2. Significant accounting policies
A. Basis of preparation
These financial statements have been prepared
and presented on a going concern basis in
accordance with Generally Accepted Accounting
Principles followed in India under the historical
cost convention, unless otherwise specifically
stated, on an accrual basis and in accordance
with the applicable provisions of the Insurance
Regulatory and Development Authority Of
India (Actuarial, Finance and Investment
Functions of Insurers) Regulations, 2024 (the
"IRDAI Actuarial & Allied Functions Regulations
2024”) read with Master Circular issued their
under (Actuarial & Allied Functions, 2024)’,
the Insurance Act, 1938 (the "Insurance Act”),
the Insurance Regulatory and Development
Authority Act, 1999 (the "IRDAI Act”), circulars
/ notifications issued by IRDAI from time to time,
the Accounting Standards (AS) specified under
Section 133 of the Companies Act, 2013 (the
"Companies Act”), to the extent applicable and
the relevant provisions of the Companies Act
and orders / directions prescribed by the IRDAI
in this behalf and current practices prevailing
within the insurance industry in India, to the
extent applicable to the financial statements.
B. Use of Estimates
The preparation of the financial statements
in conformity with the Generally Accepted
Accounting Principles in India ("Indian GAAP”)
requires management to make judgments,
estimates, and assumptions that affect the
reported amounts of assets and liabilities
(including contingent liabilities) as at the
date of the financial statements, and the
reported amounts of income and expenses
for the reporting period. The estimates
and assumptions used in the preparation
of the financial statements are based on
management’s evaluation of the relevant
facts and circumstances up to, and as of,
the date of the financial statements. Actual
results may differ from those estimates.
Any revision to accounting estimates is
recognized prospectively.
C. Revenue recognition
Premium Income
Premium including reinsurance accepted (net of
Goods and Services Tax), other than for Long¬
term (with a policy term of more than one year)
motor insurance policies for new cars and new
two-wheelers sold on or after September 01,
2018 and Long-term non-motor insurance
policies issued on or after October 01, 2024, is
recognised as income on receipt of complete
information at the commencement of risk
and for instalment policies it is recognised on
instalment receipt. Any revisions in premium
amount are recognised in the period in which
it occurs and over the remaining period of the
policy or period of risk, as appropriate.
In accordance with
(a) IRDAI notification no. IRDAI/NL/ClR/
MOT/08/2018 dated August 28, 2018,
multi-year premium received (net of Goods
& Services Tax) for third party liability
coverage under long-term motor insurance
policies for new cars and new two wheelers
sold on or after September 01, 2018, is
recognized as income on a year-to-year
basis over the policy period on 1/n basis
where ‘n’ denotes the term of the policy
in years;
(b) IRDAI notification no. IRDAI/ACTL/CIR/
MISC/80/05/2024 dated May 17, 2024,
multi-year premium received (net of Goods
& Services Tax) for certain applicable long¬
term non-motor insurance policies sold on
or after October 01, 2024, is recognized as
income on a year-to-year basis over the
policy period on 1/n basis where ‘n’ denotes
the term of the policy in years.
At the period’s end, estimates are made for
reinsurance statements of accounts not yet
received, based on available information and
current trends. Any revisions in premium amount
are recognised in the period in which it occurs
and over the remaining period of the policy or
period of risk, as appropriate.
Reinstatement premium is recorded as and
when such premiums are recovered.
Premium earnings including for reinsurance
accepted business (net of Goods and Service
Tax) are recognised over the period of policy or
period of risk, as appropriate. The Reinstatement
premium is allocated on the same basis as
the original premium over the balance term
of the policy or period of risk, as appropriate.
Any subsequent revision to the premium is
recognised in the period in which it occurs and
over the remaining period of the policy or period
of risk, as appropriate.
Subsequent adjustments arising on
cancellations of policies are recognised in the
period in which they are cancelled.
Premium received in advance
This represents Premium on policies booked
during the current period which have risk
inception date subsequent to balance sheet
date and premium allocated to subsequent
periods for multi-year motor insurance policies
for new cars and new two wheelers issued on or
after September 01, 2018 and other Long-Term
Product Insurance policies issued on or after
October 01, 2024.
Income earned on investments
I nterest income is recognised on accrual basis.
Accretion of discount and amortisation of
premium relating to debt securities is recognised
over the holding / maturity period on constant
yield-to-maturity basis.
Dividend income is recognised when the right to
receive the dividend is established.
The realised gain / loss on the transfer / sale of
debentures and bonds is the difference between
the transfer / sale price and the net amortised
cost / carrying book value, which is computed
on weighted average basis as on the date of
transfer/sale. Sale consideration for realised
gain / loss is net of brokerage and taxes, if any.
The realised gain / loss on mutual funds,
additional tier 1 (Basel III compliant) bonds,
Real estate investment funds, Exchange traded
funds, Alternative Investment Funds and listed
equity shares is the difference between sale
consideration and carrying cost as on the date
of sale, determined on a weighted average
cost basis and includes accumulated changes
previously recognised under "Fair Value Change
Account”.
Commission on reinsurance ceded
Commission on reinsurance ceded is recognised
in the period in which reinsurance premium
is ceded.
Profit commission under Re-Insurance
Treaties wherever applicable is estimated and
recognised as income on earned premium, as per
calculation methodology and terms mentioned
in the Treaty. These estimates are reviewed at
each reporting date.
Adjustment to the scaled commission under
reinsurance treaties, wherever applicable, is
first assessed once all risks under the contracts
are ceded and thereafter reviewed at the end
of each reporting period and is recognised
as income / expenditure and included under
commission on reinsurance ceded.
D. Reinsurance premium ceded
Reinsurance premium ceded, other than for
long-term motor insurance policies for new
cars and new two wheelers sold on or after
September 01, 2018 and long-term non-motor
insurance policies sold on or after October 01,
2024, is accounted for in the period in which the
risk commences and over the period of risk.
In the case of long-term motor insurance policies
for new cars and new two-wheelers sold on
or after September 01, 2018 and long-term
non-motor insurance policies sold on or after
October 01, 2024, the reinsurance premium
ceded is recognised on the insurance premium
income allocated for the year simultaneously
along with the recognition of the insurance
premium income.
Unearned premium on reinsurance ceded is
carried forward to the subsequent accounting
period and is set off against related unearned
premium income.
Any subsequent revisions to or cancellations
of premiums are accounted for in the period in
which they occur.
Premium paid/payable for excess of loss
reinsurance cover (including catastrophic
cover) is accounted as per the terms of the
reinsurance arrangements.
E. Reserve for unexpired risk
Reserve for unexpired risk represents that part
of the net premium written which is attributable
to and allocated to the succeeding accounting
periods. In accordance with Circular No. IRDAI/
Reg/10/204/2024 dated March 22, 2024 and
Master Circular on IRDAI Actuarial and Allied
Functions Regulations, 2024, reserve for
unexpired risk is calculated based on 1/365
method in all segments subject to minimum of
100% of net premium written with respect of
Marine Hull policies written during the period
and are unexpired as on Balance Sheet date.
Reserve for unexpired risk on reinsurance
accepted on account of terrorism pool is
calculated as provided in Note 2. Q below.
F. Premium deficiency
Premium deficiency is recognised if the sum
of expected claim costs, related expenses and
maintenance costs (related to claims handling)
exceeds the related reserve for unexpired risk.
Premium deficiency is assessed at each balance
sheet date and is recognised at the segmental
revenue account(s) level. The expected claims
including related expenses and maintenance
costs (related to claims handling) for premium
deficiency reserve computation are estimated
and duly certified by the Appointed Actuary.
G. Claims incurred
Claims incurred comprises of claims paid (net
of reinsurance, salvage, co-insurance and
other recoveries), change in estimated liability
for outstanding claims made following a loss
occurrence reported, change in estimated
liability for claims incurred but not reported
(IBNR) and claims incurred but not enough
reported (IBNER) and specific settlement costs
comprising survey, legal, investigation, other
directly attributable and allocated expenses.
Provision is made for the estimated value of
outstanding claims at the Balance Sheet date
net of reinsurance, salvage, co-insurance and
other recoveries. Such provision is made on the
basis of the ultimate amounts that are likely
to be paid on each claim, as initially estimated
by the management in light of past experience
and progressively modified for changes
as appropriate, on availability of further
information and include claim settlement costs
likely to be incurred to settle outstanding claims.
Claims (net of amounts receivable from
reinsurers / co-insurers) are recognised on
the date of intimation based on estimates
from surveyors / insured in the respective
revenue accounts.
Adjustments required on account of negotiated
settlements of outward re-insurance contracts
are recognized in the period in which settlements
are finalized and added to ‘claims paid - re¬
insurance ceded’.
Adjustments required on account of negotiated
settlements of co-insurance/inward re¬
insurance contracts are recognized in the period
in which the settlements are finalized and
added to/reduced from ‘claims paid- Direct’/
‘claims paid - re-insurance accepted”, as the
case may be.
The Estimated liability for outstanding claims
at balance sheet date is recorded net of claims
recoverable from/payable to co-insurers/
reinsurers and salvage to the extent there is
certainty of realisation.
At each balance sheet date, the estimated liability
for claims incurred but not reported (IBNR)
and claims incurred but not enough reported
(IBNER) at Gross and Net level is estimated
by the Appointed Actuary in compliance
with guidelines issued by Master Circular on
Actuarial, Finance, and Investment Functions of
Insurers and applicable provisions of Actuarial
Practice Standard 21 issued by the Institute of
Actuaries of India. The Appointed Actuary uses
generally accepted actuarial methods for each
product category as considered appropriate
depending upon the availability of past data
as well as appropriateness of the different
methods to the different lines of businesses.
H. Acquisition costs
Acquisition costs are defined as costs that vary
with and are primarily related to the acquisition
of new and renewal insurance contracts viz.
commission. These costs are expensed in the
period in which they are incurred.
I. Borrowings
Borrowing costs are charged to the Profit
and Loss account in the period in which they
are incurred.
J. Property, Plant and Equipment and
Intangibles
Property, Plant and Equipment are stated at
the cost of acquisition (including incidental
expenses relating to acquisition and installation
of assets) and expenses directly attributable to
bringing the asset to its working condition for
its intended use, less accumulated depreciation
and impairment of assets, if any.
"Intangible assets are stated at the cost of
acquisition/development/improvement less
accumulated amortisation and impairment,
if any. Significant direct expenditure on
improvement to software is capitalised when
it is probable that such expenditure will enable
the software to generate future economic
benefits in excess of its originally assessed
standard of performance and such expenditure
can be measured and attributed to the software
reliably. Indirect expenditure and overheads are
not capitalized.”
Capital work in progress includes Property, Plant
and Equipment and Intangibles not ready for the
intended use and are carried at cost, comprising
direct cost and related incidental expenses.
The depreciable amount for assets is the cost of
an asset or other amount substituted for cost,
less its estimated residual value, if any. The
Company has, considering expected economic
values post-retirement and other technical
factors, estimated that the residual value of
Property, Plant and Equipment and Intangibles
to be Nil.
Depreciation / amortisation on assets is
provided on the straight-line method over the
estimated useful life
Depreciation / amortisation on assets purchased
/ disposed-off during the period, has been
provided on pro-rate basis.
The estimated useful life used for the calculation
of depreciation or amortisation is as follows for
various classes of assets -
Intangible assets comprising computer software
& improvements are amortised over a period of
3 years, being the management’s estimate of
the useful life of such intangibles
Assets costing less than ^5,000 are fully
expensed off during the year of purchase.
The estimated useful life of Property, Plant and
Equipment and Intangibles & residual value are
reviewed at the end of each financial year and
the depreciation and amortisation period is
revised to reflect the changed pattern, if any.
Impairment of Property, Plant and
Equipment’s and Intangibles
The carrying values of Property, Plant and
Equipments and Intangible are reviewed at
each balance sheet date for impairment, if and
when there are indications thereof. Impairment
occurs when the carrying value of property,
plant and equipment/intangible exceeds its
value-in-use calculated as the present value
of future cash flows expected to arise from its
continuing use and its eventual disposal. The
impairment loss to be expensed is determined
as the excess of the carrying amount over the
higher of the it’s net sales price or value-in¬
use, as determined above. After impairment,
depreciation/amortisation is provided on the
revised carrying value of the property, plant and
equipment/intangible over it remaining useful
life. Impairment loss previously expensed is
reversed in the subsequent period to the extent,
the amount that is higher of it’s net sales price or
value-in-use from it’s carrying amount.
C. Operating leases
Leases where the lessor effectively retains
substantially all the risks and benefits of
ownership of the leased assets are classified
as operating leases. Operating lease payments
made towards assets/premises are recognised
as an expense in the revenue account(s) and
adjustment for lease equalisation reserve in
accordance with generally accepted accounting
principle is charged to profit and loss account,
as per lease terms. These expenses are recorded
net of rental income recovered through sub¬
leasing.
Initial direct costs incurred specifically for an
operating lease are charged to the revenue
account(s) and profit and loss account as and
when those are incurred.
L. Foreign currency transactions
Transactions denominated in foreign currencies
are recorded in Indian Rupees at the exchange
rate prevailing on the date of the transaction.
At each balance sheet date, monetary items
denominated in foreign currencies are converted
into rupees equivalents at the exchange rate
prevailing as of that date.
All exchange differences arising on settlement/
conversion of foreign currency transactions are
included in the revenue account(s) or profit and
loss account, as the case may be in the period in
which they arise.
M. Investments
Initial Recognition
Investments are made and accounted for in
accordance with the Insurance Act, 1938, IRDAI
Actuarial and Allied Functions Regulations,
2024, as amended, the IRDAI Financial
Statements Regulations and various other
circulars / notifications issued by the IRDAI in
this context from time to time.
Investments are recorded at cost on trade /
acquisition date, which includes brokerage,
taxes and stamp duty and exclude broken
period interest.
Classification
Investments maturing (including call option
date) within twelve months from the balance
sheet date and investments made with specific
intention to be disposed off within twelve
months from the balance sheet date are
classified as short-term investments.
Investments other than short-term investments
are classified as long-term investments.
Investment funds are segregated into
policyholders’ funds and shareholders’ funds at
the security level in compliance with Circular No.
IRDA/F&A/CIR/CPM/056/03/2016 dated April
04, 2016.
Any deficit / shortfall in Policyholders’
Investments arising out of the loss in the
Revenue Account(s) or otherwise is recouped by
the transfer of securities from the Shareholders’
Investments to the Policyholders’ Investments
on a half-yearly basis.
Policyholders’ fund is the sum total of a)
outstanding claims including IBNR (incurred but
not reported) & IBNER (incurred but not enough
reported), b) unexpired premium reserve, c)
premium deficiency, if any, d) catastrophe
reserve, if any, and e) other liabilities net off other
assets. Other liabilities comprise of premium
received in advance, unallocated premium,
balance due to other insurance companies, and
due to policyholders. Other assets comprise of
outstanding premium, dues from other entities
carrying on insurance business (including
reinsurers), balance with Terrorism Pool.
Shareholders’ funds comprise of share
capital, including reserves and surplus, less
accumulated losses, if any, preliminary expenses
and miscellaneous expenditure to the extent not
written off or adjusted.
Valuation
All debt securities excluding for additional tier 1
(Basel III compliant) perpetual bonds and non¬
convertible preference shares are considered
as ‘held to maturity’ and accordingly stated
at historical cost subject to amortisation of
premium or accretion of discount on constant
yield to maturity basis in the Revenue Account(s)
and in the Profit and Loss Account over the
period of maturity / holding.
I nvestments in mutual funds, additional tier 1
(Basel III compliant) bonds, listed equity shares,
Real estate investment funds, Exchange traded
funds and Alternative Investment Funds are
valued at fair value through Fair Value Change
Account as at balance sheet date.
Fair value for listed equity investments, Real
estate investment funds & Exchange traded
funds is derived basis last quoted closing price
on the National Stock Exchange (NSE) being
selected as primary exchange as required by
IRDAI Actuarial and Allied Functions Regulation
2024, as amended. In case if stock is not listed
on NSE, the last quoted closing price from BSE
Limited is taken for fair valuation.
Investment in unlisted shares is stated at
historical cost.
The fair value of mutual funds is derived basis
of NAV published by the Association of Mutual
Funds of India (AMFI).
The fair value of Alternate Investment fund
is derived basis of NAV published by the
fund house.
Valuation of additional tier 1 (Basel III compliant)
bonds is done as published by CRISIL which in
turn are based on market yield rates published
by rating agency registered with the Securities
and Exchange Board of India (SEBI).
Fair value change account
In accordance with the IRDAI Actuarial and
Allied Functions Regulations 2024, any
unrealised gain/loss arising due to change in fair
value of mutual fund investments, additional
tier 1 (Basel III compliant) bonds, listed equity
shares, Real estate investment funds, Exchange
traded funds and alternative investment funds
are accounted in ‘Fair value change account’
and carried forward in the balance sheet and is
not available for distribution as dividend.
Impairment of investments
The Company assesses whether any other
than temporary impairment has occurred on its
investments at each balance sheet date. If any
such indication exists, then the carrying value
of such investment is reduced to its recoverable
amount/market value on the balance sheet
date and impairment loss is recognised in the
Profit and Loss Account. If, at a balance sheet
date, there is any indication that a previously
assessed impairment loss no longer exists then
the impairment loss, earlier recognised in the
Profit and Loss Account, is reversed and the
investment is restated to that extent.
N. Employee benefits
Short-term employee benefits
All employee benefits payable within twelve
months of rendering of service are classified
as short-term employee benefits. Benefits such
as salaries, bonuses, short-term compensated
absences and other non-monetary benefits
are recognised in the period in which the
employee renders the related service. All short¬
term employee benefits are accounted on an
undiscounted basis.
Long-term employee benefits
The Company has both, defined contribution
and defined benefit plans. The plans are
financed by the Company and in case of some
defined contribution plans, by the Company
along with its employees.
Defined contribution plans
These are plans in which the Company
contributes prescribed percentages of the
qualifying salary of eligible employees, on a
monthly basis to funds managed by Employee
Provident Fund Organisation in accordance
with the relevant regulations and does not have
any legal or informal obligation to pay additional
sums. These comprise of contributions to the
employees’ provident fund and family pension
fund. The Company’s payments to defined
contribution plans are expensed off during the
period in which employees perform the services.
Defined benefit plans
The company is required to pay prescribed
percentage of qualifying salary for every
completed year of service as Gratuity to
employees on their separation/retirement after
continuous service of five years subject to a
maximum of Rs. 20 Lakhs, in accordance with
the relevant regulations.
Expenses for this defined benefit statutory
gratuity are calculated as at each Balance
Sheet date based on actuarial valuation carried
out using the Projected unit credit method by
an independent external actuary. Actuarial
losses and gains are charged off to Revenue
account(s)/Profit and loss account.
Other long-term employee benefits
Provision for other long-term benefits includes
accumulated compensated absences that are
entitled to be carried forward for availment in
service or encashment at the time of separation.
The Company’s liability towards these other
long-term benefits are accrued based on
actuarial valuation carried out using the
Projected unit credit method by an independent
external actuary. Actuarial losses and gains are
charged off to Revenue account(s)/Profit and
loss account.
Long term Incentive Plan
"The Company has a Long Term Incentive Plan
(‘LTIP’) for selected employees. The plan is a
discretionary deferred compensation plan. It
is a plan with annual accruals and a defined
payment schedule. Provision for LTIP liability
is accrued based on actuarial valuation carried
out using Projected unit credit method (PUCM)
by an independent external actuary.
O. Employee Stock Option Plan (“ESOP”)
The Company has an equity settled ESOP with
a quantified benefit. Options granted under the
ESOP are measured at fair value of the option
on the grant date using the Black-Scholes
method. Grant-date fair value is recognized
as an employee compensation expense in
profit and loss account over the vesting period
or debited to holding company as applicable
with a corresponding liability recorded under
ESOP Outstanding Reserve Account which is
grouped under Reserves & Surplus. When the
option is settled, the related liability in the ESOP
Outstanding Reserve Account is transferred to
share premium account along with excess of
Grant Price over the face value.
P. Taxation
Direct tax
Income tax expenses comprise current tax
(i.e. the amount of tax payable on the taxable
income for the period determined in accordance
with the Income-tax Act, 1961), and deferred
tax charge or credit (reflecting the tax effects
of timing differences between the accounting
income and taxable income for the period).
Current tax
Current tax is the amount expected to be paid
to the tax authorities after taking credit for
allowances and exemptions in accordance with
the Income-tax Act, 1961.
Deferred tax
Deferred tax assets and liabilities are recognised
for the future tax consequences attributable
to timing differences between the accounting
income as per the Company’s financial
statements and the taxable income for the year.
Deferred tax charge or credit and the
corresponding deferred tax liabilities or assets
are recognised using the tax rates that have
been enacted or substantively enacted by the
balance sheet date.
Deferred tax assets are recognised only to the
extent there is reasonable certainty that the
assets can be realised in future. However, where
there is unabsorbed depreciation or carried
forward loss under taxation laws, deferred tax
assets are recognised only to the extent there is
virtual certainty backed by convincing evidence
that sufficient future taxable income will be
available against which the deferred tax assets
can be realised.
Deferred tax assets are reviewed as at balance
sheet date and written down or written up to
reflect the amount that is reasonably certain to
be realised.
Goods and Services tax
Goods and Services tax (“GST”) collected (net
of refunds) is considered as a liability against
which GST paid for eligible input services, to
the extent claimable, is adjusted and the net
liability is remitted to the appropriate authority.
Unutilised GST credits, if any, are carried
forward under "Other Assets” and disclosed
in Schedule 12 for adjustment in subsequent
periods. At the end of every reporting period,
the Company assesses whether the unutilised
GST credits are eligible for carrying forward
to subsequent period as per the relevant legal
provisions. Any ineligible GST credit is expensed
off in Revenue account on such determination.
GST liability to be remitted to the appropriate
authority is disclosed under “Other - Statutory
dues payable” in Schedule 13.
Q. Terrorism Pool
I n accordance with the requirements of IRDAI,
the Company, together with other insurance
companies, participates in the Terrorism Pool.
This pool is managed by General Insurance
Corporation of India (“GIC Re”). Amounts
collected as terrorism premium, as decided by
the Terrorism Pool Underwriting committee,
are ceded at 100% of the terrorism premium
collected to the Terrorism Pool, subject to
conditions and overall limit of 2,000 crore.
In accordance with the terms of the agreement,
GIC Re retrocedes to the Company terrorism
premium to the extent of the Company’s agreed
share (i.e. 0.50%) in the pool, which is recorded
as reinsurance accepted. Such reinsurance
accepted is recorded on the basis of quarterly
statements received from GIC Re. Reinsurance
accepted on account of terrorism pool is
recorded with the latest statement received
from GIC Re, which is generally one quarter
in lag.
The company’s participates in “Terrorism pool
excess of loss Reinsurance Protection” program.
The entire amount of reinsurance accepted for
the current period on this account, up to the
above date, has been carried forward to the
subsequent accounting period as unexpired risk
reserve for subsequent risks, if any, to be borne
by the Company.
R. Contribution to Hit and Run
Compensation Account (erstwhile
Solatium Fund)
Pursuant to Section 164B of the Motor Vehicles
Act read with the Central Motor Vehicles (Motor
Vehicle Accident Fund) Rules, 2022 (“MVAF
Rules”), a Motor Vehicle Accident Fund (“MVA
Fund”) has been constituted. The MVA Fund
comprises the Account for Insured Vehicles,
Account for Uninsured Vehicles, and the Hit &
Run Compensation Account, and is administered
by a Trust established under the MVAF Rules.
In accordance with the MVAF Rules, the Hit &
Run Compensation Account is credited with
(a) the balance under the Solatium Scheme,
1989 as at the date of commencement of the
MVAF Rules, and (b) such percentage of total
motor third party premium collected by General
Insurance Council from insurers carrying on
motor insurance business in India, as specified
by the Trust.
S. Segment reporting
The Company has classified and disclosed
segmental information for Fire, Marine and
Miscellaneous classes of business based on
the primary segments identified under IRDAI
Actuarial and Allied Functions Regulations,
2024 read with AS 17 - Segment Reporting
specified under section 133 of Companies
Act, 2013.
There are no reportable geographical segments,
as all business is written in India.
Allocation of income and expenses to specific
segments (including sub-segment) is done in
the following manner, which is applied on a
consistent basis.
Allocation of investment income
I nvestment income earned on the investment
identified out of shareholders fund is credited to
profit and loss account.
I nvestment income earned on the investments
identified out of policyholders’ funds is allocated
to the various segments on the basis of average
of unallocated premium, premium received
in advance, reserves for unexpired risks and
outstanding claims of the respective segments.
Allocation of other income
Other income which are directly attributable
and identifiable to business segments are
allocated to the respective business segments.
“As required under (Actuarial, Finance and
Investment Functions of Insurers) Regulations,
2024, excess of ‘Operating Expenses related
to Insurance Business’ over the allowable
limits at the Company level is accounted
as ‘Contribution from Shareholders Funds
towards excess EOM’ in Revenue Account
and as ‘Contribution to Policyholders Funds
towards Excess EOM’ in Profit and loss account.
Such Contribution from Shareholders Funds
towards excess EOM is further allocated to
various business segments in proportion to
their excess as if allowable limits are applied
individually at the segment level.”
Other income, other than above, which are
not directly attributable and identifiable to
business segments, are apportioned on the
basis of average of unallocated premium,
premium received in advance, reserves for
unexpired risks and outstanding claims of the
respective segments
Allocation of operating expenses relating
to business segments
Expenses other than those related to Insurance
Business and those incurred towards creating
long-term value and enhancing long term value
for shareholders have been charged to Profit &
Loss Account.
Operating expenses which are directly
attributable and identifiable to business
segments are allocated to the respective
business segments.
Operating Expenses related to Insurance
Business, which are not directly attributable
and identifiable to business segments, are
allocated between product classes / business
group they relates to and apportioned basis
suitable expense driver such as net written
premium, gross written premium, group size
count and number of policies at such product
class / group level.
Segment revenue & results have been disclosed
in the Revenue accounts.
T. Earnings per share (EPS)
Earnings considered for calculating EPS
comprises net profit or loss after tax. The
number of shares used in computing basic
EPS is weighted average number of shares
outstanding during the reporting period.
The number of shares used in computing diluted
EPS comprises of weighted average number of
shares considered for deriving basic EPS and
also weighted average number of equity shares
which could have been issued on conversion of
all dilutive potential equity shares. In computing
diluted earnings per share only potential
equity shares that are dilutive are considered.
Dilutive potential equity shares are deemed to
be converted as at the beginning of the period
unless issued at a later date. The dilutive
potential equity shares are adjusted for the
Unamortised cost, proceeds receivable had the
shares been actually issued at fair value, being
average of closing rate quoted daily during the
last six months period at NSE. Dilutive potential
equity shares are determined independently for
each period presented.
Potential equity shares are deemed to be dilutive
only if their conversion to equity shares would
decrease net profit per share from continuing
ordinary operations.
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