2. Actuarial Assumptions for valuation of Policy liabilities:

The Corporation’s Life Insurance Business consists of Participating and Non-participating segments which are further categorized into Non-linked and Linked business. Participating segment consists of Non-linked Individual Assurance, Annuity and Pension plans. Non-participating segment consists of both Non-linked and Linked business under Individual as well as Group business. The Non-participating Individual business consists of Assurance, Annuity, Pension, Health plans and Variable Insurance Plans (VIP) under Non-linked business and Assurance, Pension and Health plans under Linked business. The Non-participating Group business consists of Annuity, Superannuation (including VIP) and Other plans under Non-linked platform and Superannuation Linked plans. The portfolio also consists of riders such as Term Assurance Rider, Accident Benefit Rider, Accidental Death and Disability Benefit Rider and Premium Waiver Benefit Rider.

The policy liabilities are determined based on the valuation assumptions for interest, mortality, morbidity, withdrawal, expenses, inflation and bonuses where applicable. The best estimate assumptions are determined based on the past experience analysis and expected future experience. The valuation assumptions are arrived at after factoring in margins on the best estimate assumptions as per the applicable Regulations and Actuarial Practice Standards.

The valuation rates of interest used vary according to the line of business and ranges from 5.65% p.a. to 7.38% p.a. depending on the nature and term of the underlying assets and liabilities. Bonus rate assumptions are aligned to be consistent with the valuation rates of interest.

The mortality assumptions used are based on the published Indian Assured Lives Mortality (2012-14) Ultimate Table and Indian Individual Annuitants Mortality (2012-15) Ultimate Table and Morbidity assumptions are based on the Critical Illness Base Table (CIBT 93) /Reinsurer’s incidence rates.

The expense assumptions for valuation are either as a percentage of premiums or as per policy expenses. The renewal per policy expenses vary according to the type of Plan and status of the policy. An assumption for expense inflation is also made.

While valuing Participating policies, allowance is also made for allocation of surplus to shareholders and for applicable taxes.

Reserves have also been provided for liability in respect of Riders. Additional provisions are made for reserves for revival/ reinstatement of paid up or lapsed policies eligible for revival, additional expenses that may be incurred in case the office is closed for new business, COVID, AIDS/HIV, Incurred But Not Reported deaths (IBNR), Catastrophe etc. where applicable. Further, in case of Linked Plans, where there is a guarantee at maturity, cost of such guarantee has been arrived at using

stochastic methods. For Bima Account II, the cost of interest guarantee has been provided for. For Plans where there are options which can be exercised by the policyholders, the most onerous option has been taken for valuing these options.

3. Encumbrances to assets of the Corporation in and outside India:

a) The assets of the Corporation are free from any encumbrances except, to the extent required to be deposited under local laws or otherwise encumbered Securities with (SLOC/CCIL) and Custodians: ' 2,952.03 crore (Previous year ' 3,548.52 crore).

Provision for tree-look period:

Provision for free-look period of ' 34.47 crores and ' 29.58 crores as at year end March 31, 2026 and March 31, 2025 respectively has been made on the basis of actual premium refunded during the month of April 2026 and April 2025 respectively. The provision is made with an assumption that all refund of premium during the month of April 2026 and April 2025 pertained to the policies completed on or before March 31,2026 and March 31,2025 respectively.

13. Impairment of Investments:

Unlisted/Thinly traded equity shares, preference shares, equity under affiliated investments, Venture Funds, AIF, Unlisted INVIT, Loans and Debentures

A provision/ (reversal) for impairment loss has been recognized in Revenue Account and Profit & Loss Account under the head “Provision for diminution in the value of Investments” and correspondingly, under Schedule 8A (Policyholders’ Investments), Schedule 8 (Shareholders’ Investments), 8B (Assets held to cover Linked Liabilities) and Schedule 9 (Loans) respectively have been adjusted for such diminution, the details of which are given below:

17. Derivative Contracts:

The Corporation offers guaranteed products wherein the policyholders are assured of a fixed rate of return for premiums to be received in future. These premiums are likely to be received over a longer tenure and the guaranteed rate of return is fixed at the beginning of the policy term. Any fall in interest rates would mean that each incremental investment of the Corporation would earn a lower rate of return. Accordingly, the Corporation manages the Interest Rate Risk in accordance with the IRDAI circular no. IRDA/F&I/INV/CIR/138/06/2014 dated 11 June, 2014 ('the IRDAI Circular on Interest Rate Derivatives) and Master circular on Actuarial, Finance and investment functions of insurers 2024 dated 17^th May 2024 which allows insurers to deal in rupee interest rate derivatives such as Forward Rate Agreements ("FRAs"), Interest Rate Swaps ("IRS") and Exchange Traded Interest Rate Futures ("IRF").

The Corporation 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 investment, due to variations in market interest rates.

During the year the Corporation has entered into Forward Rate Agreements (FRA) transactions, as part of Corporation's Board approved Hedging strategy, to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI circular on Interest Rate Derivatives.

Forward Rate Agreement derivative contracts are over-the counter (OTC) transactions wherein, the Corporation lock-in the yield on the government bond at a specified future date at a price decided at the time of the FRA contract with an objective to lock in the price of an interest bearing security at a future date.

Derivatives (FRA) are undertaken by Corporation solely for the purpose of hedging interest rate risks on account of following 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.

An amount of ' 27.94 crore (Previous year ' 1.25 crore) was recognised in consolidated Revenue Account being the portion of loss determined basis the hedge accounting.

The amount that was removed from Hedge Fluctuation Reserve account during the year ended 31^st March, 2026 in respect of forecasted 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.

B. 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 Corporation has during the year, as part of its Hedging strategy, entered into Forward Rate Agreements (FRA) transactions to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI circular on Interest Rate Derivatives. The Corporation does not engage in derivative transactions for speculative purpose.

b) Derivative policy/process and Hedge effectiveness assessment:

The Corporation 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 Corporation 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 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.

d) 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). Gains or losses arising from hedge ineffectiveness, if any, are recognised in the Revenue Account.

The tenure of the hedging instrument may be less than or equal to the tenure of underlying hedged asset/liability. Interest Rate Derivative - Counterparty exposure

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.

24. Disclosure on presentation of segmental Reporting:

As per Accounting Standard (AS) 17, “Segment Reporting”, read with the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, Segmental Accounts are disclosed in Annexure I.

25. Progress of implementation of Ind AS:

The Corporation has prepared and submitted Ind AS compliant Proforma Financial Statements (PFS) for FY 2023-24 and FY 2024-25 within the stipulated timelines to Insurance Regulatory and Development Authority of India (“IRDAI”).

The Regulator notified Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers), (Amendment) Regulations, 2026 on 30^th March, 2026, making implementation of Ind AS effective from 01.04.2026. The Corporation has applied for grant of one year forbearance for implementation and response is awaited from the Regulator.

In line with regulatory requirements, the Corporation is making steady progress towards implementation of Ind AS as per the timelines submitted to the Regulator.

26. Foreign Exchange Reserve:

Operations carried out in Fiji, Mauritius, United Kingdom and Gift City are of non-integral nature.

29. Pursuant to Regulatory approval received by the Corporation, an amount of ' 9,280.37 crore pertaining to additional contribution due to increase in family pension is being amortised over 20 quarters commencing from Q3 of the FY 2023-24 amounting to ' 464.02 crore per quarter. An amount of ' 464.02 crore and ' 1,856.08 crore have been charged to Revenue Account for the quarter and year ended March 31,2026 respectively. The balance amount of ' 4,640.17 crore as on March 31,2026 shall be amortised over the subsequent quarters upto Q2 of the FY 2028-29.

30. Pursuant to Regulatory approval received by the Corporation, an amount of ' 7,230.09 crore in Par segment pertaining to excess Expenses of Management for the FY 2022-23 is being replenished from Shareholders’ account in equal annual instalments not exceeding three, commencing from Q1 of the FY 2024-2025. Accordingly, an amount of ' 602.51 crore and ' 2,410.04 crore have been replenished from the Shareholders’ account for the quarter and year ended March 31, 2026 respectively. The balance amount of ' 2,410.01 crore shall be replenished from Shareholders’ account over the subsequent quarters upto Q4 of the FY 2026-27.

31. Pursuant to Regulatory approval received by the Corporation, an amount of ' 5,477.10 crore towards additional pension liability pertaining to Par segment is being charged to the Shareholders account over a period not exceeding three years commencing from the FY 2024-2025. Accordingly, an amount of ' 456.42 crore and ' 1,825.68 crore have been charged to Shareholders’ account for the quarter and year ended March 31,2026 respectively. The balance amount of ' 1,825.74 crore shall be charged to Shareholders’ account over the subsequent quarters upto Q4 of the FY 2026-27.

32. On November 21, 2025, the Government of India has notified the four new Labour codes - The Code on Wages, 2019, The Industrial Relations Code, 2020, The Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 consolidating 29 existing labour laws. The Corporation has assessed the impact of these changes to the extent applicable and has made provision in the books on estimated basis.

33. The Board of Directors has recommended a final dividend of ' 10 /- per equity share of ' 10 /- each for the Financial Year 2025-26 after considering the Bonus Shares issue, subject to approval of shareholders in the ensuing Annual General Meeting of the Corporation.

34. Provision for tax is net of reversal of provision of income tax of ' 11,422.77 crore. This amount has been reversed during Q4 of FY 2025-26, based on favorable orders received from Appellate Authorities on tax matters, and management assessment of tax balances. The provision for tax for current financial year is ' 7,249.36 crore and for quarter ending 31^st March, 2026 is ' 2,333.91 crore.

35. Effect of change in Accounting Policy in respect of Investment: During the current year, the Corporation has changed its Accounting Policy with respect to Non-Linked Business and Non Unit fund of Linked Business - Debt Securities, including Government Securities, where the face value exceeds the historical cost, so as to make a more appropriate presentation of the Financial Statements. Previously, the discount on such investments was recognized as profit on redemption or maturity. As per the changed Accounting Policy, the discount is amortized on a straight line basis over the remaining holding period until Maturity. As a result of this change in Accounting Policy, an amount of ' 10,958.97 crores have been disclosed as amortization of discount on Investments in the Revenue Account after adjusting the premium amortization amount of ' 1,537.08 crores and ' 51.84 crores in the Profit and Loss Account after adjusting the premium amortization amount of ' 50.10 crores for the quarter and year ended March 31,2026. The corresponding increase has been incorporated in the Investment Asset Schedules (8/8A/8B) under the respective segments.

36. A description of the Risk Management Architecture:

LIC has robust Enterprise Risk Management (ERM) framework to conduct business in an orderly manner taking into account the risks faced by the Corporation and controlling its business effectively with defined responsibilities and adequate risk management procedures.

Board of Directors provide the overall guidance on Risk Management function which includes providing necessary oversight on key risks and measures, approving the Enterprise Risk Management Policy, Cyber security policy, Risk Appetite statement, Asset Liability Management (ALM) Policy and Business Continuity Plan (BCP) of the Corporation on an annual basis.

In line with the IRDAI Guidelines, Corporation has constituted the Risk Management Committee (RMC). The RMC looks after the risk management governance structure, reviews the risk management framework, risk appetite and the risk mitigation plans for significant risks, identifies strategic risks emanating from changes in business environment and regulations, oversees the compliance to regulatory requirements, all matters related to Asset Liability Management, IT Security policy on annual basis, reviews regular updates on business continuity in line with the Corporation’s Business Continuity Plan, solvency position of the Corporation, fraud monitoring, etc. on regular basis. Further, all important matters which, in the view of the RMC, require further strategic intervention from the Board are brought to its knowledge in its meeting on a periodic basis.

Two independent internal Committees, named as Committee of Executives on Risk Management (CERM) and Asset Liability Committee (ALCO) have been constituted with Heads of key functional departments. Chief Risk Officer (CRO) acts as the custodian of Enterprise Risk Management framework and guides the implementation of Enterprise Risk Management. Recommendations of the Committee of Executives on Risk Management & Asset Liability Committee are reported to RMC. CERM & ALCO supports the RMC by supervising major functions like reviewing Enterprise Risk Management Policy, ALM Policy, Risk Appetite Statement, MIS for risk reporting/risk control, key risks arising from strategic initiatives and changes in business environment or regulations, risk assessment highlighting significant risks and risk mitigation plans thereof, review of operating risk environment including Business Continuity Plan, review of solvency position of the Corporation on a regular basis, review of risk related to IT security and Fraud Monitoring. A consolidated report on various issues discussed by CERM & ALCO and action taken thereon are reported to RMC on quarterly basis.

Information Security Steering Committee (ISSC) consisting of heads of departments of Central office, Chief Risk Officer (CRO) and Chief Information Security Officer (CISO) oversees all Information and cyber security related policies and procedures.

1. Income on Unclaimed amount of policyholders is included in Income from Investment

2. Inclusive of interim bonuses, if any

3. Includes Provision (other than Taxation), Provision for Doubtful Debt, Bad Debt written off and Goods & Service Tax on ULIP charges

*The Board of Directors has recommended a final dividend of ' 10 /- per equity share of ' 10 /- each for the Financial Year 2025-26 after considering the Bonus Shares issue, subject to approval of shareholders in the ensuing Annual General Meeting of the Corporation.

49. Figures of the previous period/year have been regrouped wherever necessary to conform to the current periods’ presentation.