|
Report Date : |
21.12.2013 |
IDENTIFICATION DETAILS
|
Name : |
L AND T GENERAL INSURANCE COMPANY LIMITED |
|
|
|
|
Registered
Office : |
L and T House, Ballard Estate, Mumbai – 400001, Maharashtra |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2013 |
|
|
|
|
Date of
Incorporation : |
27.12.2007 |
|
|
|
|
Com. Reg. No.: |
11-177117 |
|
|
|
|
Capital Investment
/ Paid-up Capital : |
Rs.4150.000 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
U66030MH2007PCL177117 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
MUML07225B |
|
|
|
|
Legal Form : |
A Closely Held Public Limited Liability Company |
|
|
|
|
Line of Business
: |
Providing Insurance Related Services. |
|
|
|
|
No. of Employees
: |
Information declined by the management |
RATING & COMMENTS
|
MIRA’s Rating : |
B (34) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Maximum Credit Limit : |
USD 16600000 |
|
|
|
|
Status : |
Moderate |
|
|
|
|
Payment Behaviour : |
Slow but correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a wholly owned subsidiary of Larsen and Toubro Limited. It is an established company having moderate track record. There appears huge accumulated losses recorded by the company during
2013. However, there are no external borrowings recorded in the books. The rating also take into considered the continuous infusion of funds
by the promoters through equity. Trade relations are fair. Business is active. Payment terms are
reported as slow but correct. In view of strong support from its holding companies and experienced
promoters, the subject can be considered for business dealings with some
caution. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
INDIAN ECONOMIC OVERVIEW
The current downturn
provides an opportunity to push ahead with reforms to accelerate growth, says
the latest India Development Update report released by the World Bank. The
report says that the adverse effects of rupee depreciation are likely to be
offset by the gains in the exports performance due to improved external
competitiveness. Since May this year, the local currency has depreciated
substantially and fell to a record level of Rs 68.85 to a dollar on August, 28.
A stagflation like
situation appears to have arisen as inflation jumped to an eight month high of
6.46 % for the month of September. It is up from 6.10 % in August. Growth
continues to be muted with factory output plunging to 0.6 % in August.
Onion prices have risen nearly 300 % from last September. Vegetables cost
nearly 90 % more than they did last year. Wake up to the economic contribution
of slum dwellers. They contribute more than 7.5 % to the country’s gross
domestic product, according to a recent study conducted in 50 top cities.
136000 estimated
number of jobs created during the second quarter of the current financial year.
50000 estimated number of additional jobs in the field of corporate social
responsibility in the coming years.
The International
Finance Corporation expects to come out with its rupee linked bonds issue before
the end of 2013 as a part of its plan to raise $ 1 billion. The Apple iPhone 5c
(Rs 41900 for 16 GB variant) and 5s (Rs 53500 for 16GB variant) has been
launched in India from 1st November.
The Land Acquisition
Act to provide just and fair compensation to farmers will come into force from
January 1 next year, said Rural Development Minister Jairam Ramesh. The Act
replaces a 119 year old registration. The Securities and Exchange Board of
India has approved the trading of currency futures on the Bombay Stock
Exchange. The exchange plans to launch the currency futures platform with
advanced trading technology by the end of November.
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
INFORMATION DENIED
Management Non Co-Operative
LOCATIONS
|
Registered Office : |
L and T House, Ballard Estate, Mumbai - 400001, Maharashtra,
India |
|
Tel. No.: |
91-22-67525656 |
|
Fax No.: |
91-22-67525893 |
|
E-Mail : |
|
|
|
|
|
Head Office : |
6th Floor, City 2, Plot No. 177, CST Road, Near Bandra Kurla Telephone Exchange, Kalina, Santacruz (East), Mumbai - 400098, Maharashtra, India |
|
Tel. No.: |
91-22-61230000 |
|
|
|
|
Branch Office : |
Located at: · Ahmedabad · Bangalore · Bhubaneshwar · Coimbatore · Chennai · New Delhi · Hyderabad · Kolkata · Mumbai · Pune |
DIRECTORS
As on: 31.03.2013
|
Name : |
Mr. Yeshwant Moreshwar Deosthalee |
|
Designation : |
Director |
|
Address : |
1001, Prabhu Kutir, 15, |
|
Date of Birth/Age : |
06.09.1946 |
|
Qualification : |
ACA, LLB |
|
Date of Appointment : |
27.12.2007 |
|
|
|
|
Name : |
Mr. Sivaraman Narayanaswami |
|
Designation : |
Director |
|
Address : |
43, Kalpataru Residency, Tower A, Near Cine Planet, Sion (East),
Mumbai-400022, |
|
Date of Birth/Age : |
12.04.1958 |
|
Qualification : |
ACA |
|
Date of Appointment : |
27.12.2007 |
|
|
|
|
Name : |
Mr. Ramamurthi Shankar Raman |
|
Designation : |
Director |
|
Address : |
Kalpataru Royale, Flat No. 123, 12th Floor, Plot No. 110,
Road No. 29, Off |
|
Date of Birth/Age : |
20.12.1958 |
|
Qualification : |
ACA, Grad ICWA |
|
Date of Appointment : |
27.12.2007 |
|
|
|
|
Name : |
Mr. Mukund Manohar Chitale |
|
Designation : |
Director |
|
Address : |
4/46, Vishnuprasad Society, Shahaji Raje Marg, Vile Parle (East),
Mumbai-400057, |
|
Date of Birth/Age : |
16.11.1949 |
|
Qualification : |
FCA |
|
Date of Appointment : |
26.05.2010 |
|
|
|
|
Name : |
Mr. Haris Ansari |
|
Designation : |
Director |
|
Address : |
Flat No. 503, Serin Nyati Enclave, Nyati County Mohammadwadi,
Pune-411028, Maharashtra, India |
|
Date of Birth/Age : |
01.04.1939 |
|
Qualification : |
Post-Graduate in Science |
|
Date of Appointment : |
26.05.2010 |
|
|
|
|
Name : |
Mr. Joydeep Kumar Roy |
|
Designation : |
Whole Time Director |
|
Address : |
33, Plot-212, ‘A’ Wing, Guldev Sagar Co-Operative Housing Society
Limited, R. K. Patkar Marg, Bandra (West), Near Bank of Punjab,
Mumbai-400050, Maharashtra, India |
|
Date of Birth/Age : |
26.03.1967 |
|
Qualification : |
Mechanical Engineer, MBA from IIM Calcutta |
|
Date of Appointment : |
26.05.2010 |
KEY EXECUTIVES
|
Name : |
V. Krishnamoorthy |
|
Designation : |
Chief Financial Officer |
|
|
|
|
Name : |
Aarti Kamath |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
Pattern of
Shareholding (As certified by the Management)
|
|
As at March 31, 2013 |
|
|
|
No of Shares |
% of holding |
|
Shareholder |
|
|
|
Promoters |
|
|
|
Indian |
415000000 |
100% |
|
Foreign |
- |
- |
|
TOTAL |
415000000 |
100% |
BUSINESS DETAILS
|
Line of Business : |
Providing Insurance Related Services. |
GENERAL INFORMATION
|
No. of Employees : |
Information declined by the management |
|
|
|
|
Bankers : |
Not Available |
|
|
|
|
Facilities : |
-- |
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Sharp and Tannan Chartered Accountants |
|
|
|
|
Subsidiaries of
Larsen and Toubro Limited- Holding Company : |
· L and T-Valdel Engineering Limited · L and T Shipbuilding Limited · L and T Rajkot - Vadinar Tollway Limited (formerly known as LandT Rajkot - Vadinar Tollway Private Limited) · PNG Tollway Limited (formerly known as PNG Tollway Private Limited) · L and T Plastics Machinery Limited · L and T Howden Private Limited · L and T Kobelco Machinery Private Limited · Larsen and Toubro Infotech Limited · L and T Finance Limited · L and T FinCorp Limited (formerly known as India Infrastructure Developers Limited) · L and T Infrastructure Development Projects Limited · L and T Panipat Elevated Corridor Limited · Narmada Infrastructure Construction Enterprise Limited · L and T Krishnagiri Thopur Toll Road Limited · L and T Transportation Infrastructure Limited · L and T Western India Tollbridge Limited · L and T Interstate Road Corridor Limited · L and T Krishnagiri Walajahpet Tollway Limited · L and T Devihalli Hassan Tollway Limited · L and T Chennai - Tada Tollway Limited · L and T South City Projects Limited · L and T Tech Park Limited · L and T-MHI Boilers Private Limited · L and T Ahmedabad-Maliya Tollway Limited · L and T Plastics Machinery Limited · L and T Urban Infrastructure Limited · L and T Vadodara Bharuch Tollway Limited · L and T MHI Turbine Generators Private Limited · L and T Access Financial Advisory Services · L and T Finance Holdings Limited · L and T Halol-Shamlaji Tollway Limited · L and T Metro Rail (Hyderabad) Limited · L and T Housing Finance Limited · L and T Western Andhra Tollway Limited |
|
|
|
|
Joint Ventures of Larsen
and Toubro Limited-Holding Company : |
· L and T-AM Tapovan Joint Venture · The Dhamra Port Company Limited ·
Metro Tunelling Delhi-L and T SUCG JV |
|
|
|
|
Associates of
Larsen and Toubro Limited-Holding Company : |
· L and T-Komatsu Limited · Salzer Electronics Limited · Audco India Limited · L and T-Chiyoda Limited · JSK Electricals Private Limited · Feedback Infrastructure Services Private Limited |
CAPITAL STRUCTURE
As on: 31.03.2013
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
600000000 |
Equity Shares |
Rs.10/- each |
Rs.6000.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
415000000 |
Equity Shares |
Rs.10/- each |
Rs.4150.000 Millions |
|
|
|
|
|
Of the above 415000000 (previous year: 325000000) equity shares of R 10/- each fully paid up are held by Larsen and Toubro Limited, the Holding company.
PATTERN OF
SHAREHOLDING
Pattern of Shareholding
(As certified by the Management)
|
|
As at March 31, 2013 |
|
|
|
No of Shares |
% of holding |
|
Shareholder |
|
|
|
Promoters |
|
|
|
Indian |
415000000 |
100% |
|
Foreign |
- |
- |
|
TOTAL |
415000000 |
100% |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
SHAREHOLDERS
FUNDS |
|
|
|
|
Share Capital |
4150.000 |
3250.000 |
2000.000 |
|
Reserves and Surplus |
0.000 |
0.000 |
0.000 |
|
Fair Value Change Account |
2.942 |
1.008 |
0.173 |
|
Borrowings |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
TOTAL |
4152.942 |
3251.008 |
2000.173 |
|
|
|
|
|
|
APPLICATION OF
FUNDS |
|
|
|
|
|
|
|
|
|
Investments |
2504.650 |
1853.144 |
762.070 |
|
Loans |
0.000 |
0.000 |
0.000 |
|
Fixed Assets (Net) including Capital work in progress |
841.839 |
826.350 |
713.966 |
|
Current Assets: |
|
|
|
|
Cash and Bank Balances |
79.505 |
82.917 |
47.661 |
|
Advances and Other Assets |
777.046 |
349.405 |
118.360 |
|
Sub Total [A] |
856.551 |
432.322 |
166.021 |
|
|
|
|
|
|
Current Liabilities |
1815.639 |
938.558 |
221.808 |
|
Provisions |
900.943 |
655.938 |
94.144 |
|
Sub Total [B] |
2716.582 |
1594.496 |
315.952 |
|
Net Current Assets
[C] = [ A - B] |
(1860.031) |
(1162.174) |
(149.931) |
|
Miscellaneous Expenditure (to the extent not written off or adjusted) |
0.000 |
0.000 |
0.000 |
|
Debit balance in Profit and Loss Account |
2666.484 |
1733.688 |
674.068 |
|
TOTAL |
4152.942 |
3251.008 |
2000.173 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
|
OPERATING
PROFIT/ (LOSS) |
|
|
|
|
|
Fire Insurance |
(130.675) |
(71.388) |
(87.313) |
|
|
Marine Insurance |
(31.116) |
(48.074) |
(17.870) |
|
|
Miscellaneous Insurance |
(878.235) |
(1003.171) |
(519.980) |
|
|
|
(1040.026) |
(1122.633) |
(625.163) |
|
|
INCOME FROM
INVESTMENTS |
|
|
|
|
|
Interest, Dividend & Rent – Gross |
88.033 |
59.564 |
37.023 |
|
|
Profit on sale of investments |
23.524 |
9.959 |
1.225 |
|
|
Less: Loss on sale of investments |
(0.059) |
(1.082) |
(4.742) |
|
|
OTHER INCOME |
0.070 |
0.118 |
0.006 |
|
|
TOTAL (A) |
(928.458) |
(1054.074) |
(591.650) |
|
|
PROVISIONS (Other
than taxation) |
|
|
|
|
|
For diminution in the value of investments |
- |
- |
- |
|
|
For doubtful debts |
- |
- |
- |
|
|
Others (to be specified) |
- |
- |
- |
|
|
OTHER EXPENSES |
|
|
|
|
|
Expenses other than those related to Insurance Business |
3.818 |
4.884 |
1.274 |
|
|
Bad debts written off |
- |
- |
- |
|
|
Directors fees |
0.520 |
0.560 |
0.280 |
|
|
TOTAL (B) |
433.800 |
5.444 |
1.554 |
|
|
|
|
|
|
|
|
Profit/(Loss)
Before Tax |
(932.796) |
(1059.518) |
(593.204) |
|
|
Provision for Taxation (pertaining to earlier years) |
- |
0.102 |
- |
|
|
|
|
|
|
|
|
Balance of profit/(loss)
brought forward from last year |
(1733.688) |
(674.068) |
(80.865) |
|
|
|
|
|
|
|
|
Balance carried
forward to Balance Sheet |
(2666.484) |
(1733.688) |
(674.068) |
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
(2.47) |
(4.44) |
(26.05) |
LOCAL AGENCY FURTHER INFORMATION
CURRENT
MATURITIES OF LONG-TERM DEBT DETAILS – NOT AVAILABLE
|
Sr. No. |
Check List by Info
Agents |
Available in Report
(Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
No |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact person |
No |
|
11] |
Turnover of firm for last three years |
Yes |
|
12] |
Profitability for last three years |
Yes |
|
13] |
Reasons for variation <> 20% |
-- |
|
14] |
Estimation for coming financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details (if applicable) |
No |
|
21] |
Market information |
-- |
|
22] |
Litigations that the firm / promoter involved in |
-- |
|
23] |
Banking Details |
No |
|
24] |
Banking facility details |
No |
|
25] |
Conduct of the banking account |
-- |
|
26] |
Buyer visit details |
-- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if applicable |
Yes |
|
29] |
Last accounts filed at ROC |
Yes |
|
30] |
Major Shareholders, if available |
No |
|
31] |
Date of Birth of Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN of Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating, if available |
No |
BUSINESS AND
OPERATIONAL OVERVIEW
The Company in its second full year of operations achieved a Gross Written Premium (GWP) of R 182 crores by selling more than a hundred thousand policies (104,733).
Commercial segment accounted for Rs.794.500 Millions out of which 30% is contributed by Fire closely followed by Engineering at 20%.
In line with the industry, Motor remains the largest contributor to GWP with a share of 53%. Non motor LoBs’ share the rest 47% with Engineering and Fire each sharing 13% and 9%of the total GWP respectively.
The Company gives emphasis on efficient policy issuance using high level technology platform. Policy issuance TAT (Turn Around Time) shows that 88% of the retail non-micro policies were issued on the same day of application. The Company has a pan India presence with 15 branch offices as hub locations. 35% of the total GWP was sourced by the Mumbai branch closely followed by Delhi branch at 20%. Top 3 branches i.e Delhi, Mumbai and Ahmedabad accounted for more than 55% of the GWP.
INDUSTRY SCENARIO AND
OUTLOOK
Indian general insurance industry continues to show an impressive growth in top line and has reported a growth of 19 per cent from Rs. 581190.000 Millions in FY 2012 to Rs. 690790.000 Millions in FY 2013. While the share of premium from public players remained at 58 per cent, the growth in premium for private players is 24 per cent as compared to 15 per cent for public players. Motor and health LoBs are the fastest growing segment and now accounts for 43% and 22% of the industry’s GWP.
The motor third party pool administration system has been dismantled from April 2012 and has been replaced by the declined risk pool mechanism:
a) The liability on account of third party business underwritten as a part of comprehensive coverage is being retained by the players on their respective Balance Sheets;
b) With respect to the third party act only policies the players are obliged to underwrite for an amount equivalent to the average between the overall market share and the motor market share;
c) The players are underwriting third party act only policies directly on their Balance Sheet based on their underwriting guidelines. Those which do not fall within their underwriting guidelines are being written to the commonly maintained declined pool at the industry level and their premium and corresponding losses are being shared based on the parameters mentioned in (b) above.
Also increase in deductibles and revision in premium rates are expected to improve the loss ratios of the industry.\
Note: No Charges Exist for Company
REVENUE ACCOUNT
(Rs. In Millions)
|
Particular |
For the Quarter ended Sept 30, 2013 |
Upto the period ended Sept 30, 2013 |
|
Premiums earned (Net) |
344.998 |
754.396 |
|
|
|
|
|
Profit/ (Loss) on sale/redemption of Investments |
2.501 |
18.447 |
|
|
|
|
|
Others (Miscellaneous income) |
(4.500) |
- |
|
|
|
|
|
Interest Income |
45.586 |
84.980 |
|
TOTAL (A) |
388.585 |
587.823 |
|
|
|
|
|
Claims Incurred (Net) |
340.826 |
731.646 |
|
|
|
|
|
Commission |
(11.200) |
(19.354) |
|
|
|
|
|
Operating Expenses related to Insurance Business |
368.511 |
725.045 |
|
|
|
|
|
Premium Deficiency |
(5.909) |
(1.293 |
|
TOTAL (B) |
692.229 |
1430.044 |
|
Operating Profit/(Loss) (A - B) |
(303.644) |
(572.221) |
|
APPROPRIATIONS |
|
|
|
Transfer to Shareholders’ Account |
(303.644) |
(572.221) |
|
|
|
|
|
TOTAL (C) |
(303.644) |
(572.221) |
PROFIT & LOSS ACCOUNT
(Rs. In Millions)
|
|
PARTICULARS |
For the Quarter ended Sept 30, 2013 |
Upto the period ended Sept 30, 2013 |
|
|
OPERATING
PROFIT/ (LOSS) |
|
|
|
|
Fire Insurance |
(16.981) |
(5.023) |
|
|
Marine Insurance |
(9.860) |
(14.332) |
|
|
Miscellaneous Insurance |
(276.806) |
(552.686) |
|
|
|
(303.647) |
(572.224) |
|
|
INCOME FROM
INVESTMENTS |
|
|
|
|
Interest, Dividend & Rent – Gross |
22.539 |
35.871 |
|
|
Profit on sale of investments |
1.848 |
10.835 |
|
|
Less: Loss on sale of investments |
- |
- |
|
|
OTHER INCOME |
0.004 |
33.855 |
|
|
TOTAL (A) |
24.391 |
80.561 |
|
|
PROVISIONS (Other
than taxation) |
|
|
|
|
For diminution in the value of investments |
- |
- |
|
|
For doubtful debts |
- |
- |
|
|
Others (to be specified) |
- |
- |
|
|
OTHER EXPENSES |
|
|
|
|
Expenses other than those related to Insurance Business |
|
|
|
|
Bad debts written off |
- |
- |
|
|
Directors fees |
0.160 |
0.320 |
|
|
TOTAL (B) |
0.160 |
0.320 |
|
|
|
|
|
|
|
Profit/(Loss)
Before Tax |
(279.416) |
(491.983) |
|
|
Provision for Taxation (pertaining to earlier years) |
- |
- |
|
|
Profit/ (Loss)
After Tax |
(279.416) |
(491.983) |
|
|
|
|
|
|
|
Balance of
profit/(loss) brought forward from last year |
(2666.484) |
(2666.484) |
|
|
|
|
|
|
|
Balance carried
forward to Balance Sheet |
(2945.901) |
(3158.467) |
ABRIDGED BALANCE
SHEET
(Rs. In Millions)
|
SOURCES OF FUNDS |
As at Sept 30,
2013 |
|
SHAREHOLDERS
FUNDS |
|
|
Share Capital |
4450.000 |
|
Reserves and Surplus |
- |
|
Fair Value Change Account |
0.753 |
|
Borrowings |
- |
|
|
|
|
TOTAL |
4450.753 |
|
|
|
|
APPLICATION OF
FUNDS |
|
|
|
|
|
Investments |
2606.187 |
|
Loans |
- |
|
Fixed Assets (Net) including Capital work in progress |
632.852 |
|
Current Assets: |
|
|
Cash and Bank Balances |
103.064 |
|
Advances and Other Assets |
1048.777 |
|
Sub Total [A] |
1151.841 |
|
|
|
|
Current Liabilities |
2066.736 |
|
Provisions |
1031.857 |
|
Sub Total [B] |
3098.593 |
|
Net Current Assets
[C] = [ A - B] |
(1946.751) |
|
Miscellaneous Expenditure (to the extent not written off or adjusted) |
|
|
Debit balance in Profit and Loss Account |
3158.467 |
|
TOTAL |
4450.753 |
FIXED ASSETS
· Goodwill
· Intangibles – Softwares
· Land-Freehold
· Leasehold Property
· Buildings
· Furniture and Fittings
· Information Technology Equipment
· Vehicles
·
Office Equipment
AS PER WEBSITE DETAILS
News
INSURANCE MKT SHARE WILL IMPROVE POST FUTURE GRP DEAL: L AND T
Heavy engineering and construction major Larsen and Toubro has acquired 50 percent stake in Future Group's insurance business for around Rs 5000.000 Millions.
While explaining contours of the deal, R Shankar Raman, L and T's chief financial officer said that though the company's subsidiary, L and T finance will pick up stake from Future Generali India Insurance Company, it is the parent company (L and T) which will make investment and will also merge with the acquired firm.
The deal will be routed through L and T's general insurance arm and subsequently it will merge with Future Generali Indian Insurance Company.
In an interview to CNBC-TV18, Raman said that currently, Future Generali's market share is around 1.72 percent and is likely to go upto 1.82 percent post the deal. "Final valuation of the deal will be decided post due diligence," he said L and T is looking at a lock-in of five years for this transaction.
Raman further explains that LandT General Insurance started in 2012 and for the year ended FY12, the company has recorded gross premium of Rs 1430.000 Millions, whereas Future Generali Insurance has gross underwritten premium of about Rs 10000.000 millions. This merger will not only create a larger corporation but will also boost L and T to have a meaningful play in general insurance sector, he added.
L AND T FINANCE TO BUY PANTALOON RETAIL'S STAKE IN INSURANCE JOINT
VENTURE
MUMBAI: L and T Finance Holdings, the financial services arm of L and T, is close to buying out Pantaloon Retail's stake in the latter's general insurance joint venture Future Generali India Insurance Company. A formal announcement is expected within the next 2-3 weeks, said three sources directly involved in the ongoing transaction.
Currently L and T General Insurance Company is a wholly-owned subsidiary of parent L and T, founded two years ago. It has till now been a part of the parent company and is not part of the group's financial services arm.
But this acquisition, according to the sources quoted earlier, is likely to help the engineering major synchronise its insurance business under L and T's financial services offering.
Formed in 2007, Future Generali is a JV between Future Group and the Generali Group of Italy. The Future Group owns 74% stake in the company while the Italian insurer owns 26% - the highest permissible under Indian laws.
Of the 74% stake, Biyani's flagship Pantaloon Retail, directly and via special purpose vehicles, holds 50% while the Biyani family holds 24%. Both companies have a similar joint venture in life insurance, named Future Generali Life.
ET on October 5 first reported that the two are in advance negotiations.
According to one of the sources quoted above, the discussions between the two were stalled for some time over valuations after Biyani sought a Rs.6000.000 Millions payment for the Pantaloon stake. But now it has come down to Rs 4750.000-5000.000 Millions range thereby reviving the discussions.
Kishore Biyani, the CEO of the Future Group, and the spokesperson of L and T Finance Holdings did not want to comment on speculation. Mails sent to YM Deosthalee, CMD of L and T Finance Holdings and Director, L and T Insurance, did generate a response.
Pantaloon is Biyani's listed flagship company and monetising its insurance exposure will further deleverage its balance sheet. As on June 2012, Pantaloon Retail is estimated to have had Rs 50000.000 Millions of debt, but through a series of strategic deals across businesses, Biyani has managed to bring it down by half in the past six months.
This will be the second value unlocking exercise by Biyani in his financial services portfolio and comes after he sold a majority stake in his financial services arm, Future Capital, to private equity giant Warburg Pincus.
The Biyani family may still retain their stake initially but if the government hikes the limit in the sector to 49%, it will give them an exit route.
"The plan is to merge Future Generali India with L and T General Insurance in the near future as there is no logic to keep the different pieces in different entities.
Generali would hold 26% stake in the new merged company and L and T's stake in the L and T General Insurance will subsequently get transferred to L and T Finance for integration," said an insurance sector consultant familiar with the plans, on condition of anonymity as the talks are still private.
L AND T, GENERALI AND
FUTURE GROUP SIGN NON-BINDING TERM SHEET FOR MERGER OF GENERAL INSURANCE
BUSINESSES
Larsen and Toubro Limited (L and T), Generali Group and the Future Group have signed a non-binding term sheet for the merger of L and T General Insurance Company Limited (LTGI) and Future Generali India Insurance Limited (FGI).
On the completion of the merger, L and T and Generali would acquire such number of shares as would result in L and T having a 51 per cent stake, Generali having a 26 per cent shareholding and the balance to be held by Future Group in the merged entity.
The completion of the transaction is subject to satisfactory due diligence by both the parties, execution of mutually agreed definitive binding documents and requisite approvals from IRDA and other regulators and related corporate bodies.
LTGI, having started operations in 2010, achieved a GWP of Rs. 1430.000 Millions for year ending March 2012 and Rs. 1180.000 Millions for the nine months ended December 2012. LTGI operates out of 15 branches, servicing customers in more than 1,000 locations using its state of art technology platform.
Cumulatively, it has issued more than 150,000 policies covering various products till date. FGI is a joint venture between Future Group, owning a 74 per cent stake and Generali Group owning a 26 per cent stake.
The company achieved a GWP (gross written premium) of Rs. 10340.000 Millions for the year ending March 2012 and Rs. 8550.000 Millions for the nine months ended December 2012. It has issued over 840,000 policies and has settled over 100,000 claims in FY13. Future Generali India Insurance is currently active through 83 offices with about 5,900-plus agents.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No 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 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.62.24 |
|
|
1 |
Rs.101.81 |
|
Euro |
1 |
Rs.84.88 |
INFORMATION DETAILS
|
Information
Gathered by : |
PDT |
|
|
|
|
Report Prepared
by : |
VRN |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--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 |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
|
|
|
|
TOTAL |
|
34 |
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 |
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 |
|
-- |
NB |
New Business |
-- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.