A STUDY ON FINANCIAL PERFORMANCE OF TAMILNADU STATE APEX CO-OPERATIVE BANK LIMITED. A PROJECT REPORT Submitted by G.LOKESH KUMAR Reg. No 11309631019 in partial fulfillment for the award of the degree of MASTER OF BUSINESS ADMINISTRATION R.M.K.ENGINEERING COLLEGE ANNA UNIVERSITY: CHENNAI 600 025
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
A STUDY ON FINANCIAL PERFORMANCE OF
TAMILNADU STATE APEX CO-OPERATIVE BANK LIMITED.
A PROJECT REPORT
Submitted by
G.LOKESH KUMAR
Reg. No 11309631019
in partial fulfillment for the award of the degree
of
MASTER OF BUSINESS ADMINISTRATION
R.M.K.ENGINEERING COLLEGE
ANNA UNIVERSITY: CHENNAI 600 025
AUGEST 2010
BONAFIDE CERTIFICATE
Certified that this project report, “A study on financial performance of TAMIL NADU STATE
APEX CO-OPERATIVE BANK LIMITED. The bonafide work of “G.LOKESH KUMAR”
who carried out the project work under my supervision.
SIGNATURE SIGNATURE
HEAD OF DEPARTMENT SUPERVISOR
Dept of Management Studies Dept of Management Studies
R.M.K ENGINEERING COLLEGE R.M.K ENGINEERING COLLEGE R.S.M.Nagar, Kavaraipettai-601 206 R.S.M.Nagar, Kavaraipettai-601 206
The Authorized share Capital of the Bank is Rs.125.00 Crores. The Share
Capital of the Bank as on 31.03.2010 is Rs.61.07 Crores.
Financial assistance is provided to the DCCBs every year to purchase
equipments like Computers, Fax machines, to modernize.
The Bank is catering to the needs of the public in Chennai through its network of
44 Branches and 1Extension counter situated in and around the city.
The National Federation of State Cooperative Banks limited (NAFSCOB) has
instituted a scheme of best performance awards to Apex bank.
9
BANK’S PRODUCT
Deposits from public- Bank accept fixed deposit and requiring deposits.
Jewel loan to customers- Bank provide loan to customer for jewel kept in
bank and get money.
Agricultural loan- The DCCBs bank is distribute the agricultural loan to
farmers.
Loan to Consumer’s Cooperative- In wholesales stores are providing loan
for develop their business.
Loan to cooperative printing press- To provide loan to develop the
process.
Loans to Urban Cooperative Bank- TNSC bank limited provide loans to
Urban Co-operative Bank for develop the bank process.
.
10
CHAPTER – 2
ANALYSIS AND INTERPRETATION
2.1FINANCIAL ANALYSIS TOOLS
2.1.1 RATIO ANALYSIS
2.1.1.1 RATIO OF SHARE CAPITAL TO OWNED FUND
SHARE CAPITAL *100 / OWNED FUNDS
YEAR SHARE CAPITAL OWNED FUND %
2004-2005 40,94,70,000.00 439,15,78,942.00 9.300
2005-2006 53,47,60,000.00 563,97,40,252.00 9.280
2006-2007 56,60,20,000.00 617,47,32,751.00 9.160
2007-2008 61,07,10,000.00 687,83,28,714.00 8.878
2008-2009 61,07,10,000.00 693,60,81,799.00 8.804
11
INTERPRETATION
The data shows a gradual increase in share capital and owned funds. It is also observed that percentage increase in owned fund is more than that of share capital over five years.
In the year 2007-2008 and 2008-2009, there is no change in share capital value.
The data shows a gradual increase in the both net profit around 8 cr. Whereas increase in total assets is by 2000 cr. The ratio of net profit to total assets does not follow any trend and is varying.
It can be seen that in the year 2007-2008 net profit decreased drastically. This may be attributed to the new tax policy implemented by Government. So bank net profit are reduced and in the following year i.e. 2008-2009 the net profit position change.
The data shows the working capital increasing position. In the same time the owned fund also increase gradually. But the year 2008-2009 percentage are reduced for the bank because of the increase in reserve fund but the working capital is not increase that much of owned fund.
20
2.1.2.1 Comparative balance sheet as on 31st march
Particulars 2008 2009 Different %
Liabilities
1. Share capital 443,75,10,000.00 635,09,10,000.00 191,34,00,000.00 30.12
The profitability of the bank appears to be impressive, as judged by increase in reserves and surplus by 55.19%, it results in increase in earnings per share and dividend per share.
Fixed assets are reduced by 4.62%, so it is unfavorable, as long-term funds are not used for acquiring of fixed assets. Whereas increase in long-term funds shows that solvency of the bank is satisfactory.
Advances are reduced by 12.21%, so the bank earns the interest to be reduced for the previous year. The bank will provide loan to public for earn interest.
Deposits are increase 9.83% but it is not sufficient for the banking sector. If the deposits increase bank provide more loans and get interest huge.
22
2.1.2.2 Comparative balance sheet as on 31ST march
Particulars 2007 2008 Different %
Liabilities
1. Share capital 247,94,20,000.00 443,75,10,000.00 195,80,90,000.00 44.12
The profitability of the bank is low to compare of pervious year. The reserve and surplus is (44.07%), so dividend decreases for the share holders.
Fixed assets is increase 3.70%, so the assets is increase normally its favor for the institution
Advance are increase 2.79%, so the bank provide loans to customers and earn interest more compare to previous year
Deposits are increases to 18.28% so the bank has more funds to invest are increasing their actives. But the bank has to pay the interest for depositor.
24
Particulars 2006 2007 Different %
Liabilities
1. Share capital 3,47,60,000.00 247,94,20,000.00 194,46,60,000.00 78.43
2.1.2.3 Comparative balance sheet as on 31st march
25
INFERENCES:
The profitability of the bank is low to compare of pervious year. The reserve and surplus is (28.62%), so dividend decreases for the share holders.
Fixed assets are reduced by 3.26%, so it is unfavorable, as long-term funds are not used for acquiring of fixed assets. Whereas increase in long-term funds shows that solvency of the bank is satisfactory.
Advance is increase 6.23%, so the banks provides loans to customers and earn interest more compare to previous year.
Deposits are increases to 4.12% so the banks have funds to invest are increasing their actives. but the bank have to pay the interest for depositor
26
2.1.2.4 Comparative balance sheet as on 31st march
Particulars 2005 2006 Different %
Liabilities
1. Share capital 40,94,70,000.00 53,47,60,000.00 12,52,90,000.00 23.42
The profitability of the bank appears to be impressive, as judged by increase in reserves and surplus by 9.41%, it results in increase in earnings per share and dividend per share.
Fixed assets are reduced by 1.85%, so it is unfavorable, as long-term funds are not used for acquiring of fixed assets. Whereas increase in long-term funds shows that solvency of the bank is satisfactory.
Advances are increase 7.14%, so the bank provides loans to customers and earn interest more compare to previous year.
Deposits are increases to 2.053% so the banks have funds to invest are increasing their actives. But the bank has to pay the interest for depositor.
28
2.1.2.5 Comparative balance sheet as on 31st march
Particulars 2004 2005 Different %
Liabilities
1. Share capital 37,81,60,000.00 40,94,70,000.00 31,31,000.00 7.64
The profitability of the bank appears to be impressive, as judged by increase in reserves and surplus by 23.49%, it results in increase in earnings per share and dividend per share.
Fixed assets are reduced by 67.04%, so it is unfavorable, as long-term funds are not used for acquiring of fixed assets. Whereas increase in long-term funds shows that solvency of the bank is satisfactory.
Advances are increase 14.01%, so the bank provides loans to customers and earn interest more compare to previous year.
Deposits are reduced to 1.87% so the banks are reduced to invest are their actives. But the bank has to pay the interest for depositor.
30
2.1.3.1 Common size balance sheet as on 31st march 2009
Particulars 2009 % of assets and liabilities
Liabilities
1. Share capital 635,09,10,000.00 9.12
2. Reserve 632,53,71,799.62 9.10
3. Surplus 33,73,97,767.23 0.50
4. Borrowings 830,58,55,003.00 11.92
5. Branch adjustment 39,16,700.07 0.005
6. Deposits 4429,15,81,597.70 63.56
7. Liabilities 95,99,80,653.45 1.38
8. Other liabilities 310,33,46,126.26 4.454
Total liabilities 6967,83,59,647.33 100.00
Assets
1. Fixed assets 703,47,547.49 0.10
2. Other assets 27,05,98,583.44 0.39
3. Advance 3296,00,83,425.03 47.30
4. Investment 1645,56,74,636.00 23.63
5. Liquid assets 296,16,55,455.03 4.25
6. Money call 1695,00,00,000.00 24.33
Total assets 6967,83,59,647.33 100.00
31
2.1.3.2 Common size balance sheet as on 31st march 2008
Particulars 2008 % of assets and liabilities
Liabilities
1. Share capital 443,75,10,000.00 7.53
2. Reserve 626,76,18,714.44 10.64
3. Surplus 15,11,76,286.30 0.25
4. Borrowings 608,40,24,496.00 10.32
5. Branch adjustment ------------------- ---
6. Deposits 3993,71,49,661.16 67.80
7. Liabilities 92,61,17,795.39 1.57
8. Other liabilities 109,93,86,794.45 1.87
Total liabilities 5890,29,83,747.74 100.00
Assets
1. Fixed assets 736,04,179.90 0.12
2. Other assets 21,14,76,252.63 0.36
3. Advance 3336,26,10,831.25 56.64
4. Investment 1458,51,13,237.00 24.76
5. Liquid assets 367,01,79,246.96 6.231
6. Money call 700,00,00,000.00 11.88
Total assets 5890,29,83,747.74 100.00
32
2.1.3.3 Common size balance sheet as on 31st march 2007
Particulars 2007 amount % of assets and liabilities
Liabilities
1. Share capital 247,94,20,000.00 4.72
2. Reserve 560,87,12,759.33 10.69
3. Surplus 21,78,09,498.03 0.41
4. Borrowings 878,22,74,925.00 16.73
5. Branch adjustment 43,37,167.85 0.08
6. Deposits 3263,50,40,050.00 62.16
7. Liabilities 72,20,45,583.10 1.37
8. Other liabilities 204,38,06,437.70 3.91
Total liabilities 5249,34,46,430.29 100.00
Assets
1. Fixed assets 7,08,80,439.14 0.14
2. Other assets 43,21,50,298.60 0.82
3. Advance 3242,95,93,933.52 61.78
4. Investment 1083,73,78,158.00 20.64
5. Liquid assets 316,34,43,601.00 6.03
6. Money call 556,00,00,000.00 10.6
Total assets 5249,34,46,430.29 100.00
33
Particulars 2006 % of assets and liabilities
Liabilities
1. Share capital 53,47,60,000.00 1.05
2. Reserve 510,49,00,252.00 10.06
3. Surplus 28,01,59,366.31 0.60
4. Borrowings 1026,75,97,090.66 23.78
5. Branch adjustment 21,73,265.00 0.004
6. Deposits 3126,78,27,388.61 61.61
7. Liabilities 68,36,27,205.50 1.35
8. Other liabilities 81,14,62,251.00 1.60
Total liabilities 5075,25,86,823.29 100.00
Assets
1. Fixed assets 7,31,95,585.82 0.144
2. Other assets 13,16,82,887.70 0.26
3. Advance 3040,70,58,390.00 59.91
4. Investment 1105,36,40,414.00 21.78
5. Liquid assets 297,70,09,538.00 5.87
6. Money call 611,00,00,000.00 12.04
Total assets 5075,25,86,823.29 100.00
2.1.3.4 Common size balance sheet as on 31st march 2006
34
2.1.3.5 Common size balance sheet as on 31st march 2005
Particulars 2005 % of assets and liabilities
Liabilities
1. Share capital 40,94,70,000.00 0.85
2. Reserve 439,13,78,942.56 9.16
3. Surplus 25,37,71,690.20 0.53
4. Borrowings 1082,17,69,938.98 22.58
5. Branch adjustment ----------------------- ---
6. Deposits 3062,57,86,622.88 63.40
7. Liabilities 86,32,93,583.20 1.80
8. Other liabilities 56,90,96,785.90 1.29
Total liabilities 4793,45,67,563.77 100.00
Assets
1. Fixed assets 7,18,40,253.79 0.15
2. Other assets 12,24,25,523.10 0.03
3. Advance 2823,30,14,280.00 58.90
4. Investment 1209,09,53,372.00 25.22
5. Liquid assets 323,46,32,196.00 6.75
6. Money call 417,00,00,000.00 8.70
7. Branch adjustment 1,17,01,938.89 0.02
Total assets 4793,45,67,563.77 100.00
35
Common size balance sheet of share capital, deposit, borrowings trend for year 2005-2009
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
0
20
40
60
80
100
depositsborrowingshare capital
Common size balance sheet of investment, advance, fixed assets for the year 2005-2009
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
0102030405060708090
investmentadvance fixed assets
Interpretation:
The above trend charts show the following facts:
a) The share capital has shown an increasing trend.
b) The position of borrowings have not shown any change and remains approximately same.
c) Deposits have increased in the year 2007-08 but in the subsequent year it has decreased.
d) The investments remained constant over the period between 2005-1007 but in 2008-09 shown a slight decrease. A similar trend is shown for advances also.
e) Fixed assets remains constant from 2004-05 to 2008-09.
36
FUNDS FLOW STATEMENTS
2.1.4.1 Statement showing in working capital increasing (or) decreasing
1. The sudden operation in organization its meets requirement to maintain the working capital. In the statement are shows the year 2004-07 working capital is reduce but the year 2007-08 the working capital is increase for more current asset. In the organization working capital must maintain certain limit if excess amount of working capital is not help the organization for earn any income.
2. The bank funds from operation is to be decreasing the year 2005-2007. But the year 2008 the funds from operation is to be increase for the reason is reserve funds affected more in the year. So the year shows the result is changed but the next year 2009 is totally changed for the same reason reserved funds is not contribute.
3. In the year 2004-05 to 2005-06 the issue of share is increase gradually. In the year 2006-07 it change the normal increase issue of share. It increase extraordinary for the raise the fund for the develop the organization, it continuously the next year also but the changes happen in the 2008-09 for reduce the issue of share for need is not raise.
47
CHAPTER 3
FINDING AND CONCLUSIONS
3.1 Finding of the study
The study of financial performance of the TAMIL NADU STATE APEX CO-OPERATIVE BANK LIMITED is been examined in order to understand the financial healthiness of the concern. The present study is summarized in a detailed way, which helps for having a clear idea about the present position of the bank.
Share capital raised gradually 2004-09 for utilized the fund for development motive are increase the share capital point of view.
The Bank surplus is raising condition on the year 2004-06 but the year 2006-08 is reduced of the bank profit condition after that 2009 started increase the profit. Normally any institution is happen floating condition but have any reason for that floating.
The bank investment is reduced because the investment funds to contribute in the advances for provide loans to customers. Any institution is contribute excess money for various sector are get any gain.
Funds flow of the bank is increase gradually, so the institution are using the funds corrective path and constant way
48
3.2 Suggestions .
In bank, money call fund have excess in that fund to short term deposit for other bank. The money call if invest in the mutual fund and gain more from short term deposit.
The bank having depositor loan and jewel loan scheme, so the process is limited the bank increase more facilities to customer.
The Bank have owned funds in ideally, its to investment in any other sector are in share and debenture for earn income from the field and bank get some sources from share and debentures.
The bank can increase its share capital by permitting the urban cooperative bank apex institutions an cooperative sugar mills to became share holder
49
3.3 CONCLUSION
The project entitled “ A study on Financial Performance of the TAMIL NADU
STATE APEX CO-OPERATIVE BANK LIMITED is carried out with the help of
secondary data which were collected from the various report of the bank. The study was
aimed to analyze the Financial and operating efficiency of the bank during the year
based on 2005-2009.
50
BIBLIOGRAPHY
1. I.M.PANDEY, “Financial Management”, Vikas Publication, Ninth edition, year 2009.
2. PRASANNA CHANDRA,” Fundamental of Financial Management”, Tata Mc-Graw Hill, fifth edition, year 2004.
Websites:
www.headerp.com
www.Investopedia.com
www.moneycontrol.com
51
APPENDICES
Balance Sheet as on 31st march for five years
Particulars 2005 2006 2007 2008 2009
Liabilities
9. Share capital 40,94,70,000.00 53,47,60,000.00 247,94,20,000.00 443,75,10,000.00 635,09,10,000.00