Lovely Professional

University

TERM PAPER
Of
FINANCIAL MANAGEMENT
TOPIC: -
Reliance Insurance Vs ICICI Prudential

Submitted to: Submitted by:

Ms. ASHU KAKKAR Pramod
Ku.Tiwari

Lecturer, LSM Roll no.- B44

LPU Reg.No-
10901147

Sec.-
S1906
 MBA-IT

Index

1. Declaration Page no: 3

2. Acknowledgement Page
no: 4
3. Introduction of Reliance Insurance Page
no: 5
4. Management Page no: 6
5. Company Position Page
no: 7
6. Balance Sheet Page
no: 8
7. Capital Structure Page no: 9
8. Introduction of ICICI Prudential Page no: 10

9. Management Page no:

11
10. Balance Sheet Page
no: 11
11. Capital Structure Page no:
12
12. Comparative Analysis of Reliance Ins. Page
no: 13
Vs ICICI Pru.
13. References Page no: 14

DECLARATION-

I, Pramod Ku. Tiwari student of Lovely Professional

University have completed the Project on:
RELIANCE INSURANCE VS ICICI
PRUDENTIAL.
The information given in this project is true to the
best of my knowledge.
 (PRA
MOD KU. TIWARI)

ACKNOWLEDGEMENT-

First of all I would like to thank the Lovely Professional

University and take the opportunity to do this project
as a part of the MBA-IT.

Many people have influenced the shape and content

of this project, and many supported me through it. I
express my sincere gratitude to Ms. Ashu Kakkar
for assigning me a project on Financial Management,
which is an interesting and exhaustive subject.

He has been an inspiration and role model for this

topic. His guidance and active support has made it
possible to complete the assignment.

I would like to thank the Almighty for always helping

me.
 INTRODUCTION OF RELIANCE INSURANCE :

History:

Reliance Insurance Company Limited was incorporated in Pakistan in the year

1981 with a Share Capital of Rs.5.0 Million by two Leading Industrial Houses of
Pakistan, namely (i) Al-Noor Group and (ii) Amin Bawany Group. Al-Noor Group
is headed by renowned industrialist Mr. Ismail H. Zakaria, who is also the
Chairman of Reliance Insurance, while Amin Bawany Group is headed by Mr.
Mohammad Amin Ahmed Bawany, who is also the Director of Reliance Insurance.
Both the groups having successfully implemented a number of projects are
currently leading industrial groups of Pakistan.

The Present Authorised Capital of the Company is Rs.500 Million while Paid-up
Capital has increased to 252.002 million.

Reliance is one of the leading General Insurance Company of Pakistan having a

network of 27 Branches at all important places throughout Pakistan employing a
full time work force of 242 persons. It underwrites all classes of General Insurance
and enjoys reputation second to none. Apart from the traditional at covers such as
Fire, Accident, Motor, Marine (Import & Exports), Loss of Profits, Personal
Accident, Group Hospitalization, Workmen’s Compensation, Burglary, Cash in-
Safe or in Transit etc., it also transacts non-traditional cover such as Machinery
Breakdown and Loss of Profits following Machinery Breakdown, Contractors All
Risks, Erection All Risks, Bond and the like.

Since its establishment Reliance has progressed smoothly and steadily. Its Gross
Premium Income has increased from Rs. One Million in 1983 to Rs.506.336
Million in 2009. At the end of 2009 General Reserve stood at Rs.87.50 Million and
Technical Reserves at Rs.493.359 Million.
VISION:
To be recognized as a professional and dependable business entity committed to
play a meaningful role in the development of insurance industry in Pakistan and to
safeguard the legitimate interests of all stakeholders, namely policy-holders, share-
holders, reinsurers, employees and all other business associates/ partners.

MISSION:
To provide quality service and protection to its clients aiming at achieving a
respectable volume of business and become a prominent player through good
governance and sound professionalism focussing to become a well-known and
respected Corporate entity in the eyes of Society and Government.

MANAGEMENT:

BOARD OF DIRECTORS DIRECTORS

CHAIRMAN MOHAMMED AMIN AHMED
ISMAIL H. ZAKARIA BAWANY
A. AZIZ AYOOB
IRFAN ZAKARIA BAWANY
MOHAMMAD OMER BAWANY
ZOHAIR ZAKARIA
AHMED ALI BAWANY
NOOR M. ZAKARIA
ASHFAQ PATEL
YASIN SIDDIK
CHIEF EXECUTIVE & MANAGING MANAGEMENT
DIRECTOR BASHARAT M. BARLAS SEVP
A. RAZAK AHMED SYED RIZWAN AKHTAR EVP
(Operation)
CHIEF ACCOUNTANT AND AUDIT COMMITTEE
COMPANY A. AZIZ AYOOB CHAIRMAN
SECRETARY IRFAN ZAKARIA BAWANY MEMBER
HAROON A. SHAKOOR ZOHAIR ZAKARIA MEMBER

INVESTMENT COMMITTEE AUDITORS

IRFAN ZAKARIA BAWANY HYDER BHIMJI & COMPANY
CHAIRMAN CHARTERED ACCOUNTANTS
ZOHAIR ZAKARIA MEMBER
AHMED ALI BAWANY MEMBER
A. RAZAK AHMED MEMBER
LEGAL ADVISOR BANKERS
ABDUL SATTAR PINGAR HABIB BANK LIMITED
NATIONAL BANK OF PAKISTAN
MCB BANK LIMITED
ALLIED BANK OF PAKISTAN
LIMITED
UNITED BANK LIMITED
THE ROYAL BANK OF SCOTLAND
NIB BANK LIMITED
BANK ALFALAH LIMITED
FAYSAL BANK LIMITED
HABIB METROPOLITAN BANK
LIMITED
THE BANK OF PUNJAB
JS BANK LIMITED

COMPANY POSITION:

Last Price Market Cap.Sales Net Profit Total Assets

(Rs. cr.) Turnover
Rel Capital 684.45 16,848.42 2,366.62 339.42 20,585.97
Bajaj Holdings 641.10 6,798.39 221.56 196.02 3,206.15
Bajaj Finserv 398.00 5,758.40 112.03 41.36 1,516.31
Religare Enterp 411.70 5,262.62 101.40 55.39 2,518.64
JM Financial 33.80 2,534.26 2.11 7.97 1,646.66
Tata Inv Corp 489.75 2,362.41 213.37 186.29 1,393.01
JSW Holdings 1,781.40 1,977.29 7.03 4.38 617.46
ILandFS 43.70 887.23 90.33 39.29 63.48
Indiabulls Sec 30.00 689.82 337.60 61.22 403.29
Spectacle Ind 118.25 608.40 40.16 0.49 8.25

BALANCE SHEET:

Mar ' Mar ' Mar ' Mar ' Mar '
09 08 07 06 05

Sources of funds
Owner's fund
Equity share capital 246.16 246.16 246.16 223.40 127.84
Share application money - - - 49.48 -
Preference share capital - - - - -
6,560.2 5,779.0 4,915.0 3,849.5 1,310.0
Reserves & surplus
8 7 7 8 8

Loan funds
4,937.0 2,454.4
Secured loans 145.00 167.50 -
4 8
8,842.4 6,871.1 1,256.3 1,240.0
Unsecured loans -
9 0 6 0
20,585. 15,350. 6,562.5 4,289.9 2,677.9
Total
97 81 9 6 2

Uses of funds
Fixed assets
Gross block 351.63 336.24 298.63 375.71 541.25
Less : revaluation reserve - - - - -
Less : accumulated depreciation 252.69 231.61 214.52 207.36 327.71
Net block 98.94 104.63 84.11 168.35 213.54
Capital work-in-progress 93.79 17.45 14.60 13.13 13.05
Investments 8,746.4 4,715.3 2,434.3 2,230.6 1,644.0
 Mar ' Mar ' Mar ' Mar ' Mar '
09 08 07 06 05
9 9 4 2 0

Net current assets

11,991. 11,658. 4,248.9 2,054.9
Current assets, loans & advances 939.35
27 14 6 8
Less : current liabilities & 1,144.8
453.53 219.42 177.12 132.02
provisions 0
11,537. 10,513. 4,029.5 1,877.8
Total net current assets 807.33
74 34 4 6
Miscellaneous expenses not
109.01 - - - -
written
20,585. 15,350. 6,562.5 4,289.9 2,677.9
Total
97 81 9 6 2

CAPITAL STRUCTURE: (RS Crore)

Paid
To Class Paid Up Paid
From Authorized Issued Up
Yea Of Shares Up
Year Capital Capital Face
r Share (Nos) Capital
Value
200 Equity
2008 300.00 246.98 245632800 10 245.63
9 Share
200 Equity
2007 300.00 246.98 245632800 10 245.63
8 Share
200 Equity
2006 300.00 246.98 245632800 10 245.63
7 Share
200 Equity
2005 300.00 224.21 222866245 10 222.87
6 Share
200 Equity
2004 200.00 128.65 127306244 10 127.31
5 Share
 INTRODUCTION OF ICICI PRUDENTIAL:

History:

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank -
one of India's foremost financial services companies-and Prudential plc - a leading
international financial services group headquartered in the United Kingdom. Total
capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of
74% and Prudential plc holding 26%.

We began our operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA). Today, our nation-wide
reach includes 1,960 branches (inclusive of 1,096 micro-offices), over 237,000
advisors and 6 banc assurance partners.

ICICI Prudential is the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a
row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer,
by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted
Brands'. As we grow our distribution, product range and customer base, we
continue to tirelessly uphold our commitment to deliver world-class financial
solutions to customers all over India.

Since the liberalization of Indian Insurance sector, ICICI Prudential Life Insurance has
been one of the earliest private players. Since the time, ICICI Pru Life has been the leader
in terms of market share as indicated by the IRDA (Insurance Regulatory and
Development Authority, the regulator for Indian Insurance Industry) at its website.

Arguably the most innovative Indian Life insurer in terms of customer services and
products, ICICI Prudential has one of the largest distribution and servicing network with
over 2,000 proprietary offices & customer touch points across India. The 30,000
employee strong organization has one of the largest agency distribution in the industry.

With a growing product range to match the complex needs of the demanding customers in
a growing economy, the organization also has a history of successful.

During 2007-08, the organization's focus on rural business has proved its complex project
execution capability and strong partnerships for customer servicing.

In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up with TTK
Healthcare to settle insurance claims of its users.

MANAGEMENT:

Directors Board Governance Committee

K.V. Kamath, Chairman Danny Bardin, Chairman
Danny Bardin Lalita D. Gupte
John Caouette Shikha Sharma.
Lalita D. Gupte
Kalpana Morparia
M.P. Modi
Mark Tucker
Shikha Sharma, Managing Director
Derek Stott (Alternate Director to
Mark Tucker)
S.P. Subhedar (Alternate Director to
Danny Bardin)
Risk Management and Audit Board Investment Committee
Committee Lalita D. Gupte, Chairperson
M.P. Modi, Chairman Danny Bardin
Danny Bardin Shikha Sharma
Kalpana Morparia V. Rajagopalan
Puneet Nanda
BALANCE SHEET: (Rs crore)

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sources of funds
Owner's fund
Equity share capital 1,113.29 1,112.68 899.34 889.83 736.75
Share application money - - - - 0.02
Preference share capital 350.00 350.00 350.00 350.00 350.00
Reserves & surplus 48,419.73 45,357.53 23,413.92 21,316.16 11,813.20
Loan funds
Secured loans - - - - -
2,18,347. 2,44,431. 2,30,510. 1,65,083.
Unsecured loans 99,818.78
82 05 19 17
2,68,230. 2,91,251. 2,55,173. 1,87,639. 1,12,718.
Total
84 26 45 16 75
Uses of funds
Fixed assets
Gross block 7,443.71 7,036.00 6,298.56 5,968.57 5,525.65
Less : revaluation reserve - - - - -
Less : accumulated
3,642.09 2,927.11 2,375.14 1,987.85 1,487.61
depreciation
Net block 3,801.62 4,108.90 3,923.42 3,980.71 4,038.04
Capital work-in-progress - - 189.66 147.94 96.30
1,03,058. 1,11,454.
Investments 91,257.84 71,547.39 50,487.35
31 34
Net current assets
Current assets, loans &
34,384.06 31,129.77 23,551.85 15,642.79 11,115.99
advances
Less : current liabilities &
43,746.43 42,895.38 38,228.64 25,227.88 21,396.16
provisions
- - -
Total net current assets -9,362.37 -9,585.09
11,765.62 14,676.78 10,280.17
Miscellaneous expenses not
- - - - -
written
1,03,797.
Total 97,497.56 80,694.15 66,090.96 44,341.52
62

CAPITAL STRUCTURE: (Rs crore)

 Paid
To Class Paid Up
From Authorized Issued Up Paid Up
Yea Of Shares
Year Capital Capital Face Capital
r Share (Nos)
Value
200 Equity 1,113.2
2008 1,275.00 1113250642 10 1,113.25
9 Share 5
200 Equity 1,112.6
2007 1,275.00 1112687495 10 1,112.69
8 Share 9
200 Equity
2006 1,000.00 899.27 899266672 10 899.27
7 Share
200 Equity
2005 1,000.00 153.84 153844503 10 153.84
6 Share
200 Equity
2004 1,550.00 616.39 350000000 10 350.00
5 Share

COMPARATIVE ANALYSIS OF RELIANCE INS. VS ICICI PRU:

Analysing the data & capital structure of Reliance, it can be said that the
company has fully paid up share capital which indicates that it has a
sound financial position. Moreover unsecured loans have increased which
can be interpreted as company is planning for new investments which the
company considers to be involving higher risk anticipating and
anticipating higher returns. Unsecured loans make the company hold
lesser liabilities or the liability of the company then becomes minimal and
so it gives a chance to the company to take higher risk and thus generate
higher returns/ profits (following the concept “risk taken is directly
proportional to return expected”.

Where as in case of ICICI prudential, the company does not have any
secured loans. Therefore could be concluded that either it is playing very safe in
the market in relation to liability or ICICI has yet not overcome the crisis of global
recession and its impact on it.
There may be a reason that the market is not supporting ICICI enough that it can
afford secured loans.
But since somehow it managed to acquire unsecured loans and also has fully paid
up share capital, therefore company will certainly move wisely to give maximum
return to its investors and also customers. But here according to the data given, it
can be concluded that Reliance is somewhat in a better position than ICICI.

REFERENCES:

 http://www.moneycontrol.com/financials/relianceinsurance/balance-
sheet/RI

 http://www.moneycontrol.com/financials/iciciprudential/balance-sheet/RI

 http://www.moneycontrol.com/financials/relianceinsurance/capitalstructure/
RI

 http://www.moneycontrol.com/financials/iciciprudential/capitalstructure/RI