LIC sees degrowth on ULIP this fiscal, says government

On the conventional plans of LIC there is growth of 11% in policies and 22% in premium till end of February 2012

The government today said that Life Insurance Corporation of India (LIC) has seen degrowth in sales of unit linked insurance plans (ULIP) in the current financial year.

"There is degrowth on ULIP which is a trend among the whole insurance industry," Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha.

To a question on sales of various products of LIC, Meena said, "On the conventional plans there is growth rate of 11% in policies and 22% in premium till end of February 2012."

Dispelling the rumour that some of the agents have quit following cut in commission and strict guidelines set for them by LIC, Meena said, "The corporation has reported that there is no instance of quitting of agents in the LIC due to reduced commission or strict guidelines to agents set for them by LIC."

"The commission rates for the new products are also approved by Insurance Regulatory and Development Authority of India (IRDA)," he added.

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Ignoring power thefts led to over Rs2-crore revenue losses: CAG

The CAG has said that the Goa Electricity department has withheld itself from booking people involved in theft cases under Section 135 of the Electricity Act 2003, which attracts imprisonment

Panaji: The Goa Electricity department has been found to be lenient and sympathetic towards people involved in power thefts, due to which the state suffered revenue losses to the tune of Rs2.78 crore, as per the latest CAG (Comptroller and Auditor General of India) report.

The department, in a reply to CAG has said that these power thefts were not "intentional". The CAG has said that the department has withheld itself from booking people involved in theft cases under Section 135 of the Electricity Act 2003, which attracts imprisonment, PTI reports. It has also failed to refer these cases to police department adopting lenient view towards them, the CAG has pointed out. The audit report, which was tabled on the floor of the House yesterday, said that the department's act of ignoring provisions in the Act to deal with the power thefts has left the state with loss of revenue of Rs2.78 crore during the period of 2006-11.

"During the period from April 2006 to March 2011, the meter, relay and testing (MRT) division of the department had detected 453 cases of theft of energy," the CAG has noted. The department recovered energy charges in 141 cases to the tune of Rs67.73 lakh. "These cases were neither reported to the police for further action nor any compounding charges were collected, thereby absolving the persons involved in the theft cases from criminal liability," the report said adding that the department failed to comply with codal provisions which led to this loss of Rs2.78 crore by way of compounding charges.

The CAG has quoted section 135 of the Act as per which consumers will have to be levied compounding charges at the prescribed rates. After CAG's initial queries, the department has told the authorities that the assessment of loss due to non-compounding charges was made but they were yet to be recovered.

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Satyam merges with Tech Mahindra to create $2.4 billion company

The merger ratio is pegged at 8.5:1, which means share holders get 8.5 shares of Mahindra Satyam for each share of Tech Mahindra.

Mumbai: The diversified Mahindra Group announced the amalgamation of its two technology companies, under which Mahindra Satyam will merge with parent Tech Mahindra, creating a $2.4-billion entity that will be the fifth largest software firm in India, reports PTI.

"This merger is a key part of our strategy to deliver industry leading performance and this would make us a company with an annual revenue of $2.4-billion approximately, with more than 75,000 workforce and over 350 active clients across 54 countries," Tech Mahindra vice-chairman and managing director Vineet Nayyar told reporters here.

Nayyar, who is also chairman of Mahindra Satyam, said the merger happens now as the company has achieved all the targets set for itself and it was appropriate to start the merger process as the new company is ready to take off.

The merger ratio is pegged at 8.5:1, which means share holders get 8.5 shares of Mahindra Satyam for each share of Tech Mahindra.

Mr Nayyar said the new entity will be headquartered in Mumbai and the merger will be effective retrospectively from 1 April 2011, while the full integration process will take another nine months. He also said both the companies will have separate AGMs for this fiscal.

Mr Nayyar said the new management structure is not finalised yet as a revamp of the existing management is on the anvil.

To a query on a possible delisting of Satyam shares from the Nasdaq, Mr Nayyar answered in the negative.

Earlier, the companies had informed the exchanges that their boards approved the merger with an exchange ratio of 2:17 ratio. Two shares of Tech Mahindra will be given for 17 shares of Mahindra Satyam, with shareholders getting one share of Tech Mahindra for 8.5 shares of Satyam.

The companies said 20.4 crore equity shares of Rs2 each of Mahindra Satyam will be transferred to a trust of which Tech Mahindra will be the beneficiary.

The companies were advised by JP Morgan, Morgan Stanley and KPMG for the merger process.

Tech Mahindra took over the reins of the scam-hit Satyam Computer Services in April 2009 by picking up 31% stake for $351 million at Rs58 per share, a 23% premium, in a government monitored deal.

The company was rebranded as Mahindra Satyam.

The deal saw the Mahindras edging out existing partner engineering conglomerate Larsen & Toubro, widely seen as a front-runner, and private equity firm WL Ross & Co.

Founder and the then chairman of Satyam B Ramlinga Raju in January 2009 had admitted to multi-crore accounting fraud of around Rs7,000 crore at the beleaguered firm.

For the October-December quarter, Mahindra Satyam reported a stronger-than-expected five-fold jump in net profit to Rs308 crore, helped by a fall in the rupee value. Its consolidated revenue rose to Rs1,718 crore, up 34%.

The total headcount of the company stood at 32,280, a net addition of 188 quarter-on-quarter.

Tech Mahindra, for the same quarter, reported 7.3% spike in net profit to Rs276 crore, backed by gains from its associate firm Mahindra Satyam.

Its revenue rose to Rs1,445 crore, up 19.3%. The increase in the topline was despite a drop of revenue from its largest client BT.

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