A

[SUMMER TRAINING REPORT]

ON

WORKING CAPITAL MANAGEMENT

IN ICICI

SUBMITTED TO:
SUBMITTED TO THE SHRI GURU RAM RAI UNIVERSITY IN
PARTIAL FULLFILLMENT OF THE REQUIREMENTS FOR
THE AWARD OF THE DEGREE OF
BACHELOR OF BUSINESS ADMINISTRATION (B.B.A)

Submitted by:
TUSHAR CHAUHAN
EN.NO.: R1704250100

UNDER THE GUIDANCE OF

MS. DIVYA VERMA
ASST. PROFESSOR

BATCH – 2017-2020

FACULTY OF MANAGEMENT AND BUSINESS STUDIES

SHRI GURU RAM RAI UNIVERSITY, DEHRADUN

1
Faculty of Management and Business Studies
Shri Guru Ram Rai University
Dehradun

CANDIDATE’S DECLARATION

I, TUSHAR CHAUHAN hereby declare that the Summer Training Report, entitled

“WORKING CAPITAL MANAGEMENT”, submitted to the Shri Guru Ram Rai

University, Dehradun in partial fulfillment of the requirements for the award of the Degree
of Master of Business Administration is a record of original training undergone by me under
the supervision and guidance of MS. DIVYA VERMA, Faculty of Management and Business
Studies, Shri Guru Ram Rai University, and it has not formed the basis for the award of any
Degree/Fellowship or other similar title to any candidate of any University/Institution.

Date: Signature of the Student

This is to certify that the statement made by the candidate is true to the best of my knowledge
and belief.

Signature of Guide
Date: Guide Name with Designation

Countersigned

Dean

2
 ACKNOWLEDGEMENT

Preparing a project of this nature is an arduous task and I was fortunate enough to get support
from a large number of persons to whom I shall always remain grateful.

I take this opportunity to thank all the respondents for giving their precious time and relevant
information and experience, I require without which this project would have been a different
story.

In addition, I am thankful to MS. DIVYA VERMA Faculty BBA Deptt. & all the faculty of the
institute for their full-hearted co-operation & guidance. This project study is the result of their
right direction, motivation and support.

I would like to express my special gratitude to my Parents and my friends, who are always a
source of inspiration for me.

TUSHAR CHAUHAN
BBA – VTH SEM.
SGRR UNIVERSITY,
DEHRADUN

3
 DECLARATION

I hereby declare that this project work entitled “WORKING CAPITAL MANAGEMENT IN
ICICI” is my work , carried out under the guidance of my faculty guide MS. DIVYA VERMA.
This report neither full nor in part has ever been submitted for award of any other degree of
either this university or any other university.

TUSHAR CHAUHAN
BBA – VTH SEM.
SGRR UNIVERSITY,
DEHRADUN

4
 PREFACE

As an integral part of the curriculum I, student of BBA, need to get exposed to the
Working Capital of Management to get a better understanding of Finance by way of undergoing
practical training.

I consider myself fortunate enough that I had an opportunity to join ICICI Group,
Dehradun and undergo training at the same, for gaining substantial knowledge of “Working
Capital Management."

A progressive and forward-looking organization strives for the improvement of the

system and procedure so as to improve the organizational effectiveness. ICICI is one of the
pioneers in the Finance Sector in India.

Finance is the major asset of any organization. ICICI has large number of Finance Sector
and the management of such a vast number requires a proper mix of conceptual skills to be
effective and meet the organizational goal.

In the present report, an attempt has been made to study the “WORKING CAPITAL
MANAGEMENT in ICICI Bank."

5
 CONTENTS

CHAPTER 1.
● Introduction
● Company profile
● Objective & Rationale of the study
● An overview of performance appraisal

CHAPTER 2.
● Literature Review
● Research Methodology
A)Research Design
B)Research Tools
C)Collection/Compilation of data

CHAPTER 3.
● Data Analysis and Interpretations

CHAPTER 4.
● Conclusion
● Limitations of the study
● Questionnaire
● Bibliography

6
 EXECUTIVE SUMMARY

Someone has rightly said that practical experience is far better and closer to the real world than
mere theoretical exposure. The practical experience helps the students to view the real business
world closely, which in turn widely influences their perceptions and arguments their
understanding of the real situation.
The phenomenon of creation is a long process requiring time, energy and dedications as well as
skill and experience of those people engaged in the task, ultimately in the outcome as the final
form of embodiment of the creator’s vision. Research work constitutes the backbone of any
management education program. A management student has to do research work quite frequently
during his/her entire span.
As we know working capital is very important for any and every organization, so my research
work is done on WORKING CAPITAL of a private limited organization ICICI .
Working Capital is the life blood and controlling nerve of an organization. ICICI being a large
organization, dealing in bank sector and one of the leading company in banking sector requires a
large amount of funds. Hence there is a need for proper management of working capital, so that
day to day operations do not hamper; at the same time there would not be any idle investment in
working capital.

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 NEEDS AND OBJECTIVES OF WORKING CAPITAL

The need for working capital cannot be over emphasized every business needs some amount of
working capital. The need for working capital arises due to the time gap between production &
realization of cash from sales. There is an operating cycle involved in the sales and realization of
cash.
The working capital is needed for the following purposes.
1. For the purchase of raw materials, components & spares.
2. To pay wages and salaries.
3. To incur day-to-day expenses & overhead cast such as fuel, power and office expenses,
etc.
4. To meet the selling costs are packing, advertising etc.
5. To provide credit facilities to the customers.
6. To maintain the inventories of raw material, work-in-process, stores and spares and
finished stock.

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 ICICI BANK COMPANY LIMITED

ICICI GROUP

In 1955, The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated
at the initiative of the World Bank, the Government of India and representatives of Indian
industry, with the objective of creating a development financial institution for providing
medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami Mudaliar
elected as the first Chairman of ICICI Limited.

ICICI emerges as the major source of foreign currency loans to Indian industry. Besides funding
from the World Bank and other multi-lateral agencies, ICICI was also among the first Indian
companies to raise funds from international markets

OVERVIEW OF ICICI BANK

ICICI Bank is India's second-largest bank with total assets of Rs. 3,849.70 billion (US$ 82
billion) at September 30, 2008 and profit after tax Rs. 17.42 billion for the half year ended
September 30, 2008. The Bank has a network of about 1,400 branches and 4,530 ATMs in India
and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels and through its
specialised subsidiaries and affiliates in the areas of investment banking, life and non-life ,
venture capital and asset management. The Bank currently has subsidiaries in the United
Kingdom, Russia and Canada, branches in 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. Our UK
subsidiary has established branches in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock
Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE).

9
Effect of Financial Crisis
The major financial crisis of the 21st century involves esoteric instruments, unaware regulators,
and nervous investors.
Starting in the summer of 2007, the United States experienced a startling contraction in wealth,
triggered by the sub prime crisis, thereby leading to increase in risk spreads, and decrease in
credit market functioning. During boom years, mortgage brokers enticed by the lure of big
commissions, talked buyers with poor credit into accepting housing mortgages with little or no
down payment and without credit checks. Higher default levels, particularly among less credit-
worthy borrowers, magnified the impact of the crisis on the financial sector.
The same financial crisis, which started last summer, is back with a vengeance. Paul Krugman
describes the analogy between credit – lending between market players and the financial
markets, and motor oil to car engines. The ability to raise cash on short notice, i.e. liquidity, is an
essential lubricant for the markets and for the economy as a whole.
The drying liquidity has closed shops of a large number of credit markets. Interest rates have
been rising across the world, even rates at which banks lend to each other. The freezing up of the
financial markets will ultimately lead to a severe reduction in the rate of lending, followed by
slowed and drastically reduced business investments, leading to a recession, possibly a nasty one.
A collapse of trust between market players has decreased the willingness of lending institutions
to risk money. The major reason behind this lack of trust being the bursting of the housing
bubble, which caused a lot of AAA labeled investments to turn out to be junk.
The IMF has warned the global economy of a spiraled mortgage crisis, starting in the United
States, ultimately leading to the largest financial shock since the Great Depression.
Since 1864, American Banking has been split into commercial banks and investment banks. But
now that’s changing. Some of the biggest names on Wall Street, Bear Stearns, Lehman Brothers,
and Merrill Lynch, have disappeared into thin air overnight. Goldman Sachs and Morgan Stanley
are the only two giants left. Nervous investors have been sending markets plunging down. Even
Morgan Stanley, one of the last two big independent investment banks on Wall Street, is
struggling to survive at the exchange, though it insists that the company is still in solid shape.
Markets all over the world are confronted by all-time low figures in the past couple of years or
more, including those of Britain, Germany, and Asia.

10
In India, IT companies, with nearly half of their revenues coming from banking and financial
service segments, are close monitors of the financial crisis across the world. The IT giants which
had Lehman Brothers and Merrill Lynch as their clients are TCS, Wipro, Satyam, and Infosys
Technologies. HCL escaped the loss to a great extent because neither Lehman Brothers nor ML
was its client.
The government has a reason to worry because the ongoing financial crisis may have an adverse
impact on the banks. Lehman Brothers and Merrill Lynch had invested a substantial amount in
the stocks of Indian Banks, which in turn had invested the money in derivatives, leading to the
exposure of even the derivates market to these investment bankers.
The real estate sector is also affected due to the same factor. Lehman Brothers’ real estate partner
had given Rs. 7.40 crores to Unitech Ltd., for its mixed use development project in Santa Cruz.
Lehman had also signed a MoU with Peninsula Land Ltd, an Ashok Piramal real estate company,
to fund the latter’s project amounting to Rs. 576 crores. DLF Assets, which holds an investment
worth $200 million, is another major real estate organization whose valuations are affected by
the Lehman Brothers dissolution.
Britain has also witnessed the so called “bursting of the Brown bubble”, in the form of the
highest personal debt per capita in the G7 combined with an unsustainable rise in housing prices.
The longest period of expansion in the 21st century, which Britain claimed to be undergoing,
eventually revealed itself of being an illusion. The illusion of rising to prosperity has been
maintained by borrowing to spend, often in the form of equity withdrawal from increasing
expensive houses. The bubble ultimately burst, exposing Britain to the most serious financial
crisis since the 1920s. This brings a lot of misery for home owners who are set to see the cost of
mortgages soar following the deepening of the banking crisis and the Libor – the rate at which
banks lend to each other.
The impact of the crisis is more vividly observable in the emerging markets which are suffering
from one of their biggest sell-offs.
“Everyone has exposure to everything…either directly or indirectly”, JP Morgan analyst, Brian
Johnson Economies with disproportionate offshore borrowings (like that of Australia) are
adversely affected by the western financial crunch. Globalization has ensured that none of the
economies of the world stay insulated from the present financial crisis in the developed
economies.

11
Analysis of the impact of the crisis on India can be on the basis of the following 3 criteria:
1. Availability of global liquidity
2. Demand for India investment and cost thereof
3. Decreased consumer demand affecting Indian exports

The main source of Indian prosperity was Foreign Direct Investment (FDI). American and
European companies were bringing in truck-loads of dollars and Euros to get a piece of the pie of
Indian prosperity. Less inflow of foreign investment will result in the dilution of the element of
GDP driven growth.
Liquidity is a major driving force of the strong market performances we have seen in emerging
markets. Markets such as those of India are especially dependent on global liquidity and
international risk appetite. While interest rates in some countries are increasing, countries such as
Brazil are decreasing interest rates. In general, rising interest rates tend to have a negative impact
on global liquidity and subsequently equity prices as fund may move into bonds and other money
markets.
Indian companies which had access to foreign funds for financing their import and export will be
worst hit Foreign funds will be available at huge premiums and will be limited only to the blue-
chip companies, thus leading to:
1. Reduced capacity of expansion leading to supply – side pressure
2. Increased interest rates to affect corporate profitability
3. Increased demand for domestic liquidity will put interest rates under pressure

Consumer demand will face a slow-down in developed economies leading to a reduced demand
for Indian goods and services, thus affecting Indian exports
1. Export oriented units will be worst hit, thus impacting employment
2. Widening of the trade gap due to reduced exports, leading to pressure on the rupee
exchange rate

Impact on Financial Markets:

1. Equity market will continue to remain in bearish mood
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 2. Demand for domestic liquidity will push interest rates high and as a result will lead to
rupee depreciation and depleted currency reserves

“Every happy family is alike, but every unhappy family is unhappy in their own way.” – Leo
Tolstoy. While each financial crisis is undoubtedly distinct, there are also striking similarities
between them in growth patterns, debt accumulation, and in current account deficits.
Impact on ICICI bank
The move by Lehman Brothers Holdings, the fourth-largest investment bank to file for
bankruptcy in the US, will impact the country’s largest private bank ICICI Bank partly. The bank
will have to take a hit of $28 million on account of the additional provisioning that ICICI Bank’s
UK subsidiary will have to make. During this quarter, ICICI Bank pared its credit default swap
(CDS) exposures to overseas corporate from $650 million to $80 million. Some of the larger
state-owned banks are also likely to take small hits because of mark-to-market provisioning on
their overseas investments. ICICI Bank will also have to make additional provisioning on its
investments in corporate bonds and on CDS exposures of Indian corporates. However, officials
in the Mumbai-based bank said that the provisioning requirement for these investments is not
substantial.

For the first quarter of FY09, ICICI Bank had reported a net profit of Rs 728 crore. ICICI Bank’s
UK subsidiary had investments of euro 57 million (around $80 million) in senior bonds of
Lehman Brothers. It has already made a provision of close to $12 million against investment in
these bonds. Assuming a recovery of 50% of these investments, the additional provision required
would be about $28 million. The bank has already made a provision of $188 million in its
international books at the end of March 2007-08. According to a research report by broking
house Edelweiss, the UK subsidiary would have to book mark-to-market losses of $200 million.
The report said that the subsidiary had $600 million investments in mortgage-backed securities
and another $500 million investment in corporate bonds. However, bank officials said that it was
too early to comment on the mark-to-market on corporate bonds as things could change if the
Fed cuts rates. ICICI Bank and its subsidiaries had consolidated total assets of Rs 484,643 crore
as on June 30, while ICICI Bank UK had total assets of around $8.7 billion. At the end of the last
quarter, the bank had on its books CDS papers of overseas clients in the range of close to $650

13
million. Subsequently, the bank was able to pare this to $80 million. The bank also has close to
$1.5 billion of CDS of Indian papers. It is likely to take a small hit on these investments. Some of
the other Indian banks such as State Bank of India would also have to take a mark-to-market hit
on its investments. SBI officials said that it was too early to quantify the amount.
ICICI Bank Ltd., India's second- largest bank, reported $264 million of costs to write down the
value of overseas investments, the biggest loss disclosed by an Indian bank since the collapse of
the U.S. subprime-loan market.
The bank set aside $90 million through December and $70 million will be earmarked in fourth-
quarter earnings. The rest will be set off against the bank's net worth.
So far, 45 of the world's biggest banks and securities firms have written down or lost $181
billion related to investments tied to rising defaults on U.S. home loans or to people with poor
credit histories.
The company has the largest holdings of overseas investments among the nation's major banks
and has been expanding internationally to counter slowing demand for credit in India. The value
of the subprime-related investments in its $2 billion of overseas assets dropped because investors
are shunning all except the safest securities

14
 DATA ANALYSIS AND INTERPRETATION

FINANCIAL OF ICICI BANK

Performance Review – Quarter ended September 30, 2019
 Profit after tax of Rs. 1,014 crore; 39% increase over first quarter
 42% year-on-year increase in core operating profit
 12% year-on-year reduction in costs due to cost rationalization measures
 Capital adequacy of 14.01%
 CASA ratio increased to 30% from 25% a year ago
The Board of Directors of ICICI Bank Limited (NYSE: IBN) at its meeting held at Mumbai
today, approved the audited accounts of the Bank for the quarter ended September 30, 2017 (Q2-
2018).
Highlights
 The profit after tax for Q2-2019 was Rs. 1,014 crore (US$ 216 million) compared to the
profit after tax of Rs. 1,003 crore (US$ 214 million) for the quarter ended September 30,
16 (Q2-2017).
 The profit after tax for Q2-2012 represents an increase of 39% over the profit after tax of
Rs. 728 crore (US$ 155 million) in the quarter ended June 30, 2017 (Q1-2018).
 Core operating profit (operating profit excluding treasury) increased 42% to Rs. 2,437
crore (US$ 519 million) for Q2-2019 from Rs. 1,712 crore (US$ 365 million) for Q2-
2017.
 Net interest income increased 20% to Rs. 2,148 crore (US$ 457 million) for Q2-2018
from Rs. 1,786 crore (US$ 380 million) for Q2- 2018.
 Fee income increased 26% to Rs. 1,876 crore (US$ 399 million) for Q2-2012 from Rs.
1,486 crore (US$ 316 million) for Q2-2016.
 Operating expenses1 decreased 12% to Rs. 1,688 crore (US$ 359 million) for Q2-2019
from Rs. 1,926 crore (US$ 410 million) for Q2- 2016 due to the Bank’s focus on
efficiency improvement and cost rationalization. The cost/average asset ratio for Q2-2019
was 1.7% compared to 2.1% for Q2-2016, and the cost/income ratio for Q2- 2019 was
42.5% compared to 50.5% for Q2-2016.

15
OPERATING REVIEW
Deposit growth
The Bank has adopted a conscious strategy of focusing on current and savings account deposits
and reducing its wholesale term deposit base. Current and savings account deposits increased
16% to Rs. 66,914 crore (US$ 14.2 billion) at September 30, 2011 from Rs. 57,827 crore (US$
12.3 billion) at September 30, 2010. Current and savings account (CASA) deposits constituted
30% of total deposits at September 30, 2011 compared to 25% at September 30, 2010. Total
deposits declined marginally on a year-on-year basis due to the reduction in term deposits
pursuant to the strategy adopted by the Bank. The Bank has significantly expanded its branch
network to expand its reach and further enhance its deposit franchise. At October 22, 2011, the
Bank had 1,400 branches and 4,530 ATMs.

Credit growth
Consolidated advances of the Bank and its banking subsidiaries and ICICI Home Finance
Company increased 16% to Rs. 264,665 crore (US$ 56.4 billion) at September 30, 2011 from Rs.
227,583 crore (US$ 48.5 billion) at September 30, 2010.

International operations
ICICI Bank’s international business continued to focus on:
 Building a retail deposit base which gives the Bank access to low cost deposits on a
sustainable basis.
 Being the preferred financier and adviser for overseas expansion of Indian corporate and
strengthening the global syndication network.
 Being the preferred bank for non-resident Indians: The Bank’s remittance volumes
increased by 38.2% in Q2-2012 to about Rs. 11,946 crore (US$ 2.5 billion) compared to
Q2-2011.
ICICI Bank Canada’s profit after tax for the six months ended September 30, 2011 (H1-2012)
was CAD 22 million. ICICI Bank Canada’s capital position continued to be strong with a capital
adequacy ratio of 15.4% at September 30, 2011. ICICI Bank Canada’s deposit base increased by
over CAD 1.0 billion during the quarter to CAD 4.85 billion at September 30, 2011, of which
86% was term deposits.

16
ICICI Bank UK’s profit before mark to market impact and provision on investments was US$ 43
million for H1-2012. After the required provisioning charge in respect of its investment portfolio
(including the mark-to-market impact of credit spread widening during the period), ICICI Bank
UK reported a net loss of US$ 35 million. ICICI Bank UK’s capital position continued to be
strong with a capital adequacy ratio of 18.4% at September 30, 2011. ICICI Bank UK’s deposit
base was US$ 4.9 billion at September 30, 2011, of which 39% was term deposits. At September
30, 2011, ICICI Bank UK had zero net non-performing assets.
The Bank and its subsidiaries have entirely exited their non-India linked credit derivatives
portfolio at no incremental loss over and above the provisions already held.

Capital adequacy
The Bank’s capital adequacy at September 30, 2011 as per Reserve Bank of India’s revised
guidelines on Basel II norms was 14.01% and Tier-1 capital adequacy was 11.03%, well above
RBI’s requirement of total capital adequacy of 9.0% and Tier-1 capital adequacy of 6.0%.

17
 Table 4 (Rs in billion)
MAR 31, 2018 JUNE 30, 2018 SEP 30. 2018
TOTAL CAPITAL 13.97% 13.42% 14.01%
- TIER 1 11.76% 11.29% 11.03%
- TIER 2 2.20% 2.13% 2.98% *
* Pursuant to clarification received from RBI, Upper Tier II capital bonds of US$ 750 mn
issued in January 2017 are included in Tier-II capital.
Asset quality
At September 30, 2018, the Bank’s net non-performing asset ratio was 1.8% on an
unconsolidated basis. The consolidated net NPA ratio of the Bank and its subsidiaries was 1.6%.
The specific provisions for nonperforming assets (excluding the impact of farm loan waiver)
were Rs. 868 crore (US$ 185 million) in Q2-2018 compared to Rs. 878 crore (US$ 187 million)
in Q1-2018.
Table 5 (Rs in billion)
SEP 30,2018 MAR 31, 2019 SEP 30,2018 MAR 31, 2019
GROSS NPAs 66.89 83.50 92.82 102.71
Less: cumulative 36.53 47.86 51.80 59.72
w/offs and
provision
NET NPAs 30.36 35.64 41.02 42.99
NET NPA ratio 1.41% 1.49% 1.74% 1.83%

 Consolidated net NPA ratio of the Bank and its subsidiaries at 1.6%
 Gross retail NPLs of Rs. 69.57 bn and net retail NPLs of Rs. 26.77 bn at September 30,

2011

 Unsecured products constitute 57% of net retail NPLs

18
Performance highlights of subsidiaries

ICICI BANK Company (ICICI Life) increased its overall market share in retail new business

weighted received premiums from 12.7% in the year ended March 31, 2017 (FY2019) to 13.7%

during April- August 2011. New business weighted received premium increased by 22% in H1-

2018 to Rs. 2,650 crore (US$ 564 million). While ICICI Life’s results reduced the consolidated

profit after tax of ICICI Bank by Rs. 466 crore (US$ 99 million) in H1-2009, ICICI Life’s

unaudited New Business Profit (NBP)2 in H1-2009 was Rs. 522 crore (US$ 111 million). Assets

held increased to Rs. 30,107 crore (US$ 6.4 billion) at September 30, 2008.

ICICI Lombard General Company (ICICI General) increased its overall market share from

11.9% in FY2017 to 12.5% during April-August 2017. ICICI General’s premiums increased

12.2% on a year-on-year basis to Rs. 1,925 crore (US$ 410 million) in H1-2018.

Other subsidiaries (Rs in billion)

PROFIT AFTER TAX H-1 2017 H-1 2018

ICICI Securities Ltd. 0.37 0.24

ICICI Securities PD 0.99 0.21

ICICI Venture 0.27 1.39

ICICI AMC 0.53 0.44

ICICI Home Finance 0.29 0.39

19
SUMMARY PROFIT AND LOSS STATEMENT
Table 6 (Rs in crore)

20
SUMMARY BALANCE SHEET
Table 7 (Rs in crore)

Source: Company website

21
BALANCE SHEET FOR Q2 FY18-19
Assets
Table 8 (Rs in billion)

Source: Company website

22
LIABILITIES

Table 9 (Rs in billion)

Source: Company website

23
 COMPARISON

Items 2014- 2015-16 2016-17 2017-18 2018-19 Group All Banks'

15 Avg Average

No. of offices 419 515 569 716 1268 359 795

No. of employees 13609 18029 25384 33321 40686 7232 11573
Business per employee 1010.00 880.00 905.00 1027.00 1008.00 717.52 634.09
(in Rs. lakh)
Profit per employee (in 12.00 11.00 10.00 9.00 10.00 5.72 4.67
Rs. lakh)

Capital and reserves & 8360 12900 22556 24663 46820 3973 3994
surplus
Deposits 68109 99819 165083 230510 244431 29351 42026
Investments 43436 50487 71547 91258 111454 12096 14888
Advances 62648 91405 146163 195866 225616 22539 31355

Interest income 9002 9410 14306 21996 30788 3093 3919

Other income 3065 3416 4181 6928 8811 733 751
Interest expended 7015 6571 9597 16358 23484 2108 2633
Operating expenses 2571 3299 5001 6691 8154 881 977

Cost of Funds (CoF) 3.59 3.02 4.01 5.34 6.40 6.13 5.81
Return on advances 6.94 5.75 4.58 4.08 4.33 4.87 4.11
adjusted to CoF
Wages as % to total 5.70 7.47 7.41 7.01 6.57 10.34 13.96
expenses

Return on Assets 1.31 1.48 1.30 1.09 1.12 1.15 1.16

CRAR 10.36 11.78 13.35 11.69 13.97 14.30 13.00
Net NPA ratio 2.21 1.65 0.72 1.02 1.55 1.09 1.00

24
 COMPARISON AMONG VARIOUS BANKS ON VARIOUS PARAMETERS

I analysed the above banks on various parameters to find out how they are placed in terms of

business growth, efficiency and the comfort they provide in terms of their current financial

standing and business exposures.

The growth-related variables indicate the last 5-year CAGR banks achieved in advances and

deposits. It also carries a ranking of these banks in terms of their latest CASA ratio. Axis Bank

emerges as an out-performer in this category.

On efficiency-related parameters, the cost/income ratio, quality of advances and the extent of

loan loss-loss provision coverage have been reviewed, and banks have been accordingly ranked.

PNB leads the pack with high scores in each variable.

In the next segment, certain comfort-related yardsticks have been compared. Capital-raising by

banks to bolster future growth, real estate exposure and overseas dependence for the business

have been compared. Although PNB did not raise any fresh capital and ranks last on that metric,

it ranks as the best bank with lower real estate and foreign exposure, which is critical during a

global economic slowdown. Also, we analysed banks that generate the maximum core interest

income as a proportion of total income. ICICI Bank and Axis Bank have greater proportions of

their income coming from 'other income' and these segments might have greater tendency to

show slower growth in the current scenario. A detailed analysis of the above parameters is

presented in the ensuing paragraphs.

25
Growth metric - Loan growth comparison
The chart below shows that the last 5 years loan growth achieved by India's major banks. HDFC
Bank showed consistent growth over the last 3 years (even though it shows a slight falling trend
in the 5-year chart). Axis Bank achieved a high compounded annual growth during this period,
followed by ICICI Bank.
Table 10
Loan growth CAGR (from FY04 to FY08)
AXIS BOB BOI HDFC ICICI PNB SBI
BANK
59% 32% 25% 37% 38% 26% 27%

Growth metric - Deposit comparison

In terms of the deposit growth (CAGR) achieved by these banks during the last 5 years, Axis
Bank and ICICI Bank retain top two slots as seen in loan growth. ICICI Bank registered a
deposit growth of just 6% in FY08. This was in sharp contrast to the 40% growth the bank
achieved in the 4 years before FY08. PSU banks, on the other hand, grew at a much slower pace.

26
 Table 11
Deposits growth CAGR (from FY14 to FY19)
AXIS BANK BOB BOI HDFC ICICI PNB SBI
43% 20% 20% 35% 38% 17% 14%

Source: Antique research Graph 7

Loan book analysis - Unsecured loans and NPAs
Unsecured loans primarily include personal loans and credit card exposures, priority sector
lending in rural areas, education loans, credits to SMEs (small and medium entrepreneurs) up to
Rs 5 lakh, etc. Exposure of Indian banks towards unsecured loans rose consistently over the
years. As shown in the chart below, HDFC Bank has the highest, with around 30% of its total
loans exposed to such loans.

Source: Company website Graph 8

Though there is no direct correlation between loan losses and unsecured loan exposure, in an
economic slowdown scenario, such exposure will carry a greater stress, and hence, a higher

27
probability of default. Banks need to be extremely vigilant in terms of monitoring these loans
regularly, so that losses in the form of NPAs do not increase unreasonably and dent the quality of
the loan book.
However, a review of the gross NPA ratio, i.e., GNPA as a percentage of advances indicates that
HDFC Bank and other banks have ensured that the NPA increase is proportionate to that of the
loan growth. In fact, PSU banks have shown tremendous improvement in terms of loan quality,
as the GNPA ratio for these banks fell from average 8-9% levels to less than 3% levels in the last
5 years. Only ICICI Bank has shown deterioration of its loan quality as reflected in its increasing
GNPA ratio. The main reason for this increase is that the bank has substantial exposure to the
retail segment, including huge exposure to the real estate segment at almost 36% of total loans
that includes close to 30% exposure in the form of housing loans. The retail segment constitutes
close to 75% of ICICI Bank's NPAs.
Composition of loan book: Sept 30, 2008

Graph 9
Total loan book: Rs. 2,220 bn
Total retail loan book: Rs. 1,225 bn
Total retail disbursements (including ICICI Housing Finance Company): Rs. 170.00 bn in H1-
2009
1 Small ticket personal loans

28
Source: Antique research Graph 10

Efficiency comparison - Cost / Income ratios of banks

In terms of control over costs, the below table explains cost/income ratios of these banks over the
last 5 years. At the end of FY08, all banks have a similar cost/income ratio averaging between
48- 50%. However, Bank of India has substantially lower cost-to-income ratio of 42%.

Source: Antique research Graph 11

29
Source: Antique research

Source: Antique research Graph 12

A not-so-encouraging sign in terms of NPA management of Indian banks is the fact that the loan
loss coverage ratio for banks as a group has reduced over the last 2 years. From 60% levels, the
coverage ratio has fallen to around 55%.

Source: Antique research Graph 13

In terms of provision coverage for specific banks, Axis Bank has a low coverage ratio in the
private bank group at around 50%, and the SBI has a ratio of 42%, the lowest in PSU banks in
the comparison chart below.

30
Source: Antique research Graph 14

31
 Board of Directors

Chairman & Managing Director (CMD)

Director Director Director Chief

Engineering Human Finance Vigilance
And R&D Resource Officer

Executive Director
(Finance)

Cash Internal
Management Budgeting Audit Taxation

Financial Corporate Provident Fund Taxation

Services Books Trust

Direct Taxes Indirect

Taxes

Corporate Structure
at ICICI BANK

32
CONDENSED BALANCE SHEET
AS AT 30 JUNE 2019
(CURRENCY: INDIAN RUPEES THOUSAND)

ICICI BANK

SOURCES OF FUNDS 30-Jun-19 31-Mar-18

Shareholder’s funds 176521 176521
Share Capital 9,68,491 6,92,034
Reserves and surplus 1145012 8,68,555
APPLICATION OF FUNDS
Fixed assets 6,89,255 6,16,302
Gross block 3,49,985 3,21,737
Accumulated depreciation 3,39,269 2,94,302
Net block 28,018 40,209
Capital Work in progress 3,67,287 3,34,774
INVESTMENTS
Deferred tax asset 5,37,119 7,53,693
Current assets, loans and advances 93,437 80,732
Cash and bank balance 11,896 28,357
Sundry debtors 4,98,060 3,92,929
Loans and advances 5,46,808 5,80,836
Net current assets 10,56,764 10,02,122
Current liabilities and provision
Current liabilities 6,87,598 8,64,915
Provisions 2,21,997 4,37,851
9,09,595 13,02,766

33
 WORKING CAPITAL OF ICICI BANK

Working capital = net current asset- net current liabilities

Working capital of the year 208

Working Capital = 1056764-909595

=1, 47,169

Working Capital of the year 2007

Working Capital = 1002122-1302766

= 3, 00,644
Difference in working capital of both years

=300644-147169

=153475

As figure shows that working capital of 2008 is decreasing in comparison to 2011. It means
company getting loss in 2008 while it was in profit in previous year.

34
ICICI BANK

CONDENSED PROFIT AND LOSS ACCOUNT

(FOR THE THREE MONTH ENDED 30 JUNE 2019)

30-Jun-19 30-Jun-18

INCOME
MANAGEMENT FEES 11,36,090 9,06,360
DIVIDENDS 12,255 3,002
PROFIT ON SALE OF
INVESTMENT(NET) 8,701 17,842
MISCELLANIOUS INCOME 1,551 49
11,58,597 9,27,253

EXPENDITURE
EMPLOYEES COST 2,48,777 1,87,004
ADMINISTRATIVE AND OTHER
EXPENSES 4,68,555 3,05,083
DEPRICIATION 29,125 17,429
7,46,457 5,09,516

PROFIT BIFORE TAXATION 4,12,140 4,17,737

PROVISION FOR CURRENT
TAXATION 1,46,190 1,38,233
DIFERRED TAX CREDIT 12,706 522
FRINGE BENEFIT TAX 2,199 3,756
PROFIT AFTER TAXATION 2,76,457 2,76,270
ADD:ACCUMULATED PROFIT
BROUGHT FORWARD 2,95,006 30,809
BALANCE PROFIT CARRIED
FORWARD 5,71,463 3,07,079
EARNING PER SHARE OF FASE
VALUE OF RS. 10 EACH-
BASIC AND DUTIES 15.65 15.66

35
ICICI BANK
CONDENSED CASH FLOW MANAGEMENT
FOR THE THREE MONTH ENDED 30JUNE 2019
(CURRENCY: INDIAN RUPEES THOUSAND)

30-Jun-
30-Jun-19 18
Cash generated from/(used) in operating
activities(A) 96586 93150
Cash generated from/ (used) in investing
activities(B) 1,83,384 6,453

Cash generated from/(used) in financing

activities ( C) 1,03,260 1,11,925
Net increase in cash and cash equivalent
(A)+(B)+ ( C ) 16,462 12,332
Cash and cash equivalents at beginning of year
Cash and bank balances 28358 77,456
Book overdraft 28,358 60,779 16,677
Cash and cash equivalents at ending of period
Cash and bank balances 11896 4,355
Book overdraft 11,896 4,355

36
 PROFIT AND LOSS STATEMENT
OF ICICI BANK

( IN BILLION)

FY-2019 Q1-2018 Q1-2019 Q1-O-Q1

GROWTH
NII 73.04 14.79 20.90 41.3%
Non interest income 79.97 17.56 21.32 21.5%
-Fee Income 66.27 14.28 19.58 37.1%
-Other income 13.69 3.28 1.74 ( 46.9)%
Operating expenses 64.29 14.79 16.34 10.5%
DMA expenses 15.43 3.83 2.28 (40.3)%
Lease Depreciation 1.82 0.44 0.51 18.0%
Core operating profit 71.47 13.30 23.08 73.6%
-Treasury income 8.15 1.95 (5.94) ---
Operating profit 79.61 15.24 17.14 12.5%
Provisions 29.05 5.52 7.92 43.5%
Profit before tax 50.56 9.72 9.22 (5.2)%
Tax 8.98 1.97 1.94 (1.7)%
Profit after tax 41.58 7.75 7.28 (6.1)%

37
 BALANCE SHEET: ASSETS
( IN BILION)
Mar 31,2019 June 30,2018 June30,2019 Y-O-Y
Growth
Cash balance with
Banks and SLR 1,130.72 1,060.68 1,075.58 1.4%
-Cash bank
Balance 380.41 296.48 355.51 19.9%
-SLR investment 750.31 764.20 720.07 (5.8)%
Advances 2,256.16 1,982.77 2,241.46 13.0%
Other investment 364.23 330.81 356.98 8.8%
Fixed $ other asset 246.84 195.05 264 35.5%
Total assets 3,997.95 3,569.32 3,941.56 10.4%

BALANCESHEET : LIABILITIES
( IN BILLION)
Mar31,2018 June30,2017 June30,2018 Y-O-Y
Growth
Net worth 464.70 246.86 473.94 92.0%
-Equity capital 11.13 9.03 11.13 23.3%
-Reserve 453.58 237.83 462.81 94.6%
Preference 3.50 3.50 3.50 ---
Deposite 2,444.31 2,307.88 2,344.61 1.6%
Borrowing 863.99 702.81 938.23 33.5%
Other liabilities 221.45 308.26 181.28 (41.2)%
Total liabilities 3,997.95 3,569.32 3,941.56 10.4%

38
 IMPORTANCE OR ADVANTAGES OF ADEQUATE
WORKING CAPITAL

The main advantages of maintaining adequate amount of working capital are as follows:-
1. Solvency of the business
Adequate working capital helps in maintaining solvency of the business by providing
uninterrupted flow of production.

2. Goodwill
Sufficient working capital enables a business concern to make prompt payments and hence
helps in creating and maintaining goodwill
3. Easy loans
A concern having adequate working capital, high solvency and good credit standing can
arrange loans from bank and other financial institutions on easy and favorable terms.
4. Cash discounts
Adequate working capital also enables a concern to avail cash discounts on the purchases and
hence it reduces costs.
5. Regular supply of raw material
Sufficient working capital ensures regular supply of raw material and continuous production.
6. Ability to face crisis
Adequate working capital enables a concern to face business crisis in emergencies such as
depression because during such periods, generally, there is much pressure on working
capital.
7. Quick & 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 these may not
be much pressure to plough back profits.

39
 FACTORS AFFECTING WORKING CAPITAL

There is no set of universally applicable rules to ascertain working capital needs of a

business organization. Since, it varies from firm to firm, industry-to-industry and even in
the different seasons of the same firm. Therefore, a large number of factors influence the
requirement of working capital. They are discussed hereunder one by one.

1. NATURE AND SIZE OF BUSINESS

The requirements of working capital of a firm is widely related to the nature and size of
the business unit. For Example, trading and financial firms require a large amount of
Investment in working capital

2. LENGTH OF PRODUCTION CYCLE

The time taken to convert raw materials into finished products is known as the production
cycle. The level of working capital depends upon the production cycle. Longer the
production cycle more will be the need for working funds. Shorter the production cycle, the
requirements of working capital will also be less.
3.SEASONAL OPERATIONS
If a firm is operating in goods and services having seasonal fluctuations in demand, and then the
working capital requirement will also fluctuate with every change.
4.BUSINESS CYCLE FLUCTUATIONS
Different phases of business cycle, i.e., boom, recession, recovery etc. also affect the working
capital requirement.
5. MARKET COMPETITIVENESS
The market competitiveness has an important bearing on the working capital needs of a firm. In
view of the competitive conditions prevailing in the market, the firm may have to offer liberal
credit terms to the customers resulting in higher debtors.
6. CREDIT POLICY
The credit policy means the totality of terms and conditions on which goods are sold and
purchased. A firm has to interact with two types of credit policies at a time. One, the credit

40
policy of the suppliers of raw materials, goods etc., and two, the credit policy relating to credit
which it extends to its customers.
5.SUPPLY CONDITIONS
The time taken by suppliers of raw materials, goods etc., after placing an order, also determine
the working capital requirements.
WORKING CAPITAL CYCLE
In a manufacturing concern the working capital cycle starts with the realization of cash from the
sale of finished products. The speed with which the working capital completes one cycle
determines the requirement of working capital; longer the period of the cycle larger is the
requirement of working capital.

GROWTH AND DIVERSIFICATION OF BUSINESS

Growth and diversification of business call for large volume of working fund. The need for
increased working capital does not follow the growth of business operations but precedes it.
Working capital need is in fact assessed in advance in reference to the business plan.

BANKING RELATIONS
A good bank – customer relationship is a pre- requisite of a successful working capital
management policy.

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 some current asset.

OTHER FACTORS
Certain other factors such as operating efficiency, taxation policy, dividend policy, etc., also
influence the requirements of working capital.

41
 ANALYSIS OF WORKING CAPITAL

The analysis of working capital is aimed at ascertaining the current financial soundness of the
firm. The various tools of analysis are:

1. Funds-flow statement
2. Ratio-Analysis
3. Working Capital Budget.

OBJECTIVES OF WORKING CAPITAL MANAGEMENT

1. To optimize the investment in current assets and to reduce the level of current liabilities, so
that the company can reduce the locking up of funds in working capital employed in the
business.

2. The second important objective of working capital management is that the company should
always be in a position to meet its current obligations, which should properly be supported by
the current assets available with the firm. But maintaining excess funds in working capital
means locking of funds without return.

3. To manage the firm’s current assets in such a way that the marginal return on investment in
these assets is not less than the cost of capital employed to finance the current assets.

42
 METHODS OF ESTIMATING WORKING CAPITAL

It is not so easy to estimate the amount of working capital that may be required by a firm in order
to maintain a particular level of operation. Therefore, in order to avoid difficulties, a working
capital requirement forecast is to be prepared after scrutinizing and analyzing every aspect of
business activity. The main methods of estimation of working capital are as follows:

1. CASH FORECASTING METHOD

In this method an estimate is made of the possible cash receipt and cash payments in the
forthcoming period. The estimated cash receipts are added in the working capital available at the
beginning of the period and the estimated cash payments are deducted. This shows the deficiency
or surplus of cash at a definite point of time.

2. ADJUSTING PROFIT AND LOSS METHOD

Under this method the forecasted-profits are adjusted on cash basis. The estimation of working
capital requirement by this method can be easily understood.

43
COMPUTATION OF WORKING CAPITAL

NET INCOME

ADD: - 1. NON- CASH ITEMS ……………

2- CASH INFLOW ITEMS ……………

LESS: - CASH OUTFLOW ITEMS ……………

NET CHANGE IN WORKING CAPITAL ………..

3. ROJECTED BALANCE SHEET METHOD

Under this method of forecasting, a forecast is made of the various assets and liabilities of the
firm. Afterwards, the difference between the two is taken which will indicate either cash
surplus or cash deficiency.

3. FORECASTING OF CURRENT ASSETS AND CURRENT LIABILITIES

METHOD
this is the most popular method of estimating the working capital requirement. It has already
been stated that the working capital is the difference between current assets and current
liabilities. In order to estimate the requirement of working capital one has to forecast the
amount of current assets and current liabilities. Generally, we make the estimate on the basis
of past experience related to production process, credit policy and stock policy.

44
 OPERATING CYCLE CONCEPT OF WORKING CAPITAL

The new concept, which is gaining more and more importance in recent years, is the ‘operating
cycle concept’ of working capital. It can also be called working capital cycle. The operating
cycle refers to the average time elapses between the acquisition of raw materials and the final
cash realization. In other words, an operating cycle is the time- lag between purchases of raw
materials or others inventory items and their conversion into cash. In this way each cycle begins
with cash – outflow and after a time- lag (involving processing, credit sales, receivables etc.)
ends with a cash-inflow.

The shorter is the time-lag between the outflow and inflow of cash, the larger will be the number
of operating cycles and greater will be the volume of total business turnover with minimum of
investment of funds in current assets in an operating period.

In case of a manufacturing company, the operating cycle is the length of time necessary to
complete the following events:

1. Conversion of cash into raw materials;

2. Conversion of raw materials into work- in – process;
3. Conversion of work in- process into finished goods;
4. Conversion of finished goods into accounts receivable; and
5. Conversion of accounts receivables into cash.

45
The operating cycle of a manufacturing business can be shown as given in the following
charts

Accounts
Receivable

Cash Finished Goods

Raw Work- in- process

Material

Operating cycle of a manufacturing business

In the case of a “trading firm” the operating cycle will include the length of time taken for (1)
conversion of cash into debtors, and (2) conversion of debtors into cash. The net duration of
operating cycle is equal to the number of days involved in the different stages of operation
commencing from purchase of raw materials and ending up with collection of sale proceeds from
debtors against which the number of days credit allowed by suppliers are to be adjusted. The
number of operating cycle in a period is determined by dividing the number of days in the same
by the length of net operating cycle once the number of operating cycle has been determined, the
actual working capital requirement is then arrived at by dividing the total operating expenses for
the period by the number of operating cycle in that period.

46
 IMPORTANCE OF OPERATING CYCLE CONCEPT
The application of operating cycle concept is mainly useful to ascertain the requirement of cash
working capital to meet the operating expenses of a going concern. This concept is based on the
continuity of the flow of values in a business operation. This is an important concept because the
longer the operating cycle, the more working capital funds the firm needs. Management must
ensure that this cycle does not become too long. This concept more precisely measures the
working capital fund requirements traces its changes and determines the optimum level of
working capital requirements.

Working capital management is three dimensional in nature:

1. It concerned with the formulation. It of policies with regard to profitability, liquidity and risk.
2. It is concerned with the decisions about the composition and level of current assets.
3. It is concerned with the decisions about the composition and level of current liabilities.

Policies regarding to profitability,

liquidity & risk

Composition & level Composition & level of

of current asset current liabilities

47
 SOURCES OF WORKING CAPITAL

A firm can arrange working capital from the following two sources:
1. Long – Term Sources and
2. Short – Term Sources

1. Long – Term Sources

The sources of long–term financing can be broadly classified into the following two
categories :
(A) Owned Sources Owned sources include the following :
i. Issue of Shares :
Arrangement of working capital through issue of shares does not create a fixed
obligation on incomes of the business. Thus, it is preferable to arrange the permanent
working capital through issue of shares.
ii. Retained Earnings :
A firm can meet its working capital requirement by reinvesting the profits earned by it.
Reinvestment of the earned profit is a regular and cost less source of funds.
iii. Reserves ::
Like retained earnings, the use of reserves for financing the working capital requirement
is also a costless source of finance.

(B) Borrowed Sources :

It mainly includes the issue of debentures or long–term loans.

3. Short – Term Sources :

For financing the working capital requirements short–term sources can be classified into
the following two broad categories ::

48
 (A) Internal Sources :
It mainly includes depreciation provision, outstanding liabilities and provision for
taxation.
(B) External Sources :
Short–Term external sources of financing working capital includes the following :
o Trade Credit :

Usually manufacturing concerns, wholesalers and retailers avail this type of credit. Such
credit is extended by supplier of goods or raw–materials. This facility is given for a short
period which may extend for a few weeks or a few months, based on prevailing market
usage. No interest is charged by the supplier if payment is made by the customer before
the expiry of the credit period.
o Bank Credit :
Normally companies obtain short–term working capital from banks in the form of short–
term loans, cash credit, overdraft and through discounting the bills of exchange.

i. Short – Term loans from Financial Institutions ::

The requirement of working capital can also be satisfied by arranging short–term loans
from financial institutions.
ii. Public Deposits ::
Business firms sometimes succeed in mobilizing enough funds by way of short–term
deposits from public. By and large attraction of a higher rate of interest prompts the
public to put their savings as short–term deposits with business firms.
iii. Advance from customers ::
Advance from customers is also considered as a principle source of short–term working
capital finance.

49
 RESEARCH METHODOLOGY

Problem Formulation:
As working capital management is the backbone of an organization so this
study is being conducted to assess the various liquidity ratios and for the safety of
organization. Since working capital management studies the current assets and
current liabilities which will affect the performance of the ICICI BANK in future.
Hence, in order to make an accurate forecast of working capital management
certain ratios are calculated which forms the part of working capital management
in ICICI BANK

Objectives of the study:

1. To understand the meaning of Working Capital.
2. To study the income statement of ICICI BANK

Analysis Design
The analysis design used in the project is:

 Annual Balance Sheet

 Annual profit and loss a/c
 Annual cash flow statement

METHODOLOGY

For the purpose of the study the relevant data has been entitled from the published
annual reports and manuals of the unit under reference that is ICICI BANK The
analysis of data has been supported by discussion with the managers of the

50
enterprise. The data has been intensively examined with the help of different
accounting and statistical technique.

There are two main sources of data collected which are:-

1. Primary Data
It means collection of the information for the first time. Such information is
collection through the discussion with the various managers working in various
section of the finance department.

2. Secondary Data: - In order to carry out my successfully have relied on the

secondary data already available. Secondary data includes annual reports of ICICI
BANK and website of iciciprulife.com.

o Information regarding the profile of the organization has been collected from
the annual plan and the interviews of the concerned offices of the company.

o The data are secondary in nature of are collected from the published
information of the finance department.

o Some information has been collected from website of ICICI BANK i.e,
www.icicibank.com.

51
SAMPLE DESIGN
Research method : Sample Survey
Sample area : Dehradun
Sample size : 100 unit
Sample people : Customers

RESEARCH DESIGN
Research design is based on the ‘ Descriptive Method’ so as to describe the
characterstics of the market.

52
 NEEDS AND OBJECTIVES OF WORKING CAPITAL

The need for working capital cannot be over emphasized every business needs
some amount of working capital. The need for working capital arises due to the
time gap between production & realization of cash from sales. There is an
operating cycle involved in the sales and realization of cash.

The working capital is needed for the following purposes.

1. For the purchase of raw materials, components & spares.

2. To pay wages and salaries.
3. To incur day-to-day expenses & overhead cast such as fuel, power and
office expenses, etc.
4. To meet the selling costs are packing, advertising etc.
5. To provide credit facilities to the customers.
6. To maintain the inventories of raw material, work-in-process, stores and
spares and finished stock.

53
ICICI BANK
CONDENSED BALANCE SHEET
AS AT 30 JUNE 2018
(CURRENCY: INDIAN RUPEES THOUSAND)

ICICI BANK

SOURCES OF FUNDS 30-Jun-19 31-Mar-19

Shareholder’s funds 176521 176521
Share Capital 9,68,491 6,92,034
Reserves and surplus 1145012 8,68,555
APPLICATION OF FUNDS
Fixed assets 6,89,255 6,16,302
Gross block 3,49,985 3,21,737
Accumulated depreciation 3,39,269 2,94,302
Net block 28,018 40,209
Capital Work in progress 3,67,287 3,34,774
INVESTMENTS
Deferred tax asset 5,37,119 7,53,693
Current assets, loans and advances 93,437 80,732
Cash and bank balance 11,896 28,357
Sundry debtors 4,98,060 3,92,929
Loans and advances 5,46,808 5,80,836
Net current assets 10,56,764 10,02,122
Current liabilities and provision
Current liabilities 6,87,598 8,64,915
Provisions 2,21,997 4,37,851
9,09,595 13,02,766

54
 WORKING CAPITAL OF ICICI BANK

Working capital = net current asset- net current liabilities

Working capital of the year 2017

Working Capital = 1056764-909595

=1, 47,169

Working Capital of the year 2017

Working Capital = 1002122-1302766

= 3, 00,644
Difference in working capital of both years

=300644-147169

=153475

As figure shows that working capital of 2018 is decreasing in

comparison to 2017. It means company getting loss in 2018 while it was
in profit in previous year.

55
ICICI BANK COMPANY LIMITED
CONDENSED PROFIT AND LOSS ACCOUNT
(FOR THE THREE MONTH ENDED 30 JUNE 2018)

30-Jun-19 30-Jun-18

INCOME
MANAGEMENT FEES 11,36,090 9,06,360
DIVIDENDS 12,255 3,002
PROFIT ON SALE OF
INVESTMENT(NET) 8,701 17,842
MISCELLANIOUS INCOME 1,551 49
11,58,597 9,27,253

EXPENDITURE
EMPLOYEES COST 2,48,777 1,87,004
ADMINISTRATIVE AND OTHER
EXPENSES 4,68,555 3,05,083
DEPRICIATION 29,125 17,429
7,46,457 5,09,516

PROFIT BIFORE TAXATION 4,12,140 4,17,737

PROVISION FOR CURRENT
TAXATION 1,46,190 1,38,233
DIFERRED TAX CREDIT 12,706 522
FRINGE BENEFIT TAX 2,199 3,756
PROFIT AFTER TAXATION 2,76,457 2,76,270
ADD:ACCUMULATED PROFIT
BROUGHT FORWARD 2,95,006 30,809
BALANCE PROFIT CARRIED
FORWARD 5,71,463 3,07,079
EARNING PER SHARE OF FASE
VALUE OF RS. 10 EACH-
BASIC AND DUTIES 15.65 15.66

56
ICICI BANK COMPANY LIMITED
CONDENSED CASH FLOW MANAGEMENT
FOR THE THREE MONTH ENDED 30JUNE 2018
(CURRENCY: INDIAN RUPEES THOUSAND)

30-Jun-
30-Jun-19 18
Cash generated from/(used) in operating
activities(A) 96586 93150
Cash generated from/ (used) in investing
activities(B) 1,83,384 6,453

Cash generated from/(used) in financing

activities ( C) 1,03,260 1,11,925
Net increase in cash and cash equivalent
(A)+(B)+ ( C ) 16,462 12,332
Cash and cash equivalents at beginning of year
Cash and bank balances 28358 77,456
Book overdraft 28,358 60,779 16,677
Cash and cash equivalents at ending of period
Cash and bank balances 11896 4,355
Book overdraft 11,896 4,355

57
 PROFIT AND LOSS STATEMENT
OF ICICI BANK

( IN BILLION)

FY-2018 Q1-2018 Q1-2019 Q1-O-Q1

GROWTH
NII 73.04 14.79 20.90 41.3%
Non interest income 79.97 17.56 21.32 21.5%
-Fee Income 66.27 14.28 19.58 37.1%
-Other income 13.69 3.28 1.74 ( 46.9)%
Operating expenses 64.29 14.79 16.34 10.5%
DMA expenses 15.43 3.83 2.28 (40.3)%
Lease Depreciation 1.82 0.44 0.51 18.0%
Core operating profit 71.47 13.30 23.08 73.6%
-Treasury income 8.15 1.95 (5.94) ---
Operating profit 79.61 15.24 17.14 12.5%
Provisions 29.05 5.52 7.92 43.5%
Profit before tax 50.56 9.72 9.22 (5.2)%
Tax 8.98 1.97 1.94 (1.7)%
Profit after tax 41.58 7.75 7.28 (6.1)%

58
 BALANCE SHEET: ASSETS
( IN BILION)
Mar 31,2019 June 30,2018 June30,2018 Y-O-Y
Growth
Cash balance with
Banks and SLR 1,130.72 1,060.68 1,075.58 1.4%
-Cash bank
Balance 380.41 296.48 355.51 19.9%
-SLR investment 750.31 764.20 720.07 (5.8)%
Advances 2,256.16 1,982.77 2,241.46 13.0%
Other investment 364.23 330.81 356.98 8.8%
Fixed $ other asset 246.84 195.05 264 35.5%
Total assets 3,997.95 3,569.32 3,941.56 10.4%

BALANCESHEET : LIABILITIES
( IN BILLION)
Mar 31,2019 June 30,2018 June30,2018 Y-O-Y
Growth
Net worth 464.70 246.86 473.94 92.0%
-Equity capital 11.13 9.03 11.13 23.3%
-Reserve 453.58 237.83 462.81 94.6%
Preference 3.50 3.50 3.50 ---
Deposite 2,444.31 2,307.88 2,344.61 1.6%
Borrowing 863.99 702.81 938.23 33.5%
Other liabilities 221.45 308.26 181.28 (41.2)%
Total liabilities 3,997.95 3,569.32 3,941.56 10.4%

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 SUGGESTIONS

There are following suggestions which I would like to give to the Company:-
1 To tell client about that policies which are good running in the market.
2 The company should create awareness among the customers about the benefits of various
policies.
3 Company should go for an extensive personal contact program with the customers so that
customer may select policy plans as per their requirement and available finances for short and
long-term investment.
4 Company should give the knowledge to policy holders about their investment in share
market.
5 Company should behave as familiar with their investors or interested persons of the
portfolio of stock must be diversified, because it minimizes risk.
6 The sample investors were asked to give their suggestions for improvement of primary
market situation and they gave the following measures for strengthening primary market.

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 CONCLUSION

ICICI BANK is first life Company in India. It has businesses spread out across the globe. It
currently ranks number two amongst the insurers in India (Source: annual premium provided by
the company).

The company faces a large amount of competition. To sustain itself it must promote its products
through advertising and improve its selling techniques. Consumers must be aware of the new
plans available at ICICI BANK . The medium of advertising used could be television since most
of its competitors use this tool to promote their products. The company must be promoted as an
Indian company since consumers seem to have more trust in investing in Indian firms.

The unit linked concept must be specifically promoted. The general perception of life has to
change in India before progress is made in this field. People should not be afraid to invest money
in and must use it as an effective tool for tax planning and long term savings.

ICICI BANK could tap the rural markets with cheaper products and smaller policy terms. There
are individuals who are willing to pay small amounts as premium but the plans do not accept
premiums below a certain amount. It was usually found that a large number of males were
insured compared to females. Individuals below the age of 30 (mostly male) were interested in
investment plans. This was a general conclusion drawn during prospecting clients.

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BIBLOGRAPHY

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 BIBLOGRAPHY

WEBSITE-

o www.icici.com
o www.irdaindia.com
o www.money control.com

MAGAZINS –

o World
o The Outlook Money
o Secrets of Successful Sales by Mr. Jack Kinder

BOOKS-
o K.G . GUPTA “ ACCOUNTING FOR MANAGEMENT”

o KOTHARI C. R. 1995, “RESEARCH METHODOLOGY” (2nd Edition)

Wishwa Prakashan, NEW DELHI.

o DR. P. PERIASAMY, 2005, “WORKING CAPITAL MANAGEMENT” (2nd

Edition), HIMALAYAN PUBLISHING HOUSE, MUMBAI.

o KHAN AND JAIN “ ACCOUNTING FOR MANAGEMENT”.

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