Performance of Financial and Investment Companies, 2011-12

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Published on October 10, 2013

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Performance of Financial and Investment Companies, 2011-12

An analysis of financial performance of select 1,342 nongovernment financial and investment companies for the financial year 2011-12 based on their audited annual accounts revealed that as growth in financial income improved during the year 2011-12, growth in expenditure was also higher as compared to the previous year. Growth in operating profits (EBDT) as well as net profits of the companies consequently moderated during the year. Share of borrowings, a major part of liabilities, has increased over the 5-year period, whereas on the assets side, loans and advances gained in share. Companies continued to rely mainly on external sources (other than internal accruals) for expansion, predominantly for growing their loan portfolio.

This article presents the performance of nongovernment financial and investment companies (other than banking, insurance and chit-fund companies) during the year 2011-12 based on the audited annual accounts of 1,342 companies, which closed their accounts during the period April 2011 to March 2012¹. It also presents a comparable picture over the five year period i.e., from 2007-08 to 2011-12 based on the data compiled for the relevant financial years and published earlier. The detailed data for 2011-12 along with explanatory notes have been made available on the website of the Reserve Bank. Select 1,342 companies accounted for 43.7 per cent of population paid-up capital (PUC) (provisional estimate supplied by the Ministry of Corporate Affairs, GoI) of all nongovernment financial and investment companies as on March 31, 2012.

The financial and investment companies were classified into five groups, viz., (1) Share Trading and Investment Holding, (2) Loan Finance, (3) Asset Finance, (4) Diversified and (5) Miscellaneous. A company was placed in one of the first three principal activity groups if at least half of its annual income during the study year 2011-12 was derived from that principal activity consistent with the income yielding assets. In case no single principal activity was predominant, the company was classified under ‘Diversified’ group. Companies not engaged in any of the above three activities, but conducting financial activities² were classified under ‘Miscellaneous’ group. It is observed that ‘Share Trading and Investment Holding’ companies dominate the sample in terms of number followed by ‘Loan Finance’ companies (Table 1). However, ‘Loan Finance’ companies dominate in terms of financial parameters.

1. Higher interest rate led to higher growth in income but profit growth suffered

Performance of financial and investment companies suffered in the post-crisis period. Growth in income dropped from 52.9 per cent in 2007-08 to 10.0 per cent in 2009-10 before some recovery in the following year (Statement 1 & Chart 1). However, lower income growth was balanced by lower growth in interest and staff expenses. As a result, profits recorded an impressive growth in 2009-10 and 2010-11.

The situation reversed to some extent in 2011-12.The financial income of the select 1,342 financial and investment companies grew by 29.5 per cent in 2011-12, the highest in the post crisis period. This was due to very high growth in interest income for these companies during the year (51.0 per cent as compared to 36.2 per cent in the previous year). Together with non-financial income, total income increased by 29.1 per cent during 2011-12. However, total expenditure grew at a higher rate of 37.9 per cent in 2011-12 as interest expenses recorded sharp increase (66.2 per cent) together with employees’ remuneration (16.4 per cent). Thus, growth in operating profits of the select companies came down in 2011-12.

Table 1: Composition of Select Companies by Activity – 2010-11 and 2011-12
(Per cent)
Activity	Number of Companies		Paid-up Capital		Financial Income		Total Net Assets
Activity	2010-11	2011-12	2010-11	2011-12	2010-11	2011-12	2010-11	2011-12
	1	2	3	4	5	6	7	8
Share Trading and Investment Holding	45.1	43.9	26.6	32.3	13.8	16.1	15.1	18.9
Loan Finance	34.0	37.9	57.5	55.9	61.2	66.9	68.9	71.8
Asset Finance	5.8	3.9	1.7	0.8	10.7	7.9	9.5	5.8
Diversified	1.1	1.1	0.5	0.2	0.3	0.2	0.2	0.2
Miscellaneous	14.0	13.3	13.7	10.8	13.9	8.9	6.2	3.4
All Activities	100.0	100.0	100.0	100.0	100.0	100	100	100
	(1,340)	(1,342)	(367)	(347)	(513)	(528)	(4,408)	(4,115)
Note: Figures in parentheses represent totals under respective columns (amount in ` billion).

The share of interest income of the financial and investment companies in total income has continuously increased over the 5-year period from 2007-08 to 2011-12 whereas the shares of brokerage income and income from dealings in shares declined (Table 2). On the expenditure side, share of interest expenditure increased.

Operating profit margin, measured as a ratio of operating profits to financial income, of the select companies declined to 28.5 per cent in 2011-12 from 33.4 per cent in 2010-11 (Statement 2). The return on shareholders’ equity (ratio of net profits to net worth) of the select companies also declined to 7.9 per cent in 2011-12. Similarly, the return on assets (ratio of net profits to total net assets) reached its lowest level in the last five years. It is observed that the dividend payout ratio (ratio of dividends paid to net profits) of the select companies has increased over the years (28.4 per cent in 2011-12), resulting in lower retained profits.

Table 2: Shares of Components of Income/Expenditure in Total Income: 2007-08 to 2011-12
(Per cent)
	2007-08	2008-09	2009-10	2010-11	2011-12
	1	2	3	4	5
Components of Income
Interest Income	31.6	49.2	52.3	61.5	65.1
Dividend Income	4.6	3.6	3.0	3.7	3.8
Brokerage Income	12.5	2.4	7.7	7.2	4.9
Net Profit/Loss in Share Dealings	17.4	10.6	10.5	7.0	4.6
Net Earnings from Hire Purchase Financing	1.0	5.0	3.8	6.4	6.1
Lease Rentals	1.8	2.3	1.7	3.4	3.7
Others*	31.1	26.9	21.0	10.8	11.8
Components of Expenditure
Total Expenditure	64.5	72.7	69.2	68.0	73.1
Interest Expenditure	27.5	41.2	36.9	36.7	40.2
Employees Remuneration	9.7	7.5	10.0	10.1	10.6
Managerial Remuneration	0.5	0.4	0.3	0.4	0.2
Bad Debts	4.2	5.3	4.8	2.0	2.0
Other Expenses	19.9	15.3	14.1	15.6	16.7
Depreciation Provision	1.7	1.4	1.5	1.5	1.9
Other Provision	1.0	1.6	1.6	1.7	1.6
* including income from Bill Discounting & Merchant Banking Activities,Other Financial Income, Non-financial Income & Non-operating Surplus/Deficit.

Operating profit growth of companies in most of the activity groups was lower in 2011-12. Share trading companies (as also diversified and miscellaneous companies) suffered the most in a lacklustre capital market. Only the asset finance companies maintained high profit growth. Profitability of companies in all the activity groups was lower in 2011-12 (Statement 2).

2. Share of debentures in total liabilities declined

Select financial and investment companies retraced its growth path in 2010-11 and 2011-12 from the lows during the crisis years. Total assets grew by 28.3 per cent in 2011-12 on top of a 29.8 per cent growth in 2010-11. Expansion during 2010-11 was aided by higher growth in borrowings, particularly from banks. Share of borrowings, which constitutes major part of the total liabilities of financial companies, peaked at 63.3 per cent³ and the debt-equity ratio rose to 147.2 per cent at the end of March 2011 (Chart 2 & Statements 2 and 3). Growth rate of borrowings by the select companies decelerated in 2011-12 and it formed 62.9 per cent of total liabilities. Debt-equity ratio declined to 119.8 per cent at end-March 2012. Debentures which gained in importance as a source of finance in the last few years had a much lower share at end of 2011-12.

For ‘share trading and investment holding’ companies, ‘own funds’, i.e., share capital and reserves and surplus, forms much higher share of liabilities. However, its share came down in the last two years with concomitant increase in the share of borrowings. For ‘loan finance’ and ‘asset finance’ companies, ‘own funds’ contributed around 15 to 25 per cent in total liabilities and borrowings had much larger share. Share of borrowings through debentures by these groups declined in 2011-12 with corresponding rise in the share of bank borrowings.

3. Assets Structure tilted more towards loans and advances

The assets pattern of select companies showed that share of investments has gradually declined over the last five years with loans and advances substituting for it (Chart 3 & Statement 4). Share of loans and advances constituted nearly two-thirds of total net assets in 2011-12.

Shift to loan financing as a business model was seen in the case of select companies in most of the activity groups. For ‘share trading and investment’ companies, the share of investments in total assets dropped sharply from 58.1 per cent in 2010-11 to 45.4 per cent in 2011-12 with corresponding rise in the share of loans and advances. Similarly, for loan finance companies, the share of investments in total assets declined from 21.2 per cent in 2008-09 to 10.3 per cent in 2011-12 with the share of loans and advances rising further.

4. External sources gained further importance in business expansion

As reflected in the liabilities structure of select companies, their reliance on external sources (i.e., other than internally generated funds) for business expansion increased in the recent period (Statement 5). Lower profitability might have contributed to this.

Companies engaged in ‘share trading and investment holding’ which used to fund their business mostly through plough back of profits, changed their sourcing pattern in the last two years. Capital raised from market and borrowings accounted for 70-75 per cent of funding in 2010-11 and 2011-12. In the case of ‘loan finance’ and ‘asset finance’ companies, broad pattern of financing remained same, but share of borrowings from non-bank sources increased.

5. Loan financing became the dominant activity

As already observed, select financial and investment companies have been expanding their business mostly through the lending route. Thus, the share of fresh investments in total uses of funds declined over the years from 32.7 per cent in 2007-08 to 4.7 per cent in 2011-12. Correspondingly, the share of incremental loans increased from 56.6 per cent in 2007-08 to 92.7 per cent in 2011-12 (Statement 6).

The pattern of uses of funds for ‘share trading and investment’ companies fluctuated widely in different years. During 2011-12, investments accounted for 29.7 per cent of deployed funds whereas loans and advances had a share of 50.1 per cent.

6. Concluding Observations

It was observed from the aggregate results of the select 1,342 non-government financial and investment companies that their income grew at a higher rate during the year 2011-12, however, the growth in expenditure was even higher. Operating profits as well as net profits of the companies consequently grew at lower rate and profitability declined. Share of borrowings, a major part of liabilities increased over the 5-year period, whereas on the assets side, loans and advances gained in prominence. Companies continued to rely mainly on external sources of funds for expansion and the deployment was mainly in loans and advances.

Statement 1: Growth Rates of Select Items of Financial and Investment Companies: 2007-08 to 2011-12
(Per cent)
Item	2007-08	2008-09	2009-10	2010-11	2011-12	2007-08	2008-09	2009-10	2010-11	2011-12
Item	All Activities					Share Trading and Investment Holding
1. Financial Income	52.9	19.9	10.0	23.8	29.5	26.3	-5.0	40.1	8.6	3.5
Of which: Interest Received	43.8	30.8	14.1	36.2	51.0	33.8	18.2	-7.3	28.0	19.1
2. Total Income	52.6	20.8	9.5	22.9	29.1	64.0	-6.3	41.5	9.6	3.5
3. Total Expenditure	45.4	33.4	2.2	14.2	37.9	35.1	-4.2	-6.6	7.3	13.5
4. Interest Payment	45.9	40.0	1.8	25.9	66.2	37.4	-7.1	-2.3	27.8	22.2
5. Employees' Remuneration	46.3	14.0	12.1	11.1	16.4	13.0	-4.4	-4.1	22.6	17.4
6. Operating Profits (EBDT)	66.7	-5.7	32.3	47.3	12.0	73.7	-5.6	81.2	9.4	-5.3
7. Net Profits	55.6	-7.9	32.2	56.0	9.4	79.5	-14.8	92.2	9.4	-6.8
8. Profits Retained	63.6	-12.5	33.3	76.1	3.6	93.2	-30.0	94.1	13.7	-9.3
9. Investments @	47.5	20.6	2.3	25.6	6.6	41.5	1.3	8.2	24.7	7.9
10. Total Net Assets @	39.8	15.8	12.4	29.8	28.3	23.5	6.2	3.2	14.1	12.6
11. Borrowings @	35.7	13.8	14.2	37.6	36.3	-17.3	-6.9	10.3	48.3	7.6
Of which: from Banks @	27.6	17.8	8.7	57.2	21.4	-53.5	14.5	8.2	37.9	10.3
	Loan Finance					Asset Finance
1. Financial Income	57.1	27.8	4.6	32.4	43.1	20.8	15.0	19.8	28.8	53.3
Of which: Interest Received	54.5	36.0	16.8	36.3	54.0	39.5	-13.2	156.2	55.7	55.1
2. Total Income	34.9	28.4	5.1	29.9	43.9	41.4	23.4	8.5	30.2	50.3
3. Total Expenditure	40.4	43.9	1.6	16.9	51.1	35.5	31.2	10.1	17.8	51.1
4. Interest Payment	43.2	44.7	1.5	25.9	72.6	40.0	35.2	4.9	29.3	73.0
5. Employees' Remuneration	41.9	13.7	14.8	15.7	30.2	44.9	25.2	15.0	25.3	35.8
6. Operating Profits (EBDT)	46.2	-8.3	14.0	89.1	23.7	59.9	-33.8	84.0	60.8	63.7
7. Net Profits	-4.6	-8.6	10.5	100.9	24.9	53.4	-4.3	30.2	92.6	59.3
8. Profits Retained	-15.2	-7.2	8.0	143.4	13.7	78.2	1.6	21.2	102.1	62.4
9. Investments @	32.0	42.7	-7.9	29.2	6.6	41.5	5.5	4.6	66.8	-82.0
10. Total Net Assets @	45.6	18.2	11.3	35.0	35.5	18.5	5.9	25.4	31.2	24.7
11. Borrowings @	45.5	13.4	15.5	38.4	41.9	17.9	9.4	41.2	33.2	26.3
Of which: from Banks @	26.3	18.2	7.2	52.8	22.9	-6.8	-39.2	43.5	107.1	21.4
	Diversified					Miscellaneous
1. Financial Income	106.3	7.8	-10.5	26.9	11.6	71.5	19.4	15.5	5.3	-6.9
Of which: Interest Received	-9.9	-6.7	-47.2	68.6	41.4	-19.9	-43.6	-5.2	37.8	16.1
2. Total Income	82.0	6.8	-12.2	24.5	7.9	64.3	21.1	14.3	6.4	-10.0
3. Total Expenditure	121.9	17.9	-16.4	22.9	19.4	54.8	25.3	5.0	5.9	-1.4
4. Interest Payment	27.2	10.1	-32.4	55.1	115.0	95.9	41.4	11.6	-0.8	21.4
5. Employees' Remuneration	24.2	40.8	4.1	40.9	-1.8	57.2	16.3	11.4	3.4	-2.9
6. Operating Profits (EBDT)	11.7	-28.1	32.2	30.1	-22.8	84.1	5.3	43.2	0.4	-27.8
7. Net Profits	-1.6	-48.9	106.8	26.2	-9.1	96.0	8.2	43.1	37.4	-56.8
8. Profits Retained	-21.3	-54.8	151.3	34.1	2.3	101.5	7.8	73.5	74.4	-133
9. Investments @	16.0	-11.8	-28.7	58.8	-24.5	224.6	-19.6	45.0	1.3	7.8
10. Total Net Assets @	11.0	4.9	-14.2	21.1	1.9	92.9	20.6	21.8	16.0	-0.4
11. Borrowings @	13.4	1.9	-31.0	-3.2	9.9	105.5	24.4	1.9	0.4	0.6
Of which: from Banks @	30.8	12.7	55.9	1.1	-30.1	155.9	30.4	2.2	74.0	-5.9
@: adjusted for revaluations, if any.

Statement 2: Select Financial Ratios - Financial and Investment Companies: 2007-08 to 2011-12
(Per cent)
Item	2007-08	2008-09	2009-10	2010-11	2011-12	2007-08	2008-09	2009-10	2010-11	2011-12
Item	All Activities					Share Trading and Investment Holding
1. Dividends to Net Profits	13.8	19.7	24.5	24.5	28.4	7.5	23.0	32.6	26.2	26.7
2. Operating Profits to Financial Income	35.9	27.6	31.4	33.4	28.5	70.5	63.7	69.0	61.0	48.4
3. Net profits to Total Net Assets	4.9	2.4	2.6	2.6	2.3	22.9	5.2	6.3	5.1	4.1
4. Net profits to Net Worth	10.5	7.8	8.5	9.3	7.9	11.4	7.1	8.7	8.3	6.6
5. Debt to Equity	83.5	106.2	114.5	147.2	119.8	10.3	8.8	11.5	19.2	32.6
	Loan Finance					Asset Finance
1. Dividends to Net Profits	32.6	18.9	21.1	24.3	27.9	17.0	22.0	27.4	14.0	8.7
2. Operating Profits to Financial Income	20.9	22.1	26.7	30.4	25.4	25.1	14.4	20.2	29.5	26.6
3. Net profits to Total Net Assets	1.2	1.7	1.9	2.0	1.9	2.9	1.6	1.5	2.6	2.6
4. Net profits to Net Worth	5.7	6.7	8.1	9.6	9.0	11.3	7.6	10.3	17.6	15.8
5. Debt to Equity	177.3	158	180.4	244.5	199.4	268	240.7	342	263	125.7
	Diversified					Miscellaneous
1. Dividends to Net Profits	39.4	14.4	22.9	21.4	9.5	10.8	16.9	22.5	32.9	125.5
2. Operating Profits to Financial Income	19.7	16.1	18.0	51.9	14.0	36.4	27.6	33.6	21.8	17.0
3. Net profits to Total Net Assets	6.3	1.1	1.4	5.1	3.2	6.2	3.3	3.5	2.0	1.6
4. Net profits to Net Worth	8.1	3.1	4.0	8.5	5.9	17.5	16.4	10.0	6.8	3.2
5. Debt to Equity	39.1	21.5	61.4	3.0	14.8	41.9	108.6	34.5	10.6	10.3

Statement 3: Liabilities Structure of Select Financial and Investment Companies: 2007-08 to 2011-12
(Per cent)
Capital and Liabilities	2007-08	2008-09	2009-10	2010-11	2011-12	2007-08	2008-09	2009-10	2010-11	2011-12
Capital and Liabilities	All Activities					Share Trading and Investment Holding
A. Share Capital	11.4	7.8	7.7	8.3	8.4	20.3	18.4	13.8	14.7	14.4
B. Reserves and Surplus	22.7	22.8	22.6	19.4	20.9	52.1	54.6	58.8	46.7	47.0
C. Borrowings	56.5	60.5	58.8	63.3	62.9	21.5	19.6	19.4	28.2	29.9
of which, (i) Debentures@	17.3	17.8	19.7	22.3	15.8	3.4	3.5	6.8	8.5	7.9
(ii) Bank borrowings	20.1	27.0	22.9	28.6	29.3	3.7	6.3	4.3	10.1	10.5
D. Trade Dues & Other Current Liabilities	7.6	5.3	9.3	7.2	5.7	4.6	6.3	5.5	8.2	7.0
of which, Sundry Creditors	3.3	1.6	3.3	2.8	2.1	1.4	1.0	2.3	2.1	2.8
E. Other Liabilities	1.8	3.6	1.5	1.7	2.1	1.5	1.2	2.6	2.2	1.6
Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
	Loan Finance					Asset Finance
A. Share Capital	11.0	6.1	6.6	7.0	6.6	1.9	10.1	2.3	1.5	1.2
B. Reserves and Surplus	10.3	19.0	17.3	14.0	14.4	14.2	10.4	12.7	12.5	15.5
C. Borrowings	72.1	66.0	69.0	73.4	72.5	71.1	70.6	77.8	79.7	78.6
of which, (i) Debentures@	21.4	20.0	22.5	26.1	18.4	35.7	40.5	40.3	30.3	19.2
(ii) Bank borrowings	25.0	28.1	26.4	33.5	33.8	22.4	16.2	25.2	38.3	48.8
D. Trade Dues & Other Current Liabilities	4.8	3.7	5.8	3.9	4.3	11.2	8.0	6.3	5.6	3.4
of which, Sundry Creditors	1.3	1.2	1.4	1.0	1.3	2.9	3.5	2.7	2.4	0.8
E. Other Liabilities	1.9	5.2	1.3	1.7	2.2	1.6	0.9	0.9	0.7	1.4
Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
@:includes privately placed debentures

Statement 3: Liabilities Structure of Select Financial and Investment Companies: 2007-08 to 2011-12
(Per cent)
Capital and Liabilities	2007-08	2008-09	2009-10	2010-11	2011-12	2007-08	2008-09	2009-10	2010-11	2011-12
Capital and Liabilities	Diversified					Miscellaneous
A. Share Capital	18.4	6.4	23.1	17.4	9.3	7.4	5.1	8.4	18.3	26.8
B. Reserves and Surplus	32.4	28.2	13.0	45.0	44.8	27.8	15.0	26.1	22.7	22.7
C. Borrowings	29.3	43.3	50.1	25.5	23.4	45.4	69.9	36.0	13.5	17.1
of which, (i) Debentures@	0.6	5.9	20.8	0.0	0.0	8.3	15.6	9.0	1.4	0.8
(ii) Bank borrowings	21.6	25.7	21.0	21.0	12.2	25.3	42.4	20.0	5.5	7.4
D. Trade Dues & Other Current Liabilities	16.8	20.6	12.2	10.6	21.5	17.4	8.3	27.2	44.1	31.3
of which, Sundry Creditors	10.9	2.4	5.3	7.0	13.6	12.7	3.4	12.2	24.2	17.1
E. Other Liabilities	3.1	1.4	1.7	1.6	1.0	2.0	1.6	2.3	1.4	2.2
Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
@:includes privately placed debentures

Statement 4: Asset Structure of Select Financial and Investment Companies: 2007-08 to 2011-12
(Per cent)
Assets	2007-08	2008-09	2009-10	2010-11	2011-12	2007-08	2008-09	2009-10	2010-11	2011-12
Assets	All Activities					Share Trading and Investment Holding
A. Cash and Bank Balances	7.5	8.8	10.8	7.7	6.4	3.3	7.8	4.3	8.4	7.8
of which, Deposits with Banks	7.3	8.7	10.5	7.5	6.2	3.2	7.8	4.2	8.4	7.4
B. Investments	28.6	22.9	22.8	18.6	16.9	64.7	58	66.1	58.1	45.4
C. Receivables	57.1	64.5	61.3	69.4	71.8	23.4	20.5	20.0	25.6	38.0
of which, (i) Loans and advances	51.4	60.9	57.8	66.0	67.3	20.7	16.2	17.4	21.9	34.6
(ii) Sundry debtors	4.4	2.0	1.9	1.9	1.3	1.4	3.4	1.5	2.0	1.4
D. Inventories	3.9	2.4	2.2	1.8	2.2	6.1	11.5	4.5	4.1	5.5
of which, Industrial Securities	2.5	2.3	1.9	1.5	1.7	6.1	11.4	4.0	3.8	5.4
E. Net Fixed Assets	1.7	1.2	1.5	1.4	1.8	1.9	1.0	3.6	1.7	1.8
F. Other Assets	1.2	0.2	1.5	1.1	1.0	0.6	1.3	0.6	2.1	1.5
Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
	Loan Finance					Asset Finance
A. Cash and Bank Balances	4.6	6.3	6.7	4.7	4.7	3.6	10.1	11.1	6.6	7.4
of which, Deposits with Banks	4.5	6.2	6.4	4.5	4.5	3.4	9.7	10.8	6.4	7.3
B. Investments	20.4	21.2	17.4	11.9	10.3	5.3	4.6	4.1	4.6	0.4
C. Receivables	67.7	70.4	71.2	80.3	81.7	88.1	80.2	81.8	86.2	85.8
of which, (i) Loans and advances	65.6	68.8	68.6	78.3	79.5	87.1	74.1	79.5	85.5	57.1
(ii) Sundry debtors	0.8	0.3	1.1	0.4	0.9	0.3	0.5	0.2	0.2	0.5
D. Inventories	4.9	1.1	2.0	1.4	1.5	0.2	0.4	0.2	0.3	0.2
of which, Industrial Securities	2.1	1.0	1.9	1.0	1.0	0.1	0.2	0.1	0.2	0.1
E. Net Fixed Assets	0.8	0.8	1.0	0.9	1.1	2.4	3.8	2.6	2.0	6.0
F. Other Assets	1.6	0.2	0.2	0.8	0.7	0.5	0.9	0.1	0.3	0.1
Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
	Diversified					Miscellaneous
A. Cash and Bank Balances	14.3	3.3	17.5	18.6	22.6	26.7	20.4	31.3	40.5	32.0
of which, Deposits with Banks	13.8	3.2	17.3	18.5	22.6	26.5	20.1	31.2	40.5	31.8
B. Investments	31.7	9.6	24.6	7.6	5.8	24.9	7.8	23.5	18.3	25.8
C. Receivables	34.8	81.3	42.6	61.5	41.6	43.9	68.7	41.3	30.2	28.0
of which, (i) Loans and advances	25.4	73.1	32.3	47.1	12.5	16.9	58.8	34.2	6.6	11.6
(ii) Sundry debtors	6.0	1.1	7.1	12.1	24.8	24.9	8.4	5.2	19.8	10.9
D. Inventories	5.2	3.7	11.7	1.9	5.7	0.8	0.4	1.2	3.7	0.8
of which, Industrial Securities	5.0	3.4	2.1	1.2	4.9	0.7	0.3	1.1	3.4	0.3
E. Net Fixed Assets	12.5	2.0	1.8	10.2	10.9	2.8	2.3	1.3	4.8	8.8
F. Other Assets	1.5	0.2	0.0	0.1	13.4	0.9	0.6	0.3	2.5	4.6
Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0

Statement 5: Sources of Funds: 2007-08 to 2011-12
(Per cent)
Year	2007-08	2008-09	2009-10	2010-11	2011-12	2007-08	2008-09	2009-10	2010-11	2011-12
Year	All Activities					Share Trading and Investment Holding
Sources of Funds
Internal Sources (Own sources)	21.5	32.7	-15.4	10.5	9.8	103.8	57.9	-89.6	29.4	25.0
A. Paid-up Capital	1.8	0.4	0.6	0.1	0.1	4.0	0.0	0.0	0.1	0.0
B. Reserves and Surplus	19.2	11.8	5.5	9.5	6.9	101.9	64.0	-110.8	29.2	24.0
C. Provisions	0.5	20.5	-21.6	1.0	2.8	-2.1	-6.1	21.2	0.1	0.9
of which: Depreciation Provision	-0.1	0.6	0.2	0.1	0.5	-0.9	0.7	-0.7	0.1	0.8
External Sources (Other than own sources)	78.5	67.3	115.4	89.5	90.2	-3.8	42.0	189.6	70.6	75.0
D. Paid-up Capital	19.4	12.7	16.4	11.2	11.7	17.4	32.2	90.6	19.1	51.1
of which: Premium on Shares	10.8	8.2	14.7	7.7	9.1	13.9	27.1	80.3	14.3	30.0
E. Borrowings	52.8	52.0	74.6	75.8	75.4	-24.3	-26.6	53.1	74.8	18.8
of which: From Banks	15.4	28.9	18.8	45.7	23.3	-23.3	14.6	9.6	22.5	8.7
F. Trade Dues and Other Current Liabilities	5.9	2.5	24.0	2.4	2.2	2.5	33.9	40.1	-23.7	-4.0
of which: Sundry Creditors	3.0	0.2	7.5	0.6	-3.2	1.9	-20.3	8.1	-9.4	-22
G. Others	0.3	0.1	0.4	0.1	0.9	0.6	2.5	5.8	0.4	9.1
Total Sources of Funds	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
	Loan Finance					Asset Finance
Sources of Funds
Internal Sources (Own sources)	5.8	35.6	-30.5	8.6	7.6	8.6	21.0	6.4	8.0	16.8
A. Paid-up Capital	2.2	0.4	1.1	0.1	0.2	0.1	3.7	0.0	0.0	0.0
B. Reserves and Surplus	2.2	7.5	7.6	7.3	4.7	9.9	18.9	5.6	9.0	11.7
C. Provisions	1.4	27.7	-39.1	1.3	2.8	-1.4	-1.6	0.9	-1.0	5.1
of which: Depreciation Provision	0.1	0.4	0.2	0.1	0.2	-2.2	3.0	-0.5	-0.9	3.2
External Sources (Other than own sources)	94.2	64.4	130.5	91.4	92.4	91.4	79.0	93.6	92.0	83.2
D. Paid-up Capital	18.9	11.6	14.6	9.9	6.8	3.6	54.6	0.1	2.9	9.6
of which: Premium on Shares	6.0	7.9	13.7	6.7	6.6	3.1	0.0	0.0	2.3	9.2
E. Borrowings	72.7	49.0	105.8	78.7	81.5	71.5	109.1	112.7	84.5	80.2
of which: From Banks	21.2	27.1	20.4	44.7	23.9	-10.8	-188.7	37.9	84.4	42.1
F. Trade Dues and Other Current Liabilities	2.6	3.7	9.9	2.8	4.1	16.3	-84.7	-19.2	4.6	-6.6
of which: Sundry Creditors	0.2	2.5	1.3	1.6	0.7	5.1	-18.1	1.5	1.6	-8.5
G. Others	0.1	0.0	0.2	0.1	0.0	0.1	0.0	0.0	0.0	0.0
Total Sources of Funds	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
	Diversified					Miscellaneous*
Sources of Funds
Internal Sources (Own sources)	17.3	14.4	-10.0	20.4	143.2	12.4	16.4	16.9	15.5	151.1
A. Paid-up Capital	0.0	0.5	0.0	0.0	0.0	0.1	0.2	0.0	0.1	0.0
B. Reserves and Surplus	28.2	15.9	-6.8	24.9	159.8	11.3	14.1	14.6	14.4	-80.2
C. Provisions	-10.9	-2.0	-3.1	-4.5	-16.7	1.0	2.2	2.3	1.0	231.3
of which: Depreciation Provision	-8.6	8.1	0.3	-3.9	21.2	0.7	1.1	0.8	3.7	223.0
External Sources (Other than own sources)	82.7	85.6	110.0	79.6	-42.4	87.6	83.6	83.1	84.5	-51.1
D. Paid-up Capital	1.1	6.7	-0.9	116.2	0.0	26.9	8.2	15.5	38.3	1171.9
of which: Premium on Shares	1.0	6.4	-0.7	66.3	0.0	22.3	5.3	12.9	26.4	334.8
E. Borrowings	40.3	16.5	139.9	-5.0	114.4	48.4	80.5	3.9	0.4	37.7
of which: From Banks	77.3	58.2	-46.7	1.3	-283.3	32.0	58.1	2.5	17.1	-172.7
F. Trade Dues and Other Current Liabilities	41.3	62.2	-29.0	-31.7	-157.6	11.4	-5.2	63.6	45.8	-1297.3
of which: Sundry Creditors	43.0	-1.6	-28.9	-20.6	20.5	8.4	-1.6	19.2	-0.8	-2877.3
G. Others	0.0	0.1	-0.1	0.0	0.0	0.9	0.0	0.1	0.0	36.9
Total Sources of Funds	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
*: Some of the percentages are very high due to small denominator.

Statement 6: Uses of Funds: 2007-08 to 2011-12
(Per cent)
Year	2007-08	2008-09	2009-10	2010-11	2011-12	2007-08	2008-09	2009-10	2010-11	2011-12
Year	All Activities					Share Trading and Investment Holding
Uses of Funds
A. Cash and Bank Balances	8.1	12.0	5.8	2.1	-0.1	-0.9	69.8	7.1	-17.5	-4.8
of which: Deposits with Banks	8.1	11.7	4.5	1.9	-0.6	-1.1	69.8	6.7	-17.6	-8.2
B. Investments	32.7	27.8	5.3	16.6	4.7	102.6	14.1	147.2	93.8	29.7
of which: (a) Government and Semi-Government Securities	0.0	2.6	-5.8	-1.0	0.3	0.2	-9.3	3.2	-8.2	-2.4
(b) Mutual Funds	12.1	11.3	-15.9	0.1	-1.2	60.4	27.8	-21.0	-14.8	-3.2
(c) Shares and Debentures of Other Indian Companies	20.6	12.9	-4.1	10.5	3.4	32.1	53.8	82.5	74.0	16.7
C. Receivables	63.1	57.6	86.1	79.0	91.9	58.6	14.9	-121.4	20.5	55.1
of which: (a) Loans and Advances	56.6	54.0	77.6	76.3	92.7	54.1	1.0	-130.0	22.1	50.1
(b) Sundry Debtors	4.9	-0.4	8.2	2.1	-0.3	1.8	18.2	3.2	3.5	-1.4
D. Inventories	-4.2	1.8	1.9	0.9	1.3	-52.2	8.6	55.3	-4.1	14.9
of which: Industrial Securities	-6.4	6.0	-0.6	0.6	0.6	-52.3	41.6	44.2	-3.9	14.4
E. Gross Fixed Assets	-0.4	0.6	1.4	1.2	1.7	-7.7	-8.1	10.7	3.5	4.0
F. Other Assets	0.6	0.2	-0.5	0.3	0.4	-0.4	0.6	1.1	3.9	1.1
Total Uses of Funds	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
	Loan Finance					Asset Finance
Uses of Funds
A. Cash and Bank Balances	4.8	-7.3	-8.8	2.9	-0.2	-20.1	55.5	24.1	0.1	17.3
of which: Deposits with Banks	4.7	-7.6	-11.0	-0.4	-0.4	-19.4	55.6	24.3	0.0	17.0
B. Investments	15.9	39.7	-17.1	10.4	2.4	10.3	4.3	0.9	7.8	-9.1
of which: (a) Government and Semi- Government Securities	-0.1	4.1	-8.6	-0.4	0.7	0.2	2.8	0.3	0.0	-0.1
(b) Mutual Funds	1.9	15.0	-13.8	2.3	-1.0	-1.6	11.0	-2.9	1.9	0.2
(c) Shares and Debentures of Other Indian Companies	27.0	12.2	-4.9	5.4	2.6	15.1	-0.2	0.7	0.9	-0.2
C. Receivables	71.6	65.2	129.7	84.5	97.2	110.4	36.1	75.3	92.6	74.6
of which: (a) Loans and Advances	70.6	63.2	122.7	82.8	95.8	109.0	-52.3	78.3	94.8	113.6
(b) Sundry Debtors	-0.9	-0.2	4.0	0.1	0.2	0.3	3.5	-0.8	0.1	2.0
D. Inventories	6.0	1.2	-4.8	1.3	-0.1	0.3	2.1	-0.1	-0.3	-1.4
of which: Industrial Securities	1.9	4.8	-5.5	0.8	-0.8	0.1	-1.1	0.1	-0.3	-1.0
E. Gross Fixed Assets	0.4	1.1	1.9	0.8	0.4	-1.0	0.2	-0.3	-0.2	18.5
F. Other Assets	1.3	0.1	-0.9	0.0	0.2	0.0	1.7	0.0	0.0	0.1
Total Uses of Funds	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
	Diversified					Miscellaneous*
Uses of Funds
A. Cash and Bank Balances	-33.8	-51.8	-6.1	-9.3	-348.5	30.3	70.7	27.5	31.4	-903.2
of which: Deposits with Banks	-35.5	-48.1	-5.6	-7.3	-346.2	30.4	70.4	27.3	31.4	-884.2
B. Investments	50.1	-25.7	61.3	16.8	-101.5	35.8	-11.1	41.3	1.7	694.1
of which: (a) Government and Semi- Government Securities	-0.1	-1.5	32.4	0.2	-2.3	0.0	0.3	0.1	-0.3	38.2
(b) Mutual Funds	39.9	16.0	-0.9	0.4	-36.4	10.4	-7.6	-23.3	-18.0	-31.6
(c) Shares and Debentures of Other Indian Companies	0.1	-93.0	29.7	13.1	-62.9	1.9	10.1	-11.7	3.9	-890.4
C. Receivables	31.7	147.5	102.8	106.9	358.3	32.8	37.8	27.6	54.4	-99.5
of which: (a) Loans and Advances	8.6	25.6	124.9	95.8	202.3	11.8	43.0	14.6	9.5	734.2
(b) Sundry Debtors	14.5	0.5	-35.5	9.8	279.5	20.6	-6.4	16.7	44.8	-1113.1
D. Inventories	18.1	27.8	-59.0	-14.9	112.1	-0.4	1.3	3.8	6.9	5.1
of which: Industrial Securities	-0.3	29.5	-0.1	-15.1	123.5	-0.5	1.2	3.8	8.2	-17.1
E. Gross Fixed Assets	38.2	0.9	0.9	0.7	-25.0	1.6	0.8	-0.2	7.0	126.7
F. Other Assets	-4.3	1.4	0.0	-0.2	103.8	-0.1	0.4	0.0	-1.3	276.7
Total Uses of Funds	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0
*: Some of the percentages are very high due to small denominator.

^* Prepared in the Company Finances Division of the Department of Statistics and Information Management. The previous study was published in the October 2012 issue of the Reserve Bank of India Bulletin, which covered 1,340 non-government financial and investment companies during 2010-11. In the present study, 412 new companies have been covered in addition to 930 companies common with the previous study.

¹ In the case of companies, which either extended or shortened their accounting year, income, expenditure and appropriation figures have been annualised. The balance sheet data, however, have been retained as presented in the annual accounts of companies. The analysis of the financial performance for the year, is subject to this limitation.

² Companies engaged in financial advisory services, fund management services, portfolio management services, etc., are also included in ‘Miscellaneous’ group.

³ Refers to the position as at the end of accounting period of select companies.