f.a icici & pnb
TRANSCRIPT
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A STUDY OFCOMPARATIVE FINANCIAL STATEMENT & COMPARATIVE
ACCOUNTING POLICIES FOR 2011-2012 OF ICICI & PNB BANK
A PROJECT REPORT
Submitted to
University of Mumbai
In partial fulfillment of the requirement
For
M.Com. (Accountancy) Semester I
In the Subject
Advance Financial Accounting
By
ROHAN R. KAWALE
12- 7230
K. V. PENDHARKAR COLLEGE
NEAR VIJAY SALES, DOMBIVLI (E) 421 203
DIST. THANE
SEPTEMBER 2012
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DECLARATION
I Rohan Kawale, the student of M.com (Accountancy) Semester-I, (2012) Roll No.7230,
K.V.Pendharkar College, Dombivli, Affiliated to university of Mumbai, hereby declare that I
have completed the project on the topic A STUDY OF COMPARATIVE FINANCIAL
STATEMENT & COMPARATIVE ACCOUNTING POLICIES FOR 2011-2012 OF ICICI
& PNB BANK submitted by me to university of Mumbai for M.com Semester-I examination in
the subject Advance Financial Accounting is based on actual work carried by me.
I further state that this work is original and not submitted anywhere else for any examination.
PLACE: DOMBIVLI
DATE: 5-10-2012
Signature of the Student:
Name: ROHAN KAWALE
Roll No: 12- 7230
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ACKNOWLEDGEMENT
At the beginning I would like to thank god for his blessings. I am very much thankful to my
Teacher Professor and Coordinator Professor Limey for their guidance, support and
encouragement. I also take this opportunity to show my sincere gratitude to my parents. Finally I
would express my gratitude to all those who helped me directly and indirectly in completing this
project.
PLACE: DOMBIVLI
DATE: 5-10-2012
Name: ROHAN KAWALE
Roll No: 12- 7230
M.Com (Accountancy) Semester-I
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Chapter
No.
Topic Page No.
Certificate of the Institution 1
Declaration 2
Acknowledgement 3
Executive Summary 5
1 Introduction Of Bank 5-8
2 Objective of the study of ICICI bank 9-27
3 Accounting Policies 28-36
4 Objective of the Study of PNB bank 37-48
5 Advantages & Limitations 49-50
6 Conclusion 51
Bibliography and Webliography 52
http://www.google.co.in/url?sa=t&rct=j&q=bibliography+%26+webliography&source=web&cd=1&cad=rja&ved=0CCIQFjAA&url=http%3A%2F%2Fca3rsproject.org%2Fpdfs%2FResourceBibliography-Webliography.pdf&ei=cxmJUNC1OobJrQfv64GACA&usg=AFQjCNE0IAccN2-nyYUilzoGWoOGN3FGAAhttp://www.google.co.in/url?sa=t&rct=j&q=bibliography+%26+webliography&source=web&cd=1&cad=rja&ved=0CCIQFjAA&url=http%3A%2F%2Fca3rsproject.org%2Fpdfs%2FResourceBibliography-Webliography.pdf&ei=cxmJUNC1OobJrQfv64GACA&usg=AFQjCNE0IAccN2-nyYUilzoGWoOGN3FGAA -
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EXECUTIVE SUMMARY
In any organization, the two important financial statements are the Balance sheet &
Profit and loss account of the business. Balance sheet is a statement of the financial
position of an enterprise at a particular point of time. Profit and loss account shows
the net profit or net loss of a company for a specified period of time. When these
statements of the last few year of any organization are studied and analyzed
significant conclusions may be arrived regarding the changes in the financial
position, the important policies followed and trends in profit and loss etc. Analysisand interpretation of the financial statement has now become an important
technique of credit appraisal. The investors, financial experts, management
executives and the bankers all analyze these statements. Though the basic
technique of appraisal remains the same in all the cases
butthe approach and the emphasis in analysis vary. A banker interprets thefinancial
statement so as to evaluate the financial soundness and stability, the liquidity
position and the profitability or the earning capacity of
borrowingconcern. Analysis of financial statement is necessary because it help ind
epicting the financial position on the basis of past and current records.
Analysis of financial statement helps in making the future decision andstrategies.
Therefore, it is very necessary for every organization whether it is a financial or
manufacturing etc. to make financial statement and to analyze it.
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CHAPTER: 1
INTRODUCTION OF BANK
The term bank comes from the French word Banco which means a bench. In theearlier days, European money- lenders or money changers used to display coins of
different countries in big heaps on benches or tables, for the purpose of lending or
exchanging. A bank is a financial institution which deals with deposits and
advances and other related services. It receives money from those who want to
save in the form of deposits and it lends money to those who need it. Oxford
Dictionary defines a bank as an establishment for custody of money, which it pays
out on customer s order.
Meaning
Bank is a lawful organization, which accepts deposits that can be withdrawn on
demand. It also lends money to individuals and business houses that need it. Banks
also render many other useful serviceslike collection of bills, payment of foreign
bills, safe-keeping of Jewellery and other valuable items, certifying the credit-
worthiness of business, and so on. Banks accept deposits from the general public as
well as from the business community. Any one who saves money for future can
deposit his savings in a bank. Businessmen have income from sales out of which
they have to make payment for expenses. They can keep their earnings from sales
safely deposited in banks to meet their expenses from time to time. Banks give two
assurances to the depositors
a) Safety of deposit, and
b) Withdrawal of deposit
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Role of Banking
Banks provide funds for business as well as personal needs of individuals. They
play a significant role in the economy of a nation. Let us know about the role of
banking.
It encourages savings habit amongst people and thereby makes funds available
for productive use.
It acts as an intermediary between people having surplus money and those
requiring money for various business activities.
It facilitates business transactions through receipts and payments by cheques
instead of currency.
It provides loans and advances to businessmen for short term and long-term
purposes.
It also facilitates import export transactions.
It helps in national development by providing credit to farmers, small -scale
industries and self-employed people as well as to large business houses which lead
to balanced economic development in the country.
It helps in raising the standard of living of people in general by providing loans
for purchase of consumer durable goods, houses, automobiles, etc.
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Functions of Commercial Bank
(A) Primary functions; and
(B) Secondary functions.
The following types of deposits are usually received by banks
i) Current deposit
ii) Saving deposit
iii) Fixed deposit
iv) Recurring deposit
v) Miscellaneous deposits
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CHAPTER : 2
OBJECTIVE OF THE STUDY OF ICICI BANK
The main objectives of this project are the following:
To study about ICICI BANK and its related aspects like itsproducts & services, history, organizational structure, subsidiary companies
etc.
To analyze the financial statement i.e. P&L account and Balance sheet ofICICI BANK.
To learn about Cash Flow, Capital Structure. To understanding the meaning and need of Balance Sheet and profit and loss
account.
The purpose is to portray the financial position of ICICI BANK with thehelp of Balance sheet and profit and loss account.
To evaluate the financial soundness, stability and liquidity of ICICI BANK.
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INTRODUCTION OF ICICI BANK
ICICI Bank is the largest private sector bank in India in terms of market
capitalization. It is also the second largest bank in India in terms of assets with a
total asset of Rs. 3,674.19 billion (US$ 77 billion) as on June 30,2009, the total
profit after tax has been Rs. 8.78 billion. Formerly known as Industrial Credit and
Investment Corporation of India, ICICI Bank has an extensive network of 1,544
branches with about 4,816 ATMS located across India and in 18 other countries.
ICICI Bank serves about 24 Million customers throughout the world. It is
considered as one of the Big Four Banks in India along with State Bank of India,
HDFC Bank and Axis Bank. ICICI Bank provides a wide range of banking
products and financial services to its retail and corporate customers. It has a widevariety of delivery channels and specialized affiliates and subsidiaries that ensure
the flow of its offerings in the areas like investment banking, venture capital, life
and non-life insurance and asset management. This bank is also Indias largest
credit card issuer. The equity share of ICICI Bank is listed on various stock
exchanges like NSE, BSE, Calcutta Stock Exchange and Vadodara Stock
Exchange etc. Its ADRs are also listed on the New York Stock Exchange.
ICICI Bank also has the largest international balance sheet among all the banks in
India. It is also expanding its business in the overseas market at an enviable pace.
In Q2 September 2008, ICICI Bank recorded a 1.15% growth in net profit over Q2
September 2007 to reach at Rs 1,014.21crores. The current and savings account
(CASA) ratio of bank also went up from 25% in2007 to 30% in 2008.
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HISTORY OF ICICI BANK
ICICI Bank was originally promoted in 1994 by ICICI Limited an Indian
financial institution, and was its wholly owned subsidiary. ICICI's shareholding in
ICICI Bank was reduced to 46% through a public offering of shares in Indiain
fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal
2000, ICICI Bank's acquisition of Bank of Madura Limited in an all
stock amalgamation in fiscal 2001, and secondary market sales by ICICI toinstituti
onal investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955at the
initiative of the World Bank, the Government of India and
representativesof Indian industry. The principal objective was to create a developm
entfinancial institution for providing medium-term and long-term projectfinancingto Indian businesses. In the 1990s, ICICI transformed its business from ad
evelopment financial institution offering only project finance to a diversified
financial services group offering a wide variety of products and services, both
directly and through a number of subsidiaries and affiliates like ICICI Bank.
In1999, ICICI become the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE. After consideration of
various corporate structuring alternatives in the context of the emerging
competitive scenario in the Indian banking industry, and the move towardsuniversal banking, the managements of ICICI and ICICI Bank formed the view
that the merger of ICICI with ICICI Bank would be the
optimalstrategic alternative for both entities, and would create the optimal legalstru
cture for the ICICI group's universal banking strategy. The merger would enhance
value for ICICI shareholders through the merged entity's access to low-cost
deposits, greater opportunities for earning fee-based income and the ability to
participate in the payments system and provide transaction-banking services. The
merger would enhance value for ICICI Bank shareholders through a large capitalbase and scale of operations, seamless access to ICICI's strong corporate
relationships built up over five decades, entry into new business
segments,higher market share in various business segments, particularly fee-based
services, and access to the vast talent pool of ICICI and its subsidiaries. In 10
October 2001, the Boards of Directors of ICICI and ICICI Bank approved the
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merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with
ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank
in January 2002, by the High Cist of Gujarat at Ahmadabad in March2002, and by
the High Cist of Judicature at Mumbai and the Reserve Bank of India in April2002. Consequent to the merger, the ICICI group's financing and banking
operations, both wholesale and retail, have been integrated in a single entity. ICICI
Bank has formulated a Code of Business Conduct and Ethics for its directors and
employees.
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COMPANY PROFILE OF ICICI BANK
ICICI Bank is Indias second-largest bank with total assets of 3,997.95 billion(US$
100 billion) at March 31, 2008 and profit after tax of Rs. 41.58 billion for they ear
ended March 31, 2008 ICICI Bank is the most valuable bank in India in terms of
market capitalization and is ranked second amongst all the companies listed on the
Indian stock exchanges.
In terms of free float market capitalization. The Bank has a network of about
1308Branches and 3,950 ATMs in India and presence in 18 countries. ICICI Bank
offers a wide range of banking products and financial services to corporate and
retail customer through a variety of delivery channels and through its specialized
subsidiaries and affiliates in the are as of investment banking, life and non-life
insurance, venture capital and asset management. The Bank currently has
subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore,
UnitedStates, United Arab Emirates, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia. UK subsidiary has established a branch in Belgium.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange(BSE)
and the National Stock Exchange (NSE) of India Limited and its American
Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
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STUDY OF PROFIT& LOSS A/C
MEANING
It is a financial statement, which shows net loss of a company for a specified
period. The accounting year means calendar year of 12months or less ormore than 12 months.
CONTENTS
This presents the revenues and expenses of a company and shows the excess
of revenues over expenses for profit and vice versa for a loss.
FORMAT
The Companies act does not provide any specific format for this account.However it is required to be prepared on the basis of the instructions given
in part ii of schedule (vi) of the companies act.
MAIN ITEMS OF PROFIT AND LOSS ACCOUNT
Turnover or sales:
The aggregate amount of sales and connected items with the sales such as
commission paid to sole-selling agents and other selling agents and
brokerage and discounts on sales other than usual trade discount.
Depreciation:
The amount of depreciation of fixed assets and the arrears of depreciation as
per section 205(2) shall be disclosed by way of foot-note.
Interest on loans and debentures:
Interest on loans and debentures has to be stated separately. It will include
the amount of interest paid as well as outstanding.
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Miscellaneous expenses:
In this head items such as rates and taxes, insurance premium etc., must be
stated separately.
Preliminary expenses:Such expenses include the costs of formation of a company and since their
amount is usually large, it is not desirable to write off them in one year.
Provision for taxation:
The profit and loss account of a company must be debited with the estimated
liabilities for tax on the current profits at current rates of taxation.
Unclaimed dividends:It is shown on the liabilities side of the balance sheet under the heading
current liabilities.
Interim dividends:
It is an item of appropriation. It is transferred to the debit side of the Profit
and loss appropriation account.
Final dividend as an item of the trial balance:
This is shown in the debit side of the appropriation section of the profit and
loss account.
Proposed dividend or final dividend proposed:
Since it is an adjustment item, it has to be shown at two places- In the debit
side of the profit and loss appropriation account and on the liabilities side of
the balance sheet under the head current liabilities and provisions
Dividend on interest income:
This item is transferred to the credit side of the profit and loss account.
Payment to auditors:
It must be stated separately.
This will include consultancy fee, auditing fees management services etc.
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Profit & Loss account of ICICI Bank ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar
12 mths 12 mths 12 mths 12 mths 12 m
IncomeInterest Earned 33,542.65 25,974.05 25,706.93 31,092.55 30,7
Other Income 7,908.10 7,108.91 7,292.43 8,117.76 8,87
Total Income 41,450.75 33,082.96 32,999.36 39,210.31 39,6
Expenditure
Interest expended 22,808.50 16,957.15 17,592.57 22,725.93 23,4
Employee Cost 3,515.28 2,816.93 1,925.79 1,971.70 2,07
Selling and Admin Expenses 2,888.22 3,785.13 6,056.48 5,977.72 5,83
Depreciation 524.53 562.44 619.50 678.60 578.
Miscellaneous Expenses 5,248.97 3,809.93 2,780.03 4,098.22 3,53Preoperative Exp Capitalized 0.00 0.00 0.00 0.00 0.00
Operating Expenses 8,843.63 8,594.16 10,221.99 10,795.14 10,8
Provisions & Contingencies 3,333.37 2,380.27 1,159.81 1,931.10 1,17
Total Expenses 34,985.50 27,931.58 28,974.37 35,452.17 35,5
Mar '12 Mar '11 Mar '10 Mar '09 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Net Profit for the Year 6,465.26 5,151.38 4,024.98 3,758.13 4,15
Extraordinary Items -0.43 -2.17 -0.09 -0.58 0.00
Profit brought forward 5,018.18 3,464.38 2,809.65 2,436.32 998.
Total 11,483.01 8,613.59 6,834.54 6,193.87 5,15
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 1,902.04 1,612.58 1,337.86 1,224.58 1,22
Corporate Dividend Tax 220.35 202.28 164.04 151.21 149.
Per share data (annualized)
Earning Per Share (Rs) 56.09 44.73 36.10 33.76 37.3
Equity Dividend (%) 165.00 140.00 120.00 110.00 110.
Book Value (Rs) 524.01 478.31 463.01 444.94 417.
Appropriations
Transfer to Statutory Reserves 2,306.07 1,780.29 1,867.22 2,008.42 1,34
Transfer to Other Reserves 0.32 0.26 1.04 0.01 0.01
Proposed Dividend/Transfer to Govt 2,122.39 1,814.86 1,501.90 1,375.79 1,37
Balance c/f to Balance Sheet 7,054.23 5,018.18 3,464.38 2,809.65 2,43
Total 11,483.01 8,613.59 6,834.54 6,193.87 5,15
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STUDY OF BALANCE SHEET
MEANINGThe balance sheet is a financial snapshot of a company's condition at a
single point in time. A balance sheet contains a listing of the
company's asset, liability and Capital accounts. When someone, whether a
creditor or investor, asks you how your company is doing, you'll want to
have the answer ready and documented . The way to show off the success of
your company is a balance sheet. A balance sheet is a documented report of
your company's assets and obligations, as well
as the residual ownership claims against your equity at any given point in
time. It is a cumulative record that reflects the result of all recorded
accounting transactions since your enterprise was formed.
You need a balance sheet to specifically know what your company's net
worth is on any given date. With a properly prepared balance sheet, you can
look at a balance sheet at the end of each accounting period and know if
your business has more or less value, if your debts are higher or lower, and if
your working capital is higher or lower. By analyzing your balance sheet,
investors, creditors and others can assess your ability to meet short-term
obligations and solvency, as well as your ability to pay all current and long-term debts as they come due. The balance sheet also shows the composition
of assets and liabilities, the relative proportions of debt and equity financing
and the amount of earnings that you have had to retain. Collectively,
external parties to help assess your companys financial status.
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MAIN ITEMS OF ASSETS
Current assets:
Current assets include cash and other assets that in the normal course ofevents are converted into cash within the operating cycle. For example, a
manufacturing enterprise will use cash to acquire inventories of materials.
These inventories of materials are converted into finished products and then
sold to customers. Cash is collected from the customers. This circle from
cash back to cash is called an operating cycle. In a merchandising business
one part of the cycle is eliminated. Materials are not purchased for
conversion into finished products. Instead, the finished products are
purchased and are sold directly to the customers. It is conceivable thatalmost all of the assets that are used to conduct our business, such as
buildings, machinery, and equipment, can be converted into cash within the
time required to complete an operating cycle. However, your current assets
are only those that will be converted into cash within the normal course of
your business. The other assets are only held because they provide useful
services and are excluded from the current asset classification. If you happen
to hold these assets in the regular course of business, you can include them
in the inventory under the classification of current assets. Current assets areusually listed in the order of their liquidity and frequently consist
of cash, temporary investments, accounts receivable, inventories and prepaid
expenses.
Cash :
Cash is simply the money on hand and/or on deposit that is available for
general business purposes. It is always listed first on a balance sheet. Cash
held for some designated purpose, such as the cash held in a fund for
eventual retirement of a bond issue, is excluded from current assets.
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Marketable Securities:
These investments are temporary and are made from excess funds that you
do not immediately need to conduct operations. Until you need these funds,
they are invested to earn a return.
Accounts Receivable:
Simply stated, accounts receivables are theamounts owed to you and are evi
denced on your balance sheet by promissory notes. Accounts receivable are
the amounts billed to your customers and owed to you on the balance sheet's
date. You should label all other accounts receivable appropriately and show
them apart from the accounts receivable arising in the course of trade. If
these other amounts are currently collectible, they may be classified as
current assets.
Inventories:
Your inventories are your goods that are available for sale, products that you
have in a partial stage of completion, and the materials that you will use
to create your products.
The costs of purchasing merchandise and materials and the costs of
manufacturing your various product lines are accumulated in the accounting
records and are identified with either the cost of the goods sold during the
fiscal period or as the cost of the inventories remaining.
Prepaid expenses:
These expenses are payments made for services that will be received in the
near future. Strictly speaking, your prepaidexpenses will not be converted to
current assets in order to avoid penalizing companies that choose to pay
current operating costs in advance rather than to hold cash. Often your
insurance premiums or rentals are paid in advance.
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Investments:
Investments are cash funds or securities that you hold for a designated
purpose for an indefinite period of time. Investments include stocks or the
bonds you may hold for another company, real estate or mortgages that you
are holding for income-producing purposes. Your investments also includemoney that you may be holding for a pension fund.
Plant Assets:
Often classified as fixed assets, or as plant and equipment, your plant assets
include land, buildings, machinery, and equipment that are to be used in
business operations over a relatively long period of time. It is not expected
that you will sell these assets and convert them into cash. Plant assets simply
produce income indirectly through their use in operations.
Intangible Assets:
Your other fixed assets that lack physical substance are referred to as
intangible assets and consist of valuable rights, privileges or advantages.
Although your intangibles lack physical substance, they still hold value for
your company. Sometimes the rights, privileges and advantages of your
business are worth more than all other assets combined.
Other Assets:
During the course of preparing your balance sheet you will notice other
assets that cannot be classified as current assets, investments, plant assets, or
intangible assets. These assets are listed on your balance sheet as
other assets.
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MAIN ITEMS OF LIABILITIES
Current Liabilities:
On the equity side of the balance sheet, as on the asset side, you need
to make a distinction between current and long-term items.Your current liabilities are obligations that you will discharge within the nor
maloperating cycle of your business. In most circumstances your current
liabilities will be paid within the next year by using the assets you classified
ascurrent.The amount you owe under current liabilities often arises as a resul
t of acquiring current assets such as inventory or services that will be used in
current operations. You show the amounts owed to trade creditors that arise
from the purchase of materials or merchandise as accounts payable. If you
are obligated under promissory notes that support bank loans or otheramounts owed, your liability is shown as notes payable. Other current
liabilities may include the estimated amount payable for income taxes and
the various amounts owed for wages and salaries of employees, utility bills,
payroll taxes, local property taxes and other services.
Long-Term Liabilities:
Your debts that are not due until more than a year from the balance sheet
date are generally classified as long-term liabilities. Notes, bonds and
mortgages are often listed under this heading. If a portion of your long-term
debt is due within the next year, it should be removed from the long-term
debt classification and shown under current liabilities.
Deferred Revenues:
Your customers may make advance payments for merchandise or services.
The obligation to the customer will, as a general rule, be settled by delivery
of the products or services and not by cash payment.
Advance collections received from customers are classified as deferredreven
ues, pending delivery of the products or services.
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Owner's Equity:
Your owner's equity must be subdivided on your balance sheet: One portion
represents the amount invested directly by you, plus any portion of retained
earnings converted into paid-in capital. The other portioned presents your
net earnings that are retained. This rigid distinction is necessary because ofthe nature of any corporation. Ordinarily, stockholders, or owners, are not
personally liable for the debts contracted by a company. A stockholder may
lose his investment, but creditors usually cannot look to his personal assets
for satisfaction of their claims. Under normal circumstances, the
stockholders may withdraw as cash dividends an amount measured by the
corporate earnings. The distinction in this rule gives the creditors some
assurance that a certain portion of the assets equivalent to the owner's
investment cannot be arbitrarily withdrawn. Of course, this portion could bedepleted from your balance sheet because of operating losses. The owner's
equity in an unincorporated business is shown more simply. The interest of
each owner is given in total, usually with no distinction being made between
the portion invested and the accumulated net earnings.
The creditors are not concerned about the amount invested. If necessary,
creditors can attach the personal assets of the owners.
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BALANCE-SHEET STRUCTURE
Basis of balance-sheet: Assets = Liability + Equity
Balance Sheet of ICICI Bank ------------------- in Rs. Cr. -------------------Mar '12 Mar '11 Mar '10 Mar '09 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Capital and Liabilities:
Total Share Capital 1,152.77 1,151.82 1,114.89 1,463.29 1,46
Equity Share Capital 1,152.77 1,151.82 1,114.89 1,113.29 1,11
Share Application Money 2.39 0.29 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 350.00 350
Reserves 59,250.09 53,938.82 50,503.48 48,419.73 45,3Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Net Worth 60,405.25 55,090.93 51,618.37 49,883.02 46,8
Deposits 255,499.96 225,602.11 202,016.60 218,347.82 244,
Borrowings 140,164.91 109,554.28 94,263.57 67,323.69 65,6
Total Debt 395,664.87 335,156.39 296,280.17 285,671.51 310,
Other Liabilities & Provisions 17,576.98 15,986.35 15,501.18 43,746.43 42,8
Total Liabilities 473,647.10 406,233.67 363,399.72 379,300.96 399,
Mar '12 Mar '11 Mar '10 Mar '09 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Assets
Cash & Balances with RBI 20,461.29 20,906.97 27,514.29 17,536.33 29,3
Balance with Banks, Money at Call 15,768.02 13,183.11 11,359.40 12,430.23 8,66
Advances 253,727.66 216,365.90 181,205.60 218,310.85 225,
Investments 159,560.04 134,685.96 120,892.80 103,058.31 111,
Gross Block 9,424.39 9,107.47 7,114.12 7,443.71 7,03
Accumulated Depreciation 4,809.70 4,363.21 3,901.43 3,642.09 2,92
Net Block 4,614.69 4,744.26 3,212.69 3,801.62 4,10
Capital Work In Progress 0.00 0.00 0.00 0.00 0.00
Other Assets 19,515.39 16,347.47 19,214.93 24,163.62 20,5
Total Assets 473,647.09 406,233.67 363,399.71 379,300.96 399,
Contingent Liabilities 858,566.64 883,774.77 694,948.84 803,991.92 371,
Bills for collection 64,457.72 47,864.06 38,597.36 36,678.71 29,3
Book Value (Rs) 524.01 478.31 463.01 444.94 417
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STUDY OF CASH FLOW STATEMENT
MEANING:
Cash flow statement or statement of cash flows is a financialstatement 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 inbalance sheet andincome accounts aff
ectedcash 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.
PURPOSE:
The cash flow statement reflects a firms liquidity or solvency. The main
purpose to make cash flow statement are as follows:
1. provide information on a firm's liquidity and solvency and its ability to
change cash flows in future circumstances.
2. provide additional information for evaluating changes in assets, liabilities
and equity.
3. Improve the comparability of different firms' operating performance by
eliminating the effects of different accounting methods 4.indicate the
amount, timing and probability of future cash flows
http://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Balance_sheethttp://en.wikipedia.org/wiki/Balance_sheethttp://en.wikipedia.org/wiki/Income_accounthttp://en.wikipedia.org/wiki/Cash_and_cash_equivalentshttp://en.wikipedia.org/wiki/Market_liquidityhttp://en.wikipedia.org/wiki/Solvencyhttp://en.wikipedia.org/wiki/Cash_flowhttp://en.wikipedia.org/wiki/Accounting_methodshttp://en.wikipedia.org/wiki/Accounting_methodshttp://en.wikipedia.org/wiki/Cash_flowhttp://en.wikipedia.org/wiki/Solvencyhttp://en.wikipedia.org/wiki/Market_liquidityhttp://en.wikipedia.org/wiki/Cash_and_cash_equivalentshttp://en.wikipedia.org/wiki/Income_accounthttp://en.wikipedia.org/wiki/Balance_sheethttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Financial_statements -
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ACTIVITIES INVOLVED IN CASH FLOW
The cash flow statement is partitioned into cash flow resulting from
operating activities, cash flow resulting from investing activities, and cash
flow resulting from financing activities.
Operating activities:
Operating activities include the production ,sales anddelivery of the compan
y's product as well as collecting payment from itscustomers. This could
include purchasing raw materials, building inventory, advertising.
Investing activities:
Investing activities focus on the purchase of the long-term assets a companyneeds in order to make and sell its products, and the selling of any long-term
assets.
Financing activities:
Financing activities include the inflow of cash from
investorssuch as banksand shareholdersas well as the outflow of cash to
shareholders as dividendsas the company generates income.
Other activities which impact the longterm liabilities and equity of the
company are also listed in the financing activities section of the cash flow
statement. Analysis of cash flow statement is necessary for every
organization to depict its cash inflow and outflow.
http://en.wikipedia.org/wiki/Production%2C_costs%2C_and_pricinghttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Deliveryhttp://en.wikipedia.org/wiki/Long-term_assethttp://en.wikipedia.org/wiki/Investorhttp://en.wikipedia.org/wiki/Investorhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Shareholderhttp://en.wikipedia.org/wiki/Shareholderhttp://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Shareholderhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Investorhttp://en.wikipedia.org/wiki/Long-term_assethttp://en.wikipedia.org/wiki/Long-term_assethttp://en.wikipedia.org/wiki/Deliveryhttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Production%2C_costs%2C_and_pricing -
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Cash Flow of ICICI Bank ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Ma
12 mths 12 mths 12 mths 12 mths 12 m
Net Profit Before Tax 8803.42 6760.70 5345.32 5116.97 505
Net Cash From Operating Activities 9683.82 -6908.92 1869.21 -14188.49 -11
Net Cash (used in)/from
Investing Activities-12280.17 -2108.82 6150.73 3857.88 -17
Net Cash (used in)/from Financing Activities 3829.95 4283.20 1382.62 1625.36 299
Net (decrease)/increase In Cash and Cash
Equivalents2139.23 -4783.61 8907.13 -8074.57 683
Opening Cash & Cash Equivalents 34090.08 38873.69 29966.56 38041.13 373
Closing Cash & Cash Equivalents 36229.31 34090.08 38873.69 29966.56 380
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Capital Structure (ICICI Bank)
Period Instrument Authorized
Capital
Issued Capital - P A I D U P -
From To (Rs. cr) (Rs. cr) Shares (nos) Face Value C
2011 2012 Equity Share 1275 1152.71 1152714442 10 1
2010 2011 Equity Share 1275 1151.77 1151772372 10 1
2009 2010 Equity Share 1275 1114.85 1114845314 10 1
2008 2009 Equity Share 1275 1113.25 1113250642 10 1
2007 2008 Equity Share 1275 1112.69 1112687495 10 1
2006 2007 Equity Share 1000 899.27 899266672 10 8
2005 2006 Equity Share 1000 889.82 889823901 10 8
2004 2005 Equity Share 1550 616.39 616391905 10 6
2003 2004 Equity Share 1550 613.02 613021301 10 6
2001 2002 Equity Share 300 220.36 220358680 10 2
2000 2001 Equity Share 300 196.82 196818880 10 1
1999 2000 Equity Share 300 196.82 196818880 10 1
1997 1999 Equity Share 300 165 165000700 10 1
1995 1997 Equity Share 300 150 150000700 10 1
1994 1995 Equity Share 300 150 700 10 0
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CHAPTER : 3
ACCOUNTING POLICIES YEAR 2011-2012
OVERVIEW
ICICI Bank Limited (ICICI Bank or the Bank), incorporated in Vadodara,
India is a publicly held banking company engaged in providing a wide range of
Banking and financial services including commercial banking and treasury operations.
ICICI Bank is a banking company governed by the Banking Regulation Act, 1949.
Basis of preparation
The financial statements have been prepared in accordance with requirements
prescribed under the Third Schedule of the Banking Regulation Act, 1949.
The accounting and reporting policies of ICICI Bank used in the preparation
of these financial statements conform to Generally Accepted Accounting
Principles in India (Indian GAAP),
The guidelines issued by Reserve Bank of India (RBI) from time to time,
The Accounting Standards (AS) issued by the Institute of Chartered Accountants
of India (ICAI) and notified by the Companies (Accounting Standards) Rules, 2006
(as amended) to the extent applicable and practices generally prevalent in the
banking industry in India. The Bank follows the accrual method of accounting,
except where otherwise stated, and the historical cost convention.
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The preparation of financial statements requires the management to make
estimates and assumptions that are considered in the reported amounts
of assets and liabilities (including contingent liabilities) as of the
date of the financial statements and the reported income and expenses
during the reporting period. Management believes that the estimates
used in the preparation of the financial statements are prudent and
reasonable. Future results could differ from these estimates.
1. Revenue recognition
a) Interest income is recognized in the profit and loss account as it
accrues except in the case of non-performing assets (NPAs) where it is
recognized upon realization, as per the income recognition and asset
classification norms of RBI.
b) Income from leases is calculated by applying the interest rateimplicit in the lease to the net investment outstanding on the lease
over the primary lease period.
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2. Investments
Investments are accounted for in accordance with the extant RBI
guidelines on investment classification and valuation as given below.
a) All investments are classified into ''Held to Maturity'', ''Available
for Sale'' and ''Held for Trading''.
b) ''Held to Maturity'' securities are carried at their acquisition cost
or at amortized cost, if acquired at a premium over the face value. Any
premium over the face value of fixed rate and floating rate securities
acquired is amortized over the remaining period to maturity on a
constant yield basis and straight line basis respectively.
c) Costs including brokerage and commission pertaining to investments,
paid at the time of acquisition, are charged to the profit and loss
account.
d) Equity investments in subsidiaries/joint ventures are categorized as''Held to Maturity'' in accordance with RBI guidelines. The Bank assesses
these investments for any permanent diminution in value and appropriate
provisions are made.
3. Provisions/write-offs on loans and other credit facilities
a) All credit exposures, including advances at the overseas branches
and overdue arising from crystallized derivative contracts, are
classified as per RBI guidelines, into performing and NPAs. Advances
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held at the overseas branches that are identified as impaired as per
host country regulations but which are standard as per the extant RBI
guidelines are identified as NPAs at borrower level. Further, NPAs are
classified into sub-standard, doubtful and loss assets based on the
criteria stipulated by RBI.
The Bank holds specific provisions against non-performing loans,
general provision against performing loans and floating provision taken
over from erstwhile Bank of Rajasthan upon amalgamation. The assessment
of incremental specific provisions is made after taking into
consideration the existing specific provision held. The specific
provisions on retail loans held by the Bank are higher than the minimum
regulatory requirements.
b) Provision on assets restructured/rescheduled is made in accordance
with the applicable RBI guidelines on restructuring of advances byBanks.
c) Amounts recovered against debts written-off in earlier years and
provisions no longer considered necessary in the context of the current
status of the borrower are recognized in the profit and loss account.
d) In addition to the specific provision on NPAs, the Bank maintains a
general provision on performing loans. The general provision covers the
requirements of the RBI guidelines.
4. Transfer and servicing of assets
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The Bank transfers commercial and consumer loans through securitization
transactions. The transferred loans are de-recognized and gains/losses
are accounted for only if the Bank surrenders the rights to benefits
specified in the underlying securitized loan contract. Recourse and
servicing obligations are accounted for net of provisions.
a) Depreciation on leased assets and leasehold improvements is
recognized on a straight-line basis using rates determined with
reference to the primary period of lease or rates specified in Schedule
XIV to the Companies Act, 1956, whichever is higher.
b) Assets purchased/sold during the year are depreciated on a pro-rata
basis for the actual number of days the asset has been put to use.
c) Items costing up to Rs 5,000/- are depreciated fully over a period of
12 months from the date of purchase.
d) Assets at residences of Banks employees are depreciated at 20% P.A
5. Transactions involving foreign exchange
Foreign currency income and expenditure items of domestic operations
are translated at the exchange rates prevailing on the date of the
transaction. Income and expenditure items of integral foreign
operations (representative offices) are translated at daily closing
rates, and income and expenditure items of non-integral foreign
operations (foreign branches and offshore banking units) are translated
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at quarterly average closing rates.
6. Accounting for derivative contracts
The Bank enters into derivative contracts such as foreign currency
options, interest rate and currency swaps, credit default swaps and
cross currency interest rate swaps.
7. Staff Retirement Benefits Gratuity
ICICI Bank makes contributions to five separate gratuity funds for employees.
Separate gratuity funds for employees inducted from erstwhile ICICI, erstwhile
Bank of Madura, erstwhile Sangli Bank and erstwhile Bank of Rajasthan are
managed by ICICI Prudential Life Insurance Company Limited.
The gratuity fund for employees of ICICI Bank, other than employees inducted
from erstwhile ICICI, erstwhile Bank of Madura, erstwhile Sangli Bank anderstwhile Bank of Rajasthan is administered by Life Insurance Corporation of
India (LIC) and ICICI Prudential Life Insurance Company Limited.
Pension
The Bank purchases annuities from LIC and ICICI Prudential Life Insurance
Company Limited as part of master policies for payment of pension to retired
employees.
Actuarial valuation of pension liability is calculated based on certain
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assumptions regarding rate of interest, salary growth, mortality and
staff attrition as per the projected unit credit method.
Provident Fund
ICICI Bank is statutorily required to maintain a provident fund as a part of
retirement benefits to its employees. There are separate provident funds for
employees inducted from erstwhile Bank of Madura, erstwhile Sangli
Bank, erstwhile Bank of Rajasthan and for Other employees of ICICI Bank.
In-house trustees manage these funds. Each employee contributes 12.0% of
his or her basic salary (10.0% for certain staff of erstwhile Sangli Bank)
and ICICI Bank contributes an equal amount. The funds are invested
according to the rules prescribed by the Government of India.
Leave encashment
The Bank provides for leave encashment benefit, which is a long-term benefitscheme, based on actuarial valuation conducted by an independent actuary.
8. Income Taxes
Income tax expense is the aggregate amount of current tax and deferred
tax expense incurred by the Bank. The current tax expense and deferred
tax expense is determined in accordance with the provisions of the
Income Tax Act, 1961 and as per Accounting Standard 22 - Accounting for
Taxes on Income issued by ICAI, respectively. Deferred tax adjustments
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comprise changes in the deferred tax assets or liabilities during the year.
Deferred tax assets and liabilities are recognized on a prudent basis for the
future tax consequences of timing differences arising between the carrying
values of assets and liabilities and their respective tax basis, and carry forward
losses.
9. Impairment of Assets
Fixed assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset with future net
discounted cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment is recognized by
debiting the profit and loss account and is measured as the amount bywhich the carrying amount of the assets exceeds the fair value of the
assets.
10. Provisions, contingent liabilities and contingent assets
The Bank estimates the probability of any loss that might be incurred
on outcome of contingencies on the basis of information available up to
the date on which the financial statements are prepared. A provision is
recognized when an enterprise has a present obligation as a result of a
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past event and it is probable that an outflow of resources will be
required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are determined based on management
estimates of amounts required to settle the obligation at the balance
sheet date, supplemented by experience of similar transactions. These
are reviewed at each balance sheet date and adjusted to reflect the
current management estimates.
11. Earnings per share (EPS)
Basic and diluted earnings per share are computed in accordance with
Accounting Standard-20 - Earnings per share.
Basic earnings per share is calculated by dividing the net profit or
loss after tax for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.
12. Cash and cash equivalents
Cash and cash equivalents include cash in hand, balances with RBI,
balances with other banks and money at call and short notice.
CHAPTER : 4
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OBJECTIVE OF THE STUDY OF
PUNJAB NATIONAL BANK
The main objectives of this project are the following:
To study about PUNJAB NATIONAL BANK and its related aspects like itsproducts & services, history, organizational structure, subsidiary companies etc.
To analyze the financial statement i.e P&L account and Balance sheet ofPNB BANK.
To learn about Cash Flow , Capital Structure. To understanding the meaning and need of Balance Sheet and profit and loss
account.
The purpose is to portray the financial position of PNB BANK with the helpof Balance sheet and profit and loss account.
To evaluate the financial soundness, stability and liquidity of PNB BANK.
INTRODUCTION TO PUNJAB NATIONAL BANK
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Punjab National Bank(PNB) was registered on May 19,1894 under the
Indian Companies Act with its office in Anarkali Bazaar Lahore. The Bank is the
second largest government-owned commercial bank in India with about4,904 branches across 764 cities. It serves over 37 million customers. The bank has
been ranked 248 th biggest bank in the world by Bankers Almanac, London. The
bank's total assets for financial year 2007 were about US$60 billion. Punjab
National Bank (PNB) has the distinction of being the first Indian bank to have been
started solely with Indian capital. The bank was nationalized in July 1969 along
with 13other banks.
PNB has a banking subsidiary in the UK, as well as branches in Hong Kong and
Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai. From itsmodest beginning, the bank has grown in size and stature to become a front-line
banking institution in India at present. A professionally managed bank with
a successful track record of over 110 years. Strategic business area covers the
largeIndo-Gangetic belt and the metropolitan centers. Strong correspondent
banking relationships with more than 217 international banks of the world. More
than 50 renowned international banks maintain their Rupee Accounts with PNB.
Well equipped dealing rooms; 20 different foreign currency accounts are
maintained at major centers all over the globe.
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HISTORY OF PUNJAB NATIONAL BANK
1895:PNB commenced its operations in Lahore.PNB has the distinction of
being the first Indian bank to have been started solely with Indian capital that
has survived to the present. (The first entirely Indian bank, the Oudh CommercialBank, was established in 1881in Faizabad, but failed in 1958 .)PNB's founders
included several leaders of the Swadeshi movement such as Dyal Singh Majithia
and Lala HarKishen Lal, Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C.
Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala
Lajpat Rai was actively associated with the management of the Bank in its early
years.
1904 :PNB established branches in Karachi and Peshawar.
1940 PNB absorbed Bhagwan Dass Bank, a scheduled bank located in Delhi circle.
1947 : Partition of India and Pakistan at Independence.
PNB lost its premises in Lahore, but continued to operate in Pakistan.
1951: PNB acquired the 39 branches of Bharat Bank (est. 1942); Bharat
Bank became Bharat Nidhi Ltd.
1961: PNB acquired Universal Bank of India.
1963: The Government of Burma nationalized PNB's branch in Rangoon
(Yangon).
1965 : After the Indo- Pak war the government of Pakistan seized all the offices
in Pakistan of Indian banks, including PNB's head office, which may have moved
to Karachi.
PNB also had one or more branches in East Pakistan (Bangladesh).
1969 : The Government of India (GOI) nationalized
PNB and 13other major commercial banks, on July 19,1969 .
1976 : PNB opened a branch in London.
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1986: The Reserve Bank of India required PNB to transfer its London branch to
State Bank of India after the branch was involved in a fraud scandal.
1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a rescue. The
acquisition added Hindustan's 142 branches to PNB's network.1993:PNB acquired New Bank of India, which the GOI had nationalized in 1980 .
1998 :PNB set up a representative office in Almaty, Kazakhstan.
2003: PNB took over Nedungadi Bank, the oldest private sector bank in Kerala.
At the time of the merger with PNB, Nedungadi Bank's shares had zero value, with
the result that its shareholders received no payment for their shares.PNB also
opened a representative office in London.
2004 : PNB established a branch in Kabul, Afghanistan. PNB also opened a
representative office in Shanghai.PNB established an alliance with Everest Bank in
Nepal that permits migrants to transfer funds easily between India and Everest
Bank's 12 branches in Nepal.
2005 : PNB opened a representative office in Dubai.
2007 : PNB established PNBIL - Punjab National Bank (International) - in the
UK, with two offices, one in London, and one in South Hall. Since then it has
opened a third branch in Leicester, and is planning a fourth in Birmingham.
2008 : PNB opened a branch in Hong Kong.
2009: PNB opened a representative office in Oslo, Norway, and a second branch
in Hong Kong, this in Kowloon.
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COMPANY PROFILE OF PUNJAB NATIONAL BANK
With over 38 million satisfied customers and 4668 offices, PNB has continued to
retain its leadership position among the nationalized banks. The bank enjoys strong
fundamentals, large franchise value and good brand image. Besides being ranked
as one of India's top service brands, PNB has remained fully committed to
its guiding principles of sound and prudent banking. Apart from offering
banking products, the bank has also entered the credit card & debit card business;
bullion business; life and non-life insurance business; Gold coins & asset
management business, etc. Since its humble beginning in 1895 with the distinctionof being the first Indian bank to have been started with Indian capital, PNB has
achieved significant growth in business which at the end of March 2009 amounted
to Rs 3,64,463 crore. Today, with assets of more than Rs 2,46,900 crore ,PNB is
ranked as the 3rd largest bank in the country (after SBI and ICICI Bank) and has
the 2nd largest network of branches ( 4668 including 238 extension counters
and 3overseas offices. PNB has always looked at technology as a key facilitator to
provide better customer service and ensured that its IT strategy follows the
Business strategy Along with the achievement of 100%branch computerization,one of the major achievements of the Bank is covering all the branches of the Bank
under Core Banking Solution (CBS), thus covering 100% of its business and
providing Anytime Anywhere banking facility to all customers including
customers of more than 2000 rural branches. The bank has also been offering
Internet banking services to the customers of CBS branches like booking of tickets,
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payment of bills of utilities, purchase of airline tickets etc .Towards developing a
cost effective alternative channels of delivery, the bank with more
than 2150 ATMs has the largest ATM network amongst Nationalized Banks.
With the help of advanced technology, the Bank has been a frontrunner in theindustry so far as the initiatives for Financial Inclusion is concerned. With
its policy of inclusive growth in the Indo- Gangetic belt, the Banks mission
is Banking for Unbanked. The Bank has launched a drive for biometric smart
card based technology enabled Financial Inclusion with the help of
Business Correspondents/Business Facilitators (BC/BF) so as to reach out to the
last mile customer. The BC/BF will address the outreach issue while technology
will provide cost effective and transparent services. The Bank has started
several innovative initiatives for marginal groups like rickshaw pullers, vegetable
vendors, diary farmers, construction workers, etc. The Bank has already achieved
100% financial inclusion in 21,408 villages. Backed by strong domestic
performance, the bank is planning to realize its global aspirations. In order to
increase its international presence, the Bank continues its selective foray in
international markets with presence in Hongkong, Dubai, Kazakhstan, UK,
Shanghai, Singapore, Kabul and Norway. A second branch in Hongkong at
Kowloon was opened in the first week of April 09.Bank is also in the process of
establishing its presence in China, Bhutan, DIFC Dubai, Canada and Singapore.
The bank also has a joint venture with Everest Bank Ltd. (EBL),Nepal. Under thelong term vision, Bank proposes to start its operation in Fiji Island, Australia and
Indonesia. Bank continues with its goal to become a household brand with global
expertise. Amongst Top 1000 Banks in the World, The Banker listed PNB
at 250 th place. Further, PNB is at the 1166th position among 48 Indian firms
making it to a list of the worlds biggest companies compiled by the US magazine
Forbes. Financial Performance: Punjab National Bank continues to maintain its
frontline position in the Indian banking industry. In particular, the bank has
retained its NUMBER ONE position among the nationalized banks in terms ofnumber of branches, The impressive operational and financial performance has
been brought about by Banks focus on customer based business with thrust on
SME, Agriculture, more inclusive approach to banking; better asset liability
management; improved margin management, thrust on recovery and increased
efficiency in core operations of the Bank.
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Profit & Loss account of Punjab National
Bank------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Income
Interest Earned 36,428.03 26,986.48 21,466.91 19,326.16 14,2
Other Income 4,202.60 3,612.58 3,565.31 2,919.69 1,99
Total Income 40,630.63 30,599.06 25,032.22 22,245.85 16,2
Expenditure
Interest expended 23,013.59 15,179.14 12,944.02 12,295.30 8,73
Employee Cost 4,723.48 4,461.10 3,121.14 2,924.38 2,46
Selling and Admin Expenses 3,353.59 2,813.45 1,701.46 1,406.42 884.
Depreciation 292.26 255.85 222.83 191.06 170.
Miscellaneous Expenses 4,363.51 3,456.02 3,137.42 2,337.80 1,96
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Operating Expenses 9,405.85 8,367.96 5,761.36 5,026.81 3,90
Provisions & Contingencies 3,326.99 2,618.46 2,421.49 1,832.85 1,58
Total Expenses 35,746.43 26,165.56 21,126.87 19,154.96 14,2
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Mar '12 Mar '11 Mar '10 Mar '09 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Net Profit for the Year 4,884.20 4,433.50 3,905.36 3,090.88 2,04
Extra ordinary Items 7.88 0.00 0.00 0.00 0.00
Profit brought forward 0.00 0.00 7.64 0.00 15.5
Total 4,892.08 4,433.50 3,913.00 3,090.88 2,06
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 746.19 696.99 693.67 630.61 409.
Corporate Dividend Tax 121.05 113.07 116.43 107.17 69.6
Per share data (Annualized)
Earnings Per Share (Rs) 144.00 139.94 123.86 98.03 64.9
Equity Dividend (%) 220.00 220.00 220.00 200.00 130.
Book Value (Rs) 777.39 632.48 514.77 416.74 341.
Appropriations
Transfer to Statutory Reserves 1,390.32 1,258.39 1,532.46 1,155.46 596.
Transfer to Other Reserves 2,634.53 2,365.05 1,570.44 1,190.00 988.
Proposed Dividend/Transfer to Govt. 867.24 810.06 810.10 737.78 479.
Balance c/f to Balance Sheet 0.00 0.00 0.00 7.64 0.00
Total 4,892.09 4,433.50 3,913.00 3,090.88 2,06
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Balance Sheet of Punjab National Bank ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Capital and Liabilities:
Total Share Capital 339.18 316.81 315.30 315.30 315.
Equity Share Capital 339.18 316.81 315.30 315.30 315
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 26,028.37 19,720.99 15,915.63 12,824.59 10,4
Revaluation Reserves 1,449.53 1,470.76 1,491.99 1,513.74 1,53
Net Worth 27,817.08 21,508.56 17,722.92 14,653.63 12,3
Deposits 379,588.48 312,898.73 249,329.80 209,760.50 166
Borrowings 37,264.27 31,589.69 19,262.37 4,374.36 5,44
Total Debt 416,852.75 344,488.42 268,592.17 214,134.86 171,
Other Liabilities & Provisions 13,524.18 12,328.27 10,317.69 18,130.13 14,7
Total Liabilities 458,194.01 378,325.25 296,632.78 246,918.62 199,
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Mar '12 Mar '11 Mar '10 Mar '09 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Assets
Cash & Balances with RBI 18,492.90 23,776.90 18,327.58 17,058.25 15,2
Balance with Banks, Money at Call 10,335.14 5,914.32 5,145.99 4,354.89 3,57
Advances 293,774.76 242,106.67 186,601.21 154,702.99 119,
Investments 122,629.47 95,162.35 77,724.47 63,385.18 53,9
Gross Block 5,265.08 4,981.60 4,215.21 3,930.36 3,69
Accumulated Depreciation 2,096.22 1,876.01 1,701.74 1,533.25 1,38
Net Block 3,168.86 3,105.59 2,513.47 2,397.11 2,31
Capital Work In Progress 0.00 0.00 0.00 0.00 0.00
Other Assets 9,792.88 8,259.42 6,320.07 5,020.20 4,38
Total Assets 458,194.01 378,325.25 296,632.79 246,918.62 199,
Contingent Liabilities 173,768.84 101,465.73 68,124.47 79,270.65 80,6
Bills for collection 50,981.22 37,449.53 33,215.78 31,941.43 23,4
Book Value (Rs) 777.39 632.48 514.77 416.74 341
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Cash Flow of Punjab National Bank ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Ma
12 mths 12 mths 12 mths 12 mths 12
Net Profit Before Tax 7037.04 6563.72 5904.78 4766.92 329
Net Cash From Operating Activities -811.22 8045.67 1835.99 2105.16 175
Net Cash (used in)/from
Investing Activities-492.34 -1083.66 -409.41 -395.84 -44
Net Cash (used in)/from Financing Activities 440.38 -744.36 633.84 873.11 187
Net (decrease)/increase In Cash and Cash
Equivalents-863.18 6217.65 2060.42 2582.42 318
Opening Cash & Cash Equivalents 29691.21 23473.56 21413.14 18830.72 156
Closing Cash & Cash Equivalents 28828.03 29691.21 23473.56 21413.14 188
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Capital Structure (Punjab National Bank)
Period Instrument Authorized
Capital
Issued Capital - P A I D U P -
From To (Rs. cr) (Rs. cr) Shares (nos) Face Value C
2011 2012 Equity Share 3000 339.18 339178683 10 3
2010 2011 Equity Share 3000 316.81 316812157 10 3
2009 2010 Equity Share 3000 315.3 315302500 10 3
2008 2009 Equity Share 1500 315.3 315302500 10 3
2007 2008 Equity Share 1500 315.3 315302500 10 3
2006 2007 Equity Share 1500 315.3 315302500 10 3
2005 2006 Equity Share 1500 315.3 315302500 10 3
2004 2005 Equity Share 1500 315.3 315302500 10 3
2003 2004 Equity Share 1500 265.3 265302500 10 2
2002 2003 Equity Share 1500 265.3 265302500 10 2
2001 2002 Equity Share 1500 265.3 212241300 10 2
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CHAPTER : 5
ADVANTAGES & LIMITATIONS
Ratio analysis is an important and age-old technique of financial analysis. The
following are some of the advantages of ratio analysis:
1. Simplifies financial statements: It simplifies the comprehension of financial
statements. Ratios tell the whole story of changes in the financial condition of the
business.
2. Facilitates inter-firm comparison: It provides data for inter-firm comparison.Ratios highlight the factors associated with with successful and unsuccessful firm.
They also reveal strong firms and weak firms, overvalued and undervalued firms.
3. Helps in planning: It helps in planning and forecasting. Ratios can assist
management, in its basic functions of forecasting. Planning, co-ordination, control
and communications.
4. Makes inter-firm comparison possible: Ratios analysis also makes possible
comparison of the performance of different divisions of the firm. The ratios arehelpful in deciding about their efficiency or otherwise in the past and likely
performance in the future.
5. Help in investment decisions: It helps in investment decisions in the case of
investors and lending decisions in the case of bankers etc.
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LIMITATIONS
The ratios analysis is one of the most powerful tools of financial management.
Though ratios are simple to calculate and easy to understand, they suffer from
serious limitations.1.Limitations of financial statements: Ratios are based only on the information
which has been recorded in the financial statements. Financial statements
themselves are subject to several limitations. Thus ratios derived, there from, are
also subject to those limitations. For example, non-financial changes though
important for the business are not relevant by the financial statements.
2.Comparative study required: Ratios are useful in judging the efficiency of the
business only when they are compared with past results of the business. However,
such a comparison only provide glimpse of the past performance and forecasts for
future may not prove correct since several other factors like market conditions,
management policies, etc. may affect the future operations.
3.Problems of price level changes: A change in price level can affect the validity
of ratios calculated for different time periods. In such a case the ratio analysis may
not clearly indicate the trend in solvency and profitability of the company.
4. Lack of adequate standard: No fixed standard can be laid down for ideal
ratios. There are no well accepted standards or rule of thumb for all ratios which
can be accepted as norm. It renders interpretation of the ratios difficult.
5.Limited use of single ratios: A single ratio, usually, does not convey much of a
sense. To make a better interpretation, a number of ratios have to be calculated
which is likely to confuse the analyst than help him in making any good decision.
6. Personal bias: Ratios are only means of financial analysis and not an end in
itself. Ratios have to interpret and different people may interpret the same ratio in
different way.
7.Incomparable: Not only industries differ in their nature, but also the firms of
the similar business widely differ in their size and accounting procedures etc. It
makes comparison of ratios difficult and misleading.
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CHAPTER : 6
CONCLUSION
Ratios make the related information comparable. A single figure by itselfhas no meaning, but when expressed in terms of a related figure, it yields
significant interferences. Thus, ratios are relative figures reflecting the
relationship between related variables. Their use as tools of financial
analysis involves their comparison as single ratios, like absolute figures, are
not of much use.
Ratio analysis has a major significance in analysing the financialperformance of a company over a period of time. Decisions affecting
product prices, per unit costs, volume or efficiency have an impact on the
profit margin or turnover ratios of a company.
Financial ratios are essentially concerned with the identification ofsignificant accounting data relationships, which give the decision-maker
insights into the financial performance of a company.
The analysis of financial statements is a process of evaluating therelationship between component parts of financial statements to obtain a
better understanding of the firm position and performance.
The first task of financial analyst is to select the information relevant to thedecision under consideration from the total information contained in the
financial statements. The second step is to arrange the information in a way
to highlight significant relationships.
Ratio analysis in view of its several limitations should be considered only asa tool for analysis rather than as an end in itself. The reliability and
significance attached to ratios will largely hinge upon the quality of data on
which they are based. They are as good or as bad as the data itself.
Nevertheless, they are an important tool of financial analysis.
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BIBLIOGRAPHY & WEBLOGRAPHY
Web sites :
www.sbi.com www.icici.com www.pnb.com
Books referred :
Basic Financial Management - M Y Khan
P K Jain
Financial Management - Prasanna Chandra
http://www.google.co.in/url?sa=t&rct=j&q=WEBLOGRAPHY&source=web&cd=5&ved=0CDgQFjAE&url=http%3A%2F%2Fvamenro.blogs.uv.es%2Fpoetry%2F1-first-paper%2F1-6-weblography%2F&ei=rhiJUMnfFM_OrQf11ICwAw&usg=AFQjCNGivRukgku2LMFxfI-Aeg7rm72S5Ahttp://www.google.co.in/url?sa=t&rct=j&q=WEBLOGRAPHY&source=web&cd=5&ved=0CDgQFjAE&url=http%3A%2F%2Fvamenro.blogs.uv.es%2Fpoetry%2F1-first-paper%2F1-6-weblography%2F&ei=rhiJUMnfFM_OrQf11ICwAw&usg=AFQjCNGivRukgku2LMFxfI-Aeg7rm72S5Ahttp://www.sbi.com/http://www.icici.com/http://www.pnb.com/http://www.pnb.com/http://www.icici.com/http://www.sbi.com/http://www.google.co.in/url?sa=t&rct=j&q=WEBLOGRAPHY&source=web&cd=5&ved=0CDgQFjAE&url=http%3A%2F%2Fvamenro.blogs.uv.es%2Fpoetry%2F1-first-paper%2F1-6-weblography%2F&ei=rhiJUMnfFM_OrQf11ICwAw&usg=AFQjCNGivRukgku2LMFxfI-Aeg7rm72S5A