PROJECT WE

LIKE
AMEY DESHPANDE
SUBMITTED ON 27.09.2014

WE TUBE

FINANCIAL
FRAMEWORK FOR
BUSINESS DECISION

LEARNINGS :

The term financial statements refer to the statements which the accountants
prepare at the end of time for a business enterprise. They are :
1.Balance Sheet
2.Income Statement i.e. Profit & Loss A/c
3.Cash Statement

Financial statements are the collection of financial results based on current facts
and figures.

Financial statements have great importance for financial planning and control.

IMPORTANCE OF FINANCIAL
STATEMENT
Requirements of lenders
Guides future course of action
To understand the future
To exercise control
Better awareness about the present
positions
Acts as base for future actions.

USE OF FINANCIAL STATEMENT

It helps to reveal changes in the various items

in the balance sheet from past to present.
Financial statements help to measure the
profitability.
Financial statements provide a concise
summary of the firms revenues and expenses
during a date or series of date.
The financial statements report the effect of
the plan of operations on the assets , liabilities
and capital of the company.

BASICS OF MICRO
FINANCE

LEARNINGS:

Micro finance is supply of loans and other basic

financial services to the poor.
It involves small amounts of money.
It is different from the services provided by formal
banks.
Following are the microfinance institutions in
India :
1. SKS Microfinance
2. Spanadana Sporty Pvt. Ltd.
3. Arman Financial services
4. Grameen Koota etc.

EFFECTS OF MICRO FINANCE

Higher Income
Creation of jobs
Healthy competition
Entrepreneurship
Helps to cope with economic shocks
Builds financially self sufficient institutions.
Helps in empowering women
Helps poor children in getting better
education.

BENEFITS OF MICRO FINANCE TO INVESTOR

Low Default rates (as low as 3%)

High standardization
High granularity
High diversification
Low Pre- payment risk

CHALLENGES IN MICRO FINANCE

Internal control system

Supervision
Staffing constraints
MIS
Geographical Dispersion

MONEY MARKET

LEARNINGS :

Definition:One of the sections of a financial market where

securities and financial instruments with short-term maturities
are traded is called the money market. Financial assets like
treasury bills, certificates of deposits, commercial paper and
bankers' acceptance are some of the short-term debt securities
traded in the money market.
Description:The instruments traded in the money market
have a short-term maturity period ranging from 30 days to a
year. Hence this market is the best source to invest in liquid
assets.
The only demerit accompanying the money market is the
disorganization. Unlike organized markets, e.g. capital markets,
the money market is unregulated and informal. In addition, this
market gives lesser returns to the investor. However, the
money market is regarded as safe.

MONEY MARKET SECURITIES

T- Bills : Treasury Bills are short term money market

instruments issued by the Central Government in the form of
Discount instruments . Currently RBI issues T-Bills for tenors
of 91 days, 182 days and 364 days .
Repo : Repurchase agreement (Repo) is an agreement
involving the sale of securities by one party to another with a
promise to repurchase the securities at a specified price and
date in future. Repos have very short terms maturity (for e.g.
from 1 to 14 days ).
Commercial Paper : It is an unsecured short term promissory
note issued by a company to raise to raise short -term cash,
often to finance working capital requirements. Companies with
strong credit ratings can borrow money at lower interest rates
by using commercial paper

MONEY MARKET SECURITIES

CD: A negotiable certificate of deposits (CD) is bank issued

time deposit that specifies an interest rate and maturity date
and is negotiable (i.e. saleable) in secondary market. Whoever
holds the CD when it matures receives the principal and the
interest.
Bank Acceptances : A bankers acceptance is a time draft
payable to a seller of goods, with payment guaranteed by
bank. Time drafts issued by bank are orders for the bank to
pay a specified amount of money to the bearer of the time
draft on given date.
CALL MONEY MARKET : It is a short-termmoney market,
which allows for large financial institutions, such as banks,
mutualfundsand corporations to borrow and lendmoneyat
interbank rates.

SUMMARY

Money market comprises of Short Term Debt

Instruments.
Money market is Highly liquid market.
Risk of default is low.
Duration of securities in money market is a
year or less than a year.
T-Bill, REPO, CP, CD, BANK ACCEPTANCE, CALL
MONEY MARKET are the securities traded in
money market.

INTRODUCTION TO
CAPITAL MARKET

LEARNINGS

Definition:Capital market is a market where buyers and sellers

engage in trade of financial securities like bonds, stocks, etc. The
buying/selling is undertaken by participants such as individuals
and institutions.
Description:Capital markets help channelize surplus funds from
savers to institutions which then invest them into productive use.
Generally, this market trades mostly in long-term securities.
Capital market consists of primary markets and secondary
markets. Primary markets deal with trade of new issues of stocks
and other securities, whereas secondary market deals with the
exchange of existing or previously-issued securities.
Capital market deals with instruments like Shares , Preference
shares, Debentures and Bonds

PRIMARY MARKET

Theprimary marketis the part of the capitalmarketthat

deals with issuing of new securities. Companies,
governments or public sector institutions can obtain funds
through the sale of a new stock or bond issues
throughprimary market.
IPO : Money raised through Initial Public Offering (IPO) is
ownership money. It need not be returned to shareholders
unless company closes down. The company offering IPO
could be a new, young company or an old company which
decides to be listed on an exchange and hence goes public.
The company which offers its shares, known as an 'issuer',
does so with the help of investment banks. After IPO, the
company's shares are traded in an Secondary market.
FPO : Follow on public offer is a process by which a
company, which is already listed on an exchange, issues
new shares to the investors or the existing shareholders.

SECONDARY MARKET

This is the market wherein the trading of securities is done.

Secondary market consists of both equity as well as debt
markets.
Stock markets like BSE, NSE are examples of secondary
market.
BSE established in 1875 is one of the oldest and largest stock
exchange of Asia. 6500 companies are listed on BSE.
NSE established in 1992. 2500 companies are listed on NSE.
All the stock exchanges in India are governed by SEBI
(Securities and Exchange Board of India).
Following are some Global stock Markets :
1. U.S.- Downjones and NASDAQ
2.London FTSE
3.Germany DAX
4. Singapore Strait Times and SGX nifty

STOCK MARKET AS BAROMETER OF ECONOMY

Companies listed in stock market give quarterly

result.
If earning are high then it Means sales are rising.
Further it means demand, consumption is rising.
It further reflects that economy is expanding
If earnings are low then it means that sales are
declining.
Further it means that demand and consumption
is falling.
It reflects economy is contracting

WINNING STRATEGIES
FROM THE
MAHABHARATA

LEARNINGS:

Mahabharata is one of the two major Sanskrit epics

of ancient India.
It is the longest epic poem in the word. It has about
1.8 million words.
Kauravas used 11 Akshouhini and Pandavas used 7
Akshouhini in the war of Mahabharata.
One Akshouhini includes 21870 Chariots, 21870
Elephants, 65610 Horses, 109350 foot soldiers.
The war lasted 18 days and Pandavas won the war.
Kauravas army was way to bigger from Pandavas
still Pandavas won the war just because of winning
strategies applied by them.

WINNING STRATEGIES

Turn your weaknesses into strengths : Pandavas turned there

weaknesses into strengths before the war. For e.g. Yudhisthira learned to
play dice game, Arjuna acquired Divyastras, Bhima met Hanuman and got
blessing of enhanced strength.
Make powerful allies : Pandavas Had no wealth no power of their own.
But they had powerful allies all over the India. Pandavas got allies like
Panchala, Dwarka, Magadh,Chedi, Rakshasas through there marriages with
daughters of kings of this Kingdoms.
Share your responsibility : Pandavas distributed leadership of 7
Akshahouni to 7 different commanders. Whereas Kauravas Had only one
commander to entire army.
Teamwork scores over individual effort : Army of Kauravas fought
there individual battle and not for the team. Whereas Pandavas had only
one aim to win the war and they fought as a team.
Commitment scores over competence : Pandavas were very much
committed to win the war. Abhimanyu and Ghatotkacha risked there life
for the interest of there team. On the other hand people such as Bhishma,
Dronacharya, Karna from Kauravas team had emotional attachment with
pandvas and they were not 100% commited.

WINNING STRATEGIES

Know your enemy : Pandavas were aware about

the weaknesses of their enemy. They prepared their
strategy to exploit the weaknesses of their enemy.
Know ground realities : Pandavas spent greater
part of their life in poverty. Childhood in Himalayan
foothills among rishis, one year exile among the poor
people of Kuru-Panchala. 12 years of Vanvas and 1
year Agyatvas. So they knew ground realities,
different ideologies through their experience.
Empower women : Pandvas followed matriarchal
structure. Their mother played very important role in
building strategy of the war.

WE LOUNGE

Mr. Abhijeet
Pandit
Group C.E.O.
AUTOHANGAR

LEARNINGS :
Mr.

Abhijeet Pandit is thorough veteran in

the Automobile Industry having spent 21
years in it.
He has an extensive international
experience
He worked in Production unit as well as in
retail unit of automobile industry.
He is a former GM of INFINITI Business Unit
based in Dubai responsible for
GCC,LEVANT AND CIS Markets.

INTERVIEW SUMMARY :

In this interview he talked about his journey from college

graduate to C.E.O. Of Autohangar.
He completed his MBA from S. P. Jain. After that he got
selected in Tata Motors through campus selection.
In TATA he spent three years in manufacturing and production
department. Then he applied for fast track selection and got
selected to work as executive for export department. His job
in export was primarily to establish partners and setting up
dealership in European countries. He spent next 5 years in
export department.
Then through one of his colleague he got opportunity to work
for INFINITI Business unit Of Nissan in Middle East countries.
He was totally satisfied working with TATA still he took this
opportunity to come out of his comfort zone. Working in the
middle east was tough and he accepted it as challenge. He
spent 2years working in Oman and 15 years in Dubai.

INTERVIEW SUMMARY

After spending 17years in Middle East Countries he got the

opportunity to work for Autohangar. Auto HangarMumbai is
the official Mercedes-Benz Dealers in Mumbai, Maharashtra. Till
now he was working for manufacturing department, so working
for Retail company was challenge for him. So he decided to
take this opportunity. Another Reason why he accepted this
opportunity was the job location. After spending so many years
out of the country he wanted to settle down in his own country.
In Autohangar he got promotion as C.E.O.
He said that if a person wants to get top level post then he
must have Knowledge of the industry, knowledge of the
product. But the most important thing is people management
skill.

Mr. Abraham
Chacko Executive
director Federal Bank

LEARNINGS :

Mr. Abraham Chacko is working more than 30

years in banking industry.
He is a post graduate business trainee from
XLRI.
Started as Management Trainee in HSBC in
India.
Credited with leading the computerization of
HSBCs operations in India.
Opened the first ATM in the eastern part of
the country.
His current focus in Federal Bank is on
Corporate Banking, Debt Markets, Treasury

INTERVIEW SUMMARY

In this Interview Mr. Chacko talked about various things like

how he got in to MBA, his experience of banking in various
countries, Challenges faced by him while leading the
computerization of HSBCs operations in India etc.
He says in 1975 there were no awareness about MBA among
the Middleclass Indian parents. He came to know about the
course through a cousin who joined IIM for doing MBA. He
considered it as good career opportunity and joined XLRI.
In 1977 he completed his MBA from XLRI. At that time Banking
jobs were less in numbers. He got job in HSBC, through
campus recruitment. He started his career in HSBC as trainee.
In his career he worked in various countries like Dubai, Sri
Lanka, Singapore etc.

INTERVIEW SUMMARY

He says working in Dubai was challenge for him because in

1992 it was not that much developed as it is now. Most of the
people were running businesses which are not registered. So
financing them was a huge risk.
He also shares his experience of opening an ATM in eastern
part of the country. He says when they installed ATM in Kolkata
they received notice from Shop and establishment department
stating that there is banking transaction going on at Sunday
which were not allowed under the shop and establishment act.
Mr. Chacko went to meet the head of the shop and
establishment department and explained him that it was
happening just because of the ATM machine and no manual
transaction is taking place in bank. But they did not listened to
him. So he has taken this case to court and HSBC won the case.

INTERVIEW SUMMARY

According to Mr. Chacko following are the changes that

took place in banking over the years :
Computerization : When he started his career banking
was manual and now each and every bank is computerized.
Size and numbers of the bank : When he started
working for bank there were some nationalized banks and
very few foreign banks . After 1991 numbers of foreign
banks increased .Even the size of banking sector grew
enormously.
Specialization in banking : When he started to work for
bank, banking was limited to deposits and credit. But now
days banking have departments like corporate banking,
SME, debt market etc.

Mr. Makarand
Khatavkar MD & HR Head
Deutche Bank India

LEARNINGS :

Mr. Makarand handles overall responsibility for

managing the Human Resources function for Corporate
Banking, Investment Banking, Retail Banking, Private
wealth management, Asset management and global
Market center in India.
Prior to joining Deutsche Bank, He worked as an
executive Director of JM Morgan Stanley. He also
worked for DSP Merrill Lynch in India as Sr. Vice
President And Head of HR
He graduated from TISS with master degree in HR. He
has completed certificate In appreciative inquiry From
Case Western Reserve University , Cleveland , Ohio.

INTERVIEW SUMMARY

In this Interview Mr. Makarand talks about his professional

qualification, what Change means to him, what is according to him
is employee engagement and internal coaching culture concept.
Mr. Makarand graduated from TISS in the year 1985.After that he
worked in JM Morgan Stanley and DSP Merrill Lynch in India. From
past 10 years he is working with Deutsche Bank.
When asked what change means to him he said that change
means continuous progress. Further he said that if a person can
handle change can become successful in his life. He also said that
change teaches lots of things to us and it is the order of the day.
When asked about what initiative he has taken in Deutche Bank for
employee engagement he proudly said that he introduced a web
portal for employees called My DB. This portal is similar to
Facebook. A user can post comment and personalize his webpage.

INTERVIEW SUMMARY

He also said that after doing a lot research they came out with 4
levers of employee engagement i.e. P(Participate) G(Growth) I
(inspire) R (recognize) . Around this 4 levers they have started
initiatives like meet the CEO to inspire people. They have also
started quiz competition, cricket and football match to make
employee participate.
According to him only 30 to 40 % employees are fully engaged. To
make everyone engaged organization have to take initiative.
When asked about internal coaching culture he said that Internal
coaching is a science as well as art. It creates positive environment
in organization.
When asked about what mile stone he would like to achieve in next
3 to 5 years he replied that he would like to continue his education.
He also said that he would like to address complex leadership
challenges.

NEWSWIRE

1. NOW, PAY TO USE EVEN HOME BANK ATMS

It is an article about new ATM charges that will be

applicable from 1st of November.RBI said that banks
are free to charge their customers beyond five
transaction a month.
Till now customer used to pay 20 for every
transaction at non home bank ATM per month
including financial transactions and non financial
transactions. Non Financial transaction includes
balance enquiry, mini statement etc.
In this circular RBI reduced the free transaction limit
from other Bank ATMs to three transaction per
month. However RBI also motioned that if Banks
wish to offer five free transaction from other bank

NOW, PAY TO USE EVEN HOME BANK

ATMS

Some of the Banks, in association with the National

Payments Corporation of India, had earlier sent a
proposal to the banking regulator to reduce the
number of free transactions at non-home ATMs. They
had also sought to be allowed to charge consumers
for use of own-bank ATMs
However after this circular by RBI the decision of
whether to charge their customers for using own
bank ATM is to be taken by respective Banks.

2. RBI NOT KEEN ON RAISING INTERBANK ATM USAGE FEE

It is an Article about why RBI is not keen on raising

Inter- Bank ATM Usage fees. Currently Inter Bank ATM
usage fee is Rs. 15 and Banks are demanding to change
this fees to Rs. 16.50.
1st three transactions at Non Bank ATMs in a month are
free. After that bank can decide how much fee is to be
passed on to customer. However Banks can not charge
more than Rs. 20.
In last month RBI permitted banks to charge customers
for using their home bank ATM for more than 5 a month.
Still private sector banks are lobbying for rise in ATM
usage fees as they are normally the acquirer bank.

RBI NOT KEEN ON RAISING INTER-BANK ATM

USAGE FEE

RBI is not keen to increase ATM usage fees because

If more banks decide to pass on the increased cost
to consumers, it can hurt the consumers.
It will also increase customers visit to the branch
which in turn will lead to more cost to the banks.
The demand for a increase in interchange fee begun
after banks came under pressure to beef up security
at ATMs, after the brutal attack on a woman in a
Bangalore ATM last year.

3. IS INTEREST ON RECURRING DEPOSITS OR RDS TAXABLE IN INDIA?

This article clears general misconception that if anyone invests in RD,

the interest earned is Tax free.
This article says, Interest on all of the fixed deposits an recurring
deposits in India is taxable and the only place where interest is not
taxable are the tax free bonds and interest earned from the Public
Provident Fund (PPF) in India.
This article says that recurring deposits in India are taxable. What
this means is that the interest rates from these deposits would have
to be added to the total income and tax computed accordingly.
According to this article Recurring deposits is great systematic way to
invest for future need.
If you are in a very high tax bracket of 20 and 30 per cent, then
recurring deposits would pose a serious tax liability challenge. So this
article suggests to invest in RD if you do not come under high tax
bracket.

4. BANKS TO OPEN LAKHS OF ACCOUNTS TODAY AS JAN

DHAN SCHEME KICKS IN

This is the article about PradhanMantri Jandhan Yojana

recently launched by prime minister of India.
As a part of Jandhan Yojana every account-holder will be
provided with a passbook and a RuPay debit/ATM card
which carries free accident insurance cover for Rs. 1 lakh.
Further, an overdraft of Rs. 2,000 will be provided to each
account-holder after satisfactory operation of the account
for six months.
Individual banks have drawn up plans to implement this
scheme. For e.g. IDBI plans to open 2 lakh accounts and
Andhra Bank Planned to open 2.75 Lakh accounts under
this scheme.

BANKS TO OPEN LAKHS OF ACCOUNTS

TODAY AS JAN DHAN SCHEME KICKS IN

This article also states that according to a circular issued by

the Reserve Bank of India to banks, the know-your-customer
(KYC) norms were relaxed to facilitate easy opening of
accounts.
A small basic account now could be open on the basis of
self-attested photograph with a signature/thumb impression
of the customer in the presence of an official of the bank.
There is also no requirement of submitting two separate
documents for address proof unlike earlier.
This scheme was introduced because the progress of
financial inclusion is not uniform across the country.
Information gathered from bankers show that rate of
financial inclusion in southern states is much more than
northern states.

5. CLOSING HOME LOANS? 6 THINGS YOU SHOULD KNOW OR DO BEFORE THAT

1.

2.

3.

This article informs us 6 thing we should know or do

before closing a home loan. They are as follows :
Make sure the original documents are in your
hand : At the time of loan disbursement all the original
documents such as title deed, contract, indemnity and
guarantors letter are to be submitted with the bank.
Once you have closed your home loan bank can not hold
your papers. So remember to take all the original
documents back.
Final figure may be slightly more than you
anticipated : The bank will charge slightly higher
amount on account of final settlement interest cheque
which will take some days to clear.
Take a closure certificate : the bank will give a
closure certificate or no objection certificate which

CLOSING HOME LOANS? 6 THINGS YOU SHOULD KNOW OR DO BEFORE

THAT

4.

5.

6.

Security cheques : At the time of sanctioning

the loan bank requires 2 or 3 security cheques.
Once the loan is clear remember to take security
cheques back.
Final settlement calculation : Always sit with
the officer at the time of final settlement
calculation just to check whether there are any
unwanted charges. Always remember there are no
pre-payment charges for home loan.
Seek Advice : Always seek advice before you
close your home loan from C.A. or Tax consultant.

6. LINGUANEXT TO PARTNER BANKS FOR ATM TRANSACTION

SLIPS

Technology firm LinguaNext is in discussions with

nationalized and private banks for deploying its solutions
at ATMs (automated teller machines), which will help
users get transaction details in local languages.
Jagadish Sahasrabudhe CEO of Pune based company
Lingua Next said that they are in active discussion with
various banks and they expect some of this discussions
will materialize before the year end.
Using this software by LinguaNext ATMs will be able to
offer transaction slips in local languages to the customers.
Currently, ATMs generate receipts in English, though there
is an option of doing transactions in Hindi.

LINGUANEXT TO PARTNER BANKS

FOR ATM TRANSACTION SLIPS

Linguanext is also working with Yepme and Quikr to

offer mobile apps in Hindi and other regional
language.
Linguanext has developed Linguify Mobile Platform
which transforms mobile apps in various Indian
languages, with no application performance loss, and
without changing or accessing the underlying source
code.
Krishna Iyer Quikr.com AVP said that using the
platform has helped the company offer an app that
allows users to choose between English and Hindi as
medium for communication.

7. 5 SMART THINGS TO KNOW ABOUT REAL ESTATE

INVESTMENT TRUSTS (REITS)

According to this article following are the 5 smart things to

know about Real Estate Investment Trusts :
1. REIT is a special investment company that invests money
obtained from investors directly in real estate, either through
properties or via mortgages.
2. Investors receive the income from rent obtained from
underlying properties as well as capital gains when properties
are sold.
3. REITs ensure transparency as investors know what is being
bought, including the property's current value. They also
have a realistic income expectation from their investment.
4. REITs offer accessibility to invest in real estate for those who
find it difficult to purchase real estate as an investment
option.
5. Sebi has introduced draft regulations for REITs and they will
be allowed to function once these regulations are passed.

8. HDFC BANK OPENS BRANCH IN DUBAI

HDFC

Bank Ltd has opened its branch in Dubai at the International

Financial Centre, and will provide wealth management services to nonresident Indians based in the UAE.
After Bahrain and Hong Kong this is HDFCs 3 rd branch overseas. It also
operates two more representative offices in UAE at Dubai and Abu
Dhabi.
The new branch will offer advisory services to NRIs on treasury products,
trade finance, loans amongst other related services. The banks Bahrain
and Hong Kong branches offer corporate, trade finance, loans and
deposits to both corporate and ultra high net worth individuals.
Abhay Aima, Group Head - Equities, Private Banking, Third Party
Products, NRI and International Consumer Business, HDFC Bank, said
that HDFC will continue to expand their off shore operations to meet
banking requirements of their customers.
As of June 30, the bank had a network of 3,488 branches and 11,426
ATMs in 2,231 cities and towns.

9. FIVE WRONG REASONS TO BUY LIFE

INSURANCE

1.

2.

3.

This article deals with five wrong reason to buy life insurance. They are as
follows :
You want to oblige the seller : The first thing a life insurance agent is
taught is to go out and sell policies to his friends, relatives and associates.
It puts the individual in a difficult situation, forcing him to make a decision
he doesn't really want to. Buy Insurance only if you need it.
You want to save tax : Dont buy Life insurance to save tax. There are
better, more lucrative investment avenues that can get you tax deduction
under Section 80C.
It combines insurance with investment : Agents like to say that

endowment or money-back insurance policies offer the twin benefits

of insurance and investment. In reality, they fall between the two
stools. As an investment, an endowment policy gives very low
returns, yielding barely 5-6 per cent returns. Even very long-term
plans of 20-25 years offer around 7 per cent.

FIVE WRONG REASONS TO BUY LIFE INSURANCE

4.

5.

You are looking for guaranteed returns : Many buyers are looking
for the guaranteed returns promised by life insurance companies.
However, this guarantee comes at a high price, forcing the company to
invest in safe, debt-based options. There are other instruments that give
guaranteed returns and offer better yields than a traditional insurance
policy. The PPF, for instance, offers assured 8.7 per cent returns with
tax-free corpus. If you exhaust the annual investment limit of Rs 1.5
lakh, you can invest in the Voluntary Provident Fund which has no limit.
No medical check-up is required : If the cover is below Rs 5 lakh, the
buyer is not put through a medical test but is asked to submit a
declaration about his health condition. But if the person dies due to
health condition company can claim that customer kept some facts
hidden from insurance company. If a company does not conduct

medical tests before the policy is purchased, it won't accept a

claim easily as well

10. SBH UNVEILS SALARY ACCOUNTS CAMPAIGN

State Bank of Hyderabad has launched SBH Smart Salary

campaign which will be in force till 31 st October 2014.
In this Campaign SBH is offering accounts with zero
balance, overdraft up to three months net salary to
salaried persons.
It also offers them multi option deposits for automatically
investing surplus funds over threshold limit of Rs. 10,000
to earn higher rate of Interest.
In this scheme they have also offered additional benefits
to the customers such as personal accident cover of Rs. 2
lakh of SBI General insurance, first year premium free and
0.25 % reduction in processing fees on personal loans.

THANK YOU