Document Detail

Title:
Reference No.: 2246_GI_2000_ENG
Date: 14/08/2000
IRDA (Investment) Regulations, 2000
To be published in the Gazette of India Extraordinary Part III Section 4.
 
Insurance Regulatory and Development Authority (Investment) Regulations, 2000
 
NOTIFICATION
 
New Delhi, the 14th August, 2000
 
F.No. IRDA/ Reg./ 8/ 2000.-
 
In exercise of the powers conferred by Sections 27A, 27B, 27D and 114A of the Insurance Act, 1938 (4 of 1938), the Authority in consultation with the Insurance Advisory Committee, hereby makes the following regulations, namely:
 
1.                  Short title and commencement
 
(1)   These regulations may be called the Insurance Regulatory and Development Authority (Investment) Regulations, 2000.
 
(2)   They shall come into force on the date of their publication in the Official Gazette.
 
2.         Definitions – In these regulations, unless the context otherwise requires, -
 
a)         ‘Act’ means the Insurance Act, 1938 (4 of 1938).
 
b)        ‘Accretion of funds’ means investment income, gains on sale/ redemption of existing investment and operating surplus.
 
c)         ‘Authority’ means the Insurance Regulatory and Development Authority established under sub-section (1) of Section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).
 
d)        ‘Principal Officer’ means any person connected with the management of an insurer or any other person upon whom the Authority has served notice of its intention of treating him as the principal officer thereof.
 
e)         All words and expressions used herein and not defined but defined in the Insurance Act, 1938 (4 of 1938), or in the Insurance Regulatory and Development Act, 1999 (41 of 1999), or in any Rules or Regulations made thereunder, shall have the meanings respectively assigned to them in those Acts or Rules or Regulations.
 
 
 
 
 
 
 
 
 
 
 
3.            Regulation of Investments
 
(1) Life Business: Without prejudice to Section 27 or Section 27A of the Act, - Every insurer carrying on the business of life-insurance shall invest and at all times keep invested his controlled fund in the following manner:
 
S.No
Type of Investment
Percentage
i)
Government Securities
25%,
ii)
Government Securities or other approved securities (including (I) above)
Not less than 50%,
iii)
Approved Investments as specified in Schedule I
a)       
Infrastructure and Social Sector
Explanation: For the purpose of this requirement, Infrastructure and Social Sector shall have the meaning as given in regulation 2(h) of Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000 and as defined in the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural and Social Sector) Regulations, 2000 respectively
Not less than 15%
b)       
Others to be governed by Exposure/ Prudential Norms specified in Regulation 5
Not exceeding 20%
iv)
Other than in Approved Investments to be governed by Exposure/ Prudential Norms specified in Regulation 5
Not exceeding 15%
 
(2) Pension and General Annuity Business: Every insurer shall invest and at all times keep invested assets of Pension Business, General Annuity Business and Group Business in the following manner:-
 
S.No
Type of Investment
Percentage
i)
Government securities, being not less than
20%
Ii)
Government Securities or other approved securities inclusive of (i) above, being not less than
40%
iii)
Balance to be invested in Approved Investments as specified in Schedule I and to be governed by Exposure/ Prudential Norms specified in Regulation 5
Not exceeding 60%
 
Note: For the purposes of this sub-regulation:
a)      No unapproved investments shall be made.
b)      All investments shall be made in graded securities and the grading shall not be less than of ‘very strong’ rating by a reputed and independent rating agency (e.g. AA of Standard and Poor).
c)      Every insurer shall invest assets in securities which are actively traded in any Stock Exchange in India and which are attributable to segregated funds, in respect of linked business. 
 
 
 
 
 
 
 
 
 
4.      Regulation of Investments
 
(1) General Business: Without prejudice to Section 27 or Section 27B of the Act, - Every insurer carrying on the business of general insurance shall invest and at all times keep invested his total assets in the manner set out below:
 
S.No
Type of Investment
Percentage
i)
Central Government Securities being not less than
20%
ii)
State Government securities and other Guaranteed securities including (i) above being not less than
30%
iii)
Housing and Loans to State Government for Housing and Fire Fighting equipment, being not less than
5%
iv)
Investments in Approved Investments as specified in Schedule II
 
a)
Infrastructure and Social Sector
Explanation: For the purpose of this requirement, Infrastructure and Social Sector shall have the meaning as given in regulation 2(h) of Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000 and as defined in the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural and Social Sector) Regulations, 2000 respectively
Not less than 10%
 
b)
Others to be governed by Exposure/ Prudential Norms specified in Regulation 5
Not exceeding 30%
 
v)
Other than in Approved Investments to be governed by Exposure/ Prudential Norms specified in Regulation 5
Not exceeding 25%
 
 
Note:
All investments shall be made in graded securities and the grading shall not be less than of ‘very strong’ rating by a reputed and independent rating agency (e.g. AA of Standard and Poor).
 
(2) Reinsurance Business: Every reinsurer carrying on reinsurance business in India shall invest and at all times keep invested his total assets in the same manner as set out in sub-regulation (1), until such time separate regulations in this behalf are made by the Authority.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.      EXPOSURE/ PRUDENTIAL NORMS
 
Without prejudice to anything contained in Sections 27A and 27B of the Act, every insurer shall limit his investments based on the following exposure norms:
 
A)    Exposure Norms
 
Type of Investment
Limit for Investee Company
Limit for the entire group to which the investee company belongs
Limit for the industry sector to which the investee company belongs
(a)    Equity/ Preference Shares/ Convertible portion of Debentures at face value.
(b)   Debentures - (face value) including private placed NCD and Non convertible portion of Convertible Debentures.
(c)    Short/ Medium/ Long Term Loans and any other direct financial assistance.
(i) As on any date
Not exceeding 20% of the total capital employed*.
(i) As on any date
Not exceeding 15% of the total capital employed* of the group companies.
Not exceeding 15% of the total capital employed* in all such companies.
(ii) During the year
Not exceeding 5% of estimated annual accretion of funds.
(ii) During the year
Not exceeding 10% of estimated annual accretion of funds.
 
* Total capital employed means total of equity shares, preference shares, debentures, long/ medium/ short term loans (excluding public deposits), free reserves but excluding revaluation reserves, of the investee company as shown in its last audited balance sheet.
 
B) Exposure Norms for Investment in Public Financial Institutions
 
Equity Share and Preference Shares (at their face value).
Not exceeding 15% in general of the paid up equity/ preference capital of the institution or the existing holding % level, if higher.
Investment in Equity Capital, Bonds, Debentures, Term Loans.
Not exceeding 10% of the capital employed by an institution as per the last audited Balance Sheet.
Total Investment vis-à-vis Net Worth of the Company.
Not exceeding 60% of Net Worth of the institution.
Total Investment in a Financial Year.
7.5% of annual accretions.
Total Investments in all the Financial Institutions.
Annual aggregate financial assistance to all Development Financial Institutions put together in a single year shall not exceed 20% of the estimated annual accretions for the year.
 
C) Prudential Norms
 
The prudential norms for various instruments shall be as under:
 
i)       Debentures:
 
Norms for Fully Convertible Debentures and Partly Convertible Debentures:
 
Investment decisions are related to attractiveness of equity shares to be received as a result of conversion. Due consideration is also given to the factors, viz
a)      rate of interest at the time of subscription to said debentures,
b)      appreciation and
c)      dividend income likely to be received from the equity shares.
 
Similar considerations also apply for Non-Convertible (NC) Debentures with detachable warrants attached to it.
 
Norms for Non-Convertible Debentures and Non-Convertible Debentures with warrants attached:
1.
Eligibility Amount
 
a)
Working Capital Debentures
20% of the current assets, loans and advance minus outstanding amount of existing working capital NC Debentures.
b)
Project Finance
As appraised by the Investment Committee
c)
Normal Capital Expenditure
As assessed by the Investment Committee
 
Asset Cover (as specified in Schedule III):
 
First pari passu charge on fixed assets of the company offered as security with a minimum of 1.25 times including proposed borrowings (excluding revaluation of assets).
 
Debt Equity Ratio (as specified in Schedule III):
 
Not to exceed 2:1 including the proposed NC Debenture issue. However, in case of capital intensive project debentures, higher ratio upto 4:1 may be considered.
 
Interest Cover (as specified in Schedule III):
 
Not less than 2 times for the latest year or on the basis of the average of the immediately preceding three years after including the interest on the proposed debentures at the applicable rate.
 
Dividend Pay-out:
 
Minimum dividend of 10% in each of the two years out of the immediately preceding three years including the latest year.
 
 
 
 
 
 
ii)           Term Deposits and Loans with Non Banking Companies:
 
The insurer need to place the deposits with a view to cater to working capital needs of the corporate sector. The placement of the deposit are to be decided after evaluating financial and non-financial aspects of the performance parameters of the companies. The analysis need to include study of financial position, track record and other features such as quality of management, future prospects and market potential for the company~s products. Credit rating of borrower should be uniformly maintained at a position which is indicative of a very strong financial position being not less than AA of Standard and Poor or equivalent rating of any other reputed and independent rating agency.
 
The maximum amount of Short Term Deposit that may be placed with any company is restricted to Rs 2 crores or 10% of net worth whichever is less.
 
The various norms/ parameters for the placement of term loans are as under:
 
Particulars
Limits
Unsecured borrowing as a % of net worth.
Not to exceed 25% of net worth including the proposed loan, subject to networth of the borrowing company being not less than Rs. 15 crores.
Interest Cover.
Atleast 2.5 times including interest on proposed loans.
Debt/ Equity Ratio.
Not to exceed 2:1.
Current Ratio.
Not less than 1.33:1.
Dividend Record.
Atleast 10% for the last 5 years or 15% and above for 3 out of 5 years.
Listing
Equity shares of the Company shall be listed on any recognised stock exchange and the price should continuously been quoting above par atleast for 12 months prior to the date of sanction of loan.
Collateral Security
Cheques shall be obtained for principal and interest amount. Personal guarantee of promoters and pledge of shares may be taken.
 
iii)                Infrastructure and Social Sector:
 
In the case of projects/ works in the infrastructure and social sector undertaken by a person other than a company, the norms indicated in the table above shall have to be met to the extent applicable.
 
iv)                Guidelines on subscription to Preference Shares:
 
a)      Companies whose preference shares are selected for investment should have sound financial position and steady income earning capacity.
b)      The dividend payable on the preference shares should be cumulative.
c)      The preference shares shall be redeemable.
d)      Preference capital after proposed issue shall not exceed 100% of equity capital.
e)      Dividend should have been paid on equity shares for two years out of immediately preceding three years.
f)        Preference dividend should have been paid for 3 years or 3 out of 4 or 5 years including latest 2 years if the preference shares are issued earlier.
g)      Non-dividend paying preference shares should not be considered for investment.
h)      Dividend cover on the basis of average profit of last 3 to5 years should be 3 times.
 
6.      Returns to be submitted by the Insurer:
 
Every insurer shall submit to the Authority the following returns within such time, at such intervals and verified / certified in such manner as indicated there against. These returns shall be in addition to those prescribed in Insurance Rules, 1939.
 
S.No
Form No as annexed to these regulations
Short description
Periodicity of returns
Time limit for submission
Verified/ Certified by
1
Form 1
Statement of investment and income on investment
Yearly
Within 30 days from the date of Board approval of audited accounts.
Principal Officer/ Chief (Investment)
2
Form 2
Statement of down graded investments.
Quarterly
Within 21 days of the end of each quarter.
Principal Officer/ Chief (Investment)
3
Form 3 A
Statement of Investment of Controlled Fund (Life) – Compliance Report
Quarterly
Within 21 days of the end of each quarter.
Principal Officer/ Chief (Investment)
4
Form 3 B
Statement of Investment of Total Assets (General) – Compliance Report
Quarterly
Within 21 days of the end of each quarter.
Principal Officer/ Chief (Investment)
5
Form 4
Prudential Investment Norms – Compliance Report
Yearly
Within 30 days from the date of Board approval of audited accounts.
Principal Officer/ Chief (Investment)
 
The Authority may, by any general or special order, modify or relax any requirement relating to the above.
 
7.      Power to Call for additional information
 
The Authority may, by general or special order, require from the insurers such other information in such manner, intervals and time limit as may be specified therein.
 
8.      Duty to Report extraordinary events affecting the investment portfolio
 
Every insurer shall report to the Authority forthwith, the effect or the probable effect of any event coming to his knowledge, which could have an adverse impact on the investment portfolio held by him.
 
9.      Constitution of Investment Committee
 
Every insurer shall constitute an Investment Committee which shall consist of a minimum of two non-executive directors of the Insurer, the Principal Officer, Chiefs of Finance and Investment divisions, and wherever appointed actuary is present, the Appointed Actuary. The decisions taken by the Investment Committee shall be properly recorded and be open to inspection by the officers of the Authority.
 
10. Miscellaneous
 
(1)    Valuation of Assets and Accounting of Investments shall be as per the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2000.
(2)    The Authority may, by any general or special order, modify or relax requirement relating to regulation 5.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SCHEDULE I
(See Regulation 3)
 
LIST OF APPROVED INVESTMENTS FOR LIFE BUSINESS
 
‘Approved Investments’ for the purposes of Section 27A of the Act shall be as follows:
 
a.       All approved investments specified in Section 27A of the Act except
i)        clause (b) of sub-section (1) of section 27A of the Act;
ii) first mortgages on immovable property situated in other country as stated in clause (m) of subsection (1) of section 27A of the Act
iii) immovable property situated in other country as stated in clause (n) of subsection (1) of section 27A of the Act
 
In addition the Authority under powers given vide clause (s) of sub-section(1) section 27A of the Act declares the following investments as approved investments:
 
b.      All secured loans, deposits, debentures, bonds, other debt instruments, shares and preference shares rated as ‘very strong’ or more by a reputed and independent rating agency (e.g. AA of Standard and Poor);
c.       Deposits with banks (e.g. in current account, call deposits, notice deposits, term deposits, certificates of deposits, etc) and with Primary Dealers recognised by RBI included for the time being in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);
d.      Commercial papers issued by a company having a ‘very strong’ or more rating by a reputed and independent rating agency (e.g. AA of Standard and Poor);
e.       Investments in Venture Capital Funds of such companies/ organisations which have a proven track record and have been rated ‘very strong’ or more by a reputed and independent rating agency (e.g. AA of Standard and Poor).
 
Explanation: For this purpose any investment in the shares or debentures or short or medium or long term loans or deposits with private limited companies shall not be treated as ‘approved investments’.
 
 
 
SCHEDULE II
(See Regulation 4)
                                                                                                               
LIST OF APPROVED INVESTMENTS FOR GENERAL BUSINESS
 
‘Approved Investments’ for the purpose of Section 27B of the Act shall be as follows:
 
a.       All approved investments specified in Section 27B of the Act except
i)        clause (b) of sub-section (1) of section 27A of the Act;
ii) immovable property situated in other country as stated in clause (n) of subsection (1) of section 27A of the Act
iii) first mortgages on immovable property situated in other country as stated in clause (i) of subsection (1) of section 27B of the Act
 
In addition the Authority under powers given vide clause (j) of sub-section(1) section 27B of the Act declares the following investments as approved investments:
 
b.      All secured loans, deposits, debentures, bonds, other debt instruments, shares and preference shares rated as ‘very strong’ or more by a reputed and independent rating agency (e.g. AA of Standard and Poor);
c.       Loans to State Government for Housing and Fire Fighting Equipment.
d.      Deposits with banks (e.g. in current account, call deposits, notice deposits, term deposits, certificates of deposits, etc) and with Primary Dealers recognised by RBI included for the time being in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);
e.       Commercial papers issued by a company having a ‘very strong’ or more rating by a reputed and independent rating agency;
f.        Treasury Bills issued by RBI, Inter Bank Repo of RBI and Bills Rediscounting.
g.       Investments in Venture Capital Funds of such companies/ organisations which have a proven track record and have been rated ‘very strong’ or more by a reputed and independent rating agency (e.g. AA of Standard and Poor).
 
Explanation: For this purpose any investment in the shares or debentures or short or medium or long term loans or deposits with private limited companies shall not be treated as ‘approved investments’.
 
 
SCHEDULE III
(See Regulation 5)
 
Asset Cover:
Asset Cover shows the relationship between Fixed Assets and secured loans. It is to be calculated by dividing Fixed Assets by Secured Loans. Details of working are as under:
 
FIXED ASSETS
 
Net Block of the Fixed Assets
 
Add: Capital Work in Progress
 
Less: Revaluation Reserves
 
Less: Goodwill
 
Less: Assets not available viz exclusively charged assets. Vehicles, leased assets, etc.
 
TOTAL (A)
 
SECURED LOANS
 
First Charge debentures
 
Secured Term Loans
 
Deferred Payment Guarantee (if assets are not exclusively charged)
 
Proposed Borrowings
 
TOTAL (B)
 
Asset Cover (A/B)
 
 
Debt Equity Ratio:
The relationship describing the lendor’s contribution against owner’s contribution shall be debt equity ratio. It shall be calculated by dividing long term debt by Networth. Details of working are as under:
 
First Charge Debentures (Gross Block less Depreciation)
 
Secured Term Loan
 
Deferred Payment Guarantee
 
Second Charge Debentures
 
Non-convertible Part of Existing convertible debentures
 
Non-convertible Part of proposed convertible debentures
 
Unsecured Term Loans
 
Proposed Borrowings
 
DEBT (A)
 
Equity Share Capital
 
Preference Share Capital
 
Free Reserves
 
Convertible part of Existing Convertible Debentures
 
Convertible part of Proposed Convertible Debentures
 
Total
 
Less: Miscellaneous Expenses
 
NET WORTH (B)
 
Debt Equity Ratio (A/B)
 
 
 
Interest Cover:
Interest Cover shows the number of times the interest charges are covered by funds that are ordinarily available for payment. It shall be calculated by dividing Profit before depreciation, Interest and Tax (PBDIT) by Interest Charges. Details of working are as under:
 
Profit before Tax
 
Add: Depreciation
 
Add: Financial Charges
 
Add: Non-Recurring Expenses
 
Less: Non-Recurring Income
 
PBDIT (A)
 
Existing Financial Charges
 
Add: Interest on proposed borrowings
 
FINANCIAL CHARGES (B)
 
Interest Cover (A/B)
 
 
 
 
 
 
 
 
 
Form: 1                                                                                                         
Company Name and Code:                                                                                                                                      
Statement Date: As at …………….                                                                                                                                
                                                                                                                                                    
STATEMENT OF INVESTMENT AND INCOME ON INVESTMENT                                                                                                                             
                                                                                                                                                    
Periodicity of Submission: Yearly                                                                                                                               
 
 
 
 
 
 
 
 
 
 
 
Current
Year
 
 
Previous
Year
 
Category Of Investment
Investment (Rs.)
Income on Investment(Rs.)
Gross Yield (%)
Net Yield (%)
Investment (Rs.)
Income on Investment(Rs.)
Gross Yield (%)
Net Yield (%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           CERTIFICATION                                                                                
Certified that the information given herein are correct and complete to the best of my knowledge and belief                                                                                                                                                      
and nothing has been concealed or suppressed.                                                                                                                                    
                                                                                                                                                   
Date: _______                                                        Signature: ______________________                                                
                                                                                             Full Name & Designation                                           
 
 
Form: 2                                                                              
Company Name and Code:                                                                                                                                      
Statement Date: As at …………….                                                                                                                                
                                                                                                                    
STATEMENT OF DOWN GRADED INVESTMENTS                                                                                                        
Periodicity of Submission: Quarterly                                                                                                                         
 
 
 
 
 
S.No.
Particulars of Investment
Original Investment Grade
Current Down Grade
Remarks
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                CERTIFICATION                                            
Certified that the information given herein are correct and complete to the best of my knowledge and belief                                                                           
and nothing has been concealed or suppressed.                                                                                                              
                                                                                                                    
Date: _______                                                              Signature: _______________________________                    
                                                                                                                     Full Name & Designation
 
Form: 3 A                                                                                                                                  
Company Name and Code:                                                                                                                                                   
Statement Date: As at …………….                                                                                                                                       
                                                                                                                                    
Statement of Investment of Controlled Funds - Compliance Report to be submitted Quarterly                                                                                                                             
Life Business                                                                                                                                                                     
 
 
INVESTMENT OF CONTROLLED FUND
 
 
S.No.
Type of Investment
Percentage
Amount Invested as per regulations
Actual %
Market Value or Realisable Value
i)
Government Securities
25%
 
 
 
ii)
Government Securities or other approved securities (including (I) above)
Not less than 50%
 
 
 
iii)
Approved Investments
 
 
 
 
a)
Infrastructure and Social Sector
Not less than 15%
 
 
 
b)
Others
Not exceeding 20%
 
 
 
iv)
Other than Approved Investments
Not exceeding 15%
 
 
 
 
Total Investments
100%
 
 
 
 
 
 
 
 
 
Statement of Investment of Assets - Compliance Report to be submitted Quarterly                                                                                                                                              
Pension Business, General Annuity Business and Group Business                                                                                              
 
 
INVESTMENT OF ASSETS
 
 
S.No.
Type of Investment
Percentage
Amount Invested as per regulations
Actual %
Market Value or Realisable Value
i)
Government Securities being not less than
20%
 
 
 
ii)
Government Securities or other approved securities (including (a) above) being not less than
40%
 
 
 
iii)
Balance Investments to be invested in Approved Investments not exceeding
60%
 
 
 
 
Total Investments
100%
 
 
 
 
 
 
 
 
 
                                                           CERTIFICATION                                                 
Certified that the information given herein are correct and complete to the best of my knowledge and belief                                                                                                                                                      
and nothing has been concealed or suppressed.                                                                                                                     
                                                                                                                                    
Date: _______                                                                                       Signature: ______________________________                                                                                              
                                                                                  Full Name & Designation                                               
 
 
Form: 3 B                                                                                                                       
Company Name and Code:                                                                                                                                   
Statement Date: As at …………….                                                                                                                       
                                                                                                                                                  
Statement of Investment of Total Assets - Compliance Report to be submitted Quarterly                                                                                                                            
General Business                                                                                                                                              
 
 
INVESTMENT OF TOTAL ASSETS
 
 
S.No.
Type of Investment
Percentage
Amount Invested as per regulations
Actual %
Market Value or Realisable Value
i)
Central Government Securities being not less than
20%
 
 
 
ii)
State Government Securities and other Guaranteed securities including a) above being not less than
30%
 
 
 
iii)
Housing and Loans to State Govt. for Housing and Fire Fighting Equipment being not less than
5%
 
 
 
iv)
Approved Investments
 
 
 
 
a)
Infrastructure and Social Sector
Not less than 10%
 
 
b)
Others
Not exceeding 30%
 
 
v)
Other Than Approved Investments
Not exceeding 25%
 
 
 
Total Investments
100%
 
 
 
 
 
 
 
 
 
                                                                                  CERTIFICATION                                                                
Certified that the information given herein are correct and complete to the best of my knowledge and belief                                                                                                                               
and nothing has been concealed or suppressed.                                                                                                    
                                                                                                                                                  
Date: _______                                                                               Signature: _________________________                               
                                                                                                    Full Name & Designation                                  
 
 
 
Form: 4                                                                                                     
Company Name and Code:                                                                                                           
Statement Date: As at …………….                                                                                               
                                                                                                                         
Exposure/ Prudential Norms - Compliance Report to be submitted Yearly                                                     
Exposure Norms                                                                                                                        
S.No.
 
Norms as per regulations
Whether Exposure Norms have been observed or not
Remarks
I
Limit for Investee Company
 
 
 
i)
As on date
Not exceeding 20% of the total capital employed
 
 
ii)
During the Year
Not exceeding 5% of estimated annual accretion of funds
 
 
II
Limit for the entire group to which the investee company belongs
 
 
 
i)
As on date
Not exceeding 15% of the total capital employed of the group companies
 
 
ii)
During the Year
Not exceeding 10% of estimated annual accretion of funds
 
 
III
Limit for the industry sector to which the investee company belongs
Not exceeding 15% of the total capital employed of the group companies
 
 
 
Norms for Investment in Public Financial Institutions
 
 
 
 
Equity Shares and preference shares (at their face value)
Not exceeding 15% in general of the paid up equity/ preference capital of the institution
 
 
 
Investment in Equity Capital, Bonds, Debentures, Term Loans
Not exceeding 10% of the capital employed by an institution as per the last Balance Sheet
 
 
 
Total Investment vis-à-vis Net worth of the Company
Not exceeding 60% of net worth of the Institution
 
 
 
Total Investment in a Financial Year
7.5% of annual accretions
 
 
 
Total Investment in all Financial Institutions
Annual aggregate financial asistance to all Development Financial Institutions put together in a single year shall not exceed 20% of the estimated annual accretions for the year
 
 
 
                                                                                                                         
Prudential Norms                                                                                                                      
S.No.
Instruments
Whether Prudential Norms have been observed while making investments
Remarks
i)
Debentures
 
 
a)
Norms for Fully Convertible Debentures and Partly
Convertible Debentures
 
 
b)
Norms for Non-Convertible Debentures and Non-
Convertible Debentures with warrants attached
 
 
ii)
Term Deposits and Loans with Non-Banking
Companies
 
 
iii)
Infrastructure and Social Sector
 
 
iv)
Guidelines on subscription to Preference Shares
 
 
 
           CERTIFICATION                                                            
Certified that the information given herein are correct and complete to the best of my knowledge and belief                                      
and nothing has been concealed or suppressed.                                                                                      
                                                                                                                         
Date: _______                                  Signature: ______________________                                     
                                                        Full Name & Designation                             
                                                                                                 N.RANGACHARY, Chairperson   
Advt./3/4/Exty./161/200
 
 
 

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