Internship Report on Canteen Stores Department

Dear Students complete report is available. you could get softcopy only in Rs 500/- just email me at vuaccess@gmail.com

or contact me 03364220477

Final Projects on this topic are also available you could get by sending topic.

Internship Report of Masood Textile Mills Ltd

Dear students, complete report is available in Softcopy formart with page setting, heading, margin etc. you could get this report copy in your inbox only in Rs 500/- just email me at vuaccess@gmail.com

or contact via cell at 03364220477

Projects are also availble on Textile Companies. send your topic we will sent you project

Internship Report on Colony Textile Mills Limited

Dear students Internship report on Colony is available in soft copy excellent format with page setting. you can get softcopy only in Rs 500/- just email at vuaccess@gmail.com

or contact at 03364220477

Telenor Internship Report

Click here to Get Report

Internship Report on Ufone

Click here to get Report

Ufone Internship Report

Dear students Internship report on Ufone is available in soft copy excellent format. you can get softcopy only in Rs 500/- Further Following  Project are also available on Ufone company

1. Marketing project on Ufone
2. HRM Project on Ufone
3. Finance Project on Ufone
4. Product development project on Ufone
5. New proudct development project on Ufone
6. Finance report on Ufone
7. Project on Ufone about market Strategy
8. Comparision report on Ufone with Warid or Mobilink

Get all things you want. just email me at vuaccess@gmail.com
 or call +923364220447

BANK ALFALAH LIMITED: INTERNSHIP REPORT LATEST

Dear students, Complete report on  above topic is available in (softcopy)format, only in 500 Rs, if you want then email me at vuaccess@gmail.com

NBP CIVIL LINES, INTERNSHIP REPORT

Dear students, Complete report on nbp is available in (softcopy)format, only in 500 Rs, if you want then email me at vuaccess@gmail.com

INTERNSHIP REPORT ON ABL

Dear students, Complete report on ABL is available in (softcopy)format, only in 500 Rs, if you want then email me at vuaccess@gmail.com

INTERNSHIP REPORT ON HBL

Dear students, Complete report on hbl is available in (softcopy)format, only in 500 Rs, if you want then email me at vuaccess@gmail.com

MBA Internship Manual-aiou

MBA Internship Manual

Get prepared internship report of AIOU. email at vuaccess@gmail.com

or text me at +923364220477

Internship report-AIOU

Click to open

Allama iqbal open university aiou

Allama iqbal open university aiou

Click to open page


Dear students please click on the OLD POST to find more related post.

Aiou mba final report

Dear students tell us, your project or internship title, we will prepare your project, for more information email at vuaccess@gmail.com
 or call at +923364220477

Final Project on Unilever Brothers Pakistan

Final Project on Unilever Brothers Pakistan  is available, if you want softcopy, email me at vuaccess@gmail.com or message me at +923364220477

Final Project on Vision

Final Project on Vision  is available, if you want softcopy, email me at vuaccess@gmail.com or message me at +923364220477

Final Project on Externality

Final Project on Externality Final Project on Aquafina by Pepsi Pakistan Project is available, if you want softcopy, email me at vuaccess@gmail.com or message me at +923364220477

Final Project on Aquafina by Pepsi Pakistan

Final Project on Aquafina by Pepsi Pakistan Project is available, if you want softcopy, email me at vuaccess@gmail.com or message me at +923364220477

Solved papers of virtual university2010

Solved papers of virtual university

Solved assignments of aiou

Solved assignments of aiou

Aiou MBA PROJECTS, INTERNSHIP REPORT email us vuaccess@gmail.com

Apna Pirmahal

pakistani urdu newspaper,jang newspaper,nawaiwaqt pakistani newspaper,don pakistani newspaper,pakistani newspaper express,daily jang urdu newspaper,daily express urdu newspaper,daily khabrain urdu newspaper

Apna Pirmahal

pakistani urdu newspaper,jang newspaper,nawaiwaqt pakistani newspaper,don pakistani newspaper,pakistani newspaper express,daily jang urdu newspaper,daily express urdu newspaper,daily khabrain urdu newspaper

Project topics in Marketing

list of marketing project topics
finance project topics marketing
mba finance project topics

Mba, MBA Projects, mba notes, case studies, notes of management, presentation, BMS and MBA students, BMS projects, e-learning, mba degree, india, mba in india, youth, bank, bank po, bank po question papers, hr, human resources, Placem

We provide online educational services to the students community of  Pakistani  Universities
Students doing courses like MBA,BBA,BE,ME,BCA, MCA, BIT, MIT, B.Sc(IT), M.Sc(IT) etc or DOEACC O Level, A Level, B Level etc may get help from us.

All students may contact us for Complete Guidance/help for their Final Semester Project.

vuaccess@gmail.com

Marketing Project Topics

Customer Satisfaction Survey
Consumer Perception Survey
Service Quality Study
Service Blueprinting
Service Process Mapping – Back stage, on-stage
Improving service quality using service blueprinting
Competition Analysis
Service standards
Study on effectiveness of employee’s role in service delivery
Effectiveness of channels (distributors/ DSAs) in service delivery
Effectiveness of channels (on-line/ Internet) in service delivery
Customer Data Analysis
Study of Institutional markets
Effectiveness of promotion schemes
Measurement of Brand awareness and brand perception
Customer Loyalty study
Study of purchase influencing factors
Customer Profiling
Advertising effectiveness study
bcg matrix

iTBUGS Forums - Mba, MBA Projects, mba notes, case studies, notes of management, presentation, BMS and MBA students, BMS projects, e-learning, mba degree, india, mba in india, youth, bank, bank po, bank po question papers, hr, human resources, Placem

FIN619-Final Project-Finance vu

Dear Students We are professional for writing FIN619-Final Project-Finance on any topic, Please select your topic and discussed it through email

 

1. Liquidity and leverage Ratios’ Analysis
2. Profitability Ratios’ Analysis
3. Activity Ratios’ Analysis
4. Market Ratios’ Analysis
5. Cash Flow Ratios’ Analysis  

We are providing 100 % approval Guarantee  If you are interested then email at vuaccess@gmail.com

FIN619-Proposal for project

FIN619-Proposal for project

Please Select your topic

1. Liquidity and leverage Ratios’ Analysis
2. Profitability Ratios’ Analysis
3. Activity Ratios’ Analysis
4. Market Ratios’ Analysis
5. Cash Flow Ratios’ Analysis 
6. Ratio Analysis (Only for those students, who wish to work in banking sector)

Dear students we are professional for writing FIN619 final project proposal and project on any topics from the above list 2012 which are provided by the Virtual university of Pakistan on demand. We are providing 100 % Pass Guarantee, and 100 % money back Guarantee in case of any dis-satisfaction, therefore save your time and semester and take our service for writing FIN619 Project proposal and final project.

Note:-  (List of Contact # of previous students who have taken our service and have successfully passed the FIN619 course is also available)

Contact us

PROJECT REPORT ON MARKET POTENTIAL OF TATA AIG LIFE INSURANCE COMPANY

CHAPTER-1


INTRODUCTION

1

INDUSTRY PROFILE Insurance in India
The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. A brief history of the Insurance sector The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are:
• 1912: The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business.
• 1928: The Indian Insurance Companies Act enacted to enable the government to

collect statistical information about both life and non-life insurance businesses.
• 1938: Earlier legislation consolidated and amended to by the Insurance Act with

the objective of protecting the interests of the insuring public.
• 1956: 245 Indian and foreign insurers and provident societies taken over by the

central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,
• 1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are:

2

• 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact

all classes of general insurance business.
• 1957: General Insurance Council, a wing of the Insurance Association of India,

frames a Code of conduct for ensuring fair conduct and sound business practices.
• 1968: The Insurance Act amended to regulate investments and set minimum

solvency margins and the Tariff Advisory Committee set up.
• 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized

the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies’ viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

The Insurance Regulatory and Development Authority
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA’s online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered.

3

ROLE OF IRDA
Section 14 of IRFDA Act, 1999 lays down the duties, powers & functions of IRDA. The power & functions of the Authority shall include: 1. 2. Issue to the applicant a certificate of registration, renew, modify, Protection of the interests of the policy holders, insurable interest,

withdraw, suspend or cancel such registration. settlement of insurance claim, surrender value of policy & other terms & conditions of contracts of insurance. 3. 4. Specifying requisite qualifications, code of conduct, & practical training Calling for information from, undertaking inspection of, conducting for intermediary or insurance intermediaries & agents; enquiries & investigations including audit of the insurers, intermediaries, insurance intermediaries & other organizations connected with the insurance businnes; 5. Control & regulations of the rates, advantages, terms & conditions that may be offered by insurer in respect of general insurance business not so controlled & regulated by the Tariff Advisory Committee under the section 64U of the Insurance Act, 1938 (4 of 1938). 6. Adjudications of disputes between insurers & intermediaries or insurance intermediaries.

4

COMPANY PROFILE Tata AIG Life Insurance Ltd.
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Group’s pre-eminent leadership position in India and AIG’s global presence as one of the world’s leading international insurance and financial services organization. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 per cent. Tata AIG Life provides insurance solutions to individuals and corporates. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.

Company’s Mission
We focus on the needs of our customers and create confidence, trust and loyalty by offering a wide range of innovative insurance solutions. Strengthened by our commitment to professional management, we ensure the continued growth and advancement of our employees.

Company’s Vision
Tata AIG Life Insurance has a deep rooted commitment to improve the quality of life of its customers, employees and stakeholders. We aim to be the most preferred General Insurance Company. We do this by our efforts which strives to make Tata AIG Life Insurance a corporate with values. • Increase Customer Value. • Integrated efforts
5

The TATA Group

Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are USD 62.5 billion (around Rs. 251,543 crores), of which 61% was from business outside India. The Group’s Net Profit for 2007-08 is USD 5.4 billion (around Rs. 21,578 crores). The Group employs around 350,000 people worldwide. The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology, Engineering, Materials, Services, Energy, Consumer Products and Chemicals. The Group's 28 publicly listed enterprises have a combined market capitalisation of around $60 billion, among the highest among Indian business houses, and a shareholder base of 2.9 million. The major companies in the Group include Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels, Tata Teleservices and Tata Communications.

AIG Group

American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo.
6

SWOT ANALYSIS Strengths
•

Disciplined fund management - Years of experience in asset management, and a strong track record in managing funds.

•

Innovative - Known for being an innovator in providing world-class pragmatic financial solutions, with a constant focus on customization and flexibility

• •

Customer Satisfaction - A highly committed sales force, with customer satisfaction as the key driving force. Transparency in Services - Daily declaration of fund performances, regular performance benchmarking, well regulated asset management, and monthly newsletter on market updates.

Weaknesses• •

Employees – Less number of personnel Tata AIG Life Insurance employs around 4328 people in its various businesses and has 112 branches across 134 cities as compared to ICICI Prudential has 735 offices, 22 Bank assurance partners and over 2.4 lakh advisors therefore it should increase its offices.

•

Training Department – Tata AIG Life Insurance has a limited number of trainers in its branches, because of which advisors are not properly trained, so it should work on developing its training department.

Opportunities
• • India's economic development made it a most lucrative Insurance market in the world and post liberalisation the entry of foreign partners has been allowed. Life Insurance industry is growing at an unprecedent pace so to survive in the Industry they should analyse the emerging requirements of the policyholders / insurers and they are in the forefront in providing essential services and
7

introducing novel products. Thereby they can become niche specialists, who provide the right service to the right person in right time • The impact of Information Technology in Insurance business is being felt at an accelerating pace. In the initial years IT has been used more to execute back office functions like maintenance of accounts, reconciling broker accounts, client processing etc. With the advent of "database concepts", these functions are better integrated in an administrative efficiency. • The real evolution is however emerged out of Internet boom. The Internet has provided brand new distribution channels to the Insurers. The technology has enabled the Insurer to innovate new products, provide better customer service and deeper and wider insurance coverage to them. • In the present competitive scenario, a key differentiator is the professional customer service in terms of quality of advice on product choice along with policy servicing. Servicing focus is on enhancing the customer's experience and maximizing his convenience. This calls the effective CRM system, which eventually creates sustainable competitive advantage and enables to build long lasting relationship.

Threats
• Private and Foreign entrants in the Insurance Industry made others difficult to retain their market. Higher customer aspirations lead to new expectations and compel him to move towards the insurer who provides him the best service in time. It becomes less viable for them even to maintain the functional networks or competitive standards and services. • With the entry of private and foreign players in the Insurance business, people have got a lot of options to choose from. Radical changes are taking place in customer profile due to the changing life style and social perception, resulting in erosion of brand loyalty.
8

•

The conflict of IRDA and SEBI over certain products in recent time has made the survival tough for some crucial products of Life Insurance. Some guidelines has been changed like lock–in period, company’s margin, number of Life Advisers etc. which is making the operation of this industry very tough.

Market share of various Life Insurance Companies
•

LIC (Life Insurance Corporation of India) still remains the largest life insurance company accounting for 64% market share. Its share, however, has dropped from 74% a year before, mainly owing to entry of private players with innovative products and better sales force.

• ICICI Prudential Life Insurance Co Ltd is the biggest private life insurance

company in India. It experienced growth of 58% in new business premium, accounting for increase in market share to 8.93% in 2007-08 from 6.97% in 2006-07.
• Bajaj Allianz Life Insurance Co Ltd has reported a growth of 52% and its

market share went up to 6.98% in 2007-08 form 5.66% in 2006-07. The company ranked second (after LIC) in number of policies sold in 2007-08, with total market share of 7.36%.
• SBI Life Insurance Co Ltd in terms of new number of policies sold, the

company ranked 6th in 2007-08. New premium collection for the company was Rs 4,792.66 crore in 2007-08, an increase of 87% over last year.
• Reliance Life Insurance Co Ltd Total collected was Rs 2,792.76 crore and its

market share went up to 2.96% from 1.23% a year back. It now ranks 5th in new business premium and 4th in number of new policies sold in 2007-08.
• HDFC Standard Life Insurance Co Ltd with an income of Rs 2,680 crore in

FY2007-08, registering a year-on-year growth of 64%. Its market share is 2.88% and it ranks 6 th among the insurance companies and 5th amongst the private players.
9

•

Birla Sun Life Insurance Co Ltd market share of the company increased from 1.22% to 2.11% in 2007-08. The company moved to the 7th position in 2007-08 from 8the a year before, pushing down Max New York Life insurance company.

•

Max New York Life Insurance Co Ltd has reported growth of 73% in 2007-08. Total new business generated was Rs 641.83 crore as against Rs 387.51 crore. The company was pushed down to the 8th position from 7th in 2007-08.

•

Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2007-08, the company reported growth of 80%, moving from the 11th position to 9th. It captured a market share of 1.19% in 2007-08. Last year the company doubled its branch network to 150 from 74.

•

Aviva Life Insurance Company India Ltd ranking dropped to 10th in 2007-08 from 9th last year. It has presence in more than 3,000 locations across India via 221 branches and close to 40 bancassurance partnerships. Aviva Life Insurance plans to increase its capital base by Rs 344 crore. With the fresh investment, total paid-up capital of the insurer would go up to Rs 1,348.8 crore.

MAJOR COMPETITORS
PRIVATE PLAYERS IN INSURANCE SECTORS India still has low insurance penetration of 1.95 percent, 51st in the world. Despite the fact that India boosts a saving rate of around 25 percent, less than 5 percent is spent on insurance. The insurance landscape in India is undergoing major changes. Close to foreign competition since nationalization in 1956, the life insurance industry had been protected from competitive pressures. Now, with the reopening of the sector, several new players have entered the scene.

LIFE INSURANCE COMPANIES

10

S. No. 1.

Insurers

Foreign Partners Standard Life Assurance, UK New York Life, USA

Year of Operation 2000-01

HDFC Standard Life Insurance Co. Ltd.

2.

Max New York Life Insurance Co. Ltd.

2000-01

3.

ICICI-Prudential Life Insurance Co. Ltd.

Prudential , UK

2000-01

4.

Om Kotak Life Insurance Co. Ltd.

Old Mutual, South Africa

2001-02

5.

Birla Sun Life Insurance Co. Ltd.

Sun Life, Canada American International Assurance Co., USA BNP Paribas Assurance SA, France ING Insurance

2000-01

6.

Tata-AIG Life Insurance Co. Ltd.

2000-01

7.

SBI Life Insurance Co. Ltd.

2001-02

8.

ING Vysya Life Insurance Co. Ltd.

International B.V., Netherlands

2001-02

9.

Allianz Bajaj Life Insurance Co. Ltd.

Allianz, Germany

2001-02

10 . Metlife India Insurance Co. Ltd.

Metlife International Holdings Ltd., USA ---

2001-02

11 .

Reliance Life Insurance Co. Ltd. (Earlier AMP Sanmar Life Insurance Co. from

2001-02

11

S. No.

Insurers 3.1.2002 to 29.9.2005)

Foreign Partners

Year of Operation

12 . AVIVA

Aviva International Holdings Ltd., UK

2002-03

13 . Sahara Life Insurance Co. Ltd. --2004-05

14 . Shriram Life Insurance Co. Ltd. Sanlam, South Africa 2005-06

15 . Bharti AXA Life Insurance Co. Ltd. AXA Holdings, France 2006-07

16 .

Future Generali India Life Insurance Company Ltd.

Generali, Italy

2007-08

17 . IDBI Fortis Life Insurance Company Ltd. Fortis, Netherlands 2007-08

18 .

Canara HSBC OBC Life Insurance Company Ltd. Aegon Religare Life Insurance Company Ltd.

HSBC, UK

2008-09

19 .

Religare, Netherlands

2008-09
12

S. No.

Insurers

Foreign Partners

Year of Operation

20 . DLF Pramerica Life Insurance Co. Ltd.

Prudential of America, USA

2008-09

21 . Star Union Dai-ichi

Dai-ichi Mutual Life Insurance, Japan

2008-09

22 . India First life insurance company

Legal & General Middle East Limited, UK

2009-10

23 . Life Insurance Corporation of India --1956-57

13

Chapter 2 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
14

The research is carried on in a proper planned and systematic manner. This methodology includes:  Familiarization with the concept of insurance and its various terms.  Thorough study of the information collected.  Conclusions based on findings. The research methodology which is adopted to conduct this study are both qualitative as well as quantitative. Qualitative In order to identify the insurance needs of the Indian population with respect to their emotional, physical & financial conditions and to match the needs of the population with the products in hand require to conduct the qualitative study. Quantitative In order to understand the market segmentation of insurance products and to study the various factors which influence the purchase decision of insurance products require the quantitative study.

REVIEW OF LITERATURE
BACKGROUND OF THE PROBLEM The entire Insurance sector is divided into 2 broad categories: • • General Insurance Life Insurance

Further Life Insurance is sub-divided into two categories: • • TRADITIONAL INSURANCE PLANS ULIPS (Unit Linked Insurance Plans)

15

Traditional products are basically the term plans and the whole life plans, in which risk cover is the foremost objective of the customers. In case of term plans the sum assured is given to the nominee of the life to be insured in case of his death, there is no maturity claim, whereas in case of whole life some amount is paid after a certain period of time.

ULIPS were introduced couple of years back in the Indian market. These include the endowment policies and money back policies that have the investment benefit along with the risk cover i.e. the certain portion of the premium paid by the customer is used for the risk cover and rest is further invested in the funds offered by the company. So when the private players entered the market they decided to introduce market driven plans named ULIP which promised a very attractive return to the consumers. Birla Sun Life was the first company to establish the concept of ULIP. Though this concept was very attractive but still a number of policies got lapsed, then the private players came up with an idea of 3 years lock in period, so that number of policies lapsing could be reduced, which worked well. Now since the expectations of investors have increased who are investing their money, so the money flow in mutual funds and stock market has increased gradually because the returns are as high as 25% - 30%. But still Life Insurance is Safe Avenue while promising you good returns, this would be clear from the following points: • Returns in ULIPs are also as high as 25% - 30%, while it also gives life cover in case of mishappening such as death, disability, etc. • Risk in ULIPs is less as compared to mutual funds and stock market, as ULIPs offer different funds with different combinations of debt and equity. • Fund management fee in ULIPs is 1.25% as compared to the fee in mutual funds 2.5%. • The entire fund of the investor can be eroded under mutual fund if market crashes, but under ULIPs at least principle amount plus bank rate is guaranteed.
16

• • •

ULIPs provide insurance cover as well as good returns. Capital gains are not taxable under ULIPs. Most companies offering ULIPs provide a number of free switches to its investors, if they would like to switch their funds, but these switches are chargeable under mutual funds.

Most of the investors in the Indian market are not aware of these benefits of Life Insurance, but as the awareness is increasing more and more investors are joining this sector, resulting in increased turnover year over year.

OBJECTIVES OF THE STUDY
The objectives mark the right direction to carry out any study. So, the objectives of this study are as under: To learn and understand the market segmentation of insurance products.

 To identify the insurance needs of the Indian population with respect to their emotional, physical and financial conditions.  To study the various factors which influence the purchase of insurance products  To match the needs of the population with the products in hand or else design a new product.

RESEARCH DESIGN
DESCRIPTIVE RESEARCH
17

This study is based on a descriptive research design wherein the risks and returns associated with the various products have been studied and the reasons for customer perception regarding these products have been found out.

UNIVERSE
The areas of North and West Delhi are selected as the Universe to conduct this study.

SAMPLE DESIGN
As the research is based on analyzing the consumer preference among various investment avenues in the market such as stock market, mutual funds, life insurance, fixed deposited., for that a sample size of 100 was taken , which was picked up on random basis for the purpose of survey. Simple Random Sampling has been adopted to conduct this study.

SAMPLE UNIT
The sample unit considered for this study is Investor who invests in various avenues available in the market. The respondents have been selected from the Universe defined above.

SOURCES OF DATA COLLECTION:
Both the Primary and Secondary sources have been used to collect the desired data for the study. Primary data collection has been done through the means of:
• •

Questionnaires- In order to get the primary data, a close ended questionnaire has been design to conduct the study. Interviews- In addition to the questionnaire, some other relevant questions were also asked to get the information regarding their marked choices.

.

18

Secondary data: These include books, the internet, company brochures, product brochures, the company website, competitor’s websites etc, newspaper articles etc

DURATION
The study has been conducted in the duration of 7 Weeks which is as follows: Phase – I (3/06/10-08/06/10):- The first phase of training is all about the classroom training in which they told about the general concepts about the insurance. Phase – II (09/06/10-19/06/10):- The second phase of training is all about the company profile and different operations. Phase – III (19/06/10-30/06/10):- In the third phase market research was conducted. Phase – IV (1/07/10-11/07/10):- Fourth Phase is about the data analysis and its interpretation. Phase – IV (12/06/10-21/07/10):- Documentation was done in the final phase.

SAMPLE SIZE:
Total sample of 100 was selected which is as follows: West Delhi Area North Delhi Area 60 40

SCOPE OF THE STUDY
In the present scenario as our economy is growing and the per capita income is rising people at large have got more money with them to invest in the market, who according to their choice invest in share market, government bonds, life insurance, mutual funds, real estate. If a consumer chooses to invest in mutual funds there are 33 mutual fund companies, if one chooses to invest in stock market there are hundreds of companies listed on the stock exchange, if he chooses to invest in life insurance there are 16 companies present such as ICICI PRUDENTIAL., AVIVA LIFE INSURANCE, KOTAK LIFE INSURANCE, SBI LIFE INSURANCE, TATA AIG LIFE INSURANCE, LIC, BAJAJ ALLIANZ, etc.; so in order to study the consumer preferences, the various factors
19

that influence the buying behavior of a consumer buying life insurance, a sample of 100 was chosen from DELHI.

LIMITATIONS OF THE STUDY
By working on this project, a lot of knowledge about the insurance sector in INDIA has been gained. However, there were many limitations or problems that I faced while working on this project. The following are the limitations:
 Small Sample Size: The study was relied more on the primary data and the data

was collected from a small population of 100, therefore, the findings may not be applicable in their true sense when it is applied in general.
 Time Constraint: As the duration of internship was only 7 weeks, therefore, it

was very difficult to conduct the entire study about the vast insurance sector
 Small Universe: The study is restricted only to some areas of Delhi which

ignores the entire public in general
 Biased Responses: The answers of the customers could have been biased which

may affect the analysis of the study.

20

Chapter 3 CONCEPTUAL DISCUSSION

THEORY & CONCEPTS USED IN THE PROJECT

21

WHAT IS AN INVESTMENT? Investment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of interest, income {dividend}, or appreciation of the value of the instrument.It is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance no matter for households, firms, or governments. An investment involves the choice by an individual or an organization such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of generating returns over a period of time.

WHAT IS AN INSURANCE? GENERAL DEFINITION: In the words of John Magee, " Insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risks that attach to individuals. " FUNDAMENTAL DEFINITION: In the words of D.S.Hansell, “Insurance accumulated contributions of all parties participating in the Scheme. " CONTRACTUAL DEFINITION: In the words of Justice Tindall,"Insurance is a contract in which a sum of money is paid to the assured as consideration of insurer’s incurring the risk of paying a large sum upon a given contingency."

CHARACTERISTICS OF INSURANCE  Sharing of risks  Cooperative device  Evaluation of risk
22

 Payment on happening of a special event  The amount of payment depends on the nature of losses incurred.  Insurance is a plan, which spreads the risk and losses of few people among a large number of people.  The insurance plan is a plan in which the insured transfers his risk on the insurer.

FUNCTIONS OF INSURANCE PRIMARY FUNCTIONS
1. Provide protection: - Insurance cannot check the happening of the risk, but can

provide for the losses of risk.
2. Collective bearing of risk: - Insurance is a device to share the financial losses of

few among many others.
3. Assessment of risk: - Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk.
4. Provide Certainty: - Insurance is a device, which helps to change from

uncertainty to certainty. SECONDRY FUNCTIONS:
1. Prevention of losses: - Insurance cautions businessman and individuals to adopt

suitable device to prevent unfortunate consequences of risk by observing safety instructions.
2. Small capital to cover large risks: - Insurance relives the businessman from

security investment, by paying small amount of insurance against larger risks and uncertainty.

WHY WE NEED INSURANCE?
23

Premature Death 1 out of 4 people don’t reach the age of 60.  You are providing your family with a lifestyle.  This lifestyle is dependent on your continued income generating capability.  If this income were to stop unfortunately, how would your family meet its financial requirements?  My responsibility is to help you protect your family financially in event something unfortunate happens… Living too long 7 out of 10 people endure retirement instead of enjoying it.  Do you want financial independence post retirement?  Imagine living beyond your working years on a depleted income.  However, you would want to maintain your some living standards and be financially independent.  My responsibility is to help you secure a financially stable future post retirement. Children’s Future To get a premier MBA degree in year 2015 will cost Rs. 18lakh.  It is your responsibility to provide your children with best possible education they can have.  Do you want to compromise on their future? My responsibility is to help you build financial assets for your children’s future. DO I NEED INSURANCE? HUMAN LIFE CONCEPT Your life is your most valuable asset. This is easily proved if we were to assign a monetary value to your life; this value depends on your income- earning potential or your Human Life Value.
24

Your income supports your family. Helps them to get the most out of life. Month after month, year after year, you and your dependents live the best way you can use the money you earn. This money enables your household to run smoothly, your children to college, takes care of the medical bills, your vacations and helps maintain your lifestyle. On the basis of your income or earning potential, we can calculate your Human Life Value. A simple rule of thumb to compute it as follows: multiply your present annual income by the number of years until you plan to retire. This does not take in factors such as inflation or an increase in your income over time. Therefore, your Human Life Value is a great deal higher than the amount calculated above. What if an unfortunate incident happens in your life and you were unable to work? Your income would stop. Your family is then, at a risk of losing all your future income. The potential cost of losing your income is too great to ignore.

PROTECTING YOUR MOST VALUABLE ASSET If something were happen to you, here are a few possible ways of dealing with the financial implications: 1. Draw from your savings: But how long would the funds last? A lifetime of savings could be used up in a few months. 2. Borrow from others: Who will lend you the money? Even family and friends can only help to an extent. And anyway, this would only be a short-term solution. 3. Sell your assets: What price will you get for your assets? Would you like to sell your home? Your car? 4. Transfer the risk to an insurance company. We recommend that you transfer the risk to an insurance company. It’s cheaper, safer and smarter in the long run.
25

If you insure the risk, your money outflow is actually miniscule. For the sake of illustration, an annual premia payout of approx. Rs. 25 for 15 years guarantees your family will receive Rs. 1000 – if something happens to you in that situation a small price to pay for providing peace of mind to your family. A smaller sum is payable for transferring the risk of disability. Another advantage of transferring the risk is that you remove the uncertainty. So do take care to protect your most valuable asset…..your life!

WHAT ARE MUTUAL FUNDS?
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments and other securities. Mutual funds have a fund manager who invests the money on behalf of the investors by buying / selling stocks, bonds etc. It is a substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints. Benefits include professional money management, buying in small amounts and diversification. Mutual fund units are issued and redeemed by the Fund Management Company based on the fund's Net Asset Value (NAV), which is determined at the end of each trading session. NAV is calculated as the value of all the shares held by the fund, minus expenses, divided by the number of units issued. Mutual Funds are usually long term investment vehicle though there are some categories of mutual funds, such as money market mutual funds which are short term instruments. Currently, the worldwide value of all mutual funds totals more than $US 26 trillion. The United States leads with the number of mutual fund schemes. There are more than 8000 mutual fund schemes in the U.S.A. Comparatively, India has around 1000 mutual fund schemes, but this number has grown exponentially in the last few years. The Total Assets under Management in India of all Mutual funds put together touched
26

a peak of Rs. 5,44,535 crs. at the end of August 2008.

WHAT ARE GOVT. BONDS?
A bond is a debt investment in which an investor loans a certain amount of money, for a certain amount of time, with a certain interest rate, to a company. A government bond is a bond issued by a national government denominated in the country's own currency. Bonds issued by national governments in foreign currencies are normally referred to as sovereign bonds. The first ever government bond was issued by the English government in 1693 to raise money to fund a war against France. It was in the form of a tontine. Government bonds are usually referred to as risk-free bonds, because the government can raise taxes to redeem the bond at maturity. Some counter examples do exist where a government has defaulted on its domestic currency debt, such as Russia in 1998 (the "ruble crisis"), though this is very rare. As an example, in the US, Treasury securities are denominated in US dollars. In this instance, the term "risk-free" means free of credit risk. However, other risks still exist, such as currency risk for foreign investors (for example non-US investors of US Treasury securities would have received lower returns in 2004 because the value of the US dollar declined against most other currencies). Secondly, there is inflation risk, in that the principal repaid at maturity will have less purchasing power than anticipated if the inflation outturn is higher than expected. Many governments issue inflation-indexed bonds, which should protect investors against inflation risk.

WHAT ARE FIXED DEPOSITS?
Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on deposit earns a fixed rate of interest, according to the terms and conditions that govern the account. The actual amount of the fixed rate can be influenced by such factors at the type of currency
27

involved in the deposit, the duration set in place for the deposit, and the location where the deposit is made. Fixed deposits are a credible way to make a return on investment that is somewhat higher than a standard savings account. The use of fixed deposits can also be helpful when working with various types of currency. By establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it is possible to choose the type of currency involved in the deposit and lock in a rate of interest. If the choice of currency is a good one, this means the investor can enjoy a healthy fixed deposit currency rate for the duration of the deposit and earn more than with a standard fixed deposit strategy. However, going with an FCFD does contain a slightly higher amount of risk, since the funds deposited must be converted to the currency of choice and then converted back when the deposit is fulfilled. If the currency did not fare well in the interim, there is some chance of obtaining a loss, due to the changes in the rate of exchange from the time the fixed deposit was activated until the time the deposit is considered complete.

Chapter 4
28

DATA ANALYSIS & INTERPRETATION
DATA ANALYSIS
1. What is your age?
•

Less Than 20 20-30 SAMPLE SIZE 100 Less than 20 yr 20-30 yr 30-45yr Above 45 yrs TOTAL FREQUENCY 12 37 33 18 100

•
•

30-45 More Than 45 PERCENTAGE 12 37 33 18 100

•

29

less than 20

20-30

30-45

more than 45

18

12

37 33

Inference: It can be observed from the pie-chart that:
• • • •

12% of the investors are less than that of 20 years of age. 37% lie in the age group of 20-30 years as such investors are returns oriented and are risk takers. 33% lie in the age group of 30-45 years as these investors want safe products. Only 18% of the investors lie in the age group of more than 45 years. Such investors are risk averse.

2. What is your marital status? • Married • Unmarried

MARITAL STATUS SAMPLE SIZE 100 Married Unmarried TOTAL FREQUENCY 82 18 100 PERCENTAGE 82 14 100
30

m arried
18%

unm arried

82%

Inference- It can be seen from the pie-chart that:•

82% of the investors are married as they have dependents so they are more conscious towards the health and life of their family members.

•

18% of the investors are unmarried.

31

3.

What is your annual income? • • Less than 1,00,000 1,00,000-2,50,000 • • 2,50,000-5,00,000 More than 5,00,000

SAMPLE SIZE 100 Income less than 1 Lac 1-2.5 Lac 2.5- 5 More than 5 Lac TOTAL

FREQUENCY PERCENTAGE 15 36 40 9 100 15 36 40 9 100

less than 1lac

1-2.5 lac

2.5-5

more than 5

9%

15%

40% 36%

Inference- It can be derived from the pie-chart that • • • 15% of the investors are in the income group of less than 1 lac. 36% of the investors lie in the income slab of 1-2.5 lacs. 40% of the investors are in the income group of 2.5-5 lacs.
32

•

9% of the investors lie in the age group of more than 5 lacs.

4. Which Avenues do you prefer for investment? • • Stock Market Mutual funds SAMPLE SIZE 100 Stock Market Mutual Funds Govt. Bonds Fixed Deposit TOTAL • • FREQUENCY 37 22 32 9 100 Govt. Bonds Fixed deposit PERCENTAGE 37 22 32 9 100

stock market govt. bonds

m utual funds fixed deposit

9% 37%

32%

22%

Inferences- It can be inferred from the pie-chart that
•

37% of the investors invest in stock market due to its high returns capability and investors are risk takers as well. 22% of the investors invest in mutual funds as they are quite structured avenues, offer good returns and are safe too. 32% of the investors invest in govt. bonds as they are safe investment options and risk associated is less.
33

•
•

•

9% of the investors invest in fixed deposits as they are the traditional investment avenues.

5. Are you aware about the benefits of Insurance? • Yes • No

SAMPLE SIZE 100 Yes No TOTAL
yes

FREQUENCY 91 09 100
No

PERCENTAGE 91 09 100

9%

91%

Inference- It can be seen from the pie-chart that
•

91% of the investors are aware about the benefits of insurance.

•

7% of the investors are unaware of the benefits of insurance.

34

6. Are you and your family members insured? •
•

All members including you Only you

•

No

SAMPLE SIZE 100 All members including you Only you No one TOTAL

FREQUENCY 77 13 10 100

PERCENTAGE 77 13 10 100

35

all members including you

only you

no one

10% 13%

77%

Inference- It can be derived from the pie-chart that • •
•

77% of the investors have taken insurance plans for their family as well as themselves as they are concerned about their dependents. 13% of the investors have taken insurance plans for themselves only.
10% of the investors have neither taken insurance plans for their family nor for themselves.

7. If yes, from which company are you insured? • • LIC ICICI •
•

HDFC TATA AIG • OTHERS

36

SAMPLE SIZE 100 LIC ICICI HDFC TATA AIG Others Total

FREQUENCY 47 27 11 5 10 100

PERCENTAGE 47 27 11 5 10 100

LIC

ICICI

HDFC

TATA AIG

6% 12%

52% 30%

Inference- It can be observed from the pie-chart that
• • • •

47% of the investors invest in LIC insurance plans due to their good records of returns and safety. 27% the investors invest in ICICI as it holds a good record in private sector insurers and has a huge customer equity. 11% of the investors have taken insurance plans from HDFC due to their good experiences with it. 10% have taken plans from other insurance companies like birla sun life, SBI life

37

8. Which of the following features which affects your purchase? • • Brand Returns
•

EMI Time Period

•

SAMPLE SIZE 100 Brand EMI Returns Time period TOTAL

FREQUENCY 32 08 43 17 100

PERCENTAGE 32 08 43 17 100

brand

Emi

returns

time period

17%

32%

43%

8%

Inference- It can be seen from the pie-chart that
•

32% of the investors are affected by the brand image of the company in the

market as it reflects their past performances as well.
38

• •
•

8% of the investors are affected by EMIs that is demanded by the plan. 43% are concerned with the returns offered by the plan. 17% are concerned with the tenure of the plans.

39

9. What is the annual premium you are paying? • • 5000-10000 10000-25000 SAMPLE SIZE 100 5000-10000 10000-25000 25000-50000 Above 50000 TOTAL • • FREQUENCY 09 36 38 17 100 25000-50000 Above 50000 PERCENTAGE 9 36 38 17 100

5000-10000

10000-25000

25000-50000

17%

9%

Above 50000

36%

38%

Inference- It can be seen from the pie-chart that • • • • 9% of the investors pay an annual premium between Rs.5000-10000. 36% pay an annual premium in the range of Rs.10000-25000. 38% pay an annual premium of Rs.25000-50000. 17% of the investors pay an annual premium above Rs.50000.
40

Q10.Which type of plan you prefer now? • • Traditional plans ULIPs SAMPLE SIZE 100 Traditional ULIPs TOTAL FREQUENCY 12 88 100 PERCENTAGE 12 88 100

Traditional

ULIP

12%

88%

Inference: It can be observed from the pie-chart that
• •

88% of the investors prefer ULIPs over Traditional plans due to several benefits they offer. 12% of the investors still prefer Traditional plans over ULIPs due to unawareness about the products and its benefits.

41

11. If your preferred avenue has been changed then please mentions the reason • • Potential for better returns. Greater transparency. • • Flexibility in investment.

Higher liquidity

SAMPLE SIZE 100 Potential for better return Greater transparency Flexibility in investment Higher liquidity TOTAL

FREQUENCY 52 20 18 10 100

PERCENTAGE 52 20 18 10 100

10 18 52

P oten for tial b etter retu rn Greater Tran aren sp cy Flexib ility in In vestm t en

20
Hig er h L u ity iq id

Inference- It can be seen from the pie-chart that
• •

52% of the investors are interested in potential for better returns. 20% of the investors are prefer transparent services.
42

• •

18% of the investors wants flexibility in investment.. 10% of the investors investaccordig to the company’s liquidity.

Chapter – 5 Findings, Recommendatio ns & Conclusion
43

FINDINGS
After collecting primary data and analyzing them graphically it can be concluded that:
•

12% of the investors are less than that of 20 years of age.37% lie in the age group

of 20-30 years as such investors are returns oriented and are risk takers.33% lie in the age group of 30-45 years as these investors want safe products with assured returns.Only 18% of the investors lie in the age group of more than 45 years. Such investors are risk averse. • It was found that in a sample of 100, 36 (36%) of people had annual income

between Rs.100000-250000. Out of these 36, 14 people pay a premium below Rs. 10000, 22 pay premiums between Rs. 10000-20000. • In the same sample of 100, 40 (40%) people had annual income between Rs.

250000-500000. Out of these 25, 7 people pay premium between Rs. 10000-20000, 14 people pay premium between Rs. 20000-50000, and 9 of them pay premium above Rs. 500000.
•

The highest market share from the sample was of LIC with 47% respondents

having LIC policy, followed by ICICI PRUDENTIAL with a market share of 27%, HDFC STANDARD LIFE with 11% share , TATA AIG with 5% and OTHERS with 10% share. • Most people choose LIC for its Brand Image and since it is a PSU, also it offers to

its customers’ low EMIs, but on the other hand private players offer better returns.
•

It was found that most of the people considered “Returns 43%” as a major factor

while buying insurance with positive responses, 32% “Brand Image” as the prime factor, 8(8%) prefer “EMI” and 17(14%) prefer “Time Period”.
44

•

The most preferred avenue for investment was found out to be Stock Market

preferred by 37% respondents, followed by Mutual Fund preferred by 22% respondents, 32% preferred Govt. Bonds, 9% preferred Fixed Deposit.
•

Out of the entire sample of 100, 78(78%) preferred Traditional Insurance Plans,

and 22(22%) preferred ULIPs 3 years ago but in present scenario 12% prefer Traditional Plans and 88% prefer ULIPs. Among the reasons for this change 52(52%) respondents prefer “Potential for better returns”, 20(20%) prefer “Greater Transparency”, 18(18%) prefer “Flexibility in investment” and 10(10%) prefer “Higher liquidity”.

Recommendations for whole Insurance Industry
• As it can be seen that that most of the investors are inclined toward stock market

and mutual funds there is a strong need to take some important steps on the part of government and insurance companies which would help this sector grow at a faster pace.
•

The government should make life insurance mandatory, because most of the peole

live with the myth “I don’t need insurance”, so this myth should be eradicated from the mind of the consumers by highlighting the benefits of life insurance, government can launch campaigns to increase awareness especially in the rural sector. • The companies should highlight the advantages of life insurance in comparison to other investment avenues such as mutual funds, stock market, as only ULIPs offer returns plus life cover which other investment options do not provide, also capital gains or maturity amount is exempted from tax under Section 10(10) D of the Income Tax Act. • There should be strong distribution channel of the insurance companies so that they are closely connected to consumers, distribution channel that is the agents of life insurance companies are foundation of life insurance business, they must be properly trained by the companies to sell products according to the needs of the customer, give suitable suggestions to the customer to make his/her future secure.
45

Recommendations for Tata AIG Life Insurance
If Tata AIG Life Insurance wants to become a market leader it has to work on certain areas:
•

Tata AIG Life Insurance employs around 4328 people in its various businesses and has 112 branches across 108 cities as compared to ICICI Prudential has 735 offices, 22 Bank assurance partners and over 2.4 lakh advisors therefore KLI should increase its offices.

•

Tata AIG Life Insurance has a limited number of trainers in its branches, because of which advisors are not properly trained, so it should work on developing its training department.

•

Increase expenditure on promotion and advertising to make people think of Tata AIG Life Insurance whenever they think of insurance.

•

Transparency in the system i.e. conductance and training of Life Advisers, in customer relationships, reporting should be there.

CONCLUSION
Earlier Life Insurance was taken as an option for risk cover or a tax saving by people. But in the present scenario the mind set and outlook of people has changed a lot. They now consider Life insurance as an investment opportunity in long run. Clients have also shifted a lot from traditional plans to Unit linked insurance plan (ULIP). ULIP provide the investor with benefits like Potential for better returns. Under IRDA guidelines, traditional plans have to invest at least 85% in debt instruments which results in low returns. On the other hand, Ulips invest in market linked instruments with varying debt and equity proportions and if you wish you can even choose 100% equity option. There is
46

also Flexibility in investment. The top most advantage which ULIPs offer over traditional plans is the flexibility offered to the customer to customise the product according to their needs:
1.

Flexibility to invest the money the way customer wants: Unlike traditional plans, Ulips allow customer to full discretion to choose the fund option most appropriate to their risk appetite.

2.

Flexibility to change the fund allocation: Ulips also give the customer an option to change the fund allocation at a later stage through fund switching facility.

Last but not least ULIP

also provide investor with ;Higher Liquidity (Better exit

options), the possibility to withdraw your money before maturity (through surrender or partial withdrawals) is higher in case of Ulips as compared to traditional plans and also the exit costs are lower. Therefore In ULIPs, a part of the investment goes towards providing a life cover and the residual portion of the ULIP is invested in a fund which in turn invests in stocks or bond. The value of investments alters with the performance of the underlying fund opted by the customer In short we can say that ULIP is managed according to the customer’s specific needs and offers them unprecedented flexibility and transparency.

47

BIBLIOGRAPHY

48

BIBLIOGRAPHY
BOOKS
1.

Insurance Distribution – An Introduction, Insurance Series, ICFAI Kothari, C.R: Research methodology,2nd edition,1990, New age IC-24, Legal Aspect of Life Insurance issued by IRDA Marketing Management –Philip Kotler,13th edition

University
2.

international (p) ltd,New delhi 3. 4.

WEBSITES
• • • •

http://www.tataAIGlifeinsurance.com http://www.irdaindia.org/ www.google.com http://economictimes.indiatimes.com

49

Annexure

50

Questionnaire
Contact Information Name: Address: Gender: 1. What is your age? 1. Less Than 20 2. 20-30 3. 30-45
4. More Than 45

Occupation: Phone No.:

2. What is your annual income? 1. Less than 1,00,000 2. 1,00,000-2,50,000 3. 2,50,000-5,00,000 4. More than 5,00,000 3. What is your marital status? 1. Married :
2. Unmarried:

4. Which Avenues do you prefer for investment? 1. Stock Market 2. Mutual funds 3. Govt. Bonds
51

4. Fixed deposits 5. Are you aware about the benefits of Insurance? 1. Yes 2. No 6. Are you and your family members insured? 1. All members including you 2. Only you 3. No one 7. If yes, from which company are you insured? 1. LIC 2. ICICI 3. HDFC
4. TATA AIG

5. Others 8.Which of the following features which affects your purchase? • • • • Brand EMI Returns Time Period
1. 5000-15000 2. 15000-30000 3. 30000-50000

9. What is the annual premium you are paying?

4. Above 50000

10. Which type of plan you prefer now? 1. Traditional plans 2. ULIPs
52

11. If your preferred avenue has been changed then please mentions the reason 1. Potential for better returns. 2. Greater transparency. 3. Flexibility in investment. 4. Higher liquidity.

(Signature)

53

MARKETING PROJECT ON DABUR HAJMOLA

Dear students. complete project is available. you could get complete project (softcopy) only in Rs 450. contact at vuaccess@gmail.com or text me at +923364220477

MARKETING PROJECT ON TOYOTA COROLLA

Dear students. complete project is available. you could get complete project (softcopy) only in Rs 450. contact at vuaccess@gmail.com or text me at +923364220477

MKTI619-Internship Report 2011 pk

Dear Virtual university students. if you have,t time to prepare your internship report, we are here you may

contact via email at vuaccess@gmail.com or text me at  +923214750603

virtual university of pakistan assignments

virtual university pakistan past papers
virtual university of pakistan lecture handouts
virtual university of pakistan handouts
virtual university of pakistan assignments
virtual university pakistan old papers
virtual university pakistan notes
introduction of virtual university pakistan

Charges for Degree Issuance In Advance

VIRTUAL UNIVERSITY OF PAKISTAN


No. VU/A&P/0736
Dated: April 24, 2008



Notification


Subject: Charges for Degree Issuance in advance before Convocation


It is notified that a total fee or Rs.1,500/- will be charged for issuance of Degree in advance, before convocation, on request of a student. The fee is inclusive of all charges including courier charges. This notification will be implemented from the date of issuance.


Director Finance



Click to read orginal paper

HRM619-Final Project and Data Analysis

Dear Students Today i am going to tell you how could you put the data in Excel sheet, and what are the various others tools for calculating the mean or correlation

You are required to include the complete data analysis of all respondents and of complete questionnaire which you have used for data collection. You are suggested to calculate the MEAN values of all the factors and then calculate the correlation of both variables i-e HR practices and Job Satisfaction.

I hope it will be clear if there is any confusion you are more than welcome to ask.

Data interpretation for each HR Practice one by one?

The value of standard deviation shows the dispersion of the data and it does not define the level of job satisfaction. You can interpret the level of job satisfaction through MEAN value.

I hope it will be clear if there is any confusion you are more than welcome to ask.

Diagram by using correlation and mean?

You are required to draw the diagram on the basis of responses of each question against every option given in the question in the form of bar diagram or in the form of pie charts. As concerned to correlation there is no need to draw the diagram of correlation.

List of HRM619 Final Project
List of HRM619 Final Project Proposal

Internship & Internship Reference Letter

Dear Students,


If you have not started your internship as yet, you must do it now, in order to be able to meet the deadlines given in Lesson 02: Semester Calendar. You are required to do your internship in a registered or recognized organization having proper departmentalization. Please make sure that the internship should preferably be relevant to your area of specialization. Once you find the organization willing to offer you internship, you may lodge the request for the issuance of Internship Reference Letter (IRL), if required.


You are required to download the Request Form for the issuance of reference letter available in the Downloads section of this course, fill in the required information and send it to your Course Instructor at hrmi619@vu.edu.pk.


Note:

§ Internship Reference Letter (IRL) is NOT COMPULSORY; therefore, you should only send your request for the IRL if it is required by the organization.


§ Your internship MUST be approved by the Head Office of the organization and/or must be according to the policy of the organization in this regard. Make sure the Internship Completion Certificate shall only be acceptable if issued by the designated authority.

§ You are advised to read the specification of Internship Completion Certificate (ICC) & Evaluation Form (EF) as mentioned on the VULMS of the course (Lesson 04-Submissions) to avoid such unfavorable consequences.


■Do remember to mention your name & student ID on the envelope before dispatch your Internship Completion Certificate (ICC) & Evaluation Form (EF) to your course instructor.



Dear students, 1000 of internship reports are available special for virtual university students. if you may want any report send me your topic and you could buy with reasonable cost.
just email me at vuaccess@gmail.com or text me at +923364220477

MBA Project New Report

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


1

Chapter 1 - Introduction
Indian Pharmaceutical Industry

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

The Indian Pharmaceutical Industry today is in the front rank of India’s science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of medicines, Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of the world.

The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations.

2

ADVANTAGE INDIA 1. Competent workforce: India has a pool of personnel with high managerial and technical competence as also skilled workforce. It has an educated work force and English is commonly used. Professional services are easily available. 2. Cost-effective chemical synthesis: Its track record of development, particularly in the area of improved cost-beneficial chemical synthesis for various drug molecules is excellent. It provides a wide variety of bulk drugs and exports sophisticated bulk drugs. 3. Legal & Financial Framework: India has a 53 year old democracyand hence has a solid legal framework and strong financial markets. There is already an established international industry and business community. 4. Information & Technology: It has a good network of world-class educational institutions and established strengths in Information Technology. 5. Globalizations: The country is committed to a free market economy and globalization. Above all, it has a 70 million middle class market, which is continuously growing. 6. Consolidation: For the first time in many years, the international pharmaceutical industry is finding great opportunities in India. The process of consolidation, which has become a generalized phenomenon in the world pharmaceutical industry, has started taking place in India.

3 SWOT Analysis

Strengths • Cost Competitiveness • Well Developed Industry with Strong Manufacturing Base • Access to pool of highly trained scientists, both in India and abroad. • Strong marketing and distribution network • Rich Biodiversity • Competencies in Chemistry and process development. Weaknesses • Low investments in innovative R&D and lack of resources to compete with MNCs for New Drug Discovery Research and to commercialize molecules on a worldwide basis. • Lack of strong linkages between industry and academia. • Low medical expenditure and healthcare spend in the country • Production of spurious and low quality drugs tarnishes the image of industry at home and abroad. • Shortage of medicines containing psychotropic substances. There are 4000 such brands of medicines that fall under the Narcotics Drugs and Psychotropic Substances (NDPS) Act, 1985.Under a clause of this Act, the retailer has to sign the consignment note provided by the stockist. The police check this note regularly to prevent these medicines getting diverted to the drug mafia and they can arrest the retailer if the signatures are under suspect. To protest against this clause, the retailers have stopped stocking these medicines, some of which is life saving.

4 Opportunities • Significant export potential. • Licensing deals with MNCs for NCEs and NDDS. • Marketing alliances to sell MNC products in domestic market. • Contract manufacturing arrangements with MNCs • Potential for developing India as a centre for international clinical trials • Niche player in global pharmaceutical R&D. • Supply of generic drugs to developed markets. Threats • Product patent regime poses serious challenge to domestic industry unless it invests in research and development • R&D efforts of Indian pharmaceutical companies hampered by lack of enabling regulatory requirement. For instance, restrictions on animal testing outdated patent office. • Drug Price Control Order puts unrealistic ceilings on product prices and profitability and prevents pharmaceutical companies from generating investible surplus. • Lowering of tariff protection • The new MRP based excise duty regime threatens the existence of many small scale pharma units, especially in the states of Andhra Pradesh and Maharashtra, that were involved in contract manufacturing for the larger, established players. These companies are now shifting their manufacturing from these states to states like J&K that enjoy tax holidays.

5 Identified Problem

The economy worldwide is facing severe recession and the current recession is very severe and prolonged one after second world war. The share market all along the world is down to a significant level compared to the levels it was before the current world wide recession. There is pressure on all the industry due to liquidity crunch. The stock prices are reduced to an extent more than 50% over past 12 months. Raising capital required for the business expansion has almost stopped with share market crash. The working capital required for the operations dried up as banks are not willing to lend as the banks are risk awesome and future of the economy is blink.

Need For Study The capital market returns are negative since Jan 2008. The market capitalization of several firms are beaten down to as much as more than 50%. There is continued down trend in the market and returns are uncertain and investment in the capital market are at greater risk which was never seen post word war II. There is need for investors to asses the risk associated with there investments under current market scenario, and to decide on continued investing and to take fresh investment decisions or reallocate there current portfolio. Objectives and Scope

The objectives of the present studies are to find out past performance of top Indian pharmaceutical companies. To identify and group them in to stable and performers and under performers. The objective assessment is carried out through ratio analysis for the period of 2004 to 2008. Deliverables Identifying performers and under performers among the top Indian pharmaceutical companies and classifying them for investment decisions.

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

6

Chapter 2 – Literature Survey

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

A ratio: Is the mathematical relationship between two quantities in the form of a fraction or percentage.

Ratio analysis: is essentially concerned with the calculation of relationships which after proper identification and interpretation may provide information about the operations and state of affairs of a business enterprise. The analysis is used to provide indicators of past performance in terms of critical success factors of a business. This assistance in decision-making reduces reliance on guesswork and intuition and establishes a basis for sound judgement. Types of Ratios A: Liquidity Ratios
•

Liquidity refers to the ability of a firm to meet its short-term financial obligations when and as they fall due.

•

The main concern of liquidity ratio is to measure the ability of the firms to meet their short-term maturing obligations. Failure to do this will result in the total failure of the business, as it would be forced into liquidation.

7 Current Ratio The Current Ratio expresses the relationship between the firm’s current assets and its current liabilities. Current assets normally includes cash, marketable securities, accounts receivable and inventories. Current liabilities consist of accounts payable, short term notes payable, short-term loans, current maturities of long term debt, accrued income taxes and other accrued expenses (wages).

The rule of thumb says that the current ratio should be at least 2, that is the current assets should meet current liabilities at least twice. Quick Ratio Measures assets that are quickly converted into cash and they are compared with current liabilities. This ratio realizes that some of current assets are not easily convertible to cash e.g. inventories. The quick ratio, also referred to as acid test ratio, examines the ability of the business to cover its short-term obligations from its “quick” assets only (i.e. it ignores stock). The quick ratio is calculated as follows Clearly this ratio will be lower than the current ratio, but the difference between the two (the gap) will indicate the extent to which current assets consist of stock. B: Asset Management/Activity Ratios If a business does not use its assets effectively, investors in the business would rather take their money and place it somewhere else. In order for the assets to be used effectively, the business needs a high turnover.

8 Unless the business continues to generate high turnover, assets will be idle as it is impossible to buy and sell fixed assets continuously as turnover changes. Activity ratios are therefore used to assess how active various assets are in the business. Average Collection Period The average collection period measures the quality of debtors since it indicates the speed of their collection.
•

The shorter the average collection period, the better the quality of debtors, as a short collection period implies the prompt payment by debtors.

•

The average collection period should be compared against the firm’s credit terms and policy to judge its credit and collection efficiency.

•

An excessively long collection period implies a very liberal and inefficient credit and collection performance.

The delay in collection of cash impairs the firm’s liquidity. On the other hand, too low a collection period is not necessarily favourable, rather it may indicate a very restrictive credit and collection policy which may curtail sales and hence adversely affect profit.

Inventory Turnover This ratio measures the stock in relation to turnover in order to determine how often the stock turns over in the business. It indicates the efficiency of the firm in selling its product. It is calculated by dividing he cost of goods sold by the average inventory.

9 Total Assets Turnover Asset turnover is the relationship between sales and assets
• •

The firm should manage its assets efficiently to maximise sales. The total asset turnover indicates the efficiency with which the firm uses all its assets to generate sales.

•

It is calculated by dividing the firm’s sales by its total assets.

•

Generally, the higher the firm’s total asset turnover, the more efficiently its assets have been utilised.

Fixed Asset Turnover The fixed assets turnover ratio measures the efficiency with which the firm has been using its fixed assets to generate sales. It is calculated by dividing the firm’s sales by its net fixed assets as follows:

•

Generally, high fixed assets turnovers are preferred since they indicate a better efficiency in fixed assets utilisation.

C: Financial Leverage (Gearing) Ratios
•

The ratios indicate the degree to which the activities of a firm are supported by creditors’ funds as opposed to owners.

10
•

The relationship of owner’s equity to borrowed funds is an important indicator of financial strength.

•

The debt requires fixed interest payments and repayment of the loan and legal action can be taken if any amounts due are not paid at the appointed time. A relatively high proportion of funds contributed by the owners indicates a cushion (surplus) which shields creditors against possible losses from default in payment. The greater the proportion of equity funds, the greater the degree of financial strength. Financial leverage will be to the advantage of the ordinary shareholders as long as the rate of earnings on capital employed is greater than the rate payable on borrowed funds. The following ratios can be used to identify the financial strength and risk of the business.

Equity Ratio The equity ratio is calculated as follows:

•

A high equity ratio reflects a strong financial structure of the company. A relatively low equity ratio reflects a more speculative situation because of the effect of high leverage and the greater possibility of financial difficulty arising from excessive debt burden.

Debt Ratio This is the measure of financial strength that reflects the proportion of capital which has been funded by debt, including preference shares. This ratio is calculated as follows:

11 With higher debt ratio (low equity ratio), a very small cushion has developed thus not giving creditors the security they require. The company would therefore find it relatively difficult to raise additional financial support from external sources if it wished to take that route. The higher the debt ratio the more difficult it becomes for the firm to raise debt. Debt to Equity ratio This ratio indicates the extent to which debt is covered by shareholders’ funds. It reflects the relative position of the equity holders and the lenders and indicates the company’s policy on the mix of capital funds. The debt to equity ratio is calculated as follows:

Times Interest Earned Ratio This ratio measure the extent to which earnings can decline without causing financial losses to the firm and creating an inability to meet the interest cost.
•

The times interest earned shows how many times the business can pay its interest bills from profit earned.

•

Present and prospective loan creditors such as bondholders, are vitally interested to know how adequate the interest payments on their loans are covered by the earnings available for such payments.

•

Owners, managers and directors are also interested in the ability of the business to service the fixed interest charges on outstanding debt.

The ratio is calculated as follows:

12 D: Profitability Ratios Profitability is the ability of a business to earn profit over a period of time. Without profit, there is no cash and therefore profitability must be seen as a critical success factors.
• •

A company should earn profits to survive and grow over a long period of time. Profits are essential, but it would be wrong to assume that every action initiated by management of a company should be aimed at maximizing profits, irrespective of social consequences.

Profitability is a result of a larger number of policies and decisions. The profitability ratios show the combined effects of liquidity, asset management (activity) and debt management (gearing) on operating results. The overall measure of success of a business is the profitability which results from the effective use of its resources. Gross Profit Margin
• •

Normally the gross profit has to rise proportionately with sales. It can also be useful to compare the gross profit margin across similar businesses although there will often be good reasons for any disparity.

Net Profit Margin This is a widely used measure of performance and is comparable across companies in similar industries. The fact that a business works on a very low margin need not cause alarm because there are some sectors in the industry that work on a basis of high turnover and low margins, for examples supermarkets and motorcar dealers. What is more important in any trend is the margin and whether it compares well with similar businesses.

13

Return on Investment (ROI) Income is earned by using the assets of a business productively. The more efficient the production, the more profitable the business. The rate of return on total assets indicates the degree of efficiency with which management has used the assets of the enterprise during an accounting period. This is an important ratio for all readers of financial statements. Investors have placed funds with the managers of the business. The managers used the funds to purchase assets which will be used to generate returns. If the return is not better than the investors can achieve elsewhere, they will instruct the managers to sell the assets and they will invest elsewhere. The managers lose their jobs and the business liquidates.

Return on Equity (ROE) This ratio shows the profit attributable to the amount invested by the owners of the business. It also shows potential investors into the business what they might hope to receive as a return. The stockholders’ equity includes share capital, share premium, distributable and non-distributable reserves. The ratio is calculated as follows:

Earning Per Share (EPS) Whatever income remains in the business after all prior claims, other than owners claims (i.e. ordinary dividends) have been paid, will belong to the ordinary shareholders who can then make a decision as to how much of this income they wish to remove from the business in the form of a dividend, and how much they wish to retain in the business. The shareholders are particularly

14 interested in knowing how much has been earned during the financial year on each of the shares held by them. For this reason, an earning per share figure must be calculated. Clearly then, the earning per share calculation will be:

E: Market Value Ratios These ratios indicate the relationship of the firm’s share price to dividends and earnings. Note that when we refer to the share price, we are talking about the Market value and not the Nominal value as indicated by the par value. For this reason, it is difficult to perform these ratios on unlisted companies as the market price for their shares is not freely available. One would first have to value the shares of the business before calculating the ratios. Market value ratios are strong indicators of what investors think of the firm’s past performance and future prospects. Dividend Yield Ratio The dividend yield ratio indicates the return that investors are obtaining on their investment in the form of dividends. This yield is usually fairly low as the investors are also receiving capital growth on their investment in the form of an increased share price. It is interesting to note that there is strong correlation between dividend yields and market prices. Invariably, the higher the dividend, the higher the market value of the share. The dividend yield ratio compares the dividend per share against the price of the share and is calculated as:

15 Notice a healthy increase in the yield from 2000 to 2002. The main reason for this is that the dividend per share increased while at the same time, the price of a share dropped. This is fairly unusual because share prices usually increase when dividends increase. However there could be number of reasons why this has happened, either due to the economy or to mismanagement, leading to a loss of faith in the stock market or in this particular stock. Normally a very high dividend yield signals potential financial difficulties and possible dividend payout cut. The dividend per share is merely the total dividend divided by the number of shares issued. The price per share is the market price of the share at the end of the financial year. Price/Earning Ratio (P/E ratio)
•

P/E ratio is a useful indicator of what premium or discount investors are prepared to pay or receive for the investment.

•

The higher the price in relation to earnings, the higher the P/E ratio which indicates the higher the premium an investor is prepared to pay for the share. This occurs because the investor is extremely confident of the potential growth and earnings of the share.

The price-earning ratio is calculated as follows:

1. High P/E generally reflects lower risk and/or higher growth prospects for earnings. 2. The above ratio shows that the shares were traded at a much higher premium in 2000 than were in 2002. In 2000 the price was 26.8 times higher than earnings while in 2002, the price was only 12 times higher. Dividend Cover

16
•

This ratio measures the extent of earnings that are being paid out in the form of dividends, i.e. how many times the dividends paid are covered by earnings (similar to times interest earned ratio discussed above).

•

A higher cover would indicate that a larger percentage of earnings are being retained and reinvested in the business while a lower dividend cover would indicate the converse.

Dividend pay-out ratio This ratio looks at the dividend payment in relation to net income and can be calculated as follows:

Note: Even though the dividend yield has increased, the dividend payout ratio has reduced, showing that a lower proportion of earnings were paid out as dividend. The ratio has only reduced slightly, however, from 50.7% in 2000 to 49.4% in 2002. Generally, the low growth companies have higher dividends payouts and high growth companies have lower dividend payouts.

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

17

Chapter 3 – Methodology

Type of Project: The current study is of descriptive and would have secondary data collection from various sources especially from the annual reports of top Indian pharmaceutical companies. Tools for data analysis: Computation of various finical ratios such as profitability, liquidity, efficiency, gearing, investment using standers known formulas and techniques and plotting the rations to find the spread among the companies studied to identify those who have ratios which are well with in acceptable range for better performance and those who would require improvements in the ratios.

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

18

Chapter 4 – Data Analysis and Interpretations

LIQUIDITY RATIO: Liquidity refers to the ability of a firm to meet its short-term financial obligations when and as they fall due. The main concern of liquidity ratio is to measure the ability of the firms to meet their shortterm maturing obligations. Failure to do this will result in the total failure of the business, as it would be forced into liquidation. Financial Ratio Current Ratio Formula Measurements A measure of short-term liquidity. Current Assets / Current Indicates the ability of entity to liabilities meet its short-term debts from its current assets A more rigorous measure of shortCurrent Assets less inventory / term liquidity. Indicates the ability Current liabilities of the entity to meet unexpected demands from liquid current asses

Quick Ratio

19 Table 1 : Current ratio analysis Company Name Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck 2004 1.12 1.44 1.03 1.84 0.97 2.20 1.19 1.19 2.11 1.04 1.37 1.10 1.14 1.30 1.63 1.07 1.52 3.22 1.18 1.06 1.90 2.27 1.47 0.51 1.15 Current Ratio 2005 2006 2007 1.38 1.34 1.92 1.55 1.87 1.96 0.75 0.60 0.57 1.20 1.31 1.35 1.11 1.24 1.28 2.33 1.84 2.48 1.33 1.41 1.69 1.11 1.06 1.33 3.43 2.64 2.42 0.50 0.61 0.56 0.98 1.25 1.68 1.65 1.32 0.92 0.88 0.87 0.85 0.96 1.05 1.16 0.70 1.21 0.85 1.14 1.31 1.60 0.68 1.05 0.65 2.74 2.53 2.74 0.96 0.79 1.25 0.80 1.04 1.13 2.70 2.54 1.70 2.38 1.95 1.59 1.56 1.66 1.82 0.79 0.97 1.36 1.13 1.11 0.76

2008 1.32 1.86 0.45 1.16 1.06 2.13 1.88 1.13 2.29 0.74 0.74 1.17 0.78 1.26 0.94 1.19 0.57 2.70 0.83 1.39 2.15 1.69 1.12 1.26 1.04

Current Ratio 2004 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00

Current Ratio 2005

Current Ratio 2006

Current Ratio 2007

Current Ratio 2008

Su

Ph ar m a Ci pl a G SK D Ra RL nb ax y D iv is Lu pi Pi n r G ama len l m ar Ca k di Bi l a oc A on va nt is Pf iz e M r at rix A zt To ra rre n W t A ye ur tn ob in N do W ova oc tis kh a D r dt ish m a IP n CA FD C A bb o M t er ck

n

20 2004 0.51 0.67 0.40 1.22 0.40 0.99 0.60 0.59 1.32 0.56 0.80 0.54 0.52 0.56 0.60 0.37 0.63 2.10 0.71 0.65 0.87 1.11 0.71 0.27 0.65 2005 0.77 0.69 0.29 0.72 0.53 1.00 0.67 0.39 2.48 0.18 0.69 0.86 0.46 0.43 0.34 0.37 0.28 1.60 0.40 0.49 1.35 1.15 0.79 0.31 0.65 Quick Ratio 2006 0.68 0.92 0.21 0.76 0.60 0.69 0.76 0.49 1.78 0.28 0.83 0.59 0.44 0.54 0.72 0.56 0.65 1.55 0.33 0.58 1.23 0.86 0.59 0.39 0.64 2007 0.98 1.03 0.15 0.96 0.65 1.12 0.94 0.70 1.60 0.24 1.09 0.32 0.39 0.60 0.52 0.78 0.28 1.48 0.50 0.62 0.94 0.71 0.54 0.48 0.34 2008 0.97 1.05 0.13 0.70 0.55 0.96 0.95 0.63 1.58 0.34 0.34 0.36 0.36 0.55 0.66 0.66 0.28 1.49 0.32 0.79 1.04 0.87 0.29 0.55 0.51

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

Quick Ratio 2004 3.00 2.50 2.00 1.50 1.00 0.50 0.00

Quick Ratio 2005

Quick Ratio 2006

Quick Ratio 2007

Quick Ratio 2008

Su

Ph ar m a Ci pl a G SK D Ra RL nb ax y D iv i Lu s pi Pi n r G ama len l m ar Ca k di Bi l a oc A on va nt i Pf s iz M er at ri x A ztr To a rre n W t A ye ur tn ob in N do W ova oc tis kh a D r dt ish m a IP n CA FD C A bb o M t er ck

n

21 Inventory Turnover 2005 2006 2007 3.68 3.91 4.11 2.00 2.04 2.26 3.58 3.85 3.59 2.78 2.53 3.40 2.26 2.25 2.30 1.71 1.31 1.91 3.34 3.56 3.35 3.02 3.61 4.24 2.30 2.07 1.92 3.32 3.39 2.56 5.96 4.62 3.80 4.30 3.80 3.60 4.26 4.21 3.81 2.43 2.72 2.39 3.52 4.75 4.42 2.00 2.36 2.70 2.69 3.01 2.98 2.72 3.01 2.83 4.52 5.22 4.58 4.87 3.57 3.06 1.61 1.86 2.11 2.65 2.79 2.64 3.87 3.09 2.96 7.65 7.22 5.68 5.80 5.61 5.28

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

2004 3.12 2.18 3.52 3.24 2.63 2.06 3.56 3.98 2.19 3.99 3.90 4.70 3.45 2.73 2.19 2.67 2.57 3.78 5.78 4.52 1.73 2.77 3.59 9.13 5.14

2008 4.51 2.45 4.04 3.00 2.51 2.03 2.84 4.45 2.24 2.73 2.73 3.24 3.86 2.29 5.93 2.99 3.83 2.73 4.49 2.91 2.14 2.79 3.45 5.58 5.05

Inventory Turnover 2004 Inventory Turnover 2007 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00

Inventory Turnover 2005 Inventory Turnover 2008

Inventory Turnover 2006

Su n

Ph ar m a Ci pl a G SK D Ra RL nb ax y D iv is Lu pi Pi n r G ama len l m ar Ca k di B la io c A on va nt i Pf s iz M er at rix A zt To ra rre n W t A ye ur tn ob in N do W ova oc tis kh a D rdt ish m a IP n C A FD C A bb o M t er ck

22 Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck 2004 47.34 93.01 20.69 93.94 43.93 87.58 65.86 43.20 125.24 52.27 79.33 28.06 40.00 57.58 39.32 32.97 34.70 126.49 47.47 71.54 107.15 74.34 36.32 14.23 58.03 Average Collection Period 2005 2006 2007 68.23 49.26 45.47 88.19 98.92 101.97 18.17 13.97 11.97 95.77 97.96 94.06 71.72 76.54 82.22 94.39 95.95 81.73 72.07 74.47 79.34 33.48 45.00 49.11 125.35 176.02 172.45 33.76 50.64 53.96 92.66 103.22 110.37 42.97 21.16 25.99 43.17 44.10 33.76 73.93 85.74 94.03 40.88 48.07 56.32 41.24 57.55 64.66 21.44 25.06 22.61 145.52 142.34 110.00 28.76 24.46 25.73 58.62 65.35 78.71 138.46 116.12 137.84 77.11 66.09 66.07 48.04 19.01 16.79 13.43 15.04 16.06 45.83 48.46 23.99 2008 115.11 114.11 7.54 88.91 71.93 71.48 79.19 54.84 151.80 56.63 56.63 21.76 21.64 124.43 55.89 73.72 23.57 118.80 23.61 92.15 105.14 84.00 13.79 16.10 31.65

Average Collection Period 2004 Average Collection Period 2007 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00

Average Collection Period 2005 Average Collection Period 2008

Average Collection Period 2006

Sun Pharma

Ranbaxy

Glenmark

Aurobindo

Dishman

Divis

Avantis

Lupin

Piramal

Biocon

Pfizer

DRL

Torrent

Cipla

Cadila

Novatis

Matrix

Aztra

Wyetn

Wockhardt

Abbot

IPCA

GSK

FDC

Merck

23

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

2004 1.47 1.19 2.76 1.40 2.07 0.98 1.24 1.65 1.05 1.14 1.52 2.13 2.45 1.32 1.84 1.35 1.65 1.06 3.39 1.68 0.72 1.41 1.75 5.46 2.08

Total Asset Turnover 2005 2006 2007 1.43 1.76 1.76 1.15 1.09 1.09 3.33 4.19 4.19 0.19 1.33 1.33 1.52 1.30 1.30 0.92 0.80 0.80 1.11 1.28 1.28 1.51 1.30 1.30 0.85 0.85 0.85 1.18 1.21 1.21 1.49 1.33 1.33 2.10 2.25 2.25 2.65 2.64 2.64 1.04 1.12 1.12 2.29 2.52 2.52 1.21 1.09 1.09 1.73 1.74 1.74 0.80 0.84 0.84 3.85 5.06 5.06 1.62 1.45 1.45 0.67 0.76 0.76 1.17 1.16 1.16 1.69 1.75 1.75 5.13 4.61 4.61 2.86 2.91 2.91

2008 1.57 1.03 4.78 1.40 1.40 1.08 1.35 1.44 1.13 1.28 1.28 2.40 4.34 0.66 2.65 1.18 2.93 1.06 5.04 1.14 0.78 1.23 1.68 3.41 3.26

Total Asset Turnover 2004 Total Asset Turnover 2007 6.00 5.00 4.00 3.00 2.00 1.00 0.00

Total Asset Turnover 2005 Total Asset Turnover 2008

Total Asset Turnover 2006

Su n

Ph ar m a Ci pl a G SK D Ra RL nb ax y D iv i Lu s pi Pi n r G ama len l m ar Ca k di Bi l a oc A on va nt i Pf s iz M er at rix A ztr To a rre n W t A ye ur tn ob in N do W ova oc tis kh a D rdt ish m a IP n CA FD C A bb o M t er ck

24

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

2004 1.77 0.91 1.59 1.73 1.23 0.81 0.87 0.90 0.98 0.95 1.75 1.03 1.43 0.87 0.97 0.88 1.45 1.15 1.70 1.76 0.92 0.90 1.25 2.02 1.26

Debt Ratio 2005 2006 3.38 3.01 0.84 0.84 2.05 2.30 0.28 1.98 1.02 1.16 0.82 0.97 0.89 1.19 0.89 1.08 1.18 1.54 1.00 1.08 1.71 1.68 1.21 1.35 1.57 1.47 1.04 1.34 1.23 1.38 1.28 0.98 1.83 1.54 1.21 1.23 2.15 2.99 2.63 2.25 0.99 1.48 0.89 0.87 1.16 1.37 2.09 2.03 1.83 2.10

2007 2.77 0.97 2.89 1.98 1.64 0.91 1.11 1.08 1.47 1.01 0.95 1.62 1.76 1.35 1.22 0.97 2.07 1.53 3.25 1.63 1.33 0.91 1.21 1.37 3.73

2008 2.05 1.02 3.62 2.03 1.73 0.96 1.07 1.10 1.25 1.28 1.28 1.78 2.76 1.11 1.39 1.13 2.24 1.31 3.78 1.54 1.46 1.01 1.32 1.05 3.89

Debt Ratio 2004 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00

Debt Ratio 2005

Debt Ratio 2006

Debt Ratio 2007

Debt Ratio 2008

Su

ar m a Ci pl a G SK D Ra RL nb ax y D iv i Lu s pi Pi n r G ama len l m ar Ca k di Bi l a oc A on va nt i Pf s iz M er at rix A ztr To a rre n W t A ye ur tn ob in N do W ova oc tis kh a D rdt ish m a IP n CA FD C A bb o M t er ck

n

Ph

25 Debt-to-Equity 2005 2006 2.36 1.92 0.57 0.73 0.48 0.42 0.83 1.06 0.44 0.85 0.86 0.97 1.14 1.68 0.95 0.81 2.11 2.78 0.62 0.69 0.75 0.82 0.77 0.67 0.53 0.45 0.55 0.74 0.25 0.59 1.07 1.07 0.51 0.57 1.74 1.90 0.61 0.62 1.84 1.59 1.41 2.36 1.24 1.07 0.71 0.79 0.58 0.62 0.68 0.70

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

2004 1.06 0.58 0.53 0.83 0.48 0.90 1.03 1.13 1.04 1.12 0.85 0.60 0.55 1.22 0.51 0.56 0.72 1.55 0.60 1.16 2.06 1.09 0.75 0.36 0.58

2007 1.29 0.71 0.52 0.79 1.71 1.00 1.38 1.03 2.42 0.35 0.84 0.58 0.52 0.83 0.28 1.11 0.52 2.66 0.79 1.30 1.63 0.95 0.78 0.58 0.78

2008 0.76 0.78 0.53 0.81 1.63 0.83 1.22 1.00 1.14 0.90 0.90 0.70 0.65 1.03 0.45 1.04 0.49 2.00 0.71 1.35 1.34 1.06 0.74 0.41 0.84

Debt-to-Equity 2004 3.00 2.50 2.00 1.50 1.00 0.50 0.00

Debt-to-Equity 2005

Debt-to-Equity 2006

Debt-to-Equity 2007

Debt-to-Equity 2008

Su n

Ph ar m a Ci pl a G SK D Ra RL nb ax y D iv i Lu s pi Pi n r G ama len l m ar Ca k di Bi l a oc A on va nt i Pf s iz M er at rix A ztr To a rre n W t A ye ur tn ob in N do W ova oc tis kh a D rdt ish m a IP n CA FD C A bb o M t er ck

26 Gross Profit Margin 2005 2006 2007 44.67% 45.03% 44.20% 37.75% 38.88% 39.08% 46.26% 51.68% 52.45% 46.28% 47.48% 58.98% 48.66% 47.21% 47.46% 39.11% 40.35% 44.75% 29.51% 34.39% 38.14% 45.20% 44.52% 43.03% 51.22% 50.30% 52.23% 44.77% 45.23% 47.05% 36.69% 32.32% 36.18% 43.12% 40.36% 39.69% 47.41% 44.00% 49.44% 37.70% 37.62% 34.98% 48.92% 48.57% 47.39% 44.41% 44.53% 45.48% 44.10% 53.12% 55.15% 19.25% 19.91% 24.19% 42.81% 45.12% 47.95% 50.88% 46.61% 43.38% 37.58% 34.61% 34.10% 37.26% 34.20% 37.91% 37.35% 41.91% 36.42% 36.92% 29.79% 27.88% 43.03% 43.04% 54.91%

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

2004 48.39% 35.64% 39.50% 50.92% 53.23% 37.97% 35.11% 45.89% 52.11% 43.98% 37.84% 40.49% 43.57% 41.95% 42.04% 46.11% 42.56% 24.51% 43.67% 44.69% 38.50% 38.09% 42.44% 46.89% 35.03%

2008 46.76% 37.49% 53.88% 47.15% 49.76% 48.20% 38.06% 43.55% 56.50% 49.67% 49.67% 38.35% 64.04% -5.06% 53.44% 48.56% 55.71% 26.50% 49.39% 42.96% 32.29% 37.81% 36.38% 28.93% 48.25%

Gross Profit Margin 2004 Gross Profit Margin 2007 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% Sun Pharma Ranbaxy

Gross Profit Margin 2005 Gross Profit Margin 2008

Gross Profit Margin 2006

Aurobindo

Glenmark

Wockhardt

Dishman

Divis

Avantis

Lupin

Piramal

Biocon

Pfizer

0.00% -10.00%

DRL

Torrent

Novatis

Cipla

Cadila

Matrix

Aztra

Wyetn

Abbot

GSK

IPCA

FDC

Merck

27 Operating Profit Margin 2005 2006 2007 2008 25.82 26.67 26.46 % % % 32.03% 21.94 22.77 22.55 % % % 19.88% 32.09 38.57 41.26 % % % 44.74% 14.13 35.34 3.97% % % 17.00% 15.63 % 5.44% 11.88% 17.34% 27.36 27.92 32.76 % % % 36.60% 10.00 15.68 19.93 % % % 20.87% 15.30 16.00 15.56 % % % 20.36% 19.82 17.76 23.92 % % % 33.64% 14.85 15.98 16.45 % % % 17.66% 28.27 22.73 19.99 % % % 17.66% 29.41 27.18 26.34 % % % 22.92% 14.10 17.16 22.73 % % % 44.70% 25.42 25.94 15.51 % % % -34.54% 24.63 27.93 26.24 % % % 31.45% 12.39 13.21 15.68 % % % 19.27% 20.47 30.23 36.68 % % % 34.55% 10.49 14.78 7.44% % % 16.45% 19.48 24.40 22.50 % % % 24.53% 29.25 27.25 22.63 % % % 22.86% 23.32 23.03 22.38 % % % 21.58% 15.74 12.21 17.85 % % % 17.26% 19.88 22.48 18.04 % % % 15.97% 16.25 15.28 14.98 % % % 13.04%

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot

2004 30.09 % 21.16 % 23.42 % 18.06 % 24.31 % 27.01 % 17.26 % 17.85 % 16.69 % 15.97 % 28.62 % 21.05 % 9.39% 28.65 % 20.59 % 19.05 % 22.64 % 16.08 % 19.43 % 21.18 % 24.18 % 17.27 % 26.39 % 26.96 %

28 Merck 18.56 % 28.04 % 28.43 % 40.35 % 28.22%

Operating Profit Margin 2004 Gross Profit Margin 2007 50.00% 40.00% 30.00% 20.00% 10.00% Sun Pharma Glenmark Ranbaxy

Gross Profit Margin 2005 Gross Profit Margin 2008

Gross Profit Margin 2006

Aurobindo

Dishman

Avantis

Divis

Lupin

Piramal

Biocon

Pfizer

0.00% -10.00% -20.00% -30.00% -40.00%

DRL

Torrent

Cipla

Novatis

Cadila

Aztra

Wyetn

Matrix

Wockhardt

Abbot

GSK

IPCA

FDC

Merck

29 Net Profit Margin 2005 2006 2007 2008 24.38 25.21 25.98 % % % 30.88% 17.08 19.06 18.39 % % % 16.36% 21.86 28.58 30.50 % % % 32.94% 10.51 29.37 4.50% % % 13.60% 12.81 % 5.33% 8.99% 12.22% 17.09 17.38 26.50 % % % 32.91% 10.83 13.66 7.27% % % 15.43% 12.24 11.22% % 11.18% 15.30% 12.14 15.57 % 11.63% % 27.56% 12.60 12.86 11.32% % % 12.97% 25.77 18.58 17.66 % % % 12.97% 19.30 17.97 17.84 % % % 14.77% 15.14 9.06% 11.05% % 33.81% 19.56 21.37 12.41 % % % -43.85% 14.51 18.55 17.07 % % % 20.27% 10.14 12.25 % 9.47% % 16.05% 18.98 24.74 30.15 % % % 23.82% 3.05% 5.09% 11.07% 11.78% 10.98 16.58 14.00 % % % 15.32% 23.77 22.87 18.36 % % % 15.78% 17.62 19.08 19.63 % % % 16.08% 10.77 12.33 % 8.33% % 12.14% 15.38 18.50 14.12 % % % 13.20% 10.39 10.06 11.04% % % 8.55% 18.76 19.18 33.05 19.44%

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

2004 26.54 % 15.91 % 14.46 % 16.63 % 20.03 % 17.99 % 8.37% 15.60 % 11.20% 11.53% 23.69 % 14.26 % 5.77% 21.17 % 13.13 % 13.63 % 18.72 % 10.11% 17.86 % 18.05 % 13.78 % 11.89% 21.95 % 20.08 % 12.27

30 % % % %

Net Profit Margin 2004 Net Profit Margin 2007 40.00% 30.00% 20.00% 10.00% Sun Pharma Ranbaxy Glenmark

Net Profit Margin 2005 Net Profit Margin 2008

Net Profit Margin 2006

Aurobindo

Dishman

Lupin

Divis

Avantis

Piramal

Biocon

Pfizer

0.00% -10.00% -20.00% -30.00% -40.00% -50.00%

DRL

Torrent

Novatis

Cipla

Cadila

Matrix

Aztra

Wyetn

Wockhardt

Abbot

IPCA

GSK

FDC

Merck

31 Return on Total Assets (ROA) 2005 2006 2007 2008 34.96 % 44.27% 50.28% 48.56% 19.61 % 20.71% 19.35% 16.91% 72.74 133.39 % 119.68% % 157.52% 0.85% 13.93% 50.00% 19.07% 19.44 % 6.91% 11.15% 17.10% 15.68 % 13.82% 25.06% 35.54% 8.10% 13.90% 18.84% 20.79% 16.90 % 15.91% 13.98% 22.09% 10.38 % 9.92% 14.81% 31.27% 13.37 % 15.27% 15.54% 16.58% 38.38 % 24.74% 14.38% 16.58% 40.61 % 40.35% 44.99% 35.47% 24.06 % 29.13% 44.97% 146.64% 20.27 % 23.88% 11.13% -28.78% 33.23 % 46.84% 41.79% 53.74% 12.26 % 10.34% 14.77% 18.89% 32.93 % 43.08% 74.01% 69.78% 2.43% 4.28% 11.91% 12.51% 42.26 % 83.91% 67.90% 77.30% 38.58 % 33.25% 20.92% 17.99% 11.77% 14.56% 14.50% 12.53% 12.55 % 9.64% 15.33% 14.88% 25.92 % 32.42% 23.18% 22.17% 56.56 % 47.91% 40.50% 29.15% 53.67 131.80 % 55.72% % 63.33%

2004 Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck 39.10% 18.94% 39.95% 23.21% 41.46% 17.71% 10.36% 25.80% 11.76% 13.17% 36.08% 30.36% 14.13% 27.98% 24.23% 18.41% 30.86% 10.73% 60.48% 30.29% 9.86% 16.81% 38.39% 109.54 % 25.51%

32
Return on Total Assets (ROA) 2004 Return on Total Assets (ROA) 2007 200.00% Return on Total Assets (ROA) 2005 Return on Total Assets (ROA) 2008 Return on Total Assets (ROA) 2006

150.00%

100.00%

50.00%

0.00%
Ph ar m a Ci pl a G SK D Ra RL nb ax y D iv is Lu p Pi in ra G ma len l m ar Ca k di Bi l a oc A on va nt is Pf iz M er at ri x A ztr To a rre n W t A ye ur t n ob in N do ov W oc atis kh a D r dt ish m a IP n CA FD C A bb o M t er ck

-50.00%

Su n

33 Return on Equity (ROE) 2005 2006 2007 2008 27.35 32.26 26.04 % % % 24.22% 26.52 30.78 20.70 % % % 19.20% 35.64 52.31 46.43 % % % 43.65% 27.14 3.41% 9.92% % 10.28% 20.14 16.01 % 8.51% % 23.52% 23.48 20.56 35.41 % % % 40.63% 17.08 28.33 33.44 % % % 33.66% 31.15 17.65 17.85 % % % 29.93% 22.14 30.40 % 21.11% % 37.83% 21.39 22.52 23.20 % % % 22.11% 24.92 16.65 16.84 % % % 22.11% 36.75 30.79 28.59 % % % 20.32% 15.89 19.85 25.57 % % % 53.23% 20.87 20.98 10.18 % % % -43.07% 26.96 33.85 34.39 % % % 38.58% 15.52 17.21 24.33 % % % 26.57% 18.20 28.29 36.05 % % % 31.50% 24.33 4.23% 8.09% % 23.36% 20.09 28.63 21.38 % % % 20.51% 33.96 29.62 22.33 % % % 20.84% 20.83 27.00 % % 23.11% 13.58% 23.40 16.81 25.01 % % % 23.28% 22.87 24.10 19.41 % % % 17.39% 27.34 23.79 29.62 % % % 27.96%

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot

2004 30.14 % 24.47 % 25.30 % 13.84 % 34.17 % 27.99 % 22.04 % 55.35 % 17.87 % 24.41 % 23.08 % 32.40 % 9.92% 70.11% 25.07 % 20.82 % 21.51 % 17.37 % 36.37 % 28.17 % 30.34 % 29.03 % 32.87 % 54.83 %

34 Merck 20.20 % 29.33 % 26.54 % 35.37 % 16.27%

Return on Equity (ROE) 2004 Return on Equity (ROE) 2007 80.00% 60.00% 40.00% 20.00% 0.00% -20.00% -40.00% -60.00%

Return on Equity (ROE) 2005 Return on Equity (ROE) 2008

Return on Equity (ROE) 2006

dc Ranbaxy Sun Pharma Aurobindo Glenmark Dishman Divis Lupin Avantis Pfizer

Piramal

Biocon

DRL

Torrent

Novatis

Cipla

Cadila

Matrix

Aztra

Wyetn

Wockhardt

Abbot

IPCA

GSK

FDC

Merck

35
Adjusted Earnings per Share 2005 2006 2007 32.589 50.880 65.949 68.262 101.324 42.971 37.728 58.587 65.494 18.481 58.527 141.359 27.152 10.863 20.178 51.942 54.657 148.675 21.293 45.441 36.979 44.737 40.933 45.103 26.762 28.345 56.997 41.847 52.803 32.596 34.616 26.700 31.672 64.464 67.768 73.513 19.223 25.044 37.681 43.492 59.349 32.313 51.520 86.120 97.480 25.005 15.559 26.701 19.428 30.559 40.726 13.127 27.503 84.792 35.757 60.488 51.990 38.670 43.640 39.028 21.318 33.372 42.867 31.604 25.952 48.624 28.195 36.243 33.413 38.724 38.272 47.291 43.173 46.922 82.444

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

2004 55.889 51.157 22.676 74.022 42.719 50.047 50.047 59.134 35.443 41.943 24.932 42.579 10.826 101.317 49.160 30.232 24.177 51.777 58.210 36.736 18.272 64.024 68.135 67.559 23.511

2008 98.407 46.277 70.132 58.798 31.997 275.089 54.016 72.792 156.425 37.102 100.670 61.003 115.700 (94.709) 122.920 36.760 35.823 106.094 57.566 39.084 38.507 56.373 33.855 45.219 40.819

Adjusted Earnings per Share 2004 Adjusted Earnings per Share 2007 300.000 250.000 200.000 150.000 100.000 50.000 0.000 (50.000) (100.000) (150.000)

Adjusted Earnings per Share 2005 Adjusted Earnings per Share 2008

Adjusted Earnings per Share 2006

Ranbaxy

Sun Pharma

Aurobindo

Glenmark

Wockhardt

Dishman

Divis

Avantis

Lupin

Piramal

Biocon

Pfizer

DRL

Torrent

Cadila

Matrix

Wyetn

Novatis

Cipla

Aztra

Abbot

IPCA

GSK

FDC

Merck

36
Price/Earnings Ratio 2005 2006 2007 28.63 33.60 31.18 18.74 32.32 27.46 19.06 24.84 17.12 79.99 48.57 10.30 36.65 79.60 34.88 19.18 34.32 20.68 25.69 24.51 16.39 52.91 22.21 23.55 19.18 38.05 18.01 17.70 44.33 19.03 29.61 9.50 16.06 55.58 18.02 33.37 28.47 46.12 23.73 27.91 48.24 23.20 28.83 13.52 13.48 53.62 20.66 30.70 16.75 21.29 27.08 31.29 14.66 11.18 16.01 20.39 24.74 12.38 9.30

Sun Pharma Cipla GSK DRL Ranbaxy Divis Lupin Piramal Glenmark Cadila Biocon Avantis Pfizer Matrix Aztra Torrent Wyetn Aurobindo Novatis Wockhardt Dishman IPCA FDC Abbot Merck

2004 23.32 22.93 26.76 26.33 22.00 29.02 29.02 20.27 21.66 38.83 16.82 42.98 13.48 10.78 14.87 21.52 29.62 10.16 15.88

2008 24.98 23.77 14.88 20.11 27.41 23.07 9.23 31.26 13.66 8.55 12.54 5.92 21.14 7.66 12.74 5.49 13.63 36.00 10.95 8.31 8.17

Price/Earnings Ratio 2004 Price/Earnings Ratio 2007 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00

Price/Earnings Ratio 2005 Price/Earnings Ratio 2008

Price/Earnings Ratio 2006

Su

Ph ar m a Ci pl a G SK D Ra RL nb ax y D iv i Lu s pi Pi n r G ama len l m a Ca rk di B i la oc A on va nt i Pf s iz M er at rix A ztr To a rre W nt A ye ur tn ob in N do W ova oc ti s kh a D r dt ish m a IP n CA FD C A bb o M t er ck

n

37

38 PROFITABILITY RATIO: Financial Ratio Formula Return on Total Assets Operating profit before income tax + interest expense/ Average total assets Operating profit & extraordinary items after income tax minus Preference dividends / Average ordinary shareholders’ equity Gross Profit / Net Sales Measurements Measures rate of return earned through operating total assets provided by both creditors and owners Measures rate of return earned on assets provided by owners

Return on ordinary shareholders’ equity Gross Profit Margin Profit Margin

Profitability of trading and mark-up Measures net Operating profit after income profitability of each tax / Net Sales Revenue rupees of sales

39 MARKET BASED FINANCIAL RATIO: Financial Ratio Earnings per share Formula Operating profits after income tax less Preference dividends / Weighted average number of ordinary shares issued Market price per ordinary share / Earnings per ordinary share Measurements Measures profit earned on each ordinary share

Measures the amount investors are paying for a rupees of earnings Measures the return Earnings per ordinary share to an investor Earning Yield / Market price per ordinary purchasing shares at share the current market price. Measures the rate of Annual dividend per ordinary return to shareholders Dividend Yield share / Market price per based on current ordinary share market price. Measures the Total dividend per ordinary percentage of profits Dividend Payout share / Market price per paid out to ordinary ordinary share shareholders Ordinary shareholders’ Net Asset Measure the assets equity / No of ordinary Backing (NTA) backing per share shares Price-earnings ratio

40 LIQUIDITY RATIO: Financial Ratio Formula Measurements A measure of shortterm liquidity. Current Assets / Current Indicates the ability liabilities of entity to meet its short-term debts from its current assets A more rigorous measure of shortterm liquidity. Current Assets less Indicates the ability inventory / Current liabilities of the entity to meet unexpected demands from liquid current asses

Current Ratio

Quick Ratio

41

ASSET MANAGEMENT/UTILISATION/ACTIVITY RATIOS: Financial Ratio Measurements Measures the effectiveness of Receivables Net sales revenue / Average collections; used to turnover receivables balance evaluate whether receivables balance is excessive Measures the Average receivables average number of Average balance x 365 / Net sales days taken by an collection period revenue entity to collect its receivables Indicates the liquidity of inventory. Measures the Inventory Cost of goods sold / number of times turnover Average inventory balance inventory was sold on the average during the period Measures the effectiveness of an Total Asset Net sales revenue / Average entity in using its turnover ratio total assets assets during the period. Measure the Turnover of efficiency of the Net Sales / Fixed Assets Fixed Assets usage of fixed assets in generating sales Formula

42 GEARING/FINANCIAL STABILITY RATIO: Financial Ratio Measurements Measures percentage of assets Debt ratio Total Liabilities / Total assets provided by creditors and extent of using gearing Measures percentage of assets Equity ratio or Total shareholders’ equity / provided by Proprietary ratio Total assets shareholders and the extent of using gearing The reciprocal of the Capitalization Total assets / Total equity ratio and thus ratio shareholders’ equity measures the same thing Operating profit before Measures the ability Times interest income tax + Interest of the entity to meet earned expense / Interest expense its interest payments + Interest capitalized out of current profits. Formula

43 CASH SUFFICIENCY RATIO: Financial Ratio Cash flow adequacy Formula Cash from operations / Longterm debt paid + Assets acquired + Dividends paid Long-term debt repayments / Cash from operations Measurements Measures the entity’s ability to cover its main cash requirements

Long-term debt repayment Dividend payment

Reinvestment

Debt coverage

Measures the entity’s ability to cover its long-term debt out of cash from operations Dividends paid / Measures the entity’s Cash from ability to cover its operations dividend payment Measures the entity’s Non-current asset ability to pay for its payments / Cash non-current assets from operations out of cash from operations Measures the Total long-term debt / payback period for Cash from coverage of longoperations term debt.

44 CASH FLOW EFFICIENCY RATIO: Financial Ratio Cash flow to sales Formula Measurements Measures ability to Cash from convert sales operations / Net revenue into cash sales revenue flows An index measuring Cash from the relationship operations / between profit from Operating profit operations and after income tax operating cash flows Cash from Measures the operation + Tax operating cash flow paid + Interest paid return on assets / Average total before interest and assets tax

Operation index

Cash flow return on assets

45
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Chapter 7 -- Conclusions

Among the companies studied the quick ratio was at comfortable level for all the companies except Glenmark (1.58, Aurobindo 1.48) for the year 2008 show that the Indian pharmaceutical companies are better solvent. The asset to turnover ratio of GloxoSmithklin (4,.78), Pfizer (4.3), Novatis (5.04), are the top 3 three and have better asset utilization compared to Dishman (0.78), matrix (0.66), Cipla (1.03), Aurobindo (1.06), Divis (1.08) and these companies could improve the financials by better asset utilization. Dept to equity ratio of Aurobino (2.0), Ranbaxy (1.63) are highly leveraged and those of Abbot (0.41), Wyeth (0.49), Aztra (0.45) GloxoSmithkline (0.53) are least leveraged. The net profit margin of Sun pharmaceuticals (30.88%), GloxoSmithkline (32.94%), and Divis (32.91%) are most profitability ratio and those of Matrix (-43.85%), Abbot (8.55%), Ranbaxy (12.2%), Aurobindo (11.78%), IPCA (12.14%) have low profit margin in the operation. The retun on equty is higher for Pfizer (53.2%), Divis (40.63%), GloxoSmithkline (43.65%) are giving high return on equity and those of Matrix (-43.07%), Dr. Reddy’s (10.28%), Dishman (13.58%) are much lower.

46
---------------------------------------------------------------------------------------------------------------------------------

Reference
--------------------------------------------------------------------------------------------------------------------------------

1.

Prof. C. Jeevanadam, Sardar Vallabhbhai Institute of Textile Management, Coimbatore, Notes on Financial Statements, Short Term Programme on Financial Management at Bannari Amman Institute of Technology, Sathyamangalam on 05.01.2005. Principles of Accounting, Dr. Vinayagam, P. C. Mani, K. L. Nagarajan, Kalyani Publications, New Delhi, 2002. Financial Management, Dr. R. S. Kulsherestha, Kalyani Publications, New Delhi,2002 Dr. B. K. Behra, Class notes on Costing and Management,IIT-Delhi,2003 Corporate Finance: Theory and Practice By S. R. Vishwanath The Indian Pharmaceutical Industry – An Overview of Internal Efficiencies using Data Envelopment Analysis - Haritha Saranga1 and B.V. Phani Annual reports of Indian pharmaceutical companies and consolidated balance sheets published as a part of Annual reports. Scrip report on Indian Pharmaceutical Industry. Research reports published by various agencies and brokerage houses on Indian Pharmaceutical Industries.

2. 3. 4. 5. 6. 7. 8. 9.