Beruflich Dokumente
Kultur Dokumente
PROJECT REPORT
ON
UNDER GUIDANCE
MR. RITESH AGARWAL
Head, Department of M.B.A
KHANDELWAL COLLEGE OF MANAGEMENT SCIENCE
&TECHNOLOGY,BAREILLY
SUBMITTED BY
ANKIT AGARWAL
ROLL NO.081427006
1
PREFACE
This report tries to outline idea of professional world and helps in understanding the pragmatic
aspect of management function. Own observations are significant towards the contribution in
learning the subject. The report is therefore designed as a reference of organization functioning
rather than copy down instrument.
THE PURPOSE OF PROJECT IS TO MAKE ME FAMILIAR WITH DAY TO DAY
FUNCTIONING OF BUSINESS. THE PRESENT REPORT IS AN EFFORT IN THIS
DIRECTION.
My humble endeavor and motive in presenting the project report is to impart a balanced
introduction and knowledge of Financial Analysis, which is an important integral part of
financial management.
It is hoped that this project will serve as supportive document to research worker as efforts has
been tired to make this report an informative, stimulating, and self-explanatory.
ACKNOWLEDGMENT
Nothing concrete can be achieved without an optimal combination inspiration and perspiration.
No work can be accompanied without taken the guidance of experts. It is only critics from
ingenious that help transform a product into a quality product.
For this, I am grateful to Mr. RITESH AGARWAL for his constant encouragement and
invaluable critical suggestions given during the review meetings. His timely advice and help
proved his commitment and welfare of his students and the institute as a whole.
Last but not the least, our sincere thanks to all the members who were a vital thrust to our
thoughts and needs throughout the functions assigned to group to get done and prove our best.
Finally thanks to others at KCMT, who put in numerous hours to make the intangible tangible
ANKIT AGARWAL
CONTENT
Certificate
Preface
Acknowledgement
Objective
Introduction
Company Profile
12
Research Methodology
37
Financial Statements
39-41
Data Representation
49
Conclusion
56
Finding
57
Limitation
58
Bibliography
59
OBJECTIVE
The main objective of this project is to understand the financial position of AVIVA
LIFE INSURENCE and to know the impact of profitability on its market value. These
are the primary and secondary objective if my project.
With the help of this project I can understand that how I can analyses the financial
statement of any company and what are the ratios any key indicators by which anyone
can understand the financial status of company.
To demonstrate our commitment to "One Aviva, twice the value" we are aiming to
double earnings per share by 2012.
This ambition is based on total IFRS return, including investment volatility and nonoperating items over the weighted average number of shares.
COMPANY PROFILE
Aviva insurance group in UK with a history dating back to 1696, today stands as one
of the leading provider of life and pension products to Europe and other parts of the
world. The history of Aviva Life Insurance India starts at 1834 during nationalization
when Aviva was the largest foreign insurance group in terms of the compensation paid
by the Indian Government. In 1995 Aviva was the first foreign insurance company to
start its representative office in India. At present in Aviva Life Insurance
India, the Aviva group is a 26% share holder and the Dabur group holds 74% shares in
the joint venture.
The products of Aviva insurance group of India are:
LifeLong
Young Achiever
PensionPlus
LifeShield
Freedom LifePlan
LifeBond5
The fund management operations of Aviva Life Insurance India are controlled from
Mumbai and the fund options includes Unitized With-Profits Fund and four Unit
Linked funds:
Protector Fund - The fund comprises of debt securities in the range of 60-100%,
equities in the range of 0-20% and money market and cash in the range of 0-20%.
Secure Fund - The fund comprises of debt securities in the range of 50-100%,
equities in the range of 0-20% and money market and cash in the range of 0-20%.
Balanced Fund - The fund comprises of debt securities in the range of 50-90%,
equities in the range of 0-45% and money market and cash in the range of 0-10%.
Growth Fund - The fund will comprise of debt securities in the range of 0-50%,
equities in the range of 0-85% and money market and cash in the range of 0-20%.
These funds provide investment security to the capital of the customers.
Through their association with Basix (a micro financial institution) and other
NGOs, Aviva Life Insurance India have been able to reach out to those
underprivileged
who
had
no
access
to
insurances
till
day.
In Aviva Life Insurance India, thus, by combining protection and long term savings
the customers can safeguard and provide life products for their family with their
changing needs. Aviva is the worlds fifth-largest insurance group and the largest
insurance services provider in the UK.
We are one of the leading providers of life and pension products in Europe and are
actively growing our long-term savings businesses in Asia Pacific and the USA. Its main
activities are long-term savings, fund management and general insurance.
INTRODUCTION
AN INTRODUCTION TO INSURANCE SECTOR IN INDIA
Insurance in India started without any regulation in the Nineteenth Century. It
was a typical story of a colonial era: a few British insurance companies dominating the
market serving mostly large urban centres. After the independence, it took a dramatic
turn. Insurance was nationalized. First, the life insurance companies were nationalized in
1956, and then the general insurance business was nationalized in 1972. Only in 1999
private insurance companies have been allowed back into the business of insurance with
a maximum of 26% of foreign holding. In what follows, we describe how and why of
regulation and deregulation. The entry of the State Bank of India with its proposal of
bank assurance brings a new dynamics in the game. We study the collective experience
of the other countries in Asia already deregulated their markets and have allowed foreign
companies to participate. If the experience of the other countries is any guide, the
dominance of the Life Insurance Corporation and the General Insurance Corporation is
not going to disappear any time soon.
a comprehensive set of regulations was put in place to stem this problem (see Table 1).
By 1956, there were 154 Indian insurance companies, 16 non-Indian insurance
companies and 75 provident societies that were issuing life insurance policies. Most of
these policies were cantered in the cities (especially around big cities like Bombay,
Calcutta, Delhi and Madras). In 1956, the then finance minister S. D. Deshmukh
announced nationalization of the life insurance business.
Monopoly Raj
The nationalization of life insurance was justified mainly on three counts.
(1) It was perceived that private companies would not promote insurance in rural areas.
(2) The Government would be in a better position to channel resources for saving and
investment by taking over the business of life insurance.
(3) Bankruptcies of life insurance companies had become a big problem (at the time of
takeover, 25 insurance companies were already bankrupt and another 25 were on the
verge of bankruptcy). The experience of the next four decades would temper these
views.
11
12
LITRATURE REVIEW
Insurance Market- Present:
The insurance sector was opened up for private participation four years ago. For years
now, the private players are active in the liberalized environment. The insurance market
have witnessed dynamic changes which includes presence of a fairly large number of
insurers both life and non-life segment. Most of the private insurance companies have
formed joint venture partnering well recognized foreign players across the globe.
There are now 29 insurance companies operating in the Indian market 14 private life
insurers, nine private non-life insurers and six public sector companies. With many more
joint ventures in the offing, the insurance industry in India today stands at a crossroads
as competition intensifies and companies prepare survival strategies in scenario.
There is pressure from both within the country and outside on the Government to
increase the Foreign Direct Investment (FDI) limit from the current 26% to 49%, which
would help JV partners to bring in funds for expansion.
There are opportunities in the pensions sector where regulations are being framed. Less
than 10 % of Indians above the age of 60 receive pensions. The IRDA has issued the
first license for a standalone health company in the country as many more players wait
to enter. The health insurance sector has tremendous growth potential, and as it matures
and new players enter, product innovation and enhancement will increase. The
deepening of the health database over time will also allow players to develop and price
products for larger segments of society.
State Insurers Continue To Dominate There may be room for many more
players in a large underinsured market like India with a population of over one billion.
But the reality is that the intense competition in the last five years has made it difficult
for new entrants to keep pace with the leaders and thereby failing to make any impact in
the market.
13
Also as the private sector controls over 26.18% of the life insurance market and over
26.53% of the non-life market, the public sector companies still call the shots.
The countrys largest life insurer, Life Insurance Corporation of India (LIC), had a share
of 74.82% in new business premium income in November 2005.
Similarly, the four public-sector non-life insurers New India Assurance, National
Insurance, Oriental Insurance and United India Insurance had a combined market share
of 73.47% as of October 2005. ICICI Prudential Life Insurance Company continues to
lead the private sector with a 7.26% market share in terms of fresh premium, whereas
ICICI Lombard General Insurance Company is the leader among the private non-life
players with a 8.11% market share. ICICI Lombard has focused on growing the market
for general insurance products and increasing penetration within existing customers
through product innovation and distribution.
14
Global Standards While the world is eyeing India for growth and expansion, Indian
companies are becoming increasingly world class. Take the case of LIC, which has set
its sight on becoming a major global player following a Rs280-crore investment from
the Indian government. The company now operates in Mauritius, Fiji, the UK, Sri
Lanka, and Nepal and will soon start operations in Saudi Arabia. It also plans to venture
into the African and Asia-Pacific regions in 2006.
The year 2005 was a testing phase for the general insurance industry with a series of
catastrophes hitting the Indian sub-continent.
However, with robust reinsurance programs in place, insurers have successfully
managed to tide over the crisis without any adverse impact on their balance sheets.
With life insurance premiums being just 2.5% of GDP and general insurance premiums
being 0.65% of GDP, the opportunities in the Indian market place is immense. The next
five years will be challenging but those that can build scale and market share will
survive and prosper.
15
SWOT ANALYSIS
The SWOT analysis of Insurance sector is as follows:1. Strength-Very good policies of life coverage.
2. Weaknesses:-unable to convince the people about the products. There are not
much advisors for the insurance companies
3. Oppourtunities:-Untapped rural sector and small towns
4. Threats:-growing competition from larger MNC's.
16
International Partner
Allianz Holding, Germany
American Int. Group, US
Zurich Insurance, Switzerland
Prudential, UK
Winterthur Insurance, Switzerland
Commercial Union, UK
Cigna, US
Standard Life, UK
General Accident, UK
Royal Sun Alliance, UK
Allstate, US
Chubb, US
J Rothschild, UK
Gio, Australia
Guardian Royal Exchange, UK
Group Legal & General, Australia
Canada Life
Met Life
ING
17
Directors Report
REVIEW OF OPERATIONS:
The turnover of the company during the year is Rs.50.28.Lacs compared to 1423.33
Lacs. Showing decrease by Rs.1373.05 Lacs from the corresponding year ended 31st
March, 2007 due to fall in marketing conditions.
FIXED DEPOSIT:
The company has not accepted any fixed deposits during the year.
AUDITORS:
Auditors of the company M/s. J. P. Saboo & Co. Chartered Accountants of Surat, will
retire at the conclusion of the ensuing 24th Annual Genera Meeting from the office of
the Auditors and being eligible offer themselves for re-appointment from the end of the
ensuing Annual General Meeting till the. conclusion of the next Annual General Meetin
at a remuneration payable as may be decided. As required under the provisions of
Section 224(lB),the Company has received certificate that the. appointment, if made
shall be within the limits as set down in said section.
DIRECTORS;
In accordance with Article 116 of the Articles of Association of the company, Shri Jatin
Gupta & Sbri Pawan Gupta retire by rotation and being eligible, offers himself for-their
re-appointment. The Board recommends their re-appointment Shri Mohan Gupta, Shri
Shyamsunder
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Going Concern
As a consequence of the Companys considerable financial resources, the directors
believe that the Company is well placed to manage its business risks successfully
despite the current uncertain economic outlook.
After making enquiries, the directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future.
Financial instruments
The business of the Company includes use of financial instruments. Details of the
Company's risk management objectives and policies and exposures to risk relating to
financial instruments are set out in note 8 to the financial statements.
Dividends
21
Interim ordinary dividends of 340 million were declared and paid during 2009
(2008: 475 million). The directors do not recommend a final ordinary dividend for
the year (2008: nil). The total cost of dividends paid during the year, including
preference dividends, amounted to 361million (2008: 567 million, including the
2007 final dividend).
Directors interests
None of the directors who held office at 31 December 2009 held any interest in the
Companys shares.
Directors Liabilities
Aviva plc, the Companys parent, has granted an indemnity to the directors
against liability in respect of proceedings brought by third parties, subject to the
conditions set out in the Companies Act 1985. This indemnity was granted in 2004
and the provisions in the Company's Articles of Association constitute "qualifying
third party indemnities" for the purposes of sections 309A to 309C of the Companies
Act 1985. These qualifying third party indemnity provisions remain in force as at the
date of approving the Directors report by virtue of the transitional provisions to the
Companies Act 2006.
Auditor
A resolution is to be proposed at the Annual General Meeting for the reappointment
of Ernst & Young LLP as auditor of the Company. A resolution will also be
proposed authorizing the directors to determine the auditors remuneration.
sets out standards of good practice in the form of principles and provisions on how
companies should be directed and controlled to follow good governance practice.
The Financial Services Authority requires companies listed in the UK to disclose, in
relation to Section 1 of the Combined Code, how they have applied its principles and
whether they have complied wit its provisions throughout the accounting year.
Where the provisions have not been complied with companies must provide an
explanation for this.
It is the Boards view that Aviva plc has been fully compliant throughout the
accounting period with the provisions set down in Section 1 of the Combined
Code, apart from a period during the year when the majority of the members of the
Nomination Committee was not independent non-executive directors. This was due
to the resignation of Nikesh Arora, a non-executive director, who resigned following
his relocation to the United States. The Aviva plc Directors Report sets
out details of how the Aviva group has applied the principles and complied
with the provisions of the Combined Code during 2009.
The Company has listed preference shares and the payment of dividends to the
preference shareholders is reviewed by the Aviva plc Audit Committee and approved
23
by the directors of the Company. There are no other significant risks associated with
the Companys assets and liabilities, and the Company seeks to maintain sufficient
funds to meet dividends payable on the preference shares as they fall due.
state that the Company has complied with applicable IFRS, subject
internal control maintained for safeguarding the assets of the Company and for the
prevention and detection of fraud and other irregularities.
24
the
EU, International
of the development and performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties that
they face.
25
undertaken so that we might state to the companys members those matters we are
required to state to them in an auditors report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the companys members as a body, for our audit work,
for this report, or for the opinions we have formed.
Give a true and fair view of the state of the companys affairs as at 31
December 2009 and of its profit for the year then ended;
27
Auditor's Report
1. We have audited the attached balance sheet of AVIVA INDUSTRIES LIMITED,
MUMBAI as at 31st March 2008, the profit and loss account and also the (cash flow
statement) for the year ended on that date annexed thereto. These financial statements
are the responsibility of the companys management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with.the auditing standards generally accepted
in India. Those Standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosure in the financial statement. An audit also includes assessing the
accounting principal used and significant estimates made by management, as well as
evaluating the overall financial statement presentation: We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central
Government of India in term of sub - section (4A) of section 227 of the Companies Act,
1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 .
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that.
(i) We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit.
(ii) In our opinion, proper books of account, as required by law have been kept by the
company so far as appears from our examination of those books.
(iii) The balance sheet, profit and loss account and cash flow statement dealt with by
28
having regard to the size of the company and the nature of its assets. No material
discrepancies were noticed to such verification
(c) Some part of old fixed assets has been disposed off during the period. According to
the information and explanations given to us, we are of the opinion that the sale of the
said part of fixed assets has not affected the going concern status of the company.
(ii) (a) The inventory has been physically verified during the year by the management.
In our opinion the frequency of verification is reasonable.
(b) The procedures of physical verification of inventories followed by the management
are reasonable and adequate in relation to the size of the company and the nature of its
business.
(c) The company Is maintaining proper records of inventory. The discrepancies noticed
on verification between the physical stocks and the books records were not material.
(iii) (a) The company has not granted/taken loans to/from companies, firms or other
parties listed in the register maintained under section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations given to us, there
are adequate internal control procedures commensurate with the size of the company and
the nature of its business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have notobserved any
continuing failure to correct major weaknesses in internal controls.
(v) (a) According to the information and explanations given to us, we are of the opinion
that the transactions that need to be entered into the register maintained under section
301 of the Companies Act, 1956 have been So entered.
(b) In our opinion and according to the informations and explanations given to us, the
30
31
(xi) In our opinion and according to the information and explanations given to us, the
company has not defaulted in repayment of dues to a financial institution, bank or
debenture holders.
(xii) The company has not granted loans and advances on the basis of security by way
of a pledge of share, debentures and other securities.
(xiil) The company is not a chit fund or a nidhi mutual benefit fund/society. Therefore;
the provisions of clause 4 (xiil) of the Companies (Authors Report) Order, 2003 are not
applicable to the company.
(xiv) The company is not dealing in or trading in shares, securities, debentures and
other investments except as an investment. Accordingly, the provisions of clause 4 (xiv)
of the Companies (Auditors Report) Order, 2003 are not appllcable to the company.
(xv) in our opinion and informed by the management, the company has not given
guarantees for loans taken by others from banks or financial institutions.
(xvi) In our opinion, the term loans have been applied for the purpose for which they
were raised.?;
(xvii) According to the information and explanations given to us and on an overall
examination of the balance sheet of the company, we report that the no funds raised on
short
- term basis have been used for long
- term investment. No long - term funds have been used to finance short
- term assets except permanent working capital.
(xviii) According to the information and explanations given to us, the company has not
made any allotment of preferential shares during the financial year.
32
(xix) The company has no issued and / or outstanding debentures at the end of the year.
(xx) The company has not issued and raised money by public issues during the year.
(xxi) According to the information and explanations given to us, no fraud on or by the
Company has been noticed or reported during the course of our audit. Find your
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33
Accounting policies
General
Accident
plc
(the
Company) is
public
limited
company
34
5. INVENTORIES
The inventory has been valued at lower of cost or net relisable price, however there
is no closing stock at the
6. REVENUE AND EXPENDITURE RECOGNITION
Revenue Is recognised and expendeiture is accounted for on their accrual except
claims in respect of goods purchased and sold & Insurance, which are accounted for
on cash basis.
7. INVESTMENT
Investment are valued at Cost. No provision has been made for depreciation of the
market value of the Investment.
(A)Basis of presentation
The financial statements of the Company have been prepared in accordance
with
International
Financial
Reporting Standards
(IFRS)
issued
by
the
(B)Use of estimates
The preparation of financial statements requires the Company to make estimates and
assumptions that affect items reported in the statement of financial position and
income statement and the disclosure of contingent assets and liabilities at the date of
the financial statements. Although these estimates are based on managements
best knowledge of current facts, circumstances and to, some extent, future
events and actions, actual results ultimately may differ from those estimates,
possibly significantly.
35
(C)Investment income
Investment income consists of interest receivable for the year. Interest receivable is
recognized as it accrues, taking into account the effective yield on the investment.
(D)Financial instruments
Loans to, or from other Aviva Group companies are recognized when cash is
advanced to, or received from these companies. These loans are subsequently
carried at amortized cost. The Company reviews the carrying value of loans on a
regular basis. If the carrying value of the loan is greater than the recoverable amount,
the carrying value is reduced through a charge to the income statement in the period
of impairment.
36
(G)
Share capital
Equity instruments
An equity instrument is a contract that evidences a residual interest in the
assets of an entity after deducting all its liabilities. Accordingly, a financial
instrument is treated as equity if:
I.
There is no contractual obligation to deliver cash or other financial
assets or to exchange financial assets or liabilities on terms that may be
unfavorable; and
The instrument is a non-derivative that contains no contractual obligation
II.
37
Research Methodology
Market research is the process of systematic gathering, recording and analyzing of
data about customers, competitors and the market. Marketing research (also called
consumer research) is a form of business research. It is a form of applied sociology
which concentrates on understanding the behaviors, whims and preferences, of
consumers in a market-based economy. Market research can help create a business
plan, launch a new product or service, fine tune existing products and services, expand
into new markets etc. It can be used to determine which portion of the population will
purchase the product/service, based on variables like age, gender, location and income
level. It can be found out what market characteristics your target market has. With
market research companies can learn more about current and potential customers.
The purpose of market research is to help companies make better business decisions
about the development and marketing of new products and in the case of financial
market research, it shows the company worthiness and position in front of people.
Formulate Findings
38
Secondary Data.
In my research project there is no need to collect primary data. I want only secondary
data that I have been collected by different sources.
Internet- From the internet we have take the histories of companies for the introduction
part. We search some data from the website of company and search engine like Google.
Books- Books are also helpful us for the data research. We have taken help of books to
calculate the ratios and analyzing the financial statements like Profit & Loss account and
Balance sheet etc.
39
FINANCIAL STATEMENT
Profit & loss Account, Balance Sheet and Key Ratio of Aviva
life insurance
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
12 mths
12 mths
12 mths
12 mths
12 mths
Sales Turnover
0.00
10.15
0.00
14.23
0.47
Excise Duty
0.00
0.00
0.00
0.00
0.00
Net Sales
0.00
10.15
0.00
14.23
0.47
Other Income
0.06
0.05
0.05
0.01
0.03
Stock Adjustments
0.00
0.00
0.00
0.00
0.00
Total Income
0.06
10.20
0.05
14.24
0.50
Raw Materials
0.00
7.77
0.00
13.91
0.45
0.00
0.30
0.00
0.00
0.00
Employee Cost
0.00
0.36
0.00
0.09
0.01
0.00
1.59
0.00
0.00
0.00
Income
Expenditure
40
0.00
0.00
0.00
0.00
0.00
Miscellaneous Expenses
0.01
0.11
0.01
0.11
0.06
0.00
0.00
0.00
0.00
0.00
Total Expenses
0.01
10.13
0.01
14.11
Mar '0
Mar '06
Mar '07
Mar '08
Mar '09
12 mths
12 mths
12 mths
12 mths
12 mths
-0.01
0.02
-0.01
0.12
-0.05
PBDIT
0.05
0.07
0.04
0.13
-0.02
Interest
0.00
0.00
0.00
0.00
0.00
PBDT
0.05
0.07
0.04
0.13
-0.02
Depreciation
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.04
0.06
0.03
0.13
-0.02
Extra-ordinary items
0.00
0.00
-0.01
0.00
0.00
0.04
0.06
0.02
0.13
-0.02
Tax
0.00
0.00
0.00
0.05
0.01
0.04
0.06
0.03
0.07
-0.02
0.01
2.36
0.01
0.19
0.07
Preference Dividend
0.00
0.00
0.00
0.00
0.00
Equity Dividend
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
15.00
14.99
14.99
14.99
14.99
0.27
0.42
0.18
0.50
-0.12
0.52
Operating Profit
41
42
0.00
0.00
0.00
0.00
0.00
11.73
12.16
12.34
30.99
30.87
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
12 mths
12 mths
12 mths
12 mths
12 mths
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Reserves
0.26
0.32
0.35
3.15
3.13
Revaluation Reserves
0.00
0.00
0.00
0.00
0.00
Net worth
1.76
1.82
1.85
4.65
4.63
Secured Loans
0.01
0.00
0.00
0.02
0.01
Unsecured Loans
0.00
0.00
0.09
1.00
0.75
Total Debt
0.01
0.00
0.09
1.02
0.76
Total Liabilities
1.77
1.82
1.94
5.67
5.39
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
12 mths
12 mths
12 mths
12 mths
12 mths
Sources Of Funds
Application Of Funds
43
Gross Block
0.13
0.13
0.13
0.80
0.69
0.09
0.10
0.11
0.08
0.07
Net Block
0.04
0.03
0.02
0.72
0.62
0.00
0.00
0.00
0.00
0.00
Investments
0.69
0.69
0.69
1.24
1.24
Inventories
0.00
0.00
0.00
0.00
0.00
Sundry Debtors
0.00
0.31
0.00
1.07
1.38
0.03
0.08
0.03
0.10
0.08
0.03
0.39
0.03
1.17
1.46
1.02
1.76
1.22
3.46
3.69
Fixed Deposits
0.00
0.00
0.00
0.00
0.00
1.05
2.15
1.25
4.63
5.15
Deffered Credit
0.00
0.00
0.00
0.00
0.00
Current Liabilities
0.01
1.04
0.03
2.21
2.92
Provisions
0.00
0.00
0.00
0.04
0.04
0.01
1.04
0.03
2.25
2.96
1.04
1.11
1.22
2.38
2.19
Miscellaneous Expenses
0.00
0.00
0.00
1.31
1.35
Total Assets
1.77
1.83
1.93
5.65
5.40
Contingent Liabilities
0.00
0.00
0.00
0.00
0.00
11.73
12.16
12.34
30.99
30.87
44
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
10.00
10.00
10.00
--
--
--
-0.07
0.12
-0.05
0.84
-0.27
--
67.70
--
94.91
3.16
--
--
--
-8.77
-9.00
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
83.33
0.70
92.30
0.55
-3.67
66.66
0.61
52.42
0.52
-3.67
--
--
--
--
--
--
--
--
--
--
2.27
3.42
1.46
--
--
2.27
3.42
2.18
2.28
-0.56
2.25
2.17
1.37
0.94
-0.22
2.25
2.17
1.37
0.94
-0.22
2.25
3.39
1.89
2.28
-0.21
105.00
2.05
37.47
2.06
1.73
10.00
--
10.00
--
Profitability Ratios
45
Quick Ratio
105.00
2.04
37.20
2.06
1.73
0.01
--
0.05
0.22
0.16
0.01
--
0.05
0.22
0.16
--
--
--
0.01 --
0.05
-0.22
-0.16
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
32.81
--
--
0.39
--
--
--
--
--
--
278.39
--
--
--
--
--
--
--
--
--
75.58
--
17.74
--
--
--
--
--
--
--
--
39.05
--
60.42
1,654.04
--
76.54
--
97.76
94.37
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
100.00
100.00
100.00
100.00
--
100.00
100.00
100.00
100.00
--
0.20
--
1.84
12.95
--
0.69
---
46
Mar '05
Mar '06
Mar '07
0.27
0.42
0.18
0.50
-0.12
11.73
12.16
12.34
30.99
30.87
47
Mar '08
Mar '09
CREDIT RATING
At Aviva we consider it important to keep customers and investors up to date with
developments affecting the Group. In this section we show the Insurer Financial
Strength ratings of our core operating subsidiaries and the ratings of our long and short
term debt.
Insurer financial strength
S&P
Rating
Description
Outlook
Moodys
AM Best
AA-
Aa3
Very strong
Excellent
Excellent
Negative
Negative
Stable
Debt ratings
S&P
Senior (guaranteed)
Moody's
AM Best
A1
a-
A-/BBB+
A3
bbb+
BBB+
Baa1
bbb
A-1+
P-1
not rated
Subordinated
48
CASH FLOW
------------------- in Rs. Cr. -------------------
Mar '03
Mar '04
Mar '08
12 mths
12 mths
12 mths
0.06
0.04
-0.01
0.00
-0.18
0.18
0.06
0.04
0.06
-0.01
0.09
-0.26
0.05
-0.04
-0.02
0.03
0.08
0.10
0.08
0.03
0.08
49
DATA REPRESENTATION
Their IFRS earnings per share for 2009 were 37.8 pence (2008: 36.8 pence loss). This
mainly reflects the improvement in financial markets in 2009. Economic and investment
return assumptions during the year were in line with our long-term expectations with a
positive variance of 77 million (2008: 2,544 million adverse).
As condition of insurance market was very bad in 2006 to 2008 mid after that it
improved a lot and from that graph we can understand that because of market slowdown
it happened.
50
Debt equity ratio is also saying that it improved a lot from the year 2007 mid till 2008
but after that because of return the have faced the slowdown.
51
Quick Ratio
Quick ratio shows also decline position it means that the ability to change current assets
into money or liquidate power is declining because of market trends. The liquid assets
are very few and they are not utilizing properly. As market down in year 2005 so its
speedily declined after year 2006 its slowly recovered but in the year 2008 and 2009 it
was stagnant.
52
Current Ratio
The difference of current assets and current liabilities shows that ratio. As it shows that
if working capital is high so liquidity of business is respectively high. By this graph I
can understand the financial position of the company like in the year 2005 the ratio
shows the good position but because of market slowdown its fluctuating and after 2008
it become stable. That shows that company is recovering its financial position.
53
In every graph we can see that position was very fluctuating of the company, it is
because market slowdown. In this graph I can say that company is trying to recover the
losses by reducing the indirect expenses. As in the year 2008 and 2009 the position was
little bit stable then other year.
54
Operating profit per share is decline very speedily, it is because after slowdown it
become tough to survive in that position and to overcome from this situation they need
fund and the company can adjust fund only by reducing expense and taking help by
bank or its shareholders. So here because of expense operating profit reduce per share
till the year 2009.
55
The improvement in 2009 to 16.2% (2008: 11.0%) reflects the increase in the post-tax
MCEV operating result and the impact of lower opening equity shareholder's funds
following falls in asset values in 2008.
Return on equity shareholders' funds is calculated as after-tax operating return, before
adjusting items, on opening equity shareholders' funds, including life profits on a market
consistent embedded value (MCEV) basis.
56
Conclusion
As the project is to Analysis of Financial Position & Profitability of Aviva Life
Insurance and the main objective to understand the financial position or condition of
company. After completing the project I know that how ability of management can
perform work in difficult situation. Because during the recession they faced very bad
condition but as India condition will improve they will also improve. As company is
trying to reduce its expenses for earning good profit.
57
Finding
By this project I found that company position is not that much good right
now because of slowdown in year 2005-06 and that impacted a lot on companys
ratio.
The ratio like Current Ratio, Quick Ratio, Earning par share, Return on
Capital Employed or Shareholder Funds, Operating Profit, Net Profit Margin and
Debt-Equity Ratio are in decline position.
These ratios show that company is not utilizing its fund properly and the
By this project I found that the operating expenses are very high due to
I found that if company will focus on its liabilities so they can overcome
The credit rating that the company got in year 2205 was very good. But
after that recession it changed, here credit rating play very important role because
almost 60% investors invest their money on the basis of goodwill or credit rating
that a company hold in the market.
58
59
Limitation
The data collection was little bit tough because latest data is not available
on the internet.
60
Bibliography
Books
www.google.com
www.moneycontrol.com
http://www.moneycontrol.com/financials/avivaindustries/profit-loss/AI55
http://www.moneycontrol.com/financials/avivaindustries/balance-
sheet/AI55
61
62