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PROJECT REPORTON

ANALYSIS OF PROFITIBILITY ANDFINANCIAL POSITION OF AVIVA LIFEINSURANCE

UNDER GUIDANCE

SUBMITTED BY

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PREFACEA comprehensive study of WORKING CAPITAL isa supplement to the theoreticalclassroom knowledge. It helps to understand thesubject more precisely and practicalimplications of various concepts.This report tries to outline idea of professional world

and helps in understanding the pragmaticaspect of management function. Own observationsare significant towards the contribution inlearning the subject. The report is thereforedesigned as a reference of organization functioningrather than copy down instrument.

THE PURPOSE OF PROJECT IS TO MAKE MEFAMILIAR WITH DAY TO DAYFUNCTIONING OF BUSINESS. THE PRESENTREPORT IS AN EFFORT IN THISDIRECTION.My humble endeavor and motive in presenting theproject report is to impart a balancedintroduction and knowledge of Financial Analysis,

which is an important integral part offinancial management.

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It is hoped that this project will serve as supportivedocument to research worker as efforts hasbeen tired to make this report an informative,stimulating, and self-explanatory.

2. ACKNOWLEDGMENT

Nothing concrete can be achieved without anoptimal combination inspiration and perspiration.No work can be accompanied without taken theguidance of experts. It is only critics fromingenious that help transform a product into a

quality product.For this, I am grateful to___________for hisconstant encouragement andinvaluable critical suggestions given during thereview meetings. His timely advice and helpproved his commitment and welfare of his students

and the institute as a whole.Last but not the least, our sincere thanks to all themembers who were a vital thrust to ourthoughts and needs throughout the functionsassigned 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

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3. CONTENT

Certificate 1

Preface 2Acknowledgement 3

Objective

Introduction 6

Company Profile 7

Literature & Review 12

Research Methodology 37Financial Statements 39

Data Representation 49

Conclusion 56

Finding 57

Limitation 58Bibliography 59

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OBJECTIVEThe main objective of this project is to understandthe financial position of AVIVALIFE INSURENCE and to know the impact ofprofitability on its market value. These

are the primary and secondary objective if myproject.With the help of this project I can understand thathow I can analyses the financialstatement of any company and what are the ratiosany key indicators by which anyonecan understand the financial status of company.

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Aviva Life Insurance IndiaIt is a private insurance company formed from

collaboration between the Avivainsurance group of UK and the Daburgroup, oneof India's oldest and top producers oftraditional health care products.Aviva's productsare meant to provide customersflexibility, transparency and value for money.

To demonstrate our commitment to "One Aviva,twice the value" we are aiming todouble earnings per share by 2012.

This ambition is based on total IFRS return,including investment volatility and nonoperatingitems over the weighted average number of shares.

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COMPANY PROFILE

Aviva insurance group in UK with a history datingback to 1696, today stands as oneof the leading provider of life and pension products

to Europe and other parts of theworld. The history ofAviva Life Insurance Indiastarts at 1834 during nationalizationwhen Aviva was the largest foreign insurance groupin terms of the compensation paidby the Indian Government. In 1995 Aviva was the

first foreign insurance company tostart its representative office in India. At present inAviva Life InsuranceIndia, the Aviva group is a 26% share holder andthe Daburgroup holds 74% shares inthe joint venture.

The products ofAviva insurance group of Indiaare:

LifeLong

LifeSaverorEasyLife Plus

Young Achiever

LifeBond and LifeBond Plus

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PensionPlus

LifeShield

Freedom LifePlanLifeBond5The fund management operations ofAviva LifeInsurance India are controlled fromMumbai and the fund options includes UnitizedWith-Profits Fund and fourUnit

Linked funds:Protector Fund - The fund comprises of debtsecurities in the range of 60-100%,equities in the range of 0-20% and money marketand 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 marketand cash in the range of 0-20%.

Balanced Fund - The fund comprises of debtsecurities in the range of 50-90%,equities in the range of 0-45% and money marketand cash in the range of 0-10%.8

Growth Fund - The fund will comprise of debtsecurities in the range of 0-50%,equities in the range of 0-85% and money marketand cash in the range of 0-20%.

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These funds provide investment security to thecapital of the customers.Through their association with Basix (a microfinancial institution) and otherNGOs, Aviva Life Insurance India have been ableto reach out to thoseunderprivileged who had no access to insurances tillday.

In Aviva Life Insurance India, thus, by combiningprotection and long term savingsthe customers can safeguard and provide lifeproducts for their family with theirchanging needs. Aviva is the worlds fifth-largestinsurance group and the largest

insurance services provider in the UK.We are one of the leading providers of life andpension products in Europe and areactively growing our long-term savings businessesin Asia Pacific and the USA. Its mainactivities are long-term savings, fund management

and general insurance.Vision: One Aviva, twice the value.By working together across our businesses, we willoptimize our performance in theglobal marketplace and maximize the value we cangenerate for all our stakeholders.

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INTRODUCTION

AN INTRODUCTION TO INSURANCE SECTOR ININDIAInsurance in India started without any regulation in

the Nineteenth Century. Itwas a typical story of a colonial era: a few Britishinsurance companies dominating themarket serving mostly large urban centres. After theindependence, it took a dramaticturn. Insurance was nationalized. First, the life

insurance companies were nationalized in

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1956, and then the general insurance business wasnationalized in 1972. Only in 1999private insurance companies have been allowedback into the business of insurance witha maximum of 26% of foreign holding. In whatfollows, we describe how and why ofregulation and deregulation. The entry of the StateBank of India with its proposal of

bank assurance brings a new dynamics in thegame. We study the collective experienceof the other countries in Asia already deregulatedtheir markets and have allowed foreigncompanies to participate. If the experience of theother countries is any guide, the

dominance of the Life Insurance Corporation andthe General Insurance Corporation isnot going to disappear any time soon.

Insurance under the British Raj

Life insurance in the modern form was first set up inIndia through a Britishcompany called the Oriental Life InsuranceCompany in 1818 followed by the BombayAssurance Company in 1823 and the MadrasEquitable Life Insurance Society in 1829.

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All of these companies operated in India but did notinsure the lives of Indians. Theywere there insuring the lives of Europeans living inIndia. Some of the companies thatstarted 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 "fairvalue" was the Bombay Mutual LifeAssurance Society starting in 1871.The first general insurance company, TritonInsurance Company Ltd., wasestablished in 1850. It was owned and operated by

the British. The first indigenousgeneral insurance company was the IndianMercantile Insurance Company Limited setup in Bombay in 1907. By 1938, the insurancemarket in India was buzzing with 176companies (both life and non-life). However, the

industry was plagued by fraud. Hence,10a comprehensive set of regulations was put in placeto stem this problem (see Table 1).By 1956, there were 154 Indian insurancecompanies, 16 non-Indian insurance

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companies and 75 provident societies that wereissuing life insurance policies. Most ofthese policies were cantered in the cities (especiallyaround big cities like Bombay,Calcutta, Delhi and Madras). In 1956, the thenfinance minister S. D. Deshmukhannounced nationalization of the life insurancebusiness.

Monopoly Raj

The nationalization of life insurance was justifiedmainly 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 tochannel resources for saving andinvestment by taking over the business of lifeinsurance.(3) Bankruptcies of life insurance companies had

become a big problem (at the time oftakeover, 25 insurance companies were alreadybankrupt and another 25 were on theverge of bankruptcy). The experience of the nextfour decades would temper theseviews.

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AN OVERVIEW OF INSURANCE INDUSTRY

Insurance has a long history in India. Life Insurancein its current form was introducedin 1818 when Oriental Life Insurance Company

began its operations in India. GeneralInsurance was however a comparatively late entrantin 1850 when Triton Insurancecompany set up its base in Kolkata. History ofInsurance in India can be broadlybifurcated into three eras: a) Pre Nationalization b)

Nationalization and c) Post

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Nationalization. Life Insurance was the first tonationalize in 1956. Life InsuranceCorporation of India was formed by consolidatingthe operations of various insurancecompanies. General Insurance followed suit andwas nationalized in 1973. GeneralInsurance Corporation of India was set up as thecontrolling body with New India,

United India, National and Oriental as itssubsidiaries. The process of opening up theinsurance sector was initiated against thebackground of Economic Reform processwhich commenced from 1991. For this purposeMalhotra Committee was formed during

this year who submitted their report in 1994 andInsurance Regulatory Development Act(IRDA) was passed in 1999. Resultantly IndianInsurance was opened for privatecompanies and Private Insurance Companyeffectively started operations from 2001.

LITRATURE REVIEW

Insurance Market- Present:The insurance sector was opened up for privateparticipation four years ago. For years

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now, the private players are active in the liberalizedenvironment. The insurance markethave witnessed dynamic changes which includespresence of a fairly large number ofinsurers both life and non-life segment. Most of theprivate insurance companies haveformed joint venture partnering well recognizedforeign players across the globe.

There are now 29 insurance companies operating inthe Indian market 14 private lifeinsurers, nine private non-life insurers and six publicsector companies. With many morejoint ventures in the offing, the insurance industry inIndia today stands at a crossroads

as competition intensifies and companies preparesurvival strategies in scenario.There is pressure from both within the country andoutside on the Government toincrease the Foreign Direct Investment (FDI) limitfrom the current 26% to 49%, which

would help JV partners to bring in funds forexpansion.There are opportunities in the pensions sectorwhere regulations are being framed. Lessthan 10 % of Indians above the age of 60 receivepensions. The IRDA has issued the

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first license for a standalone health company in thecountry as many more players waitto enter. The health insurance sector hastremendous growth potential, and as it maturesand new players enter, product innovation andenhancement will increase. Thedeepening of the health database over time will alsoallow players to develop and price

products for larger segments of society.

State Insurers Continue To DominateThere may be room for many moreplayers in a large underinsured market like Indiawith a population of over one billion.

But the reality is that the intense competition in thelast five years has made it difficultfor new entrants to keep pace with the leaders andthereby failing to make any impact inthe market.

Also as the private sector controls over 26.18% ofthe life insurance market and over26.53% of the non-life market, the public sectorcompanies still call the shots.The countrys largest life insurer, Life InsuranceCorporation of India (LIC), had a share

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of 74.82% in new business premium income inNovember 2005.Similarly, the four public-sector non-life insurersNew India Assurance, NationalInsurance, Oriental Insurance and United IndiaInsurance had a combined market shareof 73.47% as of October 2005. ICICI Prudential LifeInsurance Company continues to

lead the private sector with a 7.26% market share interms of fresh premium, whereasICICI Lombard General Insurance Company is theleader among the private non-lifeplayers with a 8.11% market share. ICICI Lombardhas focused on growing the market

for general insurance products and increasingpenetration within existing customersthrough product innovation and distribution.Reaching Out To Customers No doubt, thecustomer profile in the insuranceindustry is changing with the introduction of large

number of divergent intermediariessuch as brokers, corporate agents, andbancassurance.The industry now deals with customers who knowwhat they want and when, and aremore demanding in terms of better service and

speedier responses. With the industry all

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set to move to a detariffed regime by 2007, therewill be considerable improvement incustomer service levels, product innovation andnewer standards of underwriting.Intense Competition In a de-tariffed environment,competition will manifest itselfin prices, products, underwriting criteria, innovativesales methods and creditworthiness.

Insurance companies will vie with each other tocapture market share through betterpricing and client segmentation.The battle has so far been fought in the big urbancities, 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 andexpansion, Indian

companies are becoming increasingly world class.Take the case of LIC, which has setits sight on becoming a major global player followinga Rs280-crore investment fromthe Indian government. The company now operatesin Mauritius, Fiji, the UK, Sri

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Lanka, and Nepal and will soon start operations inSaudi Arabia. It also plans to ventureinto the African and Asia-Pacific regions in 2006.The year 2005 was a testing phase for the generalinsurance industry with a series ofcatastrophes hitting the Indian sub-continent.However, with robust reinsurance programs inplace, insurers have successfully

managed to tide over the crisis without any adverseimpact on their balance sheets.With life insurance premiums being just 2.5% ofGDP and general insurance premiumsbeing 0.65% of GDP, the opportunities in the Indianmarket place is immense. The next

five years will be challenging but those that canbuild scale and market share willsurvive and prosper.

SWOT ANALYSIS

The SWOT analysis of Insurance sector is asfollows:-1. Strength-Very good policies of life coverage.2. Weaknesses:-unable to convince the peopleabout the products. There are notmuch advisors for the insurance companies

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3. Oppourtunities:-Untapped rural sector and smalltowns4. Threats:-growing competition from larger MNC's.

INDIAN COMPANIES WITH FOREIGNPARTNERSHIP

Indian Partner International Partner

Alpic Finance Allianz Holding, GermanyTata American Int. Group, USCK Birla Group Zurich Insurance, SwitzerlandICICI Prudential, UKSundaram Finance Winterthur Insurance,Switzerland

Hindustan Times Commercial Union, UKRanbaxy Cigna, USHDFC Standard Life, UKBombay Dyeing General Accident, UKDCM Shriram Royal Sun Alliance, UKDabur Group Allstate, US

Kotak Mahindra Chubb, USGodrej J Rothschild, UKSanmar Group Gio, AustraliaCholamandalam Guardian Royal Exchange, UKSK Modi Group Legal & General, Australia20th Century Finance Canada Life

M A Chidambaram Met Life

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Vysya Bank ING

Directors Report

REVIEW OF OPERATIONS:The turnover of the company during the year isRs.50.28.Lacs compared to 1423.33Lacs. Showing decrease by Rs.1373.05 Lacs from

the corresponding year ended 31stMarch, 2007 due to fall in marketing conditions.FIXED DEPOSIT:The company has not accepted any fixed depositsduring the year.AUDITORS:

Auditors of the company M/s. J. P. Saboo & Co.Chartered Accountants of Surat, willretire at the conclusion of the ensuing 24th AnnualGenera Meeting from the office ofthe Auditors and being eligible offer themselves forre-appointment from the end of the

ensuing Annual General Meeting till the. conclusionof the next Annual General Meetinat a remuneration payable as may be decided. Asrequired under the provisions ofSection 224(lB),the Company has receivedcertificate that the. appointment, if made

shall be within the limits as set down in said section.

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DIRECTORS;In accordance with Article 116 of the Articles ofAssociation of the company, Shri JatinGupta & Sbri Pawan Gupta retire by rotation andbeing eligible, offers himself for-theirre-appointment. The Board recommends their re-appointment Shri Mohan Gupta, ShriShyamsunder Gupta and Shri Sunilkumar Gupta

had resigned as Directors of theCompany w.cf. 15-12-2007,15- 12-2007 and 05-01-2008 respectively.

PARTICULARS OF EMPLOYEE :None of the employee is in receipt of remunerationas prescribed under Companies(Particulars of Employees) Rule, 1975 and henceinformation as required under section217{2AA) read with Companies (Particulars of

Employees) Rule, 1975 not providedherewith.

CONSERVATION OF ENRGY, TECHNOLOGYABSORPTION, FOREIGNEARNING & OUTGO:

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The particulars prescribed by the Companies(Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988 as to conservationof energy; technology absorption isNot Applicable since project is yet to start. There isno Foreign Exchange earning andOutgo.INSURANCE:

The company has made necessary arrangementsfor adequately insuring interests invarious properties.

DIRECTORS RESPONSIBILITY STATEMENT:As required under section 217(2AA) of theCompanies 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 appliedare consistent and the judgmentsand estimates made are reasonable and prudent soas to give a true and fair view of thestate of affairs of the company at the end of the

financial year ended 31st March, 2008

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and of the profit or loss of the company for thatperiod.3. That proper and sufficient care has been takenfor the maintenance of adequateaccounting records in accordance with theprovisions of the Companies Act, 1956 forsafeguarding the assets of the company and forpreventing and detecting fraud and other

irregularities.4. That the annual accounts have been prepared ona going concern basis.

CORPORATE GOVERNANCE REPORT:Your company is committed to maintain the higheststandards of corporate governance.Your Directors adhere to the requirements set outby the Securities and Exchange Board

of India in respect of Corporate GovernancePractices and have implemented all19stipulations prescribed, Report on CorporateGovernance as stipulated under clause 49of the listing agreement with stock exchange is

annexed which forms part of the annual

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report. Certificate from Statutory Auditors,confirming compliance of conditions ofcorporate governance as stipulated under aforesaidclause 49 is annexed to this report.COMPLIANCE CERTIFICATE :The Company has availed Secretarial ComplianceCertificate for the under review formthe Practicing Company Secretary pursuant to the

proviso of section 383 A of theCompanies Act, 1956 and a copy of the same isattached with this report.LISTING:The shares of your company are listed on BombayStock Exchange. The listing fees for

the year 2008-09 have been paid to The BombayStock Exchange Limited.DEPOSITORY SYSTEM:Your company has established electronicconnectivity 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 thefacility of dematerialization of thecompanys shares on NSDL SCDSL.ACKOWLEDGEMENT;The Directors place on record the appreciation and

gratitude for the co-operations and

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assistance extended by the Banks, Government etc.The company will make all effort tomeet the aspiration of its shareholders and wish tosincerely thank them for their wholehearted co- operation and support at all times.Find your favourite sections instantly with one swiftsearch StockrecommendationsSmart stock picks to build a

wealthy portfolio Chat with expertsRealtime, personalised stock advice from experts Fundmanager picksWhich stocks arefavourites with fund managers? IPO CalendarCheckout all upcoming IPOs so you cankeep your funds ready Commodity picksWhat

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Don't be. We make it easy. TaxcalculatorSee how the budget impacted yourpocket.Going ConcernAs a consequence of the Companys considerablefinancial resources, the directors

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believe that the Company is well placed to manageits business risks successfullydespite the current uncertain economic outlook.After making enquiries, the directors have areasonable expectation that theCompany has adequate resources to continue inoperational existence for theforeseeable future. For this reason, they continue to

adopt the going concernbasis in preparing the financial statements.The Company is expected to continue to generatepositive cash flows on its ownaccount for the foreseeable future. The Companyparticipates in the Aviva

Groups centralized treasury arrangements and soshares banking arrangementswith fellow subsidiaries.The directors, having assessed the responses ofthe directors of a fellow groupcompany, Aviva International Insurance Limited,

which maintains the centralizedarrangement, have no reason to believe that amaterial uncertainty exists that maycast doubt about the ability to continue with thecurrent banking arrangements.

Financial Position and Performance

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The financial position of the Company at 31December 2009 is shown in thestatement of financial position shown below

Financial instrumentsThe business of the Company includes use offinancial instruments. Details of theCompany's risk management objectives and

policies and exposures to risk relating tofinancial instruments are set out in note 8 to thefinancial statements.

DividendsInterim ordinary dividends of 340 million weredeclared and paid during 2009(2008: 475 million). The directors do notrecommend a final ordinary dividend forthe year (2008: nil). The total cost of dividends

paid during the year, includingpreference dividends, amounted to 361million(2008: 567 million, including the2007 final dividend).DirectorsinterestsNone of the directors who held office at 31

December 2009 held any interest in the

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Companys shares.Authority to purchase own sharesAt the Annual General Meeting held on 25 April2006, shareholders renewedthe Companys authority to make market purchasesof 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 notused in the year.Creditor payment policy and practiceThe Company has no trade creditors.

Directors LiabilitiesAviva plc, the Companys parent, has granted anindemnity to the directorsagainst liability in respect of proceedings brought bythird parties, subject to theconditions set out in the Companies Act 1985. This

indemnity was granted in 2004and the provisions in the Company's Articles ofAssociation constitute "qualifyingthird party indemnities" for the purposes of sections309A to 309C of the CompaniesAct 1985. These qualifying third party indemnity

provisions remain in force as at the

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date of approving the Directors report by virtue ofthe transitional provisions to theCompanies Act 2006.

Disclosure of Information to the AuditorEach person who was a director of the Company onthe date that this report22

was approved, confirms that so far as the director isaware, there is norelevant audit information, being information neededby the auditor inconnection with preparing his report, of which theauditor is unaware. Each director

has taken all the steps that he ought to have takenas a director in order to makehimself aware of any relevant audit information andto establish that the auditor isaware of that information.

AuditorA resolution is to be proposed at the AnnualGeneral Meeting for the reappointmentof Ernst & Young LLP as auditor of the Company. Aresolution will also beproposed authorizing the directors to determine the

auditors remuneration.

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The Combined Code on Corporate GovernanceThe Company is a wholly-owned subsidiary of Avivaplc, a company listedon the London Stock Exchange. The CombinedCode on Corporate Governancesets out standards of good practice in the form ofprinciples and provisions on how

companies should be directed and controlled tofollow good governance practice.The Financial Services Authority requirescompanies listed in the UK to disclose, inrelation to Section 1 of the Combined Code, howthey have applied its principles and

whether they have complied wit its provisionsthroughout the accounting year.Where the provisions have not been complied withcompanies must provide anexplanation for this.It is the Boards view that Aviva plc has been fully

compliant throughout theaccounting period with the provisions set down inSection 1 of the CombinedCode, apart from a period during the year when themajority of the members of theNomination Committee was not independent non-

executive directors. This was due

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to the resignation of Nikesh Arora, a non-executivedirector, who resigned followinghis relocation to the United States. The Aviva plcDirectors Report setsout details of how the Aviva group has applied theprinciples and compliedwith the provisions of the Combined Code during2009.

The Company has listed preference shares and thepayment of dividends to thepreference shareholders is reviewed by the Avivaplc Audit Committee and approvedby the directors of the Company.

There are no other significant risks associated withthe Companys assets and liabilities, and theCompany seeks to maintain sufficientfunds to meet dividends payable on the preferenceshares as they fall due.

Statement ofDirectors ResponsibilitiesThe directors are required to prepare financialstatements for each accountingperiod that comply with the relevant provisions ofthe Companies Act 1985, theCompanies Act 2006 and International Financial

Reporting Standards (IFRS) as

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adopted by the European Union (EU), and whichpresent fairly the financialposition, financial performance and cash flows ofthe Company at the end of theaccounting period. A fair presentation of thefinancial statements in accordance withIFRS requires the directors to:

select suitable accounting policies and verify they

are appliedconsistently in preparing the financial statements ona going concern basis unlessit is inappropriate to presume that the Company willcontinue in business;

Present information, including accountingpolicies, in a manner thatprovides relevant, reliable, comparable andunderstandable information;

provide additional disclosures when compliance

with the specificrequirements in IFRS is insufficient to enable usersto understand the impact ofparticular transactions, other events and conditionson the Companys financialposition and financial performance; and

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state that the Company has complied withapplicable IFRS, subject

to any material departures disclosed and explainedin the financial statements.The directors are responsible for maintaining properaccounting records whichare intended to disclose with reasonable accuracy,at any time, the financial

position of the Company. They are also ultimatelyresponsible for the systems ofinternal control maintained for safeguarding theassets of the Company and for theprevention and detection of fraud and otherirregularities.

Directors responsibility statement pursuant tothe Disclosure andTransparency Rule 4The directors confirm that, to the best of eachpersons knowledge:a) the Company financial statements in this report,which have beenprepared in accordance with IFRS as adopted bythe EU, InternationalFinancial Reporting Interpretations Committeesinterpretations and thoseparts of the Companies Act 2006 applicable tocompanies reporting under

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IFRS, give a true and fair view of the assets,liabilities, financial positionand results of the Company; andb) the directors report contained in this reportincludes a fair reviewof the development and performance of thebusiness and the position of theCompany, together with a description of the

principal risks and uncertainties thatthey face.

Independent auditors report to the members of

General Accident plcWe have audited the financial statements ofGeneral Accident plc for the year ended31 December 2009 which comprise the AccountingPolicies, the Income Statement,the Statement of Comprehensive Income, and the

Statement of Changes in Equity,the Statement of Financial Position, the Statementof Cash Flows, and the relatednotes 1 to 10. The financial reporting framework thathas been applied in theirpreparation is applicable law and International

Financial Reporting Standards

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(IFRSs) as adopted by the European Union.This report is made solely to the companysmembers, as a body, in accordance withChapter 3 of Part 16 of the Companies Act 2006.Our audit work has beenundertaken so that we might state to the companysmembers those matters we arerequired to state to them in an auditors report and

for no other purpose. To thefullest extent permitted by law, we do not accept orassume responsibility to anyoneother than the company and the companysmembers as a body, for our audit work,for this report, or for the opinions we have formed.

Respective responsibilities of directors andauditorsAs explained more fully in the DirectorsResponsibilities Statement (set out on page6), the directors are responsible for the preparation

of the financial statements and forbeing satisfied that they give a true and fair view.Our responsibility is to audit thefinancial statements in accordance with applicablelaw and International Standardson Auditing (UK and Ireland). Those standards

require us to comply with the

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Auditing Practices Boards Ethical Standards forAuditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about theamounts and disclosures in thefinancial statements sufficient to give reasonableassurance that the financial

statements are free from material misstatement,whether caused by fraud or error.This includes an assessment of: whether theaccounting policies are appropriate tothe companys circumstances and have beenconsistently applied and adequately

disclosed; the reasonableness of significantaccounting estimates made by thedirectors; and the overall presentation of thefinancial 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 31December 2009 and of its profit for the year thenended;

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have been properly prepared in accordance withIFRSs as adopted by the

European Union; andhave been prepared in accordance with the

requirements of theCompanies Act 2006.

Opinion on other matters prescribed by theCompanies Act 2006

In our opinion, the information given in the DirectorsReport for the financial yearfor which the financial statements are prepared is

consistent with the financial statements.

Auditor's Report

1. We have audited the attached balance sheet ofAVIVA INDUSTRIES LIMITED,

MUMBAI as at 31st March 2008, the profit and lossaccount and also the (cash flowstatement) for the year ended on that date annexedthereto. These financial statementsare the responsibility of the companysmanagement. Our responsibility is to express an

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opinion on these financial statements based on ouraudit.

2. We conducted our audit in accordance with.theauditing standards generally acceptedin India. Those Standards require that we plan andperform the audit to obtain

reasonable assurance about whether the financialstatements are free of materialmisstatement. An audit includes examining, on atest basis, evidence supporting theamounts and disclosure in the financial statement.An audit also includes assessing the

accounting principal used and significant estimatesmade by management, as well asevaluating the overall financial statementpresentation: We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report)Order, 2003 issued by the CentralGovernment of India in term of sub - section (4A) ofsection 227 of the Companies Act,1956, we enclose in the Annexure a statement onthe matters specified in paragraphs 4 .

and 5 of the said Order.

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4. Further to our comments in the Annexure referredto above, we report that.

(i) We have obtained all the information andexplanations, which to the best of ourknowledge and belief were necessary for thepurposes of our audit.

(ii) In our opinion, proper books of account, asrequired by law have been kept by thecompany so far as appears from our examination ofthose books.

(iii) The balance sheet, profit and loss account and

cash flow statement dealt with bythis report are in agreement with the books ofaccount.

(iv) In pur opinion, the balance sheet, profit and lossaccount and cash flow statement

dealt with by this report comply with the accountingstandards referred to in sub^section (3C) of section 211 of the Companies Act,1956.(v) On the basis of written representation receivedfrom the directors, as on 31st March

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2008 and taken on record by the Board of Directors,we report that none of the directorsIs disqualified as on 31st March 2008, from beingappointed as a . director in teiius ofclause (g) of sub - section (1) of section 274 of theCompanies Act, 1956

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

and according to the explanationsgiven to us, the said accounts give the informationrequired by the Companies Act,1956, in the manner so required and give a true andfair view in conformity with theaccounting principles generally accepted in India.

(a) in the case of the balance sheet, of the state ofaffairs of the company as at 31stMarch 2008 .

(b) in the case 67 the profit and loss account, of the

Loss for the year ended on thatdate and

(c) in the case of the cash flow statement, of thecash flows for the year ended on thatdate.

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Annexure referred to in paragraph 3 of our report ofeven date.

(i) (a) The company has maintained proper recordsshowing full particulars, includingquantitative details and situation of fixed assets;

(b) All the assets have not been physically verified

by the management during the yearbut there is a regular programme of verificationwhich, in our opinion, is reasonablehaving regard to the size of the company and thenature of its assets. No materialdiscrepancies were noticed to such verification

(c) Some part of old fixed assets has been disposedoff during the period. According tothe information and explanations given to us, we areof the opinion that the sale of thesaid part of fixed assets has not affected the going

concern status of the company.

(ii) (a) The inventory has been physically verifiedduring the year by the management.In our opinion the frequency of verification isreasonable.

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(b) The procedures of physical verification ofinventories followed by the managementare reasonable and adequate in relation to the sizeof the company and the nature of itsbusiness.

(c) The company Is maintaining proper records ofinventory. The discrepancies noticed

on verification between the physical stocks and thebooks records were not material.

(iii) (a) The company has not granted/taken loansto/from companies, firms or otherparties listed in the register maintained under

section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the informationand explanations given to us, thereare adequate internal control procedurescommensurate with the size of the company and

the nature of its business with regard to purchasesof inventory, fixed assets and withregard to the sale of goods. During the course ofour audit, we have notobserved anycontinuing failure to correct major weaknesses ininternal controls.

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(v) (a) According to the information andexplanations given to us, we are of the opinionthat the transactions that need to be entered intothe register maintained under section301 of the Companies Act, 1956 have been Soentered.

(b) In our opinion and according to the informations

and explanations given to us, thetransactions made in pursuance of the contracts orarrangements entered in the registermaintained under section 301 of the CompaniesAct, 1956 and exceeding the value ofrupees five lacs In respect of any party during the

year have been.made at.prices whichare reasonable having regard to prevailing. marketprices at the relevant time.

(vi) In our opinion and according to the informationand explanations given to us, the

company has complied with the provisions ofsections 58A arid 58AA of the CompaniesAct;1956 and the Companies (acceptance ofDeposits) Rules, 1975.vii) In our opinion, the company has an internalcontrol system commensurate with the

size and nature of its business.

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(viii) Since this is being Trading unit, hence sec 209

(1) (d) of the Companies Act, 1956is not applicable.

(ix) (a) The company is regular in depositing withappropriate authorities undisputed

statutory dues including income tax, sales tax,custom duty, cess and other materialstatutory dues applicable to it.

(b) According to the information and explanationsgiven to us, no undisputed amounts

payable in respect income tax, wealth tax, sales tax,custom duty, excise duty and cesswere in arrears, as at 31st March, 2008 for a periodof more than six months from thedate they became payable, other than income taxfor the immediate previous year.

(c) According to the information and explanationgiven to us, there are no dues of saletax, customs duty, wealth tax, excise duty and cess,which have not been deposited onaccount of any dispute.

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(x) The company has incurred cash losses duringthe financial year covered by our auditand immediately preceding financial year and alsocompany has no accumulated losses.

(xi) In our opinion and according to the informationand explanations given to us, the

company has not defaulted in repayment of dues toa financial institution, bank ordebenture holders.

(xii) The company has not granted loans andadvances on the basis of security by way

of a pledge of share, debentures and othersecurities.

(xiil) The company is not a chit fund or a nidhimutual benefit fund/society. Therefore;the provisions of clause 4 (xiil) of the Companies

(Authors Report) Order, 2003 are notapplicable to the company.

(xiv) The company is not dealing in or trading inshares, securities, debentures andother investments except as an investment.

Accordingly, the provisions of clause 4 (xiv)

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of the Companies (Auditors Report) Order, 2003 arenot appllcable to the company.

(xv) in our opinion and informed by themanagement, the company has not givenguarantees for loans taken by others from banks orfinancial institutions.

(xvi) In our opinion, the term loans have beenapplied for the purpose for which theywere raised.?;(xvii) According to the information and explanationsgiven to us and on an overallexamination of the balance sheet of the company,

we report that the no funds raised onshort- term basis have been used for long- term investment. No long - term funds have beenused to finance short- term assets except permanent working capital.

(xviii) According to the information and explanationsgiven to us, the company has notmade any allotment of preferential shares during thefinancial year.

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(xix) The company has no issued and / oroutstanding debentures at the end of the year.

(xx) The company has not issued and raised moneyby public issues during the year.

(xxi) According to the information and explanationsgiven to us, no fraud on or by the

Company has been noticed or reported during thecourse of our audit. Find yourfavourite sections instantly with one swift searchStock recommendations Smart stockpicks to build a wealthy portfolio Chat with expertsReal time, personalised stock advice

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Accounting policiesGeneral Accident plc (the Company) is a publiclimited companyincorporated and domiciled in the United Kingdom(UK). The followingaccounting policies have been applied consistentlyin dealing with items whichare considered material in relation to the Companys

financial statements.

1. GENERALi) The Financial Statements have generally beenprepared on the historical costconvention.

ii) Accounting policies not specifically referred tootherwise are in consonance withgenerally accepted

2. BASIS OF ACCOUNTINGThe company follows the mercantile system of

accounting generally exceptotherwise stated herein below.

3. FIXED ASSETS

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Fixed Assets are stated at cost less accumulateddepreciation.

4. DEPRECIATIONa) Depreciation on fixed assets has been providedat the rates and in accordance withthe provisions of Schedule XIV of the CompaniesAct,1956 on SLM Method on days

prorata on basis of date put to use of the assests.However, no depreciation has beencharged on fixed assets during the year and profit ofthe company has been affectedadversely to that extent.

5. INVENTORIESThe inventory has been valued at lower of cost ornet relisable price, however thereis no closing stock at the

6. REVENUE AND EXPENDITURE RECOGNITION

Revenue Is recognised and expendeiture isaccounted for on their accrual exceptclaims in respect of goods purchased and sold &Insurance, which are accounted foron cash basis.

7. INVESTMENT

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Investment are valued at Cost. No provision hasbeen made for depreciation of themarket value of the Investment.

(A)Basis of presentationThe financial statements of the Company have beenprepared in accordancewith International Financial Reporting Standards

(IFRS) issued by theInternational Accounting Standards Board (IASB)and applicable at 31December 2009, and endorsed by the EuropeanUnion. The date of transition toIFRS was 1 January 2004.

(B)Use of estimatesThe preparation of financial statements requires theCompany to make estimates andassumptions that affect items reported in thestatement of financial position and

income statement and the disclosure of contingentassets and liabilities at the date ofthe financial statements. Although these estimatesare based on managementsbest knowledge of current facts, circumstances andto, some extent, future

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events and actions, actual results ultimately maydiffer from those estimates,possibly significantly.

(C)Investment incomeInvestment income consists of interest receivablefor the year. Interest receivable isrecognized as it accrues, taking into account the

effective yield on the investment.

(D)Financial instrumentsLoans to, or from other Aviva Group companies arerecognized when cash isadvanced to, or received from these companies.

These loans are subsequentlycarried at amortized cost. The Company reviews thecarrying value of loans on aregular basis. If the carrying value of the loan isgreater than the recoverable amount,the carrying value is reduced through a charge to

the income statement in the periodof impairment.

(E) Cash and cash equivalentsCash and cash equivalents consist of cash at banksand in hand.

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(F) Income taxesThe current tax expense is based on the taxableresult for the year, after anyadjustments in respect of prior years. Tax, includingtax relief for losses ifapplicable, is allocated over profits before taxationand amounts charged orcredited to reserves as appropriate.

Provision is made for deferred tax liabilities, orcredit taken for deferred taxassets, using the liability method, on all materialtemporary differences betweenthe tax bases of assets and liabilities and theircarrying amounts in the financial

statements. Deferred tax assets are recognized tothe extent that it is probable thatfuture taxable profit will be available against whichthe temporary differences can beutilized.

(G) Share capitalEquity instrumentsAn equity instrument is a contract that evidences aresidual interest in the

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assets of an entity after deducting all its liabilities.Accordingly, a financialinstrument is treated as equity if:I. There is no contractual obligation to deliver cashor other financialassets or to exchange financial assets or liabilitieson terms that may beunfavorable; and

II. The instrument is a non-derivative that containsno contractual obligationto deliver a variable number of shares, or is aderivative that will be settledonly by the Company exchanging a fixed amount ofcash or other assets for a

fixed number of the Companys own equityinstruments.

DividendsDividends on ordinary shares are recognized inequity in the period in which

they are paid and, for the final dividend, approvedby shareholders. Dividendson preference shares are recognized in the periodin which they are declaredand appropriately approved.

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Research Methodology

Market research is the process of systematicgathering, recording and analyzing ofdata about customers, competitors and themarket. Marketing research (also calledconsumer research) is a form of businessresearch. It is a form of applied sociology

which concentrates on understanding thebehaviors, whims and preferences, ofconsumers in a market-based economy. Marketresearch can help create a businessplan, launch a new product or service, fine tuneexisting products and services, expand

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into new markets etc. It can be used to determinewhich portion of the population willpurchase the product/service, based on variableslike age, gender, location and incomelevel. It can be found out what marketcharacteristics your target market has. Withmarket research companies can learn more aboutcurrent and potential customers.

The purpose of market research is to helpcompanies make better business decisionsabout the development and marketing of newproducts and in the case of financialmarket research, it shows the company worthinessand 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 InstrumentCollecting and Analyzing Data

Formulate Findings

Method Adopting of Data CollectionThere are two types of data collection technique. i.e.

Primary Data and

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Secondary Data.In my research project there is no need to collect

primary data. I want only secondarydata that I have been collected by different sources.Internet- From the internet we have take thehistories of companies for the introductionpart. We search some data from the website ofcompany and search engine like Google.

Books- Books are also helpful us for the dataresearch. We have taken help of books tocalculate the ratios and analyzing the financialstatements like Profit & Loss account andBalance sheet etc.

FINANCIAL STATEMENT

Profit & loss Account, Balance Sheet and KeyRatio of Avivalife insurance

Profit & Loss account of

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Aviva life insurance------------------- in Rs. Cr. -------------------Mar '05 Mar '06 Mar '07 Mar '08 Mar '0912 mths 12 mths 12 mths 12 mths 12 mthsIncomeSales Turnover 0.00 10.15 0.00 14.23 0.47Excise Duty 0.00 0.00 0.00 0.00 0.00Net Sales 0.00 10.15 0.00 14.23 0.47

Other Income 0.06 0.05 0.05 0.01 0.03Stock Adjustments 0.00 0.00 0.00 0.00 0.00Total Income 0.06 10.20 0.05 14.24 0.50ExpenditureRaw Materials 0.00 7.77 0.00 13.91 0.45Power & Fuel Cost 0.00 0.30 0.00 0.00 0.00

Employee Cost 0.00 0.36 0.00 0.09 0.01Other Manufacturing Expenses 0.00 1.59 0.00 0.000.0040Selling and Admin Expenses 0.00 0.00 0.00 0.000.00

Miscellaneous Expenses 0.01 0.11 0.01 0.11 0.06Preoperative Exp Capitalized 0.00 0.00 0.00 0.000.00Total Expenses 0.01 10.13 0.01 14.110.52Mar '0 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

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Operating Profit -0.01 0.02 -0.01 0.12 -0.05PBDIT 0.05 0.07 0.04 0.13 -0.02Interest 0.00 0.00 0.00 0.00 0.00PBDT 0.05 0.07 0.04 0.13 -0.02Depreciation 0.01 0.01 0.01 0.00 0.00Other Written Off 0.00 0.00 0.00 0.00 0.00Profit Before Tax 0.04 0.06 0.03 0.13 -0.02Extra-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 -0.02Tax 0.00 0.00 0.00 0.05 0.01Reported Net Profit 0.04 0.06 0.03 0.07 -0.02Total Value Addition 0.01 2.36 0.01 0.19 0.07Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 0.00 0.00 0.00 0.00 0.00Corporate Dividend Tax 0.00 0.00 0.00 0.00 0.00Per share data (annualized)Shares in issue (lakhs) 15.00 14.99 14.99 14.9914.99Earning Per Share (Rs) 0.27 0.42 0.18 0.50 -0.12

41Equity Dividend (%) 0.00 0.00 0.00 0.00 0.00Book Value (Rs) 11.73 12.16 12.34 30.99 30.8742Mar '05 Mar '06 Mar '07 Mar '08 Mar '0912 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

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Total Share Capital 1.50 1.50 1.50 1.50 1.50Equity Share Capital 1.50 1.50 1.50 1.50 1.50Share Application Money 0.00 0.00 0.00 0.00 0.00Preference Share Capital 0.00 0.00 0.00 0.00 0.00Reserves 0.26 0.32 0.35 3.15 3.13Revaluation Reserves 0.00 0.00 0.00 0.00 0.00Net worth 1.76 1.82 1.85 4.65 4.63Secured Loans 0.01 0.00 0.00 0.02 0.01

Unsecured Loans 0.00 0.00 0.09 1.00 0.75Total Debt 0.01 0.00 0.09 1.02 0.76Total Liabilities 1.77 1.82 1.94 5.67 5.39Mar '05 Mar '06 Mar '07 Mar '08 Mar '0912 mths 12 mths 12 mths 12 mths 12 mthsApplication Of Funds

43Balance Sheet of Avivalife insurance------------------- in Rs. Cr. -------------------Gross Block 0.13 0.13 0.13 0.80 0.69Less: Accum. Depreciation 0.09 0.10 0.11 0.08 0.07

Net Block 0.04 0.03 0.02 0.72 0.62Capital Work in Progress 0.00 0.00 0.00 0.00 0.00Investments 0.69 0.69 0.69 1.24 1.24Inventories 0.00 0.00 0.00 0.00 0.00Sundry Debtors 0.00 0.31 0.00 1.07 1.38Cash 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

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Loans and Advances 1.02 1.76 1.22 3.46 3.69Fixed Deposits 0.00 0.00 0.00 0.00 0.00Total CA, Loans & Advances 1.05 2.15 1.25 4.635.15Deffered Credit 0.00 0.00 0.00 0.00 0.00Current Liabilities 0.01 1.04 0.03 2.21 2.92Provisions 0.00 0.00 0.00 0.04 0.04Total CL & Provisions 0.01 1.04 0.03 2.25 2.96

Net Current Assets 1.04 1.11 1.22 2.38 2.19Miscellaneous Expenses 0.00 0.00 0.00 1.31 1.35Total Assets 1.77 1.83 1.93 5.65 5.40Contingent Liabilities 0.00 0.00 0.00 0.00 0.00Book Value (Rs) 11.73 12.16 12.34 30.99 30.8744

Key Financial Ratios ofAviva.------------------- in Rs. Cr. -------------------Mar '05 Mar '06 Mar '07 Mar '08 Mar '09Investment Valuation RatiosFace Value 10.00 10.00 10.00 10.00 10.00

Dividend Per Share -- -- -- -- --Operating Profit Per Share (Rs) -0.07 0.12 -0.050.84 -0.27Net Operating Profit Per Share (Rs) -- 67.70 --94.91 3.16Free Reserves Per Share (Rs) -- -- -- -8.77 -9.00

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

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Profitability RatiosOperating 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 -3.67Net 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 2.182.28 -0.56Return on Assets Excluding Revaluations 2.25 2.17

1.37 0.94 -0.22Return on Assets Including Revaluations 2.25 2.171.37 0.94 -0.22Return on Long Term Funds (%) 2.25 3.39 1.892.28 -0.21Liquidity And Solvency Ratios

Current Ratio 105.00 2.05 37.47 2.06 1.7345Quick Ratio 105.00 2.04 37.20 2.06 1.73Debt Equity Ratio 0.01 -- 0.05 0.22 0.16Long Term Debt Equity Ratio 0.01 -- 0.05 0.22 0.16Debt Coverage Ratios

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

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Total Debt to Owners Fund 0.01 -- 0.05 0.22 0.16Financial Charges Coverage Ratio -- -- -- -- --Financial Charges Coverage Ratio Post Tax -- -- -- -- --Management Efficiency RatiosInventory Turnover Ratio -- -- -- -- --Debtors Turnover Ratio -- 32.81 -- -- 0.39Investments Turnover Ratio -- -- -- -- --

Fixed Assets Turnover Ratio -- 278.39 -- -- --Total Assets Turnover Ratio -- -- -- -- --Asset Turnover Ratio -- 75.58 -- 17.74 0.69Average Raw Material Holding -- -- -- -- --Average Finished Goods Held -- -- -- --Number of Days In Working Capital -- 39.05 -- 60.42

1,654.04Profit & Loss Account RatiosMaterial Cost Composition -- 76.54 -- 97.76 94.37Imported Composition of Raw Material Consumed ---- -- -- --Selling Distribution Cost Composition -- -- -- -- --

Expenses as Composition of Total Sales -- -- -- -- --Cash Flow Indicator RatiosDividend Payout Ratio Net Profit -- -- -- -- --Dividend Payout Ratio Cash Profit -- -- -- -- --Earning Retention Ratio 100.00 100.00 100.00100.00 --

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Cash Earning Retention Ratio 100.00 100.00100.00 100.00 --Adjusted Cash Flow Times 0.20 -- 1.84 12.95 --46Mar '05 Mar '06 Mar '07 Mar '08 Mar '09Earnings Per Share 0.27 0.42 0.18 0.50 -0.12Book Value 11.73 12.16 12.34 30.99 30.8747

CREDIT RATINGAt Aviva we consider it important to keep customersand investors up to date withdevelopments affecting the Group. In this sectionwe show the Insurer Financial

Strength ratings of our core operating subsidiariesand the ratings of our long and shortterm debt.Insurer financial strengthS&P Moodys AM BestRatingAA- Aa3 A

Description Very strong Excellent ExcellentOutlook Negative Negative StableDebt ratingsS&P Moody's AM BestSenior (guaranteed)A A1 a-SubordinatedA-/BBB+ A3 bbb+

Direct capital instrument BBB+ Baa1 bbb

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Commercial paper (guaranteed)A-1+ P-1 notrated*Ratings as at 5 August 200948CASH FLOWCash Flow of Aviva Industries------------------- in Rs. Cr. -------------------Mar '03 Mar '04 Mar '08

12 mths 12 mths 12 mthsNet Profit Before Tax 0.06 0.04 -0.01Net Cash From Operating Activities 0.00 -0.18 0.18Net Cash (used in)/fromInvesting Activities 0.06 0.04 0.06Net Cash (used in)/from Financing

Activities-0.01 0.09 -0.26Net (decrease)/increase In Cash and CashEquivalents 0.05 -0.04 -0.02Opening Cash & Cash Equivalents 0.03 0.08 0.10Closing Cash & Cash Equivalents 0.08 0.03 0.08

DATA REPRESENTATIONEarnings per shareTheir IFRS earnings per share for 2009 were 37.8pence (2008: 36.8 pence loss). Thismainly reflects the improvement in financial markets

in 2009. Economic and investment

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return assumptions during the year were in line withour long-term expectations with apositive variance of 77 million (2008: 2,544million adverse).As condition of insurance market was very bad in2006 to 2008 mid after that itimproved a lot and from that graph we canunderstand that because of market slowdown

it happened.

Debt Equity RatioDebt equity ratio is also saying that it improved a lotfrom the year 2007 mid till 2008but after that because of return the have faced the

slowdown.

Quick RatioQuick ratio shows also decline position it means

that the ability to change current assetsinto money or liquidate power is declining becauseof market trends. The liquid assetsare very few and they are not utilizing properly. Asmarket down in year 2005 so itsspeedily declined after year 2006 its slowly

recovered but in the year 2008 and 2009 it

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was stagnant.

Current RatioThe difference of current assets and currentliabilities shows that ratio. As it shows thatif working capital is high so liquidity of business isrespectively high. By this graph Ican understand the financial position of thecompany like in the year 2005 the ratioshows the good position but because of marketslowdown its fluctuating and after 2008it become stable. That shows that company isrecovering its financial position.

Net Profit Margin (in %)In every graph we can see that position was veryfluctuating of the company, it isbecause market slowdown. In this graph I can saythat company is trying to recover the

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losses by reducing the indirect expenses. As in theyear 2008 and 2009 the position waslittle bit stable then other year.

Operating Profit per Share

Operating profit per share is decline very speedily, itis because after slowdown it

become tough to survive in that position and toovercome from this situation they needfund and the company can adjust fund only byreducing expense and taking help bybank or its shareholders. So here because ofexpense operating profit reduce per share

till the year 2009.

Return on equity shareholders' funds - %The improvement in 2009 to 16.2% (2008: 11.0%)reflects the increase in the post-taxMCEV operating result and the impact of lower

opening equity shareholder's fundsfollowing falls in asset values in 2008.Return on equity shareholders' funds is calculatedas after-tax operating return, beforeadjusting items, on opening equity shareholders'funds, including life profits on a market

consistent embedded value (MCEV) basis.

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ConclusionAs the project is to Analysis of Financial Position &Profitability of Aviva LifeInsurance and the main objective to understand thefinancial position or condition ofcompany. After completing the project I know thathow ability of management canperform work in difficult situation. Because duringthe recession they faced very badcondition but as India condition will improve they willalso improve. As company istrying to reduce its expenses for earning good profit.

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Finding

By this project I found that company position is notthat much good rightnow because of slowdown in year 2005-06 and thatimpacted a lot on companysratio.

The ratio like Current Ratio, Quick Ratio, Earning

par share, Return onCapital Employed or Shareholder Funds, OperatingProfit, Net Profit Margin andDebt-Equity Ratio are in decline position.

These ratios show that company is not utilizing itsfund properly and the

working capital requirement is highly.By this project I found that the operating expensesare very high due torecovery period from global slowdown.

I found that if company will focus on its liabilitiesso they can overcomefrom the negative growth.

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The cash flow statement shows its working.

The credit rating that the company got in year

2205 was very good. Butafter that recession it changed, here credit ratingplay very important role becausealmost 60% investors invest their money on thebasis of goodwill or credit ratingthat a company hold in the market.

Limitation

The data collection was little bit tough because

latest data is not available

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on the internet.

Finding the data of Insurance sector is very

difficult.Problem occurred due to lack of time and facility ofinternet.

BibliographyBooks

www.google.com

www.moneycontrol.com

http://www.moneycontrol.com/financials/avivaindustries/profit-loss/AI55

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http://www.moneycontrol.com/financials/avivaindustries/balancesheet/

AI55