ACKNOWLEDGEMENT

Success in my endeavor calls for cooperation and guidance from seniors and colleagues. This was simply brought out to me while making this project.

A special note goes thanks to Mrs.Ruchika madam for his guidance while undergoing this project.

I would like to convey my heartfelt to my faculty for the trust she showed in me in assigning me an important and interesting project by sparing time for me from her busy schedule to discuss and clarify various issue connected with this project, for her friendly advice and the motivation she provided me in the completion of the project.

It was enlivening and worthwhile experience to HDFC bank minor project my thanks would be incomplete without thanking almighty god for his superlative support and blessings

MANKIT SINGH

CHAPTER-1 Introduction

1.1 Introduction of ratio analysis

Definition: Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication of a firm's financial performance in several key areas. The ratios are categorized as Short-term Solvency Ratios, Debt Management Ratios, Asset Management Ratios, Profitability Ratios, and Market Value Ratios. Ratio Analysis as a tool possesses several important features. The data, which are provided by financial statements, are readily available. The computation of ratios facilitates the comparison of firms which differ in size. Ratios can be used to compare a firm's financial performance with industry averages. In addition, ratios can be used in a form of trend analysis to identify areas where performance has improved or deteriorated over time. Because Ratio Analysis is based upon accounting information, its effectiveness is limited by the distortions which arise in financial statements due to such things as Historical Cost Accounting and inflation. Therefore, Ratio Analysis should only be used as a first step in financial analysis, to obtain a quick indication of a firm's performance and to identify areas which need to be investigated further. The pages below present the most widely used ratios in each of the categories given above. Please keep in mind that there is not universal agreement as to how many of these ratios should be calculated. You may find that different books use slightly different formulas for the computation of many ratios. Therefore, if you are comparing a ratio that you calculated with a published ratio or an industry average, make sure that you use the same formula as used in the calculation of the published ratio.

 HELPS IN EVALUATING THE FIRMS PERFORMANCE: With the help of ratio analysis conclusion can be drawn regarding several aspects such as financial health profitability an operational efficiency of the undertaking ratio points out the operating efficiency of the firm i.e. whether the management has utilize the firm assets correctly to increase the investors wealth.it ensure a firm return to its owner and secures optimum utilization firms assets.

HELPS IN COMMUNICATING: The financial strength and weakness of a firm are communicating in a more easy and understandable manner by the use of ratio. The info contained in the financial statement is conveyed in meaningful manner to the one from who it is mean. Thus a ratio helps in communicating and enhances the value of the financial statement.

Simplifies financial statement: The information given in the basic financial statements serves no useful Purpose unless its interrupted and analyzed in some comparable terms. The ratio analysis is one of the tools in the hands of those who want to know something more from the financial statements in the simplified manner.

Helps in determining the financial position of the concern: Ratio analysis facilitates the management to know whether the firms financial position is improving or deteriorating or is constant over the years by setting a trend with the help of ratios The analysis with the help of ratio analysis can know the direction of the trend of strategic ratio may help the management in the task of planning, forecasting and controlling.

 Helpful in budgeting and forecasting: Accounting ratios provide a reliable data, which can be compared, studied and analyzed. These ratios provide sound footing for future prospectus. The ratios can also serve as a basis for preparing budgeting future line of action.

Liquidity position: With help of ratio analysis conclusions can be drawn regarding the Liquidity position of a firm. The liquidity position of a firm would be satisfactory if it is able to meet its current obligation when they become due. The ability to meet short term liabilities is reflected in the liquidity ratio of a firm.

Long term solvency: Ratio analysis is equally for assessing the long term financial ability of the Firm. The long term solvency s measured by the leverage or capital structure and profitability ratio which shows the earning power and operating efficiency, Solvency ratio shows relationship between total liability and total assets.

Operating efficiency: Yet another dimension of usefulness or ratio analysis, relevant from the Viewpoint of management is that it throws light on the degree efficiency in the various activity ratios measures this kind of operational efficiency.

 Long term solvency: Ratio analysis is equally for assessing the long term financial ability of the Firm. The long term solvency s measured by the leverage or capital structure and profitability ratio which shows the earning power and operating efficiency, Solvency ratio shows relationship between total liability and total assets.

(1.2) Trend and Industry Analysis Thats where trend (time-series) and industry (cross-sectional) analysis come in. You can compare your firms ratios to trend data, which is data from other time periods for your firm, to see how your firm is doing over a series of time periods. You can also compare your firms ratios to industry data. You can gather data from similar firms in the same industry, calculate their financial ratios, and see how your firm is doing compared to the industry at large. Ideally, to get a good picture of the financial picture of your firm, you should do both.

STANDARDS OF COMPARISION: The ratio analysis involves comparison for a useful interpretation of the financial statements. A single ratio is itself does not indicate favorable or unfavorable condition. It should be compared with some standard. It consists of: PAST RATIOS: Ratio calculated from past financial statements of the same firm. Current ratio in 1991 compared with 2009

 COMPETITORS RATIOS: Ratios of some selected firms, especially most progressive and successful competitor, at the same point of time.

INDUSTRY RATIOS: Ratios of industry to which the firm belongs.

PROJECTED RATIOS: Ratios developed using the projected or preforms financial statements of the same firm.

(1.3) Classification of Ratios

The parties interested in financial analysis are short and long term creditors, owners and management. Short term creditors main interest is I the liquidity position or short term solvency of the firm. Long term creditors on the other hand are more interested in the long term solvency and profitability of the firm. Similarly, owners concentrate on the firm's profitability and financial condition. Management is interested in evaluating every aspect of the firm's performance. They are classified into 4 categories:

Liquidity ratios Leverage ratios Activity ratios Profitability ratios

Liquidity Ratios: Liquidity ratios measure the firms ability to meet current obligations. It is extremely essential for a firm to be able to meet its obligations as they become due liquidity ratio's measure. The ability of the firm to meet its current obligations. In fact analysis is of liquidity needs in the preparation of cash budgets and cash and funds flow statements, but liquidity ratios by establishing a relationship between cash and other current assets to current obligations provide a quick measure of liquidity. A firm should ensure that it does not suffer from lack of liquidity and also that it does not have excess liquidity. The failure of the company to meet its obligations due to the lack of sufficient liquidity will result in poor credit worthiness, loss of creditors confidence or even in legal tangles resulting in the closure of company. A very high degree of liquidity is also bad, idle assets earn nothing. The firm's funds will be unnecessarily tied up to current assets. Therefore, it is necessary to strike a proper balance between high liquidity and lack of liquidity. 1. Current ratio 2. Quick ratio 3. Interval measure 4. Net working capital ratio

1. Current Ratio: Current ratio is calculated by dividing current assets by current liabilities: Current assets include cash and those assets which can be converted into cash within a year, such as marketable securities, debtors and inventories. Current liabilities include creditors, bills payable, accrued expenses, short term back loan, income tax liability and long term debt maturing in current year. The current ratio is a measure of firm's short term solvency.

As a conventional rule a current ratio of 2: 1or more is considered satisfactory. The current ratio represents margin of safety for creditors

CURRENT RATIO = CURRENTS ASSETS CURRENT LIABILITIES

2. Quick Ratio: Quick ratio establishes a relationship between quick or liquid, assets and current liabilities. Cash is the most liquid asset, other assets which are considered to be relatively liquid and included in quick assets are debtors and bills receivables and marketable securities. Inventories are considered to be less liquid. Generally a quick ratio of 1:1 is considered to represent a satisfactory current financial condition

QUICK RATIO: CURRENT INVENTORIES CURRENT LIABILITIES

3. Interval Measure: The ratio which assesses a firm's ability to meet its regular cash expenses is the interval measure. Interval measure relates the liquid assets to average daily operating cash outflows. The daily operating expenses will be equal to cost of goods sold plus selling, administrative

and general expenses less depreciation divided by number of days in the year.

INTERVAL MEASURE: CURRENTASSETS INVENTORY AVERAGE DAILY OPERATING EXPENSES

4. Net Working Capital Ratio: The difference between current assets and current liabilities excluding short term bank borrowing is called net working capital or net current assets. Net working capital is sometimes used as measure of firm's liquidity.

NET W.C RATIO: NETWORKING CAPITAL NET ASSETS

Leverage Ratios: The short term creditors, like bankers and suppliers of raw material are more concerned with the firms current debt paying ability. On the other hand, long term creditors like debenture holders, financial institutions etc. are more concerned with firms long term financial strength. In fact a firm should have short as well as long term financial position. To judge the long term financial position of the firm, financial leverage or capital structure, ratios are calculated. These ratios indicate mix of funds provided by owners and lenders. As a general rule, there should be an appropriate mix of debt and owners equity in financing the firm's assets.

1. Debt Ratio 2. Debt Equity Ratio 3. Capital employed to net worth ratio 4. Other Debt Ratios

1. Debt Ratio: Several debt ratios may be used to analyses the long term solvency of the firm. It may therefore compute debt ratio by dividing total debt by capital employed or net assets. Net assets consist of net fixed assets and net current assets: DEBT RATIO: TOTAL DEBT NET ASSETS

2. Debt Equity Ratio: It is computed by dividing long term borrowed capital or total debt by Shareholders fund or net worth. DEBT EQUITY RATIO: TOTAL DEBT NET WORTH DEBT EQUITY RATIO: LONG TERM BORROWED CAPITAL SHARE HOLDERS FUND

3. Capital Employed To Net Worth Ratio: There is another alternative way of expressing the basic relationship between debt and equity. It helps in knowing, how much funds are being contributed together by lenders and owners for each rupee of owner's contribution. This can be found out by calculating the ratio of capital employed or net assets to net worth NET WORTH RATIO: CAPITAL EMPLOYED NET WORTH

4. Other Debt Ratios: To assess the proportion of total funds Short and Long term provided by outsiders to finance total assets, the following ratio may be calculated TL to TA RATIO: Other debt ratio: TOTAL LIABILITIES TOTAL ASSETS

Activity Ratios: Funds of creditors and owners are invested in various assets to generate sales and profits. The better the management of assets, the larger is an amount of sales. Activity ratios are employed to evaluate the efficiency with which the firm manages and utilizes its assets these ratios are also called turnover ratios because they indicate the speed with which assets are being converted or turned over into sales. Activity ratios, thus, involve a relationship between sales and assets. A proper balance between sales and assets generally reflects that assets are managed well.

1. Inventory turnover ratio 2. Debtors turnover ratio 3. Collection period 4. Net assets turnover ratio 5. Working Capital turnover ratio

1. Inventory Turnover Ratio: Inventory turnover ratio indicates the efficiency of the firm in producing and selling its product. It is calculated by dividing cost of goods sold by average inventory. Average inventory consists of opening stock plus closing stock divided by 2. INVENTORY TURNOVER RATIO: COST OF GOODS SOLD AVERAGE INVENTORY

2. Debtors Turnover Ratio: Debtors turnover ratio is found out by dividing credit sales by average debtors. Debtors turnover indicates the number of times debtors turnover each year. Generally the higher the value of debtors turnover, the more efficient is the management of credit DEBTORS TURNOVER RATIO = CREDIT SALES AVERAGE DEBTORS

3. Collection Period: The average number of days for which debtors remain outstanding is called the average collection period. AVERAGE COLLECTION PERIOD= NO. OF DAYS IN A YEAR DEBTORS TURNOVER

4. Net Assets Turnover Ratio: A firm should manage its assets efficiently to maximize sales. The relationship between sales and assets is called net assets turnover ratio. Net assets include net fixed assets and net current assets NET ASSETS TURNOVER RATIO= SALES NET ASSETS

5. Working Capital Turnover Ratio: A firm may also like to relate net current assets to sales. It may thus computer networking capital turnover by dividing sales by net working capital WORKING CAPITAL TURNOVER RATIO= SALES NET CURRENT ASSETS

Profitability Ratios: A company should earn profits to survive and grow over a long period of time. Profits are essential but it would be wrong to assume that every action initiated by management of a company should be aimed at maximizing profits, irrespective of social consequences. Profit is the difference between revenues and expenses over a period of time. Profit is the ultimate output of a company and it will have no future if it fails to make sufficient profits. Therefore, the financial manager should continuously evaluate the efficiency of the company in terms of profits. The profitability ratios are calculated to measure the operating efficiency of the company.

Generally, there are two types of profitability ratios 1. Profitability in relation to sales 2. Profitability in relation to investment a. Gross profit margin ratio b. Net profit margin ratio c. Operating expenses ratio d. Return on Investment e. Return on equity f. Earnings per share g. Dividends per share h. Dividend payout ratio i. Price earnings ratio

A. Gross Profit Ratio: It is calculated by dividing gross profit by sales. The gross profit margin reflects the efficiency with which management produces each unit of product. This ratio indicates the average spread between the cost of goods sold and the sales revenue. GROSS PROFIT RATIO= GROSS PROFIT SALES B. Net Profit Ratio: Net profit is obtained when operating expenses, interest and taxes are subtracted from the gross profit. The net profit margin is measured by dividing profit after tax or net profit by sales. NET PROFIT RATIO= NET PROFIT SALES C. Operating Expense Ratio: Operating expense ratio explains the changes in the profit margin ratio. This ratio is computed by dividing operating expenses like cost of goods sold plus selling expenses, general expenses and administrative expenses by sales. OPERATING EXPENSE RATIO= OPERATING EXPENSES *100 SALES The higher operating expenses ratio is unfavorable since it will leave operating income to meet interest dividends etc.

D. Return On Investment: The term investment may refer to total assets or net assets. The conventional approach of calculating return on investment is to divide profit after tax by investment. Investment represents pool of funds supplied by shareholders and lenders. While PAT represents residue income of shareholders RETURN ON INVESTMENT=PROFIT AFTER TAX INVESTMENT E. Return On Equity: Ordinary shareholders are entitled to the residual profits. A return on shareholders equity is calculated to see the profitability of owners investment. Return on equity indicate show well the firm has used the resources of owners. The earning of a satisfactory return is the most desirable objective of business. RETURN ON EDQUITY= PROFIT AFTER TAX NET WORTH F .Earnings Per Share: The measure is to calculate the earnings per share. The earning per share is calculated by dividing profit after tax by total number of outstanding. EPS simply shows the profitability of the firm on a per share basis, it does not reflect how much is paid as dividend and how much is retained in business. EARNINGS PER SHARE= PROFIT AFTER TAX NO. OF SHARES OUTSTANDING

G. Dividends per Share: The net profits after taxes belong to shareholders. But the income which they really receive is the amount of earnings distributed as cash dividends. Therefore, a larger number of present and potential investors may be interested in DPS rather than EPS. DPS is the earnings distributed to ordinary shareholders divided by the number of ordinary shares outstanding. DPS= EARNINGSPAID TO SHARE HOLDERS NUMBER OF SHARES OUTSTANDING

H. Dividend Pay Out Ratio: The dividend payout ratio is simply the dividend per share divided by Earnings per Share. DIVIDEND PAY OUT RATIO= DIVIDEND PER SHARE EARNINGS PER SHARE

I. Price Earnings Ratio: The reciprocal of the earnings yield is called price earnings ratio. The price earnings ratio is widely used by security analysts to value the firm's performance as expected by investors. Price earnings ratio reflects investors expectations about the growth of firm's earnings. Industries differ in their growth prospects. Accordingly, the P/E ratios for industries very widely.

PRICE EARNING RATIO= MARKET VALUE PER SHARE EARNING PER SHARE

CHAPTER II COMPANY PROFILE

(2.1) About the Company

The Kotak Mahindra Group

Kotak Mahindra is one of India's leading financial organizations, offering a wide range of financial services that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the diverse financial needs of individuals and corporates.

The group has a net worth of over Rs.6, 523crore and has a distribution network of branches, franchisees, representative offices and satellite offices across cities and towns in India and offices in New York, London, San Francisco, Dubai, Mauritius and Singapore. The Group services around 6.2 million customer accounts.

Group Management
Mr. Uday Kotak Mr. C. Jayaram Mr. Dipak Gupta Executive Vice Chairman & Managing Director

(2.2) Formation Of The Company

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Uday Kotak, Sidney A. A.P into and Kotak &Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance Limited. Since then it's been a steady and confident journey to growth and success. 1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market 1990 The Auto Finance division is started 1991 The Investment Banking Division is started. Takes over FICOM, one of India's largest financial retail marketing networks 1992 Enters the Funds Syndication sector 1995 Brokerage and Distribution businesses incorporated into a separate company - Kotak Securities. Investment banking division incorporated into a separate company - Kotak Mahindra Capital Company 1996 The Auto Finance Business is hived off into a separate company Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of

Matrix Information Services Limited marks the Group's entry into information distribution. 1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset Management Company. Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business. 2000 Kotak Securities launches its on-line broking site (now www.kotaksecurities.com).Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund. 2001 Matrix sold to Friday Corporation Launches Insurance Services 2003 Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian company to do so. 2004 Launches India Growth Fund, a private equity fund. 2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund 2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities

(2.3) About Companys Important Persons DIRECTORS

Mr. K. M. Gherda retired as a Director of the Bank at the Twenty Third Annual General Meeting of the Bank held on 28th July 2008. At the same meeting, Mr. Asim Ghosh who was appointed as an Additional Director of the Bank with effect from 9th May 2008 was appointed as a Director of the Bank. Mr. Pradeep Kotak, Director of the Bank retires by rotation at the Twenty Fourth Annual General Meeting. Mr. Kotak has expressed his desire not to seek re-appointment. The Board of Directors of the Bank, at its meeting held on 12th May 2009, has re-appointed Dr. Shankar Acharya as part-time Chairman of the Bank, for a period of three years, with effect from 20th July 2009 subject to the approval of the shareholders and of the Reserve Bank of India. The approval of the shareholders in this regard is being sought at the ensuing Annual General Meeting of the Bank. Mr. Shishir Bajaj was appointed as an Additional Director of the Bank with effect from 12thMay 2009 and, pursuant to the proviso to Section 260 of the Companies Act,1956, holds office as a Director up to the date of this Annual General Meeting but is eligible to be appointed as a Director. In terms of Section 257 of the Companies Act,1956 the Bank has received notice in writing from a member along with a requisite deposit of Rs.500/- proposing the candidature of Mr. Shishir Bajaj for his appointment as a Director. Mr. Shishir Bajaj is an MBA from the Stern School of Business, New York University majoring in Finance. Mr. Bajaj is presently the Chairman and Managing Director of Bajaj Hindustan Ltd. (BHL), the largest sugar and

ethanol manufacturing company in India. He has been looking after the affairs of BHL since 1974 shouldering its overall responsibility and was made the Managing Director of BHL in 1988. He has over 35 years of extensive experience in the Indian Sugar Sector

AUDITORS
Messrs. S. R. Batliboi & Co., Chartered Accountants, auditors of your Bank, retires on the conclusion of Twenty Fourth Annual General Meeting and is eligible for re-appointment. You are requested to appoint auditors for the current financial year and to fix their remuneration.

STATUTORY INFORMATION
The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1998, are not applicable to Kotak Mahindra.

EMPLOYEES
The employee strength of Kotak Mahindra along with its subsidiaries as of 31st March 2009 was around 18000, as compared to around 21000 employees a year ago. The Bank standalone had around 8400 employees as of 31st March 2009. 179 employees employed throughout the year and 88 employees employed for part of the year were in receipt of remuneration of Rs.24 lacks or more per annum.

(2.4) Corporate Identity

Kotak Mahindra Asset Management Company Limited (KMAMC)

Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF).KMAMC started operations in December 1998 and has over 4 Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk - return profiles

and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. They are sponsored by Kotak Mahindra Bank Limited, one of India's fastest growing banks, with a pedigree of over twenty years in the Indian Financial Markets. Kotak Mahindra Asset Management Co. Ltd., a wholly owned subsidiary of the bank, is our Investment Manager. They made a humble beginning in the Mutual Fund space with the launch of our first scheme in December, 1998. Today we offer a complete bouquet of products and services suiting the diverse and varying needs and risk-return profiles of our investors. We are committed to offering innovative investment solutions and world-class services and conveniences to facilitate wealth creation for our investors. Different people have different investment needs. The ability to take risks while investing in financial products varies accordingly. In this section we present our wide range of Mutual Fund schemes, which span across the risk-reward spectrum.

PROMISES
To deliver the highest standard of service quality. To advice you of your targeted turnaround time and adhere to the same. To have a transparency in all over transaction or dealings To have a solution oriented mind set where customers are placed first. To act courteously fairly and responsibly in all our dealing with you. To accept and act upon customers feedback/complaint.

(2.5) Companys Product or Services

It also brings in the much needed investment discipline as you allocate a defined sum to your investments for a defined frequency, thus making investments a mandatory component while you allocate your resources. It brings down your average cost of acquisition of units. As you would allocate a fixed sum every month, you would buy more units when the prices of our units are lower than when they are higher. We call this Rupee Cost Averaging. Finally, through this arrangement, your funds otherwise lying idle (and if you know it, on account of inflation, depleting in real value) in your bank account get channelized into future wealth creating investments. And of course, you stand to gain in terms of a more favorable entry load on your systematic investments.

(2.5.2) systematic withdrawals (SWP)

Want to receive a regular stream of payouts in a defined frequency? Want to book profits periodically? Our Systematic Withdrawal Plan (SWP) is designed keeping in mind these requirements of yours. Through our SWP you can redeem defined sums at a pre-defined frequency by giving a one-time instruction to us. You may choose to regularly withdraw either a fixed sum or just the appreciation on your investments.

This facility caters to two segments of investor needs : 1) Investors wanting defined, regular funds inflow from their investments. 2) Investors interested in booking gains at a regular interval. If you require an exact amount regularly then the Fixed Option is suitable for you. If you do not want this withdrawal to disturb your capital contribution and would like only to reap the appreciation generated in the investment, you should opt for the appreciation option. Ideally SWP should be opted from the growth options of our schemes.

(2.5.3) Systematic Transfers (STP)

Want a phased entry into the Equity markets rather than putting in all your money at one branch? Want to book profits from your equity holdings and want your profits to continue earning for you? Try our Systematic Transfer Plan (STP). Our Systematic Transfer Plan (SWP) caters to your above needs. Through our STP you can choose to switch your investments from one Kotak Mutual scheme to another at a predefined frequency by giving a one-time instruction to us. You also have a choice between switching a fixed sum or only the appreciation on your investments. This facility caters to two segments of investor needs: 1) Investors wanting to time their exposure in the equity markets over a period of time instead of a point in time. Such investors can invest in

our Debt Schemes and choose a periodic transfer of investments into our equity schemes. 2) Investors who are already invested in equity wanting to book profits regularly and allowing the profits to earn returns in any of our Debt schemes. You can choose to transfer either a fixed sum every defined period or only the appreciation on your investments over that period from one scheme to another. The latter is helpful, where you do not want the transfer to disturb your capital contribution. Ideally STP should be opted from the growth options of our schemes.

(2.5.4) D-Kredit
Want to receive your dividend entitlement and redemption payouts faster and straight into your bank account. Our Direct Credit Facility comes automatically to you (unless you choose otherwise) if you hold an account with any of the 14 banks listed below: ABN AMRO Bank Deutsche Bank AXIS Bank HDFC Bank Centurion Bank of Punjab HSBC Citibank ICICI Bank Corporation Bank IDBI Bank Indusind Bank Kotak Mahindra Bank Standard Chartered Bank Yes Bank

Direct Credit is safer, faster and convenient compared to the conventional cheque payout mechanism.

(2.5.6) Online Transactions

(2.5.6) How to Sell Mutual Funds

The essence of professional selling today is building and maintaining of high quality relationships, based on establishing a high level of trust and credibility with the customer. Your job is to create and keep a customer indefinitely. You keep your customer by continually investing in maintaining the quality of your relationships. You should approach your clients as consultants and not as vendors and help them achieve their financial goals.

The Selling Process

Before you start selling Mutual funds you need to understand the scheme you are selling. You should not only focus on the specific features of the scheme but focus also on the specific financial goals of the prospect and show how the scheme enables him to get what he really wants. You should keep yourself updated on the track record of the scheme as well as the overall performance of the mutual fund.

Knowing your client is a strategic step. Clients may vary. Their financial needs and choice of investment differs depending on their age, earning capacity, family commitments and ability to take risk. Some of the categories are given below Young and Accumulating: These clients are typically under 40, seeking capital appreciation. They are willing to take high risks for high returns. Middle aged with family commitments: Ideally between 40-60and looking at stable investments and lower risks

Retired: They are above 60 years seeking income to meet their regular expenses. Safety of their principal is their prime concern Institutions and high net worth individuals: These include corporates, banks, trusts and wealthy investors who seek an appropriate combination of tax efficient growth and income depending upon their return expectation. There are three types of prospects - Receptive, potential and independent minded. The earlier you identify which of these you are talking to the more productive will be your selling efforts. Receptive: They are clients who will work in close association with you to develop a financial plan. They have the discipline to invest regularly and believe in the merits of professional financial advisors. Potential: They are the people who have neither the discipline nor the patience to invest but do have the desire to become a successful investor. Working closely with them could make them Receptive clients. Independent minded clients: These are clients who prefer investing directly and do not use financial advisors. They can be cultivated over time.

(2.6) Quality Policy& Objectives

Before you recommend a financial plan you must understand the needs and priorities of your client. You should help him see synergies between his financial goals and your financial plan objectives. For this you need to understand your clients Investment objectives Risk tolerance Return Expectation Cash flow requirement Tax benefits

(2.7) Organization Plans Help them choose their investments

After having understood your client's needs, priorities and financial goals you have to advise him on where to invest. Your relationship depends a lot on the advice you give to your client. You should be honest and straightforward. Be completely focused on helping your client to make a good buying decision. Here are some of the alternatives that can be presented to your client.

Encourage regular investment

You should ask your clients to start investing early and invest regularly. This will help them to make more money because of the power of compounding of the rupee.

Commit them to invest

The best investment advice and investment plans are a waste unless they are backed by the commitment of the client to invest. Be sure that the client gives you his commitment to invest. Go a step further and be ready with all kinds of paperwork, application forms and other documents required for the sale. Try and help him in any way you can.

Provide personalized after- sales- service

The last and the most important part of the sales process is the augmented element. These are the extra things that you include in your service that go beyond expectations. It is in this area of exceeding expectations that you can set yourself apart from other distributors.

It is by doing the things that go beyond what the client anticipates that you build high levels of goodwill that leads to testimonials, resales and referrals to other prospective clients.

CHAPTER-3 Research Objectives & Scope

(3.1) Objectives of Project

Ratios are highly important profit tools in financial analysis that help financial analysts implement plans that improve profitability, liquidity, financial structure, reordering, leverage, and interest coverage. Although ratios report mostly on past performances, they can be predictive too, and provide lead indications of potential problem areas. Ratio analysis is primarily used to compare a company's financial figures over a period of time, a method sometimes called trend analysis. Through trend analysis, you can identify trends, good and bad, and adjust your business practices accordingly. You can also see how your ratios stack up against other businesses, both in and out of your industry. There are several considerations you must be aware of when comparing ratios from one financial period to another or when comparing the financial ratios of two or more companies. If you are making a comparative analysis of a company's financial statements over a certain period of time, make an appropriate allowance for any changes in accounting policies that occurred during the same time span. When comparing your business with others in your industry, allow for any material differences in accounting policies between your company and industry norms. When comparing ratios from various fiscal periods or companies, inquire about the types of accounting policies used. Different accounting methods can result in a wide variety of reported figures.

(3.2) Scope of Project

Financial ratio analysis is the calculation and comparison of main indicators - ratios which are derived from the information given in a company's financial statements (which must be from similar points in time and preferably audited financial statements and developed in the same manner). It involves methods of calculating and interpreting financial ratios in order to assess a firm's performance and status. This analysis is primarily designed to meet informational needs of Investors, creditors and management. The objective of ratio analysis is the comparative measurement of financial data to facilitate wise investment, credit and managerial decisions. Some examples of analysis, according to the needs to be satisfied, are Horizontal analysis- the analysis is based on a year-to-year comparison of a firm's ratios, Vertical analysis- the comparison of balance sheet accounts either using ratios or not, to get useful information and draw useful conclusions, and Cross-sectional analysis- ratios are used and compared between several firms of the same industry in order to draw conclusions about an entity's profitability and financial performance. Interfirm analysis can be categorized under cross-sectional, as the analysis is done by using some basic ratios of the industry in which the firm under analysis belongs to (and specifically, the average of all the firms of the industry) as benchmarks or the basis for our firm's overall performance evaluation.

CHAPTER-4 Research Methodology& Limitation

(4.1) Meaning Of Research

Research Methodology is a way to systematically solve the research problem. It may be understood as Science of studying how research is done, Scientifically in it we study the various steps that generally adopted by a researcher in studying his research problem along with the logic behind them. Accuracy of the study depends on the systematic application of the method. The researcher has to decide the method to be used that helps him to get a desired direction in a systematic way. Definitions According to Clifford Woody Research comprises defining and redefining problems, formulating or hypothesis or suggested solutions collecting: organizing and evaluating data making deductions and reaching conclusions to determine whether they fit the formulating hypothesis. Thus, Research Methodology is a strategy that guides a researcher in providing answers to research questions and for this research survey is being done. Research in common parlance refers to a search for knowledge. In fact research is an act of scientific investigation.

(4.2) Steps of Research process

The seven major steps

(4.3) Sampling DesignSampling is the selection of some part of aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made.

(4.2.1) Sampling UnitThe sampling unit of my survey includes the Balance Sheet, Profit & Loss Account, Quarterly Results etc.

(4.2.2) Sampling MethodIn my survey, I have used Observation Method.

(4.2.3) Data CollectionData Collection was done in two ways they were1. Primary data collection 2. Secondary data Collection

(4.2.4) Secondary Data Collection In my project I have taken secondary data for analysis it is through Website, Journals etc.

(4.2.5) Analysis and InterpretationData collected was compiled up and on the basis of percentage method depicted through bar diagrams Interpretation was done and recommendations were given.

(4.4) Limitations of Ratios and Potential Impact in the Analysis

Ratios are not predictive; as they are usually based on historical information not withstanding ratios can be used as a tool to assist financial analysis. They help to focus attention systematically on important areas and summaries information in an understandable form and assist in identifying trends and relationships (see methods for facilitating the financial analysis above). However they do not reflect the future perspectives of a company, as they ignore future action by management. They can be easily manipulated by window dressing or creative accounting and may be distorted by differences in accounting policies. Inflation should be taken into consideration when a Ratio Analysis is being applied as it can distort comparisons and lead to inappropriate conclusions. Comparisons with industry averages are difficult for a conglomerate firm since it operates in many different market segments. Seasonal factors may distort ratios and thus must be taken into account when making ratios are used for financial analysis. Not always easy to tell that a ratio is good or bad. Must be always used as an additional tool to back up or confirm other financial information gathered. Different operating and accounting practices can distort comparisons.

CHAPTER-5 Data Interpretation& Presentation

Data Interpretation And Analysis

CHAPTER 6 FINDINGS

(6.2) FINDINGS OF THE STUDY

After doing the analysis, i find out that the operating profit margin of a bank is low in year 2009 as compared to last two years. Which shows that sales are low? In this analysis the gross profit margin of a bank is also comes down from 18.13 to 11.72 in year 2009 which shows that the bank is facing a problem of having low liquidity or cash flow to spend on marketing & investment, R&D. The analysis also shows that net profit margin of bank is also came down by 2.02%, it means that bank is not preforming well to recover its debts.

The return on investment ratio comes down by very less margin; it shows that the bank is having a consistent performance in earning on its investment as compared to last year.

The return on net worth shows that how the firm uses the shareholders interest or investment fund to generate earning growth. By comparing last 3 years RONW it is decaling every year which shows the bank is not having much profit available to equity shareholder & it is also not preferred much by the investors.

CHAPTER-7 CONCLUION & SUGGESTION

(7.1) Conclusion
After overhauling the all situation that boosted a number of Pvt. Companies associated with multinational in the Insurance Sector to give befitting competition to the established behemoth Kotak in private sector, we come at the conclusion that : There are very tough competitions among the private insurance companies on the level of new trend of advertising to lull a major part of Customers.

Kotak have to work more to increase its sale or attract customers for investing, because the operating profit margin goes very down in 2009.

The positive point is that they are having consistent return on investment.

As a private player in the market kotak is facing problem in recovering its loans due to which net profit of the bank came down by 2.02%.

The entry of more Pvt. Players in the Insurance Sector has expanded the product segment to meet the different level of the requirement of the customers. It has brought about greater choice to the customers.

(7.2) Suggestion
The study has provided with the useful data from the respondents. There has a lot to be recommended. Following are the recommendations:

There is a need for better promotion for the investment products & services. The bank should advertise its products through television because it will reach to the masses.

More returns should be provided on Insurance plans. As the bank provide the Insurance facility to its customers. It should provide this facility by tie up with the other Insurance organizations as well. The main reason is that, the entire customers do not want Insurance of only one company. They should have choice while selecting a suitable Insurance plans. This will definitely add to the goodwill & profit for the bank.

Bibliography

(8.1) Books:
Research methodology by C.R KOTHARI Management accounting and business finance by SHASHI K. GUPTA & R.K. SHARMA

(8.2) Website
www.google.com www.indiainfoline.com www.kotaklife.com www.insuranceworld.com www.corpbank.com www.about.com

ANNEXURE

Profit and Loss a/c of the year of 31st march`09 to 31st march`13