Annual Report 2019 Artwork - LR
Annual Report 2019 Artwork - LR
ANNUAL
REPORT
For the year 2018-2019
KHUSHIYAN
JUST A
TOUCH
AWAY
CONTENTS 7-33
35-42
DIRECTORS’
REPORT
AUDITORS’
REPORT
45-65 FINANCIAL
STATEMENTS
87-93 MANAGEMENT
REPORT
2
BOARD OF DIRECTORS
Mr. K. Srinivasa Gowda Chairman
Mr. Akira Harashima Vice Chairman
Mr. Balwinder Singh Nakai Director
Dr. U. S. Awasthi Director
Mr. Rakesh Kapur Director
Dr. P.S. Gahlaut Director
Mrs. Mira Mehrishi Independent Director
Mr. Sudhakar Rao Independent Director
Mr. Amar Sinha Independent Director (w.e.f 1st July, 2018)
Mr. Chisato Kojima Director
Mr. Shinjiro Hamada Director
Mr. Allen Po Hsu Juang Director (w.e.f. 7th February, 2019)
Mr. Warendra Sinha Managing Director & CEO
Mrs. Anamika Roy Rashtrawar Director (Marketing) (w.e.f 1st June, 2018)
Mr. Jun Matsui Director (Operations)
SENIOR EXECUTIVES
Mr. H.O. Suri Financial Advisor (w.e.f. 1st June, 2018)
Mr. R. Kannan Executive Director
Mr. Sanjeev Chopra Executive Director & CFO
Mr. Ramesh Kumar Executive Director
Mr. Sanjay Seth Executive Vice President
Mr. Sumesh Mahendra Executive Vice President
Mr. Abhay Kumar Executive Vice President
Mr. V. Rajaraman Executive Vice President
Mr. Abhijeet Chatterjee Executive Vice President
Mr. Gunashekhar Boga Executive Vice President
Mrs. Seema Gaur Executive Vice President
Mr. Subrata Mondal Executive Vice President
Mr. Rajeev Chawdhary Executive Vice President
Mr. Deepak Prinjha Executive Vice President
Mr. Komei Watanabe Executive Vice President
COMPANY SECRETARY
Mr. Amit Jain Vice President
3
MANAGEMENT TEAM
4
NOTICE OF THE NINETEENTH ANNUAL GENERAL MEETING
TO THE MEMBERS
NOTICE is hereby given that the NINETEENTH ANNUAL GENERAL MEETING of the Members of IFFCO TOKIO
General Insurance Company Limited will be held on Thursday, the 11th July, 2019 at 1.45 PM at its Registered
Office at IFFCO Sadan, C1, District Centre, Saket, New Delhi-110017 to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Financial Statements and Consolidated Financial Statements
st
of the Company as at 31 March, 2019 together with Auditors' Report thereon and the Report of the Board
of Directors to the Members.
2. To appoint Director in place of Mr. K. Srinivasa Gowda (DIN No.00059811) who retires by rotation and is
eligible for reappointment.
3. To appoint Director in place of Mr. B.S. Nakai (DIN No.00823528) who retires by rotation and is eligible for
reappointment.
4. To appoint Director in place of Mr. Chisato Kojima (DIN No. 07855569) who retires by rotation and is
eligible for reappointment.
Registered Office
IFFCO Sadan, By Order of the Board,
C-1, District Centre, Saket,
New Delhi - 110017 (AMIT JAIN)
Dated: 29th April, 2019 VP & Company Secretary
NOTES:
1. A Member entitled to attend and vote at the meeting is entitled to appoint proxy to attend and vote
instead of himself and such a proxy need not be a Member of the Company.
2. Instruments of proxies in order to be effective must be received/deposited with the Company at its
Registered Office not less than 48 hours before the time fixed for the meeting.
th th
3. The Register of members and Share Transfer Books will remain closed from 5 July, 2019 to 11 July, 2019
(both days inclusive)
5
Form No. MGT-11
PROXY FORM
[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and
Administration) Rules, 2014]
I/We, being the member (s) of .................…………. shares of IFFCO-TOKIO GENERAL INSURANCE COMPANY
LIMITED, NEW DELHI, hereby appoint …………..…......……………………..… of…………….………...………… failing him/her
………………………....................……..of …………………................ or failing him/her ………………...............…………… of
…………………………………..........................……as my/our proxy to attend and vote (on a poll) for me/us and on my/
our behalf at the Nineteenth Annual General Meeting of the Company to be held on ___________, the
__________________ at ______________ P.M. at IFFCO Sadan, C-1, District Centre, Saket, New Delhi - 110017
and at any adjournment thereof in respect of such resolutions as are indicated below:
Resolution No.
1…………………………...................………..........
2…………………………...................………..........
3…………………………...................………..........
4 …………………………...................………..........
Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered
Office of the Company, not less than 48 hours before the commencement of the Meeting.
6
DIRECTORS’
REPORT
7
Honourable Members,
Your Directors are pleased to present the Nineteenth Annual Report and Audited Financial Statements of the
Company for the Financial Year 2018-19 along with the Auditors' Report thereon.
ECONOMIC ENVIRONMENT AND INDUSTRY SCENARIO:
The Indian economy continued to grow at a healthy rate throughout the year, though the 8.2% growth recorded
in the first quarter eased to around 7.3% in subsequent quarters. This easing was a result of rising global
volatility, mainly financial, normalized monetary policy in advanced economies, shock waves from deepening
trade disputes around the globe, and investment rerouting away from India. The IMF has projected a growth of
7.5% for India in 2019-20 and a further acceleration to 7.7% in 2020-21.
The initiatives of the Government and the Insurance Regulator have helped to increase the penetration of
insurance in newer sectors. Several factors such as growing middle class, young population and increasing
awareness towards the need for protection and retirement planning are poised to contribute to further
growth.
Application of technology is the new driver for the insurance industry as it strives to add more customers in a
country that still remains largely under-insured. Insurance Industry has also responded well to the large
number of reforms initiated by the Regulator and introduced a number of easier-to-understand products. It
was also a year of digitization and launch of customer-friendly products as there was a rapid growth in the
online channel. There was robust adoption of technology-backed servicing initiatives for customers, sales force
and agents alike. With the opening up of payment banks, small finance banks and other similar partnerships,
insurance products reached many more people and helped them secure their and their family's future. The
double-digit growth of the Indian insurance industry was aided by enhanced penetration, increasingly
informed and aware customers, efficient distribution channels and government schemes.
The regulatory and legislative dynamism across the spectrum of Life, non-Life and Health insurance is opening
newer possibilities. There is a continuous blurring of the line between the digital and physical space, indicating
the tectonic shift the industry has started to witness. This shift is to intensify substantially in the coming years.
The list of reforms undertaken by the Government and the Regulator in 2018 is long. Diseases such as HIV and
mental illness were brought under policy covers, long-term third-party motor insurance became mandatory and
the Government launched an ambitious Ayushman Bharat scheme to cover almost 50 crore people with medical
insurance. The Indian insurance industry is expected to grow to more than ` 1,900,000 crore by 2019-20 aided
by this health insurance scheme. The other growth drivers like rising disposable incomes, presence of global
players and easing of the regulatory regime, are increasingly contributing to the spread of an 'insurance culture'
in the country.
The ambitious Ayushman Bharat scheme covering 10 crore poor and vulnerable families with a cover of ` 5 lakh
per family of five with tertiary care and hospitalization will be transformative for the insurance industry. This
will have a major multiplier effect on a host of allied sectors and create lakhs of new jobs.
Production of automobiles in 2018-19, excluding commercial vehicles and three wheelers, has seen growth of
4% to reach 2.85 crore units as compared to 2.72 crore units last year. Cumulative production and sales during
April to March of 2018-19 has also grown by 4% as compared to the same period last year. Sales showed some
signs of slowing down towards the latter part of the year.
During the year, 2018-19, the gross premium of all non-life insurers increased by 14.2% to reach ` 1,61,678
Crore. During the same period, Gross Direct Premium (GDP) growth for private sector companies was at 24.7%
which is higher than the growth of public sector companies at a mere 1.4%, as against 21.1% and 12.8%,
respectively during the year 2017-18. The GDP growth of your Company for the fiscal 2018-19 has grown a
robust 24.3% as against 1.3% in the year 2017-18.
8
FINANCIAL PERFORMANCE:
During the year, the Company recorded a Gross Written Premium income of ` 7,070 Crore as against ` 5,707
Crore achieved during previous financial year, thus registering a growth of 23.88% over the previous year. The
Profit Before Tax (PBT) for the year worked out to ` 235 Crore compared with ` 258 Crore earned in the previous
year. The Company has done a provisioning of ` 40 Crore towards investments held in IL&FS Group during the
current year. The Profit After Tax (PAT) for the year works out to ` 179 Crore against ` 189 Crore in the previous
financial year.
The highlights of the financial performance of the Company are summarised as under:
(` in Crore)
Particulars 2018-19 2017-18
Gross Written Premium 7,070 5,707
Less: Reinsurance Premium 2,882 2,054
Net Premium 4,188 3,653
Less: Adjustment for changes in Reserve for Unexpired Risk 158 417
Earned Premium (A) 4,030 3,236
Net Commission Expense/(Income) 214 113
Net Incurred Claims 3,558 2,683
Expenses of Management 557 714
Other Underwriting Expense/(Income) (0) (2)
Total Underwriting Expenses (B) 4,329 3,508
Underwriting Profit/(Loss) (A) – (B) (299) (272)
Investment Income allocated to Revenue Accounts 439 397
Operating Profit/(Loss) 140 125
Investment Income allocated to P & L A/C 138 138
Others Income/(Expense) (43) (5)
Profit/(Loss) before Tax 235 258
9
7069.8
7000
Gross Written Premium (GWP)
6500
6000
5707.2
5500
5635.7
5000
4500
4000 3762.4
3500 3398.7
3000
2991.9
` in crore
2500 2649.40
2000 2248.60
1988.85
1500 1639.56
1515.52
1000 1235.83
1152.21
896.04
500 501.28
0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
700
600
Profit Before Tax (PBT) Performance 619.6
500
322.5
400
` in crore
302.1 257.7
239.9 235.2
300
196.3
200
100 42.46 11.86
23.64 24.1
6.92 38.61
0
100 -49.36 -46.63
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
PSUs - 42.5%
Private Players - 57.5%
10
IFFCO-TOKIO Share Among Private Insurers
ITGI - 7.53%
Other Private Players - 92.47%
7000
7,069.8
6500
6000
Class-wise GWP Breakup 2018-19
2017-18
5500
5,707.2
5000
4500
4000
3500
` in Crore
3261.3
3000 3002.3
2500 2380.4
2000
1452.4
1500
803.7
1000 378.2 671.09
338.4 163.2
148.05
500 94.8 83.1
0
Fire Marine Motor Engineering Health Others Total
Settled
1000000
906,624
900000 861,337
857,929
838,194
800000 831,351
769,509
700000
649,163
636,053
600000
484,870
500000 479,358
400000 377,817
368,595
306,883 329,524
307,743
300000 285,452
288,002
280,617
200000
100000
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
11
SOLVENCY AND SHAREHOLDERS FUND: by the Board. The Reinsurance programme has helped
the bottom line of the Company by containing the
The Solvency ratio of the Company as at 31st March, impact of large losses and also those arising out of
2019 was 1.66 as against regulatory requirement of catastrophe events.
1.50.
IFFCO-TOKIO INSURANCE SERVICES LIMITED – A
The Shareholder's Fund as at 31 st March, 2019 was WHOLLY OWNED SUBSIDIARY:
` 2,253.56 Crore as compared to ` 1,874.94 Crore
as at 31 st March, 2018. In pursuance to the directions issued by IRDAI,
followed by the order of the Securities Appellate
DIVIDEND: Tribunal (SAT), your Company has terminated the
Corporate Agency Agreement and Service Agency
Board of Directors propose to retain profit to meet the
Agreement with its wholly owned subsidiary, M/s
capital requirements arising out of future growth plan
IFFCO TOKIO Insurance Services Ltd. (ITIS), with effect
of the Company and hence have not proposed any
from 31st July, 2018 and ITIS had also stopped its
dividend for the financial year 2018-19.
operations from that date. Consequently, ITIS had
INVESTMENTS AND INVESTMENT INCOME: surrendered its Corporate Agency registration with
IRDAI with effect from 31st July, 2018 and the
The total investments of the Company as at 31st surrender of Corporate Agency Registration has also
March, 2019 increased to ` 8,909.58 Crore as been accepted by the IRDAI. However, in order to
compared to ` 7,148.48 Crore as at 31st March, 2018. ensure the continued presence of the Company and
The distribution of investments of the Company has providing unhindered services to our policyholders at
been in compliance with limits prescribed in IRDAI the locations serviced by ITIS, your Company has
Investment Regulations and the Approved Investment opened 222 new offices during the FY 2018-19.
Policy of the Company. The investment portfolio of Further, Company has inducted the 1625 employees
the Company was regularly monitored in line with the of ITIS on its rolls so as to continue to cater to the
duration of liabilities through Assets Liability needs of Company's growth and its geographical
Management Policy so as to ensure availability of footprint.
funds at all times for settlement of obligations
towards policyholders. As required under section 129 (3) of the Companies
Act, 2013, a separate Statement in prescribed form
The investment income of the Company for the year AOC-1 containing the salient features of the Financial
under review was ` 577.36 Crore with an average Statements of IFFCO TOKIO Insurance Services Ltd., a
investment yield of 7.27% as against ` 534.90 Crore Wholly Owned Subsidiary of the Company, is enclosed
with yield of 7.76% in the previous year. as Annexure to the Financial Statements of the
Company.
INFUSION OF CAPITAL BY THE PROMOTER
SHAREHOLDERS: MARKETING:
During the year 2018-19, the promoters of the 2018-19 saw a record GWP of ` 7070 Crore and
Company, IFFCO and Tokio Marine, have infused business growth of 24%. During the year, the Company
additional capital of ` 200 Crore in the Company in initiated many changes in the organization such as:
the proportion of their existing shareholding in the
Company i.e. (51:49) by subscribing to the issue of • Introduction of a lean structure
48,96,800 Equity Shares. Consequent to the issue
• Enhanced Use of technology in claims,
of shares on right basis, the paid up share capital of
o p e ra t i o n s , p ay m e n t s , d i s t r i b u t i o n
the Company has increased from ` 269.32 Crore to
management
` 274.22 Crore, however, the shareholding pattern
of the Company remained unchanged. • Modified Channel Management resulting in
spread of distribution
REINSURANCE:
The entire team cutting across departments
The Company's reinsurance treaties for the year 2019-20
contributed hugely in implementing the changes and
are led by General Insurance Corporation of India and
the team synergy resulted in robust growth with
other Foreign Reinsurers. The conventional Reinsurance
reduced management expenses.
Treaties were fully placed by the end of March, with
rated reinsurers and in line with the guidelines laid down Crop Insurance is the largest contributor of Company's
by the IRDAI and reinsurance programme approved GWP in this fiscal. Motor OEM & Dealer channel,
12
Agency channel and Corporate channel are the large also introduced a Fast Track Promotion Policy for the
channels generating business. The OEM channel has Lower and Middle level employees of the Company, as a
added many new dealers and Agency channel has measure to recognize and reward the performers.
appointed about 10000 new agents, during 2018-19. Employee engagement activities such as employee get
together with family, encouraging employee
Your Company has started the strengthening of its participation in Marathons etc., HR Connect with the
nascent Bancassurance channel and has added a
Bottom Up approach has been introduced during the
number of new relationships in 2018-19. Business is
year 2018-19, with the objective of encouraging greater
expected to flow from these institutions in the next
interaction among the employees at all levels, across all
fiscal. Company's digital channel is growing at 250%
functions of the Organization. 'IFFCO TOKIO Suggestion
and is expected to continue the same pace of growth
Scheme' has been introduced to encourage suggestions
in the near future too.
for the benefit and development of the Company and
Your Company has reorganized and expanded its its employees. The Company rewards efficient
geographic reach structure during the year 2018-19 suggestions. Further, in order to inculcate an open
and today has 10 State Offices, 162 Strategic Business dialogue culture within the Company, Town Halls were
Units and 738 Bima Kendras. Company's enhanced conducted by Senior Management of the Company
geographic footprint will enable it to provide its introduced this year, which have been appreciated by
services across urban and rural customers. Company all the employees. The employees of the Company
will continue with its focus on serving rural customers rendered their full cooperation and support to the
through Bima Kendras with the help of technology and management.
distribution channels.
During the year under report, 98 physical training
CUSTOMER SERVICE: programs covering functional and behavioral areas
were conducted and a total 1345 employees at various
At the beginning of the FY 2018-19, around 0.91 Lakhs levels were exposed to various training programs.
Claims were outstanding whereas a total of around
Further, more than 3000 employees have been
8.38 Lakh claims were reported during the FY 2018-19
enrolled for online i-Leap training module in 2018 -19.
and more than 8.61 Lakh claims were settled with an
achievement of over 92.65% settlement ratio. This INFORMATION TECHNOLOGY:
brought down the pending claims. In order to
improve the overall working of the claims During the year 2018-19, the Company has taken great
department and to achieve a better customer initiatives for all round growth of the Company
satisfaction, Company has taken several new through enablement of Sales Force as also
initiatives during the FY 2018-19 including the launch strengthening the back Office Services team. IFFCO
of 1) E Survey Module (Claims survey through Mobile TOKIO ventured into adoption of Innovative
Application), 2) QCS Application (Quick Claim Technologies towards enhancing customer
Settlement through Mobile Application), 3) Live experience and services of the Company. The
Streaming (Live telecast of damaged vehicle from Customer Mobile App has been augmented by way of
Workshop to Claims office), 4) Hospital portal for Quick Claim Settlement for both Motor and Health,
instant cashless approval for health claims and 5) Pro- Policy Wallet, Claim Intimation & Claim Status
vakil module to track legal cases vis-a-vis their status tracking. IFFCO TOKIO has successfully tested the AI
and development. based damaged Vehicle Claim assessment, which is
going to be a pioneering effort by the Company. To
HUMAN RESOURCE DEVELOPMENT:
strengthen the Field staff, a state of the art Lead
Human resource is an invaluable asset of your Management System has been rolled out, which will
Organization. Suitable strategies in Marketing were help them to generate and track the Commercial
successfully implemented to achieve the vision of the Leads till their conversion to Quote. A Field Tracking
Company viz. to be the industry leader by building System for retail Field force and Bima Kendras was
customer satisfaction through fairness, transparency implemented to record their day to day meetings as
and quick response. During the year, Company has well as facilitating them to punch attendance on the
introduced its online training module i-LEAP, as an move. All Retail Health Products were provided over
instrument for increasing knowledge base of our the new Pega platform enabling Agents and
employees. Flexi Timings alongwith 'Suprabhat Intermediaries to issue retail Health policies over the
Mobile attendance system' has been introduced in the Internet. An Intermediary Portal has been released to
Company for the employees to provide operational facilitate the Agents, Brokers and channel partners to
flexibility and better work life balance. Company has view information related to their Policies, Claims,
13
Renewal and Commission in real time; thereby The Company is dedicated to enhance its presence in
enhancing visibility and transparency amongst the rural areas effectively with better Channel tie-ups like
Intermediaries. M/s PWC was engaged for carrying that of Bancassurance by adding new NBFCs and
out the Cyber Security audit of IFFCO TOKIO vis a vis commercial banks. The Company has been one of the
the prescribed security standards of IRDAI. The most preferred OEM Insurance partners, thus, with
Vulnerability Assessment and Penetration test of all the implementation of MISP guidelines and corrective
our Portals provided satisfactory results. An online measures taken during the past financial year
Disaster Recovery drill was also successfully improved the profitability of this vertical and would
conducted using new IBM tool in January, 2019. This pave the way for future as well.
speaks of the capability of the Company in protecting
the integrity of IT information and ensuring Business An altogether new channel, Affinity, has also been
continuity in the event of any disaster. Many new introduced where the Company is expected to initiate
products have been introduced in CRM for the Affinity new tie-ups under Corporate Affinity programs
channel, i.e. 'Extended warranty', 'Home Protector', bringing in more business during the financial year.
'All Risk' and 'Marine'. System was developed for
Since, the impact of digitization has been huge on the
settlement of bulk Claims related to Crop Insurance.
industry, IFFCO TOKIO is focused on implementing
The Partners Integration has taken a giant leap in
new technology such as Artificial Intelligence in QCS
engaging with new Tie-ups, in the e-commerce,
and video streaming in assessing losses. In the plan
Brokers and Banca channels. IFFCO TOKIO can now
period 2019-20, the Company will continue to
garner Business through these channels in a seamless
upgrade its IT systems and improve existing business
manner. Employee Payments have been made paper
processes by upgrading the existing technology. The
less and convenient through on-line Approvals and
Company during the year will put more focus on
Work flow, thus saving time and effort in settling
increasing digital presence, also through making its
payments by the Central Payment team.
website sales focused.
IT team of the Company is committed to facilitate its
IFFCO TOKIO would also be launching new products
End-Users, the Customers, Intermediaries, Partners as
according to the changing times and the effort would
well as Employees, by leveraging latest technologies in
be to develop simple and easy to buy products which
catering to the growing Business needs of the
would be app enabled for the customers.
Company.
EXTRACTS OF ANNUAL RETURN:
BUSINESS PLAN:
Pursuant to the Provisions of Section 92(3) of the
In line with the performance of the year under report
Companies Act, 2013 read with Rule 11 of the
and also current economic and industry scenario,
Companies (Management and Administration) Rules,
business plan 2019-20 of the Company, aims to
2014, the extract of Annual Return in the prescribed
achieve Gross Written Premium target of ` 8050 Crore.
Form MGT 9 is available on the Company's website at
The Company has consistently grown over the years to www.iffcotokio.co.in.
achieve gross written premium of ` 7070 Crore in FY
CORPORATE GOVERNANCE:
2018-19 and has planned to continue to grow in future
also with profitability and keeping in mind a target Your Company believes that good Corporate
growth of about 15% for the coming FY in line with the Governance strikes a balance between social and
industry's growth. It would endeavor to aggressively commercial goals. It instills essential vision and
enhance business from existing clients as well as structures to make decisions that ensure long term
targeting new ones by increasing its capacity so that sustainability. It has been the endeavour of your
there can be an increased participation in large risks. Company to adopt systems and procedures which
would strengthen good corporate governance,
The growth drivers of the general insurance industry
transparency, accountability and full disclosure of
have been Crop, Health and Motor. These major lines
information to its shareholders and other
will continue to dominate the general insurance
stakeholders.
business until and unless there would be regulatory
changes made. Company's major focus would be both The Guidelines on Corporate Governance issued by
commercial and retail lines of business. Bima Kendras IRDAI for the Insurance sector were implemented by
which are small units would be the growth engines for the Company in letter and spirit. IRDAI has outlined in
this financial year. general terms, Corporate Governance responsibilities
of the Board in the Management of the insurance
14
functions under various Regulations notified by it • The Risk Management Committee also
covering different operational areas. IRDAI has also continuously reviews the investments,
issued comprehensive Corporate Governance reinsurance securities, loss reserving and
Guidelines for adoption by the insurer. In light of the solvency ratio to ensure financial stability of
changes brought in by Companies Act, 2013 and the Company.
amendments thereto, your Company has also
streamlined its structure, responsibilities and • Business Continuity Plan is being reviewed
functions of Board of Directors and Management in from time to time and mock drills for
accordance with the revised guidelines. The Code of measuring the effectiveness of the same are
Business Conduct and Ethics for Board Members and being conducted on regular basis.
Senior Management, Whistle Blower Policy,
• Formulated a Fraud Monitoring Policy for
Constitution of Risk Management Committee, Policy
effective deterrence, prevention, detection
Holders Protection Committee, Investment
and mitigation of frauds.
Committee and Audit Committee, Appointment of
Independent Directors and conduct of meetings of ADEQUACY OF INTERNAL FINANCIAL CONTROLS:
Board of Directors and its Committees etc. are fully
implemented by the Company. During the year, the Internal Audit Team of your
Company had provided assurance on adequacy and
A Report on Corporate Governance pursuant to IRDAI effectiveness of controls encompassing your
Guidelines is placed at Annexure ‘A.' Company's governance, operations and information
systems. The Internal Audit Team executed internal
ENTERPRISE RISK MANAGEMENT AND RISK
audit plan and periodically reported Internal Audit
MANAGEMENT POLICY:
findings to the Audit Committee of the Board.
Your Company has a comprehensive Risk
BOARD OF DIRECTORS:
Management Policy & Framework in place to ensure
that all the material risk(s) that may affect the Meetings:
Company are identified, assessed, and monitored
periodically and the same are reported to the During the year 2018-19, four meetings of Board of
Management in structured manner. In addition to Directors of the Company were held on 8th May, 2018,
normal Enterprise Risks, your Company, being in 24th July, 2018, 2nd November, 2018 and 7th February,
general insurance industry, is exposed to various other 2019.
risks including the risk of loss due to inadequate
pricing, reserving or inadequate reinsurance Changes in the Composition of the Board:
protection. The revised Corporate Governance During the year 2018-19, Mr. H. O. Suri, has been
Guidelines has widened the scope and responsibilities appointed as Financial Advisor and Chief of Internal
of the Risk Management Committee and to effectively Audit of the Company with effect from 1st June, 2018
mitigate these risks, the Company has laid down the and accordingly he resigned from the office of
following controls and mitigation measures: Director (Marketing) with effect from 31st May, 2018.
• Risks are underwritten based on underwriting Mrs. Anamika Roy Rashtrawar has been appointed as
guidelines after thorough analysis to enable Director (Marketing) of the Company with effect from
that the proper price is charged from 1st June, 2018.
proposer. During the year, Mr. Ashwani Kumar completed his
• Reinsurance program is designed to ensure tenure as Independent Director of the Company with
optimal protection from financially sound effect from 6th April, 2018. Consequent to the
reinsurers. completion of tenure of Mr. Ashwani Kumar, Mr. Amar
Sinha was appointed as Independent Director of the
• Risk Management Committee comprising of Company with effect from 1st July, 2018.
Chief Risk Officer and other Senior Executives
of the Company meet regularly to identify and During the year 2018-19, Mr. Jim Qin, Tokio Marine
assess various Business and other Enterprise Nominee Non-Executive Director tendered his
risks as well as to suggest and monitor the resignation from the directorship of the Company
mitigation measures taken up by the with effect from 20th November, 2018 and Mr. Allen Po
management. Hsu Juang has been appointed as Tokio Marine
Nominee Non-Executive Director of the Company
with effect from 7th February, 2019.
15
Your Directors place on record their appreciation SECRETARIAL AUDITOR'S REPORT:
for the valuable services rendered by Mr. H. O. Suri,
Mr. Ashwani Kumar and Mr. Jim Qin during their In accordance with the provisions of Section 204 of the
tenure as Directors of the Company. Companies Act, 2013 read with Section134(3) of the
Companies Act, 2013, Board had appointed Mr. PSR
Declaration by the Directors: Murthy as Secretarial Auditor of the Company to
conduct the Secretarial Audit for the financial year
Your Company has received declarations from all the 2018-19. Secretarial Audit Report in the prescribed
Directors confirming that they are not disqualified form MR 3 is enclosed at Annexure 'B'.
from being appointed as directors under the
provisions of Section 164 of the Companies Act, 2013. CORPORATE SOCIAL RESPONSIBILITY (CSR):
Your Company has also received declarations from all CSR is the way of conducting business, by which
Independent Directors confirming that they meet the corporate visibly contribute to the social good of the
criteria of independence as provided under Section Society. Socially responsible companies do not limit
149(6) of the Companies Act, 2013. themselves to using resources to engage in the
activities that increase only their profits. Your
Retirement by Rotation: Directors believe that fulfillment of CSR obligation
may be used to integrate economic, environmental
In accordance with the provisions contained in Articles
and social objectives with the Company's operations
102, 103 and 104 of the Articles of Association of your
& growth.
Company and applicable relevant provisions of the
Companies Act, 2013, Mr. K. Srinivasa Gowda, Mr. B.S. The CSR Policy of the Company inter alia specifies the
Nakai, and Mr. Chisato Kojima, Directors shall retire by broad areas of CSR activities that will be taken up by
rotation at the ensuing Annual General Meeting and the Company and includes CSR Implementing
are eligible for reappointment. The Board Strategy, Governance & Monitoring Mechanism,
recommends the reappointment of the retiring Reporting Methodology, Impact Analysis etc. During
directors at the ensuing Annual General Meeting. the year, Board upon the recommendations of the CSR
Committee of Directors has approved the Annual CSR
STATUTORY AUDITORS & THEIR REPORT:
Plan of the Company for the Financial Year 2018-19
The shareholders of the Company appointed M/s incorporating various CSR Projects/Activities
Arun Singh & Co., Chartered Accountants (FRN undertaken by the Company during the year. The CSR
011863N) at its 18th Annual General Meeting (AGM) Policy and Annual CSR Plan of the Company are
held on 24th July, 2018 as one of the Joint Statutory available on the website of the Company.
Auditors of your Company for a term of five years to
On the recommendation of CSR Committee of Directors,
hold the office from the conclusion of 18th AGM until
Board of Directors allocated a sum of ` 7,52,71,149/-
the conclusion of 23rd AGM. During the year, your
(being 2% of average Profits for the last three financial
Company has received the communication from M/s
years) towards the implementation of CSR Plan during
Arun Singh & Co. regarding the change of name of
the year 2018-19. Out of the allocated funds, as detailed
their firm to M/s ASC & Associates, while the FRN of
in the CSR Annual Report, a sum ` 6,00,77,107/- was
the firm i.e. FRN 011863N remains the same.
spent towards various CSR Projects/Programs/Activities
M/s J C Bhalla & Co., Chartered Accountants during the year 2018-19. During the year, your Company
(FRN 001111N) were appointed as another Joint has successfully completed Phase-I of IFFCO TOKIO
Statutory Auditor of the Company for the further Integrated Rural Development Project, implemented in
period of 3 years to hold the office from the conclusion District Jajpur (Odisha) and District Pratapgarh
of 18th AGM until the conclusion of 21st AGM i.e. the (Rajasthan) and SUJALA Safe Drinking Water Project in
residual period of their tenure of 5 years. District Guntur of Andhra Pradesh. During the year,
Company has also undertaken the IFFCO TOKIO
The Report of the Joint Statutory Auditors to the Education Assistance and Skill Development Project and
Shareholders of the Company is annexed to the Environment Upgradation Project which are expected
financial statements for the year ended 31st March, to be completed in early 2019-20. As your Company is
2019. There is no specific qualification, reservation or committed to discharge its CSR obligations as stipulated
adverse remarks in the Report of the Joint Statutory under the Companies Act, 2013, the Company has
Auditors which require clarification. decided to carry forward the unspent amount out of the
current year CSR allocation to the ensuing FY 2019-20 to
be allocated for the FY 2019-20.
16
As required under the Companies Act, 2013 and CSR AUDIT COMMITTEE:
Rules, 2014, CSR Annual Report of the Company
containing the brief outline of the CSR Policy, the The Audit Committee of Directors comprises of Mr. Sudhakar
details of the specified amount allocated for CSR Rao, Mrs. Mira Mehrishi, and Mr. Amar Sinha, Independent
Projects & Activities during the Financial Year 2018 -19 Directors and Mr. Rakesh Kapur and Mr. Chisato Kojima,
and the unspent amount including the reasons Non-Executive Directors. Mr. Sudhakar Rao, Independent
thereof, is enclosed in prescribed format as per Director is the Chairman of the Committee. All the members
Annexure 'C'. of the Committee have adequate qualifications to fulfil their
duties stipulated under the Companies Act, 2013. The
POLICY ON DIRECTOR'S APPOINTMENT AND Members of the Audit Committee met four times during the
REMUNERATION: Financial Year 2018 -19.
The Company has in place a Board approved Policy on INFORMATION UNDER RULE 5 (2) OF THE
'Appointment and Selection of Directors and COMPANIES (APPOINTMENT AND REMUNERATION
members of Senior Management and criteria for OF MANAGERIAL PERSONNEL) RULES, 2014:
determining Directors' Independence (Appointment
& Selection Policy)' and 'Policy on Remuneration of Pursuant to the provisions of Section 197 read with Rule
Directors, Key Managerial Personnel and other 5(2) of the Companies (Appointment and
Employees (Remuneration Policy)'. The objective of Remuneration of Managerial Personnel) Rules, 2014,
the policy is inter-alia to provide a framework and set the statement of particulars of the top ten employees in
standards for the appointment of high quality terms of remuneration drawn is placed at Annexure 'D'.
directors who should have the capacity and ability to
lead the Company towards achieving its strategic CONSERVATION OF ENERGY, TECHNOLOGY
objectives, taking into account the interests of the ABSORPTION:
policyholders and employees. Brief extracts
containing the features of the above mentioned As your Company does not carry out any
Policies are available on the website of our Company.* manufacturing activity, the provisions with regard to
disclosure of particulars regarding Conservation of
ANNUAL EVALUATION OF BOARD, COMMITTEES AND Energy and Technology absorption are not applicable
DIRECTORS' PERFORMANCE: to the Company.
Pursuant to the provisions of the Companies Act, 2013 FOREIGN EXCHANGE EARNINGS AND OUTGO:
as amended by the Companies Amendment Act, 2017,
the evaluation of performance of the Board, its The particulars of Foreign Exchange earnings/outgo
Committees and individual directors of the Company during the year 2018-19 as required under the
is carried out at two levels i.e. by the Independent Companies Act, 2013 are given below.
Directors as required under Schedule IV to the
Companies Act, 2013 and by the Nomination & Earnings: ` 97.29 Crore (Previous year ` 109.01 Crore)
Remuneration Committee with participation of all the
Outgo : ` 121.03 Crore (Previous year ` 299.99 Crore)
Directors on the Board. Nomination & Remuneration
Committee has designed the evaluation feedback PUBLIC DEPOSITS:
sheets/forms and circulates the same among the
Board of Directors for their feedback. The The Company has not accepted any Public Deposits
Independent Directors of the Company also in their during the year under review.
separate meeting evaluate the performance of the
Board, as a whole, its Chairman and other Non - PARTICULARS OF LOANS, GUARANTEES OR
Independent Directors. Independent Directors also INVESTMENTS UNDER SECTION 186 OF THE
assess the quality, quantity and flow of information to COMPANIES ACT, 2013:
the Board. The evaluation of performance of the
Board, its Committees and Directors etc. is carried out In terms of provisions of Section 186(11) of the
on the basis of various parameters including Companies Act, 2013, as amended by the
qualification, experience, quality, personal attributes, Companies (Removal of Difficulties) Order, 2015
participation, contribution to the Board, dated 13th February, 2015, the provisions of Section
preparedness, strengths etc. 186 except sub section (1) are not applicable to the
Company. During the year, Company has advanced a
sum of ` 4.93 Crore to its Wholly Owned Subsidiary
*Policy on director's appointment and remuneration can be accessed at: www.iffcotokio.co.in and
https://www.iffcotokio.co.in/sites/default/files/Remuneration-Policy-for-Directors-KMP-and-other-employees.pdf
17
M/s IFFCO TOKIO Insurance Co. Limited, with the prior • SKOCH Order of Merit for BIMA App (Digital
approval from IRDAI under section 29 of the Insurance Economy)
Act, 1938.
• SKOCH Order of Merit for BIMA Kendra
PARTICULARS OF CONTRACTS OR ARRANGEMENTS (Financial Inclusion - Rural Expansion)
UNDER SECTION 188(1) OF THE COMPANIES ACT,
2013: • Future of HR Summit & Awards 2018 for best
HR award
During the year under review, the Company did not
enter into any transaction or arrangements with its • Future of L&D Summit and Awards for Best HR
related parties which were material or not at arm's leader and i-Leap
length. The Company undertook various transactions • Global Leaders Awards for various categories
with related parties at arm's length in the ordinary in Insurance Sector, namely “MD of the Year”,
course of business as per Policy on Related Party 'Enterprise Women of the Year', 'Chief Human
Transactions. The Audit Committee of Directors has Resources Officer (CHRO) of the Year' 'CFO of
given its approval to different types of related party the Year', 'Chief Information Officer (CIO) of
transactions which are in ordinary course of business. the Year, and 'Most Admired Company of the
Year in Finance-Insurance Sector’.
The details of related party transactions entered into
by the Company are included in the Notes to Financial • Tokio Marine Insurance Group Award: 2018
Accounts for FY 2018-19. Asian Awards for Best Company Initiative
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE DIRECTORS' RESPONSIBILITY STATEMENT:
REGULATORS/ COURTS/ TRIBUNALS:
The Board of Directors of the Company confirms that:
There were no significant or material orders passed by
the regulators, courts or tribunals which would impact i. in the preparation of the annual accounts, the
the going concern status of the Company or its future applicable accounting standards has been
operations. followed along with proper explanation
relating to material departures;
MATERIAL CHANGES AND COMMITMENTS
AFFECTING THE FINANCIAL POSITION: ii. the Directors had selected such accounting
policies and applied them consistently and
There were no material changes and commitments, made judgments and estimates that are
affecting the financial position of the Company reasonable and prudent so as to give a true
between 31st March, 2019 and the date of this report. and fair view of the state of affairs of the
Company at the end of the financial year and
AWARDS AND RECOGNITIONS
of the profit and loss of the Company for that
During the year under review, your Company has been period;
recognized in various forums and has been awarded in iii. the Directors had taken proper and sufficient
various categories as per the details below: care for the maintenance of adequate
• P & C Insurer of the Year Award awarded by accounting records in accordance with the
Insurance Asia News Awards for Excellence provisions of this Act for safeguarding the
2018 assets of the Company and for preventing and
detecting fraud and other irregularities;
• Best Health Care Insurance Provider awarded
by NavBharat Group iv. the Directors had prepared the annual
accounts on a going concern basis; and
• SKOCH Award for Rural Expansion through
Bima Kendra v. the Directors had devised proper systems to
ensure compliance with the provisions of all
• SKOCH Order of Merit for Cyber Security applicable laws and that such systems were
Protocol adequate and operating effectively.
19
ANNEXURE ‘A’
REPORT ON CORPORATE GOVERNANCE
IFFCO TOKIO's Corporate Governance Philosophy harmonizes the best governance principles and procedures.
We follow the Corporate Governance guidelines as specified by IRDAI, which are as under:
1.0 Corporate Governance Practices
The Company believes that Corporate Governance is a commitment to conduct business in a fair,
transparent and in compliance of applicable laws, rules, regulations, circulars etc. IFFCO TOKIO believes
that sound Corporate Governance practices are essential for healthy growth of business and to repose
confidence in all interested parties. The Company has placed adequate Corporate Governance
practices for improving long term values. The Corporate Governance philosophy of IFFCO TOKIO has
been further strengthened with the formulation of Code of Conduct for Management, Whistle Blower
Policy, Online Grievance Redressal system and implementation of Public Disclosure Guidelines. The
Company has also set up mandatory committees as prescribed in the Corporate Governance
Guidelines. The Company, through its Board and Committees, endeavors to strike and deliver the
highest governing standards for the benefit of its stakeholders.
2.0 Composition of the Board of Directors
The Company has appointed Independent Directors on the Board and Board of the Company consists of
both Executive and Non-Executive Directors. The Company has three functional Directors including the
Managing Director. All the Members of the Board have executed Deed of Covenants as prescribed in the
Guidelines.
3.0 Committees of the Board
The Company has set up mandatory Committees of the Board. The Committees of the Board meet at
frequent intervals as per the Guidelines prescribed for holding such meetings. The Company Secretary
ensures that the meetings of the Shareholders, Board of Directors and Committees of the Board are
held as per the time frame and the minutes of such meetings are properly recorded.
4.0 Board of Directors Meetings
th th nd
During the year 2018-19, the Board met four (4) times on 8 May, 2018, 24 July, 2018, 2 November,
2018 and 7th February, 2019. Time gap between any two meetings did not exceed 120 days.
The names, qualification, specialization and status of the Directors and their attendance at the Board
Meetings held during the financial year 2018-19 are as under:
20
7. Mrs. Mira Mehrishi Master's degree Management Independent 4 3
in Business & Director
Administration Administration
8. Mr. Sudhakar Rao M.A. (Economics) Management, Independent 4 4
Administration & Director
Public Affairs
9. Mr. Amar Sinha (*) Economics Graduate Economic Independent 3 3
Relations, Trade Director
& Investment
Promotion
10. Mr. Chisato Kojima MBA from MIT Sloan Business Non-Executive 4 3
Management School Management & Director
and BA of Economics Insurance
11. Mr. Shinjiro Hamada Bachelor of Arts Corporate Non-Executive 4 4
Planning Director
12. Mr. Jim Qin (**) Bachelor of Commerce Finance & Non-Executive 3 3
in Actuarial Studies/ Accounting, Director
Information System Investment,
Corporate
Management etc.
13. Mr. Allen Po Fellow of Institute of Actuary Non-Executive 1 1
Hsu Juang (**) Actuaries, Australia Director
14. Mr. Warendra Sinha Master's in Sociology, Insurance Managing 4 4
AIII from III, Bachelor's Director &
in History CEO
15. Mr. H.O. Suri (***) FCA, B.com (Hon.) Marketing, Director 1 1
Finance &, Audit (Marketing)
16. Mrs. Anamika Roy Fellow of Insurance Insurance Director 3 3
Rashtrawar (***) Institute of India (III) (Marketing)
&M.A (English)
17. Mr. Jun Matsui Majored in Finance Commercial Director 4 4
and Economics Lines Marketing (Operations)
th
Note: (*) Mr. Ashwani Kumar completed his tenure as Independent Director on 6 April, 2018 and
st
Mr. Amar Sinha was appointed as an Independent Director w.e.f 1 July, 2018.
th
(**) Mr. Jim Qin resigned w.e.f. 20 November, 2018 and Mr. Allen Po Hsu Juang has been appointed
th
as Tokio Marine Non-Executive Director in place of Mr. Jim Qin with effect from 7 February, 2019
st
(***) Mr. H.O. Suri, resigned from the office of Director (Marketing) with effect from 31 May, 2018 and
Mrs. Anamika Roy Rashtrawar has been appointed as Director (Marketing ) in his place.
21
3. Dr. P.S. Gahlaut Non-Executive Director, Member 4 3
4. Mr. Warendra Sinha MD & CEO, Member 4 4
5. Mr. Harbhajan Singh (*) Financial Advisor, Member 4 1
6. Mr. H. O. Suri (*) Financial Advisor, Member 4 4
7. Mr. Abhishek Sharma (*) Chief Investment Officer 4 3
8. Mr. Sanjeev Chopra CFO, Member 4 4
9. Mr. Vaibhav Tyagi Appointed Actuary, Member 4 4
10. Mr. Jun Matsui Director (Operations) 4 4
11. Mr. Komei Watanabe Chief Risk Officer, Member 4 4
th
(*) Mr. Harbhajan Singh retired from the office of Financial Advisor w.e.f. 30 April, 2018 and Mr. H.O. Suri was
appointed as Financial Advisor w.e.f 1st June, 2018. Mr. Abhishek Sharma was designated as Chief
Investment Officer w.e.f. 1st June, 2018.
(*) Mr. Amar Sinha was appointed as an Independent Director on the Board of the Company w.e.f 1st July, 2018
and has been nominated as member of the Audit Committee.
(*) Consequent to the resignation of Mr. H. O. Suri from the office of Director (Marketing) and re-designation
st
as FA, Head Internal Audit w.e.f 1 June, 2018, Mr. H.O. Suri attended the meetings as FA & Head Internal
Audit.
(**) Mrs. Anamika Roy Rashtrawar was appointed as Director (Marketing) of the Company and was nominated
as a member of Risk Management Committee w.e.f 1st June, 2018.
(**) Due to the change in role and responsibilities, Mr. Abhijit Chatterjee ceased to be member of the
Committee w.e.f 31st December, 2018.
23
10. Mr. Hiren Vakharia (***) VP (Digital) & CGO, Member 1 1
st
(*) Consequent to Mr. H.O. Suri's resignation from the directorship w.e.f 31 May, 2018, Mrs. Anamika Roy
Rashtrawar was appointed as Director (Marketing) and was nominated as a Member of the
Policyholders' Protection Committee.
(**) Mr. V. Rajaraman was nominated as a member of Policyholders' Protection Committee, consequent to
the retirement of Mr. K. K. Aggarwal from the services of the Company w.e.f 31st July, 2018.
(***) With effect from 1st June, 2018, Mr. Arun Pandey was appointed as Chief Grievance Officer (CGO) of the
Company in place of Mr. Hiren Vakharia.
(E) CSR Committee
During the year 2018-19, the CSR Committee of the Board met three (3) times on 27 t h April,
2018, 31 st October, 2018 and 28 t h March, 2019. The details of Composition of CSR Committee
and attendance of the members at the Meetings of the CSR Committee held during the year are
as under:
(*) Mr. Amar Sinha was appointed as Independent Director on the Board of the Company with effect from
1st July, 2018 and was nominated as a Chairman of Nomination & Remuneration Committee.
24
(G) Executive Committee
In accordance with the provisions contained in the Articles of Association of the Company, the
Company had constituted, an Executive Committee which is in operation since the inception of the
Company. The Committee is primarily responsible for preparation/ monitoring of Business Plan, Annual
Budgets, Key initiatives, review of operations, review of human resource related matters and
performance of personnel below the Board level and other than KMPs etc. Ten Meetings of the
Executive Committee were held during the Financial Year 2018-19.
6.0 Separate Meeting of Independent Directors
During the Financial Year 2018 -19, a separate meeting of Independent Directors was held on 27th April,
2018, which was attended by Mrs. Mira Mehrishi and Mr. Sudhakar Rao, Independent Directors. During
the meeting, Independent Directors evaluated the performance of Executive Directors, Non-Executive
Directors and Chairman. Independent Directors also evaluated the performance of the Committees and
the Board as a whole and also assessed the quality, quantity and timeliness of the flow of information to
the Board.
7.0. Code of Business Conduct and Ethics
The Company promotes ethical behavior in all its business activities. The Company has a Board
approved “Code of Business conduct and Ethics for Board Members and Senior Management personnel
of the Company”. The code of Business conduct and ethics provides prevention of insider trading,
access to confidential information, protection of Company's properties, conflict of interests,
information to be placed before Board etc. The Code also provides the role of Compliance officer and
other senior management.
8.0. Whistle Blower Policy
The Whistle Blower Policy formulated by the Company provides an opportunity to employees to have
access, in good faith, to the Chairman of the Company in case they observe any unethical and improper
practices or wrongful conduct in the Company. The Board of Directors formulated the whistle blower
policy wherein the employees are free to report violations of laws, rules, regulations or unethical
conduct. The Policy provides maintenance of confidentiality of data, procedure for reporting improper
and unethical practices etc.
9.0 Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual
Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal
Complaints Committee (ICC) has been set up to redress complaints received regarding sexual
harassment. All employees (permanent, contractual, temporary and trainees) are covered under this
policy. During the year under review, the Company has not received any complaint.
10.0 Compliance certificate of the Company Secretary
Certificate from the Company Secretary confirming compliances as stipulated under the Guidelines is
attached to the Directors Report forming part of the Annual Report as per Annexure I.
Annexure I of ‘A’
Certification for compliance of the Corporate Governance Guidelines
I, Amit Jain, Company Secretary & Chief Compliance Officer hereby certify that the Company has
complied with the Corporate Governance Guidelines for Insurance Companies as amended from time
to time and nothing has been concealed or suppressed during the period under report.
(Amit Jain)
Place: New Delhi Vice President, Co. Secretary
Date: 29th April, 2019 & Chief Compliance Officer
25
ANNEXURE ‘B’
26
2. In respect of an Inspection carried out in the year October 2012 by the Insurance Regulatory and
Development Authority and finding certain non-compliances, the Company was issued show cause
st th
notice on 1 August, 2017 and after holding personal hearing on 6 October, 2017, the IRDAI
imposed penalty of ` 5 lakhs. The Company paid the penalty and assured the IRDAI for complying as
per the directions contained in the Final Orders.
I further report that
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-
Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that
took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda
were generally sent at least seven days in advance, and a system exists for seeking and obtaining further
information and clarifications on the agenda items before the meeting and for meaningful participation at the
meeting. All decisions of Board Meetings and Committee Meetings were unanimous, and no member
expressed dissenting views.
I further report that based on the review of compliance mechanism established by the Company and on the
basis of the compliance certificate taken on record by the Board of Directors at their meeting(s), I am of the
opinion that there are systems and processes in the Company commensurate with the size and operations of
the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
However, the Company assured to improve the contents of the compliance certificates submitted to the Board
so as to make the reports more specific to the Acts/ Laws that are applicable.
th
I further report that during the audit period, the Board of Directors of the Company at its meeting held on 20
March, 2018 approved the Right issue of shares to its existing shareholders and accordingly, the Executive
th th
Committee of the Board in its 169 Meeting held on 8 June, 2018 approved the allotment of 48,96,800 equity
shares on Rights basis to both the existing equity shareholders and post allotment of shares, the shareholding
pattern of the Company remains unchanged.
We further report that during the audit period, there were no specific events/actions having a major bearing on
Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines standards etc.
This Report is to be read with our letter of even date which is annexed as Annexure A and forms
integral part of this Report.
27
ANNEXURE ‘A’
The Members,
IFFCO-Tokio General Insurance Company Limited,
New Delhi -110 017
2. I have followed the audit practices and processes as were appropriate to obtain reasonable
assurance about the correctness of the contents of the secretarial records. The verification was
done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the
processes and practices, I followed provide a reasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of financial records and Books of Accounts
of the Company.
4. Wherever required, I have obtained the management representation about the compliance of laws,
rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations,
standards is the responsibility of the Management. My examination was limited to the verification
of procedures on test basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of
the efficacy or effectiveness with which the Management has conducted the affairs of the Company.
28
ANNEXURE ‘C’
1. BRIEF OUTLINE OF COMPANY'S CSR POLICY AND OVERVIEW OF THE PROJECTS OR PROGRAMS
PROPOSED TO BE UNDERTAKEN BY THE COMPANY:
IFFCO TOKIO has in place its Corporate Social Responsibility (CSR) Policy in line with the requirements of
Companies Act, 2013. The Company's CSR Policy outlines the Company's Responsibility as a Corporate Citizen
and lays down the guidelines and mechanism for undertaking activities for the welfare and sustainable
development of the Community at large. The CSR Policy of the Company outlines the scope of CSR Activities,
Modalities of the execution of the Projects/ Programs and their monitoring & assessment.
The process for implementation of CSR Programs involves identification of programs based on the proposals
received through various channels, assessment of the projects in the terms of funding required, due diligence
of implementation agency and recommendation to the CSR Committee. The CSR Committee, if found
appropriate, approves the proposal and amount of expenditure to be incurred on the same within the overall
limit approved by the Board. CSR Policy encompasses the Company's philosophy for delineating its
responsibility as a Corporate Social Citizen and lays down the guidelines and mechanism for undertaking
socially useful programs for welfare & sustainability development of the Community at large.
Under the CSR Policy of the Company, following programs were proposed to be undertaken by the Company
during the financial year 2018-19:
a. IFFCO TOKIO Integrated Rural Development Projects-
• Phase I (Pratapgarh District in Rajasthan & Jajpur District in Odisha)
• Phase II (Baran District in Rajasthan)
• Phase III (Ajmer District in Rajasthan & Barpeta District in Assam)
b. IFFCO TOKIO Health Care & Safe Drinking Water SUJALA Project in Distt. Guntur
c. IFFCO TOKIO Preventive Health Care Service Projects
• Cancer Awareness camps through M/s ROKO Cancer Charitable Trust
• Homeopathic Dispensary at Gurugram through Sri Shiv Kalyan Sewa Samiti
d. IFFCO TOKIO Education Assistance & Skill Development Projects-
• Let's Read –Financial support for promoting education to children in slum areas of Mumbai
through M/s United Way of Mumbai
• Transforming schools into Uttam Schools in Uttarakhand & U.P. through M/s Indian Social
Responsibility Network (ISRN)
• Infrastructural support to a school in Mathura for providing quality education through M/s Indian
Social Responsibility Network (ISRN)
e. IFFCO TOKIO Environment Upgradation Project - Installation of one compost machine in Delhi through
Sri Sri Rural Development Trust (SSRDP)
f. IFFCO TOKIO Rural Sports Development Project - Promotion of sports among Rural Youth by providing
Infrastructural Support and Training at Yadvindra Maharaj Stadium, Bhatinda, Punjab through IIFDC
CSR Policy of the Company as well as the CSR Plan of the Company for the FY 2018-19 can be viewed
at www.iffcotokio.co.in/sites/default/files/IFFCO-TOKIO-CSR-POLICY.pdf and
www.iffcotokio.co.in/sites/default/files/CSR-PLAN-FOR-THE-FINANCIAL-YEAR-2018-19.pdf respectively.
29
2. Composition of CSR Committee :
The CSR Committee of the Company comprises of the following Directors:
3. AVERAGE NET PROFIT OF THE COMPANY FOR THE LAST THREE FINANCIAL YEARS
Average Net Profit of the Company for the last three financial years worked out to ` 3,76,35,57,434/-
detailed as under:
The total amount allocated for the CSR for the FY 2018-19 worked out to ` 7,52,71,149/- (being 2% of
average Profits for the last three financial years).
30
The manner in which the amount allocated and spent during the financial year is detailed below:
S. No. CSR project Sector in Projects or Amount Amount spent Cumulative Amount
or activity which the programs outlay on the projects expenditure spent:
identified Project is (1) Local area or (budget) or programs upto the Direct or
covered other project or subheads: reporting through
(2) Specify the programs (1) Direct period implementing
state and wise expenditure (Amount in `) agency
district where (Amount in `) on projects or
projects or programs
program was (2) Overheads
undertaken (Amount in `)
[Dist. (State)]
31
Infrastructural Mathura M/s Indian
support to an (U. P.) Social
identified Responsibility
school in Network (ISRN),
Mathura to the 56,91,000/- 30,00,000/- 30,00,000/- New Delhi
students of
North East &
other states
Note(s):
(1) Phase I of IFFCO TOKIO Integrated Rural Development Project, implemented in District Jajpur (Odisha) and
District Pratapgarh (Rajasthan), has been successfully implemented and completed.
6. REASONS FOR NOT SPENDING THE PRESCRIBED CSR AMOUNT DURING THE FINANCIAL YEAR 2018 - 19
During the year, your Company has undertaken another long term project namely “IFFCO TOKIO
Integrated Rural Development Project” under Phase III. This project is implemented in four villages at
Ajmer District, Rajasthan and five villages in Barpeta District, Assam, which is spread over a period of
two years. Being the first year of CSR Project implementation of IIRDP Project Phase –III, only an amount
of ` 80,00,000/- could be released as against the total budget allocation of ` 1,52,51,157/-. It is
expected that the project activities will speed up soon and balance amount of ` 72,51,157/- will be
released in first quarter of FY 2019-20.
During the year, your Company has undertaken the IFFCO TOKIO Education Assistance and Skill
Development Project implemented by ISRN which are expected to complete by June and September 2019
and the balance amount of ` 72,35,000/- would be released by then.
During the year, your Company has also undertaken Environment Upgradation Project activities
implemented by Sri Sri Rural Development Programme Trust,(SSRDP), Bengaluru which has already been
completed and the balance payment of ` 5,50,000/- is expected to be released by end of April, 2019, on
receipt of the final utilization report.
As the Company is committed to discharge its CSR obligations as stipulated under the Companies Act,
2013, the Company has decided to carry forward the unspent amount of ` 1,51,94,042/- out of the
current year CSR allocation to the ensuing FY 2019-20 to be spent with CSR Amount to be allocated for the
FY 2019-20.
7. RESPONSIBILITY STATEMENT OF THE CSR COMMITTEE
The CSR Committee hereby declares that the implementation and monitoring of CSR Policy of the
Company is in compliance with CSR objectives and is in consonance with section 135 of the Companies
Act, 2013. We also undertake to follow the objectives of the Company's CSR Policy in letter and spirit.
32
Annexure ‘D’
IFFCO-TOKIO GENERAL INSURANCE COMPANY LIMITED
Statement under Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel)
st
Rules, 2014 for the year ended 31 March 2019
S. No. Emp. Name of Age Designation/ Remuneration Qualification % of equity Date of Particulars of
Code Employee (Years) Nature of Received & Experience shares held Commencement Previous
Employment (` in lakhs) of Employment Employment
1. 12994 Warendra 60 MD & CEO 145.82 Master's in NIL 28-03-2017 National Ins.
Sinha sociology, Co. Ltd.
Bachelor's in
History and AIII
from Insurance
Institute of India
& Exp. 36 years
2. 13287 Anamika Roy 55 Director - 106.44 M.A. English NIL 01-06-2018 Bajaj Allianz
Rashtrawar Mktg. (Hons.) and FIII
from Insurance
Institute of India
& Exp. 32 years
3. 12980 Vaibhav 41 VP & 96.81 B. Sc. (H), M. Sc., NIL 14-02-2017 RSA Actuarial
Tyagi Appointed M. Tech. (Com. Services Pvt.
Actuary Sc.) & Exp. 11.8 Ltd.
years
4. 10210 Srikanth 56 EVP & Head - 65.44 M.Com, B.Com, NIL 05-06-2002 National Ins.
Charan M CMG Retail - MBA (Health Co. Ltd.
Non OEM Care Mgmt. &
Risk & Ins.
Mgmt.) &
Exp.33 years
5. 10206 H.O Suri 64 Financial 61.47 B.Com (H),C.A.& NIL 01-04-2001 IFFCO
Advisor & Exp. 38 years
Head of
Internal Audit
6. 10116 Sanjeev 59 ED & Head - 54.11 B. Com.(H), CA NIL 17-07-2001 Oriental Ins.
Chopra Finance & & Exp.33 years Co.
Accounts (CFO)
& IT
7. 10033 Abhay 54 EVP & Head - 53.24 B.A (H), PGDBM NIL 07-12-2000 Oriental Ins.
Kumar Marketing & Exp.30 years Co.
(OEM)
8. 10040 R. Kannan 56 ED & Head - 53.10 B.Com, NIL 29-01-2001 National Ins.
Claims A.I.C.W.A, Co. Ltd.
Certified
associate of IIB,
CIMA & Exp.29
years
9. 10037 Ramesh 59 ED (HR, Admin 52.17 Post Graduate in NIL 28-02- 2008 GALPHA Labs
Kumar & CSR) Personnel Limited
Management &
IR Exp. Years 37
Years
10. 10123 Sumesh 57 EVP (Renewal 51.17 MBA & NIL 05-02-2001 United India
Mahendra & Crop Cell) Associate from Insurance Ltd.
III & Exp. 33
years
Note: 1. The gross remuneration comprises of salary, allowances, monetary value of perquisites and Company's
contribution to Provident Fund.
2. None of the employee mentioned in the above list is relative to any of the Directors of the Company.
33
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34
AUDITORS’
REPORT
35
INDEPENDENT AUDITOR’S REPORT Information Other than the Standalone Financial
Statements and Auditor's Report Thereon
TO THE MEMBERS OF IFFCO TOKIO GENERAL
INSURANCE COMPANY LIMITED The Company's Board of Directors is responsible for
the preparation of the other information. The other
Opinion
information comprises the information included in
the Board's Report including Annexures to Board's
We have audited the accompanying standalone
financial statements of IFFCO TOKIO GENERAL Report, but does not include the standalone
INSURANCE COMPANY LIMITED (“the Company”), financial statements and our auditor's report
which comprise the Balance Sheet as at March 31, thereon.
2019, the Revenue Accounts of Fire, Marine and
Miscellaneous Insurance (collectively known as the Our opinion on the standalone financial statements
'Revenue Accounts'), the Profit and Loss Account does not cover the other information and we do not
and the Receipts and Payments Account for the year express any form of assurance conclusion thereon.
then ended, and a summary of the significant
accounting policies and other explanatory
In connection with our audit of the standalone
information (hereinafter referred to as “the
financial statements, our responsibility is to read
standalone financial statements”).
the other information and, in doing so, consider
In our opinion and to the best of our information whether the other information is materially
and according to the explanations given to us, the inconsistent with the standalone financial
aforesaid standalone financial statements give the statements or our knowledge obtained during the
information required by The Insurance Act, 1938, course of our audit or otherwise appears to be
the Insurance Regulatory and Development Act, materially misstated.
1999 and Companies Act, 2013 (“the Act”) in the
manner so required and give a true and fair view in If, based on the work we have performed, we
conformity with the accounting principles generally conclude that there is a material misstatement of
accepted in India, of the state of affairs of the
this other information, we are required to report
Company as at March 31, 2019, its surplus in
that fact. We have nothing to report in this regard.
revenue accounts, its profit and its receipts and
payments accounts for the year ended on that date.
Management's Responsibility for the Standalone
Basis for Opinion Financial Statements
We conducted our audit of the standalone financial The Company's Board of Directors is responsible
statements in accordance with the Standards on for the matters stated in section 134(5) of the Act
Auditing specified under section 143(10) of the Act with respect to the preparation of these standalone
(SAs). Our responsibilities under those Standards are financial statements that give a true and fair view of
further described in the Auditor's Responsibilities for
the financial position, financial performance, and
the Audit of the Standalone Financial Statements
receipts and payments of the Company in
section of our report. We are independent of the
Company in accordance with the Code of Ethics accordance with the accounting principles
issued by the Institute of Chartered Accountants of generally accepted in India, Insurance Act, 1938,
India (ICAI) together with the independence Insurance Regulatory and Development Authority
requirements that are relevant to our audit of the (Preparation of Financial Statements and Auditor's
standalone financial statements under the provisions Report of Insurance Companies) Regulations, 2002
of the Act and the Rules made thereunder, and we (the Regulations') including Accounting Standards
have fulfilled our other ethical responsibilities in specified under Section 133 of the Act, read with
accordance with these requirements and the ICAI's Rule 7 of the Companies (Accounts) Rules, 2016.
Code of Ethics. We believe that the audit evidence This responsibility also includes maintenance of
we have obtained is sufficient and appropriate to adequate accounting records in accordance with
provide a basis for our audit opinion on the the provisions of the Act for safeguarding the assets
standalone financial statements.
36
of the Company and for preventing and detecting • Identify and assess the risks of material
frauds and other irregularities; selection and misstatement of the standalone financial
application of appropriate accounting policies; statements, whether due to fraud or error,
making judgments and estimates that are design and perform audit procedures
reasonable and prudent; and design, responsive to those risks, and obtain audit
implementation and maintenance of adequate evidence that is sufficient and appropriate to
internal financial controls, that were operating provide a basis for our opinion. The risk of not
effectively for ensuring the accuracy and detecting a material misstatement resulting
completeness of the accounting records, relevant from fraud is higher than for one resulting
to the preparation and presentation of the from error, as fraud may involve collusion,
standalone financial statements that give a true forgery, intentional omissions, misrepresen-
and fair view and are free from material tations, or the override of internal control.
misstatement, whether due to fraud or error.
• Obtain an understanding of internal financial
In preparing the standalone financial statements, controls relevant to the audit in order to
management is responsible for assessing the design audit procedures that are appropriate
Company's ability to continue as a going concern, in the circumstances. Under section 143(3)(i)
disclosing, as applicable, matters related to going of the Act, we are also responsible for
concern and using the going concern basis of expressing our opinion on whether the
accounting unless management either intends to Company has adequate internal financial
liquidate the Company or to cease operations, or controls system in place and the operating
has no realistic alternative but to do so. effectiveness of such controls.
The Board of Directors are responsible for • Evaluate the appropriateness of accounting
overseeing the Company's financial reporting policies used and the reasonableness of
process. accounting estimates and related disclosures
made by Management.
Auditor's Responsibilities for the Audit of the
Standalone Financial Statements • Conclude on the appropriateness of
Management's use of the going concern basis
Our objectives are to obtain reasonable assurance of accounting and, based on the audit
about whether the standalone financial statements evidence obtained, whether a material
as a whole are free from material misstatement, uncertainty exists related to events or
whether due to fraud or error, and to issue an conditions that may cast significant doubt on
auditor's report that includes our opinion. the Company's ability to continue as a going
Reasonable assurance is a high level of assurance, concern. If we conclude that a material
but is not a guarantee that an audit conducted in uncertainty exists, we are required to draw
accordance with SAs will always detect a material attention in our auditor's report to the related
misstatement when it exists. Misstatements can disclosures in the standalone financial
arise from fraud or error and are considered statements or, if such disclosures are
material if, individually or in the aggregate, they inadequate, to modify our opinion. Our
could reasonably be expected to influence the conclusions are based on the audit evidence
economic decisions of users taken on the basis of obtained up to the date of our auditor's
these standalone financial statements. report. However, future events or conditions
may cause the Company to cease to continue
As part of an audit in accordance with SAs, we as a going concern.
exercise professional judgment and maintain
professional skepticism throughout the audit. We
also:
37
• Evaluate the overall presentation, structure c) The Balance Sheet, the Revenue Accounts,
and content of the standalone financial Profit and Loss Account, and the Receipts and
statements, including the disclosures, and Payments Account dealt with by this Report
whether the standalone financial statements are in agreement with the books of account.
represent the underlying transactions and
events in a manner that achieves fair d) In our opinion, the aforesaid standalone
presentation. financial statements comply with the
Accounting Standards specified under Section
We communicate with those charged with 133 of the Act, read with Rule 7 of the
governance regarding, among other matters, the Companies (Accounts) Rules, 2016 to the
planned scope and timing of the audit and extent they are not inconsistent with the
significant audit findings, including any significant accounting policies prescribed by IRDAI.
deficiencies in internal control that we identify
during our audit. e) On the basis of the written representations
st
received from the directors as on 31 March,
We also provide those charged with governance 2019 taken on record by the Board of
with a statement that we have complied with Directors, none of the directors is disqualified
st
relevant ethical requirements regarding as on 31 March, 2019 from being appointed
independence, and to communicate with them all as a director in terms of Section 164 (2) of the
relationships and other matters that may Act.
reasonably be thought to bear on our
independence, and where applicable, related f) With respect to the adequacy of the internal
safeguards. financial controls over financial reporting of
the Company and the operating effectiveness
Report on Other Legal and Regulatory of such controls, refer to our separate report
Requirements in Annexure-A.
(1) This report does not include a statement on g) With respect to the other matters to be
the matters specified in paragraphs 3 and 4 of included in the Auditor's Report in accordance
the Companies (Auditor's Report) Order, 2016 with Rule 11 of the Companies (Audit and
(the Order) issued by the Central Government Auditors) Rules, 2014, in our opinion and to
of India in terms of sub-section (11) of section the best of our information and according to
143 of the Act, since in our opinion and the explanations given to us:
a c c o r d i n g t o t h e i n fo r m a t i o n a n d
explanations given to us, the said Order is not i. The Company has disclosed the impact of
applicable to the Company. pending litigations on the notes to the
st
Balance Sheet as at 31 March, 2019.
(2) As required by Section 143 (3) of the Act, we
report that: ii. The Company did not have any long-term
contracts including derivative contracts
a) We have sought and obtained all the for which there were any material
information and explanations which to the foreseeable losses.
best of our knowledge and belief were
necessary for the purposes of our audit. iii. There were no amounts which were
required to be transferred to the Investor
b) In our opinion, proper books of account as Education and Protection Fund by the
required by law have been kept by the Company.
Company so far as it appears from our
examination of those books.
38
(3) In our opinion and according to the assumptions considered for such valuation
information and explanations given to us, we are in accordance with the guidelines and
further report that: norms prescribed by the IRDAI and the
Institute of Actuaries of India (formerly known
(a) The accounting policies selected by the as the Actuarial Society of India) in
Company are appropriate and are in concurrence with the IRDAI; and
compliance with the applicable Accounting
Standards referred to under Section 133 of (4) On the basis of examination of books and
the Act, read with Rule 7 of the Companies records of the Company and according to the
(Accounts) Rule, 2016 and with the information and explanations given to us
accounting principles prescribed by the during the course of our audit and to the best
Regulations and orders/directions issued by of our knowledge and belief, we further
IRDAI in this behalf; certify that:
(b) Investments have been valued in accordance (a) We have reviewed the management report
with the provisions of the Insurance Act, 1938, attached to the financial statements for the
the regulations and orders/directions issued year ended March 31, 2019 and there are no
by IRDAI in this behalf; apparent mistakes or material inconsistencies
with the financial statements; and
(c) The actuarial valuation of liabilities in respect
of claims Incurred But Not Reported (IBNR) (b) Based on information and explanations
and those Incurred But Not Enough Reported received during the course of our audit and
(IBNER) as at March 31, 2019, has been duly management representation, nothing has
certified by the Appointed Actuary of the come to our attention which causes us to
Company and relied upon by us. The believe that the company has not complied
Appointed Actuary has also certified that the with the terms and conditions of registration.
39
AUDITOR'S CERTIFICATE
In accordance with the information and explanations given to us and to the best of our knowledge and belief
and based on our examination of the books of accounts and other records maintained by IFFCO TOKIO General
Insurance Company Limited (the Company) for the year ended March 31, 2019, we certify that:
(a) We have verified the cash balances and investments of the Company with the dematerialized
statement/confirmations received from the custodians as at March 31, 2019. The Company had no
secured loans.
(c) No part of the assets of the policyholders' funds has been directly or indirectly applied in contravention of
the provisions of the Insurance Act, 1938 relating to the application and investments of the policyholder's
funds.
This certificate is issued to comply with Schedule 'C' of Insurance Regulatory and Development Authority
(Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002 ('the
Accounting Regulations'), read with regulation 3 of the Accounting Regulations and may not be suitable for any
other purpose.
40
ANNEXURE ‘A’ Chartered Accountants of India. Those Standards
and the Guidance Note require that we comply with
The Annexure referred to in paragraph 2 (f) of ethical requirements and plan and perform the
Report on Other Legal and Regulatory audit to obtain reasonable assurance about
Requirements of our Report of even date to the whether adequate internal financial controls over
members of IFFCO TOKIO General Insurance financial reporting was established and maintained
Company Limited on the Internal Financial and if such controls operated effectively in all
Controls required under Clause (i) of Sub-section 3 material respects.
of Section 143 of the Companies Act, 2013.
Our audit involves performing procedures to obtain
We have audited the internal financial controls over audit evidence about the adequacy of the internal
financial reporting of IFFCO TOKIO General financial controls system over financial reporting
Insurance Company Limited as of March 31, 2019 in and their operating effectiveness. Our audit of
conjunction with our audit of the standalone internal financial controls over financial reporting
financial statements of the Company for the year included obtaining an understanding of internal
ended on that date. financial controls over financial reporting, assessing
the risk that material weakness exists, and testing
Management's Responsibility for Internal
and evaluating the design and operating
Financial Controls
effectiveness of internal control based on the
The Company's management is responsible for assessed risk. The procedures selected depend on
establishing and maintaining internal financial the auditor's judgment, including the assessment
controls based on the internal control over financial of the risks of material misstatement of the
reporting criteria established by the Company financial statements, whether due to fraud or error.
considering the essential components of internal
We believe that the audit evidence we have
control stated in the Guidance Note on Audit of
obtained is sufficient and appropriate to provide
Internal Financial Controls over Financial Reporting
basis for our audit opinion on the Company's
issued by the Institute of Chartered Accountants of
internal financial controls system over financial
India. These responsibilities include the design,
reporting.
implementation and maintenance of adequate
internal financial controls that were operating Meaning of Internal Financial Controls over
effectively for ensuring the orderly and efficient Financial Reporting
conduct of its business, including adherence to
Company's policies, the safeguarding of its assets, A company's internal financial control over financial
the prevention and detection of frauds and errors, reporting is a process designed to provide
the accuracy and completeness of the accounting reasonable assurance regarding the reliability of
records, and the timely preparation of reliable financial reporting and the preparation of financial
financial information, as required under the statements for external purposes in accordance
Companies Act, 2013. with generally accepted accounting principles.
A company's internal financial control over financial
Auditors' Responsibility
reporting includes those policies and procedures
Our responsibility is to express an opinion on the that
Company's internal financial controls over financial 1) Pertain to the maintenance of records that, in
reporting based on our audit. We conducted our reasonable detail, accurately and fairly reflect
audit in accordance with the Guidance Note on the transactions and dispositions of the assets
Audit of Internal Financial Controls over Financial of the company;
Reporting and the Standards on Auditing, issued by
ICAI and deemed to be prescribed under section 2) P rov i d e re a s o n a b l e a s s u ra n c e t h at
143(10) of the Companies Act, 2013, to the extent transactions are recorded as necessary to
applicable to an audit of internal financial controls, permit preparation of financial statements in
both applicable to an audit of Internal Financial accordance with generally accepted
Controls and, both issued by the Institute of accounting principles, and that receipts and
41
expenditures of the company are being made Also, projections of any evaluation of the internal
only in accordance with authorizations of financial controls over financial reporting to future
management and directors of the company; periods are subject to the risk that the internal
and financial control over financial reporting may
become inadequate because of changes in
3) Provide reasonable assurance regarding conditions, or that the degree of compliance with
p reve nt i o n o r t i m e l y d ete c t i o n o f the policies or procedures may deteriorate.
unauthorized acquisition, use, or disposition
of the company's assets that could have a Opinion
material effect on the financial statements.
In our opinion, the Company has, in all material
Inherent Limitations of Internal Financial Controls respects, an adequate internal financial controls
over Financial Reporting system over financial reporting and such internal
financial controls over financial reporting were
Because of the inherent limitations of internal operating effectively as at March 31, 2019, based
financial controls over financial reporting, including on the internal control over financial reporting
the possibility of collusion or improper criteria established by the Company considering
management override of controls, material the essential components of internal control stated
misstatements due to error or fraud may occur and in the Guidance Note on Audit of Internal Financial
not be detected. Controls Over Financial Reporting issued by the
Institute of Chartered Accountants of India.
42
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44
FINANCIAL
STATEMENTS
45
REGISTRATION NO. 106 DATED 4.12.2000
ST
BALANCE SHEET AS AT 31 MARCH, 2019
(` in '000)
S. No. Particulars Schedule As At 31st March, 2019 As At 31st March, 2018
(1) (2) (3) (4) (5)
SOURCES OF FUNDS
1 SHARE CAPITAL 5 2,742,183 2,693,215
2 RESERVES AND SURPLUS 6 19,793,391 16,056,140
3 FAIR VALUE CHANGE ACCOUNT
- Shareholders (1,881) (1,224)
- Policyholders (6,557) (4,552)
4 BORROWINGS 7 - -
Total 22,527,136 18,743,579
APPLICATION OF FUNDS
5 INVESTMENTS
Investments - Shareholders 8 19,859,914 15,147,626
Investments - Policyholders 8A 69,235,852 56,337,187
6 LOANS 9 - -
7 FIXED ASSETS 10 585,090 330,737
8 DEFERRED TAX ASSET (NET) 384,600 168,500
9 CURRENT ASSETS:
Cash and Bank Balances 11 729,312 1,893,591
Advances and Other Assets 12 9,904,008 11,699,569
Sub-Total (A) 10,633,320 13,593,160
10 CURRENT LIABILITIES 13 57,787,711 48,029,944
11 PROVISIONS 14 20,383,929 18,803,687
Sub-Total (B) 78,171,640 66,833,631
12 NET CURRENT ASSETS (C) = (A-B) (67,538,320) (53,240,471)
13 MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted) 15 - -
Total 22,527,136 18,743,579
Notes to Accounts 16
Schedule No. 1 to 16 form an integral part of the financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
46
REGISTRATION NO. 106 DATED 4.12.2000
ST
FIRE INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2019
(` in '000)
st st
S. No. Particulars Schedule Year Ended 31 March, 2019 Year Ended 31 March, 2018
(1) (2) (3) (4) (5)
Schedule No. 1 to 16 form an integral part of the financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
47
REGISTRATION NO. 106 DATED 4.12.2000
MARINE INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31st March, 2019
(` in '000)
st st
S. No. Particulars Schedule Year Ended 31 March, 2019 Year Ended 31 March, 2018
(1) (2) (3) (4) (5)
1 Premiums earned (Net) 1 683,071 576,073
4 Premium Deficiency - -
APPROPRIATIONS
Schedule No. 1 to 16 form an integral part of the financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
48
REGISTRATION NO. 106 DATED 4.12.2000
ST
MISCELLANEOUS INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2019
(` in '000)
st st
S. No. Particulars Schedule Year Ended 31 March, 2019 Year Ended 31 March, 2018
(1) (2) (3) (4) (5)
1 Premiums earned (Net) 1 39,148,797 31,305,599
4 Premium Deficiency - -
APPROPRIATIONS
Schedule No. 1 to 16 form an integral part of the financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
49
REGISTRATION NO. 106 DATED 4.12.2000
ST
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2019
(` in '000)
st st
S. No. Particulars Schedule Year Ended 31 March, 2019 Year Ended 31 March, 2018
(1) (2) (3) (4) (5)
1 OPERATING PROFIT/(LOSS)
(a) Fire Insurance 332,756 28,899
(b) Marine Insurance 259,361 226,460
(c) Miscellaneous Insurance 806,698 994,291
1,398,815 1,249,650
2 INCOME FROM INVESTMENTS
(a) Interest, Dividend & Rent - Gross 1,348,750 1,285,680
(b) Profit on sale of Investments 36,609 91,785
Less: Loss on sale of Investments - -
1,385,359 1,377,465
3 OTHER INCOME
(a) Miscellaneous Income 35,637 17,284
(b) Profit on sale of Fixed Assets 234 220
Total (A) 2,820,045 2,644,619
4 PROVISIONS (Other than taxation)
(a) For diminution in the value of investments 400,000 -
(b) For doubtful debts 7,078 -
(c) For doubtful Advances - -
5 OTHER EXPENSES
(a) Expenses other than those related to Insurance business - -
(b) Bad Debts/Advances written off - -
(c) Loss on sale of Fixed Assets - -
(d) Expenses on Corporate Social Responsibility (CSR) 60,077 57,783
(e) Fines & penalties 500 -
(f) Expenses transferred from Policyholders' Account - 9,000
Total (B) 467,655 66,783
Profit Before Tax (A-B) 2,352,390 2,577,836
Less: Provision for Taxation
Current Tax 638,700 663,900
Deferred Tax (79,400) 16,400
Less: Short/(Excess) provision for taxation for earlier years
Current Tax 143,571 (56,154)
Deferred Tax (136,700) 60,800
Profit After Tax 1,786,219 1,892,890
APPROPRIATIONS
(a) Interim dividends paid during the year - -
(b) Proposed final dividend - -
(c) Dividend distribution tax - -
(d) Transfer to any Reserves or other Accounts - -
Balance of Profit brought forward from last year 13,486,185 11,593,295
Balance carried forward to Balance sheet 15,272,404 13,486,185
Basic & Diluted Earnings per share
(Equity shares of face value of `10 each) 6.54 7.03
Notes to Accounts 16
Schedule No. 1 to 16 form an integral part of the financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
50
REGISTRATION NO. 106 DATED 4.12.2000
ST
RECEIPTS AND PAYMENTS ACCOUNT (DIRECT BASIS) FOR THE YEAR ENDED 31 MARCH, 2019
(` in '000)
st st
Particulars Year Ended 31 March, 2019 Year Ended 31 March, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Premium received from policyholders, including advance receipts 86,251,426 59,130,986
Other receipts 35,637 17,284
Payment to the re-insurers, net of commissions and claims (4,368,571) (7,032,013)
Payments to co-insurers, net of claims recovery 538,074 445,712
Payments of claims (55,264,603) (34,271,217)
Payments of commission and brokerage (5,452,018) (3,666,499)
Payments of other operating expenses (5,965,450) (8,259,505)
Preliminary and pre-operative expenses - -
Deposits, advances and staff loans (54,994) (347,544)
Income taxes paid (Net) (644,140) (967,047)
Service tax/GST paid (5,149,618) (3,496,474)
Other payments - -
Cash flows before extraordinary items 9,925,743 1,553,684
Cash flows from extraordinary operations - -
Net Cash Flows from operating activities 9,925,743 1,553,684
Sanjeev Chopra
Chief Financial Officer
51
SCHEDULES FORMING PART OF FINANCIAL STATEMENTS
SCHEDULE - 1
PREMIUM EARNED (NET)
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Fire *Marine **Miscellaneous Total Fire *Marine **Miscellaneous Total
Premium from direct
business written 3,277,006 1,601,596 65,139,836 70,018,438 2,753,304 1,455,201 52,110,410 56,318,915
Add : Premium on
reinsurance accepted 505,164 30,394 143,870 679,428 630,703 25,339 97,257 753,299
Less : Premium on
reinsurance ceded 3,229,119 944,085 24,648,314 28,821,518 2,916,159 887,904 16,734,160 20,538,223
Net Premium 553,051 687,905 40,635,392 41,876,348 467,848 592,636 35,473,507 36,533,991
Total Premium Earned (Net) 471,315 683,071 39,148,797 40,303,183 481,413 576,073 31,305,599 32,363,085
SCHEDULE - 1A
PREMIUM EARNED (NET)
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Marine Cargo Marine Hull Total Marine Cargo Marine Hull Total
Premium from direct business written 1,551,252 50,344 1,601,596 1,401,153 54,048 1,455,201
Less : Premium on reinsurance ceded 905,485 38,600 944,085 849,217 38,687 887,904
Total Premium Earned (Net) 667,710 15,361 683,071 560,283 15,790 576,073
52
SCHEDULE - 1B
PREMIUM EARNED (NET)
(` in '000)
st
Year Ended 31 March, 2019
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Premium from
direct business
written 15,949,301 16,663,247 32,612,548 773,824 6,048 297,229 1,250,304 306,992 8,036,780 19,341,022 2,515,089 65,139,836
Add : Premium
on reinsurance
accepted - - - 56,674 - - - 47,047 - - 40,149 143,870
15,949,301 16,663,247 32,612,548 830,498 6,048 297,229 1,250,304 354,039 8,036,780 19,341,022 2,555,238 65,283,706
Less : Premium
on reinsurance
ceded 2,427,258 2,524,879 4,952,137 617,496 5,983 15,234 238,109 137,261 634,397 16,461,295 1,586,402 24,648,314
Net Premium 13,522,043 14,138,368 27,660,411 213,002 65 281,995 1,012,195 216,778 7,402,383 2,879,727 968,836 40,635,392
Adjustments for
changes in
Reserve for
Unexpired Risks 524,979 955,070 1,480,049 13,437 (68) (735) (88,253) 7,870 116,292 (77,034) 35,037 1,486,595
Total Premium
Earned (Net) 12,997,064 13,183,298 26,180,362 199,565 133 282,730 1,100,448 208,908 7,286,091 2,956,761 933,799 39,148,797
SCHEDULE - 1B
PREMIUM EARNED (NET)
(` in '000)
st
Year Ended 31 March, 2018
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Premium from
direct business
written 14,950,746 15,073,023 30,023,769 897,317 5,988 295,744 791,796 243,563 6,709,056 10,772,966 2,370,211 52,110,410
Add : Premium
on reinsurance
accepted - - - 50,807 - - - 37,070 1,876 - 7,504 97,257
14,950,746 15,073,023 30,023,769 948,124 5,988 295,744 791,796 280,633 6,710,932 10,772,966 2,377,715 52,207,667
Less : Premium
on reinsurance
ceded 2,282,798 2,304,295 4,587,093 760,217 5,613 15,214 112,282 86,643 576,908 9,122,881 1,467,309 16,734,160
Net Premium 12,667,948 12,768,728 25,436,676 187,907 375 280,530 679,514 193,990 6,134,024 1,650,085 910,406 35,473,507
Adjustments for
changes in
Reserve for
Unexpired Risks 776,533 1,374,574 2,151,107 30,657 264 4,419 165,122 17,397 1,657,665 119,499 21,778 4,167,908
Total Premium
Earned (Net) 11,891,415 11,394,154 23,285,569 157,250 111 276,111 514,392 176,593 4,476,359 1,530,586 888,628 31,305,599
53
SCHEDULE-2
CLAIMS INCURRED (NET)
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Fire *Marine **Miscellaneous Total Fire *Marine **Miscellaneous Total
Claims Paid
Direct 1,992,469 1,248,700 47,992,146 51,233,315 1,530,959 1,028,618 29,175,505 31,735,082
Add : Reinsurance accepted 119,102 34,150 10,340 163,592 79,937 2,325 32,191 114,453
Less : Reinsurance ceded 1,909,575 859,100 19,751,621 22,520,296 1,385,213 706,733 7,767,552 9,859,498
Net Claims Paid 201,996 423,750 28,250,865 28,876,611 225,683 324,210 21,440,144 21,990,037
Total Claims Incurred 305,815 413,107 34,863,307 35,582,229 479,064 314,703 26,033,311 26,827,078
SCHEDULE - 2A
CLAIMS INCURRED (NET)
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Marine Cargo Marine Hull Total Marine Cargo Marine Hull Total
Claims Paid
Direct 839,424 409,276 1,248,700 918,073 110,545 1,028,618
54
SCHEDULE - 2B
CLAIMS INCURRED (NET)
(` in '000)
st
Year Ended 31 March, 2019
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Claims Paid
Direct 11,187,551 9,229,337 20,416,888 364,066 9,222 79,860 996,256 20,735 7,750,401 16,897,337 1,457,381 47,992,146
Add : Reinsurance
accepted - - - 10,034 291 - - - 12 - 3 10,340
Less :
Reinsurance
ceded 1,803,369 2,523,751 4,327,120 251,009 9,062 4,273 123,347 6,112 581,413 13,611,147 838,138 19,751,621
Net Claims Paid 9,384,182 6,705,586 16,089,768 123,091 451 75,587 872,909 14,623 7,169,000 3,286,190 619,246 28,250,865
Add : Claims
Outstanding at
the end of the
year 1,953,185 33,589,844 35,543,029 202,514 1,958 147,210 599,720 154,799 1,284,820 1,844,523 603,517 40,382,090
Less : Claims
Outstanding at
the beginning
of the year 2,382,926 26,466,316 28,849,242 251,903 430 118,770 342,306 131,341 1,036,994 2,446,010 592,652 33,769,648
Total Claims
Incurred 8,954,441 13,829,114 22,783,555 73,702 1,979 104,027 1,130,323 38,081 7,416,826 2,684,703 630,111 34,863,307
SCHEDULE - 2B
CLAIMS INCURRED (NET)
(` in '000)
st
Year Ended 31 March, 2018
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Claims Paid
Direct 9,715,492 7,297,475 17,012,967 351,346 (1,892) 84,817 436,073 9,080 4,685,133 5,842,352 755,629 29,175,505
Add : Reinsurance
accepted - - - 1,368 1,955 - - - 28,868 - - 32,191
Less :
Reinsurance
ceded 2,022,690 1,319,747 3,342,437 250,472 (1,671) 4,765 44,629 3,608 409,712 3,393,077 320,523 7,767,552
Net Claims Paid 7,692,802 5,977,728 13,670,530 102,242 1,734 80,052 391,444 5,472 4,304,289 2,449,275 435,106 21,440,144
Add : Claims
Outstanding at
the end of the
year 2,382,926 26,466,316 28,849,242 251,903 430 118,770 342,306 131,341 1,036,994 2,446,010 592,652 33,769,648
Less : Claims
Outstanding at
the beginning
of the year 2,212,587 21,868,002 24,080,589 243,864 941 104,453 215,140 87,799 1,333,699 2,657,709 452,287 29,176,481
Total Claims
Incurred 7,863,141 10,576,042 18,439,183 110,281 1,223 94,369 518,610 49,014 4,007,584 2,237,576 575,471 26,033,311
55
SCHEDULE - 3
COMMISSION
(` in '000)
Year Ended 31st March, 2019 Year Ended 31st March, 2018
Particulars
Fire *Marine **Miscellaneous Total Fire *Marine **Miscellaneous Total
Commission Paid
Direct 231,884 115,609 4,541,144 4,888,637 164,534 97,850 3,113,429 3,375,813
Total (A) 231,884 115,609 4,541,144 4,888,637 164,534 97,850 3,113,429 3,375,813
Add : Commission on
reinsurance accepted 31,925 1,703 19,281 52,909 39,304 775 7,538 47,617
Less : Commission on
reinsurance ceded 421,146 138,563 2,244,951 2,804,660 252,441 114,690 1,925,532 2,292,663
Net Commission (157,337) (21,251) 2,315,474 2,136,886 (48,603) (16,065) 1,195,435 1,130,767
Others - - - - - - - -
Total (B) 231,884 115,609 4,541,144 4,888,637 164,534 97,850 3,113,429 3,375,813
SCHEDULE - 3A
COMMISSION
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Marine Cargo Marine Hull Total Marine Cargo Marine Hull Total
Commission Paid
Direct 109,993 5,616 115,609 92,269 5,581 97,850
Add : Commission on
reinsurance accepted 1,703 - 1,703 775 - 775
Less : Commission on
reinsurance ceded 134,571 3,992 138,563 110,360 4,330 114,690
Others - - - - - -
56
SCHEDULE - 3B
COMMISSION
(` in '000)
st
Year Ended 31 March, 2019
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Commission Paid
Direct 3,079,076 262,257 3,341,333 101,942 441 59,488 142,948 61,265 534,213 - 299,514 4,541,144
Total (A) 3,079,076 262,257 3,341,333 101,942 441 59,488 142,948 61,265 534,213 - 299,514 4,541,144
Add : Commission
on reinsurance
accepted - - - 5,868 - - - 6,502 - - 6,911 19,281
Less : Commission
on reinsurance
ceded 555,072 496,179 1,051,251 55,045 577 2,217 20,151 16,566 66,722 801,010 231,412 2,244,951
Net Commission 2,524,004 (233,922) 2,290,082 52,765 (136) 57,271 122,797 51,201 467,491 (801,010) 75,013 2,315,474
Agents 843,379 189,137 1,032,516 47,562 - 40,845 25,593 14,359 262,044 - 124,668 1,547,587
Brokers 2,231,794 71,934 2,303,728 54,125 441 18,599 116,349 46,757 268,670 - 160,461 2,969,130
Corporate Agency 3,903 1,186 5,089 255 - 44 1,006 149 3,499 - 14,385 24,427
Others - - - - - - - - - - - -
Total (B) 3,079,076 262,257 3,341,333 101,942 441 59,488 142,948 61,265 534,213 - 299,514 4,541,144
SCHEDULE - 3B
COMMISSION
(` in '000)
st
Year Ended 31 March, 2018
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Commission Paid
Direct 2,073,835 167,001 2,240,836 67,127 576 44,121 77,021 30,339 440,553 - 212,856 3,113,429
Total (A) 2,073,835 167,001 2,240,836 67,127 576 44,121 77,021 30,339 440,553 - 212,856 3,113,429
Add : Commission
on reinsurance
accepted - - - 4,349 - - - 1,602 152 - 1,435 7,538
Less : Commission
on reinsurance
ceded 487,465 415,115 902,580 75,036 806 2,218 13,323 9,761 60,527 649,884 211,397 1,925,532
Net Commission 1,586,370 (248,114) 1,338,256 (3,560) (230) 41,903 63,698 22,180 380,178 (649,884) 2,894 1,195,435
Agents 769,560 129,695 899,255 25,529 - 28,007 35,897 4,617 199,393 - 71,062 1,263,760
Brokers 1,269,740 `21,339 1,291,079 40,303 576 14,954 37,513 25,435 220,637 - 120,159 1,750,656
Corporate Agency 34,535 15,967 50,502 1,295 - 1,160 3,611 287 20,523 - 21,635 99,013
Others - - - - - - - - - - - -
Total (B) 2,073,835 167,001 2,240,836 67,127 576 44,121 77,021 30,339 440,553 - 212,856 3,113,429
57
SCHEDULE - 4
OPERATING EXPENSES RELATING TO INSURANCE BUSINESS
(` in '000)
Year Ended 31st March, 2019 Year Ended 31st March, 2018
S. No. Particulars
Fire *Marine **Miscellaneous Total Fire *Marine **Miscellaneous Total
1 Employees remuneration and welfare benefits 29,363 36,523 2,157,442 2,223,328 21,525 27,267 1,632,109 1,680,901
2 Travel, conveyance and vehicle running
expenses 2,241 2,787 164,632 169,660 1,467 1,859 111,256 114,582
3 Training expenses 269 335 19,787 20,391 77 98 5,848 6,023
4 Rent, rates and taxes 4,977 6,191 365,704 376,872 4,421 5,600 335,210 345,231
5 Repairs 2,096 2,608 154,034 158,738 1,754 2,223 133,009 136,986
6 Printing and Stationery 1,097 1,363 80,546 83,006 922 1,167 69,900 71,989
7 Communication 1,568 1,950 115,217 118,735 1,113 1,410 84,355 86,878
8 Legal and professional charges 15,194 18,899 1,116,405 1,150,498 18,857 23,886 1,429,740 1,472,483
9 Auditor's fees, expenses etc.
(a) As Auditor 38 48 2,814 2,900 37 47 2,816 2,900
(b) As advisor or in any other capacity in
respect of - -
(i) Taxation matters - - - - - - - -
(ii) Insurance matters - - - - - - - -
(iii) Management services - - - - - - - -
(c) in any other capacity (Tax Audit fees) 9 12 679 700 9 11 680 700
10 Advertisement and publicity 5,220 6,494 383,566 395,280 1,990 2,520 150,851 155,361
11 Marketing & Support services - - - - 31,497 39,898 2,388,201 2,459,596
12 Interest and Bank charges 1,679 2,089 123,383 127,151 1,321 1,674 100,180 103,175
13 Others:
Policy stamps 39 - 4,362 4,401 41 - 4,069 4,110
Information & Technology expenses 2,716 3,378 199,549 205,643 2,504 3,172 189,893 195,569
Electricity & Water charges 739 919 54,265 55,923 673 852 51,040 52,565
Courtesies & Entertainment 956 1,189 70,258 72,403 623 789 47,251 48,663
Others 899 1,118 66,058 68,075 380 481 28,805 29,666
14 Depreciation 2,264 2,816 166,361 171,441 1,500 1,899 113,713 117,112
15 Service tax Expense/GST Expense 2,169 2,696 159,280 164,145 790 1,001 59,887 61,678
16 Expenses transferred to Shareholders' Account - - - - - - (9,000) (9,000)
Total 73,533 91,415 5,404,342 5,569,290 91,501 115,854 6,929,813 7,137,168
SCHEDULE - 4A
OPERATING EXPENSES RELATING TO INSURANCE BUSINESS
(` in '000)
S. No. Year Ended 31st March, 2019 Year Ended 31st March, 2018
Particulars
Marine Cargo Marine Hull Total Marine Cargo Marine Hull Total
1 Employees remuneration and welfare benefits 35,899 624 36,523 26,560 707 27,267
2 Travel, conveyance and vehicle running expenses 2,739 48 2,787 1,811 48 1,859
3 Training expenses 329 6 335 95 3 98
4 Rent, rates and taxes 6,085 106 6,191 5,455 145 5,600
5 Repairs 2,563 45 2,608 2,165 58 2,223
6 Printing and Stationery 1,340 23 1,363 1,137 30 1,167
7 Communication 1,917 33 1,950 1,373 37 1,410
8 Legal and professional charges 18,577 322 18,899 23,267 619 23,886
9 Auditor's fees, expenses etc.
(a) As Auditor 47 1 48 46 1 47
(b) As Advisor or in any other capacity in respect of
(i) Taxation matters - - - - - -
(ii) Insurance matters - - - - - -
(iii) Management services - - - - - -
(c) In any other capacity (Tax Audit fees) 12 - 12 11 - 11
10 Advertisement and publicity 6,383 111 6,494 2,455 65 2,520
11 Marketing & Support services - - - 38,864 1,034 39,898
12 Interest and Bank charges 2,053 36 2,089 1,630 44 1,674
13 Others:
Policy stamps - - - - - -
Information & Technology expenses 3,321 57 3,378 3,090 82 3,172
Electricity & Water charges 903 16 919 830 22 852
Courtesies & Entertainment 1,169 20 1,189 769 20 789
Others 1,099 19 1,118 469 12 481
14 Depreciation 2,768 48 2,816 1,850 49 1,899
15 Service tax Expense/GST Expense 2,650 46 2,696 975 26 1,001
16 Expenses transferred to Shareholders' Account - - - - - -
Total 89,854 1,561 91,415 112,852 3,002 115,854
58
SCHEDULE - 4B
OPERATING EXPENSES RELATING TO INSURANCE BUSINESS
(` in '000)
st
Year Ended 31 March, 2019
S.
No. Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
1 Employees remuneration
and welfare benefits 717,922 750,644 1,468,566 11,309 4 14,972 53,740 11,509 393,012 152,892 51,438 2,157,442
2 Travel, conveyance and
vehicle running expenses 54,784 57,281 112,065 863 - 1,142 4,101 878 29,990 11,667 3,926 164,632
3 Training expenses 6,584 6,885 13,469 104 - 137 493 106 3,604 1,402 472 19,787
4 Rent, rates and taxes 121,693 127,240 248,933 1,917 1 2,538 9,109 1,951 66,619 25,917 8,719 365,704
5 Repairs 51,257 53,593 104,850 807 - 1,069 3,837 822 28,060 10,916 3,673 154,034
6 Printing and Stationery 26,803 28,025 54,828 422 - 559 2,006 430 14,673 5,708 1,920 80,546
7 Communication 38,340 40,088 78,428 604 - 800 2,870 614 20,989 8,165 2,747 115,217
8 Legal and professional
charges 371,501 388,434 759,935 5,852 2 7,747 27,809 5,956 203,371 79,117 26,616 1,116,405
9 Auditor's fees, expenses etc.
(a) As Auditor 936 979 1,915 15 - 20 70 15 513 199 67 2,814
(b) As Advisor or in any other
capacity in respect of - - - - - - - - - - - -
(i) Taxation matters - - - - - - - - - - - -
(ii) Insurance matters - - - - - - - - - - - -
(iii) Management services - - - - - - - - - - - -
(c) In any other capacity
(Tax Audit fees) 226 236 462 3 - 5 17 4 124 48 16 679
10 Advertisement and publicity 127,637 133,455 261,092 2,011 1 2,662 9,554 2,046 69,873 27,182 9,145 383,566
11 Marketing & Support
services - - - - - - - - - - - -
12 Interest and Bank charges 41,058 42,929 83,987 647 - 856 3,073 658 22,476 8,744 2,942 123,383
13 Others:
Policy stamps 1,619 1,692 3,311 8 - 158 19 1 48 - 817 4,362
Information & Technology
expenses 66,403 69,429 135,832 1,046 - 1,385 4,971 1,065 36,351 14,141 4,758 199,549
Electricity & Water charges 18,058 18,880 36,938 284 - 377 1,352 289 9,885 3,846 1,294 54,265
Courtesies & Entertainment 23,379 24,445 47,824 368 - 488 1,750 375 12,799 4,979 1,675 70,258
Others 21,982 22,984 44,966 346 - 458 1,645 352 12,033 4,682 1,576 66,058
14 Depreciation 55,359 57,882 113,241 872 - 1,154 4,144 887 30,305 11,790 3,968 166,361
15 Service tax Expense/GST Expense 53,003 55,419 108,422 835 - 1,105 3,968 850 29,015 11,288 3,797 159,280
16 Expenses transferred to
Shareholders' Account - - - - - - - - - - - -
Total 1,798,544 1,880,520 3,679,064 28,313 8 37,632 134,528 28,808 983,740 382,683 129,566 5,404,342
SCHEDULE - 4B
OPERATING EXPENSES RELATING TO INSURANCE BUSINESS
(` in '000)
st
Year Ended 31 March, 2018
S.
No. Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
1 Employees remuneration
and welfare benefits 582,843 587,480 1,170,323 8,645 17 12,907 31,264 8,925 282,222 75,919 41,887 1,632,109
2 Travel, conveyance and
vehicle running expenses 39,731 40,047 79,778 589 1 880 2,131 609 19,238 5,175 2,855 111,256
3 Training expenses 2,088 2,105 4,193 31 - 46 112 32 1,011 272 151 5,848
4 Rent, rates and taxes 119,707 120,659 240,366 1,776 4 2,651 6,421 1,833 57,964 15,592 8,603 335,210
5 Repairs 47,499 47,877 95,376 704 1 1,052 2,548 727 23,000 6,187 3,414 133,009
6 Printing and Stationery 24,962 25,160 50,122 370 1 553 1,339 382 12,087 3,252 1,794 69,900
7 Communication 30,124 30,364 60,488 447 1 667 1,616 461 14,586 3,924 2,165 84,355
8 Legal and professional
charges 510,575 514,637 1,025,212 7,574 15 11,306 27,387 7,819 247,229 66,506 36,692 1,429,740
9 Auditor's fees, expenses etc.
(a) As Auditor 1,005 1,014 2,019 15 - 22 54 16 487 131 72 2,816
(b) As Advisor or in any other
capacity in respect of - - - - - - - - - - - -
(i) Taxation matters - - - - - - - - - - - -
(ii) Insurance matters - - - - - - - - - - - -
(iii) Management services - - - - - - - - - - - -
(c) In any other capacity
(Tax Audit fees) 243 245 488 4 - 5 13 4 117 32 17 680
10 Advertisement and publicity 53,870 54,299 108,169 799 2 1,193 2,889 825 26,085 7,017 3,872 150,851
11 Marketing & Support
services 852,851 859,635 1,712,486 12,651 25 18,886 45,747 13,060 412,964 111,089 61,293 2,388,201
12 Interest and Bank charges 35,775 36,060 71,835 531 1 792 1,919 548 17,323 4,660 2,571 100,180
13 Others:
Policy stamps 1,491 1,503 2,994 7 - 155 20 1 62 - 830 4,069
Information & Technology
expenses 67,813 68,352 136,165 1,006 2 1,502 3,638 1,038 32,836 8,833 4,873 189,893
Electricity & Water charges 18,227 18,372 36,599 270 1 404 978 279 8,826 2,374 1,309 51,040
Courtesies & Entertainment 16,874 17,008 33,882 250 - 374 905 258 8,171 2,198 1,213 47,251
Others 10,286 10,368 20,654 153 - 228 552 158 4,981 1,340 739 28,805
14 Depreciation 40,608 40,931 81,539 602 1 899 2,178 622 19,663 5,290 2,919 113,713
15 Service tax Expense/GST Expense 21,386 21,556 42,942 317 1 474 1,147 327 10,356 2,786 1,537 59,887
16 Expenses transferred to
Shareholders' Account - - - - - - - - (9,000) - - (9,000)
Total 2,477,958 2,497,672 4,975,630 36,741 73 54,996 132,858 37,924 1,190,208 322,577 178,806 6,929,813
59
SCHEDULE - 5
SHARE CAPITAL
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Authorised Capital
400000000 Equity Shares of `10 each 4,000,000 4,000,000
(Previous Year 400000000 Equity Shares of `10 each)
2 Issued Capital
274218300 Equity Shares of `10 each
(Previous Year 269321500 Equity Shares of `10 each) 2,742,183 2,693,215
3 Subscribed Capital
274218300 Equity Shares of `10 each
(Previous Year 269321500 Equity Shares of `10 each) 2,742,183 2,693,215
4 Called up Capital
274218300 Equity Shares of `10 each
(Previous Year 269321500 Equity Shares of `10 each) 2,742,183 2,693,215
Less: Calls unpaid
Add: Equity Shares forfeited (amount originally paid up) - -
Less: Par Value of Equity Shares bought back - -
Less: Preliminary Expenses - -
Expenses including commission or brokerage on
underwriting or subscription of shares - -
SCHEDULE - 5A
SHARE CAPITAL
PATTERN OF SHAREHOLDING
(As certified by the Management)
st st
As at 31 March, 2019 As at 31 March, 2018
Shareholders
Number of Shares % of Holding Number of Shares % of Holding
Promoters
a) Indian 139,851,333 51 137,353,965 51
b) Foreign 134,366,967 49 131,967,535 49
Others - - - -
Total 274,218,300 100 269,321,500 100
SCHEDULE - 6
RESERVES AND SURPLUS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Capital Reserve - -
2 Capital Redemption Reserve - -
3 Share Premium - -
Opening Balance 2,568,789 2,568,789
Additions during the year 1,951,032 -
Closing Balance 4,519,821 2,568,789
4 General Reserve - -
5 Catastrophe Reserve 1,166 1,166
6 Other Reserves - -
7 Balance of Profit in Profit and Loss Account 15,272,404 13,486,185
TOTAL 19,793,391 16,056,140
60
SCHEDULE - 7
BORROWINGS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Debentures/Bonds - -
2 Banks - -
3 Financial Institutions - -
4 Others - -
Total - -
SCHEDULE - 8
INVESTMENTS - SHAREHOLDERS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
Note: (Sch 8 & Sch 8A): Aggregate amount of company's investment other than listed equity securities and derivative
instruments is ` 89,064,254 thousand (Previous year ` 71,449,673 thousand).
Market value of such investments as at 31.03.2019 is ` 88,138,529 thousand (Previous year ` 70,092,565 thousand).
61
SCHEDULE - 8A
INVESTMENTS - POLICYHOLDERS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
SCHEDULE - 9
LOANS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Security Wise Classification
Secured
(a) On mortgage of property
(aa) In India - -
(bb) Outside India - -
(b) On Shares, Bonds, Govt Securities - -
(c) Others - -
Unsecured - -
Total - -
2 Borrower Wise Classification
(a) Central and State Governments - -
(b) Banks and Financial Institutions - -
(c) Subsidiaries - -
(d) Industrial Undertakings - -
(e) Others - -
Total - -
3 Performance Wise Classification
(a) Loans classified as standard
(aa) In India - -
(bb) Outside India - -
(b) Non Performing Loans Less Provisions
(aa) In India - -
(bb) Outside India - -
Total - -
4 Maturity Wise Classification
(a) Short Term - -
(b) Long Term - -
Total - -
62
SCHEDULE - 10
FIXED ASSETS
(` in '000)
63
SCHEDULE - 11
CASH AND BANK BALANCES
(` in '000)
S. No. Particulars As at 31st March, 2019 As at 31st March, 2018
(1) (2) (3) (4)
1 Cash (including cheques, drafts and stamps) 39,768 30,032
2 Bank Balances
(a) Deposit Accounts
(i) Short term (due within 12 months) - -
(ii) Others - -
(b) Current Accounts 689,544 1,863,559
(c ) Others - -
3 Money at call & short notice
With Banks - -
With Other Institutions - -
4 Others - -
Total 729,312 1,893,591
Balances with non-scheduled banks included in 2 and 3 above - -
Note: Balance with Banks in current accounts above, includes liquid flexi term deposit of ` 787,100 thousand (Previous
year ` 1,437,900 thousand).
SCHEDULE - 12
ADVANCES AND OTHER ASSETS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
Advances
1 Reserve Deposit with Ceding Companies - -
2 Application Money for Investments - -
3 Pre-payments 80,082 84,606
4 Advance to Directors/Officers - -
5 Advance Tax Paid and Tax Deducted at source (Net of provision for taxation) 238,335 376,465
6 Deposit towards Rent 90,814 78,565
7 Service Tax/GST Recoverable 18,322 12,854
8 Others 6,572 38,390
Total (A) 434,125 590,880
Other Assets
1 Income accrued on Investments/FDRs 2,875,349 2,589,447
2 Outstanding Premiums 4,579,641 6,762,345
3 Agents' Balances - -
4 Foreign Agencies Balances - -
5 Due from entities carrying on insurance business (including reinsurers) 1,657,845 1,468,944
6 Due from Subsidiaries/Holdings 45,824 2,953
7 Assets held for unclaimed amount of Policyholders 260,063 252,535
Add : Investment income accruing on unclaimed amount 51,161 32,465
8 Deposit with Reserve Bank of India - -
9 Unsettled Investment contract receivable - -
Total (B) 9,469,883 11,108,689
Total (A+B) 9,904,008 11,699,569
64
SCHEDULE - 13
CURRENT LIABILITIES
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Agents Balances 372,642 419,021
2 Balances due to other insurance companies (including reinsurers) 7,189,015 6,556,057
3 Deposits held on reinsurances ceded - -
4 Premiums received in advance 4,250,441 626,984
5 Unallocated premium 69,627 125,342
6 Sundry Creditors 1,185,978 1,525,498
7 Due to subsidiaries/holding company -
8 Claims outstanding* 43,113,172 37,787,976
9 Due to Officers/Directors - -
10 Deposit Premium 514,687 423,898
11 Goods & Service Tax Payable 456,488 14,702
12 Employee Benefit 346,843 265,479
13 Unclaimed amount of Policyholders 237,657 252,522
Add: Investment income accruing on unclaimed amount 51,161 32,465
Total 57,787,711 48,029,944
* Claims Outstanding Includes ` 1,353,176 thousand (Previous Year ` 2,733,598 thousands) on account of settlement
received from the IMTPIP towards the Company's share of claim liability determined by the pool upto the date of
dismantling (Net of claims paid upto reporting period).
SCHEDULE - 14
PROVISIONS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Reserve for Unexpired Risk 20,335,230 18,762,065
2 For Taxation (less advance tax paid and taxes deducted at source) - -
3 For Proposed Dividends - -
4 For Dividend Distribution Tax - -
5 For Premium Deficiency - -
6 For Doubtful Debt 48,699 41,622
Total 20,383,929 18,803,687
SCHEDULE - 15
MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
(` in '000)
S. No. Particulars As at 31stMarch, 2019 As at 31st March, 2018
(1) (2) (3) (4)
65
SKOCH Award
for
“Bima Kendras for Rural Expansion”
66
ACCOUNTING
POLICIES & NOTES TO
ACCOUNTS
67
SCHEDULE 16: NOTES TO ACCOUNTS premium and in respect of all other
reinsurance acceptances under pool
A. SIGNIFICANT ACCOUNTING POLICIES
arrangements at fifty percent of the net
1. Basis of Preparation of Financial Statements premium during the preceding twelve
months.
The financial statements have been prepared
under the historical cost convention and on 3.2 Any subsequent revision to the premium
the accrual basis of accounting in accordance under the policies is accounted for in the
with the generally accepted accounting period in which they occur.
principles and conform to the statutory
3.3 Premium deficiency is recognized whenever
requirements prescribed under the Insurance
expected claim costs, related expenses and
Regulatory and Development Authority
(Preparation of Financial Statements and maintenance costs exceeds related reserve
Auditor's Report of Insurance Companies) for unexpired risks for each segment of
Regulations, 2002 including directions business.
thereon, the Insurance Act, 1938, the 3.4 Reinsurance Inward acceptances are
provisions of Companies Act, 2013 including
accounted for on the basis of returns, to the
notified Accounting Standards there under
extent received, from the insurers.
except otherwise stated.
3.5 Commission on reinsurance cessions are
2. Use of Estimates
recognized as income in the period in which
The presentation of the financial statements the premium is ceded. Profit commission
in conformity with the generally accepted under reinsurance treaties, wherever
accounting principles requires the applicable, is recognized on the determination
management to make estimates and of profit for the period.
assumptions that affect the reported amount
of assets and liabilities, revenues and 3.6 Interest Income is recognized on accrual basis.
expenses and disclosure of contingent assets 3.7 Dividend income is recognized when the right
& liabilities. Such estimates and assumptions to receive dividend is established.
are based on the management's evaluation of
the relevant facts and circumstances as on 3.8 Profit or Loss on sale/redemption of
the date of financial statements. Any revision investments which is the difference between
to the accounting estimates is recognized sale consideration and carrying value is
prospectively in the period in which the recognized on trade date and includes effects
results are known/ materialized. of accumulated fair value changes, previously
recognized, for specific investments
3. Revenue Recognition
sold/redeemed during the year. In
3.1 Premium and cession thereof are recognized determining realized gain/loss, cost of
over the contract period or the period of the securities is arrived at on 'Weighted average
risk in respective revenue account following cost' basis and sale consideration for the
1/365 method. purpose of realized gain/loss is net of
Brokerage and taxes, if any.
Reserve for unexpired risk representing
premium attributable to the succeeding 4. Allocation of Investment Income between
accounting period is maintained based on the Revenue Accounts and Profit and Loss
above method except in Marine Hull business Account
and reinsurance acceptances under the Pool
arrangements. Unexpired Risk Reserve for Investment income is apportioned to Profit
Marine Hull business and reinsurance and Loss Account and Revenue Accounts in
acceptances in respect of Terrorism Pool is the ratio of average of Shareholders Funds
maintained at hundred percent of net and Policyholders Funds standing in each
class of business at the end of each month.
68 25
5. Claims Incurred Valuation
5.1 Liability in respect of claims is provided for the (i) Debt securities including Government
intimations received up to the year-end based securities are considered as held to
on the surveyor's assessment, information maturity and are valued at cost subject to
provided by the insured, judgment based on amortization by charging off/crediting
past experience and other applicable laws investment income with the difference of
and practices. However, in respect of claims acquisition cost and maturity value over
under re-insurance acceptances, the claim the unexpired period of maturity on
liability is provided based on the straight line method.
returns/advices, to the extent received, from
the Reinsurers. (ii) Investments in units of mutual funds are
valued at Net Asset Value (NAV).
5.2 Liability in respect of “Claims incurred but not
reported” (IBNR) and “Claims incurred but (iii) Equity securities listed and actively traded
not enough reported” (IBNER) is provided for are stated at fair value, being the last
on actuarial estimates as certified by the quoted closing price on the National Stock
“Appointed Actuary”. Exchange (NSE). However, in case of any
stock not being listed at NSE, the same is
5.3 Salvage/Recoveries under claims are netted valued based on the last quoted closing
off against “Claims Incurred” and are price on Bombay Stock Exchange (BSE).
accounted for on realization.
(iv) Any unrealized gain/loss arising due to
6. Allocation of Operating Expenses change in fair value of mutual fund
investments and listed equity shares is
Operating expenses other than policy stamps accounted in 'Fair Value Change Account'
are apportioned to respective revenue and carried forward in the Balance Sheet
accounts on the basis of net premium in each and is not available for distribution.
class of business at the end of financial year.
Expenses relating to policy stamps are directly (v) Investment in subsidiary company is
taken to the respective revenue accounts. valued at cost less permanent diminution,
if any.
7. Acquisition Cost of insurance contracts
9. Fixed Assets
Cost relating to acquisition of new/renewal of
insurance contracts are expensed in the Fixed Assets including Intangible Assets are
period in which they are incurred. stated at their cost of acquisition less
accumulated depreciation/amortization.
8. Investments
Capital Work in Progress is stated at cost.
Investments are recorded on the trade date at
the acquisition cost. 10. Depreciation/Amortization
69
(ii) Information Technology Equipments – 15. Employee Benefits
Servers & Networks are depreciated over
their useful life of three years on straight 15.1 The Liability for Gratuity is covered by the
line method. “Group Gratuity Cash Accumulation Scheme”
with an Insurance Company. The liability is
(iii) Fixed Assets having value up to ` 5000 are accounted for based on actuarial valuation as
fully depreciated in the year of on the date of Balance Sheet.
acquisition.
15.2 Liability for leave encashment is provided for
10.2 Intangible Asset (Software) is amortized over on the basis of actuarial valuation as on the
its useful life of three years on straight line date of Balance Sheet.
method.
15.3 Provident Fund and Family Pension Scheme
11. Operating Lease
contributions and liability towards Leave
Payments made towards assets/premises Travel Assistance (LTA) are accounted for on
taken on operating lease are recognized as an accrual basis.
expense in the revenue accounts and profit
and loss account over the lease term on 15.4 Gains/losses arising out of the actuarial
straight-line basis. valuation are recognized immediately in the
accounts.
12. Pre-Paid Expenses
16. Impairment of Assets
Expenditure up to ` 25,000 in each case is
accounted for in the year in which the same is The carrying amounts of assets are reviewed
incurred. at each balance sheet date for indications of
any impairment based on internal/external
13. Foreign Currency Transactions factors. An impairment loss is recognized
wherever the carrying amount of the asset
Transactions in foreign currency are exceeds its recoverable amount. Any such
accounted at the exchange rate prevailing on impairment loss is recognized by charging it
the date of the transaction. to the profit and loss account. A previously
recognized impairment loss is reversed where
The monetary items remaining outstanding
it no longer exists and the asset is restated to
as on the date of Balance Sheet are translated
that effect.
at the exchange rate as on that date.
70
B. NOTES FORMING PART OF ACCOUNTS
I. Statutory disclosures as required by IRDAI
1. All the assets of the Company are free from all encumbrances and are within India.
2. a) Commitments made and outstanding for loans and investments are Nil (Previous Year-Nil).
b) The Company has committed ` 99,946 Thousand (net of advances) (Previous Year ` 65,116 Thousand)
for the purchase of fixed assets.
3. Claims, less reinsurance, paid to claimants in/outside India during the year under various class of
business are as under:
(` in '000)
st
4. Age-wise breakup of claims outstanding on Gross basis under various class of business as at 31 March,
2019 is as under: (` in '000)
st
5. Claims settled and remaining unpaid for a period of more than six months as at 31 March, 2019 is Nil
(Previous Year Nil).
6. (a) Premium less reinsurances written during the year under various classes of business is as under:
(` in '000)
(d) There are no insurance contracts where the claim payment period exceeds four years.
71
7. The Company has debt investments (Face value ` 2,000,000 thousand) in the securities of IL&FS Group.
The Company has filed an intervention Application with NCLAT owing to default in payments by IL&FS group
companies. Pursuant to the NCLAT order dated 25-02-2019, the Company has not classified these investments
as NPA. However, as a matter of prudence, an amount of ` 400,000 thousand has been provided towards these
investments.
st st
8. All the investments held by the company as at 31 March, 2019 and 31 March, 2018 are performing
investments.
9. Value of Contracts in relation to Investments for:
(` in '000)
st st
Particulars Year ended 31 March, 2019 Year ended 31 March, 2018
Purchases where deliveries are pending Nil Nil
Sales where payments are overdue Nil Nil
10. Fair value of Investments in Mutual Fund & listed Equity shares as at 31st March, 2019 is ` 49,697
Thousand (previous year ` 1,042,359 Thousand) and historical cost of the same is ` 58,135 Thousand
(Previous year ` 1,048,135 Thousand).
11. Sector wise business executed by the company is as follows:
(` in '000)
st st
Year ended 31 March, 2019 Year ended 31 March, 2018
Gross No. of Number of % of Gross No. of Number of % of
Sector Direct Policies lives covered Gross Direct Policies lives covered Gross
Premium Issued (In (Estimated) Direct Premium Issued (In (Estimated) Direct
thousand) (In thousand) Premium thousand) (In thousand) Premium
Year ended 31st March, 2019 Year ended 31st March, 2018
Particulars Managing Whole-time Managing Whole-time
Director Directors Director Directors
Salaries and Allowances 14,074 16,156 14,414 12,091
Contribution to Provident Fund 508 468 491 538
Total 14,582 16,624 14,905 12,629
Note :-
a) The above excludes provision for leave encashment and the gratuity contributions which are
determined actuarially on an overall basis and accordingly have not been considered in the above
information.
b) The remuneration as above has been approved by the IRDAI.
72
13. Summary of Financial Statements
(` in Lacs)
73
14. Performance Ratios:
S. No. Particular Year ended 31st March, 2019 Year ended 31st March, 2018
1 Gross Direct Premium Growth Rate 24.32% 1.23%
Fire 19.02% -0.51%
Marine Total 10.06% 12.96%
Miscellaneous Total 25.00% 1.03%
Marine Cargo 10.71% 13.81%
Marine Hull -6.85% -5.23%
Motor OD 6.68% -2.14%
Motor TP 10.55% 4.28%
Motor Total 8.62% 0.98%
Engineering -13.76% 26.16%
Aviation 0.99% -5.71%
Workmen Compensation 0.50% -1.45%
Personal Accident 57.91% 51.28%
Public/Product Liability 26.04% 6.69%
Health 19.79% 29.62%
Crop 79.53% -14.17%
Other Miscellaneous 6.11% 0.82%
2 Gross Direct Premium to Net Worth Ratio 3.11 3.00
3 Growth rate of Net Worth 20.19% 11.23%
4 Net Retention Ratio 59.23% 64.01%
Fire 14.62% 13.83%
Marine Total 42.15% 40.03%
Miscellaneous Total 62.24% 67.95%
Marine Cargo 42.75% 40.47%
Marine Hull 23.33% 28.42%
Motor OD 84.78% 84.73%
Motor TP 84.85% 84.71%
Motor Total 84.82% 84.72%
Engineering 25.65% 19.82%
Aviation 1.08% 6.27%
Workmen Compensation 94.87% 94.86%
Personal Accident 80.96% 85.82%
Public/Product Liability 61.23% 69.13%
Health 92.11% 91.40%
Crop 14.89% 15.32%
Other Miscellaneous 37.92% 38.29%
5 Net Commission Ratio 5.10% 3.10%
Fire -28.45% -10.39%
Marine Total -3.09% -2.71%
Miscellaneous Total 5.70% 3.37%
Marine Cargo -3.38% -3.00%
Marine Hull 13.83% 8.15%
Motor OD 18.67% 12.52%
Motor TP -1.65% -1.94%
Motor Total 8.28% 5.26%
Engineering 24.77% -1.89%
Aviation -208.63% -61.20%
Workmen Compensation 20.31% 14.94%
Personal Accident 12.13% 9.37%
Public/Product Liability 23.62% 11.43%
Health 6.32% 6.20%
Crop -27.82% -39.38%
Other Miscellaneous 7.74% 0.32%
6 Expense of Management to Gross Direct Premium Ratio 14.94% 18.67%
7 Expense of Management to Net Written Premium Ratio 24.97% 28.78%
8 Net Incurred Claims to Net Earned Premium 88.29% 82.89%
9 Combined Ratio 106.69% 105.52%
10 Technical Reserves to Net Premium Ratio 1.52 1.55
11 Underwriting Balance Ratio -7.41% -8.44%
FIRE 52.90% -8.42%
MARINE 29.25% 28.05%
MISCELLANEOUS -8.77% -9.11%
12 Operating Profit Ratio 3.48% 3.83%
13 Liquid Assets to Liabilities Ratio 0.32 0.10
14 Net Earning Ratio 4.27% 5.18%
15 Return on Net Worth Ratio 7.93% 10.10%
16 Available Solvency Margin (ASM) to Required Solvency Margin (RSM) Ratio 1.66 1.62
17 NPA Ratio
Gross NPA Ratio - -
Net NPA Ratio - -
74
st st
Equity Holding Pattern for Non-Life Insurers As at 31 March, 2019 As at 31 March, 2018
1 No. of shares 274,218,300 269,321,500
2 Percentage of shareholding (Indian/Foreign) 51/49 51/49
3 % of Government holding (in case of public
sector insurance companies) N. A. N. A.
4 Basic and diluted EPS before extraordinary
items (net of tax expense) for the year (`) 6.54 7.03
5 Basic and diluted EPS after extraordinary
items (net of tax expense) for the year (`) 6.54 7.03
6 Book value per share (`) 82.18 69.62
# All ratios are related to Indian operations as Company does not have any foreign operations.
15. Pursuant to IRDAI Circular no. IRDAI/F&A/CIR/CPM/010/01/2017 dated 12th Jan, 2017, Investments have
been bifurcated into the policyholders' and shareholders' fund on notional basis. Accordingly, Investments
are bifurcated in Schedule 8 “Investments-Shareholders” and in Schedule 8A “Investments-Policyholders”.
16. Details of certain expenses as required by IRDAI are as under: (` in '000)
Particulars Year ended 31st March, 2019 Year ended 31st March, 2018
Outsourcing Expenses (Manpower) 250,147 188,905
Business Development 323,739 860,654
Marketing and Support Services - 2,459,596
17. No depreciation is allocable to the Profit and Loss Account based on the 'use' of the asset.
18. Details of penal actions by various Government Authorities during the year are as under:
(` in '000)
Non-
S. compliance/ Penalty
Penalty Penalty waived/
Authority Violation
No. Awarded Paid Reduced
Penalties in all other sub headings were “Nil” during the FY 2017-18.
75
19. Analysis of the Unclaimed Amount of Policyholders.
a) Age wise analysis of unclaimed amount
(` in '000)
st
Statement showing the Age-wise Analysis of the Unclaimed Amount of the Policyholders as on 31 March, 2019
AGE-WISE ANALYSIS
S. Total
No. Particulars Amount 0-6 7-12 13-18 19-24 25-30 31-36 36-120
months months months months months months months
C Any excess
collection of the
premium/tax or
any other charges
which is refundable
to the policyholders
either as terms of 2,056 - - - - - - 2,056
conditions of the
policy or as per law
or as may be
directed by the
Authority but not
refunded so far
Particulars Year ended 31st March, 2019 Year ended 31st March, 2018
Opening balance of unclaimed amount 2,84,987 424,215
Add. Amount transferred to unclaimed amount 52,208 54,141
Add. Cheque issued out of the unclaimed amount
but non encashed by the policyholders
(To be included only when the cheques are stale) - -
Add. Investment Income 21,382 14,003
Less. Amount of Claims paid during the year 53,283 206,805
Less: Amount transferred to SCWF
(net of claims paid in respect of amounts
transferred earlier) 16,476 567
Closing balance of unclaimed amount 288,818 284,987
76
20. Management expenses are apportioned to Revenue Accounts on the basis of Net Premium as per
Accounting Policy on 'Allocation of Operating Expenses' (Schedule 16 A (6)). Detail of apportioned
expenses is furnished in Schedule 4 (Operating Expenses relating to Insurance business).
21. As certified by Appointed Actuary, no premium deficiency has been provided in the current year
(previous years ` Nil) in the accounts.
22. In accordance with the requirements of the IRDAI circular dated March 18, 2003 and based on
recommendations made at General Insurance Council meeting held on February 4, 2005 and as per letter
no. HO/MTD/Solatium Fund/2010/482 dated July 26, 2010, from The New India Assurance Co. Ltd.
(Scheme administrator), the Company has provided 0.1% of the total Motor TP premium of the Company
towards solatium fund.
23. Direct commission paid under schedule 3 includes rewards paid to insurance agent and insurance
intermediaries as per IRDAI (Payment of commission or remuneration or rewards to insurance agents
and insurance intermediaries) Regulations, 2016 dated 14th December, 2016 and IRDAI Guidelines on
st
Motor Insurance Service providers dated 31 August, 2017.
Payable on separation @ 15 days pay for each completed year of service to eligible
Gratuity
employees who render continuous service of five years or more.
Payable on encashment during the service or on separation to the eligible
Leave Encashment
employees who have accumulated earned leave.
The Company pays fixed contribution to Provident Fund Trust. Contribution to Family
Pension Scheme is paid to appropriate authority. The contribution for ` 84,007
Provident Fund
thousand (previous year ` 63,613 thousand) has been recognized as expense in the
accounts.
b. Other disclosures as required under AS-15 (Revised 2005) on “Employee Benefits” in respect of
defined benefit obligations are as under:
i. Expenses recognized in Profit & Loss Account
(` in '000)
Gratuity Leave Encashment
Particulars
2018-19 2017-18 2016-17 2015-16 2014-15 2018-19 2017-18 2016-17 2015-16 2014-15
Current Service Cost 19,887 19,253 13,112 11,950 10,420 50,053 39,291 29,124 24,124 20,198
Interest cost on
benefit obligation 10,952 9,336 6,412 5,797 5,090 17,168 14,752 10,591 9,653 8,559
Expected return on
plan assets (10,181) (8,255) (6,001) (4,677) (3,539) - - - - -
77
ii. The amount recognized in the Balance Sheet:
(` in '000)
* Gratuity Fund is managed by Life Insurance Corporation of India (LIC). Individual investment wise details of the plan
assets are not being provided by LIC.
78
v. Actuarial Assumptions
Principal assumptions used for actuarial valuation are:
Discount rate 7.63% 7.60% 7.25% 7.75% 7.75% 7.63% 7.60% 7.25% 7.75% 7.75%
Future salary escalation 6.50% 6.00% 6.00% 6.00% 6.00% 6.50% 6.00% 6.00% 6.00% 6.00%
IALM IALM
Mortality rate IALM (2006-08) IALM (2006-08)
(2012-14) (2012-14)
Withdrawal rate 4% 1 to 3% 1 to 3% 1 to 3% 1 to 3% 4% 1 to 3% 1 to 3% 1 to 3% 1 to 3%
Expected rate of return on
plan assets 7.42% 7.51% 7.75% 8.50% 8.75% - - - - -
The estimate of future salary increase considered in actuarial valuation, take into account of inflation,
seniority, promotion and other relevant factors, such as supply and demand in the employment market.
79
(` in '000)
80
(` in '000)
Assets and Liabilities of the Company, which are not identifiable with any of the segment, have been classified
as Unallocable.
b) Geographical Segment
Since the Company's entire business is conducted within India, there is no reportable Geographical
Segmentation for the year.
81
3. Accounting Standard- 18 “Related Party Disclosures”
The transactions between the company and its related parties during the year are as under:
(` in '000)
Name of the Nature of Related Description of Nature Year ended Year ended
Related Parties Party Relationship of Transactions 31st March, 2019 31st March, 2018
Premium accounted from direct business 726,212 674,765
Indian Farmers Promoters with Claims paid on direct basis 295,747 127,699
Fertiliser more than 20% Payment of Rent and other expenses 210,175 193,299
Cooperative Ltd Voting rights Deposit of Insurance Premium 2,500 2,500
Amount Payable / (Receivable) at the Balance Sheet Date 88 576
Premium accounted from direct business 80,147 79,904
Indian Potash Associate of Claim paid on direct basis 13,129 92,864
Limited Promoters with Deposit of Insurance Premium 100 100
more than 20% Payment of Rent and other expenses 413 -
Voting rights
Amount Payable / (Receivable) at the Balance Sheet Date (509) (150)
Tokio Marine Asia Promoters with Claim/Reimbursement of Expenses 241 81
Pte Ltd (formerly more than 20%
Millea Asia Pte Ltd) Voting rights Payment of Fee 3,127 3,002
Premium on Cession of Re-insurance Premium 303,859 310,479
Tokio Marine Associate of Commission Earned on Premium Ceded 77,476 78,858
& Nichido Fire Promoters with Losses Recovered from Re-insurer 295,056 885,762
Insurance Co Ltd more than 20% Claim/Reimbursement of Expenses - 124
Voting rights
Amount Payable / (Receivable) at the Balance Sheet Date 192,406 116,769
Associate of Premium on Cession of Re-insurance Premium - 76
Tokio Marine Kiln Promoters with Commission Earned on Premium Ceded - 4
Singapore Pte Ltd more than 20% Losses Recovered from Re-insurer 145 -
Voting rights Amount Payable / (Receivable) at the Balance Sheet Date (330) (1,770)
Premium on Cession of Re-insurance Premium 233,256 182,778
Tokio Marine Associate of Commission Earned on Premium Ceded 34,286 16,420
Insurance Promoters with Losses Recovered from Re-insurer 96,758 64,880
Singapore Ltd more than 20% Payment of Fees 25 -
Voting rights
Amount Payable / (Receivable) at the Balance Sheet Date 51,063 11,147
Associate of
Tokio Marine
Promoters with Amount Payable / (Receivable) at the Balance Sheet Date 116 116
Europe Insurance
more than 20%
Ltd.
Voting rights
PT Asuransi Associate of
Tokio Marine Promoters with
Payment of Fee - 121
Indonesia more than 20%
Voting rights
TM Claim Associate of Claim/Reimbursement of Expenses 16,228 10,192
Services Inc. Promoters with
more than 20%
Voting rights Payment of Fee 4,714 2,495
82
The Tokio Marine Associate of
Claim Services Promoters with Payment of Fee 89 16
Co Ltd more than 20%
Voting rights
83
Indian Farm Associate of Premium accounted from direct business 2,275 1,847
Forestry Promoters with
Claims paid on direct basis 3 30
Development more than 20%
Cooperative Ltd. Voting rights Payment for CSR activity- IFFDC being implementation agency 35,500 44,500
IFFCO Employee Associate of
Premium accounted from direct business 101,791 -
Benevolent Trust Promoters with
more than 20%
Voting rights Claims paid on direct basis 91,997 -
(i) Amount recovered/recoverable and appearing in the revenue account in regard to sub leases is
` 1,193 thousand. (Previous year ` 5,058 thousand).
(ii) In respect of premises taken on operating lease, total of future minimum lease payments under non-
cancellable operating lease and amount recognized in P&L account is as under:-
(` in '000)
st st
Particulars Year ended 31 March, 2019 Year ended 31 March, 2018
Not later than one year 3,34,281 291,396
Later than one year and not later than five years 674,643 690,100
Later than five years 168,025 112,983
Lease payment recognized in P&L account 376,872 345,231
84
6. Accounting Standard - 22 “Accounting for taxes on income”
The break-up of deferred tax assets and liabilities into major components at the year-end is as below:
(` in '000)
Year ended 31st March, 2019 Year ended 31st March, 2018
Particulars
Liabilities Assets Liabilities Assets
Net increase in Deferred Tax asset for the year is ` 216,100 thousand has been recognized in the Profit & Loss
Account (previous year decrease was ` 77,200 Thousand).
2. On the basis of information received from 'enterprises' regarding their status under the Micro, Small and
Medium Enterprises Development Act, 2006 there is no Micro, Small and Medium Enterprises to which
the Company owes dues, which are outstanding for more than 45 days during the year ended 31.03.2019
and hence disclosure relating to amounts unpaid as at the year-end together with interest paid/payable
as required under the said Act have not been given.
For and on behalf of Board of Directors
K. Srinivasa Gowda
Chairman (DIN 00059811)
Warendra Sinha
Managing Director (DIN 03518403)
Anamika Roy Rashtrawar
Director (DIN 07870227)
Jun Matsui
Director (DIN 0008018422)
Sanjeev Chopra
Chief Financial Officer
Place : New Delhi Amit Jain
Dated : 29th April, 2019 Company Secretary
85
“Best Healthcare Insurance Provider” in 2018
by
Navbharat Group
86
MANAGEMENT
REPORT
87
As required by the IRDAI (Preparation of Financial Statements and Auditor's Report of Insurance Companies)
st
Regulations' 2002, the following Management Report for the year ended 31 March' 2019 is submitted.
1. The Company received regulatory approval for carrying general insurance business in India vide
Registration Number 106 dated 04th December, 2000. It is confirmed that the registration granted to the
Company by the IRDAI is valid.
st
2. It is confirmed that all the dues payable to the statutory authorities' up to 31 March, 2019 were duly paid.
st
3. The shareholding pattern as on 31 March, 2019 was as under which is in accordance with the statutory
requirements:
Year ended Year ended
st st
31 March, 2019 31 March, 2018
Shareholders ` In '000 % ` In '000 %
Indian:
Indian Farmers Fertiliser Cooperative Ltd. 1,398,513 51.00 1,373,540 51.00
Sub-Total 1,398,513 51.00 1,373,540 51.00
Foreign:
Tokio Marine Asia Pte. Ltd. 1,343,670 49.00 1,319,675 49.00
Total 27,42,183 100.00 2,693,215 100.00
During the year, the promoters - Indian Farmers Fertiliser Cooperative Ltd. and Tokio Marine Asia Pte. Ltd. had
introduced the share capital of ` 48,968 thousand in the existing proportion of 51% & 49% respectively. The
shareholding pattern of the company during the year are in accordance with the statutory and regulatory
provisions.
4. It is confirmed that no part of funds of the Policyholders were directly or indirectly invested outside India
during the year.
5. It is confirmed that solvency margin, as required under the Insurance Act'1938, IRDAI Act'1999 and
Regulations made there under, has been maintained.
6. It is certified that the value of the assets has been reviewed on the date of the Balance Sheet and that in
st
the opinion of the management, the assets set forth in the Balance Sheet as on 31 March, 2019 are
shown in the aggregate at amounts not exceeding their realizable or market value except investment in
subsidiary and debt securities which are measured at cost/amortized cost.
7. The Company has varied risk exposure in different classes of business depending upon the risk hazard
and retention capacity of the Company. On overall basis Company is exposed to catastrophe risks. The
Company has a strategy to have an effective control on overall risk exposure by working out
accumulations per vessel in marine class of business and on geographical basis for property business.
The Company has filed its reinsurance program with IRDAI as required by its regulations. The Company
also has Excess of Loss and Catastrophic Cover in accordance with the program filed with IRDAI.
8. It is certified that there were no operations of the company in any other country during the year ended
st
31 March, 2019.
9. The details required under the IRDAI Regulations are annexed to this report as below: -
(a) Ageing analysis of claims outstanding during the preceding five years, please refer Annexure 1.
(b) Average claims settlement time during the preceding five years, please refer Annexure 2.
(c) Details of claims intimated, please refer Annexure 3.
88
10. The investments of the Company are mainly in debt securities including Government Securities. As per
accounting policy adopted for valuation, debt securities including Government Securities are
considered as held to maturity investments and valued at cost subject to amortization. The other
investments are measured as below: -
(a) Investments in units of mutual funds are valued at Net Asset Value (NAV).
(b) Equity securities listed and actively traded are stated at fair value, being the last quoted closing price
on the National Stock Exchange (NSE). However, in case of any stock not being listed at NSE, the
same is valued based on the last quoted closing price on Bombay Stock Exchange (BSE).
(c) Any unrealized gain/loss arising due to change in fair value of mutual fund investments and listed
equity shares is accounted in 'Fair Value Change Account' and carried forward in the Balance Sheet
and is not available for distribution.
The market value of the investments has been ascertained on the basis of the guidelines issued by IRDAI
and the same is given hereunder:
(` in '000)
11. The investments held by the Company carry sufficient liquidity since these are normally traded in the
secondary market and have adequate security in terms of recovery of principal and interest. During the
year, the Company earned an Investment income of ` 5,773,616 thousand (Previous year ` 5,348,967
thousand).
12. The management of the Company certifies that: -
a) In preparation of financial statements, the applicable accounting standards, principles and policies
have been followed and there is no material departure as compared to previous year.
b) The Management has adopted accounting policies and followed them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of financial year and of the operating profit of the revenue
accounts and of profit for the year ended on that date.
c) The Management has taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the applicable provisions of the Insurance Act, 1938, the Companies Act,
2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities.
d) The Management has prepared the Financial Statement on a going concern basis.
e) The Management has an Internal Audit system commensurate with the size and nature of its
business, which is in effective operation during the year.
89
13. Payments made to companies and organizations in which directors are interested are as under:
(` in '000)
K. Srinivasa Gowda
Chairman (DIN 00059811)
Warendra Sinha
Managing Director (DIN 03518403)
Jun Matsui
Director (DIN 0008018422)
Sanjeev Chopra
Chief Financial Officer
90
Annexure 1
Fire 36,526 8,86,962 9,19,482 59,48,966 4,31,714 82,23,650 22 134 176 372 390 1,094
Marine Cargo 28,723 2,72,772 1,13,225 2,19,300 32,500 6,66,520 146 601 219 264 86 1,316
Marine Hull 1,060 11,865 4,145 2,23,875 68,360 3,09,305 2 4 2 5 16 29
Motor – OD 3,99,161 8,83,709 1,47,427 1,02,498 21,229 15,54,024 8,625 7,508 1,064 553 144 17,894
Motor – TP 604 2,03,098 9,53,807 81,97,995 23,75,899 1,17,31,403 3 760 3,052 21,943 5,735 31,493
Engineering 14,035 81,872 69,875 2,52,389 1,44,600 5,62,771 40 143 122 293 371 969
Aviation - - - 100 2,33,270 2,33,370 - - - 1 9 10
Workmen Compensation 3,603 21,808 13,778 18,823 4,578 62,590 36 121 49 75 35 316
Personal Accident 12,012 339,840 1,67,009 64,269 2,354 5,85,484 145 700 425 261 9 1,540
Product/Public Liability 196 9,437 67,013 42,825 11,362 1,30,833 2 19 14 23 14 72
Health 1,07,116 4,22,768 91,144 36,939 340 6,58,307 2,201 7,817 2,131 290 1 12,440
Crop - 61,36,758 11,03,262 6,09,668 5,37,021 83,86,709 - 190 99 350 61 700
Other Misc. 21,439 2,54,158 2,43,793 5,32,160 79,119 11,30,669 120 1,315 618 444 113 2,610
Total 6,24,475 95,25,047 38,93,960 162,49,807 39,42,346 3,42,35,635 11,342 19,312 7,971 24,874 6,984 70,483
st
Year ending 31 March, 2018
Claims Outstanding (` in '000) No. of Claims Outstanding
Segment
Less than 30 Days to 6 Months 1 Year to 5 Years Total Less than 30 Days to 6 Months 1 Year to 5 Years Total
30 Days 6 Months to 1 Year 5 Years and Above 30 Days 6 Months to 1 Year 5 Years and Above
Fire 44,823 55,17,550 10,96,036 13,27,401 2,81,974 82,67,783 20 93 173 481 636 1,403
Marine Cargo 28,953 1,57,686 94,562 2,75,495 70,336 6,27,032 124 517 259 360 252 1,512
Marine Hull 3,930 5,90,110 2,724 32,570 87,714 7,17,047 4 3 5 3 48 63
Motor – OD 4,03,757 7,92,902 3,20,261 2,92,098 17,408 18,26,427 6,436 6,845 2,246 1,286 255 17,068
Motor – TP 74,984 1,91,052 9,19,559 72,80,744 20,15,030 1,04,81,369 4 778 3,541 23,716 9,212 37,251
Engineering 16,913 1,29,727 1,40,063 3,19,937 1,75,548 7,82,187 33 225 105 295 639 1,297
Aviation - - - 1,230 2,37,730 2,38,960 - - - 3 17 20
Workmen Compensation 8,466 15,864 7,678 15,615 5,259 52,883 66 159 48 67 38 378
Personal Accident 18,529 1,46,324 28,207 22,090 2,369 2,17,520 167 698 299 267 85 1,516
Product/Public Liability 100 16,477 22,409 41,956 14,047 94,990 4 23 27 85 41 180
Health 1,95,708 2,76,309 28,329 2,02,808 2,401 7,05,555 6,172 7,608 966 12,560 21 27,327
Crop - 1,18,09,481 - 9,24,099 54,047 1,27,87,626 - 24 - 336 1 361
Other Misc. 52,800 4,37,296 2,39,320 3,80,033 98,577 12,08,026 144 963 673 453 125 2,358
Total 8,48,964 2,00,80,777 28,99,147 1,11,16,076 30,62,440 3,80,07,405 13,174 17,936 8,342 39,912 11,370 90,734
93
91
st
Year ending 31 March, 2017
Claims Outstanding (` in '000) No. of Claims Outstanding
Segment
Less than 30 Days to 6 Months 1 Year to 5 Years Total Less than 30 Days to 6 Months 1 Year to 5 Years Total
30 Days 6 Months to 1 Year 5 Years and Above 30 Days 6 Months to 1 Year 5 Years and Above
Fire 36,269 1,482,107 870,650 1,202,709 235,593 3,827,328 15 151 132 491 509 1,298
Marine Cargo 92,286 418,969 112,149 214,930 174,303 1,012,637 192 677 380 395 245 1,889
Marine Hull - 22,642 3,400 157,552 88,455 272,050 - 5 5 5 49 64
Motor – OD 349,139 810,308 251,623 116,715 11,134 1,538,919 7,831 9,117 2,315 894 126 20,283
Motor – TP 57,590 240,309 962,608 5,940,902 1,941,965 9,143,374 10 954 3,959 22,520 9,989 37,432
Engineering 159,881 166,276 144,215 315,762 145,354 931,487 47 191 86 474 404 1,202
Aviation - - - 1,246 238,227 239,473 - - - 4 23 27
Workmen Compensation 3,834 20,331 15,716 14,135 5,929 59,946 59 135 68 74 34 370
Personal Accident 11,247 38,627 58,131 28,021 1,460 137,486 145 457 605 476 83 1,766
Product/Public Liability 12,598 28,539 17,426 63,552 37,105 159,220 5 23 23 54 46 151
Health 354,864 440,201 141,438 114,528 734 1,051,764 13,124 51,461 14,423 1,544 4 80,556
Crop 704,425 4,720,618 557,834 590,219 25 6,573,121 1 52 30 104 1 187
Other Misc. 18,936 190,722 202,449 230,179 51,065 693,352 115 521 286 311 95 1,328
Total 1,801,068 8,579,648 3,337,639 8,990,451 2,931,349 25,640,156 21,544 63,744 22,312 27,346 11,608 146,553
Fire 41,501 704,405 301,030 925,254 201,648 2,173,838 13 127 146 542 389 1,217
Marine Cargo 22,860 249,354 94,198 192,474 101,589 660,475 118 566 255 350 231 1,520
Marine Hull - 600 63,600 72,608 76,746 213,554 - 2 4 16 45 67
Motor – OD 233,571 474,692 127,397 60,150 3,851 899,660 6,500 5,530 910 428 81 13,449
Motor – TP 10,894 149,681 846,758 4,466,962 1,619,995 7,094,290 6 648 3,263 19,099 9,465 32,481
Engineering 17,663 169,980 178,460 291,983 149,753 807,840 27 147 71 559 298 1,102
Aviation 965 - 96 5,057 274,546 280,664 1 - 2 7 18 28
Workmen Compensation 3,633 18,823 9,072 22,602 6,492 60,623 33 164 44 80 30 351
Personal Accident 5,630 30,743 18,198 27,575 14,386 96,532 94 408 250 445 87 1,284
Product/Public Liability - 8,274 61,342 54,091 767,485 891,193 - 14 43 25 53 135
Health 174,975 270,446 29,785 59,662 1,657 536,525 9,113 21,374 1,104 751 19 32,361
Crop - 395,070 1,760 587,709 25 984,564 - 16 3 106 1 126
Other Misc. 26,268 153,149 149,854 194,865 115,916 640,051 155 372 190 319 72 1,108
Total 537,960 2,625,217 1,881,550 6,960,992 3,334,089 15,339,808 16,059 29,368 6,285 22,727 10,790 85,229
92
Year ending 31st March, 2015
Claims Outstanding (` in '000) No. of Claims Outstanding
Segment
Less than 30 Days to 6 Months 1 Year to 5 Years Total Less than 30 Days to 6 Months 1 Year to 5 Years Total
30 Days 6 Months to 1 Year 5 Years and Above 30 Days 6 Months to 1 Year 5 Years and Above
Fire 60,184 482,737 591,664 1,767,404 197,458 3,099,447 15 88 162 759 165 1,189
Marine Cargo 527,180 130,985 77,840 217,181 101,859 1,055,044 126 552 196 153 218 1,245
Marine Hull 800 10,907 73,519 39,592 58,765 183,584 1 7 7 23 34 72
Motor – OD 241,658 472,279 194,369 91,063 3,946 1,003,316 6,505 6,921 1,686 660 76 15,848
Motor – TP 9,594 178,737 636,424 4,416,499 1,376,709 6,617,963 8 766 2,748 20,086 9,090 32,698
Engineering 11,443 90,431 78,548 718,221 141,485 1,040,128 16 119 66 655 173 1,029
Aviation 196 1,486 - 251,270 33,896 286,848 4 5 - 34 17 60
Workmen Compensation 3,251 11,066 6,169 18,048 3,153 41,687 30 136 44 71 25 306
Personal Accident 4,510 26,599 23,891 36,351 1,008 92,359 82 484 357 367 108 1,398
Product/Public Liability 1,100 910 170 51,280 10,461 63,921 1 5 1 28 16 51
Health 138,448 144,231 34,127 85,113 1,578 403,497 2,443 3,166 809 762 15 7,195
Other Misc.
755,979 434,137 520,049 1,300,052 542,221 3,552,438 125 386 221 344 65 1,141
including Crop
Total 1,754,343 1,984,506 2,236,768 8,992,074 2,472,541 17,440,232 9,356 12,635 6,297 23,942 10,002 62,232
Annexure 2
Details of Average Claim Settlement Time for the Preceding Five Years
Period For the year ended For the year ended For the year ended For the year ended For the year ended
31st March, 2019 31st March, 2018 31st March, 2017 31st March, 2016 31st March, 2015
No. of Average No. of Average No. of Average No. of Average No. of Average
Product claims Settlement claims Settlement claims Settlement claims Settlement claims Settlement
settled time (Days) settled time (Days) settled time (Days) settled time (Days) settled time (Days)
Fire 1,271 326 1,020 225 1,146 217 876 217 792 273
Marine Cargo 19,541 55 17,692 62 19,342 57 20,347 47 16,458 52
Marine Hull 33 1,433 16 519 24 501 16 387 39 485
Motor - OD 4,26,433 33 4,04,295 44 4,01,223 48 3,39,327 39 3,36,751 40
Motor TP 21,195 840 18,323 779 13,671 675 14,962 639 13,232 666
Engineering 1,153 263 1,470 144 1,016 197 904 187 872 243
Aviation 6 1,415 10 2,243 3 2,305 37 903 27 896
Workmen Compensation 565 298 562 274 456 308 305 277 399 161
Personal Accident 5,320 176 4,968 171 4,231 185 3,919 188 3,562 211
Product/Public Liability 55 743 51 1,306 38 578 48 427 25 789
Health 2,93,104 60 2,90,793 83 3,04,965 91 2,02,556 61 73,723 56
Crop 5,596 30 2,071 46 334 90 682 68 203 130
Other Misc 21,876 59 12,624 67 7,601 85 5,659 89 4,437 112
Note:
1) The above ageing does not include Motor third party claims which have to be settled through MACT and other judicial bodies.
2) Settlement delay is calculated from date of reporting.
Annexure 3
Details of Claims Intimated for Preceding Five Years (` in '000)
Period For the year ended For the year ended For the year ended For the year ended For the year ended
31st March, 2019 31st March, 2018 31st March, 2017 31st March, 2016 31st March, 2015
Product Claims Amount Claims Amount Claims Amount Claims Amount Claims Amount
Intimated Intimated Intimated Intimated Intimated
Fire 1,334 4,98,738 1,203 3,41,351 1,347 4,20,047 1,178 3,25,691 902 2,75,636
Marine Cargo 20,186 6,55,755 18,424 5,48,221 20,808 6,37,217 21,333 5,49,604 17,284 5,04,219
Marine Hull 16 6,624 19 8,966 24 19,738 17 32,365 34 18,146
Motor - OD 4,46,359 89,00,278 4,15,828 62,59,841 4,19,915 71,97,864 3,48,683 69,32,784 3,49,021 55,85,795
Motor - TP 17,843 29,87,431 19,182 31,56,926 19,395 36,52,900 16,507 31,01,852 15,074 27,72,694
Engineering 1,442 2,52,642 1,790 1,64,446 1,196 2,01,540 1,034 1,42,935 853 1,49,976
Aviation 2 77 - - - - 11 175 29 816
Workmen Compensation 1,107 99,513 1,247 89,499 1,075 84,174 798 53,610 769 41,355
Personal Accident 7,210 15,09,220 6,164 4,80,073 6,399 4,18,644 5,258 2,40,670 4,442 2,18,660
Product/Public Liability 117 70,986 107 42,313 94 42,228 123 53,895 47 18,428
Health 3,09,859 81,49,800 2,87,777 52,56,513 4,26,660 58,88,959 2,46,521 49,06,506 90,022 32,62,105
Crop 6,290 57,16,018 2,394 44,37,638 383 27,99,274 683 5,69,422 235 2,74,738
Other Misc 26,187 9,38,813 15,102 7,51,221 8,926 5,67,821 6,451 4,75,104 5,119 4,78,234
93
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94
AUDITORS’
REPORT
ON THE CONSOLIDATED
FINANCIAL STATEMENTS
95
INDEPENDENT AUDITOR’S REPORT fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAI's
TO THE MEMBERS OF IFFCO TOKIO GENERAL
Code of Ethics. We believe that the audit evidence
INSURANCE COMPANY LIMITED
we have obtained is sufficient and appropriate to
Report on the Consolidated Financial Statements provide a basis for our audit opinion on the
consolidated financial statements.
Opinion
Information Other than the Consolidated
We have audited the accompanying consolidated
Financial Statements and Auditor's Report
financial statements of IFFCO TOKIO GENERAL
Thereon
INSURANCE COMPANY LIMITED (hereinafter
referred to as “the Holding Company”) and its The Holding Company's Board of Directors is
subsidiary (the Holding Company and its subsidiary responsible for the preparation of the other
together referred to as “the Group”) which information. The other information comprises the
comprise the Balance Sheet as at March 31, 2019, information included in the Board's Report
the consolidated Revenue Accounts of Fire, Marine including Annexures to Board's Report, but does
and Miscellaneous Insurance (collectively known as not include the consolidated financial statements
the 'Consolidated Revenue Accounts'), the and our auditor's report thereon.
Consolidated Profit and Loss Account and the
Consolidated Receipts and Payments Account for Our opinion on the consolidated financial
the year then ended, and a summary of the statements does not cover the other information
significant accounting policies and other and we do not express any form of assurance
explanatory information (hereinafter referred to as conclusion thereon.
“the consolidated financial statements”).
In connection with our audit of the consolidated
In our opinion and to the best of our information financial statements, our responsibility is to read
and according to the explanations given to us, the the other information and, in doing so, consider
aforesaid consolidated financial statements give whether the other information is materially
the information required by The Insurance Act, inconsistent with the consolidated financial
1938, the Insurance Regulatory and Development
statements or our knowledge obtained during the
Act, 1999 and Companies Act, 2013 (“the Act”) in
course of our audit or otherwise appears to be
the manner so required and give a true and fair
materially misstated.
view in conformity with the accounting principles
generally accepted in India, of the state of affairs of If, based on the work we have performed, we
the Group as at March 31, 2019, Its surplus in the conclude that there is a material misstatement of
consolidated Revenue Accounts, its consolidated this other information, we are required to report
Profit and its consolidated Receipts and Payments that fact. We have nothing to report in this regard.
Account for the year ended on that date.
Management's Responsibility for the
Basis for Opinion Consolidated Financial Statements
We conducted our audit of the consolidated
The Holding Company's Board of Directors is
financial statements in accordance with the
responsible for the preparation and presentation of
Standards on Auditing specified under section
these consolidated financial statements in term of
143(10) of the Act (SAs). Our responsibilities under
those Standards are further described in the the requirements of the Companies Act, 2013 (the
Auditor's Responsibilities for the Audit of the Act) that give a true and fair view of the
Consolidated Financial Statements section of our consolidated financial position, consolidated
report. We are independent of the Group in financial performance and consolidated cash flows
accordance with the Code of Ethics issued by the of the Group in accordance with the accounting
Institute of Chartered Accountants of India (ICAI) principles generally accepted in India, Insurance
together with the independence requirements that Act, 1938, Insurance Regulatory and Development
are relevant to our audit of the consolidated Authority (Preparation of Financial Statements and
financial statements under the provisions of the Act Auditor's Report of Insurance Companies)
and the Rules made thereunder, and we have Regulations, 2002 (the Regulations') including the
96
Accounting Standards specified under Section 133 could reasonably be expected to influence the
of the Act, read with Rule 7 of the Companies economic decisions of users taken on the basis of
(Accounts) Rules, 2016. The respective Board of these consolidated financial statements.
Directors of the companies included in the Group
are responsible for maintenance of adequate As part of an audit in accordance with SAs, we
accounting records in accordance with the exercise professional judgment and maintain
provisions of the Act for safeguarding the assets of professional skepticism throughout the audit. We
the Group and for preventing and detecting frauds also:
and other irregularities; selection and application Identify and assess the risks of material
of appropriate accounting policies; making misstatement of the consolidated financial
judgments and estimates that are reasonable and statements, whether due to fraud or error, design
prudent; and the design, implementation and and perform audit procedures responsive to those
maintenance of adequate internal financial risks, and obtain audit evidence that is sufficient
controls, that were operating effectively for and appropriate to provide a basis for our opinion.
ensuring accuracy and completeness of the The risk of not detecting a material misstatement
accounting records, relevant to the preparation and resulting from fraud is higher than for one resulting
presentation of the financial statements that give a from error, as fraud may involve collusion, forgery,
true and fair view and are free from material intentional omissions, misrepresentations, or the
misstatement, whether due to fraud or error, which override of internal control.
have been used for the purpose of preparation of
the consolidated financial statements by the Obtain an understanding of internal control
Directors of the Holding Company, as aforesaid. relevant to the audit in order to design audit
procedures that are appropriate in the
In preparing the consolidated financial statements, circumstances. Under section 143(3)(i) of the
the respective Board of Directors of the companies Companies Act, 2013, we are also responsible for
included in the Group are responsible for assessing expressing our opinion on whether the company
the ability of the Group to continue as a going has adequate internal financial controls system in
concern, disclosing, as applicable, matters related place and the operating effectiveness of such
to going concern and using the going concern basis controls.
of accounting unless the Board of Directors either
intends to liquidate the Group or to cease Evaluate the appropriateness of accounting policies
operations, or has no realistic alternative but to do used and the reasonableness of accounting
so. estimates and related disclosures made by
management.
The respective Board of Directors of the companies
included in the Group are responsible for Conclude on the appropriateness of management's
overseeing the financial reporting process of the use of the going concern basis of accounting and,
Group. based on the audit evidence obtained, whether a
material uncertainty exists related to events or
Auditor's Responsibilities for the Audit of the conditions that may cast significant doubt on the
Consolidated Financial Statements ability of the Group to continue as a going concern.
Our objectives are to obtain reasonable assurance If we conclude that a material uncertainty exists, we
about whether the consolidated financial are required to draw attention in our auditor's
statements as a whole are free from material report to the related disclosures in the consolidated
misstatement, whether due to fraud or error, and to financial statements or, if such disclosures are
issue an auditor's report that includes our opinion. inadequate, to modify our opinion. Our conclusions
Reasonable assurance is a high level of assurance, are based on the audit evidence obtained up to the
but is not a guarantee that an audit conducted in date of our auditor's report. However, future events
accordance with SAs will always detect a material or conditions may cause the Group to cease to
misstatement when it exists. Misstatements can continue as a going concern.
arise from fraud or error and are considered Evaluate the overall presentation, structure and
material if, individually or in the aggregate, they content of the consolidated financial statements,
97
including the disclosures, and whether the Other Matters
consolidated financial statements represent the
(a) We did not audit the financial statements/
underlying transactions and events in a manner
financial information of subsidiary, whose financial
that achieves fair presentation.
statements/financial information reflect total
st
Obtain sufficient appropriate audit evidence assets of ` 89,422 thousand as at 31 March, 2019,
regarding the financial information of the entities total revenues of ` 3,38,622 thousand and net cash
or business activities within the Group to express an receipts/(outflow) amounting to (` 2,696) thousand
opinion on the consolidated financial statements. for the year ended on that date, as considered in the
We are responsible for the direction, supervision consolidated financial statements. These financial
and performance of the audit of the financial statements/financial information have been
statements of such entities included in the audited by other auditor whose report has been
consolidated financial statements of which we are furnished to us by the Management and our opinion
the independent auditors. For the other entities on the consolidated financial statements, in so far as
included in the consolidated financial statements, it relates to the amounts and disclosures included in
which have been audited by other auditors, such respect of subsidiary and our report in terms of sub-
other auditors remain responsible for the direction, sections (3) and (11) of Section 143 of the Act,
supervision and performance of the audits carried insofar as it relates to the aforesaid subsidiary, is
out by them. We remain solely responsible for our based solely on the report of the other auditor.
audit opinion. Our opinion on the consolidated financial
statements, and our report on Other Legal and
We communicate with those charged with
Regulatory Requirements below, is not modified in
governance of the Holding Company and such
respect of the above matters with respect to our
other entities included in the consolidated financial
reliance on the work done and the report of the
statements of which we are the independent
other auditor.
auditors regarding, among other matters, the
planned scope and timing of the audit and Report on Other Legal and Regulatory
significant audit findings, including any significant Requirements
deficiencies in internal control that we identify
1. As required by Section 143(3) of the Act,
during our audit.
based on our audit we report that:
We also provide those charged with governance
(a) We have sought and obtained all the
with a statement that we have complied with
information and explanations which to the
relevant ethical requirements regarding
best of our knowledge and belief were
independence, and to communicate with them all
necessary for the purposes of our audit of the
relationships and other matters that may aforesaid consolidated financial statements.
reasonably be thought to bear on our
independence, and where applicable, related (b) In our opinion, proper books of account as
safeguards. required by law relating to preparation of the
aforesaid consolidated financial statements
Emphasis of Matter have been kept so far as it appears from our
Without qualifying our opinion, we draw attention examination of those books and the reports of
to the Note-B.I.b(iii) & Note- B.III(1) to the the other auditor.
Consolidated Financial Statements, stating that the (c) The Consolidated Balance Sheet, the
Subsidiary Company has filed an application with Consolidated Revenue Accounts, the
Insurance Regulatory and Development Authority Consolidated Profit and Loss Account and the
of India on 31-Jul-2018 for surrender of the Consolidated Receipts and Payments Account
Corporate Agency License Certificate with effect dealt with by this Report are in agreement
from 1-Aug-2018. Accordingly, financial statements with the relevant books of account
of the Subsidiary Company have been prepared maintained for the purpose of preparation of
based on the assumption that the Subsidiary the consolidated financial statements.
Company is not a going concern.
98
(d) In our opinion, the aforesaid consolidated (g) With respect to the other matters to be
financial statements comply with the included in the Auditor's Report in
Accounting Standards specified under accordance with Rule 11 of the Companies
Section 133 of the Act, read with Rule 7 of the (Audit and Auditor's) Rules, 2016, in our
Companies (Accounts) Rules, 2016 to the opinion and to the best of our information
extent applicable. and according to the explanations given to us:
(e) On the basis of the written representations i. The consolidated financial statements
received from the directors of the Holding disclose the impact of pending litigations on
st
Company as on 31 March, 2019 taken on the notes to consolidated financial position of
record by the Board of Directors of the the Group.
Holding Company and the report of the
statutory auditor of its subsidiary company, ii. The Group did not have any material
none of the directors of the Group companies foreseeable losses on long-term contracts
is disqualified as on 31st March, 2019 from including derivative contracts.
being appointed as a director in terms of iii. There were no amounts which were required
Section 164 (2) of the Act. to be transferred to the Investor Education
(f) With respect to the adequacy of the internal and Protection Fund by the Holding Company,
financial controls over financial reporting of and its subsidiary company.
the Company (“the Group”) and the operating
effectiveness of such controls, refer to our
separate report in Annexure-A.
99
ANNEXURE ‘A’ Standards on Auditing, issued by ICAI and deemed
to be prescribed under section 143(10) of the
The Annexure referred to in paragraph 2 (f) of Companies Act, 2013, to the extent applicable to an
Report on Other Legal and Regulatory audit of internal financial controls, both applicable
Requirements of our Report of even date to the to an audit of Internal Financial Controls and, both
members of IFFCO TOKIO General Insurance issued by the Institute of Chartered Accountants of
Company Limited (“the Group”) on the Internal India. Those Standards and the Guidance Note
Financial Controls required under Clause (i) of Sub- require that we comply with ethical requirements
section 3 of Section 143 of the Companies Act, and plan and perform the audit to obtain
2013 reasonable assurance about whether adequate
We have audited the internal financial controls over internal financial controls over financial reporting
financial reporting of IFFCO TOKIO General was established and maintained and if such
Insurance Company Limited (“the Group”) as of controls operated effectively in all material
March 31, 2019 in conjunction with our audit of the respects.
consolidated financial statements of the Company Our audit involves performing procedures to obtain
for the year ended on that date. audit evidence about the adequacy of the internal
Management's Responsibility for Internal financial controls system over financial reporting
Financial Controls and their operating effectiveness. Our audit of
internal financial controls over financial reporting
The Holding Company's Board of Directors are included obtaining an understanding of internal
responsible for establishing and maintaining financial controls over financial reporting, assessing
internal financial controls based on the internal the risk that material weakness exists, and testing
control over financial reporting criteria established and evaluating the design and operating
by the Company (“the Group”) considering the effectiveness of internal control based on the
essential components of internal control stated in assessed risk. The procedures selected depend on
the Guidance Note on Audit of Internal Financial the auditor's judgment, including the assessment
Controls over Financial Reporting issued by the of the risks of material misstatement of the
Institute of Chartered Accountants of India. These financial statements, whether due to fraud or error.
responsibilities include the design, implementation
and maintenance of adequate internal financial We believe that the audit evidence we have
controls that were operating effectively for obtained is sufficient and appropriate to provide
ensuring the orderly and efficient conduct of its basis for our audit opinion on the Company's
business, including adherence to company's (“the internal financial controls system over financial
Group”) policies, the safeguarding of its assets, the reporting.
prevention and detection of frauds and errors, the Meaning of Internal Financial Controls over
accuracy and completeness of the accounting Financial Reporting
records, and the timely preparation of reliable
financial information, as required under the A company's (“the Group”) internal financial
Companies Act, 2013. control over financial reporting is a process
designed to provide reasonable assurance
Auditors' Responsibility regarding the reliability of financial reporting and
Our responsibility is to express an opinion on the the preparation of financial statements for external
Company's (“the Group”) internal financial controls purposes in accordance with generally accepted
over financial reporting based on our audit. We accounting principles.
conducted our audit in accordance with the A company's (“the Group) internal financial control
Guidance Note on Audit of Internal Financial over financial reporting includes those policies and
Controls over Financial Reporting and the procedures that
100
1) Pertain to the maintenance of records that, in Also, projections of any evaluation of the internal
reasonable detail, accurately and fairly reflect financial controls over financial reporting to future
the transactions and dispositions of the assets periods are subject to the risk that the internal
of the company (“the Group”); financial control over financial reporting may
become inadequate because of changes in
2) P rov i d e re a s o n a b l e a s s u ra n c e t h at conditions, or that the degree of compliance with
transactions are recorded as necessary to the policies or procedures may deteriorate.
permit preparation of financial statements in
accordance with generally accepted Opinion
accounting principles, and that receipts and
expenditures of the company (“the Group”) In our opinion, the Company (“the Group”) has, in
are being made only in accordance with all material respects, an adequate internal financial
authorizations of management and directors controls system over financial reporting and such
of the company (“the Group”); and internal financial controls over financial reporting
were operating effectively as at March 31, 2019,
3) Provide reasonable assurance regarding based on the internal control over financial
p re ve nt i o n o r t i m e l y d e te c t i o n o f reporting criteria established by the Company (“the
unauthorized acquisition, use, or disposition Group”) considering the essential components of
of the company's (“the Group”) assets that internal control stated in the Guidance Note on
could have a material effect on the financial Audit of Internal Financial Controls Over Financial
statements. Reporting issued by the Institute of Chartered
Accountants of India.
Inherent Limitations of Internal Financial Controls
over Financial Reporting Other Matters
Because of the inherent limitations of internal Our aforesaid reports under Section 143(3)(i) of the
financial controls over financial reporting, including Act on the adequacy and operating effectiveness of
the possibility of collusion or improper the internal financial controls over financial
management override of controls, material reporting insofar as it relates to subsidiary company
misstatements due to error or fraud may occur and is based on the corresponding report of the auditor
not be detected. of such company incorporated in India.
101
Awards won by the Leadership Team
102
CONSOLIDATED
FINANCIAL
STATEMENTS
103
REGISTRATION NO. 106 DATED 4.12.2000
ST
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2019
(` in '000)
st st
S. No. Particulars Schedule As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4) (5)
SOURCES OF FUNDS
1 SHARE CAPITAL 5 2,742,183 2,693,215
2 RESERVES AND SURPLUS 6 19,823,367 16,072,751
3 FAIR VALUE CHANGE ACCOUNT
- Shareholders (1,881) (1,224)
- Policyholders (6,557) (4,552)
4 BORROWINGS 7 - -
Total 22,557,112 18,760,190
APPLICATION OF FUNDS
5 INVESTMENTS
Investments - Shareholders 8 19,858,799 15,146,567
Investments - Policyholders 8A 69,231,967 56,333,246
6 LOANS 9 - -
7 FIXED ASSETS 10 585,090 330,737
8 DEFERRED TAX ASSET (NET) 384,600 183,070
9 CURRENT ASSETS:
Cash and Bank Balances 11 730,195 1,909,770
Advances and Other Assets 12 9,939,538 11,858,962
Sub-Total (A) 10,669,733 13,768,732
10 CURRENT LIABILITIES 13 57,789,148 48,199,784
11 PROVISIONS 14 20,383,929 18,802,378
Sub-Total (B) 78,173,077 67,002,162
12 NET CURRENT ASSETS (C) = (A-B) (67,503,344) (53,233,430)
13 MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted) 15 - -
Total 22,557,112 18,760,190
Notes to Accounts 16
Schedule No. 1 to 16 form an integral part of the consolidated financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
104
REGISTRATION NO. 106 DATED 4.12.2000
CONSOLIDATED FIRE INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2019
(` in '000)
4 Premium Deficiency - -
Total (B) 221,693 520,376
APPROPRIATIONS
Transfer to Shareholders' Account 333,074 30,485
Schedule No. 1 to 16 form an integral part of the consolidated financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
105
REGISTRATION NO. 106 DATED 4.12.2000
CONSOLIDATED MARINE INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2019
(` in '000)
S. No. Particulars Schedule Year Ended Year Ended
31st March, 2019 31st March, 2018
(1) (2) (3) (4) (5)
1 Premiums earned (Net) 1 683,071 576,073
4 Premium Deficiency - -
APPROPRIATIONS
Schedule No. 1 to 16 form an integral part of the consolidated financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
106
REGISTRATION NO. 106 DATED 4.12.2000
st
CONSOLIDATED MISCELLANEOUS INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2019
(` in '000)
4 Premium Deficiency - -
APPROPRIATIONS
Schedule No. 1 to 16 form an integral part of the consolidated financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
107
REGISTRATION NO. 106 DATED 4.12.2000
ST
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2019
(` in '000)
S. No. Particulars Schedule Year Ended Year Ended
31st March, 2019 31st March, 2018
(1) (2) (3) (4) (5)
1 OPERATING PROFIT/(LOSS)
(a) Fire Insurance 333,074 30,485
(b) Marine Insurance 259,729 226,873
(c) Miscellaneous Insurance 827,185 993,743
1,419,988 1,251,101
2 INCOME FROM INVESTMENTS
(a) Interest, Dividend & Rent - Gross 1,359,513 1,286,925
(b) Profit on sale of Investments 36,609 91,785
Less : Loss on sale of Investments - -
1,396,122 1,378,710
3 OTHERS
a) Miscellaneous Income 38,598 18,756
b) Profit on sale of Fixed Assets 234 220
Total (A) 2,854,942 2,648,787
4 PROVISIONS (OTHER THAN TAXATION)
(a) For diminution in the value of investments 400,000 -
(b) For doubtful debts 7,078 -
(c) For doubtful Advances - -
5 OTHER EXPENSES
(a) Expenses other than those related to Insurance business - -
(b) Bad Debts/Advances written off - -
(c) Loss on sale of Fixed Assets - -
(d) Expenses on Corporate Social Responsibility (CSR) 60,077 57,783
(e) Fines & penalties 500 -
(f ) Expenses transferred from Policyholders' Account - 9,000
Total (B) 467,655 66,783
Profit Before Tax 2,387,287 2,582,004
Less: Provision for Taxation
Current Tax 645,885 665,410
Deferred Tax (64,830) 17,282
Add: Credit/(Debit) for Mat Entitlement - (1,247)
Less: Short/(Excess) provision for taxation for earlier years - -
Current Tax 143,348 (55,758)
Deferred Tax (136,700) 60,800
Profit After Tax 1,799,584 1,893,023
APPROPRIATIONS
(a) Interim dividends paid during the year - -
(b) Proposed final dividend - -
(c) Dividend distribution tax - -
(d) Transfer to any Reserves or other Accounts - -
Balance of Profit brought forward from last year 13,502,796 11,609,773
Balance carried forward to Balance sheet 15,302,380 13,502,796
Basic & Diluted Earnings per share
(Equity shares of face value of ` 10 each) 6.58 7.03
Notes to Accounts 16
Schedule No. 1 to 16 form an integral part of the consolidated financial statements For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
108
REGISTRATION NO. 106 DATED 4.12.2000
CONSOLIDATED RECEIPTS AND PAYMENTS ACCOUNT (DIRECT BASIS) FOR THE YEAR ENDED 31ST MARCH, 2019
(` in '000)
Particulars Year Ended 31st March, 2019 Year Ended 31st March, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Premium received from policyholders, including advance receipts 86,250,229 59,125,641
Other receipts 38,598 18,756
Payment to the re-insurers, net of commissions and claims (4,368,569) (7,032,013)
Payments to co-insurers, net of claims recovery 538,074 445,712
Payments of claims (55,264,603) (34,271,218)
Payments of commission and brokerage (5,450,858) (3,603,058)
Payments of other operating expenses (6,110,124) (8,312,846)
Preliminary and pre-operative expenses - -
Deposits, advances and staff loans 11,212 (328,862)
Income taxes paid (Net) (596,414) (999,859)
Service tax/GST paid (5,149,618) (3,496,474)
Other payments - -
Cash flows before extraordinary items 9,897,926 1,545,779
Cash flows from extraordinary operations - -
Net Cash Flows from operating activities 9,897,926 1,545,779
As per our Report of even date attached. For and on behalf of Board of Directors
Sanjeev Chopra
Chief Financial Officer
109
SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE - 1
PREMIUM EARNED (NET)
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Fire *Marine **Miscellaneous Total Fire *Marine **Miscellaneous Total
Premium from direct
business written 3,277,006 1,601,596 65,138,592 70,017,194 2,753,304 1,455,201 52,105,093 56,313,598
Add : Premium on
reinsurance accepted 505,164 30,394 143,870 679,428 630,703 25,339 97,257 753,299
Less : Premium on
reinsurance ceded 3,229,119 944,085 24,648,314 28,821,518 2,916,159 887,904 16,734,160 20,538,223
Net Premium 553,051 687,905 40,634,148 41,875,104 467,848 592,636 35,468,190 36,528,674
Total Premium Earned (Net) 471,315 683,071 39,146,244 40,300,630 481,413 576,073 31,300,405 32,357,891
SCHEDULE - 1A
PREMIUM EARNED (NET)
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Marine Cargo Marine Hull Total Marine Cargo Marine Hull Total
Premium from direct business written 1,551,252 50,344 1,601,596 1,401,153 54,048 1,455,201
Less : Premium on reinsurance ceded 905,485 38,600 944,085 849,217 38,687 887,904
Total Premium Earned (Net) 667,710 15,361 683,071 560,283 15,790 576,073
110
SCHEDULE - 1B
PREMIUM EARNED (NET)
(` in '000)
st
Year Ended 31 March, 2019
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Premium from
direct business
written 15,949,301 16,663,247 32,612,548 773,824 6,048 297,229 1,250,253 306,992 8,035,587 19,341,022 2,515,089 65,138,592
Add : Premium
on reinsurance
accepted - - - 56,674 - - - 47,047 - - 40,149 143,870
15,949,301 16,663,247 32,612,548 830,498 6,048 297,229 1,250,253 354,039 8,035,587 19,341,022 2,555,238 65,282,462
Less : Premium
on reinsurance
ceded 2,427,258 2,524,879 4,952,137 617,496 5,983 15,234 238,109 137,261 634,397 16,461,295 1,586,402 24,648,314
Net Premium 13,522,043 14,138,368 27,660,411 213,002 65 281,995 1,012,144 216,778 7,401,190 2,879,727 968,836 40,634,148
Adjustments for
changes in
Reserve for
Unexpired Risks 524,979 955,070 1,480,049 13,437 (68) (735) (88,179) 7,870 117,527 (77,034) 35,037 1,487,904
Total Premium
Earned (Net) 12,997,064 13,183,298 26,180,362 199,565 133 282,730 1,100,323 208,908 7,283,663 2,956,761 933,799 39,146,244
SCHEDULE - 1B
PREMIUM EARNED (NET)
(` in '000)
st
Year Ended 31 March, 2018
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Premium from
direct business
written 14,950,746 15,073,023 30,023,769 897,317 5,988 295,744 791,497 243,563 6,704,038 10,772,966 2,370,211 52,105,093
Add : Premium
on reinsurance
accepted - - - 50,807 - - - 37,070 1,876 - 7,504 97,257
14,950,746 15,073,023 30,023,769 948,124 5,988 295,744 791,497 280,633 6,705,914 10,772,966 2,377,715 52,202,350
Less : Premium
on reinsurance
ceded 2,282,798 2,304,295 4,587,093 760,217 5,613 15,214 112,282 86,643 576,908 9,122,881 1,467,309 16,734,160
Net Premium 12,667,948 12,768,728 25,436,676 187,907 375 280,530 679,215 193,990 6,129,006 1,650,085 910,406 35,468,190
Adjustments for
changes in
Reserve for
Unexpired Risks 776,533 1,374,574 2,151,107 30,657 264 4,419 165,111 17,397 1,657,553 119,499 21,778 4,167,785
Total Premium
Earned (Net) 11,891,415 11,394,154 23,285,569 157,250 111 276,111 514,104 176,593 4,471,453 1,530,586 888,628 31,300,405
111
SCHEDULE - 2
CLAIMS INCURRED (NET)
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Fire *Marine **Miscellaneous Total Fire *Marine **Miscellaneous Total
Claims Paid
Direct 1,992,469 1,248,700 47,992,146 51,233,315 1,530,959 1,028,618 29,175,505 31,735,082
Add : Reinsurance accepted 119,102 34,150 10,340 163,592 79,937 2,325 32,191 114,453
Less : Reinsurance ceded 1,909,575 859,100 19,751,621 22,520,296 1,385,213 706,733 7,767,552 9,859,498
Net Claims Paid 201,996 423,750 28,250,865 28,876,611 225,683 324,210 21,440,144 21,990,037
Total Claims Incurred 305,815 413,107 34,863,307 35,582,229 479,064 314,703 26,033,311 26,827,078
SCHEDULE - 2A
CLAIMS INCURRED (NET)
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Marine Cargo Marine Hull Total Marine Cargo Marine Hull Total
Claims Paid
Direct 839,424 409,276 1,248,700 918,073 110,545 1,028,618
112
SCHEDULE - 2B
CLAIMS INCURRED (NET)
(` in '000)
st
Year Ended 31 March, 2019
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Claims Paid
Direct 11,187,551 9,229,337 20,416,888 364,066 9,222 79,860 996,256 20,735 7,750,401 16,897,337 1,457,381 47,992,146
Add : Reinsurance
accepted - - - 10,034 291 - - - 12 - 3 10,340
Less :
Reinsurance
ceded 1,803,369 2,523,751 4,327,120 251,009 9,062 4,273 123,347 6,112 581,413 13,611,147 838,138 19,751,621
Net Claims Paid 9,384,182 6,705,586 16,089,768 123,091 451 75,587 872,909 14,623 7,169,000 3,286,190 619,246 28,250,865
Add : Claims
Outstanding at
the end of the
year 1,953,185 33,589,844 35,543,029 202,514 1,958 147,210 599,720 154,799 1,284,820 1,844,523 603,517 40,382,090
Less : Claims
Outstanding at
the beginning
of the year 2,382,926 26,466,316 28,849,242 251,903 430 118,770 342,306 131,341 1,036,994 2,446,010 592,652 33,769,648
Total Claims
Incurred 8,954,441 13,829,114 22,783,555 73,702 1,979 104,027 1,130,323 38,081 7,416,826 2,684,703 630,111 34,863,307
SCHEDULE - 2B
CLAIMS INCURRED (NET)
(` in '000)
st
Year Ended 31 March, 2018
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Claims Paid
Direct 9,715,492 7,297,475 17,012,967 351,346 (1,892) 84,817 436,073 9,080 4,685,133 5,842,352 755,629 29,175,505
Add : Reinsurance
accepted - - - 1,368 1,955 - - - 28,868 - - 32,191
Less :
Reinsurance
ceded 2,022,690 1,319,747 3,342,437 250,472 (1,671) 4,765 44,629 3,608 409,712 3,393,077 320,523 7,767,552
Net Claims Paid 7,692,802 5,977,728 13,670,530 102,242 1,734 80,052 391,444 5,472 4,304,289 2,449,275 435,106 21,440,144
Add : Claims
Outstanding at
the end of the
year 2,382,926 26,466,316 28,849,242 251,903 430 118,770 342,306 131,341 1,036,994 2,446,010 592,652 33,769,648
Less : Claims
Outstanding at
the beginning
of the year 2,212,587 21,868,002 24,080,589 243,864 941 104,453 215,140 87,799 1,333,699 2,657,709 452,287 29,176,481
Total Claims
Incurred 7,863,141 10,576,042 18,439,183 110,281 1,223 94,369 518,610 49,014 4,007,584 2,237,576 575,471 26,033,311
113
SCHEDULE - 3
COMMISSION
(` in '000)
st st
Year Ended 31 March, 2019 Year Ended 31 March, 2018
Particulars
Fire *Marine **Miscellaneous Total Fire *Marine **Miscellaneous Total
Commission Paid
Direct 231,862 115,609 4,540,007 4,887,478 162,207 96,498 3,053,667 3,312,372
Total (A) 231,862 115,609 4,540,007 4,887,478 162,207 96,498 3,053,667 3,312,372
Add : Commission on
reinsurance accepted 31,925 1,703 19,281 52,909 39,304 775 7,538 47,617
Less : Commission on
reinsurance ceded 421,146 138,563 2,244,951 2,804,660 252,441 114,690 1,925,532 2,292,663
Net Commission (157,359) (21,251) 2,314,337 2,135,727 (50,930) (17,417) 1,135,673 1,067,326
Others - - - - - - - -
Total (B) 231,862 115,609 4,540,007 4,887,478 162,207 96,498 3,053,667 3,312,372
SCHEDULE - 3A
COMMISSION
(` in '000)
Year Ended 31st March, 2019 Year Ended 31st March, 2018
Particulars
Marine Cargo Marine Hull Total Marine Cargo Marine Hull Total
Commission Paid
Direct 109,993 5,616 115,609 90,917 5,581 96,498
Add : Commission on
reinsurance accepted 1,703 - 1,703 775 - 775
Less : Commission on
reinsurance ceded 134,571 3,992 138,563 110,360 4,330 114,690
Others - - - - - -
114
SCHEDULE - 3B
COMMISSION
(` in '000)
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Commission Paid
Direct 3,078,338 262,257 3,340,595 101,817 441 59,472 142,938 61,265 534,028 - 299,451 4,540,007
Total (A) 3,078,338 262,257 3,340,595 101,817 441 59,472 142,938 61,265 534,028 - 299,451 4,540,007
Add :
Commission on
reinsurance
accepted - - - 5,868 - - - 6,502 - - 6,911 19,281
Less :
Commission on
reinsurance
ceded 555,072 496,179 1,051,251 55,045 577 2,217 20,151 16,566 66,722 801,010 231,412 2,244,951
Net Commission 2,523,266 (233,922) 2,289,344 52,640 (136) 57,255 122,787 51,201 467,306 (801,010) 74,950 2,314,337
Agents 843,379 189,137 1,032,516 47,562 - 40,845 25,593 14,359 262,044 - 124,668 1,547,587
Brokers 2,231,794 71,934 2,303,728 54,125 441 18,599 116,349 46,757 268,670 - 160,461 2,969,130
Corporate
Agency 3,165 1,186 4,351 130 - 28 996 149 3,314 - 14,322 23,290
Others - - - - - - - - - - - -
Total (B) 3,078,338 262,257 3,340,595 101,817 441 59,472 142,938 61,265 534,028 - 299,451 4,540,007
SCHEDULE - 3B
COMMISSION
(` in '000)
st
Year Ended 31 March, 2018
Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
Commission Paid
Direct 2,049,769 155,874 2,205,643 66,175 576 43,215 74,504 30,339 426,681 - 206,534 3,053,667
Total (A) 2,049,769 155,874 2,205,643 66,175 576 43,215 74,504 30,339 426,681 - 206,534 3,053,667
Add :
Commission on
reinsurance
accepted - - - 4,349 - - - 1,602 152 - 1,435 7,538
Less :
Commission on
reinsurance
ceded 487,465 415,115 902,580 75,036 806 2,218 13,323 9,761 60,527 649,884 211,397 1,925,532
Net Commission 1,562,304 (259,241) 1,303,063 (4,512) (230) 40,997 61,181 22,180 366,306 (649,884) (3,428) 1,135,673
Agents 769,560 129,695 899,255 25,529 - 28,007 35,897 4,617 199,393 - 71,062 1,263,760
Brokers 1,269,740 21,339 1,291,079 40,303 576 14,954 37,513 25,435 220,637 - 120,159 1,750,656
Corporate
Agency 10,469 4,840 15,309 343 - 254 1,094 287 6,651 - 15,313 39,251
Others - - - - - - - - - - - -
Total (B) 2,049,769 155,874 2,205,643 66,175 576 43,215 74,504 30,339 426,681 - 206,534 3,053,667
115
SCHEDULE - 4
OPERATING EXPENSES RELATING TO INSURANCE BUSINESS
(` in '000)
Year Ended 31st March, 2019 Year Ended 31st March, 2018
S. Particulars
No. Fire *Marine **Miscellaneous Total Fire *Marine **Miscellaneous Total
1 Employees remuneration and welfare benefits 32,311 40,190 2,373,987 2,446,488 29,926 37,908 2,268,728 2,336,562
2 Travel, conveyance and vehicle
running expenses 2,408 2,995 176,924 182,327 1,900 2,407 144,063 148,370
3 Training expenses 271 337 19,878 20,485 226 286 17,132 17,644
4 Rent, rates and taxes 5,282 6,570 388,068 399,920 5,102 6,463 386,774 398,338
5 Repairs 2,226 2,769 163,573 168,568 1,973 2,499 149,574 154,046
6 Printing and Stationery 1,124 1,398 82,601 85,124 1,020 1,293 77,359 79,672
7 Communication 1,609 2,002 118,241 121,852 1,252 1,586 94,931 97,769
8 Legal and professional charges 11,142 13,859 818,655 843,656 9,126 11,560 691,825 712,510
9 Auditor's fees, expenses etc.
(a) As Auditor 41 51 3,004 3,096 39 49 2,952 3,040
(b) As Advisor or in any other
capacity in respect of
(i) Taxation matters - - - - - - - -
(ii) Insurance matters - - - - - - - -
(iii) Management services - - - - - - - -
(c) in any other capacity (Tax Audit fees) 10 12 734 756 9 12 719 740
10 Advertisement and publicity 5,221 6,493 383,566 395,280 1,990 2,521 150,851 155,361
11 Marketing & Support services - - - - 31,502 39,904 2,388,190 2,459,596
12 Interest and Bank charges 1,680 2,090 123,462 127,232 1,323 1,676 100,308 103,307
13 Others:
Policy stamps 39 - 4,362 4,401 41 - 4,069 4,110
Information & Technology expenses 2,716 3,378 199,549 205,643 2,505 3,173 189,891 195,569
Electricity & Water charges 807 1,004 59,308 61,119 815 1,032 61,788 63,635
Courtesies & Entertainment 1,010 1,256 74,177 76,442 758 960 57,442 59,160
Others 908 1,129 66,711 68,748 445 564 33,736 34,745
14 Depreciation 2,264 2,816 166,360 171,441 1,500 1,900 113,712 117,112
15 Service tax Expense/GST Expense 2,168 2,696 159,281 164,145 792 1,001 59,887 61,678
16 Expenses transferred to Shareholders' Account - - - - - - (9,000) (9,000)
Total 73,237 91,047 5,382,439 5,546,723 92,242 116,793 6,984,929 7,193,964
SCHEDULE - 4A
OPERATING EXPENSES RELATING TO INSURANCE BUSINESS
(` in '000)
Year Ended 31st March, 2019 Year Ended 31st March, 2018
S. Particulars
No. Marine Cargo Marine Hull Total Marine Cargo Marine Hull Total
1 Employees remuneration and welfare benefits 39,504 686 40,190 36,925 983 37,908
2 Travel, conveyance and vehicle running expenses 2,944 51 2,995 2,345 62 2,407
3 Training expenses 331 6 337 279 7 286
4 Rent, rates and taxes 6,458 112 6,570 6,295 168 6,463
5 Repairs 2,722 47 2,769 2,434 65 2,499
6 Printing and Stationery 1,375 24 1,398 1,259 34 1,293
7 Communication 1,968 34 2,002 1,545 41 1,586
8 Legal and professional charges 13,623 237 13,859 11,260 300 11,560
9 Auditor's fees, expenses etc.
(a) As Auditor 50 1 51 48 1 49
(b) As Advisor or in any other
capacity in respect of - - - - - -
(i) Taxation matters - - - - - -
(ii) Insurance matters - - - - - -
(iii) Management services - - - - - -
(c) In any other capacity (Tax Audit fees) 12 - 12 12 - 12
10 Advertisement and publicity 6,383 111 6,493 2,455 65 2,521
11 Marketing & Support services - - - 38,870 1,034 39,904
12 Interest and Bank charges 2,054 36 2,090 1,633 43 1,676
13 Others:
Policy stamps - - - - - -
Information & Technology expenses 3,321 58 3,378 3,091 82 3,173
Electricity & Water charges 987 17 1,004 1,006 27 1,032
Courtesies & Entertainment 1,234 21 1,256 935 25 960
Others 1,110 19 1,129 549 15 564
14 Depreciation 2,768 48 2,816 1,851 49 1,900
15 Service tax Expense/GST Expense 2,650 46 2,696 975 26 1,001
16 Expenses transferred to Shareholders' Account - - - - - -
Total 89,492 1,554 91,047 113,766 3,027 116,793
116
SCHEDULE - 4B
OPERATING EXPENSES RELATING TO INSURANCE BUSINESS
(` in '000)
SCHEDULE - 4B
OPERATING EXPENSES RELATING TO INSURANCE BUSINESS
(` in '000)
st
Year Ended 31 March, 2018
S.
No. Particulars Motor - OD Motor - TP Motor - Total Engineering Aviation Workmen Personal Public/ Health Crop Other Total
Compensation Accident Product Miscellaneous Miscellaneous
Liability
1 Employees remuneration and
welfare benefits 810,307 816,754 1,627,061 12,019 24 17,944 43,446 12,409 392,043 105,548 58,234 2,268,728
2 Travel, conveyance and
vehicle running expenses 51,454 51,863 103,317 763 2 1,139 2,759 788 24,894 6,702 3,698 144,063
3 Training expenses 6,119 6,168 12,286 91 - 136 328 94 2,960 797 440 17,132
4 Rent, rates and taxes 138,141 139,240 277,382 2,049 4 3,059 7,407 2,115 66,836 17,994 9,928 386,774
5 Repairs 53,422 53,847 107,270 792 2 1,183 2,864 818 25,847 6,959 3,839 149,574
6 Printing and Stationery 27,630 27,850 55,479 410 1 612 1,481 423 13,368 3,599 1,986 77,359
7 Communication 33,906 34,176 68,081 503 1 751 1,818 519 16,404 4,416 2,437 94,931
8 Legal and professional charges 247,095 249,060 496,155 3,665 7 5,472 13,248 3,784 119,549 32,186 17,758 691,825
9 Auditor's fees, expenses etc.
(a) As Auditor 1,054 1,063 2,117 16 - 23 57 16 510 137 76 2,952
(b) As Advisor or in any other
capacity in respect of
(i) Taxation matters - - - - - - - - - - - -
(ii) Insurance matters - - - - - - - - - - - -
(iii) Management services - - - - - - - - - - - -
(c) in any other capacity
(Tax Audit fees) 257 259 515 4 - 6 14 4 124 33 18 719
10 Advertisement and publicity 53,878 54,307 108,185 799 2 1,193 2,889 825 26,067 7,018 3,872 150,851
11 Marketing & Support services 852,975 859,761 1,712,735 12,652 25 18,889 45,734 13,062 412,686 111,106 61,301 2,388,190
12 Interest and Bank charges 35,826 36,111 71,938 531 1 793 1,921 549 17,333 4,667 2,575 100,308
13 Others:
Policy stamps 1,491 1,503 2,994 7 - 155 20 1 62 - 830 4,069
Information & Technology
expenses 67,822 68,362 136,184 1,006 2 1,502 3,636 1,039 32,814 8,834 4,874 189,891
Electricity & Water charges 22,068 22,244 44,312 327 1 489 1,183 338 10,677 2,875 1,586 61,788
Courtesies & Entertainment 20,516 20,680 41,196 304 1 454 1,100 314 9,926 2,672 1,474 57,442
Others 12,049 12,145 24,195 179 - 267 646 185 5,830 1,570 866 33,736
14 Depreciation 40,614 40,937 81,551 602 1 899 2,178 622 19,650 5,290 2,919 113,712
15 Service tax
Expense/GST Expense 21,390 21,560 42,949 317 - 474 1,147 328 10,349 2,786 1,537 59,887
16 Expenses transferred to
Shareholders' Account - - - - - - - - (9,000) - - (9,000)
Total 2,498,015 2,517,888 5,015,903 37,039 74 55,440 133,876 38,231 1,198,930 325,189 180,247 6,984,929
117
SCHEDULE - 5
SHARE CAPITAL
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Authorised Capital
400000000 Equity Shares of ` 10 each
(Previous Year 400000000 Equity Shares of ` 10 each) 4,000,000 4,000,000
2 Issued Capital
274218300 Equity Shares of ` 10 each
(Previous Year 269321500 Equity Shares of `10 each) 2,742,183 2,693,215
3 Subscribed Capital
274218300 Equity Shares of ` 10 each
(Previous Year 269321500 Equity Shares of `10 each) 2,742,183 2,693,215
4 Called up Capital
274218300 Equity Shares of ` 10 each
(Previous Year 269321500 Equity Shares of `10 each) 2,742,183 2,693,215
Less: Calls unpaid
Add: Equity Shares forfeited (amount orginally paid up) - -
Less: Par Value of Equity Shares bought back - -
Less: Preliminary Expenses - -
Expenses including commission or brokerage on
underwriting or subscription of shares - -
Total 2,742,183 2,693,215
SCHEDULE - 5A
SHARE CAPITAL
PATTERN OF SHAREHOLDING
(As certified by the Management)
st st
As at 31 March, 2019 As at 31 March, 2018
Shareholders
Number of Shares % of Holding Number of Shares % of Holding
Promoters
a) Indian 139,851,333 51 137353965 51
b) Foreign 134,366,967 49 131967535 49
Others - - - -
Total 274,218,300 100 269321500 100
SCHEDULE - 6
RESERVES AND SURPLUS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Capital Reserve - -
3 Share Premium - -
4 General Reserve - -
6 Other Reserves - -
118
SCHEDULE - 7
BORROWINGS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Debentures/Bonds - -
2 Banks - -
3 Financial Institutions - -
4 Others - -
Total - -
SCHEDULE - 8
INVESTMENTS - SHAREHOLDERS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
Note: (Sch 8 & Sch 8A): Aggregate amount of Company's investment other than listed equity securities and
derivative instruments is ` 89,059,254 thousand (Previous year ` 71,444,673 thousand).
Market value of such investments as at 31.03.2019 is ` 88,133,529 thousand (Previous year ` 70,087,565
thousand).
119
SCHEDULE - 8A
INVESTMENTS - POLICYHOLDERS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
SCHEDULE - 9
LOANS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
120
SCHEDULE - 10
FIXED ASSETS
(` in '000)
121
SCHEDULE - 11
CASH AND BANK BALANCES
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Cash (including cheques, drafts and stamps) 39,768 30,032
2 Bank Balances
(a) Deposit Accounts
(aa) Short Term (due within 12 months) - 7,600
(bb) Others - 5,000
(b) Current Accounts 690,427 1,867,138
(c ) Others - -
3 Money at call & short notice
With Banks - -
With Other Institutions - -
4 Others - -
Total 730,195 1,909,770
Balances with non -scheduled banks included in 2 and 3 above - -
Note: Balance with Banks in current accounts above, includes liquid flexi term deposit of ` 787,100 thousand (Previous
year ` 1,437,900 thousand).
SCHEDULE - 12
ADVANCES AND OTHER ASSETS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
ADVANCES
1 Reserve Deposit with ceding Companies - -
2 Application Money for Investments - -
3 Prepayments 80,082 85,817
4 Advance to Directors/Officers - -
5 Advance Tax Paid and Tax Deducted at source (Net of provision for taxation) 319,517 512,336
6 Deposit towards Rent 90,862 91,670
7 Service Tax/GST Recoverable 18,322 12,854
8 Others 6,696 48,792
Total (A) 515,479 751,469
OTHER ASSETS
1 Income accrued on Investments/FDRs 2,875,349 2,591,204
2 Outstanding Premiums 4,579,641 6,762,345
3 Agents' Balances - -
4 Foreign Agencies Balances - -
5 Due from entities carrying on insurance business (including reinsurers) 1,657,845 1,468,944
6 Due from Subsidiaries/Holdings - -
7 Assets held for unclaimed amount of Policyholders 260,063 252,535
Add: Investment income accruing on unclaimed amount 51,161 32,465
8 Deposit with Reserve Bank of India - -
9 Unsettled Investment contract receivable - -
Total (B) 9,424,059 11,107,493
Total (A+B) 9,939,538 11,858,962
122
SCHEDULE - 13
CURRENT LIABILITIES
(` in '000)
S. No. Particulars As at 31st March, 2019 As at 31st March, 2018
(1) (2) (3) (4)
1 Agents Balances 372,642 419,021
2 Balances due to other insurance companies (including reinsurers) 7,189,015 6,556,057
3 Deposits held on re-insurances ceded - -
4 Premiums received in advance 4,250,441 626,984
5 Unallocated premium 69,627 125,342
6 Sundry Creditors 1,187,415 1,629,369
7 Due to Subsidiaries/Holding Company - -
8 Claims outstanding* 43,113,172 37,787,976
9 Due to Officers/Directors - -
10 Deposit Premium 514,687 423,850
11 Goods & Service Tax Payable 456,488 14,702
12 Employee Benefit 346,843 331,496
13 Unclaimed amount of Policyholders 237,657 252,522
Add: Investment income accruing on unclaimed amount 51,161 32,465
Total 57,789,148 48,199,784
*Claims Outstanding Includes ` 1,353,176 thousand (Previous Year ` 2,733,598 thousands) on account of settlement
received from the IMTPIP towards the company's share of claim liability determined by the pool upto the date of
dismantling (Net of claims paid upto reporting period).
SCHEDULE - 14
PROVISIONS
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Reserve for Unexpired Risk 20,335,230 18,760,756
2 For Taxation (less advance tax paid and taxes deducted at source) - -
3 For Proposed Dividends - -
4 For Dividend Distribution Tax - -
5 Premium Deficiency - -
6 For Doubtful Debt 48,699 41,622
Total 20,383,929 18,802,378
SCHEDULE - 15
MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
(` in '000)
st st
S. No. Particulars As at 31 March, 2019 As at 31 March, 2018
(1) (2) (3) (4)
1 Discount allowed in issue of shares/debentures - -
2 Others - -
Total - -
123
A glimpse of the Awards we have won in 2018-19.
We thank our customers and partners for their continuous support.
124
ACCOUNTING
POLICIES & NOTES TO
ACCOUNTS
CONSOLIDATED
125
SCHEDULE 16: NOTES TO ACCOUNTS premium and in respect of all other
reinsurance acceptances under pool
A. SIGNIFICANT ACCOUNTING POLICIES ON arrangements at fifty percent of the net
CONSOLIDATED ACCOUNTS premium during the preceding twelve
1. Basis of Preparation of Financial Statements months.
The financial statements have been prepared 3.2 Any subsequent revision to the premium
under the historical cost convention and on under the policies is accounted for in the
the accrual basis of accounting in accordance period in which they occur.
with the generally accepted accounting 3.3 Premium deficiency is recognized whenever
principles and conform to the statutory expected claim costs, related expenses and
requirements prescribed under the Insurance maintenance costs exceeds related reserve
Regulatory and Development Authority for unexpired risks for each segment of
(Preparation of Financial Statements and business.
Auditor's Report of Insurance Companies)
Regulations, 2002 including directions 3.4 Reinsurance Inward acceptances are
thereon, the Insurance Act, 1938, the accounted for on the basis of returns, to the
provisions of Companies Act, 2013 including extent received, from the insurers.
notified Accounting Standards there under
except otherwise stated. 3.5 Commission on reinsurance cessions are
recognized as income in the period in which
2. Use of Estimates the premium is ceded. Profit commission
under reinsurance treaties, wherever
The presentation of the financial statements applicable, is recognized on the determination
in conformity with the generally accepted of profit for the period.
accounting principles requires the
management to make estimates and 3.6 Interest Income is recognized on accrual
assumptions that affect the reported amount basis.
of assets and liabilities, revenues and
expenses and disclosure of contingent assets 3.7 Dividend income is recognized when the right
& liabilities. Such estimates and assumptions to receive dividend is established.
are based on the management's evaluation of 3.8 Profit or Loss on sale/redemption of
the relevant facts and circumstances as on investments which is the difference between
the date of financial statements. Any revision sale consideration and carrying value is
to the accounting estimates is recognized recognized on trade date and includes effects
prospectively in the period in which the of accumulated fair value changes, previously
results are know/ materialized. recognized, for specific investments
3. Revenue Recognition sold/redeemed during the year. In
determining realized gain/loss, cost of
3.1 Premium and cession thereof are recognized securities is arrived at on 'Weighted average
over the contract period or the period of the cost' basis and sale consideration for the
risk in respective revenue account following purpose of realized gain/loss is net of
1/365 method. Brokerage and taxes, if any.
126 25
5. Claims Incurred Valuation
5.1 Liability in respect of claims is provided for the (i) Debt securities including Government
intimations received up to the year-end securities are considered as held to maturity
based on the surveyor's assessment, and are valued at cost subject to amortization
information provided by the insured, by charging off/crediting investment income
judgment based on past experience and with the difference of acquisition cost and
other applicable laws and practices. However, maturity value over the unexpired period of
in respect of claims under re-insurance maturity on straight line method.
acceptances, the claim liability is provided
based on the returns/advices, to the extent (ii) Investments in units of mutual funds are
received, from the Reinsurers. valued at Net Asset Value (NAV).
5.2 Liability in respect of “claims incurred but not (iii) Equity securities listed and actively traded are
reported” (IBNR) and “Claims incurred but stated at fair value, being the last quoted
not enough reported” (IBNER) is provided for closing price on the National Stock Exchange
on actuarial estimates as certified by the (NSE). However, in case of any stock not being
“Appointed Actuary”. listed at NSE, the same is valued based on the
last quoted closing price on Bombay Stock
5.3 Salvage/Recoveries under claims are netted Exchange (BSE).
off against “Claims Incurred” and are
(iv) Any unrealized gain/loss arising due to change
accounted for on realization.
in fair value of mutual fund investments and
6. Allocation of Operating Expenses listed equity shares is accounted in 'Fair Value
Change Account' and carried forward in the
Operating expenses other than policy stamps Balance Sheet and is not available for
are apportioned to respective revenue distribution.
accounts on the basis of net premium in each
(v) Investment in subsidiary company is valued at
class of business at the end of financial year.
cost less permanent diminution, if any.
Expenses relating to policy stamps are
directly taken to the respective revenue 9. Fixed Assets
accounts.
Fixed Assets including Intangible Assets are
7. Acquisition Cost of insurance contracts stated at their cost of acquisition less
accumulated depreciation/amortization.
Cost relating to acquisition of new/renewal of
insurance contracts are expensed in the Capital Work in Progress is stated at cost.
period in which they are incurred.
10. Depreciation/Amortization
8. Investments
10.1 Depreciation on Fixed Assets is provided on
Investments are recorded on the trade date at straight line method based on useful life as
the acquisition cost. provided in Schedule II of the Companies Act,
2013 except
Classification
(i) Fixtures in rented premises are depreciated
Investment maturing within twelve months proportionately over the residual lease
from the Balance Sheet date and investments period wherever the lease period is less than
made with specific intention to dispose of the useful life specified in Schedule II.
within twelve months from the Balance Sheet
date are classified as Short Term Investments. (ii) Information Technology Equipments - Servers
Other investments are classified as Long Term & Networks are depreciated over their useful
Investments. life of three years on straight line method.
127
25
(iii) Fixed Assets having value up to ` 5000 are 15.2 Liability for leave encashment is provided for
fully depreciated in the year of acquisition. on the basis of actuarial valuation as on the
date of Balance Sheet.
10.2 Intangible Asset (Software) is amortized over
its useful life of three years on straight line 15.3 Provident Fund and Family Pension Scheme
method. contributions and liability towards Leave
Travel Assistance (LTA) are accounted for on
11. Operating Lease accrual basis.
Payments made towards assets/premises 15.4 Gains/losses arising out of the actuarial
taken on operating lease are recognized as an valuation are recognized immediately in the
expense in the revenue accounts and profit accounts.
and loss account over the lease term on
straight-line basis. 16. Impairment of Assets
Net Assets (Total assets minus Total liability) Share in Profit or loss (Profit after tax)
Name of Entity
% of consolidated Amount % of consolidated Amount
net assets profit or loss
IFFCO TOKIO INSURANCE
SERVICES LIMITED 0.19% 42,161 1.14% 20,550
Provident Fund The company makes contributions at a specified percentage of payroll cost towards Employee
(Subsidiary Provident Fund (EPF) for qualifying employees. The company recognized ` 8,104 thousand
Company) (previous year ` 14,311 thousand) for provident fund contribution in the profit & loss account.
129
B. General description of the defined benefit scheme:
Payable on separation @ 15 days pay for each completed year of service to eligible employees
Gratuity who render continuous service of five years or more.
Payable on encashment during the service or on separation to the eligible employees who have
Leave Encashment
accumulated earned leave.
The Company pays fixed contribution to Provident Fund Trust. Contribution to Family Pension
Provident Fund Scheme is paid to appropriate authority. The contribution for ` 84,007 thousand (previous year
(Parent Company)
` 63,613 thousand) has been recognized as expense in the accounts.
C. Other disclosures as required under AS-15 (Revised 2005) on “Employee Benefits” in respect of
defined benefit obligations are as under:
i. Expenses recognized in Profit & Loss Account
(` in '000)
130
iii. Changes in the present value of the Defined Benefit Obligations:
(` in '000)
*Gratuity Fund is managed by Life Insurance Corporation of India (LIC). Individual investment wise details of
the plan assets are not being provided by LIC.
v. Actuarial Assumptions
Principal assumptions used for actuarial valuation of parent company are:
Gratuity (Funded) Leave Encashment (Non-Funded)
Particulars
2018-19 2017-18 2016-17 2015-16 2014-15 2018-19 2017-18 2016-17 2015-16 2014-15
Method used Projected Unit Credit Method
Discount Rate 7.63% 7.60% 7.25% 7.75% 7.75% 7.63% 7.60% 7.25% 7.75% 7.75%
Salary Escalation 6.50% 6.00% 6.00% 6.00% 6.00% 6.50% 6.00% 6.00% 6.00% 6.00%
131
Principal assumptions used for actuarial valuation of Subsidiary company are:
st
* All the employees of the Subsidiary Company have resigned on 31 August 2018, therefore, no actuarial
valuation is required for defined benefit plans i.e. gratuity and leave encashment.
The estimate of future salary increase considered in actuarial valuation, take into account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
Particulars Year ended 31st March, 2019 Year ended 31st March, 2018
SEGMENT REVENUE:
Fire Insurance 3,869,854 3,459,108
Marine Insurance 1,691,792 1,545,630
Motor Insurance - OD 16,620,242 15,628,242
Motor Insurance - TP 19,536,488 17,719,467
Engineering Insurance 858,667 977,242
Workmen Compensation Insurance 316,012 313,694
Personal Accident Insurance 1,325,236 840,228
Product Liability Insurance 372,949 295,703
Health Insurance 8,344,286 6,925,347
Crop 19,486,677 10,856,520
Other Insurance 2,662,677 2,477,219
Investment 1,396,121 1,378,710
Total 76,481,001 62,417,110
SEGMENT RESULT: Profit/Loss
Fire Insurance 333,074 30,485
Marine Insurance 259,730 226,874
Motor Insurance - OD 402,695 654,337
Motor Insurance - TP 588,390 1,205,909
Engineering Insurance 70,684 44,169
Workmen Compensation Insurance 102,750 103,254
Personal Accident Insurance (211,783) (150,832)
Product Liability Insurance 109,844 82,237
Health Insurance (1,271,393) (881,934)
Crop 837,580 (298,740)
Other Insurance 198,416 235,343
Investments 996,122 1,378,710
Unallocable (28,822) (47,808)
Total Profit before Tax 2,387,287 2,582,004
Less: Provision for Taxation 587,703 688,981
Profit After Tax 1,799,584 1,893,023
132
(` in '000)
st st
SEGMENT ASSETS As at 31 March, 2019 As at 31 March, 2018
Fire Insurance - -
Marine Insurance - -
Motor Insurance - -
Engineering Insurance - -
Workmen Compensation Insurance - -
Personal Accident Insurance - -
Product Liability Insurance - -
Health Insurance - -
Crop - -
Other Insurance - -
Investments 91,966,115 74,083,617
Total 91,966,115 74,083,617
Add: Unallocable Assets 8,764,074 11,678,735
Total 100,730,189 85,762,352
SEGMENT LIABILITIES As at 31st March, 2019 As at 31st March, 2018
Fire Insurance 1,301,425 1,115,870
Marine Insurance 776,894 782,704
Motor Insurance-OD 9,212,498 9,117,260
Motor Insurance-TP 42,800,294 36,102,118
Engineering Insurance 325,420 361,373
Workmen Compensation Insurance 261,375 233,670
Personal Accident Insurance 905,740 736,505
Product Liability Insurance 247,134 215,806
Health Insurance 4,379,017 4,013,664
Crop 1,901,413 2,579,933
Other Insurance 1,337,191 1,289,830
Investments - -
Total 63,448,401 56,548,733
Add: Unallocable Liabilities 14,724,676 10,453,429
Total 78,173,077 67,002,162
Cost incurred to acquire segment assets (Fixed Assets)
Fire Insurance - -
Marine Insurance - -
Motor Insurance - -
Engineering Insurance - -
Workmen Compensation Insurance - -
Personal Accident Insurance - -
Product Liability Insurance - -
Health Insurance - -
Crop - -
Other Insurance - -
Investments - -
Total - -
Add: Unallocable Fixed assets 425,938 146,315
Total 425,938 146,315
133
Amount of expenses included in segment result for
Year ended 31st March, 2019 Year ended 31st March, 2018
depreciation and amortization in respect of assets
Fire Insurance 2,264 1,500
Marine Insurance 2,816 1,900
Motor Insurance - OD 55,361 40,614
Motor Insurance - TP 57,884 40,937
Engineering Insurance 872 602
Workmen Compensation Insurance 1,155 899
Personal Accident Insurance 4,144 2,178
Product Liability Insurance 888 622
Health Insurance 30,301 19,650
Crop 11,790 5,290
Other Insurance 3,966 2,920
Investments - -
Total 171,441 117,112
Add: Unallocable Expenses - -
Total 171,441 117,112
Assets and Liabilities of the Company, which are not identifiable with any of the segments, have been classified
as unallocable.
b) Geographical Segment
Since the Company's entire business is conducted within India, there is no reportable Geographical
Segmentation for the year.
3. Accounting Standard- 18 “Related Party Disclosures”
The transactions between the company and its related parties during the year are as under:
(` in '000)
Name of the Nature of Related Description of Nature Year ended Year ended
Related Parties Party Relationship of Transactions 31st March, 2019 31st March, 2018
Premium accounted from direct business 726,212 674,765
Indian Farmers Promoters with Claims paid on direct basis 295,747 127,699
Fertiliser more than 20% Payment of Rent and other expenses 210,175 193,641
Cooperative Ltd Voting rights Deposit of Insurance Premium 2,500 2,500
Amount Payable / (Receivable) at the Balance Sheet Date 88 576
Premium accounted from direct business 80,147 79,904
Indian Potash Associate of Claim paid on direct basis 13,129 92,864
Limited Promoters with Deposit of Insurance Premium 100 100
more than 20% Payment of Rent and other expenses 413 -
Voting rights
Amount Payable / (Receivable) at the Balance Sheet Date (509) (150)
Tokio Marine Asia Promoters with Claim/Reimbursement of Expenses 241 81
Pte Ltd (formerly more than 20%
Millea Asia Pte Ltd) Voting rights Payment of Fee 3,127 3,002
Premium on Cession of Re-insurance Premium 303,859 310,479
Tokio Marine Associate of Commission Earned on Premium Ceded 77,476 78,858
& Nichido Fire Promoters with Losses Recovered from Re-insurer 295,056 885,762
Insurance Co Ltd more than 20% Claim/Reimbursement of Expenses - 124
Voting rights
Amount Payable / (Receivable) at the Balance Sheet Date 192,406 116,769
Associate of Premium on Cession of Re-insurance Premium - 76
Tokio Marine Kiln Promoters with Commission Earned on Premium Ceded - 4
Singapore Pte Ltd more than 20% Losses Recovered from Re-insurer 145 -
Voting rights Amount Payable / (Receivable) at the Balance Sheet Date (330) (1,770)
Premium on Cession of Re-insurance Premium 233,256 182,778
Tokio Marine Associate of Commission Earned on Premium Ceded 34,286 16,420
Insurance Promoters with Losses Recovered from Re-insurer 96,758 64,880
Singapore Ltd more than 20% Payment of Fee 25 -
Voting rights
Amount Payable / (Receivable) at the Balance Sheet Date 51,063 11,147
134
Associate of
Tokio Marine
Promoters with Amount Payable/(Receivable) at the Balance Sheet Date 116 116
Europe Insurance
more than 20%
Ltd.
Voting rights
PT Asuransi Associate of
Tokio Marine Promoters with
Payment of Fee - 121
Indonesia more than 20%
Voting rights
TM Claim Associate of
Claim/Reimbursement of Expenses 16,228 10,192
Services Inc. Promoters with
more than 20%
Voting rights Payment of Fee 4,714 2,495
135
IFFCO Kisan Associate of
Premium accounted from direct business 5,759 4,035
Sanchar Ltd. Promoters with
more than 20%
Voting rights Claims paid on direct basis 2,557 2,299
Indian Farm Associate of Premium accounted from direct business 2,275 1,847
Forestry Promoters with
Claims paid on direct basis 3 30
Development more than 20%
Cooperative Ltd. Voting rights Payment for CSR activity- IFFDC being implementation agency 35,500 44,500
IFFCO Employee Associate of
Premium accounted from direct business 101,791 -
Benevolent Trust Promoters with
more than 20%
Voting rights Claims paid on direct basis 91,997 -
136
(ii) In respect of premises taken on operating lease, total of future minimum lease payments under
non-cancellable operating lease and amount recognized in P&L account is as under:-
(` in '000)
st st
Particulars Year ended 31 March, 2019 Year ended 31 March, 2018
Not later than one year 3,34,281 291,396
Later than one year and not later than five years 674,643 690,100
Later than five years 168,025 112,983
Lease payment recognised in P&L account 399,608 397,878
Net increase in Deferred Tax asset for the year ` 201,530 thousand has been recognized in the Profit & Loss
Account (previous year decrease of ` 78,082 thousand).
Note:-
a) The above excludes provision for leave encashment and the gratuity contributions which are
determined actuarially on an overall basis and accordingly have not been considered in the above
information.
b) The remuneration as above has been approved by the IRDAI.
5. The Company has debt investments (Face value ` 2,000,000 thousand) in the securities of IL&FS Group.
The Company has filed an intervention Application with NCLAT owing to default in payments by IL&FS
th
group companies. Pursuant to the NCLAT order dated 25 February 2019, the Company has not classified
these investments as NPA. However, as a matter of prudence, an amount of ` 400,000 thousand has been
provided towards these investments.
th
6. Pursuant to IRDAI Circular no. IRDA/F&A/CIR/CPM/010/01/2017 dated 12 Jan. 2017, Investments have
been bifurcated on the policyholders' and shareholders' fund on notional basis. Accordingly, investments
are bifurcated in Schedule 8 “Investments-Shareholders” and in Schedule 8A “Investments-Policyholders”.
7. No depreciation is allocable to the Profit and Loss Account based on the 'use' of the asset.
8. Management expenses are apportioned to Revenue Accounts on the basis of Net Premium as per
Accounting Policy on 'Allocation of Operating Expenses' (Schedule 16 A (6)). Detail of apportioned
expenses is furnished in Schedule 4 (Operating Expenses relating to Insurance business).
138
9. As certified by Appointed Actuary, no premium deficiency has been provided in the current year
(previous years ` Nil) in the accounts.
10. In accordance with the requirements of the IRDAI circular dated March 18, 2003 and based on
recommendations made at General Insurance Council meeting held on February 4, 2005 and as per letter
no. HO/MTD/Solatium Fund/2010/482 dated July 26, 2010, from The New India Assurance Co. Ltd.
(Scheme administrator), the Company has provided 0.1% of the total Motor TP premium of the Company
towards solatium fund.
11. Direct commission paid under schedule 3 includes rewards paid to insurance agent and insurance
intermediaries as per IRDAI (Payment of commission or remuneration or rewards to insurance agents and
th
insurance intermediaries) Regulations, 2016 dated 14 December, 2016 and IRDAI Guidelines on Motor
st
Insurance Service providers dated 31 August, 2017.
12. On the basis of information received from 'enterprises' regarding their status under the Micro, Small and
Medium Enterprises Development Act, 2006 there is no Micro, Small and Medium Enterprises to which
the Company owes dues, which are outstanding for more than 45 days during the year ended 31.03.2019
and hence disclosure relating to amounts unpaid as at the yearend together with interest paid/payable as
required under the said Act have not been given.
13. Additional statutory information disclosed in the separate financial statements of the Insurance
company and its subsidiary having no material bearing on the true and fair view of consolidated financial
statements and the information pertaining to the items which are not material have not been disclosed in
the consolidated financial statements.
K. Srinivasa Gowda
Chairman (DIN 00059811)
Warendra Sinha
Managing Director (DIN 03518403)
Jun Matsui
Director (DIN 0008018422)
Sanjeev Chopra
Chief Financial Officer
139
Form AOC – 1
(Pursuant to first proviso to sub-section (3)
of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
2 Reporting period for the subsidiary concerned, if different from the holding
company’s reporting period. N.A.
3 Reporting currency and Exchange rate as on the last date of the relevant
financial year in the case of foreign subsidiaries. N.A.
8 Investments -
9 Turnover 324,897,794
13 Proposed Dividend -
14 % of shareholding 100%
Note: Company has only one subsidiary, information of which is given above.
Sanjeev Chopra
Chief Financial Officer
141
Being socially responsible,
helping communities improve their quality of life.
142
ACCOUNTS OF
SUBSIDIARY
COMPANY
IFFCO TOKIO INSURANCE SERVICES LIMITED
143
BOARD OF DIRECTORS
SENIOR EXECUTIVES
st
Mr. Ramesh Kumar Chief Executive Officer (w.e.f. 1 Nov, 2018)
144
NOTICE OF 16thANNUAL GENERAL MEETING
TO THE MEMBERS
NOTICE is hereby given that the SIXTEENTH ANNUAL GENERAL MEETING of the Members of M/s IFFCO TOKIO
th
Insurance Services Limited will be held on Wednesday, the 10 July, 2019 at 12:30 PM at the Registered Office
of the Company at IFFCO SADAN, C-1 DISTRICT CENTRE, SAKET, NEW DELHI - 110017 to transact the following
business:
ORDINARY BUSINESS
st
1. To receive, consider and adopt the audited Balance Sheet of the Company from 1 April, 2018 to
31st March, 2019 and the Profit & Loss Account for the above period and the Reports of the Board of
Directors and the Company's Auditors thereon.
2. To appoint a Director in Place of Mr. N. K. Kedia (DIN No. 00050917) who retires by rotation and being
eligible, offers himself for re-appointment.
3. To appoint a Director in place of Mr. Veer Pratap Singh (DIN No. 00051787) who retires by rotation and
being eligible, offers himself for reappointment.
Note:
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote
instead of himself/herself and such a proxy need not be a member of the Company.
2. Instruments of proxies in order to be effective must be deposited with the Company at its registered
office not less than 48 hours before the commencement of the meeting.
145
DIRECTORS’ REPORT
To the Members
1.0 Your Directors have pleasure in presenting to you the Sixteenth Annual Report together with the Audited
st
Financial Statements of your Company for the year ended 31 March 2019 along with the Auditors'
Report thereon.
Your Company worked as the Corporate Agent of IFFCO TOKIO General Insurance Co. Ltd. (“IFFCO
TOKIO”) for marketing and distribution of its General Insurance products and also provided service to
customers and intermediaries of IFFCO TOKIO in the market through its network of employees. During
the year under review, in compliance with the order of IRDAI followed by the order of Securities
Appellate Tribunal (SAT), your Company has received the notice from IFFCO TOKIO vide its letter dated
29th June, 2018 for termination of Service Agreement (SA) and Corporate Agency Agreement (CAA)
st
between IFFCO TOKIO and your Company with effect from closing working hours of 31 July, 2018. In
nd
response to the notice, your Company vide its letter dated 2 July, 2018 accepted the notice of
termination of Corporate Agency Agreement and Service Agreement and accordingly informed IRDAI
about the termination of above said agreements between IFFCO TOKIO and your Company.
Further to the termination of Corporate Agency Agreement and Service Agreement, your Company
submitted an application to IRDAI for surrender of the Corporate Agency Registration Certificate Number
st th
CA0207 w.e.f, 1 August, 2018 and IRDAI vide its letter dated 20 March, 2019 accepted the application
for surrender of Corporate Agency Registration.
Since, your Company's revenue from operations was solely dependent on the Corporate Agency and
Service Agreements with IFFCO TOKIO which have been terminated, the financial statements have been
prepared on the assumption that the Company is not a going concern. Considering this, the Company has
generated a total revenue of ` 33.86 Crore as against ` 86.34 Crore during the same period last year. Your
Company has earned a Profit Before Tax of ` 3.49 Crore against ` 0.42 Crore during the same period last
year. Your company proposes not to transfer any amount to the reserves.
3.0 Dividend
In order to conserve the resources of your Company, your Directors do not recommend any dividend for
the year under review.
The Management is responsible for finalization of business plan, annual budgets, review of operations,
review of performance of personnel and HR matters. During the period, four meetings of the Board of
Directors were held which were well attended by the Directors. During the FY 2018-19, four meetings of
Board of Directors of the Company were held on 23rd April, 2018, 20th July, 2018, 31st October, 2018 and
21st February, 2019.
The Report of the auditors to the shareholders of the Company is annexed to the financial statements for
st st
the period 1 April 2018 to 31 March 2019. There are no specific observations in the report of the
Auditors which require clarification.
6.0 Information under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014
Information as per the provisions contained under Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is NIL.
146
7.0 Directors' Responsibility Statement
a. In the preparation of the annual accounts, the applicable accounting standards have been followed
along with proper explanation relating to material departures.
b. The directors had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of financial year and of the profit and loss of the Company
for the period.
c. The directors had taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of this Act for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities.
d. The directors had devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems were adequate and operating effectively.
As per the provisions contained in section 139 of the Companies Act, 2013, your Company had appointed
M/s. Raghunath Rai & Co. (Chartered Accountants) as Statutory Auditor and to hold the office from the
conclusion of 12thAnnual General Meeting till the conclusion of the 17thAnnual General Meeting of the
Company. Auditors have confirmed that they are eligible for continuation in the office of Auditors during
FY 2019-20.
The Board was duly constituted during the year. Pursuant to article 78 of the Article of Association of
your Company, Mr. N.K. Kedia (DIN No.00050917) and Mr. Veer Pratap Singh (DIN No.00051787),
Directors will retire by rotation at this Annual General Meeting and being eligible, offer themselves for
re-appointment.
During the year under review, Mr. Srikanth Charan Mudigonda has tendered his resignation from the
st
office of the Chief Executive Officer (CEO) w.e.f. 1 November, 2018 and Mr. Ramesh Kumar was
st
appointed as CEO of the Company w.e.f. 1 November, 2018.
In pursuance to Section 134(3) (a) of the Companies Act, 2013, the extract of the Annual Return of the
Company is the prescribed form MGT 9 is available on the Company’s website at
https://www.iffcotokio.co.in/corporate-governance
During the Year Company has entered transactions with its holding Company M/s IFFCO TOKIO General
Insurance Company Limited in the ordinary course of business and on arm's length basis.
12.0 Particulars of Loans, Guarantees or Investments made under section 186 of Companies Act, 2013
There were no loans, guarantees or investment made by the company under section 186 of the
Companies Act, 2013 during the year under review and hence the said provision is not applicable.
13.0 Deposits
The Company has neither accepted nor renewed any deposit during the year under review.
147
14.0 Subsidiary, Joint Ventures and Associate Companies
The Company does not have any Subsidiary, Joint Venture and Associate Company.
As your Company does not carry out any manufacturing activity, the provisions with regard to disclosure
of particulars regarding Conservation of Energy and Technology absorption are not applicable to the
Company.
16.0 Acknowledgement
Your Directors express gratitude to the shareholders, IRDAI, Members of the Board of Directors, Other
Govt. agencies and customers of your Company for their valuable patronage and support and guidance.
Your Directors also place on record the deep appreciation of the dedicated services rendered by the CEO,
employees, trainees and other out sourced personnel of your Company at all levels.
148
INDEPENDENT AUDITOR'S REPORT Companies Act, 2013 (“the Act”) with respect to the
preparation of these standalone financial
TO THE MEMBERS OF IFFCO-TOKIO INSURANCE statements that give a true and fair view of the
SERVICES LIMITED financial position, financial performance, (changes
Report on the Audit of the Standalone Financial in equity) and cash flows of the Company in
Statements accordance with the accounting principles
generally accepted in India, including the
Opinion accounting Standards specified under section 133
of the Act. This responsibility also includes
We have audited the accompanying financial maintenance of adequate accounting records in
statements of IFFCO TOKIO INSURANCE SERVICES accordance with the provisions of the Act for
LIMITED, which comprise the Balance Sheet as at safeguarding of the assets of the Company and for
st
31 March 2019, the Statement of Profit and Loss preventing and detecting frauds and other
and statement of cash flows for the year then irregularities; selection and application of
ended, and notes to the financial statements, appropriate accounting policies; making judgments
including a summary of significant accounting and estimates that are reasonable and prudent;
policies and other explanatory information. and design, implementation and maintenance of
adequate internal financial controls, that were
In our opinion and to the best of our information
operating effectively for ensuring the accuracy and
and according to the explanations given to us, the
completeness of the accounting records, relevant
afore said financial statements give the information
to the preparation and presentation of the financial
required by the Act in the manner so required and
statement that give a true and fair view and are free
give a true and fair view in conformity with the
from material misstatement, whether due to fraud
accounting principles generally accepted in India, of
or error.
the state of affairs of the Company as at 31st March,
2019, and its profit and its cash flows for the year In preparing the financial statements, management
ended on that date. is responsible for assessing the Company's ability to
continue as a going concern, disclosing, as
Basis for Opinion
applicable, matters related to going concern and
We conducted our audit in accordance with the using the going concern basis of accounting unless
Standards on Auditing (SAs) specified under section management either intends to liquidate the
143(10) of the Companies Act, 2013. Our Company or to cease operations, or has no realistic
responsibilities under those Standards are further alternative but to do so.
described in the Auditor's Responsibilities for the
Those Board of Directors are also responsible for
Audit of the Financial Statements section of our
overseeing the company's financial reporting
report. We are independent of the Company in
process.
accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India Auditor's Responsibilities for the Audit of the
together with the ethical requirements that are Financial Statements
relevant to our audit of the financial statements
under the provisions of the Companies Act, 2013 Our objectives are to obtain reasonable assurance
and the Rules thereunder, and we have fulfilled our about whether the financial statements as a whole
other ethical responsibilities in accordance with are free from material misstatement, whether due
these requirements and the Code of Ethics. We to fraud or error, and to issue an auditor's report
believe that the audit evidence we have obtained is that includes our opinion. Reasonable assurance is
sufficient and appropriate to provide a basis for our a high level of assurance, but is not a guarantee that
opinion. an audit conducted in accordance with SAs will
always detect a material misstatement when it
Responsibility of Management for Standalone exists. Misstatements can arise from fraud or error
Financial Statements and are considered material if, individually or in the
aggregate, they could reasonably be expected to
The Company's Board of Directors is responsible for
influence the economic decisions of users taken on
the matters stated in section 134(5) of the
the basis of these financial statements.
149
As part of an audit in accordance with SAs, we including the disclosures, and whether the
exercise professional judgment and maintain financial statements represent the
professional skepticism throughout the audit. We underlying transactions and events in a
also: manner that achieves fair presentation.
• Identify and assess the risks of material We communicate with those charged with
misstatement of the financial statements, governance regarding, among other matters, the
whether due to fraud or error, design and planned scope and timing of the audit and
perform audit procedures responsive to significant audit findings, including any significant
those risks, and obtain audit evidence that is deficiencies in internal control that we identify
sufficient and appropriate to provide a basis during our audit.
for our opinion. The risk of not detecting a
material misstatement resulting from fraud We also provide those charged with governance
is higher than for one resulting from error, as with a statement that we have complied with
fraud may involve collusion, forgery, relevant ethical requirements regarding
intentional omissions, misrepresentations, independence, and to communicate with them all
or the override of internal control. relationships and other matters that may
reasonably be thought to bear on our
• Obtain an understanding of internal control independence, and where applicable, related
relevant to the audit in order to design audit safeguards.
procedures that are appropriate in the
circumstances. Under section 143(3)(i) of Emphasis of Matter
the Companies Act, 2013, we are also Without qualifying our opinion, we draw attention
responsible for expressing our opinion on to the Note-16.1.A to the Financial Statements,
whether the company has adequate internal stating that the Company has filed an application
financial controls system in place and the with Insurance Regulatory and Development
operating effectiveness of such controls. Authority of India on 31-July-2018 for surrender of
• Evaluate the appropriateness of accounting the Corporate Agency License Certificate with effect
policies used and the reasonableness of from 1-Aug-2018. Accordingly, these financial
a c co u nt i n g e st i m ate s a n d re l ate d statements have been prepared based on the
disclosures made by management. assumption that the Company is not a going
concern.
• Conclude on the appropriateness of
management's use of the going concern Report on Other Legal and Regulatory
basis of accounting and, based on the audit Requirements
evidence obtained, whether a material As required by the Companies (Auditor's Report)
uncertainty exists related to events or Order, 2016 (“the Order”), issued by the Central
conditions that may cast significant doubt on Government of India in terms of sub-section (11) of
the Company's ability to continue as a going section 143 of the Companies Act, 2013, we give in
concern. If we conclude that a material the Annexure-I a statement on the matters
uncertainty exists, we are required to draw specified in paragraphs 3 and 4 of the Order, to the
attention in our auditor's report to the extent applicable.
related disclosures in the financial
statements or, if such disclosures are As required by Section 143(3) of the Act, we report
inadequate, to modify our opinion. However that:
based on the audit evidence obtained up to
the date of our auditor's report the Company a) We have sought and obtained all the
is not a going concern and this fact has been information and explanations which to the
adequately disclosed in Note-16.1.A to the best of our knowledge and belief were
financial statements. necessary for the purposes of our audit.
• Evaluate the overall presentation, structure b) In our opinion, proper books of account as
and content of the financial statements, required by law have been kept by the
150
Company so far as it appears from our g) With respect to the other matters to be
examination of those books. included in the Auditor's Report in
accordance with Rule 11 of the Companies
c) The Balance Sheet, the Statement of Profit (Audit and Auditors) Rules, 2014, in our
and Loss, and the Cash Flow Statement dealt opinion and to the best of our information
with by this Report are in agreement with and according to the explanations given to
the books of account. us:
d) In our opinion, the aforesaid standalone i. The Company has disclosed the impact
financial statements comply with the of pending litigations on its financial
Accounting Standards specified under position in its financial statements -
Section 133 of the Act, read with Rule 7 of Refer Note-16.2 F to the financial
the Companies (Accounts) Rules, 2014. statements.
e) On the basis of the written representations ii. The Company did not have any long-
st
received from the directors as on 31 March, term contracts including derivative
2019 taken on record by the Board of contracts for which there were any
Directors, none of the directors is material foreseeable losses.
disqualified as on 31st March, 2019 from
being appointed as a director in terms of iii. There were no amounts which were
Section 164 (2) of the Act. required to be transferred to the
Investor Education and Protection Fund
f) With respect to the adequacy of the internal by the Company.
financial controls over financial reporting of
the Company and the operating
effectiveness of such controls, refer to our
separate Report in “Annexure-II”.
Himanshu Sharma
Place : New Delhi (Partner)
Date : 25th April, 2019 Membership No.524707
151
ANNEXURE ‘I’ 6. Clause 3(vi) of CARO is not applicable as the
Company is not engaged in production of such
The Annexure referred to in paragraph 1 of Report on goods and providing such services as
Other Legal and Regulatory Requirements of our prescribed by Central Government for
Report of even date to the members of IFFCO TOKIO maintenance of cost records.
Insurance Services Limited on the accounts of the
st
Company for the year ended 31 March, 2019. 7. (a) According to the information and
explanations given to us and on the basis
On the basis of such checks as we considered of our examination of the books of
appropriate and according to the information and account, generally the Company is
explanation given to us during the course of our regular in depositing the undisputed
audit, we report that: statutory dues including Provident
Fund, Employees' State Insurance,
1. (a) According to the information and Income-tax, Sales-tax, Wealth Tax,
explanations given to us, the Company Service Tax, duty of customs, duty of
did not have any fixed assets during the excise, value added tax, cess and any
financial year. other statutory dues, as applicable, with
the appropriate authorities. According
(b) According to the information and to the information and explanations
explanations given to us, there was no given to us there were no outstanding
st
immovable property held in the name of statutory dues as on 31 of March, 2019
the company during the financial year for a period of more than six months
st
ended on 31 March, 2019. from the date they became payable.
2. The Company did not held any inventory during (b) According to the information and
the financial year ended on 31st March, 2019, explanations given to us, there is no
therefore, the clause 3 (ii) of the Order is not amount payable in respect of income
applicable to the Company. tax, wealth tax, service tax, duty of
customs, duty of excise, value added tax,
3. According to the information and explanations cess and any other statutory dues which
given to us and on the basis of our examination have not been deposited on account of
of the books of account, the Company has not any disputes except:
granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships • Demand of ` 87,43,885 for the
or other parties covered in the register period from Apr, 2006 to Mar, 2012
maintained under Section 189 of the raised by Service tax department.
Companies Act, 2013. Consequently, the The Company has filed appeal
provisions of clauses (iii)(a), (iii)(b) and (iii)(c) of against the said order on 29-May-
the CARO are not applicable to the Company. 2017.
152
8. Clause (viii) of the CARO is not applicable as the 12. The Company is not a Nidhi Company; hence
Company did not have any loan or borrowing clause (xii) of the CARO is not applicable.
from a financial institution, bank, Government
or dues to debenture holders during the 13. Based on the audit procedures performed and
financial year ended on 31st March, 2019. the information and explanations given to us,
all transactions with the related parties are in
9. Based on our audit procedures and on the compliance with 188 of Companies Act, 2013
information given by the management, we and the details have been disclosed in the
report that the company has not raised any Financial Statements, as required by the
money by way of initial public offer, further applicable accounting standards. Section 177
public offer or by way of term loans during the of the Companies Act, 2013 is not applicable as
year. Therefore, the clause 3(ix) of CARO is not the Company is not a listed Company.
applicable to the Company.
14. The Company has not made any preferential
10. Based on the audit procedures performed and allotment or private placement of shares
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the information and explanations given to us, during the financial year ended on 31 March,
we report that no fraud on or by the Company 2019; hence clause (xiv) is not applicable.
has been noticed or reported during the year.
15. According to the information and explanations
11. As per information and explanations given to us given to us, the company has not entered into
the Company has not appointed a Manager and any non-cash transactions with directors or
further it is not paying any remuneration to any persons connected with him.
of its directors, therefore in our opinion
provision of Section 197 and schedule V to the 16. Clause (xvi) of the Order is not applicable as the
Companies Act, 2013 are not applicable to the company is not required to be registered under
Company. section 45-IA of the Reserve Bank of India Act,
1934.
Himanshu Sharma
Place : New Delhi, (Partner)
Date : 25th April, 2019 Membership No.524707
153
ANNEXURE-II
The Annexure referred to in paragraph 2 of Report on Other Legal and Regulatory Requirements of our
Report of even date to the members of IFFCO TOKIO Insurance Services Limited on the Internal Financial
Controls required under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013.
We have audited the internal financial controls over financial reporting of IFFCO TOKIO INSURANCE SERVICES
LIMITED as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the
Company for the year ended on that date.
The Company's management is responsible for establishing and maintaining internal financial controls based
on the internal control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the
design, implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company's
policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial information, as
required under the Companies Act, 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting
based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal
Financial Controls over Financial Reporting and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal
financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of
Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting was established and maintained and if such controls
operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financial controls system over financial reporting and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of internal financial controls
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk. The procedures selected
depend on the auditor's judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion on the Company's internal financial controls system over financial reporting.
154
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.
A company's internal financial control over financial reporting includes those policies and procedures that
1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company;
2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and
3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the company's assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may occur and
not be detected.
Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are
subject to the risk that the internal financial control over financial reporting may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial
reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019,
based on the internal control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India.
Himanshu Sharma
Place : New Delhi (Partner)
th
Date : 25 April, 2019 Membership No.524707
155
IFFCO-TOKIO INSURANCE SERVICES LIMITED
C - 1, IFFCO SADAN, DISTRICT CENTRE SAKET, NEW DELHI - 110017
CIN - U65999DL2003PLC121571
BALANCE SHEET AS AT 31st MARCH, 2019 (Amount In `)
st
S. No. Particulars Note No. As at 31 March As at 31st March
2019 2018
I. EQUITY AND LIABILITIES
(1) Shareholder's funds
a) Share capital 1 5,000,000 5,000,000
b) Reserves and Surplus 2 29,976,351 16,611,293
c) Money received against share warrants - -
(2) Share application money pending allotment - -
(3) Non current liabilities
a) Long-term borrowings - -
b) Deferred tax liabilities (Net) - -
c) Other long term liabilities - -
d) Long-term provisions 3 (a) - 49,932,796
(4) Current liabilities
a) Short-term borrowings - -
b) Trade payables - -
c) Other current liabilities 4 46,963,787 21,502,533
d) Short term provisions 3 (b) 7,482,000 102,915,243
TOTAL 89,422,138 195,961,865
II. ASSETS
(1) Non current assets
a) Tangible fixed assets
Gross block - -
Less : Accumulated depreciation - -
Net block - -
b) Non current investments - -
c) Deferred tax assets (Net) - 14,570,000
d) Long term loans & advances 5 88,377,467 145,053,709
e) Other non current assets - -
(2) Current assets
a) Trade receivables 6 - -
b) Cash and Bank Balances 7 883,204 16,178,914
c) Short term loans and advances 8 123,863 10,042,844
d) Other current assets 9 37,604 10,116,398
Notes to Accounts 16
Notes 1 to 16 form an Integral part of Financial Statements For IFFCO TOKIO Insurance Services Ltd.
As per our report of even date attached
Nand Kishore Kedia
For Raghu Nath Rai & Co. Chairman (DIN: 00050917)
Chartered Accountants
FRN No. 000451N P. Periasamy
Director (DIN: 06910160)
Himanshu Sharma
Santimoy Dey
Partner
Director (DIN: 06875452)
M.No. 524707
Ramesh Kumar
Place : New Delhi CEO
Date : 25th April, 2019
156
IFFCO-TOKIO INSURANCE SERVICES LIMITED
C - 1, IFFCO SADAN, DISTRICT CENTRE SAKET, NEW DELHI - 110017
CIN - U65999DL2003PLC121571
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2019
(Amount In `)
st
S. No. Particulars Note No. As at 31 March As at 31st March
2019 2018
Revenue:
I Revenue from operations 10 324,897,794 860,653,546
Other income 11 13,724,056 2,716,835
Total Revenue 338,621,850 863,370,381
II Expenses:
Employees benefits expenses 12 242,297,867 699,679,443
Finance costs 13 81,304 131,791
Other expenses 14 61,345,205 159,390,965
Total Expenses 303,724,376 859,202,199
III Profit before exceptional and extraordinary items and tax 34,897,474 4,168,182
IV Exceptional items - -
V Profit before extraordinary items and tax 34,897,474 4,168,182
VI Extraordinary items - -
VII Profit before tax 34,897,474 4,168,182
VIII Tax expense:
(1) Current tax 7,185,000 1,509,855
(2) Deferred tax 14,570,000 882,000
(3) Tax adjustments for earlier years (222,585) 395,574
(4) Credit for MAT entitlement/MAT credit utilised - 1,247,145
IX Profit/(Loss) for the period 13,365,059 133,608
X Earning per equity share: 15
(1) Basic (Face Value of `10 each) 26.73 0.27
(2) Diluted (Face Value of `10 each) 26.73 0.27
Notes to Accounts 16
Notes 1 to 16 form an Integral part of Financial Statements For IFFCO TOKIO Insurance Services Ltd.
As per our report of even date attached
Nand Kishore Kedia
For Raghu Nath Rai & Co.
Chairman (DIN: 00050917)
Chartered Accountants
FRN No. 000451N P. Periasamy
Director (DIN: 06910160)
Himanshu Sharma
Partner Santimoy Dey
M.No. 524707 Director (DIN: 06875452)
157
IFFCO-TOKIO INSURANCE SERVICES LIMITED
C-1, IFFCO SADAN, DISTRICT CENTRE SAKET, NEW DELHI - 110017
CIN - U65999DL2003PLC121571
CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2019
(Amount In `)
Particulars For the year ended For the year ended
31st March, 2019 31st March, 2018
A. Cash flows from operating activities
Cash receipts from customers 327,858,695 880,982,889
Cash paid to suppliers and employees (403,400,980) (856,076,505)
Cash generated from operations (75,542,285) 24,906,384
Interest paid - -
Dividends paid - -
(75,542,285) 24,906,384
Income taxes (paid)/refund 47,726,791 (32,811,595)
Notes to Accounts 16
Notes 1 to 16 form an Integral part of Financial Statements For IFFCO TOKIO Insurance Services Ltd.
As per our report of even date attached
Nand Kishore Kedia
For Raghu Nath Rai & Co. Chairman (DIN: 00050917)
Chartered Accountants
FRN No. 000451N P. Periasamy
Director (DIN: 06910160)
Himanshu Sharma
Partner Santimoy Dey
M.No. 524707 Director (DIN: 06875452)
Ramesh Kumar
Place : New Delhi
CEO
Date : 25th April, 2019
158
IFFCO TOKIO INSURANCE SERVICES LIMITED
C-1, IFFCO SADAN, DISTRICT CENTRE SAKET, NEW DELHI - 110017
CIN - U65999DL2003PLC121571
NOTES TO BALANCE SHEET
(Amount In `)
st
Notes Particulars As at 31 March As at 31st March
No. 2019 2018
1 SHARE CAPITAL
(a) Equity share capital
Authorised :
2,000,000 Equity Shares of `10 each 20,000,000 20,000,000
(b) Issued, Subscribed & Paid up:
500,000 Equity Shares of `10 each fully paid up 5,000,000 5,000,000
(100% shares held by IFFCO Tokio General Insurance Co. Ltd.)
(c) Reconciliation of number of shares outstanding at the
beginning & at the end of the reporting period
Equity Shares
Number of Shares at the beginning 500,000 500,000
Add: Shares issued during the period - -
Number of Shares at the end 500,000 500,000
(d) Shares in the Company held by each Shareholder holding
more than 5% shares
Name of the Shareholder
IFFCO-Tokio General Insurance Co. Ltd.
No. of Shares 500,000 500,000
% Shareholding 100 100
2 RESERVES AND SURPLUS
Surplus in the Statement of Profit & Loss
Balance as per Last Finacial Statements 16,611,292 16,477,685
Profit for the year 13,365,059 133,608
Total 29,976,351 16,611,293
3 PROVISIONS
3(a) Long-term Provisions
Provision for leave encashment - 49,932,796
- 49,932,796
3(b) Short-term Provisions
Provision for leave encashment - 6,846,715
Provision for gratuity - 9,237,852
Provision for expenses 297,000 69,873,816
Provision for income tax 7,185,000 1,509,855
Provision for leave travel subsidy - 15,447,005
7,482,000 102,915,243
Total 7,482,000 152,848,039
4 OTHER CURRENT LIABILITIES
Statutory dues 96,975 15,736,600
Amount payable for services (including temporary advance)* 46,099,544 3,317,672
Other liabilities 767,268 2,448,261
*Includes due to related parties ` 45,824,144/- (Previous Year: ` 29,53,172/-)
Total 46,963,787 21,502,533
5 LONG TERM LOANS & ADVANCES
Rent, Electricity & Other Deposits 10,000 7,672,181
Balance with Statutory Authorities 88,367,467 137,381,528
Total 88,377,467 145,053,709
159
Notes Particulars As at 31st March As at 31st March
No. 2019 2018
6 TRADE RECEIVABLES
Unsecured, considered good unless stated otherwise
- Outstanding for a period exceeding six months - -
- Other receivables* - -
Total - -
7 CASH AND BANK BALANCES
Cash and Cash Equivalents
Balance with scheduled banks
- In current accounts 883,204 3,578,914
Other Bank balances
Fixed deposits* - 12,600,000
*Includes fixed Deposit of ` NIL (Previous Year ` 76,00,000/-)
with maturity less than 12 months
Total 883,204 16,178,914
8 SHORT TERM LOANS & ADVANCES
Unsecured, considered good
Advances recoverable in cash or kind 123,863 6,258,071
Imprest with Staff - 1,265,098
Prepaid expenses - 2,519,675
Total 123,863 10,042,844
9 OTHER CURRENT ASSETS
Rent, Electricity & Other Deposits 37,604 5,432,566
Interest accrued but not due on deposits - 1,756,629
Other Assets - 2,927,203
Total 37,604 10,116,398
160
Notes Particulars As at 31st March As at 31st March
No. 2019 2018
13 FINANCE COST
Bank charges 80,086 120,089
DD charges 1,218 11,702
Total 81,304 131,791
14 OTHER EXPENSES
Books & Periodicals - 323,578
Campaign expenses (288,171) 2,782,615
Communication expenses 3,117,410 10,890,827
Rates & Taxes 312,379 460,282
Rent 22,736,036 52,646,619
Repair & Maintenance 9,830,076 17,059,643
Recruitment expenses - 47,681
Training expenses 94,000 11,621,179
Travelling and conveyance 12,667,390 33,787,868
Printing and stationery 2,117,691 7,683,714
Legal & Professional expenses 1,796,878 3,717,852
Insurance charges 3,513,865 7,119,209
Electricity & Water charges 5,195,651 11,069,898
Payment to Auditors
- Audit fee 196,000 140,000
- Tax Audit fees 56,000 40,000
Total 61,345,205 159,390,965
15 EARNING PER SHARE
I) Net Profit as per Profit and Loss account available for
Equity Shareholders 13,365,059 133,608
II) Weighted average number of equity share for
Earning Per Share computation
(a) For Basic Earning Per Share of ` 10 each (No's) 500,000 500,000
(b) For Diluted Earnings Per Share of ` 10 each (No's) 500,000 500,000
III)EPS (Weighted Average)
Basic (Rupees) 26.73 0.27
Diluted (Rupees) 26.73 0.27
161
NOTE - 16
NOTES FORMING PART OF ACCOUNTS
16.1 SIGNIFICANT ACCOUNTING POLICIES
A) Basis of Preparation
The financial statements are prepared based on the assumption that the Company is not a going concern
due to following reasons:-
1) The Company's revenue from operations is solely from the revenue earned under Corporate
Agency and Service Agreement with IFFCO TOKIO General Insurance Company Limited
(hereinafter referred to as ITGI). On 29-Jun-2018, the Company had received a notice from ITGI for
the termination of both Corporate Agency and Service Agreements with effect from 1-Aug-2018
which was accepted by the Company vide its letter dated 2-Jul-2018.
2) The Company filed an application with IRDAI for surrender of the Corporate Agency Registration
Certificate w.e.f. 01-Aug-2018 on 31-Jul-2018. IRDAI has accepted the application vide its letter
dated 20-Mar-2019.
Current assets and loans & advances have value on realisation in the ordinary course of business at least
equal to the amount at which they are stated and all known liabilities have been adequately provided for.
B) Use of Estimates and Judgements
The presentation of the financial statements in conformity with the Generally Accepted Accounting
Principles requires the management to make estimates and assumptions that affects the reported
amount of assets and liabilities, revenue and expenses and disclosure of contingent assets and liabilities.
Such estimates and assumptions are based on the management's evaluation of the relevant facts and
circumstances as on the date of financial statements. Difference between the actual results and estimates
are recognized in the period in which the results materialize.
C) Revenue Recognition
1) Income from services is recognized when the services are rendered.
2) Interest Income is recognized on the time basis determined by the amount outstanding and the
rate applicable.
D) Fixed Assets and Depreciation
Fixed Assets are stated at cost less accumulated depreciation. Depreciation on Fixed Assets is provided on
straight Line Method at the rates and in the manner specified in Schedule II of the Companies Act, 2013.
E) Taxation
Income Tax expense comprises Current Tax and Deferred Tax charge or credit. Deferred tax resulting from
'timing differences' between book and taxable profits is accounted for using the tax rates and laws that
have been enacted or substantively enacted. The deferred tax asset is recognized and carried only to the
extent that there is a reasonable/virtual certainty that the asset will be realized in future.
F) Provisions and Contingent Liabilities
A provision is recognized where the Company has a present obligation as a result of a past event and it is
probable that an outflow of resources will be required to settle the obligation and in respect of which a
reliable estimate can be made. A disclosure of contingent liability is made when there is possible
obligation or present obligation that will probably not require outflow of resources or where reliable
estimate of the obligation cannot be made.
G) Employees Benefits
1) Defined Contribution Plan: Company contribution paid/payable for the year to defined
contribution employee benefit schemes are charged to Profit & Loss account.
162
2) Defined Benefit Plan: Company liabilities toward defined benefit schemes are determined using
the Projected Unit Credit Method. Actuarial valuation under the Projected Unit Credit Method is
carried out at Balance Sheet date. Actuarial gains and losses are recognized in the Profit & Loss
account in the period of occurrence of such gains and losses. Past services cost is recognized
immediately to the extent of benefit are vested; otherwise it is amortized on straight line basis over
the remaining average period until the benefit becomes vested.
3) The retirement benefit obligation recognized in the balance sheet represents the present value
of the defined benefit obligation as adjusted for unrecognized past service cost.
16.2. NOTES TO ACCOUNTS
A. Employees Benefits
All the employees of the Company have resigned on 31-Aug-2018, therefore the Company has made
contribution to defined contribution plans (Employees Provident Fund – EPF) upto August, 2018 only.
Therefore, no actuarial valuation is required for defined benefit plans i.e. gratuity and leave
encashment.
The details of various benefits provided to employees are given as under:
a) Defined Contribution Plans
The Company makes contributions at a specified percentage of payroll cost towards Employee
Provident Fund (EPF) for qualifying employees. The Company recognized ` 81,04,172/- (Previous
year ` 1,86,86,643/-) as expense towards provident fund contribution in the profit & loss
account.
b) Defined Benefit Plans
i. Leave Encashment/Compensated Absences.
The Company has paid all the liability towards leave encashment payable to employees.
Excess provision of leave encashment of ` 88,08,104 has been reversed in books of
accounts.
ii. Gratuity.
The Company makes contribution to a gratuity fund managed by the Life Insurance
Corporation of India (LIC) to discharge gratuity liability to the employees. Gratuity Fund
(LIC) has sufficient balance to discharge the obligation of the employees as on 31-Aug-
2018, therefore excess provision of gratuity of ` 92,37,852/- has been reversed in the
books of accounts.
B. Operating Leases
The Company's significant leasing agreements are in respect of operating leases of premises for the
offices of the company. These leasing arrangements are usually renewable on mutually agreed terms
but are cancellable. All the operating leases of premises for the offices of the company had been
cancelled during the year. Amount charged to revenue accounts for cancellable operating lease is `
2,27,36,036/- (Previous year ` 5,26,46,619/-).
C. During the year, the Company has written down the entire carrying amount of deferred tax asset as
there is no virtual certainty with convincing evidence that there will be sufficient future income
against which deferred tax asset can be adjusted. Net Decrease of deferred tax amounting `
1,45,70,000/- (Previous Year ` 8,82,000/-) is recognized in the accounts.
163
D. Related Party Disclosures:
Related party disclosures as required as per Accounting Standard-18 on “Related Parties Disclosures”
are given below:
(Amount in `)
IFFCO TOKIO Indian Farmers Fertilizers Sh. Srikanth Charan
Nature of Relation General Insurance Company Ltd Cooperative Ltd Mudigonda
E. The Company is engaged in the business of soliciting insurance business and providing insurance related
services. There is no separate reportable segment for the purpose of segmental reporting as per
Accounting Standard – 17 on “Segment Reporting”.
F. Contingent Liabilities:
(Amount in `)
G. In terms of notification dated September 4, 2015 issued by the Central Government of India, the
disclosure related to trade payables as at March 31, 2019 are as follows:
(Amount in `)
164
(Amount in `)
As per our report of even date attached. For IFFCO TOKIO Insurance Services Ltd.
165
Notes
166
Notes
167
Notes
168
169
Our People, Our Wealth.