Journey to empowerment - Aditya Birla Capital to empowerment At BSLI, we believe that empowering our...

Birla Sun Life Insurance

1 | ANNUAL REPORT 2014-15

Journey to empowerment

At BSLI, we believe that empowering our stakeholders with fi nancial security is a not just a journey, but our ultimate destination. This year, as an organisation, we have embarked on this unique journey towards buildinga trust surplus organisation by empowering the lives of customers, advisors and employees.

Over the last few years, the insurance industry has undergone drastic changes. Changes in the regulatory environment in particular have had a signifi cant impact on the development of the industry. Consumer awareness and protection has been a critical part of the regulatory agenda. At BSLI, we are conscious of the fact that a long term sustainable business model is crucial towards achieving sustainable growth.

Thus began our journey to explore new avenues, to see endless possibilities, to experience the change in the route that leads us to newer horizons, and to shape numerous dreams into reality. It is undoubtedly the road less travelled towards a world of new possibilities.

Our approach is clear. Our journey requires the right companions (People), a navigation in the right direction (Process), and the eventual destination (winning the trust of our Customers). The key is to empower our people, strengthen our processes and serve our customers, thus developing a strong partnership of long term success.

Birla Annual Report 2014-15_P001_P024 Final.indd 1 10/11/15 3:53 PM

| ANNUAL REPORT 2014-152

Dear stakeholders,

It gives me great pleasure to connect with you once again. Last fi nancial year has been signifi cant for Birla Sun Life Insurance (BSLI). A year that will be known in the history of BSLI as the year of transformation, not just for BSLI but the life insurance industry at large. This change is refl ective of our endeavour to build a Trust surplus organisation that will epitomise a culture of customer centricity at BSLI shaping the organisation into a successful business model for the future.

Money as you know is a commodity that is intrinsic to the well-being of every person. It plays a signifi cant role in safeguarding the fi nancial future of families. And it is at the very core of every persons sense of security and well-being. A commitment to provide our customers with the means to protect loved ones against lifes uncertainties is thus our primary goal. This, in turn empowers us with a responsibility to shape up the fi nancialwell-being of our customers with their hard earned savings that they have bestowed with trust upon us.

Over the last 12 years, the insurance industry has been at the helm of transformational changes. These changes came into being primarily in response to the key challenge the life insurance industry faces, which is lack of customer confi dence. And it is this very issue that is at the heart of our change initiative.

MESSAGE FROM THE MD & CEO

We embarked on a unique journey towards building this trust surplus and empowering the lives of customers, advisors and employees by reimagining the way we conduct business. To achieve this vision, we have relooked at our business models and business practices, in the way we approach and provide solutions to our customers towards proactively addressing the key challenges faced by the industry today.

At BSLI, we have taken concrete steps in re-orienting ourselves completely to meet the changing needs of our customers to their satisfaction. As an organisation, we have made a conscious effort and have moved towards co-creation through the process of solutions counselling. We have focussed on unique customers solutions based on exclusive needs and counselling as a method to deliver our solutions. In this initiative, we lay emphasis on investing time and resources in understanding customer needs better and counselling them in every step, thus empowering them to co-create a solution to meet fi nancial needs. Our business model is to build a sustainable business to meet customer outcomes. These are very simple, yet powerful principles. Our protection counsellors are trained to provide superior advisory skills and have a deep commitment to customer welfare, managing their hard earned money with care.

We have taken several strides in our journey towards providing complete customised services. These would not be possible without the help of our advisors, strong in-house cross functional teams, a committed management, absolute shareholder support, and overall economic recovery.

We remain committed to our promise of ensuring the best solution to every customer. Each one of you is a valued customer andI thank you for accompanying us on our journey and placing your beliefs in BSLI over the years. I would like to reinforce our commitment in serving you in the best way possible.

The destination is not the end of our journey, but the beginning of a new one. As we move forward, we depend on your crucial support to guide us in the right direction. You can reach out to our advisors with your suggestions and thoughts on making our services even more fruitful. My team and I will always be at your behest towards serving you better. The legendary Steve Jobs said, The ones who are crazy enough to think that they can change the world, are the ones who do. My team is committed to help you realise your dreams and push ourselves to better our own best.

My best wishes on another successful journey.

The secret of change is to focus all your energy not on fi ghting the old, but on building the new. - Socrates

Pankaj RazdanMD & Chief Executive Offi cer, BSLI




Mr. Kumar Mangalam Birla (47) is the Chairman of the US $40 billion multinational Aditya Birla Group, which operates in 36 countries across 6 continents. Over 50% of its revenues fl ow from its operations outside India.

Mr. Birla chairs the Boards of all of the Groups major companies in India and globally. Among its clutch of companies globally feature Novelis, Columbian Chemicals, Aditya Birla Minerals, Aditya Birla Chemicals, Thai Carbon Black, Alexandria Carbon Black, Domsj Fabriker and Terrace Bay Pulp Mill, among others. In India, he chairs the Boards of Hindalco, Grasim, Aditya Birla Nuvo, UltraTech, Idea, Aditya Birla Financial Services and Aditya Birla Retail.

The Groups businesses are spread across a swath of industries. These include aluminium, copper, cement, textiles (pulp, fi bre, yarn, fabric and branded apparel), carbon black, insulators, natural resources, power, agribusiness, telecommunications, fi nancial services, IT/ITeS, retail and trading.

Business recordMr. Birla took over as Chairman of the Group in 1995, at the age of 28, after the untimely demise of his father. As Chairman,Mr. Birla has taken the Aditya Birla Group to an altogether higher growth trajectory. In the 18 years that he has been at the helm of the Group, he has accelerated growth, built a meritocracy and enhanced stakeholder value.

In the process he has raised the Groups turnover from US $2 billion in 1995, to US $40 billion today. Mr. Birla has restructured the businesses to emerge as a global/national leader in the sectors in which the Group operates. He has made 36 acquisitions in19 years in India and globally, the highest by an Indian multinational in India.

The acquisition of Novelis, a global metals major, in 2007, the second largest acquisition ever by an Indian company, led to a new found respect for Indian companies and stoked a higher level of interest in the country as well. Recently, the acquisition of Columbian Chemicals, a US based company and the worlds 3rd largest carbon black manufacturer positioned the Group as the No. 1 player in this sector, given its own sizeable carbon black operations today. Likewise, the acquisition of Domsj Fabriker, a leading Swedish speciality pulp manufacturer enables the Groups Pulp and Fibre business to further consolidate its global position.

Besides these, over the years Mr. Birla has acquired manufacturing plants in Canada, China, Indonesia, plantations in Laos, and mines in Australia, set up new plants in Egypt, Thailand and China. Alongside, he has expanded capacities in all of the Groups manufacturing units.

In India as well, he has made major acquisitions, the most notable being the Cement division of Larsen & Toubro, Indal from Alcan, Madura Garments from Coats Viyella, the Chlor Alkali division of Kanoria Chemicals and Solaris Chemtech Industries.

Under his stewardship, the Aditya Birla Group enjoys a position of leadership in all the major sectors in which it operates. Over the years, Mr. Birla has built a highly successful meritocratic organisation, anchored by an extraordinary force of 120,000 employees belonging to 42 different nationalities. The Aditya Birla Group has been ranked 4th in the world and 1st in Asia Pacifi c in the Top Companies for Leaders study 2011, conducted by Aon Hewitt, Fortune Magazine and RBL (a strategic HR and leadership Advisory fi rm). The Group has topped the Nielsens Corporate Image Monitor 2013-14 and emerged as the Number 1 corporate, the Best in Class, for the second consecutive year.

In key responsible positions on various regulatory bodiesMr. Birla holds several key positions on various regulatory and professional Boards. He was a Director on the Central Board of Directors of the Reserve Bank of India. He was Chairman of the Advisory Committee constituted by the Ministry of Company Affairs and also served on The Prime Minister of Indias Advisory Council on Trade and Industry.

As the Chairman of Securities and Exchange Board of India (SEBI) Committee on Corporate Governance, he authored the First Report on Corporate Governance titled Report of the Kumar Mangalam Birla Committee on Corporate Governance. Its recommendations were path breaking and became the basis of corporate governance norms. Furthermore, as the Convener of the Prime Ministers Task Force on Administrative and Legal Simplifi cations, the extensive recommendations made by him in his report, have been implemented in totality. Mr. Birla also served as Chairman of SEBIs committee on Insider Trading which formulated Corporate Governance principles for Indian corporates.

He is on the National Council of the Confederation of Indian Industry and the Apex Advisory Council of the Associated Chambers of Commerce and Industry of India.

Mr. Kumar Mangalam BirlaChairman

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On the Board of Educational Institutions Mr. Birla is deeply engaged with educational institutions. He is the Chancellor, of the renowned Birla Institute of Technology & Science (BITS), with campuses in Pilani, Goa, Hyderabad and Dubai.

He is a Director of the G. D. Birla Medical Research & Education Foundation.

He serves on the London Business Schools Asia Pacifi c Advisory Board and is an Honorary Fellow of the London Business School.

Accolades conferred on Mr. BirlaMr. Birla has won recognition for his exemplary contribution to leadership processes and institution/systems building. A selective list:

Inducted as an Honorary Member Rotary Club of Mumbai (November 2014)

Hello Hall of Fame Business Leader of the Year 2014 (November 2014)

US India Business Council (USIBC) 2014 Global Leadership Award

Business Leader of the Year, the Economic Times Awards for Corporate Excellence, 2012-13

Ranked the 4th Most Powerful CEO (2013) in the Economic Times Corporate Indias Defi nitive Power listing of 100 CEOs

Indore Management Associations Award - National Indian Business Icon, 2013

Forbes India Leadership Award-Flagship Award - Entrepreneur of the Year, 2012 NDTV Profi t Business Leadership Awards 2012 - Most Inspiring Leader

The Degree of Doctor of Science (Honoris Causa) in recognition of his role in pioneering great Engineering products involving Multi-disciplinary Engineering thought processes in the Country by the Visvesvaraya Technological University, Karnataka, 2012

NASSCOMs Global Business Leader Award 2012

CNBC-TV18 India Business Leader Award 2012 for Taking India Abroad

GQ Business Leader of the Year Award-2011 from Cond Nast India Pvt. Ltd., an affi liate of Cond Nast Global CNN-IBN Indian of the Year 2010-Business, for being the most outstanding business person and making a success out of most businesses including the sunrise sector, 2010

The All India Management Associations (AIMA), Managing India Awards 2010 Business Leader of the Year, 2010

The AIMA JRD Tata Corporate Leadership Award, 2008

The Honorary Degree of Doctor of Science (Honoris causa) in recognition of his invaluable contribution in the fi eld of Business Administration by the G. D. Pant University of Agriculture & Technology, 2008

For the development of technology and also for the involvement in the fi eld of Industries in bringing the country at par with other countries in the fi eld of Industries, the SRM University in Tamil Nadu conferred the Degree of Doctor of Literature, 2008

The Asia Pacifi c Global HR Excellence Exemplary Leader Award, 2007

The Global Indian Leader of the Year by NDTV Profi t in their Business Leader Awards category, 2007

The Lakshmipat Singhania-IIM, Lucknow National Leadership Award, Business Leader, 2006

Represented India at the Ernst & Young World Entrepreneur Award in Monte Carlo, Monaco in June 2006, where he was inducted as a Member of the Ernst & Young World Entrepreneur of the Year Academy

The Ernst & Young Entrepreneur of the Year Award, 2005

Young Super Performer in the CEO Category by Business Today, 2005

Chosen by the World Economic Forum (Davos) as one of the Young Global Leaders, 2004

The D. Litt (honoris Causa) Degree by The Banaras Hindu University, 2004




Honorary Fellowship by the All India Management Association, 2004

The Business Leader of the Year, The Economic Times Awards for Corporate Excellence 2002-2003

Business Man of the Year-2003 by Business India

The Rajiv Gandhi Award for Business Excellence and his contribution to the country by the Mumbai Pradesh Youth Congress, 2001

The National HRD Network, The Outstanding Business Man of the Year, 2001

The Institute of Directors Golden Peacock National Award for Business Leadership, 2001

Hindustan Times, The Businessman of the Year, 2001

The Bombay Management Association The Management Man of the Year 1999-2000

Among the 10 super Stars of Corporate Finance Global Finance, 1998

Among the top 10 of Indias most admired and respected CEOs and the top CEO of the coming millennium, Business World, 1998

Beyond business: Reaching out to the marginalised sections of society A fi rm practitioner of the trusteeship concept, Mr. Birla has institutionalised the concept of caring and giving at the Aditya Birla Group. With his mandate, the Group is involved in meaningful welfare driven activities that distinctively impact the quality of life of the weaker sections of society, surrounding hundreds of villages that are among the poorest in India, Thailand, Indonesia, Philippines and Egypt.

In India, the Group is engaged in 3,000 villages, reaching out to 7 million people annually and making a difference to their lives through meticulously conceived projects, focusing on health care, education, sustainable livelihood, infrastructure and social causes. For instance, the Group runs 42 schools which provide quality education to 45,000 children. Of these, over 18,000 children receive free education. Additionally, over a 100,000 youngsters benefi t from bridge educational programmes and vocational training. Its 18 hospitals tend to more than a million villagers. In line with its commitment to sustainable development, the Group has partnered with the Columbia University in establishing the Columbia Global Centres Earth Institute in Mumbai. To embed CSR as a way of life in organisations, it has set up the FICCI Aditya Birla CSR Centre for Excellence, in Delhi.

Educational background A commerce graduate from the Bombay University, Mr. Birla is a Chartered Accountant. He earned an MBA from the London Business School.

Personal detailsBorn June 14, 1967, in Kolkata, Mr. Birla was raised in Mumbai. Mr. Birla and his wife, Mrs. Neerja Birla, have three children, Ananyashree, Aryaman Vikram and Advaitesha.

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Mr. Ajay Srinivasan has been the Chief Executive, Financial Services at the Aditya Birla Group since July 2007.

In his role as Chief Executive, Financial Services, he sets the vision and provides strategic direction and leadership for the Groups Financial Services business that covers several verticals such as Life Insurance, Fund Management, Private Equity, Wealth Management, Retail Broking, Capital Markets Based Lending, Corporate Financing, Infrastructure Finance and General Insurance Broking. Under his leadership, the fi nancial services business has grown rapidly with a turnover of USD 1.3 billion, over 5.6 million customers and a workforce of over 17,500 people.

Prior to joining the Aditya Birla Group, Ajay was Chief Executive, Fund Management at Prudential Corporation Asia, based in Hong Kong. Under Ajays leadership, Prudentials Fund Management operations in Asia grew rapidly, both organically and through acquisition. Ajay oversaw a business that spanned ten markets, including Japan, with total funds under management of about USD 70 billion, which made it at the time the second largest retail fund manager in Asia.

As a member of Prudential Corporation Asias Board of Directors, Ajay also oversaw the development of Prudentials retirement business in Asia.

Mr. Bishwanath Puranmalka, Director of Aditya Birla Groups Financial Services Companies has a total working experience of over 45 years. He has been associated with the Aditya Birla Group in various capacities since the inception of his career. He has experience in the implementation and running of several manufacturing, training and service industry businesses, and setting up Greenfi eld manufacturing operations. He also has wide experience in the set up and operation and maintenance of captive Power Plants of the Aditya Birla Group.

He has been looking after a NBFC-Birla Global Finance Co. Ltd. now known as Aditya Birla Finance Ltd., since June 1994.

Mr. Ajay SrinivasanNon-Executive Director

Mr. Donald A. Stewart retired as Chief Executive Offi cer of Sun Life Financial Inc. in November, 2011, but continues to work fulltime on a broad range of international business activities with a primary focus on fi nancial services. He is Chairman of Sun Life Assurance Company of Canada (UK) in the United Kingdom, the AV Companies in Canada and the federal-provincial Nominating Committee of the Canada Pension Plan Investment Board. He is a board member and chairs the Audit Committee of leading aluminium products company Novelis, based in Atlanta. He is also a board member and Chair of the Risk Committee of Sun Life Everbright, based in Beijing and a board member of Birla Sun Life Asset Management Company in Mumbai.

Mr. Donald A. StewartNon-Executive Director

Mr. Bishwanath PuranmalkaNon-Executive Director




Mr. Kevin Strain is President, Sun Life Financial Asia. In this role, Mr. Strain is responsible for Sun Lifes interests in Asia, including identifying opportunities for growth in the region and managing the Companys relationships with its partners. Sun Life has operated in Asia since the 1890s, and today spans seven key markets the Philippines, Hong Kong, Indonesia, India, China, Vietnam and Malaysia. Mr. Strain was appointed to the role effective April 2012, and is based in Sun Lifes Asia Regional Offi ce in Hong Kong. He is also a member of the Companys Executive Team. Mr. Strain has signifi cant insurance and leadership experience in both individual and group businesses and in managing fi nance functions.

From 2007 to 2012, he was Senior Vice-President of Sun Lifes Individual Insurance and Investments division in Canada, responsible for the creation and delivery of Insurance, Health and Wealth Management Products and Solutions nationwide. This included managing an expansive distribution organisation encompassing Sun Lifes career sales force, the largest in Canada, and Third-party distributors. In earlier roles, Mr. Strain was Vice-President of Investor Relations in Sun Lifes corporate offi ce and held senior fi nance positions in the companys Canadian operations. He joined Sun Life in 2002 as part of its acquisition of the Clarica Life Insurance Company, where he had served in fi nance and customer-focused roles before being appointed head of Claricas Canadian pension and group savings division.

Mr. Strain is a Chartered Accountant and holds a Master of Accounting degree from the University of Waterloo in Canada.

Mr. Sandeep Asthana is the India Country Head of Sun Life Financial, a leading global fi nancial services company, headquartered in Canada, providing protection and wealth management products for over 150 years. In his role, Mr. Asthana manages Sun Life Financials interest in its two joint ventures in India-Birla Sun Life Insurance Co. Ltd., and Birla Sun Life Asset Management Co. Ltd.

A chemical engineer from IIT Mumbai and MBA from IIM Lucknow, Sandeep started his career with Unit Trust of India in 1993, and was closely involved with its plans for entry into life insurance and pensions. He joined Zurich Financial Services in 2000, and headed the life insurance planning team. In 2003, Sandeep joined RGA, a leading US-based life and health reinsurer, and built up their business in India to make it a leading reinsurance player in India. Prior to joining Sun Life Financial, Mr. Asthana was Managing Director of RGA Services India Pvt. Ltd.

Mr. Kevin StrainNon-Executive Director

Mr. Sandeep AsthanaNon-Executive Director

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Ajay joined Prudential in 1998 as Managing Director of Prudential ICICI Asset Management Company, Prudentials Indian fund management joint venture with ICICI Bank. Within two years of operation, Prudential ICICI AMC had grown to become the largest private sector asset management company in India.

With a proven track record for building successful businesses, his experience in the fi nancial services industry spans overtwo decades.

Ajay has in his fi nancial career engaged with several bodies including the Financial Planning Standards Board, the CII Committee on Financial Sector Reforms, The CII Committee of Financial Inclusion, The CII Committee on Insurance and Pensions and the FICCI Committee on Insurance.

Ajay holds a BA with Honours in Economics from St. Stephens College, University of Delhi and an MBA from the Indian Institute of Management, Ahmedabad.



BOARD OF DIRECTORS

Mr. M. V. Nair is the Chairman, Credit Information Bureau (India) Ltd. He is also Non-Executive Chairman of SWIFT Domestic Services Pvt Ltd., a joint venture between SWIFT Scrl, a global provider of secure fi nancial messaging services and seven Indian Banks.

Prior to this, he was CMD, Union Bank of India and Dena Bank.

He was also Chairman of the Indian Banks Association, Chairman of the Governing Board of Institute of Banking Personnel Selection, Chairman of the Managing Committee of Indian Institute of Banking and Finance, a member of the Governing Council of IDRBT as well as the member of the Governing Council of National Institute of Bank Management.

He was the Chairman of the Committee set up by the RBI to suggest revised guidelines for Priority Sector Lending Classification. He was the member of Usha Thorat committee on Lead Bank Scheme, Damodaran Committee on Customer Service in Banks and Khandelwal Committee on Human Resources issues of Public Sector Banks.

Mr. M. V. NairIndependent Director

Ms. Tarjani Vakil has over four decades of experience in the fi eld of development banking and fi nancial services. Ms. Vakil started her career with Maharashtra State Finance Corporation (MSFC) in 1958 and assumed several responsibilities till 1965. She moved from MSFC to join Industrial Development Bank of India (IDBI) in 1965. After an illustrious seventeen years stint at IDBI in the capacity of a Deputy General Manager, Ms. Vakil joined EXIM Bank of India as General Manager in 1982 and rose to the level of Chairman and Managing Director (CMD) of Exim Bank of India and retired in 1996. Ms. Vakil is now a member of the several boards and sub committees of the board of various companies and provides strategic direction.

She was responsible, as part of the top management team in 1982 to set up EXIM Bank as a model institution with an open offi ce, no peons, no clerical staff, less hierarchy and no computerisation offi ce on an ongoing basis.

Her tenure as Chairman and Managing Director (CMD) of EXIM Bank of India is marked by several initiatives, setting up of a platform for EXIM Bank of Asia and Australia. Those who joined this path rating initiatives initially were China, Japan, Australia, and Malaysia and so on. This platform has fl ourished and grown bigger.

On further her appointment as CMD in 1996, Ms. Vakil became the fi rst lady to head a fi nancial institution in India. She has won many laurels and awards, nationally and internationally.

Ms. Tarjani VakilIndependent Director




Mr. Haigreve Khaitan is a Partner of Khaitan & Co.s Mumbai Offi ce and also heads the Firm M&A practice. He started his career in Litigation and moved on to specialise in M&A and Private Equity transactions, Project Finance transactions, Financing transactions. He has been involved in some of the most high profi le and complex deals in India.

He has rich experience in all aspects of Merger & Acquisitions-due diligence, structuring, documentation involving listed companies, cross border transactions and medium and small business, etc. In restructuring, such as advice and documentation involving creditors restructuring, sick companies, de-mergers, spin-offs, sale of assets, etc. And in foreign investment, joint ventures and foreign collaborations. He advises a range of large Indian conglomerates and multinational clients in various business sectors including infrastructure, power, telecom, automobiles, steel, software and information technology, retail, etc.

He has been recommended by Chambers & Partners, Legal 500, IFLR 1000 as a leading lawyer in India for Corporate/M&A transactions.

He is on the Board of Directors of various public listed companies such as Ambuja Cements Limited, CEAT Limited, Harrisons Malayalam Limited, Inox Leisure Limited, Jindal Steel & Power Limited, Torrent Pharmaceuticals Limited and Karan Chand Thapar & Bros (Coal Sales) Limited, amongst others.

He has been in the practice of corporate and commercial mergers and acquisitions, private equity project fi nance.

Mr. Khaitan is a Law Graduate from South Kolkata Law College affi liation and involved in many as under Professional Affi liations:

1. Bar Council of West Bengal 2. Incorporated Law Society, Kolkata3. International Bar Association, London 4. The Indian Law Institute5. The Bar Association of India 6. Young Presidents Organisation

He is serving directorship as an independent Non-Executive Director on the Board of Directors of several Indian public listed companies.

BOARD OF DIRECTORS

Mr. Lalit Naik is the Managing Director of Aditya Birla Nuvo Ltd. and Sector Head of Chemicals Business. The business has its manufacturing operations in India, Thailand and China. Mr. Naik provides strategic and operational leadership to these businesses, both in domestic and international sectors.

Prior to joining Aditya Birla Group, Mr. Naik was the Regional MD, Asia Pacifi c of Saint Gobain, a 43 billion euro company.Mr. Naik was in charge of Saint Gobains operations in India, China, Malaysia, Thailand, Abu Dhabi and had also acquired successful and profi table businesses in Korea, Japan, Malaysia and Vietnam.

Born in 1961, Mr. Naik completed B. Tech in Chemical Engineering from IIT Kanpur and a MBA from IIM Ahmedabad. Mr. Naik is married and has two children. His son is studying in the US and the daughter is studying in the American High School.

Mr. Naik started his professional career with Bharat Petroleum and later joined Godrej Soaps Limited. During his long professional career, he worked in Dow Chemical India Limited and soon became an Executive Director of BASF India Limited. He was responsible for commissioning the fi rst SUPERPLASTICIZERS plant, Polymers/Dyestuff plants and acquisition of JBA printing inks. Mr. Naik with his experience and expertise managed the entire business and lead it to the path of profi tability.

Mr. Naik has more than two and a half decades of rich professional experience in the fi eld of Chemicals and has worked in leadership positions in many companies.

Mr. Lalit Naik Non-Executive Director

Mr. Haigreve KhaitanIndependent Director



Mr. Pankaj Razdan is the MD & Chief Executive Offi cer at Birla Sun Life Insurance (BSLI). He has rich experience in the fi nancial services business, across various functions and multiple lines of business. He has been with the Aditya Birla Financial Services Group (ABFSG) since 2007, as a co-owner of the ABFSG Vision and the Deputy Chief Executive - Financial Services, a position he continues to hold. At ABFSG, Pankaj has steered some of the key fi nancial services verticals successfully despite the challenging times. He has guided Birla Sun Life Asset Management Company to an industry leadership position. He has also driven many key projects across ABFSG, to help set a foundation for our leadership in the Indian fi nancial services industry.

In his role at Birla Sun Life Insurance, Pankaj provides BSLI strategic direction and leads the insurance team towards achieving rapid growth and profi tability. As BSLI gears for its next phase of growth, the Company will benefi t from his experience and expertise in growing businesses, developing new business models, building distribution effi ciency and customer management.

Pankajs professional experience spans organisations including the Karvy Group and ICICI Prudential Asset Management Company. He has been a recipient of several personal and professional recognitions including being recognised as Indias Hottest Young Executives by Business Today. He holds a degree in electronics engineering with the experience of multiple management development programs from illustrious institutes including the Indian Institute of Management, Ahmedabad.

Mr. Pankaj RazdanManaging Director & Chief Executive Offi cer

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SENIOR MANAGEMENT TEAM

Mr. Mayank Bathwal is the Deputy Chief Executive Offi cer at BSLI. In this role, he partners the CEO and the leadership team in managing the affairs of the company. He oversees the Finance, Planning, IT, Operations, Strategy, Group business and Investment functions and also provides leadership to some very important areas of the Company including Revenue Assurance, Customer Service, Technology enablement and Operational effi ciency.

Mayank has rich experience of nearly 20 years in the industry. He joined the Aditya Birla Group in early 1994 and has worked closely in various units and projects of the group including fertilizer and copper smelting units, fi nancial services business and power projects.

He joined Birla Sun Life Insurance in December 1999 as part of the Project team to set up the Life Insurance venture and was looking after the Business Strategy and Planning function prior to taking charge of other Finance Operations of the company. Mayank then moved to take charge as the Chief Financial Offi cer of Sun Life, Indonesia in June 2006. He moved back to India in June 2007 as CFO at BSLI with the objective of supporting BSLI in its transformational phase after his yearlong successful stint in Indonesia. As the CFO & Head of Institutional Sales in FY 2011, in addition to the Finance operations he also took charge of the Institutional Sales teams which included Bancassurance, Corporate Agency & Broking channels of BSLI.

Mayank is a Fellow member of the Institute of Chartered Accountants of India and the Institute of Cost & Works Accountants of India and an Associate Member of the Institute of Company Secretaries of India. Mayank was also felicitated at Annual CFO100 Roll of Honour (for the years 2012 and 2013) for his exceptional contribution to the area of Corporate Finance.

Mayank is also a member of CII CFO/Tax Committee and ICC Expert committee on Banking, Finance and Insurance.

Mr. Amit Jain is Chief Financial Offi cer (CFO) at BSLI overseeing the Finance, Accounts and Taxation functions. He holds a Masters degree in Business Administration from the Faculty of Management Studies (FMS), Delhi and a Bachelors degree in Mechanical Engineering from Delhi University.

Amit brings two decades of experience in Finance, Planning and Strategy. He has spent close to 10 years in BSLI. His sharp business acumen has lent immense success to the Planning and Finance functions that he has spearheaded.

His professional experience spans organisations including IDBI Federal Life Insurance, Max India Ltd., CARE Ratings among others.

Mr. Mayank Bathwal Deputy Chief Executive Offi cer

Mr. Amit Jain Chief Financial Offi cer (CFO)




Mr. Lalit Vermani is Chief Legal, Compliance and Risk Offi cer heading the Compliance, Legal, Risk and Internal Audit functions for the Company. He has 20 years of experience in various areas of Financial Services including Insurance, Asset Management and Investment banking. Prior to this assignment, Lalit was heading the Compliance function at Birla Sun Life AMC Ltd.

Lalit holds an Honours Degree in Economics and MBA with specialisation in Finance. He is also a certifi ed Financial Risk Manager (FRM) by Global Association of Risk Professionals.

Mr. Lalit VermaniChief Legal Compliance & Risk Offi cer (CLCRO)

Mr. Ashok Suvarna is the Executive Vice President and COO at Birla Sun Life Insurance Company Ltd. In his role, he is responsible for providing leadership to the Underwriting, Revenue Assurance, Customer Service and Operations teams. He is part of the Leadership Team of Birla Sun Life Insurance and is involved in rolling out growth strategies of the company.

Ashok comes with an experience of over 20 years in the Financial Services industry. He has experience is setting up and managing teams across functional areas including Technology, Operations, Projects and Quality Assurance. Prior to joining Birla Sun Life Insurance, Ashok was EVP and COO at Birla Sun Life Asset Management Company Ltd, where he was providing leadership to the Operations, Technology, Service and Marketing teams. Before joining the Aditya Birla Group, he was Senior Vice President and Head of Operations at ICICI Prudential Asset Management Company Ltd, where he was responsible for Operations, Projects and Quality Assurance and was also involved in pan Asia projects of Prudential Funds Management. He has been associated with many industry fi rsts in the MF Industry including the launch of MF transactions on the Stock Exchange platform. Before joining ICICI Prudential Asset Management Company Ltd, Ashok was associated with SBI Funds Management Pvt. Ltd. He is also a winner of several awards, including the Aditya Birla Chairmans award.

Mr. Ashok SuvarnaChief Operating Offi cer

Mr. Anil Kumar Singh is the Chief Actuarial Offi cer & Appointed Actuary for Birla Sun Life Insurance (BSLI) and is responsible for all Actuarial functions within the Company. Anil is a Fellow of the Institute of Actuaries of India, 2002 and holds a Masters in Statistics from Lucknow University.

Before joining BSLI, Anil was the Chief Actuary & Appointed Actuary at Bajaj Allianz Life Insurance Company. Anil has vast experience of close to 20 years in the Life Insurance industry in India, in Actuarial roles covering Valuation, Asset Liability Management, Product Development and Pricing with organisations like LIC, Aviva Life Insurance and was also a part of the BSLI Actuarial team during its inception in 2000-2001.

Mr. Anil Kumar Singh Chief Actuarial Offi cer (CAO)





Mr. Pramod Krishnamurthy is the Chief Technology Offi cer (CTO) for BSLI responsible for providing the crucial technology edge to enable BSLI to differentiate itself positively in the marketplace.

Pramod is an IIT-IIM graduate and has over 22 years of work experience in the Financial Services Technology area. He has held several senior leadership positions in the IT and Financial Services Industry, including running his own software company early in his career. Prior to joining BSLI, Pramod was an Executive Vice President with Fullerton India Credit.

He was awarded the prestigious Pan-Asia IT Leadership Award for 2012 by Asia Insurance Review and Celent, for defi ning and implementing the technology strategy and roadmap for BSLI. He was also recognised among the Top 100 CIOs in India for 2011, by his peer group under the aegis of World CIO Council and CIO Association of India.

Mr. Pramod Krishnamurthy Chief Technology Offi cer (CTO)

Mr. Sashi Krishnan is the Chief Investment Offi cer (CIO) of Birla Sun Life Insurance. He joined the organisation in December 2011 and has a rich experience of over 25 years in the Mutual Fund and Life Insurance industry.

Sashi has done his BE (Hons.) in Chemical Engineering and MSc (Hons.) in Economics from BITS, Pilani. He also has a Diploma in Management from IGNOU with a specialisation in Finance. In addition, he has also done CAIIB from the Indian Institute of Bankers. He has an extensive experience in Equity and Debt Markets. Prior to joining BSLI, Sashi was the Chief Investment Offi cer at Bajaj Allianz Life Insurance Company where he managed Assets over ` 42,000 crores. Besides leading the Investments team and being a member of the Investment Committee, he was also involved in product design and provided sales support. His previous assignments include leadership roles with DBS Bank (Singapore), DBS Cholamandalam Asset Management Ltd. and Unit Trust of India. Sashi is the Member of the Index Policy Committee of India Index Services & Products Ltd. and, also was the Co Chair of Life Insurance Committee of the Bombay Chamber of Commerce and Industry.

He has also served as the Member of the Financial Planning Standards Board, India in 2004-2006. He is also a member of the Capital Markets Committee of the Indian Merchants Chamber.

Mr. Sashi Krishnan Chief Investment Offi cer (CIO)




Mr. Vikas Seth is Chief Distribution Offi cer (CDO) at BSLI. He is a qualifi ed Electronics & Electrical Communication Engineer and has completed a Masters Degree in Business Administration (Marketing). He joined BSLI in January 2008.

Currently at BSLI, Vikas is responsible for Direct Sales Force, Bancassurance and Corporate Agency and Broker channels.

Vikas has a strong professional experience of over 17 years in diverse industries including Telecom, FMCG and Life Insurance. He has worked with organisations like Essar Telecom (Vodafone), Amway, ICICI Prudential and HDFC Life in the past. His expertise is in start-up, building distribution, implementation of sales & marketing strategies. He has played an important role in building BSLIs distribution capability.

Mr. Vikas Seth Chief Distribution Offi cer (CDO)

Ms. Shobha Ratna is Executive Vice President & Head Human Resource & Training at Birla Sun Life Insurance (BSLI). In this role, she drives the Human Resource strategy at BSLI including talent management, talent development, compensation and culture creation.

Shobha has extensive experience of about eighteen years in the functional areas of talent, leadership and learning. Prior to this role at BSLI, she managed talent and leadership development at the Aditya Birla Group (ABG) for six years. At ABG, Shobha contributed signifi cantly to institutionalising the leadership development and talent management processes across the Group through a series of new initiatives aimed to build the talent pipeline. Her professional experience also includes a stint of twelve years at Hindustan Unilever Ltd. (HUL) with a year spent in Unilever London.

Shobha holds a Bachelors degree in Civil Engineering from the National Institute of Technology (NIT), Calicut and a Masters degree in Personnel Management & Industrial Relations (PMIR) from the Tata Institute of Social Sciences (TISS).

Ms. Shobha RatnaHead Human Resource & Training




SUMMARY OF FINANCIAL INDICATORS

10,411

7,1777,158

5,6145,885

7,110

5,677 5,216

4,8335,23

3

2011 2012 2013 2014 2015

Total Premium Total Income

Total Premium for FY1415

Total Premium collected over the years (in crores)

285

371

542461

305

2011 2012 2013 2014 2015

Net Profit for FY1415

Net Profi t over the years (in crores)

1,215

1,2031,161

1,045

996

2011 2012 2013 2014 2015

OPEX for FY1415

Operating expenses over the years (in crores)


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We enhance our process...

to navigate the path of success

On our journey to empowerment, we redefi ned the business model based on the core framework of CPS (Capacity-Productivity-Sustainability). We are confi dent that using this framework will help us achieve our core vision of building a trust surplus organisation.




Over the last decade, the insurance industry has undergone a transformational change. At BSLI, we realise that for long term sustainable growth, we need to realign the business model, adjust to increasing amounts of regulation and attempt to continuously innovate for growth. Thus we started on to relook at our business models and the key challenges that the organisation was facing.

The Direct Sales Force (Agency) Channel commands about 80% of BSLIs business, and therefore was the natural fi rst choice in this journey. After extensive research across stakeholders including employees, advisors, customers and competition in the agency and third party distribution channel, three key challenges were identifi ed

a. The challenge of accessing a large pool of customers in a manner that engenders trust b. The challenge of improving the quality of engagement and selling to the customers and c. Building a pool of high quality and committed sales-force & distribution.

Innovation the key to progress

The Innovation and Design Lab is composed of two teams Design and Intervention. The Design team with its unique research, innovation, design and development capabilities, builds new tools and models collaborating with various functions as required. It also plans launch, roll out and integration into the BSLI system through training, etc. The Intervention team is in-charge of the roll out, assimilation and adoption of the model. They act as coaches for people on fi eld, and provide on-ground support and share best practices and success.

The entire approach is based on the core philosophy of trust surplus, which automatically brings us closer to the customer. Each tool creates win-win for us and the competitors and builds unique competitive advantages over our competitors.

Building excellence in Agency Channel

Since its inception, BSLI has been at the helm of innovation within the life insurance market, ushering in an industry-wide change with the introduction of innovative unit-linked products and the highest NAV plans. We strongly believe that innovation may ultimately be the key to growth, regardless of shifting economic and insurance market conditions, as they devise ways to thwart ongoing and emerging competitive threats as well as capitalise on new opportunities.

An Innovation and Design Lab was conceptualised with the vision of addressing the fundamental issue of organisational quality as a strategy to build a competitive advantage in every aspect of our business. Our goal was to redefi ne the business model and develop solutions for the key challenges for not only insurance, but also those that the fi nancial services industry was facing as a whole, such as the challenge of accessing a large pool of customers, building customer awareness towards fi nancial and protection needs, improving customer engagement and conversion through a robust sales force and distribution.

Based on this, the key levers were identifi ed (i) Roles Expansion and how to ensure that people contribute more, (ii) Tools That enable better performance and (iii) Engagement New ways of working, dialoguing and collaborating.

Roles Capacity-Productivity-Sustainability

The fi rst step towards redefi ning the Business Model is based on the core framework of CPS, which is Capacity-Productivity-Sustainability. Each function within the organisation is aligned by this core framework of building capacity and capability, ensuring productivity in a way that the business is sustainable.

Capacity The collective strength of our resources to deliver on the customer promiseOur goal is to understand the customers their needs, wants, dreams and aspirations. After a thorough understanding, we offer them unique solutions that are mapped to their fi nancial needs. This enables us to build forums that allow us access to invaluable customer insights. We believe that understanding the customer and offering them solution based on their exclusive needs generates an environment of trust.

Productivity Leveraging our strengths to serve the customers in the best way possibleAt BSLI, productivity is the core of all our actions. Our focus is on delivering superior performance across all touch-points of customer delivery. Technological innovations have helped us bring unprecedented convenience for customers, enabling them to place their trust in us. Using innovative methods and effective communication tools, we continue to provide our customers with greater service effi ciencies and a compelling value.

Sustainability Building a lifelong relationship of trust with the customerWe understand that the key to our sustained trust with the customer is our determination to deliver on the customer promise. Our energy comes from the desire to earn the trust of every customer we meet, rather than the zeal to beat competitors. Thus, building trust and delivering superior performance are two integral values that are refl ected in our wide range of products and solution offerings. We aim to build a sustainable business to meet customer outcomes.

Tools The Cluster Model Approach

Our new cluster approach gives us access to a vast customer network through the sustainable, professional and scientifi c cluster model. BSLI identifi es clusters based on similar profi les, understands their needs and introduces our advisors to the cluster, helping them easily target like-minded prospects. Using the Cluster Model, we can offer unique solutions that are mapped to our customers fi nancial needs through a wide range of products and combo solution offerings.

PROCESS


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We guide our employees

in the right

direction

At BSLI, we believe that the empowerment of the organisation begins with the empowerment of its employees. By constantly developing scientifi c tools and methodologies, we aim to provide our employees with the right tools and techniques to achieve success.




Last year, in January 2014, BSLI has embarked on a unique journey towards building a trust surplus organisation and empowering the lives of advisors, employees and customers by reimagining the way we conduct business. To achieve this vision, we recognised the signifi cance of our employees in building this trust surplus organisation. Our employees and advisors are an invaluable part of BSLI and we could not embark on a journey towards empowerment without their active support and involvement.

The world is constantly changing and fast moving towards customisation. Even though the concept of customisation is relatively new to the fi nancial services domain, it is slowly fi nding its roots. The customers have now begun to expect more than insurance solutions from us. Instead, they require assistance in achieving their protection outcomes. As an organisation, we are therefore moving towards solutions counselling. We aim to focus on unique customer solutions based on their exclusive needs and counselling as a method to deliver our solutions. Our goal is to understand our customers needs, counsel them in every step of their journey of life, enable them to co-create a solution to meet their fi nancial needs and lead them on the road to empowerment.

Our Journey Redefi ned

We redefi ned the Business Model based on the core framework of CPS which is Capacity-Productivity-Sustainability. Each function in the organisation is aligned by this framework of building capacity, ensuring productivity in a way that the business is sustainable. Based on this key theme, the team has worked on four key tracks role alignment and measures, recruitment strategy, market engagement and customer engagement.

1. Redefi ning the Roles & Measures Differentiation of roles is critical, as drivers of success at

every level are different. So we redefi ned the roles across the sales hierarchy, based on the business model. The key objective was to move from just measuring business performance to measuring business health. Thus emerged the new measurement framework of Capacity-Productivity

Sustainability, which helped us assess the business outcomes in both qualitative and quantitative format.

2. Ensuring Quality Recruitment The new Business Model also required people with

certain mind sets, values and practices. It also required communicating the new way of doing business and setting the expectation right in the minds of new employees joining the organisation. A 4 step Recruitment Process was launched for FLS to ensure quality recruitment aligned to the new business model, moving from push hiring to discovery recruitment. Similarly, a tool for recruiting the right set of advisors who are committed to business was also made.

3. Market Engagement One of the major challenges that insurance industry and

fi nancial services industry is facing is the challenge of fi nding new customers. To reach out to a large pool of customers, we built the cluster based market engagement approach. The core outcome was to recognise the potential

of the area by shifting our thinking from individual to groups of customers, having common goals and not just depend on the natural market of the distributors.

4. Customer Engagement BSLI is committed towards empowering customers so

that they are able to discover their protection needs and identify relevant products/solutions to fulfil those needs. With the help of the Protection Counselling tool, we made a shift from push mode of engagement to co- creation and self-discovery.

Recruitment Strategy

In an industry where fi nding right candidates who are committed to the business is diffi cult, our Discovery Recruitment Process is a unique strategy, where not just the company discovers about the prospect, but also the prospect discovers about him. The discovery resume and mind set orientation helps us fi nd the right fi tment for the company, rather than just depending on an interview process, which is too dependent on individual skills and judgement.

A 4 step Recruitment Process was launched for FLS to ensure quality recruitment in alignment to the new business model. The tool required designing of resume, mind set orientation test and career opportunity presentation. Workshops were conducted with the Branch Managers to ensure adoptions. Similarly, a tool for recruiting right set of advisors called the Advisor Recruitment Roadmap was made to recruit right advisors, who are committed to business. This tool had three parts learning resources for FLS, engagement resources for advisor recruitment, and communication handouts. A very innovative income calculator was also made to show earning potential to advisors.

Market Engagement

With a focus on insights and innovation, we have discovered new ways to connect with our customers and build long-term relationships with them. With our new customer-centric approach, we have ensured that our employees and advisors become a crucial part of the customers everyday life. After all, they are the face of BSLI for our customers and their enthusiasm, energy and passion has played an important part in our success.

The cluster approach has not only helped us in building trust, but also led to long term sustainability of the business through referrals and upsell.

1. Identifying customers We are now able to simplify and expand our reach, rather than use the one-on-one approach to target a few people we know personally.

2. Engaging with customers With limited tools and resources, breaking the ice with prospective customers was a challenge. Now, we penetrate the identifi ed clusters through contribution events and equip our advisors with the tools to engage with the customers.

EMPLOYEES



EMPLOYEES

Customer Engagement

We launched a three level certifi cation program called Protection Counselling Program for our advisors, where they are systematically trained through three training interventions to become certifi ed Protection Counsellors. This brings immense pride and recognition to the advisors as they graduate from being insurance advisors to protection counsellors.

3. Offering customised solutions Prospective customers found the one-size-fi ts-all approach unconvincing. Thus, we now offer solutions and combos that are tailor-made to our customers identifi ed fi nancial needs.

4. Empowering customers Conventional processes and services made it challenging to build a long-term relationship with customers. We have now ensured to fast track processes and empower zones for service convenience.






We lead our customers...

on the road to empowerment.

The most crucial milestone on the journey to end-to-end empowerment is building a sustainable relationship with customers. Through our various customer-centric innovations and practices, we aim to generate more engagement and involvement of the customers in our growth.


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CUSTOMERS

Life insurance is a product which assures certainty in times of uncertainty. Customers invest with us for long term benefi ts and hence at the core of our entire business lies trust. To achieve the vision of being a leader and a role model in the industry, it has become extremely pertinent for BSLI to rebuild trust in the market and convert the prevailing trust defi cit into a trust surplus.

We believe that to empower our customers and build a trust surplus organisation, we need to have engagement with the customers and not just mere transaction. In the start of our journey, we redefi ned roles and measures, launched a new market engagement model to increase access to customers, redefi ned the recruitment strategy and made path breaking innovations in customer engagement by launching the Protection Counselling tool.

Current Challenges of customers

Though there are many challenges in an individuals life, most people are not aware of the risks and uncertainties that can prevent them from fulfi lling their aspirations and responsibilities. There also exist many products in the market and many rationales to buy insurance and other similar products. Though every advisor may claim that he is selling the right product or solution, the customer is in no way sure of having made an optimal choice.

BSLIs approach to customer empowerment

BSLI is committed towards empowering its customers so that they are able to discover their protection needs and identify relevant products and solutions to fulfi l those needs. We believe that our Protection Counselling tool has the potential to change the way insurance is sold today, putting BSLI far ahead of the competition. This industry pioneering methodology has reached a new level in customer engagement and consultative selling. These strategic innovations are crucial to the growth of the insurance industry, thus building customer-centricity across fi nancial services.

Building Sustainable relationships

The most crucial stage in end-to-end empowerment is building a sustainable relationship with the customers.

We are launching a service Unique Customer History (UCH) where we are building a Roadmap of Engagement with the customer. Each advisor will get unique history of customer engagement, open solutions and strategies and timely updates on when and with what proposition they can engage with the customers.

At BSLI, we strongly believe that through our various customer-centric innovations and practices which are aimed to build the trust surplus, we will build a strong partnership of long term success.

Digitising Customer Experience

Launch of the e-commerce platform with Protect@EaseWe are focussed on building a platform with fi rst-in-industry features that would showcase BSLIs strength in the online marketplace.

Protect@Ease has many convenient features for customer engagement.

A unique horizontal interface: The customer can see both his details input and the premium output without having to scroll down. Any missing information can be viewed at one go as opposed to scrolling up and down to fi nd the missing fi elds.

Easy readability

A unique app tracker: This allows the customer to keep tracking his policy status. The feature is also available for offl ine customers.

Online medical appointment booking Sixty seconds call back for assistance

S4S engagement appIn our endeavour to spread awareness about the value of Life Insurance, we set out to empower our customers to protect themselves against the uncertainties of life. Hence, we created a mobile application that would empower the customer to protect himself in an uncertain situation and be closer to his loved ones when they are caught in a similar situation. The app was a safety box of a secure fi nancial future. Thus we called it S4S Security for Self app.

Key Features Allows the user to send emergency messages with the current location link illustrated in a map, to fi ve close contacts within 5 seconds, through just a click

Enables the user to activate a siren to sensitise the immediate surroundings and get help Permits the user to take a live recording of situation and send an email with the voice recording when triggered

Stores information about all insurance policies the user owns

Nominates multiple loved ones of the user to share the details of the policies

Store all medical data for easy access during emergencies

Brand Campaign

Khud ko kar bulandThis was our biggest online and social campaign. It extended support to the brand campaign through extensive digital media and social promotions.

Some of the key highlights of this campaign are:

Total impressions: 83 million Total clicks: 8.51 lakh Overall CTR: 1.72% Total views: 5.8 million + web + mobile View Through Rate: 20%

Top performers: YouTube views: 3.4 million Social Media reach: 47 lakh Facebook reach: 5.3 million Facebook post-promotion activity: 80,000+ likes Reach of Logical Indian: 9 lakh readers

We also explored Facebook as a medium for reaching out to existing customers for premium renewal payments. The message was successfully communicated to more than 6 lakh customers, engaging them for 3 months.



Golden Peacock Award for Business Excellence in 2014

Adjudged a top 5 employer in the BFSI sector in the annual Best Companies to Work for - BT - People Strong Survey.

Celent Model Insurer Asia 2014 Award in the area of IT Management and Business Process Management.

Skoch Order-of-Merit Award for Business Leadership in Insurance through Strategy & Innovation.

Won a Silver metal at Effi es, 2014 for its effective marketing campaign.

Won a Silver metal at Big Bang Awards, 2014

Won the Kyoorius Advertising Awards, 2014 for the most outstanding creative work in the Indian communications sphere.

Won a Blue Elephant and a Black Elephant (the Cannes Grand Prix equivalent)

Won 3 Bronze metals at Goafest Creative & Media Abby Awards, 2014

Won a Silver metal at Emvies, 2014 for measurable and signifi cant contributions in the fi eld of media.

Key Rewards&

Recognitions

ACHIEVING MILESTONES



FINANCIAL REPORT


for the year ended March 31, 2015



Directors Report

Dear Shareholders,

On behalf of your Board of Directors, I present the fifteenth Annual Report, together with the Audited Statement of Accounts, of Birla Sun Life Insurance Company Limited (the Company/BSLI) for the year ended March 31, 2015.

1. INDUSTRY & BUSINESS PERFORMANCEMacro-economic conditions and regulatory changes have influenced the performance of Life Insurance Industry, shifting the priorities of Life Insurers and driving the following key business trends:

In Individual life, LIC registered a 26% YoY de-growth in FY15, leading to decrease in its market share from 63% in FY14 to 53% in FY15. The private sector grew by 16% in FY15. The combined market share of top four private insurance players increased from 22% in FY14 to 31% in FY15, on the back of their captive Bancassurance channel.Total Number of customer of all Insurance players (including LIC) declined by 37% over previous year. Even among the private insurance players, the number of customers declined by 10% YoY, and the growth in new business premium was largely driven through higher average premium per policy.Bancassurance continues to grow, and has become the largest distribution channel in the private sector. While, share of sales by the corporate agents and brokers continued to shrink, the direct channel showed significant growth during the year.Positive equity sentiment on the back of a stable Government at the Centre and easing of inflation caused a shift in consumer preference towards unit linked products.In Group Life, market share of private insurance players increased from 32% in FY14 to 39% in FY15, with the top five private insurance players contributing 29% of the group sales in FY15. The growth was mostly attributable to the private insurance players gaining foothold in PSU and Mega customers segments where traditionally LIC has been the leading insurer.

Outlook for FY16 in terms of new business growth is positive due to recovery in GDP growth, easing of inflation, buoyant capital markets and the Governments moves to encourage financial savings. Recent regulatory changes such as the easing of FDI limits in insurance can help attract more capital to the insurance sector. Your Company has taken several steps during the Year to transform its model for engagement with its customers and distributors. Overall, BSLI has transitioned well in terms of its product strategy leading to a balanced suite of participating and non-participating products both traditional and unit-linked. Your Company is well positioned to capitalise on the opportunities which the sector will offer in the next 3-5 years.

2. BUSINESS REVIEW AND FINANCIAL PERFORMANCEFinancial PerformanceTable 1: Business & Financial Performance of Your Company (` in Crores)

ParticularsStandalone Consolidated

2014-15 2013-14 Inc. (%) 2014-15Business PerformanceNew Business Premium 1,938 1,697 14% 1,938Renewal Premium 3,295 3,136 5% 3,295Total Premium 5,233 4,833 8% 5,233Financial PerformanceIncomeGross premium income 5,233 4,833 8% 5,233Reinsurance (net) -165 -188 12% -165Total premium income (net) 5,068 4,645 9% 5,068Income from investmentsPolicyholders 5,309 2,496 113% 5,309Shareholders 128 115 11% 128Investment Income 5,437 2, 611 108% 5,437Other Income 34 37 -8% 34Total Income 10,539 7,293 45% 10,539Less:Commission 233 235 -1% 233Expenses (including depreciation & Service tax) 996 1,045 -5% 996Benefits paid (net) 3,772 3, 666 3% 3,772Provisions for actuarial liability (net) 5,253 1,977 166% 5,253Provision for Taxation

Profit for the Current Year 285 370 -23% 285

Share Capital 1,901 1,901 0% 1,901Reserve & Surplus 268 268 268Less: Debit Balance in Profit and Loss Account 627 913 -31% 627Net Worth 1,542 1,256 23% 1,542

2014_BSLI AR_Financial_Part 1.indd 25 11/10/15 3:58:03 PM



Directors Report

Your Company recorded satisfactory performance in FY15 across a range of key financial parameters:

The Company recorded new business premium of ` 1,938 crores in FY15 as compared to ` 1,697 crores in FY14. The Group Business recorded new business premium of ` 1,177 crores in FY15, a growth of 44% over FY14.

Renewal premium at ` 3,295 crores was higher by 5% in FY15 as compared to previous year. BSLI will continue to focus on managing its substantial in-force book and on improving persistency levels, which is important to deliver value from our existing book.

Traditional products accounted for 61% of sales in FY15 as compared to 59% in FY14. This was on account of continued focus on improving the product mix.

The Company registered Net Profit of ` 285 crores for the year as compared to ` 370 crores in the previous year. The fall in net profit was primarily due to lower profits from the inforce book especially the ULIP block sold before September 2010. The Company continues its focus on profitability through better management of in-force business, driving right product mix, optimisation of expenses and building efficiencies in distribution.

The Opex to Premium ratio has improved from 21.6% in FY14 to 18.6% in FY15.

Solvency margin at 2.05 for FY15 against the regulatory requirement of 1.5 indicates the Companys stable financial position.

With a robust operating platform, strong trusted brand and long term commitment towards life insurance business, the Company is well positioned to meet the challenges and to tap the long term opportunities of the life insurance industry.

Summary of Operations and BusinessBSLI continues to follow a successful multi-channel distribution strategy with 488 branches, around 90,600 Agents, 4 key bank partners and 151 third party distributors.

Post the Oct. 2013 regulatory changes, the Company has moved to a balanced sales mix of participating/non-participating traditional products and ULIP products. The Agency channel continues to be the Companys largest distribution channel contributing to over two third of our individual business with New Business premium of ` 519 crores.

In FY15, the focus has been on implementing a new distribution model built around customer discovery, customer engagement and solution fulfillment. The channel took significant steps towards digitisation by launching 2 new platforms My Solutions (Tablet based platform to offer solutions to customers) and Empower@ease virtual office for sales managers and our Advisors.

The FY15 was marked by the exit of a major bancassurance relationship for the Company Citibank N.A. The 14 years relationship with Citibank ended due to its global insurance tie-up with another larger global Insurer. Bancassurance channel delivered first year premium of ` 143 crores. The recent draft guidelines by IRDA on open architecture for corporate agents are expected to provide the Company with access to several opportunities for tie-ups with Banks. Our priorities for the channel moving forward will be to harvest existing partners growing customer base and tapping new opportunities from the open architecture model.

First year premium from Corporate Agent & Brokers and other channels in FY15 was ` 84 crores. Sales from this segment were lower compared to previous year due to initiatives taken to improve the quality of business. Going forward the focus will be on a few existing strategic tie-ups and addition of new strategic capacities, even while continuing efforts to improve the quality of business.

Group Business registered a 44% YoY growth with first year premium of ` 1,177 crores in FY15. This came from improvement in product lines across risk and fund based products and increasing our penetration across geographies & customer segments. This line of business continues to be profitable for the Company.

During the year under review, the Company launched several new products

Online Term offering: BSLI Protect@Ease

Non-Participating Traditional products: BSLI Guaranteed Future

Participating Traditional products: BSLI Vision Moneyback Plus, BSLI Vision Star Child, and BSLI Vision Endowment Plus

Unit Linked products: BSLI Fortune Elite

Products under Rural and Group platform were also launched

Assets under Management (AUM) grew from ` 24,775 crores in FY14 to ` 30,185 crores in FY15. For unit-linked funds, Company has delivered superior fund performance consistently beating its benchmarks. 100% of the funds outperformed their respective benchmark over the long-term (across 2-4 years). 100% of the funds also outperformed their benchmark over the 5 year period ending March 31, 2015.

The Companys continued quality initiatives such as pre-issuance verification calls, pre-issuance joint declaration from policy holder, and quality agreements with distributors to drive the right sales behaviour and reduce first premium lapse, have started showing positive results as the 13 month premium persistency was improved to 62% in FY15 from 59% in FY14.

With the focus on implementing the new distribution model of the Company and improving its customer-facing processes including customer service and distribution support, the Company has launched Protection Counseling tool, which helps in determining the financial needs of the customer as per his/her profile, thereby engaging the customer and building trust surplus.

Proactive measures have been undertaken to strengthen compliance and risk management functions given the Companys focus to maintain robust internal controls, mitigate risks and improve sales conduct and thereby maintain the reputation of being one of most compliant insurance companies in an environment of increasing regulatory oversight.





Directors Report

Our investment in branding yielded good results with both brand awareness as well as consideration scores (i.e. likelihood of prospective customers to purchase a policy) showing improvements to an all-time high. Going forward strength of the BSLI brand is expected to become more important and we continue to strengthen our brand performance through an optimal mix of above-the-line and below-the-line activities.

Outlook for the Industry and CompanyIn the last few years, general market conditions have been difficult for sale of life insurance savings products. Factors included lackluster equity markets, high interest rates, high inflation rates, and preference of customers towards physical savings over financial savings. Recent changes in the external environment including stable government at the centre, optimistic outlook on GDP growth, easing of inflation and buoyant capital markets augur well for the industry. India already has several structural advantages in terms of favourable demographics and high rate of savings. The above positive sentiment in the external environment will definitely provide a fillip to the growth and expansion of the industry. The recent regulatory changes such as The Insurance Laws (Amendment) Act, 2015 and Draft Registration of Corporate Agent (CA) Regulations, 2015 are expected to provide more balanced growth opportunity for all the players in the Insurance industry.

3. BSLI CLAIMS MISSION FOR ITS POLICYHOLDERSOur Mission is to provide hassle-free, seamless and speedy claim settlement services to our Customers and ensure prompt payment of valid claims.

For FY14-15, some of the key noteworthy points for Claims function were:

Extension of Scope of Grievance Redressal Committee (GRC) to hear and address claims representations. It is chaired by an independent 1. Chairman Mr. N. N. Jambusaria (ex Chairman, LIC).

To facilitate swifter Claim settlement, introduced NEFT payment method for Individual & Group Claims process. This enabled our 2. Customers to speedily receive the claim monies directly into their bank accounts and saved them the hassles of receiving and banking cheques. Over 95% of payments in H2 FY15 were through NEFT route.

To enhance customer experience in their moments of truth, BSLI rolled out innovative Claim Ambassador to assist on Claims process 3. to its Clients/Claimants in their hour of need.

Claims department has also proactively provided speedy claim settlement service in case of national tragedies and these claims have 4. been settled on topmost priority.

Improved results seen across all Channels in Claims processing.5.

Individual Life:Claims Pending (Nos) ratio has reduced significantly from 2.67% in FY14 to 1.68% in FY15.

Overall Payment ratio in number terms has moved up significantly from 87.76% in FY14 to 95.30% in FY15.

The Repudiation ratio has reduced drastically from 9.57% in FY14 to 3.02% in FY15.

Group Life: 100% of Claims stand paid. i.e. zero pendency/Repudiation of Group Claims.

Health Life: Claim pendency numbers reduced drastically from 14% in FY14 to 1.5% in FY15.

Rural & Social Life: 100% of Claims stands paid i.e. zero pendency of Rural & Social Claims.

4. RESERVESDuring the year, the Company generated profit after tax of ` 285 crores, leading to a reduction in accumulated losses. No amount was transferred to General Reserve.

5. DIVIDENDThe Board of Directors have not recommended any dividend for the year ended March 31, 2015 due to carry forward losses.

6. SHARE CAPITALThe Authorised Share Capital of the Company is ` 3,750 crores. The Issued, Subscribed and Paid up Capital of the Company was ` 1,901 crores, as on March 31, 2015. There was no requirement of fresh capital infusion during the year under review.

7. CORPORATE GOVERNANCEYour Directors reaffirm their commitment to the corporate governance standards to the extent they are applicable to the Company. A detailed Corporate Governance Report is annexed to and forms part of the Annual Report.

8. CONSOLIDATED FINANCIAL STATEMENTIn accordance with the Companies Act, 2013 (the Act) and Accounting Standard (AS) 21 on Consolidated Financial Statements, the audited consolidated financial statement is provided in the Annual Report.

9. SUBSIDIARIES During the year under review, the Company has incorporated a subsidiary Company in the name of Birla Sun Life Pension Management Limited to act as the Pension Fund Manager of the NPS Trust under the National Pension System to manage the pension funds for private




sector in accordance with the applicable provisions of the NPS, the schemes, the guidelines issued by the Pension Fund Regulatory and Development Authority (PFRDA). The subsidiary Company is yet to obtain certificate of registration/commencement of business from PFRDA.

A statement containing the salient features of the financial statement of subsidiary in the prescribed format AOC1 is annexed to the Directors Report. The statement also provides the details of performance and financial position of Subsidiary Company.

10. PUBLIC DEPOSITS During the year under review, the Company has not accepted any deposit from the public falling within the ambit of Chapter V (Section 73) of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

11. MANAGEMENT DISCUSSION AND ANALYSIS REPORTManagement Discussion and Analysis Report forms part of the Annual Report.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOThe information on conservation of Energy, Technology Absorption, Foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed to the Directors Report.

13. PARTICULARS OF EMPLOYEESIn pursuance of the Companys aspirations to maintain its position as the most preferred employer in the insurance industry, the Company continued to invest in creating a pool of talent for the growing business needs. The Companys total workforce stood at 8014 as at March 31, 2015 against 9,732 as of the previous year end. Structured initiatives around talent management, learning and development and long term retention plan for talent pool across levels were implemented for skill development to enhance productivity and performance of workforce. The relevant particulars of employees as required to the extend applicable under Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached to this report.

14. DIRECTORS As on March 31, 2015, your Board of Directors comprises of eleven Directors including one Managing Director and CEO and three Independent Directors.

During the year, following were the changes in the directorship of the Company:

Mr. Venkatesh Mysore (DIN 01401447) (Non-Executive Director) resigned from the Company w.e.f. August 01, 2014

Mr. Sandeep Asthana (DIN 00401858) was appointed as an Additional Director w.e.f. August 01, 2014

Mr. G.P. Gupta (DIN 00017639) (Independent Director) resigned from the Company w.e.f. August 20, 2014

Dr. Rakesh Jain (DIN 00020425) (Non-Executive Director) resigned from the Company w.e.f. December 05, 2014

Mr. Lalit Naik (DIN 02943588) (Non-Executive Director) was appointed as Director in casual Vacancy w.e.f. January 30, 2015

Mr. Haigreve Khaitan (DIN 00005290) (Independent Director) was appointed as an additional Director w.e.f. January 30, 2015

In accordance with the provisions of Section 149 of the Companies Act, 2013, Ms. Tarjani Vakil and Mr. M.V. Nair were appointed as Independent Directors for a term of five years w.e.f. August 28, 2014.

In accordance with the provisions of the Companies Act, 2013 read with Article 83 of the Articles of Association of the Company, Mr. Ajay Srinivasan and Mr. B.N. Puranmalka, Directors, retire by rotation at the ensuing Annual General Meeting (AGM) of the Company, and being eligible, offer themselves for re-appointment.

Mr. Sandeep Asthana was appointed as an Additional Director of the Company by the Board of Directors at its meeting held on August 01, 2014. As per the provision of Section 161 of the Companies Act, 2013, Mr. Asthana holds office only up to the date of the ensuing AGM of the Company. The Company has also received a Notice in writing along with requisite deposit under Section 160 of the Act, proposing his candidature for the office of Director.

Mr. Haigreve Khaitan was appointed as an Additional (Independent) Director on the Board of the Company for a period of 5 years. Pursuant to Section 161 of the Companies Act, 2013, Mr. Khaitan holds office only up to the date of the forthcoming AGM of the Company and in accordance with the requirements of Section 150 and 152 of the Companies Act, 2013, his continuation as an Independent Director will required to be approved by the Members of the Company in the ensuing AGM for a period of 5 years with effect from January 30, 2015.

Mr. Lalit Naik was appointed as Director in casual vacancy (in place of Dr. Rakesh Jain) on January 30, 2015. Pursuant to Section 161(4) of the Companies Act, 2013, Mr. Naik holds office up to the date which the original Director (Dr. Rakesh Jain) would have held office if it had not been vacated. Consequently, Mr. Naik holds office till the ensuing AGM of the Company, the date till which the original Director Dr. Rakesh Jain, would have held the office and is eligible for re-appointment. The Company has received Notices in writing from Members along with requisite deposit under Section 160 of the Act proposing the candidature of Mr. Khaitan and Mr. Naik for appointment as a Director. The Board recommends the appointment of aforesaid Directors by the shareholders in the ensuing AGM.

The Company has also received requisite disclosures and undertakings from all the Directors in compliance with the provisions of the Companies Act, 2013 and the Insurance Act, 1938 along with the other applicable guidelines issued by IRDA. The Independent Directors have given the declarations under Section 149(6) of the Companies Act, 2013.

Directors Report





A detailed profile of the Directors seeking appointment at the ensuing Annual General Meeting of the Company is given in the Corporate Governance Report, forming a part of this Annual Report.

15. KEY MANAGERIAL PERSONNEL During the year under review, the Company had the following Key Managerial Personnel (KMP):

Mr. Pankaj Razdan (Managing Director and Chief Executive Officer)

Mr. Amit Jain (Chief Financial Officer)

Mr. Ashish Lakhtakia (Company Secretary upto, August 29, 2014)

Mr. Amber Gupta (Company Secretary, appointed w.e.f. August 29, 2014)

16. BOARD EVALUATIONPursuant to the requirement of the Companies Act, 2013, the annual performance evaluation of the Board, the Directors (Independent and others) individually, as well as applicable Committees of the Board viz Audit, Nomination and Remuneration Committee (NRC) and Corporate Social Responsibility (CSR) Committee was carried out for FY14-15.

17. NOMINATION AND REMUNERATION COMMITTEE POLICYThe Board has formed the Nomination and Remuneration Committee. The Board has, on the recommendation of the Nomination & Remuneration Committee, formulated a policy on Directors appointment and remuneration including the criteria for determining qualifications, positive attributes and independence of a Director and other matters as specified under Section 178(3) of the Companies Act, 2013. The Nomination and Remuneration Policy of the Company is annexed to the Directors Report.

18. MANAGERIAL REMUNERATIONThe details on remuneration paid to the Non-Executive Directors are disclosed in the Corporate Governance Report and the details on remuneration paid to the Managing Director is as per MGT 9 which forms part of the Directors' Report.

19. NUMBER OF BOARD MEETINGS During the year under review four Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The detailed information about Composition, Meetings and attendance are provided in the Corporate Governance Report.

20. AUDIT COMMITTEEThe Company has duly constituted Audit Committee. The details as regard to the Composition, Meetings, attendance and other information are provided in the Corporate Governance Report.

21. WHISTLE BLOWER POLICYThe Company has implemented a Whistle Blower Policy providing a platform to all the employees and Directors to report any suspected or confirmed incident of fraud/misconduct through any of the determined reporting protocols. The more details are provided in the Corporate Governance Report.

22. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act 2013, your Directors, to the best of their knowledge and belief confirm that:

in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 preventing and detecting fraud and other irregularities;

the Directors have prepared the annual accounts on a going conce

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