Online-Trading Portfolio-Tracker Research Back-Office MF-Tracker
BSE Prices delayed by 5 minutes... << Prices as on Mar 28, 2024 - 3:59PM >>   ABB 6350 [ 1.12 ]ACC 2494.75 [ 1.56 ]AMBUJA CEM 612.3 [ 1.76 ]ASIAN PAINTS 2846 [ 0.56 ]AXIS BANK 1048.3 [ -0.50 ]BAJAJ AUTO 9144.9 [ -0.29 ]BANKOFBARODA 264.2 [ 2.07 ]BHARTI AIRTE 1236.2 [ 0.94 ]BHEL 247.2 [ 1.77 ]BPCL 603 [ 1.34 ]BRITANIAINDS 4889.75 [ -0.61 ]CIPLA 1494.65 [ 1.94 ]COAL INDIA 433.75 [ 0.70 ]COLGATEPALMO 2741.95 [ 3.19 ]DABUR INDIA 525 [ 0.68 ]DLF 898.3 [ 1.99 ]DRREDDYSLAB 6171.85 [ 2.05 ]GAIL 181.5 [ 0.69 ]GRASIM INDS 2285.35 [ 3.59 ]HCLTECHNOLOG 1543.3 [ -0.26 ]HDFC 2729.95 [ -0.62 ]HDFC BANK 1448.2 [ 0.52 ]HEROMOTOCORP 4717.2 [ 3.21 ]HIND.UNILEV 2268.25 [ 1.26 ]HINDALCO 560.45 [ 0.52 ]ICICI BANK 1095.75 [ 1.08 ]IDFC 110.65 [ -0.58 ]INDIANHOTELS 591.15 [ 0.93 ]INDUSINDBANK 1549.1 [ 1.04 ]INFOSYS 1498.8 [ 0.99 ]ITC LTD 428.55 [ 0.13 ]JINDALSTLPOW 849.75 [ 1.91 ]KOTAK BANK 1785.8 [ 0.57 ]L&T 3774.1 [ 1.83 ]LUPIN 1617.85 [ 1.23 ]MAH&MAH 1921.35 [ 2.26 ]MARUTI SUZUK 12613.1 [ 0.74 ]MTNL 32.92 [ -3.01 ]NESTLE 2623.3 [ 2.18 ]NIIT 105.8 [ -2.49 ]NMDC 201.7 [ 1.33 ]NTPC 335.95 [ 1.60 ]ONGC 267.85 [ 2.29 ]PNB 124.35 [ 1.30 ]POWER GRID 277.05 [ 2.21 ]RIL 2976.8 [ -0.37 ]SBI 752.6 [ 2.53 ]SESA GOA 271.65 [ 0.02 ]SHIPPINGCORP 208.75 [ 3.42 ]SUNPHRMINDS 1620.5 [ 0.77 ]TATA CHEM 1080.6 [ -2.72 ]TATA GLOBAL 1095.4 [ 0.56 ]TATA MOTORS 993 [ 1.45 ]TATA STEEL 155.9 [ 2.00 ]TATAPOWERCOM 394.15 [ 1.49 ]TCS 3883.55 [ 1.20 ]TECH MAHINDR 1250.4 [ -0.26 ]ULTRATECHCEM 9740 [ 1.19 ]UNITED SPIRI 1134.5 [ -0.33 ]WIPRO 480.05 [ 1.66 ]ZEETELEFILMS 138.7 [ -1.87 ] BSE NSE
You can view full text of the latest Auditor's Report for the company.

BSE: 540716ISIN: INE765G01017INDUSTRY: Finance - Non Life Insurance

BSE   ` 1685.05   Open: 1659.40   Today's Range 1659.35
1692.00
+22.35 (+ 1.33 %) Prev Close: 1662.70 52 Week Range 1056.00
1739.95
Year End :2022-03 

To the Members of ICICI Lombard General Insurance Company Limited

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying financial statements of ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED

("the Company"), which comprise the Balance Sheet as at March 31, 2022, the Revenue accounts of fire, marine and miscellaneous insurance (collectively known as the 'Revenue Accounts'), the Profit and Loss Account and the Receipts and Payments Account for the year then ended, the schedules annexed there to, a summary of the significant accounting policies and other explanatory notes thereon.

In our opinion and to the best of our information and according to the explanations given to us, we report that the aforesaid financial statements, prepared in accordance with the requirements of Accounting Standards as specified under Section 133 of the Companies Act, 2013 (the 'Act'), including relevant provisions of the Insurance Act, 1938, the Insurance Regulatory and Development Authority of India Act, 1999 (the "IRDAI Act") and other accounting principles generally accepted in India, to the extent considered relevant and appropriate for the purpose of these financial statements and which are not inconsistent with the accounting principles as prescribed in the Insurance Regulatory and Development Authority of India (Preparation of Financial Statements and Auditors' Report of Insurance Companies) Regulations, 2002 (the "Regulations") and orders/directions/circulars issued by the Insurance Regulatory and Development Authority of India ("IRDAI"/"Authority"), to the extent applicable, give a true and fair view in conformity with the accounting principles generally accepted in India as applicable to insurance companies:

a. in the case of Balance Sheet, of the state affairs of the Company as at March 31,2022;

b. in the case of Revenue Accounts, of the operating profit in so far as it relates to the Fire and Miscellaneous business and operating loss in so far as it relates to the Marine business for year ended on that date;

c. in the case of Profit and Loss Account, of the profit for the year ended on that date; and

d. in case of Receipts and Payments Account, of the receipts and payments for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that is relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Sr. No.

Key Audit Matter

How our Audit addressed this Key Matter

1.

Information Technology Systems and Controls (IT

Our key audit procedures included, but were not limited to the

Controls):

following:

The Company is highly dependent on its complex IT

We

obtained an understanding of the entity's IT related control

architecture comprising hardware, software, multiple

environment. Furthermore, we conducted a risk assessment and

applications, automated interfaces and controls in

identified IT applications, databases and operating systems that are

systems for recording, storing and reporting financial

relevant for the Company's financial reporting.

transactions.

For the key IT systems relevant to reporting of financial information, our

Large volume of transactions that are processed on

areas of audit focus included access, program change management,

daily basis as part of its operations, which impacts

automated transaction and interface controls.

key financial accounting and reporting items such as

premium income, claims, commission expenses and

In particular:

investments among others.

We obtained an understanding of the entity's IT environment and

There exists a risk that, gaps in the IT control

key changes if any during the audit period that may be relevant to

environment could result in the financial accounting and reporting records being materially misstated.

the audit.

We sample tested the design, implementation and operating

The controls implemented by the entity in its IT

effectiveness of the General IT controls over the key IT systems

environment determine the integrity, accuracy,

that are critical to financial reporting. This included evaluation of

completeness, and the validity of the data that is

entity's controls to ensure segregation of duties and appropriate

processed by the applications and is ultimately used for financial reporting. These controls contribute to

access rights.

mitigating risk of potential misstatements caused by

Controls over changes to software applications were evaluated

fraud or errors.

to verify whether the changes were approved, tested in an environment that was segregated from operation and moved to

Our audit approach relies on automated controls and therefore procedures are designed to test control over

production by appropriate users.

IT systems, segregation of duties, interface and system

We also evaluated the design and tested the operating

application controls over key financial accounting and

effectiveness of critical & key automated controls within various

reporting systems.

business processes. This included testing the integrity of system interfaces, the completeness and accuracy of data feeds, system reconciliation controls and automated calculations.

We also reviewed the Information System Audit Reports to assess the impact of observations and management's response if any on financial reporting.

Results of our tests has provided audit evidence which we have used to draw conclusions including our reporting.

2.

Investments (Refer Schedule 8 and 8A):

Our audit procedures on Investments included the following:

The Company's investments represent 76.3% of the

Understood management's process and controls to ensure proper

assets as at March 31, 2022 which are to be valued in

classification and valuation of investment.

accordance with accounting policy framed as per the extant regulatory guidelines.

Verified and obtained appropriate external confirmation for availability and ownership rights related to these investments.

The valuation of all investments should be as per the investment policy framed by the Company which in turn

Tested the design, implementation, management oversight and

should be in line with IRDAI Investment Regulations

operating effectiveness of key controls over the classification and

and Preparation of Financial Statement Regulations. The valuation methodology specified in the regulation

valuation process of investments.

is to be used for each class of investment.

Test-checked valuation of different class of investments to assess appropriateness of the valuation methodologies with reference

The Company has a policy framework for Valuation and

to IRDAI Investment Regulations along with Company's own

Impairment of Investments. The Company performs an impairment review of its investments periodically and

investment policy.

recognises impairment charge when the investments

Examining the rating downgrades by credit rating agencies and

meet the trigger/s for impairment provision as per the criteria set out in the investment policy of the Company. Further, the assessment of impairment involves significant management judgement.

assessing the risk of impairments to various investments.

Sr. No. Key Audit Matter

How our Audit addressed this Key Matter

The classification and valuation of these investments was considered one of the matters of material significance in the financial statements due to the materiality of the total value of investments to the financial statements.

• Reviewed the Company's impairment policy and assessed the adequacy of its impairment charge on investments outstanding at the year end.

Based on procedures above, we found the Company's impairment, valuation and classification of investments in its financial statements in all material respects to be fair.

3. Scheme of demerger of Bharti AXA General Insurance Limited's insurance business ("Insurance Undertaking") to ICICI Lombard General Insurance Limited (Refer note 5.2.26)

We obtained an understanding of the accounting treatment proposed by the management and appraised it by past precedents and applicable regulatory provisions along with treatment as prescribed in the Scheme of Demerger.

During the year, Scheme of Demerger between the Company and Bharati Axa General Insurance Limited (Bharti AXA), whereby, the insurance undertaking of Bharti AXA is demerged and merged with the Company from the Appointed Date i.e. April 1, 2020 had received various regulatory approvals with effective date of September 8, 2021.

The necessary accounting entries to record the transaction have been recorded during the year as required under the applicable accounting standards.

Our audit procedures include the following:

• Review of annual financial statement of demerged undertaking for year ended March 31, 2021 as certified by an independent accountant of demerged undertaking.

• Reviewed proposed accounting entries and disclosures made in the notes to accounts and tied various amounts with underlying financial information of demerged undertaking.

• We have read the transaction documents, including approved Scheme of Demerger and identified pertinent terms relevant to the accounting and disclosure requirement for the transaction. We assessed and confirmed the accounting and disclosure treatment of the Scheme and its compliance with Accounting Standard 14: Accounting for Amalgamations (AS-14).

We have read the minutes of the meeting of Board of Directors, its Committees and Members of the Company.

We have considered changes in the internal financial controls on accounts of use of applications/systems of demerged undertaking.

Results of our tests has provided audit evidence which we have used to draw conclusions including our reporting.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

The Directors are responsible for the preparation of other information. The other information comprises Directors Report and Management Discussion & Analysis but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We confirm that we have nothing material to report, add or draw attention to in this regard.

RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial

position, underwriting results, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the applicable Accounting Standards specified under Section 133 of the Act, the Insurance Act, the IRDAI Act, the Regulations and orders/directions prescribed by the Insurance Regulatory and Development Authority of India ('IRDAI') in this behalf and current practices prevailing within the insurance industry in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level assurance, but it is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, that could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise

professional judgement and maintain professional skepticism

throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor's Report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our Auditor's Report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

OTHER MATTERS

The actuarial valuation of liabilities in respect of Incurred But Not Reported (the "IBNR"), Incurred But Not Enough Reported (the "IBNER") and Premium Deficiency Reserve (the "PDR") is the responsibility of the Company's Appointed Actuary (the "Appointed Actuary"). The actuarial valuation of these liabilities, that are estimated using statistical methods as at March 31, 2022 has been duly certified by the Appointed Actuary and in his opinion, the assumptions considered by him for such valuation are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI. We have relied upon the Appointed Actuary's certificate in this regard for forming our opinion on the valuation of liabilities for outstanding claims reserves and the PDR contained in the financial statements of the Company.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the IRDAI Financial Statements Regulations, we have issued a separate certificate dated 21 April, 2022 certifying the matters specified in paragraphs 3 and 4 of Schedule C to the IRDAI Financial Statement Regulations.

2. As required by the paragraph 2 of Schedule C to the IRDAI Financial Statement Regulations and Section 143(3) of the Act, in our opinion and according to the information and explanations give to us, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) As the Company's accounts are centralised and maintained at the corporate office, no returns for the purposes of our audit are prepared at the branches and other offices of the Company.

c) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

d) The Balance Sheet, the Revenue Accounts, the Profit and Loss Account and the Receipts and Payments Account dealt with by this report are in agreement with the books of account.

e) In our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, to the extent they are not inconsistent with the accounting principles prescribed by the Regulations and orders/directions prescribed by IRDAI in this regard.

f) Investments have been valued in accordance with the provisions of the Insurance Act, the Regulations and orders/directions issued by IRDAI in this regard.

g) On the basis of the written representations received from the directors as on 31st March, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022 from being appointed as a director in terms of Section 164 (2) of the Act.

h) With respect to the adequacy of the internal financial controls with reference to the financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure A".

i) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note no. 5.1.1 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. The Company did not have any outstanding long-term derivative contracts - Refer Note no. 5.2.21 to the financial statements and "Other Matter" para above;

iii. During the year there were no amounts required to be transferred to the Investor Education and Protection Fund by the Company - Refer Note no. 5.2.22 to the financial statements.

iv. (a) The Management has represented that,

to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any

manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under

(a) and (b) above, contain any material misstatement.

v. As stated in Note 5.2.24 to the standalone

financial statements

(a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.

(b) The interim dividend declared and paid by the Company during the year and until the date of this report is in compliance with Section 123 of the Act.

(c) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.

3. With respect to the other matters to be included in the Auditor's Report, in terms of the requirements of Section 197(16) of the Act, we report that managerial remuneration payable to the Company's Directors is governed by the provisions of Section 34A of the Insurance Act, 1938 and is approved by IRDAI. Accordingly, the managerial remuneration limits specified under Section 197 of the Act do not apply.

For Chaturvedi & Co. For PKF Sridhar & Santhanam LLP

Chartered Accountants Chartered Accountants

(Firm Registration No. 302137E) (Firm Registration No. 003990S/S200018)

S N Chaturvedi R. Suriyanarayanan

Partner Partner

Membership No. 040479 Membership No. 201402

UDIN: 22040479AHMWUG6388 UDIN: 22201402AHMVQD2636

Mumbai Mumbai

21 April 2022 21 April 2022