<dhhead>Board of Director's Report of</dhhead>
To the Members
General Insurance Corporation of India
The Directors have pleasure in presenting the Fifty-Second Annual
Report of the General Insurance Corporation of India (GIC Re or the Corporation) on the
working and affairs of the Corporation along with the audited statements of accounts for
the year ended 31st March 2024.
FINANCIAL RESULTS:
The highlights of the financial results for the year under review are
as under:
(Rs in crore)
Particulars |
2023-24 |
2022-23 |
1. Gross premium |
37,181.76 |
36,591.59 |
2. Net Premium |
33,955.79 |
33,644.43 |
3. Net Earned Premium |
33,576.07 |
35,808.01 |
4. Net Incurred Claims |
30,980.41 |
32,739.38 |
% to Earned Premium |
92.3% |
91.4% |
5. Net Commission |
6,246.75 |
5,610.51 |
% to Earned Premium |
18.6% |
15.7% |
6. Operating Expenses and Other Outgo less
Other Income |
296.19 |
(191.96) |
7. Investment Income Apportioned to Revenue
less expenses |
8,084.15 |
7,520.37 |
8. Premium De_ciency |
59.27 |
(8.54) |
9. Total Profit/Loss (-) (3+7-4-5-6-8) |
4,077.59 |
5,179.00 |
10. Interest, Dividends & Rents (net) and
Profit on sale of Investments |
3,536.25 |
3,073.62 |
11. Other Income less Other Outgo |
994.26 |
419.59 |
12. Reserve for Doubtful Debts
and Investment including Amortization of Investments Written off and diminution in the
value of investments written off |
142.68 |
410.23 |
13. Profit before Tax (9+10+11-12) |
7,877.93 |
7,749.44 |
14. Provision for tax including deferred
taxes |
1,380.62 |
1,436.94 |
15. Profit after Tax (13-14) |
6,497.30 |
6,312.50 |
(Net Earned Premium is arrived after adjustments for Reserve for
Unexpired Risks) (Percentages relate to the net earned premium of the corresponding year)
(Obligatory sessions from Domestic Insurance Companies reduced from 10%
to 5% w.e.f. 01.04.13 vide IRDA/NL/RI/41/2012-13 dated 03.03.2013 and is further reduced
from 5% to 4% w.e.f. 01.04.2022 vide IRDAI/RI/1/180/2022 dated 10.01.2022)
DIVIDEND & DIVIDEND DISTRIBUTION POLICY
The Board of Directors at its meeting held on 28th May 2024,
recommended the payment of dividend of Rs 10/- per share of Face Value of Rs 5/- each
(i.e. 200% of paid-up equity share capital) for FY 2023-24 as against dividend of Rs 7.20
per share for FY 2022-23.
In accordance with the Regulation 43A of Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing
Regulations), the Corporation has formulated a dividend distribution policy and the same
is available on the website of the Corporation at
https://www.gicre.in/images/pdf/Dividend_Distribution_policy-_2022_Ver_20.pdf
CAPITAL AND FUNDS
Capital and Funds of the Corporation stood at Rs 123,496.63 Crore as on
31st March 2024 as against Rs 111,523.23 Crore in the previous year, the
details of which are given below: ( Rs in crore)
Particulars |
As on 31.03.2024 |
As on 31.03.2023 |
Shareholders' Funds |
37,581.78 |
32,356.08 |
Policyholders' Funds |
85,914.85 |
79,167.15 |
Total Funds |
123,496.63 |
111,523.23 |
Note: As per the Regulatory norms, Shareholders' funds as on
31.03.2024 also include foreign currency translation reserve.
SHAREHOLDERS' FUNDS FOR THE LAST 5 YEARS
The amount proposed to be carried to reserves is mentioned in the
financial statement.
ASSETS
Total assets of the Corporation were Rs 1,78,285.82 Crore as on 31st
March 2024 as compared to Rs 1,57,124.60 Crore as on 31st March 2023.
CONSOLIDATED FINANCIAL STATEMENT
As per the provision of Section 129(2) of the Companies Act, 2013, at
every Annual General Meeting of a company, the Board of Directors of the company shall lay
before such meeting financial statements for the financial year. Section 129(3) of the
Companies Act, 2013 provides that where a company has one or more subsidiaries, it shall,
in addition to financial statements provided under sub-section (2) of Section 129, prepare
a consolidated financial statements of the company and of all the subsidiaries in the same
form and manner as that of its own which shall also be laid before the Annual General
Meeting of the company along with the laying of its financial statements under sub-section
(2) of Section 129.
Explanation:
The Corporation is preparing Consolidated Financial Statements as it
has three subsidiaries namely GIC Re South Africa Limited, GIC Re, India, Corporate Member
Limited, UK and GIC Perestrakhovanie LLC, Moscow apart from three Associate Companies
namely, Agriculture Insurance Company of India Ltd. (AICIL), India International Insurance
Pte. Ltd., Singapore and GIC Bhutan Re Ltd.
FINANCIAL RATING AND RANKING
AM Best has revised the outlook to positive from stable for the
Financial Strength Rating (FSR) and to positive from negative for the Long-Term Issuer
Credit Rating (Long-Term ICR) and afirmed the FSR of B++ (Good) and the Long-Term ICR
"bbb+" (Good) of General
Insurance Corporation of India (GIC Re) (India). Additionally, AM Best
has assigned the India National Scale Rating (NSR) of aaa.IN (Exceptional) to GIC Re. The
outlook assigned to the NSR is stable.
These Credit Ratings (ratings) reflect GIC Re's balance sheet
strength, which AM Best assesses as strong, as well as its adequate operating performance,
favourable business profile and appropriate enterprise risk management (ERM). In addition,
the ratings factor in a neutral impact from the company's ownership by the government
of India.
The revision of the Long-Term ICR outlook to positive from negative
reflects an improvement in AM Best's view of GIC Re's balance sheet strength and
ERM fundamentals. Both GIC Re's risk-adjusted capitalisation and regulatory solvency
position have shown sustained improvement over the past three years.
CARE Ratings Ltd. has reafirmed AAA (Is)' Issuer Rating for
the Corporation in February 2024 with a stable outlook. The rating reflects GIC Re's
strategic importance as the dominant Indian reinsurer. The rating also factors in its
experienced management, diversified business profile and comfortable liquidity and
solvency position.
SOLVENCY RATIO
The Solvency Margin of the Corporation as on 31st March 2024
stood at 3.25 as against 2.61 in the previous year.
INVESTMENTS
The book value of the investment of the Corporation in India
(representing investment, loans & deposits) amounts to Rs 96,299.27 crore as against
Rs 86,175.41 crore in the previous year. The Investment income of Rs 10,564.42 crore were
apportioned to Policyholders & Shareholders as under: ( Rs in crore)
Particulars |
2023-24 |
2022-23 |
Apportioned to Policyholders (PH) |
7,349.67 |
7,076.52 |
Apportioned to Shareholders (SH) |
3,214.75 |
2,891.81 |
* Ratio of PH/SH 69.57/30.43
The mean yield on funds with profit on sale of investments stood at
11.6% (previous year 12.2%). The percentage of net NPA (Non-performing Assets) to Gross
loan assets (including Government Securities) was 0.00% (Previous year 0.02%).
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA _IRDAI_
The Corporation being a Reinsurance Company, its working and functions,
are governed by the Insurance Regulatory and Development Authority of India (IRDAI). The
Corporation's existing paid-up equity capital of Rs 877.20 Crore conforms to the
specifications of the IRDAI. The Accounts of the Corporation are drawn up according to the
stipulations prescribed in the IRDAI (Preparation of Financial Statements and
Auditor's Report) Regulations, 2002.
IRDAI has identified the Corporation as a Domestic Systemically
Important Insurer (D-SII) for 2023-24 as per the framework put in place for identification
& monitoring of the operations of Domestic Systemically Important Insurers.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The provisions of Section 186(4) of the Companies Act, 2013 (the Act)
requiring disclosure in the financial statements of the full particulars of the loans
given, investment made or guarantee given or security provided and the purpose for which
the loan or guarantee or security are proposed to be utilised by the recipient of the loan
or guarantee or security are not applicable to the Corporation.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS
There are no significant and/or material orders passed by the
Regulators or Courts or Tribunals impacting the going concern status of future operations
of the Corporation.
ENTERPRISE RISK MANAGEMENT _ERM_
The Corporation has in place a robust ERM policy. The policy defines a
Governance structure as well as the roles and responsibilities at each level. The ERM
department is headed by the Chief Risk Officer (CRO) who reports to the Board Risk
Management Committee through the Chairman cum Managing Director (CMD) and Management-level
ERM committee.
ERM department conducts risk assessment with the assistance of the Risk
and Mitigation Plan Owners (RMOs), primarily Scale V level officers, where new risks are
brought for discussion and thereafter the entire risk universe is re-calibrated with the
objective of prioritization for mitigation. During the exercise, RMOs also propose
controls/mitigation plans, which post deliberations are implemented. The ERM department
conducts periodic review of the risk universe and checks the control effectiveness. ERM
Department informs these developments and deviations to the Management and Board Risk
Management Committees.
As part of its allied activities, the ERM department reviews the
Business Continuity Plan (BCP) and Business Impact assessment (BIA), a key annual exercise
which aims at providing continuity of services at a defined minimum acceptable level of
critical functions and to safeguard the financial, competitive and reputational position
in the short and medium term.
During the year under review, a neutral Third-Party Consultant was
appointed to carry out the Stress test exercise of the Corporation. The annual Stress test
exercise was carried out for the financial Year 2023-24 based on financial data as on 31st
March 2023. The Stress Test Exercise evaluated scenarios of significant adverse threats to
the future financial condition of the Corporation and found it to be adequately resilient.
The Stress Test Report was presented to the Board and subsequently shared with IRDAI.
The Standard Operating Procedures (SOP) is already in place for two key
functions of the Corporation viz: Reinsurance and Investment and their related accounting
activities and the same are modified on need basis, as per user department requests with
the approval of the Corporation's Enterprise Risk Management Committee.
An Anti-Fraud Policy framed by GIC which covers prevention,
identification, investigation, reporting, monitoring and control of frauds, and is
reviewed annually. The Corporation has declared Zero Tolerance' to any
non-compliance with the terms and conditions of the Anti-Fraud policy. ERM department, as
part of compliance, files the Fraud Monitoring Returns with the Regulator.
The Corporation has put in place a Board approved Risk Appetite
Statement which provides a comprehensive summary of Risk Appetite parameters guiding the
operations of the Corporation. To ensure an appropriate level of capital at all times, the
Board approved Capital Management Plan has been put in place.
During the year under review, as part of BCP, a Drill was conducted at
an Alternate Site (GIC Delhi Office), so as to create awareness, ensure preparedness among
the Critical Resource Team and other Business Continuity Teams in times of emergency. The
BCP is shared with all employees for awareness on the procedures involved in the recovery
of operations.
CORPORATE SOCIAL RESPONSIBILITY _CSR_ REPORTING
The Corporation is having a Corporate Social Responsibility Policy (CSR
Policy) indicating the activities to be undertaken by the Corporation, which has been
approved by the Board.
The CSR Policy may be accessed on the Corporation's website at the
link: https://www.gicre.in/en/people-resources/policies-and-guidelines The CSR Reporting
as per Section 135 of the Companies Act, 2013 is given in Annexure I.
AUDITORS
M/s. KASG & Co., Chartered Accountants, Mumbai and M/s. Mehra Goel
& Co., Chartered Accountants, Mumbai were appointed as Joint Statutory Auditors to
Audit the accounts of the Corporation for the Financial Year 2023-24 by the Comptroller
& Auditor General of India under Section 139 and Section 143 of the Companies Act,
2013. The Joint Statutory Auditors have issued Auditors' Report. The observation made in
the Auditors' Report on the Corporation's financial statements for the financial year
ended on 31st March 2024 are self-explanatory and therefore do not call for any
further comments/information.
Pursuant to the provisions of Section 204 of the Companies Act, 2013,
M/s. Ragini Chokshi & Associates, (a firm of) Practicing Company Secretaries have been
appointed to undertake the secretarial audit of the Corporation. The secretarial audit
report for the financial year ended 31st March 2024 is annexed herewith as Annexure
II. The said report does not contain any qualification or adverse remarks or
disclaimer.
Maintenance of cost records as specified by the Central Government
under sub-section (1) of Section 148 of the Companies Act, 2013, is not applicable to the
Corporation.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, JOINT VENTURES AND
ASSOCIATES
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5
of the Companies (Accounts) Rules, 2014, a separate statement containing salient features
of the Financial Statements of Subsidiary, Associate and Joint Venture Companies in Form
AOC-1 forms part of the Board of Directors' Report for the financial year 2023-24 as Annexure
III and the details on their performance & financial position are given in
Management Discussion & Analysis Report.
Further, in terms of proviso to Section 136(1) of the Companies Act,
2013 and Regulation 46 of the Listing Regulations, 2015, the Corporation will place
separate audited Financial Statements in respect of each of its Subsidiary Company on its
website and also provide a copy to any Shareholder of the Corporation who seeks the same.
The Financial Statements of the Subsidiary Companies will also be kept open for inspection
at the registered offices of the Corporation/the respective Subsidiary Companies.
RELATED PARTY TRANSACTIONS
Related party transactions entered into during the financial year were
on an arm's length basis and in the ordinary course of business. Details of related
party transactions are provided in notes to financial statements.
There were no transactions entered during the year that fall under the
scope of Section 188(1) of the Companies Act, 2013. Accordingly, disclosure of Related
Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form
AOC-2 is not applicable to the Corporation.
Related party transactions are placed before the Audit Committee and
also before the Board wherever necessary in compliance with the provision of the Act and
SEBI Listing Regulations.
The Related Party Transaction policy of the Corporation including
determining material subsidiaries is available on the Corporation's website at
https://www.gicre.in/en/people-resources/policies-and-guidelines.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies
Act, 2013, a copy of the Annual Return for the year ended 31st March 2024, with
the information available up to the date of this report, is placed on the website of the
Corporation at
https://www.gicre.in/en/investors-public-disclosures/investors-en/financial-performance/annual-return
and shall be further updated as soon as possible but no later than sixty days from the
date of the Annual General Meeting.
COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE
A certificate obtained from the Practicing Company Secretary regarding
compliance of conditions of Corporate Governance as stipulated in SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Corporate
Governance Report, forming part of this Annual Report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The operations and future prospects of the Corporation are dealt with
in the Management Discussion and Analysis Report which forms part of the Board of
Directors' Report.
FOREIGN EXCHANGE EARNINGS & OUTGO AND OTHER INFORMATION
The particulars of Foreign Exchange earnings/outgo as required by the
Companies (Accounts) Rules, 2014 is given below: i) Earnings Rs 2,625.14 Crore ii) Outgo
Rs 5,566.79 Crore
The earnings included all receipts denominated in foreign currencies in
respect of premium, recovery of claims, outward commission, and investment earnings but
excluding interbank transfers.
The outgo comprises all payments in foreign currency in respect of
outward premium, claims on reinsurance accepted, commission and expenses of management
(bank charges) but excluding interbank transfers.
Expenses on (a) Entertainment (b) Foreign Tours and (c) Publicity and
Advertisement amounted to _ 12,42,218.51, _ 2,46,58,327.09 and _ 2,68,32,126 respectively
for the year under review.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Corporation is not engaged in any manufacturing activity and as
such there are no particulars to disclose under the Companies (Accounts) Rules, 2014 as
regards Conservation of Energy or Technology Absorption.
PERSONNEL AND INDUSTRIAL RELATIONS
I. Staff Position as on 31st March 2024
Class I |
Officers |
392 |
Class III |
Clerical Staff |
36 |
Total |
|
428 |
II. Composition of Scheduled Caste (SC), Scheduled Tribes (ST) and
Other Backward Class (OBC) in Employee Strength
Cadre |
Total |
|
|
Composition |
|
|
|
|
Employees |
|
|
|
|
|
|
|
|
SC |
% |
ST |
% |
OBC |
% |
Officers |
392 |
73 |
18.62 |
27 |
6.89 |
82 |
20.92 |
Clerical Staff |
36 |
6 |
16.67 |
5 |
13.89 |
6 |
16.67 |
Sub-Staff |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Total |
428 |
79 |
18.45 |
32 |
7.47 |
88 |
20.56 |
III. Welfare of SC/ST & OBC
The Corporation has framed rules as per the National Policy on
Reservations for SC/ST & OBC, which allows reservations, concessions/ relaxations to
SC/ST & OBC, in recruitment and promotions wherever applicable. Special in-house
training classes are conducted for employees who are in the promotion zone, in order to
enable them to acquire knowledge and perform better in the pre-promotional written
examination. The Corporation also organises Online training for SC/ST candidates who apply
for the Recruitment Examination on All India Basis. Various benefits under various Welfare
Trusts are given to SC/ST employees. Quarterly meeting is held with the SC/ ST Union
leaders/members to understand their issues/grievances, if any.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
_PREVENTION, PROHIBITION AND REDRESSAL_ ACT, 2013
The Corporation has been employing women employees in various cadres in
all offices within India and abroad. The Corporation has in place Board approved policy
against Sexual Harassment, in line with the requirement of The Sexual Harassment of Women
At Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees are covered
under the policy. There has been no complaint from any employee during the financial year
2023-24 and hence no complaint is outstanding for redressal as at 31.03.2024.
IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY OF THE CENTRAL GOVERNMENT
The Corporation improved its performance in the implementation of the
O_cial Language Policy of the Government of India and complied with all the guidelines
issued by the Ministry from time to time. As mandated by the O_cial Language Policy of the
Government, inspections of Departments situated in Head office, Mumbai, and inspections of
liaison offices at Delhi were carried out by the offcials of O_cial Language Department.
Four In-house workshops and one online workshop for Delhi Liaison office were organized.
Four meetings of the O_cial Language Implementation Committee were conducted during the
year 2023-24. Apart from the regular translation work, translation of Financial Standing
Order (FSO), and translation regarding updating of GIC portal were also carried out during
the year. The in-house quarterly journal KSHITIJ was published during the year. It was
also made available on the Corporation's website. During the month of September
various competitions were organized to mark "Hindi Day" celebrations to promote
the usage of Hindi language in day-to-day work. The "Hindi Day" Annual Program
was celebrated in the month of September 2023. Almost all Officers and Employees are
having working knowledge of O_cial Language. Hindi typing facility through UNICODE is
available in computers to enable the Officers and Employees to do their day-to-day work in
Hindi. O_cials of GIC have attended all Town O_cial Language Implementation Committee
(TOLIC) meetings and GIC Re has participated in various programs organized under the aegis
of the Town O_cial Language Implementation Committee (TOLIC). This year the O_cial
Language Department of GIC was awarded prizes for Hindi In-house magazine
"KSHITIJ" by TOLIC.
PROCUREMENT OF GOODS & SERVICES FROM MICRO AND SMALL ENTERPRISES
_MSEs_
The Procurement of goods and services are through the GeM portal as per
the Government of India mandate and ensure compliance of all the Government of India
guidelines.
The Government of India has notified a Public Procurement Policy for
Micro and Small Enterprises (MSEs) Order, 2012 and its amendments thereof. GIC Re has
procured 12.44% from MSEs for the year 2023-24.
VIGILANCE
The Vigilance Department of the Corporation is headed by Chief
Vigilance Officer (CVO) in the rank of General Manager, appointed by DFS, MOF, GOI.
Vigilance administration is an integral function of the Organization like any other
function of management, which includes detecting irregularities by conducting various
types of inspection, scrutiny of audit reports, receipt of complaints from various sources
etc., analyzing, and finding out reasons for such irregularities and making effective
preventive vigilance measures and systemic improvements to curb them besides identifying
the offcials responsible for misconduct and taking appropriate punitive actions.
Mainly focusing on preventive vigilance measures besides various
systemic improvements in all areas of the organization, in tune with CVC (Central
Vigilance Commission) guidelines. Vigilance Department has been conducting surprise
inspection, regular inspection, scrutiny of audit reports viz Internal Audit, Concurrent
Audit, CAG, Special Audits etc., and CTE type of inspection (Procurement in Goods, Works
and Services) regularly on monthly/quarterly basis and those findings/lapses are studied
on Vigilance angle. Based on the analysis of reports, suggestions/observations are
recommended to Departments. for improvement of systems and procedures and for revisiting
existing SOP to strengthen further against such lapses. Also, the issues collected from
the Surprise/Regular/CTE type inspection/scrutiny of audit reports, have been discussed in
Structured meeting with CMD on quarterly basis. Under Punitive side, existing cases are
being followed up with Departments. and with advice of CVC wherever applicable, ensuring
that punitive actions are taken in accordance with the General Insurance (Conduct,
Discipline and Appeal) Rules, 2014 (amended up to 28.02.2018). Periodical discussions are
held with various Departments and Training is also imparted to all levels of employees in
the areas of Preventive vigilance, Discipline, and Conduct rules of the Organization by
Vigilance Department. CVC and DFS directives have been implemented strictly in the
Organization. Vigilance Department believes that effective vigilance set up will certainly
ensure the functioning of other segments of the Organization in an efficient way besides
maintaining integrity and ethics among employees of the Organization.
INTERNAL AUDIT DEPARTMENT
The main objective of the Internal Audit is to keep strict control over
all the activities of any organization with a view to facilitate management assurance of
the authenticity of the financial records, efficiency of operations of the firm and to
strengthen the overall governance mechanism.
The Corporation has its systems and controls in place covering all
major areas of operations such as, Underwriting, Investment, Finance and IT system.
To accomplish its objectives in a systematic and disciplined manner,
the Internal Audit Department has utilized the services of professional audit firms.
During the Financial Year 2023-24, M/s Kirtane & Pandit, Chartered Accountants, were
re-appointed as Internal Auditors for Reinsurance Operations and Business Accounts and M/s
S.K. Patodia & Associates, Chartered Accountants, were appointed as Internal Auditors
for Investment Operations and other departments.
The Internal Audit Department also appoints Internal Auditors for
foreign branches of GIC Re in London, Dubai and Malaysia and International Financial
Service Centre Insurance Offices (IIO) at GIFT City.
Besides, the following special audits were also arranged by the
Internal Audit Department:
1. Secretarial Audit
2. Audit of Indian Nuclear Insurance Pool
3. Audit of Indian Market Terrorism Risk Insurance Pool
4. Audit of MCET Pool
Internal Audit Department also liaisons with Comptroller & Auditor
General of India (CAG) and other departments for matters relating to CAG audit. The status
of Draft Paras (DPs) and Inspection Reports (IRs), issued by Comptroller & Auditor
General of India (CAG), is placed before the Board and the Audit Committee of the Board
from time to time.
The Internal Audit Department functions independently under the
supervision of the Audit Committee of the Board. The Audit Reports of GIC Re, Head Office
and Foreign branches are placed before the Audit Committee of the Board for their
consideration and directions. Four (4) meetings of the Audit Committee of the Board were
held during the year 2023-24. Action Taken Reports were presented to the Audit Committee
to report the status of progress on the implementation of the directions of the Committee.
During the year, the guidelines and scope of audit for Appointment of Internal Auditors of
GIC Re, along with foreign branches for Reinsurance and Investment & Non-Reinsurance
functions were reviewed keeping in view the evolving role of auditors in a scenario where
Corporate Governance, regulatory compliance, management reporting systems, transparency
and prevention of fraud has gained increasing importance. Like every year emphasis was
laid on core business activities and audit of Reinsurance underwriting operations,
settlement of outstanding accounts & reconciliations of broker balances, Treaty
acceptances, Cash Call settlements and Settlement of Accounts were audited on concurrent
basis. Other departments like Investments, Human Resources, IT, Communication, General
Accounts, Office Services etc. were also covered during the year.
Besides the major expenditure incurred, both Revenue and Capital,
having financial implications, were also subjected to audit. Audit of Investment
Operations was conducted on concurrent basis. This covered the primary and secondary
market transactions. In line with RBI directions, Subsidiary Government Ledger (SGL) for
Central and State Government Securities were subjected to concurrent audit and
confirmation of correctness of balances and its reconciliation at the end of each month
were sent to RBI. The same was also placed before the Audit Committee at its meetings.
The Audit function in the Corporation has brought about improvement in
data quality, acceleration in claim processing, streamlining of process of accounts
receivable management in the Reinsurance Operations. By critically appraising the
Management of the Corporation of the various systems and processes, the Internal Audit
Department facilitated to strengthen the overall governance mechanism. The Annual Budget
of the Corporation/Mid-Year budget review exercise based on Budget Estimates of individual
Departments placed before the Board were approved and implemented by Internal Audit
Department.
RTI ACT, 2005
The Corporation has in place the stipulated structure to implement the
RTI Act, 2005, in the Organization. The Setup is headed by a General Manager designated as
the Transparency & Nodal Officer. A General Manager functions as the Appellate
Authority, an Assistant General Manager is the Central Public Information Officer, a Chief
Manager discharges the duties of Assistant Public Information Officer under the provisions
of the Act. A Deputy Manager has been nominated as Nodal Officer, MIS.
The Corporate website https://www.gicre.in/en/ also hosts information
as relevant to the Corporation, under the Act. It has separate Right to Information link
developed and continuously updated by the RTI Cell (GIC : Home Page (gicre.in)) containing
information and complying with the provisions under the RTI Act, 2005 and other
Ministerial and CIC circulars.
GIC Re in the FY 2023-24 complied with the guidelines issued by
Ministry of Personnel regarding Implementation of suomotu disclosure u/s 4 of the RTI Act,
2005 and its Audit thereof.
During the period under review (2023-24) the Corporation received Two
Hundred and Thirty-Eight (238) Applications and Fourteen (14) First Appeals under the RTI
Act, 2005. All the Applications were duly replied, and appeals were disposed of well
within the stipulated time. One (1) Second Appeal was filed against the Corporation before
Central Information Commission (CIC) and the same was disposed of by the CIC, during the
period under review.
INFORMATION TECHNOLOGY MANAGEMENT GROUP _ITMG_
The fiscal year 2023-24 marked a transformative period for GIC Re,
showcasing substantial technological advancements across various domains. We achieved a
milestone in technological innovation through the successful completion of Phase 1 of the
S/4 HANA transformation. This phase culminated in a seamless transition from the Oracle
database to the SAP HANA database, with full operational status achieved in March 2023.
We are now progressing with Phase 2 of the S/4 HANA transformation
initiative where the focus is on enhancing the interfaces and reporting capabilities of
our core business applications. This ongoing phase promises to further refine our
operational frameworks and improve our data processing capabilities.
In addition to our database management improvements, GIC Re has made
significant strides in network infrastructure. We transitioned from a traditional MPLS
network to a cutting-edge Software Defined Network (SD-WAN). This shift has optimized
tra_c flow and enhanced performance across the organization by eliminating network
bottlenecks. We are also transforming our Local Area Network (LAN) to a fully wireless
system, aligning our operations with global wireless standards. This transition will
support a more flexible and efficient work environment.
GIC Re has collaborated with CERT-In in the implementation of Phase 2
of the National Cyber Coordination Centre (NCCC) Project. Our network tra_c is now fully
monitored by CERT-In, ensuring enhanced security and robust cybersecurity measures are in
place in a proactive manner.
A company-wide Workflow system is under implementation to facilitate a
paperless office environment, streamlining processes and reducing our ecological
footprint.
As GIC Re continues to evolve and adapt, these initiatives underscore
our commitment to excellence and innovation in serving our stakeholders and maintaining
our leadership in the industry.
TRAINING/HRD
Learning and Development (L & D) policy of GIC Re has been outlined
to aid it in its journey of building in-house capability to achieve effective performance
at workplace. GIC Re is committed to ensuring that all its employees have access to
learning and development opportunities which enable them to acquire knowledge and skills
that are necessary to carry out their role within Corporation, and to develop talent pool
in ways that fit with the Corporation's global standing and nature of business from
futuristic outlook.
At GIC Re, we ensure that employees skills, individual goals and the
performance of employees are aligned with the Organization's goals. The training
programmes are implemented for our employees that will raise awareness and competency of
the employees and enlist their support in improving GIC Re's performance.
In the year 2023-2024, training was imparted to all levels of
employees. Training programmes were conducted through various institutes. Both technical
and behavioural training programmes were conducted throughout the year.
Summary of Training Programmes organised by Training Department is
given below. Training Programmes for the period 2023-24
Type of Training |
No. of Training program |
No. of employees |
Domestic Training |
56 |
269 |
In-House Training |
7 |
151 |
Foreign Training |
2 |
4 |
TOTAL |
65 |
424 |
1. Deep Dive IFRS Training for the Insurance Industry jointly organised
by Institute of Chartered Accountants of India and Institute of Actuaries of India was
undertaken by 24 offcials.
2. Training programme on "Procurement, Tendering and General
Financial Rules (GFR)", 2017 was imparted to the offcials dealing with Procurement.
3. Motor Underwriting Skills training programme was undertaken by the
offcials working in the Motor Underwriting department.
4. Specialised Liability Portfolio Training Programme was organised for
the Liability Department O_cials which included practical aspects of Liability claims too
along with various approaches of Liability Underwriting.
5. The high-end training "Role of IO/PO in conducting enquiries
"was arranged by Insurance Institute of India and 11 employees were trained under the
same.
6. Various trainings like "Cyber Awareness training ",
"Vigilance Administration and Procurement ", "Preventive Vigilance
Programme", "Training on Ethics and Governance" were arranged as a part of
Vigilance Awareness week and many employees were trained under the same.
7. 16 Employees were nominated to the Global Conference of Actuaries
organised by Institute of Actuaries of India.
8. An Online workshop on using Chat GPT & AI Tools was arranged for
the offcials of ITMG to keep abreast with the latest trends in the field of technology.
9. National Insurance Academy initiated Online Diploma Course in
Reinsurance, for which 16 officers of GIC Re enrolled themselves and completed the course.
10. The Training department conducted the pre-promotional training
programme for all eligible employees to equip them for the promotional examination. The
topics like Reinsurance, RI Claims, Accounts, Information Technology, HR etc were covered.
The In-House faculties imparted in-depth knowledge to all the participants.
11. The training department organised a training programme on Effective
use of MS Outlook to all the executives.
12. Training department arranged "IAI and SOA International
Financial Reporting Insurers (IFRI) certificate program" which was conducted by
Institute of Actuaries of India and Society of Actuaries. 15 employees have benefited by
the said programme.
OVERSEAS EXPANSION
Overseas expansion of operations, through branch offices, subsidiaries
and joint ventures is an integral part of the business growth strategy so as to expand the
reach of the operations into multiple countries throughout the world. The Corporation
targets expansion into new markets by efficiently using the potential and creating
additional sustainable income opportunities, both in developed countries, where there is
larger demand and in developing countries where there is increasing demand. Expansion
plans are drawn based on a study of market opportunities, supported by understanding of
the business, working environment and regulations in prospective markets. The Corporation
has also been striking strategic partnership with reinsurers abroad to take advantage of
the expertise and experience of both parties and leverage on economies of scale.
INVESTMENT IN INSURANCE COMPANIES DOMESTIC OPERATIONS AGRICULTURE
INSURANCE COMPANY OF INDIA LTD. (AICIL)
The Corporation holds 35% equity of AICIL and NABARD holds 30% while
the balance is held equally to the extent of 8.75% by the four public sector non-life
insurance companies.
OVERSEAS OPERATIONS
The Corporation has 3 overseas offices viz. Branch Offices in London,
Dubai and Malaysia.
Apart from this, the Corporation has three wholly owned subsidiaries
viz. GIC Re South Africa Ltd., Johannesburg; GIC Re, India, Corporate Member Limited,
London and GIC Perestrakhovanie LLC, Moscow. The Corporation has also invested in the
share capitals of Kenindia Assurance Company Ltd., Kenya, India International Insurance
Pte Ltd., Singapore, Asian Reinsurance Corporation, Bangkok, East Africa Reinsurance
Company Ltd., Kenya, and GIC Bhutan Re Ltd., Bhutan.
LONDON BRANCH (UK)
During the current financial year 2023-24, the Gross Written Premium by
the Branch is GBP 127.11 million compared to GBP 124.74 million last year and earned a
profit of GBP 6.66 million as against a profit of GBP 19.71 million last year.
DUBAI BRANCH (UAE)
During the current financial year 2023-24, the Gross Premium of the
Branch is AED 86.96 million compared to AED 91.95 million last year and the Branch earned
a profit of AED 107.40 million compared to AED 103.8 million last year.
MALAYSIA BRANCH
During the current financial year 2023-24, the Gross Premium written by
the Branch was RM 600.53 million compared to RM 585.97 million and incurred a Profit after
tax of RM 7.27 million as compared to a loss (before tax) of RM 13.5 million.
KENINDIA ASSURANCE CO. LTD., KENYA
The Corporation holds 9.19% shares in Kenindia which has a paid-up
share capital of Kshs 1000 million. The total shares held by the Corporation is 9,18,752
shares of Kshs 100 each as on 31st December 2023. The Company reported a net
profit after tax of Kshs 778.29 million as against net profit after tax of Kshs 1,245.21
million (reinstated) last year. The Board of the Company recommended a dividend of Kshs
7.50 per share for the year ended 31st December 2023.
INDIA INTERNATIONAL INSURANCE PTE. LTD., SINGAPORE
The Corporation holds 20% shares in India International Insurance Pte.
Ltd., which has a share capital of S$ 50 million. The total shareholding of the
Corporation in the Company is 10 mn shares each of S$ 1.
The Company has made a profit of S$ 36.76 million as against a loss of
S$ 8.61 million last year.
The Directors have recommended a first and final dividend of 10% on the
paid-up capital of S$50.00 million for the year 2023.
ASIAN REINSURANCE CORPORATION, BANGKOK
The Corporation is holding 6.16% of the share capital as Associate
Member of Asian Re in addition to holding 0.97% of the share capital as its Regular Member
on behalf of the Government of India. Asian Re has made a profit of USD 3.21 million in
2023 as against a profit of USD 1.83 million in 2022. The Asian Re declared cash dividend
@ 1.8% of total paid up share capital outstanding as on 31st December 2023 at
the 18th Meeting of the Shareholders' Assembly.
EAST AFRICA REINSURANCE COMPANY LTD., KENYA
The Corporation has 14.7521% stake in the share capital of East Africa
Reinsurance Company Ltd., an existing profit-making
reinsurancecompanyinKenya.ThetotalshareholdingoftheCorporationis2,21,281sharesofKshs.1000,ason31stDecember2023.
The Company has made a profit of Kshs. 891.12 million as against a profit of Kshs.
788.51(reinstated) million last year.
The board has recommended a total dividend of Kshs. 200 million (Kshs
133.33 per share) equivalents to 22% of PAT for the year 2023.
GIC BHUTAN RE LTD.
The reinsurance company of Bhutan is a Joint Venture between the
Corporation and local Bhutanese promoters. The venture began its operations in the name
GIC Bhutan Re Ltd.' in December 2013.
The Corporation has a 26% stake in the Joint Venture and held
28,600,000 shares of value Nu 10 each as of 31st December 2023. The rest of the
shareholding are held by Local Bhutanese promoters (29%) and (45%) shares are held by the
public.
The Company has made a profit of Nu 270.85 million (PAT) in 2023 as
against a profit of Nu 153.11 million (PAT) in 2022. The Company has declared 10% dividend
for the year ended 31st December 2023, as per RMA regulations.
GIC RE SOUTH AFRICA LTD.
GIC Re South Africa Ltd. is the Corporation's first 100% owned
subsidiary (Wholly owned subsidiary) which started its commercial operations from 1st
January 2015. The company when acquired was in the run-o_ for both Life as well as
Non-life business. The Corporation holds 571,030,862 no par value ordinary shares with a
value of ZAR 1,142,061,724 constituting 100% of GIC Re South Africa Ltd.'s equity as
of 31st March 2024.
GIC RE, INDIA, CORPORATE MEMBER LIMITED
With the objective of becoming a reputed global reinsurer, the
Corporation expanded into Lloyd's of London by offering reinsurance capacity to
Lloyd's syndicates through quota share capital gearing treaties since 2011. As a
capacity provider, the Corporation was required to have its own Corporate Member at
Lloyd's, the Corporation acquired I-CAT CCM TEN Ltd., an existing corporate Member
company, in November 2013 and renamed it as GIC Re, India, Corporate Member Ltd., which is
registered as a private limited company in the UK. The Company commenced reinsurance
operations in 2014. The business underwritten by the Company is fully reinsured with the
Corporation. The company has not declared payment of any dividend for the year.
GIC PERESTRAKHOVANIE LLC
GIC Perestrakhovanie LLC (GIC Re Russia) commenced its operations
during August 2020. During the year 2022, due to the geopolitical crisis involving Russia
and Ukraine, GIC Re Russia restricted its business activity to the Russian Federation
only. It has been witnessing a drastic drop in the topline owing to the changed dynamics
in the local reinsurance market and therefore, it continues to observe the unfolding
situation closely to realign its strategies in the near future. The subsidiary could close
its financial year ending on 31st December 2023 with a gross written premium of
447 million Rubles. The net incurred claim to earned premium ratio was 73.9%.
LISTING OF EQUITY SHARES
The shares of the Corporation are listed on National Stock Exchange of
India Limited (NSE) and BSE Limited (BSE).
PUBLIC DEPOSITS
The Corporation has not accepted any deposits under Section 73 of the
Companies Act, 2013.
DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL
The Board of Directors of the Corporation as on 31st March
2024 consisted of Six (6) Directors, comprising of Four (4) Independent Directors, One (1)
Government Nominee Director and One (1) Executive Director including Chairman and Managing
Director. None of the Directors are related to any other Director of the Corporation.
The details pertaining to composition and change in Board, committees,
KMP and senior management, details of meetings are provided under Corporate Governance
Report.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent directors have given a declaration that they meet
the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013
and the SEBI (LODR) Regulations. The Independent directors have confirmed that they have
registered with the database maintained by the Indian Institute of Corporate Affairs
(IICA).
The Corporation, being a Government Company, is under the
administrative control of Ministry of Finance (MoF), the power to appoint Directors
(including Independent Directors) vests with the Government of India. The appointment of
Directors is done by MoF after due processes involving screening, review and compliances.
In the opinion of the Board, the Independent Directors possess integrity and the requisite
expertise and experience.
POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR
REMUNERATION
The Corporation being a Government Company, is exempted to furnish
information under Section 134(3)(e) of the Companies Act, 2013 vide MCA Notification dated
5th June 2015.
POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSON AND OTHER EMPLOYEES
The Corporation, being a Government Company, the remuneration payable
to Key Managerial Persons and other employees are as per the Government of India norms.
CODE OF CONDUCT UNDER SECURITIES AND EXCHANGE BOARD OF INDIA
_PROHIBITION OF INSIDER TRADING_ REGULATIONS, 2015
The Corporation has in place a Code of Conduct to regulate, monitor and
report trades in securities by Directors, Employees & Connected Persons which is in
conformity with the Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 2015. The Code is applicable to the Employees of the Corporation,
Designated Persons, and their Immediate Relatives and Connected Persons, to the extent
applicable. The objective of the Code is to prohibit insider trading in any manner by the
Designated Persons and to maintain confidentiality of unpublished price sensitive
information and access to information on a need to know' basis.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Corporation, being a Government Company is subjected to the CVC
Guidelines and the Corporation has a separate Vigilance Department administering the
Vigilance matters.
The Corporation has a Vigil Mechanism/Whistle Blower Policy approved by
the Board and the same is placed on the website of the Corporation.
CORPORATE GOVERNANCE
The Corporation continues to adopt the best practices of Corporate
Governance to ensure transparency, integrity and accountability in its functioning. The
Corporate Governance Report has been incorporated as a separate section, forming part of
this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING
M/s. Ragini Chokshi & Co. has been engaged by the Corporation to
conduct an independent assurance of the sustainability parameters in its Business
Responsibility and Sustainability Report as stipulated under Regulation 34 of the SEBI
(LODR) Regulations. The Assurance Report and Business Responsibility and Sustainability
Report forms part of this Annual Report & has been hosted on the website of the
Corporation and can be viewed at www.gicre.in.
CEO/CFO CERTIFICATION
In terms of the SEBI (LODR) Regulations, the certification by the
Managing Director & CEO and Chief Financial Officer of the Corporation on the
financial statements and internal controls relating to financial reporting has been
obtained.
DETAILS OF UNCLAIMED SUSPENSE ACCOUNT
Details of Unclaimed Suspense Account as provided by our Registrar and
Transfer Agent i.e. KFin Technologies Limited pursuant to Regulation 39 read with Part F
of Schedule V of the SEBI (LODR) Regulations, 2015 is as under:
Sr. No. |
Description |
No. of Shareholders |
No. of Shares |
1 |
Aggregate number of
shareholders and the outstanding shares lying unclaimed as on 01.04.2023 |
01 |
32 |
2 |
Number of shareholders who
approached Listed entity for transfer of shares from suspense account during the year |
0 |
0 |
3 |
Number of shareholders to whom
shares were transferred from suspense account during the year |
0 |
0 |
4 |
Aggregate Number of
shareholders and the outstanding shares lying unclaimed as on 31.03.2024 |
01 |
32 |
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 of the Companies Act, 2013,
the Directors confirm that:
1. In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanations relating to material
departures;
2. The Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Corporation at the end of the
financial year and the profit and loss of the Corporation for that period;
3. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of Companies
Act, 2013 for safeguarding the assets of the Corporation and for preventing and detecting
fraud and other irregularities;
4. The Directors have prepared the annual accounts on a going concern
basis;
5. The Directors have laid down internal financial control to be
followed by the Corporation and that such Internal Financial Controls are adequate and are
operating effectively; and
6. The Directors have devised proper systems to ensure compliance with
applicable laws and that such systems were adequate and operating effectively.
OTHER DISCLOSURE
There has been no material changes and commitment affecting the
financial position of the Corporation which occurred between the end of the financial year
of the Corporation to which the financial statements relate and the date of this report.
There are no significant material orders passed by the
regulator/courts/tribunal which would impact the going concern status of the Corporation
and its future operation.
Annual Return in Form MGT-7 pursuant to the Companies Act, 2013 is
posted on website of the Corporation, www.gicre.in.
BOARD MEETINGS
The Corporation held Seven (7) Board meetings during financial year
2023-24 as detailed below: 25th May 2023 8th July 2023 29th
July 2023 10th August 2023 9th November 2023 8th December
2023 7th February 2024
SECRETARIAL STANDARDS
During FY 2023-24, the Corporation was in compliance with the
mandatorily applicable Secretarial Standards issued by the Institute of Company
Secretaries of India with respect to Board and General Meetings.
SUBMISSION OF ACCOUNTS BEFORE PARLIAMENT
As confirmed by the Ministry of Finance, Insurance Division, the Annual
Report of the Corporation for the year 2022-23 along with Directors Report were placed
before both the Houses of Parliament under Section 394 of the Companies Act, 2013 as per
details given below: LOK SABHA 11th December 2023 RAJYA SABHA 12th
December 2023
ACKNOWLEDGEMENT
The Corporation is grateful to the Insurance Regulatory and Development
Authority of India, Government of India, Reserve Bank of India and Securities and Exchange
Board of India for their continued cooperation, support and guidance. The Corporation
wishes to thank its investors, rating agencies, depositories, Registrar & Share
Transfer Agent & Stock Exchanges for their support.
The Corporation would like to express its gratitude for the continued
support and guidance received from Principal Director of Commercial Audit and Ex-O_cio
Member, Audit Board - I, Mumbai.
The Directors express their appreciation to all employees for their
outstanding contributions, support and commitment towards the growth and success of the
Organisation. Finally, the Directors wish to express their gratitude to the Members for
their trust and support.
|
For and on behalf of the Board of
Directors |
|
Sd/- |
Date: 28.05.2024 |
(N. Ramaswamy) |
Place: Mumbai |
Chairman and Managing Director |