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General Insurance Corporation of India.

BSE: 540755 Sector: Others
NSE: GICRE ISIN Code: INE481Y01014
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VOLUME 2647
52-Week high 410.10
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P/E 19.86
Mkt Cap.(Rs cr) 53,790
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OPEN 308.00
CLOSE 307.30
VOLUME 2647
52-Week high 410.10
52-Week low 299.90
P/E 19.86
Mkt Cap.(Rs cr) 53,790
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

General Insurance Corporation of India. (GICRE) - Auditors Report

Company auditors report

To

The Members of

GENERAL INSURANCE CORPORATION OF INDIA

1. Report on Standalone Financial Statements

We have audited the accompanying standalone financial statements of GENERAL INSURANCECORPORATION OF INDIA (‘the Corporation') which comprise the Balance sheet as at 31stMarch 2018 the Revenue Accounts of Fire Miscellaneous Marine and Life Insuranceand the Profit and Loss Account and the Cash flow statement for the year then ended and asummary of significant accounting policies and other explanatory information in which areincorporated the returns of three Foreign Branches and one Domestic Branch audited bybranch auditors appointed by Comptroller and Auditor General of India New Delhi and oneForeign Representative Office certified by the local Auditor appointed by the Corporation.

2. Management's Responsibility for the Financial Statements

The Corporation's Board of Directors is responsible for the matters stated in Section134 (5) of the Companies Act 2013 ("the Act") with respect to preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Corporation inaccordance with the Insurance Act 1938 the accounting principles as prescribed inInsurance Regulatory and Development Authority of India (IRDAI) (Preparation of FinancialStatements and Auditor's Report on Insurance Companies) Regulations 2002 and orders ordirection issued by the IRDAI including Accounting Standards specified under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Corporation and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

3. Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Corporation's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Corporation's Directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements are prepared in accordance with the requirements ofthe Insurance Act 1938 IRDAI (Preparation of Financial Statements and Auditor's Reporton Insurance Companies) Regulations 2002 and the Companies Act 2013 to the extentapplicable and in the manner so required and the financial statements read withsignificant accounting policies and notes thereon give a true and fair view in conformitywith the accounting principles generally accepted in India as applicable to insurancecompanies of state of affairs of the Corporation as at 31st March 2018 and ofsurplus of revenue accounts of Fire Miscellaneous Marine and Life business and itsprofit and its cash flows for the year ended on that date.

5. Emphasis of matter

We draw attention to Note no. 50 to the financial statement in respect ofirregularities detected in acceptance of reinsurance contracts and short collection ofpremium by an employee. Total loss incurred by the Corporation on account of suchunauthorised transaction is Rs. 443500 thousand till the date of the Balance Sheet. Ouropinion is not qualified in respect of this matter.

6. Other matter

We did not audit the financial statements/information of three foreign branches and oneforeign representative office and one domestic branch included in the standalone financialstatements of the Corporation whose financial statements/financial information reflecttotal assets of Rs. 64798768 thousand as at 31st March 2018 and totalrevenues of Rs. 34512157 thousand for the year ended on that date as considered in thestandalone financial statements. The financial statements/information of these branchesand representative office have been audited by the other auditors whose reports have beenfurnished to us and our opinion in so far as it relates to the amounts and disclosuresincluded in respect of these branches and office is based solely on the report of suchother auditors. Our opinion is not qualified in respect of this matter.

7. Reports on Other Legal & Regulatory Requirements

As required by section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b. in our opinion proper books of account as required by law have been kept by theCorporation so far as it appears from our examination of those books and proper returnsadequate for the purpose of our audit have been received from the branches andrepresentative office not visited by us.

c. The reports of three foreign branches on the accounts of the branch offices of theCorporation audited by branch auditors and one representative office certified by otherauditor under section 143 (8) of the Act have been sent to us and have been properly dealtwith by us in preparing this report.

d. The Balance Sheet Revenue Accounts Profit and Loss Account and Cash flow statementdealt with by this report are in agreement with the books of account and with the returnsreceived from branches and representative office not visited by us.

e. The Balance Sheet The Revenue Accounts and the Profit and Loss Account have beendrawn in accordance with the Insurance Act 1938 the IRDAI

Act 1999 and the Act except for the Cash Flow Statement (Refer Note 52) which isprepared under Indirect Method whereas IRDAI regulations require Cash Flow Statement tobe prepared under direct method.

f. The actuarial valuation of liabilities is duly certified by the appointed actuaryincluding to the effect that the assumptions for such valuation are in accordance with theguidelines issued by the Institute of Actuaries of India to its members and has beenforwarded to IRDAI.

g. On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in termsof Section 164 (2) of the Act.

h. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and are also in conformity with the accounting principlesas prescribed in the IRDAI Regulations.

i. Investments have been valued in accordance with the provisions of the Insurance Act1938 (4 of 1938) and IRDAI (Auditor's report) Regulations 2002.

j. The accounting policies selected by the Corporation are appropriate and are incompliance with the applicable accounting standards and with the accounting principles asprescribed in the IRDAI

(Auditor's report) Regulations 2002 or any order or direction issued by the IRDAI inthis behalf.

k. The Corporation being the Insurance Company the Companies (Auditor's Report) Order2016 ("the order") as amended issued by the Central Government of India interms of sub-section (11) of section 143 of the Act is not applicable.

l. With respect to the adequacy of the internal financial controls over financialreporting of the Corporation and the operating effectiveness of such controls refer toour separate report in "Annexure A". m. With respect to the directions issued byComptroller and Auditor General of India as per Section 143 (5) of the Act in our opinionand to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact in its financial statement due todifference between title of ownership in respect of CGS/SGS/bonds/ Debentures/Sharesavailable in physical/demat format vis a vis amount shown in the books. [Refer noteno.1(a) & 6]

ii. The Annual Investment Policy 2017-18 of the Corporation as approved by the Boardhas not prescribed any stop-loss limits in respect of the investment activity. Stop-losslimits have been prescribed under the said policy in respect of scrips forming part ofthe equity trading portfolio.

However the Corporation has not carried out any trading activity in equity during theyear under consideration.

iii. During the year under audit the Corporation has entered/renewed/signed 12 CapitalGearing Reinsurance Treaties. In the absence of any specific IRDAI Guidelines onaccounting of such treaties the accounting is done by the Corporation on the basis of theaccounting policy adopted by the Corporation for other treaties except that no UnexpiredRisk Reserve is created on such treaties in view of the fact that the loss to the extentof loss-ratio specified in each treaty is already provided for during the year.

n. With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: i. theCorporation has disclosed the impact of pending litigations on its financial position inits financial statements. [Refer Note 47(g)];

ii. the Corporation has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts [Refer Schedule 13 & 14];

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Corporation.

o. We further certify that

i. We have reviewed the management report and there is no apparent mistake or materialinconsistencies with the financial statements.

ii. The Corporation has complied with the terms and conditions of the registrationstipulated by the Authority (IRDAI).

iii. We have verified the cash balances investments and securities relating to loansgiven by the Corporation on test check basis by actual inspection or by production ofcertificates or other documentary evidence except to the extent of investments of thevalue aggregating to Rs. 682 thousand as mentioned in Notes 1(a) to the accounts.

iv. The Corporation has not undertaken any transaction relating to any trust as atrustee.

However the Corporation is acting as a Manager of Terrorism pool and Nuclear Pool. Thefinancial statements of the Corporation do not include the investments assets andliabilities pertaining to the pool.

v. No part of the assets of the policyholders' funds have been directly or indirectlyapplied in contravention of the provisions of the Insurance Act 1938 (4 of 1938) relatingto the application and investments of the policyholders' funds.

For GBCA & Associates For Samria & Co.
Chartered Accountants Chartered Accountants
{ICAI Firm Regn. No. 103142W} {ICAI Firm Regn. No. 109043W}
Sanjeev Lalan Adhar Samria
Partner Partner
Membership No. 045329 Membership No. 049174
Place : Mumbai
Date : 25th May 2018

Annexure - A to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GeneralInsurance Corporation of India ("the Corporation") as of 31st March2018 in conjunction with our audit of the standalone financial statements of theCorporation for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Corporation's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Corporation considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Corporation's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Corporation's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

Commensurate to the size and nature of the business we believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Corporation's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Corporation's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Corporation's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Corporation; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Corporation are being made only in accordance with authorisationsof management and directors of the Corporation; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorised acquisition use or dispositionof the Corporation's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion commensurate with the size & nature of business the Corporationhas in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at 31st March 2018 based on the internal controlover financial reporting criteria established by the Corporation considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For GBCA & Associates For Samria & Co.
Chartered Accountants Chartered Accountants
{Firm Regn. No. 103142W} {Firm Regn. No. 109043W}
Sanjeev Lalan Adhar Samria
Partner Partner
Membership No. 045329 Membership No. 049174
Place : Mumbai
Date : 25th May 2018

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THECOMPANIES ACT 2013 ON THE FINANCIAL STATEMENTS OF GENERAL INSURANCE CORPORATION OF INDIAFOR THEYEAR ENEDED 31st MARCH 2018.

The preparation of financial statements of General Insurance Corporation of India forthe year ended 31st March 2018 in accordance with the financial reportingframework prescribed under the Insurance Act 1938 read with the Insurance Regulatory andDevelopment Authority (Preparation of Financial Statements and Auditor's Report of theInsurance Companies) Regulations 2002 and the Companies Act 2013 (Act) is theresponsibility of the management of the company. The statutory auditors appointed by theComptroller and Auditor General of India under Section 139(5) of the Act are responsiblefor expressing opinion on the financial statements under section 143 of the Act based onindependent audit in accordance with the standards under on auditing prescribed undersection 143(10) of the Act. This is stated to have been done by them vide their AuditReport dated 25th May 2018.

I on behalf of the Comptroller and Auditor General of India have conducted aSupplementary Audit under Section 143(6)(a) of the Act of the financial statements ofGeneral Insurance Corporation of India for the year ended 31st March 2018.This supplementary audit has been carried out independently without access to the workingpapers of the statutory auditors and is limited primarily to inquiries of the statutoryauditors and company personnel and a selective examination of some of the accountingrecords. On the basis of my audit nothing significant has come to my knowledge which wouldgive rise to any comments upon or supplement to statutory auditor's report.

For and on the behalf of the
Comptroller and Auditor General of India
(Roop Rashi)
Place : Mumbai Principal Director of Commercial Audit and
Dated : 26th July 2018 Ex-officio Member Audit Board-I Mumbai