Insurance Company Limited
1. We have audited the accompanying financial statements of ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED (“the Company”), which comprise the Balance Sheet as at 31 March 2025, the Revenue accounts of fire, marine and miscellaneous insurance (collectively known as ‘the Revenue accounts’), the Profit and Loss account and the Receipts and Payments account for the year then ended, the schedules annexed thereto, a summary of the significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, are prepared and give the information required in accordance with the Insurance Act, 1938 as amended, (the “Insurance Act”), the Insurance Regulatory and Development Authority of India Act, 1999 (the “IRDAI Act”), the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 (the “IRDAI Financial Statements Regulations”), the circulars/orders/directions issued by Insurance Regulatory and Development Authority of India (“IRDAI”) and the Companies Act, 2013 (‘the Act’) in the manner so required, and give a true and fair view, in conformity with the Accounting Standards specified under section 133 of the Act, read with the Companies (Accounting Standards) Rules, 2021 as amended (‘Accounting Standards’) and other accounting principles generally accepted in
India, read with and which are not inconsistent with the accounting principles as prescribed in the IRDAI Financial Statements Regulations, IRDAI Act and circulars/orders/directions issued by IRDAI.
i) in the case of Balance Sheet, of the state of affairs of the Company as at 31 March 2025;
ii) in the case of Revenue accounts, of the operating profit in the Fire and Miscellaneous business and operating loss in marine business for the year ended on that date;
iii) in the case of Profit and Loss account, of the profit for the year ended on that date; and
iv) in the case of Receipts and Payments account, of the receipts and payments for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
4. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
5. We have determined the matters described below to be the key audit matters to be communicated:
Sr. No. Key Audit Matters
How our Audit addressed the Key Audit Matters
1. Information Technology Systems and Controls
Our key audit procedures included, but were not
(IT Controls) related to financial reporting:
limited to the following:
The Company is highly dependent on its complex
We involved our IT specialists to perform pro-
IT architecture comprising hardware, software,
cedures which included, but were not limited to
multiple applications, automated interfaces and
the following:
controls in systems for recording, storing and reporting financial transactions.
• Obtained an understanding of the Compa-
A number of independent and inter-dependent
ny’s IT related control environment, IT applications and databases. Furthermore, we
IT systems are used by the Company for
conducted a risk assessment and identified
processing and recording the large volume
IT applications, databases that are relevant
of transactions on daily basis as part of
for the Company’s financial reporting.
its operations, which impacts key financial accounting and reporting items such as
• For the IT systems relevant to reporting of
premium income, claims, commission expenses
financial information, we have tested design
and investments amongst others.
and operative effectiveness of key IT general
There exists a risk that, gaps in the IT control
controls over the key IT systems that are critical to financial reporting. This included evalu-
environment could result in the financial
ation of entity’s controls to ensure segregation
accounting and reporting records being
of duties and access rights being provisioned /
materially misstated.
modified based on duly approved re-
The controls implemented by the Company
quests, access for exit cases being revoked in a timely manner and access of
in its IT environment determine the integrity,
all users being re-certified during the pe-
accuracy, completeness, and the validity of the
riod of audit. Further, controls related to
data that is processed by the applications and
program change were evaluated to verify
is ultimately used for financial reporting. These
whether the changes were approved, tested
controls contribute to mitigating risk of potential
in an environment that was segregated from
misstatements caused by fraud or errors.
production and moved to produc-
Our audit approach relies on automated controls
tion by appropriate users. Where deficiencies were identified, tested com-
and therefore, procedures are designed to test
pensating controls and/or performed
controls over IT systems, segregation of duties,
additional substantive audit procedures as
interface and system application controls over
required to mitigate any risk of material mis-
key financial accounting and reporting systems.
statement with respect to related financial
Due to, complexity and pervasive impact of the
statement line item.
IT systems and related control environment on the Company’s financial statements, we have
• Evaluated the design and tested the operat-
identified testing of such IT systems and related
ing effectiveness of critical and key automat-
control environment as a key audit matter for
ed controls within various business processes
the current year audit.
around the software systems. This included
testing the integrity of system interfaces, report logic for system generated reports relevant to the audit of premium income, commission expense, claims and investments, for evaluating completeness and accuracy.
• Reviewed the Information System Audit Reports and Key audit findings of Internal Audit to assess the impact of observations and management’s response if any on financial reporting.
• Obtained written representations from management on whether IT general controls and automated IT controls are designed and operated effectively during the year.
2. Investments (Refer Schedule 8 and 8A of the
Our audit procedures on Investments included the
financial statements and refer schedule 16
following:
note 4.8 on accounting policy)
• Understood Company’s process and controls
The Company’s investment portfolio consists
to ensure proper investments valuation and
of Policyholders investments and Shareholders
impairment process.
investments. Total investment portfolio
represents 78% of the assets as at 31 March
• Tested the design, implementation,
2025 which are valued in accordance with
management oversight and operating
accounting policy framed as per the extant
effectiveness of key controls over the
regulatory guidelines.
valuation process of investments including impairment.
The valuation of all investments is as per the
investment policy framed by the Company
• Obtained independent external confirmations
as per the requirements contained in the
for investments as at balance sheet date from
IRDAI Financial Statements Regulations.
the Custodians and Depository Participants
The valuation methodology specified in
appointed by the Company to confirm the
these aforesaid regulations is applied by the
units of securities for the purpose of valuation
Company for each class of investment which
re-computation.
includes various measurement techniques
such as amortised cost, fair value etc as further
• On a test check basis, recomputed
described in note 4.8 to the accompanying
valuation of different class of investments
financial statements.
to assess appropriateness of the valuation methodologies with reference to IRDAI
The Company has a policy framework for
Investment Regulations along with
Valuation and impairment of Investments. The
Company’s own investment policy.
Company performs an impairment review of its
investments at each balance sheet date and
• Examined movement and appropriateness of
recognizes impairment charge when the
accounting in Fair Value Change account for specific investments.
investments meet the trigger/s for impairment
• Reviewed the Company’s impairment policy
provision as per the criteria set out in the
and assessed the adequacy of its impairment
investment policy of the Company. Such an
charge on investments outstanding at the
assessment of impairment involves significant management judgment.
year end.
• Examined the rating downgrades by credit
The valuation of these investments was
rating agencies and assessed the adequacy
considered one of the matters of material significance in the financial statements due to
of impairments to various investments.
the materiality of the total value of investments
• Evaluated appropriateness and
to the financial statements and thereby
reasonableness of methodology,
identified as a key audit matter for current year
assumptions and judgements used
audit.
by management with reference to the Company’s investment valuation and impairment assessment as per policy.
• Obtained written representations from management on compliance of valuation of investments with the regulations and adequacy of impairment recorded for the year.
and Auditor’s Report Thereon:
6. The Company’s Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis and Director’s Report and the annexure thereto but does not include the financial statements and our auditor’s report/certificate thereon. The Management Discussion and Analysis report and Director’s Report and is expected to be made available to us after the date of this auditor’s report
Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
When we read the Management Discussion and Analysis and Director’s Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
charged with governance for the financial
7. The Company’s Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, underwriting results, financial performance and cash flows of the Company in accordance with the Accounting Standards specified under Section 133 of the Act, read with the Companies (Accounting Standards) Rules, 2021 and other accounting principles generally accepted in India which are not inconsistent with the accounting principles as prescribed IRDAI Financial Statements Regulations, the IRDAI Act and the circulars/orders/directions issued by the IRDAI in this regard. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the financial statements, the management and board of directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management and Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
9. The Board of Directors are also responsible for overseeing the Company’s financial reporting process.
financial statements:
10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, that could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
11. As part of an audit in accordance with SAs specified under section 143(10) of the Act, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has an adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
• Conclude on the appropriateness of Management’s and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
15. The actuarial valuation of liabilities in respect of Incurred But Not Reported (the “IBNR”), Incurred But Not Enough Reported (the “IBNER”) and Premium Deficiency Reserve (the “PDR”) is the responsibility of the Company’s Appointed Actuary (the “Appointed Actuary”). The actuarial valuation of these liabilities, that are estimated using statistical methods as at 31 March 2025 has been duly certified by the Appointed Actuary and in his opinion, the assumptions considered by him for such valuation are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI. We have relied upon the Appointed Actuary’s certificate in this regard for forming our opinion on the valuation of liabilities for outstanding claims reserves and the PDR contained in the financial statements of the Company.
Requirements
16. As required by the IRDAI Financial Statements Regulations, we have issued a separate certificate dated 15 April 2025 certifying the matters specified in paragraphs 3 and 4 of Part III of Schedule II to the IRDAI Financial Statements Regulations.
17. As required by the paragraphs 1 and 2 of Part III of Schedule II to the IRDAI Financial Statements Regulations read with Section 143(3) of the Act, in our opinion and according to the information and explanations give to us, we report, to the extent applicable, that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the accompanying financial statements and those have been found satisfactory;
b) Proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) As the Company’s financial accounting system is centralized, no returns for the purposes of our audit are prepared at the branches and other offices of the Company;
d) The Balance sheet, the Revenue accounts, the Profit and Loss account and the Receipts and Payments account dealt with by this report are in agreement with the books of account;
e) The accounting polices selected by the Company are appropriate and such accounting policies and the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act read with the Companies (Accounting Standards) Rules, 2021 and other accounting principles generally accepted in India read with and which are not inconsistent with the accounting principles prescribed in the IRDAI Financial Statements Regulations, the Insurance Act, IRDAI Act and circulars/orders/
f) Investments have been valued in accordance with the provisions of the Insurance Act, the IRDAI Financial Statements Regulations and/ or orders/directions issued by IRDAI in this regard;
g) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2025 from being appointed as a director in terms of section 164(2) of the Act;
h) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2025 and operating effectiveness of such controls, refer to our separate Report in Annexure A wherein we have expressed an unmodified opinion; and
i) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note no. 5.1.1 and 5.2.22 to the financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts The Company did not have any outstanding long term derivative contracts - Refer Note no. 5.2.23 to the financial statements and “Other Matter” para above;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company - Refer Note no. 5.2.24 to the financial statements.
a. The Management has represented that, to the best of its knowledge and belief, as detailed in note 5.2.19 to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b. The Management has represented that, to the best of its knowledge and belief, as detailed in note 5.2.19 to the financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (‘the Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c. Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above contain any material misstatement.
j) As stated in note 5.2.26 to the accompanying financial statements,
a. The interim dividend declared and paid by the Company during the year ended 31 March 2025 and until the date of this audit report is in compliance with section 123 of the Act.
b. The final dividend paid by the Company during the year, in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
c. The Board of Directors of the C o m p a n y have proposed final dividend for the year ended 31 March 2025 which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, to the extent it applies to proposal of dividend.
k) As Stated in note 5.2.30 to the accompanying financial statements and based on our
examination which included test checks on the software application, the Company, in respect of financial year commencing on 01 April 2024, has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the respective software applications. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Furthermore, the audit trail has been preserved by the Company as per the statutory requirements for record retention from the date the audit trail was enabled for the accounting software.
18. With respect to the other matters to be included in the Auditor’s report, in terms of the requirements of Section 197(16) of the Act, we report that managerial remuneration payable to the Company’s Directors is governed by the provisions of Section 34A of the Insurance Act, 1938 and is approved by IRDAI. Accordingly, the managerial remuneration limits specified under Section 197 of the Act do not apply.
For Walker Chandiok & Co LLP For PKF Sridhar & Santhanam LLP
Chartered Accountants Chartered Accountants
Firm’s Registration Number: Firm’s Registration Number:
001076N/N500013 003990S/S200018
Khushroo B. Panthaky Dhiraj Kumar Birla
Partner Partner
Membership No. 042423 Membership No. 131178
UDIN: 25042423BMNRAI1245 UDIN: 25131178BMLBUB5860
Place: Mumbai Date: April 15, 2025