icici lombard general insurance company ltd share price Directors report


Dear Members,

The Board of Directors are pleased to present the Twenty-Third Annual Report of ICICI Lombard General Insurance Company

Limited ("the Company") along with the Audited Financial

Statements for the financial year ended March 31, 2023.

BUSINESS OUTLOOK

Industry in FY2023

The general insurance industry has undergone significant changes during the financial year 2023. The pandemic has accelerated the industry?€™s digital transformation, which has resulted in increased demand for new insurance products and services. The Insurance Regulatory and Development Authority of India ("IRDAI") has introduced several reforms during this financial year, to expand the insurance market and increase insurance penetration.

The Gross Direct Premium Income ("GDPI") of the non-life insurance industry grew from Rs. 2,207.00 billion in FY2022 to Rs. 2,569.12 billion in FY2023, a growth of 16.4%. The market share of private players increased from 49.7% in FY2022 to 51.4% in FY2023 [Source: IRDAI and General Insurance Council].

Company in FY2023

The Company continues its journey of profitable growth through robust and prudent underwriting practices, generation of cash flows through strong retention of premium and judicious investments of the proceeds and focus on providing high quality customer service. The Company recognises the responsibility to protect individuals and corporates from various risks and contribute towards the larger goal of nation development. To fulfil this obligation, the Company offers a wide range of general insurance products and continuously introduces innovative products and services that not only enhance market penetration but also helps in managing various risks.

The Company has undertaken various initiatives towards building better digital platforms for claim management for its customers. The adoption of digital solutions has enabled the Company to settle claims remotely and efficiently, resulting in significant time savings and higher customer satisfaction levels. The Company has embraced cutting-edge technologies such as artificial intelligence and machine learning, as well as chatbots, to provide customers with an enhanced experience at every stage of their journey, from onboarding to claims settlement.

In FY2023, the Company?€™s GDPI stood at Rs. 210.25 billion as compared to Rs. 179.77 billion in FY2022, a growth of 17.0%.

The Net Earned Premium stood at Rs. 148.23 billion in FY2023 as against Rs. 130.32 billion in FY2022.

During the year under review, the Company has issued 32.7 million policies and honoured over 3.6 million claims.

The Company continue to lead the private players in the industry and has maintained its position of second largest player within the overall non-life insurance market. The market share of the Company is 13.3% (GDPI basis) among private-sector non-life insurers in India including standalone health insurers, while the overall market share of the Company is 8.2% (GDPI basis) among all non-life insurers in India.

FINANCIAL HIGHLIGHTS

The financial performance of the Company for FY2023 vis-a-vis FY2022 is summarised in the following table:

(Rs. in billion)

Particulars FY2022 FY2023 % change
Gross written premium 185.62 217.72 17.3%
Net written premium 134.90 155.40 15.2%
Net earned premium 130.32 148.23 13.7%
Net claims incurred 97.82 107.26 9.7%
Income from 30.00 29.63 (1.2%)
investments
Profit before tax 16.84 21.13 25.5%
Profit after tax 12.71 17.29 36.0%
Earning per share- 25.91 35.21 35.9%
Basic (Rs.)
Earning per share- 25.82 35.16 36.2%
Diluted (Rs.)
Net worth 91.10 103.92 14.1%
Investment assets 387.86 431.80 11.3%
Combined ratio 108.8% 104.5% 4.3%

APPROPRIATIONS

The profit after tax for the financial year ended March 31,

2023 is Rs. 17.29 billion. The profit available for appropriation is

Rs. 38.82 billion after taking into account the balance of profit of Rs. 21.53 billion brought forward from the previous year.

During the year under review, the Company paid Rs. 4.50 per equity share as an interim dividend for FY2023 i.e. at the rate of 45.0% of face value of Rs. 10 each, aggregating to Rs. 2.21 billion. The Board of Directors of the Company, at their Meeting held on April 18, 2023 had recommended a final dividend of

Rs. 5.50 per equity share i.e. at the rate of 55.0% of face value of Rs. 10 each for FY2023, to the Members of the Company for their approval. The declaration of dividend is based on the Dividend Distribution Policy of the Company and assessment of performance, capital, solvency and liquidity position of the Company.

Cumulatively, the Board of Directors of the Company had declared / recommended a total dividend of Rs. 10 per equity share for FY2023, i.e. at the rate of 100.0% of face value of Rs. 10 each. The dividend pay-out ratio for FY2023 is 27.0% as against 29.8% for FY2022.

SOLVENCY

IRDAI requires insurance companies to maintain a minimum solvency of 1.5 times which is calculated in a manner as specified in the Insurance Regulatory and Development Authority of India (Assets, Liabilities and Solvency Margin of General Insurance Business) Regulations, 2016. The solvency margin position of the Company as at March 31, 2023 is 2.51 times as compared to 2.46 times as at March 31, 2022. As on

March 31, 2023, the net worth of the Company has increased to Rs. 103.92 billion from Rs. 91.10 billion as at March 31, 2022.

SHARE CAPITAL

The Authorised Share Capital of the Company as at March 31, 2023 is Rs. 5.50 billion comprising of 550,000,000 equity shares of face value of Rs. 10 each. The issued, subscribed and paid-up share capital of the Company as at March 31, 2023 is Rs. 4.91 billion comprising of 491,125,103 equity shares of face value of Rs. 10 each.

During the year under review, the Company has allotted 233,675 equity shares pursuant to exercise of Stock Options by the eligible options holders under the ICICI Lombard-Employees Stock Option Scheme-2005 ("ESOS"). The equity shares allotted under ESOS ranks pari-passu with existing equity shares of the Company.

The Company has not issued any equity shares with differential voting rights or sweat equity shares during the year under review.

NON-CONVERTIBLE DEBENTURES

As an integral part of the Scheme of Arrangement entered by the Company with Bharti AXA General Insurance Company

Limited ("Bharti AXA"), the following non-convertible debentures issued by Bharti AXA were transferred in the name of the Company on the same terms and conditions, upon the

Scheme became effective i.e. from September 8, 2021:

1. 350, 10.5%, unsecured, subordinated, fully paid-up, listed, redeemable and non-convertible debentures of face value of Rs. 1,000,000 each. The said non-convertible debentures are listed on the debt segment of National Stock Exchange of India Limited ("350, Listed NCDs").

2. 2,200, 8.98%, unsecured, subordinated, fully paid-up, unlisted, redeemable and non-convertible debentures of face value of Rs. 1,000,000 each ("2,200, Unlisted NCDs").

The aforesaid non-convertible debentures were issued with a term of ten (10) years. In terms of the Information Memorandum, the Company may exercise Call Option at the end of five completed years from the Deemed Allotment Date and at the end of every year thereafter before the redemption date, subject to the fulfillment of the prescribed conditions and prior approval of IRDAI.

The Company has exercised Call Option for redemption of 2,200, Unlisted NCDs at par aggregating to Rs. 2.20 billion on August 23, 2022, pursuant to IRDAI approval dated July 5, 2022. All the debenture holders holding 2,200, Unlisted NCDs as on the Record date i.e. August 7, 2022 were paid full principal amount along with the interest due thereon on August 23, 2022.

As at March 31, 2023, the Company has Rs. 0.35 billion outstanding NCDs, comprising of 350, Listed NCDs. The Company has been regular in servicing its interest obligation towards the 350, Listed NCDs.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there has been no change in the nature of the business of the Company.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The provisions of Section 186(4) of the Companies Act, 2013 ("the Act"), require disclosure in the financial statements of the full particulars of the loans given, investment made or guarantee given or security provided including the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security, are not applicable to the Company, being an insurance company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS

There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and future operations of the Company.

BOARD OF DIRECTORS

The Company believes that a strong, independent and diverse

Board leadership ensures the deployment of effective corporate governance. The significance of Board diversity is recognised by various statutes/regulations i.e. the Insurance Act, 1938, the Guidelines for Corporate Governance for insurers in India issued by IRDAI ("IRDAI CG Guidelines"), the Act and relevant rules made thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and accordingly, composition of the Board of the Company is based on the prescribed regulatory requirements.

The Board of the Company is duly constituted with an optimum balance between Executive and Non-Executive Directors for an effective functioning of the Board. As on March 31, 2023, the Board of the Company consists of total eleven (11) Directors, out of which six (6) are Non-executive, Independent Directors, two (2) are Non-executive, Non-independent Directors and remaining three (3) are Executive Directors including Managing Director & CEO. The Company?€™s Board is chaired by a Woman Director, Lalita D. Gupte, Non-executive, Independent Director.

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164(1) and Section 164(2) of the Act. Further, all the Directors of the Company have confirmed that they fulfill the criteria of ‘fit and proper?€™ as laid down under IRDAI CG Guidelines.

Changes in composition of the Board of Directors of the Company

During the year under review, Vishakha Mulye (DIN: 00203578), Non-executive, Non-independent Director of the Company had resigned from the Company with effect from May 20, 2022, due to her resignation from the services of ICICI Bank Limited.

The Board of Directors of the Company had placed on record its appreciation on the contribution made by Vishakha Mulye during her tenure as a Non-executive, Non-independent

Director of the Company.

Further, the Board of Directors of the Company at their Meeting held on May 28, 2022, based on the recommendation of the Board Nomination and Remuneration Committee, approved the appointment of Rakesh Jha (DIN: 00042075), as an Additional Director in the category of Non-executive,

Non-independent Director, subject to approval of Members of the Company. Subsequently, the Members of the Company at the Twenty-Second Annual General Meeting ("AGM") held on August 5, 2022, approved the appointment of Rakesh Jha as a Non-executive, Non-independent Director, liable to retire by rotation.

Meetings of the Board of Directors

During the year under review, seven (7) Meetings of the Board of Directors of the Company were held including one (1) Board Meeting to discuss the business strategies of the Company. The details of the meetings of the Board of Directors of the Company held and attended by the Directors during FY2023 are detailed in the Corporate Governance Report, forming part of this Report.

Common Directorships

Section 48A of the Insurance Act, 1938 prescribes conditions for appointment/continuation of appointment of common directors between insurance companies and insurance agent, intermediary or insurance intermediaries. As on March 31, 2023, the Company has four (4) Directors, falling within the criteria of common Director viz. Uday Chitale, Ashvin Parekh, Sandeep Batra and Rakesh Jha.

The Company is in compliance with the applicable provision of the Insurance Act, 1938, other circulars and notifications/ clarification issued by IRDAI in connection with the appointment/continuation of Common Director.

Declaration of Independence

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) & (7) of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 16(1)(b) and Regulation 25 of the Listing Regulations, as amended from time to time. All the Independent

Directors have also confirmed that they have complied with

Schedule IV of the Act and the applicable provisions of the

Employees Code of Conduct of the Company. There has been no change in the circumstances affecting their status as an

Independent Directors of the Company.

Retirement by Rotation

In terms of provisions of Section 152 of the Act, Sanjeev

Mantri, Executive Director (DIN: 07192264) would retire by rotation at the forthcoming AGM and is eligible for re-appointment. Sanjeev Mantri has offered himself for re-appointment. A resolution seeking Members approval for re-appointment of Sanjeev Mantri is forming part of the AGM Notice. Sanjeev Mantri is not disqualified from being appointed as a Director under Section 164 of the Act. The profile and particulars of experience, attributes and skills of Sanjeev Mantri together with his other directorships and committee memberships have been disclosed in the annexure to the

Notice of the AGM.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES, CHAIRPERSON AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act, Listing Regulations and in accordance with Guidance Note on Board Evaluation issued by SEBI on January 5, 2017, an annual performance evaluation had been carried out of the Board as a whole, its Committees, individual Directors both Executive and Non-executive including Independent Directors and Chairperson of the Board.

The manner in which the evaluation has been carried out is explained in the Corporate Governance Report forming part of this Report.

KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 203 of the Act, the Key

Managerial Personnel (KMP) of the Company as on March 31, 2023, are as under:

1. Bhargav Dasgupta, Managing Director & CEO

2. Alok Kumar Agarwal, Executive Director

3. Sanjeev Mantri, Executive Director

4. Gopal Balachandran, Chief Financial Officer & Chief Risk Officer

5. Vikas Mehra, Company Secretary

In accordance with the IRDAI CG Guidelines, the Company has following Key Management Persons in addition to aforesaid KMPs:

1. Girish Nayak, Chief-Technology & Heath Underwriting &

Claims

2. Sanjay Datta, Chief-Underwriting, Reinsurance and Claims*

3. Jerry Jose, Chief-Human Resources

4. Vinod Mahajan, Chief Investment Officer

5. Prasun Sarkar, Appointed Actuary and Chief Actuarial Officer

6. Amit Kushwaha, Head-Legal & Chief Compliance Officer

7. Sandeep Goradia, Chief-Corporate Solutions Group^

8. Gaurav Arora, Chief - Underwriting & Claims, Property &

Casualty#

9. Vasundhara Bhonsle, Chief-Customer Support and Operations$

^The Board of Directors at their Meeting held on May 28, 2022, based on the recommendation of the Board Nomination and Remuneration Committee has approved the appointment of Sandeep Goradia as Chief-Corporate Solutions

Group and a Key Management Person in terms of IRDAI CG Guidelines, with effect from May 28, 2022.

*The Board of Directors at their Meeting held on February 20, 2023 had noted that Sanjay Datta, Chief-Underwriting, Reinsurance & Claims and a Key Management Person of the Company is scheduled to retire on July 31, 2023, from the services of the Company. Sanjay Datta intend to pursue his professional career in other opportunity(ies) within the ICICI Group and accordingly would be relieved from the services of the Company with effect from May 1, 2023.

Further, the Board of Directors at their Meeting held on February 20, 2023, based on the recommendation of the Board Nomination and Remuneration

Committee also approved the following:

#Appointment of Gaurav Arora, Chief - Underwriting & Claims, Property & Casualty and a Key Management Person in terms of IRDAI CG Guidelines, with effect from February 20, 2023. $Appointment of Vasundhara Bhonsle, Chief-Customer Support and Operations and a Key Management Person in terms of IRDAI CG Guidelines, with effect from February 20, 2023.

Criteria for appointment of Director, Key Managerial Personnel and officials who may be appointed in senior management

The Company has a Board approved criteria for appointment of a Director, key managerial personnel and officials who may be appointed in Senior Management ("the Criteria"). It includes the criteria for determining qualifications, positive attributes and independence of a Director, identification of persons who are qualified to become Directors, Key Managerial Personnel and who may be appointed in the Senior Management in accordance with the criteria laid down. The Criteria is hosted on the website of the Company and can be viewed at https:// www.icicilombard.com/docs/default-source/policies-of-the-company/criteria-for-appointment-of-a-director-key-managerial-personnel-and-officials-who-may-be-appointed-in-senior-management.pdf.

Policy on appointment and compensation of Employees and framework for remuneration to Non-executive Directors

The Company has a Board approved Policy on appointment and compensation of Employees and framework for remuneration to Non-executive Directors ("the Policy"). The Policy lay down guidelines on fixing compensation of employees including KMPs, Whole-time Directors and Non-executive

Directors of the Company. The philosophy of the Company on compensation and benefits is based on the ethos of meritocracy and fairness. The twin pillars of performance management and talent management system are closely intertwined with the compensation, benefits and reward mechanism of the Company. While the Company will strive to ensure internal and external equity that are consistent with emerging market trends, its business model and affordability based on business performance sets the overarching boundary conditions. The Policy is hosted on the website of the Company and can be viewed at https://www.icicilombard. com/docs/default-source/policies-of-the-company/policy-on-appointment-and- compensation- of- employees-and-framework-for-remuneration-to-non-executive-directors.pdf

Deposits

During the year under review, the Company has not accepted any deposits under Section 73 of the Act.

AUDITORS

Statutory Auditors

Pursuant to the provisions of Section 139 of Act, every company is required to appoint a Statutory Auditor for audit of financial statements of company. Further, IRDAI CG Guidelines required every insurance company to appoint minimum two auditors as Joint Statutory Auditors.

Chaturvedi & Co., Chartered Accountants (Firm Registration No. 302137E) and PKF Sridhar & Santhanam LLP, Chartered Accountants (Firm Registration No. 003990S/S200018) are the Joint Statutory Auditors of the Company.

As per the IRDAI CG Guidelines, a Statutory Auditor can conduct audit of insurance company for a continuous period of up to ten (10) years. Further, as per the Act, an audit firm can be appointed as Statutory Auditor for not more than two terms of five (5) consecutive years each.

The Members of the Company in the Eighteenth AGM held on July 12, 2018 had approved re-appointment of Chaturvedi & Co., Chartered Accountants, as one of the Joint Statutory Auditors of the Company for a second term of five (5) consecutive years till the conclusion of Twenty-Third AGM.

Further, the Members of the Company in the Twenty-First AGM had approved re-appointment of PKF Sridhar & Santhanam LLP, Chartered Accountants as one of the Joint Statutory Auditors of the Company for a second term of five (5) consecutive years till the conclusion of Twenty-Sixth AGM.

As per the provisions of the Act read with rules made thereunder and IRDAI CG Guidelines, the current second term of Chaturvedi & Co., Chartered Accountants would complete at the conclusion of the Twenty-Third AGM. The Audit Committee and the Board of Directors of the Company have placed on record their sincere appreciation for the professional services rendered by

Chaturvedi & Co., Chartered Accountants during their tenure as one of the Joint Statutory Auditors of the Company.

The Board of Directors of the Company at their Meeting held on April 18, 2023, based on the recommendation of the Audit Committee and after considering the qualifications and experience of Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) and being satisfied that qualifications and experience of Walker Chandiok & Co. LLP, Chartered Accountants is commensurate with the size and requirements of the Company, recommended their appointment as one of the Joint Statutory Auditors of the Company for a period of five (5) consecutive years till the conclusion of Twenty-Eighth AGM, to the Members for their approval.

Walker Chandiok & Co. LLP, Chartered Accountants have expressed their willingness to act as one of the Joint Statutory

Auditors of the Company and have confirmed that they fulfill the conditions of eligibility to be appointed as one of the Joint Statutory Auditors of the Company, as required under the provisions of Sections 139 and 141 of the Act and

IRDAI CG Guidelines.

As required under the Listing Regulations, Walker Chandiok, &

Co. LLP, Chartered Accountants, have also confirmed that they hold a valid Peer Review Certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. Pursuant to the IRDAI CG Guidelines and the applicable provisions of the Act, the Board of Directors of the Company, based on the recommendation of the Audit Committee had approved payment of Rs. 14.1 million as remuneration to each of the Joint Statutory Auditors of the Company for statutory audit of financial statements and financial results of the Company for FY2024 including fee for audit of financial statements of International Financial Services Centre Insurance Office ("IIO"), fees for reviewing the internal financial controls of the Company, issuing certificate on compliance of conditions of Corporate Governance prescribed under the Listing Regulations and other matters as prescribed under the Auditing Standards, subject to approval of the Members of the Company.

The resolution seeking Members approval for appointment of Walker Chandiok & Co. LLP, Chartered Accountants as one of the Joint Statutory Auditors of the Company, for a first term of five (5) consecutive years is forming part of the Notice of Twenty-Third AGM. The brief profile of Walker Chandiok & Co. LLP, Chartered Accountants is provided in the explanatory statement to the Notice of Twenty-Third AGM.

Also, the resolution seeking Members approval for fixing audit remuneration of PKF Sridhar & Santhanam LLP, Chartered Accountants and Walker Chandiok & Co. LLP, Chartered Accountants, for FY2024 is forming part of Notice of

Twenty-Third AGM.

Statutory Audit remuneration and other fees

The details of remuneration and other fees paid to Chaturvedi &

Co. and PKF Sridhar & Santhanam LLP, Joint Statutory Auditors of the Company for FY2023 are provided below:

(Rs. in million)

Particulars Amount
Statutory Audit Fees including Certificate on 27.00
compliance of conditions of Corporate Governance
as prescribed under the Listing Regulations and
Internal control over financial reporting
Tax Audit Fees 1.70
Certification Fees 3.22
Total 31.92

Statutory Auditors Report

The Joint Statutory Auditors?€™ Report for FY2023 on the financial statements of the Company forms part of this Annual Report.

The Joint Statutory Auditors have expressed their unmodified opinion on the the financial statements and their reports do not contain any qualifications, reservations, adverse remarks, or disclaimers.

Secretarial Auditor

Pursuant to provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Dholakia & Associates LLP, Practicing Company Secretaries for conducting the secretarial audit of the Company for FY2023. The Secretarial

Audit Report forms part of this report as Annexure A. There are no qualifications, reservation or adverse remark or disclaimer made by the Secretarial Auditor in the report.

The Board of Directors at their Meeting held on April 18, 2023, based on the recommendation of the Audit Committee, had approved re-appointment of Dholakia & Associates LLP, as a Secretarial Auditor of the Company for conducting Secretarial Audit for FY2024. The Company has received consent from Dholakia & Associates LLP along with their eligibility to act as a Secretarial Auditor of the Company for FY2024.

Reporting of Frauds by Auditors

During the year under review, the Joint Statutory Auditors and Secretarial Auditor of the Company have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee of the Board under

Section 143(12) of the Act.

Maintenance of Cost Records

Being an Insurance Company, the Company is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.

COMPLIANCE TO SECRETARIAL STANDARDS

During the year under review, the Company has been in compliance with the applicable Secretarial Standards i.e. SS-1 and SS-2, issued by the Institute of Company Secretaries of India, with respect to Meetings of Board and its Committees and General Meetings respectively. The Company has devised necessary systems to ensure compliance with the applicable provisions of Secretarial Standards.

PARTICULARS OF EMPLOYEES

The statement containing particulars of employees as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, forms part of this Report as

Annexure B.

The statement containing particulars of employees as required under Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Pursuant to the provisions of the Act, the Annual Report including Financial Statements are being sent to the Members of the Company excluding the aforesaid statement. Further in terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary of the Company at investors@icicilombard.com.

RELATED PARTY TRANSACTIONS

The Company undertakes various transactions with related parties in the ordinary course of business pursuant to the

Policy on Related Party Transactions and Framework on

Related Party Transactions approved by the Board of Directors of the Company.

All related party transactions that were entered, during the year under review, were at an arm?€™s length basis, and in the ordinary course of business and are in compliance with the applicable provisions of the Act and the Listing Regulations.

The Audit Committee has granted omnibus approval to enter into different types of related party transactions which are in ordinary course of business, repetitive in nature and in the best interest of the Company. Further, all related party transactions entered were placed before the Audit Committee on a quarterly basis for which the Company had taken omnibus approval from the Audit Committee.

During the year under review, the Company has amended its Policy on Related Party Transactions and Framework on Related

Party Transactions in line with the amendment made in the

Listing Regulations. The Policy on Related Party Transactions is hosted on the website of the Company and can be viewed at https://www.icicilombard.com/docs/default-source/policies-of-the-company/policy-on-related-party-transactions.pdf

Particulars of Contracts or Arrangements with Related Parties

Pursuant to the provisions of Regulation 23 of the Listing Regulations, effective April 1, 2022, prior approval of Members is required to be sought by means of an ordinary resolution for related party transactions, which are material, even if such transactions are in the ordinary course of the business of the

Company and at an arm?€™s length basis. A transaction with a related party is considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds Rs. 1,000 crore or 10% of the annual consolidated turnover as per the last audited financial statements of the listed entity, whichever is lower.

The Company had identified material related party transactions for FY2023 which required prior approval of the Members of the Company. Accordingly, the Audit Committee and Board of Directors of the Company, through Circular Resolution passed on March 31, 2022 and April 6, 2022 respectively, had approved/considered material related party transactions for

FY2023. Subsequently, the Members of the Company through

Postal Ballot on May 23, 2022 had approved material related party transactions for FY2023.

The Company had further taken approval from the Members in the Twenty-Second AGM of the Company held on August 5,

2022, for material related party transactions that the Company may enter in FY2024 and which may exceed the threshold of "material related party transactions" prescribed under the Listing Regulations. All the transactions as approved by the Members will be executed at an arm?€™s length basis and in the ordinary course of business of the Company.

During the year under review, all the transactions with related parties were in the ordinary course of business and at an arm?€™s length basis. During the year under review, the Company had not entered into any contract / arrangement / transaction with related parties which is required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

As required under Regulation 53(f) read with Para A of Schedule V of the Listing Regulations and Accounting Standard (AS) 18 on Related Party Disclosures, the details of related party transactions entered into by the Company during FY2023 are covered in the Notes to Accounts forming part of the Financial Statements. The Joint Statutory Auditors of the Company have issued an unmodified opinion on the Financial Statements for FY2023 which includes therein related party transactions and related disclosures thereon.

ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Act, the Annual Return of the Company prepared as per Section 92(3) of the Act for the financial year ended March 31, 2023, is hosted on the website of the Company and can be viewed at http://www.icicilombard.com/docs/default- source/ information-to-shareholders/icicilombardmgt72023. In terms of Rules 11 and 12 of the Companies (Management and

Administration) Rules, 2014, the Annual Return shall be filed with the Registrar of Companies, within the prescribed timelines.

RISK MANAGEMENT FRAMEWORK

The Company recognizes that risk is an integral element of insurance business and with a view to mitigate risks, the Company has in place Board approved Risk Management Framework.

A strong risk culture is ensured through embedding the principles of Risk Management Framework in strategy and operations. Accordingly, the Company has developed a risk universe consisting of 28 enterprise-wide risk areas, broadly categorised into six distinct groups, namely, Credit risk, Market Risk, Underwriting Risk, Strategic Risk, Operational Risk and Environmental, Social and Governance Risk.

As part of the Enterprise Risk Management exercise, critical risks along with the detailed mitigation plans are presented to the Risk Management Committee of the Board on a quarterly basis. The risk mitigation plan is monitored regularly by the Company to ensure timely and appropriate execution. The senior management of the Company is responsible for periodic review of the risk management process to ensure that the process initiatives are aligned to the desired objectives. The Chief Risk Officer of the Company is responsible for the implementation and monitoring of the Risk Management Framework.

A statement indicating development and implementation of Risk Management Framework including identification therein elements of risk, if any, which may pose significant risk to the Company are given in the Corporate Governance Report forming part of this Report.

DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance towards sexual harassment and is committed to provide a safe environment for all, which is achieved through well-established robust mechanism for redressal of complaints reported under it.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 provides protection against sexual harassment of women at workplace and lays down the guidelines and timelines for the prevention and redressal of complaints pertaining to sexual harassment. Accordingly, the Company has in place the guidelines on prevention of Sexual Harassment at Workplace and a formal process for dealing with complaints of sexual harassment, in compliance with aforesaid Act. The Company ensures that all such complaints are resolved within defined timelines.

Details of complaints are as follows:

Sr. No. Particulars Amount
a. Number of complaints pending as on April 1, 2022 3
b. Number of complaints filed during the financial year 6
c. Number of complaints disposed of during the financial year 7
d. Number of complaints pending as on March 31, 2023 2*

*The two Complaints pending as on March 31, 2023 were reported in the month of December 2022 and March 2023. The Complaint received in the month of December 2022 was closed as on the date of this report whereas the other complaint received in the month of March 2023 was in the internal Committee?€™s process as on the date of this Report.

To build awareness in this area, the Company has been conducting induction/refresher programmes on a continuous basis. During the year under review, the Company has organised online training sessions on the topics of Gender Sensitisation and Prevention of Sexual Harassment ("POSH") for its employees.

Internal Committee for redressal of complaints

The Company has constituted a Committee for redressal and timely management of sexual harassment complaints. The Internal Committee has a minimum 50% women representatives. The Internal Committee has a senior woman leader as the presiding officer of the Committee and one external member who is a subject matter expert in this regards.

The Company is in compliance with the provisions relating to the constitution of an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

RURAL AND SOCIAL RESPONSIBILITY

As per the Insurance Regulatory and Development Authority of India (Obligations of Insurers to Rural and Social Sectors), Regulations, 2015, the Company has issued 9,210,458 policies in rural areas and covered 6,275,653 lives falling within the norms of social responsibility. The Company has complied with the obligations laid down by IRDAI.

DIVIDEND DISTRIBUTION POLICY

In accordance with Regulation 43A of the Listing Regulations, the Company has adopted the Dividend Distribution Policy, which covers various parameters based on which the Board may recommend or declare Dividend. The Dividend Distribution Policy of the Company is hosted on website of the Company and can be viewed at https://www.icicilombard.com/docs/ default-source/policies-of-the-company/dividend-distribution-policy.pdf

UNPAID/UNCLAIMED DIVIDEND

As per Section 124 and 125 of the Act read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, any dividends that remain unclaimed/unpaid for a period of seven years must be transferred to the Investor Education and Protection

Fund ("IEPF"). During the year under review, unpaid / unclaimed dividend of FY2015 and FY2016 of Rs. 300/- and

Rs. 450/- respectively was transferred by the Company to IEPF. The details of outstanding and unclaimed dividends previously declared and paid by the Company along with the due date of transfer to IEPF are covered in the Corporate Governance Report forming part of this Report.

CORPORATE SOCIAL RESPONSIBILITY & SUSTANABILITY

Corporate Social Responsibility ("CSR") & Sustainability has been a long-standing commitment of the Company and forms an integral part of its activities. The Company?€™s CSR & Sustainability activities primarily focuses on areas like health care, road safety, ensuring environment sustainability, education, skill development and sustainable livelihoods. The CSR & Sustainability activities are largely implemented either directly or through ICICI Foundation for Inclusive

Growth. The Company has duly constituted the Corporate

Social Responsibility & Sustainability Committee ("CSR & Sustainability Committee") in accordance with the provisions of the Act and IRDAI CG Guidelines. The Company has formulated the Corporate Social Responsibility Policy which sets out the framework guiding the Company?€™s CSR

& Sustainability activities. The CSR Policy also sets out the rules that need to be adhered to while taking up and implementing CSR & Sustainability activities. The CSR Policy is hosted on the website of the Company and can be viewed at https://www.icicilombard.com/docs/default- source/ policies-of-the-company/csr-policy.pdf

The Board of Directors of the Company at their Meeting held on July 19, 2022, based on the recommendation of

CSR & Sustainability Committee, had approved the CSR &

Sustainability plan for FY2023 of Rs. 342.6 million i.e. 2% of the average net profits of the Company made during three immediately preceding financial years. The Company has chosen specific areas to focus as part of its CSR & Sustainability roadmap. These include health care, road safety, education, environment sustainability and skill development & sustainable livelihoods.

The CSR & Sustainability plan of the Company for FY2023 was modified by the Board of Directors at their Meeting held on January 17, 2023, based on the recommendation of the CSR & Sustainability Committee in order to include new initiatives within the purview of CSR Policy of the Company.

The Company?€™s actual CSR & Sustainability expenditure was Rs. 347.3 million for FY2023.

In FY2022, total amount of Rs. 29.7 million pertaining to ICICI Foundation?€™s ongoing project towards skill development & sustainable livelihoods was unspent by ICICI Foundation in FY2022 and the same was transferred by the Company in the ‘Unspent CSR Bank account?€™ within the specified timelines in accordance with the provisions of the Act and rules made thereunder. During FY2023, ICICI Foundation has spent the entire amount allocated towards CSR for FY2023 along with unspent CSR obligations of FY2022.

The total CSR & Sustainability spent during FY2023 was

Rs. 377.0 million (i.e. Rs. 347.3 million actual expenditure for FY2023 and Rs. 29.7 million being unspent amount of FY2022). There are no unspent funds required to be carried forward to succeeding years.

In accordance with the provisions of the Act, the Chief

Financial Officer of the Company has certified that the CSR & Sustainability spent of the Company for FY2023 were utilised for the purpose and in the manner as approved by the Board of Directors of the Company from time to time. The certificate in this regard was also placed before the Board of Directors at their Meeting held on April 18, 2023.

The Annual Report on CSR activities of the Company for

FY2023 forms part of this Report as Annexure C. The Company has carried out Impact assessment of its Ride to Safety, Caring Hands and Niranjali CSR projects in pursuance of Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended. The executive summary of Impact Assessment

Reports are covered in the Annual Report on CSR Activities.

CREDIT RATING

During the year under review, the Company has maintained credit rating of "[ICRA] AAA(Stable)" assigned by ICRA Limited and "CRISIL AAA/Stable" assigned by CRISIL Ratings Limited on Rs. 0.35 billion subordinate debentures of the Company.

The ICRA Limited has reaffirmed Issuer Rating of "[ICRA] AAA(Stable)" to the Company.

Pursuant to exercise of Call Option by the Company for redemption of 2,200, Unlisted NCDs on August 23, 2022, the credit rating of "[ICRA] AAA(Stable)" assigned by ICRA Limited and "CRISIL AAA/Stable" assigned by CRISIL Ratings Limited on Rs. 2.20 billion subordinate debentures was withdrawn during the year under review.

Further, AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of "bbb+" (Good) to the Company. The ratings reflect the Company?€™s balance sheet strength, which AM Best assesses as very strong, as well as strong operating performance, neutral business profile and appropriate enterprise risk management.

BUSINESS RESPONSIBILITY AND SUSTAINBILITY REPORT

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Company is required to publish Business Responsibility and Sustainability Report ("BRSR") as part of its Annual Report.

The BRSR maps the sustainability performance of the Company against the nine principles forming part of the National

Guidelines on Responsible Business Conduct issued by the Ministry of Corporate Affairs, Government of India.

Accordingly, the BRSR describing various initiatives taken by the Company in FY2023 has been hosted on the website of the

Company and can be viewed at https://www.icicilombard.com/ docs/default-source/esg/icici-lombard-business-responsibility-and-sustainability-report-fy2023-1.pdf.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

The Company?€™s approach towards Environmental, Social and Governance ("ESG") is underpinned by a strong focus on fulfilling promises responsibly and sustainably so as to benefit the society, employees, shareholders, communities, and all other stakeholders. The Company is revisiting every facet of the organisation to put in place processes, systems and teams to measure, manage and improve across ESG parameters.

The Company has also adopted a responsible and conservative approach to investing that is focussed on balancing investment income to meet policyholder obligation and generating surplus to drive long-term business growth sustainably.

The Company?€™s people-centric work culture provides opportunities for growth and mental resilience for the Company?€™s employees, with a Diversity, Equity and Inclusion ("DEI")strategy built around employees, customers, and brand reputation. DEI vision includes building of an inclusive culture that attracts, develops and celebrates diversity thereby driving innovation and delivering value for all our stakeholders. The DEI strategy and vision is explained in the ESG Report of the Company for FY2023.

The CSR & Sustainability Committee oversees and monitor Sustainability activities including ESG & Business Responsibility and Sustainability initiatives undertaken by the Company. Additionally, the Company also have an ESG

Steering Committee which ensures ESG strategy integration. The ESG Steering Committee aims at discharging its oversight responsibility on matters related to organisation-wide ESG initiatives, targets, action plan and leading ESG practices.

The ESG Report highlighting efforts made by the Company to build a sustainable business model comprehensively for

FY2023 is hosted on the website of the Company and can be viewed at https://www.icicilombard.com/docs/default-source/ esg/icici-lombard-environmental-social-and-governance-fy2023.pdf

INTEGRATED REPORT

The Securities and Exchange Board of India vide its circular dated February 6, 2017 had recommended the top 500 listed entities to voluntarily adopt Integrated Report as per principles prescribed by the International Integrated Reporting Council.

The Company has voluntarily adopted the principles and has shifted its corporate reporting journey to Integrated Report as per the International Integrated Reporting Council ("IIRC") framework. The Integrated Report encompasses both financial and non-financial information to enable the Members to take well informed decisions and have a better understanding of the Company?€™s long term perspective. The Company?€™s Integrated Report is based on six forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social & relationship capital and natural capital.

The Company continues to publish its fifth Integrated Report which forms part of this Annual Report.

INVESTOR RELATIONS

The Company is committed to achieving excellence in its Investor Relations engagement with both International and

Domestic investors. To achieve this goal, the Company continuously adopts emerging best practices in Investor

Relations and strives to build relationship of mutual understanding with investor/analysts.

The importance of ESG has increased significantly in recent times. Therefore, the Company has placed a strong emphasis on ESG and Sustainability initiatives to ensure positive feedback from all its stakeholders. ESG initiatives of the Company encompasses topics such as operational eco efficiency, strengthening diversity, responsible investments, sustainable underwriting, strong governance, robust enterprise risk management amongst others. The Company has disclosed its ESG initiatives as a part of BRSR and ESG report which is hosted on its website.

The Managing Director & CEO, Executive Directors, Chief Financial Officer & Chief Risk Officer and other authorised senior management members participate in structured conference calls and periodic investor/analyst interactions including one-on-one/group meeting, investor conferences and quarterly earning calls. The Company has conducted 266 meetings with Indian and overseas investors and analysts (excluding quarterly earnings calls) during the year. The transcripts of the quarterly earnings calls and audio recordings are also hosted on the website of the Company and Stock Exchanges where the securities of the Company are listed within the timelines as prescribed under the Listing Regulations.

The Company had also organised an investor/analyst interaction to showcase its Digital initiatives. The focus areas of the above meet included digital ecosystem, digital solutions across the customer lifecycle, holistic risk management solutions and adoption of digital processes across business lines.

The Company ensures that financial information is available to all the stakeholders by uploading it on the Company?€™s website and website of the Stock Exchanges where the securities of the Company are listed. The financial information includes

Financial Statements, Press Releases, Investor Presentations, Earning call transcripts, publication of financial results in the newspapers and Annual Report, etc.

EVENTS AFTER BALANCE SHEET DATE

There have been no material changes and commitments, affecting the financial position of the Company, between the end of the financial year of the Company to which the balance sheet relates and the date of this report.