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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of ICICI Lombard General Insurance Company Ltd.

Mar 31, 2025

(1) The Company has contingent liability of =? 139,848 lakhs (previous year: =? 11,863 lakhs) on account of Income Tax matters, the appeals of which are pending before the appropriate Authorities / in the process of being filed.

This excludes,

a) Assessment Years 2006-07 in respect of which the Company has received favorable appellate order, which are pending for effect to be given by the Assessing Authority.

b) Assessment Years 2002-03, 2003-04, 2005-06, 2007-08, 2008-09, 2009-10, 2010-11, 201213, 2015-16, 2016-17 and 2017-18 for which the Company has received intimation from the Income Tax Department, for appeal filed with High Court/ITAT, against favorable Appellate Orders.

c) Assessment Years 2013-14 and AY 2014-15, for which the Company has received favourable order from Income Tax Appellate Tribunal with, wherein the appeals filed by the Income Tax Department against the Company have been dismissed.

(2) Contingent liability includes ^ 139,736 lakhs towards a Notice of Demand, received by the Company for AY 2020-21, AY 2021-22, AY 2022-23 and AY 2023-24 from income tax authorities, on account of disallowance of certain expenses as inadmissible. The Company has been advised that the adopted tax position is legally tenable. The Company has filed appeal for AY 202223 and for remaining three years, the company is in process of filing appeals against the said demand.

(3) Includes disputed refund / demand (including interest and penalty) of ^ 376,006 lakhs (previous year: ^ 43,573 lakhs) from Service Tax Authorities / Goods & Service Tax Authorities / Jammu and Kashmir Sales Tax, the appeals of which are pending / in the process of being filed before the appropriate Authorities. Further, ^ 6,251 Lakhs (previous year: ^ 5989 lakhs) has been paid at the time of filing CESTAT/Commissioner Appeal as per the provisions of the Finance Act, 1994/ GST Act.

(5) Excludes, payment of ^ 10,413 lakhs (previous year: ^10,413 lakhs) under protest pursuant to a GST proceeding on account of alleged ineligible input tax credit claim and applicability of GST on salvage adjusted on motor claims settled during the period from July 2017 to March 2022. The company has received an order in the matter. However, basis the clarification issued by the CBIC on the recommendation of the GST Council the Company has been advised that its tax position on both the matters is legally valid and that the Company should not ultimately be liable to pay the said amounts. Accordingly, the Company has treated the amount paid as deposit under âAdvances and Other Assetsâ as at March 31, 2025. Further, the Company will file refund for these amounts in due course.

5.1.2 The assets of the Company are free from all encumbrances except for fixed deposits of ^ 73 lakhs (previous year: ^ 73 lakhs) (Included in short term deposit account in Schedule - 11) for issuing bank guarantees and items included in Note 5.1.1 above.

5.1.3 Capital Commitments

Estimated amount of commitment pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is ^ 6,957 lakhs (previous year: ^ 4,961 lakhs).

5.1.4 Commitment in respect of loans is =? NIL (previous year: ^ NIL) and investments is =? 8,921 lakhs (previous year: ^ 9,404 lakhs).

Claims settled and remaining unpaid for more than six months is ^ Nil (previous year: ^ NIL). Claims where the claim payment period exceeds four years:

As per circular F&A/CIR/017/May-04, the claims made in respect of contracts where claims payment period exceeds four years, are required to be recognised on actuarial basis. Accordingly, the Appointed Actuary has certified the fairness of the liability assessment, assuming âNILâ discount rate.

In this context, the following claims have been valued on the basis of a contractually defined benefit amount payable in monthly installments.

5.1.8 (A) Investments

Value of contracts in relation to investments for:

â¢ Purchases where deliveries are pending =? 435 lakhs (previous year: =? 585 lakhs); and

â¢ Sales where payments are due is ^ NIL (previous year: ^ Nil).

Historical cost of investments that are valued on fair value basis is ^ 1,082,456 lakhs (previous year: ^ 805,936 lakhs). Break up of investment is as follows;

All investments are made in accordance with Insurance Act, 1938 and Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 and are performing investments. The policy holders funds have not been directly or indirectly invested outside India.

(B) Allocation of investment income

Investment income which is directly identifiable is allocated on actuals to revenue account(s) and profit and loss account as applicable. Investment income which is not directly identifiable has been allocated on the basis of the ratio of average policyholderâs investments to average shareholderâs investments, average being the balance at the beginning of the year and at the end of the reporting period. Investment income on Investments of Unclaimed amount of policyholders is recognized as liability under Schedule 13 -Unclaimed Amount of Policyholders.

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of average of unexpired Risk and claims outstanding net off outstanding premium of the respective segments.

5.1.9 Allocation of expenses

Allocation / apportionment of Operating Expenses is based on the Organisational Structure of the Company comprising of Business, Service and Support Groups. Business comprises of Corporate Business Group, Retail Business Group (including Sub Groups), Emerging Markets Business Group and Government Business Group. Expenses incurred by Business Groups are direct in nature. Service Group comprises of Customer Service Group which consists of Underwriting and Claims Group, created based on product segments. Support Group consists of Investments, Operations, Legal, Finance and Accounts, Reinsurance, Technology etc. Expenses incurred by Service and Support Groups are indirect in nature.

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

â¢ Direct expenses pertaining to Business Group that are directly identifiable to a product segment are allocated on actuals and other direct expenses are apportioned in proportion to the net written premium of the product within the Business Group. However, in case of retail business group, the other expenses of its sub group are apportioned based on the net written premium contributed by the respective sub group;

â¢ Expenses pertaining to Service Group are apportioned directly to the product to which it pertains. In case of multiple products, expenses are apportioned in proportion to the net written premium of the multiple products;

â¢ Expenses pertaining to Support Group and any other expenses, which are not directly allocable, are apportioned on the basis of net written premium on a Company level.

Gratuity

The Company has a defined gratuity benefit plan payable to every employee on separation from employment. The Company makes the contribution to an approved gratuity fund which is maintained and managed by ICICI Prudential Life Insurance Company Limited.

Accrued Leave

The Company has a scheme for accrual of leave for employees. The leave policy permits the eligible employees to carry forward a portion of the unutilized accrued compensated absences, and utilize it in future service periods or receive cash compensation on separation. In addition, the unutilized accrued leave absences for the previous financial year would be paid annually to the employees, subject to a ceiling. The liability of accrued leave is determined on the basis of Actuarial Valuation carried out at the year end.

5.1.11 Remuneration to Managerial and Key Management Persons Qualitative Disclosure

A. Information relating to the composition and mandate of the Nomination and Remuneration Committee.

Composition: In terms of provisions of the Act, SEBI LODR Listing Regulations and IRDAI CG Regulations, the Board Nomination and Remuneration Committee comprises of four members out of which three (3) are Non-executive, Independent Directors and one is Non-executive Non-Independent Director. The Board Nomination and Remuneration Committee is chaired by Mr. Ved Prakash Chaturvedi, Non-executive, Independent Director of the Company. The composition of the Board Nomination and Remuneration Committee is given below -

Mr. Ved Prakash Chaturvedi, Chairperson, Non-executive, Independent Director

Mr. Antony Jacob, Non-executive, Independent Director

Ms. Preeti Reddy, Non-executive, Independent Director

Mr. Rakesh Jha, Non-executive, Non-Independent Director

Mandate of the Nomination and Remuneration Committee:

1 To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, Key Managerial personnel, Key Management Persons and other employees.

2 To consider and approve employee stock option schemes and to administer and supervise the same.

3 Approval of the policy for and quantum of bonus/long term performance pay (LTPP) payable to the employees.

4 To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal, and formulate criteria for evaluation of every directorâs performance, evaluation of the performance of Board and its committees; performance evaluation of the Chairperson of the Board and review its implementation and compliance.

5 To consider whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

6 To approve the compensation programme and to ensure that remuneration to directors, key managerial personnel, key management persons and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

7 To ensure that the proposed appointments/ re-appointments of key managerial personnel, key management persons or directors are in conformity with the Board approved policy.

8 To recommend re-constitution of Board Constituted Committees to the Board.

9 To devise a policy on diversity of the Board.

10 To recommend to the Board all remuneration, in whatever form, payable to senior management and ensure that the remuneration for Key Management Persons/Key Managerial Personnel is as per the Policy on Appointment and Compensation of Employees and Framework for Remuneration approved by the Board.

11 To ensure the succession planning for the Directors and the Key Management Persons/ Key Managerial Personnel of the Company including its implementation.

12 To carry out any other function, if any, as prescribed in the terms of reference of the Board Nomination and Remuneration Committee and any other terms of reference as may be decided by the Board and/or specified/provided under the Companies Act, 2013 or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, and the IRDAI (Corporate Governance for Insurers) Regulations, 2024 read with Master Circular on Corporate Governance for Insurers, 2024 and by any other regulatory authority.

B. Information relating to the design and structure of remuneration policy and the key features and objective of remuneration policy.

1. Key features and objectives of remuneration policy

The Company has under the guidance of the Board and the Board Nomination and Remuneration Committee (âBNRC/ Committeeâ), followed compensation practices intended to drive meritocracy and fairness.

The Company strives to ensure internal and external equity that are consistent with emerging market trends, Its business model and affordability based on business performance sets the overarching boundary conditions. This approach has been incorporated in the Compensation Policy, the key elements of which are given below:

a. Effective governance of compensation:

The BNRC has oversight over compensation. The Committee defines Key Performance Indicators (KPIs) for Whole-time Directors and the organisational performance norms for bonus based on the financial and strategic plan approved by the Board. The KPIs include both quantitative and qualitative aspects. The BNRC assesses organisational performance as well as the individual performance for Whole-time Directors of the Company. Based on its assessment, it makes recommendations to the Board regarding compensation for the Whole-time Directors of the Company and employees, including senior management and key management personnel.

b. Alignment of compensation philosophy with prudent risk taking:

1. The Company seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels and no guaranteed bonuses. Compensation is sought to be aligned to both financial and non-financial indicators of performance including aspects like risk management and compliance. In addition, the Company has an employee stock option scheme aimed at aligning compensation to long term performance through stock option grants that vest over a period of time to middle and senior management and Wholetime Directors. Compensation to staff in financial and risk control functions is independent of the business areas they oversee and depends on their performance assessment.

2. Whether the Remuneration Committee reviewed the firmâs remuneration policy during the past year, and if so, an overview of any changes that were made.

The Companyâs Remuneration Policy was reviewed by the BNRC and the Board at their meeting held on April 17, 2024. The changes were made to align the Remuneration Policy with ICICI Group practices.

3. Discussion of how the Company ensures that risk and compliance employees are remunerated independently of the businesses they oversee.

The compensation of staff engaged in control functions like risk and compliance depends on their performance, which is based on achievement of the key results of their respective functions. Their goal sheets do not include any business targets.

C. Description of the ways in which current and future risks are taken into account in the remuneration policy

1. Overview of the key risks that the Company takes into account while implementing remuneration measures.

The Board approves the Risk Management Framework of the Company. The business activities of the Company are undertaken within this framework to achieve the financial plan. The Risk Management Framework includes the Companyâs risk appetite, limits framework and policies and procedures governing various types of risk. KPIs of Whole-time Directors as well as employees, incorporate relevant risk management related aspects. For example, in addition to performance targets in areas such as growth and profits, performance indicators include aspects such as combined ratio and compliance. The BNRC takes into consideration all the above aspects while assessing organisational and individual performance and making compensation related recommendations to the Board.

2. Overview of the nature and type of key measures used to take account of these risks, including risk difficult to measure.

The annual performance targets and performance evaluation incorporate both qualitative and

quantitative aspects including combined ratio, reserving and refinement/ improvement of the risk management framework.

3. Discussion of the ways in which these measures affect remuneration.

Every year, the financial plan/targets are formulated in conjunction with a Risk Management Framework with limit structures for various areas of risk/lines of business, within which the Company operates to achieve the financial plan. To ensure effective alignment of compensation with prudent risk taking, the BNRC takes into account adherence to the Risk Management Framework in conjunction with which the financial plan/targets have been formulated. KPIs of Whole-time Directors as well as employees, incorporate relevant risk management related aspects. For example, in addition to performance targets in areas such as growth and profits, performance indicators include aspects such as the combined ratio and reserving and regulatory compliance. The BNRC takes into consideration all the above aspects while assessing organisational and individual performance and making compensation related recommendations to the Board.

4. Discussion of how the nature and type of these measures have changed over the past year and reasons for the changes, as well as the impact of changes on remuneration.

The Company has introduced regulatory compliance as one of the strategic performance indicators in FY 2024 with a focus on maintaining a strong risk regulatory and compliance culture. The BNRC has taken into consideration these performance measure along with other measure while assessing organisational and individual performance and making compensation related recommendations to the Board.

D. Description of the ways in which the Company seeks to link performance during a performance

measurement period with levels of remuneration

1. Overview of main performance metrics for the Company, top level business lines and individuals.

The main performance metrics includes business growth, market share, profits, risk metrics (such as combined ratio), compliance with regulatory norms, refinement of risk management processes and customer service. The specific metrics and weightages for various metrics vary with the role and level of the individual.

2. Discussion of how amounts of individual remuneration are linked to the Company-wide and individual performance.

The BNRC takes into consideration all the above aspects while assessing organisational and individual performance and making compensation related recommendations to the Board regarding the level of performance bonus for employees and the performance assessment of Whole-time Directors. The performance assessment of individual employees is undertaken based on achievements vis-a-vis their goal sheets, which incorporate the various aspects/ metrics described earlier.

3. Discussion of the measures the Company will in general implement to adjust remuneration in the event that performance metrics are weak, including the Companyâs criteria for determining âweakâ performance metrics.

The Companyâs Compensation Policy outlines the measures which the Company will implement in the event of a reasonable evidence of deterioration in financial performance. In case such an event occurs in the manner outlined in the policy, the BNRC may decide to apply malus/ clawback on none, part or all of the unvested deferred variable compensation.

Quantitative Disclosure

A. The details of remuneration paid to MD & CEO, Whole time Directorsâ and other KMP as per guidelines issued by IRDAI (Remuneration of Key Managerial Persons of insurers) Guidelines, 2023 and the terms of appointment are as under:

Managerial remuneration in excess of ^ 400 lakhs for each Managerial personnel has been contributed to Revenue account (policyholders accounts) from profit and lossaccounts (shareholders accounts).

B. The details of remuneration paid to other MD & CEO and Whole time director as per guidelines issued by IRDAI (Remuneration of Key Managerial Persons of insurers) Guidelines, 2023 and as per the terms of appointment of Company for the year ended March 31, 2025 are as follows:

5.1.12 A. Share Capital

During the year, the Company has allotted 3,041,182 equity shares (previous year 1,560,192 equity shares) under ESOS raising ^ 35,007 lakhs (previous year: ^ 16,476 lakhs).

During the year ended, the Company has not made any preferential allotment (previous year: ^ NIL).

B. Share Application

At March 31, 2025, the Company has ^ 25 lakhs share application money under ESOS (previous year: ^ 70 lakhs) against which shares are yet to be allotted.

5.1.13 Outsourcing, business development and marketing support expenses

A. Employee Stock Option Scheme (ESOS)

The Company instituted the ESOS Scheme pursuant to the resolutions passed by our Board and Shareholders on April 26, 2005 and July 22, 2005, respectively. The Company had granted Stock options to employees in compliance with the Securities and Exchange Board of India (Employee stock option scheme and employee stock purchase scheme) guidelines, 1999. Pursuant to the ESOS Scheme, no eligible employee could, in aggregate be granted in a financial year, options greater than 0.1% of the issued equity share capital of the Company and the aggregate of options granted to the eligible employees under the ESOS Scheme was capped at 8.98% of the issued capital of our Company as on the date of such grants. ESOS Scheme was further amended pursuant to the resolutions passed by the Board and Shareholders on June 9, 2017 and July 10, 2017, respectively, to approve the amendment in the ESOS Scheme for, inter alia, aligning it with the Securities and Exchange Board of India (Share Based Employee Benefits and sweat equity) Regulations, 2021. Further, the exercise price was finalized by the Board Nomination and Remuneration Committee in concurrence with the Board based on an independent valuerâs report. During the year ended March 31, 2025, the Company has granted options under the ESOS scheme in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and sweat equity) Regulations, 2021 and is set out below.

The estimated fair value is computed on the basis of Black-Scholes option for Grant (2024) issued during the year ended March 31, 2025. 3,198,284 options (previous year: 2,950,816) are vested during the year ended March 31, 2025 and =? 35,007 lakhs (previous year: ^ 16,476 lakhs) was realised by exercise of options (including share application money pending allotment)

The company follows intrinsic value method and hence there was no charge in the Revenue Accounts and Profit and Loss Account for option granted.

The weighted average price of options exercised during the year ended March 31, 2025 is ^ 1,152.44 (previous year: ^ 1055.30.)

The Company instituted the ESUS-23 pursuant to the resolutions passed by our Board and Shareholders on April 18, 2023 and July 6, 2023, respectively. The Company had granted Stock units to employees in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and sweat equity) Regulations, 2021. Pursuant to the ESUS-23, the maximum number of units granted to any eligible employee shall not exceed 20,000 units in any financial year and the aggregate of units granted to the eligible employees under the ESUS-23 was capped at 5,000,000 equity shares of face value of ^10 each. Further, the exercise price for units is ^ 10.

The estimated fair value is computed on the basis of Black-Scholes option model for ESUS-23 Units (2024) issued during the year ended March 31, 2025. None of the stock units granted under the ESUS-23 have vested during the year ended March 31, 2025.

The Company follows an intrinsic value method and hence difference between the fair value as determined by the Board of Directors at the time of Grant and exercise price of ^ 10.00 is charged to the Revenue Accounts and Profit and Loss Account over the vesting period.

C. Had the Company followed the fair value method for valuing its options and units for the year ended, the charge to the Revenue Accounts and Profit and Loss Account would have been higher by ^ 7,781 lakhs (previous year ^ 11,187 lakhs) and profit after tax would have been lower by ^ 5,876 lakhs (previous year ^ 8,415 lakhs). Consequently, the Companyâs basic and diluted earnings per share would have been ^ 49.55 (previous year ^ 37.31) and ^ 49.07 (previous year ^ 37.01) respectively.

5.2 Other disclosures

5.2.1 Basis used by the Actuary for determining provision required for IBNR/IBNER

IBNR (including IBNER) liability as of March 31, 2025 for all lines of business has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDAI from time to time and the applicable provisions of the Guidance Note 21 issued by the Institute of Actuaries of India.

Pursuant to IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulation 2024, claim reserves are determined as the aggregate amount of Outstanding Claim Reserve and Incurred but Not Reported (IBNR) claim reserve for 28 stipulated lines of business.

Pursuant to Actuarial Practice Standard (APS) 33 issued by Institute of Actuaries of India (IAI) which is mandatory and effective from December 1, 2017, the peer review of statutory valuation of liabilities for March 31, 2025 has been carried out by an independent actuary.

5.2.2 Provision for Free Look period

The free look reserves against the free look cancellations is the amount determined which is required over and above the existing technical reserve amounts. For the policies where risk has started and a loss has not occurred, no existing provision covers the residual balance arising out of the earned portion of the premium if the policy is cancelled and therefore, free look reserve is created. Provision for free look reserve is calculated separately for Health Benefit, Health Indemnity and PA segments. This provision is determined using 30-day cancellation rate over the 30 days exposure for the new policies booked. The provision for Free Look period ^ 5 Lakhs (previous year: ^ 3 Lakhs) is duly certified by the Appointed Actuary.

5.2.3 Contribution to Terrorism Pool

The Company in accordance with the requirements of IRDAI has participated in contributing to the Terrorism Pool. This pool is managed by the General Insurance Corporation of India (âGICâ). Amounts collected as terrorism premium are ceded at 100% of the terrorism premium collected to the Terrorism Pool, subject to conditions and an overall limit of ^ 200,000 lakhs.

I n accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the Companyâs share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on intimation / confirmation received from GIC. Accordingly, reinsurance accepted, on account of the terrorism pool has been recorded only up to December 31, 2024 (previous period: December 31, 2023) as per the last confirmation received. The share of investment income for the year ended March 31, 2025 (Previous period: March 31, 2024) includes income accounted on estimate basis for Q4 FY 2024-25 (Previous period Q4 FY 2023-24).

5.2.4 India Nuclear Insurance Pool

In view of the passage of the Civil Liability for Nuclear Damage Act, 2010, GIC Re as Indian Reinsurer initiated the formation of the India Nuclear Insurance Pool (INIP) along with other domestic non-life insurance companies by pooling the capacity to provide insurance covers for nuclear risks. INIP is an unregistered reinsurance arrangement among its members i.e. capacity providers without any legal entity. GIC Re and 11 other non-life insurance companies are Founder Members with their collective capacity of =? 150,000 lakhs. GIC Re is also appointed as the Pool Manager of the INIP. The business underwritten by the INIP will be retroceded to all the Member Companies including GIC Re in proportion of their capacity collated. Out of the total capacity of ^ 150,000 lakhs of the INIP, the capacity provided by the Company is ^ 10,000 lakhs. The Company has recorded its share of the premium retrocession based on statement / information received up to March 31, 2024 (previous period: September 30, 2023) and investment income up to March 31, 2024 (previous period: March 31, 2023). The share of investment income and premium retrocession for the year ended March 31, 2025 (Previous period: March 31, 2024) has been recognized on an estimate basis.

5.2.5 Marine Cargo Pool

The Insurance Industry in India under the directive of Ministry of Finance and IRDAI, has pooled their net capacity to form a national marine cargo pool. The Pool, being managed by GIC Re, is for essential commodities from restrictive Territories. The coverage under the pool is on named peril basis and restrictive. The Pool came in effect from June 1, 2022. The Pool capacity is ^ 48,500 lakhs which has been committed by the Indian Insurance Industry which includes GIC Re, four PSUs and sixteen Private Sector Insurance Companies. The Company has committed a capacity of ^ 3,000 lakhs per incidence per year (6.18% share of the Pool).

The cessions to the pool would be 100% after the obligatory cession, in accordance with terms of the agreement. GIC retrocedes to the Company, premiums to the extent Companyâs share in risks which is recorded as reinsurance accepted. The Company has recorded its share of the premium retrocession based on statement / information received up to September 30, 2024 (previous period: September 30, 2023)

5.2.6 Interest, Rent and Dividend income

I nterest, Dividend & Rent income is net of interest expense of ^ NIL (previous year: ^ NIL) on account of REPO transactions.

5.2.7 Re-insurance accepted

The results of reinsurance accepted are accounted as per last available statement of accounts / confirmation from reinsurers.

5.2.8 Contribution to Hit and Run Compensation Account (erstwhile Solatium fund)

A Motor Vehicle Accident Fund (MVA Fund) has been created under Sec 164 B of the Motor Vehicle Act read with Central Motor Vehicles (Motor Vehicle Accident Fund) Rules, 2022 (âMVAF Rulesâ). As per the MVAF Rules, the MVA fund comprises of three accounts namely; Account for insured Vehicle, Account for uninsured vehicle and Hit & Run Compensation Amount and is administered by a Trust established under the Rules.

A. Hit and Run Compensation Account

As per MVAF Rules, the Hit & Run Compensation Account shall be credited with (a) the current balance under Solatium Scheme, 1989 as on date of the commencement of these rules, and (b) such percentage of total third-party premium collected by insurance companies carrying business of motor insurance in India by the general insurance as specified by the trust.

During the financial year, Company has paid contribution 0.1% of motor TP premium for FY 2023-24 of ^ 489 lakhs (previous period : ^ Nil) towards MVAF trust. Also Company has provided 0.1% of motor TP premium for FY 2024-25 for amounting to ^ 544 (previous period : ^ Nil) and additional 0.1% of for FY 2023-24 of ^ 489 lakhs (previous period : ^ Nil).

B. Account for Insured Vehicle

I n accordance with the MVAF Rules and advise from the trust, during the year the Company has made initial contribution ^ 4,431 lakhs towards Account for Insured Vehicle and disclosed the same under âSundry advance and Depositâ in Schedule 12. As on 31 March 2025, this account is yet to be made operational.

5.2.9 Environment Relief Fund

During the year ended, an amount of ^104 lakhs (previous period: ^ 71 lakhs) was collected towards Environment Relief Fund for public liability policies and an amount of ^ 73 lakhs (previous period: =? 69 lakhs) has been transferred to âUnited India Insurance Company Limited, Environment Fund Accountâ as per Notification of Environment Relief Fund (ERF) scheme under the public liability Insurance Act, 1991 as amended. The balance amount of ^ 36 lakhs (previous year: ^ 5 lakhs) has been disclosed under the head current liabilities in schedule 13.

5.2.10 Leases

In respect of premises taken on operating lease, the lease agreements are generally mutually renewable / cancelable by the lessor / lessee.

5.2.12 Segmental reporting

For segment reporting for the year ended & as at March 31, 2025 refer Annexure 2(a) and for the year ended & as at March 31, 2024 refer Annexure 2(b).

Mar 31, 2024

(2) I ncludes disputed refund / demand (including interest and penalty) of '' 4,357,261 thousand (previous year: '' 3,959,501 thousand) from Service Tax Authorities / Goods & Service Tax Authorities / Jammu and Kashmir Sales Tax, the appeals of which are pending / in the process of being filed before the appropriate Authorities. Further, '' 98,864 thousand (previous year: '' 176,390 thousand) has been paid at the time of filing CESTAT/Commissioner Appeal as per the provisions of the Finance Act, 1994/ GST Act

(3) During the year the Company has received an Order along with Notice of Demand dated May 29, 2023 for FY 2014-15 (A.Y. 2015-16) for '' 941,396 thousand (including interest) on account of denial of exemptions (for interest, dividend income and long-term capital gains) claimed under Sections 10 of the Income Tax Act, 1961. The same has been included in contingent liability. The Company has filed an appeal with the Commissioner of Income Tax (Appeal) against the said Order on June 27, 2023. The matter relates to an industry wide issue of claiming exemption under Section 10 by insurance companies and is not specific to the practices of the Company.

(5) Excludes, payment of '' 1,041,319 thousand under protest pursuant to a GST proceeding on account of alleged ineligible input tax credit claim and applicability of GST on salvage adjusted on motor claims settled during the period from July 2017 to March 2022. The Company has been advised that its tax position on both the matters is legally valid and that the Company should not be liable to pay the said amounts. Accordingly, the Company has treated the amount paid as deposit under âAdvances and Other Assets" as at March 31, 2024. Further, the Company will file refund for these amounts in due course.

(6) Excludes, GST of '' 500,000 thousand deposited under protest during an ongoing proceeding evaluating Input Tax Credit entitlement on certain marketing expenses for the period from July 2017. The Company has not received a Show Cause Notice in the matter; however, the Company believes that the adopted tax position is legally tenable. Accordingly, the Company has treated the amount paid as deposit under âAdvances and Other Assets" as on March 31, 2024.

5.1.2 The assets of the Company are free from all encumbrances except for fixed deposits of '' 7,250 thousand (previous year: '' 8,885 thousand) (Included in short term deposit account in Schedule - 11) for issuing bank guarantees and items included in Note 5.1.1 above.

5.1.3 Capital Commitments

Estimated amount of commitment pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is '' 496,059 thousand (previous year: '' 770,489 thousand).

5.1.4 Commitment in respect of loans is '' NIL (previous year: '' NIL) and investments is '' 940,369 thousand (previous year: '' 1,134,770 thousand).

Claims settled and remaining unpaid for more than six months is '' Nil (previous year: '' NIL).

Claims where the claim payment period exceeds four years:

In this context, the following claims have been valued on the basis of a contractually defined benefit amount payable in monthly installments.

5.1.9 (A) Investments

Value of contracts in relation to investments for:

â¢ Purchases where deliveries are pending '' 58,460 thousand (previous year: '' NIL); and

â¢ Sales where payments are due is '' NIL (previous year: '' Nil ).

Historical cost of investments that are valued on fair value basis is '' 80,593,627 thousand (previous year: '' 73,823,417 thousand).

All investments are made in accordance with Insurance Act, 1938 and Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016 and are performing investments. The policy holders funds have not been directly or indirectly invested outside India.

(B) Allocation of investment income

Investment income which is directly identifiable is allocated on actuals to revenue account(s) and profit and loss account as applicable. Investment income which is not directly identifiable has been allocated on the basis of the ratio of average policyholder''s investments to average shareholder''s investments, average being the balance at the beginning of the year and at the end of the reporting period. Investment income on Investments of Unclaimed amount of policyholders is recognized as liability under Schedule 13 -Unclaimed Amount of Policyholders.

5.1.10 Allocation of expenses

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

â¢ Expenses pertaining to Support Group and any other expenses, which are not directly allocable, are apportioned on the basis of net written premium on a Company level.

(B) Defined benefit plan Gratuity

Reconciliation of opening and closing balance of the present value of the defined benefit obligation for gratuity benefits of the Company is given below:

Accrued Leave

Long Term Performance Pay

The Company has schemes for Long Term Performance incentive plan. The plan is a discretionary deferred compensation plan with a vesting period of three years. The Company has determined the liability on the basis of Actuarial valuation.

5.1.12 Remuneration to Managerial and Key Management Persons Qualitative Disclosure

A. I nformation relating to the composition and mandate of the Nomination and Remuneration Committee.

Composition: In terms of provisions of the Act, Listing Regulations and IRDAI CG guidelines, the Board Nomination and Remuneration Committee comprises of four members out of which three (3) are Non-executive, Independent Directors and one is Non-executive Non-Independent Director. The Board Nomination and Remuneration Committee is chaired by Mr. Uday Chitale, Non-executive, Independent Director of the Company. The composition of the Board Nomination and Remuneration Committee is given below -

Mr. Uday Chitale, Chairperson, Non-executive, Independent Director Mrs. Lalita D. Gupte, Non-executive, Independent Director Mr. Ashvin Parekh, Non-executive, Independent Director Mr. Sandeep Batra, Non-executive, Non-Independent Director

Mandate of the Nomination and Remuneration Committee:

(i) To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.

(ii) To consider and approve employee stock option schemes and to administer and supervise the same.

(iii) Approval of the policy for and quantum of bonus/long term performance pay (LTPP) payable to the employees.

(iv) To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal, and formulate a criteria for evaluation of every director''s performance.

(v) To consider whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

(vi) To approve the compensation programme and to ensure that remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

(vii) To ensure that the proposed appointments/ re-appointments of key managerial personnel or directors are in conformity with the Board approved policy.

(viii) To recommend re-constitution of Board Constituted Committees to the Board.

(ix) To devise a policy on diversity of the Board.

(x) To recommend to the Board all remuneration, in whatever form, payable to senior management.

(xi) To carry out any other function, if any, as prescribed in the terms of reference of the Board Nomination and Remuneration Committee and any other terms of reference as may be decided by the Board and/or specified/provided under the Companies Act, 2013 or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, or by any other regulatory authority.

B. Information relating to the design and structure of remuneration policy and the key features and objective

of remuneration policy.

1. Key features and objectives of remuneration policy

The Company has under the guidance of the Board and the Board Nomination and Remuneration Committee (âBNRC/ Committee"), followed compensation practices intended to drive meritocracy and fairness.

a. Effective governance of compensation:

b. Alignment of compensation philosophy with prudent risk taking:

The Company seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels and no guaranteed bonuses. Compensation is sought to be aligned to both financial and non-financial indicators of performance including aspects like risk management and customer service. In addition, the Company has an employee stock option scheme aimed at aligning compensation to long term performance through stock option grants that vest over a period of time to middle and senior management and Whole-time Directors. Compensation to staff in financial and risk control functions is independent of the business areas they oversee and depends on their performance assessment.

2. Whether the Remuneration Committee reviewed the firm''s remuneration policy during the past year, and if so, an overview of any changes that were made.

The Company''s Remuneration Policy was reviewed by the BNRC and the Board at their meeting held on April 18, 2023. There were no changes made in the Remuneration Policy.

3. Discussion of how the Company ensures that risk and compliance employees are remunerated independently of the businesses they oversee.

C. Description of the ways in which current and future risks are taken into account in the remuneration policy

1. Overview of the key risks that the Company takes into account while implementing remuneration measures.

The Board approves the Risk Management Framework of the Company. The business activities of the Company are undertaken within this framework to achieve the financial plan. The Risk Management Framework includes the Company''s risk appetite, limits framework and policies and procedures governing various types of risk. KPIs of Whole-time Directors as well as employees, incorporate relevant risk management related aspects. For example, in addition to performance targets in areas such as growth and profits, performance indicators include aspects such as combined ratio and compliance. The BNRC takes into consideration all the above aspects while assessing organisational and individual performance and making compensation related recommendations to the Board.

2. Overview of the nature and type of key measures used to take account of these risks, including risk difficult to measure.

The annual performance targets and performance evaluation incorporate both qualitative and quantitative aspects including combined ratio, reserving and refinement/ improvement of the risk management framework.

3. Discussion of the ways in which these measures affect remuneration.

4. Discussion of how the nature and type of these measures have changed over the past year and reasons for the changes, as well as the impact of changes on remuneration.

D. Description of the ways in which the Company seeks to link performance during a performance measurement period with levels of remuneration

1. Overview of main performance metrics for the Company, top level business lines and individuals.

The main performance metrics includes business growth, market share, profits, strategic goals for future, risk metrics (such as combined ratio), compliance with regulatory norms, refinement of risk management processes and customer service. The specific metrics and weightages for various metrics vary with the role and level of the individual.

2. Discussion of how amounts of individual remuneration are linked to the Company-wide and individual performance.

3. Discussion of the measures the Company will in general implement to adjust remuneration in the event that performance metrics are weak, including the Company''s criteria for determining âweak'' performance metrics.

The Company''s Compensation Policy outlines the measures which the Company will implement in the event of a reasonable evidence of deterioration in financial performance. In case such an event occurs in the manner outlined in the policy, the BNRC may decide to apply malus/ clawback on none, part or all of the unvested deferred variable compensation.

5.1.13 (A) Share Capital

During the year, the Company has allotted 1,560,192 equity shares (previous year: 233,675 equity shares) under ESOS raising '' 1,647,567 thousand (previous year: '' 200,709 thousand).

During the year ended, the Company has not made any preferential allotment (previous year: '' NIL).

(B) Share Application

At March 31, 2024, the Company has '' 7,016 thousand share application money under ESOS (previous year: '' 5,006 thousand) against which shares are yet to be allotted.

5.1.17 Ratio Analysis:

(A) For ratios at March 31, 2024 refer Annexure 1a and 1b and for March 31, 2023 refer Annexure 2a and 2b

5.1.18 Employee Stock Option Scheme (ESOS)

The Company instituted the ESOS Scheme pursuant to the resolutions passed by our Board and Shareholders on April 26, 2005 and July 22, 2005, respectively. The Company had granted Stock options to employees in compliance with the Securities and Exchange Board of India (Employee stock option scheme and employee stock purchase scheme) guidelines, 1999. Pursuant to the ESOS Scheme, no eligible employee could, in aggregate be granted in a financial year, options greater than 0.1% of the issued equity share capital of the Company and the aggregate of options granted to the eligible employees under the ESOS Scheme was capped at 8.98% of the issued capital of our Company as on the date of such grants. ESOS Scheme was further amended pursuant to the resolutions passed by the Board and Shareholders on June 9, 2017 and July 10, 2017, respectively, to approve the amendment in the ESOS Scheme for, inter alia, aligning it with the Securities and Exchange Board of India (Share Based Employee Benefits and sweat equity) Regulations, 2021. Further, the exercise price was finalized by the Board Nomination and Remuneration Committee in concurrence with the Board based on an independent valuer''s report. During the year ended March 31, 2023 and March 31, 2024, the Company has granted options under the ESOS scheme in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and sweat equity) Regulations, 2021 and is set out below.

The estimated fair value is computed on the basis of Black-Scholes option for Grant (2023) and Special ESOP (2023) issued during the year ended March 31, 2024. 2,950,816 options (previous year: 3,385,870) are vested during the year ended March 31, 2024 and '' 1,649,577 thousand (previous year: '' 205,715 thousand) was realised by exercise of options (including share application money pending allotment)

The company follows intrinsic value method and hence there was no charge in the Revenue Accounts and Profit and Loss Account. Had the Company followed the fair value method for valuing its options for the year ended, the charge to the Revenue Accounts and Profit and Loss Account would have been higher by '' 1,118,720 thousand (previous year '' 1,285,601 thousand) and profit after tax would have been lower by '' 841,501 thousand (previous year '' 962,041 thousand). Consequently, the Company''s basic and diluted earnings per share would have been '' 37.31 (previous year '' 33.25) and '' 37.08 (previous year '' 33.20) respectively.

The weighted average price of options exercised during the year ended March 31, 2024 is '' 1055.30 (previous year: '' 854.74.)

5.2 Other disclosures

5.2.1 Basis used by the Actuary for determining provision required for IBNR/IBNER

I BNR (including IBNER) liability as of March 31, 2024 for all lines of business has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDAI from time to time and the applicable provisions of the Guidance Note 21 issued by the Institute of Actuaries of India.

Pursuant to IRDAI regulation of Asset, Liabilities, and Solvency margin of General Insurance Business Regulations 2016 (IRDAI/Reg/7/119/2016 dated April 7, 2016); claim reserves are determined as the aggregate amount of Outstanding Claim Reserve and Incurred but Not Reported (IBNR) claim reserve for 28 stipulated lines of business.

5.2.2 Provision for Free Look period

The provision for Free Look period '' 287 thousand (previous year: '' 189 thousand) is duly certified by the Appointed Actuary.

5.2.3 Contribution to Terrorism Pool

The Company in accordance with the requirements of IRDAI has participated in contributing to the Terrorism Pool. This pool is managed by the General Insurance Corporation of India (âGIC''). Amounts collected as terrorism premium are ceded at 100% of the terrorism premium collected to the Terrorism Pool, subject to conditions and an overall limit of '' 20,000,000 thousand.

In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the Company''s share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on intimation / confirmation received from GIC. Accordingly, reinsurance accepted, on account of the terrorism pool has been recorded only up to December 31, 2023 (previous period: December 31, 2022) as per the last confirmation received. The share of investment income for the year ended March 31, 2024 (Previous period: March 31, 2023) includes income accounted on estimate basis for Q4 FY 2023-24 (Previous period Q4 FY 2022-23).

5.2.4 India Nuclear Insurance Pool

II other non-life insurance companies are Founder Members with their collective capacity of '' 15,000,000 thousand. GIC Re is also appointed as the Pool Manager of the INIP. The business underwritten by the INIP will be retroceded to all the Member Companies including GIC Re in proportion of their capacity collated. Out of the total capacity of '' 15,000,000 thousand of the INIP, the capacity provided by the Company is '' 1,000,000 thousand. The Company has recorded its share of the premium retrocession based on statement / information received up to September 30, 2023 (previous period: September 30, 2022) and investment income up to March 31, 2023 (previous period: March 31, 2022). The share of investment income for the year ended March 31, 2024 (Previous period: March 31, 2023) has been recognized on an estimate basis.

5.2.5 Marine Cargo Pool

by the Indian Insurance Industry which includes GIC Re, four PSUs and sixteen Private Sector Insurance Companies. The Company has committed a capacity of '' 300,000 thousand per incidence per year (6.18% share of the Pool).

The cessions to the pool would be 100% after the obligatory cession, in accordance with terms of the agreement. GIC retrocedes to the Company, premiums to the extent Company''s share in risks which is recorded as reinsurance accepted. As on March 31, 2024, the Company has received statement for year ended March 31, 2023 and recorded the statement from the pool for its share of the premium retrocession.

5.2.6 Interest, Rent and Dividend income

Interest, Dividend & Rent income is net of interest expense of '' NIL (previous year: '' NIL) on account of REPO transactions.

5.2.7 Re-insurance accepted

The results of reinsurance accepted are accounted as per last available statement of accounts / confirmation from reinsurers.

5.2.8 Contribution to Solatium fund

In accordance with the requirements of the IRDAI circular dated March 18, 2003 and based on recommendations made at General Insurance Council meeting held on February 4, 2005 and as per letter no. HO/MTD/Solatium Fund/2010/482 dated July 26, 2010 from The New India Assurance Co. Ltd. (Scheme administrator), the Company has provided 0.1% of the total Motor TP premium of the Company towards solatium fund.

5.2.9 Environment Relief Fund

During the year ended, an amount of '' 7,074 thousand (previous period '' 6,740 thousand) was collected towards Environment Relief Fund for public liability policies and an amount of '' 6,885 thousand (previous period '' 7,311 thousand) has been transferred to âUnited India Insurance Company Limited, Environment Fund Account" as per Notification of Environment Relief Fund (ERF) scheme under the public liability Insurance Act, 1991 as amended. The balance amount of '' 544 thousand (previous year '' 354 thousand) has been disclosed under the head current liabilities in schedule 13.

5.2.10 Leases

In respect of premises taken on operating lease, the lease agreements are generally mutually renewable / cancelable by the lessor / lessee.

5.2.11 Micro, Small and Medium scale business enterprises:

As per the provisions of the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED) the Micro and Small Enterprises have been identified by the Company from the available information. Based on the information available with the Company, the balance due to micro and small enterprises as defined under the MSMED Act, 2006 is as follows:

5.2.12 Segmental reporting

For segment reporting for the year ended as at March 31, 2024 refer Annexure 3(a) and 3(b) for year ended as at March 31,2023.

(b) Premium refundable to beneficiaries/government in the case of Crop/Weather Insurance is considered for transfer to âUnclaimed Amount of Policyholders Account'' only on final determination of shown insured area and the consequential refund computation is duly confirmed by concerned government agencies.

5.2.18 CSR Expenditure

During the year ended March 31, 2024, the Company has incurred expenditure towards CSR activities which are as below;

(a) Gross amount required to be spent by the Company as per the clause 7.6 of Guidelines for Corporate Governance for Insurers in India, 2016, during the year was '' 365,932 thousand (previous year: '' 342,638 thousand).

5.2.19 Disclosures pursuant to Rule 3(1) of the Companies (Accounts) Rules, 2014:

The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or other kind of funds) to or in any other person or entity, including foreign entity (âIntermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

The Company has not received any funds from any person or entity, including foreign entity (âFunding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Company is not a large corporate as per the criteria under the SEBI circular SEBI/HO/ DDHS/-RACPODI/P/CIR/2023/172.

5.2.21 Outstanding Forward Exchange Contracts

As at March 31, 2024 there are '' NIL (previous year: '' NIL) outstanding forward exchange contracts.

5.2.22 Pending Litigations

The Company''s pending litigations comprise of claims against the Company and proceedings pending with Tax Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. (Refer Note no. 5.1.1 for details on contingent liabilities)

5.2.23 (A) The Company periodically reviews all its long term contracts to assess for any material foreseeable losses.

Based on such review, the Company has made adequate provisions for these long term contracts in the books of account as required under any applicable law / accounting standard.

(B) As at March 31, 2024, the Company did not have any outstanding long term derivative contracts (previous year: '' NIL).

5.2.24 Investor Education & Protection Fund.

For the year ended March 31, 2024, the company has transferred '' 1 thousand (previous year: '' 1 thousand) to the Investor Education & Protection Fund.

Dividend paid during the year and the amount of proposed dividend is in accordance with Section 123 of the Act.

5.2.27 During the year ended March 31, 2024, provision for impairment on investments is net of reversal of impairment amounting to '' 514,884 thousand pursuant to sale of the underlying securities / receipt against the securities (previous period: net of reversal of impairment amounting to '' 132,873 thousand).

5.2.28 The Company has initiated steps to progress towards Ind AS convergence. The Company has appointed knowledge partner who is assisting the Company in implementation of Ind AS. The Steering Committee has detailed out phase wise approach for implementation and is in process of onboarding technology partner to assist in Ind AS convergence .

5.2.29 On March 20, 2024 IRDAI has notified eight principle-based consolidated regulations, covering pivotal domains such as safeguarding of policyholders'' interests, rural and social sector and motor third party obligations, Bima Sugam-electronic insurance marketplace, insurance products and operation of foreign reinsurance branches, as well as aspects of registration, capital, actuarial, finance, investment and corporate governance (âRegulatory revamp"), replacing 34 earlier regulations that currently govern these domains.

The key regulations impacting the financial statements and its disclosures are effective from 1^st April 2024 and will apply to financial statements drawn for periods that end after the said date. While the Regulatory revamp does not impact these financial statements. The company is in the process of studying and making suitable changes in its practices, policies and procedures including financial reporting and governance.

5.2.30 The Company has implemented a framework to identify relevant applications from the overall IT universe as âBooks of account" as per the Companies Act 2013. The Company''s books of account maintained in the electronic mode comply with the requirements to the Companies Act 2013, read with relevant rules and notifications, except:

- The Company follows a specific procedure for direct database changes in a controlled environment which includes logging of changes into a ticketing approval tool with an integrated approval process. This tool records all the specific details regarding audit trail requirements for capturing timing, the executor and the details of the change. Further, this information was available for the entire fiscal year. In respect of Applications used for maintenance of commission and reinsurance records, the Company has implemented logs at the application level to record audit trail (edit logs) of transactions directly impacting the database from the backend, starting March 15, 2024.

- The Company has discontinued one of the policy and claim administration applications (used for maintenance of policy and claim records of business demerged from Bharti Axa General Insurance Company Limited and forming part of the Company) on October 31, 2023 and all open transactions have been migrated to its other policy and claim administration applications. As at March 31, 2024, access to this specific application and its database is no longer available to the Company to demonstrate the audit trail feature in a live environment.

Mar 31, 2022

5.1.1 Contingent liabilities

('' in 000''s)
Particulars	At	At
	March 31, 2022	March 31, 2021
Partly-paid up investments	-	-
Claims, other than those under policies, not acknowledged as debt	-	-
Underwriting commitments outstanding	NA	NA
Guarantees given by or on behalf of the Company	-	-
Statutory demands/liabilities in dispute, not provided for (Refer note-1 & 2 below)	8,736,799	8,305,412
Reinsurance obligations to the extent not provided for in accounts	-	-
Others : (Refer note-3 below)	52,668	49,016

Note: (1) The Company has disputed the demand raised by Income Tax Authorities of '' 290,327 thousand (previous year: '' 290,327 thousand), the appeals of which are pending before the appropriate Authorities.

This excludes,

a) Assessment Years 2006-07 in respect of which the Company has received favourable appellate order, which are pending for effect to be given by the Assessing Authority.

b) Assessment Years 2002-03, 2003-04, 2005-06, 2007-08, 2008-09, 2009-10 and 2010-11, for which the Company has received intimation from the Income Tax Department, for appeal filed with High Court, against favourable Appellate Orders.

(2) I ncludes disputed refund/demand (including interest and penalty) of '' 8,446,472 thousand (previous year: '' 8,015,085 thousand) from Service Tax Authorities/Goods & Service Tax Authorities/Jammu and Kashmir Sales Tax, the appeals of which are pending before the appropriate Authorities. Further, '' 173,102 thousand (previous year: '' 173,102 thousand) has been paid at the time of filing CESTAT appeal as per the provisions of the Finance Act, 1994.

(3)	Others include:	('' in 000''s)
	Particulars	At At March 31, 2022 March 31, 2021
Relating to penalty/penal interest towards non-meeting operational guidelines (OG) of Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme.		12,500 12,500
Relating to property tax (including interest)		40,168 36,516
	Total	52,668 49,016

(4) Excludes during the year ended March 31,2022, the Company has paid '' 650,000 thousand under protest and agreed to pay '' 400,000 thousand under protest, pursuant to a GST proceeding on account of alleged ineligible input tax credit claim and applicability of GST on salvage adjusted on motor claims settled during the period from July 2017 to December 2021. The Company has been advised that its tax position on both the matters is legally valid and that the Company should not be liable to pay the said amounts. Accordingly, the Company has treated the amount already paid as deposit under "Advances and Other Assets" as at March 31,2022. Further, the Company will file refund for these amounts in due course.

5.1.2 The assets of the Company are free from all encumbrances except for fixed deposits of '' 8,885 thousand (previous year: '' 7,750 thousand) (Included in short term deposit account in Schedule - 11) for issuing bank guarantees.

5.1.3 Capital Commitments

Estimated amount of commitment pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is '' 534,073 thousand (previous year: '' 274,482 thousand).

5.1.4 Commitment in respect of loans is '' NIL (previous year: '' NIL) and investments is '' 1,508,924 thousand (previous year: '' 445,477 thousand).

Claims settled and remaining unpaid for more than six months is '' NIL (previous year: '' NIL).

Claims where the claim payment period exceeds four years:

In this context, the following claims have been valued on the basis of a contractually defined benefit amount payable in monthly installments.

Value of contracts in relation to investments for:

- Purchases where deliveries are pending '' NIL (previous year: '' NIL); and

- Sales where payments are due '' 216,760 thousand (previous year: '' 172,217 thousand).

Historical cost of investments that are valued on fair value basis is '' 59,533,575 thousand (previous year: '' 42,424,765 thousand).

All investments are made in accordance with Insurance Act, 1938 and Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016 and are performing investments.

(B) Allocation of investment income

Investment income which is directly identifiable is allocated on actuals to Revenue Account(s) and Profit and Loss Account as applicable. Investment income which is not directly identifiable has been allocated on the basis of the ratio of average policyholder''s investments to average shareholder''s investments, average being the balance at the beginning of the year and at the end of the reporting year.

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of segment-wise policyholders funds.

5.1.10 Allocation of expenses

Allocation/apportionment of Operating Expenses is based on the Organisational Structure of the Company comprising of Business, Service and Support Groups. Business comprises of Wholesale Business Group, Retail Business Group (including Sub-Groups) and Government Business Group. Expenses incurred by Business Group are direct in nature. Service Group comprises of Customer Service Group which consists of Underwriting and Claims Group, created based on product segments. Support Group consists of Investments, Operations, Legal, Finance and Accounts, Reinsurance, Technology etc. Expenses incurred by Service and Support Groups are indirect in nature.

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

- Direct expenses pertaining to Business Group that are directly identifiable to a product segment are allocated on actuals and other direct expenses are apportioned in proportion to the net written premium of the product within the Business Group. However, in case of retail business group, the other expenses of its sub-group are apportioned based on the net written premium contributed by the respective sub group;

- Expenses pertaining to Service Group are apportioned directly to the product to which it pertains. In case of multiple products, expenses are apportioned in proportion to the net written premium of the multiple products;

- Expenses pertaining to Support Group and any other expenses, which are not directly allocable, are apportioned on the basis of net written premium in each business class.

In accordance with the IRDAI (Expenses of Management of Insurers transacting General or Health Insurance Business) Regulations, 2016, operating expenses in excess of segmental limits of '' 1,162,054 thousand in Health - Retail (previous year: '' 503,921 thousand), '' NIL in Miscellaneous - Retail (previous year: '' 26,631 thousand) and '' 6,534,870 thousand in Motor (previous year: '' 3,826,888 thousand) is reported as income under Revenue Account under separate sub-line item to Others as "Contribution from Shareholders Funds towards Excess EOM" and reported as allowable expenses under Other Expenses in Profit & Loss Account under separate sub-line item as "Contribution to Policyholders Funds towards Excess EOM".

(B) Defined benefit plan Gratuity

Note: Provision towards gratuity, leave accrued and Long Term Performance Pay are determined actuarially on an overall basis and accordingly have not been considered for the above disclosures. Additionally, the KMP''s based on entitlements are granted options pursuant to Company''s Employees Stock Option Scheme and ICICI Bank''s Employees Stock Option Scheme.

5.1.13 (A) Share Capital

During the year the Company has allotted 540,730 equity shares (previous year: 128,240 equity shares) under ESOS raising '' 420,322 thousand (previous year: '' 98,923 thousand). The Company has also issued the Consideration shares in accordance with the Scheme of Demerger as explained in note 5.2.26

During the year the Company has not made any preferential allotment (previous year: '' NIL).

(B) Share Application

At March 31, 2022 the Company has not received share application money under ESOS (previous year: '' 3,261 thousand) against which shares are yet to be allotted.

5.1.18 Employee Stock Option Scheme (ESOS)

The Company instituted the ESOS Scheme pursuant to the resolutions passed by our Board and Shareholders on April 26, 2005 and July 22, 2005, respectively. The Company had granted Stock options to employees in compliance with the Securities and Exchange Board of India (Employee stock option scheme and employee stock purchase scheme) guidelines, 1999. Pursuant to the ESOS Scheme, no eligible employee could, in aggregate be granted in a financial year, options greater than 0.1% of the issued equity share capital of the Company and the aggregate of options granted to the eligible employees under the ESOS Scheme was capped at 5% of the issued capital of our Company as on the date of such grants. ESOS Scheme was further amended pursuant to the resolutions passed by the Board and Shareholders on June 9, 2017 and July 10, 2017, respectively, to approve the amendment in the ESOS Scheme for, inter alia, aligning it with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Further, the exercise price was finalised by the Board Nomination and Remuneration Committee in concurrence with the Board based on an independent valuer''s report. During the year ended March 31,2021 and March 31,2022, the Company has granted options under the ESOS scheme in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and is set out below.

The estimated fair value is computed on the basis of Black-Scholes option for Grant (2021) and Integration Grant (2021) issued during the year ended March 31, 2022. 2,178,950 options (previous year: 987,780) are vested during the year ended March 31,2022 and '' 420,322 thousand (previous year: '' 98,923 thousand) was realised by exercise of options.

The Company follows intrinsic value method and hence there was no charge in the Revenue Accounts and Profit and Loss Account. Had the Company followed the fair value method for valuing its options for the year ended, the charge to the Revenue Accounts and Profit and Loss Account would have been higher by '' 981,276 thousand (previous year '' 760,185 thousand) and profit after tax would have been lower by '' 734,308 thousand (previous year '' 677,585 thousand). Consequently, the Company''s basic and diluted earnings per share would have been '' 24.41 (previous year '' 30.92) and '' 24.33 (previous year '' 30.79) respectively.

The weighted average price of options exercised during the year ended March 31, 2022 is '' 775.6 (previous year: '' 780.1).

5.2 Other disclosures5.2.1 Basis used by the Actuary for determining provision required for IBNR/IBNER

I BNR (including IBNER) liability as of March 31, 2022 for all lines of business has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDAI from time to time and the applicable provisions of the Guidance Note 21 issued by the Institute of Actuaries of India.

Pursuant to Actuarial Practice Standard (APS) 33 issued by Institute of Actuaries of India (IAI) which is mandatory and effective from December 1, 2017, the peer review of statutory valuation of liabilities for March 31,2022 has been carried out by an independent actuary.

5.2.2 Provision for Free Look period

The provision for Free Look period '' 31 thousand (previous year: '' 265 thousand) is duly certified by the Appointed Actuary.

5.2.3 Contribution to Terrorism Pool

The Company in accordance with the requirements of IRDAI has participated in contributing to the Terrorism Pool. This pool is managed by the General Insurance Corporation of India (GIC). Amounts collected as terrorism premium are ceded at 100% of the terrorism premium collected to the Terrorism Pool, subject to conditions and an overall limit of '' 20 billion.

In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the Company''s share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on intimation/confirmation received from GIC. Accordingly, reinsurance accepted, on account of the terrorism pool has been recorded only up to December 31, 2021 (previous period: December 31, 2020) as per the last confirmation received. The share of investment income for the quarter ended March 31,2022 (Previous period: March 31,2021) has been recognised on an estimate basis.

5.2.4 India Nuclear Insurance Pool

II other non-life insurance companies are Founder Members with their collective capacity of '' 15,000,000 thousand. GIC Re is also appointed as the Pool Manager of the INIP. The business underwritten by the INIP will be retroceded to all the Member Companies including GIC Re in proportion of their capacity collated. Out of the total capacity of '' 15,000,000 thousand of the INIP, the capacity provided by the Company is '' 1,000,000 thousand. The Company has recorded its share of the premium retrocession based on statement/information received upto September 30, 2021 (previous period: September 30, 2020) and investment income upto March 31,2021 (previous period: March 31,2020). The share of investment income for the quarter ended March 31,2022 (previous period: March 31, 2021) has been recognised on an estimate basis.

5.2.5 Interest, Rent and Dividend income

I nterest, Dividend & Rent income is net of interest expense of '' NIL (previous year: '' NIL) on account of REPO transactions.

5.2.6 Re-insurance accepted

The results of reinsurance accepted are accounted as per last available statement of accounts/confirmation from reinsurers.

5.2.7 Contribution to Solatium fund

5.2.8 Environment Relief Fund

During the year, an amount of '' 6,466 thousand (previous year '' 5,790 thousand) was collected towards Environment Relief Fund for public liability policies and an amount of '' 6,404 thousand (previous year '' 5,205 thousand) has been transferred to "United India Insurance Company Limited, Environment Fund Account" as per Notification of Environment Relief Fund (ERF) scheme under the Public Liability Insurance Act, 1991 as amended. The balance amount of '' 925 thousand (previous year '' 863 thousand) has been disclosed under the head current liabilities in schedule 13.

5.2.9 Leases

In respect of premises taken on operating lease, the lease agreements are generally mutually renewable/ cancelable by the lessor/lessee.

Non-Cancelable operating lease

5.2.10 Micro, Small and Medium scale business enterprises:

The Company pursuant to the approval received from Insurance Regulatory and Development Authority of India ("IRDAI") vide its letter dated July 7, 2021 has exercised Call Option and redeemed the Subordinated debenture in full on July 28, 2021 for its ''1/2016-2017'' series amounting to '' 5,250,125 thousand including final interest due of '' 400,125 thousand.

(D) Debenture Redemption Reserve

The Company had created Debenture Redemption Reserve (DRR) on a straight-line basis. Pursuant to amendment vide Ministry of Corporate Affairs notification no. G.S.R. 574(E) dated August 16, 2019 of Companies (Share Capital and Debenture) Rules, 2014, the Company is not required to create any additional DRR.

In view of Note 5.2.18 (D) above, the Company has transferred the existing DRR of '' 277,144 thousand to General Reserves.

5.2.19 Outstanding Forward Exchange Contracts

As at March 31,2022 there are no (previous year: '' NIL) outstanding forward exchange contracts.

5.2.20 Pending Litigations

5.2.21 (A) The Company periodically reviews all its long term contracts to assess for any material foreseeable

losses. Based on such review, the Company has made adequate provisions for these long term contracts in the books of account as required under any applicable law/accounting standard.

(B) As at March 31, 2022, the Company did not have any outstanding long term derivative contracts (previous year: '' NIL).

5.2.22 Investor Education & Protection Fund

For the year ended March 31, 2022, the Company has transferred '' NIL (previous year: '' NIL) to the Investor Education & Protection Fund.

5.2.25 The Company has used the principles of prudence in applying judgements, estimates and assumptions to assess and provide for the impact of the COVID-19 pandemic on the financial statements based on internal and external sources of information. However, due to the uncertainties associated with the pandemic, the actual impact may not be in line with the estimates as of the date of approval of the financial statements. The Company will continue to closely monitor any changes to the estimates basis future economic conditions. Further, the impact assessment done by the Company does not indicate any adverse impact on its ability to continue as a going concern.

5.2.26 Demerger of the General Insurance Business (Demerged Undertaking) of BHARTI AXA GENERAL INSURANCE COMPANY LIMITED ("Bharti AXA") with the Company.

As stated in Note 2 above the Scheme has become effective from September 8, 2021 with Appointed Date of April 1, 2020.

In accordance with the Scheme, the Demerger has been accounted using the "Pooling of Interest Method" as prescribed in Accounting Standard 14 (AS 14) "Accounting for Amalgamations" at the end of the reporting period, as under;

a) All the assets, liabilities and reserves of the Demerged Undertaking have been recorded in their existing form and at their carrying amounts as at the Appointed Date of April 1, 2020 under the respective assets and liabilities accounts.

b) The consideration is to be discharged through issue of 35,756,194 equity shares to the shareholders of Bharti AXA at '' 10 per share (including Share Premium of '' 1,336.85 per share) to be allotted on the effective date. On effective date i.e. September 8, 2021, shares have been allotted to shareholders of Bharati AXA.

c) I mpact of differences in the accounting policies between the Demerged Undertaking and of the Company, to the extent related to the carrying amount as on April 1,2020 has been adjusted.

d) Profit of the Demerged Undertaking for the year ended March 31,2021 has been credited to Profit and Loss Account under Schedule 6 - Reserves and Surplus.

f) The Authorised Share Capital of the Company has increased to '' 5,500,000 thousand represented by 550,000,000 equity shares of '' 10 each, on the effective date.

g) Pursuant to the Scheme of Arrangement and Demerger, in order to meet the minimum regulatory requirement of solvency prescribed for Indian insurance companies, Bharti AXA has raised Interim Funding Amount of '' 480,000 thousand through the issuance of equity shares to Bharti (Satya) Trustees Private Limited ("Bharti Affiliate"), an affiliate of Bharti General Ventures Private Limited (the Promoter of Bharti AXA) as on June 30, 2021. As agreed between the Company, Bharti AXA and its Promoters under the transaction documentation for the demerger, the Company has paid Interim funding compensation along with interest amounting to '' 4,882 thousand during the year ended March 31,2022 which have been effected in Surplus in Profit and Loss Account in accordance with the Scheme.

h) The expenditure relating to demerger has been charged to Profit and Loss Account under ''Expenses other than those related to insurance business'' for the year ended March 31,2022 amounting to NIL (previous year: '' 414,734 thousand)

5.2.27 Code on Social Security, 2020

The Indian Parliament had approved the Code on Social Security, 2020 which could impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft Rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stake holders which are under active consideration by the Ministry. The Company will complete its evaluation once the Rules are notified and will give appropriate impact in the financial statements in the period in which the Code and related Rules becomes effective.

5.2.28 During the year ended March 31, 2022, provision for impairment on investments is net of reversal of impairment amounting to '' 438,070 thousand pursuant to sale of the underlying securities/receipt against the securities (previous year: net of reversal of impairment amounting to '' 703,075 thousand).

5.2.29 Previous year''s numbers are on standalone basis, hence are not strictly comparable with financial year ended March 31,2021. Previous year/period figures have been regrouped in the respective schedule and notes wherever necessary.

Mar 31, 2021

5.1 Statutory disclosures as required by IRDAI5.1.1 Contingent liabilities

5.1.1 Contingent liabilities		(? in 000''s)
Particulars	At March 31, 2021	At March 31, 2020
Partly-paid up investments	-	-
Claims, other than those under policies, not acknowledged as debt	-	-
Underwriting commitments outstanding	NA \|	NA
Guarantees given by or on behalf of the Company	-	-
Statutory demands/liabilities in dispute, not provided for (Refer note-1 & 2 below)	8,305,412	4,569,652
Reinsurance obligations to the extent not provided for in accounts	-	-
Others : (Refer note-3 below)	49,016	48,180

Note: (1) The Company has disputed the demand raised by Income Tax Authorities of ? 290,327 thousand (previous year: ? 290,327 thousand), the appeals of which are pending before the appropriate Authorities. This excludes Income Tax demand related to Assessment Year 2003-04, 2005-06, 2006-07 & 2008-09 in respect of which the Company has received favorable appellate order, which is pending for effect to be given by the Assessing Authority.

(2) Includes disputed refund / demand (including interest and penalty) of ? 8,015,085 thousand (previous year: ? 4,279,325 thousand) from Service Tax Authorities / Goods & Service Tax Authorities / Jammu and Kashmir Sales Tax, the appeals of which are pending before the appropriate Authorities. Further, ? 173,102 thousand has been paid at the time of filing CESTAT appeal as per the provisions of the Finance Act, 1994.

5.1.2 The assets of the Company are free from all encumbrances except for fixed deposits of ? 7,750 thousand (previous year: ? 1,500 thousand) (Included in short term deposit account in Schedule - 11) for issuing bank guarantees.

5.1.3 Capital Commitments

Estimated amount of commitment pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is ? 274,482 thousand (previous year: ? 455,421 thousand).

5.1.4 Commitment in respect of loans is ? NIL (previous year: ? NIL) and investments is ? 445,477 thousand (previous year: ? 973,076 thousand).

Claims settled and remaining unpaid for more than six months is ? NIL (previous year: ? NIL).

Claims where the claim payment period exceeds four years:

In this context, the following claims have been valued on the basis of a contractually defined benefit amount payable in monthly installments.

5.1.6 Premium

(A) All premiums net of Re-insurance are written and received in India.

(B) No premium income is recognized on varying risk pattern.

Value of contracts in relation to investments for:

- Purchases where deliveries are pending ? NIL (previous year: ? NIL); and

- Sale where payments are due ? 172,217 thousand (previous year: ? NIL).

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of segment-wise policyholders funds.

5.1.10 Allocation of expenses

Allocation / apportionment of Operating Expenses is based on the Organisational Structure of the Company comprising off Business, Service and Support Groups. Business comprises of Wholesale Business Group, Retail Business Group (including Sub Groups) and Government Business Group. Expenses incurred by Business Group are direct in nature. Service Group comprises of Customer Service Group which consists of Underwriting and Claims Group, created based on product segments. Support Group consists of Investments, Operations, Legal, Finance and Accounts, Reinsurance, Technology etc. Expenses incurred by Service and Support Groups are indirect in nature.

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

- Direct expenses pertaining to Business Group that are directly identifiable to a product segment are allocated on actuals and other direct expenses are apportioned in proportion to the net written premium of the product within the Business Group. However, in case of retail business group, the other expenses of its sub group are apportioned based on the net written premium contributed by the respective sub group;

- Expenses pertaining to Support Group and any other expenses, which are not directly allocable, are apportioned on the basis of net written premium in each business class.

In accordance with the IRDAI (Expenses of Management of Insurers transacting General or Health Insurance Business) Regulations, 2016, operating expenses in excess of segmental limits of ? 503,921 thousand in Health - Retail (previous year: ? 744,013 thousand), ? 26,631 thousand in Miscellaneous -Retail (previous year: ? NIL), ? 3,826,888 thousand in Motor (previous year: ? NIL) and ? NIL in Health -Government (previous year: ? 6,760 thousand) is reported as income under revenue account under separate sub-line item to Others as âContribution from Shareholders Funds towards Excess EOMâ and reported as allowable expenses under Other Expenses in Profit & Loss account under separate sub-line item as âContribution to Policyholders Funds towards Excess EOMâ .

(B) Defined benefit plan Gratuity

Note: Provision towards gratuity, leave accrued and Long Term Performance Pay are determined actuarially on an overall basis and accordingly have not been considered for the above disclosures. Additionally, the KMPâs based on entitlements are granted options pursuant to Companyâs Employees Stock Option Scheme and ICICI Bankâs Employees Stock Option Scheme.

5.1.13 (A) Share Capital

During the year the Company has allotted 128,240 equity shares (previous year: 156,320 equity shares) under ESOS raising ? 98,923 thousand (previous year: ? 33,020 thousand).

During the year the Company has not made any preferential allotment (previous year: ? NIL).

(B) Share Application

At March 31, 2021 the Company has received share application money under ESOS of ? 3,261 thousand (previous year: ? 2,145 thousand) against which shares are yet to be allotted.

5.1.18 Employee Stock Option Scheme (ESOS)

The Company instituted the ESOS Scheme pursuant to the resolutions passed by our Board and Shareholders on April 26, 2005 and July 22, 2005, respectively. The Company had granted Stock options to employees in compliance with the Securities and Exchange Board of India (Employee stock option scheme and employee stock purchase scheme) guidelines, 1999. Pursuant to the ESOS Scheme, no eligible employee could, in aggregate be granted in a financial year, options greater than 0.1% of the issued equity share capital of the Company and the aggregate of options granted to the eligible employees under the ESOS Scheme was capped at 5% of the issued capital of our Company as on the date of such grants. ESOS Scheme was further amended pursuant to the resolutions passed by the Board and Shareholders on June 9, 2017 and July 10, 2017, respectively, to approve the amendment in the ESOS Scheme for, inter alia, aligning it with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Further, the exercise price was finalized by the Board Nomination and Remuneration Committee in concurrence with the Board based on an independent valuerâs report. During the year ended March 31, 2020 and March 31, 2021, the Company has granted options under the ESOS scheme in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and is set out below.

The estimated fair value is computed on the basis of Black-Scholes option for Performance ESOP (2020) issued during the year ended March 31, 2021. 987,780 options (previous year: 284,010) are vested during the year ended March 31, 2021 and ? 98,923 thousand (previous year: ? 33,020 thousand) was realised by exercise of options.

The company follows intrinsic value method and hence there was no charge in the Revenue Accounts and Profit and Loss Account. Had the Company followed the fair value method for valuing its options for the year ended, the charge to the Revenue Accounts and Profit and Loss Account would have been higher by ? 760,185 thousand (previous year ? 597,308 thousand) and profit after tax would have been lower by ? 677,585 thousand (previous year ? 446,978 thousand). Consequently, the Companyâs basic and diluted earnings per share would have been ? 30.92 (previous year '' 25.29) and ? 30.79 (previous year '' 25.21) respectively.

The weighted average price of options exercised during the year ended March 31, 2021 is ? 780.1 (previous year: ? 220.7).

5.2 Other disclosures5.2.1 Basis used by the Actuary for determining provision required for IBNR/IBNER

IBNR (including IBNER) liability as of March 31, 2021 for all lines of business has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDAI from time to time and the applicable provisions of the Guidance Note 21 issued by the Institute of Actuaries of India.

5.2.2 Provision for Free Look period

The provision for Free Look period ? 265 thousand (previous year: ? 205 thousand) is duly certified by the Appointed Actuary.

5.2.3 Contribution to Terrorism Pool

In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the Companyâs share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on intimation / confirmation received from GIC. Accordingly, reinsurance accepted, on account of the terrorism pool has been recorded only up to December 31, 2020 (previous year: December 31, 2019) as per the last confirmation received. The share of investment income for the year ended March 31, 2021 (Previous year: March 31, 2020) has been recognized on an estimate basis.

5.2.4 India Nuclear Insurance Pool

In view of the passage of the Civil Liability for Nuclear Damage Act, 2010, GIC Re as Indian Reinsurer initiated the formation of the India Nuclear Insurance Pool (INIP) along with other domestic non-life insurance companies by pooling the capacity to provide insurance covers for nuclear risks. INIP is an unregistered reinsurance arrangement among its members i.e. capacity providers without any legal entity. GIC Re and 11 other non-life insurance companies are Founder Members with their collective capacity of ? 15,000,000 thousand. GIC Re is also appointed as the Pool Manager of the INIP. The business underwritten by the INIP will be retroceded to all the Member Companies including GIC Re in proportion of their capacity collated. Out of the total capacity of ? 15,000,000 thousand of the INIP, the capacity provided by the Company is ? 1,000,000 thousand. The Company has recorded its share of the premium retrocession, commission and interest income upto September 30, 2020 (previous period: September 30, 2019) as per the latest available statements. The share of investment income for the year ended March 31, 2021 (previous year: March 31, 2020) has been recognized on an estimate basis.

5.2.5 Interest, Rent and Dividend income

Interest, Dividend & Rent income is net of interest expense of ? NIL (previous year: ? 1,277 thousand) on account of REPO transactions.

5.2.6 Re-insurance accepted

The results of reinsurance accepted are accounted as per last available statement of accounts / confirmation from reinsurers.

5.2.7 Contribution to Solatium fund

5.2.8 Environment Relief

During the year, an amount of ? 5,790 thousand (previous year ? 5,458 thousand) was collected towards Environment Relief Fund for public liability policies and an amount of ? 5,205 thousand (previous year ? 5,401 thousand) has been transferred to âUnited India Insurance Company Limited, Environment Fund Accountâ as per Notification of Environment Relief Fund (ERF) scheme under the public liability Insurance Act, 1991 as amended. The balance amount of ? 863 thousand (previous year ? 278 thousand) has been disclosed under the head current liabilities in schedule 13.

5.2.9 Leases

In respect of premises taken on operating lease, the lease agreements are generally mutually renewable / cancelable by the lessor / lessee.

5.2.11 Segmental reportingPrimary reportable segments

The Companyâs primary reportable segments are business segments, which have been identified in accordance with AS 17 - Segment Reporting read with the Regulations. The income and expenses attributable to the business segments are allocated as mentioned in paragraph 5.1.9 & 5.1.10 above. Segment revenue & results have been disclosed in the Revenue accounts.

CSR Expenditure

During the year ended March 31, 2021 the Company has incurred expenditure towards CSR activities which are as below;

(a) Gross amount required to be spent by the company during the year was ? 290,096 thousand (previous year: ? 239,518 thousand).

Mar 31, 2019

1 Background

ICICI Lombard General Insurance Company Limited (''the Company'') was incorporated on October 30, 2000.

The Company obtained Regulatory approval to undertake General Insurance business on August 3, 2001 from the Insurance Regulatory and Development Authority of India (''IRDAI'') and holds a valid certificate of registration.

The equity shares of the Company are listed on BSE Limited and National Stock Exchange from September 27, 2017.

2 Basis of preparation of financial statements

The financial statements have been prepared and presented on a going concern basis in accordance with Generally Accepted Accounting Principles followed in India under the historical cost convention, unless otherwise specifically stated, on the accrual basis of accounting, and comply with the applicable accounting standards referred to in section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, and in accordance with the provisions of the Insurance Act, 1938, Insurance Laws (Amendment) Act, 2015 (to the extent notified), Insurance Regulatory and Development Authority Act, 1999, the Insurance Regulatory and Development Authority of India (Preparation of Financial Statements and Auditor''s Report of Insurance Companies Regulations), 2002 (''the Regulations'') and orders/directions prescribed by the IRDAI in this behalf, the provisions of the Companies Act, 2013 (to the extent applicable) in the manner so required and current practices prevailing within the insurance industry in India.

The management evaluates, all recently issued or revised accounting pronouncements, on an ongoing basis. The Financial Statements are presented in Indian rupees rounded off to the nearest thousand.

3 Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the balance sheet date, reported amounts of revenues and expenses for the period ended and disclosure of contingent liabilities as of the balance sheet date. The estimates and assumptions used in these financial statements are based upon management''s evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

4. Notes to accounts

4.1 Statutory disclosures as required by IRDAI

4.1.1 Contingent liabilities

Note: (1) The Company has disputed the demand raised by Income Tax Authorities of Rs.227,099 thousand (previous year: Rs.227,099 thousand), the appeals of which are pending before the appropriate Authorities. This excludes Income Tax demand related to Assessment Year 2003-04, 2005-06, 2006-07 & 2008-09 in respect of which the Company has received favorable appellate order, which is pending for effect to be given by the Assessing Authority.

(2) Includes demand (including interest and penalty) of Rs.4,078,677 thousand (previous year:Rs.3,939,449 thousand) from Service Tax Authorities/Goods & Service Tax Authorities, the appeals of which are pending before the appropriate Authorities.

(3) The Company has received a demand of Rs.45,955 thousand (previous year: Rs.45,900 thousand) from Government of Uttar Pradesh seeking refund of premium on policies issued under the RSBY scheme. The company holds outstanding claim reserves of Rs.44,071 thousand (previous year: Rs.41,400 thousand) against these RSBY Policies. The company has filed an appeal with National Grievance Redressal Committee (NGRC).

(4) I n terms of IRDAI circular no. IRDA/F&A/CIR/MISC/105/07/2018 dated July 11, 2018, Master circular no. IRDA/F&A/ CIR/MISC/20/02/2018 dated February 6, 2018 stands withdrawn and accordingly, the Company need not disclose the amount transferred to the Senior Citizens'' Welfare Fund (SCWF) as Contingent liability as part of financial statement from financial year 2018-19 onwards. In the previous year the Company has shown Rs.153,329 thousand (Including interest thereon of Rs.19,651 thousand) transferred to the Senior Citizen''s welfare fund as contingent liability.

4.1.2 The assets of the Company are free from all encumbrances except for fixed deposits of Rs.541,100 thousand (previous year: Rs.540,100 thousand) (Included in short term deposit account in Schedule - 11) for issuing bank guarantees.

4.1.3 Estimated amount of commitment pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is Rs.306,972 thousand (previous year: Rs.250,056 thousand).

4.1.4 Commitment in respect of loans is Rs. NIL (previous year: Rs. NIL) and investments is Rs. 6,932,036 thousand (previous year: Rs. 909,308 thousand).

Claims settled and remaining unpaid for more than six months is Rs. NIL (previous year: Rs. NIL).

Claims where the claim payment period exceeds four years:

In this context, the following claims have been valued on the basis of a contractually defined benefit amount payable in monthly installments.

Product Name: Personal protect

4.1.6 Premium

(A) All premiums net of Re-insurance are written and received in India.

(B) No premium income is recognized on varying risk pattern.

4.1.7 (A) Investments

Value of contracts in relation to investments for:

- Purchases where deliveries are pending Rs. 81,944 thousand (previous year: Rs. NIL); and

- Sales where payments are overdue Rs. NIL (previous year: Rs. NIL).

Historical cost of investments that are valued on fair value basis is Rs.21,651,683 thousand (previous year: Rs.25,063,263 thousand).

(B) Allocation of investment income

Investment income which is directly identifiable is allocated on actuals to revenue account(s) and profit and loss account as applicable. Investment income which is not directly identifiable has been allocated on the basis of the ratio of average policyholder''s investments to average shareholder''s investments, average being the balance at the beginning of the year and at the end of the reporting year.

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of segment-wise policyholders funds.

4.1.8 Allocation of expenses

Allocation/apportionment of Operating Expenses is based on the Organisational Structure of the Company comprising off Business, Service and Support Groups. Business comprises of Wholesale Business Group, Retail Business Group (including Sub Groups) and Government Business Group. Expenses incurred by Business Group are direct in nature. Service Group comprises of Customer Service Group which consists of Underwriting and Claims Group, created based on product segments. Support Group consists of Investments, Operations, Legal, Finance and Accounts, Reinsurance, Technology etc. Expenses incurred by Service and Support Groups are indirect in nature.

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

- Direct expenses pertaining to Business Group that are directly identifiable to a product segment are allocated on actuals and other direct expenses are apportioned in proportion to the net written premium of the product within the Business Group. However, in case of retail business group, the other expenses of its sub group are apportioned based on the net written premium contributed by the respective sub group;

- Expenses pertaining to Support Group and any other expenses, which are not directly allocable, are apportioned on the basis of net written premium in each business class.

In accordance with the IRDAI (Expenses of Management of Insurers transacting General or Health Insurance Business) Regulations, 2016, operating expenses of Rs.241,920 thousand in excess of segmental limits pertaining to Miscellaneous- Retail segment are reduced proportionately from each expenditure head and are borne by the shareholders.

4.1.9 Employee Benefit Plans

(A) Defined contribution plan

(B) Defined benefit plan Gratuity

Accrued Leave

The Company has a scheme for accrual of leave for employees, the liability for which is determined on the basis of Actuarial Valuation carried out at the year end. Assumptions stated above are applicable for accrued leaves also.

Managerial remuneration in excess of Rs.15,000 thousand, for each Managerial personnel has been charged to profit and loss account. Additionally, the Directors are granted options pursuant to Company''s Employees Stock Option Scheme and ICICI Bank''s Employees Stock Option Scheme.

(B) The details of remuneration of Key Management Persons as per guidelines issued by IRDAI vide Ref. no. IRDA/F&A/GDL/CG/100/05/2016 dated May 18, 2016 and as per the terms of appointment of Company are as under:

Note: Provision towards gratuity, leave accrued and Long Term Performance Pay are determined actuarially on an overall basis and accordingly have not been considered for the above disclosures. Additionally, the KMP''s based on entitlements are granted options pursuant to Company''s Employees Stock Option Scheme and ICICI Bank''s Employees Stock Option Scheme.

4.1.10 (A) Share Capital

During the year the Company has allotted 361,640 equity shares (previous year: 2,797,618 equity shares) under ESOP raising Rs.37,081 thousand (previous year: Rs.359,347 thousand).

During the year the Company has not made any preferential allotment (previous year Rs. NIL).

(B) Share Application

At March 31, 2019 the Company had not received any share application money (previous year: Rs. NIL) against which shares are yet to be allotted.

4.1.11 Outsourcing, business development and marketing support expenses

Expenses relating to outsourcing, business development and marketing support are:

4.1.12 Ratio Analysis:

(A) For ratios at March 31, 2019 refer Annexure 1a and 1b and for March 31, 2018 refer Annexure 2a and 2b

(B) Solvency Margin

4.1.13 Employee Stock Option Scheme (ESOS)

The Company instituted the ESOS Scheme pursuant to the resolutions passed by our Board and Shareholders on April 26, 2005 and July 22, 2005, respectively. The Company had granted Stock options to employees in compliance with the Securities and Exchange Board of India (Employee stock option scheme and employee stock purchase scheme) guidelines, 1999. Pursuant to the ESOS Scheme, no eligible employee could, in aggregate be granted in a financial year, options greater than 0.1% of the issued equity share capital of the Company and the aggregate of options granted to the eligible employees under the ESOS Scheme was capped at 5% of the issued capital of our Company as on the date of such grants. ESOS Scheme was further amended pursuant to the resolutions passed by the Board and Shareholders on June 9, 2017 and July 10, 2017, respectively, to approve the amendment in the ESOS Scheme for, inter alia, aligning it with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Further, the exercise price was finalized by the Board Nomination and Remuneration Committee in concurrence with the Board based on an independent valuer''s report. During the year ended March 31, 2019, the Company has granted options under the ESOS scheme in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and is set out below.

The estimated fair value is computed on the basis of Black- Scholes option for Performance ESOP (2018) and Special ESOP (2018) issued during the year ended March 31, 2019. No options are vested during the year ended March 31, 2019 and Rs.37,081 thousand (previous year: Rs.359,347 thousand) was realised by exercise of options.

The company follows intrinsic value method and hence there was no charge in the Revenue Accounts and Profit and Loss Account. Had the Company followed the fair value method for valuing its options for the year ended, the charge to the Revenue Accounts and Profit and Loss Account would have been higher by Rs.176,244 thousand (Previous year Rs. NIL) and profit after tax would have been lower by Rs.115,686 thousand (Previous year Rs. NIL). Consequently, the Company''s basic and diluted earnings per share would have been Rs.22.85 and Rs.22.81 respectively.

The weighted average price of options exercised during the year ended March 31, 2019 is Rs.102.5 (previous year: Rs.130.1).

5.1 Other disclosures

5.1.1 Basis used by the Actuary for determining provision required for IBNR/IBNER

IBNR (including IBNER) liability as at March 31, 2019 for all lines of business has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDAI from time to time and the applicable provisions of the Guidance Note 21 issued by the Institute of Actuaries of India.

Pursuant to Actuarial Practice (APS) 33 issued by Institute of Actuaries of India (IAI) which is mandatory and effective from December 1, 2017, the peer review of statutory valuation of liabilities for March 31, 2019 has been carried out by an independent actuary.

5.2.2 Provision for Free Look period

The provision for Free Look period Rs.336 thousand (previous year: Rs.127 thousand) is duly certified by the Appointed Actuary.

5.2.3 Contribution to Terrorism Pool

The Company in accordance with the requirements of IRDAI has participated in contributing to the Terrorism Pool. This pool is managed by the General Insurance Corporation of India (''GIC''). Amounts collected as terrorism premium are ceded at 100% of the terrorism premium collected to the Terrorism Pool, subject to conditions and an overall limit of Rs.20 billion.

In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the Company''s share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on intimation/confirmation received from GIC. Accordingly, reinsurance accepted, on account of the terrorism pool has been recorded only up to December 31, 2018 (previous year: December 31, 2017) as per the last confirmation received.

5.2.4 India Nuclear Insurance Pool

In view of the passage of the Civil Liability for Nuclear Damage Act, 2010, GIC Re as Indian Reinsurer initiated the formation of the India Nuclear Insurance Pool (INIP) along with other domestic non-life insurance companies by pooling the capacity to provide insurance covers for nuclear risks. INIP is an unregistered reinsurance arrangement among its members i.e. capacity providers without any legal entity. GIC Re and 11 other non-life insurance companies are Founder Members with their collective capacity of Rs.15,000,000 thousand. GIC Re is also appointed as the Pool Manager of the INIP The business underwritten by the INIP will be retroceded to all the Member Companies including GIC Re in proportion of their capacity collated. Out of the total capacity of Rs.15,000,000 thousand of the INIP the capacity provided by the Company is Rs.1,000,000 thousand. The Company has not received any statement of accounts for the period subsequent to April 1, 2018. The proportionate share on income for the period from the pool has been accounted on an estimated basis.

5.2.5 Interest, Rent and Dividend income

Interest, Dividend & Rent income is net of interest expense of Rs. NIL (previous year: Rs.1,755 thousand) on account of REPO transactions.

5.2.6 Re-insurance inward

The results of reinsurance inward are accounted as per last available statement of accounts/ confirmation from reinsurers.

5.2.7 Contribution to Solatium fund

I n accordance with the requirements of the IRDAI circular dated March 18, 2003 and based on recommendations made at General Insurance Council meeting held on February 4, 2005 and as per letter no. HO/MTD/Solatium Fund/2010/482 dated July 26, 2010 from The New India Assurance Co. Ltd. (Scheme administrator), the Company has provided 0.1% of the total Motor TP premium of the Company towards solatium fund.

5.2.8 Environment Relief Fund

During the year, an amount of Rs.3,871 thousand (Previous year Rs.4,056 thousand) was collected towards Environment Relief Fund for public liability policies and an amount of Rs.4,915 thousand (Previous year Rs.3,711 thousand) has been transferred to "United India Insurance Company Limited, Environment Fund Accountâ as per Notification of Environment Relief Fund (ERF) scheme under the public liability Insurance Act, 1991 as amended. The balance amount of Rs.221 thousand (Previous year Rs.1,265 thousand) has been disclosed under the head current liabilities in schedule 13.

5.2.9 Leases

In respect of premises taken on operating lease, the lease agreements are generally mutually renewable/ cancelable by the lessor/lessee.

Non Cancelable operating lease

The detail of future rentals payable are given below:

An amount of Rs.1,770 thousand (previous year: Rs.3,083 thousand) towards said lease payments has been recognised in the statement of revenue account.

5.2.10 Micro and Small scale business entities

There is no Micro, Small & Medium enterprise to which the Company owes dues, which are outstanding for more than 45 days as at March 31, 2019 (previous year: '' NIL). This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

5.2.11 Segmental reporting Primary reportable segments

The Company''s primary reportable segments are business segments, which have been identified in accordance with AS 17 - Segment Reporting read with the Regulations. The income and expenses attributable to the business segments are allocated as mentioned in paragraph 5.1.9 & 5.1.10 above. Segment revenue & results have been disclosed in the Revenue accounts.

Secondary reportable segments

There are no reportable geographical segments since the Company provides services only to customers in the Indian market or Indian interests abroad and does not distinguish any reportable regions within India.

5.2.12 Related party

Party where control exists

ICICI Bank Limited (Holding Company)

Other related parties with whom transactions have taken place during the year: Fellow Subsidiaries/Associates/Other related entities:

(b) Premium refundable to beneficiaries/government in the case of Crop/Weather Insurance is considered for transfer to ''Unclaimed Amount of Policyholders Account'' only on final determination of sown insured area and the consequential refund computation is duly confirmed by concerned government agencies.

5.2.13 During the year ended March 31, 2019 the Company has incurred expenditure towards CSR activities which are as below;

(a) Gross amount required to be spent by the company during the year was Rs.181,534 thousand (previous year: Rs.148,824 thousand).

(b) Amount spent during the year is Rs.183,691 thousand (previous year: Rs.149,645 thousand).

(C) Debenture Redemption Reserve

Pursuant to IRDAI circular no. IRDA/F&A/OFC/01/2014-15/115 dated August 4, 2017, and as required by Companies (Share Capital and Debentures) Rules, 2014, Company has started creating Debenture Redemption Reserve (DRR) from July 1, 2017 on a straight-line basis over the balance tenure. The appropriation as on March 31, 2019 on this account is Rs.242,501 thousand.

5.2.14 As at March 31, 2019 there are no (previous year: Rs. NIL) outstanding forward exchange contracts.

5.2.15 The Company''s pending litigations comprise of claims against the Company and proceedings pending with Tax Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. (Refer Note no. 5.1.1 for details on contingent liabilities)

5.2.16 (A) The Company periodically reviews all its long term contracts to assess for any material foreseeable losses. Based on such review, the Company has made adequate provisions for these long term contracts in the books of account as required under any applicable law/accounting standard.

(B) As at March 31, 2019, the Company did not have any outstanding long term derivative contracts (previous year: Rs. NIL).

5.2.17 For the year ended March 31, 2019, the company has transferred Rs.1 thousand (previous year: Rs. NIL) to the Investor Education & Protection Fund.

5.2.18 Dividend

Interim dividend appropriation for the year ended March 31, 2019 amounted to Rs.1,601,812 thousand (Previous year Rs. 818,418 thousand) including dividend distribution tax of Rs.466,626 thousand (Previous year Rs.138,430 thousand).

The Board of directors have also proposed a final dividend of Rs.1,135,775 thousand (Previous year: Rs.1,134,871 thousand) subject to requisite approvals. Dividend distribution tax on the same amounts to Rs.274,724 thousand (Previous year: Rs.233,276 thousand).

5.2.19 The Company had invested Rs.3,250,000 thousand in non-convertible debentures (NCD) of M/s Tata Sons Limited prior to year ended March 31, 2018. There had been a change in the legal status of M/s Tata Sons Limited to M/s Tata Sons Private Limited effective from August 6, 2018. The Insurance Act, 1938 as amended by the Insurance Laws (Amendment) Act, 2015, specifies that an insurer cannot invest or keep invested in any private limited company.

The company has continued to value and classify these investments as Long-term under the "Approved Investmentsâ category and allocated this investment to shareholders funds from date of change of legal status.

During the last quarter, the Company has sold NCD''s amounting to Rs.2,250,000 thousand. As at 31st March, 2019 the Company''s investment in the said NCD''s aggregated Rs.1,000,000 thousand. Subsequent to the Balance Sheet date, the Company has disposed of the remaining investment in the NCD''s of Tata Sons Private Limited.

5.2.20 (a) The Company had dues recoverable to the extent of Rs.1,027,565 thousand from certain foreign reinsurers against which the company held a provision for doubtful debts aggregating to Rs.1,002,393 thousand as of March 31, 2019. During the year ended March 31, 2019, the Company has made recovery of Rs.566,826 thousand consequent to final settlement with one of the foreign reinsurers and the balance dues amounting to Rs.460,738 thousand has been written off and the related provision has been reversed.

(b) Further the Company has made provision of Rs.402,387 thousand during the year ended March 31, 2019 on account of Mass Health receivables.

5.2.21 Other income (non-operating results) includes interest on tax refund of Rs.139,069 thousand (previous year: Rs. 80,176 thousand) awarded during the year.

5.2.22 Previous year figures have been regrouped in the respective schedule and notes wherever necessary, to conform to current year groupings. The details of changes are as under:

Mar 31, 2018

1 Background

I CICI Lombard General Insurance Company Limited (âthe Companyâ) was incorporated on October 30, 2000 as a joint venture between ICICI Bank Limited and Fairfax Financial Holdings Limited. The joint-venture agreement dated October 4, 2000 (as amended/restated from time to time) entered among Fairfax Financial Holdings and ICICI Bank was terminated pursuant to a termination agreement executed on July 3, 2017.

The Company obtained Regulatory approval to undertake General Insurance business on August 3, 2001 from the Insurance Regulatory and Development Authority of India (âIRDAIâ) and holds a valid certificate of registration.

During the year, the Company completed its Initial Public Offering (IPO) by way of an offer for sale of 86,247,187 equity shares of Rs.10 each at a price of Rs.661 per equity share, by ICICI Bank Limited, the Promoter Selling Shareholder and FAL Corporation, the Investor Selling Shareholder aggregating to Rs.57,009,391 thousand. The equity shares of the Company are listed on BSE Limited and National Stock Exchange from September 27, 2017.

2 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, unless otherwise specifically stated, on the accrual basis of accounting, and comply with the applicable accounting standards referred to in section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, and in accordance with the provisions of the Insurance Act, 1938, Insurance Laws (Amendment) Act, 2015 (to the extent notified), Insurance Regulatory and Development Authority Act, 1999, the Insurance Regulatory and Development Authority of India (Preparation of Financial Statements and Auditorâs Report of Insurance Companies Regulations), 2002 (âthe Regulationsâ) and orders/directions prescribed by the IRDAI in this behalf, the provisions of the Companies Act, 2013 (to the extent applicable) in the manner so required and current practices prevailing within the insurance industry in India.

3 Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the balance sheet date, reported amounts of revenues and expenses for the year ended and disclosure of contingent liabilities as of the balance sheet date. The estimates and assumptions used in these financial statements are based upon managementâs evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

4. Notes to accounts

4.1 Statutory disclosures as required by IRDAI

4.1.1 Contingent liabilities

Note: (1) The Company has disputed the demand raised by Income Tax Authorities of Rs.227,099 thousand (previous year: Rs.230,184 thousand), the appeals of which are pending before the appropriate Authorities. This excludes Income Tax demand related to Assessment Year 2003-04, 2005-06, 2006-07, 2008-09 & 2010-11 in respect of which the Company has received favorable appellate order, which is pending for effect to be given by the Assessing Authority.

(2) (i) The Company has disputed the demand raised by Service Tax Authorities of Rs.72,763 thousand (previous year: Rs.72,553 thousand), the appeals of which are pending before the appropriate Authorities.

(ii) The Company has received order from Goods & Service Tax Authority wherein demand (including interest and penalty) of Rs.3,866,686 thousand (previous year: Rs. NIL) has been raised on disallowance of certain input tax credits. The Company is contesting the disputed tax liability and is in the process of filing an appeal before the appropriate Authorities.

(3) The Company has received a demand of Rs.45,900 thousand from Government of Uttar Pradesh seeking refund of premium on policies issued under the RSBY scheme. The company holds outstanding claim reserves of Rs.41,400 thousands against these RSBY Policies. The company has filed an appeal with National Grievance Redressal Committee (NGRC)

(4) During the previous year, the Company has disputed the demand raised by Comprehensive Health Insurance Agency Kerala (CHIAK) of Rs.90,772 thousand, the appeal of which was pending before National Grievance Redressal Committee (NGRC). NGRC has decided the appeal against the company. Though the company has decided to contest the order, the liability on this account has been fully provided for during the year.

(5) Unclaimed amounts of Policyholderâs outstanding for a period of more than 10 years as on September 30, 2017 of Rs.153,329 thousand (Including interest thereon of Rs.19,651 thousand) (Previous year: Rs. NIL) has been transferred by the Company to the Senior Citizenâs welfare fund and shown as contingent liability in terms of IRDAI circular no. IRDA/F&A/ CIR/MISC/20/02/2018 dated February 6, 2018.

4.1.2 The assets of the Company are free from all encumbrances except for a fixed deposit of Rs.540,100 thousand (previous year: Rs. NIL) placed with Yes Bank Limited (Included in short term deposit account in Schedule - 11) for issuing bank guarantee in favour of BSE Limited as part of listing obligation.

4.1.3 Estimated amount of commitment pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is Rs.250,056 thousand (previous year: Rs.169,917 thousand).

4.1.4 Commitment in respect of loans is Rs. NIL (previous year: Rs. NIL) and investments is Rs.909,308 thousand (previous year: Rs.401,808 thousand).

4.1.5 Claims

Claims, less reinsurance paid to claimants in/outside India are as under:

Claims settled and remaining unpaid for more than six months is Rs. NIL (previous year: Rs. NIL).

Claims where the claim payment period exceeds four years:

In this context, the following claims have been valued on the basis of a contractually defined benefit amount payable in monthly installments.

4.1.8 (A) Investments

Value of contracts in relation to investments for:

- Purchases where deliveries are pending Rs. NIL(previous year: Rs. NIL); and

- Sales where payments are overdue Rs. NIL (previous year: Rs. NIL).

Historical cost of investments that are valued on fair value basis is Rs.25,063,263 thousand (previous year: Rs.24,860,129 thousand).

All investments are made in accordance with Insurance Act, 1938 and Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016 and are performing investments.

(B) Allocation of investment income

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of segment-wise policyholders funds.

1.1.9 Allocation of expenses

During the year, the Company has reviewed and revised its Board approved methodology on the allocation and apportionment of expenses as required by IRDAI (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 2016 as set out below:

Allocation/apportionment of Operating Expenses is based on the Organisational Structure of the Company comprising off Business, Service and Support Groups. Business comprises of Wholesale Business Group, Retail Business Group (including Sub Groups) and Government Business Group. Expenses incurred by Business Group are direct in nature. Service Group comprises of Customer Service Group which consists of Underwriting and Claims Group, created based on product segments. Support Group consists of Investments, Operations, Legal, Finance and Accounts, Reinsurance, Technology etc. Expenses incurred by Service and Support Groups are indirect in nature.

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

- Direct expenses pertaining to Business Group that are directly identifiable to a product segment are allocated on actuals and other direct expenses are apportioned in proportion to the net written premium of the product within the Business Group. However, in case of retail business group, the other expenses of its sub group are apportioned based on the net written premium contributed by the respective sub group;

- Expenses pertaining to Support Group and any other expenses, which are not directly allocable, are apportioned on the basis of net written premium in each business class; and

In accordance with the IRDAI (Expenses of Management of Insurers transacting General or Health Insurance Business) Regulations, 2016, operating expenses in excess of segmental limits are to be borne by the shareholderâs. During the current financial year expenses of management for all segments are within the prescribed segmental limits (previous year: Rs.427,891 thousand was in excess for the motor segment and was borne by the shareholders).

Had the Company followed the earlier methodology, Operating expense of Rs.885,300 thousand would have been in excess of segmental limits pertaining to Motor segment and same would have reduced proportionately from each expenditure head and borne by shareholders.

1.1.10 Employee Benefit Plans

(A) Defined contribution plan

(B) Defined benefit plan Gratuity

Reconciliation of opening and closing balance of the present value of the defined benefit obligation for gratuity benefits of the Company is given below:

Accrued Leave

Long Term Performance Pay

1.1.11 Remuneration to Managerial and Key Management Persons

(A) The details of remuneration of MD & CEO and two Wholetime Directorsâ as per the terms of appointment are as under:

Managerial remuneration in excess of Rs.15,000 thousand, for each Managerial personnel has been charged to profit and loss account.

Note: Provision towards gratuity, leave accrued and Long Term Performance Pay are determined actuarially on an overall basis and accordingly have not been considered for the above disclosures.

1.1.12 (A) Share Capital

During the year the Company has allotted 2,797,618 equity shares (previous year: 3,612,240 equity shares) under ESOP raising Rs.359,347 thousand (previous year: Rs.368,468 thousand).

During the year the Company has not made any preferential allotment (previous year Rs. NIL).

(B) Share Application

At March 31, 2018 the Company had not received any share application money (previous year: Rs.12,755 thousand) against which shares are yet to be allotted.

1.1.16 Ratio Analysis:

(A) For ratios at March 31, 2018 refer Annexure 1a and 1b and for March 31, 2017 refer Annexure 2a and 2b

(B) Solvency Margin

1.1.17 Employee Stock Option Scheme (ESOS)

The Company instituted the ESOS Scheme pursuant to the resolutions passed by our Board and Shareholders on April 26, 2005 and July 22, 2005, respectively. The Company had granted Stock options to employees in compliance with the Securities and Exchange Board of India (Employee stock option scheme and employee stock purchase scheme) guidelines, 1999. Pursuant to the ESOS Scheme, no eligible employee could, in aggregate be granted in a financial year, options greater than 0.1% of the issued equity share capital of the Company and the aggregate of options granted to the eligible employees under the ESOS Scheme was capped at 5% of the issued capital of our Company as on the date of such grants. ESOS Scheme was further amended pursuant to the resolutions passed by the Board and Shareholders on June 9, 2017 and July 10, 2017, respectively, to approve the amendment in the ESOS Scheme for, inter alia, aligning it with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Further, the exercise price was finalised by the Board Nomination and Remuneration Committee in concurrence with the Board based on an independent valuerâs report. No fresh grant has been made under the ESOS after April 25, 2011.

The estimated fair value is computed on the basis of binomial tree pricing model, of each stock option granted for Founder ESOPs and Performance ESOPs.

Nil options are vested during the year ended March 31, 2018 and Rs.359,347 thousand was realised by exercise of options. During the year ended March 31, 2018 the Company has recognised a compensation cost of Rs. NIL (previous year: Rs. NIL) as the intrinsic value of the options. Had the company followed fair value method for valuing its options, no additional cost would have been charged in Revenue and Profit and Loss account and hence no change in Profit after tax, Basic EPS and Diluted EPS for year ended March 31, 2018 and previous year ended March 31, 2017.

The weighted average price of options exercised during the year ended March 31, 2018 is Rs.130.1 (previous year: Rs.101.8).

1.2 Other disclosures

1.2.1 Basis used by the Actuary for determining provision required for IBNR/IBNER

IBNR (including IBNER) liability for all lines of business has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDAI from time to time and the applicable provisions of the Guidance Note 21 issued by the Institute of Actuaries of India.

1.2.2 Provision for Free Look period

The provision for Free Look period is duly certified by the Appointed Actuary.

1.2.3 Contribution to Terrorism Pool

In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the Companyâs share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on intimation/confirmation received from GIC. Accordingly, reinsurance accepted, on account of the terrorism pool has been recorded only up to December 31, 2017 (previous year: December 31, 2016) as per the last confirmation received.

1.2.4 India Nuclear Insurance Pool

In view of the passage of the Civil Liability for Nuclear Damage Act, 2010, GIC Re as Indian Reinsurer initiated the formation of the India Nuclear Insurance Pool (INIP) along with other domestic non-life insurance companies by pooling the capacity to provide insurance covers for nuclear risks. INIP is an unregistered reinsurance arrangement among its members i.e. capacity providers without any legal entity. GIC Re and 11 other non-life insurance companies are Founder Members with their collective capacity of Rs.15,000,000 thousand. GIC Re is also appointed as the Pool Manager of the INIP The business underwritten by the INIP will be retroceded to all the Member Companies including GIC Re in proportion of their capacity collated. Out of the total capacity of Rs.15,000,000 thousand of the INIP the capacity provided by the Company is Rs.1,000,000 thousand. The Company has not received any statement of accounts during the year from INIP Administrator.

1.2.5 Interest, Rent and Dividend income

Interest, Dividend & Rent income is net of interest expense of Rs.1,755 thousand (previous year: Rs.24,262 thousand) on account of REPO transactions.

1.2.6 Re-insurance inward

The results of reinsurance inward are accounted as per last available statement of accounts/confirmation from reinsurers.

1.2.7 Contribution to Solatium fund

1.2.8 Environment Relief Fund

An amount of Rs.1,265 thousand is outstanding (Previous year: Rs.919 thousand) towards Environment Relief fund (ERF) under Public Liability policies.

1.2.9 Leases

In respect of premises taken on operating lease, the lease agreements are generally mutually renewable/ cancelable by the lessor/lessee.

Non Cancelable operating lease

The detail of future rentals payable are given below:

An amount of Rs.3,083 thousand (previous year: Rs.2,588 thousand) towards said lease payments has been recognised in the statement of revenue account.

1.2.10 Micro and Small scale business entities

There is no Micro, Small & Medium enterprise to which the Company owes dues, which are outstanding for more than 45 days as at March 31, 2018 (previous year: Rs. NIL). This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

1.2.11 Segmental reporting Primary reportable segments

The Companyâs primary reportable segments are business segments, which have been identified in accordance with AS 17 - Segment Reporting read with the Regulations. The income and expenses attributable to the business segments are allocated as mentioned in paragraph 5.1.8 & 5.1.9 above. Segment revenue & results have been disclosed in the Revenue accounts.

During the financial year ended March 31, 2018, pursuant to the IRDAI (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 2016 the Company has reviewed and revised its policy of allocation of expenses compared to that followed until the year ended March 31, 2017. Consequently, the segmental results for the year ended March 31, 2017 and March 31, 2018 are not comparable.

Secondary reportable segments

1.2.12 Related party

Party where control exists

ICICI Bank Limited (Holding Company)

Other related parties with whom transactions have taken place during the year: Fellow Subsidiaries/Associates/Other related entities:

1.2.17 During the year ended March 31, 2018 the Company has incurred expenditure towards CSR activities which are as below;

(a) Gross amount required to be spent by the company during the year was Rs.148,824 thousand (previous year: Rs.123,988 thousand).

(b) Amount spent during the year is Rs.149,645 thousand (previous year: Rs.125,164 thousand).

(C) Debenture Redemption Reserve

Pursuant to IRDAI circular no. IRDA/F&A/OFC/01/2014-15/115 dated August 4, 2017, and as required by Companies (Share Capital and Debentures) Rules, 2014, Company has started creating Debenture Redemption Reserve (DRR) from July 1, 2017 on a straight-line basis over the balance tenure. The appropriation for the period ended March 31, 2018 on this account is Rs.103,929 thousand.

1.2.19 Disclosures on other work given to auditors

Pursuant to Corporate Governance Guidelines issued by IRDAI on May 18, 2016, the additional work entrusted to the statutory auditor is given below:

In accordance with SEBI rules, the remuneration disclosed above has been reimbursed by the selling shareholders and hence does not reflect as charge in Companyâs Profit and Loss Account

1.2.20 As at March 31, 2018 there are no (previous year: Rs. NIL) outstanding forward exchange contracts.

1.2.21 The Companyâs pending litigations comprise of claims against the Company and proceedings pending with Tax Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. (Refer Note no. 5.1.1 for details on contingent liabilities)

1.2.22 (A) The Company periodically reviews all its long term contracts to assess for any material foreseeable losses. Based on such review, the Company has made adequate provisions for these long term contracts in the books of account as required under any applicable law/accounting standard.

(B) As at March 31, 2018, the Company did not have any outstanding long term derivative contracts (previous year: Rs. NIL).

1.2.23 For the year ended March 31, 2018, the company is not required to transfer any amount into the Investor Education & Protection Fund (previous year: Rs. NIL).

1.2.24 Dividend

Interim dividend appropriation for the year ended March 31, 2018 amounted to Rs.818,418 thousand (Previous year Rs.1,890,828 thousand) including dividend distribution tax of Rs.138,430 thousand (Previous year Rs.319,820 thousand).

The Board of directors have also proposed a final dividend of Rs.1,134,871 thousand (Previous year: Rs. NIL) subject to requisite approvals. Dividend distribution tax on the same amounts to Rs.233,276 thousand (Previous year: Rs. NIL).

The Central Government in consultation with National Advisory Committee on Accounting Standards has amended Companies (Accounting Standards) Rules, 2006 (âprincipal rulesâ), vide notification issued by Ministry of Corporate Affairs dated March 30, 2016. The Companies (Accounting Standards) Rules, 2016 is effective March 30, 2016. According to the amended rules, the above mentioned proposed dividend and Dividend distribution tax is not recorded as a liability at March 31, 2018.

1.2.25 Previous year figures have been regrouped, reclassified in the respective schedule and notes wherever necessary, to conform to current year classifications. The details of changes are as under:

Mar 31, 2017

Notes :

Ratios are computed as per definitions laid down by IRDA Master circular dated October 5, 2012 and corrigendum on master circular dated July 3, 2013

1. GDPI = Premium from direct business written, NWP = Net written premium

2. Shareholders'' funds/ Net worth = (Share capital Reserve & Surplus) - (Miscellaneous expenditure Debit balance in profit & loss account)

3. Expenses of management = Commission paid-direct Operation expenses related to insurance business

4. Liquid asset = Short term investments Cash and bank balances

5. Policyholders liabilities = Claim outstanding (to be discharged in 12 months) Reserve for unexpired risk Reserve for premium deficiency

6. Underwriting profit/ (loss) = Net premium earned - Net claims incurred - Net commission - Operating expense

Mar 31, 2008

1.1 Statutory disclosures as required by IRDA

1.1.1 Contingent liabilities

(Rs. in 000s) Particulars As at As at March 31, March 31, 2008 2007

Partly-paid up investments NIL 15,600 Claims, other than those under policies, not acknowledged as debt NIL NIL Underwriting commitments outstanding NIL NIL Guarantees given by or on behalf of the Company NIL NIL Statutory demands/liabilities in dispute, not provided for (see note below) 62,740 62,700 Reinsurance obligations to the extent not provided for in accounts NIL NIL Others NIL NIL

Note : The Company has disputed the demand raised by Income Tax Department for assessments completed of past years and the appeals are pending before the appropriate authorities.

1.1.2 The assets of the Company are free from all encumbrances.

1.1.3 Estimated amount of commitment pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is Rs. 124,036 thousand (previous year: Rs. 36,830 thousand).

1.1.4 Commitment in respect of loans and investments is Rs. 5,000 thousand (previous year: Rs. 50,000 thousand).

1.1.5 The Company has recognized 0.6 percent (previous year: 0.8 percent) of the total premium earned from Miscellaneous - Engineering class of business based on varying risk pattern. The risk pattern is determined based on underwriting estimates, which are in turn based on project related information received from the customers.

1.1.6 In accordance with regulatory guidelines, there is no premium deficiency on an overall basis in the miscellaneous segment, although there is a premium deficiency of Rs. NIL (previous year: Rs. 306,000 thousand) under the health sub-segment and Rs. NIL (previous year: Rs. 35,000 thousand) under the personal accident sub-segment within the miscellaneous segment.

1.1.7 Investments

Value of contracts in relation to investments for:

Purchases where deliveries are pending Rs. NIL (previous year: Rs. 4,779 thousand); and

Sales where payments are overdue Rs. NIL (previous year: Rs. NIL). Historical cost of investments that are valued on fair value basis is Rs. 5,341,103 thousand (previous year: Rs. 2,673,107 thousand).

All investments are made in accordance with the Insurance Act, 1938 and Insurance Regulatory and Development Authority (Investment) Regulations, 2000 and are performing investments. Allocation of investment

Investments that are earmarked, are allocated separately to policy holders or shareholders, as applicable;

Other investments have not been allocated between policy holders and shareholders as the same are not earmarked separately. The Company does not have any investment property as at March 31, 2008 (previous year: Rs. NIL).

1.1.8 Allocation of income and expenses

Allocation of investment income

Investment income has been allocated between revenue account(s) and profit and loss account on the basis of the ratio of average policyholders funds to average shareholders funds respectively; average being the balance at the beginning of the year and at the end of the year.

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of segment-wise policyholders funds.

Allocation of expenses

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

Expenses that are directly identifiable to a business class are allocated on actuals;

Other expenses, that are not directly identifiable, are broadly allocated on the basis of gross written premium in each business class; and

Depreciation expenditure has been allocated on the assessment that the use of assets is proportionate to gross written premium of the respective segments.

1.1.9 Share Application

As at March 31, 2008 the Company had received share application money of Rs. NIL (previous year: Rs. 1,500,000 thousand) which is pending allotment.

1.2 Other disclosures

1.2.1 Basis used by the Actuary for determining provision required for IBNR/ IBNER

Liability for IBNR including IBNER (excluding on IMTPIP) for the year ending March 31, 2008 has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDA vide circular no. 11/IRDA/ACTL/IBNR/2005- 06 and applicable provisions of the Guidance Note 21 issued by the Actuarial Society of India.

The Appointed Actuary has adopted the Chain Ladder Method to those lines of business where claims development in the past years are thought to be representative for the future claims development and adopted Bornheutter- Ferguson method to those lines of business where claims development in the past years are not thought to be representative for the future claims development. Liability for IBNR including IBNER is created on re-insurance accepted from IMTPIP based on actuarial estimates received from the IMTPIP.

1.2.2 Contribution to terrorism pool

The Company in accordance with the requirements of IRDA has participated in contributing to the Terrorism Pool. This pool is managed by the General Insurance Corporation of India (ÂGICÂ). Amounts collected as terrorism premium in accordance with the requirements of the Tariff Advisory Committee (TAC) are ceded at 100% of the terrorism premium collected to the Terrorism Pool, subject to conditions and an overall limit of Rs. 6 billion. In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the CompanyÂs share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on quarterly intimation/confirmation received from GIC. Accordingly, reinsurance accepted on account of the Terrorism Pool has been recorded only upto December 31, 2007 (previous year: June 30, 2006) as per the last confirmation received and which has been carried forward to the subsequent accounting period as Unexpired Risk Reserve for subsequent risks, if any.

1.2.3 Contribution to Motor third party pool

In accordance with the directions of IRDA, effective April 1, 2007 the Company, together with other insurance companies has participated in the Indian Motor Third Party Insurance Pool (IMTPIP), a multilateral reinsurance arrangement, administered by the General Insurance Corporation of India (ÂGICÂ). The IMTPIP covers reinsurance of third party risks of commercial vehicles. The Company has ceded 100% of the third party premium collected to the pool and has recorded its share of results in the pool based on the intimation/ confirmation received from GIC. Accordingly, re-insurance accepted on the pool has been recorded upto February 29, 2008.

1.2.4 Contribution to Solatium fund

In accordance with the requirements of the IRDA circular dated March 18, 2003 and based on recommendations made at the General Insurance Council meeting held on February 4, 2005, the Company has provided 0.10% of gross written premium on all motor policies (excluding reinsurance premium accepted on motor third party for commercial vehicles) towards contribution to the solatium fund.

1.2.5 Environment Relief Fund

An amount of Rs. 50,565 thousand (previous year: Rs. 39,291 thousand) collected towards Environment Relief fund under Public Liability policies has been disclosed under current liabilities and the same is invested in Government Securities.

1.2.6 Micro and Small scale business entities

There is no Micro, Small & Medium enterprise to which the Company owes dues, which are outstanding for more than 45 days during the year ended March 31, 2008. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

1.2.7 Prior year figures have been regrouped, reclassified wherever necessary to conform to current year classifications.

Mar 31, 2007

1.1 Statutory disclosures as required by IRDA

1.1.1 Contingent liabilities

(Rs. in 000s) Particulars As at As at March 31, March 31, 2007 2006

Partly-paid up investments 15,600 NIL Claims, other than those under policies, not acknowledged as debts NIL NIL Underwriting commitments outstanding NIL NIL Guarantees given by or on behalf of the company NIL NIL Statutory demands/liabilities in dispute, not provided for (see note below) 62,700 NIL Reinsurance obligations to the extent not provided for in accounts NIL NIL Others NIL NIL

Note:The Company has disputed the demand raised by Income Tax Department for assessments completed for the Assessment Year 2002- 03 & 2004-05. The matter is subjudice and pending with Commissioner of Income Tax (Appeals).

1.1.2 The assets of the Company are free from all encumbrances.

1.1.3 Estimated amount of commitments pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is Rs. 36,830 thousand (previous year Rs. 31,382 thousand).

1.1.4 Commitment in respect of loans and investments is Rs. 50,000 thousand (previous year Rs. NIL).

1.1.5 The Company has recognised 0.8 percent (previous year 0.6 percent) of the total premium earned from Miscellaneous - Engineering class of business based on varying risk pattern. The risk pattern is determined based on underwriting estimates, which are in turn based on project related information received from the customers, and these are relied upon by the Company.

1.1.6 In accordance with regulatory guidelines, there is no premium deficiency on an overall basis in the miscellaneous segment, although there is a premium deficiency of Rs. 306,000 thousand (previous year: Rs. 70,000 thousand) under the health sub segment and Rs. 35,000 thousand (previous year: Rs. 45,000 thousand) under the personal accident sub segment within the miscellaneous segment.

1.1.7 Investments

Value of contracts in relation to investments for:

Purchases where deliveries are pending Rs. 4,779 thousand (previous year Rs. 61,256 thousand); and

Sales where payments are overdue Rs. NIL (previous year Rs. NIL).

Historical cost of investments that are valued on fair value basis is Rs. 2,673,107 thousand (previous year Rs. 1,903,366 thousand).

All investments are made in accordance with the Insurance Act, 1938 and Insurance Regulatory and Development Authority (Investment) Regulations, 2000 and are performing investments.

Allocation of investment

Investments that are earmarked, are allocated separately to policy holders or share holders as applicable;

Other investments have not been allocated into policy holders and share holders as the same are not earmarked separately.

The Company does not have any investment property as at March 31, 2007 (previous year: Rs. NIL).

1.1.8 Allocation of income and expenses

Allocation of investment income

Investment income has been allocated between revenue account(s) and profit and loss account on the basis of the ratio of average policyholders funds to average shareholders funds respectively; average being the balance at the beginning of the year and at the end of the year.

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of segment-wise policyholders funds.

Allocation of expenses

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

- Expenses that are directly identifiable to a business class are allocated on actuals;

- Other expenses, that are not directly identifiable, are broadly allocated on the basis of gross written premium in each business class; and

- Depreciation expenditure has been allocated on the assessment that the use of assets is proportionate to gross written premium of the respective segments.

1.2 Other disclosures

1.2.1 Contribution to terrorism pool

The Company in accordance with the requirements of IRDA has participated in contributing to the Terrorism Pool. This pool is managed by the General Insurance Corporation of India (ÂGICÂ). Amounts collected as terrorism premium in accordance with the requirements of the Tariff Advisory Committee (TAC) are ceded at 100% of the terrorism premium collected to the Terrorism Pool, subject to conditions and an overall limit of Rs. 6 billion.

In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the CompanyÂs share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on quarterly intimation/confirmation received from GIC. Accordingly, reinsurance accepted on account of the Terrorism Pool has been recorded only upto June 30, 2006 (previous year June 30, 2005) as per the last confirmation received and which has been carried forward to the subsequent accounting period as Unexpired Risk Reserve for subsequent risks, if any.

1.2.2 Contribution to solatium fund

In accordance with the requirements of the IRDA circular dated March 18, 2003 and based on recommendations made at the General Insurance Council meeting held on February 4, 2005, the Company has provided 0.10% of gross written premium on all motor policies towards contribution to the solatium fund.

1.2.3 Environment Relief Fund

An amount of Rs. 39,291 thousand (previous year: Rs. 27,787 thousand) collected towards Environment Relief fund under Public Liability policies has been disclosed under current liabilities and the same is invested in Government Securities.

1.2.4 Basis used by the Actuary for determining provision required for IBNR/IBNER

The liability for IBNR including IBNER for the year ending March 31, 2007 has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDA vide circular no. 11/IRDA/ACTL/IBNR/2005-06 and applicable provisions of the Guidance Note 21 issued by the Actuarial Society of India.

The Appointed Actuary has adopted the Chain Ladder Method to those lines of business where claims development in the past years are thought to be representative for the future claims development and adopted

Bornheutter-Ferguson method to those lines of business where claims development in the past years are not thought to be representative for the future claims development.

In the previous year for Health & Personal Accident lines of business, the Appointed Actuary had arrived at the estimate for IBNR/IBNER based on Bornheutter-Ferguson method. However, this year the Company has shifted from Bornheutter-Ferguson method to Chain Ladder Method for the aforesaid lines of business. Had the Company continued to provide liability for IBNR/IBNER using the earlier method, the transfer to shareholdersÂ account, operating profit and profit before tax would have been higher by Rs. 77,463 thousand and the liability for IBNR/IBNER and claims outstanding would have been lower by Rs. 77,463 thousand.

1.2.5 Prior year figures have been regrouped, reclassified wherever necessary, to conform to current year classifications.

Mar 31, 2006

1 Statutory disclosures as required by IRDA

1.1 Contingent liabilities (Rs. in Â000s)

Particulars As at As at March 31, March 31, 2006 2005

Partly-paid up investments Nil Nil

Claims, other than those under policies, not acknowledged as debts Nil Nil

Underwriting commitments outstanding Nil Nil

Guarantees given by or on behalf of the company Nil Nil

Statutory demands/liabilities in dispute, not provided for Nil Nil

Reinsurance obligations to the extent not provided for in accounts Nil Nil

Others Nil Nil

1.2 The assets of the Company are free from all encumbrances.

1.3 Estimated amount of commitments pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is Rs 31,382 thousand (Previous year Rs 24,296 thousand).

1.4 Commitments in respect of loans and investments is Rs NIL (Previous year Rs NIL).

1.5 In accordance with regulatory guidelines, there is no premium deficiency on an overall basis in the miscellaneous segment, although there is a premium deficiency of Rs.70,000 thousand (Previous year: Rs 30,000 thousand) under the health sub segment and Rs.45,000 thousand (Previous year: Rs NIL thousand) under the personal accident sub segment within the miscellaneous segment.

1.6 Investments

Value of contracts in relation to investments for:

Purchases where deliveries are pending Rs 61,256 thousand

(Previous year Rs 62,251 thousand); and

Sales where payments are overdue Rs NIL (Previous year Rs NIL).

Historical cost of investments that are valued on fair value basis is Rs. 1,903,366 thousand (Previous year Rs 623,041 thousand).

All investments are made in accordance with the Insurance Act, 1938 and Insurance Regulatory and Development Authority (Investment) Regulations, 2000 and are performing investments.

The investments as at the year end have not been allocated into policy holders and share holders as the same are not earmarked separately.

The Company does not have any investment property as at March 31, 2006 (previous year: Rs NIL).

1.7 Allocation of income and expenses

Allocation of investment income

Investment income has been allocated between revenue account(s) and profit and loss account on the basis of the ratio of average policyholders funds to average shareholders funds respectively, average being the balance at the beginning of the year and at the end of the year.

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of segment-wise policyholders funds.

Allocation of expenses

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

Expenses that are directly identifiable to a business class are allocated on actuals;

Other expenses, that are not directly identifiable, are broadly allocated on the basis of gross written premium in each business class; and

Depreciation expenditure has been allocated on the assessment that the use of assets is proportionate to gross written premium of the respective segments.

2 Other disclosures

2.1. Contribution to terrorism pool

The Company in accordance with the requirements of IRDA has participated in contributing to the Terrorism Pool. This pool is managed by the General Insurance Corporation of India (ÂGICÂ). Amounts collected as terrorism premium in accordance with the requirements of the Tariff Advisory Committee (TAC) are ceded at 100% of the terrorism premium collected to the Terrorism Pool, subject to conditions and an overall limit of Rs 5 billion.

In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the CompanyÂs share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on quarterly intimation/confirmation received from GIC. Accordingly, reinsurance accepted on account of the Terrorism Pool has been recorded only upto June 30, 2005 (previous year December 31, 2004) as per the last confirmation received and which has been carried forward to the subsequent accounting period as Unexpired Risk Reserve for subsequent risks, if any.

2.2 Contribution to solatium fund

In accordance with the requirements of the IRDA circular dated March 18, 2003 and based on recommendations made at the General Insurance Council meeting held on February 4, 2005, the Company has provided 0.10% of gross written premium on all motor policies towards contribution to the solatium fund.

2.3 Environment Relief Fund

An amount of Rs 27,787 thousand (Previous year Rs 16,822 thousand) collected towards Environment Relief fund under Public Liability policies has been disclosed under current liabilities and the same is invested in Government Securities.

2.4 Basis used by the Actuary for determining provision required for IBNR/IBNER

The liability for IBNR including IBNER for the year ending March 31, 2006 has been estimated by the Appointed Actuary in compliance with the guidelines issued by IRDA vide circular no. 11/IRDA/ACTL/IBNR/2005-06 and applicable provisions of the Guidance Note 21 issued by the Actuarial Society of India.

The Appointed Actuary has adopted the Chain Ladder Method to those lines of business where claims development in the past years are thought to be representative for the future claims development and adopted Bornheutter- Ferguson method to those lines of business where claims development in the past years are not thought to be representative for the future claims development.

In the previous year, the appointed actuary had arrived at the estimate for IBNR/IBNER based on Mukherjee Committee recommendations. Had the Company continued to provide liability for IBNR/IBNER using the earlier method, the transfer to shareholdersÂ account, operating profit and profit before tax would have been higher by Rs. 217,796 thousand and the liability for IBNR/IBNER and claims outstanding would have been lower by Rs. 217,796 thousand.

2.5 Solvency Ratio

As part of the terms and condition of registration, the Company agreed to maintain solvency ratio at 1.5 times in relation to the net written premium and net claim incurred at all times. The Company was in compliance with this requirement prior to the issuance of the revised guidelines on IRDA (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2000 vide circular no. 045/IRDA/F&A/Mar-06 dated March 31, 2006, applicable retrospectively from April 01, 2005. However, subsequently, on computing the solvency margin as per the aforementioned revised guidelines, the companyÂs solvency margin as at March 31, 2006 was lower than 1.5 times. The management has initiated necessary measures to comply with the same.

2.6 Leases

In respect of premises taken on operating lease, the lease agreements are generally mutually renewable/cancellable by the lessor/lessee.

2.7 Segmental reporting

Primary reportable segments

The CompanyÂs primary reportable segments are business segments, which have been identified in accordance with AS 17 - Segment Reporting read with the Regulations. The income and expenses attributable to the business segments are allocated as mentioned in paragraph 5.1.10 above.

Fixed assets, investments and other current assets and liabilities to the extent identifiable have been allocated to business segments. Unallocated premium is not identifiable to any business segment.

Secondary reportable segments

There are no reportable geographical segments since the Company provides services to customers in the Indian market only and does not distinguish any reportable regions within India.

2.8 Prior year figures have been regrouped, reclassified wherever necessary, to conform to current year classifications.

Mar 31, 2005

1 Contingent liabilities

(Rs. in 000s) Particulars As at As at March 31, March 31, 2005 2004

Partly-paid up investments Nil Nil

Claims, other than those under policies, not acknowledged as debts Nil Nil

Underwriting commitments outstanding Nil Nil

Guarantees given by or on behalf of the company Nil Nil

Statutory demands/liabilities in dispute, not provided for Nil Nil

Reinsurance obligations to the extent not provided for in accounts Nil Nil

Others Nil Nil

2 The assets of the Company are free from all encumbrances.

3 Commitments in respect of loans and investments is Rs. Nil (Previous year Rs. Nil).

4 Estimated amount of commitments pertaining to contracts remaining to be executed in respect of fixed assets (net of advances) is Rs. 24,296 thousand (Previous year Rs. 5,332 thousand).

5 In accordance with regulatory guidelines, there is no premium deficiency on an overall basis in the miscellaneous segment, although there is a premium deficiency of Rs. 30,000 thousand under the Health sub segment within the miscellaneous segment.

6 Investments

Value of contracts in relation to investments for :

- Purchases where deliveries are pending Rs. 62,251 thousand (Previous year Rs. Nil); and

- Sales where payments are overdue Rs. Nil (Previous year Rs. Nil) .

Historical cost of investments that are valued on fair value basis is Rs. 623,041 thousand (Previous year Rs. 527,014 thousand).

All investments are made in accordance with the Insurance Act, 1938 and Insurance Regulatory and Development Authority (Investment) Regulations, 2000 and are performing investments.

The investments as at the year end have not been allocated into policy holders and share holders as the same are not earmarked separately.

The Company does not have any investment property as at March 31, 2005 (Previous year: Rs. Nil).

7 Allocation of income and expenses

Investment income has been allocated between revenue account(s) and profit and loss account on the basis of the ratio of average policyholders funds to average shareholders funds respectively, average being balance at the beginning of the year and that at the end of the year.

Further, investment income across segments within the revenue account(s) has also been allocated on the basis of segment-wise policyholders funds.

Allocation of expenses

Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:

- Expenses that are directly identifiable to a business class are allocated on actuals.

- Other expenses, that are not directly identifiable, are broadly allocated on the basis of gross written premium earned in each business class.

- Depreciation expenditure has been allocated on the assessment that the use of assets is proportionate to gross written premium of the respective segments.

8 Contribution to terrorism pool

The Company in accordance with the requirements of IRDA has participated in contributing to the Terrorism Pool. This pool is managed by the General Insurance Corporation of India (ÂGICÂ). Amounts collected as terrorism premium in accordance with the requirements of the Tariff Advisory Committee (ÂTACÂ) are ceded at 100% of the terrorism premium collected to the Terrorism Pool, subject to conditions and an overall limit of Rs. 3 billion.

In accordance with the terms of the agreement, GIC retrocedes, to the Company, terrorism premium to the extent of the CompanyÂs share in the risk, which is recorded as reinsurance accepted. Such reinsurance accepted is recorded based on quarterly intimation/confirmation received from GIC. Accordingly, reinsurance accepted on account of the Terrorism Pool has been recorded only upto December 31, 2004 as per the last confirmation received and which has been carried forward to the subsequent accounting period as Unexpired Risk Reserve for subsequent risks, if any.

9 An amount of Rs. 16,822 thousand (Previous year Rs. 8,674 thousand) collected towards Environment Relief Fund under Public Liability policies has been disclosed under current liabilities and the same is invested in

Government Securities.

9 Basis used by the Actuary for determining provision required for IBNR/

IBNER

The Appointed Actuary has certified that the requirements of Guidance Note 21 of the Actuarial Society of India have been complied with to the extent applicable in respect of determination of IBNR including IBNER and to the extent that IBNR has been arrived at following Mukherji Committee recommendations, no assumptions with regard to future scenario are required to be made.

10 Leases

In respect of premises taken on operating lease, the lease agreements are generally mutually renewable/cancellable by the less or/lessee .

11 Leave encashment

The Company has discontinued the policy relating to leave encashment and no carry forward of leave is permitted. Leave balances outstanding as on March 31, 2004 have been appropriately adjusted/paid out.

12 Prior year figures have been regrouped, reclassified wherever necessary, to conform to current year classifications.

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