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INTRODUCTION

Bank is defined as an institution for the keeping, landing and exchanging etc. of money.

Economists have also defined a bank highlighting its various functions. According to

Crowther, the banker business is to take the debt of other people to offer his own in

exchange and thereby create money.” Thus a bank is an institution that accepts deposits

from the public in turn advances loans by creating credit.

It is different from other financial institutions in that they cannot create credit though they

may be accepting deposits and making advances.

TYPES OF BANKS:

Commercial banks: are those banks which perform all kinds of banking functional such

as accepting deposits, advancing loan, and recreation and agency functions. They are also

called joint stock banks as they are organized in the same manner as joint stock

companies. They usually advance short term loans to customers some of commercial

banks in India are Andhra Bank, Canara Bank, Indian Bank, PNB etc.

Exchange banks: are those banks, which deal in foreign exchange and specialize in

financing trade. They are called foreign exchange banks. In India these exchange banks

have their head offices located outside India. These banks also render other services such

as collecting and supplying information about the foreign customers providing remittance

facilities etc. such as chartered bank, Gridlays bank.

Industrial banks: are those banks, which provide medium term and long-term finance

for industries for the purchase of land, machinery, etc. They underwrite the debenture and

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shares of industries and also subscribe to them such as industrial development bank of

India, industrial finance corporation of India etc.

Agricultural banks: are those banks, which provide cr. To farmers for short term,

medium term and long term needs. In India, commercial banks, regional rural banks and

agricultural co-operative banks provide short-term loans to farmers. Such as national

bank for agriculture and rural development, NABARD.

Cooperative banks: are those financial institutions, which are organized on the principle

of cooperation. They provide short term, medium term loans to their members. In rural

area there are agriculture cooperative banks, which are also cooperative banks, which

perform the function of ordinary commercial banks but give loan to their members only.

They also get funds from the RBI. There is a state cooperative bank in every state of

India with its branches at the district level known as the central cooperative banks.

Saving banks: help promote small saving and mobilize them. They have been very

successful in Japan and Germany. In India post office act as saving bank.

Central banks: is the apex bank, in a country, which controls its monetary, and banking

structure. It is owned by the govt. of the country and operates in national interest. It

regulates and issues currency, performs banking and a agency services for the state, keeps

cash reserves of commercial banks, keeps and manages international currency, act as the

lender of the last resort, acts as the clearing house and controls of credit. The RBI is the

central bank in India.

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Banking system

The banking system is an integral sub-system of the financial system. It represents an

important channel of collecting small saving from the households and lending it to the

corporate sector. The Indian banking system has the RBI as the apex body for all matters

relating to the banking system. It is the ‘central bank’ of India. It is the bankers to all

other banks.

Functions of RBI:

1. Currency issuing authority.

2. Banker to the government.

3. Banker to other banks.

4. Framing of monetary policy.

5. Exchange control.

6. Custodian to foreign exchange and gold reserves.

7. Development activities.

8. Research and development in the banking sector.

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1.1 NAME OF THE COMPANY:

Type Private
(BSE: 500180, NYSE: HDB)

Industry Banking and Financial services

Founded August 1994

Founder(s) Deepak Parekh

Headquarters Mumbai, India

Key people Jagdish Kapoor (Chairman)


Aditya Puri (MD)

Products Investment Banking


Commercial Banking
Retail Banking
Private Banking
Asset Management
Mortgages
Credit Cards

Revenue ▲   20,266.99 crore (US$4.48 billion)

Operating income ▲   4,419.01 crore (US$976.6 million)

Profit ▲   3,032.92 crore (US$670.28 million)

Total assets ▲ US$ 39.723 billion 

Total equity ▼   21,158.15 crore (US$4.68 billion)

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Employees 51,888 (2010)

Website HDFCBank.com

TABLE 1

1.2 NATURE OF COMPANY:

HDFC Bank Ltd. is major Indian financial services company based in Mumbai,

incorporated in August 1994, after the Reserve Bank of India allowed establishing private

sector banks. The Bank was promoted by the Housing Development Finance

Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank

has 1,725 branches and over 4,232 ATMs, in 779 cities in India, and all branches of the

bank are linked on an online real-time basis.

The Bank started operations as a scheduled commercial bank in January 1995 under the

RBI's liberalization policies.

Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged

with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.

Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of

Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more

than 1,000.

HDFC is India’s premier housing finance company and enjoys an impeccable track

record in India as well as in international markets. Since its inception in 1977, the

Corporation has maintained a consistent and healthy growth in its operations to remain

the clear market leader in mortgages and banking services in India. Its outstanding loan

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portfolio covers over a million dwelling units. HDFC has developed significant expertise

in retail mortgage loans to different markets segments and also was a large corporate

HDFC Bank’s business philosophy is based on four core values: Operational Excellence,

Customer Focus, Product Leadership and People. The Bank signed a strategic business

collaboration agreement with Chase Manhattan Bank in February 1999.Plus /Cirrus and

American Express Credit / Charges cardholders. It is the only bank in India which

provides access to all the 3 major International Card Networks on its ATM network.

1.3 MISSION AND VISION:

HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team

determined to accomplish the vision of becoming a world-class Indian bank

benchmarking ourselves against international standards and best practices in terms of

product offerings, technology, service levels, risk management and build sound customer

franchises across distinct businesses so as to be a preferred provider of banking services

for target retail and wholesale customer segments and to achieve a healthy growth in

profitability, consistent with the Bank’s risk appetite.

Business strategy emphasizes the followings:

 Increase our market share in India’s expanding banking and financial services

industry by following a disciplined growth strategy and delivering high quality

customer service.

 Leverage our technology platform and open, scaleable systems to deliver more

products to more customers and to control operating cost;

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 Maintain our current high standards for asset quality through discipline credit risk

management;

 Develop innovative products and services that attract our targeted customers and

address inefficiencies in the Indian financial sector;

 Continue to develop products and services that reduce our cost of funds; and

Focus on high earnings growth with low volatility.

1.4 PRODUCTS AND SERVICES AT A GLANCE:

ACCOUNTS & LOANS INVESTMENTS &

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DEPOSITS INSURANCE

- Regular Savings Account - Personal Loans - Mutual Funds


- Savings Plus Account - Home Loans - Tax Planning
- Savings Max Account - Two Wheeler Loans - Insurance
- Senior Citizens Account - New Car Loans - Bonds
- No Frills Account - Used Car Loans - Financial Planning
- Salary Account - Overdraft against Car - Knowledge Centre
- Kid's Advantage Account - Express Loans - Equities & Derivatives
- Pension Saving Bank - Loan against Securities - Mudra Gold Bar
Account - Loan against Property - Mudra silver Bar
- Family Savings Account -Loan against Rental
- Plus Current Account Receivables
- Trade Current Account -Health care finance CARDS
- Premium Current Account -Tractor Loans
- Regular Current Account - Commercial Vehicle
- Apex Current Account Finance - Credit cards
- Max Current Account - Working Capital Finance - Debit cards
- Merchant Current - Construction Equipment - Prepaid cards
Account Finance
- Regular Fixed Deposit
-Recurring Deposits.
- Super Saver Account
- Sweep-in Account
- HDFC Bank
Imperia/Classic/Preferred
Banking

FOREX SERVICES PAYMENT SERVICES ACCESS YOUR


ACCOUNT THROUGH

- Net Safe -Net Banking


- Product & Services - Prepaid Refill -Credit card Online
- Trade services - Bill Pay -One View
- Forex service Branch - Direct Pay -Insta Alert
Locator - Visa Money Transfer -Mobile Banking
- Forex Limits - E-Monies Electronic -ATM
- Forex Plus Card Funds Transfer -Phone Banking
- RBI Guidelines - Excise & Service Tax -Email Statements
Payment

TABLE 2

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1.5 ORGANISATION STRUCTURE:

BOARD OF DIRECTORS

CHAIRMAN AND MANAGING DIRECTOR

EXECUTIVE DIRECTOR

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REGIONAL BUSINESS MANAGER

STATE MANAGER

BRANCH MANAGER

↓ ↓

SUPEVISOR AUTHORITIES SUPEVISOR AUTHORITIES

↓ ↓

PERSONAL BANKER TELLER AND RELATIONSHIP

MANAGER

TABLE 3

Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th

July 2010. Mr. Vasudev has been a Director of the Bank since October 2006. A retired

IAS officer, Mr. Vasudev has had an illustrious career in the civil services and has held

several key positions in India and overseas, including Finance Secretary, Government of

India, Executive Director, World Bank and Government nominee on the Boards of many

companies in the financial sector. The Bank’s Managing Director, Mr. Aditya Puri, has

been a professional banker for over 25 years. Before joining HDFC Bank in 1994, he was

heading Citibank’s operations in Malaysia. The Bank’s Board of Directors comprises of

eminent individuals with a wealth of experience in public policy, administration, industry

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and commercial banking. Senior executives representing HDFC are also on the Board.

Senior banking professionals with substantial experience in India and abroad, head

various businesses and functions and report to the Managing Director. Given the

professional expertise of the management team and the overall focus on recruiting and

retaining the best talent in the industry, the bank believes that its people are a significant

competitive strength.

1.6 SIZE OF THE COMPANY:

HDFC Bank is headquartered in Mumbai. The Bank of present has an enviable network

of over 241 branches spread over 129 cities all across the country. All branches are linked

on an online real time basis. Customers in 39 locations are also serviced through

Telephone Banking. The Banks expansion plans take into account the need to have a

presence in all major industrial and commercial centers where its corporate customers are

located as well as the need to build a strong retail customer base. Being a

clearing/settlement bank to various leading stock exchanges, the Bank has branches in the

centers where the NSE/BSE has a strong and active member base.

The Bank also has a network of almost over 775 networked ATMs across these cities.

Moreover, HDFC Banks ATM network can be accessed by all domestic and international

Visa/Master Card. The authorized capital of HDFC Bank is Rs. 450 crores. The paid up

capital is Rs. 281.2 crores. The HDFC Group holds 24.5% of the bank’s equity while

about 13.3% of the equity is held by the depository in respect often banks issue of

American Depository Shares (ADS/ADR Issue).

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1.7 MARKET SHARE AND POSITION

HDFC Bank Limited is a major Indian financial services company based in India.

incorporated in August 1994, after the Reserve Bank of India allowed establishing private

sector banks. The Bank was promoted by the Housing Development Finance

Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank

has 1,986 branches and over 5,471 ATMs, in 996 cities in India, and all branches of the

bank are linked on an online real-time basis. As of 30 September 2008 the bank had

total assets of Rs.1006.82 billion. For the fiscal year 2010-11, the bank has reported net

profit of  3,926.30 crore (US$875.56 million), up 33.1% from the previous fiscal. Total

annual earnings of the bank increased by 20.37% reaching at  24,263.4 crore (US$5.41

billion) in 2010-11.

The authorized capital of HDFC Bank is Rs. 450 crores. The paid up capital is Rs. 281.2

crores. The HDFC Group holds 24.5% of the bank’s equity while about 13.3% of the

equity is held by the depository in respect often banks issue of American Depository

Shares (ADS/ADR Issue). The Indian Private Equity Fund, Mauritius (IPEF) and

Indocean Financial Holdings Ltd., Mauritius (IFHL) (both funds advised by JP Morgan

Partners, formerly Chase Capital Partners) together hold about 11.6% of the banks equity.

Roughly 18% of the equity is held by FIIs, NRIs/OCBs while the balance is widely held

by about 300,000 shareholders. The shares are listed on the The Stock Exchange,

Mumbai and the National Stock Exchange. The Bank’s American Depository Shares are

listed on the New York Stock Exchange under the symbol “HDB”.

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1.8 LEADERSHIP

Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th

July 2010. Mr. Vasudev has been a Director of the Bank since October 2006. A retired

IAS officer, Mr. Vasudev has had an illustrious career in the civil services and has held

several key positions in India and overseas, including Finance Secretary, Government of

India, Executive Director, World Bank and Government nominee on the Boards of many

companies in the financial sector. The Bank’s Managing Director, Mr. Aditya Puri, has

been a professional banker for over 25 years. Before joining HDFC Bank in 1994, he was

heading Citibank’s operations in Malaysia.

S.NO NAME DESIGNATION

1) Mr. CM Vasudev Chairman

2) Mr. Aditya Puri Managing Director

3) Mr. Praveen Malhotra Marketing Sales Executive

TABLE 4
1.9 SOURCES OF DATA COLLECTION

SECONDARY DATA- it is the data which is already collected by someone else.

Researcher has to analyze the data and interprets the results. It has always been important

for the completion of any report. It provides reliable, suitable, adequate and specific

knowledge.

I took data comprise of annual reports and earlier records. Bank has provided me annual

reports from by help of which, I prepared my report. The valuable cooperation extended

by staff members contributed a lot to fulfill the requirements in the collection of data in

order to complete the project. Various statistical tools are applied depending on the

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research problem. In this study ratio analysis has been used for analyzing and interpreting

the result.

A SWOT analysis must first start with defining a desired end state or objective. A

SWOT analysis may be incorporated into the strategic planning model. Strategic

Planning has been the subject of much research.

•Strengths: characteristics of the business or team that give it an advantage over others

in the industry.

•Weaknesses: are characteristics that place the firm at a disadvantage relative to others.

•Opportunities: external chances to make greater sales or profits in the environment.

•Threats: external elements in the environment that could cause trouble for the business.

SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the

environmental Opportunities and Threats facing that firm. SWOT analysis is a widely

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used technique through which managers create a quick overview of a company’s strategic

situation. The technique is based on the assumption that an effective strategy derives

from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its

external situation (opportunities and threats). A good fit maximizes a firm’s strengths and

opportunities and minimizes its weaknesses and threats. Accurately applied, this simple

assumption has powerful implications for the design of a successful strategy.

S.W.O.T ANALYSIS OF HDFC BANK

2.1 STRENGTH AND WEAKNESS

2.1.1 STRENGTHS

1. Right strategy for the right products.

2. Superior customer service vs. competitors.

3. Great Brand Image.

4. Products have required accreditation.

5. High degree of customer satisfaction.

6. Good place to work

7. Lower response time with efficient and effective service.

8. Dedicated workforce aiming at making a long-term career in the field.

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2.1.2 WEAKNESS

1. Some gaps in range for certain sectors.

2. Customer service staffs need training.

3. Processes and systems etc.

4. Management cover insufficient.

5. Sectoral growth is constrained by low unemployment levels.

2.2 OPPORTUNITIES AND THREATS

2.2.1 OPPORTUNITIES

1. Profit margins will be good.

2. Could extend to overseas broadly.

3. New specialist applications.

4. Could seek better customer deals.

5. Fast-track career development opportunities on an industry-wide basis.

6. An applied research center to create opportunities for developing techniques to

provide value added services.

2.2.2 THREATS

1. Legislation could impact.

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2. Great risk involved

3. Very high competition prevailing in the industry.

4. Vulnerable to reactive attack by major competitors.

5. Lack of infrastructure in rural areas could constrain investment.

6. High volume/low cost market is intensely competitive.

2.3 BEST PRACTICES FOLLOWED BY THE COMPANY IN DIFFERENT

FUNCTIONAL AREAS

 Focus on the productivity of each consultant, corporate or individual, while

stressing on the quality of proposals.

 Quick roll out of Products

 Efficiency of Operations

 Meet Social & Rural sector obligations

 Integrity and Innovation

 Customer satisfaction and People Care

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2.4 THE VARIATIONS/DEVIATIONS IN PRACTISES FOLLOWED BY

THE COMPANY

During the training I realised that the knowledge we were given during the classes

or what we learnt with the help of books were not applicable in practical life, they

were purely theoretical and bookish.

 Encourage new/fresh talent-Theoretically, fresh talents should be encouraged

but being a private sector undertaking it is not easy in HDFC to appoint new

talents without considering the staff already available. The greying staff cannot be

removed. They have security till their superannuation.

 Performance based-Theoretically, the employee’s achievement, success depends

upon the performance but in HDFC, the promotion is given on the basis of the

seniority of the employees

 Hire and Fire-This phrase is used in books only. A company cannot hire and

then fire an employee. An employee can be released from his duties either by

VRS opted by himself or as a major penalty.

 Technology- Every organization is not technology based. HDFC needs

improvement in technology sector which is not being used effectively.

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Analysis of financial statement:

The financial statements namely profit and loss a/c and balance sheet, of a business firm

contains substantial and extremely useful information about its financial health. This set

of information may also be useful to the management for judging the business firm from

all perspectives such as:

•The firm should be able to pay short-term maturing obligations as well as and when

they become due.

•It should make available a satisfactory rate of return on investments made by

shareholders.

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•Above all, management should ensure that organization is profitable.

Financial Performance:

Financial performance of a company/organization means how a firm is performing in

monetary context. It shows is the position of business financially sound or not. The

objective of going in to business is to make profit. Financial results summaries the result

for a given period. Activities undertaken during such period involves many facets of co.

These include the management of sales, customer care, cost and most important

management of personnel. It is inconceivable that a co. can only have financial

performance measures.

There are numerous measures that need to be applied and that lead to achievement of the

objective i.e. the posting of a profit. This means that financial performance is a part of

performance management. The primary goal of financial reporting and analysis is to

provide information that is useful to the internal and external users of this information.

Internal users of financial information are people who control the resources of the

operation, or the decision makers. External users are people who do not directly control

the resources of the operation. These would include bankers, accountants, the Internal

Revenue Service, and possibly stockholders. A financial performance measurement

system should provide with tools and metric to understand financial situation.

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This information can be used for making better business decisions in a number of

areas including:

•Business profitability

•Pricing

•Budgeting

•Cost accounting

•Capital purchasing

•Strategic planning

•Incentive compensation etc.

Financial statement analysis is the most objective way to evaluate the financial

performance of a company. Financial analysis involves assessing the leverage,

profitability, operational efficiency and solvency for a company. Financial ratios are the

principle tool used to conduct the analysis. The challenge is to know which ratios to

choose from and how to interpret the result.

People interested in evaluation of financial performance:

•Lenders

•Banks/ Financial Institutions

•Potential Investors

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•Managers ( Internal Analysts)

Financial performance measurement by:

1. Ratio Analysis:

Most popular and commonly used financial performance measure is Ratios Analysis. It

helps in estimating financial soundness or weakness. Ratio is quantitative relationship

between two items for the purpose of comparison. The items presented in profit and loss

account and balance sheet are related to each other. This relationship can be calculated

with the help of ratios. For example, profit is related to capital invested in business and

debtors are related to credit sales. Thus ratio helps in drawing meaningful conclusions by

establishing relationship between various facts. On the basis of their interpretation,

unfavourable situations in the future can be avoided. Hence comparative and significant

conclusions cannot be drawn from financial data of different years of a business or of

different businesses unless arithmetic relationship is established among such data.

Forms of expressing ratio:

There are basically two ways of expressing ratio i.e. proportion and percentage.

Classification of ratios:

According to purpose ratios can be classified in four parts i.e.

•Liquidity ratios

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•Profitability ratios

•Activity ratios

•Capital structure ratios

1.1 Liquidity ratios:

It is also called as working capital or short term solvency ratio. Liquidity means ability of

the firm to pay its short term debts on time. Important liquidity ratios are current ratio,

quick ratio, super quick ratio.

1.2 Profitability ratios:

The main aim of all the business concerns is to earn profit. Equity shareholders of the

company are mainly interested in the profitability of the company. Profitability ratios

measure the various aspects of the profitability of the company such as-

(i) What is the rate of profit on sales.

(ii) Whether the profits are increasing or decreasing.

(iii) Whether an adequate return is being obtained on the capital employed.

Profitability ratios include gross profit ratio, net profit ratio, operating ratio, expenses

ratio, return on capital employed, return on shareholder’s fund.

1.3 Activity Ratios:

These ratios are calculated on the basis of cost of sales or sales, therefore these ratios are

also called as turnover ratios. These ratios indicate how efficiently the capital is being

used to obtain sales; how efficiently the fixed assets are being used to obtain sales etc.

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these ratios include stock turnover ratio, debtors turnover ratio, creditors turnover ratio,

fixed assets turnover ratio, working capital turnover ratio.

1.4 Capital structure ratios:

These ratios are calculated to assess the ability of the firm to meet its long term liabilities

as and when they become due. These ratios include debt equity ratio, debt to total fund

ratio, proprietary ratio, capital gearing ratio, interest coverage ratio.

Usefulness of ratio analysis:

•Useful in analysis of financial statement.

•Useful in judging operating efficiency of business.

•Useful for forecasting purposes.

•Useful in locating the weak spots of business.

•Useful in comparison of performance.

•Benefit to other parties interested in business.

•Helps in determining trends etc.

Analysis of Financial Reports of the Company

1. Analysis of the Balance Sheet of the company

The Following conclusions can be drawn from the Balance Sheet:

1. Shareholder’s Funds

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Shareholder funds is all the money belonging to common stock shareholders which

includes the balance of share capital, all profits retained and money classified as reserves

( e.g from revaluation increase of assets). It can be positive and negative (resulting from

continuous losses incurred by a corporation.) It has increased from 1,846,605,159 to

2,324,554,402

2. Investments

Investment is putting money into something with the expectation of gain that upon

thorough analysis, has a high degree of security of principle, as well as security of return,

within an expected period of time.  It has decreased from 724,558,371 to 371,464,385 .

3. Loans

Loans has increased from 177,506,396 to 180,964,971 this shows that the company is

expanding, which is good for policy holders, shareholders and the members of the

company.

4. Fixed Assets

Fixed Assets has decreased from 51268897 to 48229933.

5. Current Assets

Current Assets has increased from 1,061,423,350 to 1,894,520,238.

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6. Current Liabilities

Current Assets has increased from 165,763,129 to 215,407,017.

2. Analysis of the Trading, Profit & Loss Statements

Conclusions drawn from Trading, Profit and Loss A/c

1. Profit before tax has increased from 974,117,109 to 1,138,456,226.

2. Proposed final Dividend has been increased from 200,000,000 to 240,000,000. This

shows company shareholders will be more satisfied, also the prospective buyers will get

more interested.

3. Transfer to General Reserve has been increased from 69,000,000 to 800,000,000.

This shows company has retained a part of income as Retained Earnings for future

purposes.

3. Analysis of Cash Flow Statement of the Company

Conclusions drawn from Cash flow Statement:

1. Net cash generated from Operating Activities has decreased from 756,790,388 to

664,230,179.

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2. Net cash generated from financing activities has been decreased from 196551600 to

23399000.

3. Net cash from investing activities has increased from 42626300 to 45295227.

RATIO ANALYSIS:

LIQUIDITY RATIO:

1. Current Ratio:

Current Ratio = Current Assets/Current Liabilities

Current Assets include Cash in hand, Cash at Bank, Sundry Debtors, Bills Receivable,

Stock of Goods, Short-term Investments, Prepaid Expenses, Accrued Incomes etc.

Current Liabilities include Sundry Creditors, Bills Payable, Bank Overdraft, Outstanding

Expenses etc. Current ratio shows the short-term financial position of the business. This

ratio measures the ability of the business to pay its current liabilities. The ideal current

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ratio is supposed to be 2:1 i.e. current assets must be twice the current liabilities. In case,

this ratio is less than 2:1, the short-term financial position is not supposed to be very

sound and in case, it is more than 2:1, it indicates idleness of working capital.

CURRENT RATIO MAR’09-10 2442803185/548282947 4.455:1

MAR08-’09 1506986533/445563183 3.382:1

TABLE 5

3
MAR’08-09
2 MAR’09-10
1

0
year

FIGURE 1

Since Ideal Current Ratio is 2:1, Current Ratio has been improved from 2009, i.e.

from 3.382:1 to 4.455:1

SOLVENCY RATIOS:

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2 .Debt-Equity Ratio

Debt-Equity Ratio= Debts (long term loans)/Equity(share’s fund)

Debts: Debentures, mortgage loans, bank loans, public deposits, bonds

Equity: Equity share capital, preference share capital, reserves and surplus, securities

premium, general reserve.

DEBT-EQUITY RATIO MAR’09-10 180964971/2324554402 0.077:1

MAR08-’09 177506396/1846605159 0.096:1

TABLE 6

0.1

0.08

0.06
MAR’08-09
0.04
MAR’09-10
0.02

0
year

FIGURE 2

The Debt/Equity ratio is certainly far from perfect. A high ratio of 0.077 in 2010

means that the company is exposing itself to a large amount of equity. This is

certainly better than a high ratio or more since this would expose the company to risk

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such as interest rate increases and creditor nervousness. One way to improve their

situation would be to issue more debt and use the cash to buy-back some of its

outstanding shares.

3 .Total Assets to Debt Ratio

Total Assets to Debt ratio=Total Assets/Debts

Total assets: Current assets, fixed assets, Investments

Debts: Debentures, mortgage loans, bank loans, public deposits, bonds

TOTAL MAR’09-10 2442803185+371464355+48229933/180964971 1.581:1

ASSETS TO MAR’08-09 1506986533+724558371+51268897/177506396 1.286:1

DEBT RATIO

TABLE 7

1.5

1 MAR’08-09
MAR’09-10
0.5

0
year

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FIGURE 3

The objective of this ratio is to measure the safety margin available to providers of long

term debts. A higher the ratio represents higher security to lenders. On the other hand, a

low ratio represents risky financial position. Since the ratio has increased from 1.286 to

1.581 this shows a high security to its lenders.

4. Proprietary Ratio

Proprietary Ratio=Shareholders funds/Total Assets

Shareholder's funds include equity share capital plus all reserves and surpluses items.

Total assets include all assets, including Goodwill.

PROPRIETARY RATIO MAR’09-10 2324554402/2862497473 0.812:1

MAR’08-09 1846605159/2282813801 0.808:1

TABLE 8

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0.812
0.811
0.81
0.809 MAR’08-09
0.808 MAR’09-10
0.807
0.806
year

FIGURE 4

Since the ratio or the share of shareholders in the total capital of the company is higher

than 2009 i.e. it has increased from 0.808 to 0.812 in 2010. This shows a better long-term

solvency position of the company. This ratio throws light on the general financial

strength of the company. It is also regarded as a test of the soundness of the capital

structure. Higher the ratio or the share of shareholders in the total capital of the company

better is the long-term solvency position of the company. A low proprietary ratio will

include greater risk to the creditors.

PROFITABILITY RATIOS:

5. Return on Investment

The prime objective of making investments in any business is to obtain satisfactory return

on capital invested. Hence, the return on capital employed is used as a measure of success

of a business in realizing this objective. Return on Investment establishes the relationship

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between the profit and the capital employed. It indicates the percentage of return on

capital employed in the business and it can be used to show the overall profitability and

efficiency of the business.

ROI: Profit before interest, tax and dividend / capital employed X 100

Capital employed = Fixed assets + Investments + Working capital

RETURN ON MAR’09-10 1138456226/2314214526 46.98%

INVESTMENT X 100

MAR’08-09 974117109/1837250618 53.02%

X 100

TABLE 9

MAR’08-09
MAR’09-10

RETURN ON INVESTMENT

FIGURE 5

33
Return on Investment is considered to be the best measure of profitability in order to

assess the overall performance of the business. It indicates how well the management has

used the investment made by owners and creditors into the business. It is commonly used

as a basis for various managerial decisions.

As the primary objective of business is to earn profit, higher the return on capital

employed, the more efficient the firm is in using its funds. HDFC is not working

efficiently as the ROI has decreased from 53.02 to 49.19.

6. Earning Per Share (EPS)

Earnings per share (EPS) Ratio = (Net profit after tax − Preference dividend) / No. of

equity share

758737243-

EARNING PER SHARE 5467446/5000000


MAR’09-10 150.65

MAR’08-09 689491328- 125.07

64093298/5000000

TABLE 10

34
200

150

100 MAR’08-09
MAR’09-10
50

0
year

FIGURE 6

The earnings per share is a good measure of profitability and when compared with EPS

of similar companies, it gives a view of the comparative earnings or earnings power of

the firm. EPS ratio calculated for a number of years indicates whether or not the earning

power of the company has increased.

4.1 WORKING ENVIRONMENT

 Company has a well motivated staff as every employee is engaged in performing

their own work.

 Work environment is very professional but also very friendly.

 To groom the right candidates early responsibility is given which enables

independent decision-making, thus helping the individual to reach his/her

potential. 

 Appropriate time for break is given so that with lunch some rest can also be taken

by the employees.

35
 There is strict discipline regarding working hours in the company which reaps

employee turnover.

 Good working conditions are provided to the employees so that employee can

perform their task efficiently.

 If any employee has any doubt or clarification it can be easily resolved by

consulting it with immediate superior. This makes an employee perform the tasks

in the manner as required by the company.

4.2 PERSONAL EXPERIENCE

 With this summer training lot information in the field of Banking is now known to

me.

 Much information about housing finance companies is also known to me.

 During my summer training I have observed that hard work & zeal to work is

very much needed to be on the top in a as there is very high competition in this

field.

 Good market interaction is needed to capture the market share.

36
 I observed that customer satisfaction should be the prime concern of the

organization.

 New and improved technologies and marketing strategies should be adopted by

the company in order to sustain and grow in the ever growing competitive market.

 With this summer training lot of information in the field of Marketing and

different production techniques are now known to me.

 This company is utilizing the talents of its employees in a very efficient manner as

every person has been assigned different tasks to perform. This makes the work of

the company in a very efficient way.

 Working time in the company is strictly followed with which employees are also

satisfied.

4.3 DIFFICULTIES FACED

 The employees of the organization were preoccupied with their routine work

hence I had to ask them repeatedly for my queries.

 As it was my first ever experience in any of the organization so it was difficult for

me to adapt the working conditions prevailing there.

 There was no training module in the organization for the new trainees like us

which could have helped us in easy and early learning.

 First of all working in a professional environment was difficult to adapt to.

37
 Working under the Marketing field was difficult as the pressure to perform was

high.

 There was a lack of time to expose, learn and analyze the environment fully as

well as to complete the project.

4.4 SUGGESTIONS/RECOMMENDATIONS

Students should be sent for summer training in companies because of the following

reasons:-

 I got a good exposure about what really the corporate life is about.

 To ensure a higher level of practical application of theory taught at graduate level.

 It helps in gaining knowledge about the organization and its working conditions a

helps and policies.

 It helps in dealing with both the clients and the employees of the organization.

 Training helps in improving the morale of the trainee.

38
 Training helps in creating a better corporate image.

 Training leads to improved and more positive attitudes towards company.

 Helps individual in ensuring focus on customer with emphasis on customer-

service attitude and behavior throughout the organization.

 Capacity to deal with routine and abstract work process in the organization.

CONCLUSION

The leadership process involves in influencing the individual and group behavior toward

achievement of HDFC bank goals. It is concerned with traits, philosophy and behavior of

the leaders the leader, the characteristics of subordinates and the superior.

It is obvious that HRD is a major component of the broad managerial function and has

roots and branches extending throughout and beyond HDFC bank. It is a major sub-

system of organizations which are inter-related and inter-dependent. Every personnel

manager’s responsibilities include planning for people, organizing people, staffing with

39
people, directing people, gaining the commitment, internet and effect of people and

applying controls to people.

Internal sources are the most obvious sources. These include personnel already on the

pay-roll of HDFC Bank i.e. its present working force whenever any vacancy occurs.

Somebody from within the organization is upgraded, transferred promoted or sometimes

demoted. This source also include personnel who were once on the pay-roll of the

company but who plan to change in the quality of production, fluctuations in work

requirements, and changes in the organizational structure, the introduction of new lines or

reduction in the workforce due to a shortage or a surplus in same section so that lay offs

may be avoided, fillings in off the vacancies which may occur because of separations or

because of the need for suitable adjustments in business operations such transfers are

known as production transfers, flexibility transfers or organizational transfers. The

purpose of such transfers is the stabilize employment in an organizations. They are

generally controlled centrally through and by the personnel department.

It was found out during the study that the following causes hampered the growth of the

banking sector. These causes need to be addressed properly as that the remedial measures

adopted prone effective and actually succeed in improving the functioning of these banks.

Unrealistic assumptions have been behind plans and projections made in respect of

critical aspects of the bank’s operations such as seduction of NPAs, recovery, creation of

fresh NPAs, generation of non-interest income, etc. under most of these heads the

performance of the banks has been wide off the projections made.

Inspite of their weak bank image, these banks are able to garner deposits obviously

because of government ownership, deposit insurance and the public perception that

40
government support would always be available. Investments are replacing advances,

particularly remunerative advances and income from non-fund based business is not

growing or is growing very marginally. The capability of these banks to do full range

banking already has been happenings. It is obvious that HRD is a major component of the

broad managerial.

REFERENCES/BIBLIOGRAPHY

 ‘Banking : The Network is the bank’, by Yogesh Sharma, Dataquest, January 31,

2006

 ‘Race will end in survival of the fittest’, The Financial Express, November 29,

2006.

 The Times of India, 26 July, 2007.

 ‘The future is in e-banking’ by Mr. K.V. Kamath (Managing Director, ICICI),

April 14, 2002, Business Line.

41
 ‘RBI road map for banking’, The Indian Express, July 21, 2007.

 Banking in India, by Dr A. K. Mishra (Professor & Chairman of Finance Group at

IIM Lucknow).

 www.hdfcbank.com

 www.hdfc.com

 https://netbanking.hdfcbank.com

 www.moneycontrol.com

APPENDICES

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43
44
45

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