(I) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the Company has a present obligation as a result of past event
and it is probable that an outflow of resources will be required to settle the obligation, in
respect of which a reliable estimate can be made. Provisions are not discounted to present
value and are determined based on best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimates. Contingent assets and liabilities are not recognized.
A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources. When there is a
possible obligation or a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made. Contingent asset are neither
recognised nor disclosed in the financial statements.
(m) Earnings per Share (EPS)
The basic earnings per share is calculated by dividing the net profit after tax by weighted
average number of equity shares outstanding during the reporting period. Number of equity
shares used in computing diluted earnings per share comprises the weighted average
number of shares considered for basic earnings per share and also weighted average number
equity shares which would have been issued on conversion of all dilutive potential shares. In
computing diluted earnings per share only potential equity shares that are dilutive are
considered. Dilutive potential equity shares are deemed to be converted as at the beginning
^ of the period unless issued at a later date. The dilutive potential equity shares are adjusted
for the proceeds receivable had the shares been actually issued at. fair value. Dilutive
potential equity shares are determined independently for each period presented.
(n) . Leases .
Lease of assets/software under which all the risks and benefits of ownership are effectively
retained by the lessor is classified as Operating Leases. The total lease rentals, including
escalation, are recognized in the Revenue account or/and Profit and Loss account, as the
case may be, on a straight line basis over the period of the lease. Initial direct costs incurred
specifically for an operating lease are charged to the Revenue Account.
(o) Foreign Currency Transactions
Initial recognition: Foreign currency transactions are recorded in Indian Rupees, by applying
to the foreign currency amount the exchange rate between the Indian Rupee and the foreign
currency at the date of the transaction.
Conversion: Foreign currency monetary items are translated using the exchange rate
prevailing at the reporting date. Non-monetary items, which are measured in terms of
historical cost denominated in a foreign currency, are reported using the exchange rate at
the date of the transaction. Non-monetary items, which are measured at fair value or other
similar valuation denominated in a foreign currency, are translated using the exchange rate
at the date when such value was determined.
Exchange differences: Exchange differences are recognized as income or as expenses in the
period in which they arise.
(p) Allocation of Operating Expenses
For Operating Expenses (Schedule 4), expenses are allocated in Health, Personal Accident
and Travel on the basis of gross written premium.
(q) Rationale of Expenses allocation between Revenue Account and Profit & Loss Account
Expenses pertaining to Policyholders have been shown in Revenue Account as per the limit
prescribed in Expenses of Management Regulations 2023 and excess over the limit has been
debited in the Profit & Loss Account.
(r) Goods and Service Tax
-- Goods and Service Tax ("GST") collected is considered as a liability against which GST paid
for eligible inputs services or goods, to the extent claimable, is adjusted and the net liability
is remitted to.the'appropriate authority as stipulated. Unutilized .credits, if any, are carried
forward for adjustment in subsequent periods. GST paid for eligible input services not
recoverable by way of credits are recognized in the Revenue account as expense.
(s) Receipts and payments account
(i) Receipts and payments account is prepared and reported as per AS-3 Cash flow
statements using the Direct Method, in conformity with para 2.2 of the Master Circular
on Preparation of Financial Statements - General Insurance Business dated October 5,
2012, issued by the IRDA.
(ii) Cash and cash equivalents for the purpose of statement of receipts and payments
include cash and cheques in hand, deposits with banks, bank balances, liquid mutual
funds and other short term investments with original maturity of three months or less
which are subject to insignificant risk of changes in value.
(iii) The components of cash and cash equivalents are presented with reconciliation of the
amounts in its cash flow statement with the equivalent items reported in the Balance
Sheet.
- . Note: - '•
(1) The Company has disputed the demand raised by Income Tax Authorities of Rs. 1,15,809 thousands (previous year
. ’ Rs. 1,15,809 thousands) the appeals of which are pending before the appropriate authorities. This includes income
tax demand related to Assessment Year 2013-14 and 2014-15 in respect of which the Company has received the
favourable appellate order, which is pending for effect to be given by Assessing Authority. The Company does not
expect the outcome of these proceedings to have a material adverse effect on its financial statements as at March 31,
2024.
(2) Includes demand of Rs. 3,31,836 thousands (previous year Rs. 4,363 thousands) from Goods & Service Tax
authorities, for which show cause/demand notice has been issued by the department and the Company has filed the
reply accordingly.
Pending Litigations
The Company's pending litigations comprise of claims against the Company primarily by customers and proceedings
pending with Tax authorities. The Company has reviewed all its pending litigations and proceedings and has
adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in
its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse
effect on its financial statements as at March 31, 2024.
2. Actuarial Assumptions
The appointed actuary has certified to the Company that actuarial estimates for Premium deficiency reserve and IBNR
(including IBNER) are in compliance with the IRDA (Assets, Liabilities and Solvency Margin of General Insurance Business)
Regulations 2016 and the guidelines issued by the Institute of Actuaries of India.
Depending upon the Business segment, a suitable actuarial method like Basic Chain Ladder Method, Bornhuetter
Ferguson Method, Expected Ultimate Loss Ratio or a mixture of these have been used for IBNR/IBNER calculations.
The Company's Appointed Actuary has determined valuation assumptions in respect of 'Claims incurred but Not
Reported' and 'Claims incurred but Not Enough Reported' '(IBNR including IBNER) amounting to Rs. 22,39,323 thousands
(net) (Previous year Rs. 22,76,099 thousands (net)) that conform with Regulations issued by the IRDAI and professional
guidance notes issued by the Institute of Actuaries of India.
a. As at March 31, 2024, the Company has made a provision of Rs. 7,73,626 thousands (net) (Previous year
Rs. 7,37,159 thousands (net)) towards litigation reserve including incidental claims based on actuarial
^5^~^s^mates and the same is included as a part of IBNR/IBNER reserves. -
b. As at March 31, 2024, the Company has provided appropriate IBNR/IBNER with respect to multiyear
policies including policies exceeding 4 years.
3. Encumbrances on Assets
The assets of the Company are free from all encumbrances. The Company has all assets within India.
4. Capital Commitments
Estimated amount of commitments pertaining to contracts remaining to be executed in respect of fixed assets {net of
advances) is Rs. 47,924 thousand (previous year: Rs. 1,00,761 thousand).
5. Other Commitments
Commitment in respect of loans as on March 31, 2024 is Rs. Nil (previous year: Rs. Nil) and Investment is Rs. Nil (previous
year: Rs. Nil)
(B) Claims settled but not paid to Policyholder/lnsured for more than six months is Rs. Nil (previous year: Rs. Nil).
(C) Claims where the claim payment period exceeds four years:
As per "master circular on preparation of financial statements general insurance business October-2012", the claims
made in respect of contracts where claims payment period exceeds four years, are required to be recognized on
actuarial basis. Accordingly appointed Actuary has certified the fairness of the liability assessment, assuming 'NIL'
discount rate.
In this context, no claims have been valued on the basis of a contractually defined benefit amount payable in monthly
installments.
*Separate Fixed Deposits has been earmarked for payment of unclaimed amount of policyholder disclosed under head
Schedule 12- Advances and Other Assets. This amount includes Interest on unclaimed amount of Policyholders
amounting to Rs. 5,794 thousand (previous year Rs. 5,812 thousand)
12. Premium Deficiency Reserve , .
The Appointed Actuary has reviewed the Unearned premium reserve (UPR) posted in the Financial statements against the
estimated liability of the Company under unexpired obligations (including claims and claims related expenses) towards
policyholders (URR) for all business segments. The UPR provided in the financials is sufficient to the cover the URR at the
Company level thus; no premium deficiency reserve has been created.
13. investments
a. There are no contracts outstanding in relation to Purchases where deliveries are pending and Sales where
payments are overdue respectively.
b. The Company does not have any investment in Real Estate as at March 31, 2024 or March 31, 2023.
c. All investments are made in accordance with Insurance Act, 1938 and IRDAI (Investment) Regulations, 2016,
except:
1. Commercial papers issued by ILFS Ltd aggregating to Rs. 3,00,000 thousand that remained unpaid as on
March 31, 2024. In accordance with IRDAI regulations, the Company had made a 100% provision of
Rs.3,00,000 thousand and presented as "Other Receivables".
2. Bonds issued by Reliance Capital aggregating to Rs. 1,00,000 thousand that remained unpaid as on March
31, 2024. In accordance with IRDAI regulations, the Company had made a 100% provision of Rs. 1,00,000
thousand and presented as "Other Receivables".
3. Bonds issued by IFIN aggregating to Rs. 3,00,000 thousand. The Company has recovered Rs. 67,576
thousand as an interim settlement. In accordance with IRDAI regulations the Company has made provision
for remaining amount of Rs. 2,32,424 thousand, that remained unpaid as on March 31, 2024, and presented
as "Other Receivables".
14. Managerial Remuneration
A) Qualitative Disclosures
(i) Information relating to the composition and mandate of the nomination and remuneration committee.
Nomination and Remuneration Committee is the Committee of Board of Directors of the Company, constituted
in accordance with the provisions of Section 178 of the Companies Act, 2013.
During FY 2024, the composition of Nomination and Remuneration Committee has been as follows:
• Mr. Pradeep Pant-Chairman of NRC, Independent Director
• Mr. Dinesh Kumar Mittal - Independent Director
• Mr. Chandrashekhar Bhaskar Bhave -Independent Director
• Mr. David Fletcher- Non- Executive, Non-Independent Director
• Mr. Maninder Singh Juneja Non- Executive, Non-Independent Director
• Mr. Divya Sehgal - Non- Executive, Non-Independent Director (upto 03rd January 2024)
(ii) Information relating to the design and structure of remuneration policy and key features and objective of the
policy: The level and composition of remuneration is reasonable, market competitive and sufficient to attract,
retain and motivate the best talent for positions of the Directors, Key Managerial Persons (KMPs) and Senior
Managerial Persons (SMPs). The relationship of remuneration is linked to performance. Remuneration involves
a balance between Fixed and Variable pay, reflecting short and long-term performance objectives appropriate
to the Measure of Success (MOS) achievement by the Company.
(iii) Description of the ways in which current and future risks are taken into the account in the remuneration policy.
Nomination and Remuneration Committee (NRC) include following parameters as measurements to the annual
performance evaluation of Directors, Key Managerial Persons (KMPs) and Senior Managerial Persons (SMPs).
• Remuneration is adjusted for all types of risk
• Remuneration outcomes are symmetric with risk outcomes, and
• Remuneration payouts are sensitive to the time horizon of the risk
• The mix of cash, equity and other forms of remuneration must be consistent with risk alignment
• Credit, Market and Liquidity risks
Among other things, Nomination & Remuneration Committee and the Board also consider following for
assessing performance and suitable risk adjustments.
1. Persistency
2. Solvency
3. Grievance Redressal
4. Expenses of Management
5. Claim settlement
6. Claim repudiations
7. Overall Compliance status
8. Overall financial portion such as Net-Worth Position of Insurer, Asset under Management (AUM) etc.
In matters related to risk and reward, the NRC also considers advice from the members of the Risk Committee
of the Company, as appropriate before making its final determinations and recommendations to the Board.
(iv) Description of the ways in which the insurer seeks to link performance, during a performance measurement
period, with levels of remuneration: Key Results Areas (KRAs) are established for each member that will be
derived from the Guidelines and overall strategy of the organization and are incorporated as directives as
provided by the Board. The performance against these Key Results Areas( KRAs) are reviewed by the Nomination
and Remuneration Committee (NRC) for MD & CEO, other executive Director if any and Key Managerial Persons
(KMPs) and Senior Managerial Persons (SMPs). Basis the above evaluation, a final rating shall be provided to the
concerned Director/ Key Managerial Persons (KMPs) along with fixed pay revision and variable pay, as applicable.
The provisions of section 71 of the Companies Act, 2013 read with Rule 18 of the Companies (Share Capital and
Debentures) Amendment Rules, 2014 are applicable to the Company. However, as per rule 18, Debenture Redemption
Reserve shall be created out of profits of the Company available for payment of dividend, since the Company does not
have profits which are available for payment of dividend hence no Debenture Redemption Reserve is being created.
*Outsourcing expenses have been calculated basis on the Outsourcing guidelines issued by IRDAI. The outsourcing
expenses are inclusive of GST
25, Expenses of Management
The Company has filed an application for forbearance for exceeding the Expenses of Management (EOM) over the
allowable limit for FY 2023-24 with IRDAI on February 23, 2024 and April 08, 2024. The Company has also submitted
the glide path and convergence plan on June 21, 2023 to bring the EOM within the prescribed limits by FY 2025-26.
The application of forbearance is under consideration by IRDAI and approval for the same is yet to be received. The
grant of such forbearance is at IRDAI's discretion and the impact of the same on the financial statements will depend
on the future developments. The Company believes that they shall get this approval and in accordance with Expense
of Management Regulations 2023, a sum of Rs 21,64,507 thousands, which is in the excess of expenses of management
over the allowable limit, has been transferred from Revenue Account to Profit and Loss account for the year to date
ended March 31, 2024.
26. Sector Wise Business
Disclosure as per Schedule B Part II Point c (3) of the Insurance Regulatory and Development Authority of India
Ý (preparation of financial statements and auditor's report of insurance companies) regulations, 2002.
3) Required Solvency Margin Ratio (times) is 1.50.
31. Corporate Social Responsibility
As required under Section 135 of the Companies Act, 2013 and IRDAI Corporate Governance Guidelines 2016, the Board
of the Company has a "Corporate Social Responsibility Committee" (CSR Committee) which comprises of four members
of the Board. The CSR Committee is primarily responsible for formulating and recommending to the Board of Directors
from time to time the CSR activities and the amount of expenditure to be incurred on the activities pertaining and
monitoring CSR Projects. The Company has formulated the Corporate Social Responsibility Policy which has been
adopted by the CSR Committee and Board. As the Company has registered a negative profit based on the preceding
three years' average net profit, the Company has no obligation towards CSR activities during FY 2023-24.
32. Provision for Free Look period
The provision for Free Look period is Rs. 8,550 thousand (previous year Rs. 11,760 thousand), as certified by the
Appointed Actuary.
33. (A) The Company periodically reviews all its long term contracts to assess for any material foreseeable losses. Based on
such review, the Company has made adequate provisions for these long term contracts in the books of account as
required under any applicable law/ accounting standard .
(B) As at March 31, 2024, the Company did not have any outstanding long term derivative contracts (previous year Rs.
Nil). 1 . .. V
• 34. Foreign exchange gain/loss . ; • .
The foreign exchange loss (net) debited to Profit and Loss Account for the year ended March 31, 2024 is Rs. 1,577
thousands (March 31, 2023 exchange loss (net) Rs. 140 thousands).
35. Investor Education & Protection Fund
For the year ended March 31, 2024 the Company has transferred Rs. Nil (previous year Rs. Nil) to the Investor Education
& Protection Fund.
36. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("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.
37. No funds have been received by the Company from any persons or entities, including foreign entities ("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.
38. The Company has not declared or paid any dividend during the year ended March 31, 2024 and March 31, 2023.
39. Risk Management Architecture
The Company is exposed to a variety of risks associated with its insurance business operations and the investment
portfolio. To help define the level of risk that the Company is willing to take, a set of Risk Appetite Statements have
been defined which state in both quantitative and qualitative terms the Company's desired risk profile / overall level of
risk exposure. These risk appetite statements are reviewed and approved by the Board to ensure alignment of the
Company's risk strategy to the business plan approved by the Board. ' - ' .
42. Share Capital and Allotment
During the current year, the Company has allotted 18,88,56,679 equity shares (March 31, 2023 - 10,20,75,688 equity
shares) out of which equity shares 1,40,47,354 (March 31, 2023 -1,07,29,921 equity shares) were allotted under ESOP.
During the current year, the Company has made preferential'allotment of 4,83,99,106 equity shares, 4,46,76,098 equity
shares, 2,23,38,049 equity shares and 37,23,008 equity shares to Motilal Oswal, Temasek, SBI Life & Paragon
respectively (March 31, 2023 - Nil).
The right issue allotment during the current year were 5,56,73,064 equity shares (March 31, 2023 - 9,13,45,767 equity
shares).
In January 2024, Fettle Tone LLP has sold a stake to Bupa Singapore Holdings Pte Ltd, the transaction occurred on
January 04, 2024, where Bupa Singapore Holdings Pte Ltd has purchased 36,63,81,439 equity shares from Fettle Tone
LLP by which Bupa Singapore Holdings Pte Ltd shareholding is increased to 63%.
43. During the year ended March 31, 2024, the Company had reassessed the useful lives of certain business applications.
The management believes that the revised useful lives of the assets reflect the period over which these assets are
expected to be used based on the technical inputs and capability analysis. As a result of change, the charge in the
Revenue Account on account of depreciation for the year ended March 31, 2024, has decreased by Rs. 1,97,687
thousands.
44. Pursuant to an inquiry by Directorate General of GST Intelligence (DGGI) relating to certain input credit availed by the
Company, it has provided all information and clarifications to DGGI. As directed by DGGI authorities, the Company has
paid Rs. 2,50,000 thousands under section 74(5) of the CGST Act 2017. The Company believes, it has taken input credit
in accordance wjtjugjevant provisions of the statue. The Company has also received summons under section 131 (1A)
from the income tax authorities and has provided all the information and clarifications to them. Pending completion of
such inquiry, there is no impact considered on the financial statements for the year ended March 31, 2024. The
Company has received Show Cause Notice from DGGI- Mumbai on Marketing expenses of Rs. 2,92,879 thousands. The
same has been duly replied on March 26, 2024. The Company has shown this amount in Contingent Liability,
45. Employee stock option plan
The Company had introduced "Employee Stock Option Plan - 2020 (ESOP 2020)" in the financial year 2020-21 effective
from 01st June 2020 (date of grant). Under the ESOP Scheme 2020 the Company has given options to eligible Employees
to acquire equity shares in the Company. The options have been granted under various tranches.
46. Disclosure of Fire and Marine Revenue accounts
As the Company operates in single insurance business class viz. health insurance business, the reporting requirements as
prescribed by IRDA with respect to presentation of Fire and Marine insurance revenue accounts are not applicable.
47. Taxation
In the absence of virtual certainty regarding availability of sufficient future taxable Income to set off the taxable
accumulated business losses in future, within, the deferred tax assets on account of timing differences as stipulated in
Accounting Standard 22 on "Accounting for Taxes on Income" has not been recognized. Further, the Government of India
on December 12, 2019 vide the Taxation Laws (Amendment) Act 2019 inserted a new section 115BAA in the Income Tax
Act 1961, which provides an option to the Company for paying Income Tax at reduced rates as per provisions/conditions
defined in said section and the Company has opted for the same.
48. Implementation of Indian Accounting Standard (Ind AS) In insurance Sector
IRDAI vide its letter dated July 14, 2022 advised the insurance companies to set up a cross functional Steering Committee
to oversee the implementation of Ind AS. The Company has accordingly set up an Ind AS Steering Committee which meets
at regular intervals to oversee the progress on the matter. : .....
49. Code on Social Security, 2020 • "
The Indian Parliament has approved the Code on Social Security, 2020, which would impact the contributions by the
Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be
notified and the final rules are yet to be framed. The Company will carry out an evaluation of the impact and record the
same in the financial statements in the period in which the code becomes effective and related rules are published.
50. Audit Trail
The Company has used accounting software for maintaining its books of account which has a feature of recording audit
trail (edit log) except that the audit trail feature did not operate throughout the year. The same has been enabled/
operated from February 28, 2024 for Beacon, from March 03, 2024 for Maximus, from March 04, 2024 for Phoenix and
from July 03, 2023 for Credence. No instance of audit trail feature being tampered with was noted by the Company in
respect of above accounting software's. The Company has effective control mechanism with respect to access and
database management which creates logs and monitors any change to database, including direct data change and object
level changes to database. Also, User Interface (Ul) based access and activities on the server, including database are being
monitored through PAM system (Privilege Access Management). Access to database and server are only allowed through
PAM and restricted to application administrator through strict access controls and monitoring process.
As per our report of even date For and on behalf of the Board of Directors
For S.R. Batliboi & Co.JLLjJgw^ Niva Bupa Health Insurance Company Limited
Chartered Accountants *Ý' -
VKA' /Mrj
Shrawan Jalan Me.--- _w „
Partner J u " 1
Membership No: 102102 \_ . t\AXA«'/
Place: Mumbai Director (vs Managing Director &
\f v Chief Executive Officer
Dinesh Kumar Mittal Krishnan Ramachandran
DIN:00040000 DIN:08719264
For T R Chadha & Co. LLP
Chartered Accountants
Neena Goei -— Company Secretary Chief Financial Officer
Partner Raj at Sharma Vishwanath Mahendra
Membership No:057986 Membership No. FCS 7069
Place: Noida
Date: May 10, 2024 Place: Gurugram
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