A REPORT

ON

FINANCIAL AND ACCOUNTING ANALYSIS OF

BRANCH EXPENSES, BANKING PROCESS
AND PAY OUT

By

()

Enrollment No:

(UNICON SECURITIES PVT. LTD)

A REPORT

1
 ON

(FINANCIAL AND ACCOUNTING ANALYSIS OF

BRANCH EXPENSES, BANKING PROCESS
AND PAY OUT)

UNICON SECURITIES PVT. LTD

A report submitted in partial fulfillment of the requirements of

MBA Program of the ICFAI University, Dehradun

Date of Submission:

AUTHORISATION

2
This is to certify that this is a bonafide record of the project work entitled “FINANCIAL
AND ACCOUNTING ANALYSIS OF BRANCH EXPENSES, BANK PROCESS AND PAY
OUT” carried out by Ms., during academic year 2009-10 in partial fulfillment of the
requirement of MBA program of IBS- N. The report is a result of his original work.
“This report is submitted as partial fulfillment of the requirement of MBA Program of ICFAI
University Dehradun”

3
ACKNOWLEDGEMENT

“If words are considered to be signs of gratitude, then let these words convey the same”
I would like to express my gratitude to all those who gave me the possibility to complete
this project. I want to thank UNICON SECURITIES PVT.LTD for giving me permission to
commence this project, to do the necessary work and to use departmental data. I have
furthermore to thank the Associate Vice President of UNICON SECURITIES PVT.LTD, Mr.
Pawan Kumar Jindal and the Manager, Mr. Govind Gupta who gave and confirmed this
permission and encouraged me to go ahead with my project. This project report bears the
imprint of those who had rendered their wholehearted support and encouragement without
whose help this effort of mine would be in vain. I express my deep sense of gratitude and
sincere thanks to members of the Branch Expense, Banking and Payout Team, Mr. Robin
Tyagi, Mr. Prabhaker Singh and Ms. Priya Das for their directions, suggestion and
information provided which were of utmost importance for the successful completion of the
project.

I am deeply indebted to my project mentor Prof. S. Niyogi from IBS (Noida) whose help,
stimulating suggestions and encouragement helped me in my project work.
The project could not be complete without the able support and guidance of the teachers
and the resources of the institute. Thanking them is a small gesture for the generosity shown
by them. And last but not the least, my heart-felt gratitude to those ‘unseen hands’ that have
guided me throughout this project and helped in its successful completion.

4
SYNOPSIS

This report is made with the objective of “analyzing the branch expense, banking process
and analyzing the financial position of Unicon Securities Pvt. Ltd.” which is also the title of
the report.

The project basically deals with the working of the Accounts and Finance department. The
Accounts and Finance Department is an integral component of the administrative structure
of the Head office, rendering services to the other branches administrative and operating
Departments. The Department is responsible for all disbursements made from the funds,
including payroll for all employees as well as the overall general ledger accounting
functions.

 BANKING PROCESS

In this report, I have highlighted the various process carried by the banking department
with the help of flow charts. All the processes have been identified and have been described
in details. Some of the major processes are – Stop Payment, Fixed Deposit Receipt, Bank
Reconciliation Statement, Fund Transfer, Funds Arrangement, Account Opening and
Account Closing.

Data for analyzing the banking process has been collected through primary sources with the
help of questionnaire and interview.

The analysis would help the company to understand the process better, identify loop holes
in the process and make necessary amendments.

5
  BRANCH EXPENSES

The various process carried out by the branch expense department is highlighted with the
help of flow charts. All the processes have been identified and have been described in
details. Some of the major processes are – Fund Transfer, Handling Petty Cash, Preparing
Profit and Loss Account, Management Information System and Bank Reconciliation
Statement.

All the Expenses are recorded in the books by this department on receipt of the expense
proofs. In this project all types of expenses incurred by the branches will be studied which
includes petty expenses which are paid by the branches themselves and other expenses
whose payment are made by the head office directly along with the system of handling the
branch accounts under company system.

 PAYOUT POLICY

The report also covers the payout policy regarding: vendor payments, travelling expenses,
telephone/mobile/internet bill payment, electricity bill payment, rent payment, business
promotion, advertisement, professional charges, contractors and management associate
commission at accounts department of Unicon Securities Pvt. Ltd. Since Unicon Securities
Pvt. Ltd is one of the group companies of Unicon Investment Solution so by studying its
payout policy helped me in analysis of various expenses of Unicon Securities Pvt. ltd.

 ACCOUNTING ANALYSIS

Also in this report, I have analyzed the financial position of Unicon Securities Pvt. ltd (one of
the group company) to assess the firm profitability, stability, liquidity and solvency
condition. Data for financial analysis has been taken from the company’s Annual report i.e.
Balance Sheet, Cash Flow Statements and Income Statements.

Finally, some finding’s and suggested recommendation are mentioned which can be
beneficial to the company.

6
Unicon Investment Solutions

Unicon has been founded with the aim of providing world class investing experience to
hither to under-served investor community. The technology today has made it possible to
reach out to the last person in the financial market and give him the same level of service
which was available to only the selected few.
Unicon gives personalized premium service with reasonable commissions on the NSE, BSE
& Derivative market through our Equity broking arm Unicon Securities Pvt. Ltd. and
Commodities on NCDEX and MCX through our Commodity broking arm Unicon
Commodities Pvt. Ltd. With our sophisticated technology you can trade through your
computer and if you want human touch you can also deal through our Relationship
Managers out of our more than 100 branches spread across the nation.

Unicon also gives personalized services on Insurance (Life & General) & Investments
(Mutual Funds & IPO's) needs, through our Insurance & Investment distribution arm
Unicon Insurance Advisors Pvt. Ltd. Our tailor-made customized solutions are perfect
match to different financial objectives. Our distribution network is backed by in-house back
office support to serve our customers promptly.

MISSION

To create long term value by empowering individual investors through superior financial
services supported by culture based on highest level of teamwork, efficiency and..Integrity.
 
VISION      

To provide the most useful and ethical Investment Solutions - guided by values driven
approach to growth, client service and employee development.

PRODUCTS AND SERVICES

Equity
Commodity
Depository
PCG Distribution
Properties 
NRI Services
Back Office

7
LOCATIONS

8
Group Company’s

9
Table of contents

Authorization i

Acknowledgements ii

Synopsis iii

 Banking Process
 Branch Expenses iv
 Payout Policy
 Accounting Analysis
 Unicon Investment Solutions v
 Locations vi
 Group Company’s vii

1. Introduction 1

1.1 Scope Of The Proposed Study. 2

1.2 Purpose Of The Project 3

1.3 Limitations Of Study. 4

2. Branch Expenses. 5

2.1 Branch Petty Expenses.

2.2 Branch Accounts Policy. 6

2.3 Methodology 8

2.4 Bank Expenses Report 9

2.5 Cash Expenses Report

2.6 Branch Wise Fund Limit

2.7 Profit And Loss Account 10

2.8 MIS Reports. 11

3. Banking. 12

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 3.1 Banking Process.

3.2 Account Opening.

3.3 Account Closing. 13

3.4 Bank Reconciliation Statement. 14

3.5 Process Of Bank Reconciliation Statement. 15

3.6 Fund Transfers 16

3.7 Problems In Fund Transfer Process

3.8 Funds Transfer In Case Of Petty Cash

3.9 Stop Payment 17

3.10 Fixed Deposit Receipts.

4. Payout 18

4.1 Payout Policy.

4.2 Vendor Payment. 19

4.3 Telephone Bills Payment. 20

4.4 Telephone Bill Policy.

4.5 Travelling Expenses. 21

4.6 Management Associate Commission (M.A.) 22

4.7 TDS Rates. 23

5. Financial Analysis. 24

5.1 Balance Sheet.

5.2 Balance Sheet Financial Year 2008-2009. 25

5.3 Financial Ratio Analysis. 26

5.4 Analysis Of Current Ratio 27

6. Conclusions 28

7. References. 29

INTRODUCTION

The Proposed Project is titled “FINANCIAL AND ACCOUNTING ANALYSIS OF

11
BRANCH EXPENSES, BANKING PROCESS AND PAY OUT of Unicon Securities Pvt. Ltd.”

The project includes transferring of funds, maintaining complete records of transfer,

and booking the entries through Accounting Software Package. Project also includes
preparation of monthly fund report according to the monthly expenses done by the
branches on receipt of adequate proofs of petty cash and bank report made and
analyzing it along with the fund limit given. Monthly Expenses are booked and
tallied with the help of Accounting Software to see that there is no variance between
the fund transfer and expense book received from branches. Bank Reconciliation
Statement is prepared on the basis of bank statement for the bank payments made in
cheque which notifies pendency of booked entries if any. On the basis of this booking
pendency Management Information System is made which gives a clear view of
entries ageing. Extraction of Profit and Loss Statement from Accounting Software
and branch wise income and expense details and sharing is done among the
employees.
Income and Commission are dealt under Banking by the process of deducting TDS
from the commission received. Accordingly the cash bank receipt and journal
voucher entry is booked. MIS is prepared on the basis of monthly target set and
achieved which again helps us to analyze the pendency for next month. Salary is
made on monthly basis and Rent is made on yearly basis.
Balance Sheet is prepared from the extraction of trials, schedules, and Profit and Loss
Account.
The major payments are made by payout team in accounts department are Vendor
payment, Travelling expenses, telephone/mobile/internet bill payment, Electricity
bill payment, Rent payment and Management associate commission.

SCOPE OF THE PROPOSED STUDY

12
 Analyze overall financial performance of Unicon Securities Pvt. Ltd.
To learn and understand the procedures, work criteria, objectives, purpose &
analyze the Accounting System of a Corporate & study the problems while
preparing and come up with a solution.
Identify reasons which affect profitability and needs improvement in terms of
both financially and operationally.
To assess Profit & Loss through brokerage as income and expenses incurred in
branches.
To analyze individual entries made for different Expenditure and Vendor
Payment.
To compare the growth in income from operations and current assets with a
view to test the current assets utilization efficiency of the company under
study.
To understand the way the Financial Statements are prepared according to the
current rules and regulations.
To find out and analyze how the payout process of group companies is
handled and reimbursement of expenses under Unicon Investment Solutions
Pvt. Ltd.
To assess the profitability of various activities & various department of the
Company.
To assess the short-term & long-term financial soundness of business.
To understand the processes of payout & petty expenses.
The impact of overall financial management upon profitability of the company
under study.

PURPOSE OF THE PROJECT

13
 To document the entire banking process in a simplified language so that in case a
new employee joins the banking team, by just going through the documented
process, can understand the working of banking department.
Remain updated to new changes in the market.
To understand the role of banking process in an accounts & finance department.
To evaluate each and every function of the banking process, detect shortcoming and
suggest improvements.
To highlight the role of banks in financial transactions.
Identify reasons which affect profitability and needs improvement in terms of both
financially and operationally.
To compare the growth in turnover and current assets with a view to test the
current assets utilization efficiency of the company under study.
Return on equity (ROE) and other determinants in order to measure the financial
performance of the company.
The managerial efficiency in order to managing funds for short term requirement
along with ensuring profitability.

LIMITATIONS OF STUDY

14
Only financial position of Unicon Securities Pvt. Ltd. can be ascertained due to time
constrained.
The study is limited to Unicon Investment Solutions only.
In analyzing the competitive strength of the company, the internal authentic
information about the company is inaccessible.
Ratio Analysis has its own theoretical disadvantages. Financial ratios are no more
objective than the accounting methods employed. Changes in accounting policies or
choices can yield drastically different ratio values.

15
BRANCH EXPENSES

Branch Petty Expenses

These Expenses are done by the branches in cash and are recorded by the head office on
receipt of adequate proofs of payment made.

Under Petty cash following Appropriate Expenses Heads are taken:

Office Maintenance (field boys expenses, office boys expenses, house keeping)
Staff Welfare (tea, coffee, milk, sugar, refreshment)
Printing and Stationery (cartridge, stationeries)
Books and Periodicals (newspaper, books, magazines)
Postage and Courier (courier bills)
Service Tax Credit receivable (10.3%)
Conveyance charges (petrol, travel)
Office Maintenance (sweeper salary, field boy/office boy salary)
Repairs and Maintenance (security guard salary, repair of office furniture)
Computer Expenses (replacement of computer items like: keyboard, mouse,
installation charges for various parts of computer)
Internet bandwidth Cost (internet bills, cable)
Water Charges (drinking water)
Generator Expenses (diesel)
Stamp Charges (rubber stamp)
Freight charges.
Photostat Expenses (xerox and photo)
Mobile Expenses.
Electricity Expenses.

16
Branch Accounts Policy

Here is the list of expenses which will be directly paid by Head office only:
 Salaries (Except Salary of one office boy & one filed boy subject to approval of
HR & fund duly sent by Accounts for this purpose only).
 Electricity Bills (Bills may be paid on photocopy of bill but hard copy will have to
be sent to Accounts Department after submission of bills along with payment
receipt showing proof of payment.
 Incentives
 Courier bill.
 Telephone & Internet bills.
 Business Partners Payouts
 Mobile Expenses Company Owned (Any other mobile payment will not be
allowed in the branches unless specific approval is there)
 Rent and Service Charges Building
 Traveling Expenses (Duly approved from Regional head in case of branch heads
and for others it should be approved by Branch head)
 All kind of Assets Purchased (before purchasing any Asset, the branch must take
the prior approval from Administrative head Mr. Rajeev Sharma IT Head Mr.
Anurag Nayar at H.O). However approval of admin and IT Head will be as per
our P.C. guidelines.
 Any kind of Interior/Renovation, Major Repairs & Renovation (however petty
repairs may be done by branch head after taking prior approval from
Administrative head & any kind of repair in I.T). Equipment may be done by
branch head after taking prior approval from I.T. Head.
 Any other extraordinary expenses other than routine Expenses.
 All New Telephone & Electricity connections should be approved from
Administration Head.
All other branch running expenses will be paid by branch from Company bank a/c
maintained in the branches. Every payment made in branches must be authorized
and duly signed on voucher or bill along with signature of recipient of payments.
Any expenses not made as per above policy may cause deduction on branch head
part.
All of them are requested to send original Bills including Telephone, Courier &
Electricity bill to H.O and maintain Xerox of the same at branch level. No booking of
branch expenses without original bills will be done. It should be liability of all branch
heads to provide all original bills for which he has made/authorized payment in the
branches.
Fund transfer will be made from H.O. to branches only in between 6th to 12 day of
the contemplated month as per branch limits. Fund will only release after receiving
of the bills properly by the date 1st of every month.
All Branches should send their Expense reports in specific format on monthly basis
by 1st of every month. All branch petty cash queries should be marked at branch

17
 accounts only. No mail to any personal ID will be entertained for fund transfer
request & expenses report.
Branches will be required to submit the expenses (i.e. hard copy of bills) pertaining
to petty cash released in previous month by 3rd day of the following month.
However details of expenses in soft copy should be forwarded by 1 st of following
month.
All Expenses reports and request for Funds transfer should be CC marked to the
respective regional head & branch head and also CC marked to Mr. Robin Tyagi.
Before issuing any cheque from your bank a/c, Please confirm the available balance
in your bank account. Viewer id is already provided to all branch heads. For further
clarification relating to any Banking query/ Internet View ID/ Bank A/c opening &
updating, Please contact Mr. Prabhakar Singh. For any Queries relating to Expenses
report, Fund Transfer requests or any other branch accounts problem, Mr. Robin
Tyagi.

RECEIPT OF EXPENSE STATEMENT FROM BRANCHES

PERIOD RECEIPT OF STATEMENT BY

1ST-15th 18th
16th-31st 3rd

APPROVAL

Branches  Reported By  Reported To

Branch Wise Profitability MIS by 15th Robin Tyagi Devesh Sorout/Pawan Jindal
Fund Status And Exp Booking MIS by 15th Robin Tyagi Pawan Jindal
Fund Transfer 11th -15th And 26th -31st Branch Team Prabhakar Singh
Booking Expenses On Continuous Basis Branch Team Robin Tyagi/Amit Singhal
Bank Reconciliation Statement by 10th Branch Team Robin Tyagi/Prabhakar
List Of Branches With Branch/Regional Head Every
Month by 4th Branch Team Robin Tyagi

METHODOLOGY

BRANCH EXPENSES
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BANK EXPENSES REPORT

COMPANY NAME

19
 Amt
Sl Voucher Cheque Party Total Recd.
Date Purpose Period Balance
No. No. No. Name Amount From
H.O.
Opening Balance  
Office
1. 5.4.10 555 098277 XYZ Maintenan JUNE XXX XXX XXX
ce
Office
2. 3.5.10 556 089373 LPD Maintenan JULY XXX XXX XXX
ce
Net Balance  

CASH EXPENSES REPORT

COMPANY NAME

Amt
Voucher Party
Sl No. Date Purpose Period Amount withdrawn Balance
No. Name
from Bank
Opening Balance  
Water
1. 10.5.10 336 Bisleri April xxx xxx xxx
Expenses
Generator
2. 12.5.10 337 ABC May xxx xxx xxx
Expenses
Net Balance  

BRANCH WISE FUND LIMIT

TOTAL
BRANCH LD LEASE FUND OFFICE
S.NO DIVISION FUND REMARKS
LOCATION CODE COMPANY LIMIT MAINTANANCE
LIMIT
Ajmer
1. AJM - - XXX XXX XXX Monthly
Branch
Mumbai
2. MUM - - XXX XXX XXX Monthly
Branch
Noida
3. NDA - - XXX XXX XXX Monthly
Branch
4. Pune Branch PUN - - XXX XXX XXX Monthly

PROFIT AND LOSS ACCOUNT

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009

20
 PARTICULARS SECURITIES INSURANCE COMMODITIES TOTAL

INCOME :        
BROKERAGE 590,231,259 186,352,598 92,286,785 868,870,642
TOTALS 590,231,259 186,352,598 92,286,785 868,870,642
EXPENSES:
SALARY 289,685,204 119,362,536 32,879,715 441,927,455
RENT 70,353,379 9,111,457 10,119,242 89,584,078
TELEPHONE 57,583,366 18,120,448 1,551,910 77,255,724
ELECTRICITY 17,612,584 3,286,067 902,371 21,801,022
INCENTIVE 9,890,887 7,897,797 79,739 17,868,423
STAFF WELFARE 11,192,261 1,545,082 1,163,707 13,901,050
EXPENSES
CONVEYANCE EXPENSES 12,947,588 1,302,533 717,167 14,967,288
OFFICE MAINTAINENCE/ 21,163,088 4,480,534 2,513,106 28,156,728
EXP
OTHER EXPENSES 1,282,908 3,972 276,823 1,563,703
TOTALS 491,711,265 165,110,426 50,203,780 707,025,471
PROFIT / LOSS 98,519,994 21,242,172 42,083,005 161,845,171

Expenses
12

10

Expenses
6

0
Securities Insurance Commodities

MIS REPORTS

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MIS or Management Information System is a computer based system used by most
organizations worldwide for transforming data into useful information for better decision
making. It helps management make better plans and carefully organize business operations.

Management information system is used for generating reports including inventory status
reports, financial statements, performance reports etc. These reports are essential for
analyzing different aspects of business. These reports also help to answer 'what-if' questions
like what would be the effect on cash flows of a company if the credit term is changed for its
customers etc.

MIS reports also support decision making and it helps to integrate the decision maker and
the quantitative model being used. These automated systems allow managers to make
decisions for smooth & successful operation of businesses. The system includes computer
resources, people, and procedures used in the modern business enterprise.

MIS reports in the Company

In our company the MIS reports are prepared to show the expenses incurred at all branches
against the funds available at their disposal in the form of cash and bank balances. The MIS
reports also bring out variance if any in the funds issued to the branches and the expenses
incurred by them (shown via expense reports). The variances if any act as tool for the
management to check branch performance by analyzing the reason for the same. Therefore
the MIS reports act as control mechanism for the management.

Duration for preparation of the MIS report

EXPENSE DURATION LAST DATE FOR PREPRATION OF MIS REPORTS

ST th
1 -15 of the Month 30th of the same month
16th – 30th of the month 15th of next month

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Banking

ACCOUNT OPENING
BANKING PROCESS

There are two types of accounts-

The business account – operated for the transactions of own business

The client account – operated for the transactions relevant of client.

23
ACCOUNT CLOSING
Reasons for account closing:

Account not in use for a longer period of time.

Branch closure

Branch shifts

PROCESS

The banking team operated the various bank account of the company. If there is a need to
close any account, it passes on the information to the management team stating the reason
for the closure.
The management team takes a decision whether to run the account or close it.

If it is decided on to close the account, a board of resolution is prepared by the legal

department which includes-

The account number of the bank

The bank name

The name of the place where the branch is located

In case of closure, the reason for closure

In case of shift, the name of the place the account is to be shifted

This information is passed to the head of finance department who further passes it to the

banking team.

The banking team fills up the account closing form.

The account closing form is signed by all the signatories of the company.

A request letter prepared by the banking team along with the account closing form and

BR is send to the bank.

After the requisite time frame the bank sends a confirmation letter to the banking team

stating that the account has been closed.

The information is further passed on to the higher authority.

24
Bank reconciliation statement

Bank reconciliation is the process of comparing and matching figures from the accounting
records against those shown on a bank statement. The result is that any transactions in the
accounting records not found on the bank statement are said to be outstanding.

Bank reconciliation allows companies or individuals to compare their account records to the
bank's records of their account balance in order to uncover any possible discrepancies.
Discrepancies could include: cheques recorded as a lesser amount than what was presented
to the bank; money received but not lodged; or payments taken from the bank account
without the business's knowledge. A bank reconciliation done regularly can reduce the
number of errors in an accounts system and make it easier to find missing purchases and
sales invoices. A simple reconciliation formula used is usually.

Branch Name………
Bank Name - HDFC BANK A/c. No - …………………..
Reconciliation As on Date. . 31-03-10
           
      Balance as Per Ledger   0.00
           
Dat Voucher Cheque Particulars Payment Amount
e No. No. Code
           
Add….Cheque issued but not presented for payment  
           
           
          0.00
          0.00
Add….Cheque credited by Bank but not debited by us  
           
           
          0.00
          0.00
Less….Cheque debited by Bank but not credited by us  
           
           
          0.00
          0.00
Less….Cheque sent to bank for collection but not collected  
           
           
          0.00
          0.00
           
      Balance as per Bank Statement   0.00
           
      Diff   0.00
Process of bank reconciliation statement

25
 NOTE

Consolidated BRS has to pass through verification on daily basis.

Branch BRS has to pass through verification on monthly basis.

Bank accounts of these companies are operated in ICICI Bank Ltd, HDFC Bank LTD.
& AXIS Bank Ltd.

APPROVAL

Banking   Reported By   Reported To

Ac Opening & Closing (Every Week Saturday MIS)
Maximum In 10 Days Prabhaker Govind Gupta
Updating Of Bank List & Authorized Signatory by 10th Prabhaker Govind Gupta
Fund Transfer-Branches (Same Day After Request) Chanchal Sharma Govind Gupta
Fund Transfer-Non Branches(Same Day After Request) Chanchal Sharma Govind Gupta
Cheque Book Status (On Ist & 16Th) Priya Das Amit Singhal
Bank Statement Status (By Next Month End) Chanchal Sharma Govind Gupta
Fdr & all Deposits including exchanges Reconciliation Govind Gupta Govind Gupta
All Loans on monthly basis (by 3rd) Govind Gupta Govind Gupta
Bank Recos Of Whole Group At Month End By 7Th Prabhaker Govind Gupta
Daily Fund Report Chanchal Sharma Govind Gupta
Today Cheque Details Priya Amit Singhal
Montly Internal Balance Report By 2Nd Evening Chanchal Sharma Govind Gupta
Banks Requirements On Request Prabhaker Govind Gupta

FUND TRANSFERS
It includes

It includes intercompany balance transfers.

26
 Day to Day operations like salary release, incentive payout, commission payout
etc.
Processing of payments into different branches like petty expenses etc.

Funds transfer process in employees account (salary, incentives and commission)

PROBLEMS IN FUND TRANSFER PROCESS

When signatories are not available

From Bank side like their working hours limitations

Name mismatch in bank record

FUNDS TRANSFER IN CASE OF PETTY CASH

All the branches of the company send their expense receipt to the branch

department.

Expense receipt can be send monthly or half monthly.

The branch team prepares the voucher for the same.

The voucher is signed by the branch team head and passed by two Assistant

managers.

The voucher is send to the banking team for transfer of funds to their respective

account.

Checking of transfer is done by banking team through bank statements.

stop payment

27
Fixed deposit receipts

Management decides to make a fixed deposit and passes information to the finance

A request to issue an FDR is send to the bank with documents by the finance

A confirmation is received from the bank regarding FDR with a certificate.

FDR details are maintained by the banking team in the books of

Interest is calculated as per the terms and conditions monthly.

28
PAYOUT

PAYOUT POLICY

29
VENDOR PAYMENT

Vendor payment deals with all the payments to the suppliers and service providers for
expenses such as repairs and maintenance, furniture, Photostat, courier, generator,
electricity, management associate commission, computer expenses and telephone bills.

REQUIREMENTS NEEDED

Proper written agreement with the vendor.

Approval of purchase committee for bills.
Vendor Registration.

Electricity Expenses
1.8

1.6

1.4

1.2

1 Electricity Expenses
0.8

0.6

0.4

0.2

0
Securities Insurance Commodities

30
TELEPHONE BILLS PAYMENT

All Telephone bills received at branches are sent to executive (admin dept) at admin
department, H.O. at Regal Building. Bills will be processed through admin & Accounts
under supervision of Admin head & G.M. Accounts & Finance. Finally cheques are
dispatched to branches or direct utility companies as the case is.

TELEPHONE BILL POLICY

Sl.No Particulars

1 All the calls made from company phone should be for official purpose.
2 Personal calls should not be made from Office phone.
3 The p.m. limit for the Branch is Rs.8000
4 All the expenses above Rs.8000 will be approved by the EVP.
5 If the bill amount exceeds the previous three months avg. then justification of the same
will be required from the branch manager
6 It is the responsibility of the branch manager to avoid wastage of Telephone calls
7 The excess telephone lines should be removed immediately.

TelephoneExpenses
6

4
TelephoneExpenses
3

0
Securities Insurance Commodities

31
 TRAVELLING EXPENSES

Travelling Expenses include all expenses incurred by an employee for the purpose of employment.
These expenses include:
Transportation expenses: Expenses incurred to move from one place to another.
Hotel Expenses: These include the expenses of stay.
Food Charges: These include the expenses incurred in eating out.

The company has a Policy in regard of traveling expenses in accordance to which such
expenses are treated. Given Below is the Travel Policy of the company:

Operations & Sales Hierarchy Travelling   Boarding &

Conveyance
Designation / Role By Rail / Air By Vehicle Max limit per day
Driver/Peon/Field Boy/Plumber/Pantry Sleeper class Rs5 per km for Car Rs. 500 per day
Boy/ Office Boy
Assistant/Receptionist Sleeper class Rs 5 per km for Car Rs. 1000 per day
Trainee Sleeper class Rs 5 per km for Car Rs. 1000 per day
Data Entry Operator/Dealer Sleeper class Rs 5 per km for Car Rs. 1000 per day
Executive Sleeper class Rs 5 per km for Car Rs. 2000 per day
Senior Executive/ Relationship manager 3 Tier AC rail fare Rs 5 per km for Car Rs. 2000 per day
Assistant Manager 3 Tier AC rail fare Rs 5 per km for Car Rs. 2000 per day
Manager/TLs 3 Tier AC rail fare Rs 5 per km for Car Rs. 2500 per day
Senior Manager/BM 3 Tier AC rail fare Rs 5 per km for Car Rs. 2500 per day
AVP/VP/SVP,GM 2 Tier AC rail fare / Rs 5 per km for Car Rs. 4000 per day
Economy class Air fare
Directors/NSHs/CEO,CFO,COO Business class Actual Actual

32
 Travelling Expenses
1.4

1.2

0.8
Travelling Expenses

0.6

0.4

0.2

0
Securities Insurance Commodities

MANAGEMENT ASSOCIATE COMMISSION (M.A.)

This includes the commission payable by the company to its franchisees on the business
generated by them for the company.

MANAGEMENT ASSOCIATES (M.A.)

TERMINAL NON TERMINAL

These are the Management Company doesn’t take
Associates from whom the any security from these
Company takes security and
provides all necessary services

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TDS RATES

Rates of TDS for Financial Year 2010-11 (w.e.f 01st April 2010)
Particulars Rates

Criteria for
Criteria for If the recipient
Deduction If recipient is
Deduction (payment is a Company,
Section Nature of Payment (payment in an Individual
in excess of) Co-operative
excess of) & HUF
up to 30.06.2010 Society, Firm
wef 01.07.2010

Interest from a Banking Rs. 10,000/-

194A Rs. 10,000/- p.a 10.00 10.00
Company p.a
Interest other than from a Rs. 10,000/-
194A Rs. 10,000/- p.a 10.00 10.00
Banking Co. p.a
Rs.30,000/-
Contractors, (Advertising Rs.20,000/- per
per contract
194C Contracts) & payment to sub- contract or Rs. 2.00 1.00
or Rs.
contractor 50,000/- p.a
75,000/- p.a
Rs.30,000/-
Contractors, (Transport Rs.20,000/- per Nil (See Nil (See
per contract
194C Business Contracts) & contract or Rs. Note 4 Note 4
or Rs.
payment to sub-contractor 50,000/- p.a below) below)
75,000/- p.a
Rs.30,000/-
Rs.20,000/- per
Contractors & CF Agents per contract
194C contract or Rs. 2.00 1.00
(Others) or Rs.
50,000/- p.a
75,000/- p.a
Rs. 5,000/-
194H Commission or Brokerage Rs. 2,500/- p.a 10.00 10.00
p.a
Rs.
Rent other than Plant, Mach.& Rs. 1,20,000/-
194I 1,80,000/- 10.00 10.00
Eqp. p.a
p.a
Rs.
Rent of Plant , Machinery & Rs. 1,20,000/-
194I 1,80,000/- 2.00 2.00
Equipments p.a
p.a
Rs.30,000/-
194J Professional Charges Rs.20,000/-p.a 10.00 10.00
p.a

Notes: Due date of payments is as under:

Actual Payment/Credit - Within one week from the last day of the month
in which deduction is made.
Credit/Provision on the last day up to which accounts are made - Within
2 Months from the end of the month in which deduction is made.
The Rate of TDS will be 20 Percent in all cases, if PAN is not quoted by the
deductee w. e. f. 01.04.2010.
The Nil rates will be applicable if the transporter quotes his PAN; if Pan is
not quoted the rate will be 1 % for an individual/ HUF transporter and 2
% for other transporters up to 31.03.2011.

34
x
m
F
B
p
g
k
u
d
P
/S
e&
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srftA
ico
aly
n
E
R
T
G
O
L
FINANCIAL ANALYSIS

BALANCE SHEET

35
BALANCE SHEET FINANCIAL YEAR 2008-2009

Particulars Schedule As at As at
31.03. 2009 31.03. 2008
Sources of funds
Shareholders' funds
Share capital 1 162,500,000 150,000,000
Reserves and surplus 2 317,500,000 130,000,000
TOTAL 480,000,000 280,000,000
Application of funds
Fixed assets 3
Gross block 349,501,995 170,804,037
Less: Accumulated depreciation (92,276,361) (49,859,498)
Net block 257,225,634 120,944,539
Deferred tax asset (net) 19 (9) 2,172,965 8,510,277
Current assets, loans and advances
Sundry debtors 4 91,370,523 168,793,619
Cash and bank balances 5 278,070,017 141,865,413
Loans and advances 6 238,530,185 300,939,654
Other current assets 7 8,431,851 1,027,874
616,402,576 612,626,560
Less: Current liabilities and provisions
Current liabilities 8 434,508,809 529,849,286
Provisions 9 484,654 -
434,993,463 529,849,286
Net current assets 181,409,113 82,777,274
Miscellaneous expenditure (to the extent not written
10 - 23,692,137
off)
Debit balance in Profit and Loss Account 39,192,288 44,075,773
480,000,000 280,000,000

36
FINANCIAL RATIO ANALYSIS

SHORT-TERM SOLVENCY RATIO 2009 2008

Current Ratio=Current Assets/Current Liability 1 1.16

Net Working Capital to Total Assets Ratio=Net

0.41 0.41
Working Capital/Total Assets

LONG-TERM SOLVENCY RATIO

Debt Equity Ratio=Total Debt/Total Equity 0 0

Long-term Debt Ratio=Long-term Debt/Long-term

0 0
Debt+Total Equity

PROFITABILITY MEASURES

Return on Assets=Net Income/Total Assets 1.52 2.82

Return on Equity=Net Income/Total Equity 1.39 2.05

37
 CURRENT RATIO
1.8
1.6
1.4
1.2
1 CURRENT RATIO
0.8
0.6
0.4
0.2
0
2008 2009

ANALYSIS OF CURRENT RATIO:

The current ratio is very high in year 2008 compared to 2009. Though a high current ratio
represent higher margin of safety but a very high liquidity is also bad, idle assets earn
nothing. The firm’s funds were unnecessary tied up in current assets. The main reason for
higher current assets in 2008 than 2009 is due to higher loan and advances which were
Rs 300,939,654 in 2008 compared to Rs 238,530,185 in 2009. But the ratio was lesser for 2009
because of high current liabilities which were Rs 529,849,286 in 2008 went down to Rs
434,508,809in 2009. This decrease was due to absence of creditors client and absence of
various provisions.

Net Working Capital Ratio

5
4.5
4
3.5
3
Net Working Capital Ratio
2.5
2
1.5
1
0.5
0
2008 2009

CONCLUSION
38
The role of banking process in accounts and finance department is highlighted in order to
analyze in a correct manner. The study was to evaluate each and every function of the
banking process, detect shortcoming and suggest improvements. Balance Sheet is prepared
with the help of trial balance with groupings linked to financial statements. These are the
methods for preparing Balance sheet. Balance sheet is the height point of an organization.
The purpose was to learn and understand & analyze the Accounting System of a Corporate
& study the complexities faced by it and solve it and adapt to changes in yearly tax ratio
made by the Government. The study was done to understand the way the Financial
Statements are prepared according to the current rules and regulations. The payout process
and policy are analyzed of every expenses incurred. The study was finally to learn,
understand and analyze the workings of an organization.

REFERENCES

39
Financial Management by ICMR, Wiley Publishers.
Financial Management by I.M PANDEY, Ninth Edition, Vikas Publishing
House Pvt. Ltd.
Annual reports of Unicon Investment Solution.
www.uniconindia.in
www.studyfinance.com

40