Auditor Report of General Insurance Corporation of India

Mar 31, 2024

1. We have audited the accompanying Standalone Financial Statements of General Insurance Corporation of India ("the Corporation"), which comprise the Balance Sheet as at 31^st March 2024, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance (collectively known as ''Revenue Accounts''), Profit and Loss Account, the Cash Flow statement for the year ended on that date and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information, in which are incorporated financial information of three branches audited by branch auditors and one unaudited branch. The Company''s branches are listed in Appendix 1.

2. In our opinion and to the best of our information and according to the explanations given to us, based on the consideration of the reports of the branch auditors as referred to in paragraph 7 & 8 of this report, we report that the aforesaid standalone financial statement:

a. give the information required in accordance with the requirements of the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (''the Insurance Act''), the Insurance Regulatory and Development Authority Act, 1999 (''the IRDAI Act''), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 (''the IRDAI Financial Statements Regulations), the Companies Act, 2013 (''the Act'') including the Accounting Standard specified under section 133 of the Companies Act, 2013 to the extent applicable and in manner so required; and

b. give a true and fair view, in conformity with the accounting principles generally accepted in India as applicable to the Insurance Companies, of state of affairs of the Corporation as on 31^st March 2024, surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business, in case of profit and loss account of the profit for the year ended on that date and its cash flows for the year ended on that date.

BASIS FOR OPINION

3. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone 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 together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules 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 together with the audit evidence obtained by the other auditors including the branch auditors in terms of their reports referred to in paragraph 7 & 8 of the Other Matters section below, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

EMPHASIS OF MATTERS

4. We draw attention to the following matters in the Notes to the standalone financial statements:

a. Note No. 24(b) regarding, balances due to/from, the deposits kept with other persons/bodies carrying on Insurance business including reinsurance businesses are under process of reconciliation, and as stated in the note the consequential impact (if any) will be accounted for after its reconciliation.

b. Note No. 56 regarding, to the Standalone Financial Results regarding change in methodology of accrual of premium pursuant to IRDAI circular.

Our opinion is not modified in respect of the above matters.

KEY AUDIT MATTERS

5. Key audit matters are those matters that, in our professional judgement, and based on the consideration of the reports of the branch auditors as referred to paragraph 7 & 8 below, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

6. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No.	Key Audit Matters	How our Audit addressed the Key Audit matter
a)	Revenue Recognition:	our audit procedures on revenue recognized included:
	The Corporation recognizes reinsurance premium income based on the statement of accounts or closing statements received from the ceding companies. At the year end, estimates are made for the accounts not received based on the Estimated Premium Income (EPI) agreed upon by both the Corporation and the Ceding Companies at the time of inception of the treaty or	â¢ Tested the design, implementation and operating effectiveness of key controls over Revenue Recognition. â¢ Verified Premium Estimation with the guidelines of the Corporation and have performed test of controls, test of details and analytical review procedures on estimation of income.
	policy slip. Premium estimation is the differential of	â¢ Verified EPI from the treaty or policy slip as the case may
	EPI and the booked premium for the Corporation.	be and verified Actual Premium booked from Statement of
	Estimation of Income can be considered reasonable	Accounts or Closing statements received from the Cedants
	only when the factors involved in premium estimation are extracted correctly from the IT accounting system.	on the sample basis.
b)	Claim Provisioning:	our audit procedures on claim provisioning included:
	Insurance Claim is the major area of expense for the	â¢ Verified guidelines of the Corporation relating to claim
	insurance company. Total claims incurred include paid	processing, have performed test of controls, test of details
	claims, Outstanding Loss Reserve (OSLR) and Claims	and analytical review procedures on the outstanding
	Incurred but Not (Enough) Reported (IBNER).	claims. Verified the claim paid and provision created on
	The Provision and payment of claims was considered to be one of the areas which required significant auditor attention and was one of the matter of most	sample basis with payment proof and Preliminary Loss advice received from the Cedant Company and the same is further verified from the surveyor''s report.
	significance in the Standalone Financial Statements as	â¢ For the claim cases which has been incurred but not reported
	the quantum involved is significant.	and cases in which claim has been reported but not enough reported, these cases has been captured by the actuaries appointed by the Corporation. The Actuarial valuation of liability in respect of Claims Incurred but Not Reported (IBNR) and those Incurred but Not Enough Reported (IBNER) as at March 31^st, 2024, is as certified by the Corporation''s Appointed Actuaries and we had audited the amounts and the related liability, based on such report.

Sr. No.

Key Audit Matters

How our Audit addressed the Key Audit matter

Valuation of Investments:

The Corporation''s investments represent a substantial portion of the assets as of 31^st March 2024, which are to be valued in accordance with accounting policy framed as per the extent of the regulatory guidelines.

The valuation of all investments should be as per the investment policy framed by the Company which in turn should be in line with IRDAI Investment Regulations and Preparation of Financial Statement Regulations. The valuation methodology specified in the regulation is to be used for each class of investment.

The Company has a policy framework for Valuation and impairment of Investments. The Company performs an impairment review of its investments periodically and recognizes impairment charge when the investments meet the trigger/s for impairment provision as per the criteria set out in the investment policy of the Company. Further, the assessment of impairment involves significant management judgment. The classification and valuation of these investments was considered one of the matters of material significance in the audit of Standalone Financial Statements due to the materiality of the total value of investments to the Standalone Financial Statements.

our audit procedures on Investment included the following:

â¢ Understood Management''s process and controls to ensure proper classification and valuation of Investment.

â¢ Verified and obtained appropriate external confirmation for availability and ownership rights related to these investments.

â¢ Tested the design, implementation, management oversight and operating effectiveness of key controls over the classification and valuation process of investments.

â¢ Test-checked valuation of different class of investments to assess appropriateness of the valuation methodologies with reference to IRDAI Investment Regulations along with Company''s own investment policy.

â¢ Reviewed the Company''s impairment policy and assessed the adequacy of its impairment charge on investments outstanding at the Year end.

â¢ Based on procedures above, we found the company''s impairment, valuation, and classification of investments in its Standalone Financial Statements in all material respects to be fair.

Ascertainment, disclosure and provisions of contingent liabilities:

The Company has material uncertain tax matters, both direct and indirect, under dispute involving considerable demand raised on the Company which require significant judgment to determine the possible outcome of these disputes.

Additionally, the Company has other ongoing legal matters relating to various claims not acknowledged as debts which require application of management judgement in order to determine the likely outcome.

Management''s disclosures with regards to provisions and contingent liabilities relating to ongoing litigation are presented in Note No. 46 to the Company''s Standalone Financial Statements.

our audit procedures included, but were not limited to the following:

â¢ Obtained understanding of the process of identification and measurement of provisions and contingent liabilities relating to ongoing litigations implemented by the management, through various discussions held with company''s legal and finance personnel.

â¢ Tested the design and operating effectiveness of the controls put in place by the management in relation to assessment of the outcome of the pending litigations at various level of regulatory authorities and judicial hierarchy.

â¢ Inspected the summary of litigation matters and discussed key developments during the year with the Company''s Legal and Finance personnel.

Sr. No.

Key Audit Matters

How our Audit addressed the Key Audit Matter

The assessment of whether a liability is recognised as a provision or disclosed as a contingent liability in the standalone financial statements is inherently subjective and requires significant management judgement in determination of the cash outflows from the business, interpretation of applicable laws and regulations, and careful examination of pending assessments at various levels of regulatory authorities.

Since the amounts involved are significant and due to the range of possible outcomes leading to high estimation uncertainty that requires significant management and auditor judgement, this matter is considered to be a key audit matter for the current year audit.

â¢ Inspected and evaluated, where applicable, external legal and/or regulatory advice sought by the Company.

â¢ Discussed and challenged the management''s assessment of the likelihood, magnitude and accounting of any liability that may arise in certain material cases. Accordingly, we reviewed the amount of provisions recognised and contingent liabilities disclosed in the standalone financial statements and exercised our professional judgment to assess appropriateness of such conclusions, involving experts as required.

â¢ Evaluated the adequacy of disclosures made in the standalone financial statements in accordance with the applicable accounting standards.

OTHER MATTERS

7. We did not audit the financial information of two foreign branches and one Indian branch included in the Standalone Financial Statements, whose audited financial information reflect total assets (before eliminations) of '' 6,08,80,098 thousands as at 31^st March 2024 and total Premiums earned (Net) (before eliminations) of '' 1,46,25,364 thousands and Loss after Tax (before elimination) of '' 2,51,389 thousands for the year ended on that date respectively, as considered in the Standalone Financial Statements. These financial information have been audited by another auditor whose report has been furnished to us and our conclusion on the Standalone Financial Statements, in so far as it relates to the amounts and disclosures included in respect of these branches is based solely on the report of another auditor.

8. We did not audit the financial information of One foreign branch included in this Standalone Financial Statements whose unaudited financial information reflects total assets (before eliminations) of '' 3,37,01,841 thousand as at 31^st March 2024 and Premiums earned (Net) (before eliminations) of '' 1,10,42,593 thousand and Loss after Tax (before eliminations '' 15,32,692 thousand for the year ended on that date as considered in the Standalone Financial Statements.

9. Three branches are located outside India whose financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been reviewed by other auditors or local management certified under generally accepted auditing standards applicable in their respective countries. The Corporation''s management has converted the financial information of such branches located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have reviewed these conversion adjustments made by the Corporation''s management. Our conclusion in so far as it relates to the balances and affairs of such foreign branches located outside India is based on the report of another auditor/management certified accounts and the material conversion adjustments prepared by the management of the Corporation reviewed by us.

10. The Standalone Financial Statements include the financial information of Dubai branch which has intimated the Run-off branch status as per the audited financial information received for the year ended 31^st March 2024. The auditors of the branch have also stated that the Branch is not looked upon as a Going Concern in the future as a Portfolio Transfer Agreement has been entered on 14^th September 2022, between GIC Gift City Branch and Dubai Branch.

11. The actuarial valuation of liabilities in respect of Incurred But Not Reported (the "IBNR") including Incurred but not Enough Reported (the "IBNER"), Premium Deficiency Reserve (the "PDR") and Technical Reserves (the "TR") is the responsibility of the Corporation''s Appointed Actuaries (the "Appointed Actuaries"). The actuarial valuation of these liabilities, that are estimated using statistical methods, as at 31^st March 2024 has been duly certified by the Appointed Actuaries and in their opinion, the assumptions considered by them for such valuations 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 Corporation''s Appointed Actuaries''

Certificates in this regard for forming our conclusion on the valuation of liabilities for outstanding claims reserves, the PDR and TR contained in the Standalone Financial statements of the Corporation.

12. The Standalone Financial Statements of the Corporation for the year ended 31^st March 2023 were audited by D.R. Mohnot & Co and PKF Sridhar & Santhanam LLP, previous joint statutory auditor of the corporation who have expressed unmodified opinion vide their audit report dated 25^th May 2023.

Our report is not modified in respect of the above matters.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR''S REPORT THEREON

13. The Corporation''s Management and Board of Directors is responsible for preparation of the other information. The other information comprises the information included in the Annual Report including Annexures to Board''s Report, Management Discussion and Analysis, Business Responsibility Report and Report on Corporate Governance, but does not include the Standalone Financial Statements and our auditor''s report thereon. This Annual Report and other information are expected to be made available to us after the date of this auditors'' report.

Our opinion on the Standalone 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 Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matters to those charged with governance.

RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS.

14. The accompanying standalone financial statements have been approved by the Company''s Board of Directors. The Corporation''s Board of Directors is responsible for matters as stated in section 134(5) of the companies act, 2013 ("the act") with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and Cash flows of the Corporation in accordance with the Insurance Act 1938, as amended, by the Insurance Laws (Amendment) Act, 2015 (''the Insurance Act''), the Insurance Regulatory and Development Authority Act, 1999 (''the IRDAI Act''), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 (''the IRDAI Financial Statements Regulations''), the Companies Act, 2013 (''the Act'') including the Accounting Standard specified under section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India.

15. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding of the assets of the Corporation 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 & presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

16. In preparing the Standalone Financial Statements, the management is responsible for assessing the ability of the Corporation''s to continue as Going Concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, as has no realistic alternative but to do so.

17. The Board of Directors is also responsible for overseeing the Corporation''s financial reporting process.

AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

18. Our Objective are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatements, 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 SA''s 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, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

19. As part of an audit in accordance with SA''s, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatements of the Standalone Financial Statements, whether due to fraud and 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, misrepresentation, or the override of internal controls.

â¢ Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Corporation has in place an adequate internal financial control systems over financial reporting and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of the management use of going concern basis of accounting and, based on audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation''s ability to continue as a going concern. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or condition may cause the Corporation to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

20. 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.

21. We also provide those charged with governance with a statement that we have complied with the 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.

22. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of Standalone 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.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

23. As required by the IRDAI Financial Statements Regulations, we have issued a separate certificate dated 28^th May 2024 certifying the matters specified in paragraphs 3 and 4 of Schedule C to the IRDAI Financial Statement Regulations (refer to our separate report in "Annexure A").

24. Based on our audit and on the consideration of the reports of the branch auditors as referred to in paragraph 7 & 8 above, we report that the provisions of section 197 read with Schedule V to the Act are not applicable to the Company since the Company is a Government company as defined under section 2(45) of the Act. Accordingly, reporting under section 197(16) is not applicable.

25. As required by Section 143 (3) of the Companies Act, 2013 and Insurance Regulatory and Development Authority (Preparation

of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 and orders or direction issued by the

Insurance Regulatory and Development Authority, based on our audit, and on the consideration of the reports of the branch

auditors as referred to in paragraph 7 & 8 above, 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 purpose of our audit of the accompanying standalone financial statements;

b) In our opinion, 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

c) The reports on the accounts of the three branch offices of the Company audited under section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;

d) The Standalone Balance Sheet, Standalone Revenue Accounts, Standalone Profit and Loss Account and Standalone Cash Flow Statement dealt by this Report are in agreement with the books of accounts and with the returns received from the branches/representative offices not visited by us.

e) The Actuarial valuation of liabilities as on 31^st March 2024 is duly certified by the corporation''s appointed actuary including to the effect that the assumptions for such valuation are in accordance with the guidelines issued by the Institute of Actuaries of India to its members and has been forwarded to IRDAI.

f) The Standalone Balance Sheet, Standalone Revenue Accounts, Standalone Profit and Loss Account have been drawn in accordance with the Insurance Act 1938, IRDAI Act, 1999 and the Act except for the Standalone Cash Flow Statement, (refer Note 55) which is prepared under indirect method, whereas IRDAI regulations require Cash Flow Statements to be prepared under Direct Method.

g) Investments have been valued in accordance with the provisions of the Insurance Act, the regulations and orders/directions issued by IRDAI in this regard except investment which have been considered as fully impaired are not fair valued as required by para 6(c) of the IRDAI Financial Statements Regulations.

h) In our opinion, the aforesaid standalone financial statements comply with Accounting Standards specified under the Act, the Accounting policies selected by the Corporation are appropriate and are in accordance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDAI (Auditor''s Report) Regulations, 2002 or any order or direction issued by IRDAI in this behalf.

i) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under section 133 of the Act in conformity with the accounting principles prescribed in the IRDAI regulations.

j) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, we report that the provisions of section 197 of the act are not applicable to the Corporation vide notification No. GSSR 463 (E) dated June 5^th, 2015. Hence reporting u/s 197 (16) of the Act is not required.

k) The Corporation being an Insurance Company, the Companies (Auditor''s Report) Order, 2020 ("the order") as amended, issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act is not applicable.

l) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate report in "Annexure B".

m) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit & Auditors) Rules 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The standalone financial statements disclose the impact of pending litigations on the standalone financial position of the Company as at 31^st March 2024, as detailed in note 46 to the standalone financial statements;

(ii) Provisions have been made as on 31^st March 2024 in the Standalone Financial Statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. There were no derivative contracts as on 31^st March 2024.

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Corporation.

(iv) (a) The Management has represented that, to the best of their knowledge and belief, no funds (which are material

either individually or in the aggregate) 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 or entity, including foreign entity ("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 ("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 their knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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;

(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 representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

(v) The Board of Directors of the Company has proposed a final dividend for the year 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, as applicable.

(vi) Based on our examination which included test checks, the corporation 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 operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

26. As required under section 143(5) of the Companies Act, 2013 based on our audit as aforesaid, we enclose herewith, as per "Annexure C" the directions including the additional directions issued by Comptroller and Auditor General of India, action taken thereon and the financial impact on the accounts and the Standalone Financial Statements of the Corporation.

for KASG & Co. for Mehra Goel & Co.

Chartered Accountants Chartered Accountants

ICAI Firm Registration Number: 002228C ICAI Firm Registration Number: 000517N

CA. Bharat Goel CA. Vaibhav Jain

Partner Partner

Membership No.: 060069 Membership No.: 515700

UDIN: 24060069BKGYXW4792 UDIN: 24515700BKBXZI2400

Place: Mumbai Place: Mumbai

Date: 28-05-2024 Date: 28-05-2024

APPENDIX 1

List of Branches audited by Branch Auditors

1. GIC Re, Gift City, India 2. GIC Re, Dubai, UAE 3. GIC Re. London, UK

list of Branch unaudited

4. GIC Re, Malaysia

Mar 31, 2023

General Insurance Corporation of India

Report on the Audit of Standalone Financial Statements

1. Opinion

We have audited the accompanying Standalone Financial Statements of General Insurance Corporation of India ("the Corporation"), which comprise the Balance Sheet as at March 31^st, 2023, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance (Collectively known as ''Revenue Accounts''), Profit and Loss Account, the Cash Flow statement for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information, in which are incorporated financial information of three foreign branches out of which two branches have been audited by local auditors appointed by the Corporation and one unaudited foreign branch and one domestic branch whose auditors are appointed by Comptroller and Auditor General of India, New Delhi.

In our opinion and to the best of our information and according to the explanations given to us, we report that the aforesaid Standalone Financial Statements give the information required in accordance with the requirements of the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (''the Insurance Act''), the Insurance Regulatory and Development Authority Act, 1999 (''the IRDAI Act''), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 (''the IRDAI Financial Statements Regulations), the Companies Act, 2013 (''the Act'') including the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (''the Accounting Standards'') to the extent applicable and in manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India as applicable to the Insurance Companies, of state of affairs of the Corporation as on March 31^st, 2023, surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business, in case of profit and loss account of the profit for the year ended on that date and its cash flows for the year ended on that date.

2. Basis For Opinion

We conducted our Audit in accordance with the Standards on Auditing (''SA''s'') specified under section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India ("ICAI"). Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the ICAI together with the ethical requirements that are relevant to our Audit of the financial statements under the provisions of the Companies act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidences we have obtained is sufficient and appropriate to provide a basis for our opinion.

3. Emphasis of Matter

a) We draw attention to Note No. 26 (b) of the Standalone Financial Statements, some of the balances due to/from entities carrying on Insurance business including reinsurance businesses are subject to confirmations and/or reconciliation, and as stated in the note the consequential impact (If any) will be accounted after complete confirmations and/or reconciliation.

b) We draw attention to Note No. 27 of the Standalone Financial Statements wherein Corporation has mentioned about creation of Catastrophe Reserve during the current financial year.

Our opinion is not modified on the above matters.

4. Key Audit Matters

Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide

a separate opinion on these matters. We have determined the matters below to be the key audit matters to be communicated in our report.
\|S. No.	Key Audit Matters	Auditor''s response
1.	Revenue Recognition: The Corporation recognizes reinsurance premium income based on the statement of accounts or closing statements received from the ceding companies. At the year end, estimates are made for the accounts not received based on the Estimated Premium Income (EPI) agreed upon by both the Corporation and the Ceding Companies at the time of inception of the treaty or policy slip. Premium estimation is the differential of EPI and the booked premium for the year by the Corporation. Estimation of Income can be right only if the factors involved are incorporated in the system and extracted correctly from the system.	Our audit procedures on revenue recognized included: Tested the design, implementation and operating effectiveness of key controls over Revenue Recognition. Verified Premium Estimation with the guidelines of the Corporation and have performed test of controls, test of details and analytical review procedures on estimation of income. Verified EPI from the treaty or policy slip as the case may be and verified Actual Premium booked from Statement of Accounts or Closing statements received from the Cedants of the sample cases.
2.	Claim Provisioning: Insurance Claim is the major area of expense for the insurance company. Total claims incurred include paid claims, Outstanding Loss Reserve (OSLR) and Claims Incurred But Not (Enough) Reported (IBN(E)R). The Provision and payment of claims was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the Standalone Financial Statements as the quantum involved is significant.	Verified operational guidelines of the Corporation relating to claim processing, have performed test of controls, test of details and analytical review procedures on the outstanding claims. Verified the claim paid and provision on sample basis with payment proof and Preliminary Loss advice received from the Cedant Company and the same is further verified from the surveyor''s report. For the claim cases which has been incurred but not reported and cases in which claim has been reported but not enough reported these cases has been captured by the actuary appointed by the Corporation. The actuarial valuation of liability in respect of Claims Incurred but Not Reported (IBNR) and those Incurred but Not Enough Reported (IBNER) as at March 31^st, 2023, is as certified by the Corporation''s Appointed Actuary and we had verified the amounts and the related liability, based on such report.
3.	Investments: The Corporation''s investments represents substantial portion of the assets as at March 31^st, 2023 which are to be valued in accordance with accounting policy framed as per the extent of the regulatory guidelines. The valuation of all investments should be as per the investment policy framed by the Company which in turn should be in line with IRDAI Investment Regulations and Preparation of Financial Statement Regulations. The valuation methodology specified in the regulation is to be used for each class of investment.	Our audit procedures on Investment included the following: â¢ Understood Management''s process and controls to ensure proper classification and valuation of Investment. â¢ Verified and obtained appropriate external confirmation for availability and ownership rights related to these investments. â¢ Tested the design, implementation, management oversight and operating effectiveness of key controls over the classification and valuation process of investments. â¢ Test-checked valuation of different class of investments to assess appropriateness of the valuation methodologies with reference to IRDAI Investment Regulations along with Company''s own investment policy.

S. No.

Key Audit Matters

Auditor''s response

The classification and valuation of these investments was considered one of the matters of material significance in the audit of Standalone Financial Statements due to the materiality of the total value of investments to the Standalone Financial Statements.

â¢ Reviewed the Company''s impairment policy and assessed the adequacy of its impairment charge on investments outstanding at the year end.

Based on procedures above, we found the company''s impairment, valuation and classification of investments in its Standalone Financial Statements in all material respects to be fair.

5. Information Other than the Financial Statements and Auditor''s Report Thereon

The Corporation''s Board of Directors is responsible for preparation of the other information. The other information comprises the information included in the Board''s Report including Annexures to Board''s Report, Management Discussion and Analysis, Business Responsibility Report and Report on Corporate Governance, but does not include the Standalone Financial Statements and our auditor''s report thereon. These other information are expected to be made available to us after the date of this auditor''s report. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

When we read the other information, If we conclude that there is a material misstatement therein, we are required to communicate the matters to those charged with governance and determine the actions under the applicable laws and regulations.

6. Responsibilities of the management and those charged with governance for the financial statements

The Corporation''s Board of Directors is responsible for matters as stated in section 134(5) of the companies act, 2013 ("the act") with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and Cash flows of the Corporation in accordance with the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (''the Insurance Act''), the Insurance Regulatory and Development Authority Act, 1999 (''the IRDAI Act''), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 (''the IRDAI Financial Statements Regulations''), the Companies Act, 2013 (''the Act'') including the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding of the assets of the Corporation 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 & presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the ability of the Corporation''s to continue as Going Concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, as has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Corporation''s financial reporting process.

7. Auditor''s Responsibilities for the Audit of the Financial Statements

Our Objective are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatements, 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 SA''s will always detect a material misstatements when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Corporation has in place and adequate internal financial control systems over financial reporting and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of the management use of going concern basis of accounting and, based on audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation''s ability to continue as a going concern. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or condition may cause the Corporation to cease to continue as a going concern.

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.

We also provide those charged with governance with a statement that we have complied with the 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of Standalone 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.

8. Other Matters:

a) We did not audit the financial information of three foreign branches and one Indian branch included in the Standalone Financial Statements, whose audited financial information reflect Premiums earned (Net) (before eliminations) of ? 2,35,35,300 thousands and total profit after tax (before eliminations) of ? 27,32,985 thousands for the year ended March 31^st, 2023, as considered in the audited Standalone Financial Statements. These financial information other than Malaysian Branch have been audited by another auditor whose report has been furnished to us except Malaysian Branch. The Corporation''s management has converted the financial information of such branches located outside India to accounting principles generally accepted in India and certain conversion adjustments were accounted. We have audited these conversion adjustments made by the Corporation''s management.

Our opinion on the Standalone Financial Statements, in so far as it relates to the amounts and disclosures included in respect of these three foreign branches and one Indian branch is based solely on the report of another auditor except for unaudited Malaysian Branch where we have relied on Management certified financial information.

b) The Standalone Financial Statements include the financial information of Dubai branch which has intimated the Run-off branch status as per the audited financial information received for the year ended March 31^st, 2023. The auditors of the branch have also stated that the Branch is not looked upon as a Going Concern in the future as a Portfolio Transfer Agreement has been entered on September 14^th, 2022 between GIC Gift City Branch and Dubai Branch.

c) The actuarial valuation of liability in respect of Claims Incurred but not Reported (IBNR) and those Incurred but not Enough Reported (IBNER) as at March 31^st, 2023 is as certified by the Corporation''s Appointed Actuaries and our opinion in so far as it relates to the amounts and disclosures related to such liability, is based solely on such report.

d) The Standalone Financial Statements of the Corporation for the year ended March 31^st, 2022, were audited by D.R. Mohnot & Co, one of the joint auditors of the Corporation and other previous joint auditor whose report dated May 27^th, 2022 expressed a modified opinion on the Standalone Financial Statements.

Our Report is not modified in respect of the above matters.

9. Report on Other Legal and Regulatory Requirements

1. As required by the IRDAI Financial Statements Regulations, we have issued a separate certificate dated May 25^th, 2023 certifying the matters specified in paragraphs 3 and 4 of Schedule C to the IRDAI Financial Statement Regulations.

2. As required by Section 143 (3) of the Companies Act, 2013 and Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 and orders or direction issued by the Insurance Regulatory and Development Authority, we report 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 purpose of our audit and have found them to be satisfactory.

b) In our opinion and to the best of our information and according to the explanations given to us, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns (audited/certified) have been received from the four branches, not visited by us.

c) The reports of the three foreign branches and one domestic branch on the accounts of the branch offices of the Corporation audited/certified by the branch auditors under section 143(8) of the Act, have been sent to us and have been properly dealt with by us in preparing this report.

d) The Balance Sheet, Revenue Accounts, Profit and Loss Account and Cash Flow Statement dealt by this Report are in agreement with the books of accounts and with the returns received from the branches/representative offices not visited by us.

e) The Actuarial valuation of liabilities as on March 31^st, 2023 is duly certified by the appointed actuary including to the effect that the assumptions for such valuation are in accordance with the guidelines issued by the Institute of Actuaries of India to its members and has been forwarded to IRDAI.

f) The Balance Sheet, Revenue Accounts, Profit and Loss Account have been drawn in accordance with the Insurance Act 1938, IRDAI Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 55) which is prepared under indirect method, whereas IRDAI regulations require Cash Flow Statements to be prepared under Direct Method.

h) The Accounting policies selected by the Corporation are appropriate and are in accordance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDAI (Auditor''s Report) Regulations, 2002 or any order or direction issued by IRDAI in this behalf.

i) On the basis of written representations received from the directors as on March 31^st, 2023 taken on record by the board of directors, none of the directors is disqualified as on March 31^st, 2023 form being appointed as a director in terms of section 164(2) of the Act.

j) In our opinion the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules 2016, and also in conformity with the accounting principles prescribed in the IRDAI regulations.

k) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, we report that the provisions of section 197 of the act are not applicable to the Corporation vide notification No. GSSR 463 (E) dated June 5^th, 2015. Hence reporting u/s 197 (16) of the Act is not required.

l) The Corporation being an Insurance Company, the Companies (Auditor''s Report) Order, 2020 ("the order") as amended, issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act is not applicable.

m) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate report in "Annexure A".

n) As required under section 143(5) of the Companies Act, 2013 based on our audit as aforesaid, we enclose herewith, as per "Annexure B" the directions including the additional directions issued by Comptroller and Auditor General of India, action taken thereon and the financial impact on the accounts and the Standalone Financial Statements of the Corporation.

o) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit & Auditors) Rules 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact of pending Litigations on its financial position in Note 47 to the Standalone Financial Statements;

ii. Provisions has been made as on March 31^st, 2023 in the Standalone Financial Statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. There were no derivative contracts as on March 31^st, 2023.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Corporation.

iv. (a) The Management has represented that, to the best of their knowledge and belief, no funds (which are material

v. The Board of Directors of the Company have proposed final dividend for the year 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, as applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 relating to maintenance of audit trail in software systems involved in financial reporting is applicable with effect from April 1^st, 2023 to the Company, accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31^st, 2023.

For PKF SRIDHAR & SANTHANAM LLP For D.R. MOHNOT & CO

Chartered Accountants Chartered Accountants

ICAI Firm Registration ICAI Firm Registration

No:0039905/S200018 No:001388C

Partner: S Narasimhan Partner: D.R. Mohnot

Membership No. 206047 Membership No. 070579

UDIN: 23206047BGUMVE2414 UDIN: 23070579BGUINC8823

Place: Mumbai Place: Mumbai

Date: May 25^th, 2023 Date: May 25^th, 2023

Mar 31, 2022

Report on the Audit of Standalone Financial Statements1. Qualified Opinion

We have audited the accompanying Standalone Financial Statements of General Insurance Corporation of India ("the Corporation"), which comprise the Balance Sheet as at 31^st March, 2022, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance (Collectively known as'' Revenue Accounts''), Profit and Loss Account, the Cash Flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, in which are incorporated returns of three foreign branches including one run off branch at Dubai whose auditors are appointed by the Corporation, except for one foreign branch (Malaysia) which has not been audited and one domestic branch audited by branch auditors appointed by Comptroller and Auditor General of India, New Delhi.

In our opinion and to the best of our information and according to the explanations given to us except for the effects of the matters described in the basis of qualified opinion section of our report, the aforesaid standalone financial statements give the information required in accordance with the requirements of the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (''the Insurance Act''), the Insurance Regulatory and Development Authority Act, 1999 (''the IRDAI Act''), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 (''the IRDAI Financial Statements Regulations), the Companies Act, 2013 (''the Act'') including the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (''the Accounting Standards'') to the extent applicable and in manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India as applicable to the Insurance Companies: of state of affairs of the Corporation as on 31^st March, 2022, surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business, in case of profit and loss account of the profit for the year ended on that date and its cash flows for the year ended on that date.

2. Basis For Qualified Opinion

Balances due to/from entities carrying on Insurance business including reinsurance businesses are subject to confirmations and/ or reconciliation (refer note 26 b). The consequential impact on the Standalone Financial Statements of the corporation for the quarter/year ended as on 31^st March, 2022, is unascertainable.

3. Key Audit Matters

Key Audit Matters are those matters that, in our professional judgment, 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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters below to be the key audit matters to be communicated in our report.

S. No.

Key Audit Matters

Auditor''s response

Revenue Recognition:

The Corporation recognizes reinsurance premium income based on the statement of accounts or closing statements received from the ceding companies. At the year end, estimates are made for the accounts not received, based on the Estimated Premium Income (EPI) agreed upon by both the Corporation and the Ceding Companies at the time of inception of the treaty or policy slip. Premium estimation is the differential of EPI and the booked premium for the year by the Corporation. Estimation of Income can be right only if the factors involved are incorporated in the system and extracted correctly from the system.

Our audit procedures on revenue recognized included:

Tested the design, implementation and operating effectiveness of key controls over Revenue Recognition.

Verified Premium Estimation with the guidelines of the Corporation and have performed test of controls, test of details and analytical review procedures on estimation of income.

Verified EPI from the treaty or policy slip as the case may be and verified Actual Premium booked from Statement of Accounts or Closing statements received from the Cedants of the sample cases

Claim Provisioning:

Insurance Claim is the major area of expense for the insurance company. Total claims incurred include paid claims, Outstanding Loss Reserve (OSLR) and Claims Incurred But Not (Enough) Reported (IBN(E)R).

The Provision and payment of claims was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the standalone financial statements as the quantum involved is significant.

Verified operational guidelines of the Corporation relating to claim processing, have performed test of controls, test of details and analytical review procedures on the outstanding claims. Verified the claim paid and provision on sample basis with payment proof and Preliminary Loss advice received from the Cedant Company and the same is further verified from the surveyor''s report.

For the claim cases which has been incurred but not reported and cases in which claim has been reported but not enough reported these cases has been captured by the actuary appointed by the Corporation. The actuarial valuation of liability in respect of Claims Incurred but Not Reported (IBNR) and those Incurred but Not Enough Reported (IBNER) and Premium Deficiency Reserve (PDR) as at 31^st March, 2022, is as certified by the Corporation''s Appointed Actuary and we had verified the amounts and the related liability, based on such report.

3. Investments:

Our audit procedures on Investment included the following:

Tested the design, implementation and operating effectiveness of key controls over valuation process of investments.

Assessed appropriateness of the valuation methodologies with reference to prudential norms of the Reserve Bank of India and IRDAI along with Corporation''s own valuation policy.

Sample checks for actively traded equity shares, ETF''s, debt securities, Redeemable Preference shares, ETF''s etc., are performed by us to determine the correctness of the valuation of these investments.

For other investments, tested whether the Corporation has strictly complied with the policy

The Corporations investments represents substantial portion of the assets as at March 31,2022 which are valued in accordance with accounting policy framed as per the extent of the regulatory guidelines.

Valuation of actively traded equity shares and ETFs is made on the closing price of NSE. If such security is not listed/ not traded on NSE on closing day, the closing price of BSE is considered.

Valuation of thinly traded equity shares and unlisted shares as per policy adopted by the Corporation. All debts securities including Government securities and Redeemable Preference shares have been measured at historical cost subject to amortization of premium paid over residual period. The valuation of these investments was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the standalone financial statements due to the materiality of the total value of investments to the financial statements.

4. "Information Other than the Financial Statements and Auditor''s Report Thereon"

The Corporation''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual report/Board''s report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to communicate he matters to those charged with governance and determine the actions under the applicable laws and regulations.

5. Responsibilities of the management and those charged with governance for the financial statements

The Corporation''s Broad of Directors is responsible for matters as stated in section 134(5) of the companies act, 2013 ("the act") with respect to the preparation of these Financial Statements that give a true and fair view of the financial position, financial performance and Cash flows of the Corporation in accordance with the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (''the Insurance Act''), the Insurance Regulatory and Development Authority Act, 1999 (''the IRDAI Act''), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 (''the IRDAI Financial Statements Regulations), the Companies Act, 2013 (''the Act'') including the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding of the assets of the Corporation 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 & presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the ability of the Corporation to continue as Going Concern, disclosing, as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, as has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Corporation''s financial reporting process.

6. Auditor''s Responsibilities for the Audit of the Financial Statements

Our Objective are to obtain reasonable assurance about whether the Financial Statements as a whole are free from Material Misstatements, 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 SA''s will always detect a material Misstatements when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SA''s, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatements of the financial statements, whether due to fraud and 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 misstatements resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentation , or the override of internal controls.

â¢ Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Corporation has in place and adequate internal financial control systems over financial reporting and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of the management''s use of going concern basis of accounting and, based on audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation ability continue as a going concern. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or condition may cause the Corporation to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 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.

7. Other Matters:

a) We did not audit the financial statements/information of three foreign branches, and one domestic branch included in the standalone financial statements of the Corporation whose financial statements /financial information reflect total assets of '' 849,09,088.35 Thousand (Previous Year '' 818,76,283.88 Thousand) as at March 31,2022 and total revenues of '' 275,11,048.08 Thousand (Previous Year '' 299,15,507.25 Thousand) for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches have been audited/certified by the other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and office, is based solely on the report of such auditors.

b) The actuarial valuation of liability in respect of Claims Incurred but not Reported (IBNR) and those Incurred but not Enough Reported (IBNER) and Premium Deficiency Reserve (PDR) as at 31^st March, 2022 is as certified by the Corporation''s Appointed Actuaries and our opinion in so far as it relates to the amounts and disclosures related to such liability, is based solely on such report.

Our Report is not modified in respect of the above matters.

8. Report on Other Legal and Regulatory Requirements

1. As required by the IRDAI Financial Statements Regulations, we have issued a separate certificate dated May 27, 2022 certifying the matters specified in paragraphs 3 and 4 of Schedule C to the IRDAI Financial Statement Regulations.

2. As required by Section 143 (3) of the Companies Act , 2013 and Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 and orders or direction issued by the Insurance Regulatory and Development Authority, we report that:

a) We have sought and except for the matters described in the basis of qualified opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and have found them to be satisfactory.

b) Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion and to the best of our information and according to the explanations given to us, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns (audited/certified) have been received from the four branches, not visited by us.

c) The reports of the three foreign branches (except for Malaysia Branch) and one domestic branch on the accounts of the branch offices of the Corporation audited/certified by the branch auditors under section 143(8) of the Act have been sent to us and have been properly dealt with by us in preparing this report.

e) The Actuarial valuation of liabilities as on 31^st March, 2022 is duly certified by the appointed actuary including to the effect that the assumptions for such valuation are in accordance with the guidelines issued by the Institute of Actuaries of India to its members and has been forwarded to IRDAI.

f) The Balance Sheet, Revenue Accounts, Profit and Loss Account have been drawn in accordance with the Insurance Act 1938, IRDAI Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 56) which is prepared under indirect method, whereas IRDAI regulations require Cash Flow Statements to be prepared under Direct Method.

g) Investments have been valued in accordance with the provisions of the Insurance Act, the regulations and orders/directions issued by IRDAI in this regard.

i) On the basis of written representations received from the directors as on 31^st March, 2022 taken on record by the board of directors, none of the directors is disqualified as on 31^st March, 2022 form being appointed as a director in terms of section 164(2) of the Act.

j) In our opinion the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules 2016, and also in conformity with the accounting principles prescribed in the IRDAI regulations.

k) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, we report that the provisions of section 197 of the act are not applicable to the Corporation vide notification No. GSSR 463 (E) dated June 5 2015, hence reporting u/s 197 (16) of the Act is not required.

n) As required under section 143(5) of the Companies Act, 2013 based on our audit as aforesaid, we enclose herewith, as per Annexure "B", the directions including the additional directions issued by Comptroller and Auditor General of India, action taken thereon and the financial impact on the accounts and the financial statements of the Corporation.

i. The Corporation has disclosed the impact of pending Litigations on its financial position in Note 47 to the financial statements;

ii. Provisions has been made as on March 31, 2022, in the Standalone Financial Statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. There were no derivative contracts as on March 31, 2022.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Corporation.

iv. (a) The Management has represented that, to the best of their knowledge and belief, no funds (which are material

Mar 31, 2021

General Insurance Corporation of India,

Report on the Audit of Standalone Financial Statements1. Opinion

We have audited the accompanying Standalone Financial Statements of General Insurance Corporation of India (âthe Corporationâ), which comprise the Balance Sheet as at 31^st March 2021, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance (Collectively known asâ Revenue Accountsâ), Profit and Loss Account, the Cash Flow statement for the year ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, in which are incorporated returns of three foreign branches whose auditors are appointed by the Corporation and one domestic branch audited by branch auditors appointed by Comptroller and Auditor General of India, New Delhi.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required in accordance with the requirements of the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (âthe Insurance Actâ), the Insurance Regulatory and Development Authority Act, 1999 (âthe IRDAI Actâ), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditorâs Report of Insurance Companies) Regulations, 2002 (âthe IRDAI Financial Statements Regulations), the Companies Act, 2013 (âthe Actâ) including the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (âthe Accounting Standardsâ) to the extent applicable and in manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India as applicable to the Insurance Companies of state of affairs of the Corporation as on 31^st March 2021, surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business,in case of profit and loss account of the profit for the year ended on that date and its cash flows for the year ended on that date.

2. Basis For Opinion

We conducted our Audit in accordance with the Standards on Auditing (âSAâsâ) specified under section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India (âICAIâ). Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the ICAI together with the ethical requirements that are relevant to our Audit of the financial statements under the provisions of the Companies act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidences we have obtained is sufficient and appropriate to provide a basis for our opinion.

3. Emphasis of Matter

a) We draw attention to Note No. 25 (b) of the standalone financial statements, Balances due to/from entities carrying on Insurance business including reinsurance businesses are subject to confirmations and/or reconciliation, and as stated in the note the consequential impact (If any) will be accounted after confirmations and/or reconciliation.Further as stated in the said note management has reversed unreconciled balances older than three years in the current financial year.

b) We draw attention to Note No. 53 of the standalone financial results regarding the uncertainties arising out of the outbreak of COVID-19 pandemic and the assessment made by the management on its business and financials, for the year ended March 31, 2021, this assessment and the outcome of the pandemic is as made by the management and the outcome is dependent on the circumstances as they evolve in the subsequent periods.

Our opinion is not modified on the above matters.

4. Key Audit Matters

S.No.	Key Audit Matters	Auditor''s response
1.	Revenue Recognition: The Corporation recognises reinsurance premium income based on the statement of accounts or closing statements received from the ceding companies. At the year end, estimates are made for the accounts not received based on the Estimated Premium Income (EPI) agreed upon by both the Corporation and the Ceding Companies at the time of inception of the treaty or policy slip. Premium estimation is the differential of EPI and the booked premium for the year by the Corporation. Estimation of Income can be right only if the factors involved are incorporated in the system and extracted correctly from the system.	Our audit procedures on revenue recognised included: Tested the design, implementation and operating effectiveness of key controls over Revenue Recognition. Verified Premium Estimation with the guidelines of the Corporation and have performed test of controls, test of details and analytical review procedures on estimation of income. Verified EPI from the treaty or policy slip as the case may be and verified Actual Premium booked from Statement of Accounts or Closing statements received from the Cedants of the sample cases
2.	Claim Provisioning: Insurance Claim is the major area of expense for the insurance company. Total claims incurred include paid claims, Outstanding Loss Reserve (OSLR) and Claims Incurred But Not (Enough) Reported (IBN(E)R). The Provision and payment of claims was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the standalone financial statements as the quantum involved is significant.	Verified operational guidelines of the Corporation relating to claim processing, have performed test of controls, test of details and analytical review procedures on the outstanding claims. Verified the claim paid and provision on sample basis with payment proof and Preliminary Loss advice received from the Cedant Company and the same is further verified from the surveyorâs report. For the claim cases which has been incurred but not reported and cases in which claim has been reported but not enough reported these cases has been captured by the actuary appointed by the Corporation. The actuarial valuation of liability in respect of Claims Incurred but Not Reported (IBNR) and those Incurred but Not Enough Reported (IBNER) as at 31st March 2021, is as certified by the Corporationâs Appointed Actuary and we had verified the amounts and the related liability, based on such report.
3.	Investments: The Corporationâs investments represents substantial portion of the assets as at March 31, 2021 which are valued in accordance with accounting policy framed as per the extent of the regulatory guidelines. Valuation of actively traded equity shares and ETFs is made on the closing price of NSE. If such security is not listed/ not traded on NSE on closing day, the closing price of BSE is considered. Valuation of thinly traded equity shares and unlisted shares as per policy adopted by the Corporation. All debts securities including Government securities and Redeemable Preference shares have been measured at historical cost subject to amortization of premium paid over residual period. The valuation of these investments was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the standalone financial statements due to the materiality of the total value of investments to the financial statements.	Our audit procedures on Investment included the following: Tested the design, implementation and operating effectiveness of key controls over valuation process of investments. Assessed appropriateness of the valuation methodologies with reference to prudential norms of the Reserve Bank of India and IRDAI along with Corporationâs own valuation policy. Sample checks for actively traded equity shares, ETFâs, debt securities, Redeemable Preference shares etc., are performed by us to determine the correctness of the valuation of these investments. For other investments, tested whether the Corporation has strictly complied with the policy

5. âInformation Other than the Financial Statements and Auditor''s Report Thereonâ

The Corporationâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditorâs report thereon. The Annual report/ Boardâs report is expected to be made available to us after the date of this auditorâs report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to communicate the matters to those charged with governance and determine the actions under the applicable laws and regulations.

6. Responsibilities of the management and those charged with governance for the financial statements

The Corporationâs Board of Directors is responsible for matters as stated in section 134(5) of the Companies Act, 2013 (âthe actâ) with respect to the preparation of these Financial Statements that give a true and fair view of the financial position, financial performance and Cash flows of the Corporation in accordance with the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (âthe Insurance Actâ), the Insurance Regulatory and Development Authority Act, 1999 (âthe IRDAI Actâ), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditorâs Report of Insurance Companies) Regulations, 2002 (âthe IRDAI Financial Statements Regulations), the Companies Act, 2013 (âthe Actâ) including the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding of the assets of the Corporation 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 & presentation of the Financial Statements that give a true and fair view and are free from material misstatements , whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the ability of the Corporationâs to continue as Going Concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, as has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Corporationâs financial reporting process.

7. Auditor''s Responsibilities for the Audit of the Financial Statements

Our Objective is to obtain reasonable assurance about whether the Financial Statements as a whole are free from Material Misstatements, whether due to fraud or error, and to issue an auditorâs 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 SAâs 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, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.

As part of an audit in accordance with SAâs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatements of the financial statements, whether due to fraud and 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, misrepresentation, or the override of internal controls.

â¢ Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Corporation has in place and adequate internal financial control systems over financial reporting and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of the management use of going concern basis of accounting and, based on audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation ability to continue as a going concern. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or condition may cause the Corporation to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of Financial Statements of the current period and are therefore the Key Audit Matters. We describe these matters in our auditorâs 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.

8. Other Matters:

a) We did not audit the Financial Statements/information of three foreign branches, and one domestic branch included in the standalone financial statements of the Corporation whose financial statements /financial information reflect total assets of '' 818,76,283.88 Thousand (Previous Year '' 700,13,351 Thousand) as at March 31, 2021 and total revenues of '' 299,15,507.25 Thousand (Previous Year '' 349,20,488 Thousand) for the year ended on that date, as considered in the Standalone Financial Statements. The financial statements/information of these branches have been audited/certified by the other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and office, is based solely on the report of such auditors.

b) The actuarial valuation of liability in respect of Claims Incurred but not Reported (IBNR) and those Incurred but not Enough Reported (IBNER) as at March 31^st 2021 is as certified by the Corporationâs Appointed Actuaries and our opinion in so far as it relates to the amounts and disclosures related to such liability, is based solely on such report.

c) Due to the COVID-19 pandemic, restrictions imposed by the Central / State Government / other authorities, the necessary records as per our requirement were made available by the management through digital means which we test checked and relied upon such data, information and other supporting documents made available to us. We further relied on the additional information, explanations and other evidences provided by the management and discussion with them through telephone and electronic communication channels. The audit processes were carried out based on the remote access made available by the Corporation.

Our Report is not modified in respect of the above matters.

9. Report on Other Legal and Regulatory Requirements

1. As required by the IRDAI Financial Statements Regulations, we have issued a separate certificate dated June 29^th, 2021 certifying the matters specified in paragraphs 3 and 4 of Schedule C to the IRDAI Financial Statement Regulations.

2. As required by Section 143 (3) of the Companies Act , 2013 and Insurance Regulatory and Development Authority (Preparation

of Financial Statements and Auditorâs Report of Insurance Companies) Regulations, 2002 and orders or direction issued by the

Insurance Regulatory and Development Authority, we report 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 purpose of our audit and have found them to be satisfactory.

b) In our opinion and to the best of our information and according to the explanations given to us,proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns (audited/certified) have been received from the four branches, not visited by us.

c) The reports of the three foreign branches and one domestic branch on the accounts of the branch offices of the Corporation audited/certified by the branch auditors under section 143(8) of the Act have been sent to us and have been properly dealt with by us in preparing this report.

e) The Actuarial valuation of liabilities as on March 31^st 2021 is duly certified by the appointed actuary including to the effect that the assumptions for such valuation are in accordance with the guidelines issued by the Institute of Actuaries of India to its members and has been forwarded to IRDAI.

f) The Balance Sheet, Revenue Accounts, Profit and Loss Account have been drawn in accordance with the Insurance Act 1938, IRDAI Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 54) which is prepared under indirect method,whereas IRDAI regulations require Cash Flow Statements to be prepared under Direct Method.

g) Investments have been valued in accordance with the provisions of the Insurance Act, the regulations and orders/directions issued by IRDAI in this regard.

h) The Accounting policies selected by the Corporation are appropriate and are in accordance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDAI (Auditorâs Report) Regulations, 2002 or any order or direction issued by IRDAI in this behalf.

i) On the basis of written representations received from the directors as on 31^st March 2021 taken on record by the board of directors, none of the directors is disqualified as on 31^st March 2021 from being appointed as a director in terms of section 164(2) of the Act.

j) In our opinion the aforesaid Financial Statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules 2016, and also in conformity with the accounting principles prescribed in the IRDAI regulations.

k) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended, we report that the provisions of section 197 of the act are not applicable to the Corporation vide notification No. GSSR 463 (E) dated June 5^th 2015. Hence reporting u/s 197 (16) of the Act is not required.

l) The Corporation being an Insurance Company , the Companies (Auditorâs Report) Order, 2016 (âthe orderâ) as amended, issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act is not applicable.

n) As required under section 143(5) of the Companies Act, 2013 based on our audit as aforesaid, we enclose herewith, as per Annexure âBâ, the directions including the additional directions issued by Comptroller and Auditor General of India, action taken thereon and the financial impact on the accounts and the financial statements of the Corporation.

o) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit

& Auditors) Rules 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact of pending Litigations on its financial position in Note 47 to the Financial Statements;

ii. Provisions has been made as on March 31^st 2021 in the Standalone Financial Statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. There were no derivative contracts as on March 31^st 2021.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Corporation.

For J Singh & Associates For D. R. Mohnot & Co

Chartered Accountants Chartered Accountants

FRN- 110266W FRN - 001388C

J Singh D. R. Mohnot

(Partner) (Partner)

M.No. 042023 M. No.070579

UDIN:21042023AAAAEK2269 UDIN: 21070579AAAAHE1090

Place: Mumbai Place: Jaipur

Date: 29th June 2021 Date: 29th June 2021

Mar 31, 2019

Independent Auditors'' Report

To:

The Members of

General Insurance Corporation of India

Report on the Audit of the Financial Statements

I. Opinion

We have audited the accompanying standalone Financial Statements of General Insurance Corporation of lndia("the Corporation"), which comprise the Balance Sheet as at 31st March, 2019, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance (collectively known as ''Revenue Accounts''), Profit and Loss Account and the Cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, in which are incorporated the returns of three Foreign Branches and one Domestic Branch audited by branch auditors appointed by Comptroller and Auditor General of India, New Delhi and one Foreign Representative Office certified by the local Auditor appointed by the Corporation.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required in accordance with the requirements of the Insurance Act, 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (''the Insurance Act''), the Insurance Regulatory and Development Authority Act, 1999 (''the IRDAI Act''), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 (''the IRDAI Financial Statements Regulations''), orders/ directions issued by the Insurance Regulatory and Development Authority of India (''the IRDAI''), the Companies Act (''the Act'')including the accounting Standards specified under section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014 (''the Accounting Standards''), to the extent applicable and in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India as applicable to insurance companies of state of affairs of the Corporation as at 31st March, 2019 and of surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business and its profit and its cash flows for the year ended on that date.

II. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (''SAs'') specified under section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India (''ICAI''). 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 Corporation in accordance with the Code of Ethics issued by the ICAI together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules 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.

III. Emphasis of Matter

Without qualifying our report we draw attention to Note No 16 regarding exposure of the Corporation to Infrastructure Leasing & Finance Company and their Group Companies where the Corporation has made a provision of 50% of Secured portion amounting to Rs. 35,18,948 thousands and 100% of Unsecured portion amounting to Rs. 8,50,165 thousands, aggregating to Rs. 43,69,113 thousands which in opinion of the management is considered appropriate and is higher than the provision required to be made as per Prudential Norms for Income Recognition, Asset Classification and Provisioning issued by RBI and IRDAI applicable to Insurance Companies.

IV. Key Audit Matters

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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters below to be the key audit matters to be communicated in our report.

Sr.No.	Key Audit Matters
1	Revenue Recognition: The Corporation recognises reinsurance premium income based on the statement of accounts or closing statements received from the ceding companies. At the year end, estimates are made for the accounts not received based on the Estimated Premium Income (EPI) agreed upon by both the Corporation and the Ceding Companies at the time of inception of the treaty or policy slip. Premium estimation is the differential of EPI and the booked premium for the year by the Corporation. Estimation of Income can be right only if the factors involved are incorporated in the system and extracted correctly from the system.	Our audit procedures on revenue recognised included: Tested the design, implementation and operating effectiveness of key controls over Revenue Recognition. Verified Premium Estimation with the guidelines of the Corporation and have performed test of controls, test of details and analytical review procedures on estimation of income. Verified EPI from the treaty or policy slip as the case may be and verified Actual Premium booked from Statement of Accounts or Closing statements received from the Cedants of the sample cases.
2	Claim Provisioning: Insurance Claim is the major area of expense for the insurance company.Total claims incurred include paid claims, Outstanding Loss Reserve (OSLR) and Claims Incurred But Not (Enough) Reported (IBN(E)R). The Provision and payment of claims was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the standalone financial statements as the quantum involved is significant.	Verified operational guidelines of the Corporation relating to claim processing, have performed test of controls, test of details and analytical review procedures on the outstanding claims. Verified the claim paid and provision on sample basis with payment proof and Preliminary Loss advice received from the Cedant Company and the same is further verified from the surveyor''s report. For the claim cases which has been incurred but not reported and cases in which claim has been reported but not enough reported these cases has been captured by the actuary appointed by the Corporation. The actuarial valuation of liability in respect of Claims Incurred but Not Reported (IBNR) and those Incurred but Not Enough Reported (IBNER) as at 31st March 2019, is as certified by the Corporation''s Appointed Actuary and we had verified the amounts and the related liability, based on such report.
3.	Investments: The Corporations investments represents substantial portion of the assets as at March 31, 2019 which are valued in accordance with accounting policy framed as per the extent of the regulatory guidelines. Valuation of actively traded equity shares and ETFs is made on the closing price of NSE. If such security is not listed/ not traded on NSE on closing day, the closing price of BSE is considered. Valuation of thinly traded equity shares and unlisted shares as per policy adopted by the Corporation. All debts securities including Government securities and Redeemable Preference shares have been measured at historical cost subject to amortization of premium paid over residual period. The valuation of these investments was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the standalone financial statements due to the materiality of the total value of investments to the financial statements.	Our audit procedures on Investment included the following: Tested the design, implementation and operating effectiveness of key controls over valuation process of investments. Assessed appropriateness of the valuation methodologies with reference to prudential norms of the Reserve Bank of India and IRDAI along with Corporation''s own valuation policy. Sample checks for actively traded equity shares, ETF''s, debt securities, Redeemable Preference shares, ETF''s etc., are performed by us to determine the correctness of the valuation of these investments. For other investments, tested whether the Corporation has strictly complied with the policy.

V. Information other than the financial statements and Auditor''s report thereon

The Corporation''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the other information included in the above reports, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance and determine the actions under the applicable laws and regulations. We have nothing to report in this regard.

VI. Management Responsibility for the Financial Statements

The Corporation''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Corporation in accordance with the Insurance Act, 1938, the accounting principles as prescribed in Insurance Regulatory and Development Authority of India (IRDAI) (Preparation of Financial Statements and Auditor''s Report on Insurance Companies) Regulations, 2002 and orders or direction issued by the IRDAI including Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation 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 statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Corporation''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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Corporation''s financial reporting process.

VII. Auditor''s Responsibilities for the Audit of the Financial Statements

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, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

i. 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.

ii. 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the Corporation has adequate internal financial controls system in place and the operating effectiveness of such controls.

iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

iv. Conclude on the appropriateness of management''s 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 Corporation''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 Corporation to cease to continue as a going concern.

v. 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.

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.

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.

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.

VII. Other Matters

We did not audit the financial statements / information of three foreign branches and one foreign representative office and one domestic branch included in the standalone financial statements of the Corporation whose financial statements / financial information reflect total assets of Rs. 7,30,20,259 thousands as at March 31, 2019 and total revenues of Rs. 4,18,26,200 thousands for the year ended on that date, as considered in the standalone financial statements. The financial statements / information of these branches and representative office have been audited by the other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and officers based solely on the report of such other auditors.

The actuarial valuation of liability in respect of Claims Incurred but Not Reported (IBNR) and those Incurred but Not Enough Reported (IBNER) as at 31st March, 2019, is as certified by the Corporation''s Appointed Actuaries and our opinion in so far as it relates to the amounts and disclosures related to such liability, is based solely on such report.

Our opinion is not qualified in respect of this matter.

IX. Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Companies Act, 2013 and Insurance Regulatory and Development Authority (Preparation of financial Statements and Auditors'' Report of Insurance Companies) Regulations, 2002 and orders or direction issued by the Insurance Regulatory and Development Authority, we report 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.

b. In our opinion, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns (audited) have been received from the three branches, not visited by us.

c. The reports of the three foreign branches and one Domestic Branch on the accounts of the branch offices of the Corporation audited by branch auditors and one representative office certified by the other auditor under section 143(8) of the Act have been sent to us and have been properly dealt with by us in preparing this report.

d. The Balance Sheet, Revenue Accounts, Profit and Loss Account and Cash Flow Statement dealt with this report are in agreement with the books of account and with the returns received from branches and representative office not visited by us.

e. The Balance Sheet, the Revenue Account, and the Profit and Loss Account have been drawn in accordance with the Insurance Act, 1938, the IRDAI Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 50) which is prepared under Indirect Method, whereas IRDAI regulations require Cash Flow Statement to be prepared under direct method.

f.. The actuarial valuation of liabilities is duly certified by the appointed actuary including to the effect that the assumptions for such valuation are in accordance with the guidelines issued by the Institute of Actuaries of India to its members and has been forwarded to IRDAI.

g. On the basis of the written representations received from the directors as on 31st March, 2019, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of section 164 (2) of the Act.

h. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules, 2016, and are also in conformity with the accounting principles as prescribed in the IRDAI Regulations.

i. Investments have been valued in accordance with the provisions of the Insurance Act, 1938 (4 of 1938) and IRDAI (Auditor''s Report) Regulations, 2002.

j. The accounting policies selected by the Corporation are appropriate and are in accordance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDAI (Auditor''s Report) Regulations, 2002 or any order or direction issued by the IRDAI in this behalf.

k. The Corporation being the Insurance Company, the Companies (Auditor''s Report) Order, 2016 ("the order") as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act is not applicable.

I. With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate Report in "Annexure A"

m. As required under section 143(5) of the Companies Act, 2013 based on our audit as aforesaid, we enclose herewith, as per "Annexure B", the directions, including additional directions issued by Comptroller and Auditor General of India, action taken thereon and the financial impact on the accounts and financial statements of the Corporation.

n. 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, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Corporation has disclosed the impact of pending litigations on its financial position in its financial statements. [Refer Note 44(g)];

(ii) The Corporation has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. [Refer Schedule 13 & 14];

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund of the Corporation.

For J SINGH & ASSOCIATES	For SAMRIA & CO
Chartered Accountants	Chartered Accountants
FRN: 110266W	FRN: 109043W
J SINGH	ADHAR SAMRIA
PARTNER	PARTNER
(Membership No: 042023)	(Membership No: 049174)
Place : Mumbai
Date : 23rd May, 2019

Annexure - A to the Auditors'' Report

Annexure A to the Independent Auditors'' Report of even date on the Financial Statements of General Insurance Corporation of India

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of General Insurance Corporation of India ("the Corporation") as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Corporation for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Corporation''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Corporation''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

Commensurate to the size and nature of the business, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Corporation''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Corporation''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Corporation''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporation; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Corporation are being made only in accordance with authorisations of management and directors of the Corporation; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Corporation''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, commensurate with the size & nature of business, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For J SINGH & ASSOCIATES	For SAMRIA & CO.,
CHARTERED ACCOUNTANTS	CHARTERED ACCOUNTANTS
FIRM REGN. NO.110266W	FIRM REGN. NO. 109043W
J SINGH	ADHAR SAMRIA
PARTNER	PARTNER
MEMBERSHIP No. 042023	MEMBERSHIP NO.049174
Place : Mumbai
Date : May 23, 2019

Annexure - B to the Auditors'' Report

Annexure B to the Independent Auditors'' Report of even date on the Financial Statements of General Insurance Corporation of India

With respect to the directions issued by Comptroller and Auditor General of India as per Section 143 (5) of the Act, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact in its financial statement due to difference between title of ownership in respect of CGS / SGS / bonds / Debentures / Shares available in physical / demat format vis a vis amount shown in the books. [Refer note no.1(a) & 6].

ii. The Annual lnvestment Policy, 2018-19 of the Corporation, as approved by the Board, has not prescribed any stop-loss limits in respect of the investment activity. Stop-loss limits have been prescribed, under the said policy, in respect of scrips forming part of the equity trading portfolio. However, the Corporation has not carried out any trading activity in equity during the year under consideration. There is no impact on the financial statements.

iii. During the year under audit the Corporation has entered/ renewed/signed 10 Capital Gearing Reinsurance Treaties. In the absence of any specific IRDAI Guidelines on accounting of such treaties, the accounting is done by the Corporation on the basis of the accounting policy adopted by the Corporation for other treaties except that no Unexpired Risk Reserve is created on such treaties in view of the fact that the loss, to the extent of loss-ratio specified in each treaty, is already provided for during the year. There is no impact on the financial statements.

For J SINGH & ASSOCIATES	For SAMRIA & CO
Chartered Accountants	Chartered Accountants
FRN: 110266W	FRN: 109043W
J SINGH	ADHAR SAMRIA
PARTNER	PARTNER
(Membership No: 042023)	(Membership No: 049174)
Place : Mumbai
Date : 23rd May, 2019

Addendum to Audit Report on Standalone Financial Statements

ADDENDUM TO OUR AUDIT REPORT OF GENERAL INSURANCE CORPORATION OF INDIA DATED 23RDMAY, 2019

With regards to the Directions issued by the Comptroller and Auditor General of India under section 143(5) of the Companies Act, 2013, based on our audit, we report hereunder on the action taken and the financial impact on the accounts of the financial statements of the Corporation:

Sr. No.	Directions under Section 143(5) of Companies Act 2013	Action taken and Financial Impact
1	Whether the Corporation has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated.	The Corporation has system in place to process all the accounting transactions through IT systems except for - 1. Unexpired Risk Reserve (URR):The provision of URR is calculated manually based on the data extracted from the system and then the same is entered in the system. It is understood that the calculation of URR provision through system is under way. 2. Retro Recovery Claims: It is understood that claims recovery is processed manually and the data is maintained offline. After verification it gets entered in the system.
2	Whether there is any restructuring of an existing loan or cases of waiver/write off of debts /loans/interest etc. made by a lender to the Corporation due to the Corporation''s inability to repay the loan? If yes, the financial impact may be stated.	Not Applicable, as the Corporation does not have any outstanding borrowed money.
3	Whether funds received/receivable for specific schemes from central/ state agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation.	Not Applicable. The Corporation is a re-insurance Company and it does not receive any funds directly from State / Central Agencies for specific schemes.

For, J SINGH & ASSOCIATES	For, SAMRIA & CO.
CHARTERED ACCOUNTANTS	CHARTERED ACCOUNTANTS
ICAI FIRM REGN. NO.110266W	ICAI FIRM REGN. NO. 109043W
J SINGH	ADHAR SAMRIA
PARTNER	PARTNER
MEMBERSHIP NO: 042023	MEMBERSHIP NO: 049174
Place : Mumbai
Date : May 23, 2019

Comments of the Comptroller and Auditor General of India

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF GENERAL INSURANCE CORPORATION OF INDIA FOR THE YEAR ENDED 31 MARCH 2019

The preparation of financial statements of General Insurance Corporation of India for the year ended 31 March 2019 in accordance with the financial reporting framework prescribed under the Insurance Act, 1938 read with, Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor''s Report of the Insurance Companies) Regulations, 2002 and Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under section 139 (5) of the Act are responsible for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 23rd May 2019.

I, on behalf of the Comptroller and Auditor General of India, have conducted a Supplementary Audit of the financial statements of General Insurance Corporation of India for the year ended 31 March 2019 under section 143(6)(a) of the Act. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records.

Based on my supplementary audit, I would like to highlight the following significant matters under section 143(6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related audit report:

1. Comment on Financial Position

Balance Sheet - Application of Funds

Investments - (Sch.8 & 8A) - Rs. 79612.94 crore

Current Assets - (d) Provisions (Sch.-14) Rs. 14289.49 crore - Others - Reserves for doubtful Loans, Investment and Debts Rs. 844.96 crore

The Company has invested Rs. 788.81 crore in Non-Convertible Debentures (NCDs) (Rs. 703.79 crore secured and Rs. 85.02 crore unsecured) of Infrastructure Leasing and Financial Services Limited (IL & FS) entities1. There were principal and interest defaults on the investment during the year and the Company has created a provision of Rs. 436.91 crore (100 per cent for unsecured NCDs and 50 per cent for secured NCDs) towards diminution in value of investments. Further, disclosure has been made in the Notes on accounts (Note 16) that the provision made is higher than the provision required to be made as per Prudential Norms for Income Recognition, Asset Classification and Provisioning issued by RBI and IRDAI applicable to Insurance Companies.

However, as per proceedings (11 February 2019) before National Company Law Appellate Tribunal available in the public domain, the two IL & FS entities have been placed under the ''Red'' category by the new Board of Directors appointed by the Union Government to manage the affairs of the IL& FS group of companies, which means that such entities cannot meet their payment obligations towards even senior secured financial creditors. Considering these developments, the Company should IL&FS Rs. 209.77 crore and IL&FS Financial Services - f 494.03 crore

Comments of the Comptroller and Auditor General of India have made full provision against diminution in the value of the above investment.

The short provision has resulted in understatement of provision for diminution in value of investments and overstatement of profit by Rs. 351.89 crore.

2. Comment on Independent Auditors'' Report

As per IRDA Regulation (Schedule C, Para 4), the report of the auditors on the financial statement of every insurer shall contain certifications stipulated therein, including a certificate that no part of the assets of the policyholders'' funds has been directly or indirectly applied in the contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and investments of the policyholders'' funds. Independent Auditors'' Report does not include this certificate.

The Company held investments in private limited companies as on 31.3.2019 though such investments are prohibited under Section 27A (4) of the Insurance Laws (Amendment) Act 2015. These are Rs. 45.56 crore (Rs. 45.00 crores in Fixed Interest Bonds in Tata Sons Private Limited, Rs. 0.11 crore in NCDs of Chhatar Chemicals, Rs. 0.33 crore in NCDs of ATASH Industries Ltd. and Rs. 0.12 crore in NCDs of Electra (India) Ltd).

This has not been mentioned in the certification part of the Auditor''s Report (Para IX) and hence the Auditors'' Report is inadequate to that extent.

	For and on behalf of the
	Comptroller & Auditor General of India
	(TANUJA MITTAL)
Place: Mumbai	Principal Director of Commercial Audit
Date : 26 JUL 2019	and Ex-Officio Member, Audit Board-l, Mumbai

Management Reply to the Comments of the Comptroller and Auditor General of India

REPLY TO THE COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF GENERAL INSURANCE CORPORATION OF INDIA FOR THE YEAR ENDED 31st MARCH 2019

1. Comment on Financial Position

The NPA provisioning has been made by GIC Re in accordance with IRDA/RBI guidelines and GIC Re is not in violation of the laid down guidelines.

However, provisioning is more than what have been recommended by the Regulator.

Referring the recent RBI''s directives (RBI/2018-19/203 DBR.No. BP.BC. 45/21.04.048/2018-19) dated 7th June 2019 for Prudential Framework for Resolution Stressed Assets, the additional provision to be made as 35% of total outstanding, if Resolution Plan not implemented within the timeline up to 365 days from the commencement of Review Period. Hence, the normal 15% provision will attract additional 35% i.e. 50% provision of outstanding. Our provisioning is more than what has been recommended by the Regulator.

Considering the prevailing provisioning norms, GIC Re Management has taken a decision of providing 50% and 100% provisioning of secured and unsecured Debenture respectively as a matter of abundant caution and prudence.

The provisioning made by majority of Financial Institutions having exposure to the IL&FS and its group entities are at par with the provisioning made by the GIC Re.

2. Comment on Independent Auditors'' Report

Appropriate disclosure about investments in Tata Sons is made in Investment Section of Management Report for the year ended 31st March 2019 and the same is included in our Annual Report.

Disclosure is as given below:

The Corporation holds investment in Tata Sons Bonds'' Rs.45 Crore as on 31st March 2019.Tata Sons Ltd. was converted into Private Ltd. Company by way of shareholders and regulatory approvals on 21st September 2017, and approval of Registrar of Companies for the conversion into private form was accorded on 6th August 2018.

Consequently, as this investment is not in compliance of Section - 27(A) (4) of Insurance Act as well as Regulation 3 (d) of IRDAI Investment Regulation 2016, the Corporation will duly exit the investment in the earliest possible opportunity.

The investments in Chhatar Chemicals (Rs. 0.11 crore - Non-Convertible Debentures), ATASH Industries Ltd. (Rs. 0.33 crore - Non-Convertible Debentures) and Electra (India) Ltd (Rs. 0.12 crore - Non-Convertible Debentures) were investments of the period before 1995 approximately 25 to 30 years earlier. These companies are non-performing assets in our books since 1994 for nearly 25 years. These debentures are categorized under the "Other Investment" category in GIC Books. These investments are treated as loss assets and provided for 100% in GICs books.

Auditors Report on the matter is consequential to the Management Report.

Alice G. Vaidyan
Chairman-cum-Managing Director

Mar 31, 2018

1. Report on Standalone Financial Statements

We have audited the accompanying standalone financial statements of GENERAL INSURANCE CORPORATION OF INDIA (âthe Corporationâ), which comprise the Balance sheet as at 31^st March, 2018, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance and the Profit and Loss Account and the Cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information, in which are incorporated the returns of three Foreign Branches and one Domestic Branch audited by branch auditors appointed by Comptroller and Auditor General of India, New Delhi and one Foreign Representative Office certified by the local Auditor appointed by the Corporation.

2. Managementâs Responsibility for the Financial Statements

The Corporationâs Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (âthe Actâ) with respect to preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Corporation in accordance with the Insurance Act, 1938, the accounting principles as prescribed in Insurance Regulatory and Development Authority of India (IRDAI) (Preparation of Financial Statements and Auditorâs Report on Insurance Companies) Regulations, 2002 and orders or direction issued by the IRDAI including Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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.

3. Auditorsâ Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgement,including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.In making those risk assessments, the auditor considers internal financial control relevant to the Corporationâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Corporationâs Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements are prepared in accordance with the requirements of the Insurance Act, 1938, IRDAI (Preparation of Financial Statements and Auditorâs Report on Insurance Companies) Regulations, 2002 and the Companies Act, 2013, to the extent applicable and in the manner so required and the financial statements read with significant accounting policies and notes thereon, give a true and fair view in conformity with the accounting principles generally accepted in India as applicable to insurance companies of state of affairs of the Corporation as at 31^st March, 2018 and of surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business and its profit and its cash flows for the year ended on that date.

5. Emphasis of matter

We draw attention to Note no. 50 to the financial statement in respect of irregularities detected in acceptance of reinsurance contracts and short collection of premium by an employee. Total loss incurred by the Corporation on account of such unauthorised transaction is Rs.443,500 thousand till the date of the Balance Sheet. Our opinion is not qualified in respect of this matter.

6. Other matter

We did not audit the financial statements/information of three foreign branches and one foreign representative office and one domestic branch included in the standalone financial statements of the Corporation whose financial statements/financial information reflect total assets of Rs.64,798,768 thousand as at 31^st March, 2018 and total revenues of Rs.34,512,157 thousand for the year ended on that date, as considered in the standalone financial statements.The financial statements/information of these branches and representative office have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and office, is based solely on the report of such other auditors. Our opinion is not qualified in respect of this matter.

7. Reports on Other Legal & Regulatory Requirements

As required by section 143(3) of the Act, we report 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.

b. in our opinion proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches and representative office not visited by us.

c. The reports of three foreign branches on the accounts of the branch offices of the Corporation audited by branch auditors and one representative office certified by other auditor under section 143 (8) of the Act have been sent to us and have been properly dealt with by us in preparing this report.

d. The Balance Sheet, Revenue Accounts, Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of account and with the returns received from branches and representative office not visited by us.

e. The Balance Sheet, The Revenue Accounts and the Profit and Loss Account have been drawn in accordance with the Insurance Act, 1938, the IRDAI Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 52) which is prepared under Indirect Method, whereas IRDAI regulations require Cash Flow Statement to be prepared under direct method.

f. The actuarial valuation of liabilities is duly certified by the appointed actuary including to the effect that the assumptions for such valuation are in accordance with the guidelines issued by the Institute of Actuaries of India to its members and has been forwarded to IRDAI.

g. On the basis of the written representations received from the directors as on 31^st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

h. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and are also in conformity with the accounting principles as prescribed in the IRDAI Regulations.

i. Investments have been valued in accordance with the provisions of the Insurance Act, 1938 (4 of 1938) and IRDAI (Auditorâs report) Regulations, 2002.

j. The accounting policies selected by the Corporation are appropriate and are in compliance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDAI (Auditorâs report) Regulations, 2002 or any order or direction issued by the IRDAI in this behalf.

k. The Corporation being the Insurance Company, the Companies (Auditorâs Report) Order, 2016 (âthe orderâ) as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act is not applicable.

l. With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ.

m. With respect to the directions issued by Comptroller and Auditor General of India as per Section 143 (5) of the Act, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact in its financial statement due to difference between title of ownership in respect of CGS/SGS/bonds/ Debentures/Shares available in physical/demat format vis a vis amount shown in the books. [Refer note no.1(a) & 6]

ii. The Annual Investment Policy, 2017-18 of the Corporation, as approved by the Board, has not prescribed any stop-loss limits in respect of the investment activity. Stop-loss limits have been prescribed, under the said policy, in respect of scrips forming part of the equity trading portfolio. However,the Corporation has not carried out any trading activity in equity during the year under consideration.

iii. During the year under audit the Corporation has entered/renewed/signed 12 Capital Gearing Reinsurance Treaties. In the absence of any specific IRDAI Guidelines on accounting of such treaties, the accounting is done by the Corporation on the basis of the accounting policy adopted by the Corporation for other treaties except that no Unexpired Risk Reserve is created on such treaties in view of the fact that the loss, to the extent of loss-ratio specified in each treaty, is already provided for during the year.

n. With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Corporation has disclosed the impact of pending litigations on its financial position in its financial statements. [Refer Note 47(g)];

ii. the Corporation has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts [Refer Schedule 13 & 14];

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Corporation.

o. We further certify that

i. We have reviewed the management report and there is no apparent mistake or material inconsistencies with the financial statements.

ii. The Corporation has complied with the terms and conditions of the registration stipulated by the Authority (IRDAI).

iii. We have verified the cash balances, investments and securities relating to loans given by the Corporation on test check basis, by actual inspection or by production of certificates or other documentary evidence except to the extent of investments of the value aggregating to Rs.682 thousand as mentioned in Notes 1(a) to the accounts.

iv. The Corporation has not undertaken any transaction relating to any trust as a trustee. However, the Corporation is acting as a Manager ofTerrorism pool and Nuclear Pool. The financial statements of the Corporation do not include the investments, assets and liabilities pertaining to the pool.

v. No part of the assets of the policyholdersâ funds have been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and investments of the policyholdersâ funds.

For, GBCA & Associates For, Samria & Co.

Chartered Accountants Chartered Accountants

{ICAI Firm Regn. No. 103142W} {ICAI Firm Regn. No. 109043W}

Sanjeev Lalan Adhar Samria

Partner Partner

Membership No. 045329 Membership No. 049174

Place: Mumbai

Date : 25^th May, 2018

Mar 31, 2017

Independent Auditors'' Report

To The Members of GENERAL INSURANCE CORPORATION OF INDIA 1. Report on Standalone Financial Statements

We have audited the accompanying standalone financial statements of GENERAL INSURANCE CORPORATION OF INDIA (''the Corporation''), which comprise the Balance sheet as at March 31, 2017, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance and the Profit and Loss Account and the Cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information, in which are incorporated the returns of three Foreign Branches audited by branch auditors appointed by Comptroller and Auditor General of India, New Delhi and one Foreign Representative Office certified by the local Auditor appointed by the Corporation.

2. Management''s Responsibility for the Financial Statements

The Corporation''s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Corporation in accordance with the Insurance Act, 1938, the accounting principles as prescribed in Insurance Regulatory and Development Authority of India (IRDAI) (Preparation of Financial Statements and Auditor''s Report on Insurance Companies) Regulations, 2002 and orders or direction issued by the IRDAI including Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Corporation 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.

3. Auditors'' Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Corporation''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Corporation''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements are prepared in accordance with the requirements of the Insurance Act, 1938, IRDAI (Preparation of Financial Statements and Auditor''s Report on Insurance Companies) Regulations, 2002 and the Act, 2013, to the extent applicable and in the manner so required and the financial statements read with significant accounting policies and notes thereon, give a true and fair view in conformity with the accounting principles generally accepted in India as applicable to insurance companies of state of affairs of the Corporation as at 31st March, 2017 and of surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business and its profit and its cash flows for the year ended on that date.

5. Other matter

We did not audit the financial statements/information of three foreign branches and one foreign representative office included in the standalone financial statements of the Corporation whose financial statements/financial information reflect total assets of '' 56,30,64,00 thousand as at March 31, 2017 and total revenues of '' 3828,83,51 thousand for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches and representative office have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and office, is based solely on the report of such other auditors. Our opinion is not qualified in respect of this matter.

6. Reports on Other Legal & Regulatory Requirements

As required by section 143(3) of the Act, we report 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.

b. In our opinion proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches and representative office not visited by us.

e. The Balance Sheet, The Revenue Accounts and the Profit and Loss Account have been drawn in accordance with the Insurance Act, 1938, the IRDAI Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 47) which is prepared under Indirect Method, whereas IRDAI regulations require Cash Flow Statement to be prepared under direct method.

g. On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

i. Investments have been valued in accordance with the provisions of the Insurance Act, 1938 (4 of 1938) and IRDAI (Auditor''s report) Regulations, 2002.

j. The accounting policies selected by the Corporation are appropriate and are in compliance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDAI (Auditor''s report) Regulations, 2002 or any order or direction issued by the IRDAI in this behalf.

i. The Corporation has disclosed the impact in its financial statement due to difference between title of ownership in respect of CGS/ SGS/Bonds/Debentures/Shares available in physical/demat format vis a vis amount shown in the books. [Refer note no. 6]

ii. The Corporation has accounted the reinsurance premium, commission and incurred claims under the ''Pradhan Mantri Fasal Bima Yojana (PMFBY) Scheme'' from all the participating insurance companies in line with the respective reinsurance agreements and the basis of accounting of such premium is as per accounting policy of the Corporation.

n. With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact of pending litigations on its financial position in its financial statements. [Refer Note 42(h)];

ii. The Corporation has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. [Refer Schedule 13 & 14];

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Corporation.

j. We further certify that

i. We have reviewed the management report and there is no apparent mistake or material inconsistencies with the financial statements.

ii. The Corporation has complied with the terms and conditions of the registration stipulated by the Authority (IRDAI).

iii. We have verified the cash balances, investments and securities relating to loans given by the Corporation on test check basis, by actual inspection or by production of certificates or other documentary evidence except to the extent of investments of the value aggregating to '' 1242 thousands as mentioned in Notes 1(a) to the accounts.

iv. The Corporation has not undertaken any transaction relating to any trust as a trustee. However, the Corporation is acting as a Manager of Terrorism pool. From the current Financial Year, the Corporation has discontinued disclosing the investments, assets and liabilities pertaining to Terrorism Pool in accounts of the Corporation.

v. No part of the assets of the policyholders'' funds have been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and investments of the policyholders'' funds.

vi. The Company has provided requisite disclosures in the standalone financial statements (Refer Note No. 45) as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the explanations and representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.

Annexure - A to the Auditors'' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of General Insurance Corporation of India ("the Corporation") as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Corporation for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

Auditors'' Responsibility

Our responsibility is to express an opinion on the Corporation''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Meaning of Internal Financial Controls over Financial Reporting

A Corporation''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Corporation''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporation; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Corporation are being made only in accordance with authorizations of management and directors of the Corporation; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Corporation''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Opinion

In our opinion, commensurate with the size & nature of business, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For GBCA & Associates For Samria & Co.,

Chartered Accountants Chartered Accountants

{Firm Regn. No. 103142W} {Firm Regn. No. 109043W}

Sanjeev Lalan Adhar Samria

Partner Partner

Membership No. 045329 Membership No. 049174

Place : Mumbai

Date : May 29, 2017

Mar 31, 2016

Independent Auditors'' Report

The Members of

GENERAL INSURANCE CORPORATION OF INDIA 1. Report on Standalone Financial Statements

We have audited the accompanying standalone financial statements of GENERAL INSURANCE CORPORATION OF INDIA (''the Corporation''),

which comprise the Balance sheet as at March 31, 2016, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance and the Profit and Loss Account and the Cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information, in which are incorporated the returns of three Foreign Branches audited by branch auditors appointed by Comptroller and Auditor General of India, New Delhi and one Foreign Representative Office certified by the local Auditor appointed by the Corporation.

2. Management''s Responsibility for the Financial Statements

3. Auditors'' Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Corporation''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Corporation''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements are prepared in accordance with the requirements of the Insurance Act, 1938, IRDAI (Preparation of Financial Statements and Auditor''s Report on Insurance Companies) Regulations, 2002 and the Act, 2013, to the extent applicable and in the manner so required and the financial statements read with significant accounting policies and notes thereon, give a true and fair view in conformity with the accounting principles generally accepted in India as applicable to insurance companies of state of affairs of the Corporation as at 31st March, 2016 and of surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business and its profit and its cash flows for the year ended on that date.

5. Emphasis of matter

a. We draw attention to Note no. 3 (c) to the financial statement in respect of applicability of prudential norms for provision on investment in State Government Securities for the reason stated in the said note. Our opinion is not qualified in respect of this matter.

b. We draw attention to Note no. 48 to the financial statement in respect of fraud on the Dubai branch of the Corporation, on account of unauthorized bank transfer. Our opinion is not qualified in respect of this matter.

6. Other matter

We did not audit the financial statements/ information of three foreign branches and one foreign representative office included in the standalone financial statements of the Corporation whose financial statements/financial information reflect total assets of '' 5,763.94 Crore as at March 31,2016 and total revenues of '' 3,114.27 Crore for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches and representative office have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and office, is based solely on the report of such other auditors.

Our opinion is not qualified in respect of this matter.

7. Reports on Other Legal & Regulatory

Requirements

As required by section 143(3) of the Act, we report 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.

e. The Balance Sheet, The Revenue Accounts and the Profit and Loss Account have been drawn in accordance with the Insurance Act, 1938, the IRDAI Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 44) which is prepared under Indirect Method, where as IRDAI regulations require Cash Flow Statement to be prepared under direct method.

g. On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

i. Investments have been valued in accordance with the provisions of the Insurance Act, 1938 (4 of 1938) and IRDAI (Auditor''s report) Regulations, 2002.

j. The accounting policies selected by the Corporation are appropriate and are in compliance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDAI (Auditor''s report) Regulations, 2002 or any order or direction issued by the IRDAI in this behalf.

i. The Corporation has clear title/lease deeds for freehold and leasehold land.

ii. The Corporation has disclosed the impact of waiver/write off of debts/loans/interest and equity shares in its financial statements along with the number of cases and reasons there fore [Refer note no. 5]. The total amount of interest waived off during the year is '' 242.55 thousand. The total amount of debts written off during the year for the 2 companies are '' 7,414 thousand.

iii. The Corporation is involved in re-insurance business. Accordingly it does not hold inventories. Thus reporting under this direction is not applicable. The Corporation has not received gift from Government or any authorities.

iv. The Corporation has disclosed the impact in its financial statement due to difference between title of ownership in respect of CGS/SGS/ bonds/Debentures/Shares available in physical/demat format vis a vis amount shown in the books. [Refer note no. 6]

v. Provision in respect of employee liabilities for pension fund, leave encashment, gratuity, provident fund and settlement as well as provision for IBNR are made as per actuarial valuation. On verification of test check basis, data provided by the corporation is accurate and complete. The benchmark used by the actuary for assumptions seems to be appropriate. [Refer Note No. 30 (f) & 24].

vi. The Corporation has given timely claim loss advices to the reinsurers in respect of reinsurance ceded business. In case of reinsurance inward business, the Corporation has ensured that all information/advices received have been considered for adequate provisions in the books of the Corporation.

vii. On receipt of advice from cedents/brokers, the Corporation has accounted for profit commission payable in respect of inward insurance acceptances and receivables in respect of outward insurance acceptances in all eligible cases.

i. The Corporation has disclosed the impact of pending litigations on its financial position in its financial statements. [Refer Note 40 (g)];

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Corporation.

j. We further certify that

i. We have reviewed the management report and there is no apparent mistake or material inconsistencies with the financial statements.

ii. The Corporation has complied with the terms and conditions of the registration stipulated by the Authority (IRDAI).

iii. We have verified the cash balances, investments and securities relating to loans given by the Corporation on test check basis, by actual inspection or by production of certificates or other documentary evidence except to the extent of investments of the value aggregating to '' 1221 thousands as mentioned in Notes 1(a) to the accounts.

iv. The Corporation has not undertaken any transaction relating to any trust as a trustee. However, the Corporation is acting as a Manager of Terrorism pool and the investments, assets and liabilities pertaining to it are disclosed separately in accounts.

Annexure - A to the Auditors'' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of General Insurance Corporation of India ("the Corporation") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Corporation for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

Auditors'' Responsibility

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

Meaning of Internal Financial Controls over Financial Reporting

A Corporation''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Corporation''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporation; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Corporation are being made only in accordance with authorizations of management and directors of the Corporation; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Corporation''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Opinion

In our opinion, commensurate with the size & nature of business, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For GBCA & Associates

Chartered Accountants Firm Regn. No. 103142W

Yogesh Amal Partner

Membership No. 111636

For Samria & Co.,

Chartered Accountants Firm Regn. No. 109043W

Adhar Samria Partner

Membership No. 049174

Place : Mumbai

Date : June 29, 2016

Mar 31, 2015

HUDITDF5'' REPORT

To The Members of

GENERAL INSURANCE CORPORATION OFINDIA

1. Report on Financial Statements

We have audited the accompanying financial statements of GENERA L INSURA NCE CORPORATION OF INDIA (the Corporation), which comprise the Balance sheet as at March 31, 2015, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance and the Profit and Loss Account and the Cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information, in which are incorporated the returns of three Foreign Branches audited by branch auditors and one Foreign Representative Office certified by the local Auditor appointed by the Corporation.

2. Management''s Responsibility for the Financial Statements

The Corporation''s Board of Directors are responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Corporation in accordance with the Insurance Act, 1938, the accounting principles as prescribed in Insurance Regulatory and Development Authority (IRDA) (Preparation of Financial Statements and Auditor''s Report on Insurance Companies) Regulations, 2002 and orders or direction issued by the IRDA including Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,

2014. 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.

3. Auditors âResponsibility

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Corporation''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

4. Opinion

The financial statements are prepared in accordance with the requirements of the Insurance Act, 1938, IRDA (Preparation of Financial Statements and Auditor''s Report on Insurance Companies) Regulations, 2002 and the Act, 2013, to the extent applicable and in the manner so required and the financial statements read with significant accounting policies and notes thereon, give a true and fair view in conformity with the accounting principles generally accepted in India as applicable to insurance companies of state of affairs of the corporation as at 31st March, 2015 and of surplus of revenue accounts of Fire, Miscellaneous and Life business and of deficit of revenue account of Marine business and its profit and its cash flows for the year ended on that date.

5. Emphasis of matter

We draw attention to Note no. 2(c) to the financial statement in respect of applicability of prudential norms for provision on investment in State Government Securities for the reason stated in the said note. Our opinion is not qualified in respect of this matter.

6. Other matter

We did not audit the financial statements / information of three foreign branches and one foreign representative office included in the standalone financial statements of the Corporation whose financial statements / financial information reflect total assets of Rs, 4,822.14 crore as at March 31, 2015 and total revenues of Rs, 3,106.57 crore for the year ended on that date, as considered in the standalone financial statements. The financial statements / information of these branches and representative office have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and office, is based solely on the report of such other auditors.

Our opinion is not modified in respect of this matter.

7. Reports on Other Legal & Regulatory Requirements

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.

e. The Balance Sheet, The Revenue Accounts and the Profit and Loss Account have been drawn in accordance with the Insurance Act, 1938, the IRDA Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 17) which is prepared under Indirect Method, whereas IRDA regulations require Cash Flow Statement to be prepared under direct method.

g. On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

i. Investments have been valued in accordance with the provisions of the Insurance Act, 1938 (4 of 1938) and IRDA (Auditor''s report) Regulations, 2002.

j. The accounting policies selected by the Corporation are appropriate and are in compliance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDA (Auditor''s report) Regulations, 2002 or any order or direction issued by the IRDA in this behalf.

k. With respect to the directions issued by Comptroller and Auditor General of India as per Section 143 (5) of the Act, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has not been selected for disinvestment. Thus reporting under this direction is not applicable.

iv. The Corporation has disclosed the impact of pending legal / arbitration cases in its financial statements along with age-wise analysis and reasons of pendency. [Refer note no. 9.1 (c), (e) & (g)]. Expenditure on legal cases are settled after approval of the competent authority as per Financial Standing Order on case to case basis.

v. The Corporation has followed valuation of equity investments as per the significant accounting policy no. 7.6 (a). No discrepancy has been noticed in equity valuation.

vi. The Corporation has disclosed the impact in its financial statement due to difference between title of ownership in respect of CGS / SGS / Bonds / Debentures / Shares available in physical / demat format vis a vis amount shown in the books.[Refer note no. 2 (g)]

vii. Provision in respect of employee liabilities for pension fund, leave encashment, gratuity, provident fund and settlement as well as provision for IBNR are made as per actuarial valuation. Data provided by the Corporation is accurate and complete. The benchmark used by the actuary for assumptions seems to be appropriate.[Refer notes no. 14 (f) & 28 ]

viii. The Corporation has given timely claim loss advices to the reinsures in respect of reinsurance ceded business. In case of reinsurance inward business, the Corporation has ensured that all information / advices received have been considered for adequate provisions in the books of the Corporation.

ix. On receipt of advice from cedents / brokers, the Corporation has accounted for profit commission payable in respect of inward insurance acceptances and receivables in respect of outward insurance acceptances in all eligible cases.

I. With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Corporation has disclosed the impact of pending litigations on its financial position in its financial statements [Refer note no. 9.1 (c), (e) & (g)];

ii. the Corporation has made provision, as required under the applicable lawor accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts (Refer Schedule no. 13 & 14);

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Corporation.

m. We further certify that

i. We have reviewed the management report and there is no apparent mistake or material inconsistencies with the financial statements.

ii. The Corporation has complied with the terms and conditions of the registration stipulated by the Authority (IRDA).

iii. We have verified the cash balances, investments and securities relating to loans given by the Corporation on test check basis, by actual inspection or by production of certificates or other documentary evidence except to the extent of investments of the value aggregating to Rs, 1,221 thousands as mentioned in Notes 1.1 (a) to the accounts.

For, GBCA & ASSOCIATES For, MANUBHAI & SHAH

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

ICAI FIRM REGN.NO. 103142W ICAI FIRM REGN. NO. 106041W

HITESH PAS AD KRISHNAKANT SOLANKI

PARTNER PARTNER

MEMBERSHIP No. 106944 MEMBERSHIP No. 110299

Place: Mumbai %

Date: May 30, 2015

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