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CERTIFICATE OF GUIDANCE

This is to certify MR.KUMAR GAURAB BORAH, ROLL NO.106222, a bonafide student of MANAGEMENT EDUCATION & RESEARCH INSTITUTE, NEW DELHI, has conducted a project titled A STUDY ON THE IMPACT OF THE MERGER BETWEEN INDUSIND BANK AND ASHOK LEYLAND FINANCE. This project report is submitted in the partial fulfillment of the requirement or the summer internship project during the post graduate diploma in business management, a prestigious PG DIPLOMA awarded by MANAGEMENT EDUCATION &RESEACH INSTITUTE, new delhi.PROJECT GUIDE:

MR. S.M. JHA

BRANCH MANAGER,

VEHICLE FINANCE DIVISION,

INDUSIND BANK, GUWAHATI, ASSAMStudent DeclarationI, Mr. KUMAR GAURAB BORAH, ROLL NO.106222, the undersigned, a student of MANAGEMENT EDUCATION AND RESEARCH INSTITUTE, NEW DELHI declare that this project report titled A STUDY ON THE IMPACT OF MERGER BETWEEN INDUSIND BANK AND ASHOK LEYLAND FINANCE, is submitted in partial fulfillment of the requirement for the summer internship project during the Post Graduate Diploma in Business Management, a prestigious Post Graduate Diploma awarded by MANAGEMENT EDUCATION AND RESEARCH INSTITUTE, NEW DELHI.

.

This is my original work and has not been previously submitted as a part of another degree or diploma of another Business school or University.

The findings and conclusions of this report are based on my personal study and experience, during the tenure of my summer internship.

Mr. KUMAR GAURAB BORAH, PGDBM 2006-08,MANAGEMENT EDUCATION AND RESEARCH INSTITUTE53-54, institutional area, Janak puri,

NEW DELHI-110058

Phone: 011-28522201-04

PrefaceKnowledge without practice is incomplete. So if there is only theoretical knowledge it is always incomplete without the practical knowledge. It helps us to clear our ideas in a better way. Summer project is one of the ways of gaining practical knowledge. It helped me to clear my concepts and better understand them. Summer project is always a good record a student has made during his academics.

AcknowledgementA project of this magnitude requires the cooperation of many people. I would like to thank all the people whose professional and personal assistance helped in successfully completing this project. First of all I would like to thank MANAGEMENT EDUCATION AND RESEARCH INSTITUTE, the institute as a whole where I am pursuing my Post Graduate Diploma in Management .This report would not have been possible without the continuous support and in-depth knowledge of the project provided by the project guide Mr.S.M. JHA, BRANCH MANAGER,VEHICLE FINANCE DIVISION, INDUSIND BANK,GUWAHATI .I would like to express my sincere thanks to Mr.DIPANKAR CHOUDHURY and Miss.BHANITA TALUKDAR, EXECUTIVE TRAINEE, for their great help and encouragement rendered by them in joining and doing this project.

I am also thankful to Mr.RANJIT, Mr.PANKAJ, Mr. SWAMINATHAN and Mr.Ramesh ,ASSTT. MANAGER TRAINEE, INDUSIND BANK for providing a comprehensive review and numerous suggestions on improving

the content of this report.

Finally, I am very thankful to my Parents to share there personal view with me, my all friends and the respondents who contributed with excellent feedback and suggestions for drafting this report. EXECUTIVE SUMMARYCommercial vehicles influence the trade, commerce and industry of a country in a major way. Vehicles falling under this category are buses, trucks, ambulance, jeeps and many others. It comes in various uses such as transportation of goods, shipping and handling of various commodities and so on. The future of companies manufacturing these vehicles is very bright due to India's growing commercial sector. The export of commercial vehicles has gone up to 72% breaking all previous records. The merger with the Bank in June 2004 of Ashok Leyland Finance Ltd., among the largest leasing finance and hire purchase companies in India, set in motion a process of consolidation through the combined customer base of the merged entity and its increased geographical penetration. IndusInd Bank has become one of the fastest-growing banks in the Indian banking sector today with its branch network expanding from 61 as on March 31, 2004 to 137 as on March 31, 2006 reflecting an increase in excess of 125% in 24 months.My project deals with the analysis of the effect of the merger between INDUSIND BANK AND ASHOK LEYLAND FINANCE. To know the financial position of the organization and to compare the financial condition between pre and post merger period, ratio analysis has done to know the condition. Questionnaire is prepared for the purpose of taking the response from the customers and to analyze the merger from the information given by them. Other important information is collected from the employees through personal interview.From the analysis part of view it is come to know that 2006 financial year was not a good year for the bank as the performance is below average. It is also clear from the analysis of vehicle finance division that customers who are having more than 3 vehicles are satisfied with bank but most of the new customers are not satisfied with the services provided by bank because according to them the process is quite time consuming.The recommendation to GUWAHATI BRANCH is that to check the customers viability and payment track record properly to decrease default cases .The company should go for aggressive marketing and the company must look for increasing the rate of new customers because old customers already near to reach their saturation point.OVERVIEW OF INDUSIND BANKIndusInd Bank derives its name and inspiration from the Indus Valley civilization - a culture described by National Geographic as 'one of the greatest of the ancient world' combining a spirit of innovation with sound business and trade practices.

Mr. Srichand P. Hinduja, a leading Non-Resident Indian businessman and head of the Hinduja Group, conceived the vision of IndusInd Bank - the first of the new-generation private banks in India - and through collective contributions from the NRI community towards India's economic and social development, brought our Bank into being.

The Bank, formally inaugurated in April 1994 by Dr. Manmohan Singh, Honorable Prime Minister of India who was then the countrys Finance Minister, started with a capital base of Rs.1,000 million (USD 32 million at the prevailing exchange rate), of which Rs.600 million was raised through private placement from Indian Residents while the balance Rs.400 million (USD 13 million) was contributed by Non-Resident Indians.

A NEW ERA

The merger with the Bank in June 2004 of Ashok Leyland Finance Ltd., among the largest leasing finance and hire purchase companies in India, set in motion a process of consolidation through the combined customer base of the merged entity and its increased geographical penetration. IndusInd Bank has become one of the fastest-growing banks in the Indian banking sector today with its branch network expanding from 61 as on March 31, 2004 to 137 as on March 31, 2006 reflecting an increase in excess of 125% in 24 months. The Bank has approximately 150 ATMs of its own, and has concluded multilateral arrangements with other banks with a total network of 15,000 ATM outlets. All the outlets of the Bank, including its branches and ATMs, are connected via satellite to its central database that operates on the latest version of IBMs AS400-720 series hardware and Midas Kapiti (now, Misys) software.

IndusInd Banks broad lines of business include Corporate Banking, Retail Banking, Treasury and Foreign Exchange, Investment Banking, Capital Markets, Non-Resident Indian (NRI) / High Net worth Individual (HNI) Banking, and (through subsidiary) Information Technology.

Indus Ind Bank provides multi-channel facilities including ATMs, Net Banking, Mobile Banking, Phone Banking, Multi-city Banking and International Debit Cards. It was one of the first banks to become a part of RBIs Real Time Gross Settlement (RTGS) system. It has implemented an enterprise-wide risk management system encompassing global best practices in the area of Risk Management, with help from KPMG. This has enabled the Bank to remain in the forefront in complying with the requirements of Basel II. It is the first bank in India to receive ISO 9001:2000 certification for its Corporate Office and its entire network of branches.

With its roots in Indian tradition and emphasis on customer care, IndusInd Banks service philosophy is well reflected in the communication tagline We Care Dil Se.

Business AchievementsYear2006-07

Net worth crossed a milestone figure of Rs. 1000 crores at Rs. 1056 crores

Successful completion of GDR issue of Rs. 145.96 crores

Business Turnover touched a figure of Rs 28,700 crores registering a growth of 18.14% over the previousyear.

Network of Branches increased to 170 along with 99 off-site ATMS, thushaving presence in over 141 geographical locations spread over 27 States including Union Territories.

Highest A1+ rating for its Certificates of Deposits by ICRA and Highest P1+ rating for its FDs by CRISIL.

Bestowed with the prestigious IBA Award for technology implementation (STP).

Added a number of new business and product lines, viz. the launch of Indus GOLD Debit Card and Indus Gift Card, E-Remittance facility, tie-up with number of Banks for ATM usage, tie-up with Religare Securities to extend Portfolio Management services and Bancassurance tie-up with Aviva Life Insurance

2005-06 Ranked among the top ten banks in the country in the ET500 list of leading companies in India.

Rated as The best among the top 10 private-sector banks in a survey covering 79 banks conducted by Business Standard in its November 2005 issue. Ranked sixth in the overall list, the Bank was also identified he Most Efficient Bank among all banks in India.

Bestowed Indias Most Productive Bank status by a Business Today- KPMG Survey

Presented Outstanding Achiever of the Year 2005- Corporate (Runner up- Banking TechnologyAward) by IBA, Finacle (from Infosys) and TFCI (Trade Fair and Conference International).

Honored with the Award for Corporate Social Responsibility (CSR) at the India Brand Summit 2005, Mumbai.

2004-05 Business Turnover crossed Rs. 22000 crores

Network grew to 115 branches, 9 extension counters and 195 ATMs, spread over 95geographicallocations.

Bestowed with highest ratings for deposits from reputed rating agencies

Highest rating P1+ - on Fixed Deposits from CRISIL

Highest rating P1+ - on Certificate of Deposits from CRISIL

Highest rating F1+ - on Certificate of Deposits from Fitch Ratings India Pvt. Ltd.

2003-04 Total business volume touches Rs. 19,000 crores.

Completes 10 years of banking excellence.

Ashok Leyland Finance merges with the Bank.

The first Indian Commercial Bank to achieve certification for its Entire Network of Branches under the ISO 9001:2000 Quality Management System.

Launch of Debit Card- International Power Card.

Banks first International Representative Office in Dubai.

One of the first banks to go live on RTGS platform.

2002-03

One of the first banks to implement the RBI- Electronic Funds Transfer scheme.

2001-02 Total business volume touches Rs. 14,000 crores. Highest productivity in the Indian banking sector with Rs. 16 crores of business per employee.

2000-01 Total business volume crosses Rs. 10,000 crores.

1998-99 IndusInd again rated as one of the Top Performing Banks in various survey reports, for the second year in succession.

1997-98 IndusInd rated as one of the Top Performing Banks in various survey reports.

1996-97 Pioneer in launching Internet Banking1994-95IndusInd Bank comes into existence. Completes first profitable year of operationsMISSION To emerge as an international bank with traditional roots.

To acquire global capabilities

To provide world-class services

To maintain the highest standards of professionalism and integrity.

LOGOS & IMAGES Trust, Clarity of vision, Calmness, Communication, Truth, Stability,

Harmony, Modernity. Creativity, Imagination, Expression, Energy, Expansiveness,

Innovation, Warmth, Friendly,Approachability.

Strength, Power, Passion, Authority, Reliability, Dependability,

Efficiency

INTRODUCTION TO THE VEHICLE FINANCE The British concept of hire-purchase has, however, been there in India for more than 6 decades. The first hire-purchase company is believed to be Commercial Credit Corporation, successor to Auto Supply Company. While this company was based in Madras, Motor and General Finance and Installment Supply Company were set up in North India. These companies were set up in the 1920s and 1930s.

Development of Hire-purchase took two forms: consumer durables and automobiles.

Consumer durables hire-purchase was promoted by the dealers in the respective equipment. Thus, Singer Sewing Machine company, or Murphy radio dealers would provide installment facilities on hire-purchase basis to the customers of their products.

The other side developed very fast - hire-purchase of commercial vehicles. The dealers in commercial vehicles as well as pure financing companies sprang up. The value of the asset being good and repossession being easy, this branch of financing activity flourished fast, although until recently, most of automobile financing business was in hands of family-owned businesses.

Essentially, asset-based financing in India particularly by non-banking financial companies is split in two documentation modes - lease and hire-purchase. These two are technically different instruments, but in essence, there is not much that differs between the two, except for the caption. In spite of the substantive similarity, historically, there has been a diametric separation between these two forms. The assets usually subject matter of hire-purchase has been different from those generally leased out. Leasing has been used mostly for plant and machinery, while hire-purchase has commonly been used for vehicles. Even the players have been different.

The reasons for this diametric distinction are more historical than logical. Hire-purchase, essentially a British form, entered India during the Colonial era, and thrived as almost the only form of external finance available for commercial vehicles. For the financiers, as witnessed World-over, commercial vehicles were the natural choice for several asset-features he loves: lasting value, ready secondary market, self-paying feature, etc. Hence, the industry of hire-purchase became synonymous with truck-financing. Besides, the motor vehicles laws gave the surest legal protection any law could give to a financier: the financier would not have to carry any of the operational risks of a motor vehicle, and yet, any transfer of the vehicle would not be possible without the financier's assent.

Leasing, essentially a US-innovation, entered the country significantly in the early 80s, and was propagated as an alternative to traditional modes of industrial finance. Besides, the early motivation (which continues with a number of players even now) of leasing was capital allowances, more significantly the investment allowance, which was not available for transport vehicles. Hence, the leasing form historically clung to industrial plant and machinery.

For several years, there was no lease of vehicles, because the Motor Vehicles law protection was not applicable to a lease, and there was no investment allowance on vehicles, and for reciprocal reasons, there was no hire-purchase of industrial machinery.

These reasons have vanished over time.

The Motor Vehicles law now treats leases and hire-purchase at par from the viewpoint of financier-protection.

Investment allowance has been abolished, and hence, there are no predominant tax-preferences to a lease.

The RBI treats lease and hire-purchase at par and has stopped giving a distinctive classification to leasing and hire-purchase companies.

The accounting norms lead to the same effect on pre-tax income, as also balance sheet values, be it a lease or hire-purchase transactions.

Therefore, income-tax and sales-tax treatment apart, there is not much that is different between lease and hire-purchase. The choice between the two is by and large open, subject to tax consequences.

Broadly, the following factors have been responsible for the growth of VEHICLE FINANCE:

No entry barriers - any one could float a leasing entity, and even an existing company not in leasing business can write a lease purely for tax shelters.

Buoyant growth in capital expenditure by companies - The post -liberalization era saw a spate of new ventures and fresh investments by existing venturers. Though primarily funded by the capital markets, these ventures relied upon leasing as a source of additional or stand-by funding. Most leasing companies, who were also merchant bankers, would have funded their clients who hired them for issue management services.

Fast growth in car market: Needless to state with facts, the growth in car leasing volume has been the highest over these years - the spurt in car sales with the entry of several new models was funded largely by leasing plans.

Tax motivations: India continues to have unclear distinction between a lease that will qualify for tax purposes, and one which would not. In retrospect, this is being realized as an unfortunate legislative mistake, but the absence of any clear rules to distinguish between true leases and financing transactions, and no bars placed on deduction of lease tax breaks against non-leasing income, propelled tax-motivated lease transactions. There was a growing market in sale and leaseback transactions, which, if tested on principles of technical perfection or financial prudence, would appear to be a shame on everyone's face.

Optimistic capital markets: Data would establish a clear connection between bullish stock markets and the growth in both number of leasing entities and lease volumes. Year 1994-1995 saw the peak of primary market activity where a company, even if a new entrant in business, could price itself on unexplainable premium and walk out with pride.

Access to public deposits: Most leasing companies in India have relied, some heavily, on retail public funds in the form of deposits. Most of these deposits were raised for 1 year tenure, and on promise of high rates of interest, at times even more than the regulated rate (which was lifted in 1996 to be reintroduced in 1998).

A generally go-go business environment: At the backdrop of all this was a general euphoria created by liberalisation and the economic policies of Dr. Manmohan Singh.

The current problems of Indian VEHICLE FINANCE could be listed as follows, again without any order of listing:

Asset-liability mismatch: Most non-banking finance companies in India had relied extensively on public deposits -this was not a new development, as the RBI itself was constantly encouraging and supporting the deposit-raising activities of NBFCs. If the resulting asset-liability mismatch, to everybody's agreement, is the surest culprit of all NBFC woes today, it must have been a sudden realization, because over all these years, each Governor of the RBI has passed laudatory remarks on the deposit-mobilization by NBFCs knowing fully well that most of these deposits were 1-year deposits while the deployment of funds was mostly for longer tenures. It is only the contagion created by the CRB-effect that most NBFCs have realized that they were sitting on gun-powder all these years. The sudden brakes put by the RBI have only worsened the mismatch.

Generally-bad economic environment: Over past couple of years, the economy itself has done pretty badly. The demand for capital equipment has been at one of the lowest ebbs. Automobile sales have come down, corporate have found themselves in a general cash crunch resulting into sticky loans.

Poor and premature credit decisions in the past: Most NBFCs have learnt a very hard way to distinguish between a good credit prospect and a bad credit prospect. When a credit decision goes wrong, it is trite that in retrospect, it invariably seems to be the silliest mistake that ever could have been made, but what Indian leasing companies have suffered are certainly problems of infancy. Credit decisions were based on a pure financial view, with asset quality taking a back-seat.

Tax-based credits: In most of the cases of frauds or hopelessly-wrong credit decisions, there has been a tax motive responsible for the transaction. India has something which many other countries do not- a 100% first year depreciation on several assets. Apparently, the list of such assets is limited and the underlying fiscal rationale quite holy and sound - certain energy saving devices, pollution control devices etc qualify for such allowance. But that being the law, it is left to the ingenuity of our extremely competent tax consultants to widen the range with innovative ideas of exploiting these entries in the depreciation schedule. Thus, there have been cases where domestic electric meters have been claimed as energy saving devices, and the captive water botanizer in a hotel has been claimed as water pollution control device ! As leasing companies were trying to exploit these entries, a series of fraudsters was successful in exploiting, to the hilt, the propensity of leasing companies to surpass all caution and all lending prudence to do one such transaction to manage its taxes, and thus, false papers for non-existing wind mills and never-existing bio-gas plants were fabricated to lure leasing companies into losing the whole of their money, to save the part that would have gone as government taxes !

Extraneous problems - frauds, closures and regulation: As they say, it does not rain, it pours. Several problems joined together for leasing companies - the public antipathy created by the CRB episode and subsequent failures of some good and several bad NBFCs, regulation by the RBI requiring massive amount of provisions to be created for assets that were non-performing, etc. It certainly was not a good year to face all these problems together.

Commercial Vehicles in India

Commercial vehicles influence the trade, commerce and industry of a country in a major way. Vehicles falling under this category are buses, trucks, ambulance, jeeps and many others. It comes in various uses such as transportation of goods, shipping and handling of various commodities and so on. The future of companies manufacturing these vehicles is very bright due to India's growing commercial sector. The export of commercial vehicles has gone up to 72% breaking all previous records. Commercial Vehicles- Ambulance ,

Buses

Trucks

Tractors

Defence Vehicles Construction EquipmentsAmbulances- Force Motors, Hindustan Motors Ltd. Mahindra & Mahindra Ltd. Maruti

Udyog Ltd. Swaraj Mazda.

Buses- Ashok Leyland, Eicher, Force Motors, Hindustan Motors Ltd. Mahindra &

Mahindra Ltd. Swaraj Enterprise, Tata Motors, Volvo.Trucks- Ashok Leyland, Eicher, Force Motors, Hindustan Motors Ltd. Mahindra &

Mahindra Ltd. Swaraj Mazda, Tata Motors, VolvoTractors- Escorts ltd. Force Motors, Swaraj EnterpriseDefence Vehicles- Ashok Leyland

HYPERLINK "http://auto.indiamart.com/defence-vehicles/index.html" \l "mahindra" Mahindra & Mahindra Ltd. Tata MotorsConstrConstruction Equipments- Bharat Earth Movers Ltd , Eicher,Telcon

HYPERLINK "http://auto.indiamart.com/construction-equipments/index.html" \l "terex-vectra" Terex,

Vectra,Volvo MotorsCommercial Vehicle Loan

Eligibility

> You or your guarantor should have at least 3 years experience in relevant transport

operations. If you are new to this field, your guarantor should meet this criterion. > You or your guarantor should own at least one free vehicle. > You or your guarantor should have been a resident of that area at least for three years.> You or your guarantor should own immovable unencumbered property equivalent to the amount financed and a copy of the property deed and tax paid challan to be furnished.> Cash generation potential from the vehicle should be at least 1.3 times of the installment payable after meeting all operational expenses.> Your guarantor should be known to you and should preferably be our existing customer. He should not be your relative.> For special purpose vehicle (eg. Tippers), you should have concluded contracts covering at least 50% of the proposed contract tenure.

Purpose:

For the purchase of new and used commercial vehicles of all manufacturers.

Documents

> Proof of residence - Ration card or Passport copy or Voter's ID> Contract copies for special purpose vehicles/ vehicles deployed against specific contracts> Statement of earlier loans taken> Copy of property deed for immovable property owned> RC book photocopies for vehicles owned> Copy of Income Tax and Wealth Tax returns for past two years> Details of your guarantor - his business, net worth, IT returns & Wealth Tax term copies

Partnership Firms

> Partnership Deed and authorization letter for partnership firms. > Profit and Loss account and Balance Sheet for past 2 years.> Registration Certificate > Contract copies for special purpose vehicles/ vehicles deployed against specific contracts> Statement of earlier loans taken > Copy of property deed for immovable property owned > RC book photocopies for vehicles owned> Details of your guarantor - his business, networth, IT returns & Wealth Tax term copies.

INDUSIND BANKVEHICLE FINANACE DIVISION:Vehicle finance division in INDUSIND BANK is divided into two parts.

1) Commercial vehicle division (earns and pays)

2) Personal product division (use and pay)

For commercial vehicle loan the executive has to evaluate the customers

a) Viability

b) Repayment culture

In viability, the income source, property, market reputation of the customers has to be calculated.

The repayment culture means how the customer is repaying his previous loans taken from bank or financial institute (NBFC).For PPD, the customers permanent income source is preferred.

PROCESS HEADINGS1) Business sourcing

2) Viability

3) Customer identification

4) Credit appraisal

5) Proposal

6) Approval

7) Documentation

8) Administration

9) Collection

10) Repossession

11) Closing of deal by using form 35.DETAILS ABOUT THE PROCESS1) BUSINESS SOURCING:

Business sourcing can be made by banks own approach, existing customers and dealers.

a) Direct (existing customers) 70%-80%

b) Dealers 10%-15%

c) Direct marketing associates 5%-10%2) VIABILITY:

In viability, the bank evaluates whether the customer who has taken loan is capable of paying the EMIs regularly or not.

3) CUSTOMER IDENTIFICATION:

Customer identification is done by field investigators. Customers photo and domicile profile is required.

4) CREDIT APPRAISAL:

For credit appraisal

a) Bank statement.

b) Balance sheet and profit & loss account.

c) RC book.

are required.

5) PROPOSAL:

The proposal is made by BRANCH HEAD at bank desire IRR and should be sent to head office for approval.

6) APPROVAL:

If the head office finds the proposal suitable then the proposal is approved and sends it back to branch office. If any rectification has to be made then the head office informs branch office to rectify the errors.

7) DOCUMENTATION:

Documentation is to be collected for asset protection.

a) in-voice

b) RC book

c) Insuranced) Tax challan.

8) ADMINISTRATION:

Administration is responsible for keeping the record properly in daily basis. Administration also updates the knowledge about competitors market policies.

9) COLLECTION:

The EMIs has to be collected by collection executives. The collection executives informs the customers regularly how much they have to pay for that period

10) REPOSSESION:

If any customer willingly or unwillingly not paying the installments then his vehicle is reposed by bank through legal procedures. The customer has to pay repossession charge with due EMIs within 3 months otherwise the vehicle can be sale bank in market.

11) CLOSURE OF DEAL BY USING FORM 35:

The bank gives NOC with form 35 to the customer for submit in the transport office state indicating the owner of the vehicle from then onward is the customer.

INDUSIND BANKSs EVALUATION CRITERIA OF CUSTOMER IN

VEHICLE FINANCE DIVISIONa) Experience

b) Market reputation

c) Nature of the product

d) Viability of the project.

e) Domicile

f) Repayment track record

g) Property

h) Fleet strength

i) Guarantor.

LEGAL PROCESSES OF INDUSIND BANK (VEHICLE FINANCE DIVISION):

a) Cash collection register is must in each branch.

b) CMS/CRA on a daily basis.

c) Demand list stored out by field officer/collection executives.

d) Branch incharge to decide when to repossess a vehicle.

e) Field officer prepares expense statements & branch has to ensure regularly.

f) Statement of account corrections must be initiated by branch.

g) NOC request to be made from branch.

h) Use sop (state office protocol) to post flag.

BUSINESS ROLE OF EMPLOYEES: a) Business role of business executives:

1) Business executives should visit the dealer point daily.

2) Price list of all products should be available.

3) Monthly sales figure details has to be collected and the same has to be forwarded to department head/hub head.

4) Collect details of competitors activities.

5) Develop reputation of bank.

b) Business role of field investigator:

1) Establish contact with customer/guarantor

2) Check the correctness of address.

3) meet the customer at his/her residence.

4) Collect the information about reputation of the customer.

c) Business role of branch head:

1) Branch head should visit dealerships once in a week.

2) Update knowledge about competitors movement.

3) Control of all business activities.

ABOUT THE

MERGER BETWEEN

INDUSIND BANK

&

ASHOK LEYLAND FINANCE

INTRODUCTION:The Honorable High Courts of Mumbai and Chennai have cleared the merger, as has Reserve Bank of India. The merger was effective from April 1, 2003.The Board of Directors of IndusInd Bank 29 JUNE 2004 adopted the Audited Financial results for the year ended March 31, 2004. The Audited results represent the consolidated profit & loss accounts and balance sheets of IndusInd Bank Ltd. (IBL) and Ashok Leyland Finance Ltd. (ALFL).MERGER VALUE

IndusInd Bank: BuyAshok Leyland Finance: Hold

FRESH investments can be considered in the stock of IndusInd Bank. The earnings per share works out to Rs 7.2 for the nine months ended December 2003 for the combined earnings of IndusInd Bank and Ashok Leyland Finance on the expected equity of the combine, post-merger. Given the IndusInd stock price of Rs 40, the price-to-earnings multiple works out to about four on the likely earnings per share for the year ended March 2004.

IndusInd is not one of the fastest growing private sector banks. It has had trouble matching up to competition. The quality of its assets has also been inferior compared with competition, and the situation is only now on the mend.

The mergers of the finance firms of the Hinduja group with the bank is also a negative factor from a corporate governance perspective. The stock's valuation, however, has factored in these negative aspects. Besides, the combination with Ashok Leyland Finance gives the bank the impetus to achieve growth in future.

A picture of contrast

In line with past trend, the operating performance of Ashok Leyland Finance was superior to that of IndusInd Bank for the three-month period ended December 2003. The net interest income of Ashok Leyland Finance rose impressively by 20 per cent. (Net interest income is the difference between interest income and interest expenses.) In contrast, the net interest income of IndusInd Bank remained stagnant.

At the profit level, though, Ashok Leyland Finance reported a marginal decline while IndusInd Bank reported a massive 200 per cent rise. Ashok Leyland Finance attributed the sharp rise in operating expenses to the decrease in profit. In the case of IndusInd, profit on sale of treasury securities boosted net profit. The fall in provisions for bad loans also helped the growth in profit.

The performance of IndusInd Bank in the first six months of the year (that is, April to September 2003) has also been impressive. Net interest income rose sharply by more than 200 per cent. A combination of growth in interest income and reduction in interest expenses led to the improvement.

In the first three months of 2003-04, IndusInd Bank merged with itself another non-banking finance company (NBFC) belonging to the Hinduja group. The financial performance in the first nine months appears to suggest that the merger has not been detrimental to the interests of IndusInd Bank shareholders. In contrast, the profit performance of Ashok Leyland in the first six months of the year has not been impressive. Profits have remained stagnant.Merger value Considering the faster growth at Ashok Leyland Finance and the superior quality of its assets, the merger did not appear to suit the interest of its shareholders. The share-swap ratio, however, appears to have taken care of these factors. The merger reduces the earnings per share for the shareholders of IndusInd Bank.

In addition, the NBFC's profit growth in 2003-04 has not been impressive and the stock of IndusInd Bank is as under valued as that of Ashok Leyland Finance. These issues reduce the disadvantages associated with a merger for the shareholders of the NBFC. In addition, it is highly likely that the dividend yield post-merger is likely to be as much as what it was pre-merger. In this context, shareholders of Ashok Leyland Finance can continue to hold.

IMAGE POST MERGER TO COME HERE:

The post-merger focus of the Bank will be the building up of relationships, development of new products and services, further technology upgradation, international footprinting, and increasing the number of branches as well as offsite ATMs to service customers better. Technology has always been a cornerstone for the Bank, and its technology subsidiary will be utilized to its fullest to help the Bank attain technological excellence. ALFL, Indias largest NBFC (as per latest CRISIL data) with assets of over Rs 3000 crore, a client base of 500,000, a large network of offices spread across the country, and a demonstrated capability to generate good quality retail assets, augurs well for IBL. Post merger, the results of the Bank combined with ALFIN's assets/revenue/profit, should substantially enhance the position of the consolidated entity in the banking sector.According to Bhaskar Ghose, Managing Director & CEO the merger is beginning for the new IndusInd Bank. The new emphasis on retail banking will see IndusInd Bank scaling new heights in the years to come. At the same time, Indusind bank will focus on the corporate side too. The SME segment remains a major growth driver for Indusind bank. But the thrust will now be largely on retail banking, considering the advantages that the bank have achieved through this merger. The synergies of the two organizations will now be realized to help bank customers' access products and services, which might not be available at other banks. The merger brings for Indusind bank new customers, new businesses, and new geographical reach,. Technology will remain a cornerstone in the growth momentum of the Bank, and a differentiator from other players in the banking system.

S Nagarajan, Joint Managing Director, exuded optimism about the future of the merged entity and said: "The merger is extremely synergistic for IndusInd Bank. The erstwhile ALFL will now have access to a stable source of low cost funds, while IndusInd Bank gets into areas hitherto unexplored by retail banks. The technological prowess of ALFL also has a neat fit with the existing technological excellence achieved by IndusInd Bank. We hope to take the Bank to newer heights in the days to come."

Network

IndusInd Bank now has 62 branches, 12 extension counters and 80 offsite ATMs. The Bank intends to convert 132 branches of ALFL into full-fledged Bank branches in a phased manner. In its international operations too, IndusInd Bank has moved forward. While its Dubai office was launched last October, IndusInd Bank's London office has started operating from today.

Technology:Technology has been a consistent strength of the Bank in its decade-long existence. While Internet banking and mobile banking were features added to the Bank's offerings way back in 1996 and 1997. IndusInd Bank notched up a new milestone by becoming one of the very first banks to implement RTGS on its systems after RBI's approval. Now, the Bank has installed and configured online real-time replication of data software - both on its production and DRS Systems located in Mumbai and Hyderabad respectively with effect from 20th June 2004.

Commenting on this, Bhaskar Ghose said: "We have completed the testing of these systems under different conditions and are very pleased with the results. We have now gone "live" with this facility. Currently all transactions - both customer and internal - of the Bank originating from all its delivery channels like branches, ATMs, Internet banking and other interface applications like BSE, NSDL, etc are replicated on our DRS system on-line real-time."

IndusInd Information Technology Ltd., a subsidiary of IndusInd Bank, is the driving force for technology in the Bank. Further, after the merger of ALFL with the Bank, Alfin Wind Energy Ltd., Alfin Services and Solutions Pvt. Ltd. and ALF Insurance Services Pvt. Ltd. - subsidiaries of ALFL - have now become contributors to the Bank.

Post-Merger Developments

The performance of the Bank for the period under review reflects the significant impact of the synergy of combined operations following the merger of the erstwhile Ashok Leyland Finance with your Bank. There has been a marked improvement in the financial position, geographic presence and asset portfolio both, in the corporate and retail businesses of your Bank.In the post-merger scenario, the network of the Bank has increased from 61 branches and 12 extension counters as on 31st March 2004 to 115 branches and 9 extension counters as on 31st March 2005.It is against this background that I would like to briefly share with you an overview of the Banks operations. A)Operating Performance

There has been a distinct and positive shift in our Banks income streams. Added to this, our Bank reduced its reliance on sale of investments as a major source of earnings, thereby ensuring long-term growth and sustainability of earnings.our Bank reported a lower operating profit of Rs. 446 cr and net profit of Rs. 210 cr during 2004-05, compared to previous years figures of Rs. 481 cr and Rs. 262 cr respectively, mainly on account of substantially lower profit from trading in securities caused by the industry-wide hardening of interest rates - the profit from trading on securities was about 58 cr in contrast to Rs. 227 cr in the previous year.The total deposits as on March 31, 2005 aggregated to Rs. 13,114 cr a growth of 17% compared to the previous year. Net advances (net of securitisation) rose to Rs. 9000 cr as on March 31, 2005, compared to Rs. 7301 cr on March 31, 2004, recording a growth of 23%.

B) Business Strategy

Our Bank in the post-merger scenario augmented its business in the retail segment. Retail Banking now occupies center-stage in your Banks plans and strategies. This is in line with the retail revolution that is currently sweeping across the country and the huge surge that the retail segment of the Indian banking industry has witnessed over the last few years.Our Bank has built up a unique retail loan portfolio consisting of commercial vehicle loans, car loans, two / three-wheeler loans etc. During the year, disbursements aggregating Rs. 3710 cr (compared to Rs. 2620 cr in the previous year) were made under this segment recording an increase of 42%.

Another focus area in retail lending is the Banks initiative in respect of commercial loans to traders and small businesses, which have witnessed significant growth during the year. our Banks outstanding loans to this sector as on March 31, 05 were about Rs.725 crores. A separate Retail Credit Division has been setup at the Corporate Office to handle this business (among other areas of retail banking activity) so as to tap its potential to the full.

Small and Medium Enterprises (SMEs) have consistently been a key customer segment for our Bank, and its potential for future growth remains high. our Bank has continued to cater to the SME sector, but now with a reoriented strategy for growth in this business, so as to ensure a more diversified credit portfolio and higher yields.In the area of resources, the focus has been on mobilizing low-cost deposits comprising current accounts and savings bank accounts. Efforts have also been made to further strengthen the alternate delivery channels through Internet Banking and ATMs. IN keeping with the times, various innovative products and services including International Mahila Card, Mobile Top-ups, Utility Bill payment etc. have been offered by your Bank to its clients.

The Bank has been focusing on technology based differentiated products to its customers. The present IT infrastructure set-up of the Bank has the ability to handle large volumes of retail business in an effective and responsible manner.Our strategy will be to build a strong retail client base throughout the country.

C)Overseas Network

our Bank opened its second overseas office in London the representative offices in Dubai and London have enhanced the Banks international presence by way of providing services in areas of international trade and NRI business.

D)Human Resources

The Banks human resources department has been very active in supporting the expansion plan of the organization through recruitment of skilled and experienced human resources. To ensure the efficiency and effectiveness of manpower, the Bank has been continuously endeavouring to impart necessary training. The Bank continues to lay emphasis on evolving improvement in customer service standards through highly mobilised human resources

E)Information Technology

Integration of the IT systems of the erstwhile ALFL with the IT infrastructure of our Bank was a major accomplishment during the year under review. our Bank also successfully established a disaster recovery site at Hyderabad with on-line real-time data replication capabilities (vis--vis, the main production server in Mumbai), to ensure uninterrupted services to the Banks customers. our Bank is also in the process of implementing a payment switch for handling e-commerce transactions for its customers.We are a front-runner in adopting various technology initiatives of Reserve Bank of India and will be among the first ones to adopt technology such as cheque truncation to facilitate faster clearance of cheques and instruments, prevention of money laundering etc.

F) Corporate Governance

our Bank continues to adopt the best practices for corporate governance. It has set up various Committees to take decisions and monitor the activities falling within their terms of reference. It is your Banks strong belief that sound principles of Corporate Governance are important keys to success.

G) Corporate Social Responsibility

During the year 2004-05, your Bank donated Rs. 1.18 cr (including Rs. 1 cr to the Prime Ministers National Fund for the Tsunami victims) towards various social and philanthropic causes.The unprecedented floods in large parts of Maharashtra, especially Mumbai, has left many with loss of life and property. To create awareness about preventive and protection measures and to avoid an epidemic, your Bank organized a public awareness campaign in association with the Rotary Club, Lions Club and Hinduja Hospital. Camps were held in different parts of Mumbai with provision for medicines and consultation from doctors.

Performance highlights for the year ended 31st March 2004:

ALFL, industry leader amongst NBFCs, with an asset base of Rs 4,200 crore, merges with IndusInd Bank

Advances grew to Rs 7,812 crore, registered a sharp increase of 46% as against the 14.8% credit growth among Scheduled Commercial Banks in the aggregate

Total Deposits during the year grew by 30% to Rs 11,200 crore as against the 16.9% deposit growth of Scheduled Commercial Banks in the aggregate

Total income stood at Rs 1,331.08 crore against Rs 1,000.7 crore in the previous year - a growth of 33.01%

Profit After Tax stood at Rs 262.07 crore against Rs 90.17 crore in the previous year, growing by 190.64%

The Bank reported an EPS of Rs 9.02 on the enhanced equity capital of Rs 290.42 crore

Net Interest Margins show a rise of 18.75% y-o-y from 2.24% in FY2003 to 2.66% in FY2004

Return on Assets has gone up 98.2% from 1.11% to 2.2% over the past year

Return on Equity over the year has improved from 15.49% to 37.37% over the year - an increase of 141.25%

The customer base of the Bank increases to 800,000 and yearly potential of new relationships to go up several times

Board of Directors has recommended a dividend of 17.5% (previous year 14%) on the enhanced equity base, and a special dividend of 5% on the occasion of the 10th anniversary of the Bank, resulting in a total dividend of 22.5% for the year

Merger expands the network of the Bank in acquiring retail assets through the erstwhile ALFL outlets spread over 750 locations

Bank's potential to leverage customer relationships increases with a range of financial products in the geographically enlarged network

Bank emerges as a leader in financing commercial vehicles / 2-wheelers / construction equipment

Gross NPA and Net NPA percentage as on 31st March 2004 were at 3.3% and 2.72% respectively

Capital Adequacy Ratio of the merged entity as on 31St March 2004 was 12.75% as against 12.13% in FY03

The net worth of the Bank grew by 32.9% to Rs 800.42 crore as against Rs 602.26 crore last year

The merged entity emerges as one of the largest new private sector banks with its total asset base at over Rs 15,000 crore (augmented by Rs 4,200 crore through the merger)Performance highlight for the quarter ended 31st March 2004:Total income stood at Rs 320.35 crore as against Rs 290.11 crore in the previous corresponding quarter, registering a growth of 10.42%

Profit After Tax stood at Rs 48.73 crore against Rs 3.66 crore in the previous corresponding quarter, registering a quantum jump of 1231.42%.

Performance highlights for the quarter ended September 30, 2006 are:-Total Income was Rs.429.01 crore as compared to Rs 352.03 crore in the corresponding quarter of the previous year.

-Net Interest Income (NII) was Rs.65.75 crore as compared to Rs. 91.42 crore in the corresponding quarter of the previous year.

-Other Fee Income comprising Commission, Exchange, and Brokerage for the quarter stood at Rs.68.41 crore vis--vis Rs 48.14 crore in the corresponding quarter of the previous year.

-Operating Profit for the quarter was Rs.49.09 crore as against Rs 62.51 crore in the corresponding quarter of the previous year, and Rs 36.95 crore in Q1 of this year. Net Profit for the quarter was Rs.17.18 crore as against Rs 31.49 crore in the corresponding quarter of the previous year and Rs 8.01 crore in Q1 of this year. The profits were lower mainly due to the absence of profit on securitisation in the quarter ended September 30, 2006 (The securitization profit in Q2 last year was Rs.23.91 crores) and increase in cost of deposits.

-Net Interest Margin (NIM) for the current quarter was 1.34 % as against 2.24% in the corresponding quarter of the previous year. NIM was impacted on account of higher interest cost and the absence of securitisation profit. NIM for the Q1 of the current year was 1.22%.

-The quarterly EPS works out to Rs.0.59 (non annualised) on an equity capital base of Rs 290.51 crore.

-Capital Adequacy Ratio as on September 30, 2006 was 10.31 % as against the minimum requirement of 9%.Performance highlights for the 6-month period ended September 30, 2006 are:-Total Income for the first half-year was Rs.819.15 crore as compared to Rs 701.89 crore in the corresponding period of the previous year.

-Net Interest Income (NII) was Rs.122.78 crore as compared to Rs. 162.42 crore in the corresponding period of the previous year.

-Operating Profit for the half year period ended September 30, 2006 was Rs.86.04 crore as against Rs 140.02 crore in the corresponding period of the previous year. Net Profit for the half year period ended September 30, 2006 was Rs.25.19 crore as against Rs 71.85 crore in the corresponding period of the previous year. Profits were lower due to lower bad debts recovery and the absence of profit on securitization.

-Net Interest Margin (NIM) for the half year period was 1.28 % as against 2.06% in the corresponding period of the previous year.

-Total Advances as on September 30, 2006 were Rs.10,724 crore as compared to Rs. 9,082 crore as on September 30, 2005, recording a growth of 18.07 %.

-Total deposits as on September 30, 2006 were Rs.15,986 crore as compared to Rs.13,913 crore as on September 30, 2005, recording a growth of 14.90 %.

-The CASA (Current Accounts-Savings Accounts) ratio improved to 14.02 % of total deposits against 11.82% in H1 FY06.

ABOUT THE PROJECTRelevance of project

The Project made the Researcher to compare the performance of INDUSIND BANK between pre and post merger scenarios (INDUSIND BANK merged with ASHOK LEYLAND FINANCE IN 2004) . The Researcher also came to know the changes in the process of vehicle finance division, customer satisfaction,HR policies, ratio analysis from 2002-2006. Researcher had improved his Marketing skill and planning capabilities specific to the Industry.

METHODOLOGY

Objectives of the Study

This is a study of impact of merger between INDUSIND BANK and ASHOK LEYLAND FINANCE. This objective is met by using the following secondary objectives:

To identify the changes in vehicle finance division after merger between INDUSIND BANK and ASHOK LEYLAND FINANCE.

To find the growth of INDUSIND BANK by comparing the balance sheet of Indusind bank from 2002-2006(ratio analysis)

To find out the customers opinions about the vehicle finance division, Indusind bank, GUWAHATI.

To identify the scope of improvement in vehicle finance division, Indusind bank, guwahati.

Implications of the project

The Project will help the Organization in formulating the Sales Promotional activities for its corporate clients .

The Project will help the Company in assessing the various needs for each client separately.

Limitations of the Study

Temporal limitationsThe study has been conducted in the period of May-July 2007 and the data and analysis (QUESTIONNAIRE AND DIRECT INTERVIEW) pertain to the information available during the period of study only.Geographical limitations The research was carried out with the Customers, employees, corporate & Business Units in GUWAHATI only and is not be applicable to other parts.Specific limitations

Reluctance on the part of respondents to provide accurate data regarding difficulties faced in Indusind Bank due to fear of exposing themselves to unwanted reasons..

Procedural limitations All data collected are generally limited by the method adopted. In the current research, the method of data collection being questionnaire and personal interviews of employees, limits the data to the extent of data generation available through that method.

Research Methodology

Research Design

The research design states the conceptual structure within which the research was conducted. The research design adopted here is descriptive.

Pilot Study

After preparing the interview schedule conducted a pretest with the respondents. It was really helpful to find the sharpness and relevance of the schedule to extract the correct answer from the respondents, so as to sense the purpose for which it has been framed.

After conducting the pilot study was able to understand some flaws in the schedule and the required alternatives were made, to facilitate the clear understanding of the issue.

Nature of Data

The research has been made by the use of Primary data only and Secondary data was not used for the purpose of research.

It was necessitated in order to obtain data relevant to the project. In order to collect the primary data, survey method was chosen. Questionnaire was the tool used for data collection. The sample size was chosen keeping in mind not only the time factor but also the area of coverage. The sample size was limited to 100 customers. The primary data was collected in the geographical limits of Guwahati , in ASSAM. The questionnaire has been directly administered by the researcher and filled by the respondents.

Sampling Procedure

The main aspects to be considered in sampling are:

Sampling technique

Sampling unit

Sampling area

Sample size

Sampling Technique

The researcher adopted the Convenience Sampling technique for the survey.

Sampling Unit

The researcher has met the customers of INDUSIND BANK, GUWAHATI .The CUSTOMERS includes both person, travels pvt ltd of north-east of India. Sampling Area

The sampling area considered for the current research was Guwahati

Sample Size

150 CUSTOMERS were surveyed during the study period of 45 days in the months of MAY-JULY 2007.As the sample is scattered it is difficult to cover a large no of sample.

Questionnaire Construction

The construction of the questionnaire is an important limiting criterion for collecting primary data. Questionnaire was constructed for the purpose of evaluating the corporate.

Tools for Analysis

The following tools were used for analysis of the project were:

1) Pie chart

2) Financial Ratio analysis3) Bar diagram ANALYSIS

AND INTERPRETATION

EMBED MSGraph.Chart.8 \s INTERPRETATION:

Most of the customers (71%) associated with banks are having transportation business and few customers (29%) are taking vehicle loan for personal use.

INTERPRETATION:

Most of the customers (63% of 71) are the customers having more than three years experience in transportation business. Only 13% customers are having below one year experience.

INTERPRETATION:

Majority of the customers (93%) prefers bank and NBFC for source of finance.

INTERPRETATION:

All the customers are familiar with the both INDUSIND BANK and ASHOK LEYLAND FINANCE..

INTERPRETATION:

Only a few customers(5%) are not aware of the merger between Indusind bank and Ashok Leyland FINANCE. Remaining 95% customers are aware of the merger.

INTERPRETATION:

36% customers are associated with the organization from more than three years. 43% customers are new customers (less than 2 years).

INTERPRETATION:

30% customers are having one vehicle loan.45% customers are having three or more than three loans.

INTERPRETATION:

Majority (70%) of the customers dont have any idea about the change in the process .According to 30% customers ,no change occurs in the process.

INTERPRETATION:

According to majority(61%) of customers the processing time for granting finance is reduced. 17% customers said that the processing time remain same.2% customers are not satisfied with the time taken because they feel that processing time for granting finance is increased now.

INTERPRETATION:

Majority of customers (80%) said that the infrastructure has improved after the merger between IBL and ALFIN .Remaining 20% cant say whether the infrastructure has improved or not because they are new customers.

INTERPRETATION:

According to 70% customers after merger the organization is providing quality service.5% customers are not satisfied with the service provided by both pre and post merger organization.20% customers are new customers so they cant give any conclusion.

INTERPRETATION:

According to 70% customers the follow up procedure has improved after merger. 5% customers told that the follow up procedure remains same.5% customers gave the view that the follow up procedure has deterioted .

FINDINGSFindings of the Research.

Findings:

1.The infrastructure of bank has improved after merger.

2.Customers are not aware about the administrations vehicle finance procedures.

3.The old customers are very much satisfied with the bank.

4. Most of the new customers are not satisfied with the bank. 5.Same process which is followed before merger is followed by bank in

vehicle finance division now.6.Most of the customers who had deposited post dated cheque complains

that their cheque had not been released by bank in time and they have to

pay the penalty for that. 7.The facility of keeping the record of post dated cheque is not up to the

mark. 8.The customers contract files and keys of the vehicles are not properly

kept and there is a chance of missing those documents.

9.The follow up procedures are improved after merger. 10. The quality of service provided is improved after the merger. 11.The pay scale of INDUSIND BANK employees and ASHOK LEYLAND

FINANCE employees are different .So, there is a lack of mutual

understanding and cooperation between IBLs and ALFs employees. 12.The internet server of the Guwahati branch is very slow and due to

this, executives have to face trouble.

SUGGESTIONS Suggestions:

1) The Guwahati branch of INDUSIND Banks vehicle finance division should give interest to increase the number of new customers.

2) The record of the post dated cheques and the post dated cheque should be kept properly in a appropriate manner.

3) The contract files of customers and duplicate keys of the vehicle should be kept in a locker room.

4) The customers payment track record and viability should be properly checked to decrease the number of default in repayment.

5) Action is necessary to increase the productivity of internet server.

6) There is a need of duplicate currency assorter machinery to reduce the time taken by cashier at the time of deposit by customers.

7) The role of the back office employees should be specified to avoid conflict and confusion.

8) Both the organization should take appropriate steps to enhance mutual understanding and satisfaction between employees .

BALANCE SHEETAND

RATIO ANALYSIS

Indusind Bank Ltd.

Balance Sheet (Rs.in Millions)

LiabilitiesPeriodEnded Mar2006(12 Mnts.)PeriodEnded Mar2005(12 Mnts.)PeriodEnded Mar2004(12 Mnts.)PeriodEnded Mar2003(12 Mnts.)PeriodEnded Mar2002(12 Mnts.)

Share Capital2,905.102,905.102,904.172,192.711,590.28

Reserves & Surplus5,755.495,387.325,099.963,829.914,028.96

Net Worth (1)8,660.598,292.418,004.136,022.635,619.24

Secured Loans(2)5,349.506,106.2023,103.542,367.898,594.02

Unsecured Loans(3)150,063.01131,142.76112,002.6285,978.7284,001.21

Total Liabilities (1+2+3) 164,073.10145,541.37143,110.2994,369.2398,214.47

AssetsPeriodEnded Mar2006(12 Mnts.)PeriodEnded Mar2005(12 Mnts.)PeriodEnded Mar2004(12 Mnts.)PeriodEnded Mar2003(12 Mnts.)PeriodEnded Mar2002(12 Mnts.)

Fixed Assets

Gross Block6,178.915,714.854,687.062,607.462,029.62

(-) Acc. Depreciation2,813.992,481.642,288.961,506.451,163.50

Net Block (A)3,364.913,233.212,398.101,101.02866.12

Capital Work in Prgs. (B)30.9711.75585.820.000.00

Investments (C)54,099.0440,691.7139,716.8625,350.7024,848.95

Current Assets, Loans & Advs.

Inventories0.000.000.000.000.00

Sundry Debtors0.000.000.000.000.00

Cash And Bank14,805.0411,545.9422,536.1811,507.2214,929.73

Loans And Advances103,925.23100,737.4585,627.6161,051.6661,400.65

(i)118,730.28112,283.39108,163.7972,558.8876,330.38

Current Liab. & Provs.

Current Liabilities12,152.1010,678.687,754.284,641.363,830.98

Provisions0.000.000.000.000.00

(ii)12,152.1010,678.687,754.284,641.363,830.98

Net Curr. Assets (i - ii) (D)-1,331.4961.24-248.942,931.761,827.71

Misc. Expenses (E)0.000.000.000.000.00

Total Assets (A+B+C+D+E) 56,163.4443,997.9042,451.8329,383.4827,542.78

Data Source - Asian CERC IT Ltd.

Indusind Bank Ltd. (indb)

Annual Unaudited Results (Rs. in Millions).Period Ended Mar2005(12 Months)Period Ended Mar2004(12 Months)% ChangeSales Turnover1,1344.00 9861.50 + 15.03 Other Income2507.50 3449.30 -27.30 Total Income1,3851.50 1,3310.80 + 4.06 Total Expenditure4057.30 3911.50 + 3.73 Operating Profit9794.20 9399.29 + 4.20 Interest7188.90 6692.50 + 7.42 Gross Profit2605.30 2706.80 -3.75 Depreciation0.00 0.00 N/A Tax503.80 86.10 + 485.13 ReportedPAT2101.50 2620.69 -19.81


Profit & Loss Accounts (Rs.in Millions).PeriodEnded Mar2006(12 Mnts.)%PeriodEnded Mar2005(12 Mnts.)%PeriodEnded Mar2004(12 Mnts.)%PeriodEnded Mar2003(12 Mnts.)%PeriodEnded Mar2002(12 Mnts.)%Sales1,2319.62+95.681,1978.17+96.791,2702.86+96.369750.83+97.908571.29+95.83Other Income555.72+4.32397.34+3.21480.10+3.64209.25+2.10373.02+4.17Total Income1,2875.341,2375.501,3182.969960.088944.31

Raw Material Cost0.000.000.000.000.000.000.000.000.000.00Excise0.000.000.000.000.000.000.000.000.000.00Other Expenses1,1578.19+89.939144.75+73.891,0103.99+76.648808.42+88.446212.68+69.46

Operating Profit1297.14+10.073230.75+26.113078.97+23.361151.65+11.562731.62+30.54Interest Name8731.91+67.827188.93+58.096692.52+50.775584.76+56.075472.30+61.18

Gross Profit-7434.77-57.74-3958.18-31.98-3613.54-27.41-4433.11-44.51-2740.68-30.64Depreciation359.88+2.80448.69+3.63367.20+2.79252.47+2.53206.81+2.31

Profit Bef. Tax-7794.65-60.54-4406.87-35.61-3980.74-30.20-4685.58-47.04-2947.49-32.95Tax223.70+1.74503.84+4.0786.07+0.65-4.11-0.040.000.00

Net Profit-8018.35-62.28-4910.71-39.68-4066.81-30.85-4681.47-47.00-2947.49-32.95Other Non-Recurring Income-43.39-0.34-109.59-0.89157.75+1.20-1.16-0.010.000.00Reported Profit-8061.74-62.61-5020.30-40.57-3909.05-29.65-4682.64-47.01-2947.49-32.95Equity Div0.000.00522.57+4.22654.08+4.96308.32+3.10224.00+2.50


RatiosProfitability Ratios % Period Ended Mar2006(12 Months) Period Ended Mar2005(12 Months) Period Ended Mar2004(12 Months) Period Ended Mar2003(12 Months) Period Ended Mar2002(12 Months) Operating Profit Margin 11.00 27.00 24.00 12.00 32.00 Gross Profit Margin -60.00 -33.00 -28.00 -45.00 -32.00 Net Profit Margin -65.00 -41.00 -32.00 -48.00 -34.00 Turnover RatiosInventory Turnover Ratio 0.00 0.00 0.00 0.00 0.00 Debtor Turnover Ratio 0.00 0.00 0.00 0.00 0.00 Fixed Asset TurnoverRatio 3.66 3.70 5.30 8.86 9.90 Solvency RatioCurrent Ratio 0.89 1.01 0.97 1.63 1.48 DebtEquity Ratio 0.00 0.00 0.00 0.00 0.00 Interest Covering Ratio 0.15 0.45 0.46 0.21 0.50 Performance Ratio %Return On Investment 2.00 7.00 7.00 4.00 11.00 Return On Networth -93.00 -59.00 -51.00 -78.00 -52.00 Dividend Yield 0.00 18.00 30.00 26.00 14.00

PROFITABILITY RATIOS:

a) OPERATING PROFIT RATIO:

( operating profit /net sales ) *100.

INTERPRETATION:

With the help of operating profit, the management will be able to know the operating efficiency of the firm. Normally an operating profit ratio of 15 to 25 is preferred.

Before merger ,in the year 2002 it is pretty good i.e 32 but in the year 2003 it came down to 12 which is not preferable. After merger ,in the year 2004 it raised to 24 and in the year 2005 to 27 which are reasonably good. But in the year 2006 it came down to 11 which is not a good sign.

B) GROSS PROFIT MARGIN :

( Gross profit / net sales )*100

INTERPRETATION:

The ratio establishes relationship between gross margin and sales. Generally a g/p ratio of

20%-30% is desirable.

All the gross profit ratios from the year 2002 to 2006 are in negative. So it is very poor performance by bank.

C) NET PROFIT RATIO:

( EBIT / sales )*100 = net profit ratio

INTERPRETATION:

The net profit ratio is regarded as the index of operational efficiency. Generally a net profit ratio of 20 % is required.

The net profit ratios are all in negative from the year 2002 to 2006 which is very poor.

TURNOVER RATIOS:

FIXED ASSET TURNOVER RATIO:

Sales / net fixed asset = fixed asset turnover ratio

INTERPRETATION:

The efficiency of utilizing the firms assets are reflected in assets turnover ratio. Higher the turnover ratio ,the more efficient the management in utilising the assets.

Before merger,the fixed asset turnover ratio is above 8.But after merger ,it gradually came down and in 2006 it is lowest i.e. 3.66.

SOLVENCY RATIO:

A) CURRENT RATIO:

Current assets/current liabilities = current ratio

INTERPRETATION:

Current ratio indicates availability of current assets per rupee of current liabilities.Therev is the need for striking balance between profitability and liquidity while deciding upon an ideal current ratio.It is customary to take 2;1 ratio as an ideal ratio but we rarely find this in industry of present days.

In the year 2002 & 2003 the bank is maintaining current ratio near about 1.5.After merger from 2004 the current ratio declines to near about 1 i.e. the amount blocked in current asset is significantly decreased.

B) INTEREST COVERING RATIO:

profit before tax and interest / interest = interest covering ratio

INTERPRETATION:The ratio measures the capacity of a firm to discharge their interest payment liability on borrowed capital. It establishes the relationships between the interest charge and the profit available to cover the interest.

In the year the 2002 bank is maintaining 0.5 interest covering ratio but it is significantly decreased to 0.21 in the year 2003.After merger in the year 2004 and 2005 ,the bank is maintaining near about 0.45 but again in 2006 it came down to 0.15 which is very low and a matter of concern for creditors.

PERFORMANCE RATIO %:

A) RETURN ON INVESTMENT:

PAT / investment = return on investment

INTERPRETATION:

The ratio is the primary criteria to arrive at investment decision by the share holders as well as by the management. It indicates the rate of return on the resources of the firm that are invested.

Before merger ,in the year 2002 the return on investment is pretty high i.e.11 but in the next year it came down to 4.After merger ,in the year 2004 and 2005 bank maintained fair return on investment i.e. 7 but again in the year 2006 it came down to 2 which is a poor return on investment.

B) RETURN ON NETWORTH:

PAT / NET WORTH(EQUITY) = RETURN ON NETWORTH

INTERPRETATION:

The ratio gives the productivity on equity shareholders fund or net worth.Since preference share capital is excluded from net worth,the return on net worth is computed taking profit after preference dividend which is available to equity shareholders only.

The return on net worth is negative from the year 2002 to 2006 which reflects poor productivity on equity shareholders fund.

C) DIVIDEND YIELD:

Dividend per share / market value = dividend yield

INTERPRETATION:

Dividend yield is a ratio between dividend and market price per equity share. The actual yield of the investment on shares is shown by this dividend yield ratio.

The bank is maintaining a good dividend yield from 2002-2005 but in the year 2006 bank failed togive equity dividend.

BIBLIOGRAPHY AND ANNEXURE

Bibliography

Kothari, C.R.Research Methodology and Techniques, Vikas publishers, New Delhi.

Harper, Ralph and Stanly, Marketing Research Text and cases, Richard D. Irwin, INC New Delhi, 7th Edition.

Kotler, Philip, Marketing Management, Pearson Education (Singapore) Pvt Ltd, New Delhi, 2003, 11th Edition.

Financial management ,ninth edition,I M PANDEY

Introduction to accountancy ;T.S. grewal

www.economic times.com

www.nseindia.com

www.moneycontrol.com

www.poweryourtrade.comwww.investinfo.comwww.google.co.inAnnexure QuestionnaireNAME :

OCCUPATION:

LOCATION : DATE:

(PLEASE TICK WHEREVER APPROPRIATE)

1)Are you associated with transportation business?

YES NO

2)How long have you been associated with transportation business?

0-1 years 1-3 years 3-5 years more than 5 years

3)Which source of finance do you prefer?

Personal Unorganized NBFC Bank

4)Which organization are you familiar with?

INDUSIND BANK ASHOK LEYLAND FINANCE Both

5)Are you aware of the merger between IBL &ALFIN?

YES NO

6)For how long have you been associated with this organization ?

0-1 years 1-2 years 2-3 years 3-5 years more than 5 years

7)How many vehicle loans have you taken from IBL/ALFIN?

1 2 3 MORE THAN 3

8)Has the merger between IBL & ALFIN brought any change in the business process of vehicle finance division?

YES NO CANT SAY

9)After the merger between IBL & ALFIN,the processing time for granting finance has

Reduced Increased Remain same cant say

10)Do you think the infrastructure of ALFIN after merger with IBL has improved?

YES NO Remain same cant say

11)According to you which one of the following provides quality service?

ALFIN(PRE MERGER) IBL/ALFIN(POST MERGER) None cant say

12)After merger between IBL & ALFIN the follow up [procedure has

Improved Deterioted Same cant say

13)Do you think any further improvement is required?plese comment.

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