A. Corporate Information and Nature of
Operations

SBI Life Insurance Company Limited ('the Company')
incorporated on October 11, 2000 as a Company
under the Companies Act, 1956 as amended.
The Company is registered with the Insurance
Regulatory and Development Authority of India ('the
Authority' or 'IRDAI') vide registration no. 111 dated
March 29, 2001 and is carrying on the business of
life insurance. The Company's life insurance business
comprises of individual life and group business,
including participating, non-participating, pension,
group gratuity, group leave encashment, group
superannuation, group immediate annuity, unit-linked
insurance products, variable insurance products,
health and micro insurance. Some of these policies
have riders such as accident and disability benefit,
level term and critical illness. The equity shares of the
Company are listed on the National Stock Exchange
(NSE) and BSE Limited (formerly known as Bombay
Stock Exchange).

B. Basis of Preparation and Significant
Accounting Policies

a. Basis of Preparation and Presentation

The Financial Statements are prepared under the
historical cost convention, on accrual basis in
accordance with the generally accepted accounting
principles in India (Indian GAAP) and in compliance
with the Accounting Standards notified under Section
133 of the Companies Act, 2013, further amended
by Companies (Accounting Standards) Amendment
Rules, 2016, to the extent applicable, the provisions
of the Insurance Act, 1938, as amended by the
Insurance Laws (Amendment) Act, 2015 and Insurance
(Amendment) Act, 2021, the Insurance Regulatory and
Development Act, 1999, the Insurance Regulatory and
Development Authority of India (Actuarial, Finance and
Investment Functions of Insurers) Regulations, 2024
('the IRDAI AFI Regulations 2024'), the Master Circular
on Actuarial, Finance and Investment Functions of
Insurers dated May 17, 2024 ('the IRDAI AFI Master
Circular 2024') and various circulars and notifications
issued by the IRDAI thereafter to the extent applicable.

The accounting policies used in preparation of
the financial statements are consistent with those
followed in the preparation of the Company's financial
statements for the previous year.

Use of estimates

The preparation of the financial statements in
conformity with generally accepted accounting
principles in India (Indian GAAP) requires the
management to make estimates and assumptions
that affect the reported amount of assets, liabilities,
revenues and expenses and disclosure of contingent
liabilities as of the date of the financial statements.
The reliance upon estimates and assumptions used
in the accompanying financial statements are based
on management's evaluation of the relevant facts
and circumstances as of the date of the financial
statements. Actual results may differ from the estimates
and assumptions used in preparing the accompanying
financial statements. Difference between the actual
and estimates are recognised in the period in which the
actual results materialise or are known. Any revision to
accounting estimates is recognised prospectively in
current and future periods.

'. Revenue Recognition

i. Premium Income

Premium of non-linked business is recognised as
income (net of Goods and Service Tax) when due
from policyholders. In respect of linked business,
premium income is recognised when the
associated units are allotted. In case of variable
insurance products (VIPs), premium income is
recognised on the date when the Policy Account
Value is credited. Uncollected premium from
lapsed policies is not recognised as income until
such policies are revived.

Top up premiums are considered as single
premium.

ii. Income from Linked funds

I ncome from linked funds which includes fund
management charges, policy administration
charges, mortality charges, etc. are recovered
from linked fund in accordance with terms
and conditions of policy and recognised
when recovered.

iii. Investment Income

Dividend income for quoted shares is recognised
on ex-dividend date, for non-quoted shares the
dividend is recognised when the right to receive
dividend is established.

Investment income on Alternate Investment
Funds (AIFs), Real Estate Investment Trusts
(REITs), Infrastructure Investment Trusts (InvITs),
are recognized as and when declared by
respective Fund/Trust.

Interest income is recognised on accrual basis.
Pre-acquisition interest paid/received to/from
counterparty on purchase/sale transaction
is debited/credited to interest accrued and
not due account. Accretion of discount and
amortisation of premium in respect of debt
securities are effected over the remaining term
of such instruments on the basis of the related
Yield-to-Maturity.

Realised gains and losses in respect of equity
securities and units of mutual funds, Equity
Exchange Traded funds (ETFs), Infrastructure
Investment Trusts (InvITs) and Real Estate
Investments Trusts (REITs) are calculated as the
difference between the net sales proceeds and
their cost. In respect of debt securities, the realised
gains and losses are calculated as difference
between net sales proceeds or redemption
proceeds and weighted average amortised
cost. Cost in respect of equity shares and units
of mutual funds, Equity Exchange Traded funds
(ETFs), Infrastructure Investment Trusts (InvITs)
and Real Estate Investments Trusts (REITs) are
computed using the weighted average method.

Fees received on lending of equity shares under
Securities lending and borrowing scheme (SLB)
is recognised as income over the period of the
lending on straight-line basis.

iv. Income from loans

Interest income on loans is recognised on an
accrual basis. Loan processing fee is recognised
on receipt basis.

v. Rental Income

Rental income is recognised in the income
statement on the straight line basis over
the lease period.

c. Reinsurance Premium Ceded

Premium ceded on reinsurance is accounted in
accordance with the terms of the reinsurance treaty
or in-principle arrangement with the re-insurer.

d. Liability for Life Policies (Policy Liabilities)

The actuarial liability of all the life insurance policies
has been calculated by the Appointed Actuary in
accordance with the Insurance Act 1938, as amended
by the Insurance Laws (Amendment) Act, 2015 and
Insurance (Amendment) Act, 2021 and as per the rules
& regulations and circulars issued by IRDAI from time
to time and the relevant Guidance Notes (GN) and
/ or Actuarial Practice Standards (APS) issued by the
Institute of Actuaries of India (IAI).

Non-linked business is reserved using a
prospective gross premium valuation method.
Mathematical reserves are calculated based on future
assumptions having regard to current and future
experience e.g. interest rates, mortality and expenses.

For participating products, appropriate future bonus
assumptions have been made.

For Group-Par-Pension, the reserve is the
Accumulated Fund Value.

For Non-Linked - Individual fund-based products and
Non-Linked - Group fund-based products, the policy
liability in respect of savings portion is equal to the
fund value as on the date of valuation.

The unit liability in respect of Individual - Linked and
Group - Linked business has been considered as the
value of the units standing to the credit of the policy
holders, using the net asset value (NAV) as on the
valuation date.

The adequacy of charges under individual unit linked
policies to meet future expenses has been tested and
provision made as appropriate. Provision has also
been made for the cost of guarantee under unit linked
products offered with guarantee.

Variable Insurance Policies (VIPs) have also been
valued in a manner similar to the ULIP business by
considering liability as the policy account standing
to the credit of the policyholders plus additional
provisions for adequacy of charges to meet expenses.

e. Funds for Future Appropriation

Funds for future appropriation (FFA) account represents
funds, the allocation of which, either to policyholders
or to shareholders, has not been determined at the
Balance Sheet date.

f. Benefits Paid

i. Claims cost consist of the policy benefit amounts
and claims settlement costs, where applicable.

ii. Claims by death and rider are accounted when
intimated. Intimations up to the end of the period
are considered for accounting of such claims.

iii. Claims by maturity are accounted on the
policy maturity date.

iv. Survival and annuity benefit claims are
accounted when due.

v. Surrenders and withdrawals are accounted
as and when intimated. Benefits paid also
includes amount payable on lapsed policies

which are accounted for as and when due.
Surrenders, withdrawals and lapsation are
disclosed at net of charges recoverable.

vi. Repudiated/ rejected claims disputed before
judicial authorities are provided for based on
management prudence considering the facts
and evidences available in respect of such claims.

vii. Amount recoverable from re-insurers are
accounted for in the same period as the related
claim are intimated and are reduced from claims.

g. Acquisition Costs

Acquisition costs such as commission, medical
fees, etc. are costs that are primarily related to the
acquisition of new and renewal insurance contracts.
The same are expensed in the period in which
they are incurred.

h. Fixed Assets, Intangibles and Depreciation
Fixed assets

Fixed assets are stated at cost, less accumulated
depreciation and impairment, if any. Cost includes
the purchase price and any other cost which can be
directly attributed to bringing the asset to its working
condition for its intended use. Subsequent expenditure
incurred on existing fixed assets is expensed out
except where such expenditure increases the future
economic benefits from the existing assets.

Intangibles

Intangible assets are stated at cost, less
accumulated amortisation and impairment, if any.
Expenditure incurred on application software and their
customisation or further development is recognised
as an intangible asset. The same is capitalised under
fixed assets if such expenditure results in a benefit
of enduring nature. Other software expenses are
expensed in the period in which they are incurred.
Subsequent expenditure incurred on existing assets is
expensed out except where such expenditure increases
the future economic benefits from the existing assets,
in which case the expenditure is amortised over the
remaining useful life of the original asset.

Capital work in progress

Costs of assets as at the Balance sheet date not ready
for its intended use are disclosed as capital work-in¬
progress. Advances paid towards the acquisition of
fixed assets and intangibles at the Balance Sheet date
are disclosed as capital work-in-progress.

Depreciation/ amortisation

The Company is following straight line method of
depreciation provided on pro rata (monthly) basis for

The residual value of the assets (other than building)
being very negligible is considered to be '1 and the
residual value of the building is considered as 5% of
the cost of building as prescribed under Part C of
Schedule II of the Companies Act, 2013.

Software expenses are amortised over a maximum
period of 3 years.

Leasehold improvements are amortised equally over
the period of lease. Capital expenditure on individual
assets up to ' 1,000 are not capitalized and expensed
out as revenue expenditure.

Assets individually costing more than ' 1,000 and
up to ' 20,000 are fully depreciated in the month
of acquisition.

Depreciation is charged to Revenue and Profit & Loss
Account based on the available for use criteria.

i. Impairment of Fixed Assets

The carrying values of assets at each Balance Sheet
date are reviewed for impairment. If any indication
of such impairment exists, the recoverable amounts
of those assets are estimated and impairment is
recognised, if the carrying amount of those assets
exceeds their recoverable amount. The recoverable
amount is the greater of the net selling price and their
value in use. Value in use is arrived by discounting
the estimated future cash flows to their present
value based on an appropriate discount factor. If at
the Balance sheet date, there is an indication that an
impairment loss recognised for an asset in earlier
accounting periods is no longer required or has
decreased; reversal of impairment loss is recognised.
The recoverable amount is reassessed and the asset
is reflected at recoverable amount, subject to a
maximum of depreciable historical cost.

j. Foreign Currency Transactions

As per Accounting Standard 11 on The Effects of
Changes in Foreign Exchange Rates, transactions
denominated in foreign currencies are recorded
in INR at the exchange rate prevailing on the date
of transaction.

Monetary assets and liabilities denominated in foreign
currency as at the Balance Sheet date are converted at
the exchange rates prevailing on that date.

Non-monetary items like fixed assets which are
recorded at historical cost are reported using the
exchange rate at the date of transaction.

Non-monetary items other than fixed assets, which
are recognised at fair value or other similar valuation
are reported using exchange rate at the date when
such value was determined.

Exchange differences either on settlement or on
translation are recognised in the Revenue Account or
Profit and Loss Account, as the case may be.

k. Investments

Investments are made and accounted in accordance
with the Insurance Act, 1938 as amended by the
Insurance Laws (Amendment) Act, 2015 and Insurance
(Amendment) Act, 2021, the IRDAI AFI Regulations
2024, IRDAI AFI Master Circular 2024, Investment
Policy of the Company and various other circulars/
notifications as issued by IRDAI from time to time.

Investments are recorded on the trade date at cost,
which includes brokerage, security transaction tax,
education cess and stamp duty, wherever applicable
and excludes interest paid, if any, on purchase.

i. Classification of Investments

Investments maturing within twelve months
from balance sheet date and investments made
with the specific intention to dispose-off within
twelve months from balance sheet date shall be
classified as short-term investments.

Investments other than Short-term investments
are classified as “Long-term investments".

ii. Valuation - Shareholders' Investments and
Non-linked Policyholders' Investments
Debt securities

Debt securities, including Government securities
and money market securities are stated at
historical cost subject to amortisation of premium
or accretion of discount over a period of holding/
maturity on yield to maturity basis.

Investments in Fixed Deposits with banks and
Reverse Repo are valued at cost.

Equity, equity related instruments & preference
shares

Listed equity shares, equity related instruments
& preference shares are measured at fair value
on the Balance Sheet date. For the purpose
of determining fair value, the closing price at
primary exchange i.e. NSE is considered.

If NSE closing price is not available for any security,
then BSE closing price is used for valuation.

Unlisted equity shares, equity related
instruments & preference shares are measured at
historical cost.

In case of Security Lending & Borrowing ('SLB'),
Equity Shares lent are valued as per valuation
policy for equity shares as mentioned above.

Bonus entitlements are recognised as investments
on the 'ex-bonus date'. Rights entitlements are
recognised as investments on the 'ex-rights date'.

Additional Tier 1 (Basel III Compliant) Perpetual
Bonds classified under “Equity" as specified
by IRDAI, are valued at prices obtained from
Credit Rating Information Services of India
Limited ('CRISIL').

Unrealised gains or losses arising due to
change in the fair value of equity shares are
recognised in the Balance Sheet under “Fair value
change account".

On each balance sheet date, the Company assess
whether impairment of listed equity securities
has occurred. Any impairment loss is recognised
as an expense in the Revenue or Profit and Loss
Account to the extent of the difference between
the re-measured fair value of the security or
investment and its weighted average cost
as reduced by any previous impairment loss
recognised as an expense in the Revenue or Profit
and Loss Account. Any reversal of impairment
loss, earlier recognised in Revenue or Profit and
Loss Account, is recognised in the Revenue or
Profit and Loss Account.

Mutual funds

Investments in mutual funds are valued at
the previous day's Net Asset Value (NAV).
Unrealised gains or losses arising due to
change in the fair value of mutual fund units are
recognised in the Balance Sheet under “Fair value
change account".

Alternative Investment Funds (AIFs)

Investments in Alternative Investment Funds
(AIFs) are valued at latest available NAV.
Unrealised gains or losses arising due to change
in the fair value of Alternative Investment Funds
(AIFs) are recognised in the Balance Sheet under
“Fair value change account".

Interest Rate Derivatives (IRDs)

Interest Rate Derivative (IRD) contracts for hedging
of highly probable forecasted transactions
on insurance contracts and investment cash
flows in life, pension and annuity business,
are accounted for in the manner specified in
accordance with 'Guidance Note on Accounting
for Derivative Contracts (Revised 2021)' issued
by the Institute of Chartered Accountants of
India (ICAI), IRDAI circular no. IRDA/F&I/INV/
CIR/138/06/2014 dated June 11, 2014 ('the IRDAI
circular on Interest Rate Derivatives') and IRDAI
AFI Master Circular 2024.

The Company has well defined Board approved
interest rate risk hedging Policy and Process
document covering various aspects related
to functioning of the derivative transactions
undertaken to mitigate interest rate risk as per
the Interest rate risk hedging strategy. At the
inception of the hedge, the Company designates
and documents the relationship between the
hedging instrument and the hedged item, the risk
management objective, strategy for undertaking
the hedge and the methods used to assess the
hedge effectiveness. Hedge effectiveness is the
degree to which changes in the fair value or cash
flows of the hedged item that are attributable to
a hedged risk are offset by changes in the fair
value or cash flows of the hedging instrument.
Hedge effectiveness is ascertained at the time of
inception of the hedge and periodically thereafter
at Balance Sheet date.

Forward Rate Agreement (“FRA") is a forward
contract to hedge the risk of movements in
interest rates. In a FRA contract, the Company
fixes the yield on the government bond for
the period till the maturity of the contract.
The Company enters into FRA to hedge
interest rate risk on forecasted transactions: a)
Reinvestment of maturity proceeds of existing
fixed income investments; b) Investment of
interest income receivable; and c) Expected
policy premium income receivable on insurance
contracts which are already underwritten in Life,
Pension & Annuity business.

The Company follows “hedge accounting" for
accounting of all Interest rate derivative financial
instruments as per Guidance Note on Accounting
for Derivative Contracts (Revised 2021) issued by
Institute of Chartered Accountants of India (ICAI).

The Forward Rate Agreement (FRA) contract
is valued at the difference between the market
value of underlying bond at the spot reference
yield taken from the SEBI approved rating agency
and present value of contracted forward price
of underlying bond including present value of
intermediate coupon inflows from valuation date
till FRA contract settlement date, at applicable
INR-OIS rate curve. The fair valuation or mark-to-
market valuation of the derivative financial
instruments is done independently by both the
parties i.e. the Company and the counter party.
The counter party (bank) valuation is considered
for margin settlement as the counter party
(bank) is the valuation agent as per forward
rate agreement.

Hedging instruments are initially recognised
at fair value and are re-measured at fair value
at subsequent reporting dates. The effective
portion of fair value gain / loss on the interest rate
derivative that is determined to be an effective
hedge is recognised in equity account i.e.
“Hedge Fluctuation Reserve" or “HFR" under the
head 'Credit/(Debit) Fair Value Change Account''
in the Balance Sheet and the ineffective portion
of the change in fair value of such derivative
instruments is recognised in the Revenue
Account or Profit and Loss Account in the period
in which they arise. The fair value gain / loss on
the interest rate derivative that is determined
to be an ineffective hedge is recognised in the
Revenue Account or Profit and Loss Account in
the period in which they arise.

The accumulated gains or losses that were
recognised in the Hedge Fluctuation Reserve are
reclassified into Revenue Account or Profit and
Loss Account, in the same period during which
the income from investments acquired from
underlying forecasted cash flow is recognized in
the Revenue Account or profit and loss account.
Hedge accounting is discontinued when the
hedging instrument is terminated or it becomes
probable that the expected forecast transaction
will no longer occur or the risk management
objective is changed or no longer expected
to be met. On such termination, accumulated
gains or losses that were recognised in the
Hedge Fluctuation Reserve are reclassified into

Unlisted equity shares, equity related
instruments & preference shares are measured at
historical cost.

In case of Security Lending & Borrowing (SLB),
Equity Shares lent are valued as per valuation
policy for equity shares as mentioned above.

Additional Tier 1 (Basel III Compliant) Perpetual
Bonds classified under “Equity" as specified by
IRDAI, are valued at prices obtained from CRISIL.

Unrealised gains or losses arising due to
change in the fair value are recognised in the
Revenue Account.

Mutual funds

Investments in mutual funds are valued at
the previous day's Net Asset Value (NAV).
Unrealised gains or losses arising due to change in
the fair value of mutual fund units are recognised
in the Revenue Account.

Real Estate Investment Trusts (REITs)/
Infrastructure Investments Trusts (InvIT)

The Investment in Units of REITs / InvITs are
valued at Market Value (last quoted price should
not be later than 30 days). For the purpose of
determining market value, the closing price at
primary exchange i.e. NSE is considered. If NSE
closing price is not available for any security,
then BSE closing price is used for valuation.
Where market quote is not available for the last
30 days, the units are valued as per the latest
NAV (not more than 6 months old) of the units
published by the trust. Unrealised gains or losses
arising due to change in the fair value of REITs
units are recognised in the Revenue Account.

iv. Transfer of investments

a. Transfer of investments from Shareholders'
fund to Policyholders' fund

In the case of deficit in Revenue Account,
transfer of securities from shareholders to
policyholders is done as below:

(i) Debt securities are transferred at lower
of net amortised cost or market value
on the date of transfer;

(ii) Equity securities are transferred at
lower of cost or market value on the
date of transfer.

b. Transfer of investments from Policyholders'

fund to Shareholders' fund

In the case of surplus in Revenue Account,
transfer of securities from policyholders' to
shareholders' is done as below:

(i) Debt securities are transferred at net
amortised cost;

(ii) Equity securities are transferred at
market value on the date of transfer.

c. Transfer of investments between non-
linked Policyholders' funds

No transfer of investments is carried out
between non-linked policyholders' funds.

d. Transfer of investments between unit-
linked funds

I n case of unit linked fund, inter schemes
transfers of equity, preference shares, ETFs
and Government Securities are made at
prevailing market price at the time of transfer.
In case, if the trade has not taken place on the
day of transfer, the transfer of investments is
accounted at previous day valuation price as
per IRDAI AFI Regulations 2024.

For all other securities, transfer of investments
is accounted at previous day valuation price
as per IRDAI AFI Master Circular 2024.

v. Impairment of Investments

On each balance sheet date, the Company
assesses whether there is any indication of
impairment of investments or reversal of
impairment loss recognised in prior periods.
Any impairment loss is recognised as an expense
in the Revenue or Profit and Loss Account to the
extent of the difference between the re-measured
fair value of the security or investment and its
weighted average cost as reduced by any previous
impairment loss recognised as an expense in the
Revenue or Profit and Loss Account. Any reversal
of impairment loss, earlier recognised in Revenue
or Profit and Loss Account, is recognised in the
Revenue or Profit and Loss Account.

vi. Provision for Non-Performing Assets (NPAs)

All assets where the interest and/or principal
repayment remain overdue for more than 90 days
at the Balance Sheet date are classified as NPA and
provided for in accordance with the requirement
of applicable IRDAI Regulations/circulars.

l. Loans

Investments in Loans are stated at historical cost,
less repayments, subject to provision for impairment
losses & non-performing asset (NPA) provision, if any.

m. Provision for Standard Assets

In accordance with the IRDAI valuation guidelines on
'Income Recognition, Asset Classification, Provisioning
and Other related matters' vide the IRDAI AFI Master
Circular 2024, adequate provisions are made for
estimated loss arising on account from/under
recovery of loans and advances (other than loans and
advances granted against insurance policies issued by
the insurer) outstanding at the Balance Sheet date in
respect of standard assets.

n. Employee benefits

(i) Post-employment benefit
Defined benefit plans
Provident Fund

The Company makes contribution towards
provident fund, a defined benefit retirement
plan. The provident fund is administered by
the trustees of the SBI Life Insurance Company
Limited Employees PF Trust. The contribution
paid or payable under the schemes is charged
to the Revenue Account during the period in
which the employee renders the related service.
Further, an actuarial valuation is conducted
annually by an independent actuary to recognise
the deficiency, if any, in the interest payable on
the contributions as compared to the interest
liability as per the statutory rate.

Gratuity

The Company has incorporated a gratuity trust.
The Company makes contribution to a Gratuity
Fund administered by trustees of SBI Life
Insurance Company Limited Employees Gratuity
Fund. The plan provides a lump sum payment to
vested employees at retirement or termination
of employment based on the respective
employee's salary and the years of employment
with the Company.

The Company accounts for the liability for future
gratuity benefits in accordance with Accounting
Standard - 15 (Revised). The net present value
of the Company's obligation towards the same
is actuarially determined based on the projected
unit credit method as at the Balance Sheet date.
Actuarial gains and losses are recognised in the
Revenue Account.

COVID Ex-gratia

The Company accrues liability for Employees
COVID Ex-gratia Scheme in accordance with
Accounting Standard - 15 (Revised) 'Employee
Benefits' issued by ICAI. The Net Present Value
(NPV) of the Company's obligation towards the
Employees COVID Ex-gratia Scheme, which is
a defined benefit plan, is actuarially determined
based on the Projected Unit Credit Method
(PUCM) as at the Balance Sheet date.

(ii) Other long-term employee benefits
Compensated Absences and Long-Term Service
Awards

Compensated absences which are not expected
to occur within twelve months after the end of
the period in which the employee renders the
related services are recognised as a liability at the
present value of the defined benefit obligation at
the Balance Sheet date.

Long Term Service Awards are recognised as a
liability at the present value of the defined benefit
obligation at the Balance Sheet date.

The Company accrues the liability for
compensated absences and long-term service
awards in accordance with Accounting Standard
- 15 (Revised) on Employee Benefits. The net
present value of the Company's obligation is
determined based on the projected unit credit
method as at the Balance Sheet date.

(iii) Short-term employee benefits

The undiscounted amount of short-term
employee benefits expected to be paid for the
services rendered by employees is recognised
during the period when the employees
renders the service. These benefits include
salaries and bonuses, short term compensated
absences, premium for staff medical insurance
(hospitalization), premium for employee group
term insurance scheme etc.

(iv) Employee share based payments

The Company follows the intrinsic value method
to account for its share-based employee
compensation plans in accordance with the
Guidance Note on Accounting for Employee
Share based Payments (Revised 2020), issued
by the Institute of Chartered Accountants of
India (ICAI). The intrinsic value is measured as
the excess, if any, of the fair market price of the
underlying stock over the exercise price on the
grant date. The intrinsic value of options, if any,

at the grant date is amortised over the vesting
period. The fair market price is the latest closing
price, immediately prior to the grant date, on
the stock exchange on which the shares of the
Company are listed. If the shares are listed on
more than one stock exchange, then, the stock
exchange which records the highest trading
volume on the date, immediately prior to the
grant date is considered.

o. Accounting for Leases

(i) Operating Lease

Where the Company is the lessee

Leases where the lessor effectively retains
substantially all the risks and benefits of
ownership over the lease term are classified as
operating leases. Operating lease rentals are
recognised as an expense over the lease period
on a straight line basis.

Where the Company is the lessor

Assets subject to operating leases are included
in fixed assets. Lease income is recognised in
the Profit and Loss Account on a straight-line
basis over the lease term. Costs, including
depreciation are recognised as expense in the
Profit and Loss Account.

(ii) Finance Lease

Leases under which the Company assumes
substantially all the risk and rewards of ownership
of the asset are classified as finance leases.
Such leased asset acquired are capitalised at
fair value of the asset or present value of the
minimum lease rental payments at the inception
of the lease, whichever is lower.

p. Taxation
Direct Taxes

Provision for current income tax, if any, is made
on an accrual basis after taking credit for all
allowances and exemptions in accordance with the
Income Tax Act, 1961.

Deferred income tax is recognised for future tax
consequences attributable to timing differences
between income as determined by the financial
statements and the recognition for tax purposes.
The effect of deferred tax asset or liability of a change
in the tax rates are recognised using the tax rates
and tax laws that have been enacted or substantively
enacted by the Balance Sheet date. Deferred tax assets
are recognised only to the extent that there is a virtual
certainty that sufficient future taxable income will be
available against which such deferred tax assets can be

realised. Deferred tax assets or liabilities are reviewed
as at each Balance Sheet date and written down or
written up to reflect the amount that is reasonably or
virtually certain to be realised.

Indirect Taxes

Goods and Service Tax (GST) liability on output service
is set-off against the input tax credits available from
GST paid on input services. Unutilised credits, if any,
are carried forward under “Advances and other assets"
for future set off and are deferred for recognition to
the extent there is reasonable certainty that the assets
can be realised in future.

q. Segmental Reporting

As per Accounting Standard 17 on “Segmental
Reporting" read with the IRDAI AFI Regulations 2024,
the Company has classified and disclosed segmental
information in to participating, non-participating
and linked businesses, which are further segmented
into Individual life, group, health, pension,
variable and annuity.