4.16 Provisions, Contingent Liabilities and Contingent Assets
In accordance with Accounting Standard 29 - Provisions, Contingent Liabilities and Contingent Assets prescribed
by Companies (Accounting Standard) Rules 2021, to the extent applicable to the company, provisions are created
in respect of obligations as a result of past events and it is probable that an outflow of resources will be required
to settle the obligations, in respect of which a reliable estimate can be made. Provisions are not discounted to
their present value and are determined based on management estimate required to settle the obligation at
the Balance Sheet date. These will be reviewed at each Balance Sheet date and adjusted to reflect the current
management estimates.
Contingent losses arising from claims other than insurance claims, litigation, assessment, fines, penalties, etc. are
recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.
A disclosure for a contingent liability other than those under policies is made when there is a possible obligation
or a present obligation that may, but probably will not require an outflow of resources.
Show Cause Notices issued by various Government Authorities are not considered as Obligation. When the
demand notices are raised against such show cause notices and are disputed by the Company, these are
classified as disputed obligations under contingent liability.
When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources
is remote or cannot be ascertained, no provision or disclosure is made.
Contingent Assets are neither recognised nor disclosed in the Financial Statements.
4.17 Borrowing Cost:
Borrowing costs are charged to Profit and Loss Account in the period in which they are incurred.
4.18 Receipts and Payments Account (Cash flow statement):
(i) Receipts and Payments Account is prepared and reported as per AS-3 Cash flow statements using the
Direct Method, in conformity with para 2(a)(i) of the Master Circular on Actuarial, Finance and Investment
Functions of Insurers dated May 17, 2024, issued by the IRDAI.
(ii) Cash and cash equivalents comprises cash on hand and demand deposits with Banks. Cash equivalents
are short-term balances (with an original maturity of three months or less from the date of acquisition),
highly liquid investments that are readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
4.19 Transfer of amounts to Senior Citizen Welfare Fund
In accordance with the Master Circular on Protection of Policyholders' Interests, 2024, the Company transfers
amounts outstanding for a period of more than 10 years in Unclaimed Amount of Policyholders to the Senior
Citizen Welfare Fund (SCWF) on or before March 1st of each financial year.
Note :
a) The Company has disputed the demand raised by Goods and Service Tax Authorities for various years
and denial of refund claim amounting to H28,999 Lakhs (previous year: H28,813 Lakhs). The demand
orders majorly pertain to non-payment of GST on industry vide issues such as ITC denial on marketing
expense, GST on insurance premium for the policies issued to SEZ and other miscellaneous issues like
mismatch in GSTR3B vs GSTR2A, GST credit claimed under reverse charge mechanism. The department
has issued demand order on suo-moto basis without giving reasonable opportunity to be heard.
b) The Company has no demand raised by Income Tax Authorities to be classified as contingent liability.
In the view of the Company, and as advised by the counsel, the decisions are expected to be in favour
of the Company, based on the facts of the case and taxation law.
Other Matters:
Income Tax:
A. The Company had challenged, by way of Writ Petitions before the Hon'ble High Court of Madras, the
Income Tax Assessment Orders for Assessment Years 2009-10, 2010-11 and 2011-12 with demands
aggregating to H6,268 Lakhs on account of applying the provisions of Section 115 JB of Income
Tax Act, 1961. The Hon'ble High Court of Madras, accepting the pleas of the Company set aside
the impugned orders with the directions that the Income tax department could pass appropriate
orders after the Hon'ble Supreme Court gives its direction on the Special Leave petition pending
with the Hon'ble Supreme court.
The company has received an order from the Joint Commissioner of Income tax (OSD) on August
16, 2021 for the Assessment Year 2009-2010, granting a refund of H2,224 Lakhs. As per above
mentioned order the company is not liable to pay tax under provision of section 115JB and Income
tax demand of H2,458 Lakhs is nullified. The company has already received a sum of H781 Lakhs out
of Rs 2,224 Lakhs refund sanctioned as per order and is taking steps to obtain the balance due. As
there are no subsisting demands as on date, no provision is considered necessary in the books.
The principal commissioner of income tax, Chennai has initiated the revision proceedings under
section 263 of the Income tax Act. The department has mentioned that the order passed by Joint
commissioner of income tax (OSD) dated August 16, 2021 is erroneous and not in line the high
court judgement. The Company has filed writ appeal on April 12, 2023.
The Principal Commissioner of Income Tax, Chennai has set aside the order passed by the AO.
The Company has challenged the order and filed an appeal in ITAT on January 4, 2024.The ITAT
remanded back the order to AO. The AO on further scrutiny has confirmed that the refund issued
to the Company is genuine and for the balance refund the same will be passed once appropriate
orders of the Honorable Supreme Court gives its direction on the Special Leave petition pending
with the Honorable Supreme Court.
B. The Company has received an order dated December 27, 2019 for the Assessment year 2014-15
from the Office of Assistant Commissioner of Income tax raising a demand of H4,244 Lakhs
towards Income tax and Interest payable towards amount of unexpired risk reserve not being
appropriated in the Profit and Loss account. The Company has challenged the order before
Commissioner of income tax (Appeals), while having taken a stay for the demand from Hon'ble
High Court of Madras subject to payment of 10% tax amounting to H251 Lakhs. In the opinion of the
company, both on law and facts, the said demands are not sustainable and hence no provision
is considered necessary in the books.
Payment of Bonus Act:
The Payment of Bonus Act was amended with retrospective effect and resulted in increasing
the bonus liabilities. The additional liability on account of retrospective amendment is H148 Lakhs
(previous year: H148 Lakhs). The retrospective amendment is being challenged by various parties
in the High Court and based on the final outcome on determination of the court cases would be
accounted for on that date.
5.1.2 The assets of the Company are free from all encumbrances except for deposits of H3,265 Lakhs (previous
year: H1,926 Lakhs) with the courts against disputed claims. Pending disposal of the case, in the opinion of the
Company the said amount is considered good and recoverable.
Claims outstanding data excludes IBNR. The claims were outstanding predominantly due to non¬
submission of essential documents by the insured/Hospitals. Claims settled and remaining unpaid for
more than six months is HNIL (previous year: HNIL).
iii. Claims where the claim payment period exceeds four years:
As per Master Circular on Actuarial, Finance and Investment Functions of Insurers-2024 the claims
made in respect of contracts where claims payment period exceeds four years, are required to
be recognised on actuarial basis. Accordingly, the Appointed Actuary has certified assuming 'NIL'
discount rate.
C) All investments are made in accordance with Insurance Act, 1938 and Insurance Regulatory and
Development Authority of India (Actuarial, Finance and Investment Function of Insurers), 2024 and are
performing investments.
D) Investment income has been allocated on the basis of the ratio of average policyholder's Funds to
average shareholder's Funds, average being the balance at the beginning of the year and at the end
of the reporting period.
E) REPO / Reverse repo / TREPS Lending / Borrowing transactions REPO / Reverse repo transaction:
5.1.9 Allocation of expenses
The company has allocated expenses of management as per the policy approved by the Board of Directors.
Directly allocable expenses:
Expenses which are directly allocated to specific segments are recorded and disclosed under the respective
segments. lt includes commission to the insurance agents, insurance intermediaries, brokerage, etc.
lndirect expenses - Apportioned
Expenses which are not directly identifiable to specific segments are apportioned among segments based
on Gross written premium. lt includes employees' remuneration, advertisement and publicity, depreciation,
information technology expenses, communication expenses, operational expenses, other administrative
expenses, net of transfer of claims cost, incentive payable to field staff etc.
During the year, the company has transferred from Operating Expenses (Ref: Schedule 4 of the Financial
Statements under "Others - In House Claims Processing Cost") to Claims cost an amount of H18,408 Lakhs
(previous year: H16,137 Lakhs) being 1% of the gross premium (excluding co-insurance inward and policies/
claims processed by outsourced Third Party Administrators (TPAs)) pertaining to Health & Personal Accident
(PA) segment towards In House Claims processing expenditure based on the Insurance Regulatory
and Development Authority of India (Expenses of Management, including Commission, of Insurers)
Regulations, 2024
B) Defined Benefit Plan - Gratuity
The Company has a defined gratuity benefit plan payable to every employee on separation from
employment. The Company makes the contribution to an approved gratuity fund which is maintained
and managed by Life Insurance Corporation of India and Kotak Mahindra Life Insurance Company.
Reconciliation of opening and closing balance of the present value of the defined benefit obligation
for gratuity benefits of the Company is given below:
C) Employee Stock Option plan (ESOP)
The Company has introduced Employee Stock Option plan (ESOP 2019) in the financial year 2019-20
effective from August 6, 2019 (date of grant) and Employee Stock Option plan (ESOP 2024) in the
financial year 2024-25 effective from July 28, 2025 (date of grant). The Company has granted Stock
Options to employees in compliance with the Securities and Exchange Board of India (Share Based
Employee Benefits and Sweat Equity) Regulations 2021. The ESOP Plan 2019 was modified pursuant
to the resolutions passed by the Board of Directors of the company in the meeting held on May 23,
2021, September 28, 2021 and January 25, 2022 and by the Shareholders of the Company in an extra
ordinary general meeting held on July 16, 2021 , October 4, 2021 and March 03, 2022. Under the ESOP
2019 and ESOP 2024, the company has given options to eligible employees to acquire equity share in
the Company. The options have been granted under various tranches.
Under ESOP 2019, during the year ended as of March 31, 2026 the company had granted Nil No. of options
(previous year: 3,51,679 Options) which will vest over a period of 5 years in the ratio 20:20:20:20:20
starting at the end of the 1st year from the date of grant.
Under ESOP 2024, during the year ended as of March 31, 2026 the company had granted 52,35,764 No.
of options which will vest over a period of 4 years in the ratio 25:25:25:25 starting at the end of the 1st
year from the date of grant.
Out of the ESOP 2019 options issued up-to the Year ended March 31, 2026: 6,38,589 Options (Net of
Withdrawn Option) (previous year: 6,54,189 Options), were issued for exercise price which is less than
the fair value of the option.
Fair Value method (Black Scholes method)
The fair value of options used to compute Pro-forma net profit / (loss) and the earnings per Equity
Share have been estimated on the date of the grant using Black-Scholes model.
The key assumptions used in Black-Scholes model for calculating fair value as on the date of the grant
during the year are:
benefits that are accounted as per Accounting Standard (as) 15 (Revised), "Employee Benefits", which
is determined on an overall Company basis.
C. Qualitative Disclosures:
1. Information relating to the composition and mandate of the nomination and remuneration committee:
Nomination and Remuneration Committee is the Committee of Board of Directors of the Company,
constituted in accordance with the provisions of Section 178 of the Companies Act, 2013.
As on March 31, 2026, the composition of Nomination and Remuneration Committee has been as follows:
2. Information relating to the design and structure of remuneration policy and key features and objectives
of the policy:
The Nomination and Remuneration Committee, while formulating the above policy, ensured that:
i) the level and composition of remuneration be reasonable and sufficient to attract, retain and
motivate directors of the quality required to run the Company successfully;
ii) relationship of remuneration to performance is clear and meets appropriate performance
benchmarks; and
iii) remuneration to directors, key managerial personnel and senior management involves a
balance between fixed and incentive pay reflecting short and long term performance objectives
appropriate to the working of the Company and its goals;
3. Description of the ways in which current and future risks are taken into the account in the
remuneration policy:
Nomination and Remuneration Committee (NRC) include following parameters as measurements to the
annual performance evaluation of Directors, Key Managerial Persons (KMPs) and Senior Management.
• Remuneration is adjusted for all types of risk,
• Remuneration outcomes are symmetric with risk outcomes,
• Payment of remuneration are sensitive to the time horizon of the risk, and
• The mix of cash, equity and other forms of remuneration are consistent with risk alignment.
Apart from the above, the NRC and the Risk Management Committee of the Board shall from time to
time ensure that the remuneration is risk adjusted through quantitative and qualitative measures of
credit, market, and liquidity risks.
4. Description of the ways in which the insurer seeks to link performance, during a performance
measurement period, with levels of remuneration:
The variable pay of Key Managerial Personnel (KMPs) and Senior Management is directly linked to the
overall performance of the Company. The Nomination and Remuneration Committee (NRC) evaluates
performance against defined parameters including financial soundness, compliance with regulatory
requirements, claims efficiency, grievance redressal, renewal rates, reduction in unclaimed amounts,
and adherence to applicable laws. Based on this evaluation, variable pay is determined and fixed pay
revisions are considered.
5.2 Other disclosures:
5.2.1 Pursuant to IRDAI regulation of Insurance Regulatory and Development Authority of India (Actuarial, Finance
and Investment Function of Insurers), 2024; claim reserves are determined as the aggregate amount of
Outstanding Claim Reserve and Incurred but Not Reported (IBNR) claim reserve for the lines of business as
applicable to the company.
5.2.2 Provision for Free Look period
The provision for Free Look period of H110 Lakhs (previous year: H158 Lakhs) is duly certified by the
Appointed Actuary.
5.2.3 Operating Lease
Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor
are classified as operating leases. Lease payments debited to the revenue account during the year ended
March 31, 2026 amounts to H10,912 Lakhs (previous year: 9,516 Lakhs).
5.2.4 Micro and Small scale business entities
As per the provisions of the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED) the Micro
and Small Enterprises have been identified by the Company from the available information. Based on the
information available with the Company, the balance due to micro and small enterprises as defined under
the MSMED Act, 2006 is as follows:
5.2.5 Segmental reporting
Primary reportable segments: The Company carries on non-life insurance business in India. The Company
has provided primary segmental information, in Annexure 1, as required by Accounting Standard 17 -
'Segment Reporting' issued by ICAI, read with Accounting Regulations.
Secondary reportable segments: There are no reportable geographical segments since the Company
provides services only to customers in the Indian market or Indian interests abroad and does not distinguish
any reportable regions within India.
5.2.10 Income Tax
Income Tax provision for the year ended March 31, 2026 has been determined by applying lower tax rate of
25.168% u/s 115BAA of Income Tax Act, 1961. Similarly, deferred Tax is also determined applying the same rate.
Deferred Tax
In accordance with the Company's Accounting policy for Deferred Taxation, the net deferred tax Asset of
H35,606 Lakhs has been recognized (previous year: H35,120 Lakhs).
5.2.11 Terms of Borrowings
Non- Convertible debentures
On September 29, 2021, the Company had issued Listed Non-convertible debentures for H40,000 Lakhs on
private placement basis at an interest rate of 8.75% payable annually and redeemable in 7 years.
On October 28, 2021, the Company had issued Listed Non-convertible debentures for H7,000 Lakhs on private
placement basis at an interest rate of 8.75% payable annually and redeemable in 7 years.
During the year ended on March 31, 2026 the Company has incurred interest on non-convertible debentures
to the extent of H4,124 Lakhs (previous year: 4,093 Lakhs).
Amortization of premium pertaining to revenue a/c and the profit & loss a/c have been adjusted against
Interest, Dividend & Rent credited to the respective accounts.
5.2.13 During the financial year under review, in respect of Expenses of Management, the company has not
exceeded the sub segment limits prescribed under section 40C of The Insurance Act 1938, read with
Insurance Regulatory and Development Authority of India (Expenses of Management, including Commission,
of Insurers) Regulations, 2024.
5.2.15 Corporate Social Responsibility (CSR)
The Gross amount required to be spent by the Company on CSR initiatives is H1,878 Lakhs (previous year: H372
Lakhs). The amount excess spent in the preceding 3 financial years is H188 Lakhs.
As per the provisions of the Companies Act 2013, the excess spent amount shall be set off against the
immediate succeeding 3 Financial Years. Accordingly, H188 Lakhs have been adjusted against the required
to be spent and the HNil have carried forward to next financial year for setting off as per the provisions.
The amount spent during the year is as follows:
including GST
During the year, the Company has spent part of the required CSR amount. The unspent portion relating to
ongoing projects, amounting to H819 Lakhs, has been transferred to a separate bank account in compliance
with Section 135(6) of the Act.
5.2.16 The company does not have any long term contracts (other than long term insurance contracts) wherein the
company is required to make provision towards any foreseeable losses. In respect of long-term insurance
contracts, actuarial valuation of the liability as at March 31, 2026 is HNIL (previous year: HNIL ) There are no
derivative contracts.
5.2.17 Effective November 21, 2025, the Government of India consolidated 29 labour laws into four Labour Codes—
the Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020) and Occupational
Safety, Health and Working Conditions Code (2020)—collectively referred to as the 'New Labour Codes'. The
New Labour Codes have increased the Company's employee benefit provisions due to the revised definition of
wages and expanded eligibility criteria. Based on Actuarial Reports, the Company recognized an incremental
gratuity expense of H18.63 crores in the Statement of Profit and Loss for the year to date ended March 31,
2026, resulting in reduced profit and a corresponding increase in the gratuity obligation. The Company will
continue monitor updates to the New Labour Codes and revise its estimates when the Government issues
the related Rules or clarifications. Any additional impacts will be assessed, and appropriate accounting
effects will be provided for such developments as needed.
5.2.18 Foreign currency exposure
Foreign currency exposure as at March 31, 2026 and March 31, 2025 that has not been hedged by any
derivative instrument or otherwise is estimated as follows:
5.2.19 Investor Education & Protection Fund:
For the year ended March 31, 2026, the company has transferred HNIL (previous year: HNIL) to the Investor
Education & Protection Fund.
5.2.20 The Company has used accounting software for maintaining its books of account that includes a feature for
recording an audit trail (edit log). This feature has operated throughout the year for all relevant transactions
recorded in the software. There were no instances of tampering with the audit trail during the year. The audit
trail has been preserved by the Company in accordance with record retention requirements except for
SAP HANA.
5.2.21 Pursuant to the notification IRDAl/Reg/2/216/2026 dated March 30, 2026 issued by the Insurance Regulatory
and Development Authority of India (IRDAI), the Company will adopt Indian Accounting Standards (Ind AS)
with effect from the financial year 2026-27 having transition date as April 01, 2025. The notification amends
the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 and requires insurers to
prepare and present financial statements in accordance with applicable Ind AS, along with the prescribed
principles and policies.
5.2.22 No funds have been advanced or loaned or invested (either from borrowed funds or share premium
or any other sources or kind of funds) by the Company to or in any other persons or entities, including
foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
5.2.23 No funds have been received by the Company from any persons or entities, including foreign entities
("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall,
whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.
5.2.24 Previous Year (PY) figures have been regrouped in the respective schedule and notes wherever necessary, to
conform to current year groupings. The change has no effect on the statement of financial position:
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