The Royal Insurance Corporation of Bhutan Limited (RICBL) earned a profit of Nu 245.552 Million (M) after taxes during the first six months of this year, up from Nu 189.482M last June.
The profit before tax was Nu 327.402M at the end of June this year, up from Nu 252.642M during the same period of 2023.
The incomes included Insurance Revenue (Net of Department Management Expenses) of Nu 478.002M in 2024, which was Nu 360.108M last year.
Investment Revenue (Net of Department Management Expenses) accounted for Nu 169.323M, up from Nu 105.359M in 2023. Other Revenue accounted for Nu 41.912 in 2024, which was Nu 26.675M in 2023.
The company’s total income for the first six months of 2024 was Nu 350.591M, which was Nu 281.424M last year.
Total expenses from depreciation and others amounted to Nu 23.189M, while the same was Nu 28.782M last year.
Corporate Tax Provision was obliged at Nu 81.851M this year, while the same was provisioned at Nu 63.161M last June.
A corporate tax provision is an accounting estimate of the amount of income tax a company expects to pay or recover for a given financial period. It reflects the anticipated tax obligations based on the company’s taxable income and the applicable tax rates. The provision is recorded in the company’s financial statements as an expense on the income statement and as a liability on the balance sheet, though it may also be a receivable if the company anticipates a tax refund.
The process of determining the tax provision involves several steps. The first step is calculating Taxable Income to determine the income that will be subject to tax, which can differ from the financial accounting income due to differences in accounting rules and tax regulations.
Then comes the application of Tax Rates to the taxable income to estimate the total tax liability. After that, the company has to adjust for temporary differences between taxable income and accounting income, such as differences in depreciation methods or revenue recognition, which can affect the timing of tax payments.
The next step is incorporating deferred taxes in the accounts of deferred tax assets and liabilities which arise from differences between the book value of assets and liabilities and their tax bases. Finally, the company takes into consideration uncertain tax positions where estimates are accounted for any potential tax disputes or uncertainties.
This provision helps ensure that a company’s financial statements present an accurate picture of its financial health and performance, reflecting the expected tax impact of its operations.
Among others, RICBL’s total assets were valued at Nu 25,108.088M, almost Nu 2000M growth from last year’s figures of Nu 23,617.400M. The assets comprised of cash & bank balance at Nu 5,014.226M (Nu 4,687.197M in 2023), loans & investments (Net of Provisions) at Nu 15,642.392M (Nu 14,775.534M in 2023), fixed assets (Net of Depreciation) at Nu 2,692.538M (Nu 2,493.861 million in 2023), and other assets at Nu 1,758.932M (Nu 1,660.808M in 2023).
The company’s total liabilities stood at Nu 25,108.088M against Nu 23,617.400M last year. It included a paid-up capital of Nu 1,600.052M (Nu 1,600.052M in 2023), reserves & surplus at Nu 3,188.554M (Nu 2,630.677M in 2023), insurance & borrowings funds at Nu 12,532.623M (Nu 11,459.405M in2023), and other liabilities at Nu 7,786.859M (Nu 7,927.266M in 2023).
The company’s interim financial statement report was released earlier this month.
Instituted under the Royal Charter of His Majesty the Fourth Druk Gyalpo on the 7th of January 1975, the RICBL, since has positively impacted thousands of lives and contributed immensely to the overall socio-economic development of the country.
Over the last 49 years, the RICBL has helped generate revenue for the government while also providing insurance services and investment avenues through life insurance, general insurance, reinsurance, credit and securities products and services.
By Tashi Namgyal, Thimphu
