ICICI Prudential Life Insurance Company Ltd.
|BSE: 540133||Sector: Financials|
|NSE: ICICIPRULI||ISIN Code: INE726G01019|
|BSE 00:00 | 24 Apr||ICICI Prudential Life Insurance Company Ltd|
|NSE 05:30 | 01 Jan||ICICI Prudential Life Insurance Company Ltd|
|Mkt Cap.(Rs cr)||48,317|
|Mkt Cap.(Rs cr)||48,317|
ICICI Prudential Life Insurance Company Ltd. (ICICIPRULI) - Director Report
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Company director report
ICICI Prudential Life Insurance Company Limited
Your Directors have pleasure in presenting the 18th Annual Report of ICICIPrudential Life Insurance Company Limited (the Company) with the audited statement ofaccounts for the year ended March 31 2018 (FY2018).
Industry in FY2018
The retail weighted received premium (RWRP) for the industry grew 19.2% from ' 532.67billion in the year ended March 31 2017 (FY2017) to ' 634.70 billion in FY2018. Themarket share of private players increased from 53.9% in FY2017 to 56.2% in FY2018.
Company in FY2018
The Company achieved a market share of 11.8% in FY2018 based on RWRP as compared to12.0% in FY2017. The Company's Annualised Premium Equivalent (APE) grew by 17.6% from '66.25 billion in FY2017 to ' 77.92 billion in fY2018 within which the protection APE grewby 71.5% to ' 4.46 billion. The Company is focused on improving its protection business.There was a 36.5% increase in overall assured sum.
Total gross premium collected by the Company grew by 21.1% from ' 223.54 billion inFY2017 to ' 270.69 billion in FY2018. Our continued focus on customer retention hasresulted in increase in retail renewal premium by 23.1% from ' 142.19 billion in FY2017 to' 174.97 billion in FY2018. The 13th month persistency ratio1 alsoimproved from 85.7% in FY2017 to 86.8% in FY2018. The Company's assets under management atMarch 31 2018 was ' 1395.32 billion.
Total expenses increased to ' 34.75 billion in FY2018 as compared to ' 31.60 billion inFY2017. The total cost to total weighted received premium (TWRP2) ratioimproved from 15.1% in FY2017 to 13.7% in FY2018. Profit after tax (PAT) for the Companystood at ' 16.20 billion in FY2018 compared to ' 16.82 billion in FY2017.
Value of New Business grew from ' 6.66 billion in FY2017 to ' 12.86 billion in FY2018representing an increase of 93.1%.
Embedded Value increased from ' 161.84 billion at March 31 2017 to ' 187.88 billion atMarch 31 2018.
A summary of key parameters is as set out below:
^Restated for new business definition of group **Cost/ (Total premium less 90% ofsingle premium)
1 Calculated in accordance with IRDAI circularIRDA/ACT/CIR/035/01/2014 dated January 23 2014
2 TWRP: Total premium less 90% of single premium
OUTLOOK FOR THE INDUSTRY AND THE COMPANY
In FY2018 the Indian economy and capital markets was marginally affected by temporarydisruptions caused after the introduction of Goods and Service Tax (GST). Over the mediumterm the GST is expected to benefit economic activity and fiscal sustainability byeliminating multiple state tax systems drawing informal activity into the formal sectorand expanding the tax base.
Post demonetisation there has been an increase in financialisation of householdsavings and this trend is expected to continue going forward as well. The life insuranceindustry is an important component of financial savings and is expected to gain from thisshift in trend.
Recent events such as shift from physical saving to financial saving digitisation andthe improving customer proposition of insurance products coupled with fundamentalstrengths of the Indian economy (high GDP growth rate high savings and investment ratefavourable demography) are expected to provide a fillip to the growth of the insuranceindustry in India.
The Company would continue to focus on its strategic priorities namely:
Expand our savings business: The Company would continue to focus on growthopportunities in the long term savings business with a customised regional strategy.
Expand our protection business: The Company is focused on expanding protection byoffering protection as an add-on to our savings products across channels penetrating theonline term insurance market and partnering with loan providers to offer coverage againstloans.
Continue to deliver customer value: The Company would continue to focus on deliveringvalue to consumers through competitive customer charges better returns and transparentservice experience.
Strengthen multichannel architecture: The Company would strengthen its multichanneldistribution by non-linear scale up of agency and proprietary sales force leveraging thebancassurance franchise and focusing on quality third party distribution.
Maintain cost efficiency: The Company would focus on cost efficiency and in particularwould leverage the digital platform to improve customer experience and efficiency ofoperations.
Customer retention: The Company would strengthen mechanisms to improve the asset undermanagement (AUM) growth by increasing renewal premium and curtailing surrenders.
Risk calibrated fund performance: The Company has in place a risk and investmentmanagement framework and would endeavour to continue to deliver healthy risk adjustedreturns to customers.
The financial position of the Company remained strong with a solvency margin of 252.5%in FY2018 compared to 280.7% for FY2017 against regulatory requirement of 150%.
The AUM increased to ' 1395.32 billion at March 312018 from ' 1229.19 billion atMarch 31 2017.
The Company reaches its customers through 505 offices in 442 locations at March 312018. On March 31 2018 the Company had 15780 employees and 151563 advisors to cater tothe needs of customers. The Company distributes its products through agents corporateagents banks brokers proprietary sales force (PSF) and online channels.
Broadly all the Company's products can be categorised into either savings orprotection. Savings products are offered on three platforms- linked participating andnon-participating. These platforms differ in terms of choice of asset allocation chargestransparency and surrender penalties. However life cover offered is the same across allsavings products i.e. 10 times annual premium. The exception to this 10 times cover isannuity products.
Protection products are available on retail group and credit life platforms. Theseproducts provide cover for life disability critical illness and accidental death. Theseare pure risk protection low cost products.
DIVIDEND AND DIVIDEND DISTRIBUTION POLICY
The operations have resulted in a profit after tax of ' 16.20 billion as compared to aprofit after tax of ' 16.82 billion for the previous year. The marginal drop in profit isprimarily on account of growth in protection business which has a higher new businessstrain. The Board had approved payment of interim dividend of ' 2.30 per equity share anda special dividend of ' 1.10 per equity share at its Meeting held on October 24 2017.Further the Board at its Meeting held on April 24 2018 has recommended a final dividendof ' 3.30 per equity share (including special dividend of ' 1.10 per equity share). Totaldividend for the year is ' 6.70 per equity share aggregating to ' 9.62 billion for FY2018.
In terms of Regulation 43A of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ('Listing Regulations') theDividend Distribution Policy of the Company is disclosed on the website
The Company has uploaded the details of unpaid and unclaimed dividend on the Company'swebsite: https://www.iciciprulife.com/content/dam/icicipru/about-us/unpaid-dividend/Statement_of_unpaid_dividend.pdf
The Company has settled over 11000 individual mortality claims in FY2018. The claimssettlement ratio for the Company was 97.85%. For non-investigated claims the settlementwas completed within an average turnaround time of 2.99 days from receipt of lastrequirement as compared to the regulatory norm of 30 days.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The provisions of Section 186(4) of the Companies Act 2013 (CA2013) requiringdisclosure in the financial statements of the full particulars of the loans giveninvestment made or guarantee given or security provided and the purpose for which the loanor guarantee or security is proposed to be utilised by the recipient of the loan orguarantee or security are not applicable to an insurance company.
The Company's wholly owned unlisted subsidiary ICICI Prudential Pension FundsManagement Company Limited (PFM) acts as a pension fund manager under the National PensionSystem (NPS) with the objective of providing a strategic platform to leverage thesubstantial pension opportunity in India due to the lack of formal retirement provisionsfor a large segment of the population.
During FY2018 the subscribers' funds managed by PFM have increased by 61.3% from '14414.8 million at March 31 2017 to ' 23255.1 million at March 31 2018. PFM registereda loss of ' 6.6 million (previous year: loss of ' 5.7 million) The overall contribution ofthe subsidiary to the financial results of the Company is not significant currently as itis still scaling up.
The Request for Proposal (RFP) issued by Pension Fund Regulatory and DevelopmentAuthority (PFRDA) in September 2016 for selection of Pension Fund Managers for NPS-PrivateSector expired in October 2017 without any appointments. The PFM continues to operateunder the earlier 2014 appointment and awaits a fresh RFP from PFRDA.
The Company will make available separate audited financial statements of the subsidiarycompany to any Member upon request. These documents/ details are available on theCompany's website (www.iciciprulife.com ) andwill also be available for inspection by any Member of the Company at its RegisteredOffice. A statement containing salient features of the financial statements of thesubsidiary company forms part of the financial statements of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS
There are no significant and/or material orders passed by the Regulators or Courts orTribunals impacting the going concern status of future operations of the Company.
DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL
Changes in the composition of the Board of Directors and other key Managerial Personnel(KMP) during the year
* Subject to the approval of the members at the Company's ensuing Annual GeneralMeeting.
# As per CA2013.
The Board of Directors of the Company at March 31 2018 consisted of twelve Directorsout of which six were independent Directors. All independent Directors have givendeclarations that they meet the criteria of independence as laid down under Section 149 ofthe CA2013 and Regulation 16 of the Listing Regulations.
Separate Meeting of Independent Directors
During FY2018 a separate meeting of the independent Directors was held on April 252017.
Retirement by rotation
In accordance with the provision of Section 152 of the CA2013 Mr. Puneet Nanda (DIN:02578795) and Mr. Sandeep Batra (DIN: 03620913) would retire by rotation at the ensuingAGM. Mr. Puneet Nanda and Mr. Sandeep Batra being eligible have offered themselves forre-appointment.
B S R & Co. LLP bearing registration number 101248W/W-100022 Chartered Accountantsand Walker Chandiok & Co LLP bearing registration number 001076N/N500013 CharteredAccountants were appointed as joint statutory auditors of the Company at the 17thAnnual General Meeting (AGM) held on July 17 2017 to hold office upto the conclusion of19th AGM and 21st AGM of the Company.
The Company has with the approval of its Board of Directors appointed Dr. K RChandratre Company Secretary in Practice to undertake Secretarial Audit of the Companyfor FY2018. The Secretarial Audit Report is annexed herewith as Annexure A. There are noqualifications reservation or adverse remark or disclaimer made by the auditor in thereport.
Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure B.
Particulars of Employees
The statement containing the particulars of employees as required under Section 197(12)of the CA2013 read with Rule 5(2) of the Companies
(Appointment & Remuneration) Rules 2014 is set out in an Annexure and forms partof this Report. In terms of Section 136(1) of CA2013 the Report and the Accounts are sentto the Members excluding the aforesaid Annexure. Any Member interested in obtaining a copyof this Annexure may write to the Company Secretary at the Registered Office of theCompany.
Rural and Social Business
The Company has micro insurance retail products and group term products to cater to theprotection and savings need of the unorganised and economically vulnerable section of thesociety.
The Company has provided risk cover to Self Help Group (SHG) memberspredominantly in the rural areas of Tamil Nadu Maharashtra Karnataka &Rajasthan.These members are a group of micro entrepreneurs having homogeneous social andeconomic background coming together to avail micro credit for financing their small andmicro enterprises.
The Company provides micro insurance savings product at the door step to the teaworkers in Assam.
The Company partners with Micro Finance Institutions/NBFCs and extends groupterm cover to customers for covering their loss of income risk arising out ofunfortunately and untimely demise.
177452 policies were issued in rural areas constituting 21.2 % of total policyissuances. The Company also covered more than 403824 lives of the total lives coveredwithin the norm of 'social sector' business.
Increase in Share Capital
The paid-up capital of the Company increased by ' 1.52 million pursuant to exercise ofstock options granted under the Employee Stock Option Scheme and the paid-up capital was '14.35 billion at March 31 2018.
During the year under review the Company has not accepted any deposits under Section73 of the CA2013.
Corporate Social Responsibility Initiatives
The Corporate Social Responsibility policy as approved by the Board has been hosted onthe Company's website (https://www.iciciprulife.com/about-us/companv-overview/corporate-social-responsibilitv.html).
The Annual Report on Corporate Social Responsibility is annexed herewith as Annexure C.
Particulars of contracts or arrangements with related parties
The particulars of contracts or arrangements entered into by the Company with relatedparties referred to in sub-Section (1) of Section 188 of the CA2013 including certainarm's length transactions under third proviso thereto are disclosed in Form AOC -2appended as Annexure D.
The Company has a Board approved policy on Related Party Transactions which has beenhosted on the website of the Company and can be viewed at
Statement in respect of adequacy of internal financial controls
The Company has established an internal financial control framework comprising internalcontrols over financial reporting operating controls and fraud prevention controls. Theframework is designed to ensure accuracy completeness and reliability of financialrecords orderly and efficient conduct of business and safe guarding of assets as well asprevention and detection of fraud. Key components of the internal financial controlframework include:
Entity level controls: The control environment of the Company relies on a set of EntityLevel Controls (ELCs) which operate at an organisation level and may not be embedded inany single process of the Company. The ELCs set up by the Company include:
1. Corporate governance framework comprising Board and Executives committees foroversight on the management of the Company.
2. Policies commensurate with the Company's size and level of complexity to establishstandards of conduct including code of conduct whistle blower policy work placeharassment conflict of interest insurance awareness and customer education policygrievance redressal policy record maintenance policy and accounting policy etc.
3. Risk and fraud management framework to identify measure monitor and controlvarious risks including operational risk and framework for identifying monitoring of andcontrol over outsourced activities.
4. I ndependent Internal Audit department with oversight from the Audit Committee.
5. Employee management framework comprising of hiring retention training performanceevaluation remuneration structure employee stock options & benefits successionplanning through leadership cover index etc.
6. Framework to ensure compliance to regulations laws including compliancecertification communication of changes in regulations/ laws etc. and litigationmanagement.
7. Budgeting monitoring and reporting of the performance with key performanceindicators.
8. Information and cyber security policy & information security framework alongwith framework to ensure business continuity and disaster recovery.
Operating controls: Comprises of IT and process controls operating at a system/processlevel with the objective of providing assurance at a transaction recording stage. Salientaspects include:
1. The Company has implemented the COSO 2013 framework for ensuring compliance withSection 404 of Sarbanes Oxley Act 2002. All business processes having implication onfinancial results are subject to quarterly reviews. Any material deficiency is discussedat the Audit Committee.
2. The Company has deployed automation in most aspects of transaction processingincluding policy administration investment management actuarial computations expenseprocessing claims management human resource processes and accounting to ensure greatercontrol and efficiency.
3. The Company has in place a robust IT control environment with integrated systemsinterface controls centralised data warehouse spreadsheet controls direct databaseupdate controls and access controls.
4. The Company has a vendor on-boarding process with due diligence risk assessmentdocument review and periodic assessment to ensure controls over third party serviceproviders relevant from a financial reporting perspective. Further the Board RiskManagement Committee has an oversight on implementation of controls and monitorsperformance of the outsourced vendors.
5. The Company ensures controls on safeguarding of assets comprising investment assetsIT assets and other assets.
Review controls: Review control comprises multiple levels of oversight over financialreporting by way of a strong reporting and review framework as follows:
1. The financials prepared are audited by joint statutory auditors and are reviewed byAudit Committee. They are also submitted to IRDAI.
2. The internal audit team exercises independent oversight over operational andfinancial processes and significant observations and recommendations are presented to theAudit Committee. Investment operations is subject to concurrent audit certification on adaily basis and an Investment Risk Management Systems (IRMS) audit on a once in two yearsbasis. Any significant findings in the concurrent audit or IRMS audit are presented to theAudit Committee.
3. The Company has an effective organisation structure which segregates duties amongbusiness groups thereby ensuring orderly and efficient conduct of business. Additionallythe Board has from time to time constituted various committees. These committees areresponsible for specific operational areas formulation of policies and frameworkidentification assessment & monitoring of principal risks in accordance with thepolicies & procedures.
4. Management exercises review control by way of in depth reviews of financials GLbalances suspense and payables liability assumptions information security regulatorycompliance communication and reporting key compliance issues and supervision of riskmanagement function etc. conducted by CFO Appointed Actuary Chief IT & Operationsand Chief Compliance & Risk Officer.
Fraud prevention: The Company has a Board approved fraud risk management policy. TheCompany has an Operational Risk Management Committee (ORMC) which independently monitorsfrauds. The ORMC reports to Executive Risk Committee which in turn reports to Board RiskManagement Committee.
1. The fraud control framework consists of preventive and incident management.Preventive management includes fraud risk assessment for design of processesinvestigation triggers across policy life cycle and proactive use of analytics to identifyfraud patterns. Incident management includes recovery of loss detailed investigation& root cause analysis and fraud incident reporting to BRMC.
2. The Company ensures implementation of controls to prevent repeat incidentsfinancial recovery process and disciplinary action against involved employees. It alsoinitiates actions through law enforcement authorities based on severity of the incident.
3. The Company undertakes several measures from time to time to create awarenessamongst its employees and customers against fraudulent practices.
4. The Company is in compliance with 'Insurance Fraud Monitoring Framework' guidelinesissued by IRDAI.
There is no qualification reservation adverse remark or disclaimer made by theauditors in their report.
Internal audit and compliance framework Internal Audit:
The Company has in place an internal audit framework with a risk based audit approach.The basic philosophy of risk based internal audit is to provide reasonable assurance tothe Board Audit Committee and management about the adequacy and effectiveness of the riskmanagement and control framework in the Company. Review of controls is undertaken throughexecution of internal audits as per risk based audit plan. The internal audit coversauditing of processes transactions and systems. Key audit observations andrecommendations made are reported to the Board Audit Committee every quarter.Implementation of the recommendations is actively monitored.
The Board Audit Committee oversees the compliance framework of the Company. The Companyhas formulated various internal policies/procedures and an employee code of conduct whichgovern day-to-day activities to ensure compliance. The Compliance function disseminatesrelevant laws regulations and circulars related to insurance and anti-money laundering tovarious functions. It also serves as a reference point for the staff of various functionsfor seeking clarifications on applicable laws regulations and circulars issued by theregulatory authorities. The Compliance team also monitors the adequacy of the complianceframework across the Company. Key issues observed as part of this monitoring are reportedto the Board Audit Committee and implementation of recommendations is actively monitored.A compliance certificate signed by the Managing Director & CEO based on thecertification from respective functional heads is placed at the Board Audit Committee ona quarterly basis.
Ind AS Implementation
International Accounting Standard Board (IASB) issued IFRS 17 Insurance Contracts onMay 18 2017 effective mandatorily from January 1 2021. Subsequently InsuranceRegulatory and Development Authority of India (IRDAI) reviewed the Ind AS implementationand noted that Ind AS in its current form is likely to lead a mismatch in asset &liability along with volatility in financial statements of insurance companies withdouble transition. Therefore IRDAI through circular dated June 28 2017 deferred theimplementation of Ind AS for a period of two years with applicability for accountingperiods beginning from April 1 2020.
Further IRDAI through its order dated August 21 2017 constituted a working group onIFRS 17 primarily to review the standard and identify relevant areas/aspects which requiresuitable adoption in Indian context and changes in regulations/guidelines. Pursuant tothis Accounting Standards
Board of ICAI issued the exposure draft of Ind AS 117 Insurance Contracts (Ind ASequivalent standard of IFRS 17) on February 12 2018.
The Company recognises that risk is an integral element of the business and managedacceptance of risk is essential for the generation of shareholder value. The riskgovernance structure of the Company consists of the Board the Board Risk ManagementCommittee (BRMC) the Executive Risk Committee (ERC) and its sub-committees. The Boardapproved risk policy details identification measurement monitoring and control standardsrelating to the various individual risks namely investment (market credit andliquidity) insurance and operational risks.
1. Investment risk
Investment risk is the risk arising out of variations in the level or volatility ofmarket prices of assets and financial instruments including the risk arising from anymismatch between assets and liabilities due to external market and economic factors. TheCompany faces limited liquidity risk due to the nature of its liabilities. The keymitigation approaches for this risk are as follows:
(a) Product approval process: Launching new products can significantly alter the riskprofile of the Company's Balance Sheet. Investment risks inherent in the new products orsignificant modifications to existing products are identified at the product design stageand products are launched only after approval by the ERC.
(b) Asset Liability Management (ALM): The Company has detailed InvestmentSpecifications that govern the investment strategy and limits for each fund depending onthe profile of the liability backed by those assets. For each category of products theInvestment Specifications specify limits to permissible exposures to various assetclasses duration guidelines for fixed income instruments and minimum investment in liquidassets.
(c) Exposure limits have been defined for companies groups and industries inaccordance with IRDAI guidelines and the Company's internal Investment Policy. The Companyrestricts investments primarily to securities rated AA and above.
(d) The Company has a liquidity contingency plan in place.
2. Insurance risk
Insurance risk is the risk arising because of variance to the best estimate or becauseof random fluctuations in the frequency size and timing of insurance liabilities.Insurance risk is composed of the following components: mortality morbidity persistencyand expense risk. These risks are mitigated through:
(a) Product approval process: Insurance risks inherent in the new products orsignificant modifications to existing products are identified at the product design stageand products are launched only after approval by the ERC. The Company in its productdesign incorporates product features and uses appropriate policy wordings to mitigateinsurance risk.
(b) Reinsurance: The Company uses appropriate reinsurance arrangements includingcatastrophe reinsurance to manage insurance risk. The arrangements are with select andfinancially sound reinsurers. The Company's reinsurance exposures are considered andapproved by the ERC periodically.
(c) Underwriting and claims controls: Underwriting and claims policies and proceduresare in place to assess and manage mortality and morbidity risks. The Company seeks tominimise these risks by diversifying its business portfolio and adhering to appropriateand segmented underwriting norms. The Company conducts periodic reviews of bothunderwriting and claims procedures.
(d) Experience analysis: The Company conducts its experience analysis regularly toensure that corrective action can be initiated at the earliest opportunity and thatassumptions used in product pricing reserving and embedded value reporting are in linewith experience. The Company actively monitors its claims experience persistency levelsand expense ratios.
(e) Aligning key performance indicators: The Company uses appropriate key performanceindicators for different levels of hierarchy in sales and operations to align interestsand ensure adequate focus on insurance risk specially persistency and expense.
3. Operational risk:
Operational risk is the risk of loss resulting from inadequate or failed internalprocesses people and systems or from external events.
The Company uses the following approaches to manage the risk:
(a) The Company develops and monitors mitigation plans for high risk items identifiedthrough the Risk Control Self-Assessment (RCSA) done by each business function lossevents and/or audit findings.
(b) The Company continuously monitors the internal loss events and ensures adequatemitigation for high impact events to avoid repeat instances.
(c) The Company actively promotes a risk awareness culture by improving understandingthrough communication. It further engages with the law enforcement agencies to createawareness on various insurance frauds and emerging issues.
(d) Fraud Management: The Company follows both a proactive and reactive approach tomanage fraud. Proactive management is done by using triggers to identify suspected fraudsand through random sample checks. Reactive management is done through incident management.Investigation is done for identification of process/ system failures and/or identificationof responsible internal/external parties. The Company ensures implementation of controlsto prevent repeat incidents financial recovery process and disciplinary action againstinvolved employees in accordance to Malpractice Matrix. It also initiates actions throughlaw enforcement authorities based on severity of the incident.
(e) Outsourcing Risk: Processes of the Company are outsourced as permitted under theregulatory guidelines. The Company carries out required due-diligence for any new activityor vendor empanelment.
(f) Business Continuity Management (BCM): The Company has a BCM framework to ensureresilience and continuity of key products and services at minimum acceptable level toachieve business-as usual presence in the market place and safety of human resources. Thisincludes systems and processes including use of disaster recovery sites and businesscontinuity plans for critical processes which are being tested periodically.
(g) I nformation and Cyber Security: The Company has an information and cyber securityframework that ensures all information assets are safeguarded by establishingcomprehensive management processes throughout the organisation. The Company's controlsinclude deployment of security solutions like firewall intrusion prevention systemanti-malware solution and dynamic URL filtering further a programme for regularvulnerability assessment of critical IT applications and infrastructure.
(h) Whistle-blower policy that facilitates reporting of observed breaches. EmployeeCode of Conduct that is laid out with a malpractice matrix prescribing disciplinary actionincluding caution deterrent action and termination based on the nature and seriousness ofnon-compliant behaviour.
Sexual Harassment Policy
The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 provides protection against sexual harassment of women at the workplace and forthe prevention and redressal of complaints of sexual harassment. The Company has a laiddown policy on sexual harassment at the workplace and has communicated the same to all itsemployees. The Company believes in providing a safe working environment at the workplace.On an ongoing basis the Company creates education & awareness amongst employeesthrough e-learning programmes.
The Company considers its stakeholders as partners in success and remains committed tomaximising stakeholders' value. The Company believes that sound corporate governancemechanism is critical to retain and enhance stakeholders' trust. It is committed toexercise overall responsibilities rigorously and diligently throughout the organisationmanaging its affairs in a manner consistent with corporate governance requirements.
The Company's corporate governance philosophy is based on an effective independentBoard the separation of Board's supervisory role from the executive management. The BoardCommittees generally comprising a majority of independent/non-executive Directors andchaired by independent Directors to oversee critical areas.
Whistle Blower Policy
The Company has formulated a Whistle blower Policy to encourage employees to reportmatters without the risk of subsequent victimisation discrimination or disadvantage. Asper the Policy employees or Directors can raise concerns related to breach of any lawstatute or regulation issues related to accounting policies and procedures actsresulting in financial loss or loss of reputation misuse of office suspected/actualfraud and criminal offences non-compliance to anti-bribery & anti-corruption policyby the Company or its employees to the Board Audit Committee through specified channels.The Policy has been periodically communicated to the employees and also posted on theCompany's intranet and details pertaining to establishment of vigil mechanism is hosted onthe website at https://
Code of Conduct under Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015
The Company has in place a Code of Conduct to Regulate Monitor and Report Trades insecurities by Directors Employees & Connected Persons which is in conformity with theSecurities and Exchange Board of India
(Prohibition of Insider Trading) Regulations 2015. The Code is applicable to theEmployees of the Company Designated Persons and their Immediate Relatives and ConnectedPersons to the extent applicable. The objective of the Code is to prohibit insidertrading in any manner by the Designated Persons and to maintain confidentiality ofunpublished price sensitive information and access to information on a 'need to know'basis.
Code of business conduct and ethics
The Board of Directors has approved a Code of Business Conduct and Ethics for Directorsand employees of the Company. The Code aims at ensuring consistent standards of conductand ethical business practices across the constituents of the Company. The Code lays downthe broad framework of general guiding principles. This Code is available on the websiteof the Company (https://www.iciciprulife.com/about-us/company-overview/board-of-directors.html). Pursuant to the Listing Regulations a confirmation from theManaging Director & CEO regarding compliance with the Code by all the Directors andsenior management forms part of the Annual Report.
Policy for determining Material Subsidiaries
In accordance with the requirements of the Listing Regulations the Company hasformulated a Policy for determining Material Subsidiaries and the same has been hosted onthe website of the Company (https://www .iciciprulife.com/about-us/corporate-policies.html)
Familiarisation Programme for Independent Directors
Independent Directors are familiarised with their roles rights and responsibilities inthe Company as well as with the nature of industry and business model of the Companythrough induction programmes at the time of their appointment as Directors and throughpresentations on economy & industry overview business overview digitisationinitiatives in policy issuance and servicing processes key regulatory developmentsgovernance strategy investment human resource and performance which are made to theDirectors from time to time. The details of the familiarisation programmes have beenhosted on the website of the Company and can be accessed on the link:
CEO / CFO Certification
In terms of the Listing Regulations the certification by the Managing Director &CEO and Chief Financial Officer on the financial statements and internal controls relatingto financial reporting has been obtained.
Board of Directors
The Company's Board is constituted in compliance with the CA2013 in accordance withListing Regulations and IRDAI Corporate governance guidelines 2016. The Board comprisessix Independent Directors two Directors nominated by ICICI Bank Limited one Directornominated by Prudential Corporation Holdings Limited the Managing Director & CEO andtwo Executive Directors. Except the Managing Director & CEO and two ExecutiveDirectors all other Directors including the Chairperson of the Board are Non-ExecutiveDirectors. The Board is responsible for corporate strategy and other responsibilities aslaid down by IRDAI under the Corporate Governance guidelines. The Managing Director &CEO and the Executive Directors oversee implementation of strategy achievement of thebusiness plan and day-to-day operations. There is an appropriate mix of executivenon-executive and independent Directors. None of the Directors are related to any otherDirector or employee of the Company.
The Board functions either as a full Board or through various Committees constituted tooversee specific areas. The Board has constituted Committees namely Board AuditCommittee Board Risk Management Committee Board Investment Committee Board CustomerService & Policyholders' Protection Committee Board Nomination and RemunerationCommittee Board Corporate Social Responsibility Committee Stakeholders RelationshipCommittee With Profits Committee Special Committee and Strategy Committee.
There were seven Meetings of the Board during FY2018 - on April 25 2017 July 252017 October 6 2017 October 24 2017 January 12 2018 January 19 2018 and March 62018. The maximum interval between any two meetings did not exceed 120 days.
The names of the Directors with their qualification and field of specialisation are setout in the following table:
1. Mr. Adrian O'Connor ceased to be a Director with effect from December 13 2017.
2. Mr. Raghunath Hariharan was appointed as a Director with effect from December 142017.
3. Prof. Marti G Subrahmanyam ceased to be an Independent Director with effect fromJuly 26 2017.
4. Ms. Rama Bijapurkar ceased to be an Independent Director with effect from January17 2018.
5. Mr. R. K. Nair has been appointed as an Additional (Independent) Director witheffect from July 25 2017.
6. Mr. Dileep Choksi has been appointed as an Additional (Independent) Director witheffect from January 19 2018.
The attendance of Directors at the Board Meetings during the year are set out in thefollowing table:
1. Mr. Adrian O'Connor ceased to be a Director with effect from December 13 2017.
2. Mr. Raghunath Hariharan was appointed as a Director with effect from December 142017. He has participated in two Meetings through tele-conference.
3. Prof. Marti G. Subrahmanyam ceased to be an Independent Director from close ofbusiness hours on July 25 2017 i.e. with effect from July 26 2017.
4. Ms. Rama Bijapurkar ceased to be an Independent Director from close of businesshours on January 16 2018 i.e. with effect from January 17 2018.
5. Participated in one Meeting through video-conference.
6. Mr. R. K. Nair has been appointed as an Additional (Independent) Director witheffect from July 25 2017. Participated in one Meeting through video-conference.
7. Mr. Dileep Choksi has been appointed as an Additional (Independent) Director witheffect from January 19 2018.
8. Comprises of public limited companies incorporated in India.
9. Comprises private limited companies incorporated in India and foreign companies butexcludes Section 8 companies and not for profit foreign companies.
10. Comprises only Audit Committee and Stakeholders Relationship Committee of Indianpublic limited companies. Figures in parentheses indicate committee chairmanship includingalternate chairmanship.
In terms of the Listing Regulations the number of Committees (Audit Committee andStakeholders Relationship Committee) of public limited companies in which a Director is amember/chairman were within the limits prescribed under Listing Regulations for all theDirectors of the Company. The number of directorships of each independent Director is alsowithin the limits prescribed under Listing Regulations.
The details of Board Committees are as follows:
a) Board Audit Committee
The primary objective of the Committee is to monitor and provide an effectivesupervision of the financial reporting process with high levels of transparencyintegrity and quality of financial reporting. The Committee shall oversee the work ofinternal audit & compliance functions and ensure deployment of policies for aneffective control mechanism including mechanism to address potential conflict of interestamong stakeholders. The Committee has the authority and responsibility to select evaluateand recommend the statutory auditors in accordance with law. The Committee shall ensureindependence of control functions demonstrated by a credible reporting arrangement.
Terms of Reference:
I. Accounts & Audit
Oversee the financial statements financial reporting process statement of cashflow and disclosure of its financial information both on an annual and quarterly basisto ensure that the financial statement is correct sufficient and credible.
Recommend the appointment re-appointment terms of appointment and ifrequired the replacement or removal; remuneration reviewing (with management)performance and oversight of the work of the auditors (internal/ statutory/ concurrent)and to review and monitor the auditor's independence and performance and effectiveness ofaudit process.
Oversight of the procedures and processes established to attend to issuesrelating to maintenance of books of account administration procedures transactions andother matters having a bearing on the financial position of the Company whether raised bythe auditors or by any other person.
Evaluation of internal financial controls and risk management systems.
Discuss with the statutory auditors before the audit commences about the natureand scope of audit as well as have post-audit discussions to address areas of concern.
Approval of payment to statutory auditors and internal auditors or any of itsassociated persons or companies for any other services rendered by them.
Reviewing with the management the annual financial statements and auditor'sreport thereon before submission to the Board for approval with particular reference to:
Matters required to be included in the director's responsibility statement to beincluded in the board's report in terms of clause (c) of sub-Section (3) of Section 134 ofthe CA2013.
Changes if any in accounting policies and practices and reasons for the same.
Major accounting entries involving estimates based on the exercise of judgement bymanagement.
Significant adjustments made in the financial statements arising out of audit findings.
Compliance with listing and other legal requirements relating to financial statementsto the extent applicable.
Approval or any subsequent modification and disclosure of any related partytransactions of the Company. Provided that the Audit Committee may grant omnibus approvalfor related party transactions proposed to be entered into by the Company subject to suchconditions as may be prescribed.
Modified opinion(s) in the draft audit report.
Reviewing with the management the quarterly half-yearly and annual financialstatements before submission to the board for approval.
To the extent applicable review with the management the statement of uses/ enduse/ application of funds raised through an issue (public issue rights issuepreferential issue etc.) and related matter the statement of funds utilised for purposesother than those stated in the offer document/ prospectus/ notice and the report submittedby the monitoring agency monitoring the utilisation of proceeds of a public or rightsissue and making appropriate recommendations to the Board to take up steps in thismatter.
Review of housekeeping items particularly review of suspense balancesreconciliations (including Subsidiary General Ledger (SGL) accounts) and other outstandingassets & liabilities.
Scrutiny of inter-corporate loans and investments if any.
Valuation of undertakings or assets of the Company wherever it is necessary.
Carrying out any other function if any as is mentioned in the terms ofreference of the Audit Committee and any other terms of reference as may be decided by theBoard and/or specified/ provided under the CA2013 or the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended("Listing Regulations") or by any other regulatory authority.
II. Internal Audit
Review the adequacy of internal audit function if any including the structureof the internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit.
Oversee the efficient functioning of the internal audit department and reviewits reports. The Committee would additionally monitor the progress made in rectificationof irregularities and changes in processes wherever deficiencies have come to notice.
Set-up procedures and processes to address all concerns relating to adequacy ofchecks and control mechanisms.
Discussion with internal auditors of any significant findings and follow upthere on.
Review the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the Board.
Review with the management performance of internal auditors and the adequacyof the internal control systems.
Look into the reasons for substantial defaults in the payment if any to thedepositors debenture holders shareholders (in case of nonpayment of declared dividends)and creditors.
Review the functioning of the Whistle Blower/Vigil mechanism.
III. Compliance & Ethics
Review reports on the above and on proactive compliance activities aimed atincreasing the Company's ability to meet its legal and ethical obligations on identifiedweaknesses lapses breaches or violations and the controls and other measures in place tohelp detect and address the same.
Discuss the level of compliance in the Company and any associated risks and tomonitor and report to the Board on any significant compliance breaches.
Supervise and monitor matters reported using the Company's whistle blowing orother confidential mechanisms for employees and others to report ethical and complianceconcerns or potential breaches or violations.
Advise the Board on the effect of the above on the Company's conduct of businessand helping the Board set the correct 'tone at the top' by communicating or supportingthe communication throughout the Company of the importance of ethics and compliance.
Approve compliance programmes reviewing their effectiveness on a regular basisand signing off on any material compliance issues or matters.
Review key transactions involving conflict of interest.
Review the Anti Money Laundering (AML)/Counter - Financing of Terrorism (CFT)policy annually and review the implementation of the Company's AML/CFT programme.
Review compliance of Insurance Regulatory & Development Authority of India(IRDAI) Corporate Governance guidelines.
Monitor the directives issued/ penalties imposed/ penal action taken against theCompany under various laws and statutes and action taken for corrective measures.
Approval of appointment of chief financial officer or any other person headingthe finance function or discharging that function after assessing the qualificationsexperience and background etc. of the candidate.
There were five Meetings of the Board Audit Committee held during FY2018 - on April 242017 June 15 2017 July 24-25 2017 October 24 2017 and January 18-19 2018. Thedetails of the composition of the Committee and attendance at its Meetings are set out inthe following table:
1. Ceased to be a member with effect from July 25 2017. Participated in one Meetingthrough video-conference.
2. Participated in one Meeting through video-conference.
3. Appointed as a member with effect from July 25 2017.
4. Ceased to be a member with effect from December 13 2017.
5. Appointed as a member with effect from December 14 2017.
b) Board Risk Management Committee
The Committee reviews the Risk Management policy of the Company including AssetLiability Management (ALM) to monitor all risks across the various lines of business ofthe Company and establish appropriate systems to mitigate such risks. The Committee alsoreviews the risk appetite and risk profile of the Company. The Committee oversees theeffective operation of the risk management system and advises the Board on key riskissues.
Terms of Reference:
A. Risk Management
i. Assisting the Board in effective operation of the risk management system byperforming specialised analysis and quality reviews;
ii. Maintaining a group wide and aggregated view of the risk profile of the Company inaddition to the individual risk profiles;
iii. Reporting to the Board details of the risk exposures and the actions taken tomanage the exposures set the risk tolerance limits and assess the cost and benefitsassociated with risk exposure and review monitor and challenge where necessary risksundertaken by the Company;
iv. Advising the Board with regard to risk management decisions in relation tostrategic and operational matters such as corporate strategy acquisitions and relatedmatters;
v. Review the Company's risk-reward performance to align with overall policyobjectives;
vi. Discuss and consider best practices in risk management in the market and advise therespective functions;
vii. Maintain an aggregated view on the risk profile of the Company for all categoriesof risk including insurance risk market risk credit risk liquidity risk operationalrisk compliance risk legal risk reputation risk etc.;
viii. Review the solvency position of the Company on a regular basis;
ix. Monitor and review regular updates on business continuity;
x. Formulation of a Fraud monitoring policy and framework for approval by the Board;
xi. Monitor implementation of anti-fraud policy for effective deterrence preventiondetection and mitigation of frauds;
xii. Review compliance with the guidelines on Insurance Fraud Monitoring Frameworkdated January 21 2013 issued by the Authority.
xiii. To carry out any other function if any as prescribed in the terms of referenceof the Risk Management Committee and any other terms of reference as may be decided by theBoard and/or specified/ provided under the CA2013 or the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended orby any other regulatory authority.
B. Asset Liability Management (ALM)
i. Formulating and implementing optimal ALM strategies both at the product andenterprise level and meeting risk versus reward objectives and ensuring they remain withinacceptable monitored tolerances for liquidity solvency and the risk profile of theentity;
ii. Reviewing the Company's overall risk appetite and laying down the risk tolerancelimits; including annual review of strategic asset allocation;
iii. Monitoring risk exposures at periodic intervals and revising strategies asappropriate including those for ALM;
iv. Placing information pertaining to ALM before the Board at periodic intervals;
v. Setting the risk/reward objectives i.e. the risk appetite of the Company informed byassessment of policyholder expectations and other relevant factors;
vi. Quantifying the level of risk exposure (eg. market credit and liquidity) andassessing the expected rewards and costs associated with the risk exposure;
vii. Ensuring that management and valuation of all assets and liabilities comply withthe standards prevailing legislation and internal and external reporting requirements;
viii. Reviewing key methodologies and assumptions including actuarial assumptions usedto value assets and liabilities;
ix. Managing capital requirements at the Company level using the regulatory solvencyrequirements; and
x. Reviewing approving and monitoring capital plans and related decisions over capitaltransactions.
xi. To carry out any other function if any as prescribed in the terms of reference ofthe Risk Management Committee and any other terms of reference as may be decided by theBoard and/or specified/ provided under the CA2013 or the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended orby any other regulatory authority.
There were four Meetings of the Board Risk Management Committee held during FY2018 - onApril 24 2017 July 25 2017 October 18 2017 and January 18 2018. The details of thecomposition of the Committee and attendance at its Meetings are set out in the followingtable:
1. Appointed as a Chairman with effect from July 25 2017.
2. Ceased to be a member with effect from July 25 2017.
3. Ceased to be a member with effect from close of business hours on January 16 2018.
4. Ceased to be a member with effect from December 13 2017.
5. Appointed as a member with effect from December 14 2017.
c) Board Investment Committee
The Investment Committee assists the Board in fulfilling its oversight responsibilityfor the investment assets of the Company. The Committee is responsible for formulating theoverall investment policy and establishing a framework for its investment operations withadequate controls. The Committee also monitors investment performance against theapplicable benchmarks and provide guidance for protection of shareholders' andpolicyholders' funds.
Terms of Reference:
Responsible for the recommendation of the Investment Policy and laying down ofthe operational framework for the investment operations of the Company. The InvestmentPolicy and operational framework should inter alia focus on a prudential asset liabilitymanagement supported by robust internal control systems; and encompass aspects concerningliquidity for smooth operations compliance with prudential regulatory norms oninvestments risk management/mitigation strategies to ensure commensurate yield oninvestments in line with policyholders' reasonable expectations and above all protectionof policyholders' funds.
Put in place an effective reporting system to ensure compliance with theInvestment Policy set out by it apart from Internal/Concurrent Audit mechanisms for asustained and on-going monitoring of Investment Operations.
To submit a report to the Board on the performance of investments at least on aquarterly basis and provide an analysis of its investment portfolio (including with regardto the portfolio's safety and soundness) and on the future outlook.
The committee should independently review its investment decisions and ensurethat support by the internal due diligence process is an input in making appropriateinvestment decisions.
To carry out any other function if any as prescribed in the terms of referenceof the Board Investment Committee and any other terms of reference as may be decided bythe Board and/or specified/provided under the CA2013 or by any other regulatory authority.
There were four Meetings of the Board Investment Committee held during FY2018 - onApril 24 2017 July 24 2017 October 18 2017 and January 18 2018. The details of thecomposition of the Committee and attendance at its Meetings are set out in the followingtable:
As per IRDAI Corporate Governance guidelines 2016 Board Investment Committeeshall also have
Appointed Actuary Chief Investment Officer Chief Financial Officer and Chief RiskOfficer as members.
1. Appointed as a Chairman with effect from July 25 2017.
2. Ceased to be a member with effect from July 25 2017.
3. Appointed as a member with effect from July 25 2017. Participated in one meetingthrough tele-conference.
4. Ceased to be a member with effect from December 13 2017.
5. Appointed as a member with effect from December 14 2017.
d) Board Customer Service & Policyholders' Protection Committee
The Board Customer Service & Policyholders' Protection Committee will assist theBoard to protect the interests of the policyholders and improve their experiences indealing with the Company at all stages and levels of their relationship with the Company.In this connection the Committee aims to upgrade and monitor policies and procedures forgrievance redressal and resolution of disputes disclosure of 'material information' tothe policy holders and compliance with the regulatory requirements.
Terms of Reference:
Putting in place proper procedures and effective mechanism to address complaintsand grievances of policyholders including mis-selling by intermediaries.
Ensure compliance with the statutory requirements as laid down in the regulatoryframework pertaining to policyholders' protection.
Review of the mechanism at periodic intervals.
Ensure adequacy of disclosure of 'material information' to the policyholders.These disclosures shall for the present comply with the requirements laid down by theAuthority both at the point of sale and at periodic intervals.
Review the status of complaints of the policyholders and take steps to reducethese complaints at periodic intervals.
Provide the details of grievances at periodic intervals in such formats as maybe prescribed by the Authority.
Provide details of insurance ombudsmen to the policyholders.
Shape the customer service philosophy and policies of the organisation based onthe overall environment in the financial services industry.
Oversee the functions of the customer service council.
Review measures for enhancing the quality of customer service.
Provide guidance to improve in the overall satisfaction level of customers.
Adopt standard operating procedures to treat the customer fairly includingtime-frames for policy and claims servicing parameters and monitoring implementationthereof.
Put in place a framework for review of awards given by InsuranceOmbudsman/Consumer Forums. Analyse the root cause of customer complaints identify marketconduct issues and advise the management appropriately about rectifying systemic issuesif any.
Review all the awards given by Insurance Ombudsman/Consumer Forums remainingunimplemented for more than three (3) months with reasons therefor and report the same tothe Board for initiating remedial action where necessary.
Review of Claims Report including status of Outstanding Claims with ageing ofoutstanding claims.
Reviewing Repudiated claims with analysis of reasons.
Status of settlement of other customer benefit payouts like Surrenders Loan andPartial withdrawal requests etc.
Review of unclaimed amounts of Policyholders as required under the Circularsand guidelines issued by the Authority.
The Company has a Grievance Redressal Committee (GRC). The key discussions of the GRCMeeting are put up at the Board Customer Service & Policyholders' Protection Committeefor information. The GRC is formed to provide effective grievance redressal to thepolicyholders. The GRC consists of two external members and three members from seniormanagement team of the Company. Mr. R. Narayanan an external member chairs the GRC. Aspart of the grievance redressal mechanism the GRC constituted as the final authority toaddress the policyholders' grievances before approaching the Regulator and the Ombudsmanoffice. The GRC meets on a quarterly basis with the following terms of reference:
a) Evaluate feedback on quality of customer service and claims experience.
b) Review and approve representations received on claims repudiations.
c) Ensure that the Company follows all prescribed regulatory requirements onpolicyholder service.
d) Submit report on its performance to the Customer Service & PolicyholderProtection Committee (CS & PPC) on a quarterly basis.
There were four Meetings of the Board Customer Service & Policyholders ProtectionCommittee held during FY2018 - on April 25 2017 July 24 2017 October 24 2017 andJanuary 17 2018. The details of the composition of the Committee and attendance at itsMeetings are set out in the following table:
1. Appointed as a member with effect from July 25 2017.
2. Ceased to be a member with effect from December 13 2017.
3. Appointed as a member with effect from December 14 2017.
e) Board Nomination and Remuneration Committee
The Board Nomination & Remuneration Committee shall assist the Board to formulatepolicies relating to the composition & remuneration of the directors key managerialpersonnel other employees consistent with criteria approved by the Board. The Committeeshall coordinate and oversee the self-evaluation of the performance of the Board andsuccession planning for senior management. The Committee shall ensure that the Boardcomprises competent and qualified Directors.
Terms of Reference:
To formulate the criteria for determining qualifications positive attributesand independence of a director and recommend to the Board a policy relating to theremuneration for the directors key managerial personnel and other employees.
To consider and approve employee stock option schemes and to administer andsupervise the same.
To devise a policy on diversity of the Board.
To identify persons who are qualified to become directors and who may beappointed in senior management in accordance with the criteria laid down recommend to theBoard their appointment and removal and formulate a criteria for evaluation of everydirector's performance.
To scrutinise the declarations of intending applicants before the appointment/re-appointment/ election of directors by the shareholders at the annual general meeting;and to scrutinise the applications and details submitted by the aspirants for appointmentas the key managerial personnel.
To consider whether to extend or continue the term of appointment of theindependent director on the basis of the report of performance evaluation of independentdirectors.
To ensure that the level and composition of remuneration is reasonable andsufficient to attract retain and motivate directors of the quality required to run theCompany successfully.
To ensure that relationship of remuneration to performance is clear and meetsappropriate performance benchmarks.
To approve the compensation programme and to ensure that remuneration todirectors key managerial personnel and senior management involves a balance between fixedand incentive pay reflecting short and long term performance objectives appropriate to theworking of the Company and its goals.
To ensure that the proposed appointments/ re-appointments of key managerialpersonnel or directors are in conformity with the Board approved policy on retirement/superannuation.
To carry out any other function if any as prescribed in the terms of referenceof the Board Nomination and Remuneration Committee and any other terms of reference as maybe decided by the Board and/or specified/provided under the CA2013 or the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 as amended or by any other regulatory authority.
There were four Meetings of the Board Nomination & Remuneration Committee heldduring FY2018 - on April 24 2017 July 25 2017 January 17 2018 and March 6 2018. Thedetails of the composition of the Committee and attendance at its Meetings are set out inthe following table:
1. Appointed as a member with effect from July 25 2017 and Chairman with effect fromJanuary 17 2018.
2. Ceased to be a member with effect from close of business hours on January 16 2018.
3. Ceased to be a member with effect from July 25 2017.
4. Participated in one meeting through video-conference.
5. Ceased to be a member with effect from December 13 2017.
6. Appointed as a member with effect from December 14 2017. Participated in onemeeting through tele-conference.
f) Board Corporate Social Responsibility (CSR) Committee
The purpose of the Committee is to formulate and recommend to the Board the CSR policyof the Company. It will also formulate the annual CSR plan and monitor the CSR activitiesand compliance with the CSR policy from time to time. Corporate Social ResponsibilityPolicy of the Company as per Section 135 of the CA2013 is put up on the Company's website.
Terms of Reference:
To formulate and recommend to the Board a Corporate Social ResponsibilityPolicy which shall indicate the activities to be undertaken by the Company.
To recommend the amount of expenditure to be incurred on the Corporate SocialResponsibility activities.
To monitor the Corporate Social Responsibility Policy of the Company from timeto time.
There were two Meetings of the Board Corporate Social Responsibility Committee heldduring FY2018 - on April 25 2017 and January 17 2018. The details of the composition ofthe Committee and attendance at its Meetings are set out in the following table:
1. Appointed as a member with effect from July 25 2017.
2. Ceased to be a member with effect from December 13 2017.
3. Appointed as a member with effect from December 14 2017.
Note: Mr. N. S. Kannan ceased and Mr. Sandeep Batra was appointed as a member of theCommittee with effect from April 24 2018.
g) Stakeholders Relationship Committee
Terms of reference:
Consider and review redressal and resolutions of the grievances of the securityholders of the Company including those of shareholders debenture holders and othersecurity holders.
Approval and rejection of transfer and transmission of shares or securitiesincluding preference shares bonds debentures and securities.
Approval and rejection of requests for split and consolidation of sharecertificates.
Approval and rejection of issue of duplicate share issued from time to time.
Redemption of securities and the listing of securities on stock exchanges.
Allotment of shares and securities.
Any other activities which are incidental or ancillary thereto.
There were four Meetings of the Stakeholders Relationship Committee held during FY2018- on April 25 2017 July 24 2017 October 23 2017 and January 17 2018. The details ofthe composition of the Committee and attendance at its Meetings are set out in thefollowing table:
Ms. Vyoma Manek Company Secretary acts as the Compliance Officer of the Company inaccordance with the requirements of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015. The total number of complaintsfrom shareholders in fiscal 2018 was 442 and 441 complaints have been resolved. At March31 2018 1 complaint was pending which was responded to within timeline.
h) With Profits Committee Terms of reference:
Maintaining the asset shares at policy level and ensuring that only theportion of expenses representing this business shall be allocated and interest ratecredits to these asset shares represent the underlying assets of these funds.
Determining the asset share for each product in accordance with the guidance orpractice standards etc. issued by the Institute of Actuaries of India.
Providing approval for the detailed working of the asset share the expenseallowed for the investment income earned on the fund etc. which were represented in theasset share.
There was one Meeting of the With Profits Committee held during FY2018 on April 242017. The details of the composition of the Committee and attendance at its Meeting areset out in the following table:
* As per IRDAI regulations With Profits Committee shall also have an IndependentActuary and Appointed Actuary as members.
1. Appointed as a member with effect from July 25 2017.
2. Ceased to be a member with effect from December 13 2017.
3. Appointed as a member with effect from December 14 2017.
i) Special Committee
The Board of Directors at its Meeting held on July 25 2017 had constituted a SpecialCommittee to consider the proposal on acquisition of policyholders' liabilities and assetsof Sahara India Life Insurance Company Limited. The said Committee comprised Mr. M SRamachandran - Chairman Mr. N. S. Kannan Mr. Adrian O'Connor Mr. Sandeep Bakhshi andMr. Sandeep Batra. The Committee met once during the year on July 28 2017.
Subsequently since the role and objectives of the Special Committee were completed theCommittee stood dissolved.
j) Strategy Committee
The Board of Directors at its Meeting held on January 19 2018 had constituted aStrategy Committee to consider and evaluate any combination arrangement transfer ofassets acquisition divestiture and any other strategic initiative and recommend suchproposals to the Board of Directors. The said Committee comprised Mr. R. K. Nair -Chairman Mr. N. S. Kannan Mr. Raghunath Hariharan Mr. Sandeep Bakhshi Mr. Puneet Nandaand Mr. Sandeep Batra. The meeting for this Committee was not convened in the financialyear ended March 31 2018.
Criteria for appointment of Directors & Senior Management
The Company has a well-defined Policy for determining criteria for appointment ofDirectors & Senior Management personnel.
The Company already has in place a Compensation & Benefits Policy (CompensationPolicy) applicable to Wholetime Directors (WTDs) Key Managerial Personnel (KMP) SeniorManagerial Personnel (SMP) and other employees.
Further details with respect to the Compensation Policy are provided under the sectiontitled "Compensation Policy and Practices".
Details of Remuneration paid to Whole Time Directors
The Board Nomination and Remuneration Committee (BNRC) determines and recommends to theBoard the remuneration including performance bonus and perquisites payable to the WholeTime Directors.
The following table sets out the details of remuneration (including perquisites andretiral benefits) paid to whole time Directors for fiscal 2018:
Note: For the year-ended March 31 2018 the numbers indicated are the amounts paid/options granted during the year FY2018 as per IRDAI approvals.
1 The variable pay figure includes deferred variable pay of previousyears as approved by IRDAI
2 Allowances and perquisites exclude stock options exercised duringfiscal 2018 which does not constitute remuneration paid to the Whole Time Directors forfiscal 2018.
3 Pursuant to approval of shareholders the Bank issued bonus sharesin June 2017 accordingly the above ICICI Bank stock options have been adjusted withincrease of one option for every ten outstanding options and the exercise price isproportionately adjusted.
Perquisites (evaluated as per Income-Tax rules wherever applicable and otherwise atactual cost to the Company) such as the benefit of the gas electricity furnishing clubfees group insurance use of car and telephone at residence or reimbursement of expensesin lieu thereof medical reimbursement leave and leave travel concession educationbenefits provident fund superannuation fund and gratuity were provided in accordancewith the scheme(s) and rule(s) applicable from time to time.
Details of Remuneration paid to non-executive Directors
As provided in the Articles of Association of the Company the fees payable to thenon-executive independent Directors for attending a Meeting of the
Board or Committee thereof is decided by the Board of Directors from time to timewithin the limits prescribed by the CA2013. For FY2018 the Company has paid ' 100000 assitting fees for each Meeting of Board and ' 20000 as sitting fees for each Meeting ofCommittee attended. This amount is within the limits prescribed as per Rule 4 of Companies(Appointment & Remuneration) Rules 2014 of the CA2013.
The members of the Company at the Annual General Meeting held on July 17 2017 haveapproved the payment of profit related commission upto ' 750000 every year to eachnon-executive independent Director of the Company in proportion with their tenure foreach year effective from financial year ended March 31 2017. The payments is subject tothe regulatory provisions applicable to the Company. Sitting fees paid to IndependentDirectors are outside the purview of the above limits.
The details of the sitting fees and commission paid are as below:
Sitting fees paid to Independent Directors during the financial year ended March 312018:
1. Ceased to be an Independent Director with effect from July 26 2017.
2. Ceased to be an Independent Director with effect from January 17 2018.
3. Appointed as an Additional (Independent) Director with effect from July 25 2017.
4. Appointed as an Additional (Independent) Director with effect from January 19 2018.
* As per requirements of IRDAI regulations Mr. N. M. Govardhan being an IndependentActuary is required to be a member of the With Profits Committee and is paid fees of '100000 for attending the Meeting.
Commission paid to Independent Directors in the financial year ended March 31 2018:
* Proportionately paid in accordance with the tenure as an Independent Director of theCompany.
A provision of ' 44.98 lakhs is made in the financial statement ending March 31 2018.
Remuneration disclosures pursuant to IRDAI guidelines
Pursuant to IRDAI guidelines on Remuneration of Non-Executive Directors and ManagingDirector/Chief Executive Officer/Wholetime Directors of Insurers (IRDAI Guidelines) issuedvide Reference No. IRDA/F&A/ GDL/LSTD/155/08/2016 dated August 5 2016 requires theCompany to make following disclosures on remuneration on an annual basis in their AnnualReport:
COMPENSATION POLICY AND PRACTICES
(A) Qualitative Disclosures
a. Information relating to the design and structure of remuneration processes and thekey features and objectives of remuneration policy.
Name composition and mandate of the main body overseeing remuneration
The Board Nomination and Remuneration Committee (BNRC/ Committee) is the body whichoversees the remuneration aspects. The functions of the Committee include recommendingappointments of Directors to the Board identifying persons who are qualified to becomeDirectors and who may be appointed in senior management in accordance with the criterialaid down and recommending to the Board their appointment and removal formulate acriteria for the evaluation of the performance of the Wholetime/independent Directors andthe Board and to extend or continue the term of appointment of independent Director on thebasis of the report of performance evaluation of independent Directors recommending tothe Board a policy relating to the remuneration for the Directors Key ManagerialPersonnel and other employees recommending to the Board the remuneration (includingperformance bonus and perquisites) to Wholetime Directors (WTDs) commission and feepayable to non-executive Directors subject to applicable regulations approving the policyfor and quantum of bonus payable to the members of the staff including senior managementand key managerial personnel formulating the criteria for determining qualificationspositive attributes and independence of a Director framing policy on Board diversityframing guidelines for the Employees Stock Option Scheme (ESOS) and decide on the grant ofthe Company's stock options to employees and WTDs of the Company.
External consultants whose advice has been sought the body by which they werecommissioned and in what areas of the remuneration process
The Company did not take advice from an external consultant on any area of remunerationduring the year ended March 31 2018.
Scope of the Company's remuneration policy (e.g. by regions business lines) includingthe extent to which it is applicable to foreign subsidiaries and branches
The Compensation Policy of the Company as last amended and approved by the bNrC and theBoard at its Meeting held on April 25 2017 which covers all employees of the Company.
Type of employees covered and number of such employees
All employees of the Company are governed by the compensation policy. The total numberof permanent employees governed by the compensation policy of the Company at March 312018 was 15780.
Key features and objectives of remuneration policy
The Company has under the guidance of the Board and the BNRC followed compensationpractices intended to drive meritocracy within the framework of prudent risk management.This approach has been incorporated in the Compensation Policy the key elements of whichare given below:
Effective governance of compensation
The BNRC has oversight over compensation. The Committee defines Key PerformanceIndicators (KPIs) for the Organisation and the performance threshold for bonus based onthe financial and strategic plan approved by the Board. The KPIs include both quantitativeand qualitative aspects. The BNRC assesses organisational performance as well as theindividual performance of WTDs and equivalent positions. Based on its assessment it makesrecommendations to the Board regarding compensation for WTDs and equivalent positions andbonus for employees including senior management and key management personnel.
Alignment of compensation philosophy with prudent risk taking
The Company seeks to achieve a prudent mix of fixed and variable pay with a higherproportion of variable pay at senior levels. Compensation is sought to be aligned to bothfinancial and non-financial indicators of performance including aspects like riskmanagement and customer service. In addition the Company has an employee stock optionscheme aimed at aligning compensation to long term performance through stock option grantsthat vest over a period of time.
Whether the BNRC reviewed the Company's remuneration policy during the past year andif so an overview of any changes that were made
The Compensation & Benefits Policy on remuneration of Non-executive Directors andManaging Director/Chief Executive Officer/Wholetime Directors of Insurers was reviewedamended and approved by the Board of Directors held April 25 2017.
Description of the ways in which current and future risks are taken into account in theremuneration processes
To ensure effective alignment of compensation with prudent risk taking theCompany shall take into account adherence to the risk framework to ensure remuneration isadjusted for all types of risks in conjunction with other pre-defined performanceobjectives. Remuneration payout shall be sensitive to the time horizon of the risksinvolved and symmetric to risk outcomes.
Compensation is aligned to both financial and non-financial indicators ofperformance including controls like risk management process perspective customerperspective and others.
Prudent behaviour is assessed through a Good Order Index for senior managementlevel employees.
These business objectives are balanced in nature and comprise a holistic mix offinancial customer people and process/quality and compliance objectives.
Acts of gross negligence and integrity breach are covered under the purview ofthe compensation policy.
The deferred part of the variable pay (performance bonus) will be subject tomalus under which the Company will prevent vesting of all or part of the variable pay inthe event of an enquiry determining gross negligence or integrity breach.
The quantum of bonus does not exceed a certain percentage (as stipulated inCompensation policy) of total fixed pay in a year for Wholetime Directors if the quantumof bonus exceeds a pre-defined threshold percentage of the total fixed pay a part of thebonus is deferred and paid over a period.
Description of the ways in which the Company seeks to link performance during aperformance measurement period with levels of remuneration
The Company follows a philosophy of meritocracy which is the relative differentiationof employees based on performance delivered. The design of the variable pay is linked tothe individual employee's performance rating which is arrived at basis assessment ofperformance deliverec against a set of pre-defined performance objectives. Theseobjectives are balanced in nature and comprise a holistic mix of financial customerpeople and process/quality and compliance objectives. To ensure effective alignment ofcompensation with prudent risk parameters the Company will take into account various riskparameters along with other pre-defined performance objectives of the Company. Prudentbehavior is assessed through a Good Order Index for middle and senior management levelemployees.
(B) Quantitative disclosures
The following table sets forth for the period indicated the details of quantitativedisclosure for remuneration of Wholetime Directors (including MD & CEO)
1 Fixed pay includes basic salary supplementary allowancessuperannuation contribution to provident fund and gratuity fund by the Company.
2 For the year ended March 31 2018 variable pay and share-linkedinstruments represent amounts paid/options during the year FY2018 as per IRDAI approval.
3 The table excludes special grant of stock options granted in FY2016approved by IRDAI on June 3 2016 aggregating to 1100000 for Sandeep Bakhshi 478500for Puneet Nanda and 404250 for Sandeep Batra.
Note: Pursuant to approval of shareholders the Bank issued bonus shares in June 2017accordingly the above ICICI Bank stock options have been adjusted with increase of oneoption for every ten outstanding options and the exercise price is proportionatelyadjusted.
Disclosures required with respect to Section 197(12) of the CA2013
The ratio of the remuneration of each Director to the median employee's remunerationand such other details in terms of Section 197(12) of the CA2013 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
(i) The ratio of the remuneration of each director to the median remuneration of theemployees who are part of annual bonus plan of the Company for the financial year
(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year
The percentage increase in remuneration of Whole Time Directors Chief FinancialOfficer and Company Secretary ranged between 14% to 19%.
(iii) The percentage increase in the median remuneration of employees who are part ofannual bonus plan in the financial year
The percentage increase in the median remuneration of employees who are part of annualbonus plan in the financial year was around 9.0%.
(iv) The number of permanent employees on the rolls of Company
The number of employees as mentioned in the Section on 'Management's Discussion &Analysis' is 15780.
(v) The explanation on the relationship between average increase in remuneration andcompany performance
The Company's philosophy on compensation and benefits is based on the ethos ofmeritocracy. The twin pillars of the performance management system and talent managementsystem are closely intertwined with the compensation and benefits policy of the Company.While the Company aims to ensure internal and external equity consistent with emergingmarket trends the Company's business model and affordability based on businessperformance sets the overarching boundary conditions. The Board sets and approves the KeyPerformance Indicators of the Company based on the financial and strategic plan. The BoardKPIs are balanced in nature and include both quantitative and qualitative aspects. Toensure effective alignment of compensation with prudent risk parameters the KPIs comprisea holistic mix of financial customer people and process/quality and complianceobjectives. The BNRC assesses organisational performance as well as the individualperformance of WTDs against the set KPIs at the Company level and at the individual level.Based on its assessment the BNRC recommends to the Board the compensation proposal forWTDs and the compensation proposal for employees.
(vi) Comparison of the remuneration of the Key Managerial Personnel (KMP) against theperformance of the Company For the FY2018 the KMPs were paid around 0.74% of the PAT.
(vii)Variations in the market capitalisation of the company price earnings ratio atthe closing date of the current financial year and previous financial year and percentageincrease or decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies
(viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration
The average percentage increase in the salaries of total employees other than the KeyManagerial Personnel for fiscal 2018 was around 9.0% while the average increase in theremuneration of the Key Managerial Personnel was in the range of 14% to 19%.
(ix) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company
The ratio of the remuneration of each KMP (as per Companies Act 2013) to the PAT ofthe Company is given below:
(x) The key parameters for any variable component of remuneration availed by thedirectors
The Compensation & Benefits Policy applicable to Wholetime Directors KeyManagerial Personnel (KMP) Senior Managerial Personnel (SMP) and other employees is inline with the guidelines issued by IRDAI on Remuneration of Non-executive Directors andManaging Director/Chief Executive Officer/Wholetime Directors of Insurers and in line withICICI Group norms.
These KPIs of the Organisation and Wholetime Directors in addition to financialparameters include parameters related to quality and health of the business. To ensureeffective alignment of compensation with prudent risk parameters the Company takes intoaccount various risk parameters along with other pre-defined performance objectives of theCompany. At the end of the financial year the performance of the Company as well asperformance of each WTD based on their respective KPI(s) is presented to the BNRC. Basedon the performance assessment by the BNRC the variable component of the remunerations forthe WTDs is recommended to and approved by the Board.
(xi) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year
(xii) Affirmation that the remuneration is as per the remuneration policy of theCompany
Performance evaluation of Board Committees and Directors
The Company with the approval of its Board Nomination & Remuneration Committee hasput in place an evaluation framework for evaluation of the Board Directors andChairperson. The Board also carries out an evaluation of the working of its Committees.
The evaluations for the Directors the Board and the Chairperson of the Board wereundertaken through circulation of three questionnaires one for the Directors one for theBoard and one for the Chairperson of the Board. The performance of the Board was assessedon select parameters related to roles responsibilities and obligations of the Board andfunctioning of the Committees including assessing the quality quantity and timeliness offlow of information between the Company management and the Board that is necessary for theBoard to effectively and reasonably perform their duties. The evaluation criteria for theDirectors was based on their participation contribution and offering guidance to andunderstanding of the areas which were relevant to them in their capacity as members of theBoard. The evaluation criteria for the Chairperson of the Board besides the generalcriteria adopted for assessment of all Directors focused incrementally on leadershipabilities effective management of meetings and preservation of interest of stakeholders.The evaluation process for Wholetime Directors is further detailed under the Sectiontitled "Compensation Policy and Practices."
Employee Stock Option Scheme (ESOS)
The Company granted options to its employees under its Employee Stock Option Schemeprior to listing since approval of its Employee Stock Option Scheme - 2005. This pre-IPOscheme shall be referred to as 'Scheme'. The Scheme has six tranches namely Founder12004-05 2005-06 2006-07 Founder II and 2007-08 ESOS pursuant to which shares havebeen allotted and listed in accordance with the in-principle approval extended by thestock exchanges. The Scheme was instituted vide approval of its members at theExtra-Ordinary General Meeting (EGM) dated March 28 2005 and subsequently amended by themembers of the Company vide its EGM dated February 24 2015.
The Scheme was last ratified and amended by the members of the Company at its AnnualGeneral Meeting held on July 17 2017 which is in compliance with the SEBI (Share BasedEmployee Benefits) Regulations 2014 (referred to as the 'Revised Scheme').
I n the last amendment which was approved by the members at the Annual General Meetingheld on July 17 2017 the definition of Exercise Period was modified to read as 'ExercisePeriod means the period commencing from the date of vesting and would expire on completionof such period not exceeding ten years from the date of vesting of Options as may bedetermined by the Board Nomination and Remuneration Committee for each grant.' Theamendment to the definition covers only future grants and not the grants already made.
As per the Revised Scheme the aggregate number of shares issued or issuable since March31 2016 pursuant to the exercise of any options granted to the eligible employees issuedpursuant to the Scheme or any other stock option scheme of the Company shall not exceed2.64% of the number of shares issued as on March 31 2016; which pursuant to the Schemewas capped at 3% of the issued capital of the Company as on the date of grant(s). Furtherpursuant to the Revised Scheme the maximum number of options that can be granted to anyeligible employee is restricted to 0.1% of the issued Shares of the Company at the time ofgrant of Options which pursuant to the Scheme was 1% of the issued capital of the Companyto any eligible employee. Both the Scheme and the Revised Scheme provides for a minimumperiod of one year between the grant of options and vesting of options. Shares areallotted to all those who have exercised their options as granted by the Board of theCompany and/or the Committee in accordance with the criteria ascertained pursuant to theCompany's Compensation and Benefits Policy.
Pursuant to the SEBI (Share Based Employee Benefits) Regulations 2014 the belowdisclosures are available on the website of the Company at https://
The Company follows intrinsic value method and hence there was no charge in the RevenueAccount and Profit and Loss account on account of modification of the Scheme.
The salient features of tranches issued under the Scheme and the Revised Scheme are asstated below:
Exercise price of all the options outstanding for all years/quarter for tranchesFounder 2004-05 2005-06 2006-07 Founder II 2007-08 & 2017-18 is ' 30 ' 42 ' 70' 130 ' 130 ' 400 and ' 468.6 respectively.
Particulars of options granted by the Company up to March 31 2018 are given below:
Note: For details on option movement during the year refer Notes to accounts.
The following Key Managerial Personnel other than wholetime Directors and SeniorManagement Personnel (SMP) were granted ESOPs upto a maximum of 41000 optionsaggregating to 232300 options during FY2018.
* Mr. Prasun Kumar Sikdar ceased to be an employee with the Company with effect fromOctober 1 2017.
No employee was granted options during any one year equal to or exceeding 0.1% of theissued equity shares of the Company at the time of the grant.
Nil options were vested during the year ended March 31 2018 and ' 39.6 million wasrealised by exercise of options during the year ended March 31 2018 (March 31 2017: '327.3 million). During the year ended March 31 2018 the Company has recognized acompensation cost of ' nil (year ended March 312017: ' nil) as the intrinsic value of theoptions. Had the company followed fair value method based on binomial tree model valuingits options compensation cost for the year ended would have been higher by ' 39.7 million(March 31 2017: ' nil) and the proforma profit after tax would have been ' 16158.6million (March 31 2017: ' 16822.3 million). On a proforma basis the company's basic anddiluted earnings per share would have been ' 11.26 (March 31 2017: ' 11.73) and ' 11.25(March 31 2017: ' 11.72) respectively.
Fair value methodology
The assumptions considered in the pricing model for the ESOPs granted during the yearended March 31 2018 were
The weighted average price of options exercised during the year ended March 31 2018 is' 261.08 (year ended March 31 2017: ' 108.3).
Further disclosures pursuant to the SEBI (Share Based Employee Benefits) Regulations2014 Guidance Note on accounting for employees share based payments issued by ICAI or anyother relevant accounting standard have been included in the Notes to Accounts.
ICICI Bank Limited ("Holding company") has granted options to executiveDirectors and certain employees of the Company. The holding company follows an intrinsicvalue method and has recognized a cost of ' nil for the year ended March 31 2018 for theoptions granted to employees of the Company (year ended March 31 2017: ' nil).
Details of equity shares held by the non-executive Directors as on March 31 2018:
None of the non-executive Directors of the Company holds shares of the Company as onMarch 31 2018.
General Body Meetings
The details of the last three Annual General Meetings (AGM) are given below:
The following special resolutions were passed by the members during the last threeAnnual General Meeting:
Annual General Meeting held on June 25 2015
Re-appointment & Revision in remuneration payable to Mr. Sandeep BakhshiManaging Director & CEO.
Re-appointment & Revision in remuneration payable to Mr. Puneet NandaExecutive Director.
Revision in remuneration payable to Mr. Sandeep Batra Executive Director.
Annual General Meeting held on June 24 2016
Amendment of the Articles of Association of the Company.
Annual General Meeting held on July 17 2017
Approval and ratification of ICICI Prudential Life Insurance Company Limited -Employees Stock Option Scheme.
Approval to Grant of Stock Options to the Employees/Directors of Holding and/orSubsidiary Company (ies) (Present & Future) under the Revised
Means of Communication
It is the Company's belief that all stakeholders should have access to completeinformation regarding its position to enable them to accurately assess its futurepotential. The Company disseminates information on its operations and initiatives on aregular basis. The Company's website (www.iciciprulife.com) serves as a key awareness facility for all its stakeholders allowing them to accessinformation at their convenience. It provides comprehensive information on the Company'sstrategy financial performance operational performance and the latest press releases.
The Company's investor relations personnel respond to specific queries and play aproactive role in disseminating information to both analysts and investors. Allinformation which could have a material bearing on the Company's share price is releasedthrough as per regulatory requirements. The information is also disseminated to theNational Stock Exchange of India Limited (NSE) and BSE Limited (BSE) from time to time.
The financial and other information and the various compliances as required/ prescribedunder the Listing Regulations are filed electronically with NSE and BSE through NSEElectronic Application Processing (NEAP) System and through BSE Listing Centre and arealso available on their respective websites in addition to the Company's website.Additionally information is also disseminated to BSE/NSE where required by email or fax.
The Company's quarterly financial results are published in the Financial Express(Mumbai Pune Ahmedabad Lucknow Delhi Kolkata Chandigarh Chennai BengaluruHyderabad Cochin edition) and Loksatta (Mumbai Pune Nagpur Ahmednagar DelhiAurangabad edition). The financial results official news releases analyst calltranscripts and presentations are also available on the Company's website.
Management Discussion and Analysis
The Management Discussion and Analysis Report for FY 2018 forms part of the AnnualReport.
General Shareholder Information
Financial Year: April 1 2017 to March 31 2018
Book Closure: June 20 2018 to June 26 2018 (both days inclusive)
Dividend Payment date: On or before July 25 2018.
Listing of equity shares on Stock Exchange
The Company has listed its equity shares on the following Stock Exchanges:
The Company has paid the annual listing fees for the relevant periods to BSE and NSEwhere its equity shares are listed.
Market price Information
The reported high and low closing prices and volume of equity shares of the Companytraded during Fiscal 2018 on BSE and NSE are set out in the following table:
Share Transfer System
The Company's Registrar and Transfer Agent (RTA) is Karvy Computershare Private Limited(Karvy). The address of the RTA is as follows:
Karvy Computershare Private Limited
Karvy Selenium Tower B Plot 31-32 Gachibowli
Financial District Nanakramguda Hyderabad - 500 032
Email ID: email@example.com
Tel No.: +91-40-67162222
Fax No.: +91-40-23420814
Information on shareholding
Shareholding pattern of the Company as on March 31 2018
Shareholders of the Company with more than 1% holding as on March 312018 (other thanpromoters of the Company)
* 37435497 equity shares held by M/s Apex Trust jointly with Mr. Rishad Azim Premjiand 9893051 equity shares held by M/s Apex Trust together for M/s Hasham Traders
Distribution of shareholding of the Company as on March 31 2018
Distribution Schedule As On March 31 2018 (Total)
The Company's equity shares are traded mainly in dematerialised form. During the year173075 equity shares of face value ' 10/- each involving 27 certificates weredematerialised. At March 31 2018 99.99% of paid-up equity share capital are held indematerialised form.
Fit and Proper criteria for investors and continuous monitoring requirement
The IRDAI guidelines for Listed Indian Insurance Companies prescribe the following:
Self-certification of 'fit and proper person' criteria by a personholding/intending to acquire equity shares of 1% or more of paid-up equity share capital.
Prior permission of IRDAI for holding shares beyond 5% of the paid-up equityshare capital.
Further information on detailed procedure and format for self-certification is hostedon the Company's website https://www.iciciprulife.com/content/dam/icicipru/about-us/investor-awareness/ Fit_And_Proper_Criteria.pdf
Queries related to the operational and financial performance of the Company may beaddressed to:
Mr. Satyan Jambunathan/Mr. Vikas Gupta Investor Relations
ICICI Prudential Life Insurance Co. Ltd. 1089
Appasaheb Marathe Marg Prabhadevi
Mumbai 400 025
Telephone: (91 22) 40391600
Fax: (91 22) 6662 2031
Email ID: firstname.lastname@example.org
Conservation of Energy and Technology absorption
The Company has undertaken various initiatives for energy conservation at its premisesand has used information technology extensively in its operations; further details aregiven in the Business Responsibility Report.
Business Responsibility Reporting
Business Responsibility Report as stipulated under Regulation 34 of the ListingRegulations forms part of the Annual Report and has been hosted on the website of theCompany and can be viewed at https://www.iciciprulife. com/content/dam/icicipru/about-us/business-responsibility-report/ BRR2018.pdf
Foreign exchange earnings and outgo
Details of foreign exchange earnings and outgo required under Section 134(3)(m) of theCA2013 read with rule 8(3) of the Companies (Accounts) Rules 2014 are as under:
Commodity price risk or foreign exchange risk and hedging activities
This is not relevant to us as we do not have any derivatives or liabilities denominatedin foreign currency.
The branches of the Company are highlighted in this report earlier however there areno plants as the Company is not a manufacturing entity.
Address for Correspondence
Ms. Vyoma Manek Company Secretary
ICICI Prudential Life Insurance Company Limited 1089
Appasaheb Marathe Marg
Prabhadevi Mumbai - 400 025
Telephone: (91 22) 40391600
Fax: (91 22) 6662 2031
Email ID: email@example.com
COMPLIANCE CERTIFICATE OF THE AUDITORS
The Company has annexed to this report (Annexure E) a certificate obtained from thestatutory auditors B S R & Co. LLP Chartered Accountants and Walker Chandiok & CoLLP Chartered Accountants regarding compliance of conditions of Corporate Governance asstipulated in the Listing Regulations.
Details of unclaimed suspense account as provided by our RTA i.e. Karvy ComputersharePrivate Limited pursuant to Regulation 39 read with Part F of Schedule V of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015
Events after Balance Sheet date
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyto which the Balance Sheet relates and the date of this report.
1. There are no materially significant related party transactions that may havepotential conflict with the interest of the Company.
2. No penalties or strictures have been imposed on the Company by the Stock Exchangesthe Securities & Exchange Board of India (SEBI) or any other statutory authority forany non-compliance on any matter relating to capital markets during the last three years.
3. In terms of the Whistle Blower Policy of the Company no employee of the Company hasbeen denied access to the Audit Committee.
Adoption of Mandatory and Non-mandatory requirements
The Company has complied with all mandatory requirements specified in Regulations 17 to27 and clauses (b) to (i) of Sub-Regulation 2 of Regulation 46 and some of thenon-mandatory requirements pertaining to Corporate Governance stipulated under the ListingRegulations.
The Company has adopted following non-mandatory requirements:
1. Separate posts of chairperson and chief executive officer.
The listed entity may appoint separate persons to the post of chairperson and managingdirector or chief executive officer
2. Reporting of internal auditor
The internal auditor may report directly to the audit committee.
GREEN INITIATIVES IN CORPORATE GOVERNANCE
In line with the 'Green Initiative' the Company has effected electronic delivery ofNotice of Annual General Meeting and Annual Report to those Members whose e-mail IDs wereregistered with the respective Depository Participants and downloaded from thedepositories viz. National Securities Depository Limited/Central Depository Services(India) Limited. The CA2013 and the underlying rules as well as Regulation 36 of theListing Obligations permit the dissemination of financial statements and annual report inelectronic mode to the Members. Your Directors are thankful to the Members for activelyparticipating in the Green Initiative and seek your continued support for implementationof the Green Initiative.
In order to support the cause we have been regularly requesting members toregister/update their email ids with their Depository Participants so as to enable theCompany to send various communication through electronic mode. We believe and endorse the'Green Initiative' as it would not only rationalise the use of paper but also ensureprompt communication avoid loss in transit and have reference value of the communication.
In furtherance of the Green Initiative the Company has digitised its policy issuanceand servicing processes. More than 96% of all our applications are logged digitally. TheCompany has also offered its customers the facility of opening e-insurance accounts anelectronic repository of the policies to enable it to electronically store and administera policy.
To the extent permitted the Company also communicates with its customers via sms andemails to reduce the use of paper. The digital platform is extended to employees advisorsand partners too. Due to these initiatives the Company's paper usage has droppeddrastically over the years. The above initiatives and digital processes have not onlyprovided speed and convenience to customers and distributors but has also had a positiveimpact on environment.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the requirements of Section 134(3)(c) of the CA2013 and theCorporate Governance Guidelines the Board of Directors confirm:
(a) i n the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) that they have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) that they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) that they have prepared the annual accounts on a going concern basis;
(e) that they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and
(f) that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Company is grateful to the Insurance Regulatory & Development Authority ofIndia Securities Exchange Board of India Reserve Bank of India and Government of Indiafor their continued co-operation support and advice.
The Board of Directors and the Company would also like to take this opportunity toexpress sincere thanks to our valued customers for their continued patronage and theinvestors for reposing confidence in the Company.
The Directors express their gratitude for the valuable advice and guidance receivedfrom time to time from the auditors and the statutory authorities. The Directors expresstheir deep sense of appreciation to all employees and distributors who continue todisplay outstanding professionalism and commitment enabling the organisation to deliverand extend quality services. The Directors also wish to express their gratitude to ICICIBank Limited and Prudential Corporation Holdings Limited for their continued trust andsupport.
For and on behalf of the Board
May 4 2018
COMPLIANCE WITH THE CODE OF BUSINESS CONDUCT AND ETHICS
I confirm that all Directors and members of the senior management have affirmedcompliance with Code of Business Conduct and Ethics for the year ended March 31 2018.
Managing Director & CEO DIN: 00109206
May 4 2018 Mumbai