PART A

1. INDUSTRY PROFILE:
All business organizations prepare financial statements after every financial year. The financial statements clearly indicate the financial position of the business concern. Published financial statements may be of considerable interest to shareholders, trade organizations, business analyst and many others. Each of these groups may be interest in different aspects of the business concern according to their own purposes.

The basis for financial planning, analysis and decision making is the financial information. Financial information is needed to predict, compare and evaluate the firms earning ability. It is also required to aid in economic decision making investment and financing decision making. The financial information of an enterprise is contained in the financial statements or accounting reports.

The financial analysis is the process of analyzing the financial strengths and weaknesses of the firm by properly establishing the relationships between the items of the balance sheet and profit and loss account. It is the study of the performance of the unit and therefore is aimed at financial performance of an individual unit. This report deals with the financial performance of HDFC Standard Life Insurance Company Ltd. for the financial year 2008 to 2010.

This report briefly explains the subject matter (financial statements analysis) of the study conducted. The basis for the financial planning, analysis and decision-making is the financial information. Financial information is needed to predict, compare and evaluate the firms earning ability. It is also required to aid in economic decision making investment and financing decision making. The financial information of an enterprise is contained in the financial statements or accounting reports.

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The financial analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and profit and loss account. It is the study of the performance of the unit and therefore is aimed at the financial performance in an individual unit. This is therefore aimed at analyzing the performance, trend and the areas of strengths and weaknesses of the firm. The objective of the study was to thoroughly analyze the companys performance and the financial position over the years i.e., the direction and the trend in which the company is performing and the various and their uses. The balance sheet and the income statement of the company provide some extremely useful information to the extent that the balance sheet mirrors the financial position on a given date in terms of the structure of assets, liabilities and owners equity etc. The comparison of the above statements is therefore an important aid in determining the companys position and performance over a period of time. The first task in the analysis is the selection of the information relevant to the decision under consideration from the total information contained in the financial statements. The second task is to arrange the information in a way to highlight comparison among different variables from balance sheet and income statement of different years. The final step is that of drawing inferences and conclusions. The best tool used for the purpose of finding out trends of an organizations growth over a period of time is Ratio Analysis. The variables in the balance sheet provides considerable information which is eventually helpful for the organization as the trends can be studied and it forms the basis of drawing important inferences. Working Capital is the capital required for the day-to-day operations of the business it maybe regarded as the life blood of business. Its effective position can do much to ensure the success of a business, while its inefficient management can lead not only to loss of profit but also the ultimate downfall the study of working capital management is important because of its close relation with the day to day operations of the business Therefore to keep healthy management of working capital business needs professionalism and good skill thus the management of working capital varies from industry to industry. HDFC Standard Life Insurance Company Ltd. has been taken for the case study to analyze the financial aspects to working capital for the better understanding of the financial standing of the Company.

2. THIS ABOUT COMPANY PROFILE

HDFC Standard Life Insurance Co. Ltd. was incorporated on 14th august 2000. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.) India and U.K. based Standard Life Company

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HDFC Standard Life, one of Indias leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), Indias leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom.

HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others. HDFC Standard Lifes product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health. Customers have the added advantage of customizing the plans, by adding optional benefits called riders, at a nominal price. The company currently has 32 retail and 4 group products in its portfolio, along with five optional rider benefits catering to the savings, investment, protection and retirement needs of customers.

HDFC Standard Live continues to have one of the widest reaches among new insurance companies with 568 branches servicing customer needs in over 700 cities and towns. The company has a strong presence in its existing markets with a base of 2,00,000 Financial Consultants.

HDFC Standard Life Insurance Company Profile

The MD and CEO of HDFC Standard Life Mr. Deepak Satwalekar, has given the company new directions and has helped the company achieve the status it currently enjoys. HDFC Standard Life brings to you a whole range of insurance solutions be it group or individual or NAV services for corporations; they can be easily customized as per specific needs.

HDFC Standard Life Insurance India boasts of covering around 8.7 lakh lives by March'2007. The gross incomes standing at whopping Rs. 2,856 chores, HDFC Standard Life Insurance Corporation is sure to become one of the leaders Page 3

and the first

preference

for

any

life

insurance

customer. The Banc assurance partners of

HDFC Standard Life Insurance Co Ltd are HDFC, HDFC Bank India Limited, Union Bank of India, Indian Bank, Bank of Baroda, Saraswat Bank and Bajaj Capital.

MARKET OVERVIEW: The Indian life insurance industry is rapidly evolving. It has emerged as one of the fastest developing emerging markets for life insurance in the world. The industry has become fiercely competitive with the entry of private sector companies including major multinational insurers after sector deregulation. Indias share of the world life insurance business has doubled within 5 years since liberalization raising Indias global ranking to 17 in 2006 from 20 in 2000. From 0.5% of the worlds life insurance business in 2000 India today accounts for 1.02% of the worlds premium reflecting that the insurance business in India has more than just doubled within just 5 years. Nonetheless insurance as a business is growing faster than Indias GDP. Life insurance premium which accounted for 1.77 % of the countrys GDP in 2000 contributed 2.53% to the GDP for the 2005- 2006 fiscal year. An expert group of Confederation of Indian Industry (CII) has projected that in 2016 the size of Indian insurance market will grow to Rs.145000 Crores. This translates into an average annual growth of 19.6%. CII expects an annual growth in the pension business which is projected to rise at 29% per annum, effectively translating to an expansion of over 12 times over a period of a few years by 2016. The premium business from pension schemes is projected to grow by 22.5% within the same period. There is a large scope for Indian insurance sector to grow; only 20 lakh advisors are available for 1.22 Billion Indians. 70% of the population is below the age of 35years. Over 100 crore people in India do not have insurance.

B. Nature of the business carried

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3. Financial cushion in case of an eventuality

Types of protection plans:1. HDFC TERM Assurance plan

2. HDFC Premium Guarantee Plan

3. HDFC Loan Cover Term Assurance Plan

Childrens Plans:-

1. To Fulfill Childrens dreams. 2. Economic support when child needs it most.

RETIREMENT PLANS:1. Monetary Security

2. Financial independence even after retirement

3. To live carefree in golden years. Saving & Investment Plans: 1. Dual benefit of protection and long term savings

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2. Provide an assured sum for future needs

3. Inculcate a habit of regular savings.

Health Plans 1. To secure health costs

2. Financial independence despite illnesses

3. Meeting medical expenses effortlessly

Types 1. HDFC Critical Care Plan

2. HDFC Surgicare Plan

C. vision, mission and quality policy Mission:

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several things like-

1.

Customer service of the highest order

2. Value for money for customers 3. Professionalism in carrying out business 4. Innovative products to cater to different needs of different customers

5. Use of technology to improve service standards 6. Increasing market share

Vision:
Our vision is to help our customers around the world feel confident about their future wealth and well being. 'To be the most successful and admired life insurance company, which means the most trusted Company, the easiest to deal with, offer the best value for money, and set the standards in the Industry'. 'The most obvious choice for all'. Quality Statement: To maintain top quality in marketing and communications made through the website marketing. The Company strongly believes there is always a scope for improvement on the existing products and services. Based on this belief it offers solutions that is focused on constant improvement of products and services.

D. PRODUCT/ SERVICE PROFILE: The various products by HDFC Standard Life include:

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INDIVIDUAL

PRODUCTS:

Protection Plans
o o o

Term Assurance Plan Loan Cover Term Assurance Plan

Investment Plans: o Pension Plans: o o o Savings Plans: Personal Pension Plan Unit Linked Pension Plan Unit Linked Pension Plus Single Premium Whole Life Plan

o Endowment Assurance Plan o Unit Linked Endowment o Unit Linked Endowment Plus o Money Back Plan o Children's Plan o Unit Linked Youngster o Unit Linked Youngster Plus
GROUP PRODUCTS

o Group Term Insurance o Group Variable Term Insurance o Group Unit Linked Plan
OTHER PRODUCTS o o o Rural Products Social Development Insurance Plan Tax Benefit Schemes

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The premium payment options available to the customers vary from online payment to direct desk payments at the HDFC Standard Life Branches, by courier services or in drop boxes provided. You can also pay by ECS or Automatic Debit System or credit cards or standing instruction mandate. HDFC Standard Life Insurance Company is a customer oriented corporation and aim at complete customer satisfaction.

The lapsation and renewal policy of HDFC Standard Life are clearly defined on the official website. Online renewal forms are also available. For any change in personal details like the contact details or the nominee of the policy or policy benefits, online servicing is also available. Even the claim procedure has been simplified since affect of the loss life is irreparable and is thus fully understandable at HDFC Standard Life. A completely hassle-free process has been formulated to provide maximum convenience.

Facility of HDFC Standard Life Insurance Company Ltd.

Protection Plans HDFC Term Assurance Plan HDFC Premium Guarantee Plan HDFC Loan Cover Term Assurance Plan HDFC Home Loan Protection Plan

Children's Plans HDFC SLIC Youngster Super II HDFC SLIC Youngster Super Premium HDFC Children's Plan

Health Plans HDFC Critical Care Plan HDFC Surgicare Plan

Savings & Investment Plans HDFC SLIC Crest HDFC SLIC ProGrowth Super II HDFC SL ProGrowth Maximiser

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HDFC Endowment Assurance Plan HDFC SL New Money Back Plan HDFC Single Premium Whole of Life Insurance Plan HDFC Assurance Plan HDFC Savings Assurance Plan

Retirement Plans HDFC Personal Pension Plan HDFC Immediate Annuity

Rural Products HDFC GraminBima Kalyan Yojana HDFC GraminBima Mitra Yojana HDFC BimaBachat Yojana

E. Area of operation:
HDFC Standard Life continues to have one of the widest reaches among new insurance Companies. The company strengthened its number of offices from 103 to 572 across the country in less than 3 years. Through these offices, the company today services customer needs in over 730 cities and towns. HDFCSLIC is head quartered at Mumbai and has established its presence in The states of:

Andhra Pradesh Bihar Delhi Gujarat Himachal Pradesh Karnataka

Assam Chatthisgarh Goa Haryana Jharakhand Kerala

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Madhya Pradesh Meghalaya Punjab Tamil Nadu Uttaranchal

Maharashtra Orissa Rajasthan Uttar Pradesh West Bengal

Some of the cities in which HDFCSLIC has its branches are:

Ahmedabad, Chennai, Hyderabad, Jalandar, Ludiana, Kolkata, Mangalore, Mysore, Noida, Pune, Trivandrum,

Bangalore, Chandigarh, Jaipur, Jodhpur, Kanpur, Lucknow, Meerut New Delhi, Patna, Trichur, Vishakapatnam, etc

HDFC Ltd.

HDFC was incorporated in 1977 with the primary objective of meeting a social need - that of

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Promoting home ownership by providing long-term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 100 million. HDFC Founder

F. Ownership pattern:

Hasmukhbhai Parekh, Founder and Chairman

Business Objectives
The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner, and to promote home ownership. Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets.

Subsidiaries and associate Companies

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 HDFC Bank

HDFC Mutual Fund

HDFC Standard Life Insurance Company

HDFC Sales

HDFC General Insurance

Other Companies Co-Promoted By HDFC

Financial Information with regard to Subsidiary Companies

HDFC is a unique example of a housing finance company which has demonstrated the viability of market-oriented housing finance in a developing country. It is viewed as an innovative institution and a market leader in the housing finance sector in India. The World Bank considers HDFC a model private sector housing finance company in developing countries and a provider of technical assistance for new and existing institutions, in India and abroad. HDFCs executives have undertaken consultancy assignments related to housing finance and urban development on behalf of multilateral agencies all over the world.

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G. Competitors information:

Competition
Name Last Price Market Cap.
(Rs. cr.)

Net Interest Income 19,928.21 25,974.05 15,154.81 4,303.56 3,589.36 4,041.74 4,052.03 2,694.06 2,217.69 3,713.13 2,446.01 1,218.41 2,370.84 536.26 1,064.84 906.42 -

Net Profit

Total Assets

HDFC Bank ICICI Bank Axis Bank Kotak Mahindra IndusInd Bank Yes Bank Federal Bank ING Vysya Bank Karur Vysya JK Bank South Ind Bk StanChart IDR City Union Bank Karnataka Bank DCB Lakshmi Vilas Dhanlaxmi Bank Goldman BEES

519.30 904.90 1,172.10 566.50 314.30 349.15 415.45 338.70 374.65 827.65 26.30 80.15 46.75 101.00 46.75 89.40 72.15 2,675.95

121,785.35 104,312.34 48,392.94 41,907.70 14,695.83 12,313.12 7,106.17 5,083.82 4,015.51 4,012.27 2,981.76 1,923.60 1,904.39 1,901.80 936.43 871.88 614.26 274.56

3,926.39 5,151.38 3,388.49 818.18 577.32 727.13 587.08 318.65 415.59 615.20 292.56 215.05 204.61 21.43 101.14 26.06 -

277,352.61 406,233.67 242,713.37 50,850.66 45,635.85 59,007.00 51,456.37 39,013.98 28,224.84 50,508.15 32,820.21 1,945,725.80 14,591.52 31,693.01 7,372.33 13,301.19 14,268.16 -

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H. Infrastructural facilities: The infrastructure of the organization is good. AC is available for the whole organization. Generator facility is also available. There is a canteen within that organization where tea, coffee, fast food are available free of cost. The rest rooms are also neat and clean. The light and fresh air comes in that floor. Lifts facility is also available for both employees and customers and visitors. Each employee is having one computer for their work. For managerial level position well designed glass cabins are there. The training rooms are nicely designed, sitting arrangement is good, meeting room and conference hall is also available.

I. Achievements / Awards
HDFC Bank began operations in 1995 with a simple mission: to be a"World-class Indian Bank". We realised that only a single-minded focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal. It is extremely gratifying that our efforts towards providing customer convenience have been appreciated both nationally and internationally. 2012

5th Loyalty Summit Customer and Brand Loyalty award Skoch foundation 2012 ICAI Awards 2011 Excellence in Financial Reporting SHG/JLG linkage programme

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2011

Outlook Money Best Bank Award 2011 Best Commercial Vehicle Financier

- Best Bank - Runner Up

- Driving Positive Change

Businessworld Best - Best Bank Bank award BCI Continuity & Resilience Award Financial Express Best Bank Survey 2010-11 CNBC TV18's Best - Best Bank Bank & Financial Institution Awards Dun & Bradstreet Banking Awards 2011 ISACA 2011 award Best practices in IT Governance and IT Security for IT Governance IBA Productivity Excellence Awards New Channel Adopter (Private Sector) Best Private Sector Bank - SME Financing - Mr. Aditya Puri, Outstanding Finance Professional - Best in Strength and Soundness - 2nd Best in the Private Sector - Most Effective Recovery of the Year

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2011 DSCI (Data Security Council of India) Excellence Awards 2011 Euromoney Awards Best Bank in India for Excellence 2011 FINANCE ASIA Country Awards 2011: India Asian Banker BloombergUTV's Financial Leadership Awards 2011 IBA Banking Technology Awards 2010 Winner 1) Technology Bank of the Year 2) Best Online Bank 3) Best Customer Initiative 4) Best Use of Business Intelligence 5) Best Risk Management System Runners Up Best Financial Inclusion IDC FIIA Awards 2011 Excellence in Customer Experience - BEST BANK - BEST CASH MANAGEMENT BANK - BEST TRADE FINANCE BANK Strongest Bank in Asia Pacific Best Bank Security in Bank

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2010

Outlook Money 2010 Awards

Best Bank

Businessworld Best Best Bank (Large) Bank Awards 2010 Teacher's Achievement Awards 2010 (Business) The Banker and PWM 2010 Global Private Banking Awards Economic Times Awards for Corporate Excellence 2010 Forbes Asia NDTV Business Leadership Awards 2010 The Banker Magazine World's Top 1000 Banks Fab 50 Companies - 5th year in a row Best Private Sector Bank Business Leader of the Year - Mr. Aditya Puri Best Private Bank in India Mr. Aditya Puri

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MIS Asia IT Excellence Award 2010 Dun & Bradstreet Banking Awards 2010

BEST BOTTOM-LINE I.T. Category

Overall Best Bank Best Private Sector Bank Best Private Sector Bank in SME Financing

Institutional Investor Magazine Poll

HDFC Bank MD, Mr. Aditya Puri among "Asian Captains of Finance 2010"

IDRBT Technology Winner - 1) IT Infrastructure 2) Use of IT within the Bank 2009 Awards ACI Excellence Awards 2010 FE-EVI Green Business Leadership Award Celent's 2010 Banking Innovation Award Avaya Global Connect 2010 Forbes Top 2000 Our Bank at 632nd position and among 130 Global High Performers Customer Responsiveness Award - Banking & Financial Services category Model Bank Award Best performer in the Banking category Runners-up - IT Governance (Large Banks) Highly Commended - Asia Pacific HDFC Bank

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Companies

Financial Express Ernst & Young Survey 2009-10

Best New Private Sector Bank Best in Growth Best in strength

Asian Banker Excellence Awards 2010 Best Retail Bank in India Excellence in Automobile Lending Best M&A Integration Technology Implementation The Asset Triple A Awards Euromoney Private Banking and Wealth Management Poll 2010 Financial Insights Innovation Awards 2010 Global Finance Award Best Trade Finance Provider in India for 2010 Innovation in Branch Operations - Server Consolidation Project 1) Best Local Bank in India (second year in a row) 2) Best Private Banking Services overall (moved up from No. 2 last year) Best Cash Management Bank in India

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2 Banking Technology Awards 2009

1) Best Risk Management Initiative and 2) Best Use of Business Intelligence.

SPJIMR Marketing 2nd Prize Impact Awards (SMIA) 2010 Business Today Best Employer Survey Listed in top 10 Best Employers in the country

We are aware that all these awards are mere milestones in the continuing, never-ending journey of providing excellent service to our customers. We are confident, however, that with your feedback and support, we will be able to maintain and improve our services.

J. Work Flow Model

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