Project :

Introduce new Insurance Solution Product (Bancs)

Company Name : TCS

Presented by :

Jaydip Chakrabarti(18) Shiladitya Basu(34) Soumen Khanra (36) Sourav Roy(38)

MBA(PT) 2009-12

Project Details : Changing demographics have increased risk factor in transactions. As a result, insurers need to respond with systems that can access risks, underwrite new products and provide unstinting customer service.TCS BaNCS Insurance Solution provides a holistic suite of insurance solutions helps to meet the varied expectations of your enterprise as well as your customers. The built-up and digitized insurance processes in this solution suite enable to become bigger, leaner, and smarter. The TCS BaNCS Insurance Solution helps with the following:

Flexibility and speed to market, enabling the quick launch of new products and channels and adaptation to the changing regulatory environment Anytime, anywhere access and high availability of the system, improving productivity Smooth enterprise integration through an SOA-enabled architecture Uniform, accurate and timely service delivery across all lines of business and channels The components in our solution suite include the following: Property and Casualty: Non-life Insurance and General Insurance Workers Compensation Extended Warranty Individual Life and Group Life Insurance Reinsurance Product Workbench: Product Configurator, Business Rule Engine Agents Workbench
Insurance Solution Product Bancs Cost(Rs. In Cr)

Project Name

Project Cost No. of Resources Manufacturing Expenses Material Consumed Selling Expenses Administrative Expenses Total Time

100 200 60 5 5 30 100 12 months

Previous Years Balance Sheet :

Particulars Liabilities Share Capital Reserves & Surplus Net Worth Secured Loans Unsecured Loans TOTAL LIABILITIES Assets Gross Block (-) Acc. Depreciation Net Block Capital Work in Progress. Investments. Inventories Sundry Debtors Cash And Bank Loans And Advances Total Current Assets Current Liabilities Provisions Total Current Liabilities NET CURRENT ASSETS Misc. Expenses TOTAL ASSETS (A+B+C+D+E) Mar'11 12 Months 295.72 19,283.77 19,579.49 35.87 5.25 19,620.61 Mar'10 12 Months 295.72 14,820.90 15,116.62 29.25 6.49 15,152.36 Mar'09 12 Months 197.86 13,248.39 13,446.25 32.63 7.74 13,486.62 Mar'08 12 Months 197.86 10,806.9 5 11,004.8 1 9.27 8.98 11,023.0 6 3,240.64 1,300.11 1,940.53 889.74 4,509.33 17.19 3,747.01 527.52 3,104.74 7,396.46 2,525.56 1,187.44 3,713.00 3,683.46 0 11,023.0 6 Mar'07 12 Months 97.86 7,961.13 8,058.99 41.76 8.98 8,109.73

6,030.16 2,607.98 3,422.18 1,345.37 5,795.49 5.37 4,806.67 5,604.52 5,063.51 15,480.07 3,932.39 2,490.11 6,422.50 9,057.57 0 19,620.61

4,871.21 2,110.69 2,760.52 940.72 7,893.39 6.78 3,332.30 3,396.16 4,101.84 10,837.08 3,352.74 3,926.61 7,279.35 3,557.73 0 15,152.36

4,359.24 1,690.16 2,669.08 685.13 5,936.03 16.95 3,717.73 1,605.26 3,910.85 9,250.79 3,604.18 1,450.23 5,054.41 4,196.38 0 13,486.62

2,315.36 854.75 1,460.61 757.85 3,252.04 12.06 2,799.80 557.14 1,925.74 5,294.74 1,750.46 905.05 2,655.51 2,639.23 0 8,109.73

Projected Changes in Balance sheet : Particulars Liabilities Share Capital Reserves & Surplus Net Worth Secured Loans Unsecured Loans TOTAL LIABILITIES Assets Gross Block (-) Acc. Depreciation Net Block Capital Work in Progress. Investments. Inventories Sundry Debtors Cash And Bank Loans And Advances Total Current Assets Current Liabilities Provisions Total Current Liabilities NET CURRENT ASSETS Misc. Expenses TOTAL ASSETS (A+B+C+D+E) Mar'11 12 Months 295.72 19,283.77 19,579.49 35.87 5.25 19,620.61 6,030.16 2,607.98 3,422.18 1,345.37 5,795.49 5.37 4,806.67 5,604.52 5,063.51 15,480.07 3,932.39 2,490.11 6,422.50 9,057.57 0 19,620.61 Projected Changes

19382.77 19678.49 36.87 19,720.61

5,163.51 15,580.07

9,157.57 19,720.61

Profit & Loss Projection :

Mar'11 12 Months INCOME: Sales Turnover Excise Duty NET SALES Other Income TOTAL INCOME EXPENDITURE: Manufacturing Expenses Material Consumed Personal Expenses Selling Expenses Administrative Expenses Expenses Capitalised Provisions Made TOTAL EXPENDITURE Operating Profit EBITDA Depreciation Other Write-offs EBIT Interest EBT Taxes Profit and Loss for the Year Non Recurring Items Other Non Cash Adjustments Other Adjustments REPORTED PAT KEY ITEMS Preference Dividend Equity Dividend Equity Dividend (%) Shares in Issue (Lakhs) EPS - Annualised (Rs) 29,275.41 0 29,275.41 0 29,750.83 8,375.57 18.62 10,190.31 15.73 1,903.36 0 0 20,503.59 8,771.82 9,247.24 537.82 0 8,709.42 20.01 8,689.41 1,130.44 7,558.97 11.02 0 0 7,569.99 11 2,740.10 1,400.01 19,572.21 38.68 8,435.57 23.62 20.73 1933.36 Projected Values Mar'12

29,475.41 0 29,475.41 0 29,950.83 8,435.57 23.62 10,190.31 20.73 1933.36 0 0 20,603.59 8,971.82 9,447.24 538.2 0 8,809.24 20.1 8,789.14 1130.58 7,658.36 11.02 0 0 7,669.71 11 2,740.10 1,400.01 19,572.21 38.68

20,603.59

538 8,609.24 20.1 8,589.14 1130.5 7,458.64

7,469.99

Viability Analysis :
Through DSCR we can check whether this project is viable or not.

DSCR(Debt Service Coverage Ratio) =

PAT + DEPRECIATION + INTEREST PRINCIPAL + INTERST

= =

7469.99 + 538 + 20.1 5163.51 + 20.1 1.5487

So this project can be financed in terms of DSCR.

NPV Calculation : For this project the required rate of return is 30%. so the net present value is = 200/(1+.3) = 153.84 Cr. Present investment is = 100 Cr. Total profit in Present value = (153.84 100) = 53.84 Cr.

Standard Ratio Analysis :

Current Ratio = Current Asset / Current Liabilities = 15580.07 / 6422.50 = 2.42 Current Ratio is a liquidity ratio that measures company's ability to pay its debt over the next 12 months or its business cycle. Generally, a current ratio of 2:1 is considered to be acceptable. The higher the current ratio is, the more capable the company is to pay its obligations. So after implementing this project also TCS has a good current ration which in turn signifies that they can implement this project. Quick Ratio = (Current Asset - Inventory) / Current Liabilities = (15580.07 - 5.37) / 6422.50 = 2.425 Quick Ratio is an indicator of company's short-term liquidity. It measures the ability to use its quick assets (cash and cash equivalents, marketable securities and accounts receivable) to pay its current liabilities. Ideally, quick ratio should be 1:1.A quick ratio higher than 1:1 indicates that the business can meet its current financial obligations with the available quick funds on hand. For TCS this value is very high. This indicates that TCS is keeping more cash in hand, which may not be that much necessary. Cash Ratio = Cash / Current Liabilities = 5604.52 / 6422.50 = 0.87 Cash Ratio is an indicator of company's short-term liquidity. It measures the ability to use its cash and cash equivalents to pay its current financial obligations.A cash ratio of 0.5:1 or higher is preferred. After implementing this project as well this ratio is quite healthy for TCS. So we can implement this project. Net working capital to Asset ratio = Net Working Capital / Total Asset = 9157.57 / 19720.61= 0.464 This ratio is a good test for corporate distress. A firm with negative working capital is likely to experience problems meeting its short-term obligations because there simply is not enough current assets to cover those obligations. By contrast, a firm with significantly positive working capital rarely has trouble paying its bills. Leverage =Total debt / Total Equity = (41.12 / 295.72) = 0.139 The debt to asset ratio is the percentage of total debt financing the firm uses as compared to the percentage of the firm's total assets. It helps to see how much assets are financed using debt financing.