Corporate Governance Report 33
Secretarial Audit Report 50
BOARD OF DIRECTORS *
Mr Rakesh Sharma
Mr Animesh Chauhan
Mr Ian Moore
Ms P V Bharathi
M/s Rasool Singhal & Co.
Oriental Bank of Commerce
REGISTERED OFFICE
C-31 and C-32, First Floor, Connaught Circus, New Delhi –110 001, India
CORPORATE OFFICE
2nd Floor, Orchid Business Park, Sector-48, Sohna Road, Gurgaon –122018, Haryana, India
* th as on 9 August 2016
Corporate Information
ANNUAL REPORT 2015 - 16
Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited was launched in June
2008 and is jointly owned by two of India’s largest public sector banks – Canara Bank (holding 51%),
Oriental Bank of Commerce (23%) and HSBC Insurance (Asia Pacific) Holdings Limited (26%) the
asian insurance arm of HSBC.
The Company operates a pure bancassurance model with exclusive access to around 60 million
customers and a pan-India network of over 8000+ branches of Canara Bank, HSBC and Oriental
Bank of Commerce. The vast infrastructure of all the banks enables distribution and accessibility of
insurance products across the entire country, leading to greater convenience for customers and
increasing insurance penetration across the markets (urban, semi urban, rural) of the country thus,
contributing to the protection needs of the country.
The Company offers 2 products – 1 individual plans and 5 group plans which cater to the3 8
requirement of the various customer segments. The company endeavours to deliver affordable
insurance solutions to address the needs of the rural population, the social sector and economically
weaker sections of the society which is done through the rural branches of its partner banks.
The company reported a net profit of 126 crore in its 8th year of operations. The company has`
insured ~ 44000 lives in social sector against the mandated requirement of 35000 lives and issued ~
18000 polices (~24%) in the rural sector against the mandate of 19% for the financial year 2015-16.
By working in conjunction with the banks, the company has demonstrated sustained growth which
has been a result of quality business & overall efficiency. A strong focus on need-based selling,
system integration, regular training of registered bank staff, strong customer service back up has
ensured that the company has been able to retain the confidence of its customers and all stakeholders.
Corporate Profile
02
Dear Shareholders,
The year 2015-16 marked the eighth year of operations of our Company and it is my pleasure to inform that
our Company achieved a year-on-year growth of 53% in retail new business premium income with the profits
witnessing a growth of 22% at 126 crs.`
The FY 2015-16 was also an important milestone in the journey of the insurance industry in India to the
effect that the Government introduced various initiatives to provide the necessary boost to the industry.
The Parliament passed an amendment to the Insurance Act, inter alia, allowing foreign investment up to
49 percent in the sector and initial steps have been taken to promote e-commerce in the sector to increase
insurance penetration and further the cause of financial inclusion.
India's insurable population is anticipated to touch 750 million in 2020 and with these measures introduced by
the Government, the future looks promising. Furthermore, demographic factors such as growing middle class,
young insurable population and growing awareness of the need for protection and retirement planning will
surely support the growth of Indian life insurance sector.
The share of bancassurance continues to grow at a steady pace for private insurers. We too have leveraged
on the wide distribution network of our distributor banks, which is always a win-win proposition for banks,
company and the customers.
We have taken various measures to ensure value-for-money and ease of doing business for the customer,
through new initiatives, including innovative product designing and simplification of customer-facing processes.
As a Company, we have always conducted our business in a socially, environmentally and ethically prudent
manner. 'Giving back' to the society is our core belief and has been the guiding principle since existence. Last year
also, we endeavored to bring a smile on the faces of the many beneficiaries through our CSR initiatives.
On behalf of the Board, I thank you for your support and would like to place on record appreciation for the
efforts to all involved in our journey towards delivering value for all the stakeholders.
Rakesh Sharma
04
* th
Whole-time Director
& International, Group Insurance,
HSBC Holdings plc
Oriental Bank of Commerce
HSBC Asset Management (India) Pvt. Ltd.
A K Bansal Independent Director
B A Prabhakar Independent Director
Sid Khanna Independent Director
Canara Bank
Canara Bank
Canara Bank
CEO's Letter
Dear Shareholders,
The last year has been an eventful year for all of us, full of change and progress. We welcomed new staff, grew our business, increased
profitability and made progress on our key strategic initiatives.
We set out on our mission in the financial ear 2015-16 and focused our energies on growing the business and launchingGo for Growth y
initiatives around customer centricity. We made satisfactory progress in all areas of business and moved on a positive trajectory.
We took initiatives to simplify processes, in order to improve operational excellence, increase efficiency and create competitive
advantage. We continued with our focus on customer centricity to provide better experience to our customers by launching several
new/ upgraded products to cater to customer needs. Several customer focused initiatives were taken which have substantially improved
the various operational metrics.
Our business saw a growth of 53% in retail new business premium income (GWP) and our profits grew by 22% at 126 crs. The growth`
has helped us in securing 12 market rank against 15 in corresponding previous year on retail new business premium basis. th th
The successful transformation path for the future is also clear as we identified digitalization as a key driver to support business success.
We took first steps in this journey and implemented online customer service portal and distributor portal along with our presence on
various social media networks. A strengthened technology interface is something we are really looking forward to and we will continue
to invest in our IT infrastructure to keep pace with the times and provide our customers with simplified and convenient services.
During the year, we received several recognitions from the ndustry including ‘Bancassurance Leader, Technology Innovation and Mosti
Socially Responsible Insurer’ in The Indian Insurance Awards 2015 by Fintelekt, ‘Marketing Innovation, Corporate Social Responsibility
& Market Research’ in Indian Brand Convention 2015, ‘B2B Marketing Campaign of the Year’ in Financial Services Marketing Summit
Awards and anked 35 among top 50 ‘Dream Companies to Work For 2016’ in Times Ascent: Dream Companies To Work For.r th
Our employee base grew from 985 as 31 March 2015 to 1426 as on 31 March 2016. We achieved strong financial performance andon st st
we continued to successfully implement our strategy and laid a strong foundation for our future.
As we strive to make a significant space for ourselves in the industry, we continue to give back to the society with our CSR and
sustainability initiatives in area of creating awareness and empowering communities for a sustainable future. We were able to impact
over 5000 lives with our various projects.
I would like to thank all employees for their dedication and contribution to our excellent business performance. I would also like to
thank our Board for their valuable advice. I would like to especially thank you, our shareholders, for your continued trust and support.
And finally, I would like to thank our customers around the country for their confidence in us.
Anuj Mathur
06
Vatsala Sameer Company Secretary
Internal Audit
Awards & Recognition
Awards 2016
The Economic Times Best BFSI Brands 2016
CHOICe conferred with "The Economic Times Best BFSI Brands 2016” award in the Life Insurance category
The Indian Insurance Awards 2016 by Fintelekt
CHOICe won the "CSR Initiative of the Year" award
CHOICe won the "Dream Companies To Work For" award and has been
ranked 35 among the top 50 Dream Companies to Work For th
CertificateAward
08
CHOICe conferred with three awards:
Awards 2015
CHOICe w the "B2B Marketing Campaign of the Year" awardon
MTM Corporate Star Award 2015s
CHOICe won the Most Well Planned Business Travel award
Marketing Innovation Corporate Social Responsibility Market Research
CSR Initiatives
CORPORATE SOCIAL RESPONSIBILITY – FY 2015-16
As a responsible organization of this country, your Company has conducted itself in a socially,
environmentally and ethically prudent manner with an endeavour to make positive contributions
towards the betterment of the society. 'Giving back' to the society is a core belief which each employee
believes in and has been the guiding principle since the Company has been in existence.
There is a very comprehensive and structured CSR programme in place. Last year, the CSR efforts
were channelised in three broad areas:
1. Environment
3. Cleanliness and sanitation
To further its CSR objectives, thirteen projects were identified as per Schedule VII of the Companies
Act, 2013 and your Company partnered with like-minded trusts, societies and companies and also
implemented programs directly to generate value by adopting a long-term sustainability approach.
Partners in Progress
Volunteering Programme
Swachhta
resources; environment preservation Plant trees, promote / conserve
green spaces and ecosystems
Self reliance – skill development
and differently-abled children
Education and Awareness
• Project Madhuvan: Technical and financial assistance for sustainable management of forest
resources and market linkages was provided to tribal communities in the states of Madhya Pradesh
and Chattisgarh. The project directly benefitted 3000 people in 10 tribal villages. Sustainable
harvesting protocols have been developed for non-timber forest produce leading to optimal usage
and conservation of forests. This has led to increased forest cover and capacity building of the tribal
community resulting in preservation of forest produce for a longer period, better packaging,
removal of middle men and improved market linkages which increased their income and helped in
poverty alleviation.
• Project Jal-Jeevan: A water-harvesting structure was built with community partnership in village
Pachala (a semi-arid village in Rajasthan) which had a perennial shortage of water. The water table
has now increased and as a result 11 wells have also recharged. There is decrease in fluoride and
salt content which was affecting the health of the villagers. 14,700 people in 5 villages have
benefitted They now have all-year-round access to water for drinking, sanitation, agriculture and.
livestock.
• Green Cover: 9,000 trees were planted during World Environment Day and via ‘Adopt a tree’
campaign at a reserve forest and other locations which helped in conservation of the environment.
• Recycling: All waste paper/material was sent to a partner for recycling. Under ‘School-to-School',
,a program to bridge the resource gap children in city schools were sensitized by employees
towards the needs of their counterparts in the villages and to contribute material which would help
them in their daily studies. Around 1500 kgs of paper/material was sent for recycling and generating
employment/income.
• Customer communication: Recycled paper is used for all mandatory customer communication by
the company.
• wasEarth Day: ‘Save paper campaign’ launched with several initiatives like “Chuck the (paper)
cup”, “Go digital”.
- Awareness activities for staff and families like origami with pro-planet messaging, painting
competition on renewable energy for staff children across 26 locations in the country.
- ‘Pedal for the planet’, a cylothon-walkathon and a lead up activity to Earth Hour was organized
for the 8 consecutive year in Delhi with 1000 cyclist/walkers spreading awareness on th
environment conservation.
10
& water management, printing on both sides and smaller fonts; pro-environment messaging at
several points to discourage printing, processes are digitized to save paper and increase efficiency,
proper management of e-waste and monthly thematic campaigns for environment conservation
are undertaken to promote the cause.
Education
• Support provided to 530 children from underserved communities/orphans via 3 projects and
180 children were integrated into mainstream education.
• Vocational/employability training (in stitching, tailoring & embroidery, spoken english, retail
management, bedside patient care, automobile repair, computers) provided to 735
underprivileged children, youth & women via 7 projects. Out of this around 70% are women.
75% beneficiaries are gainfully employed or generating income through self employment.
• Workshops on financial literacy, career guidance, social issues and sanitation conducted by
employees. Nearly 70% beneficiaries post employee-led workshops opened bank accounts
.and were integrated in the financial stream to encourage a culture of saving
• Health and nutrition camps organized.
• Consumer education & awareness of life insurance propagated via print campaign in newspapers
in 4 languages.
benefitting 1500 children from the underserved communities.
Sanitation
Toilets constructed in needy schools in 4 villages with relevant messaging in the school campus;
health and sanitation workshops were conducted by employees to promote behavioural change.
Others
Financial, material and volunteering support provided for Nepal earthquake and Chennai floods
Company values and business philosophy
Customer First’, highest standards of ethics, quality and excellence implemented by creating an
integrated culture of corporate governance, compliance and risk management - how we do business is
as important as what we do. The Company is committed to delivering ‘Value for Money’ to the
customers, strictly follows ‘Treating Customer Fairly’ principles.
To deliver affordable life insurance solutions to underserved population, need-based, low cost
and easy-enrollment products are launched basis engagement with the communities. Each year
THE WINNING PACE OF PROGRESS
12
the company takes measures to ensure the rural & socially under privileged population is sold
affordable insurance.
Apart from these, several initiatives were launched to create awareness and educate employees,
beneficiaries and the general public on the need to conserve resources, protect the environment
and on sanitation and general well being.
As part of the employee volunteering programme ‘Partners in Progress’, employees volunteered
and engaged with the beneficiaries of the partner NGOs through different initiatives. Over 2,000
man hours of CSR employee volunteering were clocked (3.2 hours per employee) in financial year
2015-16 with 90% employees participating in at least two initiatives.
Annual report on the CSR activities for the financial year 2015-16 is attached herewith as Annexure A.
Our CSR partners:
14
Risk Management Framework
The Company relies on robust risk management practices and governance mechanism towards managing risks.
Management of risks, including its measurement, requires adopting a multi-faceted approach where each risk and its impact
are analyzed from various aspects in order to build a clear view on that risk & assess its relevance for the Company & other
relevant stakeholders. The Company takes a considered approach towards managing risks in order to ensure that its
tangible and intangible assets (such as brand, reputation etc.) are protected at all times. It also aims to protect the interests
cof ustomer, shareholders and other stakeholders from all risks that are both internal and the ones that emanate from the
external environment in which it operates.
Management of risk is also integrated into the business decision making at a strategic and process level. A conducive
Risk Management framework has been implemented to facilitate the identification, assessment, mitigation and reporting of
risk. This includes an assessment and periodic review of top risks, an incident reporting framework, and assessment and
management of risks against the following key focus areas:
• Enterprise value creation
Management oversight over relevant risks is ensured through separate executive risk management committees and
internal groups where all categories of risk including market, liquidity, credit, insurance, product & pricing, operational
and business & strategic risks are reviewed. The Executive Committee, comprising of Company's Senior Management,
performs the role of the overarching risk group to provide leadership and oversight to the functioning of the risk
sub- groups. This ensures that the risk is managed within the stated appetite and the risk management activities adequately
support Company's objectives and strategies.
Under the overall ambit of corporate governance, the Company has established a risk management framework that is
supported by a “Three lines of Defense” approach (depicted below) that helps in appropriately safeguarding the interests of
Company's customers as well as its shareholders.
ANNUAL REPORT 2015 - 16
risk coordinators
Second line of defence
First line of defence
Company’s three lines of defence model/approach
The Company inculcates a culture whereby management of risks remain at the functional level as a part of their day-to-day
responsibilities and where risk is seen as part of the overall business process. To further strengthen the first line, the
Company has implemented an internal control framework supported by functional business risk and control managers who
work closely with Department Heads to strengthen the internal controls in their respective areas.
Business risk & control Managers (BRCM) have been identified across business areas who are responsible for managing
risks within their function and testing of key controls mapped to applicable risks as documented within their functional Risk
control assessment (RCA) inline with the Internal control monitoring plan.
Control functions like Risk Management and Compliance act as a second line of defense and are independent from
business operations which has been implemented through independent reporting mechanism. This ensures that the Risk
Management function is able to monitor risks across all the functional areas of the Company.
The role of the third line is performed by the Internal Audit function that provides an independent assurance to the Board
on the functioning of internal controls.
The risk governance structure further includes setting up of a Board Risk Committee (BRC) that has the ultimate
responsibility of ensuring that an effective risk management framework, asset liability matching and internal control
system are implemented. The BRC also reviews its effectiveness on an ongoing basis. The BRC assists the Board in effective
operation of the risk management framework, advises the Board with regard to risk management decisions in relation
to strategic and operational matters and also reports to the Board on the details of the risk exposures and the actions
taken to manage the exposures. The BRC and Audit Committee are supported by Company's risk management and the
internal audit functions, respectively and are responsible for assisting the Board in fulfilling these responsibilities and ensuring
adequacy of the Company's risk management and internal control structure.
THE WINNING PACE OF PROGRESS
16
Dear Shareholders,
Your directors have pleasure in presenting the Ninth Annual Report of Canara HSBC Oriental Bank of Commerce Life
Insurance Company Limited (the 'Company'), together with the audited statements of accounts and the auditors’ report
thereon for the financial year ended 31 March 2016. st
KEY FINANCIAL PARAMETERS
The key financial parameters for the financial year ended 31 March 2016 are summarised below: st
BUSINESS REVIEW
Industry scenario *
Indian life insurance sector with about 360 million policies, is the biggest in the world; however, is ranked at the fifteenth
position in premium terms with only about 2% of the world’s life insurance premiums. As per recent studies conducted by
various organisations, the insurance industry is expected to grow at a compounded annual growth rate (CAGR) of 12-15%
over the next couple of years. This would result in improvement in India’s premium contribution.
During the financial year 2015-16, IRDAI (Insurance Regulatory and Development Authority of India) reported that the life
insurance industry registered a 5% year-on-year growth in terms of retail new business gross weighted premium (GWP)
which stood at over 500 billion. The private life insurers' market share increased from 41% in financial year 2014-15 to`
44% in financial year 2015-16.
During the year, the insurance sector played a vital role in the economic development by providing various useful services,
including managing both social and financial risk, mobilizing savings, promoting investment and stabilizing financial markets.
Realizing the potential of insurance sector in mobilizing the savings for the productive use and social safety, Government has
taken various steps for increasing focus to improve quality, reach and awareness levels.
The Parliament of India passed the Insurance Amendment Bill in March 2015, which, allows foreign investors tointer alia,
increase their stake in private sector insurance companies from 26% to 49%.
The future looks aspiring, as on the economic front, India remains the fastest growing country across the world with GDP
growth in 2016 expected at 7.6% year-on-year compared to global GDP which is likely to grow at 2.5%. The expectation
is that India's GDP growth rate is likely to reach 8% by 2019.
Further, life insurance is projected to comprise 35% of total savings by the end of this decade, as against 26% in 2009-10.
Hence, the future looks promising for the life insurance industry with effective changes in regulatory framework, fresh
capitalization, increasing GDP and changes in demographic factors - such as growing middle class and increasing awareness
will support the growth of Indian life insurance.
( in cr)`
Number of policies sold (in absolute numbers) 76,015 60,606
Sum assured 8,449 6,695
Surplus/(deficit) in revenue account (net of contribution from shareholders) 120 64
Profit/ (loss) after tax 126 103
Expense ratio 13.5% 16.1%
Directors' Report
Company performance
To embark upon the various growth initiatives, in the financial year 2015-16 your Company launched a 'Go for Growth'
drive, including several other key strategic initiatives in an endeavour to fast pace the growth trajectory. Under the umbrella
of ‘Go for Growth’ your Company has doubled its sales support team, simplified, streamlined and automated operational
processes, focused on customer centricity and better experience and launched several new/ upgraded products to cater
to customer needs. All these initiatives have resulted in a year-on-year growth in business, improved market ranking,
increased employee satisfaction and the foremost - improved customer experience.
The top line witnessed a year-on-year growth of 53% in retail new business premium income (GWP) and the profits #
witnessed a growth of 22% with 126 crs of profit before tax. The growth in revenue has helped your Company secure`
12 market rank against 15 in corresponding previous year, on retail new business premium basis. Your Company is one of th th
the most cost-efficient insurance companies in its eighth year of operations.
Your Company acknowledges the importance of quality sales and benefits of high persistency and has always endeavored
to ensure conscious efforts in this direction, including increased customer engagement, policyholder education initiatives,
need-based selling practices and increased premium payment options. Your Company's 13 month persistency stood at th
71%, ranking 8 in the industry and continues to remain a focus area for improvement. th
During the year, your Company also took its first steps in the digitization journey and started implementing tablet based
sales processes, online customer service portal, distributor portal etc. Your Company has also now been able to establish
its presence on various social media networks.
Your Company has been awarded several recognitions during the year including ‘Bancassurance Leader, Technology
Innovation and Most Socially Responsible Insurer’ in ‘The Indian Insurance Awards 2015 by Fintelekt’, ‘Marketing
Innovation, Corporate Social Responsibility & Market Research’ in Indian Brand Convention 2015, ‘B2B Marketing
Campaign of the Year’ in ‘Financial Services Marketing Summit Awards’ and ranked 35 among top 50 ‘Dream Companies th
to Work For 2016’ in Times Ascent: Dream Companies To Work For.
Claims Update
In line with the TCF (Treating Customer Fairly) philosophy, your Company further simplified the claims evaluation process.
During the financial year 2015-16, 1,092 death claims were intimated (both individual as well as group claims). 1 056 death,
claims were settled and paid and 51 death claims were repudiated, resulting in a claims settlement ratio of 95%.
The average time taken for settlement of claims from date of last document received, for individual claims was around
5 days and cumulatively for individual as well as group claims was around 10 days.
Financial strength rating
During the year CARE has reaffirmed the rating of ‘CARE AAA (In)’ [Triple A] for your Company's claim paying ability/
financial strength. This is the 3 year in sequence where your Company has maintained this rating. This signifies that your rd
Company continues to have the highest financial strength to meet its policyholders’ obligations and the impact of any
adverse business and economic factors on the claim paying ability is minimal.
Rural and social sector obligations
Your Company successfully met its rural and social sector obligations, as stipulated in the IRDA (Obligations of Insurer
to Rural or Social Sectors) Regulations, 2002. During the year, your Company covered 44,209 lives (previous year 51,666
lives) against the target of 35,000 lives in the social sector and issued 17,909 policies (23.6%) in the rural sector against the
requirement of 14,443 policies (19%).
# GWP = Gross written premium
18
Solvency margin and capital structure
Your Company has maintained a healthy solvency margin on a continuous basis with solvency ratio of 411% as at the end
of the financial year 2015-16. The available solvency margin was 668 crores against the required solvency margin of`
`162 crores as at 31 March 2016. st
The capital structure as at 31 March 2016 is as follows: st
No. of shares issued 95 crores
Face value 10/- per share`
Paid up capital 950 crores`
As at 31 March 2016, your Company’s shares were held by the following shareholders: st
Name of shareholder Percentage of holding
Canara Bank* 51%
Oriental Bank of Commerce 23%
*Canara Bank holds beneficial interest in respect of five shares held by its nominees.
PRODUCT PORTFOLIO
Your Company is focused on offering products aligned to specific propositions, which are relevant to its target customer
segments in the distributor banks and online customers. Product design and positioning is rooted in our understanding of
the customers’ needs through research and analytical insight. As a philosophy, your Company is committed to the principle
of providing ‘Value-for-Money’ products to customers which are benchmarked for their competitiveness vis-a-vis the
market offerings.
Your Company significantly added new products to its product portfolio in the financial year 2015-16 in line with its overall
strategy of increasing the product options available to targeted customer segments. Unit-linked products with better value
to customers and more payment options were launched in April 2015 and November 2015. Traditional products were
also added to the product portfolio. Your Company launched a shorter pay variant of its traditional monthly income product
suitable for customers looking for guaranteed income, a modified version of employee benefits group protection product,
and a non-linked non-participating limited pay endowment product, suitable for customers looking for disciplined savings
and fixed return with a relatively lower premium contribution.
Your Company entered the annuity space by launching an annuity product with return of premiums paid on death of the
annuitant. This product enables reaching out to older customers of distributor banks with a proposition of guaranteed
income for life and also for leaving a sum of money for their spouse and children.
More recently in the new financial year, your Company has launched a traditional endowment product, a term plan and an
annuity product. The product portfolio has now expanded to 23 products - 9 unit-linked and 9 traditional products offered
on the individual platform, in addition to 5 products on a Group platform.
Your Company has secured approvals for two new products and will be shortly launching Secure Bhavishya Plan - a linked
product for pension accumulation, and iNVESTSHIELD - a unit-linked plan for online sales, to meet the needs of its target
customer segments.
During the financial year 2015-16, the Regulator continued to apply enhanced scrutiny to product design and has been
prescribing design principles intended to protect policyholder interests and promote appropriate selling practices, which
the Company fully supports. Also, the life insurance industry and the Regulator effectively engaged during the year to
streamline the product approval process.
ANNUAL REPORT 2015 - 16
19
Your Company is fully cognizant and strongly supports the Regulator’s desire of improving transparency and promoting fair
customer outcomes from life insurance products. In this regard, your Company continues to adopt proactive measures to
help achieve fair outcomes for its customers.
DISTRIBUTION
Your Company sustained its focus on the distribution opportunity available across the distributor banks with 8,500 bank
branches and 70 million customers.
During the period under review, your Company continued to train and develop an increasing sales force across the
distributor banks. The Licensed Branch Staff (LBS), i.e. licensed staff of the distributor banks is the mainstay of the sales
strategy. By the end of the year, there were more than 5,000 LBS engaged in the process of selling life insurance across the
country. The distribution model was further strengthened by hiring of 500 additional sales support staff by your Company
to support the bank staff in the sale of insurance products. This addition led to an enhanced sales efficiency with activation of
almost 70% branches across the banks during the year and significant premium growth as compared to the previous year.
To supplement the sales efforts of the banks, your Company continued to impart structured and customized training to the
licensed bank staff to ensure that they are updated with necessary skills, industry developments and knowledge.
Your Company remained focused on need-based selling across the customers of its distributor banks. It reached out to
customers through various propositions such as protection, savings, child, retirement and home loan protection needs.
Your Company is positive about its future growth prospects and is committed to build a customer centric distribution
platform with bancassurance expertise, to continue a sustained focus on digital and product innovation and build further
economies of scale which are cost effective and profitable.
MARKETING
During the financial year 2015-16, your Company implemented an annual marketing plan covering following key
approaches:
• Initiatives to strengthen brand visibility: Key mass media advertising platforms were leveraged to reinforce your
Company’s brand such as print advertisements in leading regional and English newspapers along with radio
advertisements. The advertisements focused on creating awareness for life insurance solutions and key propositions
offered by your Company.
Apart from this, there were branding initiatives carried out in the branches and ATM's of the distributor banks to increase
brand awareness for the bank customers. These initiatives also comprised of regular branch activation events where
engagements are provided through marketing tools to create mindshare.
During the year, your Company created campaigns on the critical customer centric propositions i.e. securing a child's
future and home loan protection. The campaign around securing a child's future was carried out in print media as well as
the radio platform. It was published in five languages in nine states and the radio platform was used in seven major cities,
on two leading radio stations. The home loan protection campaign was published in six leading financial and English
newspapers across India.
• Presence on web/internet: During the year, your Company took steps to capitalize the opportunity offered by the
digital channel for its online product offering, through presence on social media, launch of a new, improved and
responsive website and various other visibility campaigns on the web.
• Awareness Campaign: As part of its commitment to customer centricity, your Company continued with its customer
education and awareness campaigns aimed at educating customers on the essentials of life insurance and the
importance of staying protected. The print campaign for the awareness drive, covered 10 regional and 5 national level
newspapers during the year thus reiterating our commitment on raising the overall awareness about life insurance.
THE WINNING PACE OF PROGRESS
20
Your Company will endeavor during the next year to further develop these initiatives and reiterate the messages consistent
with the initiatives that were progressed during the year.
RISK MANAGEMENT FRAMEWORK
The effectiveness of risk management framework and policies is fundamental to a company’s success. The risk
management practices are therefore integrated into the overall governance and routine operations across all verticals
which is in line with Company’s Board approved Risk Policy. Your Company adopts a set of risk management practices
that are designed to support the following risk management principles and goals:
• risk management is the responsibility of every staff member
• risk management activities adequately support the Company's objectives and strategies
• a consistent framework is in place to facilitate identification, assessment, management and reporting of risks
• appropriate actions are taken by senior management to manage risk in accordance with the Company's risk appetite
The Company inculcates a culture whereby management of risks remains at the functional level as a part of day-to-day
responsibilities and where risk is seen as part of the overall business process, thus acting as the first line of defense. A robust
framework of risk identification, evaluation, monitoring and control exists. There are various internal forums to review
different types of risks. Key risks are also regularly reviewed by the senior management.
The control functions like Risk Management and Compliance act as a second line of defense and are independent from
business operations, with independent reporting arrangements. This ensures that the Risk Management function is able
to monitor all risks across the various activities of business. The role of the third line of defense is performed by the Internal
Audit function that provides an independent assurance to the Board through the Audit Committee, on the functioning and
adequacy of internal controls including the internal financial controls.
The risk governance structure further includes a Board Risk Committee (BRC) that has the ultimate responsibility of
ensuring that an effective risk management framework, asset-liability matching and internal control systems are
implemented. The BRC also reviews effectiveness of the framework on an ongoing basis. The BRC assists the Board in
effective operation of the risk management framework, advises the Board with regard to risk management decisions in
relation to strategic and operational matters and also reports to the Board on the details of the risk exposures and the
actions taken to manage the exposures. The BRC and Audit Committee are supported by the Risk Management and the
Internal Audit functions, respectively.
INVESTMENTS
Your Company now manages investments in excess of 9,750 crores with a healthy mix of equity and fixed income`
investments and continues to offer customers a wide range of traditional and unit linked products with fund options
depending on their risk appetite with varied asset allocation of equity, debt and money market investments. The traditional
portfolios are managed in accordance with the regulatory asset allocation requirements. During the financial year 2015-16,
in the non unit linked segment, your Company added Annuity fund in its portfolio. Your Company, through its prudent
investment strategy, continues with well diversified and balanced portfolios across funds, which are well positioned for long
term sustainable performance that would help achieving expectations and objectives of the policyholders. The assets under
management (AUM) stood at 9,786 crores as on 31 March 2016.` st
CUSTOMER SERVICE INITIATIVES
'Customer first' is a philosophy that the Company follows in the true spirit. In this direction, during the period under review,
your Company undertook the following initiatives to improve customer experience:
ANNUAL REPORT 2015 - 16
• Launch of tele-servicing : Another milestone was achieved towards providing hassle free service and convenience to
customers through ‘tele-servicing’ wherein customers can request for seventeen types of policy changes/ requests with
regard to his/ her policy, on a phone call itself with no written requirements and instant processing confirmation. Impact
of the services being requested is shared with the customer on the call itself, resulting in a more informed decision taken.
• Tele-revival : In order to further simplify the policy revival process for the customer, a 'tele revival' process was launched,
whereby the customer can now pay his premium while on call itself and by answering simple questions, the lapsed
policy can be reinstated in real time. The customer also gets instant confirmation of revival.
• Servicing through IVR : In our constant endeavor to enhance servicing capabilities, IVR options were refined to ensure
better customer experience. As a result, customers can now request for various documents including renewal
premium receipt, duplicate policy document, policy servicing form and claim intimation form, instantly through IVR.
With an objective of an effective communication platform with the customers and keeping them informed and educated
on their policies, your Company has taken the following initiatives :
• Regional language SMS service : With an increased focus on gaining the customer mindshare, it was imperative to
interact in the language of the customer. SMS service has been initiated in eight different languages, including Hindi,
Punjabi, Tamil, Telegu, Kannada, Malayalam, Bengali and Marathi.
Additionally, multilingual premium reminder notices are also slated to be initiated soon in nine languages across the
country.
With an objective to provide multiple avenues to the policyholders to conveniently pay premiums, your Company added
the following:
• Payment link on SMS : Renewal reminder SMS sent to customers carries a payment link which directly takes customers
to the payment page for online renewal premium payment, where the policy and payment details are already pre-filled.
With the widespread use of smart phones, this is another effective step in the direction of providing ease of convenience
to the policyholder.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As a responsible organization, your Company has conducted itself in a socially, environmentally and ethically prudent
manner with an endeavour to make positive contributions towards the betterment of the society. 'Giving back' to the
society is a core belief which each employee believes in and has been the guiding principle since your Company has been
in existence.
There is a very comprehensive and structured CSR programme in place. Last year, the CSR efforts were channelised in
three broad areas of environment, education and sanitation.
To further its CSR objectives, your Company identified thirteen projects as per Schedule VII of the Companies Act, 2013
and partnered with like-minded trusts, societies and companies and also implemented programs directly to generate value
by adopting a long-term sustainability approach.
With the objective of protection of the environment, your Company partnered with various NGOs for projects including
sustainable management of forest resources and water harvesting. Under the initiative, 9,000 trees were'Green Cover'
planted on the occasion of the World Environment Day through the ‘Adopt a tree’ campaign at a reserve forest and other
locations which helped in conservation of the environment. Various internal campaigns were launched in order to promote
recycling of material and reduce the use of paper, in order to conserve trees.
Under ‘School-to-School', a program to bridge the resource gap, children in city schools were sensitized by employees
towards the needs of their counterparts in the villages and to contribute material which would help them in their daily
THE WINNING PACE OF PROGRESS
22
studies. ‘Pedal for the planet’, a cylothon-walkathon and a lead up activity to Earth Hour was organized for the
8 consecutive year in Delhi with 1,000 cyclist/walkers spreading awareness on environment conservation. th
Through its various education related initiatives, support was provided to 530 children from underserved communities
and 180 children were integrated into mainstream education. Vocational/ employability training was provided to 735
underprivileged children, youth and women and 75% beneficiaries are gainfully employed or generating income through
self employment.
The employees held various workshops on financial literacy, career guidance, health and nutrition, social issues and
sanitation for the beneficiaries of the CSR projects. ‘Share-a-book’, ‘Gift-a-toy’ and ‘Build-a-library’ campaigns organized
during ‘Joy of Giving’ week benefitting 1,500 children from the underserved communities.
Your Company helped build toilets in needy schools in four villages with relevant messaging in the school campus.
Over 2,000 man-hours of CSR employee volunteering were clocked (3.2 hours per employee) in financial year 2015-16
with 90% employees participating in at least two initiatives.
Annual report on the CSR activities for the financial year 2015-16 is hereby annexed as Annexure A and forms part of
this report.
HUMAN RESOURCE AND DEVELOPMENT
Your Company has always been committed towards its vision to be a best place to work and to be known for its efforts to
ensure development and growth of its employees.
In the last year, your Company was ranked 35 in the ‘Dreams Company to Work’ survey in India, which is a testimony of th
the high engagement level with employees.
Talent management and succession planning are top priority for your Company, where in-house talent is encouraged and
provided with opportunities to grow within the organization. Your Company has an excellent retention rate and continues
to demonstrate high productivity levels.
AUDITORS’ REPORT
Your directors have examined the statutory auditors’ report on financial statements for the financial year ended 31 March st
2016. The auditors’ report is self explanatory and does not call for any comments under section 134(3)(f) of the Companies
Act, 2013 as the report carries no qualification/ adverse remarks/ reservations/ disclaimer.
During the year, the Comptroller and Auditor General of India (C&AG), entrusted the supplementary audit of the annual
accounts of your Company for the financial year 2015-16 to the Principal Director of Commercial Audit & Ex-officio
Member Audit Board–II, New Delhi (Principal Director, New Delhi). The Principal Director, New Delhi conducted a
supplementary audit of the annual accounts during the month of May 2016.
The report of C&AG is being placed with the report of statutory auditors, elsewhere in the annual report. There are no
observations or qualifications in the report issued by C&AG.
AUDITORS
The joint statutory auditors, M/s K K Soni & Co. and M/s Rasool Singhal & Co., Chartered Accountants retire at the ninth
annual general meeting (AGM).
The Comptroller and Auditor General of India (C&AG) has appointed these firms, i.e. M/s K K Soni & Co. and M/s Rasool
Singhal & Co., Chartered Accountants as the joint statutory auditors of the Company for the financial year 2016-17.
M/s K K Soni & Co. and M/s Rasool Singhal & Co. shall hold office upto the conclusion of the tenth annual general meeting.
ANNUAL REPORT 2015 - 16
CORPORATE GOVERNANCE
Your Company has a Board approved Corporate Governance Policy which is in accordance with the IRDAI Corporate
Governance guidelines (CG Guidelines) and the requirements of the Companies Act, 2013. The Corporate Governance
Report containing disclosures required to be made under the Companies Act, 2013 as well as the CG Guidelines is hereby
annexed as Annexure B and forms part of this report. A certificate from the Compliance Officer under the CG Guidelines
certifying compliance with the guidelines is hereby annexed as Annexure C and forms part of this report.
DIRECTORS
As at the date of the report, your Company's Board comprises of thirteen directors, with Chief Executive Officer being the
only executive director. The Chairman of the Board holds a non-executive position.
The following directors resigned from the Board of your Company since the last annual general meeting:
1. Mr Suresh N Patel, director - with effect from close of business hours of 2 November 2015 nd
2. Mr Marcelo Gomes Teixeira, director - with effect from close of business hours of 3 December 2015 rd
3. Mr Pradyuman Singh Rawat, director - with effect from close of business hours of 31 May 2016 st
The directors place on record their sincere appreciation for the valuable guidance and support provided by Mr Patel,
Mr Teixeira and Mr Rawat, during their tenure as directors.
Since the last annual general meeting, the following additional directors were appointed on the Board of your Company:
1. Mr Rakesh Sharma with effect from 28 October 2015 th
2. Mr Ian Keith Moore with effect from 14 January 2016 th
3. Mr Rajkiran Rai Gundyadka with effect from 8 February 2016 th
4. Mr Dinabandhu Mohapatra with effect from 26 July 2016 th
Mr Rakesh Sharma, Mr Ian Moore, Mr Rajkiran Rai Gundyadka and Mr Dinabandhu Mohapatra shall hold officeKeith
up to the date of the ninth annual general meeting (AGM). Your Company has received notice under section 160 of the
Companies Act, 2013, along with a deposit of 1,00,000/- each, proposing their candidature for the office of directors.`
In accordance with the provisions of Companies Act, 2013 and the Articles of Association, Ms P V Bharathi and
Mr B Mahesh Kumar Singh retire by rotation at the AGM and being eligible offers themselves for re-appointment.
The Board of directors feels that the appointment Mr Rakesh Sharma, Mr Ian Keith Moore, Mr Rajkiran Rai Gundyadka
and Mr Dinabandhu Mohapatra and re-appointment of Ms P V Bharathi and Mr B Mahesh Kumar Singh would be in the best
interest of your Company. The Board recommends their appointment/ re-appointment as directors of your Company.
Your Company has received requisite disclosures and undertakings from all the directors in compliance with the provisions
of the Companies Act, 2013 and the IRDAI Corporate Governance Guidelines.
INDEPENDENT DIRECTORS
Currently, the Company has four independent directors - Mr R Krishnamurthy, Mr A K Bansal, Mr Sid Khanna and
Mr B A Prabhakar. The term of office of appointment of Mr R Krishnamurthy, Mr A K Bansal & Mr Sid Khanna is upto
12 August 2017 and of Mr B A Prabhakar is upto 11 February 2018. th th
The independent directors met separately once during the financial year 2015-16 on 14 May 2015. th
The independent directors of your Company have given the annual confirmation that they continue to meet the criteria of
independence as provided under section 149(6) of the Companies Act, 2013.
THE WINNING PACE OF PROGRESS
24
KEY MANAGERIAL PERSONNEL
Mr Anuj Mathur, Chief Executive Officer & Whole-time Director (CEO & WTD), Mr Gaurav Seth, Chief Financial Officer
and Ms Vatsala Sameer, Company Secretary, are the 'Key Managerial Personnel' of your Company, as required under the
provisions of the Companies Act, 2013.
PUBLIC DEPOSITS
During theyearunder review, your Company has not accepted any deposits under section73of theCompaniesAct, 2013.
DIVIDEND
In view of accumulated losses, the directors are unable to recommend any dividend for the financial year ended
31 March 2016. st
RESERVES
Your Company made a profit during the financial year 2015-16 and same has been adjusted against accumulated losses.
EVALUATION OF PERFORMANCE OF THE BOARD
Under the Companies Act, 2013, the performance of the Board and its Committees as well as of individual directors is
required to be evaluated annually.
Accordingly, your Company drafted a Board and Directors’ Evaluation Policy including a questionnaire which was
approved by the Board on the recommendation of the Nomination and Remuneration Committee (NRC). The Policy
lays down a mix of self and peer evaluation criteria through a rated questionnaire, which addresses various facets of
performance of the Board, its Committees and the individual directors, including the Chairman and is reviewed on an
annual basis.
The questionnaire was circulated to all directors and based on the responses submitted by the directors, results of the
evaluation exercise were presented in the meetings of the NRC and Board held in May 2016.
The independent directors also discussed the results of the evaluation in their separate meeting held in May 2016.
SECRETARIAL AUDIT
The Board appointed M/s Chandrasekaran Associates, Practicing Company Secretaries to undertake the secretarial
audit of your Company for the financial year 2015-16. The secretarial audit report for the financial year 2015-16 is hereby
annexed as Annexure D and forms part of this report. There are no qualifications/ adverse remarks/ reservations/
disclaimer in the report.
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO
THE FINANCIAL STATEMENTS
Your Company has in place adequate internal financial controls with reference to financial statements. During the year,
your Company had engaged an external firm to review adequacy and working effectiveness of internal financial controls
within your Company, based on the requirements of the Companies Act 2013 and the guidance note issued in this regard
by the Institute of Chartered Accountants of India.
As per the review conducted by the external firm, the internal financial controls in existence within your Company are
adequate and commensurate with the size of business of your Company. The results of the review were also placed before
the Audit Committee and the Board in their meetings held in May 2016.
ANNUAL REPORT 2015 - 16
COMPENSATION POLICY
Your Company has put in place a Compensation Policy which is applicable to all the employees of your Company,
including the Key Managerial Personnel. Your Company’s philosophy on compensation is to benchmark fixed salaries
based on individual performance and criticality of role around median of the market and range salaries on both sides of
the median by using the full market pay range. The objective of this policy is to define compensation strategy that is fair,
equitable, transparent, comprehensible and competitive with the market.
The Compensation Policy is designed to drive the following four basic objectives:
• Performance at the team and individual level which drives towards and in line with your Company's strategic and
short term objectives
• Ensuring a highly motivated team
• Building teamwork and maintaining flexibility as your Company grows in size and across all locations
Your Company had this policy in place since inception and the tenets of this policy are also in line with the principles and
objectives as particularly mentioned in the section 178 of the Companies Act, 2013.
COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION
In terms of the requirements under the Companies Act, 2013, your Company has put in place a policy on appointment
and remuneration of Directors, including independent directors and executive directors. The purpose of this Policy is to:
a. describe the procedure and criteria on the basis of which Nomination & Remuneration Committee (NRC) will
identify persons eligible to be appointed as directors, assess independence of directors;
b. lay down provisions with respect to term of appointment, criteria for re-appointment and remuneration of
directors, including independent directors;
c. lay down the performance evaluation framework of directors, including independent directors;
d. outline any other requirements with respect to appointment of directors, including independent directors.
The Chief Executive Officer is a whole-time director on the Board and is the only executive director. Sitting fee is paid for
attending Board and Committee meetings to the independent directors.
The Policy has been formulated keeping in mind the requirements of the Companies Act, 2013, IRDAI Corporate
Governance guidelines and the functional environment of your Company.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of Companies (Management and Administration)
Rules, 2014, extract of annual return (in the prescribed Form MGT- 9) is hereby annexed as Annexure E and forms part
of this report.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by your Company during the financial year 2015-16 with related parties
were in the ordinary course of business and on an arm’s length basis. New related party transactions entered into during the
financial year were approved by the Audit Committee.
A disclosure of the related party transactions has been made in Form AOC-2, hereby annexed as Annexure F and forms
part of this report.
26
PARTICULARS OF EMPLOYEES
As required under the provisions of Rule 5(2) of the Companies (appointment and remuneration of managerial personnel),
Rules 2014, as amended from time to time, the names and other particulars of employees drawing remuneration in excess
of the limits are set out in Annexure G and forms part of this report.
STRATEGY FOR IMPLEMENTATION OF IND AS
The Ministry of Corporate Affairs notified the Companies (Indian Accounting Standards) Rules, 2015 in February 2015.
Further, IRDAI issued a circular in March 2016, prescribing guidelines for all insurers to follow the Indian Accounting
Standards (Ind AS) (similar to IFRS). The key requirements of the aforesaid IRDAI circular include:
• Compliance with Ind AS from financial year 2018-19 onwards (with comparatives for financial year 2017-18)
• Setting up of a steering committee to initiate the implementation process
• Audit Committee is required to oversee the implementation process
• Submission of proforma Ind AS financial statements to IRDAI from the quarter ending 31 December 2016 onwards st
• Disclosure of strategy for Ind AS implementation in the Annual Report with effect from financial year 2015-16
Your Company has constituted the Steering Committee, comprising of members from cross-functional areas. The Steering
Committee will assess the impact of the Ind AS implementation on your Company’s financial position and present the
quarterly progress reports to the Board and the Audit Committee until implementation.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies
(Accounts) Rules, 2014 is as under:
a. Conservation of energy
With regards to conservation of energy, your Company has taken the following initiatives:
i. In the new head office, your Company has opted for LED's in place of CFL's which consume 30% lesser electricity
and are much more environment friendly. With that, your Company is going to save approx 53,000 electrical units
every year.
ii. Your Company has initiated paper conservation campaign by discouraging wastage of paper through various means
and encouraging recycling, wherever possible.
iii. Wasteandshreddedpaper isalsodonatedtoGOONJ,apartnerNGO,whichthenrecycles thepaper forhandicraftprojects.
b. Technology absorption
With regards to technological absorption, your Company undertook the virtual desktop implementation. It was decided
to move towards virtual desktop setup using Citrix, with four key goals viz. empower the user with an enhanced
personalized desktop experience, simplify administration, improve the economics of management and operations
and strengthen data security.
To ensure success, your Company has embraced three-step approach for virtual desktop implementation that
encompasses comprehensive pilot, proof-of-concept, and production phases based on solid governance structure
and support model.
Your Company has also received award from Citrix India for the best “Desktop Virtualization Implementation in India”
for year 2015.
( in lacs)`
Particulars FY 201 -1 FY 201 -15 6 4 5
Foreign exchange earnings and outgo
- Earnings Nil Nil
- Outgo 1,230.63 1,327.38
DIRECTORS’ RESPONSIBILITY STATEMENT
The directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper
explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of
the financial year and of the profit of your Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and
detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such
systems were adequate and operating effectively.
ACKNOWLEDGEMENT
The Board of directors would like to thank the Insurance Regulatory and Development Authority of India and other
Regulators for their continuous guidance and direction.
The Board is also grateful to the shareholders viz. Canara Bank, HSBC Insurance (Asia-Pacific) Holdings Limited and
Oriental Bank of Commerce for their contribution in supporting your Company’s strategies and business operations.
The directors would also like to thank the shareholder banks as distributors for their confidence in the Company’s product
and sales strategies.
The directors take this opportunity to thank all employees for their continuous hard work, dedication and commitment.
On behalf of the Board of directors
For CANARA HSBC ORIENTAL BANK OF COMMERCE LIFE INSURANCE COMPANY LIMITED
Rakesh Sharma Anuj Mathur
DIN : 06846594 DIN : 00584057
Date : 9 August 2016 Date : 9 August 2016 th th
Place : New Delhi Place : New Delhi
THE WINNING PACE OF PROGRESS
28
Annual Report on CSR Activities for the
Financial Year 2015-16 1) A brief outline of the Company's CSR policy, including overview of projects or programmes proposed to be undertaken and
a reference to the web-link to the CSR policy and projects or programmes.
Life insurance, our business is all about social security and protection aimed at the well-being of the society.
The Company is committed to 'giving back' to the society and has a comprehensive structured CSR programme.
As per the approach and philosophy of the CSR Policy, CSR efforts of the Company were channelized in three areas –
(mentioned in Schedule VII): Environment, Inclusive Growth through Education and Sanitation. To further these
objectives, the Company partnered with like minded trusts, societies and companies and also implemented projects
directly. The Company delivered thirteen projects in the last financial year.
Several initiatives were also launched to create awareness and educate employees, beneficiaries and the general
public on the need to conserve resources and protect the environment.
Web-link for the CSR Policy is stated herein below:
http://www.canarahsbclife.com/pdf/CSR_Policy_FY_2015_16.pdf
2) The Composition of the CSR Committee (as on 9 August 2016) th
Mr A K Bansal (Chairman), Independent Director
Mr B A Prabhakar, Independent Director
Mr Ian Moore, Director
Mr Dinabandhu Mohapatra, Director
Mr Anuj Mathur, Chief Executive Officer & Whole-time Director
3) Average net profit of the company for last three financial years
`64.2 Crore
4) Prescribed CSR Expenditure (two per cent of the amount as in item 3 above)
`1.28 Crore
5) Details of CSR budget spent during the financial year
(a) Total amount to be spent for the financial year: The Board approved an amount of 1.28 Crore for CSR projects`
during financial year 2015-16
ANNUAL REPORT 2015 - 16
30
S. CSR project or activity identified Sector in Projects or Amount Amount spent Cumulative Amount spent:
No. which the programs outlay on the projects expenditure Direct or
project is 1. Local areas (budget) or programs up to the through
covered or other project or ( lacs) reporting implementing`
2. Specify the programs Sub-heads: period ( lacs) agency* ( lacs)` `
state and wise ( lacs) 1) Direct`
district where expenditure
1 Project Madhuvan – Engagement Environment Other 12.54 12.64 12.64 12.64
with tribal communities for and vocational
sustainable management of forest training Madhya 1) 11.94
resources; adoption of improved Pradesh –
and sustainable harvesting protocols, Dindori 2) 0.69
better market linkages in 10 project Chattisgarh –
villages Mungeli
2 Project Saakaar – Employability Education and Local area 5.11 5.14 5.14 5.14
training in bedside patient care vocational
)and automobile repairing to training Bihar – Patna 1 4.87
75 youth from underprivileged
2)and economically backward 0.26
communities
3 Education and Local areaProject Ujjwal Bhawishya – 9.03 9.04 9.04 9.04
vocationalNon formal education to 110
training 1) 0children, skill training to 75 youth Delhi – Delhi (E) 8.6
) and adult literacy classes for 75
2 0.44 women, with formation of 2 SHGs
4 Education andProject Unnati – Vocational training Local area 8.92 8.97 8.97 8.97
vocational(stitching & tailoring) to 110-120
Gurgaon )
society
5 Education and Local area 0Project Saksham – Employability 6.3 6.42 6.42 6.42
vocationaltraining and market oriented job
training Maharashtra ) 0
Mumbai )economically backward sections 2 0.42
of the society
6 Education and Local areaProject Mahila Ajivika – 6.27 6.30 6.30 6.30
vocationalEmpowering 50 women from
Alwar )
vocational skills (tailoring and
embroidery)
7 Education Local areaProject Utkarsh – Education support 7.26 7.22 7.22 7.22
to 40 children residing in SOS
on Tamil Nadu )
Chennai )holistic development 2 0.34
8 Project Pragati – Empowering via Education and Local area 7.87 7.88 7.88 7.88
skill training for 50 rural women in vocational
dress designing and 40 beneficiaries training Karnataka – 1 7.50)
from economically backward Chikkaballapur
training Bangalore
(1) (2) (3) (4) (5) (6) (7) (8)
(c) Manner in which the amount spent during the financial year is detailed below:
ANNUAL REPORT 2015 - 16
31
9 Project Shakti – Empowering rural Education and Local area 7.59 7.65 7.65 7.65
women/women from underserved vocational
women in dress designing and 75
)women in beauty parlour Jaipur 2 0.42
management (Chomu Tehsil)
10 Project Jal Jeevan – Ensuring water Environment Local area 8.02 8.17 8.17 8.17
availability to the rural communities
)all year round by designing and Rajasthan 1 7.64
constructing a water conservation
villagers and creating water user (Phagi Tehsil)
groups for sustainability
0 0 0 011 Project Asha – Reach out to Education Local area 5.6 5.6 5.6 5.6
vulnerable children in the slums Delhi –
)
1 5.34schools equipped with technology District
based tools with the aim of gradually (Okhla Mandi)
mainstreaming them in formal
)schools Delhi – 2 0.26
Local area12 Project Swachhta – Implementing Sanitation 6.24 6.58 6.58 6.58
Hon’ble Prime Minister’s
)announcement for support and Haryana – 1 6.43
cooperation for harnessing CSR Gurgaon
a )for time bound “Swachh Vidyal ya" (Village Bilaspur 2 0.15
campaign and building toilets in Khurd)
needy schools
Dhaliawas)
31 Project Samarth – Create awareness Consumer Local area 37.22 37.74 37.74 37.74
on financial products amongst the Education
)consumers at large in order to Various areas 1 37.74
educate them and help them take in Delhi
)informed investment decisions and 2 Nil
protect themselves against possible Various districts
financial frauds in Andhra
32
2 Project Saakaar Aide Et Action
3 Project Ujjwal Bhawishya Amba Foundation
4 Project Unnati Navjyoti India Foundation
5 Project Saksham Smile Foundation
6 Project Mahila Ajivika Krishi Avam Paristhitiki Vikas Sansthan
7 Project Utkarsh SOS Children’s Villages of India
8 Project Pragati Canara Bank Centenary Rural Development Trust
9 Project Shakti Oriental Bank of Commerce Rural Development Trust
10 Project Jal Jeevan Advit Foundation
11 Project Asha Butterflies
12 Project Swachhta Company
13 Project Samarth Company
6) In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any part
thereof, the company shall provide the reasons for not spending the amount in its Board report.
Not applicable
7) A responsibility statement of the CSR Committee
The implementation and monitoring of the CSR Policy is in compliance with the CSR objectives and Policy of the
Company.
Chief Executive Officer & Whole-time Director Chairman, CSR Committee
DIN : 00584057 DIN : 06752578
Place : New Delhi Place : New Delhi
ANNUAL REPORT 2015 - 16
Company's Corporate Governance Philosophy
The Company defines Corporate Governance as a set of systems, processes and principles which ensure that a
company is governed in the best interest of all its stakeholders, internal as well as external. An efficient corporate
governance framework ensures:
• transparency in business transactions;
• protection of stakeholder interests;
• commitment to values and ethical conduct of business.
The Company believes that corporate governance is about upholding the highest standards of integrity and transparency,
which in turn leads to enhancement of stakeholders’ interests, including those of the policyholders, shareholders,
distributors and the society at large. Enhancement of stakeholders’ interest is the key to long-term sustainable growth.
The Company's corporate governance philosophy is based on the following principles:
• fairness and accountability in all processes and procedures;
• complying with the regulatory and legal requirements in true spirit;
• going beyond the law in upholding corporate governance standards;
• maintaining transparency and a high degree of disclosure levels;
• making a clear distinction between personal convenience and corporate resources;
• having a simple and transparent corporate structure driven solely by business needs;
• communicating externally in a truthful manner about how the company is run internally;
• embracing a trusteeship model in which the management is the trustee of the shareholders' capital and not the owner;
• enhancing stakeholder interests, without compromising of the ethical standards; and
• timely and relevant communication of information.
The Company has put in place a Corporate Governance Policy (Policy) in line with the IRDAI Corporate Governance
guidelines and requirements under the Companies Act, 2013. Policy ensures that the structure, responsibilities and
functions of Board of Directors and the senior management of the Company fully recognize the expectations of all
stakeholders, including policyholders, the Regulators and to ensure good governance practices.
The report on corporate governance, as required under the IRDAI Corporate Governance Guidelines and the Companies
Act, 2013 is as follows:
I. BOARD OF DIRECTORS
The Board of the Company is comprised as per the requirements of the Companies Act, 2013 and the IRDAI Corporate
Governance Guidelines (CG Guidelines). As on 31 March 2016, the Board consisted of 13 directors. The Chairman of the st
Board is a non-executive director and the Chief Executive Officer is the only executive director on the Board.
The directors on the Board come from diverse backgrounds and possess a wide range of relevant experience and skills.
None of the directors of the Company are related to each other.
Further details on the Board of directors of the Company and its functioning are as follows:
Corporate Governance Report Annexure B
THE WINNING PACE OF PROGRESS
34
a. Composition of Board as on 31 March 201 st
6
Name and position on the Board Qualifications and field of specialisation No. of directorships in
other companies*
Chairman & Non-Executive Director Banking
the Board of the Company with effect
from 28 October 2015) th
Mr P S Rawat B.Sc., CAIIB – Part 1 2
Non-Executive Director Banking
Non-Executive Director Banking
Ms P V Bharathi B.Sc., M.A (Economics), B.Ed., CAIIB, 3
Non-Executive Director Integrated course on Banking &
Finance – NIBM
Non-Executive Director
(appointed as an additional director with Finance, Strategy and Banking
effect from 14 January 2016) th
Mr Rajkiran Rai G B.Sc. (Agri) , CAIIB NIL
Non-Executive Director
effect from 8 February 2016) th
Mr Animesh Chauhan JAIIB, B.Com 1
Non-Executive Director Banking
Non-Executive Director Strategy, Planning and General
Management
Mr A K Bansal B.Sc. (Hons) Agri., M.Sc. (Agri.) 7
Independent Director and CAIIB – I
Banking and Finance
Independent Director Institute of Chartered Accountants
of England and Wales & Bachelor in
Economics
Finance
Independent Director Industrial Finance
Independent Director Banking and Finance
ANNUAL REPORT 2015 - 16
35
c. Details of Directors who ceased to be Directors after 31 March 2016 st
Name and position on the Board Date of cessation
Mr P S Rawat 31 May 2016 st
Non-Executive Director
Chief Executive Officer & General Management, Finance,
Whole-time Director Governance, Risk and Compliance
*For the purpose of calculation of no. of directorships, the directorships in section 8 companies, foreign companies and
alternate directorships have been excluded.
b. Details of Directors appointed after 31 March 2016 st
Name and position on the Board Qualifications and field of specialisation No. of directorships in
other companies*
Mr Dinabandhu Mohapatra M.A., LL.B., CAIIB, Diploma in Computer NIL
Non-Executive Director applications
with effect from )26 July 2016 th
*For the purpose of calculation of no. of directorships, the directorships in section 8 companies, foreign companies and
alternate directorships have been excluded.
d. Duties and responsibilities of the Board of Directors
The Company is a Board governed Company and the Board is the highest authority, under whose supervision, the
management is responsible for the day-to-day operations.
The Board provides the necessary guidance and direction for the functioning of the operations of the Company, with a
view to protect the best interest of all stakeholders. The Board regularly reviews the progress of various aspects of the
business of the Company and studies the impact of changing regulatory and economic environment in order to provide
the necessary advice and strategic path. The Board is also responsible for reviewing the risk strategy of the Company and
evaluating the risks and related mitigants in place.
In line with the provisions of Companies Act, 2013, the broad duties of Board of Directors broadly include:
• act in good faith and in the best interest of the company, employees, shareholders;
• exercise duties with due care and diligence and shall exercise independent judgment;
• avoid conflict of interest and not assign office;
• confirm that control systems for compliance with various laws exist in the Company.
In line with the IRDAI Corporate Governance Guidelines, the responsibilities of the Board of directors broadly include:
• Overall direction of the business, including projections on the capital requirements, revenue streams, expenses and
the profitability;
• Addressing conflicts of interest;
• Ensuring information sharing with and disclosures to various stakeholders, including investors, policyholders,
employees, regulators, etc.;
36
• Developing a corporate culture that recognizes and rewards adherence to ethical standards.
e. Board meetings
During financial year 2015-16, Board meetings were held in accordance with the provisions of the Companies Act, 2013,
IRDAI Corporate Governance Guidelines and Articles of Association of the Company. Six meetings were held in the
financial year 2015-16, with an interval of not more than one hundred and twenty days, between two consecutive
meetings.
The Board is provided with requisite information and detailed agenda papers for every meeting, together with necessary
supporting papers, as required. The Board papers along with detailed agenda notes are circulated to the directors well in
advance. As part of the information and agenda papers, following minimum information is provided to directors for each
meeting:
b. Financial performance review
d. Regulatory updates/ disclosures and compliance status
The Board regularly invites various officials of the Company to present updates on the different aspects of the business
and operations.
Details of Board meetings
During the financial year 2015-16, the Board meetings were held on 14 May 2015, 6 July 2015, 11 August 2015, th th th
24 November 2015, 9 February 2016 and 22 March 2016. th th nd
The details of attendance of the directors at the Board meetings held during the financial year 2015-16 are as follows:
Name of the Director No. of meetings
Held during tenure Board meetings attended
Mr Rakesh Sharma 3 3
(from 28 October 2015) th
Mr P S Rawat 6 5
Mr B Mahesh Kumar Singh 6 6
Ms P V Bharathi 6 5
Mr Ian Moore 2 2
(from 14 January 2016) th
Mr Rajkiran Rai G 2 2
(from 8 February 2016) th
Mr Animesh Chauhan 6 5
Mr Ravi Menon 6 6
Mr A K Bansal 6 6
Mr Sid Khanna 6 2
Mr R Krishnamurthy 6 4
Mr B A Prabhakar 6 6
ANNUAL REPORT 2015 - 16
II. Board Committees
The Board has constituted the following committees to delegate various functions and has approved the roles and
responsibilities of each of these Committees, with an objective to enable better and more focused attention on the affairs
of the business.
a. Audit Committee
The Audit Committee is responsible for reviewing and examining the Company’s interim and annual financial statements
to ensure that these are drawn in accordance with the principles of correctness and transparency. The Committee reviews
the auditors’ independence, effectiveness of audit process, internal financial controls and risk management systems and
internal audit investigations. The Committee also approves the related party transactions in the normal course of business
and on arm's length basis.
The Committee oversees financial reporting and disclosure process, procedures and processes regarding maintenance
of books of accounts and other matters having bearing on the financial position of the Company. The Appointed Actuary
also shares the valuation assumptions and brief of his annual report for each financial year with the Audit Committee.
The Audit Committee of the Board comprises of majority of independent directors with the Chairman being an
independent director as per the Companies Act, 2013 and IRDAI Corporate Governance Guidelines. The Chairman of
the Audit Committee is a chartered accountant. The Committee meets atleast four times a year with a gap of not more
than one hundred and twenty days between two consecutive meetings.
As on 31 March 201 , the Audit Committee comprised of the following members: st
6
Mr Suresh N Patel
2 November 2015) nd
S. No. Name Position
4 Mr Ian Moore Member
5 Mr R Krishnamurthy Member
6 Mr Sid Khanna Member
7 Mr A K Bansal Member
THE WINNING PACE OF PROGRESS
38
During the year under review, the Committee met on four occasions on 14 May 2015, 11 August 2015, 24 November th th th
2015 and 9 February 2016. The details of the membership of the Committee along with the attendance of the members th
in these meetings are given below:
Name Position held No. of meetings
Held during tenure Attended
Mr Marcelo Teixeira Member 3 3
(upto 3 December 2015) rd
Mr R Krishnamurthy Member 4 3
Mr Sid Khanna Member 4 3
Mr A K Bansal Member 4 4
Mr Suresh N Patel Member 1 1
(from 25 June 2015 to th
2 November 2015) nd
(from 8 February 2016) th
Mr Ian Moore Member 1 1
(from 14 January 2016) th
Mr B Mahesh Kumar Singh Member in place of Mr P S Rawat for 2 2
the Audit Committee meetings held on
14 May 2015 and 11 August 2015 th th
b. Board Risk Committee
The objective of the Committee is to review the risks across various processes. The primary function of the Committee is
to lay down the risk management framework and the risk and reward objectives in line with shareholder and policyholder
expectations.
The Committee also reports to the Board, the details of risk exposure and mitigation actions taken thereon and advises
the Board on the risk management decisions in relation to strategic matters. The Risk Committee also acts as the
Compliance Committee and discusses the level of compliance and associated risks, if any. The Risk Committee also
maintains a group-wide and aggregated view on the risk profile of the Company in addition to the solo and individual
risk profile.
The Committee reviews various risk, compliance and operational policies like Underwriting Policy, Conflict of Interest
Policy, Compliance Policy, Risk Policy, Anti-fraud Policy etc. and regularly discusses the various initiatives taken in the
development of products.
The terms of reference of the Board Risk Committee also include matters relating to asset liability management (ALM).
The Committee is responsible for reviewing the ALM strategy, monitoring of asset liability mismatch and acceptable
tolerance limits. It also reviews the solvency position of the Company on a regular basis.
The Chief Risk Officer of the Company reports directly to the Chief Executive Officer in order to maintain independence
and also has a reporting line to the Board Risk Committee. He regularly presents an update on the key risks and mitigation
strategies at every meeting of the Committee.
ANNUAL REPORT 2015 - 16
2 Mr P S Rawat Member
3 Mr Rajkiran Rai G Member
4 Mr R Krishnamurthy Member
5 Mr B A Prabhakar Member
6 Mr Sid Khanna Member
7 Mr Anuj Mathur Member
During the period under review, the Committee met on four occasions on 13 May 2015, 11 August 2015, th th
23 November 2015 and 9 February 2016. The details of the membership of the Committee along with the rd th
attendance of the members in the meetings are given below:
Name Position held No. of meetings
Held during tenure Attended
(upto 3 December 2015) rd
Mr Ian Moore Chairman 1 1
(from 14 January 2016) th
Mr P S Rawat Member 4 2
Mr R Krishnamurthy Member 4 3
Mr Suresh N Patel Member 1 1
(from 25 June 2015 to th
2 November 2015) nd
Mr Sid Khanna Member 4 2
Mr John Holden Member 1 1
(upto 30 June 2015) th
Mr Rajkiran Rai G Member 1 1
(from 8 February 2016) th
Mr Anuj Mathur Member 3 3
(from 1 July 2015) st
Mr Ravi Menon Member in place of Mr Marcelo 1 1
Teixeira for Board Risk Committee
meeting held on 23 November 2015 rd
Mr B Mahesh Kumar Singh Member in place of Mr P S Rawat for 2 2
Board Risk Committee meetings held
on 13 May 2015 and 11 August 2015 th th
As on 31 March 2016, the Board Risk Committee comprised of the following members: st
THE WINNING PACE OF PROGRESS
40
c. Investment Committee
The Investment Committee has been constituted in compliance with the IRDAI Investment Regulations and comprises
of three non-executive directors, the Chief Executive Officer, Chief Investment Officer, Chief Financial Officer, Appointed
Actuary and the Chief Risk Officer.
The Committee is responsible for review and implementation of the Investment Policy and empanelment of investment
intermediaries. The Committee is also responsible for establishing a robust investment compliance and risk management
framework to ensure that the returns are in line with the risk appetite of the funds offered by the Company. It also monitors
the performance of various funds in line with the established benchmarks and industry performance.
As on 31 March 201 , the Investment Committee comprised of the following members: st
6
Held during tenure Attended
(upto 30 June 2015) th
Mr Anuj Mathur Chairman 3 3
(from 1 July 2015 st
in the capacity of CEO)
Mr Anuj Mathur Member 1 1
(upto 30 June 2015 th
in the capacity of CFO)
Mr Marcelo Teixeira Member 3 3
(upto 3 December 2015) rd
Mr P S Rawat Member 4 2
Mr Chirag Rathod Member 3 2
(upto 12 January 2016) th
Ms Ritu Arora Member 4 4
S. No. Name Position
2 Mr P S Rawat Member
3 Mr Rajkiran Rai G Member
4 Mr Ian Moore Member
5 Mr Gaurav Seth Member
6 Ms Ritu Arora Member
7 Mr Akshay Dhand Member
8 Mr Sachin Dutta Member
During the period under review, the Committee met on four occasions on 14 May 2015, 11 August 2015, th th
24 November 2015 and 9 February 2016. The details of the membership of the Committee along with the th th
attendance of the members in the meetings are given below:
ANNUAL REPORT 2015 - 16
4 Mr Ian Moore Member
5 Mr Sid Khanna Member
6 Mr Anuj Mathur Member
d. Policyholder Protection Committee
The Committee is responsible to make recommendations on the approach, policies, processes and mechanisms in place,
to protect the interests of