CHAPTER 1 INDUSTRIAL PROFILE INDIAN MANUFACTURING SECTOR: AN OVERVIEW Role of manufacturing in the Indian economy Manufacturing holds a key

position in the Indian economy, accounting for nearly 16 per cent of real GDP in FY12 and employing about 12.0 per cent of Indias labour force. Growth in the sector has been matching the strong pace in overall GDP growth over the past few years. For example, while real GDP expanded at a CAGR of 8.4 per cent over FY05-FY12, growth in the manufacturing sector was marginally higher at around 8.5 per cent over the same period. Consequently, its share in the economy has marginally increased during this time to 15.4 per cent from 15.3 per cent. Growth however has remained below that of services, an issue that has not escaped the attention of policy makers in the country. Introduction & General Outlook for the Manufacturing Sector Production and Demand FICCIs latest quarterly survey gauges the expectations of manufacturers for Q-4 (January-March 2012-13) for major sectors such as textiles, capital goods, metals, chemicals, tyres, cement, electronics, automotive, leather & footwear, machine tools, Food, Ceramics, Textiles Machinery etc. Responses have been drawn from 327 manufacturing units from both large and SME segments. FICCIs latest Quarterly Survey on Manufacturing for quarter four of 2012 -13, provides mixed signals on the growth of manufacturing. While the number of respondents reporting higher levels of production in quarter four of 2012-13 has dropped to 36% as compared to over 40% in previous few quarters, but at the same time only 20% respondents expect any fall in their production level in quarter four. Also, there is some improvement seen in terms of order books of the manufacturers in current quarter. Some upturn in industrial sector is particularly evident in sectors like leather, textiles, food products and cement. But some major sectors like automotive and capital goods are expected to witness sluggish growth in the current quarter.

Quarter

% of Respondents Expecting Higher Production in the Respective Quarter

Q-4 (2012-13) Q-3 (2012-13) Q-2 (2012-13) Q-1 (2012-13) Q-4 (2011-12)

36% 45% 44% 46% 36%

The demand conditions remain subdued but some improvement has been witnessed in Q-4 of 2012-13 as compared to Q-3 of 2012-13. In Q-4, over 39% respondents reported higher order books for January-March 2012-13 as compared to 33% in Q-3 of 2012-13 and 31% in Q-2 2012-13.

The advance estimates of Government of India for national income see slight improvement in manufacturing sectors growth in Q-4 of 2012-13. Manufacturing is expected to register around 3-4% growth in Q-4 as compared to 2.5% growth in Q-3 and less than 1% growth in Q-2. Some major initiatives taken by the Government in the last few months and coupled with some budget announcements are expected to improve the prospects for manufacturing. Capacity Addition & Utilization

In terms of investment, it remains subdued in manufacturing sector with 74% respondents not having plans for capacity additions in next six months. Implying that currently, around 25% respondents reported any plans for capacity additions as

compared to around 33% respondents reported plans for capacity addition in the previous survey (Q-3). This clearly indicates that investment will not pick-up at least in near future. Subdued investment sentiments are also reflected in the expected performance of capital goods sector as explained later in this survey report. Sector wise, on the one hand we have sectors like textiles where capacity utilization has improved over the last few months, with an average capacity utilization level reported at around 81%, on the other hand we have sectors like electronics, capital goods, metals where the average capacity utilization is less than 70%.

Automotive In this sector, only half of the respondents reported higher levels of production in October - December 2012 quarter as compared to same quarter of previous year. Rest of the respondents have reported fall in production by close to 5-6%. The situation seems to be worsening in the current quarter i.e. January - March 2013 as 83% respondents expect lower or same production levels as compared to January March 2012. More than half the respondents are expecting either lower or same number of orders in the current quarter vis--vis October December 2012 quarter. On an average, the automotive industry is operating at a capacity of 75% and majority do not have plans to add further capacity over next six months. Only few are expected to add capacity in near future. Respondents have reported that there is lack of infrastructure is acting as an impediment for their project expansions. However, scenario seems to be better on exports front as only 20% respondents reported fall in exports. The rest 80% reported either higher or same level of exports during October 2012 as compared to the same quarter of 2011. In the current quarter also, 70% respondents expect an increase in their exports as compared to January March 2012. Half of the respondents expect to maintain more than their average inventory levels in January March 2013 quarter. 50% respondents do not have plans to hire new workforce. The rest are planning to hire workforce in the range of 10-20%. The industry doesnt expect the manufacturing sector to slowdown further as most of them expect the sector to either revive or have same level of growth. The sector has suggested that following issues which needs to be addressed to hasten the revival in industrial growth: Availability of basic raw materials like steel, aluminium etc at lower prices. Adequate Power availability Monetary policy intervention for stimulating domestic demand. Availability of cheaper finance

Growth expectations for Q-4 2012-13 compared with Q-4 2011-12

Sector Chemicals Food Products Electronics & Electricals Textiles Capital Goods Steel & Metals Automotive Cement Leather & footwear Tyre Machine Tools Textiles Machinery

Growth Expectation Low Moderate Low

Moderate Low Low Low Strong Moderate Low Low Moderate

Note: Strong > 10%; 5% < Moderate < 10%; Low < 5%

CHAPTER 2 COMPANY PROFILE AGCO Group BACKGROUDN AND INCEPTION With roots firmly established in the farm equipment industry, AGCO has a brand heritage reaching back to the mid-1800s. AGCO was established in 1990 with the purchase of Deutz Allis Corporation from German-based Kloeckner-Humboldt-Deutz AG. KHD, in turn, had purchased portions of the Allis-Chalmers agricultural equipment business five years earlier. Since that time, AGCO has become a worldwide farm machinery company through market growth, strategic acquisitions and cutting edge agricultural solutions. TIMELINE 1990 AGCO was formed in the management buyout of Deutz Allis from KHD, and began manufacturing and distributing farm equipment under the AGCO Allis and GLEANER brand names. 1991 AGCO purchased Hesston Corporation, a leading North American brand of hay tools and a 50 percent participation in the manufacturing joint venture with Case International, known as Hay and Forage Industries (HFI). In mid-year, AGCO purchased the White tractor business from Allied Products. 1992 AGCO provided an initial public offering of one-half of its stock and became listed on NASDAQ. Subsequently, it became listed on the NYSE under the symbol "AG" in 1994. 1993 AGCO purchased the White-New Idea business of planters, hay tools and spreaders as well as the Coldwater, Ohio manufacturing facility. AGCO purchased the North American distribution rights to Massey Ferguson products and 50 percent of a joint venture established for Agricredit Acceptance Corporation. The Massey Ferguson acquisition expanded the AGCO North American dealer network by over more than 1,000 dealers.

1994 AGCO purchased the worldwide holdings of Massey Ferguson, ensuring AGCOs global status, and the remaining 50 percent joint interest in Agricredit Acceptance Corporation. In the same year, AGCO purchased the assets of McConnell Tractors articulated tractor manufacturing business leading to the development of the AGCOSTAR tractor line and the assets of Black Machine, giving AGCO a unique planter frameline. 1995 AGCO purchased the assets of Tye Company, makers and marketers of Glencoe, Tye, and Farmhand agricultural implements and tillage equipment. 1996 AGCO acquired the Iochpe-Maxion agricultural equipment company in Brazil, the number one market leader in tractors with the Massey Ferguson brand. AGCO also purchased Deutz Argentina, S.A., the number one market share leader in tractors in Argentina. AGCO purchased Western Combine Corporation and Portage Manufacturing, Inc. in Canada to expand the Massey Ferguson combine business. AGCO also added Rabobank Nederland as its joint venture partner in Agricredit, its finance subsidiary in North America. 2011 In early 2011, AGCO acquired 50% of AGCO-Amity JV, LLC, thereby creating a joint venture with Amity Technology, LLC. AGCO-Amity JV develops and distributes air seeding and tillage equipment. AGCO also acquire a 50% interest in selected air seeding and tillage product lines currently sold under the Amity, Wil-Rich and Wishek brand names. AGCO announced plans to invest in North American manufacturing by expanding high horsepower wheeled tractor manufacturing production in Jackson, Minnesota. A state-of-theart visitor center will open in early 2012. GSI Holding Corp. (GSI), a leading global manufacturer of grain storage and protein production systems was acquired by AGCO in late 2011. 2012 AGCO acquired 60 percent of Santal Equipamentos, a sugar cane planting, harvesting, handling and transportation equipment and replacement parts manufacturer in Brazil. 2013 AGCOs GSI acquired Johnson System Inc., a leading manufacturer of catwalks, towers and support structures.

NATURE OF BUSINESS CARRIED As the worlds largest manufacturer focused purely on agricultural equipment, AGCO is uniquely positioned to increase farm productivity through high-tech solutions for professional farmers feeding the world. AGCO offers a comprehensive line of tractors, combines, sprayers, implements and hay tools. Each of our trusted brands delivers its own diversity, from ruggedly simple utility machines for part-time farmers, to ingeniously nimble solutions for demanding specialized operations, to jaw-dropping high-horsepower vehicles for todays professional farm fleets. We build our equipment to the highest standards of design and manufacturing, and our innovative products continuously receive awards at international exhibitions. Our most coveted recognition, however, is the endorsement of our wide range of products by progressive farmers and successful dealers around the world. AGCO has a strong global presence and follows the philosophy of manufacturing equipment where our customers are located. With factories around the world and 2,600 independent dealers and distributors in 140 countries, we are well positioned to help feed the world by serving the leading and growing markets for farm equipment. OPERATIONS When it comes to our operations, we will systematically and continuously improve efficiency, reduce waste and build a healthy, productive workforce. AGCO has established reduction targets, and it is our corporate goal to reduce water and energy consumption, and better the waste management practices of our manufacturing sites. It is through such corporate goals, and also through our product design and technology that we are driving agricultursustainability. In addition to AGCOs commitment to increased efficiency, we also value the health and safety of our workforce. All staff are trained in basic health and safety specific to their roles, and health and safety data is tracked and reported to senior management. AGCO health and safety standards are applied globally, including where they exceed local requirements. And, In order to continuously improve the safety of our employees, the AGCO Production System

(APS) IDEAS program works to implement safety improvement suggestions from employees on site. Lastly, AGCO seeks to create a culture that fosters diversity and good business practices. AGCO adheres to an ethics and compliance program that ensures we act from our board of directors to every employee. This promotes an atmosphere of trust and accountability throughout our operational structure. CUSTOMERS AGCO works to leverage opportunities that will allow our customers to experience higher profitability. We strive to continuously provide the products & services our customers need to prosper over the long term. Along with enabling farmers to increase the technology in their farming practices, we work towards providing them with solutions to better farm productivity and soil health by facilitating reductions in the use of water, fertilizer, and chemicals. Today, farmers are using our proven technology to save fuel, manage chemical and fertilizer applications, increase crop yield, and ensure compliance with environmental regulations. Take for example AGCOs advances in transmission and engine technology as seen in the e3 engine. The e3 engines result in cleaner emissions, improved economics, and reliable performance. This is just one example of how AGCO is providing high-tech solutions for professional farmers feeding the world. SUPPLIERS AGCO's supplier relationships are vital to our business. Procurement practices and supply chain management significantly impact a firms long-term competitiveness and its ability to create value for shareholders and stakeholders alike. It is our aim to foster long term profitability through high performance in quality, ethics and environmental standards among our suppliers. We believe this can be achieved by strengthening long-term relationships with our preferred suppliers. We will also work to promote high labor standards and an ethical business climate throughout our supply chain. AGCO will at all times comply with applicable government regulations and contractual requirements, and when feasible, will encourage, establish and maintain competition.

VISION Hightech solutions for professional farmers feeding the world. MISSION Profitable growth through superior customer service, innovation, quality and commitment. BUSINESS VALUES Customer Focus

We create excellent solutions for our customers by carefully listening to their needs and exceeding their expectations. Dealer Focus

We realize that dealer profitability is instrumental to our success and expect to be the preferred supplier. Human Dimensions

We value our employees. We expect to be the preferred employer in our industry. We expect to create highly motivated employees who are the most knowledgeable and best trained in the industry.

By continually enhancing the leadership, business and people management skills of our current and potential managers, we expect to have employees who can provide the necessary process improvements to achieve corporate goals.

We develop employees skills and qualifications. We expect our leaders to be proactive and show the way. We expect our leaders to influence and set the rules. Using speed, quality, and innovative behavior we expect to achieve competitive advantage

Create Shareholder Value

We expect to achieve profitable growth. AGCO will manage the business in order to provide superior return to its shareholders. CORE VALUES Accountability

We will take responsibility for our area of influence as if this is our enterprise. We will commit to excellence. Integrity

We will walk the talk. We will be committed to a consistent, honest and reliable way of action. Respect

We appreciate other individuals with their own cultural identities. We embrace differences. Team Spirit

We actively contribute to overcome challenges as a team. Transparency

We will provide full information required. We will communicate openly and sincerely. We appreciate feedback.

Bank Overview STATE BANK OF INDIA Not only many financial institution in the world today can claim the antiquity and majesty of the State Bank Of India founded nearly two centuries ago with primarily intent of imparting stability to the money market, the bank from its inception mobilized funds for supporting both the public credit of the companies governments in the three presidencies of British India and the private credit of the European and India merchants from about 1860s when the Indian economy book a significant leap forward under the impulse of quickened world communications and ingenious method of industrial and agricultural production the Bank became intimately in valued in the financing of practically and mining activity of the SubContinent Although large European and Indian merchants and manufacturers were undoubtedly thee principal beneficiaries, the small man never ignored loans as low as Rs.100 were disbursed in agricultural districts against glad ornaments. Added to these the bank till the creation of the Reserve Bank in 1935 carried out numerous Central Banking functions. Adaptation world and the needs of the hour has been one of the strengths of the Bank, In the post depression exe. For instance when business opportunities become extremely restricted, rules laid down in the book of instructions were relined to ensure that good business did not go post. Yet seldom did the bank contravenes its value as depart from sound banking principles to retain as expand its business. An innovative array of office, unknown to the world then, was devised in the form of branches, sub branches, treasury pay office, pay office, sub pay office and out students to exploit the opportunities of an expanding economy. New business strategy was also evaded way back in 1937 to render the best banking service through prompt and courteous attention to customers.

A highly efficient and experienced management functioning in a well defined organizational structure did not take long to place the bank an executed pedestal in the areas of business, profitability, internal discipline and above all credibility A impeccable financial status consistent maintenance of the lofty traditions if banking an observation of a high standard of integrity in its operations helped the bank gain a pre- eminent status. No wonders the administration for the bank was universal as key functionaries of India successive finance minister of independent India Resource Bank of governors and representatives of chamber of commercial showered economics on it. Modern day management techniques were also very much evident in the good old days years before corporate governance had become a puzzled the banks bound functioned with a high degree of responsibility and concerns for the shareholders. Unbroken records of profits and a fairly high rate of profit and fairly high rate of dividend all through ensured satisfaction, prudential management and asset liability management not only protected the interests of the Bank but also ensured that the obligations to customers were not met. The traditions of the past continued to be upheld even to this day as the State Bank years itself to meet the emerging challenges of the millennium. ABOUT LOGO

THE PLACE TO SHARE THE NEWS ... SHARE THE VIEWS Togetherness is the theme of this corporate loge of SBI where the world of banking services meet the ever changing customers needs and establishes a link that is like a circle, it indicates complete services towards customers. The logo also denotes a bank that it has prepared to do anything to go to any lengths, for customers.

The blue pointer represent the philosophy of the bank that is always looking for the growth and newer, more challenging, more promising direction. The key hole indicates safety and security.

A. BACKGROUND AND INCEPTION OF THE COMPANY The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921. Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernize India's economy. Their evolution was, however, shaped by ideas culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework. Bank of Bengal H.O.

TNRCMS MAYANK SHAH Establishment The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock banking in India. So was the associated innovation in banking, viz. the decision to allow the Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a restricted geographical area. This right of note issue was very valuable not only for the Bank of Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the capital of the banks, a capital on which the proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. But, for a long time, and especially up to the time that the three presidency banks had a right of note issue, bank notes and government balances made up the bulk of the invertible resources of the banks. The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board. Group Photograph of Central Board (1921)

B. NATURE OF BUSINESS Business The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the borrower in favour of the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden.

Indians were the principal borrowers against deposit of Company's paper, while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities.

OLD BANK OF BENGAL

Presidency Banks Act The presidency Banks Act, which came into operation on 1 May 1876, brought the three presidency banks under a common statute with similar restrictions on business. The proprietary connection of the Government was, however, terminated, though the banks continued to hold charge of the public debt offices in the three presidency towns, and the custody of a part of the government balances. The Act also stipulated the creation of Reserve Treasuries at Calcutta, Bombay and Madras into which sums above the specified minimum balances promised to the presidency banks at only their head offices were to be lodged. The Government could lend to the presidency banks from such Reserve Treasuries but the latter could look upon them more as a favour than as a right. Imperial Bank The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in terms of offices, reserves, deposits, investments and advances, the increases in some cases amounting to more than six-fold. The advances, the increases in some cases

amounting to more than six-fold. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. But the lofty traditions of banking which the Imperial Bank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's economic life.

Stamp of Imperial Bank of India When India attained freedom, the Imperial Bank had a capital base (including reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country. C. MISSION & VISION STATEMENT OF SBI Vision of State Bank of India MY SBI. MY CUSTOMER FIRST. MY SBI: FIRST IN CUSTOMER SATISFACTION.

Mission of State Bank of India We will be prompt, polite and proactive with our customers. We will speak the language of young India. We will create products and services that help our customers achieve their goals.

We will go beyond the call of duty to make our customers valued. We will be of service even in the remotest part of our country. 91 We will offer excellence in service to those abroad as much as we do to those in India. We will imbibe state of art technology to drive excellence.

To retain the Banks Position as the Premier Indian Financial Services Group, with world class standards and significant Global business, committed to excellence in customer, shareholder and employee satisfaction and to play a leading role in the expanding and diversifying financial services sector while continuing emphasis, on its development banking role. DR. KALAM TALKS ABOUT SBI PLAN AND MISSON EW DELHI : President A.P.J. Abdul Kalam on Tuesday chalked out a seven-point action plan for the State Bank of India (SBI) while urging the country's premier bank to create a Rs. 5,000-crore venture capital fund and hike lending to the farm sector. In his address at the SBI's Bicentennial Celebrations here, Mr. Kalam noted that within the next three years, the bank should raise the credit to the farm and agro-processing sector from 10 to 20 per cent of its total loan disbursal. Agricultural growth, he said, was lagging behind while sectors such as manufacturing and services were showing robust increases. A higher credit disbursal, he said, was essential to hike farm growth to over four per cent as it was a vital requirement for increasing the overall Gross Domestic Product growth to 10 per cent. D. SHAREHOLDING PATTERN Table: - 1 SHARE HOLDERS Reserve bank of india Non- resident (NRI, FII) Banks and life insurance companies Mutual funds and UTI PER CENT 59.73 % 19.83 % 6.21 % 6.47 %

Private companies, domestic companies or corporate bodies Resident individuals

1.79 % 5.97 %

E. COMPITITORS INFORMATION State bank of India has been facing great rivalry and major competition with other public sector banks and some of private commercial banks. State bank of India has many banks as art rival. Some of its art rival. List of major competitors of SBI I. ICICI Bank II. Bank of Baroda III. Canara Bank IV. Punjab National Bank V. Bank of India VI. Union Bank of India VII. Central Bank of India VIII. HDFC Bank IX. Oriental Bank of Commerce. Here especially some of the public sector and private sector banks are giving hardcore competition to the state bank of India. F. MARKET SHARE Table: - 2 BANK State bank of India MARKET SHARE 30.32 %

HDFC bank Central bank of India Union bank of India Bank of Baroda Bank of India Punjab national bank Canara bank ICICI Bank Uco bank Other banks total

3.01 % 3.05% 3.45 % 4.23 % 5.10 % 5.28 % 6.45 % 6.51 % 10.33 % 22.27 % 100%

G. AWARDS OF SBI SBI has bagged the awards for Most Preferred Bank and Most preferred brand for home Loan in CNBC Awaaz Consumer Awards in August 2007. The only Indian Bank to find a place in the Fortune Global 500 List SBI is placed at 70th in Top 1000 Banks Survey by Banker Magazine, July 2007, (up from 107 last year) SBI ranked 6th in the Economics Times Market Cap List, (up from 50 last year) Today, SBI/SBI CAP is the No.1 syndicator of domestic debt in Asia Pacific REGION No.1 in mergers & Acquisition Deals (31Deals of US $ 19.8bn) SBI is market Leader in financing SSIs with a market share of 29%

Strengths of State Bank of India Largest commercial bank in the country with presence in all time zones of the world.

 Macroeconomic proxy for the Indian Economy. Has emerged as a Financial Services Supermarket Group holds more than 25 per cent market share in deposits and advances Large base of skilled manpower SBI Group has more than 115 million customers Every tenth Indian is a customer. Values of SBI We will always be honest, transparent and ethical. We will respect our customers and fellow associates. We will be knowledge driven. We will learn and we will share our learning. We will never take the early way out. We will do everything we can to contribute to the community we work in. We will nurture pride in India. ORGANISATION STRUCTURE AND MANAGEMENT The management of the State Bank1 vests in a Central Board of Directors which consists of: A Chairman and a Vice-Chairman appointed by the Central Government in consultation with the Reserve Bank of India. Two Managing Directors appointed by the Central Board of Directors with the approval of the Central Government. Six directors to be elected in the prescribed manner by the shareholders other than the Reserve Bank.

 Eight directors to be nominated by the Central Government in consultation with the Reserve Bank of India to represent territorial and economic interests in such a manner that not less than two of them have special knowledge of the working of the cooperative institutions and of rural economy and the others have experience in commerce, industry, banking and finance; One director to be nominated by the Central Government; One director to be nominated by the Reserve Bank; and Two directors to be appointed to represent the officers and the staff of the bank. The Chairman, the Vice-Chairman and the Managing Director shall hold office for such terms not exceeding five years as the Central Government may fix when appointing them and shall be eligible for re-appointment. The directors elected by the shareholders and nominated by the Central Government will hold office for fours years and are eligible for re-election or re-nomination. The other nominated directors shall hold office as per recommendations of the authority appointing them. There are 58 Modules operated by the bank. Each module will be headed by Deputy General Manager. The module organization chart of a Module is presented in Exhibit No.3.3. The Modules will co-ordinate the activities of the bank through regional offices. H. ORGANIZATION STRUCTURE

I. FUTURE PROSPECT OF STATE BANK OF INDIA Scheme for Financial Inclusion by extension of banking services through Business Facilitators/Business Correspondents

Objective To extend Micro Finance services for uplifting the poor. To extend banking facilities in untapped / unbanked areas through the use of existing branch network and new technology in combination with outsourcing. Eligible entities a) Business Facilitator Model: NGOs Farmers Clubs Functional cooperatives Community based organizations I.T. enabled rural outlets of corporate entities Well functioning Panchayats Rural Multipurpose Kiosks / Village Knowledge Centers Agri Clinics / Agri Business Centers Krishi Vigyan Kendras KVIC / KVIB units Post Offices Insurance agents Social organizations Business Correspondent Model: NGOs / MFIs set up under the Indian Societies / Trust Acts Societies registered under Mutually Aided Cooperative Societies(MACS) Act or the Cooperative Societies Acts of States Section 25 companies Post Offices.

CHAPTER 3
SWOT ANALYSIS Strength Years of Experience..Century Experienced Employee Large Network Huge ATM Network Government Support Safety and Security of Money Transparency in Charges Large income from Loan interest Less interest rate of loan with low charges

Weakness Lake of Young Employee Rigid work culture Physical environment & Ambience Excessive Documentation Bureaucracy Less knowledgeable employee Less control on employee Poor technology Poor recovery system

Opportunity Constant fear in the minds of customers towards private bank. Even expanding rural, urban & International Market. Fraud and cheating with customer from private banking. Dissatisfy from private banking. So much hidden charges of private banks.

Nationalizes bank more reliable and trustworthy.

Threats Shifting customers preference towards private banks. Private bank providing more facilities at lower charges. Quick Dynamic employees and greater technological product. Young stare are attract towards private bank because of speedy and upgrade technology.

CHAPTER 4 ANALYSIS OF THE FINANCIAL STATEMENT Balance sheet 2010-13 Table: - 3

Mar 13 Capitals and liabilities Total share capital Equity share capital Share application money Preference share Reserves Net worth Deposits Borrowings Total debt Other liabilities Total liabilities ASSETS Cash and bank balances Balances with bank Advances Investments Gross block Accum depreciation Net block Capital WIP Other assets Total assets 7,005.02 0.00 47,892.03 1,566,261.03 993,018.45 0.00 1,445.60 5,466.55 0.00 53,113.02 1,335,519.24 899,565.18 0.00 1,251.05 4,764.19 0.00 43,777.85 4,117.73 295.18 35,112.76 65,830.41 48,989.75 1,045,616.55 350,927.27 7,005.02 54,075.94 43,087.23 867,578.89 312,197.61 5,466.55 94,395.50 28,478.65 756,719.45 295,600.57 4,764.19 61,290.87 34,892.98 631,914.15 285,790.07 11,831.63 98,199.65 98,883.68 1,202,739.57 169,182.71 1,371,922.28 95,455.07 1,566,261.03 83,280.16 83,951.20 1,043,647.36 127,005.57 1,170,652.93 80,915.09 1,335,519.22 64,351.04 64,986.04 933,932.81 119,568.96 1,053,501.77 105,248.39 65,314.32 65,949.20 804,116.23 103,011.60 907,127.83 80,336.70 684.03 684.03 671.04 671.04 635.00 635.00 634.88 634.88 Mar 12 Mar 11

in crs
Mar 10

1,223,736.20 1,053,413.73

1,223,736.21 1,053,413.74 790,389.59 0.00 1,023.40 429,917.37 166,449.04 1,038.76

PROFIT AND LOSS ACCOUNT 2010-13 Table: - 4

Mar 13 Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 10,890.29 0.00 3,214.69 0.34 14,105.32 9,067.85 0.00 2,645.15 0.34 11,713.34 5,218.83 0.00 2,151.52 0.34 7,370.69 6,495.14 529.50 2,141.41 0.34 9,166.39 206.20 415.00 1,445.60 174.46 350.00 1,251.05 116.07 300.00 1,023.40 144.37 300.00 1,038.76 2,838.74 375.95 2,348.66 296.49 1,905.00 246.52 1,904.65 236.76 0.34 14,105.32 6.05 11,713.34 0.34 7,370.69 0.34 9,166.39 29,284.42 16,976.74 121,586.96 14,104.98 26,068.99 19,866.25 109,165.61 11,707.29 23,015.44 17,071.05 88,954.45 7,370.35 24,941.01 4,532.53 76,796.02 9,166.05 75,325.80 18,380.90 0.00 1,139.61 26,740.65 63,230.37 16,974.04 0.00 1,007.17 27,954.03 48,867.96 15,211.62 0.00 990.50 23,884.37 47,322.48 12,754.65 7,898.23 932.66 7,888.00 119,657.10 16,034.84 135,691.94 106,521.45 14,351.45 120,872.90 81,394.36 14,930.42 96,324.78 70,993.92 14,968.15 85,962.07 Mar12 Mar 11 Mar 10

LEARNING EXPERIENCE As I approach the HR Manager of SBI , he explained about SBI service, management system, also gives me financial information, I came to know about proffessional life, and to maintain good relationship with customers, employees and working condition and the knowledge about the analysis of the prasent status and future strategies of the SBI. I understood how the decision has been made for the implementation of theoretical concepts in to organizational, objectives.

PART B CHAPTER 5 GENERAL INTRODUCTION TO THE TOPIC A. Statement of the problem To know the financial performance of an organization, it is very important to systematically analyze its financial statements and assess them in terms of profitability and liquidity. With the instruction of company management I decide to analyze the financial position of VRL Logistics Ltd., and my topic is titled as FINANCIAL ANALYSIS at VRL Logistics Ltd.. B. Objectives of study To study the financial performance of SBI Bank. To analyze the comparative performance of the company over a period Of 3 years. To know the liquidity position and profitability of the SBI Bank. To assess the financial position, efficiency and growth, of the company for four years. To find out the current position of the company.

C. Scope of the study The study reviews financial performance of company. The study is to understand the liquidity and profitability position of the company. It includes different types of tools of financial analysis. It analyzes the comparative performance of the company. The study covers the trend of Co. in terms of growth and efficiency.

D. Methodology Primary data Interaction with the HR Manager, Finance Manager and other staff. Direct interaction with the workers of SBI Bank. Secondary data www.sbi.com Annual report of the SBI Bank.

 Money control.com

E. Limitations of the study The analysis is based on annual reports of the company. The study is restricted for a period of 3 year. It was not possible to analyze all respects relevant to the study.

CHAPTER 8 ANALYSIS & INTERPRETATION TECHNIQUES OF FINANCIAL PERFORMANCE 1. COMPARATIVE FINANCIAL STATEMENTS Comparative financial statements are the statements which have been designed in a way so as to provide time perspective to the consideration of various elements of financial position embodied in such statements. In these statements figures of two or more years are placed side by side to facilitate comparison. COMPARATIVE BALANCE SHEET Both the income statement and balance sheet can be prepared in the form of Comparative Financial Statements. Comparative Balance sheet as on two or more Different assets can be used for comparing assets and liabilities and finding out any increase or decrease items. Such a balance sheet is very useful in studying the trends in an enterprise. COMPARATIVE STATEMENT OF PROFIT AND LOSS The income statements disclose net profit or net loss on account of operations. A Comparative income statement will show the absolute figures for two or more periods. The absolute changes from one period to another and its desired changes in terms of percentage. Since the figures for two or more periods are shown side by side, the reader can quickly ascertain whether sales have been increased or decreased, whether data included in comparative income statement will be helpful in deriving meaningful conclusion. RATIO ANALYSIS Ratio analysis is a powerful tool of financial performance analysis. A ratio is defined as the indicated quotient of two mathematical expressions and as the relation between two or more things. In financial performance analysis, a ratio is used as a benchmark for evaluating the financial position and performance of the firm. The absolute accounting figures reported in the financial statements do not provide a meaningful understanding of the performance and financial position of a firm. The relationship between two accounting figures, expressed

mathematically, is known as financial ratio (or simply as ratio). Ratios help to summarise a large quantities of financial data and to make qualitative judgment about the firms financial performance. TYPES OF RATIOS Liquidity Ratios Leverage Ratios Activity Ratios Profitability Ratios

Comparative Financial Statements 2012-13 Table: - 5

Mar 13 Capitals and liabilities Total share capital Equity share capital Share application money Preference share Reserves Net worth Deposits Borrowings Total debt Other liabilities Total liabilities ASSETS Cash and bank balances Balances with bank Advances Investments Gross block Accum depreciation Net block Capital WIP Other assets Total assets
7,005.02 0.00 47,892.03 1,566,261.03 5,466.55 0.00 53,113.02 1,335,519.24 4,764.19 0.00 43,777.85 1,223,736.21 4,117.73 295.18 35,112.76 1,053,413.74 65,830.41 48,989.75 1,045,616.55 350,927.27 7,005.02 54,075.94 43,087.23 867,578.89 312,197.61 5,466.55 94,395.50 28,478.65 756,719.45 295,600.57 4,764.19 61,290.87 34,892.98 631,914.15 285,790.07 11,831.63 98,199.65 98,883.68 1,202,739.57 169,182.71 1,371,922.28 95,455.07 1,566,261.03 83,280.16 83,951.20 1,043,647.36 127,005.57 1,170,652.93 80,915.09 1,335,519.22 64,351.04 64,986.04 933,932.81 119,568.96 1,053,501.77 105,248.39 1,223,736.20 65,314.32 65,949.20 804,116.23 103,011.60 907,127.83 80,336.70 1,053,413.73 684.03 684.03 671.04 671.04 635.00 635.00 634.88 634.88

Mar 12

Mar 11

Mar 10

% change

1.899039516 1.899039516

15.19301749 17.78709536 13.22748615 24.92993522 14.67060875

14.73201501

17.85568402 12.04847953 17.02705069 11.03637799

21.96239268

14.73201373

Interpretation: There are so many interpretations or interference that can be drawn from the calculation. This technique was used to compare the % changes either in assets or liabilities of the two years Balance Sheets. To make calculations more feasible, the numerical of 2012 and 2013 have been considered. The interpretations are as follows:

 Fixed deposits from other banks in between 2012 and 2013 have decreased by 13.22748615%. Current liabilities like, SB deposits, Current deposits from banks, Current deposits from others, Bills payable and Bills for collections have increased by 14.73201501 PER CENT. HO account, extension counter, ECGC/CGC claim received, Depreciation on furniture and Miscellaneous liabilities have increased by 14.73201373 per cent . Cash and balance with RBI have increased by 17.85568402% ALL the current assets excluding the three (Stamps and stationary, Drafts, TTS paid of others and LCs acceptance) have increased by a considerable rates.

Comparative Profit and Loss statement 2012-13 Table: - 6

Mar 13 Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses PreoperativeExp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 3,214.69 0.34 14,105.32 2,645.15 0.34 11,713.34 2,151.52 0.34 7,370.69 2,141.41 0.34 9,166.39 to Statutory 10,890.29 0.00 9,067.85 0.00 5,218.83 0.00 6,495.14 529.50 17.7167938 206.20 415.00 1,445.60 174.46 350.00 1,251.05 116.07 300.00 1,023.40 144.37 300.00 1,038.76 13.4580797 15.3928225 2,838.74 375.95 2,348.66 296.49 1,905.00 246.52 1,904.65 236.76 0.34 14,105.32 6.05 11,713.34 0.34 7,370.69 0.34 9,166.39 29,284.42 16,976.74 121,586.96 14,104.98 26,068.99 19,866.25 109,165.61 11,707.29 23,015.44 17,071.05 88,954.45 7,370.35 24,941.01 4,532.53 76,796.02 9,166.05 10.2160215 16.9988898 75,325.80 18,380.90 0.00 1,139.61 26,740.65 63,230.37 16,974.04 0.00 1,007.17 27,954.03 48,867.96 15,211.62 0.00 990.50 23,884.37 47,322.48 12,754.65 7,898.23 932.66 7,888.00 119,657.10 16,034.84 135,691.94 106,521.45 14,351.45 120,872.90 81,394.36 14,930.42 96,324.78 70,993.92 14,968.15 85,962.07 10.9210908 Mar12

rs in crs
Mar 11 Mar 10 %change

Interpretation: The total income earned by the interest and other incomes have considerably increased from 2012 to 2013 for about 10.92% this reveals the part of the income is been generated by the interest earned from the deposits and other investments. The expenses like Interest expended, Selling and Admin Expenses, Provisions & Contingencies to the total income has been considerably decreased from 2012 to 2013 by 10.2160215%. CASH FLOW STATEMET Table: - 7 Mar 13 Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from -1999.41 -1648.56 -1245.28 -1761.52 19950.90 21661.23 Mar 12 18483.31 -28468.59 Mar 11 14954.23 34282.27 Mar 10 13926.10 -1804.99 The total income on the total expenditure have been decreased by 16.9988898% EPS and the equity dividend percentage have been showing the increased trend by 15.3928225% for the year. The book value of the company shares which are been listed high in the stock market and has the increased trend of 13.4580797%.

Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents

-3259.72

2147.66

2057.11

-3359.67

17657.00 97163.16 114820.16

-25752.40 122915.56 97163.16

35039.34

-6926.18

87834.81 103110.02 122874.15 96183.84

RATIO ANALYSIS 1) Liquidity ratios- Liquidity ratio or solvency ratios measure a projects ability to meet its current or short-term obligations when they become due. Liquidity is the prerequisite for the very survival of a firm. A proper balance between the liquidity and profitability is required for efficient financial management. It reflects the short-term financial strength or solvency of the firm. Two ratios are calculated to measure liquidity, the current ratio and quick ratio. a. Current ratioThe current ratio is defined as the ratio of total current assets to total current liabilities. It is computed by, CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES Table: - 8
Years 2010 2011 2012 2013 Ratio
0.04 0.77 0.82 0.84

CHART: - 1

CURRENT RATIO
1 PER CENT 0.8 0.6 0.4 0.2 0 2010 2011 YEARS 2012 2013 0.04 0.77 0.82 0.84

InterpretationIt is an indicator of the extent to which short term creditors are covered by assets that are expected to be converted to cash in a period corresponding to the maturity of claims. The ideal current ratio is 2:1. The firm current ratio indicate that the firm is in a position to meet its short term obligation because the ratio is in increasing trend , by observing the above table we can say that though the firm does not maintain ideal current ratio, it is still in a position to meet its current obligations. After clearing all the dues the firm is still in a position to maintain liquidity.

b. Acid test or quick ratioIt is a measure of liquidity calculated dividing current assets minus inventory and prepaid expenses by current liabilities. Since inventories among current assets are not quite liquid (means not quickly converted into cash), the quick ratio excludes it. The quick ratio includes only assets, which can be readily converted into cash and constitutes a better test of liquidity. It is often called as quick quick ratio because it is a measurement of a firms ability to convert its assets quickly into cash in order to meet its current liabilities. Table: - 9 YEARS 2010 2011 2012 2013 Chart: - 2 PER CENT 9.07 8.50 12.05 12.15

QUICK RATIO
15 PER CENT 10 5 0 2010 2011 2012 YEARS 2013 9.07 8.5 12.05 12.15

Interpretation: Acid test ratio is a rigorous measure of firms ability to service short term liabilities. The usefulness of the ratio lies in the fact that it is widely accepted as the best available test of liquidity position of a firm. Generally an acid test ratio of 1:1 is considered satisfactory as a firm can easily meet all its current claims. In the case of the above firm the quick ratio is in increasing trend by year on. So it shows that firm is capable of paying its quick short term obligations

2. Capital structure ratio

The long-term lenders/creditors would judge the soundness of a firm on the basis of the long term financial strength measured in terms of its ability to pay the interest regularly as well as repay the installment of the principal on due dates or in one lump sum at the time of maturity. The long term solvency of firm can be examined by using leverage or capital structure ratios. Debt equity ratio- This ratio measures the long term or total debt to shareholders equity. This ratio reflects claims of creditors and shareholders against the assets of the firm. c. Debt equity ratio = long term debt / share holder equity Table: - 10 Years 2010 2011 2012 2013 Chart: - 3 DEBT EQUITY RATIO
17 PER CENT 16 15 14 13 12 2010 2011 YEARS 2012 2013 13.754948 13.944445 13.874102 16.211201

Debt 907,127.83 1,053,501.77 1,170,652.93 1,371,922.28

Shareholder equity 65,949.20 64,986.04 83,951.20 98,883.68

Per cent 13.754948 16.211201 13.944445 13.874102

InterpretationThe debt equity ratio is an important tool of financial analysis to appraise the financial structure of the firm. The ratio reflects the relative contribution of creditors and owners of the business in its financing. A high ratio shows a large share of financing by the creditors of the firm; a low ratio implies the a smaller claim of the creditors. Debt Equity ratio indicates the margin of safety to the creditors. The debt-equity ratio is in decreasing and in 2011 it become high, which implies that the owners are stop putting up relatively more money of their own.

3. Profitability ratios related to salesA. Net profit marginIt is also known as net margin. This measures the relationship between the net profits and sales of a firm. Depending on the concept of net profit employed. , this ratio can be computed as follows Net Profit ratio = Table: - 11
Years 2010 2011 2012 2013 Per cent
10.54 8.50 9.68 10.39

Earnings after tax/ Net sales x 100

CHART: - 4
NET PROFIT RATIO
10.54 8.5 10.39

12 10 PER CENT 8 6 4 2 0

9.68

2010

2011 YEARS

2012

2013

Interpretation From the above table and chart we can analyze that the profit of the company is been contributed by the net sales of the company. From 2010 the sales has shown consistently high margin of sales to 10.54 %. And considerably the sales have been decreased to 9.68% and shown the profit to 10.39% in 2013.

4. Profitability ratios related to InvestmentsReturn on InvestmentsReturn on investments measures the overall effectiveness of management in generating profits with its available assets.

Return on assetsThe profitability ratio is measured in terms of relationship between net profits and assets. The ROA may also be called profit-to-asset ratio. It can be computed as followsReturn on Assets = Net profit after tax / Average total assets 100 Table: - 12
Years 2010 2011 2012 2013 Par cent
1,038.76 1,023.40 1,251.05 1,445.60

Chart: - 5

RETURN ON ASSETS
1,500.00 RETURN 1,000.00 500.00 0.00 2010 2011 YEARS 2012 2013 1,251.05 1,038.76 1,023.40 1,445.60

Interpretation- Return on assets employed is favorable. That means the firm is in a position to employ its assets in an efficient manner.

Return on Capital EmployedIt is similar to ROI except in one respect. Here the profits are related to the total capital employed. The term capital employed refers to long term funds supplied by the lenders and owners of the firm. It is given by the formulaReturn on Capital employed = Table: - 13
YEARS 2010 2011 2012 2013 PER CENT
13.89 12.71 13.94 14.26

EBIT/ Average total capital employed x 100

CHART: - 6

ROCE
14.5 14 13.5 13 12.5 12 11.5 13.94 12.71 14.26

13.89

PER CENT

2010

2011

2012 YEARS

2013

Interpretation:The capital employed basis provides a test of profitability related to the source of long term funds. The higher the ratio, the more efficient is the use of capital employed. From the above table we can say that the ROCE is quite high. Compared to previous years ratio. It is good for the company.

DIVIDEND PAYOUT RATIO The dividend payout ratio is the amount of dividends paid to stockholders relative to the amount of total net income of a company. The amount that is not paid out in dividends to stockholders is held by the company for growth. The amount that is kept by the company is called retained earnings. Dividend Payout Ratio = Dividend / net income Table: - 14
YEARS 2010 2011 2012 2013 RATIO
23.36 26.03 22.59 22.79

Chart: - 7

DIVIDEND PAYOUT RATIO

26.03 23.36

27 26 25 24 23 22 21 20

RATIO

22.59

22.79

2010

2011 YEARS

2012

2013

Interpretation: The dividend to the shareholders paid in the year 2011 of 26.03% which shows that the company has made the enough profit and paid to shareholders and kept for growth of the company. As in the year 2013 the dividend paid to the shareholders is 22.79 as compared to the year 2011 which shows the company has accumulated the dividends as retained for the growth of the company.

Chapter 9 Findings and Suggestions

FINDINGS OF THE STUDY:

To draw some findings of the study the different techniques of financial analysis like comparative statement analysis, common size statement analysis, trend analysis, and ratio analysis have been used. The following are the some findings out of them. To make study more reliable, Balance Sheet and P&L A/c of last FOUR years were considered. In the initial two years the branch was under loss and it has been recovered substantially in the next three financial years. The growth rate of the bank for the last three years is not at the expected level. The interest on NPA in the year 2011 was less than that of 2012.But in 2013 the interest on performing assets has increased gradually over the last four years. The major constituents in the total assets are advances due from others and branch adjustments in both the financial years 2011 and 2012. As current ratios are the indicators of short-term solvency, it bears negative impact on the branch. The percentage growth in the values of current assets is satisfactory. Interest on performing assets has been important sources for the bank. The branch produced a progressive growth for the financial analyst. The short-term financial soundness of the branch is not so good. The branch has followed some sound financial management principles in the recent financial years. Growth in the profit margin has created positive impact on the branch and it has started recovering the losses of the previous years. Current ratio of the branch is not sound which is less than the standards.

CHAPTER 10 CONCLUSION Ratios make the related information comparable. A single figure by itself has no meaning, but when expressed in terms of a related figure, it yields significant interferences. Thus, ratios are relative figures reflecting the relationship between related variables. Their use as tools of financial analysis involves their comparison as single ratios, like absolute figures, are not of much use. Ratio analysis has a major significance in analysing the financial performance of a company over a period of time. Decisions affecting product prices, per unit costs, volume or efficiency have an impact on the profit margin or turnover ratios of a company. Financial ratios are essentially concerned with the identification of significant accounting data relationships, which give the decision-maker insights into the financial performance of a company. The analysis of financial statements is a process of evaluating the relationship between component parts of financial statements to obtain a better understanding of the firms position and performance. The first task of financial analyst is to select the information relevant to the decision under consideration from the total information contained in the financial statements. The second step is to arrange the information in a way to highlight significant relationships. The final step is interpretation and drawing of inferences and conclusions. In brief, financial analysis is the process of selection, relation and evaluation. Ratio analysis in view of its several limitations should be considered only as a tool for analysis rather than as an end in itself. The reliability and significance attached to ratios will largely hinge upon the quality of data on which they are based. They are as good or as bad as the data itself. Nevertheless, they are an important tool of financial analysis.

BIBILIOGRAPHY Web sites: www.sbi.com www.icici.com www.pnb.com

Books referred: Basic Financial Management- M Y Khan P K Jain Financial Management-Prasanna Chandra