MIRA INFORM REPORT

Report Date :

30.07.2008

IDENTIFICATION DETAILS

Name :	ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED
Registered Office :	ICICI Bank Towers, Bandra-Kurla Complex, Mumbai – 400 051, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	30.10.2000
Com. Reg. No.:	11-129408
CIN No.: [Company Identification No.]	U67200MH2000PLC129408
TAN No.: [Tax Deduction & Collection Account No.]	MUMI03974F
Legal Form :	A closely held public limited liability company.
Line of Business :	Providing Insurance Services

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 53000000
Status :	Excellent
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a part of ICIC Group having excellent track. General financial position is good. Business is active. Payments are reported as usually made as per commitments. The company can be considered good for normal business dealings.

LOCATIONS

Registered Office :	ICICI Bank Towers, Bandra-Kurla Complex, Mumbai – 400 051, Maharashtra, India
Tel. No.:	91-22-26531414
Fax No.:	91-22-26531230
E-Mail :	vajesh.saxena@icicibank.com vikas.mehta@icicilombard.com
Website :	http://www.icicilombard.com
Corporate Office :	Zenith House Keshav Rao, Khadye Marg, 2^nd Floor, Opp. Race Course, Mahalaxmi, Mumbai – 400 034, Maharashtra, India
Tel. No.:	91-22-2490 6999
E-Mail :	insuranceonline@icicilombard.com

DIRECTORS

Name :	Mr. V K Kamath
Designation :	Director
Address :	930, TPS-IV, Radhika Apartments, Opp. Ravindra Natya Mandir, Prabhadevi, Mumbai – 400 025, Maharashtra, India
Date of Birth/Age :	02.12.1947
Date of Appointment :	30.10.2000
Name :	Mrs. Lalita Dileep Gupte
Designation :	Director
Address :	153-C, Mhaskar Building, Sir Bhalchandra Road, Matunga, Mumbai – 400 019, Maharashtra, India
Date of Birth/Age :	04.10.1948
Date of Appointment :	30.10.2000
Election Commission Identity Card No.	MT/06/033/075458
Name :	Mrs. Kalpana Jaisingh Morparia
Designation :	Director
Address :	B-92, Ocean Gold Cooperative Housing Society, Twin Tower Lane, Prabhadevi, Mumbai – 400 025, Maharashtra, India
Date of Birth/Age :	30.05.1949
Date of Appointment :	22.03.2002
Name :	Mrs. Subrata Nakulchandra Mukherji
Designation :	Director
Address :	902, Mahindra Heights, Tardeo, Mumbai – 400 034, Maharashtra, India
Date of Birth/Age :	21.12.1952
Date of Appointment :	22.03.2002
Name :	Mr. Chandran Ratnaswami
Designation :	Director
Address :	177, Mckee Avenue, Toronto Ontario, M2N4C6, Canada
Date of Birth/Age :	11.05.1949
Date of Appointment :	22.03.2002
Name :	Mr. Sandeep Suraj Bakhshi
Designation :	Managing Director
Address :	Rs-4, Tanna Residency, Opp. Siddhi Vinayak Temple, Prabhadevi, Mumbai – 400 025, Maharashtra, India
Date of Birth/Age :	28.05.1960
Date of Appointment :	19.03.2002
Name :	Mr. Bhupendranath V Bhargava
Designation :	Director
Address :	1201, Gulmohar Apartments, Ceacer Road, Amboli, Andheri (W), Mumbai – 400058, Maharashtra, India
Date of Birth/Age :	16.04.1936
Date of Appointment :	29.04.2002
Election Commission Identity Card No.	MT/06/32/193024
Name :	Mr. Hoshang Noshipwan Sinor
Designation :	Director
Address :	764F, Sarosh Court, Tilak Road, Dadar, Mumbai – 400 014, Maharashtra, India
Date of Birth/Age :	05.12.1944
Date of Appointment :	30.07.2002
Election Commission Identity Card No.	MT/06/033/084625
Name :	Mr. Ramaswamy Athappan
Designation :	Director
Address :	96, Meyar Road, Singapore - 437917
Date of Birth/Age :	10.12.1945
Date of Appointment :	29.10.2002
Name :	Mr. James Patrick Dowd
Designation :	Director
Address :	913, Ponus Ridge Road, New Canaan CT 06840, USA
Date of Birth/Age :	21.08.1941
Date of Appointment :	29.01.2003
Name :	Mr. Dileep Chinubhai Choski
Designation :	Director
Address :	E-7, Sea Face Park, 50, Bhulabhai Desai Marg, Mumbai – 400026, Maharashtra, India
Date of Birth/Age :	26.12.1949
Date of Appointment :	29.10.2002
Election Commission Identity Card No.	MT/04/024/198131
Name :	Mr. Vaidyanathan Vemboo
Designation :	Nominee Director
Address :	1301, Radhika Apartments, Off sayani Riad, Prabhadevi, Mumbai – 400 025, Maharashtra, India
Date of Birth/Age :	02.01.1968
Date of Appointment :	01.11.2006
Name :	Mrs. Vishakha Mulye
Designation :	Executive Director

KEY EXECUTIVES

Name :	Mr. Rajesh K Saxena
Designation :	Secretary
Address :	301, Challenger Tower – 2, Thakur Village, Kandivli (E), Mumbai – 400 101, Maharashtra, India
Date of Birth/Age :	26.04.1956
Date of Appointment :	01.02.2004
Election Commission Identity Card No.	DL/01/005/189715

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 31.03.2008)

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters
Indian	278610000	73.83%
Foreign	97890000	25.94%
Others – Employees	857772	0.23%
Total	377357772	100.00%

BUSINESS DETAILS

Line of Business :	Providing Insurance Services
Products :	Business Products · Commercial Vehicles · Fire Insurance · Marine Insurance · Industrial Insurance · Corporate Insurance · Liability Insurance · Shop Insurance · Credit Insurance Others · Money Insurance Policy · Tea Crop Policy · Burglary Insurance Policy · All Risks Insurance Policy · Credit Insurance · Fidelity Guarantee Insurance Policy

GENERAL INFORMATION

No. of Employees :	5570
Bankers :	ICICI Bank

Banking Relations :	Good
Auditors :
Name :	· Lodha and Company Chartered Accountants Address : 6, Karim Chambers, 40, A Doshi Marg, Hammam Street, Mumbai – 400 023, Maharashtra, India · N M Raiji and Company Chartered Accountants
Associates :	Fairfax Financial Holdings Limited
Subsidiaries :	· ICICI Securities Primary Dealership Limited · ICICI Prudential Life Insurance Company Limited · ICICI Home Finance Company Limited · ICICI Securities Limited · ICICI Prudential Asset Management Company Limited · ICICI Bank UK PLC
Holding Company :	· ICICI Bank Limited · Lombard Canada Limited · First Capital Insurance Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
450000000	Equity Shares	Rs.10/- each	Rs.4500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
377357772	Equity Shares	Rs.10/- each	Rs.3773.578 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		3773.578	3357.075	2450.000
2] Share Application Money		0.000	1500.000	0.000
3] Reserves & Surplus		6986.011	4569.960	1279.201
4] (Accumulated Losses)		0.000	0.000	0.000
5] Fair value change account		(178.715)	(124.133)
NETWORTH		10580.874	9302.902	3729.201
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		10580.874	9302.902	3729.201
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1253.088	869.355	464.394
Capital work-in-progress		0.000	0.000	8.593
INVESTMENT		23737.603	17104.685	8626.013
DEFERREX TAX ASSETS		298.150	123.150	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000	0.000	0.000
	Sundry Debtors	0.000	0.000	137.879
	Cash & Bank Balances	1363.317	3478.998	1077.919
	Other Current Assets	11289.692	7964.165	56.050
	Loans & Advances	0.000	0.000	5581.423
Total Current Assets		12653.009	11443.163	6853.271
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	17362.211	12470.072	8309.360
	Provisions	9998.765	7767.379	3913.710
Total Current Liabilities		27360.976	20237.451	12223.070
Net Current Assets		(14707.967)	(8794.288)	(5369.799)
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		10580.874	9302.902	3729.201

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Operating Income		473.276	229.152	5276.790
Income From Investments		880.361	575.337	0.000
Other Income		2.033	1.976	889.964
Total Income		1355.670	806.465	6166.754
Profit/(Loss) Before Tax		1028.734	683.611	545.268
Provision for Taxation		250.782	149.587	42.200
Profit/(Loss) After Tax		777.952	534.024	503.068
Earnings in Foreign Currency :		1434.400	0.000	0.000
Expenditures :
	Employees remuneration and welfare benefits	5.267	4.828	0.000
	Directors Fees	0.660	0.400	0.000
	Other Expenses	47.509	0.026	0.000
	Salaries, Wages, Bonus, etc.	0.000	0.000	1187.604
	Managerial Remuneration	0.000	0.000	13.020
	Payment to Auditors	0.000	0.000	2.029
	Other Expenditure	273.500	117.600	4418.833
Total Expenditure		326.936	122.854	5621.486

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	57.39	66.22	8.16
Net Profit Margin (PBT/Sales)	(%)	75.88	84.77	8.84
Return on Total Assets (PBT/Total Assets}	(%)	7.40	5.55	7.45
Return on Investment (ROI) (PBT/Networth)		0.10	0.07	0.15
Debt Equity Ratio (Total Liability/Networth)		2.59	2.18	3.28
Current Ratio (Current Asset/Current Liability)		0.46	0.57	0.56

LOCAL AGENCY FURTHER INFORMATION

BACKGROUND

Subject was incorporated on October 30, 2000 and is a 74 : 26 joint venture between ICICI Bank Limited and Fairfax Financial Holdings Limited. The Company obtained regulatory approval to undertake General Insurance business on August 3, 2001 from the Insurance Regulatory and Development Authority (‘IRDA’) and has also obtained its certificate of renewal of registration.

INDUSTRY OVERVIEW

The gross written premium of the industry for the year ended March 31, 2008 was Rs.281.31 billion compared to Rs.249.75 billion fo the year ended March 31, 2007. Leading a growth of 13%. The market share of private sector insurance companies for the corresponding period increased from 35% in fiscal 2007 to 40% in fiscal 2008. ICICI Lombard was the private player with a market share of 31% in the private sector and an overall private sector market share of 12%.

OPERATIONAL REVIEW

Company Performance

The general insurance industry has witnessed complete de-tariffing of price effective November 1, 2007 for all products except motor third party. The transition to total tariff free regime has impacted market growth, whereby the industry witnessed downward pressure on the pricing of fire, engineering and motor products and upward trend in the pricing of health and marine products. Subject has responded to these changes in the market by following a balanced approach in terms of increased focus on enhancing quality and maintaining its combined ratio. Subject’s approach in terms of right clientele and risk based pricing led to a marginal growth in the fire and engineering portfolio. Further, Subject’s focus on the non subsidized approach led to substantial growth in the health and marine portfolio. Subject expects that the impact of de-tariffing would moderate in the near future.

Another major development during the year was the constitution of the Indian Motor Third Party Insurance Pool (IMTPIP) effective April 1, 2007 for covering third party risks for commercial vehicles. The IMTPIP is a multilateral reinsurance arrangement, in which all general insurance companies are compulsorily required to participate. The IMTPIP is administered by the General Insurance Corporation of India (‘GIC’). During fiscal 2008, Subject has achieved a gross written premium of Rs.33444.200 million (excluding share of premium from motor third party pool) compared to Rs.30034.500 million for fiscal 2007 - a growth of 11%. ICICI Lombard’s approach on risk based pricing and focus on combined ratio resulted in an increase in profit after tax from Rs. 683.6 million during fiscal 2007 to Rs.1028.700 million in fiscal 2008, a growth of 50.5%. During fiscal 2008, the number of policies sold increased to 3,526,961 compared to 3,136,478 in fiscal 2007, a growth of about 12%.

Information Technology

In the de-tariffed regime and with increased competition, profitability is driven by riskbased pricing. Applications like the “Sector Intelligence System” and “Physical Risk Rating System” have been built to provide specific inputs to the underwriting team to equip them with relevant information for risk management and underwriting. The data

warehouse and business intelligence solutions have further strengthened the analytics and forecasting capabilities. Subject has recently installed an actuarial software which will be useful in risk based pricing and claims reserving. With the rapid increase in the distribution network to remote locations, the Point-of-Sale (ILPOS) application has reduced the dependency on internet connectivity. These applications allow policies to be issued in the offline mode which are syncronized with the central services. Further, Subject’s virtual presence has improved nationwide, with the “Dial-a-Policy” solution, which provides access to the customer through a single toll free number. For servicing customers, web-chat has also proven to be an efficient platform. Subject will continue to explore various other technological solutions to augment its distribution network. Subject is investing in new age technology platforms like Mobile Telephony, IPTV etc, to further build upon its leadership in providing innovative solutions to customers and agents.

Subject has built robust systems for improving its servicing capabilities. The core policy administration system has been tested for its scalability. The Customer Relationship Management (CRM) tool with a single screen view of the customers’ transactions enhances the servicing capabilities. The workflow system (ITS) enables end-to-end tracking of applications, ensuring quality service to the customers. The claims management system for various products facilitates prompt claim servicing in an efficient manner.

Customer Service

The past year has witnessed some high value claims in the industry, Subject has leverged its customer service teams coupled with loss minimization teams to service/minimize/mitigate all such losses.

Subject has been able to match the repaid penetration of its distribution channels with significant geographical reach in claims servicing abilities, which extend to a number of international markets. Processes for timely servicing of customers at international locations with tie-up with surveyors’ and ability to make payments at such locations are firmly in place.

Subject remains committed to setting higher standards in terms of response time and providing immediate relief to the insured. It handled 812096 claims during fiscal 2008.

Underwriting

The transition to a regime of complete price de-tariffing has led to multiple challenges for industry players with a paradigm shift in the approach to underwriting. Setting up systems and processes to adapt to the revised approach to underwriting, building up and retention of the underwriting talent pool, educating the front-end staff in the nuances of pricing and implementation of analytical tools for periodic portfolio review have been the key focus areas in the last financial year.

In order to build a distinctive expertise in customers servicing, Subject has formed a focused Health and Accident Insurance team. This will provide a unified and seamless approach to the health and accident portfolio, inclusive of retail, group and mass health business. Underwriting of motor line will become sophisticated with the introduction of more rating factors to aid further classification of risk segments and appropriate pricing.

Reinsurance

Subject reinsurance program is formulated in line with the guidelines of the Insurance Regulatory and Development Authority (IRDA), which aim at adequate risk coverage and optimum retention of premium within the country. ICICI Lombard has further augmented the fire, engineering and marine cargo insurance capacity keeping in mind the increased growth potential of the portfolio in the country. In order to mitigate the risk of a single large loss and catastrophe protection with a catastrophe cover limit to protect for a 1-in-500 year catastrophe event, based on exposure modeling by international agencies.

Capital

In order to meet the solvency requirements, Subject raised private placements, aggregating to Rs.0.99 billion including a premium of Rs.0.83 billion, which was subscribed by its promoters – ICICI Bank Limited and Fairfax Financial Holdings Limited.

Registration

The certificate of registration of Company has been renewed by the Insurance Regulatory and Development Authority for the year 2008-09.

FIXED ASSETS

· Goodwill

· Intangibles – Computer Software

· Land – Freehold

· Leasehold Property

· Buildings

· Furniture & Fittings

· Information Technology Equipment

· Vehicles

· Office Equipment

· Others

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.42.30
UK Pound	1	Rs.84.03
Euro	1	Rs.66.42

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	9
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	10
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	9
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		78

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions