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HDFC ERGO GENERAL
INSURANCE COMPANY
LIMITED
A Subsidiary of Housing Development Finance Corporation Limited
Fourteenth Annual Report 2020-2021
Fourteenth Annual Report 2020-21
Board of Directors Mr. Ritesh Kumar
Mr. Deepak S. Parekh Managing Director & CEO
Chairman (DIN: 02213019)
(DIN: 00009078)
Directors Company Secretary
Mr. Keki M. Mistry Mr. Dayananda V. Shetty
(DIN: 00008886) Membership No.: FCS 4638
Ms. Renu Sud Karnad
(DIN: 00008064) Auditors
Dr. Oliver Martin Willmes G. M. Kapadia & Co.
(DIN: 08876420) Chartered Accountants
(w.e.f October 12, 2020) B. K. Khare & Co.
Mr. Alexander Ankel Chartered Accountants
(DIN: 07798908)
(upto October 11, 2020)
Dr. Clemens Matthias Muth Banker
(DIN: 07824451) HDFC Bank Ltd.
(w.e.f October 12, 2020)
Mr. Theodoros Kokkalas Debenture Trustee
(DIN: 08093899) IDBI Trusteeship Services Limited
(upto October 11, 2020) Asian Building, Ground Floor,
Mr. Bernhard Steinruecke 17, R. Kamani Marg, Ballard Estate,
(DIN: 01122939) Mumbai – 400 001
Tel. No: +91 22 40807062
Mr. Mehernosh B. Kapadia Fax No: +91 22 22882312
(DIN: 00046612) Axis Trustee Services Limited
Mr. Arvind Mahajan 2nd Floor, Axis Bank Limited, Plot No. 25,
(DIN: 07553144) Pusa Road, Karol Bagh, New Delhi – 110005
Mr. Ameet P.Hariani
(DIN: 00087866)
Mr. Samir H. Shah Registered & Corporate Office
Executive Director & CFO HDFC House, 1st Floor,
(DIN: 08114828) 165-166, Backbay Reclamation,
H. T. Parekh Marg, Churchgate,
Mr. Anuj Tyagi Mumbai-400 020.
Executive Director & CBO Website: www.hdfcergo.com
Upto April 19, 2021) E-mail: care@hdfcergo.com
(DIN: 07505313) Tel. No: +91 22 66383600
Deputy Managing Director CIN: U66030MH2007PLC177117
(w.e.f April 20, 2021) IRDAI Reg. No. 146
450
HDFC ERGO General Insurance Company Limited
Directors’ Report
TO THE MEMBERS Performance
Your Directors are pleased to present the Fourteenth The Gross Written Premium (GWP) of the Company
Annual Report of your Company together with the increased to ` 12,443.9 crore (PY: ` 9,760.1 crore).
audited financial statements for the financial year ended The Net Earned Premium increased to ` 6,405.6 crore
on March 31, 2021. The merger of HDFC ERGO Health (PY: ` 4,450.4 crore). The Company achieved a Profit
Insurance Limited (HEHI) with the Company was effective before Tax of ` 791.8 crore (PY: ` 459.0 crore) after
from November 13, 2020 with Appointed Date as March providing for diminution in the value of investments and
1, 2020. Accordingly, the financial results for FY 2020- write-off of Bad and Doubtful Investments amounting to
21 are for the merged entity. ` 31.2 crore (PY: ` 21.7 crore). The Profit after Tax for the
Financial Results (` in crore) year is ` 591.7 crore (PY: ` 326.9 crore).
Particulars Year ended Year ended Dividend
March 31, 2021 March 31, 2020*
Gross Written Premium 12,443.9 9,760.1 The Board of Directors had approved the payment of an
Net Written Premium 6,504.3 4,866.9 interim dividend of ` 3 per equity share of ` 10 each for
Net Earned Premium 6,405.6 4,450.4 the financial year 2020-21 in March 2021. During FY20,
Other Income/Liabilities 7.4 4.8 the Company did not pay any dividend in view of advice
written back from IRDAI to all insurers to refrain from dividend pay-
Net Incurred Claims 4,852.0 3,524.1 outs in view of COVID-19 pandemic. No amount is lying
Net Commission (198.3) (211.9) in the unpaid dividend account.
(Income)/ Expenses No final dividend was recommended by the Board.
Expenses of Management 2,080.8 1,543.6 Increase in Paid-up Share capital
Investment Income – 958.5 734.9
Policyholders During the year, the Company allotted 3,45,651 equity
General Insurance Result 636.9 334.3 shares of ` 10 each pursuant to exercise of stock options
Investment Income – 186.0 146.4 under Employees Stock Option Plan-2009 (ESOP-2009).
Shareholders Further, in terms of the Scheme of Amalgamation of
Profit before Tax - Before 822.9 480.7 HEHI with the Company, 10,53,77,232 equity shares of
providing for diminution ` 10 each were allotted to the shareholders of HEHI on
in value of investments November 13, 2020.
& write-off of Bad and The Paid-up equity share capital of the Company has
Doubtful Investments increased to ` 711.6 crore as on March 31, 2021 from
Provision towards 31.2 21.7 ` 605.8 crore as on March 31, 2020 and the Share
diminution in value of Premium Account increased to ` 1,401.3 crore as on
investments & write- off March 31, 2021 from ` 1,395.8 crore as on March 31,
of Bad and Doubtful 2020.
Investments
Profit before Tax - After 791.8 459.0 Non-Convertible Debentures
providing for diminution As at March 31, 2021, the Company’s outstanding Non-
in value of investments Convertible Debentures (NCDs) stood at ` 504.00 crore
& write-off of Bad and consisting of:
Doubtful Investments i. 3,500 Unsecured, Subordinated, Fully Paid-up,
Provision for Tax 200.1 103.6 Listed, Redeemable NCDs of the face value of
MAT Credit Written Off - 28.4 ` 10,00,000 each, with a coupon of 7.60% per
Profit after Tax 591.7 326.9 annum allotted on November 9, 2016 and are
Interim Dividend 213.5 - redeemable on November 9, 2026.
Transfer to Debenture - 2.4 The NCDs are rated by CRISIL and ICRA and were
Redemption Reserve assigned the highest rating of CRISIL AAA/Stable
Profit carried to Balance and ICRA AAA/Stable respectively;
Sheet 378.2 324.5
Credit balance in P & L 778.4 832.0 ii. 800 Unsecured, Subordinated, Fully Paid-up,
account at the year end Listed, Redeemable NCDs of the face value of
*Comprises of financial results of the Company for ` 10,00,000 each, with a coupon of 8.40% per
the period of 12 months and 1 month of HEHI as the annum allotted on September 18, 2017 and
Appointed Date for merger was March 1, 2020. redeemable on September 17, 2027;
451
Fourteenth Annual Report 2020-21
iii. 740 Unsecured, Subordinated, Fully Paid-up, Listed, Number of meetings of the Board
Redeemable NCDs of the face value of ` 10,00,000 During the year, the Board met seven (7) times on
each, with a coupon of 10.25% per annum allotted May 8, 2020, June 12, 2020, July 22, 2020, October
on September 18, 2018 and redeemable on 21, 2020, November 13, 2020, January 21, 2021 and
September 17, 2028. March 3, 2021.
The above two NCDs are rated by CRISIL, CARE, Acuité The details of attendance of the Directors at the Board
and ICRA and were assigned the highest rating of CRISIL and Committee meetings are provided in the Report of
AAA/Stable, CARE AAA/Stable, Acuité AAA/Stable and the Directors on Corporate Governance.
ICRA AAA/Stable respectively. Policy on Director’s appointment and remuneration
All the above NCDs are listed on the Whole Sale Debt The Company has in place a Board approved Policy
Market Segment of BSE Limited. on Appointment of Directors and Members of Senior
The Company has been regular in servicing its interest Management and other Employees (Appointment
towards NCDs. Policy) and Remuneration Policy for the Directors, Key
Managerial Personnel (KMPs), Senior Management and
Debenture Redemption Reserve other Employees (Remuneration Policy).
In accordance with the provisions of Section 71 of the The objective of the Appointment Policy is inter-alia
Companies Act, 2013 (‘Act’) read with Rule 18 of the to provide a framework and set standards for the
Companies (Share Capital and Debentures) Rules, 2014, appointment of high quality directors who should have
the Company was transferring amounts to the Debenture the capacity and ability to lead the Company towards
Redemption Reserve (DRR) from its profit till the quarter achieving its stated goals and strategic objectives,
ended June 30, 2019. taking into account the interest of all stakeholders
In terms of the Companies (Share Capital and Debenture) including shareholders, policyholders, channel partners
Amendment Rules, 2019 issued by the Ministry of and employees.
Corporate Affairs (MCA) vide its notification dated August The objective of the Remuneration Policy is inter-alia to
16, 2019, DRR is not required to be created by listed ensure that (i) the level and composition of remuneration
companies in case of privately placed debentures. In is in line with other companies in the industry, sufficient
view of the same, the Company has stopped creating to attract and retain right talent at all levels and keep
DRR w.e.f quarter ended September 30, 2019. them motivated enough to meet the organizational
objectives; (ii) a reasonable balance is maintained in
By an amendment to the Companies (Specification of the composition of remuneration (fixed and variable
definitions details) Rules, 2014, MCA vide its notification component); (iii) to have performance measurement
dated February 19, 2021 has clarified that, public parameters in place to assess the overall performance of
companies which have not listed their equity shares on Directors, KMPs, Members of Senior Management and
a recognized stock exchange but have listed their non- other employees; and (iv) the remuneration of Whole-
convertible debt securities issued on private placement time Directors including Managing Director & CEO, is
basis in terms of SEBI (Issue and Listing of Debt fixed keeping in perspective the various risks including
Securities) Regulation, 2008 shall not be considered as their time horizon and that such remuneration reflects
a listed company w.e.f April 1, 2021. the performance of the Company measured against
Accordingly, the Company will not be categorized as performance objectives including risk outcomes.
a listed company under the Act and consequently, in The said Policies are available on the website of the
terms of Rule 18(7)(b)(iv)(B) of the Companies (Share Company (www.hdfcergo.com).
Capital and Debentures) Rules, 2014 as amended, Comments on Auditor’s Report
the Company has to create DRR of 10% of value of Neither the Secretarial Auditor nor the Joint Statutory
outstanding debentures, w.e.f April 1, 2021. Auditors have made any qualification, reservation or
As at March 31, 2021, the balance in DRR stands at adverse remark or disclaimer in their reports. The reports
` 35.6 crore. of the Secretarial Auditor and the Joint Statutory Auditors
are appended to this Report.
Extract of Annual Return Further, during the year under review, the Joint Statutory
The extract of the Annual Return in prescribed Auditors have not come across or reported any incident
Form MGT- 9 is available on the website of the Company of fraud to the Audit and Compliance Committee of
(www.hdfcergo.com). Directors.
452
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