SUMMER INTERSHIP IN Panjab National Bank

CHAPTER-1

INRODUCTION

A.)COMPANY PROFILEWith over 60 million satisfied customers and more than 5100 offices

including 5 overseas branches, PNB has continued to retain its leadership

position amongst 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; bullion business; life and non-life insurance; Gold coins & asset

management business, etc. PNB has earned many awards and accolades

during the year in appreciation of excellence in services, Corporate Social

Responsibility (CSR) practices, transparent governance structure, best use

of technology and good human resource management.

 Since its humble beginning in 1895 with the distinction of being the first

Swadeshi Bank to have been started with Indian capital, PNB has achieved

significant growth in business which at the end of March 2011 amounted to

Rs 5,55,005 crore. PNB is ranked as the 2nd largest bank in the country

after SBI in terms of branch network, business and many other parameters.

During the FY 2010-11, with 39.16% share of CASA to domestic deposits,

the Bank achieved a net profit of Rs 4433 crore. Bank has a strong capital

base with capital adequacy ratio of 12.42% as on Mar’11 as per Basel II

with Tier I and Tier II capital ratio at 8.44% and 3.98% respectively. As on

March’11, the Bank has the Gross and Net NPA ratio of 1.79% and 0.85%

respectively. During the FY 2010-11, its ratio of Priority Sector Credit to

Adjusted Net Bank Credit at 40.67% & Agriculture Credit to Adjusted Net

1

Bank Credit at 19.30% was also higher than the stipulated requirement of

40% & 18% respectively.

 The Bank has been able to maintain its stakeholders’ interest by posting an

improved NIM of 3.96% in Mar’11 (3.57% Mar’10). The Earning per

Share improved to Rs 140.60 (Rs 123.86 Mar’10) while the Book value per

share improved to Rs 661.20 (Rs 514.77 Mar’10). 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 of number of branches, Deposit, Advances,

total Business, Assets, Operating and Net profit in the year 2010-11. The

impressive operational and financial performance has been brought about

by Bank’s focus on customer based business with thrust on CASA

deposits, Retail, SME & Agri Advances and with more inclusive approach

to banking; better asset liability management; improved margin

management, thrust on recovery and increased efficiency in core operations

of the Bank.

B. HISTORY

Punjab National Bank was registered on 19 May 1894 under the Indian

Companies Act with its office in Anarkali Bazaar Lahore. The founding

board was drawn from different parts of India professing different faiths

and a varied back-ground with, however, the common objective of pro-

viding country with a truly national bank which would further the eco-

nomic interest of the country. 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. The board first met on 23 May 1894. Today, ironically the PNB

2

Website is distorting history by claiming Lala Lajpat Rai to be the found-

ing father, surpassing Rai Mul Raj and Dyal Singh Majithia.

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 Commercial Bank, was estab-

lished in 1881 in Faizabad, but failed in 1958).

PNB has had the privilege of maintaining accounts of national leaders

such as Mahatma Gandhi, Shri Jawahar Lal Nehru, Shri Lal Bahadur

Shastri, Shrimati Indira Gandhi, as well as the account of the fa-

mous Jalianwala Bagh Committee.

Punjab National Bank is currently the second largest state-owned com-

mercial bank in India ahead of Bank of Baroda with about 5000 branches

across 764 cities. It serves over 37 million customers. The bank has been

ranked 248th biggest bank in the world by the Bankers Almanac, London.

The bank's total assets for financial year 2007 were about US$60 billion.

PNB has a banking subsidiary in the UK, as well as branches in Hong

Kong, Dubai and Kabul, and representative offices in Al-

maty, Dubai, Oslo, and Shanghai.

C.ORGANIZATIONAL STRUCTURE

3

1. Board of DirectorsNAME POSITIONShri K.R.Kamath Chairman & Managing Director and Dy. Chairman

of Indian Banks AssociationShri Rakesh Sethi Executive directorSmt.Usha Anathasunramanian

Executive director

DIRECTORSShri Anurag Jain Govt. Of India nominee directorShri Jasbeer Singh Reserve bank of India nominee directorShri Vinod Kumar Mishra

Part time non official director

Shri Tribhuvan Nath Share holder directorShri Pardeep Kumar Office director

D) VISION AND MISSION:-

1. VISION

To be amongst most trusted power utility company of the country by

providing environment friendly power on most cost effective basis, ensur-

ing prosperity for its stakeholders and growth with human face.”

2. MISSION

To ensure most cost effective power for sustained growth of India.

To provide clean and green power for secured future of countrymen.

To retain leadership position of the organization in Hydro Power genera-

tion, while working with dedication and innovation in every project we

undertake.

To maintain continuous pursuit for cost effectiveness enhanced produc-

tivity for ensuring financial health of the organization, to take care of

stakeholders’ aspirations continuously.

4

To be a technology driven, transparent organization, ensuring dignity and

respect for its team members.

To inculcate value system all cross the organization for ensuring trust-

worthy relationship with its constituent associates & stakeholders.

To continuously upgrade & update knowledge & skill set of its human re-

sources.

To be socially responsible through community development by leverag-

ing resources and knowledge base. To achieve excellence in every activ-

ity we undertake.

E.ACHIEVEMENTS

1. PNB receives Best Bank Award 2011

2. Most Productive Public Sector Bank Award 2011

3. PNB Bags MSME National Awards

4. The Golden Peacock HR Excellence Award

5. Wind Power India 2011 Award

6. Pnb Awarded Best Technology Bank 2011

7. Outlook Money Award 2010

8. CSR Excellence Award

9. Skoch Challenge Award

10. India Pride Awards for excellence in PSU

F. Product and Services of Punjab National Bank

Since its inception, PNB Bank has offered a whole range of banking

products and services hardly compared by few others. An important

5

achievement of the bank is that all its branches are covered under Core

Banking Solution thereby enabling customers to get 'anytime anywhere'

banking facilities. Punjab National Bank also offers Internet Banking

facilities to core banking branch customers. The bank provides a wide

variety of products and services under personal banking, corporate

banking, social banking, NRI banking and business banking facilities.

Financial product and services made available are-:

Personal Banking

Savings Fund Account

Total Freedom Salary Account

Current Account

PNB Smart Roamer

Fixed Deposit Schemes

Recurring Deposit Scheme

Housing Loan

Car Loan

Personal Loan

Education Loan Scheme

Loan against Mortgage of Property

Privilege Card Scheme

Debit Card/ ATM Card

Credit Card

Social Banking

Krishi Card

Agriculture Credit Schemes

PNB Farmers Welfare Trust

Scheme for House Wife and Other Women

Mahila Udyam Nidhi Scheme

Corporate Banking

6

Loan against Future Lease Rentals

EXIM Finance

Cash Management Services

Gold Card Scheme for Exporters

G.Profits of Last Five Years

 particulars Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Income

operating income 29,804.40 24,524.78 21,907.42 15,925.65 12,104.24

Expenses

material consumed - - - - -

manufacturing expenses  - - - - -

personnel expenses 4,461.10 3,121.14 2,924.38 2,461.54 2,352.45

selling expenses 39.68 40.11 31.24 23.31 18.03

administrative expenses 3,611.34 2,377.28 1,880.13 1,247.47 1,360.77

expenses capitalised - - - - -

cost of sales 8,112.12 5,538.52 4,835.76 3,732.33 3,731.25

operating profit 6,513.14 6,042.24 4,776.35 3,462.46 2,350.09

other recurring income 644.16 436.59 553.00 231.62 186.67

adjusted pbdit 7,157.30 6,478.82 5,329.35 3,694.08 2,536.76

financial expenses 15,179.14 12,944.02 12,295.30 8,730.86 6,022.91

depreciation  255.85 222.83 191.06 170.23 194.80

other write offs - - - - -

adjusted PBT -8,277.69 6,256.00 -7,157.01 3,523.85 2,341.96

tax charges  2,130.23 1,999.43 1,676.04 1,247.15 629.05

adjusted pat 4,430.44 3,902.94 3,089.11 2,047.63 1,539.33

nonrecurring items 3.05 2.42 1.78 1.13 0.76

7

 particulars Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

other non cash adjustments - - - - -

reported net profit 4,433.50 3,905.36 3,090.88 2,048.76 1,540.08

earnings before appropriation 4,433.50 3,913.00 3,090.88 2,064.28 1,723.57

equity dividend 696.99 693.67 630.61 409.89 409.89

preference dividend - - - - -

dividend tax 113.07 116.43 107.17 69.66 63.11

H. Organizational Structure Of PNB

8

I. Competitors of PNB

9

DMD & GE (Rural Bus)

DMD & GE (Rural Bus)

DMD & GE (National Bkg)

DMD & GE (National Bkg)

L H Os (Circles)

Branches

DMD&GE (Corporate

Bkg)

DMD&GE (Corporate

Bkg)

DMD & GE(MC)

CGM (CorporateAccts..Group)

CGM (Stressed Asset. Mgmt.

Group)

GM (Project Finance

& Leasing)

Mid-CorporateRegion

Mid Corporate Branches

CAGBranches

SAMGBranches

DMD&GE(Global

Markets)

DMD&GE(Global

Markets)

Global and Domestic Treasury

DMD & GE(International

Banking)

DMD & GE(International

Banking)

Regional Head / Direct BranchesForeign Offices and Subsidiaries

DMD & GE(Associates&Subsidiaries)

DMD & GE(Associates&Subsidiaries)

Associates&Subsidiaries

Personal Bkg. Bus. Unit

Govt. Bus. Unit

SME Bus. Unit

Banking Operations

Marketing – Cross Selling

CHAIRMANCHAIRMAN

DMD & Corp.Devpt.OfficerDMD & Corp.Devpt.OfficerMD & Chief Credit & Risk OfficerMD & Chief Credit & Risk Officer

DMD (Corporate Strategy & New Businesses)DMD (Corporate Strategy & New Businesses)

GM (Corporate Communication & Change)GM (Corporate Communication & Change)

DMD &Chief Fin.OfficerDMD &Chief Fin.Officer

DMD (Info. Technology )DMD (Info. Technology )

DMD (Insp & Mgmt Audit)DMD (Insp & Mgmt Audit)

Chief Economic AdvisorChief Economic AdvisorChief Vigilance OfficerChief Vigilance Officer

Regional Office

Top 3 Competitors of Punjab National Bank are:1. STATE BANK OF INDIA2. ICICI3. CANARA BANK

1. STATE BANK OF INDIA

The State Bank of India (SBI) is the largest Indian banking and services

company (by turnover and total assets) with its headquarters in Mumbai,

India. It is state-owned. The bank traces its ancestry to British India,

through the Imperial Bank of India, to the founding in 1806 of the Bank

of Calcutta, making it the oldest commercial bank in the Indian. Bank of

Madras merged into the other two presidency banks, Bank of Calcutta

and Bank of Bombay to form Imperial Bank of India, which in turn be-

came State Bank of India. The government of India nationalized the Im-

perial Bank of India in 1955, with the Reserve Bank of India taking a

60% stake, and renamed it the State Bank of India. In 2008, the govern-

ment took over the stake held by the Reserve Bank of India.

2. ICICI

ICICI Bank Ltd. (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) is In-

dia's second largest financial services company headquartered in Mum-

bai, India. It offers a wide range of banking products and financial ser-

vices to corporate and retail customers through a variety of delivery chan-

nels and through its specialized subsidiaries in the areas of investment

banking, life and non-life insurance, venture capital and asset manage-

ment. The Bank has a network of 2,533 branches and 6,800 ATMs in In-

dia, and has a presence in 19 countries, including India.

The bank has subsidiaries in the United Kingdom, Russia, and Canada;

branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka,

Qatar and Dubai International Finance Centre; and representative offices

10

in United Arab Emirates, China, South Africa, Bangladesh, Thailand,

Malaysia and Indonesia. The company's UK subsidiary has established

branches in Belgium and Germany.

3. CANARA BANK

Canara Bank (BSE: 532483, NSE: CANBK) is a state-owned financial

services company in India. It was established in 1906, making it one of

the oldest banks in the country. As on 2009 November, the bank had a

network of 3057 branches, spread across India. The bank also has offices

abroad in London, Hong Kong, Moscow, Shanghai, Doha, and Dubai.

Ammembal Subba Rao Pai, a philanthropist, established the Canara

Hindu Permanent Fund in Mangalore, India, on 1 July 1906. The bank

changed its name to Canara Bank Limited in 1910 when it incorporated.

In 1958, the Reserve Bank of India ordered Canara Bank to acquire G.

Raghumathmul Bank, in Hyderabad. This bank had been established in

1870, and had converted to a limited company in 1925. At the time of the

acquisition G. Raghumathmul Bank had five branches.

The Government of India nationalized Canara Bank, along with 13 other

major commercial banks of India, on 19 July 1969.

J. SWOT ANALYSIS

STRENGTH WEAKNESS

11

OPPOURTUNITY THREATS

CHAPTER 2

FINANCIAL SERVICES

A. INSURANCE

12

1.  Diversified operations with 5100 branches2.  Strong I. T support with “best fit” approach3.  Schemes for small and medium scale businesses4. It is the second largest state-owned commercial bank in India with about 5000 branches across 764 cities

5. Its 56,000+ workforce serves over 37 million customers

1. Less penetration in the urban areas

2. Inadequate advertising and branding as compared to other banks3. Legal issues regarding employees caused a bad name of PNB

1. Small scale business banking across India

2.  Expansion in other countries for international banking

3. Installation of more ATM’s and better customer’s services

1.  Economic crisis and economic fluctuations

2.  Highly competitive environment

3. Stringent Banking Norms by the RBI and the Govts.

 Insurance is a form of risk management primarily used to hedge against

the risk of a contingent, uncertain loss. Insurance is defined as the equi-

table transfer of the risk of a loss, from one entity to another, in exchange

for payment. An insurer is a company selling the insurance; an insured, or

policyholder, is the person or entity buying the insurance policy. The in-

surance rate is a factor used to determine the amount to be charged for a

certain amount of insurance coverage, called the premium. Risk manage-

ment, the practice of appraising and controlling risk, has evolved as a dis-

crete field of study and practice.

The transaction involves the insured assuming a guaranteed and known

relatively small loss in the form of payment to the insurer in exchange for

the insurer's promise to compensate (indemnify) the insured in the case of

a financial (personal) loss. The insured receives a contract, called the in-

surance policy, which details the conditions and circumstances under

which the insured will be financially compensated.

A.1 TYPES OF INSURANCE

Any risk that can be quantified can potentially be insured. Specific kinds

of risk that may give rise to claims are known as perils. An insurance pol-

icy will set out in detail which perils are covered by the policy and which

is not. Below are non-exhaustive lists of the many different types of in-

surance that exist. A single policy may cover risks in one or more of the

categories set out below. For example, vehicle insurance would typically

cover both the property risk (theft or damage to the vehicle) and the lia-

bility risk (legal claims arising from an accident). A home insurance pol-

icy in the US typically includes coverage for damage to the home and the

owner's belongings, certain legal claims against the owner, and even a

small amount of coverage for medical expenses of guests who are injured

on the owner's property.

13

Business insurance can take a number of different forms, such as the vari-

ous kinds of professional liability insurance, also called professional in-

demnity (PI), which are discussed below under that name; and the busi-

ness owner's policy (BOP), which packages into one policy many of the

kinds of coverage that a business owner needs, in a way analogous to how

homeowners' insurance packages the coverage’s that a homeowner needs.

A.2 VEHICAL INSURANCE

Vehicle insurance (also known as auto insurance, gap insurance, car in-

surance, or motor insurance) is insurance purchased for cars, trucks, mo-

torcycles, and other road vehicles. Its primary use is to provide financial

protection against physical damage and/or bodily injury resulting

from traffic collisions and against liability that could also arise there

from. The specific terms of vehicle insurance vary with legal regula-

tions in each region.

Auto Insurance in India deals with the insurance covers for the loss or

damage caused to the automobile or its parts due to natural and man-

made calamities. It provides accident cover for individual owners of the

vehicle while driving and also for passengers and third party legal liabil-

ity. There are certain general insurance companies who also offer online

insurance service for the vehicle.

Auto Insurance in India is a compulsory requirement for all new vehicles

used whether for commercial or personal use. The insurance companies

have tie-ups with leading automobile manufacturers. They offer their cus-

tomers instant auto quotes. Auto premium is determined by a number of

factors and the amount of premium increases with the rise in the price of

the vehicle. The claims of the Auto Insurance in India can be accidental,

theft claims or third party claims. Certain documents are required for

claiming Auto Insurance in India, like duly signed claim form, RC copy

14

of the vehicle, Driving license copy, FIR copy, Original estimate and pol-

icy copy.

There are different types of Auto Insurance in India:

1. Private Car Insurance - In the Auto Insurance in India, Private

Car Insurance is the fastest growing sector as it is compulsory for all the

new cars. The amount of premium depends on the make and value of the

car, state where the car is registered and the year of manufacture.

2. Two Wheeler Insurance - The Two Wheeler Insurance under the

Auto Insurance in India covers accidental insurance for the drivers of the

vehicle. The amount of premium depends on the current showroom price

multiplied by the depreciation rate fixed by the Tariff Advisory Commit-

tee at the time of the beginning of policy period.

A.3 Commercial Vehicle Insurance - Commercial Vehicle Insur-

ance under the Auto Insurance in India provides cover for all the vehicles

which are not used for personal purposes, like the Trucks and HMVs. The

amount of premium depends on the showroom price of the vehicle at the

commencement of the insurance period, make of the vehicle and the place

of registration of the vehicle. The auto insurance generally includes:

Loss or damage by accident, fire, lightning, self ignition, external explo-

sion, burglary, housebreaking or theft, malicious act, Liability for third

party injury/death, third party property and liability to paid driver on pay-

ment of appropriate additional premium, loss/damage to electrical/elec-

tronic accessories the auto insurance does not include:

1).Consequential loss, depreciation, mechanical and electrical breakdown,

failure or breakage

2).When vehicle is used outside the geographical area

3).War or nuclear perils and drunken driving

15

B. Home Insurance

Home insurance provides coverage for damage or destruction of the poli-

cyholder's home. In some geographical areas, the policy may exclude cer-

tain types of risks, such as flood or earthquake that require additional

coverage. Maintenance-related issues are typically the homeowner's re-

sponsibility. The policy may include inventory, or this can be bought as a

separate policy, especially for people who rent housing. In some coun-

tries, insurers offer a package which may include liability and legal re-

sponsibility for injuries and property damage caused by members of the

household, including pets.

C. Health Insurance

Health insurance is insurance against the risk of incurring medical ex-

penses among individuals. By estimating the overall risk of care expenses

among a targeted group, an insurer can develop a routine finance struc-

ture, such as a monthly premium or payroll tax, to ensure that money is

available to pay for the health care benefits specified in the insurance

agreement. The benefit is administered by a central organization such as a

government agency, private business, or not-for-profit entity.

A health insurance policy is:

1) A contract between an insurance provider (e.g. an insurance company

or a government) and an individual or his sponsor (e.g. an employer or a

community organization). The contract can be renewable (e.g. annually,

monthly) or lifelong in the case of private insurance, or be mandatory for

all citizens in the case of national plans. The type and amount of health

care costs that will be covered by the health insurance provider are speci-

fied in writing, in a member contract or "Evidence of Coverage" booklet

for private insurance, or in a national health policy for public insurance.

16

2) Insurance coverage is provided by an employer-sponsored self-funded

ERISA plan. The company generally advertises that they have one of the

big insurance companies. However, in an ERISA case, that insurance

company "doesn't engage in the act of insurance", they just administer it.

Therefore ERISA plans are not subject to state laws. ERISA plans are

governed by federal law under the jurisdiction of the US Department of

Labor (USDOL). The specific benefits or coverage details are found in

the Summary Plan Description (SPD). An appeal must go through the in-

surance company, then to the Employer's Plan Fiduciary. If still required,

the Fiduciary’s decision can be brought to the USDOL to review for

ERISA compliance, and then file a lawsuit in federal court.

D. Life insurance

Life insurance provides a monetary benefit to a decedent's family or other

designated beneficiary, and may specifically provide for income to an in-

sured person's family, burial, funeral and other final expenses. Life insur-

ance policies often allow the option of having the proceeds paid to the

beneficiary either in a lump sum cash payment or an annuity.

Annuities provide a stream of payments and are generally classified as in-

surance because they are issued by insurance companies, are regulated as

insurance, and require the same kinds of actuarial and investment man-

agement expertise that life insurance requires. Annuities and pen-

sions that pay a benefit for life are sometimes regarded as insurance

against the possibility that a retiree will outlive his or her financial re-

sources. In that sense, they are the complement of life insurance and,

from an underwriting perspective, are the mirror image of life insurance.

Certain life insurance contracts accumulate cash values, which may be

taken by the insured if the policy is surrendered or which may be bor-

rowed against. Some policies, such as annuities and endowment policies,

17

are financial instruments to accumulate or liquidate wealth when it is

needed.

E. Property Insurance

Property insurance provides protection against most risks to property,

such as fire, theft and some weather damage. This includes specialized

forms of insurance such as fire insurance, flood insurance, earthquake in-

surance, home insurance or boiler insurance. Property is insured in two

main ways:

Open perils and named perils. Open perils cover all the causes of loss not

specifically excluded in the policy. Common exclusions on open peril

policies include damage resulting from earthquakes, floods, nuclear inci-

dents, acts of terrorism and war. Named perils require the actual cause of

loss to be listed in the policy for insurance to be provided. The more com-

mon named perils include such damage-causing events as fire, lightning,

explosion and theft.

F.MUTUAL FUNDS

A mutual fund is a professionally managed type of collective investment

scheme that pools money from many investors to buy stocks, bonds,

short-term money market instruments, and/or other securities

F.1 TYPES OF MUTUAL FUNDS

There are three basic types of registered investment companies defined in

the Investment Company Act of 1940: open-end funds, unit investment

trusts, and closed-end funds. Exchange-traded funds are open-end funds

or unit investment trusts that trade on an exchange.

18

1. OPEN-END FUNDS

Open-end mutual funds must be willing to buy back their shares from

their investors at the end of every business day at the net asset value com-

puted that day. Most open-end funds also sell shares to the public every

business day; these shares are also priced at net asset value. A profes-

sional investment manager oversees the portfolio, buying and selling se-

curities as appropriate. The total investment in the fund will vary based

on share purchases, share redemptions and fluctuation in market valua-

tion. There is no legal limit on the number of shares that can be issued.

2. CLOSED-END FUNDS

Closed-end funds generally issue shares to the public only once, when

they are created through an initial public offering. Their shares are then

listed for trading on a stock exchange. Investors who no longer wish to

invest in the fund cannot sell their shares back to the fund (as they can

with an open-end fund). Instead, they must sell their shares to another in-

vestor in the market; the price they receive may be significantly different

from net asset value. It may be at a "premium" to net asset value (mean-

ing that it is higher than net asset value) or, more commonly, at a "dis-

count" to net asset value (meaning that it is lower than net asset value). A

professional investment manager oversees the portfolio, buying and sell-

ing securities as appropriate.

G. UNIT INVESTMENT TRUSTS

Unit investment trusts or UITs issue shares to the public only once, when

they are created. Investors can redeem shares directly with the fund (as

with an open-end fund) or they may also be able to sell their shares in the

market. Unit investment trusts do not have a professional investment

manager. Their portfolio of securities is established at the creation of the

19

UIT and does not change. UITs generally have a limited life span, estab-

lished at creation.

H.EXCHANGE-TRADED FUNDS

A relatively recent innovation, the exchange-traded fund or ETF is often

structured as an open-end investment company, though ETFs may also be

structured as unit investment trusts, partnerships, investments trust,

grantor trusts or bonds (as an exchange-traded note). ETFs combine char-

acteristics of both closed-end funds and open-end funds. Like closed-end

funds, ETFs are traded throughout the day on a stock exchange at a price

determined by the market. However, as with open-end funds, investors

normally receive a price that is close to net asset value. To keep the mar-

ket price close to net asset value, ETFs issue and redeem large blocks of

their shares with institutional investors.

H.1 Advantages of mutual fundsMutual funds have advantages compared to direct investing in individual

securities. These include:

Increased diversification

Daily liquidity

Professional investment management

Ability to participate in investments that may be available only to lar-

ger investors

Service and convenience

Government oversight

Ease of comparison

H.2 Disadvantages of mutual fundsMutual funds have disadvantages as well, which include:

Fees

20

Less control over timing of recognition of gains Less predictable income No opportunity to customize

I.MERCHANT BANKING

The history of merchant bank can be dated back to 17 th & 18th centuries

when it first started in Italy & France. This was started by the Italian

grain merchants. It comprised of merchant bankers who intermediated or

assisted in financing the transactions of other traders and their own trade

too. With the passage of time the practices in evolved and the merchant

banking in the modern era started from London where the merchants

started to finance the foreign trade through acceptance of bill. Later they

extended their services to the governments of under developed countries

to raise the long term funds through the floatation of bonds in the London

money market. Over the period they extended their services to loan syndi-

cation, underwriting the issues, portfolio management etc. The post war

period witnessed huge increase in the merchant banking activities.

I.1 Merchant Banking in IndiaMerchant banking activity was officially commenced into the Indian cap-

ital Markets when Grind lays bank received the license from reserve bank

in 1967. Grind lays started its operations with management of capital is-

sues, recognized the requirements of upcoming class of Entrepreneurs for

diverse financial services ranging from production planning and system

design to market research. Apart from this it also provides management

consulting services to meet the Requirements of small and medium sector

rather than large sector.

  Citibank Setup its merchant banking division in Indian in 1970.

21

Indian banks Started banking Services from 1972.

State bank of India started the merchant banking division in 1972

After that there were many banks which set up the merchant bank divi-

sion such as;

ICICI

Bank of India

Bank of Baroda

Canara Bank

Punjab National Bank

UCO Bank

The Merchant Bank got more importance in the year 1983 when there

was a huge boom in the primary market where the companies were going

for new issue. Merchant banking activities are organized and undertaken

in several forms. Commercial banks and foreign development finance in-

stitutions have organized them through formation divisions, nationalized

banks have formed subsidiary companies, share brokers and consultan-

cies constituted themselves into public limited companies or registered

themselves as private limited Companies. Some merchant banking com-

panies have entered into collaboration with merchant bankers of foreign

countries abroad with several branches.

I.2 SERVICES PROVIDED BY MERCHANT BANKS:

Project Counseling

Management of debt and equity offerings

Issue Management

Managers, Consultants or Advisers to the Issue

Underwriting of Public Issue

Portfolio Management

Restructuring strategies

22

Off Shore Finance

Non-resident Investment

Loan Syndication

Corporate Counseling and advisory services

Placement and distribution

J. WEALTH MANAGEMENT

Wealth management is an investment advisory discipline that incorpor-

ates financial planning, investment portfolio management and a number

of aggregated financial services. High Net Worth Individuals (HN-

WIs), small business owners and families who desire the assistance of a

credentialed financial advisory specialist call upon wealth managers to

coordinate retail banking, estate planning, legal resources, tax profession-

als and investment management. 

CHAPTER 3

REVENUE GENERATION AT PNB

A. INSURANCE

Punjab national bank has taken number of initiatives for the benefits of its

invaluable customers and has virtually become one stop shop for various

financial product and services.

 For Life-Insurance solutions of bank’s customers, the Bank has made

23

Bank assurance Tie-up with leading Public Sector Undertaking “Life In-

surance Corporation of India”, which has varieties of products suitable

for people of all income groups and segments of society.

LIC of India has endeavored to ensure & enhance the quality of life of

people through financial security by providing products and services of

aspired attributes with competitive return. To achieve its mission and

goals, it has launched varieties of products. Bouquet of Popular products

of LIC of India includes:

•          Investment Plans

–         Bima Bachat

–         Endowment plus

•          Pension Plans

–         Pension Plus

–         Jeevan Akshay VI

•          Children Plans

–         Jeevan Tarang

–         Komal Jeevan

–         Child Fortune Plus

•          Insurance cum Investment Plans

–         Jeevan Anand

–         Jeevan Saral

•          Exclusive products for Females

–         Jeevan Bharati

•          Health Insurance Plans

-          Health Protection ------- & many more.

B. NON LIFE INSURANCE

24

 The Bank has made Banc assurance Tie-up with Oriental Insurance Co. Ltd.

(OICL), a Public Sector Undertaking, which offers variety of products e.g. Fire

Insurance, Motor Vehicle Insurance, Marine Insurance & Misc. Insurance

Policies like Shop-keepers’ Policy; Theft/Burglary Policy; Fidelity Guarantee

Policy; Personal Accident Policy, Health Insurance Policy; Overseas Travel

Insurance Policy, House Hold Goods Policy etc. at a competitive price with

assured post sale services.

B.1 Health Insurance

The Product has been got designed exclusively for PNB Customers and only the

A/c Holders of PNB will be eligible to take cover under the Scheme.

The product available in all PNB Branches across the country. 

B.2 Vehicle Insurance                                              SPECIAL DISCOUNT FOR PNB CUSTOMERS

 For Private Cars:

 40 % discount on Indian Motor Tariff 2002 rates.

 For Commercial Vehicles:

 30% discount on Indian Motor Tariff 2002 rates. 

B.3 OTHER POPULAR PRODUCTS:

Personal Accident - Individual

Householders Insurance Policy

Overseas Medical Employment and Study

25

Shopkeeper's Insurance Policy

Kissan Package Insurance

Nagrik Suraksha Policy

Electronic Equipment Insurance Policy

C. MUTUAL FUNDS

C.1 AN OPPOURTUNITY TO ACHIEVE OUR FINANCIAL GOALS

In an endeavour to enlarge the range of services available to our

customers, PNB has been distributing the products of Principal PNB

Asset Management Company Pvt. Ltd. from its designated branches since

July

To provide variety of Mutual Fund Products to its customers, Now the Bank

has also started the Distribution & Marketing of UTI Mutual Fund Products.

In recent times Mutual funds have gained rapid popularity as a good

investment vehicle and public at large is attracted towards MF investment,

which has variety of schemes and income options offered by Mutual Funds

which can suit the financial preferences of all classes of investors, be it

Retail, retail corporate or institutional. The following benefits, intrinsic to

investments in Mutual Funds have inspired greater confidence amongst

the investors :- 

Transparency

Efficient

Liquidity

Convenience

Tax benefits

C.2 Range of schemes:

Mutual Funds offer schemes keeping in view the risk profile and risk-return

preferences of investors. For an aggressive investor with appetite for risk,

26

Equity oriented schemes are available which have a higher potential for

capital appreciation. For a conservative investor with expectations of stable

returns and low risk, Income Schemes are available.

To suit various type of requirements of the investors, some of the schemes

of Principal PNB AMC & UTI AMC are as under:

1. Principal Growth Scheme:

Open-ended equity fund with an investment portfolio of stocks diversified

across different sectors of the economy.

2. Principal balanced Fund:

Open ended fund with an equity (diversified) component of 51% to 70%

and Debt component (including Money Market) 30% to 49%.

3.Principal Income Fund:

Open-ended fund with up to 100% investment in Debt instruments

(including Money Market instruments and securitized debt)

4.Principal Income Fund – Short Term Plan:

The scheme is meant for investors seeking stable returns over shorter-term

investment horizons compared to the Principal Income Fund.

5. Principal Cash management Fund:

An Open-ended fund that invests 100% of its corpus in Money Market

instruments and seeks to provide an excellent avenue to park very short term

cash surpluses and earn returns linked to the call money market rates.

6. Principal Index Fund:

An Open-ended fund that tracks S&P CNX Nifty (NSE) closely. The aim of

the fund is to provide its investors returns commensurate with the Nifty.

7. Principal Large Cap Fund:

An open-ended scheme to invest in the stocks of the companies having a

large market capitalization. The fund is suitable for investors interested in

long term capital appreciation.

27

8. Principal Child Benefit Fund

The scheme is suitable for an investor seeking long-term growth and

accumulation of capital for the beneficiary.

The objective of the scheme is to generate regular returns and/or capital

appreciation / accretion with the aim of giving lump sum capital growth at

the end of the chosen target period or otherwise to the Beneficiary.

9. Principal Global Opportunities Fund

It is an open-ended growth fund. The fund is suitable for investors who

would like to diversify investments into other markets / securities by taking

advantage of the potential growth in the global markets and thereby reduce

the risk of having a portfolio predominantly invested in India.

The investment objective of the scheme is to build a high quality.

International Equity portfolio out of the permissible investments as defined

and permitted under the regulations from time to time and provides returns

and/or capital appreciation along with regular liquidity to the investors.

10. Principal Infrastructure & Service Sector Fund:

An open-ended Equity Scheme with an objective to provide capital

appreciation and income distribution by investing predominantly in

Equity/Equity related instruments of Infrastructure & Service Sector

companies.

Principal Tax Savings Fund:

An open-ended Equity linked savings scheme suitable for investors seeking

income tax deductions under section 80C (2) of Income Tax Act along with

long-term equity-market returns from investment in equities.

11. Principal Personal Tax Saver Fund:

The scheme is suitable for investors seeking income tax deductions under

section 80C (2) of ITA along with long term equity-market returns from

investment in equities.

28

12. Principal Monthly Income Plan:

An open-ended income scheme having periodical distribution with no

assured monthly returns. MIP attempts to provide income on a monthly

basis and is, therefore, particularly suited for investors seeking regular

source of income.

D. UTI MUTUAL FUND:

D.1 UTI Infrastructure Fund:

(Formerly known as UTI-BASIC INDUSTRIES FUND)

An open ended equity fund with the objective to provide Capital

appreciation through investing in the stocks of the companies engaged in the

sectors like Metals, Building Materials, Oil & Gas, Power, Chemicals,

Engg. Etc.

D.2 UTI Mid Cap Fund:

An open ended equity fund with the objective to provide ‘Capital

appreciation’ by investing primarily in Mid Cap stocks.

D.3 UTI Large Cap Fund:

An open ended equity Fund with the objective to provide capital

appreciation through investment in top 50 companies in terms of market

capitalization.

D.4 UTI Services Sector Fund:

An open-ended fund which invests in the equities of the Services Sector

companies of the country. One of the growth sector funds aiming to provide

growth of capital over a period of time as well as to make income

distribution by investing the funds in stocks of companies engaged in

service sector such as banking, finance, insurance, education, training,

telecom, travel, entertainment, hotels, etc.

29

D.5 UTI Leadership Equity Fund:

The scheme seeks to generate capital appreciation and / or income

distribution by investing the funds in stocks that are “Leader” in their

respective industries /sectors / sub-sector.

D.6 UTI Dividend Yield Fund:

An open-ended equity scheme. It aims to provide medium to long term

capital gains and/or dividend distribution by investing predominantly in

equity and equity related instruments which offer high dividend yield.

D.7 UTI Index Select Fund:

An open-ended equity fund with the objective to invest in select stocks of

the BSE Sensex and the S&P CNX Nifty. The fund does not replicate any of

the indices but aims to attain performance better than the performance of the

indices.

D.8 UTI Equity Fund:

UTI Equity Fund is open-ended equity scheme with an objective of

investing at least 80% of its funds in equity and equity related instrument

with medium to high risk profile and up to 20% in debt and money market

instruments with low to medium risk profile.

D.9 UTI Children’s Career Plan (Balanced):

An open-ended debt oriented fund with investment in Debt/G-sec of

minimum 60% and a maximum of 40% in Equity. Investment can be made

in the name of the children up to the age of 15 years so as to provide them,

after they attain the age of 18 years, a means to receive scholarship to meet

the cost of higher education and/or to help them in setting up a profession,

practice or business or enabling them to set up home or finance the cost of

other social obligation.

E.MERCHANT BANKING

Merchant banking primarily involves financial advice and services for large

30

corporations and wealthy individuals.

 E.1 MERCHANT BANKING ACTIVITIES:

The Major Merchant Banking activities which the Bank offers to its clients

are:

Issue Management - Management of Public Issues i.e. IPOs, FPOs, Right

Issues, etc. as Book Running Lead Manager

Bankers to the Issue

Payment of Dividend Warrants / Interest Warrants / Refund Orders

Debenture Trustee

Underwriting

Monitoring Agency

 Besides promoting / marketing the above Merchant Banking Business in

the Bank through specialized Capital Market Services Branches, Merchant

Banking Cells and identified branches, the Merchant Banking Division also

looks after the following activities:

Marketing of Merchant Banking Business

Monitoring / Supporting Capital Market Service Branches

Refund Paid / Payable 

E.2 MERCHANT BANKERS ASSIGNMENTS:

At present, the Bank is holding following Licenses from SEBI:

Merchant Banker

Banker to the Issue

Underwriting

Debenture Trustee 

1. Bankers to the Issue (Collecting Banker):

Being a licensed Banker to Issue registered with SEBI, enables us to provide

Escrow Collecting Bank/services and refund Bank services related to Initial

Public Offering (IPO), Follow on Public Offering (FPO) and Right Issue.

31

The process of collections needs a high degree of close co-ordination

between various capital market intermediaries such as the Book Running

Lead Manager, the Syndicate Members, the Registrar and most importantly

the issuer Company.  Our large network of branches and strong bonds with

various capital market constituents enable us to offer better solutions for

clients. 

2. Payment Of Dividend Warrants / Interest Warrants (Paying

Banker):

The Merchant Banking Division has also got enabled a functionality of a

new system in CBS branches for payment assignments, which is similar to

Demand Draft Payable Account under Finical. The product has the

following unique features that ensure that the payment account of the

corporate remains reconciled at any point of time:

Facility to provide MIS on paid / outstanding instruments in ASCII format,

which can be suitably converted by the corporate for updating their in-house

database

This new facility will help in solving the major problem in handling these

assignments i.e. reconciliation of accounts. This will also help in reducing

the cost of reconciliation, postage and handling cost.

3. Payment of Refund Orders:

The detailed guidelines / procedures to be followed. Powers of the Branches

/ Charges etc. For handling the assignments of Bankers to the Issue/

Payment of Dividend warrants / Refund Orders etc. are available in the

circulars of the Division at the Bank’s website.

4.UNDERWRITING

Underwriting is a contingent liability and this is one sphere of Merchant

banking where outlay of funds on the part of the bank may be involved. As

such, it is necessary to be very careful in accepting / recommending such

32

business. Proposals that pose clear risk of devolvement should be declined

at the outset unless there is sub underwriting tie up directly or indirectly

with promoters and their related investment companies or a firm

commitment of buy back on reasonable terms. 

 Major aspects which need close scrutiny before underwriting can be

considered are the project and its viability, project location, promoters and

their track record, product and its marketability, past performance of

existing companies in the same line, Government Policy, projected financial

performance, capital market conditions, underwriting / sub underwriting /

buy back arrangements, etc.

5. Debenture Trustee:

In terms of SEBI guidelines, all debenture issues (public rights) of the

companies with the maturity period exceeding 18 months are required to

have "Debenture Trustee" and its name must be stated in the prospectus of

the issue. 

The necessity of creation of debenture trust is to organize the large number

of debenture holders and facilitate interaction by the companies issuing

debentures with a single entity rather than individual debenture holders.

Merchant Bankers (holding valid Registration with SEBI as debenture

trustee) act as Trustees for the debenture holders to accept security created

by the company, to secure the repayment of principal and payment of

interest thereon, taking action for safeguarding their interest and enforcing

their rights in times of needs.

As per SEBI guidelines lenders cannot act as Trustees to debentures/bond

the issues of the Companies who are their borrowers. Therefore, branches of

the Bank must not obtain 'Debenture Trustee' assignments of the

parties/companies which are availing Credit facilities from our Bank.

 6. Monitoring Agency:

33

 In terms of SEBI (DIP) guidelines, the Company issuing the shares to

public shall make arrangements for the use of proceeds of the issue to be

monitored by one of the financial institutions, in case of issues, which

exceed Rs.500 crores. 

Though, in terms of SEBI guidelines, it is mandatory for the issuers to

appoint 'Monitoring Agency' if the issue size is more than Rs.500 crores, on

the insistence of Merchant Bankers and Stock exchanges, the issuers of

issues of less than Rs. 500 crores are also appointing monitoring agency.

Utmost attention is required for monitoring the proceeds, submission of

statement as per SEBI guidelines to the company reporting of defaults etc.

after acceptance of the assignment.

F. WEALTH MANAGEMENT SERVICES

In the present scenario, investors are looking for higher Returns. There are

many avenues available in the market to invest, however to choose a right

investment portfolio is an uphill task that requires great professionalism and

continuous monitoring of investments, in view of the complex nature of the

capital market. Wealth management is an unmatched package of products

and services that provides personalized financial planning, the luxury of

investment services and a host of exclusive privileges of building wealth

and securing future. It is with this perspective that Punjab National Bank has

launched the wealth management services.

This is a stride towards PNB’s endeavor to give to its customers an “End to

End” solution for all their financial needs under one roof. Under the Wealth

Management services, we shall give expert advice on the following areas:

1. Mutual fund investment

2. Debt Market instruments

3. Insurance services

4. Tax/Retirement planning

34

5. On line trading

6. Real estate

CHAPTER 4

RESEARCH METHODLOGY

Research methodology is a way to systematically solve the research problem.

Research methodology constitutes of research methods, selection criterion of

research methods, used in context of research study and explanation of using

of a particular method or technique so that research results are capable of

being evaluated either by researcher himself or by others. Why a research

study has been undertaken, how the research problem has been formulated,

why data have been collected and what particular technique of analyzing

35

data has been used and a best of similar other question are usually answered

when we talk of Research methodology concerning a research problem or

study. The main aim of research is to find out the truth which is hidden and

which has not been discovered as yet.

Four types of studies can be called research, namely reporting, description,

explanation and prediction. Cooper and Emory define research as the systematic

inquiry aimed at providing information to solve problems.

Research Process:

Choosing the research problem Review of related literature Collection of data Interpretation of data Preparing the research report

1. OBJECTIVES

In this age of business and globalization finance plays the pivotal role.

Today when it’s the spread of monetary transaction which makes the world go round we feel the need to Study the function more closely, as to how the money transaction is effected and the transaction being speeded. Thus our aim is to:

Spreading and gaining awareness about the sources of revenue to banking industries.

Getting information about manner in which the bank collects its revenue.

DATA COLLECTION

Primary data source:

1. Through interview with consultants

2. Through filling forms

Secondary data source:

1. Through web

36

LIMITATIONS OF THE STUDY

Following limitations were faced during the study:

1. While designing the questionnaire it was kept in mind to gather more and

more information from each target person. For neither present nor

descriptive questions could have served the purpose. Therefore the questionnaire

contained in the open-ended questions.

2. The study was conducted in Gohana. The consultants only so that accuracy

of data so collected could be absurd covered by circulation of questionnaire.

3. The accuracy of indications given by the respondents may not be

consider adequate as whether the language used in the questionnaire is

understood by the respondent cannot be taken for granted.

4. The study is based on the information gathered from the care

consultants. Therefore in such case it is possible that the information

supplied might be biased because the insurance care consultant might have

shown partiality towards their insurance policies.

5. Since the survey was limited to care consultants it is rather difficult to give

a precise conclusion but I have tried to the best of my capability to give the

conclusion on a comprehensive manner.

37

CHAPTER 5

FINDINGS AND ANALYSIS Target group PNB gets its largest amount of funds

Towns

Cities

Over seas

Chart no.1 % collection from target Groups

INTERPRETATION According to study 64% of funds comes from cities

20% of funds come from towns and 11% from overseas.

38

Quality of service to increase funds improving or Deteriorating

CHART NO 2 QUALITY OF SERVICES

2007

2008

2009

2010

0 1 2 3 4 5 6 7 8

INTERPRETATION An above chart shows that the quality of services has

increased in last few years. In 2007 it was 2.5 and the quality of services increase

to 7 in year 2010.

Measures to increase revenue

Chart no.3 Measures of funds

online advertisement

tv and radio advertisement

INTERPRETATION As a chart shown above, It shows that how bank takes proper

measures to improve its funds.1. Through online advertisement and 2. Through radio and TV

advertisement.80% through online advertisement and rest 20% through TV and radio

advertisement.

Appropriate rate of interest on its funds

Chart no.4 Appropriate rate of interest

39

YES NO MAY BE0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

INTERPRETATION According to study 70% people say yes Punjab national bank

provides appropriate rate of interest on it funds. 10% people say no and 20% says may be.

Banking activity does PNB gets its largest sources of fundsAgricultural banking

Corporate banking

International banking

Personal

Social

CHART NO. 5 LARGEST SOURCE OF FUNDS

Agricutural bankingCorporate bankingInternatinal banking Personal banking Social banking0

1

2

3

4

5

6

7

Most issued fixed deposit scheme

1.777 days

2.1111 days

3.555 and 1000 days

40

Chart no. 6 Most issued fixed deposit

777 days1111 days555 and 1000 days

INTERPRETATION According to study 60% of people issue 1111 days of fixed deposit

and 10% 777 days fixed deposit and 30% issue 555 to 1000 days fixed deposit.

Proper security to the mortgage property

Chart no. 7 proper security to mortgage property

YES NO MAY BE0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

41

CHAPTER 6

CONCLUSION & RECOMMADATION

It was enriching experience working in Punjab national bank for the period of

two months. What I learnt during this time and by completing this project can be

summarized as follows:

1. Working at Punjab national bank helped me not only academically but also

practically. It helped me a lot to understand the finance part very easily.

2. I have come to know the importance of finance especially with regard to

sources of finance on most renowned bank Punjab national bank. Especially

because of emergence of many competitor with excellence in services &

competitive product. The base of this chapter conclusion is on the data analysis

or what we say findings.

3. I have findings from the consultants of Punjab national bank and their services in my

topic.

4. Through this I have come to know the how to attract consumers to gain sources

42

funds and services provided by Punjab national bank to attract its consumers.

5. The consultants also said that all income and age group of customers are

attracted towards their product but buyers are mainly from higher and middle-

income group. consultants said that the customer are curious in getting

Policies because they want more discounting on the products and low claim time

after any accident.

RECOMMENDATIONS

The lack of good communication skills and training. So training should be

easy.

PNB Should use new techniques of sales promotion.

People must be made aware of the benefits of the policies

The company should give personal attention to each customer.

The details about the company should be given to the customers.

Regular advertisement of the company should be given TV and Newspaper

The company must try to find new markets especially in the rural areas.

The company should do frequent analysis of the competitor

43

REFERENCES

BOOKS:

An Insider's Guide to the Industry by Michel Fleuriet

An Introduction to Investment Banks, Hedge Funds, and Private Equity:

The New Paradigm by David Stowell

The Investment banking handbook By John Peter Williamson

WEBSITE:

www. pnb india.in/

www.net pnb .com/

www.moneycontrol.com 

44

QUESTIONNAIRE

Name: ___________________________________________

Contact number: ___________________________________________

Name of the firm: ___________________________________________

Location: ___________________________________________

Q.1 From which target group PNB gets its largest amount of funds? Towns Cities Over seas

Q.2 Is the quality of service to increase funds improving or Deteriorating? Improving/Stable/Deteriorating*

Q.3 Do you think the bank is providing appropriate rate of interest on its funds. Yes no

Q.4 From which banking activity does pnb gets its largest sources of funds? Agricultural banking Corporate banking

45

International banking Personal Social

Q.5 According to you which is the most issued fixed deposit schemes. 777 days 1111 days 555 and 1000 days

Q.6 Do you think bank provides proper security to the mortgage property? Yes no

PROFIT&LOSS A/C FOR THE YEAR 2010 -2011

Particulars March 11 March 10

Sales Turnover 103.21 101.73Other Income -- --Total Income 103.21 101.73Total Expenses 6.69 10.67Operating Profit 96.52 91.06Profit On Sale Of Assets -- --Profit On Sale Of Investments -- --Gain/Loss On Foreign Exchange -- --VRS Adjustment -- --Other Extraordinary Income/Ex-penses

-- --

Total Extraordinary Income/Ex-penses

-- --

Tax On Extraordinary Items -- --Net Extra Ordinary Income/Ex-penses

-- --

Gross Profit 96.52 91.06Interest 51.57 34.57PBDT 44.96 56.50Depreciation 0.91 0.46Depreciation On Revaluation Of Assets

-- --

PBT 44.05 56.04Tax 13.47 19.33Net Profit 30.58 36.71Prior Years Income/Expenses -- --

46

Depreciation for Previous Years Written Back/ Provided

-- --

Dividend -- --Dividend Tax -- --Dividend (%) -- --Earnings Per Share 2.26 2.72Book Value -- --Equity 135.01 135.01Reserves 437.28 425.59Face Value 10.00 10.00

BALANCE SHEET FOR 2010-2011

Sources Of Funds

Total Share Capital 135.01 135.01

Equity Share Capital 135.01 135.01

Share Application Money 0.00 0.00

Preference Share Capital 0.00 0.00

Reserves 437.28 425.59

Revaluation Reserves 0.00 0.00

Net worth 572.29 560.60

Secured Loans 643.55 281.94

Unsecured Loans 211.10 465.00

Total Debt 854.65 746.94

Total Liabilities 1,426.94 1,307.54

Mar '11 Mar '10

12 mths 12 mthsApplication Of FundsGross Block 12.91 12.16

Less: Accum. Depreciation 7.48 7.19Net Block 5.43 4.97

Capital Work in Progress 0.00 0.00Investments 0.00 0.00

47

Inventories 1,310.30 1,068.05Sundry Debtors 0.83 0.68

Cash and Bank Balance 0.42 0.88Total Current Assets 1,311.55 1,069.61Loans and Advances 61.28 93.33

Fixed Deposits 105.30 215.01Total CA, Loans & Advances 1,478.13 1,377.95

Deffered Credit 0.00 0.00Current Liabilities 2.61 1.48

Provisions 54.02 73.90Total CL & Provisions 56.63 75.38

Net Current Assets 1,421.50 1,302.57Miscellaneous Expenses 0.00 0.00

Total Assets 1,426.93 1,307.54Contingent Liabilities 0.00 0.00

Book Value (Rs) 42.39 41.52

48