Banking sbi & icici

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PROJECT REPORT ON
“A STUDY OF BASIC CONCEPTS OF WORKING
CAPITAL WITH - SBI & ICICI”
Submitted to
University of Mumbai
In Partial Fulfillment of the Requirement
For
M.Com (Accountancy) Semester IV
In the subject
Advanced Financial Management
By
Name of the student : - Vivek ShriramMahajan
Roll No. : - 15 -9672
Name and address of the college
K. V. Pendharkar College
Of Arts, Science & Commerce
Dombivli (E), 421203
MARCH 2016

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DECLARATION
I VIVEK SHRIRAM MAHAJAN Roll No. 15 – 9672, the student of
M.Com (Accountancy) Semester IV (2016), K. V. Pendharkar College,
Dombivli, Affiliated to University of Mumbai, hereby declare that the
project for the subject Advanced Financial Management of Project report on
“A Study of Basic Concepts of Working Capital with –SBI & ICICI”
submitted by me to University of Mumbai, for semester IV examination is
based on actual work carried by me.
I further state that this work is original and not submitted anywhere else for
any examination.
Place:Dombivli
Date:
Signature of the Student
Name: - Vivek Shriram Mahajan
Roll No: - 15 -9672

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ACKNOWLEDGEMENT
It is a pleasure to thank all those who made this project work
possible.
I Thank the Almighty God for his blessings in completing this task.
The successful completion of this project is possible only due to
support and cooperation of my teachers, relatives, friends and well-
wishers. I would like to extend my sincere gratitude to all of them.
I am highly indebted to Principal A.K.Ranade, Co-ordinater
P.V.Limaye, and my subject teacher Prajakta Karmarkar for
their encouragement, guidance and support.
I also take this opportunity to express sense of gratitude to my
parents for their support and co-operation in completing this
project.
Finally I would express my gratitude to all those who directly and
indirectly helped me in completing this project.
Name of the student
Vivek Shriram Mahajan

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Table of Contents:
CHAPTER No Topic Page no
CHAPTER 1 Introduction
Introduction to Subject………………………..
Definition ……...…………………
Objectives of Financial Management.....................
Objectives of the Study.......................
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10
CHAPTER 2 Introduction to Working Capital
Definition.........................................
Factors Determining the Working Capital
Requirements.........................................
Format of Working Capital……………..
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16
20
CHAPTER 3 Industry Profile
State Bank of India ……………………
ICICI Bank............................................
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CHAPTER 4 Comments
Comments ……………………. 28
Webiliography………………………………. 29

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CHAPTER 1: Introduction
Introduction to Subject
Meaning of Financial Management
Financial Management means planning, organizing, directing and controlling the
financial activities such as procurement and utilization of funds of the enterprise. It
means applying general management principles to financial resources of the enterprise.
Definition:
James Van Morne defines Financial Management as follows:
“Planning is an inextricable dimension of financial management. The term financial
management connotes that funds flows are directed according to some plan”. Financial
managements can be said a good guide for allotment of future resources of an
organisation.
Preparing and implementation of some plans can be said as financial management. In
other words, collection of funds and their effective utilisation for efficient running of and
organization is called financial management. Financial management has influence on all
activities of an organisation. Hence it can be said as an important one.
Its main responsibility is to complete the finance function successfully. It also has
relations with other business functions. All business decisions also have financial
implications. According to Raymond Chambers, Management of finance function is the
financial management’.
However, financial management shall not be considered as the profit extracting device. If
finance is properly utilised through plans, they lead to profits. Besides, without profits
there won’t be finance generation. All these are facts. But this is not complete.
The implication of financial management is not only attaining efficiency and getting
profits but also maximising the value of the firm. It facilitates to protect the interests of
various classes of people related to the firm.
Hence, managing a firm for profit maximisation is not the meaning for financial
management. Financial management is applicable to all kinds of organisations.
According to Raymond Chambers, ‘the word financial management is applicable to all
kinds of firms irrespective of their objectives’.

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Financial management refers to the efficient and effective management of money
(funds) in such a manner as to accomplish the objectives of the organization. It is the
specialized function directly associated with the top management. The significance of this
function is not seen in the 'Line' but also in the capacity of 'Staff' in overall of a company.
It has been defined differently by different experts in the field.
The term typically applies to an organization or company's financial strategy, while
personal finance or financial life management refers to an individual's management
strategy. It includes how to raise the capital and how to allocate capital, i.e. capital
budgeting. Not only for long term budgeting, but also how to allocate the short term
resources like current liabilities. It also deals with the dividend policies of the share
holders.
DEFINITION of 'Strategic Financial Management’
Managing an organization's financial resources so as to achieve its business objectives
and maximize its value. Strategic financial management involves a defined sequence of
steps that encompasses the full range of a company's finances, from setting out objectives
and identifying resources, analyzing data and making financial decisions, to tracking the
variance between actual and budgeted results and identifying the reasons for this
variance. The term "strategic" means that this approach to financial management has a
long-term horizon.
Objectives of Financial Management:
The aims of financial management should be useful to the firm’s proprietors, managers,
employees and consumers. For this purpose the only way is maximization of firm’s
value.
The following aspects have place in maximizing firm’s value:
1. Rice in profits:
If the firm wants to maximize its value, it should’ increase its profits and revenues. For
this purpose increase of sales volume or other activities can be taken up. It is the general
feature of any firm to increase profits by proper utilisation of all opportunities and plans.
Theoretically, firm gets maximum profits if it is under equilibrium. At that stage the
average cost is minimal and the marginal cost and the marginal revenues are equal. Here,
we can’t say the sales because there must be suitable market for the increased sales.
Further, the above costs must also be controlled.

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2. Reduction in cost:
Capital and equity funds are utilised for production. So all types of steps should be taken
to reduce firm’s cost of capital.
3. Sources of funds:
It should be decided by keeping in view the value of the firm to collect funds through
issue of shares or debentures.
4. Reduce risks:
There won’t be profits without risk. But for this reason if more risk is taken, it may
become danger to the existence of the firm. Hence risk should be reduced to minimum
level.
5. Long run value:
It should be the feature of financial management to increase the long-run value of the
firm. To earn more profits in short time, some firms may do the activities like releasing of
low quality goods, neglecting the interests of consumers and employees.
These trials may give good results in the short run. But for increasing the value of the
firm in the long run, avoiding; such activities are more essential.

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Functions of FinancialManagement
1. Estimation of capital requirements: A finance manager has to make estimation with
regards to capital requirements of the company. This will depend upon expected costs
and profits and future programmes and policies of a concern. Estimations have to be
made in an adequate manner which increases earning capacity of enterprise.
2. Determination of capital composition: Once the estimation have been made, the
capital structure have to be decided. This involves short- term and long- term debt equity
analysis. This will depend upon the proportion of equity capital a company is possessing
and additional funds which have to be raised from outside parties.
3. Choice of sources of funds: For additional funds to be procured, a company has many
choices like-
 Issue of shares and debentures
 Loans to be taken from banks and financial institutions
 Public deposits to be drawn like in form of bonds.
Choice of factor will depend on relative merits and demerits of each source and period of
financing.
4. Investment of funds: The finance manager has to decide to allocate funds into
profitable ventures so that there is safety on investment and regular returns is possible.
5. Disposal of surplus: The net profits decision have to be made by the finance manager.
This can be done in two ways:
 Dividend declaration - It includes identifying the rate of dividends and other
benefits like bonus.
 Retained profits - The volume has to be decided which will depend upon
expansional, innovational, diversification plans of the company.
6. Management of cash: Finance manager has to make decisions with regards to cash
management. Cash is required for many purposes like payment of wages and salaries,
payment of electricity and water bills, payment to creditors, meeting current liabilities,
maintainance of enough stock, purchase of raw materials, etc.
7. Financial controls: The finance manager has not only to plan, procure and utilize the
funds but he also has to exercise control over finances. This can be done through many
techniques like ratio analysis, financial forecasting, cost and profit control, etc.

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Some of the important functions which every finance manager has to take are as
follows:
i. Investment decision
ii. Financing decision
iii. Dividend decision
A. Investment Decision
This decision relates to careful selection of assets in which funds will be invested by the
firms. A firm has many options to invest their funds but firm has to select the most
appropriate investment which will bring maximum benefit for the firm and deciding or
selecting most appropriate proposal is investment decision.
The firm invests its funds in acquiring fixed assets as well as current assets. When
decision regarding fixed assets is taken it is also called capital budgeting decision.
Factors Affecting Investment/Capital Budgeting Decisions
1. Cash Flow of the Project
2. Return on Investment
3. Risk Involved
4. Investment Criteria
B. Financing Decision
The second important decision which finance manager has to take is deciding source of
finance. A company can raise finance from various sources such as by issue of shares,
debentures or by taking loan and advances. Deciding how much to raise from which
source is concern of financing decision.
C. Dividend Decision
This decision is concerned with distribution of surplus funds. The profit of the firm is
distributed among various parties such as creditors, employees, debenture holders,
shareholders, etc. This decision is also called residual decision because it is concerned
with distribution of residual or left over income. Generally new and upcoming companies
keep aside more of retain earning and distribute less dividend whereas established
companies prefer to give more dividend and keep aside less profit.

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Objectives of the study
To understand the conceptofFinancial Management.
To understand the conceptofWorking Capital, Cash Inflows, Cash
Outflows etc.
To study the Financial Strength of SBI & ICICI.
To make comparative study of both the companies by using Working
Capital Statement.

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CHAPTER 2: Introduction to Working Capital
Every business needs funds for two purposes-for its establishment and to carry out its
day-to-day operations. Long-term funds are required to create production facilities
through purchase of fixed assets such as plant and machinery, land, building, furniture,
etc. Investments in these assets represent that part of firm’s capital which is blocked on a
permanent or fixed bass and is called fixed capital. Funds are also needed for short-term
purposes for the purchase of raw materials, payment of wages and other day-to-day
expenses, etc. These funds are known as working capital. In simple words, working
capital refers to that part of the firm’s capital which is required for financing short term or
current assets such as cash, marketable securities, debtors and inventories. Funds, thus,
invested in current assets keep revolving fast and are being constantly converted into cash
and this cash flow out again in exchange for other current assets. Hence, it is also known
as revolving or circulating capital or short-term capital. Working capital is thus like the
lifeblood of a business. The business will not be able to carry on day-to-day activities
without the availability of adequate working capital.
A positive working capital cycle balances incoming and outgoing payments to
minimize net working capital and maximize free cash flow. For example, a company that
pays its suppliers in 30 days but takes 60 days to collect its receivables has a working
capital cycle of 30 days. This 30 day cycle usually needs to be funded through a bank
operating line, and the interest on this financing is a carrying cost that reduces the
company's profitability. Growing businesses require cash, and being able to free up cash
by shortening the working capital cycle is the most inexpensive way to grow.
Definition
Working capital is a measure of both a company's efficiency and its short-term financial
health. Working capital is calculated as:
Working Capital = Current Assets - Current Liabilities
The working capital ratio (Current Assets/Current Liabilities) indicates whether a
company has enough short term assets to cover its short term debt. Anything below 1
indicates negative W/C (working capital). While anything over 2 means that the company
is not investing excess assets. Most believe that a ratio between 1.2 and 2.0 is sufficient.
Also known as "net working capital".

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BREAKING DOWN 'Working Capital'
If a company's current assets do not exceed its current liabilities, then it may run into
trouble paying back creditors in the short term. The worst-case scenario is bankruptcy. A
declining working capital ratio over a longer time period could also be a red flag that
warrants further analysis. For example, it could be that the company's sales volumes are
decreasing and, as a result, its accounts receivables number continues to get smaller and
smaller. Working capital also gives investors an idea of the company's underlying
operational efficiency. Money that is tied up in inventory or money that customers still
owe to the company cannot be used to pay off any of the company's obligations. So, if a
company is not operating in the most efficient manner (slow collection), it will show up
as an increase in the working capital. This can be seen by comparing the working capital
from one period to another; slow collection may signal an underlying problem in the
company's operations.
CONCEPTS OF WORKING CAPITAL
There are two concepts of working capital:
a) Balance Sheet Concept
b) Operating Cycle or Circular Flow Concept
a) Balance Sheet Concept:
There are two interpretations of working capital under the balance sheet concept.
1. Gross Working Capital
2. Net Working Capital
In the broad sense, the term working capital refers to the gross workings capital and
represents the amount of funds invested in current assets. Thus, the gross working
capital is the capital invested in total current assets of the enterprise. Current assets are
those assets which in the ordinary course of business can be converted into cash within a
short period of normally one accounting year.

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Net working capital is the excess of current assets over current liabilities, or say: Net
Working Capital = Current Assets-Current liabilities.
Net working capital may be positive or negative. When the current assets exceed the
current liability the working capital is positive and the negative working capital results
when the current liabilities are more than the current assets. Current Liabilities are those
liabilities which are intended to be paid in the ordinary course of business within a short
period of normally one accounting year out of the current assets or the income of the
business. The gross working capital concept is financial or going concern concept where
as net working capital is an accounting concept of working capital.
b) Operating Cycle or Circular Flow Concept:
As discussed earlier, working capital refers to that part of firm’s capital which is
required for financing short-term or current assets such as cash, marketable securities,
debtors and inventories, Funds, thus, invested in current assets keep revolving fast and
are being constantly converted into cash and this cash flows out again in exchange for
other current assets. Hence, it is also known as revolving or circulating capital. The
circular flow concept of working capital is based upon this operating or working capital
cycle of a firm. The cycle starts with the purchase of raw material and other resources
and ends with the realisation of cash from the sale of finished goods. It involves purchase
of raw material and stores, its conversion in to sock of finished goods through work-in-
progress with progressive increments of labour and service costs, conversion of finished
stock into sales, debtors and receivables and ultimately realisation of cash and this cycle
continues again from cash to purchase of raw material and so on. The speed/time duration
required to complete one cycle determines the requirements of working capital-longer the
period of cycle, larger is the requirement of working capital.

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 ClassificationorKinds of Working Capital
Working capital may be classified in two ways:
 On the basis of concept.
 On the basis of time.
On the basis of concept, working capital is classified as gross working capital and net
working capital as discussed earlier. This classification is important from the point of
view of the financial manager. On the basis of time, working capital may be classified as:
 Permanent or fixed working capital.
 Temporary or variable working capital.
Permanent or Fixed Working Capital: - Permanent or fixed working capital is
the minimum amount which is required to ensure effective utilization of fixed
facilities and for maintaining the circulation of current assets. There’s is always a
minimum level of current assets which is continuously required by the enterprise
to carry out its normal business operations. For example, every firm has to
maintain a minimum level of raw materials, work-in-process, finished goods and
cash balance. This minimum level of current assets is called permanent or fixed
working capitals as this part of capital is permanently blocked in current assets.
As the business grows, the requirements of permanent working capital also
increase due to the increase in current assets. The permanent working capital can
further be classified as regular working capital and reserve working capital
required to ensure .

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circulation of current assets from cash to inventories, from inventories to receivable and
from receivables to cash and so on. Reserve working capital is the excess amount over
the requirement for regular working capital which may be provided for contingencies that
may arise at unstated periods such as strikes, rise in prices, depression, etc.
Temporary or Variable Working Capital:- Temporary or variable working
capital is the amount of working capital which is required to meet the seasonal
demands and some special exigencies. Variable working capital can be further
classified as seasonal working capital and special working capital. Most of the
enterprises have to provide additional working capital to meet the seasonal and
special needs. The capital required to meet the seasonal needs of the enterprise is
called seasonal working capital. Special Working capital is that part of working
capital is that part of working capital which is required to meet special exigencies
such as lunching of extensive marketing campaigns for conducting research, etc.
 Importance or Advantages of Adequate Working Capital :
Working capital is the life blood and nerve centre of a business. Just as circulation of
blood is essential in the human body for maintaining life, working capital is very
essential to maintain the smooth running of a business. No business can run successfully
without an adequate amount of working capital. The main advantages of maintaining
adequate amount of working capital are as follows:
 Solvency of the business:- Adequate working capital helps in maintaining
solvency of the business by providing uninterrupted flow of production.
 Goodwill:- Sufficient working capital enables a business concern to make prompt
payments and hence helps in creating and maintaining goodwill.
 Easy Loans:- A concern having adequate working capital, high solvency and good
credit standing can arrange loans from banks and others on easy and favourable
terms.
 Cash discounts:- Adequate working capital also enables a concern to avail cash
discounts on the purchases and hence it reduces costs.
 Regular supply of raw Materials:- Sufficient working capital ensures regular
supply of raw materials and continuous production.

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 Regular payment of salaries, wages and other day- to- day commitments:-A
company which has ample working capital can make regular payment of salaries,
wages and other day-to-day commitments which raises the moral of its
employees, increases their efficiency, reduces wastages and costs and enhances
production and profits.
 Exploitation of favourable market conditions:- Only concerns with adequate
working capital can exploit favourable market conditions such as purchasing its
requirements in bulk when the prices are lower and by holding its inventories for
higher prices.
 Ability to face crisis:- Adequate working capital enables a concern to face
business crisis in emergencies such as depression because during such period,
generally, there is much pressure on working capital.
 Quick and regular return on investments:- Every Investor wants a quick and
regular return on his investments. Sufficiency of working capital enables a
concern to pay quick and regular dividends to its investors as there may not be
much pressure to plough back profits. This gains the confidence of its investors
and creates a favourable market to raise additional funds in the future.
 High Morale:- Adequacy of working capital creates an environment of security,
confidence, high morale and creates overall efficiency in a business.
 Factors Determining the Working Capital Requirements
The working capital requirements of a concern depend upon a large number of factors
such as nature and size of business, the character of their operations, the length of
production cycles, the rate of stock turnover and the state of economic situation. It is not
possible to rank them because all such factors are of different importance and the
influence of individual factors changes for a firm over time. However, the following are
important factors generally influencing the working capital requirements.

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 Nature or Character of Business:- The working capital requirements of a firm
basically depend upon the nature of its business. Public utility undertakings like
Electricity, Water Supply and Railways need very limited working capital
because they offer cash sales only and supply services, not products, and a such
no funds are tied up in inventories and receivables. On the other hand trading and
financial firms required less investment in fixed assets but have to invest large
amounts in current asset like inventories, receivables and cash; as such they need
large amount of working capital. The manufacturing undertakings also required
sizable working capital along with fixed investments. Generally speaking it may
be said that public utility undertaking require small amount of working capital,
trading and financial firms required relatively very large amount, whereas
manufacturing undertakings require sizable working capital between these two
extremes.
 Size of Business/Scale of Operations:- The working capital requirements of
concern are directly influenced by the size of its business which may be measured
in terms of scale of operations. Greater the size of a business unit, generally larger
will be the requirements of working capital. However, in some cases even a
smaller concern may need more working capital due to high overhead charges,
inefficient use of available resources and other economic disadvantages of small
size.
 Production Policy:- In certain industries the demand is subject to wide
fluctuations due to seasonal variations. The requirements of working capital, in
such cases, depend upon the production policy. The production could be kept
either steady by accumulating inventories during slack periods with a view to
meet high demand during the peak season or the production could be curtailed
during the slack season and increased during the peak season. If the policy is to
keep production steady by accumulating inventories it will required higher
working capital.
 Manufacturing Process/Length of Production Cycle:- In manufacturing
businesses the requirements of working capital increase in direct proportion to
length of manufacturing process. Longer the process period f manufacture, larger
is the amount of working capital required. The longer the manufacturing time, the
raw materials and other supplies have to be carried for a longer period in the
process with progressive increment of labour and service costs before the finished
product is finally obtained. Therefore, if there are alternative processes of
production, the process with the shortest production period should be chosen.

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 Seasonal Variations: - In certain industries raw material is no available
throughout the year. They have to buy raw materials in bulk during the seasons to
ensure and uninterrupted flow and process them during the entire year. A huge
amount is, thus, blocked in the form of material inventories during such season,
which gives rise to more working capital requirements. Generally, during the busy
season, a firm requires larger working capital than in the slack season.
 Working Capital Cycle:- In a manufacturing concern, the working capital cycle
starts with the purchase of raw material and ends with the realisation of cash from
the sale of finished products. This cycle involves purchase of raw materials and
stores, its conversion into stocks of finished goods through work-in-progress with
progressive increment of labour and service costs, conversion of finished stock
into sales, debtors and receivables and ultimately realisation of cash and this cycle
continues again from cash to purchase of raw material and so on.
 Rate of Stock Turnover:-There is a high degree of inverse co-relationship
between the quantum of working capital and the velocity or speed with which the
sales are affected. A firm having a high rate of stock turnover will need lower
amount of working capital as compared to a firm having a low rat of turnover. For
example, in case of precious stone dealers, the turnover is very slow. They have to
a maintain a large variety of stocks and the movement of stocks is very slow.
Thus, the working capital requirements of such a dealer shall be higher than that
of a provision store.
 Credit Policy: - The credit policy of a concern in its dealings with debtors and
creditors influence considerably the requirements of working capital. A concern
that purchases its requirements on credit and sells its products/services on cash
requires lesser amount of working capital. On the other hand a concern buying its
requirements for cash and allowing credit to its customers, shall need larger
amount of working capital as very huge amount of funds are bound to be tied up
in debtors or bills receivables.
 Business Cycles:- Business cycle refers to alternate expansion and contraction in
general business activity. In a period of book i.e., when the business is
prosperous, there is a need for larger amount of working capital due t increase in
sales, rise in prices, optimistic expansion of business, etc. On the contrary in the
times of depression i.e., when there is a down swing of the cycle, the business
contracts, sales decline, difficulties are faced in collections from debtors and firms
may have a large amount of working capital lying idle.

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 Rate of Growth of Business:- The working capital requirements of a concern
increase with the growth and expansion of its business activities. Although, it is
difficult to determine the relationship between the growth in the volume of
business and the growth in the working capital of a business, yet it may be
concluded that for normal rate of expansion in the volume of business, we may
have retained profits to provide for more working capital but in fast growing
concerns, we shall require larger amount of working capital.
 Price Level Changes: - Changes in the price level also affect the working capital
requirements Generally, the rising prices will require the firm to maintain larger
amount of working capital as more funds will be required to maintain the same
current assets. The effect of rising prices may be different for different firms.
Some firms may be affected much while some others may not be affected at all by
the rise in prices
 Earning Capacity and Dividend Policy:- Some firms have more earning
capacity than others due to quality of their products, monopoly conditions, etc.
Such firms with high earning capacity may generate cash profits from operations
and contribute to their working capital. The dividend policy of a concern also
influences the requirements of its working capital. A firm that maintains a steady
high rate of cash dividend irrespective of its generation of profits needs more
working capital then the firm that retains larger part of its profits and does not pay
so high rate of cash dividend.
 Other Factors: - Certain other factors such as operating efficiency, management
ability, irregularities of supply, import policy, asset structure, importance of
labour, banking facilities, etc., also influence the requirements of working capital.

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Format of Working Capital Statement

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CHAPTER 3: INDUSTRY PROFLE
STATE BANK OF INDIA (SBI)
The evolution of State Bank of India can be traced back to the first decade of the 19th
century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June
1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January
1809. It was the first ever joint-stock bank of the British India, established under the
sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay
(established on 15 April 1840) and the Bank of Madras (established on 1 July 1843)
followed the Bank of Bengal. These three banks dominated the modern banking scenario
in India, until when they were amalgamated to form the Imperial Bank of India, on 27
January 1921.
An important turning point in the history of State Bank of India is the launch of the first
Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian
economy in general and the rural sector of the country, in particular. Until the Plan, the
commercial banks of the country, including the Imperial Bank of India, confined their
services to the urban sector. Moreover, they were not equipped to respond to the growing
needs of the economic revival taking shape in the rural areas of the country. Therefore, in
order to serve the economy as a whole and rural sector in particular, the All India Rural
Credit Survey Committee recommended the formation of a state-partnered and state-
sponsored bank.
The All India Rural Credit Survey Committee proposed the takeover of the Imperial
Bank of India, and integrating with it, the former state-owned or state-associate banks.
Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the
State Bank of India (SBI) was established on 1 July 1955. This resulted in making the
State Bank of India more powerful, because as much as a quarter of the resources of the
Indian banking system were controlled directly by the State. Later on, the
State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the
State Bank of India to make the eight former State-associated banks as its subsidiaries.
The State Bank of India emerged as a pacesetter, with its operations carried out by the
480 offices comprising branches, sub offices and three Local Head Offices, inherited
from the Imperial Bank. Instead of serving as mere repositories of the community's
savings and lending to creditworthy parties, the State Bank of India catered to the needs
of the customers, by banking purposefully. The bank served the heterogeneous financial
needs of the planned economic development.

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History
The roots of the State Bank of India lie in the first decade of the 19th century, when the
Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The
Bank of Bengal was one of three Presidency banks, the other two being the Bank of
Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July
1843). All three Presidency banks were incorporated as joint stock companies and were
the result of royal charters. These three banks received the exclusive right to issue paper
currency till 1861 when, with the Paper Currency Act, the right was taken over by the
Government of India. The Presidency banks amalgamated on 27 January 1921, and the
re-organized banking entity took as its name Imperial Bank of India. The Imperial Bank
of India remained a joint stock company but without Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of
India, which is India's central bank, acquired a controlling interest in the Imperial Bank
of India. On 1 July 1955, the imperial Bank of India became the State Bank of India. In
2008, the Government of India acquired the Reserve Bank of India's stake in SBI so as to
remove any conflict of interest because the RBI is the country's banking regulatory
authority.
BOARD OF DIRECTORS
1. Smt. Arundhati Bhattacharya Chairman 19(a)
2. Shri P. Pradeep Kumar Managing Director 19 (b)
3. Shri B. Sriram Managing Director 19 (b)
4. Shri.V.G.Kannan Managing Director 19 (b)
5. Shri Rajnish Kumar Managing Director 19 (b)
6. Shri Sanjiv Malhotra Director 19 (c)
7. Shri Sunil Mehta Director 19 (c)
8. Shri M.D. Mallya Director 19 (c)
9. Shri Deepak I. Amin Director 19 (c)
10. Shri TribhuwanNathChaturvedi Director 19 (d)
11. Ms. Anjuly Chib Duggal Director 19 (e)

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SBI Balance Sheet
Particulars Mar'15 Mar'14
Liabilities 12 Months 12 Months
Share Capital 746.57 746.57
Reserves & Surplus 127691.65 117535.68
Net Worth 128438.22 118282.25
Secured Loan 205150.29 183130.88
Unsecured Loan 1576793.24 1394408.5
TOTAL LIABILITIES 1910381.75 1695821.6
Assets
Gross Block 9329.16 8002.16
(-) Acc. Depreciation 0 0
Net Block 9329.16 8002.16
Capital Work in Progress 0 0
Investments 495027.4 398308.19
Inventories 0 0
Sundry Debtors 0 0
Cash and Bank 174861.3 132549.63
Loans and Advances 1368861.94 1253374.6
Total Current Assets 1543723.24 1385924.3
Current Liabilities 137698.05 96412.96
Provisions 0 0
Total Current Liabilities 137698.05 96412.96
NET CURRENT ASSETS 1406025.19 1289511.3
Misc. Expenses 0 0
TOTAL ASSETS(A+B+C+D+E) 1910381.75 1695821.6

24
Industrial Credit and Investment Corporation of India Bank
(ICICI)
ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial
institution, in 1994. Four years later, when the company offered ICICI Bank's shares to
the public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank
offered made an equity offering in the form of ADRs on the New York Stock Exchange
(NYSE), thereby becoming the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired the
Bank of Madura Limited in an all-stock amalgamation. Later in the year and the next
fiscal year, the bank made secondary market sales to institutional investors.
With a change in the corporate structure and the budding competition in the Indian
Banking industry, the management of both ICICI and ICICI Bank were of the opinion
that a merger between the two entities would prove to be an essential step. It was in 2001
that the Boards of Directors of ICICI and ICICI Bank sanctioned the amalgamation of
ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. In the following
year, the merger was approved by its shareholders, the High Court of Gujarat at
Ahmedabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of
India.
ICICI Bank has its equity shares listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited. Overseas, its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange (NYSE). As of December 31, 2008,
ICICI is India's second-largest bank, boasting an asset value of Rs. 3,744.10 billion and
profit after tax Rs. 30.14 billion, for the nine months, that ended on December 31, 2008.
ICICI Bank Limited (the Bank) is a banking company engaged in providing a range of
banking and financial services, including commercial banking and treasury operations. It
operates under four segments: retail banking, wholesale banking, treasury and other
banking. The Bank’s subsidiaries include ICICI Prudential Life Insurance Company
Limited, ICICI Lombard General Insurance Company Limited, ICICI Trusteeship
Services Limited, ICICI Prudential Pension Funds, Management Company Limited,
ICICI Home Finance Company Limited and ICICI Securities Limited.

25
Present Scenario
ICICI Bank has its equity shares listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited. Overseas, its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange (NYSE). As of December 31, 2008,
ICICI is India's second-largest bank, boasting an asset value of Rs. 3,744.10 billion and
profit after tax Rs. 30.14 billion, for the nine months, that ended on December 31, 2008.
Branches & ATMs
ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank has
1,420 branches and about 4,644 ATMs. Talking about foreign countries, ICICI Bank has
made its presence felt in 18 countries - United States, Singapore, Bahrain, Hong Kong,
Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in
United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and
Indonesia. The Bank proudly holds its subsidiaries in the United Kingdom, Russia and
Canada out of which, the UK subsidiary has established branches in Belgium and
Germany.
History
ICICI Bank was established by the Industrial Credit and Investment Corporation of India
(ICICI) , an Indian financial institution, as a wholly owned subsidiary in 1994. The parent
company was formed in 1955 as a joint-venture of the World Bank, India's public-sector
banks and public-sector insurance companies to provide project financing to Indian
industry.[9][10] The bank was initially known as the Industrial Credit and Investment
Corporation of India Bank, before it changed its name to the abbreviated ICICI Bank.
The parent company was later merged with the bank.
ICICI Bank launched internet banking operations in 1998.
ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering
of shares in India in 1998, followed by an equity offering in the form of American
Depositary Receipts on the NYSE in 2000. ICICI Bank acquired the Bank of Madura
Limited in an all-stock deal in 2001 and sold additional stakes to institutional investors
during 2001-02.
In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group, offering a wide
variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the NYSE.

26
ICICI Balance Sheet
Particulars Mar'15 Mar'14
Liabilities 12 Months 12 Months
Share Capital 1167.1 1161.62
Reserves & Surplus 79262.26 72051.71
Net Worth 80429.36 73213.33
Secured Loan 172417.35 154759.05
Unsecured Loan 361562.73 331913.66
TOTAL LIABILITIES 614409.44 559886.04
Assets
Gross Block 4725.52 4678.14
(-) Acc. Depreciation 0 0
Net Block 4725.52 4678.14
Capital Work in Progress 0 0
Investments 186580.03 177021.82
Inventories 0 0
Sundry Debtors 0 0
Cash and Bank 42304.62 41529.6
Loans and Advances 412519.12 371412.04
Total Current Assets 454823.74 412941.63
Current Liabilities 31719.86 34755.55
Provisions 0 0
Total Current Liabilities 31719.86 34755.55
NET CURRENT ASSETS 423103.88 378186.09
Misc. Expenses 0 0
TOTAL ASSETS(A+B+C+D+E) 614409.44 559886.04

27
Working Capital Statement of SBI
Particulars 2015 2014
Current Assets :
1) Inventories 0 0
2) Sundry Debtor 0 0
3) Cash& Bank Balance 174861.3 132549.63
TotalCurrent Assets (A) 174861.3 132549.63
Current Liabilities :
1) Current Liabilities 137698.05 96412.96
TotalCurrent Liabilities (B) 137698.05 96412.96
Working Capital ( A – B ) 37163.25 36136.67
Working Capital Statement of ICICI
Particulars 2015 2014
Current Assets :
1) Inventories 0 0
2) Sundry Debtor 0 0
3) Cash& Bank Balance 42304.62 41529.6
TotalCurrent Assets (A) 42304.62 41529.6
Current Liabilities :
1) Current Liabilities 31719.86 34755.55
TotalCurrent Liabilities (B) 31719.86 34755.55
Working Capital ( A – B ) 10584.76 6774.05

28
CHAPTER 4: Comments
1) From the overall information the Working Capital of SBI is Rs.36136.67 & Rs.
37163.25 for the year 2014 & 2015 respectively.
2) The Working Capital of ICICI is Rs.10584.76 in the year 2015 & Rs.6774.05 in year
2014.
3) Cash & Bank Balance of both the bank were Rs. 174861.3 & Rs.1576.13 in the year
2015 respectively while in 2014 they were Rs. 132549.63& Rs. 41529.6.
4) The Current Liabilities of SBI were Rs. 137698.05& Rs. 96412.96 Resp. & ICICI
were Rs. 31719.86 & Rs. 34755.55 Resp.

29
Webilography
 http://www.slideshare.net
 http:// http://profit.ndtv.com/
 https://en.wikipedia.org
 http://www.moneycontrol.com/

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