Finance Project | Dividend | Financial Economics

Impact of Dividend Declaration on Market Price of Shares

Students Name Adil Zahoor Abass Ali Shams-ul-Irfan Hadi Hussain Mudasir Hameed

Project Incharge Prof. Bashir Ahmed

The Business School University of Kashmir Srinagar

INDEX :-

Roll no 420 409

Name Adil Zahoor Shams-ul-Irfan 1. 2. 1. 2.

Banks assigned Private sector HDFC bank Karnataka bank J&K bank Indus bank Public sector 1. Bank of Baroda 2. Canara bank 1. Allahabad bank 2. Union bank of India 1. Punjab national bank 2. Corporation bank 1. Andhra bank 2. State bank of India 1. Oriental bank of commerce 2. Bank of India

406

Abass Ali

1. Axis bank 2. ICICI bank 1. Maharashtra bank 2. Federal bank 1. Yes bank 2. ING Vysya

452 428

Mudassir Hamid Hadi Hussain

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ABSTRACT

In the present contemporary business scenario, the impact of every decision taken within the jurisdiction of the management of a company has its bearing on the value of the firm. Taking the efficient market hypothesis into account, the market associates premium or discount to each and every bit of information that gets passed into the market. The information may be regarding the financial decisions, investment decisions, ethical and environmental considerations, operational procedures, dividend decisions and on. The paper attempts to analyze the effect of the dividend decisions on the value of a firm as reflected in terms of the market price of its shares. The analysis has been carried out on various public and private sector banks for the period of last five to six years and the revealed results are reflected accordingly.

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Banking System in India:-

India has a well developed banking system. Most of the banks in India were founded by Indian entrepreneurs and visionaries in the pre-independence era to provide financial assistance to traders, agriculturists and budding Indian industrialists. The origin of banking in India can be traced back to the last decades of the 18th century. The General Bank of India and the Bank of Hindustan, which started in 1786 were the first banks in India. Both the banks are now defunct. The oldest bank in existence in India at the moment is the State Bank of India. The State Bank of India came into existence in 1806. At that time it was known as the Bank of Calcutta. SBI is presently the largest commercial bank in the country. The role of central banking in India is looked by the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India. Reserve Bank was nationalized in 1947 and was given broader powers. In 1969, 14 largest commercial banks were nationalized followed by six next largest in 1980. But with adoption of economic liberalization in 1991, private banking was again allowed. The commercial banking structure in India consists of: Scheduled Commercial Banks and Unscheduled Banks. Scheduled commercial Banks constitute those banks, which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI includes only those banks in this schedule, which satisfy the criteria laid down vide section 42 (6) (a) of the Act. Indian banks can be broadly classified into public sector banks (those banks in which the Government of India holds a stake), private banks (government do not have a stake in these banks; they may be publicly listed and traded on stock exchanges) and foreign banks.

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Nationalized Banks:Nationalised banks dominate the banking system in India. The history of nationalised banks in India dates back to mid-20th century, when Imperial Bank of India was nationalised (under the SBI Act of 1955) and re-christened as State Bank of India (SBI) in July 1955. Then on 19th July 1960, its seven subsidiaries were also nationalised with deposits over 200 crores. These subsidiaries of SBI were State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Indore (SBIR), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Saurashtra (SBS), and State Bank of Travancore (SBT). However, the major nationalisation of banks happened in 1969 by the then-Prime Minister Indira Gandhi. The major objective behind nationalisation was to spread banking infrastructure in rural areas and make cheap finance available to Indian farmers. The nationalised 14 major commercial banks were Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce (OBC), Punjab and Sind Bank, Punjab National Bank (PNB), Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India (UBI), and Vijaya Bank. In the year 1980, the second phase of nationalisation of Indian banks took place, in which 7 more banks were nationalised with deposits over 200 crores. With this, the Government of India held a control over 91% of the banking industry in India. After the nationalisation of banks there was a huge jump in the deposits and advances with the banks. At present, the State Bank of India is the largest commercial bank of India and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9,000 branches.

Private Banks: Initially all the banks in India were private banks, which were founded in the preindependence era to cater to the banking needs of the people. In 1921, three
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major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial Bank of India. In 1935, the Reserve Bank of India (RBI) was established and it took over the central banking responsibilities from the Imperial Bank of India, transferring commercial banking functions completely to IBI. In 1955, after the declaration of first-five year plan, Imperial Bank of India was subsequently transformed into State Bank of India (SBI). Following this, occurred the nationalization of major banks in India on 19 July 1969. The Government of India issued an ordinance and nationalized the 14 largest commercial banks of India, including Punjab National Bank (PNB), Allahabad Bank, Canara Bank, Central Bank of India, etc. Thus, public sector banks revived to take up leading role in the banking structure. In 1980, the GOI nationalized 6 more commercial banks, with control over 91% of banking business of India. In 1994, the Reserve Bank Of India issued a policy of liberalization to license limited number of private banks, which came to be known as New Generation tech-savvy banks. Global Trust Bank was, thus, the first private bank after liberalization; it was later amalgamated with Oriental Bank of Commerce (OBC). Then Housing Development Finance Corporation Limited (HDFC) became the first (still existing) to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. At present, Private Banks in India includes leading banks like ICICI Banks, ING Vysya Bank, Jammu & Kashmir Bank, Karnataka Bank, Kotak Mahindra Bank, SBI Commercial and International Bank, etc. Undoubtedly, being tech-savvy and full of expertise, private banks have played a major role in the development of Indian banking industry. They have made banking more efficient and customer friendly. In the process they have jolted public sector banks out of complacency and forced them to become more competitive.

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Dividend :History: The word dividend comes from a Latin word “dividendum” meaning “the thing which is to be divided among all.” Source: www.wikipedia.com Concept: The term dividend refers to that part of profits of a company which is distributed by the company among its shareholders. It is the reward of the shareholders for investments made by them in the shares of the company. The investors are interested in earning the maximum return on their investments and to maximize their wealth (which normally should be the objective of the operations of a company). A company, on the other hand, needs to provide funds to finance its long-term growth. Dividend policy of a firm, thus affects both the long-term financing and the wealth of the shareholders. As a result, the firm’s decision to pay dividends must be reached in such a manner so as to equitably apportion the distributed profits and retained earnings. Dividend is allocated as a fixed amount per share or a fixed percentage of the face value of a share. Thus shareholders receive dividend in proportion to their shareholding. (For a joint stock company), payment of dividends is not an expense, rather, it is the division of after tax profits among shareholders. This is the reason that dividend is not a chargeable expense (i.e. it cannot be debited to P&L a/c); instead it is an appropriation of profits and is thus reflected in the “P&L appropriation a/c”. Source: www.wikipedia.com and Management Accounting by SHARMA and GUPTA Dates associated with dividend: There are four important dates associated with dividend. These are: 1. Declaration date: it is the day on which the Board of Directors of a company declare their intention to pay dividend. On this day, a liability is created and the company records that liability in its books; it now owes the money to the stockholders. On the declaration date, the board will also announce the date of record and the payment date. 2. In-dividend date and ex-dividend date: it is the last day, which is one day before the ex-dividend date, where the stock is said to be cum dividend (i.e. including dividend). In other words, existing shareholders,
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and anyone who buys stock on this day will receive dividend. The ex-dividend date, normally 2 to 4 days before the record date is the day on which all shares bought or sold no longer come attached with the right to be paid the most recently declared dividend. This implies that existing stockholders will receive the dividend even if they now sell the stock on this date, whereas anyone who now buys the stock on this date will not receive the dividend. 3. Record date: it is the date when the company sets forth the list of shareholders that will be paid the dividend. Shareholders who are not registered on this date will not receive dividend. 4. Payment date: it is the date when the payment cheques will actually be mailed to the stockholders of the company or credited the brokerage accounts. www.wikipedia.com Types of dividends: Dividends may be classified in various forms. Dividends paid in the ordinary course of business are known as profit dividends, while dividends paid out of the capital are known as liquidation dividends. Dividends may also be classified on the basis of the medium in which they are paid. Cash dividend: it is the most common form of payment of dividends and the amounts are paid out through cheque. Such dividends are a form of investment income and are usually taxable to the recipient in the year they are paid. Scrip dividend: a scrip dividend promises to pay the shareholders at a future specific date. It is used at the time of lack of funds in the company. The objective of scrip dividend is to postpone the immediate payment of cash. A scrip dividend bears interest and is accepted as a collateral security. Property dividend: property dividends are paid in the form of some assets other than cash. These are distributed under exceptional circumstances and are not popular in India. Stock dividend: stock dividend means the issue of bonus shares to the existing shareholders. Stock dividend amounts to capitalization of earnings and distribution of profits among the existing shareholders without affecting the cash position of the firm. Source: Management Accounting by SHARMA and GUPTA

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Dividend policy: Dividend policies are the regulations and guidelines that a company develops and implements as the means of arranging and making dividend payments to the shareholders. It determines the proportions of the profit that are to be distributed among the shareholders as dividend and the portions that are to be retained for future applications (investments) in the business operations. Establishing a specific dividend policy is to the advantage of both the company and the shareholders. In order to make sure that the policy is workable, a company should develop a viable policy and then run this policy through a number of test scenarios in order to determine what impact the dividend policy would have on the operations and the share prices of the company. In many cases, companies choose to explicitly state the provisions within the dividend policy. This is clearly to the advantage of the shareholders, as a well defined policy makes it much easier to project the amount of payout profits generated for the period under consideration and thus be able to determine the size of the dividends that will be issued. However, there are cases where the dividend policy is not so well documented. When this is the case, investors sometimes base their assumptions on upcoming dividend payments on what has occurred in the past. Types of dividend policy: The various types of dividend policies are discussed below: Regular dividend policy: payment of dividend at the usual rate is termed as regular dividend. The investors such as retired persons, widows and other economically weaker persons prefer to get regular dividends. However, regular dividends can be maintained only by companies of long standing and stable earnings. Stable dividend policy: the term “stability of dividends” means consistency or lack of variability in the stream of dividend payments i.e. payment of certain minimum amount of dividend regularly. A stable dividend policy may be established in any of the following three forms: Constant dividend per share: it means paying fixed dividend per share irrespective of the level of earnings year after year. Such firms, usually, create a “reserve for dividend equalization” to enable them pay the fixed dividend even in the year when the earnings are not sufficient or when there are losses.

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Constant payout ratio: it means payment of a fixed percentage of net earnings as dividend every year. The amount of dividend in such a policy fluctuates in direct proportion to the earnings of the company. Stable rupee dividend plus extra dividend: it refers to the payment of constant low dividend per share plus an extra dividend in the years of high profits. Such a policy is most suitable to the firm having fluctuating earnings from year to year. Irregular dividend policy: this is followed on account of the following; Uncertainty of earnings. Unsuccessful business operations. Lack of liquid resources. Fear of adverse effects of regular dividends on the financial standing of the company. No dividend policy: a company may follow a policy paying no dividends presently because of its unfavorable working capital position or on account of requirements of funds for future expansion and growth. Determinants of dividend policy: The following are the important factors that determine the dividend policy of a firm. Legal restrictions. Magnitude and trend of earnings. Desire and type of shareholders. Nature of industry. Age of the company. Future financial requirements. Government’s economic policy. Taxation policy. Inflation. Control objectives. Requirements of institutional investors. Stability of dividends. Liquid resources.

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REVIEW OF LITERATURE:
DIVIDEND DECISION AND VALUATION OF FIRMS The value of the firm can be maximized if the shareholders’ wealth is maximized. There are conflicting views regarding the impact of dividend decision on the valuation of the firm. According to one school of thought, dividend decision does not affect the shareholders’ wealth and hence the valuation of the firm. On the other hand, according to the other school of thought, dividend decision materially affects the shareholders’ wealth and also the value of the firm. The former approach is known as the irrelevance concept of dividend or the theory of irrelevance and the later is known as the relevance concept of dividend or the theory of relevance. Theory of irrelevance: It includes the following two approaches: 1. Residual approach: according to this theory, dividend has no effect on the wealth of the shareholders or the prices of the shares, and hence it is irrelevant so far as the valuation of the firm is concerned. This theory regards dividend decision merely as a part of financing decision because the earnings available may be retained in the business for re-investment. But, if the funds are not required in the business they may be distributed as dividends. Thus, the decision to pay dividends or retain the earnings may be taken as a residual decision. This theory assumes that investors do not differentiate between dividends and retentions by the firm. Their basic desire is to earn higher return on their investment. In case the business has profitable investment opportunities giving a higher rate of return than the cost of retained earnings, the investors would be content with the firm retaining the earnings to finance the same. However, if the firm is not in a position to find profitable investment opportunities, the investors would prefer to receive the earnings in the form of dividends. 2. Modigliani and Miller approach (MM model): Modigliani and Miller suggest that the dividend policy has no effect on the market price of the shares, and hence the value of the firm is determined by the earning capacity of the firm or its investment policy. The MM model operates under the following assumptions:
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There are perfect capital markets. Investors behave rationally. Information about the company is available to all without any cost. There are no floatation and transaction costs. No investor is large enough to affect the market price of shares. There are either no taxes or there are no differences in the tax rates applicable to dividends and capital gains. The firm has a rigid investment policy. There is no risk or uncertainty in regard to the future of the firm (this assumption was later dropped). The theory of relevance: The advocates of this school of thought include Myron Gordon, Jone Linter, James Walter and Richardson. According to them dividends communicate information to the investors about the firms’ profitability and hence dividend decision becomes relevant. The following are the two theories representing this notion. Walter’s approach: Prof. Walter suggests that the relationship between the internal rate of return earned by the firm and its cost of capital is very significant in determining the dividend policy to sub serve the ultimate goal of maximizing the wealth of shareholders. Prof. Walter’s model is based on the relationship between the firm’s Return on investment i.e. “r”. The cost of capital or the required rate of return i.e. “k”. Prof. Walter suggests that; If r>k, firm should retain the earnings. If r<k, firm should pay higher dividends. If r=k, firm is indifferent. Walter’s model is based on the following assumptions: The investments of the firm are financed through retained earnings only and the firm does not use external sources of funds. The internal rate of return (r) and the cost of capital (k) of the firm are constant. Earnings and dividends do not change while determining the value of the firm. The firm has a very long life.
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Walter’s formula for determining the value of the share;

P= [D+ r {(E- D)/Ke}] Ke
Or P= (D/Ke) + {r (E- D)/Ke} Ke Where; P= market price per share D= dividend per share r= internal rate of return E= earnings per share Ke= cost of equity capital Gordon’s approach: The basic valuation model of Myron Gordon is based on the following The firm is an all equity firm. No external financing is available or used. The rate of return on the firm’s investments (r) is constant. The retention ratio (b), once decided upon is constant. Thus the growth rate of the firm {g=br}, is also constant. The cost of capital for the firm remains constant and it is greater than the growth rate i.e. k>br. The firm has perpetual life. Corporate taxes don not exist. Gordon’s basic valuation formula is as follows;

P= {E (1 - b)}/ (Ke- br)
Or

P 0 = D 1 / (Ke- g) = {D 0 (1 + g)}/ (Ke- g)

Where: P= price of shares E= earnings per share b= retention ratio
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ke= cost of equity capital br= g= growth rate in ‘r’ i.e. rate of return on investment of an all-equity firm D 0 = dividend per share D 1 = expected dividend at the end of year 1. The implications of the Gordon’s valuation model can be summarized as: When r>k, the price per share increases as the dividend payout ratio decreases. When r=k, the price per share remains unchanged and is not affected by dividend policy. When r<k, the price per share increases as the dividend payout ratio increases. GRAHAM AND DODD MODEL: This model assigns more weight on dividends than on retained earnings. Investors discount distant dividends at a higher rate than they discount nearby dividends. This is because nearby dividends are more certain than distant dividends. Formula:

Where, P = market price per share m = multiplier D = dividend per share E = earnings per share

P=m x (D + E/3)

Assumptions: Investors are rational. Under conditions of uncertainty they turn risk averse. LINTERS MODEL: If a firm sticks to its target payout it will have to change its dividend with every change in earnings. Since shareholders do not like a drop or a wild fluctuation in dividends, the company increases the dividend only to the extent it believes is maintainable in the future. A conservative company would have a lower adjustment factor. Formula:
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D 1 = D 0 + {(EPS x target payout) – D 0 } x AF
Where: D 1 = dividend I year 1 EPS = earnings per share D 0 = dividend in current year AF = adjustment factor Findings: Firms have a long-term target dividend payout ratio. Managers are concerned with changes in dividends rather than in dividends per share. Dividends do increase with earnings but not in perfect tandem. Managers are reluctant to effect dividend changes that may have to be reversed. Radical approach: If tax on dividend is higher than tax on capital gains, a company offering capital gains rather than dividends will be priced better. If tax on dividend is less than tax on capital gains, a company offering dividends rather than capital gains will be priced better. Assumptions: It considers both corporate tax and personal tax. It also considers the fact that dividends and capital gains are not taxed at the same rate. Source: article-dividend policy by CA. Kunal Aggarwal

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BANK OF BARODA
Bank of Baroda is one of the most prominent banks in India, having its total assets as Rs. 143146 Crores as on 31st of March 2007. The bank was founded by Maharaja Sayajirao Gaekwad III (also known as Shrimant Gopalrao Gaekwad), the then Maharaja of Baroda on 20th of July 1908 with a paid capital of Rs. 10 Lacs. On 19th of July 1969, Bank of Baroda was nationalized by the Government of India. Financial Details As of March 2007, the bank had total deposits worth Rs. 1,24,915 Crores while it had a total number of 2956 branches located worldwide as on April 2009, out of which 626 were located in Metro cities, 524 in Urban areas, 642 in Semi-Urban locations, 1092 in Rural areas and 72 were located outside India. The bank has 10 Zonal Offices and 43 Regional Offices which help it control its operations nationally. Other Details Bank of Baroda had a total workforce of 38063 employees offering their services to the institution as of September 2006. Out of these, 13525 were Officers, 16497 were Clerks while 8041 were Sub-Staff members. Head Office Bank of Baroda Suraj Plaza-1, Sayaji Ganj, Baroda-390005 Bank Of Baroda Baroda Corporate Centre, Plot No - C-26, G - Block, Bandra - Kurla Complex, Bandra (East), Mumbai-400051 Website: www.bankofbaroda.com. Source: www.iloveindia.com BANK PERFORMANCE

EXIBIT NO. 1

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We can see from the annual results that the bank has increased its sales, operating profits and gross profits over the last 5 years. This performance can also be revealed through the profitability ratios of the company.

EXIBIT NO. 2

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Source: www.rediffmoney.com

EXIBIT NO. 3

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Source: www.rediffmoney.com With the declaration and payment of these dividends the stock prices of the company varied in the following manner

EXIBIT NO. 4
Month Open Price 204.90 220.00 219.05 175.00 197.30 198.00 257.70

Stock prices between feb 05 and aug 05
High Price 221.00 256.25 226.65 204.80 212.45 263.70 274.00 Low Price 191.00 200.00 171.10 170.50 188.00 196.00 240.00 Close Price 218.05 218.05 172.25 195.65 196.30 257.05 245.05 Average price 206.00 228.13 198.88 187.65 200.23 229.85 257.00 No. of Shares 56,55,644 1,02,24,393 35,71,579 71,83,085 35,79,511 53,65,145 52,33,073 No. of Trades 68,094 98,347 41,517 65,259 36,918 45,332 45,739 Total Turnover (Rs.) 1,18,43,11,764 2,33,98,22,753 71,88,33,078 1,35,29,80,866 72,54,80,807 1,25,80,77,251 1,35,00,03,348 * Spread (Rs.) H-L 30.00 56.25 C-O 13.15 -1.95

Feb 05 Mar 05 Apr 05 May 05 Jun 05 Jul 05 Aug 05

55.55 -46.80 34.30 24.45 67.70 20.65 -1.00 59.05

34.00 -12.65

Dividend declared in May 2005 @ 32%.

source: www.bseindia.com

Exibit no. 5
Month Open Price 242.80 251.00 224.90 232.00 233.00 226.50 200.00

Stock prices between jan 06 and july 06
High Price 265.90 252.75 234.00 243.60 277.00 233.90 229.00 Low Price 233.15 216.70 218.10 212.10 201.00 181.10 175.75 Close Price 249.75 223.20 230.30 231.50 227.05 198.80 222.00 Average price 249.52 234.72 226.05 227.85 239.00 207.50 202.37 No. of Shares 67,48,307 94,17,326 73,35,379 62,61,456 1,25,48,807 42,68,025 47,49,396 No. of Trades 61,250 81,462 69,843 66,367 1,19,012 60,387 74,153 Total Turnover (Rs.) 1,68,14,12,672 2,20,04,00,653 1,66,65,16,337 1,45,76,78,443 3,15,96,45,581 88,38,05,286 97,32,44,586 * Spread (Rs.) H-L 32.75 C-O 6.95

Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06

36.05 -27.80 15.90 31.50 76.00 5.40 -0.50 -5.95

52.80 -27.70 53.25 22.00

Dividend declared in april 06 @ 50%

source: www.bseindia.com

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Exibit no. 6
Month Open Price 263.80 243.70 251.30 213.20 209.40 234.40 278.00 273.50

Stock prices between dec 06 and july 07
High Price 275.40 259.75 260.50 229.00 251.00 292.50 284.10 319.40 Low Price 213.10 223.00 210.00 188.50 193.00 234.40 247.10 265.10 Close Price 239.90 249.85 219.75 215.40 235.95 275.20 270.25 299.95 Average price 244.25 241.37 235.25 208.75 222.00 263.45 265.60 292.25 No. of Shares 39,93,615 42,76,910 29,04,027 45,32,738 40,76,650 38,26,058 23,46,649 65,90,076 No. of Trades 56,349 46,982 46,780 79,397 76,784 71,455 50,703 93,231 Total Turnover (Rs.) 96,83,14,786 1,02,73,80,870 67,08,91,683 94,61,71,439 92,42,91,011 1,02,12,09,451 62,45,51,622 1,94,90,86,134 * Spread (Rs.) H-L 62.30 36.75 50.50 40.50 58.00 58.10 37.00 54.30 C-O -23.90 6.15 -31.55 2.20 26.55 40.80 -7.75 26.45

Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07

Dividend declared in mar 07 @ 30% and april 07 @ 30%

source: www.bseindia.com

EXIBIT NO. 7
Month Open Price 392.00 360.00 282.00 320.00 271.00 203.50 251.00

Stock prices between Feb 08 and Aug 08
High Price 434.80 360.00 320.90 329.90 273.80 270.00 309.50 Low Price 341.25 255.55 267.00 254.20 199.30 188.30 245.00 Close Price 365.75 283.90 315.15 270.05 203.25 255.50 284.30 Average price 388.03 307.78 293.95 292.05 236.55 229.15 277.25 No. of Shares 51,40,646 48,70,448 39,30,984 39,24,989 37,83,980 55,64,352 64,13,917 No. of Trades 89,371 94,668 78,896 80,326 81,018 1,04,593 1,23,463 Total Turnover (Rs.) 1,96,43,03,764 1,44,69,59,315 1,16,55,02,049 1,15,87,55,972 86,92,09,752 1,26,54,15,925 1,76,27,89,544 * Spread (Rs.) H-L C-O

Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08

93.55 -26.25 104.45 -76.10 53.90 33.15

75.70 -49.95 74.50 -67.75 81.70 64.50 52.00 33.30

Dividend declared in may 2008 @ 80%.

source: www.bseindia.com

Exibit no. 8
Month Open Price 283.10 252.55

Stock prices between jan 09 and july 09
High Price 297.30 255.30 Low Price 225.35 207.70 Close Price 252.55 220.40 Average price 261.32 231.50 No. of Shares 57,80,079 32,93,161 No. of Trades 1,09,323 75,253 Total Turnover (Rs.) 1,46,19,37,988 76,10,61,801 * Spread (Rs.) H-L 71.95 47.60 C-O -30.55 -32.15

Jan 09 Feb 09

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Mar 09 Apr 09 May 09 Jun 09 Jul 09

216.00 236.00 333.00 445.00 449.00

249.85 334.80 464.30 463.00 454.00

180.50 227.10 314.00 400.00 371.10

234.55 327.00 438.30 445.30 436.00

215.17 280.95 389.15 431.50 412.55

65,94,241 61,94,430 70,81,233 42,52,091 31,16,114

1,14,137 1,08,786 1,01,807 61,816 59,627

1,41,41,34,404 1,80,49,30,655 2,68,96,29,576 1,83,75,24,148 1,30,33,69,887

69.35 107.70 150.30 63.00 82.90

18.55 91.00 105.30 0.30 -13.00

Dividend declared in april 09 @ 90%

source: www.bseindia.com

EXIBIT NO. 9
Month Open Price 512.00 577.00 586.00 643.15 690.50 710.00

Stock prices from Jan 10 to Jun 10
High Price 589.00 605.00 653.00 701.95 722.70 753.35 Low Price 508.00 546.40 585.00 616.00 655.20 678.50 Close Price 575.90 583.90 639.25 691.55 710.40 695.65 Average price 548.50 575.70 619.00 658.98 688.95 715.93 No. of Shares 17,63,342 23,26,137 22,25,977 26,03,626 21,46,775 14,60,105 No. of Trades 43,025 44,510 48,528 55,900 52,519 39,384 Total Turnover (Rs.) 96,39,81,099 1,33,94,61,639 1,37,14,19,778 1,71,91,92,749 1,49,25,76,349 1,05,49,37,224 * Spread (Rs.) H-L 81.00 58.60 68.00 85.95 67.50 74.85 C-O 63.90 6.90 53.25 48.40 19.90 -14.35

Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10

Dividend decalred in April 2010 @ 150%

source: www.bseindia.com

EXIBIT NO. 10
Particulars (In 31.03.2006 31.03.2007 31.03.2008 31.03.2009 31.03.2010 Percentage) Dividend payout Ratio (including Corporate 25.11% 23.75% 17.22% 20.90% 24.59% Dividend Tax) Source: www.bankofbaroda.com

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CANARA BANK
Canara Bank is one of the most prominent commercial banks of India. The bank was established in the year 1906 at Mangalore, Karnataka by a well known personality Mr. Ammembal Subba Rao Pai. Initially, it was founded with the name Canara Bank Hindu Permanent Fund, but later on the name was changed to Canara Bank Limited. Key Attributes Apart from setting other benchmarks in the field of providing comprehensive banking services to the consumers, Canara Bank has a number of achievements to its credit, which include being the first bank in India to have launched Inter-City ATM network, being the first bank to have been awarded ISO Certification for one of its branches, providing credit card for farmers for the first time in India along with offering Agricultural Consultancy Services. Vital Details Canara Bank has established a strong presence in the country, with 2710 branches across the nation as of September 2008. The bank boasts of having the maximum number of ATM installations among all the nationalized banks summing up to more than 2000 of them at 698 centers. Also, 1351 branches of the bank provide Internet and Mobile Banking (IMB) services, while ‘Anywhere Banking’ services are being provided at 2027 of its branches. All the branches of Canara Bank are enabled with Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) transaction facilities, insuring smooth and swift money transfer from any corner of the nation to another corner. Head Office Canara Bank Head Office 112, J C Road BANGALORE - 560 002 Website: http://www.canarabank.com

Source: www.iloveindia.com BANK PERFORMANCE

EXIBIT NO. 11

21

22

Source: www.rediffmoney.com

EXIBIT NO. 12

Source: www.rediffmoney.com

EXIBIT NO. 13
Month Open Price 210.20 220.00 205.00 182.00 200.00 High Price

Stock prices from Feb 05 to Aug 05
Low Price 197.25 187.55 172.25 170.10 197.00 Close Price 218.25 200.40 174.95 199.55 210.90 Average price 209.08 214.55 192.38 187.25 208.95 No. of Shares 57,89,570 84,56,756 33,96,812 45,95,225 43,75,074 No. of Trades 54,524 64,912 26,098 34,239 30,599 Total Turnover (Rs.) 1,20,80,09,712 1,85,71,09,436 64,44,89,127 87,82,62,603 91,85,80,951 * Spread (Rs.) H-L 23.65 54.00 40.25 34.30 23.90 C-O 8.05 -19.60 -30.05 17.55 10.90

Feb 05 Mar 05 Apr 05 May 05 Jun 05

220.90 241.55 212.50 204.40 220.90

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Jul 05 Aug 05

212.00 250.10

256.90 258.00

210.15 211.00

252.10 224.60

233.53 234.50

34,63,968 20,75,074

27,790 15,546

81,11,38,611 49,16,83,210

46.75 47.00

40.10 -25.50

Dividend declared in may 05 @ 30%. www.bseindia.com

source:

EXIBIT NO. 14
Month Open Price 243.00 251.00 286.50 267.95 256.30 232.00 201.10 High Price

Stock prices from Jan 06 to Jul 06
Low Price 221.35 232.10 261.00 214.00 185.00 187.00 165.10 Close Price 249.15 286.15 266.90 254.10 229.25 200.80 196.65 Average price 236.68 266.05 276.40 248.00 232.48 209.98 188.55 No. of Shares 49,76,661 1,01,41,162 35,19,011 23,09,937 20,84,538 12,26,047 15,48,978 No. of Trades 34,159 73,439 39,271 24,808 23,320 18,118 28,374 Total Turnover (Rs.) 1,16,90,32,500 2,76,18,94,785 97,92,93,204 60,07,81,883 52,65,24,070 25,37,65,701 29,45,85,285 * Spread (Rs.) H-L 30.65 67.90 C-O 6.15 35.15

Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06

252.00 300.00 291.80 282.00 279.95 232.95 212.00

30.80 -19.60 68.00 -13.85 94.95 -27.05 45.95 -31.20 46.90 -4.45

Dividend declared in April 06 @ 66%. www.bseindia.com

source:

Exibit no. 15
Month Open Price 243.00 209.70 188.00 219.80 254.40 273.95 260.00

Stock prices between feb 07 and aug 07
High Price 249.00 216.90 231.90 280.00 277.00 300.00 286.70 Low Price 200.00 174.00 176.55 205.00 231.20 253.50 222.00 Close Price 210.50 194.70 217.65 244.20 269.65 261.75 244.00 Average price 224.50 195.45 204.22 242.50 254.10 276.75 254.35 No. of Shares 16,63,254 19,76,786 17,28,699 27,26,163 17,90,642 28,84,356 17,01,207 No. of Trades 20,549 35,889 26,962 37,475 28,023 38,044 26,389 Total Turnover (Rs.) 37,24,09,268 38,14,58,294 34,91,77,115 67,33,69,849 45,86,10,916 80,19,86,504 42,86,35,974 * Spread (Rs.) H-L 49.00 42.90 55.35 75.00 45.80 46.50 64.70 C-O -32.50 -15.00 29.65 24.40 15.25 -12.20 -16.00

Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07

Dividend declared in may 07 @ 70% www.bseindia.com

source:

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EXIBIT NO. 16
Month Open Price 334.00 293.55 269.90 229.00 240.50 218.05 178.40 High Price

Stock prices from jan 08 to jul 08
Low Price 230.00 253.25 198.20 213.60 210.50 173.50 158.00 Close Price 289.45 278.10 225.20 237.10 216.00 178.00 183.75 Average price 325.73 288.63 234.93 229.73 230.23 197.65 177.45 No. of Shares 65,21,929 83,39,606 34,02,566 26,47,043 11,78,849 29,87,115 38,71,835 No. of Trades 70,128 51,204 41,880 29,256 16,142 26,351 42,060 Total Turnover (Rs.) 2,10,39,60,752 2,41,23,83,041 77,24,15,090 60,98,53,544 27,53,83,567 56,58,77,668 68,69,52,925 * Spread (Rs.) H-L C-O

Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08

421.45 324.00 271.65 245.85 249.95 221.80 196.90

191.45 -44.55 70.75 -15.45 73.45 -44.70 32.25 8.10

39.45 -24.50 48.30 -40.05 38.90 5.35

Dividend declared in April 08 @ 80% www.bseindia.com

source:

Exibit no. 17
Month Open Price 190.00 180.00 161.35 165.00 207.00 288.50 265.00

Stock prices between jan 09 and july 09
High Price 222.90 194.50 169.40 211.80 297.20 295.00 289.00 Low Price 167.40 148.60 144.25 158.50 200.30 232.00 235.00 Close Price 180.25 165.35 165.90 197.55 283.95 262.45 285.50 Average price 195.15 171.55 156.82 185.15 248.75 263.50 262.00 No. of Shares 69,91,420 18,01,266 36,79,512 37,55,169 46,36,795 38,44,523 31,04,236 No. of Trades 80,914 26,699 39,139 38,480 46,585 43,669 39,593 Total Turnover (Rs.) 1,30,58,84,342 31,84,93,839 56,76,58,804 69,25,64,693 1,13,43,89,506 99,32,07,600 83,73,02,981 * Spread (Rs.) H-L 55.50 45.90 25.15 53.30 96.90 63.00 54.00 C-O -9.75 -14.65 4.55 32.55 76.95 -26.05 20.50

Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09

Dividend declared in april 09 @ 80% www.bseindia.com

source:

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EXIBIT NO. 18
Month Open Price 392.00 391.85 400.00 412.00 429.00 408.00 High Price

Stock prices from Jan 10 to Jun 10
Low Price 360.00 369.00 393.05 386.65 386.05 345.00 Close Price 390.45 391.95 410.35 429.55 408.20 433.50 Average price 387.00 390.45 417.28 409.88 414.50 390.75 No. of Shares 17,58,573 9,55,750 13,74,514 15,98,472 16,79,620 9,79,806 No. of Trades 25,734 17,704 24,544 28,470 34,066 18,104 Total Turnover (Rs.) 68,62,76,062 37,51,33,439 56,91,77,838 65,75,62,248 70,58,43,547 41,47,76,414 * Spread (Rs.) H-L 54.00 42.90 48.45 46.45 56.90 91.50 C-O -1.55 0.10 10.35 17.55 -20.80 25.50

Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10

414.00 411.90 441.50 433.10 442.95 436.50

Dividend declared in April 10 @ 100%. www.bseindia.com

source:

HDFC BANK
Housing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd, was established in the year 1994, as a part of the liberalization of the Indian Banking Industry by Reserve Bank of India (RBI). It was one of the first banks to receive an 'in principle' approval from RBI, for setting up a bank in the private sector. The bank was incorporated with the name 'HDFC Bank Limited', with its registered office in Mumbai. The following year, it started its operations as a Scheduled Commercial Bank. Today, the bank boasts of as many as 1412 branches and over 3275 ATMs across India. Amalgamations In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a private sector bank promoted by Bennett, Coleman & Co. / Times Group). With this, HDFC and Times became the first two private banks in the New Generation Private Sector Banks to have gone through a merger. In 2008, RBI approved the amalgamation of Centurion Bank of Punjab with HDFC Bank. With this, the Deposits of the merged entity became Rs. 1,22,000 crores, while the Advances were Rs. 89,000 crores and Balance Sheet size was Rs. 1,63,000 crores.

26

Capital Structure At present, HDFC Bank boasts of an authorized capital of Rs 550 crores (Rs5.5 billion), of this the paid-up amount is Rs 424.6 crores (Rs.4.2 billion). In terms of equity share, the HDFC Group holds 19.4%. Foreign Institutional Investors (FIIs) have around 28% of the equity and about 17.6% is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). The bank has about 570,000 shareholders. Its shares find a listing on the Stock Exchange, Mumbai and National Stock Exchange, while its American Depository Shares are listed on the New York Stock Exchange (NYSE), under the symbol 'HDB'. Head Office HDFC Bank Ramon House, 169, Backbay Reclamation, H T Parekh Marg, Churchgate Mumbai - 400020 Phone: +91 (22) 66316000, 66636000, 66316060 Fax: +91 (22) 22048834 Website: www.hdfc.com Source: www.iloveindia.com

BANK PERFORMANCE EXIBIT NO. 19

27

Source: www.rediffmoney.com
28

EXIBIT NO. 20

Source: www.rediffmoney.com

EXIBIT NO. 21
Month Open Price 522.00 567.00 589.00 544.95 549.90 536.00 625.00 High Price

Stock prices from Jan 05 to Jul 05
Low Price 461.15 550.65 508.00 512.05 515.00 534.05 600.00 Close Price 564.40 586.90 544.25 537.20 540.05 634.10 685.50 Average price 515.58 574.83 568.98 542.65 539.50 588.53 662.45 No. of Shares 27,49,649 21,93,879 1,36,42,846 18,41,564 13,31,706 1,74,62,842 45,14,247 No. of Trades 35,820 24,927 21,484 10,560 6,687 14,505 21,171 Total Turnover (Rs.) 1,41,11,64,800 1,24,57,72,799 8,31,25,07,982 1,00,31,32,832 71,66,86,025 10,89,28,66,541 2,95,06,04,859 * Spread (Rs.) H-L 108.85 48.35 C-O 42.40 19.90

Jan 05 Feb 05 Mar 05 Apr 05 May 05 Jun 05 Jul 05

570.00 599.00 629.95 573.25 564.00 643.00 724.90

121.95 -44.75 61.20 49.00 108.95 124.90 -7.75 -9.85 98.10 60.50

29

Dividend declared in April 2005 @ 45% www.bseindia.com

source:

EXIBIT NO. 22
Month Open Price 710.90 767.90 738.00 765.00 835.00 740.00 740.00 High Price

Stock prices from Jan 06 to Jul 06
Low Price 707.00 705.25 726.00 740.90 710.00 620.00 693.10 Close Price 762.55 736.05 773.50 826.60 740.20 791.15 795.05 Average price 740.50 740.63 758.00 802.95 804.00 715.05 756.05 No. of Shares 27,50,074 23,20,754 1,70,09,416 31,74,611 38,55,140 29,28,796 35,23,646 No. of Trades 28,258 23,615 19,604 23,118 25,947 33,036 34,294 Total Turnover (Rs.) 2,02,45,58,679 1,71,81,29,727 12,81,06,17,347 2,63,70,09,015 3,24,66,35,471 2,10,58,94,033 2,74,26,06,664 * Spread (Rs.) H-L 67.00 C-O 51.65

Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06

774.00 776.00 790.00 865.00 898.00 810.90 819.00

70.75 -31.85 64.00 124.10 35.50 61.60

188.00 -94.80 190.90 125.90 51.15 55.05

Dividend declared in April 2006 @ 55% www.bseindia.com

source:

Exibit no. 23
Month Open Price 1,070.00 1,079.70 957.00 930.00 1,035.00 1,156.00 1,153.00

Stock prices between jan 07 and july 07
High Price 1,104.95 1,124.00 1,030.00 1,045.00 1,274.00 1,181.00 1,257.00 Low Price 980.55 903.60 890.00 895.00 980.30 1,050.35 1,120.00 Close Price 1,078.15 932.60 949.40 1,026.15 1,139.75 1,144.10 1,198.65 Average price 1042.75 1013.80 960.00 970.00 1127.15 1115.67 1188.50 No. of Shares 29,10,408 58,55,279 32,88,791 43,35,788 42,24,941 16,10,148 21,09,087 No. of Trades 32,807 32,103 37,528 30,551 39,466 27,483 33,432 Total Turnover (Rs.) * Spread (Rs.) H-L C-O 8.15

Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07

3,06,65,06,314 124.40

5,98,93,23,640 220.40 -147.10 3,11,66,02,597 140.00 4,20,73,43,853 150.00 -7.60 96.15

4,38,54,52,232 293.70 104.75 1,78,07,01,284 130.65 2,49,23,11,132 137.00 -11.90 45.65

Dividend declared in april 07 @ 70% www.bseindia.com

source:

30

EXIBIT NO. 24
Month Open Price 1,728.00 1,599.00 1,439.40 1,320.00 1,540.00 1,562.00 1,006.10

Stock prices from Jan 08 to Jul 08
High Price 1,825.00 1,615.00 1,470.00 1,561.10 1,575.00 1,562.00 1,265.00 Low Price 1,325.05 1,358.00 1,100.00 1,271.00 1,308.00 993.40 890.00 Close Price 1,568.00 1,453.45 1,319.95 1,514.85 1,357.85 1,002.30 1,095.25 Average price 1575.03 1486.50 1285.00 1416.05 1441.50 1277.70 1077.50 No. of Shares 31,22,114 29,91,571 19,33,819 20,71,938 15,19,813 31,77,269 72,78,963 No. of Trades 47,019 53,630 62,732 76,388 39,874 82,364 1,94,605 Total Turnover (Rs.) * Spread (Rs.) H-L C-O

Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08

5,17,12,44,107 499.95 -160.00 4,40,76,25,037 257.00 -145.55 2,58,81,97,112 370.00 -119.45 2,86,74,97,294 290.10 194.85 2,17,01,44,251 267.00 -182.15 3,60,49,87,808 568.60 -559.70 7,61,86,33,104 375.00 89.15

Dividend declared in April 2008 @ 85% www.bseindia.com

source:

Exibit no. 25
Month Open Price 1,007.25 917.00 867.00 978.00 1,119.00 1,455.00 1,499.00

Stock prices between jan 09 and july 09
High Price 1,124.00 957.00 1,014.00 1,138.00 1,498.00 1,580.00 1,548.80 Low Price 865.00 835.10 774.00 952.00 1,110.10 1,352.80 1,333.00 Close Price 924.60 884.85 967.85 1,100.70 1,442.35 1,491.75 1,499.60 Average price 994.50 896.05 894.00 1045.00 1304.05 1466.40 1440.90 No. of Shares 60,22,729 37,05,318 1,11,99,257 46,07,582 1,77,05,412 28,64,087 39,36,288 No. of Trades 2,02,634 1,01,247 1,99,338 1,31,399 1,18,521 97,168 1,23,698 Total Turnover (Rs.) * Spread (Rs.) H-L C-O -82.65 -32.15

Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09

5,83,15,68,779 259.00 3,32,03,52,942 121.90

9,60,54,53,532 240.00 100.85 4,94,67,49,851 186.00 122.70 20,52,06,42,072 387.90 323.35 4,26,60,45,213 227.20 5,61,31,76,912 215.80 36.75 0.60

Dividend declared in april 09 @ 100% www.bseindia.com

source:

EXIBIT NO. 26
Month Open Price 1,690.25 1,615.00

Stock prices from Jan 10 to Jul 10
High Price 1,794.70 1,733.00 Low Price 1,552.25 1,550.00 Close Price 1,630.85 1,704.65 Average price 1673.48 1641.50 No. of Shares 24,83,906 24,04,312 No. of Trades 54,083 55,148 Total Turnover (Rs.) * Spread (Rs.) H-L C-O -59.40 89.65

Jan 10 Feb 10

4,19,13,83,013 242.45 3,96,20,06,591 183.00

31

Mar 10 Apr 10 May 10 Jun 10

1,720.00 1,939.00 1,990.00 1,880.00

1,986.00 2,009.90 1,995.00 2,009.00

1,706.50 1,893.30 1,785.00 1,825.00

1,932.50 1,991.60 1,885.40 1,947.80

1846.25 1951.60 1890.00 1917.00

17,82,555 13,47,109 14,26,241 16,28,884

68,738 50,714 46,908 44,496

3,28,44,09,133 279.50 212.50 2,63,13,37,438 116.60 52.60

2,71,94,68,100 210.00 -104.60 3,16,80,27,812 184.00 67.80

Dividend declared in April 2010 @ 120% www.bseindia.com

source:

KARNATAKA BANK
Karnataka Bank Limited is a leading private sector bank in India. It was incorporated on 18th February 1924 at Mangalore, a town located in the Kannada district of Karnataka. The bank emerged as a major player during the freedom movement of 20th Century India. During its process of expansion, the Karnataka Bank merged with other banks like Sringeri Sharada Bank Ltd., Chitradurga Bank Ltd. and Bank of Karnataka. Today, Karnataka Bank has emerged as one of the top financial service institutions in India. Karnataka Bank: Branches and Business Karnataka bank has expanded its reach to various parts of India, over the 85 years of its existence. Today, the bank has a total of 447 branches, spread across 19 states and 2 Union Territories, with a total business of about Rs. 31248 Crores. The bank presently employs over 4,900 employees and is answerable to about 71,822 shareholders and over 3.7 million customers. The bank has specialized branches like Agricultural Development Branch, Overseas Branches, Foreign Exchange Branches, Specialized SSI Branches, Asset Recovery Management Branches, Currency Chests, Central Processing Centre spread across the length and breadth of the country. Corporate Office Mahaveera Circle Kankanady Mangalore - 575 002 Ph: 0824 - 2228222 Fax: 0824 - 2228284

32

E-mail: info@ktkbank.com URL: www.ktkbankltd.com

Source: www.iloveindia.com

BANK PERFORMANCE EXIBIT NO. 27

33

Source: www.rediffmoney.com

EXIBIT NO. 28

Source: www.rediffmoney.com
34

EXIBIT NO. 29
Month Open Price 112.50 106.40 102.00 99.50 99.00 92.50 95.00 High Price

Stock prices from Jan 06 to Aug 06
Low Price 101.20 96.85 90.00 75.55 74.10 80.10 94.50 Close Price 106.00 100.15 98.50 98.65 91.65 95.00 110.75 Average price 107.35 102.78 100.73 92.78 87.50 89.05 104.25 No. of Shares 18,98,274 31,66,353 30,63,157 54,67,321 22,72,644 11,25,202 30,62,234 No. of Trades 14,028 16,552 18,522 28,344 18,636 10,679 16,688 Total Turnover (Rs.) 20,44,43,266 32,50,60,152 31,66,30,018 54,32,16,032 19,66,70,564 10,18,78,100 31,75,36,025 * Spread (Rs.) H-L 12.30 11.85 21.45 34.45 26.80 17.90 19.50 C-O -6.50 -6.25 -3.50 -0.85 -7.35 2.50 15.75

Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06

113.50 108.70 111.45 110.00 100.90 98.00 114.00

Dividend declared in May 2006 @ 30% www.bseindia.com

source:

EXIBIT NO. 30
Month Open Price 173.00 176.00 161.05 172.50 172.00 176.00 181.60

Stock prices from Feb 07 to Aug 07
High Price 193.00 180.80 184.40 186.30 177.90 203.40 193.00 Low Price 160.05 154.50 160.00 164.00 164.00 170.00 165.15 Close Price 175.00 171.05 168.10 170.35 174.90 185.20 190.60 Average price 176.53 167.65 172.20 175.15 170.95 186.70 179.08 No. of Shares 36,13,315 16,66,972 24,41,772 30,10,899 12,14,311 46,19,294 33,76,368 No. of Trades 23,888 10,889 18,919 22,471 12,070 39,329 12,692 Total Turnover (Rs.) 65,79,18,193 28,29,22,603 41,93,53,328 52,69,11,441 20,88,63,907 88,09,83,374 60,56,78,506 * Spread (Rs.) H-L 32.95 26.30 24.40 22.30 13.90 33.40 27.85 C-O 2.00 -4.95 7.05 -2.15 2.90 9.20 9.00

Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07

Dividend declared in May 2007 @ 35% www.bseindia.com

source:

35

Exibit no.31
Month Open Price 253.00 264.00 200.10 205.85 200.00 138.00 125.75

Stock price between feb 08 and aug 08
High Price 286.00 264.00 215.00 218.00 207.95 152.95 149.00 Low Price 241.00 187.00 195.10 191.25 138.00 117.00 125.00 Close Price 263.95 199.95 202.00 202.15 138.15 125.90 140.45 Average price 263.50 225.50 205.05 204.62 172.97 134.97 137.00 No. of Shares 19,10,524 16,89,379 2,23,138 3,55,664 13,93,868 6,17,374 4,44,867 No. of Trades 11,125 10,273 4,156 5,646 10,770 7,937 5,858 Total Turnover (Rs.) 49,16,20,195 38,39,78,348 4,59,99,559 7,30,88,015 24,20,13,784 8,07,57,073 6,20,43,316 * Spread (Rs.) H-L 45.00 77.00 19.90 26.75 69.95 35.95 24.00 C-O 10.95 -64.05 1.90 -3.70 -61.85 -12.10 14.70

Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08

Dividend declared in may 08 @ 50% www.bseindia.com

source:

EXIBIT NO. 32
Month Open Price 70.30 62.85 66.20 83.10 139.90 140.50 137.10 High Price

Stock prices from Feb 09 to Aug 09
Low Price 60.50 55.15 65.30 83.10 129.05 125.65 122.45 Close Price 63.35 65.20 82.10 137.70 139.90 136.50 126.05 Average price 66.45 62.95 78.43 119.50 141.53 137.55 132.85 No. of Shares 1,78,332 3,90,579 11,27,737 72,82,173 19,91,220 7,99,053 11,71,170 No. of Trades 4,382 5,030 11,096 24,652 16,264 9,331 7,204 Total Turnover (Rs.) 1,18,99,498 2,48,53,661 9,37,84,241 89,64,25,933 28,04,10,553 11,14,86,557 15,05,17,207 * Spread (Rs.) H-L 11.90 15.60 26.25 71.90 24.95 23.80 20.80 C-O -6.95 2.35 15.90 54.60 0.00 -4.00 -11.05

Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09

72.40 70.75 91.55 155.00 154.00 149.45 143.25

Dividend declared in May 2009 @ 60% www.bseindia.com

source:

36

EXIBIT NO. 33
Month Open Price 128.50 112.50 119.00 137.00 173.40 High Price

Stock prices from Feb 10 to Aug 10
Low Price 108.45 112.50 119.00 128.30 154.65 Close Price 111.70 119.80 137.80 170.60 178.50 Average price 119.23 122.25 130.18 151.85 171.75 No. of Shares 7,97,239 48,69,683 32,20,521 1,39,71,750 2,48,83,210 No. of Trades 9,777 23,270 26,111 1,02,342 2,15,383 Total Turnover (Rs.) 9,31,33,451 59,90,34,469 43,55,71,342 2,17,99,78,114 4,26,52,52,034 * Spread (Rs.) H-L C-O

Feb 10 Mar 10 Apr 10 May 10 Jun 10

130.00 132.00 141.35 175.40 188.85

21.55 -16.80 19.50 22.35 47.10 34.20 7.30 18.80 33.60 5.10

Dividend declared in May 2010 @ 40% www.bseindia.com

source:

ANALYSIS AND RESULTS:

The declaration and payment of dividends has a varied impact on the market price of the shares depending upon the various underlying and inherent factors that operate in the market and within the firm itself. The entire data above reveals that how the market prices of the shares of a company fluctuate with the payment of dividends. These fluctuations have been interpreted by various analysts in terms of the models they have developed over the past few decades. The analysis of the companies under consideration can be carried out on the basis of those models and their application in varied firms could be sought. The facts revealed from the data summarised above can be looked into from different perspectives showing the impact of dividends on the market price of the shares of a company.

37

BANK OF BARODA:

The graphical representation of the impact of dividend declarations on the market price of the shares of BANK OF BARODA can be shown as under;

In the year 2005, the bank declared a dividend @ 32% (exibit no. 3), which had an impact on the market of the shares. In the prior quarter, the share prices were fluctuating between Rs.198 to Rs.206 but in may it went down to Rs.187. The share prices again went up in the following quarter showing that the dividend had not a lasting impact on the share prices but was very much temporary in nature. This may also be in view of the fact that the shareholders thought of behaving in a rational approach, in the light of earlier dividend declared in that year in the month of january @18% (exibit no. 3), and do not attach a lasting negative semtiment to the low rate of dividend in may itself. In the year 2006, the rate of dividend paid was 50%. In this year the earnings per share(EPS) of the company were Rs. 22.62 crores which led to the payment of dividend @ Rs. 5 per share (i.e 50% of the face value of the shares. The stock prices of the bank were decreasing in the prior quarter ( i.e. from Rs. 249.52 to Rs.226.05----exibit no. 5) following which the dividend was declared in the month of april and it resulted in the increase in share prices to Rs. 239.00 in the month of may but the company could not sustain the impact of the dividend and the ahsre prices again went down to Rs.207.50 and then further to Rs.202.37.
38

This reveals that the dividend did not had a lasting impact on the share prices and because the share prices showed a very sharp decrease, it may also be because of the reason that some negative information may have flown into the market leadin to the attachment of discount. It may be because of the two consecutive payments of dividend in the months of march 07 and april 07 that the decreasing trend of the share prices showed a sharp and consistent increase --- exibit no. 6. The dividend payments resulted in the share price increase from Rs.208.75 to Rs.222.00 to Rs.263.45 which finally reflected at Rs. 292.25 at the end of the quarter. The 2008 dividends were not much effective as the decreasing share price trend continued to decrease almost to the end of the quarter. However, 2009 dividends had an indellible impact on the share prices which rose from Rs.261.32 at the start of the prior quarter to Rs.412.55 at the end of the following quarter. 2010 did not experience heavy impact as the share prices were increasing prior to dividend declaration and further continued to increase. Such kind of varied impacts of dividend declaration on the share prices was experienced by the bank of baroda because of the various reasons and the different conditions under which the dividends were declared. Some of them may be enumerated as under: There were two dividends declared in the year 2007, may be because the company wanted to compensate the negative sentiment associate with their shares as a result of the dividend payments in the preceeding year. It may also be because of the increase in the sales and EPS (from Rs. 22.62 crores to Rs. 28.08 crores---exibit no. 1) of the company. The 2008 dividends were not effective because the rate of dividend was not in complete correlation with the increase in the performance of the bank. The dividends stood @ 80% while the improvement in bank performance was more better i.e EPS increased by Rs. 11.32 crores in comparisson to the previous year while the dividend per share increased by only Rs.2. On the same lines but in opposite direction, the improvement in the bank performance was clearly reflected in the share prices. No doubt that the dividend rates were not quite high in 2009 also but upto this period of time the shareholders might have understood that the company performance is improving quite decently and hence it may be having more investment opportunities, therefore, positive sentiment was attached to the retention of the earnings resulting in the increase in share prices.

39

Dividend @150% might was sufficient to continue the increasing trend of the share prices.

CANARA BANK:

The graphical representation of the dividend and share price combo is as under;

The fluctuating share prices of the bank showed an increasing trend after the declaration of the dividend in the month of may in 2005 @ 30% ---- exibit no. 12 and 13. However, in the year 2006 the share prices were increasing in the preceeding quarter but with the declaration of the dividend the share prices went down very sharply and continued to do so during the whole qurater ranging from Rs. 248.00 to Rs. 188.55. This signifies that intense negative sentiment was associated with the dividend declaration. This could be because of the reason that a dividend of Rs. 6.60 per share might not have been in the line of acceptance for the shareholders keeping in view the EPS of Rs. 32.76 crores. While as the share prices showed a rise in the following couple of months from the dividend declaration in the month of may 2007 @ 70%. The reason is quite evident i.e despite the meager increase of Rs. 1.89 crores—(exibit no. 11) in the EPS, the company managed to pay a dividend higher by 4% as compared to the last rate. Whereas no significant impact of 80% dividend in the month of april
40

2008 was reflected in the stock prices as the same continued the trend of decline for the whole of prior and following quarter. But the same rate of dividend led to increase in the stock prices in the year 2009. This was because of the fact that the shareholders had realised that the increasing sales (from Rs. 14200.73 crores to Rs. 17119.06 crores) and gross profit margin (from 7.69% to 9.68%)---(exibit no. 11) will lead to increasing capital gains for them therefore they favored the retention decission of the company. On the same lines when the company increased the dividend rate to 100% in the following year i.e 2010, the shareholders attached a negative sentiment to it as the earning spree was continuing at higher rates. The same wwas reflected in the decline in share prices in 2010 following quarter i.e the share prices dropped from Rs.417.28 to Rs.390.75. As said above, it was because of the increasing earnings i.e. EPS increased by Rs.23.14 crores—exibit no.11, gross profit increased from Rs. 3963.77 crores to Rs.5060.81 crores. The overall dividend policy of the bank was not quite satisfactory as they were not able to percieve the sentiments of their shareholders accurately and cuold have devised a better dividend policy.

HDFC BANK:

The graph containing the impact of dividend on the share prices takes the following shape;

41

In the year 2005 the company declared a dividend @ 45% in the month of april which had a very short run impact on the share prices as the same dropped from Rs. 568.98 to Rs. 542.65 and further to Rs. 539.50 in the months of march, april and may respectively—exibit no. 21. However, the share prices again went upto Rs.588.53 and then to Rs.662.45 in the following two months which signifies that the dividend declaration could not sustain its impact on the shareholders. The situation in 2006 is quite rare as there hardly seems to be any impact of dividend on the share prices. There does not seem to be any pattern in the change in the share prices following the dividend declaration and the fluctuating prices in the prior quarter still continue to wobble in the following quarter as well. While there seems to be no significant reason for such behavior of the shareholders. It might be because of the economic circumstances prevailing during that time period that the shareholders neither discunted not attached any premium to the dividend payments. The decreasing trend showed a little stabilisation with a spice of increase as a result of the declaration of dividend in the month of april 07. The prices in the prior quarter were decreasing from Rs.1042.75 in jan07 to Rs.960.00 in march 07. But once the dividend was declared in april, the trend showed a slight increase to Rs.970 in april itself and then to Rs.1127.15 in may 07 which again wobbled in june but yet again increased in july to Rs.1188.50. this reveals a short run impact of dividend on the shareprices. The 2009 dividends have proven quite effective for the company as the decreasing trend of the share prices showed some kind of reversal. The share prices were dipping from Rs.994.50 to Rs.894.00 in the prior quarter but shooted upto Rs. 1466.40 in the following quarter. This might be because of the fact that the dividend rate matched the expectations of the shareholders keeping in view the increase in the EPS of the company from Rs. 44.87 crores in the the year 2008 to Rs.52.78 crores in the year 2009. This increased the dividend per share by Rs. 1.50. There is no doubt that the operating profit per share decreased in the year 2009 as compared to 2008 (i.e. from Rs.107.32 crores to Rs.92.36 crores--exibit no.19), still the company paid a dividend of 100%. This could have been because of the reason that the earlier dividends did not have a lasting impact on the share prices and that might have forced the company to take such a step and it paid for the company.

42

Because of certain unrevealing reasons, the share prices of HDFC bank in the year 2010 did not showed a specific trendas it is fluctuating in both the prior and posterior quarters. It certainly signifies the influence of some other factors than dividend that have their role in manipulating the stock prices. And because of the EFFICIENT MARKET HYPOTHESIS into account the market attaches a sentiment to each and every bit of information that is flown into the market.

KARNATAKA BANK:
shape

The dividend-share price graph of the Karnataka bank takes the following

The general impact of the dividend declarations on the share prices of the Karnataka bank has been quite fluatuating as is evident from the exibits—29, 30, 31, and 32. These reveal that the share prices have not been lastingly affected by the dividend declarations and there have been surely certain other factors operating in the market that have had a greater influence on the share prices than the dividend policy of the company. It could be vsualised from the exibit no. 29 that the share prices decrease from Rs.107.35 to Rs.102.78 and further to Rs.100.73 in the next month, but with the declaration of the dividend in the commnig month the share prices further reduce and then increase in the last month of the quarter. This reveals that the
43

dividend declaration could not sustain its impact on the market prices of the company. The next year i.e. 2007 is even more paradoxical in nature I terms of the impact of dividend on the share prices as is reflected in the exibit no. 30. The share prices first decrease then increase then decrease then increase and then again decrease which means no definite pattern of changes in the prices takes place in the market. Same is the case with the year 2009, however, with some kind of difference. i.e. even though there has been no specific pattern in the share price changes but the wobbling share prices have shown a fluctuating increasing trend. This could be seen from the exibit no. 32. It shows that the share price in the month of feb 2009 was Rs.66.45 which went down to Rs.62.95 in the next month, then it increased to Rs.78.43 and then to Rs.119.50 and then even to Rs.141.53 in the month of june. This might have come as a relief for the company as though their dividend policy is not working as per the expectations but it they have managed to incresed their share prices. However, they have to also keep this fact in view that more wobbling in the share prices might affect the credibility of the company in terms of it value creation. The only year that has shown only increasing trend in the share prices right through the prior and the posterior quarter is the year 2010. Exibit no.33 reveals that the share prices continue to increase from Rs.119.23 to Rs.122.25 to Rs.130.18 to Rs.151.85 and finally to Rs.171.75 in the month of june 2010. However, this could be because of the reason that despite the decrease in the EPS of the company from Rs.21.94 crores in 2009 to Rs. 12.47 crores in 2010, the company still managed to pay a dividend of 40% to its shareholders. This led to the attachment of a positive sentiment to the decision and operations of the company.

Following the above analysis, it can be safely said that the changes in the share prices follow a specific pattern many a time but also fluctuate randomly at some other time. This reveals the varied impact of dividend decisions of a company on its share prices. However, it must also be taken care of that dividend policy of a company does not work in isolation. It has various other other factors associated with it that have a very infulential bearing on the share prices of the company but in those factors do not fall under the ambit of the project.

Conclusions

44

Assuming those factors to be constant, in certain cases the dividend decisions don not impact on the share prices, reverberating the NON-RELEVANCE approach that was put forth by MODIGILLIANI and MILLER. Such kind of senario was seen in case of the companies that have a strong holding in the market and investors have firm belief in the operations of the company e.g. in HDFC bank (only in some years). This also assumes the markets to be efficient i.e. operating under the EFFICIENT MARKET HYPOTHESIS and the investors being rational--which seem to quite acceptable in the present world condidtions. However, the other assumptions do not seem to be on a sound rationale---ref page no.7. In most of the cases, the dividend decision had a bearing on the market price of the shares and hence is vindication of the RELEVANCE SCHOOL OF THOUGHT under which various models have been developed over time by the researchers to understand the dividend policy of a company and its bearing on the share prices i.e. the value of the firm. As mentioned by Richard Fairchild in his article DIVIDEND POLICY, SIGNALLING AND FREE CASH FLOW: AN INTEGRATED APPROACH that sometimes a miscommunication about the future projects can be a cause of change in the share prices and hence by paying relatively low rates of dividend, company may not be able to capitalise on the share prices. This kind of situation is reflected in HDFC bank in the year 2008----exibit 24. Hence, it can be concluded that changes in the share prices are a function of the dividend policy of a company but at the same time other factors like investment opportunities, capital structure, leverage etc have a very strong bearing on the market price of the shares. Thus dividend policy does not impact share prices in isolation. The various unpredictable changes in the share prices reflected in this project are a clear vindication of the same.

45

The Jammu & Kashmir Bank was founded on October 1 1938 under letters patent issued by the Maharaja of Kashmir, Hari Singh. The Maharaja invited eminent Kashmiri investors to become founding directors and shareholders of the bank, the most notable of which were Abdul Aziz Mantoo, Pesten Gee and the Bhaghat Family, all of whom acquired major shareholdings. [2][3] The Bank commenced business on July 4, 1939 and was considered the first of its nature and composition as a State owned bank in the country. The Bank was established as a semi-State Bank with participation in capital by State and the public under the control of State Government. The bank had to face serious problems at the time of independence when out of its total of ten branches two branches of Muzaffarabad, Rawalakot and Mirpur fell to the other side of the line of control (now Azad Kashmir) along with cash and other assets. Following the extension of Central laws to the state of Jammu & Kashmir, the bank was defined as a government company as per the provisions of Indian companies act 1956.

J&K BANK:

COMPANY PERFORMANCE: Profit loss account Mar ' 09 Income Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses (Rs Cr.) Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

3,133.64 2,603.50 2,002.79 1,737.72 1,415.07 278.77 7.36 225.77 7.72 220.07 4.94 192.40 3.06 170.86 4.53
46

Adminstrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit Earnigs before appropriation Equity dividend Preference dividend Dividend tax Retained earnings

Mar ' 09 208.01 494.15 651.63 57.45 709.08 1,987.86 32.51 676.57 222.26 409.84 409.84 409.84 81.97 13.93 313.94

Mar ' 08 167.96 401.45 578.25 56.51 634.76 1,623.79 32.16 602.60 218.16 360.00 360.00 360.00 75.14 12.77 272.09

Mar ' 07 185.86 410.87 460.44 38.62 499.06 1,131.48 33.14 465.92 140.71 274.49 274.49 274.49 55.75 9.47 209.26

Mar ' 06 192.87 388.33 306.86 41.23 348.09 1,042.53 38.92 309.17 74.84 178.29 178.29 178.29 38.78 5.44 134.07

Mar ' 05 133.75 309.15 152.93 35.02 187.95 952.99 43.42 144.53 20.86 123.03 -7.96 115.07 115.07 38.78 5.07 71.22

Ratios Mar ' 09 Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) 84.54 91.25 84.54 91.25

(Rs Cr) Mar ' 08 74.26 80.90 74.26 80.90 Mar ' 07 56.62 63.46 56.62 63.46 Mar ' 06 36.78 44.81 36.78 44.81 Mar ' 05 25.38 34.34 23.74 32.69
47

Dividend per share Operating profit per share (Rs) Book value (excl rev res) per share (Rs) Book value (incl rev res) per share (Rs.) Net operating income per share (Rs) Free reserves per share (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio Coverage ratios

Mar ' Mar ' Mar ' Mar ' Mar ' 09 08 07 06 05 16.90 15.50 11.50 8.00 8.00 134.42 119.28 94.98 63.30 31.55 646.41 367.57 20.79 19.75 12.84 13.86 15.62 15.62 99.88 12.58 7.36 6.05 0.51 0.01 22.24 23.39 21.67 76.61 78.33 470.49 470.49 537.05 323.92 22.21 20.97 13.53 14.74 15.78 15.78 96.54 12.54 7.38 5.52 0.44 0.01 20.50 24.41 22.41 75.59 77.59 414.36 414.36 413.14 286.36 22.98 21.33 13.44 15.06 13.66 13.66 76.99 12.54 7.38 4.62 0.45 0.01 23.46 23.76 21.20 76.24 78.80 371.20 371.20 358.46 257.34 17.65 15.41 10.02 12.21 9.90 9.90 72.00 13.05 7.11 4.22 0.53 0.01 17.65 24.80 20.35 75.20 79.65 343.54 343.54 291.90 187.40 10.80 7.73 7.93 11.47 7.38 6.90 65.86 13.00 7.14 3.71 0.57 0.02 16.10 38.10 27.66 64.36 73.66

48

Adjusted cash flow time total debt Financial charges coverage ratio Fin. charges cov.ratio (post tax) Component ratios Material cost component (% earnings) Selling cost Component Exports as percent of total sales Import comp. in raw mat. consumed Long term assets / total Assets Bonus component in equity capital (%)

Mar ' Mar ' Mar ' Mar ' Mar ' 09 08 07 06 05 74.61 72.91 81.90 108.12 130.04 1.36 1.39 1.44 1.33 1.20 1.22 1.24 1.27 1.21 1.17 0.23 0.95 0.29 0.94 0.24 0.95 0.17 0.95 0.32 0.94 -

Balance sheet Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation

48.49 2,574.37

48.49 28.10 2,232.34

48.49 1,960.24

48.49 1,750.98

48.49 1,616.91

33,004.10 28,593.26 25,194.29 23,484.64 21,644.97 35,626.96 30,902.19 27,203.03 25,284.11 23,310.37

517.90 321.61

471.32 289.10

433.63 256.94

412.23 223.80

381.45 184.88
49

Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total Notes: Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity sharesoutstanding (Lacs)

Mar ' 09 Mar ' 08 196.29 182.22 3.13 9.79 10,736.33 8,757.66 552.34 486.47

Mar ' 07 176.69 6.76 7,392.19 377.19

Mar ' 06 188.42 6.29 9,002.34 481.41 900.94 -419.53 -

Mar ' 05 196.57 5.83 9,089.23 493.12 850.30 -357.18 -

1,069.67 1,102.02 823.31 -517.33 -615.55 -446.12 -

10,418.42 8,334.12 7,129.52 8,777.53 8,934.45 -

10,080.96 11,892.97 3,840.87 5,350.32 4,917.22 484.78 484.78 484.78 484.78 484.78

50

Dividend percentages: Year 2010 2009 2008 2007 2006 2005 month May Jun Jun May May May Dividend(%) 220 169 155 115 80 80

51

STOCK PRICES:

52

53

54

55

ANALYSIS AND COMPARISON(DIVIDEND AND STOCK PRICES):

Analysis: The dividend declaration policy of the bank has had mixed effects on the share prices of the company.In order to understand the relationship between the dividend declaration and the share prices,the following observations were made; • MAY 2005 dividend amounting to 80% was declared. The share price prior to may were around 361.30,while at the end of the month of may the share prices dropped to 337.20,while as in the following months of june,
56

july,august the share prices fluctuate from 368 to 453 ant tend to stabilise around the same rate.So only a certain decline in the prices can be seen in the month of the declaration while as for the remaining months the prices tend to stabilise showing a positive response to the dividend policy by the share holders. In the month of may 2006 dividend again declared at the rate of 80% shows a slight decrease in share prices from 464.95 in april to 388,379,and 389.60 in the months of may june july respectively.however the share prices agin stabilise by the month of august to 427.55.the reason for the certain decline of share prices could be attributed to the disapproval of the dividend policy adopted by the bank by its share holders. May 2007 dividend declared at 115% the share prices mildly fluctuate around the 600 to 700 rate for the following three months and the for the coming months cross the 700 to 750 mark.thus after showing a slight dip in the months after dividend declaration the results seem positive. June 2008 dividend declared 155%.there is a definite dip in the share prices after declaration of dividend from 649.20 in May to 527.25 in june to 447.25 in sept and 380 in october.the reasons could be that the share holders expected the company to reinvest the amount or they were expecting bigger amounts in dividend but it is obvious that the dividend poliy in this particular year was met with disapproval. June 2009 dividend declared 169%.the dividend policy has had little effect on the share prices for this year,as the share prices after fluctuating slightly have stabilised within a 2 month period thus not impacting thae share price of the company by that much. May 2010 dividend declared 220%.this declaration showed a postive impact as the share price increased from around 750 in may to 800 in the month of june and july.  all share prices are in INR.

57

ALLAHABAD BANK:

Nineteenth Century 24 April 1865: A group of Europeans at Allahabad founded Allahabad Bank. Allahabad Bank is therefore now the oldest joint stock bank in India.

Twentieth Century
• •

• • •

1920: P & O Banking Corporation acquired Allahabad Bank with a bid price of Rs.436 per share. 1927: Chartered Bank of India, Australia and China acquired P&O Bank. However, Chartered Bank continued to operate Allahabad Bank as a separate entity. 19 July 1969: The Government nationalized Allahabad Bank, together with 13 other banks. October 1989: Allahabad Bank acquired United Industrial Bank, a Calcuttabased bank that had been established in 1940. 1991: The Bank established AllBank Finance Ltd., a wholly owned Merchant Banking subsidiary.

Twenty-First Century

• • •

October 2002: Bank came out with an Initial Public Offering (IPO) of 10 crores of shares, each with a face value Rs.10 each. The IPO reduced the Government's shareholding to 71.16%. April 2005: Bank conducted a second public offering of 10 crores of shares, each with a face value Rs.10 and selling at a premium of Rs.72. This offering reduced the Government's ownership to 55.23%. June 2006:Bank opened its first office outside India when it opened a representative office in Shenzen, China. February 2007: Bank opened its first overseas branch, in Hong Kong. March 2007: Bank's business crossed Rs.1,00,000 crores mark.

58

COMPANY PERFORMANCE: Profit loss account Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Income Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses Adminstrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT 9,759.11 8,109.39 7,081.71 5,111.20 4,059.50 689.88 15.41 667.69 620.72 20.93 524.05 663.14 22.76 547.46 -

1,011.38 873.94 21.64 14.23

1,352.33 768.18 -

2,385.35 1,656.35 1,372.98 1,165.69 1,233.36 1,655.05 1,246.98 1,209.85 812.39 228.99 39.73 33.88 7.28 636.34 112.67 749.01

1,884.04 1,286.71 1,243.73 819.67

5,718.72 5,206.06 4,498.88 3,133.12 2,189.80 62.70 56.32 53.15 47.55 38.47 710.54

1,821.34 1,230.39 1,190.58 772.12

59

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit 554.24 303.78 129.24 974.76 -0.02 974.74 91.56 750.11 0.03 750.14 60.24 713.76 -7.63 706.13 765.63 178.68 25.06 561.89

1,206.89 768.56 -0.56 0.04 -

1,206.33 768.60

Earnigs before appropriation 1,302.42 868.47 Equity dividend Preference dividend Dividend tax Retained earnings 245.69 41.75 111.68 18.98

1,077.24 844.44 134.01 22.78 920.46 134.01 22.77 687.65

1,014.98 737.82

60

Ratios Mar ' 10 Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) 27.02 28.42 27.01 28.41 5.50 37.05 Mar ' 09 17.21 18.47 17.21 18.47 2.50 27.92 Mar ' 08 21.82 23.01 21.82 23.01 3.00 27.08 Mar ' 07 16.79 17.86 16.79 17.86 3.00 18.19 Mar ' 06 15.98 16.84 15.81 16.67 4.00 14.25

Book value (excl rev res) per share 131.73 111.45 117.47 100.22 81.45 (Rs) Book value (incl rev res) per share (Rs.) 151.17 131.00 117.47 100.22 81.45

Net operating income per share (Rs) 218.47 181.54 158.53 114.42 90.88 Free reserves per share (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) 74.68 16.95 16.31 12.07 12.71 62.00 15.37 14.68 9.43 10.12 57.96 17.08 16.33 13.69 14.44 46.58 15.89 14.96 14.65 15.58 40.35 15.67 14.72 16.92 18.02

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Mar ' 10 Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) 23.82 0.39 0.01 23.20 20.51 20.50

Mar ' 09 15.43 15.43

Mar ' 08 18.57 18.57

Mar ' 07 16.75 16.75

Mar ' 06 19.61 19.40 81.45 13.33 6.97 3.86

127.11 126.10 106.77 88.78 18.02 5.25 5.92 17.07 5.53 5.14 13.65 6.82 4.78 13.30 6.99 3.61

0.24 0.01 11.10 -

0.39 0.02 13.47 -

0.48 0.02 13.88 -

0.97 0.05 11.21 -

16.99 15.83 83.01 84.17

16.08 15.25 83.92 84.75

20.90 19.65 79.10 80.35

28.85 27.36 71.46 72.92

Dividend payout ratio (cash profit) 22.65 Earning retention ratio Cash earnings retention ratio Coverage ratios 76.19 77.36

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Mar ' 10 Adjusted cash flow time total debt 83.54 Financial charges coverage ratio Fin. charges cov.ratio (post tax) Component ratios Material cost component (% earnings) Selling cost Component Exports as percent of total sales Import comp. in raw mat. consumed Long term assets / total Assets 0.22 0.96 1.33 1.22

Mar ' 09

Mar ' 08

Mar ' 07 74.65 1.26 1.25

Mar ' 06 64.47 1.34 1.34

103.01 69.67 1.25 1.16 1.28 1.23

0.21 0.93 -

0.40 0.92 -

0.56 0.86 -

0.17 0.95 -

Bonus component in equity capital (%)

63

Balance sheet Mar ' 10 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress 1,648.89 868.69 530.62 249.59 1,577.18 1,482.58 1,414.11 1,052.94 873.37 467.43 236.38 411.11 357.78 310.23 446.70 5,437.56 446.70 446.70 446.70 446.70 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

4,531.88 4,800.48 4,030.13 3,191.83

1,06,055.75 84,971.79 71,616.38 59,543.66 48,499.69 1,11,940.02 89,950.37 76,863.56 64,020.49 52,138.22

1,071.47 1,056.33 742.72 -

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Mar ' 10 Investments Net current assets Current assets, loans & advances Less : current liabilities & provisions Total net current assets 1,379.22 3,455.03 -2,075.81

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

38,428.62 29,651.05 23,400.25 18,746.07 17,984.65

1,448.68 1,705.04 1,629.34 3,026.87 5,887.23 4,283.76 3,386.11 3,107.00 -4,438.55 -2,578.72 -1,756.77 -80.13 -

Miscellaneous expenses not written Total Notes: Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity sharesoutstanding (Lacs) -

36,602.40 25,448.88 21,893.00 18,045.63 18,647.24

-

-

-

-

52,025.00 48,586.10 56,946.15 21,835.02 22,459.40 4467.00 4467.00 4467.00 4467.00 4467.00

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Dividend YEAR 2010 2009 2008 2007 2006 2005 2005 MONTH Apr May May May May May Feb DIVIDEND(%) 55 25 35 30 40 15 15

66

STOCK PRICES:

67

68

69

Analysis and comparison:

Analysis: Following are the dividend declarations and their impact on the share prices of the company; • FEB 2005 dividend declared 15%.the decision had a positive impact on the share prices as is visible from the stock prices which rose from 71.95 in JAN to 96.40 in MARCH. • MAY 2005 dividend declared 15%.again the decision seems to be welcomed by the share holders as the share prices,besides some slight
70

fluctuations,seem to be stabilised with a slight increase in the months of july,august,and september. MAY 2006 dividend declared 40%.the decision is not accepted as a good one by the share holders as the share prices in the months of june and july show a sharp decline to 63.90 and 53.00 in these months respectively. MAY 2007 dividend declared 30%,the decision to declare dividend and the percantage of dividend, both have positive impact as the share prices show an increase in the coming months of june, july, august and september. MAY 2008 dividend declared 35%,the decision is against the wishes of the share holders which is evident again by a steep decline in the share prices of the company,from 80.55 in may to 55.65,59.75 in the months of june and july. MAY 2009 dividend declared 25%,other than a slight decrease in the month of june the decision is mostly positive in terms of its impact on share prices which rise from 86.25 in may to 119.35 in september. APRIL 2010 dividend declared 55%,the decision has slight effect on the share prices which otherwise remain stable around 160.00 per share.  All share prices are in INR.

71

INDUS BANK:

IndusInd Bank Limited is a Mumbai based Indian new generation bank,[1][2] established in 1994. The bank offers commercial, transactional and electronic banking products and services. Indusind Bank was incorporated in April 1994 by Dr. Manmohan Singh the then Union Finance Minister. Indusind Bank is the first among the new-generation private banks in India. The bank started its operations with a capital amount of Rs.1,000 million among which Rs.600 million was donated by the Indian Residents and Rs.400 million was raised by the Non-Resident Indians. The bank has specialized in retail banking services and continuously upgrades its support systems by introducing newer technologies. It is also working on expanding its network of branches all across the country along with meeting the global benchmark. According to the bank, its name is derived from the rich and vivid Indus Valley Civilisation.[3]

COMPANY PERFORMANCE: Profit loss account Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Income Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses 3,099.24 2,647.98 2,010.57 1,564.18 1,231.96 84.79 8.15 (Rs Cr.)

290.56 187.14 121.90 96.29 6.26 15.51 2.11 3.33

72

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Adminstrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit 525.17 425.50 298.93 266.17 191.68 -

821.99 628.16 422.93 365.78 284.63 456.66 169.38 7.78 -30.45 74.14

195.53 151.47 164.71 205.55 55.57 652.19 320.84 172.49 175.10 129.71 1,820.58 1,850.44 1,579.86 1,228.85 873.19 45.29 44.17 40.16 34.09 35.99 -

606.90 276.68 132.33 141.00 93.73 182.74 79.15 39.23 39.16 95.87 -27.65 -0.99 67.22 22.37 41.16 -4.34 36.82

384.31 178.97 75.72 -34.00 -30.63 -0.67 -

350.31 148.34 75.05

73

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Earnigs before appropriation Equity dividend Preference dividend Dividend tax Retained earnings 597.31 391.33 75.05 73.88 12.27 44.71 7.60 19.19 3.26 67.22 19.19 3.26 44.77 36.82 36.82

511.15 339.02 52.60

Ratios Mar ' 10 Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) 9.36 10.47 8.53 Mar ' 09 5.04 6.29 4.18 Mar ' 08 2.37 3.62 2.35 Mar ' 07 3.00 4.06 2.10 Mar ' 06 1.42 2.66 1.27
74

Mar ' 10 Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) Book value (excl rev res) per share (Rs) Book value (incl rev res) per share (Rs.) 9.64 1.80 11.13 52.71 58.35

Mar ' 09 5.42 1.20 4.77 40.21 46.85 74.59 23.90 6.39 4.72 5.29 7.97 12.53 10.39

Mar ' 08 3.60 0.60 0.24 34.69 42.19 62.87 20.55 0.38 -1.61 3.45 5.32 6.82 6.76

Mar ' 07 3.17 0.60 -0.95 33.04 33.04 48.91 19.57 -1.94 -4.12 3.79 7.34 9.07 6.36

Mar ' 06 2.51 2.55 29.83 29.83 42.43 16.66 6.01 3.09 2.85 5.99 4.75 4.25

Net operating income per share 75.51 (Rs) Free reserves per share (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) Leverage ratios 34.33 14.73 13.27 10.63 13.03 17.76 16.19

110.36 147.69 152.76 129.05 108.15

75

Mar ' 10 Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio Coverage ratios Adjusted cash flow time total debt 62.18 24.59 21.77 77.59 79.95 0.88 0.04 17.94 12.35 7.49 2.94 -

Mar ' 09 -

Mar ' 08 -

Mar ' 07 -

Mar ' 06

15.49 6.06 2.63

17.16 5.50 2.07

16.70 5.65 2.32

17.33 5.45 1.99

0.61 0.05 9.16 -

0.58 0.04 8.63 -

0.60 0.05 8.02 -

0.89 0.06 9.05 -

35.26 27.17 70.78 76.56

29.91 19.48 70.36 80.63

33.39 22.15 76.59 82.73

100.00 100.00

99.09

164.28 135.77 194.52

76

Mar ' 10 Financial charges coverage ratio 1.36 Fin. charges cov.ratio (post tax) 1.22 Component ratios Material cost component (% earnings) Selling cost Component 0.20 -

Mar ' 09 1.17 1.10

Mar ' 08 1.11 1.07

Mar ' 07 1.14 1.08

Mar ' 06 1.15 1.08

0.10 0.87 -

0.21 0.86 -

0.66 0.84 -

0.58 0.87 -

Exports as percent of total sales Import comp. in raw mat. consumed Long term assets / total Assets Bonus component in equity capital (%) 0.90 -

Balance sheet Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Sources of funds Owner's fund Equity share capital Share application money 410.65 2.20 355.19 1.15 320.00 0.51 320.00 290.51 -

77

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances Less : current liabilities & provisions 1,169.08 1,213.75 1,033.70 986.32 1,082.06 1,054.02 1,006.65 969.93 231.63 427.02 395.36 17.83 235.63 397.41 373.61 13.95 239.81 354.41 375.71 9.63 675.07 314.29 360.78 8.79 617.89 281.40 336.49 3.10 736.79 575.55 -

1,752.75 1,072.42 789.39 -

26,710.17 22,110.25 19,037.42 17,644.80 15,006.30 28,875.77 23,539.02 20,147.32 18,701.59 15,872.36

10,401.84 8,083.41 6,629.70 5,891.66 5,409.90

1,327.83 1,983.58 1,779.31 1,633.04 1,215.21

78

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Total net current assets -158.75 -769.83 -745.61 -646.72 -133.15 -

Miscellaneous expenses not written Total Notes: Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity shares outstanding (Lacs) -

10,656.28 7,701.14 6,269.42 5,614.50 5,616.34

-

-

-

-

51,213.49 44,299.17 32,743.14 22,223.10 16,836.46 4104.55 3550.00 3198.08 3198.08 2903.18

Dividend YEAR 2010 MONTH Apr DIVIDEND(%) 18

79

YEAR 2009 2008 2007 2005

MONTH May Jun May Jul

DIVIDEND(%) 12 6 6 18

STOCK PRICES:

80

81

82

83

84

ANALYSIS AND COMPARISON:

85

Analysis: The dividend declarations and their impact on the company share prices are as follows; • JULY 2005 dividend declared 18%.the company had enjoyed rising share prices till july and they continued for two more months after which there is a steep decrease in the share prices which continues for a fairly longer period of time resulting in no dividend in 2006,thus implying other factors like company earnings to be responsible for the share price decline rather than dividend decision. • MAY 2007 dividend declared 6%.till april of 2007 the share prices of the company had stabilise around 40 to 45 per share and after the declaration of dividend the share prices got a boost and kept on rising steadily in the coming months. • JUNE 2008 dividend declared 6% is also an unpopular decision as share price decline from 90.60 in april to 54.20 at the end of june. • MAY 2009 dividend declared 12%.the decision is positive and timely as the share prices rise consideribly after the decisionfrom 40.55 in april to 101.95 in august. • APRIL 2010 dividend declared 18% again a good decision as the share prices have a positive surge which continues after dividend declaration and stabilises around a high price of 196 to 200.  All share prices are in INR format.

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Union Bank of India (UBI) is one of India's largest state-owned banks (the government owns 55.43% of its share capital), is listed on the Forbes 2000. It has assets of USD 13.45 billion and all the bank's branches have been networked with its 1135 ATMs. Its online Telebanking facility are available to all its Core Banking Customers - individual as well as corporate. It has representative offices in Abu Dhabi, United Arab Emirates, and Shanghai, Peoples Republic of China, and a branch in Hong Kong.
• • •

Union bank of india:

1919 UBI was registered on 11 November 1919 as a limited company in Mumbai. It was inaugurated by Mahatma Gandhi. 1947 UBI had only 4 branches - 3 in Mumbai and 1 in Saurashtra, all concentrated in key trade centres. 1969 The Government nationalized UBI. At the time of its nationalization, UBI had 240 branches in 28 states. After nationalization, UBI merged in Belgaum Bank, a private sector bank established in 1930.

• •

• • •

1985 UBI merged in Miraj State Bank, established in 1929. 1999 UBI acquired Sikkim Bank in a rescue at the request of the Reserve Bank of India after the discovery of extensive irregularities at the nonscheduled bank. Sikkim Bank had eight branches located in the North-east, which was attractive to UBI. 2007 UBI opened representative offices in Abu Dhabi, United Arab Emirates, and Shanghai, Peoples Republic of China. 2008 UBI opened a branch in Hong Kong, its first branch outside India. Dec 2009 UBI opened a representative office in Sydney

87

Performace: Profit loss account Mar ' 10 Income Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses Adminstrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

14,667.24 12,901.70 10,123.58 7,691.41 6,259.34 873.80 19.55 866.91 20.34 584.77 -

1,354.99 1,152.36 845.68 38.98 132.63 34.49

1,652.65 1,339.02 1,196.21 826.21 -

3,046.62 2,624.01 2,076.39 1,719.56 1,472.02 2,510.35 2,201.88 1,686.24 1,379.89 1,297.89 728.16 499.99 380.99 261.61 161.24

3,238.51 2,701.87 2,067.23 1,641.50 1,459.13 9,110.27 8,075.81 6,360.95 4,591.96 3,489.42 160.14 136.58 101.82 86.37 86.13
88

Mar ' 10 Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items -

Mar ' 09 -

Mar ' 08 Mar ' 07 Mar ' 06 -

3,078.37 2,565.28 1,965.41 1,555.13 1,373.00 758.00 630.00 487.15 535.00 219.45 674.27 0.91 675.18 716.17 176.79 24.79 514.59

2,075.56 1,717.31 1,387.32 845.78 -0.64 9.24 -0.29 -0.39 -

Other non cash adjustments Reported net profit

2,074.92 1,726.55 1,387.03 845.39

Earnigs before appropriation 2,075.75 1,727.20 1,387.51 845.94 Equity dividend Preference dividend Dividend tax Retained earnings 277.81 47.21 252.56 42.92 202.05 34.34 176.79 27.80

1,750.72 1,431.72 1,151.13 641.35

89

Ratios Mar ' 10 Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) Book value (excl rev res) per share (Rs) Book value (incl rev res) per share (Rs.) 41.09 44.26 41.08 44.25 5.50 49.70 Mar ' 09 34.00 36.70 34.18 36.89 5.00 43.59 Mar ' 08 27.47 29.48 27.46 29.48 4.00 33.38 Mar ' 07 16.74 18.45 16.74 18.45 3.50 27.32 Mar ' 06 13.35 15.05 13.37 15.07 3.50 25.69 81.02

174.37 1.07 206.36 1.08

111.33 93.71

145.47 102.75 90.24

Net operating income per share (Rs) 290.37 255.42 200.42 152.27 123.92 Free reserves per share (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) 58.38 17.11 16.02 13.47 14.52 47.04 17.06 16.00 12.88 13.83 41.91 16.65 15.65 13.20 14.17 41.33 17.94 16.81 10.62 11.72 26.15 20.73 19.35 10.51 11.84

90

Mar ' 10 Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio Coverage ratios 15.66 14.54 84.35 85.47 0.61 0.01 24.65 23.56 23.55

Mar ' 09 24.34 24.47

Mar ' 08 24.67 24.66

Mar ' 07 17.86 17.86

Mar ' 06 16.47 16.49

135.60 147.75 146.45 126.18 107.10 19.31 4.92 4.34 19.66 4.83 4.04 18.47 5.13 3.45 18.00 5.26 5.19 18.10 5.23 4.57

0.32 0.02 11.26 -

0.44 0.03 10.78 -

0.37 0.03 8.82 -

0.40 0.03 9.29 -

17.11 15.85 82.80 84.07

17.04 15.87 82.97 84.13

24.20 21.95 75.82 78.06

29.85 26.47 70.11 73.49

91

Mar ' 10 Adjusted cash flow time total debt Financial charges coverage ratio Fin. charges cov.ratio (post tax) Component ratios Material cost component (% earnings) Selling cost Component Exports as percent of total sales 0.26 76.06 1.36 1.25

Mar ' 09 74.82 1.33 1.23

Mar ' 08 69.74 1.32 1.23

Mar ' 07 91.38 1.36 1.20

Mar ' 06 97.44 1.42 1.22

0.34 0.90 -

0.25 0.90 -

0.32 0.90 -

1.02 0.93 -

Import comp. in raw mat. consumed Long term assets / total Assets 0.94

Bonus component in equity capital (%) Balance sheet Mar ' 10 Sources of funds Owner's fund Equity share capital Share application money Preference share capital 505.12 -

Mar ' 09

Mar ' 08

Mar ' 07 Mar ' 06

505.12 -

505.12 -

505.12 -

505.12 92

Mar ' 10 Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block 3,396.98 8,302.69 -

Mar ' 09 6,549.26 -

Mar ' 08 5,118.19 -

Mar ' 07 Mar ' 06 4,228.16 3,587.36 -

1,70,039.74 1,38,702.83 1,03,858.65 85,180.22 74,094.30 1,78,847.55 1,45,757.21 1,09,481.95 89,913.50 78,186.78

3,220.65 1,685.98 893.35 641.32 7.86

2,937.45 1,724.40 741.62 471.44 4.57

1,487.21 1,382.03 456.59 664.49 366.13 2.28 465.68 587.17 329.18 15.56

Less : revaluation reserve 1,615.97 Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances 3,360.89 1,101.50 679.51 9.96

54,403.53 42,996.96 33,822.63 27,981.77 25,917.65

3,124.23 9,647.43 -6,523.20

3,604.10 8,106.43 -4,502.33

3,058.24 2,627.50 8,092.26 6,499.18 -5,034.02 -3,871.69

Less : current liabilities & 5,483.01 provisions Total net current assets -2,122.13

93

Mar ' 10 Miscellaneous expenses not written Total Notes: Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity sharesoutstanding (Lacs) -

Mar ' 09 -

Mar ' 08 -

Mar ' 07 Mar ' 06 -

52,970.87 37,122.94 29,796.31 23,316.16 22,390.71

-

-

-

76,903.26 85,639.94 65,693.83 43,431.98 44,623.75 5051.18 5051.18 5051.18 5051.18 5051.18

94

Dividend: YEAR 2010 2009 2008 2007 2006 2006 2005 2005 MONTH May May May May Dec Apr May Feb DIVIDEND(%) 55 50 40 20 15 35 15 20

95

STOCK PRICES:

96

97

ANALYSIS AND COMPARISON:

98

Analysis: The dividend policy of the company along with its effects are as follows; • FEB 2005 dividend declared 20%,the share prices show a slight decline in the coming two months in march it decreases to 113.05 and in april it falls
99

• • •

to 96.70.the company decides to declare dividend amounting to 15% in MAY in the same year which turns out to be a positive decision as the share prices show an increase in the coming months. APRIL 2006 dividend declared 35% leads to decrease in share prices by a slight amount forcing the company to declare again in DEC 2006(15%) which has a stabilising effect on the share prices. MAY 2007 dividend declared 20%,it’s a positive decision as the share price show an increase from120.55 in may to 155 in july. MAY 2008 dividend declared 40%,the effects on the share prices are not that evident as the share prices show only slight fluctuations. MAY 2009 dividend declared 50%,the decision has positive effects on the share prices which climb from 164.15 in april to 240.00 in months after may. MAY 2010 dividend declared 55% has apositive effect on the share prices.  All share prices are in INR.

100

Axis Bank :Axis Bank was incorporated in 1994, and was the first of the new private banks to be established after the Government of India allowed private banks to open independently. The bank was promoted jointly by the administrator of the specified undertaking of the Unit Trust Of India (UTI – I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India(GIC) and four other PSU insurance companies, namely, National Insurance Company Ltd.,The New India Assurance Company Ltd., Oriental Insurance Company ltd and United India Insurance Company Ltd. The registered office of the bank is at Ahmedabad and its central office is located at Mumbai. At present, the bank has as many as 729 branches and a network of over 3171 ATMs providing 24 hours services to its customers nation-wide. The bank is currently capitalized to the extent of Rs. 358.97 crores with the public holding at 57.59%. The bank deals both in retail as well as corporate banking, and aims to deliver the best services to its customers in order to achieve excellence. Till July 2007, it was called the UTI bank and hence after changed to Axis Bank. The bank aims at customer satisfaction throughout all its operations. With its iconnect feature, one can view all his account details, transfer funds within accounts, pay bills, retail loans and access a multitude of other services. The bank's International Debit Card, which comes with the Savings Bank Account, carries a unique insurance cover for every account holder, and has received an excellent response from customers, with over 109 lakh debit cards having been issued till December 2008.

101

Financial Performance for the past few years :Annual results in brief Mar ' 10 Sales Operating profit Interest Gross profit EPS (Rs) 11,638.02 6,539.11 6,633.53 5,240.55 62.06 Mar ' 09 10,835.48 7,037.59 7,149.27 3,724.88 50.57 Mar ' 08 7,005.31 4,270.75 4,419.96 2,225.92 29.94 Mar ' 07 4,560.40 2,979.45 2,993.32 Mar ' 06 2,888.79 1,812.22

1,810.56 1,362.60 993.81 23.40 17.41

Annual results in details Mar ' 10 3,945.78 1,255.82 2,453.90 1,389.19 1,336.83 2,514.53 Mar ' 09 2,896.88 997.66 1,860.55 939.68 969.84 1,815.36 Mar ' 08 1,795.49 670.25 1,484.67 579.64 575.25 1,071.03 Mar ' 07 1,010.11 381.35 833.24 366.36 337.21 659.03 Mar ' 06 729.63 240.20 573.85 262.52 246.21 485.08
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Other income Stock adjustment Raw material Power and fuel Employee expenses Excise Admin and selling expenses Research and development expenses Expenses capitalised Other expenses Provisions made Depreciation Taxation Net profit / loss

Extra ordinary item Prior year adjustments Equity capital Financial Ratios:-

Mar ' 10 405.17

Mar ' 09 359.01

Mar ' 08 357.71

Mar ' 07 281.63

Mar ' 06 278.69

------------------- in Rs. Cr. ------------------Mar '05 Investment Valuation Ratios Face Value 10.00 Dividend Per Share 2.80 Operating Profit Per Share 22.49 (Rs) Net Operating Profit Per 83.98 Share (Rs) Free Reserves Per Share 54.08 (Rs) Bonus in Equity Capital -Profitability Ratios Interest Spread Adjusted Cash Margin(%) Net Profit Margin Return on Long Term Fund(%) Return on Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Mar '06 10.00 3.50 34.12 128.98 75.38 -Mar '07 10.00 4.50 42.36 193.93 86.60 -Mar '08 10.00 6.00 56.88 244.63 208.03 -Mar '09 10.00 10.00 83.56 377.46 230.47 --

4.09 17.47 14.33 70.55 18.19 13.54 0.86 0.86

3.14 16.07 13.47 88.56 18.28 16.94 0.98 0.98

3.27 14.11 12.01 119.74 19.37 19.45 0.90 0.90

3.77 14.19 12.22 71.17 12.21 12.38 0.98 0.98

4.24 14.76 13.31 97.35 17.77 17.85 284.50 284.50

Management Efficiency Ratios Interest Income / Total 7.43

8.22

8.88

9.57

10.53
103

Funds Net Interest Income / Total Funds Non Interest Income / Total Funds Interest Expended / Total Funds Operating Expense / Total Funds Profit Before Provisions / Total Funds Net Profit / Total Funds Loans Turnover Total Income / Capital Employed(%) Interest Expended / Capital Employed(%) Total Assets Turnover Ratios Asset Turnover Ratio

3.57 0.11 3.85 1.59 1.84 1.05 0.18 7.54 3.85 0.07 3.01

4.08 0.01 4.14 1.90 1.98 1.11 0.19 8.23 4.14 0.08 4.00

4.01 0.03 4.87 2.07 1.79 1.07 0.18 8.92 4.87 0.09 4.97

4.74 0.02 4.83 2.51 2.07 1.17 0.18 9.59 4.83 0.10 6.32

4.98 0.06 5.56 2.64 2.25 1.41 0.19 10.60 5.56 0.11 7.78

Profit And Loss Account Ratios Interest Expended / Interest 62.00 Earned Other Income / Total 1.48 Income Operating Expense / Total 21.02 Income Selling Distribution Cost 0.49 Composition Balance Sheet Ratios Capital Adequacy Ratio Advances / Loans Funds(%) Debt Coverage Ratios Credit Deposit Ratio Investment Deposit Ratio Cash Deposit Ratio

62.68 0.18 23.13 0.47

65.64 0.39 23.26 0.54

63.09 0.16 26.20 0.85

65.98 0.60 24.95 0.34

12.66 56.76

11.08 58.50

11.57 69.07

13.73 75.89

13.69 73.87

47.40 41.90 13.72

52.79 49.85 8.18

59.85 48.96 7.17

65.94 41.39 8.17

68.89 39.04 8.16
104

Total Debt to Owners Fund 13.17 Financial Charges 1.55 Coverage Ratio Financial Charges 1.35 Coverage Ratio Post Tax Leverage Ratios Current Ratio Quick Ratio

13.97 1.53 1.32

17.28 1.41 1.26

9.99 1.46 1.28

11.49 1.43 1.28

0.06 11.55

0.04 6.52

0.03 7.39

0.03 9.23

0.03 9.52

Cash Flow Indicator Ratios Dividend Payout Ratio Net 26.22 Profit Dividend Payout Ratio 21.08 Cash Profit Earning Retention Ratio 73.10 Cash Earning Retention 78.48 Ratio AdjustedCash Flow Times 77.77 Mar '06 Earnings Per Share Book Value 17.41 103.06

23.20 19.49 76.88 80.57 69.28 Mar '07 23.40 120.80

22.57 19.30 77.53 80.78 75.97 Mar '08 29.94 245.13

23.49 20.47 76.84 79.78 70.42 Mar '09 50.57 284.50

23.16 20.98 76.94 79.11 58.33 Mar '10 62.06 395.99

Dividend Declaration Table :-

Announcement Dt Effective Dt Dividend Type 20-04-10 20-04-09 20-05-10 14-05-09 Final Final

Dividend (%) 120.00 100.00
105

21-04-08 17-04-07 17-04-06 21-04-05

22-05-08 17-05-07 16-05-06 20-05-05

Final Final Final Final

60.00 45.00 35.00 28.00

Stock Prices (around the time periods of dividend declaration):-

106

Analysis and Comparison:-

• In May 2008, a dividend of 60% was declared. The Stock prices changed from a price of Rs. 923.4 in April to an average price of Rs. 871.4 in May and then decreased to a price of Rs. 793.7 in June. Thus Declaration of Dividend had a negative impact on the market price of shares.

107

• In May 2009, a dividend of 100% was declared. The Stock prices changed from a price of Rs. 555.65 in April to an average price of Rs. 676.2 in May and then increased to a price of Rs. 787 in June. Thus Declaration of Dividend had a positive impact on the market price of shares.

• In May 2010, a dividend of 120% was declared. The Stock prices changed from a price of Rs. 1268.2 in April to an average price of Rs. 1246.55 in May and then decreased to a price of Rs. 1230 in June. Thus Declaration of Dividend had a negative impact on the market price of shares

Corporation Bank:Corporation Bank is an Indian bank based in Mangalore, Karnataka. The bank was founded in the year 1906 at a town named Udupi in Karnataka with an investment of just Rs. 5000. A group of enthusiasts including Khan Bahadur Haji Abdulla Haji Kasim Saheb Bahadur were the founders of the bank. Interestingly, Udupi was not much far from Mangalore, and the banking needs of the people were being solely controlled by some local rich individuals. Hence, to find a way out of the existing monopoly of the money lenders, Corporation Bank was established with the initial name ‘The Canara Banking Corporation (Udupi) Ltd’. Key Attributes Corporation Bank has an array of awards and recognitions to its credit, including National Award for Assistance to Exporters from the President of India for the
108

year 1976-77, Shiromani Award for Banking from Union Minister of Commerce in the year 1992, Best Bank Award for Excellence in Banking Technology from Institute for Development and Research in Banking Technology (IDRBT) in the year 2001, and Best Bank Award for Innovative Usage and Application on INFINET (Indian Financial Network) from the same institution in the year 2002. Apart from it, Corporation Bank has been the path breaker among the Indian banks in many ways, as it was the first bank in the country to launch Cash Management Services, Gold Banking, m-Commerce and 100% Core Banking Services (CBS) compliance. Products and Services Corporation Bank offers a wide range of banking products and services to its customers, including Personal Banking Services, Internet Banking Services, Value Added Banking Services, Corporate Banking Services and Credit Card & Debit Card Services. The bank allocates due attention towards its corporate and international business customers, bringing some customized services such as Gold Card Scheme for Exporters. Also, the bank has introduced some specialized services to cater to the specific needs of Micro and Small Enterprises (MSE) customers, enabling them leverage its potential to their maximum benefit. Financial Performance for the past few years :-

Annual results in brief Mar ' 10 7,294.60 5,560.23 5,084.35 2,136.73 Mar ' 09 6,067.35 4,679.91 4,376.37 1,796.61 Mar ' 08 4,516.55 3,438.87 3,073.24 1,251.14 Mar ' 07 3,430.16 2,303.11 2,052.37 1,140.04 Mar ' 06 2,626.47 1,502.70 1,399.66 1,051.52
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Sales Operating profit Interest Gross profit

EPS (Rs)

Mar ' 10 81.59

Mar ' 09 62.24

Mar ' 08 51.24

Mar ' 07 37.38

Mar ' 06 30.99

Annual results in details Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Other income 1,186.42 1,107.21 699.78 565.84 571.46 Stock adjustment Raw material Power and fuel Employee expenses 631.70 467.97 427.87 378.31 363.53 Excise Admin and selling expenses Research and development expenses Expenses capitalized Other expenses 628.25 533.60 464.08 425.28 383.22 Provisions made 474.43 385.86 185.73 323.46 377.02 Depreciation Taxation 492.05 517.98 330.42 280.44 230.04 Net profit / loss 1,170.25 892.77 734.99 536.14 444.46 Extra ordinary item Prior year adjustments Equity capital 143.44 143.44 143.44 143.44 143.44

Financial Ratios:Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

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Mar ' 10 Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) Book value (excl rev res) per share (Rs) Book value (incl rev res) per share (Rs.) 74.94 79.54 81.58 86.18 16.50 91.89

Mar ' 09 55.93 59.76 62.24 66.07 12.50 84.49

Mar ' 08 42.19 46.35 51.24 55.39 10.50 63.10

Mar ' 07 29.57 33.71 37.38 41.52 9.00 48.49

Mar ' 06 26.09 30.02 30.99 34.91 7.00 38.36

402.60 341.36 294.79 262.51 235.28 402.60 341.36 294.79 262.51 235.28

Net operating income per share (Rs) 553.66 467.44 343.96 256.21 196.88 Free reserves per share (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) Adjusted return on net worth (%) 199.76 183.72 183.69 170.55 162.24 16.59 15.76 14.05 13.70 18.61 18.07 17.25 12.88 12.36 16.38 18.34 17.13 14.41 13.03 14.31 18.92 17.30 14.01 12.63 11.26 19.48 17.48 14.90 14.43 11.09

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Mar ' 10 Reported return on net worth (%) Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio Coverage ratios Adjusted cash flow time total debt 20.26

Mar ' 09 18.23

Mar ' 08 17.38

Mar ' 07 14.23 73.21 11.25 8.16 5.31 0.37 0.02 9.58 27.85 25.07 64.80 69.12 87.60

Mar ' 06 13.16 59.37 9.74 9.30 4.56 0.59 0.04 10.46 25.75 22.86 69.42 73.41 76.36

115.17 115.83 94.80 16.06 5.86 9.75 0.70 0.02 18.35 23.66 22.39 74.25 75.74 81.28 15.11 6.20 8.64 0.43 0.03 9.53 23.49 22.13 73.86 75.53 86.31 13.11 7.08 6.82 0.35 0.02 9.99 23.97 22.17 70.89 73.50 83.37

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Mar ' 10 Financial charges coverage ratio Fin. charges cov.ratio (post tax) 1.33 1.24

Mar ' 09 1.33 1.22

Mar ' 08 1.35 1.26

Mar ' 07 1.41 1.29

Mar ' 06 1.51 1.36

Dividend Declaration Table:-

Announcement Date (%) 23-04-10 24-04-09 26-02-09 28-04-08 26-03-08 30-04-07 26-03-07 26-04-06 26-11-05

Effective Date 21-06-10 03-07-09 12-03-09 17-06-08 10-04-08 15-06-07 09-04-07 15-05-06 15-12-05 Final Final

Dividend Type

Dividend 165.00 80.00

Interim Final Interim Final Interim Final Interim

45.00 60.00 45.00 50.00 40.00 35.00 35.00
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11-04-05 24-01-05

25-04-05 09-02-05

Final Interim 30.00

35.00

Stock Prices (around the time periods of dividend declaration):-

114

Analysis and Comparison:-

• In April 2008, a dividend of 45% was declared. The Stock prices changed from a price of Rs. 283.05 in March to an average price of Rs. 309.5 in April and then increased to a price of Rs. 346.8 in May. Thus Declaration of Dividend had a positive impact on the market price of shares.

• In June 2008, a dividend of 60% was declared. The Stock prices changed from a price of Rs. 344.5 in May to an average price of Rs. 303.05 in June
115

and then decreased to a price of Rs. 261 in July. Thus Declaration of Dividend had a negative impact on the market price of shares.

• In March 2009, a dividend of 45% was declared. The Stock prices changed from a price of Rs. 167.5 in Feb to an average price of Rs. 171.45 in March and then increased to a price of Rs. 181.5 in April. Thus Declaration of Dividend had a positive impact on the market price of shares.

• In July 2009, a dividend of 80% was declared. The Stock prices changed from a price of Rs. 329.95 in June to an average price of Rs. 339.75 in July and then increased to a price of Rs. 345 in August. Thus Declaration of Dividend had a positive impact on the market price of shares.

116

ICICI Bank:ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution, in 1994. Four years later, when the company offered ICICI Bank's shares to the public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity offering in the form of ADRs on the New York Stock Exchange (NYSE), thereby becoming the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired the Bank of Madura Limited in an all-stock amalgamation. Later in the year and the next fiscal year, the bank made secondary market sales to institutional investors. With a change in the corporate structure and the budding competition in the Indian Banking industry, the management of both ICICI and ICICI Bank were of the opinion that a merger between the two entities would prove to be an essential step. It was in 2001 that the Boards of Directors of ICICI and ICICI Bank sanctioned the amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. In the following year, the merger was approved by its shareholders, the High Court of Gujarat at Ahmadabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of India. Present Scenario ICICI Bank has its equity shares listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited. Overseas, its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). As of December 31, 2008, ICICI is India's second-largest bank, boasting an asset value of Rs. 3,744.10 billion and profit after tax Rs. 30.14 billion, for the nine months, that ended on December 31, 2008.

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Financial Performance:-

Annual results in brief Mar ' 10 Sales Operating profit Interest Gross profit EPS (Rs) 25,706.93 15,460.24 17,592.57 Mar ' 09 31,092.55 20,239.18 22,725.93

(in crores) Mar ' 08 30,788.34 19,729.57 23,484.24 7,960.69 37.37 Mar ' 07 22,994.29 14,077.37 16,358.50 5,874.40 34.58 Mar ' 06 14,306.13 7,710.91 9,597.45 4,690.67 28.55

9,732.18 8,925.23 36.10 33.76

Annual results in details Mar ' 10 7,477.65 1,925.79 3,934.04 4,386.86 1,320.34 Mar ' 09 7,603.72 1,971.70 5,073.41 3,808.26 1,358.84 Mar ' 08 8,810.77 2,078.90 6,075.28 2,904.59 898.37 Mar ' 07 5,929.17 1,616.75 5,073.81 2,226.36 537.82 Mar ' 06 4,983.14 1,082.29 3,918.86 1,594.07 556.53
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Other income Stock adjustment Raw material Power and fuel Employee expenses Excise Admin and selling expenses Research and development expenses Expenses capitalized Other expenses Provisions made Depreciation Taxation

Net profit / loss

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 4,024.98 3,758.13 4,157.73 3,110.22 2,540.07

Financial Ratios:Per share ratios

Mar ' 10 Mar ' 09
Adjusted EPS (Rs) 34.90 33.60 39.70 33.76 39.85 11.00 48.58 444.94 444.94 343.59

Mar ' 08
36.78 41.97 37.37 42.56 11.00 51.29 417.64 417.64 354.71 346.21

Mar ' 07
33.30 39.36 34.59 40.64 10.00 42.19 270.37 270.37 316.45 199.52

Mar ' 06
28.47 35.48 28.55 35.56 8.50 36.75 249.55 249.55 196.87 193.24

Adjusted cash EPS (Rs) 40.45 Reported EPS (Rs) 36.10

Reported cash EPS (Rs) 41.66 Dividend per share OP per share (Rs) 12.00 49.80

Book value per share (Rs) 463.01 Book value per share (Rs.) 463.01 NOI per share (Rs) 293.74

Free reserves per share (Rs)356.94 351.04

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Profitability ratios
Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) 16.95 14.13 14.45 12.99 10.51 11.81 13.33 11.41 10.81 12.30 18.66 15.10 14.12 17.55

15.06 12.36 12.17 9.74

13.64 11.45

Leverage ratios
Long term debt / Equity Total debt/equity Owners fund as % of total Fixed assets turnover ratio 3.91 20.35 4.60 0.01 4.42 18.46 5.14 0.01 5.27 15.95 5.61 0.01 9.50 9.52 4.52 0.01 7.45 11.83 2.94

Liquidity ratios
Current ratio Current ratio (inc. st loans) Quick ratio 1.94 0.13 14.70 0.78 0.13 5.94 0.72 0.10 6.42 0.61 0.08 6.04 0.62 0.08 6.64

Dividend Declaration Table:-

Announcement Date Dividend (%)
26-04-10 27-04-09

Effective Date
10-06-10 11-06-09 Final Final

Dividend Type
120.00 110.00

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28-04-08 30-04-07 29-04-06 02-05-05

10-07-08 14-06-07 06-07-06 04-08-05

Final Final Final Final

110.00 100.00 85.00 85.00

Stock Prices (around the time periods of dividend declaration):-

121

Analysis and Comparison:-

• In July 2008, a dividend of 110% was declared. The Stock prices changed from a price of Rs. 630.2 in June to an average price of Rs. 632.4 in July and then decreased to a price of Rs. 610 in August. Thus Declaration of Dividend had a negative impact on the market price of shares in short run.

122

• In June 2009, a dividend of 110% was declared. The Stock prices changed from a price of Rs. 740.7 in May to an average price of Rs. 738.5 in June and then increased to a price of Rs. 740 in July. Thus Declaration of Dividend had an indifferent impact on the market price of shares in short run but the trend shows that it had a positive impact in a long run. • In June 2010, a dividend of 120% was declared. The Stock prices changed from a price of Rs. 867.05 in May to an average price of Rs. 863.5 in June and then decreased to a price of Rs. 854 in July. Thus Declaration of Dividend had a negative impact on the market price of shares in short run.

123

Punjab National Bank (PNB):The bank was established in 1895 at Lahore. PNB's founders included several leaders of the Swadeshi movement like Dyal Singh Majithia, Lala HarKishen Lal, Lala Lalchand, Kali Prosanna Roy, EC Jessawala, Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively associated with the banks’s management in its early years. It holds the distinction of being the first Indian bank to have been started solely with Indian capital. In 1969, it was nationalized by the Government of India along with 13 other banks. Punjab National Bank (PNB) is the second largest government-owned commercial bank in India. Having more than 3.5 crore customer, Punjab National Bank has one of the largest branch networks in India. The bank's assets for financial year 2007 were about US$60 billion. Products and Services Savings Fund Account - Total Freedom Salary Account, PNB Prudent Sweep, PNB Vidyarthi SF Account, PNB Mitra SF Account Current Account - PNB Vaibhav, PNB Gaurav, PNB Smart Roamer Fixed Deposit Schemes - Spectrum Fixed Deposit Scheme, Anupam Account, Mahabachat Schemes, Multi Benefit Deposit Scheme Credit Schemes - Flexible Housing Loan, Car Finanace, Personal Loan, Credit Cards Social Banking - Mahila Udyam Nidhi Scheme, Krishi Card, PNB Farmers Welfare Trust Corporate Banking - Gold Card scheme for exporters, EXIM finance Business Sector - PNB Karigar credit card, PNB Kushal Udhami, PNB Pragati Udhami, PNB Vikas Udhami Apart from these, the PNB also offers locker facilities, senior citizens schemes, PPF schemes and various E-services.
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Financial Performance for the past years: -

Profit & Loss account

------------------- in Rs. Cr. ------------------Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 12 mths 12 mths 12 mths 12 mths 12 mths

Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses

8,459.85 9,584.15 11,537.48 14,265.02 19,326.16 1,854.54 1,478.23 1,343.64 1,997.56 2,919.69 10,314.39 11,062.38 12,881.12 16,262.58 22,245.85 4,453.11 2,121.23 618.28 183.28 1,528.37 0.00 3,257.26 1,193.90 8,904.27 4,917.39 2,114.97 638.79 186.65 1,765.27 0.00 3,263.15 1,442.53 6,022.91 2,352.45 1,032.50 194.80 1,738.38 0.00 3,926.05 1,392.08 8,730.86 12,295.30 2,461.54 2,924.38 884.19 170.23 1,966.98 0.00 3,902.55 1,580.39 1,406.42 191.06 2,337.80 0.00 5,026.81 1,832.85

9,623.07 11,341.04 14,213.80 19,154.96
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Mar '05 12 mths Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 1,410.12 0.00 0.00 1,410.12 0.00 174.18 23.48 44.72 30.00 248.93

Mar '06 12 mths 1,439.31 0.00 0.00 1,439.31 0.00 189.18 26.53 45.65 60.00 287.79

Mar '07 12 mths 1,540.08 0.00 183.49 1,723.57 0.00 409.89 63.11 48.84 100.00 321.65 435.06 800.00 473.00 15.52 1,723.58

Mar '08 12 mths 2,048.76 0.00 15.52 2,064.28 0.00 409.89 69.66 64.98 100.00 341.98 596.14 988.59 479.55 0.00 2,064.28

Mar '09 12 mths 3,090.88 0.00 0.00 3,090.88 0.00 630.61 107.17 98.03 200.00 416.74 1,155.46 1,190.00 737.78 7.64 3,090.88

1,212.46 -1,512.23 0.00 197.66 0.00 1,410.12 2,552.34 215.71 183.49 1,439.31

Financial Ratios Mar ' 09 Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share 97.97 104.03 98.03 104.09 20.00

(in crores) Mar ' 08 64.94 70.34 64.98 70.38 10.00 Mar ' 07 48.82 55.00 48.84 55.02 10.00 Mar ' 06 45.56 51.48 45.65 51.57 6.00 Mar ' 05 44.70 50.52 44.72 50.54 6.00
126

Operating profit per share (Rs) Book value (excl rev res) per share (Rs) Book value (incl rev res) per share (Rs.) Net operating income per share (Rs) Free reserves per share (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio

Mar ' Mar ' Mar ' Mar ' Mar ' 09 08 07 06 05 151.48 109.81 74.53 57.00 69.32 41.28 10.23 694.81 64.04 21.80 20.93 13.76 14.60 23.50 23.52 129.83 15.96 5.89 5.64 0.27 0.02 9.75 23.86 22.47 76.12 341.98 390.68 505.09 63.79 21.74 20.67 12.68 13.72 18.99 19.00 111.52 15.44 6.08 4.35 0.29 0.02 9.40 23.40 21.61 76.59 321.65 330.97 383.89 64.29 19.41 17.80 12.53 14.10 15.17 15.18 80.76 13.79 6.76 5.48 0.39 0.02 11.10 30.71 27.26 69.28 287.79 297.38 310.53 69.61 18.35 16.44 14.50 16.35 15.83 15.86 74.57 13.19 7.04 4.75 0.39 0.02 10.69 14.98 13.26 84.99 248.93 258.84 308.04 63.79 22.50 20.61 13.84 15.64 17.95 17.96 81.00 13.14 7.06 5.28 0.25 0.02 5.98 14.01 12.40 85.98

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Dividend Declaration Table:-

Announcement Date Dividend (%)
06-05-10 27-01-10 20-05-09 15-05-08 23-05-07 31-01-07 22-05-06 31-10-05 29-04-05 28-01-05

Effective Date
08-07-10 04-02-10 04-06-09 29-05-08 07-06-07 14-02-07 22-06-06 29-11-05 16-06-05 25-02-05 Final Interim Final Final Final Interim Final Interim Final Interim

Dividend Type
120.00 100.00 200.00 130.00 60.00 40.00 60.00 30.00 30.00 30.00

128

Stock Prices (around the time periods of dividend declaration):-

129

Analysis & Comparison :-

• In May 2008, a dividend of 130% was declared. The Stock prices changed from a price of Rs. 550.90 in April to an average price of Rs. 520.4 in May and then decreased to a price of Rs. 487 in June. Thus Declaration of Dividend had a negative impact on the market price of shares.

• In June 2009, a dividend of 200% was declared. The Stock prices changed from a price of Rs. 670.70 in May to an average price of Rs. 678.85 in June and then increased to a price of Rs. 683.40 in July. Thus Declaration of Dividend had a positive impact on the market price of shares.

• In Feb 2010, a dividend of 100% was declared. The Stock prices changed from a price of Rs. 899.50 in Jan to an average price of Rs. 896.22 in Feb.
130

and then increased to a price of Rs. 916 in March. Thus Declaration of Dividend had a positive impact on the market price of shares.

131

Andhra Bank" was founded by the eminent freedom fighter and a multifaceted genius, Dr.Bhogaraju Pattabhi Sitaramayya. The Bank was registered on 20th November 1923 and commenced business on 28th November 1923 with a paid up capital of Rs 1.00 lakh and an authorised capital of Rs 10.00 lakhs.

Profit & Loss account of Andhra Bank Mar '06
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------------------- in Rs. Cr. ------------------Mar '07 Mar '08 Mar '09 Mar '10

12 mths
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12 mths

12 mths

12 mths 12 mths

Income Interest Earned Other Income Total Income Expenditure 2,674.37 458.07 3,132.44 3,315.33 522.46 3,837.79 4,289.87 661.65 4,951.52 5,374.62 6,372.87 765.38 964.62

6,140.00 7,337.49

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Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses

1,505.39 492.89 217.86 64.80 299.49 0.00 897.95 177.09 2,580.43 Mar '06

1,897.79 548.80 293.33 55.73 504.24 0.00 1,025.78 376.32 3,299.89 Mar '07

2,870.00 509.39 335.04 61.33 600.19 0.00 1,042.93 463.02 4,375.95 Mar '08

3,747.71 4,178.13 624.06 411.79 81.76 621.63 0.00 824.08 574.14 102.00 613.29 0.00

1,274.39 1,654.75 464.85 458.76

5,486.95 6,291.64 Mar '09 Mar '10

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12 mths
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12 mths

12 mths

12 mths 12 mths

Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves

552.02 0.00 75.46 627.48 0.00 169.75 23.81

537.90 0.00 76.19 614.09 0.00 184.30 28.44

575.57 0.00 76.23 651.80 0.00 194.00 32.97

653.05 1,045.85 0.00 76.83 0.00 152.94

729.88 1,198.79 0.00 218.25 37.09 0.00 242.50 40.28

11.38 35.00 59.67

11.09 38.00 65.08

11.87 20.00 67.00

13.46 45.00 75.20

21.56 50.00 90.93

121.38 169.83

134.48 190.64

144.00 204.00

271.60 50.00 133

415.36 300.00

Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total
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193.56 76.19 560.96

212.74 76.23 614.09

226.97 76.83 651.80

255.34 152.94

282.78 200.66

729.88 1,198.80

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Key Financial Ratios of Andhra Bank
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------------------- in Rs. Cr. ------------------Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

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Investment Valuation Ratios Face Value 10.00 Dividend Per Share 3.50 Operating Profit Per Share 11.28 (Rs) Net Operating Profit Per 59.50 Share (Rs) Free Reserves Per Share 31.74 (Rs) Bonus in Equity Capital -Profitability Ratios Interest Spread 4.72 Adjusted Cash Margin(%) 20.09 Net Profit Margin 15.83 Return on Long Term 71.26 Fund(%) Return on Net Worth(%) 23.34 Adjusted Return on Net 16.76 Worth(%) Return on Assets 1.36 Excluding Revaluations Return on Assets 1.36 Including Revaluations

10.00 3.80 12.08 71.21 34.66 -4.72 16.03 14.53 84.98 17.78 17.03 1.13 1.13

10.00 2.00 14.76 94.18 32.68 -4.04 13.10 11.84 116.48 17.71 17.70 1.02 1.02

10.00 4.50 14.93 116.79 34.25 -3.78 12.32 10.96 126.87 17.90 17.89 0.95 0.95

10.00 5.00 26.67 144.83 41.42 -4.48 15.54 14.17 127.15 23.71 23.70 90.93 90.93

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Management Efficiency Ratios Interest Income / Total 7.86 Funds Net Interest Income / Total 3.76 Funds Non Interest Income / 0.49 Total Funds Interest Expended / Total 4.10 Funds Operating Expense / Total 2.27 Funds Profit Before Provisions / 1.63 Total Funds Net Profit / Total Funds 1.50 Loans Turnover 0.15 Total Income / Capital 8.36 Employed(%) Interest Expended / 4.10 Capital Employed(%) Total Assets Turnover 0.08 Ratios Asset Turnover Ratio 5.72 Profit And Loss Account Ratios Interest Expended / 56.29 Interest Earned Other Income / Total 5.90 Income Operating Expense / Total 27.17 Income Selling Distribution Cost 0.39 Composition Balance Sheet Ratios Capital Adequacy Ratio 14.00 Advances / Loans 69.92 Funds(%) Debt Coverage Ratios Credit Deposit Ratio 64.45 Investment Deposit Ratio 35.94 Cash Deposit Ratio 9.65 Total Debt to Owners 11.72

7.83 3.53 0.56 4.30 2.20 1.76 1.22 0.14 8.39 4.30 0.08 6.33 57.24 6.66 26.22 0.35

8.77 3.26 0.56 5.51 1.89 1.82 1.11 0.15 9.33 5.51 0.09 7.60 66.90 5.99 20.20 0.21

9.06 3.07 0.47 5.99 1.91 1.50 1.04 0.14 9.53 5.99 0.09 8.01 69.73 4.92 20.02 0.18

8.85 3.58 0.45 5.26 1.96 1.95 1.32 0.14 9.29 5.26 0.09 20.08 65.56 4.80 21.04 0.09

11.33 72.56

11.61 74.26

13.22 79.73

13.93 77.80

66.32 34.16 9.03 13.13

68.35 32.13 8.64 15.21

72.02 29.23 8.96 16.28

73.14 27.57 8.43 17.62
135

Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Leverage Ratios Current Ratio Quick Ratio Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times
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1.48 1.41

1.44 1.31

1.35 1.22

1.27 1.20

1.39 1.27

0.05 8.97 39.86 31.38 60.10 68.60 55.04 Mar '06

0.03 14.55 39.55 35.83 60.43 64.15 69.87 Mar '07 11.09 65.08

0.03 12.27 39.43 35.63 60.55 64.35 77.65 Mar '08 11.87 67.00

0.03 12.32 39.09 34.74 60.89 65.24 80.86 Mar '09 13.46 75.20

0.02 27.03 27.03 24.63 72.95 75.36 67.71 Mar '10 21.56 90.93

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Earnings Per Share Book Value
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11.38 59.67

Andhra Bank - Research Center Dividend Year Month Dividend (%) 2010 Apr 2009 May 2008 Apr 2008 Feb 50 45 20 20

136

Year Month Dividend (%) 2007 Apr 2007 Mar 2006 May 2005 Apr 2005 Jan 2004 Apr 2003 Nov 2003 May 2002 May 2001 Jun 18 20 35 15 15 14 14 24 14 10

Date 8-Jul-10 9-Jul-10 12-Jul-10 13-Jul-10 14-Jul-10

Open Price 135.6 135.35 136.1 136.35 138.5

High Price 135.6 136 137.9 138.9 139.9

Low Price 134 134.15 134.9 134.75 136.75

Close Price

WAP

No.of Shares 75926 75398

No. of Trades

Total Turnover (Rs.)

Spread Spread HighCloseLow Open 1.6 1.85 3 4.15 3.15
137

134.05 134.4327 135.45 136.35 135.459

509 10206940 743 10213334 913 16407100 1195 21978896 615 8342335

-1.55 0.1 0.25 1.65 -1.3

136.479 120217

138 137.8999 159383 137.2 137.9993 60452

15-Jul-10 16-Jul-10 19-Jul-10 20-Jul-10 21-Jul-10 22-Jul-10 23-Jul-10 26-Jul-10 27-Jul-10 28-Jul-10 29-Jul-10 30-Jul-10 2-Aug-10 3-Aug-10 4-Aug-10 5-Aug-10 6-Aug-10 9-Aug-10 ######## ######## ########

137.2 137.3 138.6 149.4 150.7 145 145.4 146.7 141.65 142.2 137.7 140 146.4 147 146.5 145.75 147 143 145.85 146.35 143.3

138.85 140 147.9 150.85 151.25 145.8 147.5 146.7 144.35 142.3 142.75 146.8 147.75 148.9 148.15 148.5 147.15 144.25 147.85 146.5 148

136.85 137.3 138 146.15 145.25 143.1 143.9 141.2 141.1 135.65 136 140 144.5 145.05 144.2 145.05 141.25 142 145 143.45 141.05

137.1 137.3257 276609 138.6 138.9785 102844 147.05 144.9948 664833 149.2 148.8546 620540 145.8 147.4 236540

840 37985537 1069 14293107 5509 96397352 4327 92370258 1731 34865990 1103 55367007 1261 19929486 2979 37072017 1328 20864714 1527 23275023 4255 86809482 2868 47174359 2383 46175582 1649 25593510 870 14624650 1844 43253606 1534 15528085 1216 17825572 2480 44186557 898 14440217 2065 35167449

2 2.7 9.9 4.7 6 2.7 3.6 5.5 3.25 6.65 6.75 6.8 3.25 3.85 3.95 3.45 5.9 2.25 2.85 3.05 6.95

-0.1 1.3 8.45 -0.2 -4.9 -1.25 0.15 -5.15 0.3 -4.8 2.55 3.2 0.1 -0.4 -0.75 0.15 -4.7 0.95 0 -2.6 4.3

143.75 143.7537 385152 145.55 145.6631 136819 141.55 143.1247 259019 141.95 142.6793 146235 137.4 139.1814 167228 140.25 139.4947 622314 143.2 144.5102 326443 146.5 146.3151 315590 146.6 146.7964 174347 145.75 146.1062 100096 145.9 147.2744 293694 142.3 144.3869 107545 143.95 143.5647 124164 145.85 146.2714 302086 143.75 144.5062 99928

147.6 145.2684 242086

138

FEDERAL BANK History: The history of Federal Bank dates back to the pre-independence era. Though initially it was known as the Travancore Federal Bank, it gradually transformed into a full-fledged bank under the able leadership of its Founder, Mr. K P Hormis. The name Federal Bank Limited was officially announced in the year 1947 with its headquarters nestled on the banks on the river Periyar. Since then there has been no looking back and the bank has become one of the strongest and most stable banks in the country.

Vision: Develop into a stronger and more efficient and profitable financial institution with a growing share of the market, providing an expanding range of products and services to a growing clientele within and outside the country, adopting best industry practices and employing contemporary technology, and be counted among the top private banks in the country. Mission: Devote balanced attention to the interests and expectations of stakeholders, and in particular: Shareholders: Achieve a consistent annual post-tax return of at least 20% on net worth. Employees: Develop in every employee a high degree of pride and loyalty in serving the Bank.

Customers: Meet and even exceed expectations of target customers by delivering appropriate products and services, employing, as far as feasible, the single-window and 24-hour-seven-day-week concepts, leveraging
139

strengthened branch infrastructure, ATMs, and other alternative distribution channels, cross-selling a range of products and services to meet customer needs varying over time, and ensuring the highest standards of service at all times. Pursue excellence in various facets of banking. Adopt best industry practices. Develop, adopt, and review a well-conceived business plan for achieving realistic targets of growth, profitability, and market share over the medium term. Operate within a well-defined, diversified, risk profile and adopt prudent risk-management norms and processes and effective control practices. Employ and leverage appropriate modern information technology to: enhance the quality, speed, and accuracy of product/service delivery; provide ‘anytime-anywhere’ banking facility; strengthen management information and control systems and processes; improve productivity; and reduce costs. Increase awareness of the "Federal Bank" brand among targeted customer groups through cost-effective marketing. Adopt a robust corporate governance code emphasizing a high degree of professionalism of the Board and the management, and accountability and disclosure to shareholders. Decentralise decision making with accountability for decisions made, and assign cascading profit responsibilities to middle and junior management. Develop a conducive and transparent work environment that fosters staff commitment, competence, initiative, innovation, teamwork and serviceorientation.

140

Federal Bank

Key Financial Ratios of Federal Bank
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------------------- in Rs. Cr. -------------------

Mar '05
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Mar '06

Mar '07

Mar '08

Mar '

Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Interest Spread Adjusted Cash Margin(%) Net Profit Margin Return on Long Term Fund(%) Return on Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including 6.19 9.25 7.09 112.39 13.28 12.57 0.54 0.54 4.84 15.05 13.64 89.71 22.99 17.92 1.09 1.09 5.01 15.02 13.91 99.01 21.38 19.52 1.17 1.17 4.79 13.80 12.78 55.12 9.39 9.39 1.13 1.13 10.00 2.50 14.77 184.12 44.15 66.66 10.00 3.50 30.82 180.58 65.49 51.09 10.00 4.00 48.04 229.85 80.81 51.20 10.00 4.00 23.99 157.25 168.04 25.62

10.

5.

38.

206.

179.

25.

6.

14.

13.

65.

11.

11.

141

Revaluations Management Efficiency Ratios Interest Income / Total Funds Net Interest Income / Total Funds Non Interest Income / Total Funds Interest Expended / Total Funds Operating Expense / Total Funds Profit Before Provisions / Total Funds Net Profit / Total Funds Loans Turnover Total Income / Capital Employed(%) Interest Expended / Capital Employed(%) Total Assets Turnover Ratios Asset Turnover Ratio Profit And Loss Account Ratios Interest Expended / Interest Earned Other Income / Total Income Operating Expense / Total Income Selling Distribution Cost Composition Balance Sheet Ratios Capital Adequacy Ratio Advances / Loans Funds(%) Debt Coverage Ratios Credit Deposit Ratio Investment Deposit Ratio 57.63 39.44 62.17 36.50 67.49 33.72 71.17 35.92 11.27 60.88 13.75 69.31 13.43 72.96 22.46 77.07 57.83 4.84 33.26 0.30 58.25 6.37 26.97 0.18 59.70 6.45 22.41 0.19 65.49 6.58 21.94 0.28 7.57 3.25 0.38 4.32 2.65 0.82 0.56 0.15 7.95 4.32 0.08 3.30 8.26 3.79 0.56 4.47 2.38 1.83 1.20 0.15 8.82 4.47 0.08 4.67 8.61 3.86 0.59 4.75 2.06 2.29 1.28 0.15 9.20 4.75 0.09 5.42 9.34 3.62 0.66 5.72 2.19 1.98 1.28 0.16 10.00 5.72 0.09 6.19

9.

4.

0.

5.

2.

2.

1.

0.

10.

5.

0.

6.

60.

7.

22.

0.

20.

75.

71.

38.

142

Cash Deposit Ratio Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Leverage Ratios Current Ratio Quick Ratio Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times
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4.94 21.22 1.23 1.17

5.76 14.38 1.44 1.30

6.20 14.43 1.50 1.29

7.55 6.61 1.36 1.24

7.

7.

1.

1.

0.03 13.87

0.03 14.98

0.03 13.62

0.02 11.65

0.

15.

20.80 15.95 79.18 84.04 129.37

15.16 13.61 84.67 86.26 71.94

13.68 12.64 86.29 87.33 68.31

21.74 20.14 78.26 79.86 65.22

19.

18.

79.

81.

59.

Mar '05
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Mar '06

Mar '07

Mar '08

Mar '

Earnings Per Share Book Value
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13.73 109.14

26.31 145.19

34.20 174.71

21.52 229.16

29.

252.

Profit & Loss account of Federal Bank Mar '05
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------------------- in Rs. Cr. ------------------Mar '06 Mar '07 Mar '08 Mar '09

12 mths
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12 mths

12 mths

12 mths 12 mths

Income 143

Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses

1,191.03 221.74 1,412.77

1,436.53 233.10 1,669.63

1,817.35 302.59 2,119.94

2,515.44 3,315.38 394.99 515.78

2,910.43 3,831.16

688.75 185.78 200.88 27.44 219.84 0.00 449.64 184.30 1,322.69 Mar '05

836.73 228.36 176.61 25.74 176.99 0.00 471.06 136.64 1,444.43 Mar '06

1,084.96 260.45 171.06 23.97 286.77 0.00 495.39 246.86 1,827.21 Mar '07

1,647.42 1,999.92 271.23 297.72 29.22 296.78 0.00 660.93 234.02 317.45 477.85 42.84 492.60 0.00 917.96 412.78

2,542.37 3,330.66 Mar '08 Mar '09

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12 mths
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12 mths

12 mths

12 mths 12 mths

Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%)

90.09 0.00 0.49 90.58 0.00 16.45 2.30

225.21 0.00 2.30 227.51 0.00 29.96 4.20

292.73 0.00 13.46 306.19 0.00 34.24 5.82

368.05 0.00 14.46 382.51 0.00 68.41 11.63

500.49 0.00 14.62 515.11 0.00 85.52 14.54

13.73 25.00

26.31 35.00

34.20 40.00

21.52 40.00 144

29.21 50.00

Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total
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109.14

145.19

174.71

229.16

252.15

69.53 0.00 18.75 2.30 90.58

79.31 100.57 34.16 13.46 227.50

121.47 130.21 40.06 14.46 306.20

156.11 131.74 80.04 14.62 382.51

195.87 197.25 100.06 21.93 515.11

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145

146

BANK OF MAHARASHTRA

The Genesis Prof. V. G. Kale and the late Shri D. K. Sathe and registered as a banking company on the 16th of September, 1935 at Pune. The authorized capital was Rs. 10 Lakhs and issued capital of Rs. 5 Lakhs. Their vision was to reach out to and serve the common man and meet all their banking needs. Successive leadership of the Bank and the employees have endevoured to fulfill their vision. Vision 2010 To be a vibrant, forward looking, techno-savvy, customer centric bank serving diverse sections of the society, enhancing shareholders’ and employees’ value while moving towards global excellence.

147

148

149

150

State Bank of India

The Bank is actively involved since 1973 in non-profit activity called Community Services Banking. All our branches and administrative offices throughout the country sponsor and participate in large number of welfare activities and social causes. Our business is more than banking because we touch the lives of people anywhere in many ways.

151

152

153

154

155

Bank of India :-

Introduction Bank of India being a major bank in the public sector always endeavours to strike a viable equilibrium between commercial objectives and social responsibilities. As a reaffirmation of our commitment to the corporate mission, we in our centenary year, started credit counseling services at free of cost to the Common People to enable them to lead a respectable life. The Credit Counseling services were started under the aegis of the Trust "ABHAY " which was launched at the hands of His Excellency President of India Dr. A.P.J. Abdul Kalam at New Delhi on 25th August, 2006. The first center was inaugurated at Mumbai by Dr. Y.V.Reddy, Governor, Reserve Bank of India on 7th September,2006 which was followed by Centres at Wardha in Nagpur and Chennai. The following are the main objectives of the Trust. • Advising on gaining access to structured financial system including banking • Creating awareness among the public about financial management • Counseling people who are struggling to meet the repayment obligations and helping debt resolution • Helping in rehabilitation of borrowers in Friendly and timely guidance coupled with related support extended by the counselors will not only mitigate the immediate stress of the trapped individuals and their households, but it will also help to infuse confidence in others who are in distress, irrespective whether they are customers of Bank of India or other Banks. With the common objectives of counseling the borrowers, different focus
156

is being given in metro/urban and rural areas, to meet their different needs. Our endeavour is continuing to be provide more and more social services in the years to come. The relationship we maintain is beyond banking Company performance 1) Profit of last five years Profit(rs cr) Mar-06 701.44 Mar -07 1123.17 Mar-08 2009.40 Mar-09 3007.35 Mar-10 1741.07 2) Key financial ratios ------------------- in Rs. Cr. ------------------Mar '06 Investment Valuation Ratios Face Value 10.00 Dividend Per Share 3.40 Operating Profit Per Share (Rs) 16.48 Net Operating Profit Per 159.09 Share (Rs) Free Reserves Per Share 44.47 (Rs) Bonus in Equity Capital -Profitability Ratios Interest Spread 4.13 Adjusted Cash Margin(%) 9.82 Net Profit Margin 8.63 Return on Long Term 109.76 Fund(%) Return on Net Worth(%) 15.37 Adjusted Return on Net 14.52 Mar '07 Mar '08 10.00 3.50 28.74 10.00 4.00 44.53 Mar '09 10.00 8.00 73.29 349.31 113.79 -4.96 16.25 15.89 127.39 25.51 25.51 Mar '10 10.00 7.00 43.27 375.40 125.70 -4.57 9.09 8.59 114.17 13.60 13.60
157

Year

209.46 261.51 55.15 -4.60 11.23 10.48 94.80 -4.80 14.47 13.96

126.61 122.57 21.25 19.26 22.76 22.76

Worth(%) Return on Assets Excluding 0.62 Revaluations Return on Assets Including 0.63 Revaluations Management Efficiency Ratios Interest Income / Total Funds 7.49 Net Interest Income / Total 3.24 Funds Non Interest Income / Total 0.36 Funds Interest Expended / Total 4.25 Funds Operating Expense / Total 2.47 Funds Profit Before Provisions / 1.04 Total Funds Net Profit / Total Funds 0.68 Loans Turnover 0.13 Total Income / Capital 7.85 Employed(%) Interest Expended / Capital 4.25 Employed(%) Total Assets Turnover Ratios 0.07 Asset Turnover Ratio 4.63 Profit And Loss Account Ratios Interest Expended / Interest 62.55 Earned Other Income / Total Income 4.53 Operating Expense / Total 31.45 Income Selling Distribution Cost 0.17 Composition Balance Sheet Ratios Capital Adequacy Ratio 10.75 Advances / Loans Funds(%) 70.61 Debt Coverage Ratios Credit Deposit Ratio 70.15 Investment Deposit Ratio 34.72

0.79 0.79 8.05 3.52 0.40 4.53 2.42 1.43 0.89 0.14 8.45 4.53 0.08 5.89 62.52 4.71 28.64 0.41 11.75 75.06 70.21 31.46

1.12 1.13 8.62 3.52 0.41 5.10 2.05 1.83 1.26 0.14 9.03 5.10 0.09 3.98 65.77 4.55 22.72 0.22 12.04 80.00 73.51 28.64

224.39 256.96 9.15 3.74 0.29 5.41 1.82 2.18 1.50 0.14 9.44 5.41 0.09 5.13 66.36 3.07 19.27 0.12 13.01 80.20 75.47 27.79

243.75 270.96 7.93 3.05 0.22 4.87 2.14 1.09 0.70 0.13 8.14 4.87 0.08 5.20 67.80 2.65 26.27 0.24 12.94 74.66 74.24 28.53
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Cash Deposit Ratio 5.50 Total Debt to Owners Fund 19.46 Financial Charges Coverage 1.27 Ratio Financial Charges Coverage 1.18 Ratio Post Tax Leverage Ratios Current Ratio 0.03 Quick Ratio 9.89 Cash Flow Indicator Ratios Dividend Payout Ratio Net 23.76 Profit Dividend Payout Ratio Cash 20.88 Profit Earning Retention Ratio 76.23 Cash Earning Retention Ratio 79.11 AdjustedCash Flow Times 117.73 Mar '06 Earnings Per Share 14.39 Book Value 99.03 Source : Religare Technova Dividends Declared Announcement Effective Date Date 07-05-10 08-07-10 29-04-09 02-07-09 26-02-09 13-03-09 30-04-08 03-07-08 23-04-07 29-06-07 04-12-06 19-12-06 28-04-06 04-07-06 Source : Religare Technova

5.98 20.86 1.33 1.21 0.02 10.30 17.51 16.12 82.24 83.67 99.57

7.02 17.00 1.37 1.26 0.02 11.63 12.23 11.80 87.77 88.20 72.03

6.08 16.10 1.41 1.28 0.03 12.30 16.34 15.97 83.66 84.03 61.66 Mar '09 57.26 224.39

5.85 17.95 1.23 1.15 0.02 22.15 24.61 23.26 75.39 76.74 124.71 Mar '10 33.15 243.75

Mar '07 Mar '08 23.04 38.26 117.89 168.06

Dividend Type Final Final Interim Final Final Interim Final

DividendRemarks (%) 70.0050.0030.0040.00AGM 15.00AGM 20.0030.00AGM

159

Analysis The company declared the dividend on the following dates 07/05/2010, 29/04/2009, 26/02/2009, 30/04/2008, 23/04/2007, 04/12/2006, 28/04/2006. We can see the trend of share prices before and after the three months of dividend declared in the following table Month Jan-2006 Feb-2006 Mar-2006 Apr-2006 May-2006 Jun-2006 Jul-2006 Sep-2006 Oct-2006 Nov-2006 Dec-2006 Jan-2007 Feb-2007 Mar-2007 Apr-2007 May-2007 Jun-2007 Jul-2007 Jan-2008 Feb-2008 Mar-2008 Apr-2008 May-2008 Jun-2008 Jul-2008 Nov-2008 Dec-2008 Jan-2009 Feb-2009 Opening price 128.50 131 132.55 133 126 115.40 102 141 162.15 174 202.80 208.75 192.10 163 159.80 193.10 212.45 233.90 369.80 361 352.10 256.95 348 296 220 250 255 291 248 High price 143.95 141.35 145.35 139.80 156 118.80 115 166.25 175.35 203.80 212 214.40 198.70 186 205.40 216.90 235.25 276.20 466 390 352.10 351.90 368.80 306.70 310 292.50 309 308.25 258 Low price 120.60 117.55 127.80 115 111.75 94.05 79.70 131.20 145 171.50 158 186 150.15 132 151 186.05 181.80 218.20 311 327.10 231.20 253.10 285 205 189 223.80 228 224.55 213.80 Close price 129.75 133.65 132 124.10 114.05 101.90 110.90 162.15 173.60 200.95 207.90 190.90 161.80 167 192.35 210 232.75 258.55 354.85 359.55 252.90 342.65 295 216.65 271.50 250.35 287.70 249.15 225.25
160

Mar-2009 221 235.85 179.60 219.90 Apr-2009 221 279.20 205.30 235.15 May-2009 242 350 226.30 337.85 Jun-2009 344 368 305 352.25 Jul-2009 356.70 364 295.30 329.65 Feb-2010 364.65 369.90 321.05 333.60 Mar-2010 340.85 355 308.85 340.75 Apr-2010 343.75 400 341.50 381.30 May-2010 378 385.80 310.15 329.70 Jun-2010 330.05 351.30 320 342.20 Jul-2010 346.10 415 346 410.40 Aug-2010 416 444.60 416.30 434.30 Dividend declared on apr-2006 had an negative impact on the share prices in the coming two months of may and june after which the share price stabilizes in the month of july and climbs in the month of September. Divedend declared on dec-2006, the trend has repeated itself here also as in the coming two months the share prices has decreased again for the coming months of jan ,feb. Dividend declared on apr-2007, the trend changes in april 2007 where the declaration of dividend has led to an increase in the share prices over the coming months. Dividend declared on april-2008, the dividend declaration has led to a negative impact as the share prices have decreased from around Rs 342 to Rs 216. Dividend declared twice in the year 2009 in the months of feb and apr both decisions have had positive and stabilizing effects on the share prices. Dividend declared on may-2010 has also had a positive impact.

161

ING VYSYA BANK Introduction ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile, Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of Dutch origin, during Oct 2002. The origin of the erstwhile Vysya Bank was pretty humble. It was in the year 1930 that a team of visionaries came together to form a bank that would extend a helping hand to those who weren't privileged enough to enjoy banking services. It's been a long journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank. Profile ING has gained recognition for its integrated approach of banking, insurance and asset management. Furthermore, the company differentiates itself from other financial service providers by successfully establishing life insurance companies in countries with emerging economies, such as Korea, Taiwan, Hungary, Poland, Mexico and Chile. Another specialisation is ING Direct, an Internet and direct marketing concept with which ING is rapidly winning retail market share in mature markets. Finally, ING distinguishes itself internationally as a provider of ‘employee benefits’, i.e. arrangements of nonwage benefits, such as pension plans for companies and their employees. Mission ING`s mission is to be a leading, global, client-focused, innovative and low-cost provider of financial services through the distribution channels of the client’s preference in markets where ING can create value. The new identity
162

The immediate benefit to the bank, ING Vysya Bank, has been the pride of having become a Member of the global financial giant ING. As at the end of the year December 2009, ING's total assets exceeded 1164 billion euros, employed around 110000 people, served over 85 million customers, across 40 countries. This global identity coupled with the back up of a financial power house and the status of being the first Indian International Bank, would also help to enhance productivity, profitability, to result in improved performance of the bank, for the benefit of all the stake holders. Company performance year 2006 2007 2008 2009 2010 Profit(rs cr ) 9.06 88.91 154.95 188.78 242.22 . ----------------------------------- in Rs. Cr --------------------------------Mar '06 Investment Valuation Ratios Face Value 10.00 Dividend Per Share -Operating Profit Per Share 4.96 (Rs) Net Operating Profit Per Share 145.64 (Rs) Free Reserves Per Share (Rs) 60.63 Bonus in Equity Capital -Mar '07 Mar '08 Mar '09 Mar '10

1) Profit of last five years

2) Key financial ratios

10.00 0.65 15.33 169.10 62.62 --

10.00 1.50 19.03 193.57 91.40 --

10.00 2.00 28.85

10.00 2.50 30.60

265.51 230.64 101.45 130.90 --163

Profitability Ratios Interest Spread 4.51 Adjusted Cash Margin(%) 3.19 Net Profit Margin 0.66 Return on Long Term Fund(%) 83.65 Return on Net Worth(%) 1.11 Adjusted Return on Net 0.66 Worth(%) Return on Assets Excluding 0.05 Revaluations Return on Assets Including 0.05 Revaluations Management Efficiency Ratios Interest Income / Total Funds 8.29 Net Interest Income / 3.64 Total Funds Non Interest Income / 0.20 Total Funds Interest Expended / 4.65 Total Funds Operating Expense / 3.35 Total Funds Profit Before Provisions / 0.25 Total Funds Net Profit / Total Funds 0.06 Loans Turnover 0.14 Total Income / Capital 8.48 Employed(%) Interest Expended / Capital 4.65 Employed(%) Total Assets Turnover Ratios 0.08 Asset Turnover Ratio 1.95 Profit And Loss Account Ratios Interest Expended / Interest 60.64 Earned Other Income / Total Income 2.33 Operating Expense / Total 39.55

4.26 7.64 5.57 98.93 9.36 8.45 0.46 0.46 8.58 3.78 0.32 4.80 3.01 0.88 0.50 0.14 8.90 4.80 0.09 2.26 61.32 3.57 33.78

4.18 9.04 7.45 100.14 11.00 10.62 0.61 0.61 8.89 3.59 0.55 5.30 2.72 1.25 0.69 0.15 9.44 5.30 0.09 2.81 70.34 5.78 28.81

5.24 8.07 6.77 118.28 11.87 11.58

5.01 9.91 8.48 79.93 10.91 10.90

154.93 185.04 165.53 194.05 9.53 3.97 0.22 5.56 2.93 1.11 0.66 0.17 9.75 5.56 0.10 3.61 71.00 2.27 30.06 8.45 4.16 0.27 4.28 3.04 1.26 0.74 0.16 8.71 4.28 0.08 3.58 62.84 3.08 34.92
164

Income Selling Distribution Cost 0.40 Composition Balance Sheet Ratios Capital Adequacy Ratio 10.67 Advances / Loans Funds(%) 73.50 Debt Coverage Ratios Credit Deposit Ratio 74.55 Investment Deposit Ratio 32.65 Cash Deposit Ratio 5.82 Total Debt to Owners Fund 14.68 Financial Charges Coverage 1.10 Ratio Financial Charges Coverage 1.06 Ratio Post Tax Leverage Ratios Current Ratio 0.04 Quick Ratio 8.98 Cash Flow Indicator Ratios Dividend Payout Ratio Net -Profit Dividend Payout Ratio Cash -Profit Earning Retention Ratio 100.00 Cash Earning Retention Ratio 100.00 AdjustedCash Flow Times 308.62 Dividends Declared Announcement Effective Date Date 30-04-10 15-06-10 29-04-09 18-08-09 05-05-08 30-05-08 03-05-07 28-05-07

0.22 10.56 78.01 77.23 30.95 6.22 15.54 1.23 1.15 0.05 7.14 7.77 5.44 91.77 94.33 126.48

0.21 10.20 77.08 74.13 30.13 8.94 14.37 1.27 1.17 0.04 7.94 11.45 9.18 88.14 90.57 107.60

0.15 11.65 68.67 69.18 36.99 8.93 15.66 1.23 1.14 0.07 6.57 12.71 10.45 86.97 89.34 110.62

0.15 14.91 65.42 69.47 41.31 8.12 11.65 1.32 1.20 0.05 11.04 14.48 12.39 85.51 87.61 91.37

Dividend Type Final Final Final Final

Dividend Remarks (%) 25.00 20.00 15.00 6.50 AGM

Source : Religare Technova
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Analysis The company declared the dividend as on these dates 30/04/2010, 29/04/2009, 05/50/2008, 03/05/2007 we can see the trend of share prices before and after the declaration of dividend in the following table Month Feb-2007 Mar-2007 Apr-2007 May-2007 Jun-2007 Jul-2007 Aug-2007 Feb-2008 Mar-2008 Apr-2008 May-2008 Jun-2008 Jul-2008 Aug-2008 Jan-2009 Feb-2009 Mar-2009 Apr-2009 May-2009 Jun-2009 Jul-2009 Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010 Jul-2010 Open price 188.35 168 165.30 192.95 264 248 252 310 338 325 319.10 286 216.55 210 149 136 122 130 144.85 175 171.95 300 246 254 281 318.90 303.50 362.50 High price 201.25 177 190 275 280 277 267.80 359.80 344.50 336.50 319.50 295 256.40 243 154.95 157 136.90 175 196.85 198.80 225 314 269 289.7 330.80 337.80 369.90 376.30 Low price 152.60 158 164 191 228 242.10 225 285.20 265 288 277.50 205 190 205 126 121.10 103.25 126 128.15 157.40 154 237.80 235 253.05 272.15 295.15 302 332 Close price 168 174.35 188.65 261.60 247.70 256.50 250.15 353.10 339.40 315.30 291.10 223.05 208.95 241.40 138.80 123.10 129.60 146.35 171.80 169.30 212.10 246 253.70 279.45 319.10 303.85 360.70 349.25

166

Divedend declared on may-2007, the impact of divedend policy has been mild as after slight fluctuation the share prices have stabilized around the average prices of rs250 for the coming three months. Divedend declared on may-2008, the declaration of divedend has had a negative impact on the share prices as they have declined from rs291 to rs 208 for the coming three months. Divedend declared on apr-2009, the declaration of divedend has had a positive impact on the share price as they have increased from rs 146 to rs 212 for the coming three months. Divedend declared on apr-2010, the declaration of divedend had a wobbling impact on the share prices as the same went from rs 303 to rs 360 and then back to rs 349.

167

Oriental Bank of Commerce

Introduction Oriental Bank of Commerce India was established in the year 1943 on 19th February in Lahore. After partition, Oriental Bank of Commerce shifted its Registered Office from Lahore to Amritsar paying every rupee to its departing customers. Oriental Bank of Commerce was nationalised on 15th April in 1980. Oriental Bank of Commerce Fact File
• • • • • • • •

Amongst the strongest banks in India High Capital Adequacy Ratio Consistent Profit-making Bank One of the Lowest Spreads in Banking Industry Total Working crosses the 35700 crore mark CRISIL Ratings The Highest Productivity per Employee NPA - One of the lowest

The OBC Business The total business of Oriental Bank of Commerce has gone up to Rs. 56286 Crore from Rs. 46333 Crore last year thus registering a growth of 21.5%, due to high growth in deposits as well as advances. The deposit growth of OBC has been to the extent of 19.7 %(previous year 4.63%) while in advances the growth is 25.5 % (previous year 10.7%). Technology Implementation Oriental Bank of Commerce of India has implemented Centralized Banking Solution in 21 branches till date. It will give freedom of anywhere and anytime banking to customers. The business captured has resulted in 97%
168

live computerized environment as against 93% last year. More than 350 branches have been networked. Company performance 1) Profit and loss account year 2005 2006 2007 2008 2009 Profit(cr rs) 2881.22 3,478.75 4,526.69 6,418.07 8,020.05

2) Key financial ratios ------------------- in Rs. Cr. --------------------------------Mar '06 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Interest Spread Adjusted Cash Margin(%) Net Profit Margin Return on Long Term Fund(%) Return on Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Management Efficiency Ratios 10.00 4.50 38.41 174.49 144.05 -2.89 19.78 12.54 67.27 13.11 15.53 0.95 0.95 Mar '07 Mar '08 10.00 4.70 40.39 211.26 155.37 -3.21 15.87 15.35 80.04 10.78 13.98 0.79 0.79 10.00 4.70 53.55 291.89 158.83 -3.18 12.36 11.38 111.07 14.55 14.51 0.39 0.39 Mar '09Mar '10 10.00 10.00 7.30 9.10 51.09 73.77 383.69 452.19 159.68 173.69 --3.24 3.79 10.16 10.65 9.33 9.90 124.29 122.32 14.03 15.49 14.03 15.49 0.80 292.19 0.81 328.81
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Interest Income / Total Funds Net Interest Income / Total Funds Non Interest Income / Total Funds Interest Expended / Total Funds Operating Expense / Total Funds Profit Before Provisions / Total Funds Net Profit / Total Funds Loans Turnover Total Income / Capital Employed(%) Interest Expended / Capital Employed(%) Total Assets Turnover Ratios Asset Turnover Ratio Profit And Loss Account Ratios Interest Expended / Interest Earned Other Income / Total Income Operating Expense / Total Income Selling Distribution Cost Composition Balance Sheet Ratios Capital Adequacy Ratio Advances / Loans Funds(%) Debt Coverage Ratios Credit Deposit Ratio Investment Deposit Ratio Cash Deposit Ratio Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Leverage Ratios Current Ratio Quick Ratio Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times Earnings Per Share

7.74 3.29 0.12 4.45 1.59 1.69 0.99 0.15 7.86 4.45 0.08 5.15 61.03 1.54 20.17 0.20 12.46 67.39 60.05 35.86 10.93 9.71 1.41 1.25 0.05 15.03 23.07 20.31 84.00 85.37 57.13 Mar '06 22.24

7.97 2.74 0.14 5.23 1.22 1.55 0.87 0.14 8.10 5.23 0.08 5.87

8.88 2.62 0.09 6.26 0.99 1.63 0.43 0.15 8.97 6.26 0.09 7.54

9.50 2.72 0.08 6.78 1.46 1.27 0.90 0.16 9.58 6.78 0.10 4.66

9.13 3.21 0.10 5.92 1.72 1.52 0.91 0.15 9.23 5.92 0.09 5.30

67.25 75.40 1.70 1.01 15.00 11.03 0.22 0.14 12.51 12.12 76.30 75.62 68.06 69.58 32.07 30.85 8.41 8.92 11.43 13.48 1.32 1.27 1.26 1.18 0.03 0.02 13.87 12.13 16.48 15.16 82.60 84.06 74.87 16.38 15.04 83.57 84.92 85.24

77.46 71.65 0.84 1.12 15.20 18.60 0.14 0.10 12.98 12.54 76.63 74.47 69.83 69.52 29.76 29.40 8.06 6.85 15.25 16.43 1.20 1.27 1.14 1.17 0.02 0.02 12.71 23.15 23.63 21.70 76.38 78.30 99.78 23.50 21.84 76.49 78.15 98.53

Mar '07 Mar '08 23.18 14.10

Mar '09Mar '10 36.14 45.29
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Book Value

206.39

223.53 230.54

257.54 292.19

Source : Religare Technova dividend s Declared oriental bank Announcement Effective Date Date 27-04-09 16-06-09 23-04-08 09-06-08 30-04-07 06-06-07 20-02-07 07-03-07 29-04-06 01-06-06

Dividend Dividend Remarks Type (%) Final 73.00 Final 47.00 Final 27.00 AGM Interim 20.00 Final 45.00 AGM

Analysis The company declared the dividend on following date 27/04/2009, 23/04/2008, 30/04/2007, 20/02/2007, 29/04/2006.we can see the trend of share prices before and after the month of the declaration of dividend in the following table Month Jan-2006 Feb-2006 Mar-2006 Apr-2006 May-2006 Jun-2006 Jul-2006 Nov-2006 Dec-2006 Jan-2007 Feb-2007 Mar-2007 Apr-2007 May-2007 Jun-2007 Jul-2007 Jan-2008 Feb-2008 Open price 271.50 251.10 240 237.80 234.90 200.90 165 258.95 247 228 219 181.90 175 200 236.35 228 272.50 258 High price 281 252.85 249.50 249.90 259.80 203.90 187 261 254 234.30 239.65 191 219 247.50 248.40 264 321 289 Low price 239 229.35 232.50 224.50 176 151.25 138.80 227 210 209.55 175 156.50 165.10 189 205 220.30 205.10 238 Close price 250.45 240.90 235.05 233.05 202.15 170.40 176.45 245.50 226.50 215.90 176.40 187.55 197.15 228.75 225.65 229.60 254 251.10
171

Mar-2008 Apr-2008 May-2008 Jun-2008 Jul-2008 Jan-2009 Feb-2009 Mar-2009 Apr-2009 May-2009 Jun-2009 Jul-2009

243.20 179.20 218.40 174 130.50 153.50 145 113.20 110.50 133.60 190 183

246 219.75 228.50 182.35 168 179 148 120 147 202.80 198 186.35

158 164.05 171 128 122 125 105.15 94.60 108 124.05 168.10 152

176.65 217.40 171.95 128.90 153.85 144.70 115.10 109.90 131.25 187.35 179.30 171.70

Divedend declared on apr-2006, the divedend declaration has had a negative impact on the market price of the share as it come down from rs233 to rs 176. Divedend declared twice in the year of 2007 in the months of feb and apr and had a positive impact on the share prices because it led to a consistent increase in the prices for almost whole of the following quarter. Dividend declared on apr-2008 has made a positive impact but could’t sustain the effect and the share prices retrieve back. Dividend declared on apr-2009 has made a positive impact but could’t sustain the effect and the shre price retrieve back.

172

YES BANK

Introduction & Objective At YES Bank, we are committed to our mission of building the World’s Best Quality Bank in India, by providing our customers with an unparalleled “Customer experience”. Service quality is of paramount importance to us. However, in the event, for some reason, beyond our control or inadvertently, we are unable to meet the service levels committed by us in our dealings with individual customers, this Compensation policy will be applicable. The Compensation policy of the Bank is therefore designed to cover areas relating to, and such as unauthorized debiting of account, Payment of interest to customers for delayed collection of cheques/instruments, Payment of cheques after acknowledgement of stop payment instructions, Remittances within India and Foreign exchange services etc. The policy, which is based on principles of transparency and fairness in the treatment of customers, serves to establish a framework whereby the Bank would compensate the customer, for any financial loss he/she might incur due to deficiency in service on the part of the Bank or any act of omission or commission directly attributable to the Bank. However, it is clearly understood and reiterated that, the policy shall cover the compensation for financial losses which customers might incur, only in those instances, where the deficiency in the services offered by the Bank can be measured directly; and hence, as such the commitments under this policy are without prejudice to any right the Bank will have in defending its position before any forum duly constituted to adjudicate bankercustomer disputes. Further, the Bank shall not be liable for any loss of profits, or any indirect or consequential loss, damages or expenses incidental to the error. Acceptance of the compensation under this policy shall imply a full and final settlement of all issues arising out of grievances for which compensation is claimed. 1. Unauthorized / Erroneous Debits 2. Electronic transactions (ECS / RTGS / NEFT/ direct debits) other debits or delayed Credits to accounts 3. Debit Cards
173

4. Payment of Cheques after Stop Payment Instructions 5. Cheque Collection 6. Cheques Lost in Transit/Dishonored Cheques 7. Foreign Exchange Services 8. Remittances in India 9. Violation of the Code by Banks agent 10.Force Majeure Company performance year 2006 2007 2008 2009 2010

1) Profit and loss account Profit( rs cr) 55.32 94.37 200.02 303.84 477.74

2. Key financial ratios

Mar '06 Investment Valuation Ratios Face Value 10.00 Dividend Per Share -Operating Profit Per 3.38

Mar '07

Mar '08

Mar '09 Mar '10

10.00 10.00 --4.82 9.43

10.00 -16.37

10.00 1.50 21.69
174

Share (Rs) Net Operating Profit Per 10.51 Share (Rs) Free Reserves Per Share 10.70 (Rs) Bonus in Equity Capital -Profitability Ratios Interest Spread 2.96 Adjusted Cash Margin(%) 21.04 Net Profit Margin 19.08 Return on Long Term 33.03 Fund(%) Return on Net Worth(%) 14.01 Adjusted Return on 9.66 Net Worth(%) Return on Assets 1.33 Excluding Revaluations Return on Assets 1.33 Including Revaluations Management Efficiency Ratios Interest Income / Total 10.43 Funds Net Interest Income / Total 6.58 Funds Non Interest Income / 0.23 Total Funds Interest Expended / Total 3.85 Funds Operating Expense / Total 3.23 Funds Profit Before Provisions / 3.37 Total Funds Net Profit / Total Funds 2.03 Loans Turnover 0.18 Total Income / Capital 10.66 Employed(%) Interest Expended / 3.85

26.31 53.78 16.66 31.18 ---

81.62 36.47 -4.12 13.59 12.35 120.56 18.70 18.71 54.69 54.69

84.68 69.33 -3.21 17.35 16.30 74.73 15.46 15.48 90.96 90.96

2.63 3.31 13.48 13.16 12.06 12.01 71.98 97.09 13.88 15.16 11.99 15.16 0.85 0.85 1.18 1.18

9.65 11.33 4.20 0.60 5.45 2.43 2.22 1.24 0.17 4.39 0.53 6.94 2.40 2.38 1.42 0.20

12.16 4.67 0.17 7.48 2.23 2.46 1.52 0.22 12.33 7.48

9.70 4.37 0.18 5.34 1.88 2.57 1.61 0.17 9.89 5.34
175

10.25 11.86 5.45 6.94

Capital Employed(%) Total Assets Turnover 0.10 Ratios Asset Turnover Ratio 7.83 Profit And Loss Account Ratios Interest Expended / 55.06 Interest Earned Other Income / Total 2.12 Income Operating Expense / Total 30.28 Income Selling Distribution Cost 0.62 Composition Balance Sheet Ratios Capital Adequacy Ratio 16.43 Advances / Loans 109.22 Funds(%) Debt Coverage Ratios Credit Deposit Ratio 88.66 Investment Deposit Ratio 48.83 Cash Deposit Ratio 3.62 Total Debt to Owners 5.08 Fund Financial Charges 1.93 Coverage Ratio Financial Charges 1.58 Coverage Ratio Post Tax Leverage Ratios Current Ratio 0.05 Quick Ratio 12.34 Cash Flow Indicator Ratios Dividend Payout Ratio Net -Profit Dividend Payout Ratio -Cash Profit Earning Retention Ratio 100.00 Cash Earning Retention 100.00

0.10

0.11

0.12 12.44 74.48 1.40 18.12 0.06 16.60 76.05 74.16 41.47 7.60 9.96 1.35 1.22 0.07 5.14 --100.00 100.00

0.10 13.93 66.75 1.85 19.02 0.37 20.60 88.94 80.52 40.33 7.62 8.67 1.50 1.32 0.04 14.54 12.47 11.73 87.54 88.28
176

8.50 11.96 70.84 74.31 5.81 4.48

23.72 20.28 0.36 0.10

13.60 13.60 100.94 80.78 78.13 73.14 39.74 38.00 4.29 6.28 10.44 10.06 1.43 1.25 0.04 5.74 --1.36 1.23 0.05 7.92 ---

100.00 100.00 100.00 100.00

Ratio AdjustedCash Flow Times

47.70 Mar '06

77.96 60.54 Mar '07 Mar '08

48.40

52.69

Mar '09 Mar '10 10.23 54.69 14.06 90.96

Earnings Per Share 2.05 Book Value 21.21 Dividends Declared Announcement Effective Dividend Date Date Type 27-04-10 Final

3.37 6.76 28.11 44.59

Dividend Remarks (%) 15.00 -

Analysis The bank declared the dividend 0n 27/04/2010 that will make the positive effect on the share price of the bank as we can see from the below table Month Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010 Jul-2010 Open price 300 246 254 281 318.90 303.05 362.50 High price 314 269 289.70 330.80 337.80 369.90 376.30 Low price 237.80 235 253.05 272.15 295.15 302 332 Close price 246 253.70 279.45 319.10 303.85 360.70 349.25

The trend shows as per close prices that after the three months of declaration of dividend the share prices are increasing which depicts that dividend declaration helps them to grow more and more.

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BIBLIOGRAPY:-

www.bseindia.com www.nseindia.com www.iloveindia.com www.rediffmoney.com www.moneycontrol.com Management accounting by Shashi K.Gupta and R.K.Sharma Article – dividend policy by CA. Kunal Aggarwal; published in www.caclub.com Article - DIVIDEND POLICY, SIGNALLING AND FREE CASH FLOW: AN INTEGRATED APPROACH by Richard Fairchild Investment Management by Preeti Singh

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