CASH FLOW ANALYSIS IN ANDHRA PRAGATHI GRAMEENA BANK,KADAPA

In the partial fulfillment for the award of the Degree

MASTER OF BUSINESS ADMINISTRATION

SUBMITED BY

Ms. M.SUBHASHINI
Reg.No.1981063046

Under the guidance of Prof. M. Suresh Babu

M.Com., MBA., M.Phil., Ph.D., PGDCA

DEPARTMENT OF BUSINESS ADMINISTRATION, SRI VENKATESHWARA UNIVERSITY. TIRUPATI ANDHRA PRADESH, INDIA, 2009-11.

DECLARATION I declare that the project entitled CASH FLOW ANALYSIS done at Andhra Pragathi Grameena Bank, kadapa. Submitted by one as partial fulfillment for the award of Master of Business Administration, at Sri Venkateshwara University, kadapa, Andhra Pradesh under the faculty guidance of Prof.M.Suresh babu is a record of bonafied work written by me and that it has not previously formed the basis for the award of any degree, diploma, associate ship or other similar titles.

Place: Date:

Signature

EXECUTIVE SUMMARY

INDUSTRIAL PROFILE Rural Bank in India was started since the establishment of banking sector in India. In these days Regional Rural Banks (RRBs) mainly focused upon the agro sector. Rural bank in India penetrate every corner of the country and extended helping having in the country. The government of India setup Regional Rural Bank on October 2nd 1975,the bank provide credit to the weaker section of the rural area, particularly the small and marginal former, agricultural labour, artisans and small enterprises. COMPANY PROFILE Andhra Pragathi Grameena Bank established on 1st June 2006 after amalgamation of 3 Regional Rural Banks namely Rayalseema Grameena Bank, Anantha Grameena Bank and Pinakani Grameena Bank.This Regional Rural Banks Act,1976 and consequent to the government of India notification dated 1st June 2006 were amalgated and formed as a new entity called APGB with its Head Office, kadapa. STATEMENT OF THE PROBLEM Banks are the main financial sources to the public. They are the providers and mobilizers of the finance from the public. But they are facing different problems such as dissatisfaction of the customer regarding banking services, Improper cash management, financial performance and the like. Among the problems faced by RRBs. Cash management is an very important technique to be adopted in any bank. Hence, this study concentrate on cash flow analysis of APGP in kadapa district. OBJECVTIES OF STUDY The main intention of this study is to analyse the financial position of the Andhra Pragathi Grameena Bank.The following are the main objectives of the study:

 To measure the profitability and liquidity position in the organization. To evaluate the cash position of the bank through cash flow analysis. To analyze total cash deposits, loan syndication position of the bank To elicit the sources of cash income and cash payments. NEED FOR THE STUDY It is the common obligation to every financial institution to know its strengths and weaknesses. Though the company has several departments, the under researched area is finance. But there is number of studies have been conducted on the cash flow analysis in Andhra Pragathi Grameena Bank, kadapa. District in A.P. So, the study is needed to help the bank for its smooth financial transactions effectively. RESEARCH METHODOLOGY AND DESIGN There are five main branches in Andhra Pradesh one in Kadapa, one in Prakasham District, one in Kurnool district, one in Ananthapur district, one in Nellore district. The Head Office located in Kadapa, district and it has various branches through out the district.Among all these branches, the selected branch is Andhra Pragathi Grameen Bank is located in Kadapa district in Andhra Pradesh. The executives and financial department officials are enquired for the purpose of the study.. The study is mainly based on the analytical research design. This design largely interprets the already available information. DATA SOURCES The data for the present study is collected through primary and secondary sources. Secondary data is obtained from annual reports of the company and primary data was collected by interacting financial executives of the company.

Primary Data The primary data of this study was collected by consulting the accounting officer, financial Executive of that bank. Secondary Data The study is mainly based on the sources of secondary data. The secondary data for this study was collected from the published sources i.e., annual reports and WWW.APGBANK.COM SCOPE OF THE STUDY The present study is confined to only Andhra Pragathi Grameena Bank in Kadapa. The study is limited to cash flow analysis and it has been analyzed by taking the information related to both the present and past data into consideration with reference to the performance of the bank. PERIOD OF STUDY The period of the study is confined to four years i.e. from 20082009 to 2009-2010. TOOLS FOR THE STUDY The data relating to the performance of the Andhra Pragathi Grameena Bank from different activities that is operating activities, investing activities and financing activities have been carefully analyzed and also cash flow statement, column and bar charts. LIMITATIONS OF STUDY The major limitations of the study are:

 Due to constraint of time, the researcher unable to collect detailed analysis of the financial data. There are some differences in collected data as of data collected from different secondary sources. Finance is also an important constraint for the detailed analysis. PROJECT SCHEME The study is mainly divided into six chapters Chapter 1- Introduction to Rural Banks Chapter 2- Andhra Pragathi Grameena Bank- A Profile Chapter 3- Methodology and Model of Research Chapter 4- Cash Flow Analysis- A Review Chapter 5- Data Analysis and Implementation Chapter 6- Findings and Suggestions

INTRODUCTION TO RURAL BANKS

INTRODUCTION OF RURAL BANK Regional Rural Banks in India are integral part of the rural credit structure of the country. Since the very beginning, When the Regional Banks in India (RRBs) were established in October 2nd, 1975, these banks played a pivotal role in the economic development of the rural India. The main goal of establishing regional rural banks in India was to provide credit to the rural people who are not economically strong enough, especially the small and marginal farmers, artisans, agricultural labours and even small entrepreneurs. Regional Rural Banks in India are an integral part of the rural credit structure of the country. Since the very beginning, when the Regional Rural Banks in India (RRBs) were established in October 2nd 1975, these banks played a pivotal role in the economic development of the rural India. The main goal of establishing regional rural banks in India was to provide credit to the rural people who are not economically strong enough, especially the small and marginal farmers, artisans, agricultural labours, and even small entrepreneurs. The Concept And The Brief History The history of regional rural banks in India dates back to the year 1975. Its the Narsimham committee that conceptualized the foundation of regional rural banks in India. The committee felt the need of regionally oriented rural banks that would address the problems and requirements of the rural people with local feel, yet with the same level of professionalism of commercial banks. Five regional rural banks were set up on October 2nd with a total authorized capital of Rs.1 crore, which later augmented to Rs.5 crores. There were five commercial banks, viz. Punjab National Bank, State Bank of India, Syndicate Bank, United Bank of India and United Commercial Bank, which sponsored the regional rural banks. The equities of rural banks were divided in a proportion of 50:35:15 among the Central Government, the sponsor bank and the Concerned State Government.

The following years have not been so easy for the regional rural banks in India, as there were major concern of financial viability. A number of committees were formed to find out solution. Studies were conducted to find out the factors that influence RRBs performance. The roles played by the sponsor banks were also analyzed. FORMATION The Govt. of India, in July 1975, appointed a working group to study in depth the problem of devising alternative agencies to provide institutional credit to the rural people in the context of steps then initiated under the 29 Point Economic Programme. The Narsimham Committee Conceptualized the creation of RRBs in 1975 as a new set of regionally oriented rural banks, which would combine the local feel and familiarity of rural problems characteristic of cooperatives with the professionalism and large resource base of commercial banks. The Government of India promulgated the Regional Rural Banks Ordinance on 26th September 1975, which was later replaced by the Regional Rural Bank Act 1976. OBJECTIVES The RRBs have following objectives: To develop rural economy. To provide credit for agriculture and allied activities. To encourage village industries, artisans, carpenters, craftsmen, etc. To reduce dependence of weaker sections on money-lenders. To identify a specific and functional gap in the present institutional structure. To supplement the other institutional agencies in credit delivery to rural areas, To make backward and tribal areas economically better by opening new branches. Every RRBs is authorized to carry on to transact the business of banking as defined in the Banking Regulation Act and may also engage in other business specified in Section 6(1) of the said Act. In particular, a RRB is farmers and agricultural laborers, whether individually or in groups, and to cooperative societies, including agricultural marketing societies, agricultural processing societies, cooperative farming societies, primary agricultural

credit societies or farmers service societies, primary agricultural purposes or agricultural operations or other related purposes, and granting loans and advances to artisans, small entrepreneurs and persons of small means engaged in trade, commerce, industry or other productive activities, within its area its area of operation. The Reserve Bank of India has brought RRBs under the ambit of priority sector lending on par with the commercial banks. They have to ensure that forty percent of their advances are accounted for the priority sector. Within the 40% priority target, 25% should go to weaker section or 10% of their total advances to go to weaker section. CAPITAL STURCTURE Their equity is held by the Central Government, concerned State Government and the Sponser Bank in the proportion of 50:15:35. A Regional Rural Bank is jointly owned by the Govt. of India, the Government of concerned state and public sector bank, which sponsored it. Each bank carries the banking business within the local limits specified by the Govt. Notification. ORGANISATIONAL STRUCTURE The management of a RRB is vested in a nine-member Board of Directors headed by chairman who is an officer deputed by a sponsor bank but appointed by the Govt. of India. Three directors to be nominated by the central Government. Two directors to be nominated by the sponsor bank. The sponser bank, besides subscribing to the capital and deputing one of its official as chairman, provides assistance to RRB in several ways as financial accommodation, deputing managerial and other staff and arranging the recruitment of staff and their training. Role of Regional Rural Banks in Economic Development The importance of the rural banking in the economic development of a country cannot be overlooked. As Gandhiji said Real India lies in villages and village economy is the backbone of Indian economy. Without the upliftment of the rural economy as well as the rural people of our country, the objectives of economic planning cannot be achieved. In fact, the

real growth of Indian economy lied in the emancipation of rural masses from acute poverty, unemployment, and socio-economic backwardness. Keeping this end in view, various important plans and programmes of rural development have been conceived and implemented by the government of India since the commencement of first five-year plan from 1951-56. But an appraisal of the achievement of these programmes clearly reveals that much programmes failed to achieve the desired objectives due to the backward economic condition and lack of adequate finance to the poor people in the rural areas. Hence, bank and other financial institutions are of vital importance for development of rural economy of a country. The present study is a modest attempt to make an appraisal of the credit needs of the rural people and the way Regional Rural meet the same in the state of Arunachal Pradesh. It deals with the performance evaluation of Arunachal Pradesh. Rural Bank (APRB) for the economic development of the state. Further, an attempt has also been made to study the growth and performance of Scheduled Commercial Banks with special emphasis on Regional Rural Banks (RRBs) in India and North-East Region. REGIONAL RURAL BANKS IN INDIA The State Bank of India is one of the major commercial banks having regional rural banks. There are 30 Regional Rural Banks in India, under the State Bank of India and it is spread in 13 states across India. The number of branches the SBI Regional Rural Banks is more than 2000. Several other banks, apart from the state Bank of India also functions as the promoter of rural development in India List of Regional Rural Banks in India There are a number of regional rural banks in India. Following are the statewise list of Indian regional rural banks. Andhra Pradesh Anhra Pradesh Grameena Vikas Bank. Andra Pragathi Grameena Bank. Deccan Grameena Bank. Chaitanya Godavari Grameena Bank.

 Saptagiri Grameena Bank. Arunachal Pradesh Arunachal Pradesh Rural Bank. Assam Assam Grameena Vikash Bank. Langapi Dehangi Rural Bank.

Bihar Madhya Bihar Gramin Bank. Bihar Kshetriya Gramina Bank. Uttar Bihar Kshetriya Gramin Bank. Samastipur Kshetriya Gramin Bank.

Chattisgarh Chattisgarh Gramin Bank. Sutguja Kshetriya Gramin Bank. Durg-Rajnandgaon Gramin Bank. Gujarat Dena Gujarat Gramin Bank. Baroda Gujarat Gramin Bank. Saurashtra Gramin Bank. Haryana Harayana Gramin Bank. Gurgaon Gramin Bank.

Himachal Pradesh Himachal Gramin Bank. Parvatiya Gremin Bank.

Jammu & Kashmir Jammu Rural Bank. Ellaquai Dehati Bank. Kamraz Rural Bank. Karnataka Karnataka Vikas Grameena Bank. Pragathi Gramin Bank. Cauvery Kalpatharu Grameena Bank . Krishna Grameena Bank. Chimagalur-kodagu Grameena Bank. Visveshvaraya Gramin Bank

Jharkand Jharkhand Gramin Bank. Vananchal Gramin Bank. Kerala Narmada Malwa Gramin Bank. North Malabar Gramin Bank. Madhya Pradesh Narmada Nalwa Gramin Bank.

Satpura Kshetriya Gramin Bank. Madhya Gharath Gramin Bank. Chanbal-Gwalior Kshetriya Gramin Bank. Rewa-Sidhi Gramin Bank. Sharda Gramin Bank. Ratlan-Mandsaur Kshetriya Gramin Bank Vidisha Bhopal Kshetriya Gramin Bank. Mahakaushal Kshetriya Gramin Bank. Jhabua Dhar Kshetriya Gramin Bank.

Maharashtra Marathwada Gramin Bank. Aurangabad-Jalna Gramin Bank. Wainganga Kshetriya Gramin Bank. Vidharbha Ksheteiya Gramin Bank. Solapur Gramin Bank. Ratnagiri-Sindhurg Gramin Bank Manipur Manipur Rural Bank Orissa Kalinga Gramina Bank. Utkal Gramina Bank. Baitarani Gramin Bank. Neelachal Gramin Bank. Rushikulya Gramin Bank. Punjab Punjab Gramin Bank. Faridkot-Bhatinda Kshetriya gramin bank. Malw Gramin Bank.

Rajastan Barosa Rajasthan Gramin bank. Marwar Ganganagar Bikaner Gramin Bank. Rajasthan Gramin Bank. Jaipur Thar Gramin Bank. Hodoti Kshetriya Gramin Bank. Mewar Anchakik Gramin Bank.

Tamil Nadu Pandyan Gramin Bank. Pallavan Gramin Bank. Tripura Tripura Gramin Bank. Uttar Pradesh Purvanchal Gramin Bank. Kashi Gomti Samyit Gramin Bank. Uttar Pradesh Gramin Bank. Shreyas Gramin Bank. Lucknow Kshetriya Gramin Bank. Ballia Kshetriya Gramin Bank. Triveni kshetriya Gramin Bank. Aryavart Gramin Bank. Kisan Gramin Bank. Kshetriya Kisan Gramin Bank. Etawah Kshetriya Gramin Bank. Rani Laxmi Bai Ksheteiya Gramin Bank. Baroda Westren Uttar Pradesh Gramin Bank. Devipatan Kshetriya Gramin Bank. Prathama Bank. Barosa Eastern Uttar Pradesh Gramin Bank.

Uttaranchal Uttaranchal Gramin Bank. Nainital Almora Kshetriya Gramin Bank. West Bengal Bangiya Gramin Bank. Paschinm Banga Gramin Bank. Uttar Bangal Kshetriya Gramin Bank.

ANDHRA PRAGATHI GRAMEENA BANK A PROFILE

BRIEF HISTORY OF APGP Andhra Pragathi Grameena Bank was established on 1st June, 2006 after amalgamation if 3 RRBs namely Rayalaseema Bank (estaglished on 06.08.1976),Sree Anantha Grameena Bank (estavlushed on 10.11.1979)and Pinakini Grameena Bank (established on 11.06.1982).These Regional Rural Banks were established under the provisions of RRBs Act,1976 and consequent to the government of India Notification dt.1.06.06,amalgamated. ANDHRA PRAGATHI GRAMEENA BANK Andhra Pragathi Grameena Bank came into existence from 1.06.06 by amalgamating Rayalaseema, sri Anantha Grameena Bank and Pinakini Grameena bank consequent upon the Government 1976, the Bank is constituted under Regional Rural Banks act,1.06.06. India notification dt Nellore and Ananthapur, kurnool districts namely Kadapa 5 of Head Office at Kadapa with a jurisdiction. The Bank is regional offices with its Head quarters at each districts Head Quarters 5 the bank having Prakasham Rural Poor mainly and to all the banks is catering to the need extension counters 3 branches and 360 having. The Bank has been playing a pivotal role in economic development of its operational area by other 9 sectors also. The bank stood first in earning Net Profit as on outreaching the people in the countryside RRBS in the country is characterized by drought and which is mostly black and res of the population in the area lives in country side 74% about backwardness tanks, canals under irrigation sources viz., of the area is

rainfed and farmers depend on rainfed crops 75%about horticultural crops like banana, vegetables, mango sweet orange papaya, tobacco, coriander, sun flower Bengal gram, chillies, cotton the major crops grown are paddy, jower and major crops grown are groundnuts etc., The area is rich in minerals viz., granite, limestone, barites. The important rivers like kundu, penna, hindu, tungabadra, pillaperu and Gundlakamma, are Krishna wing through the Bank. The Government of Andhra Pradesh awarded BEST BANK award on 17.1.07 the bank is on the Government of Andhra(Syndicate Bank) sponser bank of India contributed by the Govt.Rs.300 lakhs additional share capital.

VISION

Placing our organization at the Highest Altitude among the RRBs in the country and making it financially strong, viable, vibrant and an effective proactive instrument of economy of the operational area, through aggressive banking.

MISSION To increase the business in a sustainable manner with consistant efforts and bring all the house holds in the operational area on to banking folds. To fine tune the existing products and design new products and services to match the competition prevailing in the market. To mould the staff of the bank as computer literate and technologically savvy and to achieve hundred percent computerization of branches.

ORGANIZATIONAL STRUCTURE OF THE BANK Andhra Pragathi Grameena Bank has an extensive administrative structrure to oversea the large network of branches in A.P. The Head Office is in kadapa and the bank has a network of 340 branches, comprising of 237

rural, 75 semi-urban and 28 urban branches 10 satellite offices and 9 extension counters. DECESION MAKING PROCESS There is a well defined system in the bank regarding the decision making products. Financial decision are taken at various levels by different officials depending upon their position and also through committee approach centralized credit processing cells are being forms at certain centres for sanction of personal segment loan and loans under APGB segment branches will source the applications and forward them to the respective credit processing cells, for their consideration. Further, there is a well defined organizational structure and a clear system of accountability and control system, which also take into account the RBI guidelines. THE ROLE OF THE BRANCH MANAGER The APGB Branch Manager position reflected the autonomy of the branch. The Branch manager exists to lead all aspects of the customer relationship. This person is the face of the bank, even if the fulfillment of the product for service is largely done elsewhere. The role requires a variety of still sets including sales, training, analysis and delivery. The focus is on the customer, not the running of the business, which follows enterprises processes and standards. In a branch manager encompassed all these areas and more. He was responsible for salaries, administration and submission of returns, human resources, marketing, financial and managerial accounting and so forth. Servicing the customer was only one of many functions for the branch manager, APGB wanted to change. In many cases, staff member had multiple roles, which limited their ability to focus on the customer and divided the attention of the branch manager. PRODUCTS & SERVICES DEPOSITS Deposit Products 1. SAVING BANK ACCOUNT:

A. Account can be opened by Individuals singly or jointly Professionals in their individual names. Clubs, Associations, charitable trusts, Religions Institutions. B. Rate of Interest: 3.5% per annum. C. Other facilities available: Issue of cheque book Nomination facility

2. PRAGATHI JANATHA SAVINGS BANK ACCOUNT: A. Eligibility to open the account: Except Institution, Associations, Trusts, Clubs, Societies, all Individuals can open this account, following the extant KYC norms. B. Initial/minimum balance: Zero balance C. Rate of interest: As per SB deposit (3.5% P.A at present) D. Service charges: No service charges for non-maintenance of balance 3. CURRENT ACCOUNT: A. Eligibility to open the account: Businessmen, Companies, Industries, Associations who have occasion to receive and pay amount in cash/Cheque quite often. These accounts are to be operated by Cheques only. Minimum initial deposits: Rs.3000/- in urban semi-urban/ECs Rs.1000/- in rural branches Interest: No interest (As per RBI guidelines) Service Charges For non-maintenance of minimum balance Rs.50/- per month.

 Cheque leave charge Rs.3/- per cheque leaf while issuing cheque book; Ledger folio charges: Rs.60/- per folio. 4. FIXED DEPOSIT (FD) ACCOUNT: Eligibility to open: An Individual Jointly with one or more persons Guardian on behalf of minor Partnership firms, Companies, Associations, Clubs, Charitable Institutions, Trusts etc. Minimum amount of deposit: Rs.500/- and in multiples of Rs.1/thereof. Period: Minimum 7 days and maximum 10 year, 7 days to 14 days period of deposit is applicable to FDs of Rs.10.00 lakhs and above. Interest: Card interest rates applicable to term deposits (interest rate vary depending on he period of deposit) Loan facility: Loan facility against the deposit is available. Other facilities: o Nomination facility o Premature closing of deposit o Overdue deposits-renewals 5. PRAGATHI CASH CERTIFICATE: D. Eligibility to open: As furnished in Fixed Deposit account scheme. E. Minimum amount of deposit: Minimum of Rs.500/- and in multiple of Rs.100/- thereof F. Period: 12 months to 120 months (in completed quarters 12, 15,18 so on) G. Interest rate: Card Interest applicable to term deposits (interest rate varying depending on the period of deposit. Interest will be compounded quarterly and credited to the account on quarterly basis) H. Nomination facility available. NOTE: All other business rules as applicable to Term deposits.. 6. AKSHYA DEPOSIT (AD):

Special features: Interest on the deposit will be paid on monthly basis/intervals on the discounted value, to meet the monthly requirement of funds by a depositor.
I. Eligibility to open: As furnished in fixed deposit scheme. J. Minimum amount: Minimum deposit Rs.500/- and in multiple of

Rs.100/- there on. K. Period: 12 months to 120 months, in completed quarters i.e. 12,15,18,21 so on. L. Interest: Card interest applicable to term deposits, Interest shall be calculated and payable at monthly intervals. M. Nomination: Nomination facility is available. N. Others: If customers desires, interest earned can be re-invented in Recurring Deposit. All other business rules as applicable to Fixed Deposit Scheme are equally applicable 7. RECURRING DEPOSIT (RD): This deposit scheme is suitable for salaried persons and other persons who receive monthly income. Deposit shall be made in equal monthly instalments. O. Eligibility to open: Individuals, Singly or Jointly. Guardian on behalf of Minors. P. Minimum amount: Rs.50/- month and in multiples of Rs.10/- thereof. Q. Period: 1 to 10 years R. Interest: As applicable to fixed deposits/term deposits. All other business rules as applicable to Fixed Deposit Scheme are equally applicable 8. NITYA NIDI DAILY DEPOSIT: This deposit scheme is more suitable and useful to the depositors who deal with small business units, service sector and earn money daily. The Banks agent will visit their houses/business place to collect the deposit amount. Minimum amount of deposit is Rs.10/- and in multiples of Rs.5/- there after

 Period of deposit is 63 months Loan facility available against this deposit. Interest rate applicable to NND Deposit scheme. 9. PRAGATHI TAX SAVER DEPOSIT: This deposit scheme is introduced on the lines of the Central Government Notification on bank term deposit scheme 2006 for the purpose of sec.80c(2) (XXI) of the Income Tax Act. The amount deposited under this scheme is eligible to claim exemption ( upto Rs.1,00,000/-) under sec.80C of IT Act 1961. W. Eligibility to open: Individuals, Singly or Jointly HUF are eligible to open the account. X. Minimum amount: Rs.100/- and multiples there of upto a maximum of Rs.1.00 lakhs in a financial year. Y. Period: Five years only. Z. Rate of Interest: As applicable to the fixed deposit/term deposits of 5 years period. Lock in period: The deposit can not be closed prematurely before completion of five years period. Loan facility: Deposits under this scheme are not eligible for pledge to secure loan or as security to any loan. Nomination facility available. BUSINESS HIGHLIGHTS AS ON 31.12.2009 Andhra Pragathi Grameena Bank occupied No.1 position among 5 RRBs in Andhra Pradesh with 360 branches in 5 districts. Viz., Kadapa, Anantapur, Kurnool, Nellore and Prakasham districts. The net profit of the Bank for the half year ended 30.09.09 is Rs.137.94 crores. Total business crossed Rs.666.91crores. Deposits crossed Rs.3159.72 crores, The average deposits of the Bank increased by Rs.25crores with a growth rate of 18.72% over the previous year.

 Advances crossed Rs.3406.19 crores. The average advances increased by Rs.322.00 crore with a growth rate of 12.70% over the previous year. Bank has customer base width 32.06 lakhs deposit accounts and 14.32 lakhs borrowed accounts. Priority sector4 advances reached to a level of Rs.2616.05 crore, constituting 36/80% of priority Sector advances. 414183 Kisan Credit Card accounts are outstanding with a loan amount of Rs.1311.56 crore. Actively participated in the scheme of achieving 100% Financial Inclusion in all the 5 districts-Kadapa, Kurnool, Anantapur, Nellore and Prakasam. Bank has computerized all its 360 branches with Total Branch Mechanisation and 98% of its business is computerized. The highest number of 7.28 lakh Pragathi Janatha Zero Balance SB accounts are opened under total Financial Inclusion.99475 SHGs loan account are outstanding with loan amount of Rs.723.11 crores. Provided additional financial assistance to the SHGs under the special Dairy Development Project. 316 Farmers Clubs (including 45 women Farmers Clubs) are functioning. During the year 46 new Farmer Clubs are opened. Per branch business and Per-employee business stood at Rs.18.23 crores and Rs.3.58 crores respectively. Opened 4 new branches by upgrading the extension counters during the half year. FUTURE PLANS The Bank is aiming to cross the following mile-stones in the present year (2009-10). Achieve a business level of Rs.7500 crores. Planning to open 10 more branches during the current year in the area of\operation of the bank in tune with the policy of Govt. of India. Aiming to convert to CBS platform from TBM for online facility and also for introduction of ATMs to provide the best customer service. Planning to enter into Government Agency transactions during the current financial year. We are hopeful of achieving the set goals in the present year (200910) with the cooperation of one and all, more particularly the clientele

of the Bank and Government Agencies. We thank the media both print and electronic for their cooperation in projecting the image of out bank in gook stead.

METHODOLOGY AND

MODEL OF RESEARCH

INDUSTRY PROFILE Rural Bank in India was started since the establishment of banking sector in India. In these days Regional Rural Banks (RRBs) mainly focused upon the agro sector. Rural Bank in India penetrate every corner of the country and extended helping having in the country. The government of India setup Regional Rural Bank on October 2nd 1975 the bank provide credit to the weaker section of the rural area, particularly the small and marginal former, agricultural labour, artisans and small enterprises. Initially, 5 RRB set up on October 2nd 1975, which were sponsored by syndicate Bank, SBI, Punjab National Bank, United Commercial Bank and United Bank of India. The total authorized capital was fixed at Rs.5 Crores. There are several concessions enjoyed by RRBs such as low interest rate refinancing facility from NABARD like lower Cash Ratio, Lower Statutory Liquidity Ratio, Lower rate of interest in loan taken from sponsoring bank. COMPANY PROFILE Andhra Pragathi Grameena Bank established on 1st June 2006 after amalgamation of 3Regional Rural Banks namely Rayalaseema Grameena

Bank. Anantha Grameena Bank and Pinakini Grameena Bank. This Regional Rural Banks Act, 1976 and consequent to the Government of India noitification dated 1st June 2006 were amalgamated and formed as a new entity called APGB with its Head Office, Kadapa. This bank is operating in kadapa, Anantapur, Kurnool, Nellore and Prakasham district of Andhra Pradesh having tegional office in each district head quarters. The bank is catering to the needs of rural poor, covering agricultural, small industry and village small business besides catering to the needs of non-priority sector also. The bank is having a total business of Rs.6,120.04 crores on 31st March 2009. The bank is assisting the Self Help Groups(SHGs) in a massive way and financed to more that 89.252 SHGs with outstanding SHG advances of Rs.635.19 crores. The bank is progressing with all round development and introducing new products to cater the needs of the people in its service area. STATEMENT OF THE PROBLEM Banks are the main financial sources to the public. They are the providers and mobilisers of the finance from the public. But they are facing different problems such as dissatisfaction of customer regarding banking services, improper cash management financial performance and the like. Among these problems faced by RRBs Cash management is very important technique to be adopted in any bank. Hence ,this study concentrate on cash flow analysis of APGB in Kadapa district. OBJECTIVES OF STUDY The main intension of this study is to analyze the financial position of the Andhra Pragathi Grameena Bank. The following are the main objectives for the study: To measure the profitability and liquidity position in the organization. To evaluate the cash position of the bank through cash flow analysis. To analyze total cash deposits, loan syndication position of the bank To elicit the sources of cash income and cash payments.

NEED FOR THE STUDY It is the common obligation to every financial institution to know its strengths and weaknesses. Though the company has several departments, the under researched area is finance. But there is less number of studies have been conducted on the cash flow analysis in Andhra Pragathi Grameena Bank,kadapa. District in A.P. So, the study is needed to help the bank for its smooth financial transactions with effectively. RESEARCH METHODOLOGY AND DESIGN There are five main branches in Andhra Pradesh one in Kadapa, one in Prakasham District, one in Kurnool district, one in Ananthapur district, one in Nellore district. The Head Office located in Kadapa, district and it has various branches through out the district. Among all these branches, the selected branch is Andhra Pragathi Grameena Bank is located in Kadapa district in Andhra Pradesh. The executives and financial department officials are enquired for the purpose of the study. The study is mainly based on the analytical research design. This largely interprets the already available information. DATA SOURCES The data for the present study is collected through primary and secondary sources. Secondary data is obtained from annual reports of the company and primary data was collected by interacting financial executives of he company. Primary Data The primary data of this study was colleted by consulting the accounting officer, financial Executives of that bank. Secondary Data The study is mainly based on the sources of secondary data. The secondary data for this study was collected from the published sources i.e., annual reports and WWW.APGBANK.COM SCOPE OF THE STUDY

The present study is confined to only Andhra Pragathi Grameena Bank in Kadapa. The study is limited to cash flow analysis and it has been analyzed by taking the information related to both the present and past data into consideration with reference to the performance of the bank. PERIOD OF STUDY The period of the study is confined to four years i.e. from 20052006 to 2008-2009. TOOLS FOR THE STUDY The data relating to the performance of he Andhra Pragathi Grameena Bank from different activities that is operating activities, investing activities and financing activities have been carefully analyzed and also cash flow statement, column and bar charts. LIMITATIONS OF STUDY The major limitations of the study are: Due to constraint of time, the researcher unable to collect detailed analysis of the financial data. There are differences in collected data as of data collected from different secondary sources. Finance is also an important constraint for the detailed analysis.

CASH FLOW ANALYSISA REVIEW

INTRODUCTION An analysis of cash flow of a concern during a specified period, presented in the form of a statement can be for the past or can be a projection for the past or can be projection for the future. The cash flow of the concern in the near future, say for a period of six months or in year, can be prepared based on the past trends and expectations of the concern regarding factors that would affect its cash receipts and cash payments. Such an estimate of future cash flows is better termed cash budget. Cash flow statement generally refers to the statement showing the receipts and payment or cash during the period covered by two consecutive balance sheet. Cash flow analysis enables the management to plan and co-ordinate the financial operations of the enterprise, an furnish the basis for evaluating financing policies. It provides a barometer for ensuring the profitabililty of the business, and makes financing problems of the business much more manageable. CASH FLOW MANAGEMENT Cash flow management is the process of monitoring, analyzing, and adjusting businesss cash flows. The most important aspect of cash flow

management is avoiding extended cash shortages, caused by a time gap between cash inflows and outflows. Firm cannot stay in business if it is not able to pay its bills on time. Therefore, a cash flow analysis is required on as regular basis so that so that it can take the necessary steps to meet cash flow problems. Today, even in the large business organizations cash is mot as readily available as it was before, so companies are looking into ways to gain better visibility into future cash flows and to monitor it for better planning. There is a growing need for companies to forecast more accurately because in addition to tightened cash flow, there is an increasing need for timely forecasts as market conditions have become volatile. One of the best way to manage cash in the business is to fully understand cash flow patterns. These helps a firm in avoiding cash deficiencies as well as excessive idle cash balances. Moreover, cash flow analysis is needed: To ensure that the cash balance always remains above the desired minimum level To predict when cash levels will rose sufficiently above the minimum level to facilitate investment of idle balances. GEORGE PHILIPATOS is of the view that, in its generic sense, a cash flow is the receipt and the payment of amount of money and that it implies more than our accrual or a financial obligation, hence cash flow is a movement of cash which is a real one. L Leon Simons observes that cash flow is frequently and erroneously assumed to include only current operations. CASH FLOW CONCEPTS In its simplest form, cash flow is the movement of money in and out of the business uses cash to generate goods or services for the sale to its customers, collects the cash from the sales, and then completes this cycle all over again. CASH INFLOWS Cash Inflows are the movement of money into the business. Inflows are most likely from the sale of goods or services to the customers. If credit extended to its customers, then an inflow occurs as the firm collects on the customers accounts. Normally the main sourced of cash inflows to a business are receipts from sales,

increases in bank loans, proceeds if share issues and asset disposals, and other income such as interest earned. CASH OUTFLOWS Cash Outflows are the movement of money out of the business. Outflows are generally the result of paying expenses. If the business involves reselling goods, then its largest outflow is of the purchases of raw materials and other components needed for the manufacturing of the final product. Salaries and wages to staff, purchasing fixed assets, and paying accounts payable are also cash outflows. NET CASH FLOWS Net Cash Flow is the difference between the inflows and outflows within a given period. A projected cumulative positive net cash flow over several period highlights the capacity of a business to generate surplus cash and, in the same manner, a cumulative negative cash flow indicates he amount of additional cash required to sustain the business. FREE CASH FLOWS Some financial analysts give much importance to concept of cash flow called Free Cash Flow. The cash is considered free if it can be used for any desirable purpose. The large is the amount, the more a firm has flexibility and investment strength because it can use the money immediately to take advantage of an opportunity. The accumulation of free cash comes from free cash flows which are calculated as cash flow from operations, less capital expenditure for ongoing production needs and payment of dividends. Free cash may be accumulating in liquidity but it is not intended to be used for financing working capital requirement. Instead, it is used for longterm purposes such as capital budgeting expenditure on asset, mergers, acquisitions etc. DEFINITIONS: The following are used in this statement with the meaning specified:

Cash comprises cash on hand and demand deposits with banks Cash equivalents are short-term highly liquid investments, that are readily convertible into know amounts of cash and which are subject to an insignificant risk of changes in value. Cash flows are inflows and outflows of cash and cash equivalents. Operating activities are the principal revenue-producing activities of the enterprise and other activities and are not investing or financing activities. Investing activities are the acquisition and disposal of longterm assets and other investments not included in cash equivalents. Financing activities are activities that result in changes in the size and composition of the owners capital (including preference share capital in the case of a company) and borrowings of the enterprise. CLASSIFICATION OF CASH FLOWS The model prescribed in AS-3, Cash Flow Statement, classifies cash flow into three categories cash flow from operating activities, cash flow from investing activities, cash flow from financing activity. CASH FLOW FROM OPERATING ACTIVITIES The statement provides information about the cash generated from a companys primary operating activities. A companys operating activities services. Operating activities that generate cash inflow include customer other operating cash receipts. Operating activities that create cash outflows include payments to suppliers, payment to employees, interest payments, payment of income taxes and other operating cash payments. CASH FLOWS FROM INVESTING ACTIVITIES This area lists all the cash used or provided by the purchase on sale of income producing assets. Investing activities include giving loans and advances, collection from those loans and advances, buying and selling

and buying and selling securities not classifies as cash equivalents. Cash inflows generated by investing activities include sales of fixed assets such as property, plant, equipments, sale of debt/equity instruments and the collection of loans. CASH FLOWS FROM FINANCING ACTIVITIES This section measures the flow of cash between a firm and its owners and creditors. Financing activities include borrowing and repaying funds from suppliers of funds, a return on their investments. The return on investment is provided in the form of dividends and interest. If the firm uses debt or equity to expand its operations, it is disclosed in the financing activities. Also, if the firm uses cash to retire debt, it appears in the statement. Negative numbers can mean the company is servicing debt bur can also mean the company is making dividend payments and share buyback, which is good news for investors.

CASH FLOW STATEMENT In a business in a perfect world there is no time gap between a cash inflow and a cash outflow. But in real world, cash outflows and inflows occur at different times, and never actually occur together. Usually, cash inflows lag behind the cash outflows, leaving the business short of cash. This shortage is termed as cash flow gap. The cash flow gap represents and excessive outflow of cash that may not be covered by a cash inflow for a definite period of time say a few weeks, few months, or even few years. Managing the cash flow allows a firm to bridge the cash flow gap. It does this by examining the different items that affect the cash flow of the business. The cash flow statement provides information regarding a companys cash receipts and cash payments. The statement complements the profit & Loss Account and Balance Sheet. Over the life of a company, total net profits or income and net cash inflow will equal.

All companies provide the cash flow statements as part of their financial statements, but cash flow can also be calculated net income plus depreciation and other non-cash items. A company not generating the same amount of cash as competitors is bound to lose out when there are difficult times. Short-term liquidity can also be achieved by deferring payments of current obligations; however, companys ability to generate cash flow through the deferred payments of current liabilities will be exhausted. This statement is useful for decision making because it provides relevant and reliable information for predicting future cash flows. The cash flow statement is an important analytical tool that the trade creditor, can use to determine if a customer is able to generate sufficient cash to meet its trade obligations. Using the cash flow statement in the credit analysis process can help to users evaluate a customers solvency, liquidity position, and its financial flexibility. In the cash flow statement, cash receipts and payments are classifies as operating, investing and financing activities. The cash flow statement explains the change during the period in cash and cash equivalents. Cash equivalents are short-term, highly liquid investments that are readily convertible to cash. The cash flow statement must summarize the cash flows so that net cash provided or used by each of the three types of activities is reported. Beginning and ending cash must be reconciled based on the net effect of these activities. STEPS IN PREPARATION OF CASH FLOW STATEMENT Before preparing cash flow statement, first of all, the following three steps have to be completed Determining cash flows from operations or operating activities Determining cash flows from investing activities. Determining cash flows from financing activities. Cash from operation

The profit and loss account focuses on net income determination from operating activities. However, it does not show cash inflow and outflow relating to operating activities because the profit and loss account is prepared on accrual basis. In preparing profit and loss account, revenues are recorded even though cash for them has not been received. Similarly, expenses are recorded even though they may not been paid. Therefore, to find cash flows from operations, one need to convert accrual basis income statement figures to cash basis making adjustments. By way of adjustments, earned revenues will be converted into cash received from sales or customers and incurred expenses will be converted into cash expended, i.e., expenses actually pain to cash. Reporting Cash Flows from Operating Activities: An enterprise should report cash flows from operating activities using either: Direct method: the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed; or Indirect method: The indirect method, whereby net profit or loss is adjusted for the effects of transaction of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses 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:

From the accounting records of the enterprise; or By adjusting sales, cost of sale (interest and similar income expenses and similar charges for a financial enterprise) and other items in the statement of profit and loss for: Changes during the period in inventories and operating receivable and payable. Other non-cash items and 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: Changes during the period inventories and operating receivable and payables; Non-cash items such as depreciation, provisions, deferred taxes, and unrealized foreign exchanges gains and losses and 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 changes during the period in inventories and operating receivables and payables. 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. Example of cash flows arising from investing are: Cash payments to acquire fixed assets (including intangible). These payments include those relating to capitalized research and development cost and self-constructed fixed assets. Cash receipts from disposal of fixed assets. Cash payments to acquire share. Warrants or debt instruments of other enterprises and interests in joint ventures. Cash receipts from disposal of shares, warrants or debt instruments of other enterprises and interests in joint ventures. Cash advances and loans made to third parties. Cash receipts from the repayment to advances and loans made to third parties. Cash payments for futures contracts, forward contracts and swap contracts except when the contracts are held for dealing or trading purposes or the payment are classified as financing activities and Cash receipts from futures contracts, forward contracts, option contract, 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 flow arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of funds to enterprise. Examples of cash flows arising from financing activities are: Cash proceeds from issuing shares or other similarly instruments; Cash proceeds from issuing debentures, loans, notes, bonds, and other short of long-term borrowings, and cash repayments of amounts borrowed USES OF CASH FLOW STATEMENT A cash flow statement is an important financial tool for management efficient short-term financial planning. It enables the management to plan and co-ordinate the financial operation of the concern and furnish the basis for evaluating financing policies. It helps the management in making the financing problems of the business much more manageable. The following are the uses of cash flow analysis. Helpful in efficient cash management: It is very helpful in understanding the cash position of a firm. Since cash is the basis for carrying on business operations, the cash flow statement is very useful in evaluating the current cash position. Planning of Programmes: The repayment of loans, replacement of assets and other such programmes can be planned on its basis. Helpful in short-term financial decisions: The cash flow statement is helpful in making short term financial decisions relating to liquidity, and the ways and means position of the firm. Useful of Capital budgeting: Cash flow statement is also useful for making appraisal of different capital investment projects in order to determine their viability and profitability.

Useful as a control device: It helps the management to understand the past behavior of the cash cycle, and to control the uses of cash in future. A comparison of the projected cash flow statement helps to management in appraising the inflows and outflows of cash according to the plan and taking the necessary remedial measures. Useful to outsiders: Cash flow statement the short-term solvency of a business concern as well as its capacity to meet its short-term obligation.

LIMITATIONS OF THE CASH FLOW STATEMENT Cash flow statement has its limitations too. For example, cash flow does not reveal the profit earned or lost during a particular period. Cash flow also does not indicate the overall financial health of the company. Though, the statement of cash flow gives a good indication of what the company is doing with its cash and from where cash is being generated, but these do not directly reflect true financial condition. The cash flow statements does not account for liabilities and assets, which are recorded in the balance sheet. Accounts receivable and accounts payable, each of which can be very large for a company, are also not reflected in the cash flow statement. In other words, it is a compressed version of the companys cashbook that includes a few other items, like the financing section, which tells the amount of money the company sent or collected from the repurchase or sale of stock, the amount of issuance or retirement of debt, and the amount the company paid

out in dividends. In conclusion, interpreting the cash statement is not a very easy and simple task. Analyzing the cash flow together with the other statement gives a glimpse into the short-term financial position of company.

DATA ANALYSIS AND IMPLEMENTATION

NET CASH FLOW The total cash flow can be calculated by adding operating, investing and financing activities of the bank. Total cash flow = operating + financing + investing activities The total cash flow is being described in the table per the period of 4 years from 2006-2009 TOTAL NET CASH FLOW Year ended Operating activities Investing activities Financing activities Total

2007 2008 2009 2010

NA -297215 812341 222713

NA -48555 -55114 -22309

NA 1617299 365274 3889899

NA 1271529 1122501 4090303

NET CASH FLOW

4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0

Total

2006-07

2007-08

2008-09

2009-10

Interpretation: This can be calculated by taking total operating, investing and financial activities. This shows that in the year 2010 the total cash flow will be increased from Rs.1271529 to Rs.4090303. This shows that the bank had spent fewer amounts for expense.

TOTAL OPERATING ACTIVITIES: The total operating activities can be calculated by taking the values of increased/decreased in assets and liabilities. This can be shown in the table for the period of 4 years from 2006-2010. TOTAL OPERATING ACTIVITY

Year 2007 2008 2009 2010

Liabilities NA 5753229 1230756 4816891

Assets NA -6975957 -957323 -5693718

Total Operating Income NA -1222728 273433 -876827

TOTAL OPERATING ACTIVITY

400000 200000 0 -200000 -400000 -600000 -800000 -1000000 -1200000 -1400000 2006-07 2007-08 2008-09 2009-10 Total Operating Income

Interpretation There can be calculated by taking net profit minus increase/decrease assets and liabilities. This shows that in the years 2008 and 2010, negative values will occur. For this purpose, there is a mutual increase and decrease in assets and liabilities.

Total investing activities: This can be calculated by taking the difference between the cash inflow and outflow. Investing activity = Cash Inflow Cash Outflow

Total Investing Activity Year ended 2007 2008 2009 2010 Cash Inflow NA 1337 2261 3680 Cash Outflow NA -49892 -57375 -25989 Total investing income NA -48555 -55114 -22309

TOTAL INVESTING ACTIVITIES

10000 0 -10000 -20000 -30000 -40000 -50000 -60000 2006- 2007- 2008- 200907 08 09 10 Total Investing Income

Interpretation: This can be calculated by taking Cash inflow and Cash Outflow. This shows that the bank has spent fewer amounts for purchasing the assets, so there is a decrease in 2009-10 when compared to 2007-08.

Total Financing Activities

In this activities can be calculated by taking the financial activity. This can be show in the table for the year 2006-2010. Year 2007 2008 2009 2010 Borrowings NA 1617299 365274 3889899 Total financing income NA 1617299 365274 38889899

40000000 35000000 30000000 25000000 20000000 15000000 10000000 5000000 0 2006-07 2007-08 2008-09 2009-10 Total financing income

Interpretation: This graph shows that the bank borrowing position. This shows that the bank had decreased to money from others. So the position is good in the bank.

TOTAL BUSINESS:

This can be calculated by taking the total borrowings and total advances. Total Business: Year 2007 2008 2009 2010 Borrowings 23678077 28120957 30377076 35173369 Advances 23471454 29373177 30440335 35052791 Total business 47149531 57494104 60817413 70226160

80000000 70000000 60000000 50000000 40000000 30000000 20000000 10000000 0 2006-07 2007-08 2008-09 2009-10 Total Business

Interpretation: This shows that the total business of a bank is good because there is continuously increase in each year from 2007-2010 i.e., The borrowing and advances will continuously good.

Net profit:

The net profit can be calculated by taking total income and total expenses. Net profit = Total income Total expenses Total income = Interest expended + other expenses Net profit: Year 2007 2008 2009 2010 Total income 3068139 3485951 4199342 4876858 Total expense 2192025 2557464 3439788 3809979 Net profit 876114 904909 759554 1066879

1200000 1000000 800000 600000 400000 200000 0 2006-07 2007-08 2008-09 2009-10 Net Profit

Interpretation: This can be calculated by taking total income and total expended. This shows that the bank can earn more profit in 2008 and 2010. This shows that the bank can spend more expenses in that years and the profit position will be decreased.

APPENDICES

Particulars A CASH FLOW FROM OPERATING ACTIVITIES Interest Earned during the year Other income Less: Interest paid during the year on deposits, borrowings etc., Operating Expenses including Provision & Contingencies NET PROFIT Add: Depreciation on Fixed Assets Depreciation adjusted on leased assets Provisions & Contingencies I CASH PROFIT GENERATED FROM OPERATIONS (Prior to changes in operating Assets & Liabilities II CASH FLOW FROM OPERATING ASSETS & LIABILITIES Increase/(Decrease) in Liabilities Deposits Other Liabilities and Provisions (Increase)/Decrease in assets Advances Investments Other Assets Total of II A. NET CASH FLOW FROM OPERATING ACTIVITIES(I+II) B. CASH FLOW FROM INVESTING ACTIVITIES

For the year ended (31/3/2008) 3175171 310780 1607363 973680 20605 925513

4442850 1310379 -5901723 -741844 -332390 -1222728 297215

B. C.

C. I

II

STATEMENT OF CASH FLOW Sale/Disposal of Fixed Assets Purchase of Fixed Assets NET CASH FLOW FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Share Capital Share premium Other Reserves & Surplus Borrowings Amount paid off on redemption of sub-ordinated debt Amount raised through fresh issue of Sub-ordinated Debt Dividend paid: Previous year dividend, paid during the current year NET CASH FLOW FROM FINANCING ACTIVITIES TOTAL CASH FLOW DURING THE YEAR (A+B+C) Increase/(Decrease) in Cash flow Cash and Cash Equivalents at the Beginning of the year C) Cash and Balances with the RBI D) Balances with Banks and Money at Call and Short Notice Total I CASH AND CSH EQUIVALENTS AT THE END OF THE YEAR C) Cash and Balances with RBI D) Balance with Banks and Money at Call Short Notice Total II TOTAL CASH FLOW DURING THE YEAR Increase / (Decrease) in Cash flow (II I)

1337 -49892 -48555

1617299

1617299 1271529 1680083 2522384 4202467 2407030 3066966 5473996 1271529

BALANCE SHEET AS AT 31.03.2009 Particulars BALANCE SHEET (Amount in 000s) Capital and Liabilities Share capital Reserve and surplus Deposits Borrowing Other liabilities and provision Total Assets Cash and Balance with RBIs Balance with banks and money at call and short notices Investments Net advances Fixed assets Other assets Total Contingent liabilities 2007-08

(Amount in 000s) 2008-09

423426 4191468 23678077 5935922 1419557 35648450 1680083 2522384 6020381 23471434 52032 1902116 35648450 103999

423426 5096376 28120927 7553221 2729936 43923886 240730 3066966 6762225 29373177 79982 2234506 43923886 155023

Profit and Loss Account Particulars 2007-08 Income Interest Earned 2808486 Other income 259653 Total 3485951 Expenditure Interest expended 1150059 Operating Expenses 985922 Provision and 56044 Contingencies Profit 876114 Total 3485951 2008-09 3175171 310780 3068139 1607363 950101 23578 904909 3068139

STATEMENT OF CASH FLOW Particulars A CASH FLOW FROM OPERATING ACTIVITIES Interest Earned during the year Other income Less: Interest paid during the year on deposits, borrowings etc., Operating Expenses including Provision & Contingencies NET PROFIT Add: Depreciation on Fixed Assets Depreciation adjusted on leased assets Provisions & Contingencies I CASH PROFIT GENERATED FROM OPERATIONS (Prior to changes in operating Assets & Liabilities II CASH FLOW FROM OPERATING ASSETS & LIABILITIES Increase/(Decrease) in Liabilities Deposits Other Liabilities and Provisions (Increase)/Decrease in assets Advances Investments Other Assets Total of II A NET CASH FLOW FROM OPERATING ACTIVITIES(I+II) . B. CASH FLOW FROM INVESTING ACTIVITIES For the year ended (3/31/2009) 3876666 322676 2224977 1214811 759554 29354 -250000 538908

2256149 -1025393 -1067158 -630611 740446 273433 812341

B. C.

C. I

II

Sale/Disposal of Fixed Assets Purchase of Fixed Assets NET CASH FLOW FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Share Capital Share premium Other Reserves & Surplus Borrowings Amount paid off on redemption of sub-ordinated debt Amount raised through fresh issue of Sub-ordinated Debt Dividend paid: Previous year dividend, paid during the current year NET CASH FLOW FROM FINANCING ACTIVITIES TOTAL CASH FLOW DURING THE YEAR (A+B+C) Increase/(Decrease) in Cash flow Cash and Cash Equivalents at the Beginning of the year C) Cash and Balances with the RBI D) Balances with Banks and Money at Call and Short Notice Total I CASH AND CSH EQUIVALENTS AT THE END OF THE YEAR C) Cash and Balances with RBI D) Balance with Banks and Money at Call Short Notice Total II TOTAL CASH FLOW DURING THE YEAR Increase / (Decrease) in Cash flow (II I)

2261 -57375 -55114

365274

365274 1122501 2407030 3066966 5473996 1872135 4724362 6596497 1122501

BALANCE SHEET AS AT 31.03.2010 Particulars Capital and Liabilities Share capital Reserve and surplus Deposits Borrowing Other liabilities and provision Total Assets Cash and Balance with RBIs Balance with banks and money at call and short notices Investments Net advances Fixed assets Other assets Total Contingent liabilities 2008-09 423426 5096376 28120927 7553221 2729936 43923886 240730 3066966 6762225 29373177 79982 2234506 43923886 155023

(Amount in 000s) 2009-10 423426 6672809 35173369 11808394 1725141 55803139 2511725 8175075 8926999 35052791 95390 1041159 55803139 116768

Profit and Loss Account Particulars 2008-09 Income Interest Earned 3175171 Other income 310780 Total 3068139 Expenditure Interest expended 1607363 Operating Expenses 950101 Provision and 23578 Contingencies Profit 904909 Total 3068139 2009-10 4463958 412900 4876858 2442690 1165992 201297 2148449 4876858

STATEMENT OF CASH FLOW Particulars A CASH FLOW FROM OPERATING ACTIVITIES Interest Earned during the year Other income Less: Interest paid during the year on deposits, borrowings etc., Operating Expenses including Provision & Contingencies NET PROFIT Add: Depreciation on Fixed Assets Depreciation adjusted on leased assets Provisions & Contingencies I CASH PROFIT GENERATED FROM OPERATIONS (Prior to changes in operating Assets & Liabilities II CASH FLOW FROM OPERATING ASSETS & LIABILITIES Increase/(Decrease) in Liabilities Deposits Other Liabilities and Provisions (Increase)/Decrease in assets Advances Investments Other Assets Total of II A NET CASH FLOW FROM OPERATING ACTIVITIES(I+II) . B. CASH FLOW FROM INVESTING ACTIVITIES For the year ended (3/31/2010) 4463958 412900 2442690 1367289 1066879 32661 1099540

47962993 20598 -4612456 -1534163 452901 -876827 222713

B. C.

C. I

II

Sale/Disposal of Fixed Assets Purchase of Fixed Assets NET CASH FLOW FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Share Capital Share premium Other Reserves & Surplus Borrowings Amount paid off on redemption of sub-ordinated debt Amount raised through fresh issue of Sub-ordinated Debt Dividend paid: Previous year dividend, paid during the current year NET CASH FLOW FROM FINANCING ACTIVITIES TOTAL CASH FLOW DURING THE YEAR (A+B+C) Increase/(Decrease) in Cash flow Cash and Cash Equivalents at the Beginning of the year C) Cash and Balances with the RBI D) Balances with Banks and Money at Call and Short Notice Total - I CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR C) Cash and Balances with RBI D) Balance with Banks and Money at Call Short Notice Total II TOTAL CASH FLOW DURING THE YEAR Increase / (Decrease) in Cash flow (II I)

3680 -25989 -22309

3889899

3889899 4090303 1872135 4724362 6596497 2511725 8175075 4090303

FINDINGS

FINDINGS

The major findings and conclusions of the study are:

of the bank Income is increased from Rs.34,85,951 to Rs.41,99,342 thousands. So, the maintenance is good in the bank. Interest on deposits and borrowings and other expenses also increased from 2008-09 to 2009-10 Rs.25,81,043 to Rs.34,39,788 thousands. So, it pays more interest to the depositors. Net profit of bank is increased in the study period that is Rs.20,605 to Rs.29,354 thousands Investment is also decreased from year to year i.e., Rs.7,41,844 to Rs.6,30,611 thousands. Advances also decreased from Rs.59,01,723 to Rs.10,67,158 thousands. Total cash flow from operating activities is Rs.12,22,728 to Rs.2,73,433. The bank can purchase the fixed asset and they are increased from Rs.49,892 to Rs.57,375 crores and the sale of asset will be increased from Rs.1,337 to Rs.2,265 thousands so the investing activity will be increased from previous year to current year. Financing activities will be maintained in a good way that is Rs.16,17,299 to Rs.3,65,274 thousands. The maintenance of cash and balance with RBI from opening and ending of the year will be good. So, the maintenance of cash from opening and closing is increased from Rs.42,02,467 to Rs.54,72,996 in 2008-09 and Rs.5,47,399 to Rs.65,95,497 in 2009-10.

SUGGESTIONS

SUGGESTIONS

The following are the suggestions suggested for the smooth running of the bank: The bank should try to reduce the expenses on purchasing the fixed assets because it decreases the profit. The bank shall increase the investment position by issuing shares and debenture and the bonds of the MNCs. The bank has to implement online technology and various services to their customer. The bank has to provide more agriculture and small business loans to all sectors of the society as to increase the employment of the pupil. The bank expanded their branches more and more in the district particularly and in India in general.