ISSN : 0976-4712

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2b1c11552d1f02433627282090a161718191a25262728292a34353637 38393a434445464748494a535455565758595a636465666768696a73 7475767778797a838485868788898a92939495969798999aa2a3a4a5 a6a7a8a9aab2b3b4b5b6b7b8b9bac2c3c4c5c6c7c8c9cad2d3d4d5d6d7 d8d9dae1e2e3e4e5e6e7e8e9eaf1f2f3f4f5f6f7f8f9faffc4001f01000301 01010101010101010000000000000102030405060708090a0bffc400b 51100020102040403040705040400010277000102031104052131061 241510761711322328108144291a1b1c109233352f0156272d10a1624 34e125f11718191a262728292a35363738393a434445464748 Editor Dr. Surendra SisodiaEditorial Advisory Panel Dr. A.S. Solanki Public Authority of Agriculture Affairs & Fish Resources, State of Kuwait K. A. S Dhammika University of Kelaniya, Sri Lanka Dr. N. Panchnatham Annamalai University, Chidambaram Dr. Hanuman Prasad M L Sukhadia University, Udaipur Dr. Ramendra Prasad Universitt des Saarlandes, Germeny Dr. Sanjay J. Bhayani Saurashtra University, Rajkot Dr. Vishwas Saxena ADSIL, New Delhi Published by : Mrs. Simple S For Share Study Hub, Jaipur Address: Registered Office : 121, Shripuram Colony, Gurjar Ki Thadi, Gopalpura Bypass, Jaipur, Rajasthan, India Correspondence Address : A-9, Vivekanand Colony, Khetri House, O/S Chandpole Gate, Jaipur-302016, Rajasthan (India) PH. : 099296-64887 E-mail : sharestudyhub@gmail.com www.sharestudyhub.com Printed at : Design House, Jaipur

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ContentsEfficiency and Profitability Relationship: A Study of Indian Textile Industries 4 K.S. Vatliya Segment Reporting Practices: A Study Based on Indian Banking Industry 13 Satyajit Ghorai A Role of Stimulation for Selection of Health Insurance 21 (with Special Reference to Thanjavur District) V. Pothigaimalai & K. Bharathipriya Receivable Management: An Empirical Study with 27 Reference to Pharmaceutical Company Shital P. Vekariya Go Rural : A Destination For Successful Business Houses 32 Sumedha Kalia, Urvashi Kalra & Rajni Kamboj Knowledge Management : A Study of ICICI Bank 37 Kiran Mor & Aditi A. Mahajan The Relationship between Employee Satisfaction and 41 Hospital Patient Experiences Tulsee Giri Goswami, Pankaj Garg & S. S. Ranawat Fiscal Crisis in Punjab: The Sustainability Issue 46 Anupama Uppal & Jaspal Singh

Institutional Repository at Sardar Patel University Campus 54 Vidya Repository Nimesh D.Oza Derivation of New Management Philosophy from 62 Indian Symbols of Spirituality Neelam Sharma The Growth, Challenges and Opportunities of Retail Industry in India 68 Gangadhar V. Kayande Patil Contents 3

Innovation, Non-Expertise and Inabilities of Developing Countries in E-Banking and E-Commerce V. K Saxena & Mr. Kehar Singh Social Entrepreneurship and Economic Transformation Anil Adsule Firewall & Other Network Security Arsenal For Information Security Yusuf Ali, Rafi Ahmad & Sharad Panwar A Scheme for Classifying Intrusion Signatures Gaurav Jain & Amit Swami A Comparative Analysis of Current Intrusion Detection Technologies Abid Husain Power of Parliament to Expel its Member's from House Pitresh Kumar Bhatt

74

81

84 89

98 104

Members List 109 Call for Papers 110 Subscription / Membership Form 111 5Efficiency and Profitability Relationship

Review of Literatureresearch he revealed

various problems of

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0010100000c484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5 346540000000049454320735247420000000000000000000000000000f6d60001000000 00d32d48502020000000000000000000000000000000000000000000000000000000000 00000000000000000000000000000000000001163707274000001500000003364657363 000001840000006c77747074000001f000000014626b707400000204000000147258595a 00000218000000146758595a0000022c000000146258595a0000024000000014646d6e6 40000025400000070646d6464000002c400000088767565640000034c00000086766965 77000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563 68000004300000000c725452430000043c0000080c675452430000043c0000080c625452 430000043c0000080c7465787400000000436f7079726967687420286329203139393820 4865776c6574742d5061636b61726420436f6d70616e7900006465736300000000000000 12735247422049454336313936362d322e3100000000000000000000001273524742204 9454336313936362d322e31000000000000000000000000000000000000000000000000

ratio analysis as major tool for financial the problems .He also suggested for the000000

Dr. K.S. VatliyaBhavnagar, Gujarat

Principal , M.J.Commerce College, Bhavnagar University, performance by studying 22 ratios of improvement of profitability and techniques productivity, liquidity and

turnover

groups of of cost control. recently in the year 1998 a the industries for the period from 1961 to study was made by pro. S.J.parmar on 1971. In the year of 2002 Sugan C. Jain has profitability analysis of cement industry in I n t h e p r e s e n t c o m p e t i t i v e e n v i r o n m e n

t f o r s u r v i v a l o f b u s i n e s s o n s t r a t e g y i s c o m p e t i n g t h o u g h

c o s t r e d u c t i o n ? T h e c o s t r e d u c t i o n c a n b e a c h i e v e d t h o u g h

e f f i c i e n c y i n t h e o r g a n i z a t i o n . T h i s e f f i c i e n c y l e a d s t h e

o r g a n i z a t i o n t o w a r d s t h e h i g h e r p r o f i t a b i l i t y . I n t h e p r e

s e n t p a p e r a n a t t e m p t h a s b e e n m a d e t o a n a l y s i s t h e e f f i c i

e n c y a n d p r o f i t a b i l i t y o f t h e I n d i a n t e x t i l e i n d u s t r i e s . F

o r t h e p u r p o s e o f t h e s t u d y w e h a v e s e l e c t e d t o p t h r e e u n i

t s o f I n d i a n t e x t i l e i n d u s t r i e s w i t h a s t u d y p e r i o d o f t h e

f i v e y e a r s . R e s u l t s r e v e a l t h a t t h e e f f i c i e n c y h a s a d i r e

c t r e l a t i o n s h i p w i t h p r o f i t a b i l i t y o f I n d i a n T e x t i l e I n d u s

t r i e s . written a book on performance appraisal Gujarat state for the period from 1998-89 to automobile industry In his study he analyses 199495.He had made an attempt to analyze the performance of the automobile industry financial strength, liquidity, profitability, cost and also presented comparative study of some and sales trend and social welfare trend by national and international units. Dutta S.K has using various ratios analysis, common size written an article on Indian Tea industry an analysis and value added analysis. He made apprai salwhich waspublis

h e d i n several suggestions for the improvement of management accountant in the year of March profitability of industry. In his analysis he

1992. He analyzed the profitability, liquidity

indicates various reasons for higher cost, low and financial efficiency by using various profitability, and inefficient use of internal resources.

IntroductionT h e f i n a n c i a l m a n a g e r h a s t o t a

textile industry, until the economic

k e r a t i o n a l l i b e r a l i z a t i o n o f I n d i a n e c o n o m y w a

s d e c i s i o n s f r o m t i m e t o t i m e k e e p i n g i n v i e w p r e d o m i

n a n t l y a n d u n o r g a n i z e d i n d u s t r y . T h e t h e o b j e c t i v e

o f t h i s c o m p a n y . A l w a y s t h e e c o n o m i c l i b e r a l i z a t i o

n o f I n d i a n e c o n o m y i n d e c i s i o n s m u s t b e b a s e d o n

t h e a n a l y t i c a l t h e e a r l y 1 9 9 0 s l e d t o s t u p e n d o u s g

r o w t h o f t o o l s . F i n a n c i a l a n a l y s i s i s t h e m o s t u s e f u l t

h i s I n d i a n i n d u s t r y . T h e I n d i a n t e x t i l e t e c h n

i q u e s i n t h i s r e g a r d s . F i n a n c i a l a n a l y s i s i n d u s

t r y i s o n e o f t h e l a r g e s t t e x t i l e i n d u s t r i e s r e l i e s o n

t h e c o m p a r i s o n s o r r e l a t i o n s h i p s o f i n t h e w o r l

d a n d I n d i a e a r n s a r o u n d 2 7 % o f t h e t h e d a t a t h a t e n

h a n c e s t h e u t i l i t y o r t h e f o r e i g n e x c h a n g e f r o m e x p

o r t s o f t e x t i l e s a n d ratios. Pandey (1995) showed how these financial statements and ratio were necessary in accounting for planning and control and

Objective of the Studydecisionmaking system. Gupta (2005) This study is aimed at attempting the focused on how these ratios were the predictor following: of the failure and how these ratios are helpful To analyze profitability of the selected in fulfilling the fact of financial statements units of the

industry. with better interpretation through these. Khan To examine the liquidity position of the and Jain (2005) expressed uses of the financial companies. statements, profit planning and cost control, To study long term solvency position of the practical value of the accounting information. its related products. Further, globalization of This analysis consists in applying various Indian textile industry has been a paradigm analytical tools and techniques to the financial increase in the 'total industrial production' corporate decisionmaking whether they companies. strategic, analysis or simple routine decision To examine relation between

liquidity and managers. Dr. Kumar Bar Das published a profitability in the selected units of the d a t a . T h e w o r d ' p r o f i t a b i l i t y ' i s c o m

p o s e d o f f a c t o r o f t h i s i n d u s t r y , w h i c h p r e s e n t l y s t a

n d s t w o w o r d s ' p r o f i t ' a n d ' a b i l i t y ' . P r o f i t a b i l i t y i s

a t 1 4 % . F u r t h e r m o r e , t h e c o n t r i b u t i o n o f t h e

t h e p o w e r o f t h e e n t e r p r i s e t o e a r n p r o f i t s . I n d i a n t

e x t i l e i n d u s t r y t o w a r d s t h e g r o s s P r o f i t a b i l i t y

a c t s a s a y a r d s t i c k t o m e a s u r e t h e d o m e s t i c p r o d u c

t ( G D P ) o f t h e I n d i a i s a r o u n d o p e r a t i n g o f t

h e e n t e r p r i s e , t h e g r e a t e r 3 % a n d , t h e n u m b e r i s

s t e a d i l y i n c r e a s i n g . p r o f i t a b i l i t y m o r e . P r o f i t a b i l i t y

a l s o i n d i c a t e s T o d a y , t h e I n d i a n t e x t i l e i n d u s

t r y e m p l o y s around 35 million personnel directly and it comprehensive book in 1987 which covered industry. period from 1970 to 1980.He concluded various aspects like factor productivity, To summarize the main finding of the

public acceptance of products produced by

location degree of competition study capacity by offering suitable suggestions. utiliza tio n, s ize eff iciency financial performance, Distribution pattern and

Research Methodolo gygovernment policies with

respect to pricing Source of the Data and distribution. He indicated that all Profitability and Relationship A Study enterprise and shows the combined effects of accounts for 21% of the total employment liquidity, asset management and debt generated in the economy. 'The national textile profitability ratios decrease gradually and of Indian Textile Industries has been made by became negative for 1973-74 and 1974-75 but using data from Financial Statements of top management on operating results. In this paper Ministry of policy 2000' was introduced by the

an attempt has been made to analyze the Textile under the Government of India. This improved gradually thereafter. Dr.Pramod three textile companies of Indian Textile profitability, liquidity and solvency position of policy aims at increasing the foreign exchange Kumar published a Book in 1991, Analysis of Industries and from website of three

t h r e e I n d i a n t e x t i

l e ( c o t t o n ) c o m p a n i e s . e a r n i n g t o t h e t u n e o f U S $

5 0 b i l l i o n b y t h e e n d o f t h e y e a r 2 0 1 0 . T h e t e x t i l e s e c

t o r h a s a A b o u t t h e T e x t i l e I n d u s t r y p r o m i n e

n t p l a c e i n t h e n a t i o n a l e c o n o m y . T h e t e x t i l e i n d u s t r y h

a s b e e n a n i m p o r t a n t s o u r c e T h e i n i t i a t i o n a n d

d e v e l o p m e n t o f o f f o r e i g n e x c h a n g e r e s o u r c e s o v e r

a p e r i o d o f globalization and Indian textile industry took

time in the country. Financial statements of Indian industries. The companies viz..Siyar amSilkMill s study covered the 17 private, 5 state owned and Ltd.(SSML). Shree Dinesh Mills Ltd. (SDML) 1 central public sector companies. He studied and Wellspun India Ltd. (WIL). This study is analysis of activities, assessment of based mainly on secondary data, the data profitability, return on capital investment, which are published in annual reports of the Analysis of financial structure, Analysis of

textile units. The annual reports have collected

fixed assets and working capital. In this from the head office and the website of the

Vol.2. respective units. The present study is made for six years from 2002-03 to 2007-08. Various publication s of ITA (In di an Te x tile Association) and related journals, progress report, articles, website, magazines, publication of Ministry of Textile and other publication will use for this purpose. Hypothesis for the Study: 1.1. The profitability of all three units is uniform. 2.2. The liquidity position of all three units is satisfactory. 3.3. The capital structure of all three units is uniform. Techniques of Analysis The data which will collect are systematically and scientifically edit, classify, and tabulate keeping in mind the objective and hypothesis of the subject. For the purpose of analysis of data various ratios relating to profitability, liquidity, solvency and assets management is calculated. Moreover, the sample statistical technique such as Standard Deviation, Co-efficient of Variation, average and ANOVA test were also applied to analyze the consistency, otherwise the stability and overall trends in the different financial aspect of the companies. In present study data has been converted into relative measures such as Table No.1 for profitability ratioEfficiency and Profitability Relationship

ratios, percentages rather than the absolute data.

Analysis of ProfitabilityProfitability is the overall measure of the companies with regard to efficient and effective utilization of the resources at their command. It indicates in a nutshell the effectiveness of the decisions taken by the management from time to time. The measurement of profitability of the companies is as under.

Return on Investment (ROI)

The profitability is also known as the Return on the Total Assets (ROI). It can be calculated by using the following formula: ROI = Profit after Tax / Average Capital Employed. It is evident from table-1 that the highest ROI among all units was 8.05 percent in 2008-09, 15.35 percent in 2008-09 and 0.00 percent in 2008-09 for SSML, SDML and WIL respectively. In SSML and SDML the ROI in 2003-04 was 8.61 percent and 10.15 percent respectively, which was lowest ROI among all units under study. The average rate of return was at 10.36 percent in SSML, 15.20 percent in SDML and 11.13 percent in WIL. The Standard Deviation (2.43) and C.V. (23.41) of SSML shows consistency in the ratio as compared to SDML and WIL.

Ratio/ Year Return on Investment Ratio SSM Ltd. SDM Ltd. WI Ltd. Net Profit Ratio SSM Ltd. SDM Ltd. WI Ltd. Total Assets Turnover Ratio SSM Ltd. SDM Ltd. WI Ltd. Return on Net worth Ratio SSM Ltd. SDM Ltd. WI Ltd.

200 304

200 405

200 506

200 607

200 708

200 809

Averag e

S.D .

C.V.

8.61 10.1 5 17.8 4

8.87 12.19 13.44

12.7 0 20.8 3 11.7 9

13.9 9 19.7 9 13.0 6

9.96 12.9 0 10.6 3

8.05 15.3 5 0.00

10.36 15.20 11.13

2.4 3 4.3 0 5.9 8 1.2 0 4.7 4 2.9 3 0.7 9 0.8 7 0.4 5 3.9 4 3.9 8 5.1 7

23.4 1 28.3 2 53.7 2 46.1 3 46.6 4 62.9 8 26.6 2 43.3 9 38.4 0 38.5 7 33.7 6 62.0 0

2.22 3.79 8.36

1.99 6.68 7.43

2.32 12.4 1 5.31

3.04 12.5 1 3.92

1.25 8.63 1.51

4.73 17.0 1 1.39

2.59 10.17 4.65

3.22 3.29 1.75

3.00 2.28 0.93

3.61 2.02 0.74

3.45 1.98 0.91

3.07 1.86 0.94

1.42 0.58 1.72

2.96 2.00 1.16

7.52 6.95 13.6 8

8.21 9.26 12.87

14.4 7 17.2 1 9.10

16.0 0 15.8 3 9.57

6.92 9.95 4.77

8.21 11.4 5 0.00

10.22 11.78 8.33

Efficiency and Profitability Relationship

Return on Net Worth and

lowest among the companies. It can be calculated by using the following formula:RONW = Profit after Tax / Average R etur n on Inv e s t ment Net Worth. The return on net worth in SDML was highest in 2005-06 at 17.21 percent and its ANOVATest Null average return was 11.84 percent, where as the Hypothesis: The profitability of all

average return on net worth of SSML and WIL

three units is uniform. It is evident from the

table-2 that the difference between in was 10.62 percent and 10 percent respectively. Return on Investment of companies was In the year 2007-08 the return of both these insignificant because the calculated value of companies was lower during the study. The lower than that of table value 'F' (1.14) was reason behind on this was lower ROI in these (3.105) at 5% level of significance. Hence years. The ratio of WIL shows a steady return the null hypothesis is accepted. So we can say on net worth entire period under the study that the profitability of all three units is uniform. because it's S.D. (5.17) and C.V.(62) are Table-2 ANOVA Test for Return on Investment RatioSource of Variation

SS

df

MS

F

F crit

Between Groups Within Groups Total

123.055 9 258.858 4 381.914 3

5 12 17

24.611 18 21.571 53

1.1409 1

3.1058 75

1. Analysis of Sales and Assets :

Analysis of Sales

Sales and Assets ratio are components of Profit margin ratio of SSML shows the ROI. Sales can be measured with the help fluctuation trend, the average ratio of SDML of net profit margin; whereas the Assets are was 10.17 percent, which was highest among presented by assets turnover ratio. This ratio all the units of study. The net profit margin of explains per rupee profit generating capacity SSML and WIL was 4.73 percent and 4.65 of the sales. If the cost of goods sold is lower, percent in 2008-09, which was lowest in entire then the profit will be higher and then we study. It shows the sales of these units were divide it with the net sales the result is the high poor. The S.D. of SSML was 1.20, which sales. If lower is the net profit per rupee of indicates consistency in net profit margin. The sales, lower will be the sales. The companies sales ratios have been showing a significant must try for achieving greater sales for feature of higher rates with greater reliability maximizing the ROI. and uniformity in SSML than the SDML and Sales Ratio = Net Profit / Net Sales. WIL during the entire period under the study. This ratio measures the use of the assets. The efficient use of assets will generate greater Analysis of Assets: sales per rupee invested in all the assets of the The analysis of the assets ratios indicates company. The inefficient use of the assets will that in 200708 these were at 3.07, 1.86 and result in low sales volume coupled with higher 0.94 times in SSML, SDML and WIL overhead charges and under utilization of the respectively. The average ratio of SSML was available capacity. Hence, the management 2.96 times, which was highest among all the must strive for using of total resources at units of study. The S.D. (1.20) and C.V. (46.13) optimum level, to achieve higher ROI. Fixed of SSML indicate consistency in total assets Asset turnover Ratio = Net Sales / Average Net turnover than the SDML and WIL during the Fixed Assets entire period under the study.

89Efficiency and Profitability Relationship Efficiency and Profitability Relationship

Impact of sales and assets on ROI companies in meeting their current obligations The analysis revealed that the sale was to maintain sound liquidity and to pinpoint the significantly higher in SDML followed by difficulties if any in it. Using the following two WIL. The assets were more consistent in liquidity ratios makes the analysis of the SSML and SDMl as compared to WIL. Thus, liquidity position: this indicates that the sales were the best in 1. Current Ratio = Current Assets/Current WIL because its S.D. (1.71) was

lower as Current Ratio and ANOVA 3) Null Hypothesis: The liquidity position

Test

compare to SSML and SDML. (TableThe analysis of both current and quick of all three units is satisfactory. It is clear from ratio revels that SSML and WIL were not able table-4 that the difference in between to maintain sound liquidity position. Hence, it companies was significant is because the advice that the companies maintain the calculated value of 'F' (0.33) was higher than

SDML, while assets were maximum in SSML. Liabilities sound liquidity position by reducing the the table value (3.10) at 5% level of However to pinpoint the possible influencing 2. Quick Ratio = Quick Assets/Current burden of excessive current liquidities or by significance. So, null hypothesis is accepted factor, contributing for the fluctuations in ROI, Liabilities increasing the investing in components of and alternative hypothesis is rejected. The we analyze the highest/lowest year of ROI current assets depending upon the requirement difference is not significance with reference to sales and assets ratio we Current Ratio of the companies. observe the following: A close examination of the data pertaining The highest ROI in 2006-07 at 13.99 to the current ratios reveals that these ratios are Table- 4 ANOVA Test of current ratios percent in SSML was influenced by the significantly lower in all the companies as increase in the sales efficiency, while low rate compared to the standard norms of 2:1. The Source of Variation SS df MS F

F crit of ROI in 2003-04 at 8.61 percent in SSML average ratio is at 1.83 in SSML, 2.17 in Between Groups 0.675578 5 0.135116 0.332792 3.105875 was also attributed to low rate of sales rather SDML and 1.27 in WIL. This ratio indicates Within Groups 4.872067 12 0.406006 than the assets. that the Liquidity position of SDML was Total 5.547644 17 In SDML the highest ROI in 2005-06 at sound as compared to SSML and WIL. In 12.41 percent was the reason of higher sales 2004-05 the ratio of WIL was 1.15 indicating efficiency and in WIL ROI was highest in the scarcity of liquidity. Where the ratio of 3.

Analysis of Leverage Position :

0.32 and 1.75 times respectively. The ratio

2003-04 at 17.84 percent was also the reason WIL shows consistency in liquidity position of The leverage ratios explain the extent to indicates that WIL is highly dependent on o f h i g h e r s a l e s . t

h e c o m p a n y b e c a u s e o f i t s S . D . ( 0 . 2 6 ) a n d T h e r

e a s o n f o r l o w e r R O I i n S D M L a n d C . V . ( 2 0 . 5 6 )

a r e l o w e s t a m o n g a l l c o m p a n i e s . W I L w a s t h e l o w e r o

f s a l e s . ( T a b l e 3 ) w h i c h , t h e d e b t i s e m p l o y e d

i n c a p i t a l d e b t . W h i l e S D M L ' s d e b t i s l e s s t h a t i

t s e q u i t y s t r u c t u r e o f t h e c o m p a n i e s . A l w a y s c o

m p a n i e s i n d i c a t e d c o n s e r v a t i v e s a p p r o a c h o f f i n a n c i

a l u s e d e b t f u n d a l o n g w i t h e q u i t y f u n d s , i n o r d e r

m a n a g e m e n t . T h e S S M L r a t i o s h o w s T a b l e a n d

a n a l y s i s i n d i c a t e s t h a t t h e s a l e t o m a x i m i

z e t h e a f t e r t a x p r o f i t s , t h e r e b y m o d e r a t

e a p p r o a c h o f f i n a n c i n g o f Quick Ratio was the major contribution factor for the fluctuation in the rates of ROI in all The quick ratio was of SSML, SDML and the WIL were at , 3.52,1.51, and 3.76 companies. times in 2008-09 respectively as compare to standard optimizing earning

available to equity organization need. (Table-5) shareholders. The basic facility of debt funds is that after tax cost of them will be significantly Interest Coverage Ratio lower, and which can be paid back depending It the ability of the

really measures

2. Analysis of Liquidity

norms of 1:1. It signals that SSML and WIL upon their terms of issue. Further, debt funds companies to service the debt. The ratio of have been had not problem of liquidity. will not dilute the equity holders control SDML was highest among all the companies

Next, it is decided to make an attempt to During the study period average ratio of study the liquidity position of the companies, SDML was higher as compared to SSML and positions. However, the debt funds are used under study. The average ratio of SSML, in

order to highlight the relative strength of the WIL, but the consistency was maintained by very carefully by considering the liquidity and SDML and WIL were 3.36 percent, 7.49 risk factors. The debt will increase the risk of percent and 2.11 percent respectively. In 2005the company. Now, let us analyze the leverage 06 the ratio of SDML was highest between all Table- 3 Liquidity Ratio (Times) position of the companies. For this purpose we the year and all the companies. It indicates have made using the following ratios: sound position of companies to pay the interest Debt Equity Ratio = Long term Debt/Equity to its creditors.

The SDML shows consistency Ratio/ 2003 2004 2005 2006 2007 2008 Time Interest Earned = EBIT in the ratio under the entire the study. (Table-5)

Year 04 05 06 07 08 09

Mean S.D.

C.V. Current Ratio

Debt-Equity Ratio Debt

Equity Ratio and ANOVA

SSM Ltd. 2.1 3.03 1.67 1.31 1.51 1.36 1.83 0.65 35.68 It measures the extent of equity covering Test SDM Ltd. 1.85 1.83 2.42 2.49 2.55 1.85 2.17 0.35 16.39 the debt. It is computed by dividing debt by Null Hypothesis: The capital structure of WI Ltd. 1.35 1.15

1.24 1.66 1.36 0.87 1.27 0.26 20.56 equity. Normally 2:1 debt equity ratio is Quick ratio considered to be standard. The range of debt clear that calculated value of 'F' (0.46) is SSM Ltd. 1.30 1.49 1.75 1.67 1.63 1.23 1.51 0.21 13.89 equity ratio in SDML was 0.13 to 0.36 times higher than the table value (3.11) so, null

all three units is un

in 2003-04 and 2005-06 respectively. Where hypothesis is rejected and alternative SDM Ltd. 1.30 1.49 1.75 1.67 1.63 1.23 1.51 0.21 13.89 WI Ltd. 4.69 1.43 2.78 6.46 3.65 3.54 3.76 1.71 45.47 as the average ratio of SSML and WIL were hypothesis is rejected. The difference is not

Vol.2.Efficiency and Profitability Relationship

Table 5 Leverage Ratios (Times)Ratio/ Year Capital Gearing Ratio SSM Ltd. SDM Ltd. WI Ltd. Debt-Equity Ratio SSM Ltd. SDM Ltd. WI Ltd. Interest Coverage Ratio SSM Ltd. SDM Ltd. WI Ltd. 4.38 5.57 3.5 2.47 7.98 3.57 5.63 9.34 2.17 3.91 8.48 1.78 1.88 6.43 1.27 1.87 7.14 0.39 3.36 7.49 2.11 1.5 3 1.3 8 1.2 5 45.5 7 18.4 8 59.2 5 1.18 0.13 0.94 1.04 0.4 1.65 0.99 0.36 1.55 1.36 0.36 2.6 1.86 0.32 2.78 1.81 0.33 0.98 1.37 0.32 1.75 0.3 8 0.1 0 0.7 9 27.6 9 30.2 0 44.8 7 200 304 200 405 200 506 200 607 200 708 200 809 Mea n S. D. C.V .

0.7 0.15 0.87

0.72 0.27 0.72

0.65 0.38 0.65

0.57 0.36 0.76

0.77 0.33 1.04

0.98 0.33 0.98

0.73 0.30 0.84

0.1 4 0.0 8 0.1 5

19.0 4 27.6 3 18.3 1

due to a uniform debt equity proportion of companies. (Table-6) Table 6 ANOVA Test of Debt Equity Ratio Source of Variation Between Groups Within Groups Total SS 1.67 8.80 10.48 df 5.00 12.00 17.00 MS 0.33 0.73 F 0.46 F crit 3.11

4. Analysis of

analysis we will be covering the following These ratios are also called as turnover ratios: ratios. These will indicate position of the assets usage. In order to compute these ratios sales Inventory Turnover Ratio are divided by various types of assets such as Table 7 indicates that inventory turnover inventory, debtors and net fixed assets. The was 6.29, 2.88 and 9.81 times in SSML,

Activity Ratio :

ratios are expressed in number of times. The SDML and WIL respectively in 2007-08. This greater the ratio more will be of assets usage. went to explain that rupee invested in

The lower ratio will reflect the under inventory was able to generate 3 to 6 times of utilization of the resources available at the sales in the companies. The ratio indicates command of the companies. Always the there was much distinctive difference in the companies must plan for efficient use of the inventory turnover, but with regards to the assets to increase the overall efficiency. In this stability of the ratio, it was more uniform in SDML.Efficiency and Profitability Relationship

Table 7 Activity Ratios (Times)

Ratio/ Year Inventory Turnover Ratio SSM Ltd. SDM Ltd. WI Ltd. Debtors Turnover Ratio SSM Ltd. SDM Ltd. WI Ltd. Fixed Assets Turnover Ratio SSM Ltd. SDM Ltd. WI Ltd.

200 304

200 405

200 506

200 607

200 708

200 809

Me an

S. D.

C.V .

5.1 1 2.6 6 8.8 5

5.3 3 2.7 9 9.6 1

6.5 4 3.0 7 9.7 4

7.0 8 3.1 3 9.5 7

6.4 1 3.1 5 9.4 0

6.29 2.88 9.81

6.1 3 2.9 5 9.5 0

0.7 6 0.2 0 0.3 5

12. 33 6.8 1 3.6 6

4.1 1 11. 07 18. 72

4.9 3 10. 12 18. 8

5.3 8 10. 67 16. 05

4.6 2 10. 97 16. 08

4.5 3 11. 19 14. 09

5.26 10.8 3 14.4 4

4.8 1 10. 81 16. 36

0.3 3 0.4 9 2.7

7.1 6 4.5 1 18. 57

1.8 6 0.6 5 1.1 4

1.8 1 0.6 1.1 2

2.2 4 0.6 3 1.0 6

2.3 8 0.6 4 1

2.1 8 0.6 3 1.0 1

2.06 0.61 1.11

2.0 9 0.6 3 1.0 7

0.2 2 0.0 2 0.0 6

10. 64 2.9 7 5.5 2

Debtors Turnover Ratio and 17.84 percent in 2003-04 for SSML, In WIL highest debtor's turnover was of SDML and WIL respectively. In SSML and 18.8 times in 2004-05, while it was lowest SDML the ROI in 2003-04 was 8.61 percent 1.14.44 times in 2008-09. The trend of ratio and 10.15 percent respectively, which was shows fluctuating with an average ratio of lowest ROI among all units under study. 2.16.36 times. AS compared to WIL the ratio of In year 2007-08 the return on net worth of SSML and SDML was lower in 2004-05 to both these companies was lower during the 2007-08. The average ratio of SSML and study. The reason behind on this was lower SDML was 4.81 times and 10.81 times ROI in these years. The ratio of WIL shows a respectively. The SSML ratio was more stable steady return on net worth entire period under as compared to SDML and WIL. The ratio of the study because it's S.D. (5.17) and C.V. WIL indicates effective management of (62.00) is lowest among the companies.

debtors.(Table-7) F test suggest that there is uniformity in return on investment of all companies. Net Fixed Assets Turnover Ratio The sales ratio has been showing a It is evident from the Table-7 that the fixed significant feature of higher rates with greater assets turnover ratio of SSML was higher reliability and uniformity in SSML than the among all companies. The average turnover SDML and WIL during the entire period under was at 2.09,0.02 and0.06 times in SSML, the study. The S.D. of SSML was 1.20, which SDML and WIL respectively. The S.D.(0.22) indicates consistency in net profit margin. and C.V. (10.64) of SSML shows consistency in The average ratio of SSML was 2.59 times, the ratio as compared to SDML and WIL. which was highest among all the units of study. The S.D.(1.20) and C.V. (46.13) of SSML Summary of Finding and indicates consistency in total assets turnover than the SDML and WIL during the entire

Suggestions

Highest ROI among all units was period 13.99 under the study. percent in 2006-07, 20.83 percent in The 2005-06 study of impact of sales and assets on

ISSN : 0976-4712 13Efficiency and Profitability Relationship

Segment Reporting Practices: A Study Based on Indiancontributing factor more than assets for the reveals that SDML has no any gearing while variation in the rates of ROI of the companies. gearing in WIL is higher. In WIL debt equity

Banking Industry

It is suggested that the management of SSML ratio is higher and in SDML it is lower. The has to pursue the policy of maximizing assets; SDML are not using high debt even though its

Satyajit Ghorai

Lecturer, Bangabasi Evening College. Kolkata, West Bengal maximizing the sales by generating maximum taking the benefits of trading on equity. profit by introducing cost minimization and The result of F test indicates that the cost techniques. uniform proportion of debt and equity in the The liquidity position of WIL was quite companies under study. alarming since they are facing chronic In activity analysis inventory turnover of liquidity problems. While SSML liquidity SSML and SDML are satisfactory while in The segment reporting practices in the banking industry in India is examined in the light of the accounting standard (AS 17). Still there is a gap between the standard and the real practices. As a result, usefulness of the financial statements is losses over time. Therefore, to minimize the gap and to improve the quality of segment reporting certain suggestions are also provided. position also not quite good. Therefore, it is WIL it is poor. The debtor's turnover of WIL is suggested that the companies improve the very high but its fixed assets turnover is low. liquidity position wither by reducing The debtors and fixed assets turnover of SSML Introduction reporting practices of banking industry in excessive burden of current liabilities or and WIL should improve for generating higher In the age of convergence, IASB issued India, we have selected 10 public nationalized increasing the level of current assets profits. several IFRS on some relevant field. IFRS 8 banks which are playing predominant role in

'Operating Segment' is one of the important the banking sector and their financial s

tandards issued for reporting financial statements are relating to the financial year information segmentwise. In this backdrop, 2006-07, 2007-08 and 2008-

References09. Therefore,

! Annual Reports of Respective Companies.

almost all countries

of the world are going to our specific objectives are as follows accept Bhayani, S.J. (2004). Practical Financial Statements, Raj Book Enterprise, Jaipur. the international standard IFRS. India What is the basis for determination of ! Clay, M. agreed to J. and Walley, B. H. (1965), Performance and Profitabilit, London, Longmans. converge with IFRS from 2010-11. primary segments and number of primary

!

As the IFRS is more strengthen and more segment disclosed?

!

Dutta S.K.(1992), Indian Tea Industry : An Appraisal, Management accountant, developed results into the quality of financial Has application of the guideline Calcutta on ! Fraenkel, J.R. and Wallen, N.E. (1990), How to design and evaluate research in statements are improved over time. There is a compliance of AS 17 resulted in the

positive relationship between price of reporting of a greater number of reportable ! Frank securities of the entities and its Pajares. The Elements of a Proposal. Emory University. quality of segments (i.e. primary or secondary)? ! Gupta R.L & Radhaswami, M (1980), financial statements. In other way it can Financial Statement Analysis, SC & Sons, Delhi, be Is there any consistency among the banks pp 40 stated that the negative relationship is also for the determination of segments?

! ! ! ! ! !

Gupta Santosh. Research Methodology Methods and Statistical Techniques Gupta, B.N., Statistics (Theory and Practice). Hiram, S. Davis, (1955), Productivity Accounting .op. cit. p.13 Khan & Jain (1987), Management Accounting, Tata McGraw Hill, New Delhi. Kothari C.R. (2007), Research Methodology Methods and Techniques Krishna Pennathur(1985), Trade Union and Productivity, The Economic Times, July pp.5 ! Locke, L.F., Spirduco, W.W., & Silverman, S.J. (1987), Proposal that work: A guide for p l a n n i n g

d i s s e r t a t i o n s a n d g r a n t p r o p o s a l s , I I E d i t i o n , N e w b u r y

P a r k , C A : S a g e .

!P a n d e y I . M ( 1 9 9 5 ) , F i n a n c i a l M a n a g e

m e n t , V i k a s p u b l i s h i n g H o u s e , N e w D e l h i

!P a r m a r , S . J

( 1 9 9 1 ) , F i n a n c i a l M o d e r n M e t h o d s , T o o l s & t e c h n i q u e s ,

R a j B o o k seen between cost of capital and quality of What specific items banks disclosed for disclosers in the financial statements. So with their primary segments? a view to achieving the modern business The size of the primary segments in term philosophy that is maximization of wealth, of revenues, result and assets. every entity should try to improve its quality of To judge the necessity of preparing financial statements by adopting the quarterly segment report along with the

international accounting standard IFRS. In yearly segment report. this conjunction it may be found that some What is the basis for determination of entities belonging to India are adopting the secondary segments and number of IFRS for the preparation of their financial secondary segments?

statements before 2010-11 or it may be happen that they are positively prepared for What are the major items disclosed for adopting

, NJ: the IFRS from the next financial year. In this each secondary segments?

prominent development phase it is necessary On what basis the joint cost, joint assets, to study the recent financial reporting and joint liabilities are distributed among practices followed by the Indian entities. But the segments? due to the cost and time constraint we are only Whether any bank is disclosing any interested to

study the segment reporting segment wise information voluntarily; practices of the banking industry of India. To what are those? examine the current status of segment Vol.2.

15Segment Reporting Practices Segment Reporting Practices

Source: Computed from published Annual primary segments have less than 10% Assets

Reports of the banks. of the total Assets of the enterprises. The s The above table demonstrates that out of remaining 16 segments (belong to Indian 96 primary segments of sample banks 79 Bank, Andhra Bank and Allahabad bank) have segments earn above 10% revenue of the total not disclosed their respective assets. revenue of the enterprises and the remaining The table demonstrates that out of 96 17 primary segments earn less than 10% of the primary segments of sample banks 78 total revenue of the enterprises. segments have contributed more than 10% Banks / Years Allahabad Bank Andhra Bank Bank of Baroda Bank of India Canara Bank Dena Bank Indian Bank Indian Overseas Bank Punjab National Bank Vijaya Bank 2006-07 Types B B B B B B B B B B Nos. 2 2 2 2 2 2 2 2 2 2 2007-08 Types B B B B B B B B B B Nos. 4 4 4 3 3 4 4 4 4 4 2008-09 Types B B B B B B B B B B Nos. 4 4 4 3 3 4 4 4 4 4

The above table demonstrates that out of Profit towards the overall result of the Bank 96 primary segments of sample banks 67 and the

remaining 18 primary segments have segments have more than 10% Assets of the contributed less than 10% Profit towards the total Assets of the enterprises and the 13 overall result of the Bank.3. Items of Disclosure made by reported Primary Segments Table-4 Disclosure Made by Primary Segments of Sample Banks

S o u r c e : C o m p u t e d f r o m p u b l i s h e d A n n u a l T h e a b o v e t a

b l e s h o w s t h a t 1 6 o u t o f 3 0 R e p o r t s o f t h e b a n k s . A n n u a l R

e p o r t s h a v e d i s c l o s e d 4 b u s i n e s s N o t e : B B u s i n e s s S e g m e n

t . s e g m e n t s a s t h e i r p r i m a r y s e g m e n t s . I n t e r m o f The above table indicates that all the percentage, this indicates that 53% of the sample banks disclosed segment wise data for sample Annual Reports has reported 4 the selected financial periods as they have business segments as their primary segments. segmented their business into more than one segment. All the banks have chosen the 2. Size of the Primary Segments business segment as their primary Segment. Table-3 Frequency distribution of the The number of primary segments disclosed by contribution of reported primary segments the sample banks is 2 for the accounting period towards the total revenue of the banks , 2006-07 and 3 or 4 for the

accounting periods assets of the banks and Profit or Loss 2007-08 and 2008-09. Table-2 Frequency distribution of number of Primary SegmentsBanks Accounti ng Periods Brief Descripti on of segment s N N N N N N N N N Y Y Y Y N N N N N N N N Reve nue Ass ets Lia bilitie s Y Y N Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N Capit al Expe nses N N N N N N N N N N N N N N N N N N N N N Non Cash Expen ses N N N N N N N N N N N N N N N N N N N N N Basis of Trans fer Pricin g N N N N N N N N N Y Y Y Y N N N N N N N N

Allahab ad Bank Andhra Bank Bank of Baroda Bank of India Canara Bank Dena Bank Indian Bank

2006-07 2007-08 2008-09 2006-07 2007-08 2008-09 2006-07 2007-08 2008-09 2006-07 2007-08 2008-09 2006-07 2007-08 2008-09 2006-07 2007-08 2008-09 2006-07 2007-08 2008-09

Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y

Y Y N Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N

Number of Primary Segment 1 2 3 4 More than 4 Total

Number of Annual Report nil 10 4 16 nil 30

Number of Primary Segments

Percentag e of the

Gross Reven

Gros s Asse

Profit or

revenue Above 60 50-60 40-50 30-40 20-30 10-20 Below 10 Not Disclosed Total

ue 10 Nil 7 23 37 2 17 96

ts 8 2 8 25 21 3 13 16 96

Loss 15 1 7 18 15 22 18 96

Source: Computed from published Annual Reports of the banks.16 17Segment Reporting Practices Segment Reporting Practices

Indian Overse ase Bank Punjab Nationa l Bank Vijaya Bank

2006-07 2007-08 2008-09 2006-07 2007-08 2008-09 2006-07 2007-08 2008-09

N N N N N N N N N

Y Y Y Y Y Y Y Y Y

Y Y Y Y Y Y Y Y Y

Y Y Y Y Y Y Y Y Y

N N N N N N N N N

N N N N N N N N N

N N N N N N N N N

Note: G Geographic Segment. N.ANot Applicable. The above table indicates that 6 out 10 sample banks disclosed Secondary Segments but remaining 4 banks have not disclosed the Secondary Segments. In term of percentage, 60% of the samples Banks have reported their Secondary Segments and remaining 40% has not reported their Secondary Segments. Those sample banks disclosed Secondary Segment they have chosen Geographic Segment as their Secondary Segment. The number of Secondary segment disclosed by all theSource: Computed from published Annual Reports of the banks. reported sample banks is 2 over the period of Note: YYes. study. N No.

The above table provides major disclosure disclosed their net capital employed segment-Table -6: Frequency distribution of the made by the reported Primary Segments of the wise. No sample banks disclosed their capital contribution of reported secondary segments Sample Banks. Only Bank of India disclosed expenses and noncash expenses for their towards the total revenue of the banks and brief description about the Reported Primary reported Primary Segments. Most of the total assets of all Geographical Segments segments, but no other sample Banks provide sample banks not disclosed the basis of the banks primary segments have less than 10% Assets of the total Assets of all the Geographical Segments. 6. Items of Disclosure made by reported Secondary Segments Table-7 Disclosure made by Secondary Segments of Sample Banks

Source: Computed from published Annual Reports of the banks. Note: YYes. N No. N.ANot applicable. T h e above ta b le pr o v ide s major disclosures made by the Sample Banks for their reported Secondary Segments. None of the sample Banks disclosed the brief description about their Reported Secondary segments. All Secondary Segment Reported sample banks disclosed their Revenue and Assets segment-wise only but not capitalNumber of Secondary Segments

Percentag e of the revenue Above 60 50-60 40-50 30-40 20-30 10-20 Below 10 Not Disclosed Total

Total Revenu e 18 Nil Nil Nil Nil 6 12 36

Total Assets of all Geographical Segments 18 Nil Nil Nil 3 3 12 36

expenses. their Revenue segment-wise. Most of the this information but it can not disclosed the sample banks provide segmental assets and inter segment revenue. Although the basis of this information. All sample banks disclosed transfer pricing. Only bank of India provides

Major Findingliabilities except the Allahabad bank for 2008-segment pricing is disclosed, it is not used to

!09, Andhra Bank for 2007-08, and Indian prepare the Segment Report. inancial statements segment wise along Bank for 2007-08 & 2008-09.But those banks f

All nationalized ba

with the aggrega are various basis fo 4. Nature and number of the secondary segments

segments of an ent Table-5 Disclosure of Secondary segments

differences in risk organization struct banks for identifica disclosed any wher

Banks / Years Allahabad Bank Andhra Bank Bank of Baroda Bank of India Canara Bank Dena Bank Indian Bank Indian Oversease Bank Punjab National Bank Vijaya Bank

2006-07 Types G N.A G G G N.A G G N.A N.A Nos. 2 N.A 2 2 2 N.A 2 2 N.A N.A

2007-08 Types G N.A G G G N.A G G N.A N.A Nos. 2 N.A 2 2 2 N.A 2 2 N.A N.A

2008-09 Types G N.A G G G N.A G G N.A N.A Nos. 2 N.A 2 2 2 N.A 2 2 N.A N.A

!

Each and every sample bank disclosed four primary segments except Bank of India and Canara Bank. Some of the reported primary segments did not fulfill The above table demonstrates that out of 10% criteria even though the summation 36 reported Secondary Segments of sample of revenues of all other segments was more banks 24 Segments earn above 10% revenue than 75%. of the total revenue of the enterprises and the

! From the Accounting period

2007-08 most

remaining 12 Secondary Segments earn less of the sample banks

disclosed four primary than 10% of the total Revenue of the segments and they are all enterprises. segment. That may indicates that the business The above table demonstrates that out of guidelines issued by RBI have a positive 36 Secondary Segments of sample banks 24 effect on the number of segment disclosed Segments have more than 10% Assets of the by banks. Source: Computed from published Annual Reports of the banks. enterprises and the 12 total Assets of the

! The number of segment disclosed by the19

Segment Reporting Practices

Segment Reporting Practices

the comparability of the automatically enhanced. Banks Accounti ng Periods 2006-07 Brief Descript ion of Segmen ts N Revenue Assets

financial Capital Expense s N

statement

is

Allahabad Bank

Y

Y

2007-08 2008-09 Andhra Bank 2006-07 2007-08 2008-09 Bank of Baroda 2006-07 2007-08 2008-09 Bank of India 2006-07 2007-08 Canara Bank 2008-09 2006-07 2007-08 2008-09 Dena Bank 2006-07 2007-08 2008-09 Indian Bank 2006-07 2007-08 2008-09 Indian Oversease Bank 2006-07 2007-08 2008-09 Punjab National Bank 2006-07 2007-08 2008-09 Vijaya Bank 2006-07 2007-08 2008-09

N N N.A N.A N.A N N N N N N N N N N.A N.A N.A N N N N N N N.A N.A N.A N.A N.A N.A

Y Y N.A N.A N.A Y Y Y Y Y Y Y Y Y N.A N.A N.A Y Y Y Y Y Y N.A N.A N.A N.A N.A N.A

Y Y N.A N.A N.A Y Y Y Y Y Y Y Y Y N.A N.A N.A Y Y Y Y Y Y N.A N.A N.A N.A N.A N.A

N N N.A N.A N.A N N N N N N N N N N.A N.A N.A N N N N N N N.A N.A N.A N.A N.A N.A

!

Some banks provides the segment reporting policy in their Directors' report part of their Annual Report, most of the cases it is same as it is used to prepare the aggregated accounts. ! It is the duty of auditors to ensure that the Accounting Standards are implemented in the presentation of financial statements covered by their audit reports. Thus, the auditor is clearly responsible with respect to compliance of the accounting standards in discharging his/her duties, but it has been observed that in the audit report auditors remained silence about the compliance of accounting standard for preparation of segment report. ! It is important to highlight that all sample banks disaggregated their operations and disclosed the segment information se gm e n t w is e , b u t s o me o f t h em aggregated the information relating to a particular segment. As for example, some banks have not disclosed the assets and liabilities segment-wise. Results into the user of financial statement are not getting their desire information (i.e. disaggregated information); as they can not find out how much assets and liabilities actually hold by the reported segments. It may indicate that the banks have a tendency to not disclose their financial information in disaggregate form.

!

!

One problem relates to segment reporting is assets distribution among various reported segments due to the existence of various methods of distribution. Some eminent research scholars found it and suggest to disclose the basis of assets distribution in the financial statement, but no sample banks disclose this information. No sample banks disclose the transfer pricing method except Bank of India. Although it can not used this method in practical as it not disclosed the inter segment revenue. banks is the same as recommended in the banks are very much dependent on these ! No sample banks disclosed about the segmented non-cash expenses and capital

ts, expenses, although this information is require by statue. All sample banks remain silent about any other disclosures which are not mandatory that is voluntary disclosure. From the findings it is very much clear that

!

Suggestions

there is a gap betw and accounting pra desirable to us. So as

! ! ! ! !

! ! !

to improve the q reporting, we provid which are given bel All entities have to disclose a brief description about the reported segments such that users of financial statement easily understand about the reported segments. Entities should disclose the basis upon which they identify their reported segments. The segmental reporting system should be supported by guidelines for allocation of joint costs to reporting segments and transfer pricing policy. Entities should also disclose the basis upon which they distribute total assets among their reported segments. A contribution format can be used instead of disclosing about the assets distribution basis because it separates fixed costs from variable costs and it enables the calculation of a contribution margin. In this case, traceable fixed costs should be separated from common fixed costs to enable the calculation of a segment margin. Entities should have to disclose non-cash expenses and capital expenditure for all reported primary segments as those are required by the statue. Auditor should repot about the compliance of accounting standard for preparation of segment report. Disclosures about secondary segments are not sufficient to meet the needs of users. Most of sample banks disclosed their geographical segment as a secondary segment by segregating two segments; domestic and international, this notSegment Reporting Practices

segments, segment-wise research and development cost, and certain forward looking information such that they can easily access the new and biggest capital market all over the world at very low cost(lower cost of capital) by increasing i n v e s t o r c o n f i d e n c e i n c o m p a n y management.

ISSN : 0976-4712

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A Role of Stimulation for Selection of Health Insurance (with Special Reference to Thanjavur District)V. PothigaimalaiAssistant Professor, Sengamala Mannargudi, Tamil Nadu Thaayar Educational Trust Women's College,

K. BharathipriyaAssistant Professor, Sengamala Mannargudi, Tamil Nadu Thaayar Educational Trust Women's College,

The most important necessities that families and individuals all over the world prioritize above all is health and wellness. Despite caution, it is impossible for an individual to avoid danger. Accidents and sickness has become part of life. the impact of an occurrence of an accident/sickness/illness/disease does not give only physical pain but economic loss too. Now a days admission in a hospital and getting treatment is a costly affair, meeting hospital expenses is beyond their capacity for many of the individuals. Health insurance scheme provides adequate comfort level to face such contingency boldly. Health insurance provides adequate comfort level to face such contingency boldly. Health insurance provides risk coverage against unforeseen health expenditure that may result in financial hardship. As there is no major social security support in India, the need for health insurance is a subject of prime importance. Only 10% of the Indian population has health insurance which means there is tremendous scope for growth in this area. Health insurance is one of the fastest growing areas in insurance industry and is expected to grow at Rs 30,000 corers in 5 years. During 2008-09 health insurance premium was Rs 6600 crores, and it has increased to Rs. 8100 crores during 2009-10 recording a growth rate of 25%. So this study mainly focus on stimulation among health insurance. rational enough. So the processes of identification of secondary segment and disclosers have to be improved such a manner so that reported segments are differ from each other due to their different rate of risk and return.

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Entitles have to disclose certain voluntary information like segment-wise cash flow statement, human recourses of reported

References ! Backer, M. and ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

McFarland, B.W., (1968) External Report for Segment of a Business, New York: National association of Accountants. Balakrishna, R., Harris, T.S. and Sen, P. K., (1990) The Predictive Ability of Geographic Segment Disclosure, Accounting Review, Autumn. Banerjee, B., (1999) Regulation of Corporate Reporting in India: perception of users A case study, Indian Journal of Accounting, December. Banerjee, B., (2001) Accounting Standard Setting in India: an Evaluation, Corporate Financial Reporting, DSA in Commerce, Calcutta University. Banerjee, B., (2001) Corporate Financial Reporting Practices in India, Indian Journal of Accounting, December. Basu, A.K., (2008), Accounting Standards and the Standard Regime in India, India Accounting Association Research Foundation. Berger, G. Philip and Hann, N. Rebecca, (2007) Segment Profitability and the Proprietary and Agency Costs of Disclosure, The Accounting Review, Vol. 82, No. 4, pp.869-906. Biddle, G. C. and Choi, J. H., (2002) Is Comprehensive Income Irrelevant?, Working Paper, Hong Kong, University of Science & Technology. Chandra, Gyan, (2002) Voluntary Disclosures and Corporate Financial Reporting, Indian Accounting Review. Choi, F. D. S., (2003) International Accounting and Finance Handbook, John Wiley & Sons, New York. D'Souza, Dolply, (2007) Indian Accounting Standard & GAAP: Interpretation, Issues and Practical Application, Snow White Publication Pvt. Ltd., Mumbai. Pp. 540-617. Ghosh, T. P., (2009), Understanding IFRSs, Taxmann Publications (p.) Ltd., New Delhi. Hunton, E. James, Libby, R., Mazza, L. Cheri, (2006) Financial Reporting Transparency and Earning Management, The Accounting Review, Vol.81, No. 1, Pp. 135-157. Institute of Chartered Accountant of India, (1979) Preface to the Statement of Accounting Standards. Institute of Chartered Accountants of India, (2000) AS 17: Segment Reporting. Mallick, A. and Rakshit, D., (2005) Transfer pricing: View in the Context of Segment Reporting, The Management Accountant, July. Nobes, C. and Parker, R., (2000), Comparative International Accounting, Prentice Hall. Porwal, L. S., (2001), Accounting Theory: an Introduction, Tata Mc Grawhill Publishing Company limited, New Delhi. th Rawat, D. S., (2006) Accounting Standards, 9 edition, Taxmann Allied Services (P.) Ltd., New Delhi, Pp. 236-256. Sen, S., (2001) Segment Reporting: An Overview, Corporate Financial Reporting, DSA in Commerce, Calcutta University. Sen, S., (2005), Segment Reporting In India, Jyotsna Publishing House, Kolkata.

Introduction

In short, health insurance in a narrow sense would be an individual or group purchasing health care coverage in advance by paying a fee called premium. In its broader sense, it would be any arrangement that helps to defer, delay, reduce or

altogether avoid payment for health care incurred by individuals and households, Health insurance sector is a sector with a lot of potential. However, of India's total population in urban and rural sector, less than 10 per cent are insured. Lack of awareness about various schemes has been one of the major challenged in spreading rural health insurance. The other challenges are selecting an appropriate distribution channel to meet the needs of the widely dispersed population and trying up financial support for premium funding in the economically weaker sections. In this scenario, a study on health insurance becomes inevitable. I.C Tiwari (1992) has examined the strengthening of health delivery system. His study focuses on the notable progress made in the field of health care since independence as well as various problems faced by the country such as continuance of the communicable diseases, prevalence of malnutrition, shortage of nursing personnel and increase in the non- communicable diseases.

Health Insurance OverviewHealth insurance like other form of insurance is a form of collectivism by means of which people collectively pool their risk in this case the risk of incurring medical expenses. A health insurance policy is a contract between an insurance company and an individual or his sponsor the contract can be renewable annually or monthly. Need for Health Insurance Increasing urbanization. Data Analysis and Interpretation Environmental pollution is causing Table-1- Age and Gender of the respondents serious health problems. Statement

of the Problem F a s t s p r e a d i n g A I D S , S w i n e F

l u , T B , H i g h f i n a n c i a l b u r d e n o n t h e p o o r a n d C a n c e

r , D i a b e t e s , p o i s o n o u s g a s e s , i n c r e a s i n g l e v e l o f

n e w d i s e a s e t o m o t i v a t e f o r v a r i o u s w a s t e s i n c l

u d i n g n u c l e a r w a s t e t a k e n h e a l t h i n s u r a n c e p o l i c

y . w h e n i t s t r i k e s g e n e r a t e d b y t h e p e o p l e a

r e s e r i o u s l y a n d i n d e v e l o p i n g c o u n t r i e s f e w f a m

i l i e s endangering the life on earth. U s e o f p e s t i c i d e s , a n d i n t r o d u c

t i o n o f n e w h e a l t h c a r e b u d g e t s t o h a n d l e i t a s

a r e s u l t h y b r i d v a r i e t i e s , r e d u c e s t h e i m m u

n i t y a n d m a n y r e s o r t t o i n e f f e c t i v e t r e a t m e n t o p t i o

n s a f f e c t s t h e h e a l t h o f t h e h u m a n s . i n c l u d i n g

f a i l i n g t o f o l l o w t h e f u l l p r e s c r i p t i o n

S.N o 1. 2. 3. 4.

A person may face serious monetary course self medication with purchase of drugs Source: primary data problems of the medical treatment and from local pharmacies. Using inappropriate The table shows that 31% of the respondents belong to the age group of 2535, 28%of the hospitalization's during life. traditional medicines or ignoring the illness in respondent belong to the age group of upto 25, 22% of above 50 and 19% of the respondents Despite caution, it is impossible for and the hope that it will go away on its own these belong to the age group of 35-45. The table reveals that 58% of the respondents are male and 32%

w the disease to of the respondents are female.

Table-2 Family/Marital Status of the Respondents A d m i s s i o n s i n h o s p i t a

l s a r e a c o s t l y a f f a i r i n c r e a s e t h e c o s t o

f t r e a t m e n t i n t h e l o n g r u n w h i c h p o s e s p r

o b l e m f o r m a n y o f t h e p r o g r e s s p o o r c o p i

n g m e c h a n i s m s h e n c e l e a d individuals. to lost productivity increased .This is the second largest contributor

Facts about Health Insurance

Objectives of the Study

general insurance premiums after mo 1. To understand th socio economicS.N o 1. 2. Marital status Married Unmarri ed Total No of respond ents 90 40 120 Percentage 75 25 100 Nature family Nuclea r Joint Total of No of respond ents 100 20 120 Percent age 83 17 100

Source : primary da

insurance.

background of the respondents

Fastest growing segment in non-life 2. To find out the stimulating factor The table shows that 75% of the respondents are married and 25% of the respondents are Sector 5 year growth rate of 37% governing selection of health insurance unmarried. The 3. To study the need for health insurance Annual growth rate 25% family type showed that 83 %of the family is nuclear and remaining 17 % were in 4. To know the awareness level of system. joint family

Health insurance comprised 20% of the market in FY. 09 and is expected to be 26% respondents about the health insurance Table-3 Educational Qualification and Annual Income of the Respondents of the market in FY10' Annual premiums in FY 09 of $ 1.4 billion expected to increase to $6.2 billion by FY15. Private insurers are more aggressive in this segment.

Growth Drivers for the Health Insurance Industry Increasing awareness about health insurance. Rising health care costs that have increased the need. Introduction of government schemes like Arogyasree, RSBY. Detariffing of general insurance industry. Higher disposable income and savings.

Research Methodology

The study is conducted in Thanjavur city a non probability sampling procedure namely convenience sampling method was used to select sample respondent for the study the sample size consists of 120 respondent who have health insurance policy for the purpose of the study the needed information is collection from primary and secondary sources. The primary data were collected through interview Source: primary datas c h e d u l e fr o m t h e s e l e c t e d s a m pl e respondents. the secondary data were The table reveals that 49% of the respondents are graduate 24% of the respondents are school collected from published record of insurance level, 15% of the respondents are post graduate and 12% of the respondents are technical

S.N o 1. 2. 3. 4.

Qualificatio n School level Graduate Post Graduate Technical education Total

No of respond ent 29 59 18 14 120

Percentage 24 49 15 12 100

A i