Higher provisions for commercial third-party motor pool losses dragged Reliance Capital’s consolidated net profit for the year ended March 31 by 33.1 per cent at Rs 291.18, compared with the Rs 435.69-crore net profit in the year-ago period.
The company’s board of directors has recommended a dividend of Rs 6.50 per equity share of face value Rs 10 each.
During 2010-11, the Anil Dhirubhai Ambani Group company made a one-time provision of Rs 183.7 crore for commercial third-party motor pool losses in the general insurance business. According to industry estimates, during 2010-11, total industry losses on account of the commercial third-party motor pool stood at around Rs 4,000 crore. Third-party motor pool losses are shared by all general insurance players in proportion to their market share.
In 2010-11, Reliance General Insurance, the general insurance arm of the company, recorded a loss of Rs 310 crore, compared with a loss of Rs 91 crore a year ago. The company’s total income declined by 10.4 per cent to Rs 5,498.47 crore, from Rs 6,140.60 crore in 2009-10. The decline in total income was mainly due to a decline in general insurance premium and lower capital gains booked during the year, the company said in a release.
The company’s net worth stood at Rs 7,180 crore as on March 31.