analysis of profitibility and financial position of aviva life insurance

8/13/2019 ANALYSIS OF PROFITIBILITY AND FINANCIAL POSITION OF AVIVA LIFE INSURANCE

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SIP REPORT

ON

ANALYSIS OF PROFITIBILITY AND FINANCIAL

POSITION OF AVIVA LIFEINSURANCE

Submitted in partial fulfillment of requirement of Bachelor of

Business Administration (B.B.A) General

BBA V Semester (MORNING)

Batch 2011-2014

Submitted to: Submitted by:

Ms.Ahuti Bhargav Ishaan Dhasmana

Assistant. Professor 07014101711

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

KALKAJI, NEW DELHI


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ACKNOWLEDGEMENT

I am deeply indebted to Mr.Ishan Tanejafor his constant support, guidance and

inspiration in completion of the internship program and preparation of thisdocument.

My sincere thanks to him for finding time out of his busy schedule and giving us

invaluable suggestions. I am also grateful to other employee of Aviva Life

Insurance for their encouragement and help.

I would like to send my sincere thanks to Ms. Ahuti Bhargav for her helpful

hand in the completion of my project.

Last but not the least; I would like to thank my parents and friends for their moral

support throughout the project.

ISHAAN DHASMANA

(07014101711)


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DECLARATION

I, Ishan Dhasmana student of Bachelor of Business Administration fromJagannath International Management School, GGSIP University hereby

declare that I have completed Summer Internship project on ANALYSIS OF

PROFITIBILITY AND FINANCIAL POSITION OF AVIVA LIFE INSURANCE

as part of the course requirement.

I further declare that the information presented in this project is true and original

to the best of my knowledge.

Ms. AHUTI BHARGAV ISHAAN DHASMANA

(Assistant Professor) (07014101711)


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TABLE OF CONTENTS

EXECUTIVE SUMMARY 4

INTRODUCTION 5

OBJECTIVE OF STUDY 9

COMPANY PROFILE

HISTORY JOINT VENTURE COMPETITORS VISION&VALUES PARTNERS AVIVA GUIDING PRINCIPLES

11121415171621

LITERATUREREVIEW SWOT ANALYSIS DIRECTORS REPORT AUDITORS REPORT ACCOUNTING POLICIES

2327284146

RESEARCH METHODOLOGY

FINANCIAL STATEMENTS CREDIT RATING

CASH FLOW

50

535162

DATA ANAYLSIS 53

CONCLUSION 71

FINDINGS 72

LIMITATIONS 73

BIBLOGRAPHY

74


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EXECUTIVE SUMMARY

The project titled ANALYSIS OF PROFITIBILITY AND FINANCIAL POSITION

OF AVIVA LIFE INSURANCE Undertaken in AVIVA life insurance.

AVIVA is a UK based insurance group. It has a long history dating back to 1834

and has a joint venture with DABUR groups. Aviva holds a 26 per cent stake in

the joint venture and the Dabur group holds the balance 74 per cent share.

It is one of the leading providers of life and pensions products to Europe and

has substantial businesses elsewhere around the world.

The project report is about financial position process thats an important part of

any organization. Which is considered as a necessary asset of a company? In

fact, the financial position gives a home ground to the organization acumen that

is needed for proper functioning of the organization. It gives an organizational

structure of the company.

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.


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INTRODUCTION


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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.

Insurance under the British Raj

Life insurance in the modern form was first set up in India through a British

company called the Oriental Life Insurance Company in 1818 followed by the

Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance

Society in 1829. All of these companies operated in India but did not insure the

lives of Indians. They were there insuring the lives of Europeans living in India.

Some of the companies that started later did provide insurance for Indians. But,

they were treated as "substandard" and therefore had to pay an extra premium

of 20% or more. The first company that had policies that could be bought by

Indians with "fair value" was the Bombay Mutual Life Assurance Society starting


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in 1871.

The first general insurance company, Triton Insurance Company Ltd., was

established in 1850. It was owned and operated by the British. The first

indigenous general insurance company was the Indian Mercantile Insurance

Company Limited set up in Bombay in 1907. By 1938, the insurance market in

India was buzzing with 176 companies (both life and non-life). However, the

industry was plagued by fraud. Hence, a comprehensive set of regulations was

put in place to stem this problem. 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.

It was perceived that private companies would not promote insurance in ruralareas.

The Government would be in a better position to channel resources for

saving and investment by taking over the business of life insurance.

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.


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AN OVERVIEW OF INSURANCE INDUSTRY

Insurance has a long history in India. Life Insurance in its current form was

introduced in 1818 when Oriental Life Insurance Company began its operations

in India. General Insurance was however a comparatively late entrant in 1850

when Triton Insurance company set up its base in Kolkata. History of Insurance

in India can be broadly bifurcated into three eras: a) Pre Nationalization b)

Nationalization and c) Post Nationalization. Life Insurance was the first to

nationalize in 1956. Life Insurance Corporation of India was formed by

consolidating the operations of various insurance companies. General Insurance

followed suit and was nationalized in 1973. General Insurance Corporation of

India was set up as the controlling body with New India, United India, National

and Oriental as its subsidiaries. The process of opening up the insurance sector

was initiated against the background of Economic Reform process which

commenced from 1991. For this purpose Malhotra Committee was formed

during this year who submitted their report in 1994 and Insurance Regulatory

Development Act (IRDA) was passed in 1999. Resultantly Indian Insurance was

opened for private companies and Private Insurance Company effectively

started operations from 2001.


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OBJECTIVES


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OBJECTIVES

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.


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COMPANY PROFILE


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HISTORY

Aviva is UKs largest and the worlds fifth largest insurance Group. It is one of

the Leading providers of life and pensions products to Europe andhas substantial businesses elsewhere around the world. With a history dating

back to 1696, Aviva has a 40 million customer base worldwide. It has more

than 377 billion of assets under management.

In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest

Group of companies. A professionally managed company, Dabur is the country's

leading producer of traditional health care products.

In accordance with the government regulations Aviva holds a 26 per cent stake

in the joint venture and the Dabur group holds the balance 74 per cent share.

With a strong sales force of over 28,000 Financial Planning Advisers (FPAs),

Aviva has initiated an innovative and differentiated sales approach to the

business. Through the Financial Health Check (FHC) Avivas sales force has

been able to establish its credibility in the market. The FHC is a free service

administered by the FPAs for a need based analysis of the customers long term

savings and insurance needs. Depending on the life stage and earnings of the

customer, the FHC assesses and recommends the right insurance product for

them.

When Aviva entered the market, most companies were offering traditional life

products.

Aviva started by offering the more modern Unit Linked and Unitized with Profit

products to the customers, creating a unique differentiation. Avivas products

have been designed in a manner to provide customers flexibility, transparency

and value for money. It has been among the first companies to introduce the

more modern Unit Linked products in the market. Its products include: whole life


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(Lifelong), endowment (Lifesaver, Easy Life Plus, Lifesaver Plus), child policy

(Young Achiever, Save Guard Junior, Aviva Little Master) single premium (Life

Bond and Life Bond Plus), Pension (Pension Plus), Term (Life Shield), fixed

term protection plan (Freedom Life Plan) and a Tax efficient investment plan

with limited premium payment term (LifeBond5). Aviva Products are modern and

contemporary unitized products that offer unique customer Benefits like flexibility

to choose cover levels, indexation and partial withdrawals.

Aviva has 176 Branches in India (including rural branches) supporting its

distribution network. Through its Banc assurance partner locations, Aviva

products are available in close to 500 towns and cities across India.

Aviva is also keen to reach out to the underprivileged that have not had access

to Insurance so far. Through its association with Basix (a micro financial

institution) and otherNGOs, it has been able to reach the weaker sections of the

society and provide life insurance to them.

Aviva has been felicitated with the "Bronze Award for Excellence in People

Management" by Grow Talent Company Limited and Business world. This honor

is given to Aviva based on the ranks received in top 25 lists of the Great Place

to Work India studies conducted in the last four years.


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JOIN VENTURE

Dabur

Founded in 1884, Dabur is one of India's oldest and largest groups ofcompanies with consolidated annual turnover in excess of Rs 1,899 crores.

A professionally managed company, it is the country's leading producer of

traditional healthcare products.

Aviva

Aviva is UKs largest and the worlds fifth largest insurance Group. It is one of

the leading providers of life and pensions products to Europe and has

substantial businesses elsewhere around the world. With a history dating back

to 1696, Aviva has a 40 million customer base worldwide. It has more than

377 billion of assets under management.


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Competitors of Aviva life insurance

1. Life Insurance Corporation of India (LIC)

LIC is the largest and is popular with over 2048 branches all over India. LIC still remains the topwith new players entering with customized insurance products. It has gained credibility and

consumers trust that it is able to sustain the insurance business having estimated assets

worthRs.8 trillion

2. AIG Tata LIC Ltd

AIG Tata offers various insurance plans for everyone, children to senior citizens. This LIC is

a joint venture with the American International Group and Tata Group.

3. HDFC life Insurance Co. Ltd (Standard)

HDFC Life specializes in providing an array of solutions for individuals and groups. This is

a joint-venture between UK based Standard Life and HDFC Ltd, the leading

finance institution.

4. Birla Life Insurance Co. Ltd (Sun)

Birla is the only and first insurance company initiating insurance business in association with

Business Continuity Plan and helping small companies grow bigger. This is life insurance that is

collaboration between Sun Life Financial Inc and Aditya Birla Group.

5. SBI Life Insurance Co. Ltd

SBI Life Insurance makes highest profit and is the life insurance offering plans matching

different segments from urban to rural divisions.

6. ICICI Life Insurance Co. Ltd (Prudential)

ICICI Prudential Life Insurance is India's trusted private sector insurance company having

collaboration with UK based Prudential Group.


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7. Bajaj Allianz Life-Insurance Co. Ltd

Bajaj Allianz offers life and general insurances and is the largest insurers in the world.

8. Kotak Mahindra Old Mutual Life Insurance Limited

Kotak Mahindra is committed to offer investment-based policies identical to mutual funds and

ULIPs, to name a few.

9. Max New York Life Insurance Co. Ltd

Max New York Life Insurance offers outstanding combination covers. It has ISO:

9001:2000certifications.

10. Future Generali Life Insurance

Future Generali is offering comprehensive plans for groups and individuals and is becoming

more competitive.


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VISION

Aviva - where exceeding expectations through innovative solutions is "our" way of life.

This is the compelling vision that Aviva India has created through the active contribution of its

employees. These lines not only define the way they live and work but also serve as a reminder

to deliver the best to their customers, shareholders, colleagues, partners & employees at all

times.

Embedded in this vision are the core values of Integrity, Customer centricity, Passion for

winning, Innovation and Empowered team that they have collectively defined and committed to

working towards.

VALUES

Our values are integral to the way we conduct our business and shape the Experiences of our

clients and employees.

We value integrity, teamwork, innovation and performance. Integrity is the Cornerstone of our

business. Through global and local teams we innovate, And through our performance we

deliver results


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PARTNERS

Aviva has committed to help its customers get 'Kal par Control'and make the most out of

their lives. It is their constant endeavor to ensure that their customers have easy access toAVIVA products and services at all times.

Aviva has pioneered bancassurance in the country through its tie-ups with 22 leading private

and nationalized Banks in the country. It has 40 major partnerships with leading banks across

the globe.

ABN AMRO is a prominent international bank with European roots and a clear focus on

consumer and commercial banking gaining a competitive edge on the chosen markets and

client segments. Aviva's relationship with ABN India commenced in June 2002 under which the

bank introduces its customers to Aviva for insurance and provides access to its affluent

customer base across the country through its operations in 21 branches at 14 locations.

Aviva Life Insurance entered into a strategic alliance with American Expressfor distribution of

Life Insurance in June 2002 to offer top-of the line saving-cum-protection plans to Amex bank

and card customers.

Aviva offers tailor-made investment solutions to the high net worth clients of the Wealth

Management channel. The retail card segment is being tapped through outbound calling to the

Amex card holders. The American Express Inbound call centre also pitches Aviva products to

its callers.


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The Lakshmi Vilas Bank Ltd, based out of Karur, is among the top private banks in India. It

has 221 branches with a customer base of 1.2 million, across 10 states. Currently Aviva

products are sold across 204 branches of LVB.

Canara Bankis one of the largest retail banks in India with 2,513 branches spread across 25

States and 4 Union Territories. The customer base of Canara Bank exceeds 27 million. With a

net profit of INR 1110 Crores, deposits of over INR 96,908 Crores, 47389 employees for the

year ending Mar 2005, Canara Bank is truly a Bank to be reckoned with for the sheer

magnitude of coverage it offers its clients. Canara Bank has tied up with Aviva as a Corporate

Agent for its Life Insurance Products. Aviva products are currently offered in 1030 Canara Bank

branches in 103 Cities.

Punjab & Sind Bankwas established in the year 1908. Based on the principles of social

commitment to the people, help the farmers, and the weaker sections of the society to raise

their standard of living and play a significant role in the development of the country. Even after

96 years of its inception, Punjab & Sind Bank stands committed to honor the high ideals of its

founding fathers.


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Centurion Bank of Punjabis a new generation private sector bank offering a wide spectrum

of retail and corporate banking products and services. It has been among the earliest banks to

offer a technology-enabled customer interface that provides easy access and superior

customer service.

RBI has approved the merger between Centurion Bank and Bank of Punjab effective from

October 1st, 2005. The merged entity, named Centurion Bank of Punjab, has a strong

nationwide franchise of 241 branches and extension counters and 389 ATMs.


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AVIVA GUIDING PRINCIPLES

Recruit the best Accept personal

Build an empowered team

Building a shared vision and purpose

Leadership Development

Reward and Recognition

Recruit the best

Aviva India has a well-articulated equal opportunity policy, which lays strong emphasis on hiring

of individuals irrespective of age, race, caste or gender. As a best practice in recruitment, they

deploy identified psychometric tools such as SHL and Belbin and designate ability tests to

eliminate any biases in the resourcing process and facilitate hiring of diverse profiles (vis--vis

gender, background, experience levels and competencies). The focus is on competence-

based credentials rather than past experience or length of service.

Accept Personal Responsibility

Apart from professional development, AVIVA also looks after the personal development of

employees

They believe that dealing with diversity is an ongoing phenomenon that facilitates the process

for a Company to adapt to and capitalize on today's increasingly complex marketplace. Specific

action plans have been formulated to ensure the mandated gender ratio is achieved at the


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recruitment stage for a new position or through job enhancement/ job rotation opportunities for

existing roles.

Theorganization has tremendous respect for the individual - which it demonstrates by doing

what itsays

Build an Empowered Team

To institutionalize an open and honest environment with shared goals and participative

decision-making, they have various open forums, one such initiative being the Town Hall(s).

These are conducted on a monthly basis by the Managing Director and designate leadership

team members.

Build Shared Vision and Purpose

Youfeel as if you are part of the system when you are included in all the decisions being made

for your function.

As a Company, they encourage self-starters. Given their dynamic environment, one is

expected to deliver from day one. Somewhere between adjusting to the new environment,

About the facilities, infrastructure, processes, key people and dynamics of the Organization etc.

Information, which if provided on time can be very useful. This is how the Buddy

Programme was envisaged. Launched in July 2003, it addresses the need of a new

employee in terms of extending a friendly hand apart from the support provided by the Line and

HR managers. The objective is simple: To facilitate a seamless transition of the new hire into the

Aviva family.


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LITERATURE REVIEW


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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


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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.

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.

Reaching Out To Customers No doubt, the customer profile in the insurance

industry is changing with the introduction of large number of divergent

intermediaries such as brokers, corporate agents, and bancassurance.

The industry now deals with customers who know what they want and when,

and are more demanding in terms of better service and speedier responses.

With the industry all set to move to a detariffed regime by 2007, there will be

considerable improvement in customer service levels, product innovation and

newer standards of underwriting.

Intense Competition In a de-tariffed environment, competition will manifest


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itself in prices, products, underwriting criteria, innovative sales methods and

creditworthiness. Insurance companies will vie with each other to capture market

share through better pricing and client segmentation.

The battle has so far been fought in the big urban cities, but in the next few

years, increased competition will drive insurers to rural and semi-urban markets.

Global Standards While the world is eyeing India for growth and expansion,

Indiancompanies 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 in2006.

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.


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SWOT ANALYSIS

The SWOT analysis of Insurance sector is as follows:-

Strength-Very good policies of life coverage.

Weaknesses:-unable to convince the people about the products. There

are notmuch advisors for the insurance companies

Opportunities:-Untapped rural sector and small towns

Threats:-growing competition from larger MNC's.


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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 General 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 Meeting 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 Shyam sunder Gupta and Shri Sunil kumar Gupta had

resigned as Directors of the Company w.cf. 15-12-2007, 15- 12-2007 and 05-01-

2008 respectively.


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CONSERVATION OF ENRGY, TECHNOLOGY ABSORPTION,

FOREIGN EARNING & OUTGO:

The particulars prescribed by the Companies (Disclosure of Particulars in the

Report of Board of Directors) Rules, 1988 as to conservation of energy;

technology absorption is Not Applicable since project is yet to start. There is

no Foreign Exchange earnings and Outgo.

INSURANCE:

The company has made necessary arrangements for adequately insuring

interests in various properties.

DIRECTORS RESPONSIBILITY STATEMENT:

As required under section 217(2AA) of the Companies Act, 1956 yourDirectors state:

That in the preparation of the annual accounts, the applicable

accounting standards have been followed.

That the accounting policies selected and applied are consistent and the

judgments and estimates made are reasonable and prudent so as to give

a true and fair view of the state of affairs of the company at the end of the

financial year ended 31st March, 2008 and of the profit or loss of the

company for that period.

That proper and sufficient care has been taken for the maintenance of

adequate accounting records in accordance with the provisions of the

Companies Act, 1956 for safeguarding the assets of the company and

for preventing and detecting fraud and other irregularities.

That the annual accounts have been prepared on a going

concern basis.


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CORPORATE GOVERNANCE REPORT:

Your company is committed to maintain the highest standards of corporate

governance. Your Directors adhere to the requirements set out by the

Securities and Exchange Board of India in respect of Corporate Governance

Practices and have implemented all

stipulations prescribed, Report on Corporate Governance as stipulated under

clause 49 of the listing agreement with stock exchange is annexed which

forms part of the annual report. Certificate from Statutory Auditors, confirming

compliance of conditions of corporate governance as stipulated underaforesaid clause 49 is annexed to this report.

COMPLIANCE CERTIFICATE :

The Company has availed Secretarial Compliance Certificate for the under

review form the Practicing Company Secretary pursuant to the proviso of

section 383 A of the Companies Act, 1956 and a copy of the same is

attached with this report.

LISTING:

The shares of your company are listed on Bombay Stock Exchange. The

listing fees for the year 2008-09 have been paid to The Bombay Stock

Exchange Limited.

DEPOSITORY SYSTEM:

Your company has established electronic connectivity with the both the

depositories, NSDL & CDSL. In view of numerous advantages offered by the

depository system, members of the company are requested to avail the

facility of dematerialization of the companys shares on NSDL SCDSL.


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ACKOWLEDGEMENT:

The Directors place on record the appreciation and gratitude for the co-

operations and assistance extended by the Banks, Government etc. The

company will make all effort to meet the aspiration of its shareholders and

wish to sincerely thank them for their whole hearted co- operation and

support at all times.

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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. For this reason, they continue to

adopt the going concern basis in preparing the financial statements.

The Company is expected to continue to generate positive cash flows on its


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own account for the foreseeable future. The Company participates in the

Aviva Groups centralized treasury arrangements and so shares banking

arrangements with fellow subsidiaries.

The directors, having assessed the responses of the directors of a fellow

group company, Aviva International Insurance Limited, which maintains the

centralized arrangement, have no reason to believe that a material

uncertainty exists that may cast doubt about the ability to continue with the

current banking arrangements.

Financial Position and Performance

The financial position of the Company at 31 December 2009 is

shown in the statement of financial position shown below

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

Interim ordinary dividends of 340 million were declared and paid during

2009 (2008: 475 million). The directors do not recommend a final ordinarydividend for the year (2008: nil). The total cost of dividends paid during the

year, including preference dividends, amounted to 361million (2008: 567

million, including the2007 final dividend).

Directors interests


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None of the directors who held office at 31 December 2009 held any

interest in the Companys shares.

Authority to purchase own shares

At the Annual General Meeting held on 25 April 2006, shareholders renewed

the Companys authority to make market purchases of up to 140 million 8 7/8

% preference shares and up to 110 million 77/8 % preference shares. This

authority remains in place until 24 April 2011 but was not used in the year.

Creditor payment policy and practice

The Company has no trade creditors.

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.

Disclosure of Information to the Auditor

Each person who was a director of the Company on the date that this report

was approved, confirms that so far as the director is aware, there is no

relevant audit information, being information needed by the auditor in

connection with preparing his report, of which the auditor is unaware. Each


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director has taken all the steps that he ought to have taken as a director in

order to make himself aware of any relevant audit information and to

establish that the auditor is aware of that information.

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.

The Combined Code on Corporate Governance

The Company is a wholly-owned subsidiary of Aviva plc, a company listed

on the London Stock Exchange. The Combined Code on Corporate

Governance 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


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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 approvedby 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.


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Statement of Directors Responsibilities

The directors are required to prepare financial statements for each

accounting period that comply with the relevant provisions of the Companies

Act 1985, the Companies Act 2006 and International Financial ReportingStandards (IFRS) as adopted by the European Union (EU), and which

present fairly the financial position, financial performance and cash flows of

the Company at the end of the accounting period. A fair presentation of the

financial statements in accordance with IFRS requires the directors to:

select suitable accounting policies and verify they are applied

consistently in preparing the financial statements on a going concern

basis unless it is inappropriate to presume that the Company will

continue in business;

Present information, including accounting policies, in a manner that

provides relevant, reliable, comparable and understandable

information;

provide additional disclosures when compliance with the specific

requirements in IFRS is insufficient to enable users to understand the

impact of particular transactions, other events and conditions on the

Companys financial position and financial performance

The directors are responsiblefor maintaining proper accounting records which

are intended to disclose with reasonable accuracy, at any time, the financial

position of the Company. They are also ultimately responsible for the

systems of internal control maintained for safeguarding the assets of the

Company and for the prevention and detection of fraud and other

irregularities.


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Directors responsibility statement pursuant to theDisclosure and Transparency Rule 4

The directors confirm that, to the best of each persons knowledge:

The Company financial statements in this report, which have been

prepared in accordance with IFRS as adopted by the EU, International

Financial Reporting Interpretations Committees interpretations and those

parts of the Companies Act 2006 applicable to companies reporting under

IFRS, give a true and fair view of theassets, liabilities, financial position

and results of the Company; and

The directorsreport contained in this report includes a fair review

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.


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Independent auditors report to the members of GeneralAccident plc

We have audited the financial statements of General Accident plc for the year

ended 31 December 2009 which comprise the Accounting Policies, the Income

Statement, the Statement of Comprehensive Income, and the Statement of

Changes in Equity, the Statement of Financial Position, the Statement of Cash

Flows, and the related notes 1 to 10. The financial reporting framework that has

been applied in their preparation is applicable law and International Financial

Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the companys members, as a body, in accordance

with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been

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.

Respective responsibilities of directors and auditors

As explained more fully in the Directors Responsibilities Statement (set out

on page 6), the directors are responsible for the preparation of the financial

statements and for being satisfied that they give a true and fair view. Our

responsibility is to audit the financial statements in accordance with

applicable law and International Standards on Auditing (UK and Ireland).

Those standards require us to comply with the Auditing Practices Boards

Ethical Standards for Auditors.


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Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in

the financial statements sufficient to give reasonable assurance that the

financial statements are free from material misstatement, whether caused by

fraud or error. This includes an assessment of: whether the accounting

policies are appropriate to the companys circumstances and have been

consistently applied and adequately disclosed; the reasonableness of

significant accounting estimates made by the directors; and the overall

presentation of the financial statements.

Opinion on financial statements

In our opinion the financial statements:

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; have been properly

prepared in accordance with IFRSs as adopted by the European Union; and

have been prepared in accordance with the requirements of the Companies

Act 2006.

Opinion on other mat ters prescr ibed by the Comp anies Ac t

2006

In our opinion, the information given in the Directors Report for the financial

year for which the financial statements are prepared is consistent with the

financial statements.


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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 accountand 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 andperform 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 forour 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.


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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 this report are in agreement with the books of account.

iv) In pur opinion, the balance sheet, profit and loss account and cash

flow statement dealt with by this report comply with the accounting

standards referred to in sub ^section (3C) of section 211 of the

Companies Act, 1956.

v) On the basis of written representation received from the directors, as

on 31st March 2008 and taken on record by the Board of Directors,

we report that none of the directors Is disqualified as on 31st March

2008, from being appointed as a . director in teiius of clause (g) of sub

- section (1) of section 274 of the Companies Act, 1956

vi)In our opinion and to the best of our information and according to the

explanations given to us, the said accounts give the information

required by the Companies Act, 1956, in the manner so required and

give a true and fair view in conformity with the accounting principles

generally accepted in India.

in the case of the balance sheet, of the state of affairs of the company as

at 31st March 2008 . in the case 67 the profit and loss account, of the Loss for the year ended

on that date ; and

in the case of the cash flow statement, of the cash flows for the year

ended on that date.


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The company has maintained proper records showing full particulars,

including quantitative details and situation of fixed assets;

All the assets have not been physically verified by the management

during the year but there is a regular programme of verification which,

in our opinion, is reasonable having regard to the size of the company

and the nature of its assets. No material discrepancies were noticed to

such verification

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.

The inventory has been physically verified during the year by the

management. In our opinion the frequency of verification is reasonable.

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.

The company Is maintaining proper records of inventory. The

discrepancies noticed on verification between the physical stocks and

the books records were not material.

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.


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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 not observed any continuing

failure to correct major weaknesses in internal controls.

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.


us, the transactions made in pursuance of the contracts or arrangements

entered in the register maintained under section 301 of the Companies

Act, 1956 and exceeding the value of rupees five lacs In respect of any

party during the year have been. Made at. Prices which are reasonable

having regard to prevailing. market prices at the relevant time.


us, the company has complied with the provisions of sections 58A arid

58AA of the Companies Act;1956 and the Companies (acceptance of

Deposits) Rules, 1975.

In our opinion, the company has an internal control system

commensurate with the size and nature of its business.

Since this is being Trading unit, hence sec 209 (1) (d) of the Companies

Act, 1956 is not applicable.

The company is regular in depositing with appropriate authorities

undisputed statutory dues including income tax, sales tax, custom duty,

cuss and other material statutory dues applicable to it.


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According to the information and explanations given to us, no undisputed

amounts payable in respect income tax, wealth tax, sales tax, custom

duty, excise duty and cess were in arrears, as at 31st March, 2008 for a

period of more than six months from the date they became payable, other

than income tax for the immediate previous year.

According to the information and explanation given to us, there are no

dues of sale tax, customs duty, wealth tax, excise duty and cess, which

have not been deposited on account of any dispute.

The company has incurred cash losses during the financial year covered

by our audit and immediately preceding financial year and also company

has no accumulated losses.


us, the company has not defaulted in repayment of dues to a financial

institution, bank or debenture holders.

The company has not granted loans and advances on the basis of

security by way of a pledge of share, debentures and other securities.

The company is not a chit fund or a nidhi mutual benefit fund/society.

Therefore; the provisions of clause 4 of the Companies (Authors Report)

Order, 2003 are not applicable to the company.

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 applicable to the company.

In our opinion and informed by the management, the company has not

given guarantees for loans taken by others from banks or financial

institutions.


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In our opinion, the term loans have been applied for the purpose for

which they were raised.

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.

According to the information and explanations given to us, the company

has not made any allotment of preferential shares during the financial

year

.

The company has no issued and / or outstanding debentures at the end

of the year.

The company has not issued and raised money by public issues during

the year.

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

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ACCOUNTING POLICIES

General Accident plc (the Company) is a public limited company incorporated

and domiciled in the United Kingdom (UK). The following accounting policies

have been applied consistently in dealing with items which are considered

material in relation to the Companys financial statements.

GENERAL

The Financial Statements have generally been prepared on the historical

cost convention.Accounting policies not specifically referred to otherwise are in consonance

with generally accepted

BASIS OF ACCOUNTING

The company follows the mercantile system of accounting generally except

otherwise stated herein below.

FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation.

DEPRECIATION

Depreciation on fixed assets has been provided at the rates and in

accordance with the provisions of Schedule XIV of the Companies Act,1956

on SLM Method on days pro rata on basis of date put to use of the assets.

However, no depreciation has been charged on fixed assets during the year

and profit of the company has been affected adversely to that extent.


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INVENTORIES

The inventory has been valued at lower of cost or net relisable price, however

there is no closing stock at the

REVENUE AND EXPENDITURE RECOGNITION

Revenue Is recognized and expenditures is accounted for on their accrual

except claims in respect of goods purchased and sold & Insurance, which are

accounted for on cash basis.

INVESTMENT

Investments are valued at Cost. No provision has been made for depreciation

of the market value of the Investment.

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.

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 aregular 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.


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Cash and cash equivalents

Cash and cash equivalents consist of cash at banks and in hand.

Income taxes

The current tax expense is based on the taxable result for the year, after any

adjustments in respect of prior years. Tax, including tax relief for losses if

applicable, is allocated over profits before taxation and amounts charged or

credited to reserves as appropriate.

Provision is made for deferred tax liabilities, or credit taken for deferred tax

assets, using the liability method, on all material temporary differences between

the tax bases of assets and liabilities and their carrying amounts in the financial

statements. Deferred tax assets are recognized to the extent that it is probable

that future taxable profit will be available against which the temporary

differences can be utilized.

Share capital

Equity instruments

An equity instrument is a contract that evidences aresidual interest in the

assets of an entity after deducting all its liabilities. Accordingly, a financialinstrument is treated as equity if:

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 obligationto

deliver a variable number of shares, or is a derivative that will be settled only

by the Company exchanging a fixed amount of cash or other assets for a

fixed number of the Companys own equity instruments.

Dividends


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Dividends on ordinary shares are recognized in equity in the period in which

they are paid and, for the final dividend, approved byshareholders. Dividends

on preferenceshares are recognized in the period in which they are declared

and appropriately approved.


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RESEARCHMETHODOLOGY


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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.

Market Research Process

Defining the Research Problem

Selecting and Establishing Research Design

Select the Research Design

Identify Information types and Sources

Determining and Design Research Instrument

Collecting and Analyzing Data

Formulate Findings


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Method Adopting of Data Collection

There are two types of data collection technique. i.e.

Primary Data and

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

introductionpart. 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 ofbooks tocalculate the ratios and analyzing the financial statements like Profit &

Loss account and Balance sheet etc.


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FINANCIAL STATEMENT

Profit & loss Account, Balance Sheet and Key Ratio

of Aviva life insurance

Prof i t & Los s account of

Aviv a l i fe insu rance

------------------- in Rs. Cr. --------------- ----

Mar '05 Mar '06 Mar '07 Mar '08 Mar '0

12 mths 12 mths 12 mths 12 mths 12 mth

Income

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

Expenditure

Raw Materials 0.00 7.77 0.00 13.91 0.45

Power & Fuel Cost 0.00 0.30 0.00 0.00 0.00

Employee Cost 0.00 0.36 0.00 0.09 0.01

Other Manufacturing Expenses 0.00 1.59 0.00 0.00 0.00


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Selling and Admin Expenses 0.00 0.00 0.00 0.00 0.00

Miscellaneous Expenses 0.01 0.11 0.01 0.11 0.06

Preoperative Exp Capitalized 0.00 0.00 0.00 0.00 0.00

Total Expenses 0.01 10.13 0.01 14.110.52


12 mths 12 mths 12 mths 12 mths 12 mt

Operating Profit -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

Other Written Off 0.00 0.00 0.00 0.00 0.00

Profit Before Tax 0.04 0.06 0.03 0.13 -0.02

Extra-ordinary items 0.00 0.00 -0.01 0.00 0.00

PBT (Post Extra-ord Items) 0.04 0.06 0.02 0.13 -0.02

Tax 0.00 0.00 0.00 0.05 0.01

Reported Net Profit 0.04 0.06 0.03 0.07 -0.02

Total Value Addition 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

Corporate Dividend Tax 0.00 0.00 0.00 0.00 0.00

Per share data (annualized)

Shares in issue (lakhs) 15.00 14.99 14.99 14.99 14.99

Earning Per Share (Rs) 0.27 0.42 0.18 0.50 -0.12


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Equity Dividend (%) 0.00 0.00 0.00 0.00 0.00

Book Value (Rs) 11.73 12.16 12.34 30.99 30.87


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Balance Sheet of Av iva

l i fe insu rance

------------------- in Rs. Cr. -------------------


12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 1.50 1.50 1.50 1.50 1.50

Equity Share Capital 1.50 1.50 1.50 1.50 1.50

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 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


12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds


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Gross Block 0.13 0.13 0.13 0.80 0.69

Less: Accum. Depreciation 0.09 0.10 0.11 0.08 0.07

Net Block 0.04 0.03 0.02 0.72 0.62

Capital Work in Progress 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

Cash and Bank Balance 0.03 0.08 0.03 0.10 0.08

Total Current Assets 0.03 0.39 0.03 1.17 1.46

Loans and Advances 1.02 1.76 1.22 3.46 3.69

Fixed Deposits 0.00 0.00 0.00 0.00 0.00

Total CA, Loans & Advances 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

Total CL & Provisions 0.01 1.04 0.03 2.25 2.96

Net Current Assets 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

Book Value (Rs) 11.73 12.16 12.34 30.99 30.87


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Key Financial Ratios o f

Aviva. ------------------- in Rs. Cr. -------------------


Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00 10.00

Dividend Per Share -- -- -- -- --

Operating Profit Per Share (Rs) -0.07 0.12 -0.05 0.84 -0.27

Net Operating Profit Per Share (Rs) -- 67.70 -- 94.91 3.16

Free Reserves Per Share (Rs) -- -- -- -8.77 -9.00

Bonus in Equity Capital -- -- -- -- --

Profitability Ratios

Operating Profit Margin (%) -- -- -- -- --

Profit Before Interest And Tax Margin (%) -- -- -- -- --

Gross Profit Margin (%) -- -- -- -- --

Cash Profit Margin (%) -- -- -- -- --

Adjusted Cash Margin (%) 83.33 0.70 92.30 0.55 -3.67

Net Profit Margin (%) 66.66 0.61 52.42 0.52 -3.67

Adjusted Net Profit Margin (%) -- -- -- -- --

Return On Capital Employed (%) -- -- -- -- --

Return On Net Worth (%) 2.27 3.42 1.46 -- --

Adjusted Return on Net Worth (%) 2.27 3.42 2.18 2.28 -0.56

Return on Assets Excluding Revaluations 2.25 2.17 1.37 0.94 -0.22

Return on Assets Including Revaluations 2.25 2.17 1.37 0.94 -0.22

Return on Long Term Funds (%) 2.25 3.39 1.89 2.28 -0.21

Liquidity And Solvency Ratios

Current Ratio 105.00 2.05 37.47 2.06 1.73


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Quick Ratio 105.00 2.04 37.20 2.06 1.73

Debt Equity Ratio 0.01 -- 0.05 0.22 0.16

Long Term Debt Equity Ratio 0.01 -- 0.05 0.22 0.16

Debt Coverage Ratios

Interest Cover -- -- -- -- --

Total Debt to Owners Fund 0.01 -- 0.05 0.22 0.16

Financial Charges Coverage Ratio -- -- -- -- --

Financial Charges Coverage Ratio Post Tax -- -- -- -- --

Management Efficiency Ratios

Inventory Turnover Ratio -- -- -- -- --

Debtors Turnover Ratio -- 32.81 -- -- 0.39

Investments Turnover Ratio -- -- -- -- --

Fixed Assets Turnover Ratio -- 278.39 -- -- --

Total Assets Turnover Ratio -- -- -- -- --

Asset Turnover Ratio -- 75.58 -- 17.74 0.69

Average Raw Material Holding -- -- -- -- --

Average Finished Goods Held -- -- -- --

Number of Days In Working Capital -- 39.05 -- 60.42 1,654.04

Profit & Loss Account Ratios

Material Cost Composition -- 76.54 -- 97.76 94.37

Imported Composition of Raw Material Consumed -- -- -- -- --

Selling Distribution Cost Composition -- -- -- -- --

Expenses as Composition of Total Sales -- -- -- -- --

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit -- -- -- -- --

Dividend Payout Ratio Cash Profit -- -- -- -- --

Earning Retention Ratio 100.00 100.00 100.00 100.00 --

Cash Earning Retention Ratio 100.00 100.00 100.00 100.00 --

Adjusted Cash Flow Times 0.20 -- 1.84 12.95 --


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Earnings Per Share 0.27 0.42 0.18 0.50 -0.12

Book Value 11.73 12.16 12.34 30.99 30.87


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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 Moodys AM Best

Rating AA- Aa3 A

Description Very strong Excellent Excellent

Outlook Negative Negative Stable

Debt ratings

S&P Moody's AM Best

Senior (guaranteed) A A1 a-

Subordinated A-/BBB+ A3 bbb+

Direct capital instrument BBB+ Baa1 bbb

Commercial paper (guaranteed) A-1+ P-1 not rated

*Ratings as at 5 August 2009


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CASH FLOW

Cash Flow of Aviva Industries

Net Profit Before Tax

Net Cash From Operating Activities

Net Cash (used in)/from

Investing Activities

Net Cash (used in)/from Financing

ActivitiesNet (decrease)/increase In Cash and Cash

Equivalents

Opening Cash & Cash Equivalents

Closing Cash & Cash Equivalents

-------------------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


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DATA ANALYSIS


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DATA REPRESENTATION

Earnings per share

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.


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Debt Equity Ratio

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.


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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 slowlyrecovered but in the year 2008 and 2009 it was stagnant.


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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.


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Net Profit Margin (in %)

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.


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Operating Profit per Share

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.


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Return on equity shareholders' funds - %

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.


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Conclusion

As the project is to Analysis of Financial Position & Profitability of Aviva

Life Insurance and the main objective to understand the financial positionor 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.


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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 working capital requirement is highly.

By this project I found that the operating expenses are very high

due to recovery period from global slowdown.

I found that if company will focus on its liabilities so they can

overcome from the negative growth.

The cash flow statement shows its working.

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.


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Limitation

The data collection was little bit tough because latest data is not

available on the internet.

Finding the data of Insurance sector is very difficult.

Problem occurred due to lack of time and facility of internet.


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BIBLOGRAPHY

Articles

http://articles.economictimes.indiatimes.com/2013-08-

03/news/41034416_1_integrated-insurance -pharande-spaces-anil-

pharande

http://articles.timesofindia.indiatimes.com/2013-07-

08/internet/40442721_1_insurance companies market-sudhir-pai

http://articles.economictimes.indiatimes.com/2013-06-

24/news/40166820_1_slowdown-insurance-sector-dtz-india

Books

Malhotra, Naresh, FINANCIAL MANAGEMENT, 5thedition, Pearson

education, 2008

C.B. GUPTA, FINANCIAL MANAGEMENT, 3rd

edition, sultan and

sons, 2009.

P. SUBBA RAO, PERSONNEL AND HUMAN RESOURCE

MANAGEMENT, 2ndedition, Himalaya Publishing House

Websites

http://www.avivaindia.org/download/brouchre-March-220313.pdf

analysis of profitibility and financial position of aviva life insurance

Documents