15. PROVISIONS AND CONTINGENCIES
A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an
outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions
are not discounted to their present value and are determined based on best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Contingent Losses arising from claims other than insurance claims under policies, litigation, assessment, fines, penalties, etc.
are recorded as a disclosure made when there is a possible obligation but probably will not require an outflow of resources.
When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote
or cannot be ascertained, no provision or disclosure is made.
Contingent asset are neither recognised nor disclosed in the financial statements.
16. CATASTROPHE RESERVE
Catastrophe Reserve is created by appropriation of 10 % of Operating profits of Revenue Accounts in respect of Fire, Marine
and Miscellaneous business. This reserve forms part of Policyholders' Funds and is reflected in Schedule 6-Reserves & Surplus
of the balance sheet as per IRDAI format.
II. NOTES FORMING PART OF THE ACCOUNTS:
The Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers)
Regulations, 2024, have been adopted for presentation of the accounts.
INVESTMENTS
1. (a) Out of Investment held in Shares, Debentures, Bonds & Venture Capital Fund of the value of ?81,16,309 lakhs (Previous
Year ?79,23,080 lakhs), the Investment in a bond of Datar Switchgear Ltd actually held by the Custodian of the Corporation
of ?65 lakhs (previous year ?65 Lakhs) i.e. ?52 lakhs/- is in excess of the amount held as per the books of the Corporation
amounting to ?13 lakhs (previous year ?13 lakhs).
(b) During the year there were receipts of Excess Dividends of ?0.11 Lakhs (Previous Year ?14 Lakhs), Excess Profits ? NIL
(Previous Year ? NIL) and Excess Interests ? NIL (Previous Year ? NIL). The excess dividend balance as on 31st March 2025
amounts to ?16 lakhs (Previous Year ?28 Lakhs). The interest received on the excess Bonds / Debentures and profit on
excess equity / debentures as on 31st March 2025 amounts to ? NIL (Previous Year ? NIL) & ? NIL (Previous Year ? NIL). This
excess dividend is shown as Liability.
2. (a) Provision includes provision for standard assets @ 0.40% as per IRDAI-Prudential norms for Income recognition, Asset
Classification and provisioning and other related methods in respect of debt portfolio amounting to ?8,821 lakhs (Previous
Year ?7,414 Lakhs).
(b) During the year, the Corporation has not undertaken under CDR (Corporate Debt Restructuring) System, any case of
restructuring of corporate debt/loan. (Previous Year NIL)
(c) The Corporation has considered latest available NAV for the provisioning of units of venture capital. The details of latest
available NAV considered are as follows
5. There is no difference between title of ownership in respect of CGS/SGS/ bonds/debentures etc. available in physical/demat
format vis-a-vis shown in books of accounts except for the differences pointed out in Point No 1.
6. As at 31st March 2025, all the assets of the Corporation in and outside India are free from encumbrances except for:
(a) The Government of India Stock, 8.24% 2027 for ?785 lakhs, 8.60% 2028 for ?20 lakhs, 6.19% 2034 for ?500 lakhs, 7.54%
2036 for ?2,000 lakhs, 7.10% 2029 for ?1,000 lakhs, 7.41% 2036 for ?1,000 lakhs, 7.26% 2032 for ?1,000 lakhs, 7.18% 2037
for ?4,000 lakhs, total amounting to ?10,305 lakhs (Previous year total amounting to ?10,305 lakhs) and cash deposit
of ?106 lakhs (Previous year ?86 lakhs) with Clearing Corporation of India Limited as deposit towards Settlement
Guarantee Fund.
Out of the Cash Deposit, ?15 Lakhs is maintained as Cash collateral Deposit towards Triparty Repo Default fund (Previous
year total amounting to ?15 Lakhs) and ?8 lakhs towards Securities Default fund (Previous year total amounting to ?8
Lakhs). ?1 lakh is maintained for initial margin and ?82 lakhs are for CGS Margin.
(b) (i) In view of margin requirements as recommended by SEBI vide Circular dated 19/03/2008, Corporation has assigned a
Government of India security 7.10% 2029 amounting to ?4,000 lakhs (Previous year Government of India security 7.10%
2029 amounting to ?4000 lakhs) as Pledge towards Margins in cash segments. This Pledge covers margin obligations
arising out of trades done in NSE & BSE.
(b) (ii) Margin FDR of ?6 lakhs (Previous year ?5 lakhs) against Bank Guarantee to Municipal Corporation of Greater Mumbai
(MCGM) to undertake development activities at plot bearing CTS.NO.1606OF Fort Division measuring 1844.40 sq. meter.
(c) Pursuant to the decision to close the Representative Office in Brazil the process thereof has concluded successfully, even
as GIC Re continues and expects to transact reinsurance business in Brazil as usual as an Occasional Reinsurer.
(d) Margin FDR held by Bank for issue as LC/BG of ?6,93,643 Lakhs (Previous year ?7,67,779 Lakhs).
7. The Commitments made and outstanding for Loans, Investments and Fixed Assets (if any) as at 31st March 2025 are ?1,949
lakhs (Previous year ?626 Lakhs).
8. Value of contracts in relation to investments, for
a) Purchases, where deliveries are due and pending ? NIL (Previous year ? NIL).
b) Sales, where payments are overdue ? NIL (Previous year ? NIL).
9. The Book Value of Investments valued on Fair Value basis is Equity ?15,83,329 lakhs (Previous year ?13,11,084 lakhs) & Mutual
Funds ?71,041 (Previous year ?1,07,002 Lakhs) & INVITS ?8,309 lakhs (Previous year ? NIL). For some Actively traded shares
falling under "Fair value Depreciation" category, an amount of ?80,766 lakhs (Previous Year ?66,990 Lakhs) is considered under
"Provision for Diminution of Listed equity shares" category. INVITS has been fully provided as they have been allotted against
the NPA Investments.
10. The basis of amortization of debt securities is as stated in Significant Accounting Policy No.9.14.
11. The Corporation does not hold any properties for investment purposes.
12. Provisions regarding unrealized gains/losses have been stated in the Significant Accounting Policy No. 9.7.
13. Interest, Dividend and Rent income is net of Investment expenses of ?561 lakhs (previous year ?553 Lakhs).
14. A Provision has been made for ?89,505 lakhs (Previous year ?1,37,123 Lakhs) towards Non-Performing Assets (Other than
Standard Assets). Therefore, there is reversal of provision accounted during the year is ?47,618 lakhs (Previous year reversal of
provision is ?16,752 Lakhs).
Reinsurance
15. Underwriting of Direct business stopped from 1st April 2001. Figures included in Revenue Accounts Pertaining to direct
business (if any) are on account of run-off business. Run-off liabilities are sufficiently provided for based on advice received.
16. Premiums, less reinsurance, written from business during the financial year 2024-25 in India are: ?28,44,247 Lakhs (Previous
year ?23,38,928 Lakhs) and outside India are ?9,40,173 Lakhs (Previous year ?10,56,651 Lakhs).
17. Incremental Provision in URR, for 31st March 2025 , in respect of long-term Facultative Policies. - NIL (Previous year ? NIL).
18. Claims less reinsurance during the financial year 2024-25 paid in India are:
?17,02,488 Lakhs (Previous year ?15,95,237 Lakhs) and outside India are ?9,16,379 Lakhs (Previous year ?10,72,502 Lakhs).
19. Segment Reporting
Segment Reporting as per Accounting Standard -17 "Segment Reporting", has been complied with as required by IRDAI
(Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024.
Line of Business wise Segment Revenue Reporting for the year ended 31st March 2025 :
20. Ageing of claims - Distinguishing between claims outstanding for different periods:
The Corporation being a reinsurance company does not settle claims directly with the insured. The companies after settling
the claims with their insured would recover the claims from the Corporation as per the reinsurance obligations. Such recoveries
are settled with the companies through periodical account statements.
Nevertheless, the outstanding losses as intimated by the companies in respect of facultative business are classified according
to the outstanding period as per the details given below:
Details as on 31st March 2025
21. The Corporation being a reinsurance company does not settle claims directly with the insured. The companies after settling
the claims with their insured would recover the claims from the Corporation as per the reinsurance obligations. Such recoveries
are settled with the companies through periodical account statements. Claims settled and remaining unpaid for a period of
more than six months as on 31st March 2025 ? NIL (Previous Year NIL).
22. (a) Corporation has put in place system of continuous reconciliation and monitoring of balances and reserve deposits on an
ongoing basis with persons/bodies carrying on insurance/reinsurance business. The Corporation has provided a
cumulative provision of ?1,16,840 Lakhs (Previous year ?1,11 301 Lakhs) for doubtful receivables.
(b) The balances of amount due to/from and the deposits kept with other persons/bodies carrying on insurance business are
subject to confirmation/reconciliation. There exists a detailed process to match confirmations with the books and these
are marked for majority of the balances. Adjustments, if any for unconfirmed balances will be accounted for on receipt /
confirmation/reconciliation of the same. However, it may be noted that Provision for amount due from and the deposits,
over a period of three years have been fully provided for. These balances and deposits are arising from the accounts
booked through Statement of Accounts obtained from the cedants/ brokers.
(c) The Corporation has also provided a provision on doubtful debts on sundry debtors outstanding for more than 1 year as
on 31st March 2025 amounting to ?153 lakhs (Previous year ?245 lakhs).
(d) Total assets pertaining to foreign business is ?29,35,384 lakhs (Previous year ?21,34,289 Lakhs) and Total Liabilities
pertaining to foreign business is ?37,07,873 lakhs(Previous year ?37,14,858 Lakhs).
(e) The company has no forward contact against the foreign exposure. To limit the risks of adverse exchange rate movement,
GIC maintains 3 major currency (Euro, USD & GBP) bank accounts in London and Gift City. All settlement takes place
through these bank accounts. All foreign currency receipts and payments to be done through these bank accounts.
Payment related to Euro, USD & GBP done through respective currency bank accounts. For Other currencies, mostly
settlement happen through USD Bank accounts. Thus liabilities and bank balances are maintained in same currency.
Amount in Foreign Currency to be transferred only if there is shortage of funds in overseas bank for regular payments
which is rare case. FDs placed with Foreign branches are for less than 90 days.
23. Creation of a Catastrophe Reserve is an accepted method to handle future volatility in claims, and to introduce a factor of
stability in the financial results. The reserve can make a significant contribution to reducing financial vulnerability in future.
This reserve is broadly intended to be utilised towards meeting large catastrophe losses against the insurance policies in force.
The Corporation decided to create the same from financial year 2022-23 onwards, by appropriation of 10% of Operating Profit
in respect of Revenue Accounts with an overall reserve cap of ?5,00,000 Lakhs.
25. Life Reinsurance Business:
During the year, the Corporation has made a provision of ?2,20,688 Lakhs (Previous Year made provision of ?1,62,982 lakhs)
towards total net reserves for life business (excluding OSLR). These reserves have been determined and certified by the Life
Appointed Actuary, in accordance with the requirements of IRDAI's (Actuarial, Finance and Investment Functions of Insurers)
Regulations, 2024 and Institute of Actuaries of India in concurrence with IRDAI.
26. The estimate of claims Incurred But Not Reported [IBNR] claims have been certified by the Company's Appointed Actuary. The
Appointed Actuary has certified to the Company that the assumptions used for such are appropriate and are in accordance
with the requirements of the Insurance Regulatory and Development Authority of India [IRDAI] and Institute of Actuaries of
India in concurrence with IRDAI.
The IBNR provision for Life Re business is certified by the Appointed Actuary - Life Re. The IBNR has been calculated using
triangulation method for domestic business (except for non-proportional business) and for Overseas Group Credit Business.
For all other overseas business (proportional and non-proportional) and domestic non-proportional business, delay days
method has been used.
Basic earnings per share are calculated by dividing the profit or loss after tax for the year attributable to equity shareholders by
the weighted average number of equities shares outstanding during the year. For the purpose of calculating diluted earnings
per share, the profit or loss after tax for the year attributable to equity shareholders and the weighted average number of
shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares which could have been
issued on the conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per
share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning
of the period unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair value. Dilutive potential equity shares are determined independently for
each period presented.
40. The Corporation's office premises and godown are obtained on operating lease and are renewable / cancellable at mutual
consent. There are no restrictions imposed by lease agreements. Lease terms are based on individual agreements. Significant
leasing agreements are in respect of operating lease for premises. Aggregate lease rentals amounting to ?399 Lakhs (Previous
year ? 348 Lakhs) are expected to be paid under operating lease in less than 12 months from 31st March 2025.
As per AS-19 related to Lease, GIC Re is not required make any disclosure under AS-19.
41. Taxation
Disclosures as per Accounting Standard - 22 "Accounting for Taxes on Income":
(a) Deferred Tax assets are recognized if there is a reasonable certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each Balance Sheet date.
The breakup of Net Deferred Tax Assets is as under:
During the year the Corporation has recognised Deferred Tax asset of ?24,855 lakhs against Provision for doubtful
investments of ?98,757 lakhs where the Corporation expects certainty of loss realisation and tax benefits to flow. Further,
Deferred Tax asset of ?42,735 lakhs is also accounted against Catastrophe Reserve of ?1,69,799 lakhs.
(b) The Taxation Laws (Amendment) Act, 2019 provides domestic companies with an option of lower tax rate, provided they
do not claim certain deductions and not compute tax as per Minimum Alternate Tax (MAT).
The Corporation has opted for reduced rate in FY 2022-23 Accordingly, the Corporation has considered the same rate
for the purpose of computing provision for tax and deferred tax in these standalone financial results for the quarter and
twelve months ended 31st March 2025.
42. During the year, the Corporation has reviewed its fixed assets for impairment. In the opinion of the management of the
respective companies no provision for impairment loss is considered necessary.
43. The basis of apportionment of operating expenses to the Revenue Accounts has been stated in the Significant Accounting
Policy No. 8.
44. Contingent Liabilities:
(a) Partly Paid-up investments ?1,949 lakhs (Previous year ?626 Lakhs)
(b) Underwriting commitments outstanding ?NIL (Previous ?NIL)
(c) Claims, other than those under policies not acknowledged as debts ?62 lakhs (Previous year ?62 Lakhs)
(d) Guarantees / LC given by or on behalf of the Corporation ?1,47,163 Lakhs (Previous year ?35,839 Lakhs)
The corporation has provided Letter of Credit/ Bank Guarantee amounting to ?6,89,432 Lakhs (previous year ?7,65,212
lakhs) against 100% Margin in form of Term deposits with banks, towards outstanding losses, unearned premium reserve,
balances payable etc., to various business partners towards various treaties. During the year the Corporation has provided
for all liabilities in respect of Letter of Credit/ Bank Guarantee in its books amounting to ?5,42,269 Lakhs (previous year
?7,29,373 Lakhs) Therefore, this amount has not been shown as Contingent Liabilities.
(e) Statutory demand / liabilities in dispute - Income-tax demands disputed, not provided for ?25,08,519 lakhs (Previous year
?22,49,092 Lakhs).
47. Corporate Social Responsibility (CSR):
Corporate Social Responsibility (CSR): As per Section 135 of the Companies Act, 2013, General Insurance Corporation of India
was required to spend an amount of ?10,585 Lakhs for the financial year 2024-25 towards Corporate Social Responsibility.
During the financial year 2024-25, an amount of ?5,371 lakhs has been spent. The projects are in different stages of
implementation. The total unspent amount as on 31.03.2025 is ?5,214 lakhs pertaining to on-going projects. This unspent
amount has been transferred to a separate bank account to be utilized in the next three financial years.
Below are details of CSR projects taken up in FY 2024-25:
(a) Gross amount required to be spent by the company in FY 2024-25 - ?10,585 lakhs
(b) Amount approved by the Board to be spent in FY 2024-25 - ?10,585 lakhs
(c) Amount spent in FY 2024-25 as on 31.03.2025: ?5,371 lakhs
The CSR funds have been allocated and disbursed in respect of projects related to infrastructure, healthcare, education,
livelihood of underprivileged and environment sustainability.
48. The International Accounting Standards Board (IASB) has notified IFRS 17 as the new standard for insurance contracts. The
standard is now being implemented across many countries including UK, European Countries, UAE, Malaysia, South Africa etc.
India is in the process of creating Ind AS117 in Insurance sector which is equivalent of IFRS 17 (Insurance Contracts)
As per IRDAI's latest direction vide communication dated 9th October 2024, GIC Re being a Listed entity, would be part of Phase
I group of companies, therefore for GIC Re, revised IndAS implementation date would be 1st April 2027, replacing earlier
deadline of 1st April 2025.
The progress of IndAS implementation project is moving in line with the project plan, which will get achieved well before
IRDAI indicated revised deadline of 01st April 2027.
49. There are no Material Changes and Commitments affecting the Financial Position of the Company (including branches)
occurring after the Balance sheet date (Previous Year Nil).
50. GIC Re Dubai branch continues to be in run-off operations since July 2021 and is presently servicing the accounting and claims
of contracts underwritten in previous years prior to run-off. The business previously underwritten by Dubai branch is now being
handled by GIFT City branch in India. Application for portfolio transfer of the open balances of Dubai branch to Gift City branch and
eventual de-registration of Dubai branch has been filed with the UAE regulator and correspondence in this regard is in progress.
51. During the current financial year 2024-25, the rating provided by M/s. AM Best for Financial Strength Rating (FSR) is 'A-
(Excellent)' and Long-Term Issuer Credit Rating (ICR) is 'a-(Excellent)', with 'Stable' outlook for FSR and Long-Term ICR. During
the Previous financial year 2023-24, the Financial Strength Rating (FSR) of 'B (Good)' and the Long-Term ICR of 'bbb (Good)'
were reaffirmed and the outlook of both the FSR and ICR were revised to 'Positive'. Also, a NSR (National scale rating) of aaa.IN
(Exceptional) with outlook as 'Stable' was assigned.
52. As per the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers)
Regulations, 2024 the Corporation is required to prepare Receipts and Payment Accounts in accordance with the Direct
Method prescribed in AS -3 "Cash Flow Statement". The Corporation has complied with the same.
53. Cash and Cash equivalents amounts for the year ended 31st March 2025 mentioned in the Receipts and Payments Account
/ Cash Flow Statement which also includes ?10,62,768 lakhs of fixed deposits having maturity of more than 3 months and
Deposits under margin for Letter of Credit ?6,93,643 Lakhs as on the date of audited standalone financial statements. Cash
& Cash equivalent amount for Previous year ended on 31st March 2024 includes ? 9,40,839 lakhs of fixed deposits having
maturity of more than 3 months and Deposits under margin for Letter of Credit ? 7,67,779 lakhs. The same have been excluded
for calculating Cash and Cash equivalents for Cash Flow.
54. Figures of the previous period/year have been re-grouped/re-arranged wherever necessary. The re-grouping is made
in Revenue Accounts and Profit & Loss Accounts to comply with changes as per Insurance Regulatory and Development
Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024. This has resulted in movement
of followings heads from Profit & Loss Account to Revenue Accounts pertaining to the period ended 31.03.2024:
This has resulted in an increase in Operating Profit of Revenue Accounts by ? 60,306 Lakhs and decrease of the same in
respective account heads of Profit & Loss Accounts pertaining to the period ended 31.03.2024. There is Nil impact on Profit
before and after Tax due to the above-mentioned regrouping in previous period.
55. Tax liabilities in respect of foreign operation, if any, is accounted on actual basis.
56. IRDAI had issued circular on methodology for accounting of premium on June 15, 2022, and the same is applicable from
the financial year 2023-24. Pursuant to this the Corporation has revised the method of accruing premium for treaties where
statement of accounts are not received from ceding companies and the same was implemented effective from Quarter Ending
30.06.2023. The method of accrual was earlier based on proportionate estimate premium for cumulative period which is now
changed to accrual of premium for last quarter only. The comparative figure for estimate versus actual from financial Year
2023-24 onwards is as below:
60. The summary of the financial statements of the Corporation for the last five years is as per Annexure I.
61. The Accounting Ratios of the Corporation are stated in Annexure II.
As per our report of even date
For S H B A & CO LLP For S A R A & Associates N. Ramaswamy
(formerly known as Bathiya & Chartered Accountants Chairman-cum-Managing Director
Associates LLP) Firm Regn No.120927W (DIN 10337640)
Chartered Accountants
Firm Regn No.101046W/W100063 Radhika C. S. Hitesh Joshi
Director Director
(DIN 10703999) (DIN 09322218)
Jatin A. Thakkar Manoj Agarwal
Partner Partner
Membership No.:134767 Membership No.:119509 Satheesh Kumar V. Balkrishna
Company Secretary CFO
Membership No. A64846
Place : Mumbai
Date : 26.05.2025
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