Financial Performan

A STUDY ON FINANCIAL PERFORMANCE OF

TAMILNADU STATE APEX CO-OPERATIVE BANK LIMITED.

A PROJECT REPORT

Submitted by

G.LOKESH KUMAR

Reg. No 11309631019

in partial fulfillment for the award of the degree

of

MASTER OF BUSINESS ADMINISTRATION

R.M.K.ENGINEERING COLLEGE

ANNA UNIVERSITY: CHENNAI 600 025

AUGEST 2010

BONAFIDE CERTIFICATE

Certified that this project report, “A study on financial performance of TAMIL NADU STATE

APEX CO-OPERATIVE BANK LIMITED. The bonafide work of “G.LOKESH KUMAR”

who carried out the project work under my supervision.

SIGNATURE SIGNATURE

HEAD OF DEPARTMENT SUPERVISOR

Dept of Management Studies Dept of Management Studies

R.M.K ENGINEERING COLLEGE R.M.K ENGINEERING COLLEGE R.S.M.Nagar, Kavaraipettai-601 206 R.S.M.Nagar, Kavaraipettai-601 206

Gummidipoondi Taluk, Tiruvallur Dist. Gummidipoondi Taluk, Tiruvallur Dist.

ACKNOWLEDGEMENT

I wish to record my sense of gratitude to the chairman and The Principal of R.M.K.

Engineering College for providing me with an opportunity to undertake this project,

which has been an immense help to me.

I wish to thank Mr. RAJAGOPAL chief manager of TAMILNADU STATE APEX CO-

OPERATIVE BANK LIMITED and Mr. SUNDAR manager of TAMILNADU STATE

APEX CO-OPERATIVE BANK LIMITED who has permit me to undergo the project work

in their respective branch.

I wish to express my deep sense of gratitude to Dr.premaSankaran MBA, Ph.D.

Professor & HOD who has assisted me in doing the project.

I express my sense of gratitude to Ms. S.D. Uma Mageshwari M.sc, M.Tech, M.B.A.

Associate. professor, Department of Management Studies under whose able guidance

this project was done.

I express my thanks to officials and staff members for readily sparing their precious time

and effort to complete this project successfully.

Special gratitude and thanks to my family members and well wishers whose moral

support and cooperation for completing the project report successfully.

ABSTRACT

Finance is the lifeblood of the nation as well as organization. The organization greatly

depends on the better utilization of finance. Finance plays a vital role in determining the

strength and weakness and control funds of the concern. Without finance no

organization can perform its activities. In modern enterprise financial manager occupies

a key position. He is responsible for shaping the future of the enterprise.

The conceptual frameworks of financial analysis have been discussed. The meanings

of financial performance, tools used for a purpose of financial analysis have been

discussed.

The study is the analysis of financial performance of TAMILNADU STATE APEX CO-

OPERATIVE BANK LIMITED. The secondary data was taken from the balance sheets

for the last years form 2005- 2009 .

By applying the tools like ratio analysis, comparative balance sheet, common size

balance sheet, and funds flow statement the performance of the bank was analyzed and

interested facts were revealed. This would further help the organization to improve its

performance further.

CHAPTER NO TITLE PAGE NO

ABSTRACT

LIST OF TABLES

LIST OF CHARTS

1 INTRODUCTION

1.1 Introduction of the study 1

1.1.1 Need And Importance Of The Study 2

1.1.2 Scope of study 2

1.1.3 Objectives of the study 3

1.1.4 Research Methodology 3

1.1.4.1Research Design 3

1.1.4.2 Sources of data 4

1.1.4.3Tools and Techniques 4

1.1.5 Limitations of the study 5

1.1.6 chapterisation 6

1.2 REVIEW OF LITERATURE

1.2.1 Theoretical Review of the Concept 7

1.2.2 Bank Profile 9

2 ANALYSIS AND INTERPRETATION

2.1 Financial Analysis Tools

2.1.1 Ratio Analysis 11

2.1.2 Comparative Balance Sheet 21

2.1.3 Common Size Balance sheet 31

2.1.4 Funds Flow Statement 37

3 SUMMARY AND CONCLUSIONS

3.1 Findings Of The Study 48

3.2 Suggestions 49

3.3 Conclusions 50

BIBLIOGRAPHY 51

APPENDICES 52

Financial Statement

No List of table Page no

2.1.1.1 Ratio of Share Capital to Owned Fund 11

2.1.1.2 Return On Assets 13

2.1.1.3 Amount Payment of Divided to Net Profit 15

2.1.1.4 Net Profit to Working Capital 17

2.1.1.5 Owned Fund From to Working Capital 19

2.1.2.1 Comparative Balance Sheet 21





2.1.3.1 Common Size Balance Sheet 31





2.1.4.1 Funds Flow Statement 37





No List of Charts Page no

2.1.1.1 Ratio of Share Capital to Owned Fund 11

2.1.1.2 Return On Assets 13

2.1.1.3 Amount Payment of Divided to Net Profit 15

2.1.1.4 Net Profit to Working Capital 17

2.1.1.5 Owned Fund From to Working Capital 19

CHAPTER 1

INTRODUCTION

FINANCIAL ANALYSIS

1.1 INTRODUCTION:

Financial statements are the statements, which show the financial performance and

financial position of an organization during a particular period. Financial statements

include trading and profit and loss account and balance sheet. Trading and profit and

loss account is prepared to know the profit earned and loss sustained during a particular

period. Balance sheet is prepared to know the financial position of a concern.

Financial statement is prepared for the purpose of presenting a periodical review or

report by the management and deal with the state of investment and business and

result achieved during the period under view. They reflect a combination of recorded

facts, accounting concepts and conventions and personal judgments.

Financial analysis is the process of identifying the financial strengths and weakness of

firm by properly establishing relationships between the items of Balance sheet and

Profit and loss account. Analyzing financial statements is the process to evaluating

result between component parts of financial statement to obtain a better understanding

of firm’s position and performance. The main aim of financial statement analysis is to

find out the profitability and financial position of the firm. To analyze the financial

statements are classified methodically, analyzed and compared with the figures of the

previous years. With the help of the tools financial manager can rationalize his decision

and reach the goal.

1

1.1.1 NEED OF THE STUDY

Bank is interested in knowing their financial condition. The theoretical background about

any topic would not be useful for anyone unless it is done practically. So, the

importance of any project is to gain practical exposure and proper insight on the topic

under study. A study on the financial performance of THE TAMIL NADU STATE APEX

CO-OPERATIVE BANK LIMITED. Analysis and interpretation of financial statements

therefore refers to such a treatment of information contained in the balance sheet so as

to afford full diagnosis of the profitability and financial soundness of the business which

would help the bank to further improve its financial performance.

1.1.2 SCOPE OF THE STUDY

The study would reveal the actual financial position of the bank and its

policies which in turn will enlighten the financial strengths and weakness.

Financial statements are usually concerned with and need to be informed

about the result of operations of both the enterprise itself as well as group

as a whole.

2

1.1.3 OBJECTIVE OF THE STUDY

PRIMARY OBJECTIVE:

To study the financial performance of the TAMIL NADU STATE APEX

CO-OPERATIVE BANK LIMITED Chennai 600001.

SECONDARY OBJECTIVES:

To study of analyze the various ratios in relation to the solvency,

profitability and leverage position for the period of five years from 2004-

2005 to 2008- 2009.

To find out the position of profit by comparing balance sheet for five

years.

To analyze the flow of cash and funds.

To suggest some measures to improve of the financial performance of

the bank.

1.1.4 RESEARCH METHODOLOGY

DEFINITION OF RESEARCH

“Research comprises defining and redefining problems, formulating hypothesis,

collecting, organizing and evaluating data, making deductions and reaching conclusions

to determine whether they fit the formulating hypothesis.”

1.1.4.1 RESEARCH DESIGN

The research is done with the secondary data already available like balance sheet. i.e

analytical research is used.

3

DEFINITION OF ANALYTICAL RESEARCH DESIGN:

Analytical research is the research where the researcher uses the facts or information

already available, and analyses these information to make a critical evaluation of the

material.

1.1.4.2 SOURCES OF THE DATA:

The data for the analysis are collected and gathered.

With the reference for printed annual report for TAMILNADU STATE APEX

CO-OPERATIVE BANK LIMITED.

There are various financial information which are collected from text book.

The main sources of information for this project work is published material

like annual reports and other data collected from the bank records.

1.1.4.3 TOOLS AND TECHNIQUES

The bank financial analysis is done with the following tools and techniques

Ratio analysis

Comparative balance sheet

Common size balance sheet

Fund flow statement

4

1.1.5 LIMITATION OF THE STUDY

The following are the drawbacks of the study:

Drawback due to restrictions and constraints caused by the “time”.

The study was carried out of the period limited to five years i.e. from 2004 - 2005

to 2008 - 2009.

The data-analysis, comparison and project study is done mainly on secondary

data.

5

1.1.6 CHAPTERISATION

Chapter 1. is arranged starting from the introduction of the study, need and importance

of the study, Research methodology and limitations of the study, and then it consists of

theoretical perspective of the study and profile of the bank.

Chapter 2. consists of financial analysis and interpretation. Financial tools such as

Comparative Balance Sheet , Common Size Balance Sheet, Funds Flow Statement and

Ratio Analysis is been used.

Chapter 3. consists of findings of the study, suggestion and recommendation and

conclusions are adopted.

6

REVIEW OF LITERATURE

1.2.1 Theoretical review of the concept

Elena Shloma; [2009] in her essay titled “The financial performance of ethical funds : A

comparative analysis of the risk-adjusted performance of ethical and non-ethical mutual

funds in UK” reports that financial performance remains of an important concern for the

socially responsible investors.

Susan Vonderheid (2009) Financial Performance of Nurse-Managed Primary Care Centers: Literature Review

Academic Nurse-Managed Centers Cost Studies

Little is known about the financial performance of nursing centers and the financial

performance indicators that characterize profitable centers. In fact, the performance of

nursing centers received little attention until the mid-1990s. The following review of the

ANMC literature presents studies that reported a financial performance measure and

described their methodologies. To facilitate comparison with this study's findings, costs

reported in previous studies were converted to 2000 dollars using the consumer's price

index for physician services (U.S. Department of Labor, 2001).

Saywell, Lassiter, and Flynn (1995) investigated an ANMC staffed by voluntary

physicians and nurse practitioners, as well as salaried nurse practitioners. The cost

analysis included direct (actual cash expenditures) and donated operating costs. The

average total operating cost per visit was $65 ($82 in 2000 dollars). The ANMC total

costs were higher than physician costs at $38 ($48 in 2000 dollars) per visit based on

office visit charges.

7

Hunter, Ventura, and Kearns (1999) conducted cost analyses using two different

methods based on client and aggregate (center) level data, and included actual cash

expenditures and donated goods and services. The average cost per visit was $63 ($85

in 2000 dollars) based on the client method and $101 ($136 in 2000 dollars) based on

the aggregate method. Comparison groups (county-operated facilities) had similar costs

per visit ranging from $62 ($84 in 2000 dollars) to $92 ($124 in 2000 dollars) per visit.

Cost per patient was $240 based on the aggregate method; no comparison groups were

reported.

One study compared two ANMCs using gross cost accounting and activity-based

costing (Vincent, Mackey, Pohl, Hirth, & Oakley, 1999). Direct, indirect, and donated

goods and services costs were included. Revenue per visit was $60 ($64 in 2000

dollars) at the self-sustainable and profitable center, and $27 ($29 in 2000 dollars) at

the center with grants and subsidies. Gross costing analysis estimated a total cost per

visit of $45 ($48 in 2000 dollars) and $41 ($44 in 2000 dollars) at the self-sustainable

and the subsidized centers, respectively.

Performance measures reported in this literature are insufficient to establish

benchmarks for ANMCs. Studies reported few performance measures used different

methodologies for calculating costs and only one study compared ANMCs. Multi-site

studies are needed that compare multiple standardized performance measures and

include all types of costs.

Presented here are findings from a study that examined services, funding, and cost

structures of six ANMCs and compared their relative efficiency based on more than 40

performance measures. Findings reported in this article include funding sources and

financial performance measures based on encounters and patients. Components of the

performance measures are defined so that future studies can replicate the methodology

as ANMCs work towards establishing necessary benchmarks.

8

1.2.2 BANK PROFILE

THE TAMIL NADU STATE APEX CO-OPERATVE BANK LIMITED was

registered on 23rd November 1905 and started functioning on 26th November

1905.

The bank has completed 104 years and entered into 105th year of useful service

to the farmers.

The various cooperative institutions like the District Central Cooperative Banks,

Primary Agricultural Cooperative Banks & Primary Weavers Cooperative

Societies and Apex Cooperative Institutions.

The Authorized share Capital of the Bank is Rs.125.00 Crores. The Share

Capital of the Bank as on 31.03.2010 is Rs.61.07 Crores.

Financial assistance is provided to the DCCBs every year to purchase

equipments like Computers, Fax machines, to modernize.

The Bank is catering to the needs of the public in Chennai through its network of

44 Branches and 1Extension counter situated in and around the city.

The National Federation of State Cooperative Banks limited (NAFSCOB) has

instituted a scheme of best performance awards to Apex bank.

9

BANK’S PRODUCT

Deposits from public- Bank accept fixed deposit and requiring deposits.

Jewel loan to customers- Bank provide loan to customer for jewel kept in

bank and get money.

Agricultural loan- The DCCBs bank is distribute the agricultural loan to

farmers.

Loan to Consumer’s Cooperative- In wholesales stores are providing loan

for develop their business.

Loan to cooperative printing press- To provide loan to develop the

process.

Loans to Urban Cooperative Bank- TNSC bank limited provide loans to

Urban Co-operative Bank for develop the bank process.

.

10

CHAPTER – 2

ANALYSIS AND INTERPRETATION

2.1FINANCIAL ANALYSIS TOOLS

2.1.1 RATIO ANALYSIS

2.1.1.1 RATIO OF SHARE CAPITAL TO OWNED FUND

SHARE CAPITAL *100 / OWNED FUNDS

YEAR SHARE CAPITAL OWNED FUND %

2004-2005 40,94,70,000.00 439,15,78,942.00 9.300

2005-2006 53,47,60,000.00 563,97,40,252.00 9.280

2006-2007 56,60,20,000.00 617,47,32,751.00 9.160

2007-2008 61,07,10,000.00 687,83,28,714.00 8.878

2008-2009 61,07,10,000.00 693,60,81,799.00 8.804

11

INTERPRETATION

The data shows a gradual increase in share capital and owned funds. It is also observed that percentage increase in owned fund is more than that of share capital over five years.

In the year 2007-2008 and 2008-2009, there is no change in share capital value.

2004-2005 2005-2006 2006-2007 2007-2008 2008-20090

1000000000

2000000000

3000000000

4000000000

5000000000

6000000000

7000000000

share capitalowned fund%

12

2.1.1.2 RETURN ON ASSETS

NET PROFIT *100 / TOTAL ASSETS

YEAR NET PROFIT TOTAL ASSETS %

2004-2005 25,37,71,690.00 4793,45,67,563.77 0.529

2005-2006 28,01,59,366.31 5075,25,86,823.29 0.550

2006-2007 21,78,09,498.03 5249,34,46,430.29 0.414

2007-2008 15,11,76,286.30 5890,29,83,797.79 0.256

2008-2009 33,73,97,767.23 6967,83,59,647.33 0.484

2004-2005 2005-2006 2006-2007 2007-2008 2008-20090

10000000000

20000000000

30000000000

40000000000

50000000000

60000000000

70000000000

Net profitTotal assets%

13

INTERPRETATION

The data shows a gradual increase in the both net profit around 8 cr. Whereas increase in total assets is by 2000 cr. The ratio of net profit to total assets does not follow any trend and is varying.

It can be seen that in the year 2007-2008 net profit decreased drastically. This may be attributed to the new tax policy implemented by Government. So bank net profit are reduced and in the following year i.e. 2008-2009 the net profit position change.

14

2.1.1.3 AMOUNT PAYMENT OF DIVIDENT TO NET PROFIT

DIVIDEND * 100 / NET PROFIT

YEAR DIVIDEND NET PROFIT %

2004-2005 6,55,15,200.00 25,37,71,690.00 25.810

2005-2006 5,88,23,600.00 28,01,59,366.31 20.990

2006-2007 4,52,81,600.00 21,78,09,498.03 20.780

2007-2008 5,49,63,900.00 15,11,76,286.30 36.350

2008-2009 8,54,99,400.00 33,73,97,763.23 25.340

2004-2005 2005-2006 2006-2007 2007-2008 2008-20090

50000000

100000000

150000000

200000000

250000000

300000000

350000000

dividendNet profit%

15

INTERPRETATION

In this data shows the amount payment of dividend position is not constant.

Because the payment of dividend rate is vary from one year to another year but

bank fixed the rate is based on performance.

The percentage is high standard of year 2007-2008 for reason is net profit earn

low margin. But the bank provide 9 % dividend rate to share holders so, the

dividend percentage is more.

16

2.1.1.4 NET PROFIT TO WORKING CAPITAL

NET PROFIT * 100 / WORKING CAPITAL

YEAR NET PROFIT WORKING CAPITAL

%

2004-2005 25,37,71,690.00 4788,74,67,760.00 0.529

2005-2006 28,61,59,366.31 5068,42,68,960.00 0.550

2006-2007 21,78,09,498.03 5244,98,08,820.00 0.415

2007-2008 15,11,76,286.30 5886,94,18,300.00 0.256

2008-2009 33,73,97,767.23 6964,55,48,870.00 0.484

2004-2005 2005-2006 2006-2007 2007-2008 2008-20090

10000000000

20000000000

30000000000

40000000000

50000000000

60000000000

70000000000

Net profitWorking capital%

17

INTERPRETATION

The analysis shows a gradual increase in both net profit and working

capital. It is also observed that percentage increase in working capital is

more than that of net profit over five year.

18

2.1.1.5 OWNED FUND FROM WORKING CAPITAL

OWNED FUND *100 / WORKING CAPITAL

YEAR OWNED FUND WORKING CAPITAL

%

2004-2005 439,13,78,942.00 4788,74,67,760.00 9.170

2005-2006 563,97,40,252.00 5068,42,68,960.00 11.130

2006-2007 617,47,32,759.00 5244,98,08,820.00 11.770

2007-2008 687,83,28,714.00 5886,94,18,300.00 11.680

2008-2009 693,60,81,799.00 6964,55,48,870.00 9.950

2004-2005 2005-2006 2006-2007 2007-2008 2008-20090

10000000000

20000000000

30000000000

40000000000

50000000000

60000000000

70000000000

Owned fundWorking capital%

19

INTERPRETATION

The data shows the working capital increasing position. In the same time the owned fund also increase gradually. But the year 2008-2009 percentage are reduced for the bank because of the increase in reserve fund but the working capital is not increase that much of owned fund.

20

2.1.2.1 Comparative balance sheet as on 31st march

Particulars 2008 2009 Different %

Liabilities

1. Share capital 443,75,10,000.00 635,09,10,000.00 191,34,00,000.00 30.12

2. Reserve 626,76,18,714.44 632,53,71,799.62 5,77,53,085.00 0.91

3. Surplus 15,11,76,286.30 33,73,97,767.23 18,62,21,480.90 55.19

4. Borrowings 608,40,24,496.00 830,58,55,003.00 222,18,30,507.00 26.75

5. Branch adjustment

------------------- 39,16,700.07 39,16,700.07 100.00

6. Deposits 3993,71,49,661.16 4429,15,81,597.70 435,44,31,930.00 9.83

7. Liquid Liabilities

92,61,17,795.39 95,99,80,653.45 3,38,62,858.10 3.52

8. Other liabilities 109,93,86,794.45 310,33,46,126.26 200,39,59,332.00 64.57

Total liabilities 5890,29,83,747.74 6967,83,59,647.33

Assets

1. Fixed assets 736,04,179.90 703,47,547.49 (32,56,632.41) (4.62)

2. Other assets 21,14,76,252.63 27,05,98,583.44 5,91,22,330.80 21.84

3. Advance 3336,26,10,831.25 3296,00,83,425.03 (40,25,27,410.00) (12.21)

4. Investment 1458,51,13,237.00 645,56,74,636.00 188,05,61,400.00 11.42

5. Liquid assets 367,01,79,246.96 296,16,55,455.03 (70,85,23,791.00) (23.92)

6. Money call 700,00,00,000.00 1695,00,00,000.00 95,00,00,000.00 58.70

Total assets 5890,29,83,747.74 6967,83,59,647.33

21

INFERENCES:

The profitability of the bank appears to be impressive, as judged by increase in reserves and surplus by 55.19%, it results in increase in earnings per share and dividend per share.

Fixed assets are reduced by 4.62%, so it is unfavorable, as long-term funds are not used for acquiring of fixed assets. Whereas increase in long-term funds shows that solvency of the bank is satisfactory.

Advances are reduced by 12.21%, so the bank earns the interest to be reduced for the previous year. The bank will provide loan to public for earn interest.

Deposits are increase 9.83% but it is not sufficient for the banking sector. If the deposits increase bank provide more loans and get interest huge.

22

2.1.2.2 Comparative balance sheet as on 31ST march


Liabilities

1. Share capital 247,94,20,000.00 443,75,10,000.00 195,80,90,000.00 44.12

2. Reserve 560,87,12,759.33 626,76,18,714.44 65,89,05,955.11 10.51

3. surplus 21,78,09,498.03 15,11,76,286.30 (6,66,33,211.70) (44.07)

4. Borrowings 878,22,74,925.00 608,40,24,496.00 (269,82,50,429.00) (44.34)


43,37,167.85 ------------------- (43,37,167.85) ( --)

6. Deposits 3263,50,40,050.00 3993,71,49,661.16 730,21,09,610.00 18.28

7. Liabilities 72,20,45,583.10 92,61,17,795.39 3,79,35,070.30 24.78

8. Other liabilities 204,38,06,437.70 109,93,86,794.45 (94,44,18,724.00) (85.90)


Assets

7. Fixed assets 7,08,80,439.14 736,04,179.90 27,23,74,076.00 3.70

8. Other assets 43,21,50,298.60 21,14,76,252.63 (22,06,74,046.60) (104.34)

9. Advance 242,95,93,933.52 3336,26,10,831.25 93,30,16,900.00 2.79

10. Investment 1083,73,78,158.00 1458,51,13,237.00 374,77,35,080.00 25.69

11. Liquid assets 316,34,43,601.00 367,01,79,246.96 50,67,35,645.90 13.80

12. Money call 556,00,00,000.00 700,00,00,000.00 144,00,00,000.00 20.57

Total assets 5249,34,46,430.29 5890,29,83,747.74

23

INFERENCES:

The profitability of the bank is low to compare of pervious year. The reserve and surplus is (44.07%), so dividend decreases for the share holders.

Fixed assets is increase 3.70%, so the assets is increase normally its favor for the institution

Advance are increase 2.79%, so the bank provide loans to customers and earn interest more compare to previous year

Deposits are increases to 18.28% so the bank has more funds to invest are increasing their actives. But the bank has to pay the interest for depositor.

24


Liabilities

1. Share capital 3,47,60,000.00 247,94,20,000.00 194,46,60,000.00 78.43

2. Reserve 510,49,00,252.00 560,87,12,759.33 50,37,32,507.10 9.72

3. Surplus 28,01,59,366.31 21,78,09,498.03 (6,23,49,868.3) (28.62)

4. Borrowings 1026,75,97,090.66 878,22,74,925.00 (328,53,22,165.00) (37.40)


21,73,265.00 43,37,167.85 21,63,902.85 49.89

6. Deposits 3126,78,27,388.61 3263,50,40,050.00 134,72,12,670.00 4.12

7. Liabilities 68,36,27,205.50 72,20,45,583.10 4,27,55,545.46 5.92



Assets

1. Fixed assets 7,31,95,585.82 7,08,80,439.14 (28,15,146.68) (3.26)

2. Other assets 13,16,82,887.70 43,21,50,298.60 30,04,67,411.10 69.52

3. Advance 3040,70,58,390.00 3242,95,93,933.52 202,25,35,543.52 6.23

4. Investment 1105,36,40,414.00 1083,73,78,158.00 (216,26,62,260.00) (1.995)

5. Liquid assets 297,70,09,538.00 316,34,43,601.00 18,64,34,063.00 5.89

6. Money call 611,00,00,000.00 556,00,00,000.00 (55,00,00,000.00) (9.892)

Total assets 5075,25,86,823.29 5249,34,46,430.29


25

INFERENCES:

The profitability of the bank is low to compare of pervious year. The reserve and surplus is (28.62%), so dividend decreases for the share holders.


Advance is increase 6.23%, so the banks provides loans to customers and earn interest more compare to previous year.

Deposits are increases to 4.12% so the banks have funds to invest are increasing their actives. but the bank have to pay the interest for depositor

26



Liabilities

1. Share capital 40,94,70,000.00 53,47,60,000.00 12,52,90,000.00 23.42

2. Reserve 439,13,78,942.56 510,49,00,252.00 71,36,01,310.00 13.97

3. Surplus 25,37,71,690.20 28,01,59,366.31 2,63,87,676.10 9.41

4. Borrowings 1082,17,69,938.98 1026,75,97,090.66 124,58,27,160.00 10.32


----------------------- 21,73,265.00 21,73,265.00 100.00

6. Deposits 3062,57,86,622.88 3126,78,27,388.61 64,20,40,760.00 2.053

7. Liabilities 86,32,93,583.20 68,36,27,205.50 (17,96,66,377.70) (26.28)



Assets

1. Fixed assets 7,18,40,253.79 7,31,95,585.82 13,55,332.03 1.85

2. Other assets 12,24,25,523.10 13,16,82,887.70 92,57,364.60 7.03

3. Advance 2823,30,14,280.00 3040,70,58,390.00 217,40,44,110.00 7.14

4. Investment 1209,09,53,372.00 1105,36,40,414.00 (103,73,12,960.00) (9.38)

5. Liquid assets 323,46,32,196.00 297,70,09,538.00 (25,76,22,658.00) (8.63)

6. Money call 417,00,00,000.00 611,00,00,000.00 194,00,00,000.00 31.75


1,17,01,938.89 ------------------- 1,17,01,938.89 (--)

Total assets 4793,45,67,563.77 5075,25,86,823.29

27

INFERENCE:



Advances are increase 7.14%, so the bank provides loans to customers and earn interest more compare to previous year.

Deposits are increases to 2.053% so the banks have funds to invest are increasing their actives. But the bank has to pay the interest for depositor.

28



Liabilities

1. Share capital 37,81,60,000.00 40,94,70,000.00 31,31,000.00 7.64

2. Reserve 364,31,65,402.00 439,13,78,942.56 74,82,13,090.00 17.03

3. Surplus 19,41,38,562.63 25,37,71,690.20 5,96,33,127.60 23.49

4. Borrowings 818,03,08,749.00 1082,17,69,938.98 264,14,61,181.00 24.40


3,93,67,190.47 ----------------------- (3,93,67,190.47) (--)

6. Deposits 3119,87,19,120.00 3062,57,86,622.88 (57,29,32,500.00) (1.87)

7. Liabilities 103,17,17,335.00 86,32,93,583.20 (16,84,23,751.80) (19.50)



Assets

1. Fixed assets 12,00,07,909.89 7,18,40,253.79 (4,81,67,656.01) (67.04)

2. Other assets 11,91,05,988.70 12,24,25,523.10 61,13,73,217.50 83.69

3. Advance 2427,49,43,290.00 2823,30,14,280.00 395,80,70,990.00 14.01

4. Investment 1356,00,19,825.00 1209,09,53,372.00 (146,90,66,450.00) (12.15)

5. Liquid assets 243,96,53,910.00 323,46,32,196.00 79,49,78,286.00 24.57

6. Money call 455,00,00,000.00 417,00,00,000.00 (38,00,00,000.00) (9.112)


--------------------- 1,17,01,938.89 1,17,01,938.89 100.00

Total assets 4506,37,30,924.73 4793,45,67,563.77

29

INFERENCE:



Advances are increase 14.01%, so the bank provides loans to customers and earn interest more compare to previous year.

Deposits are reduced to 1.87% so the banks are reduced to invest are their actives. But the bank has to pay the interest for depositor.

30

2.1.3.1 Common size balance sheet as on 31st march 2009

Particulars 2009 % of assets and liabilities

Liabilities

1. Share capital 635,09,10,000.00 9.12

2. Reserve 632,53,71,799.62 9.10

3. Surplus 33,73,97,767.23 0.50

4. Borrowings 830,58,55,003.00 11.92

5. Branch adjustment 39,16,700.07 0.005

6. Deposits 4429,15,81,597.70 63.56

7. Liabilities 95,99,80,653.45 1.38

8. Other liabilities 310,33,46,126.26 4.454

Total liabilities 6967,83,59,647.33 100.00

Assets

1. Fixed assets 703,47,547.49 0.10

2. Other assets 27,05,98,583.44 0.39

3. Advance 3296,00,83,425.03 47.30

4. Investment 1645,56,74,636.00 23.63

5. Liquid assets 296,16,55,455.03 4.25

6. Money call 1695,00,00,000.00 24.33

Total assets 6967,83,59,647.33 100.00

31



Liabilities

1. Share capital 443,75,10,000.00 7.53

2. Reserve 626,76,18,714.44 10.64

3. Surplus 15,11,76,286.30 0.25

4. Borrowings 608,40,24,496.00 10.32

5. Branch adjustment ------------------- ---

6. Deposits 3993,71,49,661.16 67.80

7. Liabilities 92,61,17,795.39 1.57



Assets

1. Fixed assets 736,04,179.90 0.12

2. Other assets 21,14,76,252.63 0.36

3. Advance 3336,26,10,831.25 56.64

4. Investment 1458,51,13,237.00 24.76

5. Liquid assets 367,01,79,246.96 6.231

6. Money call 700,00,00,000.00 11.88

Total assets 5890,29,83,747.74 100.00

32


Particulars 2007 amount % of assets and liabilities

Liabilities

1. Share capital 247,94,20,000.00 4.72

2. Reserve 560,87,12,759.33 10.69

3. Surplus 21,78,09,498.03 0.41

4. Borrowings 878,22,74,925.00 16.73


6. Deposits 3263,50,40,050.00 62.16

7. Liabilities 72,20,45,583.10 1.37



Assets

1. Fixed assets 7,08,80,439.14 0.14

2. Other assets 43,21,50,298.60 0.82

3. Advance 3242,95,93,933.52 61.78

4. Investment 1083,73,78,158.00 20.64

5. Liquid assets 316,34,43,601.00 6.03

6. Money call 556,00,00,000.00 10.6

Total assets 5249,34,46,430.29 100.00

33


Liabilities

1. Share capital 53,47,60,000.00 1.05

2. Reserve 510,49,00,252.00 10.06

3. Surplus 28,01,59,366.31 0.60

4. Borrowings 1026,75,97,090.66 23.78


6. Deposits 3126,78,27,388.61 61.61

7. Liabilities 68,36,27,205.50 1.35



Assets

1. Fixed assets 7,31,95,585.82 0.144

2. Other assets 13,16,82,887.70 0.26

3. Advance 3040,70,58,390.00 59.91

4. Investment 1105,36,40,414.00 21.78

5. Liquid assets 297,70,09,538.00 5.87

6. Money call 611,00,00,000.00 12.04

Total assets 5075,25,86,823.29 100.00


34



Liabilities

1. Share capital 40,94,70,000.00 0.85

2. Reserve 439,13,78,942.56 9.16

3. Surplus 25,37,71,690.20 0.53

4. Borrowings 1082,17,69,938.98 22.58

5. Branch adjustment ----------------------- ---

6. Deposits 3062,57,86,622.88 63.40

7. Liabilities 86,32,93,583.20 1.80



Assets

1. Fixed assets 7,18,40,253.79 0.15

2. Other assets 12,24,25,523.10 0.03

3. Advance 2823,30,14,280.00 58.90

4. Investment 1209,09,53,372.00 25.22

5. Liquid assets 323,46,32,196.00 6.75

6. Money call 417,00,00,000.00 8.70

7. Branch adjustment 1,17,01,938.89 0.02

Total assets 4793,45,67,563.77 100.00

35

Common size balance sheet of share capital, deposit, borrowings trend for year 2005-2009

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

0

20

40

60

80

100

depositsborrowingshare capital

Common size balance sheet of investment, advance, fixed assets for the year 2005-2009

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

0102030405060708090

investmentadvance fixed assets

Interpretation:

The above trend charts show the following facts:

a) The share capital has shown an increasing trend.

b) The position of borrowings have not shown any change and remains approximately same.

c) Deposits have increased in the year 2007-08 but in the subsequent year it has decreased.

d) The investments remained constant over the period between 2005-1007 but in 2008-09 shown a slight decrease. A similar trend is shown for advances also.

e) Fixed assets remains constant from 2004-05 to 2008-09.

36

FUNDS FLOW STATEMENTS

2.1.4.1 Statement showing in working capital increasing (or) decreasing

Particular 2008 2009 Increase Decrease

Assets

Liquid assets 5890,29,83,747.74 6967,83,59,647.33 1077,53,75,899.59 -------------------

Total assets 5890,29,83,747.74 6967,83,59,647.33

Liabilities

Bills for collection

3,35,65,437.08 3,28,10,769.33 7,54,667.75 ----------------------


Total assets –Total liabilities

5886,94,18,310.62 6964,55,48,878.00

Increasing working capital

1077,61,30,567.34 ---------------------- ---------------------- 1077,61,30,567.34

6964,55,48,878.00 6964,55,48,878.00 1077,61,30,567.34 1077,61,30,567.34

37

Calculation of from operation

Particular Rs Particular Rs

To reserve

To balance

5,77,53,085.18

33,73,97,767.23

By balance

By fund flow operation

15,11,76,286.30

39,51,50,852.41 39,51,50,852.41

Funds flow statement

Sources Rs. Application Rs.

24,39,74,566.11

Funds flow operation

Issue of share

Deposits

Interest

Borrowing

Other liabilities

Branch adjustment

24,39,74,566.11

191,34,00,000.00

464,19,31,936.54

3,46,17,525.80

193,43,30,507.00

200,39,59,331.81

39,16,700.07

Increase working capital

1077,61,30,567.34

1077,61,30,567.34 1077,61,30,567.34

38



Assets

Liquid assets 5249,34,46430.29 5890,29,83,747.74 640,95,37,317.45 -------------------

Total assets 5249,34,46430.29 5890,29,83,747.74

Liabilities


4,36,37,615.01 3,35,65,437.08 1,00,72,177.93 ----------------------



5244,98,08,815.28 5886,94,18,310.62


641,96,09,495.34 -------------- -------------- 641,96,09,495.34

5886,94,18,310.62 5886,94,18,310.62 641,96,09,495.34 641,96,09,495.34

39

Calculation of funds from operation


To reserve

To balance

65,89,05,955.11

15,11,76,286.30

By balance


21,78,09,498.03

81,00,82,241.41 81,00,82,241.41


59,22,72,743.37



Issue of share

Deposits

Interest

59,22,78,743.37

195,80,90,000.00

738,47,09,610.00

21,41,44,390.20


Borrowing

Other liabilities

Branch adjustment

641,96,09,495.38

278,08,50,429.00

94,44,19,643.40

43,37,167.85

1014,92,16,744.57 1014,92,16,744.57

40



Assets

Liquid assets 5075,25,86,823.29 5249,34,46430.29 174,08,59,610.00 -------------------

Total assets 5075,25,86,823.29 5249,34,46430.29

Liabilities


6,83,17,863.31 4,36,37,615.01 2,46,80,248.30 ----------------------



5068,42,68,959.98 5244,98,08,815.28


176,55,39,858.30 -------------- -------------- 176,55,39,858.30

5244,98,08,815.28 5244,98,08,815.28 176,55,39,858.30 176,55,39,858.30

41



To reserve

To balance

50,37,32,557.10

21,78,09,498.03

By balance


28,01,59,366.31

72,15,42,055.13 72,15,42,055.13


44,13,82,688.80



Issue of share

Deposits

Interest

Other liabilities

Branch adjustment

44,13,82,688.80

194,46,60,000.00

136,72,12,670.00

6,30,98,625.90

123,23,44,186.00

21,62,902.85


Borrowing

176,55,39,858.30

328,53,22,165.00

505,08,61,074.30 505,08,61,074.30

42



Assets

Current assets 4793,45,67,563.77 5075,25,86,823.29 281,80,19,260.00 -------------------

Total assets 4793,45,67,563.77 5075,25,86,823.29

Liabilities


4,70,99,769.15 6,83,17,863.31 ---------------------- 2,12,18,094.16



4788,74,67,790.00 5068,42,68,959.98


279,68,01,166.00 -------------- 279,68,01,166.00

5068,42,68,959.98 5068,42,68,959.98 176,55,39,858.30 176,55,39,858.30

43



To reserve

To balance

71,36,01,310.70

28,01,59,366.31

By balance


25,37,71,690.20

99,37,60,676.30 99,37,60,676.30


73,99,88,986.10



Issue of share

Deposits

Other liabilities

Branch adjustment

Borrowing

73,99,88,986.10

12,52,90,000.00

64,20,40,760.00

24,23,65,465.10

21,73,265.00

124,58,27,160.00


Interest

279,68,01,166.00

20,08,84,449.80

299,76,85,616.80 299,76,85,616.80

44



Assets

Current assets 4506,37,30,924.73 4793,45,67,563.77 287,08,36,639.04 -------------------

Total assets 4506,37,30,924.73 4793,45,67,563.77

Liabilities


1,50,47,743.28 4,70,99,769.15 ---------------------- 3,20,52,052.87



4504,86,83,181.45 4788,74,67,790.00


283,87,84,586.17 ---------------------- ---------------------- 283,87,84,586.17

4788,74,67,767.62 4788,74,67,767.62 287,08,36,639.04 287,08,36,639.04

45



To reserve

To balance

74,82,13,090.00

25,37,71,690.20

By balance


19,41,38,562.03

100,99,84,780.20 100,99,84,780.20


80,78,46,217.57



Issue of share

Other liabilities

Borrowing

80,78,46,217.57

3,13,10,000.00

17,09,42,227.80

264,14,61,181.00


Interest

Deposits

Branch adjustment

283,87,84,586.17

20,04,75,805.00

57,29,32,500.00

3,93,67,190.47

365,15,60,081.37 365,15,60,081.37

46

Interpretation of funds flow statement:

The above the table shows the funds flow,

1. The sudden operation in organization its meets requirement to maintain the working capital. In the statement are shows the year 2004-07 working capital is reduce but the year 2007-08 the working capital is increase for more current asset. In the organization working capital must maintain certain limit if excess amount of working capital is not help the organization for earn any income.

2. The bank funds from operation is to be decreasing the year 2005-2007. But the year 2008 the funds from operation is to be increase for the reason is reserve funds affected more in the year. So the year shows the result is changed but the next year 2009 is totally changed for the same reason reserved funds is not contribute.

3. In the year 2004-05 to 2005-06 the issue of share is increase gradually. In the year 2006-07 it change the normal increase issue of share. It increase extraordinary for the raise the fund for the develop the organization, it continuously the next year also but the changes happen in the 2008-09 for reduce the issue of share for need is not raise.

47

CHAPTER 3

FINDING AND CONCLUSIONS

3.1 Finding of the study

The study of financial performance of the TAMIL NADU STATE APEX CO-OPERATIVE BANK LIMITED is been examined in order to understand the financial healthiness of the concern. The present study is summarized in a detailed way, which helps for having a clear idea about the present position of the bank.

Share capital raised gradually 2004-09 for utilized the fund for development motive are increase the share capital point of view.

The Bank surplus is raising condition on the year 2004-06 but the year 2006-08 is reduced of the bank profit condition after that 2009 started increase the profit. Normally any institution is happen floating condition but have any reason for that floating.

The bank investment is reduced because the investment funds to contribute in the advances for provide loans to customers. Any institution is contribute excess money for various sector are get any gain.

Funds flow of the bank is increase gradually, so the institution are using the funds corrective path and constant way

48

3.2 Suggestions .

In bank, money call fund have excess in that fund to short term deposit for other bank. The money call if invest in the mutual fund and gain more from short term deposit.

The bank having depositor loan and jewel loan scheme, so the process is limited the bank increase more facilities to customer.

The Bank have owned funds in ideally, its to investment in any other sector are in share and debenture for earn income from the field and bank get some sources from share and debentures.

The bank can increase its share capital by permitting the urban cooperative bank apex institutions an cooperative sugar mills to became share holder

49

3.3 CONCLUSION

The project entitled “ A study on Financial Performance of the TAMIL NADU

STATE APEX CO-OPERATIVE BANK LIMITED is carried out with the help of

secondary data which were collected from the various report of the bank. The study was

aimed to analyze the Financial and operating efficiency of the bank during the year

based on 2005-2009.

50

BIBLIOGRAPHY

1. I.M.PANDEY, “Financial Management”, Vikas Publication, Ninth edition, year 2009.

2. PRASANNA CHANDRA,” Fundamental of Financial Management”, Tata Mc-Graw Hill, fifth edition, year 2004.

Websites:

www.headerp.com

www.Investopedia.com

www.moneycontrol.com

51

APPENDICES

Balance Sheet as on 31st march for five years

Particulars 2005 2006 2007 2008 2009

Liabilities

9. Share capital 40,94,70,000.00 53,47,60,000.00 247,94,20,000.00 443,75,10,000.00 635,09,10,000.00

10. Reserve 439,13,78,942.56 510,49,00,252.00 560,87,12,759.33 626,76,18,714.44 632,53,71,799.62

11. Surplus 25,37,71,690.20 28,01,59,366.31 21,78,09,498.03 15,11,76,286.30 33,73,97,767.23

12. Borrowings 1082,17,69,938.98 1026,75,97,090.66 878,22,74,925.00 608,40,24,496.00 830,58,55,003.00


----------------------- 21,73,265.00 43,37,167.85 ------------------- 39,16,700.07

14. Deposits 3062,57,86,622.88 3126,78,27,388.61 3263,50,40,050.00 3993,71,49,661.16 4429,15,81,597.70

15. Liabilities 86,32,93,583.20 68,36,27,205.50 72,20,45,583.10 92,61,17,795.39 95,99,80,653.45

16. Other liabilities

56,90,96,785.90 81,14,62,251.00 204,38,06,437.70 109,93,86,794.45 310,33,46,126.26

Total liabilities

4793,45,67,563.77 5075,25,86,823.29 5249,34,46,430.29 5890,29,83,747.74 6967,83,59,647.33

Assets

8. Fixed assets 7,18,40,253.79 7,31,95,585.82 7,08,80,439.14 736,04,179.90 703,47,547.49

9. Other assets 12,24,25,523.10 13,16,82,887.70 43,21,50,298.60 21,14,76,252.63 27,05,98,583.44

10. Advance 2823,30,14,280.00 3040,70,58,390.00 242,95,93,933.52 3336,26,10,831.25 3296,00,83,425.03

11. Investment 1209,09,53,372.00 1105,36,40,414.00 1083,73,78,158.00 1458,51,13,237.00 645,56,74,636.00

12. Liquid assets 323,46,32,196.00 297,70,09,538.00 316,34,43,601.00 367,01,79,246.96 296,16,55,455.03

13. Money call 417,00,00,000.00 611,00,00,000.00 556,00,00,000.00 700,00,00,000.00 1695,00,00,000.00


1,17,01,938.89 ------------------- ------------------- ------------------- -------------------

Total Assets 4793,45,67,563.77 5075,25,86,823.29 5249,34,46,430.29 5890,29,83,747.74 6967,83,59,647.33

52

Documents

Financial Performan