Dear Members,
The Board of Directors are pleased to present the Twenty-Fourth Integrated Annual Report of ICICI Lombard General Insurance Company Limited ("the Company") along with the Audited Financial Statements for the financial year ended March 31, 2024.
BUSINESS OUTLOOK
Industry in FY2024
The general insurance industry has undergone significant changes during recent times. The pandemic accelerated the industry's digital transformation, which has resulted in increased demand for new insurance products and services. During the year, the Insurance Regulatory and Development Authority of India ("IRDAI") introduced several reforms in its endeavour to expand the insurance market and increase insurance penetration.
The Gross Direct Premium Income ("GDPI") of the non-life insurance industry grew from Rs. 2,569.12 billion in FY2023 to Rs. 2,897.38 billion in FY2024, a growth of 12.8%. The market share of private players increased from 51.4% in FY2023 to 53.5% in FY2024 [Source: IRDAI and General Insurance Council].
Company in FY2024
The Company continues its journey of profitable growth through robust and prudent underwriting practices, generation of cash flows through strong retention of premium and judicious investments of the proceeds and focus on providing high quality customer service. The Company recognises the responsibility to protect individuals and corporates from various risks and contribute towards the larger goal of nation development.
To fulfil this obligation, the Company offers a wide range of general insurance products and continuously introduces innovative products and services that not only enhance market penetration but also helps in managing various risks.
The Company has undertaken various initiatives towards building better digital platforms for claim management for its customers. The adoption of digital solutions has enabled the
Company to settle claims remotely and efficiently, resulting satisfaction insignificant levels. The Company has embraced cutting-edge technologies such as artificial intelligence and machine learning, as well as chat bots, to provide customers with an enhanced experience at every stage of their journey, from onboarding to claims settlement.
The Company's GDPI grew from Rs. 210.25 billion in FY2023 to
Rs. 247.76 billion in FY2024, a growth of 17.8%.
In FY2023, the Company had issued 32.7 million policies and honoured 3.6 million claims, while in FY2024, the Company has issued 36.2 million policies and honoured 2.9 million claims.
The Company continues to lead the private players in the industry and has maintained its position of second largest player within the overall non-life insurance market in India. The market share of the Company is 13.2% (GDPI basis) among private sector non-life insurers in India including standalone health insurers, while the overall market share of the Company is 8.6% (GDPI basis) among all non-life insurers in India.
FINANCIAL HIGHLIGHTS
The financial performance of the Company for FY2024 vis-a-vis FY2023 is summarised in the following table:
MATERIAL EVENT(S) DURING THE YEAR UNDER REVIEW
During the year under review, ICICI Bank Limited had purchased shares of the Company through stock exchange mechanism and consequently, has become the Holding Company of the Company with effect from February 29, 2024.
DIVIDEND
The profit after tax for the financial year ended March 31, 2024 is Rs. 19.19 billion. The profit available for appropriation is Rs. 53.35 billion after taking into account the balance of profit of
Rs. 34.16 billion brought forward from the previous year.
During the year under review, the Company paid Rs. 5.0 per equity share as an interim dividend for FY2024 i.e. at the rate of 50.0% of face value of Rs. 10/- each, aggregating to
Rs. 2.46 billion. The Board of Directors of the Company, at their
Meeting held on April 17, 2024, have also recommended a final dividend of Rs. 6.0 per equity share i.e. at the rate of 60.0% of face value of Rs. 10/- each for FY2024, to the Members of the Company for their approval at the ensuing Annual General Meeting ("AGM").
The dividend pay-out ratio for FY2024 is 28.2% as against 27.0% for FY2023.
In accordance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has adopted the Dividend Distribution Policy, which covers various parameters based on which the Board may recommend or declare dividend. The Dividend Distribution Policy of the Company is hosted on website of the Company and can be viewed at https://www.icicilombard.com/docs/default-source/ policies-of-the-company/dividend-distribution-policy.pdf. of the prescribed terms and
The Company has declared dividend based on the solvency margin position and profit available for distribution for FY2024 in accordance with the Dividend Distribution Policy of the Company.
SOLVENCY
IRDAI requires insurance companies to maintain a minimum solvency of 1.5 times which is calculated in a manner as specified in the Insurance Regulatory and Development Authority of India (Assets, Liabilities and Solvency Margin of General Insurance Business) Regulations, 2016. The solvency margin position of the Company as at March 31, 2024 is 2.62 times as compared to 2.51 times as at March 31, 2023. The net worth of the Company has increased from Rs. 103.92 billion as at March 31, 2023 to Rs. 119.60 billion as at March 31, 2024.
SHARE CAPITAL
The Authorised Share Capital of the Company as at March 31, 2024 is Rs. 5,500,000,000 comprising of 550,000,000 equity shares of face value of Rs. 10/- each. The issued, subscribed and paid-up share capital of the Company as at March 31, 2024 is
Rs. 4,926,852,950 comprising of 492,685,295 equity shares of face value of Rs. 10/- each.
During the year under review, the Company has allotted 1,560,192 equity shares pursuant to exercise of Stock Options by the eligible options holders under the ICICI Lombard-Employees Stock Option Scheme-2005 ("ESOS"). The equity shares allotted under ESOS ranks pari-passu with existing equity shares of the Company.
The Company has not issued any equity shares with differential voting rights or sweat equity shares during the year under review.
NON-CONVERTIBLE DEBENTURES
As an integral part of the Scheme of Arrangement between the Company and Bharti AXA General Insurance Company Limited ("Bharti AXA"), 10.5%, 350 unsecured, subordinated, fully paid-up, listed, redeemable and non-convertible debentures, each having a face value of Rs. 1,000,000 issued by Bharti AXA on April 30, 2019 (deemed date of allotment) ("the Debentures") were transferred in the name of the Company, on the same terms and conditions, upon the Scheme becoming effective i.e. from September 8, 2021.
The aforesaid Debentures were issued with a term of ten (10) years. In terms of the Information Memorandum, the Company had an option to exercise calloptionattheendoffive(5) completed years from the deemed date of allotment and at the end of every year thereafter before the redemption date, subject to the fulfillment.
As on March 31, 2024, the Company had Rs. 0.35 billion outstanding Debentures comprising of 350 Debentures having a face value of Rs. 1,000,000 each, listed on the wholesale debt market segment of the National Stock Exchange of India Limited. During the year under review, the Company has paid an annual interest to the Debenture Holder, within the prescribed timelines.
The Company had decided to exercise call option for redemption of the Debentures as per the terms and conditions. The Company had accordingly sent Notice to the Debenture Holder and Debenture Trustee in this regard on April 1, 2024. The Debentures would be redeemed on April 30, 2024 (being call option date), prior to maturity, along with final Interest due thereon. Further to redemption of the Debentures, in full, along with interest due thereon, the Company will have no outstanding borrowings.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there has been no change in the nature of the business of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The provisions of Section 186(4) of the Companies Act, 2013
("the Act"), requires disclosure in the financial statements of the full particulars of the loans given, investment made or guarantee given or security provided including the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security, are not applicable to the Company, being an insurance company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS
There are no significant and/or material orders passed by
Regulators or Courts or Tribunals impacting the going concern status and future operations of the Company.
BOARD OF DIRECTORS
The Company believes that a strong, independent and diverse Board leadership ensures the deployment of effective corporate governance. The significance of Board diversity is recognised by various statutes/regulations i.e. the Insurance Act, 1938, the Guidelines for Corporate Governance for insurers in India issued by IRDAI ("IRDAI CG Guidelines"), IRDAI (Corporate Governance for Insurers) Regulations, 2024 ("IRDAI CG Regulations"), the Act and relevant rules made thereunder, Listing Regulations and accordingly, composition of the Board of the Company is based on the prescribed regulatory requirements.
The Board of the Company is duly constituted with an optimum balance between Executive and Non-executive Directors for an effective functioning of the Board.
As on March 31, 2024, the Board of the Company consists of total eleven (11) Directors, out of which seven (7) are Non-executive, Independent Directors, two (2) are Non-executive, Non-independent Directors and remaining two (2) are Executive Directors including Managing Director & CEO. The Company's Board is chaired by a Woman Director, Lalita D. Gupte, Non-executive, Independent Director.
from None of the Directors of the Company are disqualified being appointed as Directors as specified in Section 164(1) or Section 164(2) of the Act. Further, all the Directors of the
Company have confirmed that they fulfill the criteriaof‘fitand proper' as laid down under IRDAI CG Guidelines and IRDAI CG Regulations.
As per the Insurance Regulatory and Development Authority of India (Remuneration of Non-executive Directors of Insurers)
Guidelines, 2023 dated June 30, 2023 ("the Remuneration Guidelines") issued by IRDAI, the maximum age limit for Non-executive Director(s) shall be 75 years and after attaining the age of 75 years, no person shall continue on the Board of an insurer.
Lalita D. Gupte, Chairperson, Non-executive, Independent Director of the Company had attained the age of 75 years on October 4, 2023. Pursuant to the Remuneration Guidelines, the Company had sought an extension from IRDAI to continue as Chairperson of the Company for one more year with effect from the applicability of the Remuneration Guidelines. IRDAI vide its letter dated August 7, 2023, granted extension of time till June 29, 2024 to continue Lalita D. Gupte as Chairperson of the Board and Non-executive, Independent Director of the Company.
The Board of Directors of the Company, at their Meeting held on April 17, 2024, basis recommendation of the Board Nomination and Remuneration Committee, have approved the appointment of Rakesh Jha (DIN: 00042075), Non-executive, Non-independent Director as Chairperson of the Company with effect from June 30, 2024 or date of IRDAI approval, whichever is later.
Changes in composition of the Board of Directors of the Company
Notes: * Bhargav Dasgupta (DIN: 00047728), vide letter dated September 21, 2023, tendered his resignation, to pursue a career opportunity outside the country.
^ Sanjeev Mantri (DIN: 07192264), basis recommendation of the Board Nomination and Remuneration Committee, was appointed as Managing Director & CEO ("MD & CEO") of the Company (former Executive Director) by the Board of Directors at their meeting held on September 24, 2023 for a period of
November 30, 2028 or date of superannuation, whichever is earlier, subject to approval of the IRDAI and Members of the Company. The Company has received approval from IRDAI for his appointment as MD & CEO of the Company on October 6, 2023. Further, Members of the Company by Postal Ballot approved his appointment as MD & CEO of the Company with effect from December 1, 2023 by way of an Ordinary Resolution, on Friday, November 10, 2023.
# Antony Jacob (DIN: 00210724), basis recommendation of the Board Nomination and Remuneration Committee, was appointed as an Additional Director in the category of Non-executive, Independent Director of the Company by the Board of Directors at their meeting held on December 26, 2023 for a period of upto December 31, 2028. Subsequently, Members of the Company by Postal Ballot approved his appointment as Non-executive, Independent Director with effect from January 1, 2024 by way of a Special Resolution, on Thursday, February 22, 2024.
@ Preeti Reddy (DIN: 07248280), basis recommendation of the Board Nomination and Remuneration Committee, was appointed as an Additional Director in the category of Non-executive, Independent Director of the Company by the Board of Directors at their meeting held on April 17, 2024, for a period of five (5) consecutive years upto
April 16, 2029, subject to approval of Members of the Company. The resolution seeking approval of the Members of the Company for her appointment forms part of the Twenty-Fourth AGM Notice. $ Ashvin Parekh (DIN: 06559989), ceased to be Non-executive,
Independent Director of the Company, with effect from the close of business hours on April 17, 2024, upon completion of his second term as an Independent Director of the Company.
In the opinion of the Board, Non-executive, Independent Director(s) appointed during the year possess high standards of integrity, expertise, experience and proficiency.
Meetings of the Board and its Committees, attendance and constitution of various Committees
The Board has constituted various committees, viz. Board Nomination & Remuneration Committee, Audit Committee, Investment Committee, Risk Management Committee, Policyholder Protection Committee, Corporate Social Responsibility & Sustainability Committee, Stakeholders Relationship Committee and Strategy Committee.
During the year under review, the Company has also constituted Information Technology Strategy Committee for oversight on the core Information Technology & Information Security.
During the year under review, ten (10) Meetings of the Board of Directors of the Company were held.
The details of the Meetings of the Board and its Committees held during FY2024, attendance of Directors/ Committee
Members thereat, constitution of the Board and various
Committees of the Board including name, qualification, field of specialization/core skills/expertise/competence status of Directorship held, etc. and their terms of reference, are provided in the Corporate Governance Report, forming part of (5) consecutive years upto this Report.
Common Directorships
Section 48A of the Insurance Act, 1938 prescribes conditions for appointment/continuation of appointment of common directors between insurance companies and insurance agent, intermediary or insurance intermediaries. As on March 31, 2024, the Company has four (4) Directors, falling within the criteria of common Director viz. Uday Chitale, Ashvin Parekh, Sandeep Batra and Rakesh Jha. (5) consecutive years The Company is in compliance with the applicable provision of the Insurance Act, 1938, other circulars and notifications/ clarification issued by IRDAI in connection with the appointment/ continuation of Common Director.
Declaration of Independence
All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) & (7) of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 16(1)(b) and Regulation 25 of the Listing Regulations, as amended from time to time. All the Independent
Directors have also confirmed that they have complied with
Schedule IV of the Act and the applicable provisions of the Employees Code of Conduct of the Company. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
Retirement by Rotation
In terms of provisions of Section 152 of the Act, Alok Kumar Agarwal, Executive Director (DIN: 03434304) would retire by rotation at the forthcoming AGM and is eligible for re-appointment. Alok Kumar Agarwal has offered himself for re-appointment. A resolution seeking Members approval for appointment of a Director in place of Mr. Alok Kumar Agarwal (DIN: 03434304), who retires by rotation and, being eligible, offers himself for re-appointment, is forming part of the Twenty-Fourth AGM Notice. Alok Kumar Agarwal is not disqualified from being appointed as a Director under Section 164 of the Act.
The profile and particulars of experience, attributes and skills
Alok Kumar Agarwal along with details as required have been disclosed in the annexure to the Twenty-Fourth AGM Notice.
PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES, CHAIRPERSON AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Act, Listing Regulations, IRDAI CG Guidelines, IRDAI CG Regulations and in accordance with Guidance Note on Board Evaluation issued by Securities and Exchange Board of India ("SEBI") on January 5, 2017, an annual performance evaluation had been carried out of the Board as a whole, its Committee(s), individual Director(s) both Executive and Non-executive including Independent Director(s) and Chairperson of the Board. The manner in which the evaluation has been carried out and impact of evaluation, is explained in the Corporate Governance Report forming part of this Report.
CRITERIA FOR APPOINTMENT OF DIRECTOR, KEY MANAGERIAL PERSONNEL AND OFFICIALS WHO MAY BE APPOINTED IN SENIOR MANAGEMENT
The Company has a Board approved criteria for appointment of a Director, Key Managerial Personnel and officialswho may be appointed in Senior Management ("the Criteria"). It includes the criteria for determining qualifications, and independence of a Director, identification of persons who are qualified to become Directors, Key Managerial Personnel and who may be appointed in the Senior Management in accordance with the criteria laid down. The Criteria is hosted on the website of the Company and can be viewed at https:// www.icicilombard.com/docs/default-source/policies-of-the-company/criteria-for-appointment-of-a-director- and key-managerial -personnel-and-official s-who-may-be-appointed-in-senior-management.pdf .
KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel ("KMP") of the Company as on March 31, 2024, are as under:
1. Sanjeev Mantri, Managing Director & CEO^
2. Alok Kumar Agarwal, Executive Director
3. Gopal Balachandran, Chief Financial Officer & Chief Risk
4. Vikas Mehra, Company Secretary
In accordance with the IRDAI CG Guidelines and IRDAI CG Regulations, the Company has following Key Management Persons in addition to aforesaid KMPs:
1. Girish Nayak, Chief-Technology & Heath Underwriting & Claims
2. Jerry Jose, Chief-Human Resources
3. Vinod Mahajan, Chief Investment Officer
4. Prasun Sarkar, Appointed Actuary and Chief Actuarial
Officer
5. Amit Kushwaha, Head-Legal & Chief Compliance Officer
6. Sandeep Goradia, Chief-Corporate Solutions Group
7. Gaurav Arora, Chief - Underwriting & Claims, Property & Casualty
8. Vasundhara Bhonsle, Chief-Customer Support and Operations
9. Anand Singhi, Chief – Retail & Government%
^ The Board of Directors at their Meeting held on September 24, 2023, basis the recommendation of the Board Nomination and Remuneration Committee, approved the appointment of Sanjeev Mantri as Managing Director & CEO of the Company, with effect from December 1, 2023.
% The Board of Directors at their Meeting held on February 24, 2024, basis recommendation of the Board Nomination and Remuneration Committee approved the appointment of Anand Singhi, Chief- Retail and Government as a Key Management Person in terms of IRDAI CG Guidelines, with effect from February 24, 2024.
During the year under review, Bhargav Dasgupta ceased to be KMP pursuant to his resignation. Further, Sanjay Datta, Sheena positive attributes
Kapoor, Birendra Mohanty, Bipin Mundada, Nitin Khanna, Vivek Srivastav and Amar Joshi ceased to be Key Management Persons pursuant to their exit from the Company/changes in organization structure.
In accordance with IRDAI CG Regulations, Gopal Balachandran holding two Key Management Person positions, namely, Chief
Chief RiskFinancialOfficer, has ceased to be Chief
Risk Officer of the Company, with effect from the close of business hours on April 17, 2024 and would continue to be
Chief Financial Officer of the Company.
The Board of Directors at their Meeting held on April 17, 2024, basis recommendation of the Board Nomination & Remuneration Committee, approved appointment of Steve
Dsouza as Chief Risk Officer and a Key Management Person of the Company in terms of IRDAI CG Guidelines and IRDAI CG Regulations, with effect from April 18, 2024. The appointment of Steve Dsouza as Chief Risk Officer was also reviewed by the Risk Management Committee of the Company.
POLIC Y ON A PPOINTMENT A ND COMPENSATION OF EMPLOYEES AND FRAMEWORK FOR REMUNERATION TO NON-EXECUTIVE DIRECTORS
The Company has a Board approved Policy on appointment and compensation of employees and framework for remuneration to Non-executive Directors ("the Policy"). The Policy lay down guidelines on fixing compensation of employees including
KMPs, Senior Management Personnel, Whole-time Directors and Non-executive Directors on of compliance of conditions ofthe Company. The philosophy of the Company on compensation and benefits is based on the ethos of meritocracy and fairness. While the Company will strive to ensure internal and external equity that are consistent with emerging market trends, its business model and affordability based on business performance sets the overarching boundary conditions. The Policy is hosted on the website of the Company and can be viewed at https://www.icicilombard. com/docs/default-source/policies-of-the-company/policy-on-appointment-and-compensation-of-employees-and-framework-for-remuneratio n-to-non-executive -directors.pdf.
DEPOSITS
During the year under review, the Company has not accepted any deposits under Section 73 of the Act.
AUDITORS
Statutory Auditors
Pursuant to the provisions of Section 139 of Act, every company is required to appoint a Statutory Auditor for audit of financial statements of the Company. Further, IRDAI CG Guidelines and IRDAI CG Regulations requires every insurance company to appoint minimum two auditors as Joint Statutory Auditors.
PKF Sridhar & Santhanam LLP, Chartered Accountants (Firm Registration No. 003990S/S200018) and Walker Chandiok
& Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) are the Joint Statutory Auditors of the Company.
The Members of the Company in the Twenty-First AGM held on August 10, 2021, had approved re-appointment of PKF Sridhar & Santhanam LLP, Chartered Accountants as one of the Joint
Statutory Auditors of the Company for a second term of five
(5) consecutive years till the conclusion of Twenty-Sixth AGM. Further, the Members of the Company in the Twenty-Third-AGM held on July 6, 2023, had approved appointment of Walker
Chandiok & Co. LLP, Chartered Accountants for a first five (5) consecutive years, to hold office from the conclusion of Twenty-Third AGM till the conclusion of the Twenty-Eighth AGM of the Company.
Pursuant to the IRDAI CG Guidelines and the applicable provisions of the Act, the Board of Directors of the Company, based on the recommendation of the Audit Committee had approved payment of Rs. 15.5 million as remuneration to each of the Joint Statutory Auditors of the Company for statutory audit of financial statements and financial results of the Company for FY2025 including fee for audit of financial statements of International Financial Services Centre Insurance Office ("IIO"), fees for reviewing the internal financialcontrols of the Company, issuing certificate
Governance prescribed under the Listing Regulations and other matters as prescribed under the Auditing Standards.
Also, the resolution seeking Members approval for fixing audit remuneration of PKF Sridhar & Santhanam LLP, Chartered Accountants and Walker Chandiok & Co. LLP, Chartered
. Accountants, for FY2025 is forming part of Twenty-Fourth AGM Notice.
. Statutory Audit remuneration and other fees
The details of remuneration and other fees of PKF Sridhar & Santhanam LLP, Chartered Accountants and Walker Chandiok & Co. LLP, Chartered Accountants, Joint Statutory Auditors of the Company for FY2024 are provided below:
*Includes Certification fees and fees for audit of the Special Purpose
Interim Financial Statements for the eleven-months period ended February 29, 2024.
Statutory Auditor's Report
The Joint Statutory Auditors' Report for FY2024 on the statements of the Company forms part of this Integrated Annual Report. The Joint Statutory Auditors have expressed their unmodified opinion on the financial statements and their reports do not contain any qualifications,reservations, adverse remarks, or disclaimers.
Secretarial Auditor termof
Pursuant to provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Dholakia & Associates LLP, Practicing Company Secretaries (Firm Registration No. P2014MH034700) for conducting the secretarial audit of the Company for FY2024. The Secretarial Audit Report forms part of this report as Annexure A. There are no qualifications, reservation or adverse remark or disclaimer made by the Secretarial Auditor in their report.
The Annual Secretarial Compliance Report for FY2024 will be submitted to the stock exchanges within the prescribed time and will also be available on the website of the Company at https://www.icicilombard.com/investor-relations .
The Board of Directors at their Meeting held on April 17, 2024, basis recommendation of the Audit Committee, has approved appointment of M/s. Parikh & Associates, Practicing Company Secretaries (Firm Registration No. P1988MH009800), as the Secretarial Auditor of the Company for conducting Secretarial Audit for FY2025. The Company has received consent from M/s. Parikh & Associates along with their eligibility to act as the Secretarial Auditor of the Company for FY2025.
Reporting of Frauds by Auditors
The Company has adequate mechanism and internal checks to detect frauds due to its nature and size of the business. The Company reports such detected frauds after investigation to the Board Committee(s) along with remedial actions taken, if any. During the year under review, there are no reportable frauds committed in the Company by its officers or employees which are identifiedby the Joint Statutory Auditors or Secretarial Auditor other than the fraud reportable to the Central Government under section 143(12) of the Act.
Maintenance of Cost Records
Being an Insurance Company, the Company is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.
COMPLIANCE TO SECRETARIAL STANDARDS
During the year under review, the Company has been in compliance with the applicable Secretarial Standards i.e. SS-1 and SS-2, issued by the Institute of Company Secretaries of India, with respect to Meetings of Board and its Committees and General Meetings respectively. The Company has devised necessary systems to ensure compliance with the applicable provisions of Secretarial Standards.
PARTICULARS OF EMPLOYEES
The statement containing particulars of employees as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as
Annexure B.
The statement containing particulars of employees as required under Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Pursuant to the provisions of the Act, the Annual Report including Financial Statements are being sent to the Members of the Company excluding the aforesaid statement. Further in terms of Section
136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary of the Company at investors@icicilombard.com.
RELATED PARTY TRANSACTIONS
The Company undertakes various transactions with related parties in the ordinary course of business pursuant to the Policy on Related Party Transactions and Framework on Related Party Transactions approved by the Board of Directors of the Company.
All Related Party Transactions that were entered by the Company, during the year under review, were at an arm's length basis, and in the ordinary course of business and are in compliance with the applicable provisions of the Act and the Listing Regulations.
The Audit Committee has granted omnibus approval to enter into different types of Related Party Transactions which are in ordinary course of business, repetitive in nature and in the interest of the Company. Further, all Related Party Transactions entered by the Company were placed before the Audit Committee on a quarterly basis for which the Company had taken omnibus approval from the Audit Committee.
During the year under review, the Company has amended its Policy on Related Party Transactions to align with the existing clauses in the Policy and Framework on Related Party Transactions in order to recalibrate with Listing Regulations and IRDAI Regulations, as amended from time to time. The Policy on Related Party Transactions is hosted on the website of the Company and can be viewed at https://www.icicilombard. com/docs/default-source/policies-of-the-company/policy-on-related-party-transactions.pdf .
Particulars of Contracts or Arrangements with Related Parties
Pursuant to the provisions of Regulation 23 of the Listing Regulations, prior approval of Members is required to be sought by means of an ordinary resolution for related party transactions, which are material, even if such transactions are in the ordinary course of the business of the Company and at an arm's length basis. A transaction with a related party is considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds Rs. 1,000 crore or 10% of the annual consolidated turnover as per the last audited financial statements of the listed entity, whichever is lower.
The Company had taken approval from the Members in the Twenty-Second AGM of the Company held on August 5, 2022, for material Related Party Transactions that the Company may enter in FY2024 and which may exceed the threshold of "material related party transactions" prescribed under the Listing Regulations. All the material Related Party Transactions entered by the Company in FY2024 were within the limit as approved by the Members, in the ordinary course of business and at an arm's length basis.
During the year under review, the Company had not entered into any contract / arrangement / transaction with related parties which is required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
The Company had further taken approval from the Members in the Twenty-Third AGM of the Company held on July 6, 2023, for material Related Party Transactions that the Company may enter in FY2025 and which may exceed the threshold of "material related party transactions" prescribed under the Listing Regulations. All the Related Party Transactions as approved by the Members will be executed at an arm's length basis and in the ordinary course of business of the Company.
The resolution seeking approval of Members of the Company for material Related Party Transactions that the Company may enter in FY2026 and which may exceed the threshold of "material related party transactions" prescribed under the Listing Regulations forms part of the Twenty-Fourth AGM Notice.
As required under Regulation 53(f) read with Para A of Schedule V of the Listing Regulations and Accounting Standard (AS) 18 on Related Party Disclosures, the details of Related Party Transactions entered into by the Company during FY2024 are covered in the Notes to Accounts forming part of the Financial Statements. The Joint Statutory Auditors of the Company have issued an unmodified opinion on the Financial Statements for
FY2024 which includes therein Related Party Transactions and related disclosures thereon.
ANNUAL RETURN
Pursuant to Section 134(3)(a) of the Act, the Annual Return of the Company prepared as per Section 92(3) of the Act for the financial year ended March 31, 2024, is hosted on the website of the Company and can be viewed at https: //www.icicilombard.com/docs/default-source/ shareholding-pattern/annual-return-form-mgt-7-fy2024.pdf. In terms of Rules 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return shall be the prescribed filed timelines.
RISK MANAGEMENT FRAMEWORK
The Company recognizes that risk is an integral element of insurance business and with a view to mitigate risks, the Company has in place Board approved Risk Management Framework.
A strong risk culture is ensured through embedding the principles of Risk Management Framework in strategy and operations. Accordingly, the Company has developed a risk universe, broadly categorised into six distinct groups, namely, Credit Risk, Market Risk, Underwriting Risk, Strategic Risk, Operational Risk and Environmental, Social and Governance Risk.
As part of the Enterprise Risk Management exercise, critical risks along with the detailed mitigation plans are presented to the Risk Management Committee of the Board on a quarterly basis. The risk mitigation plan/s is/are monitored regularly by the Company to ensure timely and appropriate execution. The senior management of the Company is responsible for periodic review of the risk management process to ensure that the process initiatives are aligned to the desired objectives.
The Chief Risk Officer of the Company is responsible for the implementation and monitoring of the Risk Management Framework.
Further insights on the Risk Management Framework have been included as part of the Corporate Governance Report forming part of this Report.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment and is committed to provide a safe environment for all, which is achieved through well-established robust mechanism for redressal of complaints reported under it.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, provides protection against sexual harassment of women at workplace and lays down the guidelines and timelines for the prevention and redressal of complaints pertaining to sexual harassment. Accordingly, the Company has in place the guidelines on prevention of Sexual Harassment at Workplace and a formal process for dealing with complaints of sexual harassment, in compliance with aforesaid Act. The Company ensures that all such complaints are resolved within defined timelines.
Details of complaints are as follows:
*The two complaints pending as on March 31, 2024 were reported in the month of December 2023 and February 2024, respectively. The complaint received in the month of December 2023 was closed as on the date of this report and the necessary action was also taken. The investigation of other complaint received in the month of February 2024 has also been completed and the necessary action is underway, as on the date of this report.
To build awareness in this area, the Company has been conducting induction/refresher programmes on a continuous basis. During the year under review, the Company has organised online training sessions on the topics of Gender Sensitisation and Prevention of Sexual Harassment ("POSH") for its employees.
Internal Committee for redressal of complaints:
The Company has constituted a Committee for redressal and timely management of sexual harassment complaints. The Internal Committee has minimum 50% women representatives. The Internal Committee has a senior woman leader as the presiding officer of the Committee and one external member who is a subject matter expert in this regard.
The Company is in compliance with the provisions relating to the constitution of an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
RURAL AND SOCIAL RESPONSIBILITY
As per the Insurance Regulatory and Development Authority of India (Obligations of Insurers to Rural and Social Sectors), Regulations, 2015, the Company has issued 12,131,203 policies in rural areas and covered 5,978,549 lives falling within the norms of social responsibility. The Company has complied with the obligations laid down by IRDAI.
UNPAID/UNCLAIMED DIVIDEND
As per Section 124 and 125 of the Act read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, any dividends that remain unclaimed/ unpaid for a period of seven years must be transferred to the Investor Education and Protection Fund ("IEPF"). During the year under review, the Company had transferred Rs. 350 and
Rs. 720 to IEPF being unclaimed / unpaid dividend for the financial year 2017, in August 2023 and November 2023, respectively. The details of unclaimed dividends previously declared and paid by the Company along with the due date of transfer to IEPF are covered in the Corporate Governance Report forming part of this Report.
CORPORATE SOCIAL RESPONSIBILITY & SUSTANABILITY
Corporate Social Responsibility ("CSR") & Sustainability has been a long-standing commitment of the Company and forms an integral part of its activities. The Company's CSR
& Sustainability activities primarily focuses on areas like health care, road safety, ensuring environment sustainability, education, skill development and sustainable livelihoods. The CSR & Sustainability activities are largely implemented either directly or through ICICI Foundation for Inclusive Growth. The Company has duly constituted the Corporate Social Responsibility & Sustainability Committee ("CSR & Sustainability Committee") in accordance with the provisions of the Act, IRDAI CG Regulations and IRDAI CG Guidelines. The Company has formulated the Corporate Social Responsibility Policy which sets out the framework guiding the Company's CSR & Sustainability activities. The CSR Policy also sets out the rules that need to be adhered to while taking up and implementing CSR & Sustainability activities. The CSR Policy is hosted on the website of the Company and can be viewed at https://www.icicilombard.com/docs/default-source/ policies-of-the-company/csr-policy.pdf.
The Board of Directors of the Company at their Meeting held on July 18, 2023, based on the recommendation of CSR & Sustainability Committee, had approved the CSR & Sustainability plan for FY2024 of Rs. 365.9 million i.e. 2% of the average net profits of the Company made during three immediately preceding financial years. The Company has chosen specific areas to focus as part of its CSR & Sustainability roadmap. These include health care, road safety, education, environment sustainability and skill development & sustainable livelihoods.
Further, the Board of Directors of the Company, basis the recommendation of CSR & Sustainability Committee had approved modification to the plan for Corporate Social Responsibility and Sustainability Activities for FY2024, through a circular resolution passed on March 28, 2024.
The Company's actual CSR & Sustainability expenditure was
Rs. 370.4 million for FY2024. There are no unspent funds required to be carried forward to succeeding years.
In accordance with the provisions of the Act, the Chief
Financial Officer of the Company has certified that the CSR &
Sustainability spent of the Company for FY2024 were utilised for the purpose and in the manner as approved by the Board of Directors of the Company from time to time. The certificate in this regard was also placed before the Board of Directors at their Meeting held on April 17, 2024.
The Annual Report on CSR & Sustainability activities of the Company for FY2024 forms part of this Report as Annexure C. The Company has carried out Impact assessment of its CSR projects i.e. Ride to Safety, Caring Hands, Niranjali, Solar Panel installations and Healthy Villages, in pursuance of Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended. The executive summary of Impact Assessment Reports are covered in the Annual Report on CSR & Sustainability Activities.
CREDIT RATING
During the year under review, the Company has maintained credit rating of "[ICRA] AAA(Stable)" assigned by ICRA Limited and "CRISIL AAA/Stable" assigned by CRISIL Ratings Limited on Rs. 0.35 billion subordinate debentures of the Company.
The ICRA Limited has reaffirmed Issuer Rating of "[ICRA]
AAA(Stable)" to the Company.
Further, AM Best has affirmed the Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of "bbb+" (Good) to the Company. Concurrently, AM Best has assigned the India National Scale Rating of aaa.IN (Exceptional) to the Company. The outlook assigned to these Credit Ratings
("ratings") is stable. The ratings reflect the Company's balance sheet strength, which AM Best assesses as very strong, as well as strong operating performance, neutral business profile and appropriate enterprise risk management.
BUSINESS RESPONSIBILITY AND SUSTAINBILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Company is required to publish Business Responsibility and Sustainability Report ("BRSR") as part of its Integrated Annual Report and also undertake reasonable assurance on disclosure related to BRSR Core .
The BRSR maps the sustainability disclosure of the Company against the nine principles of the ‘National Guidelines on
Responsible Business Conduct' issued by the Ministry of Corporate Affairs, Government of India. The BRSR Core is a sub-set of the BRSR, consisting of a set of Key Performance Indicators (KPIs) under 9 ESG attributes.
Accordingly, the BRSR and BRSR Core related disclosures of the Company for FY2024 are hosted on the website of the Company and can be viewed on https://www.icicilombard.com/docs/default-source/esg/ icici-lombard-business-responsibility-and-sustainability-reporting-fy2024.pdf.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
The Company considers ESG principles integral to its purpose and actions to benefit the customers, investors, employees, shareholders, communities, and all other stakeholders. Through these efforts, the Company strives to create long-term value for all stakeholders.
The CSR & Sustainability Committee is actively involved in overseeing & monitoring ESG initiatives. The Risk Management Committee focuses on the management of ESG risks. At management level, ESG Steering Committee ensures the overall integration of business activities with ESG objectives set by the Board.
The focus of the Company from an ESG standpoint is towards identifying material ESG issues and take initiatives to address these issues. Some of the focus areas of the Company promoting health and wellbeing, innovation, Digitisation, Diversity and Inclusion, Responsible Investments amongst others.
During the year under review, the Company has adopted Environmental, Social and Governance Policy in supersession of existing Policy on Environment Management. Further the Company also rolled out Supplier Code of Conduct in line with the ESG principles.
The ESG Report highlighting organisation-wide ESG initiatives and disclosures made by the Company for FY2024 are hosted on the website of the Company and can be viewed on https://www.icicilombard.com/docs/default-source/esg/ icici-lombard-environmental-social-and-governance-fy2024. pdf.
INTEGRATED REPORT
The Company has voluntarily adopted the principles and has shifted its corporate reporting journey to Integrated Report as per the International Integrated Reporting Council ("IIRC") framework. The Integrated Report encompasses both financial and non-financial information to enable the Members to take well informed decisions and have a better understanding of the Company's long term perspective. The Company's Integrated
Report is based on six forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social & relationship capital and natural capital.
The Company continues to publish its sixth Integrated Report which forms part of this Integrated Annual Report.
INVESTOR RELATIONS
The Company is committed to achieving excellence in its Investor Relations engagement with both International and Domestic investors. To achieve this goal, the Company continuously adopts emerging best practices in Investor Relations and strives to build relationship of mutual understanding and trust with investor/analysts.
The Managing Director & CEO, Executive Director, Chief
Financial Officer & Chief Risk Officer and other authorised senior management members participate in structured conference calls and periodic investor/analyst interactions including one-on-one/group meeting, investor conferences, and quarterly earnings calls. The transcripts of the quarterly earnings calls, audio recordings, and presentations made are also hosted on the website of the Company and Stock Exchanges where the securities of the Company are listed within the timelines as prescribed under the Listing Regulations.
The Company had also organised an investor/analyst interaction during the year to showcase its Digital initiatives. The focus areas of the above meet included digital ecosystem, digital solutions across the customer lifecycle, holistic risk management solutions and adoption of digital processes across business lines.
The Company ensures that financial and non-financial information is available to all the stakeholders by uploading it on the Company's website and website of the Stock Exchanges where the securities of the Company are listed. The financial information includes Financial Statements, Press Releases, Investor Presentations, Earnings call transcripts, publication of financial results in the newspapers and Annual Report whereas the non-financial information are included as a part of ESG Report, BRSR and BRSR Core, etc.
EVENTS AFTER BALANCE SHEET DATE
There have been no material changes and commitments, affectingthefinancialposition of the Company, between the end of the financial year of the Company to which the balance sheet relates and the date of this report.