oriental insurance company ltd share price Management discussions

THE ORIENTAL INSURANCE COMPANY LIMITED ANNUAL REPORT 2006-2007 MANAGEMENT DISCUSSION AND ANALYSIS Information Technology: The year 2006-07 was extremely eventful for the Information Technology department of the Company. Projects in which the department was engaged were: * Rollout of INLIAS application in additional offices * Hardware sizing to bear the load of remaining offices * Arrangement of infrastructure for Phase-2 rollout. * Implementation of Investment Module. INLIAS Rollout: Out of the 412 offices earmarked for INLIAS (Integrated Non Life Insurance Application Software) under Phase-1 , 262 offices were completely live as on 31 st March 2007. These offices fall under Bangalore, Chennai, Cochin, Coimbatore, Hyderabad, Nagpur, Pune and two regions each in Mumbai and New Delhi. During this year, the INLIAS Software got stabilized to a great extent and some of the pending functionalities got incorporated and implemented. The software was found to be quite flexible in dealing with the detariffed regime when the products were configured seamlessly to the satisfaction of the user departments. Accounts were finalized by all the 262 offices with lot of ease this year due to better understanding of the software. Full credit must be given to the officers and staff in these offices for having undergone change management in the shortest possible time. Some of our operating offices closed their accounts in a record time of 15 days from the close of the year. INLIAS has been extended further to allow online data entry by authorized users of financiers / Brokers/ Motor Dealers from their site so that the issuance of policies can be speeded up and is delivered to the customers at the point of purchase. During the current year (2007-08) there will be full scale implementation of INLIAS in all the operating offices throughout the country. We are committed to completing the project during the current year; so that, we face up to the changing market place. Hardware Sizing: The rollout plan was hampered by response time issues. By constant monitoring and periodical meetings with all vendors, we could narrow down on the causes and solutions for every problem. Hardware sizing to cope with the load of all the remaining offices of the company was done. Requisite hardware infrastructure was ordered in January 2007 and the core infrastructure at DC is expected to be commissioned by June, 2007. Infrastructure for Phase-2: The PC-LAN infrastructure necessary for rollout of INLIAS in remaining 504 offices under Phase-2 was analysed and the process of acquiring has been initiated. The feasibility of extending the WAN infrastructure in above mentioned phase-II offices has also been initiated to synchronize with creation of basic Infrastructure Investment Software: Company has acquired an SAP based investment module which provides integrated approach to management of Investments. Investment management is now possible through online module. System interface with NSDL, Stock Holding/RBI, Banks, CMIE, etc. will give real benefit to the Department and Organization as a whole. The parallel cum live run has already been commenced. Investment and Investment Income:+ Global economic growth was at 5.4 per cent during 2006 (4.9 per cent in 2005). Economic growth in the US, Euro area, Japan, China, India and other emerging economies maintained growth momentum. During 2006-07 (April- March), short-term interest rates increased further as many central banks continued monetary tightening to contain inflation and stabilise inflationary expectations. Demand-pull inflation is expected to gain momentum in the coming months. Indicators like credit offtake, industrial production and capital good imports clearly indicate increasing demand and capacity. Sharp rise in capex investments to sustain the capacity expansion signals further momentum. Robust growth in capital goods index and imports indicate buoyant investment activities. According to a Goldman Sachs Report, Indias growth acceleration since 2003 represents a structural increase rather than simply a cyclical upturn. Productivity growth explains nearly half of overall growth. They project Indias potential or sustainable growth rate at about 8% until 2020. Indias contribution to world growth will be even greater. Resources raised through the public issues increased by 20.2 per cent to Rs.32,382 crore during 2006-07. The average size of issues increased to Rs.272 crore from Rs.195 crore during the corresponding period of the previous year. All issues, except one, during 2006-07 were by non- Government public limited companies (private sector) and mostly by non- financial companies. Out of 119 issues during the year, 75 issues were initial public offerings (IPOs) constituting 85.0 per cent of total resource mobilisation. Indian retailing, real estate and construction activity are booming. Business confidence is extremely high, as reflected in aggressive capex plans and offshore acquisitions. Indias forex reserves as on 31st Mar07 stood at $199.22 bn.(P. Yr.- $151.62 bn). The BSE Sensex reached an intra- year low of 8929 as on June 14, 2006, a decline of 29.2 per cent over the then all-time high of 12612 reached on May 10, 2006. The stock markets recouped these losses in the subsequent months and the BSE Sensex reached an all-time high of 14652 on February 8, 2007. The markets, however, witnessed some correction thereafter. The BSE Sensex closed at 13072 on March 30, 2007. The BSE Sensex, thus, increased by 15.9 per cent during 2006-07 (year-on-year) as compared with a gain of 73.7 per cent during 200506. But with signs of domestic overheating and tightening liquidity conditions, the good news seems to be fully reflected in the high market valuations. Capital flows during 2006-07 were substantially higher than a year ago, led by foreign direct investment (FDI) flows, on the back of strong growth prospects and buoyant investment demand. FDI inflows at US $ 16.4 billion during April-January 2006-07 were substantially higher than the inflows in the corresponding period of the previous year. FDI was channelled mainly into financial services, manufacturing, banking services, information technology services and construction. Mauritius, the US and United Kingdom remain the dominant sources of FDI to India. Outward direct investment from India also exhibited a significant rise to US $8.7 billion during April- December 2006 from US $1.9 billion a year ago due to some large overseas acquisitions by Indian corporates. For your Company, all this meant a lot of activity in the Investment Operations. Income from Interest & Dividend during the year was Rs 526.78 crores as against Rs.455.46 crores in the previous year. Taking advantage of the equity market boom, your company was able to make a profit of Rs.589.04 crores from sale of equity during the year (Rs.640.71 crores in FY 2005-06). In order to ensure that the Book Value of the equity portfolio of the company was also kept intact, your company did some value buying of undervalued equity stocks. As a result, the book value of the equity portfolio went up to Rs.1244.31 Crores as on 31st March,2007 from Rs. 1066.14 crores as on 31 st March2006 and the Market Value was Rs.7077.28 crores. The investments in Mutual Fund portfolio, yielded a profit of Rs.9.91 crores during the year (previous year Rs.12.83 crores) in addition to the regular dividend income. The combined effect of the Secondary market operations (both debt and equity) resulted in profit on sale of investments of Rs.600.10 crores. The yield on mean funds was 9.24% during the year against 9.02% in the previous year (without considering the profit/loss on sale/redemption of investments). However, if we take into account the profit/loss on sale/redemption of investments the yield was 19.76 % against 21.99% during the previous year. The market value of total investments of your company (including term loans) stood at Rs.11,982 crores as on 31St March2007 against Rs.11,960 crores in the previous year. The cost based book value of our total investment portfolio (including term loans) has gone up from Rs.5253.74 crores in 2005-06 to Rs.6149.22 crores in 2006-07. This apart, your company also restructured term loans/debentures/Preference Capital of 22 companies under CDR/BIFR approved schemes. Besides, One Time Settlement (OTS) was done for 14 companies. During the year 2006-07, your company continued the exercise of pruning of equity portfolio with a view to rationalize its portfolio and reduce non- dividend paying portfolio. As a result of which, company exited from 34 companies including 19 non dividend paying companies. Further, the Company has embarked on an exercise to rationalize the equity portfolio by pruning the unlisted/unquoted equity shares. Having its headquarters at New Delhi, the Company had spread its WINGS manifold by establishing 23 Regional Offices, 322 Divisional Offices, 546 Branch Offices and 61 Extension counters across the length & breadth of our country. All our offices are computerized. These infrastructure facilities coupled with 16000+ Workforce and about 35000 Direct Agents are the real strength of the Company. I am privileged to inform all concerned that the company could retain its position as 2d Largest Non Life Insurance Company in India. During 2006-07, the Gross Direct Premium (Indian Operations) increased from Rs.3527.11 Crs. to Rs. 3928.52 Crs. registering a Growth rate of 11.39%. Though 11.39% Growth rate is below our projected Growth rate of 17.63%, our growth rate was the highest amongst the 4 PSUs in the field. The Company has also generated highest accretion in Premium amongst the 4 PSUs in Non- life sector. I congratulate all the employees of the Company and more particularly its operating Heads and Marketing Personnel including the Agents for this achievement. Market dynamics have changed. It has brought in various NEW ELEMENTS w.e.f. 01st January, 2007. Pricing Mechanism, Redesigning and Re-packaging of Insurance products and Various kinds of Add-on benefits /facilities, wherever possible have become the Driving Force for selling insurance products. Continuity and Customer services have gone to the backbench at the time of negotiation of business. We are also re-engineering our Business-Models and endeavouring constantly to change the MINDSET of our employees for granting best possible covers with least possible prices without diluting the overall concept of Profitability. We are fully committed and determined so as to ensure that Business Development and Profitability go side by side. Distribution Channel: Traditional way of business development does not hold good any longer. Business no longer can be generated only through the Development Officers. Entry of Private Players in the Non-life sector had given us unique opportunities to revamp / restructure companys Distribution Channels to suit the changing situations. Company now has FIVE distinct channels of Marketing such as Direct Channel of BMs/DMs, AO(Ds)/AM(Ds), Development Officers (Mktg.), Brokers and Direct Agents. Each channel has specific role to play. Each channel is given a specific business target. Over a period of time, we could develop SYSTEMS for knowledge updation through Periodical Training, development of salesmanship skill and problem solving of entire marketing force. Special programmes are being organized for High Performing Marketers so as to keep them highly motivated and energized. Commission Paid to Different Channels (Indian Business): (Rs. in crores) Year Agents Brokers Corporate Referral 2005-06 203 43 11 2 2006-07 221 41 13 3 Market Segmentation: We have done systematic Market segmentation. Corporate clients and Project Insurances Cells, SME SECTOR, Bancassurance Cell, Mega Tie-ups, Retail Business (Personal Lines Insurance), Rural Insurance and Micro Insurance Deptt. have since been opened and are under the charge of Senior Officers reporting to GM (Marketing). Rural Insurance - Social Social Sector Insurance: Rural Insurance and social sector insurance always got special attention. During 2006-07, Company procured Rs.183.55 Crores Premium from Rural Sector as defined by IRDA. Company had covered 60,13,667 lives under Social Sector Insurance during the year. Company had taken up specific targets for spreading insurance benefits to lacs of women living in villages by selling products like Raj Rajeshwari Mahila Kalyan Bima Yojna Policy, Universal Health Insurance Policy, Gramin and Janta Personal Accident insurance policy and Bhagyashri Insurance policy. We are committed to serve Rural India and its people and thereby would like to involve ourselves in Bharat Nirman Activities. For the financial year 2007-08, company has fixed a premium target of Rs.200 Crs. from Rural Insurance products. We shall be going in a big way organizing Village Melas, Gram Sabhas and Road shows for popularizing our products amongst the villagers. 2006-07 2005-06 1. Total Gross Premium Underwritten (Rs. in lacs) 392852 352711 2. Policies u/w in rural areas (in Nos.) 1075304 1040959 3. Gross Premium a/w in rural areas (Rs. in lacs) 18355 17068 4. % of Rural Business (4)/(2) 4.67 4.84 5. Whether Rural Sector Stipulation met(Yes/No) Yes Yes 6. No. of lives covered in Social Sector 6013667 5594197 7. Whether Social Sector stipulation met (Yes/No) Yes Yes Business Review Meetings: We have been systematically conducting Business Review Meetings in all the Regions. During the Review Meeting, business development, improvement in profitability and customer care always dominate the deliberations. We also advise the operating incharges to go on aggressively recruiting the Direct Agents and enlisting Micro Insurance Agents so that we expand companys reach for spreading the benefits of Insurance to the millions of our countrymen living in villages and semiurban areas. Workshop/Insurance Seminars: We are grateful to all our Customers and well-wishers. We care for them. All the Branch Heads, Divisional Heads & Regional Heads have been advised to organize Insurance Workshops/ Seminars atleast on Half Yearly basis. This will be implemented in a structured manner from the Current Fiscal. Head Office Customer Relationship Management Department will monitor the matter. Customer Services: Company has made it abundantly clear to all the employees and more particularly the operating incharges including the Regional Heads, that the ONLY MANTRA for augmenting our business is Customer Satisfaction. We are constantly educating our workforce and other intermediaries to have empathy for the customers byway of listening to their problems so as to hammer out the irritating issues or atleast minimize the differences and make customer believe that our company cares for them. During the year 99,24,462 documents were generated and 5,55,302 claims were settled by our Operating Offices through out the country. Companys Non-suit claims clearance ratio has increased to 86.82% during 2006-07 and we had fixed a TARGET of 95% Claim Settlement Ratio during 2007-08. We are determined to achieve the same. Our Overall Claim Settlement position during 200607 was as under: No. of claims outstanding at 01.04.2006 306594 No. of claims intimated during 2006/07 557861 No. of claims settled during 2006/07 555302 No. of claims outstanding as at 31.03.2007 309153 Claims Settlement Ratio 64.24% Statement of Age-wise Analysis of pending claims as on 31.03.2007: Pending for Suit Non-suit Total claims claims Less than 3 Months 20099 35340 55439 3 to 6 months 20678 16076 36754 6 to 12 months 33706 14773 48479 1 to 3 years 64530 4130(**) 68660 More than 3 years 99161 660(**) 99821 Total 238174 70979 309153 (**) 99 % of these claims cleared by 30.6.2007. Performance of Popular Rural Insurance Schemes: Name of Policy A B C Financial Year 2006-07: Janta personal Policy 535828 4083558 2637.88 Gramin Personal Policy 21323 366319 54.94 Raj Rajeshwari 32406 462813 70.35 Bhagyashree 13768 24564 16.37 Cattle 161401 865251 3690.82 Agri-Pumpset 21963 41625 168.18 Kisan Credit Card 18958 1427236 259.24 UHIS 75186 147096 686.94 Rural Insurance 366119 1318936 6412.38 Financial Year 2005-06: Janta personal Policy 295967 4194974 1259.74 Gramin Personal Policy 31474 255311 21.44 Raj Rajeshwari 10979 205791 77.74 Bhagyashree 7012 31430 17.86 Cattle 126647 397508 3258.88 Agri-Pumpset 6779 26020 241.35 Kisan Credit Card 26310 1253026 367.18 UHIS 36484 142586 298.93 Rural Insurance 117268 777498 5061.87 Financial Year 2004-05: Janta personal Policy 818924 2825249 1092.51 Gramin Personal Policy 71800 214943 43.22 Raj Rajeshwari 9726 283052 76.63 Bhagyashree 69259 79331 14.52 Cattle 224503 630876 2971.75 Agri-Pumpset 24944 39935 243.58 Kisan Credit Card 9896 1874253 338.63 UHIS 40865 107858 265.52 Rural Insurance 175882 893462 5219.09 Financial Year 2003-04: Janta personal Policy 84983 2419482 1444.37 Gramin Personal Policy 4207 578453 72.95 Raj Rajeshwari 8237 542809 201.72 Bhagyashree 17777 198772 43.15 Cattle 110864 1245148 2339.45 Agri-Pumpset 62195 81480 209.64 Kisan Credit Card 33549 1919389 491.45 UHIS 74079 298796 468.20 Rural Insurance 598944 1739161 6423.85 Financial Year 2002-03: Janta personal Policy 84893 254680 573.03 Gramin Personal Policy 72308 578461 48.84 Raj Rajeshwari 74761 735965 132.69 Bhagyashree 8537 33953 21.02 Cattle 276987 1107946 2938.85 Agri-Pumpset 49292 98583 220.94 Kisan Credit Card 1155989 1155989 270.45 UHIS 0 0 0 Rural Insurance 767797 2303390 4606.78 Name of Policy D E F Financial Year 2006-07: Janta personal Policy 5616 3201 3048 Gramin Personal Policy 3 21 24 Raj Rajeshwari 11 75 75 Bhagyashree 20 24 42 Cattle 4906 19352 19458 Agri-Pumpset 1192 632 1482 Kisan Credit Card 195 508 465 UHIS 0 2356 2215 Rural Insurance 27078 13290 33113 Financial Year 2005-06: Janta personal Policy 3366 5639 3389 Gramin Personal Policy 3 148 148 Raj Rajeshwari 11 94 94 Bhagyashree 19 8 7 Cattle 6079 19899 21072 Agri-Pumpset 997 913 718 Kisan Credit Card 47 393 245 UHIS 394 1570 1964 Rural Insurance 26733 5713 5368 Financial Year 2004-05: Janta personal Policy 1650 5369 3653 Gramin Personal Policy 3 99 99 Raj Rajeshwari 11 349 349 Bhagyashree 25 2 8 Cattle 6920 17525 18366 Agri-Pumpset 983 7713 7699 Kisan Credit Card 29 1319 1301 UHIS 234 2493 2333 Rural Insurance 27378 3149 3794 Financial Year 2003-04: Janta personal Policy 1207 2658 2215 Gramin Personal Policy 1 386 384 Raj Rajeshwari 11 288 288 Bhagyashree 22 17 14 Cattle 10531 3835 41946 Agri-Pumpset 1007 1176 1200 Kisan Credit Card 22 145 138 UHIS 0 552 318 Rural Insurance 54409 437810 464841 Financial Year 2002-03: Janta personal Policy 0 7240 6033 Gramin Personal Policy 1 1200 1200 Raj Rajeshwari 7 245 241 Bhagyashree 16 10 4 Cattle 9648 77297 76414 Agri-Pumpset 946 1566 1505 Kisan Credit Card 0 133 111 UHIS 0 0 0 Rural Insurance 55479 413582 414652 Name of Policy G H I Financial Year 2006-07: Janta personal Policy 5769 1817.61 69 Gramin Personal Policy 0 -1.18 -2 Raj Rajeshwari 11 -3.96 -6 Bhagyashree 2 2.04 12 Cattle 4800 2689.98 73 Agri-Pumpset 342 -221.55 -132 Kisan Credit Card 238 196.44 76 UHIS 141 106.63 15.52 Rural Insurance 7255 1513.28 24 Financial Year 2005-06: Janta personal Policy 5616 885.74 70 Gramin Personal Policy 3 7.43 35 Raj Rajeshwari 11 14.19 18 Bhagyashree 20 1.77 10 Cattle 4906 2400.47 74 Agri-Pumpset 1192 30.80 13 Kisan Credit Card 195 257.68 70 UHIS 0 135.37 45 Rural Insurance 27078 1122.47 22 Financial Year 2004-05: Janta personal Policy 3366 1127.12 103 Gramin Personal Policy 3 70.95 164 Raj Rajeshwari 11 70.95 93 Bhagyashree 19 -0.26 -2 Cattle 6079 2523.54 85 Agri-Pumpset 997 5.62 2 Kisan Credit Card 47 187.37 55 UHIS 394 109.85 41 Rural Insurance 26733 942.03 18 Financial Year 2003-04: Janta personal Policy 1650 1107.40 77 Gramin Personal Policy 3 32.20 44 Raj Rajeshwari 11 60.08 30 Bhagyashree 25 3.32 8 Cattle 6920 2555.70 109 Agri-Pumpset 983 9.73 5 Kisan Credit Card 29 69.36 14 UHIS 234 14.26 3 Rural Insurance 27378 983.40 15 Financial Year 2002-03: Janta personal Policy 1207 824.19 144 Gramin Personal Policy 1 68.47 140 Raj Rajeshwari 11 60.60 46 Bhagyashree 22 1.00 5 Cattle 10531 3020.45 103 Agri-Pumpset 1007 23.34 11 Kisan Credit Card 22 16.00 6 UHIS 0 0 0 Rural Insurance 54409 928.98 20 A = No. of Policies B = Number Covered C = Premium (Rs. Lacs) D = No. of Claims O/S at Beg E = No. of Claims reported F = No. of Claims settled G = No. of Claims O/S at the end H = Incurred Claims (in Lacs) I = Claims Ration % Personnel: The total strength of employees as at 31st March 2007 with cadre-wise & other break up details are as under: CLASS TOTAL FEMALE SC/ST PHYSICALLY EMPLOYEES EMPLOYEES EMPLOYEES HANDICAPPED I 4173 630 1118 23 II 2048 33 340 1 III 7368 1865 2211 139 IV 2363 557 1202 76 TOTAL 15952 3085 4871 239 Promotion exercise for Class I Officers for the year 2006-2007 was held in September, 2006. Total of 199 Officers were promoted to the higher cadre as per details stated below Scale I to Scale II 114 Scale II to Scale III 50 Scale III to Scale IV 25 Scale IV to Scale V 10 TOTAL 199 Group Savings Linked Insurance (GSLI) Scheme: Company has arranged Group Savings Linked Insurance Scheme ( GSLI ) from LIC for welfare of employees to provide risk coverage and savings as well. The Policy is effective from 20.11.1988 and entire premium ( risk plus savings part ) net of group discount is borne by the employee. During the year, major part of the exercise relating to computerisation of the Group Savings Linked Insurance Scheme (GSLI) data was completed. The computerized- data is now available on our website also. This is expected to result in speedy settlement of GSLI claims, better management of Scheme and proper reconciliation of GSLI premium paid to LIC on monthly basis. Pension Payment by ECS: During the year efforts have been made to get the ECS facility for Pension payment and LIC has agreed to provide ECS facility at 19 centres covering about 70% of Pensioners. It is likely to commence from November, 2007. Promotion Exercise for Class-I Officers 2007-08: In terms of provisions of the modified Promotion Policy for Officers (titled Promotion Policy for Officers 2006) notified & adopted by the company, all officers included in the zone of consideration for promotion from Scale-I to Scale-IV cadre shall be required to qualify a written test to be conducted by professional examining body, before being included in further process for consideration of promotion. The written test is scheduled to be held at 4 MetroCentre/s covering officers posted in the respective TAC Zones and is to be coordinated by the respective flag Company. In this regard the zone of consideration for promotion for various cadres is put on Companys Website and also mailed to all Regional Offices. A list of officers eligible for undergoing pre- promotion training (for SC/ST) is also sent to all the Regional Offices so that eligible officers are deputed for pre-promotion training. Transfer and Mobility Policy (TMP): For optimum utilization of Human Resources and keep the Management Expenses cost at minimum possible levels, TMP exercise will be taken up along with postings on promotion in 4th week of July, 2007. Human Resource Development (HR & Training): HR is most important resource of our Company. In todays fast changing environment, we are required to have highly motivated employees for appropriate interface with well informed and demanding customer of today. We have taken a few initiatives in this direction. Training has become one of the focus areas. During forthcoming financial year (2007-08) all RTCs will be made fully functional. Programmes and course content have been tailor made to face present challenges. During the year 2006-07 following programmes were conducted by OSTC and RTCs: LOCATION NUMBER OF TOTAL PROGRAMMES PARTICIPATION Oriental Staff Training College 81 1669 Regional Training Centres 18 507 GRAND TOTAL 99 2176 Proposed Training and Other Activities at OSTC for 2007-08: a) In-House Training Programmes: For the year 2007-08 OSTC will conduct approximately 80 number of training programmes on Technical, Behavioural, Information Technology/ INLIAS and other related subjects. b) Mobile Training Programmes (MTP): OSTC will conduct Mobile Training Programmes (MTP)/Workshops at selected ROs/RTCs on the subjects of Management of Motor Third Party Claims, Management of Health Insurance, Underwriting and other need based subjects for Class I Officers. Mobile Training Progrmmes (MTP) will be conducted for two or three days, on a particular subject, in collaboration with RO and HO Technical experts. The participants will be provided up-dated study material on the subject concerned and one or two subjects will be taken at a time for the programme. c) Workshops: To conduct workshops on special technical or management subjects for selected group of people at different locations. These workshops can be for Aviation Hull, Marine Hull, Petrochemical or Power plants and at a place where the subject matter of insurance can be accessed, surveyed, understood and assessed. For management subjects, we can have these workshops at such places where we can have activity based training programmes. d) Seminar: The image and expertise of an institution gets a boost by conducting seminars on a regular basis on a variety of subjects. OSTC will organize one seminar at national level on: IMPACT OF DETARIFFING ON THE MARKET AND INSURANCE COMPANIES BOTTOMLINE e) Welfare of SC/ST Employees: As stipulated by the Govt. of India we have SC/ST Cell at Head Office and all our Regional Offices. SC/ST cell at Head Office is headed by Chief Liaison Officer to ensure proper implementation of Reservation Policy in our Company. The Cell looks after the grievances of SC/ST employees for speedy redressal. In addition to this we have various Welfare Schemes for SC/ST employees and their children through Dr. Ambedkar Welfare Trust of GIC. The class wise SC/ST representation is given below: Class SC ST Total Class-I 918 200 4173 Class-11 271 69 2048 Class-III 1665 546 7368 Class-IV 1027 175 2363 TOTAL 3881 990 15952 The SC/ST cell keeps in touch with the National Commission for Scheduled Castes, National Commission for Scheduled Tribes and the Parliamentary Committee on the Welfare of SC/ST for policy decision on SC/ST matters. During the year 2006-2007 total 733 officers have attended training at NIA, out of which there were 118 SC and 12 ST Officers. At OSTC, Faridabad total 1639 officers attended the training programmes out of which 321 SC & 78 ST officers have been trained. During the year we also conducted Educational Training Programme on Personality Development, Stress Management, Behavioral Science, Motivation and Time Management through Dr. Ambedkar Welfare Trust of GIC for the benefit of SC/ST/OBC employees at Guwahati, Mahabalipuram, Ujjain and Manali. Total 167 employees and officers were trained through Dr. Ambedkare Welfare Trust of GIC which comprised of 94 SC, 45 ST & 28 OBC category officers/employees. Estate & Establishment Matters of the Company: Consolidating the foundation laid down last year, we continued the modernization of our Office premises. During the year under review, the cost of space has increased skyrocketing. As such, we have also included in the network selected Branch Offices in the interior renovation programme. Before the end of March, 2008, we will ensure that the recently opened Regional Offices viz. Coimbatore and Nagpur are properly housed in their premises. A massive exercise of updating the lease of our office premises is underway which has gained more importance in view of I.T. connectivity of operational offices through INLIAS. At a few centers, the hotel tariff has become beyond the reach of our officers who have to undertake tours as a part of their official assignments. Therefore, through 2007-08, our endeavourwill be completion of the interior of the existing Transit Houses / Guest Houses wherever required. We will also acquire Transit House premises at Regional Centres where they are not available at present. Real Estate revenue generation from next year will be a benchmark for efficiency and contribution of officials working in this Dept. to the Company. Like operational Managers, it will be quantified. Highlights of 2006-07: Detariffing: The year 2006-07 was a watershed year for General Insurance Industry in India. The tariffs were abolished for Fire, Engineering, Motor and WC class of business. We had made adequate preparations for facing the detariffed scenario by providing training to our Underwriters and by devising internal tariffs. As expected, market reacted by offering heavy discounts, particularly in the Fire and Engineering segments. In some cases the quotes were on unsustainable rates. We did not blindly join the bandwagon. We followed the underwriting practice as decided in the Underwriting Policy of the Company and remained competitive. At the same time we did not go for wanton rate reductions. The results of the last quarter of 2006-07 are ample testimony of the prudent course adopted by us. Some corrective measures were taken by IRDA by way of capping the maximum discount. However the sense of moderation and maturity is already being seen in the market and this should soon translate into underwriting prudence, hopefully. We expect the Indian market to mature much faster than what was seen in the other markets where detariffing took place. Besides adding a few new clients, Company could bag most of its renewals. A Techno Marketing cell has been established at Head Office to assist our operational offices for the development of Mega size business. The results since the establishment of this cell are quite encouraging. Health Insurance: In order to develop Health Insurance business in right earnest and to monitor the working of this fastest growing segment of business, Company separated Health Business from Miscellaneous Department and created a separate team headed by a DGM so that this segments gets its due and undivided attention. Company also rationalized the premium under Mediclaim Policies for different age brackets. Some policy terms were also modified. These steps were necessary to ensure that losses are curbed, people get efficient service and the vast untapped potential in this class of business is exploited. Third Party Administrators (TPA) being key players in the management of the health portfolio, an exercise is already in the final stages for fresh empanelment of TPAs after a review of their performance. This will ensure better servicing and profitable management of the portfolio. For prudent management underwriting of group policies has been centralized at HO for better underwriting control. A pilot centralized underwriting office at Mumbai is in the offing and based on its success, similar exercise will be initiated in more areas. Our team is in the process of developing new products which will be launched in the current financial year. Marine Hull and Aviation: Oriental continued to retain the top spot in these segments. All the existing accounts were retained. Some new clients were also added. Consolidation in the Aviation Industry in India will help us in getting additional Premium. Miscellaneous Department: We plan to focus on liability portfolio which is a sunrise sector. Apart from underwriting traditional liability policies like Public Liability and Professional Indemnity, we are concentrating on newer products like Director and Officers Liability Policy (D&O), Public Offering of Securities Insurance (POSI) and Product Liability including product recall. During the year 2006-07 we have also introduced two new products namely 1) Art Insurance and 2) Kidnap and Ransom Insurance. Reinsurance: Adequate reinsurance protection is vital for the financial health of the company. The Reinsurance Programme for the year 2006-07 was placed smoothly with good securities. By improving the quality of information, we could get very competitive price for our XL protection. Company increased NonMarine Cat XL cover keeping in view the losses caused due to Mumbai floods. Reinsurance arrangement has assumed added importance following detariffing and reduction of compulsory cessions. The Reinsurance Programme of the company for the year 2007-08 has been designed keeping in view these factors. We have provided more automatic capacity to our operational offices to enable them to face the fierce competition. Company was more active in procuring Facultative Inward Reinsurance business following its rating by A.M. Best. Foreign Operations: The business performance of Foreign Offices for the year 2006-07 was not on expected lines. While Dubai Office notched up a good growth Kuwait and Nepal did not do so well. The volatile political situation in Nepal and consequent break down of law and order affected normal operations in Nepal .The frequent bandhs, blockages and strikes took its toll on business results. It is expected that things will improve now as political settlement has been reached. The heartening feature was that Foreign Operations altogether gave a profit of 19.06 crores which speaks for itself regarding their underwriting acumen. Foreign Operations: Given below is country-wise performance on our foreign operations: (Rupees in Lakhs) NEPAL DUBAI KUWAIT Particulars Amount % Amount % Amount % 1. Gross Direct 1446.10 3363.98 4415.68 Prem. 2. Premium (Net) 1150.03 3310.24 4216.75 3. Commission (Net) 97.60 8.49 992.54 29.98 1266.64 30.04 4. Incurred Claim 501.65 43.62 1208.82 36.52 1949.78 46.24 (Net) 5. Reserve Strain -48.70 -4.23 173.09 5.23 89.59 2.12 6. Management 245.29 21.33 186.83 5.64 208.07 4.93 Expenses 7. Under-writing 354.19 30.80 748.96 22.63 702.67 16.66 Surplus(+)/Deficit(-) 8. Exchange Gain(+)/ -23.73 -2.06 -98.33 -2.97 -62.06 -1.47 Loss(-) 9. Interest & Other 180.95 15.73 74.28 2.24 80.14 1.90 Income 10. Net Surplus(+)/ 511.41 44.47 724.91 21.90 720.75 17.09 Deficit(-) (Rupees in Lakhs) Others TOTAL (Run Off) Particulars Amt.% Amount % 1. Gross Direct 0 9225.76 Prem. 2. Premium (Net) 0 8677.02 3. Commission (Net) 0 2356.78 27.16 4. Incurred Claim 35.90 3696.15 42.60 (Net) 5. Reserve Strain 0 213.98 2.47 6. Management 14.27 654.46 7.54 Expenses 7. Under-writing -50.17 1755.65 20.23 Surplus(+)/Deficit(-) 8. Exchange Gain(+)/ -2.33 -186.45 -2.15 Loss(-) 9. Interest & Other 1.34 336.71 3.88 Income 10. Net Surplus(+)/ -51.16 1905.91 21.97 Deficit(-) Analysis of Performance -Gross Direct Premium: The premium under the Engineering, Health, Marine Hull, Liability, Personal Accident and other Misc. section besides Motor OD and TP registered a good growth during the financial year 2006/07. The growth rate in these portfolio was 12.2%, 24.7%, 16%, 14.8%, 19.3% and 11.2%. The premium under Fire Department went down from 561.25 crs to 556.75 crs hereby resulting in negative growth of 0.8%. The reasons for negative growth under Fire segment is mainly the effect of detariffing in the last quarter of the financial year. Marine Cargo premium was rather static as it increased by 0.51% only. However Marine Hull continued to show robust growth as premium increased by 11.6%. We could mobilize a number of new account under the Marine Hull Portfolio. The heartening feature was that despite detariffing the Engineering premium increased by 12.18%. The liability portfolio also showed a good growth of 14.83%. This segment is picking up because of increase in awareness amongst the insured as also due to the applicability of corporate governance norms for the Companies. The growth under the Health portfolio was 24.67%. These figures are remarkable. Oriental was the only companywhich changed the policy terms, conditions and rates of its Mediclaim Insurance during the financial year 2006/07. It can be safely concluded that most of insured have continued their cover with our Company despite steep increase in the rates. Personal Accident: The growth under Personal Accident segment was 19.34% however we are fully aware that there are lot of possibilities of achieving better results in this area because of increasing awareness and steady increase in the income level of middle class. The Companys overall growth was 11.4% during 2006/07 Growth rate was modest but keeping in view the fact that the business environment has become very competitive and the Company did not go over board in procuring business, this growth is quite satisfactory. Analysis of Performance - Gross Incurred Claim: There has been reduction of 0.66% in the overall net incurred claim ratio during 2006/07 as compared to 2005/06. However the Health segment remains an area of concern despite increasing the premium under Mediclaim policy. We are reviewing the claim experience of all the group policies and shall invite renewal only when the experience is satisfactory. The net Incurred claim ratio in Health Insurance increased from 118% to 119.40%. There has been reduction in the outgo on claims under Fire, Marine Cargo and Marine Hull segment mainly because last year the figures included the claims paid on account of Mumbai Floods. Finance and Accounts: During 2006-07, we have declared a Profit before Tax (PBT) of Rs. 629.64 crores against a PBT of Rs. 334.19 crores in 2005-06. The Profit after Tax (PAT) was Rs. 497.27 crores, against Rs. 283.91 crores during 2005-06. Our Reserves and Surplus continued to grow and stood at Rs. 1943.34 crores as on 31St March 2007 as against Rs. 1545.52 crores as on 31St March 2006 recording a 25.74% increase. The Operating Results of the Company under the Fire, Marine, and Miscellaneous revenue accounts (as per IRDA Regulations) are detailed below: Rs. in crores Year Fire Marine Miscell- Total aneous Amount 2001-02 125.29 94.30 -476.32 -256.73 2002-03 175.68 27.94 -96.90 106.72 2003-04 161.63 59.64 76.29 297.56 2004-05 125.84 25.69 61.85 213.38 2005-06 51.61 17.53 75.24 144.38 2006-07 144.98 -15.58 168.93 298.33 The improvement in results for the year has been mainly due to a well conceived and sustained strategy implemented by the company during 200607. In order to ensure a better deal for both policy holders and share holders as a part of strategy , we continued to optimize the investment income of the company. Our Solvency Ratio has been steadily increasing over the years and as compared to 1.01 in 2001-02, it stood 2.17 in 2006-07. Year Solvency Ratio 2001-02 1.01 2002-03 1.14 2003-04 1.37 2004-05 1.46 2005-06 1.97 2006-07 2.17 The Accounts for the year 2006-07 were adopted by the Board on 28.06.2007 The adoption dates for the last 5 years are as under: Year Days after year closing 2001-02 156 2002-03 152 2003-04 115 2004-05 88 2005-06 78 2006-07 89 Budget & Corporate Strategy: The Management Expenses Ratio (Expenses of Management as a % of Gross Direct Premium income) of the Company showed improvement from 23.57% in 2005-06 to 18.76% in 2006-07. Year Growth Rate of % age of Expenses Gross Direct Premium to Premium 2001-02 11.19% 24.37% 2002-03 14.79% 22.75% 2003-04 1.10% 26.97% 2004-05 6.58% 23.62% 2005-06 16.80% 23.56% 2006-07 11.39% 18.76% The annual exercise of the Performance Appraisal of the Company during 2005-06 was carried out with a focus on not only the viability of the operating offices of the company but also on the standing of the company amongst its competitors - both in the public and private sector. Efforts were continued to present the profitability of the Regions in a more realistic manner enabling the Regional Heads to decide future course of action. The exhaustive analysis, as in previous years, touched upon the various operational parameters. The Company appointed AM Best, an international rating agency for insurance companies to rate its performance. Detailed analysis of the Companys operations was carried out by the Department to provide the necessary inputs required for the rating process of AM Best. Internal audit: The Internal Audit Department (IAD) at Head Office with the help of the feedback made available by its 19 Cells functioning at Regional Centers has been able to effectively provide information to the Management on the functioning of its operating offices. In 2006-07, IAD conducted Regular Audit of 7 Regional Offices, 140 Divisional Offices and 198 Branch Offices. IAD also conducted 72 Special Audits on varied subjects during the year. In addition, IAD at Head Office is conducting pre-audit of Pension/Family Pension payments for all retiring/ deceased employees. The Concurrent Audit of Investment Operations was also conducted during the year by outside agency. Previously, the entire record of our Internal Audit was on manual basis. During this financial year, IAD has put all the records of Internal Audit and CAG reports on computer and developed a software in MS Access to be used by IAD officials for generation of various reports. Earlier the records were counted based on number of Reports called CAR (Compliance of Audit Report) and FCAR (Further Compliance Action Report) after first reply from the Office. This system was not able to reflect the number of observations made in audit report and also how many observations have been attended /dropped after receipt of proper compliance to overcome this difficulty, IAD at Head Office has introduced a new system of counting based on number of observations and not based on count of files / reports. Internal Audit & Inspection Department has also been entrusted the job of carrying out Technical Audit of underwriting operations of the company once in every quarter after De-Tariff with effect from 1St January 2007. Corruption need not be the grease that oils the wheel of progress: The real achievement lies in advancement and progress by ethics and integrity. In our Organisation the emphasis continues to be on the preventive side of vigilance and with this in view we continue to review systems and procedures on regular basis keeping them in tune with the rapid changing scenario. We have been endeavouring to educate and impress upon our employees to view rules and regulations as one being of help in the growth and efficiency of the Organization rather than view them as an impediment to the Organizations development. The emphasis on preventive vigilance can be gauged from the fact that during our visits to all the Regional Offices during 2006-07 we have had detailed interactive sessions with all the incharges only on this aspect. In our organization the emphasis needs to be on UNDERWRITING of business proposals. If business proposals are evaluated and checked properly; on the one hand, the quality of services to our clientele will improve for definite and on the other the chances of complaints, grievances, audit queries and vigilance enquiries would lessen. Proper underwriting helps in correct appreciation of the risk and also ensures better post sale services in as much as losses, if and whenever they arise, are dealt with promptly and efficiently. Disputes and delays are basically caused due to inefficient and improper underwriting and are therefore the main cause of acrimony. Disputes cause inconvenience to the insuring public and also tarnishes the image and reputation of the Organisation. We can broadly categorize the critical elements that will help the Organization to speed forward in the right direction. The Incharges of Regions, Divisions and Branches should be amongst the best available talents; there should be proper appreciation and underwriting of risks, and in cases where claims arise the appointing of a competent and efficient surveyor or investigator who does his job with professional ethics are important factors in the efficient and proper working of an insurance organization. On the preventive aspect referred to earlier, we are reasonably satisfied on having been able to tackle the problems arising out of misuse of covernotes wherein risks were granted without proper inspection and in violation of the rules and regulations laid down. There have also been significant improvements in other areas prone to misuse earlier. While improving the systems in areas prone to misuse, we also ought to ensure the necessity of swift and deterrent action against those few who subvert systems for their own benefit to the detriment of the interest of the Organization. It is imperative that employees at all levels are sensitized to the changing environment and are made accountable for their performances. However, an important aspect that ought to be taken into consideration is the imperative need to make a distinction between genuine error of judgement and deliberate malafide action, otherwise decision making process can be paralysed to the Organisations peril. Our consistent effort and endeavor should be to always remain amongst the market leaders and work with integrity and honesty. We can then measure to our customers standard of satisfaction, efficiency and delight. ACCOUNTING RATIOS: (Rs. in lakhs) Particulars 2006-07 2005-06 Growth Growth CY % PY % 1. Gross Direct Premium: Fire 55676 56126 -0.80 10.68 Marine Cargo 17980 17888 0.51 31.66 Marine Hull 18370 15830 16.05 44.20 Motor OD 111972 101443 10.38 11.40 Motor TP 66544 52422 26.94 12.89 Engineering 21179 18879 12.18 20.49 Aviation 12245 15166 -19.26 38.44 Workmen Compensation 4047 3789 6.81 21.99 Personal Accident 11748 9844 19.34 12.63 Health 44896 36011 24.67 31.13 Liability 2647 2305 14.84 29.64 Other Miscellaneous 34774 31274 11.19 9.48 Gross Direct Premium 402078 360977 11.39 16.80 2. Gross Premium to ShareholdersFunds Ratio: Gorss Premium 402078 360977 Shareholders Fund (at the 154253 126116 beginning of the year) Ratio of GP to 260.66 286.23 Shareholders Fund (%) 3. Growth Rate of Shareholders Funds: At the end of the year 197729 154253 At the beginning of the year 154253 126116 Growth and Growth rate (%) 43476 28137 28.18 22.31 4. (i) Net Retention Ratio: 2006-07 2005-06 Premium Premium Retention Retention Net Net Ratio(%) Ratio(%) Fire 35172 33134 63.17 59.04 Marine Cargo 13225 13157 73.55 73.55 Marine Hull 2619 2753 14.26 17.39 Motor OD 90241 81908 80.59 80.74 Motor TP 52067 41476 78.24 79.12 Engineering 16562 13153 78.20 69.67 Aviation 1803 622 14.72 4.10 Workmen Compensation 3237 3091 79.99 81.58 Personal Accident 9028 7037 76.85 71.49 Health 35926 28817 80.02 80.02 Liability 1671 915 63.13 39.70 Other Miscellaneous 26522 23983 76.27 76.69 All Departments 288073 250046 71.65 69.27 5. Net Commission Ratio (%): 2006-07 2005-06 Net Net Net Net Comm. Comm. Comm. Comm. Ratio(%) Ratio(%) Fire -1314 -1032 -3.74 -3.11 Marine Cargo 1114 1177 8.42 8.95 Marine Hull -691 -472 -26.38 -17.14 Motor OD 3765 4030 4.17 4.92 Motor TP 1670 1626 3.21 3.92 Engineering -400 -277 -2.42 -2.11 Aviation -224 -630 -12.42 -101.29 Workmen Compensation 215 257 6.64 8.31 Personal Accident 679 454 7.52 6.45 Health 2577 2447 7.17 8.49 Liability 161 80 9.63 8.74 Other Miscellaneous 2410 2679 9.09 11.17 All Departments 9962 10339 3.46 4.13 6. Exp. of Mgnt to GDP Ratio: Expenses of Management 75423 85076 Gross Direct Premium 402078 360977 Ratio(%) 18.76 23.57 7. Combined Ratio: Gross Incurred Claims 322056 351460 Expenses of Mgmt 75423 85076 Total 397479 436536 Gross Direct Premium 402078 360977 Ratio (%) 98.86 120.93 8. Technical Reserves to Net Premium Ratio: Reserve for Unexpired 145296 126400 Risks Premium Deficiency 0 0 Reserve Reserve for O/S 328696 294900 Claims Total 473992 421300 Net Premium 287973 250046 Ratio (%) 164.60 168.49 2006-07 2005-06 2006-07 2005-06 U/W U/W U/W U/W Profit Profit Balance Balance Ratio(%) Ratio(%) 9. Underwriting Balance Ratio: Fire 8218 -2455 23.37 -7.41 Marine Cargo -4821 275 -36.45 2.09 Marine Hull -467 -2068 -17.83 -75.12 Motor OD 19657 10175 21.78 12.42 Motor TP -56076 -49837 -107.70 -120.16 Engineering -1002 4374 -6.05 33.25 Aviation -2679 -3176 -148.59 -510.61 Workmen Compensation 1722 654 53.20 21.16 Personal Accident -1126 -1635 -12.47 -23.23 Health -21183 -19608 -58.96 -68.04 Liability 22 -115 1.32 -12.57 Other Miscellaneous 6077 -2888 22.91 -12.04 TOTAL -51658 -66304 -17.93 -26.52 10. Operation Profit Ratio: Underwriting Profit -51658 -66302 Investment Income 114076 109717 Operating Profits 62418 43415 Net Premium 287973 250046 Ratio(%) 21.67 17.36 11. Liquid Assets to Liabilities Ratio: Liquid Assets* 153894 125430 Policyholders 473992 421300 Liabilities Ratio (%) 32.47 29.77 12. Net Earning Ratio: Profit after Tax 49727 28391 Net Premium 287973 250046 Ratio (%) 17.27 11.35 13. Return to Networth: Profit after Tax 49727 28391 Networth 202579 154253 Ratio (%) 24.55 18.41 14. Reinsurance Ratio: RI Premium ceded 124784 119084 Gross Premium 402078 360977 Ratio (%) 31.03 32.99 * Consist of Cash and Bank balances and Investment in Liquit Mutual Fund Schemes. Management Report on Financial Statements as per IRDA Regulations: 1. We confirm that the registration granted by IRDA has been renewed for the year 2006 2007 vide their Registration no. 556 dated 06.03.2007. 2. All dues payable to statutory authorities have been duly paid. 3. The shareholding pattern and all transfers of shares during 2006-07 are in accordance with statutory and regulatory requirements. 4. During 2006-07, the management has not directly or indirectly invested outside India, the funds of the holders of policies in India. 5. We confirm that the required solvency margin has been maintained. 6. We certify that the values of all assets stated in the Balance Sheet (except miscellaneous expenditure not written off) are in accordance with IRDA Regulations and in our belief do not exceed the realizable or market value. 7. The Company has been framing it reinsurance Programme to ensure adequate protection for its operations so that the Balance Sheet is not adversely affected due to large losses or Catastrophic events. Since the exposure of the company is spread over all across the country, we are exposed to weather perils and National Catastrophes. Company increased its Non Marine Catastrophe XL Cover to Rs.450 crores during 2006-07. Besides, it renewed Risk XL, Marine General XL, PA XL and Motor XL Cover however without changing the cover limit and deductible because these covers have been found adequate enough. Risk XL Cover limit also remains the same i.e. 150 crores in excess of 12 crores. Foreign Motor Portfolio in Dubai and Kuwait continues to be protected by a separate XL Cover. Reinsurance Programme of the Company was placed with good securities. Major portion of Mumbai Flood losses was recovered from Reinsurers during the year. Reinsurance Programme of the Company for the year 2007-2008 has been prepared keeping the detariffed scenario in mind. Company has increased automatic Capacity for Fire and Engineering Branch of Business. As retention has been increased in Fire and Engineering from 1St April 2007, we have increased our Risk XL cover to 250 crores XS 12 coress for 2007- 2008. Similarly Marine General Cover also has been increased to 60 crores XS 5 crores for 2007-2008. 8. Regarding Foreign operations, we have operations in Nepal only besides agencies in Kuwait & Dubai. Our overall foreign operations are very small when compared to the GDPI and hence we do not perceive any major exposure risk/country risk. 9. Aging of claims and trends in settlement of claims are given below: Age-wise analysis of Outstanding Claims for the last 3 years is given below: Details relating to trends in average claim settlement time have been worked out in the 265 offices which were live on INLIAS as on 31 March 2007. In this regard the trends which have emerged are shown below. Pending for Year No. of Amount claims (Rs. in Lacs) Less than 6 months 2004-05 55508 44151.86 2005-06 91044 88448.74 2006-07 90197 91392.35 Over 6 months 2004-05 263166 314652.60 2005-06 215550 330226.53 2006-07 218956 346990.24 Total 2004-05 318674 358804.46 2005-06 306594 418675.27 2006-07 309153 438382.59 A B C D E F Fire 308 days 11.56% 9.71% 16.32% 31.49% 30.92% Marine 179 days 21.76% 25.67% 21.80% 20.73% 10.03% Motor (OD) 133 days 28.73% 32.67% 17.04% 13.79% 7.77% Motor(TP) 1237 days 9.79% 2.61% 3.35% 8.27% 75.98% Engineering 311 days 14.32% 15.12% 16.20% 24.04% 30.33% Health 73 days 56.79% 18.00% 13.68% 8.28% 3.25% PA 181 days 34.19% 23.26% 17.35% 13.24% 11.96% Others Misc 364 days 16.22% 10.12% 9.61% 11.23% 52.82% Total 332 days 30.03% 21.95% 13.98% 12.40% 21.64% Cumulative 30.03% 51.98% 65.96% 78.36% 100.00% A = No. of days to settle claims (date of Intimation vs date of settlement) B = Claims settled within 30 days C = Claims settle within 31 days to 90 days D = Claims settle between 91 days to 180 days E = Claims settle between 181 to 365 days F = Claims settle after 1 year 10. The values of all investments including stock and shares have been arrived at in accordance with IRDA Regulations and the market value of actively traded Equity shares have been ascertained based on stock market prices on NSE/BSE. 11. A review of asset quality and performance of investment in terms of portfolios are given below: Fair Value Change Account is not considered in Equity/Mutual Funds. Portfolio A B C D Government Securities 2504.96 40.74 8.37 9.16 Bonds 54.56 0.89 9.37 9.75 Debentures 1127.45 18.33 7.94 7.86 Mutual Funds 101.28 1.65 4.97 0.63 Loans 259.35 4.22 14.24 12.48 Preference Shares 18.81 0.31 1.50 1.54 Equity Shares 1244.31 20.24 11.46 10.63 Money Market 828.94 13.48 9.99 9.65 Instruments Short Term Loans 9.53 0.15 0.00 Application Money for 0.00 debts/shares Total 6149.21 100.00 9.24 9.02 A = Investments Rs. in Crores B = % to total Investments C = Yield % FY 2006-07 D = Yield % FY 2005-06 12. The Directors Responsibility Statement has been furnished as part of Directors Report. M. Ramadoss R. Vaidyanathan S. Surenther Chairman-cum-Managing Director Company Secretary Financial Advisor K.C. Chakrabarthy J.S.S. Sastry S.K. Chanana B.K. Sarkar Directors Place: New Delhi Dated: 28th June, 2007