1.       Introduction:

Personalize Page: PLIC

Business: Life insurance

Established: June 2007

Chairman: Rajendra K. Khetan

CEO: Resta Jha

No. Of branches and Sales office: 68

Reinsurer: SCOR Global Life, French Company with assets size USD 6.9 Billion (as of 2010)

Corporate office: Hattisar, Kathmandu.

2.       *Ownership pattern:

Promoters: 70%

       ¿Organized institutions: 53.08%

       ¿Individuals: 16.92%

General Public: 30%

Foreigners: Nil

 List of prominent Shareholders

Name                                                            Shareholding(%)

Laxmi bank limited                                  15%

Mercantile Capital Pvt. Ltd.                  11%

Mutual trading Co. Pvt. Ltd.                 10%

Himalayan Exim Pvt. Ltd.                       10%

Ratan Lal Sanghai                                     8%

Prem Prakash Khetan                            8%

Rasmi Holding Pvt. Ltd.                          6%

 Note: *As per the latest published annual report.

 3.       Key achievements of the Company:

 4.       Company at a glance:

a)      Aggressive business.

b)      Growth focused management and promoters.

c)       Heavy advertisement with prestigious brand ambassador.

d)      Introduction of innovative products like pension plans.

e)      Attractive slogan development.

5.       Equity Analysis:

52 Week high price: 218

52 Week low price: 134

Latest trading price ( LTP): Rs. 165( as of 01.12.2011)

Paid up Capital: Rs. 36 Cr.

Market Capitalization (at LTP): Rs. 59.40 Cr.

EPS = RS. 35.16 (Ref. Audited Q4 067/68)

P/E Ratio: 4.69 (at LTP)

Net Worth per Share: Rs. 160.32 (Ref. Q4 067/68)

Total trading days in Q1 068/69: 54 out of 57.

Total shares traded: 38,600.

 6.       Figures from Financial Statement: (based on audited Q4)

Paid up Capital: Rs. 36 Cr.

Reserve and Surplus: Rs. 21.71 Cr.

Life Insurance fund: Rs. 36.87 Cr.

Size of Balance Sheet: Rs. 94.587 Cr.

Profit: Rs. 12.66 Cr.

7.       Key Findings/Disclosures:

1)      The Company claims that it reinsures with SCOR Global life, top 5 reinsurance the world. However, on observation of its Financial Statement, the re-insurance commission or expenses isn't charged or accounted.

 2)      Based on audited Financial Statement (067/68), the net profit of the company appears to be Rs.12,65,68,000.

In addition the net worth of the company appears to be Rs. 577.1 Million.

However this representation of profit and size of Balance Sheet is based upon the Standard prescribed by the relevant accounting and the auditing principles (NAS & NSA). Through investor's perspective, one shouldn't arrive at conclusion on investment decision solely relying on these figures.

This value of profit arrives because of the deferred tax asset (DTA) amounting to Rs. 82.549 Million. The aforestated portion of profit isn't distributable thus the actual value of real profit is reduced by two third. The effect of this deferred tax treatment inflates the value of Reserve and Surplus thus finally inflating the value of Net worth of the Company and the size of the Balance sheet. Thus effective EPS, P/E and Networth per share come different when considered this effect.

 3)      Life insurance business is among that category of business where income is very conservatively or toughly recognized in Profit and Loss account. The substantial contribution in profit comes from the policies like term policies and other similar policies where liability incurs only upon claim and not on maturity. For other long policies there is the necessity of the actuary's valuation.

Thus accelerated growth in the profit of life insurance company isn't so easy as compared to other industry.

 4)      According to regulatory body directives, the life insurance companies are required to raise up their capital to minimum Rs. 500 Million. By the observation of Company fundamentals, the right issue is more likely in near future.