AThe contingent liability denominated in foreign currency at the balance sheet date is disclosed by using the closing rate.
#Statutory demands and liabilities in dispute, not provided for, relate to the show cause cum demand notices/ assessment orders/appellate orders received by the Company from the respective tax Authorities. The Company has filed / in the process of filing appeals against the demand notices/assessment orders/appellate orders with the appellate authorities/Courts and has been advised by the experts that the grounds of appeal are well supported in law in view of which the Company does not expect any liability to arise in this regard.
During the year ended March 31, 2025, the Company received orders from the GST Adjudicating Authority confirming the tax demand of ' 1,04,134 Lakh as shown above, plus penalty @100% and interest as applicable. These tax demands relate to show cause cum demand notices raised by the Directorate General of GST Intelligence (DGGI) on account of disputed input tax credit (ITC) availed and utilised by the Company in respect of certain services. The Company had deposited ' 25,600 Lakh under protest with the GST Authority in these matters. The Company is in the process of filing appeals before the GST Appellate Authority contesting the issues raised in the orders. The Company continues to disclose such amounts of tax demand as contingent liabilities.
During the year ended March 31, 2025, the Company received assessment orders under section 143(3) of the Income-tax Act, 1961, for FYs 2020-21 and 2021-22. The addition/disallowance pertaining to certain expenses resulted in aggregate demand of ' 11,589 Lakh excluding interest of ' 3,658 Lakh. The Company has contested the addition/disallowance before the Commissioner of Income-tax (Appeals) and disclosed the said amount as Contingent Liability.
The amounts of statutory dues disclosed in the above table represent the principal tax demand and are exclusive of interest and penalty, which have been levied in terms of the applicable provisions of the respective statutes.
2. Pending litigations
The Company's pending litigations other than those arising in the ordinary course of insurance business comprise of claims against the Company primarily on account of proceedings pending with Tax authorities and Claims, under policies, not acknowledged as debts (net of reinsurance). The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and balance disclosed as the contingent liabilities as applicable, in note 1 of Schedule 16 (b). The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial statements as at March 31, 2025.
3. Actuarial assumptions
The policyholders' actuarial liabilities are determined based on assumptions as to the future experience of the policies. The principal assumptions are related to interest, expenses, mortality, morbidity, persistency, and additionally in the case of participating policies, bonuses and tax. The assumptions are based on prudent estimates of the future experience, and hence include margins for adverse deviations over and above the best estimate assumptions. A brief of the assumptions used by the Appointed Actuary in actuarial valuation are as below:
a) Interest rate assumptions:
The valuation rate of interest is determined based on the expected return on existing assets, current asset mix, and expected investment return on the future investment taking into consideration the asset classes mix and expected future asset mix. The interest rates used for the valuation vary according to the type and term of the product & status of policy and are presented in the table below:
Claim expenses assumption is ' 180 per maturity/surrender claim and ' 3,558 for death claim as at March 31, 2025 (' 170 per maturity/surrender claim and '3,073 for death claim as at March 31, 2024). The renewal and claim expenses are at an inflation rate of 4%p.a. to 6% p.a. (for the year ended March 31, 2024: 4%p.a. to 6% p.a).
c) Mortality assumptions:
Mortality assumptions are set in accordance with Clause 5(2) of Schedule I Part III(a) of the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, in reference to the published Indian Assured Lives Mortality (2012-14) and are based on the latest experience analysis of the business.
In the case of annuity benefits, mortality assumption is based on the Indian Individual Annuitant's Mortality Table (2012-15).
d) Morbidity assumptions:
Morbidity assumptions are set in accordance with Clause 5(3) of Schedule I Part III(a) of the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, in reference to the published CIBT 93 Table and are based on the latest experience analysis of the business.
e) Persistency assumptions:
The persistency assumptions are also based on the most recent experience of the Company and vary according to the premium frequency and type of the product.
f) Provision for free-look period:
If a policy which is in force as at the valuation date is subsequently cancelled in the free-look period, then there could be a strain in the policyholder fund on account of the amount payable on free-look cancellation, to the extent the amount is higher than reserves held for that policy. In order to avoid the future valuation strain as a result of the free-look cancellations, reserves on account of the above are held. The free-look reserve is calculated as total strain for all policies that are eligible for free-look cancellations at the valuation date, multiplied by a factor, representing the expected assumptions for free-look cancellations.
g) Bonus rates:
The bonus rates for the participating business as required to be declared in the future is based on the interest expected to be earned as per the valuation assumptions.
h) Tax:
The tax rate as applicable to insurance companies carrying on insurance business is 14.56% p.a. (for the year ended March 31, 2024: 14.56% p.a.).
B) Defined benefit plans:
I. Gratuity:
a) General description of defined benefit plan
This is a funded defined benefit plan for qualifying employees under which the Company makes a contribution to the HDFC Life Insurance Company Limited Employees Gratuity Trust (Trust). The plan provides for a lump sum payment as determined in the manner specified under The Payment of Gratuity Act, 1972, to the vested employees either at retirement or on death while in employment or on termination of employment. The benefit vests after five years of continuous service. Defined benefit obligations are actuarially determined at each quarterly Balance Sheet date using the projected unit credit method as required under Accounting Standard (as) 15 (Revised), "Employee benefits". Actuarial gains or losses are recognised in the Revenue Account.
e) Actual return on plan assets of the Gratuity plan is a gain of ' 1,142 Lakh (Previous year ended March 31, 2024 gain of ' 1,262 Lakh).
f) The Company expects to fund ' 2,459 Lakh (Previous year ended March 31, 2024 ' Nil) towards the Company's Gratuity plan during FY 2025-26.
II. Basis used to determine the overall expected return:
Expected rate of return on investments of the Gratuity plan is determined based on the assessment made by the Company (Trust) at the beginning of the year on the return expected on its existing portfolio, along with the return on estimated incremental investments to be made during the year. Yield on the portfolio is calculated based on suitable mark-up over benchmark Government Securities of similar maturities.
The estimates of future salary increases, considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
C) Gratuity for liaison office located at Dubai:
a) General description of defined plan
This is an unfunded defined benefit plan for the employees based out of the liaison office at Dubai under the United Arab Emirates (UAE) labour laws and regulations. The plan provides for lumpsum payment to vested employees who have rendered continuous service for more than a year in the following manner:
i) If an employee has served for less than 1 year, he is not entitled to any gratuity;
ii) If an employee has served for more than 1 year but less than 5 years, he is entitled to gratuity pay based on 21 days' salary for each year of service;
iii) If a worker has served more than 5 years, he is entitled to gratuity of 30 days' salary for each year of service following the first five years.
In all cases, the total gratuity shall not exceed salary of two years.
b) The following tables set out the status of the Gratuity plan as at March 31, 2025:
The Company has recognised following amounts in the Balance Sheet:
5. Employee Stock Option Scheme (ESOS)
(i) The Company has granted options to employees under the ESOS 2005, ESOS 2010, ESOS 2011 and ESOS 2012 and ESOS (Trust) 2017 schemes. These schemes are administered by the HDFC Life Employees Stock Option Trust. The Trust had subscribed to the capital of the Company and also acquired shares of the Company from Housing Development Finance Corporation Limited, the holding Company then. The options are granted to the employees from these tranches of shares. For all the grants, the mode of settlement is through equity shares. All the grants have graded vesting. The exercise price of ESOS 2005 is based on the holding cost of the shares in the books of the Trust and that of ESOS 2010, ESOS 2011 and ESOS 2012 is based on the fair market value as determined by the Category I Merchant Banker registered with SEBI. The exercise price, of the options granted under ESOS (Trust) 2017 is based on the market price of the shares of the Company, as defined in the ESOS (Trust) 2017 scheme. There are no options outstanding or exercisable for ESOS 2005, ESOS 2010, ESOS 2011 and ESOS 2012 as of March 31, 2025 and as of March 31, 2024.
(ii) The Company has also granted options to its employees under the ESOS 2014 scheme, ESOS 2015 scheme, ESOS 2016 scheme, ESOS 2017, ESOS 2018, ESOS 2019, ESOS 2022 and ESOS 2024 schemes. The said schemes are directly administered by the Company. For all the grants, the mode of settlement is through equity shares. All the grants have graded vesting. The exercise price of ESOS 2014, ESOS 2015 and of ESOS 2016
schemes is based on the fair market value as determined by the Category I Merchant Banker registered with SEBI. The exercise price, of the options granted under ESOS 2017, ESOS 2018, ESOS 2019, ESOS 2022 and ESOS 2024 is based on the market price of the shares of the Company, as defined in the respective ESOS scheme. There are no options outstanding or exercisable for ESOS 2014 and ESOS 2015 as of March 31, 2025 and as of March 31, 2024.
(iii) The Company follows the intrinsic value method of accounting for stock options granted to employees. The intrinsic value of the options issued under the above referred schemes is 'Nil' as the exercise price of the option is the same as fair value of the underlying share on the grant date and accordingly, no expenses are recognised in the books. Had the Company followed the fair value method for valuing its options, the charge to the Revenue Account/Profit & Loss Account for the year would have been aggregated to ' 5,205 Lakh (Previous year ended March 31, 2024'8,167 Lakh) and the profit after tax would have been lower by ' 3,283 Lakh (Previous year ended March 31, 2024'5,042 Lakh). Consequently, Company's basic and diluted earnings per share would have been ' 8.22 and ' 8.22 respectively (Previous year: ' 7.06 and ' 7.06 respectively).
(iv) Exercise Period under the various ESOS:
The Company's shares were listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on November 17, 2017. Prior to listing, for all grants issued under the ESOS 2010, ESOS 2011, ESOS 2012, ESOS 2014, ESOS 2015 and ESOS 2016 schemes, the vested options were required to be exercised by the employees within five years from the date of vesting or the date of an Initial Public Offering (IPO) whichever is later subject to the norms prescribed by the Nomination & Remuneration Committee. Post listing of the Company's shares, vested options under all ESOS schemes are required to be exercised by the employees within five years from the date of vesting subject to the norms prescribed by the Nomination & Remuneration Committee.
*Volatility of share price of a matured enterprise in the industry which is listed on BSE Limited till the date of listing and volatility of share price of the Company from the date of listing have been used as a basis for estimation of expected volatility of options. In the case of ESOS 2016, the expected volatility has been assumed at the rate of 10% since the company was unlisted as on the date of the grant.
6. Managerial remuneration
The appointment and remuneration of managerial personnel is in accordance with the requirements of Section 34A of the Insurance Act, 1938 as amended from time to time including the amendment brought by the Insurance Laws (Amendment) Act, 2015 and has been approved by the IRDAI.
The managerial remuneration mentioned above does not include the perquisite value as per Income Tax Act, 1961 of employee stock options exercised and the actuarially valued employee benefits that are accounted as per Accounting Standard (as) 15 (Revised), "Employee Benefits", that are determined on an overall Company basis. Further, the managerial remuneration mentioned above includes provision for Variable Performance Pay which is net of true up/true down of provisions of the earlier year. Managerial remuneration in excess of the prescribed limits by IRDAI has been charged to the Shareholder's Profit and Loss Account.
Information required under the qualitative disclosures as per the Guidelines on Remuneration of Directors and Key Managerial Persons of Insurers, prescribed by IRDAI have been furnished in the Directors' report forming part of the annual report.
I nformation required under the Quantitative disclosures is disclosed in Annexure 1. There is no deferred remuneration of MD/CEO/WTD during the year.
7. Remuneration paid to non-whole time independent directors ' 120 Lakh and expense for the year ' 120 Lakh (Previous year ended March 31, 2024 paid '50 Lakh and expense ' 120 Lakh) is included under Schedule 3A under the head "Directors Commission".
10. Leases
In accordance with the Accounting Standard (as) 19, "Leases", the following disclosures are made in respect of operating leases:
a) The Company has hired motor vehicles on cancellable operating lease for a term of up to five years. In respect of these operating leases, the lease rentals debited to the Revenue Account are ' 14 Lakh (Previous year ended March 31, 2024: ' 26 Lakh).
The terms of the lease agreements do not contain any exceptional/restrictive covenants which will have significant detrimental impact on the Company's financials nor are there any options given to the Company to purchase the motor vehicles. The agreements provide for pre-decided increase in lease rentals over the lease period and for change in the rentals if the taxes leviable on such rentals are revised.
b) The Company has taken properties under operating lease. In respect of these operating leases, the lease rentals debited to rent under the head "Rent, rates and taxes" in the Revenue Account are ' 11,378 Lakh (Previous year ended March 31, 2024: ' 9,233 Lakh).
The lease arrangements contain provisions for renewal and escalation. The terms of the lease agreements do not contain any exceptional/restrictive covenants which will have significant detrimental impact on the Company's financials.
c) The Company has taken furniture and generators under cancellable operating lease. In respect of these operating leases, the lease rentals debited to rent under the head "Rent, rates and taxes" in the Revenue Account are ' 64 Lakh (Previous year ended March 31, 2024: ' 74 Lakh).
d) The Company has taken cloud services, networking equipment etc under operating lease. In respect of these operating leases, the lease rentals debited to rent under the head "Rent, rates and taxes" in the Revenue Account are ' 26 Lakh (Previous year ended March 31, 2024: '2 Lakh).
13. Corporate Social Responsibility (CSR)
As per section 135 of the Companies Act, 2013 and amendment rules, the gross amount required to be spent by the Company during the year ended March 31, 2025 is ' 1,397 Lakh (Previous year ended March 31, 2024 '1,530 Lakh). The Company has incurred ' 1,100 Lakh (Previous year ended March 31, 2024: '2,323 Lakh) on various CSR initiatives and balance of ' 297 Lakh has been setted off against excess CSR amounts of previous years.
Unspent amount pertaining to 'other than ongoing projects' transferred to any fund included in Schedule VII of the Companies Act 2013 is 'Nil (Previous year ended March 31, 2024 ' Nil)
Amounts of related party transactions pertaining to CSR related activities for the year ended March 31, 2025 is ' Nil (Previous year ended March 31, 2024 ' Nil)
14. Borrowings
During the year ended March 31, 2025, the Company had issued unsecured, subordinated, fully-paid, rated, listed, redeemable non-convertible debentures (NCDs) in the nature of 'Subordinated Debt' as per the IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024 amounting to ' 100,000 Lakh at a coupon rate of 8.05% per annum and subsequently ' 100,000 Lakh at a coupon rate of 8.10% per annum. The said NCDs were allotted on October 09, 2024 and February 14, 2025 and are redeemable at the end of 10 years from the date of allotment with a call option to the Company to redeem the NCDs post the completion of 5 years from the date of allotment and annually thereafter.
As on the reporting date i.e March 31, 2025, the Company has following instances of issuances of nonconvertible debentures (NCDs) aggregating to ' 2,95,000 Lakh as per the below terms of borrowings:
15. Derivative contracts:
I n accordance with the IRDAI circular no. IRDA/F&I/INV/CIR/138/06/2014 dated June 11, 2014 ('the IRDAI circular on Interest Rate Derivatives') and Master Circular on Actuarial, Finance and Investment Functions of Insurers dated May 17, 2024, allowed insurers to deal in rupee interest rate derivatives, the Company has in place a derivative policy approved by Board which covers various aspects that apply to the functioning of the derivative transactions undertaken to substantiate the hedge strategy to mitigate the interest rate risk, thereby managing the volatility of returns from future fixed income investments, due to variations in market interest rates.
a) The Company has during the year, as part of its Hedging strategy, entered into interest rate derivative transactions to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI circular on Interest Rate Derivatives.
Forward Rate Agreement (FRA) derivative contracts are over-the-counter (OTC) transactions and Interest Rate Future (IRF) are exchange trade standard contracts, agreeing to buy notional value of a debt security or Government Bond (GOI) at a specified future date, at a price determined at the time of the contract with an objective to lock in the price of an interest bearing security at a future date.
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 Interest Rate Futures (IRF) are exchanged traded derivative instrument and valued at closing settlement prices published by primary stock exchange.
An amount of ' 10,814 Lakh (Previous year ' (17,196) Lakh) was recognized in Revenue Account being the portion of gain/(loss) determined basis the hedge accounting.
Amount that was removed from Hedge Reserve account during the year ended March 31, 2025 in respect of forecast transaction for which hedge accounting had previously been used, but is no longer expected to occur is ' NIL (Previous year ' Nil).
The cash flows from the hedges are expected to occur over the outstanding tenure of underlying policy liabilities and will accordingly flow to the Revenue Account.
Qualitative Disclosures on risk exposure in Fixed Income Derivatives:
Overview of business and processes:
a) Fixed Income Derivative Hedging instruments:
Derivatives are financial instruments whose characteristics are derived from the underlying assets, or from interest and exchange rates or indices. These include forward rate agreements, interest rate swaps and interest rate futures.
The Company during the financial year has entered into permitted fixed income derivative instrument to minimize exposure to fluctuations in interest rates on plan assets and liabilities. This hedge is carried in accordance with its established policies, goals and applicable regulations. The Company does not engage in derivative transactions for speculative purposes.
b) Derivative policy/process and Hedge effectiveness assessment:
The Company has well defined Board approved Derivative Policy and Process document setting out the strategic objectives, regulatory and operational framework and risks associated with interest rate derivatives along with having measurement, monitoring processes and controls thereof. The accounting policy has been clearly laid out for ensuring a process of periodic effectiveness assessment and accounting.
The Company has clearly identified roles and responsibilities to ensure independence and accountability through the investment decision, trade execution, to settlement, accounting and periodic reporting and audit of the Interest Rate Derivative exposures. The overall policy, risk management framework for the Interest Rate Derivatives are monitored by the Risk Management Committee.
c) Scope and nature of risk identification, risk measurement, and risk monitoring:
The Derivative and related Policies as approved by the Board sets appropriate market limits such as sensitivity limits and value-at-risk limits for exposures in interest rate derivatives.
All financial risks of the derivative portfolio are measured and monitored on periodic basis. Quantitative disclosure on risk exposure in Forward Rate Agreement
A hedge is deemed effective, if it has a high statistical correlation between the change in value of the hedged item and the hedging instrument (FRA/IRF). Gains or losses arising from hedge ineffectiveness, if any, are recognized in the Revenue Account.
The tenure of the hedging instrument may be less than or equal to the tenure of underlying hedged asset/liability.
The industry exposure limit for FRA exposure has been calculated on the basis of Credit Equivalent
Amount using the Current Exposure Method (CEM) as detailed below:
The Credit Equivalent Amount of a market related off-balance sheet transaction calculated using the
CEM is the sum of
a) the current credit exposure (gross positive mark to market value of the contract); and
b) potential future credit exposure which is a product of the notional principal amount across the outstanding contract and a factor that is based on the mandated credit conversion factors as prescribed under the IRDAI circular on Interest Rate Derivatives, which is applied on the residual maturity of the contract.
18. Investment property
As mandated under IRDAI circular IRDAI/CIR/F&I/INV/056/03/2016-17 investment in Real Estate Investment Trusts (REIT) of ' 164,313 Lakh (Previous year ended March 31, 2024'115,631 Lakh) has been disclosed as part of the Investment Property under 'Long term investments' in Schedule 8A (Policyholders' Investments)
21. Claims outstanding
As at March 31, 2025, there were 144 claims amounting to ' 1,836 Lakh (Previous year ended March 31, 2024: 4235 claims amounting to ' 3,185 Lakh) settled and remaining unpaid for a period of more than six months. These claims remain unpaid awaiting receipt of duly executed discharge documents from the claimants. All claims are to be paid to claimants in India.
22. Provision for NPA (non standard assets) for debt portfolio
Provision for doubtful debts is made In line with the 'Guidelines on Prudential norms for income recognition, Asset classification, Provisioning and other related matters in respect of Debt portfolio' as specified by IRDAI vide the Master Circular on Actuarial, Finance and Investment Functions of Insurers dated May 17, 2024, as amended from time to time, and has been recognized in the Profit and Loss account (Shareholders' Fund) and Revenue Account (Policyholders' Fund), as per below table:
During the year ended March 31, 2025 the company has not recognized any additional NPA provision on investment in debt securities. During the year company has recovered ' 72 Lakh and ' 272 Lakh from issuer (IL&FS Ltd and IL&FS Financial Services Ltd) in Shareholders' Fund and Policyholders' Fund respectively, towards partial repayment of principal amount due on NCDs.
I n addition to above, during the year the company has also received 1,62,759 units (FV ' 163 Lakh) and 1,037,241 units (FV ' 1,037 Lakh) of Roadstar Infrastructure Investment Trust (iNVITs) in Shareholders' Fund and Policyholders' Fund respectively, as part of resolution framework of IL&FS group, towards partial repayment of principal amount due on IL&FS group NCDs. The said units of INVITs are listed on stock exchange, however there were NIL trades on the stock exchange since listing and hence fair price could not be arrived in the absence of active market. Considering illiquid status of the such INVIT asset which is still awaiting price discovery the company has not reversed NPA provision towards IL&FS group NCDs. The provision to that extent has been reclassified and shown as part of impairment provision on INVIT units received as resolution framework with no impact in Revenue account and profit and loss account.
' 375 Lakh NPA provision on investment in NCDs of IL&FS Group Companies recognized in revenue account, which is a reclassification due to maturity of bonds in unit linked funds with corresponding impact of reversal in Fair value change account, and hence have neutral impact in Revenue account.
23. Segmental reporting
As per Accounting Standard (as) 17, "Segment Reporting", read with the IRDAI Financial Statements Regulations, Segmental Accounts are disclosed in Annexure 2.
24. Policyholders' surplus
The surplus arising in the non-participating funds amounting to ' 58,771 Lakh (Previous year ended March 31, 2024: '37,881 Lakh) has been transferred to Profit and Loss account based on the recommendation by the Appointed Actuary.
The above contribution is subject to approval by shareholders at the Annual General Meeting is irreversible in nature and will not be recouped to the Shareholders.
26. Unit Linked Funds
The Company has presented the financial statements of the unit linked funds in Annexure 3 and 4 as required by the Master Circular.
27. The Micro, Small and Medium Enterprises Development Act, 2006
According to information available with the management, on the basis of intimation received from suppliers, regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the details of amounts due to Micro and Small Enterprises under the said Act as on March 31, 2025 are as
28. Earnings per equity share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for effects of all dilutive equity shares.
29. Subsidiaries:
The Company has two subsidiaries, for which information is given as under:
i. HDFC Pension Fund Management Limited (formerly HDFC Pension Management Company Limited) ("HDFC Pension") is a wholly owned subsidiary of HDFC Life Insurance Company Limited and has been a licensed pension fund manager since 2013 and also licensed as Point of Presence (PoP) for distribution of NPS and servicing to public at large since February 2019. It was granted license under the new Request for Proposal (RFP) by the PFRDA and was issued certificate of registration dated 30th March, 2021 to act as Pension Fund under NPS architecture. HDFC Pension has been a preferred pension fund manager and its Assets Under Management have grown to ' 115,627 crores as at March 31, 2025 (as at March 31, 2024'76,955 crores).
ii. HDFC International Life and Re Company Limited ("HDFC International Life & Re") is a wholly owned foreign subsidiary incorporated in Dubai International Financial Centre ("DIFC") as a Company Limited by Shares under the previous Companies Law, DIFC Law No.2 of 2009 on January 10, 2016 under registration number 2067. The Company has been designated as a Private Company under the Companies Law, DIFC Law no. 5 of 2018 as on the date of its enactment. HDFC International Life & Re is regulated by the Dubai Financial Services Authority ("DFSA") and is licensed to undertake life reinsurance business. It provides risk-transfer solutions, prudent underwriting solutions and value added services, among others, across individual life, group life and group credit life lines of business. HDFC International Life & Re currently offers reinsurance solutions in the Gulf Cooperation Council ("GCC"), Middle East & North Africa ("MENA") region and India. The Company has been granted the Certificate of Registration to set up overseas Branch in GIFT City, IFSC (regulated by the IFSCA) for conduct of life and health insurance classes of business and has started operations in GIFT City in August 2023.
HDFC International Life & Re was assigned a long-term insurer public financial strength rating of "BBB" with a stable outlook by S&P Global Ratings in December 2018. Subsequently every year S&P Global Ratings confirmed the long-term insurer public financial strength rating of the Company, while maintaining 'Stable outlook'. In October 2022, S&P Global Ratings confirmed the long-term insurer Financial Strength Rating (FSR) of the Company, while changing the outlook as "Negative". In November 2023, S&P Global Ratings confirmed the long-term insurer Financial Strength Rating (FSR) of the Company, while maintaining the outlook as "Negative".In October 2024, S&P Global Ratings confirmed the long-term insurer Financial Strength Rating (FSR) of the Company, while changing the outlook as "Stable". In addition, AM Best Ratings has assigned the Company a long-term insurer Financial Strength Rating (FSR) as "B++ (Good)".
30. Final Dividend
The Board of Directors have recommended a final dividend of ' 2.10 per equity share of face value of ' 10 each in its board meeting held on April 17, 2025, subject to Shareholders approval in the Annual General Meeting.
31. During the year ended March 31, 2025, the Company had transactions with related parties, which have been identified by the management as per the requirements of the Accounting Standard (as) 18, "Related Party Disclosures". Details of these related parties, nature of the relationship, transactions entered into with them and the balances in related party accounts at year end are as mentioned below:
34. Share application money received pending allotment of shares amounting to ' 64 Lakh (Previous year ' Nil) disclosed in the Balance Sheet as on March 31, 2025 relates to the application money received towards Employee Stock Option Plans under Company's Employee Stock Options Scheme(s).
35. The Company claims credit of Goods and Services Tax ('GST') on input services, which is set off against GST on output services. The unutilised credits towards GST on input services are carried forward under 'Schedule 12 -Advances and Other Assets' in the Balance Sheet.
During the year ended March 31, 2025 the company has not recognized any additional NPA provision on investment in debt securities. During the year company has recovered ' 72 Lakh and ' 272 Lakh from issuer (IL&FS Ltd and IL&FS Financial Services Ltd) in Shareholders' Fund and Policyholders' Fund respectively, towards partial repayment of principal amount due on NCDs.
I n addition to above, during the year the company has also received 1,62,759 units (FV ' 163 Lakh) and 1,037,241 units (FV ' 1,037 Lakh) of Roadstar Infrastructure Investment Trust (iNVITs) in Shareholders' Fund and Policyholders' Fund respectively, as part of resolution framework of IL&FS group, towards partial repayment of principal amount due on IL&FS group NCDs. The said units of INVITs are listed on stock exchange, however there were NIL trades on the stock exchange since listing and hence fair price could not be arrived in the absence of active market. Considering illiquid status of the such INVIT asset which is still awaiting price discovery the company has not reversed NPA provision towards IL&FS group NCDs. The provision to that extent has been reclassified and shown as part of impairment provision on INVIT units received as resolution framework with no impact in revenue account.
' 375 Lakh NPA provision on investment in NCDs of IL&FS Group Companies recognized in revenue account, which is a reclassification due to maturity of bonds in unit linked funds with corresponding impact of reversal in Fair value change account, and hence have neutral impact in Revenue account.
2. Deposits made under local laws
The Company has no deposit (Previous year ended March 31, 2024: ' Nil) made under local laws or otherwise encumbered in or outside India as of March 31, 2025, except investments and deposits detailed in Note 16 of Schedule 16(b).
IRDAI has issued Insurance Regulatory and Development Authority of India (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024 dated March 28, 2024. This regulation came into force from April 1, 2024. The company is separately tracking the obligatory part w.r.t. new regulation.
4. Allocation of investments and investment income
The underlying investments held on behalf of the shareholders and the policyholders are included in Schedules 8, 8A and 8B. The investment income arising from the investments held on behalf of shareholders has been taken to the Profit and Loss Account and those held on behalf of policyholders to the Revenue Account.
8. Impairment of investments
I n accordance with the Financial Statements Regulations, Schedule A Part I on Accounting Principle for Preparation of Financial Statements on procedure to determine the value of investment and the relevant circular, the impairment in value of investments other than temporary diminution has been assessed as at March 31, 2025 and accordingly impairment provisions have been provided as below.
Listed equity shares / Infrastructure Investment Trusts (iNVITs)
A provision/(reversal) for impairment loss has been recognised in Revenue Account and Profit and Loss Account under the head "Provision for diminution in the value of investments" and corresspondingly, Policyholders' and Shareholders' Fair Value Change Account under Policyholders' and Shareholders' Funds respectively in the Balance Sheet have been adjusted for such (reversal)/provision of impairment loss, the details of which are given below:
During the year the company has also received 1,62,759 units (FV ' 163 Lakh) and 1,037,241 units (FV ' 1,037 Lakh) of Roadstar Infrastructure Investment Trust (INVITs) in Shareholders' Fund and Policyholders' Fund respectively, as part of resolution framework of IL&FS group, towards partial repayment of principal amount due on IL&FS group NCDs. The said units of INVITs are listed on stock exchange, however there were NIL trades on the stock exchange since listing and hence fair price could not be arrived in the absence of active market. Considering illiquid status of the such INVIT asset which is still awaiting price discovery the company has not reversed NPA provision towards IL&FS group NCDs. The provision to that extent has been reclassified and shown as part of impairment provision on INVIT units received as resolution framework.
Unlisted Equity Shares
A provision/(reversal) for impairment loss has been recognised in Revenue Account and Profit and Loss Account under the head "Provision for diminution in the value of investments" and corresspondingly, Other than Approved Investments under Schedule 8A (Policyholders' Investments) and Schedule 8 (Shareholders' Investments) respectively have been adjusted for such diminuton, the details of which are been given below:
Security Receipts and Venture Fund
A provision/(reversal) for impairment loss has been recognised in Revenue Account and Profit and Loss Account under the head "Provision for diminution in the value of investments" and corresspondingly, Other than Approved Investments under Schedule 8A (Policyholders' Investments) and Schedule 8 (Shareholders' Investments) respectively have been adjusted for such diminuton, the details of which are been given below:
17. In accordance with the IRDAI (Investment) Regulations 2016 and IRDAI circular IRDA/F&I/INV/CIR/062/03/2013 dated March 26, 2013, the Company has declared March 31, 2025 as a business day. NAV for all unit linked segments were declared on March 31, 2025. All applications received till 3 PM on March 31, 2025, were processed with NAV of March 31, 2025. Applications received after this cut-off for unit linked funds are taken into the next financial year.
18. Long term contracts
The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provisions as required under any law/accounting standard for material foreseeable losses on such long term contracts including derivative contracts has been made in the financial statements.
For insurance contracts, actuarial valuation of liabilities for policies in force is done by the Appointed Actuary of the Company. The assumptions used in valuation of liabilities for policies in force are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI.
19. IND AS Implementation
Based on the Regulator's email dated 10th October 2024, the Company was identified under phase 1 to implement IndAS from April 1, 2027, onwards. Accordingly, the Company has identified technology system partner and key accounting/ actuarial knowledge partners to assist on the IndAS project implementation. The Company is in the final stages of onboarding such partners. The Company's steering committee is closely monitoring the progress of the implementation and is working towards achieving timelines set by the Regulator. The Audit Committee and Board of Directors are regularly updated on the project.
During the current year, the Regulator has further set expectation to provide proforma financials for FY 2024 with limited review by Independent audit and actuarial firms. The Company is in the process of preparing such proforma financials and then getting it reviewed by Independent audit/ actuarial firms.
20. 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 any other person or entities, including foreign entities ('Intermediaries') with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lent or invest in party identified by or on behalf of the Company (Ultimate beneficiaries). The Company has also not received any fund from any parties (Funding Party) with the understanding that the Company shall whether, directly or indirectly lent or invest in other persons or entities identified by or on behalf of the Funding Party ('Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
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