(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 “Advances and Other Assets” 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.
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 ‘NIL’ discount rate.
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 =? 435 lakhs (previous year: =? 585 lakhs); and
• 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.
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.
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.
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:
• 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 on a Company level.
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.
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.
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
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 director’s 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.
The Company has under the guidance of the Board and the Board Nomination and Remuneration Committee (“BNRC/ Committee”), 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:
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.
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 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 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.
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.
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.
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.
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.
measurement period with levels of remuneration
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.
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 Company’s criteria for determining ‘weak’ 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.
A. The details of remuneration paid to MD & CEO, Whole time Directors’ 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:
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).
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.
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, 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 Company’s basic and diluted earnings per share would have been ^ 49.55 (previous year ^ 37.31) and ^ 49.07 (previous year ^ 37.01) respectively.
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.
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.
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 ^ 200,000 lakhs.
I n 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, 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).
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.
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 Company’s 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)
I nterest, Dividend & Rent income is net of interest expense of ^ NIL (previous year: ^ NIL) on account of REPO transactions.
The results of reinsurance accepted are accounted as per last available statement of accounts / confirmation from reinsurers.
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 (‘MVAF Rules’). 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 “Sundry advance and Deposit” in Schedule 12. As on 31 March 2025, this account is yet to be made operational.
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 “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 ^ 36 lakhs (previous year: ^ 5 lakhs) has been disclosed under the head current liabilities in schedule 13.
In respect of premises taken on operating lease, the lease agreements are generally mutually renewable / cancelable by the lessor / lessee.
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).