1.

1 INTRODUCTION

As observed in the preceding Chapter, a basic limitation of the traditional financial

statements comprising balance sheet and the profit ad loss account is that the do not give all

the information related to the financial operations of a fir. Nevertheless, they provide some

extremely useful information to the extent that the balance sheet mirrors the financial position

on a particular date in terms of structure of assets, liabilities and owners equity ad so on and

the profit ad loss account shows the results of operations during a certain period of time in

terms of the revenues obtained and the cost incurred during a certain period of time in terms

of summarized view of the financial position and operations of a firm Therefore, much can be

learnt about a firm from a careful examinations of its financial statements as invaluable

documents/performance reports. The analysis of financial statements is thus, a important aid

to financial analysis.

The focus o financial analysis is key figures in the financial statements and the

significant relationship that exists between them. The analysis of financial statements is a

process of evaluating the relationship between component part of financial statements to

obtain a better understanding of the firms position ad performance. The first task of the

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 relation ships. The final step is interpretation and

drawing of inferences and conclusions. In brief financial analyst is the process of selection ,

relation and evaluation.

The present chapter is devoted to an in-depth analysis of financial statements and its

use for decision making by various parties interested in them. Te focus of the chapter I on

ratio analysis as the most widely used technique of financial statements analysis.

1
 Banks are in the business of accepting deposits for the purpose of lending. They act as

financial intermediaries between depositors with surplus funds and borrowers who are in

need of funds. Banks occupy a pivotal place in the payment system for government, business

and house holds. Thus, play a vital role in the economic and financial life of the country.

The banking sector in the country has undergone a metamorphic persuade the policies

of interest rate deregulation. The most important change that has overtaken the nations

banking industry, relates to the fact that the competitive forces are sought to be introduced

consciously in the financial services sector wide to the entry of foreign banks and new private

sector banks.

After the nationalization of 14 major commercial banks in the year 1969, no new

private banks were licensed by RBI in the country though there was no legal bank on the

entry of private sector banks. In the recognition of the need to introduce greater completion

with a view to achieving higher productivity and efficiency of the banking system, RBI

issued few guidelines on January 1993, for the study of private sector banks. Subsequently

new commercial banks have been granted license to start banking operation.

The private sector banks have been very aggressive in business expansion and is also

reporting higher profit levels taking the advantage of technology and skilled manpower. In

certain areas, their banks have been out crossed the other group of banks including foreign

banks.

PRIVATE BANKING:

Private Banks are the owned by the private individuals or corporation and not by

the government of cooperative societies. In India 32 private banks are there. In India, ING

bank was the first to offer private banking services on ING taking over the erstwhile VYSYA

Bank. The private banking arm operates as a division of the ING VYSYA Bank .ING private

2
banking worldwide operates through 90 business units in 60 different countries servicing

more than 6 million clients.

Private banking is the all advice products and services that contribute to unlocking

the world of investment opportunities.

Contribution from ING VYSYA bank the total assets of the bank for the year

under preview increased from 10718 crores to 11597 crores recording a growth of 8.2per cent

while the deposits of the bank stood at 9187 crores.

The bank recorded on deposit growth of 14per cent in deposits for the period under

review. Reflecting a quantum growth of 425 crores in absolute terms savings banks deposits

increased by 90 crores for the same period indicating growth of 9per cent.

Indian consumer behaviour- consumer will favor products that offer the most

quality performance and innovative features consumer behaviour is the process where the

individuals decides whether, what, when, how and from whom to purchase goods and

services.

3
1.2. NEED FOR THE STUDY

Financial services are one of the dominating sectors in the Indian financial system.

The goal of marketing is to attract new customers by promising superior value, and to retain

customers by delivering services. It is very important for knowing the customer awareness

and preferences of the customer and understands what the customer feelings about their

service and products.

This study includes assessing the future prospects of ING VYSYA bank by the past

performance of the bank; it is well evaluated by the previous financial statements which gave

a clear picture about the financial condition of the bank.

4
1.3. OBJECTIVE OF THE STUDY

The main objective of the study is to evaluate the financial data of ING VYSYA Bank and

asses the performance of the organization by its financial reports.

To understand the gaps between customer expectations and performance.

To provide insights into corporate expectations and achieve customer satisfaction.

To compare the financial reports year after year and asses the organization.

Comparison of actual figures with standards, and to introduce necessary

measurements for strengthening financial structure.

5
1.4 METHODOLOGY OF THE STUDY

Methodology is the specification of methods and procedures for acquiring the

information. It is the overall operational pattern or frame work of the project that stipulates

what information is to be collected, from which sources and by what procedures. For the

study the method used is descriptive.

DATA COLLECTION TECHNIQUES:

Use of both primary and secondary sources of data in the study

Use of primary source of information by collecting the financial reports from the

organization.

Secondary data collected by visiting libraries and by use of business journals and

reference books.

Analysis and interpretation of the financial data.

Making recommendations.

6
1.5. LIMITATIONS OF THE STUDY

Time has been the main limiting factor since the duration for study is one month is

not sufficient to study & obtain detailed information.

This study is restricted to Srikakulam; the findings of the study cannot be

generalized to the whole Organization.

The analysis is based on past performance, which may not predict the future and

the findings will not hold good for a long.

Most of the data was not given by the organization due to confidentiality.

7
2.1. INDUSTRY PROFILE

History of banking in India:

Without a sound and effective banking system in India it cannot have a healthy

economy. The banking system of India should not only be hassle free but it should be able to

meet new challenges posed by the technology and any other external and internal factors.

For the past three decades Indias banking system has several outstanding

achievements to its credit. The most striking is its extensive reach. It is no longer confined to

only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached

even to the remote comers of the country. This is one of the main reasons of Indias growth

process.

The governments regular policy for Indian bank since 1969 has paid rich dividends

with the nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting

a draft for withdrawing his own money. Today, he has a choice. Gone are days when the most

efficient bank transferred money from one branch to other in two days. Now it is simple as

instant messaging or dials a pizza. Money has become the order of the day.

The first bank in India, though conservative, was established in 1786. From 1786 till

today, the journey of Indian banking system can be segregated into three distinct phases.

They are as mentioned below,

Early phase from 1786 to 1969 of Indian banks

Nationalization of Indian banks up to 1991 prior to Indian banking Sector reforms.

New phase of Indian banking system with the advent of Indian Financial & banking sector

reforms after 1991.

8
 To make this write-up more explanatory, I prefix the scenario as phase I, phase II, and

phase III.

PHASE 1:

The general bank of India was set up in the year 1786. Next came bank of Hindustan

and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of

Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency

Banks. These three banks were amalgamated in 1920 and imperial Bank of India was

established which started as private shareholders banks.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab

National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913,

Bank of Mysore was set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic

failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To

streamline the functioning and activities of commercial banks, the government of India came

up with the Banking Companies Act, 1949 which was later changed to banking regulation act

1949 as per amending act of 1965.

(Act no 23 of 1965) Reserve Bank of India was vested with extensive powers for the

supervision of banking India as the Central Banking Authority. During those days public

has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of

it the savings bank facility provided by the postal department was comparatively safer.

Moreover, funds were largely given to traders.

PHASE 2:

Government took major steps in this Indian Banking Sector Reform after

independence. In 1955, it nationalized imperial Bank of India with extensive banking

facilities on a large scale especially in rural and semi-urban areas. It formed state Bank of

9
India to act as the principal agent of RBI and to handle banking transactions of the Union and

State Government all over the country.

Seven banks forming subsidiary of state Bank of India was nationalized in 1960 on

19th July, 1969, major process of nationalization was carried out. It was the effort of the

Prime Minister of India, Mrs. Indira Gandhi, 14 major commercial banks in the country were

nationalized.

Second phase of nationalization Indian Banking Sector Reform was carried out in

1980 with seven more banks. This step brought 80per cent of the banking segment in India

under Government ownership.

The following are the steps taken by the government of India to Regulate Banking

Institutions in the Country.

1949: Enactment of Banking Regulation Act

1955: Nationalization of State Bank of India

1959: Nationalization of SBI subsidiaries

1961: Insurance cover extended to deposits

1969: Nationalization of 14 major banks

1971: Creation of credit guarantee corporation

1975: Creation of regional rural banks

1980: Nationalization of seven banks with deposits over 200 crores.

After the nationalization of banks the branches of the public sector bank India rose to

approximately 800per cent in deposits and advances took a huge jump by 11,000per cent

Banking in the sunshine of government ownership gave the public implicit faith and immense

confidence about the sustainability of these institution. This phase has introduced many more

products and facilities in the banking sector in its reforms measure. In 1991 under the

10
chairmanship of M.Narasimham, a committee was set up by his name, which worked for the

liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being

put to give a satisfactory service to customers. Phone banking and net banking is introduced.

The Entire system became more convenient and swift time is given more importance than

money.

The financial system of India has shown a great deal of resilience. It is sheltered from

any crisis triggered by any external macro economics shock as other East Asian Countries

suffered. This is all due to a flexible exchanged rate regime the foreign reserves are high, the

capital account is not yet fully convertible and banks and their customers have limited foreign

exchange exposure.

Banking Sector in India

11
Structure of the organized banking sector in India

Banking in India originated in the first decade of 18th century with The General Bank

of India coming into existence in 1786 this was followed by Bank of Hindustan. Both these

banks are now defunct. The oldest bank in existence in India is the state bank of India being

established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later,

foreign banks like HSBC and Credit l loans started their Calcutta operations in the 1850s .At

that point of time, Calcutta was the most active trading port, mainly due to the trade of the

British Empire, and due to which banking activity took roots there and prospered. The first

fully Indian owned bank was the Allah bad Bank set up in 1865.

By the 1900s, the market expanded with the establishment of banks like Punjab

national bank, in 1895 in Lahore; Bank of India, in 1906. in Mumbai - both of which were

founded under private ownership. Indian banking sector was formally regulated by Reserve

bank of India from 1935. After India's independence in 1947, the Reserve Bank was

nationalized and given broader powers.

Nationalization

The next significant milestone in Indian Banking happened in the late 1960s when the

then Indira Gandhi government nationalized, on 19th July, 1969, 14 major commercial Indian

banks, followed by nationalization of 6 more commercial Indian banks in 1980. The stated

reason for the nationalization was more control of credit delivery. After this, until the 1990s,

the nationalized banks grew at a Leisurely pace of around 4per cent, closer to the average

growth rate of the Indian economy.

After the amalgamation of New Bank of India with Punjab National Bank, currently there are

19 nationalized banks in India:

Allahabad Bank

Andhra Bank

12
 Bank of Baroda

Bank of India

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

Indian Bank

Indian Overseas Bank

Oriental Bank of Commerce

Punjab & Sind Bank

Punjab National Bank

Syndicate Bank

Union Bank of India

United Bank of India

UCO Bank

Vijaya Bank

Liberalization

In the early 1990s the then p.v. Narasimha Rao government embarked on a policy of

liberalization and gave licenses to a small number of private banks, which came to be known

as New Generation tech-savvy banks, which included banks like ICICI Bank and HDFC

Bank. This move along with the rapid growth in the economy of India, kick started the

banking sector in India, which has seen rapid growth with strong contribution from all the

three sectors of banks, namely, government banks, private banks and foreign banks.

13
 However there had been a few hiccups for these new banks with many either being

taken over like Global Trust Bank while others like Centurion Bank have found the going

tough.

The next stage for the Indian banking has been setup with the proposed relaxation in

the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given

voting rights which could exceed the present cap of 10per cent.

Current scenario

Currently (2005), overall, banking in India is considered as fairly mature in terms of

supply, product range and reach-even though reach in rural India still remains a challenge for

the private sector and foreign banks. Even in terms of quality of assets and capital adequacy,

Indian banks are considered to have clean, strong and transparent balance sheets-as compared

to other banks incomparable economies in its region. The Reserve Bank of India is an

autonomous body, with minimal pressure from the government. The stated policy of the Bank

on the Indian Rupee is to manage volatility-without any stated exchange rate-and this has

mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-

especially in its services sector, the demand for banking services-especially retail banking,

mortgages and investment services are expected to be strong. M&As, takeovers, asset sales

and much more action (as it is unraveling in China) will happen on this front in India.

Recently (March 2006), the Reserve Bank of India allowed Warburg Pincus to

increase its stake in Kotak Mahindra Bank (a private sector bank) to 10per cent. This is the

first time an investor has been allowed to hold more than 5per cent in a private sector bank

since the RBI announced norms in 2005 that any stake exceeding 5per cent in the private

sector banks would need to be vetted by them.

14
 Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks

(that is with the Government of India holding a stake), 29 private banks (these do not have

government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign

banks. They have a combined network of over 53,000 branches and 17,000 ATMs.

According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75

percent of total assets of the banking industry, with the private and foreign banks holding

18.2per cent and 6.5per cent.

Reserve Bank of India

Reserve bank of India (RBI) is the central bank of the country and is different from

central bank of India.

The central bank of the country is the Reserve bank of India. This was established in

April 1935 with a share capital of rupees 5 crores on the basis of the recommendations of the

Hilton young commission. The share capital was divided into shares of rs.100 each fully paid

which was entirely owned by private shareholders in the beginning. The government held

shares of nominal value of rs.2, 20,000.

Reserve bank of India was nationalized in the year 1949. the general superintendence

and direction of the bank is entrusted to central board of Directors of 20 members, the

Governor and four deputy governors, one government official from the ministry of finance,

ten nominated directors by the government to give representation to important elements in the

economic life of the country, and four nominated directors by the central government to

represent the four local boards with the headquarters at Mumbai, Kolkata, Chennai and New

Delhi. Local boards consists of five members each central government appointed for term of

four years to represent territorial and economic , interests of co-operative and indigenous

banks.

15
 The Reserve bank of India act, 1934 was commenced on April 1, 1935. The act,

1934(11of 1934) provides the statutory basis of the functioning of the bank.

The bank was constituted for the need of following:

To regulate the issue of bank notes

To maintain reserves with a view to securing monetary stability

2.2. COMPANY PROFILE

ING VYSYA an over view:

ING VYSYA Bank Ltd., is an entity formed with the coming together of erstwhile,

VYSYA Bank Ltd, a premier bank in the Indian Private Sector and a global financial

powerhouse, ING of Dutch origin, during Oct 2002.

The origin of the erstwhile VYSYA Bank was pretty humble. It was in the year 1930

that a team of visionaries came together to found a bank that would extend a helping hand to

those who weren't privileged enough to enjoy banking services. It's been a long journey since

then and the Bank has grown in size and stature to encompass every area of present-day

banking activity and has carved a distinct identity of being India's Premier Private Sector

Bank.

In 1980, the Bank completed fifty years of service to the nation and post 1985; the

Bank made rapid strides to reach the coveted position of being the number one private sector

bank. In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee

Celebrations, the then Finance Minister Prof. Madhu Dandavate, had termed the performance

of the bank 'Stupendous'. The year of 2005 was the 75th anniversary or Platinum Jubilee year.

ING GROUP

Over the 150 years ING group to become over of the largest life insurance

organizations in the worlds. Today It touches the lives over 50 million people across 65

countries. It offers a range of financial services including insurance pensions, banking and

16
asset management. In the year2000, total assets of the group stood at over INR 28,42,000

crores.

ING Group has wide and deep experience in setting up companies in new markets,

which require substantial investments underlining INGs long term commitment. In the last

20 years, ING group has establisher successful life insurance companies in 15 countries

contributing to the development of insurance services in these countries.

ING seeks a careful between the interests of its stakeholders: its customers

shareholders, employees and society at large. it expects all its employees to act in accordance

with the employees to act in accordance with the groups business principles, these

principles are based on INGs core values: responsiveness to the needs of customers,

entrepreneurship, professionalism, teamwork and integrity.

ING VYSYA is an joint venture between ING insurance international BV a part of

ING Group, the worlds larges life insurance company (Fortune Global 500,2002), ING

VYSYA bank, 1.5 million customers and over 400 outlets and GMR technologies and

industries limited, a part of GMR group also based in Banglore and involved in the field of

power generation, infrastructural development and several other business.

ING VYSYA Life Insurance Company is headquartered at Bangalore and has

established a strong presence in the cities Delhi, Mumbai, Kolkata, Hyderabad and Chennai,

In addition ING VYSYA life operates in Vizag, Vijayawada, Mangalore, Mysore, Pune,

Nagapur, Chandigarh and Ludhiana.

The philosophy of keeping it simple items from a 150 year long history. A history of

understanding consumer needs and fulfilling them. The ING group,

The world 4th largest financial services

Worlds second largest life insurance provider

Ranked no 17th the list of global fortune 500 companies

17
 It has 65 million customers in 50 countries, employing over 100000

Employees

ING insurance has rich heritage of 150 years.

ING-VYSYA GROUP IN INDIA:

ING VYSYA has four entities in India. Those are

ING VYSYA bank

ING VYSYA life insurance

ING VYSYA mutual fund

ING VYSYA financial service

ING VYSYA BANK:

ING VYSYA bank has 72 year old heritage. It is premier bank in Indian private

sector. Renowned for a tradition Indian, customer centric approach, the bank is known for its

innovations. It was first private bank to launch credit cards, start a housing finance

subsidiary, and launch a merchant banking and leasing subsidiary to meet the needs of the

changing scenario.

ING took over the management of the bank in October 2002 as of now the bank over

502 outlets 300 centers bring to its client a wealth of global banking expertise, baked by

traditional Indian warmth.

ING VYSYA LIFE INSURANCE:

ING VYSYA life insurance was launched in 2001, with an aim to make customers

look at life insurance a fresh, not just as a tax saving device but as a means to add protection

to life.

At ING VYSYA life insurance the one thing we hole in highest esteem is life. We

believe in enhancing the very quality of life, in addition to safe guard your security the core

18
values of ING VYSYA life insurance are to be professional, entrepreneurial, trust worthy,

approachable and caring.

Our vast experience in life insurance over the years, has enabled over the years, has

enabled us to develop a simple method by which you cha pick an insurance plan the life

maker. A tool that assists you in building a complete financial plan for life whether is

protection, saving or investment

Our portfolio offers product that helps cater to every financial requirement at any

stage in your life.

Milestones:

The long journey of over seventy-five years has had several milestones, a few of

which may be observed from the following table:

1930 Set up in Bangalore

1948 Scheduled Bank

1985 Largest Private Sector Bank

1987 The VYSYA Bank Leasing Ltd. Commenced

1988 Pioneered the concept of Co branding of Credit Cards

1990 Promoted VYSYA Bank Housing Finance Ltd.

1992 Deposits cross Rs.1000 crores

1993 Number of Branches crossed 300

Signs Strategic Alliance with BBL., Belgium.

1996 Two National Awards by Gem & Jewellery Export Promotion Council for excellent

performance in Export Promotion

19
 Cash Management Services, & commissioning of VSAT

Golden Peacock Award - for the best HR Practices by Institute of Directors. Rated as
1998
Best Domestic Bank in India by Global Finance (International Financial Journal - June

1998)

1999 Launch of Premium Savings Bank scheme with over 2 lakh new accounts

State -of - the -art Date Centre at \ITPL, Bangalore

2000
RBI clears setting up of ING VYSYA Life Insurance Company

2001 ING-VYSYA commences life insurance business.

The Bank launches a range of products & services like the Vys Vyapar Plus, the range
2002
of loan schemes for traders, ATM services, Smartserv -

2002 ING takes over the Management of the Bank from October 7 , 2002

2002 RBI clears the new name of the Bank as ING VYSYA Bank Ltd.

2003 Introduced customer friendly products like Orange Savings, Orange Current

2004 Introduced Protected Home Loans - a housing loan product

Introduced Solo - My Own Account for youth and Customer Service Line Phone
2005
Banking Service

2006 Saral Savings No Frills Account for the common man

In terms of pure numbers, the performance over the decades can better be appreciated from

the following table:

20
Comparative Figures Rs. in millions

Year Net worth Deposits Advances Profits Outlets

1940 0.001 0.400 0.400 0.001 4

1950 1.40 5.30 3.80 0.09 16

1960 1.60 20.10 13.50 0.13 19

1970 3.00 91.50 62.80 0.74 39

1980 11.50 1414.30 813.70 1.13 228

1990 162.10 8509.40 4584.80 50.35 319

2000 5900.00 74240.00 39380.00 443.10 481

2005 6527.00 81411.10 43163.10 371.90 484

2009 6863.24 80680.00 44180.00 687.50 483

2010 7067.90 91870.00 56120.00 863.50 456

2011 7473.20 104780.00 69367.30 590.01 523

2012 7094.00 125693.10 90805.90 (381.80) 536

2013 1019.67 133350.00 102320.00 90.6 575

An outlet comprises 377 branches, 56 ECs, 28 Satellite Offices and 114

ATMs as of 31st March 2006. Additionally bank also has Internet Banking

mi-bank and Customer Service Line for Phone Banking Service.

21
COMMON AREAS OF CUSTOMER-BANKER RELATIONSHIP

SAVINGS BANK ACCOUNT

These accounts are very popular and designed to help the individuals (personal

segment) to inculcate the habit of saving money and to meet their future

requirement of money.

Amounts could be deposited / withdrawn from these accounts through cheques /

withdrawal slips/ATMs.

It helps the customers to carry minimum cash besides earning interest on the

balance in the account.

These accounts could be opened by eligible person/s and certain organizations /

agencies (as approved by the Reserve Bank of India (RBI).

Customers have to provide the following documents for opening the account:

- Proof of Address (latest telephone / electricity / bank statement)

- Proof of Identity (Passport, Driving License, Identity Card issued by

Government, PAN Card, Voters ID Card),

- Two recent photographs of the accountholder(s)

- Permanent Account Number (PAN) / GIR Number / Declaration in Form

No. 60 / 61

Satisfactory introduction acceptable to the Bank

Maintain certain minimum balance in the account as per banks norms.

Interest @ 3.5 per cent per annum (prevailing interest) will be paid on the lowest

end of the day closing balance from 10th to the last day of the month. Interest rates

are subject to changes.

Interest is credited to the account at half-yearly intervals in February/March and

August/September each year.

22
 Financial Instruments endorsed in favor of the account holder/s by a third party

will not be collected in this account.

CURRENT ACCOUNT

Current Accounts can be opened by individuals, partnership firms, private and

public limited companies, HUFs/specified associates, societies, trusts, etc.

Customers have to provide the following documents for opening the account:

- Proof of Address (latest telephone / electricity, latest credit card / bank

statement )

- Proof of Identity ( Passport, Driving License, Identity Card issued by

Government / , PAN Card, Voters ID Card )

- Two recent photographs of the accountholder(s) / authorized signatories

- Permanent Account Number (PAN) / GIR Number / Declaration in Form

No. 60 / 61

- Partnership Letter / Deed, Memorandum / Articles of Association, Board /

Trust / Managing Committee Resolution etc. depending upon the nature of

the account.

(The above documents are required to identify the accountholder(s) and to

protect the accountholder(s) from any misuse / frauds)

Satisfactory introduction acceptable to the Bank.

Minimum balance as stipulated from time to time will have to be maintained. Non-

maintenance of stipulated minimum balance will attract charges.

No interest is paid on credit balances kept in current account.

For opening special types of current accounts like for Executors, Administrators,

Trustees, Liquidators etc., the Branch Manager may be contacted who will help in

opening these type of accounts.

23
SAFE DEPOSIT LOCKERS:

The facility of Safe Deposit Lockers is an ancillary service offered by the Bank. The

Bank's branches offering this facility will indicate/display this information.

The major aspects governing the services are:

A locker may be hired by an individual, firms, limited companies, specified

associations and societies etc.

Lockers are generally allotted to banks existing customer.

Nomination facility is available to individual hirer of Safe Deposit Locker.

In case of Loss of key, the same should be informed to the Branch immediately.

Lockers are available in different sizes.

Lockers are rented out for a minimum period of one year.

Locker will be allotted only to the properly introduced persons

Annual Rent is payable in advance. In case the locker is surrendered, advance rent

for unexpired period will be refunded as per banks rules.

In case of delay in payment of the annual rent, the Bank will charge interest in the

form of penalty as applicable from time to time.

Customers have the option to provide standing instruction for the payment of annual rent.

INTEREST ON DEPOSITS:

The Bank pays interest on deposits as per contracted rates on various deposit

schemes. Interest rates are revised from time to time and made known to public.

Revised interest rates are applicable only to the renewals and fresh deposits while

existing deposit continue to get interest at the contracted rate/as per RBI guidelines.

PERSONAL LOANS:

The following types of loans could be taken from the Bank.

24
 Personal Loans

Consumer Durable Loans

Vehicle Loans

Educational Loans

Housing Loans

Details of the loans could be obtained from any of the Branch.

CREDIT CARDS:

The Bank has introduced ING VYSYA BANK CREDIT CARD, a unique credit

card exclusively branded as a product of ING VYSYA Bank Ltd

The credit card is a plastic card, which allows you to buy products & services on

credit up to the pre set limits.

The free credit period allowed on the ING VYSYA Bank credit card would range

from 20 50 days, depending on the date of purchase by the cardholder.

The credit card would be issued to individuals between the ages of 18 to 70 years.

The maximum credit limit of the credit card will be Rs. 75,000 and the minimum

credit limit will be Rs. 12,000.

The income criteria for issuing the credit card are as follows:

Salaried Public Limited / Public Sector Rs.72,000 p.a

Other Salaried Rs.96,000 p.a

Other Income Rs.96,000 p.a

The annual fee for the Primary Card is Rs. 750 per annum at present and is subject

to change as per the policy of the bank.

First year fee is billed in the first statement of account of the cardholder.

25
 Service charge @ 2.95 per per cent per month or at such other rates decided by the

bank from time to time on the balance carried forward from the previous bill and

on all subsequent drawings on the card from the date of the transaction.

GENESIS OF ING VYSYA BANK

On the other hand, ING group originated in 1990 from the merger between National

Nederland NV the largest Dutch Insurance Company and NMB Post Bank Groep NV.

Combining roots and ambitions, the newly formed company called International

Nederlanden Group. Market circles soon abbreviated the name to I-N-G. The company

followed suit by changing the statutory name to ING Group N.V..

Profile:

ING has gained recognition for its integrated approach of banking, insurance and

asset management. Furthermore, the company differentiates itself from other financial service

providers by successfully establishing life insurance companies in countries with emerging

economies, such as Korea, Taiwan, Hungary, Poland, Mexico and Chile. Another

specialisation is ING Direct, an Internet and direct marketing concept with which ING is

rapidly winning retail market share in mature markets. Finally, ING distinguishes itself

internationally as a provider of employee benefits, i.e. arrangements of nonwage benefits,

such as pension plans for companies and their employees.

Mission:

ING`s mission is to be a leading, global, client-focused, innovative and low-cost

provider of financial services through the distribution channels of the clients preference in

markets where ING can create value.

The new identity:

The immediate benefit to ING VYSYA Bank ltd is the pride of having become

a member of global financial services giant, with an asset base of 1159 billion euros,
26
net profit of 7.21 billion euros as of December 31 2010. Further, the presence of the

group in over 50 countries, employing over 115000 people, serving over 60 million

customers across the globe, only multiplies the credibility, not only across the country

but also across the globe. The pride of this global identity, the back up of a financial

power house and the status of being the first Indian International bank, would also

greatly enhance productivity, profitability resulting in improved performance for the

bank to translate into higher returns, to all the stake holders.

1 Euro = Rs. 56/- (Approx.)

ING VYSYA Banks 3rd Quarter Results Net up by 194.86per cent from previous

year.

The Board of Directors approved the 3rd quarter financial results for the period

ended 31 December 2011, at its meeting held in Bangalore today.

Finance Highlights:

The net profit after tax increased by 194.86 per cent from Rs. 4.86 crores in Q3 : 2011

to reach Rs. 14.33 crores in Q3 : 2012. The PBT increased by 109.22 per cent from Rs. 10.19

crores in Q3 : 2011 to Rs. 21.32 crores in Q 3 : 2012. The Operating Profit during the current

quarter improved by 42.60per cent to reach Rs. 61.09 crores as compared to Rs. 42.84 crores

reported in Q 3: 2011. The NII of the Bank improved by 13.84 per cent from Rs. 119.88

crores in Q3: 2011 to Rs. 136.47 crores in Q3: 2012. While total income improved by 9.17

per cent during the quarter, adverse interest rate movements resulted in a marginal decline in

Other Income.

The Capital Adequacy Ratio of the Bank moved to 10.70 per cent from 10.40per cent

and the total assets of the bank stood at Rs. 18,148 crores as at December 2011 up 12.71 per

cent compared to Rs. 16,100 crores as at December 2010.

27
 Announcing the results after the meeting of the Board, the Managing Director Mr.

Vaughn Richtor stated Our focus on profitable growth and improving our liabilities mix

continues and is reflected on the improved results. We have made good progress, but we need

to ensure that our growth is also at an acceptable rate.

Final Year (FY) Results

In Rs. Q3 FY Q3 FY per cent YTD FY YTD FY per cent

Crores 2009-10 2010-11 Change 2011-12 2012-13 Change

Net Interest
136.47 119.88 13.84 396.88 348.29 13.95
Income
Other Income 40.32 42.06 -4.14 168.68 143.96 17.17
Total Income 176.79 161.94 9.17 565.56 492.25 14.89
Operating costs 115.70 119.10 -2.85 374.33 343.94 8.84
Profit before
61.09 42.84 42.60 191.23 148.31 28.94
provisions
Provisions &
39.77 32.65 21.81 93.80 90.32 3.85
Contingencies
Profit before tax 21.32 10.19 109.22 97.43 57.99 68.01
Provision for taxes 6.99 5.33 31.14 26.92 24.28 10.87

Profit after tax 14.33 4.86 194.86 70.51 33.71 109.17

The deposits grew by 15.06per cent to reach Rs. 14,380 crores as at December 2011

from Rs. 12,498 crores as at December 2010. The bank has been pursuing a strategy to

improve the share of its low cost deposits and the share of CASA in the total deposit mix has

improved from Rs. 3,281 crores (26 per cent) as at December 2010 to Rs. 4,340 crores (30

per cent) as at December 2011. The low cost deposits grew by 32per cent between the two

periods.

28
 While the cost of deposits was at 5.25 per cent during the quarter (up by 33 bps as

compared to December 2010) the yield on advances improved from 8.46per cent to 9.35per

cent during the same period. The Credit Deposit ratio stood at 75.29 per cent as at December

2006.

Net advances grew by 11.32 per cent as at December 2011 to reach Rs. 10,827 crores

from Rs. 9,726 crores as at December 2010. Both, the Gross and Net NPA levels showed

significant improvement. The Gross NPA moved from 4.66 per cent as at December 2010 to

3.34per cent as at December 2011 and the Net NPAs improved from 1.66 per cent to 1.27

per cent during the same period.

Other key initiatives:

During the quarter a new branch was opened at Kakurgachi, Calcutta and an

Extension Counter in Kolar was converted into a full-fledged branch. The bank has obtained

permission from the Reserve Bank of India to open 7 new branches and 50 off site ATMs

and the process to open these outlets at the earliest has been initiated. The Banks ATMs now

accept the VISA Electron, Visa Credit & Visa Plus cards also in addition to the Master

Cirrus cards.

ING VYSYA Bank Ltd is a premier private sector bank with retail, private and

wholesale banking platforms that serve over 1.5 million customers. With over 75 years of

history in India and leveraging INGs global financial expertise, a workforce of 5,422

employees staff 491 outlets to offer their clients an increasingly broad range of innovative

and established products and services.

The services of the bank include:

Corporate Banking

Commercial Banking

Treasury Management

29
 Retail Banking

Private or Personal Banking

Credit Card Services

Mutual funds

Demit Account Services

ING VYSYA LIFE IN INDIA AN OVERVIEW

ING VYSYA Life Insurance Company Limited (the company) entered the private life

insurance industry in India in September 2001, and in a short span of 3 years has established

itself as a distinctive life insurance brand with an innovative, attractive and customer friendly

product portfolio and a professional advisors working from 46 branches (in 30 cities) across

the country and over 1200 employees.

The company with a customer base of over 1,50,000 is headquartered at Bangalore

and has established an national presence in the following cities Ahmedabad, Bangalore,

Baroda, Belgium, Bhopal, Calcutta, Chandigarh, Chennai, Cochin, Coimbatore, Delhi, Goa,

Guntur, Gurgaon, Hubli, Hyderabad, Indore, Jaipur, Kolkata, Ludhiana, Mangalore, Mumbai,

My sore, Nagpur, Pune, Secunderabad, Vadodara, Vijaywada, Vizag. Srikakulam.

The company aims to make customers look at life insurance a fresh, not just as a tax

saving device but also as a means to add protection to life. The one thing we hold in highest

esteem is life itself. We believe in enhancing the very quality of life, in addition to

safeguarding an individuals security. Our core values are therefore defined as professional,

entrepreneurial, trustworthy, approachable and caring.

The companys portfolio offers products that cater to every financial requirement, at

any life stage. We believe in continuously developing customer driven products and services

and value being accessible and responsive to the needs of our customers.

30
 In fact, the company has developed the life maker. A simple method, which can be

used to choose a plan most suitable to a specific customer based on his needs, requirements

and current life stage. This tool helps you build a complete financial plan for life, whether the

requirement is protection, savings of investment, retirement.

CEO Speak:

At ING VYSYA Life insurance, in a short span of 3 years of operations, we have

established ourselves as a distinctive, life insurance brand in India. With an innovative,

attractive and customer friendly product portfolio backed by a professional advisor force, we

are proudly serving over 1, 50,000 customers today.

We are a part of the ING Group the worlds 4th largest financial services group trusted

by 60 million people across 60 countries, with a heritage of over 150 years.

Our cornerstone is the trust that youve invested in us. Weve always designed

products with your needs in mind, and a communication model that speaks to you.

Our new website reflects our openness & dynamism. We speak a language that you

will understand, and not complicated jargon. What we tell you, we hope, will make it easier

for you to choose from our product portfolio, the policy that suits you best. For Instance we

have developed a dynamic new touch point between you and us the life maker. The life

maker is a complete financial planning tool. It takes in basic information from you and offers

you the policy that is best suited to your needs. In an interactive way, it gives you results that

are customized to you and empowers you to choose for yourself what is best for your

requirements. It is our endeavor to serve you better & develop a greater understanding of you

needs. and our website is a step in the direction,

CORPORATE OBJECTIVE:

An ING VYSYA life we strongly believe that as life is different at every stage, life

insurance must offer flexibility and choice to go with that stage. We are fully prepared and

31
committed to guide you on insurance products and services through our will trained advisors,

backed by competent marketing and customer services, in the best possible way.

It is our aim to become one of the top private life insurance companies in India and to

become a comer stone of INGs integrated financial services business in India.

ORGANISATION PROFILE

ING VYSYA bank ltd is an entity formed with the coming together of erstwhile,

Indian private sector and global financial power house, ING of Dutch origin during October,

2002.

The trust with destiny of VYSYA bank since 1930 is consumer centric and

relationship enrichment on a paradigm of constant learning in light of transparency

responsibility and financial stability as corner stones.

They endeavor on philosophy of customer, credit and cost aiming at providing new

ideas and intelligent solutions for all customers that reflects in customized portfolio.

ING a major Dutch group conglomerate has acquired 44per cent stake in the VYSYA

bank ltd, a milestone in the history of Indian banking, and this tie up introduces a new set of

banking products in present and also in future. ING ranks 21 among the fortune 500

companies and commands its expertise in the areas of insurance, banking and asset

management

The first Indian private bank to become a foreign bank in Indian banking history

accords to this bank only it compliance with the RBI guidelines the bank was named as ING

VYSYA bank ltd, from 7th December 2002.

The ING VYSYA bank ltd is equipped with over 380 branches, which include 8

regional collection centers, 5 specialized asset recovery management branches. The bank is

spearheading to become most preferred third generation bank leveraging on the cost of any

time any where any how banking online service to provide the timely and prompt financial

32
solutions to the customers. The bank is providing online service in 233 branch outlets and the

remaining braches are in the process of conversion on war footing basis.

CORPORATE GOVERNANCE

ING VYSYA bank will be an entrepreneurial integrated financial services institution

where innovation and transformation are the way of life.

KEY VALUES

Integrity, commercial focus, professionalism customer focus and team work.

33
3.1 Introduction:

Financial analysis

Financial analysis refers to an assessment of the viability, stability and profitability

of a business, sub-business or project.

It is performed by professionals who prepare reports using ratios that make use of

information taken from financial statements and other reports. These reports are usually

presented to top management as one of their bases in making business decisions. Based on

these reports, management may:

Continue or discontinue its main operation or part of its business;

Make or purchase certain materials in the manufacture of its product;

Acquire or rent/lease certain machineries and equipments in the production of its

goods;

Issue stocks or negotiate for a bank loan to increase its working capital.

Other decisions that allow management to make an informed selection on various

alternatives in the conduct of its business.

Goals

Financial analysts often assess the firm's:

1. Profitability- its ability to earn income and sustain growth in both short-term and

long-term. A company's degree of profitability is usually based on the income

statement, which reports on the company's results of operations;

2. Solvency- its ability to pay its obligation to creditors and other third parties in the

long-term;

Liquidity- its ability to maintain positive cash flow, while satisfying immediate

34
 obligations; Both 2 and 3 are based on the company's balance sheet, which

indicates the financial condition of a business as of a given point in time.

3. Stability- the firm's ability to remain in business in the long run, without having

to sustain significant losses in the conduct of its business. Assessing a company's

stability requires the use of the income statement and the balance sheet, as well as

other financial and non-financial indicators.

Methods

Financial analysts often compare financial ratios (of solvency, profitability, growth...):

Past Performance: Across historical time periods for the same firm (the last 5

years for example),

Future Performance: Using historical figures and certain mathematical and

statistical techniques, including present and future values, This extrapolation

method is the main source of errors in financial analysis as past statistics can be

poor predictors of future prospects.

Comparative Performance: Comparison between similar firms.

These ratios are calculated by dividing a (group of) account balance(s), taken from the

balance sheet and / or the income statement, by another, for example:

Net profit / equity = return on equity

Gross profit / balance sheet total = return on assets

Stock price / earnings per share = P/E-ratio

Comparing financial ratios are merely one way of conducting financial analysis. Financial

ratios face several theoretical challenges:

They say little about the firm's prospects in an absolute sense. Their insights about

relative performance require a reference point from other time periods or similar

firms.

35
 One ratio holds little meaning. As indicators, ratios can be logically interpreted in

at least two ways. One can partially overcome this problem by combining several

related ratios to paint a more comprehensive picture of the firm's performance.

Seasonal factors may prevent year-end values from being representative. A ratio's

values may be distorted as account balances

Change from the beginning to the end of an accounting period. Use average values

for such accounts whenever possible.

Financial ratios are no more objective than the accounting methods employed.

Changes in accounting policies or choices can yield drastically different ratio

values.

They fail to account for exogenous factors like investor behavior that are not

based upon economic fundamentals of the firm or the general economy

(fundamental analysis) .

3.2 FINANCIAL STATEMENTS:

Financial statements (or financial reports) are formal records of a business' financial

activities.

In British English, including United Kingdom company law, financial statements are

often referred to as accounts, although the term financial statement is also used, particularly

by accountants. Financial statements provide an overview of a business' financial condition in

both short and long term. There are four basic financial statements.

Balance sheet: also referred to as statement of financial position or condition,

reports on a company's assets, liabilities, and net equity as of a given point in time.

Income statement: also referred to as Profit and Loss statement (or a "P&L"),

reports on a company's income, expenses, and profits over a period of time.

36
 Statement of retained earnings: explains the changes in a company's retained

earnings over the reporting period.

Statement of cash flows: reports on a company's cash flow activities, particularly

its operating, investing and financing activities.

For large corporations, these statements are often complex and may include an

extensive set of notes to the financial statements and management discussion and analysis.

The notes typically describe each item on the balance sheet, income statement and cash flow

statement in further detail. Notes to financial statements are considered an integral part of the

financial statements.

Purpose of financial statements:

"The objective of financial statements is to provide information about the financial

strength, performance and changes in financial position of an enterprise that is useful to a

wide range of users in making economic decisions." Financial statements should be

understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are

directly related to an organization's financial position. Reported income and expenses are

directly related to an organization's financial performance.

Financial statements are intended to be understandable by readers who have "a reasonable

knowledge of business and economic activities and accounting and who are willing to study

the information diligently."

Owners and managers require financial statements to make important business

decisions that affect its continued operations. Financial analysis are then

performed on these statements to provide management with a more detailed

understanding of the figures. These statements are also used as part of

management's annual report to the stockholders.

37
 Employees also need these reports in making collective bargaining agreements (CBA)

with the management, in the case of labor unions or for individuals in discussing their

compensation, promotion and rankings.

2. External Users: are potential investors, banks, government agencies and other parties

who are outside the business but need financial information about the business for a diverse

number of reasons.

Prospective investors make use of financial statements to assess the viability of

investing in a business. Financial analyses are often used by investors and is

prepared by professionals (financial analysts), thus providing them with the basis

in making investment decisions.

Financial institutions (banks and other lending companies) use them to decide

whether to grant a company with fresh working capital or extend debt securities

(such as a long-term bank loan or debentures) to finance expansion and other

significant expenditures.

Government entities (tax authorities) need financial statements to ascertain the

propriety and accuracy of taxes and other duties declared and paid by a company.

Media and the general public are also interested in financial statements for a

variety of reasons.

Comparative Financial statements:

These statements are prepared in a way so as to provide time perspective to the

consideration of various elements of financial position embodied in the statements. This is

done to make the financial data more meaningful. The statements of two or more years are

prepared to show absolute data of two or more years, increases or decreases in absolute data

in value and in terms of percentages.

38
Comparative Income statements:

This statement discloses the net profit or net loss resulting from the operations of

business. Such statements show the operating results for a number of accounting periods so

that changes in absolute data from one period to another period may be stated in terms of

percentage. This statement helps in deriving meaningful conclusions as it is very easy to

ascertain the changes in sales volume, administrative expenses, selling and distribution

expenses, etc.

Comparative balance sheet:

This statement prepared on two or more different dates can be used for comparing

assets and liabilities and to find out any increase or decrease in these items. This facilities the

comparison of figures of two or more periods and provide necessary information which may

be useful in forming an opinion regarding the financial condition as well as progressive

outlook of the concern.

Common size statement:

This statement indicates the relationship of various items with some common item .In

the income statement the sales figure is taken as base and all other figures are expressed as

percentage of sales. Similarly in the balance sheet the total of the assets and liabilities is taken

as base and all other figures are expressed as a percentages to this total. The percentages so

calculated can be easily compared with the corresponding percentages in other periods and

meaningful conclusions can be drawn.

Funds flow statement

The flow of funds occurs when a transaction changes on the one hand a non-current

account and on the other a current account and vice-versa. Funds flow statement is not a

substitute of an income statement i.e., a profit and loss, and a balance sheet. The profit and

loss account is a document which indicates the extent of success achieved by a business in

39
earning profits. It reports the results of business activities and indicates the reasons for the

profitability or lack thereof. It does not reveal the inflows and outflows of funds in business

during a particular period

CASH FLOW STATEMENT:

In financial accounting, a cash flow statement or statement of cash flows is a financial

statement that shows a company's incoming and outgoing money (sources and uses of cash)

during a time period (often monthly or quarterly). The statement shows how changes in

balance sheet and income accounts affected cash and cash equivalents, and breaks the

analysis down according to operating, investing, and financing activities. As an analytical

tool the statement of cash flows is useful in determining the short-term viability of a

company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7), is

the International Accounting Standard that deals with cash flow statements.

People and groups interested in cash flow statements include

accounting personnel, who need to know whether the organization will be able to

cover payroll and other immediate expenses

potential lenders or creditors, who want a clear picture of a company's ability to

repay

potential investors, who need to judge whether the company is financially sound

potential employees or contractors, who need to know whether the company will

be able to afford compensation

Purpose:

The cash flow statement was previously known as the statement of changes in

financial position or flow of funds statement. The cash flow statement reflects a firm's

liquidity or solvency.

40
 The balance sheet is a snapshot of a firm's financial resources and obligations at a

single point in time, and the income statement summarizes a firm's financial transactions over

an interval of time. These two financial statements reflect the accrual basis accounting used

by firms to match revenues with the expenses associated with generating those revenues. The

cash flow statement includes only inflows and outflows of cash and cash equivalents; it

excludes transactions that do not directly affect cash receipts and payments. These noncash

transactions include depreciation and write-offs on bad debts. The cash flow statement is a

cash basis report on three types of financial activities: operating activities, investing

activities, and financing activities. Noncash activities are usually reported in footnotes.

3.3 OPERATING ACTIVITIES:

Operating activities include the production, sales and delivery of the company's

product as well as collecting payment from its customers. This could include purchasing raw

materials, building inventory, advertising and shipping the product.

Under IAS 7, operating cash flows include

receipts from the sale of goods or services

receipts for the sale of loans, debt or equity instruments in a trading portfolio

interest received on loans

dividends received on equity securities

payments to suppliers for goods and services

payments to employees or on behalf of employees

tax payments

interest payments (alternatively, this can be reported under financing activities in

IAS 7, but not in US GAAP)

payments for the sale of loans, debt or equity instruments in a trading portfolio

41
 Items which are added back to the net income figure (which is found on the Income

Statement) to arrive at cash flows from operations generally include:

Depreciation (loss of tangible asset value over time)

Deferred tax

Amortization (loss of intangible asset value over time)

Any gains or losses associated with an asset sale (unrealized gains/losses are also

added back from the income statement)

INVESTING ACTIVITIES:

Investing activities focus on the purchase of the long-term assets a company needs in

order to make and sell its products, and the selling of any long-term assets.

Under IAS 7, investing cash flows include

collections on loan principal and sales of other firms' debt instruments

investment returns from other firms' equity instruments, including sale of those

instruments

receipts from sale of plant and equipment

expenditure for purchase of plant and equipment

loans made and acquisition of other firms' debt instruments

expenditure for purchase of other firms' equity instruments (unless held for trading

or considered cash equivalents) Items under investing activities include:

Capital expenditures, which include purchases (and sales) of property, plant and

equipment

Investments

42
Sample cash flow statement using the direct method

Cash flows from operating activities

Cash receipts from customers $27,500

Cash paid to suppliers and employees (20,000)

Cash generated from operations (sum) 7,500

Interest paid (2,000)

Income taxes paid (2,000)

Net cash flows from operating activities $3,500

Citigroup Cash Flow Statement (all numbers in thousands)

Period ending 12/31/2006 12/31/2005 12/31/2004

Net income 21,538,000 24,589,000 17,046,000

Operating activities, cash flows provided by or used in:

Depreciation and
2,790,000 2,592,000 2,747,000
amortization

Adjustments to net
4,617,000 621,000 2,910,000
income

Decrease (increase) in
12,503,000 17,236,000 --
accounts receivable

Increase (decrease) in
131,622,000 19,822,000 37,856,000
liabilities

43
(A/P, taxes payable)

Decrease (increase) in
-- -- --
inventories

Increase (decrease) in
(173,057,000) (33,061,000) (62,963,000)
other operating activities

Net cash flow from

13,000 31,799,000 (2,404,000)
operating activities

Investing activities, cash flows provided by or used in:

Capital expenditures (4,035,000) (3,724,000) (3,011,000)

Investments (201,777,000) (71,710,000) (75,649,000)

Other cash flows from

1,606,000 17,009,000 (571,000)
investing activities

Net cash flows from

(204,206,000) (58,425,000) (79,231,000)
investing activities

Financing activities, cash flows provided by or used in:

Dividends paid (9,826,000) (9,188,000) (8,375,000)

Sale (repurchase) of stock (5,327,000) (12,090,000) 133,000

Increase (decrease) in debt 101,122,000 26,651,000 21,204,000

Other cash flows from

120,461,000 27,910,000 70,349,000
financing activities

Net cash flows from 206,430,000 33,283,000 83,311,000

44
 financing activities

Effect of exchange rate

645,000 (1,840,000) 731,000
changes

Net increase (decrease) in

$2,882,000 $4,817,000 $2,407,000
cash and cash equivalents

3.4 Working Capital:

Cash is the lifeline of a company. If this lifeline deteriorates, so does the company's

ability to fund operations, reinvest and meet capital requirements and payments.

Understanding a company's cash flow health is essential to making investment decisions. A

good way to judge a company's cash flow prospects is to look at its working capital

management (WCM).

Working capital refers to the cash a business requires for day-to-day operations, or,

more specifically, for financing the conversion of raw materials into finished goods, which

the company sells for payment. Among the most important items of working capital are

levels of inventory, accounts receivable, and accounts payable. Analysts look at these items

for signs of a company's efficiency and financial strength.

Take a simplistic case: a spaghetti sauce company uses $100 to build up its inventory

of tomatoes, onions, garlic, spices, etc. a week later; the company assembles the ingredients

into sauce and ships it out. a week after that, the checks arrive from customers. that $100,

which has been tied up for two weeks, is the company's working capital. the quicker the

company sells the spaghetti sauce, the sooner the company can go out and buy new

ingredients, which will be made into more sauce sold at a profit. if the ingredients sit in

inventory for a month, company cash is tied-up and can't be used to grow the spaghetti

45
business. even worse, the company can be left strapped for cash when it needs to pay its bills

and make investments. working capital also gets trapped when customers do not pay their

invoices on time or suppliers get paid too quickly or not fast enough.

3.5 FINANCIAL RATIO

In finance, a financial ratio or accounting ratio is a ratio of selected values on an

enterprise's financial statements. There are many standard ratios used to evaluate the overall

financial condition of a corporation or other organization. Financial ratios are used by

managers within a firm, by current and potential shareholders (owners) of a firm, and by a

firm's creditors. Security analysts use financial ratios to compare the strengths and

weaknesses in various companies.[1] If shares in a company are traded in a financial market,

the market price of the shares is used in certain financial ratios.

Values used in calculating financial ratios are taken from the balance sheet, income

statement, cash flow statement and (rarely) statement of retained earnings. These comprise

the firm's "accounting statements" or financial statements.

Ratios are always expressed as a decimal value, such as 0.10, or the equivalent

percent value, such as 10per cent.

Financial ratios quantify many aspects of a business and are an integral part of

financial statement analysis. Financial ratios are categorized according to the financial aspect

of the business which the ratio measures. Liquidity ratios measure the availability of cash to

pay debt. Activity ratios measure how quickly a firm converts non-cash assets to cash assets.

Debt ratios measure the firm's ability to repay long-term debt. Profitability ratios

measure the firm's use of its assets and control of its expenses to generate an acceptable rate

of return. Market ratios measure investor response to owning a company's stock and also the

cost of issuing stock.

46
 Financial ratios allow for comparisons

between companies

between industries

between different time periods for one company

between a single company and its industry average

The ratios of firms in different industries, which face different risks, capital

requirements, and competition are not usually comparable.

Sources of data for financial ratios:

Financial ratios are based on summary data presented in financial statements. This

summary data is based on the accounting method and accounting standards used by the

organization.

Accounting methods and principles:

Financial ratios may not be directly comparable between companies that use different

accounting methods or follow various standard accounting practices. Most public companies

are required by law to use generally accepted accounting principles for their home countries,

but private companies, partnerships and sole proprietorships may not use accrual basis

accounting. Large multi-national corporations may use International Financial Reporting

Standards to produce their financial statements, or they may use the generally accepted

accounting principles of their home country.

Abbreviations and terminology:

Various abbreviations may be used in financial statements, especially financial

statements summarized on the Internet. Sales reported by a firm are usually, technically, net

sales, which deduct returns, allowances, and early payment discounts from the charge on an

invoice.

47
 Companies that are primarily involved in providing services based on man-hours do

not generally report "Sales" based on man-hours. These companies tend to report "revenue"

based in income from services provided.

Profitability ratios:

Profitability ratios measure the firm's use of its assets and control of its expenses to

generate an acceptable rate of return.

Gross margin

Profit margin = Net Income / Sales

Operating margin or Operating Income Margin = Operating income / Net sales

Net margin

Gross profit margin or Gross Profit Rate = (Net sales - Cost of goods sold) / Net

sales

Operating profit margin or Return on sales (ROS)

= Earnings before interest and taxes / Sales

= Operating earnings / Net sales

Net profit margin = Net profits after taxes / Sales

Return on equity (ROE)

= Net profits after taxes / Stockholders' equity or tangible net worth

= Net profit / Equity

Return on investment (ROI ratio or Du Pont ratio) = Net income / Total Assets

Asset turnover = Sales / Assets

Return on assets (ROA) = Net Income / Total Assets

Return on assets Du Pont (ROA Du Pont) = (Net Income / Sales) x (Sales / Total

Assets)

Return on net assets (RONA)

48
 Return on capital (ROC)

Risk adjusted return on capital (RAROC)

Return on capital employed (ROCE)

Cash flow return on investment (CFROI)

Efficiency ratio

Liquidity ratios:

Liquidity ratios measure the availability of cash to pay debt.

Current ratio = Current assets / Current liabilities

Acid-test ratio (Quick ratio) = (Current assets Inventories) / Current liabilities

Receivables Turnover Ratio = Net credit sales/ Average net receivables

Inventory turnover ratio = Cost of goods sold / Average inventory

Activity ratios:

Activity ratios measure how quickly a firm converts non-cash assets to cash assets.

Average collection period = Accounts receivable / (Annual credit sales / 360 days)

DSO Ratio = Accounts receivable / Average Sales per Day

Collection period (period end)

Average payment period = Accounts payable / (Annual credit purchases / 360 days)

Inventory turnover ratio = Cost of goods sold / Average inventory

Inventory conversion ratio = Inventory conversion to cash period (days) = 360 days /

Inventory turnover

days Inventory

Debit ratios:

Debt ratios measure the firm's ability to repay long-term debt. Debt ratios measure

financial leverage.

Debt ratio = Total liabilities / Total assets

49
 Debt to assets ratio

Debt to equity ratio = (Long-term debt + Value of leases) / Stockholders' equity

Long-term debt/Total asset (LD/TA) ratio = long-term debt / Total assets

Times interest-earned ratio = Earnings before interest and taxes EBIT / Annual

interest expense

Debt service coverage ratio = Net operating income / Total debt service

Market ratios:

Market ratios measure investor response to owning a company's stock and also the cost of

issuing stock.

Payout ratio = Dividend / Earnings or

= Dividend per share / Earnings per share

Note: Earnings per share is not a ratio, it is a value in currency. Earnings per share =

Expected earnings / Number of outstanding shares

P/E ratio = Price / Earnings per share

Cash flow ratio or Price/cash flow ratio = Price of stock / present value of cash

flow per share

Price to book value ratio (P/B or PBV) = Price of stock / Book value per share

Price/sales ratio

PEG ratio

Interpretation

Analysis and interpretation are closely related. Interpretation is not possible without

analysis and without interpretation analysis has no value. Various account balances appear in

the financial statements.

50
 These account balances do not represent homogeneous data so, it is difficult to

interpret them and draw some conclusions. Interpretation is thus drawing of inference and

starting what the figures in the financial statements really mean.

In the words of Kennede and Memullar,The Analysis and Interpretation of financial

statements are an attempt to determine the significance and meaning of the financial

statements data so that a forecast may be made of the prospects for future earning, ability to

pay interest and debt maturities, and probability of a sound dividend policy.

51
Comparative Balance Sheet as at 2010-2011

increase/
2010 2011
Particulars decrease Percentage
Rs. Rs.
Rs.
Income

Interest earned 10916342 12224348 1308006 11.59

Other income 366021 1391716 1025695 9.09

11282363 13616064

Expenditure

Interest expended 6545217 7412477 867260 7.05

Operating expenses 5111061 5187905 76844 0.62

Provisions & contingencies 629079 925117 296038 2.4

12285357 13525499

Profit

Net profit for the year 38474 90565 52091 28.8

Profit (loss) Brought
89777 346037 256260 141.8
forward
Transfer from investment
52429 551037 498608 275.9
fluctuation reserve
180680 987639

Appropriations

Transfer to statutory reserve 2717 22641 19924 11.02

Transfer to capital reserve 176800 260000 83200 46.04

Balance carried to balance
1163 12924 11761 6.5
sheet
180680 295565

52
Interpretation:

The above table shows that the Comparative Balance Sheet of ING VYSYA Bank

for the year ended 31st March, 2010 and 31st March 2011.

The Comparative Balance Sheet of the Bank reveals that during 2010-2011 there

was increase in capital which is amounted to Rs.1633 i.e., 0.001 percent.

Reserves and Surplus has been increased from 2010-2011 Rs.579667, with 0.40

percent.

The Long term Liabilities i.e., deposits and Borrowings have relatively increased

by 20 percent and 2.23 percent respectively.

The total fixed assets has been increased slightly 0.48 percent this mean the bank

was not made any fixed assets during the previous year of 2010-11.

The total current assets and investments of the bank have been increased by 13.21

percent and 1.45 percent respectively.

The overall financial position of the bank is considered good.

53
 Comparative Balance Sheet 2011-2012

Increase/
2011 2012 Percentage
Particulars Decrease
Rs. Rs.
Rs.

Capital & Liabilities

Capital 907206 909048 1842 0.01

Reserves & Surplus 9289535 10123824 83429 0.49

Deposits 133352551 154185894 20833343 12.42

Borrowings 11074460 8435531 (-)2638929 (-)1.57

Other liabilities &

13042924 19208678 6165754 3.67
provisions

167666676 192862975

Assets

Cash and balance with

8461514 9458130 1041616 0.62
Reserve bank of India

Balance with banks and

money at call and short 2816823 6458905 3642082 2.17

notice

Investments 43723357 45278131 1554774 0.92

Advances 102315253 119761650 17446397 10.4

Fixed assets 4054093 3959697 (-) 94396 (-)0.05

Other assets 6340636 7946462 1605826 0.95

167711676 192862975
54
Interpretation:

The above table shows that the comparative balance sheet of ING VYSYA Bank

for the year ended 31st March, 2011 and 31st March, 2012.

The comparative balance sheet of the bank reveals that during 2011-2012 there

was an increase in capital which is amounted to Rs.1842 i.e., 0.01 Percent.

Reserves and surpluses has been increased from 2011-2012 Rs.83429, with 0.49

Percent.

The long term liabilities i.e., deposits relatively increased by 12.42 percent and

borrowings are decreased by 1.57 Percent respectively.

The total fixed asset has been decreased slightly with 0.05per cent this means the

bank was not made any fixed assets during the previous year 2011-2012.

The total current assets & investments of the bank has been increased 13.19

percent and 0.92 percent respectively.

The overall financial position of the bank is considered good.

55
Comparative Balance Sheet 2012-2013:
Increase/
2012 2013
Particulars decrease Percentage
Rs Rs
Rs

Capital & Liabilities

Capital 909048 1024743 115695 0.05

Reserves &
10123824 14331834 4208010 2.18
Surplus

Deposits 154185894 204980557 50794663 26.33

Borrowings 8435531 12498052 4062521 2.11

Other liabilities
19208678 22563851 3355173 1.74
& provisions
192862975 255399037
Assets
Cash and balance with
9458130 22635265 13177135 6.83
Reserve bank of India
Balance with banks and
money at call and short 6458908 9212320 2753415 1.42
notice

Investments 45278131 62933196 17655065 9.15

Advances 119761650 146495484 26733834 13.86

Fixed assets 3959697 3992146 32449 0.01

Other assets 7946462 10130626 2184164 1.13

192862978 255399037

56
Interpretation:
The above table shows that the comparative balance sheet of ING VYSYA

Bank for the year ended 31st March, 2012 and 31st March, 2013.

The comparative balance sheet of the bank reveals that during 2012-2013

there was an increase in capital which is amounted to Rs.115695 i.e., 0.05

percent.

Reserves and surplus has been increased from 2012-2013 Rs.4208010, with

2.18 percent.

The long term liabilities i.e., deposits and borrowings have relatively increased

by 26.33 percent and 2.10 percent respectively.

The total fixed assets have been increased slightly with 0.01 percent this mean

the bank has not made any fixed assets during the previous year 2012-2013.

The total current assets and investments of the bank has been increased by

22.11 percent and 9.15 percent respectively.

The overall financial position of the bank is considered good.

57
Common size Balance Sheet 2011:

Particulars Rs. Percentage

Assets

Fixed assets 4054093 2.41

Investments 43723357 26

Total fixed assets investments(A) 47777450 28.41

Current Assets, loans, advances

Current Assets 11233337 6.69

Advances 1102315253 61.02

Total Current Assets (B) 113548590 67.71

Other assets 6340636 3.88

(A+B) 161326040 96.12

167666676 100

Liabilities

Current liabilities & provisions 13042924 7.77

13042924 7.77

Long term loans

Borrowings 11074460 6.6

Deposits 133352551 79.53

144427011 86.13

Share Capital 907206 0.54

Reserve & surplus 9289535 5.54

10196741 6.08

58
Interpretation:
The above statement representing the Assets and Liabilities, for the year 31st March

2011. The common size balance sheet statement, in which Balance sheet ratio of each Asset

to total assets and Ratio of each liability expressed as a ratio of Total liabilities is called

common size balance sheet.

The total figure of assets amounted of Rs 167,666,676 (Rs in thousands) is taken as

100 percent and all other assets are expressed as a percent of total assets i8n the total assets

advances occupied highest percent of (61.02 percent) with an amount of 102,315,253. The

Investment occupies the second highest percent of (26.0 percent) with an amount of Rs

43,723,357. The current assets carry a percent of (6.69 percent) with an amount of Rs

11,233,337. The fixed assets consisting of percent (2.41 percents) with amount of Rs

4,054,093. The other asset carries a percent of (3.78percent) with an amount of Rs.6340636.

The total figure of liabilities 167,666,676 (Rs in thousands) is taken as 100 percent an

all their liabilities are expended as a percent of total liabilities. The Relation of each liability

to tot5al liabilities is expended the statement.

In the total liabilities Deposits carries (79.53 Percent) with an amount of Rs

133,352,551. The second position occupies other liabilities and provisions (7.77 percent) with

an amount of Rs13, 042,924. The Borrowing occupies (6.60 percent) with an amount of Rs

11,074,460. The share capital consisting of (0.54 percent) with an amount of Rs907, 206. The

Reserves and surplus carries (5.54 percent) with an amount of Rs 9,289,535.

59
Common size Balance Sheet 2012:

Particulars Rs. Percentage

Assets
Fixed Assets 3959697 2.05
Investments 45278131 23.4
Total fixed asset(+) Investments(A) 49237828 25.45

Current Assets Loans, Advances

Current Assets 15917035 8.24

Advances 119761650 62.09

Total current assets(B) 135678685 70.33

Other Assets 7946467 4.22

(A+B) 1184916513 95.78

192862980 100

Liabilities
Current liabilities & provisions 19208678 9.95

19208678 9.95

Long term loans

Borrowings 8433531 4.37

Deposits 154185894 79.94

162619425 84.31

Share capital 909048 0.47

reserves & surplus 10123824 5.24

11032872 5.71

60
Interpretation:

Common size Balance 2012.

The Above statements representing the assets and liabilities for the year 31st March

2010. The common size balance sheet statements, in which Balance sheet ratio of each

Liability is expressed as a ratio of total liabilities is called common size balance sheet.

The total figure of assets amounted of Rs.192,862,975(Rs in thousands) is taken as

100 percent and all other assets are expensed as a percent of total assets in the total assets.

Advantages occupied highest percent of (62.09) with an amount of Rs119, 761,650. The

Investments occupied the second highest (23.4 percent) with an amount of Rs.45, 278,131.

The current assets carries (8.24 percent) with an amount of Rs.15, 917,035. The fixed assets

consisting of (2.05 percent) with an amount of Rs.3, 959,697. The other assets carries (4.12

percent) with an amount of Rs.7, 946,467.

The total figure of liabilities of Rs.192, 862,975(Rs in thousands) is taken as 100 a

percent and all other liabilities are expended as a percent of total liabilities. The relation of

each liability to total liabilities is expended in the statement.

In the total liabilities deposits carries (79.94 percent) with an amount of Rs

1547,185,984. The second position occupies other liabilities and provisions(9.95 percent)

with an amount of 19,208,678. The Reserves & surplus consisting (5.24 percent) with an

amount of Rs.10, 123,824. The Borrowings occupies(4.37 percent) with an amount of

Rs.8,433,531. The share capital occupied (0.47 percent) with an amount of Rs.909, 048.

61
Common size Balance Sheet 2013:

Particulars Rs Percentage
Assets
Fixed Assets 3992146 1.56
Investment 62933196 24.6
Total fixed assets(+) Investments(A) 66925342 26.16
Current assets, loans & advances
Current assets 31847585 12.46
Advances 146495484 57.4
Total current assets(B) 178343069 69.86
Other assets 10130626 3.96
(A+B) 2.45268393 95.94
Total Assets 255399019 100
Liabilities
Current liabilities & provisions 22563851 8.83
Long term loans 22563851 8.83
Borrowings 12498052 4.89
Deposits 204980557 80.25
217478609 85.14
Share capital & 1024743 0.4
Reserves & surplus 14331834 5.61
15356577 6.01

62
Interpretation:

Common size Balance sheet-2013.

The Above statement representing the assets and liabilities for the year 31st March

2011. The Common size balance sheet statement, in which Balance sheet ratio of each Asset

to total Assets and Ratio of each liability is expressed as a ratio of Total Liabilities is called

Common size balance sheet.

The total figure of assets amounted of Rs.255,399,037(Rs in thousands) is taken as

100 percent and all other assets are expressed as a percent of total assets in the total assets,

Advances occupied highest percent of (57.3), with an amount of Rs.146,495,484. The

investment occupied the second highest percent of (24.6 percent). The current assets carries

(12.46 percent) with an amount of Rs.318.47.585 and fixed assets (1.56 percent) with an

amount of Rs.3, 992,146. The last item in the total value of assets is other assets carries (3.96

percent) with an amount of Rs.10, 130,626.

The total figure of liabilities 255,399,037 (In thousands), is taken as 100 percent and

all other liabilities are expressed as a percent of total liabilities. The relation of each liability

to total liabilities is expressed in the statement.

In the total liabilities deposited carries (80.25 percent) with an amount of Rs.204,

980,557. The second position occupies other liabilities and provisions (8.83 percent) with an

amount of Rs.22, 563,851. The Reserves & surplus occupies (5.61 percent) with an amount

of Rs.14, 331,834. The share capital consisting of (0.40 percent) with an amount of Rs.1,

024,743. The borrowings carries (4.89 percent) with an amount of Rs.12, 498,052.

63
Comparative Income statement as at 2011-2012:

2011 2012 Increase

Particulars percentage
RS RS /Decrease
Income
Interest earned 12224348 12676291 451943 3.32
Other income 1391716 2857352 1465636 10.76
13616064 15533643
Expenditure
Interest expended 7412477 8220418 807941 5.97
Operating expenses 5187905 5050173 -137732 1.01
Provisions & contingencies 925117 1373954 448837 3.32
13525499 14644545
Profit
Net profit for the year 90565 889098 798533 270
Profit(Loss) Brought
346037 12924 -333113 112.7
forward
Transfer from Investment
551037 - -551037 186.4
fluctuation Reserve
295565 902022
Appropriations
Transfer to statutory
22641 222274 199633 67.54
Reserve
Transfer to capital Reserve 260000 395747 135747 45.92
Transfer to Investment
- 30508 -30508 10.32
Reserve
Transfer to special Reserve - - - -
Proposed dividend - 59088 -509088 -20
Dividend Tax - 10042 -10042 3.39
Balance carried to Balance
12924 184363 171439 58
sheet
295565 902022

64
Interpretation:

The above statement shows comparative Income statement of ING VYSYA Bank

between 2011, 2012 years.

The Interest earned covers 3.32 percent with an increase of 451943, the other Major

head on the income side of the bank is other Income consisting 10.76 Percent with an

Increase of 146566.

The expenditure side, Major item of expenditure is interest expended nearly 5.97

percent with an increase of Rs.80.7941 operating expenses are decreased by 1.01 percent with

an amount of Rs.137732.

65
Comparative Income statement as at 2012-2013:

Increase/
2012 2013
Particulars Decrease Percentage
Rs. Rs.
Rs.
Income
Interest earned 12676291 16804391 4128100 26.5
Other income 2857352 4185660 1328308 8.55

15533643 209900551
Expenditure
Interest expended 8220418 11820478 3600060 24.58
Operating expenses 5050173 6094893 1044720 7.13
Provisions &
1373954 1505378 131424 0.89
contingencies
14644545 19420749
Profit
Net profit for the year 889098 1569302 680204 75.41
Profit /Loss brought
12924 184363 171439 19.01
forward
902022 1753665
Appropriations
Transfer to statutory
222274 392326 170052 18.85
Reserve
Transfer to capital
395747 31467 -364280 -40.38
Reserve
Transfer to Investment
30508 47715 17207 1.91
Reserve
Transfer to special
- 67000 67000 7.42
Reserve
Proposed dividend 59088 153711 94623 10.5
Dividend Tax 10042 26122 16080 1.78
Balance carried to
184363 1035324 850961 94.3
Balance sheet
902022 1753665

66
Interpretation:

The above statement shows Comparative Income statement of ING VYSYA Bank

between 2012, 2013 years.

The Interest earned covers 26.5 percent with an increase of 4128100, the other Major

Head on the income side of the bank is other Income consisting 8.55 percent with increase of

13,28,308.

The expenditure side, major item of expenditure is Interest expended nearly 24.58

percent with an increase of 3660060 operating expenses is increased by 7.13 percent with an

amount of 1044720.

67
Common size Income statement as at 2011:

Particulars Rs. Percentage

Income

Interest earned 12224348 89.78

Other income 1391716 10.22

13616064 100

Expenditure

Interest expended 7412477 54.8

Operating expenses 5187905 38.36

Provisions & contingencies 925117 6.84

13525499 100

Profit

Net profit for the year 90565

Profit (loss) Brought forward 346037

Transfer from investment fluctuation reserve 551037

295565

Appropriations

Transfer to statutory reserve 22641 7.66

Transfer to capital reserve 260000 87.98

Balance carried to balance sheet 12924 4.37

TOTAL 295565 100

68
Interpretation for the year 2011:

The above table shows the common size income statement in which all profit and loss

account items are expressed as the percent basis.

The total income for the year 2008 in the form of sales has been taken 100 per cent.

The total income includes interest earned, which carries 89.78per cent, other income

consisting of 10.22per cent.

The total of expenditure for the same period has been taken as 100per cent, consisting

of interest expended rupees 7412477, covering 54.80per cent. The next major expenditure on

the expenditure side is operating expenses carrying 38.36per cent with an amount of

5187905, the least percent of the expenditure side is provision & contingencies amounted Rs

925117 with 6.84per cent.

The percent of profit has increased/decreased from to. This is due to

increase/decreased in cost/expenditure.

69
Common size Income statement as at 2012:
Particulars Rs. Percentage

Income

Interest earned 14013768 87.82

Other income 1943180 12.18

15956948 100

Expenditure

Interest expended 8593111 57.03

Operating expenses 5070642 33.65

Provisions & contingencies 1404097 9.32

15067850 100

Profit

Net profit for the year 889098 98.57

Profit (loss) Brought forward 12925 1.43

902022 100

Appropriations

Transfer to statutory reserve 222274 24.64

Transfer to capital reserve 395747 43.88

Transfer to investment reserve 30508 3.38

Proposal dividend 59088 6.55

Dividend Tax 10042 1.11

Balance carried to balance sheet 184363 20.44

TOTAL 902022 100

70
Interpretation for the year 2012:

The above table shows the common size Income statement in which all profit and loss

accounts items are expressed as the percent basis.

The total Income for the year 2009 in the form of sales has been taken 100 percent.

The total Income includes interest earned, which carries 87.82 percent, other Income

consisting of 12.18 percents.

The total of expenditure for the same period has been as 100 percent, consisting of

interest expended rupees 8593111, covering 57.03 percent. The next major expenditure on

the expenditure side is operating expenses carrying 33.65 percent with an amount of

5070642, the least percent of the expenditure side is provisions & contingencies amounted Rs

1404097 with 9.32 percent.

The percent of profit has increased/decreased from to this due to increase /decrease in

cost/expenditure.

71
Common size Income Statement 2013:
Amount
Particulars Percentage
Rs.
Income

Interest earned 16804391 80.06

Other income 4185660 19.94

20990051 100

Expenditure

Interest expended 11820478 60.87

operating expenses 6094893 31.38

provisions & contingencies 1505378 7.75

19420749 100

Profit

Net profit for the year 1569302 89.49

Profit & Loss brought forward 184363 10.51

1753665 100

Appropriations

Transfer to statuary Reserve 39326 22.37

Transfer to capital reserve 31467 1.79

Transfer to Investment reserve 47715 2.72

Transfer to special Reserve 67000 3.82

Proposed divided 153711 8.76

Divided Tax 26122 1.49

Balance carried to balance sheet 1035324 59.05

1400665 100

72
Interpretation for the year 2013:

The above table shares the common size Income statement in which all profit and loss

Account & items are expressed as the percent basis.

The total Income for the year 2012 in the form of sales has been taken as 100 percent.

The total Income includes Interest earned, which carries 880.06 percent, other income

consisting of 19.94 percent.

The talk of expenditure for the same period has been taken as 100 percent and

consisting of interest expended Rs 11820478, covering 60.8 percent. The next major

expenditure on the expenditure side is operating expenses covering 7.75 percent with an

amount of Rs.6094898, the least percent of the expenditure side is provisions &

contingencies mounted Rs 1505378 with 7.75 percent.

The percent of profit has increased/decreased from to. This is due in increase/decrease

in cost/expenditure.

Current assets

Current ratio = .

Current liabilities

Year Current assets Current liabilities Current ratio

2010 102193731 9390905 10.8:1

2011 113548590 13042924 8.70:1

2012 135678685 19208678 7.06:1

2013 178343069 22563851 7.90:1

73
Interpretation:

It is observed from the above table that the current ratio in the 2010-2011 in ING

VYSYA bank is considered satisfactory. The current ratio of the bank in the year 2010 is

10.8:1, 2008 is 8.70:1, and 2011 is 7.06:1, 7.90:1 in the year of 2013. As a conventional rule,

a current ratio of 2012 or more is considered satisfactory.

Sales Cost of goods sold

Gross Profit= -------------------------------------------

Sales

Year Gross profit Sales Gross profit ratio

2010 319986 9208344 3.474

2011 524568 11805569 4.443

2012 889098 15533643 5.723

2013 1569302 20990051 7.476

Interpretation:

The Gross profit ratio of ING VYSYA bank is better in the year 2013, the gross

profit of the bank in the year 2013 is 7.746, whereas the same ratio is 3.474 in the year

2010, 4.443 in the year 2011 and 5.723 in the year 2012. As a conventional rule higher

the ratio, the better it is. A low ratio indicates unfavorable trend in the form of

reduction in selling price not accompanied by proportionate decrease in the cost of

goods are increase in the cost of production.

74
 Profit after tax

Net profit = ------------------------------------

Sales

Year Profit after tax Sales Net profit ratio

2010 262940 9208344 2.855

2011 478072 11805569 4.049

2012 902022 15533643 5.806

2013 1753665 20990051 8.354

Interpretation:

The Net profit ratio of ING VYSYA Bank is considered satisfactory from

2010-2013.

75
5.1 SUMMARY

The project entitled customer preference and awareness of financial services with

reference to ING VYSYA bank was categorized into five chapters. The first chapter deals

with the introduction of the study, need for the study, objectives, methodology and limitations

ING VYSYA bank and ING VYSYA life insurance are head quartered at Bangalore, while

the corporate office of ING VYSYA mutual fund is situated at Mumbai, the synergies arising

out of three distinct but complementary businesses are bound to be an asset to the group in

changing market dynamics of the future.

To conduct survey to know the customer is aware or not on the services availing by

cover financial services. The main objective is to obtain the data required for the bank

employees to understand his customers and understand the customer preference of the

product. Data is very important for all the projects. It is necessary to collect accurate and

reliable data in order to achieve the research objectives. Primary data has been collected with

the help of structured questionnaires and secondary data are there which from different

publications and also from the following departments had already available in the published

from the journals and books. In working hours the staff will be busy so that I cant able to

interact with them more time and time constraint are the main limitations of the study.

The second chapter deals with the overview of ING VYSYA Bank limited genesis

and growth and organization structure.

ING VYSYA Bank Ltd., is an entity formed with the coming together of erstwhile,

VYSYA Bank Ltd, a premier bank in the Indian Private Sector and a global financial

powerhouse, ING of Dutch origin, during Oct 2002.

The origin of the erstwhile VYSYA Bank was pretty humble. It was in the year

1930 that a team of visionaries came together to found a bank that would extend a helping

hand to those who weren't privileged enough to enjoy banking services. It's been a long

76
journey since then and the Bank has grown in size and stature to encompass every area of

present-day banking activity and has carved a distinct identity of being India's Premier

Private Sector Bank.

In 1980, the Bank completed fifty years of service to the nation and post 1985; the

Bank made rapid strides to reach the coveted position of being the number one private sector

bank. In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee

Celebrations, the then Finance Minister Prof. Madhu Dandavate, had termed the performance

of the bank 'Stupendous'. The year of 2005 was the 75th anniversary or Platinum Jubilee

year.

ING VYSYA is joint venture between ING insurance international BV a part of

ING Group, the worlds larges life insurance company (Fortune Global 500, 2002), ING

VYSYA bank, 1.5 million customers and over 400 outlets and GMR technologies and

industries limited, a part of GMR group also based in Banglore and involved in the field of

power generation, infrastructure development and several other business.

ING a major Dutch group conglomerate has acquired 44per cent stake in the VYSYA

bank ltd, a milestone in the history of Indian banking, and this tie up introduces a new set of

banking products in present and also in future. ING ranks 21 among the fortune 500

companies and commands its expertise in the areas of insurance, banking and asset

management.

The immediate benefit to ING VYSYA Bank ltd is the pride of having become a

member of global financial services giant, with an asset base of 1159 billion euros, net profit

of 7.21 billion euros as of December 31 2005. Further, the presence of the group in over 50

countries, employing over 115000 people, serving over 60 million customers across the

globe, only multiplies the credibility, not only across the country but also across the globe.

77
The Third Chapter:-

It deals with theoretical background on Financial Analysis in HBL power systems Ltd

which includes the financial statements of the company like

Comparative Balance Sheet.

Common size Balance Sheet.

Comparative Income Statement.

Common size Income Statement.

Ratio Analysis.

For the purpose of knowing the companys financial position to compare with

the last year. It included data analysis and interpretation according to the financial

statement of the company.

The fourth Chapter:-

It deals with Data and Interpretation

The Fifth Chapter:

It deals with Summary, Findings, Suggestions and Bibliography

78
5.2 FINDINGS

I have observed that the profit generated has been decreasing year after year by

the above findings.

Reserves and surplus for the year 2005-06 is 579667, for the year 2006-07 is

83429 and for the year 2007-08 is 4208010.Its well seen that there is a drastic

increase in the reserves for the Bank on year on year basis.

Return on investment for the year 2005 is 41.59, for the year 2006 is 63.41, year

2007 is 97.80 and for the year 2008 is 153.14.Its observed that there is increase by

year on year.

Deposits for the year 2005-06 is 16002306, for the year 2006-07 is 20833343 and

for the year 2007-08 is 50794663.Its found that the deposits for the bank is

increasing by year after year as illustrated above.

Its observed that the deposits, reserves and surplus have increased suddenly from

the year 2006-07 to 2007-08.

The current ratio has decreased from 10.8:1 (year 2005) to 7.90:1 (year 2008).

The gross profit has increased from 3.474 (year2005) to 7.476 (year 2008).

Debtor turn over ratio has increased 0.124(year 2005) to 0.143 (year 2008).

Net profit has increased from 2.855 (year 2005) to 8.354 (year 2008).

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5.3 SUGGESTIONS

Based on the above findings it can suggest that

The fixed expenditure of the bank should be decreased; it can be done by

decreasing the number of employees, closure of low income /loss making

generating branches e.t.c.

The deposits and income of the bank has been increased from previous year to

current year.

The Non-performing assets of the bank has to be decreased ,it helps for the

increase of income , the same can be done so by settling the borrowers with OTS

(one time settlement ) where in ,in long-term the same shows a drastic increase of

income . That is the decrease of debtors turn over ratio.

The borrowers with OTS (one time settlement) where in, in long-term the same

shows a drastic increase of income. That is the decrease of debtors turn over ratio.

The capital adequacy ratio has to be decreased, so that it increases the margin of

income from advances.

The increase of reserves of the bank indicates the decrease of income, as there is

no income from the reserves, so the reserves and the same should be used in

advances.

The return on investment is increasing; the same should be increased at a higher

pace. The same can be implemented by decreasing the fixed and other expenditure

for example advertisements, decreasing the rents of the premises.

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BIBLIOGRAPHY

Text Books Referred:

Financial Management by I.M.Pandey

Financial Management by Khan and Jain.

Financial Decision Policy by R.M.Srivastav

Financial Management by Prasanna Chandra

Investment Decision Making by John J.Hampton.

Management by Heinz weirih and Horold Knoontz.

Financial Management and Policy by James C Van Horne.

Reports and Journals Referred:

Journals of ICWAI

Journals of ICAI

Journals of ICFAI

Annual Reports of ING VYSYA Bank Ltd., from 2005 to 2008

ING VYSYA BANK JOURNALS AND MAGAZINES

WEBSITES:

www.ingVYSYAbank.com

www.answers.com

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