A

SUMMER INTERNSHIP PROJECT REPORT

ON

FINANCIAL ANALYSIS AT HDFC BANK

Submitted for partial fulfilment of requirement for the award of
degree of
Master of Business Administration

DEV BHOOMI UTTARAKHAND UNIVERSITY

DEHRADUN(UTTARAKHAND)

SESSION 2021-2023

Under the Guidance of: Submitted By:

1
CERTIFICATE FROM THE INSTITUTE

This is to certify that the Project Report titled Study of “

FINANCIAL ANALYSIS AT HDFC BANK “:a Bonafede work carried out
by Mr. UJJAWAL KUMAR of MBA 2021-2023 and submitted to DEV
BHOOMI UTTARAKHAND UNIVERSITY in partial fulfillment of the
requirement for the award of the degree of Masters of Business
Administration.

Signature of Guide Signature of Head

Place
Date

2
DECLARATION

I student of MBA 2021-2023 of DEV BHOOMI

UTTARAKHAND UNIVERSITY declare that Report on impact of
finance decision in hotel industry submitted in partial fulfillment
of Degree of Masters of Business Administration is the original
work conducted by me.

The information and data given in the report is authentic to the best
of my knowledge. This report is not being submitted to any other
University for award or any Degree, Diploma and Fellowship.

Place

Date

3
 TABLE OF CONTENT

TITLE
Title Page
Certificate of Originality
Preface
Acknowledgement
Table of Contents
Chapter 1: Introduction
Chapter 2: Company Profile
Chapter 3 : Literature Review
Chapter 4: Research Objectives & Hypothesis
Chapter 5: Research Methodology
Chapter 6: Data Analysis
Chapter 7 Findings and Conclusion
BIBLIOGRAPHY

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CHAPTER-1
INTRODUCTION

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EXECUTIVE SUMMARY
The report contains the organizational study done at HDFC Bank. The report title is financial
analysis of HDFC BANK”. The report gives an overview of the banking Sector and company
profile. And awareness of customers about different types of products and services offered by
HDFC Bank. This study was conducted to find out the customer satisfaction regarding HDFC
bank. The methodology adopted for the study was through a structured questionnaire,
which is targeted to the different persons in Machhiwara. For this purpose sample
size of 100 was taken. The data collected from the different persons was analyzed thoroughly
and presented in the form of charts and tables.

HDFC must advertise regularly and create brand value for its products and services. Most of its
competitors like ICICI, Axis, Kotak Mahindra and nationalized banks use television
advertisements to promote their products. The Indian consumer has a false perception about
private banks – they feel that it would not safe.
Safety and returns are the two main reasons people invest in banks. On the whole HDFC bank is
a good place to work at. Every new recruit is provided with extensive training on
the products of HDFC. This training enables an advisor/sales manager to market the policies
better. The company should try to create awareness about itself in India. . With an improvement
in the sales techniques used, a fair bit of advertising and modifications to the existing product
portfolio, HDFC would be all set to capture the banking market in India as it has around the
globe.

The Salient Features of the Bank are:

 Leading Co-operative Bank of Northern India.

 Competitive interest rates on deposits and loans.

 All deposits are insured under DICGC Scheme.

 Draft facility throughout India.

 Micro-level advancing to individual borrowers in agriculture, small-scale

industries and service sector.

 Macro-level advancing to Societies and Self-Help Groups for social development.

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 Financing infrastructure development of the State through HPSEB, HRTC, HPFC,
HPIDB, HPSCSC etc.

 Disbursing pensions to HPSEB, HRTC, Defence personnel and freedom fighters.

 All borrowers extended Insurance facilities.

 Fully computerised Bank head office, zonal offices and four main branches at
Dharamshala, Una, Hamirpur and Kullu.

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 CHAPTER 1

Banking means accepting the deposits from the customers for lending to the needy and extending
the other services as to issue of dd etc. nowadays after introduction of private sector banks
the banks have become a profit centre and the functions become changed and now
banks are doing the insurance and mutual funds also. But nationalized banks are
still service oriented in extending loans for Education loan, and rural development
activities.

A Bank is an organization which lends money to the borrowers for a purposeful task, and
provides a facility to deposit and withdraw money when needed and charge for it.

BANKING CHANNELS:
Banks offer many different channels to access their banking and other services:

ATM is a machine that dispenses cash and sometimes takes deposits without the need for a human
bank teller. Some ATMs provide additional services.

A branch is a retail location.

Call centre.

 Mobile banking is a method of using one's mobile phone to conduct banking transactions.
 Online banking is a term used for performing transactions, payments etc. over the
Internet.

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 CORPORATE TIE-UP:

National Insurance Company Limited

The Bank has signed a MOU with "National Insurance Company Limited" for Corporate Agency
Arrangement to provide non-life Insurance Services to Customers and General public along with
the Banking Services at a single window through various branches of the Bank.

Kotak Mahindra, Old Mutual Life Insurance Limited

We are pleased to inform you that Bank has entered into a Referral Agreement with Kotak
Mahindra, Old Mutual Life Insurance Limited. Under the agreement, the Bank will refer its
customers and prospective customers through its branches to the insurance company for
distribution and providing its life insurance products viz. Sukhi Jeewan and Eternal Life.

Hero
We are pleased to inform you that Bank has entered into an MOU with Hero Honda Motors for
financing Motor Cycles.

Tata Motors
We are pleased to inform you that Bank has entered into an MOU with Tata Motors for financing
Tata Vehicles.
.

AXIS,and ICICI Bank

The Bank has also corporate tie-up with AXIS, and ICICI Bank for remittance and collection
purposes.

Schedule of Banks (1.1)

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 Table 1.1

Scheduled banks in India

Scheduled commercial Scheduled co-operative

banks banks

Foreign Regional
Public Private banks rural bank
sector sector

Scheduled Scheduled
urban co- state co-
operative operative
Nationalized SBI & its Old private New private
banks banks
banks associates bank bank

Source:-www.hdfc.com

At present there are (27) Public Sector Banks, about (30) Private Sector Banks, (40) Foreign
Banks and (196) RRB’s, Urban Co-Operative Banks (52), State Co-Operative bank

(16), Nationalized Banks (19), State Bank of India Associates (8), there are about 68,000
branches that exist across country.

RBI as a Regulatory Body:

The central bank of the country is the Reserve Bank of India (RBI). It was established in April
1935 with a share capital of Rs. 5crores 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. 220,000. Reserve Bank of India was nationalized in the year 1949. The
Bank was constituted for the need of following:

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  To regulate the issue of banknotes.
 To maintain reserves with a view to securing monetary stability.
 To operate the credit and currency system of the country to its advantage.
Functions of Reserve Bank of India:-
The Reserve Bank of India Act of 1934 entrust all the important functions of a central bank the
Reserve Bank of India.

Bank of Issue:-

Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank
notes of all denominations. The distribution of one rupee notes and coins and small coins all over
the country is undertaken by the Reserve Bank as agent of the Government. The Reserve Bank
has a separate Issue Department which is entrusted with the issue of currency notes.

Banker to Government:-

The second important function of the Reserve Bank of India is to act as Government banker,
agent and adviser. The Reserve Bank is agent of Central Government and of all State
Governments in India.

Bankers' Bank and Lender of the Last Resort:-

The Reserve Bank of India acts as the bankers' bank. According to the provisions of the Banking
Companies Act of 1949, every scheduled bank was required to maintain with the Reserve Bank a
cash balance equivalent to 5% of its demand liabilities and 2 per cent of its time liabilities in
India. By an amendment of 1962, the distinction between demand and time liabilities was
abolished and banks have been asked to keep cash reserves equal to 3 per cent of their aggregate
deposit liabilities. The minimum cash requirements can be changed by the Reserve Bank of
India.

The Scheduled banks can borrow from the Reserve Bank of India on the basis of eligible
securities or get financial accommodation in times of need or stringency by rediscounting bills of
exchange. Since commercial banks can always expect the Reserve Bank of India to come to their
help in times of banking crisis the Reserve Bank becomes not only the banker's bank but also the
lender of the last resort.

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Controller of Credit:-

The Reserve Bank of India is the controller of credit i.e. it has the power to influence the volume
of credit created by banks in India. It can do so through changing the Bank rate or through open
market operations. According to the Banking Regulation Act of 1949, the Reserve Bank of India
can ask any particular bank or the whole banking system not to lend to particular groups or
persons on the basis of certain types of securities. Since 1956, selective controls of credit are
increasingly being used by the Reserve Bank. The Reserve Bank of India is armed with many
more powers to control the Indian money market. Every bank has to get a license from the
Reserve Bank of India to do banking business within India, the license can be cancelled by the
Reserve Bank of certain stipulated conditions are not fulfilled. Every bank will have to get the
permission of the Reserve Bank before it can open a new branch. Each scheduled bank must
send a weekly return to the Reserve Bank showing, in detail, its assets and liabilities. This power
of the Bank to call for information is also intended to give it effective control of the credit
system. The Reserve Bank has also the power to inspect the accounts of any commercial bank.

As supreme banking authority in the country, the Reserve Bank of India, therefore, has the
following powers:

(a) It holds the cash reserves of all the scheduled banks.

(b) It controls the credit operations of banks through quantitative and qualitative controls.

(c) It controls the banking system through the system of licensing, inspection and calling for
information.

(d) It acts as the lender of the last resort by providing rediscount facilities to scheduled banks.

Supervisory functions:-

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In addition to its traditional central banking functions, the Reserve bank has certain non-
monetary functions of the nature of supervision of banks and promotion of sound banking in
India. The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949 have given the RBI
wide powers of supervision and control over commercial and co-operative banks, relating to
licensing and establishments, branch expansion, liquidity of their assets, management and
methods of working, amalgamation, reconstruction, and liquidation. The RBI is authorized to
carry out periodical inspections of the banks and to call for returns and necessary information
from them.

Promotional functions:-

With economic growth assuming a new urgency since Independence, the range of the Reserve
Bank's functions has steadily widened. The Bank now performs variety of developmental and
promotional functions, which, at one time, were regarded as outside the normal scope of central
banking. The Reserve Bank was asked to promote banking habit, extend banking facilities to

rural and semi-urban areas, and establish and promote new specialized
Financing agencies.
Classification of RBIs functions:-

The monetary functions also known as the central banking functions of the RBI are related to
control and regulation of money and credit, i.e., issue of currency, control of bank credit, control
of foreign exchange operations, banker to the Government and to the money market. Monetary
functions of the RBI are significant as they control and regulate the volume of money and credit
in the country.

Customer satisfaction refers to how satisfied customers are with the products or services they
receive from a particular agency. The level of satisfaction is determined not only by the quality
and type of customer experience but also by the customer’s expectations.

A customer may be defined as someone who

 has a direct relationship with, or is directly affected by your agency and

 Receives or relies on one or more of your agency’s services or products.

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Customers in human services are commonly referred to as service users, consumers
or clients. They can be individuals or groups. An organization with a strong customer service
culture places the customer at the centre of service design, planning and service
delivery. Customer centric organizations will:
 Determine the customer’s expectations when they plan listen to the
customer as they design.
 Focus on the delivery of customer service activities value customer feedback when
they measure performance.

Why is it important?
There are a number of reasons why customer satisfaction is important in Banking Sector:
Meeting the needs of the customer is the underlying rationale for the
existence of community service organizations. Customers have a right to quality services that
deliver outcomes.

 Organizations that strive beyond minimum standards and exceed the expectations
of their customers are likely to be leaders in their sector.
 Customers are recognized as key partners in shaping service development
and assessing quality of service delivery.
The process for measuring customer satisfaction and obtaining feedback on organizational
performance are valuable tools for quality and continuous service improvement.

HDFC BANK

The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an ‘in principle' approval from the Reserve Bank of India (RBI) to set
up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry
in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited',
with its registered office in Mumbai, Inpdia.
H D F C B a n k c o m m e n c e d o p e r a t i o n s a s a Scheduled Commercial Bank in January
1995.
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HDFC is India’s premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception in 1977, the Corporation has
maintained a Consistent and healthy growth in its operations to remain the market leader in
mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has
developed significant expertise in retail mortgage loans to different market segments
and also has a large corporate client base for its housing related credit
facilities. With its experience in the financial markets, a strong market reputation, large
shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a
bank in the Indian environment.

HDFC Bank began operations in 1995 with a simple mission to be a “World Class Indian
Bank.” It realized that only
a s i n g l e m i n d e d f o c u s o n p r o d u c t q u a l i t y a n d s e r v i c e excellence would
help us get there. Today, the Bank is proud to say that it is well on its way towards that goal.

TECHNOLOGY USED IN HDFC BANK

In the era of globalization each and every sector faced the stiff competition from their rivals. And
world also converted into the flat from the globe. After the policy of liberalization and RBI
initiatives to take the step for the private sector banks, more and more changes are taking the part
into it. And there are create competition between the private sector banks and public sector bank.
Private sector banks are today used the latest technology for the different transaction of day to
day banking life. As we know that Information Technology plays the vital role in the each and
every industry and gives the optimum return from the limited resources. Banks are service
industries and today IT gives the innovative Technology application to Banking
industries. HDFC BANK is the leader in the industries and today IT and HDFC BANK together
combined they reached the sky. New technology changed the mind of the customers and changed
the queue concept from the history banking transaction. Today there are different channels are
available for the banking transactions. We can see that the how technology gives the best results
in the below diagram. There are drastically changes seen in the use of Internet banking, in a year
2001 (2%) and in the year 2008 (25%). This type of technology gives the freedom to retail
customers.
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HDFC BANK is the very consistent player in the new private sector banks. New private sector
banks to withstand the competition from public sector banks came up with innovative products

• Auto Loan • Saving a/c • Mutual Fund

• Loan Against Security • Current a/c • Bonds

• Loan Against Property • Fixed deposit • Knowledge Centre

• Personal loan • Demat a/c • Insurance

• Credit card • Safe Deposit • General and Health Insurance

Lockers
• 2-wheeler loan
• Equity and Derivatives
• Commercial vehicles finance
• Mudra Gold Bar
• Home loans

• Retail business banking

• Tractor loan

• Construction Equipment
Finance Working Capital
Finance

• Health Care Finance

• Education Loan

• Gold Loan Deposit Product

HDFC BANK PRODUCT AND CUSTOMER SEGMENTS

PERSONAL BANKING

Cards Payment Services Access To Bank

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 • Credit Card • NetSafe • NetBanking

• Debit Card • Merchant • OneView

• Prepaid Card • Prepaid Refill • InstaAlert MobileBanking

• Billpay • ATM

• Visa Billpay • Phone Banking

• InstaPay • Email Statements

Forex Service • DirectPay • Branch Network

• Product & Services • VisaMoney Transfer

• Trade Services • e–Monies Electronic

Funds Transfer
• Forex service Branch
Locater • Online Payment of Direct
Tax
• RBI Guidelines

Corporate Small and Medium Enterprises Financial Institutions and Trusts

• Funded Services • Funded Services BANKS

• Non Funded Services • Non Funded Services • Clearing Sub Membership

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• Value Added Services • Specialized Services • RTGS – submembership

• Internet Banking • Value added services • Fund Transfer

• Internet Banking • ATM Tie-ups

• Corporate Salary a/c

• Tax Collection

Financial Institutions

Mutual Funds

Stock Brokers

Insurance Companies

Commodities

Business

Trusts

WHOLESALE BANKING

BUSINESS STRETEGY
HDFC BANK mission is to be "a World Class Indian Bank", benchmarking themselves against
international standards and best practices in terms of product offerings, technology, service
levels, risk management and audit & compliance. The objective is to build sound customer
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franchises across distinct businesses so as to be a preferred provider of banking services for
target retail and wholesale customer segments, and to achieve a healthy growth in profitability,
consistent with the Bank's risk appetite. Bank is committed to do this while ensuring the highest
levels of ethical standards, professional integrity, corporate governance and regulatory
compliance. Continue to develop new product and technology is the main business strategy of
the bank. Maintain good relation with the customers is the main and prime objective of the bank.

HDFC BANK business strategy emphasizes the following:

• Increase market share in India’s expanding banking and financial services industry by
following a disciplined growth strategy focusing on quality and not on quantity and delivering
high quality customer service.

• Leverage our technology platform and open scalable systems to deliver more products to more
customers and to control operating costs.

• Maintain current high standards for asset quality through disciplined credit risk management.

• Develop innovative products and services that attract the targeted customers and address
inefficiencies in the Indian financial sector.

• Continue to develop products and services that reduce bank’s cost of funds.

• Focus on high earnings growth with low volatility.

INSIDE HDFC BANK

FIVE “S”, PART OF KAIZEN
WORK PLACE TRANSFORMATION

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Focus on effective work place organization

Believe in

“Small changes lead to large improvement”

Every successful organization has their own strategy to win the race in the competitive market.
They use some technique and methodology for smooth running of business. HDFC BANK also
acquired the Japanese technique for smooth running of work and effective work place
organization.

Five ‘S’ Part of Kaizen is the technique which is used in the bank for easy and systematic work
place and eliminating unnecessary things from the work place.

BENEFIT OF FIVE “S”

 It can be started immediately.

 Every one has to participate.

 Five “S” is an entirely people driven initiatives.

 Brings in concept of ownership.

 All wastage are made visible.

FIVE ‘S’ Means: Table 2.2

S-1 SORT SEIRI

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S-2 SYSTEMATIZE SEITON

S-3 SPIC-N-SPAN SEIRO

S-4 STANDARDIZE SEIKETSU

S-5 SUSTAIN SHITSUKE

(1) SORT :

 It focuses on eliminating unnecessary items from the work place.

 It is excellent way to free up valuable floor space.

 It segregates items as per “require and wanted”.

Frequently Less Frequently

Required Required

Remove
everything from
workplace

Wanted but not Junk

Required

(2) SYSTEMATIZE :

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 Systematize is focus on efficient and effective Storage method. That means it identify,
organize and arrange retrieval. It largely focuses on good labeling and identification
practices. Objective: - “A place for everything and everything in its place”.

(3) SPIC- n - SPAN :

Spic-n-Span focuses on regular clearing and self inspection. It brings in the sense of
ownership.

(4) STANDERDIZE :

It focuses on simplification and standardization. It involves standard rules and policies.

It establish checklist to facilitate autonomous maintenance of workplace. It assigns
responsibility for doing various jobs and decides on Five S frequency.

(5) SUSTAIN:

It focuses on defining a new status and standard of organized work place. Sustain
means regular training to maintain standards developed under S-4. It brings in self-
discipline and commitment towards workplace organization.

Table 2.3
LABELLING ON FILE

FILE NUMBER

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SUBJECT
 FROM DATE

TO DATE

OWNER

BOX LABEL

For Example

1/3/A/6

1 – Work Station (1)

3 – Drawer (3)

A - Shelf (A)

6 – File Number (6)

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 COLOUR CODING OF FILES
Table 2.4

DEPARTMENT

Welcome Desk

Personal Banker

Teller

Relationship Manager

Branch Manager

Demat

Others

In the HDFC BANK each department has their different color coding apply on the different file.
Due to this everyone aware about their particular color file which is coding on it and they save
their valuable time. It is a part of Kaizen and also included in the system of the Five ‘S’. Logic
behind it that, the color coding are always differentiate the things from the similar one.

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HUMAN RESOURCES
The Bank’s staffing needs continued to increase during the year particularly in the retail banking
businesses in line with the business growth. Total number of employees increased from 14878 as
of March31, 2006 to 21477 as of March 31, 2007. The Bank continues to focus on training its
employees on a continuing basis, both on the job and through training programs conducted by
internal and external faculty. The Bank has consistently believed that broader employee
ownership of its shares has a positive impact on its performance and employee motivation. The
Bank’s employee stock option scheme so far covers around 9000 employees.

RUPEE EARNED - RUPEE SPENT

It is more important for every organization to know about from where and where to spent money.
And balanced between these two things rupee earned and rupee spent are required for smooth
running of business and financial soundness. This type of watch can control and eliminate the
unnecessary spending of business. In this diagram it includes both things from where
bank earned Rupee and where to spent.

HDFC BANK earned from the ‘Interest from Advances’ 51.14 % , ‘Interest from Investment’
27.12 %,bank earned commission exchange and brokerage of 15.25 %. These are the major
earning sources of the bank. Bank also earned from the Forex and Derivatives and some other
Interest Income. Bank spent 39.75 % on Interest Expense, 30.27 % on Operating Expense and
14.58 % on Provision. Bank also spent Dividend and Tax on dividend, Loss on Investment, Tax.
As we discuss above that balancing is must between these two for every organization

RECENT DEVELOPMENT

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 The Reserve Bank of India has approved the scheme of
amalgamation of Centurion Bank of Punjab Ltd. With
HDFC Bank Ltd. with effect from May 23, 2008.
All the branches of Centurion Bank of Punjab will function
as branches of HDFC Bank with effect from May 23,
2008. With RBI’s approval, all requisite statutory and
regulatory approvals for the merger have been obtained.

The combined entity would have a nationwide network of 1167 branches; a strong deposit base
of around Rs.1, 22,000 crores and net advances of around Rs.89, 000 crores. The balance sheet
size of the combined entity would be over Rs.1, 63,000 crores.

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Merger with Centurion Bank of Punjab Limited

On March 27, 2008, the shareholders of the Bank accorded their consent to a scheme of
amalgamation of Centurion Bank of Punjab Limited with HDFC Bank Limited. The shareholders
of the Bank approved the issuance of one equity share of Rs.10/- each of HDFC Bank Limited
for every 29 equity shares of Re. 1/- each held in Centurion Bank of Punjab Limited. This is
subject to receipt of Approvals from the Reserve Bank of India, stock exchanges and Other
requisite statutory and regulatory authorities. The shareholders Also accorded their consent to
issue equity shares and/or warrants convertible into equity shares at the rate of Rs.1,530.13 each
to HDFC Limited and/or other promoter group companies on preferential basis, subject to final
regulatory approvals in this regard. The

Shareholders of the Bank have also approved an increase in the authorized capital from Rs.450
crores to Rs.550 crores.

Promoted in 1995 by Housing Development Finance Corporation (HDFC), India's

leading housing finance company, wide range of financial products and service

27
 RATIO ANALYSIS
Gross Profit Ratio:

This ratio is also known as Gross Margin or Trading Ratio. Gross Profit Ratio includes
the difference between sales and direct costs.

Gross Profit
Gross Profit Ratio = X100
Net Sales

Table No 5.1.1 GROSS PROFIT RATIO

Years Gross Profit Net sales Ratio

(Rs.) (Rs.) (In %)

2017-2018 30289.71 90176.44 33.58

2018-2019 21971.03 108277.62 20.29

2019-2020 32347.63 118189.37 27.37

Chart No 5.1.1 GROSS PROFIT RATIO

28
 40
30
20
10
0
2017-2018 2018-2019 2019-2020
YEARS

INFERENCES:

29
 The Gross Profit for the financial year 2018-2019 was recorded as per the ratio is
33.58%, where as the years between 2019-2020 went through a change in the ratio of
20.29% and the companies profit went upward in 2018-2019 with the ratio of 27.37%. Thus,
it is showing the steady growth in the company profile.

30
NET PROFIT RATIO

It measures of management efficiency in operating the business successfully from the

owner‟s point of view. It indicates the return on shareholder's investment. Higher the ratio
better is the operational efficiency of business concern.

Net Profit after Tax

Net Profit Ratio = X 100
Net Sales

Table No 5.1.2 NET PROFIT RATIO

Years Net Profit Net sales Ratio

(Rs.) (Rs.) (In %)
2017-2018 21254.24 90176.44 23.56

2018-2019 15073.14 108277.62 13.92

2019-2020 22674.86 118189.37 19.18

Chart No 5.1.2 NET PROFIT RATIO

31
 25
20
15
10
5
0
2017-2018 2018-2019 2019-2020
PE

YEARS

32
INFERENCES:

The Net Profit Ratio depicts that the company had a good profit in 2018-2019 where it
had a good yield profit. Comparing to the year 2019-2020 is 13.92%, the sales of the company
have a steady attitude and increase upwards to 19.18%. This indicates that there is an
improvement in the operational efficient of the business and it leads to the increase in the
profitability of the firm.

33
RETURN ON EQUITY OR RETURN ON NET WORTH

This ratio signifies the return on equity shareholders funds. The profit considered for computing
the ratio is taken after payment of preference dividend.

Net profit after interest and tax

Return on Equity = X 100
Shareholder fund

Table No 5.1.3 RETURN ON EQUITY

Years Net profit after Shareholder Ratio

interest and tax Fund (Rs.) (In %)
(Rs.)
2017-2018 21254.24 231280.81 9.18

2018-2019 15073.14 268538.97 5.61

2019-2020 22674.86 333318.07 6.80

Chart No 5.1.3 RETURN ON EQUITY

34
 10
8
PERCENTAGE)

6
RATIO (IN

4
2
0
2017-2018 2018-2019 2019-2020
YEARS

INFERENCES:

35
 Return on shareholder fund determines the profitability from the shareholders point of
view. From the above, it shows that in the year 2019-2020, the company shows 5.61% of ratio
and it has risen to 6.80%. This is a clear indication of overall operation is efficient.

36
TURNOVER RATIO

WORKING CAPITAL TURNOVER RATIO

Working capital ratio measures the effective utilization of working capital. It also
measures the smooth running of business. The ratio establishes relationship between cost of sales
and working capital.
Sales
Working Capital Turnover Ratio =
Net Working Capital

Table No 5.1.4 WORKING CAPITAL TURNOVER RATIO

Years Sales Net Working Capital Ratio

(Rs.) (Rs.) (In Times)
2017-2018 90176.44 645733.44 0.13

2018-2019 108277.62 666319.18 0.16

2019-2020 118189.37 898497.54 0.13

Chart No 5.1.4 WORKING CAPITAL TURNOVER RATIO

37
RATIO (IN TIMES)

0.2
0.15
0.1
0.05
0
2017-2018 2018-2019 2019-2020
YEARS

INFERENCES:

38
 A higher ratio is the indication of lower investment of working capital and more profit. In
2019-2020 , the sales of the company are low at 0.13 times but in the year 2020-2021 , it gone
upward of sales to 0.16 times.

39
CAPITAL TURNOVER RATIO

Managerial efficiency is also calculated by establishing the relationship between

cost of sales or sales with the amount of capital invested in the business.

Sales
Capital Turnover Ratio =
Capital Employed

Table No 5.1.5 CAPITAL TURNOVER RATIO

Years Net Sales Capital Employed Ratio

(Rs.) (Rs.) (In Times)
2017-2018 90176.44 536009.27 0.16

2018-2019 108277.62 533288.26 0.20

2019-2020 118189.37 720052.92 0.17

Chart No 5.1.5 CAPITAL TURNOVER RATIO

40
 0.25

RATIO (IN TIMES)

0.2
0.15
0.1
0.05
0
2017-2018 2018-2019 2019-2020

YEARS

41
INFERENCES:
In the year 2017-2018, the sales‟ comparing to 2018-2019 it is increased to 0.20 times
and it shows that efficient methods are adopted to use the capital employed. In 2019-2020, which
compares to the year 2017-2018 it indicates higher ratio of 0.17 times. The capital of the
company has utilized efficiently comparing to 2017-2018.

42
FIXED ASSET TURNOVER RATIO

This ratio determines efficiency of utilization of fixed assets and profitability of a

business concern.
Sales
Fixed Asset Turnover Ratio =
Net Fixed asset

Table No 5.1.6 FIXED ASSET TURNOVER RATIO

Years Sales Fixed Asset Ratio

(Rs.) (Rs.) (In Times)

2017-2018 90176.44 17264.30 5.22

2018-2019 108277.62 20241.05 5.35

2019-2020 118189.37 23237.80 5.09

43
 Chart No 5.1.6 FIXED ASSET TURNOVER RATIO

5.4
5.35
RATIO (IN TIMES)

5.3
5.25
5.2
5.15
5.1
5.05
5
4.95
2017-2018 2018-2019 2019-2020
YEARS

INFERENCES:

44
 Higher the ratio is more than the efficiency in utilization of Fixed Assets. Lower ratio
indicates the under utilization of fixed assets. From the above table it indicates in the year 2018-
2019, the sales have been increased comparing to the next year 2019-2020. And it‟s gradually
declining over the next year 2019-2020 for 5.09 times.

45
SOLVENCY OR FINANCIAL RATIOS:

CURRENT RATIO
In order to measure the short-term liquidity or solvency of a concern, comparison of
current assets and current liabilities is inevitable. Current ratio indicates the ability of a concern
to meet its current obligations as and when they are due for payment.

Current asset
Current Ratio =
Current liabilities

Table No 5.1.7 CURRENT RATIO

Years Current Asset Current Liabilities Ratio
(Rs.) (Rs.) (In Times)
2017-2018 56187.53 53034.57 1.06
2018-2019 68876.04 50360.94 1.36
2019-2020 166489.36 55084.13 3.02

46
 Chart No 5.1.7 CURRENT RATIO

3.5
3
RATIO (IN TIMES)

2.5
2
1.5
1
0.5
0
2017-2018 2018-2019 2019-2020
YEARS

INFERENCES:

47
 A high current ratio is an assurance that the firm will have adequate funds to pays
current liabilities and other payment. During the year 2019-2020, the current ratio is 3.02 times
and it is more when compared with previous year 2018-2019 is 1.36 times.

48
DEBT EQUITY RATIO
The debt equity ratio is determined to ascertain the soundness of the long term
financial policies of the company and also to measures the relatives‟ proposition of outsider‟s
funds and shareholdersfunds investments in the company.

Total Long-term debt

Debt Equity Ratio =
Shareholders Funds

Table No 5.1.8 DEBT EQUITY RATIO

Years Long term debts Shareholders funds Ratio

(Rs.) (Rs.) (In Times)

2017-2018 431716.93 104292.34 4.13

2018-2019 418021.26 115267 3.62
2019-2020 588417.27 131635.65 4.47

Chart No 5.1.8 DEBT EQUITY RATIO

49
 5
4
RATIO (IN TIMES)

3
2
1
0
2017-2018 2018-2019 2019-2020
YEARS

INFERENCES:

50
 From the above table, during the year 2017-2018 the debt equity ratio is 4.13 times and it is
decreased to 3.62 times then it shows the uptrend from the year 2019-2020 as 4.47 times.
Suggest that the debt from the company has increased over the years with increase in shareholder
funds as well.

51
DEBT TO TOTAL FUNDS RATIO

This ratio gives same indication as the debt equity ratio as this is a variation of debt
equity ratio. This ratio is also known as solvency ratio. This ratio is the relationship between long
term debts and total long term funds.

Long Term Debts

Debt to Total Funds Ratio =
Total Funds

Table No 5.1.9 DEBT TO TOTAL FUNDS RATIO

Years Long Term Debts Total Funds Ratio

(Rs.) (Rs.) (In Times)
2017-2018 431716.93 712389.16 0.60
2018-2019 418021.26 742843.84 0.56
2019-2020 588417.27 981013.79 0.59

Chart No 5.1.9 DEBT TO TOTAL FUNDS RATIO

52
 0.61
RATIO (IN TIMES)

0.6
0.59
0.58
0.57
0.56
0.55
0.54
2017-2018 2018-2019 2019-2020
YEARS

INFERENCES:

53
 During the year 2017-2018, the debt to total funds ratio is 0.60 times and it was
decreased. And in 2019-2020 again it had an increase in the company‟ssales comparing to
previous year 2018-2019 is 0.56 times to 0.59 times in 2019-2020.

54
EQUITY TO TOTAL FUNDS

Equity to total funds explains the relationship between equity and total funds.

Equity
Equity to Total Funds =
Total Funds

Table No 5.1.10 EQUITY TO TOTAL FUNDS

Years Equity Total Funds Ratio

(In Rs.) (In Rs.) (In Times)
2017-2018 104292.34 712389.16 0.14

2018-2019 115267.00 742843.84 0.15

2019-2020 131635.65 981013.79 0.13

Chart No 5.1.10 EQUITY TO TOTAL FUNDS

55
 0.155
RATIO (IN TIMES)

0.15
0.145
0.14
0.135
0.13
0.125
0.12
2017-2018 2018-2019 2019-2020
YEARS

INFERENCES:

56
 In the year 2017-2018, the total funds was Rs.712389.16 (in lakhs) and it shows
upward trend of Rs.981013.79 (in lakhs) and during the year 2019-2020 comparing to the year
2018-2019 is Rs.742843.84 (in lakhs).

57
 CHAPTER 3

COMPANY PROFILE

COMPLETE NAME OF THE COMPANY–

The Housing Development Finance Corporation Limited (HDFC Bank Ltd.)

BUSINESSOBJECTIVE
The primary objective of HDFC is to enhance residential housing stock in the country through the
provision of housing finance in a systematic and professional manner, and to promote home
ownership. Another objective is to increase the flow of resources to the housing sector by integrating
the housing finance sector with the overall domestic financial markets.

ORGANISATIONAL GOALS

HDFC's main goals are to

(a) Develop close relationships with individual households

(b) Maintain its position as the premier housing finance institution in the country

(c) Transform ideas into viable and creative solutions

58
SWOT ANALYSIS OF HDFC BANK
Strengths: -
1. Right strategy for the right products.
2. Superior customer service vs. competitors.
3. Great Brand Image.
4. Products have required accreditation.
5. High degree of customer satisfaction.
6. Good place to work
7. Lower response time with efficient and effective service.
8. Dedicated workforce aiming at making a long-term career in the field.
Weakness: –
1. Some gaps in range for certain sectors.
2. Customer service staff needs training.
3. Processes and systems, etc
4. Management cover insufficient.
5. Sectoral growth is constrained by low unemployment levels and competition for staff
Opportunities: –
1. Profit margins will be good.
2. Could extend to overseas broadly.
3. New specialist applications.
4. Could seek better customer deals.
5. Fast-track career development opportunities on an industry-wide basis.
6. An applied research center to create opportunities for developing techniques to provide added-
value services.
Threats: -
1. Legislation could impact.
2. Great risk involveVery high competition prevailing in the industry.

59
 CHAPTER 4
RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

• To know the customer satisfaction level and their perception regarding HDFC Bank

• To know the customer awareness regarding the Bank’s products.

• To know the level of interest of customer regarding the different schemes of bank.

• To know the preference of customer regarding the extra services.

• To know the problems of customer regarding bank

RESEARCH METHODOLOGY

DEFINATION

"Research comprises, defining an redefining, formulating hypothesis or suggested solutions, collecting,

organizing, evaluating data, making deductions and reaching conclusions and at last carefully testing
the conclusions to determine whether they fit the formulating hypothesis"

"CUFFORD WOODY"

RESEARCH PROBLEM

Here, the research is undertaken to know the level of customer satisfaction. Since the customer is the
King so his needs must be given the first priority. That's why customer satisfaction has been chosen as
a research problem.

RESEARCH DESIGNS

Personal interview technique was used to conduct the survey. The usual approach was to identify the
potential respondent and his cooperation in answering the list of predetermined questions. Regarding
the customer survey, I personally sit with our dealing assistant in the bank to look after the whole
working procedure of the deposit accounts / collected relevant information regarding the queries and
problems of customers of bank.
60
Personal interview technique also provided information such as customer knowledge, intentions about
the various deposits and demographic characteristics such as attitude, opinion and lifestyle of the
people.

SOURCES OF DATA

 PRIMARY DATA
 SECONDARY DATA

Primary Data – All the collection of primary data was done in the personal presence to ensure the
completeness of the process.

QUESTIONNIARE METHOD:

The communication method ,in effect ,is the method of designing questionnaire with a view to collect the
requisite information. The questionnaires can be classified into main four types.

1. structured non –distinguished

2. structured –distinguished
3. Non –structured-Non distinguished
4. Non –Structured –distinguished
A structured questionnaire is a formal list of questions framed so as to get the facts. The in reviewer asks the
questions strictly in accordance with a pre arranged order. This classification is based on whether the object or
purpose of the survey is revealed to the respondent .Most Marketing Research studies use this type of
questionnaire, in the case of a structured

-distinguished Questionniare, the researcher does not disclose the object of the survey. He may not be objective
in giving the necessary information and, as such its purpose may be defeat. He is therefore very particular not to
divulge the purpose of the investigation

A non-structured questionnaire is one in which the questions are not structured and the order in which they are
to be asked from the respondent is left entirely to the researcher. He asks

The questions in the manner in which he deems fit in a particular situation .In fact; he may only have certain
main points on which he may develop the question at the time of actual interview. As it will be seen, a non-
61
structured questionnaire id devoid of rigidity and allows considerable freedom to the researcher in choosing the
order as well as the specific contents of questions .Normally, unstructured questionnaires are used in
explanatory research when some respondents are contacted. It is only subsequently, on the basis of answers
received; that a well structured questionnaire is hand only after the explanatory research. Questionniare of this
type can be split into two types. when the purpose of the enquiry is disclosed to the respondent, the
questionnaire are known as non-structured and non- distinguished while in other cases, the questionnaire are
classified as non-structured and disguised questionnaires.

Types of Questions

An important aspect in the designing of a questionnaire is to decide which type of questions is to be used.
Questions can be classified in various ways. One way of classification is as follows.

 Open-ended question.
 Dichotomous Question.
 Multiple-Choice Questions.
Secondary Data – The secondary source of information was obtained from the annual reports of the
banks, their website, manual of instructions on deposits accounts and brouchers as well.

 Sources of secondary data

Secondary data can be obtained internally, i.e within the firm. Or externally. i.e from one or more outside
agencies.

 Internal source of secondary data

Internal source can be classified under four broad categories- accounting records. Sales force reports,
miscellaneous report and internal experts.

External source of secondary Data:

The external secondary data do not originate in the firm and are obtained from outside sources. Secondary data
can be collected from the originating sources or from secondary sources.Generally the originating source of
secondary data should be preferred on account of several reasons. First the originating source is more likely to
explain the object and procedure of data collection.

Government Publications

Non-Government Publication
62
Syndicated Services

Consumer Research services

TOOL OF ANALYSIS

Pie charts, Graphs and Percentage tools were used to analyze the collected data

SAMPLING

Sampling Unit- The population in question was the customers of the bank having their account in this
bank.

Sampling Size-

The survey was conducted in the town of Machhiwara with 100 customers as respondent.

SAMPLING PROCEDURE

Convenience sampling was done for the questionnaire to be filled within the bank as it was affected by
time availability of customers. It was difficult to use a statistical procedure for sampling.

RESEARCH VARIABLES

1. Rate of interest
2. Fees and other charges
3. Behavior of staff
4. Amount of deposit
5. Existing relationship
6. Procedural aspect.

63
 DATA ANALYSIS AND INTERPRETATION
Figure 3.1

Q.No.1:- service received from the customer service representative?

Source :- Primary data

INTERPRETATION

From the data it can be concluded that the HDFC customers are more satisfied to the service provided
by the bank

64
Figure 3.2

Q.No.2:- Service received from Supervisors & Management?

Sou
rce:- Primary data

INTERPRETATION
It is clear from the above chart that HDFC customers are satisfied but some percent is also dissatisfied
with the management because they said the staff should a friendly relation with any type of customer.

65
Figure 3.3

Q.No.3:- Do you agree that minimum account limit is not high and easy to maintain?

Source: Primary Data

INTERPRETATION
From the above data it can be concluded that most of the customers are satisfied with the account limit
but some percent of customers are dissatisfied with the account limit that means they said its difficult
to maintain as AQB charges are very high.

Figure 3.4

Q.No.4:- How satisfied were you with the following aspects of the branch facility?

66
Source: Primary Data

INTERPRETATION
From the above data given in a chart we can easily say that majority of the customers of the HDFC
bank are satisfied with the facility provided by the branh.they should maintain the same pace of service
constantly to attract more and more customers.

figure 3.5

Q. No.5:- Do you receive statements monthly?

Source:
Primary Data

67
INTERPRETATION
Most of the Customers of HDFC bank said that they are receiving monthly statement from the bank
and the rest of the customers said that they don’t need of the monthly statement.

Figure 3.6

Q.No:-6 In terms of your expectation regarding mailed statements?

Source: Primary Data

INTERPRETATION

68
From the above data it could be easily said that majority of the HDFC customers seeks the benefit of
mail service.

figure 3.7

Q.No.7:- Are you using other facilities provided by the bank, like internet banking, Phone banking etc.

Source: Primary Data

INTERPRETATION
From the above chart we can predict easily that HDFC customers are using other perks provided by the
bank
69
figure 3.8

Q.No 8:- Have you applied for credit card?

Source:
Primary Data

INTERPRETATION
From the above chart we can clearly say that majority of the HDFC Bank customers seeks the benift of
credit card and many more are likely to apply for that it is because of no surcharges and other benefits
as compare with the other bank’s credit card.

70
Figure 3.9

Q.No 9:- Service you received from the lending officer(s), how satisfied were you with following?

Source:
Primary Data

INTERPRETATION
Majority of the HDFC Bank customers are satisfied with the relation of the lending officer. According
of the satisfied customers they said that lending officer is always keen to listen the grievance and
complaint of the customers and try to solve it within a specified time.

Figure 3.10
71
Q.No.10 Do you feel the procedure to open an account with the bank was difficult?

Source:
Primary Data

INTERPRETATION
From the above data it is clearly seen that majority of the HDFC Bank customers are dissatisfied with
the procedure of opening of an account it is because it took a lot of time to open an account and the
customers has to wait more than a specified time

72
SUGGESTIONS AND RECOMMENDATIONS

 More stress should give on the advertisement and promotional activities.

 The Bank should make some efforts to improving good relationship with customer.

 The bank makes its procedures less time consuming.

 Contract Sales Executive (CSE) should be trained to explain the product features and its
value added services to make customer’s product selection convenient.

 The bank should make effort to aware the customers about their all the extra services.
 Contract Sales Executive (CSE) should recommend right product to the right customer so
as to ensure a high degree of satisfaction among the customer.

 The bank needs to make people aware about their products and the basic benefits they
can derive out of it. And also the differential features of its savings account as compared
to other banks.70% of the people did not even know about the concept, benefits and
features of its saving accounts.

 The bank should also target small business unit for whom maintenance of the AQB is not
a problem as this segment is not much penetrated.

 Though the bank offers free doorstep banking once a day this fact is also not known to
many customers or they still do not trust this service whatever the reason the bank can
popularize this service to gain an edge over nationalized banks and Co-operative Banks.

 The bank should enhance their services according to the needs of the customer.

73
 FINDINGS OF THE STUDY
 Majority of the customer are satisfied with the bank.
 Majority of the customers are aware of services and extra services offered by HDFC
Bank. But not all the services.
 The majority of the customers found services of the bank are average.
 Majority of the respondents are found the bank is average in maintaining the
good customer relationship.
 Majority of the respondent said that they are facing the problem of timeliness
and rest are facing problem of customer relationship and infrastructure.
 The perception of the majority of the customer regarding the bank is good because
majority of the customers are satisfied with the bank and they also recommend the
products of the bank.
 The most preferable extra service is ATM’s and the less preferable services are
bills payment, net banking and phone banking.
 The majority of customers are more interested in FD’s, mutual funds and
saving a/cs.
 The majority of the customers are satisfied with the dealing of the officials up
to some extent.
 Main factor that attract customers towards bank is the services of the bank.
 Services that are most used by the customer are saving a/c, FD’s, current a/c
and loans.

74
LIMITATIONS OF THE STUDY

It is said, “Nothing is perfect” and if the quite is true, I am sure that there would be few
shortcoming in this project also. Sincere efforts have been made to eliminate discrepancies as far as
possible but few would have reminded due to limitations of the study. These are:

 The research was carried out in a short period.

 Limited sample size.
 The information given by the respondent might be biased some of them might
not be interested to given correct information.
 Some of the respondents of the survey were unwilling to share information.

75
CONCLUSION

At the end I would like to conclude that The Indian banking market is growing at
a n astonishing rate, with Assets expected to reach US$1 trillion by 2010. HDFC bank had
a network of 1,142 branches And 3,295 automated teller machines in 528 cities in India. The majority
of customers are satisfied. But the bank should target on the rest of the customers who are not
satisfied. The customers are aware about the bank’s services but the Bank should try to
create more awareness among people. HDFC Bank should lay more stress on advertisement, both in
print as well as in other media for this purpose. Number of formalities should reduce, as customer feels
irritated with lots of formalities and it will save the time of customer and Bank also.

76
BIBLIOGRAPHY
 Financial Accounting By Jain &Narang
 Research Methodology by C.R.Kothari
 Annual Reports of Punjab State Cooperative Bank
NEWSPAPPERS & MAGAZINES:-

 The Economic Times

 The Hindustan Times
 Times Of India
 Indian Today
 www.google.com
 www.pbcooperatives.gov.in
 www.hdfcbank.com
 www.hdfcbank/product/finance

77
INCOME STATEMENT OF THE HDFC BANK IN THE YEAR 2019 TO 2020

Particulars 2019 2020 Amount Increase / Percentage

(Rs.) (Rs.) Decrease during Increase / Decrease
2019-2020 (Rs.) During
2019-2020 (In %)

Income from Operation 108277.62 118189.37 +9911.75 +9.15

Less: Financial Expense 64544.09 63379.55 (1164.54) (1.80)

Gross Profit (A) 43733.53 54809.82 +11076.29 +25.33

Other Income:
Profit on Sale of Shares - 2538.90 - -
Other Income 3199.28 4142.57 +943.29 +29.48

Total (B) 3199.28 6681.47 +3482.19 +108.84

Total Income 46932.81 61491.29 14558.48 +134.17

(A+B) = C

Expense:
Operating Expense:

Administration Expense 7160.91 6042.27 (1118.64) (15.62)

Establishment Expense 9407.97 10011.23 +603.26 +6.41
Provision 4616.80 8608.59 +3991.79 +86.46
Depreciation 3776.10 4481.57 +705.47 +18.68

Total Operating
Expense (D) 24961.78 29143.66 +4181.88 +16.75

Operating Profit 21971.03 32347.63 +10376.6 +47.23

(C-D)

Non-Operating Expense:

Taxation 6897.89 9672.77 +2774.88 +40.23

Total Non-Operating
Expense (F) 6897.89 9672.77 +2774.88 +40.23

Net Profit (E-F) 15073.14 22674.86 +7601.72 +50.43

78
INFERENCES:

The comparative income statement shows income from operation amount increase during
the year 2019-2020 was Rs.9911.75 and increase in percentage of 9.15.

For the year 2019-2020, the total income indicates Rs.14558.48 and percentage increase
during the year 2019-2020 was 134.17.

The operating profit has been increased is Rs.32347.63 in the year 2017 which is
comparing to the previous year was Rs.21971.03 and the percentage shows increase by 47.23.

The Net profit amount increases during 2019-2020 is Rs. 7601.72 and shows percentage
increase by 50.43.

79
BALANCE SHEET OF HDFC BANK FOR THE YEAR 2019 TO 2020

Amount Increase / Percentage

2010 2020 Decrease during Increase /
Particulars
(Rs.) (Rs.) 2019-2020 Decrease during
(Rs.) 2019-2020 (In %)
Assets:

Current Assets 68876.04 166489.36 +97613.32 +141.72

Loans & Advance 653955.77 799363.96 +145408.19 +21.98
Deferred Tax Asset 5691.36 6124.40 +433.04 +7.61
Investment 51188.87 53744.80 +2555.93 +4.99
Fixed Asset 20241.05 23237.80 +2996.75 +14.80

Total Asset 799953.09 1048960.32 +249007.23 +31.13

Liabilities and
Capital:

Current Liability 58478.77 67946.53 +9467.76 +16.19

Unsecured Loan 208479.20 260960.87 +52481.67 +25.17
Secured Loan 417728.12 588417.27 +170689.15 +40.86

Total Liabilities 684686.09 917324.67 +232638.58 +33.98

(A)

Capital and
Reserve:

Share Capital 5555.19 5555.19 - -

Reserve & Stock
Options 109711.81 126080.46 +16368.65 +14.92

Total
Shareholders 115267.00 131635.65 16368.65 +14.20
Funds (B)

Total Liabilities 799953.09 1048960.32 249007.23 +31.13

and Capital (A+B) ========== ========== ============= =============

INFERENCES:

80
 In the year 2019-2020, the investment it shows the uptrend for the year 2017 as Rs.53744.80
and it has increased by 4.99%.

Fixed assets has been increased was Rs.23237.80 in the year 2017 which is comparing to the
previous year and the percentage shows increase by 14.80.

During the year 2016, the shareholders fund amount to Rs.115267.00 it has been increased to
the amount of Rs. 131635.65 and percentage increased was 14.20.

Secured loans shows uptrend by Rs.588417.27 over the previous year of Rs.417728.12 and
increase in percentage of 33.98.

81
 COMMON INCOME STATEMENT OF HDFC BANK BANK
FOR THE YEAR 2019 TO 2020
2019 2020
Particulars
Amount Percentage Amount Percentage
(Rs.) (%) (Rs.) (%)

Income from Operation 90176.44 100 108277.62 100

Less: Financial Expense 49699.52 55.1 64544.09 59.6

Gross Profit (A) 40476.92 44.88 43733.53 40.39

Other Income:
- - - -
Profit on Sale of Shares
3199.28 3199.28 2.95
Other Income 3.54

Total (B) 3199.28 3.54 3199.28 2.95

Total Income 43676.20 48.43 46932.81 43.34

(A+B) = C

Expense:
Operating Expense:
6.61
Administration Expense 7198.81 7.98 7160.91
8.68
Establishment Expense 8821.90 9.78 9407.97 4.26
Provision 3308.02 3.66 4616.80 3.48
Depreciation 3012.19 3.34 3776.10

Total Operating 22340.92 24.77 24961.78 23.05

Expense (D)

Operating Profit
(C-D) = E 21335.28 23.65 21971.03 20.29

Non-Operating Expense:

Taxation 9035.47 10.01 6897.89 6.37

Total Non-Operating
Expense (F) 9035.47 10.01 6897.89 6.37

Net Profit (E-F) 12299.81 13.63 15073.14 13.92

82
83
INFERENCES:

The operating profit of the HDFC BANK has been increased during the year 2018-2019,
the operating profit shows Rs.21335.28 in 2014 and Rs.21971.03 in the financial year 2016.

For the year 2015, the establishment expense shows Rs.8821.90 and it has been
increased to Rs.9408.97 during the year 2016.

In 2015, provision is 3.66% and it indicates increase during the year 2016 was 4.26%.

The operating expenses incurred to the HDFC BANK Motors during the financial year
2015 which shows Rs.22340.92 and it has risen to Rs.24961.78 during the financial year 2016.

The net profit percentage recorded as 13.63 in 2015 where as in the year 2016 the
companies profit went upward with the percentage of 13.92.

84
CASH FLOW STATEMENT OF HDFC BANK FOR THE YEAR

Particulars 2019-2020
(In Rs.)
(A)CASH FLOW FROM OPERATING ACTIVITIES
Net Profit
226,74.86
Add: Lease Equalization Account
(91.85)
Provision for Taxation (Including Wealth Tax)
96,72.77
Add: Financial Expenses 322,55.78
Depreciation 633,79.55 956,35.33
45,80.23
Provision against Investments
1,44.64
Provision against Non - Performing assets
4,79.98
General Provisions on Standard Assets
31,61.69
Employee Stock Option Compensation Expenses
23.28
(Profit) loss on sale of assets
34.21
(Profit) loss on sale of Investments
(53,36.95)
Interest / Dividend Income
(22,00.38)
Effect of Foreign Exchange rates on Cash and Cash Equivalents,
0.18
net
OPERATING PROFIT BEFORE WORKING CAPITAL
CHANGES 965,22.21
Increase in Net Stock on hire 67,08.38
Decrease in Leased assets - net of sales (60,87.57)
Increase in Trade Bills purchased 15,44.60
Decrease in Net Investment in Lease (32.25)
Decrease in Loans and Advances (1465,04.17)
Increase in Other Receivables 13.29
Decrease in Bank Deposits (net) (1079,89.81)
Decrease in SLR Investments - net of sales (22,40.77)
Increase in Current Liabilities 32,87.01
Cash generated from Operations
Financial Expenses (619,43.37)
Direct Taxes Paid (709,48.53)
(90,05.16)
NET CASH FROM OPERATING ACTIVITIES (A) (2257,27.61)
B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (15,38.40)
Sale of Fixed Assets 96.09
Purchase of Investments (12677,85.28)
Purchase of Investments in Subsidiaries/Joint Venture (18,33.50)
Sale of Investments 12746,00.34
Interest Received 2.75
Dividend Received 21,97.65
NET CASH FROM INVESTING ACTIVITIES (B) 57,39.65

85
C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Debentures 3475,75.18
Debentures Redeemed (2686,00.00)
Increase (Decrease) in Long Term Borrowings 869,13.98
Increase (Decrease) in Fixed Deposits 154,84.84
Increase (Decrease) in Short Term Loans and Advances 417,96.83
Dividend paid (including Corporate Dividend Tax) (53,51.34)
NET CASH FROM FINANCING ACTIVITIES (C) 2178,19.49

D) Effect of Foreign Exchange rates on Cash and Cash

Equivalents, net (D) (0.18)

NET INCREASE IN CASH AND CASH EQUIVALENTS

(A)+(B)+(C)+(D) (21,68.65)

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE YEAR 48,39.35

CASH AND CASH EQUIVALENTS AT THE END OF THE

YEAR 26,70.70

COMPONENTS OF CASH AND CASH EQUIVALENTS

AT THE END OF THE YEAR

Current Account with Banks 13,50.13

Cash, Stamps and Stamp Papers on Hand 13,20.57
26,70.70

86
 PROFIT & LOSS ACCOUNT:

Definition: Net profit represents the excess of gross profit plus other revenue incomes over
sales expense including sales costs and other expenses. The debit side of P&L a/c shows the
expenses and the credit side the incomes. If the total of the credit side is more, it will be net
profit. And if the debit side happens to be more, it would be net loss.

Interpretation : The operating and non operating expenses and income are incresing
gradually from the year 2004-2008

P&L Mar '19 Mar '20

Operating income 11,046.30 9,449.50
Expenses
Material consumed 8,508.50 7,033.50
Manufacturing
273.80 219.40 Analysation : This
expenses
trend shows that company,s
Personnel expenses 196.00 177.90 productivity is
increasing Selling expenses 369.90 666.20 yearly to extend its
market Adminstrative operations.
150.20 112.90
expenses
Expenses capitalised -22.40 -12.80
Cost of sales 9,476.00 8,197.10
Operating profit 1,570.30 1,252.40
Other recurring
218.90 198.90
income
Adjusted PBDIT 1,789.20 1,451.30
Financial expenses 36.00 44.90
Depreciation 456.80 494.90
Other write offs 16.30 72.40
Adjusted PBT 1,280.10 839.10
Tax charges 446.50 227.70
Adjusted PAT 833.60 611.40
Non recurring items -31.40 -151.90
Other non cash
51.40 82.60
adjustme
Reported net profit 853.60 542.10
Earnigs before
3,611.00 2,878.00
appropriation
Equity dividend 57.80 43.30
Preference dividend - -
87
Dividend tax 8.20 5.60
Retained earnings 3,545.00 2,829.10
88