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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.
Objectives
Scope
Definitions
The following terms are used in this Statement with the meanings
specified:
(ii) Cash equivalents are short term, highly liquid investments that
are readily convertible into known amounts of cash and which are subject
to an insignificant risk of changes in value.
(iii) Cash flows are inflows and outflows of cash and cash
equivalents.
(vii) Cash and Cash Equivalents Cash equivalents are held for the
purpose of meeting short-term cash commitments rather than for investment
or other purposes. For an investment to qualify as a cash equivalent, it must
be readily convertible to a known amount of cash and be subject to an
insignificant risk of changes in value. Therefore, an investment normally
qualifies as a cash equivalent only when it has a short maturity of, say, three
months or less from the date of acquisition. Investments in shares are
excluded from cash equivalents unless they are, in substance, cash
equivalents; for example, preference shares of a company acquired shortly
before their specified redemption date (provided there is only an
insignificant risk of failure of the company to repay the amount at
maturity).Cash flows exclude movements between items that constitute
cash or cash equivalents because these components are part of the cash
management of an enterprise rather than part of its operating, investing
and financing activities. Cash management includes the investment of excess
cash in cash equivalents.
Cash flows from operating activities are primarily derived from the
principal revenue-producing 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;
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.
(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);
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 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.
(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.
(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:
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:
(c) all other items for which the cash effects are investing or financing
cash flows.
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.
(a) cash receipts and payments on behalf of customers when the cash
flows reflect the activities of the customer rather than those of the
enterprise; and
(b) cash receipts and payments for items in which the turnover is quick,
the amounts are large, and the maturities are short.
c) rents collected on behalf of, and paid over to, the owners of
properties
(a) cash receipts and payments for the acceptance and repayment of
deposits with a fixed maturity date;
(b) the placement of deposits with and withdrawal of deposits from other
financial enterprises; and
cash advances and loans made to customers and the repayment of those
advances and loans
Special items
and includes the differences, if any, had those cash flows been reported at
the end-of-period exchange rates
2 Extraordinary Items
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.
3 Taxes on Income
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
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
Other Disclosures
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.
RESEARCH DESIGN
5. comprehend how cash flow statement can be used in real life for
different
decision making.
SCOPE OF STUDY:
METHODOLOGY:
The schedule that was planned to be executed or the methodology of approach may be
explained as follows.
An in depth study of the banking norms & procedures that are used in
analyzing the data obtained from the corporal clients.
Proper & effective collection of the various data required in to with the
analysis in relevance with the current economic growth.
An efficient analysis with an eye for errors or blunders that may occur
due to inefficiency. This is the most prominent feature of the study &
was executed with utmost care & diligence.
It also included the study of various circulars & notes that were passed
by the management in this regard. Thus having a higher hand on the
literature study of the project as a whole.
The tabulated data has been analyzed thoroughly through various ratios and graphs,
which is used.
1. Time: The time allotted for the project has been only around 2 months.
The study could be done only for the past 5 years.
2. Finance: Due to limited financial resources as in depth research could not be
undertaken.
3. The face value of the figures given in the balance sheet was used for the
project.
For the purpose of Analysis and interpretation, statement of Current Assets and
Current Liabilities, master tables and graphs were used for the effective presentation.
CHAPTER SCHEME:
Chapter 1: - Introduction
THE HISTORY
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.
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
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.
• To analyze the Gross NPA, Net NPA and Capital Adequacy Ratio of
Union Bank of India.
RESEARCH METHODOLOGY
DATA COLLECTION
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
• Schedules
• 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.
Business Operations
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 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.
Total business of the Bank at the end of Dec’08 stood at Rs.2,22,625 crore
registering a growth of 28.33 % over Dec’07.The bank’s total deposits as on
31st Dec’08 reached a level of Rs.1,29,647 crore from Rs.99227 crore as on
Dec’07 ,an increase of 30.66%. Gross advances of the Bank reached a
level of Rs.92,978 crore as on 31st Dec’08,registering a growth of 25.22%
over Dec’07.The Capital Adequacy Ratio of the Bank (BASEL I) is at
12.32% & BASEL II at 13.41 % as on Dec’08.The net interest margin of
the Bank increased to 2.97% for the nine months period ended Dec’08.Return
on average assets improved from 1.31% in Dec’07 to 1.92% in
Dec’08(QoQ) indicating more efficient use of Funds. The asset quality
recorded a significant improvement with steep reduction in Net NPAs from
0.35% in Dec’07 to 0.14% in Dec’08 and the Gross NPAs from 2.10% to
1.68%.
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.
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
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.
THE FACILITATORS
THE PROGRAMS
RISK MANAGEMENT
2 The issues related to Credit Risk are addressed in the Policies stated
below;
1 Loan Policy.
2 Credit Monitoring Policy.
3 The Policies and procedures for Market Risks are articulated in the ALM
Policy and Treasury 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.
3 Further, Bank has the following separate committees of top executives and
dedicated Risk Management Department:
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.
5 The Credit rating system of the Bank has eight borrower grades for
standard accounts and three grades for defaulted borrowers.
MARKET WRISK
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 bank’s net interest income in the short run and market value of
the equity in the long run for enhance
ing shareholders wealth. The important aspect 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.
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.
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
3 The Internal audit function of the Bank and the Risk Based Internal Audit,
compliments the banks ability to control and mitigate risk.
4 Bank will implement New Capital Accord w.e.f. 31/03/2008. The parallel
run, till implementation, is currently underway
Particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Rs. In crores
Dividend 29.85 24.20 17.04 17.11 15.66
Payout Ratio
Net Profit
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.
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 net profit of dividend payout
ratio is decreasing gradually.
Particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Dividend 26.47 21.95 15.87 15.85 14.54
Payout Ratio
Cash Profit
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
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.
Particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Earning 70.11 75.82 82.97 82.80 84.35
Retention
Ratio
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
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.
particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Cash Earning 73.49 78.06 84.13 84.07 85.47
Retention
Ratio
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
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.
Particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
AdjustedCas 97.44 91.38 69.74 74.82 76.06
h Flow
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
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
particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Earnings Per 13.37 16.74 27.46 34.18 41.08
Share
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
45
40
35
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 earnings per share is increasing
gradually.
particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Net Cash
From
-1124.99 1956.28 1930.64 5599.13 -505.07
Operating
Activities
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.
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.
particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Net Cash
(used in)/from
-53.87 -101.33 -209.32 -309.76 -200.43
Investing
Activities
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
-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.
particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Net Cash
(used
in)/from 997.41 180.98 -49.92 597.72 497.26
Financing
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
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.
particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Net
(decrease)/increas
-181.45 2035.93 1671.40 5887.09 -208.24
e In Cash and Cash
Equivalents
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
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.
particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Opening
Cash & Cash 6571.97 6390.51 8426.44 10097.84 15984.93
Equivalents
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.
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
particulars Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Closing Cash
& Cash 6390.52 8426.44 10097.84 15984.93 15776.69
Equivalents
INTERPRETATION :
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.
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
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
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.
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.
SUGGESTION
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.
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.
CONCLUSIONS
Thus it extremely important for the lender bank to assess the risk
associated with credit, thereby ensure the security for the funds
deposited by the depositors.
BIBLIOGRAPHY
Books :-
Websites:-
• www.unionbankofindia.com
• www.scribd.com
ANNEXUES
PARTICULARS AMOUNT
Accumulated
Revaluation Reserves 465.68 587.17
Depreciation
Capital Work In
Deposits 74,094.30 15.56
Progress
PARTICULARS AMOUNT
Income
Interest Earned 5,863.71
Other Income 625.10
Total Income 6,488.81
Expenditure
Interest expended 3,489.42
Employee Cost 866.91
Selling and Admin Expenses 414.23
Depreciation 86.13
Miscellaneous Expenses 956.93
Preoperative Exp Capitalised 0.00
Operating Expenses 1,558.15
Provisions & Contingencies 766.05
Total Expenses 5,813.62
Net Profit for the Year 675.18
Extraordionary Items 0.00
Profit brought forward 40.99
Total 716.17
Preference Dividend 0.00
Equity Dividend 176.79
Corporate Dividend Tax 24.80
Per share data (annualised)
Earning Per Share (Rs) 13.37
Equity Dividend (%) 35.00
Book Value (Rs) 81.02
Appropriations
Transfer to Statutory Reserves 514.04
Transfer to Other Reserves -0.01
Proposed Dividend/Transfer to Govt 201.59
Balance c/f to Balance Sheet 0.55
Total 716.17
PARTICULARS AMOUNT
Net Profit Before Tax 0.00 CA
SH
Net Cash From Operating Activities 1956.28
PARTICULARS AMOUNT
income
Interest earned 7,382.18
Other Income 841.80
Total Income 8,223.98
Expenditure
Interest expended 4,591.96
Employee Cost 873.80
Selling and Admin Expenses 620.16
Depreciation 86.37
Miscellaneous Expenses 1,206.30
Preoperative Exp Capitalised 0.00
Operating Expenses 1,805.92
Provisions & Contingencies 980.71
Total Expenses 7,378.59
Net Profit for the Year 845.39
Extraordionary Items 0.00
Profit brought forward 0.55
Total 845.94
Preference Dividend 0.00
Equity Dividend 176.79
Corporate Dividend Tax 27.80
Per share data (annualised)
Earning Per Share (Rs) 16.74
Equity Dividend (%) 35.00
Book Value (Rs) 93.71
Appropriations
Transfer to Statutory Reserves 428.87
Transfer to Other Reserves 211.99
Proposed Dividend/Transfer to Govt 204.59
Balance c/f to Balance Sheet 0.48
Total 845.93
PARTICULARS AMOUNT
Net Profit Before Tax 0.00
Accumulated
Revaluation Reserves 1,724.40 741.62
Depreciation
PARTICULARS AMOUNT
Income
Interest earned 9,447.30
Other Income 1,232.67
Total Income 10,679.97
Expenditure
Interest expended 6,360.95
Employee Cost 845.68
Selling and Admin Expenses 946.34
Depreciation 101.82
Miscellaneous Expenses 1,038.15
Preoperative Exp Capitalised 0.00
Operating Expenses 2,178.20
Provisions & Contingencies 753.79
Total Expenses 9,292.94
Net Profit for the Year 1,387.03
Extraordionary Items 0.00
Profit brought forward 0.48
Total 1,387.51
Preference Dividend 0.00
Equity Dividend 202.05
Corporate Dividend Tax 34.34
Per share data (annualised)
Earning Per Share (Rs) 27.46
Equity Dividend (%) 40.00
Book Value (Rs) 111.33
Appropriations
Transfer to Statutory Reserves 860.86
Transfer to Other Reserves 289.61
Proposed Dividend/Transfer to Govt 236.39
Balance c/f to Balance Sheet 0.65
Total 1,387.51
PARTICULARS AMOUNT
Net Profit Before Tax 0.00 CASH
FLOW
Net Cash From Operating Activities 5599.13
Capital Work In
Deposits 138,702.83 7.86
Progress
Borrowings 3,884.90 Other Assets 3,124.23
PARTICULARS AMOUNT
Income
Interest Earned 11,889.38
Other Income 1,482.55
Total Income 13,371.93
Expenditure
Interest expended 8,075.81
Employee Cost 1,152.36
Selling and Admin Expenses 1,082.54
Depreciation 136.58
PARTICULARS AMOUNT
Net Profit Before Tax 0.00
Money
Preference Share
0.00 Investments 54,403.53
Capital
Reserves 8,302.69 Gross Block 3,396.98
Accumulated
Revaluation Reserves 1,615.97 1,101.50
Depreciation
Net Worth 10,423.78 Net Block 2,295.48
Capital Work In
Deposits 170,039.74 9.96
Progress
Borrowings 9,215.31 Other Assets 3,360.89
PARTICULARS AMOUNT
Income
Interest Earned 13,302.68
Other Income 1,974.74
Total Income 15,277.42
Expenditure