A

Project Report on

FUNDSFLOW ANALYSIS
OF AHDFC BANK"

Palamuru University
This projeet Report submitted in partial fulfillment of the requirement for the

award of the Degree of "BACHELOR OF COMMERCE"

2021-2022
Submitted By:
S SOWMYA (19033006405059)
S MALLESH (19033006405058)
M PRASANNA (19033030405087)
V BHARGAVI (19033006405061)
UNDER THE ESTEEMED GUIDENCE OF

Mr. E.VENKATREDDY
(Lecturer of commerce)

DR.BRR GOVT DEGREE COLLEGE

(Affiliated to Palamuru University)
Jadcherla, Mahaboobnagar.

1
 CERTIFICATE

DEPARTMENT OF COMMERCE
This is to certify that this project work entitled

"FUNDSFLOW ANALYSIS OF A HDFC BANK"

Submitted by
S SOWMYA (19033006405059)

SMALLESH (19033006405058)
M PRASANNA (19033030405087)
V BHARGAVI (19033006405061)

Dr.BRR Govt College, Jadcherla, Mahabubnagar in partial fulfillment of

the requirement for the award of the Degree of Bachelor of Commerce, Palamuru
University. This project has not been submitted to any other University or Institution for
the award of any B.Com/Certificate.

PRINCIPAL
Princioei
pr BRR Gom Coa
Jeenerla60u 30"

2
 CERTIFICATE

DEPARTMENT OF COMMERCE
This is to certify that this project work entitled

"FUNDSFLOW ANALYSIS OF A HDFC BANK"

Submitted by
S SOWMYA (19033006405059)
SMALLESIH (19033006405058)
M PRASANNA (19033030405087)

V BHARGAVI (19033006405061)

Dr.BRR Govt College, Jadcherla, Mahabubnagar in partial fulfillment of the

requirement for the award of the Degree of Bachelor of Commerce , Palamuru
University. This project has not been submitted to any other University or Institution for
the award ofany B.Com/Certificate

Mrs. Dr K.
MAd D A
HEAD OF THE SQmResEENT
Dr.BRR GDC,Jadchorla

3
 CERTIFICATE

DEPARTMENT OF COMMERCE
This is to certify that this project work entitled

“FUNDSFLOW ANALYSIS OF A HDFC BANK”

Submitted by
S SOWMYA (19033006405059)
S MALLESH (19033006405058)
M PRASANNA (19033030405087)
V BHARGAVI (19033006405061)

Dr.BRR GovtCollege, Jadcherla, Mahabubnagar in partial fulfillment of the

requirement for the award of the Degree of Bachelor of Commerce , Palamuru
University. This project has not been submitted to any other University or Institution for
the award of any B.Com/Certificate.

EXTERNAL EXAMINAR INTERNAL EXAMINER

5
 DECLARATION

I hereby declare that the project work entitled on “FUNDSFLOW ANALYSIS OF A

HDFC BANK” submitted by us to the Department of Commerce is a Bonafide work done by us and it is not
submitted to any other university to Institution for the award of any B.Com/Certificate or published any time before,
under the guidance of Mr. E. VENKAT REDDY , (Lecturer in commerce)

The project embodies the result of original work and studies carried out by us and the contents

of the project do not form the basis for the award of any other degree to us.

SUBMITTED BY

S SOWMYA (19033006405059)
S MALLESH (19033006405058)
M PRASANNA (19033030405087)
V BHARGAVI (19033006405061)

6
 ACKNOWLEDGEMENT

Throughout the process of studying this project we are fortunate to have many people who
made in valuable suggestions to improve it.

Successful completion of this project is due to their careful supervision and

encouragement.

My sincere thanks to Mrs.Dr.Ch APPIYA CHINAMMA, Principal Dr.BRR Govt

College, Jadcherla, Mahabubnagar for giving us the permission to carry out the project work.

HOD Mrs.Dr K.MANJULA and My project guide Mr. E. VENKAT REDDY,(Lecturer

in commerce.) for the kind encouragement and constant support extended completion of this
project work from the bottom of my heart.

we are also thankful to all those who have incidentally helped us, through their valued
guidance, Co-Operation and unstinted support during the course of our project.

SUBMITED BY
S SOWMYA (19033006405059)
S MALLESH (19033006405058)
M PRASANNA (19033030405087)
V BHARGAVI (19033006405061)

7
 INDEX

CONTENTS: PAGE NO.

CHAPTER-1

INTRODUCTION 09-19

CHAPTER-2

COMPANY PROFILE 20-29

CHAPTER-3

LITEARATURE REVIEW 29-41

CHAPTER-4

DATA ANALYSIS 42-52

FINDINGS & CONCLUSION 53-54

BIBLOGRAPHY 55

8
 INTRODUCTION

FUNDS FLOW STATEMENT

The basic financial statements i.e., the Balance Sheet and Profit & Loss A/c or Income
Statement of business reveals the net effect of various transactions on operational and financial
position of the company. The balance sheet gives a summary of the assets & liabilities of an
undertaking at a particular point of time.

There are many transactions that take place in an undertaking and which do not operate
Profit & Loss A/c. Thus another statement has to be prepared to show the change in Assets &
Liabilities from the end of one period of time to the end of another period of time. The statement
is called a statement of changes in financial position or a Funds Flow Statement.

The Funds Flow Statement is a statement which shown the movement of funds and is a
report of financial operations of business undertaking. In simple words it is a statement of
source and application of funds.

MEANING & CONCEPT OF FUNDS

The term “Fund” has been defined and interpreted differing by different experts. Broadly
the term fund refers to all the financial resource of the company on the other extreme fund has
been understood as cash only. The most acceptance meaning of the “fund” is “working capital”.

A) CASH FUND OR NARROW SENSE

In a narrow sense, funds mean only cash. ‘Cash flow statement portrays net effect of
various business transactions cash into account receipts & disbursement of cash.

The concept of preparing funds from statement is not accepted, as there are many such
transactions that do not affect cash but represent the flow of fund.

9
For Ex:

Purchase of furniture on credit does not affect cash but there is flow of fund.

B) CAPITAL FUND (or) BROADER SENSE

Here funds means all financial resources used in business, whether in the form of men,
money, material, machine & others.

C). NET WORKING CAPITAL (or) POPULAR SENSE

Networking capital means differences between current assets & current liabilities. A fund
generally refers to cash or cash equipment or to working capital.

INTRODUCTION OF FUNDS FLOW ANALYSIS:

In any business we can not under estimate the flow of funds from two operations. The
business runs with funds but the organization knows how to flow of funds.
The Funds Flow Statement is concerned with sources and applications of organization.
Statement of changes in working capital shows the increase or decrease in the working
capital.
“Funds from Operations” statement shows how much funds from operations.

OBJECTIVES OF THE STUDY

 To know the operational efficiency of HDFC Bank

 To study & prepare Funds Flow Statements
 To analyze the movement of funds between the dates of two balance sheets in period
of study.

10
SCOPE OF THE STUDY:

Financial analysis consists of ratio analysis and funds flow analysis. To know funds flow
from one to one, as the time available is very li8mite3d and the subjects are very vast, the study
is continued to over all financial condition of a firm. This study is to know working capital
increase or decrease funds from operation, sources and application of funds of M/S HDFC
BANK,.

TOOLS OF ANALYSIS:

Various statistical tools such as percentages, averages were used to process the date;
various ratios are calculated to examine the causative factors in ascending the effectiveness of
funds flow in organization and management in M/S HDFC BANK.

SCOPE OF STUDY

 Financial analysis consists of funds flow analysis. To know funds flow from one to one,
as the time available is very limited and study is continued to over all financial condition
of a firm.

 The study to know working capital increase or decrease, funds from operation, source
and application of funds

Research Methodology:

Tools of Analysis

Various statistical tools such as percentages averages were used to process the date, of
effectiveness of funds flow in organization & management in HDFC BANK.

11
Research Design: Analytical Study
Data Sources : Secondary Data

SECONDARY DATA
The secondary data was collected form already published sources such as annual
reports, returns and internal records.

THE DATA COLLECTION INCLUDES:

a. Data collected from annual reports of HDFC Bank.,
b. Reference form textbooks relating to financial management.

RESEARCH TOOLS: Funds Flow Statement

Limitations of the Study:

 The study is only pertaining to HDFC BANK.

 The period of study is of 5 years and the performance evaluation is also

limited to 5 years.

 The study is purely based on the data available the form of annual reports...

 Analysis is only means and not an end itself, different people interpret the

same analysis in different ways.

 The over all financial performance is taken into consideration with out

taking into account the minute values or individual values.

This study is conducted with in a short period. The time factor is also a limitation.

12
INDUSTRY PROFILE
Banking in India originated in the last decades of the 18th century. The oldest bank in existence
in India is the State Bank of India, a government-owned bank that traces its origins back to June
1806 and that is the largest commercial bank in the country. Central banking is the responsibility
of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the
then Imperial Bank of India, relegating it to commercial banking functions. After India's
independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the
government nationalized the 14 largest commercial banks; the government nationalized the six
next largest in 1980.

Currently, India has 96 scheduled commercial banks (SCBs) - 27 public sector banks (that is
with the Government of India holding a stake), 31 private banks (these do not have government
stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They
have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by
ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively

Early history

Banking in India originated in the last decades of the 18th century. The first banks were The
General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now
defunct. The oldest bank in existence in India is the State Bank of India, which originated in the
Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was
one of the three presidency banks, the other two being the Bank of Bombay and the Bank of
Madras, all three of which were established under charters from the British East India Company.
For many years the Presidency banks acted as quasi-central banks, as did their successors. The
three banks merged in 1921 to form the Imperial Bank of India, which, upon India's
independence, became the State Bank of India.

Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a
consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and

13
still functioning today, is the oldest Joint Stock bank in India. It was not the first though. That
honor belongs to the Bank of Upper India, which was established in 1863, and which survived
until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance
Bank of Simla.

When the American Civil War stopped the supply of cotton to Lancashire from the Confederate
States, promoters opened banks to finance trading in Indian cotton. With large exposure to
speculative ventures, most of the banks opened in India during that period failed. The depositors
lost money and lost interest in keeping deposits with banks. Subsequently, banking in India
remained the exclusive domain of Europeans for next several decades until the beginning of the
20th century.

Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire
d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;
branches in Madras and Pondichery, then a French colony, followed. HSBC established itself in
Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the
British Empire, and so became a banking center.

The Bank of Bengal, which later became the State Bank of India.

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in
Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in
1895, which has survived to the present and is now one of the largest banks in India.

involvement of the state in different segments of the economy including banking and finance.
The major steps to regulate banking included:

14
The reserve bank of India, India’s central banking authority, was nationalized on January 1 st
1949 under the terms of the Reserve Bank of India (transfer to public Ownership ) Act, 1948
(RBI, 2005)

In 1949, the banking regulation act was enacted which empowered the Reserve Bank of India
(RBI) “to regulate, control and inspect the banks in India.”

The banking regulation act also provided that no new bank or branch of an existing bank could
be opened without a license from the RBI, and no two banks could have common directors.

Nationalization:

Banks nationalization in India: Newspaper Clipping, Times of India, July 20, 1969Despite the
provisions, control and regulations of Reserve bank of India, banks in India expect the State
Bank if India or SBI, continued to be owned and operated by private persons. By the 1960s, The
Indian banking industry had become an important tool to facilitate the development of the Indian
economy. At the same time, it had emerged as a large employer, and a debate had ensued about
the nationalization of the banking industry. Indira Gandhi, the prime Minister of India, expressed
the intention of the government of India in the annual conference of the All India Congress
meeting in a paper entitled “stray thoughts on banking nationalization.” The meeting received the
paper with enthusiasm.

Thereafter, her move was swift and sudden. The Government of India issued an ordinance and
nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969.
Jayaprkash Narayan, a national leader of India, described the step as a “masterstroke of political
sagacity.” Within two weeks of the issue of the ordinance, the parliament passed the Banking
Companies Bill, and it received the presidential approval on 9 August 1969.

15
A second dose of nationalization of 6 more commercial banks followed in 1980. The stated
reason for the nationalization was to give the government more control of credit delivery. With
the second dose of nationalization, the government of India controlled around 91% of the
banking business of India. Later on, in the 1993, the government merged New Bank of India
with Punjab National Bank. It was the only merger between nationalized banks and resulted in
the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the
nationalized banks grew at a pace of around 4%, closer to the average growth rate of Indian
economy

Liberalization:

In the early 1990s, the then P V Narsimha Rao government embarked on a policy of
liberalization, licensing a small number of private banks. These came to be known as New
Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation
banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank
(earlier as the UTI Bank), Hdfc bank and Hdfc bank. This move, along with the rapid growth in
the economy of India, revitalized the banking sector in India, which has seen rapid growth with
strong contribution from all the three sectors of banks, namely, government banks, private banks,
foreign banks.

The next stage for the Indian banking has been set up with the proposed relaxation in the norms
for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights
which could exceed the present cap of 10%, at present it has gone up to 74% with some
restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time, were used
to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go to home at 4%) of functioning. The new
wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All
this led to the retail boom in India. People not just demanded more from their banks but also
received more.

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17
 The Reserve Bank of India

The Reserve Bank of India (RBI) is the central banking system of India and
controls the monetary policy of the rupee as well as US$3000.21 billion (2010) of
currency reserves. The institution was established on 1 st April 1935 during the British
Raj in accordance with the provisions of the Reserve Bank of India Act, 1934 and plays
an important strategy of the government. It is a member of Asian Clearing Union.

History;
1935-1950

The central bank was founded in 1935 to respond to economic troubles after the
first world war. The Reserve Bank of India was set up on the recommendation of the
Hilton Young Commission. The commission submitted is report in the year 1926, though
the bank was not set up for another nine years. The preamble of the Reserve Bank of
India describes the basic functions of Reserve Bank as to regulate the issue of bank notes,
to keep reserve with a view to securing monetary stability in India and generally to
operate the currency and credit system in the best interests of the country. The Central
Office of the reserve Bank was initially established in Kolkata, Bengal, but was
permanently moved to Mumbai in 1937.The Reserve Bank continued to act as the central
bank for Myanmar till Japanese occupation of Burma and later up to April 1947, though
Burma seceded from the Indian Union in 1937. After partition, the Reserve Bank served
as the central bank for Pakistan until June 1948 when the State bank of Pakistan
commenced operations. Though originally set up as a shareholders bank, the RBI has
been fully owned by the government of India since its nationalization in 1949.

1950-1960:
Between 1950 and 1960, the Indian government developed a centrally planned
economic policy and focused on the agricultural sector. The administration nationalized
commercial banks and established, based on the Banking Companies Act, 1949 (later

18
called Banking Regulation Act) a central bank regulation as part of the RBI. Furthermore,
the central bank was ordered to support the economic plan with loans
.
1960-1969:
As a result of bank crashes, the reserve bank was requested to establish and
monitor a deposit insurance system. It should restore the trust in the national bank system
and was initialized on 7 December 1961. The Indian government founded funds to
promote the economy and used the slogan Developing Banking. The Gandhi
administration and their successors restructured the national bank market and
nationalized a lot of institute. As a result, the RBI had to play the central part of control
and support of this public banking sector.

1969-1985:
Between 1969 and 1980, the Indian government nationalized 20 banks. The
regulation of the economy and especially the financial sector was reinforced by the
Gandhi administration and their successors in the 1970s and 1980s. The central bank
became the central player and increased its policies for a lot of tasks like interests, reserve
ratio and visible deposits. The measures aimed at better economic development and had a
huge effect on the company policy of the institutes. The banks lent money in selected
sector, like agri-business and small trade companies.
The branch was forced to establish two new offices in the country for every newly
established office in a town. The oil crises in 1973 resulted in increasing inflation, and
the RBI restricted monetary policy to reduce the effects.

1985-1991:
A lot of committees analysed the Indian economy between1985 and 1991. Their
results had an effect on RBI. The board for Industrial and Financial Reconstruction, the
Indira Gandhi Institute of Development Research and the Security & Exchange Board of
India investigated the national economy as a whole, and the security and exchange board
proposed better methods for more effective markets and the protection of investor
interests.

19
 COMPANY PROFILE

The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in
the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The
bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered
office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank
in January 1995.

OVERVIEW OF THE COMPANY

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

track record in India as well as in international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in its operations to remain the
market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling
units. HDFC has developed significant expertise in retail mortgage loans to different market
segments and also has a large corporate client base for its housing related credit facilities. With
its experience in the financial markets, a strong market reputation, large shareholder base and
unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian
environment.
As on 31st December, 2009 the authorized share capital of the Bank is Rs. 550 crore. The paid-
up capital as on said date is Rs. 455,23,65,640/- (45,52,36,564 equity shares of Rs. 10/- each).
The HDFC Group holds 23.87 % of the Bank's equity and about 16.94 % of the equity is held by
the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). 27.46
% of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has about 4,58,683
shareholders.
The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange
of India Limited. The Bank's American Depository Shares (ADS) are listed on the New York
Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts
(GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002.

20
Mr. Jagdish Capoor took over as the bank's Chairman in July 2001. Prior to this, Mr. Capoor was
Deputy Governor of the RBI

MANAGEMENT

The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years, and
before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.

The Bank's Board of Directors is composed of eminent individuals with a wealth of experience
in public policy, administration, industry and commercial banking. Senior executives
representing HDFC are also on the Board.

Senior banking professionals with substantial experience in India and abroad head various
businesses and functions and report to the Managing Director. Given the professional expertise
of the management team and the overall focus on recruiting and retaining the best talent in the
industry, the bank believes that its people are a significant competitive strength.

BOARD OF DIRECTORS

Mr. Jagdish Capoor, Chairman

Mr. Keki Mistry
Mrs. Renu Karnad
Mr. Arvind Pande
Mr. Ashim Samanta
Mr. Chander Mohan Vasudev
Mr. Gautam Divan
Dr. Pandit Palande
Mr. Aditya Puri, Managing Director
Mr. Harish Engineer, Executive Director
Mr. Paresh Sukthankar, Executive Director
Mr. Vineet Jain (upto 27.12.2008)

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REGISTERED OFFICE

HDFC Bank House,

Senapati Bapat Marg,
Lower Parel,
Website: www.hdfcbank.com

HDFC Bank offers a wide range of commercial and transactional banking services and treasury
products to wholesale and retail customers. The bank has three key business segments

Distribution Network

HDFC Bank is headquartered in Mumbai. As on December 31, 2009, the Bank has a network of
1725 branches in 771 cities across India. All branches are linked on an online real-time basis.
Customers in over 500 locations are also serviced through Telephone Banking. The Bank's
expansion plans take into account the need to have a presence in all major industrial and
commercial centres, where its corporate customers are located, as well as the need to build a
strong retail customer base for both deposits and loan products. Being a clearing / settlement
bank to various leading stock exchanges, the Bank has branches in centres where the NSE / BSE
have a strong and active member base.
The Bank also has a network of 3898 ATMs across India. HDFC Bank's ATM network can be
accessed by all domestic and international Visa / MasterCard, Visa Electron / Maestro, Plus /
Cirrus and American Express Credit / Charge cardholders

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian
corporate to small & mid-sized corporates and agri-based businesses. For these customers, the
Bank provides a wide range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash management, etc. The bank is

22
also a leading provider of structured solutions, which combine cash management services with
vendor and distributor finance for facilitating superior supply chain management for its corporate
customers. Based on its superior product delivery / service levels and strong customer
orientation, the Bank has made significant inroads into the banking consortia of a number of
leading Indian corporates including multinationals, companies from the domestic business
houses and prime public sector companies. It is recognised as a leading provider of cash
management and transactional banking solutions to corporate customers, mutual funds, stock
exchange members and banks.

Retail Banking Services

The objective of the Retail Bank is to provide its target market customers a full range of financial
products and banking services, giving the customer a one-stop window for all his/her banking
requirements. The products are backed by world-class service and delivered to customers
through the growing branch network, as well as through alternative delivery channels like
ATMs, Phone Banking, NetBanking and Mobile Banking.
The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the
Investment Advisory Services programs have been designed keeping in mind needs of customers
who seek distinct financial solutions, information and advice on various
investment avenues. The Bank also has a wide array of retail loan products including Auto
Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It is
also a leading provider of Depository Participant (DP) services for retail customers, providing
customers the facility to hold their investments in electronic form.
HDFC Bank was the first bank in India to launch an International Debit Card in association with
VISA (VISA Electron) and issues the Mastercard Maestro debit card as well. The Bank launched
its credit card business in late 2001. By March 2009, the bank had a total card base (debit and
credit cards) of over 13 million. The Bank is also one of the leading players in the “merchant
acquiring” business with over 70,000 Point-of-sale (POS) terminals for debit / credit cards
acceptance at merchant establishments. The Bank is well positioned as a leader in various net
based B2C opportunities including a wide range of internet banking services for Fixed Deposits,
Loans, Bill Payments, etc.

23
Treasury

Within this business, the bank has three main product areas - Foreign Exchange and Derivatives,
Local Currency Money Market & Debt Securities, and Equities. With the liberalisation of the
financial markets in India, corporates need more sophisticated risk management information,
advice and product structures. These and fine pricing on various treasury products are provided
through the bank's Treasury team. To comply with statutory reserve requirements, the bank is
required to hold 25% of its deposits in government securities. The Treasury business is
responsible for managing the returns and market risk on this investment portfolio

Credit Rating

The Bank has its deposit programs rated by two rating agencies - Credit Analysis & Research
Limited (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed Deposit programme
has been rated 'CARE AAA (FD)' [Triple A] by CARE, which represents instruments considered
to be "of the best quality, carrying negligible investment risk." CARE has also rated the bank's
Certificate of Deposit (CD) programme "PR 1+" which represents "superior capacity for
repayment of short term promissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary
of Fitch Inc.) has assigned the "AAA (ind)" rating to the Bank's deposit programme, with the
outlook on the rating as "stable". This rating indicates "highest credit quality" where "protection
factors are very high".

The Bank also has its long term unsecured, subordinated (Tier II) Bonds rated by CARE and
Fitch Ratings India Private Limited and its Tier I perpetual Bonds and Upper Tier II Bonds rated
by CARE and CRISIL Ltd. CARE has assigned the rating of "CARE AAA" for the subordinated
Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)" with the
outlook on the rating as "stable". CARE has also assigned "CARE AAA [Triple A]" for the
Banks Perpetual bond and Upper Tier II bond issues. CRISIL has assigned the rating "AAA /
Stable" for the Bank's Perpetual Debt programme and Upper Tier II Bond issue. In each of the
cases referred to above, the ratings awarded were the highest assigned by the rating agency for
those instruments

24
Awards and Achievements - Banking Services

2010

Global Finance Best Trade Finance Provider in India for 2010

Award

2 Banking 1) Best Risk Management Initiative and 2) Best Use of Business

Technology Intelligence.
Awards 2009

SPJIMR 2nd Prize

Marketing Impact
Awards (SMIA)
2010

Business Today Listed in top 10 Best Employers in the country

Best Employer
Surve

2009

Business India Mr. Aditya Puri, MD, HDFC Bank

Businessman of the
Year Award for
2009.

Businessworld Best Most Tech-savvy Bank

Bank Awards 2009

Outlook Money Best Bank

NDTV Profit
Awards 2009

25
Forbes Asia Fab 50 Companies in Asia Pacific

GQ India's Man of Mr. Aditya Puri, MD, HDFC Bank

the Year (Business)

UTI MF-CNBC Best Performing Bank

TV18 Financial
Advisor Awards
2009

Business Standard Mr. Aditya Puri, MD, HDFC Bank

Best Banker Award

Fe Best Bank - Best Innovator of the year award for our MD Mr. Aditya Puri
Awards 2009 - Second Best Private Bank in India
- Best in Strength and Soundness Award

Euromoney Awards Best Bank in India

2009

Economic Times Most Trusted Brand - Runner Up

Brand Equity &
Nielsen Research
annual survey 2009

Asia Money 2009 Best Domestic Bank in India

Awards

IBA Banking Best IT Governance Award - Runner up

Technology
Awards 2009

Global Finance Best Trade Finance Bank in India for 2009

Award

IDRBT Banking Best IT Governance and Value Delivery

26
 Technology
Excellence Award
2008

Asian Banker Asian Banker Best Retail Bank in India Award 2009
Excellence in Retail
Financial Services

Corporate Governance:

The bank was among the first four companies, which subjected itself to a Corporate Governance
and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services
of India Limited (CRISIL).

The rating provides an independent assessment of an entity's current performance and an

expectation on its "balanced value creation and corporate governance practices" in future.

The bank has been assigned a 'CRISIL GVC Level 1' rating, which indicates that the bank's
capability with respect to wealth creation for all its stakeholders while adopting sound corporate
governance practices is the highes

We are aware that all these awards are mere milestones in the continuing, never-ending journey
of providing excellent service to our customers. We are confident, however, that with your
feedback and support, we will be able to maintain and improve our services.
On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was
formally approved by Reserve Bank of India to complete the statutory and regulatory approval
process. As per the scheme of amalgamation, shareholders of CBoP received 1 share of HDFC
Bank for every 29 shares of CBoP.

27
The merged entity will have a strong deposit base of around Rs1,22,000 crore and net advances
of around Rs89,000 crore. The balance sheet size of the combined entity would be over
Rs1,63,000 crore. The amalgamation added significant value to HDFC Bank in terms of
increased branch network, geographic reach, and customer base, and a bigger pool of skilled
manpower.

In a milestone transaction in the Indian banking industry, Times Bank Limited (another new
private sector bank promoted by Bennett, Coleman & Co. / Times Group) was merged with
HDFC Bank Ltd., effective February 26, 2000. This was the first merger of two private banks in
the New Generation Private Sector Banks. As per the scheme of amalgamation approved by the
shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received
1 share of HDFC Bank for every 5.75 shares of Times Bank.

Technology:

HDFC Bank operates in a highly automated environment in terms of information technology and
communication systems. All the bank's branches have online connectivity, which enables the
bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also
provided to retail customers through the branch network and Automated Teller Machines
(ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology available
internationally, to build the infrastructure for a world class bank. The Bank's business is
supported by scalable and robust systems which ensure that our clients always get the finest
services we offer.

The Bank has prioritised its engagement in technology and the internet as one of its key goals
and has already made significant progress in web-enabling its core businesses. In each of its
businesses, the Bank has succeeded in leveraging its market position, expertise and technology to
create a competitive advantage and build market share.

28
Mission and Business Strategy:

Our mission is to be "a World Class Indian Bank", benchmarking ourselves against international
standards and best practices in terms of product offerings, technology, service levels, risk
management and audit & compliance. The objective is to build sound customer franchises across
distinct businesses so as to be a preferred provider of banking services for target retail and
wholesale customer segments, and to achieve a healthy growth in profitability, consistent with
the Bank's risk appetite. We are committed to do this while ensuring the highest levels of ethical
standards, professional integrity, corporate governance and regulatory:

Review of Literature

MEANING & CONCEPT OF FLOW OF FUNDS:

The term flow means movement & includes both ‘inflow’ & ‘outflow’. The term flow of
funds means transfer of economic values from one asset of equity to another. Flow of funds is
said to have taken place when any transaction makes changes in amount of funds available
before happening of transactions. If the effect of transaction results in increase of funds. It is
called a “source of funds” and it is results in decrease of funds, it is known as an application of
funds.

RULE

The flow of funds occurs when a transaction changes on one hand a non-current A/c and
on the other a current A/c and Vice-versa. According to working capital concept of funds the
term “Flow o Funds” return to movement of funds in working capital.

If any transaction results in increase in working capital. It is said to be a “source” or

“inflow of funds” and if it results in decrease of working capital, it is said to be “application” or
“out flow of funds”.

29
CURRENT ASSETS

Current Assets are those assets, which in the ordinary course of business can be or will be
converted into cash with in a short period of normally one accounting year.

CURRENT LIABILITIES

Current liabilities are those liabilities which are intended to be paid in ordinary course of
business with in short period of normally one accounting year out of the current assets or the
income of the business.

Differences between current liabilities & current assets

CURRENT LIABILITIES CURRENT ASSETS
1. Bills Payable 1. Cash in Hand
2. Sundry Creditors 2. Cash at Bank
3. Accrued or O/s Expenses 3. Bills Receivable
4. Dividends Payable 4. Sundry Debtors or A/c’s receivable
5. Bank Overdraft 5. Short term loans & advances
6. Short term loans, advances & deposits 6. Short term investment
7. Provision for taxation. 7. Inventories or stock
8. Proposed Dividend 8. Prepaid Expenses
9. Accrued incomes.

30
 FLOW OF FUNDS

No Yes

When both current When both current

(or) Non current (and) other non
A/c’s are involved current A/c’s are
involved

MEANING & DEFINITION OF FUNDS FLOW STATEMENT

Funs Flow Statement is a method by which we study changes in the financial position of
business enterprise beginning & ending financial statement dates. It is a statement showing
sources & uses of funds for a period of time.

31
FOUIKE DEFINES

“A statement of sources & application of funds is technical devices designed to analyses

the changes in the financial condition of business enterprise between two date’

ANTHONY DEFINES

“The Funds Flow Statement describes the sources from which additional funds were
derived and the use to which these sources were put.

I.C.W.A IN GLOSSARY OF MANAGEMENT ACCOUNTING

TERMS DEFINES FUNDS FLOW STATEMENT

 Funds Flow Statement as “a statement either prospective or retrospective setting out of

sources & application of the funds of an enterprise.

 The purpose of statement is to indicate clearly the requirement of funds and how they are
proposed to be raised and efficient utilization & application of the same.

 Funds,Flow statement is called by various names such as sources and application of

funds, statement of changes in financial position, sources and uses of funds, summary of
financial operations, movement of working capital, movement of funds statement,
sources of increase and application of decrease etc…

USES, SIGNIFICANCE AND IMPORTANCE OF FUNDS FLOW STATEMENT

A Funds Flow Statement is an essential too for the financial analysis and is of
primary importance to finanacial management. Now a day it is being widening used by the
financial analysis.

The basic purpose of funds flow statement is to reveal the changes in working capital on 2
balance sheets

32
 DIFFERENCE BETWEEN FUNDS FLOW STATEMENT & CASH
FLOW STATEMENT

BASIS OF DIFFERENCE FUNDS FLOW STATEMENT CASH FLOW STATEMENT

1.Basis of concept It is based on a wider concept It is based on a narrower concept of
of funds, i.e., working capital. funds, i.e., cash.

2. Basis of Accounting It is based on accrual basis of It is based on cash basis of accounting.

accounting
3. Schedule of changes in Schedule of changes in working No such Schedule of changes in
working capital capital is prepared to show the working
changes in current assets and Capital is prepared.
current liabilities.
4. Method of preparing Funds flow statement reveals It is prepared by classifying all
the sources and applications of cash inflows and outflows in terms of
funds. The net difference between operating, investing and financing
sources and applications of funds activities. The net difference
represent net increase or decrease represents the net Increase or decrease
in working capital. in Cash and cash equivalents.
5. Basis of usefulness. It is useful in planning It is more useful for short-term
intermediate and long term analysis and cash planning of the
financing. business.

33
LIMITATIONS OF FUNDS FLOW STATEMENT

The funds flow statement has a number of uses, however, it has certain limitations also,
which are listed below.

1. It should be remembered that a funds flow statement is not a substitute of an income

statement or a balance sheet. It provides only some additions information as regards charges
in working capital.

2. Cannot reveal continuous changes.

3. It is not an original statement but simply is arrangement of data given in financial statements.

4. It is essentially historic in nature and projected funds flow statement cannot be prepared with
much accuracy.

5. Change in cash is more important & relevant for financial management than the working
capital

34
PROCEDURE FOR PREPARING A FUNDS FLOW STATEMENT

Funds flow Statement is a method by which we study changes in financial position of

business enterprise between beginning & ending financial statement dates. Hence the funds flow
statement is prepared by comparing two balance sheets and any of such other information
derived from the Accounts as may be needed

The preparation of funds flow statement consists of two parts.

A. Statement or schedule of changes in working capital.

B. Statement of sources & application of fund.

A.) STATEMENT OR SCHEDULE OF CHANGES IN W.C.

 Working Capital means the excess of current assets over current liabilities.

 Statement of changes in working capital is prepared to show the changes in

working capital between two balance sheet dates.

 This statement is prepared with help of current assets and current liabilities
derived from two balance sheets.

Working capital = Current Assets – Current Liabilities

 An increase in current assets increases W.C.

 A decrease in current assets decreases W.C.
 An increase in current liabilities decreased W.C.
 A decrease in current liabilities increases W.C.

35
 STATEMENT OF SCHEDULE OF CHANGES IN WORKING CAPITAL

Previous Current Effect of W.C.

Particulars
Year Year Increase Decrease
Current Assets :
Cash in Hand xx xx xx
Cash at Bank xx xx xx
Bills Receivable xx xx Xx
Sundry Debtors xx xx Xx
Temporary investments xx xx xx
Stock / Inventions xx xx xx
Prepaid Expenses xx xx xx
Accrued Incomes xx xx Xx
Total Current Assets xxx xxx
Current Liabilities :
Bills Payable xx xx xx
Sundry Creditors xx xx Xx
Outstanding Expenses xx xx Xx
Bank Overdraft xx xx xx
Short term Advances xx xx xx
Dividend Payable xx xx Xx
Proposed Dividend xx xx Xx
Provision for Taxation xx xx Xx
Total Current Liabilities xxx xxx
Working Capital (C.A. – C.L.) xxx xxx
Net increase or decrease in
xxx Xxx
W.C
xxxx xxxx xxxx Xxxx

36
 STATEMENT OF SOURCES & APPLICATION OF FUNDS. :

Funds flow statement is a statement, which indicates various sources from which funds
(W.C.) have been obtained during a certain period and uses or applications to which these funds
have been put during that period.

Generally this statement is prepared in two formats.

a) T Form (or) An A/c Form (or) Self Balancing Type

b) Report Form.

a.) T FORMS AN ACCOUNT FORM

FUNDS FLOW STATEMENT
(For the year ended)

Sources Rs. Applications Rs.

Funds from operations xx Funds lost in operations Xx

xx Redemption of preference Xx
Issue of share capital
share

Issue of Debentures xx Capital Xx

Raising of long term loans xx Redemption of debentures Xx

Sale of non current (fixed) xx Xx

Repayment of long term loan
assets

Non-trading receipts such as xx Purchase of long term Xx

dividends investments

Scale of long term investments xx Non-trading payments Xx

Net decrease in working capital xx Payment of Dividends Xx

xx Payment of Tax Xx

xx Net increase in working capital Xx

xxx Xxx

37
REPORT FORM OF FUNDS FLOW STATEMENT

SOURCES OF FUNDS
Funds from Operation Xx
Issue of Share Capital Xx
Raising of long term loans Xx
Receipts from partly paid shares Xx
Sale of non-current (fixed) assets Xx
Non trading receipts, such as dividends Xx
Sale of investment (long term) Xx
Decrease in working capital Xx
Total Xxx
APPLICATION OR USES OF FUNDS :
Funds lost in operations Xx
Redemption of preference share capital Xx
Redemption of debentures Xx
Repayment of long term loans Xx
Purchase of non current (fixed) assets Xx
Purchase of long term investments Xx
Non-trading payment Xx
Payment of dividends Xx
Payment of tax Xx
Increase in working capital Xx
Total Xxx

38
There are two methods of calculating funds from operation.
a. Funds from operation.
b.Adjusted Profit & Loss A/c

FUNDS FROM OPERATION

Closing Balance of Profit & Loss A/c Xxx

Add: Non-fund or Non-operating items Depreciation Xx
Loss on sale of fixed assets Xx
Under Writing Commission Xx
Discount on issue of shares & debentures Xx
Preliminary exp. Written off Xx
Deferred revenue expenses Xx
Goodwill Written off Xx
Patent or trade mark Xx
Provision for taxes Xx
Proposed Dividend Xx
Transfer to resure Xx
Provision for doubtful debts. Xx
Less: Non-operating Income Xx
Profit / Gain on scale of fixed assets Xx
Dividend Received Xx
Dividend Received Xx
Interest Received on Investments Xx
Profit on revaluation of assets Xx
Fund from operations Xxx

39
Product profile

SHARE CAPITAL OF HDFC BANK

31st December 2019

(Amalgamated)
1. Share Capital
Authorized
27,00,00,000 (Previous period : 27,00,00,000) equity shares of 27,000.00
Rs.10 each

17,00,00,000 (previous period : 17,00,00,000) 9% redeemable non- 17,000.00

convertible cumulative preference shares of Rs. 10 each

Issued, subscribed and fully paid up

25,79,61,400 (previous period : 25,79,61,400) equity shares of 25,796.14
Rs.10 each [refer to note (a) and note (b) below]

17,00,00,000 (previous period : 17,00,00,000) 9% redeemable non- 17,000.00

convertible cumulative preference shares of Rs. 10 each

42,796.14

40
TAX ASSET / LIABILITY AT THE BALANCE SHEET OF HDFC BANK

Major components of deferred tax asset / liability as at the balance sheet date comprises of the
following:

31st December 2019

(Amalgamated)
Deferred tax liability
Excess of depreciation allowable under Income-Tax Act, 1961 6,449.72
over depreciation provided in accounts.

Total 6,449.72

Deferred tax asset

Unabsorbed losses and depreciation (to the extent of virtual --
certainty) [refer Note I below)

Provision for leave encashment 187.37

Voluntary retirement expenditure allowable under Income-Tax Act 42.25
1961.
Disallowance under Section 43B 134.08

Provision for doubtful debts and advances 50.93

Provision for stores and spares 205.01

Others 170.72

Total (B) 790.36

41
42
STATEMENT OF CHANGES IN WORKING CAPITAL
(Rs in lakhs)
31-03-
particulars 31-03-2018 Increase Decrease
2019

Current Assets : 3036.66 2693.46 343.20

Inventories
3534.10 1838.11 1695.99
Sundry Debtors
Cash & Bank Balances 4164.68 1371.05 2793.63
Loans & Advances
3744.19 1983.03 1761.16
Total Current Assets
14479.63 7885.65
Current Liabilities :
Current Liabilities
Provisions 3448.29 3557.46 109.17
Total Current Liabilities 35.25 36.29 1.04
Working Capital (C.A. – C.L.) 3483.54 3593.75
10996.09 4291.9
Decrease in Working Capital
6704.19 6704.19
10996.09 10996.09 6704.19 6704.19

FUNDS FLOW STATEMENT FOR THE PERIOD( 2017-2018)

(Rs in lakhs)

Source Rs. Application Rs.

17,000.00 6528.76
Issue of share capital
Raising of long term loans 765.63 11969.5
Funds lost in operation
Sale of non-current (fixed) assets 2656.16 Repayment of long term loan 36233.88
Non-trading receipts 10.79 loans
Sale of investment 27595.37 Purchase of long term
investments
Decrease in working capital 6704.19
54732.14 54732.14

43
 SOURCES OF FUNDS

6704.19,
12% 17,000.00,
31%

765.63, 1%
27595.37,
2656.16,
51%
5%

Issue of share capital 10.79, 0%

Raising of long term loans
Sale of non-current (fixed) assets
Non-trading receipts
Sale of investment
Decrease in working capital
TABLE-1

INTERPRETATION

From the table it is observed that the working capital of company shows decreased trend.
The current Asset of the company has decreased Rs 14479.63 in 2004-2005 to Rs 7885.65 in 2005-
06. But the item cash balance showing increasing trend in 2003-04. The current liabilities of
company are decreased 3483.54 in 2005 to Rs 3593.75 in 2006.In 2004-05 the net working capital of
company stood 10996.09. It is decreased to Rs 4291.9 in 2005-06. The decreasing net working
capital is Rs 6704.19

It is evident from the above table that the total funds flow during the period from 2005-06
amounts Rs 54732.14. In the total funds 23.32% was received from funds from operation 4.42 from
unsecured loans.

Regarding the application of funds 33.71% used for investment in fixed assets and funds
used for working capital purpose. Constitute 30.77% respectively

44
 STATEMENT OF CHANGES IN WORKING CAPITAL
( Rs in lakhs)
31-3-2020 31-3-2021 Effect of W.C.
Particulars
Increase Decrease
Current Assets :
2693.46 2281.92 411.54
Inventories
1838.11 3109.72 1271.61
Sundry Debtors 1371.05 1716.40 345.35
Cash & Bank Balances 1983.03 1771.46 211.57
Loans & Advances
7885.65 8879.50
Total Current Assets
Current Liabilities :
Current Liabilities 2664.13 3827.14 1163.01
Provisions
36.29 50.43 14.14
Total Current Liabilities
2700.42 3877.84
Working Capital (C.A. – C.L.) 5185.23 5001.66
183.57 183.57
Decrease in Working Capital 5185.23 5185.23 1800.53 1800.53

STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD (2008-09)

Rs in lakhs

Rs. Application Rs.

Source
17,000.00 2747.91
Issue of share capital
Raising of long term loans 6195.00 Funds lost in operation 1700.00
Redemption of pre share capital
Sale of non-current (fixed) assets 2689.41 6129.33
Repayment of long term loan
Non-trading receipts 100.41 291.15
Purchase of long term investments
Decrease in working capital 1835.57 Dividend Paid 1652.00
27820.39 27820.39

45
 SOURCES OF FUNDS
1835.57,
7%
100.41, 0%
2689.41,
10%

6195, 22% 17,000.00,

61%

Is s ue of s hare capital
Rais ing of long term loans
Sale of non-current (fixed) as s ets
Non-trading receipts
Decreas e in working capital

TABLE-2

APPLICATION OF FUNDS
2747.91,
1652, 13%
22%
291.15, 2%

1700, 14%
6129.33,
49%
Funds lost in operation
Redemption of pre share capital
Repayment of long term loan
Purchase of long term investments
Dividend Paid

TABLE-2.1

46
 INTERPRETATION
From the table it is observed that the working capital of company shows decreased trend.
The current Asset of the company has decreased Rs 7885.65 in 2005-2006to Rs 8879.50 in 2006-07.
The current liabilities of company are decreased 2700.42 in 2006 to Rs 3877.84 in 2009.In 2005-06
the net working capital of company stood 5185.23. It is decreased to Rs 5001.66 in 2006-07. The
decreasing net working capital is Rs 183.57
It is evident from the above table that the total funds flow during the period from 2006-07
amounts Rs 27820.39. In the total funds 9.82% was received from funds from operation 35.82 from
unsecured loans.
Regarding the application of funds 17.13% used for investment in fixed assets and funds
used for working capital purpose. Constitute 0.84% respectively.
STATEMENT OF CHANGES IN WORKING CAPITAL
(Rs in lakhs)
31-3-2020 31-3-2021 Effect of W.C.
Particulars
Increase Decrease

Current Assets : 2281.92 2503.20 221.28

Inventories
3109.72 2467.39 642.33
Sundry Debtors
Cash & Bank Balances 1716.40 1290.71 425.69

Loans & Advances 1771.46 1906.20 134.74

Total Current Assets
8879.50 8167.50
Current Liabilities :
Current Liabilities
Provisions 3827.41 3381.69 445.72
50.43 127.90 77.47
Total Current Liabilities 3877.84 3509.59
Working Capital (C.A. – C.L.) 5001.66 4657.91

Decrease in Working Capital 343.75 343.75

5001.66 5001.66 1145.49 1145.49

47
 STATEMENT OF CHANGES IN WORKING CAPITAL
( Rs in lakhs)
31-3-2020 31-3-2021 Effect of W.C.
Particulars
Increase Decrease

Current Assets : 2281.92 2503.20 221.28

Inventories
3109.72 2467.39 642.33
Sundry Debtors
Cash & Bank Balances 1716.40 1290.71 425.69

Loans & Advances 1771.46 1906.20 134.74

Total Current Assets
8879.50 8167.50
Current Liabilities :
Current Liabilities
Provisions 3827.41 3381.69 445.72
50.43 127.90 77.47
Total Current Liabilities 3877.84 3509.59
Working Capital (C.A. – C.L.) 5001.66 4657.91

Decrease in Working Capital 343.75 343.75

5001.66 5001.66 1145.49 1145.49

STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD (2019-18)

Rs in lakhs

Source Rs. Application Rs.

696.90 2104.92
Raising of long term loans
Sale of non current (fixed) assets 2575.09 Funds lost in operation 1587.48
Non-trading receipts 109.09 Repayment of long term loans 32.43
Decrease in working capital 343.75 Purchase of long term investments
3724.83 3724.83

48
 SOURCES OF FUNDS

343.75, 9%
696.9, 19%
109.09, 3%

2575.09,
69%
Raising of long term loans
Sale of non current (fixed) assets
Non-trading receipts
Decrease in working capital

TABLE 3

APPLICATIONS OF FUNDS

32.43, 1%
1587.48,
43%
2104.92,
56%

Funds lost in operation

Repayment of long term loans
Purchase of long term investments

TABLE-3.1

49
 STATEMENT OF CHANGES IN WORKING CAPITAL
(Rs in lakhs)
31-3-2020 31-3-2021 Effect of W.C.
Particulars
Increase Decrease

2503.20 3114.57 611.37

Current Assets :
2467.39 943.79 1523.60
Inventories
Sundry Debtors 1290.71 1383.35 92.64
Cash & Bank Balances
1906.20 5284.23 3378.03
Loans & Advances
8167.50 10725.94
Total Current Assets
Current Liabilities :
Current Liabilities
3381.69 3758.62 376.93
Provisions
Total Current Liabilities 127.90 163.86 35.96

Working Capital (C.A. – C.L.)

3509.59 3922.48
Increase in Working Capital
4657.91 6803.46
2145.55 2145.55
6803.46 6803.46 4082.04 4082.04

STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD (2010-11)

Rs in lakhs

Source Rs. Application Rs.

2265.11 2100.56
Funds from operations
101.14 Repayment of long term loans 166.03
Raising of long term loans
Sale of non-current (fixed) assets 1944.29 Purchase of long term investments 2145.55
Non-trading receipts 102.00 Increase in Working Capital
4412.54 4412.14

50
 SOURCES OF FUNDS

102, 2%
1944.29,
44%
2265.11,
52%
101.14, 2%

Funds from operations

Raising of long term loans
Sale of non-current (fixed) assets
Non-trading receipts
TABLE 4

APPLICATION OF FUNDS

2145.55, 2100.56,
48% 48%

166.03, 4%

Repayment of long term loans

Purchase of long term investments
Increase in Working Capital

TABLE 4.1

51
 SOURCES OF FUNDS

16148.49,
29%

36806.58, 3342.83,
65% 6%

Issue of Share Capital

Raising of long term loans
Sale of non-current(Fixed) Assets

TABLE-5

APPLICATION OF FUNDS

9641.99, 1909.25, 3%
17%
2592.04, 5%

10122.06,
18%
32032.56,
57%

Funds from loss

Repayment of long term loans
Purchase of long term investments
Non-trading payment
Increase in W.C.

TABLE 5.1

52
 SUMMARY OF FINDINGS

1. In the year 2006 the application of funds around 33.71% utilized for investing in fixed
assets. In subsequent year it is 17.13%, 2.29%, 9.44 and 34.68% following the years 2009,
2010, 2011, and 2012.

2. Unsecured loans to get 4.42% in the year 2006 and subsequent year it is 35.82%, 4.03%,
0.58% and 19.33% following the years 2009,2010,2011 and 2012.

3. In the year 2005 the repayment of secured loans is 44.60% and subsequent year 22.84%,
5.91%, 7.82%, and 9.66% following the years 2009,2010,2011 and 2012.

4. Repayment of unsecured loans 35.79% in the year 2011 and remaining Years Company
has not repayment of unsecured loans.

5. In the year 2006 & 2009 the issue of share capital is 8.69 % and 8.26 % is in 2012
remaining years company has not issue of share capital.

6. In the year 2009 sale of fixed asset is 5.69% and subsequent years 5.76%, 5.51%, 4.16%,
and 78.86 % following the years 2010,2011,2012

7. In the year 2006 the long term investments is 48.88% and subsequent years 0.39%, 0.04%,
7.23%, and 13.65 following years 2009,2010,2011,2012

8. Non- trading receipts to get 2.36% in 2006 and subsequent years 21.99%, 23.89%,
22.34%, and 29.39% following years 2009,2010,2011,2012.

53
 9. In the year 2009 Dividends are 13.95% and subsequent years is 0.56 %, 85.48 % in 2009
and 2012 remaining Years Company has not any payments.

10. Current assets are Decreased to 39.29% in the year 2006 and subsequent year 18.52%,
17.87% and 9.87% following years 2009,2010 and April 2011

11. Current assets are increased to59.36%in the year 2011 and next year is 40.63 % in 2012.

12. Current Liabilities are Increased to 23.85% in the year 2006 and subsequent years is
27.80%, 25.89%, and 22.45% following years 2009, 2010, and April 2011.

13. Current Liabilities are decreased to 34.65% in the year 2011 and next year 65.34% in
2012.

14. In the year 2006 the net decrease in working capital 60.07% and subsequent year it is
1.83%, 3.43%, and 27.65% following the years 2009, 2010, and April 2011.

15. In the year 2011 the net increase in working capital 18.20 and next year it is 81.79 in
2012.

SUGGESTIONS

 Net working capital is very low; it is suggested to maintain sufficient net working capital.

 Effective inventory management is needed in the company

 The firm should increase investment in current assets to create sufficient securities for the

current liabilities.

54
 BIBLIOGRAPHY

 FINANCIAL MANAGEMENT -I.M PANDEY

 FINANCIAL MANAGEMENT - PRASANNA CHANDRA

 FINANCIAL MANAGEMENT - KHAN & JAIN

 ADVANCED MANAGEMENT - R.K. SHARMA

 ANNUAL REPORTS HDFC BANK2003-2009

 www.hdfc bank.com

55
56