volume xix september 2019 · 2020. 5. 5. · 2 | page message effective people are not...

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SEPTEMBER 2019 VOLUME XIX

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Message Effective people are not problem-minded; they are opportunity-minded. They

feed opportunities and starve problems.

-Dr. Stephen Covey

It gives me immense pleasure to present to you the nineteenth issue of the Research journal - ‘Dhii’ September 2019. It is a journal by the students of MBA/MCA/M.COM (FA) that has both internal and external expert reviewer teams. The journal publishes articles on current research in the areas of Finance, Marketing, Human Resource and Information Technology. This issue has thirteen articles. The time spent at the Master’s Degree must make a difference. In a way it is a stepping-stone to a different life altogether. Since, this is the ideal time for study and teaching learning thrives in an ambience wherein new knowledge is created, the course has been planned carefully to enable the students for further academic pursuits. Encouraging students at their master’s degree level to develop an interest in research is the first step in creating a culture of research. To make research a part of their curriculum, to start early to generate the interest in the young academicians is the purpose of this journal. In their final year, the students have the opportunity to work on a research project in an area of their choice, under the guidance of one of the faculty members. This is to encourage independent study in the students giving them an opportunity to engage with research and prepare them for higher levels of academia. The work that they put in towards the compilation and release of these journals, which they incidentally contribute articles to as well as edit, teaches them valuable lessons on research.

While ‘Dhii’ hones the research skills in the students, it challenges the staff to keep abreast with the latest areas of research which in turn helps improve the quality of their teaching.

My sincere appreciation goes to our student contributors, who worked with ease, enthusiasm and joy. I thank my dear staff, who journeyed with our students and worked towards successful release of the nineteenth issue. Congratulations to the staff and students of MBA/MCA/M.COM (FA). In our constant striving for excellence, we continue to march ahead keeping in mind the college motto ‘Let Your Light Shine’. God Bless You Dr. Sr. Lalitha Thomas Director, Post Graduate Centre Jyoti Nivas College Autonomous

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Names of the Reviewers

Section I – MCA External Reviewer

Ms. Dharani G, Assistant Professor, Department of Computer Science, CMRIT,Bangalore

Internal Reviewer

Ms.Swarnamugi M, Assistant Professor, Department of MCA, Jyoti Nivas College, Bangalore.

Mr. Rajesh Dharmaraj, Assistant Professor, Department of MCA, Jyoti Nivas College, Bangalore

Ms. Irene Getzi S, Assistant Professor, Department of MCA, Jyoti Nivas College, Bangalore.

Section II – MBA External Reviewers:

Mr.B.S.Srinivasa, Company Secretary, Yokogawa India Limited, Bangalore.

Mr.Sreekanth B S, Manager – HR Management Buhler India Pvt Ltd., Bangalore.

Mr.Vijay Kumar, Product Manager -GS&GC Business Unit (South Asia Region)

Buhler India Pvt. Ltd, Bangalore.

Internal Reviewers:

Dr. Percy Bose, Department of MBA, JNC, Bangalore.

Dr. Philcy Anthony, Department of MBA, JNC, Bangalore.

Mrs. Bella Thomas, Department of MBA, JNC, Bangalore.

Mrs. Priya Vinod, Department of MBA, JNC, Bangalore

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Section III – M.Com (FA)

External Reviewers:

Mr.Ajay Chowdary B, Finance Controller, Simpliance Technologies Pvt. Ltd., Bangalore.

Mr. Jerrin Thomas, CEO, Nu-Pie Management Consultancy Service, Bangalore.

Internal Reviewers: Dr. Jahnavi, Department of M.Com (FA), JNC, Bangalore.

Mr. Vincent Paul, Department of M.Com (FA), JNC, Bangalore.

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DHII JOURNAL OF THE MBA, MCA AND M.COM (FA)

DEPARTMENT, JYOTI NIVAS COLLEGE AUTONOMOUS

Volume XIX Sept 2019

SECTION I (MCA)

1 A COMPARATIVE STUDY ON SPATIAL DOMAIN IMAGE FUSION TECHNIQUES

10

~Archana P, ~Hema Malini R

2 WEATHER FORECASTING IN AGRICULTURE

17

~Navami. V,~ Lata Sudi

3 WOMEN SAFETY SYSTEM USING IOT AND

ANDROID

23

~ Sindhu Priya M,~ Shipra Kumari

SECTION II (MBA)

1 A STUDY ON “HR ANALYTICS IN RECRUITMENT” CONDUCTED AT HGS, BANGALORE.

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~Neha Babu

2 A STUDY ON PROJECT EVALUATION OF MICRO, SMALL AND MEDIUM ENTERPRISES.

38

~Nikitha Sharon Paul

3 FINANCIAL PLANNING ON SALARIED EMPLOYEES AND TAX SAVINGS AT HINDUSTAN AERONAUTICS LIMITED

46

~Sushmitha.V

4 A STUDY ON PERFORMANCE MANAGEMENT AT LAPP INDIA PRIVATE LIMITED

53

~Suprabha. M

5 A STUDY ON PERFORMANCE APPRAISAL AND ITS EFFECTIVENESS AT AEGIIS PVT LTD

61

~Umme Sufiya

6 COMPARTIVE STUDY BETWEEN MUTUAL FUNDS AND ULIPS

67

~Vaishnavi S

SECTION III(M.COM(FA))

1 A STUDY ON NPA MANAGEMENT AT THE SOUTH INDIAN BANK LTD., Bangalore

77

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~Anbu Selvi

2 ANALYZING THE FINANCING DECISIONS OF BRIGADE COMPANY

89

~Deepa Yoganandan

3 COMPARATIVE ANALYSIS OF BANK RECONCILIATION STATEMENTS

99

~Shraddha Singh Khirwar

4 THE PERFORMANCE EVALUATION OF MUTUAL FUNDS

109

~Sonia.F

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SECTION I (MCA)

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Foreword Definiteness of purpose is the starting point of all achievement.

–W. Clement Stone The purpose of this journal is to foster and reward the scholarly efforts of our students as well as to provide a valuable learning experience. The first section of September 2019 edition of ‘DHII’ showcases 3 outstanding research papers from the field of computer science focusing the active areas of research namely cloud computing, image processing and text recognition.

The first paper of Dhii is based on a comparative study on spatial domain image fusion techniques.

This paper focuses on spatial domain image fusion method which directly deals with pixel values of the input images. Some of the spatial domain image fusion techniques used in this paper are Average Method, Simple Maximum Method, Simple Minimum Method and Principal Component Analysis (PCA). So we are performing a comparative analysis on these techniques. This paper also intends in presenting performance measures like Entropy (EN), Peak Signal to Noise Ratio (PSNR) and Root Mean Square Error (RMSE) for the mentioned spatial domain techniques.

The second paper of Dhii focuses on weather forecasting in agriculture.

This paper focuses on predicting rainfall at a given location, at a particular time that can help farmers to better manage their fields. It can help farmers to decide on the type of crops to be planted on a season. A framework for predicting rainfall using machine learning algorithms is proposed. The algorithm uses parameters like temperature, wind gust, and wind speed for predicting rainfall and is tested on Australian weather dataset available on Kaggle. Data visualization using graphs helps to analyze the results better. The third paper is based on women safety system using IOT and android.

Women Safety is an important aspect in today’s world. In modern era women feel insecure to step out of their house due to increasing crimes in the country like sexual harassment, rape, abuse, violence etc. Women safety system protects the women from the cause of danger and save her life. The system tracks the women’s location and send the SMS to the registered mobile number by enabling the android device.

Dr. Shilpa Abhang Assistant Professor, Department of MCA Jyoti Nivas College Autonomous

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DHII Vol. XIX, Sept 2019

Journal Dept. of MBA, MCA and M.Com (FA) Jyoti Nivas College Autonomous

A COMPARATIVE STUDY ON SPATIAL DOMAIN IMAGE FUSION TECHNIQUES

~Archana P, ~Hema Malini R

Abstract

In this digital world of image processing, image fusion is the emerging field. Image Fusion is a way of incorporating two or more identical images to form single fused image which contains vital information in the resultant image. The resultant fused image provides more appropriate information and it is understandable for the human perception. The main purpose of image fusion is to improve the quality of the image. This paper focuses on spatial domain image fusion method which directly deals with pixel values of the input images. Some of the spatial domain image fusion techniques used in this paper are Average Method, Simple Maximum Method, Simple Minimum Method and Principal Component Analysis (PCA). So we are performing a comparative analysis on these techniques. This paper also intends in presenting performance measures like Entropy (EN), Peak Signal to Noise Ratio (PSNR) and Root Mean Square Error (RMSE) for the mentioned spatial domain techniques.

Keywords: Image fusion, Spatial domain, Simple methods, PCA, Fused image

1. INTRODUCTION

Image Fusion is a process of combining two or more input images of similar scene to produce a fused image which has appropriate quality. The fused clear image is more suitable for human and machine perception. The main objective of image fusion is to ease better understanding of resultant images. It also further extends in image processing tasks such as feature extraction, segmentation and target recognition. Image Fusion is applicable in the field of medical diagnosis, remote sensing, military surveillance, navigation guidance and machine vision. Image Fusion methods can be classified into different levels as pixel level, feature level and block or region based level. Pixel level fusion works directly on the pixels of input images. Feature level fusion operates on features extracted from the input images. Block or Region based fusion occurs according to pixel blocks of images and it is the highest level technique. Image Fusion is mainly performed in two domains, namely spatial domain and transform domain. In spatial domain, pixel value is directly manipulated from the input images. In transform domain, the input image

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is first transformed into frequency domain then fused and the resultant fused image is transformed back to spatial domain by an inverse transform.

Image Fusion methods has the following properties:

The fused image can preserve most of the important information from the source images. It does not produce artifacts which can distract or mislead human vision. The fused image must be definitive and robust.

This paper presents a comprehensive survey on some of the spatial domain techniques such as Average Method, Simple Maximum Method, Simple Minimum Method and Principal Component Analysis (PCA).

2. SPATIAL DOMAIN IMAGE FUSION TECHNIQUES:

2.1. Average Method: This method is performed by taking the average intensity values of the corresponding pixels from the two input images to obtain the resultant fused image.

Where, P(i,j), Q(i,j) are input images Y(i,j) is fused image. Average Method Algorithm: a) Taking pixel value of Input P. b) Taking pixel value of Input Q. c) Calculating average of both the corresponding pixels. d) Repeating steps a, b and c for all the corresponding pixels from both the input images. e) Fused image Y of Average method is obtained. Average Method Flow Diagram:

Input Image P

Input Image Q

Average Method

F=A+B/2

Fused Image Y

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2.2. Simple Maximum Method: This method is performed by taking the maximum intensity values of the corresponding pixels from the two input images to obtain the resultant fused image.

Where, A(i,j), B(i,j) are input images F(i,j) is fused image. Maximum Method Algorithm: a) Taking pixel value of Input A. b) Taking pixel value of Input B. c) Taking maximum value of both the corresponding pixels. d) Repeating steps a, b and c for all the corresponding pixels from both the input images. e) Fused image F of Maximum method is obtained. Maximum Method Flow Diagram:

2.3. Simple Minimum Method: This method is performed by taking the minimum intensity values of the corresponding pixels from the two input images to obtain the resultant fused image.

Where, A(i,j), B(i,j) are input images F(i,j) is fused image.

Input Image A

Input Image B

Fused Image F Max Method

Max (A)(B)

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Minimum Method Algorithm: a) Taking pixel value of Input A. b) Taking pixel value of Input B. c) Taking minimum value of both the corresponding pixels. d) Repeating steps a, b and c for all the corresponding pixels from both the input images. e) Fused image F of Minimum method is obtained. Minimum Method Flow Diagram: 2.4. Principal Component Analysis (PCA): This method is a sub space method, which reduces

the multidimensional data sets into lower dimensions for analysis. This method determines the weights for each input image using the eigen vector corresponding to the largest eigen value of the co-variance matrix of each input image.

PCA Algorithm: a) Calculate column vectors from input images. b) Compute co-variance matrix from two column vectors. c) Calculate eigen values and eigen vectors from co-variance matrix. d) Normalize the column vector. e) Multiply each pixel of the input image with the normalized eigen vector. f) The fused image matrix will be the sum of two scaled matrices.

Input Image A

Input Image B

Fused Image F Min Method Min(A)(B)

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PCA Method Flow Diagram: P1 P2 P1 I1 + P2 I2 3. PERFORMANCE MEASURES: 3.1. Entropy (EN): Entropy is a measure of information quantity contained in an image. If the

value of entropy becomes high after fusion, it is to indicate that the information increases and the fusion performances are improved.

3.2. Root Mean Square Error (RMSE): The Root Mean Square Error (RMSE) is a well-known parameter to evaluate the quality of the fused image. It represents the amount of deviation present in the fused image compared to the reference image.

3.3. Peak Signal To Noise Ratio (PSNR): The Peak Signal to Noise Ratio (PSNR) is obtained by taking the ratio between the maximum possible power of the signal to the power of the corrupting noise that creates distortion of image.

Input Image

I1

Input Image

I2

Principal Component Analysis

Fused Image

If

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4. RESULTS AND DISCUSSIONS:

Fig. 1. Image blurred on left Fig. 2. Image blurred on right

Average Method Simple Maximum Method

Fig. 3.Fused Image using Average Method Fig. 4.Fused Image using Maximum Method

Simple Minimum Method Principal Component Analysis (PCA)

Fig. 5. Fused Image using Minimum Method Fig. 6. Fused Image using PCA

Spatial Domain Entropy Peak Signal To Root Mean Square

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Table 1: Comparison of Spatial Domain Image Fusion Techniques

5. CONCLUSION

This paper focuses on performing a survey on spatial domain image fusion techniques such as Average Method, Simple Maximum Method, Simple Minimum Method and Principal Component Analysis (PCA). This review presents a comparison, that which approach is better among the discussed spatial domain image fusion techniques by performing different performance measures like Entropy, PSNR and RMSE. This review results that spatial domain image fusion provides high spatial resolution. 6. REFERENCES [1] R.Johnson Suthakar et al, "Study of Image Fusion- Techniques, Method and Applications",

International Journal of Computer Science and Mobile Computing, Vol. 3, Issue. 11, 469 – 476(November 2014).

[2] Mamta M. Mistry et al, "Survey on Different Image fusion Techniques", International Research Journal of Engineering and Technology, Vol.3, Issue. 3, 933 - 936(March 2016).

[3] Brahmbhatt Keyur .N et al, "Comparative study on image fusion methods in spatial domain." Int. J. Adv. Res. Eng. Technol. (IJARET) 4.2 (2013).

[4] Sharma Mamta, "A review: image fusion techniques and applications." International Journal Computer Science Information Technology 7.3 (2016): 1082-1085.

[5] Morris .C et al, "Survey of spatial domain image fusion techniques." International Journal of Advanced Research in Computer Science Engineering and Information Technology 2.3 (2014).

[6] Bedi S. S et al, "Comprehensive and comparative study of image fusion techniques." International Journal of Soft Computing and Engineering (IJSCE) ISSN 3.1(2013): 2231-230

Image Fusion Noise Ratio (PSNR) Error (RMSE)

Average Method 5.3308 27.5635 132.3006

Simple Maximum 5.3888 25.6937 230.8531

Simple Minimum 5.2984 26.9770 67.9641

Principal Component Analysis (PCA)

5.3320 27.5698 131.8608

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WEATHER FORECASTING IN AGRICULTURE ~Navami. V, ~Lata Sudi

Abstract Weather forecasting helps to predict the state of the atmosphere based on different quantitative data collected at a location. The nature of modern weather forecasting is not only highly complex but also highly quantitative. It can predict the weather using the parameters like wind, rain fall, air pressure, movement of clouds, or temperature. This article focuses on predicting rainfall at a given location, at a particular time that can help farmers to better manage their fields. It can help farmers to decide on the type of crops to be planted on a season. A framework for predicting rainfall using machine learning algorithms is proposed. The algorithm uses parameters like temperature, wind gust, and wind speed for predicting rainfall and is tested on Australian weather dataset available on Kaggle. Data visualization using graphs helps to analyze the results better. Keywords: Agriculture, Weather Prediction, Data Visualization, Irrigation Scheduling. INTRODUCTION Weather forecasting is the study of predicting the state of the atmosphere at a specific location. It has the principle of physics, supplemented by a variety of statistical and empirical techniques. Weather prediction plays an important role in agriculture. Ancient weather forecasting methods usually relied on the observed pattern. We rely a lot on weather forecasters who rely on many instruments to predict and forecast weather. Without technology people use to observe the sky, feel the wind and look at the how animals are behaving and wild life to know about the weather condition. Rainfall is an import factor that has a prominent role in agricultural growth. Excessive rainfall could affect the crops adversely and causes huge loss. While regular rain pattern is usually vital to healthy plants, too much or too little rainfall can be harmful, even devastating to crops. There are over a thousand of weather satellites in space currently providing real-time data on cloud pattern, wind, temperatures, air pressure etc. This massive dataset available could help to build systems that could predict the rainfall at a location and educate the farmers to wisely decide on the crops to be planted during a season.

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BACKGROUND STUDY The literature review reveals that basically there are three different types of methods used for weather prediction.

Numerical weather prediction: Numerical weather prediction uses mathematical models of the atmosphere and oceans to predict the weather based on current weather conditions. It provides best means and accurate results to forecast the upcoming meteorological conditions when compared with other methods. The disadvantage of this prediction is it is not suitable for long range weather forecast.

Statistical weather prediction: Statistical methods are used to predict the weather, along

with numerical methods. It used past records of weather parameters to predict the future weather. Statistical weather prediction is suitable for long range forecast.

Synoptic weather prediction: In metrological center, they provide synoptic chart for

every day. Within a Specific time, different weather parameters are observed. Different data collection and the study of observational data observed from thousands of weather stations.

PROPOSED WORK The aim of weather forecasting in agriculture is to predict the rainfall using temperature, wind gust speed and wind speed. The machines are trained with data of monthly rainfall for almost 5 years ranging from 2013-2017. We use the data received from Kaggle which contains details of 5 years of Australia weather data for evaluate our results. The various methods used in forecasting the weather. Statistical methods use the past records of weather data on the assumption that future will be a repetition of the past weather. Numerical weather prediction models use either grid point representation for all of their computation or a combination of spectral representations of some horizontal field along with certain grid point fields. Linear regression is a basic and commonly used type of predictive analysis. The overall idea of regression is to examine two things: does a set of predictor variables do a good job in predicting an outcome (dependent) and which variables in particular are significant predictors of the outcome variables. Using data visualization we plot the graph where data is presented in pictorial and graphical format. It enables decision makers to see analytics presented visually, so they can grasp difficult concepts or identify new patterns. IMPLEMENTATION STEPS:

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Step 1: Collecting Weather Data The main aim of Weather forecasting in agriculture is to predict the rainfall using temperature, wind gust speed and wind speed. The machines are trained with data of monthly rainfall for almost 5 years ranging from 2013-2017. We use the data received from Kaggle which contains details of 5 years of Australia weather data for evaluate our results. To make a weather forecast, the conditions of the atmosphere must be known for that location and for the surrounding area. Temperature, air pressure, and other characteristics of the atmosphere must be measured and the data collected. Step 2: Uploading Dataset from CSV file CSV (comma-separated value) files are a common file format for transferring and storing data. The ability to read, manipulate, and write data to and from CSV files using Python is a key skill to master for any data scientist or business analysis. The basic process of loading data from a CSV file into a Pandas DataFrame (with all going well) is achieved using the “read_csv” function in Pandas. Step 3: Predicting Data Using Actual Data The actual value of the dependent variable minus the value predicted by the regression equation. Unstandardized. The difference between an observed value and the value predicted by the model. It is the difference between the value of the dependent variable and the adjusted predicted value. Step 4: Finding Mean Absolute Difference For Trained And Tested Data The mean absolute difference (univariate) is a measure of statistical dispersion equal to the average absolute difference of two independent values drawn from a probability distribution. A related statistic is the relative mean absolute difference, which is the mean absolute difference divided by the arithmetic mean, and equal to twice the Gini coefficient. In a dataset a training set is implemented to build up a model, while a test (or validation) set is to validate the model built. Data points in the training set are excluded from the test (validation) set. Usually a dataset is divided into a training set, a validation set in each iteration, or divided into a training set, a validation set and a test set in each iteration.

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RESULTS: Residuals (Training)

Residuals (Testing)

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MAD for Location

CONCLUSION The proposed methodology aims at providing an efficient weather forecasting framework for predicting and monitoring the weather attribute datasets to predict rainfall. In past the parameters of weather were recorded only for the present time only. The future work will explore a working model of selection that can be classifying the framework for continuous monitoring the range of wireless devices using the algorithms to transmitting the data. It can be continuously monitoring to predict rainfall and generate the report of weather forecasting. Climatic attributes and also to increase the Considerable advances have been made in the past decade in our collective understanding of climate variability and its prediction in relation to the agricultural sector and scientific capacity. There is a need to further refine and promote the adoption of climate prediction tools. It is equally important to identify the impediments to further use and adoption of prediction products. REFERENCES [1] H. P. Das, F. J. Doblas-Reyes, et al, “Weather and Climate Forecasts for Agriculture” pp. (110). [2] L.S. RATHORE, “Weather Information for Sustainable Agriculture in India”, Journal of Agricultural Physics, Vol. 13, No. 2, pp. 89-105 (2013). [3] Hirut Getachew Feleke, “Assessing Weather Forecasting Needs of Smallholder Farmers for Climate Change Adaptation in the Central Rift Valley of Ethiopia”, Journal of Earth Science & Climatic Change, Volume 6 • Issue 10 • 1000312, pp.(8)

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[4] Piyush Kapoor, Sarabjeet Singh Bedi, “Weather Forecasting Using Sliding Window Algorithm” Volume 2013, Article ID 156540, 5 pages. [5] Muthulakshmi A, Dr.S.Baghavathi Priya, “A survey on weather forecasting to predict rainfall using big data analytics”, IJISET - International Journal of Innovative Science, Engineering & Technology, Vol. 2 Issue 10, October 2015, pp.(9) [6] Michael Smith, “Weather Prediction Using Historical Data”. [7] Vijay Kumar Didal1, et al, “Weather Forecasting in India: A Review”, International Journal of Current Microbiology and Applied Sciences ISSN: 2319-7706 Volume 6 Number 11 (2017) pp. 577-590. [8] Thesis, “Development of mobile based agriculture scheduling system for farmer in region language (Punjabi) using weather conditions”. [9] M. V. K. Sivakumar, “Climate prediction and agriculture: current status and future challenges”, Vol. 33: 3–17, 2006 [10] Paula Pereda, University of Sao Paulo, “Climate and Weather Impacts on Agriculture: The Case of Brazil”, Paula Pereda, University of Sao Paulo [11] Viraj Patodkar, Sujit Simant, et.al., “E-Agro Android Application”, International Journal of Engineering Research and General Science Volume 3, Issue 3, May-June, 2015 [12] Harjinder Kaur1, Major Singh Goraya2, “A Scenario of IT based Agriculture Projects in India” International Journal of Advanced Research in Computer Science, Volume 8, No. 1, Jan-Feb 2017

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WOMEN SAFETY SYSTEM USING IOT AND ANDROID ~Sindhu Priya M, ~Shipra Kumari

Abstract Women Safety is an important aspect in today’s world. In modern era women feel insecure to step out of their house due to increasing crimes in the country like sexual harassment, rape, abuse, violence etc. Women safety system protects the women from the cause of danger and save her life. The system tracks the women’s location and send the SMS to the registered mobile number by enabling the android device. Keywords: GPS, Android Device, Google Map, Security, Safety, IOT. INTRODUCTION This paper focuses on providing security for women during the time of emergency, which helps her to save her life and protect herself during danger. The system is built with an IOT device and android application which controls both hardware and software. The button can be fitted into the jacket and it can be carried out anywhere which it is enabled when the button is pressed. The android application is also enabled automatically and send the message to the registered contact numbers. The ideology of this system is to intimate the relatives and police about the current location of the victim which tracks the location using GPS sensor. The main object of women safety system is to provide security for women all over the world and to protect herself during the time of danger. PROPOSED WORK The main objective of this device is to provide safety for women during the time of emergency. Women can place the button anywhere in the jacket which is physically hidden from the outside world. The android application is automatically enabled as she press the button which will invoke the blynk application to display the exact location of the victim along with latitude and longitude value. This paper focus on providing safety for women while facing the security challenges in the society which helps the women to feel secure and safe in the society. The system works with a push button, Whenever women feels insecure she can press the button which tracks the current location of the victim and send the message to the registered contact numbers. This System can give a solution for every problem that the women is facing in the society which include several other options like Contact Police, Tracking Location, Sending SMS, siren. The GPS will fetch the location from the satellite and sends the location to the android application which in turn sends the message to the registered mobile number along with the latitude and longitude value with some text message.

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The device consists of: -

• Neo-6m GPS • ESP8266 Wi-Fi Module • Breadboard • Jumper wires

BACKGROUND Libraries 1. ESP8266WiFi library

It’s used to connect new ESP8266 module to Wi-Fi network to start sending and receiving data.

2. Blynk

Blynk Library establishes communication between hardware, Blynk Cloud and Blynk Apps.

Boards 1.NodeMCU 1.0 (ESP-12E Module)

This module is one of the cheapest, fully integrated ESP8266 solutions.

2.Arduino

Arduino Uno is hardware which is based on micro-controller. It has 14 digital input/output pins (of which 6 can be used as PWM outputs), 6 analog inputs, a 16 MHz quartz crystal, a USB connection, a power jack, an ICSP header and a reset button.

3.GPS Module

Global positioning system (GPS) is able to determine the latitude and longitude of a receiver on Earth by calculating the time difference for signals from various satellites to reach the receive.

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FLOWCHART

ENVIRONMENTAL SETUP 1.1 Hardware Specification:

Keywords: arduino uno, GPS module, Wi-Fi module, jumper wire 1.2 Software Specification:

Operating System: Windows 2010 application languages Tool: Arduino Application: Blynk app Software: Android studio

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1.3 Library: esp8266, Blynk, TinyGPS++

CIRCUIT DIAGRAM

RESULTS AND DISCUSSIONS

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CONCLUSION The Purpose of the project is to provide security for woman. In case of emergency situations woman will press an emergency button which will activates android application automatically and the GPS will track the location and send the message to register contact number with latitude and longitude.Alert massage is sent to register contact number through android application. We have used different module like WIFI module, GPS module. GPS module which will help to detect location of victim and Wi-Fi module to communicate between ardiuno to android. The location is captured by the GPS module and will be displayed on the blynk app. this design will deal with most of the critical issues faced by women and will help them to be secure. REFERENCES D. Thierer, ‖The internet of things and wearable technology: Addressing privacy and security concerns without derailing innovation‖Rich. J. Law Technol., vol. 21, pp. 615, 2015. P. N. Mahalle, B. Anggorojati, N. R. Prasad, and R. Prasad, Identify authentication and capability based access control (IACAC) for the internet of things,‖ J. Cyber Security Mobility, vol. 1, pp. 309–348, 2013. M. Brachmann, S. L. Keoh, O. Morchon, and S. Kumar, ―End-toend transport security in the ip-based internet of things,‖ in Proc. 21st Int. Conf. Comput. Commun. Netw., 2012, pp. 1–5.

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SECTION II (MBA)

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Foreword “Research is when millions saw the apple fall, but Newton asked WHY.”

By BERNARD BARUCH

Our students of MBA department as a part of their summer internship had explored in fields of

Finance, Human Resource and Marketing and had gained exposure to corporate world working

on real time projects whose tremendous efforts have been appreciated and put forth as research

articles, which we are happy to publish in the post graduate journal Dhii 2019.

Ms. Neha Babu of Second MBA, has attempted to make a close study on ‘HR analytics in

Recruitment’ conducted at HGS, Bangalore. This article deals with the importance of HR

analytics for an organisation in finding and hiring top talents in today’s Digital age.

Ms Nikitha Sharon Paul of second MBA, in her article ‘A study on project evaluation of Micro,

small and medium enterprises’ mainly focuses on studying the working capital management at

Canara bank with a special focus on MSME sector and financial tools used to appraise a loan

proposal.

Ms. Sushmitha V of Second MBA, in her research article ‘Finance planning on salaried

employees and tax savings at Hindustan Aeronautics Limited, Bangalore’ attempts to evaluate

the tax planning measures adopted by the salaried income tax assesses of the state in the light of

tax administration measures being implemented by the government.

Ms. Suprabha M of Second MBA, has focussed her study on ‘Performance Management’ carried

out at LAPP India pvt. Ltd, Bangalore. The article aims at finding out the impact of performance

management on employee’s performance and their expectation from their organisation.

Ms Umme Sufiya’s article focuses on studying ‘Performance appraisal and its effectiveness’ at

Aegiis Pvt Ltd. This article attempts to discover the importance of various performance appraisal

schemes to the organisation in achieving its goals.

Ms Vaishnavi of Second MBA, has focused her attention to make a ‘Comparison study between

Mutual Funds and ULIPs. This study was undertaken at Karvy stock Brokering Limited,

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Bangalore. The study plan is to give awareness on which is the best investment and which would

give long and short term returns.

In conclusion, May I place on record, that all our student researchers realise that research is all

about search for new knowledge and efforts to create new knowledge.

Dr. Percy Bose Head, Department of MBA Jyoti Nivas College Autonomous Bangalore

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DHII Vol. XIX, September 2019


A STUDY ON “HR ANALYTICS IN RECRUITMENT” CONDUCTED AT HGS, BANGALORE. ~Neha Babu

Abstract

Human Resources is also the function in an organization that deals with the people and, on boarding employees, performance management, training, and organization development and culture. Human Resource Analytics (HR analytics) is an area in the field of analytics that refers to applying analytic processes to the human resource department of an organization in the hope of improving employee performance and therefore getting a better return on investment. Recruitment refers to the overall process of attracting, short listing, selecting and appointing suitable candidates for jobs (either permanent or temporary) within an organization. The main problem in acquiring HR Tools to the organization is the investment it requires. Most of the organizations are not aware about Human Resource Analytics and the benefit which can be obtained from it.

1. INTRODUCTION

HR analytics is the application of statistics, modeling, and analysis of employee-related factors to improve business outcomes. HR analytics is also often referred to as: People analytics, Talent analytics and Workforce analytics. HR has core functions that can be enhanced by applying processes in analytics. HR analytics can help to dig into problems and issues surrounding these requirements and using analytical workflow, guide the managers to answer questions and gain insights from information at hand, then make relevant decisions and take appropriate actions.

Analytics is based on data, HR analytics is the science of gathering, organizing and analyzing the data related to HR functions like recruitment, talent management, employee engagement, performance and retention to ensure better decision making in all these areas. By using various types of HR software and technology, HR departments are creating a large amount of data every day. However, the objective of HR analytics is to actually make sense of this data and turn it into a valuable insight. The terms HR analytics, people analytics, and workforce analytics are often used interchangeably. But there are slight differences between each of these terms. It would help you to know the difference to be able to assess the most relevant data to their function.

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HR Analytics: HR analytics specifically deals with the metrics of the HR function, such as time to hire, training expense per employee, and time until promotion. All these metrics are managed exclusively by HR for HR.

People Analytics: People analytics, though comfortably used as a synonym for HR analytics, is technically applicable to “people” in general. It can encompass any group of individuals even outside the organization. For instance, the term “people analytics” may be applied to analytics about the customers of an organization and not necessarily only employees.

Workforce Analytics: Workforce analytics is an all-encompassing term referring specifically to employees of an organization. It includes on-site employees, remote employees, gig workers, freelancers, consultants, and any other individuals working in various capacities in an organization.

2. RESEARCH METHODOLOGY

2.1 Objectives of the Study

To determine the tools and techniques used for HRA in the organizations To determine the recruitment process with the help of HRA in the organizations. To study the changes over time in attrition and retention rate in the organizations. To determine the impact of HRA in Business performance. To explore the challenges faced by organization in adoption of HR analytics

2.2 Research Instruments

The study is based on primary and secondary data:

Primary Data Primary data is the data collected by the researcher himself for his particular purpose from the sources available. In this research primary data was collected with the help of questionnaire, which had a total of 25 questions, which contained queries that were relevant to the purpose of the study. The questionnaire was divided into two main parts. Part A which captured the background information of the respondent like Gender, Designation, and length of service the second Part B consisted of questions which were to measure the impact of Human Resource Analytics in Recruitment in the organization. This questionnaire was circulated with the help of industry guide to all respondents through Google forms.

Secondary Data It is the data which is already collected by someone else; Researcher has to analyze the data and interprets the result. It has always been important for the completion of any report. It provides reliable, suitable, adequate, and specific knowledge. This data

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collected from websites, brochures, journals etc. prominence was given to primary data as secondary data was insufficient.

2.3 Limitations of the Study

The study is based on the assumption that the information provided is correct and there is no bias.

The time and availability of the employees was one of the major constraints in conducting the study.

The limited project period was also a major problem for the study. The jurisdiction of the study is confined to one branch i.e. in Eco Space, Bellandur alone

and hence it cannot be extrapolated to other branches.

3. FINDINGS

Most of the employees are either not aware of HR Analytics or are not properly trained of usage of HR tools.

Most of them are of the option that organization should not concentrate on HR Analytics since the major tool used for analysis of data in the organization is Excel.

HR Analytics helps in finding the right candidate and also it increases the productivity of the organization thereby leading to a positive Business Performance.

Outsourcing affects the Organization as it saves time of the HR department and also increases the efficiency to find the right candidate.

In the organization HRA plays a vital role in decision making and also reduces the work pressure of the HR professionals.

We observe that in HGS, Basic Multivariate statistics is used the most to carry out HRA. Biggest challenges for HR managers are to manage the attrition and retention at any

driven circumstances. Employees are very satisfied with flexible working conditions and working environment

implemented in the organization. HR analytics will have a positive impact and will help the organization effectively and

efficiently. Importance of HRA given in the organization as it keeps a full time team dedicated to

HRA. HRA can improve its efficiency through calculating the attrition rate, data cleaning;

predict the performance of the employees, salary estimation. Microsoft Excel software in HGS as it is more flexible and less expensive. Hire analytical HR people as the training cost of the organization can be utilized

effectively. Training cost for HR analytics is challenging as it expensive to train HR professionals on

HR tools and it to be implemented in the organization.

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Employees prefer using HRIS tools as it increases the productivity and it is more convenient to use.

Male employees are higher than the Female employees. Thus the organization gives more importance to Male employees.

Employees who are married are not flexible to work to attain the goal of the organization. The majorities of the respondents are Post-graduates and have in-depth knowledge of the

work they do in the organization. There is career growth for the employees in the organization. The entry level process of the candidate to the selection of the candidate into the

organization takes around 3-4 hours of time. Placement Consultant is one of the main sources of getting the candidates to the

organization. The organization has trained the employees about the online tools and no other software’s

have been installed for the betterment of the organization. The complete analysis of a candidate into the organization during recruitment process

will complete in 30 minutes.

4. SUGGESTIONS & RECOMMENDATIONS

The following suggestions have been formulated based on the above study: -

Recruitment process must be upgraded according to the current trends in the market The organization can look at recruitment through other upcoming channels of sourcing

such as social media, social recruiting through monster; glass door etc. can be explored. HR professionals must be given awareness about Human Resource Analytics and its

benefits. The company must invest in HR tools for the betterment of work and also to have a equal

competition in the market. Attrition rate in the organization should be analyzed in frequent intervals and help the

organization reduce the emphasis on it Male and Female candidates should be given equal importance when it comes to

recruitment and selection. Organization must provide flexible working environment especially work timings.

5. CONCLUSION

A recruiter’s role has evolved over the years. Earlier they were only responsible for filling up vacancies arising out of a new role or requirement, or an employee moving out. In the current

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context, a recruiter has a bigger role to play. Organizations now understand that their biggest asset is their workforce, which explains why there is an increasing emphasis on finding and attracting the best talent. This growing competition for talent is also a result of rising candidate awareness. High performance employees understand they are a valuable asset and therefore do comprehensive benefit analysis before committing to a particular organization.

In this Digital age, jobseekers are constantly checking out new, better opportunities on the go or even while at work. From filling up vacant positions to finding and hiring top talent, to retaining them, it’s a tough task at hand. From my study it has been noted that majority of the employees agree that HRA will affect the business performance of the organization. Organizations should develop a comprehensive HR measurement and reporting strategy that is vertically aligned with the overall business strategy. Organization should devote proper time and resources to build Human Resource analytics and for training on HRA tools which will be better positioned to out-perform their competitors in the coming years.

BIBILIOGRAPHY

References

Yorke, A. (2018). HR Analytics-is it just a management fad or actually a way of supporting better decision making? What are some important areas related to HR Analytics within organization and in society.

Fred, M. O. (2018). A Study on Role of Analytics in Human Resource Decision Making With Reference To Recruitment Process for Business Process Outsourcing BPO Sector.

Jensen-Eriksen, K. (2016). The role of HR analytics in creating data-driven HRM: Textual network analysis of online blogs of HR professionals.

Chirinos, J. A., Rietzschel, E. R., Shiva-Kumar, P., De Buyzere, M. L., Zamani, P., Claessens, T.,& Gillebert, T. C. (2014). Effective arterial elastance is insensitive to pulsatile arterial load. Hypertension, 64(5), 1022-1031.

Certo, S. T., Lester, R. H., Dalton, C. M., & Dalton, D. R. (2006). Top management teams, strategy and financial performance: A meta‐analytic examination. Journal of Management studies, 43(4), 813-839.

Esarey, J., & Schwindt-Bayer, L. A. (2018). Women’s representation, accountability and corruption in democracies. British Journal of Political Science, 48(3), 659-690.

Singh, M. (2013). Important pricing methods in 4’Ps. International Journal of Management

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Websites

https://www.analyticsinhr.com/blog/what-is-hr-analytics/ https://www.techopedia.com/definition/28334/human-resources-analytics-hr-analytics https://www.forbes.com/sites/bernardmarr/2016/03/01/the-8-hr-analytics-every-manager-

should-know-about/

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A STUDY ON PROJECT EVALUATION OF MICRO, SMALL AND MEDIUM ENTERPRISES. ~Nikitha Sharon Paul

Abstract

Banks have always played an important position in the country’s economic growth and development of countries which are still in development phase. They play a decisive role in the development of industry and trade. They not only act as the custodian of the wealth of the country but also as resources of the country. They help in achieving the objective of development of priority sectors of the economy and one of such is MSME sector. The MSME has emerged as a highly vibrant and dynamic sector of the Indian economy over, the last five decades by contributing to GDP, export promotions and generations of large employment opportunities by generating new entrepreneurs. The article involves the study of working capital management at Canara Bank with a special focus on MSME sector. It also includes the study of financial tools used to appraise a loan proposal. The project involves analytical study and was completed through case study approach.

1. INTRODUCTION

The research is based on MSME- micro, small and medium enterprises, which was conducted at Canara bank. MSME ACT-2006: This act is to provide, facilitate, promote and develop and enhance the competitiveness of micro, small and medium enterprise and for matters connected there with or incidental there to.

MSME can be divided into manufacturing and service. Here an analysis is made on the arrival of the new proposals and ascertaining which proposal is eligible to avail the loans based on the specific regulations and criteria’s laid down by the bank. Understanding the different interest rates laid down by the banks for the general public. The main objective for the issue of the MSME loans by the government through the banks is to encourage the new entrepreneurs and enhance the growth which in turn effects the economic growth of the country and also in turn adds to the GDP of the country. This sector not only servers the urban areas but also, in the industrialization of the rural areas and also the backward classes.

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2. LITERATURE REVIEW

1) Sujit Singh, Ezutah Udoncy Olugu, Siti Nurmaya Musa, Abu Bakar Mahat, Journal of Intelligent Manufacturing 29(1), 1-18, 2018. Sustainability has become a necessity, partly due to the threats created by traditional manufacturing practices, and due to regulations imposed by stakeholders. Performance evaluation is an important component of sustainability, initiatives in manufacturing organizations. This study proposes a sustainability evaluation method for manufacturing SME’s using integrated fuzzy analytical hierarchal process and fuzzy inference system approach. Using a case study of manufacturing SME, the sustainability score of the organizations was elicited in accordance with the procedure. Consequently, a sensitivity analysis of the proposed method reveals the most important basic indicators affecting overall sustainability, identifying areas which decision makers should place special attention

2) Manjeet Kharub, Rajiv Sharma, Competitiveness Review: An International Business Journal 27(2), 132-160, 2017. This paper measures and analyses the competitive advantage of micro, small and medium enterprises based upon the Porter’s diamond framework indicating that the pharmaceutical sector is more competitive followed by food sector.

3) Himanshu Gupta and Mukesh Kumar Barua, Technological Forecasting and Social Change 107, 69-79, 2016. MSME’s can alter the economic scenario of any developing nation owing of their inherit ability to transform new ideas into innovations and thus successful business enterprise. However transforming the socio-economic status of a developing country is not an easy task. Manufacturing organizations especially MSME’s need to focus on important enablers of innovation to sustain global competition. This aims at identifying important enablers of technological innovation in the context of Indian MSME’s. Extant literature review and expert judgment are used to identify enablers of technological innovation.

4) Abhishek Jain, Rajbir Bhatti, Harwinder Singh, International Journal of Lean Six Sigma 5(3), 293-323, 2014, TPM implementation improves productivity and working efficiency of employees and also improves equipment effectiveness and a positive inclination toward company is registered. Therefore, equipment maintenance is an indispensable function in a manufacturing enterprise. In this highly competitive environment, manufacturing organizations should consider maintenance function as a potential source for cost savings and competitive advantage. SME’s must be considered as an engine for economic growth all over the world. A total of 148 papers related to TPM implementations in large-scale industries and SME’s is collected and analyzed and classified on the basis of their applications. The objectives of the study is to suggest a classification of available literature on TPM implementation, to

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identify the need of TPM implementation in SME’s, to identify critical observations on each category of classification, to identify the potential of SME’s in India.

3. COMPANY PROFILE

Canara Bank was founded in 1906 by Mr Ammembal Subba Rao Pai at Mangalore in Karnataka. The bank has gone through various phases of growth trajectory in over hundred years of its existence. The growth of the bank has been phenomenal, especially after nationalization in 1969 and attaining the status of a national level player in terms of geographical reach and clientele segments.

As of June 2014, the bank has expanded its domestic presence with 5,003 branches spread across all geographical segments. Keeping customer convenience at the forefront, Canara Bank provides a wide array of alternative delivery channels that include over 6,509 ATMs covering 3,658 centers. The bank has set up 102 hi-tech E-lounges in select branches with facilities like ATM, cash deposit kiosk with voice guided system, cheque deposit kiosk, self-printing passbook kiosk, Internet banking terminal, online trading terminal and corporate website access.

Canara Bank is in the Banks - Public Sector Bank. The current market capitalization stands at Rs 17,230.64 crore. It is listed on the BSE with a BSE Code of 532483 and the NSE with an NSE Code of CANBK. Its registered office is at 112, J.C. Road, Bangalore, Karnataka-560002.


4.1 Need of the Study

This study would involve working out and interpreting the financial ratios in working capital financing and term loans.

The study also involves the study of procedural formalities included in sanctioning the finance to its clients.

This study would also involve analyzing the balance sheets of their clients in determining their financial needs.

4.2 Objectives of the Study To Assess the advances To Process the advance To assure quality of project management To assure quality of products and services To identify problems To identify project risk To use the resources effectively and efficient

4.3 Sample Size and Sample Description

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Sample size-company 1

4.4 Research Instrument Observation method Document analysis method

4.5 Actual Collection of Data

Related articles

Newspapers

Magazines

In-house journals of banks

Internet

Personal interview or direct observations

5. DATA ANALYSIS AND INTERPRETATION CREDIT RISK FRAMEWORK IN CANARA BANK

The concept of risk rating was first introduced in Canara Bank in the year 2000 as a post sanction exercise for exposures to manufacturing activity with limits of Rs 8 crore and above. The guidance note of Reserve Bank of India on credit risk management issued in October 2002 prescribed that all the exposures (credit & investment) should be risk rated at the pre- sanction stage. Besides, for the Bank to move to Advanced Approaches suggested by Basel II it is necessary that all the exposures are risk rated and a history of ratings is built up. Risk rating of all borrowable accounts through Internal Risk Rating Models is mandatory requirement for moving to Adoption of Internal Rating Based Approach under Basel II. The Bank has established a system to measure Credit Risk of various borrower clients with greater reliability and satisfaction. Presently the Bank is using the following modules to Risk rate different levels of exposure and individual borrowers. Judgmental Rating Modules are used while rating individual exposures.

The Credit Risk Rating is conducted using any of the following 4 models as applicable:

Risk Assessment Model (RAM) - This model is applicable for the borrowable accounts with sanctioned limit of over Rs. 2 crore. The software is uploaded in SERVER located in HO EDP Bangalore. The software is developed by CRISIL and customized to suit our Bank's requirement. Users in the circles are able to access the model through intranet.

Manual Model - This is applicable for borrowable accounts with sanctioned limit of over Rs.20 lacs and not more than Rs. 2 crores. The model essentially addresses Business risks,

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Management risks and financial risks. Value statements have been provided under each trait to facilitate the users to uniformly give the scorings and grade will be allotted as under. The Manual model has separate models for risk rating borrowers pursuing industrial and trading activity. For new accounts i.e., those with less than 2 years dealings with us a separate model has been developed.

Small Value Model - This model is applicable for borrowable accounts with sanctioned limit of Rs.2 lakhs and not more than Rs. 20 lakhs For the purpose of using the model the limit sanctioned alone is the criteria. However, loans under Retail lending schemes other than Canara Trade, Retail Trade, Doctors' Choice Direct and Indirect Agricultural loans and loans to individuals where financial statements are not available are not covered under this model.

Portfolio Model - The Borrower accounts of aggregate limits below Rs. 2 lacs and borrowal accounts where financial statements are not available are risk rated under portfolio model, duly grouping the accounts as near homogenous pool based on category of borrowers and loan schemes/segment. The model covers rating of borrowal accounts classified under Priority and non priority segments. Exposure within Rs. 2 lakhs and Direct Agriculture Loans, Exposure to individual under Retail Lending Schemes (other than Canara Trade) , Priority Sector Loans (Other than Retail Trade, Doctor's Choice, Indirect Agriculture) and Non- Priority Loans where Financial Statements are not available.

Steps and Methodology for Appraisal

1. Application form: The financial institutions require that an entrepreneur seeking financial assistance should furnish detailed information about the project in a prescribed form. The form is sufficiently comprehensive and covers all important aspects of a project. It is so designed that an analysis of the information therein should enable the financial institution to judge the visibility of the project. It is essential that proper guidance is provided to the promoters for completing the application forms. The main contents of application form for financial institution to judge the viability of the project.

2. Site visit: Second step in project appraisal is site visit by appraisal team consisting of technical and financial officers. Sufficient notice of site visit should be given to promoters. The institutional visit team should pay particular attention to assessing suitability of site by ascertaining its distance from Railway station, National/State highway, sources of raw materials and market for end-products, timely availability of utilities, particularly, power should be assessed and, if necessary, discussion be held with State officials. Environmental protection arrangements should be carefully scanned to ensure that these would be up to Government specifications.

3. Scrutiny of standard application form: First step in detailed appraisal is in-depth study of information submitted by entrepreneur to see that

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Adequate data has been furnished against every item. Prima facie information furnished is correct. Information furnished under several items could be cross checked. Both in scrutiny of the preliminary information and the processing of the

application, personal discussion between the officials of the financial institution and the representatives of the borrowing concerns are both necessary and desirable.

Clarification/additional information called for wherever necessary.

4. Various aspects of project appraisal: The next step is detailed study of the major aspects of project. Generally the Project Appraisal is divided into the following appraisal Management Appraisal Technical Appraisal Commercial Appraisal Financial Appraisal

Table 5.1: Projection of Working Performance from 2015 to 2021

Working performance Projections

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

- Sales 2542.00 2906.00 3268.00 3630.00 3811.50 4002.08

- SVOP 2542.00 2906.00 3268.00 3630.00 3811.50 4002.08

- PBIDT 230.54 336.28 373.02 469.03 518.57 564.43

- Profit After Tax 153.89 224.47 248.99 313.08 346.14 376.76

- Depreciation 166.08 143.89 124.71 108.10 93.74 81.30

- Cash Profit 319.97 368.36 373.70 421.18 439.88 458.06

- PBIDT / SVOP (%) 9.07 11.57 11.41 12.92 13.61 14.10

- PAT / SVOP (%) 6.05 7.72 7.62 8.62 9.08 9.41

- Debt Equity Ratio 2.64 1.95 1.51 1.14 0.85 0.63

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- Net Block 1143.92 1000.03 875.32 767.22 673.48 592.18

- Year wise DSCR 1.92 2.21 2.24 2.53 2.64 2.75

- Average DSCR 2.38

- Tangible Net Worth 653.89 828.36 977.35 1190.43 1436.57 1713.33

- Total Outside Liabilities 1724.16 1611.91 1480.63 1360.42 1219.89 1079.20

- Current Assets 1176.19 1403.58 1562.75 1776.49 2014.58 2132.16

- Current Liabilities 890.84 945.27 980.67 1027.14 1053.29 1079.20

- Current Ratio 1.32 1.48 1.59 1.73 1.91 1.98

- TOL/TNW 2.64 1.95 1.51 1.14 0.85 0.63

6. SUGGESTIONS Banks place too much emphasis on collateral. Large amount of paper work is involved. The credit guarantee fund trust-initiative by the government of India. The lender should give more importance on the project and secure the credit facility

purely on the primary security of the asset financed. The MSMEs ministry should facilitate 24*7 TV or updates on the internet to keep the

entrepreneurs updated upon the happenings.

7. CONCLUSION

XYZ company private limited, has got the land on long term lease the landlord will offer the land as collateral security.

Technical and marketing director-provided with employment. Guarantee for the loan-personal guarantee given by the investor directors.

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50%-Exports(Foreign Exports) The risk factors are normal.

BIBILIOGRAPHY

Books Study material on ‘NPA and Recovery Management

Bank’s Circulars, Educative Series and other official publications Shreya’s – Canara Bank’s House Magazine Canara Bank Annual Report 2006-2007 Law & Practice of Banking – by E. Gordon & K Natarajan Banking Odyssey – The Story of Canara Bank – by M V Kamath

Websites

www.canarabank.com

www.canaranet.com

www.rbi.org.in/hme.aspx

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FINANCIAL PLANNING ON SALARIED EMPLOYEES AND TAX SAVINGS AT HINDUSTAN AERONAUTICS LIMITED. ~Sushmitha.V

Abstract

Financial Planning on Salaried Employees which is the main source in the organisation or company. Financial Planning becomes all the more critical for salaried person, the major share of contribution comes from the salary. It is important to understand the spending and saving patterns. The major benefit for a large number of salaried class is risk coverage provided by employer such as life insurance and health insurance. Tax saving should be incidental to the achievement of financial goals and not vice versa. Taxes need to be planned well in advance right in the beginning of the financial year. The current study is an effort to evaluate the tax planning measures adopted by the salaried income tax assesses of the state in the light of tax administration measures being implemented by the government.

1. INTRODUCTION

Introduction to Financial Planning on Salaried Employees and Tax savings.

1.1 Meaning

Financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives.

1.2 Objectives of Financial Planning

1. To ensure availability of funds whenever these are required. 2. To see that firm does not raise resources unnecessarily.

Financial Planning on Salaried Employees which is the main source in the organization or company. Financial Planning becomes all the more critical for salaried person, the major share of contribution comes from the salary. It is important to understand the spending and saving patterns. Some of the components of the salary structure includes: Basic salary, Allowance’s, Gratuity, Employees provident fund, professional tax, perquisites, etc.

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While considering saving of the taxes. It is important to analyse first whether paying of taxes is a better option. Tax saving should be incidental to the achievement of financial goals and not vice versa. Taxes need to be planned well in advance right in the beginning of the financial year.


1) JAYANT NAIR, Chief Financial Planners, the major share of contribution comes from the salary. The need for financial independence is a commonality across most of the salaried class people. It is important to understand the spending and saving patterns. Being productive alone is not sufficient, it is critical to be more efficient and effective moneywise.

2) SAVITA AND LOKESH GAUTAM (2013), Income Tax Planning, A Study of tax saving instruments international journal of management and social sciences research. The paper studied the options for investments for tax savings.

3) GALE & LEVINE, CONDON (2010), the increasing complexities of the financial landscape coupled with the economic difficulties illustrate the need that financial literacy should be a national priority. It can aid those who wish to devise effective financial education programs targeted at young people.

4) LAMBA (2010), emphasized that non finance people feel that finance is something complicated and beyond the scope if their understanding finance is an integral part of everyone’s life and financial principles are based on pure and simple common sense. The ability to take financially intelligent decisions is financial management.

5) LOPEZ (2006), Financial Analysis and Planning, which represent basic features that support organizational strategy, are nonetheless virtually non-existent in micro and small enterprises, which impose a constraint on the kind of financial decisions business people can take.


3.1 Statement of the Problem

Tax planning has assumed special importance for the salaried class of tax payers in view of the mounting pressures of inflation, price hike and their strict obligations to tax compliance. There are numerous reasons for this ranging from lack of awareness of taxation laws to complexities in the compliance formalities. The current study is an effort to evaluate the tax planning measures adopted by the salaried income tax assesses of the state in the light of tax administration measures being implemented by the government.

HAL borrows Rs 1000 crore to pay salaries, suffers lowest cash balance in 14 years. The Hindustan Aeronautics Limited (HAL) has for the first-time borrowed funds to pay salaries to its employees. The state-owned defence PSU has been facing dwindling finances which might lead to its operations coming to a complete standstill later this year due to lack of funds to make fresh purchases or pay its vendors, reports suggest. Their cash in hand is in the Negative.

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3.2 Objectives of the Research

To identify the elements of income and savings of the study. To study pattern of tax planning. To understand financial planning done in a company. To examine factors influencing the investment decision. To make appropriate suggestion and conclusion.

3.3 Types of Research

Analytical Research

In Analytical Research, the researcher has to use facts or information already available, and analyse them to make critical evaluation of the material. It involves the in-depth study and evaluation of available information in an attempt to explain complex phenomenon. Analytical. Research is primarily concerned with testing hypothesis and by analysing the facts or information already available.


For the purpose of the study, necessary information has been collected from both primary and secondary sources.

Primary data: The data were collected from employees who is working in the department of payroll and Tax.

Secondary data: This is reviewing of relevant information, which is already collected and making assumption based on the information collected. The Secondary data used in the study are:

1) Annual report of the HAL Company. 2) Financial records of the department. 3) Internal record of the company printed Journals or magazines. 4) Websites.

Articles and some of the information from old surveys.


Since HAL company is an Indian state- owned aerospace and defence and it is governed under the management of the Indian Ministry of Defence.

It was very difficult to collect the data about financial planning on salaried employees and tax savings. Hence, more effort had to put to collect the data. Financial planning becomes all the more critical for a salaried person. There was lack of in-depth information on the topic.

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Problems face while filing income tax returns are entering the correct details manually, Maintenance of Form 16 is very difficult because of different jobs, Mismatch in details of TDS, calculating how much deductions can be claimed.

4. ANALYSIS AND INTERPRETATION OF DATA

Tables, Graphs & Interpretation: -

In Hindustan Aeronautics Limited, for every 10 years the pay scale will be revised (will change) according to the salaried employees based on various divisions. The below data is the revised pay scales for salaried employees from 2017. The revised scales of pay effective from 1st January 2017 are as given bellow:

Table & Graph 4.1: Revised Scales of Pay

Grade Revised Scales of Pay (Rs.)

1 30000-120000

2 40000-140000

3 50000-160000

4 60000-180000

5 70000-200000

6 80000-220000

7 90000-240000

8 100000-260000

9 120000-280000

10 150000-300000

Dir./CEO 180000-340000

CMD 200000-370000

050000

100000150000200000250000300000350000400000

Revised scales of pay (Rs.)

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Interpretation: - Annual increment is granted @ 3% of the running basic pay in the 2007 pay scales. The resultant amount will be rounded up to the next Rs.10. Items which are considered as basic pay for different purpose.

Table & Graph 4.2: House Rent Allowances

City/Locality Rate per month (% of basic pay)

Delhi/Mumbai/Chennai/Barrackpore/Bangalore/ Hyderabad/ Pune

24%

Lucknow/Kanpur/ Nasik/ Agra/ Vizag 16%

Koraput/ Korwa/ Kasaragod 8%

Interpretation: -

For the period of 1st January 2017 to 9th November 2017, no changes would be made in the rates / quantum of HRA already drawn / payable. Effective from 10th November 2017, eligible officers will be paid house rent allowance (HRA) on the running basic pay in the revised scales of pay (2017), based on the classification of cities as notified by the government of India, subject to the applicable rules & guidelines, at the above rates.

Service weightage pay and special pay: -

Workmen promoted to grade-1 on or after 1.1.2017 and who are drawing the service weightage pay and special pay as per the provisions of para 10.3 of PC No. 687 dated 10.8.2010, would continue to draw the same quantum of service weightage pay and special pay. No consequential would be payable on the service weightage pay and special pay.

24%16%

8%

Rate per month (% of basic pay)

Delhi/Mumbai/Chennai/Barrackpore/Bangalore/ Hyderabad/ pune.Lucknow/Kanpur/ Nasik/ agra/ vizagKoraput/ korwa/ Kasaragod

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Perquisites, allowances & benefits: -

The existing system of “cafeteria” Approach for payment of perquisites & allowances to officers will continue, the gross amount payable as perks & allowances will be 35% of the revised basic pay w.e.f. 1.1.2017. Officers will be able to choose from a given set or cafeteria of perquisites & allowances.

Pay fixation on promotions effected on or after 1st January 2017: -

One notional increment equal to the increment being drawn by the officer in the revised pay scale before such promotion would be granted and pay fixed in the promoted scale and rounded off to the next Rs.10. in case the amount so arrived at is less than the minimum of the promoted scale, the pay will be fixed at the minimum of the promoted scale.

Under Cafeteria System: -

The two types of allowances:

a) Compulsory allowance, which would be applicable in respect of all officers. b) Allowances which are optional and which can be chosen by the officers.

Tax Savings

In respect of company owned accommodation provided to officers, the company would bear the income tax liability on the ‘non- monetary perquisite’, of which 50% shall be loaded within the 35% of basic pay payable as perks & allowances to such officers.

In this regard, the perquisite tax on account of company accommodation will be assessed and 50% of the tax will be deducted from the officers (as against 100% presently). The remaining 50% of the tax will be paid by the company. This will be effective from 10th November 2017.

5. FINDINGS

Today H.A.L. has 14 production division/unit. Seven at Bangalore and one each at Nasik, Koraput, Kanpur, Lucknow, Korwa, Hyderabad and Barrackpore.

House rent recovery from workmen who are allotted quarters in the company township is affected at the rate of 7 1/2 % of the running basic pay in the 2007 scales of pay up to Rs. 10200

Officers(grade) Rate of % on basic pay

1 to 6 44

7 to higher 42

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and at the rate of 10% of the running basic pay in the 2007 scales. The perquisite tax on account of company accommodation will be assessed and 50% of the tax will be deducted from the officers (as against 100% presently). The remaining 50% of the tax will be paid by the company. Annual increment will be granted at the rate of 3% of the revised running basic pay and the resultant amount will be rounded up to the next Rs.10. Annual increment would continue to be granted as per the existing procedure / practices.

6. SUGGESTIONS

Since the tax is the main source of income for the government, and the salaried class paying their tax regularly (tax deduct at source), the government can come forward to implement some of the schemes.

HAL today needs to develop capabilities essential to become a globally competitive and a high growth organization. The success of each of the current Projects /Programs and those in the pipeline hinges on the availability of capable leadership and managerial engineering skills, besides highly skilled work force. Bring in flexibility working hours to reduce the problems associated with lengthy working hours.

7. CONCLUSION

The purpose of financial planning is to determine where the firm has been, where it is now, and where it is going. Salaries are paid by organisations to their employees in exchange for the services rendered by them. The salary paid to employees comprises of a number of different components, such as basic salary, allowance, perquisites, etc. Tax planning is nothing but tax avoiding formulates, it is a great art, which does not break law, yet, its bonafide. It helps in saving the tax, the salient aspect to so call good tax planning is,

i. Bonafide nature of arrangements. ii. Provision that laws are not violated.

It is found that on overwhelming majority of the salaried employees’ opinion regarding direct tax imposed is high and very high. It is concluded that the salaried employees are reducing the tax liability. The planning is the arrangement of one’s financial affairs in such a way that without violating in any way the legal provisions, full advantage is taken to allow tax exemptions, deductions, concessions, rebates, allowances and other reliefs or benefits permitted under the income tax act.

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BIBILIOGRAPHY

Books

Hindustan Aeronautics Limited magazines and Hand books, A Research Methodology – C.R. KOTHARI, Financial Planning (Text Book) – AMAR PANDIT.

Websites

https://en.m.wikipedia.org/wiki/Hindustan_aeronautics_limited

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A STUDY ON PERFORMANCE MANAGEMENT AT LAPP INDIA PRIVATE LIMITED ~SUPRABHA. M

Abstract

This study investigates the concept of Performance Management and the level of performance of each employee which will lead to the productivity in the organization. The study is descriptive in nature and secondary data’s like company report, web sources, and performance practices will be more effective in the organization. The study was carried out at LAPP INDIA Pvt. Ltd Jayanagar, Bangalore. The main objective of the study was to find the employee’s performance and employees expectations in the organization. It was found that performance management systems is indeed impacting the lives of all the employees of LAPP INDIA Pvt. Ltd in a positive way by simplifying the basic function of Human Resource Management. The benefits of having Performance Management in an organization is to ensure that the employees understand the importance of their contributions to the organizational goals and objectives.

1. INTRODUCTION

LAPP India is a 100% subsidiary of LAPP Group, a leading supplier of integrated solutions and branded products in the field of cable and connection technology. Lapp are the pioneers in introducing the concept of “Reliably Connecting the World” with our unbeatable range of cabling products and solutions. Lapp started operations in India in 1996 by setting up state-of-the-art manufacturing unit at Jigani, Bangalore. In 2012, LAPP India set up its second manufacturing unit at Pilukedi, Bhopal to primarily produce single core cables catering to the Building segment. Lapp further expanded their production capacity in 2014 by doubling the production area in Jigani and adding a new multi core line in Bhopal with a total investment of over 5 Million Euros. Today, Lapp is the third largest manufacturing facility. Lapp manufactures 130,000 km of control, instrumentation, power and data cables along with connectors, accessories and End to End Systems.

At LAPP, they ensure, where customers are. LAPP India has pan India presence with dedicated regional Sales & Marketing offices in Delhi, Mumbai, Kolkata, Chennai, Pune and Bangalore. In addition to that, Lapp have 23 sales offices and a strong network of over 130 across India. This study focuses on analyzing and exploring the impact of performance management system on employee performance. The organizational performance criteria should include profitability, productivity, marketing effectiveness, customer satisfaction, but also employee morale. In this

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perspective, employee performance is tightly related to organizational performance, effective and efficient employee performance will positively influence organizational performance. On a framework of talent management which consists of planning, recruiting, performance, learning, career development, succession planning, compensation, and measuring and reporting. In order to organize a company effectively, companies must rethink how they hire, train and reward their employees, therefore the employees could be encouraged to be competitive. Undoubtedly, there is an important factor is human in organizations.

2. REVIEW OF LITERATURE

1) Lebas (1995) at an organizational level of analysis, an organization that is performing well is one that is successfully attaining its objectives; in other words, one that is effectively implementing an appropriate strategy.

2) Appelbaum (2016) claims performance which is a function of employees’ Ability, Motivation and Opportunity to participate. This means that an organization will benefit most. If it organizes the work process in such a way that non-managerial employees have the opportunity to contribute discretionary effort and it could be achieved by giving them autonomy in decision making.

3) Otley (2017) a general performance management considers such problems: “What are the key objectives that are central to the organization’s overall future success, and how does it go about evaluating its achievement for each of these objectives.



Performance management is important for an organization, as it helps organizations ensuring employees are working hard to contribute to achieving the organization's mission and objectives. Performance management sets expectations for employee performance and motivates employees to work hard in ways that is expected by the organization.


To analyze the employees perception towards working climate of the organization. To identify the barriers to effective performance of the employees in the organization. To study the factors promoting personal growth and advancement in the career of the

employees. To study the factors that helping the employees in identifying the knowledge and skills

required for performing the job efficiently. To identify the parameters boosting the performance of the employees.

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Exploratory research

A research conducted for a problem that has not been studied more clearly, intended to establish priorities, develop operational definitions and improve the final research design. Exploratory research helps to determine the best research design, data collection method and selection of issues.


Primary data

It collected with the help of a structured Questionnaire which had a total of 20 questions. The first part of the questionnaire captured the information relating to the Demographic profile of the respondents such as the Age group, Gender, Educational qualification, Designation etc. It is original research that is obtained through first-hand investigation. It includes information collected from interviews, experiments, surveys, questionnaires, focus groups and measurements. This project used questionnaire to collect primary data.

Secondary data

Secondary data can be found in publications, journals, and newspaper articles, company records and articles written by experts in the field etc., the Secondary data for which this research was obtained from textbooks, brochures and internet. Qualitative data can be collected by using case studies, questionnaires, interviews, focus groups, surveys, and document analysis. A questionnaire was used for collection of data.


Lengthy and complex. Generation gap Contradictory and misleading opinions in the performance management file. Demeaning the communication system between employer and employe

4. DATA ANALYSIS AND INTERPRETATION

Q1.When your performance has met minimum standards, your manager discusses with you the reasons for that.

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Table & Graph 4.1: Performance met Minimum Standards

Strongly agree 9 18%

Agree 29 58%

Disagree 8 16%

Strongly disagree

4 8%

TOTAL 50 100%

Interpretation

Out of 100% respondents, 18% of employees are strongly agree that their performance has met minimum standards and the manager discusses with reasons in LAPP INDIA, 58% of employees are somewhat agree with it and 16% of employees disagree with this statement and 8% of employees strongly disagree with this statement. Hence the majority of the employees are agreeing with this statement.

Q2.Will you agree whether your performance has significant impact on your salary?

Table & Graph 4.2: Impact of Performance on Salary

Strongly agree 4 8%

Agree 31 62%

Disagree 13 26%

Strongly 2 4%

01020304050

Stronglyagree

Agree Disagree Stronglydisagree

TOTAL

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disagree

TOTAL 50 100%

Interpretation

Out of 100% respondents, 8% of employees are strongly agree, 62% of employees are somewhat agree with whether their performance has significant impact on their salaries and 26% of the employees disagree with this statement and 24% of employees are strongly disagree with this statement. Hence the majority of the employees are agreed with this statement.

Q3. I believe the company has a great future and would you recommend this organization to any friends or family members as a great place to work.

Table & Graph 4.3: Recommend this Organization to Friends & Family members to Work

Strongly agree 11 22%

Agree 25 50%

Disagree 9 18%

Strongly disagree 5 10%

TOTAL 50 100%

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Interpretation

Out of 100% respondents, 22% of employees are strongly agree with this statement, 50% of employees are somewhat agree in believing the company has a great future and they would like to recommend this organization to their friends or family members as a great place to work and 18% of the employees disagree with this statement and 10% of employees are strongly disagree with this statement. Hence the majority of the employees are agreed with this statement.

5. FINDINGS

Promotions are based on performance management systems. The organization regularly gives feedback about the performance of the employees. Senior management encourages the ideas and innovations of the employees in the

organization. According to the researcher, performance has significant impact on salaries. According to the researcher, the performance and achievement are rewarded on time. According to the researcher, it is found that the performance management system helps

people to set an achieve meaning full goals.

6. SUGGESTIONS

Performance approach should be unique to individuals. Regular feedbacks can improve overall performance and also motivate the team. Need for fact based periodic performance dialogues based on dash board. Performance depicts only on generating more revenue to our organization and more

product knowledge. Employee’s mindset has to be changed. KPI setting should be a mix of leading, lagging and behavior indicators. Measure employee’s effort score.

7. CONCLUSON

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Every organization performs its task with the help of resources as men, machine, materials and money. Except manpower other resources are non-living but manpower is a live and generating resource. Manpower utilizes other resources and gives output. If manpower is not available then other resources are useless and cannot produce anything. Out of all the factors of production manpower has the highest priority and is the most significant factor of production and plays a pivotal role in areas of productivity and quality. The human resource is critical and difficult to manage. It is because human behavior is highly unpredictable. It differs not only from individual to individual but often on the part of same individual at different points of time.

BIBILIOGRAPHY

Company – lapIndia.lappgroup.com OLFLEXR CONNECT. Servo.lappindia.com Website www.google.com Annual company magazine https://lappindia.lappgroup.com/ https://lappindia.lappgroup.com/news/cableworld-magazine.html

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A STUDY ON PERFORMANCE APPRAISAL AND ITS EFFECTIVENESS AT AEGIIS PVT LTD ~Umme Sufiya

Abstract

HRM is dedicated to develop a suitable corporate culture. Programmes are designed and implemented to reflect the core values of the enterprise. HRM is always deep-rooted comprehensive activity of an organization. Competence and capability of the employees will be improved by adopting scientific methods which enable them to play their assigned roles effectively. HRM satisfies those expectations which are not satisfied by conventional personnel management. According to Edwin Flippo, Human resource management is defined as “planning, organizing, directing, controlling of procurement, development, compensation, integration, maintenance and separation of human resources to end that individual, organizational and social objectives are achieved.”

1. INTRODUCTION

People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Therefore, performance management and performance appraisal is necessary to understand each employee's abilities, competencies and relative merit and worth to the organization. Performance appraisal rates the employees in terms of their performance. Performance appraisal takes into account the past performances of the employees and focuses on the improvement of the future performance of the employees.


1) Cummings, (1973) in an article titled, "A Field Experimental Study of the Effects of Two Performance Appraisal Systems", reported the results of a field experiment designed to test the effects of manipulating several elements of an operative level performance appraisal system.

2) Taylor and Wilsted, (1974) in their article titles "Capturing Judgement Policies: A Field Study of Performance Appraisal" used mathematical models of judgement policy for evaluating 625 performance reports during a single rating cycle.

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3) Cederblom, (1982) in his article titled, "The Performance Appraisal Interview: A Review, Implications and Suggestions" reviewed the research on performance appraisal interview in the context of recent performance appraisal models.

4) Charles J Gibson and Frederick W Hobson, (1983) in their article titled, "Policy capturing as an approach to understanding and improving performance appraisal" states that the research dealing with the use of policy capturing as a technique to understand and improve performance appraisal process.

5) Ilgen and Favero, (1985) in their article titled, "Limits in Generalization from Psychological Research to Performance Appraisal Processes" states that most attempts to understand the performance appraisal process have been borrowed from social psychology.

6) Ellen V Rubin and Amani Edwards, (11 January 2018) in their article titled, "The Performance of Performance Appraisal Systems: Understanding the Linkage between Appraisal Structure and Appraisal Discrimination Complaints" states that employee perception of the fairness of performance evaluations are critical to the success of any appraisal system.



1. To study identification of the techniques of performance appraisal systems in Aegis Pvt Ltd.

2. To study employee attitude towards the present appraisal system. 3. To identify the effectiveness of performance appraisal system for employees. 4. To study the expectations of the employees from the firm with the appraisal schemes

provided to them. 5. To provide suggestions and recommendations to improve the performance appraisal

effectiveness.

3.2 Need & Importance of the Study

1. This study would enable the researcher to have an idea on the various performance appraisal system used in Human Resource Management at Aegis Customer Support Services Pvt. Ltd.

2. This study would help the organization know the effectiveness and importance of each of the performance appraisal scheme.

3. This study will help the researcher and the company to bring in new changes to attract, maintain and build a long term relationship with the employees who are efficient and effective for the organization.


Few employees sometime felt disturbed, as they were busy with their job.

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The sample size was restricted to 100 employees. The answers given by the respondents highly depend on the mood and interest and thus

accuracy fluctuates sometimes. The employees were biased to give the information. Time constrain was a serious problem as time was limited.

3.4 Type of Research

Exploratory research study is conducted and a sample survey method is employed. Here, the study is conducted on a sample drawn from the population and therefore inferences are drawn from the population and thereby inferences are drawn about the measures taken to manage performance appraisal.

3.5 Collection of Data

The data is collected based on two sources namely;

Primary Data: To collect the first hand information related to my study, necessary observation is done. Questionnaire is the basis of collection of primary data. It is chosen because of its simplicity and reliability. The questionnaire is distributed to the employees and information is obtained. This serves as a basis of analysis.

Secondary Data: The information about secondary data is collected through company website, text books, internet and other projects.


4.1 Analysis

1. 39% of the respondents were neither satisfied nor dissatisfied with the current performance appraisal system, 38% of the respondents were satisfied with the current appraisal system, 17% of the respondents were dissatisfied by the current performance appraisal system and 6% of the respondents were highly satisfied with the performance appraisal system in the organization.

2. 63% of the respondents agree that the performance appraisal is improving the employee’s motivation and job satisfaction, 17% of the respondents strongly agree that the performance appraisal is improving the employee’s motivation and job satisfaction, 13% of the respondents disagree that the performance appraisal is improving the employee’s motivation and job satisfaction and 7% of the respondents strongly disagree that the performance appraisal is improving the employee’s motivation and job satisfaction.

3. 70% of the respondents agree that the existing performance appraisal system is helpful in the overall development of the employees, 12% of the respondents partially agree that the existing performance appraisal system is helpful in the overall development of the employees, 9% of the employees neither agree nor disagree that the existing performance appraisal system is helpful in the overall development of the employees and 9% of the

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respondents disagree that the existing performance appraisal system is helpful in the overall development of the employees.

4. 73% of the respondents partially agree that the self-appraisal system proves to be effective while conducting performance appraisal, 25% of the respondents neither agree nor disagree that self-appraisal system proves to be effective while conducting performance appraisal and 2% of the respondents agree that self-appraisal system proves to be effective while conducting performance appraisal.

5. 66% of the respondents say that all of the above mentioned factors are the biases for performance appraisal, 20% of the respondents say that total output is the biases for performance appraisal, 10% of the respondents say that quality of work is the biases for performance appraisal and 4% of the respondents say that behavioral efficiency is the biases for performance appraisal.

6. 54% of the respondents feel that they are really happy with the performance appraisal system of the organization, 29% of the respondents feel that they are really very happy with the performance appraisal system of the organization, 13% of the respondents feel that they are neither happy nor unhappy with the performance appraisal system of the organization and 4% of the respondents feel that they are not really happy with the performance appraisal system of the organization.

4.2 INTERPRETATION 1. The majority of the respondents were neither satisfied nor dissatisfied with the current

performance appraisal system of the organization. 2. Majority of the respondents agree that the performance appraisal is improving the

employee’s motivation and job satisfaction. 3. The majority of the respondents agree that the existing performance appraisal system is

helpful in the overall development of the employees. 4. The majority of the respondents partially agree that the self-appraisal system proves to be

effective while conducting performance appraisal. 5. The majority of the respondents say that all of the above mentioned factors are the biases

for performance appraisal. 6. Majority of the respondents feel that they are really happy with the performance appraisal

system of the organization.

5. FINDINGS

From the survey conducted, majority of the employees are neither satisfied nor dissatisfied with the current performance appraisal system of the organization.

From the survey conducted, majority of the employees agree that the performance appraisal is improving the employee’s motivation and job satisfaction.

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From the survey conducted, majority of the employees agree that the existing performance appraisal system is helpful in their overall development.

From the analysis it can be understood that, the majority of the employees partially agree that self-appraisal system proves to be effective while conducting performance appraisal.

From the analysis it can be understood that, the majority of the employees say that total output, behavioural efficiency and quality of work are the factors based on which their performance appraisal is done.

The survey shows that, the majority of the employees agree that they are really happy with their performance appraisal system in the organization.

6. SUGESSTIONS

Implement more methods of performance appraisal and update the employees about the type of method used for performance evaluation.

The whole performance appraisal should be kept transparent and free from bias in the future.

Suggestions could be obtained from employees regarding framing the performance appraisal system.

The company should concentrate more on individual development.

Importance must be given to improve the competency of the employees.

The organization must make sure that the supervisors and the employees have good and proper interactions, this will encourage them in open communication.

Connect employee tasks and goals to the organization's strategic plan.

7. CONCLUSION

Performance appraisal may be understood as the assessment of an individual's performance in a systematic way. The performance being measured against such factors as a job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgement, versatility and health. It also helps in developing strength and rectifies weakness of employees.

The study reveals that all the employees are not aware of the performance appraisal system. As the performance appraisal system motivates the employees to achieve the goals, the management should make the system of performance appraisal more clear to the employees.

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Aegis Pvt Ltd. has been conducting performance appraisal from past years from its formation. Employees were co-operative and fully supporting the performance appraisal in the institution and it was found to be highly effective in the employee's performance.

The organization has been running successfully for past several years and has created a good name among its customers and society. People having poor background are given training and are provided with jobs. Performance appraisal can be conducted more effectively by using the right tools and properly reviewing and updating the performance appraisal program. Suggestion from employees and experienced personnel can further enhance and make the performance appraisal an ideal evaluation system.

BIBILIOGRAPHY

Websites

o www.youarticlelibrary.com o www.googlescholar.com o www.ukessays.com o www.aegisglobal.com o www.whatishumanresource.com o www.tandfonline.com

Books

P Subba Rao, Himalayan Publisher, Pg., 132-151.

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DHII

Vol. XIX, September 2019 Journal Dept. of MBA, MCA and M.Com (FA)

Jyoti Nivas College Autonomous

COMPARTIVE STUDY BETWEEN MUTUAL FUNDS AND ULIPS ~Vaishnavi S

Abstract

This study was undertaken at Karvy Stock Brokering Limited at Bangalore. The study mainly deals with providing advisory services to investors. Today each and every person is aware of each and every financial investment proposal. Markets of equity shares, bonds and other financial instruments and also other income earning instruments like real estate, gold, derivatives etc. have become mature and information driven. They tend to maximize their return with minimizing the risk. At the same time ULIPS being the investment instrument is good for the people who are interested in staying for a longer period which will be around years. Also, in the upcoming years, this will grow faster. ULIPS are actually becoming popular compared to them. It is good and advisable for the people who are investing in ULIPS policies as they will be providing higher rate of returns compared to other traditional policies of insurance companies.

1. INTRODUCTION TO MUTUAL FUNDS

Mutual fund is a pool of common funds invested by different investors, who have no contact with each other. Mutual funds are conceived as institutions are providing small investors with avenues of investments in the capital market. Here the investors share the common financial goal, like capital appreciation and dividend earnings. The money thus collected is then invested in the capital market instruments such as shares, debentures and foreign market. Investors invest money and get the units as per the unit value which is called Net Asset Value (NAV). Mutual fund is known as the most suitable investment for a common man as it offers an opportunity to invest as in diversified portfolios which has a good research team which is professionally managed by the Indian stocks as well as foreign market.

Since small investors generally do not have adequate time, knowledge, experiences and resources for directly accessing the capital market, they have to rely on an intermediary which undertakes informed investment decisions and provides consequentiality benefits of professional expertise. The advantages for the investors are reduction in risk, expert professional management, diversified portfolios and liquidity of investment and tax benefits. By pooling their assets through mutual funds, investors achieve economies of scale. The interest of the investors is protected by the SEBI, which acts as a watchdog. Mutual funds are governed by SEBI (Mutual funds) regulations 1993. For a Finance Business, the Mutual Fund industry is more like a film

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star. It is known that Mutual Fund Industry is the smallest segment of the industry, it is glamorous and it is also the young industry where the rules of the game are changed almost every day.

1.1 Introduction to Unit Linked Insurance Plans (ULIPS)

Insurance comes in different forms and shapes worldwide. A ULIP is one in which the customer is provided with the cover of life insurance and the premium paid is invested either in debt or equity products or combination of both. In other words, it provides opportunity to the investors to earn a return on the premium which he is paying regularly and also at the same time enables the buyer to secure some protection to his family in the event of his untimely death, in this event his nominees would normally receive an amount that is higher of which is higher of which the sum assured or the value of the units or investments.

ULIP is a life insurance product, which provides risk cover for the policy holder along with the investment options to invest in any number of qualified investments such as stocks, bonds or mutual funds. ULIPS works on the lines of mutual funds. The premium paid by the clients is used to buy units in various funds floated by the insurance companies. Units are bought accordingly to the plan chosen by the policy holder. On every additional premium, more units are allocated to their funds. As and when the client desires, the policy holder can also switch among the funds. The limit is set by the companies for switching from one policy to another while some companies do not set any limit. If the number exceeds, a certain amount is charged. Those investors who wish to closely track their investments, ULIPS allow policy holders to closely monitor their portfolios. They also offer the flexibility to choose or switch your capital between funds with varying risk-return portfolios. Individuals with medium to long term investment horizons and ULIPS are for those individuals who are ready to invest for a relatively long period of time. Investors of all life stages can invest in this plan as it offers a number of variety of plans which can be opted depending upon the life stages you are in and your needs and your financial liabilities at that point of time.


1) IPPOLITO’S (1989):

Results and conclusions are relevant and consistent with the theory of efficiency of informed investors. He invested the risk adjusted return for mutual fund industry was greater than zero and attributed positive alpha before load charged and identified that fun performance was not related to expenses and turn overs as predicted by efficiency arguments.

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2) CONRAD’S CICCOTELLO AND TERRY GRANTS (1996):

Study identified negative correlation between assets size fund and the expense ratio. The results brought out the larger fund had lower expenses acquire information for trading decision and were consistent with the theory of information pricing there have been several studies on the existence of economies of scale and scope in the financial sector in general and mutual fund industry in specific.

3) J. SCHIRO (2006):

The insurance industry must deal proactively with all the external forces changes in natural, economic, social and political environment, shifting stake holders’ expectations and wide-reaching technological innovations so that if it can continue to assume and expand its role in the economy. Regulation can make a major contribution towards meeting this goal, but it can also be an obstacle regulatory response to external forces represent second order risk in and of themselves. Legislatures and regulators must avoid ad hoc, damage control regulation that is made up on the spur of the moment and both must be wary of the consequences of the regulation through litigation. With respect to insurance, regulation must be specifically geared towards the business it regulates, that is, insurance, not banking or other financial services.

4) RICH FORTIN AND STUART MICHELSON (1995):

Studied 1326 loads funds and 1161 no load funds and identifies that no load funds had lower expense ratio and so as suitable for 6 years and load funds that higher expense ratio so has 15 year of average holding period. No load funds offer superior results in 19 out of 24 schemes. He concluded that a mutual fund investor has to remain invested in a particular fund for a very long periods to recover the initial front-end charge and achieve investment results similar to that of no load funds.

5) MURRAY AND WHITE (1983):

Find evidence of both economies of scale and scope in British Colombia credit unions and point out that regulation limiting the growth and diversification of these unions could lead to higher operating cost.

6) A STUDY OF US FUNDS BY REA, BRIAN AND REID (1999):

For the year 1998 shows, again strong inverse relationship between operating expense ratio and asset size of similar funds further, funds with assets increases overtime have also shown decrease in expense ratio depending on the extend of the increase.

7) CHEN ET AL (2005):

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Shows that organizational dis economies are particularly pronounced for funds that play small gap stocks. Regarding price competition amongst funds there exist divergent views.

3. COMPANY PROFILE

In Summer of 1982, one fateful evening 5 young men who worked for a renowned chartered accountancy firm decided that it was time the struck out on their own to create an enterprise that would someday become an iconic name in the financial services space. This company offers stock broking, depositary participant, distribution of financial products which includes mutual funds, bonds and fixed deposits, commodity broking, personal finance advisory services, merchant banking and corporate finance, wealth management, NBFC where they give loans to individuals, micro and small businesses, data management, FOREX and currencies, registrars and transfer agents, data analytics, market research among others.

Karvy Businesses entities address a heterogeneous swathe of population from the super-rich to nouveau riche, the middle class, the lower classes, the SEC (Special Economic Classification), urban and rural folks. All of whom either making a living through large corporate world, SMEs, professional services, traders, farmers, labour, blue- and white-collar jobs and the government. Another key feature of Karvy has been its ability to offer leading edge advice based on incisive ideas that are strongly rooted in high quality research on every conceivable aspect of investments be it equities, FOREX, commodities, bonds, fixed returns, debt instruments or any other instrument grade asset class. The customer has always been at the centre of every initiatives.



To study on investments into share market and what portion does investor invests from their income.

To study the investors of how long have they been investing in mutual funds? To study the behavior of the investors whether they prefer Mutual Funds or ULIPS. To study on the investor describing their financial status.


Mutual funds are the avenues for common investors to reap the benefits of share market performance. Investing in equity directly by investors is fraught with highest level of risk and uncertainty. Retail investors do not actively participate in share market but inflation edged investment return demands the exploitation of the equity market as an investment avenue. Therefore, there is a necessity to create awareness of the utility of investing in mutual fund schemes to enjoy a return which will be inflation adjusted real returns. Therefore, this project is taken on to assess the investor’s perception of mutual fund investment.

4.3 Need and Importance of the Study

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The study is conducted to understand the difference between mutual funds and Unit Linked Insurance Plan. Here both the investments are similar but the process may slightly differ. Both the investments have returns as per the percentage agreed. The need for this research is to give awareness which is the best investment and gives more returns for short term and long term. It also helps to analyse the behaviour of investors in different stages.


Apart from details about mutual funds and ULIPS it has some limitations due to that all the details could not be published and displayed.

Limitations of the study can be pointed as follows:

Time constraints: - Due to shortage or less availability of time it may be possible that all the related and concerned aspects may not be covered in the project.

Analysis done in limited to the availability of data. The results are based majorly on primary data which has its own limitations. The conclusions derived from the report cannot be generalized. Sample size taken is small and it is not sufficient to predict the result with 100%

accuracy.

5. FINDINGS

Many of the investors are aware of mutual funds but most of their perception is not positive due to lack of information about the mutual fund schemes.’

Highest number of investors is retired persons. Highest number of investors are from the age group above 40. Majority of the people whose income is 4, 00,000 are investing their money in the share

market. Most of the investors monitor their investments on monthly basis. Investors invest 6% of their annual income in mutual funds. Investors are mainly concerned with the risk factors of mutual funds. The investors who have invested in mutual funds mainly go for it because of liquidity

and tax exemption. Most of the respondents have adequate knowledge about the mutual funds and ULIPS

and that is why they probably don’t invest in mutual funds and ULIPS. There are numerous schemes of mutual funds about which common man is not aware

of.

6. SUGGESTIONS

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The present performance of the Mutual Funds is very good compared with the other investments. And the companies should cash in on this opportunity. The performance of the Mutual Funds can be published widely.

Other newspapers and magazines, journals. This will induce the investors towards investing in Mutual Funds.

Case study of the investors who have been benefitted in investing in Mutual Funds can be published in the newspapers, magazines and journals.

As selling of financial products requires well trained people, the companies must provide proper training to the agents and financial planners. For this training institute must be opened in this township.

Continuous brand building activities must be carried out by the companies. For this purpose, companies should initiate some of promotional activities like ads in newspapers, magazines, journals.

Educational institutes must start some professional courses on Mutual Funds and other finance specialized courses. This will create some sort of awareness about the Mutual Funds.

Mutual Fund companies must tie up with other financial institute like banks, post office for reaching to the mass people. Because these financial institutes have tremendous reach to the mass people in our country. As a result, Mutual Fund companies can have easy access to the common people. The companies must go in for this kind of strategic alliance with other companies as well. Because strategic alliance not only benefit the companies but help in developing the market also.

For opening of new savings bank account, certain units of Mutual Funds of a company (Strategic Alliance Company) can be given at free of cost to the account holder. This will no doubt make the people more familiar with the concept of Mutual Funds.

On buying of one or some life insurance policies, again certain units of Mutual Fund can be given at free of cost.

Again, each car loan or other kind loan of a certain amount will get the loan taker certain units of Mutual Funds absolutely free of cost.

BIBILIOGRAPHY

1. www.karvyonline.com 2. https://www.policybazaar.com/life-insurance/ulip-plans/ 3. https://www.hdfclife.com/insurance-knowledge-centre/about-life-insurance/what-is-ulip-

plans 4. https://www.indiainfoline.com/article/news-top-story/aum-of-indian-mf-industry-crosses-

rs-17-lakh-crore-in-fy2017-117041300472_1.html 5. http:/shodhganga.inflibnet.ac.in/bitstream/10603/2160/8/08_chapter%201.pdf 6. https://groww.in/blog/top-20/mutual-fund-houses-india/

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7. https://economictimes.indiatimes.com/mf/mf-news/mutual-funds-add-rs-5-4-trillion-in-2018-aum-crosses-rs-22-trillion/articleshow/62348605.cms

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SECTION III (M.COM (FA))

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Foreword “Research is Creating New Knowledge”

- NEIL ARMSTRONG

This journal aims to encourage students towards deeper independent study and intensive analytical thinking whilst attempting to gear the students to develop practical skills that can be harnessed at higher levels of academia.

Our students of M.Com (FA) department, as a part of their summer internship had a chance of exploring the fields of Finance, Accounting, Auditing and Taxation, but majority of research focused on Finance as their area of specialization. This exposure to these fields gave them an opportunity to face the real corporate world. This shows their tremendous hardwork and patience put forth in these research articles. So, we are very much delighted in publishing four research papers of our students in the post graduate journal Dhii 2019.

The third section of DHII comprises of 4 papers in the field of finance, banking, accounting and stock market. Ms. Anbu Selvi, has done her project on “NPA MANAGEMENT AT THE SOUTH INDIAN BANK LTD.,” This article talks about how NPA has affected the banking businesses. It tries to understand the performance trend of NPA at SIB as well on the sector basis of the bank. This paper provides feasible recommendations to avoid NPA at SIB.

Ms. Deepa Yoganandan, carried out research on “ANALYZING THE FINANCING DECISIONS OF BRIGADE COMPANY.” In this article the student discussed on how a firm can make a good financial decision in order to maintain optimum capital structure which helps the shareholders in making their investment decision in a firm by looking at its market value, EPS and leverages.

Ms. Shraddha, focused her internship on “COMPARATIVE ANALYSIS OF BANK RECONCILIATION STATEMENTS.” This report debates on how business concerns maintain a record of all their banking transactions in the bank column of the cash book. It helps to reduce the work load and it is carried out using specialised accounting software’s for a successful transaction.

Ms. Sonia. F, in her article on “THE PERFORMACE EVALUATION OF MUTUAL FUNDS”, evaluated whether Mutual Fund is an effective form of investment or not, and how they can

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diversify their investments in different portfolios. Also, on how the investor gets capital appreciation when he/she evaluates the performance of the funds before investing in Mutual Funds and also helps in analyzing the risk and return.

In conclusion, I assure you that all our student researchers admit to the fact that research is all about search of a different subject which none are aware of and it leads to lots of effort in creating a new knowledge.

Dr. Jahnavi M Head, Department of M.Com (FA) Jyoti Nivas College Autonomous Bangalore

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A STUDY ON NPA MANAGEMENT AT THE SOUTH INDIAN BANK LTD., Bangalore ~Anbu Selvi

Abstract Non-performing Asset is one of the prevalent problem of Indian Banking sector. For the past three decades, the banking system has several outstanding achievements to its credit. Many banks are facing the problem of NPAs which hampers the business of the banks. Nonperforming assets are a drain to the banks. The following study tries to understand the performance, the trend of NPA and sector wise NPA of South Indian Bank (SIB) and the study also highlighted on various important factors contributing to NPAs, reasons for high impact of NPAs in SIB and feasible recommendations to avoid NPA’s in SIB.

Keywords: NPA, SIB, Profitability, CAGR (Compounded Annual Growth Rate) 1. INTRODUCTION Banking is considered as the life blood of every country’s economy. Any issue relating to the banking sector will adversely affect the economy. Indian banking sector has been facing so many serious issues regarding the increasing level of Non- Performing Assets (NPAs) which are affecting their viability and solvency and thus posing challenge to their ultimate survival. NPAs adversely affect lending activity of banks, as non-recovery of loan instalment and also interest on the loan portfolio negates the effectiveness of credit-dispensation process. Non-recovery of Loans also hurt the profitability of banks. Besides, banks with high level of NPAs have to carry more owned funds by way of capital and create reserves and provision and to provide cushion for the loan losses. Banks have to make provisions on NPAs from out of the income earned by them on performing assets. Presently, high level of NPAs in loan profitability of banks make them fragile leading ultimately to their failure. This will shake confidence both of domestic and global investors in the banking system which will have multiplier effect in bringing disaster in the economy. Thus, managing bad loans and keeping them at the lowest possible level is critical for banks. It may be noted at this juncture that world class banks do not have NPAs of over 2% of total portfolio. An NPA level of over 5% is indicator of poor quality of loan portfolio. With growing competition and shrinking spreads banks should strive to keep NPAs much below the level of 10% to make net earnings necessary for their survival and growth.

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2. LITERATURE REVIEW 1) Kaur K. and Singh B. (2011) in their study on Non-Performing Assets of public and

private sector banks (a comparative study) studied that NPAs are considered as an important parameter to judge the performance and financial health of banks. The level of NPAs is one of the drivers of financial stability and growth of the banking sector.

2) Prasad and Veena (2011) in their study on NPAs, Reduction Strategies for Commercial Banks in India stated that the NPAs do not generate interest income for banks but at the same time banks are required to provide provisions for NPAs from their current profits, thus NPAs have destructive impact on the return on assets.

3) Rai (2012) in her study on performance of NPAs of Indian commercial banks find out that corporate borrowers even after defaulting continuously never had the fear of bank taking action to recover their dues. This is because there was no legal framework to safeguard the real interest of banks.

3. RESEARCH METHODOLOGY 3.1 Background of the Study

NPAs adversely affect lending activity of banks, as non-recovery of loan instalment and also interest on the loan portfolio negates the effectiveness of credit-dispensation process. Non-recovery of Loans also hurt the profitability of banks. Banks have to make provisions on NPAs from out of the income earned by them on performing assets. The study is about improving the knowledge about the banking industry in general and NPAs in particular. The present study will also help in understanding the performance of SIB and their position on NPAs for the last 10 years.


Banking industry lending activities are badly affected by NPA problems. Due to non-repayment of loan instalment and the interest amount, banks profitability has been affected adversely. The high level of NPA creates negative goodwill on banks. It creates lack of confidence in the investor community which adversely affects the economy also. Profitability of banks can be improved only by containing the NPA level to manageable level. This study covers NPA of South Indian Bank (SIB), identifying the sectors contributing to NPA and the steps taken by the bank to deal with NPA.

3.3 Need for the Study

The purpose of the study is to evaluate the performance and the level of NPA management of South Indian Bank Ltd., Bangalore.


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To study the business performance of SIB. To evaluate the trend of NPA in SIB for the past 10 years. To analyse the sector wise contribution of NPA in SIB. To understand the impact of NPAs on the operations of the bank. To give suggestions based on the study.

3.5 Scope of the Study

The study is conducted for 45 days in South Indian Bank Ltd., Christ branch, Bangalore, Karnataka. The current study is conducted with the help of annual reports.

3.6 Research Design

A research design is the arrangement for collection and analysis of data in a manner that aids to research purpose, design, conceptual structure, within which the research is conducted. It constitutes the blue print of the collection and measurement of data.


Quantitative Research

This research is based on numeric figures or numbers. Quantitative research aims to measure the quantity or amount and compares it with past records and tries to project for future period.

The study is based on “Quantitative Research”

3.8 Source of Data Collection

Data is processed into a form that is meaningful to the recipient and is of real and perceived value in the current or prospective action or decisions of the recipient.

Primary Data Primary data has not been used for the study.

Secondary Data Various references were used extensively like statistical data from RBI

publications, annual reports and Investors presentation of SIB have been referred to collect the data.

Banking and Management Accounting books were referred. Information was also retrieved from World Wide Web.

3.9 Limitation of the Study

The study is based only on secondary data. Since the study is an academic effort, it has its own time limitation and cost.

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Analysis of NPA is only based on quantitative data available. However, there are many qualitative aspects that influence the NPA management of the bank.

The analysis is done by using historical data. Therefore, the disadvantage of historical accounting will apply in this study.

4. ANALYSIS AND INTERPRETATION

4.1. Table Showing Performance of South Indian Bank (SIB) Amount (Rs Cr)

Particulars 2013-

14 2014-

15 2015-

16 2016-

17 2017-

18 2018-

19 CAGR

Deposits 47,491 51,912 55,721 66,117 72,030 80,420 11.1% Advances 36,230 37,392 41,086 46,389 54,563 62,694 11.6% Net Interest Income 1,399 1,366 1,510 1,675 1,966 2,020 7.6% Other Income 368 497 517 716 837 726 14.5% Pre-Provisioning Operating Profit 884 882 879 1,215 1,481 1,239 7.0% Provisions 155 414 370 614 981 858 40.8% Tax 221 161 176 208 165 133 -9.7% Net Profit 508 307 333 393 335 248 -13.4% Shareholders Fund 3,370 3,591 3,846 4,848 5,243 5,337 9.6% Return on equity 15% 9% 9% 8% 6% 5% Credit / Deposit Ratio 76% 72% 74% 70% 76% 78%

4.02. Table Showing Break-Up of Deposits of South Indian Bank (SIB) Amount (Rs Cr)

Deposits 2013-

14 2014-

15 2015-

16 2016-

17 2017-

18 2018-

19 CAGR

Savings 7,937 8,868 10,476 12,994 14,084 16,135 15.2% Current 1,888 1,818 1,983 2,753 3,058 3,332 12.0% CASA 9,825 10,686 12,459 15,747 17,142 19,467 14.7% Term 37,666 41,226 43,262 50,372 54,888 60,953 10.1% CASA Deposit Ratio

27.1% 28.6% 30.3% 33.9% 31.4% 31.1%

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4.03.a. Table Showing Break-Up of Advances of SIB

Amount (Rs Cr) Break-up of

Advances 2013-

14 2014-

15 2015-

16 2016-

17 2017-

18 2018-

19 CASA

Agriculture 2,994 4,077 5,770 6,633 7,919 8,673 23.70% SME 7,323 8,811 9,823 10,984 12,965 15,069 15.53% Retail 10,968 9,657 10,092 11,566 13,787 18,458 10.97%

Corporate 15,324 15,433 16,099 17,901 20,438 21,436 6.94%

4.03.b. Table Showing Break-Up of Advances of SIB in Percentage

Break-up of Advances 2014-15 2015-16 2016-17 2017-18 2018-19 Average

Agriculture 8.2% 10.7% 13.8% 14.1% 14.4% 12.2% SME 20.0% 23.2% 23.5% 23.3% 23.5% 22.7% Retail 30.0% 25.4% 24.2% 24.6% 25.0% 25.8%

Corporate 41.9% 40.6% 38.5% 38.0% 37.1% 39.2%

4.04.a. Table Showing Sector-Wise Break-Up of Advances of SIB Amount (Rs Cr)

Sector-wise Advances

2013-14 2014-15 2015-16 2016-17 2017-18 2018-

19 CAGR

Priority Sector 11,499 13,289 16,363 19,048 22,794 25,366 17.1% Non-Priority Sector 24,904 24,436 25,108 27,798 32,315 38,270 9.0%

4.04.b. Table Showing Sector-wise Break-up of Advances of SIB

Sector-wise Advances 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Priority Sector 32% 35% 39% 41% 41% 40% Non-Priority Sector 68% 65% 61% 59% 59% 60%

4.05.a. Table Showing Geographic-Wise Break-Up of Advances of SIB

Amount (Rs Cr) Geographic-wise

Advances 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 CAGR

Kerala 12,113 13,741 15,680 18,221 22,502 25,737 16.3% South Ex-Kerala 14,766 12,769 13,556 14,693 16,624 19,325 5.5%

Rest of India 9,742 11,444 12,549 14,170 15,983 18,574 13.8%

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4.05.b. Table Showing Geographic-Wise Break-Up of Advances of SIB in Percentage

Geographic-wise Advances 2014-15 2015-16 2016-17 2017-18 2018-19

Kerala 33.1% 36.2% 37.5% 38.7% 40.8% South Ex-Kerala 40.3% 33.6% 32.4% 31.2% 30.2%

Rest of India 26.6% 30.2% 30.0% 30.1% 29.0%

4.06. Table Showing Growth of Branches/ATMs/Employees of SIB

Year No. of Branches

No. of ATMs

No. of Employees

Average Deposits Per Branch (in Cr)

Average Advances Per Branch (in Cr)

2013-14 794 1,000 6,285 60 46 2014-15 822 1,200 7,009 63 45 2015-16 834 1,287 7,008 67 49 2016-17 850 1,320 6,977 78 55 2017-18 854 1,382 7,287 84 64 2018-19 870 1,406 7,822 92 72 CAGR 1.85% 7.05% 4.47% 9.10% 9.57%

4.07.a. Table Showing Break-Up of Provisions of SIB Amount (Rs Cr)

Break-up of Provisions 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 NPA & NPI 137.13 223.58 405.3 657.96 686.32 687.72

Depreciation on Investment -28.47 13.72 29.81 5.97 316.11 140.23 Standard Assets 31.09 31.37 -0.79 -1.72 7.38 27.36

Restructured Advances/Sacrifices & FITL 15.34 119.38 -62.3 -88.32 -10.77 0.97

Unhedged Forex Exposure 0 15.11 -5.05 0.86 1.03 1.1 Others 0.33 10.88 2.64 39.62 -19.18 1.1

4.07.b. Table Showing Break-Up of Provisions of SIB in Percentage

Break-up of Provisions 2014-15 2015-16 2016-17 2017-18 2018-19 NPA & NPI 54.0% 109.7% 107.1% 70.0% 80.1%

Depreciation on Investment 3.3% 8.1% 1.0% 32.2% 16.3% Standard Assets 7.6% -0.2% -0.3% 0.8% 3.2%

Restructured Advances/Sacrifices & FITL 28.8% -16.9% -14.4% -1.1% 0.1%

Unhedged Forex Exposure 3.6% -1.4% 0.1% 0.1% 0.1% Others 2.6% 0.7% 6.4% -2.0% 0.1%

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4.08.a. Table Showing Movement of Gross NPA of SIB Amount (Rs Cr)

Movement of Gross NPA 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Opening Balance 434 433 643 1,562 1,149 1,980 Additional 628 500 1,610 1,698 1,810 1,848 Deductions 630 289 691 2,111 979 697

Closing Balance 433 643 1,562 1,149 1,980 3,132

4.08.b. Table Showing Gross NPA of SIB

Year Gross NPA (Rs Cr) % Growth Gross NPA Ratio (%)

2009-10 211 1.3% 2010-11 230 9.2% 1.1% 2011-12 267 16.0% 1.0% 2012-13 434 62.4% 1.4% 2013-14 433 -0.3% 1.2% 2014-15 643 48.7% 1.7% 2015-16 1,562 142.8% 3.8% 2016-17 1,149 -26.5% 2.5% 2017-18 1,980 72.3% 3.6% 2018-19 3,132 58.1% 4.9%

CAGR (FY2014-19) 48.6%

4.09.a. Table Showing Movement of Net NPA of SIB

Amount (Rs Cr) Movement of Net

NPA 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Opening Balance 250 282 357 1,185 675 1,416 Additional 503 367 1,267 1,356 1,387 1,530

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4.09.b. Table Showing Net NPA of SIB

4.10.T

able Showing P

rovision Coverage Ratio of SIB Year Provision Coverage Ratio (%)

2013-14 62.71 2014-15 60.96 2015-16 40.34 2016-17 55.07 2017-18 41.15 2018-19 42.46 Average 50.44

4.11. Table Showing Sector-Wise Gross NPA of SIB

Year Priority Sector (%) Non priority sector (%) 2013-14 1.05 1.25 2014-15 1.42 1.86 2015-16 1.82 5.04

Deductions 470 291 439 1,867 646 782 Closing Balance 282 357 1,185 675 1,416 2,164

Year Net NPA (Rs Cr) % Growth Net NPA Ratio (%) 2009-10 62 0.4% 2010-11 60 -2.5% 0.3% 2011-12 77 27.5% 0.3% 2012-13 250 226.1% 0.8% 2013-14 282 12.9% 0.8% 2014-15 357 26.8% 0.9% 2015-16 1,185 232.0% 2.9% 2016-17 675 -43.1% 1.4% 2017-18 1,416 109.9% 2.6% 2018-19 2,164 52.8% 3.4%

CAGR (FY2014-19) 50.3%

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2016-17 2.47 2.44 2017-18 3.14 3.91 2018-19 4.82 4.99

4.12. Table Showing Industry Wise Distribution of Gross Advances and NPA in Percentage

Particulars

2013-14 2018-19

CAGR Gross Advances

(%) Gross NPA

Gross Advances

(%) Gross NPA

Textiles 8.0% 3.2% 16.8% 4.9% 20.8% Basic Metal and Metal

Products 12.3% 2.3% 15.7% 1.3% 9.5% Infrastructure 38.2% 1.7% 14.3% 23.0% -14.4%

All Engineering 2.2% 0.6% 7.8% 0.8% 34.5% Rubber, Plastic and their

Products 5.3% 0.0% 7.2% 1.3% 10.7% Cement and Cement

Products 2.8% 0.1% 6.2% 20.9% 22.1% Chemicals and Chemical

Products (Dyes, Paints, etc.) 2.3% 2.4% 5.7% 0.5% 25.1% Construction 5.9% 1.0% 5.4% 11.9% 2.6%

Other Industries 4.1% 1.2% 4.1% 3.6% 4.6% Gems and Jewellery 5.1% 6.8% 3.3% 23.9% -4.0%

Petroleum (non-infra), Coal Products (non-mining) and

Nuclear Fuel 1.4% 7.2% 2.8% 0.0% 19.1% Paper and Paper Products 1.4% 1.7% 2.7% 4.3% 18.8% Vehicles, Vehicle Parts and

Transport Equipment 3.3% 0.0% 2.4% 54.5% -2.4% Beverages (excluding Tea &

Coffee) and Tobacco 0.3% 2.3% 2.1% 0.2% 54.8% Leather and Leather

products 0.7% 0.0% 0.9% 6.5% 9.5% Wood and Wood Products 0.7% 6.3% 0.8% 4.4% 6.1%

Mining and Quarrying 0.3% 0.0% 0.7% 1.8% 20.3% Glass & Glassware 0.0% 0.1% 0.6% 0.0% 100.5%

Food Processing 5.6% 0.9% 0.5% 3.5% -36.4%

4.13.a. Table Showing Large Twenty Deposits and Advances

Amount (Rs Cr)

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Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Deposits 5,113 4,634 5,070 6,751 6,194 7,980

Advances 6,194 5,963 5,508 5,866 5,816 5,957

4.13.b. Table Showing Deposits & Advances of Twenty Large Deposits to Total Deposits and Total Advances in percentage

Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Deposits 10.8 8.9 9.1 10.2 8.6 9.9 Advances 14.9 13.5 13.3 10.2 8.8 8.1

4.13.c. Table Showing Top 4 NPA Accounts

Amount (Rs Cr) Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Top Four Gross NPA Account 167.82 189.43 909.01 670.05 692.53 848.66

Total Gross NPA 432.62 643.45 1,562.36 1,149.01 1,980.3 3,131.66 % of Top Four NPA to

Gross NPA 38.8% 29.4% 58.2% 58.3% 35.0% 27.1%

5. FINDINGS

The Net Interest Income and other income has grown at a CAGR of 7.6% and 14.5% respectively from FY2014 to FY2015. In FY2017, the huge growth in other income (i.e. 38% Y-o-Y) is partially due to the bond gain on account of falling yield.

The Total deposit of South Indian Bank (SIB) has grown at a CAGR of 11.1% from FY2014 to FY2019.

CASA as grown at a CAGR of 14.7% from FY2014 to FY2019. Savings, Current and Term deposit has grown at a CAGR of 15 2%, 12% and 10.1% respectively.

The CASA deposit ratio has increased to 31% in FY2019 as compared to 27% in FY2014.

The Loan book of SIB has grown at a CAGR of 11.6% from FY2014 to FY2019. Out of the Total advances, corporate segment form about 39% which is the major

borrower of advances, retail segment (include gold) form 26%, agriculture form 12% and SME form 23% on an average from FY2015 to FY2019.

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The Top 6 industries with higher proportion of gross advances are textile, basic metal & metal products, infrastructure, engineering, rubber, plastic & their products and cement & cement products.

In FY2019, around 68% of the gross advance are provided to the above top 6 industries and around 52% of the gross NPA is created by these industries.

The Proportion of advances in the priority sector on an average is 38% and in the non-priority sector on an average is 62% from FY2014 to FY2019.

Major proportion of advances is provided to borrowers in Kerala, is due to more than 50% of the branches are located in Kerala.

In FY2019, Advances provided in Kerala, South Ex-Kerala and rest of Kerala form 41%, 30% and 29% respectively.

In FY2019, the concentration of top 20 deposits to total deposits and top 20 advances to total advances are 10% and 8% respectively.

Credit to deposit ratio has grown averaging 74% from FY2014 to FY2019. The Gross NPA has grown at a CAGR of 48.6% from FY2014 to FY2019. The Gross

NPA ratio has increased from 1.3% in FY2010 to 4.9% in FY2019. The Net NPA grown at a CAGR of 50.3% from FY2014 to FY2019. The Net NPA ratio

increased from 0.4% in FY2010 to 3.4% in FY2019. The concentration of top 4 gross NPA accounts to gross NPA has declined from 39% in

FY2014 to 27% in FY2019. Provision has increased at a CAGR of 40.8% from FY2014 to FY2019. On an average, more than 80% of the total provision is provided to NPA & NPI from

FY2014 to FY2019. The Provision coverage ratio has decreased from 62.7% in FY2014 to 42.5% in FY2019.

Even though there was an increase in provision of NPA. The total number of branches of SIB grew at a CAGR of 1.85% and number of ATMs

grew at a CAGR of 7% from FY2014 to FY2019. The average deposits per branch and average advances per branch grew at a CAGR of

9.2% & 9.7% respectively from FY2014 to FY2019. The total number of employees grew at a CAGR of 4.5% from FY2014 to FY2019.

6. SUGGESTIONS

The Bank should try to increase CASA deposits, where cost of fund is low. This will help the bank to increase profitability.

Out of the advances, the bank should lend more to retail sector which will help the bank to broader its profitability and ease of NPA.

In the priority sector, the bank should fund more advances towards housing loan and small SMEs.

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The Bank is concentrated primarily in Kerala and also its presence in states other than south is negligible. The bank can concentrate in expanding its presence more in other parts of India.

In order to control the NPA, the bank should adopt processes to screen out companies which are not credit worthy in the initial stage of loan processing. In addition, the bank should review the customer performance to check the financial health to resolve the NPAs if there is probability of its occurrence.

7. CONCLUSION

The study was conducted on NPA management on South Indian Bank Ltd. The result obtained from the study has shown that there was an increase in the NPA of the bank in the past 10 years. The Net profit of the bank is declining from the past 5 years due to accounting high provision against NPA. Corporate sector being the largest borrower from the bank, it is also the largest NPA contributor to the bank. The branches of the bank are more concentrated in Kerala and other southern part of India, contributing nearly 70% of the business which is very risky.

BIBILIOGRAPHY

Kaur K. & Singh B, “A Study On Non-Performing Assets Of Public And Private Sector Banks In India – A Comparative Study”, International Journal of Service and Operations Management, January 2016.

Prasad & Veena, “Study on NPAs Reduction Strategies for Commercial Banks in India”, Kakatiya University, Warangal, India, Vol. 1, Issue. 3, September 2011.

Rai, K., “Study on Performance of NPAs of Indian Commercial Banks”, Asian Journal of Research in Banking and Finance, Vol. 2, Issue 12, 2012.

WEBSITE

https://www.clearias.com/non-performing-assets-npa https://www.southindianbank.com/Annual_Report https://www.southindianbank.com/Investors_presentation

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ANALYZING THE FINANCING DECISIONS OF BRIGADE COMPANY ~Deepa Yoganandan

Abstract

Financial Decision refers to decisions concerning the main financial matter of business organization. The objective of financial decision is to maintain an optimum capital structure. The study on “Analyzing the Financial Decisions of Brigade Company” discusses about the introduction of the leverages, capital structure, capital structure theory, market value of the firm and return on investment made by the company. It also gives the review of literature and also discusses the research methodology and data analysis. The data collected is the secondary data that is from the company official websites. The collected data used in computation of earnings available to equity shareholders, earnings per shares, financial leverage, operating leverage and combined leverage, relationship between leverage and earnings per share, market value of the firm, return on investment are used for analyzing the financing decision of Brigade Company. The results are obtained through the comparative tables and different graphs. Consequently the research stretches to derive findings from the analysis and suggestions for the firm to improve its value of the firm.

Keywords: Financial Leverage, Operating Leverage, Capital Structure, Earnings per Share

1. INTRODUCTION

There is a tremendous improvement in the capital market. The term capitalization is a qualitative aspect of the financial planning of an enterprise, capital structure is concerned with the qualitative aspect. Capitalization refers to the total amount of securities issued by the company that makes up capitalization. For raising long term finance a company can issue three types of securities that is equity shares, preference shares and debentures. A decision about the proportion among these types of securities refers to the capital structure of an enterprise. Capital is required at all the stages of establishment, expansion, diversification etc. Capital can be raised from different sources. That is equity, debentures, preferences shares, loans, retained earnings etc. capital structure of any firm is the combination of different sources of finance used by the firm. The determination of capital structure is necessary both at the time of establishment of the business enterprises and at any time, the firm changes its capital structure. The finance manager should always ensure that optimum capital structure is attained and kept flexible enough to take care of solvency threat and other bankruptcy costs.

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Financial decision refers to decision concerning the main financial matters of the business organization. The decision regarding amount to be invested, pattern of capitalization, distribution of profits etc. The financial decision of the company is made on the analysis of earnings available to equity shareholders; earning per share; market value shares and return on investment made by the company.


1) Veni and Narayana (2002) examined the leverage position of the firm to know the impact of fixed charges on EBIT and EPS. They also analyzed the capital structure policies and dividend policies and its impact on market price per share. They found that there is no considerable relationship between leverage and EPS. They concluded that fluctuations in the market price of the share influences the capital structure decision and dividend decision to some extent.

2) Joshua Abor (2005) in his article, “The effect of capital structure on profitability: An empirical analysis of listed firms in Ghana”, analyzed the impacted of leverage on profitability. Correlation technique was applied and the findings of the study evidenced that there was a positive correlation between leverage and profitability during the study period.

3) Boopen Seetanal, Kesseven Padachi and Rishi Ronoowah (2007) made an attempt to investigate the determinants of capital structure for the small Island developing state of Mauritius, using firms listed on the stock exchange of Mauritius over the years 1994 – 2004. The results of the study revealed that certain firms – specific factors which explain capital structure in developed countries, are also relevant to a small Island economy like Mauritius. The analysis showed that most important firm – specific factors that influence capital structure choice are profitability, size, tangibility and liquidity. Other factors like business risk, non-debt tax shield effects and growth opportunities do not seem to affect the capital structure decision of corporate firms. The results also showed that, there was an inverse relationship between pretax weighted average cost of capital and the capital structure of a firm. In case of cost of capital the irrelevancy theory of Modigliani and Miller does not seem to hold good for Indian industries.


3.1 Background of the Study

Financial decision refers to decisions concerning the main financial matter of business organization. To satisfy the expected rate of return by the investor, business firm has to make different combination in long term debt and equity. To have an efficient leverage of debt and equity to meet the obligation towards investors, the fund manager has to use different long term

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sources of funds judiciously such that the overall cost of capital is maintained at optimum level. The study mainly focuses on the profit available to the equity shareholders after all the expenses such as interest, taxes and dividend. The study also gives details about the leverages of the company. The project also discuss about the market value of company shares and also about return on investment. Return on Investment is an important aspect that is usually expressed as a percentage and is typically used for company financial decisions, to compare a company's profitability or to compare the efficiency of different investments.


The management of the company as to decide the dividend that should be given to the shareholders unless the board of directors propose in case of profit, there is no dividend in case of loss. The company that uses leverages leads to problems for a company, there will be no benefit of taking leverage. Hence the company which has earning normal or below average profit, leverage can do more harm than good. The market value of a company is always very difficult to the book profits from the market and there is equal chances of loss. Return on Investment is an important aspect of the company, which helps the company to take decision regarding the investments. Lack of agreement on the right or optimum rate of return might discourage managers whose opinion is that the rate is set at an unfair level. Value and valuations of assets, particularly with regard to jointly used assets, might give rise to difficulties and misunderstandings.

3.3 Need of the Study

The main aim of this project is to know about how the earnings are available to the equity shareholders, analyze the market value and cost of the equity or capitalization rate of the company. The leverage helps in analyze the risk of a company. It helps in trading on equity that exists only when the return on the investment is greater than the cost of the debt. Return on Investment measures the gain or loss generated on an investment relative to the amount of money invested. Return on investment is a Key Performance Indicator (KPI) that's often used by businesses to determine profitability of an expenditure. It's exceptionally useful for measuring success over time and taking the guesswork out of making future business decisions.


To discover the benefits accessible to the value investors, ie., profits available to the equity shareholders

To find out the leverages of the company To distinguish the market value of the company To determine the operating cycle of the firm

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The study is based on historical data that is from 2013 to 2018 for 5 years The study is confirmed only to the information provided by the organization


Analytical research is a specific type of research that involves critical thinking skills, the evaluation of facts and information relative to the research being conducted.

The project is based on analytical aspect of that is analyzing the leverages of company, earnings available to equity shareholders and also the market value of the company.

3.7 Sources of Collection of Data

Data for the analysis are collected from the official website of the company for the period 2013 to 2018.

3.8 Tools used for testing of Research

The tools used are 3 types of leverages that is operating leverage, financial leverage and combined leverage are the strategy of using borrowed money to increase return on an investment which helps in financial decision of a company. The market value of the firm and return on investment is also used as a tool for analyzing the financing decision of a company.

4. ANALYSIS & INTERPRETATION OF DATA

Table. 4.1: Comparative Analysis of Earning Available to Equity Shareholder and Earning Per Share

Year EATESH Value (in crore) EPS Value (in rupees)

2014 89.9 8 2015 116.4 7.76

2016 139.1 9.27

2017 167.2 11.14

2018 132.9 8.86 Graph 4.1: Comparative Graph of Earnings Available to Equity Shareholders and Earning

Per Share

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The earnings available to equity shareholders and earnings per share are in increasing trend from 2014 to 2017 and in the year 2018 the value of both decreases due to decrease in the revenue earned by the company. In 2017 the value of earnings available to equity shareholders and earnings per share is high because the revenue earned is higher when compared to other years.

Table 4.2: Comparative Table of Leverage

Year Operating Leverage Financial Leverage Combined leverage

2014 1.000845309 1.91578947 1.91740891 2015 3.442626728 1.76115942 6.06301449 2016 4.156801339 1.93388812 8.03878872 2017 2.702667761 2.0236711 5.46931063 2018 3.103590626 2.21265462 6.86717412

Graph 4.2: Comparative Graph of Leverages

The operating leverage for 2014 is 1.000845309 times and in 2015 and 2016 the leverage is increased and in the year 2017 the leverage as come down by 2.702667761 times due to the change in capital structure. Further in 2018 the leverage increased to 3.103590626 times.

89.9116.4

139.1167.2

132.9

8 7.76 9.27 11.14 8.860

50

100

150

200

2014 2015 2016 2017 2018

C o mp a r a t i v e G r a p h O f E a r n i n g s A v a l i a b l e T o E q u i t y S h a r e h o l d e r s A n d E a r n i n g P e r S h a r e

EATESH Value (in crore) EPS Value (in rupees)

2014 2015 2016 2017 2018Combined leverage 1.91740891 6.06301449 8.03878872 5.46931063 6.86717412Financial Leverage 1.91578947 1.76115942 1.93388812 2.0236711 2.21265462Operating Leverage 1.000845309 3.442626728 4.156801339 2.702667761 3.103590626

02468

10121416

Leverages

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Financial Leverage for 2014 is 1.915789474 times, in the year 2015 it is decreased to 1.76115942 times and then it increased gradually year by year and stood at 2.2126 in 2018. This is due to changes in EBIT and EBT of the company. Combine Leverage for 2014 is 1.917408907 times. In the year 2015 and 2016 the value of combined leverage increased to 8.038788719 times and then it decreased gradually to 5.469310631 times, because of decrease in the revenue of the company. In the year 2018 the combined leverage increased to 6.86717412 times.

Table 4.3: Table Showing the Relationship Between Leverages and Earning per Share

EPS Operating Leverage

Financial Leverage

Combined leverage

EPS 1 Operating Leverage 0.176182585 1 Financial Leverage 0.432319289 -0.021771217 1 Combined leverage 0.266790398 0.973664126 0.206402177 1 The above table shows the correlations between the earnings per share and leverages. The operating leverage is 0.176182585 and financial leverage is 0.432319289. The operating leverage value is less than financial leverage. This shows that the impact of financial leverage is stronger than the operating leverage on Earnings per Share. The combined leverage is the combination of both financial and operating leverage which is 0.266790398.

Table 4.4: Comparative Table of Market Value of Firm using NI, NOI and MM Approaches

Year NI NOI MM

2014 62930000 62930000 165620000

2015 98940000 989399999.9 258230000

2016 115453000 115453000 347189000

2017 145464000 145464000 423951000

2018 99675000 99675000.01 348825000

Graph 4.3: Comparative Graph of Market Value of Firm

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Based on the above analysis it is evident that NI and NOI approach has the same market values in all 5 years (because of zero debentures). According to MM approach the market value of the firm is increased from 2014 to 2017. Because the EBIT value is increasing from year by year and the value of equity is also increasing. This shows the firm has good market value. But in the year 2018 the value of the firm has come down because of down trend in EBIT and cost of equity.

Table 4.5: Comparative Table of Return on Investment

YEAR Return On Investment

2014 1.778947368

2015 1.581056466

2016 0.750031378

2017 0.255493396

2018 0.343876616

Graph 4.4: Comparative Graph of Return on Investment

0

200000000

400000000

600000000

2014 2015 2016 2017 2018

62930000 98940000 115453000 145464000 99675000165620000

258230000347189000

423951000348825000

Market Value of Firm

NI NOI MM

1.7789473681.581056466

0.750031378

0.255493396 0.343876616

0

0.5

1

1.5

2

2014 2015 2016 2017 2018

Return on Investment

Return on Investment

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The return on investment for past 5 years that is from 2014 to 2018. In the year 2014 the return on investment is 1.778947368 because the earnings available was less to the company. As the earnings available increased for the company, the return on investment as decreased gradually to 0.255493396. In 2018 the revenue of the company reduced, to increase it company invested more funds to increase their revenue so the return on investment increased to 0.343876616 in the year 2018 compared to 2017.

5. FINDINGS

The earnings available to equity shareholders and earnings per share are in increasing trend from 2014 to 2017 and in the year 2018 the value of both decreases due to decrease in the revenue earned by the company. In 2017 the value of earnings available to equity shareholders and earnings per share is high because the revenue earned is higher when compared to other years.

The operating leverage dependences upon the contribution and EBIT. The operating leverage was in increasing trend from 2014 to 2016 and the value came down in the year 2017 which is because of increases in the highest revenue earned where there are certain expenses. In 2018 the value of operating leverages as started increasing. The financial leverage depends up on the operating profit and profit available to equity shareholders. The financial leverage is in increasing trend. There is no effect of revenue in financial leverage but the net profit of the company is increasing continuously. The financial leverage is in increasing trend only. Combined leverage depends upon the both operating and financial leverage which magnifies the effect of sales volume changes. The combined leverage is in increasing trend from 2014 to 2016. In the year 2017 the leverage as fall down but in the 2018 the leverage is increased.

The market value of the firm depends upon the revenue earned by the company. As the revenue is increasing from 2014 to 2017 in the same way the market value of firm also increased, in the year 2018 the value of revenue came down which lead to fall in the market value of the firm. The market value of firm and revenues of the company are interrelated.

The return on the investment depends on the EBIT and investment made by the company. As the revenue of the company is increasing which lead to decrease in investments of the company. But in 2018 the revenue came down which made the company to increase the investments.

6. SUGGESTIONS

The main aim of the firm is to increase its revenue every year and the company was successful in it but in the last year due to few reasons the company could not do it. The company should increase its sales to increases the profit back.

The market value of the firm is very important aspect of the company, to maintain that the company should concentrate on increasing the revenues of the company. This will

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default help in increasing the earnings available to equity shareholders and earnings per share.

The return on investment is also important aspect which helps to increase the current asset of the company. To increase it, the company should maintain a minimum level of investment in the company which helps in the growth of the company.

The Company should have a roadmap to achieve their target which help the company and its employees to motivate to work more effectively and efficiently.

It’s evident that financial leverage is stable. Its better the company can consider financial leverage to analyses the risk levels of the company compared to operating leverage.

7. CONCLUSION

The study is made on the topic Analysis of Financing Decision of Brigade Company using earnings available to equity shareholders, earnings per share, market value of the firm, return on investment and different types of leverages i.e., operating leverage, financial leverage and combined leverage. The company financial decisions is based on the basis of earnings available to equity shareholders and earnings per share. From the analysis it is evident that the company is growing year by year, but in 2018 the company growth came down, company has to put its effort to come up. The market value of firm speaks about the company position in the market. The company has a good position in the market. The study reveals that the financing decision is fair; the company profits are also increasing from year to year. The overall successes of any company depends upon financing decision of its capital.

BIBLIOGRAPHY:

1. Veni and Narayana, (2002). “Leverage, Capital Structure, Dividend Policy and Practices”, the Management Accountant, 47: 941-946.

2. Boopen Seetanah, Kesseven Padachi and Rishi Ronoowah (2007). “Determinants of Capital Structure: Evidence from a Small Island Developing State”, The ICFAI Journal of Applied Finance, 13(5): 5-28.

3. Joshua Abor (2005). “The Effect of Capital Structure on Profitability: An Empirical Analysis of Listed in Ghana”, The Journal of Risk Finance, 6(5)

Text Books Aswantha Narayana T, Archana B S, Chandrakala G, Mini K Abraharam Financial

Management, Vision Book House. Shashi K Gupta, Dr. RK Sharma, Dr. Neeti Gupta, Financial Management, Kalyani

Publishers

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Websites

o https://www.brigadegroup.com o www.yourarticleslibrary.com o https://www.accountingcoach.co

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COMPARATIVE ANALYSIS OF BANK RECONCILIATION STATEMENTS ~Shraddha Singh Khirwar

Abstract

Everyone operates a bank account in which they deposit, withdraw and transfer money from time to time. People may usually keep a record of these transactions. At the same time, banks also maintain a systematic record of all the transactions by its customers. But, what if there is a significant difference between the passbook and the personal records? It is obvious that a comparison of both the bank and the personal records will be done to find out the items recorded in one, but not in the other. This article talks on how business concerns maintain a record of all their banking transactions in the bank column of the cash book. It helps to reduce the work load and it is done by specialized accounting software’s for a successful transaction.

Keywords: Deposits, Accounting, Transactions, Specialized Accounting Software

1. INTRODUCTION

The process of reconciliation ensures the accuracy and validity of financial information. Also, a proper reconciliation process ensures that unauthorized changes have not occurred to transactions during processing.

Auditors want to see an account reconciliation for larger accounts, though reconciliations should be performed even in the absence of an auditor request, since this is a good accounting practice that leads to more accurate financial statements.

Businesses maintain a cash book to record both the cash as well as bank transactions. A Cashbook has a cash column which shows cash available with the business and a bank column which shows cash at bank; Bank also keeps an account for every customer in their books. All the deposits are recorded on credit side of customer’s account and withdrawals are on the debit side of their account. An account statement is sent regularly to the customers by the bank. Sometimes the bank balances as per cash book and bank statement doesn’t match. In case balance available in the passbook doesn’t match the bank column of the cash book, the business should identify the reasons for the same. It is important to reconcile the differences.

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For reconciling the balances as shown in the cashbook and passbook, a reconciliation statement is prepared known as Bank Reconciliation Statement or BRS. In other words, BRS is a statement which is prepared for reconciling the difference between balances as per cash book’s bank column and passbook on a given date; Bank reconciliation statements ensure payments have been processed and cash collections have been deposited into the bank. The reconciliation statement helps identify differences between the bank balance and book balance, in order to process necessary adjustments or corrections. An accountant typically processes reconciliation statements once a month. The Bank reconciliation process involves 4 steps: 1. Adjusting the balance per bank 2. Adjusting the balance per books 3. Comparing the adjusted balances 4. Preparing necessary journal entries Completing a bank reconciliation statement requires using both the current and the previous month's statements, including the closing balance of the account. The accountant typically prepares the bank reconciliation statement using all transactions through the previous day, as transactions may still be occurring on the actual statement date. All deposits and withdrawals that have been posted to the account must be on hand to prepare the reconciliation statement. The preparation and maintenance of accounts of Genisys Information Systems (India) Private Limited is done on SAPB1, while those of their other working units are done on Tally & ERP 9 on a weekly basis. The data for the weekly reports is stored on Excel before being imported/entered into the necessary accounting software.


1) According to Cherry Donald (2008), BRS is used to determine the correct cash balances. Items that the bank has not yet recorded must be added to, or deducted from the balance shown on the bank statement, while items that a company has not shown must be added to or deducted from the balance shown in the company's cash account.

2) According to Barbara Chiapetta (2005), the purpose of bank reconciliation is the checking of balance reported. The balance reported on the bank statements, rarely equals to the exact amount of the balance reported in the company's statements. This is due to the fact that one party may possess the information that the other may not. Therefore, the accuracy of the reports of both the company as well as the depositors’ records must be proven. Thus, a reconciliation statement must be prepared to explain the differences between the two.

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3) According to Edmond Thomas P (2000) Depositors cash balances can be lesser than bank balances due to: Outstanding checks, a check that a company has issued and recorded in its general ledger accounts, but the check has not yet cleared the bank account on which it is drawn; and deposits made by the bank, these are additions to the depositors account made directly by the bank.

Depositors may have a larger balance than the banks due to:

i. Service charges, extra fees charged by banks for their services performed. ii. Deduction of non-sufficient funds, checks that were submitted but were not

cleared due to insufficient funds in the depositor’s bank account. iii. Depositor in transit, these are deposits that are recoded by the depositor but not

yet done so by the bank. iv. Errors committed by both the bank and the depositor.

4) Kanu Clementina and Idume Gabriel Isu (2015) discovered that many businesses

simply refuse to employ qualified staff to handle their finances to save costs in employing them. Unfortunately, the huge sums of money lost by the company to all manner of misappropriation makes that petty consideration of cost savings pale in comparison.

5) According to an article on the' Roberg Tax Solutions' website dated 26th November 2013, the goal of a reconciliation is not to find the discrepancy between the accounting software balance and the bank balance because of timing differences. These are normal discrepancies. The goal is see if this discrepancy is a result of error from the accounting system or error from the bank, making bank reconciliations absolutely necessary for small businesses.

3. COMPANY PROFILE

Name: Genisys Information Systems (India) Private Limited

About the company: Genisys Information Systems (India) Private Limited is a Private incorporated on 16 February 2005. It is classified as Non-government Company and is registered at Registrar of Companies, Bangalore.

Founder: Ashok J Rabheru (Woking, Surrey (London, UK))

Authorized Share Capital is Rs. 25,000,000

Paid up Capital is Rs. 6,095,120

Directors of Genisys Information Systems (India) Private Limited are: Mukkapuzha Nandakishore, Rabheru Ashokumar Jivraj.

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Nature of business: Software publishing, Consultancy and Supply

Industrial Information:

Financial services Healthcare Manufacturing Media Travel Retail

Product/Service Profile:

Digital Solutions Data Analytics Services & Solutions ERP and CRM solutions BPO Cloud computing Digital Media Operations & Solutions



Identification of the efficiency of and the factors responsible for reconciliation differences in the balances of the cashbook and passbook of Genisys Information Systems (India) Private Limited.

4.2 Need and Importance of the Study Companies and banks always keep a detailed record of all the transactions in the cashbook and passbook. Even though it is supposed to tally, there is sometimes a difference in the amounts of the balance shown in the passbook and the cashbook. The reasons for this difference can be many, but there is still a need to identify them. As an accountant, BRS is a control mechanism to identify and record appropriately any miss outs. It also helps in giving an insight to the fund flow of the company. As an auditor, BRS is particularly important if there is a significant difference in bank balance and book balance. It will help in tracing the transactions causing the difference and hence verifying the genuineness of the account balances. Bank reconciliations are an essential internal control tool and are necessary in preventing and detecting fraud and spotting errors. Failure to resolve reconciling items timely increases the possibility that errors or unrecorded transactions may not be detected and corrected promptly. This failure also decreases control over cash and increases the risk that theft or loss of funds may not be swiftly detected and corrected.

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Genisys Information Systems (India) Private Limited prepares their Bank Reconciliation Statements on a weekly basis across different accounting software's and compiles them at the end of the month. However, despite all the measures taken to ensure the elimination of reconciliation differences, there sometimes arises a slight dissimilarity between the balances. This predicament has negatively affected the company as it causes a setback during the annual audit of the financial reports. A possible cause for this problem is the timing differences arising from the carry forward of cheques; however, a thorough analysis of the Bank Reconciliation Statements is required to arrive at a plausible conclusion. 4.3 Objectives of the Research

The present study was designed to realize the following objectives:

1. To know the method of preparation of BRS at Genisys Information Systems (India) Private Limited.

2. To know the efficiency of the preparation. 3. To analyze the factors responsible for differences between the bank account and the

General Ledger (G/L).


The study was confirmed to internal environment only. The study is based on the secondary data collected from the Bank Reconciliation Statements of Genisys Information Systems (India) Private Limited which was prepared for the use and reference of the company.


1. The data was restricted to one particular company, i.e., Genisys Information Systems (India) Private Limited.

2. This research faced time constraints as it was conducted over a period of 45 days. 3. This research was based on secondary data, meaning that the data collected was

compiled by somebody else and may not conform precisely to the topic of study. 4. The reluctance of the company to participate and share their knowledge about the

topic and experiences. 5. The area of study for the topic of Bank Reconciliation is very limited, i.e., there were

not a lot of previously conducted studies, making it more difficult for reference purposes.


The type of research used for study is analytical research. Quantitative secondary data is used when there is a need to use previously collected

information to inform the current study

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4.8 Collection of Data

Primary data: In this study, it was mainly an informal, conversational interview with the concerned staff. Some of the information has been verified or supplemented with personal observations or data collected during the personal interview.

Secondary data: The secondary data was collected from the already prepared Bank Reconciliation Statements of Genisys Information Systems (India) Private Limited.

4.9 Time Period of the Study

The research was done during the period of 45 days starting June 1st 2019 up until July 15th 2019.

5. DATA ANALYSIS

Table 4.1: Closing Balance Amounts from May 2018 - April 2019

Month Closing balance as per SAP (cashbook)

Closing balance as per Bank (passbook)

May 17,374,375.12 17,354,791.75

June 40,647,500.11 40,432,004.82

July 43,131,265.53 43,142,101.03

August 3,685,879.67 3,806,336.75

September 23,418,135.84 23,294,186.30

October 62,703,105.65 62,552,735.59

November 79,657,487.63 79,342,457.21

December 82,628,305.33 82,271,616.61

January 10,879,701.72 10,545,802.82

February 36,952,643.65 36,726,157.65

March -40,423,649.61 -39,338,529.61

April -64,288,074.69 -62,847,126.69

Graph 4.1: Closing Balance Amounts from May 2018 - April 2019

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Analysis and Interpretation: This graph is a Bar graph. These are used when the numbers being looked at are independent of each other. The graph shows the break-up for the continuous variables represented, and also the deviations in the amounts, that is, the closing balances as per the cash book and the bank statement each month, for a series of 12 months starting May 2018. In the above graph, the X-axis represents the months for which the data was considered and the Y-axis represents the figures between which the closing balance amounts can be seen fluctuating. The highest balance amount was seen to be recorded in the month of December 2018, while the lowest (negative balance) was recorded in the month of April 2019. The average growth rate of the closing balance as per SAP is 0.42%, whereas that of the bank statements is 0.43%.

Graph 4.2: Reconciliation Difference Amounts between Cashbook and Passbook

Analysis and Interpretation: A line graph is mostly used to show change over time as a series of data points connected by line segments on the coordinate plane. The line graph therefore helps to find the relationship between two data sets, with one data set always being dependent on the other set. This graph shows the breakup of the reconciliation difference amounts for a series of 12 months, starting from May 2018.

-2E+08

-1E+08

0

100000000

200000000

May

June July

Augu

stSe

ptem

ber

Octo

ber

Nove

mbe

rDe

cem

ber

Janu

ary

Febr

uary

Mar

chAp

ril

Closing Balance As PerBank

Closing balance as perSAP

-3

-2

-1

0

1

Reconciliation Difference

Difference Amount

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In the above graph, the X-axis represents the months for which the data was considered and the Y-axis represents the figures between which the reconciliation difference amounts can be seen fluctuating. The highest deviation was recorded in the month of September 2018, whereas the best months were August 2018; January, February and March 2019. The average growth rate of the reconciliation differences errors is 0.52%.

6. FINDINGS

The current reconciliation method is a complicated process, as there are different software’s involved in the preparation and maintenance of the statements. With only one person maintaining the BRS, it puts a lot of strain and makes room for more bias or errors.

There is no evidence that bank reconciliations were prepared timely. A higher amount in the closing balance of the cashbook can lead to a higher amount of

reconciliation errors. Cheques that are dishonoured still have to be carried forward, as the obligation to pay the

amount does not expire even when the cheque does. The main cause for the difference in balances of the cash book and bank book are timing

differences and cheque that remain un-cleared for a very long time. The small amounts like bank charges, are usually neglected as they are not entered in the

cash book until the statement is sent by the bank. These can also be responsible for minute errors in reconciliation.

The interest rate charged on the bank is based on the overdraft of the account. The closing balance as per SAP grew at a rate of 0.42%, whereas that of the bank passbooks

grew at a rate of 0.43%. The differences between the closing and the opening balances grew exponentially over the

span of a year at a rate of 18%. The errors in the reconciliation differences grew at a rate of 0.52% in the span of a year,

leaving room to doubt the accuracy of the statements.

7. RECOMMENDATIONS

1) The process of bank reconciliation even though done using different accounting software’s, should not be done by a single employee. Multiple employees engaged in the preparation and verification processes will make it easier and lesser room for errors is observed.

2) After the exporting of the statements from one software into another, the data must be checked again, so there are no missing values unaccounted for.

3) The bank reconciliation process can be fully automated, which leaves lesser room for errors.

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4) There is a need for the company to ascertain the position of their accounts from time to time.

5) There should be a separate record kept for cheques that have been dishonored. 6) Bank charges, interest and other minor amounts must be accounted for using separate

journal entries so it is easier to keep a track of minor amounts. 7) The reason for the carry forward of the dishonored cheques could be disclosed in the

form of a footnote for easier reference. 8) Proper training should be given to the staffs so as to understand the usage of different

accounting processes on the different accounting software’s. 9) The company could personalize the software according to their needs, for easier usage. 10) The reason for the reconciliation differences should be properly accounted for. 11) There should be a separate ledger kept for the different and accounts maintained by the

company. 12) The items can be identified more easily if they are listed line wise.

8. CONCLUSION

Thus, to conclude 1. The bank reconciliation process at Genisys Information Systems as of right now, is far

too complicated and there needs to be more improvement done in that area. 2. Bank reconciliation is an important and intricate process that is a must for organizations

to keep a detailed record of their accountability. 3. The bank reconciliation statements impact the preparation of other financial statements as

well. 4. The most contributing factor to the reconciliation differences are the cheques that are

carried forward, due to timing differences. 5. Hence, it can be concluded that the functions, roles, activities and responsibilities of the

concerned workgroup, while being performed regularly, could use improvement.

BIBLIOGRAPHY:

Fizzell M.R and Cherry D.C,(2008), Financial Accounting- User Perspective, 5th edition, Veronica Risen tin

Edmond T.P and Mcnair F.M,(2000)Fundamental Financial Accounting Concepts, 3rd edition, McGraw-Hill

Tunde, O. P. (n.d.). "Bank Reconciliation", HND, BSC, ACA,. Fundamental accounting principles, Volume 1. Front Cover. Kermit D. Larson, John J.

Wild, Barbara Chiappetta. McGraw-Hill/Irwin, 2005 - Accounting Henry R and Needly E (1990) Principles Of Accounting, 4th edition, Houghton Mifflin

Co. James A and Parry R.W, (2005) College Accounting, 18th edition, Thomson-South

Westend.

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C.R, K. (2004). Research Methodology: Methods And Techniques, New Delhi: New Age International Publishers.

Economic Development: Tenth Edition (1990) Michael P. Todaro, Stephen C. Smith, Anderson H. R.

Websites:

Livemint (https://www.livemint.com/) Bloomberg (https://www.bloomberg.com/) OptiPro (https://www.optiproerp.com/) Gartner (https://www.gartner.com/en/products/special-reports) Gadgetsnow (https://www.gadgetsnow.com/) Quora (https://www.quora.com/) Wikipedia (https://www.wikipedia.org/) Roberg Tax Solutions (https://robergtaxsolutions.com/) TechSci (https://www.techsciresearch.com/)

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THE PERFORMANCE EVALUATION OF MUTUAL FUNDS ~Sonia.F

Abstract A Mutual Fund is a scheme in which several people invest their money based on their investment objectives. Mutual Funds pool money from different investors and invest in different investment sources like stocks, shares, bonds etc. These funds are managed by professional managers and returns are paid to the investors in the form of dividends. There are some funds which assures fixed returns that are less in risk and some of the schemes offer dividends based on the market fluctuations and prices. The exit and the entry load factors must be taken into considerations while subscribing to Mutual Funds. The Mutual Funds have to be subscribed in units and the purchase or sale is dependent on NAV (Net Asset Value). This project deals with the performance evaluation of mutual funds, the tools used for evaluating the performance of mutual funds are Standard Deviation, Beta, Treynor’s Measure, Sharpe’s Measure and Jensen’s measure. The findings from this project is that an investor will create more wealth if he/she invests in equity based mutual funds through Systematic Investment Plan (SIP). The investors will earn more by investing in SIP rather than investing lump sum amount. Another finding from this project is that the investor gets capital appreciation only if he evaluates the performance of the funds before investing in it.

Keywords: Standard Deviation, Beta, Treynor, Sharpe and Jensen measures, Systematic Investment Plan (SIP)

1. INTRODUCTION

A Mutual Fund is like a bridge or a financial intermediary that allows a group of investors to pool in their money together with a pre-determined investment objective and this gathered money is invested by the fund manager into various securities (stocks and bonds). In other words they mobilize money from investors, to invest in various securities as per investment objective agreed upon between the mutual funds and the investors.

Mutual Fund assist the investors in earning income by participating in the opportunities available in various securities and markets. Mutual Fund mobilize money from all the possible investors

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who have different investment preferences and needs. In order to help these preferences and needs of investors mutual fund mobilize different pools of money. Each such pool of money is called as Mutual Fund Scheme.

Mutual Fund structures a scheme for different kinds of investment objectives. The Mutual Fund structure through its various schemes makes it possible to collect large amount of money from invests in those schemes whose investment objectives reflect their own needs and preferences.

Securities and Exchange Board of India (Mutual Funds) Regulations 1966 defines, Mutual Fund as, “a fund establishes in the form of trust to raise money through the sale of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments.” A Mutual Fund serves as a link between the investor and the securities market by mobilizing savings from investors and investing in the securities market to generate returns. Thus, a mutual fund is asking to Portfolio Management Services (PMS). All though, both are same, they are different from each other. PMS are offered to high net worth individuals; taking into account their risk profile, their investments are managed separately. In case of mutual funds, savings of small investors are pooled under a scheme and the returns are made by the investors/ unit-holders.

Mutual Funds are easy to buy and sell. They can be either bought directly through Fund Company or through s third party. Before investing in any fund, one considers the factors such as objectives, risk, fund managers, scheme track record and cost factor. A mutual fund is an appropriate investment, automobile for now a day’s complicated and current monetary scenario.

A regular individual is not going to have the information, capabilities and time to maintain the record of events, recognize their implications and act swiftly. A character also reveals it hard to keep track of ownership of his assets investment, brokerage dues and bank transactions etc.

1.1 Working of Mutual Fund

First the Mutual Funds scheme will announce their investment objective and seek information from the investment. The investor will invest in mutual fund scheme if the investment objective reflects their own needs and preferences. Then the investment made by the investor is translated into a certain number of “units” in the scheme. Thus, investor in a scheme is issued with units of the scheme.

Scheme earns dividend income or interest income on the investment it holds. Further, when it sells or purchases the investment it incurs capital loss or earns capital gains respectively. The investment owned by the scheme may be quoted at a higher price than the cost paid. Such gains in values on the securities held are called as valuation gains. There may be valuation losses if the securities are quoted at a lower price than the cost paid, mutual funds also includes operating expense for running the schemes.

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When the scheme is 1st made available for investment, it is called an NFO (New Fund Offer). At this stage investors get a chance of buying the units at their face value. If it’s a Post- NFO the investors when buying the units will have to pay a price linked to its NAV. The true worth of a unit of the scheme is called the NAV of the scheme. The money mobilized from the various investors by the mutual funds schemes in a portfolio of securities as per stated investment objective. Profit & loss belongs to investors are unit holders. Investors will have to pay a fee to mutual fund manager for the services rendered.


1) (NARAYAN RAO SAPAR , 2003 ) In this paper the performance evaluation of Indian mutual funds in a bear market is carried out through relative performance index: risk – return analysis, Treynor’s ratio, Sharpe’s ratio, Jensen’s measure, Fama’s measure. Mean monthly (logarithmic) return and risk of the sample mutual funds schemes during the period were 0.49% and 7.10% respectively. The result of the performance measures suggests that most of the mutual fund schemes in the sample were able to satisfy investor’s expectations by giving excess returns over expected returns based on both premium for systematic risk and total risk.

2) (DR. V. RAMA DEVI AND MR. NOONEY LENIN KUMAR , 2012) Mutual funds are the ideal investment vehicles for today’s complex and modern financial scenario. Mutual funds which have been operating greater than five years and performing during the period of study (i.e. 2003-2007) are selected for the present research. The sample for the study consists of 137 debt mutual funds classified into five investment styles. The performance of selected funds is evaluated using average rate of return of fund, standard deviation, risk/ return, Sharpe ratio, Treynor’s ratio and Jensen ratio.

3) (MAMTA AND SATISH CHANDRA OJHA , 2017) In India the origin of mutual fund industry can be traced since the enactment of UTI Act, 1963. Mutual fund provides opportunities for small investors, to participate in the capital market without a very high degree of risk. The BSE Sensex has been used for market portfolio. The main aim of this paper is to evaluate the performance of Indian equity diversified mutual funds. The analysis was achieved by various financial test like average return, standard deviation, beta and coefficient of determination, Sharpe ratio & Treynor’s ratio.


3.1 Background of the Study

Mutual funds have emerged as a preferred investment avenue by various investors. SIP (Systematic Investment Planning) which is a new way of investment in mutual fund, play a key role in the creation of wealth. The investors can create wealth by investing a small sum of money every month in the selected mutual fund. Risk and return are the two important facts that needs to be considered while investing, so the return expected by the investors depends on their risk-

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taking capabilities. Before making an investment, the investors are required to evaluate various funds; a wrong investment into a fund may lead to capital loss to the investors.


There are two ways of investment in mutual funds: SIP (systematic investment planning) and Lump-sum method. The investor lacks knowledge of choosing the right method of investment. The investor finds it difficult to evaluate the performance of the fund to be invested, choosing a wrong fund may bring loss to the investor. For this purpose, six different equity growth funds (tax saving funds) or selected for evaluating the performance of the funds.

3.3 Need for the Study

The main aim of this project is to know about the mutual funds and its working. To gain knowledge regarding SIP (Systematic Investment Planning) which creates a wealth to the investor of started as earlier as possibly.

Before making any investment, it’s the duty of the fund manager to evaluate the performance of various fund. Hence through this study, an attempt is made to evaluate the performance of six selected funds.


1. To understand the concept of mutual fund 2. To get the better knowledge of SIP (Systematic Investment Planning) and its role in the

wealth creation. 3. To evaluate the performance of various funds using statistical tools such as Sharpe’s

measure, Treynor’s measure, and Jensen’s measure. 4. To know the volatility of the fund using beta and standard deviation.


The main scope of the study is to know about the importance of systematic investment planning and how it helps the investors in creating the wealth. The study also includes the analysis of risk and return of six different equity funds (tax saving funds)

3.6 Data Collected

The data is purely based on secondary source such as textbook and websites. The data is collected for a period of 6 months from January to June 2019.

3.7 Type of Research - The research is analytical in nature

3.8 Tools used for the Analysis - Standard deviation, Beta, Treynor’s, Sharpe and Jensen’s measure

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The study of this analysis is mainly based on historical data. The study is considered only for a period of six months ie., from January 2019 to June

2019. The study considers performance evaluation of only equity funds (growth).


Table 4.1 Risk Percentage (SD) of Equity Growth Funds of SBI (2019)

According to the risk percentage discovery fund in the month of May assumes higher risk of 15.88% compare to other months.

Table 4.2 Beta of Equity Growth Funds SBI (2019)

FUND NAME January February March April May June

BLUE CHIP FUND 0.89 0.91 0.9 0.92 0.91 0.91

MID CAP FUND 0.95 0.95 0.87 0.87 0.87 0.86

MULTI CAP FUND 0.97 0.97 0.95 0.91 0.91 0.91

SMALL CAP FUND 0.87 0.85 0.87 0.88 0.88 0.88

DISCOVERY FUND 0.88 0.87 0.85 0.85 0.85 0.86


BLUE CHIP FUND 13.82 13.72 12.77 12.31 12.3 5.81

MID CAP FUND 15.16 14.72 13.45 13 13 5.57

MULTI CAP FUND 15.15 15.09 13.87 12.67 12.67 4.26

SMALL CAP FUND 20.43 19.81 18.99 19.11 10.04 2.89

DISCOVERY FUND 16.65 16.52 15.79 15.92 15.88 3.34

EQUITY FUND 16.65 14.63 14.01 13.85 13.62 5.12

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EQUITY FUND 0.88 0.84 0.84 0.87 0.86 0.87

Based on Beta calculation, compared to all other schemes Multi Cap fund is more volatile and it has highest beta of 0.97 in the months of January and February 2019.

Table 4.3 Equity Growth Funds based on Sharpe’s Measure of SBI (2019)


BLUE CHIP FUND 5.23 5.065598 5.1409 5.21527 5.43089 5.81

MID CAP FUND 5.16 4.653533 4.8810 4.86153 5.52307 5.57

MULTI CAP FUND 3.91 3.87674 4.0843 4.43567 4.32517 4.26

SMALL CAP FUND 3.34 3.306411 3.3517 2.88854 5.35856 2.89

DISCOVERY FUND 2.89 3.359564 2.8910 2.83919 3.38790 3.34

EQUITY FUND 3.83 4.613807 5.2569 5.21299 5.27165 5.12

According to Sharpe’s performance Index Blue chip fund in the month of June has performed well compared to the other funds with the ratio of 5.81 followed by Mid Cap fund in the month of June having the ratio of 5.57. Based on the evaluation of historical data for six months period, it is evident that Blue Chip fund ranked first based on Sharpe’s ratio.

4.4 Equity Growth Funds based on Treynor’s Measure of SBI (2019)


BLUE CHIP FUND 81.2 76.37363 72.944 69.7826 73.4065 78.02

MID CAP FUND 82.38 72.10526 75.459 72.6436 82.5287 83.72

MULTI CAP FUND 61.1 60.30928 59.631 61.7582 60.2197 59.34

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SMALL CAP FUND 78.47 77.05882 73.160 62.7272 61.1363 62.5

DISCOVERY FUND 54.85 63.7931 53.705 53.1764 63.2941 63.95

EQUITY FUND 68.17 80.35714 87.678 82.9885 83.4883 80.46

According to Treynor’s performance Index Equity Fund in the month of march gets the highest risk premium of 87.67 followed by Mid Cap fund in the month of May 82.52. Mid Cap & Equity fund performance is outstanding with respect to Beta.

Table 4.5 Equity Growth Funds based on Jensen’s Performance of SBI (2019)


BLUE CHIP FUND 88.98 83.92 80.34 79.63 80.66 85.08

MID CAP FUND 91.69 81.18 84.38 84.01 91.3 92.29

MULTI CAP FUND 69.66 68.64 70.43 72.38 68.25 67.18

SMALL CAP FUND 88.56 86.92 82.86 74.89 70.69 71.86

DISCOVERY FUND 65.1 73.82 63.58 65.49 60.61 73.48

EQUITY FUND 75.68 87.63 94.8 92.56 90.45 87.23

According to Jensen’s performance Index Mid Cap fund and Equity funds has the highest alpha. These schemes investors can considered for the investments. 5. FINDINGS

January

Small cap fund assumes higher risk percentage (SD) of 20.43% and according to Beta, multi cap fund is more volatile with highest beta of 0.97.

According to Shape’s performance index, blue chip fund has performed well compared to other funds with the ratio of 5.23, followed by mid cap fund having the ratio of 5.16.

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According to Treynor’s performance index, mid cap fund gets the highest risk premium of 82.38 followed by blue chip fund with the risk premium of 81.2

According to Jensen’s performance index, mid cap fund has the highest alpha of 87.11, followed by blue chip fund with the alpha of 79.19.

According to analysis of the funds, mid cap funds is performing well when compared to the other funds.

February



According to Treynor’s performance index, Equity cap fund gets the highest risk premium of 80.35 followed by small cap fund with the risk premium of 77.05



March


According to Shape’s performance index, Equity fund has performed well compared to other funds with the ratio of 5.25, followed by blue chip fund having the ratio of 5.14.

According to Treynor’s performance index, Equity cap fund gets the highest risk premium of 87.67 followed by mid cap fund with the risk premium of 75.45.

According to Jensen’s performance index, equity fund has the highest alpha of 79.63, followed by mid cap fund with the alpha of 73.41.

According to analysis of the funds, equity funds is performing well when compared to the other funds.

April

Small cap fund assumes higher risk percentage (SD) of 19.11% and according to Beta, blue chip fund is more volatile with highest beta of 0.92.

According to Shape’s performance index, blue chip fund has performed well compared to other funds with the ratio of 5.23, followed by equity fund having the ratio of 5.21.


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According to Jensen’s performance index, equity fund has the highest alpha of 80.53 followed by blue chip fund with the alpha of 73.26

According to analysis of the funds equity funds is performing well when compared to the other funds.

May

Discovery cap fund assumes higher risk percentage (SD) of 15.88% and according to Beta, multi cap fund and blue chip is more volatile with highest beta of 0.91.

According to Shape’s performance index, mid cap fund has performed well compared to other funds with the ratio of 5.52, followed by blue chip fund having the ratio of 5.43.


According to Jensen’s performance index, mid cap fund has the highest alpha of 79.43, followed by equity fund with the alpha of 77.79.


June

Small cap fund assumes higher risk percentage (SD) of 18.99% and according to Beta, blue chip fund is more volatile with highest beta of 0.91.


According to Treynor’s performance index, mid cap fund gets the highest risk premium of 83.72 followed by equity fund with the risk premium of 80.46.


According to the analysis of the funds, mid cap fund is performing well when compared to other funds.

6. SUGGESTIONS

Always there is a variation in the returns of equity schemes compared to the other schemes like tax saving and balanced saving scheme. So, if the investor wants to make on invest in equity schemes they can take the decision based on past performance of the scheme. Always it’s better to analyze the current prices for the decision making.

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Under mutual fund industry, if the investor is not ready to take much risk. Then in that case he can prefer to go for selecting the public company schemes compared to private company schemes for the investment.

Risk lovers can select small cap fund for investments Investors can blindly go for investments into mid cap and equity funds because of

their outstanding performance.

7. CONCLUSION

Mutual fund is one of the investment avenue which pools money from different investors having common financial goal. The investment risk can be minimized through diversification. They offer professionally managed basket of securities at a relatively lower cost for the common investors. Systematic investment plan is a new method of investment into mutual funds. It helps the investors to invest consistently. The investment in equity through systematic investment plan can help the investors tackle the changing market scenario. Systematic investment plan is an inflexible investment program and expensive if withdrawn early. Performance evaluation is an important step that should consider before investment because once the wrong investment is made it may encourage capital loss to investor.

BIBLIOGRAPHY

Dr. V. Rama Devi and Mr. Nooney Lenin Kumar (2012), Performance Evaluation of Debt Mutual Fund in India.

Narayan Rao Sapar (2003), Performance Evaluation of Indian Mutual Funds. Rajesh Kumar and R.S. Arora (2013), Investors Perception about Mutual Funds in India. Dr. B Nimalathasal and Mr. R Kumar Gandhi (2012), Comparitive Study on Equity

Diversified Schemes and Equity Mid-Cap Schemes. Dr. J K Raju and Mr. Manjunath B R (2015), Performance Evaluation of Indian Equity

Mutual Funds Schemes.

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Books

Punithavathy Pandian, “Security Analysis and Portfolio Management”, Himalaya Publications.

Websites

www.investopedia.com www.wikipedia.com www.moneycontrol.com www.nism.com

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