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General Insurance Corporation of India.

BSE: 540755 Sector: Others
NSE: GICRE ISIN Code: INE481Y01014
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VOLUME 32774
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General Insurance Corporation of India. (GICRE) - Director Report

Company director report

To the Members

The Directors have pleasure in presenting the Forty Seventh Annual Report on theworking and affairs of the Corporation alongwith the audited statements of account for theyear ended 31st March 2019.

FINANCIAL RESULTS:

The highlights of the financial results for the year under review are as under:

(Rs. in Crore)

2018-19

2017-18

1. Gross premium 44238.00 41799.37
2 . Net Premium 38995.97 37634.46
3. Net Earned Premium 37679.08 38096.05
4. Net Incurred Claims 33739.95 32953.55
% to Earned Premium 89.50 86.50
5. Net Commission 6105.43 6370.15
% to Earned Premium 16.20 16.70
6. Operating Expenses and Other Outgo less Other Income 39.87 269.77
7. Investment Income Apportioned to Revenue less expenses 4632.67 3830.88
8. Premium Deficiency 5.29 0.00
9. Total Profit/Loss (-) 2421.21 2333.46
(3+7-4-5-6-8)
10. Interest Dividends & Rents (net) and Profit on sale of Investments 1768.67 1561.15
11.Other Income less Other Outgo 17.75 -52.25
12.Reserve for Doubtful Debts and Investment including Amortization of Investments Written off and diminution in the value of investments written off 773.81 174.10
13. Profit before Tax (9+10+11-12) 3433.82 3668.26
14. Provision for tax including deferred taxes 1209.51 434.68
15. Profit after Tax (13-14) 2224.31 3233.58

(Net Earned Premium is arrived after adjustments for Reserve for Unexpired Risks)

(Percentages relate to the net earned premium of the corresponding year)

(Obligatory sessions from Domestic Insurance Companies reduced from 10% to 5% w.e.f.01.04.13 wide IRDA/NL/RI/41/2012-13 dated 3rd March 2013)

DIVIDEND & DIVIDEND DISTRIBUTION POLICY

The Board of Directors at its meeting held on 23rd May 2019 recommended aDividend of Rs. 6.75 per share of Face Value of Rs. 5/- each (i.e. 135% of paid-up equityshare capital) for the year 2018-19 as against Rs. 13.5 per share of Face Value of Rs. 5/-each (i.e. 270% of paid-up equity share capital) in 2017-18. The final dividend shall bepaid to the Members whose name appear in the Register of Members as on 22ndJuly 2019.

The Board of your Corporation has formulated a Dividend Distribution Policy. The Policyis available on the website of the Corporation https://www.gicofindia.com/en/media-menuu/downloads/categorv/3-general-files.

BONUS SHARES

The Board of Directors in their meeting held on 25th May 2018 and pursuantto approval of Shareholders through Postal Ballot have issued shares in the ratio of 1:1i.e. 1 (one) equity share of Rs. 5/- each for every 1 (one) existing equity share of Rs.5/- each to the shareholders of the Corporation in the month of July 2018.

CAPITAL AND FUNDS

Capital and Funds of the Corporation stood at Rs. 80834.73 Crore as on 31stMarch 2019 as against Rs. 74347.78 Crore in the previous year the details of which aregiven below:

(Rs. in Crore)

As on 31.03.2019

As on 31.03.2018

Shareholders' Funds (Net Worth)
Paid up Capital 877.20 438.60
General Reserve 15885.38 16323.98
Profit & Loss a/c* 4030.33 3233.67
Share Premium Account 1544.07 1544.07
Total 22336.98 21540.32
Less: Deferred Tax Assets 2.56 14.40
Net worth 22334.42 21525.92
Policyholders Fund 58500.31 52821.86
Total Funds 80834.73 74347.78

*Profit & loss account Rs. 2224.31 Crore (Previous year Rs. 3233.58 Crore)without making adjustment for dividend dividend distribution tax.

Net worth (Shareholders' Funds) for the last 5 years

ASSETS

Total assets of the Corporation were '118883.62 Crore as on 31st March2019 as compared to '109672.39 Crore as on 31st March 2018.

CONSOLIDATED FINANCIAL STATEMENT

Provisions regarding Financial Statements are laid down under Section 129 of theCompanies Act 2013. As per the provision of Section 129 (2) of the said Act at everyAnnual General Meeting of a company the Board of Directors of the company shall laybefore such meeting financial statements for the financial year. Section 129 (3) of theCompanies Act 2013 provides that where a company has one or more subsidiaries it shallin addition to financial statements provided under sub-section (2) of Section 129 preparea consolidated financial statements of the company and of all the subsidiaries in the sameform and manner as that of its own which shall also be laid before the Annual GeneralMeeting of the company along with the laying of its financial statements under sub-section(2) of Section 129.

Explanation:

The Corporation is preparing Consolidated Financial Statements as it has twosubsidiaries namely GIC Re South Africa Limited and GIC Re India Corporate MemberLimited UK and two Associate Companies namely Agriculture Insurance Company of IndiaLtd. (AICIL) and India International Insurance Pte. Ltd. Singapore.

FINANCIAL RATING AND RANKING

Global rating agency A M Best reaffirmed the Financial Strength Rating of "A-(Excellent)" and issuer credit rating of "a-" of the Corporation in March2019. The outlook of these credit ratings is Stable. The rating reflects GIC Re's balancesheet strength which AM Best categorizes as very strong as well as its adequateoperating performance favorable business profile and appropriate enterprise riskmanagement.

CARE Ratings Limited (formerly known as Credit Analysis & Research Limited)reaffirmed AAA (In) Claims Paying Ability rating for the Corporation in April 2019. Therating reflects the Corporation's strategic importance as the dominant Indian reinsurerwith good solvency position comfortable liquidity profile moderation in asset qualityand moderate profitability. Ownership by GOI solvency position and profitability are keyrating sensitivities.

GIC Re is ranked 10th by Standard & Poor's in the Top 40 GlobalReinsurance Groups Ranked by Net Reinsurance Premiums Written in year 2017 (12thin previous year).

A M Best has also ranked GIC Re as 11th in the Top 50 World's LargestReinsurance Groups based on Gross Written Premium in year 2017 (12th inprevious year).

SOLVENCY RATIO

The Solvency Margin of the Corporation as on 31st March 2019 stood at 2.06as against 1.72 in the previous year.

INVESTMENTS

The book value of the investment of the Corporation in India (representing investmentloans & deposits) amount to Rs. 52923.35 Crore as on 31st March 2019 as against Rs.47816.52 Crore in the previous year. The Investment Income of Rs. 6130.30 Crore wereapportioned to Policy Holder & Share Holder as under:

(Rs. in Crore)

2018-19

2017-18

Apportioned to Policyholders 4436.51 3705.29
Apportioned to Shareholders 1693.80 1509.97

The mean yield on funds with profit on sale of investments stood at 12.17% (Previousyear 12.0%). The percentage of net NPA (Non-Performing Assets) to Gross loan assets(including Government Securities) was at 1.12% (Previous year 0.56%).

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (IRDAI)

The Corporation being a Reinsurance Company its working and functions are governed bythe Insurance Regulatory and Development Authority of India (IRDAI). The Corporation'sexisting paid-up equity capital of Rs. 877.20 Crore conforms to the specifications of theIRDAI. The Accounts of the Corporation are drawn up according to the stipulationsprescribed in the IRDAI (Preparation of Financial Statements and Auditor's Report)Regulations 2002.

"ART/Structured Solutions Contract" (Retro Programme)

GIC Re had arranged ART Retro protection programme from 1st October 2001till 31st May 2014 followed by Structured Solution Contract from 1stJune 2014 till 31st May 2017 for covering risks from all classes of businessas per agreed terms and conditions. The ART Contract was for the period 1stOctober 2001 to 31st May 2014 and was not renewed from 31st May2014.

The Structured Solution Contract though not utilized following the Board resolution inFebruary 2017 is still live with some run-off cessions still being serviced under thecontract. IRDAI vide letter dated 25th February 2019 has approved the existingStructured Solutions Contract. GIC Re and the reinsurers will maintain all contractualrights and obligations arising out of the contract and towards statutory dues till thefinal closure at a mutually agreed date after both parties agree to the net balancequantum.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The provisions of Section 186(4) of the Companies Act 2013 (the Act) requiringdisclosure in the financial statements of the full particulars of the loans giveninvestment made or guarantee given or security provided and the purpose for which the loanor guarantee or security are proposed to be utilised by the recipient of the loan orguarantee or security are not applicable to the Corporation.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS

There are no significant and/or material orders passed by the Regulators or Courts orTribunals impacting the going concern status of future operations of the Corporation.

ENTERPRISE RISK MANAGEMENT

The Corporation has in place a robust ERM policy. The policy defines a Governancestructure as well as the roles and responsibilities at each level. The ERM department isheaded by the Chief Risk Officer (CRO) who reports to the Board Risk Management Committeethrough the Chairman cum Managing Director (CMD) and Management-level ERM committee.

ERM department conducts risk assessment with the assistance of the Risk and MitigationPlan Owners (RMOs) primarily Scale V level officers where new risks are brought fordiscussion and thereafter the entire risk universe is recalibrated with the objective ofprioritization for mitigation. During the exercise RMOs also propose controls/mitigationplans which post deliberations are implemented. The department keeps conducting periodicreview of the risk universe and checking the control effectiveness and keeps theManagement and Board Risk Management Committees duly informed of developments anddeviations.

As part of its allied activities the ERM department reviews the Business ContinuityPlan (BCP) which aims at providing continuity of services at a defined minimum acceptablelevel of critical functions and to safeguard the financial competitive and reputationalposition in the short and medium term. Teams under BCP have been adequately trained as totheir specific responsibilities under the Plan with an aim to create awareness toreinforce the Business Continuity culture and refresh the importance of the on-goingBusiness Continuity Exercises. As part of BCP a Mock Drill was conducted at an AlternateSite so as to create awareness and ensure preparedness among the Critical Resource Teamand other Business Continuity Teams in time of emergency.

During the year under review a neutral Third Party Consultant was appointed forcarrying out the Stress Test Exercise of GIC Re for the Financial Year 2018-19 based onfinancial data as on 31st March 2018. The Stress Test Exercise evaluatedscenarios of significant adverse threats to the future financial condition and found it tobe adequately resilient.

Framing of Standard Operating Procedures (SOP) was undertaken for two key functions ofthe Corporation viz: Reinsurance and Investment and their related accounting activitiesthus ensuring that the critical processes have been duly documented.

An Anti-Fraud Policy framed by GIC which covers prevention identificationinvestigation and reporting of frauds is reviewed every year. Corporation has declared'Zero Tolerance' to any non-compliance to the terms and conditions of the Anti-Fraudpolicy.

CORPORATE SOCIAL RESPONSIBILITY (CSR) REPORTING

The Corporation is having a Corporate Social Responsibility Policy (CSR Policy)indicating the activities to be undertaken by the Corporation which has been approved bythe Board.

The CSR Policy may be accessed on the Corporation's website at the link:http://gicofindia.com/images/pdf/CSR-Policy-with- amendment.pdf

The CSR Reporting as per Section 135 of the Companies Act 2013 given in Annexure I.

AUDITORS AND AUDIT REPORT STATUTORY AUDITORS

Samria & Co. Chartered Accountants and J. Singh & Associates CharteredAccountants were appointed as Joint Statutory Auditors to audit the accounts of theCorporation for the financial year 2018-19 by the Comptroller & Auditor General ofIndia under Section 139 and section 143 of the Companies Act 2013.

The Auditors Report does not contain any qualification reservation or adverse remark.

SECRETARIAL AUDIT

The Board has appointed M/s. S. N. Ananthasubramanian & Co. Company Secretaries toconduct Secretarial Audit for the financial year 2018-19.

The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

Pursuant to Section 204 of the Companies Act 2013 the Secretarial Audit Report of theCorporation is given in Annexure II.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return (Form MGT-9) of the Corporation is annexed herewith asAnnexure III to this Report and also available on the website of the Corporation athttps://www.gicofindia.com/en/investors-en.

COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE The Corporation has annexed to thisreport Annexure IV a certificate obtained from the Practicing Company Secretary regardingcompliance of conditions of Corporate Governance as stipulated in SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

MANAGEMENT DISCUSSION & ANALYSIS REPORT The operations and future prospects of theCorporation is dealt in the Management Discussion and Analysis Report which forms part ofthe Directors Report.

FOREIGN EXCHANGE EARNINGS & OUTGO AND OTHER INFORMATION

The particulars of Foreign Exchange earnings/outgo as required by the Companies(Accounts) Rules 2014 is given below:

i) Earnings Rs. 3870.93 Crore

ii) Outgo Rs. (4968.92) Crore

The earnings included all receipts denominated in foreign currencies in respect ofpremium recovery of claims outward commission and investment earnings. The outgocomprised all payments in foreign currency in respect of outward premium claims onreinsurance accepted commission and expenses of management.

Expenses on (a) Entertainment (b) Foreign Tours and (c) Publicity and Advertisementamounted to Rs. 750499/- Rs. 44203714/- and Rs. 109886473/- respectively for theyear under review.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The Corporation is not engaged in any manufacturing activity and as such there are noparticulars to disclose under the Companies (Accounts) Rules 2014 as regards Conservationof Energy or Technology absorption.

PERSONNEL AND INDUSTRIAL RELATIONS

I. STAFF POSITION AS ON 31st March 2019

Class I - Officers 506
Class III - Clerical Employees 69
Class IV - Sub-Staff 5
TOTAL 580

II. Composition of Scheduled Castes and Scheduled Tribes in the employee Strength

Cadre

Total Employee Strength

Composition

SC % ST %
Officers 506 77 15.22 27 5.33
Clerical 69 21 30.43 10 14.49
Sub-Staff 5 0 0 0 0
Total 580 98 16.89 37 6.38

III. WELFARE OF SC / ST / OBC:

As per the National Policy on reservation for SC / ST & OBC GIC Re has framedrules which allow reservations and concessions/relaxation for SC / ST and OBC inrecruitment and promotion wherever applicable. Special in-house training classes areconducted for SC / ST employees who are in the promotion zone in order to enable them toacquire knowledge so that they are able to give a better account of themselves in thewritten test. The Corporation also organizes online pre-recruitment trainings for the SC /ST candidates who apply for the recruitment examination on All India Basis.

DISCLOSURE UNDER THE SEXUAL HARASSEMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Corporation has been employing women employees in various cadres within its office.The Corporation has in place a policy against Sexual Harassment in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. All employees are covered under the policy. There was no complaintreceived from any employee during the financial year 2018-19 and hence no complaint isoutstanding as on 31st March 2019 for redressal.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY OF THE CENTRAL GOVERNMENT

During the year under review the Corporation improved its performance inimplementation of Official Language Policy of the Government of India and complied withthe guidelines issued by the Ministry.

For implementation of Official Language Policy of the Government regular inspectionsof Departments situated in head office Mumbai and liaison offices at Delhi and Chennaiwere carried out by the officials of Official Language Department.

Four In-house workshops were organized and four meetings of Official LanguageImplementation Committee were conducted during the year. Apart from the regulartranslation work translation of Financial Standing Order (FSO) was carried out.

In-house quarterly journal KSHITIJ was published regularly. It was also made availableon Corporation's website. During Hindi fortnight various competitions were organized. Thewinners of these competitions were awarded prizes during a cultural programme.

CMD's Shield was awarded to Human Resources Department and certificates were given toGeneral Accounts Department and Corporate Social Responsibility Department as thesedepartments were found to be the best performing departments of the Corporation withregards to Official Language Implementation.

Almost all Officers and Employees are having working knowledge of Official Language.Out of 580 personnel of GIC Re 149 are proficient in Hindi.

Akruti based UNICODE has been installed on the computers. Officers and Employees can dotheir day to day work in Hindi also.

Officials of GIC have attended all Town Official Language Implementation Committee(TOLIC) meetings and participation was assured in various programmes organized under TownOfficial Language Implementation Committee (TOLIC) by its members.

Official Language Department of GIC was awarded II prize for Hindi In-house magazineKSHITIJ by Town Official Language Implementation Committee (TOLIC). Hindi Implementationin GIC Re was awarded III prize by an apex NGO working in the field of Official Language.

VIGILANCE

The Vigilance Department of the Corporation is headed by a Chief Vigilance Officer(CVO) in the rank of General Manager. The emphasis of the Vigilance Department is onpreventive vigilance.

The Department also focuses on various systems improvement initiatives.

The focus of the Organization in concurrence with CVC guidelines is to take proactivesteps to avoid a vigilance-like situation. Audit reports are studied and remarks made byAuditors are analysed. Surprise inspections are conducted periodically and lapses studiedfrom a vigilance angle. Based on this suggestions are made for improvement of systems andprocedures of the organization. The purpose is to focus and accept vigilance as anorganizational objective and create an atmosphere conducive to "Zero corruption"functioning with role clarity and clear sense of direction. To improve vigilanceadministration CVO and other officers also participate in the vigilance trainingprogrammes/workshops conducted by reputed organizations. The vigilance department alsoconducts workshop for employees during the vigilance awareness week.

Periodical discussions are held with the officials of various departments / companiesto ensure financial and office discipline and imbibe a culture of value and ethics in theorganization.

INTERNAL AUDIT DEPARTMENT

The Corporation has systems and controls in place covering all major areas ofoperations such as Underwriting Investment and Finance. The objective of the InternalAudit Department is to critically appraise the adequacy and effectiveness of the varioussystems and controls in the various areas of operation of the Corporation with a view tofacilitate the Management to strengthen the overall governance mechanism.

To achieve the objective the Internal Audit Department has utilized the services ofprofessional audit firms. During the year 2018-19 M/s Mayra & Khatri werere-appointed as Internal Auditors for Reinsurance Operations and Business Accounts and M/sS.K. Patodia & Associates were re-appointed as Internal Auditors for InvestmentOperations and other departments.

The Internal Audit Department also appoints Internal Auditors for foreign branches ofGIC Re in London Dubai and Malaysia representative office in Moscow and InternationalFinancial Service Centre Insurance Offices (IIO) at GIFT City. The Internal Audit of GIFTCity IIO was conducted by GIC Re H.O. officials for FY 2018-19. The Internal AuditDepartment also conducted audit of Liaison Offices at Delhi and Chennai for FY 2018-19.

Besides the following special audits were also arranged by the Internal AuditDepartment:

1. Secretarial Audit

2. RTI Audit

3. Audit of FAIR Nat CAT Pool

4. Audit of Indian Nuclear Insurance Pool

5. Audit of Indian Market Terrorism Risk Insurance Pool

6. IRMSP Audit

Internal Audit Department also liaisons with Comptroller & Auditor General of India(CAG) and other departments for matters relating to CAG audit. The status of Draft Paras(DPs) and Inspection Reports (IRs) issued by Comptroller & Auditor General of India(CAG) is placed before the Board and the Audit Committee of the Board from time to time.

The Internal Audit Department functions independently under the supervision of theAudit Committee of the Board.

The Audit reports of GIC Re Head Office and Foreign branches are placed before theAudit Committee of the Board for their consideration and directions. Six (6) meetings ofthe Audit Committee of the Board were held during the year 2018-19. Action Taken Reportswere presented to the Audit Committee to report the status of progress on theimplementation of the directions of the Committee. During the year emphasis was laid oncore business activities and audit of Reinsurance underwriting operations settlement ofoutstanding accounts & reconciliations of broker balances. Other departments likeHuman Resources IT Communication General Accounts Office Services etc. were alsocovered during the year.

Besides major expenditures incurred both Revenue and Capital having financialimplications were also subjected to audit. Treaty acceptances Cash Call settlements andSettlement of Accounts were audited on concurrent basis.

Audit of Investment Operations was conducted on concurrent basis. This covered theprimary and secondary market transactions. In line with RBI directions SubsidiaryGovernment Ledger (SGL) for Central and State Government Securities were subjected toconcurrent audit and confirmation of correctness of balances and its reconciliation at theend of each month were sent to RBI. The same were also placed before the Audit Committeeat its meetings.

The major contributions of the auditors during the year include appraising themanagement of the scope of improvement in cash call servicing broker-wise and cedant-wise receivable management reduction in unappropriated amounts and streamlining ofoutstanding loss reserves. The Audit function in the Corporation has brought aboutimprovement in data quality acceleration in claim processing streamlining of process ofaccounts receivable management in the Reinsurance Operations.

By critically appraising the Management of the Corporation of the various systems andprocesses the Internal Audit Department facilitated to strengthen the overall governancemechanism.

RTI ACT 2005

The Corporation has in place the stipulated structure to implement the RTI Act 2005 inthe Organization. The Setup is headed by a Director & General Manager designated asthe Transparency & Nodal Officer. A General Manager functions as the AppellateAuthority an Assistant General Manager is the Central Public Information Officer anAssistant General Manager discharges the duties of Assistant Public Information Officerunder the provisions of the Act. An Assistant Manager has been nominated as Nodal OfficerMIS.

The Corporate website www.gicofindia.com also hosts information as relevant to theCorporation under the Act. It has separate Right to Information link developed andcontinuously updated by the RTI Cell (https://www.gicofindia.com/en/right-to-information)containing information and complying with the provisions under the RTI Act 2005 and otherMinisterial and CIC circulars.

GIC in the FY 2018-19 complied with the guidelines issued by Ministry of Personnelregarding Implementation of suo motu disclosure u/s 4 of the RTI Act 2005 and its Auditthereof.

During the period under review (2018-19) the corporation received two hundred and tenApplications and seven First Appeals under the RTI Act 2005. All the Applications wereduly replied and appeals were disposed of well within the stipulated time. No SecondAppeal has been filed against the Corporation before Central Information Commission.

During the period under reviewTransparency Audit for Disclosure of Information wasconducted by Central Information Commission for 838 Public Authorities. General InsuranceCorporation of India has been Graded A with score of 96%.

INFORMATION TECHNOLOGY MANAGEMENT GROUP (ITMG)

Information Technology is an enabler and has been at the core of all global businesses.Applying 'state of art' technology and processes is important for GIC Re in moving towardsthe set vision of becoming a leading global reinsurance and risk solution provider.

Information Technology Management Group (ITMG) has been ably supporting the needs ofthe stakeholders for business and reporting. During the year under review ITMG whileensuring availability of uninterrupted IT services and keeping the data secure undertookthe following major activities:

• Life Reinsurance Management software (LRM) was configured and implemented. LRMwill contribute towards improvements in data management analysis and periodic regulatoryreporting.

• Catastrophe Modelling- ITMG assisted underwriting and protection sections inimplementing a global catastrophe modelling software for various perils and differentterritories worldwide.

• e-Helpdesk: A PowerApps based tool developed in-house for providing anopportunity for employees to raise support issues.

• Data Centre capacity has been enhanced by adding more nodes into theHyperconverged Infrastructure (HCI).

• Special Projects: Proof of Concept (POC) carried out in the areas of WirelessLAN Virtual Desktop Interface & Robotic Process Automation.

To review the controls and assess the vulnerabilities of the IT systems Vulnerabilityand Penetration Testing (VAPT) audit is conducted periodically by experts and actions aretaken based on the reports. Talks by experts are arranged to disseminate information onsecurity threats for the Middle and Top Management. Information Security Policy iscirculated to all employees.

Skill development training and building awareness of the IT team is a continuousprocess. In the age of disruptive technologies the team keeps abreast of the everevolving concepts such as Block Chain Machine Learning/ Artificial Intelligence andRobotic Process Automation by participation at relevant conferences seminars and specifictraining.

TRAINING/HRD

Employees today are required to compete in a dynamic environment where in technologyideas and events converge rapidly creating challenges and opportunities for them.

For this one is required to constantly learn new skills and be abreast of knowledge aswell as excel in Inter-personal relationships too. Training Department enables theemployees in perfecting their in-born talents and learning new skills. We empower them touse imagination develop creative solutions and remain flexible while ideating orcommunicating. Both experienced and young leaders become equipped to motivate others toturn their ideas into results that make a difference to business. Training plays animportant role in the overall growth of the organization.

In the year 2018-19 training was imparted to all levels of employees. Trainingprogrammes were conducted for the employees at GIC Suraksha Premises; National InsuranceAcademy Pune; Insurance Institute of India BKC Mumbai and other Reputed Institutes.Many soft skilled programmes as well as technical based programmes were initiated andcompleted successfully.

A summary of various training programmes organized by the Training Department areindicated below:

Organization

No. of Programmes

No. of Employees trained

GIC Re 12 452
National Insurance Academy 19 46
Insurance Institute of India 2 2
Other Reputed Institutes 70 198
Seminar / Conferences / Trainings in Foreign Countries 22 51

Some highlights of the programmes are:

1. 45 days long Induction Training Programme was conducted at Insurance Institute ofIndia BKC Mumbai for 25 Direct Recruit Scale-1 Officers (Assistant Manager). Thesessions covered aspects of both Insurance and Reinsurance.

2. This year training department has arranged the one - day workshop on CorporateGrooming Etiquette & Fine Dining by Ms. Sabira Merchant for the Senior Executives(GMs & DGMs) of GIC Re. The programme was received very well by all the executives.

3. In order to motivate the employees and bringing a new energy in them the trainingdepartment has conducted the two-days workshop on office procedures for all Class III/IVemployees of GIC RE.

4. As a special initiative towards SC/ST employees Training Department has nominated 5SC/ST GIC Re officials for the Three-days Reinsurance Training programme. The trainingprogramme was organized by the Singapore College of Insurance.Training Department has alsoconducted Workshop on "Reservation in Services" for SC/ST employees.

5. A specialized programme on 'MS EXCEL' was conducted at NIA Pune for all the BASofficials. It was a two days programme attended by 23 BAS officials. The programme wasappreciated by all the participants.

6. The Training Department also conducted a training programme to familiarize theemployees about Reinsurance Clauses and the training ended with a very interactive sessionwith the speaker Shri Vikas Shukla.

7. This time a specialized in-house programme on the topic - "SAP and BWPOverview" was also conducted at GIC Re Suraksha. Approximately 40 employees attendedthis training programme in different batches.

8. As part of the Vigilance Awareness Week training department has organized atraining on "Preventive Vigilance - DO's and DON'T's" for Deputy Managers andnewly promoted Senior Managers. The faculty for this session was our CVO Shri RaviChaudhary. This session brought out the precautionary steps needed to be taken by themiddle level managers.

The Training Department has ensured that every employee was nominated to at least onetraining programme during the year 2018-19. Such initiatives ensure that our employees areskilled enough to handle the complex business scenarios.

OVERSEAS EXPANSION

Overseas expansion of operations through branch offices subsidiaries and jointventures is an integral part of the business growth strategy so as to expand the reach ofthe operations into multiple countries throughout the world. GIC Re targets expansion intonew markets by efficiently using the potential and creating additional sustainable incomeopportunities both in developed countries where there is larger demand and in developingcountries where there is increasing demand.

Expansion plans are drawn basing on study of market opportunities supported byunderstanding of the business working environment and regulations in prospective markets.GIC Re has also been striking strategic partnership with reinsurers abroad to takeadvantage of the expertise and experience of both and leverage on economies of scale.

Following approval by Lloyd's in March 2018 to establish syndicate the fully Indiancapital backed GIC Syndicate 1947 became operational in London from April 2018. M/s.Pembroke Agency Limited a Liberty Mutual Company will be the Managing Agent in initialyears till GIC Re establishes its own Managing Agency.

Scaling up of Moscow Representative Office to a full-fledged business office is in anadvanced stage.

INVESTMENT IN INSURANCE COMPANIES DOMESTIC OPERATIONS

• AGRICULTURE INSURANCE COMPANY OF INDIA LTD. (AICIL)

The Corporation holds 35% equity of AICIL and NABARD holds 30% while the balance isheld equally to the extent of 8.75% by the four public sector non-life insuranceCompanies.

OVERSEAS OPERATIONS

GIC Re has 4 overseas offices viz; a Representative Office in Moscow and Branch Officesin London Dubai and Malaysia.

The Corporation has exposure in the share capital of Kenindia Assurance Company Ltd.Kenya India International Insurance Pte. Ltd. Singapore Asian Reinsurance CorporationBangkok and East Africa Reinsurance Company Ltd. Kenya.

• LONDON BRANCH (UK)

During the current financial year 2018-19 the Gross Premium written by the Branch wasGBP 99.29 million compared to GBP 90.21 million last year and earned a profit of GBP 11.04million as against a profit of GBP 1.85 million last year.

• DUBAI BRANCH (UAE)

During the current financial year 2018-19 the Gross Premium written by the Branch isAED 956.47 million compared to AED 1198.29 million last year and incurred a loss of AED25.91 million as against a loss of AED 0.18 million last year.

• MALAYSIA BRANCH

During the current financial year 2018-19 the Gross Premium written by the Branch wasRM 732.64 million compared to RM 664.07 million and incurred a loss of RM 34.40 million asagainst a loss of RM 49.18 million.

• KENINDIA ASSURANCE CO. LTD. KENYA

The paid-up share capital of the Company is Kshs 561 million. The total shares held byGIC is 515777 shares of Kshs 100 each as on 31st December 2018. TheCorporation's holding in the share capital of the Company is 9.19%.

• INDIA INTERNATIONAL INSURANCE PTE. LTD. SINGAPORE

The Corporation holds 20% shares in India International Insurance Pte. Ltd. which hasa share capital of S$ 50 million. The total shareholding of GIC Re in the Company is 10 mnshares each of 1 S$.

The Company has made a profit of S$ 4.76 million as against a profit of S$ 3.05 millionlast year.

The Directors have recommended a first & final dividend of 0.5 cents per sharebased on 2017 results.

• ASIAN REINSURANCE CORPORATION BANGKOK

The Corporation is holding 6.32% of the share capital as Associate Member of Asian Rein addition to holding 0.99% of the share capital as its Regular Member on behalf of theGovernment of India.

As per the Dividend Policy of the Corporation proposal for dividend will be consideredby the Council of Members in its next meeting.

• EAST AFRICA REINSURANCE COMPANY LTD. KENYA

The Corporation has 14.7521% stake in the share capital of East Africa ReinsuranceCompany Ltd. an existing profit making reinsurance company in Kenya. The totalshareholding of the Corporation is 221281 shares of 1000 Kshs as on 31stDecember 2018.

The Company has made a profit of Kshs 615.55 million as against a profit of Kshs 601.57million last year.

Board has recommended a total dividend of Kshs 100 million equivalent to 16.25% of PATto registered shareholders as at 31st December 2018.

• GIC BHUTAN RE LTD.

The maiden reinsurance company of Bhutan is a Joint Venture between the Corporation andlocal Bhutanese promoters. The venture began its operations in the name 'GIC Bhutan ReLtd.' in December 2013.

The Corporation has a 26% stake in the Joint Venture and held 13000000 shares ofvalue Nu 10 each as of 31st December 2018. The rest of the shareholding isdivided between two Local Bhutanese promoters with 17% stake each and 40% shares are heldby the public.

The Company has made a profit of Nu 42.84 million as against a profit of Nu. 31.44million last year. The Company has not declared any dividend for the year ended 31stDecember 2018.

• GIC RE SOUTH AFRICA LTD.

GIC Re South Africa Ltd. is the Corporation's first 100% owned subsidiary (Wholly ownedsubsidiary) operational since October 2014. The company when acquired was in the run-offfor both Life as well as Non-life business. GIC started writing new Non-life businesssince January 2015.

The Corporation held 571030862 no par value ordinary shares with a value of ZAR1142061724 constituting 100% of GIC Re South Africa Ltd's equity as of 31stMarch 2019.

The Company has made a profit of Rand 254.60 million as against a loss of Rand 76.42million last year.

The Company has not paid or declared any dividend during the year ended 31stMarch 2019.

• GIC RE INDIA CORPORATE MEMBER LIMITED

With the objective of becoming a reputed global reinsurer GIC Re expanded into Lloyd'sof London by offering reinsurance capacity to Lloyd's syndicates through quota sharecapital gearing treaties since 2011. Since as a capacity provider GIC Re was required tohave its own Corporate Membership at Lloyd's GIC Re acquired I-CAT CCM TEN Ltd. anexisting corporate Member company in November 2013 and renamed it as GIC Re IndiaCorporate Member Ltd. which is registered as a private limited company in the UK. TheCompany commenced reinsurance operations in 2014.

The business underwritten by the Company is fully reinsured with GIC Re.

The company has earned a profit of GBP 1.04 million as against a loss of GBP 22000last year.

The company has not declared payment of any dividend for the year.

LISTING OF EQUITY SHARES

The shares of the Corporation are listed on The National Stock Exchange of IndiaLimited (NSE) and BSE Limited (BSE).

PUBLIC DEPOSITS

The Corporation has not accepted any deposits under Section 73 of the Companies Act2013.

DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL

The Board of Directors of the Corporation as on 31st March 2019 consisted ofEight (8) Directors out of which four are independent Directors one is GovernmentNominee Director and three are whole-time Directors including the Chairman cum ManagingDirector.

None of the Directors are related to any other Director or employee of the Corporation.

The details pertaining to composition and change in Board committees and details ofmeetings is provided under Corporate Governance Report and hence not repeated here toavoid duplication.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent directors have given a declaration that they meet the criteria ofindependence as laid down under Section 149(6) of Companies Act 2013 and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015.

RETIREMENT OF DIRECTOR BY ROTATION

In accordance with the provisions of Section 152 of the Companies Act 2013 Shri RaviMital Government Nominee Director would retire by rotation at the forthcoming AGM and iseligible for re-appointment. Shri Ravi Mital has offered himself for re-appointment.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The Corporation being a Government Company is exempted to furnish information underSection 134 (3) (e) of the Companies Act 2013 vide MCA Notification dated 5thJune 2015.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSON AND OTHER EMPLOYEES

The Corporation being a Government Company the remuneration payable to Key ManagerialPersons and other employees are as per the Government of India norms.

CODE OF CONDUCT UNDER SECURITIES AND EXCHANGE BOARD OF INDIA (PROHIBITION OF INSIDERTRADING) REGULATIONS 2015

The Corporation has in place a Code of Conduct to regulate monitor and report tradesin securities by Directors Employees & Connected Persons which is in conformity withthe Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations2015. The Code is applicable to the Employees of the Corporation Designated Persons andtheir Immediate Relatives and Connected Persons to the extent applicable. The objectiveof the Code is to prohibit insider trading in any manner by the Designated Persons and tomaintain confidentiality of unpublished price sensitive information and access toinformation on a 'need to know' basis.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Corporation being a Government Company is subjected to the CVC Guidelines and theCorporation has a separate Vigilance Department administering the Vigilance matters.

The Corporation has a Whistle Blower Policy/Vigil Mechanism Policy approved by theBoard and the same is placed on the website of the Corporation.

CORPORATE GOVERNANCE

The Corporation continues to adopt the best practices of Corporate Governance to ensuretransparency integrity and accountability in its functioning. The Corporate GovernanceReport has been incorporated as a separate section forming part of this Annual Report.

BUSINESS RESPONSIBILITY REPORTING

Business Responsibility Report as stipulated under Regulation 34 of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 forms part of the AnnualReport and has been hosted on the website of the Corporation and can be viewed atwww.gicofindia.com.

CEO / CFO CERTIFICATION

In terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015the certification by the Managing Director & CEO and Chief Financial Officer of theCorporation on the financial statements and internal controls relating to financialreporting has been obtained.

DETAILS OF UNCLAIMED SUSPENSE ACCOUNT

Details of Unclaimed Suspense Account as provided by our RTA i.e. Karvy Fintech PrivateLimited pursuant to Regulation 39 read with Part F of Schedule V of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015.

Sr. No. Description

No. of Shareholders

No. of Shares

1 Aggregate Number of shareholders and the outstanding shares lying unclaimed as on 1st April 2018 07 112
2 Number of shareholders who approached Listed entity for transfer of shares from suspense account during the year 06 96
3 No. of shareholders to whom shares were transferred from suspense account during the year 06 96
4 Aggregate Number of shareholders and the outstanding shares lying unclaimed as on 31st March 2019 01 32*

*The Outstanding shares lying unclaimed as on 31st March 2019 includes 16(Sixteen) Bonus Equity shares issued by the Corporation to the Shareholders in the monthof July 2018.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134 of Companies Act

2013 the Directors confirm that:

1. In the preparation of Annual Accounts the applicable accounting standards have beenfollowed along with proper explanations relating to material departures;

2. The Directors have selected such Accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Corporation at the end of the financial year andthe profit and loss of the Corporation for that period.

3. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Corporation and for preventing and detecting fraud andother irregularities;

4. The Directors have prepared the annual accounts on a going concern basis;

5. The Directors have laid down Internal financial control to be followed by theCorporation and that such Internal Financial Controls are adequate and are operatingeffectively; and

6. The Directors have devised proper systems to ensure compliance with applicable lawsand that such systems were adequate and operating effectively.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE CORPORATION

There has been no material change and commitment affecting the financial position ofthe Corporation which occurred between the end of the financial year of the Corporation towhich the financial statements relate and the date of this Report.

BOARD MEETINGS

The number of Board meetings held during financial year 2018-19 of the Corporation wereSix (6) and these are as follows:

25th May 2018

30th July 2018

5th September 2018

13th November 2018

8th February 2019

25th March 2019

SECRETARIAL STANDARDS

During 2018-19 the Corporation was in compliance with the applicable accountingstandards issued by the Institute of Company Secretaries of India with respect to Boardand General Meetings.

SUBMISSION OF ACCOUNTS BEFORE PARLIAMENT

As confirmed by the Ministry of Finance Insurance Division the Annual Report of theCorporation for the year 2017-18 along with Directors Report were placed before both theHouses of Parliament under Section 394 of the Companies Act 2013 as per details givenbelow:

LOK SABHA 21st December 2018
RAJYA SABHA 18th December 2018

ACKNOWLEDGEMENT

The Corporation is grateful to the Insurance Regulatory and Development Authority ofIndia Government of India Reserve Bank of India and Securities and Exchange Board ofIndia for their continued cooperation support and guidance. The Corporation wishes tothank its investors rating agencies depositories Registrar & Share Transfer Agent& Stock Exchanges for their support.

The Corporation would like to express its gratitude for the continued support andguidance received from Principal Director of Commercial Audit and Ex-Officio Member AuditBoard- I Mumbai.

The Directors express their deep sense of appreciation to all the employees whoseoutstanding professionalism commitment and initiative have made the Organisation's growthand success possible and continue to drive its progress. Finally the Directors wish toexpress their gratitude to the Members for their trust and support.

For and on behalf of the Board of Directors

Sd/-

(Alice G. Vaidyan)

Chairman-cum-Managing Director

Date : 23rd May 2019

Place : Mumbai