1.

1 INTRODUCTION
As observed in the preceding Chapter, a basic limitation of the traditional financial statements comprising balance sheet and the profit ad loss account is that the do not give all the information related to the financial operations of a fir. Nevertheless, they provide some extremely useful information to the extent that the balance sheet mirrors the financial position on a particular date in terms of structure of assets, liabilities and owners equity ad so on and the profit ad loss account shows the results of operations during a certain period of time in terms of the revenues obtained and the cost incurred during a certain period of time in terms of summarized view of the financial position and operations of a firm Therefore, much can be learnt about a firm from a careful examinations of its financial statements as invaluable documents/performance reports. The analysis of financial statements is thus, a important aid to financial analysis. The focus o financial analysis is key figures in the financial statements and the significant relationship that exists between them. The analysis of financial statements is a process of evaluating the relationship between component part of financial statements to obtain a better understanding of the firms position ad performance. The first task of the financial analyst is to select the information relevant to the decision under consideration from the total information contained in the financial statements. The second step is to arrange the information in a way to highlight significant relation ships. The final step is interpretation and drawing of inferences and conclusions. In brief financial analyst is the process of selection , relation and evaluation.

The present chapter is devoted to an in-depth analysis of financial statements and its use for decision making by various parties interested in them. Te focus of the chapter I on ratio analysis as the most widely used technique of financial statements analysis. Banks are in the business of accepting deposits for the purpose of lending. They act as financial intermediaries between depositors with surplus funds and borrowers who are in need of funds. Banks occupy a pivotal place in the payment system for government, business and house holds. Thus, play a vital role in the economic and financial life of the country. The banking sector in the country has undergone a metamorphic persuade the policies of interest rate deregulation. The most important change that has overtaken the nations banking industry, relates to the fact that the competitive forces are sought to be introduced consciously in the financial services sector wide to the entry of foreign banks and new private sector banks. After the nationalization of 14 major commercial banks in the year 1969, no new private banks were licensed by RBI in the country though there was no legal bank on the entry of private sector banks. In the recognition of the need to introduce greater completion with a view to achieving higher productivity and efficiency of the banking system, RBI issued few guidelines on January 1993, for the study of private sector banks. Subsequently new commercial banks have been granted license to start banking operation. The private sector banks have been very aggressive in business expansion and is also reporting higher profit levels taking the advantage of technology and skilled manpower. In certain areas, their banks have been out crossed the other group of banks including foreign banks.

PRIVATE BANKING:
Private Banks are the owned by the private individuals or corporation and not by the government of cooperative societies. In India 32 private banks are there. In India, ING 2

bank was the first to offer private banking services on ING taking over the erstwhile VYSYA Bank. The private banking arm operates as a division of the ING VYSYA Bank .ING private banking worldwide operates through 90 business units in 60 different countries servicing more than 6 million clients. Private banking is the all advice products and services that contribute to unlocking the world of investment opportunities. Contribution from ING VYSYA bank the total assets of the bank for the year under preview increased from 10718 crores to 11597 crores recording a growth of 8.2per cent while the deposits of the bank stood at 9187 crores. The bank recorded on deposit growth of 14per cent in deposits for the period under review. Reflecting a quantum growth of 425 crores in absolute terms savings banks deposits increased by 90 crores for the same period indicating growth of 9per cent. Indian consumer behaviour- consumer will favour products that offer the most quality performance and innovative features consumer behaviour is the process where the individuals decides whether, what, when, how and from whom to purchase goods and services.

1.2. NEED FOR THE STUDY

Financial services are one of the dominating sectors in the Indian financial system. The goal of marketing is to attract new customers by promising superior value, and to retain customers by delivering services. It is very important for knowing the customer awareness and preferences of the customer and understands what the customer feelings about their service and products. This study includes assessing the future prospects of ING VYSYA bank by the past performance of the bank; it is well evaluated by the previous financial statements which gave a clear picture about the financial condition of the bank.

1.3. OBJECTIVE OF THE STUDY

The main objective of the study is to evaluate the financial data of ING VYSYA Bank and asses the performance of the organization by its financial reports. To understand the gaps between customer expectations and performance. To provide insights into corporate expectations and achieve customer satisfaction. To compare the financial reports year after year and asses the organization. Comparison of actual figures with standards, and to introduce necessary measurements for strengthening financial structure.

1.4

METHODOLOGY
Methodology is the specification of methods and procedures for acquiring the

information. It is the overall operational pattern or frame work of the project that stipulates what information is to be collected, from which sources and by what procedures. For the study the method used is descriptive. DATA COLLECTION TECHNIQUES: Use of both primary and secondary sources of data in the study Use of primary source of information by collecting the financial reports from the organization. Secondary data collected by visiting libraries and by use of business journals and reference books. Analysis and interpretation of the financial data . Making recommendations.

1.5. LIMITATIONS OF THE STUDY

Time has been the main limiting factor since the duration for study is one month is not sufficient to study & obtain detailed information. This study is restricted to Srikakulam; the findings of the study cannot be generalized to the whole Organization. The analysis is based on past performance, which may not predict the future and the findings will not hold good for a long.

Most of the data was not given by the organization due to confidentiality.

2.1. INDUSTRY PROFILE

History of banking in India:
Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades Indias banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote comers of the country. This is one of the main reasons of Indias growth process. The governments regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dials a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian banking system can be segregated into three distinct phases. They are as mentioned below, Early phase from 1786 to 1969 of Indian banks Nationalization of Indian banks up to 1991 prior to Indian banking Sector reforms. New phase of Indian banking system with the advent of Indian Financial & banking sector reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as phase I, phase II, and phase III. PHASE 1: The general bank of India was set up in the year 1786. Next came bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and imperial Bank of India was established which started as private shareholders banks. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of Mysore was set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the government of India came up with the Banking Companies Act, 1949 which was later changed to banking regulation act 1949 as per amending act of 1965. (Act no 23 of 1965) Reserve Bank of India was vested with extensive powers for the supervision of banking India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the postal department was comparatively safer. Moreover, funds were largely given to traders. PHASE 2: Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed state Bank of

India to act as the principal agent of RBI and to handle banking transactions of the Union and State Government all over the country. Seven banks forming subsidiary of state Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the Prime Minister of India, Mrs. Indira Gandhi, 14 major commercial banks in the country were nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80per cent of the banking segment in India under Government ownership. The following are the steps taken by the government of India to Regulate Banking Institutions in the Country. 1949: Enactment of Banking Regulation Act 1955: Nationalization of State Bank of India 1959: Nationalization of SBI subsidiaries 1961: Insurance cover extended to deposits 1969: Nationalization of 14 major banks 1971: Creation of credit guarantee corporation 1975: Creation of regional rural banks 1980: Nationalization of seven banks with deposits over 200 crores.

After the nationalization of banks the branches of the public sector bank India rose to approximately 800per cent in deposits and advances took a huge jump by 11,000per cent Banking in the sunshine of government ownership gave the public implicit faith and immense confidence about the sustainability of these institution. This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991 under the

10

chairmanship of M.Narasimham, a committee was set up by his name, which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The Entire system became more convenient and swift time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macro economics shock as other East Asian Countries suffered. This is all due to a flexible exchanged rate regime the foreign reserves are high, the capital account is not yet fully convertible and banks and their customers have limited foreign exchange exposure.

Banking Sector in India

11

Structure of the organized banking sector in India

Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786 this was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the state bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign banks like HSBC and Credit l loans started their Calcutta operations in the 1850s .At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allah bad Bank set up in 1865. By the 1900s, the market expanded with the establishment of banks like Punjab national bank, in 1895 in Lahore; Bank of India, in 1906. in Mumbai - both of which were founded under private ownership. Indian banking sector was formally regulated by Reserve bank of India from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.

Nationalization
The next significant milestone in Indian Banking happened in the late 1960s when the then Indira Gandhi government nationalized, on 19th July, 1969, 14 major commercial Indian banks, followed by nationalization of 6 more commercial Indian banks in 1980. The stated reason for the nationalization was more control of credit delivery. After this, until the 1990s, the nationalized banks grew at a Leisurely pace of around 4per cent, closer to the average growth rate of the Indian economy. After the amalgamation of New Bank of India with Punjab National Bank, currently there are 19 nationalized banks in India:

Allahabad Bank Andhra Bank 12

Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank Union Bank of India United Bank of India UCO Bank Vijaya Bank

Liberalization
In the early 1990s the then p.v. Narasimha Rao government embarked on a policy of liberalization and gave licenses to a small number of private banks, which came to be known as New Generation tech-savvy banks, which included banks like ICICI Bank and HDFC Bank. This move along with the rapid growth in the economy of India, kick started 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 and foreign banks.

13

However there had been a few hiccups for these new banks with many either being taken over like Global Trust Bank while others like Centurion Bank have found the going tough. The next stage for the Indian banking has been setup 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 10per cent.

Current scenario
Currently (2005), overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets-as compared to other banks incomparable economies in its region. The Reserve Bank of India is an

autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility-without any stated exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector, the demand for banking services-especially retail banking, mortgages and investment services are expected to be strong. M&As, takeovers, asset sales and much more action (as it is unraveling in China) will happen on this front in India. Recently (March 2006), the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10per cent. This is the first time an investor has been allowed to hold more than 5per cent in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5per cent in the private sector banks would need to be vetted by them.

14

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 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 18.2per cent and 6.5per cent.

Reserve Bank of India

Reserve bank of India (RBI) is the central bank of the country and is different from central bank of India. The central bank of the country is the Reserve bank of India. This was established in April 1935 with a share capital of rupees 5 crores on the basis of the recommendations of the Hilton young commission. The share capital was divided into shares of rs.100 each fully paid which was entirely owned by private shareholders in the beginning. The government held shares of nominal value of rs.2, 20,000. Reserve bank of India was nationalized in the year 1949. the general superintendence and direction of the bank is entrusted to central board of Directors of 20 members, the Governor and four deputy governors, one government official from the ministry of finance, ten nominated directors by the government to give representation to important elements in the economic life of the country, and four nominated directors by the central government to represent the four local boards with the headquarters at Mumbai, Kolkata, Chennai and New Delhi. Local boards consists of five members each central government appointed for term of four years to represent territorial and economic , interests of co-operative and indigenous banks.

15

The Reserve bank of India act, 1934 was commenced on April 1, 1935. The act, 1934(11of 1934) provides the statutory basis of the functioning of the bank. The bank was constituted for the need of following: To regulate the issue of bank notes To maintain reserves with a view to securing monetary stability

2.2. COMPANY PROFILE

ING VYSYA an over view:
ING VYSYA Bank Ltd., is an entity formed with the coming together of erstwhile, VYSYA Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of Dutch origin, during Oct 2002. The origin of the erstwhile VYSYA Bank was pretty humble. It was in the year 1930 that a team of visionaries came together to found a bank that would extend a helping hand to those who weren't privileged enough to enjoy banking services. It's been a long journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank. In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank made rapid strides to reach the coveted position of being the number one private sector bank. In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations, the then Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank 'Stupendous'. The year of 2005 was the 75th anniversary or Platinum Jubilee year.

ING GROUP
Over the 150 years ING group to become over of the largest life insurance organizations in the worlds. Today It touches the lives over 50 million people across 65 countries. It offers a range of financial services including insurance pensions, banking and 16

asset management. In the year2000, total assets of the group stood at over INR 28,42,000 crores. ING Group has wide and deep experience in setting up companies in new markets, which require substantial investments underlining INGs long term commitment. In the last 20 years, ING group has establisher successful life insurance companies in 15 countries contributing to the development of insurance services in these countries. ING seeks a careful between the interests of its stakeholders: its customers shareholders, employees and society at large. it expects all its employees to act in accordance with the employees to act in accordance with the groups business principles, these

principles are based on INGs core values: responsiveness to the needs of customers, entrepreneurship, professionalism, teamwork and integrity. ING VYSYA is an joint venture between ING insurance international BV a part of ING Group, the worlds larges life insurance company (Fortune Global 500,2002), ING VYSYA bank, 1.5 million customers and over 400 outlets and GMR technologies and industries limited, a part of GMR group also based in Banglore and involved in the field of power generation, infrastructural development and several other business. ING VYSYA Life Insurance Company is headquartered at Bangalore and has established a strong presence in the cities Delhi, Mumbai, Kolkata, Hyderabad and Chennai, In addition ING VYSYA life operates in Vizag, Vijayawada, Mangalore, Mysore, Pune, Nagapur, Chandigarh and Ludhiana. The philosophy of keeping it simple items from a 150 year long history. A history of understanding consumer needs and fulfilling them. The ING group, The world 4th largest financial services Worlds second largest life insurance provider Ranked no 17th the list of global fortune 500 companies

17

It has 65 million customers in 50 countries, employing over 100000 Employees

ING insurance has rich heritage of 150 years.

ING-VYSYA GROUP IN INDIA:

ING VYSYA has four entities in India. Those are ING VYSYA bank ING VYSYA life insurance ING VYSYA mutual fund ING VYSYA financial service

ING VYSYA BANK:

ING VYSYA bank has 72 year old heritage. It is premier bank in Indian private sector. Renowned for a tradition Indian, customer centric approach, the bank is known for its innovations. It was first private bank to launch credit cards, start a housing finance subsidiary, and launch a merchant banking and leasing subsidiary to meet the needs of the changing scenario. ING took over the management of the bank in October 2002 as of now the bank over 502 outlets 300 centers bring to its client a wealth of global banking expertise, baked by traditional Indian warmth.

ING VYSYA LIFE INSURANCE:

ING VYSYA life insurance was launched in 2001, with an aim to make customers look at life insurance a fresh, not just as a tax saving device but as a means to add protection to life. At ING VYSYA life insurance the one thing we hole in highest esteem is life. We believe in enhancing the very quality of life, in addition to safe guard your security the core

18

values of ING VYSYA life insurance are to be professional, entrepreneurial, trust worthy, approachable and caring. Our vast experience in life insurance over the years, has enabled over the years, has enabled us to develop a simple method by which you cha pick an insurance plan the life maker. A tool that assists you in building a complete financial plan for life whether is protection, saving or investment Our portfolio offers product that helps cater to every financial requirement at any stage in your life.

Milestones:
The long journey of over seventy-five years has had several milestones, a few of which may be observed from the following table:

1930 Set up in Bangalore 1948 Scheduled Bank 1985 Largest Private Sector Bank 1987 The VYSYA Bank Leasing Ltd. Commenced 1988 Pioneered the concept of Co branding of Credit Cards 1990 Promoted VYSYA Bank Housing Finance Ltd. 1992 Deposits cross Rs.1000 crores 1993 Number of Branches crossed 300 Signs Strategic Alliance with BBL., Belgium. 1996 Two National Awards by Gem & Jewellery Export Promotion Council for excellent performance in Export Promotion

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Cash Management Services, & commissioning of VSAT Golden Peacock Award - for the best HR Practices by Institute of Directors. Rated as 1998 Best Domestic Bank in India by Global Finance (International Financial Journal - June 1998) 1999 Launch of Premium Savings Bank scheme with over 2 lakh new accounts State -of - the -art Date Centre at \ITPL, Bangalore 2000 RBI clears setting up of ING VYSYA Life Insurance Company 2001 ING-VYSYA commences life insurance business. The Bank launches a range of products & services like the Vys Vyapar Plus, the range 2002 of loan schemes for traders, ATM services, Smartserv -

2002 ING takes over the Management of the Bank from October 7 , 2002 2002 RBI clears the new name of the Bank as ING VYSYA Bank Ltd. 2003 Introduced customer friendly products like Orange Savings, Orange Current 2004 Introduced Protected Home Loans - a housing loan product
Introduced Solo - My Own Account for youth and Customer Service Line Phone

2005
Banking Service

2006 Saral Savings No Frills Account for the common man

In terms of pure numbers, the performance over the decades can better be appreciated from the following table:

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Comparative Figures Year Net worth Deposits Advances

Rs. in millions Profits Outlets

1940 1950 1960 1970 1980 1990 2000 2001 2002 2003 2004 2005 2006

0.001 1.40 1.60 3.00 11.50 162.10 5900.00 6527.00 6863.24 7067.90 7473.20 7094.00 1019.67

0.400 5.30 20.10 91.50 1414.30 8509.40 74240.00 81411.10 80680.00 91870.00 104780.00 125693.10 133350.00

0.400 3.80 13.50 62.80 813.70 4584.80 39380.00 43163.10 44180.00 56120.00 69367.30 90805.90 102320.00

0.001 0.09 0.13 0.74 1.13 50.35 443.10 371.90 687.50 863.50 590.01 (381.80) 90.6

4 16 19 39 228 319 481 484 483 456 523 536 575

An outlet comprises 377 branches, 56 ECs, 28 Satellite Offices and 114 ATMs as of 31st March 2006. Additionally bank also has Internet Banking mi-bank and Customer Service Line for Phone Banking Service.

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COMMON AREAS OF CUSTOMER-BANKER RELATIONSHIP SAVINGS BANK ACCOUNT

These accounts are very popular and designed to help the individuals (personal segment) to inculcate the habit of saving money and to meet their future requirement of money. Amounts could be deposited / withdrawn from these accounts through cheques / withdrawal slips/ATMs. It helps the customers to carry minimum cash besides earning interest on the balance in the account. These accounts could be opened by eligible person/s and certain organizations / agencies (as approved by the Reserve Bank of India (RBI). Customers have to provide the following documents for opening the account: Proof of Address (latest telephone / electricity / bank statement) Proof of Identity (Passport, Driving License, Identity Card issued by Government, PAN Card, Voters ID Card), Two recent photographs of the accountholder(s) Permanent Account Number (PAN) / GIR Number / Declaration in Form No. 60 / 61 Satisfactory introduction acceptable to the Bank Maintain certain minimum balance in the account as per banks norms. Interest @ 3.5 per cent per annum (prevailing interest) will be paid on the lowest end of the day closing balance from 10th to the last day of the month. Interest rates are subject to changes. Interest is credited to the account at half-yearly intervals in February/March and August/September each year. 22

Financial Instruments endorsed in favor of the account holder/s by a third party will not be collected in this account.

CURRENT ACCOUNT
Current Accounts can be opened by individuals, partnership firms, private and public limited companies, HUFs/specified associates, societies, trusts, etc. Customers have to provide the following documents for opening the account: Proof of Address (latest telephone / electricity, latest credit card / bank statement ) Proof of Identity ( Passport, Driving License, Identity Card issued by Government / , PAN Card, Voters ID Card ) Two recent photographs of the accountholder(s) / authorized signatories Permanent Account Number (PAN) / GIR Number / Declaration in Form No. 60 / 61 Partnership Letter / Deed, Memorandum / Articles of Association, Board / Trust / Managing Committee Resolution etc. depending upon the nature of the account. (The above documents are required to identify the accountholder(s) and to protect the accountholder(s) from any misuse / frauds) Satisfactory introduction acceptable to the Bank. Minimum balance as stipulated from time to time will have to be maintained. Nonmaintenance of stipulated minimum balance will attract charges. No interest is paid on credit balances kept in current account. For opening special types of current accounts like for Executors, Administrators, Trustees, Liquidators etc., the Branch Manager may be contacted who will help in opening these type of accounts. 23

SAFE DEPOSIT LOCKERS:

The facility of Safe Deposit Lockers is an ancillary service offered by the Bank. The Bank's branches offering this facility will indicate/display this information.

The major aspects governing the services are: A locker may be hired by an individual, firms, limited companies, specified associations and societies etc. Lockers are generally allotted to banks existing customer. Nomination facility is available to individual hirer of Safe Deposit Locker. In case of Loss of key, the same should be informed to the Branch immediately. Lockers are available in different sizes. Lockers are rented out for a minimum period of one year. Locker will be allotted only to the properly introduced persons Annual Rent is payable in advance. In case the locker is surrendered, advance rent for unexpired period will be refunded as per banks rules. In case of delay in payment of the annual rent, the Bank will charge interest in the form of penalty as applicable from time to time. Customers have the option to provide standing instruction for the payment of annual rent.

INTEREST ON DEPOSITS:
The Bank pays interest on deposits as per contracted rates on various deposit schemes. Interest rates are revised from time to time and made known to public. Revised interest rates are applicable only to the renewals and fresh deposits while existing deposit continue to get interest at the contracted rate/as per RBI guidelines.

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PERSONAL LOANS:
The following types of loans could be taken from the Bank. Personal Loans Consumer Durable Loans Vehicle Loans Educational Loans Housing Loans

Details of the loans could be obtained from any of the Branch.

CREDIT CARDS:
The Bank has introduced ING VYSYA BANK CREDIT CARD, a unique credit card exclusively branded as a product of ING VYSYA Bank Ltd The credit card is a plastic card, which allows you to buy products & services on credit up to the pre set limits. The free credit period allowed on the ING VYSYA Bank credit card would range from 20 50 days, depending on the date of purchase by the cardholder. The credit card would be issued to individuals between the ages of 18 to 70 years. The maximum credit limit of the credit card will be Rs. 75,000 and the minimum credit limit will be Rs. 12,000. The income criteria for issuing the credit card are as follows: Salaried Public Limited / Public Sector Rs.72,000 Other Salaried Other Income p.a p.a p.a

Rs.96,000 Rs.96,000

The annual fee for the Primary Card is Rs. 750 per annum at present and is subject to change as per the policy of the bank.

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First year fee is billed in the first statement of account of the cardholder. Service charge @ 2.95 per per cent per month or at such other rates decided by the bank from time to time on the balance carried forward from the previous bill and on all subsequent drawings on the card from the date of the transaction.

GENESIS OF ING VYSYA BANK

On the other hand, ING group originated in 1990 from the merger between National Nederland NV the largest Dutch Insurance Company and NMB Post Bank Groep NV. Combining roots and ambitions, the newly formed company called International Nederlanden Group. Market circles soon abbreviated the name to I-N-G. The company followed suit by changing the statutory name to ING Group N.V..

Profile:
ING has gained recognition for its integrated approach of banking, insurance and asset management. Furthermore, the company differentiates itself from other financial service providers by successfully establishing life insurance companies in countries with emerging economies, such as Korea, Taiwan, Hungary, Poland, Mexico and Chile. Another specialisation is ING Direct, an Internet and direct marketing concept with which ING is rapidly winning retail market share in mature markets. Finally, ING distinguishes itself internationally as a provider of employee benefits, i.e. arrangements of nonwage benefits, such as pension plans for companies and their employees. Mission: ING`s mission is to be a leading, global, client-focused, innovative and low-cost provider of financial services through the distribution channels of the clients preference in markets where ING can create value.

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The new identity: The immediate benefit to ING VYSYA Bank ltd is the pride of having become a member of global financial services giant, with an asset base of 1159 billion euros, net profit of 7.21 billion euros as of December 31 2005. Further, the presence of the group in over 50 countries, employing over 115000 people, serving over 60 million customers across the globe, only multiplies the credibility, not only across the country but also across the globe. The pride of this global identity, the back up of a financial power house and the status of being the first Indian International bank, would also greatly enhance productivity, profitability resulting in improved performance for the bank to translate into higher returns, to all the stake holders. 1 Euro = Rs. 56/- (Approx.) ING VYSYA Banks 3rd Quarter Results Net up by 194.86per cent from previous year. The Board of Directors approved the 3rd quarter financial results for the period ended 31 December 2006, at its meeting held in Bangalore today.

Finance Highlights:
The net profit after tax increased by 194.86 per cent from Rs. 4.86 crores in Q3 : 2006 to reach Rs. 14.33 crores in Q3 : 2007. The PBT increased by 109.22 per cent from Rs. 10.19 crores in Q3 : 2006 to Rs. 21.32 crores in Q 3 : 2007. The Operating Profit during the current quarter improved by 42.60per cent to reach Rs. 61.09 crores as compared to Rs. 42.84 crores reported in Q 3: 2006. The NII of the Bank improved by 13.84 per cent from Rs. 119.88 crores in Q3: 2006 to Rs. 136.47 crores in Q3: 2007. While total income improved by 9.17 per cent during the quarter, adverse interest rate movements resulted in a marginal decline in Other Income. 27

The Capital Adequacy Ratio of the Bank moved to 10.70 per cent from 10.40per cent and the total assets of the bank stood at Rs. 18,148 crores as at December 2006 up 12.71 per cent compared to Rs. 16,100 crores as at December 2005.

Announcing the results after the meeting of the Board, the Managing Director Mr. Vaughn Richtor stated Our focus on profitable growth and improving our liabilities mix continues and is reflected on the improved results. We have made good progress, but we need to ensure that our growth is also at an acceptable rate.

Final Year (FY) Results In Rs. Crores Net Interest Income Other Income Total Income Operating costs Profit before provisions Provisions & Contingencies Profit before tax Provision for taxes Profit after tax Q3 FY 2006-07 Q3 FY 2005-06 per cent Change YTD FY 2006-07 YTD FY 2005 - 06 per cent Change

136.47 40.32 176.79 115.70 61.09

119.88 42.06 161.94 119.10 42.84

13.84 -4.14 9.17 -2.85 42.60

396.88 168.68 565.56 374.33 191.23

348.29 143.96 492.25 343.94 148.31

13.95 17.17 14.89 8.84 28.94

39.77 21.32 6.99 14.33

32.65 10.19 5.33 4.86

21.81 109.22 31.14 194.86

93.80 97.43 26.92 70.51

90.32 57.99 24.28 33.71

3.85 68.01 10.87 109.17

The deposits grew by 15.06per cent to reach Rs. 14,380 crores as at December 2006 from Rs. 12,498 crores as at December 2005. The bank has been pursuing a strategy to 28

improve the share of its low cost deposits and the share of CASA in the total deposit mix has improved from Rs. 3,281 crores (26 per cent) as at December 2005 to Rs. 4,340 crores (30 per cent) as at December 2006. The low cost deposits grew by 32per cent between the two periods. While the cost of deposits was at 5.25 per cent during the quarter (up by 33 bps as compared to December 2005) the yield on advances improved from 8.46per cent to 9.35per cent during the same period. The Credit Deposit ratio stood at 75.29 per cent as at December 2006. Net advances grew by 11.32 per cent as at December 2006 to reach Rs. 10,827 crores from Rs. 9,726 crores as at December 2005. Both, the Gross and Net NPA levels showed significant improvement. The Gross NPA moved from 4.66 per cent as at December 2005 to 3.34per cent as at December 2006 and the Net NPAs improved from 1.66 per cent to 1.27 per cent during the same period.

Other key initiatives:

During the quarter a new branch was opened at Kakurgachi, Calcutta and an Extension Counter in Kolar was converted into a full-fledged branch. The bank has obtained permission from the Reserve Bank of India to open 7 new branches and 50 off site ATMs and the process to open these outlets at the earliest has been initiated. The Banks ATMs now accept the VISA Electron, Visa Credit & Visa Plus cards also in addition to the Master Cirrus cards. ING VYSYA Bank Ltd is a premier private sector bank with retail, private and wholesale banking platforms that serve over 1.5 million customers. With over 75 years of history in India and leveraging INGs global financial expertise, a workforce of 5,422 employees staff 491 outlets to offer their clients an increasingly broad range of innovative and established products and services. 29

The services of the bank include:

Corporate Banking Commercial Banking Treasury Management Retail Banking Private or Personal Banking Credit Card Services Mutual funds Demit Account Services

ING VYSYA LIFE IN INDIA AN OVERVIEW

ING VYSYA Life Insurance Company Limited (the company) entered the private life insurance industry in India in September 2001, and in a short span of 3 years has established itself as a distinctive life insurance brand with an innovative, attractive and customer friendly product portfolio and a professional advisors working from 46 branches (in 30 cities) across the country and over 1200 employees. The company with a customer base of over 1,50,000 is headquartered at Bangalore and has established an national presence in the following cities Ahmedabad, Bangalore, Baroda, Belgium, Bhopal, Calcutta, Chandigarh, Chennai, Cochin, Coimbatore, Delhi, Goa, Guntur, Gurgaon, Hubli, Hyderabad, Indore, Jaipur, Kolkata, Ludhiana, Mangalore, Mumbai, My sore, Nagpur, Pune, Secunderabad, Vadodara, Vijaywada, Vizag. Srikakulam. The company aims to make customers look at life insurance a fresh, not just as a tax saving device but also as a means to add protection to life. The one thing we hold in highest esteem is life itself. We believe in enhancing the very quality of life, in addition to

30

safeguarding an individuals security. Our core values are therefore defined as professional, entrepreneurial, trustworthy, approachable and caring. The companys portfolio offers products that cater to every financial requirement, at any life stage. We believe in continuously developing customer driven products and services and value being accessible and responsive to the needs of our customers. In fact, the company has developed the life maker. A simple method, which can be used to choose a plan most suitable to a specific customer based on his needs, requirements and current life stage. This tool helps you build a complete financial plan for life, whether the requirement is protection, savings of investment, retirement.

CEO Speak:
At ING VYSYA Life insurance, in a short span of 3 years of operations, we have established ourselves as a distinctive, life insurance brand in India. With an innovative, attractive and customer friendly product portfolio backed by a professional advisor force, we are proudly serving over 1, 50,000 customers today. We are a part of the ING Group the worlds 4th largest financial services group trusted by 60 million people across 60 countries, with a heritage of over 150 years. Our cornerstone is the trust that youve invested in us. Weve always designed products with your needs in mind, and a communication model that speaks to you. Our new website reflects our openness & dynamism. We speak a language that you will understand, and not complicated jargon. What we tell you, we hope, will make it easier for you to choose from our product portfolio, the policy that suits you best. For Instance we have developed a dynamic new touch point between you and us the life maker. The life maker is a complete financial planning tool. It takes in basic information from you and offers you the policy that is best suited to your needs. In an interactive way, it gives you results that are customized to you and empowers you to choose for yourself what is best for your 31

requirements. It is our endeavor to serve you better & develop a greater understanding of you needs. and our website is a step in the direction,

CORPORATE OBJECTIVE:
An ING VYSYA life we strongly believe that as life is different at every stage, life insurance must offer flexibility and choice to go with that stage. We are fully prepared and committed to guide you on insurance products and services through our will trained advisors, backed by competent marketing and customer services, in the best possible way. It is our aim to become one of the top private life insurance companies in India and to become a comer stone of INGs integrated financial services business in India.

ORGANISATION PROFILE
ING VYSYA bank ltd is an entity formed with the coming together of erstwhile, Indian private sector and global financial power house, ING of Dutch origin during October, 2002. The trust with destiny of VYSYA bank since 1930 is consumer centric and relationship enrichment on a paradigm of constant learning in light of transparency responsibility and financial stability as corner stones. They endeavor on philosophy of customer, credit and cost aiming at providing new ideas and intelligent solutions for all customers that reflects in customized portfolio. ING a major Dutch group conglomerate has acquired 44per cent stake in the VYSYA bank ltd, a milestone in the history of Indian banking, and this tie up introduces a new set of banking products in present and also in future. ING ranks 21 among the fortune 500 companies and commands its expertise in the areas of insurance, banking and asset management

32

The first Indian private bank to become a foreign bank in Indian banking history accords to this bank only it compliance with the RBI guidelines the bank was named as ING VYSYA bank ltd, from 7th December 2002. The ING VYSYA bank ltd is equipped with over 380 branches, which include 8 regional collection centers, 5 specialized asset recovery management branches. The bank is spearheading to become most preferred third generation bank leveraging on the cost of any time any where any how banking online service to provide the timely and prompt financial solutions to the customers. The bank is providing online service in 233 branch outlets and the remaining braches are in the process of conversion on war footing basis.

CORPORATE GOVERNANCE
ING VYSYA bank will be an entrepreneurial integrated financial services institution where innovation and transformation are the way of life. KEY VALUES Integrity, commercial focus, professionalism customer focus and team work.

33

3.1 Financial analysis

Financial analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. Based on these reports, management may:

Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipments in the production of its goods;

Issue stocks or negotiate for a bank loan to increase its working capital. Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.

Goals
Financial analysts often assess the firm's: 1. Profitability- its ability to earn income and sustain growth in both short-term and longterm. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations; 2. Solvency- its ability to pay its obligation to creditors and other third parties in the longterm; 3. Liquidity- its ability to maintain positive cash flow, while satisfying immediate obligations; Both 2 and 3 are based on the company's balance sheet, which indicates the financial condition of a business as of a given point in time.

34

4. Stability- the firm's ability to remain in business in the long run, without having to sustain significant losses in the conduct of its business. Assessing a company's stability requires the use of the income statement and the balance sheet, as well as other financial and nonfinancial indicators.

Methods
Financial analysts often compare financial ratios (of solvency, profitability, growth...):

Past Performance: Across historical time periods for the same firm (the last 5 years for example),

Future Performance: Using historical figures and certain mathematical and statistical techniques, including present and future values, This extrapolation method is the main source of errors in financial analysis as past statistics can be poor predictors of future prospects.

Comparative Performance: Comparison between similar firms.

These ratios are calculated by dividing a (group of) account balance(s), taken from the balance sheet and / or the income statement, by another, for example: Net profit / equity = return on equity Gross profit / balance sheet total = return on assets Stock price / earnings per share = P/E-ratio Comparing financial ratios are merely one way of conducting financial analysis. Financial ratios face several theoretical challenges:

They say little about the firm's prospects in an absolute sense. Their insights about relative performance require a reference point from other time periods or similar firms.

35

One ratio holds little meaning. As indicators, ratios can be logically interpreted in at least two ways. One can partially overcome this problem by combining several related ratios to paint a more comprehensive picture of the firm's performance.

Seasonal factors may prevent year-end values from being representative. A ratio's values may be distorted as account balances

Change from the beginning to the end of an accounting period. Use average values for such accounts whenever possible.

Financial ratios are no more objective than the accounting methods employed. Changes in accounting policies or choices can yield drastically different ratio values.

They fail to account for exogenous factors like investor behavior that are not based upon economic fundamentals of the firm or the general economy (fundamental analysis) .

3.2 FINANCIAL STATEMENTS:

Financial statements (or financial reports) are formal records of a business' financial activities. In British English, including United Kingdom company law, financial statements are often referred to as accounts, although the term financial statement is also used, particularly by accountants. Financial statements provide an overview of a business' financial condition in both short and long term. There are four basic financial statements. Balance sheet: also referred to as statement of financial position or condition, reports on a company's assets, liabilities, and net equity as of a given point in time. Income statement: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and profits over a period of time.

36

Statement of retained earnings: explains the changes in a company's retained earnings over the reporting period.

Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities.

For large corporations, these statements are often complex and may include an extensive set of notes to the financial statements and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.

Purpose of financial statements:

"The objective of financial statements is to provide information about the financial strength, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions." Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are directly related to an organization's financial position. Reported income and expenses are directly related to an organization's financial performance.

Financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently."

Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analysis are then performed on these statements to provide management with a more detailed understanding of the figures. These statements are also used as part of management's annual report to the stockholders. 37

Employees also need these reports in making collective bargaining agreements (CBA) with the management, in the case of labor unions or for individuals in discussing their compensation, promotion and rankings.

2. External Users: are potential investors, banks, government agencies and other parties
who are outside the business but need financial information about the business for a diverse number of reasons.

Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are often used by investors and is prepared by professionals (financial analysts), thus providing them with the basis in making investment decisions.

Financial institutions (banks and other lending companies) use them to decide whether to grant a company with fresh working capital or extend debt securities (such as a long-term bank loan or debentures) to finance expansion and other significant expenditures.

Government entities (tax authorities) need financial statements to ascertain the propriety and accuracy of taxes and other duties declared and paid by a company.

Media and the general public are also interested in financial statements for a variety of reasons.

Comparative Financial statements:

These statements are prepared in a way so as to provide time perspective to the consideration of various elements of financial position embodied in the statements. This is done to make the financial data more meaningful. The statements of two or more years are prepared to show absolute data of two or more years, increases or decreases in absolute data in value and in terms of percentages.

38

Comparative Income statements:

This statement discloses the net profit or net loss resulting from the operations of business. Such statements show the operating results for a number of accounting periods so that changes in absolute data from one period to another period may be stated in terms of percentage. This statement helps in deriving meaningful conclusions as it is very easy to ascertain the changes in sales volume, administrative expenses, selling and distribution expenses, etc.

Comparative balance sheet:

This statement prepared on two or more different dates can be used for comparing assets and liabilities and to find out any increase or decrease in these items. This facilities the comparison of figures of two or more periods and provide necessary information which may be useful in forming an opinion regarding the financial condition as well as progressive outlook of the concern.

Common size statement:

This statement indicates the relationship of various items with some common item .In the income statement the sales figure is taken as base and all other figures are expressed as percentage of sales. Similarly in the balance sheet the total of the assets and liabilities is taken as base and all other figures are expressed as a percentages to this total. The percentages so calculated can be easily compared with the corresponding percentages in other periods and meaningful conclusions can be drawn.

Funds flow statement

The flow of funds occurs when a transaction changes on the one hand a non-current account and on the other a current account and vice-versa. Funds flow statement is not a substitute of an income statement i.e., a profit and loss, and a balance sheet. The profit and loss account is a document which indicates the extent of success achieved by a business in 39

earning profits. It reports the results of business activities and indicates the reasons for the profitability or lack thereof. It does not reveal the inflows and outflows of funds in business during a particular period

CASH FLOW STATEMENT:

In financial accounting, a cash flow statement or statement of cash flows is a financial statement that shows a company's incoming and outgoing money (sources and uses of cash) during a time period (often monthly or quarterly). The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents, and breaks the analysis down according to operating, investing, and financing activities. As an analytical tool the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7), is the International Accounting Standard that deals with cash flow statements. People and groups interested in cash flow statements include

accounting personnel, who need to know whether the organization will be able to cover payroll and other immediate expenses

potential lenders or creditors, who want a clear picture of a company's ability to repay

potential investors, who need to judge whether the company is financially sound potential employees or contractors, who need to know whether the company will be able to afford compensation

Purpose:
The cash flow statement was previously known as the statement of changes in financial position or flow of funds statement. The cash flow statement reflects a firm's liquidity or solvency.

40

The balance sheet is a snapshot of a firm's financial resources and obligations at a single point in time, and the income statement summarizes a firm's financial transactions over an interval of time. These two financial statements reflect the accrual basis accounting used by firms to match revenues with the expenses associated with generating those revenues. The cash flow statement includes only inflows and outflows of cash and cash equivalents; it excludes transactions that do not directly affect cash receipts and payments. These noncash transactions include depreciation and write-offs on bad debts. The cash flow statement is a cash basis report on three types of financial activities: operating activities, investing activities, and financing activities. Noncash activities are usually reported in footnotes.

3.3 OPERATING ACTIVITIES:

Operating activities include the production, sales and delivery of the company's product as well as collecting payment from its customers. This could include purchasing raw materials, building inventory, advertising and shipping the product. Under IAS 7, operating cash flows include

receipts from the sale of goods or services receipts for the sale of loans, debt or equity instruments in a trading portfolio interest received on loans dividends received on equity securities payments to suppliers for goods and services payments to employees or on behalf of employees tax payments interest payments (alternatively, this can be reported under financing activities in IAS 7, but not in US GAAP)

payments for the sale of loans, debt or equity instruments in a trading portfolio

41

Items which are added back to the net income figure (which is found on the Income Statement) to arrive at cash flows from operations generally include:

Depreciation (loss of tangible asset value over time) Deferred tax Amortization (loss of intangible asset value over time) Any gains or losses associated with an asset sale (unrealized gains/losses are also added back from the income statement)

INVESTING ACTIVITIES:
Investing activities focus on the purchase of the long-term assets a company needs in order to make and sell its products, and the selling of any long-term assets. Under IAS 7, investing cash flows include

collections on loan principal and sales of other firms' debt instruments investment returns from other firms' equity instruments, including sale of those instruments

receipts from sale of plant and equipment expenditure for purchase of plant and equipment loans made and acquisition of other firms' debt instruments expenditure for purchase of other firms' equity instruments (unless held for trading or considered cash equivalents) Items under investing activities include:

Capital expenditures, which include purchases (and sales) of property, plant and equipment

Investments

42

Sample cash flow statement using the direct method Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Cash generated from operations (sum) Interest paid Income taxes paid Net cash flows from operating activities $27,500 (20,000) 7,500 (2,000) (2,000) $3,500

Citigroup Cash Flow Statement (all numbers in thousands) Period ending Net income 12/31/2006 21,538,000 12/31/2005 24,589,000 12/31/2004 17,046,000

Operating activities, cash flows provided by or used in: Depreciation and 2,790,000 amortization Adjustments to net 4,617,000 income Decrease (increase) in 12,503,000 accounts receivable Increase (decrease) in 131,622,000 liabilities 19,822,000 37,856,000 17,236,000 -621,000 2,910,000 2,592,000 2,747,000

43

(A/P, taxes payable) Decrease (increase) in -inventories Increase (decrease) in (173,057,000) other operating activities Net cash flow from 13,000 operating activities Investing activities, cash flows provided by or used in: Capital expenditures Investments Other cash flows from 1,606,000 investing activities Net cash flows from (204,206,000) investing activities Financing activities, cash flows provided by or used in: Dividends paid Sale (repurchase) of stock Increase (decrease) in debt Other cash flows from 120,461,000 financing activities Net cash flows from 206,430,000 33,283,000 83,311,000 27,910,000 70,349,000 (9,826,000) (5,327,000) 101,122,000 (9,188,000) (8,375,000) (12,090,000) 133,000 26,651,000 21,204,000 (58,425,000) (79,231,000) 17,009,000 (571,000) (4,035,000) (201,777,000) (3,724,000) (3,011,000) (71,710,000) (75,649,000) 31,799,000 (2,404,000) (33,061,000) (62,963,000) ---

44

financing activities Effect changes Net increase (decrease) in $2,882,000 cash and cash equivalents $4,817,000 $2,407,000 of exchange rate 645,000 (1,840,000) 731,000

3.4 Working Capital:

Cash is the lifeline of a company. If this lifeline deteriorates, so does the company's ability to fund operations, reinvest and meet capital requirements and payments. Understanding a company's cash flow health is essential to making investment decisions. A good way to judge a company's cash flow prospects is to look at its working capital management (WCM). Working capital refers to the cash a business requires for day-to-day operations, or, more specifically, for financing the conversion of raw materials into finished goods, which the company sells for payment. Among the most important items of working capital are levels of inventory, accounts receivable, and accounts payable. Analysts look at these items for signs of a company's efficiency and financial strength. Take a simplistic case: a spaghetti sauce company uses $100 to build up its inventory of tomatoes, onions, garlic, spices, etc. a week later; the company assembles the ingredients into sauce and ships it out. a week after that, the checks arrive from customers. that $100, which has been tied up for two weeks, is the company's working capital. the quicker the company sells the spaghetti sauce, the sooner the company can go out and buy new ingredients, which will be made into more sauce sold at a profit. if the ingredients sit in inventory for a month, company cash is tied-up and can't be used to grow the spaghetti 45

business. even worse, the company can be left strapped for cash when it needs to pay its bills and make investments. working capital also gets trapped when customers do not pay their invoices on time or suppliers get paid too quickly or not fast enough.

3.5 FINANCIAL RATIO

In finance, a financial ratio or accounting ratio is a ratio of selected values on an enterprise's financial statements. There are many standard ratios used to evaluate the overall financial condition of a corporation or other organization. Financial ratios are used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Security analysts use financial ratios to compare the strengths and weaknesses in various companies.[1] If shares in a company are traded in a financial market, the market price of the shares is used in certain financial ratios. Values used in calculating financial ratios are taken from the balance sheet, income statement, cash flow statement and (rarely) statement of retained earnings. These comprise the firm's "accounting statements" or financial statements. Ratios are always expressed as a decimal value, such as 0.10, or the equivalent percent value, such as 10per cent. Financial ratios quantify many aspects of a business and are an integral part of financial statement analysis. Financial ratios are categorized according to the financial aspect of the business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt. Activity ratios measure how quickly a firm converts non-cash assets to cash assets. Debt ratios measure the firm's ability to repay long-term debt. Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return. Market ratios measure investor response to owning a company's stock and also the cost of issuing stock.

46

Financial ratios allow for comparisons

between companies between industries between different time periods for one company between a single company and its industry average

The ratios of firms in different industries, which face different risks, capital requirements, and competition are not usually comparable.

Sources of data for financial ratios:

Financial ratios are based on summary data presented in financial statements. This summary data is based on the accounting method and accounting standards used by the organization.

Accounting methods and principles:

Financial ratios may not be directly comparable between companies that use different accounting methods or follow various standard accounting practices. Most public companies are required by law to use generally accepted accounting principles for their home countries, but private companies, partnerships and sole proprietorships may not use accrual basis accounting. Large multi-national corporations may use International Financial Reporting Standards to produce their financial statements, or they may use the generally accepted accounting principles of their home country.

Abbreviations and terminology:

Various abbreviations may be used in financial statements, especially financial statements summarized on the Internet. Sales reported by a firm are usually, technically, net sales, which deduct returns, allowances, and early payment discounts from the charge on an invoice.

47

Companies that are primarily involved in providing services based on man-hours do not generally report "Sales" based on man-hours. These companies tend to report "revenue" based in income from services provided.

Profitability ratios:
Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return.

Gross margin Profit margin = Net Income / Sales Operating margin or Operating Income Margin = Operating income / Net sales Net margin Gross profit margin or Gross Profit Rate = (Net sales - Cost of goods sold) / Net sales

Operating profit margin or Return on sales (ROS)

= Earnings before interest and taxes / Sales = Operating earnings / Net sales

Net profit margin = Net profits after taxes / Sales Return on equity (ROE)

= Net profits after taxes / Stockholders' equity or tangible net worth = Net profit / Equity

Return on investment (ROI ratio or Du Pont ratio) = Net income / Total Assets Asset turnover = Sales / Assets Return on assets (ROA) = Net Income / Total Assets Return on assets Du Pont (ROA Du Pont) = (Net Income / Sales) x (Sales / Total Assets)

Return on net assets (RONA) 48

Return on capital (ROC) Risk adjusted return on capital (RAROC) Return on capital employed (ROCE) Cash flow return on investment (CFROI) Efficiency ratio

Liquidity ratios:
Liquidity ratios measure the availability of cash to pay debt.

Current ratio = Current assets / Current liabilities Acid-test ratio (Quick ratio) = (Current assets Inventories) / Current liabilities Receivables Turnover Ratio = Net credit sales/ Average net receivables Inventory turnover ratio = Cost of goods sold / Average inventory

Activity ratios:
Activity ratios measure how quickly a firm converts non-cash assets to cash assets.

Average collection period = Accounts receivable / (Annual credit sales / 360 days) DSO Ratio = Accounts receivable / Average Sales per Day Collection period (period end) Average payment period = Accounts payable / (Annual credit purchases / 360 days) Inventory turnover ratio = Cost of goods sold / Average inventory Inventory conversion ratio = Inventory conversion to cash period (days) = 360 days / Inventory turnover

days Inventory

Debit ratios:
Debt ratios measure the firm's ability to repay long-term debt. Debt ratios measure financial leverage.

Debt ratio = Total liabilities / Total assets 49

Debt to assets ratio Debt to equity ratio = (Long-term debt + Value of leases) / Stockholders' equity Long-term debt/Total asset (LD/TA) ratio = long-term debt / Total assets Times interest-earned ratio = Earnings before interest and taxes EBIT / Annual interest expense

Debt service coverage ratio = Net operating income / Total debt service

Market ratios:
Market ratios measure investor response to owning a company's stock and also the cost of issuing stock.

Payout ratio = Dividend / Earnings or

= Dividend per share / Earnings per share Note: Earnings per share is not a ratio, it is a value in currency. Earnings per share = Expected earnings / Number of outstanding shares

P/E ratio = Price / Earnings per share Cash flow ratio or Price/cash flow ratio = Price of stock / present value of cash flow per share

Price to book value ratio (P/B or PBV) = Price of stock / Book value per share Price/sales ratio PEG ratio

Interpretation
Analysis and interpretation are closely related. Interpretation is not possible without analysis and without interpretation analysis has no value. Various account balances appear in the financial statements.

50

These account balances do not represent homogeneous data so, it is difficult to interpret them and draw some conclusions. Interpretation is thus drawing of inference and starting what the figures in the financial statements really mean. In the words of Kennede and Memullar,The Analysis and Interpretation of financial statements are an attempt to determine the significance and meaning of the financial statements data so that a forecast may be made of the prospects for future earning, ability to pay interest and debt maturities, and probability of a sound dividend policy.

51

Comparative Balance Sheet as at 2007-2008

Particulars

2007 Rs.

2008 Rs.

increase/ decrease Rs. Percentage

Income Interest earned Other income 10916342 366021 11282363 Expenditure Interest expended Operating expenses Provisions & contingencies 6545217 5111061 629079 12285357 Profit Net profit for the year Profit (loss) Brought forward Transfer from investment fluctuation reserve 38474 89777 90565 346037 52091 256260 28.8 141.8 7412477 5187905 925117 13525499 867260 76844 296038 7.05 0.62 2.4 12224348 1391716 13616064 1308006 1025695 11.59 9.09

52429 180680

551037 987639

498608

275.9

Appropriations Transfer to statutory reserve Transfer to capital reserve Balance carried to balance sheet 2717 176800 1163 180680
52

22641 260000 12924 295565

19924 83200 11761

11.02 46.04 6.5

Interpretation:
The above table shows that the Comparative Balance Sheet of ING VYSYA Bank for the year ended 31st March, 2007 and 31st March 2008. The Comparative Balance Sheet of the Bank reveals that during 2007-2008 there was increase in capital which is amounted to Rs.1633 i.e., 0.001 percent. Reserves and Surplus has been increased from 2007-2008 Rs.579667, with 0.40 percent. The Long term Liabilities i.e., deposits and Borrowings have relatively increased by 20 percent and 2.23 percent respectively. The total fixed assets has been increased slightly 0.48 percent this mean the bank was not made any fixed assets during the previous year of 2007-08. The total current assets and investments of the bank have been increased by 13.21 percent and 1.45 percent respectively. The overall financial position of the bank is considered good.

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Comparative Balance Sheet 2008-2009

Increase/ 2008 Particulars Rs. Rs. Rs. Capital & Liabilities Capital Reserves & Surplus Deposits Borrowings Other liabilities & 13042924 provisions 167666676 Assets Cash and balance with 8461514 Reserve bank of India Balance with banks and money at call and short notice Investments Advances Fixed assets Other assets 43723357 102315253 4054093 6340636 167711676
54

2009 Decrease

Percentage

907206 9289535 133352551 11074460

909048 10123824 154185894 8435531

1842 83429 20833343 (-)2638929

0.01 0.49 12.42 (-)1.57

19208678

6165754

3.67

192862975

9458130

1041616

0.62

2816823

6458905

3642082

2.17

45278131 119761650 3959697 7946462 192862975

1554774 17446397 (-) 94396 1605826

0.92 10.4 (-)0.05 0.95

Interpretation:
The above table shows that the comparative balance sheet of ING VYSYA Bank for the year ended 31st March, 2008 and 31st March, 2009. The comparative balance sheet of the bank reveals that during 2008-2009 there was an increase in capital which is amounted to Rs.1842 i.e., 0.01 Percent. Reserves and surpluses has been increased from 2008-2009 Rs.83429, with 0.49 Percent. The long term liabilities i.e., deposits relatively increased by 12.42 percent and borrowings are decreased by 1.57 Percent respectively. The total fixed asset has been decreased slightly with 0.05per cent this means the bank was not made any fixed assets during the previous year 2008-2009. The total current assets & investments of the bank has been increased 13.19 percent and 0.92 percent respectively. The overall financial position of the bank is considered good.

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Comparative Balance Sheet 2009-2010: 2009 Rs 2010 Rs Increase/ decrease Rs Percentage

Particulars

Capital & Liabilities Capital Reserves & Surplus Deposits Borrowings Other liabilities & provisions 909048 10123824 154185894 8435531 19208678 192862975 Assets Cash and balance with Reserve bank of India Balance with banks and money at call and short notice Investments Advances Fixed assets Other assets 45278131 119761650 3959697 7946462 192862978 62933196 146495484 3992146 10130626 255399037 17655065 26733834 32449 2184164 9.15 13.86 0.01 1.13 6458908 9212320 2753415 1.42 9458130 22635265 13177135 6.83 1024743 14331834 204980557 12498052 22563851 255399037 115695 4208010 50794663 4062521 3355173 0.05 2.18 26.33 2.11 1.74

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Interpretation:
The above table shows that the comparative balance sheet of ING VYSYA Bank for the year ended 31st March, 2009 and 31st March, 2010. The comparative balance sheet of the bank reveals that during 2009-2010 there was an increase in capital which is amounted to Rs.115695 i.e., 0.05 percent. Reserves and surplus has been increased from 2009-2010 Rs.4208010, with 2.18 percent. The long term liabilities i.e., deposits and borrowings have relatively increased by 26.33 percent and 2.10 percent respectively. The total fixed assets has been increased slightly with 0.01 percent this mean the bank has not made any fixed assets during the previous year 2009-2010. The total current assets and investments of the bank has been increased by 22.11 percent and 9.15 percent respectively. The overall financial position of the bank is considered good.

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Common size Balance Sheet 2008:

Particulars Assets Fixed assets Investments Total fixed assets investments(A) Current Assets, loans, advances Current Assets Advances Total Current Assets (B) Other assets (A+B)

Rs.

Percentage

4054093 43723357 47777450

2.41 26 28.41

11233337 1102315253 113548590 6340636 161326040 167666676

6.69 61.02 67.71 3.88 96.12 100

Liabilities Current liabilities & provisions 13042924 13042924 Long term loans Borrowings Deposits 11074460 133352551 144427011 Share Capital Reserve & surplus 907206 9289535 10196741 6.6 79.53 86.13 0.54 5.54 6.08 7.77 7.77

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Interpretation:
The above statement representing the Assets and Liabilities, for the year 31-March2008. The common size balance sheet statement, in which Balance sheet ratio of each Asset to Total assets and Ratio of each liability expressed as a ratio of Total liabilities is called common size balance sheet. The total figure of assets amounted of Rs 167,666,676 (Rs in thousands) is taken as 100 percent and all other assets are expressed as a percent of total assets i8n the total assets advances occupied highest percent of (61.02 percent) with an amount of 102,315,253. The Investment occupies the second highest percent of (26.0 percent) with an amount of Rs 43,723,357. The current assets carry a percent of (6.69 percent) with an amount of Rs 11,233,337. The fixed assets consisting of percent (2.41 percents) with amount of Rs 4,054,093. The other assets carries a percent of (3.78percent) with an amount of Rs.6340636. The total figure of liabilities 167,666,676 (Rs in thousands) is taken as 100 percent an all their liabilities are expended as a percent of total liabilities. The Relation of each liability to tot5al liabilities is expended the statement. In the total liabilities Deposits carries (79.53 Percent) with an amount of Rs 133,352,551. The second position occupies other liabilities and provisions (7.77 percent) with an amount of Rs13, 042,924. The Borrowing occupies (6.60 percent) with an amount of Rs 11,074,460. The share capital consisting of (0.54 percent) with an amount of Rs907, 206. The Reserves and surplus carries (5.54 percent) with an amount of Rs 9,289,535.

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Common size Balance Sheet 2009:

Particulars Assets Fixed Assets Investments Total fixed asset(+) Investments(A) Current Assets Loans, Advances Current Assets Advances Total current assets(B) Other Assets (A+B)

Rs.

Percentage

3959697 45278131 49237828

2.05 23.4 25.45

15917035 119761650 135678685 7946467 1184916513 192862980

8.24 62.09 70.33 4.22 95.78 100

Liabilities Current liabilities & provisions 19208678 19208678 Long term loans Borrowings Deposits 8433531 154185894 162619425 Share capital reserves & surplus 909048 10123824 11032872 4.37 79.94 84.31 0.47 5.24 5.71 9.95 9.95

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Interpretation:
Common size Balance 2009. The Above statements representing the assets and liabilities for the year 31-March2007. The common size balance sheet statements, in which Balance sheet ratio of each Liability is expressed as a ratio of total liabilities is called common size balance sheet. The total figure of assets amounted of Rs.192,862,975(Rs in thousands) is taken as 100 percent and all other assets are expensed as a percent of total assets in the total assets. Advantages occupied highest percent of (62.09) with an amount of Rs119, 761,650. The Investments occupied the second highest (23.4 percent) with an amount of Rs.45, 278,131. The current assets carries (8.24 percent) with an amount of Rs.15, 917,035. The fixed assets consisting of (2.05 percent) with an amount of Rs.3, 959,697. The other assets carries (4.12 percent) with an amount of Rs.7, 946,467. The total figure of liabilities of Rs.192, 862,975(Rs in thousands) is taken as 100 a percent and all other liabilities are expended as a percent of total liabilities. The relation of each liability to total liabilities is expended in the statement. In the total liabilities deposits carries (79.94 percent) with an amount of Rs 1547,185,984. The second position occupies other liabilities and provisions(9.95 percent) with an amount of 19,208,678. The Reserves & surplus consisting (5.24 percent) with an amount of Rs.10, 123,824. The Borrowings occupies(4.37 percent) with an amount of Rs.8,433,531. The share capital occupied (0.47 percent) with an amount of Rs.909, 048.

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Common size Balance Sheet 2010:

Particulars Assets Fixed Assets Investment Total fixed assets(+) Investments(A) Current assets, loans & advances Current assets Advances Total current assets(B) Other assets (A+B) Total Assets Liabilities Current liabilities & provisions Long term loans Borrowings Deposits

Rs

Percentage

3992146 62933196 66925342

1.56 24.6 26.16

31847585 146495484 178343069 10130626 2.45268393 255399019

12.46 57.4 69.86 3.96 95.94 100

22563851 22563851 12498052 204980557 217478609

8.83 8.83 4.89 80.25 85.14 0.4 5.61 6.01

Share capital & Reserves & surplus

1024743 14331834 15356577

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Interpretation:
Common size Balance sheet-2010. The Above statement representing the assets and liabilities for the year 31-March2008. The Common size balance sheet statement, in which Balance sheet ratio of each Asset to total Assets and Ratio of each liability is expressed as a ratio of Total Liabilities is called Common size balance sheet. The total figure of assets amounted of Rs.255,399,037(Rs in thousands) is taken as 100 percent and all other assets are expressed as a percent of total assets in the total assets, Advances occupied highest percent of (57.3), with an amount of Rs.146,495,484. The investment occupied the second highest percent of (24.6 percent). The current assets carries (12.46 percent) with an amount of Rs.318.47.585 and fixed assets (1.56 percent) with an amount of Rs.3, 992,146. The last item in the total value of assets is other assets carries (3.96 percent) with an amount of Rs.10, 130,626. The total figure of liabilities 255,399,037 (In thousands), is taken as 100 percent and all other liabilities are expressed as a percent of total liabilities. The relation of each liability to total liabilities is expressed in the statement. In the total liabilities deposited carries (80.25 percent) with an amount of Rs.204, 980,557. The second position occupies other liabilities and provisions (8.83 percent) with an amount of Rs.22, 563,851. The Reserves & surplus occupies (5.61 percent) with an amount of Rs.14, 331,834. The share capital consisting of (0.40 percent) with an amount of Rs.1, 024,743. The borrowings carries (4.89 percent) with an amount of Rs.12, 498,052.

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Comparative Income statement as at 2008-2009: Particulars Income Interest earned Other income 12224348 1391716 13616064 Expenditure Interest expended Operating expenses Provisions & contingencies 7412477 5187905 925117 13525499 Profit Net profit for the year Profit(Loss) Brought forward Transfer from Investment fluctuation Reserve 90565 346037 551037 295565 Appropriations Transfer to statutory Reserve Transfer to capital Reserve Transfer to Investment Reserve Transfer to special Reserve Proposed dividend Dividend Tax Balance carried to Balance sheet 22641 260000 12924 295565 222274 395747 30508 59088 10042 184363 902022 199633 135747 -30508 -509088 -10042 171439 67.54 45.92 10.32 -20 3.39 58 889098 12924 902022 798533 -333113 -551037 270 112.7 186.4 8220418 5050173 1373954 14644545 807941 -137732 448837 5.97 1.01 3.32 12676291 2857352 15533643 451943 1465636 3.32 10.76 2008 RS 2009 RS Increase percentage /Decrease

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Interpretation:
The above statement shows comparative Income statement of ING VYSYA Bank between 2008, 2009 years. The Interest earned covers 3.32 percent with an increase of 451943, the other Major head on the income side of the bank is other Income consisting 10.76 Percent with an Increase of 146566. The expenditure side, Major item of expenditure is interest expended nearly 5.97 percent with an increase of Rs.80.7941 operating expenses are decreased by 1.01 percent with an amount of Rs.137732.

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Comparative Income statement as at 2009-2010: 2009 Rs. 2010 Rs. Increase/ Decrease Rs.

Particulars Income Interest earned Other income

Percentage

12676291 2857352 15533643

16804391 4185660 209900551

4128100 1328308

26.5 8.55

Expenditure Interest expended Operating expenses Provisions & contingencies 8220418 5050173 1373954 14644545 Profit Net profit for the year Profit /Loss brought forward 889098 12924 902022 Appropriations Transfer to statutory Reserve Transfer to capital Reserve Transfer to Investment Reserve Transfer to special Reserve Proposed dividend Dividend Tax Balance carried to Balance sheet 222274 395747 30508 59088 10042 184363 902022 392326 31467 47715 67000 153711 26122 1035324 1753665 170052 -364280 17207 67000 94623 16080 850961 18.85 -40.38 1.91 7.42 10.5 1.78 94.3 1569302 184363 1753665 680204 171439 75.41 19.01 11820478 6094893 1505378 19420749 3600060 1044720 131424 24.58 7.13 0.89

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Interpretation:
The above statement shows Comparative Income statement of ING VYSYA Bank between 2009, 2010 years. The Interest earned covers 26.5 percent with an increase of 4128100, the other Major Head on the income side of the bank is other Income consisting 8.55 percent with increase of 13,28,308. The expenditure side, major item of expenditure is Interest expended nearly 24.58 percent with an increase of 3660060 operating expenses is increased by 7.13 percent with an amount of 1044720.

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Common size Income statement as at 2008: Particulars Income Interest earned Other income 12224348 1391716 13616064 Expenditure Interest expended Operating expenses Provisions & contingencies 7412477 5187905 925117 13525499 Profit Net profit for the year Profit (loss) Brought forward Transfer from investment fluctuation reserve 90565 346037 551037 295565 Appropriations Transfer to statutory reserve Transfer to capital reserve Balance carried to balance sheet TOTAL 22641 260000 12924 295565 7.66 87.98 4.37 100 54.8 38.36 6.84 100 89.78 10.22 100 Rs. Percentage

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Interpretation for the year 2008:

The above table shows the common size income statement in which all profit and loss account items are expressed as the percent basis. The total income for the year 2006 in the form of sales has been taken 100 per cent. The total income includes interest earned, which carries 89.78per cent, other income consisting of 10.22per cent. The total of expenditure for the same period has been taken as 100per cent, consisting of interest expended rupees 7412477, covering 54.80per cent. The next major expenditure on the expenditure side is operating expenses carrying 38.36per cent with an amount of 5187905, the least percent of the expenditure side is provision & contingencies amounted Rs 925117 with 6.84per cent. The percent of profit has increased/decreased from to. This is due to increase/decreased in cost/expenditure.

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Common size Income statement as at 2009: Particulars Income Interest earned Other income 14013768 1943180 15956948 Expenditure Interest expended Operating expenses Provisions & contingencies 8593111 5070642 1404097 15067850 Profit Net profit for the year Profit (loss) Brought forward 889098 12925 902022 Appropriations Transfer to statutory reserve Transfer to capital reserve Transfer to investment reserve Proposal dividend Dividend Tax Balance carried to balance sheet TOTAL 222274 395747 30508 59088 10042 184363 902022 24.64 43.88 3.38 6.55 1.11 20.44 100 98.57 1.43 100 57.03 33.65 9.32 100 87.82 12.18 100 Rs. Percentage

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Interpretation for the year 2009:

The above table shows the common size Income statement in which all profit and loss accounts items are expressed as the percent basis. The total Income for the year 2007 in the form of sales has been taken 100 percent. The total Income includes interest earned, which carries 87.82 percent, other Income consisting of 12.18 percents. The total of expenditure for the same period has been as 100 percent, consisting of interest expended rupees 8593111, covering 57.03 percent. The next major expenditure on the expenditure side is operating expenses carrying 33.65 percent with an amount of 5070642, the least percent of the expenditure side is provisions & contingencies amounted Rs 1404097 with 9.32 percent. The percent of profit has increased/decreased from to this due to increase /decrease in cost/expenditure.

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Common size Income Statement 20010: Particulars Income Interest earned Other income 16804391 4185660 20990051 Expenditure Interest expended operating expenses provisions & contingencies 11820478 6094893 1505378 19420749 Profit Net profit for the year Profit & Loss brought forward 1569302 184363 1753665 Appropriations Transfer to statuary Reserve Transfer to capital reserve Transfer to Investment reserve Transfer to special Reserve Proposed divided Divided Tax Balance carried to balance sheet 39326 31467 47715 67000 153711 26122 1035324 1400665 22.37 1.79 2.72 3.82 8.76 1.49 59.05 100 89.49 10.51 100 60.87 31.38 7.75 100 80.06 19.94 100 Amount Rs. Percentage

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Interpretation for the year 2010:

The above table shares the common size Income statement in which all profit and loss Account & items are expressed as the percent basis. The total Income for the year 2008 in the form of sales has been taken as 100 percent. The total Income includes Interest earned, which carries 880.06 percent, other income consisting of 19.94 percent. The talk of expenditure for the same period has been taken as 100 percent and consisting of interest expended Rs 11820478, covering 60.8 percent. The next major expenditure on the expenditure side is operating expenses covering 7.75 percent with an amount of Rs.6094898, the least percent of the expenditure side is provisions & contingencies mounted Rs 1505378 with 7.75 percent. The percent of profit has increased/decreased from to. This is due in increase/decrease in cost/expenditure. Current assets Current ratio = . Current liabilities

Year 2007 2008 2009 2010

Current assets 102193731 113548590 135678685 178343069

Current liabilities 9390905 13042924 19208678 22563851

Current ratio 10.8:1 8.70:1 7.06:1 7.90:1

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Interpretation:
It is observed from the above table that the current ratio in the 2007-2010 in ING VYSYA bank is considered satisfactory. The current ratio of the bank in the year 2007 is 10.8:1, 2008 is 8.70:1, and 2009 is 7.06:1, 7.90:1 in the year of 2010. As a conventional rule, a current ratio of 2001 or more is considered satisfactory.

Sales Cost of goods sold Gross Profit= ------------------------------------------Sales Year 2007 2008 2009 2010 Gross profit 319986 524568 889098 1569302 Sales 9208344 11805569 15533643 20990051 Gross profit ratio 3.474 4.443 5.723 7.476

Interpretation: The Gross profit ratio of ING VYSYA bank is better in the year 2010, the gross profit of the bank in the year 2010 is 7.746, where as the same ratio is 3.474 in the year 2007, 4.443 in the year 2008 and 5.723 in the year 2009. As a conventional rule higher the ratio, the better it is. A low ratio indicates un favorable trend in the form of reduction in selling price not accompanied by proportionate decrease in the cost of goods are increase in the cost of production.

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Profit after tax Net profit = -----------------------------------Sales Year 2007 2008 2009 2010 Profit after tax 262940 478072 902022 1753665 Sales 9208344 11805569 15533643 20990051 Net profit ratio 2.855 4.049 5.806 8.354

Interpretation: The Net profit ratio of ING VYSYA Bank is considered satisfactory from 2007-2008.

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5.1 SUMMARY
The project entitled customer preference and awareness of financial services with reference to ING VYSYA bank was categorized into five chapters. The first chapter deals with the introduction of the study, need for the study, objectives, methodology and limitations ING VYSYA bank and ING VYSYA life insurance are head quartered at Bangalore, while the corporate office of ING VYSYA mutual fund is situated at Mumbai, the synergies arising out of three distinct but complementary businesses are bound to be an asset to the group in changing market dynamics of the future. To conduct survey to know the customer is aware or not on the services availing by cover financial services. The main objective is to obtain the data required for the bank employees to understand his customers and understand the customer preference of the product. Data is very important for all the projects. It is necessary to collect accurate and reliable data in order to achieve the research objectives. Primary data has been collected with the help of structured questionnaires and secondary data are there which from different publications and also from the following departments had already available in the published from the journals and books. In working hours the staff will be busy so that I cant able to interact with them more time and time constraint are the main limitations of the study. The second chapter deals with the overview of ING VYSYA Bank limited genesis and growth and organization structure. ING VYSYA Bank Ltd., is an entity formed with the coming together of erstwhile, VYSYA Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of Dutch origin, during Oct 2002. The origin of the erstwhile VYSYA Bank was pretty humble. It was in the year 1930 that a team of visionaries came together to found a bank that would extend a helping hand to those who weren't privileged enough to enjoy banking services. It's been a long 76

journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank. In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank made rapid strides to reach the coveted position of being the number one private sector bank. In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations, the then Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank 'Stupendous'. The year of 2005 was the 75th anniversary or Platinum Jubilee year. ING VYSYA is joint venture between ING insurance international BV a part of ING Group, the worlds larges life insurance company (Fortune Global 500, 2002), ING VYSYA bank, 1.5 million customers and over 400 outlets and GMR technologies and industries limited, a part of GMR group also based in Banglore and involved in the field of power generation, infrastructure development and several other business. ING a major Dutch group conglomerate has acquired 44per cent stake in the VYSYA bank ltd, a milestone in the history of Indian banking, and this tie up introduces a new set of banking products in present and also in future. ING ranks 21 among the fortune 500 companies and commands its expertise in the areas of insurance, banking and asset management. The immediate benefit to ING VYSYA Bank ltd is the pride of having become a member of global financial services giant, with an asset base of 1159 billion euros, net profit of 7.21 billion euros as of December 31 2005. Further, the presence of the group in over 50 countries, employing over 115000 people, serving over 60 million customers across the globe, only multiplies the credibility, not only across the country but also across the globe.

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The Third Chapter:It deals with theoretical background on Financial Analysis in HBL power systems Ltd which includes the financial statements of the company like Comparative Balance Sheet. Common size Balance Sheet. Comparative Income Statement. Common size Income Statement. Ratio Analysis.

For the purpose of knowing the companys financial position to compare with the last year. It included data analysis and interpretation according to the financial statement of the company.

The fourth Chapter:It deals with Data and Interpretation The Fifth Chapter:
It deals with Summary, Findings, Suggestions and Bibliography

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5.2 FINDINGS
I have observed that the profit generated has been decreasing year after year by the above findings. Reserves and surplus for the year 2005-06 is 579667, for the year 2006-07 is 83429 and for the year 2007-08 is 4208010.Its well seen that there is a drastic increase in the reserves for the Bank on year on year basis. Return on investment for the year 2005 is 41.59, for the year 2006 is 63.41, year 2007 is 97.80 and for the year 2008 is 153.14.Its observed that there is increase by year on year. Deposits for the year 2005-06 is 16002306, for the year 2006-07 is 20833343 and for the year 2007-08 is 50794663.Its found that the deposits for the bank is increasing by year after year as illustrated above. Its observed that the deposits, reserves and surplus have increased suddenly from the year 2006-07 to 2007-08. The current ratio has decreased from 10.8:1 (year 2005) to 7.90:1 (year 2008). The gross profit has increased from 3.474 (year2005) to 7.476 (year 2008). Debtor turn over ratio has increased 0.124(year 2005) to 0.143 (year 2008). Net profit has increased from 2.855 (year 2005) to 8.354 (year 2008).

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5.3 SUGGESTIONS
Based on the above findings it can suggest that The fixed expenditure of the bank should be decreased; it can be done by

decreasing the number of employees, closure of low income /loss making generating branches e.t.c. The deposits and income of the bank has been increased from previous year to current year. The Non-performing assets of the bank has to be decreased ,it helps for the increase of income , the same can be done so by settling the borrowers with OTS (one time settlement ) where in ,in long-term the same shows a drastic increase of income . That is the decrease of debtors turn over ratio. The borrowers with OTS (one time settlement) where in, in long-term the same shows a drastic increase of income. That is the decrease of debtors turn over ratio. The capital adequacy ratio has to be decreased, so that it increases the margin of income from advances. The increase of reserves of the bank indicates the decrease of income, as there is no income from the reserves, so the reserves and the same should be used in advances. The return on investment is increasing; the same should be increased at a higher pace. The same can be implemented by decreasing the fixed and other expenditure for example advertisements, decreasing the rents of the premises.

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BIBLIOGRAPHY
Text Books Referred: Financial Management by I.M.Pandey Financial Management by Khan and Jain. Financial Decision Policy by R.M.Srivastav Financial Management by Prasanna Chandra Investment Decision Making by John J.Hampton. Management by Heinz weirih and Horold Knoontz. Financial Management and Policy by James C Van Horne.

Reports and Journals Referred: Journals of ICWAI Journals of ICAI Journals of ICFAI Annual Reports of ING VYSYA Bank Ltd., from 2005 to 2008

ING VYSYA BANK JOURNALS AND MAGAZINES WEBSITES: www.ingVYSYAbank.com www.answers.com

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