue 28.81 22.97 31.79 39.16 50.93

EXPENSES

Cost of Materials Consumed 0.00 0.00 0.00 0.40 1.63

Purchase of Stock-In Trade 25.63 16.36 27.19 34.05 47.40

Operating and Direct Expenses 0.00 0.61 0.98 0.71 0.49

Changes in Inventories Of FG, WIP

-2.88 0.90 -1.72 -0.98 -1.19
And Stock-In Trade

Employee Benefit Expenses 1.89 1.44 1.09 1.02 0.15

Finance Costs 0.47 0.75 0.88 0.95 0.22

Depreciation and Amortization

0.72 0.84 0.97 1.02 0.17
Expenses

Other Expenses 2.17 1.49 1.12 1.34 1.37

Total Expenses 28.00 22.39 30.51 38.50 50.24

Profit/Loss Before Exceptional,

0.81 0.58 1.28 0.66 0.69
Extraordinary Items and Tax
 Profit/Loss Before Tax 0.81 0.58 1.28 0.66 0.69

Tax Expenses-Continued Operations

Current Tax 0.31 0.27 0.29 0.19 0.22

Less: MAT Credit Entitlement 0.00 0.00 0.00 0.00 0.03

Deferred Tax 0.00 -0.08 -0.05 -0.06 -0.01

Tax for Earlier Years 0.00 0.00 0.14 0.00 0.00

Total Tax Expenses 0.31 0.18 0.38 0.13 0.18

Profit/Loss After Tax and Before

0.50 0.40 0.91 0.53 0.51
Extraordinary Items

Profit/Loss from Continuing

0.50 0.40 0.91 0.53 0.51
Operations

Profit/Loss for The Period 0.50 0.40 0.91 0.53 0.51

Minority Interest -0.01 -0.02 -0.08 -0.12 0.00

Consolidated Profit/Loss After

0.48 0.38 0.83 0.41 0.51
MI and Associates

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 1.00 1.00 1.00 1.00 1.00

Diluted EPS (Rs.) 1.00 1.00 1.00 1.00 1.00

DIVIDEND AND DIVIDEND

PERCENTAGE

Equity Share Dividend 0.00 0.00 0.00 0.00 0.36

Tax on Dividend 0.00 0.00 0.00 0.00 0.07

 CASHFLOW STATEMENT

CASH FLOW OF MK EXIM INDIA MAR MAR MAR MAR MAR

(in Rs. Cr.) 19 18 18 17 16

12 12 12 12 12
mths mths mths mths mths

NET PROFIT/LOSS BEFORE 0.00 0.58 0.00 1.28 0.66

EXTRAORDINARY ITEMS AND TAX

Net Cashflow From Operating Activities 0.00 0.32 0.00 2.11 6.54

Net Cash Used in Investing Activities 0.00 -0.13 0.00 -0.64 -3.55

Net Cash Used from Financing Activities 0.00 -0.35 0.00 -1.66 -3.17

Foreign Exchange Gains / Losses 0.00 0.00 0.00 0.00 0.00

NET INC/DEC IN CASH AND CASH 0.00 -0.16 0.00 -0.19 -0.18
EQUIVALENTS

Cash and Cash Equivalents Begin of Year 0.00 0.27 0.00 0.46 0.64

Cash and Cash Equivalents End of Year 0.00 0.11 0.00 0.27 0.46
 KEY FINANCIAL RATIOS

KEY FINANCIAL RATIOS OF MK MAR MAR MAR MAR MAR

EXIM INDIA (in Rs. Cr.) 19 18 17 16 15

PER SHARE RATIOS

Basic EPS (Rs.) 0.67 0.53 1.15 0.57 0.70

Diluted EPS (Rs.) 0.67 0.53 1.15 0.57 0.70

Cash EPS (Rs.) 1.69 1.72 2.61 2.15 0.95

Book Value [ExclRevalReserve]/Share (Rs.) 34.63 33.94 33.38 32.24 30.77

Book Value [InclRevalReserve]/Share (Rs.) 34.63 33.94 33.38 32.24 30.77

Revenue from Operations/Share (Rs.) 37.97 30.65 40.26 51.01 70.69

PBDIT/Share (Rs.) 2.78 3.02 4.36 3.66 1.50

PBIT/Share (Rs.) 1.78 1.85 3.01 2.25 1.26

PBT/Share (Rs.) 1.13 0.81 1.79 0.92 0.96

Net Profit/Share (Rs.) 0.69 0.56 1.26 0.74 0.71

NP After MI and SOA / Share (Rs.) 0.67 0.53 1.15 0.57 0.71

PROFITABILITY RATIOS

PBDIT Margin (%) 7.32 9.85 10.82 7.17 2.12

PBIT Margin (%) 4.69 6.05 7.48 4.40 1.78

PBT Margin (%) 2.97 2.63 4.44 1.79 1.35

Net Profit Margin (%) 1.81 1.81 3.13 1.44 1.00

NP After MI and SOA Margin (%) 1.76 1.74 2.85 1.12 1.00

Return on Net worth/Equity (%) 1.97 1.60 3.51 1.80 2.30

Return on Capital Employed (%) 5.06 5.42 8.56 1.59 2.27

Return on Assets (%) 1.59 1.21 1.60 0.63 0.90

Total Debt/Equity (X) 0.14 0.19 0.20 0.29 0.07

Asset Turnover Ratio (%) 89.98 69.81 56.12 56.39 90.10

LIQUIDITY RATIOS

Current Ratio (X) 4.97 3.71 1.68 1.46 1.56

Quick Ratio (X) 3.69 3.19 1.51 1.39 1.50

Inventory Turnover Ratio (X) 4.21 6.11 6.43 13.18 26.11

Dividend Payout Ratio (NP) (%) 0.00 0.00 0.00 0.00 70.55

Dividend Payout Ratio (CP) (%) 0.00 0.00 0.00 0.00 52.53

Earnings Retention Ratio (%) 0.00 0.00 0.00 0.00 29.45

Cash Earnings Retention Ratio (%) 0.00 0.00 0.00 0.00 47.47

COVERAGE RATIOS
Interest Coverage Ratios (%) 2.72 1.77 2.46 1.69 4.19

Interest Coverage Ratios (Post Tax) (%) 2.72 1.77 2.46 1.69 4.19

VALUATION RATIOS

Enterprise Value (Cr.) 13.98 10.57 10.28 15.61 7.63

EV/Net Operating Revenue (X) 0.51 0.48 0.36 0.43 0.15

EV/EBITDA (X) 7.00 4.88 3.28 5.94 7.07

Market Cap/Net Operating Revenue (X) 0.37 0.26 0.18 0.25 0.13

Retention Ratios (%) 0.00 0.00 0.00 0.00 29.44

Price/BV (X) 0.42 0.24 0.22 0.40 0.29

Price/Net Operating Revenue 0.37 0.26 0.18 0.25 0.13

Earnings Yield 0.05 0.07 0.16 0.04 0.08

 FINANCIAL RATIOS

RATIOS 2019 2018 2017

DEBT-EQUITY RATIO 0.18 0.20 0.19

CURRENT RATIO 4.51 2.08 1.51

ASSET TURNOVER RATIO 7.65 4.84 5.61

INVENTORY TURNOVER RATIO 4.95 5.03 7.18

DEBTORS TURNOVER RATIO 1.93 0.78 0.59

INTEREST COVERAGE RATIO 2.73 1.89 1.59

OPERATING MARGIN (%) 5.61 7.74 5.13

NET PROFIT MARGIN (%) 1.69 1.83 0.42

RETURN ON CAPITAL EMPLOYED (%) 4.03 4.41 3.81

RETURN ON NET WORTH (%) 1.75 1.55 0.49