Summer Training Final Report

TABLE OF CONTENT

TECNIA INSTITUTE OF ADVANCED STUDIES (Approved by AICTE, Ministry of HRD, Govt. of India)

CHAPTER NO. TITLE PAGE NO

1 COMPANY PROFILE,

INDUSTRY PROFILE

2 SWOT ANALYSIS

3 FINANCIAL ANALYSIS

4 LESSONS LEARNT, SUGGESTIONS

5 ANNEXURE

6 BIBILIOGRAPHY

Affiliated To Guru Gobind Singh Indraprastha University, Delhi INSTITUTIONAL AREA, MADHUBAN CHOWK, ROHINI, DELHI- 110085

E-Mail : director.tecniaindia@ gmail.com, Website: www.tecniaindia.org

Fax No: 27555120, Tel: 27555121-

24

DECLARATION

I siddhant karki Enrolment NO 0041701708 Class BBA 5th sem(M) of the Tecnia Institute of Advanced Studies, Delhi hereby declare that the Summer Training Project Report entitled is an original work and the same has not been submitted to any other Institute for the award of any other degree.

CountersignedSignature of faculty Guide

ACKNOWLEDGEMENTACKNOWLEDGEMENT

This project is the product of many hands, and countless hours from many people. My thanks go out to all those who helped, whether through their comments, feedback or suggestions.

I am deeply indebted to my project guide Mr. Ajay Rathore for providing me with regular inputs and shared his vast knowledge and technical expertise for completing this project.

SIDDHANT KARKI

INDUSTRY PROFILE

INTRODUCTION

Stock exchanges to some extent play an important role as indicators, reflecting the performance of the country’s economic state of health. Stock market is a place where securities are bought and sold. It is exposed to a high degree of volatility, prices fluctuate within minutes and are determined by the demand and supply of stocks at a given time. Stock brokers are the ones who buys and sells securities on behalf of individuals and institutions for some commission. The Securities and Exchange Board of India (SEBI) is the authorized body, which regulates the operations of stock exchanges, banks and other financial institutions.The past performances in the capital markets especially the securities scam by ‘Harshad Mehta’ has led to tightening of the operations by SEBI. In addition the international trading and investment exposure has made it imperative to better operational efficiency. With the view to improve, discipline and bring greater transparency in this sector, constant efforts are being made and to a certain extent improvements have been made.

A stock exchange is an entity which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only.The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets is driven by various factors which, as in all free markets, affect the price of stocks (see stock valuation). There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a global market for securities.

HISTORY OF THE STOCK BROKING INDUSTRY

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meagre and obscure. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks

and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60.In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs. 87). At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found a place in a street (now appropriately called as Dalal Street) where they would conveniently assemble and transact business. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers' Association" (which is alternatively known as "The Stock Exchange"). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated. Thus in the same way, gradually with the passage of time number of exchanges were increased and at currently it reached to the figure of 24 stock exchanges. The Bombay Stock Exchange is known as the oldest exchange in Asia.

It traces its history to the 1850s, when 4 Gujarati and 1 Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading Sensex futures contracts. The development of Sensex options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only fifty days to make this transition. This automated, screen-based trading platform called BSE On-line trading (BOLT) currently has a capacity of 80 lakh orders per day. The BSE has also introduced the world's first centralized exchange-based internet trading system, BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE platform.

DEVELOPMENT

An important early event in the development of the stock market in India was the formation of the Native Share and Stock Brokers’ Association at Bombay in 1875, the precursor of the present-day Bombay Stock Exchange. This was followed by the formation of associations /exchanges in Ahmedabad (1894), Calcutta (1908), and Madras (1937). IN addition, a large number of ephemeral exchanges emerged mainly in buoyant periods to recede into oblivion during depressing times subsequently.In order to check such aberrations and promote a more orderly development of the stock market,

the central government introduced a legislation called the Securities Contracts (Regulation) Act, 1956. Under this legislation, it is mandatory on the part of a stock exchanges to seek government recognition. As of January 2002 there were 23 stock exchanges recognized by the central Government. They are located at Ahmadabad, Bangalore, Baroda, Bhubaneswar, Calcutta, Chennai,(the Madras stock Exchanges ), Cochin, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur, Kanpur, Ludhiana, Mangalore, Mumbai(the National Stock Exchange or NSE), Mumbai (The Stock Exchange), popularly called the Bombay Stock Exchange, Mumbai (OTC Exchange of India), Mumbai (The Inter-connected Stock Exchange of India), Patna, Pune, and Rajkot.

Of course, the principle bourses are the National Stock Exchange and The Bombay Stock Exchange, accounting for the bulk of the business done on the Indian stock market. While the recognized stock exchanges have been accorded a privileged position, they are subject to governmental supervision and control. The rules of a recognized stock exchanges relating to the managerial powers of the governing body, admission, suspension, expulsion, and re-admission of its members, appointment of authorized representatives and clerks, so on and so forth have to be approved by the government. These rules can be amended, varied or rescinded only with the prior approval of the government.

BSE (BOMBAY STOCK EXCHANGE)

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act,1956.The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redressal of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education program and making available to them necessary informative inputs.A Governing Board having 20 directors is the apex body, which decides the policies and

regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one third of them retire ever year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer. The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading Sensex futures contracts. The development of Sensex options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system in 1995. It took the exchange only fifty days to make this transition. This automated, screen-based trading platform called BSE On-line trading (BOLT) currently has a capacity of 80 lakh orders per day. The BSE has also introduced the world's first centralized exchange-based internet trading system, BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE platform

NSE(NATIONAL STOCK EXCHANGE)

NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It started operations in June 1994, with trading on the Wholesale Debt Market Segment. Subsequently it launched the Capital Market Segment in November 1994 as a trading platform for equities and the Futures and Options Segment in June 2000 for various derivative instruments. NSE has been able to take the stock market to the doorsteps of the investors. The technology has been harnessed to deliver the services to the investors across the country at the cheapest possible cost. It provides a nation-wide, screen-based, automated trading system, with a high degree of transparency and equal access to investors irrespective of geographical location. The high level of information dissemination through on-line system has helped in integrating retail investors on a nation-wide basis.

The standards set by the exchange in terms of market practices, Products , technology and service standards have become industry benchmarks and are being replicated by other market participants. Within a very short span of time, NSE has been able to achieve all the objectives for which it was set up. It has been playing a leading role as a change agent in transforming the Indian Capital Markets to its present form. The Indian Capital Markets are a far cry from what they used to be a decade ago in terms of market practices, infrastructure, technology, risk management, clearing and settlement and investor service.

NCDEX (NATIONAL COMMODITIES AND DERIVATIVES EXCHANGE)

NCDEX started working on 15th December, 2003. This exchange provides facilities to their trading and clearing member at different 130 centers for contract. In commodity market the main participants are speculators, hedgers and arbitrageurs. Promoters of NCDEX are National Stock Exchange(NSE) ICICI bank Life Insurance Corporation(LIC) National Bank for Agricultural and Rural Development (NABARD) IFFICO Punjab National Bank (PNB) CRISIL

WHY NCDEX?

NCDEX is nationalized screen based system which is providing transparent, private and easy services.NCDEX is one of the traditional media which gives online informationNCDEX is one of the Indian commodity exchange, constructed on the basis of the current national institutes the exchange has been established with the coloration of leading institutes like NABARD, LIC, NSI etc….

In India NCDEX has maximum settlement guarantee fund. NCDEX has appointed two exports for checking quality at the time of delivery

FACILITIES PROVIDED BY NCDEX

NCDEX has developed facility for checking of commodity and also provides a wear house facilityBy collaborating with industrial partners, industrial companies, news agencies, banks and developers of kiosk network NCDEX is able to provide current rates and contracts rate.To prepare guidelines related to special products of securitization NCDEX works with bank.To avail farmers from risk of fluctuation in prices NCDEX provides special services for agricultural.

NCDEX is working with tax officer to make clear different types of sales and service taxes.

NCDEX is providing attractive products like “weather derivatives”

FIGURE NO:1

MCX(MULTI COMMODITY EXCHANGE)

‘MULTI COMMODITY EXCHANGE’ of India limited is a new order exchange with a mandate for setting up a nationwide, online multi-commodity marketplace, offering unlimited growth opportunities to commodities market participants. As a true neutral market, MCX has taken several initiatives for users In a new generation commodities futures market in the process, become the country’s premier exchange.MCX, an independent and a de-mutualized exchange since inception, is all set up to introduce a state of the art, online digital exchange for commodities futures trading in the country and has accordingly initiated several steps to translate this vision into reality.

Market Watch:

FIGURE NO:2

The market watch window is used to view the market details for a particular or group of contracts and for a particular instrument type. This window displays the following details: Symbol, Expiry, price quotation unit, buy qty, buy price, sell price, sell qty, last traded price, D.P.R, volume (in 000’s), value (in lac),% change, average trade price, high, low, open, close & open interest.

TRANSACTION CYCLE

Placing Order

Settlement of trades

Decision to trade

Trade Execution

Clearing of Trades

Funds or Securities

Transaction Cycle

FIGURE NO:3

A person holding assets (Securities/Funds), either to meet his liquidity needs or to reshuffle his holdings in response to changes in his perception about risk and return of the assets, decides to buy or sell the securities. He selects a broker and instructs him to place buy/sell order on an exchange. The order is converted to a trade as soon as it finds a matching sell/buy order. At the end of the trade cycle, the trades are netted to determine the obligations of the trading member’s securities/funds as per settlement cycle. Buyer/seller delivers funds/ securities and receives securities/funds and acquires ownership of the securities. A securities transaction cycle is presented above. Just because of this Transaction cycle, the whole business of Securities and Stock Broking has emerged. And as an extension of stock broking, the business of Online Stock broking/ Online Trading/ E-Broking has emerged.

ONLINE TRADING

In the past, investors had to call up their brokers and place an order on the phone. The broker would then enter the order in their system which was linked to trading floors and exchanges. With the advent of the internet, investors can now enter orders directly online, or even trade with other investors via ECN's (electronic communication networks). Some orders entered online are still routed through the broker allowing agents to approve or monitor the trades. This step assists in the protection of both the client and brokerage firm from unlawful or incorrect trades which could affect the

client’s portfolio or the broker’s license. Online brokers are most often referred to as discount brokers, due to their lower fees as opposed to full service brokers who also give advice to clients. Before choosing to invest or trade online it is important for investors to research the online brokers that they plan to employ, assuring that they are licensed within their state or provincial jurisdiction. This step will help to protect investors from falling victim to unlawful or illegal securities schemes (e.g. Boiler Room scams). Investors must also fully understand the potential risks of investing without the help of a trained Stock Broker or Investment Advisor. These professionals are experienced both in trade and education and forgoing their advice could be costly. For this reason, most online brokers offer a number of investment tools. Once the above two steps are complete it is dually important to research the sector, business and financial statements of each company whose stock they plan to purchase. This, along with diversification and basic portfolio theory, will assist to mitigate some of the risks associated with the volatility in both the stocks and the stock markets. Once investors have chosen an online brokerage that best suits their needs, they will be provided a trading platform. This platform acts as the hub, allowing investors to purchase and sell securities (fixed income and equities), options, mutual funds, and forex. Included with the platform are tools to track and monitor securities, portfolios and indices, as well as research tools, real-time streaming quotes and up-to-date news releases; all of which are necessary to trade profitably. Often, more robust research tools are available such as full, in-depth analyst reports and analysis, and customized back testing to see how particular investment strategies would have been realized during different historical periods. Some of the popular online brokers include: E*TRADE, Scot trade, TD Ameritrade, and Fidelity. Schwab is an example of a hybrid broker combining a traditional, brick-and-mortar brokerage house with discounted trading online, with the usual benefits of both available to customers. Commissions vary from broker to broker, depending on the services included with the account. Some less known online brokers are Forex, Interactive Brokers, Lightspeed, Marsco, optionsXpress and Zecco.

COMPANY PROFILE

ABOUT SHAREKHAN COMPANYINTRODUCTION

Sharekhan is stock broking company. Share Khan comes under retail arm of SSKI (Shripal Sevantilal Kantilal Ishwarlal ) investors Services Pvt. Ltd. offers World-class facilities for buying and selling Shares on BSE and NSE, Demate Services(DP)Derivatives(F&O). SSKI group also comprises of Institutional broking and Corporate Finance. Sharekhan does not claim expertise in too

many things. Sharekhan's expertise lies in stocks and that's what he talks about with authority. So when he says that investing in stocks should not be confused with trading in stocks or a portfolio-based strategy is better than betting on a single horse, it is something that is spoken with years of focused learning and experience in the stock markets. And these beliefs are reflected in everything Sharekhan does for you! Those of you who feel comfortable dealing with a human being and would rather visit a brick-and-mortar outlet than talk to a PC, you'd be glad to know that Sharekhan offers you the facility to visit (or talk to) any of our share shops across the country. In fact Sharekhan runs India's largest chain of share shops with over hundred outlets in more than 80 cities! What's a share shop? How do you locate a share shop in your city? Sharekhan is 80 years old company which is started online in the year 2000 & it is the first company who started online in 1984 they ventured into institutional broking& corporate finance. They having 14 branches, 400 franchises also having 466 shops in 210 cities. In Rajkot branch daily dealing Rs.16 crore & 400 crore daily dealing all over India. Almost 4000 employees and 100000 trading customers.

VISION

To empower the investor with quality advice and superior service to help him take better investment decisions. We believe that our growth depends on client satisfaction.

MISSION

To provide the best customer service and product innovation tuned to diverse needs of clientele

Continuous up-gradation with changing technology, while maintaining human values.

Respond to progressive globalization and achieving international standard.

Efficiency and effectiveness built on ethical practices.

CORE VALUE

Customer satisfaction througho Providing quality service effectively and efficientlyo “Smile, it enhances your face value ” is a service quality stressed

on periodic customer service Audits Maximization of stakeholder value Success through Teamwork, integrity and People

GENERAL INFORMATION

NAME : S. S. KANTILAL ISHWARLAL

SECURITEIS PVT. LTD.

HEAD OFFICE : SHAREKHAN LTD.

A – 206, PHOENIH HOUSE,

PHOENIH MILL COPUND,

SENAPATI, BAPTA MARG,

LOWER PAREL,

MUMBAI - 400013

PH NO : 1800 - 22 7500 , 3970 75 00

E-MAIL : [email protected]

WEB SITE : www.sharekhan.com

CHIEF EXECUTIVE OFFICER: TARUN SHAH

BRANCH OFFICES : 100 BRANCHES

CHANGING TREND

Remember the time when you left orders with your broker in the morning and received a confirmation fax late in the evening? You wondered whether you had acquired the shares at the best possible price for the day. Today, the picture is different. Imagine a scenario where you log on to your account, get the live quotes of scripts you are interested in, get advise from experts and research reports on your investment choice and then just click the mouse to place your order, pay the amount due (which automatically gets debited into your account with the on line brokerage firm), get your account statement, and the delivery of your shares into your Demat account. All this through just one click of a mouse. Seems like a dream? But with online trading this has become a reality. A few seconds later, you get the confirmation on your screen. And after the trade settlement, your bank and DP accounts will reflect the changes accordingly.

The speed of transaction, confidentiality about the prices and ease of settlement in the paperless mode should be good reasons for retail investors to jump on to the Net. All they need is a PC, a modem, a subscription to an ISP,

Owns 50.5% of

SSKI Corporate Finance Pvt. Ltd.

Investment Banking arm of the groupShareholding pattern

50.5% SSKI Securities Pvt. Ltd.49.5 % Morakhia family

SSKI Investor Services Pvt. Ltd.

Retail broking arm of the groupShareholding pattern

56% Morakhia family (promoters) 18.5% HSBC Private Equity Management, Mauritius

18.5% First Carlyle Ventures, Mauritius7% Intel Pacific Inc.

SSKI Securities Pvt. Ltd.Morakhia Family & Associates

Owns 56% of

an account with a bank (which has a web presence) and a depository account. And they can choose from a plethora of e-trading web sites. So, finally the changing trend is known as E-trading which really means Buying and selling securities via the Internet or other electronic means such as wireless access, touch-tone telephones, and other new technologies with online trading. In most cases customers access a brokerage firm's Web Site through their regular Internet Service Provider. Once there, customers may consult information provided on the Web Site and log into their accounts to place orders and monitor account activity"

SSKI Group - Corporate Structure

FIGURE NO:4

Integrated Equity Solutions Provider

• Among the top 3 branded retail service providers

(Rs. 200+crs average daily Vol- FY 03-04)

• Multi-channel access to clients

• Tailor made research and products

• Depository Services

• Derivatives

• Innovative products for enhanced performance

About Sharekhan

SSKI named its online division as SHARE KHAN and it is into retail Broking

The business of the company overhauled 4 years ago on February 8, 2000.

It acts as a discount brokerage house to a full service investment solutions provider

It has a 150 member strong team.

It has specialized research product for the small investors and day traders

Largest chain of share shops, 103 Franchisees & 17 Branches across India.

It has $25m/trades every day.

Leading player today with 20% market share

Over 8000 online clients

The site was also launched on February 8, 2000 and named it as www.sharekhan.com

The SpeedTrade account of share khan is the next generation technology product launched on April 17, 2002

SpeedTradePlus was launched on October 28, 2002 for trading in Derivatives

It offers its customers with the trade execution facilities on the NSE, for cash as well as derivatives, depository services

Ensures convenience in trading experience:

Share Khan’s trading services are designed to offer an easy, hassle free trading experience, whether trading is done daily or occasionally. The customer will be entitled to a host of value added services, in the investment process depending on his investing style and frequency. and offers a suite of products and services, providing the customer with a multi-channel access to the stock markets.

It gives advice based on extensive research to its customers and provides them with relevant and updated information to help him make informed about his investment decisions.

Share khan offers its customers the convenience of a broker-DP.

It helps the customer meet his pay-in obligations on time thereby reducing the possibility of auctions. The company believes in flexibility and therefore allows accepting late instructions without any extra charge. And execute the instruction immediately on receiving it and thereafter the customer can view his updated account statement on Internet.

Ground Network –Largest in India

122 Franchisees and 28 branchesCovers 82 cities in 17 states across IndiaTrade execution facility on BSE and NSE for Cash as well as DerivativesDepository/Demat account servicesPersonalized Sharekhan research adviceUniform service standards

Sharekhan Depository Services offers demat services to individual and corporate investors. It has a team of professionals and the latest technological expertise dedicated exclusively to their demat department. A customer can avail of Demat \ Remat, Repurchase, Pledge, Transmission facilities at any of the Share khan branches and business partners outlets.

MARKET COVERAGE

FIGURE NO:5

Award-Winner

FIGURE NO:6

SEVEN P’S OF SHAREKHAN

PRODUCT

Product Variety

Share khan offers 3 types of online trading accounts for its customers specially designed according to their volume in share trading. Those 3 varieties are:

Classic- for retail investors Speed Trade: for high net worth investors with large and active

equity portfolio who need to monitor and action swiftly Speed trade Plus- for high net worth investors dealing in derivative

market.

Winner of Chip magazine’s ‘Best Financial Website Award’

QualityUser Friendly, attractive & colorful Website.

DesignThe website of Share khan namely www.sharekhan.com has been specially designed to facilitate its users to buy and sell shares in an instant at anytime and from anywhere they like. The site is user friendly allowing even a layman to easily operate without any hassles.

Features: Share khan’s product comes with the following features:

Trade execution in a fraction of a second! Single Screen Trading Terminal Real time streaming quotes. Price watch on any number of scripts. Hot keys similar to Brokers Terminal. Customized Alerts based on Multiple Parameters. Back up Facility to place trades on Direct Phone Lines. Intra day charts, updated live, tick-by-tick. Instant Order\ Trade Confirmation in the same window Live margin, position, marked to market profit & loss report. Competitive Brokerage. Flexibility to customize screen layout and setting. Facility to customize any number of portfolios & watch lists. Facility to cancel all pending orders at one click. Facility to square off all transactions at one click. Top Gainers, Top Losers, and Most Active, updated live. Index information; index chart, index stock information live. Market depth, i.e. Best 5 bids and offers, updated live for all scripts Online access to both accounts and DP. Live updated Order and Trade Book. Details of pending, executed and rejected orders. Online access to Customer Service. 128 - bit super safe encryption. Facility to place after market orders Online fund transfer facility from leading Banks Online intra-day technical calls. Exhaustive database of over 2000 companies Historical charts and technical analysis tools. Last but not the least, ideas that help you to make money!!!

Brand NameThe company as a whole in its offline business has named itself as SSKI Securities Pvt. Ltd -Sevaklal Sevantilal Kantilal and Ishwarlal Securities Pvt. Ltd. The company has preferred to name themselves under a Blanket Family Name. But in its online division started since 1997, the company preferred to name itself as “SHARE KHAN”. The Brand Name “SHARE KHAN” itself suggests the business in which the company is dealing so that the consumer could easily identify the product or service category.

Services

Share khan offers its customers, depository services and trade execution facilities for equities, derivatives and commodities backed with investment advice tempered by decades of broking experience. The teams of its dedicated analysts are constantly at work to track performance and trends. Dial-n-trade is also an exclusive service available to all Sharekhan customers for trading in shares via the telephone. On dialing the toll free number 1600-22-7050 and on entering the customers TPIN number, the customer will be directed to a telebroker who will buy or sell shares for him.

PRICE List Price

CLASSIC SPEED TRADE

SPEED TRADE PLUS

One time registration fee

750 1000 1500

Minimum brokerage Charges –Quarterly

Nil 1000 1500

BrokerageShare khan in its online business charges brokerage as follows:

- In equity Market: On Trading: 0.1% On Delivery: 0.5%- In Derivative Market

On Trading: 0.12% (Total brokerage) On Delivery: 0.1%

Service Tax -8% on Brokerage.

Turnover tax + Stamp duty-0.015% (Rs. 15 on every turnover of Rs. 100000)

Custody ChargeRe. 1 per script held per month.

DiscountsFor investors with High Net worth, there are slabs in brokerage rates.

Payment PeriodThe transaction settlement date in the securities market is T+ 2 days i.e. the payment of the transaction taken place has to be made within two days of its occurrence.

Credit termsShare khan allows its customers to trade up to 4 times i.e. by keeping 1/4th margin with them.

PROMOTIONOnline share trading is totally a new concept in Indian Market. Generally investor doesn’t like to come out from conventional way of share trading. Share khan has introduced this product in. The concept and Product are still new in the market. Therefore the company has undertaken extensive promotion campaign to create awareness about the product. Share khan adopts the following tools for promoting the product

AdvertisingCompany advertises its product through TV media on channels like CNBC, Print Media-in leading dailies and outdoors media. It advertises itself as an innovative Brand with a cartoon of tiger-called SHERU. Besides attractive and colorful brochures as well as posters are used giving full details about the product.Mails are sent to people logging on to sites like moneycontrol.com and rediff.com.Also, stalls are opened up now and then at places where prospective customers can be approached.

Sales PromotionThe Company offers Rs.500 instead of Rs.750 for corporate accounts (more than 20 accounts).Also, it provides online trading accounts for just Rs.300 for IIM

students.

Sales ForceThe Company has an aggressive sales force, which is given incentives, based on their sales. The sales force is given intensive training continuously.

SeminarThe Company also arranges seminar in corporate world for creating awareness about the product. Recently, it had organized for a seminar in ONGC, IIM.

Direct MarketingCompany emphasizes more on direct marketing, as many people are still not aware of this new way of smart trading. For this, the company recruits and trains sales representatives so as to explain the product and solve customer queries related to the product. This is the most effective way to communicate the three-in-one concept which company offers.

TelemarketingThis is another promotional tool company is using to boost up its sales. For this, the company collects the database of the people belonging to different professional segments.PLACE

ChannelsShare khan uses various channel alternatives to reach to its customers through

Internet Tele Marketing Retail Share Shops Franchisee Owners Power Brokers Sales Force

CoverageAccess to the website from any part of the globe.

Locations Share khan has the largest chain of retail share shops in India. It has 180 share shops located in 90 cities all over India like Pune, Thane, Chennai, Kolkata, Banglore, Luckhnow, Darjleeng, Kanpur, Baroda, Midnapore, Surat, Delhi, Gaziabad, Hydrabad, Allahbad, etc.

PEOPLE Employees

Selection: Employees are selected on the basis of their experience and qualification as applicable to the job.

Training: Intensive training is provided to the employees till a week once they join and even at times required after that.

Motivation: The employees are motivated through incentives they are provided.

Research TeamShare khan has a team of dedicated analysts who have years of working experience in the industries that they track, and a proven track record in using their knowledge of the investment science to deliver results.

Customers, The heart of sharekhan are really treated loyally like the kings. The customer care, which comprises of highly trained executives operating from 9:30 to 8:00 p.m.

PHYSICAL EVIDENCE Locality of the office:

In Ahmedabad, two franchise outlets are located in posh areas like Navrangpura and Maninagar. A new franchise is going to open up in Vastrapur.

Office Environment: The ambience within the office is what can make the customer feel comfortable in trading. The cordial and friendly atmosphere at office is like a full time motivation for the employees.

Interiors and Infrastructure: The office is well furnished and has 24 computer terminals on which tick-by-tick price movements of the securities are displayed.

PROCESS In this service organization, the ways in which the customers receive

delivery of the service constitutes the process. Here, the process involves adding ‘value’ or ‘utility’ so that the customers get full satisfaction for the money spent by them. Here the process begins from the step when customer wants to open e-invest account and ends when his account is actually activated.

All Indian residents and NRI are eligible to avail this service.

Customers can open a sharekhan e-invest account by filling a single application form. This form includes 9 agreements like

Main form with customer details

Agreement between sharekhan and client in respect of the ONLINE-INVESTMENT SUPPORT service offered.

Agreement between the Depository Participant and the client for providing the transaction statement through Internet.

Irrevocable power of attorney

Agreement between the DP and the person seeking to open an account with the DP.

Maintenance of client’s account on a running account bases by SSKI.

Agreement giving the right of lien on the credit balance of client in NSE trading.

Agreement giving the right of lien on the credit balance of client in BSE trading.

Risk disclosure document (cash segment).

PRODUCTS OF THE SHAREKHAN COMPANY

FIGURE NO:7

Other Services:

Dial-n-Trade Depository Services Commodity Trading Derivative Trading

Offline

ShareKhan’s product

Online

Classic A/C Speed Trade A/C

Other Services

Mutual fund Portfolio Management Services Online IPO Research Based Information Provided

OFFLINE

Offline A/c is the A/c for the investors who are not familiar with the use of computer.

The A/C opening charges Rs.500(One time) For 1st Year Demat A/C is Free,On 2nd Year AMC charge is applicable.

ONLINE

A/C Opening Charges Rs.750(onetime Charge).For 1st Year Demat A/C is Free,On 2nd Year AMC charge is applicable.Type with 7 banks through which one can transfer or withdraw his fund online.Which are as follows

HDFC BankIDBI BankUTI BankOBC BankCITY Banko Indusind Banko Union Bank of India

Any one who have A/C either of above banks they can use this facility.Otherwise one has to make fund transfer or withdraw by cheque.

This account enables you to buy and sell shares through our website. You get features like a) Streaming quotes (using the applet based system)b) Mutltiple watchlistsc) Integrated Banking, demat and digital contractsd) Instant credit and transfere) Real-time portfolio tracking with price alert and, of course, the assurance of secure transactions.

Features of Classic Account

that enables you to invest effortlessly Online trading account for investing in Equities and Derivatives via sharekhan.com Integration of: Online trading + Bank + Demat account Instant cash transfer facility against purchase & sale of shares Make IPO booking You get Instant order and trade confirmations by e-mail

Streaming Quotes

Personalised Market Scan with your own customized stock ticker!

Single screen interface for cash and derivatives

Your very own Portfolio Tracker!

Charges of Different companies for online A/C

Parameters Opening Fee Brokerage InterfaceTrading A/C

Demate A/c

Delivery Square Off

Bank Associated

Sharekhan 750 NIL 0.50 0.10 HDFC,UTI,OBC, IDBI, City Bank

ICICI Direct 750 NIL 0.75 0.18 ICICI Bank

IndiaBulls 750 250 0.40 0.10

5 Paisa NIL 0.20 0.05 ICICI Bank ,UTI,OBC,HDFC, City Bank

Kotak Street 500 0.59 0.06 Kotak Bank, City Bank

HDFC 700 NIL 0.50 0.15 HDFC & Other

Securities Bank

Dial-n-Trade

Trade in Equity by using your phone!

Free with your Sharekhan Classic Account, the Dial-n-Trade service enables you to place orders for buying and selling shares through your telephone.

All you have to do is dial any one of our two dedicated numbers (1-800-22-7050 or 30307600), enter your TPIN number (which is provided at the time of opening your account) and on authentication you'll be directed to a telebroker who will buy and sell shares for you.Features of Dial-n-Tradethat enable you to trade effortlessly

TWO dedicated numbers for placing your orders with your cell phone or landline. Toll free number: 1-800-22-7050. For people with difficulty in accessing the toll-free number, we also have a Reliance number 30307600 which is charged at Rs. 1.50 per minute for STD calls.

Automatic funds transfer with phone banking (for Citibank and HDFC bank customers) Simple and Secure Interactive Voice Response based system for authentication .No waiting time. Enter your TPIN to be transferred to our telebrokers.You also get the trusted, professional advice of our telebrokers.After hours order placement facility between 8.00 am and 9.30 am (timings to be extended soon).

Reliable service, wherever you are

Requirements

All you need is access to a phone - either a landline or a cell phone: (the type of phone doesn't matter)

If calling from a cell phone, please dial 022-1-800-22-7050

Currently for Citibank and HDFC customers. More banks to be added soon

After hour order timings: 8.00 am to 9.30 am

It takes approximately 10 minutes of your time to place an order

PORTFOLIO MANAGEMENT SYSTEM

With the Sharekhan Team Managing Your Portfolio, you can be assured that

your investments are in safe hands!

We follow a multi-disciplined approach incorporating quantitative analysis, fundamental analysis and technical analysis. This multi-pronged approach enables us to provide risk-controlled returns for you. Right from choosing the combination of stocks most suitable for you based on your risk appetite to monitoring their movements and discussing them with you at special events.

MUTUAL FUND

IntroductionEverybody talks about mutual funds, but what exactly are they? Are they like shares in a company, or are they like bonds and fixed deposits? Will I lose all my money in funds or will I become an overnight millionaire? Big questions that get answered in just five minutes.

Meaning

A mutual fund is a pool of money that is invested according to a common investment objective by an asset management company (AMC). The AMC offers to invest the money of hundreds of investors according to a certain objective - to keep money liquid or give a regular income or grow the money long term. Investors buy a scheme if it fits in with their investment goals, like getting a regular income now or letting the money accumulate over the long term. Investors pay a small fraction of their total funds to the AMC each year as investment management fees.

Categories of Mutual Fund

There are three broad categories of funds in the Indian market - money market, debt and equity. A money market fund invests in short-term government debt paper and is good for parking money for the short term since the principal is safe, returns better than a bank deposit and liquidity high. Debt funds invest mainly in debt instruments like government securities, corporate and institutional debt paper. They are also called income funds since people buy them for their income needs. Equity funds invest in the stock market and suit long term investors who want capital appreciation. Commodity, property and gold funds are yet to come into India.

Investing in Mutual Funds through Sharekhan

We're glad to announce that you will now be able to invest in Mutual Funds through us! We've started this service for a few mutual funds, and in the near future will be expanding our scope to include a whole lot more. Applying

for a mutual fund through us is open to everybody, regardless of whether you are a Sharekhan customer.You have two choice through which you can invest in Mutual Fund.

A) On the main page of this micro-site and scheme snapshot page we have provided with a link to PDF version of application form which you just need to download, print and fill up relevant details. Submit the duly filled copy with payment either to Nearest Sharekhan Branch Or Mutual Fund Company.

B)B) Alternatively you can call up our customer service 1600-22-7500 and give your contact detail wherey we will arrange to mail you a hard copy of application of desired schemes from the list offered by Sharekhan.

Sharekhan Depository Services

Dematerialization and trading in the demat mode is the safer and faster alternative to the physical existence of securities. Demat as a parallel solution offers freedom from delays, thefts, forgeries, settlement risks and paper work. This system works through depository participants (DPs) who offer demat services and hold the securities in the electronic form for the investor Sharekhan Depository services offers dematerialisation services to individual and corporate investors.We have a team of professionals and the latest technological expertise dedicated exclusively to our demat department, apart from a national network of franchisee, making our services quick, convenient and efficient. At Sharekhan, our commitment is to provide a complete demat solution which is simple, safe and secure.

The services offered by Depository Participant

Convert your physical holding into electronic holding (which is called "dematerialization" of securities)Keep custody of your holdings in electronic form.Transfer the shares in the electronic form from one account to another.Facilitate pledge of your electronic securities. Give electronic credit of new share allotments such as public issues, bonus, rights etc.Convert your electronic holding into physical holding (which is called "dematerialization of securities”

ONLINE IPOOnline IPO (Initial Public Offering) is a new service started by Sharekhan for providing the application form of any company’s issues of shares just like the TCS issue can be subscribed by filling an online form to reduce the paper work and the fund transfer facility is also provided to the clients for transferring the funds online. It is given on its web-site for helping the clients who are not able to collect the forms manually and the speed of filling and reducing the risk of misplacing of forms, not reaching in time, etc.

FIGURE NO:8

ANAYSIS OF QUESTIONAIRE

FIELDS OF INVESTMENTS

STOCK

MUTUAL FUNDS

COMMODITIES

FUNDS AND EQUITIES

FIGURE NO:9

According to the available figures 45% of the people invest in stocks,whereas 30% of them believes that mutual funds will bring in more returns. Rest of them invest in commodities and funds and equities.

AGE OF INVESTORS

15 to 30

31 to 45

46 to 60

above 60

FIGURE NO:10

The maximum number of investors are in the age group of 31 to 45. They invest more in stock market than any other group who are investing in the market. The least number of investors are in the age group of above 60 which is just 15%.

TRADING EXPERIENCE OF INVESTORS

BELOW 5 YRS

5 TO 10 YRS

ABOVE 10 YRS

0% 10% 20% 30% 40% 50% 60%

Series 1

FIGURE NO:11

Most of the investors are investing in the stock markets for about 5-10 years. So they are generally new to the stock markets. The pace of growth of new investors is also very good which is about 30%.This denotes that there is lots of potential of growth in the years to come as the numbers of investors is increasing at a very good pace.

MARKET SITUATION AT THE TIME OF RECESSION

STOP TRADING

INVEST LITTLE AMOUNT

SHIFT TO COMMODITIES

OTHERS

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Series 1

FIGURE NO:12

This bar diagram shows that investors are not ready to take any kinds of risks. The majority of 42% are saying that they will not invest in the market if there is recessions like situation in the market.22% of the people are ready to invest in the market but very little amount. Others say that they will shift to commodities as it is long term investment and involves less risks as compared to the stock markets.

OCCUPATION OF INVESTORS

BUSINESSGOVT.EMPLOY.PRIVATE EMPLOY.OTHERS

FIGURE NO:13

About 34% People who have invested in the stock market works in the private firms.After that the investors are govt.employees and then those people who are self employed.

SALARY PER MONTH OF INVESTORS

BELOW 15000

15001 TO 30000

30001 TO 45000

ABOVE 45000

0%10%20%30%40%50%60%

SALARY PER MONTH

FIGURE NO:14

Majority of the investor’s monthly salary is approx. 20000. About 18% of the people’s salary is approx. 30000 to 45000.

EDUCATIONAL QUALIFICATION OF INVESTORS

NON HIGH SCHOOL

HIGH SCHOOL UNDER GRADUATE

POST GRADUATE

0%10%20%30%40%50%60%

EDUCATION LEVEL

FIGURE NO:15

Majority of the investor’s educational qualifications is graduation which stands to about 58% and then those who have passed high school. Some of them are post graduates also and also those who are in high schools.

HOW THE ACCOUNT WAS OPENED?

PERSONAL AC-QUAINTANCE

REFERRAL CLIENTS

REFERRAL NON CLIENTS

CALL/WALK IN

PERSONAL PROSPECT VISIT

FIGURE NO:16

In this pie chart the reference used to open the account for trading has been analyzed. About 39% of the respondents said that they opened the account on the reference of their friends’ family members. 13% said that they opened the account in the respective firm on the basis of their image in the society and personal acquaintance.non clients also plays an important role because they also helped in opening the account of the clients. Calls made by the customer care centre also helped in bringing clients.

SOURCE OF INFORMATION

ADVISORY S

ERVICE

FINANCIAL P

UBLICATIO

N

GENER

AL MED

IA

CASH COMMODITY

OTHER

S0%5%

10%15%20%25%30%35%40%

SOURCE OF INFORMATION

FIGURE NO:17

According to the data available the maximum number of respondents give more emphasis on the general media to update themselves regarding the stock markets. After this the advisory services provided by the stock traders to the investors is used in investing in the markets.financial publications like newsweek,forbes,standardmail is also a good source of information to investors.it helps them in keeping their knowledge up to date about the happenings taking place in the stock market.

DO YOU BELIEVE THAT YOUR TRADER IS VERY SUCCESSFUL IN TRADING?

STRONGLY AGREE AGREE MODERATE DISAGREE STRONGLY DISAGREE

0%

5%

10%

15%

20%

25%

30%

35%

40%

FIGURE NO:18

According to the respondents they feel satisfied with the kind of services being provided by their traders. This shows the sign of confidence in the

investors mind that they are ready to take risks and have full faith in their traders.

WHICH TRADING COMPANY YOU PREFER TO OPEN YOUR ACCOUNT

SHARE KHAN

RELEGARE

ANGEL BROKING

SMC

ICICI DIRECT

SBI DEMAT

FIGURE NO:19

Majority of the respondents replied that they have their account in share khan pvt.ltd. after share khan it is the relegare who has the maximum numbers of account after share khan.others also have some share in the market in terms of accounts.

FINAL CONCLUSIONIn the analysis of questionnaire the conclusion has come that the investors are less risk taking and prefer govt. Securities in terms of investment. those who are young investors are risk takers and prefers to take risk if there are higher returns involved. Most of the investors are new to the share trading sector and they are ready to take risk if there are good returns. At the time of recession people preferred those securities which were more safe in terms of investment and in recession the number of investors also got decreased.In terms of occupation most of the investors work in private sector .there salary is generally between thirty thousand to forty thousand a month, so there saving are quite high and there is a scope of growth for the “ONLINE TRADING” in general.They get general information from media like news channels, news papers, magazines etc. So if the company wants to grow then they will have to target these sectors as they can increase their market share.Investors who are already in the trading market the majority of them are not happy with there company so there is a huge scope of growth for the share khan Pvt.Ltd

SWOT ANALYSIS

SWOT ANALYSIS

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strategic Planning, has been the subject of much research.

Strengths: characteristics of the business or team that give it an advantage over others in the industry.

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

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

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

Identification of SWOTs are essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses, opportunities and threats. It is particularly helpful in identifying areas for development.

During this training at sharekhan, we had come to know the Strengths-Weaknesses-Opportunities-Threats for the company and it is very useful for a company to analyze them. Therefore, the SWOT analysis is presented here and the suggestions for maintaining strengths and removing weaknesses are explained.

o Strengths:

Well-maintained infrastructure. Dedicated, Intelligent and Loyal staff. On-line Trading products. Lowest brokerage and other charges w.r.t. Competitors.

The best investment advice correct up to 70-90 % through dedicated research and reports. Wide product range to enable the clients to choose the best

alternative. One of the best DPs in India. A positive image in the existing clients.

o Weaknesses:

Less awareness in the market. Time consuming process for account opening, resolving the problems

of the customers, etc. Service quality is not maintained accordingly how they are promoted.

o Opportunities:

Slope of stock market towards delivery based transaction. Large potential market for delivery and intra-day transactions. Open interest of the people to enter in stock market for investing. Attract the customers who are dissatisfied with other broker & DPs. An indirect opportunity generated by the market from its bullishness. Large untapped market in the Saurashtra region of Gujarat.

o Threats:

Decreasing rates of brokerage in the market. Increasing competition against other brokers & DPs Poor marketing activities for making the company known among the

customers. A threat of losing clients for any kind of weakness of the company. Losing the untapped market with the entry of the competitors.

FINANCIAL ANALYSIS

FINANCIAL STATEMENTS

1. Debt equity ratio

The two basic components of debt to equity ratio are outsiders funds i.e. external equities and share holders’ funds, i.e., internal equities. The

outsiders funds include all debts / liabilities to outsiders, whether long term or short term or whether in the form of debentures, bonds, mortgages or bills. The shareholders funds consist of equity share capital, preference share capital, capital reserves, revenue reserves, and reserves representing accumulated profits and surpluses like reserves for contingencies, sinking funds, etc. The accumulated losses and deferred expenses, if any, should be deducted from the total to find out shareholder's funds

Some writers are of the view that current liabilities do not reflect long term commitments and they should be excluded from outsider's funds. There are some other writers who suggest that current liabilities should also be included in the outsider's funds to calculate debt equity ratio for the reason that like long term borrowings, current liabilities also represents firm's obligations to outsiders and they are an important determinant of risk. However, we advise that to calculate debt equity ratio current liabilities should be included in outsider's funds. The ratio calculated on the basis outsider's funds excluding liabilities may be termed as ratio of long-term debt to share holders funds.

Significance of Debt to Equity Ratio:

Debt to equity ratio indicates the proportionate claims of owners and the outsiders against the firm’s assets. The purpose is to get an idea of the cushion available to outsiders on the liquidation of the firm. However, the interpretation of the ratio depends upon the financial and business policy of the company. The owners want to do the business with maximum of outsider's funds in order to take lesser risk of their investment and to increase their earnings (per share) by paying a lower fixed rate of interest to outsiders. The outsiders creditors) on the other hand, want that shareholders (owners) should invest and risk their share of proportionate investments. A ratio of 1:1 is usually considered to be satisfactory ratio although there cannot be rule of thumb or standard norm for all types of businesses. Theoretically if the owners interests are greater than that of creditors, the financial position is highly solvent. In analysis of the long-term financial position it enjoys the same importance as the current ratio in the analysis of the short-term financial position.

Formulae:

[Debt Equity Ratio = External Equities / Internal Equities]

Or

[Outsiders funds / Shareholders funds]

[Total Long Term Debts / Total Long Term Funds]

Or

[Total Long Term Debts / Shareholders Funds]

2. Current Ratio:

It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities

Definition:

Current ratio may be defined as the relationship between current assets and current liabilities. This ratio is also known as "working capital ratio". It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities.

Formula:

Following formula is used to calculate current ratio:

[Current Ratio = Current Assets / Current Liabilities]

Or

[Current Assets : Current Liabilities]

Components:

The two basic components of this ratio are current assets and current liabilities. Current assets include cash and those assets which can be easily converted into cash within a short period of time, generally, one year, such as marketable securities or readily realizable investments, bills receivables, sundry debtors, (excluding bad debts or provisions), inventories, work in progress, etc. Prepaid  expenses should also be included in current assets because they represent payments made in advance which will not have to be paid in near future.

Current liabilities are those obligations which are payable within a short period of tie generally one year and include outstanding expenses, bills payable, sundry creditors, bank overdraft, accrued expenses, short term advances, income tax payable, dividend payable, etc. However, some times a controversy arises that whether overdraft should be regarded as current

liability or not. Often an arrangement with a bank may be regarded as permanent and therefore, it may be treated as long term liability. At the same time the fact remains that the overdraft facility may be cancelled at any time. Accordingly, because of this reason and the need for conversion in interpreting  a situation, it seems advisable to include overdrafts in current liabilities.

3.Liquid or Liquidity or Acid Test or Quick Ratio:

Definition:

Liquid ratio is also termed as "Liquidity Ratio",  "Acid Test Ratio" or "Quick Ratio". It is the ratio of liquid assets to current liabilities. The true liquidity refers to the ability of a firm to pay its short term obligations as and when they become due.

Components:

The two components of liquid ratio (acid test ratio or quick ratio) are liquid assets and liquid liabilities. Liquid assets normally include cash, bank, sundry debtors, bills receivable and marketable securities or temporary investments. In other words they are current assets minus inventories (stock) and prepaid expenses. Inventories cannot be termed as liquid assets because it cannot be converted into cash immediately without a loss of value. In the same manner, prepaid expenses are also excluded from the list of liquid assets because they are not expected to be converted into cash. Similarly, Liquid liabilities means current liabilities i.e., sundry creditors, bills payable, outstanding expenses, short term advances, income tax payable, dividends payable, and bank overdraft (only if payable on demand). Some time bank overdraft is not included in current liabilities, on the argument that bank overdraft is generally permanent way of financing and is not subject to be called on demand. In such cases overdraft will be excluded from current liabilities.

Formula of Liquidity Ratio / Acid Test Ratio:

[Liquid Ratio = Liquid Assets / Current Liabilities]

Significance:

The quick ratio/acid test ratio is very useful in measuring the liquidity position of a firm. It measures the firm's capacity to pay off current obligations immediately and is more rigorous test of liquidity than the current ratio. It is used as a complementary ratio to the current ratio. Liquid

ratio is more rigorous test of liquidity than the current ratio because it eliminates inventories and prepaid expenses as a part of current assets. Usually a high liquid ratios an indication that the firm is liquid and has the ability to meet its current or liquid liabilities in time and on the other hand a low liquidity ratio represents that the firm's liquidity position is not good. As a convention, generally, a quick ratio of "one to one" (1:1) is considered to be satisfactory.

Although liquidity ratio is more rigorous test of liquidity than the current ratio , yet it should be used cautiously and 1:1 standard should not be used blindly. A liquid ratio of 1:1 does not necessarily mean satisfactory liquidity position of the firm if all the debtors cannot be realized and cash is needed immediately to meet the current obligations. In the same manner, a low liquid ratio does not necessarily mean a bad liquidity position as inventories are not absolutely non-liquid. Hence, a firm having a high liquidity ratio may not have a satisfactory liquidity position if it has slow-paying debtors. On the other hand, A firm having a low liquid ratio may have a good liquidity position if it has a fast moving inventories. Though this ratio is definitely an improvement over current ratio, the interpretation of this ratio also suffers

4. Net Profit Ratio (NP Ratio):

Definition of net profit ratio:

Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage.

Components of net profit ratio:

The two basic components of the net profit ratio are the net profit and sales. The net profits are obtained after deducting income-tax and, generally, non-operating expenses and incomes are excluded from the net profits for calculating this ratio. Thus, incomes such as interest on investments outside the business, profit on sales of fixed assets and losses on sales of fixed assets, etc are excluded.

Formula:

[Net Profit Ratio = (Net profit / Net sales) × 100]

Significance:

NP ratio is used to measure the overall profitability and hence it is very useful to proprietors. The ratio is very useful as if the net profit is not

sufficient, the firm shall not be able to achieve a satisfactory return on its investment.

This ratio also indicates the firm's capacity to face adverse economic conditions such as price competition, low demand, etc. Obviously, higher the ratio the better is the profitability. But while interpreting the ratio it should be kept in mind that the performance of profits also be seen in relation to investments or capital of the firm and not only in relation to sales

5. Inventory Turnover Ratio or Stock Turnover Ratio (ITR):

Every firm has to maintain a certain level of inventory of finished goods so as to be able to meet the requirements of the business. But the level of inventory should neither be too high nor too low.

A too high inventory means higher carrying costs and higher risk of stocks becoming obsolete whereas too low inventory may mean the loss of business opportunities. It is very essential to keep sufficient stock in business.

Definition:

Stock turn over ratio and inventory turn over ratio are the same. This ratio is a relationship between the cost of goods sold during a particular period of time and the cost of average inventory during a particular period. It is expressed in number of times. Stock turnover ratio / Inventory turnover ratio indicates the number of time the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory. This ratio indicates whether investment in stock is within proper limit or not.

Components of the Ratio:

Average inventory and cost of goods sold are the two elements of this ratio. Average inventory is calculated by adding the stock in the beginning and at the and of the period and dividing it by two. In case of monthly balances of stock, all the monthly balances are added and the total is divided by the number of months for which the average is calculated.

Formula of Stock Turnover/Inventory Turnover Ratio:

The ratio is calculated by dividing the cost of goods sold by the amount of average stock at cost. 

(a) [Inventory Turnover Ratio = Cost of goods sold / Average inventory at cost]

Generally, the cost of goods sold may not be known from the published financial statements. In such circumstances, the inventory turnover ratio may be calculated by dividing net sales by average inventory at cost. If average inventory at cost is not known then inventory at selling price may be taken as the denominator and where the opening inventory is also not known the closing inventory figure may be taken as the average inventory. 

(b) [Inventory Turnover Ratio = Net Sales / Average Inventory at Cost]

(c) [Inventory Turnover Ratio = Net Sales / Average inventory at Selling Price]

(d) [Inventory Turnover Ratio  = Net Sales / Inventory]

6. Operating Ratio:

Definition:

Operating ratio is the ratio of cost of goods sold plus operating expenses to net sales. It is generally expressed in percentage

Operating ratio measures the cost of operations per dollar of sales. This is closely related to the ratio of operating profit to net sales.

Components:

The two basic components for the calculation of operating ratio are operating cost (cost of goods sold plus operating expenses) and net sales. Operating expenses normally include (a) administrative and office expenses and (b) selling and distribution expenses. Financial charges such as interest, provision for taxation etc. are generally excluded from operating expenses.

Formula of operating ratio:

Operating Ratio = [(Cost of goods sold + Operating expenses) / Net sales] × 100

Significance:

Operating ratio shows the operational efficiency of the business. Lower operating ratio shows higher operating profit and vice versa. An operating ratio ranging between 75% and 80% is generally considered as standard for manufacturing concerns. This ratio is considered to be a yardstick of operating efficiency but it should be used cautiously because it may be affected by a number of uncontrollable factors beyond the control of the firm. Moreover, in some firms, non-operating expenses from a substantial part of the total expenses and in such cases operating ratio may give misleading results

7. Fixed Assets Turnover Ratio:

Definition:

Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit earning capacity of the concern.

Higher the ratio, greater is the intensive utilization of fixed assets. Lower ratio means under-utilization of fixed assets. The ratio is calculated by using following formula:

Formula of Fixed Assets Turnover Ratio:

Fixed assets turnover ratio turnover ratio is calculated by the following formula:

Fixed Assets Turnover Ratio = Cost of Sales / Net Fixed Assets

8. Earnings Per Share (EPS) Ratio:

Definition:

Earnings per share ratio (EPS Ratio) is a small variation and calculated by dividing the net profit after taxes and preference dividend by the total number of equity shares.

Formula of Earnings Per Share Ratio:

The formula of earnings per share is:

[Earnings per share (EPS) Ratio = (Net profit after tax − Preference dividend) / No. of equity shares (common shares)]

Significance:

The earnings per share is a good measure of profitability and when compared with EPS of similar companies, it gives a view of the comparative earnings or earnings power of the firm. EPS ratio calculated for a number of years indicates whether or not the earning power of the company has increased.

9. Expense Ratio:

Definition:

Expense ratios indicate the relationship of various expenses to net sales.

They reveals the average total variations in expenses. But some of the expenses may be increasing while some may be falling. Hence, expense ratios are calculated by dividing each item of expenses or group of expense with the net sales to analyze the cause of variation of the operating ratio.

The ratio can be calculated for individual items of expense or a group of items of a particular type of expense like cost of sales ratio, administrative expense ratio, selling expense ratio, materials consumed ratio, etc. The lower the operating ratio, the larger is the profitability and higher the operating ratio, lower is the profitability.

While interpreting expense ratio, it must be remembered that for a fixed expense like rent, the ratio will fall if the sales increase and for a variable expense, the ratio in proportion to sales shall remain nearly the same.

Formula of Expense Ratio:

Following formula is used for the calculation of expense ratio:

[Particular Expense = (Particular expense / Net sales) × 100 ]

10. Return on Shareholders Investment or Net Worth Ratio:

Definition:It is the ratio of net profit to share holder's investment. It is the relationship between net profit (after interest and tax) and share holder's/proprietor's fund.

This ratio establishes the profitability from the share holders' point of view. The ratio is generally calculated in percentage.

Components:

The two basic components of this ratio are net profits and shareholder's funds. Shareholder's funds include equity share capital, (preference share capital) and all reserves and surplus belonging to shareholders. Net profit means net income after payment of interest and income tax because those will be the only profits available for share holders.

Formula of return on shareholder's investment or net worth Ratio:

[Return on share holder's investment = {Net profit (after interest and tax) / Share holder's fund} × 100]

CONCLUSION

After going through the analysis of the project I have come to conclude that only SHAREKHAN is one such place or organization where a customer is fully satisfied by the varied range of services provided by them which includes Demating of Shares, Stock Broking, investments in equities, derivatives, commodities, PMS, advisory services, Mutual Funds, IPO’s, best research reports. They also provide beneficial schemes even to small investors and they also have the facility of Online Demat Services.

It is a place which is providing various services all under one roof it is also known to be a Sharekhan’s Share Shops. The major merits or strengths of Sharekhan, being the co-operative attitude of the staff members towards themselves as well as towards the clients. They help the customers by providing correct information about the various services and about various products available with them.

Thus, we can say that SHAREKHAN is one of the most prestigious financial organizations of India as far as:-

Service space Attitude of staff Dissemination of information Promptness of query handling Processing time Value added services are concerned and therefore the satisfaction

level of its customers is also very high. There are investors who use Equity as an investment tool.

Those people who want to invest in Derivatives & Commodities are investing mainly for reducing risk and they consider them as investment tool.

People generally want to take trading decisions independently or under the guidance of Friends or Well Known Stock Broking Houses.

Literature and Self Experience can be taken as the best method to impart education about derivatives & commodities

RECOMMENDATIONS AND SUGGESTIONS

HIGH CHARGES: Sharekhan is charging high as compare to other competitors in the field with due respect to account opening, brokerage and annual maintenance charges. So some cost reduction strategies should be adopted.

LACK OF PUBLICITY: Sharekhan has lack of publicity in the field with special reference to Indore region. People don’t know that Sharekhan is also providing Demat facility. They think Sharekhan handles only big issues and act as only registrar and transfer agent only.

LACK OF AWARENESS: People are not aware of Sharekhan. They don’t know what Sharekhan is and what its services are.

ADVERTISEMENT: There is a lack of advertising also. Many people don’t even know about Sharekhan. So major advertising strategies should.

COMPETITIVENESS:in order to be more competitive share khan will have to reduce its trading charges as there are companies which are providing demat accounts to the investors in lesser amounts.

AWARENESS:sharekhan needs to make its marketing team strong and also it should increase marketing activities such as promotional campaigns. Sharekhan should educate the investors about Derivatives & Commodities by organizing classes, corporate presentations, taking part in consumer fairs, organizing events.

PROPER MARKETING: Sharekhan needs to make its marketing team strong and also it should increase marketing activities such as promotional campaigns.

INVESTOR’S KNOWLEDGE: Sharekhan should educate the investors about Derivatives & Commodities by organizing classes, corporate presentations, taking part in consumer fairs, organizing events.

PROMOTE THE INVESTOR TO SHIFT TO COMMODITYSharekhan should turn existing customers (who are trading in Equity only) towards Derivatives & Commodities.

BIBLIOGRAPHY

Books:

Kothari C.R., Research Methodology, New Delhi, Vikas Publishing House

pvt.Ltd. 1978

Pathak Bharti v.,Indian Financial System,Delhi,Person

Education(Singapore) Pvt.Ltd.

Websites:

1. www.Google.com

2. www.bseindia.com

3. www.nseindia.com

4. www.sharekhan.com

5. www.ncdex.com.

6. www.mcx.com

7. www.moneycontrol.com

ANNEXURE

Balance sheet

  Mar ' 10 Mar ' 09Equity share capital 57.04 56.68Share application money 0.40 11.37

Reserves & surplus 1,050.67 980.13Secured loans 1.17 1.70Unsecured loans 496.58 0.10Total 1,605.86 1,049.99Gross block 108.83 143.68Less : revaluation reserve - -Less : accumulated depreciation 60.63 44.94Net block 48.20 98.73Capital work-in-progress 1.75 4.51Investments 1,104.22 869.31Current assets, loans & advances 1,709.81 778.75

  Mar ' 10 Mar ' 09Less : current liabilities & provisions 1,258.12 701.31Total net current assets 451.69 77.43Miscellaneous expenses not written - -Total 1,605.86 1,049.99Book value of unquoted investments 1,101.49 869.28Market value of quoted investments 3.27 0.03Contingent liabilities 24.17 20.85Number of equity sharesoutstanding (Lacs) 2852.15 2834.00

Profit loss account

  Mar ' 10 Mar ' 09IncomeOperating income 665.99 542.27ExpensesMaterial consumed - -Manufacturing expenses  14.52 93.32Personnel expenses 162.62 136.91Selling expenses 137.18 67.38Adminstrative expenses 104.83 85.81Expenses capitalised - -Cost of sales 419.14 383.42Operating profit 246.85 158.85Other recurring income 24.30 29.37Adjusted PBDIT 271.14 188.22Financial expenses 13.88 11.15Depreciation  31.86 25.56Other write offs - -Adjusted PBT 225.40 151.51

  Mar ' 10 Mar ' 09Tax charges  77.34 47.88Adjusted PAT 148.07 103.63Non recurring items 7.90 -0.03Other non cash adjustments -3.96 2.23Reported net profit 152.02 105.83Earnigs before appropriation 277.22 228.74Equity dividend 85.20 79.45Preference dividend - -Dividend tax 14.48 13.50Retained earnings 177.54 135.79

Cash flow  Mar ' 10 Mar ' 09

Profit before tax 233.31 151.48Net cash flow-operating activity 5.12 513.70Net cash used in investing activity -265.62 -18.71Net cash used in fin. activity 392.08 -279.11Net inc/dec in cash and equivalent 131.59 215.88Cash and equivalent begin of year 430.25 214.37Cash and equivalent end of year 561.84 430.25