INDIAN RAYON AND INDUSTRIES LIMITED - Aditya Birla Nuvo, Ltd

of the joint auditors. The Company will seek clarifications from the Insurance Regulatoryand Development Authority and comply with any such requirement for the next financialyear.MANAGEMENT REPORTIn accordance with Regulation 3 of the Insurance Regulatory and Development Authority(Preparation of Financial Statements and Auditors’ Report of Insurance Companies)Regulations, 2000, the Management Report forms a part of the financial statements.SOLVENCY MARGINThe Directors are pleased to report that the assets of the Company are higher than theliabilities of the Company and are also sufficient to meet the minimum solvency margin asspecified in Section 64 VA of the Insurance Act, 1938RURAL AND SOCIAL BUSINESSThe Company is required to transact business in the rural sectors of the Country. Similarly,the Company is required to transact business with customers in the social sector of theCountry. Both these segments have been defined in the Insurance Regulatory andDevelopment Authority Regulations. Being the first year of operations, the Company hadsought from the Insurance Regulatory and Development Authority and has been grantedan exemption from these requirements.The Company is firming up plans to meet and exceed these requirements in the futureyears as improving the quality of life of the people of India is one of the manifoldobjectives of the CompanyAUDIT COMMITTEEAs required by Section 292A of the Companies Act 1956, the Company has constituted anaudit committee consisting of the following directors:Mr BN Puranmalka, Mr SK Mitra, Mr Douglas Henck, and Mr Vijay SinghPARTICULARS OF EMPLOYEESTill March 31, 2001, employees of the Company were deputed from Birla GlobalFinance Ltd, one of the promoters of the Company. These employees are now theemployees of the Company from April 1, 2001. The particulars of employees, asrequired by Section 217 (2A) of the Companies Act 1956 are given in a separateAnnexure to this Report.APPOINTED ACTUARY’S CERTIFICATEI have valued the policy liabilities of Birla Sun Life Insurance Company Limited at 31stMarch, 2001, in accordance with accepted actuarial practice and in line with relevantprofessional guidance, including that covering the selection of appropriate assumptions.In my opinion, the amount of policy liabilities makes appropriate provision for allAUDITORS’ REPORT TO THE MEMBERS OFBIRLA SUN LIFE INSURANCE COMPANY LIMITEDWe have audited the attached Balance Sheet of BIRLA SUN LIFE INSURANCE COMPANY LIMITEDas at 31st March, 2001 and the Profit and Loss Account of the Company for the period from 4thAugust, 2000 (the date of incorporation) to 31st March, 2001 and report that:1. The balance sheet, revenue account and profit and loss account have been drawn up inaccordance with the Insurance Regulatory and Development Authority (Preparation ofFinancial Statements and Auditors’ Report of Insurance Companies) Regulation, 2000read with Section 211 of the Companies Act, 1956.2. (a) We have obtained all the information and explanations which, to the best of ourknowledge and belief were necessary for the purposes of our audit;(b) In our opinion, proper books of account as required by law have been maintained bythe Company so far as appears from our examination of those books;(c) The balance sheet, revenue account and profit and loss account referred to in this reportand the receipts and payments account are in agreement with the books of account;(d) The Company’s appointed actuary has certified the actuarial valuation of liabilities.The assumptions for such valuation are in accordance with the regulations issued bythe Insurance Regulatory and Development Authority.(e) On the basis of written representations received from the directors and taken onrecord by the board of directors, none of the directors is disqualifed, as on 31stMarch, 2001, from being appointed as a director in terms of clause (g) of sub-section(1) of Section 274 of the Companies Act, 1956.(f) In our opinion the balance sheet and profit and loss account referred to in this reportare in compliance with the Accounting Standards referred to in Section 211(3C) ofthe Companies Act, 1956 to the extent applicable to the Company.(g) In our opinion, investments have been valued in accordance with the provisions of theInsurance Act, 1938 and the Insurance Regulatory and Development Authority (Preparationof Financial Statements and Auditors’ Report of Insurance Companies) Regulations 2000.(h) In our opinion the accounting policies selected by the Company are appropriate and are incompliance with the applicable accounting standards and with the accounting principles,as prescribed in the Insurance Regulatory Development Authority (Preparation of FinancialStatements and Auditors’ Report of Insurance Companies) Regulations 2000 and ordersor directions issued by the Insurance Regulatory and Development Authority.66123DIRECTORS’ RESPONSIBILITY STATEMENTYour Directors report that,• The annual accounts have been prepared in accordance with applicable accountingstandards and there have been no material departures from the same;• The Company has selected accounting polices and applied them consistently and hasmade judgements and estimates that are reasonable and prudent and provide a trueand fair view of the state of affairs of the Company as on March 31, 2001 and of theloss for the period ended on March 31, 2001• Proper and sufficient care has been taken to maintain adequate accounting recordsand safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities• The accounts of the Company are prepared on a going concern basis. Other accountingpolicies are stated in the notes to the accounts which form an integral part of theannual accountsCONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGOINGSThe Company is not engaged in any manufacturing activity and therefore there are noparticulars to be disclosed under conservation of energy and absorption of technology of theCompanies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988.Further, the Company has had no foreign exchange earnings and outgo upto March 31, 2001.APPRECIATIONThe Board of Directors places on record the assistance of the personnel of the Aditya BirlaGroup and Sun Life Financial in the start up of operations of the Company. The Companyalso thanks the office bearers of the IRDA for their support during the registration process.The Directors’ specially wish to appreciate the untiring efforts put in by the employees inorder to get the venture up and running.Finally, the Directors wish to thank the first customers of the Company who have contributedto increasing the confidence of the Company in its product strategiesFor Birla Sun Life Insurance Company LimitedBN PuranmalkaPlace : MumbaiS K MitraDate : April 16th, 2001Directorpolicyholders’ obligations, and the financial statements fairly present the result ofthe valuation.PETER J. AKERSFellow of the Institute of ActuariesFellow of the Actuarial Society of India(i) We have reviewed the management report. There are no apparent mistakes or materialinconsistencies between the management report and the financial statements.(j) According to the information and explanations given to us and to the best of ourknowledge and belief, the Company has complied with the terms and conditions ofthe registration stipulated by the Insurance Regulatory Development Authority.(k) We have verified the cash balances and securities relating to the Company’s investments.(l) According to the information and explanations given to us, and to the best of ourknowledge and belief, the Company is not the trustee of any trust.(m) According to the information and explanations given to us and to the best of ourknowledge and belief, no part of the assets of the policyholder’s funds have been directlyor indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of1938) relating to the application and investments of the policyholders funds.3. The Insurance Regulatory and Development Authority appears to require the financial statementsof the Company to be subject to a joint audit. The Company has not appointed joint auditors, isinvestigating this recent development and will comply with the requirements, if any.4. Subject to our comments in paragraph 3 above in our opinion and to the best of our informationand according to the explanations given to us, the said accounts are prepared in accordancewith the requirements of the Insurance Act, 1938 (4 of 1938), the Insurance Regulatory andDevelopment Act, 1999 (41 of 1999) and the Companies Act, 1956 (1 of 1956), to the extentapplicable and in the manner so required and give a true and fair view :(a) in case of the balance sheet of the state of affairs of the Company as at 31st March,2001; and(b) in the case of the revenue account of the surplus for the period from 4th August,2000 to 31st March, 2001; and(c) in case of the profit and loss account of the loss for the period from 4th August, 2000to 31st March, 20001; and(d) in case of the receipts and payments account, of the receips and payments for theperiod from 4th August, 2000 to 31st March, 2001.For S. B. Billimoria & Co.Chartered AccountantsSANJIV SHAHMumbai, 16th April, 2001Partner