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THE GAZETTE OF INDIA EXTRAORDINARY

|PAK i III—SK\ 4|

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

NOTIFICATION

New Delhi, (he .30|h M.ircli. 2002

The Insurance Regularity and Development Authority (Preparation of Financial Statements and Auditor's Report of

Insurance Companies) Regulations, 2002

F.No. IRDA/Rc<;./03/2002.—-In exercise of the powers conferred b\ sections II4A of (he Insurance Acl. 1 ^3K

(4 of 1938). and in suppression oflhc The Insurance Rcmilaroh and Development Authority (Preparation of Financial

Slnlcmcnls and Auditor's Report of Insurance Companies) Regulations. 2000. Authority in consultation u ilh llic Insurance

Advison Committee, hereby makes Hie following regulations ncmel\ , -

1. Short title and commencement.—(1) These regulations may be called the Insurance Regulatory and Development

Authority (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002.

(2) They shall come into force from the date of (heir publication in the Official liawlte.

(3) On and from the commencement of these regulations, The Insurance Retaliatory And Development Authority

(Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2000 shall stand

superceded, except as respects things done or omitted lo he done Iheieunder.

2. Definitions.—( I) In these regulations, unless the context otherwise requires —

(a) 'Vie/'" means the Insurance Act, 1938 (4 of 1938);

(b) "Authority" means thelnsuiancc Regulatory and Development Authority established under sub-section (1) oi"

section 3 of the Insurance Regulatory and Development Authority Acl, 1999 (41 of 1999);

Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), or Companies Act, 1950 (1 of 1950),

shall have the meanings respectively assigned to them in those Acts.

3. Preparation oi financial statements management report and auditor's report.—(I) An insurer carrying on hie

insurance business, after the cummencemem of these Regulations, shall comply with the requirements of Schedule A.

(2) An insurer cairying on general insuianee business, after the commencement of these Regulations, shall comply with

the requirements of Schedule B:

Provided thai (his sub-regulation shall apply, mutatis mutandis, to reinsurers, until separate renulations are made.

(3) The report of the auditors on the financial .statements of every insurer and reinsurer shall be in conformity with the

requirements of Schedule C, or as near thereto as the circumstances permit.

(4) The Authority may, from time to time, issue separate directions/ guidelines in the matter of appointment, continuance

or removal of auditors of an insurer or reinsurer, as the case may be, and such directions/ guidelines may include

prescriptions regarding qualifications and experience of auditors, their rotation, period of appointment, etc as may be

deemed necessary by the Authority.

SCHEDULE A

(Sec Regulation 3)

PARTI

Accounting principles for preparation of financial statements

1 Applicability of Accounting Standards—Every Balance Sheet, Revenue Account [Policyholders' Account],

Receipts and Payments Account [Cash Flow statement] and Profit and Loss Account [Shareholders' Account] ot un

insurer shall be in conformity with the Accounting Standards (AS) issued by the ICAI, to the extent applicable to .usurers

carrying on life insurance business, except that:

(i)

Accounting Standard 3 (AS 3) - Cash Flow Statements - Cash Flow Statement, shall be prepared only under

the Direct Method-

(n)

Accounting Standard 17 (AS 17) - Segment Reporting - shall apply to all insurers irrespective of the

requirements regarding listing and turnover mentioned therein.

2. Premium—Premium shall be recognised as uicoiue when due. For linked business the due date for payment may be taken

as the date when the associated units arc created.

3. Acquisition CostS-Aajmsnion costs, if any. shall be expensed in the period ui which they are mcurrcd.

Acquisition costs are those costs that vary with and are primarily related to the acquisition of new and renewal insurance

contacts. The most essential test is the'oblatory relational^ between costs and the execution ot insurance contracts (i.e.,

commencement of risk)

4. Claims Cost -The ultimate cost of claims shall compose the policy benefit amount and specific claims settlement costs,

wherever applicable.

5 Actuarial Valuation -- Liability for Life Policies - The estimation of liability against hfe policies shall be

determined by the appointed actuary of the insurer pursuant to Ins annual investigation of the lite insurance business. Actuarial

assumptions are to be disclosed by way of notes to the account

The liability shall be so calculated that together with future premium payments and investment income, die insurer can meet all

future claims (including bonus entitlements to policy holders) and expenses,

6. Procedure to determine value of investments.—An insurer shall'determine the values of investments in the

following manner:-

a) Real Estate

I nvestment Property- The value of investment property shall be determined at historical cost, subject to

revaluation at least once in every three years. 'Hie change in the carrying amount of the investment property shall be taken to

Revaluation Reserve

The insurer shall assess at each balance sheet date whether any impairment of the investment property lias occurred.

Gams/ losses arising due to changes ,n the carrying amount of real estate shall be taken to equity under 'Revaluation Reserve.

The 'Profit on sale of investments' or 'Loss on sale of investments', as the case may be. shall include accumulated changes m the

carrying amount previously recognised in equity under the heading 'Revaluation Reserve' in respect of a particular property and

being recycled to the relevant Revenue Account or Profit and Loss Account on sale of that property.

The bases for revaluation shall be disclosed in the notes to accounts. The Authority may issue directions specifying the amount

to be released from the revaluation reserve for declaring bonus to the policyholders. For the removal of doubt it is clarified that

except for the amount that is released to pohcyholders as per the Authority's direction, no <vl..-r uinount shall be distributed to

shareholders out of Revaluation Reserve Account.

An impairment loss shall be recognised as an expense in the Revenue/Profit and Loss Account immediately, unless the asset is

carried at re-valued amount. Any impairment loss of a re-valued asset shall be treated as a revaluation decrease ol that asset and .1

the impairment loss exceeds the corresponding revaluation reserve, such excess shall be recognised as an expense m the

Revenue/Profit and Loss Account-

THE GAZETTE OF INDIA F:\TRAORDINARY

|P.'KI 111—SK 4|

Debt Securities--!)fht securities, including government securities and redeemable preference shares, shall be considered

as "held to maturity" securities and shall be measured at historical cost subject to amortisation.

Equity Securities and Derivative Instalments that are traded in active markets—Listed equity securities and

derivative instruments that are traded in active markets shall be measured at fair value on the balance sheet date. For the purpose

of calculation of fair value, the lowest of the last quoted closing price ai the stock exchanges where the securities are listed shall

be taken.

The insurer shall assess on each balance sheet date whether any impairment of listed equity secunty(ies)/derivative(s)

instruments has occurred.

An active market shall mean a market, where the securities traded are homogenous, availability of willing buyers and willing

sellers is normal and the prices are publicly available"

Unrealised gams/ losses arising due to changes in the fair value of listed equity shares and derivative instruments shall be taken to

equity under the head 'Fair Value Change Account". The 'Profit on sale of investments' or 'Loss on sale of investments', as the

case may be, shall include accumulated changes in the fair value previously recognised in equity under the heading "Fair Value

Change Account' in respect of a particular security and being recycled to the relevant Revenue Account or Profit and Loss

Account on actual sale of that listed security.

The Authority may issue directions specifying the amount to be released from the Fair Value Change Account for declaring

bonus to the policyholders. For the removal of doubt it is clarified that except for the amount that is released to policyholdcrs as

per the Authority's prescription, no other amount shall be distributed to shareholders out of Fair Value Change Account. Also,

any debit balance m Fail Value Change Account shall be reduced from profit/free reserves while declaring dividends

Hie insurer shall assess, on each balance sheet date, whether any impairment has occurred. An impairment loss shall be

recognised as an expense in Revenue/Profit and Loss Account to the extent of the difference between the re-measured fail' value

of the security/investment and its acquisition cost as reduced by any previous impairment loss recognised as expense in

Revenue/Profit and Loss Account. Any reversal of impairment loss, earlier recognised in Revenue/Profit and Loss Account shall

be recognised in Revenue/Profit and Loss Account.

d) Unlisted and other than actively traded Equity Securities and Derivative Instruments —Unlisted equity

securities and derivative instruments and listed equity securities and derivative instruments that arc not regularly traded m active

markets shall be measured at historical cost. Provision shall be made for diminution in value of such investments. The provision

so made shall be reversed in subsequent periods if estimates based on external evidence show an increase in the value of the

investment over its carrying amount. The increased carrying amount of the investment due to the reversal of the provision shall

not exceed the historical cost

For the purposes ot this regulation, a security shall be considered as being not actively traded, if as per guidelines governing

mutual funds laid down from time to time by SEBI, such a security is classified as "thinly traded".

7. Loans

Loans shall be measured at historical cost subject to impairment provisions.

The insurer shall assess the quality of its loan assets and shall provide for impairment. Ilie impairment provision shall not be

lower than the amounts derived on the basis of guidelines prescribed from time to time by the Reserve Bank of India, that apply to

companies and financial institutions.

8. Linked Business—The accounting principles used for valuation of investments are to be consistent with principles

enumerated above. A sepaiate set of financial statements, for each segregated fund of the linked businesses, shall be annexed.

Segrcpaf' mnds represent funds maintained in accounts to meet specific investment objectives of policyholders who bear the

investment ri'3:. It. .estment income/ gains and losses generally accrue directly to the policyholders. The assets of each account

are segregated and are not subiect to claims that arise out of any other business of the insurer.

9. Funds for Future Appropriation—The funds for future appropriation shall be presented separately.

The tiinds for future appropriation represent all funds, the allocation of which, either to the policyholders or to the shareholders,

has not been determined by the end of the financial year.

PART II

Disclosures forming part of Financial Statements

A. The following shall be disclosed by way of notes to the Balance Sheet:

Contingent Liabilities:

(a)

1'artly-paid up investments

(h)

Underwriting commitments outstanding

(c)

Claims, other than those under policies, not acknowledged as debts

(d)

Guarantees given by or on behalf of the company

(c)

Statutory dcm;inds/liabiiiiics in dispute, not provided for

(f)

Rcmsuiance Obligations to the extent no provided for in accounts

(y)

Others (to be specified I

Actuarial assumptions for valuation of liabilities for life policies m force.

Encumbrances tq_assets of the company in and outside India.

Commitments made and outstanding for Loans, Investments and Fixed Assets.

Basis of amortisation of debt securities

Claims settled and remaining unpaid for a period olmoie than six months as on the balance sheet date.

Value of contracts in relation to investments, for:

(a)

Purchases where deliveries are pending;

(b)

Sales where payments are overdue.

Opeiating expenses relating to insurance business: basis of allocation of expenditure to various segments of

business.

().

Computation of managerial remuneration.

10.

Historical costs of those investments valued on fan value basis.

11.

Basis of it-valuation of investment property.

The following accounting policies shall form an integral part ot the financial statements:

All significant accounting policies m terms of the accounting standards issued by the ICA1, and significant principles and

policies given in Part I of Accounting Principles. Any other accounting policies, followed by the insurer, shall be stated in

the manner required under Accounting Standard AS 1 issued by the ICAI.

Any departure Irom the accounting policies shall be separately disclosed with reasons for such departure.

( . The following information shall also be disclosed:

Investments made in accordance with any statutory requirement should be disclosed separately together with its

amount, nature, security and any special rights in and outside India;

Segregation inlo performing/ noil performing investments for purpose of income recognition as per the directions,

if any, issued by the Authority;

Assets to the extent requned to be deposited under local laws or otherwise encumbered in or outside India;

Peieenlau'C of business sector-wise;

A summary of financial statements for the last five years, in the manner as may be prescribed by the Authority;

Bases ol allocation of investments and income thereon between Pohcyholders¹ Account and Shareholders"

Account.

Accounting Ratios as may be pi escribed by the Authority.

•46

THE GAZETTE OF INDIA : EXTRAORDINARY

|PwiIIl—Si

PART III

General instructions for preparation of Financial Statements

The coiresponding amounts for the immediately preceding financial year for all items shown in the Balance Sheet,

Revenue Account, Profit and Loss Account and Receipts and Payments Account shall be given.

The figures in the financial statements may btr rounded off to the nearest thousands.

Interest, dividends and rentals receivable in connection with an investment should be stated at gross amount, the

amount of income tax deducted at source should be included under 'advance taxes paid' and taxes deducted at source.

(I) For the purposes of financial statements, unless the context otherwise requires -

(ii)

ilit.- expression •provision' shall, subject to (II) below mean any amount written off or retained by way

ol "providing lor depreciation, renewals or diminution in value of assets, or retained by way of providing

for any known liability or loss of which the amount cannot be determined with substantial accuracy;

(b)

the expression 'reserve' shall not, subject to as aforesaid, include any amount written off or retained by

way of providing for depreciation, renewals or diminution in value of assets or retained by way of

providing for any known liability or loss;

(c)

the expression 'capital reserve' shall not include any amount legarded as free for distribution through

the profit and loss account; and the expression 'revenue reserve' shall mean any reserve other than a

capital reserve;

(d)

The expression "liability" shall include all liabilities in respect of expenditure contracted for and all

disputed or contingent liabilities.

(11) Where:

(a)

any amount written off or retained by way of providing for depreciation, renewals or diminution m

value of assets, or

(b)

any amount retained by way of providing for any knownjiability or loss,

is in excess of the amount which in the opinion of the directors is reasonably necessary for the purpose,

I lie excess shall be treated as a reserve and not provision.

The company shall make provisions for damages under lawsuits where the management is of the opinion that the

award may go against the insurer.

Extent of risk retained and re-insured shall be separately disclosed.

Any debit balance of the Profit and Loss Account shall be shown as deduction from uncommitted reserves and the

balance, if any, shall be shown separately.

PART IV

Contents of Management Report

There shall be attached to the financial statements, a management report containing, inter alia, the following duly

authenticated by the management:

Confirmation regarding the continued validity of the registration granted by the Authority;

Certification that all the dues payable to the statutory authorities have been duly paid;

Confirmation lo the effect that the shareholding pattern and any transfer of shares during the year are in

uccoidance with the statutory or regulatory requirements;

Declaration that the management has not directly or indirectly invested outside India the funds of the holders of

policies issued in India;

Confirmation that the required solvency margins have been maintained;

ft.

Certification to the effect that the values of all the assets have been reviewed on the date of the Balance Sheet and

that in his (insurer's) belief the assets set forth in the Balance-sheets are shown in the aggregate at amounts not

exceeding iheir realisable or market value under the several 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", "

Sundry Debtors", " Bills Receivable". " Cash" and the several items specified under "Other Accounts";

Ceilifiailion to the effect that 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) relating to the application and investment

of the life insurance funds;

Disclosure with regard lo (he overall risk exposure and strategy adopted to mitigate the sume;

').

Operations in other countries, if any, with a separate statement giving the management's estimate of country risk

and exposuic risk and the hedging strategy adopted;

10.

Ageing of chums indicating the trends in average claim settlement time during the preceding five years;

11.

Certification to ihe effect as to how the values, as shown in the balance sheet, of the investments and stocks and

shares have been arrived at, and how the market value thereof has been ascertained for the purpose of

comparison with the values so shown;

12.

RevK-v\ of asset quality and performance of investment in terms of portfolios, i.e., separately in terms of real

estate, loans, investments, etc.

13.

A lesponsibihty statement indicating theiem that.

(a) m the pieparation of Imancial 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 judgements and

estimates that are reasonable and prudent so as lo give a true and fair view of the stale of affairs of the company

at the end of ihe financial year and of the operating profit or loss and of (he profit or loss of the company for the

year;

accordance with ihe applicable provisions of ihe Insurance Acl 19-38 (4 of 1938) / Companies Act, I⁽)M> (1 of

1956), for safeguarding ihe assets of the company and for preventing and delecting 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 and-nature of the business

exists and is operating effectively.

14. A schedule of payments, which have been made to individuals, firms, companies and organisations in which Directors

of the insurer aie interested.

THE GAZETTE OF INDIA EXTRAORDINARY

\P\\u 111—Siv 4|

PART V

Preparation of Financial Statements

(1) An insurer shall prepare the Revenue Account [Pohcyholders' Account], Profit and Loss Account [Shareholders'

Account| and the Balance Siieet in Form A-RA, Form A-PL and l-"onn A-I3S, as prescribed in this Part, or as near

thereto as the citvumslances permit.

Provided that an insurer shall prepare Revenue Account and Balance Sheet for the under mentioned businesses separately

and to that extent the application of AS 17 shall stand modified:-

Participating policies and Non-participating policies;

1 ) Linked business [As defined in regulation 2 (i) of the IRDA (Registration of Indian Insurance Companies )

Regulations . 20001

ii) Non-Linked business separately for Oidmaiy Life, (ieneral Annuity, pensions and Health Insurance;

Business within India and business outside India.

(2) An insurer shall prepare separate Receipts and Payments Account in accordance with the Direct Method prescribed m

AS 3 - "Cash Flow Statement" issued by the 1CA1.

FORM A-RA

Name of the Insurer:

Registration No. mid Date oi Registration with the 1RDA

REVENUE ACCOUNT FOR THE YEAR ENDED 31^s' MARCH, 20

Policyhoklers' Account (Technical Account)

Particulars

Premiums earned - net

(a)

Premium

(b)

Reinsurance ceded

(e)

Reinsurance accepted-

Income Horn Investments

(a)

Interest, Dividends & Rent- Gross

-»

(b)

Profit on sale'iedeniption of investments

(c)

(Loss on sale/ redemption of investments I

(d)

1 ransler/Gain on revaluation/change in fair value*

Other Income (to be specified)

TOTAL (A)

Commission

Operating L\penses related to Insurance Business

Provision for doubtful debts

Bad debts written otf

Provision for Tax

Provisions (oilier than taxation)

(a) For diminution in the value of investments (Net)

(b) Others (to be specified)

TOTAL (B)

Benefits Paid (Net)

Interim Bonuses Paid

Change in valuation of liability in respect of life policies

(a)

Gross**

(b)

Amount ceded m Reinsurance

(c)

Amount accepted in Reinsurance

TOTAL (C)

SIRPLIS/ (I)KFK IT) (D) =(A)-(B)-(C)

APPROPRIATIONS

Transfer to Shareholders" Account

Transfer to Oilier Reserves (to be specified)

Balance being Funds for l-uiurc Appropriations

TOTAL (D)

Schedule

Current

Year

(Rs.'OOO)

Year

(Rs.'OOO).

Notes:

RrprcM'iils ihv deemed realised f-nin </s per norms specified hv the Authority.

represents Mathematical Reserves after allocation of bonus

The total surplus shall he disclosed separately with the following details:

(a)

Interim Bonuses Paid:

(b)

Allocation of Bonus to policyholdcrs:

(c)

Surplus shown In the Revenue Account:

(d)

Total Surplus: |(a)+(b)+(c)|.

See Notes appended at the end of Form A-PL

1097 GI/2002—7.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PAR r III—SEC. 4]

FORM A-PL

Name of the Insurer:

Registration No. and Date of Registration with the IRDA

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 ^{S T} MARCH, 20

Shareholders' Account (Non-technical Account)

Particulars

Amounts transferred from/to the Policyholders Account (Technical

Account)

Income From Investments

(a) Interest, Dividends & Rent - Gross

(h) Profit on sale/redemption of investments

Other Income (To be specified)

TOTAL (A)

Expense other than Ihose directly related to the insurance business

Dad debts written off

Provisions (Other than taxation)

(a)

For diminution in the value of investments (Net)

(b)

Provision for doubtful debts

(c)

Others (to he specified)

TOTAL (B)

Profit/ (Loss) before tax

Provision for Taxation

Profit/(Loss) after tax

APPROPRIATIONS

(a) Balance at the beginning of the year,

(b) Interim dividends paid during the year'

(d) Dividend distribution on tax

(e) Transfer to reserves/ other accounts (to be specified)

Profit carried

to the Balance Sheet

Schedule

Current Year

(Rs.'OOO).

^i-evteii*

Year

(Rs.'OOO).

•

Notes to form A-KA ana A-PL.

Premium income received from business concluded in and outside India shall be separately disclosed,

ReniMirance premiums whether on business ceded or accepted are to be brought into account gross (i.e. before deducting

commissions) under the head reinsurance premiums

Claims incurred shull comprise claims paid, specific claims settlement costs wherever applicable and change in the

ouistundinu; provision for claims at the year-end,.

Items of expenses and income in excess of one percent of the total premiums (less reinsurance) or Rs.5,00,000

whichever is higher, shall be shown as a separate line item.

Fees and expenses connected with claims shall be included in claims.

Under the sub-head "Others" shall be included items like foreign exchange gains or losses and other items.

Interest, dividends and rentals receivable in connection with an investment should be stated as gross amount, the

amount of income tax deducted at source being included under 'advance taxes paid and taxes deducted at

source".

Income from rent shall include only the realised rent. It shall not include any notional rent.

FORM A-RS

Name of the Insurer:

Registration No. and Date of Registration with the IRDA

BALANCE SHEET AS AT 31 ^{S T} MARCH, 20

SOURCES OF FUNDS

SHAREHOLDERS' FUNDS

SHARE CAPITAL

RESERVES AND SURPLUS

CRED1T/[DEBIT1 FAIR VALUE CHANGE ACCOUNT

Sub-Total

BORROWINGS

POLICY!IOLDERS' FUNDS

C.REDIT/[DEBIT] I'AIR VALUE CHANGE ACCOUNT

POLICY LIABILITIES

INSURANCE RESERVES

PROVISION FOR LINKED LIABILITIES

Sub-Total

FUNDS FOR FUTURE APPROPRIATIONS

TOTAL

APPLICATION OF FUNDS

INVESTMENTS

Shareholdeis'

Policyholders'

ASSETS HELD 1 O COVER LINKED LIABILITIES

LOANS

FIXED ASSIiTS

CURRENT ASSETS

Cash and Bank Balances

Advances and Othei Assets

Sub-Total (A)

CURREN 1 LIABILITIES

PROVISIONS

Sub-Total (B)

NET CL'RRENT ASSETS (C) = (A - B)

MISCELLANEOUS EXPENDITURE (to the extent not written off

or adjusted)

DEBIT BALANCE IN PROFIT & LOSS ACCOl INT

(Shuieholdcrs' Account)

TOTAL

Schedule

•)

Current Year

(Rs.'OOO).

Previous

Year

(Rs.'OOO).

THE GAZETTE OF INDIA. EXTRAORDrNARY

|Pwi III—Sw . 4|

(CONTINGENT LIABILITIES

Particulars

Partly paid-up investments

Claims, other than against policies, not acknowledged as debts

by the company

Underwriting commitments outstanding (in respect of shares

and securities)

Guarantees given by or on behalf of the Company

Statutory demands/ liabilities in dispute, not provided for

Reinsurance obligations to the extent not provided for in

accounts

Others (to be specified)

TOTAL

Current Year

(Rs.'OOO).

Previous Year

(Rs.'OOO).

SCHEDULES FORMING PART OF FINANCIAL STATEMENTS

SCHEDULE - 1

PREMIUM

Particulars

Fust year premiums

Renewal Premiums

Single Premiums

TOTAL PREMIUM

Current Year

(Rs.'OOO).

Previous Year

(Rs.'OOO). „

SCHEDULE- 2

COMMISSION EXPENSES

Particulars

Commission paid

Direct - First year premiums

- Renewal-premiums

- Mingle premiums

Add: Commission on Re-insurance Accepted

Less: Commission on Re-insurance Ceded

Net Commission

Current Year

(Rs.'OOO)

Previous Year

(Rs.'OOO) •

Nate

The profit/ commission, if any, arc to he combined with the Re-uisunnue accepted or Re-insurance ceded figures.

SCHEDULE - 3

OPERATING EXPENSES RELATED TO INSURANCE BUSINESS

rarticulars

Rmployecs" remuneration &. welfare benefits

Travel, conveyance and vehicle running expenses

Training expenses

Rents, rates & taxes

Repairs

Printing &, stationery

Communication expenses

Legal & professional charges

Medical fees

Auditors' fees, expenses etc

as auditor

b) as adviser or in any other capacity, in respect of

(i)

Taxation matters

(n)

Insurance matters

(in)

Management services; and

in any other capacity

Advertisement and publicity

Interest & Bank Charges

Others (to be specified)

Depreciation

TOTAL

C urrent Year

(Rs.'OOO).

Previous V ear

(Rs.'OOO).

Note : Items of expenses and income in excess of one percent of the total premiums (less reinsurance) or Rs.5,00,000

whichever is higher, shall be shown as a separate line item.

SCHEDULE - 4

BENEFITS PAID INETI

Particulars

1. Insurance Claims

(a) Claims by Death,

(b) Claims by Maturity,

(d) Other benefits, specify

2. (Amount ceded in reinsurance):

(a) Claims by Death,

(b) Claims by Maturity,

(d) Other benefits, specify

3. Amount accepted in reinsurance;

(a) Claims by Death,

(b) Claims by Maturity,

(d) Other benefits, specify

TOTAL

i urrent Year

(Rs.'OOO).

Previous Year

(Rs.'OOO).

Notes: (a) Claims include specific claims settlement costs, wherever applicable.

(b) Legal and other fees and expenses shall also form part of the claims cost, wherever applicable.

THE GAZETTE OF INDIA. EXTRAORDINARY

IP\i<, HI—S,.r ii

SCHEDULE - 5

SHARE CAPITAL

Particulars

Authorised Capital

Equity Shares of Rs

each

Issued Capital

Equity Shares of Rs

each

Subscribed Capital

Equity Shares of Rs

each

Called-up Capital •

Equity Shares of Rs

each

Less : Calls unpaid

Add : Shares forfeited (Amount originally paid up)

Less : Par value of Equity Shares bought back

Less : Preliminary Expenses

Expenses including commission or brokerage on

Underwriting or subscription of shares

TOTAL

Current Year

(Rs.'OOO).

Previews Year

(Rs.'OOQ).

Notes:

(a) Particulars of the different classes of capital should he separately stated,

(b) The amount capitalised on account of issue of bonus shares should be disclosed.

(c) In case any part of the capital is held by a holding company, the same should be separately disclosed.

SCHEDULE - 5 A

PATTERN OF SHAREHOLDING

(As certified by the Management]

Shareholder

Promoters

•

Indian

•

Foreign

Others

TOTAL

Current Year

Number of

Shares

%of

Holding

Previous Year

Number of

Share*

%of

,__ Holding

SCHEDULE-6

RESERVES AND SURPLUS

ft.

Particulars

Capital Reserve

Capital Redemption Reserve

Share Premium

Revaluation Reserve

General Reserves

Less; Debit balance in Profit and Loss Account, if any

Less: Amount utilized for Buy-back

Catastrophe Reserve

Other Reserves (to be specified)

Balance of profit in Profit and Loss Account

TOTAL

Current Year

(Rs.'OOO)

Previous Year

(RJJ.'OOO)

Note. Additions to ami deductions from the reserves shall be disclosed under each of the specified heads.

SCHEDULE - 7

BORROWINGS

Particulars

Debentures/ Bonds

Banks

Financial Institutions

Others (to he specified)

TOTAL

Current Year

(Rs.'OOO).

Previous Year

(Rs/000).

Notes

(a)

The extent to which the borrowings are secured shall he separately disclosed stating the nature of the

security¹ muter each sub-head.

(b)

•\mounts due within 12 months from the date of Balance Sheet should he shown separately

SCHEDULE- 8

[INVESTMENTS-SHAREHOLDERS

AZZJ

Particulars

LONG TERM INVESTMENTS

Government securities and Government guaranteed bonds including

Treasury Bills

Other Approved Securities

Other Investments

(a) Shares

(au)

Equity

(bb)

Preference

(b) Mutual Funds

(e) Derivative Instruments

(d) Debentures/ Bonds

(e) Other Securities (to be specified)

(f) Subsidiaries

Investment Properties-Real Estate

Investments in Infrastructure and Social Sector

Other than Approved Investments

SHORT TERM INVESTMENTS

Government securities and Government guaranteed bonds including

Treasury Bills

Other Approved Securities

Other Investments

(a)

(aa)

Equity

(bb)

Preference

(b)

Mutual Funds

(c)

Oemative Instruments

(d)

Debentures Bonds

(e)

Other Secuiities (to be specified)

(f)

Subsidiaries

Investment Properties-Real Estate

Investments in Infrastructure and Social Sector

Other than Approved Investments

TOTAL

Current Year

(Rs.'OOO)

Previous Year

(Rs.'OOO)

Note. Sec Notes appended at the end of Schedule- 8B

THE GAZETTE OF INDIA: EXTRAORDINARY

|P\i<rlIl—Siv 4|

SCHEDULE- 8A

INVESTMENTS-POLICYHOLDERS

j "

Particulars

LONG TERM INVESTMENTS

Government securities and Government guaranteed bonds including

Treasury Bills

Other Approved Securities

(a) Shares.

(aa)

Equity

(bb)

Preference

(b) Mutual Funds

(d) Debentures/ Bonds

(e) Other Securities (to be specified)

(0 Subsidiaries

(g) Investment Properties-Real listate

Investments in Infrastructure and Social Sector

Other than Approved Investments

SHORT TERM INVESTMENTS

Government securities and Government guaranteed bonds including

Treasury Bills

Other Approved Securities

(a)

(aa)

Equity

(bb)

Preference

(b)

Muiiial Funds

(c)

Denvame Instruments

(d)

Debentures; Bonds

(e)

< Mhei" Securities (to be specified)

(f)

Subsidiaries

(g)

Imesiment Properties-Real Estate

Investments in Int'iastructurc and Social Sector

Other than Appro\ed Investments

TOTAL

Current Year

(Rs.'OOO) '

Previous Year

(Rs.'OOO)

,\nfc .Vr ArVi'.s iippcnttal in tnc end of jciicdiiic- a a

SCHKDILF-8B

ASSETS HELD TO COVER LINKED LIABILITIES

•>

-•3,

14.

1" •

i! i

Particulars

LONG TERM INVESTMENTS

Giiveininuii seciiriii^h and Gosernmenl guarantecil bonds includinjj Treasury

Uill>

OIIIL-I AppKivcJ Set urines

(JI

(;ui LquiK

ihli) Preference

(h)

\hiiiial 1 UIIIJ\

lei

DL'II\ am c InMiuments

(ill

nehentines llonds

u'l

Oiliei Sctiiiilie.s (io be speeilled)

11)

Subsidiaries

(yi

linestmcnt Properties-Real Estate

Imesmienis in IntVastriietiire and Social Sector

Oihci than Appio\ed liu'cstments

SHORT TERM IS\ F.STMENTS

Goxernment securities and Government guaranteed bonds including

Treasui v Hills

Other Appnned Securities

Current Year

(Rs.'OOO)

Previous Year

(Rs.'OOO)

(u) Shares

(aa) Equity

(bb) Preference

(b) Mutual Funds

(c ) Derivative Instruments

(d) Debentures/ Bonds

(e) Other Securities (to be specified)

(0 Subsidiaries

(g) Investment Properties-Real Estate

Investments in Infrastructure and Social Sector

Other than Approved Investments

TOTAL

Notes (applicable to Sclwtlulus H and SA & SB) •

(u)

Investments in subsidiary/holding companies, joint ventures and associates shall be separately disclosed, at cost

(i)

Holding company and subsidiary shall be construed us defined in the Companies Act, 1956.

(n)

Join! Venture is u contractual arrangement whereby two or more parties undertake an cconumic activity, which is

subject lo |oint control.

(iii)

Joint control - is the contractually agreed sharing of power to govern the financial and operating policies of an

economic aiMiviry lo obtain benefits fiom it.

(iv)

Associate - is an enterprise in which the company lias significant influence and which is neither a subsidiary nor a |oint

venture of ihc company

(v)

Significant influence (for the purpose of this schedule) -means participation in the financial and operating policy

decisions of a company, but not control of those policies. Significant influence may be exercised in several ways, for

example. b> representation on Ihc board of diroclors, participation in ihe policymaking process, malenal inier-company

transactions, interchange of numageiial personnel or dependence on technical information. Significant influence may be

gained by share ownership, statute or ayicement. As reyaids sluue ownership, if un investor holds, directly or indirectly

through subsidiaries, 20 percent or more of the voting power of ihe invcslee, it is presumed thut the investor does have

significant influence, unless it can be clearly demonstrated that this is not the ease Conversely, if the investor holds, directly

or mdirecily through subsidiaries, less than 20 percent of the voting power of the investee, it is presumed that the investor

does not have significant influence, unless such inllucnce is clearly demonstrated. A substantial or majority ownership by

another investor docs not necessarily preclude an investor from having significant influence.

(b) Aggregate amount of company's investments other than listed equity securities and derivative instruments and also

the market value thereof shall be disclosed,

(d) Debt securities will be considered as "held lo maturity'' securities and will be measured at historical costs subject to

amortisation

(e) Investment Pmpeny means a properly [land or building or part of a building or both] held to earn rental income or for

capital appreciation or for both, icither than for use in services or for administrative purposes.

(f) Investments matin nig w iihm twelve months fiom balance sheet date and investments made with the specific intention

to dispose of within twelve months from balance sheet date shall be classified as short-term investments

1097 GI/2002—8.

THE GAZETTE OF INDIA. EXTRAORDINARY

|P\RI HI—SEC, 41

SCHEDULE - 9

LOANS

Particulars

SECURITY-WISE CLASSIFICATION

Seciircit

(a)

On mortgage ot property

(aa)

In India

(bb)

Outside India

(b)

On Shures, Bonds, Govt. Securities, etc.

(c)

Loans against policies

(d)

Others (to be specified)

Ull.UTMIVll

TOTAL

BORROWER-WISE CLASSIFICATION

(a)

Central and State Governments

(b)

Bunks and Financial Institutions

(c)

Subsidiaries

(it)

< 'onipanies

(e)

I .oans agiuiiHl policies

Others (to be specified)

TOTAL

• PERFORMANCE-WISE CLASSIFICATION

(a)

Loans classified as standard

(aa)

In India

(bb)

Outside India

(b)

Non-standard loans less provisions

(aa)

In India

(bb)

Ouiside India

TOTAL

MATURITY-WISE CLASSIFICATION

(u)

Short Term

(b)

Long Term

TOTAL

Current Vear

(Rs.'OOO).

Previous Year

(Rs.'OOO).

Notes.

(a) Short-term hunx shall include tho.se, wliiih we repayable within 12 months, from the date of balance sheet.

Long term limns shall be the Iwinn other than .short-term loans,

(h)

Provisions a\>ainst iiHii-peiibnniiig loans shall be shown separately

(c)

The nature <>/ the s,vm'iiy in case of all long term sec tired loans shall he specified in each case. Secured loans

for the purposes of this scheihtle. mean.': loans SCLIII-UII wholly or partly against an asset of the company

{d)

Loans considered iloiibtjid and the amount of provision created against such loans shull be disclosed.

5<J

S C H E D U L E - 1 0

FIXED ASSETS

Particulars

Goodwill

Intangibles (specify)

Land-Freehold

Leasehold Property

Buildings

Furniture & Fittings

Information Technology

Equipment

Vehicles

Office Equipment

Others (Specify natijrc)

TOTAL

Work in progress

Grand Total

PREVIOUS YEAR

Opening

Cost/ Gross Block

Additions

Deductions

fliMiing

1 Ip Uv

1 asi

Ycur

Depreciation

lor

The

Year

On Suits/

Adjustments ^{~ T "}

llML-

Net Block

yum

end

Previous

Yew

(Rs.'OOO)

Note.

Asset.* included in hind, property and building uhow exclude Investment I'roperttes us defined in note (c) to Schedule <S

SCHEDULE-11

CASH AND BANK BALANCES

Particulars

Cash (meludinji cheques, drafts and stamps)

Bank Balances

(a)

Deposit Accounts

(aa)

ShovMerm (due within 12 months or'tin: date of

Halunce Sheet)

(bb)

Others

(b)

Current Accounts

(c)

Oihers (lo be specified)

Money at ( all and Short Notice

(a)

With Bunks

(b)

With other Institutions

Others (to be specified)

TOTAL

Balances with non-scheduled banks included in 2 und 3 above

Current Year

(Rs.'OM).

CASH & HANk BALANCKS

In India

}

Outside India

TOTAL

Previous Year

(Rs.'OOO).

Note. Hunk Indcwce mtiv uu hide renuiuwves in ininsil II so, she iniliur and iiinonnt sliidl lie scnaruteh suited.

THE GAZETTE OF INDIA EXTRAORDINARY

[PAKI III—Si/.4|

SCHEDULE-12

ADVANCE'S AlVnfVTHKR ASSFTS

Particulars

ADVANCES

Reserve deposits with ceding

companies

Application money for investments

Prepayments

Advances to Directors/Officers

Advance lax paid and taxes deducted

at source (Net of provision for

taxation)

Others (1O he specified)

TOTAL (A)

OTHKR ASSETS

Income accrued on investments

Outstanding Premiums

Agents' Balances

Foreign Agencies Balances

Due from other entities carrying on

insurance business (including

reinsures)

Due from subsidiaries/ holding

company

Deposit with Reserve Bank of India

[Pursuant to section 7 of Insurance

Act, I91N]

Others (to be specified)

TOTAL (U)

TOTAL (A+B)

Current Year

(Rs.'OOO)

Previous Year

(Rs.'OOO)

Notes:

(a)

The (Wins under the above heads shall not he shown net of provisions for doubtful amounts The amount

<>lprovision against eaeh heailshould he shown se/wrate/y

(h)

The term 'officer' should conform to the definition of that term as given under the Companies Act. 1¹->S(>.

(e)

Sundry debtors will be shown under item ,V (Others)

SCHEDULE-13

CURRENT L1AHILI11ES

ft.

Particulars

Agents' Balances

Balances due to other insurance companies

Deposits held on re-insurance ceded

Premiums received in advance

Unallocated premium

Sundry creditors

Due to subsidiaries/ holding company

Claims Outstanding

Annuities Due

Due to Officers/ Directors

Others (to be specified)

TOTAL

Current Year

(Rs.'OOO).

Previous Year

(Ri/000).

SCHEDDLK- 14

PROVISIONS

Particulars

For taxation (less payments and taxes deducted at source)

For proposed dividends

For dividend distribution tax

Others (to be specified)

TOTAL

Current Year

(Rs.'OOO).

Previous Year

(Rs.'OOO).

SCHEDDLK- 15

MISCELLANEOUS EXPENDITURE

(To the extent not written off or adjusted)

2..

Particulars

Discount Allowed in issue of shares/ debentures

Others (to be specified)

TOTAL

Current Year

(Rs.'OOO).

Previous Year

(Rs.'OOO).

notes:

(a) No item sluill he included under the head "Miscellaneous Expenditure " and earned forward unless:

some benefit from the expenditure can rciisonahly he expected to he received in future, and

the amount of such benefit is reasonably

determinable.

(h) The amount to he earned forward in respect of any item included under the head

"Miscellaneous

Expenditure " shall not exceed the expected future revenue/other benefits related to the expenditure.

SCHEDULE B

(See Regulation 3)

PARTI

Account hit; principles for preparation of fiiiiincial statements

1. Applicability of Accounting Standards—Hvcry Balance Sheet, Receipts and Payments Account [Cash Flow

statement) and Profit and Loss Account | Shareholders' Account] of the insurer shall be in conformity with the Accounting

Standards (AS) issued by the IC'AI. to the extent applicable to the insurers carrying on general insurance business, except

that:

(i)

Accounting Standard .1 (AS 3) - Cash Mow Statements

Cash Flow Statement shall be prepared only

under the Direct Method.

(ii)

Accounting Standard 13 (AS 13)

Accounting for Investments, shall not be applicable.

(in)

Accounting Standard 17 (AS 17) - Segment Reporting - shall apply to all insurers irrespective of the

requirements regarding listing and turnover mentioned therein,

til

THE GAZETTE OF INDIA: EXTRAORDINARY

|P�r III—Si-.. .41

Premium—Premium shall be recognised as income over the contract period or the period of risk, whichever is

appropriate. Premium received in advance, which represents premium income not relating to the current accounting

period, shall be disclosed separately in the financial statements,

A reserve for unexphed risks shall be created as the amount representing that part of the premium written which is attributable to,

qnd to be allocated lo the succeeding accounting periods and shall not be less than as required under section 64 V( 1) (ii) (b) of the

Act.

Premium Received in Advance, which represents premium received prior to the commencement of the risk, shall be showi}

separately under the head 'Current Liabilities ' in the financial statements.

3. P r e m i u m Deficiency-Premium deficiency shall be recognised if the sum of expected claim costs, related expenses and

maintenance costs exceeds related reserve for unexpired risks.

4. Acquisition Costs—Acquisition costs, if any, shall be expensed in the period in which they are incurred.

Acquisition costs arc those costs that vary with, and are primarily related to, the acquisition of new and renewal insurance

contracts. The most essential test K the obligatory relationship between costs and the execution of insurance contracts (i.e.

commencement of risk ).

5. Claims—The components of the ultimate cost of claims to an insurer comprise the claims under policies and specific claims

settlement cosls ('hums under policies comprise the claims made for losses incurred, and those estimated or anticipated under the

policies following a loss occurrence.

A liability for outstanding claims shall be brought to account in respect of both direct business and inward reinsurance business.

The liability shall include: -

(a) Future payments in relation to unpaid reported claims;

(b) Claims Incurred Rut Not Reported (IRNR) including inadequate reserves [sometimes referred to as

( hums Incurred Bui Not Itnough Reported (IHNI-R)l,

which will result in future cash/assei outgo for settling liabilities against those claims. Change in estimated liability represents the

difference bclw een the eslimaied liability for outstanding claims at llie beginning and at the end of the financial perjod.

The accounting estimate shall also include claims cost adiustcd for estimated salvage value if there is sufficient degree of

certainty of its realisation.

Actuarial Valuation of claim liability - in some cases

Claims made in respect of contracts where the claims payment period exceeds four years shall be recognised on an actuarial

basis^subject to regulations that may be prescribed by the Authority. In such cases, certificate from a recognised actuary as to the

fairness of liability assessment must be obtained,

Actuarial assumptions shall be suitably disclosed by way of notes to the

account.

6. Procedure to determine the value of investments.—An insurer shall determine the values of investments in the

following inuiinei¹:-

Real EslalC - Investment Property— Investment Property shall be measured at historical cost less accumulated

depreciation and impairment loss, residual value being considered zero and no revaluation being permissible.

flic Insurer shall assess at each balance sheet dqje whether any impairment of the investment property has occurred.

An impairment loss shall be recognised as an expense in the Revenue/Profit and Loss Account immediately.

Fair value as at the balance sheet date and the basis of its determination shall be disclosed in the financial statements as additional

information.

Debt Secunties--Debt securities including government securities and redeemable preference shares shall be considered

as "held to maturity" securities and shall be measured at historical cost subject to amortisation.

Equity Securities and Derivative Instruments that are traded in active markets—Listed equity securities

and derivative instruments that are traded in active markets shall be measured at fair value as at the balance sheet date. For the

purpose of calculation of fair value, the lowest of the last quoted closing price of the stock exchanges where the securities are

listed shall be taken.

The insurer shall assess on each balance sheet date whether any impairment of listed equity security(ies)/ derivative(s)

instruments has occurred.

An active market shall mean a market, where the securities traded are homogenous, availability of willing buyers and willing

sellers is normal and the prices are publicly available.

Unrealised gams/losses arising due to changes m the fair value of listed equity shares and derivative instruments shall be taken to

equity under the head "Fair Value Change Account'. The 'Profit on sale of investments' or 'Loss on sale of investments', as the

case may be, shall include accumulated changes in the fair value previously recognised in equity under the heading Fair Value

Change Account in respect of a particular security and being recycled to Profit and Loss Account on actual sale of that listed

security.

For the removal of doubt, it is clarified that balance or any part thereof shall not be available for distribution as dividends. Also,

any debit balance in the said Fair Value Change Account shall be reduced from the profits/free reserves while declaring

dividends.

The insurer shall assess, at each balance sheet dale, whether any impairment has occurred. An impairment loss shall be

recognised as an expense in Revenue/Profit and Loss Account to the extent of the difference between the remeasured fair value of

the security/ investment and its acquisition cost as reduced by any previous impairment loss recognised as expense in

Revenue/Prolii and Loss Account. Any reversal of impairment loss, earlier recognised in Revenue/Profit and Loss Account shall

be recognised in Revenue/Profit and Loss Account.

d) Unlisted and other than actively traded Equity Securities and Derivative Instruments-Unlisted equity

securities and derivative instruments and listed equity securities and derivative instruments that are not regularly haded in active

market will be measured at historical costs. Provision snail be made for diminution in value of such investments. The provision so

made shall be reversed in subsequent periods if estimates based on external evidence show an increase in the value of the

investment over its cany ing amount. The increased carrying amount of the investment due to the reversal of the provision shall

not exceed the historical cost.

For the purposes of this regulation, a security shall be considered as being not actively traded, if as per guidelines governing

mutual funds laid down from lime to time by LSBI31, such a security is classified as ''thinly traded",

7. Loans—Loans shall be measured at historical cost subject to impairment provisions,

The insurer shall assess the quality of its loan assets and shall provide for impairment. The impairment provision shall not be

lower than the amounts derived on the basis of guidelines prescribed from time to time by the Reserve Bank oflndia, that apply to

companies and financial institutions.

8. Catastrophe Reserve — Catastrophe reserve shall be created in accordance with norms, if any, prescribed by the

Authority. Investment of funds out of catastrophe reserve shall be made in accordance with prescription of the Authority.

THE GAZETTE OF INDIA: EXTRAORDINARY

IP wi III—Sw .41

PART II

Disclosures forming part of Financial Statements

A. The following shall be disclosed by way of notes to the Balance Sheet:

Contingent Liabilities:

(a)

Partly-paid up investments

(b)

Underwriting commitments outstanding

(c)

Claims, other than those under policies, not acknowledged as debts

(d)

Guarantees given by or on behalf of the company

(e)

Statutory demands/liabilities in dispute, not provided for

Reinsurance obligations to the extent not provided for in accounts

(g)

Others (to be specified)

Encumbrances to assets of the company in and outside India.

Commitments made and outstanding for Loans. Investments and Fixed Assets.

Claims, less reinsurance, paid to claimants m/outside India.

Actuarial assumptions for determination of claim liabilities in the case of claims where the claims payment

period exceed four years,

Ageing of claims - distinguishing between claims outstanding for more than six months and other claims.

Premiums, less reinsurance, written from business iivbuiside India.

Extent of premium income recognised, based on varying risk pattern, category wise, with basis and justification

therefor, including whether reliance has been placed on external evidence.

Value of contracts in relation to investments, for:

(li) Purchases where deliveries are pending;

(i) Sales where payments are overdue.

10.

Operating expenses relating to insurance business: basis of allocation of expenditure to various classes of

business.

11.

Historical costs of those investments valued on fair value basis,

, 12.

Compulation of managerial remuneration.

13.

Basis of amortisation of debt securities.

14.

(n) Unrealised gain/losses arising due to changes m the fan value of listed equity shares and derivative instruments arc to be

taken to equity under the head 'Fair Value C'hungc Account" and on realisation reported in profit and loss Account.

(b)

Pending realisation, the cicdit balance in the 'Fair Value Change Account' is not available for distribution.

15.

Fair value of investment property and the basis therefor.

16.

Claims settled and remaining unpaid for a period of more than six months as on the balance sheet dale.

The following accounting policies shall form an integral part of the financial statements:

All significant accounting policies in terms of ihe accounting standards issued by the ICA1, and significant principles

and policies given in Part I of Accounting Principles. Any other accounting policies followed by the insurer shall be

stated in the manner required under Accounting Standard AS 1 issued by the 1CA1.

Any departure from the accounting policies as aforesaid shall be separately disclosed with reasons for such departure.

The following information shall also be disclosed:

Investments made in accordance with any statutory requirement should be disclosed separately together with its

amount, nature, security and any special rights in and outside India.

Segregation into performing/ non performing investments for purpose of income recognition as per the

directions, if any, issued by the Authority.

Percentage of business sector-wise.

A summary of financial statements for the last five years, in the manner as may be prescribed by the Authority.

Accounting Ratios as may be prescribed by ihe Authority.

Husis of allocation of Interest, Dividends and Rent between Revenue Account and Profit and Loss Account.

PART HI

GENERAL INSTRUCTIONS FOR PREPARATION OF FINANCIAL STATEMENTS

The corresponding amounts for the immediately preceding financial year for all items shown in the Balance

Sheet, Revenue Account and Profit and Loss Account should be given.

The figures in the financial statements may be rounded off to the nearest thousands.

Interest, dividends and rentals receivable in connection with an investment should be stated as gross value, the

amount of income tax deducted at source being included under 'advance taxes paid'.

Income from rent shall not include any notional rent.

(I)

For the purposes of financial statements, unless the context otherwise requires -

(a)

ihe expression 'provision' shall, subject to note II below mean any amount written off or

retained by way of providing for depreciation, renewals or diminution m value of assets, or

retained by way of providing for any known liability or loss of which the amount cannot be

determined with substantial accuracy;

(b)

the expression "reserve" shall not, subject to as aforesaid, include any amount written off or

retained by way of providing for depreciation, renewals or diminution in value of assets or

retained by way of providing for any known liability;

(c)

the expression capital reserve shall not include any amount regarded as free for distribution

through the profit and loss account; and the expression "revenue reserve" shall mean any

reserve other than a capital reserve;

(d)

The expression "liability" shall include all liabilities in respect of expenditure contracted for

and all disputed or contingent liabilities.

(II)

Where:

(a)

any amount written off or retained by way of providing for depreciation, renewals or diminution

in value of assets, or

(h)

any amount retained by way of providing for any known liability

is in excess of the amount which in the opinion of the directors is reasonably necessary for the purpose,

the excess shall be treated for the purposes of these accounts as a reserve and not as a provision.

The company should make provisions for damages under lawsuits where the management is of the opinion-that

the award may go against the insurer.

Extent of risk retained and reinsured shall be separately disclosed.

Any debit balance of Profit and Loss Account shall be shown as deduction from uncommitted reserves and the

balance if any, shall be shown separately.

1097 GI/2002—9.

« • >

—

PART IV

CONTENTS OF MANAGEMENT REPORT

There shall be attache! to the financial statements, a management report containing, inter alia, the following dulv

authenticated by the management:

Confirmation regarding the continued validity of the registration granted by the Authority;

Certification that all the dues payable to the statutory authorities have been duly paid;

Confirmation to the effect that the shareholding pattern and any transfer of shares during the year are m

accordance with the statutory or regulatory requirements;

Declaration that the management lias not directly or indirectly invested outside India the funds of the holders of

policies issued in India;

Confirmation that the required solvency margins h*

been maintained;

Certification to the effect that the values of all the assets have been reviewed on the date of the Balance Sheet and

that in his (insurer's) belief the. assets set forth in the Balance-sheets are shown in the aggregate at amounts not

exceeding their realisable or market value under the several 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", "

Sundry Debtors", " Bills Receivable", " Cash" and the several items specified under "Other Accounts";

Disclosure with regard to the overall risk exposure and strategy adopted to mitigate the same;

Operations in other countries, if any, with a separate statement giving the management's estimate of country risk

and exposure risk and the hedging strategy adopted;

Ageing of claims indicating the trends in average claim settlement time during the preceding five years;

10.

Certification to the effect as to how the values, as shown in the balance sheet, of the investments and stocks and

shares have been arrived at, and how the market value thereof has been ascertained for the purpose of

comparison with the values so shown;

11.

Rev.cw of asset quality and performance of investment in terms of portfolios, i.e., separately in terms of real

estate, loans, investments, etc.

12.

A responsibility statement indicating therein that:

(i) 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:

(ii) the management has adopted accounting policies and applied them consistently and made judgements and estimates that

are reasonable and prudent so us to give a true and fair view of the state of affairs of the company at the end of the financial

year and oi the operating profit or loss and of the profit or loss of the company for the year;

<rii>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) /Companies Act, 1956(1 of 1956), for safeguarding the

assets of the company and for preventing and delecting fraud and other irregularities;

(iv) the management has prepared the financial statements on a going concern basis-

(v) the management has ensured that an internal audit system commensurate with the size and nature of the business exists

and is operating effectively.

13.

A schedule of payments, which have been made to individuals, firms, companies and organisations in which

Directors of the insurer are interested.

•

PART V

Preparation of Financial Statements

(1) An insurer shall prepare the Revenue Account. Profit and Loss Account [Shareholders' Account] and the Balance

Sheet in Form B-KA, I"orm B-PL, and Form B-BS, .or as near thereto as the circumstances permit.

Provided that an insurer shall prepare Revenue Accounts separately for fire, marine, and miscellaneous insurance

business and separate schedules shall be prepared for Marine Cargo, Marine Other than Marine Cargo and the

following classes of miscellaneous insurance business under miscellaneous insurance and accordingly application

of AS 17 - Segment Reporting - shall stand modified.

I. Motor

2. Workmen's Compensation/Employers'Liability

Public/Product Liability

4. Engineering

5. Aviation

6 Personal Accident

7. Health Insurance

8. Others

(2) An insurer shall prepare separate Receipts and Payments Account in accordance with the Direct Method prescribed in

AS 3 - "Cash Flow Statement" issued by the 1CA1.

FORM B-RA

Name of the Insurer:

Registration No. and Date of Registration with the IRDA

REVENUE ACCOUNT FOR THE YEAR ENDED 31^ST MARCH, 20

Particulars

Premiums earned (Net)

Profit/ Loss on sale/redemption o£ Investments

Others (to be specified)

Interest, Dividend & Rent - Gross

TOTAL (A)

Claims Incurred (Net)

Commission

Operating Uxpcnses related to Insurance Business

TOTAL (B)

Operatini; Proflt/(Loss) from Firc/Marlne/Mlscellaneous

Business C- (A - B)

APPROPRIATIONS

Transfer to Shareholders' Account

Transfer to Catastrophe Reserve

Transfer to Other Reserves (to be specified)

TOTAL (C)

Schedule

Current

Year

(Rs.'OOO)

Previous

Year

(Rs.'OOO)

Note: See Note* appended al the end of Form H-I^JL

6 8

THE GAZETTE OF INDIA EXTRAORDINARY

IP ^ , 111—Si/ . 41

FORM B-PL

Name of the Insurer:

Registration No. and Date of Registration with the IRDA

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31^SI MARCH, 20

4-,

Particulars

OPERATING PROFIT/(LOSS)

(a)

Fire Insurance

(b)

Marine Insurance

(c )

Miscellaneous Insurance

INCOME FROM INVESTMENTS

(a) Interest, Dividend &. Rent - Gross

(b) Profit on sale of investments

Less: Loss on sale of investments

OTHER INCOME (To be specified)

TOTAL (A)

PROVISIONS (Other than taxation)

(a)

For diminution in the value of investments

(b)

For doubtful debts

(c)

Others (to be specified)

OTHER EXPENSES

(a) Expenses other than those related to Insurance Business

(b) Had debts written off

TOTAL (B)

Profit Before Tax

Provision for Taxation

APPROPRIATIONS

(a)

interim dividends paid during the year

(b)

Proposed finul dividend

(c)

Dividend distribution tax

(d)

Tiansfcr to any Reserves or Other Accounts (to be

specified)

Balance of profit/ loss brought forward Irom last year

Balance earned forward to Balance Sheet

Schedule

Current Year

(Rs.'OOO)

Previous

Year

(Rs.'OOO)

Notes: to Form B-RA and B- PL

(a)

Premium income received from business concluded in und outside India shall be separately disclosed.

(b)

Reinsurance premiums whether on business ceded or -accepted arc to be brought into account gross (i e. before deducting

commissions) under the head reinsurance premiums.

(c)

Claims incurred shall comprise claims paid, specific claims settlement costs wherever applicable and change in the

outstanding provision foi claims at the year-end,

(d)

Items of expenses und income in excess of one percent of the lotul premiums (less reinsurance) or Rs 5,00,000 whichever is

higliei, shall be shown as a separate line Hem

(e)

Pecs and expenses connected with claims shall be included in claims.

(f)

Under the sub-head "Otheis" shall be included items¹ like foreign exchange gains or losses and other items.

(g)

Interest, dividends and rentals receivable in connection with an investment should be staled as gross amount, the amount ol

income ta\ deducted at source being included undci 'advance taxes paid and taxes deducted at source"

(h)

Income from rent shall include only the realised renl. It shall not include any notional rent.

FORM BBS

Name of the Insurer:

Registration No. and Date of Registration with the 1RDA

BALANCE SHEET AS AT 31^S1 MARCH, 20

SOURCES OF FUNDS

SHARE CAPITAL

RESERVES AND SURPLUS

FAIR VALUE CHANGE ACCOUNT

BORROW INC jS

TOTAL

APPLICATION OF FUNDS

INVESTMENTS

LOANS

FIXED ASSETS

CURRENT ASSETS

Cash and Bank Balances

Advances and Other Assets

Suti-Total (A)

CURRENT LIABILITIES

PROVISIONS

Sub-Totnl(H)

NET CURRENT ASSETS (C) = (A - B)

MISCELLANEOUS EXPENDITURE (in the extern not written oil"

or adjusted)

DEBIT BALANCE IN PROFIT AND LOSS ACCOUNT

TOTAL

Schedule

Current Year

(Rs.'OOO)

Previous

Year

(Rs.'OOO)

7 0

^THE GAZETTE OF INDIA: EXTRAORDINARY

|PAKI III—SEC. 4J

CONTINGENT LIABILITIES

Particulars

Partly paid-up investments

Claims, other than against policies, not acknowledged as debts

by the company

Underwriting commitments outstanding (in respect of shares

and securities)

Guarantees given by or on behalf of the Company

Statutory demands/ liabilities in dispute, not provided for

Reinsurance obligations to the extent not provided for in

accounts

Others (to be specified)

TOTAL

Current Ypar,

(Rs.'OOO).

Prevlom Year

(RS.'OOO).

SCHEDULES FORMING PART OF FINANCIAL STATEMENTS

SCHEDULE - 1

PREMIUM EARNED [NET1

Particulars

Premium from direct business written

Add: Premium on reinsurance accepted

Less: Premium on reinsurance ceded

Net Premium

Adjustment for change in reserve for unexpired risks

Total Premium Earned (Net)

C-«rrewt*Swf!'

( ^ . ; o o o ) ' >l<

Note: Reinsurance premiums whether on business ceded or accepted are to oe Drought into account, oejore deducting

commission, under the head of reinsurance premiums.

SCHEDULE- 2

CLAIMS INCURRED INET1

Particular!

Claims paid

Direct

Add ; Re-insurance accepted

Less :Re-insurance Ceded

Net Claims paid

Add Claims Outstanding at the end of the year

Less Claims Outstanding at the beginning

Total Claims Incurred

Current year

(Rs.'OOOf •

Previous Year

Notes:

a) Incurred But Not Reported (IBNR). Incurred but not enough reported [IBNER) claims should be included in the

amount for outstanding claims.

b) Claims includes specific claims settlement cost but not expenses of management

The surveyor fees, legal and other expenses shall also form part of claims cost.

d) Claims cost should be adjusted for estimated salvage value if there is a sufficient certainty of its realisation.

SCHEDULE- 3

COMMISSION

Particulars

Commission paid

Direct

Add: Re-insurance Accepted

Less: Commission on Re-insurance Ceded

Net Commission

Current Year

(Rs.'OOO)

Pr«vk>u»YcHr

Note: The profit/ commission, ifanv, are to he combined with the Re-insurance accepted or Re-insurance ceded figures.

SCHEDULE - 4

OPERATING EXPENSES RELATED TO INSURANCE BUSINESS

t9.

10.

11.

12.

13.

Particulars

Employees' remuneration & welfare benefits

Travel, conveyance and vehicle running expenses

Training expenses

Rents, rates & taxes

Repairs

Printing & stationery

Communication

Legal & professional charges

Auditors' fees, expenses etc

(a) as auditor

(b) as adviser or in any.other capacity, in respect of

(i) Taxation matters

(ii) Insurance matters

(iii) Management services; and

(c)

in any other capacity

Advertisement and publicity

Interest & Bank Charges

Others (to be specified)

Depreciation

TOTAL

CurrentY«*r

(Rs,*OO0),

(RsiTWO)

!;;

Note: Items of expenses and income in excess of one percent of the total premiums (less reinsurance) or Rs.5,00,000

whichever is higher, shall be shown as a separate line item.

SCHEDULE - 5

SHARE CAPITAL

Particular!

Authorised Capital

Equity Shares of Rs

each

Issued Capital

Equity Shares of Rs

each

Subscribed Capital

Equity Shares of Rs

each

Called-up Capital

Equity Shares of Rs

each

Less : Calls unpaid

Add : Equity Shares forfeited (Amount originally paid up)

Less : Par Value of Equity Shares bought back

Less : Preliminary Expenses

Expenses including commission or brokerage on

Underwriting or subscription of shares

TOTAL

Notes:

(a) Particulars of the different classes of capital should be separately stated.

(b) The amount capitalized on account of issue of bonus shares should be disclosed.

(c) In case any part oj the capital is held by a holding company, the same should be separately disclosed.

THE GAZETTE OF INDIA. EXTRAORDINARY

IPMCI III—Sh 41

SCHEDULE -5A

SHARE CAPITAL

PATTERN OF SHAREHOLDING

[As certified bv the Managementl

Shareholder

Promoters

•

Indian

•

Foreign

Others

TOTAL

Current

Number of

Shares

Year

%of

Holding

Previous Year

Number of

Shares

% of Holding

SCHEDULE - 6

RF.SF.RVF.S AND SURPLUS

Particulars

Capital Reserve

Capital Redemption Reserve

Share Premium

General Reserves

Less: Debit balance in Profit and Loss Account

Less: Amount utilized for Buy-back

Catastrophe Reserve

Other Reserves (to be specified)

Balance of Profit in Profit & Loss Account

TOTAL

Current Year

(Rs.'OOO)

Previous Year

(Rs.'OOO)

Note:

Additions to and deductions from the / w n w should he disclosed under each of the specified heads

SCHEDULE-7

BORROWINGS

Particulars

Debentures/ Bonds

Banks

Financial Institutions

Others (to be specified)

TOTAL

Current Year

(Rs.'OOO).

Previous Year

(Rs.'OOO).

Notes-

The extent to which the borrowings arc secured shall he separately disclosed stating the nature of the secunh'

under each sub-head

h) Amounts due within 12 months from the date of Balance Sheet should be shown separately

Schedule-8

Investments

.'S .:.'»• \

,4.

.;,

• •

,• . ,

Pa^tic^l^rs'A,¹;i

•

,•

•>,

, •••'

''',.

'i¹¹

•

LONG TERM INVESTMENTS

Government securities and Government guaranteed bonds including

Treasury Bills

Other Approved Securities

Other Investments

(a) Shares

(aa) Equity

(bb) Preference

(b)

Mutual Funds

(c)

Derivative Instruments

(d)

Debentures/ Bonds

(e)

Other Securities (to be specified)

(f)

Subsidiaries

(g)

Investment Properties-Real Estate

Investments in Infrastructure and Social Sector

Other than Approved Investments

SHORT TERM INVESTMENTS

Government securities and Government guaranteed bonds including

Treasury Bills

Other Approved Securities

Other Investments

(a)

(aa)

Equity

(bb)

Preference

(b)

Mutual Funds

(c)

Derivative Instruments

(d)

Debentures/ Bonds

(e)

Other Securities (to be specified)

(f)

Subsidiaries

(g)

Investment Properties-Real Estate

Investments in Infrastructure and Social Sector

Other than Approved Investments

TOTAL

CuMfentj^eattv

(Its. '000)

•

^ Fi&vifl^'psivS;

(RsJ'p(Hty L

notes:

(a)

Investments in subsidiary/holding companies, joint ventures and associates shall be separately disclosed, at cost.

Holding company and subsidiary shall be construed as defined in the Companies Act, 1956:

(ii)

Joint Venture is a contractual arrangement whereby two or more parties undertake an economic activity, which is subject

to joint control.

(iii)

Joint control - is the contractually agreed sharing of power to govern the financial and operating policies of an economic

activity to obtain benefits from it.

(iv)

Associate - is an enterprise in which the company has significant influence and which is neither a subsidiary nor a joint

venture of the company.

(v)

Significant influence (for the purpose of this schedule) - means participation in the financial and operating policy

decisions of a company, but not control of those policies. Significant influence may be exercised in several ways, for

example, by representation on the board of directors, participation in the policymaking process, material inter-company

transactions, interchange of managerial personnel or dependence on technical information. Significant influence may

be gained by share ownership, statute or agreement- As regards share ownership, if an investor holds, directly or

indirectly through subsidiaries, 20 percent or more of the voting power of the investee, it is presumed that the investor

does have significant influence, unless it can be clearly demonstrated that this is not the case. Conversely, if the

investor holds, directly or indirectly through subsidiaries, less than 20 percent of the voting power of the investee, it is

presumed that the investor does not have significant influence, unless such influence is clearly demonstrated. A

substantial or majority ownership by another investor does not necessarily preclude an investor from having significant

influence.

(b)

Aggregate amount of company's investments other than listed equity securities and derivative instruments and also the market

value thereof shall be disclosed.

(c)

Investments made out of Catastrophe reserve should be shown separately.

\cfl WDoz.—jo

THE GAZETTE OF INDIA: EXTRAORDINARY

(PART III—SEC. 41

(d)

Debt securities will be considered as "held to maturity" securities and will be measured at historical cost subject to

amortisation.

(e)

Investment Property means a property [land or building or part of a building or both] held to earn rental income or for capital

appreciation or for both, rather than for use in services or for administrative purposes.

Investments maturing within twelve months from balance sheet date and investments made with the specific

_ intention to dispose of within twelve months.from balance sheet date shall be classified as short-term investments

SCHEDULE - 9

LOANS

"»fTO . ,WI

,'•

)

I 2 .

1 3.

\?t;:™" • ':™^v -'

vrwaftW* ^:^"',;,r'"-r^!fN- - ^{v ?} »••!

'!'!••,V •.

• •!•

••

' '

, !•

•

•;

,;J

'."

,'':

SnCLiRITY-WISL- C'l.ASSI I-ICA'IION

Secured

(a) On mortgage of property

(aa) In India

(bb) Outside India

(b)

On Shares, Bonds, Govt. Securities

(c)

Others (to be specified)

Unsecured .

TOTAL

BORROWER-WISE CLASSIFICATION

(a)

Central and State Governments

(b)

Banks and Financial Institutions

(c)

Subsidiaries

(d)

Industrial Undertakings

(e)

Others (to be specified)

TOTAL

PERFORMANCE-WISE CLASSIFICATION

(a) Loans classified as standard

(aa) In India

(bb) Outside India

(b) Non-performing loans less provisions

(aa) In India

. (bb)Outside India

TOTAL

MATURITY-WISE CLASSIFICATION

(a)

Short Term

(b)

Long Term

TOTAL

•"'^: "fiMBMP^QF

•

Motes:

(a) Short-term loans shall include those, which are repayable within 12 months from the date of balance sheet.

Long term loans shall be the loans other than short-term loans.

(b) Provisions against non-performing loans shall be shown separately.

(c) The nature of the security in case of all long term secured loans shall be specified in each case. Secured loans for

the purposes of this schedule, means loans secured wholly or partly against an asset of the company.

(d) Loans considered doubtful and the amount of provision created against such loans shall he disclosed.

SCHEDULE- 10

FIXED ASSETS

(Rs.'OOO)

Particulars

(iiiiuKvill

Intangibles hpi-ulv)

1 .iml-l-Kvlinlil

1 caschukl PitipuI¹,

Mnil(lmi<s

1 LiiintiiiL- .SL I'lilmtis

11111 >i mil 1 Hill

1 i\ hno!oL'\

l^:t|uipmL'iii

\VhiiM(;s

Olhtc 1 quipmnil

Others (.Specify

nature)

TOTAL

Work in prouiess

(ii'tind Total

I'KKVIOI'N ^ IvVK

Cost/ Cross Block

OpL-miiji

AllllltlllllS

I'cduclioim

C'lo^iny

Depreciation

Net Block

i 'pm

1 ast

^ cor

l-'or

Hie

Yuai

C)n

Suit's/

Adjusl

MKllts

T«

Dale

Ai at

yeai

end

I'revinui

^'i-ar

Note.

Assets niclin/itl in liiiul. building ami property above exehule lnvc\tment Pioperties as defined in note (e) to Schedule 8.

SCHEDULE II

CASH AM) HANK BALANCES

.1.

" 1

Particulars

(.'ash (including cheques, ilrails aikl slumps)

liank ItaKinccs

(a) Dcpusil Aceoiinis

(iu) Slinrl-k'im (due wiihm 12 momlis)

(hh) Olhors

(b) t 'ui'ienl Acfiiuiils

MOIK'V .u (;ill and SIHHI Noiiee

(a)

Will) Hanks

(h)

Wnfi iilliu hisliiulioiis

Olheis (ID lie specified)

TOTAL

Mal.mccs w ilh iiciii-schedulcil hanks included in 2 and ,' ,ibo\e

Current

Year

(Rs.'OOO)

Previous Year

(Rs.'OOO)

N o t e

Hank

ludiiiu r m n v m c l i n l e l e i i n i t t i n c e s in t n n i M i // ,\n tlie inituit' iind a m o u n t s h o u l d b e s e p a r t i i e l v

stated.

1097 GI/2002—1|

7(1

THE GAZETTE O F INDIA EXTRAORDINARY

IP ,i<\ III— Si' 41

SCHEDULE-12

ADVANCES AND OTHER ASSETS

Particulars

ADVANCES

Reserve- deposits with ceding companies

Application money tor investments

Prepayments

Advances to Diiectors/OITicers

Advance tax paid and taxes deducted at source (Net of

provision for taxation)

Others (lo be specified)

TOTAL (A)

OTHER ASSETS

Income accrued on investments

Outstanding Picmiums

Agents' Balances

Foreign Agencies Balances

Due from oilier entities carrying on insurance business

(including icinsurers)

Due from subsidiaries/ holding

Deposit with Reserve Bank of India

[Pursuant lo section 7 of Insurance Act, 1938]

Others (tn he specified)

TOTAL (B)

TOTAL (A+B)

Current Year

(Rs/000)

Previous Year

(Rs.'OOO)

Notes

(it)

/'lit' ilt'in\ under the nhiiw heads shall mil he shown net of provisions

for

tlouhtjul

amounts The amount oj provision against each head should he shown separately

fh)

The term 'officer' should conform to the definition of that term as ^ivcn under the

Companies Act, 1056,

(c)

Sinulrv Debtor* will he shown untler it<'m V(others)

SCHEDULE - 13

CURRENT LIABILITIES

').

10.

Particulars

Auents' Balances

Balances due u> othei insurance companies

Deposits held on re-insurance ceded

Premiums leceivcd in advance

Unallocated Premium

Sundry creditors

Due to subsidiaries/ holding company

Claims Outstanding

Due lo (JlTicers/ Dircctois

Oihcis (in IK- specihed)

TOTAL

Current Year

(Rs.'OOO)

—• •--

- •- --

Previous

Year

(Rs.'OOO)

- -

SCHEDULE-14

PROVISIONS

Particulars

Reserve for I'jxwpired Risk

For taxation (less advance lax paid and taxes deducted at .sourcel

[•'or proposed dividends

For dividend distribution tax

Others (to be specified)

TOTAL

Current Year

(Rs.'OOO)

Previous

Year

(Rs.'OOO)

SCHEDULE - 15

MISCELLANEOUS EXPENDITURE

(To Hie extent not written off or adjusted)

Particulars

Discount Allowed in issue of shares/ debentures

Others (to ho specified)

TOTAL

Current Year

(Rs.'OOO)

Previous Year

(Rs.'OOO)

Notes

(ul No item shall he me Imled under the head "Miscellaneous Expenditure ' anil carried forward unless:

I some henelit liom the expenihture can reasonably he expected to he recened in future, and

2. the amount of .such henelit is reasonably detcrnumdile.

(hi The amount to he t timed forward in respect of any Uvm included under the head "Miscellaneous Expenditure "shall

not exceed the expected fiiluic lyyenue/other benefits related to the expenditure

SCHEDULE C

(See Regulation 3l

AUDITOR'S REPORT

The report of the auditors on the financial statements of every insurer shall deal with the matters

specified herein:

1. (a) That they have obtained all the information and explanations which, to the best of their knowledge and belief

were necessary for the purposes of their audit and whether they have found them satisfactory;

(b) Whether proper books ufaccount have been maintained by the insurer so far as appears from ah examination of those

books;

were adequate lor the purpose ol audit,

(d) Whether the Balance sheet. Revenue account, Profit and Loss account and the Receipts and Payments Account dealt

with by the tepori arc in agreement with the books of account and returns;

THE GAZETTE OF INDIA EXTRAORDINARY

jfj^JliirlllJJ

(e) Whether the actuarial valuation ol" liabilities is duly certified by the appointed actuary including to the effect that the

assumptions for such valuation are in accordance with the guidelines and norms, if any, issued by the Authority, and/or

the Actuarial Society of India in concurrence with the Authority.

2. The auditors shall express then opinion on.

ta) (1)

Whether the balance sheet gives a true and fair view of the insurer's affairs as at the end of the financial

year'period:

(li) Whether the revenue account gives a true and fair view of the surplus or the deficit for the financial

year/period;

(iii) Whether ihc pro lit and loss account gives a true and fair view of the profit or loss for the financial year/period;

(iv) Whether the receipts and payments account »ives a line and lau view of (he receipts and payments for the

financial year/period:

(b) The financial statements stated ai (a) above are picpaied in accordance wilh the lcqutreineuts of ihe Insuiance Act,

1938 (4 of 103X), the Insurance Regulatory and Development Authority Act. 1 WO (41 of 1909) and the Companies Act,

1056 (1 of !⁽>56|. to the extent applicable and in the manner so requued.

(d) The accounting policies selected by the insurer are appropriate and arc in compliance with the applicable accounting

standards and v. ith the accounting principles, as prescribed in these Regulations or any order or direction issued by the

Authority in this behalf.

3. The auditors shall further certilv that-

(a) they have leviewed the management report and there is no apparent mistake or material inconsistencies wilh Ihe

financial statements.

(b) tile insiner has complied w iih ihe terms and conditions of (he icgisliaiion stipulated by the Authority.

4. A ccitil'icaic signed by the audilois | which shall he in addition to any other certificate or report which is icqmrcd by

law To be given u uh icspect to Ihc balance sheet | certifying that:-

(a) they have verified the cash balances and the securities relating to the insurer's loans, reversions and life

interests (in the case of life insurers) and investments;

(b)to what extent, if any. they have verified ihe investments and transactions relating to any Irusts undcitakcn h\ the

insurer as trustee: anil

provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and investments of the

policyholders' funds.

N RANGAOIARY. Chairman

|AinT-(l!'l/F'Al_w<>M>;!|

I ' m i t c t l I n l l i c

M . i i u i t j c i -

( n - \ l e l ' l i u l u

I ' I C V

R i m >

K n . n l

M . n . i p t i n . \ o « i V l l i i - I I i M ) d I

; n u l

P u b l i s h e d I n l l i c I ' m i t i - n l l c i , . l I ' u h l i t . i i i n i i v

I V l l n - 1 I l W i I