Project Report On Aviva Company

Transcript

A PROJECT REPORT ON “ANALYSIS OF PROFITIBILITY AND FINANCIAL POSITION OF AVIVA LIFE INSURANCE” UNDER GUIDANCE 1 PREFACE A comprehensive study of “WORKING CAPITAL” is a supplement to the theoretical classroom knowledge. It helps to understand the subject more precisely and practical implications of various concepts. This report tries to outline idea of professional world and helps in understanding the pragmatic aspect of management function. Own observations are significant towards the contribution in learning the subject. The report is therefore designed as a reference of organization functioning rather than copy down instrument. THE PURPOSE OF PROJECT IS TO MAKE ME FAMILIAR WITH DAY TO DAY FUNCTIONING OF BUSINESS. THE PRESENT REPORT IS AN EFFORT IN THIS DIRECTION. My humble endeavor and motive in presenting the project report is to impart a balanced introduction and knowledge of Financial Analysis, which is an important integral part of financial management. It is hoped that this project will serve as supportive document to research worker as efforts has been tired to make this report an informative, stimulating, and self-explanatory. 2 ACKNOWLEDGMENT Nothing concrete can be achieved without an optimal combination inspiration and perspiration. No work can be accompanied without taken the guidance of experts. It is only critics from ingenious that help transform a product into a quality product. For this, I am grateful to Mr. RITESH AGARWAL for his constant encouragement and invaluable critical suggestions given during the review meetings. His timely advice and help proved his commitment and welfare of his students and the institute as a whole. Last but not the least, our sincere thanks to all the members who were a vital thrust to our thoughts and needs throughout the functions assigned to group to get done and prove our best. Finally thanks to others at KCMT, who put in numerous hours to make the intangible tangible ANKIT AGARWAL 3 CONTENT Certificate 1 Preface 2 Acknowledgement 3 Objective 5 Introduction 6 Company Profile 7 Literature & Review 12 Research Methodology 37 Financial Statements 39-41 Data Representation 49 Conclusion 56 Finding 57 Limitation 58 Bibliography 59 4 5 OBJECTIVE The main objective of this project is to understand the financial position of AVIVA LIFE INSURENCE and to know the impact of profitability on its market value. These are the primary and secondary objective if my project. With the help of this project I can understand that how I can analyses the financial statement of any company and what are the ratios any key indicators by which anyone can understand the financial status of company. Aviva Life Insurance India 6 It is a private insurance company formed from collaboration between the Aviva insurance group of UK and the Dabur group, one of India's oldest and top producers of traditional health care products. Aviva's products are meant to provide customers flexibility, transparency and value for money. To demonstrate our commitment to "One Aviva, twice the value" we are aiming to double earnings per share by 2012. This ambition is based on total IFRS return, including investment volatility and nonoperating items over the weighted average number of shares. COMPANY PROFILE 7 Aviva insurance group in UK with a history dating back to 1696, today stands as one of the leading provider of life and pension products to Europe and other parts of the world. The history of Aviva Life Insurance India starts at 1834 during nationalization when Aviva was the largest foreign insurance group in terms of the compensation paid by the Indian Government. In 1995 Aviva was the first foreign insurance company to start its representative office in India. At present in Aviva Life Insurance India, the Aviva group is a 26% share holder and the Dabur group holds 74% shares in the joint venture. The products of Aviva insurance group of India are: LifeLong LifeSaver or EasyLife Plus Young Achiever LifeBond and LifeBond Plus PensionPlus LifeShield Freedom LifePlan LifeBond5 The fund management operations of Aviva Life Insurance India are controlled from Mumbai and the fund options includes Unitized With-Profits Fund and four Unit Linked funds: Protector Fund - The fund comprises of debt securities in the range of 60-100%, equities in the range of 0-20% and money market and cash in the range of 0-20%. Secure Fund - The fund comprises of debt securities in the range of 50-100%, equities in the range of 0-20% and money market and cash in the range of 0-20%. Balanced Fund - The fund comprises of debt securities in the range of 50-90%, equities in the range of 0-45% and money market and cash in the range of 0-10%. 8 Growth Fund - The fund will comprise of debt securities in the range of 0-50%, equities in the range of 0-85% and money market and cash in the range of 0-20%. These funds provide investment security to the capital of the customers. Through their association with Basix (a micro financial institution) and other NGOs, Aviva Life Insurance India have been able to reach out to those underprivileged who had no access to insurances till day. In Aviva Life Insurance India, thus, by combining protection and long term savings the customers can safeguard and provide life products for their family with their changing needs. Aviva is the world’s fifth-largest insurance group and the largest insurance services provider in the UK. We are one of the leading providers of life and pension products in Europe and are actively growing our long-term savings businesses in Asia Pacific and the USA. Its main activities are long-term savings, fund management and general insurance . Vision: “One Aviva, twice the value”. By working together across our businesses, we will optimize our performance in the global marketplace and maximize the value we can generate for all our stakeholders. 9 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 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, 10 a comprehensive set of regulations was put in place to stem this problem (see Table 1). By 1956, there were 154 Indian insurance companies, 16 non-Indian insurance companies and 75 provident societies that were issuing life insurance policies. Most of these policies were cantered in the cities (especially around big cities like Bombay, Calcutta, Delhi and Madras). In 1956, the then finance minister S. D. Deshmukh announced nationalization of the life insurance business. Monopoly Raj The nationalization of life insurance was justified mainly on three counts. (1) It was perceived that private companies would not promote insurance in rural areas. (2) The Government would be in a better position to channel resources for saving and investment by taking over the business of life insurance. (3) Bankruptcies of life insurance companies had become a big problem (at the time of takeover, 25 insurance companies were already bankrupt and another 25 were on the verge of bankruptcy). The experience of the next four decades would temper these views. 11 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. 12 LITRATURE REVIEW Insurance Market- Present: The insurance sector was opened up for private participation four years ago. For years now, the private players are active in the liberalized environment. The insurance market have witnessed dynamic changes which includes presence of a fairly large number of insurers both life and non-life segment. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe. There are now 29 insurance companies operating in the Indian market – 14 private life insurers, nine private non-life insurers and six public sector companies. With many more joint ventures in the offing, the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in scenario. There is pressure from both within the country and outside on the Government to increase the Foreign Direct Investment (FDI) limit from the current 26% to 49%, which would help JV partners to bring in funds for expansion. There are opportunities in the pensions sector where regulations are being framed. Less than 10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first license for a standalone health company in the country as many more players wait to enter. The health insurance sector has tremendous growth potential, and as it matures and new players enter, product innovation and enhancement will increase. The deepening of the health database over time will also allow players to develop and price products for larger segments of society. State Insurers Continue To Dominate There may be room for many more players in a large underinsured market like India with a population of over one billion. But the reality is that the intense competition in the last five years has made it difficult for new entrants to keep pace with the leaders and thereby failing to make any impact in the market. 13 Also as the private sector controls over 26.18% of the life insurance market and over 26.53% of the non-life market, the public sector companies still call the shots. The country’s 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 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. 14 Global Standards While the world is eyeing India for growth and expansion, Indian companies are becoming increasingly world class. Take the case of LIC, which has set its sight on becoming a major global player following a Rs280-crore investment from the Indian government. The company now operates in Mauritius, Fiji, the UK, Sri Lanka, and Nepal and will soon start operations in Saudi Arabia. It also plans to venture into the African and Asia-Pacific regions in 2006. The year 2005 was a testing phase for the general insurance industry with a series of catastrophes hitting the Indian sub-continent. However, with robust reinsurance programs in place, insurers have successfully managed to tide over the crisis without any adverse impact on their balance sheets. With life insurance premiums being just 2.5% of GDP and general insurance premiums being 0.65% of GDP, the opportunities in the Indian market place is immense. The next five years will be challenging but those that can build scale and market share will survive and prosper. 15 SWOT ANALYSIS The SWOT analysis of Insurance sector is as follows:1. Strength-Very good policies of life coverage. 2. Weaknesses:-unable to convince the people about the products. There are not much advisors for the insurance companies 3. Oppourtunities:-Untapped rural sector and small towns 4. Threats:-growing competition from larger MNC's. 16 INDIAN COMPANIES WITH FOREIGN PARTNERSHIP Indian Partner International Partner Alpic Finance Allianz Holding, Germany Tata American Int. Group, US CK Birla Group Zurich Insurance, Switzerland ICICI Prudential, UK Sundaram Finance Winterthur Insurance, Switzerland Hindustan Times Commercial Union, UK Ranbaxy Cigna, US HDFC Standard Life, UK Bombay Dyeing General Accident, UK DCM Shriram Royal Sun Alliance, UK Dabur Group Allstate, US Kotak Mahindra Chubb, US Godrej J Rothschild, UK Sanmar Group Gio, Australia Cholamandalam Guardian Royal Exchange, UK SK Modi Group Legal & General, Australia 20th Century Finance Canada Life M A Chidambaram Met Life Vysya Bank ING 17 Directors Report REVIEW OF OPERATIONS: The turnover of the company during the year is Rs.50.28.Lacs compared to 1423.33 Lacs. Showing decrease by Rs.1373.05 Lacs from the corresponding year ended 31st March, 2007 due to fall in marketing conditions. FIXED DEPOSIT: The company has not accepted any fixed deposits during the year. AUDITORS: Auditors of the company M/s. J. P. Saboo & Co. Chartered Accountants of Surat, will retire at the conclusion of the ensuing 24th Annual Genera Meeting from the office of the Auditors and being eligible offer themselves for re-appointment from the end of the ensuing Annual General Meeting till the. conclusion of the next Annual General Meetin at a remuneration payable as may be decided. As required under the provisions of Section 224(lB),the Company has received certificate that the. appointment, if made shall be within the limits as set down in said section. DIRECTORS; In accordance with Article 116 of the Articles of Association of the company, Shri Jatin Gupta & Sbri Pawan Gupta retire by rotation and being eligible, offers himself fortheir re-appointment. The Board recommends their re-appointment Shri Mohan Gupta, Shri Shyamsunder Gupta and Shri Sunilkumar Gupta had resigned as Directors of the Company w.cf. 15-12-2007,15- 12-2007 and 05-01-2008 respectively. PARTICULARS OF EMPLOYEE : None of the employee is in receipt of remuneration as prescribed under Companies (Particulars of Employees) Rule, 1975 and hence information as required under section 217{2AA) read with Companies (Particulars of Employees) Rule, 1975 not provided herewith. 18 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 earning 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 your Directors state: 1. That in the preparation of the annual accounts, the applicable accounting standards have been followed. 2. 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. 3. 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. 4. That the annual accounts have been prepared on a going concern basis. 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 19 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 under aforesaid 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. 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. Find your favourite sections instantly with one swift search Stock recommendationsSmart stock picks to build a wealthy portfolio Chat with expertsReal time, personalised stock advice from experts Fund manager picksWhich stocks are favourites with fund managers? IPO CalendarCheck out all upcoming IPOs so you can keep your funds ready Commodity picksWhat positions should you take? Brokers recommend Investment reviewAre your investments beating the market? Find out now 20 Community buzzGet first hand price sensitive rumours on stocks Beginner's guide to investing in sharesScared of investing in shares? Don't be. We make it easy. Tax calculatorSee how the budget impacted your pocket. Going Concern As a consequence of the Company’s 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 own account for the foreseeable future. The Company participates in the Aviva Group’s 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 21 Interim ordinary dividends of £340 million were declared and paid during 2009 (2008: £475 million). The directors do not recommend a final ordinary dividend for the year (2008: £nil). The total cost of dividends paid during the year, including preference dividends, amounted to £361million (2008: £567 million, including the 2007 final dividend). Directors’ interests None of the directors who held office at 31 December 2009 held any interest in the Company’s shares. Authority to purchase own shares At the Annual General Meeting held on 25 April 2006, shareholders renewed the Company’s authority to make market purchases of up to 140 million 8 7/8 % preference shares and up to 110 million 7 7/8 % 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 Company’s 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 22 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 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 auditor’s 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 Board’s view that Aviva plc has been fully compliant throughout the accounting period with the provisions set down in Section 1 of the Combined Code, apart from a period during the year when the majority of the members of the Nomination Committee was not independent non-executive directors. This was due to the resignation of Nikesh Arora, a non-executive director, who resigned following his relocation to the United States. The Aviva plc Directors’ Report sets out details of how the Aviva group has applied the principles and complied with the provisions of the Combined Code during 2009. The Company has listed preference shares and the payment of dividends to the preference shareholders is reviewed by the Aviva plc Audit Committee and approved 23 by the directors of the Company. There are no other significant risks associated with the Company’s assets and liabilities, and the Company seeks to maintain sufficient funds to meet dividends payable on the preference shares as they fall due. 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 Reporting Standards (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 Company’s financial position and financial performance; and state that the Company has complied with applicable IFRS, subject to any material departures disclosed and explained in the financial statements. The directors are responsible for 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. 24 Directors’ responsibility statement pursuant to the Disclosure and Transparency Rule 4 The directors confirm that, to the best of each person’s knowledge: a) the Company financial statements in this report, which have been prepared in accordance with IFRS as adopted by the EU, International Financial Reporting Interpretations Committee’s interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS, give a true and fair view of the assets, liabilities, financial position and results of the Company; and b) the directors’ report 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. 25 Independent auditor’s report to the members of General Accident 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 company’s 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 company’s members those matters we are required to state to them in an auditor’s 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 company’s 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 Board’s Ethical Standards for Auditors. 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 company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the 26 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 company’s 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 matters prescribed by the Companies Act 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. 27 Auditor's Report 1. We have audited the attached balance sheet of AVIVA INDUSTRIES LIMITED, MUMBAI as at 31st March 2008, the profit and loss account and also the (cash flow statement) for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with.the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the financial statement. An audit also includes assessing the accounting principal used and significant estimates made by management, as well as evaluating the overall financial statement presentation: We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in term of sub - section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 . and 5 of the said Order. 4. Further to our comments in the Annexure referred to above, we report that. (i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit. (ii) In our opinion, proper books of account, as required by law have been kept by the company so far as appears from our examination of those books. (iii) The balance sheet, profit and loss account and cash flow statement dealt with by 28 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. (a) in the case of the balance sheet, of the state of affairs of the company as at 31st March 2008 . (b) in the case 67 the profit and loss account, of the Loss for the year ended on that date ; and (c) in the case of the cash flow statement, of the cash flows for the year ended on that date. Annexure referred to in paragraph 3 of our report of even date. (i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets; (b) 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 29 having regard to the size of the company and the nature of its assets. No material discrepancies were noticed to such verification (c) Some part of old fixed assets has been disposed off during the period. According to the information and explanations given to us, we are of the opinion that the sale of the said part of fixed assets has not affected the going concern status of the company. (ii) (a) The inventory has been physically verified during the year by the management. In our opinion the frequency of verification is reasonable. (b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) The company Is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the books records were not material. (iii) (a) The company has not granted/taken loans to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have notobserved any continuing failure to correct major weaknesses in internal controls. (v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been So entered. (b) In our opinion and according to the informations and explanations given to us, the 30 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. (vi) In our opinion and according to the information and explanations given to 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. vii) In our opinion, the company has an internal control system commensurate with the size and nature of its business. (viii) Since this is being Trading unit, hence sec 209 (1) (d) of the Companies Act, 1956 is not applicable. (ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, sales tax, custom duty, cess and other material statutory dues applicable to it. (b) 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. (c) 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. (x) 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. 31 (xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders. (xii) The company has not granted loans and advances on the basis of security by way of a pledge of share, debentures and other securities. (xiil) The company is not a chit fund or a nidhi mutual benefit fund/society. Therefore; the provisions of clause 4 (xiil) of the Companies (Authors Report) Order, 2003 are not applicable to the company. (xiv) The company is not dealing in or trading in shares, securities, debentures and other investments except as an investment. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not appllcable to the company. (xv) in our opinion and informed by the management, the company has not given guarantees for loans taken by others from banks or financial institutions. (xvi) In our opinion, the term loans have been applied for the purpose for which they were raised.?; (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short - term basis have been used for long - term investment. No long - term funds have been used to finance short - term assets except permanent working capital. (xviii) According to the information and explanations given to us, the company has not made any allotment of preferential shares during the financial year. 32 (xix) The company has no issued and / or outstanding debentures at the end of the year. (xx) The company has not issued and raised money by public issues during the year. (xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. Find your favourite sections instantly with one swift search Stock recommendationsSmart stock picks to build a wealthy portfolio Chat with expertsReal time, personalised stock advice from experts Fund manager picksWhich stocks are favourites with fund managers? IPO CalendarCheck out all upcoming IPOs so you can keep your funds ready Commodity picksWhat positions should you take? Brokers recommend Investment reviewAre your investments beating the market? Find out now Community buzzGet first hand price sensitive rumours on stocks Beginner's guide to investing in sharesScared of investing in shares? Don't be. We make it easy. 33 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 Company’s financial statements. 1. GENERAL i) The Financial Statements have generally been prepared on the historical cost convention. ii) Accounting policies not specifically referred to otherwise are in consonance with generally accepted 2. BASIS OF ACCOUNTING The company follows the mercantile system of accounting generally except otherwise stated herein below. 3. FIXED ASSETS Fixed Assets are stated at cost less accumulated depreciation. 4. DEPRECIATION a) 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 prorata on basis of date put to use of the assests. However, no depreciation has been charged on fixed assets during the year and profit of the company has been affected adversely to that extent. 34 5. INVENTORIES The inventory has been valued at lower of cost or net relisable price, however there is no closing stock at the 6. REVENUE AND EXPENDITURE RECOGNITION Revenue Is recognised and expendeiture is accounted for on their accrual except claims in respect of goods purchased and sold & Insurance, which are accounted for on cash basis. 7. INVESTMENT Investment are valued at Cost. No provision has been made for depreciation of the market value of the Investment. (A)Basis of presentation The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and applicable at 31 December 2009, and endorsed by the European Union. The date of transition to IFRS was 1 January 2004. (B)Use of estimates The preparation of financial statements requires the Company to make estimates and assumptions that affect items reported in the statement of financial position and income statement and the disclosure of contingent assets and liabilities at the date of the financial statements. Although these estimates are based on management’s best knowledge of current facts, circumstances and to, some extent, future events and actions, actual results ultimately may differ from those estimates, possibly significantly. 35 (C)Investment income Investment income consists of interest receivable for the year. Interest receivable is recognized as it accrues, taking into account the effective yield on the investment. (D)Financial instruments Loans to, or from other Aviva Group companies are recognized when cash is advanced to, or received from these companies. These loans are subsequently carried at amortized cost. The Company reviews the carrying value of loans on a regular basis. If the carrying value of the loan is greater than the recoverable amount, the carrying value is reduced through a charge to the income statement in the period of impairment. (E) Cash and cash equivalents Cash and cash equivalents consist of cash at banks and in hand. (F) 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. 36 (G) Share capital Equity instruments An equity instrument is a contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Accordingly, a financial instrument is treated as equity if: I. There is no contractual obligation to deliver cash or other financial assets or to exchange financial assets or liabilities on terms that may be unfavorable; and II. The instrument is a non-derivative that contains no contractual obligation to 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 Company’s own equity instruments. Dividends Dividends on ordinary shares are recognized in equity in the period in which they are paid and, for the final dividend, approved by shareholders. Dividends on preference shares are recognized in the period in which they are declared and appropriately approved. 37 Research Methodology Market research is the process of systematic gathering, recording and analyzing of data about customers, competitors and the market. Marketing research (also called consumer research) is a form of business research. It is a form of applied sociology which concentrates on understanding the behaviors, whims and preferences, of consumers in a market-based economy. Market research can help create a business plan, launch a new product or service, fine tune existing products and services, expand into new markets etc. It can be used to determine which portion of the population will purchase the product/service, based on variables like age, gender, location and income level. It can be found out what market characteristics your target market has. With market research companies can learn more about current and potential customers. The purpose of market research is to help companies make better business decisions about the development and marketing of new products and in the case of financial market research, it shows the company worthiness and position in front of people . 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 38 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 introduction part. We search some data from the website of company and search engine like Google. Books- Books are also helpful us for the data research. We have taken help of books to calculate the ratios and analyzing the financial statements like Profit & Loss account and Balance sheet etc. 39 FINANCIAL STATEMENT Profit & loss Account, Balance Sheet and Key Ratio of Aviva life insurance Profit & Loss account of Aviva life insurance ------------------- in Rs. Cr. ------------------Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 12 mths 12 mths 12 mths 12 mths 12 mths 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 40 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 14.11 0.52 Mar '0 Mar '06 Mar '07 Mar '08 Mar '09 12 mths 12 mths 12 mths 12 mths 12 mths 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 41 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 42 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 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 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 12 mths 12 mths 12 mths 12 mths 12 mths Application Of Funds 43 Balance Sheet of Aviva life insurance ------------------- in Rs. Cr. ------------------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 44 Key Financial Ratios of Aviva. ------------------- in Rs. Cr. ------------------Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 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 45 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 -- 46 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 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 47 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 Moody’s 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 aSubordinated 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 48 CASH FLOW Cash Flow of Aviva Industries ------------------- in Rs. Cr. ------------------Mar '03 Mar '04 Mar '08 12 mths 12 mths 12 mths Net Profit Before Tax 0.06 0.04 -0.01 Net Cash From Operating Activities 0.00 -0.18 0.18 Net Cash (used in)/from Investing Activities 0.06 0.04 0.06 Net Cash (used in)/from Financing Activities -0.01 0.09 -0.26 Net (decrease)/increase In Cash and Cash Equivalents 0.05 -0.04 -0.02 Opening Cash & Cash Equivalents 0.03 0.08 0.10 Closing Cash & Cash Equivalents 0.08 0.03 0.08 49 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. 50 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. 51 Quick Ratio Quick ratio shows also decline position it means that the ability to change current assets into money or liquidate power is declining because of market trends. The liquid assets are very few and they are not utilizing properly. As market down in year 2005 so its speedily declined after year 2006 its slowly recovered but in the year 2008 and 2009 it was stagnant. 52 Current Ratio The difference of current assets and current liabilities shows that ratio. As it shows that if working capital is high so liquidity of business is respectively high. By this graph I can understand the financial position of the company like in the year 2005 the ratio shows the good position but because of market slowdown it’s fluctuating and after 2008 it become stable. That shows that company is recovering its financial position. 53 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. 54 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. 55 Return on equity shareholders' funds - % The improvement in 2009 to 16.2% (2008: 11.0%) reflects the increase in the posttax MCEV operating result and the impact of lower opening equity shareholder's funds following falls in asset values in 2008. Return on equity shareholders' funds is calculated as after-tax operating return, before adjusting items, on opening equity shareholders' funds, including life profits on a market consistent embedded value (MCEV) basis. 56 Conclusion As the project is to Analysis of Financial Position & Profitability of Aviva Life Insurance and the main objective to understand the financial position or condition of company. After completing the project I know that how ability of management can perform work in difficult situation. Because during the recession they faced very bad condition but as India condition will improve they will also improve. As company is trying to reduce its expenses for earning good profit. 57 Finding By this project I found that company position is not that much good right now because of slowdown in year 2005-06 and that impacted a lot on company’s 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. 58 59 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. 60 Bibliography Books www.google.com www.moneycontrol.com http://www.moneycontrol.com/financials/avivaindustries/profit-loss/AI55 http://www.moneycontrol.com/financials/avivaindustries/balancesheet/ AI55 61 62