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MESSAGE FROM THE CEO
Dear friends,
The year 2006-07 has been a combination of challenges and
identifying opportunities in them. This year also saw detariffing
which will impact the industry a lot. On one side this offers an
opportunity for us to be able to price the premiums based on the
risk profile of the customers, on the other hand we are already
witnessing a sharp fall in rates.
The highlights of the performance of last year are:
We became the first private insurance company to cross the
Rs. 1 billion mark in profit before tax by generating Rs.117
crores
We emerged as the only company to generate undertaking
profits consistently for the last three years
The net profits rose by 46% to Rs.75 crores
The gross written premium grew to Rs.1803 crore which is a
growth of 40% over the previous year
Our market share grew to 7.2% in 2006-07 compared to 6.3% in
05-06
Issued over 4.9 million policies as against 3.9 million policies,
which bears testimony to our strong infrastructure and deep
penetration
We have also been able to expand geographically & also added a
few new banks as our partners. This year we have to protect market
share while maintaining profitability, this will be a big challenge. I
thank our intermediaries, employees & customers for their
support.
Warm regards
Kamesh Goyal
Ratios for the year ended 31st March
Particulars 2007 2006
Growth in Gross Written Premium 40% 50%
Growth in Net Earned Premium 43% 58%
PBT/Shareholders' Equity 28% 30%
Reserves/Share Capital 274% 151%
Return on Average Equity 24% 24%
Retention 58% 55%
Claims Ratio 66% 70%
Liquid Assets/Net Outstanding Claims 57% 39%
Insurance Reserves/NEP 116% 108%
Shareholders' Equity /NEP 49% 47%
Message from the CEO
A RANGE OF CORPORATE AND
RETAIL PRODUCTS
DE-TARRIFED PRODUCTS SINCE JANUARY 07
Industrial All Risk
Workmen's Compensation
Engineering-Operational (includes Contractor's Plant and
Machinery, Electronic Equipment, Loss of Profits, Boiler
Explosion, Machinery Breakdown, Deterioration of Stocks)
Engineering-Projects (includes EAR, CAR and ALOP)
Fire (including Consequential Loss)
Motor (includes private cars, two wheelers and commercial
vehicles)
OTHER PRODUCTS
Health
- Personal Guard
- Hospital Cash
- Health Guard
- Critical Illness
- Silver Health
- E - opinion
- Star Package
Overseas Travel
Swades Yatra
Aviation
Tea Crop Insurance
Burglary
Cash
Plate Glass
Householders
Shopkeepers
Fidelity Guarantee
Office Package
Motor Dealer's Package
Marine Cargo
Marine Hull
Public Liability Act
Public Liability
Product Liability
Composite Public and Product Liability
Professional Indemnity
Farmer's Package
Cattle Insurance
Credit Insurance
In addition several customised & co-branded
products for Banks are available
OUR PRODUCTS AND SERVICES
Risk Analysis
Risk Grading & Risk Control
HAZOP Studies
Safety Audit
Disaster Management Planning
Risk Management Training
Development and Monitoring of
Risk Management programmes
Insurance Portfolio Analysis
Accident Investigations
BAJAJ ALLIANZ GENERAL INSURANCE - 7 th Annual Report 2006-07
2
STANDING (Left to Right) : T. A. Ramalingam, Head (Underwriting);
Easwara Narayanan, ZM (Mumbai & South);
Vijay Kumar, VP (Motor Insurance); V. Philip, CIO & Head (Direct
Marketing);
Atanu Singh Mukharjee, National Head (Retail & Institutional
Relationships);
Hiren Vora, State Head (Gujarat); Capt. Sanjay Moholkar, VP (Claims);
Dr. Shreeraj Deshpande, VP (Health & Travel Insurance)
SEATED (Left to Right) : Swaraj Krishnan, GM (Reinsurance & Claim);
Ms. Asha Joshi, Appointed Actuary;
S. Sreenivasan, CFO; Kamesh Goyal, CEO; Praveen Gupta, GM;
Tapan Singhel, ZM (Delhi & East); Roopa Abraham, Head (HR)
MANAGEMENT TEAM
Management Team
3
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
4
The Directors have pleasure in presenting the Seventh
Annual Report and Audited Statements of Accounts for the
year 2006-07.
1. MARKET SCENARIO IN THE GENERAL
INSURANCE INDUSTRY
During the year under review general insurance industry
registered a growth of 24% by writing gross premium of Rs. 227
Bn during April 2006 to February 2007 from Rs. 183 Bn in the
corresponding period of the previous year. The private sector
companies grew by 48% increasing their share to Rs. 80 Bn
compared to Rs. 54 Bn in 2005-06. Your company grew by 40%
and maintained its second position among the private sector
companies with a market share of 20%
The general insurance industry, until December 2006 was
regulated by tariffs for three major lines of business viz. Motor,
Fire and Engineering, which accounted for nearly two third of
the market premiums. The last quarter of the current financial
year was eventful for the general insurance industry in that it
moved from a regulated tariff regime to a regime where tariffs
were relaxed partially. In order to ensure a smooth transition,
the regulator has, however, advocated the transition to the new
regime in two phases. In the first phase, only the premium rates
can be changed with a floor on the premium rates but without
any changes in the coverage or contract wordings. In the
second phase, which is expected to be effective from April
2008, insurers will have the freedom to offer flexible products in
DIRECTORS' REPORT
terms of coverage, packaging and pricing across all segments
except Motor Third Party insurance. Effectively the tariff
remains in force albeit with a change in premium rates.
This change, which is a necessary step in the process of letting
market and economic forces drive the way insurance is sold
and bought, provides opportunities as well as challenges. Once
the second phase of de-tariffication is complete, insurers will
have the opportunity to charge premiums according to
coverage and the risk profile of the customers, differentiate
products and compete on service. In the first three months, the
industry has seen severe price competition in the market as
some companies jostled for market share. As the industry
traverses into a de-regulated environment, the focus of
performance measurement of insurers is likely to move away
from gross premium to a more balanced measurement system
including retention, net earned premium and combined ratio.
In the long term it is companies which combine prudent
underwriting skills with sound financial management will
emerge stronger.
The second major development was the formation of the third
party motor reinsurance pool for commercial vehicles to which
all re-insurers cede such business. This pool has come into
effect from 01 April 2007. Although the third party motor
insurance rates have been increased by up to 75%, the increase
is substantially lower than what is required for companies to
earn a reasonable economic profit.
Heinz Dollberg
Director
Sanjiv Bajaj
Director
5
2. SUMMARY OF OPERATIONS FOR THE YEAR
BUSINESS WRITTEN
Your company clocked a gross premium of Rs.18033 Mn.
compared to Rs.12846 Mn. in the previous year, reflecting a
growth of 40%. The net premium for the year rose to Rs 10398
Mn., an increase of 49% over the previous year of Rs. 6987 Mn.,
reflecting your company's strong retention policy.The number
of policies sold grew significantly to 4.90 Mn. policies as
against 3.90 Mn. policies. Your company's market presence as
measured by the number of policies reflects its strong brand
equity and the satisfaction of its customers. The total incurred
claims for the current year including actuarial provisions was
Rs. 5556 Mn. as against Rs. 4100 Mn. in the previous year. The
number of claims reported during the year was 309160 as
compared to 233104 in the previous year.
PRODUCTS
Your company underwrites all business with suitable
underwriting guidelines, which are changed and reviewed in
tune with the market requirements. While no new products
were launched during the year, several existing products were
bundled together and offered as exclusive co-branded
products for the Bancassurance channel. Your company has
bancassurance tie-ups with several regional as well as national
banks.
REGIONAL AND BRANCH OFFICE NETWORK
Geographical reach and further enhancement of efficient
customer service were the twin areas of focus for the year. The
total number of offices of your company exceeded 150. In
addition, existing offices have been re-furbished where
required. Almost all these offices are fully networked with the
Head Office enabling them to issue policies from their location.
The geographical reach has helped in penetration of retail and
rural business across the country.
DISTRIBUTION CHANNELS
To tap the retail business, an efficient distribution channel is a
prerequisite. Right from inception, your company has been
pursuing a strategy of having a multi-channel distribution. In
line with this strategy, your company broadened its
Bancassurance channel with more bank tie-ups like HDFC Bank
Limited and Lakshmi Vilas Bank besides several tie-ups with
local urban and rural co-operative banks. Besides this, your
company also tied up with BMW Financial Services and
Hyundai Motors to offer motor insurance to BMW and Hyundai
vehicles in India respectively. This is in addition to the existing
tie-up with Maruti Insurance Distribution Services and Ford
Motors.
Your company has been in the forefront of developing multiline
agents, including the offering of agency as a career to
thousands of people. The agents of your company are the
backbone of the distribution channel and your company has
over 5229 active agents contributing over 33 % of the gross
written premium. Brokers as a channel have started
contributing to overall business with niche brokers becoming
increasingly active. With de-tariffiing, brokers may need to look
at greater value addition, independence and service levels to
survive in a more competitive environment.
The "online selling" channel initiated a year ago to tap the
growing internet user populations was consolidated, thus
offering the convenience to our customers. It has also helped
in enhancing services to our customers through direct contact
as well as to acquire new customers.
CUSTOMER SERVICE
Efficient customer service is a sine qua non of any service
industry, particularly general insurance. Your company had
undertaken a customer satisfaction survey for motor insurance,
which is the most visible line of retail business. The survey was
done to measure Net Promoter Score (NPS), which can be a
benchmark of customer satisfaction. The feedback from the
survey has enabled your company to launch several initiatives
which will further enhance its leadership position in customer
service.
Directors' Report
(Rs. in Millions)
2004-05 2005-06 2006-07
12846
18033
Premium Growth
8560
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
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Bajaj Allianz is still the only company to ensure transparency
by publishing the status of claims settlement on a quarterly
basis in its newsletter - Newstrack. As a service focused
organization, the turnaround times in claims settlement are
monitored regularly.
Your company is a pioneer in providing SMS alerts to
customers on the status of their motor claim settlement, right
from the registration of the claim to allotment of surveyor till
the claim cheque is despatched.
The high standard of customer service and further initiatives
will help your company in maintaining its brand image in the
market.
INVESTMENTS
Equity markets continued their buoyant run seen in the last 3
years with the major market benchmarks touching all time
highs. A strong economy supported by broad-based growth
across the manufacturing, and service sectors has supported
this performance. The Nifty index of 50 leading stocks recorded
a return of 12% during the year. Interest rates, however, rose
during the year as concerns of inflation on the back of growth,
surfaced. While short term rates increased by over 100 basis
points, long term rates, as measured by the 10 year bond yield
increased by over 50 basis points.
Your company's fund portfolio is invested with prudence while
seeking a reasonable yield. As at 31 March 2007, your
company's invested surplus, as measured by cash and
investments, was Rs 15244 Mn as against Rs 8561 Mn as at the
end of the previous year. The growth in the invested portfolio
indicates strong cash flow generation as well as prudent
investment management. Your company places special
emphasis in generating a significant portion of its investment
income from sustainable sources such as interest and
dividends.
CAPITAL
In order to meet the solvency requirements of its expansion
plans, Your company increased its shareholders' equity with a
capital infusion of Rs 610 mn during the year. The shareholders'
equity of your company stands at Rs 4116 Mn.
CREDIT RATING
Your company maintained its credit rating of "iAAA", awarded
by ICRA Limited a year ago. This is the highest rating for Claim
Paying Ability.
REGISTRATION
The Certificate of registration of your company has been
renewed by the Insurance Regulatory and Development
Authority for 2007-08.
REINSURANCE
The reinsurance treaty programme of your company for 2007-
08 has been placed successfully; the capacities for all lines of
business have been increased and this will enable your
company to write more business and retain higher amounts to
its net account. Apart from significantly enhanced capacities
for each line of business under proportional treaties, your
company's capacity under the catastrophe excess of loss treaty
has also been enhanced to Rs 500 crores.
In line with the circular from the IRDA, the obligatory cessions
to the General Insurance Corporation have been reduced to
15% from the existing 20%.
3. FINANCIAL RESULTS
The Directors are pleased to inform that your company has
earned a net profit after tax of Rs. 754 Mn. for the year ended 31
March 2007, an increase of 46% over the previous year of Rs.516
Mn. The last quarter of the fiscal when the industry was partially
(Rs. in Millions)
2004-05 2005-06 2006-07
230
254
Underwriting Profit
409
7
freed to tariff controls, had a marginal impact on the gross
premium income and the net profits. It is a matter of pride for
us that Bajaj Allianz is the only insurance company to have
generated underwriting profits in a competitive and difficult
market.
4. PARTICULARS REGARDING CONSERVATION OF
ENERGY AND TECHNOLOGY ABSORPTION
Since the company does not carry out any manufacturing
activity, the Companies (Disclosure of Particulars in the report
of the Board of Directors) Rules, 1988 are not applicable to the
Company.
5. FOREIGN EXCHANGE EARNINGS AND
EXPENDITURE
Earnings in foreign currency Rs 1,937 Mn.
Expenditure in foreign currency Rs 1,812 Mn.
6. PARTICULARS OF EMPLOYEES
Employee attrition has been at one of the highest levels ever
across all industries. Your company continues to have an
excellent brand image amongst prospective employees due to
its reputation for fairness and in providing a transparent and
performance-driven culture. Several initiatives of your
company for development of the employees have been well
accepted by existing as well as potential employees. The
Young Leaders programme has supplemented the Accelerated
Development Programme for middle management and the
Junior Management programme for executive staff. The Talent
management system launched last year has been well received
and is now an integral part of the performance and potential
appraisal of the employees.
As required under the provisions of Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, as amended, the names and other particulars
of the employees are set out in the annexure to this report.
However, as per the provisions of sub section 1 (b) (iv) of
Section 219 of the Companies Act, 1956 the report and
accounts are being sent to the shareholders of the Company
excluding the aforesaid annexure. Any shareholder interested
in obtaining such particulars may write to the Company
Secretary at the registered office of the company.
7. DIRECTORS
Mr. Rahul Bajaj and Mr. Dipak Poddar retire by rotation and,
being eligible, offer themselves for reappointment.
8. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the requirements of sub-section 2AA of
section 217 of Companies Act,1956, the Board of Directors wish
to confirm the following :
i) That in the preparation of the annual accounts, the
applicable accounting standards have been followed
along with proper explanation relating to material
departures (if any);
ii) That such accounting policies have been selected and
applied consistently and made judgements and estimates
that are reasonable and prudent so as to give true & fair
view of the state of affairs of the Company as on 31st March,
2007 and of the profit and loss of the Company for the year
ended on that date;
iii) Proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding
the assets of your company and for prevention and early
detection of fraud and other irregularities;
iv) That the annual accounts have been prepared on a going
concern basis.
9. AUDIT COMMITTEE
The Audit Committee of the Board of Directors constituted in
accordance with the provisions of section 292A of the
Companies Act,1956 , held meetings on 5th May 2006 and 27th
November 2006 and reviewed operations and accounts of your
company.
10. AUDITORS
In accordance with the IRDA Regulations / Guidelines , the
company appointed M/s S.R. Batliboi & Co. and M/s Kirtane &
Pandit, Chartered Accountants as joint statutory auditors of the
company in the last Annual General Meeting. They hold office
up to the conclusion of seventh Annual General Meeting of the
Company.
Directors' Report
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
8
The shareholders are requested to appoint the auditors for
the period from the conclusion of ensuing Annual General
Meeting to the conclusion of next Annual General Meeting
and to fix their remuneration.
11. APPRECIATION AND ACKNOWLEDGMENT
Your Company acknowledges the continued support of the
Insurance Regulatory and Development Authority of India,
the support from our policyholders, intermediaries and
reinsurers, which has been the bedrock of our success.
On behalf of the Board of Directors we wish to extend our
sincere appreciation to the employees of the Company for
their hard work and commitment and thank them for the
excellent results.
For and on behalf of the Board of Directors of
Bajaj Allianz General Insurance Company Limited
Heinz Dollberg Sanjiv Bajaj
Director Director
11 May 2007
Pune
9
AUDITORS' REPORT
We have audited the attached Balance Sheet of Bajaj Allianz
General Insurance Company Limited ('the Company') as at March
31, 2007, the Revenue accounts of Motor, Fire, Marine and
Miscellaneous Insurance (collectively known as the 'Revenue
accounts'), the Profit and Loss account and the Receipts and
Payments account, for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan
and perform the audit to obtain reasonable assurance as to
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
The Balance Sheet, the Revenue accounts, the Profit and Loss
account and Receipts and Payments account, have been drawn
up in accordance with the Insurance Act, 1938, Insurance
Regulatory and Development Authority ('IRDA') (Preparation of
Financial Statements and Auditor's Report of Insurance
Companies) Regulations, 2002 ('the Regulations') read with
Section 211 of the Companies Act, 1956 ('the Act').
We report that:
We have obtained all the information and explanations
which, to the best of our knowledge and belief were
necessary for the purposes of the audit and have found
them to be satisfactory;
In our opinion and to the best of our information and
according to the explanations given to us, proper books
of account as required by law have been maintained by the
Company so far as appears from our examination of those
books;
As the Company's accounting system is centralized, no
returns for the purposes of our audit are prepared at the
branches and other offices;
The Balance Sheet, the Revenue accounts, Profit and Loss
account and the Receipts and Payments account referred
to in this report are in agreement with the books of
account;
The actuarial valuation of liabilities in respect of claims
Incurred But Not Reported ('IBNR') and those Incurred But
Not Enough Reported ('IBNER') at March 31, 2007 has been
duly certified by the appointed actuary. The appointed
actuary has also certified that the assumptions
considered by her for such valuation are in accordance
with the guidelines and norms issued by the IRDA and the
Actuarial Society of India in concurrence with the IRDA.
We have relied upon the appointed actuary's certificate
in this regard; and
On the basis of the written representations received from
the directors, as at March 31, 2007 and taken on record by
the Board of Directors, none of the directors are
disqualified as on 31 March, 2007 from being appointed as
a director in terms of clause (g) of sub section (1) of
section 274 of the Companies Act, 1956.
In our opinion and according to the information and explanations
given to us, we further report that:
Investments have been valued in accordance with the
provisions of the Insurance Act, 1938, the Regulations
and orders / directions issued by IRDA in this behalf;
The accounting policies selected by the Company are
appropriate and are in compliance with the applicable
Accounting Standards referred to under sub section 3C of
Section 211 of the Act and with the accounting
principles prescribed by the Regulations and orders /
directions issued by IRDA in this behalf;
The Balance Sheet, the Revenue accounts, the Profit and
Loss account and the Receipts and Payment account
referred to in this report are in compliance with the
accounting standards referred to under sub section 3C of
section 211 of the Act, to the extent they are non
inconsistent with the accounting policies prescribed by
IRDA;
The Balance Sheet, Revenue accounts, Profit and Loss
account and Receipts and Payments account read
Auditors Report
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
10
together with the notes thereon are prepared in
accordance with the requirements of the Insurance
Act, 1938, the Insurance Regulatory and Development
Act, 1999 and the Act to the extent applicable, and in a
manner so required, and give a true and fair view in
conformity with the accounting principles generally
accepted in India as applicable to insurance companies:
- in the case of the Balance Sheet, of the state of affairs
of the Company as at March 31, 2007;
- in the case of the Revenue Accounts, of the surplus/
deficit, as the case maybe, for the year ended on that
date;
- in the case of the Profit and Loss Account, of the
profit for the year ended on that date; and
- in the case of the Receipts and Payments Account,
of the receipts and payments for the year ended on
that date.
For S R Batliboi & Co.
Chartered Accountants
per Hemal Shah
Partner
Membership Number: 42650
Pune
May 11,2007
For Kirtane & Pandit
Chartered Accountants
Suhas Deshpande
Partner
Membership Number: 31787
Pune
May 11, 2007
Further, on the basis of examination of books and records of the
Company and according to the information and explanations
given to us and to the best of our knowledge and belief, we certify
that:
We have reviewed the management report and there
are no apparent mistakes or material inconsistencies
with the financial statements; and
Based on the information and explanations received
during the course of our audit, management
representations by officers of the Company charged with
compliance and compliance certificates noted by the
audit committee, nothing has come to our attention
which causes us to believe that the Company has not
complied with the terms and conditions of registration.
11
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 records
maintained by Bajaj Allianz General Insurance Company Limited ('the
Company') for the year
ended March 31, 2007, we certify that:
We have verified the cash balances, to the extent considered
necessary, securities
relating to the Company's investments by actual inspection or on the
basis of
certificates/ confirmations received from custodians and / or
Depository Participants
appointed by the Company, as the case may be;
The Company is not the trustee of any trust; and
No part of the assets of the policyholders' fund has been directly
or indirectly applied
in contravention to the provisions of the Insurance Act, 1938 relating
to the
application and investment of the policyholders' funds.
This certificate has been issued to comply with Schedule C of the
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.
For S R Batliboi & Co.
Chartered Accountants
per Hemal Shah
Partner
Membership Number: 42650
Pune
May 11,2007
For Kirtane & Pandit
Chartered Accountants
Suhas Deshpande
Partner
Membership Number: 31787
Pune
May 11, 2007
AUDITORS' CERTIFICATE
Auditors Certificate
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
12
With respect to the operations of the Bajaj Allianz General
Insurance Company Ltd. for the year ended 31st March, 2007 and
results thereof, the Management of the Company confirms and
declares that :
1. The registration certificate granted by Insurance Regulatory
and Development Authority (IRDA) is valid and the same has
been renewed for the year 2007 - 2008.
2. We certify that all dues payable to the statutory authorities
have been duly paid except where the Company has preferred
an appeal.
3. There was no transfer of shares during the year and the
shareholding pattern is in accordance with the statutory and
regulatory requirements.
4. The management has not invested any funds of holders of
policies in India, directly or indirectly outside India.
5. The required solvency margins under the Insurance Act, 1938
have been maintained.
6. We certify that the values of all the assets have been reviewed
on the date of Balance Sheet and in management's belief, the
assets set forth in the Balance Sheet are shown in the
aggregate at amounts not exceeding their realizable or
market value under the headings - "Loans", "Investments",
"Agents balances", "Outstanding Premiums", "Interest,
Dividends and Rents outstanding", "Interest, Dividends and
Rents accruing but not due", "Amounts due from other
persons or Bodies carrying on insurance business", "Sundry
Debtors", "Bills Receivable", "Cash" and the several items
specified under "Other Accounts".
Market value of fixed income investments made in debt
securities which are valued at amortised cost as per IRDA
regulations, is lower than their carrying amount.
7. The Company is exposed to a variety of risks associated with
its insurance business and the investment portfolio. The
Company maintains a diversified portfolio of business across
various lines of business and between personal and
commercial lines of business. Operational risks are sought to
be managed by a system of internal controls, limit systems
and segregation of duties where practical.
As a general insurer, the Company is exposed to catastrophe
risk, which is mitigated by having a separate treaty for
catastrophe risks, which limits the Company's risk to any
single event. The limits of the treaty are set based on
accumulation of risk by location and category and after
considering the expected frequency of such events. The
reinsurance treaties have been filed with the IRDA. The
Company is working with some leading providers of
Catastrophe Risk Models with a view to optimizing the riskreturn
of its catastrophe reinsurance cover although available
market data in some cases limits the effectiveness of these
models.
The Company has an offsite disaster recovery centre for its
data back ups, which is in a separate seismic zone from the
main data centre.
The Company has a separate internal audit team which audits
the operations at its offices. Key operational risks and
compliances are audited according to an audit plan approved
by the Audit Committee of the Board of Directors.
The investment portfolio is also diversified within limits set
under the IRDA regulations. The Board of Directors has
approved the Anti Money Laundering Policy of the Company.
The Company has also initiated a whistle blower system
during the year.
8. The Company does not have insurance operations in any
other country.
9. The Company has completed about 6 years of operations and
from the experience this far it can be stated that the average
time taken for settlement of claims is approximately 4 to 6
weeks from the date of receipt of intimation for all classes of
business except Health business where the present time
taken for settlement is about 7 days, travel related claims
emanating out of USA again take approx 60 days to fructify
due to a lag in receipt of bills from the hospitals or service
providers.
Motor Third party claims which have to be settled through the
Motor Accident Claim Tribunal (MACT) and other judicial
bodies take a longer time and at times therefore stretch
beyond one year.
MANAGEMENT REPORT
13
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
Place: Pune
Date : 11th May 2007
We also note that coinsurance inward claims settlement
time is approx 90 days for almost all lines of business since
we need to await the final confirmations from the leaders.
10. We certify that the values, as shown in the Balance Sheet, of
the investments which consists of fixed income securities,
equity shares and mutual fund units that have been valued as
per accounting policies prescribed by IRDA. Market values
have been ascertained for equities on the basis of lower of the
closing prices as on the balance sheet date on The National
Stock Exchange of India Ltd. and the Bombay Stock Exchange.
For fixed income securities the market value is based on
procedure issued by Fixed Income and Money Market and
Derivative Dealers Association (FIMMDA). The investments
in the Mutual Funds are valued at the Net Asset Values (NAV)
of these Mutual funds as on the Balance Sheet date.
Investment property is measured at historical cost less
accumulated depreciation and impairment loss if any.
11. The Company has invested mainly in approved Government
securities and AAA or AA+ rated bonds. The primary aim
while investing is to generate adequate return while
minimizing risk. The emphasis is also on the liquidity of
investments to ensure that the Company meets all outgoings
related to Claims and other operations. The Company
monitors the cash position daily and seasonal liquidity needs
are considered while planning maturities of investments.
While most of the investments are in fixed income securities
in the form of Government of India securities or Corporate
Bonds with strong credit rating, a small portion is also
invested in Equity shares and Real Estate. The total exposure
to equity securities is well within the guidelines of the IRDA.
None of the fixed income investments have had any delays in
servicing of interest or principal amounts. Based on the past
track record, the Management is confident of the quality and
performance of the investments.
12. The Management of Bajaj Allianz General Insurance Company
Limited certifies that:
a) The financial statements of Bajaj Allianz General
Insurance Co. Limited have been prepared in
accordance with the applicable accounting standards
and principles and policies with no material departures;
b) The management has adopted 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 the affairs of the
Company at the end of the financial year and of the
operating profit and of the profit of the Company for the
year;
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 (4 of 1938) and Companies Act,
1956 (1 of 1956), for safeguarding the assets of the
Company and for preventing and detecting fraud and
other irregularities;
d) The financial statements have been prepared on a going
concern basis;
e) The management has set up an internal audit system
commensurate with the size and nature of the business
and the same was operational throughout the year.
13. The schedule of payments, which have been made to
individuals, firms, companies and organizations in which the
Directors of the insurer are interested are as follows:
Rent for premises on lease from
Bajaj Auto Limited. Rs. 12,029,760
Other services - Bajaj Auto Limited. Rs. 1,121,414
Hind Musafir Agency Limited. Rs. 191,703
Management Report
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
14
As per our report of even date attached
S R Batliboi & Co. For Kirtane & Pandit
Chartered Accountants Chartered Accountants
per Hemal Shah Suhas Deshpande
Partner Partner
Membership No 42650 Membership No 31787
Pune Pune
Pune
11th May 2007
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
Revenue accounts for the year ended 31st March
Rupees ('000)
Motor Insurance Business
Particulars Schedule 2007 2006
Premiums earned - (Net) 1 4,925,367 3,362,318
Profit /(Loss) on sale/redemption of Investments (Net) 42,879 16,096
Other Income - Miscellaneous Income - -
Provisions no Longer required Written Back (Refer Schedule 16 Note 18)
26,344 -
Amortisation of Discount/(Premium) (35,878) 25,820
Interest, Dividend & Rent-Gross 313,878 122,024
Sub Total 347,223 163,940
Total (A) 5,272,590 3,526,258
Claims incurred (Net) 2 3,300,967 2,076,332
Contribution to Solatium Fund 8,440 (69,938)
Commission 3 112,398 176,498
Operating Expenses related to Insurance Business 4 1,848,448 889,891
Total (B) 5,270,253 3,072,783
OPERATING PROFIT/(LOSS) from Motor Insurance Business(C )=(A)-(B)
2,337 453,475
Appropriations
Transfer to Shareholders' Account 2,337 453,475
Transfer to catastrophe Reserve - -
Transfer to Other Reserves (to be specified ) - -
Total(C) 2,337 453,475
Significant accounting policies & Notes to Financial Statements 16
The Schedules referred to above form an integral part of the Financial
Statements
As required by Section 40C of the Insurance Act, 1938, we hereby
certify that all expenses of management in respect of General
Insurance business transactions in India by the Company have been
fully recognised in the revenue account as expenses.
15
As per our report of even date attached
S R Batliboi & Co. For Kirtane & Pandit
Chartered Accountants Chartered Accountants
per Hemal Shah Suhas Deshpande
Partner Partner
Membership No 42650 Membership No 31787
Pune Pune
Pune
11th May 2007
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
Revenue accounts for the year ended 31st March
Revenue Accounts
Rupees ('000)
Fire Insurance Business
Particulars Schedule 2007 2006
Premiums earned - (Net) 1 938,215 739,934
Profit /(Loss) on sale/redemption of Investments (Net) 18,816 10,541
Other Income - Miscellaneous Income 5,010 4,412
Provisions no Longer required Written Back (Refer Schedule 16 Note 18)
2,308 -
Amortisation of Discount/(Premium) (15,744) 16,907
Interest, Dividend & Rent-Gross 137,736 79,909
Sub Total 148,126 111,769
Total (A) 1,086,341 851,703
Claims incurred (Net) 2 500,871 576,907
Commission 3 (696,842) (669,027)
Change in Premium Deficiency - -
Operating Expenses related to Insurance Business 4 490,255 474,698
Total (B) 294,284 382,578
OPERATING PROFIT/(LOSS) from Fire Insurance Business (C )=(A)-(B)
792,057 469,125
Appropriations
Transfer to Shareholders' Account 792,057 469,125
Transfer to catastrophe Reserve - -
Transfer to Other Reserves (to be specified ) - -
Total(C) 792,057 469,125
Significant accounting policies & Notes to Financial Statements 16
The Schedules referred to above form an integral part of the Financial
Statements
As required by Section 40C of the Insurance Act, 1938, we hereby
certify that all expenses of management in respect of General
Insurance business transactions in India by the Company have been
fully recognised in the revenue account as expenses.
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
16
As per our report of even date attached
S R Batliboi & Co. For Kirtane & Pandit
Chartered Accountants Chartered Accountants
per Hemal Shah Suhas Deshpande
Partner Partner
Membership No 42650 Membership No 31787
Pune Pune
Pune
11th May 2007
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
Revenue accounts for the year ended 31st March
Rupees ('000)
Marine Business
Particulars Schedule 2007 2006
Premiums earned - (Net) 1 267,387 219,576
Profit /(Loss) on sale/redemption of Investments (Net) 3,621 1,630
Other Income - Miscellaneous Income 1,129 3,053
Provisions no Longer required Written Back (Refer Schedule 16 Note 18)
1,437 -
Amortisation of Discount/(Premium) (3,029) 2,614
Interest, Dividend & Rent-Gross 26,501 12,354
Sub Total 29,659 19,651
Total (A) 297,046 239,227
Claims incurred (Net) 2 372,660 248,040
Commission 3 (12,368) (25,891)
Change in Premium Deficiency 38,683 -
Operating Expenses related to Insurance Business 4 127,010 75,633
Total (B) 525,985 297,782
OPERATING PROFIT/(LOSS) from Marine Insurance Business (C )=(A)-(B)
(228,939) (58,555)
Appropriations
Transfer to Shareholders' Account (228,939) (58,555)
Transfer to catastrophe Reserve - -
Transfer to Other Reserves (to be specified ) - -
Total(C) (228,939) (58,555)
Significant accounting policies & Notes to Financial Statements 16
The Schedules referred to above form an integral part of the Financial
Statements
As required by Section 40C of the Insurance Act, 1938, we hereby
certify that all expenses of management in respect of General
Insurance business transactions in India by the Company have been
fully recognised in the revenue account as expenses.
17
As per our report of even date attached
S R Batliboi & Co. For Kirtane & Pandit
Chartered Accountants Chartered Accountants
per Hemal Shah Suhas Deshpande
Partner Partner
Membership No 42650 Membership No 31787
Pune Pune
Pune
11th May 2007
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
Revenue accounts for the year ended 31st March
Revenue Accounts
Rupees ('000)
Miscellaneous Insurance Business
Particulars Schedule 2007 2006
Premiums earned - (Net) 1 2,254,374 1,541,881
Profit /(Loss) on sale/redemption of Investments (Net) 25,453 9,897
Other Income - Miscellaneous Income 38,037 1,768
Provisions no Longer required Written Back (Refer Schedule 16 Note 18)
12,849 -
Amortisation of Discount/(Premium) (21,297) 15,876
Interest, Dividend & Rent-Gross 186,316 75,030
Sub Total 241,358 102,571
Total (A) 2,495,732 1,644,452
Claims incurred (Net) 2 1,381,793 1,198,658
Commission 3 (189,606) (103,733)
Change in Premium Deficiency (48,695) 29,257
Operating Expenses related to Insurance Business 4 988,306 716,076
Total (B) 2,131,798 1,840,258
OPERATING PROFIT/(LOSS) from Miscellaneous Insurance Business (C )=(A)-
(B) 363,934 (195,806)
Appropriations
Transfer to Shareholders' Account 363,934 (195,806)
Transfer to catastrophe Reserve - -
Transfer to Other Reserves (to be specified ) - -
Total(C) 363,934 (195,806)
Significant accounting policies & Notes to Financial Statements 16
The Schedules referred to above form an integral part of the Financial
Statements
As required by Section 40C of the Insurance Act, 1938, we hereby
certify that all expenses of management in respect of General
Insurance business transactions in India by the Company have been
fully recognised in the revenue account as expenses.
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
18
Profit and Loss Account for the year ended 31st March
As per our report of even date attached
S R Batliboi & Co. For Kirtane & Pandit
Chartered Accountants Chartered Accountants
per Hemal Shah Suhas Deshpande
Partner Partner
Membership No 42650 Membership No 31787
Pune Pune
Pune
11th May 2007
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
Rupees ('000)
Particulars 2007 2006
Operating Profit/(Loss), as per Revenue Accounts of :-
(a) Motor Insurance Business 2,337 453,475
(b) Fire Insurance Business 792,057 469,125
(c) Marine Insurance Business (228,939) (58,555)
(d) Miscellaneous Insurance Business 363,934 (195,806)
929,389 668,239
Income From Investments
(a) Interest,Dividends and Rent -Gross 205,122 98,061
(b) Amortisation of Discount/(Premium) (23,447) 20,749
(c) Profit on sale/redemption of investments 32,632 16,557
Less:- (Loss) on sale/redemption of investments (4,609) (3,622)
209,698 131,745
Other Income -Miscellaneous Income 52,944 37,675
Total(A) 1,192,031 837,659
Provisions (Other than taxation)
(a) For diminution in the value of investments - -
(b) For doubtful debts - -
( c) Others (to be specified) - -
Other Expenses
(a) Expenses other than those directly related to the insurance
business 21,746 17,545
(b) Bad debts written off - -
(c) Preliminary Expenses written off - 1,788
21,746 19,333
Total (B) 21,746 19,333
Profit/(Loss) before tax 1,170,285 818,326
Provision for Taxation (Refer Schedule 16 Note 17)
Current Tax 442,820 257,798
Fringe Benefit Tax 20,245 14,201
Deferred Tax expense/(income) (46,471) 30,638
416,594 302,637
Profit/(Loss) after tax 753,691 515,689
Profit Available for appropriation - -
Appropriations
(a) Interim dividends paid during the year - -
(b) Proposed final dividend - -
(c) Dividend distrubution on tax - -
(d) Transfer to reserve/other accounts (to be specified) - -
Balance of Profit / (Loss) brought forward last year 1,203,620 687,931
Balance carried to Balance Sheet 1,957,311 1,203,620
Significant accounting policies & Notes to Financial Statements 16
Earning per Share: Basic (Refer Schedule 16 Note 16) 6.85 4.69
The Schedules referred to above form an integral part of the Financial
Statements
19
Balance Sheet as at 31st March
Rupees ('000)
Particulars Schedule 2007 2006
SOURCES OF FUNDS
Shareholders' funds :
Share Capital 5 1,101,331 1,100,500
Reserves and Surplus 6 2,932,834 1,570,220
Fair Value Change Account 81,570 96,651
Borrowings 7 - -
Total 4,115,735 2,767,371
APPLICATION OF FUNDS
Investments 8 13,004,052 7,580,193
Loans 9 - -
Fixed Assets 10
Gross Block 918,458 707,409
Less:- Accumulated Depreciation 533,424 363,389
Net Block 385,034 344,020
Capital Work In Progress 112,812 8,948
497,846 352,968
Deferred Tax Asset (Refer Schedule 16 Note 17) 100,050 53,579
Current Assets
Cash and Bank Balances 11 2,240,408 981,005
Advances and Other Assets 12 1,118,303 1,665,092
Sub-Total (A) 3,358,711 2,646,097
Current Liabilities 13 7,016,903 4,081,074
Provisions 14 5,828,021 3,784,392
Sub-Total (B) 12,844,924 7,865,466
Net Current Assets (C) = (A - B ) (9,486,213) (5,219,369)
Miscellaneous Expenditure 15 - -
(to the extent not written off or adjusted)
Debit Balance in Profit and Loss Account - -
Total 4,115,735 2,767,371
Significant accounting policies & Notes to Financial Statements 16
The Schedules referred to above form an integral part of the Financial
Statements
As per our report of even date attached
S R Batliboi & Co. For Kirtane & Pandit
Chartered Accountants Chartered Accountants
per Hemal Shah Suhas Deshpande
Partner Partner
Membership No 42650 Membership No 31787
Pune Pune
Pune
11th May 2007
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
Balance Sheet
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
Rupees ('000)
Rupees ('000)
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE - 1 Premium Earned (Net)
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE - 1(a) Premium Earned (Net)
Schedule - I
Particulars 2007 2006
Workmens ' Public Engineering Aviation Personal Health Others Total
Workmens ' Public Engineering Aviation Personal Health Others Total
Compensation Liability Accident Insurance Compensation Liability
Accident Insurance
Premium from Direct Business: 122,196 117,382 1,505,585 94,429 241,971
1,582,555 1,345,033 5,009,151 80,866 115,600 984,832 47,489 155,038
976,932 938,753 3,299,510
Add: Premium on Reinsurance Accepted - - 40,418 - - - 3,370 43,788 - -
14,011 - - - 854 14,865
Less: Premium on reinsurance ceded 27,834 82,052 1,258,973 93,548
75,126 353,352 460,091 2,350,976 17,899 74,701 795,098 42,571 53,835
216,010 315,474 1,515,588
Net Premium 94,362 35,330 287,030 881 166,845 1,229,203 888,312
2,701,963 62,967 40,899 203,745 4,918 101,203 760,922 624,133
1,798,787
Adjustment for Change in Unexpired
Risk Reserve
Reserve created during the year 39,695 16,056 112,564 2,848 82,829
485,304 615,211 1,354,507 31,483 21,445 101,872 7,294 53,292 320,037
371,495 906,918
Less: Reserve created during the previous
year Written Back 31,483 21,445 101,872 7,294 53,292 320,037 371,495
906,918 18,813 20,001 83,931 734 41,016 268,008 217,509 650,012
Change in the Unexpired Risk Reserve 8,212 (5,389) 10,692 (4,446)
29,537 165,267 243,716 447,589 12,670 1,444 17,941 6,560 12,276 52,029
153,986 256,906
Total Premium Earned (Net) 86,150 40,719 276,338 5,327 137,308
1,063,936 644,596 2,254,374 50,297 39,455 185,804 (1,642) 88,927
708,893 470,147 1,541,881
Note :
Premium Income earned from business concluded:
In India 86,150 40,719 276,338 5,327 137,308 1,063,936 644,596
2,254,374 50,297 39,455 185,804 (1,642) 88,927 708,893 470,147
1,541,881
Outside India - - - - - - - - - - - - - - - -
Total Premium Earned (Net) 86,150 40,719 276,338 5,327 137,308
1,063,936 644,596 2,254,374 50,297 39,455 185,804 (1,642) 88,927
708,893 470,147 1,541,881
Particulars 2007 2006
Motor Fire Marine Miscellaneous* Total Motor Fire Marine
Miscellaneous* Total
Cargo Others Cargo Others
Premium from Direct Business written: 8,438,665 3,703,061 591,094
121,383 5,009,151 17,863,354 5,366,070 3,514,044 401,198 142,086
3,299,510 12,722,908
Add: Premium on Reinsurance Accepted - 108,827 13,245 4,183 43,788
170,043 - 93,904 13,010 993 14,865 122,772
Less: Premium on reinsurance ceded 2,042,146 2,804,181 323,203 115,252
2,350,976 7,635,758 1,325,453 2,696,359 196,314 125,079 1,515,588
5,858,793
Net Premium 6,396,519 1,007,707 281,136 10,314 2,701,963 10,397,639
4,040,617 911,589 217,894 18,000 1,798,787 6,986,887
Adjustment for Change in Unexpired Risk Reserve
Reserve created during the year 3,643,114 637,288 140,697 10,313
1,354,507 5,785,919 2,171,962 567,796 108,947 18,000 906,918 3,773,623
Less: Reserve created during the previous year Written Back 2,171,962
567,796 108,947 18,000 906,918 3,773,623 1,493,663 396,141 103,003
7,626 650,012 2,650,445
Change in the Unexpired Risk Reserve 1,471,152 69,492 31,750 (7,687)
447,589 2,012,296 678,299 171,655 5,944 10,374 256,906 1,123,178
Total Premium Earned (Net) 4,925,367 938,215 249,386 18,001 2,254,374
8,385,343 3,362,318 739,934 211,950 7,626 1,541,881 5,863,709
Note :
Premium Income earned from business concluded:
In India 4,925,367 938,215 249,386 18,001 2,254,374 8,385,343
3,362,318 739,934 211,950 7,626 1,541,881 5,863,709
Outside India - - - - - - - - - - - -
Total Premium Earned (Net) 4,925,367 938,215 249,386 18,001 2,254,374
8,385,343 3,362,318 739,934 211,950 7,626 1,541,881 5,863,709
* Refer Schedule 1(a)
20 21
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
Particulars 2007 2006
Workmen's Public / Engineering Aviation Personal Health Others Total
Workmen's Public / Engineering Aviation Personal Health Others Total
Compensation Product Accident Insurance Compensation Product Accident
Insurance
/Employers' Liability /Employers' Liability
Liability Liability
Claims Paid
Direct 24,700 9,095 499,762 - 115,199 1,021,880 415,070 2,085,706
15,050 164 206,013 38 72,270 739,583 308,243 1,341,361
Add: Re-insurance accepted - - 2 - - - - 2 - - 14 - - - - 14
Less: Re-insurance Ceded 4,945 3,505 425,690 - 39,882 204,466 144,030
822,518 3,010 33 157,479 8 21,992 148,319 149,548 480,389
Net Claims paid 19,755 5,590 74,074 - 75,317 817,414 271,040 1,263,190
12,040 131 48,548 30 50,278 591,264 158,695 860,986
Claims Outstanding (including IBNR)
Add:Claims Outstanding at the close of the year
(net of Re-insurance) 49,764 40,698 80,606 1,929 49,220 182,854
411,009 816,080 49,083 122,931 68,200 3,072 29,582 163,586 261,023
697,477
Less: Claims Outstanding at the beginning of
the year (net of Re-insurance) 49,083 122,931 68,200 3,072 29,582
163,586 261,023 697,477 22,151 34,504 37,392 11,512 22,735 104,394
127,117 359,805
Change in Claims Outstanding 681 (82,233) 12,406 (1,143) 19,638 19,268
149,986 118,603 26,932 88,427 30,808 (8,440) 6,847 59,192 133,906
337,672
Total Claims Incurred (Net) 20,436 (76,643) 86,480 (1,143) 94,955
836,682 421,026 1,381,793 38,972 88,558 79,356 (8,410) 57,125 650,456
292,601 1,198,658
Claims incurred
In India 20,436 (76,643) 86,480 (1,143) 94,955 836,682 421,026
1,381,793 38,972 88,558 79,356 (8,410) 57,125 650,456 292,601
1,198,658
Outside India - - - - - - - - - - - - - - - -
Total Claims Incurred (Net) 20,436 (76,643) 86,480 (1,143) 94,955
836,682 421,026 1,381,793 38,972 88,558 79,356 (8,410) 57,125 650,456
292,601 1,198,658
Rupees ('000)
Rupees ('000)
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE - 2 Claims incurred (Net)
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE - 2(a) Claims incurred (Net)
Particulars 2007 2006
Motor Fire Marine Miscellaneous* Total Motor Fire Marine
Miscellaneous* Total
Cargo Others Cargo Others
Claims Paid
Direct 2,913,314 1,682,049 494,636 39,825 2,085,706 7,215,530
2,148,604 3,094,723 885,872 25,479 1,341,361 7,496,039
Add: Re-insurance accepted - 591 18,126 - 2 18,719 - 184 - - 14 198
Less: Re-insurance Ceded 692,223 1,265,297 264,158 25,248 822,518
3,069,444 614,281 2,761,510 673,442 16,935 480,389 4,546,557
Net Claims paid 2,221,091 417,343 248,604 14,577 1,263,190 4,164,805
1,534,323 333,397 212,430 8,544 860,986 2,949,680
Claims Outstanding (including IBNR & IBNER)
Add : Claims Outstanding at the close of the year
(net of Re-insurance) 2,448,743 419,297 215,851 25,994 816,080
3,925,965 1,368,867 335,769 104,461 27,905 697,477 2,534,479
Less: Claims Outstanding at the beginning of the year
(net of Re-insurance) 1,368,867 335,769 104,461 27,905 697,477
2,534,479 826,858 92,259 93,548 11,752 359,805 1,384,222
Change in Claims Outstanding 1,079,876 83,528 111,390 (1,911) 118,603
1,391,486 542,009 243,510 10,913 16,153 337,672 1,150,257
Total Claims Incurred (Net) 3,300,967 500,871 359,994 12,666 1,381,793
5,556,291 2,076,332 576,907 223,343 24,697 1,198,658 4,099,937
Claims incurred
In India 3,300,967 500,871 359,994 12,666 1,381,793 5,556,291
2,076,332 576,907 223,343 24,697 1,198,658 4,099,937
Outside India - - - - - - - - - - - -
Total Claims Incurred (Net) 3,300,967 500,871 359,994 12,666 1,381,793
5,556,291 2,076,332 576,907 223,343 24,697 1,198,658 4,099,937
* Refer Schedule 2(a)
Schedule - 2, 2a
22 23
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
Rupees ('000)
Particulars 2007 2006
Motor Fire Marine Miscellaneous* Total Motor Fire Marine
Miscellaneous* Total
Cargo Others Cargo Others
Commission Paid direct 529,371 172,159 45,889 2,498 362,043 1,111,960
433,218 139,735 36,727 8,360 251,957 869,997
Total (A) 529,371 172,159 45,889 2,498 362,043 1,111,960 433,218
139,735 36,727 8,360 251,957 869,997
Add: Re-insurance Accepted - 10,850 186 5 2,133 13,174 - 6,086 59 95
1,405 7,645
Less: Commission on Re-insurance Ceded 416,973 879,851 48,956 11,990
553,782 1,911,552 256,720 814,848 46,978 24,154 357,095 1,499,795
Net Commission 112,398 (696,842) (2,881) (9,487) (189,606) (786,418)
176,498 (669,027) (10,192) (15,699) (103,733) (622,153)
Break-up of the commission ( Gross ) incurred to procure
business furnished as per details below
Agents 302,620 43,307 17,116 800 136,506 500,349 244,199 50,252 14,498
238 140,830 450,017
Brokers 38,788 72,729 19,137 1,166 139,415 271,235 25,683 60,583
14,698 7,506 76,948 185,418
Corporate Agency 187,963 56,123 9,636 532 86,122 340,376 163,336
28,900 7,531 616 34,179 234,562
Referral - - - - - - - - - - - -
Others - - - - - - - - - - - -
Total (B) 529,371 172,159 45,889 2,498 362,043 1,111,960 433,218
139,735 36,727 8,360 251,957 869,997
Commission Paid
In India 112,398 (696,842) (2,881) (9,487) (189,606) (786,418) 176,498
(669,027) (10,192) (15,699) (103,733) (622,153)
Outside India - - - - - - - - - - - -
Net Commission 112,398 (696,842) (2,881) (9,487) (189,606) (786,418)
176,498 (669,027) (10,192) (15,699) (103,733) (622,153)
* Refer Schedule 3(a)
Rupees ('000)
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE - 3 Commission expenses
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE - 3 (a) Commission expenses
Schedule - 3, 3a
Particulars 2007 2006
Workmen's Public / Engineering Aviation Personal Health Others Total
Workmen's Public / Engineering Aviation Personal Health Others Total
Compensation Product Accident Insurance Compensation Product Accident
Insurance
/Employers' Liability /Employers' Liability
Liability Liability
Commission Paid direct 9,069 8,441 59,769 756 18,033 136,391 129,584
362,043 6,091 5,351 34,931 239 14,714 90,370 100,261 251,957
Total (A) 9,069 8,441 59,769 756 18,033 136,391 129,584 362,043 6,091
5,351 34,931 239 14,714 90,370 100,261 251,957
Add: Re-insurance Accepted - - 2,131 - - - 2 2,133 - - 1,405 - - - -
1,405
Less: Commission on Re-insurance Ceded 5,285 13,296 346,637 2,104
18,575 79,183 88,702 553,782 3,390 7,853 225,328 1,045 13,601 48,892
56,986 357,095
Net Commission 3,784 (4,855) (284,737) (1,348) (542) 57,208 40,884
(189,606) 2,701 (2,502) (188,992) (806) 1,113 41,478 43,275 (103,733)
Break-up of the commissions ( Gross ) incurred
to procure business furnished as per details below
Agents 5,355 1,142 12,789 265 8,014 65,297 43,644 136,506 4,239 968
11,170 2 7,474 32,932 84,045 140,830
Brokers 2,594 5,542 40,130 491 7,480 58,398 24,780 139,415 1,134 3,800
20,691 237 5,685 26,815 18,586 76,948
Corporate Agency 1,120 1,757 6,850 - 2,539 12,696 61,160 86,122 718
583 3,070 - 1,555 6,307 21,946 34,179
Referral - - - - - - - - - - - - - - - -
Others - - - - - - - - - - - - - - - -
Total 9,069 8,441 59,769 756 18,033 136,391 129,584 362,043 6,091
5,351 34,931 239 14,714 66,054 124,577 251,957
Commission Paid
In India 3,784 (4,855) (284,737) (1,348) (542) 57,208 40,884 (189,606)
2,701 (2,502) (188,992) (806) 1,113 41,478 43,275 (103,733)
Outside India - - - - - - - - - - - - - - - -
Net Commission 3,784 (4,855) (284,737) (1,348) (542) 57,208 40,884
(189,606) 2,701 (2,502) (188,992) (806) 1,113 41,478 43,275 (103,733)
24 25
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
Particulars 2007 2006
Motor Fire Marine Miscellaneous* Total Motor Fire Marine
Miscellaneous* Total
Cargo Others Cargo Others
Employees' remuneration, benefits & other manpower costs 432,742
189,897 30,312 6,225 256,873 916,049 230,777 129,540 16,664 5,098
150,292 532,371
Travel, conveyance and vehicle running 40,805 17,906 2,858 587 24,221
86,377 22,891 14,991 1,712 606 14,074 54,274
Agent training 6,342 2,783 444 91 3,764 13,424 4,099 2,684 306 109
2,520 9,718
Rents, rates and taxes 56,545 24,813 3,961 813 33,566 119,698 32,752
21,448 2,449 867 20,140 77,656
Maintenance & repairs 6,069 2,663 425 87 3,609 12,853 4,034 2,642 302
107 2,481 9,566
Printing and stationery 46,099 4,039 2,496 19 22,484 75,137 26,084
2,538 1,553 9 21,692 51,876
Communication 44,113 19,358 3,090 635 26,187 93,383 20,023 13,112
1,497 530 12,313 47,475
Information technology 69,441 6,084 3,759 28 33,868 113,180 36,801
3,582 2,190 13 30,606 73,192
Legal and professional charges 166,033 72,859 11,630 2,388 98,557
351,467 10,765 171,797 6,273 1,938 85,508 276,281
Auditor's fees, expenses, etc.
(a) as auditors 945 415 66 14 560 2,000 633 413 47 17 390 1,500
(b) as advisor or in any other capacity in respect of:
(i) Taxation matters - - - - - - 116 76 9 3 70 274
(ii) Tax Audit 118 52 8 2 69 249 84 55 6 2 51 198
(iii) Management services - - - - - - - - - - - -
(c) In any other capacity 338 148 24 5 200 715 - - - - - -
(d) Out of Pocket Expenses 306 134 21 4 181 646 474 310 35 13 291
1,123
869,896 341,151 59,094 10,898 504,139 1,785,178 389,533 363,188 33,043
9,312 340,428 1,135,504
Advertisement and publicity 108,781 9,530 5,889 44 53,056 177,300
43,666 4,250 2,600 15 36,313 86,844
Interest and Bank Charges 11,520 5,055 807 166 6,838 24,386 8,533
5,588 638 226 5,249 20,234
Business Development and Promotion 35,075 957 43 3 3,625 39,703 27,210
1,156 17 1 1,806 30,190
Marketing and Support Services 658,629 57,702 35,654 268 321,229
1,073,482 323,245 31,460 19,247 110 268,810 642,872
Service Charges 408 - - - 5 413 101 - 1 - 171 273
Other Acquisition Costs 16,547 11,093 853 830 11,803 41,126 7,826
10,264 551 782 8,099 27,522
Others
Exchange (gain) /loss 598 262 42 9 356 1,267 1,406 921 105 37 863
3,332
Miscellaneous Expenses 61,865 27,148 4,333 890 36,724 130,960 32,149
21,053 2,404 851 19,767 76,224
Loss/( Profit) on disposal of Assets (897) (393) (63) (13) (532)
(1,898) 79 52 6 2 47 186
892,526 111,354 47,558 2,197 433,104 1,486,739 444,215 74,744 25,569
2,024 341,125 887,677
Depreciation 84,491 37,076 5,918 1,215 50,152 178,852 54,537 35,714
4,078 1,444 33,535 129,308
Provision for Doubtful Debts 1,535 674 108 22 911 3,250 1,606 1,052
120 43 988 3,809
Total 1,848,448 490,255 112,678 14,332 988,306 3,454,019 889,891
474,698 62,810 12,823 716,076 2,156,298
* Refer Schedule 4(a)
Rupees ('000)
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE - 4 Operating expenses
Schedule - 4
26 27
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
Particulars 2007 2006
Workmen's Public/Product Engineering Aviation Personal Health Others
Total Workmen's Public/Product Engineering Aviation Personal Health
Others Total
Compensation Liability Accident Insurance Compensation Liability
Accident Insurance
/Employers' /Employers'
Liability Liability
Employees' remuneration, benefits &
other manpower costs 6,266 6,020 77,207 4,842 12,409 81,155 68,974
256,873 3,014 4,156 35,386 1,700 6,359 36,399 63,278 150,292
Travel, Conveyance and Vehicle running 591 568 7,280 457 1,170 7,652
6,503 24,221 344 493 4,201 203 661 4,153 4,019 14,074
Agent Training 92 88 1,131 71 182 1,189 1,011 3,764 62 88 752 36 118
744 720 2,520
Rents, Rates and Taxes 819 787 10,089 633 1,621 10,604 9,013 33,566
494 706 6,011 290 946 5,942 5,751 20,140
Maintenance & Repairs 88 84 1,083 68 174 1,138 974 3,609 61 87 740 36
117 732 708 2,481
Printing and Stationery 150 21 174 2 1,058 7,140 13,939 22,484 81 12
93 1 546 4,881 16,078 21,692
Communication 639 614 7,870 494 1,265 8,273 7,032 26,187 302 431 3,675
177 579 3,633 3,516 12,313
Information Technology 226 32 262 3 1,594 10,755 20,996 33,868 114 17
131 1 770 6,887 22,686 30,606
Legal and Professional charges 2,404 2,310 29,623 1,858 4,761 31,137
26,464 98,557 1,066 2,371 65,766 339 6,204 5,255 4,507 85,508
Auditor's fees, expenses, etc.
(a) as auditor 14 13 169 11 27 177 149 560 10 14 116 6 18 115 111 390
(b) as advisor or in any other capacity
in respect of:
(i) Taxation matters - - - - - - - - 2 2 21 1 3 21 20 70
(ii) Tax Audit 2 2 21 1 3 22 18 69 1 2 15 1 2 16 14 51
(iii) Management services - - - - - - - - 0 0 0 0 0 0 0 0
(c) In any other capacity 5 5 60 4 10 63 53 200 0 0 0 0 0 0 0 0
(d) Out of Pocket Expenses 4 4 55 3 9 57 49 181 7 10 87 4 14 86 83 291
11,300 10,548 135,024 8,447 24,283 159,362 155,175 504,139 5,558 8,389
116,994 2,795 16,337 68,864 121,491 340,428
Advertisement and publicity 354 51 411 5 2,497 16,847 32,891 53,056
136 20 155 1 913 8,171 26,917 36,313
Interest and Bank Charges 167 160 2,055 129 330 2,160 1,837 6,838 129
184 1,566 76 247 1,548 1,499 5,249
Business Development and Promotion 26 27 241 - 87 1,466 1,778 3,625 0
0 182 0 101 729 794 1,806
Marketing and Support Services 2,143 307 2,490 30 15,116 102,004
199,139 321,229 1,003 146 1,149 7 6,761 66,174 193,570 268,810
Service Charges - - - - - 5 - 5 0 0 169 0 0 2 0 171
Other Acquisition Costs 9 191 3,512 549 54 6,964 524 11,803 26 261
2,979 342 38 1,134 3,319 8,099
Others
Exchange (gain) /loss 9 8 107 7 17 112 96 356 21 30 258 12 41 255 246
863
Miscellaneous Expenses 896 861 11,038 692 1,774 11,602 9,861 36,724
483 693 5,900 285 929 5,832 5,645 19,767
Loss/( Profit) on disposal of Assets (13) (12) (160) (10) (26) (168)
(143) (532) 0 2 14 1 2 14 14 47
3,591 1,593 19,694 1,402 19,849 140,992 245,983 433,104 1,798 1,336
12,372 724 9,032 83,859 232,004 341,125
Depreciation 1,223 1,175 15,074 945 2,423 15,845 13,467 50,152 822
1,175 10,009 483 1,576 9,893 9,577 33,535
Provision for Doubtful Debts 22 21 274 17 44 288 245 911 24 35 295 14
46 291 283 988
Total 16,136 13,337 170,066 10,811 46,599 316,487 414,870 988,306
8,202 10,935 139,670 4,016 26,991 162,907 363,355 716,076
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE - 4 (a) Operating expenses
Rupees ('000)
Schedule - 4 (a)
28 29
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
30
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account
for the year ended on and to Balance Sheet as at 31st March
SCHEDULE - 5 Share Capital Rupees ('000)
Particulars 2007 2006
Authorised Capital
125,000,000 Equity shares of Rs 10 each (previous year 125,000,000
Equity shares) 1,250,000 1,250,000
Issued Capital
110,133,050 Equity Shares of Rs 10 each fully paid up (previous year
110,050,000 Equity shares) 1,101,331 1,100,500
Subscribed Capital
110,133,050 Equity Shares of Rs 10 each fully paid up (previous year
110,050,000 Equity shares) 1,101,331 1,100,500
Called-up Capital
110,133,050 Equity Shares of Rs 10 each fully paid up (previous year
110,050,000 Equity shares) 1,101,331 1,100,500
Less: Calls unpaid - -
Add : Shares forfeited (Amount originally paidup) - -
Less : Par Value of Equity Shares bought back - -
Less: Preliminary Expenses to the extent not written off - -
Expenses including commission or brokerage on underwriting or
subscription of shares
Total 1,101,331 1,100,500
Notes: Of the above;
81,498,457 Equity Shares of Rs. 10/- each, constituting 74% of the
total Share Capital are held by the Holding
Company, Bajaj Auto Limited. (Previous year 81,437,000 Equity Shares)
Rupees ('000)
Particulars 2007 2006
Capital Reserve - -
Capital Redemption Reserve - -
Share Premium - -
Opening balance 366,600 - -
Share premium received during the year 608,923 975,523 366,600
General Reserves - -
Less: Debit balance in Profit and Loss Account, If any - -
Less: Amount utilised for Buy-back
Catastrophe Reserve - -
Other Reserves (to be specified) - -
Balance in Profit and Loss Account 1,957,311 1,203,620
Total 2,932,834 1,570,220
Rupees ('000)
Particulars 2007 2006
Debentures/Bonds - -
Banks - -
Financial Institutions - -
Total - -
SCHEDULE - 5A Share Capital / Pattern of Shareholding
(As certified by the Management) Rupees ('000)
Shareholder 2007 2006
Number of % of Number of % of
Shares Holding Shares Holding
Promoters
Indian ( Bajaj Auto Limited) 81,498,457 74% 81,437,000 74%
Foreign (Allianz SE) 28,634,593 26% 28,613,000 26%
Others - 0% - 0%
Total 110,133,050 100% 110,050,000 100%
SCHEDULE - 7 Borrowings
SCHEDULE - 6 Reserves and Surplus
31
Rupees ('000)
Particulars 2007 2006
Long Term Investments
1 Government securities and Government guaranteed bonds including
Treasury Bills 2,962,282 2,618,541
2 Other Approved Securities -
3 Other Investments
(a) Shares -
(aa) Equity Shares 236,968 53,886
Fair Value Change Accretion/(Dimunition) 71,278 76,097
308,246 129,983
(bb) Preference Shares -
(b) Mutual Funds
(c) Derivative Instruments
(d) Debenture/Bonds 2,306,453 1,456,071
(e) Other securities (to be specified) -
(f) Subsidiaries -
(g) Investment Properties-Real Estate 31,057
4 Investments in Infrastructure and Social Sector (Debentures) 664,746
1,107,170
5 Other than Approved Securities
(a) Shares 67,274 4,696
Fair Value Change Accretion/(Dimunition) 15,040 13,115
82,314 17,811
(b) Debenture/Bonds 210,231 151,332
Short Term Investments
1 Government securities and Government guaranteed bonds including
Treasury Bills 1,425,450 325,021
2 Other Approved Securities -
3 Other Investments
(a) Shares
(aa) Equity Shares 164,123 82,039
Fair Value Change Accretion/(Dimunition) (4,819) 7,153
159,304 89,192
(bb) Preference Shares
(b) Mutual Funds
(c) Derivative Instruments
(d) Debenture/Bonds 3,855,369 1,146,114
(e) Other securities (to be specified)
(f) Subsidiaries
(g) Investment Properties-Real Estate
4 Investments in Infrastructure and Social Sector (Debentures) 892,334
503,631
5 Other than Approved Securities
(a) Shares 6,115
(b) Mutual Funds - 35,041
Fair Value Change Accretion/(Dimunition) 71 286
6,186 35,327
(c) Debenture/Bonds 100,080 -
Total 13,004,052 7,580,193
Investments
In India 13,004,052 7,580,193
Outside India - -
Total 13,004,052 7,580,193
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account
for the year ended on and to Balance Sheet as at 31st March
SCHEDULE - 8 Investments
Notes:
1) All the Investments are free of any Encumberances other than
investments under Section 7 of the Insurance Act,1938, which are held
in Government
of India Bonds aggregating Rs.119,997 thousand (Previous year Rs.
121,332 thousand ) deposited with CITI Bank (Custodian)
2) All the above investments are performing assets.
3) Investments maturing within next 12 months are Rs. 6,273,233
thousand (Previous year Rs 1,974,765 thousand)
4) Investment other than Equities and Derivative instruments
Aggregate value of Investments as at March 31, 2007 Rs.12,416,945
thousand (Previous year Rs. 7,343,207 thousand)
Market value as at March 31, 2007 Rs12,213,372 thousand (Previous year
Rs 7,265,132 thousand)
5) Investment property Rs. 31,057 thousand (Previous year Rs Nil)
6) Value of contracts in relation to investments where deliveries are
pending Rs. Nil (Previous year Rs Nil) and in respect of sale of
investments where
payments are overdue Rs. Nil (Previous year Rs Nil).
Schedule - 5 to 8
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
32
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account
for the year ended on and to Balance Sheet as at 31st March
SCHEDULE - 9 Loans
Rupees ('000)
Particulars 2007 2006
1 SECURITY-WISE CLASSIFICATION
Secured - -
a) On Mortgage of Property
(aa) In India
(bb) Outside India
b) On Shares, Bonds, Govt.Securities
c) Others (to be specified)
Unsecured - -
Total - -
2 BORROWER-WISE CLASSIFICATION
a) Central and State Government
b) Bank and Financial Institutions
c) Subsidiaries
d) Industrial Undertakings
e) Others (to be specified)
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 - -
Total - -
33
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account for the year ended on and to
Balance Sheet as at 31st March
SCHEDULE 10 - Fixed Assets
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account
for the year ended on and to Balance Sheet as at 31st March
SCHEDULE 11 - Cash and Bank Balances
Rupees ('000)
Particulars 2007 2006
1. Cash and Stamps on Hand 9,161 3,479
2. Cheques on Hand 396,251 302,579
3. Bank Balances
(a) Deposit Accounts
(aa) Short Term (due within 12 months) 1,140,676 392,439
(bb) Others 160,000 -
(b) Current Accounts 532,736 269,995
(c) Others :- Margin Money Account 1,584 12,513
4. Money at Call and Short Notice
(a) With Banks - -
(b) With other Institutions - -
5. Others ( to be specified) - -
Total 2,240,408 981,005
Balance with non-scheduled Banks included in (2) and (3) above 645 203
Cash and Bank Balances
In India 2,239,763 980,802
Outside India 645 203
Total 2,240,408 981,005
Rupees ('000)
Particulars Gross Block Depreciation / Amortisation Net Block
As at Additions/ Deductions/ As at As at For the Adjust/ As at As at
As at
1st April Adjustments Adjustments 31stMarch 1st April, Year Recoup
31stMarch 31stMarch 31st March
2006 durng the year during the year 2007 2006 On sale etc. 2007 2007
2006
Goodwill - - - - - - - - - -
Intangibles-Computer Softwares 64,826 1,649 - 66,475 38,439 14,730 -
53,169 13,306 26,387
Land-Freehold - - - - - - - - - -
Leasehold Improvements 119,245 29,488 1,099 147,634 66,939 24,455
1,099 90,295 57,339 52,306
Building 81,975 - - 81,975 5,969 1,639 - 7,608 74,367 76,006
Furniture & fixtures 106,428 40,734 - 147,162 50,180 39,198 - 89,378
57,784 56,248
Information Technology Equipment 258,189 91,164 2,107 347,246 169,163
73,480 2,072 240,571 106,675 89,026
Vehicles 16,272 4,775 6,414 14,633 8,922 3,002 5,520 6,404 8,229 7,350
Office Equipment 60,474 52,977 118 113,333 23,777 22,326 104 45,999
67,334 36,697
Others (specify nature) - - - - - - - - - -
Total 707,409 220,787 9,738 918,458 363,389 178,830 8,795 533,424
385,034 344,020
Capital work-in-progress & advances 112,812 8,948
Grand Total 707,409 220,787 9,738 918,458 363,389 178,830 8,795
533,424 497,846 352,968
PREVIOUS YEAR 539,308 170,563 2,462 707,409 235,587 129,308 1,506
363,389 352,968 303,721
Schedule - 9 to 11
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
34
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account
for the year ended on and to Balance Sheet as at 31st March
SCHEDULE - 12 Advances and Other Assets
Rupees ('000)
Particulars 2007 2006
Advances
Deposits with Ceding Companies 9,685 -
Application money for Investments - -
Prepayments 19,447 32,284
Advances to Directors / Officers - -
Advance Tax Paid and Taxes Deducted at Source 16,780 14,459
( Net of Provision for Tax)
Others
Advance to employees 6,306 4,691
Advances recoverable in cash or in kind 68,895 45,656
less : Provision for doubtful advances (1,107) (1,107)
67,788 44,549
Unutilised service tax Carried forward 147,809 35,760
Total (A) 267,815 131,743
Other Assets
Income accrued on investments 316,827 183,071
Outstanding Premium 23,322 21,892
Agents' Balances 125,024 19,404
Less: Provision For Doubtful Recoveries (7,444) (4,239)
117,580 15,165
Foreign Agencies Balances - -
Due from other entities carrying on insurance business,
including reinsurers (net) 324,279 1,258,814
Less : Provision for doubtful amounts (1,463) (1,463)
322,816 1,257,351
Due from Subsidiary/Holding Companies - -
Deposit with Reserve Bank of India - 100
[Pursuant to Section 7 of Insurance Act, 1938 -
Others
Deposits 69,943 55,770
Total (B) 850,488 1,533,349
Total (A + B) 1,118,303 1,665,092
35
Schedules to and forming part of the Revenue Accounts and Profit and
Loss account
for the year ended on and to Balance Sheet as at 31st March
SCHEDULE - 13 Current Liabilities
Rupees ('000)
Particulars 2007 2006
Agents' Balances 105,011 72,509
Balances due to other insurance companies 991,278 239,532
Deposit held on re-insurance ceded - -
Premium Received in Advance 288,031 89,537
Unallocated Premium 365,204 462,191
Sundry creditors 766,533 490,971
Due to subsidiaries/holding company - -
Claims outstanding for
i) More than Six Months 5,468,163 2,656,955
ii) Less than Six Months (Including IBNR & IBNER) 2,774,286 3,445,513
(Refer Schedule 16 Note No 1.10 and Note No 5)
8,242,449 6,102,468
Claims Recoverable from Reinsurer (Including IBNR) (4,316,484)
(3,567,989)
Net Claims Outstanding 3,925,965 2,534,479
Solatium Fund 13,805 5,365
Premium Deficiency ( Refer Schedule 16 Note 1.8 ) 38,683 48,695
Due to Officers/Directors - -
Others- Service Tax Payable 32,258 -
Temporary Overdraft as per the books of accounts only 490,135 137,795
Total 7,016,903 4,081,074
SCHEDULE - 14 Provisions
Rupees ('000)
Particulars 2007 2006
Reserve for Unexpired Risk 5,785,919 3,773,623
For taxation (Refer Schedule 16 Note 17 ) - -
( Net of Advance Tax Paid )
For proposed dividends - -
For dividend distribution tax - -
Employee Benefits 42,102 10,769
Total 5,828,021 3,784,392
SCHEDULE - 15 Miscellaneous Expenditure (to the extent not written off
or adjusted)
Rupees ('000)
Particulars 2007 2006
Discount allowed in issue of shares/debentures - -
Others (to be specified) - -
Total - -
Schedule - 12 to 15
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
36
1. Significant accounting policies
1.1 Basis of preparation of financial statements
The financial statements are prepared and presented in
accordance with the Generally Accepted Accounting Practices
followed in India under the historical cost convention and
accrual basis of accounting and in accordance with the statutory
requirements of the Insurance Act, 1938, the Insurance
Regulatory and Development Authority (IRDA) (Preparation of
Financial Statements and Auditor's Report of Insurance
Companies) Regulations, 2002 ('The Regulations'), and orders
and directions issued by the IRDA in this behalf, the Companies
Act, 1956 ('The Act') to the extent applicable and comply with
the accounting standards issued by the Institute of Chartered
Accountants of India ('ICAI') (to the extent applicable) and
current practices prevailing in the Insurance industry.
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue and expenses
and disclosure of contingent liabilities. The estimates and
assumptions used in the accompanying financial statements
are based upon management's evaluation of the relevant facts
and circumstances as of the date of the financial statements.
Actual results may differ from the estimates and assumptions
used in preparing the accompanying financial statements. Any
revisions to accounting estimates are recognised prospectively
in current and future periods.
1.2 Revenue recognition
Premium
Premium (net of service tax), including reinstatement premium,
on direct business and reinsurance accepted, is recognized as
income over the contract period or the period of risk whichever
is appropriate on a gross basis. Any subsequent revisions to or
cancellations of premiums are recognised for in the year in
which they occur.
Interest / dividend income
Interest income is recognized on accrual basis and dividend is
recognized when the right to receive the dividend is established.
Premium / discount on purchase of investments
Premium or discount on acquisition, as the case may be, in
respect of fixed income securities, is amortized/ accreted on
constant yield to maturity basis over the period of maturity/
holding and offset against interest income.
Profit / loss on sale of securities
Profit or loss on sale/redemption of securities is recognized on
trade date basis and includes effects of accumulated fair value
changes, previously recognized and credited to Fair Value
Reserve , for specific investments sold/redeemed during the
year.
Commission on Reinsurance Ceded
Commission received on reinsurance ceded is recognized as
income in the period in which reinsurance premium is ceded.
SCHEDULE - 16
Significant accounting policies & notes to and forming a part of the
financial statements for the year ended
31st March 2007
Profit commission under re-insurance treaties, wherever
applicable, is recognized in the year of final determination of
the profits and as intimated by reinsurer.
1.3 Reinsurance ceded
Reinsurance cost, in respect of proportional reinsurance, is
accrued at policy inception. Non-proportional reinsurance cost
is recognized when incurred and due. Any subsequent revision
to, refunds or cancellations of premiums are recognized in the
year in which they occur.
1.4 Acquisition costs
Acquisition costs, defined as costs that vary with, and are
primarily related to, the acquisition of new and renewal
insurance contracts viz., commission, policy issue expenses
etc., are expensed in the year in which they are incurred.
1.5 Premium received in advance
Premium received in advance represents premium received in
respect of policies issued during the year, where the risk
commences subsequent to the Balance Sheet date.
1.6 Reserve for unexpired risk
Represents that part of the net premium (i.e., premium, net of
reinsurance ceded) which is attributable to, and set aside for
subsequent risks to be borne by the Company under contractual
obligations on contract period basis or risk period basis,
whichever is appropriate, subject to a minimum of 100% in case
of Marine Hull business and 50% in case of other businesses
based on net premium written during the year as required by
Section 64 V(1)(ii)(b) of the Insurance Act, 1938. (Also refer
1.17).
1.7 Premium Deficiency
Premium deficiency is recognised if the ultimate amount of
expected net claim costs, related expenses and maintenance
costs exceeds the sum of related premium carried forward to
the subsequent accounting period as the reserve for unexpired
risk. Premium deficiency is calculated by line of business. The
Company considers maintenance costs as relevant costs
incurred for ensuring claim handling operations.
1.8 Claims incurred
Claims are recognized as and when reported. Claims paid (net
of recoveries including salvage retained by the insured) are
charged to the respective revenue account when approved for
payment. Where salvage is retained by the Company, the
recoveries from sale of salvage are recognised at the time of sale.
Provision is made for estimated value of outstanding claims at
the balance sheet date net of reinsurance, salvage and other
recoveries. Such provision is made on the basis of the ultimate
amounts that are likely to be paid on each claim, established by
the management in light of past experience and modified for
changes, as appropriate. Amounts received/receivable from
the re-insurers, under the terms of the reinsurance
arrangement, are recognized together with the recognition of
the claim.
37
Amounts received/receivable from the coinsurers, under the
terms of the coinsurance arrangements, are also recognized
together with the recognition of the claim.
1.9 IBNR and IBNER (Claims Incurred but not reported
and claims incurred but not enough reported)
IBNR represents that amount of claims that may have been
incurred prior to the end of the current accounting period but
have not been reported or claimed. The IBNR provision also
includes provision, if any, required for claims incurred but not
enough reported (IBNER). The said liability has been determined
on actuarial principles and confirmed by the Appointed
Actuary. The methodology and assumptions on the basis of
which the liability has been determined has also been certified
by the Actuary to be appropriate, in accordance with guidelines
and norms issued by the Actuarial Society of India in
concurrence with the IRDA and accordingly liability determined
and certified as adequate by the Actuary.
1.10 Operating expenses related to the insurance
business
Operating expenses related to the insurance business are
allocated to specific business segments on the basis of:
a) Expenses which are directly identifiable to the business
segments are allocated on actuals;
b) Other expenses, which are not directly identifiable, are
apportioned on either of the following , as may be
appropriate:
Number of policies; and
Gross written premium
c) Depreciation is apportioned on the basis of Gross Written
Premium.
The method of apportionment is decided by the management,
based on the nature of the expenses and their logical correlation
with various business segments, wherever possible.
1.11 Income from investments and other income
Income earned from investments and deposits and other
incomes is allocated to the revenue accounts and the profit and
loss account on the basis of funds available from insurance
operations and shareholders funds and are further allocated to
the lines of business in proportion of their respective Gross
Written Premium.
1.12 Fixed assets and depreciation / amortisation
Fixed assets are stated at cost (including incidental expenses
relating to acquisition and installation) less accumulated
depreciation. Assets costing up to Rs. 20,000 are depreciated
fully in the year of acquisition.
Depreciation is provided on Straight Line Method (SLM) with
reference to the management's assessment of the estimated
useful life of the assets or the rates and in the manner specified
by the Schedule XIV of The Companies Act, 1956 whichever is
higher, as follows:
Information technology equipment 33.33%
Computer software (Intangibles) 33.33%
Vehicles 20.00%
Office equipment 25.00%
Furniture & fixtures 6.33%
Building 2.00%
Air conditioner (part of office equipments) 10.00%
Electrical fittings (part of office equipments) 33.33%
Leasehold improvements Over the balance
period of lease
The Company provides pro rata depreciation from/to the month
in which the asset is acquired or put to use/disposed, as
appropriate.
Impairment of assets
The carrying amounts of asset are reviewed by the Company at
each balance sheet date. If there is any indication of impairment
based on internal/external factors, an impairment loss is
recognized wherever the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount is greater of
the assets net selling price and value in use .In assessing value
in use the estimated future cash flows are discounted to their
present value at a rate that reflects current market assessments
of the time value of money and the risks specific to the asset, as
determined by the management. After impairment depreciation
is provided on the revised carrying amount of the assets over its
remaining useful life.
1.13 Investments
Investments are recorded on trade date at cost. Cost includes
brokerage, transfer charges, transaction taxes as applicable, etc.
and excludes pre-acquisition interest, if any.
Classification:
Investments maturing within twelve months from balance
sheet date and investments made with the specific intention
to dispose off within twelve months from balance sheet date are
classified as short-term investments. Investments other than
short term investments are classified as long-term investments.
Valuation:
Debt Securities
All debt securities are considered as 'held to maturity' and
accordingly stated at historical cost adjusted for amortization of
premium or accretion of discount on constant yield to maturity
basis in the revenue accounts and profit & loss account over
the period held to maturity /holding.
The realised gain or loss on the securities is the difference
between the sale consideration and the amortized cost in the
books of the Company as on the date of sale determined on first
in first out cost basis.
Equities (Listed & Actively Traded)
Listed and actively traded securities are stated at the lower of
the last quoted closing prices on The National Stock Exchange
of India Limited or The Bombay Stock Exchange Limited.
Unrealised gains or losses are credited / debited to the fair value
change account.
Schedule - 16
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
38
The realised gain or loss on the listed & actively traded equities
is the difference between the sale consideration and the cost
as on the date of sale, determined on a first in first out basis and
includes the accumulated changes in the fair value previously
taken to the fair value change account, in respect of the
particular security; such gain or loss is transferred to revenue
on the trade date.
Mutual Fund Units
Mutual fund units are stated at their Net Asset Value (NAV) at the
balance sheet date. Unrealised gains or losses are credited /
debited to the fair value change account.
The realised gain or loss on the mutual fund units is the difference
between the sale consideration and the cost as on the date of
sale, determined on a first in first out basis and includes the
accumulated changes in the fair value previously taken to the
fair value change account, in respect of the particular security;
such gain or loss is transferred to revenue on the trade date.
Fair Value Change Account
Fair value change account represents unrealised gains or losses
in respect of investments in equity securities, derivative
instruments and mutual fund units outstanding at the close of
the year. The balance in the account is considered as a
component of shareholders' funds and not available for
distribution as dividend.
Real Estate - Investment Property
Investment Property is measured at historical cost less
accumulated depreciation and impairment loss,if any.
1.14 Retirement and Other Employee Benefits
Provident Fund
Contributions to Provident Fund, a defined contribution
scheme, are made to the Regional Provident Fund Authority at
prescribed rates and are expensed when due. For the purpose
of determining contribution to provident fund, the amount of
leave encashment is included in computing the basic wage.
Superannuation
The Company contributes to the Bajaj Auto Employees'
Superannuation Fund, at fixed rates for eligible employees under
a defined contribution plan, for which necessary approvals have
been obtained.
Gratuity
The Company provides for Gratuity based on actuarial valuation
done by the Life Insurance Corporation of India ('LIC'). The
Company makes a contribution towards Employees' Group
Gratuity cum Life Assurance (Cash Accumulation) scheme of LIC.
The difference between the actuarial liability and the funded
amount as at year end is recognised either as a liability or a
prepayment as the case may be.
Employees' Pension Scheme
Defined contributions to Employees' Pension Scheme 1995 are
made to Regional Provident Fund Authority at the prescribed
rates.
Leave Encashment
Provision for Leave Encashment is accrued and provided for on
the basis of actuarial valuation made at the end of each
accounting year.
Long Term Incentive Plan
During the year, Company introduced a Long Term Incentive
Plan (LTIP) for selected management personnel. The plan is
discretionary deferred compensation plan with a vesting
period of three years from the period of first entitlement of an
employee. Provision for Long Term Incentive Plan for employees
is accrued and provided for on the basis of Actuarial Valuation
made at the end of each accounting year.
1.15 Foreign Currency Transactions
Transactions denominated in foreign currencies, if any, are
recorded at the exchange rate prevailing on the date of the
transaction. Assets and Liabilities in foreign currency, if any, as
at the Balance Sheet date are converted at the exchange rates
prevailing at that date.
Exchange difference either on settlement or on translation is
recognised in the Revenue Accounts or Profit and Loss Account,
as applicable.
1.16 Preliminary Expenses
Preliminary expenses incurred are written off to the Profit and
Loss account in five equal installments commencing from the
year in which they were first incurred, the balance to the extent
not written off is adjusted against Share Capital as required by
the Regulations.
1.17 Contributions to Terrorism Pool
In accordance with the requirements of IRDA, the Company,
together with other insurance companies, participates in the
Terrorism Pool. This pool is managed by the General Insurance
Corporation of India ('GIC'). Amounts collected as terrorism
premium in accordance with the requirements of the Tariff
Advisory Committee ('TAC') are ceded at 100% of the terrorism
premium collected to the Terrorism Pool, subject to conditions
and an overall limit of Rs 2 billion per risk.
In accordance with the terms of the agreement, GIC retro cedes,
to the Company, terrorism premium to the extent of the share
agreed to be borne by the Company in the risk, which is recorded
as reinsurance accepted. Such reinsurance accepted is
recorded based on quarterly confirmation received from GIC.
Accordingly, reinsurance accepted on account of the Terrorism
Pool has been recorded only upto 30th September, 2006. The
entire amount of reinsurance accepted for the current year on
this account, net of claims and expenses, upto the above date,
has been carried forward to the subsequent accounting period
as 'Unexpired Risk Reserve' for subsequent risks, if any, to be
borne by the Company.
1.18 Contributions to Funds
The Company provides for contribution to Solatium and
Environment Relief funds as per the requirement of regulations/
circulars.
1.19 Income Taxes
Tax expense comprises of current, deferred and fringe benefit
tax. Current income tax and fringe benefit tax is measured at the
amount expected to be paid to the tax authorities in accordance
with the provisions of the Income Tax Act, 1961. Deferred income
taxes reflects the impact of current year timing differences
between taxable income and accounting income for the year
and reversal of timing differences of earlier years.
39
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised only to the extent that there
is reasonable certainty that sufficient future taxable income will
be available against which such deferred tax assets can be
realised. If the Company has unabsorbed depreciation or carry
forward tax losses, deferred tax assets are recognised only if there
is virtual certainty supported by convincing evidence that such
deferred tax assets can be realised against future taxable profits.
At each balance sheet date the Company re-assesses
unrecognised deferred tax assets. It recognises unrecognised
deferred tax assets to the extent that it has become reasonably
certain or virtually certain, as the case may be that sufficient
future taxable income will be available against which such
deferred tax assets can be realised.
1.20 Service Tax
Service tax collected is considered as a liability against which
service tax paid for eligible services is adjusted and the net
liability is remitted to the appropriate authority as stipulated.
Unutilized credits, if any, are carried forward under "Advances
and other Assets" for adjustments in subsequent periods.
1.21 Provisions and Contingent liabilities
A provision is recognised when an enterprise has a present
obligation as a result of past event; it is probable that an outflow
of resources will be required to settle the obligation, in respect
of which a reliable estimate can be made. Provisions are not
discounted to their present value and are determined based on
best estimate required to settle the obligation at the balance
sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. When there is a possible
obligation or a present obligation in respect of which the
likelihood of outflow of resources is remote, no provision or
disclosure is made.
1.22 Earnings per Share
The basic earnings per share is computed by dividing the net
profit in the Profit and Loss account attributable to the equity
shareholders by weighted average number of equity shares
outstanding during the reporting year.
Number of equity shares used in computing diluted earnings
per share comprises the weighted average number of shares
considered for deriving basic earnings per share and also
weighted average number of equity shares which would have
been issued on the conversion of all dilutive potential shares. In
computing diluted earnings per share only potential equity
shares that are dilutive are included.
Notes to accounts
2. Contingent liabilities
Contingent liabilities not provided for in respect of claims
against the Company not acknowledged as debts other than
insurance matters -
(Rupees. '000)
31st March 07 31st March 06
Partly paid up investments 240 360
Underwriting commitments
outstanding Nil Nil
Claims other than those under
policies not acknowledged as debts Nil Nil
Guarantees given by the Company Nil Nil
Statutory demands/liabilities
in dispute, not provided for,
in respect of
Service Tax and Education Cess 58,954 Nil
Income Tax Nil 33,914
Reinsurance obligations to the
extent not provided for in accounts Nil Nil
3 . All assets of the Company are free from any encumbrances. No
assets of the Company are subject to restructuring.
4. Commitments
Commitments made and outstanding for acquisition of fixed
assets amount to Rupees.29,647 thousand (Previous year
Rupees. 16,694 thousand).
5. The appointed actuary has certified to the Company that actuarial
estimates for IBNR (including IBNER) are in compliance with the
guidelines prescribed by the Actuarial Society of India and in
conformity with the IRDA regulations.
Where sufficient data is available, the actuary has chosen to adopt
the chain ladder method. The chain ladder method has
accordingly been applied to motor, fire, marine, engineering,
personal accident and health. These constitute over 93 %
(Previous year 90 %) of the Company's total business. For other
lines such as aviation, workman compensation, liability and
miscellaneous others, the expected ultimate loss ratio method
has been used to arrive at the estimate of IBNR.
Net IBNR reserves have been arrived at on the basis of respective
retention ratios thereby making allowances for reinsurance
recoveries by the Company.
6 . Claims settled and outstanding for more than six months Rupees
Nil (Previous year - Rs. Nil)
7 . Extent of premium income recognized based on varying risk
pattern Rupees. Nil (Previous year - Rupees .Nil )
8 . Computation of managerial remuneration
(Rupees '000)
For the year ended For the year ended
31st March 2007 31st March 2006
Salary (Including &
contributions to funds) 6,300 6,296
Perquisites 298 658
Schedule - 16
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
40
15. The Company's significant leasing arrangements include
agreements for office and residential premises. The future
minimum lease payments relating to these leases are disclosed
below:
(Rupees '000)
As at As at
31st March 07 31st March 06
Payable not later than one year 92,248 64,070
Payable later than one year but
not later than five years 56,496 57,192
Payable later than five years 1,010 NIL
Amount charged to revenue accounts for lease is
Rupees.102,112 thousand (Previous year Rupees 82,237
thousand)
There are no transactions in the nature of sub leases
The period of agreement is generally for three years and
renewable thereafter at the option of the lessee
16. Earning per Share ('EPS')
The following table reconciles the numerator and denominator
used to calculate basic/diluted EPS:
As at As at
31st March 07 31st March 06
Profit after Tax
Basic earnings before
extra-ordinary items [A] Rs. 753,691 Rs. 515,689
Basic earnings after
extra-ordinary items [B] Rs. 753,691 Rs. 515,689
Weighted average number of
equity shares
(par value of Rs. 10 each) [C] 110,050,910 110,006,027
Basic and diluted earnings
per share [A/C] Rs. 6.85 Rs. 4.69
Basic and diluted earnings
per share excluding
extraordinary items [B/C] Rs. 6.85 Rs. 4.69
As there were no dilutive equity shares or potential equity shares
issued , no reconciliation between the denominator used for
computation of basic and diluted earnings per share is
necessary.
12. Contribution to Environment Fund
An amount of Rupees 9,407 thousand (Previous year Rupees
7,031 thousand) collected towards Environment Fund from
public liability policies has been disclosed under the head
current liabilities and the same has been invested as per IRDA
regulations.
13. The Company's primary reportable segments are business
segments, which have been identified in accordance with the
Regulations. The operating expenses and investment and other
income attributable to the business segments are allocated as
mentioned in paragraph 1.10 and 1.11 respectively. Segment
revenue and results have been disclosed in the financial
statements. Due to inherent complexities, segment assets and
liabilities have been identified to the extent possible in the
statement annexed hereto. There are no reportable
geographical segments since the Company provides services
to customers in the Indian market only Indian interests overseas
and does not distinguish any reportable regions within India.
14. Related party disclosures have been set out in a separate
statement annexed to this schedule. The related parties, as
defined in Accounting Standard 18 'Related Party Disclosures'
issued by the Institute of Chartered Accountants of India ('ICAI'),
in respect of which the disclosures have been made, have been
identified on the basis of disclosures made by the key managerial
persons and taken on record by the Board.
The managerial remuneration is in accordance with the
approval accorded by a resolution of the Board of Directors, a
copy of which has been filed with the IRDA as required under
Section 34A of the Insurance Act,1938
9 . Fair value of investment property Rupees 31,057 thousand.
(Previous year Rupees. Nil)
10. Percentage of business sector - wise (Based on Gross Written
Premium)
(Amount Rupees '000, Count - numbers)
Business For the year ended 31st March 2007 For the year ended 31st
March 2006
sector GWP No of Lives % of GWP GWP No of Lives % of GWP
Rural 1,691,433 - 9.38 1,286,000 - 10.01
Social 23,547 36,833 0.13 2,000 20,000 0.02
Urban 16,318,417 - 90.49 11,557,680 - 89.97
Total 18,033,397 36,833 100 12,845,680 20,000 100
11. Extent of risk written and reinsured based on premium
(excluding excess of loss and catastrophe reinsurance).
For the year ended For the year ended
31st March 2007 31st March 2006
% age of % age of
business written business written
Risk retained 60.25% 56.19%
Risk Reinsured 39.75% 43.81%
100.00% 100.00%
41
17. Taxation
The deferred taxes assets and liabilities, arising due to timing
differences have been recognised in the financial statements
as under:
(Rupees '000)
As at 31st March 2007 As at 31st March 2006
Timing difference on account of Deferred Deferred Deferred Deferred
tax asset tax liability tax asset tax liability
Reserve for unexpired risks 265,887 - 159,178 -
Leave encashment 6,495 - - -
Long term incentive plan 18,713 - - -
Provision for doubtful debts 3,250 - - -
Total 294,345 - 159,178 -
Net deferred tax asset/(liability) 100,050 - 53,579 -
Deferred Tax expense/(income)
recognised in the Profit
and loss account (46,471) - 30,638 -
18. Change in method of provision for unexpired risk
reserve
Terrorism pool
The provision for unexpired risks reserve on premium which is
accepted, on a reinsurance basis, from the terrorism pool, (refer
note 1.17) was hitherto calculated at the rate of 100% per cent
of the net premiums received without reversing the provision
created in the preceding years. The Company has changed its
method of computing such reserve, with effect from 1st April
2006, whereby such percentage is applied on the premiums,
net of reinsurances, of the preceding twelve months.
Had the Company continued to use the earlier basis of providing
unexpired risks reserve on premium, the charge to the Profit
and Loss Account after taxation for the current period would
have been higher by Rupees 64,099 thousands and the net
unexpired risk reserve on premium would have been higher by
Rupees 64,099 thousands.
Miscellaneous business segment
The limits specified in Section 64 V (1) (ii) (b) in respect of the
unexpired risk reserve for miscellaneous segment was hitherto
calculated by applying the specified percentage by each
reported sub-segment of business within the Miscellaneous
segment. For the financial year ended 31st March 2007, the
minimum limits for the provision for unexpired risks reserve have
been applied on the premiums, net of reinsurances, for the
miscellaneous excluding motor business segment on an overall
basis.
Had the Company continued to use the earlier basis of providing
unexpired risks reserve for the miscellaneous excluding motor
business segment, the charge to the Profit and Loss Account
after taxation for the current period would have been higher by
Rupees.38,351 thousands and the net unexpired risk reserve on
for the miscellaneous excluding motor business segment would
correspondingly have been higher by Rupees.38,351 thousands.
19. Included in provisions no longer required written back, an
amount of Rupees.39,487 thousand relating to an extinguished
advertising contract.
20. The summary of the financial statements for the last 5 years and
the ratios required to be furnished have been set out in the
statement annexed hereto.
21. Previous year figures have been regrouped where possible and
wherever necessary to make them comparable with those of the
current year.
As per our report of even date attached
S R Batliboi & Co. For Kirtane & Pandit
Chartered Accountants Chartered Accountants
per Hemal Shah Suhas Deshpande
Partner Partner
Membership No 42650 Membership No 31787
Pune Pune
Pune
11th May 2007
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
42
Annexure to Schedule 16 - Notes to accounts and forming part of the
financial statements for the year ended 31st March
(Refer Note no. 13)
Segmental Break up of the Balance Sheet item as at 31st March
Segment revenues and segment results have been incorporated in the
financial statements. However segment asset and liabilities, given
the nature of the business, have been allocated amongst various
segments to the extent possible.
Summary of Financial Statements for the year ended 31st March
Rupees ('000)
Motor Fire Marine Misc Total
Cargo Others
Premium Received in Advance 94,194 51,027 66,833 510 75,467 288,031
(48,865) (16,201) (322) (241) (23,908) (89,537)
Net Claims Outstanding 2,448,743 419,297 215,851 25,994 816,080
3,925,965
(1,368,867) (335,769) (104,461) (27,905) (697,477) (2,534,479)
Reserve for Unexpired Risk 3,643,114 637,288 140,697 10,313 1,354,507
5,785,919
(2,171,962) (567,796) (108,947) (18,000) (906,918) (3,773,623)
Premium Deficiency (-) (-) 38,683 (-) (-) 38,683
(-) (-) (-) (-) (59,051) (59,051)
Solatium Fund 13,805 (-) (-) (-) (-) 13,805
(5,365) (-) (-) (-) (-) (5,365)
Proposal Deposits (to the (-) (-) (-) (-) (-) (-)
extent identifiable) (-) (-) (-) (-) (-) (-)
Previous Year figures are in Brackets
Rupees ('000)
Particulars 2007 2006 2005 2004 2003
OPERATING RESULTS
Gross Written Premium 18,033,397 12,845,680 8,560,742 4,797,967
2,997,528
Net Premium Income (net of Reinsurance) 10,397,639 6,986,887 4,792,862
2,864,123 1,807,645
Income from Investments (net of losses) 679,252 388,696 285,296
187,734 114,128
Miscellaneous Income 87,114 9,589 7,089 24,043 9,359
Total Income 11,164,005 7,385,172 5,085,247 3,075,900 1,931,132
Commissions (786,418) (622,153) (419,433) (230,722) (154,945)
Operating Expenses 3,454,019 2,156,298 1,455,879 984,409 666,902
Claims, increase in URR and other outgoes 2,012,296 5,182,434
3,382,359 2,099,321 1,338,658
Operating Profit/Loss 6,484,108 668,593 666,442 222,892 80,517
NON OPERATING RESULTS
Total income under Shareholder's Account (5,313,823) 149,733 103,129
94,792 93,458
Profit before Tax 1,170,285 818,326 769,571 317,685 171,292
Provision for Tax (416,594) (302,637) (298,655) (100,790) (75,006)
Profit after Tax 753,691 515,689 470,916 216,895 96,286
MISCELLANEOUS - - - - -
Policyholder's Account Not Applicable being General Insurance Company
Total Funds - - - - -
Total Investments - - - - -
Yield on Investments - - - - -
Shareholder's Account Not Applicable being General Insurance Company
Total Funds - - - - -
Total Investments - - - - -
Yield on Investments - - - - -
Paid up Equity Capital 1,101,331 1,100,500 1,100,000 1,100,000
1,100,000
Net Worth 4,115,735 2,767,371 1,824,167 1,380,430 1,091,483
Total Assets (Gross of current liabilities and provisions) 16,960,659
10,632,837 7,375,647 4,593,932 2,948,145
Yield on Total Investments 6.84% 6.87% 8.34% 9.95% 9.7%
Earning Per Share 6.85 4.69 4.28 1.97 0.88
Book value per Share 37.40 25.15 16.58 12.55 9.92
Total Dividend - - - - -
Dividend per share - - - - -
43
Particulars 2007 2006
1 Gross Premium growth rate
Motor 57% 54%
Fire 6% 62%
Marine Cargo 46% 22%
Marine Hull -12% 30%
Workmen's Compensation / Employers' Liability 51% 70%
Public/Product Liability 2% 81%
Engineering 55% 14%
Aviation 99% 424%
Personal Accident 56% 50%
Health 62% 43%
Others 44% 50%
2 Gross Premium to Shareholder's Fund Ratio 438% 464%
3 Growth Rate of Shareholder's Fund 49% 52%
4 Net Retention Ratio
Motor 76% 75%
Fire 26% 25%
Marine Cargo 47% 53%
Marine Hull 8 % 13%
Workmen's Compensation / Employers' Liability 77% 78%
Public/Product Liability 30% 35%
Engineering 19% 20%
Aviation 1% 10%
Personal Accident 69% 65%
Health 78% 78%
Others 66% 70%
5 Net Commission Ratio
Motor 2% 5 %
Fire -74% -90%
Marine Cargo -1% -5%
Marine Hull -53% -206%
Workmen's Compensation / Employers' Liability 4% 5 %
Public/Product Liability -12% -6%
Engineering -103% -102%
Aviation -25% 49%
Personal Accident 0% 1%
Health 5% 6%
Others 6% 9 %
6 Expenses of Management to Gross Premium Ratio 19% 17%
7 Combined Ratio 98% 96%
8 Technical Reserves to Net Premium Ratio 94% 91%
9 Underwriting Balance Ratio
Motor 0% 11%
Fire 79% 51%
Marine -79% -25%
Miscellaneous 13% -11%
10 Operating Profit Ratio 9 % 10%
11 Liquid Assets to liabilities ratio 48% 65%
12 Net Earning Ratio 7% 7%
13 Return on Net worth 18% 28%
14 Reinsurance Ratio 43% 46%
Ratios For the year ended 31st March
Ratios
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
44
Rupees ('000)
For the year ended For the year ended
Particulars 31st March, 2007 31st March, 2006
Premium received from Policyholders,including advance receipts and
service tax 19,808,118 13,855,030
Other receipts - -
Payment to Re-insurers, net of commissions and claims (1,109,449)
(817,534)
Payment to Co-insurers, net of claims recovery 326,086 755,655
Payment of Claims (7,519,936) (8,257,670)
Payment of Commission (1,188,170) (832,159)
Payment of other Operating Expenses Net of Misc Income (2,974,575)
(1,927,080)
Preliminary and preoperative expenses - -
Income tax paid (Net) (454,179) (369,079)
Service Tax Paid (1,594,743) (1,092,361)
Other Payments - -
Cash Flow before extraordinary items - -
Cash Flow from extraordinary operations - -
Net Cash Flow From Operating Activities 5,293,152 1,314,802
Cash Flow from Investment Activties
Investment Activities
Purchase Fixed Assets (323,817) (172,786)
Proceeds from Sale of Fixed Assets 2,841 769
Purchase of Investments (31,070,304) (7,210,423)
Sale of Investments 27,310,538 5,492,120
Rent/Interests/Dividends Received 735,796 487,999
Investments in money market instruments and in liquid mutual funds
(Net)* (1,628,729) 32,156
Investment property purchase (16,282) -
Interest Expense and Other Investment Expenses (4,697) (2,646)
Cash Deposit under Section 7 of the Insurance Act, 1938 100 -
Fixed Deposit Maturity more than 3 months (845,481) (50,501)
Net Cash Flow from Investment Activties (5,840,035) (1,423,312)
Cash Flow from financing Activties
Proceeds from issuance of share capital 609,753 367,100
Proceeds from borrowing - -
Repayments of borrowing - -
Interest/dividends paid - -
Net cash flow financing activities 609,753 367,100
Effect of foreign exchange rates on cash and cash equivalents,net
(1,287) (3,333)
Increase/(Decrease) in Cash and Cash Equivalents during the year
61,583 255,257
Cash and Cash Equivalent at the year begining 500,770 245,513
Cash and Cash Equivalent at the year end** 562,353 500,770
* Total sales and purchases in money market instruments and in liquid
mutual funds are Rs. 4,298,236 thousand and Rs.5,926,965 thousand
respectively
(Previous year Rs.3,615,732 thousand and Rs.3,583,576 thousand
respectively)
** Cash and cash Equivalent ('000) 2007 2006
Cash & Bank balance as per schedule 11 2,240,408 981,005
Less: Fixed Deposit Maturity More than 3 Months 1,187,920 342,439
Less: Tempeory over draft as per schedule 13 490,135 137,796
Cash and Cash Equivalent at the year end 562,353 500,770
As Intergral part of Financial Statements
Receipts and payments for the year ended 31st March
As per our report of even date attached
S R Batliboi & Co. For Kirtane & Pandit
Chartered Accountants Chartered Accountants
per Hemal Shah Suhas Deshpande
Partner Partner
Membership No 42650 Membership No 31787
Pune Pune
Pune
11th May 2007
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
45
Balance Sheet Abstract and Company's general business profile for the
year ended 31st March
For and on behalf of the Board of Directors
Heinz Dollberg Sanjiv Bajaj Don Nguyen
Director Director Director
Ranjit Gupta Dipak Poddar Kamesh Goyal
Director Director Chief Executive Officer
S.Sreenivasan Amit Gupta
Chief Financial Officer Company Secretary
I. Registration No. 15329
State code 11
Balance Sheet Date 31st March
II. Capital raised during the year Rs in '000s
Public issue -
Private issue 8,305
Bonus Issue -
Private placement -
III. Position of mobilisation and deployment of funds Rs in '000s
Total Liabilities (Sources of funds) 4,115,735
Total Assets (Application of funds) 4,115,735
IV. Source of funds Rs in '000s
Paid up capital 1,101,331
Reserves and surplus 3,014,404
Secured loans -
Unsecured loans -
V. Application of funds Rs in '000s
Net Fixed assets 497,846
Investments 13,004,052
Net Current Assets (9,386,163)
Miscellaneous expenditure -
Accumulated loss -
VI. Performance of the company Rs in '000s
Turnover 18,033,397
Total expenditure 16,863,112
Profit / (Loss) before tax 1,170,285
Profit / (Loss) after tax 753,691
Accumulated profits 1,957,311
Earnings per share 6.85
Dividend rate% -
VII. Generic names of principal products / services of the company
Item code number (ITC code) -
Product Description
General Insurance
Note: The Company being an insurance Company, the accounts of the
company are not required to be made in accordance with Schedule VI.
Further the
Insurance Act,1938 requires the financial statement of the Company to
be split in revenue accounts and Profit and Loss Account. In view of
this it is not
possible to give all the information as required by part IV of this
Schedule
Balance Sheet Abstract and Company's general business profile
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
Rupees ('000)
2006-2007 2005-2006
S. Related party Relationship Nature of transaction Amount Rs.
Outstanding amounts carried to Amount Rs. Outstanding amounts carried
to
No. balance sheet. payable/(receivable) balance sheet. payable/
(receivable)
Annexure to Schedule 13 Notes to Accounts and forming Part of
Financial Statements for the year ended 31 March , 2007
Related Party Disclosures under AS 18 of ICAI (For the year ended 31st
March 2007)
1 Bajaj Auto Ltd Holding Company Rent for premises hired 13,151 -
12,024 -
Deposits for Rent Premises - (11,772) - (11,772)
Insurance Premia received 187,060 - 36,353 -
Insurance Claims paid 8,803 - 21,703 -
Unallocated Premium - 4,176 - 3,704
Other transactions - - 1,514 -
2 Allianz SE, Germany Joint Venture Partner Billable expenses incurred
on behalf of Allianz SE 238 - 3,091 (10,996)
Software Consultancy Fees 01,596 ( 6 1) 19,113 -
License fees for Opus 6,266 - 14,944 -
Pre-Paid License fees for Opus 2,672 - 14,944 -
3 M/s. Allianz Global Corporate & Subsidiary of Joint Venture Partner
Reinsurance premium paid/payable 86,669 43,529 9,204 383
Speciality AG, Munich Commission on reinsurance received/receivable
5,643 - 2,088 -
Claims recovery on reinsurance 0 72 - 259 -
4 Allianz CP General Ins Co. Ltd Associate of Joint Venture Partner
Reinsurance premium received/receivable 32,226 (7,298) 20,501 (15,727)
Commission on reinsurance paid/payable 1 ,611 - 1,021 -
Software Consultancy Fees 21,248 (413) 1,187 (1,550)
Deposit with the Ceding Company (9,685)
5 Allianz AG Reinsurance, Branch of Allianz SE - Reinsurance premium
paid/payable 694,157 (6,211) 693,179 (209,866)
branch Asia Pacific No change in last year status Commission on
reinsurance received/receivable 158,263 - 233,644 -
Claims recovery on reinsurance 760,529 - 1,044,254 -
No claim Bonus on XOL premium 9,919 - - -
Portfolio Premium withdrawal 155,601 - 163,055 -
Portfolio Claims withdrawal 214,632 - 52,872 -
Portfolio Premium Entry 116,701 - 108,703 -
Portfolio Claims Entry 160,974 - 35,248 -
6 Assurances Generales de Subsidiary of Joint Venture Partner
Reinsurance premium paid/payable 14,659 24,909 20,349 13,917
France (M/s AGF) Commission on reinsurance received/receivable 3,665 -
5,087 -
Claims recovery on reinsurance 3 - 6 -
7 Euler Hermes UK Plc Subsidiary of Joint Venture Partner Reinsurance
premium paid/payable 162 - 18,511 130
Commission on reinsurance received/receivable 32 - 1,693 -
Claims recovery on reinsurance - - 1,833 -
8 Euler Hermes Cr Uwr (Hongkong) Subsidiary of Joint Venture Partner
Reinsurance premium paid/payable - - 1,640-
Commission on reinsurance received/receivable - - 139 -
Claims recovery on reinsurance - - 577 -
Related Party Disclosures under AS 18 of ICAI (For the year ended 31st
March 2007)
46 47
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
Rupees ('000)
Annexure to Schedule 13 Notes to Accounts and forming Part of
Financial Statements for the year ended 31 March , 2007
Related Party Disclosures under AS 18 of ICAI (For the year ended 31st
March 2007)
2006-2007 2005-2006
S. Related party Relationship Nature of transaction Amount Rs.
Outstanding amounts carried to Amount Rs. Outstanding amounts carried
to
No. balance sheet. payable/(receivable) balance sheet. payable/
(receivable)
Notes:
Premium Figures from related parties are net of Service Tax, since the
company accounts for premium at net of Service Tax
Reinsurance balances are net of Commission and claims wherever
applicable.
9 Allianz Marine and Aviation Subsidiary of Joint Venture Partner
Reinsurance premium paid/payable 944 542 8,123 533
Versicherungs AG Commission on reinsurance received/receivable 288 -
1,613 -
Claims recovery on reinsurance 392 - 44 -
10Allianz Insurance Management Subsidiary of Joint Venture Partner
Billable expenses incurred on behalf of Allianz Insurance 6,942
(3,999) 4,682 (2,979)
Asia Pacific Management Asia Pacific
11 Allianz Insurance Company- Subsidiary of Joint Venture Partner
Software Consultancy Fees 1,854 - - 1,852
Guangzhou Branch, China Billable expenses incurred on behalf of
Allianz China - - - (289)
12 Allianz Ost-West Allianz, Moscow Associate of Joint Venture Partner
Income from Software Consultancy 3,304 (5,042) 18,708 (3,379)
13 Allianz Ins Co of Singapore - PTE Subsidiary of Joint Venture
Partner Reinsurance premium paid/payable - - 52 -
Commission on reinsurance received/receivable - - 4 -
14 Allianz Cornhill Ins - PLC Subsidiary of Joint Venture Partner
Reinsurance premium paid/payable ,2085 1 , 545 426 79
Commission on reinsurance received/receivable 239 - 32 -
15 Allianz Elementar Versicherungs Subsidiary of Joint Venture Partner
Reinsurance premium paid/payable - - 138 -
Commission on reinsurance received/receivable - - 56 -
16 AGF IART - Franch Subsidiary of Joint Venture Partner Reinsurance
premium paid/payable 67 - 135 -
Commission on reinsurance received/receivable 63 - 77 -
17 Euler Hermes Cr Insurance (S) Ltd. Subsidiary of Joint Venture
Partner Reinsurance premium paid/payable 5,540 4,664 17,261 14,494
Commission on reinsurance received/receivable 11,106 - 2,767 -
Billable expenses incurred on behalf of Euler Hermes 15,325 (15,325)
6,700 (6,700)
Income from Software Consultancy 582 - - -
18 Allianz - Rosno- Moscow Associate of Joint Venture Partner Software
Consultancy Fees - - 2,604 -
19 Bajaj Allianz Life Insurance Co Ltd Fellow Subsidiary Expenditure
incurred by Bajaj Allianz Life Insurance Co. Ltd. 3,164 - 5,141 -
On behalf of Bajaj Allianz General Insurance Co Ltd
Expenditure incurred on behalf of 14,422 - 18,795 -
Bajaj Allianz Life Insurance Co. Ltd.
Insurance Premium paid to Bajaj Allianz Life 2 ,674 - 1,209 -
Insurance Premium from Bajaj Allianz Life 7,304 - 4,143 -
Insurance Claims paid 10 297 - Unallocated Premium - 66 - 123
Purchase of Investments 49,647 - 308,495 -
Sale of Investments 54,074 - 447,312 -
Related Party Disclosures under AS 18 of ICAI (For the year ended 31st
March 2007)
48 49
BAJAJ ALLIANZ GENERAL INSURANCE - 7th Annual Report 2006-07
2006-2007 2005-2006
S. Related party Relationship Nature of transaction Amount Rs.
Outstanding amounts carried to Amount Rs. Outstanding amounts carried
to
No. balance sheet. payable/(receivable) balance sheet. payable/
(receivable)
20Bajaj Hindustan Ltd Fellow Subsidiary Insurance Claims paid - - 9 -
21 Bajaj Electricals Ltd Fellow Subsidiary Insurance Premia received
9,589 - 11,047 -
Insurance Claims paid 17,292 - 45,431 -
Unallocated Premium - 9 8 - 102
22 Mukand Engineers Ltd Enterprise where key Insurance Premia received
7 - 185 -
mgmt personnel is having Unallocated Premium - 3 - 5
significant influence Other transactions 9,200 8,724 - -
23 Mukand Ltd Enterprise where key Insurance Premia received 15,107 -
246 -
mgmt personnel is having Insurance Claims paid 3,292 - 1,452 -
significant influence Unallocated Premium 20- 2 24 Bajaj Auto Finance
Ltd Fellow Subsidiary Support Charges for Insurance business 35,144 -
16,469 -
Insurance Premia received 1,181 - 639 -
Insurance Claims paid 64 - 172 -
Unallocated Premium - 8,324 - 4,318
25 Hind Musafir Agency Ltd. Enterprise where key Support Charges for
Insurance business 9 12 , 0 160 143 -
mgmt personnel is having Insurance Premia received - - 2 -
significant influence
26 Kamesh Goyal Key Management Personnel Remuneration for the year
2006-07 6,598 - 6,955 -
Annexure to Schedule 13 Notes to Accounts and forming Part of
Financial Statements for the year ended 31 March , 2007
Related Party Disclosures under AS 18 of ICAI (For the year ended 31st
March 2007)
Related Party Disclosures under AS 18 of ICAI (For the year ended 31st
March 2007)
Rupees ('000)
50 51