Shriram Life Insurance Shares

Annual Report Summary

The following is a detailed summary of the PDF document "Shriram Life Insurance Company Limited 18th Annual Report FY 2022-23".

I. Corporate Overview:

• Shriram Life Insurance Company Limited (SLIC), established in 2005, is part of the Shriram Group. The Shriram Group was established in 1974 and focuses on providing financial services to a broad population.
• SLIC commenced operations in 2006 with the aim of providing affordable life insurance solutions.
• Sanlam Group, a leading financial services group from South Africa, partners with Shriram Group in its insurance ventures. Sanlam holds an effective 62% of Santam's shares.
• The Registered Office is located at 5th Floor, Ramky Selenium, Plot No. 31 & 32, Financial District, Gachibowli, Hyderabad - 500032 and the IRDAI Regn No: 128.

II. Board of Directors and Key Personnel:

• The Board of Directors includes key individuals such as: Mr. Bibhu Prasad Kanungo (Chairman), Mr. Casparus Jacobus Hendrik Kromhout (Managing Director & CEO), Mr. Manoj Kumar Jain, and Mr. Karanam Ramachandra Sekhar as Managing Directors.
• Key Management Persons include: Mr. Casparus J.H Kromhout, Mr. Manoj Kumar Jain, Mr. Karanam Ramachandra Sekhar, Mr Johannes Gilliam Van Helsdingen, Mr Brahmaiah, Telaprolu, Ms. Samatha Kondapally, and Mr. Ajit Banerjee.
• Statutory Auditors are M/s GD Apte & Co., and M/s Bhaskara Rao & Co, Chartered Accountants.
• The company has re-appointed M/s D V Rao & Associates, Practicing Company Secretaries, Hyderabad as its Secretarial Auditors to conduct the secretarial audit of the Company for the FY 2023–24.

III. Financial and Operational Review (FY 2022-23):

• The company's financial results for FY 2022-23 were summarized, with a comparison to FY 2021-22.
• The number of new policies increased from 273,058 to 290,156.
• Premium income increased from Rs. 2,350 Crores to Rs. 2,546 Crores.
• Sum Assured in force increased from Rs. 128,302 Crores to Rs. 133,838 Crores.
• Funds under Management increased from Rs. 7,683 Crores to Rs. 9,012 Crores.
• The expense ratio increased from 27.3 to 28.6.
• Profit Before Tax significantly increased from Rs. 13.0 Crores to Rs. 163.3 Crores.
• Profit After Tax increased substantially from Rs. 2.54 Crores to Rs. 156.0 Crores.
• Cumulative Profits increased from Rs. 504.9 Crores to Rs. 607.1 Crores.
• Share Capital increased from Rs. 177.65 Crores to Rs. 177.84 Crores.
• The company has a branch network of 423 branches. The number of insurance agents decreased from 3,784 to 3,327.
• Interim dividend of Rs. 3.00 per equity share declared.
• The total dividend payout for FY 2022-23 will be Rs 107.63 crores.

IV. Business Performance and Rural/Social Sector Obligations:

• The domestic life insurance industry registered 18% growth, while Shriram Life saw a 17% growth in individual new business.
• The company's APE grew by 24%.
• The company met its rural and social sector obligations for the financial year.
• Rural Business: Achieved 45% versus prescribed requirement of 20%.
• Social Business: Insured 2,262,135 social lives versus prescribed 325,972 (5%) social lives.

V. Solvency and Share Capital:

• The company's solvency ratio was 210% as of March 31, 2023, exceeding the regulatory requirement of 150%.
• The paid-up equity share capital of the company stood at Rs. 179,37,50,000.
• Details pertaining to Employee Stock Option Scheme (ESOP) are provided in the notes to accounts.

VI. Insurance Agents and Products:

• The company has a branch network of 423.
• There were 3,327 active advisor force and POSPs of 124.
• The company has obtained approval from IRDAI for 160 products/riders, of which 45 are available for procuring new business.
• During the year, 7 products compliant with IRDA regulations were launched, and 4 products were withdrawn.
• No new riders were launched during FY 2022-23.

VII. Other Disclosures:

• The company has not made any application under the Insolvency and Bankruptcy Code, 2016.
• No loans were taken from banks or financial institutions, nor were any settlements done with them during FY 2023.
• The total policyholders' funds under management as on 31st March, 2023 are Rs. 8281.94 Crores.
• The company maintains an internal control system commensurate with the size, scale, and complexity of its operations.
• Investments of insurance companies are regulated under the IRDAI (Investment) Regulations, 2016 as amended from time to time.
• All the Directors have confirmed compliance with the ‘fit and proper' criteria prescribed under the Corporate Governance Guidelines issued by the IRDAI.

VIII. Directors and Remuneration Policy:

• Mrs. Akhila Srinivasan and Mr. Sanjeev Mehra retire by rotation at the Annual General Meeting (AGM) and offer themselves for re-appointment.
• Independent directors have given declarations meeting independence criteria.
• Mr. Manoj Kumar Jain was re-appointed as MD for a further five years.
• Mr. Karnam Ramachandra Sekhar was appointed as Managing Director.
• Mr. Taruvai Subbayya Krishnamurthy and Mr. Lakshminarayanan Subramanian ceased to be Independent Directors due to resignation.
• Mr. Bibhu Prasad Kanungo and Mr. Anand Raghavan were appointed as Additional Directors.
• Ms. Subhasri Sriram was appointed as an Additional Director.
• Mr. Bibhu Prasad Kanungo has been appointed as the Chairman of the Company.

IX. Board/Committee Meetings:

• Six Board meetings and 28 Committee meetings were convened during the year.

X. Material Changes and Director's Responsibility Statement:

• Claims experience has normalized after Covid-related issues.
• Solvency remained resilient.
• The Directors confirm compliance with Section 134 of the Companies Act, including adherence to accounting standards, maintenance of records, safeguarding of assets, and preparation of accounts on a going concern basis.

XI. Related Party Transactions and CSR Initiatives:

• All related party transactions were conducted on an arm's length basis and were in the ordinary course of business.
• The company has implemented Corporate Social Responsibility (CSR) initiatives per Section 135 of the Companies Act 2013.
• Average net profits of the Company for the past three financial years, prescribed CSR expenditure and details of amount spent on CSR activities during the financial year have been disclosed in Annexure 5 to this report, as mandated under the said Rules.

XII. Subsidiaries, Joint Ventures, Auditors and Vigil Mechanism:

• The Company does not have any subsidiary, Joint Venture or Associate Company.
• A "Whistle Blowing" policy is in place.
• M/s. G.D. Apte & Co., Chartered Accountants and M/s M Bhaskara Rao & Co, Chartered Accountants are the Joint Statutory Auditors of the Company.
• The company proposes the appointment of M/s. CNGSN & Associates, LLP, Chartered Accountants, Chennai for a term of five (5) years, to hold office from the conclusion of 18th Annual General Meeting until the conclusion of the 23rd Annual General Meeting of the Company.

XIII. Secretarial Standards and Other Compliances:

• The Company has complied with Secretarial Standards (SS-1 and SS-2) issued by ICSI.
• Maintenance of cost records and cost audit are not applicable.
• No instances of fraud were reported by auditors.
• The Company is exposed to risks and has a risk-based internal audit framework.
• The Company follows Corporate Governance Guidelines prescribed by IRDAI, Companies Act, and other applicable laws.

XIV. Indian Accounting Standards (Ind AS):

• The company has constituted a Steering Committee, headed by Mr. Brahmaiah Telaprolu to oversee IND AS implementation.
• Work is in progress towards implementation of IFRS.

XV. Other Points:

• The company has zero tolerance for Sexual Harassment.
• The disclosure relating to conservation of energy does not apply to companies in Life Insurance sector and hence the Company is exempted therefrom.
• Foreign exchange earnings for the year 2022-23 are Nil and the foreign exchange outgo during the year has been Rs 2.95 Crores net of TDS.

XVI. Annexures:

• The report includes several annexures containing details related to related party transactions, CSR activities, secretarial audit report, extract of annual return, and more.

This summary provides a detailed overview of the financial performance, governance, and compliance aspects of Shriram Life Insurance Company Limited for FY 2022-23 as described in the 18th Annual Report.