Accounting Policies of The New India Assurance Company Ltd. Company

Mar 31, 2025

16 A. SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Convention

The Standalone financial statements are drawn up in
accordance with the provisions of Insurance Regulatory and
Development Authority (Actuarial, Finance and Investment
Functions of Insurers) Regulations, 2024 and circulars
and/or guidelines issued in the context of preparation of the
Standalone financial statements, and the provisions of the
Companies Act 2013. The said statements are prepared on
historical cost convention and on accrual basis and comply
with accounting standards specified under Companies
(Accounting Standards) Rules, 2021 read with Section
133 of Companies Act 2013, as amended and conform
to practices prevailing in the General Insurance industry
except as otherwise stated.

2. Use of estimates

The preparation of Standalone financial statements
in conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amount of assets,
liabilities, revenues and expenses and disclosure of
contingent liabilities on the date of the Standalone financial
statements. Actual results may differ from those estimates
and assumptions. The estimates and assumptions used
in the accompanying Standalone financial statements
are based upon management''s evaluation of the relevant
facts and circumstances as on the date of the Standalone
financial statements. Any revision to accounting estimates
is recognized prospectively in current and future periods.

3. Revenue Recognition
A. Premium

Premium income (other than received in instalments)
for other than long term policies is recognised on the
receipt of complete information, on commencement
of risk.

Premium income (other than received in instalments)
for policies issued on or after September 1,2018, for
Motor segment and on or after October 1, 2024 for
other than Motor segment pertaining to long term
policies (with term more than one year) is recognised
on the receipt of complete information, equally over
the policy period at the commencement of risk on
1/n basis where ''n'' is a policy duration in years.
Balance premium for subsequent years is included
in the ''Premium Received in Advance''.

In the cases where premiums are received in
instalments, income is recognised on the receipt of
instalments.

In the cases where premium is sponsored by
Central / State Government, share of Central / State
Government is recognised on assumption of risk on
due basis.

In the cases of incoming coinsurance policies,
premium income is recognised on the receipt of

confirmation from the lead insurance company.

Reinsurance premium is recognized as per the
terms of the reinsurance contracts.

Any subsequent revisions to or cancellations of
premium are recognized in the year in which they
occur.

For all the above cases, a reserve for Unearned
Premium of recognised premium for each segment
is created as per the accounting policy for ''Reserves
for Un-expired Risk/s''.

B. Commission

Commission Income on reinsurance cessions
is recognized as income in the year in which
reinsurance premium is ceded.

Profit commission under reinsurance treaties
wherever applicable, is recognized on accrual.
Any subsequent revisions of profit commission are
recognized for in the year in which final determination
of the profits are intimated by reinsurers.

4. Premium Received in advance

Premium received in advance represents premium
received in respect of policies issued during the year,
where the risk commences subsequent to the Balance
Sheet date.

5. Reserves for Un-expired Risk/s

Unearned premium reserve is computed in accordance
with the guidelines issued by IRDAI as under:

a) Marine Hull: 100% of the Net Written premium
during the preceding twelve months;

b) In respect of other segments: on the basis of
1/365 method on contract period or period of risk
basis for the respective policies, whichever is
appropriate.

6. Reinsurance Accepted

Reinsurance returns have been incorporated for the
intimation/information received up to the cut-off date or
on estimation basis wherever required.

7. Reinsurance Ceded

Reinsurance cessions are accounted for on the basis of
actuals or on estimation basis wherever required.

8. Premium Deficiency

Premium deficiency is calculated where the sum of
expected claims costs, related expenses and maintenance
costs exceed the related unearned premium. The
premium deficiency is recognized as per IRDAI guidelines
and forms part of unexpired risk reserves.

9. acquisition Costs

Acquisition costs are primarily related to acquisition of
insurance contracts and have been expensed in the year
in which they are incurred.

10. Incurred Claims

Claims are recognized as and when reported. Claims
Paid (net of recoveries including salvages retained by
the insured, includes interest paid towards claims and all
expenses directly incurred in relation to their assessment)
are charged to respective revenue accounts.

Outstanding Claims at Balance Sheet date are provided
based on the management''s assessment of the ultimate
liability based on survey reports, past experience,
information provided by clients and other sources, and
applicable laws and subsequently modified for changes
as appropriate on availability of further information and
includes:

â¢ In respect of direct business, claim intimations
received up to the year-end;

â¢ In respect of reinsurance accepted, advices received
as of different dates of subsequent year up to the
cut-off date or on estimation basis.

Provision for claims incurred but not reported (IBNR) and
provision for claims incurred but not enough reported
(IBNER); These provisions are determined by appointed
actuary, which is in accordance with generally accepted
actuarial practice, provisions of IRDAI (Actuarial, Finance
and Investment Functions of Insurers) Regulations 2024,
the master circulars issued in the context of preparation
of standalone financial statements and stipulations of the
Institute of Actuaries of India. (As amended from time to
time)

All the outstanding claims for direct business are provided
net of estimated salvage (if any).

In respect of motor third party claims where court
summons has been served on the Company without
adequate policy particulars to establish liability of the
Company, provision is made as under:

â¢ 1/3^rd of the estimated liability, for all such claims
for which court summons have been served on the
Company upto one year.

â¢ 100% of the estimated liability, where such claims
are outstanding for more than one year.

Interest on motor accident claims tribunal (MACT) claims
is provided based on the prevailing trends in the motor
third party claim awards.

11. Salvage and Claim Recoveries

Recoveries of claims and sale proceeds on disposal of
salvage are accounted on realization and credited to
claims.

12. Receipt and Payment Account (Cash Flow Statement)

Receipt and Payment account/ Cash Flow Statement is
prepared as per Direct method as required by Part-II of
Schedule II of IRDAI (Actuarial, Finance and Investment
Functions of Insurers) Regulations, 2024.

13. Property, Plant and Equipment (Fixed Assets)

A) Property, Plant and Equipment (PPE)

i) PPE are stated at cost less depreciation.
Cost is inclusive of borrowing cost and other
incidental charges incurred up-to the date of

installation/put to use.

ii) Lease payment for assets taken on operating
lease are recognized as an expense in the
revenue(s) accounts and profit and loss
account over the lease term.

B) Depreciation

i) Depreciation on tangible assets is charged
on Straight Line Method (SLM) as per the
useful life prescribed under Schedule II of
the Companies Act 2013 and the residual
value of the asset shall be Re 1/- for Indian
Operations and unit 1/- in local reporting
currency for Foreign Operations.

ii) Lease hold properties are amortized over the
lease period.

iii) Depreciation on PPE added/disposed-off
during the year is provided on pro-rata basis.

iv) The residual value and useful lives are
reviewed at each financial year end.

14. Intangible Assets

Intangible assets are stated at cost of acquisition less
accumulated amortisation. The same is amortised over
a period of four years on straight line basis. Software
development / acquisition costs, except those which meet
the recognition criteria as laid down in Accounting Standard
26 (AS 26), are charged to revenue. Any additions to
already existing assets are amortised prospectively over
the remaining residual life of the assets.

15. Impairment of assets:

The PPE and Intangible assets are assessed for
any indication that an asset is impaired. In case the
recoverable amount of the fixed assets is lower than its
carrying amount, a provision is made for the impairment
loss.

16. Foreign Currency Transactions

a) Reinsurance operations:

Revenue transactions of re-insurance in foreign
currencies are converted at the average of buying
and selling rates of exchange of each quarter in
which they are accounted.

Monetary assets and liabilities of re-insurance in
foreign currencies are converted at the closing rate.

b) Foreign operations:

i) As per the Accounting Standard (AS) 11 âThe
Effects of Changes in Foreign Exchange
Ratesâ, foreign branches/agencies are
classified as ''non-integral foreign operations''.

ii) The assets and liabilities (including
contingent liabilities), both monetary and
non-monetary items, of the non-integral
foreign operations are translated at the
closing rate.

iii) Income and expense items of the nonÂ¬
integral foreign operations are translated at
the average exchange rate of the year.

iv) Depreciation on fixed assets held in foreign
branches and agencies is provided on
straight line at the rate and in manner as
stated in âDepreciationâ policy mentioned in
above stated Property, Plant and Equipment
Policy.

v) All resulting exchange difference is
accumulated in a foreign currency
translation reserve until the disposal of the
net investment in the foreign operations.

c) Foreign investments transactions during the year
are converted at the exchange rates prevailing as
on the last day of the month of purchase or sale.

d) Other assets and liabilities in foreign currencies are
converted at the average of buying and selling rates
of exchange prevailing at the year end.

e) The exchange gain/loss due to conversion of foreign
currencies other than relating to non-integral foreign
operations is taken to revenue(s) account and profit
and loss account as applicable.

17. Loans and Investments

a) Loans are measured at historical cost subject to
impairment. The Company reviews the quality of its
loan assets at every reporting period and provides
for impairment, if any.

b) Short Term Money Market Instruments such as
Commercial Papers and Certificate of Deposits are
shown at their discounted value and the difference
between the acquisition cost and the redemption
value is capitalised on time basis and recognised as
income.

c) Contracts for purchase and sale of shares, bonds,
debentures are accounted for as âInvestmentsâ as
on date of transaction.

d) The cost of investments includes premium on
acquisition, brokerage, transfer stamps, transfer
charges, Securities Transaction Tax and is net of
incentive/ fee if any, received thereon.

e) Dividend income (other than interim dividend):

Dividend Income is accounted for as income in the
year of declaration. Dividend on shares/interest
on debentures under objection/pending delivery
is accounted for on realisation. Interim dividend is
accounted for where the amount is received/credited
in the account of the company upto March 31.

Dividend on foreign investments is accounted on
gross basis.

f) Interest Income is recognized on accrual basis on
time proportion except income on non-performing
assets (NPA) which is recognized on realization
basis.

Amount received towards compensation for future
loss of interest is recognised as income only to
the extent attributable to the accounting year and
balance is kept in interest received in advance
account for apportionment in the relevant year.

g) Revenue in respect of Alternate Investment Fund/
Venture capital Fund, INVITs is recognized on
receipt basis.

h) Profit/Loss on realisation of investments is computed
by taking weighted average book value as cost of
investments except:

â¢ In respect of Government Securities/
Debentures/Bonds under trading portfolio,
the profit/loss is worked out specific scrip
wise.

â¢ In respect of Government Securities /
Debentures/Bonds and related debt
instruments sold from investment portfolio,
the profit/loss is worked out on first in first
out basis (FIFO).

i) The Company follows the prudential norms prescribed
by the Insurance Regulatory and Development
Authority as regards asset classification, recognition
of income and provisioning pertaining to loans/
advances/debentures.

j) Investment in government securities, debt securities
and redeemable preference shares are considered
as held till maturity and valued at cost. However, in
terms of Insurance Regulatory and Development
Authority Regulations the premium paid at the
time of acquisition of securities is amortised over
the residual period of maturity. In case investment
becomes NPA, the balance of unamortised premium
is debited to revenue(s) and profit and loss account
on the date of NPA.

k) i.) Investments in Mutual Funds are valued at

Net Asset Value (NAV) as at the Balance
Sheet date and the difference between
cost/book value and NAV is accounted in
Fair Value Change Account. In case of nonÂ¬
availability of latest NAV as at the Balance
Sheet date, investment is shown at cost.

ii.) Investments in Venture Funds are valued at
cost. If there is reduction in NAV, the same
is charged to revenue and book value of
investments is reduced accordingly. Any
appreciation in NAV to the extent of loss
earlier recognised, is taken to revenue.
Wherever NAV as on Balance Sheet date
is not available, latest available NAV is
considered.

l) (i) In accordance with IRDAI/F&I/INV/

CIR213/10/2013 dated October 30, 2013
for Valuation of Equity Portfolio, National
Stock Exchange (NSE) is considered as
Primary Stock Exchange and Bombay
Stock Exchange (BSE) as Secondary Stock
Exchange.

(ii) Actively traded equity/ equity related
instruments are valued at the closing price at
NSE or if the scrip is not traded at NSE, the
scrip is valued at the closing price at BSE.
The difference between weighted average
cost and quoted value is accounted in Fair
Value Change Account.

Exchange traded funds & INVITs are
valued as applicable to Equity portfolio. The
difference between the weighted average
cost and the quoted value is accounted in
Fair Value change account.

(iii) Investments in equity shares of Companies
outside India are valued at the last quoted
price at the stock exchange of the respective
country.

m) Investment in thinly traded equity shares and
unlisted equity shares are shown at cost. Difference
between cost and break-up value is provided for as
diminution in value. If the break-up value is negative,
or break-up value is not available, then the provision
is made for the entire cost. Break-up value is arrived
as per latest Balance Sheet and which should not be
more than 24 months prior to its valuation.

n) In case of investment in listed and unlisted equity/
equity related instruments / preference shares where
the value has been impaired on or before March 31,
2000, the historical/weighted average costs are not
available with the Company. As a consequence,
the carrying value of such investments as on April
01,2000 is presumed to be the historical/ weighted
average cost.

o) Investments in equity/ equity related instruments/
preference shares made in those companies, which
are making losses continuously for last three years
and where capital is eroded (Break-up value is Less
than Face Value), are considered to have impairment
in value. Further, if the published accounts of a
Company are not available for last three accounting
years ending on or immediately preceding the date
of working out impairment in value, it is presumed
that the value of investment is fully impaired and is
written off to a nominal value of ?1/- per securities of
a Company.

p) Valuation of investments as mentioned in point (o)
above are done as under:

i) In respect of actively traded equity shares: -
At market price as follows:

â¢ If Fair Value Change is positive,
then through Fair Value Change
Account.

â¢ If Fair Value Change is negative,
then through Revenue Account.

ii) In respect of other than actively traded equity
shares: - lower of cost price or break-up
value provided break-up value is positive. If
break-up value is negative the nominal value
is taken at ?1/- per securities of a Company.

iii) In respect of preference shares, if the
dividend is not received for the last three
years, such preference shares are written
down to a value which will bear to its face
value, the same proportion as value taken/
which would have been taken for writing
down equity shares bears to the face value
of the equity shares. If the equity shares
are written down to ?1/- per securities of
a Company, preference shares are also
written down to a nominal value of ?1/- per
securities of a Company.

iv) Once the value of investment in equity/equity
related instruments/ preference shares of a
Company is impaired in accordance with
the above-mentioned policy, the reversal of
such impairment losses are recognized in
revenue/ profit and loss when such Company
achieves a positive net worth and capital is
fully restored (Break-up Value is More than
Face Value) as per the latest available
published accounts immediately preceding
the date of working out the reversal.

In respect of investments where the historical or
weighted average cost is not available as mentioned
in Policy No. 17(n), reversal of impairment loss is
carried out and recognized only to the extent of
impairment losses accounted after March 31, 2000.

q) Reverse Repo transactions are treated as secured
lending transactions and accordingly disclosed in
the Standalone financial statements. The difference
between total consideration at the 1^st and 2^nd leg of
the transaction is treated as interest income.

r) Tri Party Repo Dealing System (TREPS) & Treasury
Bills, which are issued at discount to the face
value, are treated as money market instrument
as per Reserve Bank of India notification. TREPS
are shown under Cash & Bank Balances. Discount
earned at the time of investment/lending in Money
Market Instruments is shown as income, which is
apportioned on time basis.

s) Un-realised gains / losses arising due to changes
in the fair value of actively traded listed equity
shares other than enumerated in Accounting Policy
17(n) are taken under the head âFair Value Change
Accountâ and on realization reported in profit and
loss account.

Pending realization, the credit balance in the âFair Value
Change Accountâ is not available for distribution to
shareholders/policyholders.

18. Employee Benefits

Employee benefits comprise of both defined contributions
and defined benefit plans.

Provident Fund is a defined contribution plan. The
Company''s contribution towards provident fund is
charged to Revenue Accounts as applicable. Further the
Company has no further obligation beyond the periodic
contributions.

Pension, Gratuity and Leave Encashment are defined
benefit plans. The Company has incorporated a Pension

Trust and Gratuity Trust. The Company''s liability towards
pension, gratuity and leave encashment is accounted for
on the basis of an actuarial valuation done at the year
end and is charged to revenue accounts as applicable.
In case of pension for the employee who joined from
April 01, 2010 contribution is made to National Pension
System (NPS) which is defined contribution plan wherein
contribution towards pension fund is charged to Revenue
accounts as applicable. The Company has no further
obligation beyond the periodic contributions.

All short-term employee benefits are accounted on
undiscounted basis during the accounting period based
on service rendered by the employees.

19. Segment Reporting:

The Company''s primary reportable segments are business
segments, which have been identified in accordance with
AS 17 - Segment Reporting read with Part-II of Schedule
II of IRDAI (Actuarial, Finance and Investment Functions
of Insurers) Regulations, 2024. The income and expenses
attributable to the business segments are allocated as
mentioned in point no. 25 and 26 below.

20. Related Party Disclosure:

Related party identification and transactions are
disclosed as per the requirement of AS-18 âRelated Party
Disclosuresâ.

21. operating lease:

The Rental in respect of operating lease is charged to
Revenue/Profit and Loss account.

22. Earnings per Share (EPS):

EPS (basic/diluted) is arrived at based on net profit after
taxation attributable to equity shareholders to the basic/
weighted average number of equity shares.

23. Taxation.

a) Tax expense for the year, comprises current tax and
deferred tax.

b) Current income tax expense comprises taxes on
income from operations in India and in foreign
jurisdiction. Income tax payable in India is determined
in accordance with the provisions of the Income Tax
Act 1961. Tax expense relating to foreign operations
is determined in accordance with tax laws applicable
in countries where such operations are domiciled.

c) Minimum Alternative Tax (MAT) paid in accordance
with the tax laws, which gives rise to future economic
benefits in the form of adjustment of future income
tax liability, is considered as an asset if there is
convincing evidence that the Company will pay
normal income tax on future income. Accordingly,
MAT is recognized as an asset in the Balance sheet
when it is probable that the future economic benefit
associated with it will flow to the Company and the
asset can be measured reliably.

d) Deferred tax is recognized on timing differences
between the accounting income and the taxable
income for the year and quantified using the tax
rates and laws enacted or substantively enacted as
on the Balance Sheet date.

e) Deferred tax assets relating to unabsorbed
depreciation/business loss are recognized and
carried forward to the extent there is virtual certainty
that sufficient future taxable income will be available
against which such deferred tax assets can be
realized.

f) Deferred tax assets relating to other timing difference
are recognized and carried forward to the extent that
there is a reasonable certainty that sufficient future
taxable income will be available against which such
deferred tax assets can be realized.

g) Refund of income tax is accounted on realization
basis.

Mar 31, 2024

16 A. SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Convention

The Standalone financial statements are drawn up in accordance with the provisions of IRDAI (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 and circulars and/or guidelines issued in the context of preparation of the Standalone financial statements, and the provisions of the Companies Act 2013. The said statements are prepared on historical cost convention and on accrual basis and comply with accounting standards specified under Companies (Accounting Standards) Rules, 2021 read with Section 133 of Companies Act 2013, as amended and conform to practices prevailing in the General Insurance industry except as otherwise stated.

2. Use of Estimates

The preparation of Standalone financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of the Standalone financial statements. Actual results may differ from those estimates and assumptions. The estimates and assumptions used in the accompanying Standalone financial statements are based upon management''s evaluation of the relevant facts and circumstances as on the date of the Standalone financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.

3. Revenue Recognition

A. Premium

Premium income is recognized on assumption of risk. A reserve for Unearned Premium for each segment, representing that part of the recognized premium attributable to the succeeding accounting periods, calculated on time apportionment basis or the period of risk, whichever is appropriate is created. This forms part of the un-expired risk reserves.

Reinsurance premium is recognized as per the terms of the reinsurance contracts. A reserve for Unearned Premium for each segment, representing that part of the recognized reinsurance premium attributable to the succeeding accounting periods, is also calculated on time apportionment basis. This also forms part of the un-expired risk reserves.

Any subsequent revisions to or cancellations of premium are recognized in the year in which they occur.

B. Commission

Commission Income on reinsurance cessions is recognized as income in the year in which reinsurance premium is ceded.

Profit commission under reinsurance treaties wherever applicable, is recognized on accrual. Any subsequent revisions of profit commission are recognized for in the year in which final determination of the profits are intimated by reinsurers.

4. Premium Received in Advance

Premium received in advance represents premium received in respect of policies issued during the year, where the risk commences subsequent to the Balance Sheet date.

5. Reserves for Un-expired Risk/s

Unearned premium reserve is computed in accordance with the guidelines issued by IRDAI as under:

a) Marine Hull: 100% of the Net Written premium during the preceding twelve months;

b) In respect of other segments: on the basis of 1/365 method on contract period or period of risk basis for the respective policies, whichever is appropriate.

6. Reinsurance Accepted

Reinsurance returns have been incorporated for the intimation/information received up to the cut-off date or on estimation basis wherever required.

7. Reinsurance Ceded

Reinsurance cessions are accounted for on the basis of actuals or on estimation basis wherever required.

8. Premium Deficiency

Premium deficiency is calculated where the sum of expected claims costs, related expenses and maintenance costs exceed the related unearned premium. The premium deficiency is recognized as per IRDAI guidelines and forms part of unexpired risk reserves.

9. Acquisition Costs

Acquisition costs are primarily related to acquisition of insurance contracts and have been expensed in the year in which they are incurred.

10. Incurred Claims

Claims are recognized as and when reported. Claims Paid (net of recoveries including salvages retained by the insured, includes interest paid towards claims and all expenses directly incurred in relation to their assessment) are charged to respective revenue accounts.

Outstanding Claims at Balance Sheet date are provided based on the management''s assessment of the ultimate liability based on survey reports, past experience, information provided by clients and other sources, and applicable laws and subsequently modified for changes as appropriate on availability of further information and includes:

â¢ In respect of direct business, claim intimations received up to the year-end;

â¢ In respect of reinsurance accepted, advices received as of different dates of subsequent year up to the cut-off date or on estimation basis.

Provision for claims incurred but not reported (IBNR) and provision for claims incurred but not enough reported (IBNER); These provisions are determined by appointed actuary, which is in accordance with generally accepted actuarial practice, provisions of IRDAI (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002, the master circulars issued in the context of preparation of standalone financial statements, Insurance Regulatory and Development Authority of India (Assets, Liabilities, and Solvency Margin of General Insurance Business) Regulations, 2016 and stipulations of the Institute of Actuaries of India. (As amended from time to time)

All the outstanding claims for direct business are provided net of estimated salvage (if any).

In respect of motor third party claims where court summons have been served on the Company without adequate policy particulars to establish liability of the Company, provision is made as under:

â¢ 1 /3rd of the estimated liability, for all such claims for which court summons have been served on the Company upto one year.

â¢ 100% of the estimated liability, where such claims are outstanding for more than one year.

Interest on motor accident claims tribunal (MACT) claims is provided based on the prevailing trends in the motor third party claim awards.

11. Salvage and Claim Recoveries

Recoveries of claims and sale proceeds on disposal of salvage are accounted on realization and credited to claims.

12. Receipt and Payment Account

Receipt and Payment account is prepared as per Direct method as required by part -I of Schedule -B of IRDAI regulation.

13. Property, Plant and Equipment (Fixed Assets - Tangible)

A) Property, Plant and Equipment (PPE)

i) PPE are stated at cost less depreciation. Cost is

inclusive of borrowing cost and other incidental charges incurred up-to the date of installation/ put to use.

ii) Lease payment for assets taken on operating

lease are recognized as an expense in the revenue(s) accounts and profit and loss account over the lease term.

B) Depreciation

i) Depreciation on tangible assets is charged on Straight Line Method (SLM) as per the useful life prescribed under Schedule II of the Companies Act 2013 and the residual value of the asset shall be Re 1/-.

ii) Lease hold properties are amortized over the lease period.

iii) Depreciation on PPE added/disposed-off during the year is provided on pro rata basis.

iv) The residual value and useful lives are reviewed at each financial year end.

14. Intangible Assets

Intangible assets are stated at cost of acquisition less accumulated amortisation. The same is amortised over a period of four years on straight line basis. Software development / acquisition costs, except those which meet the recognition criteria as laid down in Accounting Standard 26 (AS 26), are charged to revenue. Any additions to already existing assets are amortised prospectively over the remaining residual life of the assets.

15. Impairment of Assets:

The PPE and Intangible assets are assessed for any indication that an asset is impaired. In case the recoverable amount of the fixed assets is lower than its carrying amount, a provision is made for the impairment loss.

16. Foreign Currency Transactions

a) Reinsurance operations:

Revenue transactions of re-insurance in foreign currencies are converted at the average of buying and selling rates of exchange of each quarter in which they are accounted.

Monetary assets and liabilities of re-insurance in foreign currencies are converted at the closing rate.

b) Foreign operations:

i) As per the Accounting Standard (AS) 11 âThe Effects of Changes in Foreign Exchange Ratesâ, foreign branches/agencies are classified as ''non-integral foreign operations.

ii) The assets and liabilities (including contingent liabilities), both monetary and non-monetary items, of the non-integral foreign operations are translated at the closing rate.

iii) Income and expense items of the non-integral foreign operations are translated at the average exchange rate of the year.

iv) Depreciation on fixed assets held in foreign branches and agencies is provided on straight line rupee value at the year end at the rate and in manner as stated in âDepreciationâ policy mentioned in above stated Property, Plant and Equipment Policy.

v) All resulting exchange difference is

accumulated in a foreign currency translation reserve until the disposal of the net investment in the foreign operations.

c) Foreign investments transactions during the year are converted at the exchange rates prevailing as on the last day of the month of purchase or sale.

d) Other assets and liabilities in foreign currencies are converted at the average of buying and selling rates of exchange prevailing at the year end.

e) The exchange gain/loss due to conversion of foreign currencies other than relating to non-integral foreign operations is taken to revenue(s) account and profit and loss account as applicable.

17. Loans and Investments

a) Loans are measured at historical cost subject to impairment. The Company reviews the quality of its loan assets at every reporting period and provides for impairment, if any.

b) Short Term Money Market Instruments such as Commercial Papers and Certificate of Deposits are shown at their discounted value and the difference between the acquisition cost and the redemption value is apportioned on time basis and recognised as accrued income.

c) Contracts for purchase and sale of shares, bonds, debentures are accounted for as âInvestmentsâ as on date of transaction.

d) The cost of investments includes premium on acquisition, brokerage, transfer stamps, transfer charges, Securities Transaction Tax and is net of incentive/ fee if any, received thereon.

e) Dividend income (other than interim dividend):

Dividend Income is accounted for as income in the year of declaration. Dividend on shares/interest on debentures under objection/pending delivery is accounted for on realisation. Interim dividend is accounted for where the amount is received/credited in the account of the company upto March 31.

Dividend on foreign investments is accounted on gross basis.

f) Interest Income is recognized on accrual basis on time proportion except income on non-performing assets (NPA) which is recognized on realization basis.

Amount received towards compensation for future loss of interest is recognised as income only to the extent attributable to the accounting year and balance is kept in interest received in advance account for apportionment in the relevant year.

g) Revenue in respect of Alternate Investment Fund/ Venture capital Fund is recognized on receipt basis.

h) Profit/Loss on realisation of investments is computed by taking weighted average book value as cost of

investments except:

â¢ In respect of Government Securities/ Debentures/Bonds under trading portfolio, the profit/loss is worked out specific scrip wise.

â¢ In respect of Government Securities / Debentures/Bonds and related debt instruments sold from investment portfolio, the profit/loss is worked out on first in first out basis (FIFO).

i) The Company follows the prudential norms prescribed by the Insurance Regulatory and Development Authority as regards asset classification, recognition of income and provisioning pertaining to loans/ advances/debentures.

j) Investment in government securities, debt securities and redeemable preference shares are considered as held till maturity and valued at cost. However, in terms of Insurance Regulatory and Development Authority Regulations the premium paid at the time of acquisition of securities is amortised over the residual period of maturity. In case investment becomes NPA, the balance of unamortised premium is debited to revenue(s) and profit and loss account on the date of NPA.

k) i) Investments in Mutual Funds are valued at Net

Asset Value (NAV) as at the Balance Sheet date and the difference between cost/book value and NAV is accounted in Fair Value Change Account. In case of non-availability of latest NAV as at the Balance Sheet date, investment is shown at cost.

ii) Investments in Venture Funds are valued at cost. If there is reduction in NAV, the same is charged to revenue and book value of investments is reduced accordingly. Any appreciation in NAV to the extent of loss earlier recognised, is taken to revenue. Wherever NAV as on Balance Sheet date is not available, latest available NAV is considered.

l) i) In accordance with IRDAI/F&I/INV/

CIR213/10/2013 dated October 30, 2013 for Valuation of Equity Portfolio, National Stock Exchange (NSE) is considered as Primary Stock Exchange and Bombay Stock Exchange (BSE) as Secondary Stock Exchange.

Investment Portfolio in respect of equity/ equity related instruments is segregated into actively traded and thinly traded as prescribed by Insurance Regulatory and Development Authority Regulations. The shares are treated as actively traded or thinly traded by taking into consideration total traded transactions in the month of March on NSE and BSE. consideration total traded transactions in the month of March on NSE and BSE.

ii) Actively traded equity/ equity related instruments are valued at the closing price at NSE or if the scrip is not traded at NSE, the scrip is valued at the closing price at BSE. The difference between weighted average cost and quoted value is accounted in Fair Value Change Account.

Exchange traded funds are valued as applicable to Equity portfolio. The difference between the weighted average cost and the quoted value is accounted in Fair Value change account.

iii) Investments in equity shares of Companies outside India are valued at the last quoted price at the stock exchange of the respective country.

m) Investment in thinly traded equity shares and unlisted equity shares are shown at cost. Difference between cost and break-up value is provided for as diminution in value. If the break-up value is negative, or break-up value is not available, then the provision is made for the entire cost. Break-up value is arrived as per latest Balance Sheet and which should not be more than 21 months prior to its valuation.

n) In case of investment in listed and unlisted equity/ equity related instruments / preference shares where the value has been impaired on or before March 31, 2000, the historical/weighted average costs are not available with the Company. As a consequence, the carrying value of such investments as on April 01, 2000 is presumed to be the historical/ weighted average cost.

o) Investments in equity/ equity related instruments/ preference shares made in those companies, which are making losses continuously for last three years and where capital is eroded (Break-up value is Less than Face Value), are considered to have impairment in value. Further, if the published accounts of a Company are not available for last three accounting years ending on or immediately preceding the date of working out impairment in value, it is presumed that the value of investment is fully impaired and is written off to a nominal value of Rs. 1/- per securities of a Company.

p) Valuation of investments as mentioned in point (o) above are done as under:

i) In respect of actively traded equity shares: -At market price (through fair value change account)

ii) In respect of other than actively traded equity shares: - lower of cost price or break-up value provided break-up value is positive. If break-up value is negative the nominal value is taken at Rs.1/- per securities of a Company.

iii) In respect of preference shares, if the dividend is not received for the last three years, such preference shares are written down to a value

which will bear to its face value, the same proportion as value taken/ which would have been taken for writing down equity shares bears to the face value of the equity shares. If the equity shares are written down to Rs.1/- per securities of a Company, preference shares are also written down to a nominal value of Rs.1/- per securities of a Company.

iv) Once the value of investment in equity/equity related instruments/ preference shares of a Company is impaired in accordance with the above-mentioned policy, the reversal of such impairment losses are recognized in revenue/ profit and loss when such Company achieves a positive net worth and capital is fully restored (Break-up Value is More than Face Value) as per the latest available published accounts immediately preceding the date of working out the reversal.

In respect of investments where the historical or weighted average cost is not available as mentioned in Policy No. 15(n), reversal of impairment loss is carried out and recognized only to the extent of impairment losses accounted after March 31, 2000.

q) Reverse Repo transactions are treated as secured lending transactions and accordingly disclosed in the Standalone financial statements. The difference between total consideration at the 1st and 2nd leg of the transaction is treated as interest income.

r) Tri Party Repo Dealing System (TREPS), which is issued at discount to the face value, is treated as money market instrument as per Reserve Bank of India notification. Discount earned at the time of lending through TREPS is shown as income, which is apportioned on time basis.

s) Un-realised gains / losses arising due to changes in the fair value of actively traded listed equity shares other than enumerated in Accounting Policy 15(n) are taken under the head âFair Value Change Accountâ and on realization reported in profit and loss account.

Pending realization, the credit balance in the âFair Value Change Accountâ is not available for distribution to shareholders/policyholders.

18. Employee Benefits

Employee benefits comprise of both defined contributions and defined benefit plans.

Provident Fund is a defined contribution plan. The Company''s contribution towards provident fund is charged to Revenue Accounts as applicable. Further the Company has no further obligation beyond the periodic contributions.

Pension, Gratuity and Leave Encashment are defined benefit plans. The Company has incorporated a Pension Trust and Gratuity Trust. The Company''s liability towards

pension, gratuity and leave encashment is accounted for on the basis of an actuarial valuation done at the year end and is charged to revenue accounts as applicable. In case of pension for the employee who joined from April 01, 2010 contribution is made to National Pension System (NPS) which is defined contribution plan wherein contribution towards pension fund is charged to Revenue accounts as applicable. The Company has no further obligation beyond the periodic contributions.

All short-term employee benefits are accounted on undiscounted basis during the accounting period based on service rendered by the employees.

19. Segment Reporting:

The Company''s primary reportable segments are business segments, which have been identified inaccordance with AS 17 - Segment Reporting read with part -I of Schedule -B of IRDAI regulation. The income and expenses attributable to the business segments are allocated as mentioned in point no. 25 and 26 below.

20. Related Party Disclosure:

Related party identification and transactions are disclosed as per the requirement of AS-18 âRelated Party Disclosuresâ.

21. Operating lease

The Rental in respect of operating lease is charged to Revenue/Profit and Loss account.

22. Earnings per Share (EPS)

EPS (basic/diluted) is arrived at based on net profit after taxation attributable to equity shareholders to the basic/ weighted average number of equity shares.

23. Taxation

a) Tax expense for the year, comprises current tax and deferred tax.

b) Current income tax expense comprises taxes on income from operations in India and in foreign jurisdiction. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.

c) Minimum Alternative Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax on future income. Accordingly, MAT is recognized as an asset in the Balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

d) Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

e) Deferred tax assets relating to unabsorbed depreciation/business loss are recognized and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

f) Deferred tax assets relating to other timing difference are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

g) Refund of income tax is accounted on realization basis.

Mar 31, 2023

16 A. SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Convention

The Standalone financial statements are drawn up in accordance with the provisions of IRDAI (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 and circulars and/or guidelines issued in the context of preparation of the Standalone financial statements, and the provisions of the Companies Act 2013. The said statements are prepared on historical cost convention and on accrual basis, comply with accounting standards specified under Section 133 of Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and conform to practices prevailing in the General Insurance industry except as otherwise stated.

2. Use of Estimates

The preparation of Standalone financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of the Standalone financial statements. Actual results may differ from those estimates and assumptions. The estimates and assumptions used in the accompanying Standalone financial statements are based upon management''s evaluation of the relevant facts and circumstances as on the date of the Standalone financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.

3. Revenue Recognition

A. Premium

Any subsequent revisions to or cancellations of premium are recognized in the year in which they occur.

B. Commission

Commission Income on reinsurance cessions

is recognized as income in the year in which reinsurance premium is ceded.

Profit commission under reinsurance treaties wherever applicable, is recognized on accrual. Any subsequent revisions of profit commission are recognized for in the year in which final determination of the profits are intimated by reinsurers.

4. Premium Received in Advance

Premium received in advance represents premium received in respect of policies issued during the year, where the risk commences subsequent to the Balance Sheet date.

5. Reserves for Un-expired Risk/s

Unearned premium reserve is computed in accordance with the guidelines issued by IRDAI as under:

a) Marine Hull: 100% of the Net Written premium during the preceding twelve months;

b) In respect of other segments: on the basis of 1/365 method on contract period or period of risk basis for the respective policies, whichever is appropriate.

6. Reinsurance Accepted

Reinsurance returns have been incorporated for the advices received up to the date of finalization of accounts or on estimation basis wherever required.

7. Reinsurance Ceded

Reinsurance cessions are accounted for on the basis of actuals or on estimation basis wherever required.

8. Premium Deficiency

Premium deficiency is calculated where the sum of expected claims costs, related expenses and maintenance costs exceed the related unearned premium. The premium deficiency is recognized as per IRDAI guidelines and forms part of unexpired risk reserves.

9. Acquisition Costs

Acquisition costs are primarily related to acquisition of insurance contracts and have been expensed in the year in which they are incurred.

10. Incurred Claims

Claims are recognized as and when reported. Claims Paid (net of recoveries including salvages retained by the insured, includes interest paid towards claims and all expenses directly incurred in relation to their assessment) are charged to respective revenue accounts.

Outstanding Claims estimates at Balance Sheet date are provided based on the management''s assessment of the ultimate liability likely to be paid based on survey reports, past experience, information provided by clients and other sources, and applicable laws and subsequently modified for changes as appropriate on availability of further information and includes:

â¢ In respect of direct business, claim intimations received up to the year-end;

â¢ In respect of reinsurance accepted, advices received as of different dates of subsequent year up to the date of finalisation of accounts or on estimation basis.

Provision for claims incurred but not reported (IBNR) and provision for claims incurred but not enough reported (IBNER). The said provisions have been determined by appointed actuary, which is in accordance with generally accepted actuarial practice, requirement of IRDAI (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002, the master circulars issued in the context of preparation of standalone financial statements, Insurance Regulatory and Development Authority of India (Assets, Liabilities, and Solvency Margin of General Insurance Business) Regulations, 2016 and stipulations of the Institute of Actuaries of India. (As amended from time to time)

All the outstanding claims for direct business are provided net of estimated salvage (if any).

In respect of motor third party claims where court summons have been served on the Company without adequate policy particulars to establish liability of the Company, provision is made as under:

â¢ 1 /3rd of the estimated liability, for all such claims for which court summons have been served on the Company upto one year.

â¢ 100% of the estimated liability, where such claims are outstanding for more than one year.

Interest on motor accident claims tribunal (MACT) claims is provided based on the prevailing trends in the motor third party claim awards.

11. Salvage and Claim Recoveries

Recoveries of claims and sale proceeds on disposal of salvage are accounted on realization and credited to claims.

12. Receipt and Payment Account (Cash Flow Statement)

Receipt and Payment account/ Cash Flow Statement is prepared as per Direct method as required by part -I of Schedule -B of IRDAI regulation.

13. Property, Plant and Equipment

A) Property, Plant and Equipment (PPE)

i) PPE are stated at cost less depreciation. Cost is inclusive of borrowing cost and other incidental charges incurred up-to the date of installation/put to use.

ii) Lease payment for assets taken on operating lease are recognized as an expense in the

B) Depreciation

i) Depreciation on tangible assets is charged on Straight Line Method (SLM) as per the useful life prescribed under Schedule II of the Companies Act 2013 and the residual value of the asset shall be Re 1/-.

ii) Lease hold properties are amortized over the lease period.

iii) Depreciation on PPE added/disposed-off during the year is provided on pro-rata basis.

iv) The residual value and useful lives are reviewed at each financial year end.

14. Foreign Currency Transactions

a) Reinsurance operations:

Revenue transactions of re-insurance in foreign currencies are converted at the average of buying and selling rates of exchange of each quarter in which they are accounted.

Monetary assets and liabilities of re-insurance in foreign currencies are converted at the closing rate.

b) Foreign operations:

i) As per the Accounting Standard (AS) 11 âThe Effects of Changes in Foreign Exchange Ratesâ, foreign branches/agencies are classified as ''non-integral foreign operations''.

ii) The assets and liabilities (including contingent liabilities), both monetary and non-monetary items, of the non-integral foreign operations are translated at the closing rate.

iii) Income and expense items of the non-integral foreign operations are translated at the average exchange rate of the year.

v) All resulting exchange difference is accumulated in a foreign currency translation reserve until the disposal of the net investment in the foreign operations.

c) Foreign investments transactions during the year are converted at the exchange rates prevailing as on the last day of the month of purchase or sale.

d) Other assets and liabilities in foreign currencies are converted at the average of buying and selling rates of exchange prevailing at the year end.

e) The exchange gain/loss due to conversion of foreign currencies other than relating to non-integral foreign operations is taken to revenue(s) account and profit

15. Loans and Investments

a) Loans are measured at historical cost subject to impairment. The Company reviews the quality of its loan assets and provides for impairment, if any.

b) Short Term Money Market Instruments such as Commercial Papers and Certificate of Deposits are shown at their discounted value and the difference between the acquisition cost and the redemption value is apportioned on time basis and recognised as accrued income.

c) Contracts for purchase and sale of shares, bonds, debentures are accounted for as âInvestmentsâ as on date of transaction.

d) The cost of investments includes premium on acquisition, brokerage, transfer stamps, transfer charges, Securities Transaction Tax and is net of incentive/ fee if any, received thereon.

e) Dividend income (other than interim dividend):

Dividend Income is accounted for as income in the year of declaration. Dividend on shares/interest on debentures under objection/pending delivery is accounted for on realisation. Interim dividend is accounted for where the amount is received/credited in the account of the company upto March 31.

Dividend on foreign investments is accounted on gross basis.

f) Interest Income is recognized on accrual basis on time proportion except income on non-performing assets (NPA) which is recognized on realization basis.

Amount received towards compensation for future loss of interest is recognised as income only to the extent attributable to the accounting year and balance is kept in interest received in advance account for apportionment in the relevant year.

g) Revenue in respect of Alternate Investment Fund/ Venture capital Fund is recognized on receipt basis.

h) Profit/Loss on realisation of investments is computed by taking weighted average book value as cost of investments except:

â¢ In respect of Government Securities/ Debentures/Bonds under trading portfolio, the profit/loss is worked out specific scrip wise.

â¢ In respect of Government Securities / Debentures/Bonds and related debt instruments sold from investment portfolio, the profit/loss is worked out on first in first out basis (FIFO).

i) The Company follows the prudential norms prescribed by the Insurance Regulatory and Development Authority as regards asset classification, recognition

of income and provisioning pertaining to loans/ advances/debentures.

j) Investment in government securities, debt securities and redeemable preference shares are considered as held till maturity and valued at cost. However, in terms of Insurance Regulatory and Development Authority Regulations the premium paid at the time of acquisition of securities is amortised over the residual period of maturity. In case investment becomes NPA, the balance of unamortised premium is debited to revenue(s) and profit and loss account on the date of NPA.

k) i) Investments in Mutual Funds are valued at Net

l) i) In accordance with IRDAI/F&I/INV/

CIR213/10/2013 dated October 30, 2013 for Valuation of Equity Portfolio, National Stock Exchange (NSE) is considered as Primary Stock Exchange and Bombay Stock Exchange (BSE) as Secondary Stock Exchange.

Exchange traded funds are valued as applicable to Equity portfolio. The difference between the weighted average cost and the quoted value is accounted in Fair Value change account.

iii) Investments in equity shares of Companies outside India are valued at the last quoted price at the stock exchange of the respective country.

m) Investment in thinly traded equity shares and unlisted equity shares are shown at cost. Difference between cost and break-up value is provided for as diminution in value. If the break-up value is negative, or break-up value is not available, then the provision is made for the entire cost. Break-up value is arrived as per latest Balance Sheet and which should not be more than 21 months prior to its valuation.

n) In case of investment in listed and unlisted equity/ equity related instruments / preference shares where the value has been impaired on or before March 31, 2000, the historical/weighted average costs are not available with the Company. As a consequence, the carrying value of such investments as on April 01,2000 is presumed to be the historical/ weighted average cost.

o) Investments in equity/ equity related instruments/ preference shares made in those companies, which are making losses continuously for last three years and where capital is eroded (Break-up value is Less than Face Value), are considered to have impairment in value. Further, if the published accounts of a Company are not available for last three accounting years ending on or immediately preceding the date of working out impairment in value, it is presumed that the value of investment is fully impaired and is written off to a nominal value of Rs. 1/- per securities of a Company.

p) Valuation of investments as mentioned in point (o) above are done as under:

i) In respect of actively traded equity shares: - At market price.

ii) In respect of other than actively traded equity shares: - lower of cost price or break-up value provided break-up value is positive. If break-up value is negative the nominal value is taken at Rs.1/- per securities of a Company.

iii) In respect of preference shares, if the dividend is not received for the last three years, such preference shares are written down to a value which will bear to its face value, the same proportion as value taken/ which would have been taken for writing down equity shares bears to the face value of the equity shares. If the equity shares are written down to Rs.1/- per securities of a Company, preference shares are also written down to a nominal value of Rs.1/- per securities of a Company.

iv) Once the value of investment in equity/equity related instruments/ preference shares of a Company is impaired in accordance with the above-mentioned policy, the reversal of such impairment losses are recognized in revenue/ profit and loss when such Company achieves a positive net worth and capital is fully restored (Break-up Value is More than Face Value) as per the latest available published accounts

immediately preceding the date of working out the reversal.

q) Reverse Repo transactions are treated as secured lending transactions and accordingly disclosed in the Standalone financial statements. The difference between total consideration at the 1st and 2nd leg of the transaction is treated as interest income.

Pending realization, the credit balance in the âFair Value Change Accountâ is not available for distribution to shareholders/policyholders.

16. Employee Benefits

Employee benefits comprise of both defined contributions and defined benefit plans.

Provident Fund is a defined contribution plan. The Company''s contribution towards provident fund is charged to Revenue Accounts as applicable. Further the Company has no further obligation beyond the periodic contributions.

Pension, Gratuity and Leave Encashment are defined benefit plans. The Company has incorporated a Pension Trust and Gratuity Trust. The Company''s liability towards pension, gratuity and leave encashment is accounted for on the basis of an actuarial valuation done at the year end and is charged to revenue accounts as applicable. In case of pension for the employee who joined from April 01, 2010 contribution is made to National Pension System (NPS) which is defined contribution plan wherein contribution towards pension fund is charged to Revenue accounts as applicable. The Company has no further obligation beyond the periodic contributions.

All short-term employee benefits are accounted on undiscounted basis during the accounting period based on service rendered by the employees.

17. Segment Reporting:

The Company''s primary reportable segments are business segments, which have been identified inaccordance with AS 17 - Segment Reporting read with part -I of Schedule

-B of IRDAI regulation. The income and expenses attributable to the business segments are allocated as mentioned in point no. 25 and 26 below.

18. Related Party Disclosure:

Related party identification and transactions are disclosed as per the requirement of AS-18 âRelated Party Disclosuresâ.

19. Operating lease

The Rental in respect of operating lease is charged to Revenue/Profit and Loss account.

20. Earnings per Share (EPS)

EPS (basic/diluted) is arrived at based on net profit after taxation attributable to equity shareholders to the basic/ weighted average number of equity shares.

21. Taxation

a) Tax expense for the year, comprises current tax and deferred tax.

b) Current income tax expense comprises taxes on income from operations in India and in foreign jurisdiction. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.

c) Minimum Alternative Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax on future income. Accordingly, MAT is recognized as an asset in the Balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

d) Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

e) Deferred tax assets relating to unabsorbed depreciation/business loss are recognized and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

f) Deferred tax assets relating to other timing difference are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

g) Refund of income tax is accounted on realization basis.

22. Intangible Assets

Intangible assets are stated at cost of acquisition less

accumulated amortisation. The same is amortised over a period of four years on straight line basis. Software development / acquisition costs, except those which meet the recognition criteria as laid down in Accounting Standard 26 (AS 26), are charged to revenue. Any additions to already existing assets are amortised prospectively over the remaining residual life of the assets.

23. Impairment of Assets:

The PPE and Intangible assets are assessed for any indication that an asset is impaired. In case the recoverable amount of the fixed assets is lower than its carrying amount, a provision is made for the impairment loss.

24. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Standalone financial statements.

25. Expenses of Management-Basis of Apportionment

Expenses of management includes provision for bad and doubtful debts and exchange gain/loss.Expenses which are solely and exclusively attributable to a specific Segment i.e.Line of Business (LOB) and which are specifically identifiable to that particular segment, are allocated to that segment and the remaining value of expenses of management are apportioned to the revenue accounts on the basis ofnet premium.

26. Segregation of Policy Holders and Share Holders funds:

Investment Assets includes policyholders as well as shareholders. Investment assets are bifurcated at the end of each quarter between shareholders and policyholders at ''fund'' level on notional basis in accordance with IRDAI guidelines.

27. Income from Investments -Basis of Apportionment

Investment Income (net of expenses) is apportioned between shareholders'' fund and policyholders'' fund in proportion to the balance of these funds at the beginning of the year.

Investment income (net of expenses) belonging to Policyholders is further apportioned to Fire, Marine and Miscellaneous segments in proportion to respective technical reserves balance at the beginning of the year. Policy holders fund for this purpose consist of estimated liability for outstanding claims including IBNR and IBNER, unexpired risk reserve (URR), Premium deficiency (if any). catastrophe reserve (if any) and Other Liabilities net of Other Assets (relating to policy holders) as per the guidelines of IRDAI.The residual consists of the shareholder fund.

1. Reinsurance Acceptance Transactions: Reinsurance acceptance transactions pertaining to the year have been booked for advices received up to April 10, 2023.

2. Premium Deficiency Reserve:

a) Unexpired premium reserve at revenue segment level is found to be sufficient to cover the expected claim cost as certified by the appointed actuary and the claims related expenses as estimated by the management. Hence no premium deficiency reserve is required to be provided during the year.

b) The reserve against cancellation of policies during free-look period under retail health policies for the period ended 31st March 2023, as certified by the actuary, is ? 150 Lakhs (PY 150 Lakhs).

3. Unamortized Pension liability as per IRDAI approval:

The Government of India by Gazette Notification no. S.O. 1627 (E) dated April 23, 2019 notified amendment under the General Insurance (Employees) Pension Scheme 1995, allowing one more pension option to the employees who have joined the Company before June 28, 1995. IRDAI vide its letter ref. -411/F&N(NL)Amort-EB/2019-20/124 dated July 07, 2020, had granted approval for the amortization of the pension liability on account of regular employees, over a period of not exceeding five years with effect from FY 2019-20. Accordingly, the balance of unamortized pension liability of ? 82,028.00 Lakhs as on April 1, 2022, would be amortized in the remaining two years. During the year ended March 31,2023, an amount of ? 41,014.00 Lakhs is charged to the revenue and the balance amount remaining to be amortized in next year is amounting to ? 41,014.00 Lakhs.

4. The Government of India vide Gazette Notification No. S.O. 4896, 4897 and 4898(E) dated 14th October 2022 notified the wage revision of employees with effect from August 01 2017. Further, IRDAI vide its letter ref: FNA/ GNI/COM/01/2022-23/66 dated 7th November 2022 granted approval for accounting of the wage arrears and corresponding incremental liabilities relating to post-Employment benefits as per Accounting Standard 15 on âEmployment Benefitsâ on account of wage revision through the Profit and Loss account instead of accounting the same as Operating Expenses relating to insurance business in the respective Revenue accounts. Accordingly, arrears of wage including additional AS-15 liabilities accrued as on March 31, 2023 amounting to ? 3,44,513.93 Lakhs has been included under âExpenses other than those related to insurance businessâ for the period ended March 31, 2023.

5. Taxation:

a) Income Tax: Provision for Tax ? 21,386.06 Lakhs (PY. ? 1173.29 Lakhs) (Current Tax) shown in Profit and Loss Account includes ? 2,364.72 Lakhs (PY ? 1,036.83 Lakhs) relating to foreign taxes.

b) The Company was claiming exemption u/s 10(38) of the Income Tax Act, 1961 till FY 2017-18 in respect

of profit on sale of investments. The deduction under section 10(38) has been disallowed by the department and the matter in certain years has been decided in favour of the company up-to Bombay High Court & ITAT while there are cases pending in appeal at different levels by the department as well as by the company. Finance Act, 2018 introduced grandfathering provisions u/s 55(2)(ac) of the Income Tax Act, 1961 in respect of profit on sale of investments and deduction for the same was being claimed by the company up-to the FY 202122 based on the earlier judicial pronouncements in its favour. The said deduction for FY 2018-19 has also been disallowed by the department and the company has filed appeal against the same which is pending. Effective current financial year, based on the opinion from Tax consultants and Senior Tax counsels, the Company has decided to not claim the deduction of grandfathering and the total income of the Company for the year has been computed as per the normal provisions of the Act.

Accordingly, the tax expenses of earlier years have been recalculated and as a result the company has utilized previous years carry forward losses and MAT credit available in earlier years in accordance with the Accounting Standard 22 âAccounting for Taxes on Incomeâ. The Company had not recognised MAT Credit in the earlier periods due to prudence and absence of convincing evidence of utilising it. The company has decided to utilize the available MAT Credit of previous years to the extent of eligible credit required to be set off against tax computed as per the normal provisions of the Act. Therefore, total MAT credit of ? 24,802.43 Lakhs which includes previous year utilisation amounting to ? 3113.47 Lakhs, has been recognised and utilized.

Based on the opinion of the Tax consultant and the judicial pronouncements available till date, the management is confident of matters relating to Section 10(38) will be decided in its favour and the MAT credit recognised will be fully realised.

c) The Income Tax Assessments of the Company have been completed up to assessment year 2019-20. Major disputed demands are in respect of profit on sale of investment, IBNR, expenses paid to Auto tie-up dealers. Based on the decisions of the appellate authority, the interpretations of the relevant provisions, the management of the Company is of the opinion that the demands are likely to be either deleted or substantially reduced and accordingly no provision has been made for the same.

d) Deferred Taxes:

The components of temporary differences resulting into Deferred Tax Assets/(Liabilities) are as under:

Particulars	Current Year (? in Lakhs)	Previous Year (? in Lakhs)
Fixed Assets	92.29	(216.35)
Leave Encashment	28,995.48	26,900.94
Estimated Disallowance u/s 40(a)(ia)	34.94	34.94
Total	29,122.72	26,719.53

i) A sum of ? 2,403.19 Lakhs (P.Y. ? 1,609.36 Lakhs) has been credited to the Profit and Loss Account on account of creation of deferred assets during the year.

ii) Deferred Tax Asset in respect of foreign branches does not have any timing difference other than fixed asset.

iii) The Company continues to recognise the deferred tax asset in respect of temporary difference mentioned in the above table, as in the opinion of the management there are sufficient evidence to establish the reasonable certainty of realisation of the deferred tax assets from the future taxable profits.

e) Taxation Laws (Amendment) Act, 2019 -

The Taxation Laws (Amendment) Act, 2019 was enacted on 11th December 2019. It amended the Income Tax Act, 1961 and the Finance Act (No. 2) Act, 2019. It provides domestic companies with an option to opt for lower tax rate, provided they do not claim certain deductions. The Company has not exercised the option to opt for lower tax rate and has presently considered the rate existing prior to the amendment. The Company shall evaluate the option to opt for lower tax rate once it utilises the entire carried forward losses and MAT credit available under the Income Tax Act.

6. Statutory Reserves relating to Foreign Branches:

The Company, in accordance with Oman Insurance Company Law, has created contingency reserve for claims for Muscat agency for 5 million Omani Riyal. The reserve closing balance as on March 31, 2023 is ? 10,672.12 Lakhs (PY ? 9,835.75 Lakhs). There is change in closing balance of ? 836.37 Lakhs (PY ? 341.63 Lakhs) reserve as compared to previous year due to change in foreign currency closing rate as on March 31,2023.

7. Title deeds of immovable properties:

Following are the immovable properties title deeds which are pending to be registered in the name of the Company:

a) Sixty Nine properties having book value (Gross block) ? 2049.81 Lakhs (P.Y. Sixty-Eight Freehold properties having book value ? 839.08 Lakhs) for which registration formalities are yet to be completed / title deeds are in process.

i) Out of which title deeds of Twenty-Eight

properties having book value of ? 162.70 Lakhs (PY. ? 162.70 Lakhs) are in the name of GIC and the Company is in the process to get it transferred in its name.

ii) Out of which Three properties having book value of ? 336.02 Lakhs (PY. ? 332.48 Lakhs) were received from Tariff Advisory Committee (TAC) and the registration formalities are still pending.

b) One Office property having book value ? 216.91 Lakhs (PY ? 216.91 Lakhs) for which agreement registration formality is pending.

c) One leasehold property having book value of ? 2.77 Lakhs (PY ? 2.77 Lakhs) where lease term expired and renewal process is pending with the concerned Government Authorities.

d) One Office freehold property having book value ? 752.33 lakhs (PY ? Nil) for which agreement registration formality is pending.

e) 32 properties having book value ? 156.66 lakhs (PY ?156.66 lakhs) are treated as having clear title based on the advocates opinion in view of documents like gazette notification issued by the Government, share certificate, municipal tax, property tax, registered/unregistered agreement being available in the records of the company.

Following are the properties for which legal proceedings are initiated by the Company for acquiring Physical Possession:

a) One leasehold land having book value of ? 1/- (P.Y. ? 1) is under litigation and Review Petition is pending with the Hon''ble Bombay High Court.

b) Out of total 28 properties owned by the Company, 13 properties are occupied by corporate tenants and 15 are occupied by Individual Tenants. Legal proceedings are in process against all 13 corporate tenants. Out of 15 Individual Tenants; legal proceedings are in process against 11. For remaining 4 Individual tenants eviction proceeding is contemplated.

c) One open plot having book value ? 23.84 Lakhs (P.Y. ? 23.84 Lakhs) jointly owned by four PSU Companies and title deed is in the name of GIC, is under litigation and Special Civil Application is pending before the Hon''ble Gujarat High Court.

d) One Lease hold property consisting of 123 tenements and 6 Godowns having book value of ? 3.42 Lakhs (P.Y. ? 3.42 Lakhs) is in the possession of the Company but occupied by inherent tenants.

8. Impairment of Assets:

During the year, the Company has reviewed its Property, Plants and Equipment (PPE) for impairment. In the opinion of the management, no provision for impairment loss is considered necessary.

9. Investments:

a) As certified by the Custodian, securities are held by the Company as on March 31, 2023. Variations and other differences, which include shortages, have been provided for.

b) Provision for standard assets @ 0.40% amounting to ? 4355.17 Lakhs (PY ? 4,093.32 Lakhs) has been made as per Insurance Regulatory and

Development Authority guidelines on (i) Term Loan (PFPS/DTL), (ii) Debentures, (iii) Infrastructure Investments, (iv) Bonds/Debentures of HUDCO, (v) Bonds/Debentures of Institutions accredited to NHB, (vi) Govt. Guaranteed Bonds/Securities and (vii) Housing and Firefighting Loans to State Governments.

c)	During the year, the Company has not undertaken any restructuring of corporate debt / loans etc			. as under:
	Sr. No.	Particulars	Current Year ( ? in Lakhs)	Previous Year ( ? in Lakhs)
		Total amount of assets subjected to restructuring	Nil	Nil
		The breakup of the same is given here under:
	(i)	Total amount of standard assets subjected to restructuring	Nil	Nil
	(ii)	Total amount of sub-standard assets subjected to restructuring	Nil	Nil
	(iii)	Total amount of doubtful assets subjected to restructuring	Nil	Nil
		Total	Nil	Nil
d)	Non-Performing Assets (NPA). i) Details of Non-Performing Assets (NPA)
	Sr. No.	Particulars	Current Year ( ? in Lakhs)	Previous Year ( ? in Lakhs)
	(i)	Opening Balance	65,206.42	68,974.71
	(ii)	Additions during the Year	78.55	-
	(iii)	Reductions during the Year	(15,577.74)	(3,768.29)
	(iv)	Closing Balance	49,707.24	65,206.42
		Percentage of Net NPAs to Net Assets	0.00%	0.00%
ii) Details of Provisions on NPA (other than standard provisions)
	Sr. No.	Particulars	Current Year ( ? in Lakhs)	Previous Year ( ? in Lakhs)
	(i)	Opening Balance	65,206.42	65,602.10
	(ii)	Incremental/(Reversal) Provision during the Year	(15,499.18)	(395.68)
	(iii)	Closing Balance	49,707.24	65,206.42

e) Short-term Investments (Schedule - 8) in debentures and other guaranteed securities include those, which are fully repayable in the next year. As regards those debentures and other guaranteed securities, which have fallen due and remain unpaid as on March 31, 2023, these have been shown under long-term investments, as their realisability is unascertainable. Necessary provision, wherever required, has been made.

f) The Company was having Investment in Debentures of Dewan Housing Finance Corporation Limited of ? 7,484.18 Lakhs which was fully provided for up to March 31, 2021. During the financial year 20212022, the Company had received ? 3,644.41 Lakhs as per the Interim Distribution Order of National Company Law Tribunal due to which the provision to the extent of amount realized was reversed to Profit and Loss Account and Unamortised premium of ?

22.92 Lakhs was written off and accordingly as on March 31, 2022 the Company had investments of ? 3,816.85 Lakhs which was fully provided for. During the current year, the company has written off the said investment of ? 3,816.85 Lakhs as per board approval and the corresponding provision has been reversed.

g) The Company was having Investment in Debenture of Reliance Home Finance Ltd. of ? 11,497.11 Lakhs which was fully provided for up to March 31, 2022. During the current year, the Company has received ? 3,186.17 Lakhs as per the order of National Company Law Tribunal as full and final settlement and accordingly the Company has written off remaining amount of ? 8,310.94 Lakhs as per board approval and the corresponding provision has been reversed.

10. 10. Reinsurance, Coinsurance, Inter Office, GST and

PMFBY Balances and old credit /debit balances:

a) a) The balance appearing in the amount due to/ due from persons or bodies carrying on insurance business including reinsurance business except Terrorism Pool and Nuclear Pool with GIC Re are subject to confirmation/ reconciliation and consequential adjustments, if any. These balances include ? 4,35,329.07 Lakhs (Net) Dr. (P.Y. ? 4,38,034.25 Lakhs Net Dr.) comprising of debit balances of ? 6,48,793.04 Lakhs (P.Y. ? 6,55,759.60 Lakhs ) and credit balances of ? 2,13,463.97 Lakhs (P.Y. ? 2,17,725.35 Lakhs) as per general ledger against which party-wise balances in the records indicate (Dr.) of ? 5,56,800.94 Lakhs (P.Y. ? 548,231.54 Lakhs Dr.) relating to 424 (P.Y. 950) parties and (Cr.) of ? 1,21,471.88 Lakhs (P.Y. ? 110,197.28 Lakhs Cr.) relating to 438 (PY 868) parties. Terrorism Pool balance as on 31.03.2023 stands at ? 2,55,305.37 Lakhs, Nuclear Pool balance stands at ? 16,639.34 Lakhs and MCET Pool stands at ? 89.22 Lakhs.

Precise gross debit and gross credit balances against each of such parties and age-wise analysis of these balances are also being compiled.

b) Write Off/Write Back of Reinsurance Balances:

During the current year, the Company has written off/write back non-moving reinsurance balances older than 10 years in accordance with the write off/write back policy approved by the Board on 21.03.2023. Consequently, an amount of ? 8,785.87 Lakhs (P.Y. Nil) is written back and an amount of ? 6,320.50 Lakhs (P.Y. Nil) is written off resulting in net write back of ? 2,465.37 Lakhs (P.Y. Nil).

c) Review of Provision for Bad Debts - Reinsurance Balances:

During the current year, Provision for Doubtful Debts was reviewed, based on which old provisions were reversed and fresh provision towards receivable balances which are non-moving for more than 5 years as on March 31,2023 (excluding PSU Insurers & GIC) was made amounting to ? 10,262.56 Lakhs. The Company has also maintained provisions of ? 4482.40 Lakhs towards PSU Insurers, Pool balances and Companies in liquidation resulting in an overall Provision for Doubtful Debts of ? 14,744.96 Lakhs (P.Y. ? 14,952.04 Lakhs ) as on March 31, 2023.

d) In respect of Coinsurance business, the balances with various Co-insurers represents receivable of ? 94,880.03 lakhs (P.Y. ? 2,18,888.65 Lakhs ) and payable of ? 61,971.69 lakhs (P.Y. ? 1,03,785.46 Lakhs ). These balances having been stated at net level; the gross receivables/payables have been compiled based on data received from concerned operating offices to the extent of available information. The reconciliation of balances relating to PMFBY scheme amounting to ? 37,077.39 lakhs receivable is also being done at different stages.

As regards to other balances, the company is in the process of matching and reconciling at various levels and its overall impact will be dealt with in due course. The process of obtaining confirmations of balances relating to PMFBY and other balances is also at different stages and entries remaining to be reconciled based on the confirmation are also being attended to. The age-wise break-up of the outstanding entries including those relating to crop insurance is being compiled. The policy-wise details of balances lying in the old accounting system are not available however these balances are netted for the purpose of reconciliation. In respect of PMFBY business, the accounting of transactions has been done to the extent of statement of accounts received with the leaders till the finalisation of account. The company has maintained provision of ? 9,827.30 lakhs (P.Y. ? 2,958.42 Lakhs ) including ? 4,512.06 lakhs of identified unreconciled debit balances against the net coinsurance of ? 32,908.33 lakhs (P.Y. ? 1,15,103.19 Lakhs ) as on March 31, 2023 which is based on the available information as considered by the management.

e) The reconciliation of various accounts relating to inter-office accounts of domestic and foreign operations amounting to ?10,126.60 Lakhs (Net Debit) comprising Gross Debit ? 47,950.29 lakhs and gross credit ? 37,823.69 lakhs (P.Y. 18,291.61 Lakhs - Net Debit (Gross debit ? 37,134.11 lakhs and gross credit ?18,842.50 lakhs), Control Accounts, very few bank accounts, loans and advances including those given to employees and other accounts including tax related balances is under progress, the impact of the above, if any, on the Standalone Financial results is unascertainable.

f) Various account codes relating to TDS, Advance Tax, Foreign Tax credits and other related accounts under reconciliation. GST TDS accounts, GST input tax credit in terms of GSTR2B with GSTR 3B is also under reconciliation. The impact of the above, if any, on the standalone financial statements are unascertainable. The company has been claiming foreign tax credits based on management certified data.

g) As per the consistent practice followed by the Company, interest accrued on employee loans is recognized to the extent recovered from the employee instead accrued to the account of the employee. The impact, if any, arising out of the above may not be material though the same is not identified.

h) Old balances other than policy holder dues mainly relating to various control accounts amounting to ? 4,906.92 Lakhs (Net) (P.Y. ? 5387.20 Net) outstanding for more than three years comprising of credit balances of ? 8746.63 Lakhs (P.Y. ? 13,533.46 lakhs) and debit balances of ? 3839.71 Lakhs (P.Y. ? 8146.26 Lakhs) has been credited to Profit &

Loss Account during the year. Party wise/ Vendor wise details in respect of these balances are being compiled and being reconciled.

i) In view of various accounts being reconciled and balances under confirmation, the effect of such pending reconciliation on compliance of tax laws has been ensured to the extent of available information and necessary adjustments /payments of any liability arising out of such reconciliation is to be done in due course.

j) An amount of ? 1,219.03 Lakhs had been received in previous periods in the bank accounts of the Nodal office of the Company in the State of Tamil Nadu towards farmer''s share of premium under Pradhan Mantri Fasal Bima Yojna (PMFBY). The Company had reconciled the enrolment data and premium data as per the Government portal amounting to ? 579.81 Lakhs up to March 31,2022, which had been accounted as premium income for the year ended March 31, 2022, in respect of amount received for the crop year 2017-18 and 2018-19. The remaining

amount of ? 639.22 Lakhs could not be reconciled by the Company due to lack of various details or improper details received till date and during the current financial year, the same has been accounted as unclaimed amount of policyholder.

11. Bhavishya Arogya Scheme:

The Company has under one of its old run-off schemes namely Bhavishya Arogya Scheme received premium in prior year amounting to ? 4,037.86 Lakhs which have been recognised as premium during the year ended March 31, 2021 in revenue account. As the claims pay out pattern has not yet stabilised under the said Scheme, the Company has maintained provision for claims liability amounting to ? 4,000.00 Lakhs (P.Y. ? 4,000.00 Lakhs) as IBNR for the year ended March 31, 2023.

12. Receipts & Payments Account:

Receipts & Payments Account / (Cash Flow Statement) is subject to reconciliation of various inter office and other accounts.

Mar 31, 2022

16 A. SIGNIFICANT ACCOUNTING POLICIES1. Accounting Convention

The Standalone financial statements are drawn up in accordance with the provisions of IRDAI (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 and circulars and/or guidelines issued in the context of preparation of the Standalone financial statements, and the provisions of the Companies Act 2013. The said statements are prepared on historical cost convention and on accrual basis, comply with accounting standards specified under Section 133 of Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and conform to practices prevailing in the General Insurance industry except as otherwise stated.

2. Use of Estimates

The preparation of Standalone financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of the Standalone financial statements. Actual results may differ from those estimates and assumptions. The estimates and assumptions used in the accompanying Standalone financial statements are based upon management''s evaluation of the relevant facts and circumstances as on the date of the Standalone financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.

3. Revenue Recognition

A. Premium

Any subsequent revisions to or cancellations of premium are recognized in the year in which they occur.

B. Commission

Commission Income on reinsurance cessions

is recognized as income in the year in which reinsurance premium is ceded.

Profit commission under reinsurance treaties wherever applicable, is recognized on accrual. Any subsequent revisions of profit commission are recognized for in the year in which final determination of the profits are intimated by reinsurers.

4. Premium Received in Advance

Premium received in advance represents premium received in respect of policies issued during the year, where the risk commences subsequent to the Balance Sheet date.

5. Reserves for Un-expired Risk/s

Unearned premium reserve is computed in accordance with the guidelines issued by IRDAI as under:

a) Marine Hull: 100% of the net written premium during the preceding twelve months;

b) In respect of other segments: on the basis of 1/365 method on contract period or period of risk basis for the respective policies, whichever is appropriate.

6. Reinsurance Accepted

Reinsurance returns have been incorporated for the advices received up to the date of finalization of accounts or on estimation basis wherever required.

7. Reinsurance Ceded

Reinsurance cessions are accounted for on the basis of actuals or on estimation basis wherever required.

8. Premium Deficiency

Premium deficiency is calculated where the sum of expected claims costs, related expenses and maintenance costs exceed the related unearned premium. The premium deficiency is recognized as per IRDAI guidelines and forms part of unexpired risk reserves.

9. Acquisition Costs

Acquisition costs are primarily related to acquisition of insurance contracts and have been expensed in the year in which they are incurred.

10. Incurred Claims

Claims are recognized as and when reported. Claims Paid (net of recoveries including salvages retained by the insured, includes interest paid towards claims and all expenses directly incurred in relation to their assessment) are charged to respective revenue accounts.

Claims outstanding at the year-end are provided based on survey reports, information provided by clients and other sources, past experience and applicable laws and includes:

â¢ In respect of direct business, claim intimations received up to the year-end;

â¢ In respect of reinsurance accepted, advices received as of different dates of subsequent year up to the date of finalisation of accounts or on estimation basis.

Provision for claims incurred but not reported (IBNR) and provision for claims incurred but not enough reported (IBNER).The said provisions have been determined by appointed actuary, which is in accordance with accepted actuarial practice, requirement of IRDAI (Preparation of Financial Statements and Auditor''s Report of Insurance Companies) Regulations, 2002 and the Master Circulars issued in the context of preparation of Standalone financial statements and stipulations of the Institute of Actuaries of India.

All the outstanding claims for direct business are provided net of estimated salvage (if any).

In respect of motor third party claims where court summons have been served on the Company without adequate policy particulars to establish liability of the Company, provision is made as under:

â¢ 1 /3rd of the estimated liability, for all such claims for which court summons have been served on the Company upto one year.

â¢ 100% of the estimated liability, where such claims are outstanding for more than one year.

Interest on motor accident claims tribunal (MACT) claims is provided based on the prevailing trends in the motor third party claim awards.

11. Salvage and Claim Recoveries

Recoveries of claims and sale proceeds on disposal of salvage are accounted on realization and credited to claims.

12. Receipt and Payment Account (Cash Flow Statement)

Receipt and Payment account/ Cash Flow Statement is prepared as per Direct method as required by part -I of Schedule -B of IRDAI regulation.

13. Property, Plant and Equipment

A) Property, Plant and Equipment (PPE)

i) PPE are stated at cost less depreciation. Cost is inclusive of borrowing cost and other incidental charges incurred up-to the date of installation/put to use.

ii) Lease payment for assets taken on operating lease are recognized as an expense in the revenue(s) accounts and profit and loss account over the lease term.

B) Depreciation

i) Depreciation on tangible assets is charged on Straight Line Method (SLM) as per the

useful life prescribed under Schedule II of the Companies Act 2013 and the residual value of the asset shall be Re 1/-.

ii) Lease hold properties are amortized over the lease period.

iii) Depreciation on PPE added/disposed-off during the year is provided on pro-rata basis.

iv) The residual value and useful lives are reviewed at each financial year end.

14. Foreign Currency Transactions

a) Reinsurance operations:

Revenue transactions of re-insurance in foreign currencies are converted at the average of buying and selling rates of exchange of each quarter in which they are accounted.

Monetary assets and liabilities of re-insurance in foreign currencies are converted at the closing rate.

b) Foreign operations:

i) As per the Accounting Standard (AS) 11 âThe Effects of Changes in Foreign Exchange Ratesâ, foreign branches/agencies are classified as ''non-integral foreign operations''.

ii) The assets and liabilities (including contingent liabilities), both monetary and non-monetary items, of the non-integral foreign operations are translated at the closing rate.

iii) Income and expense items of the non-integral foreign operations are translated at the average exchange rate of the year.

v) All resulting exchange difference is accumulated in a foreign currency translation reserve until the disposal of the net investment in the foreign operations.

c) Foreign investments transactions during the year are converted at the exchange rates prevailing as on the last day of the month of purchase or sale.

d) Other assets and liabilities in foreign currencies are converted at the average of buying and selling rates of exchange prevailing at the year end.

e) The exchange gain/loss due to conversion of foreign currencies other than relating to non-integral foreign operations is taken to revenue(s) account and profit and loss account as applicable.

15. Loans and Investments

a) Loans are measured at historical cost subject to

impairment. The Company reviews the quality of its loan assets and provides for impairment, if any.