15. Provisions, Contingent Liabilities and Contingent Assets:

A Provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities (other than policies), if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statements.

16. Receipts and Payments Account:

Receipts and Payments Account is prepared and reported using the Direct Method in accordance with Para 2.2 of the Master Circular on Preparation of Financial Statements and Filing of Returns of Life Insurance Business Ref No. IRDA/ F&A/Cir/232/12/2013 dated December 11,2013.

17. Taxation:

a) Direct Tax: Provision for income tax is made in accordance with the provisions of Section 44 of the Income Tax Act, 1961 read with Rules contained in the First Schedule and other relevant provisions of the Income Tax Act, 1961 as applicable for life insurance business.

b) Indirect Tax: The Corporation claims credit of goods and services tax on input services, which are set off against goods and services tax on output services.

Unutilized credits towards goods and services tax on input services are carried forward under ‘Schedule 12 -Advances and Other Assets’ in the Balance Sheet, wherever there is reasonable certainty of utilization.

18. Borrowing Costs:

Borrowing costs include interest, commission/brokerage on deposits and exchange differences arising from foreign currency borrowings to the extent they are regarded as adjustment to interest cost.

19. Earnings per share:

Basic earnings per share is computed by dividing the net profit or loss after tax attributable to equity shareholders by weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

20. Segmental Reporting:

a) Identification of Segments:

Based on the primary segments identified under IRDA (preparation of Financial statements and auditors’ report of insurance Companies) regulations 2002 (‘the regulations’) read with Accounting Standard 17 on “segmental reporting” notified under section 133 of the Companies act 2013 and rules there under, the Corporation has classified and disclosed segmental information separately for shareholders and policyholders. Accordingly the Corporation has prepared the Revenue Account and the Balance Sheet for the primary business segments namely Participating Life Individual, Participating Pension Individual, Participating Annuity Individual, Non Participating Life (Individual & Group), Non Participating Pension (Individual & Group), Non Participating Annuity Individual, Non Participating Variable individual, Non Participating Health individual, Non Participating Unit Linked and Capital Redemption and Annuity Certain Business (CRAC). The Corporation operates in various geographical segments.

b) Basis of allocation of expenditure to various segments of business:

Operating Expenses relating to life insurance business after adjusting for expenses attributable to Shareholders Account and are allocated to various lines of Business such as Non-Linked Participating, Non-Linked Non-Participating, General Annuities, Pensions, Health, Group Business and Unit Linked Business on the basis of:

a. Expenses which are directly identifiable to the respective lines of business have been allocated to these lines of business on actual basis, and

b. Other expenses which are not directly identifiable to the respective lines of business are allocated out of the

common pool on the following basis or a combination of these:

i. Number of policies

ii. Total premium income

iii. Sum assured

Allocation of expenses among various lines of business is based on the approved expense policy of the

Corporation.

21. Leases:

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

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

b) Finance Lease: Leases under which the Corporation assumes substantially all the risks and the rewards of ownership of the asset are classified as finance lease. Such leased asset acquired are capitalised at fair value of the asset or present value of the minimum lease rental payment at the inception of the lease, whichever is lower.

22. Funds for future appropriations:

For Non-linked Participating business, the balance in the funds for future appropriations account represents funds, the allocation of which, either to participating ‘Policy Holders’ or to ‘Shareholders’, has not been determined at the Balance Sheet date. Transfers to and from the fund reflect the excess or deficit of income over expenses and appropriations in each accounting period arising in the Corporation’s ‘Policy holders’ fund. In respect of participating policies any allocation to the policyholder would also give rise to a shareholder transfer in the required proportion.

The fund for future appropriations held in the Unit-Linked funds, represents surplus that has arisen from lapsed policies unlikely to be revived. This surplus is required to be held within the ‘policyholders’ fund till the point at which the policyholders’ can no longer revive their policy.

23. Unclaimed amount of policyholders:

Assets held for unclaimed amount of policyholders are created and maintained in accordance with the requirement of Master circular on Unclaimed amount of Policyholders IRDA/F&A/CIR/Misc/282/ 11/2020 dated November 17, 2020 and Investment Regulations, 2016 as amended from time to time:

a) Assets of unclaimed amounts of policyholders are disclosed in Schedule 12 “Advances and Other Assets”, forming part of Balance Sheet. Corresponding income on unclaimed assets is shown under “Interest, Dividend & Rent- Gross” in Revenue Account.

b) Income earned on unclaimed amount of policyholders is accreted to respective unclaimed fund and is accounted for on an accrual basis.

c) Amounts remaining unclaimed for a period of 10 years along with all respective accretions to the fund are deposited into the Senior Citizen Welfare Fund (SCWF) as per requirement of IRDAI regulations.

24. Income arising from Available Solvency Margin (ASM) fund:

Income arising from Available Solvency Margin (ASM) fund, which is part of Non-Participating fund, is treated as Income of the respective accounting period under Non-Participating business. Consequently amount (net of Tax) pertaining to the accretion on the ASM has been transferred from Non-Participating to Shareholders Fund along with equal amount of Assets.

3. Actuarial Assumptions for valuation of Policy liabilities:

The Corporation’s Life Insurance Business consists of linked and non-linked business under Individual and Group contracts. The non-linked business consists of Participating Assurance /Annuity / Pension policies and Non-participating Assurance / Annuity /Pension / Individual Health policies and Group policies written under non-participating assurances. The linked business consists of Non-participating Assurance / Pension / Individual Health policies with a very small proportion of linked assurance business written under Group contracts. Some of these policies have riders attached to them such as Critical Illness, Premium Waiver Benefit, Term Assurance and Accident Benefit including Accidental Death & Disability Benefit.

The Valuation liability for Individual and Group policies in our books as at 31^st March, 2024, has been calculated actuarially for each policy by using Prospective Gross Premium Method of valuation. It is ensured that the reserve for each policy is at least equal to the Guaranteed Surrender Value or Special Surrender Value, whichever is higher. It is also ensured that negative reserve is set to zero while arriving at the reserve under a policy.

The unit liability in respect of Linked business is taken as the total Net Asset Value of the units as on the date of valuation. The non-unit liability under the linked business is calculated using the discounted cash flow method. The liabilities are calculated based on the valuation assumptions for interest, mortality, morbidity, withdrawal, expenses, inflation and bonuses wherever applicable. The liability for Group Cash Accumulation schemes has been taken as the fund value of all such schemes as at 31^st March, 2024. The liability in respect of One Year Renewable Group Term Assurance schemes has been arrived at as unearned risk premium based on period up to next Annual Renewal Date.

The valuation rates of interest used vary according to the type of plan and ranges from 5.20% to 7.38% p.a. depending on the nature and term of the underlying assets and liabilities. Bonus rate assumptions have been aligned to be consistent with the valuation rates of interest.

The mortality rates used are based on the published Indian Assured Lives Mortality (2012-14) Ultimate Table and Indian Individual Annuitant Mortality (2012-15) Ultimate Table adjusted to reflect expected experience and allowance for margin for adverse deviation. Morbidity rates are based on the Critical Illness Base Table (CIBT 93, UK) /Reinsurer’s incidence rates, suitably modified for our use with margins included for prudence.

The expense assumption for valuation was arrived at either as a percentage of premiums or as per policy or a combination of these. The renewal per policy expenses used for valuing individual business varies according to the type of Plan and status of the policy and with an appropriate assumption for expense inflation. Renewal Premium related expenses in respect of individual business include GST on premium, wherever applicable, depending on the type of Plan. While valuing Participating policies, the allowance for applicable taxation and allocation of surplus to shareholders has been made by appropriately rating up future Reversionary Bonuses reserved for the balance duration of the contract.

Additionally, reserves have been provided for liability in respect of Premium Waiver Benefit, Double Accident Benefit including Permanent Disability Benefit, revival of paid up policies, reinstatement of policies which have not acquired paid up value, immediate increase in expenses in case the office is closed for new business, AIDS/HIV, Incurred But Not Reported deaths (IBNR), catastrophe etc.. The assumptions used for arriving at the reserves for above mentioned items were determined based on a prudent assessment of the future experiences for the outstanding durations of the policies as at the date of valuation allowing for margin for adverse deviation.

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 Plans where there are options which can be exercised by the policyholders, the most onerous option has been taken for valuing these options. Fund for Future Appropriations (FFA) for both Non Linked and Linked lines of business has been provided in respective lines of Business.

The Board of the Corporation had approved in Financial Year 2021-22, bifurcation of the Single fund into separate Par and Non-Par funds as mandated under Section 24 of LIC Act, 1956, and the Surplus Distribution Policy required under the amended Section 28 of LIC Act, 1956.

The Surplus Distribution Policy mandates the surplus distribution pattern for Par policies as 95:5 for the financial year 2021-22, 92.5:7.5 for the financial years 2022-23 and 2023-24, and 90:10 from financial year 2024-25 onwards and 0:100 for Non-Par policies from financial year 2021-22 onwards.

4. Basis of allocation of investments and income thereon between Policyholders’ Account and Shareholders’ Account:

Income accruing on investments held in Policyholders’ and Shareholders’ funds have been taken to the respective funds.

The investible surplus, arising out of operations and income on Policyholders’ investments, was invested in Policyholders’ account. The accretions to shareholders’ fund during the year is invested in shareholders’ fund.

10) Expenses of Management:

The Expenses of Management are in accordance with the Regulation of IRDAI (Expenses of Management of Insurer transacting life insurance business) Regulation 2023.

11) Disclosure on presentation of segmental Reporting:

Based on the primary segments identified under IRDA (preparation of Financial statements and auditors’ report of insurance Companies) regulations 2002 (‘the regulations’) read with Accounting Standard 17 on “segmental reporting” notified under section 133 of the Companies act 2013 and rules there under, the Corporation has classified and disclosed segmental information separately for shareholders and policyholders. Accordingly the Corporation has prepared the Revenue Account and the Balance Sheet for the primary business segments namely Participating Life Individual, Participating Pension Individual, Participating Annuity Individual, Non Participating Life (Individual & Group), Non Participating Pension (Individual & Group), Non Participating Annuity Individual, Non Participating Variable individual, Non Participating Health individual, Non Participating Unit Linked and Capital Redemption and Annuity Certain Business (CRAC). The Corporation operates in various geographical segments. (Annexure - I on segmental reporting).

12) Foreign Exchange Reserve:

Operations carried out in Fiji, Mauritius and United Kingdom are of non integral nature. The Revenue Account items are translated at the average exchange rate and Balance Sheet items at closing rate. Revaluation Exchange difference which was charged to Revenue Account till the year i.e. 2010-11 is now accumulated in Foreign Exchange Reserve under Schedule 6A: Insurance Reserves (Policyholders) and Schedule 6: Reserve and surplus (shareholders).

20) The liability on account of additional contribution of ' 11,124.66 crore arising due to fresh pension option to employees in the financial year 2019-20 is being provided over a period of five years commencing from the financial year 2019-20 in accordance with the requisite approval dated July 6, 2020. Accordingly, the remaining amount of ' 2,224.94 crore has been charged to Revenue Account for the year ended March 31,2024.

21) Out of the total additional contribution of ' 11,959.52 crore towards increase in family pension due to amendment in LIC (Employees) Pension Rules 1995, the Corporation had already provided an amountof ' 2,679.15 crore during the quarter ended September 30, 2023. Pursuant to the approval received by the Corporation during the quarter ended December 31, 2023, the remaining liability of ' 9,280.37 crore is being amortised over 20 quarters commencing from Q3 of the FY 2023-24 amounting to ' 464.02 crore per quarter. Accordingly, an amount of ' 464.02 crore has been charged to Revenue Account for the quarter ended March 31,2024. The balance amount of ' 8,352.33 crore shall be amortised over the subsequent quarters upto Q2 of the FY 2028-29.

22) Additional pension liability due to wage revision to employees of the Corporation amounts to ' 6,306.29 crore. Out of this, ' 829.19 crore has been recognized in the FY 2023-2024 in the respective segments and balance amount of ' 5,477.10 crore pertaining to Par segment shall be charged to the Shareholders account over a period of not exceeding three years commencing from the FY 2024-2025. The Corporation has obtained the requisite approval.

23) An amount of ' 7,230.09 crore in Par segment pertaining to excess Expenses of Management for the FY 2022-23 shall be replenished from Shareholders’ account in equal annual instalments not exceeding three, commencing from Q1 of the FY 2024-2025. The Corporation has obtained the requisite approval.

24) During Q4 of the FY 2023-24, based on management assessment, excess provision of income tax amounting to ' 7,692.59 crore pertaining to earlier years has been reversed and included under the head - “Other Income”.

25) Other income includes interest amounting to ' 6,257.98 crore (Previous Year ' 6,626.98 crore) received during the current financial year towards refund of income tax for the earlier financial years.

33) Wage Revision:

Wage revision of the employees of the Corporation is done every five years and the last wage revision has become due on August 01,2022. The provision for the same has been made on the estimated basis as at March 31,2024.

34) Basis of revaluation of investment property:

Revaluation of investment (rented out) properties is being carried out once in three years as per IRDAI guidelines. The revaluation of properties has been carried out in the financial year 2022-23. The basis adopted for revaluation of property is as under:

• The valuation of investment property has been carried out by Rent Capitalization Method considering the market rent.

• Revaluation of investment properties having land alone without any building/structure has been revalued as per current market value.

• The Revaluation Reserve as at March 31,2024 amounts to ' 14,839.06 Crore and as at March 31,2023 amounts to ' 14,835.23 Crore.

35) The Corporation declared and paid an interim dividend of ' 4/- per equity share of ' 10/- each during the Financial Year 2023-24. The Board of Directors has recommended a final dividend of ' 6 /- per equity share of ' 10 /- each for the Financial Year 2023-24, subject to approval of shareholders in the ensuing Annual General Meeting of the Corporation.

36) Transfer of unclaimed dividend and corresponding shares to Investor Education and Protection Fund:

Transfer of Unclaimed dividend and corresponding shares to Investor Education and Protection Fund: Section 28C (5) of the Life Insurance Corporation Act, 1956 provides that the amount remaining unclaimed and unpaid for a period of seven years from the date it became due for payment in the Unpaid Dividend Account shall be transferred to the Investor Education and Protection Fund established under sub-section (1) of section 125 of the Companies Act, 2013.

In terms of Section 28 C (6) of Life Insurance Corporation Act, 1956, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Corporation to the Investor Education and Protection Fund.

38) Disclosure requirements as per Corporate Governance Guidelines

i) A description of the risk management architecture:

LIC has robust Enterprise Risk Management (ERM) framework to conduct business in an orderly fashion 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 of the Board (RMCB). The RMCB 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 RMCB, require further strategic intervention from the Board are brought to its knowledge in its meeting on a periodic basis.

An Internal Independent Committee, named as Committee of Executives on Risk Management (CERM) and Asset Liability Management Committee (ALCO) has 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 the Enterprise Risk Management. Recommendations of the Committee of Executives on Risk Management & Asset Liability Management are reported to RMCB by the CRO. CERM & ALCO supports the RMCB by supervising major functions like establishing 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 the CERM & ALCO and action taken thereon are reported to RMCB on quarterly basis.

1. CERTIFICATE OF REGISTRATION

The Corporation has obtained the Certificate of Renewal of Registration from the Insurance Regulatory and Development Authority of India and the same continues to be valid. The Corporation has complied with the terms and conditions of the registration stipulated by the Authority.

2. STATUTORY DUES

The Corporation confirms that all the dues payable to the statutory authorities have been duly paid within due dates, except those which are being contested or disclosed under contingent liabilities in the notes to accounts forming part of the financial statements.

3. SHAREHOLDING PATTERN

The Corporation confirms that the shareholding pattern is with in accordance with the requirements of the Insurance Act, 1938 as amended by the Insurance Laws (Amendment), 2015 and the Life Insurance Corporation Act, 1956.

The detailed shareholding pattern is disclosed in Schedule 5A, forming part of financial statements. Further, the shareholding pattern is in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and is available on the website of the Corporation.

4. investment OUTSIDE INDIA

The Corporation has not, directly or indirectly, invested outside India from the funds of the holders of policies, issued in India during the year.

5. solvency margin

The Corporation has adequate assets to maintain its solvency margins as required by the Insurance Act, 1938 during the period as stipulated under Section 64VA of the said Act and the IRDAI (Assets, Liabilities and Solvency Margin of Life Insurance Business) Regulations, 2016.

6. valuation of assets

The values of all the assets have been reviewed on the date of Balance-Sheet for any possible impairment provision/provision for non performing asset and that in the opinion of the Management, the assets set forth in the Balance-Sheet are shown in the aggregate at amounts not exceeding their realizable or market value under the headings “Loans”, “Investments”, “Agents balances”, “Outstanding Premiums”, “Interest, Dividends and Rents outstanding”, “Interest, Dividends and Rents accruing but not due”, “Amounts due from other persons or Bodies carrying on insurance business”, “Bills Receivable”, “Sundry Debtors”, “Cash” and the several items specified under “Other Accounts”.

7. APPLICATION AND INvESTMENTS OF LIFE INSURANCE FUNDS

No part of the life insurance fund has been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of 1938) as amended by the Insurance Laws (Amendment) Act 2015, relating to the application and investment of the Life Insurance Funds.

8. overall risk exposure and mitigation strategies

Life Insurance Corporation has robust Enterprise Risk Management framework to conduct its business in an orderly fashion, taking into account the risks faced by the Corporation and ensuring adequate risk management procedures.

Risk management is defined as the process under which Corporation addresses risks associated with the Corporation’s operations by identifying, measuring and mitigating such risks. Risk Management encompasses understanding of all the factors and the extent to which they can be threats to success. The process also endeavors to bring about the Risk culture in the organization so that the employees feel the importance of putting Risk management system in place and each employee involves himself in appropriately addressing the concerned risks.

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, Risk Appetite statement, ALM Policy and Business Continuity Plan of the Corporation on an annual basis.

In line with the IRDAI Corporate Governance Regulations, 2016, Risk Management Committee of the Board (RMCB) is formed.

An internal committee, named as Committee of Executives on Risk Management (CERM) and Asset Liability Committee (ALCO) has been constituted consisting of Heads of key functional departments, to monitor the implementation of Enterprise Risk Management policy and Asset Liability Policy respectively.

Three Lines of Defence Model for Risk Management of the Corporation:

First Line of Defence - Head of Departments (HODs at Central Office) i.e. the Risk Owners. The Departments would assume ownership of respective risks.

Second Line of Defence - ERM Department

The department monitors implementation of effective risk management practices and supports the risk owners in Assessment and Reporting risk related information to RMC & top management.

Third Line of Defence - Internal Audit, Statutory Audit, System Audit, Concurrent Audit and Inspection function which are giving assurance to top Management and Board for effective conduct of procedures, systems and processes.

Key Risk Management Tools:

Risk Appetite Statements:

Risk appetite is the amount and type of risk that the Corporation is willing to take in order to meet its strategic objectives. A range of appetites exist for different risks and which may change over time. The Risk appetite statements are reviewed on an annual basis by the Risk Management Committee of the Board (RMCB) and approved by the Board. The risks are monitored vis-a-vis the limits set by the Corporation and reporting is done to the Top Management and to the Risk Management Committee of the Board.

Risk Registers:

Corporation maintains Risk Register at each functional level wherein risks relating to that function along with the control measures are documented. These risks identified in the registers are assessed on half-yearly basis. The Risk register is updated every quarter for inclusion of emerging risks to ensure that all the emerging risks are being identified and taken care of.

Incident Management & Operational Loss database:

The Incident Management aims to implement procedures for identification, monitoring, mitigation and reporting of incidents (including frauds) within the Corporation. Incident Management process is defined to ensure any operational losses including frauds, regulatory / policy breaches and potential losses are systematically identified, reported, escalated, analysed and resolved to prevent recurrence in future.

Top Risks and Key Risk Indicators:

The top risks for the Corporation are identified by analysing the materiality / impact of key risks faced by the Corporation. The assessment of Key Risk Indicators is done every quarter to ascertain RAG status The Top Risks and associated Key Risk Indicators are updated on annual basis with separate benchmarks and threshold limits.

Dash Board:

Dash Board is available in the ERM Module which is accessible to Top management for viewing the Risk Reports. The Risk Registers are placed before CERM & RMC by Chief Risk Officer of ERM department.

The mitigation strategies for various risks under Enterprise Risk Management framework:

LIC is a premier institutional investor in the Indian Financial Markets. Its funds are invested in asset classes in line with the IRDAI (Investment) Regulation and are exposed to various risks like market risk, credit risk, interest rate risk, liquidity risk and counterparty risk. The investment risks are systematically identified and systems & procedures have been implemented to address these risks so that not only the policyholders’ funds are protected but also their reasonable expectations are met.

Market Risk:

Market risk refers to the uncertainty of future earnings resulting from changes in interest rates, exchange rates and the market prices of securities. Corporation attempts to minimise the effects of market risk by primarily investing in securities that are part of major indices.

Market risk is further mitigated by matching assets and liabilities by type and duration and matching cash flows to the extent commercially practicable. The applicable investment strategy for each type of business is set out clearly to ensure that liabilities are appropriately matched by the nature and duration of assets.

Liquidity Risk:

Liquidity risk is the risk of not being able to make payments as and when they fall due, because of insufficient liquid assets in cash or cash equivalent, thereby requiring redemption of long term assets. Corporation faces limited liquidity risk due to the nature of its liabilities. Corporation manages liquidity risk by monitoring the asset-liability cash flow matching positions on Quarterly and yearly basis. The cash flow matching is also analysed under various stress scenarios. LIC has Board approved Asset Liability Management policy.

Credit risk:

Credit risk is the risk resulting from the failure by either party to perform timely their contractual obligations or the deterioration in the credit profile.

Corporation faces limited credit risk as major portion of the investments are made in Govt. securities. Credit risk related to investment in other debt securities is mitigated by,

(i) restricting investments primarily to securities rated AA or AAA and above by domestic rating agencies and

(ii) monitoring the quarterly performances of our portfolio companies, their ratings and their track record of servicing of their obligations on the due dates.

Insurance risk can occur as a result of adverse experience in claims, morbidity, mortality, withdrawals, expenses, taxation treatment and other assumptions that are estimated within pricing and valuation calculations of the product. This includes underwriting risk. The premium and reserve risks are significant components of the underwriting risk. The Corporation reinsures its higher Sum Assured business and has treaties with reinsurers for specific products.

Operational Risk:

Corporation is exposed to various types of operational risk, which arise from various sources including inadequate record keeping, failures of systems & established controls, employee error, and internal/external frauds. Corporation manages to minimize the impact of the operational risks by regular monitoring of processes, systems & procedures, implementation of controls for frauds. Cyber security risks are monitored by Cyber Security Desk. Reputational risks are identified by the Corporation and its impact is monitored systematically.

Compliance Risks:

To mitigate these risks, the Corporation has robust internal controls, conducts regular audits, provides ethics training, promotes whistle blowing, and creates a culture of transparency and accountability. Additionally, the Corporation emphasizes on updating itself on relevant laws and regulations, conduction of due diligence wherever necessary and implementing technology solutions for managing these risks effectively.

Business Continuity Measures (BCM):

The Corporation has Board approved plan for business continuity. Business interruption risk forms an integral part of operational risk. The Corporation may face a host of disasters that range from minor to catastrophic which can impact day-to-day operations.

Business Continuity Plan provides overall guidelines to implement and manage the Business Continuity framework which provides instructions / guidelines to respond to disaster situation and also includes measures for - safety of human life and minimum down time. The continuity plan has been formalized to provide measures to be taken to respond to events as natural disasters, pandemic and technical disruptions etc.

Disaster recovery site has been set up to carry out critical processes in adverse scenario. Business continuity drills are carried on a regular basis for critical processes and also to manage business interruption risks.

As a part of Business Continuity Plan, Corporation has formed Crisis Management Teams at Central Office and all the eight Zonal Offices of the Corporation, mainly to respond to any disastrous situation. Emergency Response Teams are also formed in all offices of the Corporation to oversee the implementation of guidelines issued by Crisis Management Team during disaster

9. OPERATIONS IN OTHER COUNTRIES

The Corporation has overseas branch offices in three countries viz. United Kingdom., Fiji and Mauritius. The Corporation does not have any country risk as the policies in these countries are offered in the respective country currency only and income received in the country is also invested in the same country except a meager investment by United Kingdom branch office in equities of non United Kingdom Entities.

13. THE MANAGEMENT HEREBY GIVES A RESPONSIBILITY STATEMENT INDICATING THAT:-

a. In the preparation of financial statements, the applicable accounting standards, principles and policies have been followed along with proper explanations relating to material departures, if any;

b. The management has adopted accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the Corporation at the end of the Financial Year and of Surplus/ profit of the Corporation for the year;

c. The management has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the applicable provisions of the Insurance Act, 1938 (4 of 1938)/LIC Act,1956, as amended by the Insurance Laws (Amendment) Act 2015, for safeguarding the assets of the Corporation and for preventing and detecting fraud and other irregularities;

d. The Management has prepared the financial statements on a going concern basis;

e. The Management has ensured that an Internal Audit System commensurate with the size of the organization and nature of business exists and is operating effectively.

14. A SCHEDULE OF PAYMENTS, WHICH HAvE BEEN MADE TO INDIvIDUALS, FIRMS, COMPANIES AND ORGANIzATIONS,

IN WHICH DIRECTORS OF THE INSURER ARE INTERESTED, IS AS UNDER:-

The details of payments made during the year to individuals, firms, companies and organizations in which directors of the

Corporation are interested are given in note no. 27 (Related Party Disclosure) of Notes to Accounts.

CHAIRPERSON MANAGING DIRECTOR

APPOINTED ACTUARY CHIEF FINANCIAL OFFICER

& executive DIRECTOR (ACTL)

executive DIRECTOR (INv FO) & CIO Place: Mumbai Date: 27.05.2024