ICICI Prudential Life Insurance Company Ltd Directors Report.

TO THE MEMBERS

ICICI Prudential Life Insurance Company Limited

Your Directors have pleasure in presenting the 20th Annual Report of ICICI Prudential Life Insurance Company Limited (the Company) with the audited statement of accounts for the year ended March 31, 2020 (FY2020).

performance

Industry in FY2020

New business premium (NBP) for the industry, based on retail weighted received premium (RWRP), grew 6.2% from Rs691.83 billion in FY2019 to Rs734.88 billion in FY2020. The market share of private players decreased from 58.0% in FY2019 to 57.2% in FY2020.

Company in FY2020

Our strategy continues to be creation of value for our key stakeholders, namely, customers, employees and shareholders.

Customer centricity continues to be at the core of everything we do. With our customer centric approach, we have had a robust performance across service parameters. Our claim settlement ratio for individual death claims was 97.8% for FY2020. Average time taken for settlement of non- investigated death claims reduced to 1.6 days in FY2020. Our grievance ratio has improved to 48 per 10,000 new business policies issued for FY2020. Our 13th month persistency ratio1 was 86.8% for FY2020.

Our commitment to our employees is based on the three cornerstones of Fairness & Meritocracy, providing a Supportive environment and Learning & Growth. We aim to facilitate capability building through classroom and on the-job training, virtual learning, job rotation, job enrichment and other opportunities for career progression. The Company has both leadership depth and breadth, with 85% of the senior management team having served the Company for more than 10 years and with 94% of the senior management having done at least three job rotations during their tenure with us.

For our shareholders, our primary focus continues to be the growth of the absolute value of new business (VNB) through the 4P strategy of premium growth, protection business growth, persistency improvement and productivity improvement targeted at improving cost ratios. We believe that this 4P strategy is appropriate in the context of the large insurance opportunity in the country, coupled with our objective to grow the VNB.

Premium growth: Our new business received premium grew by 20.4% from Rs102.52 billion in FY2019 to Rs123.48 billion in FY2020. The Annualised Premium Equivalent (APE) for the Company declined by 5.4% from Rs77.99 billion in FY2019 to Rs73.81 billion in FY2020. In FY2020, the Company had a market share of 9.0% based on RWRP

Protection business growth: The Company continued to focus on the protection business, which grew by 54.6% from Rs7.22 billion in FY2019 to Rs11.16 billion in FY2020. New business sum assured grew by 29.0% to Rs5.71 trillion in FY2020.

Persistency improvement: For FY2020, our persistency ratios1 for 13th month and 49th month were stable at 86.8% and 67.3% respectively. Our retail renewal premium increased by 2.2% from Rs202.25 billion in FY2019 to Rs206.64 billion in FY2020. The Companys assets under management at March 31, 2020 were Rs1,529.68 billion.

Productivity improvement: Total expenses increased from Rs41.94 billion in FY2019 to Rs44.71 billion in FY2020. The total cost to total weighted received premium (TWRP2) ratio increased from 15.0% in FY2019 to 15.9% in FY2020. Protection products are value accretive in terms of VNB, though the cost ratio for protection products is significantly higher than savings products. The total cost to TWRP ratio for savings business improved from 11.5% in FY2019 to 10.4% in FY2020.

Consequently, Value of New Business (VNB) grew from Rs13.28 billion in FY2019 to Rs16.05 billion in FY2020, representing an increase of 20.9%.

Embedded value increased from Rs216.23 billion at March 31, 2019 to Rs230.30 billion at March 31, 2020.

A summary of key financial and business parameters is set out below:

Particulars FY2019 FY2020
New business premium 102.52 123.48
Annualised premium equivalent 77.99 73.81
Savings

70.77

62.65

Protection

7.22

11.16

Sum assured for new business 4,428.12 5,711.84
13th month persistency1 86.2% 86.8%
49th month persistency1 65.0% 67.3%
Retail renewal premium 202.25 206.64
Cost to total weighted received 15.0% 15.9%
premium (TWRP)2
Cost to TWRP (savings) 11.5% 10.4%
Value of new business (VNB) 13.28 16.05
Embedded value (EV) 216.23 230.30

outlook for the industry and the Company

In India, several reforms have been implemented, including the goods and services tax (GST), the inflation-targeting framework, the Insolvency and Bankruptcy Code, and steps to liberalise foreign investment. There has

been an increased focus on financialisation of household savings. The life insurance industry is an important component of financial savings and is expected to gain from this focus.

Increasing financial savings, digitisation and the improving customer proposition of insurance products, coupled with fundamental strengths of the Indian economy (high gross domestic product growth, high savings and investment rate and favourable demography) are expected to provide continued fillip to the growth of the life insurance industry in India.

The Company would continue to focus on its objective of growing value of new business (VNB) through the 4P approach.

Premium growth: The Company would endeavour to grow premium through

• Deepening penetration in under-served customer segments:

The Company would continue to focus on broadening the customer base through initiatives spanning across both distribution and products.

• Enhancing distribution: The Company would strengthen its distribution through a closer mapping of distribution segments with customer segments and products. The Company is also focused on expanding the distribution network through acquisition of new partners as well investing in creation of new sourcing channels.

• Focus on pension & annuity: The Company would continue to cater to the retirement savings need of customers while managing the investment risk appropriately.

Protection business growth: The Company is focused on expanding the health & protection business across both retail and group lines of business. This would be done by offering protection products across channels, penetrating the online term insurance market and partnering with loan providers to offer coverage against loans.

Persistency improvement: The Company would seek to drive persistency improvements across all durations by encouraging long term behaviour in customers.

Productivity improvement; The Company would focus on cost efficiency and in particular would leverage the digital platform to improve customer experience and efficiency of service operations.

our Reach

The Company reaches its customers through 517 offices in 449 locations at March 31,2020. On March 31,2020, the Company had 14,630 employees and 190,924 advisors to cater to the needs of customers. The Company distributes its products through agents, corporate agents, banks, brokers, proprietary sales force (PSF) and online channels.

Products

Broadly, all the Companys products can be categorised into savings and protection. Savings products are offered on three platforms - linked, participating and non-participating. Life insurance cover offered is generally the same across all savings products i.e. 10 times annual premium.

Protection products are available on retail, group and credit life platforms. These products provide cover for life, disability, critical illness and accidental death.

Claims

The Company, keeping in mind its philosophy of settling genuine claims quickly, has initiated Claim For Sure-One day claim settlement and has settled 4,658 claims under the same since July 29, 2019.

The Company has settled over 107,000 mortality claims amounting to a total of Rs15,530.52 million in FY2020 with individual claims settlement ratio of 97.84% and group claim settlement ratio of 95.17%.

Further, the Company has also paid 105,824 maturity claims from its retail business operations and over 100,000 survival benefit claims amounting to Rs23,820.12 million and Rs2,914.58 million, respectively. Additionally, the Company has settled 326,558 surrender claims from its retail business operations and 27,032 from group business, amounting to a total of Rs149,691.40 million.

For non-investigated individual claims, the settlement was completed within an average turnaround time of 1.59 days from the receipt of the last requirement as compared to 30 days allowed by the regulator.

subsidiary

The Companys wholly owned unlisted subsidiary, ICICI Prudential Pension Funds Management Company Limited (PFM) acts as a pension fund manager under the National Pension System (NPS) with the objective of providing a strategic platform to leverage the substantial pension opportunity in India due to the lack of formal retirement provisions for a large segment of the population.

During FY2020, the subscribe funds managed by PFM have increased by 25.2% from Rs34,759.7 million at March 31, 2019 to Rs43,525.5 million at March 31, 2020. The PFM registered a loss of Rs17.7 million (previous year: loss of Rs17.2 million). The overall contribution of the subsidiary to the financial results of the Company is not significant currently as the subsidiary is still scaling up.

PFM is allowed to serve as a Point of Presence (PoP), enabling distribution of NPS products and servicing. The PFM commenced its PoP business during Q2-FY2020 and is currently in the process of scaling-it up.

The Company will make available separate audited financial statements of the subsidiary company to any Member upon request. These documents/ details are available on the Companys website (www.iciciprulife.com) and will also be made available for inspection by any Member of the Company at its registered office. A statement containing salient features of the financial statements of the subsidiary company forms part of the financial statements of the Company.

Rural and social business

The Company has micro insurance retail products and group micro insurance products to cater to the protection need of the unorganised and economically vulnerable section of the society.

• The Company has provided risk cover to self-help group (SHG) members predominantly in the rural areas of Tamil Nadu, Maharashtra, Karnataka & Rajasthan. These members belong to a group of micro entrepreneurs having homogeneous social and economic background, who come together to avail micro credit for financing their small and micro enterprises.

• The Company partners with micro finance institutions and extends group micro insurance cover to customers for covering their loss of income risk arising out of unfortunate and untimely demise.

• 163,962 policies were issued in rural areas, constituting 21.38% of total policy issuances. The Company also covered 3,293,878 lives as a part of its social sectorRsbusiness.

FINANCIALS & AUDIT Financials

Particulars

standalone

Consolidated

FY2019 FY2020 FY2019 FY2020
Profit after tax 11.41 10.69 11.39 10.67
Balance brought forward from previous year 16.96 19.89 16.93 19.84
Profit available for appropriations 28.37 30.58 28.32 30.51
Appropriations:
Interim Equity Dividend (2.30) (1.15) (2.30) (1.15)
Final Equity Dividend (4.74) (2.23) (4.74) (2.23)
Tax on Equity Dividend (1.44) (0.69) (1.44) (0.69)
surplus carried to next years account 19.89 26.51 19.84 26.44

The financial position of the Company remained strong with a solvency ratio of 194.1% at March 31, 2020 (214.9% at March 31, 2019) against the minimum regulatory requirement of 150%.

Dividend and dividend distribution policy

The operations have resulted in a profit after tax of Rs10.69 billion in fiscal 2020 as compared to a profit after tax of Rs11.41 billion for the previous year. The decline in profit is primarily on account of growth in protection and annuity businesses, which have been our focus areas.

The Board has amended the dividend distribution policy to set the maximum limit of dividend ratio of 30% of PAT. The revision is in line with our objective of conserving capital, primarily to support the strong growth in the protection business. Given the uncertain environment, the IRDAI had vide its circular on prudent management of financial resources in response to COVID-19, urged the insurers to take a conscious call to conserve capital and refrain from dividend pay-outs from profits pertaining to the financial year ending March 31, 2020, till further instructions. Consequently, the Board, after due consideration of the IRDAI circular did not propose any final dividend for the year ended March 31, 2020. The Board had already approved payment of interim dividend of Rs0.80 per equity share, at its Meeting held on October 22, 2019.

In terms of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") the Dividend Distribution Policy of the Company is disclosed on its website https://www.iciciprulife.com/about-us/corporate-policies.html.

Transfer of unclaimed dividend and shares to Investor Education & Protection Fund (IEPF)

Pursuant to the provisions of Section 124 of the Companies Act, 2013 (CA2013), the amounts of dividend remaining unpaid or unclaimed

for a period of seven years from the date of its transfer to the unpaid dividend accounts of the Company are required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. The unclaimed dividend for the financial year ended March 31, 2013 and March 31, 2014, would be transferred to the IEPF in FY2020- 21. The corresponding shares, if the dividend is unclaimed for a period of seven years alongwith the unclaimed dividend would also be transferred to the demat account of the IEPF Authority.

Members who have not yet encashed their dividend warrant(s) can claim the same in accordance with the process as made available on the website of the Company by accessing the following link https://www.iciciprulife. com/about-us/shareholder-information/dividends.html.

Particulars of loans, guarantees or investments

The provisions of Section 186(4) of the CA2013, requiring disclosure in the financial statements of the full particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the Company are not applicable to an insurance company.

Particulars of contracts or arrangements with related parties

The particulars of contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the CA2013 including certain arms length transactions under third proviso thereto are disclosed in Form AOC -2 appended as Annexure A. Further, as per the shareholding pattern of the related parties, only ICICI Bank Limited and Prudential Corporations Holdings Limited have a holding in the Company for 10% or more. The transactions with these entities are disclosed in the note 3.10 of related party transactions under notes to accounts.

The Company has a Board approved policy on Related Party Transactions, which has been hosted on the website of the Company and can be viewed at https://www.iciciprulife.com/about-us/corporate-policies.html.

Public deposits

During the year under review, the Company has not accepted any deposits under Section 73 of the CA2013.

AUDITORS Statutory auditors

B S R & Co. LLP bearing registration number 101248W/W-100022, Chartered Accountants and Walker Chandiok & Co LLP bearing registration number 001076N/N500013, Chartered Accountants are the joint statutory auditors of the Company. Walker Chandiok & Co LLP and B S R & Co. LLP would hold office upto conclusion of 21st and 24th annual general meeting (AGM) of the Company, respectively.

Fees for services to statutory auditors

The Company has incurred Rs19.49 million as statutory audit fees for the year ended March 31, 2020. Further, the Company has not availed any other services from the statutory auditors or its network entities/affiliated firms during the year ended March 31, 2020.

secretarial auditors

The Company has, with the approval of its Board of Directors, appointed M/s. Makarand M. Joshi & Co., Company Secretaries to undertake secretarial audit of the Company for FY2020. The secretarial audit report is annexed herewith as Annexure B. There are no qualifications, reservation or adverse remarks made by the auditor in their report.

Auditors report

There is no qualification, reservation, adverse remark or disclaimer made by the auditors in their report. There were no reportable frauds identified by the auditors during the FY2020.

compliance and risk

statement in respect of adequacy of internal financial controls

The Company has established an internal financial control framework comprising internal controls over financial reporting, operating controls and fraud prevention controls. The framework is designed to ensure accuracy, completeness and reliability of financial records, orderly and efficient conduct of business and safeguarding of assets as well as prevention and detection of fraud. The key components of the internal financial control framework include:

Entity level controls: The control environment of the Company relies on a set of Entity Level Controls (ELCs) which operate at an organisation level and may not be embedded in any single process of the Company. The ELCs set up by the Company include:

(a) Corporate governance framework comprising Board and Executive committees for oversight on the management of the Company.

(b) Policies commensurate with the Companys size and level of complexity to establish standards of conduct including code of conduct, whistle blower policy, work place harassment, conflict of interest, insurance awareness and customer education policy, grievance redressal policy, record maintenance policy and accounting policy etc.

(c) Risk and fraud management framework to identify, measure, monitor and control various risks including operational risk and framework for identifying, monitoring and control over outsourced activities.

(d) Independent internal audit department with oversight from the Audit Committee.

(e) Employee management framework comprising of hiring, retention, training, performance evaluation, remuneration structure, employee stock options & benefits, succession planning through leadership cover index etc.

(f) Framework to ensure compliance to regulations, laws including compliance certification, communication of changes in regulations/ laws etc. and litigation management.

(g) Budgeting, monitoring and reporting of the performance with key performance indicators.

(h) Information and cyber security policy & information security framework along with framework to ensure business continuity and disaster recovery.

operating controls: These comprise IT and process controls operating at a

system/ process level with the objective of providing assurance at a transaction

recording stage. Salient aspects of the control framework include:

(a) The Company has implemented the internal control framework 2013 given by Committee of Sponsoring Organisations (COSO) of the Treadway Commission for ensuring compliance with Section 404 of Sarbanes Oxley Act, 2002 and internal financial control (IFC) as per Section 134(5) of the Companies Act, 2013 and Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All business processes having implication on financial results are subject to quarterly reviews. Any material deficiency is discussed at the Audit Committee.

(b) The Company has deployed automation in most aspects of transaction processing including policy administration, investment management, actuarial computations, expense processing, claims management, human resource processes and accounting to ensure greater control and efficiency.

(c) The Company has in place a robust IT control environment with integrated systems, interface controls, centralised data warehouse, spreadsheet controls and access controls.

(d) The Company has a vendor on-boarding process with due diligence, risk assessment, document review and periodic assessment to ensure controls over third party service providers relevant from a financial reporting perspective. Further, the Board Risk Management Committee has an oversight on implementation of controls and monitors performance of the outsourced vendors.

(e) The Company ensures controls on safeguarding of assets comprising investment assets, IT assets and other assets.

Review controls: Review control comprises multiple levels of oversight over financial reporting by way of a strong reporting and review framework as follows:

(a) The financials prepared are audited by joint statutory auditors and are reviewed by Audit Committee. They are also submitted to Insurance Regulatory Development Authority of India (IRDAI).

(b) The internal audit team exercises independent oversight over operational and financial processes and significant observations and recommendations are presented to the Audit Committee. Investment operations is subject to daily concurrent audit certification and an Investment Risk Management Systems (IRMS) audit once in two years. Any significant findings in the concurrent audit or IRMS audit are presented to the Audit Committee.

(c) The Company has an effective organisation structure which segregates duties among business groups thereby ensuring orderly and efficient conduct of business. Additionally, the Board has constituted various committees responsible for specific operational areas, formulation of policies and framework, identification, assessment & monitoring of principal risks in accordance with the policies & procedures.

(d) Management exercises review control by way of in depth reviews of financials, ledger balances, suspense and payables, liability assumptions, information security, regulatory compliance, communication and reporting, key compliance issues and supervision of risk management function etc. conducted by Chief Financial Officer, Appointed Actuary, Head of Information Technology, Head of Operations and Head of Compliance & Risk.

Fraud prevention: The Company has a Board approved fraud risk management policy. The Company has an Operational Risk Management Committee (ORMC) which independently monitors frauds. The ORMC reports to Executive Risk Committee which in turn reports to Board Risk Management Committee (BRMC).

(a) The fraud control framework consists of preventive measures and incident management. Preventive management includes fraud risk assessment for design of processes, investigation triggers across policy life cycle and proactive use of analytics to identify fraud patterns. Incident management includes recovery of loss, detailed investigation & root cause analysis and fraud incident reporting to BRMC.

(b) The Company ensures implementation of controls to prevent repeat incidents, financial recovery process and disciplinary action against involved employees. It also initiates actions through law enforcement authorities based on severity of the incident.

(c) The Company undertakes several measures from time to time to create awareness amongst its employees and customers against fraudulent practices.

(d) The Company is in compliance with Insurance Fraud Monitoring FrameworkRsguidelines issued by IRDAI.

Internal audit and compliance framework

Internal audit:

The Company has in place an internal audit framework with a risk based audit approach. The basic philosophy of risk based internal audit is to provide reasonable assurance to the Board Audit Committee and management about the adequacy and effectiveness of the risk management and control framework in the Company. Review of controls is undertaken through execution of internal audits as per risk based audit plan. The internal audit covers auditing of processes, transactions and systems. Key audit observations and recommendations made are reported to the Board Audit Committee every quarter. Implementation of the recommendations is actively monitored.

Compliance:

The Board Audit Committee oversees the compliance framework of the Company. The Company has formulated various internal policies/ procedures and an employee code of conduct, which govern the day-today activities to ensure compliance. The compliance function disseminates the information regarding the relevant laws, regulations and circulars related to insurance and anti-money laundering to various functions. It also serves as a reference point for the staff of various functions for seeking clarifications on applicable laws, regulations and circulars issued by the regulatory authorities. The compliance team also monitors the adequacy of the compliance framework across the Company with Internal Audit function through an integrated risk based audit plan. Key issues observed as part of this monitoring are reported to the Board Audit Committee, and implementation of recommendations is actively monitored. A compliance certificate signed by the Managing Director & CEO, based on the certification from respective functional heads, is placed at the Board Audit Committee and Board of Directors on a quarterly basis.

Ind As implementation

International Accounting Standard Board (IASB) had issued IFRS 17 Insurance Contracts on May 18, 2017, effective mandatorily from January 1, 2021. Subsequently, Insurance Regulatory and Development Authority of India (IRDAI) reviewed the Ind AS implementation and noted that Ind AS in its current form is likely to lead a mismatch in asset & liability accounting, along with volatility in financial statements of insurance companies with double transition. Therefore, IRDAI through circular dated June 28, 2017 deferred the implementation of Ind AS for a period of two years with applicability for accounting periods beginning from April 1, 2020.

IRDAI vide circular dated January 21, 2020 further deferred the implementation of IND AS in Insurance sector in India since the IASB had indicated that they aim to issue final amendments to IFRS 17 by mid-2020. A corresponding standard to IFRS 17 and regulations on preparation of Ind AS compliant financial statements would be notified by Ministry of Corporate Affairs (MCA) post finalisation of IFRS 17 by IASB. Accordingly, IRDAI had withdrawn the circular dated June 28, 2017 which required submission of Proforma Ind AS financial statements on a quarterly basis.

IASB on March 17, 2020 deferred the effective date of IFRS 17, Insurance Contracts to annual period beginning on or after January 1, 2023. IASB also decided to extend the exemption currently in place for some insurers regarding the application of IFRS 9 Financial Instruments to enable them to implement both IFRS 9 and IFRS 17 at the same time.

Risk management

The Company recognises that risk is an integral element of the business and managing risk is essential for generating shareholder value. The risk governance structure of the Company consists the Board, the Board Risk Management Committee (BRMC), the Executive Risk Committee (ERC) and its sub-committees. The Board approved risk policy details identification, measurement, monitoring and control standards relating to the various individual risks, namely investment (market, credit and liquidity), insurance and operational risks.

1. Investment risk

I nvestment risk is the risk arising out of variations in the level or volatility of market prices of assets and financial instruments, including the risk arising from any mismatch between assets and liabilities, due to external market and economic factors. The Company faces limited liquidity risk due to the nature of its liabilities. The key mitigation approaches for this risk are as follows:

(a) Product approval process: Launching new products can significantly alter the risk profile of the Companys balance sheet. Investment risks inherent in the new products or significant modifications to existing products are identified at the product design stage and products are launched only after approval by the ERC.

(b) Asset Liability Management (ALM): The Company has detailed Investment Specifications that govern the investment strategy and limits for each fund depending on the profile of the liability backed by those assets. For each category of products, the Investment Specifications specify limits to permissible exposures to various asset classes, duration guidelines for fixed income instruments and minimum investment in liquid assets.

(c) Exposure limits have been defined for companies, groups and industries in accordance with IRDAI guidelines and the Companys internal Investment Policy. The Company restricts investments primarily to securities rated AA and above.

(d) The Company has a liquidity contingency plan in place.

2. Insurance risk

I nsurance risk is the risk arising because of variance to the best estimate or because of random fluctuations in the frequency, size and timing of insurance liabilities. Insurance risk comprise the following components: mortality, morbidity, persistency and expense risk. These risks are mitigated through:

(a) Product approval process: Insurance risks inherent in the new products or significant modifications to existing products are identified at the product design stage and products are launched only after approval by the ERC. The Company in its product design incorporates product features and uses appropriate policy wordings to mitigate insurance risk.

(b) Reinsurance: The Company uses appropriate reinsurance arrangements, including catastrophe reinsurance, to manage insurance risk. The arrangements are with select and financially sound reinsurers. The Companys reinsurance exposures are considered and approved by the ERC periodically.

(c) Underwriting and claims controls: Underwriting and claims policies and procedures are in place to assess and manage mortality and morbidity risks. The Company seeks to minimise these risks by diversifying its business portfolio and adhering to appropriate and segmented underwriting norms. The Company conducts periodic reviews of both underwriting and claims procedures.

(d) Experience analysis: The Company conducts its experience analysis regularly to ensure that corrective action can be initiated at the earliest opportunity and that assumptions used in product pricing, reserving and embedded value reporting are in line with experience. The Company actively monitors its claims experience, persistency levels and expense ratios.

(e) Aligning key performance indicators: The Company uses appropriate key performance indicators for different levels of hierarchy in sales and operations to align interests and ensure adequate focus on insurance risk specially, persistency and expense.

3. Operational risk:

Operational risk is the risk of loss, resulting from inadequate or failed

internal processes, people and systems, or from external events.

The Company uses the following approaches to manage the risk:

(a) The Company develops and monitors mitigation plans for high risk items identified through the Risk Control Self-Assessment (RCSA) done by each business function, loss events and/or audit findings.

(b) The Company continuously monitors the internal loss events and ensures adequate mitigation for material impact events to avoid repeat instances.

(c) The Company actively promotes a risk awareness culture by improving understanding through communication and education amongst management, employees, contractors and vendors. It further engages with the law enforcement agencies to create awareness on various insurance frauds and emerging issues.

(d) Fraud management: The Company follows both a proactive and reactive approach to manage fraud. Proactive management is done by using triggers to identify suspected frauds and through random sample checks. Reactive management is done through incident management. Investigation is done for identification of process/system failures and/or identification of responsible internal/external parties. The Company ensures implementation of controls to prevent repeat incidents, financial recovery process and disciplinary action against involved employees in accordance to disciplinary action matrix. It also initiates actions through law enforcement authorities based on severity of the incident.

(e) Outsourcing Risk: Processes of the Company are outsourced as permitted under the regulatory guidelines. The Company carries out required due-diligence for any new activity or vendor empanelment and annual assessment of outsourced vendors.

(f) Business Continuity Management (BCM): The Company has a BCM framework to ensure resilience and continuity of key products and services at minimum acceptable level to achieve business-as usual presence in the market place and safety of human resources. This includes systems and processes including use of disaster recovery sites and business continuity plans for critical processes which are being tested periodically. Based on the business continuity practices followed, the Company has been awarded certification under ISO 22301:2012 standard.

(g) Information and Cyber Security: The Company has an information and cyber security framework that ensures all information assets are safeguarded by establishing comprehensive management processes throughout the organisation. The Companys controls include deployment of security solutions like firewall, intrusion prevention system, anti-malware solution and dynamic URL filtering. Further, a program for regular vulnerability assessment of critical IT applications and infrastructure.

(h) Whistle-blower policy that facilitates reporting of observed breaches. Code of conduct defines the disciplinary action on the non-compliant behavior of the employee.

COMPANYS RESPONSE TO COVID-19 PANDEMIC

The Coronavirus disease (COVID-19) pandemic has impacted us all. In response to this situation, and the nation-wide lock down impacting the economic activities and all the stakeholders, your Company has responsibly activated the business continuity plan (BCP). As a provider of essential services, your Company tracked developments and enabled a conducive environment for functioning of the Company and fulfilling its duties, while complying with all necessary regulatory and statutory directives.

For employees, work from home was enabled, their health status was periodically tracked and awareness and guidance initiatives were undertaken to keep them healthy and engaged.

Customers were also engaged to make them aware about the disease and measures to help them transact on their policies from the safety of their homes on your Companys robust digital platforms.

Distributors were encouraged to digitally close pending requirements in addition to the continuous engagement to improve the digital connect with customers.

As a responsible corporate, the Company contributed in procuring ventilators, sanitizers and other consumables to fight the pandemic in addition to the contribution to the Prime Ministers Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund).

In addition to adhering to all requirements, the Company continually engaged IRDAI for their guidance and support.

Code of conduct under Securities and Exchange Board of India (Prohibition of Insider Trading) regulations, 2015

The Company has in place a Code of conduct to regulate, monitor and report trades in Securities by Designated Persons ("Code") which is in accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 as amended. The Code is applicable to the Directors, employees of the Company, Designated Persons, and their immediate relatives, to the extent applicable. The objective of the Code is to achieve compliance to the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations.

CEO/CFO certification

In terms of the Listing Regulations, the certification by the Managing Director & CEO and Chief Financial Officer on the financial statements and internal controls relating to financial reporting has been obtained.

corporate governance

The Company considers its stakeholders as partners in success, and remains committed to delivering stakeholders value. The Company believes that a sound corporate governance mechanism is critical to retain and enhance stakeholdersRstrust. It is committed to exercise overall responsibilities rigorously and diligently throughout the organisation, managing its affairs in a manner consistent with corporate governance requirements.

The Companys corporate governance philosophy is based on an effective independent Board, the separation of Boards supervisory role from the executive management. The Board Committees, generally comprising a majority of independent/non-executive Directors and chaired by independent Directors, to oversee critical areas.

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 of future operations of the Company.

Compliance with Secretarial Standards

The Company has been in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India for the financial year 2020.

Annual return

A copy of the annual return filed with the Registrar of Companies for FY2019 is placed on the website of the Company and for FY2020, shall be placed on the website of the Company at https://www.iciciprulife. com/about-us/shareholder-information/other.html in accordance with the provisions of the CA2013. Further, the details forming part of the extract of the annual return in form MGT-9 is annexed herewith as Annexure C.

Particulars of employees

The statement containing the particulars of employees as required under Section 197(12) of the CA2013, read with Rule 5(2) of the Companies

(Appointment & Remuneration) Rules, 2014, is set out in an Annexure and forms part of this Report. In terms of Section 136(1) of CA2013 the Report and the Accounts are sent to the members excluding the aforesaid Annexure. Any member interested in obtaining a copy of this Annexure may write to the Company Secretary at the Registered Office of the Company.

Corporate Social Responsibility (CSR) initiatives

The Corporate Social Responsibility policy as approved by the Board has been hosted on the Companys website (https://www.iciciprulife.com/ about-us/corporate-policies.html).

The Company has spent Rs171.6 million for FY2020 towards CSR programs as against Rs170.7 million required to be spent, which is, two per cent of the average net profits made during the three immediately preceding financial years, in accordance with section 135 of the Companies Act 2013.

The detailed annual report on Corporate Social Responsibility activities is annexed herewith as Annexure D.

Sexual harassment policy

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 provides protection against sexual harassment of women at the workplace and for the prevention and redressal of complaints of sexual harassment. The Company has a laid down policy on sexual harassment at the workplace and has it available to all its employees on the Company intranet. The Company believes in providing a safe working environment at the workplace. On an ongoing basis, the Company creates education & awareness amongst employees. During the calendar year 2019, 12 complaints on sexual harassment were filed, which were investigated and dealt with. There are no pending complaints for the calendar year.

Further, the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Whistle blower policy

The Company has formulated whistle blower policy to encourage employees to report matters without the risk of subsequent victimisation, discrimination or disadvantage.

The Company is committed to adopting the highest business, governance, ethical and legal standards. Whistle blower policy "the policy" aims to provide a mechanism to ensure that concerns are properly raised, appropriately investigated and addressed.

As per the policy, employees or Directors can raise concerns related to breach of any law, statute or regulation, issues related to accounting policies and procedures, acts resulting in financial loss or loss of reputation, misuse of office, suspected/actual fraud and criminal offences, noncompliance to anti-bribery & anti-corruption policy, leak of any unpublished price sensitivity information (UPSI) pursuant to SEBI Regulations or any such information prescribed pursuant to any regulations/laws, as amended from time to time by the Company or its employees. Such complaints are reported to the Board Audit Committee.

No whistle blower has been denied access to the Chairman of the Board Audit Committee.

The policy has been periodically communicated to the employees and an extract of the same has also been posted on the Companys intranet and details pertaining to establishment of vigil mechanism is hosted on the website at https://www.iciciprulife.com/about-us/corporate-policies.html.

Code of conduct

The Company has a code of conduct (Code) for Directors and employees of the Company, which was last reviewed by the Board of Directors at its meeting held on July 24, 2019. The Code aims at ensuring consistent standards of conduct and ethical business practices across the constituents of the Company. The Code lays down the broad framework of general guiding principles. This Code is available on the website of the Company (https://www.iciciprulife.com/about-us/corporate-policies.html). Pursuant to the Listing Regulations, a confirmation from the Managing Director & CEO regarding compliance with the Code by all the Directors and senior management forms part of the Annual Report.

Policy for determining material subsidiaries

In accordance with the requirements of the Listing Regulations, the Company has formulated a policy for determining material subsidiaries and the same has been hosted on the website of the Company (https://www. iciciprulife.com/about-us/corporate-policies.html).

Board of Directors

The Companys Board is constituted in compliance with the CA2013, in accordance with Listing Regulations and IRDAI Corporate Governance Guidelines, 2016. At March 31,2020, the Board comprised five independent Directors, three non-executive Directors, two of whom are nominated by ICICI Bank Limited and one by Prudential Corporation Holdings Limited, the Managing Director & CEO and the Deputy Managing Director. Except the Managing Director & CEO and the Deputy Managing Director, all other Directors including the Chairman of the Board are non-executive Directors. The Board is responsible for corporate strategy and other responsibilities as laid down by IRDAI under the Corporate Governance guidelines. The Managing Director & CEO and the Deputy Managing Director oversee implementation of the strategy, achievement of the business plan and day- to-day operations. There is an appropriate mix of executive, non-executive and independent Directors. None of the Directors are related to any other Director or employee of the Company.

The Board functions either as a full Board or through various Committees constituted to oversee specific areas. The Board has constituted committees, namely, Board Audit Committee, Board Risk Management Committee, Board Investment Committee, Board Customer Service & PolicyholdersRsProtection Committee, Board Nomination and Remuneration Committee, Board Corporate Social Responsibility Committee, Stakeholders Relationship Committee, With Profits Committee and Strategy Committee.

The Company recognises that a diverse Board will have different thoughts, perspectives, knowledge, skill, industry experience, age and gender, which will ensure that the Company retains its competitive advantage. The Board Nomination & Remuneration Committee recommends the appointment of Director(s) to the Board of the Company based on the criteria for appointment of Directors.

The Company, in accordance with the criteria for appointment of the Directors and official(s) who may be appointed in senior management of the CompanyRs(Criteria), have identified the areas of knowledge, core skills and expertise or competence which would be required to be possessed by the Board of the Directors of the Company. The identified areas of skills included finance & accountancy, banking, insurance, strategy and corporate planning, risk management, securities, economics, law and governance and consumer insights/marketing. The Directors of the Company have the skills and expertise as prescribed in the criteria, details of which are given below.

The names of the Directors of the Company, at March 31, 2020, with their qualification, field of specialisation/core skills/expertise are as set out in the below table:

Name of the Director Directors Identification Number (DIN) Qualification Field of specialisation/ existing skills/ areas of core expertise
Non-executive non-independent Directors
Mr. Anup Bagchi, non-executive Director nominated by ICICI Bank Limited 00105962 Management degree from IIM Bangalore and Engineering degree from IIT Kanpur Finance & accountancy, banking, securities, strategy and corporate planning
Mr. Sandeep Batra, non-executive Director nominated by ICICI Bank Limited 03620913 Chartered Accountant and Company Secretary Finance & accountancy, banking, insurance, risk management, securities, law and governance
Mr. Raghunath Hariharan, non-executive Director nominated by Prudential Corporation Holdings Limited 08007442 Master of Business Administration - Finance & Strategy, London Business School, Master of Management Studies, and Bachelor of Engineering (Production), First Class with Honours Finance & accountancy, insurance, strategy and corporate planning and securities
Non-executive independent Directors
Mr. M. S. Ramachandran - Chairman 00943629 Bachelors degree in Mechanical Engineering from the College of Engineering, Guindy (renamed Anna University) Strategy and corporate planning
Mr. Dilip Karnik 06419513 Bachelors degree in Science and Bachelors degree in Law Law and governance
Mr. R. K. Nair 07225354 Masters degree in Science, Bachelors degree in Law, Master of Business Administration - Financial Management, Diploma in Securities Law Finance & accountancy, banking, insurance and securities
Mr. Dileep Choksi 00016322 Chartered Accountant, Bachelors degree in Law, a member of the Institute of Cost and Works Accountants of India, and Trust and Estate Practitioner (TEP) member of Society of Trust and Estate Practitioners (STEP) Finance & accountancy, taxation, strategy and corporate planning
Ms. Vibha Paul Rishi 05180796 Master of Business Administration in Marketing from the Faculty of Management Studies, University of Delhi. Honours in Economics from Lady Sri Ram College, Delhi University Consumer insights and marketing
Wholetime Directors
Mr. N. S. Kannan, Managing Director & CEO 00066009 Bachelor of Engineering (Honours) from NIT Trichy, Post-Graduate Diploma in Management from IIM Bangalore, Chartered Financial Analyst from ICFAI Finance & accountancy, banking, insurance, strategy and corporate planning, risk management and securities
Mr. Puneet Nanda, Deputy Managing Director* 02578795 Bachelor of Engineering, Post-Graduate Diploma in Management from IIM Lucknow Finance & accountancy, insurance, strategy and corporate planning, risk management and securities

*Ceases to be wholetime Director of the Company from close of business hours on June 14, 2020 i.e. with effect from June 15, 2020

There were six meetings of the Board during FY2020 held on April 24, 2019, July 24, 2019, October 22, 2019, November 25, 2019, January 21,2020 and February 4, 2020. The maximum interval between any two meetings did not exceed 120 days. The attendance of Directors at the Board meetings during the year are set out in the following table:

Name of the Director Board meetings attended/ held during the year Attendance at last AGM (July 17, 2019)
Non-executive non-independent Directors
Mr. Anup Bagchi, non-executive Director nominated by ICICI Bank Limited 6/6 Present
Mr. Sandeep Batra, non-executive Director nominated by ICICI Bank Limited 6/6 Present
Mr. Raghunath Hariharan, non-executive Director nominated by Prudential 6/6 Present
Corporation Holding Limited1
Non-executive independent Directors
Mr. M. S. Ramachandran, Chairman 6/6 Present
Mr. V. Sridar2 4/4 Present
Mr. Dilip Karnik 6/6 Present
Mr. R. K. Nair3 6/6 Present
Mr. Dileep Choksi 6/6 Present
Ms. Vibha Paul Rishi 6/6 Present
Wholetime Directors
Mr. N. S. Kannan, Managing Director & CEO 6/6 Present
Mr. Puneet Nanda, Deputy Managing Director 6/6 Present

 

1 Attended four meetings through video conference.

 

2 Ceased to be Director from close of business hours on January 15, 2020 i.e. with effect from January 16, 2020, consequent to cessation of tenure.

 

3 Attended one meeting through video conference.

The details pertaining to other directorships of the Board of Directors of the Company at March 31, 2020 are set out in the below table:

Name of the Director

Number of other directorships

Number of other Names of other listed entities where
of Indian public limited companies1 of other companies2 committee

memberships3

the person is a director and category of directorship
Non-executive non-independent Directors
Mr. Anup Bagchi, non-executive 5(1) 0 1 1. ICICI Bank Limited, Executive Director
Director nominated by ICICI Bank 2. ICICI Securities Limited, Non-
Limited Executive - Non Independent Director 3. ICICI Home Finance Company Limited (Debt Listed) - Director
Mr. Sandeep Batra, non-executive 3 2(1) 2 1. ICICI Lombard General Insurance
Director nominated by ICICI Bank Limited Company Limited, Non-Executive -
Mr. Raghunath Hariharan, nonexecutive Director nominated by Prudential Corporation Holding Limited 0 0 0 Non Independent Director
Non-executive independent Directors
Mr. M. S. Ramachandran, 2 1 1 1. Supreme Petrochem Limited,
Chairman Non-Executive - Independent Director 2. ESTER Industries Limited, NonExecutive - Independent Director
Mr. Dilip Karnik 5 0 2 1. Birla Corporation Limited, NonExecutive - Non Independent Director

2. Universal Cables Limited, NonExecutive - Non Independent Director

3. Vindhya Telelinks Limited, NonExecutive - Non Independent Director
Mr. R. K. Nair 7 4 3 1. ICICI Bank Limited, Non-Executive - Independent Director
2. Geojit Financial Services Limited, Non-Executive - Independent Director
3. ICICI Securities Primary Dealership Limited (Debt listed), Director
Mr. Dileep Choksi 8 3 7(2) 1. Arvind Limited, Non-Executive - Independent Director
2. Lupin Limited, Non-Executive - Independent Director
3. Deepak Nitrite Limited, NonExecutive - Independent Director
4. AIA Engineering Limited, Non -Executive - Independent Director
5. Swaraj Engines Ltd, Non-Executive - Independent Director
Ms. Vibha Paul Rishi 7 5 8(1) 1. Asian Paints Limited, Non-Executive - Independent Director
2. Tata Chemicals Limited, NonExecutive - Independent Director
3. Escorts Limited, Non-Executive - Independent Director
4. Indian Hotels Company Limited, NonExecutive - Independent Director
Wholetime Directors
Mr. N. S. Kannan, Managing Director & CEO 1(1) 0 0

-

Mr. Puneet Nanda, Deputy Managing Director 1 0 1 -

Comprises other public limited companies incorporated in India. Figures in parentheses indicate Board chairpersonship by the Directors in other unlisted public companies.

 

2 Comprises private limited companies incorporated in India and foreign companies but excludes Section 8 companies and not for profit foreign companies. Figures in parentheses indicate Board chairpersonship.

 

3- Comprises only Audit Committee and Stakeholders Relationship Committee of Indian public limited companies. Figures in parentheses indicate committee chairmanship including alternate chairpersonship.

In terms of the Listing Regulations, the number of Committees (Audit Committee and Stakeholders Relationship Committee) of public limited companies in which a Director is a member/chairperson were within the limits prescribed under Listing Regulations, for all the Directors of the Company. The number of directorships of each independent Director is also within the limits prescribed under Listing Regulations.

Independent Directors

The Board of Directors of the Company at March 31, 2020 comprised ten Directors, out of which five are independent Directors.

All independent Directors have confirmed that they meet the criteria of independence as laid down under Section 149(6) of the CA2013 and the Listing Regulations and have confirmed that their names have been added

in the data bank maintained by the Indian Institute of Corporate Affairs for independent directors, in accordance with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Pursuant to the provisions of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, every individual whose name is so included in the data bank shall pass an online proficiency self-assessment test. However, an individual who has served for a period of not less than ten years as on the date of inclusion of his name in the databank as director or KMP in a listed public company or in an unlisted public company having a paid-up share capital of Rs10 crore or more, is exempted from passing the online proficiency self-assessment test. Two of the five independent Directors fulfill the above criteria and would not be required take the proficiency self-assessment test. The Board at its meeting held on April

25, 2020 has reviewed the submissions received from all the independent Directors and has confirmed that the independent Directors fulfil the criteria laid down by requisite regulations and are independent from the management. Further, based on these disclosures and confirmations, the Board is of the opinion that the Directors of the Company are eminent persons with integrity and have necessary expertise and experience to continue to discharge their responsibilities as the Director of the Company.

Further, pursuant to the provisions of the CA2013, the shareholders in the 17th AGM of the Company held on July 17, 2017 appointed Mr. M. S. Ramachandran (DIN: 00943629) as an Independent Director of the Company to hold office for five consecutive years with effect from June 29, 2016 to June 28, 2021. Mr. Ramachandran is eligible for re-appointment as an Independent Director for another term of five consecutive years.

Accordingly, pursuant to the provisions of the CA2013 and based on the recommendation of the Board Nomination and Remuneration Committee, the Board has recommended the re-appointment of Mr. Ramachandran as an Independent Director for another term of five consecutive years with effect from June 29, 2021 to June 28, 2026, for the approval of the members through a special resolution at the 20th AGM of the Company. His brief profile and other details as required under the CA2013 and Listing Regulations pertaining to his re-appointment is provided in the Notice of 20th AGM of the Company and the explanatory statement under section 102 of the CA2013, annexed to it.

Board Committees

The details of Board Committees are as follows:

A. Board Audit Committee

The primary objective of the Committee is to monitor and provide an effective supervision of the financial reporting process, with high levels of transparency, integrity and quality of financial reporting. The Committee oversees the work of internal audit & compliance functions and ensure deployment of policies for an effective control mechanism including mechanism to address potential conflict of interest among stakeholders. The Committee has the authority and responsibility to select, evaluate and recommend the statutory auditors in accordance with law. The Committee ensures independence of control functions demonstrated by a credible reporting arrangement.

Terms of reference:

i. Accounts & Audit

i. Oversee the financial statements, financial reporting process, statement of cash flow and disclosure of its financial information, both on an annual and quarterly basis, to ensure that the financial statement is correct, sufficient and credible;

ii. Recommend the appointment, re-appointment, terms of appointment and, if required, the replacement or removal; remuneration, reviewing (with management) performance and oversight of the work of the auditors (internal/ statutory/ concurrent) and to review and monitor the auditors independence and performance, and effectiveness of audit process;

iii. Oversight of the procedures and processes established to attend issues relating to maintenance of books of account, administration procedures, transactions and other matters having a bearing on the financial position of the Company, whether raised by the auditors or by any other person;

iv. Evaluation of internal financial controls and risk management systems;

v. Discuss with the statutory auditors before the audit commences, about the nature and scope of audit, as well as, have post-audit discussions to address areas of concern;

vi. Approval of payment to statutory auditors and internal auditors or any of its associated persons or companies, for any other services rendered by them;

vii. Reviewing, with the management, the annual financial statements and auditors report thereon before submission to the Board for approval, with particular reference to:

• Matters required to be included in the directors responsibility statement to be included in the Boards report in terms of clause (c) of sub-Section (3) of Section 134 of the Companies Act, 2013;

• Changes, if any, in accounting policies and practices and reasons for the same;

• Major accounting entries involving estimates based on the exercise of judgment by management;

• Significant adjustments made in the financial statements arising out of audit findings;

• Compliance with listing and other legal requirements relating to financial statements to the extent applicable;

• Approval or any subsequent modification and disclosure of any related party transactions of the Company, in accordance with applicable provisions, as amended from time to time; and

• Modified opinion(s) in the draft audit report.

viii. Reviewing, with the management, the quarterly, half-yearly and annual financial statements before submission to the Board for approval;

ix. To the extent applicable, review with the management, the statement of uses/end use/application of funds raised through an issue (public issue, rights issue, preferential issue, etc.) and related matter, the statement of funds utilised for purposes other than those stated in the offer document/ prospectus/ notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

x. Review of housekeeping items, particularly review of suspense balances, reconciliations (including subsidiary general ledger (SGL) accounts) and other outstanding assets & liabilities;

xi. Scrutiny of inter-corporate loans and investments, if any;

xii. Valuation of undertakings or assets of the Company, wherever it is necessary;

xiii. Carrying out any other function, if any, as is mentioned in the terms of reference of the Audit Committee and any other terms of reference as may be decided by the Board and/or specified/ provided under the Companies Act, 2013 or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("Listing Regulations"), or by any other regulatory authority; and

xiv. To review the utilisation of loans and/ or advances from/ investment by the holding company in the subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans/ advances/investments.

ii. Internal audit

i. Review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit;

ii. Oversee the efficient functioning of the internal audit department and review its reports. The Committee would additionally monitor the progress made in rectification of irregularities and changes in processes wherever deficiencies have come to notice;

iii. Set-up procedures and processes to address all concerns relating to adequacy of checks and control mechanisms;

iv. Discussion with internal auditors of any significant findings and follow up there on;

v. Review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

vi. Review with the management, performance of internal auditors and the adequacy of the internal control systems;

vii. Look into the reasons for substantial defaults in the payment, if any, to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors; and

viii. Review the functioning of the whistle blower/vigil mechanism.

iii. Compliance & ethics

i. Monitor the compliance function and the Companys risk profile in respect of compliance with external laws and regulations and internal policies, including the Companys code of ethics or conduct;

ii. Review reports on the above and on proactive compliance activities aimed at increasing the Companys ability to meet its legal and ethical obligations, on identified weaknesses, lapses, breaches or violations and the controls and other measures in place to help detect and address the same;

iii. Discuss the level of compliance in the Company and any associated risks and to monitor and report to the Board on any significant compliance breaches;

iv. Supervise and monitor matters reported using the Companys whistle blowing or other confidential mechanisms for employees and others to report ethical and compliance concerns or potential breaches or violations;

v. Advise the Board on the effect of the above on the Companys conduct of business and helping the Board set the correct tone at the topRsby communicating, or supporting the communication, throughout the Company of the importance of ethics and compliance;

vi. Approve compliance programmes, reviewing their effectiveness on a regular basis and signing off on any material compliance issues or matters;

vii. Review key transactions involving conflict of interest;

viii. Review the anti-money laundering (AML)/counter - financing of terrorism (CFT) policy annually and review the implementation of the Companys AML/CFT program;

ix. Review compliance of Insurance Regulatory & Development Authority of India (IRDAI) corporate governance guidelines;

x. Monitor the directives issued/ penalties imposed/ penal action taken against the Company under various laws and statutes and action taken for corrective measures; and

xi. Approval of appointment of chief financial officer or any other person heading the finance function or discharging that function after assessing the qualifications, experience and background, etc. of the candidate.

Composition

There were nine meetings of the Board Audit Committee held during FY2020: April 23, 2019, April 24, 2019, June 25, 2019, July 19, 2019, July 24, 2019, October 21, 2019, October 22, 2019, January 20, 2020 and January 21, 2020. The details of the composition of the Committee and attendance at its meetings are set out in the following table:

Name of the member Number of meetings attended/held
Mr. R. K. Nair - Chairman1 8/9
Mr. V. Sridar2 7/7
Mr. Dilip Karnik 8/9
Mr. Dileep Choksi 9/9
Ms. Vibha Paul Rishi3 2/2
Mr. Sandeep Batra 9/9
Mr. Raghunath Hariharan4 3/9

 

1 Appointed as the chairman with effect from January 16, 2020. Participated in one meeting through video conference.

 

2 Ceased to be a member from close of business hours on January 15, 2020 i.e. with effect from January 16, 2020, consequent to cessation of tenure. Participated in one meeting through video conference.

 

3 Appointed as a member with effect from January 16, 2020.

 

4 Participated in two meetings through video conference.

B. Board Risk Management Committee

The Committee reviews the Risk Management policy of the Company, including asset liability management (ALM), to monitor all risks across the various lines of business of the Company and establish appropriate systems to mitigate such risks. The Committee also reviews the risk appetite and risk profile of the Company. The Committee oversees the effective operation of the risk management system and advises the Board on key risk issues.

Terms of reference:

a. Risk management

i. Assisting the Board in effective operation of the risk management system by performing specialised analysis and quality reviews;

ii. Monitoring and reviewing the cyber security system of the Company;

iii. Maintaining a group wide and aggregated view of the risk profile of the Company in addition to the individual risk profiles;

iv. Reporting to the Board details of the risk exposures and the actions taken to manage the exposures, set the risk tolerance limits and assess the cost and benefits associated with risk exposure and review, monitor and challenge where necessary, risks undertaken by the Company;

v. Advising the Board with regard to risk management decisions in relation to strategic and operational matters such as corporate strategy, acquisitions and related matters;

vi. Review the Companys risk-reward performance to align with overall policy objectives;

vii. Discuss and consider best practices in risk management in the market and advise the respective functions;

viii. Maintain an aggregated view on the risk profile of the Company for all categories of risk including insurance risk, market risk, credit risk, liquidity risk, operational risk, compliance risk, legal risk, reputation risk, etc.;

ix. Review the solvency position of the Company on a regular basis;

x. Monitor and review regular updates on business continuity;

xi. Formulation of a fraud monitoring policy and framework for approval by the Board;

xii. Monitor implementation of anti-fraud policy for effective deterrence, prevention, detection and mitigation of frauds;

xiii. Review compliance with the guidelines on Insurance Fraud Monitoring Framework dated January 21,2013, issued by the Authority; and

xiv. To carry out any other function, if any, as prescribed in the terms of reference of the Risk Management Committee and any other terms of reference as may be decided by the Board and/or specified/provided under the CA2013 or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, or by any other regulatory authority.

b. Asset liability management (ALM)

i. Formulating and implementing optimal ALM strategies, both at the product and enterprise level and meeting risk versus reward objectives and ensuring they remain within acceptable monitored tolerances for liquidity, solvency and the risk profile of the entity;

ii. Reviewing the Companys overall risk appetite and laying down the risk tolerance limits; including annual review of strategic asset allocation;

iii. Monitoring risk exposures at periodic intervals and revising strategies as appropriate including those for ALM;

iv. Placing information pertaining to ALM before the Board at periodic intervals;

v. Setting the risk/reward objectives i.e. the risk appetite of the Company informed by assessment of policyholder expectations and other relevant factors;

vi. Quantifying the level of risk exposure (eg. market, credit and liquidity) and assessing the expected rewards and costs associated with the risk exposure;

vii. Ensuring that management and valuation of all assets and liabilities comply with the standards, prevailing legislation and internal and external reporting requirements;

viii. Reviewing key methodologies and assumptions including actuarial assumptions, used to value assets and liabilities;

ix. Managing capital requirements at the company level using the regulatory solvency requirements;

x. Reviewing, approving and monitoring capital plans and related decisions over capital transactions; and

xi. To carry out any other function, if any, as prescribed in the terms of reference of the Risk Management Committee and any other terms of reference as may be decided by the Board and/or specified/provided under the CA2013 or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, or by any other regulatory authority.

Composition

There were four meetings of the Board Risk Management Committee held during FY2020: April 23, 2019, July 24, 2019, October 22, 2019 and January 20, 2020. The details of the composition of the Committee and attendance at its meetings are set out in the following table:

Name of the member Number of meetings attended/held
Mr. M. S. Ramachandran - Chairman 4/4
Mr. V. Sridar1 3/3
Mr. R. K. Nair2 4/4
Mr. Sandeep Batra 4/4
Mr. Raghunath Hariharan 0/4

 

1 Ceased to be a member from close of business hours on January 15, 2020 i.e. with effect from January 16, 2020, consequent to cessation of his tenure.

 

2. Participated in one meeting through video conference.

C. Board Investment Committee

The Investment Committee assists the Board in fulfilling its oversight responsibility for the investment assets of the Company. The Committee is responsible for formulating the overall investment policy and establishing a framework for its investment operations with adequate controls. The Committee also monitors investment performance against the applicable benchmarks and provide guidance for protection of shareholders and policyholders funds.

Terms of reference:

i. Responsible for the recommendation of the Investment Policy and laying down of the operational framework for the investment operations of the Company. The Investment Policy and operational framework should, inter alia, focus on a prudential asset liability management supported by robust internal control systems; and encompass aspects concerning liquidity for smooth operations, compliance with prudential regulatory norms on investments, risk management/mitigation strategies to ensure commensurate yield on investments in line with policyholders reasonable expectations and above all protection of policyholders funds.

ii. Put in place an effective reporting system to ensure compliance with the Investment Policy set out by it apart from internal/concurrent audit mechanisms for a sustained and ongoing monitoring of investment operations.

iii. To submit a report to the Board on the performance of investments at least on a quarterly basis and provide an analysis of its investment portfolio (including with regard to the portfolios safety and soundness) and on the future outlook.

iv. The Committee should independently review its investment decisions and ensure that support by the internal due diligence process is an input in making appropriate investment decisions.

v. To carry out any other function, if any, as prescribed in the terms of reference of the Board Investment Committee and any other terms of reference as may be decided by the Board and/or specified/provided under the CA2013 or by any other regulatory authority.

Composition

There were four meetings of the Board Investment Committee held during FY2020: April 23, 2019, July 19, 2019, October 22, 2019 and January 16, 2020. The details of the composition of the Committee and attendance at its meetings are set out in the following table:

Name of the member Number of meetings attended/held
Mr. M. S. Ramachandran - Chairman1 0/0
Mr. R. K. Nair - Chairman2 4/4
Mr. Sandeep Batra 4/4
Mr. Raghunath Hariharan 0/4
Mr. N. S. Kannan 4/4
Mr. Puneet Nanda3 4/4
*Mr. Satyan Jambunathan 4/4
*Mr. Manish Kumar 4/4
*Mr. Deepak Kinger 4/4
*Ms. Asha Murali 3/4

* As per IRDAI Corporate Governance guidelines 2016 and the IRDAI Investment Regulations, 2016, the Board Investment Committee shall also have Chief Financial Officer, Chief Risk Officer, Chief Investment Officer and Appointed Actuary as members.

 

1 Appointed as a member and Chairman with effect from March 31,2020.

 

2 Ceased to be the Chairman but continues to be a member with effect from March 31, 2020.

 

3 Ceases to be a member from close of business hours on June 14, 2020 i.e. with effect from June 15, 2020, consequent to his cessation as a wholetime Director of the Company.

D. Board Customer Service & Policyholders Protection Committee

The Board Customer Service & Policyholders Protection Committee assists the Board to protect the interests of the policyholders and improve their experiences in dealing with the Company at all stages and levels of their relationship with the Company. In this connection, the Committee aims to upgrade and monitor policies and procedures for grievance redressal and resolution of disputes, disclosure of "material information" to the policy holders, and compliance with the regulatory requirements

Terms of reference:

i. Putting in place proper procedures and effective mechanism to address complaints and grievances of policyholders including mis-selling by intermediaries.

ii. Ensure compliance with the statutory requirements as laid down in the regulatory framework pertaining to policyholders protection.

iii. Review of the mechanism at periodic intervals.

iv. Ensure adequacy of disclosure of "material information" to the policyholders. These disclosures shall, for the present, comply with the requirements laid down by the Authority both at the point of sale and at periodic intervals.

v. Review the status of complaints of the policyholders, and take steps to reduce these complaints, at periodic intervals.

vi. Provide the details of grievances at periodic intervals in such formats as may be prescribed by the Authority.

vii. Provide details of insurance ombudsmen to the policyholders.

viii. Shape the customer service philosophy and policies of the organisation based on the overall environment in the financial services industry.

ix. Oversee the functions of the customer service council.

x. Review measures for enhancing the quality of customer service.

xi. Provide guidance to improve in the overall satisfaction level of customers.

xii. Adopt standard operating procedures to treat the customer fairly including time-frames for policy and claims servicing parameters and monitoring implementation thereof.

xiii. Put in place a framework for review of awards given by Insurance Ombudsman/Consumer Forums. Analyse the root cause of customer complaints, identify market conduct issues and advise the management appropriately about rectifying systemic issues, if any.

xiv. Review all the awards given by Insurance Ombudsman/ Consumer Forums remaining unimplemented for more than three (3) months with reasons therefor and report the same to the Board for initiating remedial action, where necessary.

xv. Review of claims report, including status of outstanding claims with ageing of outstanding claims.

xvi. Reviewing repudiated claims with analysis of reasons.

xvii. Status of settlement of other customer benefit payouts like surrenders, loan, and partial withdrawal requests etc.

xviii. Review of unclaimed amounts of policyholders, as required under the circulars and guidelines issued by the Authority.

The Company has a Grievance Redressal Committee (GRC). The GRC is formed to provide effective grievance redressal to the policyholders. GRC is chaired by an eminent independent member. The Committee has one more independent member, in addition to the Chair. As part of the grievance redressal mechanism, the GRC is constituted as the final authority to address the policyholders grievances before approaching the Regulator and the Ombudsman office. The key discussions of the GRC meeting are put up at the Board Customer Service & Policyholders Protection Committee for information.

The GRC meets on a quarterly basis with the following terms of reference:

a. Evaluate feedback on quality of customer service and claims experience.

b. Review and approve representations received on claims repudiations.

c. Ensure that the Company follows all prescribed regulatory requirements on policyholder service.

d. Submit report on its performance to the Customer Service & Policyholder Protection Committee (CS&PPC) on a quarterly basis.

Composition

There were four meetings of the Board Customer Service & Policyholders Protection Committee held during FY2020: April 23, 2019, July 19, 2019, October 21, 2019 and January 20, 2020. The details of the composition of the Committee and attendance at its meetings are set out in the following table:

Name of the member Number of meetings attended/held
Ms. Vibha Paul Rishi - Chairperson 4/4
Mr. Dilip Karnik 3/4
Mr. Dileep Choksi 3/4
Mr. Anup Bagchi 3/4
Mr. Raghunath Hariharan 0/4

E. Board Nomination and Remuneration Committee

The Board Nomination & Remuneration Committee assists the Board to formulate policies relating to the composition & remuneration of the Directors, key managerial personnel, other employees consistent with criteria approved by the Board. The Committee coordinates and oversee the self-evaluation of the performance of the Board and succession planning for senior management. The Committee ensures that the Board comprises competent and qualified Directors.

Terms of reference:

i. To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees;

ii. To consider and approve employee stock option schemes and to administer and supervise the same;

iii. To devise a policy on diversity of the Board;

iv. To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and formulate a criteria and specify the manner for effective evaluation of every individual directors performance, evaluation of the performance of Board and its committees; and review its implementation and compliance;

v. To recommend to the Board, all remuneration, in whatever form, payable to senior management;

vi. To scrutinise the declarations of intending applicants before the appointment/ re-appointment/ election of directors by the shareholders at the annual general meeting; and to scrutinise the applications and details submitted by the aspirants for appointment as the key managerial personnel;

vii. To consider whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors;

viii. To ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;

ix. To ensure that relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

x. To approve the compensation program and to ensure that remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals;

xi. To ensure that the proposed appointments/ re-appointments of key managerial personnel or directors are in conformity with the Board approved policy on retirement/ superannuation; and

xii. To carry out any other function, if any, as prescribed in the terms of reference of the Board Nomination and Remuneration Committee and any other terms of reference as may be decided by the Board and/or specified/provided under the Companies Act, 2013 or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, or by any other regulatory authority.

Composition

There were three meetings of the Board Nomination & Remuneration Committee held during FY2020: April 24, 2019, July 24, 2019 and January 20, 2020. The details of the composition of the Committee and attendance at its meetings are set out in the following table:

Name of the member Number of meetings attended/held
Mr. Dilip Karnik - Chairman 2/3
Mr. M. S. Ramachandran 3/3
Mr. Anup Bagchi 3/3
Mr. Raghunath Hariharan 1/3

F. Board Corporate Social Responsibility (CSR) Committee

The purpose of the Committee is to formulate and recommend to the Board the CSR policy of the Company. It formulates the annual CSR plan, and monitors the CSR activities and compliance with the CSR policy from time to time. Corporate Social Responsibility Policy of the Company as per section 135 of the CA2013 is put up on the Companys website.

Terms of reference:

i. To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company.

ii. To recommend the amount of expenditure to be incurred on the Corporate Social Responsibility activities.

iii. To monitor the Corporate Social Responsibility Policy of the Company from time to time.

Composition

There were three meetings of the Board Corporate Social Responsibility Committee held during FY2020: April 24, 2019, October 22, 2019 and March 19, 2020. The details of the composition of the Committee and attendance at its meetings are set out in the following table:

Name of the member Number of meetings attended/held
Mr. Dilip Karnik - Chairman* 3/3
Mr. Dileep Choksi* 2/3
Mr. Raghunath Hariharan 1/3

* Participated in one meeting through video conference.

G. stakeholders Relationship Committee Terms of reference:

i. Consider and review redressal and resolutions of the grievances and complaints of the security holders of the company, including those of shareholders, debenture holders and other security holders related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings;

ii. Approval and rejection of transfer and transmission of shares or securities, including preference shares, bonds, debentures and securities

iii. Approval and rejection of requests for split and consolidation of share certificates

iv. Approval and rejection of issue of duplicate share, issued from time to time

v. Redemption of securities and the listing of securities on stock exchanges

vi. Allotment of shares and securities

vii. Review of measures taken for effective exercise of voting rights by shareholders;

viii. Review of adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent;

ix. Review of various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/ statutory notices by the shareholders of the company; and

x. Any other activities which are incidental or ancillary to the various aspects of interests of shareholders, debenture holders and/or other security holders.

Composition

There were four meetings of the Stakeholders Relationship Committee held during FY2020: April 23, 2019, July 19, 2019, October 21, 2019 and January 20, 2020. The details of the composition of the Committee and attendance at its meetings are set out in the following table:

Name of the member Number of meetings attended/held
Mr. Dileep Choksi- Chairman1 1/1
Mr. V. Sridar2 3/3
Mr. N. S. Kannan 4/4
Mr. Puneet Nanda3 4/4

 

1 Appointed as a member and chairman with effect from January 16, 2020

 

2. Ceased to be a member and chairman from close of business hours on January 15, 2020 i.e. with effect from January 16, 2020, consequent to cessation of tenure.

 

3. Ceases to be a member from close of business hours on June 14, 2020 i.e. with effect from June 15, 2020, consequent to his cessation as a wholetime Director of the Company.

Ms. Vyoma Manek, Company Secretary acts as the Compliance Officer of the Company in accordance with the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The total number of complaints from shareholders in FY2020 were 168 and the same have been resolved. At March 31, 2020, no complaints were pending unresolved.

H. With Profits Committee Terms of reference:

i. Maintaining the asset shares.

ii. Providing approval for the detailed working of the asset share, the expense allowed for in the asset share, the investment income earned on the fund, and other associated elements which were represented in the asset share determined by the Appointed Actuary.

iii. To submit a report to the Board covering at least:

• appropriateness of the methodology and basis used in calculation of asset shares and justification for any change,

• bonus earning capacity including its calculation,

• sensitivity analysis of bonus rates and basis as appropriate,

• a brief note on how policyholders reasonable expectations (PRE) is met,

• any change in special surrender value with justification,

• treatment of With Profit fund for future appropriation, and

• the expenses debited to the With Profit fund and its appropriateness.

Composition

There was one meeting of the With Profits Committee held during FY2020: April 23, 2019. The details of the composition of the Committee and attendance at its Meeting are set out in the following table:

Name of the member Number of meetings attended/held
Mr. R. K. Nair - Chairman1 1/1
Mr. V. Sridar2 1/1
Mr. Sandeep Batra 1/1
Mr. Raghunath Hariharan 0/1
Mr. N. S. Kannan 1/1
*Mr. Chandan Khasnobis3 0/0
*Mr. N. M. Govardhan4 1/1
*Mr. Satyan Jambunathan5 0/0
*Ms. Asha Murali 1/1

* As per IRDAI (Non-linked Insurance Products) Regulations 2019, With Profits Committee shall also have the Chief Financial Officer, the Appointed Actuary and an Independent Actuary, as members.

 

1. Appointed as the chairman with effect from January 16, 2020.

 

2. Ceased to be a member and chairman from close of business hours on January 15, 2020 i.e. with effect from January 16, 2020, consequent to cessation of his tenure.

 

3. Appointed as an Independent Actuary and member with effect from October 22, 2019.

 

4 Ceased to be an Independent Actuary and member with effect from October 22, 2019.

 

5. Appointed as a member with effect from October 22, 2019.

I. Strategy Committee

The Board of Directors at its Meeting held on January 19, 2018 had constituted a Strategy Committee to consider and evaluate any combination, arrangement, transfer of assets, acquisition, divestiture and any other strategic initiative and recommend such proposals to the Board of Directors.

Terms of reference

i. To evaluate transaction(s) of transfer of assets, combination, arrangement, acquisition, divestitures and any other strategic initiatives proposed to be undertaken by the Company (through the processes entailing technical/price bids, due diligence process, etc.) and submit the proposal to the Board for its consideration.

ii. To take all necessary actions in connection with such specific transactions.

Composition

There were two meetings of the Strategy Committee held during FY2020: November 29, 2019 and January 21, 2020. The details of the composition of the Committee and attendance at its Meeting are set out in the following table:

Name of the member Number of meetings attended/held
Mr. M. S. Ramachandran - Chairman1 1/1
Mr. R. K. Nair2 1/1
Mr. Anup Bagchi 2/2
Mr. Raghunath Hariharan3 2/2
Mr. N. S. Kannan 2/2
Mr. Puneet Nanda4 2/2

 

4 Appointed as a member and Chairman with effect from January 16, 2020.

 

2 Ceased to be a member and chairman with effect from January 16, 2020.

 

3 Participated in two meetings through video conference.

 

4. Ceases to be a member from close of business hours on June 14, 2020 i.e. with effect from June 15, 2020, consequent to his cessation as a wholetime Director of the Company,

Familiarisation programme for independent Directors

Independent Directors are familiarised with their roles, rights and responsibilities in the Company as well as with the nature of the industry and the business model of the Company through induction programmes at the time of their appointment as Directors and through presentations on economy & industry overview, business overview, key regulatory developments, governance, strategy, investment, human resource and operating performance which are made to the Directors from time to time. The details of the familiarisation programmes have been hosted on the website of the Company and can be accessed on the link: https://www.iciciprulife.com/about-us/company-overview/

familiarization.html.

Changes in the composition of the Board of Directors and other key managerial personnel (KMP) as per CA2013 during the year ended March 31, 2020

Name of Director/ KMP Appointment/ Resignation/ Cessation of tenure/ Withdrawal of nomination With effect from
Mr. V Sridar Cessation of tenure Close of business hours on January 15, 2020 i.e. with effect from January 16, 2020

separate meeting of independent Directors

During FY2020, a separate meeting of the independent Directors was held on April 24, 2019.

Retirement by rotation

In accordance with the relevant provision of the CA2013, Mr. Sandeep Batra (DIN: 03620913) would retire by rotation at the ensuing AGM. Mr. Batra, being eligible has offered himself for reappointment.

Criteria for appointment of a Director and official(s) who may be appointed as key managerial person/personnel or as senior managerial personnel

The Company has a well-defined criteria for appointment of Directors and those in senior management positions (that is who may be appointed as key managerial person/personnel (KMP) or as senior managerial personnel (SMP)) in accordance with the requirements prescribed.

Remuneration Remuneration policy

The Company already has in place a Compensation & Benefits Policy applicable to Managing Director & CEO, other wholetime Directors (WTDs), non-executive Directors, key managerial personnel (KMP), senior managerial personnel (SMP) and other employees.

Further details with respect to the Compensation and Benefits policy are provided under the section titled "Compensation & Benefit policy", which has also been hosted on the website of the Company and can be accessed on the link: https://www.iciciprulife.com/ about-us/corporate-policies.html.

Details of remuneration paid to wholetime Directors

The Board Nomination and Remuneration Committee (BNRC) determines and recommends to the Board the remuneration, including performance bonus and perquisites, payable to the wholetime Directors.

The following table sets out the details of remuneration (including perquisites and retiral benefits) paid to wholetime Directors during fiscal 2020:

Particulars

Details of remuneration (Rs)

Mr. N. s. Kannan Mr. Puneet Nanda
Basic 24,467,040 15,939,000
Variable pay paid out in fiscal 20201 - 5,801,916
Allowances and perquisites2 17,895,398 21,627,516
Contribution to provident fund 2,936,045 1,912,680
Contribution to superannuation fund 3,670,056 -
stock options of the Company (Numbers)
Granted in fiscal 2020 701,600 516,600
Granted in fiscal 2019 - 102,200
stock options of ICICI Bank (Numbers)
Granted in fiscal 2020 183,200 134,900
Granted in fiscal 2019 - 242,500

Note: For the year ended March 31, 2020 the remuneration details pertain to the amount paid/options granted for the period of service as per IRDAI approval

 

1 Variable pay includes the deferred component of the variable pay of previous years as approved by IRDAI

 

2 Perquisite excludes perquisites on exercise of stock options, amounting to nil.

Perquisites (evaluated as per Income-Tax rules wherever applicable and otherwise at actual cost to the Company) such as the benefit of the gas, electricity, furnishing, club fees, group insurance, use of car and telephone at residence or reimbursement of expenses in lieu thereof, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund, gratuity and on stock options exercised were provided in accordance with the scheme(s) and rule(s) applicable from time to time. Provision on gratuity, leave encashment and long term payment, which

is actuarially valued for all employees of the organisation, is not considered above.

Details of remuneration paid to non-executive Directors

As provided in the Articles of Association of the Company, the fees payable to the non-executive independent Directors for attending a Meeting of the Board or Committee thereof is decided by the Board of Directors from time to time within the limits prescribed by the CA2013.

For FY2020, the Company has paid Rs100,000 as sitting fees for each Meeting of Board, Rs50,000 for each Board Audit Committee Meeting and Rs30,000 as sitting fees for each Meeting of Board Committee attended. This amount is within the limits prescribed as per Rule 4 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 of the CA2013.

The members of the Company at the Annual General Meeting held on July 17, 2019 have approved the payment of compensation in form of profit related commission upto Rs1 million per annum, from earlier approved compensation of Rs0.75 million per annum, in proportion to the time served by him/her as a Director in a year, to each non-executive Director of the Company (other than the nonexecutive directors nominated by ICICI Bank Limited and Prudential Corporation Holdings Limited), for each year effective from financial year ending March 31, 2020. The payments are subject to the regulatory provisions applicable to the Company and availability of net profits at the end of each financial year. Sitting fees paid to independent Directors are outside the purview of the above limits.

The details of the sitting fees and commission are as below:

Sitting fees paid to independent Directors for the financial year ended March 31,2020:

Name of the Director Amount (in )
Mr. M. S. Ramachandran, Chairman 840,000
Mr. Dilip Karnik 1,240,000
Mr. R. K. Nair 1,300,000
Mr. Dileep Choksi 1,230,000
Ms. Vibha Paul Rishi 820,000
Mr. V. Sridar 960,000

Commission to be paid to independent Directors for the financial year ended March 31,2020:

Name of the Director Amount (in )
Mr. M. S. Ramachandran 1,000,000
Mr. Dilip Karnik 1,000,000
Mr. R. K. Nair 1,000,000
Mr. Dileep Choksi 1,000,000
Ms. Vibha Paul Rishi 1,000,000
Mr. V. Sridar 792,350*

* In proportion to the time served as an independent Director of the Company in the year

Further, it may be noted that Mr. Sandeep Batra was the wholetime Director of the Company from January 1, 2014 till July 11, 2018. In accordance with the terms of the engagement with Mr. Batra, then, as a wholetime Director, he was eligible to receive long term variable pay and was also granted options pursuant to the Companys employee stock option scheme. Accordingly, he was paid Rs5,549,230, as deferred variable pay during the year ended March 31, 2020. During the year, he also exercised options for 10,000 shares of the Company, resulting in perquisite of Rs930,500, on exercise of these options, pursuant to the provisions of Income Tax Act, 1961.

Remuneration disclosures pursuant to IRDAI guidelines

Pursuant to IRDAI guidelines on remuneration of non-executive Directors and Managing Director/Chief Executive Officer/wholetime Directors of Insurers (IRDAI Guidelines) issued vide reference no. IRDA/F&A/GDL/LSTD/155/08/2016 dated August 5, 2016 requires the Company to make following disclosures on remuneration on an annual basis in their Annual Report:

Compensation policy and practices

1. Qualitative disclosures

a. Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy.

(i) Name and mandate of the main body overseeing remuneration The Board Nomination and Remuneration Committee (BNRC/ Committee) is the body which oversees the remuneration aspects. The functions of the Committee include identifying persons who are qualified to become Directors and who may be appointed as key managerial person/personnel (KMP) or as senior managerial personnel (SMP) in accordance with the criteria laid down and recommending to the Board their appointment and removal, formulate a criteria and specify the manner for effective evaluation of every individual directors performance, evaluation of the performance of the Chairman, the Board and its committees; and review its implementation and compliance and to extend or continue the term of appointment of the independent Directors on the basis of the report of performance evaluation of independent Directors, recommending to the Board a policy relating to the remuneration for the Directors, key managerial personnel and other employees, recommending to the Board the remuneration (including performance bonus and perquisites) to wholetime Directors (WTDs), commission and fee payable to non-executive Directors subject to applicable regulations, approving the policy for and quantum of bonus payable to the members of the staff including senior management and key managerial personnel, formulating the criteria for determining qualifications, positive attributes and independence of a Director, devising a policy on diversity of the Board, consider and approve employee stock option schemes and to administer and supervise the same.

(ii) External consultants whose advice has been sought, the body by which they were commissioned and in what areas of the remuneration process

The Company engaged the services of a reputed consulting firm for market benchmarking in the area of compensation.

(iii) Scope of the Companys remuneration policy (eg. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches

The Companys Compensation & Benefits policy for Managing Director & CEO, other wholetime Directors, non-executive Directors, key management person (KMP), senior management personnel (SMP) and other employees was last amended and approved by the BNRC and the Board at its Meetings held on January 20, 2020 and January 21, 2020, respectively.

(iv) Type of employees covered and number of such employees

All employees of the Company are governed by the Compensation and Benefits policy. The total number of permanent employees governed by the Compensation and Benefits policy of the Company at March 31,2020 was 14,630.

(v) Key features and objectives of remuneration policy

The Company has followed prudent compensation practices under the guidance of the Board and the BNRC. The Companys approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. This approach has been incorporated in the Compensation and Benefits policy, the key elements of which are given below:

Effective governance of compensation

The Company follows prudent compensation practices under the guidance of the BNRC and the Board. The decision relating to the remuneration of the Managing Director and CEO (MD & CEO) and other wholetime Directors is reviewed and approved by the BNRC and the Board. The BNRC approves the key performance indicators (KPIs) and the performance threshold for payment of performance bonus. The BNRC assesses business performance against the KPIs. Based on its assessment, it makes recommendations to the Board regarding compensation for MD & CEO and other wholetime Directors and performance bonus for all employees, including senior management and key management personnel.

Alignment of compensation philosophy with prudent risk taking The Company seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels. For the MD & CEO and other wholetime Directors, compensation is sought to be aligned to both financial and non-financial indicators of performance including controls like risk management, process perspective, customer perspective and others. In addition, the Company has an employee stock option scheme aimed at enabling employees to participate in the long-term growth and financial success of the Company through stock option grants that vest over a period of time.

Whether the BNRC reviewed the Companys remuneration policy during the past year, and if so, an overview of any changes that were made

The BNRC reviewed the Companys Compensation and Benefits policy at its meeting held on January 20, 2020. A comprehensive review of the policy has been conducted for compliance, consistency and structure and in line with regulatory requirements. The key changes in the policy are:

• The policy has been restructured into three sections for purpose of abundant clarity - Part A deals with compensation of employees including KMPs & SMPs; Part B lays down the guidelines relating to compensation of the Managing Director & CEO and other wholetime Directors, and Part C pertains to compensation guidelines for non-executive Directors

• All allowances that are part of the existing compensation structure have been incorporated in the policy

• An enabling provision has been introduced to grant retention bonus, stock options, long-term reward or any other benefits to employees of subsidiary(ies)

The changes proposed in the Compensation and Benefits policy are in line with the IRDAIs Guidelines on remuneration of non-executive Directors and Managing Director/Chief Executive Officer/wholetime Directors of insurers and the changes in the relevant Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations.

b. Description of the ways in which current and future risks are taken into account in the remuneration processes

• The Company follows prudent compensation practices under the guidance of the Board and the Board Nominations & Remuneration Committee (BNRC). The Companys approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. Performance ratings for employees, including senior management and key management personnel is based on assessment of performance delivered against a set of defined performance objectives. These objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, process, quality, compliance objectives and/or any other parameters as may be deemed fit.

• For the Managing Director & CEO and other wholetime Directors, compensation is aligned to both financial and non-financial indicators of performance including controls like risk management, process perspective, customer perspective and others.

• For the Managing Director & CEO and other wholetime Directors, the quantum of bonus does not exceed a certain percentage (as stipulated in the Compensation and Benefits policy) of total fixed pay in a year. If the quantum of bonus exceeds a pre-defined percentage of the total fixed pay, a part of the bonus is deferred and paid over a pre-defined period. The acts of gross negligence and integrity breach are covered under the purview of the Compensation and Benefits policy. Errors of judgment shall not be construed to be breaches.

• The deferred part of the variable pay (performance bonus) for wholetime Directors is subject to malus, under which, the Company will prevent vesting of all or part of the variable pay in the event of an enquiry determining gross negligence or integrity breach.

• In claw back arrangements with wholetime Directors, the employee agrees to return, in case asked for, the previously paid variable pay to the Company in the event of an enquiry determining gross negligence or integrity breach, taking into account relevant regulatory stipulations.

c. Description of the ways in which the Company seeks to link performance during a performance measurement period with levels of remuneration

The Companys approach to compensation is based on the ethos of meritocracy and fairness within the framework of prudent risk management. The extent of variable pay for individual employees is linked to individual performance for sales frontline employees and to individual and organisation performance for non-sales frontline employees and employees in the management cadre. For the latter, the performance rating assigned is based on assessment of performance delivered against a set of defined performance objectives.

These objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, process, quality and compliance objectives and/or any other parameters as may be deemed fit. For the Managing Director & CEO and other wholetime Directors, to ensure effective alignment of compensation with prudent risk parameters, the Company takes into account various risk parameters along with other pre-defined performance objectives of the Company.

2. Quantitative Disclosures

The following table sets forth, for the period indicated, the details of quantitative disclosure for remuneration of wholetime Directors (including Managing Director & CEO)

Particulars At March 31,2020
Number of WTD/ CEO/ MD having received a variable remuneration award during the financial year 1
Number and total amount of sign on awards made during the financial year Nil
Details of guaranteed bonus, if any, paid as joining/ sign on bonus Nil
Breakup of amount of remuneration awarded for the financial year (in Rsmillion)
Fixed1 86.7
Variable Pay2 Nil
Deferred Nil
Non-Deferred Nil
Share-Linked Instruments - Company2 1,218,200
Share-Linked Instruments - ICICI Bank2 318,100
Total amount of deferred remuneration paid out in the financial year (Rsin million) 5.8
Total amount of outstanding deferred remuneration Cash (Rsin million) 6.5
Shares Nil
Shares-linked instruments - Company 1,316,140
Shares-linked instruments - ICICI Bank 595,650
Other forms Nil

Note: For the year-ended March 31, 2020 the numbers indicated are the amounts paid/options granted during the year FY2020 as per IRDAI approvals. Mr. Sandeep Bakhshi received a remuneration of Rs8,534,434 and Mr. Sandeep Batra received Rs5,549,230 which is the deferred variable pay (paid during FY2020). This is in accordance with the terms of the engagement with Mr. Bakhshi and Mr. Batra, then, as wholetime Directors of the Company. Additionally, they were also granted options pursuant to the Companys employee stock option scheme. During the year, Mr. Batra also exercised options for 10,000 shares of the Company, resulting in perquisite of Rs930,500, pursuant to the provisions of Income Tax Act, 1961.

 

1 Fixed pay includes basic salary, supplementary allowances, superannuation, contribution to provident fund and gratuity fund by the Company. Provision towards gratuity is determined actuarially on an overall basis, however, for the purpose of this section, the annual contribution towards gratuity fund of the Company as approved by BNRC/Board is incorporated here.

 

2 For the year ended March 31, 2020, variable pay and share-linked instruments represent amounts paid/options during the year FY2020 as per IRDAI approval.

Further, provision on gratuity, leave encashment and long term payment, which is actuarially valued for all employees of the organisation, is not considered above.

Disclosures required with respect to Section 197(12) of the CA2013

The ratio of the remuneration of each Director to the median employees remuneration and such other details in terms of Section 197(12) of the CA2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. For the purpose of this section, aspects of fixed remuneration which includes basic salary, supplementary allowance and retirals (provident fund, gratuity and superannuation) have been annualised.

(i) The ratio of the remuneration of each director to the median remuneration of the employees, who are part of annual bonus plan, of the Company for the financial year

Mr. N S Kannan, Managing Director & CEO 80:1
Mr. Puneet Nanda, Deputy Managing Director 57:1

(ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year

The percentage increase in remuneration of wholetime Directors, Chief Financial Officer, and Company Secretary ranged between 5% and 12%.

(iii) The percentage increase in the median remuneration of employees, who are part of annual bonus plan, in the financial year

The percentage increase in the median remuneration of employees, who are part of annual bonus plan, in the financial year was around 6.5%.

(iv) The number of permanent employees on the rolls of Company

The number of employees, as mentioned in the section on Managements Discussion & AnalysisRsis 14,630.

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

The average percentage increase in the salaries of total employees other than the key managerial personnel for fiscal 2020 was around 11.1%, while the average increase in the remuneration of the key managerial personnel was in the range of 5% to 12%.

(vi) Affirmation that the remuneration is as per the remuneration policy of the Company

Yes

Employee stock option scheme (Esos)

The Company granted options to its employees under its Employee Stock Option Scheme, prior to listing, since approval of its Employee Stock Option Scheme - 2005. This pre-IPO scheme shall be referred to as Scheme. The Scheme has six tranches namely Founder, 200405, 2005-06, 2006-07, Founder II and 2007-08, pursuant to which shares have been allotted and listed in accordance with the inprinciple approval extended by the stock exchanges. The Scheme was instituted vide approval of its Members at the Extra-Ordinary General Meeting (EGM) dated March 28, 2005 and subsequently amended by the Members of the Company vide its EGM dated February 24, 2015.

The Scheme was last ratified and amended by the members of the Company at its Annual General Meeting held on July 17, 2017 which is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (referred to as the Revised Scheme).

Further, the meeting of Board Nomination and Remuneration Committee (BNRC) and the Board held on April 24, 2019, with the objective to align the employeesRsinterests with those of shareholders, has approved the amendment to the definition of "Exercise Period" to read as "Exercise Period" would commence from the date of vesting and will expire on completion of such period not exceeding five years from the date of vesting of Options as may be determined by the Board Nomination & Remuneration Committee for each grant.

The amendment is not intended to impact any grants made earlier. The revision to the definition was approved by Members at the annual general meeting of the Company held on July 17, 2019.

As per the Revised Scheme the aggregate number of shares issued or issuable since March 31, 2016 pursuant to the exercise of any options granted to the eligible employees issued pursuant to the Scheme or any other stock option scheme of the Company, shall not exceed 2.64% of the number of shares issued at March 31, 2016; which pursuant to the Scheme was capped at 3% of the issued capital of the Company as on the date of grant(s). Further, pursuant to the Revised Scheme the maximum number of options that can be granted to any eligible employee in a financial year is restricted to 0.1% of the issued Shares of the Company at the time of grant of Options, which pursuant to the Scheme was 1% of the issued capital of the Company to any eligible employee. Both, the Scheme and the Revised Scheme, provide for a minimum period of one year between the grant of Options and vesting of Options. Shares are allotted to all those who have exercised their Options, as granted by the Board of the Company and/or the BNRC in accordance with the criteria ascertained pursuant to the Companys Compensation and Benefits policy.

Pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014, the disclosures are available on the website of the Company at the following link: https://www.iciciprulife.com/about-us/investor- relations/financial-information.html.

The Company follows intrinsic value method and hence there was no charge in the Revenue Account and Profit and Loss account on account of modification of the Revised Scheme.

The salient features of tranches issued under the Scheme and the Revised Scheme are as stated below:

Founder 2004-05 2005-06 2006-07 Founder II 2007-08 2017-18 2018-19 2018-19 special options 2018-19 Joining options 2019-20 2019-20 Joining options
Date of Grant March 28, 2005 April 25, 2005 April 26, 2006 April 24, 2007 April 25, 2008 July 25, 2017 April 24, 2018 April 24, 2018 January 22, 2019 April 24, 2019 July 24, 2019
Number of options granted 2,662,500 3,782,400 4,633,250 6,534,675 (2006-07) 470,000 (Founder II) 6,101,000 656,300 2,167,900 4,980,250 156,000 4,993,600 80,000
Maximum term for exercising the options granted

Tenth anniversary of the date of grant of options

Exercise period would commence from the date of vesting and expire on completion of ten years from the date of vesting of options

Thirteenth anniversary of the date of grant of options

Five years from date of vesting of stock options

Graded Vesting Period

1st Year 50% of option granted

25% of options granted

30% of option s granted 30% of options gr anted
2nd Year

25% of options granted

30% of options granted

-

30% of options granted

3rd Year

25% of options granted

40% of options granted

50% of options granted 50% of options granted

40% of options granted

4th Year - 25% of opti ons granted - - - -
Mode of settlement Equity

Note: The exercise price for all the options granted by the Board Nomination and Remuneration Committee (BNRC), after listing (as tabulated above), is the closing price on the recognised stock exchange, having higher trading volume, on the date immediately prior to the date of meeting of the BNRC - which is scheduled to consider granting options under the Companys employee stock option scheme.

Exercise price of all the options outstanding for all years/quarter for tranches Founder, 2004-2005, 2005-06, 2006-07, Founder II, 2007-08, 2017-18, 2018-19, 2018-19 Special Options and 2018-19 Joining Options, 2019-20 and 2019-20 Joining Options schemes is Rs30, Rs42, Rs70, Rs130, Rs130, Rs400, Rs468.6, Rs388.4, Rs388.4, Rs351.65, Rs369.30 and Rs383.10 respectively.

Particulars of options granted by the Company up to March 31, 2020 are given below:

Options granted 5,073,600
Options forfeited/ lapsed 357,700
Options vested 853,470
Options exercised 78,110
Total number of options in force 12,361,107
Number of shares allotted pursuant to exercise of options 78,110
Extinguishment or modification of options Nil
Amount realised by exercise of options (Rs) 14,342,964

 

Note: For details on option movement during the year refer Notes to accounts.

The following key managerial personnel and senior management personnel (SMP), other than wholetime Directors, were granted stock options of the Company upto a maximum of 236,600 options to an individual, aggregating to 1,288,700 options during FY2020.

Name Designation
1 Judhajit Das Chief-Human Resources
2 Satyan Jambunathan Chief Financial Officer
3 Amit Palta Chief Distribution Officer
4 Deepak Kinger Chief Risk & Compliance Officer
5 Manish Kumar Chief Investments Officer
6 Manish Dubey Chief Marketing Officer
7 Asha Murali Appointed Actuary
8 Vyoma Manek Company Secretary

No employee was granted options during any one year equal to or exceeding 0.1% of the issued equity shares of the Company at the time of the grant.

Out of the total outstanding options at April 1,2019, 853,470 options were vested during the year ended March 31, 2020 and Rs14.3 million was realised by exercise of options during the year ended March 31, 2020.

During the year ended March 31, 2020 the Company has recognised a compensation cost of Rs(year ended March 31, 2019: RsNil) as the intrinsic value of the options.

Had the Company followed fair value method based on binomial tree model valuing its options, compensation cost for the year ended would

have been higher by Rs502.5 million (March 31, 2019: Rs316.8 million) and the profit after tax as per Proforma Ind AS financial statements would have been Rs10,185.0 million (March 31, 2019: Rs11,089.7 million). On a proforma basis, the Companys basic and diluted earnings per share would have been Rs7.09 (March 31, 2019: Rs7.72) and Rs7.08 (March 31, 2019: Rs7.72) respectively.

Fair value methodology

The assumptions considered in the pricing model for the ESOPs granted during the year ended March 31, 2020 were:

Particulars ^^:March 31,2019 March 31,2020 basis
Risk-free interest rate 7.34% to 8.08% 6.42% to 7.66% G-Sec yield at grant date for tenure equal to the expected term of ESOPs
Expected life of the options 3.50 to 6.50 years 3.50 to 5.50 years Simplified method (average of minimum and maximum life of options)
Dividend yield 1.16% to 1.28% 0.82% to 1.22% Based on recent dividend declared
Expected volatility 13.21% to 14.89% 12.39% to 13.37% Based on historical volatility determined on the basis of Nifty 50

The weighted average price of options exercised during the year ended March 31, 2020 is Rs183.63 (year ended March 31, 2019: Rs164.60).

Further disclosures pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014, Guidance Note on accounting for employees share based payments issued by ICAI or any other relevant accounting standard have been included in the Notes to Accounts.

ICICI Bank Limited ("Holding company") has granted their options to certain employees of the Company. The Holding company follows an intrinsic value method and has recognised a cost of Rsnil for the year ended March 31, 2020, for the options granted to employees of the Company (year ended March 31, 2019: Rsnil).

Performance evaluation of Directors, Chairman, the Board and its Committees

The Company with the approval of its Board Nomination & Remuneration Committee has put in place a framework for evaluation of the Directors, Chairman, the Board and its Committees.

The performance evaluation was undertaken through an online survey portal. The performance of the Board was assessed on parameters relating to roles, responsibilities and obligations of the Board and functioning of the Committees including assessing the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The evaluation criteria for the Directors was based on their participation, contribution and offering guidance to and understanding of the areas which were relevant to them in their capacity as members of the Board. The evaluation criteria for the Chairman of the Board, besides the general criteria adopted for assessment of all Directors, included leadership abilities, effective management of meetings and preservation of interest of stakeholders. The evaluation criteria for the Committees were based on effective discharge of its terms of reference and their contribution to the functioning of the Board. The Board Nomination & Remuneration Committee evaluated the performance of the wholetime Directors. The details about the evaluation of the wholetime Directors are further articulated under the section titled "Compensation policy and practices."

General Body Meetings

The details of the last three Annual General Meetings (AGM) are as given below:

Financial Year ended Day, Date start time Venue
Seventeenth AGM Monday, July 17, 2017 2.00 p.m. Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Near Bombay Hospital & Medical Research Centre, New Marine Lines, Mumbai 400 020
Eighteenth AGM Tuesday, June 26, 2018 2.30 p.m. Swatantrya Veer Sawarkar Auditorium, 252, Shivaji Park, Dadar (West), Mumbai - 400 028
Nineteenth AGM Wednesday, July 17, 2019 2.00 p.m. Swatantyra Veer Savarkar Auditorium, 252, Shivaji Park, Dadar (West), Mumbai - 400 028

The following special resolutions were passed by the members during the last three Annual General Meetings:

Annual General Meeting held on July 17, 2017

• Approval and ratification of ICICI Prudential Life Insurance Company Limited - Employees Stock Option Scheme.

• Approval to Grant of Stock Options to the Employees/Directors of Holding, and/or Subsidiary Company (ies) (Present & Future) under the Revised Scheme.

Annual General Meeting held on June 26, 2018

• No special resolution was proposed.

Annual General Meeting held on July 17, 2019

• Continuation of directorship of Mr. M. S. Ramachandran as an Independent Director of the Company on attaining the age of seventy five (75) years.

• Amendment of the ICICI Prudential Life Insurance Company Limited Revised Employee Stock Option Scheme.

Postal ballot

During the year FY2020, no resolutions were passed through postal ballot. Further, at present, no special resolution is proposed to be passed through postal ballot.

Means of communication

It is the Companys belief that all stakeholders should have access to complete information regarding its position to enable them to accurately assess its future potential. The Company disseminates information on its operations and initiatives on a regular basis. The Companys website (www.iciciprulife.com) serves as a key awareness facility for all its stakeholders, allowing them to access information at their convenience. It provides comprehensive information on the Companys strategy, financial performance, operational performance and the latest press releases.

The Companys investor relations personnel respond to specific queries and play a proactive role in disseminating information to both analysts and investors. All information which could have a material bearing on the Companys share price is released through as per regulatory requirements. The information is also disseminated to the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) from time to time.

The financial and other information and the various compliances as required/ prescribed under the Listing Regulations are filed electronically with NSE and BSE through NSE Electronic Application Processing (NEAP) System and through BSE Listing Centre and are also available on their respective websites in addition to the Companys website. Additionally information is also disseminated to BSE/NSE where required by email or fax.

The Companys quarterly financial results are published in the Financial Express (Mumbai, Pune, Ahmedabad, Delhi, Chandigarh, Lucknow, Kolkatta, Bangalore, Chennai, Hyderabad and Kochi) and Loksatta (Mumbai, Pune, Nagpur, Ahmednagar, Delhi, Aurangabad edition). The financial results, official news releases, analyst call transcripts and presentations are also available on the Companys website at www.iciciprulife.com.

General shareholder Information

In view of the outbreak of the COVID-19 pandemic, social distancing is a pre-requisite and accordingly the Annual General Meeting (AGM) is proposed to be convened through Video Conference (VC) or/and Other Audio Visual Means (OAVM), in compliance with applicable provisions of the Companies Act, 2013 read with the General Circular No. 20/2020 dated May 5, 2020, General Circular No. 14/2020, dated April 8, 2020 and General Circular No. 17/2020 dated April 13, 2020, issued by the Ministry of Corporate Affairs (MCA). Considering the same, the deemed venue for 20th AGM shall be the registered office of the Company.

In view of the same, the members are given the facility to attend and participate in the AGM through Video Conference (VC)/ Other Audio Visual Means (OAVM), by following the procedure mentioned in the Notice of the AGM.

General Body Meeting Day, Date & Time
Twentieth AGM Friday, August 7, 2020, at 3.30 p.m.

Financial Year: April 1, 2019 to March 31, 2020

Dividend payment date: No final dividend was declared for the financial year 2019-20.

Fit and proper criteria for investors and continuous monitoring requirement

The IRDAI guidelines for Listed Indian Insurance Companies prescribe the following:

• Self-certification of "fit and proper person" criteria by a person holding/intending to acquire equity shares of 1% or more of paid-up equity share capital

• Prior permission of IRDAI for holding shares beyond 5% of the paid- up equity share capital.

Further information on detailed procedure and format for selfcertification is hosted on the Companys website (https://www. iciciprulife.com/about-us/shareholder-information/other.html)

Business Responsibility Reporting, Environmental, social and Governance (EsG) and Conservation of energy and Technology absorption

Business Responsibility Report (BRR) as stipulated under Regulation 34 of the Listing Regulations forms part of the Annual Report and has been hosted on the website of the Company and can be viewed at https://www. iciciprulife.com/about-us/shareholder-information/other.html.

The Company has undertaken various initiatives for energy conservation at its premises and has used information technology extensively in its operations, which includes technological interventions in aspects pertaining to policy lifecycle, marketing & lead generation, partner integration, analytics and assurance. They entail how the Company digitally transformed itself with the use of Artificial Intelligence (AI), Machine Learning (ML) and Natural Language Processing (NLP), especially with AI underwriting and Optical Character Reader (OCR), conversation bots, data insights, nudge engine and image recognition.

These are in addition to other technological strides in terms of strengthening its core systems, readying for future and supporting new growth engines. The Company detailed and showcased these capabilities, discussed the benefits of digital features and upcoming deployments, with its analysts and advisors; the same is also available on the website of the Company at https://www.iciciprulife.com/content/dam/icicipru/about-us/ corporate_policies/SE_Intimation.pdf.

Digitisation

The Company has digitised its policy issuance and servicing processes. More than 96% of all our applications are logged digitally. The Company has also offered its customers the facility of opening e-insurance accounts, an electronic repository of the policies to enable it to electronically store and administer a policy.

To the extent permitted the Company also communicates with its customers via sms and emails to reduce the use of paper. The digital platform is extended to employees, advisors and partners too. Due to these initiatives the Companys paper usage has dropped drastically over the years. The above initiatives and digital processes have not only provided speed and convenience to customers and distributors, but has also had a positive impact on environment.

Further details of some of the initiatives in terms of energy conservation and use of technology are included in the BRR and ESG Report of the Company, available on the website. The ESG Report FY2020 is available at https://www.iciciprulife.com/content/dam/icicipru/about-us/ FinancialInformation/esg-report/ESG_Report_FY2020.pdf

Maintenance of cost records

The maintenance of cost records, for the services rendered by the Company, pursuant to Section 148(1) of the Companies Act, 2013 read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014, is not required.

Foreign exchange earnings and outgo

Details of foreign exchange earnings and outgo required under section 134(3)(m) of the CA2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 are as under:

Particulars FY2019 FY2020
Foreign exchange earnings
and outgo
- Earnings 0.25 0.26
- Outgo 0.18 0.31

Commodity price risk or foreign exchange risk and hedging activities

This is not relevant to us as we do not have any derivatives or liabilities denominated in foreign currency.

Plant Locations

The Company has various branches across the country, however, there are no plants as the Company is not a manufacturing entity.

Details of unclaimed suspense account as provided by our RTA

i.e. KFin Technologies Private Limited pursuant to regulation 39 read with Part F of schedule V of securities and Exchange Board of India (Listing obligations and Disclosure requirements) regulations, 2015

For financial year 2020, there were no shares lying in the unclaimed suspense account.

Events after Balance sheet date

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the Balance Sheet relates and the date of this Report.

Disclosures

(a) There are no materially significant related party transactions that may have potential conflict with the interest of the Company.

(b) No penalties or strictures have been imposed on the Company by the stock exchanges, the Securities & Exchange Board of India (SEBI) or any other statutory authority, for any non-compliance on any matter relating to capital markets, during the last three years.

(c) In terms of the Whistle Blower Policy of the Company, no employee of the Company has been denied access to the Audit Committee.

Adoption of mandatory and non-mandatory requirements

The Company has complied with all mandatory requirements specified in Regulations 17 to 27 and clauses (b) to (i) of sub regulation 2 of Regulation 46 and some of the non-mandatory requirements pertaining to Corporate Governance stipulated under the Listing Regulations. The Company has adopted non-mandatory requirement regarding the reporting requirement of the internal auditor, which in your Companys instance reports directly to the Board Audit Committee.

Green Initiatives in Corporate Governance

In line with the Green Initiative, the Company has effected electronic delivery of notice of Annual General Meeting and Annual Report to those Members whose e-mail ids were registered with the respective Depository Participants and downloaded from the depositories viz. National Securities Depository Limited/Central Depository Services (India) Limited. The CA2013 and the underlying rules as well as Regulation 36 of the Listing Regulations, permit the dissemination of financial statements and annual report in electronic mode to the Members. Your Directors are thankful to the Members for actively participating in the Green Initiative and seek your continued support for implementation of the Green Initiative.

In order to support the cause, we have been regularly requesting Members to register/update their email ids with their Depository Participants so as to enable the Company to send various communication through electronic mode. We believe and endorse the Green InitiativeRsas it would not only rationalise the use of paper but also ensure prompt communication, avoid loss in transit and have reference value of the communication.

DETAILS PERTAINING TO SHAREHOLDING Listing of equity shares on Stock Exchange

The Company has listed its equity shares on the following stock exchanges:

stock exchange Code for ICICI Prudential Life Insurance Company Limited
BSE Limited (BSE) (Equity) 540133
Phiroze Jeejeebhoy Tower
Dalal Street
Mumbai 400 001
National Stock Exchange of India Limited (NSE) (Equity) ICICIPRULI
Exchange Plaza
Bandra-Kurla Complex
Bandra (East), Mumbai 400 051

The Company has paid the annual listing fees for the relevant periods to BSE and NSE where its equity shares are listed.

Market price Information

The reported high and low closing prices and volume of equity shares of the Company traded during fiscal 2020 on BSE and NSE are set out in the following table:

Month

bse

nse

Total volume of BsE and NsE (million)

high (Rs) Low (Rs) Volume (million) high (Rs) Low (Rs) Volume (million)
April 2019 369.30 360.40 1.97 369.50 360.75 40.22 42.19
May 2019 388.20 333.80 1.97 387.75 334.15 40.54 42.52
June 2019 397.25 352.75 1.38 398.20 352.70 32.29 33.66
July 2019 402.60 372.50 2.73 402.55 372.90 50.22 52.95
August 2019 424.50 374.90 2.38 424.60 375.10 52.43 54.81
September 2019 463.40 414.65 3.49 463.50 414.50 57.04 60.53
October 2019 512.80 441.05 1.65 512.90 440.80 45.39 47.04
November 2019 529.20 495.85 2.22 529.20 496.45 86.58 88.80
December 2019 504.75 482.50 1.22 504.80 482.45 37.77 39.00
January 2020 527.15 474.85 1.26 527.00 475.50 45.14 46.39
February 2020 495.60 446.10 3.66 495.50 446.35 54.90 58.56
March 2020 455.55 240.65 3.43 455.65 238.80 70.13 73.56
Fiscal 2020 529.20 240.65 27.35 529.20 238.80 612.65 640.00

Share Transfer System

The Companys Registrar and Transfer Agent (RTA) is KFin Technologies Private Limited. (formerly known as Karvy Fintech Private Limited) (Karvy). The address of the RTA is as follows:

KFin Technologies Private Limited.

Karvy Selenium Tower B, Plot 31-32, Gachibowli,

Financial District, Nanakramguda, Hyderabad - 500 032 Email id: einward.ris@kfintech.com Tel No. : +91-40-67162222 Fax No. : +91-40-23420814

Information on shareholding

Shareholding pattern of the Company at March 31,2020

sr. Category/Name of the shareholder No. Number of shares on March 31,2020 (in million) % Total
1 ICICI Bank Limited (Promoter) 759.1 1 52.87%
2 Prudential Corporation Holdings Limited (Promoter) 317.52 22.11%
3 Foreign Institutional Investors /Foreign Portfolio Investors/Foreign Bodies 220.26 15.34%
4 Domestic Mutual Funds 67.82 4.72%
5. Domestic Insurance Company 9.62 0.67%
6. Domestic Body corporates, Institutions, Trust & NBFC 14.69 1.02%
7. Domestic Banks 0.87 0.06%
8. Alternative Investment Fund 1.22 0.08%
9. Retail Investors & Others 44.76 3.12%
Total 1,435.87 100.00%*

* The total may not add up due to rounding off

shareholders of the Company with more than 1% holding at March 31,2020 (other than promoters of the Company)

sr. Category/Name of the shareholder No. Number of shares (in million) % to total
1 SBI Funds Management Private Limited and various other mutual fund accounts 37.02 2.58%
2 Compassvale Investments Pte. Ltd. 28.72 2.00%
3 Amansa Holdings Private Limited 14.65 1.02%

Distribution of shareholding of the Company at March 31,2020

Distribution schedule at March 31,2020 (Total)

sr. No Category No. of holders % of holders Number of shares % of equity
1 1 - 5000 340,921 99.63 33,111,451 2.31
2 5001 - 10000 390 0.11 2,814,342 0.20
3 10001 - 20000 274 0.08 3,929,160 0.27
4 20001 - 30000 105 0.03 2,635,423 0.18
5 30001 - 40000 61 0.02 2,117,248 0.15
6 40001 - 50000 45 0.01 2,020,703 0.14
7 50001 - 100000 87 0.03 6,173,753 0.43
8 100001 and above 308 0.09 1,383,060,51 1 96.32
Total: 342,191 100.00 1,435,862,591 100.00

The Companys equity shares are traded mainly in dematerialised form. During the year, 9,150 equity shares of face value Rs10/- each involving 6 certificates were dematerialised. At March 31, 2020, 99.99% of paid-up equity share capital is held in dematerialised form.

Increase in share capital

The paid-up capital of the Company increased by Rs0.78 million, consequent to allotment of shares resulting due to the exercise of stock options granted under the Companys employee stock option scheme, and the paid-up capital was Rs14.36 billion at March 31, 2020.

Details of equity shares held by the non-executive Directors of the Company at March 31,2020 is as set out in the table below:

sr. No. Name of the Director Number of shares held
1. Mr. Dileep Choksi 20
2. Mr. Anup Bagchi 8,500
3. Mr. Sandeep Batra 10,000

Queries related to the operational and financial performance of the Company may be addressed to:

Mr. Satyan Jambunathan/Mr. Dhiren Salian Investor Relations Registered office:

ICICI Prudential Life Insurance Co. Ltd.

1089 Appasaheb Marathe Marg,

Prabhadevi, Mumbai 400025 Telephone: (91 22) 50391600 Fax: (91 22) 2422 4484 Email id: ir@iciciprulife.com

Address for Correspondence

Ms. Vyoma Manek Company Secretary

ICICI Prudential Life Insurance Company Limited 1089, Appasaheb Marathe Marg,

Prabhadevi, Mumbai - 400025 Telephone: (91 22) 5039 1600 Fax: (91 22) 2422 4484 Email id: investor@iciciprulife.com

compliance certificate of the auditors

The Company has annexed to this Report (Annexure E), a certificate obtained from the statutory auditors, B S R & Co. LLP, Chartered Accountants and Walker Chandiok & Co LLP, Chartered Accountants, regarding compliance of conditions of Corporate Governance as stipulated in the Listing Regulations.

certificate from a practicing company secretary

A certificate has been received from Tushar Shridharani, Practicing Company Secretary confirming that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs or any such statutory authority.

management discussion and analysis

The Management Discussion and Analysis report for FY2020 forms part of the Annual Report.

directors responsibility statement

In accordance with the requirements of Section 134(3)(c) of the CA2013 and the Corporate Governance Guidelines, the Board of Directors confirm:

1. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for that period;

3. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that they have prepared the annual accounts on a going concern basis;

5. that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

acknowledgements

The Company is grateful to the Insurance Regulatory & Development Authority of India, Securities Exchange Board of India, Reserve Bank of India and Government of India for their continued co-operation, support and advice.

The Board of Directors and the Company would also like to take this opportunity to express sincere thanks to our valued customers for their continued patronage and the investors for reposing confidence in the Company.

The Directors express their gratitude for the valuable advice and guidance received from time to time, from the auditors and the statutory authorities. The Directors express their deep sense of appreciation to all employees and distributors, who continue to display outstanding professionalism and commitment, enabling the organisation to deliver and extend quality services. The Directors also wish to express their gratitude to ICICI Bank Limited and Prudential Corporation Holdings Limited for their continued trust and support.

For and on behalf of the Board
m. s. ramachandran
June 11, 2020 Chairman
New Delhi DIN: 00943629