Archive for the ‘Financial Services’ Category

Divided We Rise!}

November 30th, 2018

Submitted by: M&A Critique

Mastek to demerge its Insurance Business

Demergers are gaining momentum in the Indian Market again. There has been a spate of demerger announcements in the past months by Indian Companies. Crompton Greaves, Polaris, India Cements all appear to be in spin-off mode. Crompton Greaves, a part of the Avantha Group, announced demerger of its consumer products business this July, while Polaris Financial Technologies hived off its products business into a separate entity, called Intellect Design Arena. Divided we rise seems to be these companies Mantra. Joining this spin-off bandwagon is IT Company Mastek Limited, a BSE-NSE Listed Company, which has announced to demerge its insurance products and service business into a separate Listed Company. In this article, we have tried to analyze the Mastek demerger and what it means for the Company and its Investor moving forward.

THE DEAL

Mastek is an IT solutions player with global operations providing new technology and intellectual property led enterprise solutions to insurance, government, and financial services organizations worldwide. Mastek Limited has two distinct business verticals:

Insurance Products and Services Business This business vertical is Intellectual Property-centric, domain intensive and largely caters to the US insurance market, with some customers in other jurisdictions like Canada, Malaysia, Thailand, and UK. It constitutes nearly 55% of its business.

Vertical Solutions Business This business vertical delivers large unique complex programs, leveraging information technology service capabilities. This business largely caters to the UK markets, serving the government, financial service, and retail customers.

Mastek Limited has a Global presence with operations in 7 countries and 8 global delivery centers. The US Subsidiary of Mastek Limited is known as MajescoMastek. Mastek has a talent pool of approx. 3,000 professionals.

Step1: Mastek Limited by way of Scheme of Arrangement will demerge its Insurance business into Minefields Computers Private Limited (to be renamed as Majesco Limited) with effect from the Appointed Date 1st April 2014. by a Court approved Scheme of Arrangement under the provisions of Section 391 to Section 394 of the Companies Act, 1956. Consequent upon the demerger, Mastek will remain with Solutions businesses and will continue to run the same.

Step2: As a consideration for the demerger, Majesco will issue its shares to the existing shareholders of Mastek in the ratio of 1:1. The existing shares of Majesco held by Mastek will be canceled. Consequently, the shareholding pattern of Majesco would be a mirror image of the shareholding pattern of Mastek. The shares so issued by Majesco to the shareholders of Mastek would be listed on the Stock Exchange.

Step3: Upon the demerger becoming effective, Majesco will transfer its Offshore Insurance Operations by way of Slump Sale to its step down subsidiary Majesco Software and Solutions India Pvt. Ltd. (MSS India), a wholly owned subsidiary of MajescoMastek Insurance Software and Solutions Inc. from the Appointed Date 1st November 2014. The consideration for the transfer of the Offshore Insurance Operations would be equal to Rs. 22 Crores to be discharged in Cash.

There will be a separate board for the two companies and the two entities will be sister concern companies. In Majesco, it will make sense to have a more insurance-specialist board, while Mastek shall have Solutionsspecialist Board. The Scheme is subject to the approval of Honble High Courts of Bombay and Gujarat, shareholders and creditors of Mastek, SEBI and Stock Exchanges and expected to be fully operationalized in the second quarter of 2015.

COMPANY STRUCTURE

The current structure of Mastek has the promoters owning about 51.8% and the public with large institutions holding about 48.2%. Also, the company operates in different countries through the subsidiary model. In the new structure, the whole intent will be to move these subsidiaries so that all the Solutions businesses come under Mastek. Majesco will be the listed entity in India as far as Insurance business goes. The Indian part of the operations will operate directly under Majesco, while all global operations will operate through the MajescoMastek US wing.

CURRENT STRUCTURE

WHY to SPLIT?

Both business verticals are significantly different in terms of their business models, growth opportunities, investment requirements and staff profile. On one hand, the Insurance Products and Services Business offers tremendous growth potential but also has large investment requirements in terms of Research and Development, brand building and sales. On the other hand, the Vertical Solutions Business offers steady growth, is profitable, but has lesser investment requirements. Also, the current business structure of Mastek limits the ability of the Insurance Products and Services Business to fund its organic and inorganic growth independently. This becomes a key challenge for the growth of this vertical.

Operating the two business verticals under one umbrella of Mastek has made it difficult for each of the businesses to perform to full potential. Further, the differing risk-reward profile of the two businesses has led to the overall performance of Mastek being sub-optimal. The diverse trajectory of the Insurance Products and Services Business and the Vertical Solutions Business also leads to disparate risk-reward profile for the stakeholders.

In order to mitigate the aforementioned challenges splitting the two business verticals is a good decision. The move will not only help in unlocking the value for existing shareholders but will also help in realizing the full potential of the individual verticals.

RESTRUCTURING OBJECTIVE

The key objectives for this restructuring, which is primarily focused towards maximizing shareholder value, are:

It will give shareholders the opportunity to participate in the business of their choice, based on their risk-reward profile;

It will facilitate each business to independently pursue their growth plans through organic /inorganic means;

It offers a dedicated management team focused on a single business vertical; and

It will create a platform to enhance financial flexibility to pursue next stage of growth.

It will leverage cross-border synergies between insurance clients across geographies and provide a wider spectrum of intellectual property offerings to global customers and market needs.

FINANCIALLY SPEAKING

As on March 31, 2014, Masteks consolidated operating revenue stood at ?. 923.02 crores as compared to ?. 683.4 Crore in FY 13 reflecting annualized increase of 1.3% in rupee terms and 6.6%in constant currency dollar terms; with the Insurance business contributing ?. 507 crore (55%) and Solutions churning ?.416 crore (45%).

The Consolidated net worth of the company stood at Rs. 560.19 Crores.

The Net Profit stood at ?.51.8 crore as against Rs.34.3 crore in nine month period ended March 2013.In 2013-14, Mastek spent Rs 57.5 crore on R&D while its net profit was Rs 51.8 crore. Due to higher R&D spending, the insurance division has a lower operating profitability of 6% than 14% for the other division. This has impacted the companys overall valuation. Due to higher capital investment in the insurance vertical, the overall valuation is much lower at present.

Masteks cash on books was ?. 171 crore, of which around ?.42 crore would be given to the solution entity, with the balance going towards the insurance business. Thus Mastek is driving the bulk of its cash reserves towards the Insurance business as it requires larger investment as compared to the Solutions Business. Along with the cash and equivalents, Majesco will gain two existing development centers while Mastek will retain cash of Rs. 40 crore along with an advance tax benefit of Rs. 31 crore and six centers.

Post announcement of the demerger, the stock price of Mastek have seen an upward trend.

Comparable financials as on 31st March 2014:

(Rs. In crores)

Particulars Solutions Business Insurance Business

Networth 206.4 353.8

Fixed Assets 55.8 205.4

Cash & Cash Equivalents 42 129

Revenues 416 507

EBITDA 599 301

EBITDA Margin 14.4% 5.9%

Adjusted EBITDA (without considering product development expenses) 875

Adjusted EBITDA Margin 17.3%

The companys trailing 12-month (TTM) EPS was at Rs. 23.13 per share as per the quarter ended September 2014. The stocks price-to-earnings (P/E) ratio was 11.50; which is lower than the other similar sized IT Players.

GOING FORWARD

In the Insurance vertical; Mastek does 85% of its business in the US. They have invested substantially in IP in terms of acquiring companies as well as building their IP over $90 million in the last five to six years. They also have a good client track with almost 80 customers in Insurance in the North American market. 7 out of the top 25 P&C players are their customers. The clear opportunity is that Majesco already owns the IP for Insurance, especially the P&C business; it uses India as a delivery center on a cost plus model. If they can build the balance sheet, if they can increase the financial margin around the US operation and MajescoMastek US, then they have an opportunity to raise capital, use that entity with its balance sheet strength to acquire companies to raise further capital and make the necessary investments and grow this business, which they were finding difficult to do earlier.

The Solution Business is predominantly centered around the UK with almost 95% of the revenues being earned from the UK. Although solutions is a higher margin business compared to insurance where fixed costs are huge, the company size may become a challenge going ahead. One of the challenges they may face is that they are not a large company, though they are specialized and have a niche. So from a customers and employees perspective, the size could be a challenge. However, the reputation and track record that Mastek have should help them overcome this hurdle. Being small, they are also agile. That is also one way which can help penetrate markets deeper.

CONCLUSION

The biggest problem for Mastek was that it had two dissimilar businesses under the same umbrella and that led to cross-funding and actually disproportionate investments in the Insurance business as compared to the Solutions business. As a result, it created more suboptimal results rather than actually leveraging any potential synergy benefits. Thus, the move was taken by the management to demerge the Insurance Business appears to be in the right direction. This is in line with similar restructuring adopted by other IT majors. Mastek demerger is similar to the Polaris demerger in terms of its structure and benefits to the stakeholders. With both the demergers both Mastek and Polaris were able to focus on the individual businesses, serve their customers better, be able to access capital, and give shareholders an opportunity to invest in the area of business which suited their risk profile.

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Questions To Ask The Bail Bonds Company In Canton Before You Sign A Contract

May 15th, 2018

byAlma Abell

When you need a bail bond to help a family member, you’re going to want to look around for a bond company that you can work with. When looking at a Bail Bonds Company In Canton, there’s a few questions that you may want to ask before you sign a contract with the company. Some of these questions are:

* Will you pay the bond as soon possible after I have signed the contract?

* How long does it take for the bond to be paid and processed?

* What payment methods do you accept? Can I use collateral to cover the bond?

* What is the percentage that I have to pay to cover the bond?

* What happens to my money/collateral if the person I am helping attends all of their hearings?

* What happens to my money/collateral if the person I am helping doesn’t go to their hearings?Is there a way to fix things so that I don’t lose my money/collateral if they don’t go to their hearings?

* What fees will I need to pay?

* Is there anything else that is expected of my if I sign the bail bond contract?

By asking these questions, you can find out if you want to pay the bail for your family member and, if so, if the company you are speaking with is the right company for you. While it is a good idea to get the answers in person, you may be able to find the answers to many of these questions online at the bondsman’s website. A good Bail Bonds Company In Canton will not only be able to help you with getting a bail bond, but they will also take the time to answer all of the questions you may have about the contract or the bail bond process.

If a family member has been arrested, you need to find a bail bonds company that can help you as soon as possible. Once you have chosen a company, make sure you ask the above questions so that you know what is expected of you and what will happen if the contract is broken. By doing this, you know what you are getting into before you sign the contract for the bail bond.

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Purchasing Home Insurance In Lancaster, Pa

March 22nd, 2018

byAlma Abell

Homeowners insurance provides valuable protection in more than one way. First and foremost insurance is there to protect your investment. Should your home be damaged or destroyed by a fire or storm, your insurance will provide the money you need to rebuild or repair the damage. If you have someone break into your home and steal possessions or vandalize your property, your homeowner’s policy will also assist with replacing lost items and cleaning up the mess.

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Another important protection offered by insurance is liability. This is the part of the policy which protects you if someone is hurt on your property. Should someone be injured by falling down, bitten by your pet or through some other incident, your liability insurance ensures that your property and income are not at risk from a lawsuit.

You are required to have a homeowner’s policy as part of the terms of a mortgage. Lenders need to protect their investment, so they require the borrower to keep their property insured. Many will insist the insurance be included in an escrow account so they can be certain the payments are made and the insurance is kept current.

When purchasing insurance your agent will make certain the policy will not just cover your personal property and what is owed on your loan, but enough to rebuild the same structure. This is important because should the worst happen and your policy only cover the loan, you would be the proud owner of an empty lot.

If you are looking for a competitively priced policy for Home Insurance in Lancaster, PA contact Susquehanna Insurance Management Ltd. They offer home and auto policies as well as life insurance and motorcycle, boat and RV insurance. They have policies which will cover all of your personal needs. Should you also own a business, they provide commercial policies too.

Home Insurance in Lancaster, PA does not have to be confusing or expensive. Most policies are exceptionally affordable and many insurance companies can offer you valuable tips for lowering your premiums. Homeowners insurance is too important to go without, even if you are not required to have it. Do not let what is probably your largest investment go unprotected, get insurance today.

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Beijing Summer Clothing Market Heated Fast

February 24th, 2018

By Himfr Tian

Recently in several major department stores in Beijing that the many brands of summer debut, summer clothing market, the battle had begun. Beijing New World Department Store, Chongwenmen staff told reporters that the rapid warming as the weather, summer clothing sales boom has come to the brand’s competition is getting intense.

Seasonal spring selling cheap

Relatively short time in spring this year, which all spring manufacturers in terms of sales, more or less had some impact. Now the market is the summer stage, do not sell it where to go finished the spring?

Reporter visited several garment factories and shopping malls in the sales department, found that the current approach of the spring have the following 3 methods: first, by a very low discount prices, sale organized by field, with prices to attract consumers, continue to sell part of the spring ; Second, part of the brand to allow shopping centers to sell the remaining spring returned to the manufacturer; Finally, there are some spring shopping will stay until spring before the second year, prior to listing in the new spring again at a discount. Through a series of measures, can not sell it in the spring digestion.

“Although the weather has been very hot, many people began to buy summer, but now spring is really a very cheap price, as long as the style and quality are in line with my request, I will choose to buy a number of styles and colors of spring will not be out of date keep wearing the fall or next year, after all, is now more affordable to buy! “is a discount shopping mall spring of Miss Liu told reporters. She and her friends have bought some spring like his, but because of high prices and not buy the spring.

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The new summer hot market

May 13, went to the Beijing Zoo and the century clothing wholesale Tin Lok international apparel market. Coincides with the weekend, where the sales of summer clothing. Market in big crowds, although the cabin can accommodate a lot of stalls with people choose clothing, but did not affect the enthusiasm of consumers, many people stand in front of several teams from the long wait for election into the room clothing. Pairs of couples and a companion of the female consumer has become the main force of consumption. Under the influence in such a climate, even the journalists feel that they wear long clothing trousers, not only outdated it heavy, but also the buy summer clothes.

For apparel manufacturers, the early end of last year, clothing replacement plan had identified only need fine-tuning can be based on market price. Many manufacturers have said that early production and sales in the spring, while summer of intense preparatory work already carried out. The new summer styles and colors of the selected work already started in the hands of designers. Only well prepared ahead of time can be in the competitive market invincible.

Lead the trend of casual wear

As the materials less seasonal clothing in summer is the season of low prices of most equipment. Coupled with hot summer weather, people often want to change a couple of days on a set of clothes, summer has become the number of people have the most season clothing and style. Strong Sales of summer clothing that the two main factors.

It is learned into the sales season since, ESPRIT, Wayne Arthurs, Giordano, Metersbonwe other leisure apparel sales were pretty good. Industry insiders say that these brands on the greatest impact on young people’s consumption and leisure to master the current season’s clothing trends, but also more in line with the needs of youth. In a well-known leisure brand of clothing in supermarkets, Shopping guide told reporters that even non-holiday period, the daily sales could reach at least 200,000 yuan.

However, experts advise that consumers should not blindly follow fashion. Face an array of products on the market, to choose for themselves and really really need their own clothing.

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Private Vs. Public High School &Amp; College Admissions Success

February 13th, 2018

This week I’m going to answer a popular question among parents concerning whether from a college admissions perspective if it’s better for a student to attend a public or private high school and how this decision factors into the admissions equation. After having attended both public and private high schools myself, interviewed several administrative insiders and college admissions officers our research has shown that the short answer is no and the long answer is that it depends. I’ll explain what I mean by both these terms and what strategies are most useful for high school students in this edition of college planning Saturday.

In order to effectively answer this question let’s start by talking about the major differences between public and private high schools as they relate to both you as a parent, your student and their ability to get into College.

Cost of Attendance:

Many parents make the mistake of believing that if a high school charges more it must be better. Not true. Not only do private high schools tell Colleges that you most likely do have spare cash available for College tuition many College specific scholarship programs are not available to students. Likewise, it we have also found that many expensive private high schools in the country provide an educational experience that is only equivalent to that of a well funded public high school. The reason is that many private high schools invest their endowment money in order to continually build their brand name. Yes they have the capacity to provide better classrooms, facilities and teachers but the question you want to ask yourself is to what degree they actually do so. They are most valuable when they actively invest substantial sums of capital into building the structures and conditions necessary to help students outperform national averages on important metrics of high school achievement. Many of these schools however have proven incapable of doing so.

Many of the core services that your student needs in fact to get into a top college like stellar AP classes, SAT preparation and extracellular opportunities are available at many great public high schools for free. A national survey taken by the College Board revealed that Colleges on average accepted roughly 25% of their students from private high schools while 65-70% of students were from public high schools. This data suggest that Colleges do not distinguish their admissions criteria by whether a high school is public or private but rather what percent tile your student ranks within that given school.

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High School Class Ranking:

As a result one of the most important things you should be looking at is not whether the high school is nationally ranked high enough but rather where your student places within their graduating class. This is why students who attend highly competitive high schools where the majority of students all have private tutors, SAT prep classes and lots of encouragement at home will have a far more difficult time graduating in the top 10% of their class than students who attends a far less competitive schools and have less support at home. It is actually more challenging therefore for students who attend more competitive high schools to graduate high enough in their senior class to significantly distinguish themselves.

Class Curriculum:

Most public high schools, because their funded by mostly state and federal funds will only typically offer general classes in the core subjects of math, English, reading, writing, science history and physical education. In addition to these core subjects, many public high schools offer programs in the music and the arts. In contrast because private high schools are funded internally, the breath of their curriculum is often much larger and more narrowly tailored towards specialized programs and the diverse interests students may have. So from a purely curriculum perspective private high schools are far superior in that they have the capacity to offer students a very diverse and rich learning experience. Now where parents typically error on this specific point is thinking that this matters to a College. It doesn’t. The reason is simple, College admissions departments hate subjectivity and there is no way as of yet to fairly and objectivity take into account the vast differences that specific classes have on whether a student is qualified for admissions. Instead, your focus should lie on what is measurable and what is objective and what Colleges actually look at which includes GPA, SAT and other standardized measures of achievement. I can’t tell you how many times we have worked with clients whose students took generic AP classes, did excellent and got into some great Colleges while other clients had their students take highly complex specialized classes, did mediocre and were surprised when their admissions competitiveness suffered as a result.

Location:

This is a factor many parents fail to take into account when thinking about public versus private high schools. When I attended private high school some years ago, one of the biggest challenges I had with attending was that I had to commute via bus 60 minutes every day. After working with thousands of families as a financial and admissions advisor I am convinced that this plays a critical role in getting into College. Why? Because doing well in your classes and tests are based not on how much time your student spends at school but how much time they spend at home mastering the material. Learning is an integrated process that is the result of always thinking about and applying class concepts. If your student is spending their time focused on logistics and travel it only makes this learning process more challenging to achieve.

Passion & Desire:

Most importantly, if you want to your student to have the opportunity to attend the College of their dreams then it’s vital that you keep in mind that research reveals that student ability and achievement is not something you academically create but rather something you unleash within them. How do you unleash your student’s abilities you may ask? Easy. Allow them to learn and grow in an environment their most passionate in. It’s like a quote my mentor once told me that “attitudes are more important than abilities, motives than methods and character than cleverness; and at the end of the day the heart takes precedence over the head… so follow your heart and your abilities will unleash like an avalanche”. That is perhaps the on universal truth inherent in all the students of families we have worked with that were most successful in getting into any College they desired.

So remember, having your child attend a highly competitive private prep school is pointless if you’re not focused on having them academically distinguish themselves within their class. That is one very important factor in College Admissions and one that can be accomplished at any high school, public or private.

To discover the business-side behind the admissions and financial aid process the “stuff-behind-the-stuff” sign up to receive (1) a free chapter of Phillip Lew’s College Planning book, (2) a report on which colleges give grants for high income families and (3) a database on where to find the highest quality private scholarships. To instantly receive these free gifts go to totalcollegesolutions.com and watch our 5 minute introductory free video.

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Top Five Reasons Why You Should Choose To Make Money Selling E Books}

October 3rd, 2017

Submitted by: Daniel Schmidt

When I was young, my father had always told me that not many people get rich from writing. Like artists, there are so many of them yet only a few land major roles, or even make it to the big screen. Many of you might not know that there are already a handful of people who have made money writing e-books and I am here to tell you why you, too, should consider selling e-books an option.

1. Everyone needs to make money. Let’s face it, one way or another, money does make the world go round. If you are either a student who wants to earn extra allowance, or an employee who wants to save up for that dream vacation, or just someone who wants to be able to pay the bills, making money selling e-books should be an option.

2. If you love writing, then it is about time that you use it to make money. If you have an idea that you want to put on paper, a story, a quick-help guide on a certain task, or a self-help book you can always use that to start to make money by writing your own e-book. A lot of people write about all sorts of things every day, but not everyone gets paid for it. You can do research on your chosen topic, start writing on it and when you are done, you have your own e-book. You had the liberty doing something you like while making money at the same time.

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3. Bill Gates did not make a fortune selling some other person’s software. It has been proven that there is greater profit selling your own products, rather than to make money for marketing. Advertisers make money by selling a product to a specific market, but the greater profit goes to the company that makes the product.

4. You have an international market that is one click away. Online resources, such as e-books can be purchased online. This means that people all around the world have the option to buy your books if they want to. Unlike hard-bound and paperback books that need to be shipped so that the buyer can read them, e-books can be downloaded or sent via e-mail. This also lessens the cost for yourself and the buyer when it comes to shipping charges. You do not have to worry about printing the book as well. Writers in the day usually needed a huge amount of money to publish their books, unsure if they will get back their capital. But, you want to make money and not spend it.

5. You can always give your books a fresh new look. If there are changes you need to make, or if you just want to make your book more specific to an audience, you can always opt to change it. Compared to hard-bounds and paperbacks, e-books can be re-published and edited easily. For example, if you published 500 traditional books, but you wanted to change the cover or preface of the book, you cannot change the already published books even if they are not yet sold.

While there are a lot of strategies online to make money, selling e-books is a good way to put your writing skills and creative juices to good use. Like my grandmother always said, There is nothing bad about hitting two birds with one stone.

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