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Notes to Accounts of ICICI Prudential Life Insurance Company Ltd.

Mar 31, 2023

3.1. Contingent liabilities		('' 000)
Particulars	At March 31, 2023	At March 31, 2022
Partly-paid up investments*	4,777,632	6,996,702
Claims, other than those under policies, not acknowledged as debts comprising of:
-Claims made by vendors for disputed payments	539	539
-Claims for damages made by landlords (of premises taken on lease)	5,921	7,504
-Claims made by employees and advisors for disputed dues and compensation	4,766	9,335
Underwriting commitments outstanding (in respect of shares and securities)	-	-
Guarantees given by or on behalf of the Company	-	-
Statutory demands/liabilities in dispute, not provided for#	6,668	1,536,996
Reinsurance obligations to the extent not provided for	-	-
Policy related claims under litigation in different consumer forums:
-Claims for service deficiency	88,091	80,789
-Claims against repudiation	2,093,317	1,201,859
Total	6,976,934	9,833,724

*in respect of partly paid secured debentures and equity shares

#amount pertains to objections raised by office of the Commissioner of Service tax, Goods and Service tax Mumbai on certain tax positions taken by the Company.

3.2. Pending litigations

The Company''s pending litigation comprises of claims against the Company primarily by the customers and proceedings pending with Tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial statements at March 31, 2023. Refer note 3.1 for details on contingent liabilities.

In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of '' 1,077,754 thousand at March 31, 2023 (March 31, 2022: '' 884,859 thousand).

3.3. Actuarial method and assumptions

The actuarial liability in respect of both participating and non-participating policies is calculated using the gross premium method, using assumptions for interest, mortality, morbidity, expense and inflation and, in the case of participating policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation including allowances for possible adverse deviations.

The liability for the unexpired portion of the risk for the non-unit liabilities of linked business and attached riders is the higher of the liability calculated using discounted cash flows and the unearned premium reserve.

An unexpired risk reserve and a reserve in respect of claims incurred but not reported is held for contracts wherein there is a possibility of lag in intimation of claims.

The unit liability in respect of linked business is the value of the units standing to the credit of policyholders, using the Net Asset Value (âNAVâ) prevailing at the valuation date.

A brief of the assumptions used in actuarial valuation is as below:

a) The interest rates used for valuing the liabilities are in the range of 4.99% to 6.58% per annum. The interest rates used at March 31, 2022 were in the range of 3.67% to 6.30% per annum.

b) Mortality rates used are based on the published âIndian Assured Lives Mortality (2012 - 2014) Ult.â mortality table for assurances and âIndian Individual Annuitant''s Mortality Table (2012-15)â table for annuities adjusted to reflect expected experience. Morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates provided by reinsurers.

c) Expenses are provided for at least at the current levels in respect of renewal expenses, with no allowance for any future improvement.

d) Per policy renewal expenses are assumed to inflate at 4.90% per annum. The expense inflation assumption used at March 31, 2022 was 4.59%.

e) The bonus rates for participating business to be declared in the future is consistent with the valuation assumptions.

f) The tax rate applicable for valuation at March 31, 2023 is 14.56% per annum. The tax rate applicable for valuation at March 31, 2022 was 14.56% per annum.

Certain explicit additional provisions are made, which include the following:

a) Reserves for additional expenses that the Company may have to incur if it were to close to new business twelve months after the valuation date.

b) Reserves for guarantees available to individual and group insurance policies.

c) Reserves for cost of non-negative claw back additions.

d) Reserves for free look option given to policyholders calculated using a free look cancellation rate of 2.30% as on March 31, 2023. The free look cancellation assumption used at March 31, 2022 was 2.20%.

e) Reserves for lapsed policies eligible for revivals.

f) An additional reserve is held for incurred but not reported claims.

3.4. Funds for Future Appropriations (âFFAâ)

The balance of participating FFA of '' 16,692,745 thousand (March 31, 2022: '' 13,833,234 thousand) is not available for distribution to the shareholders. Such amount is classified under Funds for Future appropriations in the Balance Sheet.

3.5. Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months at March 31, 2023 is '' 73,399 thousand (March 31, 2022: '' 34,292 thousand). These claims remain unpaid awaiting receipt of duly executed discharge documents from the claimants or litigation pending.

3.6. Reconciliation of unclaimed amounts of policyholders

Pursuant to IRDAI circular No. IRDA/F&A/CIR/ CLD/114/05/2015 dated May 28, 2015 and IRDA/F&A/ CIR/CPM/134/07/2015 dated July 24, 2015 on âHandling of unclaimed amounts pertaining to policyholdersâ, the Company has created a single segregated fund to manage all the unclaimed monies. The amount in such unclaimed fund has been invested in money market instruments and /or fixed deposit of scheduled banks.

The amount in the unclaimed fund has been disclosed in schedule 12 as âAssets held for unclaimed amount of policyholdersâ. Investment income accruing to the unclaimed fund has been credited to the fund and disclosed as âOther Income under Linked Life segment in the Revenue Account. Such investment income net of fund management charges (âFMC'') is paid/ accrued as âinterest on unclaimed amountsâ in schedule 4 of the financial statements as âBenefits paidâ.

3.9. Taxation

The current tax provision is determined in accordance with the provisions of Income Tax Act, 1961. The provision for current tax for the year ended March 31, 2023 is '' 2,704,537 thousand (March 31, 2022: '' 2,025,723 thousand).

The provision for current tax includes an amount of '' 1,842,258 thousand for the year ended March 31, 2023 (March 31, 2022: '' 1,661,477 thousand) which has been charged on the total surplus of the participating line of business in Revenue Account, in line with the Company''s accounting policy.

Further, tax expense amounting to '' 862,279 thousand for the year ended March 31, 2023 (March 31, 2022: '' 364,246 thousand) pertaining to other than participating line of business has been charged to Profit and Loss Account.

The deferred tax asset and liabilities are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised and carried forward only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. However, deferred tax asset in respect of unabsorbed depreciation or carried forward loss are recognised only if there is a virtual certainty of realisation of such assets.

Deferred tax charge for the year ended March 31, 2023 is '' Nil (March 31, 2022: '' Nil).

During the year, the Directorate General of GST Intelligence (DGGI) initiated an inquiry into goods and service tax (GST) credit availed on certain expenses incurred by the Company. During the course of the inquiry, the Company has deposited an amount, without acceptance of liability on account of denial of credit, with GST authorities. Subsequently, the Company has received an intimation of tax from DGGI. However, the Company is yet to receive a show cause notice from DGGI providing specific details / reasons for the intimation. Hence the Company is currently unable to assess the likelihood of the outcome in the matter as well as its financial effect.

3.10. Operating lease commitments

The Company takes premises, motor vehicles, office equipments and servers on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating lease arrangements are charged to the Revenue account and the Profit and Loss Account over the lease term on a straight line basis. The total operating lease rentals charged for the year ended March 31, 2023 is '' 689,074 thousand (March 31, 2022: '' 627,976 thousand).

3.11. Assets given on operating lease

The Company has entered into an agreement in the nature of leave and license for leasing out the investment property. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such lease recognised in the Revenue account and the Profit and Loss account for the year ended March 31, 2023 is '' 370,091 thousand (March 31, 2022: '' 250,040 thousand).

(b) Defined benefit plans (i) Gratuity

General description of defined benefit plan

This is a funded defined benefit plan for qualifying employees under which the Company makes a contribution to the ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Assurance Scheme. The plan provides for a lump sum payment as determined in the manner specified under The Payment of Gratuity Act, 1972 or the Company''s gratuity scheme, whichever is higher, to the vested employees. The benefit vests after a minimum prescribed period of continuous service at retirement or on death while in employment or on termination of employment. Defined benefit obligations are actuarially determined at each quarterly Balance Sheet date using the projected unit credit method as required under Accounting Standard (AS) 15 (Revised), âEmployee benefitsâ. Actuarial gains or losses are recognised in the Revenue Account.

(ii) Provident fund

Provident fund benefits are aimed at providing security to staff members and their dependents on retirement, disability or death. Both employee and the company contribute an equal percentage of the basic salary, a part of which is towards Government administered pension fund and balance portion is contributed to the fund administered by trustees. The provident fund is managed by ICICI Prudential Life Insurance Company Employees'' Provident Fund Trust.

The minimum rate at which the annual interest is payable by the trust to members is prescribed by the Government. The Company has an obligation to make good the shortfall, if any, between the Government prescribed rate and actual return earned by the provident fund.

While computing liability, 2% leave availment has been assumed for each subsequent year following the valuation date and any voluntary leave encashment at a future date is assumed to be Nil.

3.19. Employee Stock Option Scheme (âESOSâ)

The Company granted options to its employees under its Employees Stock Option Scheme, prior to listing, since approval of its Employees Stock Option Scheme - 2005. This pre-IPO Scheme shall be referred to as âESOS 2005'' or âScheme''. The Scheme had six tranches namely Founder, 2004-05, 2005-06, 2006-07, Founder II and 2007-08, pursuant to which shares had been allotted and listed in accordance with the in-principle approval extended by the stock exchanges. All six tranches under the pre-IPO Scheme stand lapsed as on March 31, 2023. The Scheme had been instituted vide approval of its Members at the Extra-Ordinary General Meeting (EGM) dated March 28, 2005 and had been subsequently amended by the Members of the Company vide its EGM dated February 24, 2015.

The Scheme was ratified and amended by the members of the Company at its Annual General Meeting held on July 17, 2017 which is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (referred to as the âRevised Scheme'').

The meeting of Board Nomination and Remuneration Committee (BNRC) and the Board held on April 24, 2019 had approved the amendment to the definition of âExercise Periodâ. The revision to the definition was approved by the members of the Company at its Annual General Meeting held on July 17, 2019.

Further, the meeting of Board Nomination and Remuneration Committee (BNRC) and the Board held on April 17, 2021 and April 19, 2021 respectively had approved the increase in the limit of the number of shares issued or issuable since March 31, 2016 pursuant to the exercise of any Options granted to the Eligible Employees issued pursuant to the Revised Scheme or any other stock option scheme of the Company, by 0.90% of the number of shares issued as on March 31, 2016, i.e. from a limit of 2.64% of the number of shares issued as on March 31, 2016 to 3.54%. The revision to the limit was approved by the members of the Company at its Annual General Meeting held on June 25, 2021.

As per the Revised Scheme, the aggregate number of shares issued or issuable since March 31, 2016 pursuant to the exercise of any Options granted to the Eligible Employees issued pursuant to the Scheme or any other stock option scheme of the Company, shall not exceed 3.54% of the number of shares issued at March 31, 2016. Further, pursuant to the Revised Scheme the maximum number of Options that can be granted to any Eligible Employee in a financial year shall not exceed 0.1% of the issued Shares of the Company at the time of grant of Options. The Revised Scheme provides for a minimum period of one year between the grant of Options and vesting of Options. The exercise price shall be determined by the board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the options are granted and shall be reflected in the award confirmation. Shares are allotted/ issued to all those who have exercised their Options, as granted by the Board of the Company and/or the BNRC in accordance with the criteria ascertained pursuant to the Company''s Compensation policy.

The Company granted options in fourteen more tranches under ESOS 2005 (Revised), namely 2017-18, 2018-19, 2018-19 special options, 2018-19 joining options, 2019-20, 2019-20 joining options, 2020-21, two tranches of 202021 joining options, 2021-22 and three tranches of 2021-22 joining options and 2022-23.

The Company follows intrinsic value method and hence there was no charge in the Revenue Account and the Profit and Loss account on account of new grants during the year.

Note: The exercise price for all the options granted by the Board Nomination and Remuneration Committee (BNRC), after listing (as tabulated above), is the closing price on the recognised stock exchange having higher trading volume, on the date immediately prior to the date of meeting of the BNRC scheduled to consider granting options under the Company''s Employee Stock Option Scheme.

Exercise price of all the options outstanding for all years/quarter for tranches 2017-18, 2018-19, 2018-19 Special Options and 2018-19 Joining Options, 2019-20, 2019-20 Joining Options, 2020-21, 2020-21 Joining Options (1), 202021 Joining Options (2), 2021-22, 2021-22 Joining Options (1), 2021-22 Joining Options (2), 2021-22 Joining Options (3), 2022-23 schemes is '' 468.60, '' 388.40, '' 388.40, '' 351.65, '' 369.50, '' 383.10, '' 400.10, '' 396.95, '' 501.90, '' 451.05, '' 626.25, '' 656.80, '' 615.65 and '' 541.00 respectively.

Out of the total outstanding stock options of the previous year 6,858,285 options are vested during the year ended March 31, 2023 and '' 489,089 thousand was realised by exercise of options during the year ended March 31, 2023. During the year ended March 31, 2023 the Company has recognised a compensation cost of '' Nil (March 31, 2022: '' Nil) as the intrinsic value of the options.

Had the company followed fair value method based on binomial tree model valuing its options compensation cost for the year ended would have been higher by '' 703,355 thousand (March 31, 2022: '' 587,352 thousand) and the proforma profit after tax would have been '' 7,403,300 thousand (March 31, 2022: '' 6,953,958 thousand). On a proforma basis, the company''s basic and diluted earnings per share would have been '' 5.15 for the year ended March 31, 2023 (March 31, 2022: '' 4.84) and '' 5.14 for the year ended March 31, 2023 (March 31, 2022: '' 4.82) respectively.

For the year ended March 31 2022, ICICI Bank Limited (âthe Holding Companyâ) has not granted options to the employees of ICICI Prudential Life Insurance Co. Ltd. (Previous year grant: Nil) and accordingly no cost was recognised.

3.20. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange fluctuation loss debited to the Revenue account and the Profit and Loss account for the year ended March 31, 2023 is '' 8,721 thousand (March 31, 2022: '' 3,887 thousand).

3.21. Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for effects of all dilutive equity shares.

3.22. Managerial Remuneration

The appointment of managerial personnel is in accordance with the requirements of Section 34A of the Insurance Act, 1938. IRDAI has issued guidelines on August 05, 2016 on remuneration of Non-Executive Directors and Managing Director (âMD'') /Chief Executive Officer (âCEO'') /Whole Time Directors (âWTD''), which have prescribed certain qualitative and quantitative disclosures. The disclosures for year ended March 31, 2023, are given below:

Remuneration to MD/CEO/WTD:

Qualitative disclosures:

A) Information relating to the bodies that oversee remuneration.

Name, composition and mandate of the main body overseeing remuneration:

The Board Nomination and Remuneration Committee (BNRC/Committee) is the body which oversees aspects pertaining to remuneration. The functions of the Committee include identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommending to the Board their appointment & removal and formulating a criteria and specifying the manner for effective evaluation of every individual director''s performance, evaluation of the performance of the Board and its Committees, and reviewing its implementation and compliance; considering to extend or continue the term of appointment of the Independent Directors, on the basis of the report of performance evaluation of Independent Directors; recommending to the Board a policy relating to the remuneration for the Directors, key management persons and other employees; recommending to the Board all remuneration, in whatever form, payable to senior management; ensuring that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully; ensuring that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; approving the compensation program and ensuring that remuneration to Directors, key management persons and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals; formulating the criteria for determining qualifications, positive attributes and independence of a Director; devising a policy on diversity of the Board; considering and approving employee stock option schemes and administering & supervising the same; ensuring that the proposed appointments/re-appointments of key management persons or Directors are in conformity with the Board approved policy on retirement/superannuation; scrutinising the declarations of intending applicants before the appointment/re-appointment/election of Directors by the shareholders

at the annual general meeting; and scrutinising the applications and details submitted by the aspirants for appointment as the key management person.

External consultants whose advice has been sought, the body by which they were commissioned and in what areas of the remuneration process:

The Company employed the services of reputed consulting firms for market benchmarking in the area of compensation.

Scope of the Companyâs remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches:

The Company''s Policy on Compensation & Benefits (âCompensation Policyâ) for Managing Director & CEO, Other wholetime Directors, non-executive Directors, Key Management Person (KMP), Senior Management Personnel (SMP) and other employees was last amended and approved by the BNRC and the Board at its Meeting held on April 16, 2022.

Type of employees covered and number of such employees:

All employees of the Company are governed by the Compensation Policy. The total number of permanent employees governed by the Compensation Policy of the Company at March 31, 2023 was 17,825.

B) Information relating to the design and structure of remuneration process.

Key features and objectives of remuneration policy:

The Company has historically followed prudent compensation practices under the guidance of the Board and the BNRC. The Company''s approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. This approach has been incorporated in the Compensation Policy, the key elements of which are given below:

Effective governance of compensation:

The Company follows prudent compensation practices under the guidance of the BNRC andtheBoard. Thedecision relating to the remuneration of the Managing Director and CEO (MD & CEO) and other wholetime Directors is reviewed and approved by the BNRC and the Board. The BNRC and the Board approves the Key Performance Indicators (KPIs) and the performance threshold for payment of performance bonus, if applicable. The BNRC assesses business performance against the KPIs and on various risk parameters as prescribed by IRDAI. Based on its assessment, it makes recommendations to the Board regarding compensation for MD & CEO and other wholetime Directors, performance bonus and longterm pay for all eligible employees, including senior management and key management persons.

Alignment of compensation philosophy with prudent risk taking:

The Company seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels. For the MD & CEO and other wholetime Directors, compensation is sought to be aligned to both pre-defined performance objectives of the Company as well as prudent risk parameters. In addition, the Company has an Employees Stock Option Scheme aimed at enabling employees to participate in the long-term growth and financial success of the Company through stock option grants that vest over a period of time.

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

The BNRC reviewed the Company''s Compensation policy at its meeting held on April 16, 2022. The key changes in the policy are:

â¢ The clause on variable pay for the Managing Director & CEO and Other wholetime Directors (in Part B of the Compensation Policy) has been modified to defer a minimum 50% of the bonus amount for Managing Director & CEO and other wholetime Directors. If the bonus is under '' 25 lakhs, the deferment shall not be applicable. The deferral period would be spread over a minimum period of three years (deferment period). The frequency of vesting will be on annual basis and the first vesting shall not be before one year from the commencement of deferral period. The vesting shall be no faster than a prorata basis. Additionally, vesting will not be more frequent than on a yearly basis.

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

â¢ The Company follows prudent compensation practices under the guidance of the Board and the Board Nominations & Remuneration Committee (BNRC). The Company''s approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. The performance rating assigned to employees is based on an assessment of performance delivered against a set of defined performance objectives. These objectives are balanced in nature and comprise a holistic mix of financial, customer, people, process, quality, compliance objectives and/ or any other parameters as may be deemed fit.

â¢ For the MD & CEO and other wholetime Directors, compensation is sought to be aligned to both predefined performance objectives of the Company as well as prudent risk parameters.

â¢ For the MD & CEO and other wholetime Directors, the quantum of bonus does not exceed a certain percentage (as stipulated in the Compensation Policy) of total fixed pay in a year; a minimum of 50% (as stipulated in the Compensation Policy) will be under deferment. If the bonus amount is under '' 25 lakhs, the deferment shall not be applicable. The deferral period would be spread over a minimum period of three years (deferment period). The frequency of vesting will be on annual basis and the first vesting shall not be before one year from the commencement of deferral period. The vesting shall be no faster than a prorata basis. Additionally, vesting will not be more frequent than on a yearly basis.

â¢ The deferred part of the variable pay (performance bonus) for wholetime Directors is subject to malus, under which, the Company will prevent vesting of all or part of the variable pay in the event of an enquiry determining gross negligence or integrity breach.

â¢ In clawback arrangements with wholetime Directors, the employee agrees to return, in case asked for, the previously paid variable pay to the Company in the event of an enquiry determining gross negligence or integrity breach, taking into account relevant regulatory stipulations.

â¢ For malus and clawback, acts of gross negligence and integrity breach are covered under the purview of the compensation policy. Errors of judgment shall not be construed to be breaches.

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

The Company''s approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. The extent of variable pay for individual employees is linked to individual performance for sales frontline employees and to individual & organisation performance for non-sales frontline employees & employees in the management cadre. For the latter, the performance rating assigned is based on assessment of performance delivered against a set of defined performance objectives. These objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, process, quality and compliance objectives and/or any other parameters as may be deemed fit. For the MD & CEO and other wholetime Directors, to ensure effective alignment of compensation with prudent risk parameters, the Company takes into account various risk parameters along with other predefined performance objectives of the Company.

¹ Cash amounts mentioned in above tables are outstanding deferred bonus of previous year/s and are paid post March 31,

2023 & March 31, 2022 respectively. Cash amount for March 31, 2023 does not include the deferred part (if any) of bonus payable for FY2023.

² Employee Stock Options mentioned in above tables are outstanding options to be vested as on March 31, 2023 & March 31, 2022 respectively; for FY2022, includes options granted by ICICI Bank Ltd. (last granted in May 2019) and ICICI Prudential Life Insurance Co Ltd. during employment with ICICI Prudential Life Insurance Co Ltd.

* Against the provision of '' 5,000 thousand made in the FY2022, '' 5,000 thousand was paid in FY2023. Provision made for FY2023 amounts to '' 5,000 thousand.

Further, in accordance with the IRDAI circular IRDA/F&A/GDL/LSTD/155/08/2016 dated August 5 2016 read with IRDA/F&A/CIR/MISC/184/10/2019 dated October 4, 2019, annual managerial remuneration in excess of '' 15,000 thousand per director is required to be borne by the Shareholders'' and separately disclosed in the Profit and Loss account. Accordingly, managerial remuneration in excess of such specified limit amounting to '' 54,605 thousand has been charged to and separately disclosed in the Profit and Loss account for the year ended March 31, 2023 (March 31, 2022: '' 58,930 thousand).

3.23. Commitments

Commitments made and outstanding (net of advances) for Company''s investment in Real estate (Investment property) at March 31, 2023 is '' Nil (March 31, 2022 '' Nil ).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is '' 1,137,575 thousand (March 31, 2022: '' 1,029,770 thousand)

There are no loan commitments made by the Company at March 31, 2023 (March 31, 2022 '' Nil).

Proceeds of the issuance have been utilized for the purpose as specified in the offer document.

Debenture redemption reserve is not required to be created as per Companies (Share Capital & Debenture) Amendment Rules, 2019 dated August 16, 2019

3.25. Investments

a. The investments are made from the respective funds of the Policyholders'' or Shareholders'' and investment income thereon has been accounted accordingly.

b. All investments are performing investments.

3.26. Interest rate derivatives

In line with the requirement of IRDAI Investment Master circular, the Company has put in place a derivative policy approved by the Board. The policy covers various aspects substantiating the hedge strategy to mitigate the interest rate risk, thereby managing the volatility of returns from future fixed income investments due to variations in market interest rates.

A) The Company has during the year, as part of its hedging strategy, entered into Forward Rate Agreement (FRA) transactions to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI Investment Master Circular. The FRA derivative contracts are over-the-counter (OTC) transactions, agreeing to buy notional value of a debt security at a specified future date, at a price determined at the time of the contract with an objective to lock in the price of an interest bearing security at a future date.

B) The portion of the fair value gain/loss on the interest rate derivative that is determined to be an effective hedge is recognised directly in âCredit/ (Debit) Fair Value Change Account'' in the Balance Sheet under policyholders'' funds and the portion that gets determined as ineffective hedge or ineffective portion of effective hedge, based on the hedge effectiveness assessment is recognized in the Revenue Account under head âTransfer/Gain on revaluation/ Change in fair valueâ. The mark to market (MTM) losses in respect of FRA outstanding is '' 1,058,771 thousand at March 31, 2023 (March 31, 2022: '' 1,393,097 thousand)

D) A net amount of '' 1,029,473 thousand for the year ended March 31, 2023 (March 31, 2022: '' 968,092 thousand) was recognised in Revenue Account being the portion of loss determined to be ineffective portion of the effective hedge. The amount that was removed from the cash flow hedge reserve account during the year ended March 31, 2023 in respect of forecast transaction for which hedge accounting had previously been used but is no longer expected to occur is Nil (March 31, 2022: Nil). The hedged forecast transactions are expected to occur over the outstanding tenor of underlying policy liabilities and corresponding hedging gain/loss will accordingly flow to the Revenue Account

E) Disclosures on risk exposure in Interest rate derivatives:

i. Interest rate derivative hedging instruments: Derivatives are financial instruments whose characteristics are derived from the underlying assets, or from interest and exchange rates or indices. Interest rate derivatives include forward rate agreements, interest rate swaps and interest rate futures. The Company during the financial year has entered into forward rate agreement (FRA) derivative instrument to hedge exposure due to interest rate sensitivity for highly probable forecasted transactions. These hedges were entered only for hedging purpose to hedge the interest rate risk. This hedge is carried in accordance with its established policies, strategy, objective and applicable regulations.

ii. Derivative policy, process and hedge effectiveness assessment: The Company has a well-defined Board approved derivative policy and standard operating procedures setting out the strategic objectives, regulatory and operational framework and risks associated with interest rate derivatives. The policy includes the risk measurement and monitoring, processes to be followed and controls thereon. The accounting treatment has been documented and ensures a process of periodic effectiveness assessment and accounting in accordance with applicable accounting standard issued by the Institute of Chartered Accountants of India (ICAI).

The Company has clearly defined roles and responsibilities to ensure independence and accountability through the investment decision, trade execution, to settlement, accounting and periodic reporting and audit of the Interest rate derivative exposures. The overall policy, risk management framework for the Interest rate derivatives are monitored by the Board Risk Management Committee.

iii. Scope and nature of risk identification, risk measurement, and risk monitoring: The derivative policy as approved by the Board identify risk associated with interest rate derivatives transactions and sets appropriate market risk limits such as stress testing and value-at-risk limits. Financial risks of the derivative portfolio are measured and monitored on periodic basis.

The exposure limit has been calculated on the basis of Credit Equivalent Amount using the Current Exposure Method (CEM) as detailed below:

The Credit Equivalent Amount of a market related off-Balance Sheet transaction calculated using the CEM is the sum of

a) The current credit exposure (gross positive mark to market value of the contract)

b) Potential future credit exposure which is a product of the notional principal amount across the outstanding contract and a factor that is based on the mandated credit conversion factors as prescribed under the IRDAI circular on Interest Rate Derivatives, which is applied on the residual maturity of the contract.

3.28. Valuation of Investment property

In accordance with the IRDAI Regulations, 2002 (Preparation of Financial Statements and Auditors'' Report of Insurance Companies), the Company''s investment property has been revalued. The Company has revalued all its investment properties held for more than one year and market value for such properties is based on valuation performed by an independent valuer at March 31, 2023. The opinion on market value by the independent valuer, is prepared in accordance with the âThe RICS Valuation Standardsâ published by the Royal Institution of Chartered Surveyors (âRICSâ), subject to variation to meet local established law, custom, practice and market conditions. The methods used in valuation of property includes âDirect comparable approachâ. The real estate investment property is accordingly valued at '' 4,893,040 thousand at March 31, 2023 (March 31, 2022: '' 4,830,436 thousand). The historical cost of the property at March 31, 2023 is '' 4,191,408 thousand (March 31, 2022: '' 3,836,532 thousand).

3.29. Impairment of investment assets

In accordance with the Financial Statements Regulations, Schedule A Part I on âAccounting Principle for Preparation of Financial Statementsâ on procedure to determine the value of investment and the relevant circular, the impairment in value of investments other than temporary diminution has been assessed as at March 31, 2023 and accordingly impairment provisions have been provided as below.

3.30. Encumbrances of assets

The assets of the Company are free from all encumbrances except to the extent assets or monies are required to be deposited as margin contributions for investment trade obligations of the Company or as mandated by the court, as detailed below:

a. Assets deposited with National Securities Clearing Corporation Limited (NSCCL)

Mutual fund units (March 31, 2022: '' 1,030,145 thousand) previously deposited with NSCCL towards margin requirement for equity trade settlement have been withdrawn post change in equity trade settlement cycle from T 2 to T 1.

3.31. Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside India at March 31, 2023 (March 31, 2022: '' Nil) except the assets disclosed in the note 3.30.

3.32. Securities Lending and Borrowing Scheme (SLB)

Equity shares transferred under SLB continue to be recognised on the Balance Sheet as the Company retains all the associated risks and rewards of these securities.

The value of equity shares lent by the Company under SLB and outstanding at March 31, 2023 is '' Nil (March 31, 2022: '' 2,836,127 thousand).

3.33. Reverse Repo transactions in Government securities/Corporate Debt Securities

Disclosures pursuant to IRDAI notification ref IRDA/F&I/CIR/INV/250/12/2012 dated December 4, 2012:

There is no investment in reverse repo for the year ended March 31, 2023 (March 31, 2022 '' Nil).

3.43. Extra allocation

As per the product filing for Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan, extra allocation of units made and total extra allocation recovered is disclosed as below.

Total extra allocation made with respect to group products (Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan) for the year ended March 31, 2023 is '' 1,200 thousand (for year ended March 31, 2022: '' Nil).

The amount of recovery towards extra allocation for the year ended March 31, 2023 is '' 479 thousand (March 31, 2022: '' 499 thousand).

3.44. Dividend

Interim dividend appropriation for the year ended March 31, 2023 is '' Nil (March 31, 2022: '' Nil)

Final dividend proposed for year ended March 31, 2023 is '' 0.60 per equity share (year ended March 31, 2022: '' 0.55 per equity share) of '' 10 each in its board meeting held on April 20, 2023, subject to shareholder approval in annual general meeting.

Dividend distribution tax is not applicable on the final dividend declared by the Company as per Income Tax Act, 1961.

Unclaimed dividend of '' 7,621 thousand at March 31, 2023 (March 31, 2022: '' 7,532 thousand) represents dividend paid but not claimed by shareholders, and are represented by a bank balance of an equivalent amount.

3.48. Long term contracts

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards for material foreseeable losses on such long term contracts including derivative contracts has been made in the financial statements.

For insurance contracts, actuarial valuation of liabilities for policies is done by the Appointed Actuary of the Company. The methods and assumptions used in valuation of liabilities are in accordance with the regulations issued by the Insurance Regulatory and Development Authority of India ("IRDAI") and actuarial practice standards and guidance notes issued by the Institute of Actuaries of India.

3.49. Corporate Social Responsibility

As per section 135 of the Companies Act, 2013 and amendment rules, the amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ended March 31, 2023 was '' 38,807 thousand (March 31, 2022: '' 68,544 thousand).

3.50. Loans and advances to subsidiaries, associates and related entities

Pursuant to Securities and Exchange Board of India (Listing obligations and disclosure requirements) Regulations, 2015, disclosures pertaining to loans and advances given to subsidiaries, associates and related entities are given below:

There are no loans and advances given to subsidiaries, associates and firms/companies in which directors are interested except for advances which are in the normal course of business but not in the nature of loans (March 31, 2022: '' Nil)

There are no investments by the loanee in the shares of the Company.

3.51. Contribution to Policyholdersâ account

The following table sets forth, for the periods indicated, the amount contributed from Shareholders'' Account in the Revenue Account.

Expense of Management

In accordance with the IRDAI (Expenses of Management of insurers transacting life insurance business) regulation 2016 read with circular IRDA/F&A/CIR/MISC/184/10/2019 dated October 4, 2019, expense of management in excess of allowable limit in any business segment is required to be borne by the Shareholders'' and separately disclosed in the Profit and Loss account & the Revenue Account.

The Company is in compliance with the expense of management regulation at an overall level. Further for the Nonpar line of business, during the year ended March 31, 2023, expense of management in excess of allowable limits amounting to '' 2,655,997 thousand has been charged to and separately disclosed in the Profit and Loss account. (March 31, 2022: '' 2,145,034 thousand).

No irreversible contribution has been made from the Shareholders'' account to the Policyholders'' account during the financial year ended March 31, 2023 (March 31, 2022 : Nil).

3.52. Ind AS Implementation

Pursuant to IRDAI letter 100/2/Ind AS- Mission Mode/2022-23/1 dated July 14, 2022, a disclosure on the strategy for Ind AS implementation and progress in this regard is given below:

In January 2020, IRDAI issued a circular stating that the effective implementation date of Ind AS in the Indian insurance sector would be decided after the finalisation of IFRS 17 by International Accounting Standards Board (IASB). In June 2020, IASB notified the amended IFRS 17 with an effective date on or after January 1, 2023. ICAI issued an exposure draft of amendments in Ind AS 117 Insurance contracts in February 2022 which corresponds to amendments in IFRS 17. The amended Ind AS 117 is currently under the process of notification.

During FY2023, IRDAI issued various directives on IFRS/Ind AS implementation and constituted an expert committee with members from ICAI, Institute of Actuaries of India (IAI), and the insurance industry to address implementation issues. The final date of Ind AS implementation for the insurance sector is yet to be announced by IRDAI.

The Company has implemented IFRS 17 as part of consolidation for its foreign promotor and has prepared the opening Balance Sheet at January 1, 2022 as well as the financial statements for half year ended June 30, 2022. The Company expects to leverage this experience to comply with any additional requirements that may be stipulated in the final notification of Ind AS 117 and Ind AS 109.

3.53. Loans, Advances & Investment by or on behalf of Ultimate Beneficiaries

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

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

3.54. Previous year comparatives

Previous year''s figures have been regrouped and reclassified wherever necessary to conform to current year''s presentation.

Mar 31, 2022

3.1. Contingent liabilities		('' ''000)
Particulars	At March	At March
Particulars	31, 2022	31, 2021
Partly-paid up investments*	6,996,702	10,612,933
Claims, other than those under policies, not acknowledged as debts comprising of: -Claims made by vendors for disputed payments	539	1,176
-Claims for damages made by landlords (of premises taken on lease)	7,504	41,354
-Claims made by employees and advisors for disputed dues and compensation	9,335	8,523
Underwriting commitments outstanding (in respect of shares and securities)
Guarantees given by or on behalf of the Company by various banks in favour of government authorities, hospital and court
Statutory demands/liabilities in dispute, not	1,536,996	1,536,996
provided for^#	1,536,996	1,536,996
Reinsurance obligations to the extent not provided for
Policy related claims under litigation in different consumer forums: -Claims for service deficiency	80,789	69,585
-Claims against repudiation	1,201,859	845,791
Total	9,833,724	13,116,358

*in respect of partly paid secured debentures & equity shares.

#amount pertains to objections raised by office of the Commissioner of Service tax, Goods and Service tax Mumbai on certain tax positions taken by the Company.

3.2. Pending litigations

The Company''s pending litigation comprises of claims against the Company primarily by the customers and proceedings pending with Tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial statements at March 31, 2022. Refer note 3.1 for details on contingent liabilities.

In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of '' 884,859 thousand at March 31, 2022 (At March 31, 2021: '' 432,176 thousand).

3.3. Actuarial method and assumptions

of participating policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation including allowances for possible adverse deviations.

An unexpired risk reserve and a reserve in respect of claims incurred but not reported is held for contracts where there is a possibility of lag in intimation of claims.

The unit liability in respect of linked business is the value of the units standing to the credit of policyholders, using the Net Asset Value (''NAV'') prevailing at the valuation date.

A brief of the assumptions used in actuarial valuation is as below:

a) The interest rates used for valuing the liabilities are in the range of 3.67% to 6.30% per annum. The interest rates used at March 31, 2021 were in the range of 3.13% to 5.56% per annum.

b) Mortality rates used are based on the published "Indian Assured Lives Mortality (2012 - 2014) Ult." mortality table for assurances and "Indian Individual Annuitant''s Mortality Table (2012-15)" table for annuities adjusted to reflect expected experience. Morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates provided by reinsurers.

c) Expenses are provided for at least at the current levels in respect of renewal expenses, with no allowance for any future improvement.

d) Per policy renewal expenses are assumed to inflate at 4.59% per annum. The expense inflation assumption used at March 31, 2021 was 4.22%.

e) The bonus rates for participating business to be declared in the future is consistent with the valuation assumptions.

f) The tax rate applicable for valuation at March 31, 2022 is 14.56% per annum. The tax rate applicable for valuation at March 31, 2021 was 14.56% per annum.

Certain explicit additional provisions are made, which include the following:

a) Reserves for additional expenses that the Company may have to incur if it were to close to new business twelve months after the valuation date.

b) Reserves for guarantees available to individual and group insurance policies.

c) Reserves for cost of non-negative claw back additions.

d) Reserves for free look option given to policyholders calculated using a free look cancellation rate of 2.20% as on March 31, 2022. The free look cancellation assumption used at March 31, 2021 was 2.70%.

e) Reserves for lapsed policies eligible for revivals.

f) Based on its current evaluation, the Company is carrying a provision (net of reinsurance) of '' 241,640 thousand as at March 31,2022 (at March 31, 2021: '' 3,322,822 thousand), for claims due to COVID-19, which is included in policy liabilities.

g) An additional reserve is held for incurred but not reported claims.

3.4. Funds for Future Appropriations (''FFA'')

The balance of participating FFA of '' 13,833,234 thousand (March 31, 2021: '' 13,531,799 thousand) is not available for distribution to the shareholders. Such amount is classified under Funds for Future appropriations in the Balance Sheet.

3.5. Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months at March 31, 2022 is '' 34,292 thousand (March 31, 2021: '' 33,902 thousand).

3.6. Reconciliation of unclaimed amounts of policyholders

Pursuant to IRDAI circular No. IRDA/F&A/CIR/CLD/114/05/2015 dated May 28, 2015 and IRDA/F&A/CIR/CPM/134/07/2015 dated July 24, 2015 on "Handling of unclaimed amounts pertaining to policyholders", the Company has created a single segregated fund to manage all the unclaimed monies. The amount in such unclaimed fund has been invested in money market instruments and /or fixed deposit of scheduled banks.

The amount in the unclaimed fund has been disclosed in schedule 12 as "Assets held for unclaimed amount of policyholders". Investment income accruing to the unclaimed fund has been credited to the fund and disclosed as ''Other Income under Linked Life segment in the Revenue Account. Such investment income net of fund management charges (''FMC'') is paid/ accrued as "interest on unclaimed amounts" in schedule 4 of the financial statements as "Benefits paid".

In accordance with IRDAI Master circular No. IRDA/F&A/CIR/Misc/282/1 1/2020 on "Unclaimed Amount of Policyholders" dated November 17, 2020 read with rule 3 (6) of Senior Citizens'' Welfare Fund Rules, 2016, the unclaimed of policyholders which are more than 120 months as on 30 September every year, will be transferred to the Senior Citizens'' Welfare Fund (SCWF) on or before 01 March of that financial year.

3.8. Direct taxes

The current tax provision is determined in accordance with the provisions of Income Tax Act,1961. The provision for current tax for the year ended March 31, 2022 is '' 2,025,723 thousand (year ended March 31, 2021: '' 2,630,972 thousand).

The provision for current tax includes an amount of '' 1,661,477 thousand for the year ended March 31, 2022 (year ended March 31, 2021: '' 1,418,455 thousand) which has been charged on the total surplus of the participating line of business in Revenue Account, in line with the Company''s accounting policy.

Further, tax expense amounting to '' 364,246 thousand for the year ended March 31,2022 (year ended March 31,2021: '' 1,212,517 thousand) pertaining to other than participating line of business has been charged to Profit & loss account.

Deferred tax charge for the year ended March 31, 2022 is '' Nil (year ended March 31, 2021: '' Nil).

3.9. Operating lease commitments

The Company takes premises, motor vehicles, office equipments and servers on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating lease arrangements are charged to the Revenue account and the Profit and Loss account over the lease term on a straight line basis. The total operating lease rentals charged for the year ended March 31, 2022 is '' 627,976 thousand (year ended March 31, 2021: '' 596,948 thousand).

3.10. Assets given on operating lease

The Company has entered into an agreement in the nature of leave and license for leasing out the investment property. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such lease recognised in the Revenue account and the Profit and Loss account for the year ended March 31, 2022 is '' 250,040 thousand (year ended March 31, 2021: '' 377,612 thousand).

3.18. Employee Stock Option Scheme ("ESOS")

The Company granted options to its employees under its Employees Stock Option Scheme, prior to listing, since approval of its Employees Stock Option Scheme -2005. This pre-IPO Scheme shall be referred to as ''ESOS 2005'' or ''Scheme''. The Scheme had six tranches namely Founder, 2004-05, 2005-06, 2006-07, Founder II and 2007-08, pursuant to which shares had been allotted and listed in accordance with the in-principle approval extended by the stock exchanges. All six tranches under the pre-IPO Scheme stand lapsed as on March 31, 2022. The Scheme had been instituted vide approval of its Members at the Extra-Ordinary General Meeting (EGM) dated March 28, 2005 and had been subsequently amended by the Members of the Company vide its EGM dated February 24, 2015.

The meeting of Board Nomination and Remuneration Committee (BNRC) and the Board held on April 24, 2019 had approved the amendment to the definition of "Exercise Period". The revision to the definition was approved by the members of the Company at its Annual General Meeting held on July 17, 2019.

As per the Revised Scheme, the aggregate number of shares issued or issuable since March 31,2016 pursuant to the exercise of any Options granted to the Eligible Employees issued pursuant to the Scheme or any other stock option scheme of the Company, shall not exceed 3.54% of the number of shares issued at March 31,2016. Further, pursuant to the Revised Scheme the maximum number of Options that can be granted to any Eligible Employee in a financial year shall not exceed 0.1% of the issued Shares of the Company at the time of grant of Options. The Revised Scheme provides for a minimum period of one year between the grant of Options and vesting of Options. The exercise price shall be determined by the Board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the options are granted and shall be reflected in the award confirmation. Shares are allotted/issued to all those who have exercised their Options, as granted by the Board of the Company and/or the BNRC in accordance with the criteria ascertained pursuant to the Company''s Compensation and Benefits policy.

The Company granted options in thirteen more tranches under ESOS 2005 (Revised), namely 2017-18, 2018-19, 2018-19 special options, 2018-19 joining options, 2019-20, 2019-20 joining options, 2020-21, two tranches of 2020-21 joining options, 2021-22 and three tranches of 2021 -22 joining options.

The Company follows intrinsic value method and hence there was no charge in the Revenue Account and the Profit and Loss account on account of new grants during the year.

Exercise price of all the options outstanding for all years/quarter for tranches 2017-18, 2018-19, 2018-19 Special Options and 2018-19 Joining Options, 2019-20, 2019-20 Joining Options, 2020-21, 2020-21 Joining Options (1), 2020-21 Joining Options (2), 2021-22, 2021-22 Joining Options (1), 2021-22 Joining Options (2), 2021-22 Joining Options (3) schemes is '' 468.60, '' 388.40, '' 388.40, '' 351.65, '' 369.50, '' 383.10, '' 400.10, '' 396.95, '' 501.90, '' 451.05, '' 626.25, '' 656.80 and '' 615.65 respectively.

Out of the total outstanding stock options of the previous year 6,009,505 options are vested during the year ended March 31, 2022 and '' 502,982 thousand was realised by exercise of options during the year ended March 31,2022. During the year ended March 31, 2022 the Company has recognized a compensation cost of '' Nil (year ended March 31, 2021: '' Nil) as the intrinsic value of the options.

Had the company followed fair value method based on binomial tree model valuing its options compensation cost for the year ended would have been higher by '' 635,995 thousand (March 31, 2021: '' 596,552 thousand) and the proforma profit after tax would have been '' 6,905,315 thousand (March 31, 2021: '' 9,004,914 thousand). On a proforma basis, the company''s basic and diluted earnings per share would have been '' 4.81 (March 31, 2021: '' 6.27) and '' 4.79 (March 31, 2021: '' 6.26) respectively

For the year ended March 31 2022, ICICI Bank Limited ("the Holding Company") has not granted options to the employees of ICICI Prudential Life Insurance Co. Ltd. (Previous year grant: Nil) and accordingly no cost was recognised.

3.19. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange fluctuation loss debited to the Revenue account and the Profit and Loss account for the year ended March 31,2022 is '' 3,887 thousand (year ended March 31,2021: '' 6,058 thousand).

3.21. Managerial Remuneration

The appointment of managerial personnel is in accordance with the requirements of Section 34A of the Insurance Act, 1938. IRDAI has issued guidelines on August 05, 2016 on remuneration of Non-Executive Directors and Managing Director (''MD'') /Chief Executive Officer (''CEO'') / Whole Time Directors (''WTD''), which have prescribed certain qualitative and quantitative disclosures. The disclosures for year ended March 31, 2022 are given below:

Remuneration to MD/CEO/WTD:

Qualitative disclosures:

A) Information relating to the bodies that oversee remuneration. Name, composition and mandate of the main body overseeing remuneration:

continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of Independent Directors; recommending to the Board a policy relating to the remuneration for the Directors, key management persons and other employees; recommending to the Board all remuneration, in whatever form, payable to senior management; ensuring that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully; ensuring that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; approving the compensation program and ensuring that remuneration to Directors, key management persons and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals; formulating the criteria for determining qualifications, positive attributes and independence of a Director; devising a policy on diversity of the Board; considering and approving employee stock option schemes and administering and supervising the same; ensuring that the proposed appointments/re-appointments of key management persons or Directors are in conformity with the Board approved policy on retirement/superannuation; scrutinising the declarations of intending applicants before the appointment/re-appointment/election of Directors by the shareholders at the annual general meeting; and scrutinising the applications and details submitted by the aspirants for appointment as the key management person.

External consultants whose advice has been sought, the body by which they were commissioned and in what areas of the remuneration process:

The Company employed the services of reputed consulting firms for market benchmarking in the area of compensation.

Scope of the Company''s remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches:

The Company''s Policy on Compensation & Benefits ("Compensation Policy") for Managing Director & CEO, Other wholetime Directors, non-executive Directors, Key Management Person (KMP), Senior Management Personnel (SMP) and other employees was last amended and approved by the BNRC and the Board at its Meeting held on April 17, 2021 and April 19, 2021 respectively.

Type of employees covered and number of such employees:

All employees of the Company are governed by the Compensation Policy. The total number of permanent employees governed by the Compensation Policy of the Company at March 31, 2022 was 15,530.

B) Information relating to the design and structure of remuneration process.

Key features and objectives of remuneration policy:

Effective governance of compensation:

The Company follows prudent compensation practices under the guidance of the BNRC and the Board. The decision relating to the remuneration of the Managing Director and CEO (MD & CEO) and other wholetime Directors is reviewed and approved by the BNRC and the Board. The BNRC and the Board approves the Key Performance Indicators (KPIs) and the performance threshold for payment of performance bonus, if applicable. The BNRC assesses business performance against the KPIs and on various risk parameters as prescribed by IRDAI. Based on its assessment, it makes recommendations to the Board regarding compensation for MD & CEO and other wholetime Directors, performance bonus and long-term pay for all eligible employees, including senior management and key management persons.

Alignment of compensation philosophy with prudent risk taking:

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

The BNRC reviewed the Company''s Compensation and Benefits policy at its meeting held on April 17, 2021. The key changes in the policy are:

â¢ The post-retirement benefits for employees including KMPs/SMPs (in Part A of Compensation and Benefits Policy) has been modified to incorporate a change in Domiciliary Medical Expense limits for employees at SGM & above levels; and the capping of Group Health Insurance benefit for employees'' dependent children up to the age of 24.

â¢ The post-retirement benefits for the Managing Director & CEO and Other wholetime Directors (in Part B of Compensation and Benefits Policy) has been modified to incorporate alignment of the Domiciliary Medical Expense limits for other wholetime Directors with those applicable to Deputy Managing Director level / Managing Director & CEO; and the capping of Group Health Insurance benefit for employees'' dependent children up to the age of 24.

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

â¢ The Company follows prudent compensation practices under the guidance of the Board and the Board Nominations & Remuneration Committee (BNRC). The Company''s approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. The performance rating assigned to employees is based on assessment of performance delivered against a set of defined performance objectives. These objectives are balanced in nature and comprise a holistic mix of financial, customer, people, process, quality, compliance objectives and/or any other parameters as may be deemed fit.

â¢ For the MD & CEO and other wholetime Directors, compensation is sought to be aligned to both pre-defined performance objectives of the Company as well as prudent risk parameters.

â¢ For the MD & CEO and other wholetime Directors, the quantum of bonus does not exceed a certain percentage (as stipulated in the Compensation Policy) of total fixed pay in a year; if the quantum of bonus exceeds a pre-defined percentage of the total fixed pay, a part of the bonus is deferred and paid over a pre-defined period.

â¢ In claw back arrangements with wholetime Directors, the employee agrees to return, in case asked for, the previously paid variable pay to the Company in the event of an enquiry determining gross negligence or integrity breach, taking into account relevant regulatory stipulations.

â¢ For malus and clawback, acts of gross negligence and integrity breach are covered under the purview of the compensation policy. Errors of judgment shall not be construed to be breaches.

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

The Company''s approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. The extent of variable pay for individual employees is linked to individual performance for sales frontline employees and to individual and organisation performance for non-sales frontline employees and employees in the management cadre. For the latter, the performance rating assigned is based on assessment of performance delivered against a set of defined performance objectives. These objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, process, quality and compliance objectives and/or any other parameters as may be deemed fit. For the MD & CEO and other wholetime Directors, to ensure effective alignment of compensation with prudent risk parameters, the Company takes into account various risk parameters along with other pre-defined performance objectives of the Company.

Note - For the year-ended March 31, 2022 the numbers indicated are the amounts paid/options granted during the year FY2022 as per IRDAI approvals. Mr. Puneet Nanda received '' 3,080,506 as pro-rated performance bonus for FY2021 (paid during FY2022) pursuant to his tenure as Deputy Managing Director up to June 14, 2020. Mr. Sandeep Bakhshi received a remuneration of '' 3,234,810, Mr. Sandeep Batra received '' 2,073,422 and Mr. Puneet Nanda received '' 2,217,512 which is the deferred variable pay (paid during FY2022).

âAllowances include Superannuation. For Mr. Puneet Nanda, allowances also include Interest subsidy. Additionally, a sum of '' 25,236,750 towards gratuity and '' 4,250,400 towards leave encashment was transferred during FY2021 to ICICI Ventures upon transfer of Mr. Puneet Nanda.

Perquisites are evaluated as per Income-Tax rules wherever applicable, and exclude perquisites on Provident Fund and perquisites on exercise of stock options, if any. Stock options exercised during the year does not constitute remuneration paid to the wholetime directors and accordingly is not considered here.

Further, in accordance with the IRDAI circular IRDA/F&A/GDL/LSTD/155/08/2016 dated August 5 2016 read with IRDA/F&A/CIR/MISC/184/10/2019 dated October 4, 2019, annual managerial remuneration in excess of '' 15,000 thousand per director is required to be borne by the Shareholders'' and separately disclosed in the Profit and Loss account. Accordingly, managerial remuneration in excess of such specified limit amounting to '' 58,930 thousand has been charged to and separately disclosed in the Profit and Loss account for the year ended March 31, 2022 (March 31, 2021: '' 105,611 thousand).

3.22. Commitments

Commitments made and outstanding (net of advances) for Company''s investment in Real estate (Investment property) at March 31, 2022 is '' Nil (March 31, 2021 '' Nil ).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is '' 1,029,770 thousand (March 31, 2021: '' 287,425 thousand)

There are no loan commitments made by the Company at March 31, 2022 (March 31, 2021 '' Nil).

3.24. Investments

a. The investments are made from the respective funds of the Policyholders'' or Shareholders'' and investment income thereon has been accounted accordingly.

b. All investments are performing investments.

3.25. Interest rate derivatives

In line with the requirement of IRDAI Investment Master circular, the Company has put in place a derivative policy approved by the Board which covers various aspects that apply to the functioning of the derivative transactions undertaken to substantiate the hedge strategy to mitigate the interest rate risk, thereby managing the volatility of returns from future fixed income investments, due to variations in market interest rates.

The Company has during the year, as part of its hedging strategy, entered into Forward Rate Agreements (FRA) transactions to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI Investment Master Circular. The Forward Rate Agreement derivative contracts are over-the-counter (OTC) transactions, agreeing to buy notional value of a debt security at a specified future date, at a price determined at the time of the contract with an objective to lock in the price of an interest bearing security at a future date.

c) A net amount of '' 968,092 thousand for the year ended March 31,2022 (March 31,2021: '' 76,781 thousand) was recognised in Revenue Account being the portion of loss determined to be ineffective portion of the effective hedge. The amount that was removed from the cash flow hedge reserve account during the year ended March 31, 2022 in respect of forecast transaction for which hedge accounting had previously been used but is no longer expected to occur is Nil (March 31, 2021: Nil). The hedged forecast transactions are expected to occur over the outstanding tenor of underlying policy liabilities and corresponding hedging gain/loss will accordingly flow to the Revenue Account

d) Disclosures on risk exposure in Interest rate derivatives:

e) Risk exposure in Forward Rate Agreement

A hedge is deemed effective, if it has a high statistical correlation between the change in value of the hedged item and the hedging instrument (FRA). Gains or losses arising from hedge ineffectiveness, if any, are recognised in the Revenue Account. The tenor of the hedging instrument may be less than or equal to the tenor of underlying hedged transaction.

The exposure limit has been calculated on the basis of Credit Equivalent Amount using the Current Exposure Method (CEM) as detailed below:

The Credit Equivalent Amount of a market related off-balance sheet transaction calculated using the CEM is the sum of

a) The current credit exposure (gross positive mark to market value of the contract)

3.27. Valuation of Investment property

In accordance with the IRDAI Regulations, 2002 (Preparation of Financial Statements and Auditors'' Report of Insurance Companies), the Company''s investment property has been revalued. The Company has revalued all its investment properties held for more than one year and market value for such properties is based on valuation performed by an independent valuer at March 31, 2022. The opinion on market value by the independent valuer, is prepared in accordance with the "The RICS Valuation Standards" published by the Royal Institution of Chartered Surveyors ("RICS"), subject to variation to meet local established law, custom, practice and market conditions. The methods used in valuation of property includes "Direct comparable approach". The real estate investment property is accordingly valued at '' 4,830,436 thousand at March 31, 2022 (March 31, 2021: '' 4,756,735 thousand). The historical cost of the property at March 31, 2022 is '' 3,836,532 thousand (March 31, 2021: '' 3,836,532 thousand).

3.28. Impairment of investment assets

The total impairment loss recognised for the year ended March 31, 2022 is '' 1,509,795 thousand (year ended March 31, 2021: '' 487,077 thousand).

Impairment loss recognized in the revenue account for the year ended March 31, 2022 is '' 233,219 thousand (March 31, 2021: '' 201,234 thousand).

Further, impairment loss recognised in the Profit and Loss account for the year ended March 31,2022 is '' 1,276,577 thousand (March 31,2021: '' 285,843 thousand)

3.29. Encumbrances of assets

a. Assets deposited with National Securities Clearing Corporation Limited (NSCCL)

Mutual fund units of '' 1,030,145 thousand (March 31,2021: Nil) has been deposited with NSCCL towards margin requirement for equity trade settlement.

Terms of pledge: Physical custody of the mutual fund units are with clearing house. These units can be invoked by the clearing houses in case of any default by the Company in settlement of equity transactions.

3.31. Securities Lending and Borrowing Scheme (SLB)

Equity shares transferred under SLB continue to be recognised on the Balance Sheet as the Company retains all the associated risks and rewards of these securities. The value of equity shares lent by the Company under SLB and outstanding at March 31,2022 is '' 2,836,127 thousand (March 31,2021: '' 2,738,297 thousand).

3.32. Reverse Repo transactions in Government securities/Corporate Debt Securities

Disclosures pursuant to IRDAI notification ref IRDA/F&I/CIR/INV/250/12/2012 dated December 4, 2012:

There is no investment in reverse repo for the year ended March 31, 2022 (March 31, 2021 '' Nil).

3.42. Extra allocation

As per the product filing for Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan, extra allocation of units made and total extra allocation recovered is disclosed as below.

Total extra allocation made with respect to group products (Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan) for the year ended March 31, 2022 is '' Nil (for year ended March 31, 2021: '' Nil ).

The amount of recovery towards extra allocation for the year ended March 31, 2022 is '' 499 thousand (year ended March 31, 2021: '' 6,125 thousand).

3.43. Dividend

Interim dividend appropriation for the year ended March 31, 2022 is '' Nil (year ended March 31, 2021: '' Nil)

Final dividend proposed for year ended March 31, 2022 is '' 790,518 thousand (year ended March 31, 2021: '' 2,871,978 thousand)

Unclaimed dividend of '' 7,532 thousand at March 31, 2022 (at March 31, 2021: '' 7,033 thousand) represents dividend paid but not claimed by shareholders, and are represented by a bank balance of an equivalent amount.

3.47. Long term contracts

3.48. Corporate Social Responsibility

The amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ended March 31, 2022 was '' 68,544 thousand (year ended March 31, 2021: '' 108,425 thousand).

3.49. Loans and advances to subsidiaries, associates and related entities

There are no investments by the loanee in the shares of the Company.

Expense of Management

In accordance with the IRDAI (Expenses of Management of insurers transacting life insurance business) regulation 2016 read with circular IRDA/F&A/CIR/ MISC/184/10/2019 dated October 4, 2019, expense of management in excess of allowable limit in any business segment is required to be borne by the Shareholders'' and separately disclosed in the Profit and Loss account & the Revenue Account.

The Company is in compliance with the expense of management regulation at an overall level. Further for the Non-par line of business, during the year ended March 31, 2022, expense of management in excess of allowable limits amounting to '' 2,145,034 thousand has been charged to and separately disclosed in the Profit and Loss account. (March 31, 2021: '' 979,474 thousand).

Note:

1) The contributions from the shareholders'' account in the Revenue Account for the year ended March 31, 2021 include an amount of '' 490,087 thousand transferred to participating line of business in compliance with the IRDAI''s letter dated February 18, 2021 in relation to tax charged to participating line of business in FY2014-15.

3.51. Potential impact due to outbreak of COVID-19 Business Operations

During the year, lockdown restrictions were eased and economic activity resumed across the country. The learnings from the lockdown imposed in the country due to two waves of COVID-19 and the digital preparedness has helped the Company manage challenges posed by the omnicron wave effectively. These learnings will continue to guide the Company in managing any challenges posed by COVID-19 in future as well.

The facility to WFH was provided to the employees of the Company only through Company systems, which are hardened and are configured with requisite data security controls. The usual operations of the Company are carried out through remote location/ WFH via secured servers.

There have been no material changes in the controls or processes followed in the financial statement closing process of the Company. The Company has tested all the material controls over financial reporting as at March 31, 2022 and found them to be operating effectively.

Valuation of investment assets

The investment assets for the Company primarily include assets held to cover linked liability, assets for participating policyholder, assets for non-participating (investment) policyholder, assets for other non-participating policyholders and assets pertaining to shareholders''.

The investment risk on the assets held to cover linked liability is borne by the linked policyholders. The investment risk on assets held for the non-guaranteed portion of some of the non-participating policies and participating policies is borne by the respective policyholders. The impact of market value changes is therefore a pass through to large extent and impact on profitability of the Company is limited.

Further, the assets for other non-participating policyholders and assets pertaining to shareholders'' investments include ~ 73% in Central Government and State Government securities and ~ 18% in AAA or equivalent rated corporate securities.

In accordance with the impairment policy of the Company, the quantitative and qualitative assessment is done by the Company as at March 31, 2022. These assessments have taken into account potential implications arising from COVID-19 on the investee companies. The details of impairment of investment assets is given in note 3.28.

Further, the Company has evaluated the recoverability of all the investment assets and the Company expects to recover the carrying amount of these assets.

Valuation of policy liabilities and solvency

Based on the assessment, the Company is carrying a provision (net of reinsurance) of '' 241,640 thousand for COVID-19 claims as at March 31, 2022 for IBNR, which is included in Policy liabilities.

The Company had carried out a stress test at December 31, 2021 position to assess potential impact on solvency margin taking into account the market stress. Based on such assessment, the solvency is still higher than the requirement of the IRDAI.

Recoverability of other current assets

The Company has evaluated the recoverability of its current assets which primarily includes investment related assets (interest accrued) and assets held for unclaimed amount of policyholders. The outstanding premium includes premium due for policies in grace period and have a corresponding policy liability amount ascertained for the same. The Company expects to recover the carrying amount of all these assets.

The impact of the global health pandemic may be different from that estimated as at the date of approval of these financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

3.52. Previous year comparatives

Previous year''s figures have been regrouped and reclassified wherever necessary to conform to current year''s presentation.

Mar 31, 2021

3. Notes to Accounts 3.1. Contingent liabilities	Â	(' '000)
Particulars	at March	At March
Particulars	31,2021	31,2020
Partly-paid up investments* Claims, other than those under policies, not acknowledged as debts comprising of:Â -Claims made by vendors for disputed	10,612,933	4,500,000
payments -Claims for damages made by landlords (of	1,176	1,176
premises taken on lease) -Claims made by employees and advisors for	41,354	41,354
disputed dues and compensation Underwriting commitments outstanding (in	8,523	9,023
respect of shares and securities) Guarantees given by or on behalf of the Company by various banks in favour of	Â	Â
government authorities, hospital and court Statutory demands/liabilities in dispute, not	^-	^-
provided for# Reinsurance obligations to the extent not	1,536,996	1,536,996
provided for Policy related claims under litigation in different consumer forums:	Â	Â
-Claims for service deficiency	69,585	70,921
-Claims against repudiation	845,791	547,788
Total	13,116,358	6,707,258
*in respect of partly paid debentures & equity shares	Â	Â

#amount pertains to objections raised by office of the Commissioner of Service tax, Goods and Service tax Mumbai on certain tax positions taken by the Company.

3.2 Actuarial method and assumptions

The actuarial liability in respect of both participating and non-participating policies is calculated using the gross premium method, using assumptionsÂ for interest, mortality, morbidity, expense and inflation and, in the caseÂ of participating policies, future bonuses together with allowance forÂ taxation and allocation of profits to shareholders. These assumptionsÂ are determined as prudent estimates at the date of valuation includingÂ allowances for possible adverse deviations.

the liability for the unexpired portion of the risk for the non-unit liabilities of linked business and attached riders is the higher of the liability calculatedÂ using discounted cash flows and the unearned premium reserve.

An unexpired risk reserve and a reserve in respect of claims incurred but not reported is held for contracts wherein there is a possibility of lag inÂ intimation of claims.

the unit liability in respect of linked business is the value of the units

standing to the credit of policyholders, using the Net asset value ('NAV')

prevailing at the valuation date.

a brief of the assumptions used in actuarial valuation is as below:

a) Â Â Â the interest rates used for valuing the liabilities are in the range ofÂ 3.13% to 5.56% per annum. the interest rates used at March 31,Â 2020 were in the range of 4.25% to 6.59% per annum.

b) Â Â Â mortality rates used are based on the published "indian AssuredÂ Lives Mortality (2012 - 2014) Ult." mortality table for assurancesÂ and LiC (a) 96-98 table for annuities adjusted to reflect expectedÂ experience. Morbidity rates used are based on CIET 93 table,Â adjusted for expected experience, or on risk rates provided byÂ reinsurers.

c) Â Â Â Expenses are provided for at least at the current levels in respect ofÂ renewal expenses, with no allowance for any future improvement.

d) Â Â Â Per policy renewal expenses are assumed to inflate at 4.22% perÂ annum. the expense inflation assumption used at March 31, 2020Â was 4.05%.

e) Â Â Â the bonus rates for participating business to be declared in theÂ future is consistent with the valuation assumptions.

f) Â Â Â the tax rate applicable for valuation at March 31, 2021 is 14.56%Â per annum. the tax rate applicable for valuation at March 31, 2020Â was 14.56% per annum.

Certain explicit additional provisions are made, which include the following:

a) Â Â Â Reserves for additional expenses that the Company may have toÂ incur if it were to close to new business twelve months after theÂ valuation date.

b) Â Â Â Reserves for guarantees available to individual and group insuranceÂ policies.

c) Â Â Â Reserves for cost of non-negative claw back additions.

d) Â Â Â Reserves for free look option given to policyholders calculated usingÂ a free look cancellation rate of 2.70% as on March 31, 2021. theÂ free look cancellation assumption used at March 31, 2020 wasÂ 2.70%.

e) Â Â Â Reserves for lapsed policies eligible for revivals.

f) Â Â Â Eased on its current evaluation, the Company is carrying a provisionÂ of ' 29,864 lakhs as at March 31, 2021, for potential claims due toÂ COVID, in excess of normal provisions. Additionally a provision forÂ Incurred but Not Reported claims on account of Covid-19 of ' 3,364Â lakhs is also held.

g) Â Â Â An additional reserve is held for incurred but not reported claims.

3.3. Â Â Â Funds for Future Appropriations ('FFA')

The balance of unit-linked FFA at March 31, 2021 ofÂ 'Â Nil (March 31, 2020:Â 'Â Nil) and participating FFA ofÂ 'Â 13,531,799 thousand (March 31, 2020:Â 'Â 12,326,605 thousand) is not available for distribution to shareholders. such amount is classified under Funds for Future appropriations, in theÂ Balance sheet.

3.4. Â Â Â Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months at march 31, 2021 isÂ 'Â 33,902 thousand (March 31,2020:Â 'Â 30,314 thousand).

3.5. Â Â Â Reconciliation of unclaimed amounts of policyholders

Pursuant to iRDAI circular No. iRDA/F&A/CiR/CLD/114/05/2015 dated May 28, 2015 and iRDA/F&A/CiR/CPM/134/07/2015 dated July 24, 2015 on "Handling of unclaimed amounts pertaining to policyholders", the Company has created a single segregated fund to manage all the unclaimed monies. TheÂ amount in such unclaimed fund has been invested in money market instruments and /or fixed deposit of scheduled banks.

The amount in the unclaimed fund has been disclosed in schedule 12 as "Assets held for unclaimed amount of policyholders". Investment income accruing to the unclaimed fund has been credited to the fund and disclosed as 'Other Income under Linked Life segment in the Revenue Account. Such investmentÂ income net of fund management charges ('FMC') is paid/ accrued as "interest on unclaimed amounts" in schedule 4 of the financial statements asÂ "Benefits paid".

3.7. Direct taxes

The current tax provision is determined in accordance with the provisions of income Tax Act,1961. The provision for current tax for the year ended March 31, 2021 is ' 2,630,972 thousand (year ended march 31, 2020: ' 1,313,915 thousand).

the provision for current tax includes an amount of ' 1,418,455 thousand for the year ended march 31, 2021 (year ended march 31, 2020: ' 1,313,915 thousand) which has been charged on the total surplus of the participating line of business in Revenue account, in line with the Company'sÂ accounting policy.

Further, tax expense amounting to ' 1,212,517 for the year ended march 31,2021 (year ended march 31,2020: ' Nil) pertaining to other than participating line of business has been charged to profit & loss account.

Deferred tax asset is recognized on the linked funds for future appropriation to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized.

deferred tax charge for the year ended march 2021 is ' nil (year ended march 31, 2020: ' 446 thousand).

3.8. Operating lease commitments

The Company takes premises, motor vehicles, office equipments and servers on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating leaseÂ arrangements are charged to the Revenue account and the profit and Loss account over the lease term on a straight line basis. the total operating leaseÂ rentals charged for the year ended March 31, 2021 isÂ 'Â 596,948 thousand (year ended March 31, 2020:Â 'Â 630,803 thousand).

3.17. Employee Stock Option Scheme ("ESOS")

The Company granted options to its employees under its Employee Stock Option Scheme, prior to listing, since approval of its Employee Stock Option Scheme - 2005. this pre-ipo scheme was referred to as 'Esos 2005' or 'scheme'. the scheme permitted the grant of stock options up to 3% of the issued capital ofÂ the Company. The Board of Directors have approved the amendment of Esos 2005 (hereafter referred to as 'Esos 2005 (Revised)'). As per the Esos 2005Â (Revised), the aggregate number of shares issued or issuable since March 31, 2016 pursuant to the exercise of any options granted to the Eligible EmployeesÂ issued pursuant to the scheme or any other stock option scheme of the Company, shall not exceed a figure equal to 2.64% of the number of shares issuedÂ as on March 31, 2016. The maximum number of options that can be granted to any Eligible Employee in a financial year shall not exceed 0.1% of the issuedÂ shares of the Company at the time of grant of options. The Exercise Price shall be determined by the Board Nomination & Remuneration Committee inÂ concurrence with the Board of Directors of the Company on the date the options are granted and shall be reflected in the Award Confirmation. These changesÂ (ESOS 2005 (Revised)) were approved by the shareholders of the Company in the Annual General Meeting held on July 17, 2017. The Company grantedÂ options in nine more tranches under Esos 2005 (Revised), namely 2017-18, 2018- 19, 2018-19 special options, 2018-19 joining options, 2019-20, 2019-20Â joining options, 2020-21 and two tranches of 2020-21 joining options. on April 24, 2019, the exercise period of the Esos 2005 (Revised) was modified toÂ not exceed five years from the date of vesting of options as may be determined by the Board Nomination & Remuneration Committee for each grant. ThisÂ amendment was approved by the shareholders of the Company at the Annual General Meeting held on July 17, 2019.

Out of the total outstanding stock options of the previous year, 2,412,290 options are vested during the year ended March 31, 2021 andÂ 'Â 45,487 thousand was realised by exercise of options during the year ended march 31,2021. During the year ended march 31,2021 the Company has recognizedÂ a compensation cost ofÂ 'Â Nil (year ended March 31, 2020:Â 'Â Nil) as the intrinsic value of the options.

Had the company followed fair value method based on binomial tree model valuing its options compensation cost for the year ended would have been higher byÂ 'Â 331,499 thousand (March 31, 2020:Â 'Â 502,473 thousand) and the proforma profit after tax would have beenÂ 'Â 9,269,965 thousand (MarchÂ 31, 2020:Â 'Â 10,185,014 thousand). On a proforma basis, the company's basic and diluted earnings per share would have beenÂ 'Â 6.46 (March 31, 2020:Â 'Â 7.09) andÂ 'Â 6.44 (March 31, 2020:Â 'Â 7.08) respectively

3.18. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange fluctuationÂ loss debited to Revenue account for the year ended March 31, 2021 isÂ 'Â 6,058 thousand (year ended March 31, 2020:Â 'Â 3,700 thousand).

3.20. Managerial Remuneration

The appointment of managerial personnel is in accordance with the requirements of Section 34A of the insurance Act, 1938. iRDAI hasÂ issued guidelines on august 05, 2016 on remuneration of Non- ExecutiveÂ directors and Managing director ('MD') /Chief executive officer ('CEo') /Â whole Time Directors ('WTD'), which have prescribed certain qualitativeÂ and quantitative disclosures. The disclosures for year ended March 31,Â 2021 are given below:

Remuneration to MD/CEO/WTD:Qualitative disclosures:

A) information relating to the bodies that oversee remuneration.

Name, composition and mandate of the main body overseeing remuneration:

The Board Nomination and Remuneration Committee (BNRC/Committee) is the body which oversees aspects pertaining to remuneration. TheÂ functions of the Committee include identifying persons who are qualifiedÂ to become Directors and who may be appointed in senior management inÂ accordance with the criteria laid down and recommending to the BoardÂ their appointment and removal and formulating a criteria and specifying theÂ manner for effective evaluation of every individual director's performance,Â evaluation of the performance of the Board and its committees, andÂ reviewing its implementation and compliance; considering to extend orÂ continue the term of appointment of the Independent Director, on theÂ basis of the report of performance evaluation of Independent Directors;Â recommending to the Board a policy relating to the remuneration for theÂ Directors, key managerial personnel and other employees; recommendingÂ to the Board all remuneration, in whatever form, payable to seniorÂ management; ensuring that the level and composition of remunerationÂ is reasonable and sufficient to attract, retain and motivate Directors of

the quality required to run the Company successfully; ensuring that the relationship of remuneration to performance is clear and meets appropriateÂ performance benchmarks; approving the compensation program andÂ ensuring that remuneration to Directors, key managerial personnel andÂ senior management involves a balance between fixed and incentiveÂ pay reflecting short and long term performance objectives appropriateÂ to the working of the Company and its goals; formulating the criteriaÂ for determining qualifications, positive attributes and independenceÂ of a Director; devising a policy on diversity of the Board; consideringÂ and approving employee stock option schemes and administering andÂ supervising the same.

External consultants whose advice has been sought, the body by which they were commissioned and in what areas of theÂ remuneration process:

The Company employed the services of reputed consulting firms for market benchmarking in the area of compensation.

Scope of the company's remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable toÂ foreign subsidiaries and branches:

The Company's Policy on Compensation & Benefits ("Compensation Policy") for Managing Director & CEO, Other wholetime Directors, nonexecutive Directors, Key Management Person (KMP), Senior ManagementÂ Personnel (SMP) and other employees was last amended and approved byÂ the BNRC and the Board at its Meeting held on August 28, 2020.

Type of employees covered and number of such employees:

All employees of the Company are governed by the Compensation Policy. The total number of permanent employees governed by the CompensationÂ Policy of the Company at March 31, 2021 was 14,413.

B) information relating to the design and structure of remuneration process.

Key features and objectives of remuneration policy:

The Company has historically followed prudent compensation practices under the guidance of the Board and the BNRC. The Company's approachÂ to compensation is based on the ethos of meritocracy and fairness withinÂ the framework of prudent risk management. this approach has beenÂ incorporated in the Compensation policy, the key elements of which areÂ given below:

Effective governance of compensation:

the Company follows prudent compensation practices under the guidance of the BNRC and the Board. the decision relating to the remunerationÂ of the Managing Director and CEo (MD & CEo) and other wholetimeÂ Directors is reviewed and approved by the BNRC and the Board. the BNRCÂ and the Board approves the Key performance indicators (Kpis) and theÂ performance threshold for payment of performance bonus, if applicable.Â the BNRC assesses business performance against the Kpis. BasedÂ on its assessment, it makes recommendations to the Board regardingÂ compensation for MD & CEo and other wholetime Directors, performanceÂ bonus and long-term pay for all eligible employees, including seniorÂ management and key management persons.

Alignment of compensation philosophy with prudent risk taking:

the Company seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels. For the MD &Â CEo and other wholetime directors, compensation is sought to be alignedÂ to both pre-defined performance objectives of the Company as well asÂ prudent risk parameters. in addition, the Company has an EmployeesÂ stock option scheme aimed at enabling employees to participate in theÂ long-term growth and financial success of the Company through stockÂ option grants that vest over a period of time.

Whether the Remuneration committee reviewed the firm's remuneration policy during the past year, and if so, an overview ofÂ any changes that were made:

the BNRC reviewed the Company's Compensation and Benefits policy (the policy) at its meetings held on July 13, 2020 and August 28, 2020. the keyÂ changes in the policy are:

â¢ I n line with the Insurance Regulatory and Development Authority of india (IRDAI) circular dated June 30, 2020 highlighting that theÂ monetary value of perquisites including retiral benefits should haveÂ monetary ceilings and are accounted for as part of Fixed pay, theÂ nomenclature of the compensation elements and the definition ofÂ Fixed pay for the MD & CEo and other wTDs have been amendedÂ to include non-cash benefits and perquisites, contribution towardsÂ superannuation/ retirals and any other form of non-cash benefitsÂ & perquisites including reimbursable benefits & perquisites withÂ monetary ceilings. Accordingly, the definition of variable pay hasÂ also been consequently amended.

â¢ Â Â Â Methodology of valuing stock options has been incorporated for clarity.

â¢ Â Â Â The clause for Guaranteed bonus & Severance pay for Whole-timeÂ Directors has been modified to strengthen governance.

â¢ Â Â Â The clause on review of compensation for the MD & CEO and otherÂ Whole-time Directors has been modified for better clarity and in lineÂ with the IRDAI circular dated June 30, 2020.

â¢ Â Â Â The current list of non-cash benefits and perquisites provided toÂ employees including KMps/smps has been included in the list ofÂ non-cash benefits and perquisites.

â¢ Â Â Â A section related to compensation for non-executive IndependentÂ Director as Chairman/Chairperson of the Company, if any, has beenÂ incorporated into the policy. the remuneration payable in the case of anÂ independent Director being the Chairman/Chairperson of the CompanyÂ has been outlined in the policy to enable providing administrativeÂ support to the Chairman, and in accordance with the provisions of theÂ extant applicable regulatory and statutory requirements.

â¢ Â Â Â The frequency for the review of the Compensation Policy has beenÂ incorporated.

Description of the ways in which current and future risks are

taken into account in the remuneration processes.

â¢ Â Â Â The Company follows prudent compensation practices under theÂ guidance of the Board and the Board Nominations & RemunerationÂ Committee (BNRC). the Company's approach to compensationÂ is based on the ethos of meritocracy and fairness within theÂ framework of prudent risk management. the performance ratingÂ assigned to employees is based on assessment of performanceÂ delivered against a set of defined performance objectives. theseÂ objectives are balanced in nature and comprise a holistic mix ofÂ financial, customer, people, process, quality, compliance objectivesÂ and/or any other parameters as may be deemed fit.

â¢ Â Â Â For the MD & CEO and other wholetime Directors, compensation isÂ sought to be aligned to both pre-defined performance objectives ofÂ the Company as well as prudent risk parameters.

â¢ Â Â Â For the MD & CEO and other wholetime Directors, the quantum ofÂ bonus does not exceed a certain percentage (as stipulated in theÂ Compensation policy) of total fixed pay in a year; if the quantum ofÂ bonus exceeds a pre-defined percentage of the total fixed pay, aÂ part of the bonus is deferred and paid over a pre-defined period.

â¢ Â Â Â The deferred part of the variable pay (performance bonus) forÂ wholetime Directors is subject to malus, under which, the CompanyÂ will prevent vesting of all or part of the variable pay in the event ofÂ an enquiry determining gross negligence or integrity breach.

â¢ Â Â Â In claw back arrangements with wholetime Directors, the employeeÂ agrees to return, in case asked for, the previously paid variable pay toÂ the Company in the event of an enquiry determining gross negligenceÂ or integrity breach, taking into account relevant regulatory stipulations.

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

The Company's approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. The extent of variable pay for individual employees is linked to individual performance for sales frontline employees and to individual and organisation performanceÂ for non-sales frontline employees and employees in the management cadre. For the latter, the performance rating assigned is based on assessment ofÂ performance delivered against a set of defined performance objectives. these objectives are balanced in nature, and comprise a holistic mix of financial,Â customer, people, process, quality and compliance objectives and/or any other parameters as may be deemed fit. For the MD & CEo and other wholetimeÂ Directors, to ensure effective alignment of compensation with prudent risk parameters, the Company takes into account various risk parameters along withÂ other pre-defined performance objectives of the Company.

Further, in accordance with the IRDAI circular IRDA/F&A/GDL/LSTD/155/08/2016 dated August 5 2016 read with IRDA/F&A/CIR/MISC/184/10/2019 dated October 4, 2019, annual managerial remuneration in excess ofÂ 'Â 15,000 thousand per director is required to be borne by the Shareholders' and separatelyÂ disclosed in the profit and Loss account. Accordingly, managerial remuneration in excess of such specified limit amounting toÂ 'Â 105,611 thousand has beenÂ charged to and separately disclosed in the Profit and Loss account for the year ended March 31, 2021 (March 31, 2020:Â 'Â 78,333 thousand).

3.21. Commitments

Commitments made and outstanding (net of advances) for Company's investment in Real estate (investment property) isÂ 'Â Nil (March 31, 2020Â 'Â Nil).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) isÂ 'Â 287,425 thousand (March 31, 2020:Â 'Â 318,281 thousand)

There are no loan commitments made by the Company (March 31, 2020Â 'Â Nil).

a. Â Â Â The investments are made from the respective funds of the Policyholders' or Shareholders' and investment income thereon has been accountedÂ accordingly.

b. Â Â Â All investments are performing investments.

3.24. interest rate derivatives

in line with the requirement of iRDai investment Master circular, the Company has put in place a derivative policy approved by Board which covers various aspects that apply to the functioning of the derivative transactions undertaken to substantiate the hedge strategy to mitigate the interest rate risk, therebyÂ managing the volatility of returns from future fixed income investments, due to variations in market interest rates.

a) the Company has during the year, as part of its hedging strategy, entered into Forward rate agreements (Fra) transactions to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI investment master Circular. the Forward Rate AgreementÂ derivative contracts are over-the-counter (oTC) transactions, agreeing to buy notional value of a debt security at a specified future date, at a priceÂ determined at the time of the contract with an objective to lock in the price of an interest bearing security at a future date.

d) Â Â Â A net amount ofÂ 'Â 76,781 thousand for the year ended March 31, 2021 (Previous year Nil) was recognised in Revenue Account being the portionÂ of loss determined to be ineffective portion of the effective hedge. The amount that was removed from the cash flow hedge reserve account duringÂ the year ended march 31, 2021 in respect of forecast transaction for which hedge accounting had previously been used but is no longer expectedÂ to occur is nil (previous year nil). the hedged forecast transactions are expected to occur over the outstanding tenor of underlying policy liabilitiesÂ and corresponding hedging gain/loss will accordingly flow to the revenue account

e) Â Â Â Disclosures on risk exposure in interest rate derivatives:

i. Â Â Â interest rate derivative hedging instruments: derivatives are financial instruments whose characteristics are derived from the underlying assets, orÂ from interest and exchange rates or indices. interest rate derivatives include forward rate agreements, interest rate swaps and interest rate futures.Â the Company during the financial year has entered into forward rate agreement (Fra) derivative instrument to hedge exposure due to interest rateÂ sensitivity for highly probable forecasted transactions. these hedges were entered only for hedging purpose to hedge the interest rate risk. thisÂ hedge is carried in accordance with its established policies, strategy, objective and applicable regulations.

ii. Â Â Â derivative policy, process and hedge effectiveness assessment: the Company has a well- defined Board approved derivative policy and standardÂ operating procedures setting out the strategic objectives, regulatory and operational framework and risks associated with interest rate derivatives.Â the policy includes the risk measurement and monitoring, processes to be followed and controls thereon. the accounting treatment has beenÂ documented and ensures a process of periodic effectiveness assessment and accounting in accordance with applicable accounting standard issuedÂ by the institute of Chartered Accountants of india (iCAi).

the Company has clearly defined roles and responsibilities to ensure independence and accountability through the investment decision, trade execution, to settlement, accounting and periodic reporting and audit of the interest rate derivative exposures. the overall policy, risk managementÂ framework for the interest rate derivatives are monitored by the Board Risk management Committee.

iii. Â Â Â scope and nature of risk identification, risk measurement, and risk monitoring: the derivative policy as approved by the Board identify risk associatedÂ with interest rate derivatives transactions and sets appropriate market risk limits such as stress testing and value-at-risk limits. Financial risks of theÂ derivative portfolio are measured and monitored on periodic basis.

f) Â Â Â Risk exposure in Forward Rate Agreement

A hedge is deemed effective, if it has a high statistical correlation between the change in value of the hedged item and the hedging instrument (FRA). Gains or losses arising from hedge ineffectiveness, if any, are recognised in the Revenue Account. The tenor of the hedging instrument mayÂ be less than or equal to the tenor of underlying hedged transaction.

3.26. Â Â Â Valuation of investment property

in accordance with the iRDAI Regulations, 2002 (Preparation of Financial Statements and Auditors' Report of insurance Companies), the Company's investment property has been revalued. The Company has revalued all its investment properties held for more than one year and market value for suchÂ properties is based on valuation performed by an independent valuer at March 31, 2021. the opinion on market value by the independent valuer, isÂ prepared in accordance with the "the RICs valuation standards" published by the royal institution of Chartered surveyors ("RICs"), subject to variation toÂ meet local established law, custom, practice and market conditions. The methods used in valuation of property includes "Direct comparable approach".Â The real estate investment property is accordingly valued at ' 4,756,735 thousand at March 31, 2021 (March 31, 2020: ' 4,750,245 thousand). TheÂ historical cost of the property is ' 3,836,532 thousand (March 31, 2020: ' 3,836,532 thousand).

3.27. Â Â Â impairment of investment assets

The total impairment loss recognised for the year ended March 31, 2021 is ' 487,077 thousand (year ended March 31, 2020: ' 2,597,937 thousand).

Impairment loss recognized in the revenue account for the year ended March 31, 2021 is ' 201,234 thousand (March 31, 2020: ' 2,132,353 thousand).

Further, impairment loss recognised in the Profit and Loss account for the year ended March 31, 2021 is ' 285,843 thousand (March 31, 2020: ' 465,584 thousand)

3.28. Â Â Â Encumbrances of assets

a. Assets deposited with National Securities clearing corporation Limited (NSccL) and indian clearing corporation Limited (icOL)

Fixed deposit of ' Nil (March 31, 2020: ' 1,000,000 thousand for NSCCL) has been deposited with NSCCL towards margin requirement for equity trade settlement.

Terms of pledge:Â Physical custody of the fixed deposits are with respective clearing houses, however the income accrued on these deposits shall be passed on to the Company on the maturity of the deposits. These deposits can be invoked by the clearing houses in case of any default by the CompanyÂ in settlement of equity transactions.

3.29. Â Â Â Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside india at March 31,2021 (March 31, 2020: Nil) except the assets disclosed in the note 3.26.

3.30. Â Â Â Securities Lending and Borrowing Scheme (SLB)

Equity shares transferred under sLB continue to be recognised on the Balance sheet as the Company retains all the associated risks and rewards of these securities. the value of equity shares lent by the Company under sLB and outstanding at march 31,2021 is ' 2,738,297 thousand (march 31,2020: ' 582,183 thousand).

3.41. Â Â Â Extra allocation

As per the product filing for Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan, extra allocation of units made and total extra allocation recovered is disclosed as below.

Total extra allocation made with respect to group products (Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan) for the year ended March 31, 2021 isÂ 'Â Nil (for year ended March 31, 2020:Â 'Â 1,200 thousand).

The amount of recovery towards extra allocation for the year ended march 31,2021 isÂ 'Â 6,125 thousand (year ended March 31, 2020:Â 'Â 8,987 thousand).

3.42. Â Â Â Dividend

interim dividend appropriation for the year ended March 31, 2021 isÂ 'Â Nil (year ended March 31, 2020:Â 'Â 1,384,784 thousand including dividend distribution tax ofÂ 'Â 236,1 13 thousand)

Final dividend proposed for year ended March 31, 2021 isÂ 'Â 2,871,978 thousand (year ended March 31, 2020:Â 'Â Nil)

Unclaimed dividend ofÂ 'Â 7,033 thousand at March 31, 2021 (at March 31, 2020:Â 'Â 7,055 thousand) represents dividend paid but not claimed by shareholders, and are represented by a bank balance of an equivalent amount.

3.46. Â Â Â Pending litigations

The Company's pending litigation comprises of claims against the Company primarily by the customers and proceedings pending with Tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed theÂ contingent liabilities where applicable, in its standalone financial statements. the Company does not expect the outcome of these proceedings to have aÂ material adverse effect on its financial statements at March 31, 2021. Refer note 3.1 for details on contingent liabilities.

in respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision ofÂ 'Â 432,176 thousand at March 31, 2021 (At March 31, 2020:Â 'Â 352,415 thousand).

3.47. Â Â Â Long term contracts

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards for material foreseeable losses on such long termÂ contracts including derivative contracts has been made in the financial statements.

For insurance contracts, actuarial valuation of liabilities for policies is done by the Appointed Actuary of the Company. The methods and assumptions used in valuation of liabilities are in accordance with the regulations issued by the insurance Regulatory and Development Authority of india ("iRDAi") andÂ actuarial practice standards and guidance notes issued by the institute of Actuaries of india.

3.48. Â Â Â Corporate Social Responsibility

The amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ended March 31, 2021 wasÂ 'Â 108,425 thousand (year ended March 31, 2020:Â 'Â 170,685 thousand).

3.49. Â Â Â Loans and advances to subsidiaries, associates and related entities

Pursuant to Securities and Exchange Board of india (Listing obligations and disclosure requirements) Regulations, 2015, disclosures pertaining to loans and advances given to subsidiaries, associates and related entities are given below:

There are no investments by the loanee in the shares of the Company.

3.50. Â Â Â Specified Bank Notes

The disclosure requirements for the details of specified bank notes (SBNs) are not provided, since the Company is an insurance company.

Expense of Management

in accordance with the iRDAI (Expenses of Management of insurers transacting life insurance business) regulation 2016 read with circular iRDA/F&A/CiR/ MiSC/184/10/2019 dated October 4, 2019, expense of management in excess of allowable limit in any business segment is required to be borne by theÂ Shareholders' and separately disclosed in the Profit and Loss account & the Revenue Account.

The Company is in compliance with the expense of management regulation at an overall level. Further for the Non-par line of business, during the year ended March 31, 2021, expense of management in excess of allowable limits amounting toÂ 'Â 979,474 thousand has been charged to and separatelyÂ disclosed in the Profit and Loss account. (March 31, 2020:Â 'Â 4,435,307 thousand).

Note:

1) The contributions from the shareholders' account in the Revenue Account for the year ended March 31, 2021 include an amount ofÂ 'Â 490,087 thousand transferred to participating line of business in compliance with the IRDAI's letter dated February 18, 2021 in relation to tax charged toÂ participating line of business in FY2014-15. (year ended March 31, 2020:Â 'Â Nil)

3.52. Potential impact due to outbreak of coViD-19 Business operations

The rapid global outbreak of the Corona virus (COVID-19) pandemic has also impacted India and as the companies in India approached their year-end, there was an urgent need to activate the Business Continuity Plan (BCP) to enable employees to work from home (WFH).

Valuation of investment assets

The investment risk on the assets held to cover linked liability is borne by the linked policyholders. The investment risk on assets held for the non-guaranteed portion of some of the non-participating policies and participating policies is borne by the respective policyholders. the impact of market value changes is therefore a pass through to large extent and impact on profitability of the Company is limited.

Further, the assets for other non-participating policyholders and assets pertaining to shareholders' investments include ~ 67% in Central Government and State Government securities and ~ 23% in AAA or equivalent rated corporate securities.

in accordance with the impairment policy of the Company, the quantitative and qualitative assessment is done by the Company as at March 31, 2021. these assessments have taken into account potential implications arising from CoviD-19 on the investee companies. the details of impairment ofÂ investment assets is given in note 3.27.

Further, the Company has evaluated the recoverability of all the investment assets and the Company expects to recover the carrying amount of these assets.

Valuation of policy liabilities and solvency

we have observed the peak of reporting of claims around the month of september-october 2020, and we have been observing a downward trend in month on month claims reported since then basis the claim experience analysis due to Covid-19 on overall portfolio.

a global provision has been held to allow for additional claims on account of Covid-19, as the expected death outgo, net of reinsurance recovery, over next 12 months of FY2022. the age cohort wise Covid-19 claim experience as a % of IALM 12-14 on overall portfolio has been observed and the mortalityÂ assumption for Covid-19 claims are set based on the same with a margin of prudence.

the Company had carried out a stress test at march 31,2021 position to assess potential impact on solvency margin taking into account the market stress and assess the solvency to be in line with the requirement of the IRDAI.

Recoverability of other current assets

the Company has evaluated the recoverability of its current assets which primarily includes investment related assets (interest accrued) and assets held for unclaimed amount of policyholders. the outstanding premium includes premium due for policies in grace period and have a corresponding policy liabilityÂ amount ascertained for the same. the Company expects to recover the carrying amount of all these assets.

the impact of the global health pandemic may be different from that estimated as at the date of approval of these financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

3.53. Previous year comparatives

previous year's figures have been regrouped and reclassified wherever necessary to conform to current year's presentation.

Mar 31, 2019

1. Corporate Information

ICICI Prudential Life Insurance Company Limited (âthe Companyâ) promoted by ICICI Bank Limited and Prudential Corporation Holdings Limited, incorporated on July 20, 2000 as a Company under the Companies Act, 2013 (âthe Actâ). The Company is licensed by the Insurance Regulatory and Development Authority of India (âIRDAIâ) for carrying life insurance business in India. The license is in force as at March 31, 2019.

The Company carries on business of providing life insurance, pensions and health insurance products to individuals and groups. Riders providing additional benefits are offered under some of these products. The business is conducted in participating, non-participating and unit linked lines of businesses. These products are distributed through individual agents, corporate agents, banks, brokers, the Companyâs proprietary sales force and the Company website.

Note:

1) As per IRDAI circular IRDA/F&A/CIR/Misc/l73/07/2017 dated July 25, 2017, unclaimed amount of policyholders with ageing more than 120 months transferred to Senior Citizensâ Welfare Fund (SCWF), amounting to Rs. 48,166 thousand, was shown as âContingent Liabilityâ at March 31, 2018. However, IRDAI via circular IRDA/F&A/CIR/Misc/105/07/2018 dated July 11, 2018 has withdrawn this disclosure requirement, with immediate effect. Hence amount transferred to SCWF is not reported in the above disclosure.

2) There has been a Supreme Court (SC) judgement dated February 28, 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the Employment Provident Fund Act. There are interpretative aspects related to the judgement including the effective date of application. The Company will continue to assess any further developments in this matter for their implications on financial statements, if any.

2.1 Actuarial method and assumptions

The liability for the unexpired portion of the risk for the non-unit liabilities of linked business and attached riders is the higher of liability calculated using discounted cash flows and unearned premium reserves.

An unexpired risk reserve and a reserve in respect of claims incurred but not reported is held for contracts wherein there is a possibility of lag of intimation of claims.

The unit liability in respect of linked business is the value of the units standing to the credit of policyholders, using the Net Asset Value (âNAVâ) prevailing at the valuation date.

A brief of the assumptions used in actuarial valuation is as below:

a) The interest rates used for valuing the liabilities are in the range of 4.44% to 6.48% per annum. The interest rates used at March 31, 2018 were in the range of 4.66% to 6.13% per annum.

b) Mortality rates used are based on the published âIndian Assured Lives Mortality (2006 - 2008) Ult.â mortality table for assurances and LIC (a) 96-98 table for annuities adjusted to reflect expected experience. Morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates provided by reinsurers.

c) Expenses are provided for at least at the current levels in respect of renewal expenses, with no allowance for any future improvement but with an allowance for any expected worsening.

d) Per policy renewal expenses are assumed to inflate at 4.19% per annum. The expense inflation assumption used at March 31, 2018 was 4.38%.

e) No allowance is made for expected lapses in the future.

f) The bonus rates for participating business to be declared in the future is consistent with the valuation assumptions.

g) The tax rate applicable for valuation at March 31, 2019 is 14.56% p.a.

Certain explicit additional provisions are made, which include the following:

a) Reserves for additional expenses that the Company may have to incur if it were to close to new business twelve months after the valuation date.

b) Reserves for guarantees available to individual and group insurance policies.

c) Reserves for cost of non-negative claw back additions.

d) Reserves for free look option given to policyholders calculated using a free look cancellation rate of 3.50%. The free look cancellation assumption used at March 31, 2018 was 2.10%.

e) Reserves for lapsed policies eligible for revivals.

2.2. Funds for Future Appropriations (âFFAâ)

The balance of unit-linked FFA at March 31, 2019 of Rs. 7,114 thousand (March 31, 2018: Rs. 8,036 thousand) and participating FFA of Rs. 10,336,955 thousand (March 31, 2018: Rs. 8,773,567 thousand) is not available for distribution to Shareholders. Such amount is classified under Funds for Future appropriations, in the Balance Sheet.

2.3. Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months at March 31, 2019 is Rs. 29,917 thousand (March 31, 2018: Rs. 16,769 thousand).

2.4. Reconciliation of unclaimed amounts of policyholders

Pursuant to IRDAI circular No. IRDA/F&A/CIR/CLD/114/05/2015 dated May 28, 2015 and IRDA/F&A/CIR/CPM/134/07/2015 dated July 24, 2015 on âHandling of unclaimed amounts pertaining to policyholdersâ, the Company has created a single segregated fund to manage all the unclaimed monies. The amount in such unclaimed fund has been invested in money market instruments and /or fixed deposit of scheduled banks with effect from April 01, 2016.

The amount in the unclaimed fund has been disclosed in schedule 12 as âAssets held for unclaimed amount of policyholdersâ. Investment income accruing to such unclaimed fund has been credited to the fund and disclosed as âOther Incomeâ under linked life segment in the Revenue Account. Such investment income net of fund management charges (âFMCâ) is paid/ accrued as âinterest on unclaimed amountsâ in schedule 4 âBenefits paidâ.

Reconciliation of unclaimed amounts of policyholders:

In accordance with master circular IRDA/F&I/CIR/CLD/173/07/2017 issued by the IRDAI on May 28, 2015, the details of unclaimed amounts and investment income at March 31, 2019 is tabulated as below:

2.5. Age wise analysis of unclaimed amount of policyholders

In accordance with circular IRDA/F&A/Misc/ 173/07/2017 issued by the IRDAI on July 25, 2017, the age wise analysis of unclaimed amount of the policyholders is tabulated as below:

The above unclaimed amount of policyholders does not include Rs. 245 Lacs having ageing beyond 120 months, which shall be transferred to Senior Citizensâ Welfare Fund (SCWF) on or before March 01, 2020 in accordance with IRDAI Master circular No. IRDA/F&A/CIR/Misc/173/07/2017 on âUnclaimed Amount of Policyholdersâ dated July 25, 2017 read with rule 3 (6) of Senior Citizensâ Welfare Fund Rules, 2016. For the previous year ended March 31, 2018 the above unclaimed amount of policyholders does not include Rs. 229 Lacs having ageing beyond 120 months paid on February 28, 2019.

2.6. Direct taxes

The current tax provision is determined in accordance with the provisions of Income Tax Act,1961. The provision for current tax for the year ended March 31, 2019 is Rs. 1,355,010 thousand (year ended March 31, 2018: Rs. 2,198,077 thousand).

The provision for current tax includes an amount of Rs. 1,131,829 thousand for the year ended March 31, 2019 (year ended March 31, 2018: Rs. 1,200,710 thousand) which has been charged on the total surplus of the participating line of business in Revenue Account, in line with the Companyâs accounting policy. Further, tax expense amounting to Rs. 223,181 thousand for the year ended March 31, 2019 (year ended March 31, 2018: Rs. 997,367 thousand) pertaining to other than participating line of business has been charged to Profit and loss account.

Deferred tax asset is recognised on the linked funds for future appropriation to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised. The deferred tax position and the movement for the year ended March 31, 2019 is summarised below:

2.7. Operating lease commitments

The Company takes premises, motor vehicles, office equipmentâs, computers, servers and modular furniture on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating lease arrangements are charged to the Revenue account and the Profit and Loss account over the lease term on a straight line basis. The total operating lease rentals charged for the year ended March 31, 2019 is Rs. 542,414 thousand (year ended March 31, 2018: Rs. 526,130 thousand).

Lease rentals pertaining to non-cancellable leases charged to the Revenue account and the Profit and Loss account for the year ended March 31, 2019 is Rs. 31,540 thousand (year ended March 31, 2018: Rs. 32,297 thousand). The future minimum lease payments in respect of these non-cancellable leases at the Balance Sheet date are summarised below:

2.8. Assets given on operating lease

The Company has entered into an agreement in the nature of leave and license for leasing out the investment property. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such lease recognised in Revenue account and Profit and Loss account for the year ended March 31, 2019 is Rs. 167,973 thousand (year ended March 31, 2018: Rs. 179,305 thousand).

2.9 Fund Balance Sheet at March 31, 2019

Fund Balance Sheet for each segregated linked fund is annexed herewith - Refer Annexure 1.

2.10. Fund Revenue Account for the year ended March 31, 2019

Fund Revenue Account for each segregated linked fund is annexed herewith - Refer Annexure 2.

2.11. Annexure to the Revenue account and Additional uLIP Disclosures

Additional disclosure in respect of Unit linked portfolio as prescribed by IRDAI vide circulars 054/IRDA/F&A/FEB-07 dated February 20, 2007 and IRDA/ F&A/001/APR-07 dated April 16, 2007 - Refer Annexure 3.

2.12. Employee benefits

Provision for staff benefits as per AS 15 (Revised):

(a) Defined contribution plans

The following has been recognised as an expense during the year under defined contribution plans:

(ii) Provident fund

Provident fund benefits are aimed at providing security to staff members and their dependents on retirement, disability or death. Both employee and the company contribute an equal percentage of the basic salary, a part of which is towards government administered pension fund and balance portion is contributed to the fund administered by trustees. The provident fund is managed by ICICI Prudential Life Insurance Company Employeesâ Provident Fund Trust.

The minimum rate at which the annual interest is payable by the trust to members is prescribed by the government. The Company has an obligation to make good the shortfall, if any, between the government prescribed rate and actual return earned by the provident fund.

(c) Other long term benefits

(i) Long term incentive scheme:

The amount recognised as an expense during the year ended March 31, 2019 is Rs. 148,796 thousand (year ended March 31, 2018: Rs. 143,577 thousand)

Liability for the scheme is determined based on actuarial valuation which has been carried out using the projected accrued benefit method which is same as the projected unit credit method in respect of past service. The assumptions used for valuation are:

(ii) Compensated absence:

The amount recognised as an expense during the year ended March 31, 2019 is Rs. 96,014 thousand (year ended March 31, 2018: Rs. 80,893 thousand).

Liability for compensated absence for employees is determined based on actuarial valuation which has been carried out using the projected accrued benefit method which is same as the projected unit credit method in respect of past service. The assumptions used for valuation are:

2.13. Employee Stock Option Scheme (âESOSâ)

The Company Employees Stock Option Scheme (2005) (âESOS 2005â) has six tranches namely Founder, 2004-05, 2005-06, 2006-07, Founder II and 2007-08. ESOS 2005 permits the grant of share options up to 3% of the issued capital of Company. The Board of Directors have approved the amendment of ESOS 2005 (ESOS 2005 (Revised)). As per the ESOS 2005 (Revised), the aggregate number of shares issued or issuable since March 31, 2016 pursuant to the exercise of any options granted to the eligible employees issued pursuant to the scheme or any other stock option scheme of the Company, shall not exceed a figure equal to 2.64% of the number of shares issued as on March 31, 2016. The maximum number of options that can be granted to any eligible employee is restricted to 0.1% of the issued shares of the Company at the time of grant of options. The exercise price shall be determined by the Board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the options are granted and shall be reflected in the award confirmation. These changes (ESOS 2005 (Revised)) were approved by the shareholders of the Company in the Annual General Meeting held on July 17, 2017. Further the company granted options in four more tranches FY2018 and FY2019 under ESOS 2005 (Revised), namely 2017-18, 2018-19, 2018-19 Special Options, 2018-19 Joining Options.

The Company follows intrinsic value method and hence there was no charge in the Revenue Account and Profit and Loss account on account of new grants during the year.

Exercise price of all the options outstanding for all years for 2006-07 scheme, Founder II, 2007-08, 2017-18, 2018-19, 2018-19 Special Options and 201819 Joining Options scheme is Rs. 130, Rs. 130, Rs. 400 ,Rs. 468.6, Rs. 388.4, Rs. 388.4 and Rs. 351.65 respectively.

A summary of status of Companyâs Employee Stock Option Scheme in terms of options granted, forfeited and exercised is given below:

Out of the total outstanding ESOS of the previous year, 188,220 options are vested during the year ended March 31, 2019 and Rs. 47,039 thousand was realised by exercise of options during the year ended March 31, 2019. During the year ended March 31, 2019 the Company has recognised a compensation cost of Rs. nil (year ended March 31, 2018: Rs. nil) as the intrinsic value of the options.

Had the company followed fair value method based on binomial tree model valuing its options compensation cost for the year ended would have been higher by Rs. 316,760 thousand (March 31, 2018: Rs. 39,667 thousand) and the proforma profit after tax would have been Rs. 11,089,702 thousand (March 31, 2018: Rs. 16,158,590 thousand). On a proforma basis, the companyâs basic and diluted earnings per share would have been Rs. 7.72 (March 31, 2018: Rs. 11.26) and Rs. 7.72 (March 31, 2018: Rs. 11.25) respectively.

ICICI Bank Limited (âHolding companyâ) has granted their options to certain employees of the Company. Holding company follows an intrinsic value method and has recognised a cost of Rs. nil for the year ended March 31, 2019, for the options granted to employees of the Company (year ended March 31, 2018: Rs. nil).

2.14. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange fluctuation loss debited to Revenue account for the year ended March 31, 2019 is Rs. 2,157 thousand (year ended March 31, 2018: Rs. 1,367 thousand).

(refer note 2.17 of schedule 16 for accounting policy on foreign exchange transactions)

2.15. Managerial Remuneration

IRDAI has issued guidelines on August 05, 2016 on remuneration of NonExecutive Directors and Managing Director (âMDâ) /Chief Executive Officer (âCEOâ) /Whole Time Directors (âWTDâ), which have prescribed certain qualitative and quantitative disclosures. The disclosures for year ended March 31, 2019 are given below:

Remuneration to MD/CEO/WD:

Qualitative disclosures:

A) Information relating to the bodies that oversee remuneration. Name, composition and mandate of the main body overseeing remuneration:

The Board Nomination and Remuneration Committee (BNRC /Committee) is the body which oversees the remuneration aspects. The functions of the Committee include recommending appointments of Directors to the Board, identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down and recommending to the Board their appointment and removal, formulate a criteria for the evaluation of the performance of the wholetime/independent directors and the Board and to extend or continue the term of appointment of Independent Director on the basis of the report of performance evaluation of independent Directors, recommending to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel and other employees, recommending to the Board the remuneration (including performance bonus and perquisites) to wholetime Directors (WTDs), commission and fee payable to nonexecutive Directors subject to applicable regulations, approving the policy for and quantum of bonus payable to the members of the staff including senior management and key managerial personnel, formulating the criteria for determining qualifications, positive attributes and independence of a Director, framing policy on Board diversity, framing guidelines for the Employees Stock Option Scheme (ESOS) and decide on the grant of the Companyâs stock options to employees and WTDs of the Company.

External consultants whose advice has been sought, the body by which they were commissioned and in what areas of the remuneration process:

The Company did not take advice from an external consultant on any area of remuneration during the year ended March 31, 2019.

Scope of the Companyâs remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches:

The Compensation Policy of the Company as last amended and approved by the BNRC and the Board at its Meeting held on April 25, 2017, which covers all employees of the Company.

Type of employees covered and number of such employees:

All employees of the Company are governed by the compensation policy. The total number of permanent employees governed by the compensation policy of the Company at March 31, 2019 was 14,099.

B) Information relating to the design and structure of remuneration process.

Key features and objectives of remuneration policy:

The Company has under the guidance of the Board and the BNRC, followed compensation practices intended to drive meritocracy within the framework of prudent risk management. This approach has been incorporated in the Compensation Policy, the key elements of which are given below:

Effective governance of compensation:

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

Alignment of compensation philosophy with prudent risk taking:

The Company seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels. Compensation is sought to be aligned to both financial and non-financial indicators of performance including aspects like risk management and customer service. In addition, the Company has an employee stock option scheme aimed at aligning compensation to long term performance through stock option grants that vest over a period of time.

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

The Compensation & Benefits Policy on remuneration of Non-executive Directors and Managing Director/Chief Executive Officer/Whole Time Directors of Insurers was reviewed, amended and approved by the Board of Directors held April 25, 2017. No amendment was made to this policy during FY2019.

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

To ensure effective alignment of compensation with prudent risk taking, the Company shall take into account adherence to the risk framework to ensure remuneration is adjusted for all types of risks in conjunction with other pre-defined performance objectives. Remuneration payout shall be sensitive to the time horizon of the risks involved and symmetric to risk outcomes.

- Compensation is aligned to both financial and non-financial indicators of performance including controls like risk management, process perspective, customer perspective and others.

- Prudent behavior is assessed through a Good Order Index for senior management level employees.

- These business objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, and process/quality and compliance objectives.

- Acts of gross negligence and integrity breach are covered under the purview of the compensation policy.

- The deferred part of the variable pay (performance bonus) will be subject to malus, under which, the Company will prevent vesting of all or part of the variable pay in the event of an enquiry determining gross negligence or integrity breach.

- The quantum of bonus does not exceed a certain percentage (as stipulated in Compensation policy) of total fixed pay in a year, for Whole time Directors if the quantum of bonus exceeds a pre-defined threshold percentage of the total fixed pay, a part of the bonus is deferred and paid over a period.

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

The Company follows a philosophy of meritocracy, which is the relative differentiation of employees based on performance delivered. The design of the variable pay is linked to the individual employeeâs performance rating which is arrived at basis assessment of performance delivered against a set of predefined performance objectives. These objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, and process/quality and compliance objectives. To ensure effective alignment of compensation with prudent risk parameters, the Company will take into account various risk parameters along with other pre-defined performance objectives of the Company. Prudent behavior is assessed through a Good Order Index for middle and senior management level employees.

Perquisites (evaluated as per Income-Tax rules wherever applicable and otherwise at actual cost to the Company) such as the benefit of the gas, electricity, furnishing, club fees, group insurance, use of car and telephone at residence or reimbursement of expenses in lieu thereof, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity, exercise of stock options were provided in accordance with the scheme(s) and rule(s) applicable from time to time.

2.16. Commitments

Commitments made and outstanding (net of advances) for Companyâs investment in Real estate (Investment property) is Rs. nil (March 31, 2018 Rs. nil). Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is Rs. 150,970 thousand (March 31, 2018: Rs. 346,179 thousand)

There are no loan commitments made by the Company (March 31, 2018 Rs. nil).

2.17. Investments

a. The investments are made from the respective funds of the Policyholdersâ or Shareholdersâ and investment income thereon has been accounted accordingly.

b. All investments are performing investments.

2.18. valuation of Investment property

In accordance with the IRDAI Regulations, 2002 (Preparation of Financial Statements and Auditorsâ Report of Insurance Companies), the Companyâs investment property has been revalued. The Company has revalued all its investment properties held for more than one year and market value for such properties is based on valuation performed by an independent valuer at March 31, 2019. The opinion on market value by the independent valuer, is prepared in accordance with the âThe RICS Valuation Standardsâ published by the Royal Institution of Chartered Surveyors (âRICSâ), subject to variation to meet local established law, custom, practice and market conditions. The methods used in valuation of property includes âDirect comparable approachâ. The real estate investment property is accordingly valued at Rs. 4,717,875 thousand at March 31, 2019 (March 31, 2018: Rs. 4,666,000 thousand). The historical cost of the property is Rs. 3,836,532 thousand (March 31, 2018: Rs. 3,836,532 thousand).

2.19. Impairment of investment assets

In accordance with the impairment policy of the Company, diminution in the value of investments has been recognised under the head âProvision for diminution in the value of investments (Net)â in the Revenue account and the Profit & Loss account. The total impairment loss recognised for the year ended March 31, 2019 is Rs. nil (year ended March 31, 2018: Rs. 50,872 thousand).

2.20. Encumbrances of assets

a. Assets deposited with National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL)

Fixed deposit of Rs. 1,000,000 thousand (March 31, 2018: Rs. 1,000,000 thousand) and Rs. 100,100 thousand (March 31, 2018: Rs. 100,000 thousand) has been deposited with NSCCL and ICCL respectively towards margin requirement for equity trade settlement.

Terms of pledge: Physical custody of the fixed deposits are with respective clearing houses, however the income accrued on these deposits shall be passed on to the Company on the maturity of the deposits. These deposits can be invoked by the clearing houses in case of any default by the Company in settlement of equity transactions.

Terms of pledge: Physical custody of the securities is maintained with the CCIL, however interest accrued on these securities is received by the Company. The Company is not entitled to any interest income on the money deposited with the CCIL towards margin requirements. These deposits, both securities and cash, can be invoked by CCIL in case of any default by the Company in settlement of trades in securities and TREPS & CBLO segment.

c. Other encumbrances

The Company has placed fixed deposits with banks for issuing bank guarantee/ based on the directive from the Court as follows:

2.21. Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside India at March 31, 2019 (March 31, 2018: Rs. nil) except the assets disclosed in the note 3.26.

2.22. Securities Lending and Borrowing Scheme (SLB)

Equity shares transferred under SLB continue to be recognised on the Balance Sheet as the Company retains all the associated risks and rewards of these securities.

The value of equity shares lent by the Company under SLB and outstanding at March 31, 2019 is Rs. 1,485,599 thousand (March 31, 2018: Rs. 1,044,030 thousand).

2.23. Disclosure on fines and penalties

The additional disclosures with respect to fines and penalties for penal actions pursuant to the IRDAI circular no. IRDA/F&A/CIR/232/12/2013 dated December 11, 2013 paid during the year ended March 31, 2019 have been detailed below:

2.24. Discontinued Policy fund

Pursuant to the IRDAI circular number IRDA/Reg/2/52/2010 dated July 1, 2010, the following details are disclosed with respect to policies discontinued either on customer request or for non-payment of premium amount within the grace period

a) Movement in funds for discontinued policies:

b) Number of policies discontinued during the year ended March 31, 2019 is 153,836 (year ended March 31, 2018: 127,524).

c) Percentage of discontinued to total policies (product wise):

2.25. Extra allocation

As per the product filing for Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan, extra allocation of units made and total extra allocation recovered is disclosed as below.

Total extra allocation made with respect to group products (Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan) for the year ended March 31, 2019 is Rs. 1,200 thousand (for year ended March 31, 2018: Rs. nil).

The amount of recovery towards extra allocation for the year ended March 31, 2019 is Rs. 7,089 thousand (year ended March 31, 2018: Rs. 7,733 thousand).

2.26. Dividend

Interim dividend appropriation for the year ended March 31, 2019 is Rs. 2,769,077 thousand (year ended March 31, 2018: Rs. 5,874,239 thousand) including dividend distribution tax of Rs. 472,142 thousand (year ended March 31, 2018: Rs. 993,586 thousand).

The Board of Directors have also proposed a final dividend of Rs. 2,225,466 thousand (year ended March 31, 2018: Rs. 4,737,332 thousand). The dividend distribution tax on the same amounts to Rs. 457,451 thousand (year ended March 31, 2018: Rs. 973,773 thousand)

Unclaimed dividend of Rs. 6,435 thousand at March 31, 2019 (at March 31, 2018: Rs. 4,768 thousand) represents dividend paid but not claimed by shareholders, and are represented by a bank balance of an equivalent amount.

2.27. Pending litigations

The Companyâs pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Tax Authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial results at March 31, 2019. Refer note 3.1 for details on contingent liabilities.

In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of Rs. 339,075 thousand at March 31, 2019 (At March 31, 2018: Rs. 301,244 thousand).

2.28. Long term contracts

For insurance contracts, actuarial valuation of liabilities for policies is done by the Appointed Actuary of the Company. The methods and assumptions used in valuation of liabilities are in accordance with the regulations issued by the Insurance Regulatory and Development Authority of India (âIRDAIâ) and actuarial practice standards and guidance notes issued by the Institute of Actuaries of India.

2.29. Corporate Social Responsibility

The amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ended March 31, 2019 was Rs. 225,283 thousand (year ended March 31, 2018: Rs. 230,288 thousand).

The following table sets forth, for the periods indicated, the amount spent by the Company on CSR related activities:

Amounts of related party transactions with ICICI Foundation for Inclusive Growth pertaining to CSR related activities for year ended March 31, 2019 was Rs. 172,575 thousand (year ended March 31, 2018: Rs. 172,769 thousand).

The following table sets forth, for the periods indicated, the details of movement of amounts yet to be paid for CSR related activities.

Note: CSR expenditure as shown in Schedule 3A also includes amount paid to Kerala relief fund amounting to Rs. 5,503 thousand which is not qualified as CSR u/s 135 of the Companies Act, 2013.

2.30. Loans and advances to subsidiaries, associates and related entities

There are no investments by the loanee in the shares of the Company.

2.31. specified Bank Notes

Being an insurance company, Schedule III of the Companies Act, 2013 is not applicable and hence the disclosure requirements for the details of specified bank notes (SBNs) as envisaged in Notification G.S.R. 308(E) date March 30, 2017 issued by the Ministry of Corporate Affairs (MCA) is not provided.

2.32 Previous year comparatives

Previous yearâs figures have been regrouped and reclassified wherever necessary to conform to current yearâs presentation.

Mar 31, 2018

1. Corporate Information

I CICI Prudential Life Insurance Company Limited (âthe Companyâ) is a joint venture between ICICI Bank Limited and Prudential Corporation Holdings Limited, incorporated on July 20, 2000 as a Company under the Companies Act, 2013 (âthe Actâ). The Company is licensed by the Insurance Regulatory and Development Authority of India (âIRDAIâ) for carrying life insurance business in India. The license is in force as at March 31, 2018.

The Company carries on business of providing life insurance, pensions and health insurance to individuals and groups. Riders providing additional benefits are offered under some of these products. The business is conducted in participating, non-participating, non-participating variable and unit linked lines of businesses. These products are distributed through individual agents, corporate agents, banks, brokers, the Companyâs proprietary sales force and the Company website.

2. Actuarial method and assumptions

The liability for the unexpired portion of the risk for the non-unit liabilities of linked business and attached riders is the greater of liability calculated using discounted cash flows and unearned premium reserves.

An unexpired risk reserve and a reserve in respect of claims incurred but not reported is held for one year renewable group term insurance.

The unit liability in respect of linked business is the value of the units standing to the credit of policyholders, using the Net Asset Value (âNAVâ) prevailing at the valuation date.

A brief of the assumptions used in actuarial valuation is as below:

(a) The interest rates used for valuing the liabilities are in the range of 4.66% to 6.13% per annum. The interest rates used at March 31, 2017 were in the range of 3.49% to 6.20% per annum.

c) Expenses are provided for at least at the current levels in respect of renewal expenses, with no allowance for any future improvement but with an allowance for any expected worsening.

d) Per policy renewal expenses are assumed to inflate at 4.38% per annum. The expense inflation assumption used at March 31, 2017 was 4.55%.

e) No allowance is made for expected lapses in the future.

f) The bonus rates for participating business to be declared in the future is consistent with the valuation assumptions.

g) The tax rate applicable for valuation at March 31, 2018 is 14.56% p.a.

Certain explicit additional provisions are made, which include the following:

a) Reserves for additional expenses that the Company may have to incur if it were to close to new business twelve months after the valuation date.

b) Reserves for guarantees available to individual and group insurance policies.

c) Reserves for cost of non-negative claw back additions.

d) Reserves for free look option given to policyholders calculated using a free look cancellation rate of 2.1%. The free look cancellation assumption used at March 31, 2017 was 2.2%.

e) Reserves for lapsed policies eligible for revivals.

3. Funds for Future Appropriations (âFFAâ)

The balance of unit-linked FFA at March 31, 2018 of Rs.8,036 thousand (March 31, 2017: Rs.8,171 thousand) and participating FFA of Rs.8,773,567 thousand (March 31, 2017: Rs.6,033,687 thousand) is not available for distribution to Shareholders. Such amount is classified under Funds for Future appropriations, in the Balance Sheet.

4. Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months at March 31, 2018 is Rs.16,769 thousand (March 31, 2017: Rs.15,358 thousand).

5. Reconciliation of unclaimed amounts of policyholders

Pursuant to IRDAI circular No. IRDA/F&A/CIR/CLD/114/05/2015 dated May 28, 2015 and IRDA/F&A/CIR/CPM/134/07/2015 dated July 24, 2015 on âHandling of unclaimed amounts pertaining to policyholdersâ, the Company has created a single segregated fund to manage all the unclaimed monies. The amount in such unclaimed fund has been invested in money market instruments and/or fixed deposit of scheduled banks with effect from April 1, 2016.

The amount in the unclaimed fund has been disclosed in schedule 12 as âAssets held for unclaimed amount of policyholdersâ. Investment income accruing to such unclaimed fund has been credited to the fund and disclosed as other income under Linked life segment in the Revenue Account. Such investment income net of fund management charges (âFMCâ) is paid/accrued as âinterest on unclaimed amountsâ in schedule 4 âBenefits paidâ.

6. Age wise analysis of unclaimed amount of policyholders

In accordance with circular IRDA/F&I/CIR/CMP/174/11/2010 issued by the IRDAI on November 4, 2010, the age wise analysis of unclaimed amount of the policyholders at March 31, 2018 is tabulated as below:

(a) Claims settled but not paid to the policyholders/insured due to any reasons except under litigation from the insured/policyholders:

7. Direct taxes

The current tax provision is determined in accordance with the provisions of Income Tax Act,1961. The provision for current tax for the year ended March 31, 2018 is Rs.2,198,077 thousand (year ended March 31, 2017: Rs.1,815,915 thousand).

The provision for current tax includes an amount of Rs.1,200,710 thousand for the year ended March 31, 2018 (year ended March 31, 2017: Rs.788,117 thousand) which has been charged on the total surplus of the participating line of business in Revenue Account, in line with the Companyâs accounting policy. Further, tax expense amounting to Rs.997,367 thousand for the year ended March 31, 2018 (year ended March 31, 2017: Rs.1,027,798 thousand) pertaining to other than participating line of business has been charged to Profit and loss account.

8. Operating lease commitments

The Company takes premises, motor vehicles, office equipmentâs, computers, servers and modular furniture on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating lease arrangements are charged to the Revenue Account and the Profit and Loss Account over the lease term on a straight line basis. The total operating lease rentals charged for the year ended March 31, 2018 is Rs.526,130 thousand (year ended March 31, 2017: Rs.539,758 thousand).

Lease rentals pertaining to non-cancellable leases charged to the Revenue Account and the Profit and Loss Account for the year ended March 31, 2018 is Rs.32,297 thousand (year ended March 31, 2017: Rs.33,184 thousand). The future minimum lease payments in respect of these non-cancellable leases at the Balance Sheet date are summarised below:

9.Assets given on operating lease

The Company has entered into an agreement in the nature of leave and license for leasing out the investment property. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such lease recognised in Revenue Account and Profit and Loss Account for the year ended March 31, 2018 is Rs.179,305 thousand (year ended March 31, 2017: Rs.66,797 thousand).

10. Fund Balance Sheet at March 31, 2018

Fund Balance Sheet for each segregated linked fund is annexed herewith - Refer Annexure1.

11. Fund Revenue Account for the year ended March 31, 2018

Fund Revenue Account for each segregated linked fund is annexed herewith - Refer Annexure 2.

2. Annexure to the Revenue Account and Additional ULIP Disclosures

13. Employee benefits

Provision for staff benefits as per AS 15 (Revised):

(a) Defined contribution plans Superannuation

The amount recognised as an expense during the year ended March 31, 2018 is Rs.91,661 thousand (year ended March 31, 2017: Rs.51,520 thousand).

National Pension Scheme

The Company has contributed Rs.15,284 thousand for the year ended March 31, 2018 (March 31, 2017: Rs.13,851 thousand) to NPS for employees who had opted for the scheme.

(b) Defined benefit plans

Provident fund

(c) Other long-term benefits Long-term incentive scheme:

The amount recognised as an expense during the year ended March 31, 2018 is Rs.143,577 thousand (year ended March 31, 2017: Rs.133,358 thousand).

Compensated absence:

The amount recognised as an expense during the year ended March 31, 2018 is Rs.80,893 thousand (year ended March 31, 2017: Rs.89,508 thousand).

14 Employee Stock Option Scheme (âESOSâ)

The Company Employees Stock Option Scheme (2005) (âESOS 2005â) has six tranches namely Founder, 2004-05, 2005-06, 2006-07, Founder II and 2007-08. ESOS 2005 permits the grant of share options up to 3% of the issued capital of Company. The Board of Directors have approved the amendment of ESOS 2005 (ESOS 2005 (Revised)). As per the ESOS 2005 (Revised), the aggregate number of Shares issued or issuable since March 31, 2016 pursuant to the exercise of any Options granted to the Eligible Employees issued pursuant to the Scheme or any other stock option scheme of the Company, shall not exceed a figure equal to 2.64% of the number of shares issued as on March 31, 2016. The maximum number of options that can be granted to any eligible employee is restricted to 0.1% of the issued shares of the Company at the time of grant of options. The Exercise Price shall be determined by the Board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the Options are granted and shall be reflected in the award confirmation. These changes (ESOS 2005 (Revised)) were approved by the shareholders of the Company in the Annual General Meeting held on July 17, 2017. Further the Company granted options in FY 2018 under ESOS 2005 (Revised) on July 25, 2017.

The Company follows intrinsic value method and hence there was no charge in the Revenue Account and Profit and Loss Account on account of modification of the Scheme.

Exercise price of all the options outstanding for all years/quarter for Founder scheme, 2004-05 scheme, 2005-06 scheme, 2006-07 scheme, Founder II, 2007-08 & 2017-18 scheme is Rs.30, Rs.42, Rs.70, Rs.130, Rs.130, Rs.400 and Rs.468.6 respectively.

Nil options are vested during the year ended March 31, 2018 and Rs.39,580 thousand was realised by exercise of options during the year ended March 31, 2018 (March 31, 2017: Rs.327,337 thousand). During the year ended March 31, 2018 the Company has recognised a compensation cost of Rs. nil (year ended March 31, 2017: Rs. nil) as the intrinsic value of the options. Had the Company followed fair value method based on binomial tree model valuing its options compensation cost for the year ended would have been higher by Rs.39,667 thousand (March 31, 2017: Rs. nil) and the proforma Profit after tax would have been Rs.16,158,590 thousand (March 31, 2017: Rs.16,822,303 thousand). On a proforma basis, the Companyâs Basic and Diluted Earnings per share would have been Rs.11.26 (March 31, 2017: Rs.11.73) and Rs.11.25 (March 31, 2017: Rs.11.72) respectively.

15. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange loss debited to Revenue Account for the year ended March 31, 2018 is Rs.1,367 thousand (year ended March 31, 2017: Rs.3,221 thousand).

16. Managerial Remuneration

I RDAI has issued guidelines on August 5, 2016 on remuneration of NonExecutive Directors and Managing Director (âMDâ)/Chief Executive Officer (âCEOâ)/Wholetime Directors (âWTDâ), which have prescribed certain qualitative and quantitative disclosures. The disclosures for year ended March 31, 2018 are given below:

Remuneration to MD/ CEO/ WD:

Qualitative disclosures:

A) Information relating to the bodies that oversee remuneration.

Name, composition and mandate of the main body overseeing remuneration:

The Board Nomination and Remuneration Committee (BNRC/Committee) is the body which oversees the remuneration aspects. The functions of the Committee include recommending appointments of Directors to the Board, identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommending to the Board their appointment and removal, formulate a criteria for the evaluation of the performance of the wholetime/independent Directors and the Board and to extend or continue the term of appointment of independent Director on the basis of the report of performance evaluation of independent Directors, recommending to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel and other employees, recommending to the Board the remuneration (including performance bonus and perquisites) to wholetime Directors (WTDs), commission and fee payable to non-executive Directors subject to applicable regulations, approving the policy for and quantum of bonus payable to the members of the staff including senior management and key managerial personnel, formulating the criteria for determining qualifications, positive attributes and independence of a Director, framing policy on Board diversity, framing guidelines for the Employees Stock Option Scheme (ESOS) and decide on the grant of the Companyâs stock options to employees and WTDs of the Company.

External consultants whose advice has been sought, the body by which they were commissioned and in what areas of the remuneration process:

The Company did not take advice from an external consultant on any area of remuneration during the year ended March 31, 2018.

Scope of the Companyâs remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches:

The Compensation Policy of the Company as last amended and approved by the BNRC and the Board at its Meeting held on April 25, 2017, which covers all employees of the Company.

Type of employees covered and number of such employees:

All employees of the Company are governed by the compensation policy. The total number of permanent employees governed by the compensation policy of the Company at March 31, 2018 was 15,780.

B) Information relating to the design and structure of remuneration process.

Key features and objectives of remuneration policy:

Effective governance of compensation:

Alignment of compensation philosophy with prudent risk taking:

The Company seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels. Compensation is sought to be aligned to both financial and non-financial indicators of performance including aspects like risk management and customer service. In addition, the Company has an employee stock option scheme aimed at aligning compensation to long-term performance through stock option grants that vest over a period of time.

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

The Compensation & Benefits Policy on remuneration of Non-executive Directors and Managing Director/ Chief Executive Officer/ Whole-time Directors of Insurers was reviewed, amended and approved by the Board of Directors held April 25, 2017.

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

To ensure effective alignment of compensation with prudent risk taking, the Company shall take into account adherence to the risk framework to ensure remuneration is adjusted for all types of risks in conjunction with other predefined performance objectives. Remuneration payout shall be sensitive to the time horizon of the risks involved and symmetric to risk outcomes.

Compensation is aligned to both financial and non-financial indicators of performance including controls like risk management, process perspective, customer perspective and others.

Prudent behavior is assessed through a Good Order Index for senior management level employees.

These business objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, and process/quality and compliance objectives.

Acts of gross negligence and integrity breach are covered under the purview of the compensation policy.

The deferred part of the variable pay (performance bonus) will be subject to malus, under which, the Company will prevent vesting of all or part of the variable pay in the event of an enquiry determining gross negligence or integrity breach.

The quantum of bonus does not exceed a certain percentage (as stipulated in Compensation policy) of total fixed pay in a year, for Whole-time Directors if the quantum of bonus exceeds a pre-defined threshold percentage of the total fixed pay, a part of the bonus is deferred and paid over a period.

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

Perquisites (evaluated as per Income-Tax rules wherever applicable and otherwise at actual cost to the Company) such as the benefit of the gas, electricity, furnishing, club fees, group insurance, use of car and telephone at residence or reimbursement of expenses in lieu thereof, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity, were provided in accordance with the scheme(s) and rule(s) applicable from time to time.

17. Commitments

Commitments made and outstanding (net of advances) for Companyâs investment in Real estate (Investment property) is Rs. nil (March 31, 2017 Rs. nil).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is Rs.346,179 thousand (March 31, 2017: Rs.112,616 thousand)

There are no loan commitments made by the Company (March 31, 2017 Rs. nil).

18. Investments

(a) The investments are made from the respective funds of the Policyholdersâ or Shareholdersâ and investment income thereon has been accounted accordingly.

(b) All investments are performing investments.

19. Restructured assets

There are no assets including loans subject to re-structuring (March 31, 2017: Rs. nil)

20. Conversion of Investment Property to Fixed Assets

During the year ended March 31, 2018, the Company has converted certain investment properties held in the Participating and Shareholdersâ funds to fixed assets for self-use. These investment properties have been converted to fixed assets based on the approval and stipulations of Insurance Regulatory and Development Authority of India.

Consequently, based on the valuation reports obtained from independent valuers, investment properties held in the Participating fund at a cost of Rs.1,077,435 thousand have been transferred to the Shareholdersâ fund as fixed assets at a fair value of Rs.1,132,099 thousand thereby resulting in a gain of Rs.54,664 thousand in Participating fund. Consequently, the revaluation reserve amounting to Rs.19,549 thousand has been reversed.

The Investment property held in the Shareholdersâ fund amounting to Rs.716,468 thousand has been reclassified from investment property to fixed assets at the cost of Rs.703,632 thousand and the revaluation reserve amounting to Rs.12,836 thousand has been reversed.

The above fixed assets are depreciated as per the accounting policy.

21. Valuation of Investment property

I n accordance with the IRDAI Regulations, 2002 (Preparation of Financial Statements and Auditorsâ Report of Insurance Companies), the Companyâs investment property has been revalued. The Company has revalued all its investment properties held for more than one year and market value for such properties is based on valuation performed by an independent valuer at March 31, 2018. The opinion on market value by the independent valuer, is prepared in accordance with the âThe RICS Valuation Standardsâ published by the Royal Institution of Chartered Surveyors (âRICSâ), subject to variation to meet local established law, custom, practice and market conditions. The methods used in valuation of property includes âDirect comparable approachâ. The real estate investment property is accordingly valued at Rs.4,666,000 thousand at March 31, 2018 (March 31, 2017: Rs.6,338,958 thousand). The historical cost of the property is Rs.3,836,532 thousand (March 31, 2017: Rs.5,617,599 thousand). Refer note 3.24 on conversion of investment property to fixed assets.

22. Impairment of investment assets

I n accordance with the impairment policy of the Company, diminution in the value of investments has been recognised under the head âProvision for diminution in the value of investments (Net)â in the Revenue Account and the Profit and Loss Account. The total impairment loss recognised for the year ended March 31, 2018 is Rs.50,872 thousand (year ended March 31, 2017: Rs.65,125 thousand).

23. Encumbrances of assets

a. Assets deposited with National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL)

Fixed deposit of Rs.1,000,000 thousand (March 31, 2017: Rs.1,000,000 thousand) and Rs.100,000 thousand (March 31, 2017: Rs.100,000 thousand) has been deposited with NSCCL and ICCL respectively towards margin requirement for equity trade settlement.

Terms of pledge: Physical custody of the fixed deposits are with respective clearing houses, however the income accrued on these deposits shall be passed on to the Company on the maturity of the deposits. These deposits can be invoked by the clearing houses in case of any default by the Company in settlement of equity transactions.

b. Assets encumbered with Clearing Corporation of India Limited (CCIL)

Terms of pledge: Physical custody of the securities is maintained with the CCIL, however interest accrued on these securities is received by the Company. The Company is not entitled to any interest income on the money deposited with the CCIL towards margin requirements. These deposits, both securities and cash, can be invoked by CCIL in case of any default by the Company in settlement of trades in Securities and CBLO segment.

c. Other encumbrances

The Company has placed fixed deposits with banks for issuing bank guarantee/based on the directive from the Court as per below details:

24. Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside India at March 31, 2018 (March 31, 2017: â nil) except the assets disclosed in the note 3.27.

25. Securities Lending and Borrowing Scheme (SLB)

Equity shares transferred under SLB continue to be recognised on the Balance Sheet as the Company retains all the associated risks and rewards of these securities.

The value of equity shares lent by the Company under SLB and outstanding at March 31, 2018 is Rs.1,044,030 thousand (March 31, 2017: â nil).

26. The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

There are no payments made to or dues outstanding to Micro, Small and Medium Enterprises beyond the timelines prescribed by the MSMED Act (March 31, 2017: Rs. nil).

27. Additional disclosures on expenses

The additional disclosures on expenses pursuant to the IRDAI Circular 067/IRDA/F&A/CIR/MAR-08 dated March 28, 2008 have been detailed herein below:

8. Disclosure on fines and penalties

9. Discontinued Policy Fund

30. Statement containing names, descriptions, occupations of and directorships held by the persons in charge of management of the business under Section 11 (2) of Insurance Act, 1938 (amended by the Insurance Laws (Amendment) Act, 2015)

Name of person in-charge : Mr. Sandeep Bakhshi

Designation of person in-charge : Managing Director & CEO

Occupation of person in-charge : Service

Directorships held by the person in-charge during the year or at : ICICI Prudential Pension Funds Management Company Limited, Chairman March 31, 2018

2.30. Extra allocation

Total extra allocation made with respect to group products (Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan) for the year ended March 31, 2018 is â nil (for year ended March 31, 2017: Rs.775 thousand).

The amount of recovery towards extra allocation for the year ended March 31, 2018 is Rs.7,733 thousand (year ended March 31, 2017: Rs.7,755 thousand).

2.31.Dividend

Interim dividend appropriation for the year ended March 31, 2018 is Rs.5,874,239 thousand (year ended March 31, 2017: Rs.6,645,630 thousand) including dividend distribution tax of Rs.993,586 thousand (year ended March 31, 2017: Rs.1,124,058 thousand).

The Board of Directors have also proposed a final dividend of Rs.4,737,146 thousand (year ended March 31, 2017: Rs.5,023,715 thousand). The dividend distribution tax on the same amounts to Rs.973,734 thousand (year ended March 31, 2017: Rs.1,022,710 thousand)

Final dividend shown in previous year of Rs.1,142 thousand and dividend distribution tax of Rs.233 thousand on the same pertains to dividend on 543,828 equity shares for year ended March 31, 2016 and allotted between date of Board Meeting i.e. April 26, 2016 and Record Date i.e. June 22, 2016.

Unclaimed dividend of Rs.4,768 thousand at March 31, 2018 (at March 31, 2017: Rs.697 thousand) represents dividend paid but not claimed by shareholders, and are represented by a bank balance of an equivalent amount.

2.32. Pending litigations

The Companyâs pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial results at March 31, 2018. Refer note 3.1 for details on contingent liabilities. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of Rs.301,244 thousand at March 31, 2018 (at March 31, 2017: Rs.169,015 thousand).

2.33. Long term contracts

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts including derivative contracts has been made in the financial statements.

For insurance contracts, actuarial valuation of liabilities for policies is done by the Appointed Actuary of the Company. The methods and assumptions used in valuation of liabilities are in accordance with the regulations issued by the Insurance Regulatory and Development Authority of India (âIRDAIâ) and actuarial practice standards and guidance notes issued by the Institute of Actuaries of India.

2.34. Corporate Social Responsibility

The amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ended March 31, 2018 was Rs.230,288 thousand (year ended March 31, 2017: Rs.217,391 thousand).

The following table sets forth, for the periods indicated, the amount spent by the Company on CSR related activities.

2.35. Loans and advances to subsidiaries, associates and related entities

There are no investments by the loanee in the shares of the Company.

2.36. Specified Bank Notes

Being an insurance company, Schedule III of the Companies Act, 2013 is not applicable and hence the disclosure requirements for the details of Specified Bank Notes (SBNs) as envisaged in Notification G.S.R. 308(E) dated March 30, 2017 issued by the Ministry of Corporate Affairs (MCA) is not provided.

2.37. Previous year comparatives

Previous periodâs figures have been regrouped and reclassified wherever necessary to conform to current periodâs presentation. The details for regrouping are as follows:

Mar 31, 2017

1. Actuarial method and assumptions

An unexpired risk reserve and a reserve in respect of claims incurred but not reported is held for one year renewable group term insurance.

The unit liability in respect of linked business is the value of the units standing to the credit of policyholders, using the Net Asset Value (''NAV'') prevailing at the valuation date.

A brief of the assumptions used in actuarial valuation is as below:

a) The interest rates used for valuing the liabilities are in the range of 3.49% to 6.20% per annum. The interest rates used at March 31, 2016 were in the range of 4.92% to 5.53% per annum.

b) Mortality rates used are based on the published "Indian Assured Lives Mortality (2006 - 2008) Ult." mortality table for assurances and LIC (a) 96-98 table for annuities adjusted to reflect expected experience. Morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates supplied by reinsurers.

c) Expenses are provided for at least at the current levels in respect of renewal expenses, with no allowance for any future improvement but with an allowance for any expected worsening.

d) Per policy renewal expenses are assumed to inflate at 4.55% per annum. The expense inflation assumption used at March 31, 2016 was 5.18%.

e) No allowance is made for expected lapses in the future.

f) The bonus rates for participating business to be declared in the future is consistent with the valuation assumptions.

g) The tax rate applicable for valuation at March 31, 2017 is 14.42% p.a.

Certain explicit additional provisions are made, which include the following:

a) Reserves for additional expenses that the Company may have to incur if it were to close to new business twelve months after the valuation date.

b) Reserves for guarantees available to individual and group insurance policies.

c) Reserves for cost of non-negative claw back additions.

d) Reserves for free look option given to policyholders calculated using a free look cancellation rate of 2.2%. The free look cancellation assumption used at March 31,2016 was 2.80%.

e) Reserves for lapsed policies eligible for revivals.

2. Funds for Future Appropriations (''FFA'')

The balance of unit-linked FFA at March 31, 2017 is Rs, 8,171 thousand (March 31, 2016: Rs, 10,768 thousand), non-unit/ non-participating FFA is Rs, nil (March 31, 2016: Rs, 1,858,866 thousand) and participating FFA is Rs, 6,033,687 thousand (March 31, 2016: Rs, 4,749,499 thousand) is not available for distribution to Shareholders. Such amount is classified under Funds for Future appropriations, in the Balance Sheet.

3. Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months at March 31,2017 isRs, 15,358 thousand (March 31,2016:Rs, 14,135 thousand).

4. Reconciliation of unclaimed amounts of policyholders

The amount in the unclaimed fund has been disclosed in schedule 12 as "Assets held for unclaimed amount of policyholders". Investment income accruing to such unclaimed fund has been credited to the fund and disclosed as other income under Linked life segment in the Revenue Account. Such investment income net of fund management charges (''FMC'') is paid/ accrued as "interest on unclaimed amounts" in schedule 4 "Benefits paid".

Reconciliation of unclaimed amounts of policyholders:

In accordance with circular IRDA/F&I/CIR/CLD/114/05/2015 issued by the IRDAI on May 28, 2015, the details of unclaimed amounts and investment income at March 31, 2017 is tabulated as below:

The cheques issued but not encashed by policyholder/insured category include Rs, 5,506,357 thousand pertaining to cheques which are within the validity period but not yet encashed by the policyholders at March 31, 2017 (March 31, 2016: Rs, 3,066,892 thousand). This amount forms part of bank reconciliation and consequently not considered in unclaimed amount of policyholders as disclosed under Schedule 13 - Current liabilities.

The current tax provision is determined in accordance with the provisions of the Income Tax Act, 1961. The provision for current tax for the year ended March 31, 2017 is Rs, 1,815,915 thousand (year ended March 31, 2016: Rs, 1,913,926).

The provision for current tax includes an amount of Rs, 788,117 thousand for the year ended March 31, 2017 (year ended March 31, 2016: Rs, 702,871 thousand) which has been charged on the total surplus of the participating line of business in Revenue Account, in line with the Companyâs accounting policy. Further, tax expense amounting to Rs, 1,027,798 thousand for the year ended March 31, 2017 (year ended March 31, 2016: T 1,211,055 thousand) pertaining to other than participating line of business has been charged to Profit & loss account.

Deferred tax charge for the year ended March 2017 is Rs, 233 thousand (year ended March 31, 2016: Rs, 636 thousand).

5. Operating lease commitments

The Company takes premises, motor vehicles, office equipmentâs, computers, servers and modular furniture on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating lease arrangements are charged to the Revenue account and the Profit and Loss account over the lease term on a straight line basis. The total operating lease rentals charged for the year ended March 31, 2017 is Rs, 539,758 thousand (year ended March 31, 2016: Rs, 685,977 thousand).

6. Assets given on operating lease

The Company has entered into an agreement in the nature of leave and license for leasing out the investment property. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such lease recognized in Revenue account and Profit and Loss account for the year ended March 31, 2017 is Rs, 66,797 thousand (year ended March 31, 2016: Rs, 52,909 thousand).

7 Details of related parties and transactions with related parties

Related parties and nature of relationship:

Nature of relationship Name of the related party Holding company ICICI Bank Limited

Substantial interest Prudential Corporation Holdings Limited

Subsidiary ICICI Prudential Pension Funds Management Company Limited

Fellow subsidiaries ICICI Securities Limited

and entities jointly _|c|c|

Securities Inc.

controlled by holding

company Securities Holding Inc.

ICICI Venture Funds Management Company Limited

ICICI Home Finance Company Limited

ICICI Trusteeship Services Limited

ICICI Securities Primary Dealership Limited

ICICI Investment Management Company Limited

ICICI International Limited

ICICI BankUKPLC.

ICICI Bank Canada

ICICI Lombard General Insurance Company Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Trust Limited

Consolidated under AS- ICICI Strategic Investments Fund 21 by holding company

Key management Sandeep Bakhshi, Managing Director and CEO

personnel as per AS-18 _{Puneet Nan(Ja}_ _{Executive Director} disclosure

Sandeep Batra, Executive Director Judhajit Das, Chief - Human Resources Asha Murali, Appointed Actuary

8. Fund Balance Sheet at March 31, 2017

Fund Balance Sheet for each segregated linked fund is annexed herewith - Refer Annexure 1

9. Fund Revenue Account for the year ended March 31, 2017

Fund Revenue Account for each segregated linked fund is annexed herewith - Refer Annexure 2

10. Annexure to the Revenue account and Additional ULIP Disclosures

11. Employee benefits

Provision for staff benefits as per AS 15 (Revised):

(a) Defined contribution plans

The amount recognized as an expense during the year ended March 31, 2017 is Rs, 51,520 thousand (year ended March 31, 2016: Rs, 43,188 thousand).

*Salary escalation rate considered in valuation take into account impact of inflation, seniority, promotion and other factors impacting future salary cost.

Estimated rate of return on plan assets is based on the expected average long-term rate of return on investments of the Fund during the estimated term of the obligations.

Provident fund

The Company Employees Stock Option Scheme (2005) ("ESOS 2005") has six tranches namely Founder, 2004-05, 2005-06, 2006-07, Founder II and 2007-OS. ESOS 2005 permits the grant of share options up to 3% of the issued capital of Company. The Board of Directors have approved the amendment of ESOS 2005 (ESOS 2005 (Revised)). As per the ESOS 2005 (Revised), the aggregate number of Shares issued or issuable since March 31, 2016 pursuant to the exercise of any Options granted to the Eligible Employees issued pursuant to the Scheme or any other stock option scheme of the Company, shall not exceed a figure equal to 2.64% of the number of shares issued as on March 31, 2016. The maximum number of options that can be granted to any eligible employee is restricted to 0.1% of the issued capital. The Exercise Price shall be determined by the Board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the Options are granted and shall be reflected in the award confirmation. These changes (ESOS 2005 (Revised)) is subject to approval of the shareholders of the Company and no fresh grant will be made under the ESOS 2005 until such approval by shareholders

The Company follows intrinsic value method and hence there was no charge in the Revenue Account and Profit and Loss account on account of modification of the Scheme.

Exercise price of all the options outstanding for all years/quarter for Founder (2003-04) scheme, 2004-2005 scheme, 2005-06 scheme, 2006-07 scheme, Founder II and 2007-08 scheme is Rs, 30, Rs, 42, Rs, 70, Rs, 130, Rs, 130 and Rs, 400 respectively.

Nil options are vested during the year ended March 31, 2017 and Rs, 327,337,140 was realized by exercise of options during the year ended March 31,

2017. During the year ended March 31, 2017 the Company has recognized a compensation cost ofRs, nil (year ended March 31, 2016: Rs, nil) as the intrinsic value of the options. Had the company followed fair value method for valuing its options, no additional cost would have been charged in Revenue and Profit and Loss account and hence no change in Profit after tax, Basic EPS and Diluted EPS for year ended March 31, 2017 and year ended March 31, 2016. The weighted average price of options exercised during the year ended March 31, 2017 is Rs, 108.3 (year ended March 31, 2016: Rs, 108.4).

ICICI Bank Limited ("FHolding company") has granted options to certain employees of the Company. Holding company follows an intrinsic value method and has recognized a cost ofRs, nil for the year ended March 31, 2017, for the options granted to employees of the Company (year ended March 31, 2016: Rs, nil).

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognized as income or expense, as the case may be. The net foreign exchange loss debited to Revenue account for the year ended March 31, 2017 is Rs, 3,221 thousand (year ended March 31, 2016: loss Rs, 1,445 thousand)

12. Managerial remuneration

IRDAI has issued guidelines on August 05, 2016 on remuneration of Non-Executive Directors and Managing Director (''MD'') /Chief Executive Officer (âCEOâ) /Whole Time Directors (âWTDâ), which have prescribed certain qualitative and quantitative disclosures. The disclosures for year ended March 31, 2017 are given below:

Remuneration to MD/CEO/WD:

Qualitative disclosures:

A) Information relating to the bodies that oversee remuneration. Name, composition and mandate of the main body overseeing remuneration:

The Board Nomination and Remuneration Committee (BNRC/Committee) is the body which oversees the remuneration aspects. The functions of the Committee include recommending appointments of Directors to the Board, identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and removal, formulate a criteria for the evaluation of the performance of the whole time/independent Directors and the Board and to extend or continue the term of appointment of independent Director on the basis of the report of performance evaluation of independent Directors, recommending to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel and other employees, recommending to the Board the remuneration (including performance bonus and perquisites) to whole time Directors (WTDs), commission and fee payable to non-executive Directors subject to applicable regulations, approving the policy for and quantum of bonus payable to the members of the staff including senior management and key managerial personnel, formulating the criteria for determining qualifications, positive attributes and independence of a Director, framing policy on Board diversity, framing guidelines for the Employees Stock Option Scheme (ESOS) and decide on the grant of the Companyâs stock options to employees and WTDs of the Company.

External consultants whose advice has been sought, the body by which they were commissioned and in what areas of the remuneration process:

The Company did not take advice from an external consultant on any area of remuneration during the year ended March 31, 2017.

Scope of the Company''s remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches:

The Compensation Policy of the Company as last amended and approved by the BNRC and the Board at its Meeting held on October 21,2016 covers all employees of the Company.

Type of employees covered and number of such employees:

All employees of the Company are governed by the compensation policy. The total number of permanent employees governed by the compensation policy of the Company at March 31, 2017 was 12,397.

B) Information relating to the design and structure of remuneration process.

Key features and objectives of remuneration policy:

Effective governance of compensation:

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

Alignment of compensation philosophy with prudent risk taking:

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

Pursuant to IRDAI guidelines on Remuneration of Non-executive Directors and Managing Director/Chief Executive Officer/Whole-time Directors of Insurers (IRDAI Guidelines) issued vide reference no. IRDA/F&A/GDL/ LSTD/155/08/2016 dated August 5, 2016 and in line with ICICI Group norms the Compensation & Benefits Policy was reviewed and amended by the BNRC and the Board at its meeting held on October 25, 2016. The Compensation & Benefits Policy was further reviewed and amended by the BNRC on October 21, 2016.

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

- Compensation is aligned to both financial and non-financial indicators of performance including controls like risk management, process perspective, customer perspective and others.

- Prudent behavior is assessed through a Good Order Index for middle and senior management level employees.

- These business objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, and process/quality and compliance objectives.

- Acts of gross negligence and integrity breach shall be covered under the purview of the compensation policy. The deferred part of the variable pay (performance bonus) will be subject to mauls, under which, the Company will prevent vesting of all or part of the variable pay in the event of an enquiry determining gross negligence or integrity breach.

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

The Company follows a philosophy of meritocracy, which is the relative differentiation of employees based on performance delivered. The design of the variable pay is linked to the individual employeeâs performance rating which is arrived at basis assessment of performance delivered against a set of pre-defined performance objectives. These objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, and process/quality and compliance objectives. To ensure effective alignment of compensation with prudent risk parameters, the Company will take into account various risk parameters along with other pre-defined performance objectives of the Company.

Prudent behavior is assessed through a Good Order Index for middle and senior management level employees.

1. Allowances include NPS, Superannuation, Leave encashment and Medical as per policy. For Sandeep Bakhshi, allowances also includes Interest subsidy.

2. The stock options mentioned in the above table were granted by ICICI Bank Ltd. in FY 2016 and FY2017 respectively. The table excludes special grant of stock options granted in FY2016 approved by IRDAI on June 3, 2016 aggregating to 1,000,000 for Sandeep Bakhshi, 4,35,000 for Puneet Nanda and 3,67,500 for Sandeep Batra. (as they are on conditional vesting)

Perquisites (evaluated as per Income-Tax rules wherever applicable and otherwise at actual cost to the Company) such as the benefit of the gas, electricity, furnishing, club fees, group insurance, use of car and telephone at residence or reimbursement of expenses in lieu thereof, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity, were provided in accordance with the scheme(s) and rule(s) applicable from time to time.

¹ Cash Amounts mentioned in above table are outstanding deferred bonus and LTRS of previous year/s and is paid post March 31, 2016 & March 31,2017 respectively. March 31, 2017 figure does not include the bonus payable for FY2017 which will be paid in April 30, 2017.

² Options mentioned in above table are outstanding vesting as on March 31,2016 & March 31,2017. This excludes special grant of stock options in FY2016 approved by IRDAI on June 3, 2016 aggregating to 1,000,000 for Sandeep Bakhshi, 4,35,000 for Puneet Nanda and 3,67,500 for Sandeep Batra

Payment of compensation in the form of profit related commission to the non-executive directors.

The Board at its Meeting held in October 2016, subject to the approval of shareholders and such other regulatory approvals as may be applicable and subject to the availability of net profits at the end of each financial year, approved the payment of profit related commission of Rs, 7.5 lakhs to be paid, to each non-executive Director (excluding nominee directors), for a year or part thereof based on their term in the Company, beginning financial year ended March 31, 2017. The Company will seek the approval for payment, from its shareholders at the forthcoming Annual General Meeting.

13. Commitments

Commitments made and outstanding (net of advances) for Companyâs investment in Real estate (Investment property) is Rs, nil (March 31, 2016 Rs, 487,113 thousand).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is Rs, 112,616 thousand (March 31, 2016:Rs, 91,398 thousand)

There are no loan commitments made by the Company (March 31, 2016 Rs, Nil).

14. Investments

a. The investments are made from the respective funds of the Policyholdersâ or Shareholdersâ and investment income thereon has been accounted accordingly.

b. All investments are performing investments.

15. Restructured assets

There are no assets including loans subject to re-structuring (March 31, 2016: ^ nil)

16. Valuation of Investment property

In accordance with the IRDA Regulations, 2002 (Preparation of Financial Statements and Auditorsâ Report of Insurance Companies), the Companyâs investment property has been revalued. The Company has revalued all its investment properties held for more than one year and market value for such properties is based on valuation performed by an independent valuer at March 31,2017. The opinion on market value by the independent valuer, is prepared in accordance with the "The RICS Valuation Standards" published by the Royal Institution of Chartered Surveyors ("RICS"), subject to variation to meet local established law, custom, practice and market conditions. The methods used in valuation of property includes "Direct comparable approach". The real estate investment property is accordingly valued at Rs, 6,338,958 thousand at March 31, 2017 (March 31, 2016: Rs, 2,553,528 thousand). The historical cost of the property is Rs, 5,617,599 thousand (March 31, 2016: Rs, 1,966,588 thousand).

17. Impairment of investment assets

In accordance with the impairment policy of the Company, diminution in the value of investments has been recognized under the head "Provision for diminution in the value of investments (Net)" in the Revenue account and the Profit and Loss account. The total impairment loss recognized for the year ended March 31, 2017 is Rs, 65,125 thousand (year ended March 31, 2016: T 170,326 thousand).

18. Encumbrances of assets

a. Assets deposited with National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL)

Fixed deposit of Rs, 1,000,000 thousand (March 31, 2016: Rs, 1,050,200 thousand) and Rs, 100,000 thousand (March 31,2016:Rs, 99,000 thousand) has been deposited with NSCCL and ICCL respectively towards margin requirement for equity trade settlement.

19. Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside India at March 31, 2017 (March 31, 2016: Rs, Nil) except the assets disclosed in the note 3.26.

20. Securities Lending and Borrowing Scheme (SLB)

Equity shares transferred under SLB continue to be recognized on the Balance Sheet as the Company retains all the associated risks and rewards of these securities.

The value of equity shares lent by the Company under SLB and outstanding at March 31, 2017 is Rs, Nil (March 31, 2016: Rs, 1,113,943 thousands).

21. Reverse Repo transactions in Government securities/Corporate Debt Securities

Disclosures pursuant to IRDAI notification ref IRDA/F&I/CIR/lNV/250/12/2012 dated December 4, 2012:

There are no investment contracts where sales have been made and payments are overdue at the Balance Sheet date.

22. The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

There are no payments made to or dues outstanding to Micro, Small and Medium Enterprises beyond the timelines prescribed by the MSMED Act (March 31, 2016: Rs, Nil).

23. Extra allocation

Total extra allocation made with respect to group products (Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan) for the year ended March 31, 2017 is Rs, 775 thousand (for year ended March 31, 2016:Rs, 35,397 thousand).

The amount of recovery towards extra allocation for the year ended March 31, 2017 is Rs, 7,755 thousand (year ended March 31, 2016: Rs, 550 thousand).

24. Dividend

Interim dividend appropriation for the year ended March 31, 2017 amounted to Rs, 6,645,630 thousand (year ended March 31, 2016: Rs, 10,858,715 thousand) including dividend distribution tax ofRs, 1,124,058 thousand (year ended March 31, 2016: Rs, 1,836,674 thousand).

The Board of directors have also proposed a final dividend of Rs, 5,023,715 thousand (Previous year Rs, 3,007,883 thousand). Dividend distribution tax on the same amounts to Rs, 1,022,710 thousand (Previous year Rs, 612,334 thousand).

The final dividend amounting to Rs, 1,142 thousand (year ended March 31, 2016: Rs, 17 thousand) and dividend distribution tax of Rs, 233 thousand (year ended March 31, 2016: Rs, 3 thousand) pertains to dividend on 543,828 equity shares for year ended March 31, 2016 and allotted between date of Board Meeting i.e. April 26, 2016 and Record Date i.e. June 22, 2016. The dividend distribution tax for the year ended March 31, 2017 includes a reversal of Rs, Nil due to rounding off of provision for dividend distribution tax for the year ended March 31, 2016 (year ended March 31, 2016: Rs, 70 thousand)

Unclaimed dividend of Rs, 697 thousand at March 31, 2017 (at March 31, 2016: Rs, Nil) represents dividends paid, but not claimed by shareholders, and are represented by a bank balance of an equivalent amount.

* Includes Share application money pending allotment ** Includes provision for diminution in the value of investments

25. Pending litigations

The Companyâs pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial results at March 31, 2017. Refer note 3.1 for details on contingent liabilities. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision ofRs, 169,015 thousand at March 31, 2017 (At March 31, 2016: Rs, 135,466 thousand).

26. Long term contracts

For insurance contracts, actuarial valuation of liabilities for policies in force is done by the Appointed Actuary of the Company. The assumptions used in valuation of liabilities are in accordance with the guidelines and norms issued by the Insurance Regulatory and Development Authority of India ("IRDAI") and the Institute of Actuaries of India in concurrence with the IRDAI.

27. Loans and advances to subsidiaries, associates and related entities

There are no loans and advances given to subsidiaries, associates and firms/companies in which directors are interested expect for advances which are in the normal course of business but not in the nature of loans (year ended March 31, 2016: T nil)

There are no investments by the loanee in the shares of the Company.

28. Specified bank notes

Mar 31, 2016

1. Funds for Future Appropriations (''FFA'')

The balance of unit-linked FFA at March 31, 2016 is '' 10,768 thousand (March 31, 2015: '' 22,666 thousand), non-unit/ no participating FFA is '' 1,858,866 thousand (March 31, 2015: '' 1,715,408 thousand) and participating FFA is '' 4,749,499 thousand (March 31, 2015: '' 3,536,816 thousand) is not available for distribution to Shareholders. Such amount is classified under Funds for Future appropriations, in the Balance Sheet.

2. Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months at March 31, 2016 is '' 14,135 thousand (March 31, 2015: '' 463 thousand).

3. Unclaimed amount of policyholders

a. Claims settled but not paid to the policyholders/insured due to any reasons except under litigation from the insured/policyholders:

c. Any excess collection of the premium/tax or any other charges which is refundable to the policyholders either as terms of conditions of the policy or as per law or as may be directed by the Authority but not refunded so far:

The cheques issued but not encased by policyholder/insured category include Rs, 3,066,892 thousand pertaining to cheques which are within the validity period but not yet encased by the policyholders at March 31, 2016 (March 31, 2015: Rs, 1,378,389 thousand). This amount forms part of bank reconciliation and consequently not considered in unclaimed amount of policyholders as disclosed under Schedule 13 - Current liabilities.

4. Direct taxes

The current tax provision is determined in accordance with the provisions of the Income Tax Act, 1961. The provision for current tax for the year ended March 31, 2016 is Rs, 1,913,926 thousand (year ended March 31, 2015: Rs, nil).

The provision for current tax includes an amount of Rs, 702,871 thousand for the year ended March 31, 2016 (year ended March 31, 2015: Rs, 490,087 thousand) which has been charged on the total surplus of the participating line of business in Revenue Account, in line with the Company''s accounting policy. Further, tax expense amounting to Rs, 1,21 1,055 thousand for the year ended March 31, 2016 (year ended March 31, 2015: credit of Rs, 490,087 thousand) pertaining to other than participating line of business has been charged to Profit & Loss account.

Deferred tax asset is recognised on the linked funds for future appropriation to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. The deferred tax position and the movement for the year ended March 31, 2016 is summarised below:

Deferred tax charge for the year ended March 2016 is Rs, 636 thousand (year ended March 31, 2015: Rs, 13,957 thousand).

5. Operating lease commitments

The Company takes premises, motor vehicles, office equipment''s, computers, servers and modular furniture on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating lease arrangements are charged to the Revenue account and the Profit and Loss account over the lease term on a straight line basis. The total operating lease rentals charged for the year ended March 31, 2016 is Rs, 685,977 thousand (year ended March 31, 2015: Rs, 683,563 thousand).

Lease rentals pertaining to non-cancellable leases charged to the Revenue account and the Profit and Loss account for the year ended March 31, 2016 is Rs, 223,114 thousand (year ended March 31, 2015: Rs, 207,709 thousand). The future minimum lease payments in respect of these non-cancellable leases at the Balance Sheet date are summarised below:

6. Assets given on operating lease

The Company has entered into an agreement in the nature of leave and license for leasing out the investment property. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such lease recognised in Revenue account for the year ended March 31, 2016 is Rs, 52,909 thousand (year ended March 31, 2015: Rs, 52,973 thousand).

7. Details of related parties and transactions with related parties

Related parties and nature of relationship:

Nature of relationship Name of the related party_

Holding company ICICI Bank Limited

Substantial interest Prudential Corporation Holdings Limited

Subsidiary ICICI Prudential Pension Funds Management Company Limited

Fellow subsidiaries ICICI Securities Limited

^{and en}tⁱt^ies ^joint^ly icici Securities Inc.

^{controlled by holding} ICICI Securities Holding Inc. company

ICICI Venture Funds Management Company Limited

ICICI Home Finance Company Limited

ICICI Trusteeship Services Limited

ICICI Securities Primary Dealership Limited

ICICI Investment Management Company Limited

ICICI International Limited

ICICI Bank UK PLC.

ICICI Bank Canada

ICICI Lombard General Insurance Company Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Trust Limited Consolidated under AS- ICICI Strategic Investments Fund 21 ^{by holding company} |-Ven Biotech Limited

Significant influence ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Insurance Scheme ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund ICICI Prudential Life Insurance Company Limited Superannuation Scheme ICICI Prudential Life insurance Advisors Benefit trust Key management Sandeep Bakhshi, Managing Director and CEO ^{personnel a}s ^{per AS-}18 Puneet Nanda, Executive Director ^disclosure Sandeep Batra, Executive Director

Judhajit Das, Chief - Human Resources Satyan Jambunathan, Appointed Actuary

Relatives of key management personnel as per AS-18 disclosure

Nature of Relationship___Name of the Related Party__

Relatives of KMP Mr. Sandeep Bakhshi Mr. Sandeep Batra Mr. Puneet Nanda Mr. Satyan Jambunathan Mr Judhajit Das

Spouse Mona Bakhshi Deepa Batra Deepti Nanda Shanti Satyan Isheeta Ganguly

Swarn Bakhshi Veena Batra Kul Bhushan Nanda P N Jambunathan Shankar Das

Parent

Asha Nanda Girija Jambunathan Mita Das Sameer Bakhshi Vivek Batra Pankaj Nanda Harish Jambunathan Satrajit Das

Brother/Sister

Chitra Venkatraman

Shivam Bakhshi Arushi Batra Rikhil Nanda Surabhi Satyan Adarsh Ganguly Das

Esha Thakurta Pranav Batra Rishita Nanda Akaash Ganguly Das

Children & their Spouse . .

Ritwik Thakurta

Minal Bakhshi

3.16. Employee Stock Option Scheme ("ESOS")

The Company Employees Stock Option Scheme (2005) ("ESOS 2005") presently has six tranches namely Founder I, 2004-05, 2005-06, 2006-07, Founder

II and 2007-08. ESOS 2005 permits the grant of share options up to 3% of the issued capital of Company. The maximum number of options that can be granted to any eligible employee is restricted to 1% of the issued capital. The exercise price was finalised by the Board Compensation and Nominations Committee in concurrence with the Board of Directors of the Company.

The scheme allowed an exercise period of "later of the tenth anniversary of the date of grant of Options or the fifth anniversary of the date of vesting of Options". During the year ended March 31, 2015, in the interest of employees, the Company had extended the exercise period from 10 years to 13 years for the options granted namely Founder I, 2004-05, 2005-06, 2006-07 and Founder II. The Company follows intrinsic value method and hence there was no charge in the Revenue Account and Profit and Loss account on account of modification of the Scheme.

Exercise price of all the options outstanding as at March 31, 2016 for Founder I (2003-04) scheme, 2004-2005 scheme, 2005-06 scheme, 2006-07 scheme, Founder II and 2007-08 scheme is Rs, 30, Rs, 42, Rs, 70, Rs, 130, Rs, 130 and Rs, 400 respectively.

During the year ended March 31, 2016, the Company has recognised a compensation cost of Rs, nil (year ended March 31, 2015: Rs, nil) as the intrinsic value of the options.

For the year ended March 31, 2016 there would have been an additional cost of Rs, nil in the Revenue account and Profit & Loss account had the Company followed the fair value method for valuing its options (year ended March 31, 2015 : Rs, 22,261 thousand). Accordingly, the profit after tax for the year ended March 31, 2015 would have been at Rs, 16,320,654 thousand. Consequently, the CompanyRs,s basic earnings per share would have been at Rs, 11.41 and diluted earnings per share would have been at Rs, 11.39 for the year ended March 31, 2015.

The weighted average price of options exercised during the year ended March 31, 2016 is Rs, 108.4 (year ended March 31, 2015: Rs, 82.1). The weighted average remaining contractual life of options outstanding at the end of the period is as follows:

8. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange loss debited to Revenue account for the year ended March 31, 2016 is Rs, 1,445 thousand (year ended March 31, 2015: loss Rs, 3,330 thousand).

9. Commitments

1Long Term Reward Scheme paid during the year

Expenses towards gratuity and leave encashment provision are determined actuarially for the Company as a whole and accordingly have not been considered in the above information.

Managerial remuneration is in accordance with the requirements of Section 34A of the Insurance Act, 1938 (amended by the Insurance Laws (Amendment) Act, 2015) and as approved by the IRDAI. Managerial remuneration in excess of the limits prescribed by IRDAI has been charged to the Shareholders'' account.

Commitments made and outstanding (net of advances) for Company''s investment in Real estate (Investment property) is Rs, 487,113 thousand (March 31, 2015 Rs, 1,711,497 thousand).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is Rs, 91,398 thousand (March 31, 2015: Rs, 129,602 thousand)

There are no loan commitments made by the Company (March 31, 2015 Rs, nil).

10. Investments

a. The investments are made from the respective funds of the Policyholders'' or Shareholders'' and investment income thereon has been accounted accordingly.

b. All investments are performing investments.

11. Restructured assets

There are no assets including loans subject to re-structuring (March 31, 2015: Rs, Nil).

12. Valuation of Investment property

In accordance with the IRDA Regulations, 2002 (Preparation of Financial Statements and Auditors'' Report of Insurance Companies), the Company''s investment property has been revalued. The Company has revalue all its investment properties held for more than one year and market value for such properties is based on valuation performed by an independent valour at March 31, 2016. The opinion on market value by the independent valuer, is prepared in accordance with the "The RICS Valuation Standards" published by the Royal Institution of Chartered Surveyors ("RICS"), subject to variation to meet local established law, custom, practice and market conditions. The methods used in valuation of property includes "Direct comparable approach". The real estate investment property is accordingly valued at Rs, 2,553,528 thousand at March 31, 2016 (March 31, 2015: Rs, 2,528,667 thousand). The historical cost of the property is Rs, 1,966,588 thousand at March 31, 2016 (March 31, 2015: Rs, 1,966,588 thousand).

13. Impairment of investment assets

In accordance with the impairment policy of the Company, diminution in the value of investments has been recognised under the head "Provision for diminution in the value of investments (Net)" in the Revenue account and the Profit and Loss account. The total impairment loss recognised for the year ended March 31, 2016 is '' 170,326 thousand (year ended March 31, 2015: '' 67,498 thousand).

14. Encumbrances of assets

a. Assets deposited with National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL)

Fixed deposit of Rs, 1,050,000 thousand (March 31, 2015: Rs, 1,050,200 thousand) and Rs, 99,000 thousand (March 31, 2015: Rs, 299,000 thousand) has been deposited with NSCCL and ICCL respectively towards margin requirement for equity trade settlement.

c. Other encumbrances

The Company has placed fixed deposits with banks for issuing bank guarantee/ based on the directive from the Court as per below details:

15. Assets to be deposited under local ^

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside India as at March 31, 2016 H T (March 31, 2015: Rs, nil) except the assets disclosed in the note Â§

16. Securities Lending and Borrowing Scheme ^S

Equity shares transferred under SLB continue to be recognised on the Balance Sheet as the Company retains all the associated risks and rewards of these is

The value of equity shares lent by the Company under SLB and outstanding at March 31, 2016 is Rs, 1,113,943 thousands (March 31, 2015: Rs, 115,122 thousands).H Â£

17. Reverse Repo transactions in Government securities/Corporate Debt Securities

Disclosures pursuant to IRDAI notification ref IRDA/F&I/CIR/INV/250/12/2012 dated December 4, F

There are no investment contracts where sales have been made and payments are overdue at the Balance Sheet date.

18. The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

There are no payments made to or dues outstanding to Micro, Small and Medium Enterprises beyond the timelines prescribed by the MSMED Act (March 31, 2015: Rs, nil).

19. Additional disclosures on expenses

The additional disclosures on expenses pursuant to the IRDAI Circular 067/IRDA/F&A/CIR/MAR-08 dated March 28, 2008 have been detailed herein below:

20. Disclosures on other work given to auditors

There are no services other than audit of financial statements rendered by Statutory auditor that requires disclosure as per clause 7.1 (g) of Corporate Governance Guidelines issued by the IRDAI on August 5, 2009.

21. Discontinued Policy Fund

b) Number of policies discontinued during the year ended March 31, 2016 is 117,080 (year ended March 31, 2015:1 18,902).

3.38. Extra allocation

Total extra allocation made with respect to group products (Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan) for the year ended March 31, 2016 is Rs, 35,397 thousand (for year ended March 31, 2015: Rs, 2,551 thousand).

The amount of recovery towards extra allocation for the year ended March 31, 2016 is Rs, 550 thousand (year ended March 31, 2015: Rs, 39 thousand).

22. Dividend

Interim dividend appropriation for the year ended March 31, 2016 amounted to Rs, 10,858,715 thousand (year ended March 31, 2015: Rs, 6,353,777 thousand) including dividend distribution tax of Rs, 1,836,674 thousand (year ended March 31, 2015: Rs, 992,596 thousand).

The Board of directors have also proposed a final dividend of Rs, 3,007,883 thousand (Previous year Rs, 3,006,835 thousand). Dividend distribution tax on the same amounts to Rs, 612,334 thousand (Previous year Rs, 612,192 thousand).

The Central Government in consultation with National Advisory Committee on Accounting Standards has amended Companies (Accounting Standards) Rules, 2006 (''principal rules''), vide notification issued by Ministry of Corporate Affairs dated March 30, 2016. The Companies (Accounting Standards) Rules, 2016 is effective March 30, 2016. According to the amended rules, the above mentioned proposed dividend will not be recorded as a liability as at March 31, 2016. (Refer Para 8.5 of AS-4 - Contingencies and Events occurring after Balance Sheet date). The Company believes that the Rule 3(2) of the principal rules has not been withdrawn or replaced and accordingly, the Companies (Accounting Standards) Rule, 2016 will apply for the accounting periods commencing on or after March 30, 2016. Therefore the Company has recorded Rs, 3,620,217 thousand as liability for proposed dividends (including dividend distribution tax) as at March 31, 2016.

The final dividend amounting to Rs, 17 thousand and dividend distribution tax of Rs, 3 thousand pertains to dividend for year ended March 31, 2015 on 8,000 equity shares allotted between date of Board Meeting i.e. April 24, 2015 and Record Date i.e. June 23, 2015.

The dividend distribution tax for the year ended March 31, 2016 includes a reversal of Rs, 70 thousand due to rounding off of provision for dividend distribution tax for the year ended March 31, 2015.

23. Summary of Financial Statements

24. Pending litigations

The Company''s pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial results at March 31, 2016. Refer note 3.1 for details on contingent liabilities. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of '' 135,466 thousand at March 31, 2016.

25. Long term contracts

Mar 31, 2015

1. Actuarial method and assumptions

An unexpired risk reserve and a reserve in respect of claims incurred but not reported is held for one year renewable group term insurance.

The unit liability in respect of linked business is the value of the units standing to the credit of policyholders, using the Net Asset Value (''NAV'') prevailing at the valuation date.

A brief of the assumptions used in actuarial valuation is as below:

a) The interest rates used for valuing the liabilities are in the range of 4.47% to 5.39% per annum. The interest rates used at March 31, 2014 were in the range of 4.87% to 5.77% per annum.

c) Expenses are provided for at least at the current levels in respect of renewal expenses, with no allowance for any future improvement but with an allowance for any expected worsening. Per policy renewal expenses are assumed to inflate at 4.49% per annum. The expense inflation assumption used at March 31, 2014 was 4.84%.

d) No allowance is made for expected lapses in the future.

e) The bonus rates for participating business to be declared in the future is consistent with the valuation assumptions.

f) The tax rate applicable for valuation at March 31, 2015 is 14.42% p.a.

Certain explicit additional provisions are made, which include the following:

a. Reserves for additional expenses that the Company may have to incur if it were to close to new business twelve months after the valuation date.

b. Reserves for guarantees available to individual and group insurance policies.

c. Reserves for cost of non-negative claw back additions.

d. Reserves for free look option given to policyholders calculated using a free look cancellation rate of 3.70 %. The free look cancellation assumption used at March 31, 2014 was 3.10%.

e. Reserves for lapsed policies eligible for revivals.

2. Funds for Future Appropriations (''FFA'')

The cumulative balance of linked FFA at March 31, 2015 of Rs, 22,666 thousand (March 31, 2014: Rs, 449,992 thousand) and non-linked FFA at March 31, 2015 of Rs, 5,252,224 thousand (March 31, 2014: Rs, 4,590,399 thousand) is not available for distribution to Shareholders. Such amount is classified under Funds for Future appropriations, in the Balance Sheet.

3. Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months as at March 31, 2015 is Rs, 463 thousand (March 31, 2014: Rs, 114 thousand).

The cheques issued but not encashed by policyholder/insured category include Rs, 1,378,389 thousand pertaining to cheques which are within the validity period but not yet encashed by the policyholders at March 31, 2015 (March 31, 2014: Rs, 2,122,770 thousand). This amount forms part of bank reconciliation and consequently not considered in unclaimed amount of policyholders as disclosed under Schedule 13 - Current liabilities.

4. Direct taxes

Deferred tax asset is recognised on the Company''s eligible tax losses to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. The deferred tax position and the movement for the year ended March 31, 2015 is summarised below :

Deferred tax charge for the year ended March 2015 is Rs, 13,957 thousand (year ended March 31, 2014: Rs, 62,902 thousand).

An amount of Rs, 490,087 thousand for the year ended March 2015 (year ended March 31, 2014: Rs, 384,181thousand) has been charged on the total surplus in the participating line of business in line with the Company''s accounting policy. As the Company has unabsorbed losses as per Income Tax Act, there is no current tax liability. Tax on total surplus of participating line of business has been offset by a corresponding credit in the Profit and Loss account.

5. Operating lease commitments

The Company takes premises, motor vehicles, office equipment''s, computers, servers and modular furniture on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating lease arrangements are charged to the Revenue account and the Profit and Loss account over the lease term on a straight line basis. The total operating lease rentals charged for the year ended March 31, 2015 is Rs, 683,563 thousand (year ended March 31, 2014: Rs, 823,552 thousand).

Lease rentals pertaining to non-cancellable leases charged to the Revenue account and the Profit and Loss account for the year ended March 31, 2015 is Rs, 207,709 thousand (year ended March 31, 2014: Rs, 299,104 thousand). The future minimum lease payments in respect of these non-cancellable leases at the Balance Sheet date are summarised below:

6. Assets given on operating I

The Company has entered into an agreement in the nature of leave and license for leasing out the investment property. This is in H N the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease H A arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such H 5 lease recognised in Revenue account for the year ended March 31, 2015 is Rs, 52,973 thousand (year ended March 31, 2014: H T Rs, 52,973 thousand).^M

7. Details of related parties and transactions with related 5

Related parties and nature of relationship:

Nature of relationship Name of the related party

Holding company ICICI Bank Limited

Substantial interest Prudential Corporation Holdings Limited

Subsidiary ICICI Prudential Pension Funds Management Company Limited

Fellow subsidiaries and entities jointly controlled by holding company ICICI Securities Limited

ICICI Securities Inc.

ICICI Securities Holding Inc.

ICICI Venture Funds Management Company Limited

ICICI Home Finance Company Limited

ICICI Trusteeship Services Limited

ICICI Securities Primary Dealership Limited

ICICI Investment Management Company Limited

ICICI International Limited

ICICI Bank UK PLC.

Nature of relationship Name of the related party

ICICI Bank Canada

ICICI Bank Eurasia Limited Liability Company ICICI Lombard General Insurance Company Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Trust Limited Consolidated under AS-21 by holding company ICICI Equity Fund

ICICI Strategic Investments Fund I-Ven Biotech Limited ICICI Kinfra Limited

Key management personnel as per AS-18 disclosure Sandeep Bakhshi, Managing Director and CEO

Puneet Nanda, Executive Director

Sandeep Batra, Executive Director (effective January 1, 2014)

Judhajit Das, Chief - Human Resources

Satyan Jambunathan, Appointed Actuary (appointed as Appointed Actuary, effective April 22, 2013)

Significant influence ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life

Insurance Scheme

ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund ICICI Prudential Life Insurance Company Limited Superannuation Scheme ICICI Prudential Life insurance Advisors Benefit trust

Provident fund

Provident fund benefits are aimed at providing security to staff members and their dependents on retirement, disability or death. Both employee and the company contribute an equal percentage of the basic salary a part of which goes to the fund, and balance portion is contributed to the government administered pension fund. The provident fund is managed by ICICI Prudential Life Insurance Company Employees'' Provident Fund Trust.

As there is net surplus in the plan, no liability needs to be provided for in the books of accounts of the Company.

The assumptions used in actuarially valuing the defined benefit obligations of interest rate guarantee are as follows:

(c) Other long term benefits

Long term incentive scheme

Compensated absence

While computing liability, 2% leave a ailment has been assumed for each subsequent year following the valuation date.

8. Employee Stock Option Scheme ("ESOS")

The Company Employees Stock Option Scheme (2005) ("ESOS 2005") presently has six tranches namely Founder I, 2004-05, 2005-06, 2006-07, Founder II and 2007-08. ESOS 2005 permits the grant of share options up to 3% of the issued capital of Company. The maximum number of options that can be granted to any eligible employee is restricted to 1% of the issued capital. The exercise price was finalised by the Board Compensation and Nominations Committee in concurrence with the Board of Directors of the Company.

The scheme allowed an exercise period of "later of the tenth anniversary of the date of grant of Options or the fifth anniversary of the date of vesting of Options". During the year, in the interest of employees, the Company has extended the exercise period from 10 years to 13 years for the options granted namely Founder I, 2004-05, 2005-06, 2006-07 and Founder II. The Company follows intrinsic value method and hence there is no charge in the Revenue Account and Profit and Loss account on account of modification of the Scheme.

Exercise price of all the options outstanding as at March 31, 2015 for Founder I (2003-04) scheme, 2004-2005 scheme, 2005-06 scheme, 2006 07 scheme, Founder II and 2007-08 scheme is Rs, 30, Rs, 42, Rs, 70, Rs, 130, Rs, 130 and Rs, 400 respectively.

During the year ended March 31, 2015, the Company has recognised a compensation cost of Rs, Nil (year ended March 31, 2014: Rs, Nil) as the intrinsic value of the options.

For the year ended March 31, 2015 there would have been an additional cost of Rs, 22,261 thousand in the Revenue account and Profit & Loss account had the Company followed the fair value method for valuing its options (Previous year : Rs, Nil). Accordingly, the profit after tax for the year ended March 31, 2015 would have been at Rs, 16,320,654 thousand. Consequently, the CompanyRs,s basic earnings per share would have been at Rs, 11.41 and diluted earnings per share would have been at Rs, 11.39 for the year ended March 31, 2015.

9. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange loss debited to Revenue account for the year ended March 31, 2015 is Rs, 3,330 thousand (year ended March 31, 2014: loss Rs, 3,173 thousand).

10. Commitments

Commitments made and outstanding (net of advances) for Company''s investment in Real estate (Investment property) is Rs, 1,711,497 thousand (March 31, 2014 Rs, 1,064,037 thousand).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is Rs, 129,602 thousand (March 31, 2014: Rs, 117,217 thousand)

There are no loan commitments made by the Company (March 31, 2014 Rs, nil).

11. Investments

a. The investments are made from the respective funds of the Policyholders'' or Shareholders'' and investment income thereon has been accounted accordingly.

b. All investments are performing investments.

12. Restructured assets

There are no assets including loans subject to re-structuring (March 31, 2014: '' Nil).

13. Valuation of Investment property

In accordance with the IRDA Regulations, 2002 (Preparation of Financial Statements and Auditors'' Report of Insurance Companies), the Company''s investment property has been revalue. The Company has revalue all its investment properties held for more than one year and market value for such properties is based on valuation performed by an independent valour at March 31, 2015. The opinion on market value by the independent valuer, is prepared in accordance with the "The RICS Valuation Standards" published by the Royal Institution of Chartered Surveyors ("RICS"), subject to variation to meet local established law, custom, practice and market conditions. The methods used in valuation of property includes "Direct comparable approach". The real estate investment property is accordingly valued at Rs, 2,528,667 thousand at March 31, 2015 (March 31, 2014: Rs, 854,400 thousand). The historical cost of the property is Rs, 1,966,588 thousand (March 31, 2014: Rs, 185,521 thousand).

14. Impairment of investment assets

In accordance with the impairment policy of the Company, diminution in the value of investments has been recognised under the head "Provision for diminution in the value of investments (net)" in the Revenue account and the Profit and Loss account. The total impairment loss recognised for the year ended March 31, 2015 is Rs, 67,498 thousand (year ended March 31, 2014: Rs, 347,997 thousand).

15. Encumbrances of assets

a. Assets deposited with National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL)

Fixed deposit of Rs, 1,050,200 thousand (March 31, 2014: Rs, 1,050,200 thousand) and Rs, 299,000 thousand (March 31, 2014: Rs, 300,100 thousand) has been deposited with NSCCL and ICCL respectively towards margin requirement for equity trade settlement.

b. Assets encumbered with Clearing Corporation of India Limited (CCIL)

c. Investments made under Statutory Requirements

The Company has deposited a security (1.44% 2023 Inflation Index Bond) with the Reserve Bank of India in order to comply with the requirements prescribed under Section 7 of the Insurance Act, 1938(amended by the Insurance Laws (Amendment) Act, 2015).

The market value of security held under Section 7 of the Insurance Act, 1938(amended by the Insurance Laws (Amendment) Act, 2015) is Rs, 106,124 thousand (March 31, 2014: Rs, 102,189 thousand). This security is held with Deutsche Bank A.G. in Constituent Subsidiary General Ledger Account as specified by the IRDAI.

d. Other encumbrances

Death claim settlement amount of Rs, 518 thousand (March 31, 2014: Rs, 479 thousand) pertaining to one of the deceased policyholder has been invested in a fixed deposit with ICICI Bank Limited based on the directive from the Hon. Patna High Court with the condition that this sum cannot be withdrawn without the order of the Court.

A fixed deposit of '' 5,000 thousand is placed with a bank for issuing the bank guarantee in favour of Sub-Divisional Judicial Magistrate, Patna with respect to a criminal case filed against a fraudulent policyholder.

16. Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside India at March 31, 2015 (March 31, 2013: Rs, Nil) except the assets disclosed in the note 3.25.

17. Securities Lending and Borrowing Scheme (SLB)

Equity shares transferred under SLB continue to be recognised on the Balance Sheet as the Company retains all the associated risks and rewards of these securities.

The value of equity shares lent by the Company under SLB and outstanding at March 31, 2015 is Rs, 115,122 thousands (March 31, 2014: Rs, 416,765 thousands). The equity shares were lent from the unit linked portfolio.

18. Reverse Repo transactions in Government securities/Corporate Debt Securities

Disclosures pursuant to IRDAI notification ref IRDA/F&I/CIR/INV/250/12/2012 dated December 4, 2012:

There are no investment contracts where sales have been made and payments are overdue at the Balance Sheet date.

19. The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

There are no payments made to or dues outstanding to Micro, Small and Medium Enterprises beyond the timelines prescribed by the MSMED Act (March 31, 2014: Rs, Nil).

20. Additional disclosures on expenses

The additional disclosures on expenses pursuant to the IRDAI Circular 067/IRDA/F&A/CIR/MAR-08 dated March 28, 2008 have been detailed herein below:

21. Discontinued Policy Fund

Pursuant to the IRDAI circular number IRDA/Reg/2/52/2010 dated July

1, 2010, the following details are disclosed with respect to policies discontinued either on customer request or for non-payment of premium amount within the grace period

b) Number of policies discontinued during the year ended March 31, 2015 is 118,902 (year ended March 31, 2014:114,636).

22. Statement containing names, descriptions, occupations of and directorships held by the persons in charge of management of the business under Section 11 (2) of Insurance Act, 1938 (amended by the Insurance Laws (Amendment) Act, 2015)

Name of person in-charge : Mr. Sandeep Bakhshi

Designation of person in-charge : Managing Director & CEO

Occupation of person in-charge : Service

Directorships held by the person : ICICI Prudential Pension Funds

in-charge during the year or at Management Company Limited, Chairman

March 31, 2015 FINO PayTech Limited, Chairman

23. Extra allocation

Total extra allocation made with respect to group products (Group Unit Linked Superannuation and Group Unit Linked Employee Benefit Plan) for the year ended March 31, 2015 is Rs, 2,551 thousand (for year ended March 31, 2014: Rs, 197 thousand).

The amount of recovery towards extra allocation for the year ended March 31, 2015 is Rs, 39 thousand (year ended March 31, 2014: Rs, nil).

24. Dividend

Interim dividend appropriation for the year ended March 31, 2015 amounted to Rs, 6,353,777 thousand (year ended March 31, 2014: Rs, 9,279,478 thousand) including corporate dividend tax of Rs, 992,644 thousand (year ended March 31, 2014: Rs,1,347,961 thousand).

The above interim dividend has been declared out of current period profits in accordance with the provisions contained in section 123 of The Companies Act, 2013 read with the Companies (Declaration and Payment of Dividend) Rules, 2014 effective April 1, 2014, subsequently amended by the Companies (Declaration and Payment of Dividend) Amended Rules,

2014 effective June 12, 2014 (collectively referred to as the ''Dividend Rules''). This is also supported by a legal opinion obtained by the Company.

The Board of directors have also proposed a final dividend of Rs, 3,006,835 thousand (Previous year Rs, 3,001,437 thousand). Dividend distribution tax on the same amounts to Rs, 612,192 thousand (Previous year Rs, 510,094 thousand).

The final dividend amounting to Rs, 284 thousand and dividend distribution tax of Rs, 48 thousand pertains to dividend for year ended March 31, 2014 on 135,238 equity shares allotted between date of Board Meeting i.e. April 22, 2014 and Record Date i.e. June 20, 2014.

25. Pending litigations

The Company''s pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial results at March 31, 2015. Refer note 3.1 for details on contingent liabilities. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of Rs, 39,139 thousand at March 31, 2015.

26. Long term contracts

For insurance contracts, actuarial valuation of liabilities for policies in force is done by the Appointed Actuary of the Company. The assumptions used in valuation of liabilities for policies in force are in accordance with the guidelines and norms issued by the Insurance Regulatory and Development Authority of India ("IRDAI") and the Institute of Actuaries of India in concurrence with the IRDAI.

Mar 31, 2014

1. Actuarial method and assumptions

The actuarial liability in respect of both participating and non-participating policies is calculated using the gross premium method, using assumptions for interest, mortality, morbidity, expense and inflation and, in the case of participating policies, future bonuses together with allowance for taxation and allocation of profits to Shareholders. These assumptions are determined as prudent estimates at the date of valuation with allowances for adverse deviations. No allowance is made for expected lapses in the future.

An unexpired risk reserve and a reserve in respect of claims incurred but not reported is held for one year renewable group term insurance.

The unit liability in respect of linked business is the value of the units standing to the credit of policyholders, using the Net Asset Value (''NAV'') prevailing at the valuation date.

The interest rates used for valuing the liabilities are in the range of 4.87% to 5.77% per annum (The previous year''s rates were 4.43% to 6.26%).

Mortality rates used are based on the published "Indian Assured Lives Mortality (2006 - 2008) Ult." mortality table for assurances and LIC (a) 96-98 table for annuities adjusted to reflect expected experience. Morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates supplied by reinsurers.

Expenses are provided for at least at current levels in respect of renewal expenses, with no allowance for any future improvement but with an allowance for any expected worsening. Per policy renewal expenses are assumed to inflate at 4.84% (The inflation assumption for the previous year was 5.41%).

Certain explicit additional provisions are made, which include the following:

a. Reserves for additional expenses that the Company may have to incur if it were to close to new business twelve months after the valuation date.

b. Reserves for guarantees available to individual and group insurance policies.

c. Reserves for cost of non-negative claw back additions.

d. Reserves for free look option given to policyholders calculated using a free look cancellation rate of 3.10% (March 31, 2013: 2.64%) for individual policies issued in the two-month period preceding the valuation date.

e. Reserves for guaranteed insurability and guaranteed annuity options given to policyholders.

f. Reserves for substandard lives.

g. Reserves for lapsed policies eligible for revivals.

2. Encumbrance of assets

a. Assets deposited with National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL)

Fixed deposit of '' 1,050,200 thousand (March 31, 2013: '' 1,050,100 thousand) and '' 300,100 thousand (March 31, 2013: '' 100,000 thousand) has been deposited with NSCCL and ICCL respectively towards margin requirement for equity trade settlement.

c. Other encumbrances

Death claim settlement amount of '' 479 thousand (March 31, 2013: '' Nil) pertaining to one of the deceased policyholder has been invested in a fixed deposit with ICICI Bank Limited based on the directive from the Hon. Patna High Court with the condition that this sum cannot be withdrawn without the order of the Court.

3. Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside India at March 31, 2014 (March 31, 2013: '' Nil) except the assets disclosed in the note 3.3 and 3.5 of schedule 16.

4. Investments made under Statutory Requirements

The Company has deposited a security (10.0% 2014 Government of India Securities) with the Reserve Bank of India in order to comply with the requirements prescribed under Section 7 of the Insurance Act, 1938.

The market value of this security held under Section 7 of the Insurance Act, 1938 is '' 102,189 thousand (March 31, 2013: '' 104,331 thousand). This security is held with Deutsche Bank A.G. in Constituent Subsidiary General Ledger Account as specified by the IRDA.

5. Restructured assets

There are no assets including loans subject to re-structuring (March 31, 2013: '' Nil).

6. Commitments

Commitments made and outstanding (net of advances) for Company''s investment in Real estate (Investment property) is '' 1,064,037 thousand (March 31, 2013: '' Nil).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is '' 117,217 thousand (March

31, 2013: '' 180,842 thousand).

There are no loan commitments made by the Company (March 31, 2013: '' Nil).

7. Claims settled and remaining unpaid

Claims settled and remaining unpaid for a period of more than six months as at March 31, 2014 is '' 114 thousand (March 31, 2013: '' 8,216 thousand).

8. Unclaimed amount of policyholders

Inaccordance with circular IRDA/F&I/CIR/CMP/174/11/2010 issued by the IRDA on November 4, 2010, the age wise analysis of unclaimed amount of the policyholders at March 31, 2014 is tabulated as below:

a. Claims settled but not paid to the policyholders/insured due to any reasons except under litigation from the insured/policyholders:

The cheques issued but not encashed by policyholders''/insured category include Rs,2,122,770 thousand pertaining to cheques which are within the validity period but not yet encashed by the policyholders at March 31, 2014 (March 31, 2013: Rs,1,198,200 thousand). This amount forms part of bank reconciliation and consequently not considered in unclaimed amount of policyholders as disclosed under Schedule 13 - Current liabilities.

1. Long Term Reward Scheme paid during the year

2. Inducted effective January 1, 2014

3. Held office until June 30, 2012

Expenses towards gratuity and leave encashment provision are determined actuarially for the Company as a whole and accordingly have not been considered in the above information.

Managerial remuneration is in accordance with the requirements of Section 34A of the Insurance Act, 1938 and as approved by the IRDA. Managerial remuneration in excess of the limits prescribed by IRDA has been charged to the Shareholders'' account.

9. Investments

a. The investments are made from the respective funds of the Policyholders'' or Shareholders'' and investment income thereon has been accounted accordingly.

b. All investments are performing investments.

10. Investment property

In accordance with the IRDA Regulations, 2002 (Preparation of Financial Statements and Auditors'' Report of Insurance Companies), the Company''s investment property has been revalued. The market value of the property is based on valuation performed by an independent valuer at March 31, 2014. The opinion on market value by the independent valuer, is prepared in accordance with the "The RICS Valuation Standards" published by the Royal Institution of Chartered Surveyors ("RICS"), subject to variation to meet local established law, custom, practice and market conditions. The methods used in valuation of property includes "Direct comparable approach". The real estate investment property is accordingly valued at Rs,854,400 thousand at March 31, 2014 (March 31, 2013: Rs,890,000 thousand). The historical cost of the property is Rs,185,521 thousand.

11. Impairment of investment assets

In accordance with the impairment policy of the Company, diminution in the value of investments has been recognised under the head "Provision for diminution in the value of investments (Net)" in the Revenue account and the Profit and Loss account. The total impairment loss recognised for the year ended March 31, 2014 is Rs,347,997 thousand (March 31, 2013: Rs,98,743 thousand).

12. Securities lending and borrowing scheme (SLB)

Equity shares transferred under SLB continue to be recognised on the Balance Sheet as the Company retains all the associated risks and rewards of these securities.

The value of equity shares lent by the Company under SLB and outstanding at March 31, 2014 is Rs,416,765 thousand (March 31, 2013: Rs,Nil). The equity shares were lent from the unit linked portfolio.

13. Deferred taxes

*The deferred tax asset on carried forward unabsorbed losses was recognised based on estimated taxable profit expected to contractually be earned in the future from the current in-force life insurance contracts.

Deferred tax charge for the year ended March 31, 2014 is Rs,62,902 thousand (March 31, 2013: Rs,975,164 thousand).

An amount of Rs,384,181 thousand (March 31, 2013: Rs,234,428 thousand) has been charged on the total surplus in the participating line of business in line with the Company''s accounting policy. As the Company has unabsorbed losses as per Income Tax Act there is no current tax liability, the tax on total surplus of participating line of business has been offset by a corresponding credit in the Profit and Loss account.

14. Operating lease commitments

The Company takes premises, motor vehicles, office equipments, computers, servers and modular furniture on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancellable and non-cancellable operating lease arrangements are charged to the Revenue account and the Profit and Loss account over the lease term on a straight line basis. The total operating lease rentals charged in the current year is Rs,823,552 thousand (year ended March 31, 2013: Rs,964,002 thousand).

Lease rentals pertaining to non-cancellable leases charged to the Revenue account and the Profit and Loss account for the year ended March 31, 2014 is Rs,299,104 thousand (year ended March 31, 2013: Rs,343,632 thousand). The future minimum lease payments in respect of these non-cancellable leases at the Balance Sheet date are summarised below:

15. Assets given on operating lease

The Company has entered into an agreement in the nature of leave and licence for leasing out investment property. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such lease recognised in Revenue account for the year ended March 31, 2014 is Rs,52,973 thousand (for the year ended March 31, 2013: Rs,39,992 thousand).

16. Details of related parties and transactions with related parties

Related parties and nature of relationship:

Nature of relationship Name of the related party

Holding company ICICI Bank Limited

Substantial interest Prudential Corporation Holdings Limited

Subsidiary ICICI Prudential Pension Funds Management Company Limited

Fellow subsidiaries and entities jointly controlled by holding company ICICI Securities Limited

ICICI Securities Inc.

ICICI Securities Holding Inc.

ICICI Securities Primary Dealership Limited

ICICI Venture Funds Management Company Limited

ICICI Home Finance Company Limited

ICICI Trusteeship Services Limited

ICICI Investment Management Company Limited

ICICI International Limited

ICICI Bank UK PLC.

ICICI Bank Canada

ICICI Strategic Investments Fund ICICI Kinfra Limited I-Ven Biotech Limited

Key management personnel Sandeep Bakhshi, Managing Director and CEO

Puneet Nanda, Executive Director

Sandeep Batra, Executive Director (effective January 1, 2014)

Madhivanan Balakrishnan, Executive Director (held office till June 30, 2012)

Tarun Chugh, Chief Distribution Officer (held office till November 30, 2013)

Judhajit Das, Chief - Human Resources

Avijit Chatterjee, Chief Actuary (held post of Appointed Actuary till April 21, 2013)

Satyan Jambunathan, Appointed Actuary

(appointed as Appointed Actuary, effective April 22, 2013)

Significant influence ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life

Insurance Scheme

ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund ICICI Prudential Life Insurance Company Limited Superannuation Scheme

17 Fund Balance Sheet at March 31, 2014

Fund Balance Sheet for each segregated linked fund is annexed herewith - Refer Annexure 1.

18. Fund Revenue Account for the year ended March 31, 2014

Fund Revenue Account for each segregated linked fund is annexed herewith - Refer Annexure 2.

19. Annexure to the Revenue account and Additional ULIP Disclosures

Additional disclosure in respect of Unit linked portfolio as prescribed by IRDA vide circulars 054/IRDA/F&A/FEB-07 dated February 20, 2007 and IRDA/ F&A/001/APR-07 dated April 16, 2007 - Refer Annexure 3.

20. Employee benefits

Provision for staff benefits as per AS 15 (Revised):

(a) Defined contribution plans

The amount recognised as an expense during the year is '' 40,678 thousand (year ended March 31, 2013: '' 43,089 thousand).

(b) Defined benefit plans

Gratuity

The Gratuity plan of the Company provides for a lump-sum payment to vested employees at retirement, termination of employment or resignation from employment. Vesting happens only on completion of 5 years of continuous service with the company. However, in case of death of an employee during the course of an active employment, the gratuity is paid even if the employee has not completed 5 years of continuous service. The payment is based on employee''s last drawn salary and tenure as prescribed in the Company''s policy. The gratuity liability of the Company is actuarially determined at each Balance Sheet date using projected unit cost method. ,000)

* Salary escalation rate considered in valuation take into account impact of inflation, seniority, promotion and other factors impacting future salary cost.

# Expected rate of return on plan assets is based on our expectation of the average long-term rate of return expected on investments of fund during the estimated term of obligations.

Provident fund

Provident fund benefits are aimed at providing security to staff members and their dependents on retirement, disability or death. Both employee and the company contribute an equal percentage of the basic salary a part of which goes to the fund, and balance portion is contributed to the government administered pension fund. The provident fund is managed by ICICI Prudential Life Insurance Company Employees'' Provident Fund Trust.

As there is net surplus in the plan, no liability needs to be provided for in the books of accounts of the Company.

The assumptions used in actuarially valuing the defined benefit obligations of interest rate guarantee are as follows:

(c) Other long term benefits

Long term incentive scheme

21. Employee Stock Option Scheme ("ESOS")

The Company Employees Stock Option Scheme (2005) ("ESOS 2005") is approved by the Shareholders of the Company and administered by the Board Compensation and Nominations Committee. There are presently six tranches granted under the Company Employee Stock Option Scheme (ESOS) by name Founder I, 2004-05, 2005-06, 2006-07, Founder II and 2007-08. ESOS 2005 permits the grant of share options up to 3% of the issued capital of Company. The maximum number of options that can be granted to any eligible employee is restricted to 1% of the issued capital.

Options are granted with an exercise price which is computed based on the new business achieved profits (NBAP) applying a suitable multiple, consistent with the industry and Company context. The exercise price was finalised by the Board Compensation and Nominations Committee in concurrence with the Board of Directors of the Company.

Exercise price of all the options outstanding as at March 31, 2014 for Founder I (2003-04) scheme, 2004-2005 scheme, 2005-06 scheme, 2006 07 scheme, Founder II and 2007-08 scheme is Rs,30, Rs,42, Rs,70, Rs,130, Rs,130 and Rs,400 respectively.

During the year, the Company has recognised a compensation cost of Rs,Nil (Previous year: Rs,Nil) as the intrinsic value of the options.

For the year ended March 31, 2014 there would have been no impact on the Revenue account and Profit & Loss account had the Company followed the fair value method for valuing its options. For the year ended March 31, 2013 there would have been an additional cost of Rs,2,416 thousand under the fair value method. Accordingly, the profit after tax for the year ended March 31, 2013 would have been at Rs,14,956,976 thousand. Consequently, the Company''s basic earnings per share would have been at Rs,10.47 and diluted earnings per share would have been at Rs,10.44 for the year ended March 31, 2013.

22. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange loss debited to Revenue account for the year ended March 31,2014 is Rs,3,173 thousand (year ended March 31, 2013: loss of Rs,3,061 thousand).

23. Funds for future appropriations (''FFA'')

The cumulative balance of FFA as at March 31, 2014 of Rs,449,992 thousand (March 31, 2013: Rs,1,322,418 thousand) is not available for distribution to Shareholders. Such amount is classified under Funds for Future appropriations - Linked, in the Balance Sheet.

24. The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

There are no payments made to or dues outstanding to Micro, Small and Medium Enterprises beyond the timelines prescribed by the Act (March 31, 2013: Rs,nil).

Note: Penalty towards non-compliance of certain provisions of the Insurance Act, 1938 and regulations/guidelines issued by IRDA in respect of intermediaries and group business.

25. Statement containing names, descriptions, occupations of and directorships held by the persons in charge of management of the business under section 11 (2) of insurance act, 1938

Name of person in-charge : Mr. Sandeep Bakhshi

Designation of person in-charge : Managing Director & CEO

Occupation of person in-charge : Service

Directorships held by the person : ICICI Prudential Pension Funds in-charge during the year or as Management Company Limited, Chairman at March 31, 2014 Financial Inclusion Network & Operations Limited, Chairman

26. Dividend

The Board of Directors of the Company have during the year approved and paid an interim dividend aggregating to Rs,7,931,517 thousand (Previous year: Rs,3,429,335 thousand).

The total interim dividend appropriation for the year amounted to Rs,9,279,478 thousand including corporate dividend tax of Rs,1,347,961 thousand (Previous year: Rs,3,985,659 thousand including corporate dividend tax of Rs,556,324 thousand).

The Board of Directors have also proposed a final dividend of Rs,3,001,437 thousand (Previous year: Rs,1,413,959 thousand).

These dividends were declared from current year''s profit and the Company has transferred 10% of current year''s profit amounting to Rs,1,566,656 thousand to General Reserves (Previous year: Rs,1,495,939 thousand) as required by the Companies (Transfer of Profits to Reserves) Rules, 1975.

27. Debit balance in Profit & Loss account

In accordance with IRDA (Preparation of Financial Statements and AuditorsRs,Report of Insurance Companies) Regulations 2002, debit balance in Profit and Loss account carried to Balance Sheet has been shown as deduction from General reserve to the extent of Rs,4,446,769 thousand (Previous year: Rs,2,880,113 thousand) and the balance Rs,5,887,809 thousand (Previous year: Rs,8,763,355 thousand) is shown in the Balance Sheet under application of funds.

Mar 31, 2013

1. Actuarial method and assumptions

¹ The Company has entered into an agreement with Dr. Balabhai Nanavati Hospital to provide service with respect to health claim settlements and thus performance bank guarantee of '' 500 thousand (Previous year: '' 500 thousand) in this regard is placed with the hospital.

² '' 1,590 thousand pertain to a demand from Profession Tax authority, West Bengal.

³ '' 1,350,000 thousand on account of objections raised by office of the Commissioner of Service tax, Mumbai (through the Service Tax audit under EA-2000) on certain positions taken by the Company.

The actuarial liability in respect of both participating and no participating policies is calculated using the gross premium method, using assumptions for interest, mortality, morbidity, expense and inflation and, in the case of participating policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation with allowances for adverse deviations. No allowance is made for expected lapses.

An explicit provision has been made to allow for additional expenses that the Company may have to incur if it were to close to new business twelve months after the valuation date.

The greater of a liability calculated using discounted cash flows and unearned premium reserves is held for the unexpired portion of the risk for the general fund liabilities of linked business and attached riders. An unexpired risk reserve and a reserve in respect of claims incurred but not reported are held for one year renewable group term insurance.

The unit liability in respect of linked business has been taken as the value of the units standing to the credit of policyholders, using the Net Asset Value (''NAV'') prevailing at the valuation date. The adequacy of charges under unit linked policies to meet future expenses has been tested and provision made as appropriate. Provision has also been made for the cost of guarantee under unit linked products that carry a guarantee. The units held in respect of lapsed policies are divided into a revival reserve, which contributes to liabilities, and a fund for future appropriation, which contributes to regulatory capital.

The interest rates used for valuing the liabilities are in the range of 4.43% to 6.26% per annum. (The previous year''s rates were 4.93% to 6.02%).

Mortality rates used are based on the published IALM (94-96) Ultimate Mortality Table for assurances and LIC (a) 96-98 table for annuities adjusted to reflect expected experience. Morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates supplied by reinsurers.

Expenses are provided for at least at current levels in respect of renewal expenses, with no allowance for any future improvement but with an allowance for any expected worsening. Per policy renewal expenses for regular premium policies are assumed to inflate at 5.41% (The inflation assumption for the previous year was 5.20%).

2. Encumbrances of assets

The assets of the Company are free from all encumbrances at March 31, 2013 except to the extent assets or monies are required to be deposited as margin contributions for investment trade obligations of the Company as detailed below:

a. Fixed deposit of '' 1,050,100 thousand (Previous year: '' 1,050,000 thousand) and '' 100,000 thousand (Previous year: '' 100,000 thousand) has been deposited with National Securities Clearing Corporation Limited and Indian Clearing Corporation Limited respectively towards margin requirement for equity trade settlement;

b. Government securities of '' 794,986 thousand with market value of '' 807,356 thousand (Previous year: '' 843,445 thousand with Market value of '' 831,528 thousand) has been deposited with Clearing Corporation of India Limited (CCIL) as Settlement Guarantee Fund (SGF) deposit;

c. Government securities of '' 207,632 thousand with market value of '' 203,300 thousand (Previous year: '' 209,291 thousand with Market value of '' 191,400 thousand) has been deposited with CCIL for trades in the Collateralised Borrowing and Lending Obligation (CBLO) segment;

d. '' 60,000 thousand (Previous year: '' 60,000 thousand) has been deposited with CCIL as SGF deposit and '' 100 thousand (Previous year: '' 100 thousand) has been deposited with CCIL for trades in CBLO segment.

3. Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws in or outside India at March 31, 2013 (Previous year: '' Nil) except investments to be held under Section 7 of the Insurance Act, 1938 as disclosed under 3.9 below.

4. Restructured assets

There are no assets including loans subject to re-structuring (Previous year: '' Nil).

5. Commitments

Commitments made and outstanding for loans and investment are '' Nil (Previous year: '' Nil).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is Rs, 180,842 thousand (Previous year: Rs, 61,924 thousand).

6. Unclaimed amount of policyholders

In accordance with circular IRDA/F&I/CIR/CMP/174/11/2010 issued by the IRDA on November 4, 2010, the age wise analysis of unclaimed amount of the policyholders at March 31, 2013 is tabulated as below:

a. Claims settled but not paid to the policyholders/insured due to any reasons except under litigation from the insured/ policyholders:

7. Investments

Â» The investments are made from the respective funds of the Policyholders'' or Shareholders'' and investment income thereon has been accounted accordingly.

* All investments are performing investments.

* The market value of deposit held under Section 7 of the Insurance Act, 1938 in the form of securities are as follows:

8. Real Estate - Investment property

In accordance with the IRDA Regulations, 2002 (Preparation of Financial Statements and Auditors'' Report of Insurance Companies), the Company''s real estate investment has been revalue by an independent valuer at March 31, 2013. The real estate investment property is accordingly valued at Rs, 890,000 thousand at March 31, 2013 (Previous year: Rs, 890,000 thousand, Historical cost: Rs, 185,521 thousand).

9. Impairment of investment assets

In accordance with the impairment policy of the Company, other than temporary diminution in value of Investments has been assessed at March 31, 2013. The Company has accordingly written-off a part of the value of the equity investments considered as impaired. The total impairment loss recognised is Rs, 98,743 thousand at March 31, 2013 (Previous year: Rs, 127,140 thousand) in the Revenue account under Loss on sale/redemption of investments.

10. Deferred taxes

As required under AS 22, deferred tax asset is recognised on carry forward of eligible tax losses, which can be set off against future taxable income and on timing differences arising from funds for future appropriation under linked line of business. Deferred tax assets are reviewed at each Balance Sheet date and written down or written up to reflect the amount that is virtually certain to be realised. Deferred tax asset is recognised on the Company''s eligible tax losses to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised.

At March 31, 2013, Rs, 12,828 thousand represents deferred tax asset on carry forward unabsorbed losses (Previous year: Rs, 860,260 thousand).

*The deferred tax asset on carried forward unabsorbed losses is recognised based on estimated taxable profit expected to contractually be earned in the future from the current in force life insurance contracts at March 31, 2013.

thousand).

The Company has taken assets on lease, the total lease rentals charged to Revenue account in the current year is Rs, 343,632 thousand (Previous year: Rs, 411,594 thousand). The future minimum lease payments in respect of the lease at the Balance Sheet date are summarised below:

11. Operating lease commitments

The Company takes premises (both commercial and residential), motor vehicles, office equipments, computers, servers and modular furniture on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancelable and non-cancelable operating lease arrangements are charged to the Revenue account and the Profit and Loss account over the lease term on a straight line basis. The total operating lease rentals charged to Revenue account in the current year is Rs, 1,148,950 thousand (Previous year: Rs, 1,354,055

12. Assets given on operating lease

The Company has entered into an agreement in the nature of leave and licence for leasing out the investment property. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The total lease payments received in respect of such lease recognised in Revenue account for the year is Rs, 39,992 thousand (previous year ended March 31, 2012 Rs, 28,948 thousand).

13. Details of related parties and transactions with related parties

Related parties and nature of relationship:

Nature of relationship^^^^^^^^^^^^^^^^^^^^^^^^^^H Name of the related party

Holding company ICICI Bank Limited

Substantial interest Prudential Corporation Holdings Limited

Subsidiary ICICI Prudential Pension Funds Management Company Limited

Fellow subsidiaries and entities jointly controlled by holding company ICICI Securities Limited

ICICI Securities Inc.

ICICI Securities Holding Inc.

ICICI Venture Funds Management Company Limited

ICICI Home Finance Company Limited

ICICI Trusteeship Services Limited

ICICI Securities Primary Dealership Limited

ICICI Investment Management Company Limited

ICICI International Limited

ICICI Bank UK PLC.

ICICI Bank Canada

ICICI Bank Eurasia Limited Liability Company ICICI Lombard General Insurance Company Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Trust Limited

TCW / ICICI Investment Partners Limited Liability Company

Nature of Name of the related party

Consolidated under AS-21 by holding company ICICI Eco-net Internet and Technology Fund

ICICI Equity Fund ICICI Emerging Sectors Fund ICICI Strategic Investments Fund ICICI Venture Value Fund (IVVF)

I-Ven Biotech Limited ICICI Kinfra Limited

Key management personnel Sandeep Bakhshi, Managing Director and CEO

Puneet Nanda, Executive Director Tarun Chugh, Chief Distribution Officer Judhajit Das, Chief - Human Resources Avijit Chatterjee, Appointed Actuary

Madhivanan Balakrishnan, Executive Director (held office till June 30, 2012) Significant influence ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life

Insurance Scheme

ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund ICICI Prudential Life Insurance Company Limited Superannuation Scheme

The following represents significant transactions between the Company and its related parties.

14 Segmental reporting

Income and expenses directly attributable or allocable to the segments are recorded and disclosed under the respective segments in the Revenue account and Profit and loss account, as applicable.

Investments and policy liabilities are disclosed in the Balance Sheet under the respective segments. Net fixed assets of Rs, 1,722,384 thousand (Previous year Rs, 1,802,306 thousand) are disclosed in shareholders segment. Depreciation expense has been allocated as disclosed in Note 2.16.

15. Fund Balance Sheet as at March 31, 2013

Fund Balance Sheet for each segregated linked fund is annexed herewith - Refer Annexure 1 (Page No. 108).

16. Fund Revenue Account for the year ended March 31, 2013

Fund Revenue Account for each segregated linked fund is annexed herewith - Refer Annexure 2 (Page No. 152).

17. Annexure to the Revenue account and additional ULIP disclosures

Additional disclosure in respect of Unit linked portfolio as prescribed by IRDA vide circulars 054/IRDA/F&A/FEB-07 dated February 20, 2007 and IRDA/F&A/001/APR-07 dated April 16, 2007 - Refer Annexure 3 (Page No. 172).

* Salary escalation rate considered in valuation take into account impact of inflation, seniority, promotion and other factors impacting future salary cost.

# Expected rate of return on plan assets is based on our expectation of the average long-term rate of return expected on investments of fund during the estimated term of obligations.

* Provident fund

The defined benefit obligation of interest rate guarantee on exempt provident fund in respect of the employees of the Company has been determined based on the Guidance Note (GN 29) on Valuation of Interest Rate Guarantees on exempt Provident Funds under AS 15 (Revised) issued by The Institute of Actuaries of India. As there is net surplus in the plan, no liability needs to be provided for in the books of accounts of the Company.

Compensated absence: Liability for compensated absence for employees is determined based on actuarial valuation which has been carried out using the projected accrued benefit method which is same as the projected unit credit method in respect of past service. The assumptions used for valuation are:

c) Other long term benefits:

Long term incentive scheme: Liability for the scheme is determined based on actuarial valuation which has been

The Company policy allows accumulation of leave of 90 days for employees who are in continuous employment of 5 years and above with the Company and 60 days with employees with lesser vintage and certain junior grades.

Exercise price of options is subject to dilution formula and it depends on the capital base of the Company as at the date of exercise of the options. Exercise price of all the options outstanding as at March 31, 2013 for Founder I (2003-04) scheme, 2004-2005 scheme, 2005-06 scheme, 2006-07 scheme, Founder II and 2007-08 scheme is Rs, 30, Rs, 42, Rs, 70, Rs, 130, Rs, 130 and Rs, 400 respectively.

During the year, the Company has recognised a compensation cost of Rs, Nil (Previous year: Rs, Nil) as the intrinsic value of the options.

Had the Company followed the fair value method for valuing its options for the year, the charge to the Revenue account and Profit & Loss account would have been higher by Rs, 2,416 thousand (Previous year: Rs, 34,322 thousand) While computing liability, 2% leave a ailment has been assumed for each subsequent year following the valuation date.

and profit after tax would have been Rs, 14,956,976 thousand (Previous year: Rs, 13,807,415 thousand). Consequently Company''s basic earnings per share would have been Rs, 10.47 (Previous year: Rs, 9.67) and diluted earnings per share would have been Rs, 10.44 (Previous year: Rs, 9.64).

The weighted average price of options exercised during the year is Rs, 70.00 (Previous year: Rs, 94.00). The weighted average remaining contractual life of options outstanding at the end of the period is 4.10 years (Previous year: 5.10 years). The key assumptions used to estimate fair value of options are:

18. Foreign exchange gain/loss

Transactions in foreign currencies are recorded at exchange rate prevailing on the date of transaction. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement is recognised as income or expense, as the case may be. The net foreign exchange loss debited to Revenue account for the year ended March 31, 2013 is Rs, 3,061 thousand (previous year loss Rs, 912 thousand).

19. Funds for Future Appropriations (''FFA'')

The cumulative balance of FFA as at March 31, 2013 of Rs, 1,322,418 thousand (Previous year Rs, 3,322,629 thousand) is not available for distribution to shareholders. Such amount is classified under Funds for Future appropriations

- Linked, in the Balance Sheet.

20. The Micro, Small and Medium Enterprises Development Act, 2006

There are no dues payable to vendors covered by the Micro, Small and Medium Enterprises Development Act, 2006, as at March 31, 2013 (Previous year: Rs, Nil).

21. Discontinued Policy Fund

Pursuant to the IRDA circular number IRDA/Reg/2/52/2010 dated July 1, 2010, the following details are disclosed with respect to policies discontinued either on customer request or for non-payment of premium amount within the grace period:

b) Number of policies discontinued during the year ended March 31, 2013: 90,192 (Previous year: 30,029);

e) Charges imposed on account of discontinued policies during the year ended March 31, 2013: Rs, 157,105 thousand (Previous year: Rs, 43,856 thousand).

22. Dividend

The Board of Directors of the Company have during the year approved and paid an interim dividend aggregating to Rs, 3,429,335 thousand (Previous year: Rs, 3,142,777 thousand).

The total interim dividend appropriation for the year amounted to Rs, 3,985,659 thousand including corporate dividend tax of Rs, 556,324 thousand (Previous year: Rs, 3,652,614 thousand including corporate dividend tax of Rs, 509,837 thousand).

The Board of Directors have also proposed a final dividend of Rs, 1,413,959 thousand (Previous year: Rs, 1,000,885 thousand).

These dividends were declared from current year''s profit and the Company has transferred 10% of current year''s profit amounting to '' 1,495,939 thousand to general reserves (Previous year: '' 1,384,174 thousand) as required by the Companies (Transfer of Profits to Reserves) Rules, 1975.

23. Segregation of linked funds

Funds having similar investment objectives but with different charge structures were managed by the Company as a single fund with different plans below it. However, in accordance with circular no. IRDA/F&I/CIR/INV/173/08/2011 issued by the IRDA on July 29, 2011, the Company has converted various plans offered below a single fund, as individual segregated linked funds during FY2012.

Mar 31, 2012

1. Actuarial method and assumptions

The actuarial liability in respect of both participating and non-participating policies is calculated using the gross premium method, using assumptions for interest, mortality, expense and inflation and, in the case of participating policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation with allowances for adverse deviations. No allowance is made for expected lapses.

An explicit provision has been made to allow for additional expenses that the Company may have to incur if it were to close to new business 12 months after the valuation date.

The greater of a liability calculated using discounted cash flows and unearned premium reserves is held for the unexpired portion of the risk for the general fund liabilities of linked business and attached riders. An unearned premium reserve and a reserve in respect of claims incurred but not reported is held for one year renewable group term insurance.

The interest rates used for valuing the liabilities are in the range of 4.93% to 6.02% per annum. (The previous year''s rates were 6.16% to 6.86%)

Expenses are provided for at current levels, in respect of renewal expenses, with no allowance for any future improvement but with an allowance for any expected worsening. Per policy renewal expenses for regular premium policies are assumed to inflate at 5.20% (The inflation assumption for the previous year was 5.90%).

2. Encumbrances of assets

The assets of the Company are free from all encumbrances at March 31, 2012 (Previous year: Nil) except as required to be deposited as margin contributions for investment trade obligations as detailed below:

a. Fixed deposit of Rs, 1,050,000 thousand (Previous year: Nil) and Rs, 100,000 thousand (Previous year: Nil) has been deposited with National Securities Clearing Corporation Limited and Indian Clearing Corporation Limited respectively towards margin requirement for equity trade settlement;

b. Government securities of Rs, 843,445 thousand with market value: Rs, 831,528 thousand (Previous year: Rs, 845,143 thousand with Market value: Rs, 846,383 thousand has been deposited with Clearing Corporation of India Limited (CCIL) as Settlement Guarantee Fund (SGF) deposit;

c. Government securities of Rs, 209,291 thousand with market value: Rs, 191,400 thousand (Previous year: Rs, 209,675 thousand with Market value: Rs, 199,700 thousand) has been deposited with CCIL for trades in the Collateralized Borrowing and Lending Obligation (CBLO) segment.

d. Further, Rs, 60,000 thousand (Previous year: Rs, 200,000 thousand) has been deposited with CCIL as SGF deposit and Rs, 100 thousand (Previous year: Rs, 100 thousand) has been deposited with CCIL for trades in CBLO segment.

3.4 Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws in or outside India at March 31, 2012 except investments to be held under Section 7 of the Insurance Act, 1938 as disclosed under

3.9 below.

4. Restructured Assets

There are no assets including loans subject to restructuring (Previous year: Nil).

5. Commitments

Commitments made and outstanding for loans and investment are Nil (Previous year: Nil).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is Rs, 61,924 thousand (Previous year: '' 61,269 thousand).

6. Unclaimed amount of policyholders

In accordance with circular IRDA/F&I/CIR/CMP/ 174/11/2010 issued by the IRDA on November 4, 2010, the age wise analysis of unclaimed amount of the policyholders at March 31, 2012 is tabulated as below:

7. Real Estate - Investment Property

In accordance with the IRDA Regulations, 2002 (Preparation of Financial Statements and Auditors'' Report of Insurance Companies), the Company''s real estate investment has been revalued by an independent valuer at March 31, 2012. The real estate investment property is accordingly restated at '' 890,000 thousand at March 31, 2012 (Previous year: '' 854,400 thousand, Historical cost: '' 185,521 thousand).

8. Impairment of investment assets

In accordance with the impairment policy of the Company, permanent diminution in value of Investments in equity, real estate and venture fund has been assessed at March 31, 2012. The Company has accordingly written-off a part of the value of the equity investments considered as impaired. The total impairment loss recognised is '' 127,140 thousand at March 31, 2012 (Previous year: Nil) in the Revenue account under Loss on sale/redemption of investments.

9. Sector-w ise percentage of business

Sector wise break-up of policies issued during the year is as follows:

10. Deferred taxes

In the Finance Bill, 2012, the scope of Minimum Alternate Tax (MAT) has been expanded by virtue of which it has been proposed to bring insurance companies within the ambit of MAT from FY 2013 onwards. As per the proposals of the Finance Bill, 2012, which is yet to become law, a MAT rate of 18.5% of the Company''s book profit has been stipulated. However, this rate is higher than the current income tax rate for an insurance company at 12.5% of taxable profits as prescribed by the Income Tax Act, 1961. The Company has taken a view that since the proposed rate of MAT is higher than the normal rate of tax applicable to insurance Companies, there seems to be an anomaly in this regard which is anticipated to be rationalised. In the light of the above, the Company has not considered the proposal of introduction of a higher MAT rate in the Finance Bill, 2012 in ascertaining the virtual certainty of the reliability of its deferred tax asset.

As at March 31, 2012, Rs, 860,260 thousand represents deferred tax asset on carry forward unabsorbed losses (Previous year: Rs, 1,330,807 thousand).

11. Operating lease commitments

The total operating lease rentals charged to Revenue account in the current year is Rs, 1,354,055 thousand (Previous year: Rs, 2,268,307 thousand).

12. Details of related parties and transactions with related parties

Related parties and nature of relationship:

Nature of relationship Name of the related party

Holding company ICICI Bank Limited

Substantial interest Prudential Corporation Pic

Subsidiary ICICI Prudential Pension Funds Management Company Limited

Fellow subsidiaries ICICI Securities Limited

ICICI Venture Funds Management Company Limited

ICICI Home Finance Company Limited

ICICI Lombard General Insurance Company Limited

ICICI Trusteeship Services Limited

ICICI Securities Primary Dealership Limited

ICICI Securities Inc.

ICICI Securities Holding Inc.

ICICI Investment Management Company Limited ICICI International Limited ICICI Bank UK PLC.

ICICI Bank Canada

ICICI Bank Eurasia Limited Liability Company

ICICI Prudential Asset Management Company Limited

ICICI Prudential Trust Limited

ICICI Eco-net Internet and Technology Fund

ICICI Equity Fund

ICICI Emerging Sectors Fund

ICICI Strategic Investments Fund

TCW / ICICI Investment Partners Limited Liability Company

ICICI Kinfra Limited

ICICI Venture Value Fund (IVVF)

I-Ven Biotech Limited

Key management personnel Sandeep Bakhshi, Managing Director and CEO

Puneet Nanda, Executive Director Madhivanan Balakrishnan, Executive Director Tarun Chugh, Chief Distribution Officer Judhajit Das, Chief - Human Resources Avijit Chatterjee, Appointed Actuary Significant influence ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity

Cum Life Insurance Scheme

ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund ICICI Prudential Life Insurance Company Limited Superannuation Scheme

Notes:

¹ Includes transactions with ICICI Securities Limited of Rs, 2,527 thousand, with ICICI Venture Funds Management Company Limited of Rs, 2,575 thousand, with ICICI Securities Primary Dealership Limited of Rs, 281 thousand, with ICICI Prudential Asset Management Company Limited of Rs, 2,154 thousand and ICICI Lombard General Insurance Company Limited of Rs, 6,293 thousand;

² Includes transactions with ICICI Home Finance Company Limited of Rs, 134,191 thousand and ICICI Securities Primary Dealership Limited Rs, 52,980 thousand;

³ Establishment and other expenditure include expenses for sharing of common services and facilities, insurance commission, insurance premium, brokerage and business support. Expense also includes Rs, 18,328 thousand for brokerage paid to ICICI Securities Limited which is included in the cost of Investments;

⁴ Includes transactions with ICICI Securities Primary Dealership Limited of Rs, 9,467,762 thousand and ICICI Lombard General Insurance Company Limited of Rs, 2,426,103 thousand;

⁵ Includes transactions with ICICI Securities Primary Dealership Limited of Rs, 5,886,048 thousand and ICICI Lombard General Insurance Company Limited of Rs, 713,039 thousand;

⁶ Includes transactions with ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Insurance Scheme of Rs, 106,247 thousand and with ICICI Prudential Life Insurance Company Limited Employees'' Group Superannuation Scheme of Rs, 8,850 thousand ;

⁷ Includes transactions with ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Insurance Scheme of Rs, 106,246 thousand, with ICICI Prudential Life Insurance Company Limited Employees'' Group Superannuation Scheme of '' 8,850 thousand and with ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund of '' 202,555 thousand;

⁸ Includes interim dividends paid to ICICI Bank Limited and Prudential Corporation Plc.

Notes:

¹ Includes investment in debentures of Rs, 1,328,114 thousand of ICICI Home Finance Company Limited and Rs, 548,432 thousand of ICICI Securities Primary Dealership Limited;

² Represents investment in equity of Rs, 110,000 thousand of ICICI Prudential Pension Funds Management Company Limited;

³ Includes interest accrued on debentures of Rs, 41,088 thousand of ICICI Home Finance Company Limited and Rs, 14,609 thousand of ICICI Securities Primary Dealership Limited;

Rs, Includes transactions with ICICI Prudential Asset Management Company Limited of Rs, 1,414 thousand, with ICICI Securities Limited of Rs, 1,095 thousand, with ICICI Lombard General Insurance Company Limited of Rs, 6,067 thousand, with ICICI Venture Limited of Rs, 2,076 thousand and ICICI Securities Primary Dealership Limited Rs, 236 thousand;

² Includes transactions with ICICI Home Finance Company Limited of Rs, 142,278 thousand and ICICI Securities Primary Dealership Limited Rs, 21,487 thousand;

³ Establishment and other expenditure include expenses for sharing of common services and facilities, insurance commission, insurance premium, brokerage and business support. Expense also includes Rs, 16,562 thousand for brokerage paid to ICICI Securities Limited which is included in the cost of Investments;

⁴ Includes transactions with ICICI Securities Primary Dealership Limited of Rs, 20,413,498 thousand and ICICI Lombard General Insurance Company Limited of Rs, 656,348 thousand;

⁵ Includes transactions with ICICI Securities Primary Dealership Limited of Rs, 4,102,298 thousand and ICICI Lombard General Insurance Company Limited of Rs, 250,188 thousand;

⁶ Represents transactions with ICICI Securities Primary Dealership Limited;

⁴ Includes advance premium of Rs, 42,025 thousand paid to ICICI Lombard General Insurance Company Limited and expenses recoverable of Rs, 6,886 thousand from ICICI Prudential Pension Fund Management Company Limited;

⁵ Other liabilities include expenses payable towards sharing of common services and facilities, insurance commission, business support and premium received in advance.

⁷ Includes transactions with ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Insurance Scheme of Rs, 16,078 thousand and with ICICI Prudential Life Insurance Company Limited Employees'' Group Superannuation Scheme of Rs, 9,006 thousand;

⁸ Includes transactions with ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Insurance Scheme of Rs, 16,034 thousand, with ICICI Prudential Life Insurance Company Limited Employees'' Group Superannuation Scheme of '' 9,006 thousand and with ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund of '' 454,424 thousand.

¹ Includes investment in debentures of Rs, 1,479,512 thousand of ICICI Home Finance Company Limited and Rs, 200,233 thousand of ICICI Securities Primary Dealership Limited;

² Represents investment in equity of Rs, 110,000 thousand of ICICI Prudential Pension Funds Management Company Limited;

³ Includes interest accrued on Debentures of Rs, 40,962 thousand of ICICI Home Finance Company Limited and Rs, 5,099 thousand of ICICI Securities Primary Dealership Limited;

13. Segmental Reporting

Income and expenses directly attributable or allocable to the segments are recorded and disclosed under the respective segments in the revenue account and profit and loss account, as applicable.

Investments and policy liabilities are disclosed in the balance sheet under the respective segments. Net fixed assets of Rs, 1,802,306 thousand (Previous year Rs, 1,982,628 thousand) are disclosed in shareholders segment. Depreciation expense has been allocated as disclosed in Note 2.14.

Segment wise information of non-cash items being amortisation of premium included in interest income on debt instruments is tabled below:

⁴ Includes advance premium of Rs, 35,279 thousand paid to ICICI Lombard General Insurance Company Limited;

⁵ Other liabilities include expenses payable towards sharing of common services and facilities, insurance commission, business support and premium received in advance.

14. Fund Balance Sheet

Fund balance sheet for each segregated linked fund is annexed herewith - Refer Annexure 1 (Page no. 83).

15. Fund Revenue account

Fund revenue account for each segregated linked fund is annexed herewith - Refer Annexure 2 (Page no. 120).

16. Annexure to the Revenue account and Additional ULIP Disclosures

Additional disclosure in respect of Unit linked portfolio as prescribed by IRDA vide circulars 054/IRDA/F&A/FEB-07 dated February 20, 2007 and IRDA/F&A/001/Apr-07 dated April 16, 2007 - Refer Annexure 3 (Page no. 137).

Provident fund

The defined benefit obligation of interest rate guarantee on exempt Provident Fund in respect of the employees of the Company has been determined for the year ended March 31, 2012 based on the Guidance Note (GN 29) on Valuation of Interest Rate Guarantees on Exempt Provident Funds under AS 15 (Revised) issued by The Institute of Actuaries of India. The defined benefit obligation of interest rate guarantee as at March 31, 2012 based on actuarial valuation is Rs, 13,543,070. The balance in the surplus/(deficit) account of the provident fund is Rs, 39,973,579 (surplus) and hence there is no liability which needs to be provided for in the books of accounts of the Company.

*Pending guidance from the Institute of Actuaries, the consulting actuaries had expressed their inability to reliably measure the defined benefit obligations of interest rate guarantee on the Exempt Provident Fund. The liability has however now been actuarially determined during the current year as per GN 29 prescribed by the Institute of Actuaries and hence the comparatives are not available for the previous year.

During the year, the Company has recognised a compensation cost of Nil (Previous year: Nil) as the intrinsic value of the options.

Had the Company followed the fair value method for valuing its options for the year, the charge to the Revenue and Profit & Loss account would have been higher by Rs, 34,322 thousand (Previous year: Rs, 90,918 thousand) and profit after tax would have been Rs, 13,807,415 thousand (Previous year: Rs, 7,985,310 thousand). Consequently Company''s basic earnings per share would have been Rs, 9.67 (Previous year: Rs, 5.59) and diluted earnings per share would have been Rs, 9.64 (Previous year: Rs, 5.57).

The weighted average price of options exercised during the year is Rs, 94.00 (Previous year: Rs, 65.18). The weighted average remaining contractual life of options outstanding at the end of the period is 5.10 years (Previous year: 6.11 years).

17. Funds for Future Appropriations (âFFAâ) - Linked

The cumulative balance of FFA as at March 31, 2012 of Rs, 3,322,629 thousand (Previous year Rs, 5,935,592 thousand) is not available for distribution to shareholders. Such amount is classified under Funds for Future appropriations - Linked, in the Balance Sheet.

18. The Micro, Small and Medium Enterprises Development Act, 2006

There are no dues payable to vendors covered by the Micro, Small and Medium Enterprises Development Act, 2006, as at March 31, 2012 (Previous year: Nil).

19. Foreign exchange gain/(loss):

The amount of foreign exchange loss (net) debited to Revenue and Profit and Loss account is Rs, 912 thousand (Previous year: loss of Rs, 1,082 thousand).

3.32 Discontinued Policy Fund

Pursuant to the IRDA''s notification dated July 1, 2010, the following details are disclosed with respect to policies discontinued either on customer request or for non-payment of premium amount within the grace period:

iv. Charges imposed on account of discontinued policies during the year ended March 31, 2012: '' 43,856 thousand (Previous year: '' 30 thousand).

20. Dividend

The Board of Directors of the Company have during the year approved and paid an interim dividend aggregating to '' 3,142,777 thousand (Previous year: Nil).

The total interim dividend appropriation for the year amounted to '' 3,652,614 thousand including corporate dividend tax of '' 509,837 thousand (Previous year: Nil).

The Board of Directors have also proposed a final dividend of '' 1,000,885 thousand (Previous year: Nil).

These dividends were declared from current year''s profit and the Company has transferred 10% of current year''s profit amounting to '' 1,384,174 thousand to general reserves as required by the Companies (Transfer of Profits to Reserves) Rules, 1975.

21. Segregation of Linked funds

Funds having similar investment objectives but with different charge structures were managed by the Company as a single fund with different plans below it. However, in accordance with circular no. IRDA/F&I/CIR/INV/173/08/2011 issued by the IRDA on July 29, 2011, the company has converted various plans offered below a single fund, as individual segregated linked funds.

22. Previous year comparatives

Previous year figures have been regrouped and reclassified wherever necessary, to conform to current year''s presentation. The details of regroupings/ reclassifications during the year are as follows:

Mar 31, 2011

1. Actuarial method and assumptions

The actuarial liability in respect of both participating and non-participating policies is calculated using the gross premium method, using assumptions for interest, mortality, expense and inflation and, in the case of participating policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation with allowances for adverse deviations. No allowance is made for expected lapses.

An explicit provision has been made to allow for additional expenses that the Company may have to incur if it were to close to new business 12 months after the valuation date.

The greater of a liability calculated using discounted cash flows and unearned premium reserves is held for the unexpired portion of the risk for the general fund liabilities of linked business and attached riders. An unearned premium reserve is held for one year renewable group term insurance.

The interest rates used for valuing the liabilities are in the range of 6.16% to 6.86% per annum. The corresponding range last year was 5.10% to 6.78% per annum.

Mortality rates used are based on the published IALM (94-96) Ultimate Mortality Table for assurances and LIC (a) 96-98 table for annuities, adjusted to reflect expected experience. Morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates supplied by reinsurers.

Expenses are provided for at current levels, in respect of renewal expenses, with no allowance for future improvements. Per policy renewal expenses for regular premium policies are assumed to inflate at 5.90% (Previous year 4.30%).

2. Encumbrances of assets

The assets of the Company are free from all encumbrances as at March 31, 2011 (Previous year: '' Nil).

3. Assets to be deposited under local laws

There are no assets required to be deposited by the Company under any local laws or otherwise encumbered in or outside India as of March 31, 2011 except investments to be held under Section 7 of the Insurance Act, 1938 as disclosed under 3.9 below.

4. Restructured Assets

There are no assets including loans subject to re-structuring (Previous year: Rs, Nil).

5. Commitments

Commitments made and outstanding for loans and investment is Rs, Nil (Previous year: Rs, Nil).

Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) is Rs, 61,269 thousand (Previous year: Rs, 59,632 thousand).

The cheques issued but not encashed by policyholder/insured category include Rs, 1,514,228 thousands pertaining to cheques which are within the validity period but not yet encashed by the policyholders as on March 31, 2011 (Previous Year Rs, 3,592,841). This amount forms part of bank reconciliation statement and consequently not considered in unclaimed amount of policyholders as disclosed under Schedule 13 - Current liabilities.

All the managerial remuneration is in accordance with the requirements of Section 34A of the Insurance Act, 1938 and as approved by IRDA.

6. Investments

-, The investments are effected from the respective funds of the policyholders or shareholders and income thereon has been accounted accordingly.

-, All investments are performing investments.

7. Real Estate - Investment Property

In accordance with the IRDA Regulations, 2002 (Preparation of Financial Statements and Auditors Report of Insurance Companies), the Company''s real estate investments have been revalued by an independent valuer as of March 2011. The value of real estate investment based on the valuation report is disclosed at revalued amount. The value of the investment property in accordance with the independent valuation of March 2011 is Rs, 854,400 thousand (Previous year: Rs, 854,400 thousand, Historical cost: Rs, 185,521 thousand).

8. Deferred taxes

Deferred tax asset is recognized on carry forward of eligible tax losses, which can be set off against future taxable income and on timing differences arising from funds for future appropriation under linked line of business. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is virtually certain to be realised.

Deferred tax asset is created on the Company''s eligible tax losses to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax can be realised. As at March 31, 2011, Rs, 1,330,807 thousand represents deferred tax asset on carry forward unabsorbed losses (Previous year: Rs, 2,041,498 thousand).

During the year, the company has changed the accounting policy in respect of allocation of tax to the participating line of business which would result in more appropriate presentation of the financial statements. According to the revised policy, tax charge/credit on surplus/deficit arising from the participating line of business will be disclosed separately in the revenue account.

Consequent to this change in accounting policy, the shareholder''s profit for the year ended March 31, 2011 has increased from Rs, 7,976,702 thousand to Rs, 8,076,228 thousand and the policyholder''s profit has decreased from Rs, 6,175,568 thousand to Rs, 6,076,042 thousand for the year ended March 31, 2011. There is no impact on the profit for last year due to this change in the accounting policy.

9. Operating lease commitments

The Company takes premises (both commercial and residential), motor vehicles, office equipments, computers, servers and modular furniture on operating lease. Certain lease arrangements provide for cancellation by either party and also contain a clause for renewal of the lease agreement. Lease payments on cancelable and non-cancelable operating lease arrangements are charged to the revenue account and the profit and loss account over the lease term on a straight line basis. The operating lease rentals charged during the year and future minimum lease payments in respect of non-cancelable operating leases as at the balance sheet date are summarised below:

The total operating lease rentals charged to Revenue account in the current year is Rs, 2,268,307 thousand (Previous year: Rs, 2,639,908 thousand).

10. Details of related parties and transactions with related parties

Related parties and nature of relationship

Nature of relationship Name of the related party

Holding company ICICI Bank Limited

Substantial interest Prudential Corporation Plc

Subsidiary ICICI Prudential Pension Funds Management Company Limited

Fellow subsidiaries ICICI Securities Limited

ICICI Venture Funds Management Company Limited

ICICI Home Finance Company Limited

ICICI Lombard General Insurance Company Limited

ICICI Trusteeship Services Limited

ICICI Securities Primary Dealership Limited

ICICI Securities Inc.

ICICI Securities Holding Inc.

ICICI Investment Management Company Limited ICICI International Limited ICICI Bank UK PLC.

ICICI Bank Canada

ICICI Bank Eurasia Limited Liability Company

ICICI Prudential Asset Management Company Limited

ICICI Prudential Trust Limited

ICICI Eco-net Internet and Technology Fund

ICICI Equity Fund

ICICI Emerging Sectors Fund

ICICI Strategic Investments Fund

TCW/ICICI Investment Partners Limited Liability Company ICICI Kinfra Limited

ICICI West Bengal Infrastructure Development Corporation Limited ICICI Venture Value Fund (IVVF)

I-Ven Biotech Limited

Key management personnel Sandeep Bakhshi, Managing Director & CEO (w.e.f. August 1, 2010)

V. Vaidyanathan, Managing Director & CEO (up to July 31, 2010)

Puneet Nanda, Executive Director

Madhivanan Balakrishnan, Executive Director

Anita Pai, Executive Vice President (up to April 1, 2010)

Tarun Chugh, Executive Vice President Judhajit Das, Chief - Human Resources Avijit Chatterjee, Appointed Actuary

Significant influence ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity

Cum Life Insurance Scheme

ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund ICICI Prudential Life Insurance Company Limited Superannuation Scheme

¹ Includes transactions with ICICI Prudential Asset Management Company Limited of Rs, 1,414 thousand, with ICICI Securities Limited of Rs, 1,095 thousand, with ICICI Lombard General Insurance Company Limited of Rs, 6,067 thousand, with ICICI Venture Limited of Rs, 2,076 thousand and ICICI Securities Primary Dealership Limited Rs, 236 thousand,

² Includes transactions with ICICI Home Finance Company Limited of Rs, 142,278 thousand and ICICI Securities Primary Dealership Limited Rs, 21,487 thousand;

³ Establishment and other expenditure include expenses for sharing of common services and facilities, insurance commission, insurance premium, brokerage and business support. Expense also includes Rs, 16,562 thousand for brokerage paid to ICICI Securities Limited which is included in the cost of Investments;

⁴ Includes transactions with ICICI Securities Primary Dealership Limited of Rs, 20,413,498 thousand and ICICI Lombard General Insurance Company Limited of Rs, 6,56,348 thousand;

⁵ Includes transactions with ICICI Securities Primary Dealership Limited of Rs, 4,102,298 thousand and ICICI Lombard General Insurance Company Limited of Rs, 2,50,188 thousand;

⁶ Represents transactions with ICICI Securities Primary Dealership Limited;

⁸ Includes transactions with ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Insurance Scheme of Rs, 16,034 thousand, with ICICI Prudential Life Insurance Company Limited Employees'' Group Superannuation Scheme of Rs, 9,006 thousand and with ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund of Rs, 454,424 thousand.

¹ Includes transactions with ICICI Prudential Asset Management Company Limited of Rs, 4,452 thousand, with ICICI Securities Limited of Rs, 4,839 thousand and ICICI Lombard General Insurance Company Limited of Rs, 6,919 thousand;

² Includes transactions with ICICI Home Finance Company Limited of Rs, 160,840 thousand and ICICI Securities Primary Dealership Limited of Rs, 20,976 thousand;

³ Establishment and other expenditure include expenses for sharing of common services and facilities, insurance commission, insurance premium, brokerage, business support and managerial remuneration. Expense also includes Rs, 15,638 thousand for brokerage paid to ICICI Securities Limited which is included in the cost of Investments;

⁴ Includes transactions with ICICI Securities Primary Dealership Limited of Rs, 5,753,043 thousand, ICICI Lombard General Insurance Company Limited of Rs, 909,769 thousand and ICICI Home Finance Company Limited of Rs, 750,000 thousand;

⁵ Includes transactions with ICICI Securities Primary Dealership Limited of Rs, 1,990,353 thousand and ICICI Lombard General Insurance Company Limited of Rs, 431,977 thousand;

⁶ Represents transactions with ICICI Securities Primary Dealership Limited of Rs, 3,066,938 thousand;

⁷ Includes transactions with ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Insurance Scheme of Rs, 236,973 thousand;

⁸ Includes transactions with ICICI Prudential Life Insurance Company Limited Employees'' Group Gratuity Cum Life Insurance Scheme of Rs, 236,793 thousand and with ICICI Prudential Life Insurance Company Limited Employees'' Provident Fund of Rs, 259,401 thousand.

¹ Includes investment in debentures of Rs, 1,769,951 thousand of ICICI Home Finance Company Limited and Rs, 204,891 thousand of ICICI Securities Primary Dealership Limited,

² Represents investment in equity of Rs, 110,000 thousand of ICICI Prudential Pension Funds Management Company Limited,

³ Includes interest accrued on Debentures of Rs, 59,571 thousand of ICICI Home Finance Company Limited,

⁴ Includes advance premium of Rs, 63,954 thousand paid to ICICI Lombard General Insurance Company Limited,

⁵ Other liabilities include expenses payable towards sharing of common services and facilities, insurance commission, business support and premium received in advance.

11. Segmental Reporting

Income and expenses directly attributable or allocable to the segments are recorded and disclosed under the respective segments in the revenue account and profit and loss account, as applicable.

Investments and policy liabilities are disclosed in the balance sheet under the respective segments. Net fixed assets of Rs, 1,982,628 thousand (Previous year Rs, 2,634,004 thousand) are disclosed in shareholders segment. Depreciation expense has been allocated as disclosed in Note 2.14.

During the year ended March 31, 2011, the company has allocated the tax charge/credit to the respective nonparticipating line of business which, as per the management, would result in more appropriate presentation of the revenue account. As per the revised allocation policy, tax charge/credit on surplus/deficit arising from the non-participating taxable line of business will be disclosed separately in the revenue account.

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