General Insurance Corporation of India Auditors Report


To,

The Members of,

General Insurance Corporation of India

Report on the Audit of Standalone Financial Statements

1. Opinion

We have audited the accompanying Standalone Financial Statements of General Insurance Corporation of India ("the Corporation"), which comprise the Balance Sheet as at March 31st, 2023, the Revenue Accounts of Fire, Miscellaneous, Marine and Life Insurance (Collectively known as Revenue Accounts), Profit and Loss Account, the Cash Flow statement for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information, in which are incorporated financial information of three foreign branches out of which two branches have been audited by local auditors appointed by the Corporation and one unaudited foreign branch and one domestic branch whose auditors are appointed by Comptroller and Auditor General of India, New Delhi.

In our opinion and to the best of our information and according to the explanations given to us, we report that the aforesaid Standalone Financial Statements give the information required in accordance with the requirements of the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (the Insurance Act), the Insurance Regulatory and Development Authority Act, 1999 (the IRDAI Act), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 (the IRDAI Financial Statements Regulations), the Companies Act, 2013 (the Act) including the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (the Accounting Standards) to the extent applicable and in manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India as applicable to the Insurance Companies, of state of affairs of the Corporation as on March 31st, 2023, surplus of revenue accounts of Fire, Miscellaneous, Marine and Life business, in case of profit and loss account of the profit for the year ended on that date and its cash flows for the year ended on that date.

2. Basis For Opinion

We conducted our Audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India ("ICAI"). Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the ICAI together with the ethical requirements that are relevant to our Audit of the financial statements under the provisions of the Companies act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidences we have obtained is sufficient and appropriate to provide a basis for our opinion.

3. Emphasis of Matter

a) We draw attention to Note No. 26 (b) of the Standalone Financial Statements, some of the balances due to/from entities carrying on Insurance business including reinsurance businesses are subject to confirmations and/or reconciliation, and as stated in the note the consequential impact (If any) will be accounted after complete confirmations and/or reconciliation.

b) We draw attention to Note No. 27 of the Standalone Financial Statements wherein Corporation has mentioned about creation of Catastrophe Reserve during the current financial year.

Our opinion is not modified on the above matters.

4. Key Audit Matters

Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters below to be the key audit matters to be communicated in our report.

s. No.

Key Audit Matters

Auditors response

1.

Revenue Recognition:

Our audit procedures on revenue recognized included:
The Corporation recognizes reinsurance premium income based on the statement of accounts or closing statements received from the ceding companies. At the year end, estimates are made for the accounts not received based on the Estimated Premium Income (EPI) agreed upon by both the Corporation and the Ceding Companies at the time of inception of the treaty or policy slip. Premium estimation is the differential of EPI and the booked premium for the year by the Corporation. Estimation of Income can be right only if the factors involved are incorporated in the system and extracted correctly from the system. Tested the design, implementation and operating effectiveness of key controls over Revenue Recognition.
Verified Premium Estimation with the guidelines of the Corporation and have performed test of controls, test of details and analytical review procedures on estimation of income.
Verified EPI from the treaty or policy slip as the case may be and verified Actual Premium booked from Statement of Accounts or Closing statements received from the Cedants of the sample cases.

2.

Claim Provisioning:

Verified operational guidelines of the Corporation relating to claim processing, have performed test of controls, test of details and analytical review procedures on the outstanding claims. Verified the claim paid and provision on sample basis with payment proof and Preliminary Loss advice received from the Cedant Company and the same is further verified from the surveyors report.
Insurance Claim is the major area of expense for the insurance company. Total claims incurred include paid claims, Outstanding Loss Reserve (OSLR) and Claims Incurred But Not (Enough) Reported (IBN(E)R).
The Provision and payment of claims was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the Standalone Financial Statements as the quantum involved is significant. For the claim cases which has been incurred but not reported and cases in which claim has been reported but not enough reported these cases has been captured by the actuary appointed by the Corporation. The actuarial valuation of liability in respect of Claims Incurred but Not Reported (IBNR) and those Incurred but Not Enough Reported (IBNER) as at March 31st, 2023, is as certified by the Corporations Appointed Actuary and we had verified the amounts and the related liability, based on such report.

3.

Investments:

Our audit procedures on Investment included the following:
The Corporations investments represents substantial portion of the assets as at March 31st, 2023 which are to be valued in accordance with accounting policy framed as per the extent of the regulatory guidelines. • Understood Managements process and controls to ensure proper classification and valuation of Investment.
The valuation of all investments should be as per the investment policy framed by the Company which in turn should be in line with IRDAI Investment Regulations and Preparation of Financial Statement Regulations. The valuation methodology specified in the regulation is to be used for each class of investment. • Verified and obtained appropriate external confirmation for availability and ownership rights related to these investments.
The Company has a policy framework for Valuation and impairment of Investments. The Company performs an impairment review of its investments periodically and recognizes impairment charge when the investments meet the trigger/s for impairment provision as per the criteria set out in the investment policy of the Company. Further, the assessment of impairment involves significant management judgment. • Tested the design, implementation, management oversight and operating effectiveness of key controls over the classification and valuation process of investments.
The classification and valuation of these investments was considered one of the matters of material significance in the audit of Standalone Financial Statements due to the materiality of the total value of investments to the Standalone Financial Statements. • Test-checked valuation of different class of investments to assess appropriateness of the valuation methodologies with reference to IRDAI Investment Regulations along with Companys own investment policy.
• Reviewed the Companys impairment policy and assessed the adequacy of its impairment charge on investments outstanding at the year end.
Based on procedures above, we found the companys impairment, valuation and classification of investments in its Standalone Financial Statements in all material respects to be fair.

5. Information Other than the Financial Statements and Auditors Report Thereon

The Corporations Board of Directors is responsible for preparation of the other information. The other information comprises the information included in the Boards Report including Annexures to Boards Report, Management Discussion and Analysis, Business Responsibility Report and Report on Corporate Governance, but does not include the Standalone Financial Statements and our auditors report thereon. These other information are expected to be made available to us after the date of this auditors report. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

When we read the other information, If we conclude that there is a material misstatement therein, we are required to communicate the matters to those charged with governance and determine the actions under the applicable laws and regulations.

6. Responsibilities of the management and those charged with governance for the financial statements

The Corporations Board of Directors is responsible for matters as stated in section 134(5) of the companies act, 2013 ("the act") with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and Cash flows of the Corporation in accordance with the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015 (the Insurance Act), the Insurance Regulatory and Development Authority Act, 1999 (the IRDAI Act), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 (the IRDAI Financial Statements Regulations), the Companies Act, 2013 (the Act) including the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

In preparing the Standalone Financial Statements, management is responsible for assessing the ability of the Corporations to continue as Going Concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, as has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Corporations financial reporting process.

7. Auditors Responsibilities for the Audit of the Financial Statements

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

• Obtain and understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Corporation has in place and adequate internal financial control systems over financial reporting and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of the management use of going concern basis of accounting and, based on audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporations ability to continue as a going concern. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or condition may cause the Corporation to cease to continue as a going concern.

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

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

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

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

8. Other Matters:

a) We did not audit the financial information of three foreign branches and one Indian branch included in the Standalone Financial Statements, whose audited financial information reflect Premiums earned (Net) (before eliminations) of Rs. 2,35,35,300 thousands and total profit after tax (before eliminations) of Rs. 27,32,985 thousands for the year ended March 31st, 2023, as considered in the audited Standalone Financial Statements. These financial information other than Malaysian Branch have been audited by another auditor whose report has been furnished to us except Malaysian Branch. The Corporations management has converted the financial information of such branches located outside India to accounting principles generally accepted in India and certain conversion adjustments were accounted. We have audited these conversion adjustments made by the Corporations management.

Our opinion on the Standalone Financial Statements, in so far as it relates to the amounts and disclosures included in respect of these three foreign branches and one Indian branch is based solely on the report of another auditor except for unaudited Malaysian Branch where we have relied on Management certified financial information.

b) The Standalone Financial Statements include the financial information of Dubai branch which has intimated the Run-off branch status as per the audited financial information received for the year ended March 31st, 2023. The auditors of the branch have also stated that the Branch is not looked upon as a Going Concern in the future as a Portfolio Transfer Agreement has been entered on September 14th, 2022 between GIC Gift City Branch and Dubai Branch.

c) The actuarial valuation of liability in respect of Claims Incurred but not Reported (IBNR) and those Incurred but not Enough Reported (IBNER) as at March 31st, 2023 is as certified by the Corporations Appointed Actuaries and our opinion in so far as it relates to the amounts and disclosures related to such liability, is based solely on such report.

d) The Standalone Financial Statements of the Corporation for the year ended March 31st, 2022, were audited by D.R. Mohnot & Co, one of the joint auditors of the Corporation and other previous joint auditor whose report dated May 27th, 2022 expressed a modified opinion on the Standalone Financial Statements.

Our Report is not modified in respect of the above matters.

9. Report on Other Legal and Regulatory Requirements

1. As required by the IRDAI Financial Statements Regulations, we have issued a separate certificate dated May 25th, 2023 certifying the matters specified in paragraphs 3 and 4 of Schedule C to the IRDAI Financial Statement Regulations.

2. As required by Section 143 (3) of the Companies Act, 2013 and Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 and orders or direction issued by the Insurance Regulatory and Development Authority, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and have found them to be satisfactory.

b) In our opinion and to the best of our information and according to the explanations given to us, proper books of account as required by law have been kept by the Corporation so far as it appears from our examination of those books and proper returns (audited/certified) have been received from the four branches, not visited by us.

c) The reports of the three foreign branches and one domestic branch on the accounts of the branch offices of the Corporation audited/certified by the branch auditors under section 143(8) of the Act, have been sent to us and have been properly dealt with by us in preparing this report.

d) The Balance Sheet, Revenue Accounts, Profit and Loss Account and Cash Flow Statement dealt by this Report are in agreement with the books of accounts and with the returns received from the branches/representative offices not visited by us.

e) The Actuarial valuation of liabilities as on March 31st, 2023 is duly certified by the appointed actuary including to the effect that the assumptions for such valuation are in accordance with the guidelines issued by the Institute of Actuaries of India to its members and has been forwarded to IRDAI.

f) The Balance Sheet, Revenue Accounts, Profit and Loss Account have been drawn in accordance with the Insurance Act 1938, IRDAI Act, 1999 and the Act except for the Cash Flow Statement, (Refer Note 55) which is prepared under indirect method, whereas IRDAI regulations require Cash Flow Statements to be prepared under Direct Method.

g) Investments have been valued in accordance with the provisions of the Insurance Act, the regulations and orders/directions issued by IRDAI in this regard except investment which have been considered as fully impaired are not fair valued as required by para 6(c) of the IRDAI Financial Statements Regulations.

h) The Accounting policies selected by the Corporation are appropriate and are in accordance with the applicable accounting standards and with the accounting principles, as prescribed in the IRDAI (Auditors Report) Regulations, 2002 or any order or direction issued by IRDAI in this behalf.

i) On the basis of written representations received from the directors as on March 31st, 2023 taken on record by the board of directors, none of the directors is disqualified as on March 31st, 2023 form being appointed as a director in terms of section 164(2) of the Act.

j) In our opinion the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules 2016, and also in conformity with the accounting principles prescribed in the IRDAI regulations.

k) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended, we report that the provisions of section 197 of the act are not applicable to the Corporation vide notification No. GSSR 463 (E) dated June 5th, 2015. Hence reporting u/s 197 (16) of the Act is not required.

l) The Corporation being an Insurance Company, the Companies (Auditors Report) Order, 2020 ("the order") as amended, issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act is not applicable.

m) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and the operating effectiveness of such controls, refer to our separate report in "Annexure A".

n) As required under section 143(5) of the Companies Act, 2013 based on our audit as aforesaid, we enclose herewith, as per "Annexure B" the directions including the additional directions issued by Comptroller and Auditor General of India, action taken thereon and the financial impact on the accounts and the Standalone Financial Statements of the Corporation.

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

i. The Corporation has disclosed the impact of pending Litigations on its financial position in Note 47 to the Standalone Financial Statements;

ii. Provisions has been made as on March 31st, 2023 in the Standalone Financial Statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. There were no derivative contracts as on March 31st, 2023.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Corporation.

iv. (a) The Management has represented that, to the best of their knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

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

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

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

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 relating to maintenance of audit trail in software systems involved in financial reporting is applicable with effect from April 1st, 2023 to the Company, accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31st, 2023.

For PKF SRIDHAR & SANTHANAM LLP

For D.R. MOHNOT & CO

Chartered Accountants

Chartered Accountants

ICAI Firm Registration ICAI Firm Registration
No:0039905/S200018 No:001388C

Partner: S Narasimhan

Partner: D.R. Mohnot

Membership No. 206047 Membership No. 070579
UDIN: 23206047BGUMVE2414 UDIN: 23070579BGUINC8823
Place: Mumbai Place: Mumbai
Date: May 25th, 2023 Date: May 25th, 2023

Annexure A to the Independent Auditors Report

Annexure A to the Independent Auditors Report of even date on the Financial Statements of General Insurance Corporation of India

(Referred to in paragraph 9(2)(m) of section "Report on other legal and regulatory Requirements" forming part of the Independent Auditors report dated May 25th, 2023)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of General Insurance Corporation of India ("the Corporation") as of March 31st, 2023 in conjunction with our audit of the Standalone Financial Statements of the Corporation for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Corporations management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Corporations policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013, the Insurance Act, the IRDAI Act, the Regulations and orders/directions prescribed by the Insurance Regulatory and Development Authority of India (IRDAI) in this behalf and current practices prevailing within the insurance industry in India.

Auditors Responsibility

Our responsibility is to express an opinion on the Corporations internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India.

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error. Commensurate to the size and nature of the business, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Corporations internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Corporations internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Financial Statements for external purposes in accordance with generally accepted accounting principles. A Corporations internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporation; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Financial Statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Corporation are being made only in accordance with authorizations of management and directors of the Corporation; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Corporations assets that could have a material effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, commensurate with the size & nature of business, the Corporation has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31st, 2023, based on the internal control over financial reporting criteria established by the Corporation considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Other Matter

The actuarial valuation of liability in respect of Claims Incurred but not Reported (IBNR) and those Incurred but not Enough Reported (IBNER) as at March 31st, 2023 is as certified by the Corporations Appointed Actuaries and has been relied upon by us as mentioned in paragraph 8 of our audit report on the Standalone Financial Statements for the year ended March 31st, 2023. Accordingly, our opinion on the internal financial controls over financial reporting does not include reporting on the operating effectiveness of the managements internal controls over the valuation and accuracy of aforesaid actuarial valuation.

For PKF SRIDHAR & SANTHANAM LLP

For D.R. MOHNOT & CO

Chartered Accountants

Chartered Accountants

ICAI Firm Registration ICAI Firm Registration
No: 0039905/S200018 No: 001388C

Partner: S Narasimhan

Partner: D.R. Mohnot

Membership No. 206047 Membership No. 070579
UDIN: 23206047BGUMVE2414 UDIN: 23070579BGUINC8823
Place: Mumbai Place: Mumbai
Date: May 25th, 2023 Date: May 25th, 2023

Annexure B to the Independent Auditors Report

(Referred to in paragraph 9(2)(n) of "Report on Other Legal and Regulatory Requirements" section of the Independent Auditors Report of even date to the members of General Insurance Corporation of India on the Standalone Financial Statements for the year ended March 31st, 2023)

With regards to the Directions issued by the Comptroller and Auditor General of India under section 143(5) of the Companies Act, 2013, based on our audit, we report hereunder on the action taken and the financial impact on the accounts of the Standalone Financial Statements of the Corporation except for Dubai branch whose auditors have not commented on directions and sub directions of C&AG.

Sr. No.

Direction under Section 143 (5) of the Companies Act 2013

Action taken and financials impact

1. Whether the Corporation has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated. The Corporation has system in place to process all the accounting transactions through IT systems except for -
1. Unexpired Risk Reserve (URR): The provision of URR is calculated manually based on the data extracted from the system and then the same is entered in the IT system after verification, therefore there is no financial impact
2. Retro Recovery Claims: It is understood that claims recovery is processed manually and the data is maintained offline. After verification it is entered in the IT system, therefore there is no financial impact.
2. Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by a lender to the Corporation due to the Corporations inability to repay the loan? If yes, the financial impact may be stated. Whether such cases are properly accounted for? (in case lender is a government company, then its direction is also applicable for statutory auditor of the lender company). Not Applicable, as the Corporation does not have any outstanding borrowed money.
3. Whether funds (grants/subsidy etc.) received/receivable for specific schemes from central/state government or its agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation. Not Applicable. The Corporation is a re-insurance Company and it does not receive any funds directly from State/Central Agencies for specific schemes.

With respect to the additional directions issued by Comptroller and Auditor General of India under section 143 (5) of the Companies Act, 2013, based on our audit, we report hereunder on the action taken and the financial impact on the accounts of the Standalone Financial Statements of the Corporation:

Sr. No. Additional Direction under Section 143 (5) of the Companies Act 2013

Action taken and financials impact

1. Number of titles of ownership in respect of CGS/ SGS/Bonds/Debentures etc. available in physical/ demat form and out of these, number of cases which are not in agreement with the respective amounts shown in the Companys books of accounts may be verified and discrepancy found may be suitably reported.

The Central Government Securities and State Government securities balances are tallied as per the record of custodian vis a vis books of accounts of the Corporation.
Further in case of bonds/debentures/equities/preference shares, no confirmations or other documentary evidence was available regarding actual custody of the following:
• 16 Scrip of investments in debenture of Rs. 6,589 thousand as per books of accounts (The Corporation has fully provided for these amounts in earlier years, hence no financial impact)
• 5 Scrip of investments in Preference Shares of Rs. 0.004 thousand as per books of accounts (Four Scrip Written down to Rs. 1/- and One Scrip Written Down to Zero in earlier years, hence no financial impact)
Since all the above have either been fully provided or written down, the same has no financial impact.
Following Investments held by the Custodian of the Corporation is in excess of number vis a vis held as per the books of the Corporation.
• 1 Scrip of Bonds having book value of Rs. 1300 thousand (Fully provided by management) and one scrip of bond having book value of Nil.
• 1 Scrip of Preference Shares having book value of Rs. 0.001 thousand (Written down to Rs. 1/-)

2. Whether Investment Policy exists and includes mechanism to review investment portfolios and whether stop loss limits are prescribed? If yes, whether it was adhered to? If not in existence or not adhered to, details may be given.

The Annual Investment Policy exists which includes mechanism to review investment portfolios and stop loss limits are prescribed in the policy which have been adhered to.

 

For PKF SRIDHAR & SANTHANAM LLP

For D.R. MOHNOT & CO

Chartered Accountants

Chartered Accountants

ICAI Firm Registration ICAI Firm Registration
No: 0039905/S200018 No: 001388C

Partner: S Narasimhan

Partner: D.R. Mohnot

Membership No. 206047 Membership No. 070579
UDIN: 23206047BGUMVE2414 UDIN: 23070579BGUINC8823
Place: Mumbai Place: Mumbai
Date: May 25th, 2023 Date: May 25th, 2023

Independent Auditors Certificate

To,

Board of Directors,

General Insurance Corporation of India "Suraksha" 170 J Tata Road,

Church Gate, Mumbai

Dear Sirs,

(Referred to in paragraph 1 in Other Legal and Regulatory Requirements Section forming part of the Independent Auditors Report dated May 25th, 2023)

This certificate is issued for compliance with the provisions of paragraphs 3 and 4 of Schedule C of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations 2002, (the "Regulations") read with regulation 3 of the Regulations.

MANAGEMENTS RESPONSIBILITY

The Corporations Board of Directors is responsible for complying with the provisions of The Insurance Act, 1938 (amended by the Insurance Laws (Amendment) Act 2015) (the "Insurance Act"), the Insurance Regulatory and Development Authority Act, 1999 (the "IRDA Act"), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 (the "IRDA Financial Statements Regulations"), orders/directions issued by the Insurance Regulatory and Development Authority of India (the "IRDAI") which includes the preparation of the Management Report. This includes collecting, collating and validating data and designing, implementing and monitoring of internal controls suitable for ensuring compliance as aforesaid.

AUDITORS RESPONSIBILITY

Pursuant to the requirements, it is our responsibility to obtain reasonable assurance and form an opinion based on our audit and examination of books and records as to whether the Corporation has complied with the matters contained in paragraphs 3 and 4 of Schedule C of the Regulations read with regulation 3 of Regulations.

We conducted our examination in accordance with the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) (the Guidance Note) issued by the Institute of Chartered Accountants of India (ICAI).

The Guidance Note requires that we comply with the independence and other ethical requirements of the Code of ethics issued by the ICAI. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services engagements.

OPINION

In accordance with information and explanations given to us and to the best of our knowledge and belief and based on our examination of the books of account and other records maintained by the Corporation for the year ended March 31st, 2023, we certify that:

1. We have reviewed the Management Report attached to the Standalone Financial Statements for year ended March 31st, 2023, and on the basis of our review, there is no apparent mistake or material inconsistencies with the Standalone Financial Statements;

2. Based on management representations and compliance certificates submitted to the Board of Directors by the officers of the Corporation charged with compliance and the same being noted by the Board, nothing has come to our attention that causes us to believe that the Corporation has not complied with the terms and conditions of registration as stipulated by the IRDAI;

3. We have verified the cash balances to the extent considered necessary and the securities relating to the Corporation loans and investments as of March 31st, 2023, have been verified on the basis of confirmations received from the Custodian and/or Depository Participants appointed by the Corporation, as the case may be, subject to paragraph mentioned below:

• No confirmation were available from Custodian in respect of Investment in Debentures& Preference Shares of Rs. 6,589 thousand (16 Scrips), Rs. 0.004 thousands (Four Scrip Written down to Rs. 1/- and One Scrip Written Down to Zero in earlier years) respectively

• Bonds & Preference Shares of Rs. 1300 thousand and Rs. 0.001 thousand (1 scrip written down to Rs. 1/-) respectively, actually held by the Custodian of the Corporation is in excess vis a vis books of the Corporation.

• Further the Loans as reported under Schedule 9 of the Standalone Financial Statements are subject to confirmations/reconciliation.

4. The Corporation is not a trustee of any trust, however the Corporation is acting as manager of Terrorism and Nuclear Pool.

5. No part of the assets of the Policyholders Funds has been directly or indirectly applied in contravention to the provisions of the Insurance Act relating to the application and investments of the Policyholders Funds.

Restriction to use

This certificate is addressed to and provided to the Board of Directors of the Corporation, solely for inclusion in the Annual accounts of the Corporation as per the Regulations and should not be used by any other person or for any other purpose. We have no responsibility to update this certificate for events and circumstances occurring after the date of this certificate. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come without our prior consent in writing.

For PKF SRIDHAR & SANTHANAM LLP

For D.R. MOHNOT & CO

Chartered Accountants

Chartered Accountants

ICAI Firm Registration ICAI Firm Registration
No: 0039905/S200018 No: 001388C

Partner: S Narasimhan

Partner: D.R. Mohnot

Membership No. 206047 Membership No. 070579
UDIN: 23206047BGUMVE2414 UDIN: 23070579BGUINC8823
Place: Mumbai Place: Mumbai
Date: May 25th, 2023 Date: May 25th, 2023

Comments of the Comptroller and Auditor General of India

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF GENERAL INSURANCE CORPORATION OF INDIA FOR THE YEAR ENDED 31 MARCH 2023

The preparation of financial statements of GENERAL INSURANCE CORPORATION OF INDIA for the year ended 31 March 2023 in accordance with the financial reporting framework prescribed under the Insurance Act, 1938 read with Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of the Insurance Companies) Regulations, 2002 and the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under section 139(5) of the Act are responsible for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 25 May 2023.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the financial statements of GENERAL INSURANCE CORPORATION OF INDIA for the year ended 31 March 2023 under section 143(6)(a) of the Act. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records.

On the basis of my supplementary audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditors report under section 143(6)(b) of the Act.

For and on behalf of the
Comptroller & Auditor General of India
(Guljari Lal)
Director General of Audit (Shipping), Mumbai
Place: Mumbai
Date: 04.08.2023