A STUDY ON ORGANISATION

AT STOCK HOLDING CORPORATION OF INDIA

FOR THE AWARD OF THE DEGREE IN MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY:

Divya Rani M.P REG.NO:4RA10MBA10

Under the guidance of Mr. Sunil Dep. Of management Rajeev Institute of technology Mysore Banglore bipas road Hosa kopal Hassan-573201ss

ACKNOWLEDGEMENT

I would like to express my pleasure towards Prof Rajashekar Swamy HOD department of management studies, Rajeev Institute of Technology of management studies for providing me an opportunity to carry out this project work. I would like to express my profound thanks to my project guide

who guided me in all areas during my project. I wish to express my heart full and sincere thanks to

Mr.Jaypal and Mr.Shrinivas for providing an opportunity to do my project and also for their valuable guidance support in carrying this project work. I am great full to all faculties of Rajeev Institute of Technology of Management Studies and to all company employees, my parents who enabled my project to get into a shape.

DIVYA RANI M.P. (REG.NO. 4RA10 MBA 10)

TABLE OF CONTENTS SL.NO CONTENTS EXECUTIVE SUMMARY 1 2 INDUSTRY PROFILE COMPANY PROFILE A) Background and inception of the company B) Nature of the business carried C) Vision, Mission and Quality Policy D) Products/Services Profile E)Area of Operation F) Ownership Pattern G) Competitors Information H) Infrastructural facilities I)Achievement/Award J) Work Flow Model K) Future Growth and Prospects 3 4 5 6 Mckensy's 7S frame work SWOT Analysis Analysis of Financial statement Learning Experience

1. INDUSTRY PROFILE

Investment in various types of assets is an interesting activity that attracts people from all walks of life irrespective of their occupation, economic status, education and family background. When a person has more money than he requires for current consumption, he would be considered as a potential investor. The investor who is having extra cash could invest it in securities or in any other assets like gold or real estate or could simply deposit it in his bank account. The companies that have extra income may like to invest their money in the extension of the existing firm or undertake new venture. All of these activities in a broader sense mean investment. INDIAN CAPITAL MARKET The function of the financial market is to facilitate the transfer of funds

from surplus sectors (lenders) to deficit sector (borrowers). Normally, household has excess of funds or savings, which they lend to borrowers in the corporate and public sector whose requirement of funds far exceed their savings. A financial market consists of investors or buyers, sellers, dealers and does not refer to a physical location. As elsewhere in the world, the Indian financial system consists of the money market and capital market. The capital market consist of primary market and secondary market segments. The primary market deals with the issue of new instrument by the corporate sector such as equity shares, preference shares and debentures. The public sector consisting of central and state governments, various public sector industrial units (PSUs), statutory and other authorities such as state electricity boards and port trust also issue bonds. The primary market in which public issue of securities is made through a prospectus is a retail market and there is no physical location. Direct mailing, advertisements and brokers reach the investors. Screen based trading eliminates the need of trading floor. The secondary market or stock exchange where existing securities are traded is an auction arena. Since 1995, trading in securities is screen based. Screen based trading has also appearance in India.

The secondary market consists of 24 stock exchanges including NSE and Inter Connected Stock Exchange of India ltd. The secondary market provides a trading in securities already issued to be bought and sold. It also provides liquidity to the initial buyers in the primary market to re-offer the securities to any interested buyers at price, if mutually accepted. An active

secondary market actually promotes the growth of the primary market and capital formation because investors in the primary market are assured of a continuous market and they can liquidate their investments in the stock exchange.

Securities and Exchange Board of India (SEBI)

The year 1991 witnessed a big push being given to liberalization and reforms in the Indian financial sector. For sometime thereafter, the volume of business in the primary and secondary securities markets increased significantly. As a part of the same reform process, the globalization or internationalization of the Indian financial system made it vulnerable to external shocks. The multi-crore securities scam rocked the IFS in 1992. All these developments impressed on the authorities the need to have in place a vigilant regulatory body or an effective and efficient watchdog. It was felt that the then existing regulatory framework was fragmented, ill-coordinated, and inadequate and that there was a need for an autonomous, statutory, integrated organization to ensure the smooth functioning of the IFS. The SEBI came into being as a response to these requirements. The SEBI was established on April 12, 1988 through an administrative order, but it became a statutory and really powerful organization only since 1992.

Objectives of SEBI
The promulgation of the SEBI ordinance in the parliament gave statutory status to SEBI in 1992. According to the preamble of the SEBI, the three main objectives are To protect the interests of the investors in securities. To promote the development of securities market. To regulate the securities market.

2. COMPANY PROFILE:
SHCIL's long-standing association with Clearing Members has enabled it to develop services based on an understanding of their working and their requirement for timely and accurate information.

A) Background and inception of the company:

SHCIL has been conferred with the prestigious ISO/IEC 27001:2005 certification for Data Centre and its Operations by TUV-NORD, Germany. ISO/IEC 27001:2005 certification for SHCILs Data Centre and its Operations is an assurance to customers and other stakeholders that SHCIL has benchmarked itself with the highest standards of security and due diligence in their IT systems This certification would help SHCIL to make its processes more effective and to provide a strong defense against risks to business assets, customer data and information security. It would also facilitate improving SHCILs processes as an on-going activity.

Stock Holding Corporation of India Ltd. (SHCIL) was incorporated as a Public Limited Company in 1986. It has been jointly promoted and owned by leading Banks and Financial Institutions viz., IDBI Bank Ltd., ICICI Bank Ltd., SU-UTI, IFCI Ltd., LIC, GIC, NIA, NIC, UIC, and TOICL, all leaders in their fields of business.

Accept deposits of collaterals( bank guarantees, FD's, Demat shares) towards base capital and additional base capital requirements stipulated by NSE for clearing members trading on its capital market, Futures & OPTIONS, CURRENCY FUTURES DERIVATIVE segment. Besides, Clearing members stand to earn a steady income from our product transactions and new additions to their client-base, while we capitalize on their rapport with the market. We currently offer Depository services to more than 680 clearing members of various exchanges connected with NSDL and CDSL. Our Customer Care lines answer all your DP queries while the Interactive Voice Response (IVR) system gives you information on your account and other valuable data like CC calendar details, tariff, ISIN information, etc. via telephone, fax and email.

B) Nature of the business carried:

SHCIL began by offering custodial and post trading services, adding depository services and other services to its portfolio over a period of time. Depository Participant services cater to all individual investment needs. With a parentage of leading financial institutions and insurance majors and a proven track record in the Custodian business, company have reiterated our past success by establishing ourselves as the first ever and largest Depository Participant in India. From a tentative foray in 1998 into the individual investor arena to servicing around seven lakh accounts, we have endeavored to constantly add and innovate to make business a pleasure for you. Over 191 of our networked branches ensure we are available wherever you look out for us. Across the country, thirteen Depository Participant Machines (DPMs) connected to NSDL and seven connected to CDSL ensure fast and direct processing of your instructions. SHCIL also provides Derivatives clearing, PF fund accounting, SGL constituent account services, distribution of mutual funds and other capital market instruments, besides distribution of life and non-life insurance policies. Other offerings added to the bouquet are online net trading, loan against shares, Western Union Money Transfer & E-stamping. In the pipeline are a host of services that will complement the range of services offered by SHCIL. At SHCIL, we place a very high premium on client reporting .Periodic statements sent to you keep you informed of your account status. Dedicated Customer Care lines manned by trained staff answer your queries on demat / trades / holdings. customer-centric account schemes have been designed keeping in mind the investment psyche of our clients. Your DP account with us takes care of your Depository needs like dematerializations, dematerializations and pledging of shares.

C) MISSION:
To be a world-class technology driven and client focussed market leader in financial and teechnical services.

QUALITY POLICY:To achieve and retain leadership, SHCIL shall aim for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. Quality Objectives As per the Quality Policy, SHCIL will: Build in-house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services. Establish a partner relationship with its investor service agents and vendors that will help in keeping up its commitments to the customers. Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customer's needs. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients. Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of same. Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients. Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of same. Strive to keep all stake-holders(shareholders, clients, investors, employees, and regulatory authorities) proud and satisfied. suppliers

D) Products and Services:

The focus of the Corporation has always been to direct its product and services for all round benefit of the investors. The Corporation provides wide range of financial services under one roof, which has always been a priority whike safety and investor friebdliness have the hallmark of SHCILs products and services. Institutional Segment-

Custodial service provided by SHCIL to Institutional clients include post trade settlement, safe-keeping, corporate actions and customized reporting through web and valuation of securities. Retail Segment-

Depository srevices, sub-broking services, distribution of large number of financial products and auxiliary services are offered o clients in the retail segment. Depository Services-

Since 1998, SHCIL has been extending depository related services to the retail segment. The services offered by SHCIL include account opening, creation/closure of pledge. SHCIL is also empanelled as a Depository Participant with National Spot Exchange Limited for customers to hold commodities such as e-gold, e-silver, e-copper etc in dematerialized form. Sub-Broking Service-

As a prt of its endeavor to be a market leader in financial services and segment through its subsidiary company-SHCIL Services Ltd.(SSL), which is a member of BSE and NSE, SHCIL is an Authorised Person of F&O segment of NSE for the purpose of derivative trading. SHCILthrough SSL, provide speedy, safe, reliable and affordable broking services to retail, HNI and Corporate clients, through its wide network of branches spread across the country. The client also has the option of trading online through internet. Distribution of Third Party Products-

SHCIL distributes Mutual Fund Schemes and Fixed Deposits/Bonds of reputed Institutions & Corporates. The Corporation is a Corporate agent for LIC of India and The New India Assurance Company Ltd for promoting their Life and Non-Life insurance products respectively. It also distributes/provides Intial Public Offers & Western Union Money Transfer services to its clientele. The Corporation has tied up with IDBI Bank Ltd for providing its investors-Loan against Securities. SHCIl has also started offering New Pention Scheme (NPS) through designated branches.

The Auxiliary Services-

The auxiliary services provided by SHCIL includes extension of Professional Cleari ng Member service in futures and Options (F&O) segment of stock exchanges, constituent SGL account servics and PF accounting services . SHCIL is one of the largest proffesional clearing members of the country. e-stamping

The Corporation has been authorised by the Ministry of Finance, Government of India to act as a Central Record-keeping Agency (CRA) to design and implement an electronic method of stamp duty collection. E-stamping is a web-based solution for payment and collection of nonjudicial stamp duty. SHCIL is the sole CRA for e-stamping in India. The Corporation has entered into agreements and implemented e-stamping system in the States of Gujarat, Karnataka, NCT of Delhi, Maharashtra, Assam and Tamil Nadu. SHCIL has signed agreement with the Government of Bihar. SHCIL is in discussion with other vState Governments. Investment Advisory Services-

The Services provided by SHCIL include Market Insight, covering overview of all markets as also Indian Equity market, comprehensive Newsletter covering the daily news, Insurance reports and Mutual Fund reports to investors. SHCIL brings out an analysis of quarterly as, M.F. Guide to gainevery month. Smart Investor Guide is also being published on a quarterly basis to facilitate investors in their wealth creation efforts by providing useful insights into sectors, companies and mutual funds to invest. The compendium also includes other investment/ saving avenues.

E) Area of operation:
MUMBAI BANGLORE MYSORE HASSAN

F) Ownership pattern: Stock Holding Corporation of India Ltd. (SHCIL) was incorporated as a Public Limited Company in 1986. It has been jointly promoted and owned by leading Banks and Financial Institutions viz., IDBI Bank Ltd., ICICI Bank Ltd., SU-UTI, IFCI Ltd., LIC, GIC, NIA, NIC, UIC, and TOICL, all leaders in their fields of business.

G) Competitors information:
KARVY SECURITIES GEOJIT SECURITIES INDIABULLS ICICI SHAREKHAN KOTAK SECURITIES

H) INFRASTRUCTURE FACILITIES:
Online Trading Software Surveillance & Risk Management Client Administration Back Office Software Commission links Networking & Hardware Security

I) Achievements/Awards: SHCIL has established itself in India as a one-stop solution provider in the Financial Services domain. Citation and Medal from Smithsonian Institute, Washington D.C, U.S.A. for " Visionary and Innovative use of Technology in Finance, Insurance and Real Estate". First South Asian Corporate to receive this. Computer Society of India Award for best IT usage in the Country. Our software processes have been assessed at SEI CMM Level 3. Accepted industry leader and pioneer in Custodial Systems.

J) WORK FLOW MODEL:

Distribution E-Broking D2C

There are three channels namely:

DISTRIBUTION

EQUITY

Head Office

Head Office

Zonal Managers

Zonal Managers

Vice-President Support Asst. Vice-President Functions Territory Managers

Vice-President

Asst. Vice-President

Territory Managers

Branch Managers

Branch Managers

Team Leaders

Team Leaders

Relationship Managers

R. Managers

Asst. Relationship Managers

Asst. R. Managers

Tele Marketing /

Equity Advisors

K) Future growth and prospects:

SHCIL played a major role when the physical securities were in vogue. With the introduction of the depository system in the country. SHCIL made a foray into the retail segment. It emerged as the premier custodian and one of the largest depository participants in the country. SHCIL aims to client focused market leader in financial and technical services.

3. MCKINSEYS 7S MODEL:
The 7-S framework of McKinsey is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company. Together these factors determine the way in which a corporation operates. The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example: Improve the performance of a company. Examine the likely effects of future changes within a company. Align departments and processes during a merger or acquisition. Determine how best to implement a proposed strategy.

The Seven Elements The McKinsey 7S model involves seven interdependent factors which are categorized as either hard or soft elements: Hard Elements Strategy Structure Systems Soft Elements Shared Values Skills Style Staff

Shared Value:

The interconnecting center of McKinseys model is Shared Values. What does the

organization stands for and what it believes in.

Strategy: Plans for the allocation of firms scarce resources, over time, to reach identified goals. Environment, competition, customers. Structure: The way the organizations units relate to each other: centralized, functional

divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc. System: The procedures, processes and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems. Staff: Numbers and types of personnel within the organization. Style: Cultural style of the organization and how key managers behave in achieving the

organizations goals.

Skill:

Distinctive capabilities of personnel or of the organization as a whole (Core

Competencies). McKinsey 7S model of the SHCIL: SHARED VALUES: All the members of the SHCIL, share the common fund mental idea and the guiding principles around which the business is built. The fundamental idea is to make profit by achieving excellence in the filled of security trading. These values and common goals keep the employs working towards a common destination as a coherent team in satisfying the customer. Strategy: Market conditions in particular the performance of the Equity markets, contributes substantially to SHCIL revenues & while impact on our ability to repeat or improve on the earnings the capital market industry in which your company is operating is subject to extensive regulation of company has a proper and adequate system of internal control desk\ginned to ensure regulatory compliance. The company evaluates the technology obsolescence and the associated risk and makes investment accordingly.

STRUCTURE:
Structure includes the policies and procedures that govern the way in which the organization acts within it and the environment. It provides the framework for relationships among different parts of organization. It sets out the formal reporting relationships, mode of communication, their respective roles and rules and regulations for carrying out different task. If not properly defined-detrimental effect on the effective and efficient working because motivation and morale is low, decisions are delayed and of poor quality, the expenses rises, orders are lost due to competition, lack of confidence. following question What is the basic structural form? How centralized versus how decentralized is the organization? What is the relative status and power of the organization? Structure of any organization has to answer the

It is the way the organization structured and who reports to whom i.e., How people and asks/work are organized and organization reporting lines. The way in which people are organized tasks are coordinated. There are nine departments in SHCIL they are

OPERATIONS:Its main function is to take care of the trading in the organization. It also takes care of the responsibility of executing all the policies and procedures in the organization. PROJECTS: The SHCIL Company has managed scores of highly challenging projects for blue chip companies in Private as well as Public Sector.

RISK MANAGEMENT: Its function is to look after margins of profits on the transactions.

COMPLIANCE: Its responsibility is to look after the assignments given to various branches and look that they are completed on time.

ADMINISTRATION: It involves all top level management which takes care framing polices in the organization.

HUMAN RESOURCE: The function of this department is to look after the recruitment selection, counseling, training, placement and promotion. The company places significant importance to its human capital.

FINANCE: Its function is to take care of formulation of financial report submitting to the auditor sending it to the shareholder budgeting managing the pay inns and out etc.

TECHNOLOGY: The function of this department is taken care of the up gradation to the recent technology so that they can offer the best services to the best services to the customers.

MARKETING: It takes care of the marketing of the various services offered by SHCIL.

SYSTEMS:

System in this framework stands for the rules and regulation, procedures and practices that must be allowed to carry out the tasks in the organization. A good system adds to the efficient in effective working of the entrepreneur. The formal and informal process and procedures that support the strategy and structure. In other words it is the daily activities & procedures that staff members engage in to get the job done. In other word all the process and information flows that link the organization together.

The company has an adequate system of internal controls to ensure accuracy of accounting records, compliance with all laws & regulations & compliance with all rules procedures and guidelines prescribed by the management. An extensive internal audit is carried out by independent firms of CA in branches and head office. An internal team of inspection also regularly visits branches for ensuring regulatory compliance post audit reviews are also carried out to ensure follow up on the observation made the audit committee of the board reviews the scope of the internal audit on a regular basis.

The organizations are simplifying & modernizing their process by innovation & use of new technology to make the discussion making process quicker. Special emphasis is on the customers with the intention to make the process that involves customers as user friendly as possible.

The stock broking industry as recently witnessed intense competition falling brokerage rates and the entry of several big players. Company continues to achieve cost efficiencies through the applications of technology.

STYLE:
Style includes leadership style of top management and overall operating style of the organization. Style impacts the norms people follow and how they work and interact with each and with customers. How does top management make decisions- participatory versus top-down? How do managers spend their time-in formal meeting, informal conversations, in the field, with customers, etc.? It is the style of leadership adopted so called behavior of managers when interacting with others.

The culture of the organization consisting of two components:

1) Organisation culture; The value beliefs and norms which gets developed over the period of time which becomes a prominent feature of organization.

2) Management style: This is more to do with the manager style of operation. The style adopted in SHCIL achievement-oriented style where the managers set high goals and expects subordinates to have high level performance. And also the management style of operation in SHCIL TOP DOWN approach where the direction are passed on from the top level to the bottom level.

STAFF:
The organization has to look into its people, their backgrounds, and competencies, staff also includes, the organizations approaches to recruitment, selection and specialization. How people are developed, how recruits are trained, socialized, integrated, and how their careers are managed? It involves employees and their general capabilities. Its also involves how you develop managers. Concerns on demographics of personnel. Employees who deal with clients are expected to handle them with the utmost care. The client deserves immediate and total attention. No client issue should be ever postponed.

SKILLS:
Skills include the distinctive competencies that reside in the organization. These can be distinctive competencies of people, management practices, systems and/or technology. What business activities is the company distinctively good at performing? What new capabilities do the organization? Needs to develop, which one does it need to unlearn to compete in the future. This can be learning through SWOT analysis. The core competency of the personnel or of the organization as whole. On other words it is the actual skills and competences of the employees exist or working for the company where the core competencies of the firm are captured.

In SHCIL core competency is built through a process of continues improvement among the employees of the organization. The company has been paying special attention to improve the skill set of the employs through various training programs. All employees are encouraged & incentivized to get them certified in relevant industry standard certification such as CFP, NCFM, BSEC, & AMFI. Majority of the employs have obtained such certifications.

4. SWOT ANALYSIS
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. Strengths: attributes of the person or company that is helpful to achieving the objective. Weaknesses: The absence of certain strengths may be viewed as weakness. Opportunities: external conditions that is helpful to achieving the objective. Threats: external conditions which could do damage to the objective.

The main Strengths, Weaknesses, Opportunities and Threats of the company have been observed and studied in the organization.

STRENGTHS:-

The company is having rich brand awareness and maintaining high quality image. It has acquired various awards from states and national level. It has goodwill in the market. It is having more assets than the liabilities in the company accounts. The dealers of the company are having full knowledge and awareness about the product and market. It is having an excellent distribution network. It is maintaining a good infrastructure facility. Good management facility.

B) WEAKNESSES:-

The company still not has been enough to cherry up cost competitiveness. Employees are not well trained. Heavy excise duty. The company situated in rural area. So it is far from market, which leads heavy transportation cost. It is having centralized control system which is not useful for sudden decisions.

C) OPPORTUNITIES: Dealers are showing increased interest in purchasing the companies board because of high profit margin. They are having good and excellent infrastructure and in ultra structure facilities. They are having goodwill in workers also. The employees-employer relation is very well compared to others companies.

D) THREATS: The increases No of consumers are buying the products with door-delivery system but this company is not having this facility. The company is not interesting more in advertisement compared to competitors. Highly modernized distribution situation is not present in the company. Same competitors are introduced some highly technical aspects like global view, etc. in which this company is weaker.

5. Analysis of financial statement:

Particulas Yearly Op. Revenue Other Income Total Income EBITDA Other exps. Net profit Eq. Share Cap. Book Value EPS 4133 52 4186 1010 416 594 29 88 21 Mar 11 % Chg 27% 3252 Mar 10 % Chg 16% 2795 Mar 09 % Chg 25% 2231 Mar 08

-56% 119 24% 16% 21% 13% 4% 28% 14% 3371 868 345 524 28 69 19 26 16

274% 32 19% 2827

-80% 161 18% 2392

171% 321 76% 196

-33% 478 4% 188

319% 125 4% 40% 27 49

-57% 291 0% 8% 27 45

304% 5 11 4

-57% 11 20 12

EBITDA Margin(%) 24 N.P. Margin(%) 15

6. Learning Experience :

Firstly, I came to know how to approach the companies for getting the project work & to communicate with the higher officials regarding the project & convincing them how it is useful to the company & also how it is useful to me. Secondly. I learnt how the theoretical concepts in the classroom as a part of my degree were been implemented in the corporate world as their compulsory policies & procedures to carry out daily activities.

Thirdly, I learnt how the company sets their vision & mission & the objectives & the policies to achieve the vision of the company in their journey to achieve the goals in their business processes. As a student of MBA, the in plant training at SHCIL helped to gain exposure towards the actual functioning of a process based industry.

Bibliography: Smart Investor Guide Website referred Financial management Indian financial system Fundamentals of Investment I M Pandey. M Y Khan. Gordon J. Alexander, William E. Sharpe, Jeffery V Bailey. Stock Holding Corporation of India