ICICI Prudential Life Insurance Company Ltd.
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ISIN No INE726G01019 52Wk High (Rs.) 462 BV (Rs.) 47.78 FV (Rs.) 10.00
Bookclosure 02/11/2018 52Wk Low (Rs.) 301 EPS (Rs.) 11.28 P/E (X) 27.92
Mkt Cap. (Rs. Cr.) 45,205.67 P/BV (X) 6.59 Div Yield (%) 2.48 Mkt Lot 1
2017-03

TO THE MEMBERS

ICICI Prudential Life Insurance Company Limited

Your Directors have pleasure in presenting the 17th Annual Report of ICICI Prudential Life Insurance Company Limited (the Company) with the audited statement of accounts for the year ended March 31, 2017.

PERFORMANCE Industry in FY2017

The new business premiums of life insurance industry increased in FY2017 in terms of retail weighted received premium (RWRP). Some of the key industry trends were:

The retail weighted received premium for the industry grew 20.7% from Rs, 441.06 billion in FY2016 toRs, 532.18 billion in FY2017. The market share of private players increased from 51.5% in FY2016 to 53.9% in FY2017.

Steady increase in banc assurance mix: During the past 5 years, banc assurance has grown steadily from 13% in FY2011 to 21% till 9MFY2017 on the basis of retail new business premium. Contribution by banc assurance channel to the retail new business premium of the private players has increased to 52% for 9MFY2017 compared to 47% for FY2015.

Company in FY2017

The Company achieved a market share of 12.0% in FY2017 based on RWRP. The Company’s RWRP grew by 29.0% from Rs, 49.68 billion in FY2016 to Rs, 64.08 billion in FY2017. The Company continues to retain its market leadership among the private players and achieved market share of 22.3% amongst private players in FY2017. The Company focused on improving its protection business and there was a 90% increase in sum assured for all business.

Total gross premium collected by the Company grew by 16.6% from Rs, 191.64 billion in FY2016 to Rs, 223.54 billion in FY2017. Our continued focus on customer retention has resulted in increase in retail renewal premium by 18.5% from Rs, 119.95 billion in FY2016 to Rs, 142.19 billion in FY2017. The 13th month persistency ratio also improved from 82.4% in FY20161 to 85.7% in FY2017. The Company’s assets under management as at March 31, 2017 wasRs, 1,229.19 billion.

Total expenses increased to Rs, 31.60 billion in FY2017 as compared to Rs, 25.45 billion in FY2016 resulting in a marginal increase in total cost to total weighted received premium (TWRP2) ratio from 14.5% in FY2016 to 15.1% in FY2017. Profit after tax (PAT) for the Company stood at Rs, 16.82 billion in FY2017 compared to Rs, 16.50 billion in FY2016.

Value of New Business grew from Rs, 4.12 billion in fiscal 2016 to Rs, 6.66 billion in fiscal 2017, representing an increase of 61.7%.

Embedded Value increased from Rs, 139.39 billion at March 31, 2016 to Rs, 161.84 billion at March 31, 2017.

A summary of key parameters is as set out below:

IRs, billion)

Particulars

FY 2016

FY 2017

RWRP

49.68

64.08

Retail renewal premium

119.95

142.19

Total premium

191.64

223.54

Expenses

25.45

31.60

Standalone profit after-tax

16.50

16.82

Sum assured for new business

1,546.25

2,940.40

Assets held

1,039.39

1,229.19

Cost to TWRP3

14.5%

15.1%

OUTLOOK FOR THE INDUSTRY AND THE COMPANY

The Indian economy and capital markets performed well in FY2017 which aided the return of retail investor to financial investment avenues. It is expected that this trend would continue going forward as well. Life insurance industry is an important component of financials saving and is expected to gain from the shift in trend. Recent events like demonetization, shift from physical saving to financial saving, focus on increasing financial inclusion, improving customer proposition of insurance products coupled with fundamental strengths of Indian economy (High GDP growth rate, high savings and investment rate, favorable demography) are expected to provide fillip to growth of insurance industry in India.

The Company would continue to focus on its strategic priorities, namely:

Enhance market leadership: The Company would continue to focus on growth opportunities in the market with a customized regional strategy to maintain and enhance our position in these markets.

Expand our protection business: The Company is focused on expanding protection by offering protection as an add-on to our savings products across channels, penetrating the online term insurance market and by partnering with loan providers to offer coverage against loans.

Continue to deliver superior customer value: The Company would continue to focus on delivering value to consumers through competitive customer charges, higher returns, and transparent service experience.

Strengthen multi-channel architecture: The Company would strengthen its multichannel distribution by non-linear scale up of agency and proprietary sales force, leveraging the ban assurance franchise and focusing on quality third party distribution.

Maintain market-leading cost efficiency: The Company would focus on cost efficiency and in particular would leverage the digital platform to improve customer experience and efficiency of operations.

Customer retention: The Company would strengthen mechanisms to improve the AUM growth by increasing renewal premium and curtailing surrenders.

Superior risk adjusted fund performance: The Company has in place a robust risk and investment management frame work and endeavor to continue to deliver superior risk adjusted returns to customers.

Financial

(Rs, billion)

Standalone

Consolidated

Particulars

FY 2016

FY 2017

FY 2016

FY 2017

Profit after tax (PAT)

16.50

16.82

16.50

16.82

Balance brought forward from previous year

0.48

2.51

0.47

2.49

Profit available for appropriations

16.98

19.33

16.97

19.31

Appropriations:

Interim Equity Dividend

(9.02)

(5.52)

(9.02)

(5.52)

Proposed Final Dividend

(3.01)

-

(3.01)

-

Tax on Equity Dividends

(2.44)

(1.13)

(2.44)

(1.13)

Surplus carried to next year's account

2.51

12.68

2.49

12.66

The financial position of the Company remained strong with a solvency margin of 280.7% in FY2017 compared to 320.0% for FY2016 against regulatory requirement of 150%.

The AUM increased to Rs, 1,229.19 billion as at March 31, 2017 from Rs, 1,039.39 billion as at March 31, 2016.

OUR REACH

The Company reaches its customers through 512 offices in 449 locations at March 31, 2017. On March 31, 2017, the Company had 12,397 employees and 136,114 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

The Company offers a range of life, pension and savings products across traditional and unit-linked platforms to provide a range of long term savings and protection solutions. In order to strengthen our Protection offerings, we have launched new products on retail, mortgage and group platforms.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

The operations have resulted in a profit after tax of Rs, 16.82 billion as compared to a profit after tax of Rs, 16.50 billion for the previous year. The Board had approved payment of interim dividend of Rs, 1.10 per equity share and a special dividend of Rs, 1.00 per equity share, for the first quarter of the FY2017 at its Board meeting held on July 20, 2016 and interim dividend of Rs, 1.10 per equity share and a special dividend of Rs, 0.65 per equity share, for the second quarter of the FY2017 at its Board meeting held on October 25, 2016. Further, the Board at its Meeting held on April 25, 2017 has recommended a final dividend of Rs, 3.50 per equity share (including special dividend of Rs, 1.20 per equity share. Total dividend for the year is Rs, 7.35 per equity share aggregating to Rs, 10.55 billion for FY2017.

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 the website https://www.iciciDrulife.com/about-us/ corporate-policies.html.

CLAIMS

The Company has settled over 10,500 individual mortality claims in FY2017. The claims settlement ratio for the Company in FY2017 is 96.87%. For non-investigated claims, the settlement was completed within an average turnaround time of 3.05 days from receipt of last requirement as compared to the regulatory norm of 30 days.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The provisions of Section 186(4) of the Companies Act, 2013 (CA2013) 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 recipient of the loan or guarantee or security, is not applicable to an insurance company.

SUBSIDIARY

The Company’s 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 earning population.

During the year ended March 31, 2017, the subscribers’ funds managed by PFM have increased by 105.6% from Rs, 7,011.4 million at March 31, 2016 to Rs, 14,414.8 million at March 31, 2017. PFM registered a loss of Rs, 5.7 million (previous year: loss ofRs, 3.1 million).

On the regulatory front, letter of appointment is awaited from Pension Fund Regulatory and Development Authority (PFRDA) in relation to the Request for Proposal issued by PFRDA in September 2016 for selection of Pension Fund Managers for NPS Private Sector wherein the Company has bid for fund management fees at 0.10% p.a.

'Pension' is a niche sector and the Company through its subsidiary intends to continue its presence in this segment. The overall contribution of the subsidiary to the financial results of the Company is not significant currently as it is still scaling 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 Company’s website (www.iciciprulife.com) and will also be available for inspection by any Member of the Company at its Registered Office. A statement containing salient features of the financial statement of the subsidiary company forms part of the financial statements of the Company.

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

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

DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL

Changes in the composition of the Board of Directors and other Key Managerial Personnel (KMP) during the year

Name of Director/ KMP#

Appointment/Resignation/ Cessation of tenure

With effect from

Mr. Keki Dadiseth Independent Director

Cessation of tenure

April 26, 2016

Mr. K. Ramkumar Nominee of ICICI Bank

Resignation

May 31,

2016

Mr. Tony Wilkey

Nominee of Prudential Corporation Holdings Limited

Resignation

June 24,

2016

Mr. Rajiv Sabharwal Nominee of ICICI Bank

Resignation

June 30,

2016

Mr. M. S. Ramachandran Additional (Independent) Director

Appointment*

June 29,

2016

Mr. Dilip Karnik

Additional (Independent) Director

Appointment*

June 29,

2016

Mr. Binay Agarwala Chief Financial Officer

Resignation

June 29,

2016

Mr. Satyan Jambunathan Chief Financial Officer

Appointment

June 29,

2016

^Subject to the approval of the members at the Company's ensuing Annual General Meeting #As per CA 2013

Independent Directors

The Board of Directors of the Company at March 31, 2017 consisted of 12 Directors, out of which six are independent Directors, two Directors nominated by ICICI Bank Limited, one nominated by Prudential Corporation Holdings Limited, the Managing Director & CEO and two Executive Directors.

All independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the CA2013 and Regulation 16 of the Listing Regulations which have been relied on by the Company and were placed at the Board Nomination & Remuneration Committee and Board of Directors Meeting of the Company held on April 24, 2017 and April 25, 2017 respectively.

Separate Meeting of Independent Directors

During FY2017, a separate meeting of the Independent Directors was held on April 26, 2016.

Retirement by rotation

In accordance with the provision of section 152 of the CA2013 Mr. N. S. Kannan (DIN: 00066009) and Mr. Adrian O'ConnorfDIN: 02417554) would retire by rotation at the ensuing AGM. Mr. N. S. Kannan and Mr. Adrian O’Connor, being eligible have offered themselves for reappointment.

AUDITORS Statutory Auditors

BSR & Co. LLP, bearing registration number 101248W/W-100022, Chartered Accountants and Walker Chandiok & Co LLP bearing registration number 001076N/N500013, Chartered Accountants were appointed as joint statutory auditors of the Company at the Sixteenth Annual General Meeting held on June 24, 2016 and would hold office up to the conclusion of the ensuing Annual General Meeting.

The amended IRDAI Guidelines on Corporate Governance requires adherence to the CA2013 in addition to the provisions prescribed by the IRDAI. The CA2013 requires a listed company to appoint its auditor for a period of five years, which can be annually ratified by the members. BSR & Co. LLP bearing registration number 101248W/W-100022 has already served for three years and Walker Chandiok & Co LLP bearing registration number 001076N/N500013, has already served for one year, consequently they are proposed to be appointed for a period of two years and four years respectively, subject to the approval of the members of the Company.

Secretarial Auditors

The Company with the approval of its Board of Directors, has appointed Dr. K. R. Chandratre, Company Secretary in Practice to undertake Secretarial Audit of the Company for FY2017. The Secretarial Audit Report is annexed herewith as Annexure A. There are no qualifications, reservation or adverse remark or disclaimer made by the auditor in the report.

Listing of equity shares

During the FY2017, the Company had completed its Initial Public Offer ("IPO") by way of an offer for sale of up to 181,341,058 equity shares of face value of Rs, 10 each of the Company, by the Selling Shareholder (ICICI Bank Limited).

The shares of the Company were listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on September 29, 2016.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure B.

PARTICULARS OF EMPLOYEES

The statement containing the particulars of employees as required under Section 197(12) of the CA2013, read with Rule 5(2) of the Companies (Appointment & Remuneration) Rules, 2014, is set out in an Annexure and forms 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.

RURAL AND SOCIAL BUSINESS

The Company has Micro Insurance retail products and Group term products to cater to the protection and savings need of the unorganized and economically vulnerable section of the society.

- The Company has provided risk cover to the Self Help Group (SHG) members predominantly in the rural areas of Tamil Nadu, Maharashtra & Karnataka. These members are a group of micro entrepreneurs having homogeneous social and economic background, coming together to avail micro credit for financing their small and micro enterprises.

- Company provides Micro Insurance Savings Product at the door step to the financially backward tea workers in Assam.

- The Company partners with Micro Finance Institutions/ NBFCs and extends Group Term cover to customers for covering their loss of income risk arising out of unfortunately and untimely demise.

- 163,146 policies were issued in rural areas, constituting 23.2 % of total policy issuances. The Company also covered more than 307,300 lives of the total lives covered within the norm of 'social sector’ business.

INCREASE IN SHARE CAPITAL

The paid-up capital of the Company increased by Rs, 30.28 million pursuant to exercise of stock options granted under the Employee Stock Option Scheme taking the paid-up capital to Rs, 14.35 billion at March 31, 2017.

PUBLIC DEPOSITS

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

Corporate Social Responsibility Initiatives

The Corporate Social Responsibility policy as approved by the Board has been hosted on the Company’s website (https://www.iciciprulife.com/ about-us/company-overview/corporate-social-responsibilitv.html).

The Annual Report on Corporate Social Responsibility is annexed herewith as Annexure C.

Particulars of contracts or arrangements with related parties

The particulars of contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the CA2013 including certain arm’s length transactions under third proviso thereto are disclosed in Form AOC -2 appended as Annexure D.

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

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, safe guarding of assets as well as prevention and detection of fraud. 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 organization level and may not be embedded in any single process of the Company. The ELCs set up by the Company include:

1. Corporate governance framework comprising Board and executives committees for oversight on the management of the Company

2. Policies commensurate with the Company’s size and level of complexity to establish standards of conduct including code of conduct, whistle blower policy, work place harassment, conflict of interest, information security etc.

3. Risk management framework to identify, measure, monitor and control various risks including operational risk (including fraud risk).

4. Independent Internal Audit department with oversight from the Audit Committee

5. Employee management framework comprising hiring, retention, training, performance evaluation and remuneration structure of the employees

6. Framework to ensure compliance to regulations, laws including compliance certification, communication of changes in regulations/ laws etc.

7. Framework for identifying, monitoring of and control over outsourced activities

Operating controls: Comprises of IT and process controls operating at a system/process level with the objective of providing assurance at a transaction recording stage. Salient aspects include:

1. The Company has implemented the COSO 2013 framework for ensuring compliance with Sarbanes Oxley Act, 2002. All business processes having implication on financial results are subject to quarterly reviews. Any material deficiency is discussed at Audit Committee.

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

3. The Company has in place a robust IT control environment with integrated systems, interface controls, centralized data warehouse, spreadsheet controls, direct database update controls and access controls.

4. Control over third party service providers relevant from a financial reporting perspective.

5. The Company ensures control on safeguarding of assets comprising investment assets, IT assets and other assets.

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

1. The financials prepared are audited by joint statutory auditors, and are reviewed by Audit Committee. They are also submitted to IRDAI.

2. 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 concurrent audit certification on a daily basis and an investment risk management systems (IRMS) audit on a bi-annual basis. Any significant findings in the concurrent audit or IRMS audit are presented to the Audit Committee.

3. Management exercises review control by way of in depth reviews on financials, GL balances, liability assumptions, information security etc. conducted by CFO, Appointed Actuary and Chief of IT and operations.

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.

1. The Company follows both a proactive and reactive approach to mitigate fraud. Proactive management is done by using risk based 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.

2. 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.

3. The Company creates awareness amongst its employees and customers against fraudulent practices.

4. The Company is in compliance with "Insurance Fraud Monitoring Framework" guidelines issued by IRDAI.

Auditor's Report

There is no qualification, reservation, adverse remark or disclaimer made by the auditors in their report.

Internal audit and compliance framework Internal Audit:

The Company has in place an internal audit framework with a risk based audit approach. The basic philosophy of risk based internal audit is to provide reasonable assurance 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 day-to-day activities to ensure compliance. The Compliance function disseminates 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. 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 on a quarterly basis.

Ind AS Implementation

The Company along with its subsidiary will adopt Ind AS with effect from April 1, 2018 as per the roadmap laid down by the Ministry of Corporate Affairs for the insurance sector for implementation of Ind AS, in their press release dated January 18, 2016 as well as circulars dated March 1, 2016 and December 30, 2016 on Ind AS implementation issued by IRDAI.

The effect of transition from Indian GAAP to Ind AS is being assessed. Areas which could have a significant impact on account of the transition:

- Fair valuation of certain financial instruments

- Contract classification into insurance and investment contracts as per Ind AS 104 on Insurance Contracts along with policyholder liability valuation

- Share-based payments

- Income taxes

This list of differences identified by the Company should not be viewed as exhaustive and definitive as it is intended to highlight those areas that are considered to be most significant as of date.

Apart from the assessment, Company has made certain representations to IRDAI for further clarifications for the purpose of Ind AS implementation. There would also be a change in the presentation of financial statements including additional disclosures.

Risk Management

The Company recognizes that risk is an integral element of the business and managed acceptance of risk is essential for the generation of shareholder value. The risk governance structure of the Company consists of 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

Investment 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 Company’s 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 Company’s 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

Insurance risk is the risk arising because of mis-estimation of the best estimate or because of random fluctuations in the frequency, size and timing of insurance liabilities. Insurance risk is composed of 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 Company’s 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 minimize 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 actively promotes a risk awareness culture by improving understanding through communication. It further engages with the law enforcement agencies to create awareness on various insurance frauds and emerging issues

(c) 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 Malpractice Matrix. It also initiates actions through law enforcement authorities based on severity of the incident.

(d) 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.

(e) 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 drills for critical processes.

(f) Information Security: The Company has an information security framework that ensures all information assets are safeguarded by establishing comprehensive management processes throughout the organization.

(g) Whistle-blower policy that facilitates reporting of observed breaches. Employee Code of Conduct that is laid out with a malpractice matrix prescribing disciplinary action including caution, deterrent action and termination based on the nature and seriousness of non-compliant behavior.

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 communicated the same to all its employees. The Company believes in providing a safe working environment at the workplace. On an ongoing basis, the Company creates education & awareness amongst employees through training programs and e-mail campaigns.

CORPORATE GOVERNANCE

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

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

Whistle Blower Policy

The Company has formulated a Whistle blower Policy to encourage employees to report matters without the risk of subsequent victimization, discrimination or disadvantage. 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, non-compliance to anti-bribery & anti-corruption policy by the Company or its employees to the Board Audit Committee through specified channels. The Policy has been periodically communicated to the employees and also posted on the Company’s intranet and hosted on the website at https://www.iciciprulife.com/about-us/corporate-policies.html.

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 Directors, Employees & Connected Persons which is in conformity with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Code is applicable to the Employees of the Company, Designated Persons, and their Immediate Relatives and Connected Persons, to the extent applicable. The objective of the Code is to prohibit insider trading in any manner by the Designated Persons and to maintain confidentiality of unpublished price sensitive information and access to information on a "need to know" basis.

Code of business conduct and ethics

The Board of Directors has approved a Code of Business Conduct and Ethics for Directors and employees of the Company. 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/ company-overview/board-of-directors.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 Companvlhttps:// www.iciciprulife.com/about-us/corporate-policies.html)

Familiarization Programme for Independent Directors

Independent Directors are familiarized with their roles, rights and responsibilities in the Company as well as with the nature of industry and business model of the Company through induction programmes at the time of their appointment as Directors and through presentations on economy & industry overview, key regulatory developments, strategy and performance which are made to the Directors from time to time. The details of the familiarization programmes have been hosted on the website of the Company and can be accessed on the link: (https://www.iciciprulife. com/content/dam/icicipru/about-us/corporate_policies/Familiarisation_ Proaramme_forJD.pdf).

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.

Board of Directors

The Company’s Board is, constituted in compliance with the CA2013, in accordance with IRDAI Corporate governance guidelines, 2016 and the Listing Regulations. The Board comprises six Independent Directors, two Directors nominated by ICICI Bank Limited, one Director nominated by Prudential Corporation Holdings Limited, the Managing Director & CEO and two Executive Directors. Except the Managing Director & CEO and two Executive Directors, all other Directors including the Chairperson of the Board are non-executive Directors. There is a clear segregation of responsibility and authority between the Directors and the executive management. The Board is responsible for overall corporate strategy and other responsibilities as laid down by IRDAI under the Corporate Governance guidelines. The Managing Director & CEO and the Executive Directors oversee implementation of 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 eight Committees, namely, Board Audit Committee, Board Risk Management Committee, Board Investment Committee, Board Customer Service & Policyholders’ Protection Committee, Board Nomination and Remuneration Committee, Board Corporate Social Responsibility Committee, Stakeholders Relationship Committee and With Profits Committee.

There were six Meetings of the Board during FY2017 - on April 26, 2016, June 29, 2016, July 20, 2016, August 26, 2016, October 25, 2016, and January 24, 2017. The maximum interval between any two meetings did not exceed 120 days. The names of the Directors with their qualification and field of specialization are set out in the following table:

Name of the Director

Directors Identification Number (DIN)

Qualification

Field of specialization

Nominee Directors

Ms. Chanda Kochhar,

Chairperson, Nominee of ICICI Bank Limited

00043617

MMS - Finance, ICWA

Banking, Financial Services

Mr. N. S. Kannan,

Nominee of ICICI Bank Limited

00066009

Bachelor of Engineering (Honours) PGDM, Chartered Financial Analyst (ICFAI)

Banking, Financial Services

Mr. K. Ramkumar1

00244711

B. Sc, PG Diploma in Personnel & Industrial Relations Management

Human Resources Management, Customer Service and Operations

Mr. Rajiv Sabharwal2

00057333

B.Tech. (NT Delhi), PGDM

Banking, Financial Services

Mr. Tony Wilkey3

02337488

MBA

Insurance, asset management

Mr. Adrian O'Connor, Nominee of Prudential Corporation Holdings Limited

02417554

Fellow of the Institute of Actuaries and Fellow of Society of Actuaries

Financial management, strategic planning

Independent Directors

Mr. Keki Dadiseth4

00052165

B. Com, F.C.A (England and Wales)

Finance

Prof. Marti G. Subrahmanyam

00306761

B.Tech, PGDM, Ph.D.

Corporate finance, capital markets and international finance

Ms. Rama Bijapurkar

00001835

B.Sc (Hon.), PGDM

Market strategy

Mr. Vinod Kumar Dhall

02591373

LLB , M.Sc, Masters degree in Mathematics

Corporate Affairs, Law and Insurance

Mr. V. Sridar

02241339

B. Com (Hons), FCA

Banking, Finance and Accountancy

Mr. M. S. Ramachandran5

00943629

B. E. (Mechanical)

Oil and Petroleum Industry

Mr. Dilip Karnik6

06419513

B. Sc. and LLB

Former Judge of High Court of Bombay. Currently an Advocate

Executive Directors

Mr. Sandeep Bakhshi, Managing Director & CEO

00109206

B.E (Mech), PGDM

Banking, Insurance, Financial Services

Mr. Puneet Nanda

02578795

B.E, PGDM

Insurance, Financial Services

Mr. Sandeep Batra

03620913

B.Com, F.C.A., A.C.S.

Banking, Insurance, Financial Services

The names of the Directors and their attendance at Board Meetings during the year are set out in the following table:

Board Meetings attended/ held during the year

Attendance at last

Number of other directorships

Number of other

Name of the Director

AGM (June 24, 2016)

Of Indian public limited companies1

Of other companies8

committee9

memberships

Nominee Directors

Ms. Chanda Kochhar, Chairperson, Nominee of ICICI Bank Limited

6/6

Absent

4

2

-

Mr. N. S. Kannan,

Nominee of ICICI Bank Limited

5/6

Present

4

2

2

Mr. K. Ramkumar1

1/1

N.A

N.A.

N.A.

N.A.

Mr. Rajiv Sabharwal2

1/2

Absent

N.A.

N.A.

N.A.

Mr. Tony Wilkey3

1/1

N.A.

N.A.

N.A.

N.A.

Mr. Adrian O'Connor,

Nominee of Prudential Corporation Holdings Limited

4/6

Absent

'

N.A.

'

Independent Directors

Mr. Keki Dadiseth4

--

N.A.

N.A.

N.A.

N.A.

Prof. Marti G. Subrahmanyam

6/6

Absent

-

2

-

Ms. Rama Bijapurkar

4/6

Present

3

1

2

Mr. Vinod Kumar Dhall

6/6

Absent

6

-

7

Mr. V. Sridar

6/6

Present

9

-

9

Mr. M. S. Ramachandran5

3/4

N.A.

6

3

3

Mr. Dilip Karnik6

4/4

N.A.

2

-

1

Executive Directors

Mr. Sandeep Bakhshi, Managing Director & CEO

6/6

Absent

1

-

-

Mr. Puneet Nanda

6/6

Present

1

-

-

Mr. Sandeep Batra

6/6

Present

2

1

1

1. Mr. K. Ramkumar ceased to be a Nominee Director with effect from May 31, 2016.

2. Mr. Rajiv Sabharwal ceased to be a Nominee Director with effect from June 30, 2016

3. Mr. Tony Wilkey ceased to be a Nominee Director with effect from June 24, 2016.

4. Mr. Keki Dadiseth ceased to be an Independent Director with effect from April 26, 2016.

5. Mr. M. S. Ramachandran was appointed as an Additional (Independent) Director with effect from June 29, 2016

6. Mr. Dilip Karnik was appointed as an Additional (Independent) Director with effect from June 29, 2016

7. Comprises of public limited companies incorporated in India

8. Comprises private limited companies incorporated in India and foreign companies but excludes Section 8 companies and not for profit foreign companies.

9. Comprises only Audit Committee and Stakeholders Relationship Committee of Indian public companies.

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/chairman 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.

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 shall oversee 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 shall ensure independence of control functions demonstrated by a credible reporting arrangement.

Terms of Reference: I. Accounts & Audit

- 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.

- 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 auditor’s independence and performance, and effectiveness of audit process.

- Oversight of the procedures and processes established to attend to 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.

- Evaluation of internal financial controls and risk management systems.

- 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.

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

- Reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the Board for approval, with particular reference to:

- Matters required to be included in the director’s responsibility statement to be included in the board’s report in terms of clause (c) of sub-section (3) of Section 134 of the CA2013.

- 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. Provided that the Audit Committee may grant omnibus approval for related party transactions proposed to be entered into by the Company subject to such conditions as may be prescribed.

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

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

- 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 utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

- Review of housekeeping items, particularly review of suspense balances, reconciliations (including Subsidiary General Ledger (SGL) accounts) and other outstanding assets & liabilities.

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

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

- Carrying out any other function, if any, as is mentioned in the terms 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 CA2013 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.

II. Internal Audit

- 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.

- 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.

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

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

- 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.

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

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

- Review the functioning of the Whistle Blower/Vigil mechanism.

III. Compliance & Ethics

- Review reports on the above and on proactive compliance activities aimed at increasing the Company’s 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.

- 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.

- Supervise and monitor matters reported using the Company’s whistle blowing or other confidential mechanisms for employees and others to report ethical and compliance concerns or potential breaches or violations.

- Advise the Board on the effect of the above on the Company’s conduct of business and helping the Board set the correct "tone at the top" by communicating, or supporting the communication, throughout the Company of the importance of ethics and compliance.

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

- Review key transactions involving conflict of interest.

- Review the Anti Money Laundering (AML)/Counter - Financing of Terrorism (CFT) policy annually and review the implementation of the Company’s AML/CFT programme.

- Review compliance of Insurance Regulatory & Development Authority of India (IRDAI) Corporate Governance guidelines.

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

- 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 seven Meetings of the Board Audit Committee held during FY2017 - on April 25, 2016, June 24, 2016, June 29, 2016, July 19, 2016,

August 26, 2016, October 24, 2016 and January 23, 2017. 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. V. Sridar1 - Chairman

7/7

Prof. Marti G. Subrahmanyam2

5/6

Mr. Vinod Kumar Dhall

6/7

Mr. M. S. Ramachandran3

3/4

Mr. N. S. Kannan4

3/4

Mr. Adrian O’Connor

0/7

Mr. Keki Dadiseth - Chairman5

0/1

Mr. K. Ramkumar6

1/1

1. Appointed as a Chairman of the Board Audit Committee with effect from April 26, 2016

2. Appointed as a member of the Board Audit Committee with effect from April 26, 2016

3. Appointed as a member of the Board Audit Committee with effect from July 8, 2016

4. Appointed as a member of the Board Audit Committee with effect from June 29, 2016

5. Ceased to be the Chairman of the Board Audit Committee with effect from April 26, 2016.

6. Ceased to be a Member of the Board Audit Committee with effect from May 31, 2016.

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

iii. 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;

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

v. Review the Company’s risk-reward performance to align with overall policy objectives;

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

vii. 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.;

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

ix. Monitor and review regular updates on business continuity;

x. Formulation of a Fraud monitoring policy and framework for approval by the Board;

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

xii. Review compliance with the guidelines on Insurance Fraud Monitoring Framework dated 21st January, 2013, issued by the Authority.

xiii. 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 Company’s 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; and

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

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 FY2017 - on April 25, 2016, July 19, 2016, October 24, 2016 and January 23, 2017. 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

Prof. Marti G. Subrahmanyam -

- Chairman 4/4

Ms. Rama Bijapurkar

3/4

Mr. N. S. Kannan

3/4

Mr. Adrian O’Connor

0/4

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:

-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.

- 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 on-going monitoring of Investment Operations.

- 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 portfolio’s safety and soundness) and on the future outlook.

- 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.

- 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

FY2017 - on April 25, 2016, July 19, 2016, October 24, 2016 and January23, 2017.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

Prof. Marti G. Subrahmanyam - Chairman

4/4

Mr. N. S. Kannan

3/4

Mr. Adrian O’Connor

0/4

Mr. Sandeep Bakhshi

4/4

Mr. Sandeep Batra

4/4

*Mr. Satyan Jambunathan1

4/4

*Mr. Manish Kumar

4/4

*Mr. Binay Agarwala2

1/1

*Mr. Deepak Kinger3

2/2

*Ms. Asha Murali4

3/3

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

1. Appointed as amemberwith effect from June 29, 2016.

2. Ceased to be a member with effect from June 29, 2016

3. Appointed as a member with effect from July 20, 2016

4. Appointed as a member with effect from June 1, 2016

d) Board Customer Service & Policyholders' Protection Committee

The Board Customer Service & Policyholders’ Protection Committee will assist 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:

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

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

- Review of the mechanism at periodic intervals.

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

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

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

- Provide details of insurance ombudsmen to the policyholders.

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

- Oversee the functions of the customer service council.

- Review measures for enhancing the quality of customer service.

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

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

- 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.

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

- Review of Claims Report, including status of Outstanding Claims with ageing of outstanding claims.

- Reviewing Repudiated claims with analysis of reasons.

- Status of settlement of other customer benefit payouts like Surrenders, Loan, and Partial withdrawal requests etc.

- 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 key discussions of the GRC Meeting are put up at the Board Customer Service & Policyholders’ Protection Committee for information. The GRC is formed to provide effective grievance redressal to the policyholders. The GRC consists of two external members and three members from senior management team of the Company. Mr. R. Narayanan, an external member, chairs the GRC. As part of the grievance redressal mechanism, the GRC constituted as the final authority to address the policyholders’ grievances before approaching the Regulator and the Ombudsman office. 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 FY2017 - on April 26, 2016, July 19, 2016, October 24, 2016 and January 23, 2017. 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. Vinod Kumar Dhall - Chairman

3/4

Mr. K. Ramkumar1

1/1

Mr. Adrian O’Connor

1/4

Mr. N. S. Kannan2

3/3

1. Ceased to be a Member with effect from May 31, 2016.

2. Appointed as a Member with effect from June 29, 2016

e) Board Nomination and Remuneration Committee

The Board Nomination & Remuneration Committee shall assist 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 shall coordinate and oversee the self-evaluation of the performance of the Board and succession planning for senior management. The Committee shall ensure that the Board comprises competent and qualified Directors.

Terms of Reference:

- 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.

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

- To devise a policy on diversity of the Board.

- 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 for evaluation of every director’s performance.

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

- 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.

- 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.

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

- To approve the compensation programme 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.

- 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.

- 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 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 Nomination & Remuneration Committee held during FY2017 - on April 26, 2016, June 29, 2016, July 20, 2016 and January 23, 2017. 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. Rama Bijapurkar- Chairperson

4/4

Prof. Marti G. Subramanian

4/4

Mr. Vinod Kumar Dhall

3/4

Mr. K. Ramkumar1

0/1

Mr. Adrian O’Connor

2/4

Mr. N. S. Kannan2

1/2

1. Ceased to be a Member with effect from May 31, 2016.

2. Appointed as a Member with effect from June 29, 2016

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 will also formulate the annual CSR plan, and monitor 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 Company’s website.

Terms of Reference:

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

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

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

Composition

There were two Meetings of the Board Corporate Social Responsibility Committee held during FY2017 - on April 25, 2016 and January 24, 2017. 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. Vinod Kumar Dhall - Chairman

1/2

Mr. K. Ramkumar1

1/1

Mr. Adrian O’Connor

1/2

Mr. N. S. Kannan2

1/1

1. Ceased to be a Member with effect from May 31, 2016.

2. Appointed as a Member with effect from June 29, 2016

g) Stakeholders Relationship Committee

Terms of reference:

- Consider and review redressal and resolutions of the grievances of the security holders of the company, including those of shareholders, debenture holders and other security holders

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

- Approval and rejection of requests for split and consolidation of share certificates

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

- Redemption of securities and the listing of securities on stock exchanges

- Allotment of shares and securities

- Any other activities which are incidental or ancillary thereto

Composition

There were two Meetings of the Stakeholders Relationship Committee

held during FY2017 - on October 25, 2016 and January 24, 2017. 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. Vinod Kumar Dhall - Chairman

2/2

Mr. Keki Dadiseth1

-

Mr. Sandeep Bakhshi

2/2

Mr. Sandeep Batra2

2/2

1. Ceased to be a Member with effect from April 26, 2016

2. Appointed as a Member with effect from April 26, 2016

h) With Profits Committee

Terms of reference:

-Maintaining the asset shares, at policy level, and ensuring that only the portion of expenses representing this business shall be allocated and interest rate credits to these asset shares represent the underlying assets of these funds.

- Determining the asset share for each product in accordance with the guidance or practice standards, etc. issued by the Institute of Actuaries of India.

- Providing approval for the detailed working of the asset share, the expense allowed for, the investment income earned on the fund, etc. which were represented in the asset share.

Composition

There was one Meeting of the With Profits Committee held during FY2017-on April 22, 2016. 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. V. Sridar- Chairman

1/1

Mr. N. S. Kannan

0/1

Mr. Adrian O’ Connor

0/1

Mr. Sandeep Bakhshi

1/1

*Mr. N. M. Govardhan

1/1

Mr. Satyan Jambunathan1

1/1

*Ms. Asha Murali2

-

* As per IRDAI regulations With Profits Committee shall also have an Independent Actuary and Appointed Actuary as members.

1. Ceased to be a Member with effect from July 20, 2016

2. Appointed as a Member with effect from July 20, 2016

i) Initial Public Offer (IPO) Committee

The Board of Directors at its meeting held on April 26,2016 had constituted an Initial Public Offer (IPO) Committee to review the progress of the IPO of the Company and to undertake necessary functions for the same including approving of the necessary documents like Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP), and Prospectus etc. The said Committee comprised of Mr. N. S. Kannan, Mr. Adrian O’Connor, Mr. Sandeep Bakhshi and Mr. Sandeep Batra.

The Committee met seven times during the IPO process. The shares of the Company were listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on September 29, 2016 and subsequently since the role and objectives of the IPO Committee were successfully completed, the Committee stood dissolved.

Criteria for appointment of Directors & Senior Management

The Company has a well defined Policy for determining criteria for appointment of Directors & Senior Management personnel.

Remuneration Policy

The Company already has in place a Compensation & Benefits Policy applicable to Whole Time Directors (WTDs), Key Managerial Personnel (KMP), Senior Managerial Personnel (SMP) and other employees.

Further details with respect to the Compensation Policy are provided under the section titled "Compensation Policy and Practices".

Details of Remuneration paid to Whole Time Directors

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

The following table sets out the details of remuneration (including perquisites and retiral benefits) paid to Whole Time Directors for fiscal 2017:

Particulars

Details of Remuneration (Rs,)

Mr. Sandeep Bakhshi

Mr. Puneet Nanda

Mr. Sandeep Batra

Basic

19,870,680

11,177,640

8,742,480

Variable pay paid out in fiscal 2017

24,600,402

14,122,225

8,133,493

Allowances and perquisites1

15,788,102

13,493,002

14,407,664

Contribution to provident fund

2,384,483

1,341,312

1,049,101

Contribution to superannuation fund

150,000

-

-

Contribution to gratuity fund Stock options of ICICI Bank (Numbers)2

1,655,228

931,097

728,249

Fiscal 2017

830,000

275,500

232,750

Fiscal 2016

875,000

290,000

245,000

Fiscal 2015

875,000

290,000

245,000

1 Allowances and perquisites exclude stock options exercised during fiscal 2017 which does not constitute remuneration paid to the Whole Time Directors for fiscal 2017.

2 The table excludes special grant of stock options approved by IRDAI aggregating to 1,000,000 for Mr. Sandeep Bakhshi, 4,35,000 for Mr. Puneet Nanda and 3,67,500 for Mr. Sandeep Batra.

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 and gratuity, were provided in accordance with the scheme(s) and rule(s) applicable from time to time. In lieu of the staff home loan policy applicable to Whole Time Directors (WTDs) and Presidents of ICICI Bank, the interest subsidy scheme for home loan was introduced for the Managing Director & CEO of the Company. The same was approved and revised in April, 2017 by BNRC and the Board. During the year the Compensation and Benefits policy was reviewed, amended and approved by the Board of Directors twice at their meetings held on October 25, 2016 and April 25, 2017.

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 Directors (other than nominee Directors of ICICI Bank Limited and Prudential i.e. the promoter group) 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. The Board of Directors has approved the payment of Rs, 100,000 as sitting fees for each Meeting of Board and Rs, 20,000 as sitting fees for each Meeting of Committee attended. This amount is within the limits prescribed as per Rule 4 of Companies (Appointment & Remuneration) Rules, 2014 of the CA2013.

The Board, subject to the approval of shareholders of the Company at the ensuing Annual General Meeting, has approved the proposal for payment of profit related commission up to Rs, 750,000 every year to each non-executive Director of the Company in proportion with their tenure, other than nominee Director(s), for each year effective from financial year ended March 31, 2017. The payments would be 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 are as below:

Sitting fees paid to Independent Directors during the financial year ended March 31, 2017:

Name of the member

Amount

(inRs,)

Prof. Marti G. Subrahmanyam

9,40,000

Ms. Rama Bijapurkar

5,40,000

Mr. Vinod Kumar Dhall

9,00,000

Mr. V. Sridar

7,60,000

Mr. M. S. Ramachandran

3,60,000

Mr. Dilip Karnik

4,00,000

* As per requirements of IRDAI regulations, Mr. N. M. Govardhan being an Independent Actuary is required to be a member of the With Profits Committee and is paid fees of ^ 1,00,000 for attending the Meeting.

Remuneration disclosures pursuant to IRDAI guidelines

Pursuant to IRDAI guidelines on Remuneration of Non-executive Directors and Managing Director/Chief Executive Officer/Whole Time 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

(A) Qualitative Disclosures

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

Name, composition and mandate of the main body overseeing remuneration

The Board Nomination and Remuneration Committee (BNRC/Committee) is the body which oversees the remuneration aspects. The functions of the Committee include recommending appointments of Directors to the Board, identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommending to the Board their appointment and removal, formulate a criteria for the evaluation of the performance of the Whole Time/independent Directors and the Board and to extend or continue the term of appointment of independent Director 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 Whole Time 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, framing policy on Board diversity, framing guidelines for the Employees Stock Option Scheme (ESOS) and decide on the grant of the Company’s stock options to employees and WTDs of the Company.

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

The Company did not take advice from an external consultant on any area of remuneration during the year ended March 31, 2017.

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

The Compensation Policy of the Company as last amended and approved by the BNRC and the Board at its Meeting held on April 25, 2017, which covers all employees of the Company.

Type of employees covered and number of such employees

All employees of the Company are governed by the compensation policy. The total number of permanent employees governed by the compensation policy of the Company at March 31, 2017 was 12,397.

Key features and objectives of remuneration policy

The Company has under the guidance of the Board and the BNRC, followed compensation practices intended to drive meritocracy within the framework of prudent risk management. This approach has been incorporated in the Compensation Policy, the key elements of which are given below:

Effective governance of compensation:

The BNRC has oversight over compensation. The Committee defines Key Performance Indicators (KPIs) for the Organization and the organizational performance norms for bonus based on the financial and strategic plan approved by the Board. The KPIs include both quantitative and qualitative aspects. The BNRC assesses organizational performance as well as the individual performance of WTDs and equivalent positions. Based on its assessment, it makes recommendations to the Board regarding compensation for WTDs and equivalent positions and bonus for employees, including senior management and key management personnel.

Alignment of compensation philosophy with prudent risk taking:

The Company seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels. Compensation is sought to be aligned to both financial and non-financial indicators of performance including aspects like risk management and customer service. In addition, the Company has an employee stock option scheme aimed at aligning compensation to long term performance through stock option grants that vest over a period of time.

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

The Compensation & Benefits Policy on remuneration of Non-executive Directors and Managing Director/Chief Executive Officer/Whole Time Directors of Insurers was reviewed vide IRDAI Guidelines bearing no. IRDA/F&A/GDL/LSTD/155/08/2016 dated August 5, 2016 and in line with ICICI Group norms. During the year this Policy was reviewed, amended and approved by the Board of Directors twice at their meeting held on October 25, 2016 and April 25, 2017.

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

To ensure effective alignment of compensation with prudent risk taking, the Company shall take into account adherence to the risk framework to ensure remuneration is adjusted for all types of risks in conjunction with other pre-defined performance objectives. Remuneration payout shall be sensitive to the time horizon of the risks involved and symmetric to risk outcomes.

- Compensation is aligned to both financial and non-financial indicators of performance including controls like risk management, process perspective, customer perspective and others.

- Prudent behavior is assessed through a Good Order Index for middle and senior management level employees.

- These business objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, and process/quality and compliance objectives.

- Acts of gross negligence and integrity breach are covered under the purview of the compensation policy.

- The deferred part of the variable pay (performance bonus) will be 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.

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

The Company follows a philosophy of meritocracy, which is the relative differentiation of employees based on performance delivered. The design of the variable pay is linked to the individual employee’s performance rating which is arrived at basis assessment of performance delivered against a set of pre-defined performance objectives. These objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, and process/quality and compliance objectives. To ensure effective alignment of compensation with prudent risk parameters, the Company will take into account various risk parameters along with other pre-defined performance objectives of the Company. Prudent behavior is assessed through a Good Order Index for middle and senior management level employees.

(B) Quantitative disclosures

The following table sets forth, for the period indicated, the details of quantitative disclosure for remuneration of Whole Time Directors (including MD & CEO)

Particular

At March 31,2017

Number of meetings held by the BNRC during the financial year

4

Remuneration paid to its members during the financial year (in millions) (sitting fees)

-

Number of WTD/ CEO/ MD having received a variable remuneration award during the financial year

3

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 Breakup of amount of remuneration awarded for the financial year (in millions)

Nil

Fixed1

76.5

Variable Pay

46.9

Deferred

23.9

Non-Deferred

22.9

Share-Linked Instruments

Total amount of outstanding deferred remuneration

Nil

Particular

At March 31,2017

Cash

26.4

Shares

Nil

Shares-linked instruments

Nil

Other forms

Nil

1 Fixed pay includes basic salary, supplementary allowances, superannuation, contribution to provident fund and gratuity fund by the Company.

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

The ratio of the remuneration of each Director to the median employee’s 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.

(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. Sandeep Bakhshi, Managing Director & CEO

65:1

Mr. Puneet Nanda, Executive Director

43:1

Mr. Sandeep Batra, Executive Director

40:1

(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 Whole Time Directors, Chief Financial Officer, and Company Secretary ranged between 9.0% and 15.0%.

(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 9.0%.

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

The number of employees, as mentioned in the section on 'Management’s Discussion & Analysis’ is 12,397.

(v) The explanation on the relationship between average increase in remuneration and company performance;

The Company’s philosophy on compensation and benefits is based on the ethos of meritocracy. The twin pillars of the performance management system and talent management system are closely intertwined with the compensation and benefits policy of the Company. While the Company aims to ensure internal and external equity consistent with emerging market trends, the Company’s business model and affordability based on business performance sets the overarching boundary conditions. The design of the variable pay is linked to the individual employee’s performance rating which is arrived at basis assessment of performance delivered against a set of pre-defined performance objectives. These objectives are balanced in nature, and comprise a holistic mix of financial, customer, people, and process/quality and compliance objectives.

(vi) Comparison of the remuneration of the Key Managerial Personnel (KMP) against the performance of the company;

For the FY2017, the KMPs were paid around 0.63% of the PAT.

(vii) Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase or decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies;

Particulars

At September 29, 2016*

At

March 31,2017

Market capitalization (Rs, in billions)

479.40

548.88

Price/Earnings multiple

NA

32.6

Increase in the market quotations of the equity shares in comparison to the rate at which the last public offer made in September 2016

NA

14.5%

* Date of listing on the stock exchange (market capitalization computed at issue price)

(viii) 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 2017 was around 9.0%, while the average increase in the remuneration of the Key Managerial Personnel was in the range of 9.0% to 15.0%.

(ix) Comparison of each remuneration of the Key Managerial Personnel against the performance of the company;

The ratio of the remuneration of each KMP (as per CA2013) to the PAT of the Company is given below:

Mr. Sandeep Bakhshi, Managing Director & CEO

0.23%

Mr. Puneet Nanda, Executive Director

0.15%

Mr. Sandeep Batra, Executive Director

0.14%

Mr. Satyan Jambunathan, Chief Financial Officer

0.09%

Ms. Vyoma Manek, Company Secretary

0.02%

(x) The key parameters for any variable component of remuneration availed by the directors;

The Compensation & Benefits Policy applicable to Whole time Directors, Key Managerial Personnel (KMP), Senior Managerial Personnel (SMP) and other employees, is in line with the guidelines issued by IRDAI on Remuneration of Non-executive Directors and Managing Director/Chief Executive Officer/Whole Time Directors of Insurers and in line with ICICI Group norms.

These KPIs of the Organization and Whole Time Directors, in addition to financial parameters, include parameters related to quality and health of the business. 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. At the end of the financial year, the performance of the Company as well as performance of each WTD based on their respective KPI(s) is presented to the BNRC. Based on the performance assessment by the BNRC, the variable component of the remunerations for the WTDs is recommended to and approved by the Board.

(xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;

Not applicable

(xii) Affirmation that the remuneration is as per the remuneration policy of the company.

Yes

Performance evaluation of Board, Committees and Directors

The evaluations for the Directors, the Board and the Chairperson of the Board were undertaken through circulation of three questionnaires, one for the Directors, one for the Board and one for the Chairperson of the Board. The performance of the Board was assessed on select parameters related 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 Chairperson of the Board besides the general criteria adopted for assessment of all Directors, focused incrementally on leadership abilities, effective management of meetings and preservation of interest of stakeholders. The evaluation process for Whole Time Directors is further detailed under the section titled "Compensation Policy and Practices.

Employee Stock Option Scheme (ESOS)

The Company has an Employee Stock Option Scheme ("the Scheme" or "ESOS") which was instituted vide approval of its members at the Extra-Ordinary General Meeting (EGM) dated March 28, 2005. The Scheme was subsequently amended vide its EGM dated February 24, 2015. Further, the Scheme has been last amended in April 25, 2017 pursuant to a resolution of the Board of Directors of our Company, which shall be effective subject to the approval of the Members of the Company ("Revised Scheme" or "Revised ESOS"). The details of the Scheme as per the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 can be reviewed on the website of the Company (https://www. iciciDrulife.com/content/dam/icicipru/about-us/Financiallnformation/ Annual Reports/FY2017.pdf).

The aggregate options granted to the eligible employees under the Scheme are capped at 3% of the issued capital of the Company as on the date of grant(s). The Revised ESOS proposes that 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 a to 2.64% of the number of shares issued as on March 31, 2016

Both the Scheme and the Revised Scheme, provides for a minimum period of one year between the grant of options and vesting of options.

According to the Scheme, the "Exercise Period" means the period commencing from the date of vesting of options and ending on the later of (i) the tenth anniversary of the date of grant of options or (ii) such extended time period for specific grants previously made as may be approved by the Board Nomination & Remuneration Committee from time to time or (iii) the fifth anniversary of the date of vesting of options. The shareholders of the Company in their meeting held on February 24, 2015 approved extension of the exercise period by 3 years for the options granted between 2005 to 2007. Further, it is proposed to amend the definition of "Exercise Period" in the Revised Scheme as the period commencing from the date of vesting and would expire on completion of such period not exceeding ten years from the date of vesting of Options as may be determined by the Board Nomination and Remuneration Committee for each grant.

Pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014, note 3.17 and 3.19 of Schedule 16 of the financial statements for the year ended March 31, 2017 include disclosure required by 'Guidance note on accounting for employee share-based payments’ issued by ICAI or any other relevant accounting standards. Further, disclosure regarding diluted earnings per share (EPS), method used to account for options, difference between employee compensation cost as per intrinsic value and as per fair value and its impact on profit and EPS, option movement during the year, weighted-average exercise prices and the various tranches in which the options vest are also disclosed in the Notes to Accounts.

The Company has not granted any options under its Revised ESOS scheme during FY 2017 pending approval from the Members of the Company.

Details of equity shares held by the non-executive Directors as on March 31, 2017:

None of the non-executive Directors of the Company holds shares of the Company as on March 31,2017.

General Body Meetings

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

Financial Year ended

Day, Date

Start time

Venue

Fourteenth

AGM

Monday, June 23, 2014

4.30 p.m.

ICICI Prudential Life Insurance Company Limited, 1089 Appasaheb Marathe Marg, Prabhadevi, Mumbai 400025

Fifteenth

AGM

Thursday, June 25,2015

10.00 a.m.

ICICI Prudential Life Insurance Company Limited, 1089 Appasaheb Marathe Marg, Prabhadevi, Mumbai 400025

Sixteenth

AGM

Friday, June 24,2016

11.00 a.m.

ICICI Prudential Life Insurance Company Limited, 1089 Appasaheb Marathe Marg, Prabhadevi, Mumbai 400025

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

Annual General Meeting held on June 23, 2014

- Revision in remuneration payable to Mr. Sandeep Bakhshi, Managing Director & CEO.

- Revision in remuneration payable to Mr. Puneet Nanda, Executive Director.

- Revision in remuneration payable to Mr. Sandeep Batra, Executive Director.

Annual General Meeting held on June 25, 2015

- Re-appointment & Revision in remuneration payable to Mr. Sandeep Bakhshi, Managing Director &CEO.

- Re-appointment & Revision in remuneration payable to Mr. Puneet Nanda, Executive Director.

- Revision in remuneration payable to Mr. Sandeep Batra, Executive Director.

Annual General Meeting held on June 24, 2016

- Amendment of the Articles of Association of the Company

Means of Communication

It is the Company’s 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 Company’s 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 Company’s strategy, financial performance, operational performance and the latest press releases.

The Company’s 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 Company’s 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 Company’s website. Additionally information is also disseminated to BSE/NSE where required by email or fax.

The Company’s quarterly financial results are published in the Financial Express (Mumbai, Pune, Ahmedabad .Lucknow , Delhi, Calcutta, Chandigarh, Chennai, Bangalore, Hyderabad, Cochin edition) 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 Company’s website.

Share Transfer System

The Company’s Registrar and Transfer Agent (RTA) is Karvy Computershare Private Limited (Karvy). The address of the RTA is as follows: Karvy Computershare Private Limited

Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032 Email id: einward.ris@karvv.com Tel No.: 91-40-67162222 Fax No.: 91-40-23420814

During the year the Company has transferred its Share Transfer Agent to Karvy Computershare Private Limited from 3i Infotech Limited

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

Mr. Satyan Jambunathan/Mr. Vikas Gupta Investor Relations

ICICI Prudential Life Insurance Co. Ltd.

1089 Appasaheb Marathe Marg,

Prabhadevi, Mumbai 400025 Telephone: (91 22) 40391600 Fax: (91 22) 6662 2031 Email id: ir@iciciprulife.com

ADDITIONAL INFORMATION

Conservation of Energy and Technology absorption

The Company has undertaken various initiatives for energy conservation at its premises and has used information technology extensively in its operations; further details are given in the Business Responsibility Report.

Business Responsibility Reporting

Business Responsibility Report as stipulated under Regulation 34 of the Listing Regulations form part of the Annual Report and is available on the website of the Company (https://www.iciciDrulife.com/content/dam/ icicipru/about-us/business-responsibilitv-report/BRR2017.pdf).

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 branches of the Company are highlighted in this report earlier, however, there are no plants as the Company is not a manufacturing entity.

Address for Correspondence

Ms. Vyoma Manek

Company Secretary and Compliance Officer ICICI Prudential Life Insurance Company Limited 1089, Appasaheb Marathe Marg,

Prabhadevi, Mumbai - 400025 Telephone: (91 22) 40391600 Fax: (91 22) 6662 2031 Email id: investor@iciciprulife.com

*As on the date of this Report, there are no shares lying unclaimed 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

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

2. 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.

3. 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 following non-mandatory requirements:

1. Separate posts of chairperson and chief executive officer

The listed entity may appoint separate persons to the post of chairperson and managing director or chief executive officer

2. Reporting of internal auditor

The internal auditor may report directly to the audit committee.

GREEN INITIATIVES IN CORPORATE GOVERNANCE

In line with the 'Green Initiative’, the Company has effected electronic delivery 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 Obligations, 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 Initiative’ as it would not only rationalize the use of paper but also ensure prompt communication, avoid loss in transit and have reference value of the communication.

DIGITISATION

In furtherance of Green Initiative, the Company has digitized its policy issuance and servicing processes. More than 95% 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 Company’s 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.

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:

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

(b) 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;

(c) 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;

(d) that they have prepared the annual accounts on a going concern basis;

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

(f) that they have devised proper systems to ensure compliance with the provisions 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 its 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 organization to retain market leadership in its business operations. 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

May 30, 2017 CHANDA KOCHHAR

Mumbai Chairperson

DIN: 00043617