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This project was also carried out to understand the future Outlook of the
AEGON RELIGARE LIFE INSURANCE. Another motive includes finding
about the key financial condition of AEGON RELIGARE LIFE INSURANCE.
Their performance, growth potential and also the opportunities that exist for the
Indian industries. The scope of this project is limited to study of AEGON
RELIGARE LIFE INSURANCE. .
Financial management involves lots of tools, but only selected tools were
studied .The study frame considered is very limited. The data used is secondary
data (books, Internet annual reports).
1
TABLE OF CONTENT
2
INTRODUCTION
Financial analysis
3
Financial analysis (also referred to as financial statement analysis or
accounting analysis) refers to an assessment of the viability, stability and
profitability of a business, sub-business or project.
It is performed by professionals who prepare reports using ratios that make use
of information taken from financial statements and other reports. These reports
are usually presented to top management as one of their bases in making
business decisions. Based on these reports, management may:
Goals
1. Profitability - its ability to earn income and sustain growth in both short-
term and long-term. A company's degree of profitability is usually based on the
income statement, which reports on the company's results of operations;
2. Solvency - its ability to pay its obligation to creditors and other third parties
in the long-term;
3. Liquidity - its ability to maintain positive cash flow, while satisfying
immediate obligations;
Both 2 and 3 are based on the company's balance sheet, which indicates the
financial condition of a business as of a given point in time.
4
4. Stability- the firm's ability to remain in business in the long run, without
having to sustain significant losses in the conduct of its business. Assessing a
company's stability requires the use of both the income statement and the
balance sheet, as well as other financial and non-financial indicators.
Methods
• Past Performance - Across historical time periods for the same firm (the
last 5 years for example),
• Future Performance - Using historical figures and certain mathematical
and statistical techniques, including present and future values, This
extrapolation method is the main source of errors in financial analysis as
past statistics can be poor predictors of future prospects.
• Comparative Performance - Comparison between similar firms.
These ratios are calculated by dividing a (group of) account balance(s), taken
from the balance sheet and / or the income statement, by another, for example :
• They say little about the firm's prospects in an absolute sense. Their
insights about relative performance require a reference point from other
time periods or similar firms.
• One ratio holds little meaning. As indicators, ratios can be logically
interpreted in at least two ways. One can partially overcome this problem
5
by combining several related ratios to paint a more comprehensive
picture of the firm's performance.
• Seasonal factors may prevent year-end values from being representative.
A ratio's values may be distorted as account balances change from the
beginning to the end of an accounting period. Use average values for such
accounts whenever possible.
• Financial ratios are no more objective than the accounting methods
employed. Changes in accounting policies or choices can yield drastically
different ratio values.
• They fail to account for exogenous factors like investor behavior that are
not based upon economic fundamentals of the firm or the general
economy (fundamental analysis) [1].
Financial analysts can also use percentage analysis which involves reducing a
series of figures as a percentage of some base amount[2]. For example, a group
of items can be expressed as a percentage of net income. When proportionate
changes in the same figure over a given time period expressed as a percentage is
known as horizontal analysis[3]. Vertical or common-size analysis, reduces all
items on a statement to a “common size” as a percentage of some base value
which assists in comparability with other companies of different sizes [4].
Financial Analysis
6
Understanding your organization’s financial health is a fundamental aspect of
responding to today’s increasingly stringent financial reporting requirements.
To avoid risks, organizations must quickly
• identify ascertain financial ratios and trends acrossin liabilities and assets
• analyze and adjust planned and forecasted amounts
• act to provide regulatory statements as needed
The unique strengths of the MicroStrategy platform are well suited for
performing even the most demanding of Financial Analysis applications. Using
MicroStrategy, Financial users have their detailed reporting, their scorecard of
metrics, and their interactive dashboards at their fingertips via a single interface.
7
From Profit Margin or Current Ratio to Assent Turnover or Debt to Equity,
users have unlimited access to financial ratios and analytics when performing
financial analysis with any MicroStrategy reporting tool.
The MicroStrategy platform offers analytics that can be used to answer key
financial questions:
8
Financial analysis tools can be very helpful to executives of both small and
large firms. Specifically, the tools can allow the executive to see where the
money has been going on a historical basis and where it may go (or need to go)
in the future. This brief paper will explore three examples of how financial
analysis tools can be used to assess and improve business performance.
Assessing outflow
Financial analysis tools, such as Peach-Tree made by the Sage Corporation, can
help a firm gain a better understanding of monetary outflow. In essence, outflow
provides at its core a balance of payments (BOP), which provides data
(sometimes illustrated) related to various cost centers (Sloman, 2004). This term
is often assigned to foreign transactions or for companies doing business
overseas however, it can also apply to domestic organizations. Financial
analysis tools that assess outflow also:
For example, our organization, 2nd Story Counseling - a Chicago Counseling &
Psychotherapy Group, uses financial software to assess trends in consulting
needs. If we notice an uptick in a particular type of product as indicated by the
financial software, we then have the ability to identify new opportunities in the
marketplace. While an accountant may look at a financial analysis report in one
way (primarily monetarily), a manager or executive should be looking at the
report as a way to identify new opportunities. We did just such a thing at our
firm and discovered the need for more couples counseling services in our
9
particular market-space.
Financial analysis tools should be viewed as helpers for managers. When used
properly, the can help to identify waste, increase products and increase
productivity. Financial analysis tools need not be large expensive software
packages - a tool can be a simple Excel spreadsheet. The idea is for managers to
have a device to help inform decisions and create a healthy financial business
environment.
10
fact that financial statements are historical documents, they can still provide
valuable information bearing on all of these concerns.
Managers are also widely concerned with the financial ratios. First the ratios
provide indicators of how well the company and its business units are
performing. Some of these ratios would ordinarily be used in a balanced
scorecard approach. The specific ratios selected depend on the company's
strategy. For example a company that wants to emphasize responsiveness to
customers may closely monitor the inventory turnover ratio. Since managers
must report to shareholders and may wish to raise funds from external sources,
managers must pay attention to the financial ratios used by external inventories
to evaluate the company's investment potential and creditworthiness.
11
mind, comparisons of key ratios with other companies and with industry
averages often suggest avenues for further investigation.
12
COMPANY
PROFILE
13
AEGON Religare Life Insurance Company
ARLI has launched a suite of products that are focused on providing the
customer with the means to meeting their long-term financial goals. At the same
time product development has been founded on the tenet of providing the
customer with great value. ARLI products such as AEGON Religare iTerm Plan
and AEGON Religare Invest Maximiser Plan have been ranked among the best
in terms of value and have attracted many external accolades.
About AEGON
14
Religare Enterprises Limited (REL) is a global financial services group with a
presence across Asia, Africa, Middle East, Europe and the Americas. In India,
Religare’s largest market, the group offers a wide array of products and services
ranging from insurance, asset management, broking and lending solutions to
investment banking and wealth management. The group has also pioneered the
concept of investments in alternative asset classes such as arts and films. With
over 10,000 employees across multiple geographies, Religare serves over a
million clients, including corporates and institutions, high net worth families
and individuals, and retail investors. REL hold 44% equity in ARLI.
Bennett, Coleman & Company Limited (BCCL), part of the mammoth Times
Group, is India’s largest media house. It reaches out to 2468 cities and towns all
over India. The group owns and manages powerful media brands like The
Times of India, The Economic Times, Maharashtra Times, Navbharat Times,
Femina, Filmfare, Grazia, Top Gear, Radio Mirchi, Zoom, Times Now, Times
Music, Times OOH, Private Treaties and indiatimes.com. All of its brands are
multinational in outlook, traditional at heart and national in spirit. From the very
first edition on November 3, 1838 the mammoth BCCL Group has come a long
way. By way of the innovative venture of Times Private Treaties
(http://www.timesprivatetreaties.com), the BCCL Group holds 30% equity in
ARLI
15
Products
Life Insurance
Life Insurance is a commonly used term, yet it is seldom understood and not
many are confident about choosing the best life insurance policy for themselves
and their families. There are many life insurance companies and innumerable
plans available, but before you opt for the perfect life insurance policy, you
need to evaluate the pros and cons. Evaluate life insurance as an investment
option and think about whether you really need it. And if you do, should you
choose a cheap life insurance policy or opt for the best life cover available.
Which insurance company should you select? And if you already have a policy,
should you buy another?
The questions that pop up are mind boggling; so to help you plan your life
better, we have provided answers to a few basic ones. This will equip you
choose the best life insurance company and plan for you and your family.
16
What is life insurance?
Simply put, life insurance is a medium of providing a financial backup for your
family even after you pass on. Life insurance is an important part of a sound
financial planning. Different types of life insurance plans will not only
financially protect you and your loved ones incase of unfortunate event but, also
help you save in a planned manner for important goals
Life insurance companies charge you a regular premium for the cover it
provides for chosen time period. Whereas, incase of ULIPs (Unit Linked
Insurance Plans) part of the premium post deductions of charges is invested to
earn returns.
Whether or not you need life insurance and how much, depends on whether or
not you have dependent family members. But practical wisdom suggests that
even if nobody relies on your income for daily living, you should still buy at
least one life insurance plan which serves as a means of personal investment
and tax savings instrument.On the other hand if your income is important to
your family members and your salary contributes to paying bills and loans, then
you must choose the best life insurance option that you can afford. Of all plans
available, Term Plan is the pure protection plan and will be cheap life insurance
as well. Be sure to compare life insurance companies and the plans they offer
well before settling for one.
If your employer provides you with a life insurance policy, that's a bonus. These
days large organizations do offer life insurance as one of the perks, but
17
remember that often these cheap life insurance plans may not cover enough. So
always ensure that you read the fine print and are aware of how much your
employer's life insurance company promises you. And if this insurance is not
adequate, it is advisable to invest in a new life insurance plan as well.
There are some important things to consider when determining the best life
insurance policy and ideal policy amount for you:
18
will exist lifelong, will depend on the duration of your financial
requirement.
As you grow in life, you should revisit the existing plan and evaluate if you
need to invest in new life insurance plans. You can diversify your
• insurance savings with a new life insurance plan and actually schedule
when and how much money your family receives.
So choose with care. You can learn more about the different life insurance plans
to further narrow down your choices and select the ideal life insurance plan for
yourself.
Different Types of Life Insurance Plans and How to Choose the Ideal Plan
for you
Before you get into the different kinds of life insurance plans available, our
guide to understanding life insurance will help you understand the basics. Life
insurance plans not only act as a protection cover for you and your family in
case of ill health and untimely demise but, also doubles as a savings and
investment plan to achieve set goals. So, remember that the decision of selecting
the ideal Plans is very critical and instead of purchasing any life insurance plan
that you are offered in haste, take time to make your decision
Life insurance plans have various options to suit different people at different life
stages. Before you decide on which life insurance Plans you need to buy
, you must carefully analyse why you need the Plans, what will be the sum
assured and for how long.To help you answer these questions we have prepared
a step by step guide that takes you through the process of understanding and
selecting the best life insurance Plans for your needs.
19
STEP 1: Evaluate why you are investing in life insurance plans.
• If you have dependent family members, then life insurance plans like
Protection Plans which provide only life cover will help your family tide
over financial losses in tough times.
• If you are investing to save for your child’s future or planning for your
retirement, then special plans like Child Plans and Retirement Plans
would be better life insurance schemes.
• If you don’t have dependent family members, then your life insurance
plans can become your channel of investment. Earlier you start saving
better it is because your investments get that much more time to grow in
the long run.
• For people who don’t have any other major investments, life insurance
schemes are also ideal ways to save tax.
• After you know how much you need, assess how much you can save and
invest in life insurance plansplans on an ongoing basis.
• If you expect your income to grow in the near future, then you can opt for
an increasing premiumPlans where the premium increases gradually and
also helps increase the sum assured.
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STEP 4: Pick a Plans to suit your needs.
• After having assessed your life insurance requirements and the amount
you can save, it is time for you to evaluate different products. It is also
important to spend some time researching various plans available.
There are a lot of insurance companies offering numerous life insurance plans.
The names of plans may vary but what you need to look out for is the advantage
each plan offers you over the other.
Our Plans:
• Child Plans
Protection Plans
ULIPs
Unit Linked Insurance Policies or ULIPs as they are commonly called, are more
innovative forms of life insurance that also offer returns on your investments.
Every ULIP provides cover against death. In addition, these unit linked
insurance plans also serve as great means of long-term savings, structured to
give you miximum benefit. In simple words, investment in ulips is great
combination of protection and investment.Let us help you understand ULIPs
better.
When you buy ULIPs, every year from the premium your life insurance
company deducts the charges towards life cover, administration and fund
management. The balance ULIP premium is invested in various funds offered
by the insurance company.
21
Every unit linked insurance plan holder is allotted a set number of units based
on the ULIP investment. On a daily basis, life insurance companies declare a
Net Asset Value, also known as NAV or ULIP NAV. This is your unit's worth
in the market on that given day. You can monitor and modify your ULIP
investments in various fund options and make the most of your hard earned
money.
Most unit linked policy holders opt for ULIPs because of the flexibility they
offer. There is an option of making lumpsum investment or paying regular
premiums using the systematic investment plans (SIP). And just like any other
life insurance policy, with ULIPs also you can choose from annual, half-yearly,
quarterly or monthly ULIP premium payment options to suit your financial
requirements. Additionally, as a unit linked policy holder, you have the option
of investing your units across various fund options such as equity fund,
balanced fund, debt fund and secure fund. During the tenure of your policy
depending on your risk appetite you can also switch investments from one fund
to another. This gives you the flexibiltiy of customising your investment plan.
Most importantly, ULIP investors have the added ability to invest additional
lumpsum amount anytime during the policy term.Or if you should need more
liquid cash at some point of time, you can even partially withdraw from the
fund value at that time
One of the other common reason for the success of unit linked insurance plans
is that all ULIP investments qualify for tax deductions under Section 80C of the
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Income Tax Act. Irrespective of your plan and fund options you can enjoy these
tax redemption benefits.
However, once you have decided to invest in ULIPs, you will realise that it has
many unique benefits which a good investment plans should have.
Our Plans
Retirement
regular income sources. Once you gauge your expenses after your retirement,
appraise what sources of income you will have then. Also assess how you can
make your current assets work optimally for you and assist in retirement
planning. If you have invested in AEGON Religare Pension Plans, you can
count on at least one reliable source of income. Key to good retirement planning
is to have an early start and steady growth. After evaluating your expenses post
retirement, choose a plan which can help you achieve that amount by investing
reasonable premium over a period of time. For example AEGON Religare
Pension Plans offers the 'Increasing Premium' option which allows you to
increases the premium year on year to address the inflation cost. You can pay
regular premiums which increase by 5% or 8% of the first year's premium,
every year. Thus ensuring that you always maintain the current lifestyle, even
after retirement.
Taking these simple steps will ensure you have a happy retirement by making
your money work as hard as you do. Do read about ULIPs and Child Plans if
you are looking for more life insurance investment options.
One of the other common reason for the success of unit linked insurance plans
is that all ULIP investments qualify for tax deductions under Section
80C of the Income Tax Act. Irrespective of your plan and fund options you can
enjoy these tax redemption benefits.However, once you have decided to invest
23
in ULIPs, you will realise that it has many unique benefits which a good
investment plans should have.
Health Plan
24
OBJECTIVE OF STUDY
25
OBJECTIVE OF THE STUDY
PRIMARRY OBJECTIVE :
SECONDARY OBJECTIVE:
26
4. To study about the Financial Analysis in AEGON RELIGARE
SECONDARY OBJECTIVE:
27
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
Research comprises of defining & redefining problems, formulating hypothesis
or suggested solutions, collecting, organizing & evaluating data, making
deductions & reaching conclusions. In research design we decide about:
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• Type of data
29
As no study could be successfully completed without proper tools and
techniques, same with my project. For the better presentation and right
explanation I used tools of statistics and computer very frequently. And I am
very thankful to all those tools for helping me a lot. Basic tools which I used for
project from statistics are-
- Pie charts
- Tables
bar charts and pie charts are really useful tools for every research to show the
result in a well clear, ease and simple way. Because I used bar charts and pie
charts in project for showing data in a systematic way, so it need not necessary
for any observer to read all the theoretical detail, simple on seeing the charts
any body could know that what is being said.
Technological Tools
Ms-Word
Ms-excel
Internet
Above application software of Microsoft helped me a lot in making project
more interactive and productive.
Microsoft-Excel had a great role in my project, it created for me a situation of
“you sit and get”. I provided it simply all the detail of data and in return it given
me all the relevant information..
Microsoft-Access did the performance of my personal assistant who organizes
my all the details of document without disturbing them even a single time in all
the project duration.
And in last Microsoft-Word did help me for the documentation of the project in
a presentable form.
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understand the basics of Financial management, cash flow and provides the
tools that help to decide how AEGON RELIGARE LIFE INSURANCE manage
to cash management. This type of analysis examines key ratios of a business in
order to determine its financial health and gives an idea of the future value of its
stock. .The scope of project extends to the study of financial terms of AEGON
RELIGARE LIFE INSURANCE.
31
DATA ANALYSIS
&
INTERPRETATION
32
Year Rs. In Cr.
2009 101.29
2008 76.08
2007 64.40
120
100
80
60
Equity Share Capital
40
20
0
2009 2008 2007
INTERPRETATION
33
Year Rs. In Cr.
2009 2,518.64
2008 481.32
2007 288.29
3,000.00
2,500.00
2,000.00
1,500.00
Networth
1,000.00
500.00
0.00
2009 2008 2007
INTERPRETATION
2,500.00
2,000.00
1,500.00
Investments
1,000.00
500.00
0.00
2009 2008 2007
INTERPRETATION
35
Total Current Assets of AEGON RELIGARE LIFE INSURANCE
3.5
3
2.5
2
Total Current Assets
1.5
1
0.5
0
2009 2008 2007
INTERPRETATION
36
In the year 2009 Total Current Assets was (Rs) 1.28Crores while in 2008 it
was Rs 1.13cr and in 2007 it was Rs 3.22crores .
Net Sales of AEGON RELIGARE LIFE INSURANCE .
35
30
25
20
15 Net Sales
10
5
0
2009 2008 2007
INTERPRETATION
37
In the year 2009 Net Sales was Rs 12.55Crores while in 2008 it was Rs
31.85Cr and in 2007 it was Rs 15.38crores
18
16
14
12
10
8 Equity Dividend
6
4
2
0
2009 2008 2007
INTERPRETATION
38
In the year 2009 Equity Dividend was Rs 0.00Crores while in 2008 it was Rs
17.39cr and in 2007 it was Rs 6.74crores .
39
18
16
14
12
10
8 Total Value Addition
6
4
2
0
2009 2008 2007
INTERPRETATION
In the year 2009 Total Value Addition was Rs 16.08Crores while in 2008 it
was Rs 4.51cr and in 2007 it was Rs 0.92crores .
Equity Dividend of AEGON RELIGARE LIFE INSURANCE .
40
Year Rs. In Cr.
2009 0.00
2008 17.39
2007 6.74
18
16
14
12
10
8 Equity Dividend
6
4
2
0
2009 2008 2007
INTERPRETATION
In the year 2009 Equity Dividend was Rs 0.00Crores while in 2008 it was Rs
17.39cr and in 2007 it was Rs 6.74crores .
18
16
14
12
10
8 Total Expenses
6
4
2
0
2009 2008 2007
INTERPRETATION
In the year 2009 Total Expenses was Rs 16.08Crores while in 2008 it was Rs
4.51cr and in 2007 it was Rs 0.92crores .
42
Year Rs. In Cr.
2009 3.97
2008 1.70
2007 3.10
4
3.5
3
2.5
2
Current Liabilities
1.5
1
0.5
0
2009 2008 2007
NTERPRETATION
In the year 2009 Current Liabilities was Rs 3.97Crores while in 2008 it was Rs
1.70cr and in 2007 it was Rs 3.10crores .
Miscellaneous Expenses of AEGON RELIGARE LIFE INSURANCE .
43
Year Rs. In Cr.
2009 2.07
2008 0.70
2007 0.14
2.5
1.5
Miscellaneous
1 Expenses
0.5
0
2009 2008 2007
INTERPRETATION
44
FINDINGS
Finding
45
• In the year 2009 Equity Share Capital of AEGON RELIGARE LIFE
INSURANCE was Rs. 101.29Crores while in 2008 it was 76.08and in
2007 it was 64.40crores .
• In the year 2009 Networth of AEGON RELIGARE LIFE INSURANCE
was Rs. 2,518.64Crores while in 2008 it was 481.32and in 2007 it was
288.29crores .
• In the year 2009 Investments of AEGON RELIGARE LIFE
INSURANCE was 2,023.55Crores while in 2008 it was 545.28and in
2007 it was 289.81crores .
• In the year 2009 Total Current Assets was (Rs) 1.28Crores while in
2008 it was Rs 1.13cr and in 2007 it was Rs 3.22crores .
• In the year 2009 Net Sales was Rs 12.55Crores while in 2008 it was Rs
31.85Cr and in 2007 it was Rs 15.38crores .
• In the year 2009 Equity Dividend was Rs 0.00Crores while in 2008 it
was Rs 17.39cr and in 2007 it was Rs 6.74crores .
• In the year 2009 Total Value Addition was Rs 16.08Crores while in
2008 it was Rs 4.51cr and in 2007 it was Rs 0.92crores .
• In the year 2009 Equity Dividend was Rs 0.00Crores while in 2008 it
was Rs 17.39cr and in 2007 it was Rs 6.74crores .
• In the year 2009 Total Expenses was Rs 16.08Crores while in 2008 it
was Rs 4.51cr and in 2007 it was Rs 0.92crores .
• In the year 2009 Current Liabilities was Rs 3.97Crores while in 2008 it
was Rs 1.70cr and in 2007 it was Rs 3.10crores .
• In the year 2009 Miscellaneous Expenses)was Rs 2.07Crores while in
2008 it was Rs 0.70cr and in 2007 it was Rs 0.14crores .
46
SUGGESTION
47
SUGGESTION
48
CONCLUSION
49
CONCLUSION:
50
BIBLIOGRAPHY
51
BIBLIOGRAPHY:
Books:
• Dr. S. N. Maheshwari, Financial Management, English Revised
Edition.
• M.Y. Khan and P. K. Jain, Financial Management,
• Ravi M. Kishore, Financial Management, 6th Edition.
• I.M. Pandey, Financial Management.
Website:
• http://www.AEGON RELIGARE LIFE INSURANCE.com
• http://www.google.com
• http://www.wikipedia.com
• http://www.scribd.com
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