Notes to Accounts of Niva Bupa Health Insurance Company Ltd.

Mar 31, 2025

Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation as a result of past event and it
is probable that an outflow of resources will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present value and are determined based
on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the current best estimates. Contingent assets and liabilities are
not recognized.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation
that may, but probably will not, require an outflow of resources. When there is a possible obligation or
a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or
disclosure is made. Contingent asset are neither recognised nor disclosed in the financial statements.

Earnings per Share (EPS)

The basic earnings per share is calculated by dividing the net profit after tax by weighted average number
of equity shares outstanding during the reporting period. Number of equity shares used in computing
diluted earnings per share comprises the weighted average number of shares considered for basic earnings
per share and also weighted average number equity shares which would have been issued on conversion
of all dilutive potential shares. In computing diluted earnings per share only potential equity shares that are
dilutive are considered. Dilutive potential equity shares are deemed to be converted as at the beginning of
the period unless issued at a later date. The dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value. Dilutive potential equity shares are determined
independently for each period presented.

Leases

Lease of assets/software under which all the risks and benefits of ownership are effectively retained by
the lessor is classified as Operating Leases. The total lease rentals, including escalation, are recognized
in the Revenue account or/and Profit and Loss account, as the case may be, on a straight line basis over
the period of the lease. Initial direct costs incurred specifically for an operating lease are charged to the
Revenue Account.

Foreign Currency Transactions

Initial recognition: Foreign currency transactions are recorded in Indian Rupees, by applying to the foreign
currency amount the exchange rate between the Indian Rupee and the foreign currency at the date of the
transaction.

Conversion: Foreign currency monetary items are translated using the exchange rate prevailing at the
reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a
foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary
items, which are measured at fair value or other similar valuation denominated in a foreign currency, are
translated using the exchange rate at the date when such value was determined.

Exchange differences: Exchange differences are recognized as income or as expenses in the period in
which they arise.

Allocation of Operating Expenses

For Operating Expenses (Schedule 4), expenses are allocated in Health, Personal Accident and Travel on
the basis of gross direct premium.

Rationale of Expenses allocation between Revenue Account and Profit & Loss Account

Expenses pertaining to Policyholders have been shown in Revenue Account as per the limit prescribed
in Insurance Regulatory and Development Authority of India (Expenses of Management, including
Commission, of Insurers) Regulations, 2024 and excess over the limit has been debited in the Profit &
Loss Account.

Share issue expenses

Share issue expenses are adjusted against share premium account.

Goods and Services Tax

Goods and Services Tax ("GST”) collected is considered as a liability against which GST paid for eligible
inputs services or goods, to the extent claimable, is adjusted and the net liability is remitted to the
appropriate authority as stipulated. Unutilized credits, if any, are carried forward for adjustment in
subsequent periods. GST paid for eligible input services not recoverable by way of credits are recognized
in the Revenue account as expense.

Receipts and payments account

i. Receipts and payments account is prepared and reported as per AS-3 Cash flow statements using
the Direct Method, in conformity with para 2(a)(i) of the Master Circular on Actuarial, Finance and
Investment Functions of Insurers dated May 17, 2024, issued by the IRDAI.

ii. Cash and cash equivalents for the purpose of statement of receipts and payments include cash
and cheques in hand, deposits with banks, bank balances, liquid mutual funds and other short term
investments with original maturity of three months or less which are subject to insignificant risk of
changes in value.

iii. The components of cash and cash equivalents are presented with reconciliation of the amounts in its
cash flow statement with the equivalent items reported in the Balance Sheet.

Note:

1. The Company has disputed the demand raised by Income Tax Authorities of W 9,879 Lakhs (previous
year W Nil Lakhs) the appeals of which are pending before the appropriate authorities. This includes
income tax demand related to Assessment Year 2020-21, 2021-22 and 2022-23. The Company does not
expect the outcome of these proceedings to have a material adverse effect on its financial statements
as at March 31, 2025.

2. Includes GST refund of W 2,213 Lakhs (previous year W Nil) rejected by Goods & Services Tax authorities.
Company is in process of evaluating necessary legal recourse against the same.

3. The Company has disputed the demand raised by Income Tax Authorities of W 1,158 Lakhs the appeals
of which are pending before the appropriate authorities. This includes income tax demand related

to Assessment Year 2013-14, 2014-15 and 2016-17 in respect of which the Company has received the
favorable appellate order, which is pending for effect to be given by Assessing Authority. The Company
does not expect the outcome of these proceedings to have a material adverse effect on its financial
statements as at March 31, 2024.

4. Includes demand of W 3,318 Lakhs from Goods & Services Tax authorities, for which show cause/
demand notice has been issued by the department and the Company has filed the reply accordingly.

Pending Litigations

The Company''s pending litigations comprise of claims against the Company primarily by 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 as at March
31, 2025.

2. Actuarial Assumptions

The appointed actuary has certified to the Company that actuarial estimates for Premium deficiency
reserve, IBNR (including IBNER) and estimate of Loss ratio for determining profit commission on re¬
insurance treaties are in compliance with the Insurance Regulatory and Development Authority of India
(Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 and the guidelines issued by
the Institute of Actuaries of India.

Depending upon the Business segment, a suitable actuarial method like Basic Chain Ladder Method,
Bornhuetter Ferguson Method, Expected Ultimate Loss Ratio or a mixture of these have been used for
IBNR/IBNER calculations.

The Company’s Appointed Actuary has determined valuation assumptions in respect of ''Claims incurred
but Not Reported’ and ''Claims incurred but Not Enough Reported’ ''(IBNR including IBNER) amounting to W
25,437 Lakhs (net) (Previous year W 22,393 Lakhs (net)) that conform with Regulations issued by the IRDAI
and professional guidance notes issued by the Institute of Actuaries of India.

a) As at March 31, 2025, the Company has made a provision of W 11,914 Lakhs (net) (Previous year W 7,736
Lakhs (net)) towards litigation reserve including incidental claims based on actuarial estimates and the
same is included as a part of IBNR/IBNER reserves.

b) As at March 31, 2025, the Company has provided appropriate IBNR/IBNER with respect to multiyear
policies including policies exceeding 4 years.

3. Encumbrances on Assets

The assets of the Company are free from all encumbrances. The Company has all assets within India.

4. Capital Commitments

Estimated amount of commitments pertaining to contracts remaining to be executed in respect of fixed
assets (net of advances) is W 2,723 Lakhs (previous year: W 479 Lakhs).

5. Other Commitments

Commitment in respect of loans as on March 31, 2025 is W Nil (previous year: W Nil) and Investment is W Nil
(previous year: W Nil)

*Separate Fixed Deposits has been earmarked for payment of unclaimed amount of policyholder disclosed
under head Schedule 12- Advances and Other Assets. This amount includes Interest on unclaimed amount
of Policyholders amounting to W 60 Lakhs (previous year W 58 Lakhs)

12. Premium Deficiency Reserve

The Appointed Actuary has reviewed the Unearned premium reserve (UPR) posted in the Financial
statements against the estimated liability of the Company under unexpired obligations (including claims
and claims related expenses) towards policyholders (URR) for all business segments. The UPR provided in
the financials is sufficient to the cover the URR at the Company level thus; no premium deficiency reserve
has been created.

13. Investments

a) There are no contracts outstanding in relation to Purchases where deliveries are pending and Sales
where payments are overdue respectively.

b) The Company does not have any investment in Real Estate as at March 31, 2025 and March 31, 2024.

c) All investments are made in accordance with Insurance Act, 1938 and the Insurance Regulatory and
Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations,
2024, except:

1. Commercial papers issued by ILFS Ltd aggregating to W 3,000 Lakhs that remained unpaid as on
March 31, 2025. In accordance with IRDAI regulations, the Company had made a 100% provision of
W3,000 Lakhs and presented as "Other Receivables”.

2. Bonds issued by Reliance Capital aggregating to W 1,000 Lakhs. The Company has recovered W
568 Lakhs as an interim settlement. In accordance with IRDAI regulations, the Company has made
provision for remaining amount of W 432 Lakhs, that remained unpaid as on March 31, 2025, and
presented as "Other Receivables”.

3. Bonds issued by IFIN aggregating to W 3,000 Lakhs. The Company has recovered W 1,002 Lakhs as
an interim settlement. In accordance with IRDAI regulations, the Company has made provision for
remaining amount of W 1,998 Lakhs, that remained unpaid as on March 31, 2025, and presented as
"Other Receivables”.

14. Managerial Remuneration

A. Qualitative Disclosures

i. Information relating to the composition and mandate of the nomination and remuneration
committee: Nomination and Remuneration Committee is the Committee of Board of Directors
of the Company, constituted in accordance with the provisions of Section 178 of the Companies
Act, 2013.

As on March, 31, 2025, the composition of Nomination and Remuneration Committee has been
as follows:

• Ms. Geeta Dutta Goel - Chairperson of NRC, Independent Director

• Mr. Mohit Gupta - Independent Director

• Mr. Chandrashekhar Bhaskar Bhave - Independent Director

• Mr. David Martin Fletcher - Non - Executive Director

ii. Information relating to the design and structure of remuneration policy and key features and
objective of the policy: The level and composition of remuneration is reasonable, market
competitive and sufficient to attract, retain and motivate the best talent for positions of the
Directors, Key Managerial Persons (KMPs) and Senior Managerial Persons (SMPs). The relationship
of remuneration is linked to performance. Remuneration involves a balance between Fixed and
Variable pay, reflecting short and long-term performance objectives appropriate to the Measure of
Success (MOS) achievement by the Company.

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

Nomination and Remuneration Committee (NRC) include following parameters as measurements
to the annual performance evaluation of Directors, Key Managerial Persons (KMPs) and Senior
Managerial Persons (SMPs).

• Remuneration is adjusted for all types of risk

• Remuneration outcomes are symmetric with risk outcomes, and

• Remuneration payouts are sensitive to the time horizon of the risk

• The mix of cash, equity and other forms of remuneration must be consistent with risk alignment

• Credit, Market and Liquidity risks

Among other things, Nomination & Remuneration Committee and the Board also consider
following for assessing performance and suitable risk adjustments.

1. Persistency

2. Solvency

3. Grievance Redressal

4. Expenses of Management

5. Claim settlement

6. Claim repudiations

7. Overall Compliance status

8. Overall financial position such as Net-Worth Position of Insurer, Asset under Management
(AUM) etc.

In matters related to risk and reward, the NRC also considers advice from the members of the
Risk Committee of the Company, as appropriate before making its final determinations and
recommendations to the Board.

iv. Description of the ways in which the insurer seeks to link performance, during a performance
measurement period, with levels of remuneration: Key Results Areas (KRAs) are established for
each member that will be derived from the Guidelines and overall strategy of the organization
and are incorporated as directives as provided by the Board. The performance against these
Key Results Areas (KRAs) are reviewed by the Nomination and Remuneration Committee (NRC)
for MD & CEO, other executive Director if any and Key Managerial Persons (KMPs) and Senior
Managerial Persons (SMPs). Basis the above evaluation, a final rating shall be provided to the
concerned Director / Key Managerial Persons (KMPs) along with fixed pay revision and variable
pay, as applicable.

ii. Remuneration to Non-Executive Directors

During the year ended March, 31, 2025, the Independent Directors were paid sitting fees of
W 1,00,000 per meeting of the Board and committee thereof, excluding Corporate Social
Responsibility Committee. Details of remuneration of Independent Directors for the year ended
March, 31, 2025, is given below:

Managerial remuneration amounting to W 400 lakhs (W 400 lakhs for previous year) for the year ended
March 31, 2025 for Managing Director has been charged to Revenue Accounts and balance has been
transferred to Profit and Loss account. Perquisites are calculated as per Income Tax Rules, 1962. The
CEO is granted options pursuant to the Company’s Employee Stock Option Scheme and above figures
does not include perquisites calculated on exercise of such options.

16. Operating Lease Commitments

The Company has taken on lease office premises under various agreements with various expiration dates
extending up to nine years. Lease payments made under operating lease agreements have been fully
recognized in the books of accounts. The lease rental charged under operating leases during the current
year and maximum obligation on such leases at the balance sheet date are as follows:

C. Debenture Redemption Reserve

The provisions of Section 71 of the Companies Act, 2013 read with Rule 18 of the Companies (Share
Capital and Debentures) Amendment Rules, 2014 are applicable to the Company. However, as per
Rule 18, Debenture Redemption Reserve shall be created out of profits of the Company available
for payment of dividend, since the Company’s equity shares are listed as at March 31, 2025 and the
Company does not have profits which are available for payment of dividend, hence no Debenture
Redemption Reserve is being created.

20. Segment Information

A. Business Segments

The Company’s primary reportable segments are business segments, which have been identified
in accordance with the Regulations. Premium earned, claims incurred, commission and operating
expenses have been disclosed at segment level in the financial statements.

Due to inherent complexities, segment assets and liabilities have been identified to the extent possible.

B. Defined Benefit Plans - Gratuity

The gratuity liability arises on retirement, withdrawal, resignation or death of an employee. The
aforesaid liability is calculated on the basis of actuarial valuation as per the projected unit credit
method. The Gratuity plan has been funded through a policy taken from Axis Max Life Insurance
Company Limited. Disclosure as per AS-15 (Revised) on ''Employee Benefits’ is as under:

25. Expenses of Management

During the year ended March 31, 2025, the Company has received the forbearance approval for exceeding
the Expenses of Management (EOM) over the allowable limit for FY 2022-23 and FY 2023-24. The
Company has also submitted the quarterly EOM plan with Insurance Regulatory and Development
Authority of India ("IRDAI”) on March 26, 2025 to bring the EOM within the prescribed limits by FY 2025¬
26 and also submitted EOM forbearance application to GI Council on April 25, 2025. Further, on the basis
of discussions with IRDAI, the Company has computed expenses of management ("EOM”) in accordance
with accounting methodology applied before Master Circular on Actuarial, Finance and Investment
Functions of Insurers dated May 17, 2024 read with clarification dated October 18, 2024 issued by IRDAI for
multi-year policies and related commissions income and expenses was made applicable. The grant of such
forbearance is at IRDAI’s discretion and the impact of the same on the financial statements will depend
on the future developments. The Company is in discussion with IRDAI and in accordance with Expense of
Management Regulations 2024, a sum of 14,143 lakhs, which is in the excess of expenses of management
over the allowable limit, has been transferred from Revenue Account to Profit and Loss Account for the
year ended March 31, 2025. The Company’s EOM ratio for the year ended March 31, 2025 is 37.41%.

26. Sector Wise Business

Disclosure as per Schedule II Part II Point iii (3) of the Insurance Regulatory and Development Authority of
India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024

The total Gross Written Premium for the financial year is W 6,76,223 lakhs (Previous year W 5,60,757 lakhs),
out of which the bifurcation of Rural and social sector business is as under:

27. Micro Small and Medium Enterprises

As at March 31, 2025, there is no Micro, Small and Medium Enterprise to which the Company owes dues,
which are outstanding for more than 45 days. In respect of MSME creditors, where there have been delays
in payments during the year, no interest is paid/payable as the payment was made within the agreed credit
period. This information as required to be disclosed under Micro, Small and Medium Enterprises
Development Act, 2006 has been determined to the extent such parties have been identified on the basis
of information available with the Company.

31. Corporate Social Responsibility

As required under Section 135 of the Companies Act, 2013 and Master Circular on Corporate Governance
for Insurers, 2024, the Board of the Company has a "Corporate Social Responsibility Committee” (CSR
Committee) which comprises of three members of the Board. The CSR Committee is primarily responsible
for formulating and recommending to the Board of Directors from time to time the CSR activities and
the amount of expenditure to be incurred on the activities pertaining and monitoring CSR Projects. The
Company has formulated the Corporate Social Responsibility Policy which has been adopted by the CSR
Committee and Board. As the Company has registered a negative profit based on the preceding three
years’ average net profit, the Company has no obligation towards CSR activities during year ended March

31. 2025.

32. Provision for Free Look period

The provision for Free Look period is W 159 lakhs (previous year W 86 lakhs), as certified by the
Appointed Actuary.

33.

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

B. As at March 31, 2025, the Company did not have any outstanding long-term derivative contracts
(previous year W Nil).

34. Foreign exchange gain/loss

The foreign exchange loss (net) debited to Profit and Loss Account for the year ended March 31, 2025 is W
17 lakhs (previous year W 16 lakhs).

35. Investor Education & Protection Fund

For the year ended March 31, 2025 the Company has transferred W Nil (previous year W Nil) to the Investor
Education & Protection Fund.

36.

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the Company to or in any other persons or entities, including foreign
entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.

37.

No funds have been received by the Company from any persons or entities, including foreign entities
("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company
shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.

38.

The Company has not declared or paid any dividend during the year ended March 31, 2025 and March
31, 2024.

39. Risk Management Architecture

The Company is exposed to a variety of risks associated with its insurance business operations and
the investment portfolio. To help define the level of risk that the Company is willing to take, a set of
Risk Appetite Statements have been defined which state in both quantitative and qualitative terms the
Company’s desired risk profile / overall level of risk exposure. These risk appetite statements are reviewed
and approved by the Board to ensure alignment of the Company’s risk strategy to the business plan
approved by the Board.

42. Share Capital and Allotment

The Company has completed Initial Public Offer (IPO) of equity shares of face value W10 each at an
issue price of W74 per equity share, comprising of fresh issue of 10,81,08,108 shares and offer for sale of
18,91,89,188 shares by ''selling share holders''. The equity shares of the Company were listed on National
Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on November 14, 2024.

During the year ended March 31, 2025, the Company has allotted 1,93,83,695 (Previous year 1,40,47,354)
equity shares pursuant to exercise of employee stock options granted.

43.

Pursuant to an inquiry by Directorate General of GST Intelligence (DGGI) relating to certain input credit
availed by the Company, it has provided all information and clarifications to DGGI. As directed by DGGI
authorities, the Company has paid W 2,500 Lakhs under Section 74(5) of the CGST Act 2017. The Company
received order from GST Authorities and reduced demand from W 2,928 lakhs to Rs 287 lakhs and penalty
amounting to W 287 lakhs. The Company has decided not to appeal against the same and paid the penalty/
interest amount of W 237 lakhs. The Company has debited W 524 lakhs (demand including penalty/interest)
to profit and loss A/c and filed application of refund of W 2,213 lakhs which is rejected by the department
considering it as time barred. The Company has shown this amount in Contingent Liability.

44. Employee stock option plan

The Company had introduced "Employee Stock Option Plan - 2020 (ESOP 2020)” in the financial year
2020-21 effective from 01st June 2020 (date of grant) and "Employee Stock Option Plan - 2024 (ESOP
2024)” in the financial year 2023-24 effective from December 13, 2023. Under the ESOP Scheme 2020 &
2024 the Company has given options to eligible Employees to acquire equity shares in the Company. The
options have been granted under various tranches.

For options outstanding, the exercise price ranges between W 10 to W 67.19 and the weighted average price
of options exercised during the year ended on March 31, 2025 is W 12.96 (Previous year: W 10.93)

In accordance with the "Securities and Exchange Board of India (Share Based Employee Benefits)
regulations 2014” and the "Guidance Note on Accounting for Share-based Payments”, the cost of equity
settled transactions is measured using the intrinsic value method. Compensation cost is recognized as
deferred stock option expense and is charged to Revenue Account on straight line basis over the vesting
period of options.

45. Disclosure of Fire and Marine Revenue accounts

As the Company operates in single insurance business class viz. health insurance business, the reporting
requirements as prescribed by IRDAI with respect to presentation of Fire and Marine insurance revenue
accounts are not applicable.

46. Taxation

In the absence of virtual certainty regarding availability of sufficient future taxable Income to set off
the taxable accumulated business losses in future, within, the deferred tax assets on account of timing
differences as stipulated in Accounting Standard 22 on "Accounting for Taxes on Income” has not been
recognized. Further, the Government of India on December 12, 2019 vide the Taxation Laws (Amendment)
Act 2019 inserted a new section 115BAA in the Income Tax Act 1961, which provides an option to the
Company for paying Income Tax at reduced rates as per provisions/conditions defined in said section and
the Company has opted for the same.

47. Code on Social Security, 2020

The Indian Parliament has approved the Code on Social Security, 2020, which would impact the
contributions by the Company towards Provident Fund and Gratuity. The effective date from which the
changes are applicable is yet to be notified and the final rules are yet to be framed. The Company will carry
out an evaluation of the impact and record the same in the financial statements in the period in which the
code becomes effective and related rules are published.

48.

In accordance with the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulation, 2024
and Master circular thereon dated May 17, 2024 and subsequent clarification dated October 18, 2024, with
effect from October 1, 2024 the Company has given the effect to recognize gross written premium on a
1/n basis where "n” denotes the policy duration and commission expenses paid and commission income
accrued on such recorded gross written premium for applicable long-term products. This has resulted in a
decrease in gross written premium by ? 64,450 lakhs and net decrease in commission by ? 5,373 lakhs, and
related effect in operating profit for the year ended March 31, 2025.

49.

The Company has used accounting software for maintaining its books of account which has a feature of
recording audit trail (edit log) and the same has operated throughout the year for all relevant transactions
recorded in the software except that audit trail feature is not enabled for direct changes to data in
Credence when using certain access rights. Further, no instance of audit trail feature being tampered with
was noted by the Company in respect of accounting software(s) where the audit trail has been enabled.

The Company has enabled audit trail feature from February 28, 2024 for Beacon, from March 03, 2024 for
Maximus, from March 04, 2024 for Phoenix and from July 03, 2023 for Credence. The audit trail has been
preserved by the Company as per the statutory requirements for record retention from the above date
of enablement of audit trail for the respective accounting software. The Company has effective control
mechanism with respect to access and database management which creates logs and monitors any change
to database, including direct data change and object level changes to database. Also, User Interface (UI)
based access and activities on the server, including database are being monitored through PAM system
(Privilege Access Management). Access to database and server are only allowed through PAM and
restricted to application administrator through strict access controls and monitoring process.

50. Ind AS Implementation

During the Year Ind AS 117-Insurance Contracts have been notified by MCA. Ind AS (including Ind AS 117)
will be applicable to insurance companies once notified by the IRDAI. IRDAI through its communication
dated January 10, 2025 have asked insurers to submit proforma financial statements for FY 2023-24 and
FY 2024-25 within specified phases & timelines. These proforma financial statements will facilitate the
impact assessment of Ind AS on financial statements and will assist in policy choices. As per the above-
mentioned communication, the Company was in Phase-3 & need to submit these proforma financial
statements for FY 2023-24 and FY 2024-25 by December 31, 2025 and June 30, 2026 respectively. The
Company opted for Phase-1 and ready to submit the proforma financial statements for FY 2023-24 and FY
2024-25 by June 30, 2025 and December 31, 2025 respectively.

51. Regrouping Statement

Previous year figures have been regrouped / reclassified wherever necessary and the effect of that is
given in Underwriting balance ratio, Expenses of Management to Gross Direct Premium Ratio, Expense of
Management to Net Written Premium Ratio, Operating Profit Ratio and Combined Ratio, while the Profit
after tax will remain same.

As per our audit report of even date.

For S.R. Batliboi & Co. LLP For T.R. Chadha & Co. LLP

Chartered Accountants Chartered Accountants

Shrawan Jalan Neena Goel

Partner Partner

Membership Number: 102102 Membership Number: 057986

Place: Mumbai Place: New Delhi

Date: May 07, 2025 Date: May 07, 2025

For and on behalf of the Board of Directors of Niva Bupa Health Insurance Company Limited

Sridhar Srinivasan Rajat Sharma

Director Company Secretary

DIN: 07240718 Membership No. FCS7069

Krishnan Ramachandran Vishwanath Mahendra

Managing Director & Chief Executive Officer Chief Financial Officer

DIN: 08719264

Place: New Delhi
Date: May 07, 2025

---

Mar 31, 2024

(I) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation as a result of past event
and it is probable that an outflow of resources will be required to settle the obligation, in
respect of which a reliable estimate can be made. Provisions are not discounted to present
value and are determined based on best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimates. Contingent assets and liabilities are not recognized.

A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources. When there is a
possible obligation or a present obligation in respect of which the likelihood of outflow of

resources is remote, no provision or disclosure is made. Contingent asset are neither
recognised nor disclosed in the financial statements.

(m) Earnings per Share (EPS)

The basic earnings per share is calculated by dividing the net profit after tax by weighted
average number of equity shares outstanding during the reporting period. Number of equity
shares used in computing diluted earnings per share comprises the weighted average
number of shares considered for basic earnings per share and also weighted average number
equity shares which would have been issued on conversion of all dilutive potential shares. In
computing diluted earnings per share only potential equity shares that are dilutive are
considered. Dilutive potential equity shares are deemed to be converted as at the beginning
^ of the period unless issued at a later date. The dilutive potential equity shares are adjusted
for the proceeds receivable had the shares been actually issued at. fair value. Dilutive
potential equity shares are determined independently for each period presented.

(n) . Leases .

Lease of assets/software under which all the risks and benefits of ownership are effectively
retained by the lessor is classified as Operating Leases. The total lease rentals, including
escalation, are recognized in the Revenue account or/and Profit and Loss account, as the
case may be, on a straight line basis over the period of the lease. Initial direct costs incurred
specifically for an operating lease are charged to the Revenue Account.

(o) Foreign Currency Transactions

Initial recognition: Foreign currency transactions are recorded in Indian Rupees, by applying
to the foreign currency amount the exchange rate between the Indian Rupee and the foreign
currency at the date of the transaction.

Conversion: Foreign currency monetary items are translated using the exchange rate
prevailing at the reporting date. Non-monetary items, which are measured in terms of
historical cost denominated in a foreign currency, are reported using the exchange rate at
the date of the transaction. Non-monetary items, which are measured at fair value or other
similar valuation denominated in a foreign currency, are translated using the exchange rate
at the date when such value was determined.

Exchange differences: Exchange differences are recognized as income or as expenses in the
period in which they arise.

(p) Allocation of Operating Expenses

For Operating Expenses (Schedule 4), expenses are allocated in Health, Personal Accident

and Travel on the basis of gross written premium.

(q) Rationale of Expenses allocation between Revenue Account and Profit & Loss Account

Expenses pertaining to Policyholders have been shown in Revenue Account as per the limit
prescribed in Expenses of Management Regulations 2023 and excess over the limit has been
debited in the Profit & Loss Account.

(r) Goods and Service Tax

-- Goods and Service Tax ("GST") collected is considered as a liability against which GST paid
for eligible inputs services or goods, to the extent claimable, is adjusted and the net liability
is remitted to.the''appropriate authority as stipulated. Unutilized .credits, if any, are carried
forward for adjustment in subsequent periods. GST paid for eligible input services not
recoverable by way of credits are recognized in the Revenue account as expense.

(s) Receipts and payments account

(i) Receipts and payments account is prepared and reported as per AS-3 Cash flow
statements using the Direct Method, in conformity with para 2.2 of the Master Circular
on Preparation of Financial Statements - General Insurance Business dated October 5,

2012, issued by the IRDA.

(ii) Cash and cash equivalents for the purpose of statement of receipts and payments
include cash and cheques in hand, deposits with banks, bank balances, liquid mutual
funds and other short term investments with original maturity of three months or less
which are subject to insignificant risk of changes in value.

(iii) The components of cash and cash equivalents are presented with reconciliation of the
amounts in its cash flow statement with the equivalent items reported in the Balance
Sheet.

- . Note: - ''•

(1) The Company has disputed the demand raised by Income Tax Authorities of Rs. 1,15,809 thousands (previous year
. ’ Rs. 1,15,809 thousands) the appeals of which are pending before the appropriate authorities. This includes income

tax demand related to Assessment Year 2013-14 and 2014-15 in respect of which the Company has received the
favourable appellate order, which is pending for effect to be given by Assessing Authority. The Company does not
expect the outcome of these proceedings to have a material adverse effect on its financial statements as at March 31,
2024.

(2) Includes demand of Rs. 3,31,836 thousands (previous year Rs. 4,363 thousands) from Goods & Service Tax
authorities, for which show cause/demand notice has been issued by the department and the Company has filed the
reply accordingly.

Pending Litigations

The Company''s pending litigations comprise of claims against the Company primarily by 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 as at March 31, 2024.

2. Actuarial Assumptions

The appointed actuary has certified to the Company that actuarial estimates for Premium deficiency reserve and IBNR
(including IBNER) are in compliance with the IRDA (Assets, Liabilities and Solvency Margin of General Insurance Business)
Regulations 2016 and the guidelines issued by the Institute of Actuaries of India.

Depending upon the Business segment, a suitable actuarial method like Basic Chain Ladder Method, Bornhuetter
Ferguson Method, Expected Ultimate Loss Ratio or a mixture of these have been used for IBNR/IBNER calculations.

The Company''s Appointed Actuary has determined valuation assumptions in respect of ''Claims incurred but Not
Reported'' and ''Claims incurred but Not Enough Reported'' ''(IBNR including IBNER) amounting to Rs. 22,39,323 thousands
(net) (Previous year Rs. 22,76,099 thousands (net)) that conform with Regulations issued by the IRDAI and professional
guidance notes issued by the Institute of Actuaries of India.

a. As at March 31, 2024, the Company has made a provision of Rs. 7,73,626 thousands (net) (Previous year

Rs. 7,37,159 thousands (net)) towards litigation reserve including incidental claims based on actuarial
^5^~^s^mates and the same is included as a part of IBNR/IBNER reserves. -

b. As at March 31, 2024, the Company has provided appropriate IBNR/IBNER with respect to multiyear

policies including policies exceeding 4 years.

3. Encumbrances on Assets

The assets of the Company are free from all encumbrances. The Company has all assets within India.

4. Capital Commitments

Estimated amount of commitments pertaining to contracts remaining to be executed in respect of fixed assets {net of
advances) is Rs. 47,924 thousand (previous year: Rs. 1,00,761 thousand).

5. Other Commitments

Commitment in respect of loans as on March 31, 2024 is Rs. Nil (previous year: Rs. Nil) and Investment is Rs. Nil (previous
year: Rs. Nil)

(B) Claims settled but not paid to Policyholder/lnsured for more than six months is Rs. Nil (previous year: Rs. Nil).

(C) Claims where the claim payment period exceeds four years:

As per "master circular on preparation of financial statements general insurance business October-2012", the claims
made in respect of contracts where claims payment period exceeds four years, are required to be recognized on
actuarial basis. Accordingly appointed Actuary has certified the fairness of the liability assessment, assuming ''NIL''
discount rate.

In this context, no claims have been valued on the basis of a contractually defined benefit amount payable in monthly
installments.

*Separate Fixed Deposits has been earmarked for payment of unclaimed amount of policyholder disclosed under head
Schedule 12- Advances and Other Assets. This amount includes Interest on unclaimed amount of Policyholders
amounting to Rs. 5,794 thousand (previous year Rs. 5,812 thousand)

12. Premium Deficiency Reserve , .

The Appointed Actuary has reviewed the Unearned premium reserve (UPR) posted in the Financial statements against the
estimated liability of the Company under unexpired obligations (including claims and claims related expenses) towards
policyholders (URR) for all business segments. The UPR provided in the financials is sufficient to the cover the URR at the
Company level thus; no premium deficiency reserve has been created.

13. investments

a. There are no contracts outstanding in relation to Purchases where deliveries are pending and Sales where
payments are overdue respectively.

b. The Company does not have any investment in Real Estate as at March 31, 2024 or March 31, 2023.

c. All investments are made in accordance with Insurance Act, 1938 and IRDAI (Investment) Regulations, 2016,
except:

1. Commercial papers issued by ILFS Ltd aggregating to Rs. 3,00,000 thousand that remained unpaid as on
March 31, 2024. In accordance with IRDAI regulations, the Company had made a 100% provision of
Rs.3,00,000 thousand and presented as "Other Receivables".

2. Bonds issued by Reliance Capital aggregating to Rs. 1,00,000 thousand that remained unpaid as on March
31, 2024. In accordance with IRDAI regulations, the Company had made a 100% provision of Rs. 1,00,000
thousand and presented as "Other Receivables".

3. Bonds issued by IFIN aggregating to Rs. 3,00,000 thousand. The Company has recovered Rs. 67,576
thousand as an interim settlement. In accordance with IRDAI regulations the Company has made provision
for remaining amount of Rs. 2,32,424 thousand, that remained unpaid as on March 31, 2024, and presented
as "Other Receivables".

14. Managerial Remuneration
A) Qualitative Disclosures

(i) Information relating to the composition and mandate of the nomination and remuneration committee.
Nomination and Remuneration Committee is the Committee of Board of Directors of the Company, constituted
in accordance with the provisions of Section 178 of the Companies Act, 2013.

During FY 2024, the composition of Nomination and Remuneration Committee has been as follows:

• Mr. Pradeep Pant-Chairman of NRC, Independent Director

• Mr. Dinesh Kumar Mittal - Independent Director

• Mr. Chandrashekhar Bhaskar Bhave -Independent Director

• Mr. David Fletcher- Non- Executive, Non-Independent Director

• Mr. Maninder Singh Juneja Non- Executive, Non-Independent Director

• Mr. Divya Sehgal - Non- Executive, Non-Independent Director (upto 03rd January 2024)

(ii) Information relating to the design and structure of remuneration policy and key features and objective of the
policy: The level and composition of remuneration is reasonable, market competitive and sufficient to attract,
retain and motivate the best talent for positions of the Directors, Key Managerial Persons (KMPs) and Senior
Managerial Persons (SMPs). The relationship of remuneration is linked to performance. Remuneration involves
a balance between Fixed and Variable pay, reflecting short and long-term performance objectives appropriate
to the Measure of Success (MOS) achievement by the Company.

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

Nomination and Remuneration Committee (NRC) include following parameters as measurements to the annual
performance evaluation of Directors, Key Managerial Persons (KMPs) and Senior Managerial Persons (SMPs).

• Remuneration is adjusted for all types of risk

• Remuneration outcomes are symmetric with risk outcomes, and

• Remuneration payouts are sensitive to the time horizon of the risk

• The mix of cash, equity and other forms of remuneration must be consistent with risk alignment

• Credit, Market and Liquidity risks

Among other things, Nomination & Remuneration Committee and the Board also consider following for
assessing performance and suitable risk adjustments.

1. Persistency

2. Solvency

3. Grievance Redressal

4. Expenses of Management

5. Claim settlement

6. Claim repudiations

7. Overall Compliance status

8. Overall financial portion such as Net-Worth Position of Insurer, Asset under Management (AUM) etc.

In matters related to risk and reward, the NRC also considers advice from the members of the Risk Committee
of the Company, as appropriate before making its final determinations and recommendations to the Board.

(iv) Description of the ways in which the insurer seeks to link performance, during a performance measurement
period, with levels of remuneration: Key Results Areas (KRAs) are established for each member that will be
derived from the Guidelines and overall strategy of the organization and are incorporated as directives as
provided by the Board. The performance against these Key Results Areas( KRAs) are reviewed by the Nomination

and Remuneration Committee (NRC) for MD & CEO, other executive Director if any and Key Managerial Persons
(KMPs) and Senior Managerial Persons (SMPs). Basis the above evaluation, a final rating shall be provided to the

concerned Director/ Key Managerial Persons (KMPs) along with fixed pay revision and variable pay, as applicable.

The provisions of section 71 of the Companies Act, 2013 read with Rule 18 of the Companies (Share Capital and
Debentures) Amendment Rules, 2014 are applicable to the Company. However, as per rule 18, Debenture Redemption
Reserve shall be created out of profits of the Company available for payment of dividend, since the Company does not
have profits which are available for payment of dividend hence no Debenture Redemption Reserve is being created.

*Outsourcing expenses have been calculated basis on the Outsourcing guidelines issued by IRDAI. The outsourcing
expenses are inclusive of GST

25, Expenses of Management

The Company has filed an application for forbearance for exceeding the Expenses of Management (EOM) over the
allowable limit for FY 2023-24 with IRDAI on February 23, 2024 and April 08, 2024. The Company has also submitted
the glide path and convergence plan on June 21, 2023 to bring the EOM within the prescribed limits by FY 2025-26.
The application of forbearance is under consideration by IRDAI and approval for the same is yet to be received. The
grant of such forbearance is at IRDAI''s discretion and the impact of the same on the financial statements will depend
on the future developments. The Company believes that they shall get this approval and in accordance with Expense
of Management Regulations 2023, a sum of Rs 21,64,507 thousands, which is in the excess of expenses of management
over the allowable limit, has been transferred from Revenue Account to Profit and Loss account for the year to date
ended March 31, 2024.

26. Sector Wise Business

Disclosure as per Schedule B Part II Point c (3) of the Insurance Regulatory and Development Authority of India
¦ (preparation of financial statements and auditor''s report of insurance companies) regulations, 2002.

3) Required Solvency Margin Ratio (times) is 1.50.

31. Corporate Social Responsibility

As required under Section 135 of the Companies Act, 2013 and IRDAI Corporate Governance Guidelines 2016, the Board
of the Company has a "Corporate Social Responsibility Committee" (CSR Committee) which comprises of four members
of the Board. The CSR Committee is primarily responsible for formulating and recommending to the Board of Directors
from time to time the CSR activities and the amount of expenditure to be incurred on the activities pertaining and
monitoring CSR Projects. The Company has formulated the Corporate Social Responsibility Policy which has been
adopted by the CSR Committee and Board. As the Company has registered a negative profit based on the preceding
three years'' average net profit, the Company has no obligation towards CSR activities during FY 2023-24.

32. Provision for Free Look period

The provision for Free Look period is Rs. 8,550 thousand (previous year Rs. 11,760 thousand), as certified by the
Appointed Actuary.

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

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

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

Nil). 1 . .. V

• 34. Foreign exchange gain/loss . ; • .

The foreign exchange loss (net) debited to Profit and Loss Account for the year ended March 31, 2024 is Rs. 1,577
thousands (March 31, 2023 exchange loss (net) Rs. 140 thousands).

35. Investor Education & Protection Fund

For the year ended March 31, 2024 the Company has transferred Rs. Nil (previous year Rs. Nil) to the Investor Education
& Protection Fund.

36. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"),
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

37. No funds have been received by the Company from any persons or entities, including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly
or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.

38. The Company has not declared or paid any dividend during the year ended March 31, 2024 and March 31, 2023.

39. Risk Management Architecture

The Company is exposed to a variety of risks associated with its insurance business operations and the investment
portfolio. To help define the level of risk that the Company is willing to take, a set of Risk Appetite Statements have
been defined which state in both quantitative and qualitative terms the Company''s desired risk profile / overall level of
risk exposure. These risk appetite statements are reviewed and approved by the Board to ensure alignment of the
Company''s risk strategy to the business plan approved by the Board. '' - '' .

42. Share Capital and Allotment

During the current year, the Company has allotted 18,88,56,679 equity shares (March 31, 2023 - 10,20,75,688 equity

shares) out of which equity shares 1,40,47,354 (March 31, 2023 -1,07,29,921 equity shares) were allotted under ESOP.

During the current year, the Company has made preferential''allotment of 4,83,99,106 equity shares, 4,46,76,098 equity
shares, 2,23,38,049 equity shares and 37,23,008 equity shares to Motilal Oswal, Temasek, SBI Life & Paragon
respectively (March 31, 2023 - Nil).

The right issue allotment during the current year were 5,56,73,064 equity shares (March 31, 2023 - 9,13,45,767 equity
shares).

In January 2024, Fettle Tone LLP has sold a stake to Bupa Singapore Holdings Pte Ltd, the transaction occurred on
January 04, 2024, where Bupa Singapore Holdings Pte Ltd has purchased 36,63,81,439 equity shares from Fettle Tone
LLP by which Bupa Singapore Holdings Pte Ltd shareholding is increased to 63%.

43. During the year ended March 31, 2024, the Company had reassessed the useful lives of certain business applications.
The management believes that the revised useful lives of the assets reflect the period over which these assets are
expected to be used based on the technical inputs and capability analysis. As a result of change, the charge in the
Revenue Account on account of depreciation for the year ended March 31, 2024, has decreased by Rs. 1,97,687
thousands.

44. Pursuant to an inquiry by Directorate General of GST Intelligence (DGGI) relating to certain input credit availed by the
Company, it has provided all information and clarifications to DGGI. As directed by DGGI authorities, the Company has
paid Rs. 2,50,000 thousands under section 74(5) of the CGST Act 2017. The Company believes, it has taken input credit
in accordance wjtjugjevant provisions of the statue. The Company has also received summons under section 131 (1A)
from the income tax authorities and has provided all the information and clarifications to them. Pending completion of
such inquiry, there is no impact considered on the financial statements for the year ended March 31, 2024. The
Company has received Show Cause Notice from DGGI- Mumbai on Marketing expenses of Rs. 2,92,879 thousands. The
same has been duly replied on March 26, 2024. The Company has shown this amount in Contingent Liability,

45. Employee stock option plan

The Company had introduced "Employee Stock Option Plan - 2020 (ESOP 2020)" in the financial year 2020-21 effective
from 01^st June 2020 (date of grant). Under the ESOP Scheme 2020 the Company has given options to eligible Employees
to acquire equity shares in the Company. The options have been granted under various tranches.

46. Disclosure of Fire and Marine Revenue accounts

As the Company operates in single insurance business class viz. health insurance business, the reporting requirements as
prescribed by IRDA with respect to presentation of Fire and Marine insurance revenue accounts are not applicable.

47. Taxation

In the absence of virtual certainty regarding availability of sufficient future taxable Income to set off the taxable
accumulated business losses in future, within, the deferred tax assets on account of timing differences as stipulated in
Accounting Standard 22 on "Accounting for Taxes on Income" has not been recognized. Further, the Government of India
on December 12, 2019 vide the Taxation Laws (Amendment) Act 2019 inserted a new section 115BAA in the Income Tax
Act 1961, which provides an option to the Company for paying Income Tax at reduced rates as per provisions/conditions
defined in said section and the Company has opted for the same.

48. Implementation of Indian Accounting Standard (Ind AS) In insurance Sector

IRDAI vide its letter dated July 14, 2022 advised the insurance companies to set up a cross functional Steering Committee
to oversee the implementation of Ind AS. The Company has accordingly set up an Ind AS Steering Committee which meets
at regular intervals to oversee the progress on the matter. ^: .....

49. Code on Social Security, 2020 • "

The Indian Parliament has approved the Code on Social Security, 2020, which would impact the contributions by the
Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be
notified and the final rules are yet to be framed. The Company will carry out an evaluation of the impact and record the
same in the financial statements in the period in which the code becomes effective and related rules are published.

50. Audit Trail

The Company has used accounting software for maintaining its books of account which has a feature of recording audit
trail (edit log) except that the audit trail feature did not operate throughout the year. The same has been enabled/
operated from February 28, 2024 for Beacon, from March 03, 2024 for Maximus, from March 04, 2024 for Phoenix and
from July 03, 2023 for Credence. No instance of audit trail feature being tampered with was noted by the Company in
respect of above accounting software''s. The Company has effective control mechanism with respect to access and
database management which creates logs and monitors any change to database, including direct data change and object
level changes to database. Also, User Interface (Ul) based access and activities on the server, including database are being
monitored through PAM system (Privilege Access Management). Access to database and server are only allowed through
PAM and restricted to application administrator through strict access controls and monitoring process.

As per our report of even date For and on behalf of the Board of Directors

For S.R. Batliboi & Co.JLLjJgw^ Niva Bupa Health Insurance Company Limited

Chartered Accountants *¦'' -

V^KA'' /Mrj

Shrawan Jalan Me.--- __w „

Partner J u " 1

Membership No: 102102 \_ . t\AXA«''^/

Place: Mumbai Director (vs Managing Director &

\f v Chief Executive Officer

Dinesh Kumar Mittal Krishnan Ramachandran

DIN:00040000 DIN:08719264

For T R Chadha & Co. LLP

Chartered Accountants

Neena Goei -— Company Secretary Chief Financial Officer

Partner Raj at Sharma Vishwanath Mahendra

Membership No:057986 Membership No. FCS 7069

Place: Noida

Date: May 10, 2024 Place: Gurugram

? \

f I . - 1 . ll '' * ''