Docstoc

AR 2009-2010

Document Sample
AR 2009-2010 Powered By Docstoc
					                                                                                       Agriculture Insurance Company of India Limited




                                                                               2009-2010
                                                                                                             Annual Report
                                                                                                        stability t
                                                                                                    ial             or
                                                                                               a nc                    u




                                                                                          in




                                                                                                                       ra
                                                                                    gf




                                                                                                                           l in
                                                                               B r i ng i n




                                                                                                                             d ia
Agriculture Insurance Company of India Limited
13th Floor, Ambadeep Building, 14, Kasturba Gandhi Marg, New Delhi - 110 001
                 Ph.: 91-11-46869800, Fax: 91-11-46869815
                        Email : aicho@aicofindia.com
                       Website : www.aicofindia.com
Crop Insurance Awareness Programme graced by the          Meeting of farmers conducted by AIC officials in
Hon’ble Chief Minister of J&K, The Hon’ble Agriculture    Sabarkantha district of Gujarat in a modern agri-risk
Minister of J&K, in the presence of our CMD               village adopted by AIC




The Hon’ble Agriculture Minister of West Bengal seen      The Hon’ble CM of Madhya Pradesh seen receiving
inaugurating NAIS workshop organized by AIC               claim cheque on behalf of farmers from our CMD




The then Hon’ble Chief Minister of Andhra Pradesh and     Our Regional Manager seen interacting with Deputy
the then Hon’ble Agriculture Minister of Andhra Pradesh   Governor of RBI on the occasion of his visit to our stall in
seen receiving claim cheque on behalf of farmers from     the Financial Outreach Camp organized by RBI in
our CMD                                                   Kamrup district of Assam
A   n   n    u      a   l   R   e   p   o   r       t   2   0   0   9   - 10




                                    CONTENTS

Directors and Management                                                        2

Board of Directors                                                              3

Senior Management Team                                                          4

Team of Regional Managers                                                       5

Chairman’s Speech                                                               6

From the General Manager                                                        9

C & AG Report                                                                  10

Auditors’ Report                                                               11

Directors’ Report                                                              20

Management Report                                                              45

Revenue Account                                                                47

Profit & Loss Account                                                          48

Balance Sheet                                                                  50

Schedules to the Accounts                                                      51

Significant Accounting Policies and Notes Forming Part of Accounts             60

Summary of Financial Statements                                                80

Summary of Accounting Ratios                                                   81

Cash Flow Statement                                                            82

Addendum attached to & forming part of Annual Accounts for 2009-10             83




                                                1
              Agriculture Insurance Company of India Limited



              DIRECTORS AND MANAGEMENT

                          Chairman-cum-Managing Director
                                       Mr. M. Parshad


                                         Directors
Mr. R.K. Tiwari              Mr. Mukesh Khullar                 Mr. Tarun Bajaj
Mr. K.N. Bhandari            Ms. Bhagyam Ramani                 Mr. S.K. Mitra
Mr. I.S. Phukela             Mr. S.K. Chanana                   Mr. P. C. James

                                   General Manager
                                       Mr. R.P. Samal


                              Deputy General Managers

                    Mr. R. Alagar                       Mr. K.N. Rao
                    Mr. M.K. Poddar                     Mr. Avinanda Ghosh
                    Mr. P. Nagarjuna                    Mr. Rajiv Chaudhary



                                  Appointed Actuary
                                  Mr. S. Chidambram

                                 Company Secretary
                              Ms. Kanika Sharma Shandil

                                         Auditors
                      M/s Kishore & Kishore, Chartered Accountants
                       M/s Gupta & Gupta, Chartered Accountants

                                   Registered Office
                                “Ambadeep” (13th Floor)
                      14, Kasturba Gandhi Marg, New Delhi-110001
                       Phone : 011-46869800, Fax : 011-46869815




                                             2
A     n     n     u     a     l     R    e    p    o    r       t     2    0   0    9      - 10



                                    BOARD OF DIRECTORS




                                                 Mr. M. Parshad
                                         Chairman-Cum-Managing Director




                       Mr. R.K. Tiwari            Mr. Mukesh Khullar                     Mr. Tarun Bajaj
                       JS, GOI, MoA                  JS, GOI, MoA                         JS, GOI, MoF




      Mr. Lalit Kumar*              Mr. K.N. Bhandari           Mrs. Bhagyam Ramani                Mr. S.K. Mitra
    Director Ins MoF GOI               Director AIC              Director & GM, GIC                ED NABARD




      Mr. Sujit Das #                Mr. I.S. Phukela               Mr. S.K. Chanana              Mr. P.C. James
       Ex GM NIC                         GM, NIA                    Director & GM, OIC               GM, UIIC

*    Tenure expired on 03.01.2010
#    Retired on 31.12.2009


                                                            3
               Agriculture Insurance Company of India Limited



                      SENIOR MANAGEMENT TEAM




                                        Mr. R.P. Samal
                                       General Manager




    Mr. R. Alagar                         Mr. K.N. Rao                           Mr. M.K. Poddar
Dy. General Manager                   Dy. General Manager                      Dy. General Manager




                Mr. Avinanda Ghosh                       Mr. Rajiv Chaudhary
                Dy. General Manager                      Dy. General Manager




                                              4
A   n   n    u       a   l      R     e    p    o   r       t      2    0    0   9      - 10



                 TEAM OF REGIONAL MANAGERS




                             Mr. P. Nagarjun                           Dr. M. Datta Gupta
                               Hyderabad                                    Lucknow




               Mr. N. Sugumar                   Mr. D.G. Halve                   Mr. B.S. Rahul
                  Bangalore                        Mumbai                            Jaipur




     Mr. D. Singh                Mr. C. Anbarasu                Mr. Ch. B.N. Praharaj       Mr. K.K. Badgaiyan
       Kolkata                       Chennai                           Raipur                     Bhopal




    Mr. S. Patnaik               Mr. Anupam Das                  Mr. K.K. Mohapatra          Mr. M.R. Makwana
    Bhubhneshwar                      Ranchi                            Patna               Thiruvananthapuram




Mr. Pushkar Priyadarshi             Mr. D. Rajesh                  Mr. D.D. Dange             Mr. Kirti Behra
       Dehradun                      Chandigarh                     Ahmedabad                   Guwahati



                                                        5
                  Agriculture Insurance Company of India Limited




                              CHAIRMAN'S SPEECH




Dear Shareholders
I have great pleasure in extending a warm welcome to all of you to the Seventh Annual General Meeting of your
Company. I thank you all for your continued trust, encouragement and support to the Company. The Directors'
Report, Auditor's Report and Audited Annual Accounts with the notes thereon for the financial year 2009-10 are
in your hands. With your consent, I shall take them as read.
This year 2009-10 is of special significance in the history of your Company as the Gross Direct Premium (GDP)
during 2009-10 has touched 4-digit figure and closed at Rs. 1520.40 crore, as against Rs. 833.44 crore during
the previous year, registering an accretion of Rs.686.96 crore, the Growth Rate being 82.42%. GDP comprises
of NAIS Premium of Rs.1157.32 crore and non-NAIS Premium of Rs. 363.08 crore. Out of non-NAIS GDP of Rs.
363.08 crore, the Company's Net Retention is Rs 111.18 crore (30.62%), as against the Net Retention of 21.67%
during 2009-10. The Net Premium (Net of Reinsurance) during 2009-10 is Rs.1268.51 crore, as against Rs.
776.53 crore during the previous year. Due to this huge accretion in net premium by Rs. 491.98 crore during
2009-10, the Reserve for the Unexpired Risk @ 50% of the Net Premium being the statutory requirement, has
been topped-up by Rs. 245.99 crore, as against release of RUR to the extent of Rs. 33.92 crore during 2008-09.
Gross Incurred Claims during 2009-10 being Rs. 1402.42 crore have resulted in Incurred Claims Ratio of 92.20%
(NAIS 94.37 % & non-NAIS 85.43 %), as against Rs.572.98 crore (68.75%) during the previous year. Management
Expenses during 2009-10 are Rs.20.24 crore (1.33%), as against Rs 15.88 crore (1.91%) during the previous
year ending 31.03.2009. Investment portfolio of the Company as on 31st March, 2010 stands at Rs. 2369.44
crore, as against Rs.1974.69 crore as on 31.03.2009. The Investment Income during 2009-10 is Rs.184.74
crore (rate of return being 9.37%), as against Rs.154.90 crore (9.32%) during the previous year. The Net Worth
of your Company as on 31st March, 2010 is Rs. 765.78 crore, as against Rs. 732.37 crore as on 31st March,
2009. Solvency Margin as on 31st March 2010 being 1: 2.07 (Previous year 1: 4.58), complies with the statutory
requirement of 1:1.5.
The company had insured 239.22 lakh farmers and 337.52 lakh hectares under National Agricultural Insurance
Scheme during year 2009-10 (Kharif 2009 + Rabi 2009-10). Both Manipur and Mizoram had participated in
Kharif 2009 but the Scheme somehow could not be implemented in Manipur in Rabi 2009-10.




                                                      6
A    n     n     u     a    l     R     e     p     o    r       t   2    0     0    9     - 10


Your Company continued Pilot WBCIS in Kharif 2009, and was implemented in 13 states covering over 11 lakh
farmers and 14.5 lakh hectares of cropped area with Sum Insured of about Rs. 1980 crore for a gross premium
of about Rs. 198 crore. Continuance of pilot WBCIS during Rabi 2009-10 is marked by entry of private insurance
companies and this was for the first time, that the private insurance companies were allowed by the Government
to operate for Loanee farmers as well. WBCIS during Rabi 2009-10 has covered 11 States, viz. Bihar, Jharkhand,
Karnataka, Tamilnadu, Kerala, Rajasthan, Himachal Pradesh, Haryana, Madhya Pradesh, West Bengal and
Andhra Pradesh, whereby the Company has covered around 8 lakh farmers covering 12 lakh hectares for a sum
insured of Rs. 2,000 crore with total estimated premium of Rs. 175 crore. Your Company has also received
approval from the Ministry of Agriculture for the Coconut Palm Insurance, designed at the instance of Coconut
Development Board (CDB), covering death / loss of coconut bearing palms. This pilot supported by CDB is
piloted in about 20 districts spread over Andhra Pradesh, Goa, Karnataka, Kerala, Maharashtra, Orissa and
Tamilnadu, wherein, CDB provides 50% subsidy in premium, while the concerned State to the extent of 25%,
leaving the grower to pay the balance 25% of the Premium.
Your Company has also received the administrative instructions from the Government of India on 17th September
2010 for implementing the Modified National Agricultural Insurance Scheme (MNAIS) as a pilot to be implemented
in 50 districts during Rabi 2010-11. Pilot MNAIS has been introduced as a follow up of review of the existing NAIS
which was introduced during Rabi 1999-2000 with following major improvements in the pilot MNAIS over NAIS:
1.       Premium rates chargeable under MNAIS are actuarial, supported by up-front subsidy in premium. Insurer
         is responsible for the claims liabilities, with a proviso that the Government will act as 'reinsurer of the last
         resort' if the claim ratio exceeds 500%;
2.       Insurance unit for major crops is village / village panchayat or any other equivalent unit;
3.       Prevented sowing / planting risks and post harvest losses are covered;
4.       Individual farm level assessment of losses is done in case of localized calamities, like hailstorm and
         landslide;
5.       On-account payment up to 25% of likely claim is to be released as advance, for providing immediate
         relief to farmers in case of severe calamities;
6.       Threshold yield is based on average yield of past seven years, excluding up to two years if declared
         natural calamity by the concerned agency of the State; and
7.       Minimum indemnity level of 70% is available (instead of 60% as in NAIS).
Your Company is in touch with all the States identified for implementation of MNAIS and will finalize the same by
the end of December 2010. The pilot is expected to be implemented in 30 districts during Rabi 2010-11
covering a sum insured of Rs. 1000 crore, with an estimated premium of Rs. 60 crore. The reinsurance
arrangement would be in the domestic and international markets on the similar lines as of WBCIS, and in case
'quota share' arrangements are not available, the Company would be seeking only 'stop loss' protection.
Going by the solvency and the rate of claims settlement, the company's credit worthiness is getting stronger. On
the marketing side, we being a public sector company and the schemes operated being government sponsored,
the company faces limited market risk at present.
The Company's solvency margin remains comfortable but at times it fluctuates. This seems not unusual in the
type of business operated by the company and is mainly due to the fluctuations in the volume of business from
year to year. With a strong reserving policy and the growing shareholder's fund the solvency position is well
above the minimum prescribed limit.
Your Company has in place a system of registering complaints, redressing the same at all offices. Most complaints
are either not directly applicable to the company or originating from lack of knowledge of the contract terms.
The administrative expenses of the Company have been kept at the bare minimum. Being an implementer of the
government driven benefit schemes the Company's role for a major portion of its business is that of managing
the Scheme. However, under WBCIS the Company charges actuarial rates and the pricing mechanism has
been strengthened with assistance and guidance form the World Bank. The current methodology in place for
reserves is robust. Its continuance is recommended because the company is embarking on a change over from
NAIS to MNAIS and is bound to write more and more actuarially priced business.
Risk is inherent in the insurance business and sound risk management is critical to any Company's success.
Risk Management is not a defense mechanism in the lexicon of insuring, but is a very competitive advantage.
Your Company continued to implement and improve policies and procedures to identify, monitor, and manage



                                                             7
                   Agriculture Insurance Company of India Limited


risks across the Company. A separate Integrated Risk Management Committee has been set-up to frame risk
management control measures and to implement the same.
The reinsurance arrangements are made in accordance with program approved by the Board. Your company
has managed to complete the placements without much of difficulty. Your Company is also in the process of
developing a skilled team that can evaluate the risk and appropriately price the products. Risk Officer has also
been nominated to capture the risk profile and put it into a format suitable for review and analysis by the Board
sub-Committee appointed for the purpose.
Systematic efforts were initiated by the Company during the year to upgrade technology. Your Company has embarked
on an end-to-end IT Solutions Project implementation so that all repetitive work now being done is eliminated and
proper control on data and monitoring of accounts on day to day basis is possible in a more efficient manner.
Your Company has also approved Performance Linked Incentive Scheme for its employees and will be
implemented from financial year 2010-11. Your Company has also revised the pay scales, other terms and
conditions of service of employees/officers on the lines as notified by the Department of Financial Services,
Ministry of Finance, Govt. of India, vide Notification dated 8th October, 2010 in respect of GIC/GIPSA Companies
for Class I Officers and Supervisory, Clerical & Subordinate Staff with effect from 1st August, 2007 and the
Company to released arrears of pay to employees/officers for the period from 01.08.2007 to 30.10.2010 and
salary for the month of November 2010.
Let me now turn to the specific efforts made by your Management to draw lessons from the challenges of the last
year, improve governance and ensure increased focus on the opportunities. Towards this, we have adopted
more comprehensive corporate governance to ensure focus on execution with greater emphasis on robust
systems, processes and risk management. Defined strategy for better implementation of Government Insurance
Schemes / In-house insurance products, new propositions to expedite claim payments, cost effective marketing
plans for better spread of insurance umbrella among farming community, expansion of infrastructure to spread
reach of Company in few States and addition of work force to serve better. The Company has not outsourced
any of its core business functions. Your Company has formulated its own:-
1         Underwriting Policy
2         Investment Policy
3         Grievance Redressal Policy
4         Reinsurance Management through annual programme
5         Budgetary Control through annual budget exercise
6         Publicity and Awareness Programme
7         Accounting Manual
Your Company is discharging its control functions through its Board & through the various below named
Committees constituted by the Board for more focused and better regulation:-
1         Audit Committee
2         Investment Committee
3         Risk Management Committee
4         Policyholders Protection Committee
5         Personnel Committee
6         Ethics Committee
7         Remuneration Committee
8         Information Technology Committee
The Leadership Award 2009 instituted by the prestigious magazine 'Agriculture Today' was received by your
Company from Dr. Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, in a function organized in
Delhi on 5th September 2009.
The stellar performance has been made possible because of the support and encouragement from Central and
State Governments, Bankers, Financial Institutions, Investors and Shareholders. The Company seeks their
continued support to take it to greater heights.
I also greatly value the collective efforts of the entire AIC Team and the contribution and involvement of my
colleagues on the Board and thank them.
Thanks.



                                                       8
A    n     n    u    a     l     R    e     p    o    r       t   2   0     0    9    - 10




                           From The General Manager




                                Magic of Weather Insurance
The scientists have given a feverish statement that the global temperature has gone up by 0.74 degree celsius
during last 100 years. The 10 warmest years globally since 1880 have shockingly descended on earth during
last 13 years. Because of the infidelity committed by chemical industries, smelter plants and coal consuming
power plants by emitting unbearable heat and obscene quantity of suffocating materials, mother nature is in no
mood to be calm and kind. Under such circumstances weather insurance is a life saving device for poor farmers.
It can compensate them against the wrath of the weather and can reduce their financial worries, generate
income for the broker; and can take the footprints of the Crop Insurance Industry into remotest corner of the
country.
Battling odd is nothing new to the poor farmers of India but it is good to see them smiling and looking optimistic.
His share of mere two and half percent premium is an offer no farmers can afford to refuse because having paid,
adverse weather can no more spell doom in their lives. They no longer have to look heavenwards in despair.
There is some poetic flavour in this insurance device that softly echoes Shelley's famous lines, 'if winter comes
can spring be far behind', with weather insurance cover, certainly not if every farmer is having weather insurance
cover. Let me therefore call upon our marketing team to take this blissful mesage of weather insurance to the
poorest of the poor farmers in our country and have their crops insured to ensure a stable future in their lives.


                                                                                         R.P. Samal
                                                                                       General Manager




                                                          9
                   Agriculture Insurance Company of India Limited


COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF
THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF AGRICULTURE INSURANCE COMPANY OF INDIA
LIMITED, NEW DELHI FOR THE YEAR ENDED 31 MARCH 2010

The preparation of financial statements of Agriculture Insurance Company of India Limited, New Delhi for the
year ended 31 March, 2010 in accordance with the financial reporting framework prescribed under the Insurance
Act, 1938 read with the Insurance Regulatory and Development Authority (Preparation of Financial Statements
and Auditor’s Report of Insurance Companies) Regulations, 2002 and the Companies Act, 1956 is the responsibility
of the Management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General
of India under Section 619(2) of the Companies Act, 1956 are responsible for expressing opinion on these
financial statements under Section 227 or the Companies Act, 1956 based on independent audit in accordance
with the auditing and assurance standards prescribed by their professional body, the Institute of Chartered
Accountants of India. This is stated to have been done by them vide their Audit Reports dated 09 September,
2010 and 13 September 2010.

I, on behalf of the Comptroller and Auditors General of India, have conducted a supplementary audit under
section 619(3)(b) of the Companies Act, 1956 of the financial statements of Agriculture Insurance Company of
India Limited, New Delhi for the year ended 31 March 2010. This supplementary audit has been carried out
independentaly without access of the working papers of the Statutory Auditors and is limited primarily to the
inquiries of the Statutory Auditors and Company personal and a selective examination of some of the accounting
records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any
comment upon or supplement to the Auditors’ Report under section 619(4) of the Companies Act, 1956.


                                                                                   For and on behalf of the
                                                                   Comptroller and Auditor General of India


                                                                                               (Naina A Kumar)
                                                                        Principal Director of Commercial Audit)
                                                                          & Ex-officio, Member, Audit Board-II,
                                                                                                     New Delhi.
Place : New Delhi
Date : 27-10-2010




                                                      10
A     n      n     u     a      l     R      e     p     o     r      t     2     0     0     9     - 10



Gupta & Gupta
                                       AUDITORS’ REPORT
Chartered Accountants,
4/8, Asaf Ali Road, New Delhi
Separate Audit Report on the Accounts of Agriculture Insurance Company of India Limited for the year ended 31st March, 2010

To the Members of
AGRICULTURE INSURANCE COMPANY OF INDIA LIMITED
1.        We have audited, as per allocation of work by the management, the attached Balance Sheet of
          AGRICULTURE INSURANCE COMPANY OF INDIA LIMITED as at 31st March 2010, the annexed
          Miscellaneous Insurance Revenue Account of Crop Insurance and Profit and Loss Account and Cash
          Flow Statement for the year ended on that date in which are incorporated initialed trial balances of
          seventeen Regional Offices audited by the other auditors appointed by the Comptroller & Auditor General
          of India, covering major and material portion of the Financial Information which inter alia account for
          100% of premium and claims. These financial statement are the responsibility of the Company’s
          management. We are jointly and severally responsible (a) in respect of work which is not divided amongst
          us and is carried out by both of us, (b) in repect of joint decisions, (c) in respect of matters which are
          brought to the notice inter-se and on which there is an agreement, (d) compliance of disclosure
          requirements of applicable status, (e) compliance of the relevant status in audit report. Areas of audit
          work allocated to us by the management are as follows.
          M/s Kishore & Kishore
          Investment Accounts, Expenses of Management, Trial Balance of HO, Report U/s 619(3) (a) of the
          Companies Act 1956 of HO and Tax Audit of HO including provision for Income Tax and Wealth Tax.
          M/s Gupta & Gupta
          Business Account-Premium and Claims including IBNR Provisioning, Reinsurance-Premium and Claim,
          Consolidation of HO & RO Account compliance of IRDA Regulations, Reports u/s 619 (3) (a) of the
          Companies Act, 1956 and consolidation thereof and Consolidation of HO & RO’s Tax Audit Reports
          Our responsibility is to express an opinion on these financial statements based on our Audit. This
          separate Audit Report expresses our opinion primarily on the work allocated to us including some common
          areas. We are not aware of reason/s, which compelled the JSCA in not agreeing to matters in our report
          including on those, which are allocated to us, warranting separate audit reports. This is despite the fact
          that they were kept update on our areas of concern including some relating to them on a regular basis.
          Joint discussion were kept in abeyance for discussions till even the date of signing this report, for resons
          not known to us. As the separate final audit report of the joint auditor has not been provided to us and,
          we have been asked to sign the financial statements without their report, we could not address issues
          that could have a bearing on our report. Our attempts for joint discussions on the separate audit reports
          and our request with the JSCA to provide us their final separate audit report on 13.09.2010 failed,
          despite the meeting called by the Company’s Secretary in the matter.
2.        We conducted our audit in accordance with auditing standards generally accepted in India. Those
          standards require that we plan and perform the audit to obtain reasonable assurance about whether the
          financial statements are free of material misstatement. An audit includes examining, on a test basis,
          evidence supporting the amounts and disclosures in the financial statements. An audit also includes
          assessing the accounting principles used and significant estimates made by the management, as well
          as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
          basis for our opinion.
3.        We further report that:
          3.1    Accounting Policy 3.1 and 3.2: The Company follows accrual basis of accouting except for premium
                 income which is accounted for on cash basis. Consequently it also does not make provision for
                 possible claims with respect to which it has already assumed risk under various Government schemes,
                 which consists almost all of Company’s premium income, but has not received the premium in cash
                 by the end of the year. This is inconsistent with generally accepted accounting principles, and is not
                 in conformity with the provisions of the Insurance Regulatory and Development Authority




                                                                 11
          Agriculture Insurance Company of India Limited


      (Preparation of Finacial Statements and Auditor’s Report of Insurance Companies) Regulations,
      2002, The Insurance Act, 1938 read with rules there-under nor the Company’s Act, 1956 in regard
      to following fundamental assumptions of accrual accounting. It leads to an understatement of the
      company’s income, expenses and provisions. This practice is explained by Accounting Policy No.
      3.1 and 3.2 that are being used by the company with the concurrence of IRDA vide their letter dated
      26-08-2010. On a reference made by the Company’s appointed actuary to the Authority in reference
      to the Company’s Accounting Policies, the authority has advised the Company to continue with the
      existing practice of revenue recognition till further orders and has indicated that it is referring the
      matter to an internal committee which looks into updating of the Regulations. Impact of these matters
      has not been determined and hence its effect can not be quantified.
3.2   Accounting Policy no. 5.9 and 5.10 refer to the treatment of income on investment of funds received
      from the government towards specific funds, viz. NAIS Corpus Fund. In regard to balances of
      Corpus Fund of Central/States/UTs included in Schedule 7 of the Annexure to the Balance Sheet
      required to be managed by the Company deficiencies inter alia included (a) Separate accounts to
      deal with the funds as required under the NAIS were not maintained, (b) Credits aggregating Rs
      9.69 crores have been given to relevant funds for the year (i) as Income Share as a proportion of
      the total investment income stated to be on the instructions of C&AG, since 2003-04, (ii) The
      accretion is made on the opening balances and not on running balances, (iii) the surplus is reduced
      from the income and not considered for Company’s tax liability, (iv) Operation of the scheme and
      modalities to manage the scheme, if any, of the providers of the funds was not made available.
      Non compliance of the provisions as contained in NAIS and impact on accounts of matters referred
      above including tax liablility remains unexplained.
3.3   Accounting Policy no. 8.1 refers to the policy followed for creating the reserve for unexpired risks
      (RUR) in which premium includes receivables while A.P. 3.2 refers to accounting of premium
      received. The reserve for unexpired risk, though the quantum of reserve created is as required
      under Section 64V (1) (ii) (b) of the Insurance Act, 1938 read with second part para 2 of IRDA
      Regulations 2002 seems to be in excess of the requirements of the provision of the first part of
      the said para, which provide for the quantum of reserve to be created equal to the amount
      representing that part of the premium written which is attributable to, and to be allocated to the
      succeeding periods. The methodology adopted in creating reserve was found to have not
      considered its appropriateness in the light of company’s business process and accounting policies
      followed in accounting premium income and assuming risks. These inter alia include, (a) Premium
      income is accounted on receipt basis and not on earned basis, (b) The first limb of IRDA requirement
      that reserve is to be created as the amount representing that part of the premium written which is
      attributable to, and to be allocated to the succeeding accounting period has not been determined
      or disclosed, (c) As the Company is following cash accounting for premium income, inclusion of
      any component of receivables referred to in the policy is inconsistent to the policy and facts, (d)
      Considering premium that has been used up before the close of the year, i.e. in respect of Kharif
      Crop, (e) exclusion of earned premium stated to be as per schemes but not received upto
      31.03.2010. On a reference made by the appointed actuary of the Company, IRDA accepted our
      suggestion of not making provision for Kharif Season which gets expired during the financial year
      itself, but made it effective from FY 2010-11, and gave specific relaxation to the company from the
      provisions of Section 64V(1)(ii)(b) of the Insurance Act, 1938 until then. In respect of matters
      other than (d) above, no reference was made to the Authority. Impact, if any, of such other matters
      is not ascertainable and hence cannot be quantified.
3.4   (i) Accounting Policy 9.1.1-The policy states that the estimated liability for outstanding claims is
          provided for at year-end in terms of the concerned scheme/policy provisions. This seems to
          indicate that such liability is based on information/intimation as available and received only up
          to the year end and ignores information available post Balance Sheet date. However, no
          consistency was followed in determining the amount of liability in respect of claims settled/
          identified post 31.03.2010. Deficiencies inter-alia included, (a) Not giving effect to all identified
          claims settled for a materially higher/lower amount in the post audit period, (b) Branch auditors




                                                 12
A   n     n    u     a     l     R     e    p    o     r     t    2     0    0     9    - 10


                   failed to report non provision of liability of material amount of claims crystallized and sent to
                   HO for approval, some of which provided at HO by internal exercise including some identified
                   by us, (c) No confirmation from Branch Auditors was obtained for changes made at HO, (d)
                   Carrying claims in IBNR despite some of those having crystallized, (e) Some known post
                   Balance Sheet Data was considered while some ignored.
              (ii) Accounting Policy no. 9.2 – The Company has provided a sum of Rs. 676.57 crores for NAIS
                   and Rs. 24.80 crore for Non-NAIS (Previous year Rs 465.41 crores for NAIS and Rs. 6.02
                   crores for Non-NAIS) towards IBNR claims based on actuarial certification of appointed actuary.
                   It appears that though the appointed actuary has adopted a special method for crop insurance
                   permitted in IRDA guidelines, the methodology appears to have ignored past history, claims
                   data and post Balance Sheet date information. Effect of the same is not ascertainable and
                   hence, impact if any can not be quantified.
        3.5   Note on 2.2 -- Balance due from GIC as on 31.03.2010 of Rs 2.18 Crores is subject to reconciliation
              and confirmation, and the consequential effect, if any, on reconciliation which is in progress is not
              determinable
        3.6   Note no 4.17 -- Advance include Rs 200 crores paid during the year to the credit of Consolidated
              Fund of India demanded by the GOI out of Company’s retained profits/ reserves and surplus
              (created out of NAIS activity) towards Government of India’s share for meeting additional
              expenditure on Crop Insurance pursuant to directions/ demand by the Ministry of Finance (Insurance
              Division). The withdrawal is stated to by a prelude to the recasting of the scheme and stopping the
              excess premium of individual States being appropriated as profits by the Company. The said
              withdrawal was an ad hoc payment subject to adjustment on recasting of the existing scheme. A
              reference was made to IRDA before carrying out the proposal to share surplus generated over
              the past six years because of revision of NAIS with retrospective effect, and the Authority subject
              to the confirmation that the stipulations laid down for revision of NAIS will be complied with as and
              when the scheme is revised approved the proposed withdrawal from the available surplus from
              NAIS. We are unable to verify the accuracy of this balance, and the accounting treatment of
              activities surrounding it, for the reasons inter alia, (a) The minutes of the 36th Board Meeting held
              on 26th February 2010, Item No. 3a-ATR in respect of payment of Rs 200 crores made on
              29.12.2009 to GOI, the Board recorded that this amount was received back from the Government
              of India on 5th January 2010, and was utilized for discharging GOI’s liablity towards claims under
              NAIS. (b) On the basis of information provided to us there is no indication that this amount is
              expected to be paid back by the Government of India to the company, (c) The company has not
              maintained scheme-wise details of the surplus generated by various parts of its business or of the
              funds in which it has been invested; therefore, we are unable to ascertain that this amount of Rs.
              200 crores has been withdrawn from the profits/reserves and surplus created out of NAIS activity.
              (d) As the Government of India is not a shareholder of the company, using the company’s surplus
              or Reserves to make a payment to it is inconsistent with the concepts of corporate law and
              accounting principles, (e) assuming that the Company was duty bound to release the payment,
              not adjusting partly or fully the amount either as an item of Profit & Loss Account or reduction from
              Reserves & Surplus is not in line and conformity with the demand of withdrawal made by the GOI
              or the approval of IRDA
        3.7   Note no. 4.23 -- Not reducing the difference of Rs 22.44 crores from the provision held in IBNR or
              the crystallized liability of claims has resulted in showing a higher loss by Rs 22.44 crores, and
              ignoring other such identified crystallized claims for adjustment and not undertaking a fresh exercise
              in the light of continuing deficiencies for reason of directions of the Authority referred in 3.3 above.
        3.8   Data contained in Note nos., 4.6, 4.21, 4.23, 5.2, 6.1, 6.2, 7, 9, 10, 12.2 and 21 of Annexure 2 and
              Annexure 7 of the Financial Statements are as complied by the management and we have not
              applied any checks for the validation or otherwise of the amounts stated.
        3.9   In response to our queries on deficiencies on the working of the Company and recognition of
              premium, provisioning for outstanding claims including IBNR and Reserve for Unexpired Risks,
              we were informed by the Company's management that the role of the Company as an insurance



                                                        13
                Agriculture Insurance Company of India Limited


           company is limited to that of an Implementing Agency as categorily stated in the Scheme(NAIS)
           itself. The management has stated that NAIS is more in the nature of providing financial support
           to the farmers in the event of failure of notified crops as a result of natural calamities more than an
           indemnity-based insurance scheme, and thus NAIS is not an insurance scheme in the true sense
           of the term as it does not embrace all the tenets of insurance principles and practices. The Company
           in support of the stand has also stated, (a) No insurance policy is issued since the coverage is
           strictly in terms of the government nofification, (b) Both the premium rates and the claims liability
           are decided by the government, (c) Financial risk element for the company is limited to the extent
           notified, (d) Service Charges paid to the rural financial institutions for collection of premium from
           and disbursement of claims to the farmers is borne by the government, (e) Since NAIS is not an
           insurance policy in the strict sense of the terms, but a benefit scheme of the government for
           farmers, the implementation thereof is required to be done in terms of the Scheme provisions,
           which may not always strictly coincide with the insurance principles and the statutory provisions,
           (f) The very fact that the government recalled Rs. 200 crore from the Company during 2009-10
           out of surplus generated out of NAIS portfolio confirms that it is not being run as an insurance
           scheme, but only as a government scheme for the benefit of farmers. Despite being registered as
           an insurance company and following rules and regulations contained in the Insurance Act, 1938
           read with IRDA (Preparation of Financial Statements and Auditor's Report of Insurance Companies)
           Regulations, 2002 in the preparation of financial statements and the management report, the
           stand taken by the management that the terms of the scheme may not always strictly coincide
           with the insurance principles and the statutory provisions, remains unexplained.
     3.10 The financial accounting systems of the Company are decentralized and the entire component of
          financial transactions relating to premium and claims are carried out at 17 branches (Regional
          Offices) which are audited by the Branch Auditors appointed under section 619(2) read with Sections
          215(3), 227(1) and 228 of the Companies Act, 1956. Audit of these two significant components
          of the Company and consolidation of accounts falls in our allocation of work. The reports of the
          branch auditors, though purportedly expressing opinion on financial statements, have expressed
          opinion on the trial balances as reflecting a true and fair view of Revenue/Expenses and Assets/
          Liablilies of RO instead of a true and fair view of Balance Sheet, Profit & loss Account or Revenue
          Account as required. The reports of the branch auditors and financial statements referred to in the
          reports were not in the prescribed format. Furthermore, as required under subsection (c) of Section
          228(3) of the Companies Act 1956, these report on the accounts of the branch offices examined
          by the branch auditors were not forwarded to us, and those were provided to us at the Head
          Office on dates much later. These reports also did not express opinion on all matters required.
          Therefore, we have not been able to apply analytical procedures or to perform procedures regarding
          the financial information of these two significant components audited by them and consolidated in
          the company's financial statements. Furthermore, HO could not provide us any records at HO
          which could have enabled us to apply some procedures for a cross check and verification. In
          respect of provision of claims apparent aberrations in the reported amounts of claims were noticed
          involving material amounts requiring revising results of ROs at HO level without concurrence from
          the respective branch auditors. We are therefore unable to express any opinion whether these
          two components reported in financial statements have been fairly and properly recorded. The
          issue of Branch Auditors reports on a trial balance not being in the format prescribed in the
          Regulation (Preparation of Financial Statements & Auditors Reports), was referred to IRDA by the
          Company's appointed actuary. It was clarified by IRDA that formats prescribed by the Authority
          are applicable only to the Company and not at the branch level. In the light of the advice of IRDA,
          our reference to the certification of accounts by branch auditors not being in formats prescribed
          should be considered as a statement of fact with a purpose to draw attention, and not a qualification.
4.   Further to our comments referred to in paragraph 3 above and subject to any adjustment that we might
     have found necessary in terms of limitations as specified in preceding paragraphs above, the impact of
     which on the Profit & Loss Account, Revenue Account and Balance Sheet is not determinable except to
     the extent wherever specified, we report that:




                                                     14
A    n        n     u     a    l     R     e    p     o    r     t    2    0     0    9    - 10


         a.       We have obtained all the information and explanations which, to the best of our knowledge and
                  belief were necessary for the purpose of our audit and we found them satisfactory;
         b.       In our opinion, proper books of accounts have been maintained by the Company as far as appears
                  from an examination of those books.
         c.       In our opinion, audited returns received from Branches (ROs) were not adequate for the purposes
                  of our audit.
         d.       The Balance Sheet, Revenue Account, Profit & Loss Account and Cash flow Statement dealt with
                  by the report are in agreement with the books of account and returns.
         e.       The actuarial valuations of liabilities in respect of Claims "Incurred but not reported" (IBNR) is duly
                  certified by the appointed actuary and approved by the Authority. Attention is drawn to para 3.3
                  above on issues relating to the provision. Some of the issues were referred by the appointed
                  actuary to IRDA, who, while understanding the situation, advised to proceed as per certificate
                  issued earlier.
         f.       All the directors of the company are nominees of public financial institutions or Government of
                  India and as per General Circular no. 8/2002 dated 22/08/2002 of the Department of Company
                  Affairs, the nominee directors appointed on the board of the Company by public financial institutions,
                  within the meaning of section 4A of the Companies Act, 1956, and Central Government are exempt
                  from the applicability of the provisions of Section 274 (1) (g) of the Companies Act, 1956.
         g.       In our opinion and according to the best of our information and according to the information and
                  explanations given to us Balance Sheet, Revenue Account and Profit & Loss Account are in
                  compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act,
                  1956 except,’ (a) AS 1 read with sub section (3) (b) of Section 209 of the Companies Act, 1956’ in
                  not following accrual basis of accounting in respect of premium income and claims, (b) AS 4 not
                  considering events occurring after the Balance Sheet date, and (c) Para 2 of Part I of Schedule B
                  of the Insurance Regulatory and Development Authority (Preparation of Financial Statements
                  and Auditor's Report of Insurance Companies) Regulations, 2002 in not recognizing premium
                  income over the contract period or the period of risk including non accounting and disclosure of
                  premium received in advance.
5.       We further report that:
         a.       In our opinion and to the best of our information and belief and according the explanations given
                  to us, the said accounts, subject to our observation in paragraphs 3 above and their consequential
                  effect, if any, which is not ascertainable except wherever quantified, give a true and fair view in
                  conformity with the accounting principles generally accepted in India
                  (i)     In the case of the Balance Sheet of the state of affairs of the Company of the financial year
                          ended 31st March, 2010;
                  (ii)    In the case of the Revenue Account, of the Deficit in Miscellaneous insurance business for
                          the financial year ended 31st March, 2010;
                  (iii)   In the case of the Profit & Loss Account, of the Profit for the financial year ended 31st
                          March, 2010; and
                  (iv)    In the case of the Cash Flow Statement, of the cash flow for the financial year ended on
                          31st March, 2010.
         b.       The Financial Statements stated at (a) above read together with the Accounting Policies and
                  Notes to Accounts are prepared in accordance with the Insurance Act, 1938 (4 of 1938), the
                  Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), Insurance Regulatory
                  and Development Authority ('IRDA') (Preparations of Financial Statements and Auditor's Report
                  of Insurance Companies) Regulations, 2002 ('the Regulations') and the Companies Act, 1956 (1
                  of 1956) to the extent applicable and in the manner so required.
         c.       Whether, the investments have been valued in accordance with the provisions of the Insurance
                  Act, 1938 and the applicable IRDA Regulations, 2002 is reported in the separate Audit Report of
                  the other JSCA.



                                                            15
                   Agriculture Insurance Company of India Limited


       d.     The accounting policies selected by the company are appropriate and are in compliance with the
              applicable accounting standards and with the accounting principles as prescribed in the Insurance
              Regulatory and Development Authority (Preparation of Financial Statements and Auditor's Report
              of Insurance Companies) Regulations, 2002 or any order or direction issued by the IRDA in this
              behalf.
6.     We further certify that:
       (a)   In view of the fact that the reports of the Branch Auditors of 17 Branches (ROs) do not include
             certification of having reviewed the management reports at the branch level in the manner required
             under clause 3 (a) of Schedule C of the Regulations, we are unable to review the management
             report attached to the financial statements of the company for the financial year ended 31st March
             2010, for apparent mistake or material inconsistencies, if any. Further, except a general letter of
             comfort, we have not been provided with any material in support of the contents, disclosures and
             assertions in the management report which we could examine with a view to certify whether or
             not there are any apparent mistake or material inconsistencies with the finanncial statements.
       (b)   We are informed that no special terms and conditions have been stipulated in the registration
             except that in case of renewal of certificate evidence of prescribed fee having been paid in only
             required. In view of the explanation provided the question of whether the Company has complied
             or not with the terms and conditios of the registration stipulated by the Authority does not arise.
             However, of the seventeen Regional Auditors sixteen have reported compliance of the terms and
             conditions as laid down in Section 3(A) of the Insurance Act, 1938, and the remaining one has
             reported non-applicability of the provisions of the said section.
                                                                                    For Gupta & Gupta
                                                                                   Chartered Accountants
                                                                                       FRN 00681N

                                                                                            Sd/-
                                                                                       (S.B. Gupta)
                                                                                  Partner, M. No. 006099
Place: New Delhi
Date: 13.09.2010

AUDITORS CERTIFICATE
In Accordance with the information and explations given to us and to the best our knowledge and belief based
on our examination of the books of accounts and records maintained by the Company for the year ended 31st
March 2010, wer certify that”
(a)    We have not verified the cash balances and the securities relating to the loans and investments made
       by the Company, which is allocated to other JSCA.
(b)    The Company is not the trustee of any trust, and
(c)    Whether any part of the assets of the policyholder’s funds have been directly or indirectly applied in
       contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and
       investment of policyholder’s funds is reported in the separate Audit Report of the other JSCA.
                                                                                    For Gupta & Gupta
                                                                                   Chartered Accountants
                                                                                       FRN 00681N
                                                                                            Sd/-
                                                                                       (S.B. Gupta)
                                                                                  Partner, M. No. 006099
Place: New Delhi
Date: 13.09.2010




                                                     16
A     n       n    u     a    l         R   e   p   o    r     t    2     0    0    9    - 10



                                        AUDITORS’ REPORT
Kishore & Kishore
Chartered Accountants,
9, Ansari Road, Darya Ganj, New Delhi

To the Members of
AGRICULTURE INSURANCE COMPANY OF INDIA LIMITED
1.        We, along with M/s Gupta & Gupta, Joint Statutory Auditors (JSA), have audited, as per our mutually
          agreed allocation of work, the attached Balance Sheet of AGRICULTURE INSURANCE COMPANY OF
          INDIA LIMITED as at 31st March 2010, Miscellaneous Insurance Revenue Account of Crop Insurance,
          Profit & Loss Account and Cash Flow Statement for the year ended on that date, in which are incorporated
          returns of seventeen Regional Offices audited by the other firms of Chartered Accountants, which have
          been taken into consideration by us. These financial statements are the responsibility of the Company's
          management. Our responsibility is to express an opinion on these financial statements based on our audit.
2.        The Balance Sheet, Profit & Loss Account and Revenue Account have been prepared in accordance
          with the provisions of section 11(1) of the Insurance Act, 1938, read with the provisions of sub-sections
          (1), (2) and (5) of Section 211 and sub-section (5) of section 227 of the Companies Act, 1956, to the
          extent applicable and also as per the provisions of Insurance Regulatory and Development Authority
          (IRDA) Act, 1999.
3.        We conducted our audit in accordance with auditing standards generally accepted in India. Those
          standards require that we plan and perform the audit to obtain reasonable assurance about whether the
          financial statements are free of material misstatement. An audit includes examining, on a test basis,
          evidence supporting the amounts and disclosures in the financial statements. An audit also includes
          assessing the accounting principles used and significant estimates made by the management, as well
          as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
          basis for our opinion.
4.        Based on the Draft Audit Report of the JSA, M/s Gupta & Gupta, placed in the Audit Committee Board
          meeting held on 9th Sep 2010 and their Senior Partner's statement in the said meeting that but for
          cosmetic changes, their report was final and further to the discussions held with them and as
          communicated to us during the course of the audit, we have, with due regards to the opinion of our JSA,
          deemed fit to issue a separate Audit Report on the final accounts of the Company for the year. The
          reasons for a separate Report include the following :
          ●       The clarificatory amendments have been made by the Company in their Accounting policy no. 3.1
                  and their ultimate impact on the Accounts has been disclosed in the Note No. 4.8 of the Notes to
                  Accounts.
          ●       The "Reserve for Unexpired Risks" according to us, has been created by the Company as per the
                  existing legal provisions ;
          ●       The Company has disclosed in its Note No. 4.23 of the Notes to Accounts the amount of claims
                  actually crystalised up to 30.06.2010 against the IBNR provision made on 31.03.2010.
          ●       We have placed full reliance on the amount of liabilities ascertained and certified by the technical
                  expert, the Actuary, on which the concurrence of the IRDA was also obtained by the Company ;
          ●       The Branches' audited returns, in our opinion, are as per IRDA regulations and the prevailing
                  practice in the general insurance industry.
          ●       The general observations of the JSA that there are deficiencies on the working of the Company,
                  are, vague and unsubstantiated ;
          ●       The comments of the JSA on the veracity of the Scheme (NAIS) is not in the purview of the
                  Auditors and beyond the scope of the Auditing ;




                                                          17
                Agriculture Insurance Company of India Limited


5.   Accordingly, we report that:
     Attention is invited to the Company's Significant Accounting Policies No. 3.1 and 3.2, according to which
     premium in respect of NAIS, a Government of India Scheme, where risk is assumed for Rabi crop in
     accordance with the relevant provisions of the scheme, notwithstanding the delay in receipt of premium
     by the Company up to 31st March of the year from the Nodal Agencies / Central / State / Union Territory
     Government / Government Agencies as per IRDA concurrence vide their letter No. 34-1 / IRDA / Actt /
     IBNR / AIC /2009-10 dated 26.08.2010, the net effect on the premium for the year being understated by
     Rs.7,83,69 thousand and claims understated by Rs.6,18,36 thousand, resulting in overall impact on
     understating the net profit for the year by Rs.1,65,33 thousand (Refer Note 4.8 of Annexure-2).
6.   We further report that:
     (a)   Assets and liabilities relating to crop insurance business taken over from GIC are subject to approval
           of the Government of India and the balance of Rs. 2,18,56 thousand due from GIC on 31.03.2010
           is subject to confirmation and consequential adjustment, if any, - amount indeterminate (Refer
           Note No. 2.1 & 2.2 of Notes on Accounts - Annexure -2) .
     (b)   Balances due to / due from the Central Govt, State Govts and UTs, as per Schedule - 7, are
           subject to confirmation and consequential adjustment, if any, - amount indeterminate.
     (c)   The Company has provided interest on the Corpus Fund as per their past practice.
     (d)   We have obtained all the information and explanations, which, to the best of our knowledge and
           belief, were necessary for the purpose of our audit and found them satisfactory;
     (e)   In our opinion, proper books of accounts as required by law have been kept by the Company so
           far as it appears from our examination of those books.
     (f)   In our opinion, proper returns audited from other Regional Offices have been received and are
           adequate for the purpose of our audit.
     (g)   The Company's Balance Sheet, Revenue Account and Profit & Loss Account and Cash flow
           statement dealt with by this report are in agreement with the books of account and returns.
     (h)   The IBNR liability under NAIS as on 31st March 2010 as certified by the Appointed Actuary amounts
           to Rs. 675,87,24 thousand, and also concurred by IRDA, however, liability to the extent of Rs.
           116,97,60 thousand subsequently crystalized up to 30.06.2010 at Rs. 94,90,21 thousand, has
           resulted in excess provision of liabilities for IBNR to the extent of Rs. 22,07,39 thousand on 31st
           March 2010, also resulting in understatement of the Profit for the year by the same amount (Refer
           Note 4.23 of Annexure 2).
     (i)   All the directors of the Company are nominees of public financial institutions or Government of
           India and as per General Circular No. 8/2002 dated 22/08/2002 of the Department of Company
           Affairs, the nominee Directors appointed on the Board of the Company by public financial institutions,
           within the meaning of section 4A of the Companies Act, 1956, and Central Government are exempt
           from the applicability of the provisions of section 274 (1) (g) of the Companies Act, 1956.
     (j)   In our opinion, the Balance Sheet, Revenue Account and Profit & Loss Account comply with the
           Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956, to the extent
           applicable to the Company and are also in conformity with the accounting principles as prescribed
           in the IRDA (Preparation of Financial Statements and Auditor's Report) Regulations, 2002, or any
           order or direction issued by IRDA in this behalf.
     (k)   In our opinion, the investments have been valued in accordance with the provisions of the Insurance
           Act, 1938, and the applicable IRDA Regulations, 2002.
     (l)   The sum of Rs. 200 crore paid by the Company during the year to the credit of Consolidated Fund
           of India as per the Government of India letter No. F No C-13014/16/2004 - Ins. I, dated 23/12/
           2009 as a prelude to the recasting of the Scheme by them and accounted for by the Company as
           "Other Advances" under Assets as on 31/03/2010, lacks confirmation from the Government for
           showing the said amount by the Company as receivable from them on the said date (Refer Note
           no. 4.17 of Annexure-2).




                                                    18
A    n     n     u     a    l     R     e    p    o     r     t   2    0    0     9    - 10


         (m)   In our opinion and to the best of our information and according to the explanations given to us, the
               said accounts read with significant accounting policies and notes thereon are prepared and give
               the information as required by the Insurance Act, 1938, the Insurance Regulatory and Development
               Authority Act, 1999, and the Companies Act, 1956, to the extent applicable and in the manner so
               required and subject to our observations in paragraph 6 (l) regarding payment of Rs. 200 crore to
               the Govt. of India, paragraphs 5 and 6 (h) regarding clarificatory impact of accounting policy and
               impact of post - balance sheet event respectively on understating of the profit for the year by
               Rs. 23,72,72 thousand and overstating the liabilities and provision as at 31.03.2010 by the same
               amount and indeterminate consequential impact of para 6 (a) and 6 (b) due to lack of confirmations
               on the accounts, give a true and fair view in conformity with the accounting principles generally
               accepted in India:
               (i)     in the case of the Balance Sheet of the state of affairs of the Company as at 31st March,
                       2010;
               (ii)    in the case of the Revenue Account, of the surplus in Miscellaneous Insurance Business for
                       the year ended on 31st March, 2010;
               (iii)   in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on
                       31st March, 2010; and
               (iv)    in the case of Cash Flow Statement, of the cash flow for the year ended on 31st March,
                       2010.
7.       Further, on the basis of our examination, we certify that:
         As Statutory Auditors of the Company, we have reviewed the management report and there is no
         apparent mistake or material inconsistency with the financial statements.
         (a)   As per information and explanations given by the management, the terms and conditions as laid
               down in section 3(4) of the Insurance Act, 1938, regarding registration have been complied with ;
         (b)   To the best of our information and explanations given to us and representations made by the
               Company, the Company is not a trustee of any trust ;
         (c)   We have verified the cash, bank balances and investments on the following basis:
               Cash              : Physical verification and Branch Auditors' reports.
               Bank Balances : Bank certificates and Branch Auditors' reports.
               Investments       : Custodian certificate and Management certificate ;
         (d)   To the best of our information and explanations given to us and on the basis of representations
               made by the Company, no part of the assets of the policyholders' funds has been directly or
               indirectly applied in contravention of the provisions of the Insurance Act, 1938, relating to the
               application and investments of the policyholders' fund.


                                                                                  For Kishore & Kishore
                                                                                  Chartered Accountants


                                                                                           Sd/-
                                                                                      (S.C.Kishore)
                                                                                         Partner
                                                                                      M.No. 003390
Place : New Delhi
Date : 9th September 2010.




                                                         19
                    Agriculture Insurance Company of India Limited




                               DIRECTORS’ REPORT

To
The Shareholders,
Your Directors take pleasure in presenting the 7th Annual Report of the Company. The report is being presented
along with the Audited Statement of Annual Accounts for the financial year ended on March 31, 2010.
FINANCIAL PERFORMANCE

                                                                                         (Rupees in crore)
  S.No.    Particulars                                                   2009-10                   2008-09
           REVENUE ACCOUNT
  1        Gross Direct Premium                                          1520.40                    833.44
  2        Net Premium (net of re-insurance)                             1268.51                    776.53
  3        Net Premium Earned                                            1022.52                    742.61
  4        Net Incurred Claims                                           1189.19                    529.62
  5        Commission earned (Net)                                          44.30                     8.94
  6        Operating Expenses                                               20.24                    15.88
  7        Net Investment Income apportioned to Revenue A/c               109.59                    102.86
  8        Revenue Profit/(Loss) [2-3+4-5+6]                              (33.03)                   308.91
           PROFIT & LOSS ACCOUNT
  8        Net Investment Income apportioned to P&L A/c                    67.16                     48.09
  9        Other Incomes                                                    4.85                      0.33
  10       Prior Period Expenses & Adjustments                              0.00                      0.00
  11       Other Expenses & Provisions                                      2.56                      1.39
  12       Profit Before Tax[8+9-10-11]                                    36.42                    355.94
  13       Provision for Taxes                                              3.02                    123.33
  14       Profit After Tax [13-14]                                        33.40                    232.61
  15       Transfer to General Reserve                                     33.40                    209.21
  16       Proposed dividend                                                0.00                     20.00
  17       Dividend Distribution Tax                                        0.00                      3.40
  18       Previous year set-off & adjustments                               NIL                       NIL
  19       Balance of Profit c/f                                             NIL                       NIL

The Board approved & adopted Annual Accounts for the year 2009-10 at its 38th Meeting held on 09.09.2010.
OPERATIONAL REVIEW
Your Company has retained its position as the Country's leading Crop Insurance Company. During 2009-10,
your Company covered 245 lakh farmers and 350 lakh hectares of cultivable land, by impressing upon the
participating States to bring more areas and more crops under the insurance net. The Company also succeeded
in persuading the State Government of Manipur to implement the Scheme and thereby the number of States
participating in the Scheme has gone up from 24 to 25, besides 2 Union Territories.
The Non-NAIS segment also reported better coverage in terms of the number of States, the number of locations
and the number of crops insured under different schemes, registering an impressive premium growth rate of
400%.




                                                     20
A    n     n    u     a    l     R     e    p    o     r     t    2    0    0     9    - 10


National Agricultural Insurance Scheme
The National Agricultural Insurance Scheme (NAIS) is being implemented since Rabi 1999-2000 with the objective
of providing a comprehensive insurance solution to the farmers in the event of failure of or damage to any of the
notified crops as a result of natural calamities or widespread incidence of pests and diseases. At present, 35
different crops are being covered in each of Kharif and Rabi seasons.
During the past 21 seasons, beginning from Rabi 1999-2000 till Rabi 2009-10 (till 31st August 2010), 15.86
crore farmers have been covered for a sum insured of Rs. 186934 crore and an area of 24.5 crore hectares; total
amount of claims to the tune of Rs. 20218 crore have been reported at a claim ratio of 362%, out of which claims
amounting to Rs. 18420 crore have been paid benefiting 4.48 crore farmers. In other words, 28% of the farmers
insured under the Scheme have received claims. The percentage of non-loanee farmers insured till Kharif 2009
was 17.4%, as against 30% during Kharif 2009.
Though as per the Scheme provisions, small and marginal farmers are eligible for 10% premium subsidy to be
shared equally by the Centre and State Governments, the State Governments of Himachal Pradesh, Goa,
Maharashtra, Tamil Nadu, Puducherry, Andaman & Nicobar Islands have extended additional premium subsidy
to farmers in respect of selected areas/crops.
Efforts are being made to cover the gap between the insurable loan disbursed by the financial institutions and
the loans being insured through regular follow up with the banks.
The monsoon of 2009 set in over Kerala on 23rd May 2009, one week before its normal date of 1st June and
covered the entire country by 3rd July 2009. However, it was one of the worst seasons in the history of our
country during which the shortfall in rain was by 23%. Out of 526 meteorological districts for which data was
available, 215 districts (41%) received excess/normal rainfall and the remaining 311 districts (59%) received
deficient/scanty rainfall. Our country received 64% rainfall in North-West India, 80% in Central India, 73% in
North-East India and 96% in South Peninsula.
It is worth mentioning that during 2009-10, the number of farmers covered under NAIS was increased by 24%,
the area insured by 28%, the sum insured by 44% and the premium underwritten by 42% over 2008-09.
It is noteworthy that the eight states, which insured more than one million farmers each during Kharif 2009
season, accounted for 82.6% of the insured farmers, 75.7% of the sum insured, and 75.3% of the premium
underwritten. 30 percent of the total farmers insured were non-loanee farmers. The top five states reported
claims amounting to Rs. 3,740.27 crore, out of the total claims of Rs. 4,616.37 crore during Kharif 2009, accounting
for 81% of total claims benefiting 30% of insured farmers. The percentage of farmers benefited during the
season is 100% in Manipur, 98.3% in Mizoram and 81.16% in Rajasthan.
Except in Maharashtra, where all farmers are treated as non-loanee farmers, the coverage percentage of non-
loanee farmers out of total farmers insured during Kharif 2009 was 100% in the states of Manipur & Mizoram,
and 94% in Jharkhand.
As a result of support from the participating State Governments by way of timely release of their share of liability
towards claims and premium subsidy, settlement of claims has been more satisfactory than the previous year.
Non-NAIS Portfolio
The Non-NAIS segment reported improved coverage in terms of the number of States, the number of locations
and the number of crops insured under different schemes/products.
Weather Based Crop Insurance Scheme: WBCIS was implemented by the Company in 13 states in Kharif 2009
and in 11 states in Rabi 2009-10, covering in all 34 different crops, including perennial crops like apple, citrus
crops, grapes, mango, cashew nut, etc. WBCIS intends to provide insurance protection to farmers against
adverse weather incidence, such as deficit and excess rainfall, long dry spells, fluctuations in minimum and/or
maximum temperature, relative humidity, wind speed etc. which are deemed to impact the crop production
adversely. It has the advantage to settle claims within a short time of adverse weather incidence. WBCIS is
based on actuarial rates of premium, but to make the Scheme attractive, premium actually charged from farmers




                                                        21
                   Agriculture Insurance Company of India Limited


in respect of food and oilseed crops is capped "at par" with NAIS, and for annual commercial and horticultural
crops, the same has been capped at 6 percent.
Your company insured about 14.61 lakh hectares of cultivable land in respect of 11.35 lakh farmers for a sum
insured of Rs. 1910 crore, earning a premium of Rs. 199.02 crore during Kharif 2009 and about 12.27 lakh
hectares of land sown by about 8.73 lakh farmers for a sum insured of Rs. 1976 crore, for a premium of Rs.
161.27 crore during Rabi 2009-10. The claims were estimated at Rs. 293 crore. WBCIS, during 2009-10, accounted
for 24 percent of the company's gross premium of Rs. 1520 crore.
Other Products: Apart from WBCIS, AIC also implemented various in-house products, including Rainfall / Varsha
Bima, Coffee, Bio fuel, Rubber and Apple insurance.
PRODUCT DEVELOPMENT
Your Company continued its efforts to study, design and fine-tune various farmer friendly products to cater to the
specific insurance needs of the farming community. The Company made every effort to ensure that these
products, while conforming to sound actuarial (commercial) principles, are also affordable to the farmers.
Coconut Insurance: 'Coconut Palm Insurance Scheme' (CPIS) covering death / loss of coconut bearing palms
was approved by the Govt. of India, on pilot basis for seven States viz. Kerala, Andhra Pradesh, Karnataka,
Goa, Tamilnadu, Orissa and Maharashtra. In Kerala the pilot was launched on 24.02.2010 by the Hon'ble
Agriculture Minister of Kerala State. The pilot, supported by the Coconut Development Board, was implemented
in three States, viz. Andhra Pradesh, Goa and West Bengal during 2009-10. CDB provides 50 percent subsidy
in premium, while the concerned State to the extent of 25 percent, and the grower bears the balance 25 percent
of the premium.
Cardamom Insurance: Cardamom Insurance product has been designed in consultation with the Spices Board,
and has already been approved by IRDA under the 'file and use' procedure. The insurance policy (Part-1)
covers yield loss, besides covering death / loss cardamom plants (bushes), arising out of non-preventable
natural factors, under Part-2. The grower has a choice to go for either Part-1 or Part-2 or both. We intend to
implement this Scheme on pilot basis initially in the states of Kerala, Tamil Nadu, Karnataka and Sikkim. The
product launch is awaiting policy decision on premium subsidy from the Government.
Plantation Insurance: The proposal for subsidizing premium in respect of plantation crops and spices like rubber,
tea, tobacco, cardamom is still awaiting approval of the Government.
NEW TIE-UPS:
(i)     National Agricultural Innovation Project (NAIP): A project of NAIP on "Risk Assessment and Insurance
        Products for Agriculture" has been awarded by Indian Agricultural Research Institute (IARI) to NCAP
        (National Centre for Agricultural Economics and Policy Research), and AIC has signed in as a partner.
        The project is funded by the World Bank and is to be implemented over four years starting from 2008-
        09. The project is developed on 'Risk Management and Insurance Products for Agriculture'.
(ii)    Tie-up with India Post: AIC in order to reach out to the farmers in the remotest corners of the country, is
        tying-up with 'India Post' who have over 1,50,000 sub-post/post offices across the length and breadth of
        the country. To begin with the arrangement is piloted in Karnataka during 2009-10 for service weather
        insurance products.
(iii)   Tribal Welfare Department (TWD) of Gujarat: AIC tied-up with Tribal Welfare Department (TWD) of
        Gujarat under its 'Sunshine' project to provide rainfall based crop insurance for maize crop grown by
        tribal farmers in about 20 Tehsils spread over five districts of the State where Monsanto is supplying the
        hybrid seeds. Under the project, the maximum payout is fixed at Rs. 4500 per acre, and the farmers'
        share of premium is paid by TWD. The project during Kharif 2009 season covered over 1,40,000 tribal
        farmers.
(iv)    Tie-up with Self-Employed Women Association (SEWA): SEWA has been working on providing cost-
        effective risk management solution to its members engaged in agriculture activities. AIC tied-up with




                                                       22
A      n     n    u     a    l     R     e    p    o     r     t   2       0   0     9     - 10


           SEWA to provide rainfall based crop insurance to its members in about 12 Tehsils spread over three
           Districts of Gujarat during Kharif 2009 season.
(v)        Tie-up with Sajjata Sangh: AIC tied up with 'Sajjata Sangh', a federation of over 10 NGOs operating in
           Gujarat, to provide rainfall based crop insurance during Kharif 2009, using State government's rain
           gauges at tehsil level. The project is initiated for groundnut and cotton crops in about 25 Tehsils spread
           over eight districts of Gujarat. The project covered over 1400 farmers, of which about 60 percent are
           small / marginal farmers and about 10 percent are women farmers.
(vi)       Tie-up with Aga Khan Rural Support Programme (AKRSP): AIC tied-up with AKRSP to provide rainfall
           based crop insurance to its members growing crops in certain areas of Gujarat. AKRSP, through a third
           party, set-up six Automatic Weather Stations (AWSs), during Kharif 2009 season, to facilitate regular
           sharing of weather data and quick settlement of claims,
INVESTMENTS
Total investments of the Company increased from Rs. 1974.64 crore as on 31-03-08 to Rs. 2375.62 crore as at
the end of 2009-10. While investing the surplus funds, under the supervision of the Investment Committee of the
Board, your Company, wherever required, has followed the Investment Policy in terms of the relevant provisions
of the Insurance Act, 1938, and IRDA Investment Regulations, 2000, along with the other laws and rules as
applicable. Despite softening of the interest-rates during 2009-10, your Company was able to earn an investment
income of Rs. 184.93 crore (previous year Rs. 154.90crore) at an annual average yield of 9.37% as compared
to 9.32% during 2008-09. The investment in Government and other securities is made on 'held to maturity'
basis; therefore, the market fluctuations do not have any impact on the yield.
EXPENSES OF MANAGEMENT
During 2009-10 fiscal, the Expenses of Management of the Company amounted to Rs. 20.24 crore (previous
year Rs. 15.88 crore), resulting in ME ratio of 1.33% (previous year 1.91%).
DIVIDEND AND APPROPRIATIONS
Your Company has not recommended any Dividend for financial year 2009-10.
The amount of Profit after Tax of Rs. 33.40 crore has been transferred to the General Reserve of the Company.
REINSURANCE
The summary of AIC's retention on its net account vis-a-vis reinsurance cessions for the financial year 2009-10,
in respect of Non-NAIS portfolio, in terms of percentage is as under:-
           AIC Retention                                                                       30.62
           Reinsurance - Domestic
           GIC (including 10% Statutory Cessions)                      :           20.08
           PSU Non-life (GIPSA) Companies                              :           18.25       38.33
           Reinsurance - Foreign                                       :                       31.05
                                                     TOTAL             :                     100.00

SOLVENCY MARGIN
A major portion of business of your Company comes from the Government sponsored Scheme i.e. National
Agricultural Insurance Scheme, where under the Government provides stop loss protection over and above the
pre-defined liability of the Company. The Company has maintained adequate Solvency Margin as required
under the IRDA (Solvency Margin) Regulation, including the liability arising out of the Government sponsored
Schemes i.e. NAIS. As on 31st March, 2010, the Company's Solvency Margin stands at 2.07, as against the
required Solvency Ratio of 1.5.




                                                          23
                   Agriculture Insurance Company of India Limited


PERSONNEL AND INDUSTRIAL RELATIONS
The Company realizes the importance of Human Resource Development which is instrumental to the development
of any corporate entity. The Company has accordingly, recruited three IT specialists and one in Agri discipline in
Scale-I, in August, 2009.
Appointment of HR Consultant: Dr. K.C. Mishra, Ex-director, NIA Pune, has been appointed as HR expert to
advise us in the process of augmenting its human resource by assessing the manpower requirement in each of
the top, middle & lower management levels at Head Office as well as Regional Offices, for the coming five years.
The report of the above study is awaited and is expected to be submitted by Dr. Mishra very soon.
The Company believes in constant strengthening its manpower by providing them necessary training in different
areas of work to update & broaden their work knowledge & skills. During the FY 2009-2010, thirty eight officers
were nominated to different technical & professional training programmes in prestigious institutions like National
Insurance Academy at Pune & Administrative Staff College of India at Hyderabad.
As a measure of motivation, promotion exercise for Class I officers was successfully conducted during 2009-10.
The promotion exercise of Class III/IV is under way.
The Company has formulated and adopted its own Leave & LTS Rules. The Company has also adopted Profit
Linked Incentive Scheme in the Company which is expected to enhance the motivation levels of the Staff and
Officers to a greater extent.
Industrial Relations remained cordial throughout the year and the Company continued to receive unstinted
cooperation from its employees and officers.
OFFICIAL LANGUAGE
The Company during the short duration of its existence has contributed to the implementation of the provisions
of the Official Language Act. During 2009-10, the Company was listed for inspection of implementation of Official
Language by the Parliamentary Committee which concluded in a smooth and successful manner. The Company
is now enrolled under Sec 10(4) of the Official Language Act of Government of India which signifies that 80
percent of the work force of the Company has working knowledge of the Official Language.
The information as required under Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended, may be treated as 'NIL' for the year ended 31st March
2010.
FOCUS ON INTERMEDIARIES-BROKERS AND MI AGENTS
While utilizing the services of other intermediaries such as agents, corporate agents, brokers, NGOs/SHGs and
others, particularly to facilitate maximum coverage of non-loanee farmers, the Company proposes to exercise
more prudence and diligence firstly by verifying their antecedents before engaging them, followed by necessary
training so as to make them understand the salient features of the Scheme, the policy terms and conditions,
coverage and exclusions, in order to prevent risk of moral hazard and adverse-selection.
INFORMATION TECHNOLOGY
This year has seen the take-off of Project Annapoorna - the IT Systems Solution Project of the Company. This
was envisaged as a technological enablement project which would bring automation to the routine office processes,
thereby reducing work volume, thus freeing the manpower for better utilization of their domain skills. But more
significantly, this Project, through its online interactive Portal, would open a window of opportunity to the remote
and poor farmer to directly avail the crop insurance cover for himself.
In this first year, the foundation of the InfoTech system of the Company has been laid. Hardware in terms of
Servers, Connectivity in terms of MPLS network, Infrastructure in terms of Firewalls, Anti-virus, Messaging
system, etc. and Services in terms of Server Hosting at the Data Centre in Bangalore and the Disaster Recovery
Centre in Delhi, IT Help-Desk have been put in place and made operational. The System Requirement
Specifications for the eleven identified Applications have been completed and the Design phase has commenced.




                                                        24
A    n     n    u    a     l     R    e     p    o    r     t    2    0     0    9    - 10


The SRS has not only resulted in taking the substantial process reengineering, but has also endeavoured to
build in the foreseeable future scenarios of business and administration. The two initial Applications, viz. the
Portal and Legal Management System have already been developed and are being tested before Go-Live.
To support Project Annapoorna, the IT Department at HO has been reinforced by induction of three specialist
officers who will attend to the administrative work apart from providing Project support.
PUBLIC DEPOSITS
During the year under review, the Company has not accepted any deposit from the public under Sections 58A
and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.
ADDITIONAL INFORMATION REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN
THE REPORT TO THE BOARD OF DIRECTORS) RULES, 1988
Your Company is registered for 'crop insurance' activity only and as such, there are no particulars to be disclosed
under the Companies (Disclosure of Particulars in the Report to the Board of Directors) Rules, 1988 with regard
to conservation of energy / technology absorption. During 2009-10, the Company had no foreign operations,
except reinsurance from international market through Indian Brokers.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of the Company have occurred between
April 1, 2010 and the date on which this Report has been signed.
BOARD OF DIRECTORS
The Board comprises of Chairman-cum-Managing Director and five other members as Nominee Directors from
Govt. of India and six members, - one each nominated by six promoter companies.
During the year under review, FY 2009-10, the Board met five times, besides a number of meetings of its various
sub-committees constituted for specific purposes.
Mr. K. N. Bhandari, Mrs. Bhagyam Ramani and Mr. S. K. Chanana, rotational Directors, who have held office for
the longest period, will retire by rotation at the ensuing Seventh Annual General Meeting, and being eligible for
re-appointment have offered them for re-appointment.
Mr. P. C. James, General Manager, United India, was appointed as Additional Director in place of Mr. A. Asthana,
General Manager & Director, United India on 20.10.2009. He will relinquish his office on the date of Annual
General Meeting under the provisions of Section 253 of the Companies Act, 1956, and being willing and eligible,
offers himself for appointment. The Company has received nomination letters from Members for his appointment.
The Board of Directors wishes to place on record its appreciation for the valuable contribution made by the
retired Director.
STATUTORY AUDITORS AND SUPPLEMENTARY AUDIT BY C & AG
The Joint Statutory Auditors, namely, M/s Kishore & Kishore, Chartered Accountants and M/s Gupta & Gupta,
Chartered Accountants, New Delhi, appointed by the Comptroller and Auditor General of India [C&AG], due to
difference of opinion amongst themselves on certain points, have submitted separate Audit Reports, which are
annexed to the Financial Statements for the year ended on 31st March 2010, along with the Management
replies thereto and the Board's comments thereon (Annexure 8). The gist of the clarifications/confirmations
obtained from IRDA on the various points raised by M/s Gupta & Gupta in their report also finds place in the said
annexure. It is pertinent to mention here that as per the provisions of Section 619 (3) of the Companies Act,
1956, the Company's Annual Accounts 2009-10 were also subjected to supplementary audit by the C & AG and
they have submitted a clean report with 'Nil' comments. The said Report forms a part of this Annual Report.
M/s SVANS & Associates, Chartered Accountants, Delhi was newly appointed as one of the Joint Statutory
Auditors of the Company by the Comptroller & Auditor General of India in terms of Section 619(2) of the Companies
Act, 1956 in addition to appointment / reappointment of Branch Auditors for the seventeen Regional Offices.




                                                       25
                   Agriculture Insurance Company of India Limited


RENEWAL OF LICENSE ISSUED BY INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF
INDIA (IRDA)
The annual accounts of the Company are drawn-up as per the IRDA (Preparation of Financial Statements and
Auditor's Report) Regulations, 2002. The Company's existing Paid-up Equity Capital of Rs. 200 crore conforms
to the minimum capital requirement prescribed by IRDA. The Company has obtained the Certificate of Renewal
of Registration for the year 2010-11 from the IRDA on 10.03.2010.
REPORT ON CORPORATE GOVERNANCE
Corporate Governance
Your Company is committed to maintaining high standards of corporate governance. The Company ensures
compliance of all the laws applicable to the Company. During 2009-10, the Company did not have any material
pecuniary relationship or transactions with any of the non-executive Directors, except for the sitting fees paid to
the independent director. Five Board meetings were held during the year 2009-10 and the gap between two
meetings did not exceed four months. The dates on which the Board meetings held were: 24th June 2009, 28th
July 2009, 22nd October 2009, 16th December 2009 and 26th February 2010.
Internal Control Systems
The Company has Internal Audit & Control System in place with the objective of evaluating and ensuring the
adequacy of internal controls and adherence to internal processes and procedures as well as to the regulatory
and legal requirements.
The Board Audit Committee set up in accordance with the provisions of Section 292A of the Companies
Amendment Act, 2000, comprises of an independent Director as Chairman of the Audit Committee along with
other members of the Audit Committee from Ministry of Agriculture, Govt. of India and from GIC, Mumbai; OIC,
New Delhi; UIIC, Chennai and NABARD, Mumbai. During the year under review, the Committee met four times
and since the recommendations made by the Audit Committee from time to time were accepted by the Board, no
disclosure as regards the non-acceptance any of their recommendations by the Board is required to be made.
The Board Investment Committee comprises of three Non-executive Directors, the Chief Executive Officer,
Chief of Finance and the Chief of Investment Department. The Investment Committee met three times during
2009-10 and looked into and monitored various aspects of investment operations. The Investment Committee
furnishes its report to the Board on the performance and on the future outlook of the Investment portfolio of the
Company to enable the Board to look at possible policy changes and strategies.
The Board has constituted Risk Management Committee comprising of Chairman- cum-Managing Director; the
Independent Director nominated by GoI; Joint Secretary, Ministry of Agriculture, Government of India and the
nominee Director from New India in order to develop an adequate risk management system and to lay down the
company's Risk Management Policy. The Chief Risk Officer (CRO) with defined role assists the Committee. The
said Committee will assist the Board in effective operation of the risk management system by performing
specialized analysis and quality reviews and by maintaining an aggregated view on the risk profile of the Company,
with periodical submission of its report to the Board on the risk exposures and the actions taken to manage the
exposures.
The Board has also constituted Policyholders' Protection Committee comprising of Chairman-cum-Managing
Director; the independent Director nominated by GoI; Joint Secretary, Ministry of Agriculture, Government of
India and the nominee Director from NABARD to place significant emphasis on the protection of policyholder's
interests and on the adoption of sound and healthy market conduct practices by the Company, besides meeting
the requirements of IRDA Regulations on protection of policyholders' interests. The activities such as promotion
& publicity and advertisements are required to be monitored by the Committee regularly. The Committee will
also lay down policy guidelines as to how to keep the policyholders well informed of and educated about the
crop insurance products and the complaint-handling procedures and to report to the Board. The Committee
should put in place systems to ensure that policyholders have access to grievances redressal mechanism and
shall monitor and review the working of the existing Board approved Grievance Redressal Mechanism already
in place to ensure expeditious disposal of customers' complaints.




                                                       26
A     n     n    u    a     l     R     e    p     o    r     t     2    0    0     9     - 10


The Board has also constituted Ethics Committee comprising of an independent Director; Joint Secretary (B&I),
Ministry of Finance, Govt. of India; and Joint Secretary (Credit), Ministry of Agriculture, Govt. of India to monitor
the compliance with external laws and regulations and internal policies, including the Company's code of conduct
& ethics and receiving reports on identified weaknesses, lapses, breaches or violations and would suggest
control measures to address the same.
Other Committees of the Board namely Personnel, IT and Remuneration Committees also met as and when
required and were well attended.
Sitting-fee is paid only to the independent Director nominated by the Govt. of India as domain expert. No sitting-
fee is paid to any other Director. The Chairman-cum-Managing Director is paid a salary as fixed by the Government
of India, in addition to the Performance Linked Incentive (PLI) upon achievement of broad quantitative and
qualitative performance parameters based on the Statement of Intent of Annual Goals fixed by the Ministry of
Finance, Govt. of India with due approval of the Remuneration Committee of the Board, subject to income tax.
No sitting-fee is paid to him.
Your Company has complied with all the requirements of Regulatory Authority. No penalty was imposed on it by
any Statutory Authority during 2009-10.
The details of the last three Annual General Meetings of the Company are given below:-
          Date of AGM                       Venue of AGM
          27th September, 2007              'Amba Deep' (13th Floor), 14, Kasturba Gandhi Marg, New Delhi
          26th September, 2008              'Amba Deep' (13th Floor), 14, Kasturba Gandhi Marg, New Delhi
          25th September, 2009              'Amba Deep' (13th Floor), 14, Kasturba Gandhi Marg, New Delhi

EXTRA-ORDINARY GENERAL MEETING AND DETAIL OF SPECIAL RESOLUTION(S), IF ANY, DURING
THE LAST 3 YEARS
An Extra-ordinary General Meeting of the Shareholders was convened on 15th May 2008 at the Registered
Office of the Company at "Ambadeep" (13th Floor), 14, Kasturba Gandhi Marg, New Delhi-110001 for alteration
of Articles of Association of the Company pursuant to Section 31 of the Companies Act, 1956, by Special
Resolution, for addition of a proviso to the Article 12(iii) of the Articles of Association of the Company, with regard
to the term of office of the Chairman-cum-Managing Director appointed by the Government of India.
CAPITAL STRUCTURE
The Authorized Share Capital of the Company is Rs. 1500 crore, with the paid-up Equity Share Capital of Rs.
200 crore being held as under:-
 S. No.      Shareholders of the Company                                           Holding (Rs.)      Percentage
                                                                                                         Holding
 1.          General Insurance Corporation of India                                     700000000               35
 2.          National Bank for Agriculture and Rural Development                        600000000               30
 3.          The New India Assurance Company Limited & its nominee                      175000000             8.75
 4.          National Insurance Company Limited & its nominee                           175000000             8.75
 5.          Oriental Insurance Company Limited                                         175000000             8.75
 6.          United India Insurance Company Limited                                     175000000             8.75
             TOTAL                                                                   2000000000                100
The Issued and/or Paid-up Share Capital of the Company remained at Rs. 200 crore as there was no further
issue of shares during 2009-10.




                                                         27
                   Agriculture Insurance Company of India Limited


BOARD / BOARD COMMITTEE MEETINGS
Attendance sheet in respect of the Directors having attended the Board Meetings / Board Committee Meetings
during the financial year 2009-10 is attached herewith (Annexure 9).
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:
i       in preparation of Annual Accounts for the year ended on 31st March 2010, the applicable Accounting
        Standards have been followed along with proper explanations relating to material departures, if any;
ii      appropriate Accounting Policies have been selected and have been applied consistently, and that the
        judgments and estimates made are reasonable and prudent so as to give a true and fair view of the
        state of affairs of the Company as at the end of the financial year, and the Profit of the Company for the
        year ended on 31st March, 2010;
iii     proper and sufficient care has been taken for the maintenance of adequate accounting records in
        accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company,
        and for prevention and detection of fraud and other irregularities;
iv      Annual Accounts have been prepared on a "going concern" basis.

ACKNOWLEDGEMENTS
In conclusion, the Board wishes to thank the Central and the State Governments, financial institutions, public
and private sector banks, government agencies and non-government institutions who have extended their support
in the development and growth of your Company. We acknowledge the significant role played by the employees
and officers of the Company in contributing to the growth of the Company's business. The Board would also like
to thank all the shareholders for their support, the faith and confidence reposed by them in the Company.


                                                                                  For & on behalf of the Board


                                                                                           Sd/-
                                                                                      (M.PARSHAD)
                                                                             Chairman-Cum-Managing Director




                                                       28
A    n     n    u     a    l     R     e    p    o     r     t    2    0    0     9    - 10



                                                    Annuxure-8
      Statutory Auditors' Reports on Annual Accounts 2009-10
                 alongwith Management Replies and
          Comments of the Board Audit Committee/Board
STATUTORY AUDITORS' REPORTS
M/s. Gupta & Gupta (JSCA-1)
M/S Kishore & Kishore (JSCA-2)

M/s. Gupta & Gupta
2. We have audited, as per allocation of work by the management, the attached Balance Sheet of
    AGRICULTURE INSURANCE COMPANY OF INDIA LIMITED as at 31st March 2010, the annexed
    Miscellaneous Insurance Revenue Account of Crop Insurance and Profit and Loss Account and Cash Flow
    Statement for the year ended on that date in which are incorporated initialed trial balances of seventeen
    Regional Offices audited by the other auditors appointed by the Comptroller & Auditor General of India,
    covering major and material portion of the Financial Information which inter alia account for 100% of premium
    and claims. These financial statements are the responsibility of the Company's management. We are jointly
    and severally responsible (a) in respect of work which is not divided amongst us and is carried out by both
    of us, (b) in respect of joint decisions, (c) in respect of matters which are brought to the notice inter-se and
    on which there is an agreement, (d) compliance of disclosure requirements of applicable statues, (e)
    compliance of the relevant statue in audit report. Areas of audit work allocated to us by the management are
    as follows.
M/S Kishore & Kishore
Investment Accounts, Expenses of Management, Trial Balance of HO, Report U/s 619(3) (a) of the Companies
Act 1956 of HO and Tax Audit of HO including provision for Income Tax and Wealth Tax.

M/S Gupta & Gupta
Business Account-Premium and Claims including IBNR Provisioning,
Reinsurance-Premium and Claims, Consolidation of HO & RO Account compliance Of IRDA Regulations, Reports u/
s 619(3) (a) of the Companies Act, 1956 and consolidation thereof and Consolidation of HO & RO's Tax Audit Reports
M/S Kishore & Kishore
1. We, along with M/s Gupta & Gupta, Joint Statutory Auditors (JSA), has audited, as per our mutually agreed
   allocation of work, the attached the Balance Sheet of AGRICULTURE INSURANCE COMPANY OF INDIA
   LIMITED as at 31st March 2010, Miscellaneous Insurance Revenue Account of Crop Insurance, and Profit
   and Loss Account and Cash Flow Statement for the year ended on that date, in which are incorporated
   returns of seventeen Regional Offices audited by the other firms of Chartered Accountants, which have
   been taken into consideration by us. These financial statements are the responsibility of the Company's
   management. Our responsibility is to express an opinion on these financial statements based on our audit.
MANAGEMENT REPLIES
Both the joint statutory auditors themselves had mutually agreed upon the allocation of work under their signatures,
which is formally recorded under the signatures as confirmed by JSCA-2 and as such, the statement made by
JSCA1 is not factually correct.
As regards Branch Audit, all the 17 branch auditors had submitted their Reports under their official seal and full
signatures. 15 of them had put their full signatures, whereas only 2 of them (Jaipur and Bhubaneshwar) had
signed the trial balance under their official seal by putting their initials. However, as on date, these 2 Trial
Balances have also been submitted by the respective Auditors with their official seal and full signatures.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The Management is not required to allocate the work amongst the Joint Auditors and it is in order that they
themselves had allotted the work.




                                                        29
                   Agriculture Insurance Company of India Limited


M/s. Gupta & Gupta
Our responsibility is to express an opinion on these financial statements based on our Audit. This separate Audit
Report expresses our opinion primarily on the work allocated to us including some common areas. We are not
aware of reason/s, which compelled the JSCA in not agreeing to matters in our report including on those, which
are allocated to us, warranting separate audit reports .This is despite the fact that they were kept update on our
areas of concern including some relating to them on a regular basis. Joint discussions were kept in abeyance for
discussions till even the date of signing this report, for reasons not known to us. As the separate final audit
report of the joint auditor has not been provided to us and, we have been asked to sign the financial statements
without their report, we could not address issues that could have a bearing on our report. Our attempts for joint
discussions on the separate audit reports and our request with the JSCA to provide us their final separate audit
report on 13.09.2010 failed, despite the meeting called by the Company's Secretary in the matter.
M/S Kishore & Kishore
4. Based on the Draft Audit Report of the JSA, M/s Gupta & Gupta, placed in the Audit Committee Board
   Meeting held on 09th September, 2010 and their Senior Partner's statement in the said meeting that but for
   cosmetic changes, their report was final and further to the discussions held with them and as communicated
   to us during the course of the Audit, we have, with due regards to the opinion of our JSA, deemed fit to issue
   a separate Audit Report on the final accounts of the Company for the year. The reasons for a separate
   report include the following:
   ●    The Clarificatory amendments have been made by the Company in their Accounting policy no. 3.1 and
        their ultimate impact on the Accounts has been disclosed in the Note No. 4.8 of the Notes to Accounts.
   ●    The "Reserve for Unexpired Risks" according to us, has been created by the Company as per the
        existing legal provisions.
   ●    The Company has disclosed in its Note No. 4.23 of the Notes to Accounts the amount of claims actually
        crystallised upto 30.06.2010 against the IBNR provision made on 31.03.2010.
   ●     We have placed full reliance on the amount of liabilities ascertained and certified by the technical
        expert, the Actuary, on which the concurrence of the IRDA was also obtained by the Company;
   ●    The Branches' audited returns, in our opinion, are as per IRDA regulations and the prevailing practice in
        the general insurance industry.
   ●    The General observations of the JSA that there are deficiencies on the working of the Company, are,
        vague and unsubstantiated;
   ●    The comments of the JSA on the veracity of the Scheme (NAIS) is not in the purview of the Auditors and
        beyond the scope of auditing;
MANAGEMENT REPLIES
It is for the joint statutory auditors to decide whether to submit a common report or separate reports. In the
opinion of JSCA-2 (who are the continuing Auditors for the last four years and thus, are well aware of the
statutory provisions, IRDA regulations, the scheme provisions, the Company's nature of business and business
processes, the industry practice and the past practices followed by the Company), since the Audit observations
of JSCA-1 were "vague and unsubstantiated", the former deemed it proper to give a separate report.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The reasons given by JSCA-2 for submission of a separate report are appropriate, logical, and in line with
statutory provisions & regulatory requirements.
M/s. Gupta & Gupta
3. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards
    require that we plan and perform the audit to obtain reasonable assurance about whether the financial
    statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
    the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
    principles used and significant estimates made by the management, as well as evaluating the overall financial
    statement presentation. We believe that our audit provides a reasonable basis for our opinion.




                                                       30
A     n    n     u    a     l     R     e     p    o     r     t    2     0    0    9     - 10


M/S Kishore & Kishore
3. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
MANAGEMENT REPLIES
Both of them have stated the factual position, hence noted.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted
M/s. Gupta & Gupta
4. We further report that :
3.1 Accounting Policy 3.1 and 3.2: The Company follows accrual basis of accounting except for premium income
    which is accounted for on cash basis. Consequently it also does not make provision for possible claims with
    respect to which it has already assumed risk under various Government schemes, which consists almost all
    of Company's premium income, but has not received the premium in cash by the end of the year. This is
    inconsistent with generally accepted accounting principles, and is not in conformity with the provisions of the
    Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor's Report
    of Insurance Companies) Regulations, 2002, The Insurance Act, 1938 read with rules there-under nor the
    Companies Act, 1956 in regard to following fundamental assumptions of accrual accounting. It leads to an
    understatement of the company's income, expenses and provisions. This practice is explained by Accounting
    Policy No. 3.1 and 3.2 that are being used by the company with the concurrence of IRDA vide their letter
    dated 26-08-2010. On a reference made by the Company's appointed actuary to the Authority in reference
    to the Company's Accounting Policies, the authority has advised the Company to continue with the existing
    practice of revenue recognition till further orders and has indicated that it is referring the matter to an internal
    committee which looks into updating of the Regulations. Impact of these matters has not been determined
    and hence its effect can not be quantified.
M/S Kishore & Kishore
5. Attention is invited to the Company's Significant accounting policies No. 3.1 and 3.2, according to which
   premium in respect of NAIS, a Government of India Scheme, where risk is assumed for Rabi Crop in
   accordance with the relevant provisions of the scheme, notwithstanding the delay in receipt of premium by
   the Company upto 31st March of the year from the Nodal Agencies / Central / State / Union Territory
   Government / Government Agencies as per IRDA concurrence vide their letter No. 34-1 / IRDA / Actt / IBNR
   / AIC /2009-10 dated 26.08.2010, the net effect of premium for the year being understated by Rs.7,83,69
   thousand and claims understated by Rs.6,18,36 thousand, resulting in overall net impact of understating the
   net profit for the year by Rs.1,65,33 thousand (refer Note 4.8 of Annexure-2).
4. The Clarificatory amendments have been made by the Company in their Accounting policy no. 3.1 and their
   ultimate impact on the Accounts has been disclosed in the Note No. 4.8 of the Notes to Accounts.
MANAGEMENT REPLIES
The Accounting Policy is in conformity with the provisions of the Insurance Act, and the same is being followed
by the Company consistently, except to the extent that the risk is assumed in respect of Government Schemes
for the entire crop-cycle from sowing to harvesting whereas the premium gets collected from the farmers by the
banks in due process within the cut-off dates as stipulated in the Scheme. Similarly, a part of the premium in the
form of Government subsidy to farmers gets released by the Government as per their availability of funds. On a
reference being made to IRDA, based on the advice of JSCA-1, vide their letter dated 12.07.10, IRDA has given
concurrence to continue the present practice while referring the matter to their internal committee for updating
the Regulation, vide their letter dated 26.08.2010. We may add that claims are paid only upon receipt of full
premium/Govt. subsidy. Inspite of IRDA concurrence to our present practice, the remarks of JSCA-1 that impact
of this matter has not been quantified is without any substance.




                                                          31
                    Agriculture Insurance Company of India Limited


COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Since the Company is implementing the govt. schemes in the managerial capacity, the implementation of the
schemes has to be in accordance with the purpose for which the schemes have been introduced by the govt.
Moreover, the practice followed by the Company is in order since been approved by IRDA.
M/s. Gupta & Gupta
3.2 Accounting Policy no. 5.9 and 5.10 refer to the treatment of income on investment of funds received from the
    government towards specific funds, viz. NAIS Corpus Fund. In regard to balances of Corpus Fund of Central/
    States/UTs included in Schedule 7 of the Annexure to the Balance Sheet required to be managed by the
    Company deficiencies inter alia included (a) Separate accounts to deal with the funds as required under the
    NAIS were not maintained, (b) Credits aggregating Rs 9.69 crores have been given to relevant funds for the
    year (i) as Income Share as a proportion of the total investment income stated to be on the instructions of
    C&AG, since 2003-04, (ii) The accretion is made on the opening balances and not on running balances, (iii)
    the surplus is reduced from the income and not considered for Company's tax liability, (iv) Operation of the
    scheme and modalities to manage the scheme, if any, of the providers of the funds was not made available.
    Non compliance of the provisions as contained in NAIS and impact on accounts of matters referred above
    including tax liability remains unexplained.
M/S Kishore & Kishore
6 (c)The Company has provided interest on the Corpus Fund as per their past practice.
6 (b) Balances due to / due from the Central Govt, State Govts and UTs, as per Schedule - 7, are subject to
    confirmation and consequential adjustment, if any, - amount indeterminate.
MANAGEMENT REPLIES
The sharing of income from investments among the Policyholders' Fund, Shareholders' Fund, and the Corpus
Fund is made in the ratio of the balances standing in the respective fund at the beginning of the year in terms of
the significant accounting policy adopted by the Company and being followed by the Company consistently, on
the advice of C&AG, since 2003-04. There are no specific provisions in the scheme (NAIS) in this regard and
thus, no question of non-compliance thereof. JSCA-2 has confirmed that "The Company has provided interest
on the Corpus Fund as per their past practice".
The Company has attached to the Annual Accounts (Annexure - 7) the statement of Accounts of Govt. of India
and the various State Govts. / UTs showing the amounts received from them and the utilization thereof during
the year along with the opening and closing balances in their respective accounts. There is no such practice of
any Govt. giving balance confirmation.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The practice of crediting Corpus Fund with the proportionate investment income is as per the Board approved
significant accounting policy and is followed by the Company in the past, as confirmed by JSCA-2. It is noted
that there is no such practice of balance confirmation by Govt.
M/s. Gupta & Gupta
3.3 Accounting Policy no. 8.1 refers to the policy followed for creating the reserve for unexpired risks (RUR) in
    which premium includes receivables while A.P. 3.2 refers to accounting of premium received. The reserve for
    unexpired risk, though the quantum of reserve created is as required under Section 64V (1) (ii) (b) of the
    Insurance Act, 1938 read with second part para 2 of IRDA Regulations 2002 seems to be in excess of the
    requirements of the provision of the first part of the said para, which provide for the quantum of reserve to be
    created equal to the amount representing that part of the premium written which is attributable to, and to be
    allocated to the succeeding periods. The methodology adopted in creating reserve was found to have not
    considered its appropriateness in the light of company's business process and accounting policies followed in
    accounting premium income and assuming risks. These inter alia include, (a) Premium income is accounted
    on receipt basis and not on earned basis, (b) The first limb of IRDA requirement that reserve is to be created
    as the amount representing that part of the premium written which is attributable to, and to be allocated to the
    succeeding accounting periods has not been determined or disclosed, (c) As the Company is following cash
    accounting for premium income, inclusion of any component of receivables referred to in the policy is inconsistent
    to the policy and facts, (d) Considering premium that has been used up before the close of the year, i.e. in
    respect of Kharif Crop, (e) exclusion of earned premium stated to be as per schemes but not received upto



                                                         32
A    n     n    u     a    l      R    e     p     o    r     t    2     0    0     9    - 10



    31.03.2010. On a reference made by the appointed actuary of the Company, IRDA accepted our suggestion
    of not making provision for Kharif Season which gets expired during the financial year itself, but made it
    effective from FY 2010-11, and gave specific relaxation to the company from the provisions of Section 64V(1)(ii)(b)
    of the Insurance Act, 1938 until then. In respect of matters other than (d) above, no reference was made to the
    Authority. Impact, if any, of such matters is not ascertainable and hence cannot be quantified.
M/S Kishore & Kishore
4. The "Reserve for Unexpired Risks" according to us, has been created by the Company as per the existing
   legal provisions.
MANAGEMENT REPLIES
It is mandatory that a minimum of 50% of Net Premium underwritten within the preceding 12 months has to be
provided for as RUR. If we go by the advice of JSCA-1 of providing less than 50% will be in contravention of the
Act provisions and IRDA Regulations. Thus, the Company has provided for RUR of Rs. 634.25 crore as on
31.03.2010 @ 50% of net premium of Rs. 1268.51 crore underwritten during the preceding 12 months i.e. 2009-
10, as stipulated u/s 64V(I)(ii)(b) of Insurance Act and IRDA Regulations on Preparation of Financial Statements
and Auditors' Report. The Act provisions/IRDA Regulations are categorical and unambiguous and there is no
scope for any alternate interpretation. As regards calculation of RUR in terms of the first limb of IRDA regulation,
as stated by JSCA-1, we would like to state that since the policy period in respect of Kharif season comes to an
end within the financial year itself, only the Rabi season over flowing into the succeeding year, and the Kharif
premium being almost three times of the Rabi premium, the amount of premium which can be attributed and
allocated to the succeeding accounting period cannot in any case be more than the Rabi premium. In such a
case, the provisions of the 2nd limb of the IRDA's regulations only would be applicable. We have thus provided
for RUR of Rs. 634.25 crore as on 31.03.2010, being 50% of the net premium underwritten during 2009-10,
Thus, there is no financial impact and consequently, no question of quantification thereof. In view of the above,
there is no premium deficiency either. On a reference made by the appointed actuary of the Company to IRDA,
the Regulator while agreeing for not making any RUR provision for Kharif Season, which gets expired during the
financial year itself, has given to the Company specific relaxation from the provisions of Section 64V(1)(ii)(b) of
the Insurance Act, 1938 effective from FY 2010-11. The statutory provisions in this regard up to 2009-10, however,
remains unchanged and have accordingly been adhered to. JSCA-2 has also confirmed that "The Reserve for
Unexpired Risks according to us has been created by the Company as per the existing legal provisions". In view
of the factual position as above, the question of any financial impact and/or quantification thereof does not arise.
And, the comments of JSCA-1 in this respect do not have any legal sanctity.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The provision made by the Company is in order since the same is line with the statutory provisions.
M/s. Gupta & Gupta
3.4 (i) Accounting Policy 9.1.1 - The policy states that the estimated liability for outstanding claims is provided
        for at year-end in terms of the concerned scheme/policy provisions. This seems to indicate that such
        liability is based on information/intimation as available and received only up to the year end and ignores
        information available post Balance Sheet date. However, no consistency was followed in determining
        the amount of liability in respect of claims settled/identified post 31.03.2010. Deficiencies inter-alia
        included, (a) Not giving effect to all identified claims settled for a materially higher/lower amount in the
        post audit period, (b) Branch auditors failed to report non provision of liability of material amount of
        claims crystallized and sent to HO for approval, some of which provided at HO by internal exercise
        including some identified by us, (c) No confirmation from Branch Auditors was obtained for changes
        made at HO, (d) Carrying claims in IBNR despite some of those having crystallized, (e) Some known
        post Balance Sheet Data was considered while some ignored.
    (ii) Accounting Policy no 9.2 -- The Company has provided a sum of Rs. 676.57       crores for NAIS and Rs.
         24.80 crore for Non-NAIS (Previous year Rs 465.41 crores for NAIS and Rs. 6.02 crores for Non-NAIS)
         towards IBNR claims based on actuarial certification of appointed actuary. It appears that though the
         appointed actuary has adopted a special method for crop insurance permitted in IRDA guidelines, the
         methodology appears to have ignored past history, claim data and post Balance Sheet date information.
         Effect of the same is not ascertainable and hence, impact if any can not be quantified.




                                                         33
                   Agriculture Insurance Company of India Limited


M/S Kishore & Kishore
4. We have placed full reliance on the amount of liabilities ascertained and certified by the technical expert,
   the Actuary, on which the concurrence of the IRDA was also obtained by the Company
6 (h) The IBNR liability under NAIS as on 31st March 2010 as certified by the Appointed Actuary amounts to Rs.
    675,87,24 thousand, and also concurred by IRDA, however, liability to the extent of Rs. 116,97,60 thousand
    subsequently crystalized upto 30.06.2010 at Rs. 94,90,21 thousand, has resulted in excess provision of
    liabilities for IBNR to the extent of Rs. 22,07,39 thousand on 31st March 2010, also resulting in understatement
    of the Profit for the year by the same amount (refer Note 4.23 of Annexure 2).
MANAGEMENT REPLIES
Estimation of liability in respect of claims is strictly in accordance with the Accounting Policy being followed by
the Company consistently and is in accordance with the Scheme / Policy Provisions. All those claims which got
crystallized upto 30th April, 2010 were provided for on actual basis as outstanding claims based on the observation
made by JSCA-1 vide their letter dated 22.06.2010.
(a)     As already stated above, claims which were crystallized upto 30th April, 2010 irrespective of higher or
        lower amount have been provided for on actual basis as outstanding claims and the same was done
        based on their observation and was submitted to them for their verification.
(b)&(c):- As per the practice followed by the company, provision for outstanding claims are made at RO level in
         respect of approved claims. Necessary provisioning for such outstanding claims which have been referred
         by RO to HO for its approval, is made at HO level since the actual liability is known to HO. Further IBNR/
         IBNER provisioning in respect of all such claims for which the required data is not available as on
         31.03.2010, is made at HO level as per the actuarial certification.
(d) & (e) Since, all crystallized claims upto 30.04.10 as per the their observation have been taken out of IBNR/
         IBNER provisioning and have been provided for as outstanding claims on actual basis, there is no
         question of any inconsistency and/or any financial impact since all claims in respect of premium booked
         during 2009-10 have been fully provided for as per the details already submitted to them.
3.4 (ii) IBNR, including IBNER, provisioning as on 31.03.2010 is based on the actuarial certification. The report
         of the Appointed Actuary states the methodology adopted, including the changes, if any, made during
         the year and the assumptions taken in to account while estimating such liability. As far as NAIS portfolio
         is concerned, there is no change in the methodology adopted by the Actuary since the provision for the
         same has been made on the basis of the maximum possible liability of the Company in terms of the
         provisions of the Scheme. However, for non-NAIS business, the Actuary has suggested bifurcation
         thereof into 'weather-based' and 'non-weather-based'. As regards non-weather-based, he has applied
         the rate of 10% and for weather-based the rate of 7.5% of the excess of the actual experience over the
         expected incurred claims as against 10% of the outstanding claims for both weather-based and non-
         weather-based followed in the previous year. Since, the share of Non-NAIS portfolio has increased
         substantially during 2009-10, for which the entire claims liability rests with the company, the Appointed
         Actuary has deemed it fit to apply a more robust methodology (as against the notional IBNR @10% in
         the previous years) taking into consideration the data-base developed over the previous years. The
         difference as a result of this change in methodology during 2009-10 vis-à-vis the previous year has
         resulted into higher IBNR/IBNER of Rs.8.17 crore. As advised, this is disclosed by way of a note in
         Notes to Accounts (4.19). Also, it is important to mention that the estimation of liability for IBNR/IBNER
         has since been verified and confirmed as correct by IRDA vide their letter dated 9th August, 2010.
         Based on the above, we would like to add:-
        (a) that proper consideration has been given to the past data by the appointed actuary in his report and
            necessary comparison has been made with the existing MPL method being followed by the company
            in respect of NAIS portfolio.
        (b) The appointed actuary has been bestowed with the responsibility and the authority to decide on the
            methodology adopted for estimation of IBNR/IBNER in terms of the IRDA guidelines on mathematical
            estimation of IBNR claims provisions vide IRDA Circular No.11/IRDA/ ECTL/IBNR/2005-06 dated
            08.06.2005. The estimation of liability including methodology is further approved by IRDA.




                                                        34
A    n     n    u    a     l     R    e     p    o    r     t    2    0     0    9    - 10


COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Since IRDA has given approval for the IBNR/IBNER provision as per the certification and report of the appointed
actuary, who has examined all the related issues, the provisioning made by the Company is in order.
M/s. Gupta & Gupta
3.5 Note no 2.2 -- Balance due from GIC as on 31.03.2010 of Rs 2.18 crores is subject to reconciliation and
    confirmation, and the consequential effect, if any, on reconciliation which is in progress is not determinable
M/S Kishore & Kishore
6 (a) Assets and liabilities relating to crop insurance business taken over from GIC are subject to approval of the
    Government of India and the balance of Rs. 2,18,56 thousand due from GIC on 31.03.2010 is subject to
    confirmation and consequential adjustment, if any, - amount indeterminate (refer Note No. 2.1 & 2.2 of
    Notes on Accounts - Annexure -2).
MANAGEMENT REPLIES
GIC A/c stands reconciled and its only a matter of confirmation which is still awaited from them. The amount
involved being Rs. 2.18 crore is insignificant keeping in view the volume of the Company's business and thus
would have no material impact on its profitability and/or net worth.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Agree with the Management
M/s. Gupta & Gupta
3.6 Note no 4.17 -- Advances include Rs 200 crores paid during the year to the credit of Consolidated Fund of
    India demanded by the GOI out of Company's retained profits/ reserves and surplus (created out of NAIS
    activity) towards Government of India's share for meeting additional expenditure on Crop Insurance pursuant
    to directions/demand by the Ministry of Finance (Insurance Division). The withdrawal is stated to be a
    prelude to the recasting of the scheme and stopping the excess premium of individual States being
    appropriated as profits by the Company. The said withdrawal was an ad hoc payment subject to adjustment
    on recasting of the existing scheme. A reference was made to IRDA before carrying out the proposal to
    share surplus generated over the past six years because of revision of NAIS with retrospective effect, and
    the Authority subject to the confirmation that the stipulations laid down for revision of NAIS will be complied
    with as and when the scheme is revised approved the proposed withdrawal from the available surplus from
    NAIS. We are unable to verify the accuracy of this balance, and the accounting treatment of activities
    surrounding it, for the reasons inter alia, (a) The minutes of the 36th Board Meeting held on 26th February
    2010, Item No. 3a-ATR in respect of payment of Rs 200 crores made on 29.12.2009 to GOI, the Board
    recorded that this amount was received back from the Government of India on 5th January 2010, and was
    utilized for discharging GOI's liability towards claims under NAIS. (b) On the basis of information provided to
    us there is no indication that this amount is expected to be paid back by the Government of India to the
    company, (c) The company has not maintained scheme-wise details of the surplus generated by various
    parts of its business or of the funds in which it has been invested; therefore, we are unable to ascertain that
    this amount of Rs. 200 crores has been withdrawn from the profits/reserves and surplus created out of NAIS
    activity. (d) As the Government of India is not a shareholder of the company, using the company's surplus or
    Reserves to make a payment to it is inconsistent with the concepts of corporate law and accounting principles,
    (e) assuming that the Company was duty bound to release the payment, not adjusting partly or fully the
    amount either as an item of Profit & Loss Account or reduction from Reserves & Surplus is not in line and
    conformity with the demand of withdrawal made by the GOI or the approval of IRDA
M/S Kishore & Kishore
6 (l) The sum of Rs. 200 crore paid by the Company during the year to the credit of Consolidated Fund of India
     as per the Government of India letter No. F No C-13014/16/2004-Ins.I, dated 23/12/2009 as a prelude to the
     recasting of the Scheme by them and accounted for by the company as "Other Advances" under Assets as
     on 31/03/2010, lacks confirmation from the Government for showing the said amount by the Company as
     receivable from them on the said date (refer Note no. 4.17 of Annexure-2)




                                                       35
                    Agriculture Insurance Company of India Limited


MANAGEMENT REPLIES
The Govt. of India vide its letter dated 23.12.2009 called for Rs. 200 crore as an ad-hoc payment, subject to
adjustment on recasting of the existing scheme (NAIS), which was duly approved by the Board and subsequently
also approved by IRDA, vide their letter dated 01.01.2010. The money received back from Govt. was like any
other remittance from them for implementation of the scheme and was obviously not intended to be adjusted
against the said ad hoc payment. The Board had taken due note of the same. The Company had calculated the
surplus generated under NAIS and informed the Board as well as IRDA of the same. The accounting treatment
given to the ad hoc payment of Rs. 200 crore by showing this as an advance to the Govt. of India pending
recasting of the scheme is in terms of the demand letter dated 23.12.2009 from Govt. of India. The observation
made by JSCA-2 reflects the factual position as disclosed by the Company by way of a note under Notes to
Accounts (4.17 of Annexure - 2)
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Since the payment of Rs.200 crore to the government was as per the conscious decision of the Board and also
had the concurrence of IRDA, the accounting treatment in respect thereof, as an ad-hoc advance, pending
recasting of the Scheme by the government, is in order.
M/s. Gupta & Gupta
3.7 Note no 4.23 -- Not reducing the difference of Rs 22.44 crores from the provision held in IBNR of the
    crystallized liability of claims has resulted in showing a higher loss by Rs 22.44 crores, and ignoring other
    such identified crystallized claims for adjustment and not undertaking a fresh exercise in the light of continuing
    deficiencies for reason of directions of the Authority referred in 3.3 above.
M/S Kishore & Kishore
6 (h) The IBNR liability under NAIS as on 31st March 2010 as certified by the Appointed Actuary amounts to Rs.
    675,87,24 thousand, and also concurred by IRDA, however, liability to the extent of Rs. 116,97,60 thousand
    subsequently crystalized upto 30.06.2010 at Rs. 94,90,21 thousand, has resulted in excess provision of
    liabilities for IBNR to the extent of Rs. 22,07,39 thousand on 31st March 2010, also resulting in understatement
    of the Profit for the year by the same amount (refer Note 4.23 of Annexure 2).
4. The Company has disclosed in its Note No. 4.23 of the Notes to Accounts the amount of claims actually
   crystallised upto 30.06.2010 against the IBNR provision made on 31.03.2010.
MANAGEMENT REPLIES
Out of the amount of Rs.22,44,10,771, the necessary adjustment in respect of four States for a total amount of
Rs.1,10,67,325 had been made due to crystallization of claims before submission of IBNR statement to IRDA,
through the Appointed Actuary, by 30th April, 2010. The balance amount of Rs.21,33,43,446 still forms a part of
IBNR since certain material information in respect of these claims were awaited from the concerned states. In
any case, as advised, this has been disclosed in Notes to Accounts (4.23).
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
In view of the guidelines issued by IRDA, vide circular dated 08.06.2005, stipulating that the estimation process
should not discount the estimated future development of paid claims to the current date, the provision made by
the Company as per actuarial certification and approval of IRDA is in order.
M/s. Gupta & Gupta
3.8 Data contained in Note nos., 4.6, 4.21, 4.23, 5.2, 6.1,6.2, 7, 9,10, 12.2 and 21 of Annexure 2 and Annexure
    7 of the Financial Statements are as compiled by the management and we have not applied any checks for
    the validation or otherwise of the amounts stated.
MANAGEMENT REPLIES
It is for the Auditors to apply whatever checks they deem it necessary for the purpose of validation of the
accounts.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
If they have failed to apply the necessary checks, it reflects on their working and is not taken as an observation
in the audit report.




                                                         36
A    n     n    u     a    l      R    e     p    o     r     t    2    0     0    9    - 10


M/s. Gupta & Gupta
3.9 In response to our queries on deficiencies on the working of the Company and recognition of premium,
    provisioning for outstanding claims including IBNR and Reserve for Unexpired Risks, we were informed by
    the Company's management that the role of the Company as an insurance company is limited to that of an
    Implementing Agency as categorily stated in the Scheme(NAIS) itself. The management has stated that
    NAIS is more in the nature of providing financial support to the farmers in the event of failure of notified crops
    as a result of natural calamities more than an indemnity-based insurance scheme, and thus NAIS is not an
    insurance scheme in the true sense of the term as it does not embrace all the tenets of insurance principles
    and practices. The Company in support of the stand has also stated, (a) No insurance policy is issued since
    the coverage is strictly in terms of the government notification, (b) Both the premium rates and the claims
    liability are decided by the government, (c) Financial risk element for the company is limited to the extent
    notified, (d) Service Charges paid to the rural financial institutions for collection of premium from and
    disbursement of claims to the farmers is borne by the government, (e) Since NAIS is not an insurance policy
    in the strict sense of the term, but a benefit scheme of the government for farmers, the implementation
    thereof is required to be done in terms of the Scheme provisions, which may not always strictly coincide with
    the insurance principles and the statutory provisions, (f) The very fact that the government recalled Rs. 200
    crore from the Company during 2009-10 out of surplus generated out of NAIS portfolio confirms that it is not
    being run as an insurance scheme, but only as a government scheme for the benefit of farmers. Despite
    being registered as an insurance company and following rules and regulations contained in the Insurance
    Act, 1938 read with IRDA (Preparation of Financial Statements and Auditor's Report of Insurance Companies)
    Regulations, 2002 in the preparation of financial statements and the management report, the stand taken by
    the management that the terms of the scheme may not always strictly coincide with the insurance principles
    and the statutory provisions, remains unexplained.
M/S Kishore & Kishore
4. The General observations of the JSA that there are deficiencies on the working of the Company, are, vague
   and unsubstantiated
4. The comments of the JSA on the veracity of the Scheme (NAIS) is not in the purview of the Auditors and
   beyond the scope of auditing;
MANAGEMENT REPLIES
The Management had provided to JSCA-1 the details of the operational modalities of the scheme with a view to
making them appreciate the same vis-à-vis the insurance principles and practices. We do not know the purpose
of their placing the said details as a part of their audit report nor have they clearly mentioned as to what "remains
unexplained". The statement of JSCA-2 that "the General observations of the JSCA-1 that there are deficiencies
on the working of the Company are, vague and unsubstantiated", is conclusively self-explanatory. They have
also rightly stated that "the comments of the JSCA-1 on the veracity of the Scheme (NAIS) is not in the purview
of the Auditors and beyond the scope of auditing".
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The gesture of the Management to explain the scheme provisions and its Operational Modalities to JSCA-1
have not been taken by the later in the right perspective. Their observation is very vague with no specific details
as to what they want to convey by placing such a statement as a part of their audit report. Their observation has
no substance and needs to be ignored.
M/s. Gupta & Gupta
3.10 The financial accounting systems of the Company are decentralized and the entire component of financial
    transactions relating to premium and claims are carried out at 17 branches (Regional Offices) which are
    audited by the Branch Auditors appointed under section 619(2) read with Sections 215(3), 227(1) and 228
    of the Companies Act, 1956. Audit of these two significant components of the Company and consolidation of
    accounts falls in our allocation of work. The reports of the branch auditors, though purportedly expressing
    opinion on financial statements, have expressed opinion on the trial balances as reflecting a true and fair
    view of Revenue/Expenses and Assets/Liabilities of RO instead of a true and fair view of Balance Sheet,
    Profit & loss Account or Revenue Account as required. The reports of the branch auditors and financial
    statements referred to in the reports were not in the prescribed format. Furthermore, as required under




                                                         37
                   Agriculture Insurance Company of India Limited


    subsection (c) of Section 228(3) of the Companies Act 1956, these reports on the accounts of the branch
    offices examined by the branch auditors were not forwarded to us, and those were provided to us at the
    Head Office on dates much later. These reports also did not express opinion on all matters required. Therefore,
    we have not been able to apply analytical procedures or to perform procedures regarding the financial
    information of these two significant components audited by them and consolidated in the company's financial
    statements. Furthermore, HO could not provide us any records at HO which could have enabled us to apply
    some procedures for a cross check and verification. In respect of provision of claims apparent aberrations
    in the reported amounts of claims were noticed involving material amounts requiring revising results of ROs
    at HO level without concurrence from the respective branch auditors. We are therefore unable to express
    any opinion whether these two components reported in financial statements have been fairly and properly
    recorded. The issue of Branch Auditors reports on a trial balance not being in the format prescribed in the
    Regulation (Preparation of Financial Statements & Auditors Report), was referred to IRDA by the Company's
    appointed actuary. It was clarified by IRDA that formats prescribed by the Authority are applicable only to
    the Company and not at the branch level. In the light of the advice of IRDA, our reference to the certification
    of accounts by branch auditors not being in formats prescribed should be considered as a statement of fact
    with a purpose to draw attention, and not a qualification.
M/S Kishore & Kishore
4 The Branches' audited returns, in our opinion, are as per IRDA regulations and the prevailing practice in the
   general insurance industry.
6 (f) In our opinion, proper returns audited from other Regional Offices have been received and are adequate for
     the purpose of our audit.
MANAGEMENT REPLIES
3.10 Regarding audited returns from branches, while JSCA-2 confirmed the adequacy of information and
    adherence to rules and regulations and in consonance with the prevailing practice in the general insurance
    industry, the statement of JSCA-1 to the contrary does not reflect the fact because the Branch Auditors who
    are appointed by C&AG have submitted their Reports along with the Trial Balances & the relevant Schedules
    which were all made available to them for their review. As per the industry practice and also the practice
    followed by the Company in the past, the branch offices (Regional Offices in our case) submit only Trial
    Balance along with the related details duly audited and certified by the branch auditors. As already stated
    above, there is no prescribed format of the returns to be submitted by the branch auditors. Balance sheet,
    Profit & Loss Account and Revenue Account are prepared on the basis of the consolidated Trial Balance at
    HO level only. JSCA-1 has not specified any "analytical procedure' which they wanted to apply but could not
    do so for want of information from ROs nor have they stated requirement of any such specific information.
    The provisioning of claims has been made as per the practice followed by the Company as already explained
    under para 3.4 above.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The comments of JSCA-1 are vague with no specific details of the information required by them from the Trial
Balances of Regional Offices. So long as the Company has provided for all claims, the observation JSCA-1 is
frivolous and redundant. Moreover, JSCA-2 have found the branches' audited returns adequate for the purpose
of their audit. It is strange that JSCA-1 have no regard even to the clarification obtained from IRDA.
M/s. Gupta & Gupta
5. Further to our comments referred to in paragraph 3 above and subject to any adjustment that we might
    have found necessary in terms of limitations as specified in preceding paragraphs above, the impact of
    which on the Profit & Loss Account, Revenue Account and Balance Sheet is not determinable except to the
    extent wherever specified , we report that:
    a. We have obtained all the information and explanations which, to the best of our knowledge and belief
       were necessary for the purpose of our audit and we found them satisfactory;
M/S Kishore & Kishore
6 (d) We have obtained all the information and explanations, which, to the best of our knowledge and belief,
were necessary for the purpose of our audit and found them satisfactory;




                                                       38
A     n    n     u     a    l     R     e     p     o    r     t     2    0     0    9     - 10


MANAGEMENT REPLIES
Management replies to various points under para 3 have already been given above, hence needs no further
comments
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted.
M/s. Gupta & Gupta
b. In our opinion, proper books of accounts have been maintained by the Company as far as appears from an
    examination of those books.
M/S Kishore & Kishore
6 (e)In our opinion, proper books of accounts as required by law have been kept by the Company so far as it
    appears from our examination of those books.
MANAGEMENT REPLIES
Noted that both the auditors have confirmed maintenance of proper books of accounts.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted.
M/s. Gupta & Gupta
c. In our opinion, audited returns received from Branches (ROs) were not adequate for the purposes of our audit.
M/S Kishore & Kishore
6 (f) In our opinion, proper returns audited from other Regional Offices have been received and are adequate for
     the purpose of our audit.
MANAGEMENT REPLIES
There is no prescribed format of the returns required to be submitted by the branch auditors and the set of
returns which are received from them are being followed for several years. On a reference being made to IRDA,
the Authority has confirmed that "Regarding Branch accounting issue, please note that the formats prescribed
by the Authority are applicable only to the Company and not at the branch level". Further, the observation made
by JSCA-2 reflects the true factual position along with their confirmation that the audited returns received from
the ROs are adequate for the purpose of audit.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The position is crystal clear and the observation of JSCA-1 is superficial and uncalled for with no consequential effect.
M/s. Gupta & Gupta
d. The Balance Sheet, Revenue Account, Profit & Loss Account and Cash flow statement dealt with by the
    report are in agreement with the books of account and returns.
M/S Kishore & Kishore
6 (g) The Company's Balance Sheet, Revenue Account and Profit & Loss Account and Cash flow statement
dealt with by this report are in agreement with the books of account and returns
MANAGEMENT REPLIES
Noted that both the auditors agree that the financial statements are in agreement with the books of accounts and
returns.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted.

M/s. Gupta & Gupta
e. The actuarial valuations of liabilities in respect of Claims "Incurred but not reported" (IBNR) is duly certified
    by the appointed actuary and approved by the Authority. Attention is drawn to para 3.3 above on issues
    relating to the provision. Some of the issues were referred by the appointed actuary to IRDA, who, while
    understanding the situation, advised to proceed as per certificate issued earlier.




                                                          39
                   Agriculture Insurance Company of India Limited


MANAGEMENT REPLIES
Position already clarified under 3.3 above. Needs no further comments.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
No comments other than what is stated in 3.3 above.
M/s. Gupta & Gupta
f. All the directors of the company are nominees of public financial institutions or Government of India and as
    per General Circular no. 8/2002 dated 22/08/2002 of the Department of Company Affairs, the nominee
    directors appointed on the board of the Company by public financial institutions, within the meaning of
    section 4A of the Companies Act, 1956, and Central Government are exempt from the applicability of the
    provisions of Section 274 (1) (g) of the Companies Act, 1956.
M/S Kishore & Kishore
6 (i) All the directors of the company are nominees of public financial institutions or Government of India and as
     per General Circular No. 8/2002 dated 22/08/2002 of the Department of Company Affairs, the nominee
     Directors appointed on the Board of the Company by public financial institutions, within the meaning of
     section 4A of the Companies Act, 1956, and Central Government are exempt from the applicability of the
     provisions of Section 274 (1) (g) of the Companies Act, 1956.
MANAGEMENT REPLIES
Noted
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted
M/s. Gupta & Gupta
g. In our opinion and according to the best of our information and according to the information and explanations
    given to us Balance Sheet, Revenue Account and Profit & Loss Account are in compliance with the
    Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 except, (a) AS 1 read with
    sub section (3) (b) of Section 209 of the Companies Act, 1956 in not following accrual basis of accounting
    in respect of premium income and claims, (b) AS 4 not considering events occurring after the Balance Sheet
    date, and (c) Para 2 of Part I of Schedule B of The Insurance Regulatory and Development Authority
    (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002 in
    not recognizing premium income over the contract period or the period of risk including non accounting and
    disclosure of premium received in advance.
M/S Kishore & Kishore
6 (j) In our opinion, the Balance Sheet, Revenue Account and Profit & Loss Account comply with the Accounting
Standards referred to in Section 211 (3C) of the Companies Act, 1956, to the extent applicable to the Company
and are also in conformity with the accounting principles as prescribed in the IRDA (Preparation of Financial
Statements and Auditor's Report) Regulations, 2002, or any order or direction issued by IRDA in this behalf.

MANAGEMENT REPLIES
The provisions of AS 1 stipulating the fundamental accounting assumptions of consistency, going concern and
accrual accounting (to the extent applicable) are being followed by the Company. AS 9 dealing with recognition
of income specifically provides for non-application thereof in respect of insurance premium income on accrual
basis. As regards AS 4 i.e. the events occurring after the Balance Sheet date, particularly, in the context of
provisioning for claims, is not applicable in view of the specific guidelines on estimation of IBNR issued by IRDA
stating that the estimation process should not discount the estimated future development of paid claims to the
current date.. The position is correctly reflected in the audit observation made by JSCA-2.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The policy/practice being followed by the Company based on the fundamental accounting assumptions of
consistency, going concern, 12 months' accounting and accrual accounting, to the extent applicable to the
Company, satisfies the requirement of the accounting standards as confirmed by JSCA-2.




                                                       40
A    n     n    u     a    l     R     e    p     o    r     t    2     0    0    9     - 10


M/s. Gupta & Gupta
6. We further report that:
a. In our opinion and to the best of our information and belief and according the explanations given to us, the
    said accounts, subject to our observations in paragraphs 3 above and their consequential effect, if any,
    which is not ascertainable except wherever quantified, give a true and fair view in conformity with the
    accounting principles generally accepted in India
    (i) In the case of the Balance Sheet of the state of affairs of the Company of the financial year ended 31st
          March, 2010;
    (ii) In the case of the Revenue Account, of the Deficit in Miscellaneous insurance business for the financial
          year ended 31st March, 2010;
    (iii) In the case of the Profit & Loss Account, of the Profit for the financial year ended 31st March, 2010; and
    (iv) In the case of the Cash Flow Statement, of the cash flow for the financial year ended on 31st March,
          2010.
M/S Kishore & Kishore
6 (m) In our opinion and to the best of our information and according to the explanations given to us, the said
    accounts read with significant accounting policies and notes thereon are prepared and give the information
    as required by the Insurance Act, 1938, the Insurance Regulatory and Development Authority Act, 1999,
    and the Companies Act, 1956, to the extent applicable and in the manner so required and, subject to our
    observations in paragraph 6 (l) regarding payment of Rs. 200 crores to the Govt. of India, paragraphs 5 and
    6 (h) regarding clarificatory impact of accounting policy and impact of post - balance sheet events respectively
    on understating of the profit for the year by Rs. 23,72,72 thousand and overstating the liabilities and provision
    as at 31.03.2010 by the same amount and indeterminate consequential impact of para 6(a) and 6(b) due to
    lack of confirmations on the accounts, give a true and fair view in conformity with the accounting principles
    generally accepted in India:
    (i) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2010;
    (v) in the case of the Revenue Account, of the surplus in Miscellaneous insurance business for the year
          ended on 31st March, 2010;
    (vi) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on 31st March,
          2010; and
    (vii) in the case of Cash Flow Statement, of the cash flow for the year ended on 31st March, 2010.
MANAGEMENT REPLIES
Management replies on their observations in regard to various points under para 3 are given alongside the
specific para above.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Agree with the individual item-wise comments as above.
M/s. Gupta & Gupta
b. The Financial Statements stated at (a) above read together with the Accounting Policies and Notes to Accounts
    are prepared in accordance with the Insurance Act, 1938 (4 of 1938), the Insurance Regulatory and Development
    Authority Act, 1999 (41 of 1999), Insurance Regulatory and Development Authority ('IRDA') (Preparations of
    Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002 ('the Regulations')
    and the Companies Act, 1956 (1 of 1956) to the extent applicable and in the manner so required.
M/S Kishore & Kishore
2. The Balance Sheet, Profit and Loss Account and Revenue account have been prepared in accordance with
   the provisions of Section 11(1) of the Insurance Act, 1938, read with the provisions of sub sections (1), (2)
   and (5) of Section 211 and sub section (5) of Section 227 of the Companies Act, 1956, to the extent applicable
   and also as per the provisions of Insurance Regulatory and Development Authority (IRDA) Act, 1999.
MANAGEMENT REPLIES
Noted that both of them have confirmed that the financial statements are in order.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted



                                                        41
                    Agriculture Insurance Company of India Limited


M/s. Gupta & Gupta
c. Whether, the investments have been valued in accordance with the provisions of the Insurance Act, 1938
    and the applicable IRDA Regulations, 2002 is reported in the separate Audit Report of the other JSCA.
M/S Kishore & Kishore
6 (k) In our opinion, the investments have been valued in accordance with the provisions of the Insurance Act,
    1938 and the applicable IRDA Regulations, 2002.
MANAGEMENT REPLIES
As per the mutually agreed upon allocation of work amongst the joint statutory auditors, the investment portfolio
has been verified by JSCA-2, who have confirmed that " the investments have been valued in accordance with
the provisions of the Insurance Act, 1938 and the applicable IRDA Regulations, 2002".
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted
M/s. Gupta & Gupta
d. The accounting policies selected by the company are appropriate and are in compliance with the applicable
    accounting standards and with the accounting principles as prescribed in The Insurance Regulatory and
    Development Authority (Preparation of Financial Statements and Auditor's Report of Insurance Companies)
    Regulations, 2002 or any order or direction issued by the IRDA in this behalf.
6.   We further certify that:
     (a) In view of the fact that the reports of the Branch Auditors of 17 Branches (ROs) do not include certification
         of having reviewed the management reports at the branch level in the manner required under clause 3
         (a) of Schedule C of the Regulations, we are unable to review the management report attached to the
         financial statements of the company for the financial year ended 31st March 2010, for apparent mistake
         or material inconsistencies, if any. Further, except for a general letter of comfort, we have not been
         provided with any material in support of the contents, disclosures and assertions in the management
         report which we could examine with a view to certify whether or not there are any apparent mistake or
         material inconsistencies with the financial statements.
M/S Kishore & Kishore
7. Further, on the basis of our examination, we certify that:
As Statutory Auditors of the Company, we have reviewed the management report and there is no apparent
mistake or material inconsistency with the financial statements.
MANAGEMENT REPLIES
Since the Company has provided all records, documents and information as required by JSCA-1 (as they have
not mentioned any specific information required by them, but not provided to them), the observation made by
them in having not reviewed the Management Report for any apparent mistake or material inconsistencies is
factually incorrect. In any case, JSCA-2 have reviewed and confirmed that "there is no apparent mistake or
material inconsistency with the financial statements".
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
The comments of JSCA-1 are very vague, with no specific details. In any case, the other Auditors have confirmed
having verified the contents of Management Report with no apparent mistake or material inconsistency with the
financial statements.

M/s. Gupta & Gupta
(b) We are informed that no special terms and conditions have been stipulated in the registration except that
    in case of renewal of certificate evidence of prescribed fee having been paid is only required. In view of
    the explanation provided the question of whether the Company has complied or not with the terms and
    conditions of the registration stipulated by the Authority does not arise. However, of the seventeen Regional
    Auditors sixteen have reported compliance of the terms and conditions as laid down in Section 3(A) of the
    Insurance Act, 1938, and the remaining one has reported non-applicability of the provisions of the said
    section.




                                                         42
A    n     n    u     a    l     R     e    p     o    r     t    2     0    0    9     - 10


M/S Kishore & Kishore
7 (a) As per information and explanations given by the management, the terms and conditions as laid down in
    Section 3(4) of the Insurance Act, 1938 regarding registration have been complied with.
MANAGEMENT REPLIES
The terms and conditions of registration have been complied with as certified by JSCA-2.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted
M/s. Gupta & Gupta
AUDITORS CERTIFICATE
In accordance with the information and explanations given to us and to the best our knowledge and belief based
on our examination of the books of accounts and records maintained by the Company for the year ended 31st
March 2010, we certify that:
(a) We have not verified the cash balances and the securities relating to the loans and investments made by the
    Company, which is allocated to other JSCA.
M/S Kishore & Kishore
7 (c) We have verified the cash and bank balances and investments on the following basis:
Cash          : Physical verification and Branch Auditors' reports.
Bank Balance : Bank certificate and Branch Auditors' reports.
Investments : Custodian certificate and Management certificate ;
MANAGEMENT REPLIES
As per the allocation of work mutually agreed upon between the joint statutory auditors, the verification of cash
& bank balances at HO and the Loans & Investment portfolio, has been done by JSCA-2 as certified by them in
their report.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted
M/s. Gupta & Gupta
(b) The Company is not the trustee of any trust
M/S Kishore & Kishore
7 (b) To the best of our information and explanations given to us and representations made by the Company, the
    Company is not a trustee of any trust;
MANAGEMENT REPLIES
Noted
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted
M/s. Gupta & Gupta
(c) Whether any part of the assets of the policyholder's funds have been directly or indirectly applied in
    contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and investment
    of policyholder's funds is reported in the separate Audit Report of the other JSCA.
M/S Kishore & Kishore
7 (d) To the best of our information and explanations given to us and on the basis of representations made by
    the Company, no part of the assets of the policyholders' funds has been directly or indirectly applied in
    contravention of the provisions of the Insurance Act, 1938, relating to the application and investments of the
    policyholders' fund.
MANAGEMENT REPLIES
As per the mutually agreed upon allocation of work amongst the joint statutory auditors, the investment portfolio
has been verified by JSCA-2 who have confirmed that no part of the assets of the policy-holders' fund has been
directly or indirectly applied in contravention of the Act provisions.
COMMENTS OF THE BOARD AUDIT COMMITTEE/BOARD
Noted




                                                        43
                Agriculture Insurance Company of India Limited



                                                                                       Annuexure-9
Statement of Board Meetings attended by the Directors
      during the period April 2009 to March 2010
                                         (As on 30.11.2010)

SN   Name                  Date of         Date of       1          2           3          4                   5
                           Appointment     Cessation
                                                         24.06.09   28.07.09 22.10.09 16.12.09 26.02.10

1    Mr. M. Parshad*       01.01.2006                    Present    Present     Present    Present             Present
2    Mr. Tarun Bajaj       22.01.2008                    Present    Present     Leave      Present             Leave
3    Mr. Lalit Kumar       03.01.2007      03.01.2010    Present    Leave       Present    Leave
4    Mr. Mukesh Khullar    03.01.2007                    Present    Leave       Leave      Present             Leave
5    Mr. R. K. Tiwari      29.12.2008                    Leave      Present     Leave      Present             Leave
6    Mr. K. N. Bhandari    09.05.2003                    Present    Present     Present    Present             Present
7    Ms. Bhagyam Ramani    24.02.2006                    Present    Present     Present    Present             Leave
8    Mr. S. K. Mitra       01.09.2006                    Leave      Present     Present    Present             Leave
9    Mr. Sujit Das         24.02.2006      31.12.2009    Present    Leave       Leave      Leave
10   Mr. I. S. Phukela     29.11.2007                    Present    Leave       Leave      Present             Present
11   Mr. S. K. Chanana     28.06.2003                    Present    Present     Present    Present             Leave
12   Mr. A. Asthana        28.06.2006      31.08.2009    Present    Present
13   Mr. P. C. James       20.10.2009                                           Present    Present             Present

*CHAIRMAN CUM MANAGING DIRECTOR


Statement of Board Audit Committee Meetings attended by the
     Members during the period April 2009 to March 2010
                                         (As on 30.11.2010)

SN   Name                  Date of         Date of       1              2              3                 4
                           Appointment     Cessation
                                                         28.07.09       22.10.09       16.12.09          26.02.10

1    Mr. K. N. Bhandari    09.05.2003                    Present        Present        Present           Present
2    Mr. R. K. Tiwari      29.12.2008                    Present        Leave          Leave             Leave
3    Ms. Bhagyam Ramani    24.02.2006                    Present        Present        Present           Leave
4    Mr. S. K. Mitra       01.09.2006                    Present        Present        Present           Leave
5    Mr. S. K. Chanana     28.06.2003                    Present        Present        Present           Leave
6    Mr. A. Asthana        28.06.2006      31.08.2009    Present
7    Mr. P. C. James       20.10.2009                                   Present        Present           Present

     Statement of Board Investment Committee Meetings attended by
         the Members during the period April 2009 to March 2010
                                         (As on 30.11.2010)
SN   Name                  Date of         Date of       1                  2                  3
                           Appointment     Cessation
                                                         22.10.09           16.12.09           26.02.10
1    Mr. M. Parshad        01.01.2006                    Present            Present
                                                                                                   ADJOURNED




2    Ms. Bhagyam Ramani    24.02.2006                    Present            Present
3    Mr. S. K. Mitra       01.09.2006                    Present            Present
4    Mr. S. K. Chanana     28.06.2003                    Present            Present




                                               44
A     n     n     u     a     l   R     e     p    o     r     t      2    0   0   9     - 10


                                                                                                    Annexure - 3

                                  MANAGEMENT REPORT
In accordance with Part IV of Schedule B of the Insurance Regulatory and Development Authority (Preparation
of Financial Statements and Auditor's Report of Insurance Companies) Regulations 2002, the Management of
the Company hereby:
1.        Confirms that the Registration Number 126 granted by the IRDA continues to be valid.
2.        Certifies that all dues payable to the Statutory Authorities have been duly paid.
3.        Confirms that the Shareholding pattern and any transfer of Shares during the year are in accordance
          with the Statutory or Regulatory requirements.
4.        Declares that the Management has not directly or indirectly invested outside India the funds of the
          holders of Policies issued in India.
5.        Confirms that the Company has maintained the required Solvency Margins.
6.        Certifies that the value of all the Assets have been reviewed on the date of the Balance Sheet and that,
          in their (insurer's) belief, the Assets set forth in the Balance Sheet are shown in the aggregate at amounts
          not exceeding their realizable or market value under the several headings - "Loans", "Investments",
          "Agents' Balances", "Outstanding Premium", "Interest, Dividends and Rent Outstanding", "Interest,
          Dividends and Rent Accruing but not due", "Amounts due from other persons or bodies carrying on
          insurance business", "Sundry Debtors", "Bills Receivable", "Cash", and the several items specified under
          "Other Accounts".
7.        Confirms that the Company's risk exposure under "National Agricultural Insurance Scheme (NAIS)" is
          adequately limited by the provisions of the Scheme which restricts the Company's liability under NAIS to
          100% of the Premium for food crops & oilseeds, and 150% of the Premium for annual commercial and
          horticultural crops. Adequate provision in respect of the Company's share of Claims has been made in
          the accounts as per the Actuarial Certificate. Further, for the Company's own products, appropriate
          Reinsurance has been arranged.
8.        Certifies that the Company does not operate outside India.
9.        Ageing of Claims indicating the trends in average claim settlement time during the preceding five years
          is presented below:-
                                                                                                  Rupees in lakh
          Particulars                                              No. of Claims               Amount Involved
          30 days                                                            289                             13.92
          30 days to 6 months                                          2560853                           51379.13
          6 months to 1 year                                           3175480                           23650.51
          1 Year to 5 years                                               374178                          3388.11
          5 years and above                                                    0                              0.00

10.       Certifies that the value of Investments, Stocks and Shares, as shown in the Balance Sheet, have been
          arrived at as stated in the "Significant Accounting Policies" (No. 5).
11.       Certifies that the review of quality and performance of Investments is as mentioned in the "Notes
          forming part of Accounts" (No. 9). No loans, except loans to staff members, have been granted by
          the Company.




                                                          45
                    Agriculture Insurance Company of India Limited


12.    Confirms that:
       (i)     In the preparation of financial statements, the applicable Accounting Standards, principles and
               policies have been followed along with proper explanations for material departures, if any;
       (ii)    The Management has adopted accounting policies and applied them consistently (including
               those specifically required by various IRDA Regulations) 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 the
               Company at the end of the financial year and of the profit of the Company for the year;
       (iii)   The Management has taken proper and sufficient care for the maintenance of adequate
               accounting records in accordance with the applicable provisions of the Insurance Act, 1938 (4
               of 1938)/Companies Act, 1956 (1/1956), for safeguarding the assets of the Company and for
               preventing and detecting fraud and other irregularities;
       (iv)    The Management has prepared the financial statements on a "going concern" basis;
       (v)     The Management has ensured that an internal audit system commensurate with the size and
               nature of the business exists and is operating effectively.
13.    Certifies that no payment has been made to individuals, firms, companies and organisations in which
       the Directors of the Company are interested.




  (Kanika Sharma Shandil)                    (M.K.Poddar)                         (R.P. Samal)
     Company Secretary                     Dy. Gen. Manager                      General Manager


       (K.N.Bhandari)                        (S.K.Chanana)                        (M.Parshad)
           Director                              Director                Chairman-cum-Managing Director



Place: New Delhi
Date : 09.09.2010




                                                     46
A      n    n    u     a     l     R       e    p      o   r     t     2     0      0    9    - 10


REGISTRATION NO. :126
DATE OF REGISTRATION WITH IRDA: OCTOBER 30, 2003

             REVENUE ACCOUNT FOR THE PERIOD ENDED 31ST MARCH, 2010
                          CROP INSURANCE BUSINESS
Sl.    PARTICULARS                                             Schedule               Current Year       Previous Year
No.                                                                              01.04.09-31.03.10    01.04.08-31.03.09
                                                                                         (Rs. '000)           (Rs. '000)

1      Premium Earned (Net)                                             1                10225168               7426091
2      Profit/Loss on Sale/Redemption of Investments                                        10711                     0
3      Others                                                                                   0                     0
4      Interest, Dividend & Rent -Gross                                                   1105818               1055543

                                               TOTAL                   (A)               11341697               8481634

1      Claims Incurred (Net)                                            2                11891903               5296233
2      Commission                                                       3                 (442967)               (89428)
3      Operating Expenses related to Insurance Business                 4                   202399               158839
4      Expenses related to Investments :
       a) Amortization of Premium on Investments                                             19195                19775
       b) Stock Holding Charges                                                                506                  412
       c) Bank Interest & Charges                                                              974                 6740

                                               TOTAL                   (B)               11672010               5392571

       Operating Profit from Crop Insurance Business C = (A-B)                            (330313)              3089063

       APPROPRIATIONS
       Transfer to Shareholders' Account                                                  (330313)              3089063
       Transfer to Catastrophe Reserve                                                           0                    0
       Transfer to Other Reserves                                                                0                    0

                                               TOTAL                   (D)                (330313)              3089063

As required by Section 40C (2) of the Insurance Act, 1938, we certify that to the best of our knowledge and according to the
information and explanations given to us and so far as appears from our examination of the books of accounts of the
company, all expenses of management, wherever incurred, whether directly or indirectly in respect of Crop Insurance Business
have been fully debited in the Revenue Account as expenses in accordance with Accounting Policy No. 6.


      (Kanika Sharma Shandil)                         (M.K.Poddar)                             (R.P. Samal)
         Company Secretary                          Dy. Gen. Manager                         General Manager


           (K.N.Bhandari)                            (S.K.Chanana)                            (M.Parshad)
               Director                                  Director                    Chairman-cum-Managing Director
             DIN 191219                                DIN 112424                              DIN 189987


      For M/s Gupta & Gupta                                                             For M/s Kishore & Kishore
       Chartered Accountants                                                              Chartered Accountants

           (S.B.Gupta)                                                                         (S.C.Kishore)
              Partner                                                                             Partner
           M.No. 006099                                                                        M.No. 003390


Place: New Delhi
Date : 09.09.2010



                                                            47
                  Agriculture Insurance Company of India Limited


REGISTRATION NO. :126
DATE OF REGISTRATION WITH IRDA: OCTOBER 30, 2003

      PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH, 2010
                       CROP INSURANCE BUSINESS
Sl. PARTICULARS                                           Schedule        Current Year        Previous Year
No.                                                                  01.04.09-31.03.10    01.04.08-31.03.09
                                                                             (Rs. '000)           (Rs. '000)
1.   OPERATING PROFIT/(LOSS)
     Crop Insurance Business                                                  (330313)             3089063


2.   INCOME FROM INVESTMENTS
     a) Interest,Dividend & Rent-Gross                                         677739               493470
     b) Profit on Sale of Investments                                             6565                    0


3.   OTHER INCOME
     a) Miscellaneous Receipts                                                  48464                  3232
     b) Profit on Sale of Assets                                                    22                   96
     c) Prior Period Income                                                          0                    0
                                         TOTAL                 (A)             402477              3585861


4.   PROVISIONS (other than Taxation)
     a) Dimunition in the value of Investments                                       0                    0
     b) Provision for Doubtful Debts                                              3636                 8065
     c) Provision for Premium Defalcation                                         6231                    0
     d) Provision on Standard Assets                                            15765                  5776
     e) Provision for difference in Cenvat Input Credit                                                   0


5.   OTHER EXPENSES
     a) Expenses other than those related to                                         0                    0
       insurance business
     b) Amortisation of Premium on Investments                                  11764                  9245
     c) Stock Holding Charges                                                      310                  193
     d) Bank Interest & Charges                                                    597                 3151
     e) Loss on Sale of Assets                                                       0                    0
     f) Preliminary Expenses Written off                                             0                    0
     g) Prior Period Expenses                                                        0                    0
                                         TOTAL                 (B)              38303                26430


     PROFIT BEFORE TAX                                     (C=A-B)             364174              3559431




                                                     48
A    n     n    u     a   l     R     e    p      o      r    t   2     0   0   9     - 10



      PROVISION FOR TAXATION
      a) Income Tax (Current Year)                                                123705               1236936
      b) Income Tax (pertaining to earlier years)                               (105188)                     0
      c) Wealth Tax                                                                    69                   81
      d) Fringe Benefit Tax                                                             0                 1262
      e) Deferred Tax                                                               11564                -4931
                                                                                                        (4931)
                                          TOTAL                   (D)               30150              1233348
      PROFIT AFTER TAX AVAILABLE FOR                                              334024               2326083
      APPROPRIATION (E=C-D)

      APPROPRIATIONS
      a) Interim Dividend paid during the year                                          0                    0
      b) Proposed Final Dividend                                                        0               200000
      c) Dividend Distribution Tax                                                      0                33990
      d) Transfer to General Reserve                                                    0              2092093
                                          TOTAL                                         0              2326083
      PROFIT AFTER TAX & APPROPRIATIONS                                           334024                     0

      Add: Balance of Profit/(Loss) b/f from last year                                  0                    0
      BALANCE C/F TO BALANCE SHEET                                                334024                     0


      Basic & Diluted Earning per Share                                              1.67                11.63
      Number of Equity Shares                                                     200000                200000
      Nominal Value per Share                                                     Rs.10/-               Rs.10/-

      Accounting Policies Annexure-1 and Notes on Accounts Annexure-2




    (Kanika Sharma Shandil)                      (M.K.Poddar)                          (R.P. Samal)
       Company Secretary                       Dy. Gen. Manager                      General Manager


         (K.N.Bhandari)                          (S.K.Chanana)                       (M.Parshad)
             Director                                Director               Chairman-cum-Managing Director
           DIN 191219                              DIN 112424                         DIN 189987
     As per our separate Report of even date attached
     For M/s Gupta & Gupta                                                      For M/s Kishore & Kishore
      Chartered Accountants                                                       Chartered Accountants

          (S.B.Gupta)                                                                 (S.C.Kishore)
             Partner                                                                     Partner
          M.No. 006099                                                                M.No. 003390


Place: New Delhi
Date : 09.09.2010




                                                         49
                      Agriculture Insurance Company of India Limited


REGISTRATION NO. :126
DATE OF REGISTRATION WITH IRDA: OCTOBER 30, 2003
                          BALANCE SHEET AS AT 31ST MARCH, 2010
                               CROP INSURANCE BUSINESS
PARTICULARS                                              Schedule         Current Year        Previous Year
                                                                     01.04.09-31.03.10    01.04.08-31.03.09
                                                                             (Rs. '000)           (Rs. '000)
SOURCES OF FUNDS
Share Capital                                                    5            2000000              2000000
Reserves & Surplus                                               6            5657770              5323746
Fair Value Change Account                                                       61798                 1797
Borrowings                                                                          0                    0
                                         TOTAL                                7719568              7325543
APPLICATION OF FUNDS
Investments                                                      8           14420897              9233368
Loans                                                            9              12875                13912
Fixed Assets                                                    10             294387                46222
Deferred Tax Asset                                                              27675                39239
Current Assets:
Cash & Bank Balances                                            11            9332429             10478636
Advances & Other Assets                                         12            4561290               1826849
                                         Sub - Total (A)                    13893719              12305485
Current Liabilities                                             13          14455046              10033869
Provisions                                                      14            6474939               4278814
                                           Sub - Total (B)                  20929986              14312683
      Net Current Assets                   (C) = (A) - (B)                  (7036267)             (2007198)
Miscellaneous Expenditure
(to the extent not written off or adjusted)                                         0                    0
Debit Balance in Profit and Loss Account                                            0                    0
                                           TOTAL                              7719568              7325543
Contingent Liabilities
Claims, other than against Policies, not
acknowledged as debts by the Company                                                 0                    0
Accounting Policies Annexure-1 and Notes on Accounts Annexure-2


  (Kanika Sharma Shandil)                      (M.K.Poddar)                       (R.P. Samal)
     Company Secretary                       Dy. Gen. Manager                    General Manager


        (K.N.Bhandari)                        (S.K.Chanana)                       (M.Parshad)
            Director                              Director               Chairman-cum-Managing Director
          DIN 191219                             DIN 112424                         DIN 189987
   As per our separate Report of even date attached
   For M/s Gupta & Gupta                                                    For M/s Kishore & Kishore
    Chartered Accountants                                                     Chartered Accountants

         (S.B.Gupta)                                                              (S.C.Kishore)
            Partner                                                                  Partner
         M.No. 006099                                                             M.No. 003390
Place: New Delhi
Date : 09.09.2010



                                                       50
A   n    n    u    a    l     R    e    p    o    r      t   2   0   0    9    - 10


               SCHEDULES FORMING PART OF FINANCIAL STATEMENTS
                    FOR THE PERIOD ENDED 31ST MARCH, 2010
                            SCHEDULE 1 : PREMIUM EARNED (NET)
PARTICULARS                                                           Current Year        Previous Year
                                                                 01.04.09-31.03.10    01.04.08-31.03.09
                                                                         (Rs. '000)           (Rs. '000)
Premium from Direct Business written                                     15203969              8334426
Add: Premium on Reinsurance Accepted                                            0                    0
Less: Premium on Reinsurance Ceded                                        2518891               569168
Net Premium                                                              12685077              7765258
Adjustment for change in Reserve for Unexpired Risks                      2459910              (339167)
TOTAL PREMIUM EARNED (NET)                                               10225168              7426091


                            SCHEDULE 2 : CLAIMS INCURRED (NET)
PARTICULARS                                                           Current Year        PreviousYear
                                                                 01.04.09-31.03.10    01.04.08-31.03.09
                                                                         (Rs. '000)           (Rs. '000)
Claims Paid - Direct                                                      8254288              5309962
Add: Reinsurance Accepted                                                       0                    0
Less: Reinsurance Ceded                                                   1367449               892509
Net Claims paid                                                           6886839              4417453
Add: Claims Outstanding at the end of the Current Year                   13836948              8067004
Add: Reinsurance Accepted                                                       0                    0
Less: Reinsurance Ceded                                                   1254895               490015
Net Claims Outstanding at the end of Current Year                        12582054              7576989
Less: Claims Outstanding at the end of the Previous Year                  8067004              7647152
Add: Reinsurance Accepted                                                       0                    0
Less: Reinsurance Ceded                                                    490014               948943
Net Claims Outstanding at the end of the Previous Year                    7576990              6698209
Gross Incurred Claims                                                    14024232              5729814
Add: Reinsurance Accepted                                                       0                    0
Less: Reinsurance Ceded                                                   2132329               433581
NET CLAIMS INCURRED                                                      11891903              5296233

                                  SCHEDULE 3 : COMMISSION
PARTICULARS                                                           Current Year        Previous Year
                                                                 01.04.09-31.03.10    01.04.08-31.03.09
                                                                         (Rs. '000)           (Rs. '000)
Commission Paid - Direct                                                    56775                16712
Add: Reinsurance Accepted                                                       0                    0
Less: Commission on Reinsurance Ceded                                      499742               106140
NET COMMISSION                                                            (442967)              (89428)




                                                   51
                  Agriculture Insurance Company of India Limited


     SCHEDULE 4 : OPERATING EXPENSES RELATED TO INSURANCE BUSINESS
Sl. PARTICULARS                                         Schedule        Current Year        Previous Year
No.                                                                01.04.09-31.03.10    01.04.08-31.03.09
                                                                           (Rs. '000)           (Rs. '000)

1    Employees' Remuneration & Welfare benefits                               75257                58979
2    Travel, Conveyance and Vehicle running expenses                          11576                12893
3    Training Expenses                                                          619                  645
4    Rent, Rates & Taxes                                                      27185                17691
5    Repairs                                                                   4721                 3356
6    Printing & Stationery                                                     3643                 3206
7    Communication                                                             3974                 3643
8    Legal & Professional charges                                             20730                13000
9    Auditor's fees, expenses etc.
     a)    as Auditor                                                           1187                  980
     b)    as Advisor or in any other capacity, in respect of
           (i) Taxation matters                                                   0                    0
           (ii) Insurance matters                                                 0                    0
           (iii) Management Services                                              0                    0
     c)    in any other capacity                                                  0                    0
10   Advertisement & Publicity                                                 4117                 5112
11   Research & Development Expenses                                          20134                17772
12   Fees & Subscription to Statutory Authorities                             11596                 6419
13   Interest & Bank Charges                                                     50                  287
14   Depreciation                                                              6337                 5458
15   Others                                                                   11270                 9398
     TOTAL                                                                   202399               158839


                                  SCHEDULE 5 : SHARE CAPITAL
Sl. PARTICULARS                                         Schedule        Current Year        Previous Year
No.                                                                01.04.09-31.03.10    01.04.08-31.03.09
                                                                           (Rs. '000)           (Rs. '000)
1    Authorised Capital
     150 crore Equity Shares of Rs.10/- each                               15000000             15000000
2    Issued Capital
     20 crore Equity Shares of Rs.10/- each                                 2000000              2000000
3    Subscribed Capital
     20 crore Equity Shares of Rs.10/- each                                 2000000              2000000
4    Called-up & Paid-up Capital
     20 crore Equity Shares of Rs.10/- each                                 2000000              2000000
     Less: Preliminary Expenses                                                    0                    0
     TOTAL                                                                  2000000              2000000




                                                      52
A    n   n    u    a    l     R     e    p    o   r     t      2     0     0     9   - 10


                       SCHEDULE 5A : PATTERN OF SHAREHOLDING
                          (AS CERTIFIED BY THE MANAGEMENT)
Sl. Shareholders                                         Current Year                     Previous Year
No.                                                    01.04.09-31.03.10                01.04.08-31.03.09
                                                    Number of       % of               Number of      % of
                                                  Shares ('000) Holding              Shares ('000) Holding
A.   PROMOTERS - INDIAN
1    General Insurance Corporation of India                  70000        35%               70000      35%
2    National Agriculture Bank for Rural
     Development                                             60000        30%               60000      30%
3    National Insurance Company Ltd.
     & its nominee                                           17500       8.75%              17500    8.75%
4    The Oriental Insurance Company Ltd.                     17500       8.75%              17500    8.75%
5    United India Insurance Company Ltd.                     17500       8.75%              17500    8.75%
6    The New India Assurance Company Ltd.
     & its nominee                                           17500       8.75%              17500    8.75%
                                        TOTAL               200000       100%              200000     100%
B.   PROMOTERS - FOREIGN                                       NIL         NIL                NIL       NIL
                                        TOTAL               200000       100%              200000     100%

                            SCHEDULE 6 : RESERVES & SURPLUS
Sl. PARTICULARS                                                           Current Year         Previous Year
No.                                                                  01.04.09-31.03.10     01.04.08-31.03.09
                                                                             (Rs. '000)            (Rs. '000)
1    Capital Reserve                                                                   0                      0
2    Capital Redemption Reserve                                                        0                      0
3    Share Premium                                                                     0                      0
4    General Reserve
     Opening Balance                                                 5323746               3231653
     Less:Charge on account of transitional
     provisions under Accounting Standard 15                                   0                         0
     Add: Profit transferred during the year                                   0 5323746   2092093 5323746
5    Catastrophe Reserve                                                               0                 0
6    Other Reserves                                                                    0                 0
     Balance of Profit in Profit & Loss Account                                   334024                 0
                                        TOTAL                                    5657770             5323746

                                  SCHEDULE 7 : BORROWINGS
PARTICULARS                                                               Current Year         Previous Year
                                                                     01.04.09-31.03.10     01.04.08-31.03.09
                                                                             (Rs. '000)            (Rs. '000)
1    Debentures & Bonds                                                                0                   0
2    Banks (Secured against Deposits)                                                  0                   0
3    Financial Institutions                                                            0                   0
4    Others                                                                            0                   0
                                        TOTAL                                          0                   0



                                                   53
                 Agriculture Insurance Company of India Limited


                                SCHEDULE 8 : INVESTMENTS
Sl. PARTICULARS                                                     Current Year        Previous Year
No.                                                            01.04.09-31.03.10    01.04.08-31.03.09
                                                                       (Rs. '000)           (Rs. '000)
A.   LONG TERM INVESTMENTS
1    Government Securities and
     Govt. Guaranteed Bonds including Treasury Bills                    7222864              5810799
2    Other Approved Securities - Housing Sector Bonds                   1181169               852425
3    Other Investments:
     a) Shares
         (i)   Equity                                                    368302                71783
         (ii) Preference                                                      0                    0
     b) Mutual Funds                                                          0                    0
     c) Derivative Instruments                                                0                    0
     d) Debentures/Bonds                                                      0                    0
     e) Other Securities                                                      0                    0
     f) Subsidiaries                                                          0                    0
     Investment in Properties - Real Estate                                   0                    0
4    Investments in Infrastructure & Social Sector                      3370576              1636680
5    Other than Approved Securities - Tier II Bonds                      120000               120000

                                     Sub - Total (A)                   12262911              8491687
B.   SHORT TERM INVESTMENTS
1    Government Securities and
     Govt. Guaranteed Bonds including Treasury Bills                     682971               126575
2    Other Approved Securities - Housing Sector Bonds                    375776               115015
3    Other Investments:
     a) Shares:
         (i)   Equity                                                         0                    0
         (ii) Preference                                                      0                    0
     b) Mutual Funds                                                     949216                    0
     c) Derivative Instruments                                                0                    0
     d) Debentures/Bonds                                                      0                    0
     e) Other Securities                                                      0                    0
     f) Subsidiaries                                                          0                    0
     g) Investment in Properties - Real Estate                                0                    0
4    Investments in Infrastructure & Social Sector                       150024               500091
5    Other than Approved Securities                                           0                    0

                                     Sub - Total (B)                    2157987               741681
                                     GRAND TOTAL (A+B)                 14420897              9233368

Note : A provision of Rs.52819 thousand(Previous Year Rs.37054 thousand) on Standard Assets in respect
of investment in Debentures/Bonds appears under the head 5 (iv) in Schedule 14

     Market Value of Investments on 31.03.2010                         23756202             19748655
     Less: Fair Value Change Account                                      61798                 1797
     Book Value of Investments as on 31.03.2010                        23694404             19746858




                                                  54
A    n   n   u    a    l    R    e    p    o     r    t   2   0   0    9     - 10


                                     SCHEDULE 9 : LOANS
Sl. Particulars                                                    Current Year        Previous Year
No.                                                           01.04.09-31.03.10    01.04.08-31.03.09
                                                                      (Rs. '000)           (Rs. '000)
1    SECURITY-WISE CLASSIFICATION
A.   Secured:
     a) On mortgage of Property:
        (i)   In India                                                        0                    0
        (ii) Outside India                                                    0                    0
     b) On Shares, Bonds, Government Securities                               0                    0
     c) Others
        (i)   Loans to Staff                                               12875              13912
B.   Unsecured                                                                 0                  0
                                                      TOTAL                12875              13912
2    BORROWER-WISE CLASSIFICATION
     a) Central & State Governments                                            0                  0
     b) Banks & Financial Institutions                                         0                  0
        Subsidiaries                                                           0                  0
     d) Industrial Undertakings                                                0                  0
     e) Others(Loans to Staff)                                             12875              13912
                                                      TOTAL                12875              13912
3    PERFORMANCE-WISE CLASSIFICATION
     a) Loans classified as Standard:
        (i)  In India                                                      12875              13912
        (ii) Outside India                                                     0                  0
     b) Non-Performing Loans, less provisions:
        (i)  In India                                                          0                  0
        (ii) Outside India                                                     0                  0
                                                      TOTAL                12875              13912
4    MATURITY-WISE CLASSIFICATION
     a) Short Term                                                             0                 31
     b) Long Term                                                          12875              13881
                                                      TOTAL                12875              13912




                                                 55
                                                          SCHEDULE 10 : FIXED ASSETS
                                                                                                                                             (Rs. '000)
     Particulars                                          Cost/Gross Block                          Depreciation                     Net Block
                                                     Add:       Less:
                                       As at      Additions      Sale/        As at    As at     For the    On sale/     Up to    As at      As at
                                      01.04.09      during    Deduction/     31.03.10 01.04.09   current   adjustment   31.03.10 31.03.10   31.03.09
                                                   the year   Discarded                           Year
                                                                during
                                                               the year
     (A)   Tangible Assets
           Buildings                  36614          0           0            36614    8046       1429           0       9475     27139     28568
           Furniture & Fixtures        8369        727          52             9044    3700       1174          39       4835      4209      4669
           I.T. Equipments            10474       1640           0            12114    6534       1847           0       8381      3734      3940
           Vehicles                    7979       1208         131             9056    3821       1309          34       5096      3960      4158
           Office Equipments           4056        829           7             4877    1672        441           1       2111      2766      2384
           Elec.Equip.& Fittings       3584        500          27             4057    1504        348          17       1835      2221      2080
           Leasehold Improvement       7162       2531           0             9693    6740        928           0       7668      2025       422




56
     (B)   Intangible Assets
           Computer Software             509          0           0             509      509          0            0       509        0           0

           TOTAL (A)                  78748        7434        217            85965   32526       7476          90      39912     46054     46222

           Capital Work In Progress        0         26          26               0        0          0            0         0        0           0
           Capital Work in                 0     101113           0          101113        0          0            0         0   101113           0
           Progress-Hardware
           Capital Work in                 0     147220           0          147220        0          0            0         0   147220           0
           Progress-Software

           TOTAL (B)                       0     248359          26          248333        0          0            0         0   248333           0

           GRAND TOTAL (A)+(B)        78748      255793        243           334298   32526       7476          90      39912    294387     46222

           PREVIOUS YEAR              76221        6401       3873            78748   26873       6681       1027       32526     46222     49348
                                                                                                                                                          Agriculture Insurance Company of India Limited
A    n    n    u    a    l     R       e   p   o     r     t   2     0   0    9     - 10


                         SCHEDULE 11 : CASH AND BANK BALANCES
Sl. Particulars                                                           Current Year        Previous Year
No.                                                                  01.04.09-31.03.10    01.04.08-31.03.09
                                                                             (Rs. '000)           (Rs. '000)
1    Cash (including Cheques,Drafts & Stamps)                                       20                  570
2    Bank Balances
     a) Deposit Account
         (i) Short term (due within 12 months)                                9233901             10413272
         (ii) Others
     b) Current Accounts                                                          83437              55099
     c) Others (Remittances in Transit)                                               0                 46
3    Money at Call and Short Notice
     a) With Banks                                                                    0                   0
     b) With Other Institutions                                                       0                   0
4    Others                                                                       15072                9649
                                                           TOTAL              9332429             10478636




                        SCHEDULE 12 : ADVANCES AND OTHER ASSETS

Sl. Particulars                                                           Current Year        Previous Year
No.                                                                  01.04.09-31.03.10    01.04.08-31.03.09
                                                                             (Rs. '000)           (Rs. '000)
A.   ADVANCES
1    Reserve Deposits with Ceding Companies                                          0                    0
2    Application Money for Investments                                               0                    0
3    Pre-payments                                                                 10508              10420
4    Advances to Officers & Staff                                                 1762                 1733
5    Advance Tax Paid & Taxes Deducted at Source
     (Net of Provision for Taxation)                                           688166               103061
6    Others:
     a)   Advance Rent paid                                                         46                   21
     b)   Sundry Advances                                                          107                    7
                                                   Sub - Total (A)             700589               115242
B.   OTHER ASSETS
1    Income accrued on investments                                             820344               851638
2    Outstanding Premium                                                             0                    0
3    Agents' Balances                                                                0                    0
4    Service Tax on Reinsurance Premium                                              0               45125
5    Due from other entities carrying on Insurance                                   0
     Business (including reinsurers)                                                                119910




                                                      57
                  Agriculture Insurance Company of India Limited



6    Due from subsidiaries/holding company                                         0                    0
7    Deposit with Reserve Bank of India
     (Pursuant to Section 7 of Insurance Act, 1938)                          101404               102015
8    Others:
     a)   Sundry Deposits                                                     22913                26175
     b)   Advance against Capital Assets                                        2597                 1397
     c)   Short Collection of Premium                                           9622                 8327
     d)   Premium Receivable                                                       0                    0
     e)   Others (Adhoc payment to Govt. of India)                          2000000                     0
     f)   Government (Centre/States/Uts/Coffee Board)                        794612               476119
          i)    Sundry Debtors                                                19386                13117
          ii)   Cenvat Credit Receivable                                      89823                53888
                                                Sub - Total (B)             3860701              1697711
                                        GRAND TOTAL (A+B)                   4561290              1812953




                            SCHEDULE 13 : CURRENT LIABILITIES

Sl. Particulars                                                         Current Year        Previous Year
No.                                                                01.04.09-31.03.10    01.04.08-31.03.09
                                                                           (Rs. '000)           (Rs. '000)
1    Agents Balances                                                               0                    0
2    Balance Due to other Insurance Companies                                 35322                     0
3    Deposits held on Reinsurance Ceded                                            0                    0
4    Premium received in advance                                                   0
5    Unallocated Premium                                                           0                    0
6    Sundry Creditors                                                        226308               140237
7    Due to Subsidiary/Holding Company                                             0                    0
8    Claims Outstanding                                                    12582054              7576989
9    Due to Officers/Directors                                                     0                    0
10   OTHERS:
     a)   Excess Collection of Premium                                        78397               100539
     b)   Provision for Outstanding Expenses                                 110617                33214
     c)   Earnest Money Deposit                                                 2840                 2844
     d)   Government (Centre/States/Uts/Coffee Board)                       1404442              2156501
     e)   Pension Contribution – New Employees                                15067                  9649

                                                           TOTAL           14455046             10019973




                                                      58
A    n   n    u       a   l     R     e    p    o     r     t    2    0   0    9     - 10


                                     SCHEDULE 14 : PROVISIONS
Sl. Particulars                                                            Current Year        Previous Year
No.                                                                   01.04.09-31.03.10    01.04.08-31.03.09
                                                                              (Rs. '000)           (Rs. '000)
1.   Reserve for Unexpired Risk                                                6342538              3882629
2.   For Taxation (Net of Advance Tax & TDS)                                           0                   0
3.   For Proposed Dividend                                                            0              200000
4.   For Dividend Distribution Tax                                                     0              33990
5.   Others:
     i)   Provision   for Retirement Benefits                                      47251             102677
     ii)  Provision   for Doubtful Debts                                           13597               9961
     iii) Provision   for Premium Defalcation                                      18733              12503
     iv) Provision    on Standard Assets                                           52819              37054
     v) Provision     for difference in Cenvat Input Credit                            0                  0
                                                              TOTAL            6474939              4278814




                       SCHEDULE 15 : MISCELLANEOUS EXPENDITURE
                              (To the extent not written off)

Sl. Particulars                                                            Current Year        Previous Year
No.                                                                   01.04.09-31.03.10    01.04.08-31.03.09
                                                                              (Rs. '000)           (Rs. '000)

1.   Discount allowed in issue of shares                                              0                    0
2    Research & Development Expenses                                                  0                    0
3    Preliminary Expenses                                                             0                    0
4    Others                                                                           0                    0
                                                              TOTAL                   0                    0




                                                       59
                   Agriculture Insurance Company of India Limited


                                                 Annexure - I

             SIGNIFICANT ACCOUNTING POLICIES
1.      Accounting Convention
1.1     The Balance Sheet, Profit & Loss Account and Revenue Account are drawn up in accordance with the
        provisions of Section 11 (1) of the Insurance Act, 1938, read with the provisions of sub-sections (1), (2)
        and (5) of Section 211 and sub-section (5) of Section 227 of the Companies Act, 1956.
1.2     The Financial Statements also conform to the stipulations specified under the Insurance Regulatory
        and Development Authority (Preparation of Financial Statements and Auditors' Report of Insurance
        Companies) Regulations, 2002, to the extent applicable.
1.3     The said statements are prepared on "Historical Cost" convention, on "Accrual" & "Going Concern"
        basis, in accordance with the generally accepted Accounting Principles, and other Statutory provisions
        and practices prevailing in the general insurance industry in India, to the extent applicable, complying
        with the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant
        provisions of the Companies Act, 1956, as far as applicable to the Company, except as otherwise
        stated.
2.      Policyholders' Fund and Shareholders' Fund
        The Policyholders' Fund shall include Technical Reserves (including Reserve for Unexpired Risks) and
        Provision for Outstanding Claims (including IBNR & IBNER). The Shareholders' Fund includes Share
        Capital, General Reserve, any other free Reserve, balance in Profit & Loss A/c and Capital Reserve.
3.      Revenue Recognition
3.1     Premium is recorded, net of reinsurance, based on assumption of risk, in the Revenue Account, except
        in respect of Government Schemes being implemented by the Company where-under risk is assumed
        in accordance with the provisions of the relevant Scheme, notwithstanding the delay, if any, in receipt of
        premium by the Company from the nodal agencies/ Central / States/ UTs Government/ Government
        Agencies, as per IRDA's concurrence vide their letter no. 34-1/IRDA/Act1/IBNR/AIC/2009-10 dated 26/
        08/2010.
3.2     Premium received from Nodal Banks upto 31st March as per the provisions of the Scheme(s) is accounted
        for, in conformity with the accounting year of the Company.
3.3     Premium refunds/adjustments are accounted for on the basis of endorsements passed during the year.
3.4     Interest Income is accounted for on accrual basis in respect of investments in Fixed Deposits in Banks,
        Government Securities, Bonds & other Instruments.
3.5     Dividend is accounted for in the year of declaration. Dividend/Interest on Shares/Debentures pending
        delivery/under objection is accounted for on realization. Interim Dividend is accounted for where the
        warrants are issued by 31st March.
4       Fixed Assets
4.1     Fixed Assets are valued at cost less depreciation. Cost includes cost of acquisition (including duties,
        levies and taxes) and other directly attributable costs to bring the Asset to its working condition for its
        intended use.
4.2     Depreciation on Fixed Assets
4.2.1   Depreciation on Fixed Assets is charged on "Written Down Value" at the rates specified in Schedule XIV
        of the Companies Act, 1956.
4.2.2   Depreciation is provided on addition/sale/loss of Fixed Assets on pro-rata basis. Individual Asset costing
        upto Rs. 5000/- is depreciated in full in the year of purchase.
4.2.3   Depreciation on Leasehold Improvements is amortized over the period of the lease from the date of
        capitalization.




                                                       60
A       n     n     u    a    l      R    e     p    o     r     t    2    0    0    9     - 10


4.2.4       Computer software which is not an integral part of the related hardware has been classified as
            Intangible Asset and is being amortized over its estimated useful life not exceeding the period of
            thirty-six months
5.          Investments
5.1         Investment in debt securities including Government Securities are considered as held to maturity securities
            and valued at historical cost. In terms of IRDA regulations, the premium paid at the time of acquisition of
            such securities is amortized over the residual period of maturity.
5.2         Investments in Mutual Funds are valued at Net Asset Value (NAV) at the year end and the difference
            between cost/book value and NAV is accounted for in Fair Value Change Account. However, if there is
            impairment in value, the same is charged to Revenue and the book value of investment is reduced
            accordingly. Any reversal of impairment loss earlier recognized is taken to Revenue Account to the
            extent of reduction in impairment loss recognized earlier.
5.3         Investment Portfolio in respect of Equity / Equity related instruments is segregated into Actively Traded
            and Thinly Traded as prescribed by IRDA Regulations. A security is treated as thinly traded taking into
            consideration the prescribed SEBI guidelines governing mutual funds.
5.4         Actively traded equity / equity related instruments are shown at their Fair Value. "Fair Value" for this
            purpose is the lower of the closing prices at NSE and BSE on the Balance Sheet Date, as per IRDA
            Regulations and the net unrealised gain/loss on such valuation is reflected in the "Fair Value Change
            Account". On realization it is reported in the Profit & Loss Account and un-realized gains/losses arising
            due to changes in the fair value of actively traded equity shares are accounted in "Fair Value Change
            Account." Pending realization, the credit balance in the "Fair Value Change Account" is not available for
            distribution.
5.5         Investment in thinly traded equity shares and unlisted equity shares are shown at cost. However, difference
            between cost and break-up value is provided for as diminution in value. If the break-up value is negative
            then the provision is made for the entire cost. Further, if the published accounts of an unlisted company
            are not available for last three accounting years ending on or immediately preceding the date of working
            out diminution in value, then provision is made for the entire cost.
5.6         Investment in listed Equity/Equity related instruments/Preference Shares made in those companies
            which are making losses continuously for the last 3 years and where capital is eroded, are considered to
            have impaired in value. Further, if the published accounts of a company are not available for the last
            three accounting years ending on or immediately preceding the date of working out the impairment in
            value, it is presumed that the value of investment is fully impaired and is written off to a value of Re. 1/
            - per company. Valuation of such investments is done as under:-
5.6.1       In respect of other than actively traded Equity Shares, the least of the Cost Price and the Market Price
            of Break-up Value provided the Break-up value is positive. However, if the Break-up Value is negative,
            the nominal value is taken at Re. 1/- per company.
5.6.2       In respect of Preference Shares, if the dividend is not received for the last three years, the Preference
            Shares are written down to a value which will bear to its face value, the same proportion as value taken
            / which would have been taken for writing down equity shares / bears to the face value of the equity
            shares. However, if the Equity Shares are written down to Re. 1/- per company, Preference Shares are
            also written down to a nominal value of Re. 1/- per company.
5.7         "Collateralized Borrowing and Lending Obligation" (CBLO) which is issued at discount to the Face
            Value, is treated as Money Market Instrument as per RBI Notification. Discount earned, if any, at the
            time of lending through CBLO is shown as income, which is apportioned on time basis.
5.8         Provisions for standard/non-performing loans/debt securities are made on the basis of prudential norms
            issued by RBI as applicable to Financial Institutions, as required by IRDA.
5.9         In respect of Crop Insurance schemes sponsored by the Government, the income on investment of
            funds received from the Government towards specific Funds (viz. "NAIS-Corpus Fund") is credited to
            the relevant Fund; no credit for investment income, if any, is given to the Government in respect of other
            amounts received to meet the financial liabilities under the Scheme as these amounts are meant for




                                                            61
                   Agriculture Insurance Company of India Limited


        implementation of the Scheme and are required to be kept in readiness for disbursement of claims/
        meeting out of other financial obligations at short notice.
5.10    Income from Investments is apportioned between the "Revenue Account", "Profit and Loss Account",
        and the "NAIS-Corpus Fund" in the ratio of the balances standing in the "Policyholders' Fund",
        "Shareholders' Fund", & "NAIS-Corpus Fund" respectively at the beginning of the year.
5.11    Expenses relating to Investments, such as for safe custody, collection of interest/dividend, bank charges,
        etc., are apportioned between the "Revenue Account" and "Profit and Loss Account" in the ratio of the
        balances standing in the "Policyholders' Fund" and "Shareholders' Fund" respectively at the beginning
        of the year.
6.      Apportionment of Expenses
        Expenses not directly allocable to a particular Insurance Scheme/Product and/or a particular State/UT
        are apportioned amongst the relevant Schemes/Products and States/UTs annually on the basis of
        Gross Premium.
7.      Short and Excess Collection
        Short and Excess Collection of Premium is accounted for Scheme-wise, State/UT-wise. Net Excess
        Collection above Rs. 100/- per Nodal Bank per season is refunded. Recovery of Short Collection, Refund
        of Excess Collection and adjustment of Short against Excess of the same Nodal Bank, are made season-
        wise, from time to time. The net residual balance after the period of three years is transferred to
        "Miscellaneous Income" account.
8.      Provision in respect of Crop Insurance Business
        Provision in this regard is made at the time of annual closing of accounts. Currently, as per the Statutory
        requirements and the Policy of the Company in force, the following Provisions are made:
8.1     Reserve for Unexpired Risks [RUR] RUR is made to the extent of 50% of Net Premium Income of the
        year.
        [Net Premium = Direct Premium (received or receivable during the year) - Premium Refund - Premium
        on reinsurance ceded]
9.      Provision in respect of Crop Insurance Claims
        Provisions are made at the time of annual closing of accounts. The total of the Provision for
        Outstanding Claims (including IBNR & IBNER) under NAIS is not to exceed the "Maximum Potential
        Liability" [MPL] of the Company, as the claims in excess thereof are borne by the Government.
        Currently, as per the Statutory requirements and the Policy of the Company in force, the following
        Provisions are made:
9.1     Provision for Outstanding Claims
9.1.1   Estimated Liability for Outstanding Claims in respect of Crop Insurance Business is provided for at the
        year-end, in terms of the concerned scheme/policy provisions.
        No Provision is made for claims contested by the claimants through litigation but not acknowledged as
        debt by the Company.
9.1.2   In respect of litigation cases, where awards have been made against the Company, appropriate Provisions
        are made to the extent of the Company's liability.
9.2     Claims - IBNR & IBNER
        Provisions for Claims Incurred but Not Reported (IBNR), and Provisions for Claims Incurred but Not
        Enough Reported (IBNER) are made as per the Actuarial Certification.




                                                       62
A      n     n     u    a     l     R     e    p     o    r     t    2    0     0     9    - 10


10.        Contingent Assets
           Contingent Assets are neither recognized nor disclosed.
11.        Income Tax
           Tax expense is the aggregate of current year's tax, earlier year's tax and deferred tax. These are charged
           (credited) to the Profit & Loss Account.
11.1       Provision for taxation in respect of current year's income is based on the assessable income of the
           Company as per the Income Tax Act, 1961.
11.2       Provision for taxation in respect of earlier years is recorded, as considered appropriate, for matters
           under appeal.
11.3       Provision for deferred tax is made, based on the tax effect of timing differences resulting from the
           recognition of items in the financial statements and in estimating its current income-tax provision. Deferred
           Tax Assets arising from temporary timing differences are recognized to the extent there is reasonable
           certainty that the assets can be realized in future.
12.        Employees' Retirement Benefits
           Liabilities on account of retirement benefits to the employees such as Pension, Gratuity, Leave
           Encashment, Sick Leave and Leave Travel Subsidy (LTS) are provided for as per the actuarial valuation.
13         Miscellaneous
13.1       Telephone/Electricity/Water or such other deposits with the Local /Statutory Authorities have been charged
           off to the Revenue Account after retaining Re. 1 under the Deposit Head, for control purposes. If any
           amount is subsequently recovered towards these deposits, the same is credited to "Miscellaneous
           Income".
13.2       Only those prepaid expenses which are Rs. 10,000/- or more are carried forward to the next financial
           year.




     (Kanika Sharma Shandil)                       (M.K.Poddar)                            (R.P. Samal)
        Company Secretary                        Dy. Gen. Manager                         General Manager


           (K.N.Bhandari)                          (S.K.Chanana)                        (M.Parshad)
               Director                                Director                Chairman-cum-Managing Director

              DIN - All
      For M/s Gupta & Gupta                                                         For M/s Kishore & Kishore
       Chartered Accountants                                                          Chartered Accountants

            (S.B.Gupta)                                                                    (S.C.Kishore)
               Partner                                                                        Partner
            M.No. 006099                                                                   M.No. 003390


Place: New Delhi
Date : 09.09.2010




                                                           63
                   Agriculture Insurance Company of India Limited


                                                Annexure - 2

            NOTES FORMING PART OF ACCOUNTS
1.      IRDA Compliance
        The Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor's
        Report of Insurance Companies) Regulation, 2002, have been complied with in the presentation of
        these accounts, to the extent applicable.
2.      Takeover of Crop Insurance Business
2.1     The Company was designated as the Implementing Agency for 'National Agricultural Insurance Scheme'
        with effect from 1st April 2003 by the Ministry of Agriculture, Government of India, vide its letter dated
        22nd October 2003. Accordingly, the crop insurance business was taken over by the Company from the
        General Insurance Corporation of India (GIC). Based on their audited statement, assets amounting to
        Rs. 58,95,66 thousand and liabilities amounting to Rs. 4,50,03,29 thousand relating to crop insurance
        business as on 31.03.2003 were received from GIC vide their letter dated 3rd February 2004 and were
        incorporated in the books of accounts of the Company.
2.2     The balance of Rs.2,18,56 thousand (previous year Rs.11,34,19 thousand) due from GIC as on
        31.03.2010 is subject to confirmation from GIC.
3       Business & Geographical Segment
        As per the Accounting Standard - 17 of the Institute of Chartered Accountants of India, it is disclosed
        that the Company has only one Business Segment, i.e. "CROP INSURANCE", and only one Geographical
        Segment, i.e., "INDIA".
4.      Disclosures Forming Part of Financial Statements
4.1     Contingent liabilities
4.1.1   Partly paid-up Investments: NIL (previous year NIL)
        Underwriting commitments outstanding: NIL (previous year NIL)
4.1.2   Claims, other than those under Policies, not acknowledged as debt: NIL (previous year NIL)
4.1.3   Guarantees given by or on behalf of the Company: NIL (previous year NIL)
4.1.4   Statutory Demands /Liabilities in dispute not provided for: NIL (previous year NIL)
4.1.5   Reinsurance obligations to the extent not provided for in Accounts: NIL (previous year NIL)
4.1.6   Others: NIL (previous year NIL)
4.2.1   Reserve for Unexpired Risks amounting to Rs.184.92 crore as on the date of transfer of business from
        GIC to the Company i.e., 01.04.2003 has not yet been transferred by GIC to the Company.
4.2.2   As at 31st March 2010, all the Assets of the Company are free from encumbrances, except (as mandatory
        under Section 7 of Insurance Act, 1938) Central Government Security - 6.72%, 2012, amounting to
        Rs.10,14,04 thousand (previous year Rs. 10,20,15 thousand) deposited with PNB Gilt (approved by RBI).
4.3     Commitment made and outstanding for Loans and Investments as on 31.03.2010: Rs.45,79,36 thousand
        (previous year NIL); against Fixed Assets: Rs.43,28 thousand (previous year Rs. NIL)
4.4     Net Claims Paid in India during the year is Rs. 688,68,39 thousand (previous year Rs. 441,74,53 thousand)
        i.e. Direct Claims Paid Rs.825,42,88 thousand (previous year Rs.530,99,62 thousand), less Reinsurance
        Ceded Rs. 136,74,49 thousand (previous year Rs.89,25,09 thousand). Claims Paid includes Refund of
        Claims.




                                                       64
A      n     n     u     a     l      R   e     p    o    r     t     2    0    0    9     - 10


4.5        In cases where the Claims payment period exceeds four years, the Claims-liability has been determined
           in accordance with the standard methodology and certification from the Actuary.
4.6        Ageing of claims is presented below, distinguishing between "Claims Outstanding (i.e. claims approved
           but not paid) for more than six months" and "Other Claims i.e. Claims Outstanding up to six months":-

                                                                                              Rs. in thousand
           Particulars                                          2009-10                                 2008-09
           Foreign Business                                                    NOT APPLICABLE
           Indian Business
           Claims o/s for more than six months                   7,02,46                                11,90,49
           Claims o/s up to six months                         249,90,30                               121,93,62

4.7        Net Premium written in India during the year is Rs.1268,50,77 thousand (previous year Rs.776,52,58
           thousand) i.e. Premium from direct business written Rs.1520,39,69 thousand (previous year Rs.833,44,26
           thousand).
4.8        Premium is recognized as per Significant Accounting Policy No. 3. Accordingly, Rabi premium amounting
           to Rs. 82,47,56 thousand (previous year Rs. 74,63,87 thousand) collected by the Banks from the
           farmers and received by the Company during April & May 2010 and the consequent additional provision
           for claims amounting to Rs. 99,28,13 thousand (previous year Rs. 93,09,77 thousand), is being accounted
           for in the next financial year.
4.9        Under Insurance Act 1938, risk can be assumed only when the requisite premium is received; viewed in
           this context, short collection of premium included under 'Schedule of Advances and Other Assets'
           represent amounts receivable from Nodal banks which remain un-confirmed as on 31.03.10
4.10       Value of Contracts in relation to Investments for :-
4.10.1 Purchases where deliveries are pending: NIL (previous year NIL)
4.10.2 Sales where payments are overdue: NIL (previous year NIL)
4.11       The historical cost of those Investments which are valued on "Fair Value" basis is Rs.125,57,19 thousand
           (previous year Rs. 6,99,87 thousand).
4.12       Computation of Managerial Remuneration as per Section 198 [pursuant to sub-section (A) of Section II
           of Part II of Schedule XIII] of the Companies Act, 1956 is presented below:-

                                                                                               Amount in Rupees
  Name                       Desig-       Gross Salary              Co's Contribution to     Other Perquisites
                             nation                                 PF/ Pension Fund
                                      Current       Previous        Current    Previous      Current      Previous
                                      Year          Year            Year       Year          Year         Year
  Mr. M Parshad              CMD      24,86,310     20,80,568       96,000     2,11,501      21,600       NIL


4.13       The basis of amortization of Debt Securities is stated in the Significant Accounting Policy No. 5.1. The
           total amount of Rs.3,09,59 thousand has been amortized during the year (previous year Rs.2,90,20
           thousand)
4.13.1 Unrealized Gain due to change in Fair Value of listed Equity Shares & Mutual Funds are shown separately
       under the head "Fair Value Change Account".
4.13.2 Pending realization, the credit balance in the "Fair Value Change Account" is not available for distribution.
4.14       The Company does not hold any immovable property for investment purposes.




                                                          65
                    Agriculture Insurance Company of India Limited


4.15      NAIS Claims approved and remaining unpaid for a period of more than six months as on 31st March
          2010 is Rs.8,99,56 thousand (previous year Rs.11,90,49 thousand), and the same for a period less
          than six months as 31st March 2010 is Rs.380,81,35 thousand, pending receipt of Governments' share
          of liabilities in this regard.
4.16      As per IRDA Circular Ref.:005/IRDA/F&A/CIR/May-09 dated 07.05.2009, the details of various penal
          actions taken by various Government Authorities during the year is as under:-


 S. No.      Authority                                  Non-              Amount in Rs.
                                                     Compliance/
                                                      violation      Penalty         Penalty      Penalty
                                                                     Awarded          Paid         Waived/
                                                                                                  Reduced
   1         Insurance Regulatory and                     NIL           NIL            NIL           NIL
             Development Authority
   2         Service Tax Authorities                      NIL           NIL            NIL           NIL
   3         Income Tax Authorities                       NIL           NIL            NIL           NIL
   4         Any other Tax Authorities                    NIL           NIL            NIL           NIL
   5         Enforcement Directorate/                     NIL           NIL            NIL           NIL
             Adjudicating Authority/ Tribunal or
             any Authority under FEMA
   6         Registrar of Companies/NCLT/                 NIL           NIL            NIL           NIL
             CLB/ Department of Corporate
             Affairs or any Authority under
             Companies Act, 1956
   7         Penalty awarded by any Court/                NIL           NIL            NIL           NIL
             Tribunal for any matter including
             claim settlement but excluding
             compensation
   8         Securities and Exchange                      NIL           NIL            NIL           NIL
             Board of India*
   9         Competition Commission of India              NIL           NIL            NIL           NIL
   10        Any other Central/State/ Local               NIL           NIL            NIL           NIL
             Govt./Statutory Authority
  *Post listing.

4.17      The Government of India vide their letter no. F. No. C-13014/16/2004-Ins.I dated 23.12.2009, called
          Rs.200 crore from the Company from the retained profits/reserves (created out of NAIS activity), as a
          prelude to the recasting of the Scheme as an ad-hoc payment. Accordingly, an amount of Rs. 200 crore
          was paid to the Government of India, with due approval of the Board; and concurrence of IRDA vide
          their letter dated 01.01.2010 and the same being an ad-hoc payment has been accounted for as 'Other
          Advances' under Schedule 12 of the Annual Accounts as on 31.03.2010 i.e., 'Advances and Other
          Assets' pending recast of the Scheme.
4.18      Against capital commitment of Rs.70,67,09 thousand for project Annapoorna undertaken by the company
          during the year, payments amounting to Rs. 24,87,73 thousand made during FY 2009-10 were charged
          to Capital Work-in-Progress as none of the applications envisaged in the said project was completed for
          its intended use as on 31st March, 2010.




                                                       66
A         n        n      u    a    l    R     e    p    o    r     t     2     0     0   9   - 10


4.19          Provisions for Claims Incurred but Not Reported (IBNR), and Provisions for Claims Incurred but Not
              Enough Reported (IBNER) are made as per Actuarial Certification based on the methodology suggested
              by Appointed Actuary as per IRDA Regulations. Whereas, during the year, there is no change in the
              methodology of IBNR computation in respect of NAIS, the new methodology followed by the Appointed
              Actuary in respect of Non-NAIS products based on review of portfolio performance over the years has
              resulted into an IBNR provision of Rs.25,15,84 thousand as against an amount of Rs.16,99,32 thousand
              as would have been provided for as per the methodology adopted in the previous year.
4.20          Pending revision of Pay Scales of employees due from August, 2007, a provision of Rs.2,93,11 thousand
              @17.5% as already offered by GIPSA has been made for payment of arrears to employees
4.21          Details of expenses incurred under the following heads:-
              Outsourcing (for non-core functions) : Rs.77,33 thousand (Previous year 69,99 thousand)
              Business development: Rs.98,03 thousand (Previous year 43,58 thousand)
              Marketing support : NIL(Previous year NIL)
4.22          Defalcation of premium remittances amount to Rs.62,30 thousand during the year has been accounted
              for by making appropriate provision.
4.23          Out of total NAIS IBNR provision of Rs.675,87,24 thousand as on 31st March, 2010, upon receipt of
              yield data from various States, IBNR amount of Rs.116,97,60 thousand stands crystallized resulting in
              the outstanding claim liability of Rs.94,90,21 thousand as on 30th June, 2010.
5             Related Party Disclosure as per Accounting Standard - 18 of the Institute of Chartered Accountants of
              India
5.1           Key Management Personnel
              1.       Mr. M. Parshad, Chairman-cum-Managing Director
                       Nature of Transactions:
              1.       Salaries, allowances and contributions: Rs.26.04 lakh (previous year Rs. 22.92 lakh)
              2.       Loan balances due as on 31.03.2010: NIL (previous year NIL)
5.2           A net balance of Rs.2,18,56 thousand, subject to confirmation, (previous year Rs.11,34,19 thousand) is
              due from General Insurance Corporation of India (GIC), which holds 35% of the Share Capital of the
              Company, besides the other amounts in respect of transfer of Assets & Liabilities. During the year, the
              Company paid Reinsurance Premium of Rs.72,89,87 thousand (previous year Rs. 7,54,24 thousand),
              and received Reinsurance Commission of Rs.14,49,32 thousand (previous year Rs. 1,48,09 thousand)
              and Reinsurance Claims of Rs.32,28,19 thousand (previous year Rs. 16,25,77 thousand).
6.1           During the year, the Company has received the following amounts from the Government (Central/States/
              UTs) towards implementation of NAIS and towards Premium Subsidy in respect of Pilot Scheme on
              Weather Based Crop Insurance :
                                                                                                              Rs. in crore
    Sl.       Particulars                                               Current Year                  Previous Year
                                                                            2009-10                         2008-09
    1.        NAIS - A & O Expenses                                              0.91                             2.48
    2.        NAIS - Publicity Expenses                                             .09                           0.31
    3.        NAIS - Premium Subsidy                                            79.46                            25.97
    4.        NAIS - Bank Service Charges                                       10.08                             6.98
    5.        NAIS - Claim Share                                              2942.81                         1264.37
    6.        NAIS - Corpus Fund                                                 1.17                             0.00
    7.        WBCIS - Premium Subsidy                                          227.81                           118.36
              TOTAL                                                           3262.33                         1418.47
    Further, the Government-wise balances as at 31.03.2010 are detailed in Annexure-7




                                                               67
                   Agriculture Insurance Company of India Limited


6.2     The Opening Balance under NAIP was Rs. 2,12,752/- and during the year, the Company has received
        an amount of Rs. 2,71,248/- for implementation of 'Risk Assessment and Insurance Products for
        Agriculture' under National Agricultural Innovation Project (NAIP), out of which an amount of Rs.4,83,996/
        - has been utilized under basic and strategic research during the year, leaving a balance amount of Rs.
        44,124/- (including FD interest of Rs.44,120/-) as at 31.03.2010 lying with the Company.
7       Sharing of Expenses of NAIS
        As per NAIS provisions, the Administrative & Operating Expenses are shared among the Company, the
        Govt. of India, and the State/Union Territory Government on a specified basis. For the year under
        review, 20% (previous year 20%) of the total Administrative & Operating Expenses incurred for NAIS
        are recoverable from the Govt. of India and the respective State/UT Governments. The total recoverable
        share amounts to Rs.3,25,82 thousand (previous year Rs.3,07,56 thousand).
        Expenses incurred towards NAIS shown under Schedule 4 are net of the Government's (Centre/ States
        / UTs) share of 20% (previous year 20%) receivable from the respective Government.
8       Investments
        The Company has invested its funds as per the investment pattern prescribed by the IRDA Regulations
        on Investments, and the Company's Investment Policy. The Book value of Investments of the Company
        as on 31st March, 2010 is Rs.2369,44,04 thousand (previous year Rs.1974,68,58 thousand), and the
        Market value of the Company's Investments as on that date is Rs.2375,62,02 thousand (previous year
        Rs.1974,86,55 thousand). Gross Income from Investments amounted to Rs.189,71,25 thousand during
        the financial year under review (previous year Rs. 163,65,26 thousand). Profit/Loss on Sale/Redemption
        of equity investment is accounted for on First in First Out (FIFO) method.
9       Income Share on Corpus Fund
        During the year under review, income earned on investment of the Corpus Fund provided by the
        Government (Centre/ States/UTs) amounts to Rs.9,62,92 thousand (previous year Rs.8,75,13 thousand),
        and has been credited to the said Fund.
10      Reinsurance
        During the year under review, the Company paid a sum of Rs. 251,88,91 thousand (previous year Rs.
        56,91,68 thousand) as Reinsurance Premium and earned a commission of Rs. 49,97,42 thousand
        (previous year Rs. 10,61,40 thousand), and has accounted for Reinsurance Claims recovery of Rs.
        213,23,29 thousand (previous year Rs. 43,35,81 thousand)
11      Borrowings
        As at the end of the year under review, the Company has no borrowings (previous year Rs. NIL)
12      Retirement Benefits to Employees
12.1.1 The Company's liabilities on account of Retirement Benefits towards Pension, Gratuity, Leave
       Encashment, Sick Leave and Leave Travel Subsidy (LTS) in respect of employees have been duly
       provided for as per actuarial valuation in terms of AS 15 of the Institute of Chartered Accountants of
       India and the same has been accounted for under the head "Retirement Benefits, in Schedule 14 of the
       Balance Sheet.
12.1.2 As majority of the Company's employees are transferred from the erstwhile Implementing Agency i.e.
       General Insurance Corp. of India with effect from 01.03.2004, these employees continue to be governed
       by the Service Rules and Regulations as applicable to the employees of GIC in terms of the decision of
       the Board, until the Company frames its own Personnel Rules. The Company has accordingly followed
       GIC's Rules in respect of Retirement Benefits to such employees.
12.1.3 Pending notification of the detailed modalities of implementation of the new Pension Scheme-2003, the
       employer's and employees' monthly contributions towards pension along with the interest realized thereon
       are placed in fixed deposits with the Company's bank as approved by the Board and disclosed under
       Schedule 11 as item No. 4 'Others'. Since these FDRs stand in the name of the company and also that
       the interest earned on these FDRs is directly credited to the New Pension Fund Account, interest of
       Rs.9,66 thousand earned during the financial year 2009-10 is offered for taxation.




                                                       68
A      n     n    u     a    l     R     e   p     o     r       t   2    0      0       9     - 10


12.2       The Company has recognized in the P & L Account for the year ended 31st March 2010, the following
           amounts under defined contribution plans, the details of the obligations in respect of employee benefits
           are as follows:-
                                                                                                    (Amount in Rs.)
                                                   Gratuity             Leave            Pension Plan Leave Travel
                                                 (Unfunded)          Encashment            (Funded)   (Unfunded)
                                                                       (PL+SL)
                                                                     (Unfunded)
Reconciliation of opening and closing balances of obligations
a      Obligation as at                         2,65,67,718           1,83,05,434             37,54,236      14,79,793
       April 01, 2009                          [21,888,541]          [15,715,629]            [49,23,835]    [14,96,886]
b      Current Service Cost                       14,80,872            93,11,608               7,37,426      15,15,702
                                                 [16,56,310]          [30,93,825]             [7,63,626]     [9,65,600]
c      Interest Cost                              19,11,571            21,01,314               2,88,606       1,56,635
                                                 [15,90,168]          [12,08,378]             [3,71,395]     [1,58,375]
d      Actuarial (Gain) / Loss                -1,13,23,794             -73,79,086           -4,42,834          4,02,905
                                                [15,61,131]          [(13,25,599)]       [(23,04,620)]          [22,285]
e      Benefits paid                               -1,13,081            -6,27,985                     0       -8,75,613
                                                 [-1,28,432]          [(3,86,799)]                   [0]   [(11,63,353)]
f      Obligation as at                        1,85,23,286            2,17,11,285             43,37,434      26,79,422
       March 31, 2010                         [2,65,67,718]          [1,83,05,434]           [37,54,236]    [14,79,793]
Change in Plan Assets ( Reconciliation of opening and closing balances)
a      Fair Value of Plan Assets as at                   0.00                   0.00               0.00            0.00
       April 01, 2009                                  [0.00]                 [0.00]              [0.00]          [0.00]
b      Expected return on Plan Asset                     0.00                  0.00                0.00            0.00
                                                       [0.00]                 [0.00]              [0.00]          [0.00]
c      Contributions                                     0.00                   0.00                0.00           0.00
                                                       [0.00]                 [0.00]              [0.00]          [0.00]
d      Benefits paid                                    0.00                   0.00                0.00            0.00
                                                       [0.00]                 [0.00]              [0.00]          [0.00]
e      Fair Value of Plan Assets as at                       -                       -                 -               -
       March 31, 2010
Reconciliation of fair value of assets and obligations
a      Present value of obligation as at       1,85,23,286            2,17,11,285             43,37,434      26,79,422
       March 31, 2010                         [2,65,67,718]          [1,83,05,434]           [37,54,236]    [14,79,793]
b      Fair Value of Plan Assets                             -                       -                 -               -
       as at March 31, 2010
c      Unfunded amount recognized              1,85,23,286            2,17,11,285             43,37,434      26,79,422
       in the Balance Sheet                   [2,65,67,718]          [1,83,05,434]           [37,54,236]    [14,79,793]
Expense recognized during the year
a      Current Service Cost                       14,80,872            93,11,608               7,37,426      15,15,702
                                                 [16,56,310]          [30,93,825]             [7,63,626]     [9,65,600]




                                                          69
                     Agriculture Insurance Company of India Limited



b       Interest Cost                            19,11,571          21,01,314         2,88,606        1,56,635
                                                [15,90,168]        [12,08,378]       [3,71,395]      [1,58,375]
c       Expected return on Plan Assets                    -                   -                -               -
d       Actuarial (Gain) / Loss               -1,13,23,794         (73,79,086)        -4,42,834        4,02,905
                                                [15,61,131]       [(13,25,599)]    [(23,04,620)]       [22,285]
e       Expenses recognized                      -79,31,351         40,33,836         5,83,198       20,75,242
        during the year                         [48,07,609]        [29,76,604]     [(11,69,599]     [11,46,260]
Assumptions
a       Discount Rate (per annum)                   7.00%               7.00%            7.00%           7.00%
                                                   [7.00%]             [7.00%]          [7.00%]         [8.00%]
b       Expected rate of return on                     N.A                N.A.             N.A.            N.A.
        Plan Assets (per annum)
c       Rate of escalation in salary                 5.00%              5.00%            6.00%           6.00%
        (per annum)                                [5.00%]             [5.00%]          [6.00%]         [6.00%]
                                                         **[figures in square brackets are previous year's figures]
13        Taxes Paid in Advance
          During the year, the Company has been subjected to Tax Deducted at Source NIL (previous year
          Rs.13,46 thousand). The Company has paid Advance Income Tax amounting to Rs.81,00,00 thousand
          (previous year Rs.104,00,00 thousand), Fringe Benefit Tax amounting to Rs.2,17 thousand (previous
          year Rs. 15,00 thousand), and Wealth Tax amounting to Rs.81 thousand (previous year Rs.67 thousand),
          totaling to Rs. 81,02,98 thousand. The Company has paid Securities Transaction Tax during the year
          Rs.28 thousand (previous year NIL)
14        Deferred Tax Assets / Liability
          The computation of Deferred Tax Asset/ Liability in accordance with Accounting Standard - 22 (Accounting
          for Taxes on Income) of the Institute of Chartered Accountants of India, has resulted in a Deferred Tax
          Asset of Rs. 2,76,75 thousand as at 31.03.2010 (previous year Rs. 3,92,39 thousand) and the same
          has been provided for in the books of accounts as under:-
                                                                                                   Rs. in thousand
     Deferred Tax Assets                                      As on 31.03.2010               As on 31.03.2009
     Difference in WDV                                                     48,58                          40,08
     Retirement Benefits                                                 4,72,51                       10,11,98
     Ad-hoc Provision for PLI & wage revision                            2,93,11                        1,02,36
     TOTAL                                                               8,14,20                       11,54,42
     Deferred Tax Assets                                                 2,76,75                        3,92,39

15        Impairment in the Value of Fixed Assets
          In accordance with the Accounting Standard - 28 of the Institute of Chartered Accountants of India, the
          Management has assessed the possibility of impairment of Fixed Assets and there is no impairment in
          the value of Fixed Asset.
16        The title deeds in respect of three residential flats located at Bangalore, in possession of the Company,
          are yet to be transferred from GIC into the name of the Company.
17        Cash Flow Statement
          The Company has prepared the "Cash Flow Statement" for the period under review, adopting the Direct
          Method as required under the IRDA Regulations (Annexure - 4).




                                                        70
A      n          n     u    a    l    R     e    p   o    r       t       2      0    0     9    - 10


18         Summary of Financial Statements
           The "Summary of Financial Statements", as required under the IRDA Regulations, attached
           (Annexure - 5).
19         Accounting Ratios
           "Accounting Ratios", as required under the IRDA Regulations, attached (Annexure - 6)


20         Earnings Per Share [EPS]
           The Earnings per Share (EPS) of the Company as per Accounting Standard - 20 of the Institute of
           Chartered Accountants of India is as under:

           PARTICULARS                                                    Current Year               Previous Year
                                                                            2009-10                     2008-09
           Profit after Tax (net of prior-period adjustments)          Rs. 33,40,24 thousand      Rs. 232,60,83 thousand
           Weighted number of Equity Shares                            Rs. 20,00,00 thousand      Rs. 20,00,00 thousand
           Nominal Value of Share                                      Rs. 10/- per Share         Rs. 10/- per Share
           Basic & Diluted EPS                                         Rs. 1.67                   Rs. 11.63

21         Provisions, Contingent liabilities and Contingent Assets (AS 29)
           Disclosure relating to Provisions
                                                                                                       Rupees in thousand
     Particulars                              Provision for               Provision for                Provision for
                                               Income Tax              Retirement Benefits        Bad and Doubtful Debts
                                        2009-10       2008-09           2009-10       2008-09      2009-10     2008-09
     Opening Balance                   3357008        2118729            102677        98166        22464        14399
     Additions                           123705       1238279              4605            4511       9937        9865
     Utilization                         735308           NIL                  NIL          NIL        NIL         NIL
     Reversals                           105188           NIL             60031             NIL          71       1800
     Closing Balance                   2640217        3357008             47251       102677        32330        22464


a.         Provision for Income Tax has been grouped under the head "Advance Tax Paid and Taxes Deducted at
           Source (net of provision for taxation)" in Schedule 12.
b.         Provision for Pension, Gratuity, Leave Encashment, Sick Leave and Leave Travel Subsidy has been
           grouped under the head "Others (Provision for Retirement Benefits)" in Schedule 14.
c.         Provision for Doubtful Debts, Premium Defalcation, Standard Assets, and difference in Cenvet Input
           Credit has been shown under the head "Others" in Schedule 14.
           (i)        Income-tax provision has been made towards matters disputed at various appellate levels.
           (ii)       Provision for Doubtful Debts has been made based on the estimates made by the Management.
22         Legal Cases
           In respect of legal cases filed by the insured farmers under NAIS which have been awarded against the
           Company by the Original Court of jurisdiction, necessary provision there-against have been made to the
           extent of the liability of the Company as per the provisions of the Scheme.




                                                              71
                    Agriculture Insurance Company of India Limited


23       Intangible Assets
         Since the Software in use by the Company stands fully amortized by FY 2007-08, the same is included
         in the financial statements as on 31.03.2010 at NIL Written Down Value.
24       Micro, Small and Medium Enterprises Development Act, 2006
         The information as to amount due to suppliers under the Micro, Small and Medium Enterprises
         Development Act, 2006 is not readily available with the Company and hence disclosures, if any, relating
         to amounts unpaid as at the year end together with interest paid / payable as required under the said Act
         have not been given.
25       Presentation
         Figures in brackets, unless stated otherwise, reflect negative figures.
26       Previous Year's Figures
         Previous year's figures have been regrouped and restated, as per the requirements of IRDA reporting
         norms, or else wherever deemed necessary, to make it comparable with the current year's figures.




     (Kanika Sharma Shandil)                   (M.K.Poddar)                         (R.P. Samal)
        Company Secretary                    Dy. Gen. Manager                      General Manager


         (K.N.Bhandari)                        (S.K.Chanana)                        (M.Parshad)
             Director                              Director                Chairman-cum-Managing Director


     For M/s Gupta & Gupta                                                    For M/s Kishore & Kishore
      Chartered Accountants                                                     Chartered Accountants

          (S.B.Gupta)                                                                (S.C.Kishore)
             Partner                                                                    Partner
          M.No. 006099                                                               M.No. 003390


Place : New Delhi
Date : 09.09.2010




                                                       72
                                                                                                                                                                                                                 A
                                                            GOVERNMENT FUND STATEMENT                                                                                             Annexure - 7
                                                                                                                                                                                                                 n
                                                                                  AS ON 31.03.2010                                                                                             Amount in Rs.
     SL. STATE / UT GOVT. Particulars                            Corpus             A&O            Publicity          Premium          Premium               Bank               Claims                TOTAL
                                                                                                                                                                                                                 n

     NO.                                                           Fund          Expenses         Expenses             Subsidy          Subsidy            Service               Share
                                                                                                                        (NAIS)      (WBCIS & Ors)         Charges
                                                                                                                                                                                                                 u



     1   HEAD OFFICE        Opening Bal. (01.04.2009)      98,882,521.84              0.00    15,384,432.17               0.00      786,831,979.19            0.00      190,382,356.13   1,091,481,289.34
         New Delhi          Receipts (from Govt.)                                                                                 1,200,000,000.00                   14,190,000,000.00  15,390,000,000.00
                                                                                                                                                                                                                 a




         (Govt. of India)   Credit-adjustments (rct)                                                                                                                                                 0.00
                            Credit-adjustments (others)                      16,291,240.32             0.00      375,164,129.49                     46,723,085.79    (438,178,455.60)                0.00
                                                                                                                                                                                                                 l




                            Payments (to Govt.)                                                                                                                                                      0.00
                            Debit-adjustments (pmt)                                           (2,589,218.33)   (375,164,129.49)(1,797,889,889.98) (46,723,085.79) (13,898,576,194.21) (16,120,942,517.80)
                            Debit-adjustments (others)
                                                                                                                                                                                                                 R




                            Apportionment                                   (16,291,240.32)                                                                                                  (16,291,240.32)
                            Income Share on Corpus Fund     9,237,495.88                                                                                                                        9,237,495.88
                            Closing Bal. (31.03.2010)     108,120,017.73              0.00    12,795,213.84               0.00     188,942,089.21             0.00       43,627,706.32        353,485,027.10
                                                                                                                                                                                                                 e




     2   AHMEDABAD          Opening Bal. (01.04.2009)     304,517,076.99    (17,081,095.12)    1,102,398.82      (4,987,187.22)               0.00    1,767,819.68        3,722,216.57        289,041,229.72
                                                                                                                                                                                                                 p




         Gujarat            Receipts (from Govt.)                                                                12,376,829.00                                0.00    1,935,310,389.00      1,947,687,218.00
                            Credit-adjustments (rct)                                                   0.00                0.00                               0.00          508,932.50              508,932.50
                            Credit-adjustments (others)                                                                                                                                                   0.00
                                                                                                                                                                                                                 o




                            Payments (to Govt.)                                                        0.00                0.00                                                    0.00                   0.00
                            Debit-adjustments (pmt)                                            (248,826.50)     (15,904,624.85)               0.00            0.00   (1,939,032,608.16)   (1,955,186,059.51)
                                                                                                                                                                                                                 r




                            Debit-adjustments (others)    (52,972,230.23)                              0.00                                                                                   (52,972,230.23)




73
                            Apportionment                                    (1,217,748.45)            0.00                                                                                     (1,217,748.45)
                                                                                                                                                                                                                 t




                            Income Share on Corpus Fund    28,447,648.71                                                                                                                        28,447,648.71
                            Closing Bal. (31.03.2010)     279,992,495.47    (18,298,843.56)      853,572.32      (8,514,983.07)               0.00    1,767,819.68          508,929.91         256,308,990.74
                                                                                                                                                                                                                 2




     3   BANGALORE          Opening Bal. (01.04.2009)       (192,119.56)      2,011,428.45     1,952,367.97      (1,363,318.29)     (3,997,823.69)      526,131.99       20,171,582.49        19,108,249.36
         Karnataka          Receipts (from Govt.)                   0.00              0.00             0.00        8,531,511.00     61,700,000.00     5,711,369.00      551,090,367.87       627,033,247.87
                                                                                                                                                                                                                 0




                            Credit-adjustments (rct)          192,119.56              0.00             0.00                              25,391.58                        3,962,059.29         4,179,570.43
                            Credit-adjustments (others)
                            Payments (to Govt.)                     0.00              0.00             0.00      (6,600,957.81)    (63,775,689.64)            0.00    (541,942,177.07)     (612,318,824.52)
                                                                                                                                                                                                                 0




                            Debit-adjustments (pmt)                 0.00              0.00      (10,687.50)                0.00       (666,874.00)            0.00        (192,119.56)         (869,681.06)
                            Debit-adjustments (others)
                                                                                                                                                                                                                 9




                            Apportionment                           0.00     (1,814,393.41)            0.00               0.00                                0.00                0.00        (1,814,393.41)
                            Income Share on Corpus Fund             0.00               0.00            0.00               0.00                                0.00                0.00                  0.00
                            Closing Bal. (31.03.2010)               0.00         197,035.04    1,941,680.47         567,234.90      (6,714,995.75)    6,237,500.99       33,089,713.02         35,318,168.67

     4   BHOPAL             Opening Bal. (01.04.2009)     112,146,076.95     (2,572,354.84)       30,979.90      (7,013,221.35)     (1,130,284.65)      383,043.17          774,947.99       102,619,187.18
                                                                                                                                                                                                                 - 10




         Madhya Pradesh     Receipts (from Govt.)                   0.00       2,572,260.95            0.00      10,386,799.10        8,685,418.17   13,363,006.06    1,165,491,029.72     1,200,498,514.00
                            Credit-adjustments (rct)                0.00                               0.00                                   0.00      229,702.88        1,427,699.13         1,657,402.01
                            Credit-adjustments (others)
                            Payments (to Govt.)                     0.00              0.00             0.00                0.00                               0.00                 0.00                 0.00
                            Debit-adjustments (pmt)                 0.00              0.00     (191,201.07)     (14,680,315.20)    (64,225,592.71)            0.00   (1,165,519,182.41)   (1,244,616,291.39)
                            Debit-adjustments (others)
                            Apportionment                                    (1,319,825.08)            0.00                                                                                   (1,319,825.08)
                            Income Share on Corpus Fund    10,476,562.54                                                                                                                      10,476,562.54
                            Closing Bal. (31.03.2010)     122,622,639.49     (1,319,918.97)    (160,221.17)     (11,306,737.45)    (56,670,459.19)   13,975,752.11        2,174,494.43         69,315,549.25
     SL. STATE / UT GOVT. Particulars                         Corpus            A&O            Publicity        Premium          Premium             Bank            Claims              TOTAL
     NO.                                                        Fund         Expenses         Expenses           Subsidy          Subsidy          Service            Share
                                                                                                                  (NAIS)      (WBCIS & Ors)       Charges

     5    BHUBANESHWAR Opening Bal. (01.04.2009)                  0.00   (8,731,148.43)   (1,727,325.11)    (9,453,086.46)             0.00          229.57             0.00     (19,911,330.43)
          Orissa       Receipts (from Govt.)                      0.00             0.00             0.00    10,356,278.62     56,219,429.00    3,343,471.39    63,034,120.74     132,953,299.75
                       Credit-adjustments (rct)                   0.00             0.00             0.00              0.00             0.00            0.00             0.00                0.00
                       Credit-adjustments (others)
                       Payments (to Govt.)                        0.00            0.00             0.00               0.00              0.00           0.00              0.00               0.00
                       Debit-adjustments (pmt)                    0.00            0.00     (112,076.50)    (18,669,509.65)   (56,219,429.21) (3,343,471.37)   (63,034,120.74)   (141,378,607.47)
                       Debit-adjustments (others)
                       Apportionment                                      (668,650.75)             0.00                                                                             (668,650.75)
                       Income Share on Corpus Fund               0.00                                                                                                                       0.00
                       Closing Bal. (31.03.2010)                 0.00    (9,399,799.18)   (1,839,401.61)   (17,766,317.49)            (0.21)        229.59              0.00     (29,005,288.90)

     6 (A) CHANDIGARH       Opening Bal. (01.04.2009)             0.00     (64,730.16)        11,428.44     (2,050,571.10)       (80,594.00)           0.00       970,560.80      (1,213,906.02)
           Himachal Pradesh Receipts (from Govt.)                 0.00            0.00             0.00       1,103,057.00        290,577.00           0.00              0.00       1,393,634.00
                            Credit-adjustments (rct)              0.00            0.00             0.00               0.00              0.00           0.00              0.00                0.00
                            Credit-adjustments (others)                           0.00             0.00               0.00              0.00      88,763.01              0.00           88,763.01
                            Payments (to Govt.)                   0.00            0.00             0.00               0.00              0.00           0.00              0.00                0.00
                            Debit-adjustments (pmt)               0.00            0.00      (36,099.50)     (6,481,329.62)    (5,784,093.50)    (46,250.29)              0.00    (12,347,772.91)
                            Debit-adjustments (others)                            0.00             0.00               0.00              0.00           0.00       (88,763.01)         (88,763.01)
                            Apportionment                        0.00      (65,607.53)             0.00                                                                               (65,607.53)
                            Income Share on Corpus Fund          0.00                                                                                                                        0.00
                            Closing Bal. (31.03.2010)            0.00     (130,337.70)       (24,671.06)    (7,428,843.72)    (5,574,110.50)      42,512.72       881,797.79     (12,233,652.46)




74
     6 (B) Haryana          Opening Bal. (01.04.2009)     2,911,151.22    (257,558.88)        42,428.14         (1,601.53)             0.00      55,997.20             23.58        2,750,439.73
                            Receipts (from Govt.)                 0.00            0.00             0.00               0.00        14,097.00           0.00      3,386,558.00        3,400,655.00
                            Credit-adjustments (rct)              0.00                             0.00               0.00                            0.00              0.00                0.00
                            Credit-adjustments (others)                                                                                                                                     0.00
                            Payments (to Govt.)                   0.00            0.00             0.00              0.00                              0.00              0.00               0.00
                            Debit-adjustments (pmt)               0.00            0.00      (82,903.50)      (831,266.38)      (989,433.50)      (2,993.09)    (3,386,558.28)     (5,293,154.75)
                            Debit-adjustments (others)                                                                                                                                      0.00
                            Apportionment                         0.00    (241,357.64)             0.00              0.00                              0.00             0.00        (241,357.64)
                            Income Share on Corpus Fund     271,956.53                                                                                                                271,956.53
                            Closing Bal. (31.03.2010)     3,183,107.75    (498,916.53)       (40,475.36)      (832,867.91)     (975,336.50)       53,004.11            23.30          888,538.87

     6 (C) Jammu & Kashmir Opening Bal. (01.04.2009)             0.00      (28,438.83)     (722,954.10)        (61,461.70)             0.00         739.14              2.27        (812,113.22)
                           Receipts (from Govt.)                 0.00             0.00             0.00               0.00                            0.00              0.00                0.00
                           Credit-adjustments (rct)              0.00                              0.00               0.00                            0.00                                  0.00
                           Credit-adjustments (others)
                           Payments (to Govt.)                    0.00            0.00             0.00               0.00                             0.00             0.00                0.00
                           Debit-adjustments (pmt)                0.00            0.00             0.00        (41,165.50)             0.00            0.00             0.00         (41,165.50)
                           Debit-adjustments (others)
                           Apportionment                          0.00       (5,342.27)            0.00               0.00                            0.00              0.00          (5,342.27)
                           Income Share on Corpus Fund            0.00             0.00            0.00               0.00                            0.00              0.00                0.00
                           Closing Bal. (31.03.2010)              0.00      (33,781.11)    (722,954.10)       (102,627.20)                          739.14              2.27        (858,621.00)
                                                                                                                                                                                                    Agriculture Insurance Company of India Limited
                                                                                                                                                                                                          A
     SL. STATE / UT GOVT. Particulars                           Corpus           A&O          Publicity          Premium         Premium              Bank               Claims                TOTAL
     NO.                                                          Fund        Expenses       Expenses             Subsidy         Subsidy           Service               Share
                                                                                                                   (NAIS)     (WBCIS & Ors)        Charges
                                                                                                                                                                                                          n
     7 (A) CHENNAI         Opening Bal. (01.04.2009)     88,652,059.79    (1,337,810.79)   (787,641.46)   (236,299,195.04)   (13,206,378.65)   1,117,108.53           (5,323.64)     (161,867,181.27)
                                                                                                                                                                                                          n

           Tamil Nadu      Receipts (from Govt.)                  0.00              0.00           0.00    231,789,506.00     13,491,077.00    7,589,189.00    3,123,427,131.00      3,376,296,903.00
                           Credit-adjustments (rct)      11,133,686.00              0.00           0.00               0.00              0.00           0.00                 0.00        11,133,686.00
                                                                                                                                                                                                          u



                           Credit-adjustments (others)                                                                                                                                             0.00
                           Payments (to Govt.)                     0.00            0.00           0.00                0.00    (1,502,771.65)           0.00         (342,412.00)        (1,845,183.65)
                                                                                                                                                                                                          a




                           Debit-adjustments (pmt)                 0.00            0.00           0.00    (336,390,136.22)   (14,095,227.62) (1,117,066.57)   (3,123,720,134.21)   (3,475,322,564.62)
                           Debit-adjustments (others)                                                                            (23,045.35)                                                (23,045.35)
                                                                                                                                                                                                          l




                           Apportionment                                  (1,094,911.85)          0.00                                  0.00                                            (1,094,911.85)
                           Income Share on Corpus Fund     8,281,777.43                                                                 0.00                                              8,281,777.43
                           Closing Bal. (31.03.2010)     108,067,523.21   (2,432,722.64)   (787,641.46)   (340,899,825.26)   (15,336,346.27)   7,589,230.96         (640,738.85)     (244,440,520.31)
                                                                                                                                                                                                          R




     7 (B) Pondicherry     Opening Bal. (01.04.2009)       9,355,501.81      (41,514.71)   (128,607.03)       (415,516.86)             0.00         337.16                 0.00          8,770,200.38
                           Receipts (from Govt.)                   0.00             0.00           0.00         525,521.23             0.00      17,512.03                 0.00            543,033.26
                                                                                                                                                                                                          e




                           Credit-adjustments (rct)                0.00             0.00           0.00               0.00             0.00           0.00            39,261.00             39,261.00
                           Credit-adjustments (others)
                                                                                                                                                                                                          p




                           Payments (to Govt.)                     0.00            0.00           0.00                0.00             0.00            0.00                 0.00                 0.00
                           Debit-adjustments (pmt)                 0.00            0.00           0.00        (934,976.72)             0.00        (337.16)          (39,261.00)         (974,574.88)
                                                                                                                                                                                                          o




                           Debit-adjustments (others)
                           Apportionment                           0.00       (3,234.63)           0.00               0.00             0.00            0.00                0.00             (3,234.63)
                           Income Share on Corpus Fund       873,980.64             0.00           0.00               0.00             0.00            0.00                0.00            873,980.64
                                                                                                                                                                                                          r




                           Closing Bal. (31.03.2010)      10,229,482.45      (44,749.34)   (128,607.03)       (824,972.35)             0.00       17,512.03                0.00          9,248,665.76




75
                                                                                                                                                                                                          t




     7 (C) Andaman &       Opening Bal. (01.04.2009)       3,210,579.04       (1,367.58)    (63,736.56)        (11,148.57)             0.00          732.03                0.00          3,135,058.36
           Nicobar         Receipts (from Govt.)                   0.00             0.00           0.00          36,393.00             0.00        2,318.00                0.00             38,711.00
                           Credit-adjustments (rct)                0.00             0.00           0.00               0.00             0.00            0.00                0.00                  0.00
                                                                                                                                                                                                          2




                           Credit-adjustments (others)
                           Payments (to Govt.)                     0.00            0.00           0.00                0.00             0.00            0.00                0.00                  0.00
                                                                                                                                                                                                          0




                           Debit-adjustments (pmt)                 0.00            0.00           0.00         (25,244.43)             0.00        (731.96)                0.00           (25,976.39)
                           Debit-adjustments (others)
                                                                                                                                                                                                          0




                           Apportionment                           0.00          (84.47)           0.00              0.00              0.00            0.00                0.00                (84.47)
                           Income Share on Corpus Fund       299,928.74             0.00           0.00              0.00              0.00            0.00                0.00            299,928.74
                                                                                                                                                                                                          9




                           Closing Bal. (31.03.2010)       3,510,507.78       (1,452.05)    (63,736.56)              0.00              0.00        2,318.07                0.00          3,447,637.24

     8    DEHRADUN         Opening Bal. (01.04.2009)       5,455,101.77      312,000.06     438,172.72         736,349.23      2,215,464.52     214,234.83        10,673,033.34         20,044,356.47
          Uttaranchal      Receipts (from Govt.)                                                               291,000.00                                         41,322,000.00         41,613,000.00
                           Credit-adjustments (rct)                0.00                                                                                                                           0.00
                                                                                                                                                                                                          - 10




                           Credit-adjustments (others)                                                                                                             4,994,294.45          4,994,294.45
                           Payments (to Govt.)                     0.00                                                                                                                           0.00
                           Debit-adjustments (pmt)       (4,984,994.75)            0.00    (279,193.90)     (1,834,611.86)    (2,187,696.77)   (159,390.50)     (56,989,264.25)       (66,435,152.03)
                           Debit-adjustments (others)                                                                                            (9,299.70)                                 (9,299.70)
                           Apportionment                                   (283,637.95)           0.00                                 0.00                                              (283,637.95)
                           Income Share on Corpus Fund      509,609.58                                                                 0.00                                                509,609.58
                           Closing Bal. (31.03.2010)        979,716.60        28,362.11     158,978.82        (807,262.63)        27,767.75       45,544.63               63.54            433,170.82
     SL. STATE / UT GOVT. Particulars                        Corpus            A&O            Publicity        Premium        Premium            Bank          Claims           TOTAL
     NO.                                                       Fund         Expenses         Expenses           Subsidy        Subsidy         Service          Share
                                                                                                                 (NAIS)    (WBCIS & Ors)      Charges


     9 (A) GUWAHATI        Opening Bal. (01.04.2009)            0.00    (3,958,713.43)   (1,023,793.56)    (413,800.08)            0.00     128,988.59    (188,006.83)   (5,455,325.31)
           Assam           Receipts (from Govt.)                0.00              0.00             0.00     950,990.26             0.00     312,528.74            0.00     1,263,519.00
                           Credit-adjustments (rct)             0.00              0.00             0.00            0.00            0.00       4,015.00            0.00         4,015.00
                           Credit-adjustments (others)          0.00                                                                                       366,082.89        366,082.89
                           Payments (to Govt.)                  0.00             0.00             0.00              0.00           0.00            0.00    188,006.83        188,006.83
                           Debit-adjustments (pmt)              0.00             0.00      (35,224.50)    (1,132,410.14)           0.00    (191,560.14)           0.00   (1,359,194.78)
                           Debit-adjustments (others)           0.00                                        (106,398.39)                    (81,608.44)                    (188,006.83)
                           Apportionment                        0.00      (243,658.88)             0.00             0.00           0.00            0.00          0.00      (243,658.88)
                           Income Share on Corpus Fund          0.00              0.00             0.00             0.00           0.00            0.00          0.00              0.00
                           Closing Bal. (31.03.2010)            0.00    (4,202,372.31)   (1,059,018.06)     (701,618.35)           0.00      172,363.75    366,082.89    (5,424,562.08)

     9 (B) Meghalaya       Opening Bal. (01.04.2009)     4,937,090.68      319,255.80       278,728.71       143,605.13            0.00      20,168.94     882,231.19     6,581,080.46
                           Receipts (from Govt.)                 0.00            0.00             0.00             0.00            0.00           0.00           0.00             0.00
                           Credit-adjustments (rct)              0.00            0.00             0.00             0.00            0.00           0.00           0.00             0.00
                           Credit-adjustments (others)
                           Payments (to Govt.)                  0.00             0.00             0.00             0.00            0.00           0.00            0.00            0.00
                           Debit-adjustments (pmt)              0.00             0.00             0.00     (168,106.81)            0.00           0.00     (18,812.63)    (186,919.44)
                           Debit-adjustments (others)
                           Apportionment                         0.00     (35,792.82)             0.00              0.00           0.00           0.00           0.00      (35,792.82)
                           Income Share on Corpus Fund     461,217.55            0.00             0.00              0.00           0.00           0.00           0.00       461,217.55
                           Closing Bal. (31.03.2010)     5,398,308.24      283,462.98       278,728.71       (24,501.68)           0.00      20,168.94     863,418.56     6,819,585.75




76
     9 (B) MANIPUR         Opening Bal. (01.04.2009)            0.00             0.00             0.00             0.00            0.00           0.00            0.00            0.00
                           Receipts (from Govt.)                0.00             0.00             0.00       331,263.11            0.00      93,478.70    7,435,356.48    7,860,098.29
                           Credit-adjustments (rct)             0.00             0.00             0.00             0.00            0.00           0.00            0.00            0.00
                           Credit-adjustments (others)          0.00             0.00             0.00             0.00            0.00           0.00            0.00
                           Payments (to Govt.)                  0.00             0.00             0.00             0.00            0.00           0.00            0.00            0.00
                           Debit-adjustments (pmt)              0.00             0.00             0.00     (331,263.11)            0.00           0.00            0.00    (331,263.11)
                           Debit-adjustments (others)           0.00             0.00             0.00             0.00            0.00           0.00            0.00
                           Apportionment                                                                                                                                          0.00
                           Income Share on Corpus Fund                                                                                                                            0.00
                           Closing Bal. (31.03.2010)             0.00            0.00             0.00             0.00            0.00      93,478.70    7,435,356.48    7,528,835.18

     9 (B) MIJORAM         Opening Bal. (01.04.2009)            0.00             0.00             0.00              0.00           0.00           0.00            0.00            0.00
                           Receipts (from Govt.)                0.00             0.00             0.00              0.00           0.00           0.00            0.00            0.00
                           Credit-adjustments (rct)             0.00             0.00             0.00              0.00           0.00           0.00            0.00            0.00
                           Credit-adjustments (others)          0.00             0.00             0.00              0.00           0.00           0.00            0.00
                           Payments (to Govt.)                  0.00             0.00             0.00              0.00           0.00           0.00            0.00             0.00
                           Debit-adjustments (pmt)              0.00             0.00             0.00        (2,916.98)           0.00           0.00            0.00       (2,916.98)
                           Debit-adjustments (others)           0.00             0.00             0.00              0.00           0.00           0.00            0.00
                           Apportionment                                                                                                                                           0.00
                           Income Share on Corpus Fund                                                                                                                             0.00
                           Closing Bal. (31.03.2010)             0.00            0.00             0.00        (2,916.98)           0.00           0.00            0.00       (2,916.98)
                                                                                                                                                                                          Agriculture Insurance Company of India Limited
                                                                                                                                                                                                         A
     SL. STATE / UT GOVT. Particulars                        Corpus            A&O          Publicity          Premium         Premium               Bank               Claims                TOTAL
     NO.                                                       Fund         Expenses       Expenses             Subsidy         Subsidy            Service               Share
                                                                                                                 (NAIS)     (WBCIS & Ors)         Charges
                                                                                                                                                                                                         n
                                                                                                                                                                                                         n

     10   HYDERABAD        Opening Bal. (01.04.2009)            0.00       636,083.01    1,184,396.94    (38,761,440.66)             0.00    17,410,898.23        3,882,327.16        (15,647,735.32)
          Andhra Pradesh   Receipts (from Govt.)                0.00                             0.00     34,806,845.00              0.00    13,829,182.00    3,574,296,277.00      3,622,932,304.00
                           Credit-adjustments (rct)             0.00                             0.00               0.00             0.00             0.00        2,657,183.10           2,657,183.10
                                                                                                                                                                                                         u



                           Credit-adjustments (others)                     718,972.30                                                                                                      718,972.30
                           Payments (to Govt.)                  0.00             0.00            0.00               0.00              0.00            0.00                 0.00                  0.00
                                                                                                                                                                                                         a




                           Debit-adjustments (pmt)              0.00             0.00     (96,657.00)    (77,188,549.35)   (26,040,642.19) (17,384,359.84)   (3,574,296,278.01)   (3,695,006,486.39)
                           Debit-adjustments (others)                                                                                                              (718,972.30)          (718,972.30)
                                                                                                                                                                                                         l




                           Apportionment                                (2,105,154.19)           0.00               0.00              0.00            0.00                 0.00        (2,105,154.19)
                           Income Share on Corpus Fund          0.00              0.00           0.00               0.00              0.00            0.00                 0.00                  0.00
                           Closing Bal. (31.03.2010)            0.00      (750,098.88)   1,087,739.94    (81,143,145.01)   (26,040,642.19)   13,855,720.39         5,820,536.95       (87,169,888.80)
                                                                                                                                                                                                         R




     11   JAIPUR           Opening Bal. (01.04.2009)            0.00    (3,337,938.72)    (88,515.42)     (2,979,689.67) (14,877,494.83) (2,316,914.06)          18,210,231.31          (5,390,321.40)
                                                                                                                                                                                                         e




          Rajasthan        Receipts (from Govt.)                0.00     2,506,280.00     106,801.00        9,946,016.00 445,576,629.00 16,076,881.00           655,396,515.00      1,129,609,122.00
                           Credit-adjustments (rct)             0.00              0.00       1,074.00             761.18        30,873.83      68,049.31          1,267,570.36           1,368,328.68
                           Credit-adjustments (others)                     831,658.00                         778,992.00                    9,239,538.00                  0.00          10,850,188.00
                                                                                                                                                                                                         p




                           Payments (to Govt.)                  0.00              0.00           0.00               0.00             0.00           0.00                  0.00                    0.00
                           Debit-adjustments (pmt)              0.00              0.00    (18,933.00)     (8,024,305.83) (442,301,833.30) (5,023,647.06)      (656,672,286.94)    (1,112,041,006.13)
                                                                                                                                                                                                         o




                           Debit-adjustments (others)                                                                                                          (10,850,188.85)        (10,850,188.85)
                           Apportionment                                (1,208,480.25)          0.00                                  0.00                                             (1,208,480.25)
                                                                                                                                                                                                         r




                           Income Share on Corpus Fund          0.00                                                                  0.00                                                        0.00




77
                           Closing Bal. (31.03.2010)            0.00    (1,208,480.98)        426.58        (278,226.32)   (11,571,825.30)   18,043,907.19        7,351,840.88          12,337,642.05
                                                                                                                                                                                                         t




     12 (A)KOLKATA         Opening Bal. (01.04.2009)     3,763,582.76   (6,119,479.27)   (288,965.42)   (230,382,266.12)     (973,420.90)        36,411.41          (15,506.50)     (233,979,644.05)
          West Bengal      Receipts (from Govt.)                                  0.00           0.00    334,481,172.01      2,759,708.00    10,295,530.50    1,367,059,881.49      1,714,596,292.00
                                                                                                                                                                                                         2




                           Credit-adjustments (rct)       181,237.00              0.00           0.00                                0.00                                                  181,237.00
                           Credit-adjustments (others)                                                                                                                                           0.00
                           Payments (to Govt.)                  0.00             0.00            0.00               0.00              0.00            0.00                 0.00                  0.00
                                                                                                                                                                                                         0




                           Debit-adjustments (pmt)                               0.00    (468,273.00)   (230,102,814.27)    (2,671,805.23)    (737,129.56)   (1,367,059,881.49)   (1,601,039,903.55)
                           Debit-adjustments (others)                                                                                                                                            0.00
                                                                                                                                                                                                         0




                           Apportionment                                (1,108,026.14)          0.00                                  0.00                                             (1,108,026.14)
                           Income Share on Corpus Fund     351,589.74                                                                 0.00                                                 351,589.74
                                                                                                                                                                                                         9




                           Closing Bal. (31.03.2010)     4,296,409.50   (7,227,505.41)   (757,238.42)   (126,003,908.38)      (885,518.13)    9,594,812.35          (15,506.50)     (120,998,455.00)

     12 (B) Tripura        Opening Bal. (01.04.2009)      179,004.05          (263.29)   (190,397.69)        (22,883.00)             0.00           507.29                0.00            (34,032.64)
                           Receipts (from Govt.)                0.00              0.00           0.00          11,410.35             0.00         2,852.65                0.00             14,263.00
                           Credit-adjustments (rct)             0.00              0.00           0.00               0.00             0.00             0.00                0.00                   0.00
                                                                                                                                                                                                         - 10




                           Credit-adjustments (others)
                           Payments (to Govt.)                  0.00             0.00            0.00               0.00             0.00             0.00                0.00                  0.00
                           Debit-adjustments (pmt)              0.00             0.00     (10,687.50)        (81,666.91)             0.00       (2,852.65)                0.00           (95,207.06)
                           Debit-adjustments (others)
                           Apportionment                                    (2,172.05)          0.00                                 0.00                                                 (2,172.05)
                           Income Share on Corpus Fund     16,722.36                                                                 0.00                                                 16,722.36
                           Closing Bal. (31.03.2010)      195,726.42        (2,435.34)   (201,085.19)        (93,139.56)             0.00          507.29                 0.00          (100,426.39)
     SL. STATE / UT GOVT. Particulars                          Corpus            A&O          Publicity         Premium          Premium              Bank               Claims                TOTAL
     NO.                                                         Fund         Expenses       Expenses            Subsidy          Subsidy           Service               Share
                                                                                                                  (NAIS)      (WBCIS & Ors)        Charges


     12 (C) Sikkim         Opening Bal. (01.04.2009)        154,837.33        91,331.94      46,318.10          32,291.55              0.00         8,765.78                0.00           333,544.70
                           Receipts (from Govt.)                  0.00             0.00           0.00               0.00              0.00             0.00                0.00                 0.00
                           Credit-adjustments (rct)               0.00             0.00           0.00               0.00              0.00             0.00                0.00                 0.00
                           Credit-adjustments (others)
                           Payments (to Govt.)                     0.00            0.00            0.00               0.00             0.00             0.00                0.00                  0.00
                           Debit-adjustments (pmt)                 0.00            0.00      (8,550.00)         (3,767.31)             0.00             0.00                0.00           (12,317.31)
                           Debit-adjustments (others)
                           Apportionment                                       (102.59)           0.00                                 0.00                                                  (102.59)
                           Income Share on Corpus Fund       14,464.73                                                                 0.00                                                 14,464.73
                           Closing Bal. (31.03.2010)        169,302.06        91,229.35      37,768.10          28,524.24              0.00         8,765.78                0.00           335,589.54

     13   LUCKNOW          Opening Bal. (01.04.2009)               0.00   (1,737,268.40)        805.00     (10,652,543.97)             0.00 (1,157,582.07)          4,609,074.06        (8,937,515.38)
          Uttar Pradesh    Receipts (from Govt.)                   0.00    1,462,622.60     328,946.50      38,165,128.72              0.00 14,334,493.17          70,708,809.34      125,000,000.33
                           Credit-adjustments (rct)                0.00             0.00          0.00                0.00             0.00           0.00            955,986.93           955,986.93
                           Credit-adjustments (others)                                                                                                                                            0.00
                           Payments (to Govt.)                     0.00            0.00    (388,336.48)               0.00             0.00 (2,532,266.16)       (38,308,335.48)      (41,228,938.12)
                           Debit-adjustments (pmt)                 0.00            0.00     (14,944.00)    (29,408,470.57)             0.00                                           (29,423,414.57)
                           Debit-adjustments (others)                                       (41,215.98)                                                                                    (41,215.98)
                           Apportionment                           0.00   (1,278,670.24)           0.00               0.00             0.00             0.00                0.00       (1,278,670.24)
                           Income Share on Corpus Fund             0.00             0.00           0.00               0.00             0.00             0.00                0.00                  0.00
                           Closing Bal. (31.03.2010)               0.00   (1,553,316.04)   (114,744.96)     (1,895,885.82)             0.00    10,644,644.94       37,965,534.85        45,046,232.97




78
     14 (A) MUMBAI         Opening Bal. (01.04.2009)     277,736,512.74   (1,553,955.47)   (299,592.95)    (42,421,451.28)             0.39    14,192,910.38        1,823,149.97       249,477,573.79
            Maharashtra    Receipts (from Govt.)                   0.00    1,553,955.52            0.00     76,931,626.00              0.00    12,779,825.53    2,063,490,865.95     2,154,756,273.00
                           Credit-adjustments (rct)                0.00             0.00           0.00               0.00             0.00        33,124.66          251,485.46           284,610.12
                           Credit-adjustments (others)
                           Payments (to Govt.)                     0.00            0.00            0.00               0.00              0.00           0.00                  0.00                 0.00
                           Debit-adjustments (pmt)                 0.00            0.00    (396,241.81)   (142,990,143.10)   (69,463,306.92) (9,260,616.50)    (2,063,550,373.62)   (2,285,660,681.95)
                           Debit-adjustments (others)
                           Apportionment                                  (1,747,099.53)          0.00                                  0.00                                            (1,747,099.53)
                           Income Share on Corpus Fund    25,945,838.01                                                                 0.00                                            25,945,838.01
                           Closing Bal. (31.03.2010)     303,682,350.75   (1,747,099.48)   (695,834.76)   (108,479,968.38)   (69,463,306.53)   17,745,244.07        2,015,127.76       143,056,513.43

     14 (B) Goa            Opening Bal. (01.04.2009)        477,202.84        98,428.38      25,778.97         134,139.50              0.00        45,090.17          432,931.68         1,213,571.53
                           Receipts (from Govt.)                  0.00             0.00           0.00               0.00              0.00             0.00                0.00                 0.00
                           Credit-adjustments (rct)               0.00             0.00           0.00               0.00              0.00             0.00                0.00                 0.00
                           Credit-adjustments (others)
                           Payments (to Govt.)                     0.00            0.00           0.00                0.00             0.00             0.00                0.00                  0.00
                           Debit-adjustments (pmt)                 0.00            0.00           0.00          (1,373.48)             0.00         (239.22)                0.00            (1,612.70)
                           Debit-adjustments (others)
                           Apportionment                                         (15.51)          0.00                                 0.00                                                    (15.51)
                           Income Share on Corpus Fund       44,579.76                                                                 0.00                                                 44,579.76
                           Closing Bal. (31.03.2010)        521,782.60        98,412.87      25,778.97         132,766.02              0.00        44,850.95          432,931.68         1,256,523.08
                                                                                                                                                                                                (0.23)
                                                                                                                                                                                                         Agriculture Insurance Company of India Limited
                                                                                                                                                                                                                 A
     SL. STATE / UT GOVT. Particulars                            Corpus             A&O            Publicity           Premium          Premium                Bank               Claims              TOTAL
     NO.                                                           Fund          Expenses         Expenses              Subsidy          Subsidy             Service               Share
                                                                                                                         (NAIS)      (WBCIS & Ors)          Charges
                                                                                                                                                                                                                 n
     15   PATNA            Opening Bal. (01.04.2009)       52,712,281.55     (5,155,865.63)    (901,866.01)       (12,786,742.48)   (90,889,897.23)     3,924,353.23         30,227,446.55     (22,870,290.03)
          Bihar            Receipts (from Govt.)                    0.00               0.00            0.00        18,294,801.48    483,402,578.35              0.00       204,496,587.70      706,193,967.53
                                                                                                                                                                                                                 n

                           Credit-adjustments (rct)                 0.00               0.00            0.00                           1,806,076.04              0.00          1,462,940.98        3,269,017.02
                           Credit-adjustments (others)                                                                                                                        9,350,820.48        9,350,820.48
                                                                                                                                                                                                                 u


                           Payments (to Govt.)                       0.00                                                                    0.00                                     0.00                0.00
                           Debit-adjustments (pmt)        (46,687,585.10)             0.00     (327,156.59)      (33,958,120.82) (679,994,101.28) (3,924,353.23)         (228,061,996.53)    (992,953,313.55)
                           Debit-adjustments (others)                                                                                                                       (1,462,940.98)      (1,462,940.98)
                                                                                                                                                                                                                 a




                           Apportionment                                      (829,631.54)             0.00                                   0.00                                                (829,631.54)
                           Income Share on Corpus Fund      4,924,323.07                                                                      0.00                                                4,924,323.07
                                                                                                                                                                                                                 l




                           Closing Bal. (31.03.2010)       10,949,019.52     (5,985,497.17)   (1,229,022.60)      (28,450,061.82) (285,675,344.12)              0.00       16,012,858.20     (294,378,047.99)

     16   RAIPUR           Opening Bal. (01.04.2009)       19,820,540.22      (677,182.44)     (470,178.34)           (80,842.26)      (217,564.07)       5,497.34                  (0.00)      18,380,270.45
          Chhattisgarh     Receipts (from Govt.)           11,717,565.00              0.00             0.00                  0.00              0.00 3,025,670.44           219,012,742.56      233,755,978.00
                                                                                                                                                                                                                 R




                           Credit-adjustments (rct)                 0.00              0.00             0.00             17,592.19              0.00           0.00                    0.00          17,592.19
                           Credit-adjustments (others)                                0.00             0.00                  0.00        217,564.07           0.00                    0.00         217,564.07
                           Payments (to Govt.)                       0.00             0.00             0.00                  0.00              0.00           0.00                    0.00               0.00
                                                                                                                                                                                                                 e




                           Debit-adjustments (pmt)         (2,864,892.00)             0.00      (12,825.00)        (6,183,241.77)              0.00 (3,031,167.78)       (219,012,742.56)    (231,104,869.11)
                           Debit-adjustments (others)        (217,564.07)             0.00             0.00                                    0.00           0.00                               (217,564.07)
                           Apportionment                                      (427,813.70)             0.00                                    0.00                                              (427,813.70)
                                                                                                                                                                                                                 p




                           Income Share on Corpus Fund      1,851,612.96                                                                       0.00                                              1,851,612.96
                           Closing Bal. (31.03.2010)       30,307,262.11     (1,104,996.14)    (483,003.34)        (6,246,491.84)              0.00           0.00                   0.00       22,472,770.78
                                                                                                                                               0.00
                                                                                                                                                                                                                 o




     17   RANCHI           Opening Bal. (01.04.2009)       31,731,548.42      (302,741.56)            (0.01)       (1,903,620.97)    (1,312,240.14)           0.00                  0.00         28,212,945.74
          Jharkhand        Receipts (from Govt.)                    0.00      1,000,000.00       500,000.00         5,000,000.00      1,151,823.00            0.00        185,600,000.00       193,251,823.00
                                                                                                                                                                                                                 r




                           Credit-adjustments (rct)                                                                                                                                                       0.00
                           Credit-adjustments (others)                                                                 608,821.42                         784,225.74                              1,393,047.16




79
                                                                                                                                                                                                                 t




                           Payments (to Govt.)                      0.00              0.00             0.00                  0.00              0.00                                  0.00                 0.00
                           Debit-adjustments (pmt)                  0.00              0.00      (42,723.00)        (6,265,977.33)    (4,599,953.68)             0.00     (106,282,901.90)    (117,191,555.91)
                           Debit-adjustments (others)                         (931,686.04)     (457,277.00)                                                                                     (1,388,963.04)
                           Apportionment                                      (415,923.85)             0.00                                    0.00                                               (415,923.85)
                                                                                                                                                                                                                 2




                           Income Share on Corpus Fund      2,964,326.18                                                                       0.00                                               2,964,326.18
                           Closing Bal. (31.03.2010)       34,695,874.60      (650,351.45)            (0.01)       (2,560,776.88)    (4,760,370.82)       784,225.74       79,317,098.10       106,825,699.28
                                                                                                                                                                                                                 0




     18   THIRU'PURAM      Opening Bal. (01.04.2009)       14,110,099.64      3,809,207.04       996,253.25          (470,342.43)    (1,293,310.50)       262,437.19                0.00        17,414,344.19
          Kerala           Receipts (from Govt.)                    0.00              0.00             0.00           228,558.39      4,793,312.00         61,677.07        7,500,000.00       12,583,547.46
                                                                                                                                                                                                                 0




                           Credit-adjustments (rct)                 0.00              0.00             0.00                  0.00            (1.50)             0.00                                    (1.50)
                           Credit-adjustments (others)                                                                                                                                                    0.00
                           Payments (to Govt.)                      0.00              0.00              0.00                0.00               0.00     (262,437.20)          (78,845.23)        (341,282.43)
                                                                                                                                                                                                                 9




                           Debit-adjustments (pmt)                  0.00              0.00              0.00        (726,855.68)     (7,307,247.25)                                  0.00      (8,034,102.93)
                           Debit-adjustments (others)                                             (6,000.00)                                                                                        (6,000.00)
                           Apportionment                                      (173,904.97)                                                                                                       (173,904.97)
                           Income Share on Corpus Fund      1,318,149.91              0.00             0.00                  0.00              0.00             0.00                 0.00        1,318,149.91
                           Closing Bal. (31.03.2010)       15,428,249.55      3,635,302.07       990,253.25          (968,639.72)    (3,807,247.25)        61,677.06         7,421,154.77       22,760,749.73
                           Others                                                                                                                                                             307,556,481.25
                                                                                                                                                                                                                 - 10




          GRAND TOTAL      Opening Bal. (01.04.2009)     1,030,560,650.09   (45,681,692.88)    14,800,915.46     (601,485,545.63) 661,068,435.45         36,627,905.72     286,553,278.12    1,382,443,946.33
                           Receipts (from Govt.)            11,717,565.00      9,095,119.07       935,747.50       794,544,706.27 2,278,084,648.52    100,838,985.28 29,428,058,631.85 32,623,275,403.49
                           Credit-adjustments (rct)         11,507,042.56              0.00         1,074.00             18,353.37    1,862,339.95          334,891.85      12,533,118.75       26,256,820.48
                           Credit-adjustments (others)               0.00     17,841,870.62             0.00       376,551,942.91       217,564.07      56,835,612.54    (423,467,257.78)       27,979,732.36
                           Payments (to Govt.)                       0.00              0.00     (388,336.48)        (6,600,957.81) (65,278,461.29)      (2,794,703.36)   (580,483,762.95)    (655,546,221.89)
                           Debit-adjustments (pmt)        (54,537,471.85)              0.00   (4,982,422.20)   (1,307,527,293.38)(3,174,437,127.14)   (90,949,252.71) (28,465,444,716.50) (33,097,878,283.78)
                           Debit-adjustments (others)     (53,189,794.30)      (931,686.04)     (504,492.98)          (106,398.39)      (23,045.35)        (90,908.14)    (13,120,865.14)     (67,967,190.34)
                           Apportionment                             0.00   (32,582,480.63)             0.00                  0.00             0.00               0.00               0.00     (32,582,480.63)
                           Income Share on Corpus Fund      96,291,784.33              0.00             0.00                  0.00             0.00               0.00               0.00       96,291,784.33
                           Closing Bal. (31.03.2010)     1,042,349,775.83   (52,258,869.86)     9,862,485.30     (744,605,192.66) (298,505,645.80)     100,802,531.18      244,628,426.35      609,829,991.60
                    Agriculture Insurance Company of India Limited


                                            Annexure - 5

         SUMMARY OF FINANCIAL STATEMENTS
        FOR THE YEAR ENDED 31ST MARCH, 2010
                                                                                            Rs. in '000'
Sl.   Particulars                       2009-10          2008-09     2007-08     2006-07      2005-06
No.
      OPERATING RESULTS
1     Gross Premium Written            15203969           8334426     8351084     5646685     5558331
2     Net Premium Income Earned        10225168           7426091     6361425     5587550     5509215
3     Income from Investments (Net)     1095853           1028616      960699      645434      454170
4     Profit on Exchange Fluctuation           0                0           0           0           0
5     Total Income                     11321021           8454707     7322124     6232984     5963385
6     Commissions                         442967            89428      219369          33        2397
7     Brokerage                                0                0           0           0           0
8     Operating Expenses                (202399)         (158839)    (141240)    (102276)    (121741)
9     Claims Incurred (Net)          (11891903)         (5296233)   (5295375)   (5507534)   (5187336)
10    Operating Profit/Loss             (330313)          3089063     2104878      623208      656705

      NON-OPERATING RESULTS

11    Total Income under                694487            470369      388728      229043       170436
      Shareholder's account (Net)
12    Profit before Tax                 364174            3559431    2493606       852251       827141
13    Provision for Tax & Deferred      (30150)         (1233348)    (880543)    (362477)     (309074)
      Tax Liability
      Adjustment for Interest                 0                0           0           0              0
      on Corpus Fund
14    Profit after Tax                  334024           2326083     1613063      489774       518067
      MISCELLANEOUS
15    POLICYHOLDERS' ACCOUNT
      Total Funds                     18924592          11949633    11190614     9461699      7844358
      Total Investments               16868589          11621770    10330848     8665215      7968156
      Yield on Investments                 9.13              9.32       10.33        8.43         6.46
16    SHAREHOLDERS' ACCOUNT
      Total Funds                      7657770           7323746     5231653     3853992     3355164
      Total Investments                6825815           7122803     4829709     3529974     3408115
      Yield on Investments                 9.13              9.32       10.33        8.43        6.46
17    Paid up Equity Captial           2000000           2000000     2000000     2000000     2000000
18    Net Worth                        7657770           7323746     5231653     3853992     3355164
19    Total Assets                    28649553          21638226    18125516    16042201    15744140
20    Yield on Total Investments           9.13              9.32       10.33        8.43        6.46
21    Earnings per Share (Rs.)             1.67             11.63        8.07        2.45        2.59
22    Book Value per share (Rs.)          38.29             36.62       26.16       19.27       16.78
23    Total Dividend                        NIL           200000      200000          NIL         NIL
24    Dividend per Share (Re.)              NIL                 1           1         NIL         NIL




                                                   80
A    n   n     u    a     l     R    e     p     o    r     t    2    0    0    9    - 10


                                                Annexure - 6

                    ACCOUNTING RATIOS FOR THE
                   YEAR ENDED 31ST MARCH, 2010
Sl. Particulars                                                                     2009-10         2008-09
No.                                                                         (in percentage) (in percentage)
1    Gross Premium Growth Rate                                                      182.42%        99.80%
     [Gross premium for the current year divided by
     Gross Premium for the previous year]

2    Gross Premium to Shareholders' Funds                                           198.54%       110.28%
     [Gross Premium for the current year divided by
     Paid up Capital plus free Reserves]

3    Growth Rate of Shareholders' Funds                                             104.56%       144.46%
     [Shareholders' Funds at the current Balance Sheet date divided
     by Shareholders' Funds as at the previous Balance Sheet date]

4    Net Retention Ratio                                                            83.43%         93.17%
     [Net Premium divided by Gross Premium]

5    Net Commission Ratio                                                            -3.49%         -1.15%
     [Commission net of Reinsurance divided by Net Premium]

6    Expenses of Management to Gross Premium Ratio                                   1.33%           1.91%
     [Expenses of Management (net of Subsidy) divided by the
     Total Gross Direct Premium]

7    Combined Ratio                                                                 93.57%         70.65%
     [Claims Incurred plus Expenses divided by Gross Premium]

8    Technical Reserves to Net Premium Ratio                                        149.19%       153.89%
     [Reserve for Unexpired Risks plus Premium Deficiency Reserve
     plus Reserve for Outstanding Claims divided by Net Premium]

9    Underwriting Balance Ratio                                                      -2.60%        39.78%
     [Underwriting profit divided by net premium for
     the respective class of business]

10   Operating Profit Ratio                                                           2.79%        46.14%
     [Underwriting Profit plus Investment income divided by Net Premium]

11   Liquid Assets to Liabilities Ratio                                             49.31%         87.69%
     [Liquid Assets of the insurer divided by the Policyholders' Liabilities]

12   Net Earnings Ratio                                                              2.63%         29.95%
     [Profit after Tax divided by Net Premium]

13   Return on Net Worth                                                             4.36%         31.76%
     [Profit after Tax divided by Net Worth]
14   Reinsurance Ratio                                                              16.57%           6.83%
     [Risk Reinsured divided by Gross Premium]




                                                       81
                   Agriculture Insurance Company of India Limited


                                                                                             Annuexure - 4
                              CASH FLOW STATEMENT
                  FOR THE YEAR ENDED 31ST MARCH, 2010
                                      (As per Direct Method)
Sl. Particulars                                                Current Year               Previous Year
No.                                                          01.04.09-31.03.10          01.04.08-31.03.09
                                                                  (Rs. ‘000’)                (Rs. ‘000’)
A)     CASH FLOW FROM OPERATING ACTIVITIES
1      Cash receipts from Premium income                               15174371                      8384888
       Less:
2      Cash paid for Claims payment                     6887107                        4417453
3      Cash paid for Reinsurance                        2075924                         479738
       Premium (less Commission)
4      Cash paid for expenses                             157900        9120931         178567     5075758
       Cash generated from Operations                                   6053439                    3309130
5      Miscellaneous receipts                                              48508                      3232
6      Income Tax paid/refunds                                          (602395)                 (1561035)
7      Cash Flow before extraordinary items                             5499552                    1751327
8      Extraordinary items                                                233990                         0
       Net Cash from Operating Activities (A)                           5265562                    1751327
B)     CASH FLOW FROM INVESTING ACTIVITIES
9      Purchase of Fixed Assets                                         (251678)                     (6401)
10     Proceeds from sale of Fixed Assets                                       0                         0
11     Investments made                                                (3979116)                 (3728046)
12     Interest Income                                                   1928419                   1429869
13     Expenses incurred                                                   (2387)                   (10495)
14     Funds Advanced                                                  (1950983)                    (25916)
       Net Cash used in Investing Activities (B)                       (4255747)                 (2340989)
C)     CASH FLOW FROM FINANCING ACTIVITIES
15     Issue of Share Capital                                                   0                            0
16     Increase in Borrowings                                                   0                            0
17     Increase (Decrease) in Loans given                                   (443)                        (443)
18     Increase in Liabilities                                          (976209)                      569563
       Net Cash from Financing Activities(C)                            (976652)                      569120
       Net increase in Cash & Cash equivalents:                            33164                      (20542)
19     Cash & Cash equivalents at the end of the period                    98529                        65365
20     Cash & Cash equivalents at the beginning of the period              65365                        85907
       Net increase in Cash & Cash equivalents                             33164                      (20542)


    (Kanika Sharma Shandil)                  (M.K.Poddar)                            (R.P. Samal)
       Company Secretary                   Dy. Gen. Manager                         General Manager

         (K.N.Bhandari)                      (S.K.Chanana)                         (M.Parshad)
             Director                            Director                 Chairman-cum-Managing Director

     As per our separate Report of even date attached
     For M/s Gupta & Gupta                                                   For M/s Kishore & Kishore
      Chartered Accountants                                                    Chartered Accountants

          (S.B.Gupta)                                                                (S.C.Kishore)
             Partner                                                                    Partner
          M.No. 006099                                                               M.No. 003390

Place : New Delhi
Date : 09.09.2010



                                                        82
A    n      n   u    a    l     R     e    p    o    r     t   2    0    0     9       - 10


ADDENDUM ATTACHED TO & FORMING PART OF ANNUAL ACCOUNTS FOR 2009-10
                                          Schedule 3 : COMMISSION
Break-up of the expenses (Gross) incurred to procure business:
 Particulars                              Current Year                     Previous Year
                                          01.04.09-31.03.10                01.04.08-31.03.09
                                          (Rs. '000)                       (Rs.'000)

 Agents                                      5337                              677
 Brokers                                     9818                             7859
 Corporate Agency                          41411                             7454
 Referral                                       0                                  0
 Others                                        209                            722
 Total                                     56775                             16712

Schedule 12 : ADVANCES AND OTHER ASSETS &
Schedule 13 : CURRENT LIABILITIES
An amount of Rs.22674 thousand due from entities carrying on insurance business has been netted against the
balance due to other insurance companies. Accordingly, the amount in respect of Item Number B-5 of Schedule
12 be taken and read as Rs. Rs.22674 thousand and similarly, the amount in respect of Item Number 2 of
Schedule 13 be taken and read as Rs.57996 thousand. (Previous year: Item Number B 5 of Schedule 12
Rs.616635 thousand and item no.2 of Schedule 13 Rs.6710 thousand)
Schedule 13 : CURRENT LIABILITIES
Schedule 14 : PROVISIONS
The Provision of Rs.29311 thousand (previous year Rs.11822 thousand) made for arrears on account of wage
revision has been included under 'Provision for Outstanding Expenses' (Item Number 10 b of Schedule 13)
instead of being shown as 'Provision for arrears for wage revision' (as a line Item as Item No.5 vi of Schedule
14). Accordingly, the amount in respect of Item Number 10 b of Schedule 13 be taken and read as Rs.81306
thousand (previous year Rs.21392 thousand) and similarly, the amount under Item Number 5 vi of Schedule 14
be taken and read as Rs.29311 thousand (previous year Rs.11822 thousand)
RE-GROUPING OF PREVIOUS YEAR'S FIGURES
1.       Previous year's figure of Rs.8067004 thousand in respect of Claim Outstanding under Item Number 8 of
         Schedule 13 has been re-grouped and shown net of Reinsurers' share in respect of outstanding claims
         of Rs.490015 thousand and accordingly, the said amount of Rs.8067004 thousand stands re-grouped
         as Rs.7576989 thousand. Similarly, due to the corresponding impact, the amount of Rs.609925 thousand
         in respect of 'amount due from other entities carrying on insurance business' under Item Number B 5 of
         Schedule 12 stands re-grouped as Rs.119910 thousand.
2.       Previous year's figures of Rs.614 thousand in respect of Sundry Debtors under Item Number 8 e (i) and
         Rs.12503 thousand in respect of Premium Defalcation under Item Number 8 e (ii) of Schedule 12 have
         been re-grouped as Rs.13117 thousand under Item Number B 8 (i) of Schedule 12.
3.       Previous year's figures of Rs.1680382 thousand in respect of amount due to Government (Central/
         States/UTs/Coffee Board) under Item Number 10 d of Schedule 13 shown on net basis has been re-
         grouped as amount due to and due from Government (Central/States/UTs/Coffee Board) and shown
         separately as Rs.2156501 thousand under Item Number 10 d of Schedule 13 and Rs.476119 thousand
         under Item Number B 8 (f) of Schedule 12 respectively.




                                                      83

				
DOCUMENT INFO