Notes to Accounts of SBI Life Insurance Company Ltd.

Mar 31, 2025

r. Provisions and Contingent Liabilities / Assets

The Company recognises a provision when there is
a present obligation as a result of a past event that
probably requires an outflow of resources and a
reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is
made when there is a possible obligation or a present
obligation that may, but probably will not, require
an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood
of outflow of resources is remote, no provision or

disclosure is made. Loss contingencies arising from
litigation etc. are recorded when it is probable that
a liability has been incurred and the amount can be
reasonably estimated.

Contingent assets are neither recognised nor disclosed.

s. Earnings per Share

As per Accounting Standard 20 on Earnings Per Share,
basic earnings per share are calculated by dividing the
net profit or loss for the period in the shareholders''
account by the weighted average number of equity
shares outstanding during the period.

For the purpose of calculating diluted earnings per
share, the net profit or loss for the year attributable
to shareholders and the weighted average number of
shares outstanding during the period are adjusted for
the effects of all dilutive potential equity shares.

t. Cash and Cash Equivalents

Cash and cash equivalents for the purpose of
Receipts and Payments Account comprises of cash
and cheques in hand, bank balances, deposits with
banks and other short-term highly liquid investments
with original maturities of three months or less.
Receipts and Payments Account is prepared and
reported using the Direct Method in accordance with
Accounting Standard 3, Cash Flow Statements" as per
requirements of the IRDAI AFI Master Circular 2024
and the IRDAI AFI Regulations 2024.

Notes:

Note 1:

Show-cause notices issued by various Government
Authorities are not considered as an obligation.
When any order or notice is raised by the authorities
for which the Company is in appeal under
adjudication, these are disclosed as contingent liability
except in cases where the probability of any financial
outflow is remote.

Note 2:

The IRDAI has issued directions under section 34 (1)
of the Insurance Act, 1938 to refund to the members
or the beneficiaries, the excess commission allegedly
paid to corporate agents amounting to '' 27,529 Lakhs
(previous year ended March 31, 2024: '' 27,529 Lakhs)
vide order no. IRDA/Life/ORD/Misc/083/03/2014
dated March 11, 2014 has been set aside by Securities
Appellate Tribunal (SAT) vide its order dated 29
January 2020. The SAT has remitted the matter to
IRDAI to recalculate the interest earned on advance
premium collected. The IRDAI recalculation, if any,
has not been received by the Company. The IRDAI
and SBI Life both, have challenged SAT order dated
January 29 2020 before the Hon''ble Supreme Court

of India in Civil Appeal Nos. 254-255 of 2021 and Civil
Appeal No. 2497-2498 of 2021 respectively, which is
yet to be adjudicated upon.

Note 3:

These cases pertain to litigation arising in the ordinary
course of business and pending at various appellate
forums/courts. The Company has made a provision of
'' 5,319 Lakhs at March 31, 2025 (Previous year ended
March 31, 2024''4,388 Lakhs) where the management
assessment of a financial outflow is probable.

Pending Litigation

The Company''s pending litigations comprise of
claims against the Company primarily by customers
and proceedings pending with tax authorities.
The Company has reviewed all its pending litigations
and proceedings and has adequately provided for
where provisions are required and disclosed the
contingent liability (refer note 1 of Schedule 16
(C)) where applicable, in its financial statements.
The Company does not expect the outcome of these
proceedings to have a material adverse effect on its
financial statements as at March 31, 2025.

5. Actuarial Assumptions

The assumptions used in valuation of liabilities are in accordance with the guidelines and norms issued by the IRDAI
and the Institute of Actuaries of India (IAI) in concurrence with IRDAI.

The actuarial assumptions certified by the Appointed Actuary are as under:

a. In the actuarial valuation all the policies, which were in the books of the Company and where there is a liability
as at March 31, 2025, have been taken into account.

The portfolio consists of Participating,
Non-Participating and Linked segments.

''Participating'' segment is further classified in
to the following Lines of Businesses (LoBs):
Individual - Life - Participating, Individual -
Pension - Participating, Group - Pension -
Participating and Individual - VIP - Participating.

''Non-Participating'' segment is further
classified in to the following LoBs: Individual

- Life - Non-Participating, Individual

- Pension - Non-Participating, Group
Savings - Non-Participating, Group One
Year Renewable Group Term Assurance
(OYRGTA) - Non-Participating, Group
Other - Non-Participating, Annuity -
Non-Participating (Individual and Group), Health

- Non-Participating (Individual and Group), and
VIP - Non-Participating (Individual and Group).

''Linked'' segment is further classified in to the
following LoBs: Individual - Life - Linked, Group
- Linked and Individual - Pension - Linked.

b. In respect of the policies which are likely to get
cancelled during their free-look period, adequate
provision has been made towards the strain that
may arise. Such provision has been made in line
with the company experience and the relevant
provisions in the policy contract(s).

c. The following parametric values are used to carry
out the actuarial valuation:

For mortality assumption under life business
''Indian Assured Lives (2012-2014) Ultimate
Mortality table'' and under general annuity
business ''Indian Individual Annuitant''s
Mortality Table (2012-15)'' has been used.
For Morbidity assumption, the Morbidity Tables
provided by re-insurers has been used with
suitable adjustment.

For participating products, the vested bonuses
are those which were distributed by the
Company consequent to the actuarial valuations
carried out annually at the end of each financial
year dated March 31, 2002 to March 31, 2025.
Regarding bonus provisions for the current
financial year and bonus provision for future
years, the bonus rates have been assessed by
carrying out Bonus Earning Capacity (BEC) / asset
share investigations and taking into consideration
the policyholder''s reasonable expectations.

Prevailing tax rate as applicable has been duly
allowed for in valuation of policy liabilities.

For participating pension products, special
one-time bonus declared during financial year
2003-04 and 2004-05 have been taken into
account. Appropriate future bonus assumptions
have been made.

Margin for Adverse Deviation (MAD) has been
provided, wherever applicable and required.

In addition to this, Incurred but Not Reported
(IBNR) claims reserve is also provided
wherever required.

The above parameters and the MAD provision
have been observed to ensure prudence and are
in accordance with the GN / APS issued by the
Institute of Actuaries of India and in concurrence
with the Regulations and circulars of IRDAI.

The Surplus emerged from Non-participating
segment has been transferred to Profit & Loss
Account for the year ended March 31, 2025
based on the recommendation of the Appointed
Actuary and the necessary fund transfer will be
made after the year end on the basis of Audited
financials with required recommendations by the
Appointed Actuary.

Appointed Actuary is satisfied that the nature
and extent of reinsurance arrangements require
no additional reserve to be set aside apart from
reinsurance reserves set aside based on Unearned
Premium Reserve (UPR) methodology.

Considering the prudence of the valuation
basis and the margins in the assumptions, our
assessment is that, the reserve set aside is
sufficient to meet all future policy outgoes under
adverse conditions.

Funds for Future Appropriation

As at March 31, 2025, the Funds for Future
Appropriation (FFA) in non-linked participating
segments is '' 144,797 Lakhs (previous year ended
March 31, 2024''133,656 Lakhs).

As at March 31, 2025, the Funds for Future
Appropriation (FFA) held in linked segments
is '' 14,340 Lakhs (previous year ended

March 31, 2024: Nil) in accordance with the
IRDAI AFI Regulations 2024 and the IRDAI AFI
Master Circular 2024.

6. Cost of Guarantee

Provision of '' 58,010 Lakhs (previous year ended March 31, 2024''32,493 Lakhs) has also been made for the cost of
guarantee under Individual unit linked policies with guarantee.

7. Policy Liabilities

The non-linked policy liability after reinsurance of '' 17,988,323 Lakhs as on March 31, 2025 (previous year ended
March 31, 2024 : '' 15,580,850 Lakhs) includes the following non-unit reserve held for linked liabilities:

12. Managerial remuneration

Insurance Regulatory and Development Authority of India (''IRDAI'' or ''the Authority'') has issued Master Circular on
Corporate Governance for Insurers, 2024 which replaces and supersedes erstwhile Guidelines on Remuneration
of Directors and Key Managerial Persons of Insurer 2023. The IRDAI Master Circular on Corporate Governance for
Insurers, 2024 specifies the norms for remuneration of KMPs.

The Managing Director and CEO is on deputation from State Bank of India (SBI) and his remuneration is included under
“Employees remuneration and welfare benefits" under “Operating expenses related to insurance business." Further,
as per IRDAI Master Circular on Corporate Governance for Insurers, 2024 the remuneration of KMPs of insurers on
deputation from PSU promoter are allowed to be governed by their respective remuneration rules/guidelines of
their PSU promoter.

Qualitative Disclosures

1. Information relating to the composition and mandate of the Nomination and Remuneration Committee

The Board Nomination and Remuneration Committee (NRC) oversees and governs the compensation practices
of the Company. The Company''s Remuneration Policy is guided by a reward framework and set of principles and
objectives as more fully and particularly envisaged under section 178 of Companies Act 2013, Master Circular on
Corporate Governance for Insurers, 2024 and SEBI Listing Regulations.

performance is clear and meets performance
benchmarks. Remuneration shall consist of
Fixed Pay including allowances, perquisites,
retirement benefits and Variable Pay
including incentives, bonus, share linked
instruments, joining / sign of bonus, etc.

• To provide to Key Management Persons,
Senior Management and other employees,
rewards linked directly to their effort,
performance, dedication and achievement
relating to the Company''s operations
and shall not encourage Key Managerial
Persons to take inappropriate or excessive
risks for their performance based
variable remuneration.

• To retain, motivate and promote talent
and to ensure long term sustainability of
talented managerial persons and create
competitive advantage.

• To ensure alignment of compensation with
prudent risk taking.

The policy is reviewed by Board NRC annually or
as and when required.

3. Description of the ways in which current
and future risks are taken into account in the
remuneration policy including the nature and
type of the key measures used to take account
of these risks

The Remuneration policy promotes
sound and prudent risk management.
Remuneration structure is well aligned with
the long-term growth, health and objectives
of the company. Compensation outcomes are
symmetric with risk outcomes and pay-outs
thereof are sensitive to the time horizon of the

risk and the mix of cash, equity and other forms of
remuneration are consistent with risk alignment.

The Remuneration policy of the Company
ensures proper balance between fixed pay and
variable pay. Variable Pay is in the form of “pay
at risk" and depending on performance and risk
outcomes at individual and company-wide level,
the quantum of Variable Pay changes.

As per the Remuneration policy, which is aligned
with IRDAI circular, for Key Managerial Persons,
at least 50% of the total variable pay is under
deferral arrangement and the deferral is spread
over at least three years. The deferred variable
pay is also subject to Malus and Claw-Back
clauses as detailed in the Remuneration Policy
of the Company.

4. Description of ways in which the insurer seeks
to link performance, during a performance
measurement period, with levels of
remuneration.

The Company has an annual increment and
variable pay policy which is based on merit pay
philosophy linked to both individual as well as
Company''s performance.

Various performance parameters for the
Company are reviewed by Board NRC and
approved by the Board every year. Based on the
actual performance, the Company performance
rating is approved by the Board based on the
recommendations of Board NRC after the end of
every financial year.

The framework of annual increment and
performance linked Variable Pay for all employees
is reviewed by the Board NRC and approved by
the Board every year.

2. Information relating to the design and structure
of remuneration policy and the key features and
objective of remuneration policy

We follow contribution-oriented philosophy
and our compensation is performance-driven,
emphasizing and recognizing the contributions
made by individual employees. It accentuates
performance-based pay, incentives, and shared
responsibility for benefits. The key objectives of
the remuneration policy are:

• To define and implement overall
remuneration philosophy and framework
for payment of remuneration payable to
Directors (Executive and Non-Executive),
Key Managerial Persons and other
employees of the Company.

• To ensure that level and composition
of remuneration is reasonable and
sufficient, relationship of remuneration to

Income tax provisions involves significant judgments in determining the provision for income taxes including judgment
on whether tax positions are probable of being sustained in tax assessments. The Management periodically reassess
and evaluates tax position with respect to applicable tax law based on the existing facts and circumstances.

16. Operating lease arrangements
(a) Assets taken on operating lease:

In accordance with Accounting Standard 19 on ''Leases'', the details of leasing arrangements entered into by the
Company are as under:

The Company has entered into agreements in the nature of lease or leave and licence with different lessors or
licensors for residential premises, office premises and motor vehicles. These are in the nature of operating lease.
Some of these lease arrangements contain provisions for renewal and escalation. There are no restrictions imposed
by lease arrangements nor are there any options given to the Company to purchase the properties and the rent is not
determined based on any contingency.

The operating lease rentals charged to the Revenue Account during the year and future minimum lease payments as
at the Balance Sheet date are as follows:

17. Earnings per share

In accordance with Accounting Standard 20 on ''Earnings per share'', basic earnings per share are calculated by dividing
the net profit or loss in the shareholders'' account by the weighted average number of equity shares outstanding
during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to shareholders
and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive
potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares
would decrease the net profit per share from continuing ordinary operations.

19. Employee benefits
a. Defined Benefit Plans:

(i) Gratuity

Gratuity is funded defined benefit plan for qualifying employees under which the Company makes a contribution
to the SBI Life Insurance Company Limited Employees Gratuity Fund. The plan provides for a lump sum payment
as determined in the manner specified under The Payment of Gratuity Act, 1972, to the vested employees either
at retirement or on death while in employment or on termination of employment. The benefit vests after five
years of continuous service. Defined benefit obligations are actuarially determined at each Balance Sheet date
using the projected unit credit method (PUCM) as per Accounting Standard 15 (Revised), “Employee benefits".
Actuarial gains and losses are recognised in the Revenue Account.

c. Employee Stock Option Scheme (ESOS)

The SBI Life Employee Stock Option Plan 2018 (''ESOP 2018'') and SBI Life Employees Stock Option Scheme 2018 (''the
Scheme'' or ''ESOS 2018'') has been approved by the shareholders of the Company in the Annual General Meeting (AGM)
held on September 27, 2018 based on the recommendation of the Board Nomination & Remuneration Committee
(''NRC'') and Board of Directors (''Board'') in their meetings held on August 31, 2018.

The maximum number of stock options granted to eligible employees in accordance with ESOP 2018 shall not exceed
30,000,000 shares. During any one year, no employee shall be granted Options equal to or exceeding 1% of the issued
share capital of the Company at the time of Grant of Options unless an approval from the Shareholders is taken by
way of special resolution in a General Meeting. Further, the maximum number of Options in aggregate granted to an
employee under this Plan shall not exceed 10,000,000 Options. The Exercise Price shall be determined by the Board
Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the
Options are granted and provided in the letter of grant.

The Scheme is directly administered by the Company and provides that eligible employees are granted options to
subscribe to equity shares of the Company which vest in a graded manner. The vested options may be exercised
within a specified period.

During the year ended March 31, 2025 the NRC in its meeting held on July 17, 2024 and July 24, 2024 has approved
the grant of the Employee Stock Options (''Options'') under the provisions of ESOS 2018.

22. Investment Properties - Real Estate Investment Trusts (REITs)

The investment in Real Estate Investment Trusts (REIT''s) of '' 131,338 Lakhs as at year ended March 31, 2025 (Previous
year ended March 31, 2024''64,726 Lakhs) has been disclosed as part of the Investment Property in accordance
with the IRDAI AFI Master Circular 2024 and the IRDAI AFI Regulations 2024 under schedule 8 and 8A of the
Financial Statements.

23. Derivatives

The Company offers guaranteed products wherein the Policyholders are assured of a fixed rate of return for premiums
to be received in future. These premiums are likely to be received over a longer tenure and the guaranteed rate
of return is fixed at the beginning of the policy term. Any fall in interest rates would mean that each incremental
investment of the Company would earn a lower rate of return. Accordingly, the Company manages the Interest Rate
Risk in accordance with the IRDAI AFI Master Circular 2024 and the IRDAI AFI Regulations 2024 which allows insurers
to deal in rupee interest rate derivatives such as Forward Rate Agreements (“FRAs"), Interest Rate Swaps (“IRS") and
Exchange Traded Interest Rate Futures (“IRF").

The Company has in place a derivative policy approved by Board which covers various aspects that apply to the
functioning of the derivative transactions undertaken to substantiate the hedge strategy to mitigate the interest rate
risk, thereby managing the volatility of returns from future fixed income investments, due to variations in market
interest rates.

The Company enters into Forward Rate Agreements (FRA) transactions, as part of its Hedging strategy, to hedge
the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI circular on Interest
Rate Derivatives.

Forward Rate Agreement derivative contracts are over-the-counter (OTC) transactions wherein, the Company lock-in
the yield on the government bond for the period till the maturity of the contract with an objective to lock in the price
of an interest bearing security at a future date.

Derivatives (FRA) are undertaken by Company solely for the purpose of hedging interest rate risks on account of
following forecasted transactions: a) Reinvestment of maturity proceeds of existing fixed income investments; b)
Investment of interest income receivable; and c) Expected policy premium income receivable on insurance contracts
which are already underwritten in Life, Pension & Annuity business.

vii. A net amount of ''(7,072) Lakhs for the year ended March 31, 2025 (Previous year ended March 31, 2024 ''(15,811)
Lakhs) has recognized in Revenue Account being portion of loss determined to be ineffective.

viii. The amount that was removed from Hedge Reserve account during the year ended March 31, 2025 in respect of
forecast transaction for which hedge accounting had previously been used, but is no longer expected to occur
is '' Nil (Previous year '' Nil). The cash flows from the hedges are expected to occur over the outstanding tenure
of underlying policy liabilities and will accordingly flow to the Revenue Account.

B. Qualitative Disclosures on risk exposure in Fixed Income Derivatives:

Overview of business and processes:

a) Fixed Income Derivative Hedging instruments:

Derivatives are financial instruments whose characteristics are derived from the underlying assets, or from interest
and exchange rates or indices. These include forward rate agreements, interest rate swaps and interest rate futures.

The Company during the financial year has entered into FRA derivative instrument to minimise exposure to
fluctuations in interest rates on plan assets and liabilities. This hedge is carried in accordance with its established
policies, strategy, objective and applicable regulations. The Company does not engage in derivative transactions
for speculative purposes.

b) Derivative policy/process and Hedge effectiveness assessment:

The Company has well defined Board approved Derivative Policy and Process document setting out the strategic
objectives, regulatory and operational framework and risks associated with interest rate derivatives along with
having measurement, monitoring processes and controls thereof. The accounting policy has been clearly laid
out for ensuring a process of periodic effectiveness assessment and accounting.

The Company has clearly identified roles and responsibilities to ensure independence and accountability
through the investment decision, trade execution, to settlement, accounting and periodic reporting and audit

of the Interest Rate Derivative exposures. The risk management framework for the Interest Rate Derivatives are
monitored by the Risk Management Committee.

c) Scope and nature of risk identification, risk measurement, and risk monitoring:

The Derivative and related Policies as approved by the Board sets appropriate market limits such as sensitivity
limits and value-at-risk limits for exposures in interest rate derivatives. All financial risks of the derivative portfolio
are measured and monitored on periodic basis.

C. Quantitative disclosure on risk exposure in Forward Rate Agreement

A hedge is deemed effective, if it has a high statistical correlation between the change in value of the hedged item
and the hedging instrument (FRA). Gains or losses arising from hedge ineffectiveness, if any, are recognised in the
Revenue Account.

The credit exposure limit for FRA derivatives has been calculated on the basis of Credit Equivalent Amount using the
Current Exposure Method (CEM) as detailed below:

The Credit Equivalent Amount of a market related off-balance sheet transaction calculated using the CEM is the sum of

a) the current credit exposure (gross positive mark to market value of the contract); and

b) potential future credit exposure which is a product of the notional principal amount across the outstanding
contract and a factor that is based on the mandated credit conversion factors as prescribed under the IRDAI
circular on Interest Rate Derivatives, which is applied on the residual maturity of the contract.

25. Additional disclosure requirements as per Corporate Governance Guidelines

i. Quantitative and qualitative information on the insurer''s financial and operating ratios, namely, incurred
claim, commission and expenses ratios:

Refer summary of financial statement and ratios.

ii. Actual solvency margin details vis-a-vis the required solvency margin

The actual solvency margin of the Company as on March 31, 2025 stands at 1.96 times (previous year ended
March 31, 2024: 1.96 times) as against regulatory requirement of 1.50. There has been no capital infusion
after FY 2007-08.

iii. Persistency ratio

The persistency ratio (13^th month) for regular premium and limited premium paying term policies of Individual
segment for the year ended March 31, 2025 is 87.41% (previous year ended March 31, 2024 is 86.78%) based on
premium amount and 80.43% (previous year ended March 31, 2024 is 81.10%) based on number of policies.

The persistency ratios are calculated as per IRDAI circular reference IRDAI/NL/MSTCIR/RT/93/6/2024
dated June 14, 2024.

Persistency ratios for the year ended March 31, 2025 and March 31, 2024 are calculated using policies issued in
1^st March to 28^th/29^th February period of the relevant years.

iv. Financial performance including growth rate and current financial position of the insurer

Refer summary of financial statement and ratios.

v. A description of the risk management architecture

The Board has the ultimate responsibility for overseeing the management of risk within the Company. The Risk
profile of the Company is reported to the Board by the Risk Management Committee of the Board (RMC-B)
from time to time. The RMC-B is responsible for overseeing the Company''s risk management program and
for ensuring that significant risks to the Company are reported to the Board on a timely basis and apprise the
Board of the various risk management strategies being adopted. The Company''s Risk Appetite statement and the
Annual Risk assessment are reviewed by the Board so as to ensure that the business of the Company is carried
out within the set risk limits.

The RMC-B is supported by Risk Management Committee of the Executives (RMC-E) and the Asset Liability
Committee (ALCO). The RMC-E oversees the enterprise wide risk management activities and the ALCO monitors
insurance and investment risk portfolio.

---

Mar 31, 2024

5. Actuarial assumptions

The assumptions used in valuation of liabilities are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with IRDAI.

The actuarial assumptions certified by the Appointed Actuary are as under:

a. In the actuarial valuation all the policies, which were in the books of the Company and where there is a liability as at March 31, 2024, have been taken into account.

The portfolio consists of Participating, Non-Participating and Linked segments.

''Participating'' segment is further classified in to the following Lines of Businesses (LoBs): Individual - Life - Participating, Individual -Pension - Participating, Group - Pension -Participating and Individual - VIP - Participating.

''Non-Participating'' segment is further classified in to the following LoBs: Individual

- Life - Non-Participating, Individual

- Pension - Non-Participating, Group Savings - Non-Participating, Group One Year Renewable Group Term Assurance (OYRGTA) - Non-Participating, Group Other - Non-Participating, Annuity -Non-Participating (Individual and Group), Health

- Non-Participating (Individual and Group), and VIP - Non-Participating (Individual and Group).

''Linked'' segment is further classified in to the following LoBs: Individual - Life - Linked, Group

- Linked and Individual - Pension - Linked.

b. For policies which are likely to get cancelled during their “free look period", premium less stamp duty and medical expenses as per the policy contract need to be refunded. Adequate provision is provided for such policies.

c. The following parametric values are used to carry out the actuarial valuation:

For mortality assumption under life business ''Indian Assured Lives (2012-2014) Ultimate Mortality table'' and under general annuity business ''Indian Individual Annuitant''s Mortality Table (2012-15)'' has been used. For Morbidity assumption, the Morbidity Tables provided by re-insurers has been used with suitable adjustment.

Withdrawal assumptions range from 0% to 22.50% for valuation as at March 31, 2024 as compared to 0% to 21.75% for valuation as March 31, 2023.

The interest rate for valuation lies in the range of 5.50% to 6.20% per annum as shown in the table below. While allocating expenses for the current year, the entire policyholders'' expenses have been allocated product-wise.

An inflation rate of 5.50% per annum (previous year ended March 31, 2023: 5.50% per annum) has been assumed while estimating future expenses.

For participating products, the vested bonuses are those which were distributed by the Company consequent to the actuarial valuations carried out annually at the end of each financial year dated March 31, 2002 to March 31, 2024. Regarding bonus provisions for the current financial year and bonus provision for future years, the bonus rates have been assessed by carrying out Bonus Earning Capacity (BEC) / asset share investigations and taking into consideration the policyholder''s reasonable expectations.

Prevailing tax rate as applicable has been duly allowed for in valuation of policy liabilities.

For participating pension products, special one-time bonus declared during financial year 2003-04 and 2004-05 have been taken into account. Appropriate future bonus assumptions have been made.

Margin for Adverse Deviation (MAD) has been provided, wherever applicable and required.

In addition to this, Incurred but Not Reported (IBNR) claims reserve is also provided wherever required.

The above parameters and the MAD provision have been observed to ensure prudence and are in accordance with the GN / APS issued by the Institute of Actuaries of India and in concurrence with the Regulations and circulars of IRDAI.

The Surplus emerged from Non-participating segment has been transferred to Profit & Loss Account for the year ended March 31, 2024 based on the recommendation of the Appointed Actuary and the necessary fund transfer will be made after the year end on the basis of Audited financials with required recommendations by the Appointed Actuary.

Appointed Actuary is satisfied that the nature and extent of reinsurance arrangements require no additional reserve to be set aside apart from reinsurance reserves set aside based on Unearned Premium Reserve (UPR) methodology.

Considering the prudence of the valuation basis and the margins in the assumptions, our assessment is that, the reserve set aside is sufficient to meet all future policy outgoes under adverse conditions.

Funds for Future Appropriation

As at March 31, 2024, the Funds for Future Appropriation (FFA) in non-linked participating segments is '' 13,365,628 thousands (previous year ended March 31, 2023''11,427,394 thousands).

There is no FFA under any other segment.

6. Cost of guarantee

Provision of '' 3,249,275 thousands (previous year ended March 31, 2023''2,048,495 thousands) has also been made for the cost of guarantee under Individual unit linked policies with guarantee.

10. Investments

i. Investments have been made in accordance with the Insurance Act, 1938, and Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016, as amended from time to time.

ii. All investments of the Company are performing investments except as disclosed in Note no. 21(B) of Schedule 16 (C).

iv. Equity shares lent under the Securities Lending and Borrowing scheme (SLB) continue to be recognised in the Balance Sheet as the Company retains all the associated risk and rewards of these securities. The Fair value of equity shares lent by the Company under SLB and outstanding as at March 31, 2024 is '' Nil (March 31, 2023: '' Nil).

12. Managerial remuneration

Insurance Regulatory and Development Authority (''IRDAI'' or ''the Authority'') has issued IRDAI (Remuneration of Key Managerial Persons of Insurers) Guidelines, 2023 which replace and supersede the erstwhile guidelines issued on 5" August, 2016. These guidelines shall be applicable for remuneration payable to Key Managerial Persons (KMPs) of private sector insurers, from Financial Year 2023-24.

The Managing Director and CEO have been deputed from State Bank of India and his remuneration is included under “Employees remuneration and welfare benefits" under “Operating expenses related to insurance business."

Qualitative Disclosures

The Board Nomination and Remuneration Committee (NRC) oversees and governs the compensation practices of the Company. The Company''s Remuneration Policy is guided by a reward framework and set of principles and objectives as more fully and particularly envisaged under section 178 of Companies Act 2013, IRDAI Guidelines on Remuneration of Directors and Key Managerial Persons of Insurers dated June 30, 2023 and SEBI Listing Regulations.

We follow contribution-oriented philosophy and our compensation is performance-driven, emphasizing and recognizing the contributions that individual employees make to the organization. It accentuates performance-based pay, incentives, and shared responsibility for benefits. The remuneration structure comprises of Fixed Pay (including monetary and non-monetary perquisites) and Variable Pay. The key objectives of the remuneration policy are:

• To define and implement overall remuneration philosophy and framework for payment of remuneration payable to Directors (Executive

and Non-Executive), Key Managerial Persons and other employees of the Company.

• To ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets performance benchmarks.

• To provide to Key Management Persons, Senior Management and other employees rewards linked directly to their effort, performance, dedication and achievement relating to the Company''s operations and shall not encourage Key Managerial Persons to take inappropriate or excessive risks for their performance based variable remuneration.

• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

• To ensure alignment of compensation with prudent risk taking.

The policy is reviewed by NRC at least annually or as and when required.

The remuneration policy promotes sound and prudent risk management. Remuneration structure is well aligned with the long-term growth, health and objectives of the company. Compensation outcomes are symmetric with risk outcomes and pay-outs thereof are sensitive to the time horizon of the

risk and the mix of cash, equity and other forms of remuneration are consistent with risk alignment.

The remuneration policy ensures that there is a proper balance between fixed pay and variable pay. Variable Pay is in the form of “pay at risk" and depending on performance and risk outcomes at individual and company-wide level, the quantum of Variable Pay changes.

Also, for Key Managerial Persons, at least 50% of the total variable pay is under deferral arrangement and the deferral is spread over at least three years. The deferred variable pay is also subject to Malus and Claw-Back clauses as detailed in the Remuneration Policy of the Company.

The Company has an annual increment and variable pay policy which is based on merit pay philosophy. The performance linked incentive is based on both individual as well as Company''s performance.

Various performance parameters for the Company are reviewed by NRC and approved by the Board every year. Based on the predefined parameters the actual performance of the Company is reviewed by NRC to award a performance rating. The Company performance rating is approved by the Board based on the recommendations of NRC after the end of every financial year.

The framework of annual increment and performance linked Variable Pay for all employees is also reviewed by the NRC and approved by the Board every year.

IRDAI (Obligations of insurers to rural and social sectors) Regulations, 2015 mandates the Company to cover 5% of the total business procured in the preceding financial year (in terms of lives) under the social sector and 20% of the policies written in the respective year under rural sector.

14. Investments of funds and assets pertaining to policyholders'' liabilities a. Allocation of investments between policyholders'' funds and shareholders'' funds

Investments made out of the shareholders'' and policyholders'' funds are tracked from inception and income accordingly accounted for on the basis of records maintained. As and when necessary, transfers have been made from shareholders'' investments to policyholders'' investments. In respect of such transfers, the investment income is allocated from the date of transfer.

Income tax provisions involves significant judgments in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. The Management periodically reassess and evaluates tax position with respect to applicable tax law based on the existing facts and circumstances.

16. Operating lease arrangements

(a) Assets taken on operating lease:

In accordance with Accounting Standard 19 on ''Leases'', the details of leasing arrangements entered into by the Company are as under:

The Company has entered into agreements in the nature of lease or leave and licence with different lessors or licensors for residential premises, office premises and motor vehicles. These are in the nature of operating lease. Some of these lease arrangements contain provisions for renewal and escalation. There are no restrictions imposed by lease arrangements nor are there any options given to the Company to purchase the properties and the rent is not determined based on any contingency.

17. Earnings per share

In accordance with Accounting Standard 20 on ''Earning per share'', basic earnings per share are calculated by dividing the net profit or loss in the shareholders'' account by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations.

19. Provision for staff benefit as per Accounting Standard 15 (Revised) a. Defined Benefit Plans:

(i) Gratuity

Gratuity is funded defined benefit plan for qualifying employees under which the Company makes a contribution to the SBI Life Insurance Company Limited Employees Gratuity Fund. The plan provides for a lump sum payment as determined in the manner specified under The Payment of Gratuity Act, 1972, to the vested employees either at retirement or on death while in employment or on termination of employment. The benefit vests after five years of continuous service. Defined benefit obligations are actuarially determined at each Balance Sheet date using the projected unit credit method (PUCM) as per Accounting Standard (AS) 15 (Revised), “Employee benefits". Actuarial gains and losses are recognised in the Revenue Account.

(ii) Provident Fund

The rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared for Employees'' Provident Fund by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Based on an actuarial valuation conducted by an independent actuary, the details of provident fund are as below.

(iii) Employee COVID Ex-gratia

The Company accrues liability for Employees COVID Ex-gratia Scheme in accordance with Accounting Standard - 15 (Revised). The Net Present Value (NPV) of the Company''s obligation is actuarially determined based on the Projected Unit Credit Method (PUCM) as at the Balance Sheet date. The COVID Ex-gratia Scheme has ended on March 31, 2022. The details of Employee COVID Ex-gratia Scheme are as below:

(iv) Other long term benefits

The Company accrues the liability for compensated absences and long term service awards in accordance with Accounting Standard - 15 (Revised). The net present value of the Company''s obligation is determined based on the projected unit credit method as at the Balance Sheet date.

(i) Employee Stock Option Scheme ("ESOS")

The SBI Life Employee Stock Option Plan 2018 (''ESOP 2018'') and SBI Life Employees Stock Option Scheme 2018 (''the Scheme'' or ''ESOS 2018'') has been approved by the shareholders of the Company in the Annual General Meeting (AGM) held on September 27, 2018 based on the recommendation of the Board Nomination & Remuneration Committee (''NRC'') and Board of Directors (''Board'') in their meetings held on August 31, 2018.

The maximum number of stock options granted to eligible employees in accordance with ESOP 2018 shall not exceed 30,000,000 shares. During any one year, no employee shall be granted Options equal to or exceeding 1% of the issued share capital of the Company at the time of Grant of Options unless an approval from the Shareholders is taken by way of special resolution in a General Meeting. Further, the maximum number of Options in aggregate granted to an employee under this Plan shall not exceed 1,00,00,000 Options. The Exercise Price shall be determined by the Board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the Options are granted and provided in the letter of grant.

The Scheme is directly administered by the Company and provides that eligible employees are granted options to subscribe to equity shares of the Company which vest in a graded manner. The vested options may be exercised within a specified period.

During the year ended March 31, 2024 the NRC in its meeting held on July 25, 2023 has approved the grant of the Employee Stock Options (''Options'') under the provisions of ESOS 2018.

The Company follows intrinsic value method to account for its share-based employee compensation plans. During the year ended March 31, 2024, the Company has granted 725,900 options to its eligible employees under ESOS 2018. Out of the total 3,249,424 options outstanding as at previous year ended March 31, 2023, 763,640 options are vested during the year ended March 31, 2024.

Note: The figures in bracket, if any, indicates reversal of impairment loss earlier recognised in Revenue or Profit and Loss Account.

21. Provision for Standard assets and Non Standard assets for debt portfolio

In accordance with the ''Guidelines on Prudential norms for income recognition, Asset classification, Provisioning and other related matters in respect of Debt portfolio'' as specified by IRDAI vide the Master Circular dated December 11, 2013, provision for standard assets and non-standard assets has been recognized as follows: -

22. Investment Properties - Real Estate Investment Trusts (REITs)

The investment in Real Estate Investment Trusts (REIT''s) of '' 6,472,644 thousands as at year ended March 31, 2024 (Previous year ended March 31, 2023''3,464,257 thousands) has been disclosed as part of the Investment Property in accordance with the IRDAI circular no. IRDAI/CIR/F&I/INV/056/03/2016-17 dated March 14, 2017 and IRDAI (Investment) Regulations, 2016.

23. Derivatives

The Company offers guaranteed products wherein the Policyholders are assured of a fixed rate of return for premiums to be received in future. These premiums are likely to be received over a longer tenure and the guaranteed rate of return is fixed at the beginning of the policy term. Any fall in interest rates would mean that each incremental investment of the Company would earn a lower rate of return. Accordingly, the Company manages the Interest Rate Risk in accordance with the IRDAI circular no. IRDA/F&I/ INV/CIR/138/06/2014 dated June 11, 2014 (''the IRDAI

circular on Interest Rate Derivatives'') and IRDAI Investment Master Circular issued in May 2017 which allows insurers to deal in rupee interest rate derivatives such as Forward Rate Agreements (“FRAs"), Interest Rate Swaps (“IRS") and Exchange Traded Interest Rate Futures (“IRF").

The Company has in place a derivative policy approved by Board which covers various aspects that apply to the functioning of the derivative transactions undertaken to substantiate the hedge strategy to mitigate the interest rate risk, thereby managing the volatility of returns from future fixed income investments, due to variations in market interest rates.

During the year the Company has entered into Forward Rate Agreements (FRA) transactions, as part of its Hedging strategy, to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI circular on Interest Rate Derivatives.

Forward Rate Agreement derivative contracts are over-the-counter (OTC) transactions wherein, the Company lock-in the yield on the government bond for the period till the maturity of the contract with an objective to lock in the price of an interest bearing security at a future date.

Derivatives (FRA) are undertaken by Company solely for the purpose of hedging interest rate risks on account of following forecasted transactions: a) Reinvestment of maturity proceeds of existing fixed income investments; b) Investment of interest income receivable; and c) Expected policy premium income receivable on insurance contracts which are already underwritten in Life, Pension & Annuity business.

A net amount of '' (1,581,125) thousands for the year ended March 31, 2024 (Previous year ended March 31, 2023 '' (1,372,895) thousands) has recognized in Revenue Account being portion of loss determined to be ineffective.

The amount that was removed from Hedge Reserve account during the year ended March 31, 2024 in respect of forecast transaction for which hedge accounting had previously been used, but is no longer expected to occur is '' Nil (Previous year '' Nil). The cash flows from the hedges are expected to occur over the outstanding tenure of underlying policy liabilities and will accordingly flow to the Revenue Account.

B. Qualitative Disclosures on risk exposure in Fixed Income Derivatives:

Overview of business and processes:

a) Fixed Income Derivative Hedging instruments:

Derivatives are financial instruments whose characteristics are derived from the underlying assets, or from interest and exchange rates or indices. These include forward rate agreements, interest rate swaps and interest rate futures.

The Company during the financial year has entered into FRA derivative instrument to minimise exposure to fluctuations in interest rates on plan assets and liabilities. This hedge is carried in accordance with its established policies, strategy, objective and applicable regulations. The Company does not engage in derivative transactions for speculative purposes.

b) Derivative policy/process and Hedge effectiveness assessment:

The Company has well defined Board approved Derivative Policy and Process document setting out the strategic objectives, regulatory and operational framework and risks associated with interest rate derivatives along with having measurement, monitoring processes and controls thereof. The accounting policy has been clearly laid out for ensuring a process of periodic effectiveness assessment and accounting.

The Company has clearly identified roles and responsibilities to ensure independence and accountability through the investment decision, trade execution, to settlement, accounting and periodic reporting and audit of the Interest Rate Derivative exposures. The risk management framework for the Interest Rate Derivatives are monitored by the Risk Management Committee.

c) Scope and nature of risk identification, risk measurement, and risk monitoring:

The Derivative and related Policies as approved by the Board sets appropriate market limits such as sensitivity limits and value-at-risk limits for exposures in interest rate derivatives. All financial risks of the derivative portfolio are measured and monitored on periodic basis.

C. Quantitative disclosure on risk exposure in Forward Rate Agreement

A hedge is deemed effective, if it has a high statistical correlation between the change in value of the hedged item and the hedging instrument (FRA). Gains or losses arising from hedge ineffectiveness, if any, are recognised in the Revenue Account.

The tenure of the hedging instrument may be less than or equal to the tenure of underlying hedged asset/liability.

The credit exposure limit for FRA derivatives has been calculated on the basis of Credit Equivalent Amount using the Current Exposure Method (CEM) as detailed below:

The Credit Equivalent Amount of a market related off-balance sheet transaction calculated using the CEM is the sum of

a) the current credit exposure (gross positive mark to market value of the contract); and

b) potential future credit exposure which is a product of the notional principal amount across the outstanding contract and a factor that is based on the mandated credit conversion factors as prescribed under the IRDAI circular on Interest Rate Derivatives, which is applied on the residual maturity of the contract.

24. Micro, Small and Medium Enterprises Development Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006 and amendments made thereafter, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises.

According to information available with the management, on the basis of intimation received from suppliers, regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and amendments made thereafter, the Company has amounts due to Micro and Small Enterprises under the said Act as follows:

25. Additional disclosure requirements as per Corporate Governance Guidelines

i. Quantitative and qualitative information on the insurer''s financial and operating ratios, namely, incurred claim, commission and expenses ratios:

Refer summary of financial statement and ratios.

ii. Actual solvency margin details vis-a-vis the required solvency margin

The actual solvency margin of the Company as on March 31, 2024 stands at 1.96 times (previous year ended March 31, 2023: 2.15 times) as against regulatory requirement of 1.50. There has been no capital infusion after FY 2007-08.

iii. Persistency ratio

The persistency ratio (13^th month) for regular premium and limited premium paying term policies of Individual segment for the year ended March 31, 2024 is 86.78% (previous year ended March 31, 2023 is 85.52%) based on premium amount and 81.11% (previous year ended March 31, 2023 is 79.52%) based on number of policies.

The persistency ratios are calculated as per IRDA/ACT/CIR/GEN/21/02/2010 circular dated February 11, 2010 and IRDAI circular no. IRDAI/F&A/CIR/MISC/256/09/2021 dated September 30, 2021.

Persistency ratios for the year ended March 31, 2024 and March 31, 2023 are calculated using policies issued in March 01 to February 28 period of the relevant years.

iv. Financial performance including growth rate and current financial position of the insurer

Refer summary of financial statement and ratios.

v. A description of the risk management architecture

The Board has the ultimate responsibility for overseeing the management of risk within the Company. The Risk profile of the Company is reported to the Board by the Risk Management Committee of the Board (RMC-B) from time to time. The RMC-B is responsible for overseeing the Company''s risk management program and for ensuring that significant risks to the Company are reported to the Board on a timely basis and apprise the Board of the various risk management strategies being adopted. The Company''s Risk Appetite statement and the Annual Risk assessment are reviewed by the Board so as to ensure that the business of the Company is carried out within the set risk limits.

The RMC-B is supported by Risk Management Committee of the Executives (RMC-E) and the Asset Liability Committee (ALCO). The RMC-E oversees the enterprise wide risk management activities and the ALCO monitors insurance and investment risk portfolio.

The Company has an Information Security Risk Management Committee (ISRMC) which oversees all information and cyber security risks and its control. The Company has constituted a Data Governance Committee (DGC) to oversee formulation and implementation of data governance framework / policies / procedures in SBI Life.

The Company also has a Risk Event Monitoring Committee (REMC) which primarily oversees reputational risks and other significant external risk events. Minutes of the ISRMC, DGC and REMC meetings are put up to RMC-E for information.

Refer Enterprise Risk Management section for detailed information.

x. Deposits made under Local laws

The Company has no deposit as at March 31, 2024 (previous year ended March 31, 2023: Nil) made under local laws or otherwise encumbered in or outside India, except investments and deposits detailed in Note 3(b) of Schedule 16(C).

26. Age-wise analysis for policyholders'' - unclaimed amount

In accordance with IRDAI Master Circular on Unclaimed amounts of policyholders dated November 17, 2020, the Company maintains a single segregated fund to manage all unclaimed amounts. The amount is invested in money market instruments, liquid mutual funds and fixed deposits of scheduled banks.

The amount in the unclaimed fund has been disclosed in schedule 12 as “Assets held for unclaimed amount of policyholders" alongwith “Income accrued on unclaimed fund". Investment income accruing to the fund is disclosed in the revenue account. Such investment income net of fund management charges is disclosed in schedule 4 “Benefits paid as “interest on unclaimed amounts".

28. Contribution made by the shareholders'' to the policyholders'' account

The contribution of '' 16,275,815 thousands (previous year ended March 31, 2023: '' 17,074,883 thousands) made by the shareholders'' to the policyholders'' account is irreversible in nature, and shall not be recouped to the shareholder''s account at any point of time.

33. Participation in Joint Lenders Forum formed under Reserve Bank of India (RBI) Guidelines

The Company has not participated in any Joint Lenders Forum formed under RBI guidelines for loan accounts which could turn into potential NPAs.

35. Long term contracts

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provisions as required under any law/ accounting standard for material foreseeable losses on such long term contracts including derivative contracts has been made in the financial statements.

For insurance contracts, actuarial valuation of liabilities for all the policies which were in the books of the Company and where there is a liability as at March 31, 2024 is done by the Appointed Actuary of the company. The assumptions used in valuation of liabilities are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with IRDAI.

36. Interim Dividend

The Board of Directors at its meeting held on March 10, 2024 has declared an Interim Dividend of '' 2.7 per share amounting to '' 2,703,717 thousands for the year ended March 31, 2024 (previous year ended March 31, 2023: '' 2.5 per share amounting to '' 2,502,197 thousands). Accordingly, the Company has made dividend payment of '' 2,703,715 thousands during the year ended March 31, 2024 (previous year ended March 31, 2023: '' 2,501,907 thousands).

38. Linked Business

Financial statements, for each segregated fund of the linked businesses, is presented in ULIP Disclosures as require by the Master Circular. Segregated funds represent funds maintained in accounts to meet specific investment objectives of policyholders who bear the investment risk. Investment income/ gains and losses generally accrue directly to the policyholders. The assets of each account are segregated and are not subject to claims that arise out of any other business of the insurer.

39. COVID-19 impact

In March 2020, COVID-19 outbreak started and spread across the globe. This outbreak was declared as global pandemic by World Health Organization (WHO) on March 11, 2020. The Company have been regularly monitoring the experience and would continue to do so. An additional Pandemic Risk Reserve (inclusive of COVID-19) of '' 2,893,383 thousands has been held as at March 31, 2024 (Previous year ended March 31, 2023''2,893,383 thousands).

40. Ind AS update

International Accounting Standard Board (''IASB'') has notified the amended IFRS 17, with global date of implementation starting from January 01, 2023. The Institute of Chartered Accountants of India (''ICAI'') has issued exposure draft of amendments in Ind AS 117 on February 08, 2022. The amended Ind AS 117 is under process of notification. The IRDAI (the Authority) vide its communication dated July 14, 2022 on Ind AS implementation in Insurance Sector has conveyed its broad approach on Ind AS implementation and necessary steps to be initiated by the insurers. The authority advised insurers to set up steering committee for Ind AS implementation. Further, the authority is having interactions with the insurance companies to discuss the matters relating to implementation of Ind AS.

As per the directions of Authority, the Company has constituted Steering Committee headed by President & CFO and members from cross-functional areas such as actuarial, investment, information technology. The Company has engaged knowledge partner for Ind AS implementation. The Ind AS Gap and impact assessment is completed. The process of designing accounting policies and solutions to achieve data, system and process requirements is in progress. The Audit Committee and Board of Directors have been updated regularly on status update of Ind AS implementation.

41. Remuneration to Non-Executive Directors

No remuneration or commission is paid to Non-Executive Directors, other than the Sitting Fees for attending Board and/or its Committee meetings. The amount of sitting fees paid to the Non-Executive Directors is disclosed in Profit and Loss (Shareholders) Account.

42. Status update on Sahara Life Insurance Company Limited

Insurance Regulatory and Development Authority of India (''IRDAI'') vide its order dated June 2, 2023 (''IRDAI order'') passed in terms of section 52B (2) of the Insurance Act, 1938 has directed to transfer the life insurance business of Sahara India Life Insurance Company Limited (''SILIC'') involving policy liabilities and policyholders'' investment/ assets to SBI Life Insurance Company Limited (''SBI Life'' or ''the Company'').

On appeal filed by SILIC against the said IRDAI order, the Securities Appellate Tribunal (''SAT'' or ''Tribunal'') vide its order dated June 13, 2023 has granted stay on the effect and operation of the said IRDAI order. Subsequently, the IRDAI has filed an appeal with Hon''ble Supreme Court against the stay order passed by SAT. The Hon''ble Supreme Court in its hearing held on July 17, 2023 has set aside Securities Appellate Tribunal''s (SAT) stay and directed the SAT to hear the case and decide it afresh. Subsequently, SAT has initiated the hearing of the case which is yet to be adjudicated upon. The case is listed for hearing on June 13, 2024.

In order to protect the interest of the SILIC policyholders and in accordance with the IRDAI order, the Company has extended the policy servicing facilities to SILIC customers through various branches of the Company by way of premium collection, claim pay-outs, addressing the SILIC policyholders'' queries etc. The Company has received the premium of '' 90,797 thousand (excluding GST) and processed the claim pay-outs of '' 3,73,054 thousand. The Company has discharged GST liability of '' 2,272 thousand on premium and TDS payment of '' 6,392 thousand on claim pay-out. The Company has received investment assets with book value '' 12,731,174 thousand (Market Value of '' 13,157,599 thousand) and bank balance of '' 201,270 thousand pertaining to policyholder funds as on June 2, 2023. The Company is managing these investment assets separately as per IRDAI (Investment) Regulation 2016. As on March 31, 2024, the Company has total SILIC investment assets with book value of '' 13,342,938 thousand (Market value of '' 14,147,399 thousand) and Bank balance of '' 16,457 thousand. The Company maintains separate records of all the transactions pertaining to SILIC. The impact of these transactions pertaining to SILIC will be given in the financial statements of the Company on receipt of all the relevant information and documents as specified in the said IRDAI order and in accordance with the further directions of the Authority.

o Integrated Report o Statutory Reports

o

Financial Statements

^ Additional Information

Non Linked business

Life or Health Insurance contracts other than unit linked business. Also called as Conventional / Traditional business.

Non Participating business

Policies without participation in profits, means policies which are not entitled to any share in surplus (profits) during the term of the policy. Examples include pure risk policies such as fixed annuities, term insurance, critical illness etc.

Operating Expense Ratio

Operating expenses (excluding commission) divided by Gross Written Premium.

Paid Up Value

It is one of the non-forfeiture options given to the policyholder in case of premium default. In this option, the sum assured is proportionately reduced to an amount which bears the same ratio to the full sum assured as the number of premiums actually paid bears to the total number originally payable in the policy.

Participating business

A life insurance policy where the policyholder is entitled to at least a ninety percent share of the surplus emerging in the participating fund and the remaining belongs to the shareholders.

Pension Business

Pension plans are offered by life insurance companies to help individuals build a retirement corpus. On maturity, this corpus is invested for generating a regular income stream, which is referred to as pension or annuity.

Persistency ratio

The ratio of life insurance policies remaining in force to all policies issued in a fixed period. Persistency can be measured in terms of number of policies or in terms of premium.

Policy Lapse

A life insurance contract lapses if the policyholder does not pay premium within the grace period as prescribed under the applicable regulations.

Policy Liabilities

The policy liabilities under an insurance contract are the benefits an insurance company has contractually agreed to pay to the policyholders, plus its future expenses less future premiums.

POSP

POSP-Point of Sales Person - Life Insurance means an individual who possesses the minimum qualifications, has undergone training and passed the examination as specified in the IRDAI Master Circular on Point of Sales Products and Persons - Life Insurance and solicits and markets only such products as specified by the Authority.

Premium

The consideration the policyholder will have to pay in order to secure the benefits offered by the insurance policy

Private life insurers

All Indian life insurance companies other than the Life Insurance Corporation of India.

Protection Gap

Ratio of sum assured to GDP

Reinsurance

Reinsurance contract is an insurance contract between one insurance company (cedant) and another insurance company (reinsurer) to indemnify against losses on one or more contracts issued by the cedant in exchange for a consideration (the premium). The consideration paid/ received is termed as reinsurance ceded/accepted. The intent of reinsurance is for an insurance company to reduce the risks associated with underwritten policies by spreading risks across alternative institutions.

Reinsurance claims

Claim amount received or receivable by the insurance company from a reinsurance company on occurrence of a reinsured event.

Reinsurance premium ceded

Premium paid or payable by the insurance company to a reinsurance company in lieu of reinsurance protection.

Renewal premium

Life insurance premiums falling due in the years subsequent to the first year of the policy.

Return on Equity

The ratio of profit after tax to average net worth for the period.

Reversionary bonus

Reversionary bonus is expressed as a percentage of basic sum assured. Simple reversionary bonuses once vested become guaranteed.

Rider

The add-on benefits which are in addition to the benefits under a basic policy.

Risk reinsured

The proportion of risk underwritten by an insurance company which it transfers to a reinsurance company for which a stated risk premium would be paid.

Risk retained

The proportion of risk underwritten by an insurance company that is retained by an insurance company in its own books after ceding a portion of risk to the reinsurance company.

Rural sector

Any place as per the latest census which meets the following criteria:

a) a population of less than five thousand;

457 C

---

Mar 31, 2023

1. Contingent Liabilities			(Rs. in ''000)
Sr. No	Particulars	As at March 31, 2023	As at March 31, 2022
1	Partly paid - up investments	5,750,000	6,200,000
2	Claims, other than against policies, not acknowledged as debts by the Company (Refer Note 3)	11,636	9,956
3	Underwriting commitments outstanding (in respect of shares and securities)	---	---
4	Guarantees given by or on behalf of the Company	---	---
5	Statutory demands or liabilities in dispute, not provided (Refer Note 1)	---	---
6	Reinsurance obligations to the extent not provided for in accounts	---	---
7	Others: - Insurance claims disputed by the Company, to the extent not provided or reserved (Refer Note 3) - Directions issued by IRDAI under section 34(1) of Insurance Act, 1938 (Refer Note 2)	2,259,814 2,752,948	2,142,212 2,752,948
Total		10,774,398	11,105,116

Notes:Note 1:

Show-cause notices issued by various Government Authorities are not considered as an obligation. When any order or notice is raised by the authorities for which the Company is in appeal under adjudication, these are disclosed as contingent liability except in cases where the probability of any financial outflow is remote.

Note 2:

The IRDAI directions issued under section 34 (1) of the Insurance Act, 1938 to refund allegedly excess commission paid to corporate agents to the members or the beneficiaries amounting to '' 2,752,948 thousands (previous year ended March 31, 2022: '' 2,752,948 thousands) vide order no. IRDA/Life/ORD/Misc/083/03/2014 dated March 11, 2014 has been set aside by order dated January 29, 2020 made by the Securities Appellate Tribunal (SAT). The SAT has remitted the matter to IRDAI to recalculate the interest earned on advance premium collected. The IRDAI recalculation, if any, has not been received by the Company. The IRDAI and SBI Life both, have challenged SAT order dated January 29, 2020 before the Hon''ble Supreme Court of India in Civil Appeal Nos. 254-255 of 2021 and Civil Appeal No. 2497-2498 of 2021 respectively, which is yet to be adjudicated upon.

Note 3:

These cases pertain to litigation arising in the ordinary course of business and pending at various appellate forums/courts. The Company has made a provision of '' 347,199 thousand at March 31, 2023 (Previous year ended March 31, 2022 '' Nil) where the management assessment of a financial outflow is probable.

Note 4:

IRDAI has issued directions under section 34(1) of the Insurance Act, 1938 to distribute the administrative charges paid to master policyholders amounting to '' 843,174 thousands vide its order no. IRDA/Life/ORD/MISC/228/10/2012 dated October 5, 2012 and subsequent order no. IRDA/Life/ORD/MISC/009/01/2017 dated January 11, 2017. The Securities Appellate Tribunal (SAT) vide its order dated April 7, 2021 has dismissed the appeal filed by the Company against the IRDAI order. Subsequently, the Hon''ble Supreme Court vide its order dated September 22, 2021 has dismissed petition filed by the Company against the SAT order. Accordingly, in FY 2022, the Company has made provision in the Profit and Loss Account (Shareholders'' Account) for refund of administrative charges paid to group master policy holders amounting to '' 843,174 thousands plus applicable interest as per IRDAI order dated January 11, 2017. As at March 31, 2023, out of the total provision amount, the Company has refunded administrative fees of '' 524,227 thousands along with interest of '' 205,792 thousands to the members of group insurance policy.

2. Pending litigation

The Company''s pending litigations comprise of claims against the Company primarily by customers and proceedings pending with tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liability (refer note 1 of Schedule 16 (C)) where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial results as at March 31, 2023.

5. Actuarial assumptions

The assumptions used in valuation of liabilities are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with IRDAI.

The actuarial assumptions certified by the Appointed Actuary are as under:

a. In the actuarial valuation all the policies, which were in the books of the Company and where there is a liability as at March 31, 2023 have been taken into account.

The portfolio consists of Participating, Non-Participating and Linked segments.

''Participating'' segment is further classified in to the following Lines of Businesses (LoBs): Individual - Life - Participating, Individual - Pension - Participating, Group - Pension - Participating and Individual - VIP - Participating. ''Non-Participating'' segment is further classified in to the following LoBs: Individual - Life - Non-Participating, Individual - Pension - Non-Participating, Group Savings - Non-Participating, Group One Year Renewable Group Term Assurance (OYRGTA) - Non-Participating, Group Other - Non-Participating, Annuity - Non-Participating (Individual and Group), Health - Non-Participating (Individual and Group), and VIP - Non-Participating (Individual and Group).

''Linked'' segment is further classified in to the following LoBs: Individual - Life - Linked, Group - Linked and Individual -Pension - Linked.

b. For policies which are likely to get cancelled during their "free look period”, premium less stamp duty and medical expenses as per the policy contract need to be refunded. Adequate provision is provided for such policies.

c. The following parametric values are used to carry out the actuarial valuation:

For mortality assumption under life business ''Indian Assured Lives (2012-2014) Ultimate Mortality table'' and under general annuity business ''Indian Individual Annuitant''s Mortality Table (2012-15)'' has been used. For Morbidity assumption, the Morbidity Tables provided by re-insurers has been used with suitable adjustment.

Withdrawal assumptions range from 0% to 21.75% for valuation as at March 31, 2023 as compared to 0% to 15% for valuation as March 31, 2022.

The interest rate for valuation lies in the range of 5.50% to 6.10% per annum as shown in the table below. While allocating expenses for the current year, the entire policyholders'' expenses have been allocated product-wise.

An inflation rate of 5.50% per annum (previous year ended March 31, 2022: 5.50% per annum) has been assumed while estimating future expenses.

For participating products, the vested bonuses are those which were distributed by the Company consequent to the actuarial valuations carried out annually at the end of each financial year dated March 31, 2002 to March 31, 2023. Regarding bonus provisions for the current financial year and bonus provision for future years, the bonus rates have been assessed by carrying out Bonus Earning Capacity (BEC)/asset share investigations and taking into consideration the policyholder''s reasonable expectations.

Prevailing tax rate as applicable has been duly allowed for in valuation of policy liabilities.

For participating pension products, special one-time bonus declared during financial year 2003-04 and 2004-05 have been taken into account. Appropriate future bonus assumptions have been made.

Margin for Adverse Deviation (MAD) has been provided, wherever applicable and required.

In addition to this, Incurred but Not Reported (IBNR) claims reserve is also provided wherever required.

The above parameters and the MAD provision have been observed to ensure prudence and are in accordance with the GN/APS issued by the Institute of Actuaries of India and in concurrence with the Regulations and circulars of IRDAI.

The Surplus emerged from Non-participating segment has been transferred to Profit & Loss Account for the year ended March 31, 2023 based on the recommendation of the Appointed Actuary and the necessary fund transfer will be made after the year end on the basis of Audited financials with required recommendations by the Appointed Actuary.

Appointed Actuary is satisfied that the nature and extent of re-insurance arrangements require no additional reserve to be set aside apart from reinsurance reserves set aside based on Unearned Premium Reserve (UPR) methodology.

Considering the prudence of the valuation basis and the margins in the assumptions, our assessment is that, the reserve set aside is sufficient to meet all future policy outgoes under adverse conditions.

Funds for Future Appropriation

As at March 31, 2023, the Funds for Future Appropriation (FFA) in non-linked participating segments is '' 11,427,394 thousands (previous year ended March 31, 2022''9,936,423 thousands).

There is no FFA under any other segment.

6. Cost of guarantee

Provision of '' 2,048,495 thousands (previous year ended March 31, 2022''1,281,766 thousands) has also been made for the cost of guarantee under Individual unit linked policies with guarantee.

7. Policy liabilities

The non-linked policy liability after reinsurance of '' 1,301,319,007 thousands as on March 31, 2023 (previous year ended March 31, 2022: '' 1,097,590,397 thousands) includes the following non-unit reserve held for linked liabilities:

1. The appointment and remuneration of managerial personnel is in accordance with the requirements of section 34A of the Insurance Act, 1938 and has been approved by the IRDAI.

2. Effective May 9, 2020 Mr. Mahesh Kumar Sharma was deputed from State Bank of India as the Managing Director and CEO of the Company. IRDAI has accorded its approval to this appointment.

3. No ESOPs are granted to Managing Director and CEO as per ESOP Scheme 2018.

IRDAI (Obligations of insurers to rural and social sectors) Regulations, 2015 mandates the Company to cover 5% of the total business procured in the preceding financial year (in terms of lives) under the social sector and 20% of the policies written in the respective year under rural sector.

14. Investments of funds and assets pertaining to policyholders'' liabilities

a. Allocation of investments between policyholders'' funds and shareholders'' funds

Investments made out of the shareholders'' and policyholders'' funds are tracked from inception and income accordingly accounted for on the basis of records maintained. As and when necessary, transfers have been made from shareholders'' investments to policyholders'' investments. In respect of such transfers, the investment income is allocated from the date of transfer.

Income tax provisions involves significant judgements in determining the provision for income taxes including judgement on whether tax positions are probable of being sustained in tax assessments. The Management periodically reassess and evaluates tax position with respect to applicable tax law based on the existing facts and circumstances.

16. Operating lease arrangements(a) Assets taken on operating lease:

In accordance with Accounting Standard 19 on ''Leases'', the details of leasing arrangements entered into by the Company are as under:

The Company has entered into agreements in the nature of lease or leave and licence with different lessors or licensors for residential premises, office premises and motor vehicles. These are in the nature of operating lease. Some of these lease arrangements contain provisions for renewal and escalation. There are no restrictions imposed by lease arrangements nor are there any options given to the Company to purchase the properties and the rent is not determined based on any contingency.

(b) Assets given on operating lease:

The company had leased out some portion of its office premises on leave and license basis. During FY 22, the lease agreement has been terminated due to vacation of office premise given on lease. Currently the company is occupying entire office premises for its business purpose.

17. Earnings per share

In accordance with Accounting Standard 20 on ''Earning per share'', basic earnings per share are calculated by dividing the net profit or loss in the shareholders'' account by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity

19. Provision for staff benefit as per Accounting Standard 15 (Revised) a. Defined Benefit Plans:

(i) Gratuity

Gratuity is funded defined benefit plan for qualifying employees under which the Company makes a contribution to the SBI Life Insurance Company Limited Employees Gratuity Fund. The plan provides for a lump sum payment as determined in the manner specified under The Payment of Gratuity Act, 1972, to the vested employees either at retirement or on death while in employment or on termination of employment. The benefit vests after five years of continuous service. Defined benefit obligations are actuarially determined at each Balance Sheet date using the projected unit credit method (PUCM) as per Accounting Standard (AS) 15 (Revised), "Employee benefits”. Actuarial gains and losses are recognised in the Revenue Account.

(i) Employee Stock Option Scheme (“ESOS”)

The SBI Life Employee Stock Option Plan 2018 (''ESOP 2018'') and SBI Life Employees Stock Option Scheme 2018 (''the Scheme'' or ''ESOS 2018'') has been approved by the shareholders of the Company in the Annual General Meeting (AGM) held on September 27, 2018 based on the recommendation of the Board Nomination & Remuneration Committee (''NRC'') and Board of Directors (''Board'') in their meetings held on August 31, 2018.

The maximum number of stock options granted to eligible employees in accordance with ESOP 2018 shall not exceed 30,000,000 shares. During any one year, no employee shall be granted Options equal to or exceeding 1% of the issued share capital of the Company at the time of Grant of Options unless an approval from the Shareholders is taken by way of special resolution in a General Meeting. Further, the maximum number of Options in aggregate granted to an employee under this Plan shall not exceed 1,00,00,000 Options. The Exercise Price shall be determined by the Board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the Options are granted and provided in the letter of grant.

The Scheme is directly administered by the Company and provides that eligible employees are granted options to subscribe to equity shares of the Company which vest in a graded manner. The vested options may be exercised within a specified period.

During the year ended March 31, 2023 the NRC in its meeting held on July 27, 2022 has approved the grant of the Employee Stock Options (''Options'') under the provisions of ESOS 2018.

22. Investment Properties - Real Estate Investment Trusts (REITs)

The investment in Real Estate Investment Trusts (REIT''s) of '' 3,464,257 thousands as at year ended March 31, 2023 (Previous year ended March 31, 2022''3,951,151 thousands) has been disclosed as part of the Investment Property in accordance with the IRDAI circular no. IRDAI/CIR/F&I/INV/056/03/2016-17 dated March 14, 2017 and IRDAI (Investment) Regulations, 2016.

23. Derivatives

The Company offers guaranteed products wherein the Policyholders are assured of a fixed rate of return for premiums to be received in future. These premiums are likely to be received over a longer tenure and the guaranteed rate of return is fixed at the beginning of the policy term. Any fall in interest rates would mean that each incremental investment of the Company would earn a lower rate of return. Accordingly, the Company manages the Interest Rate Risk in accordance with the IRDAI circular no. IRDA/F&I/INV/CIR/138/06/2014 dated June 11, 2014 (''the IRDAI circular on Interest Rate Derivatives'') and IRDAI Investment Master Circular issued in May 2017 which allows insurers to deal in rupee interest rate derivatives such as Forward Rate Agreements ("FRAs“), Interest Rate Swaps ("IRS”) and Exchange Traded Interest Rate Futures ("IRF“).

The Company has in place a derivative policy approved by Board which covers various aspects that apply to the functioning of the derivative transactions undertaken to substantiate the hedge strategy to mitigate the interest rate risk, thereby managing the volatility of returns from future fixed income investments, due to variations in market interest rates.

During the year the Company has entered into Forward Rate Agreements (FRA) transactions, as part of its Hedging strategy, to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI circular on Interest Rate Derivatives.

Forward Rate Agreement derivative contracts are over-the-counter (OTC) transactions wherein, the Company lock-in the yield on the government bond for the period till the maturity of the contract with an objective to lock in the price of an interest bearing security at a future date.

Derivatives (FRA) are undertaken by Company solely for the purpose of hedging interest rate risks on account of following forecasted transactions: a) Reinvestment of maturity proceeds of existing fixed income investments; b) Investment of interest income receivable; and c) Expected policy premium income receivable on insurance contracts which are already underwritten in Life, Pension & Annuity business.

A net amount of '' (1,372,895) thousands for the year ended March 31, 2023 (Previous year ended March 31, 2022 '' (484,923) thousands) has recognized in Revenue Account being portion of loss determined to be ineffective.

The amount that was removed from Hedge Reserve account during the year ended March 31, 2023 in respect of forecast transaction for which hedge accounting had previously been used, but is no longer expected to occur is '' Nil (Previous year '' Nil). The cash flows from the hedges are expected to occur over the outstanding tenure of underlying policy liabilities and will accordingly flow to the Revenue Account.

B. Qualitative Disclosures on risk exposure in Fixed Income Derivatives:

Overview of business and processes:

a) Fixed Income Derivative Hedging instruments:

Derivatives are financial instruments whose characteristics are derived from the underlying assets, or from interest and exchange rates or indices. These include forward rate agreements, interest rate swaps and interest rate futures.

The Company during the financial year has entered into FRA derivative instrument to minimise exposure to fluctuations in interest rates on plan assets and liabilities. This hedge is carried in accordance with its established policies, strategy, objective and applicable regulations. The Company does not engage in derivative transactions for speculative purposes.

b) Derivative policy/process and Hedge effectiveness assessment:

The Company has well defined Board approved Derivative Policy and Process document setting out the strategic objectives, regulatory and operational framework and risks associated with interest rate derivatives along with having measurement, monitoring processes and controls thereof. The accounting policy has been clearly laid out for ensuring a process of periodic effectiveness assessment and accounting.

The Company has clearly identified roles and responsibilities to ensure independence and accountability through the investment decision, trade execution, to settlement, accounting and periodic reporting and audit of the Interest Rate Derivative exposures. The risk management framework for the Interest Rate Derivatives are monitored by the Risk Management Committee.

c) Scope and nature of risk identification, risk measurement, and risk monitoring:

The Derivative and related Policies as approved by the Board sets appropriate market limits such as sensitivity limits and value-at-risk limits for exposures in interest rate derivatives. All financial risks of the derivative portfolio are measured and monitored on periodic basis.

C. Quantitative disclosure on risk exposure in Forward Rate Agreement

A hedge is deemed effective, if it has a high statistical correlation between the change in value of the hedged item and the hedging instrument (FRA). Gains or losses arising from hedge ineffectiveness, if any, are recognised in the Revenue Account.

The credit exposure limit for FRA derivatives has been calculated on the basis of Credit Equivalent Amount using the Current Exposure Method (CEM) as detailed below:

The Credit Equivalent Amount of a market related off-balance sheet transaction calculated using the CEM is the sum of

a) the current credit exposure (gross positive mark-to-market value of the contract); and

b) potential future credit exposure which is a product of the notional principal amount across the outstanding contract and a factor that is based on the mandated credit conversion factors as prescribed under the IRDAI circular on Interest Rate Derivatives, which is applied on the residual maturity of the contract.

24. Micro, Small and Medium Enterprises Development Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006 and amendments made thereafter, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises.

According to information available with the management, on the basis of intimation received from suppliers, regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and amendments made thereafter, the Company has amounts due to Micro and Small Enterprises under the said Act as follows:

25. Additional disclosure requirements as per Corporate Governance Guidelines

i. Quantitative and qualitative information on the insurer''s financial and operating ratios, namely, incurred claim, commission and expenses ratios:

Refer summary of financial statement and ratios.

ii. Actual solvency margin details vis-a-vis the required solvency margin

The actual solvency margin of the Company as on March 31, 2023 stands at 2.15 times (previous year ended March 31, 2022: 2.05 times) as against regulatory requirement of 1.50. There has been no capital infusion after FY 2007-08.

iii. Persistency ratio

The persistency ratio (13^th month) for regular premium and limited premium paying term policies of Individual segment for the year ended March 31, 2023 is 85.52% (previous year ended March 31, 2022 is 85.18%) based on premium amount and 79.52% (previous year ended March 31, 2022 is 79.86%) based on number of policies.

The persistency ratios are calculated as per IRDA/ACT/CIR/GEN/21/02/2010 circular dated February 11, 2010 and IRDAI circular no. I RDAI/F&A/CIR/MISC/256/09/2021 dated September 30, 2021.

Persistency ratios for the year ended March 31, 2023 and March 31, 2022 are calculated using policies issued in 1^st March to 28^th February period of the relevant years.

iv. Financial performance including growth rate and current financial position of the insurer

Refer summary of financial statement and ratios.

v. A description of the risk management architecture

The Board has the ultimate responsibility for overseeing the management of risk within the Company. The Risk profile of the Company is reported to the Board by the Risk Management Committee of the Board (RMC-B) from time to time. The RMC-B is responsible for overseeing the Company''s risk management program and for ensuring that significant risks to the Company are reported to the Board on a timely basis and apprise the Board of the various risk management strategies being adopted. The Company''s Risk Appetite statement is reviewed by the Board so as to ensure that the business of the Company is carried out within the set risk limits.

The RMC-B is supported by Risk Management Committee of the Executives (RMC-E) and the Asset Liability Committee (ALCO). The RMC-E oversees the enterprise wide risk management activities and the ALCO monitors insurance and investment risk portfolio.

The Company has an Information Security Committee (ISC) which oversees all information and cyber security risks and its control. The Company has constituted a Data Governance Committee (DGC) to oversee formulation and implementation of data governance framework/policies/procedures in SBI Life.

The Company also has a Risk Event Monitoring Committee (REMC) which primarily oversees reputational risks and other significant external risks. Minutes of the REMC meetings are put up to RMC-E for information.

Refer Enterprise Risk Management section for detailed information.

vii. Payments made to group entities from Policyholders Funds

Refer related party disclosure note no. 43.

viii. Any other matters, which have material impact on the insurer''s financial position - Nil

ix. Disclosure on additional works given to auditors

Pursuant to clause 7.1 of Corporate Governance guidelines issued by IRDAI dated May 18, 2016, the additional works (other than statutory/internal audit) given to the auditors are detailed below:

x. Deposits made under Local laws

The Company has no deposit as at March 31, 2023 (previous year ended March 31, 2022: Nil) made under local laws or otherwise encumbered in or outside India, except investments and deposits detailed in Note 3 of Schedule 16(B).

26. Age-wise analysis for policyholders'' - unclaimed amount

In accordance with IRDAI Master Circular on Unclaimed amounts of policyholders dated November 17, 2020, the Company maintains a single segregated fund to manage all unclaimed amounts. The amount is invested in money market instruments, liquid mutual funds and fixed deposits of scheduled banks.

The amount in the unclaimed fund has been disclosed in schedule 12 as "Assets held for unclaimed amount of policyholders” alongwith "Income accrued on unclaimed fund”. Investment income accruing to the fund is disclosed in the revenue account. Such investment income net of fund management charges is disclosed in schedule 4 "Benefits paid as "interest on unclaimed amounts”.

As per IRDA guidelines, the details of the unclaimed amounts of the policyholders or insured''s are mentioned below:

33. Participation in Joint Lenders Forum formed under Reserve Bank of India (RBI) Guidelines

The Company has not participated in any Joint Lenders Forum formed under RBI guidelines for loan accounts which could turn into potential NPAs.

35. Long term contracts

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provisions as required under any law/accounting standard for material foreseeable losses on such long term contracts including derivative contracts has been made in the financial statements.

For insurance contracts, actuarial valuation of liabilities for all the policies which were in the books of the Company and where there is a liability as at March 31, 2023 is done by the Appointed Actuary of the company. The assumptions used in valuation of liabilities are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with IRDAI.

36. Interim Dividend

The Board of Directors at its meeting held on March 8, 2023 has declared an Interim Dividend of '' 2.5 per share for the year ended March 31, 2023 (previous year ended March 31, 2022: '' 2 per share). Accordingly, a provision of '' 2,502,197 thousands (previous year ended March 31, 2022: '' 2,000,741 thousands) have been made towards interim dividend in the accounts for the year ended March 31, 2023.

37. Corporate Social Responsibility

The Company has spent '' 226,210 thousands for the year ended March 31, 2023 (previous year ended March 31, 2022 '' 267,276 thousands) towards Corporate Social Responsibility activities mentioned in Schedule VII of The Companies Act, 2013.

i. Gross amount required to be spent by the Company for the year ended March 31, 2023 is '' 222,189 thousands (previous year ended March 31, 2022''247,140 thousands).

ii. Amount approved by the Board to be spent by the Company during the year ended March 31, 2023 is '' 222,189 thousands (previous year ended March 31, 2022''247,140 thousands).

38. Linked Business

Financial statements, for each segregated fund of the linked businesses, is presented in ULIP Disclosures as require by the Master Circular. Segregated funds represent funds maintained in accounts to meet specific investment objectives of policyholders who bear the investment risk. Investment income/gains and losses generally accrue directly to the policyholders. The assets of each account are segregated and are not subject to claims that arise out of any other business of the insurer.

39. COVID-19 impact

In March 2020, COVID-19 outbreak started and spread across the globe. This outbreak was declared as global pandemic by World Health Organization (WHO) on March 11, 2020. The Company have been regularly monitoring the experience and would continue to do so. An additional Pandemic Risk Reserve (inclusive of COVID-19) of '' 2,893,383 thousands has been held as at March 31, 2023 (Previous year ended March 31, 2022''2,893,383 thousands).

40. Ind AS update

International Accounting Standard Board (''IASB'') has notified the amended IFRS 17, with global date of implementation starting from January 1, 2023. The Institute of Chartered Accountants of India (''ICAI'') has issued exposure draft of amendments in Ind AS 117 on February 8, 2022. The amended Ind AS 117 is under process of notification. The IRDAI (the Authority) vide its communication dated July 14, 2022 on Ind AS implementation in Insurance Sector has conveyed its broad approach on Ind AS implementation and necessary steps to be initiated by the insurers. The authority advised insurers to set up steering committee for Ind AS implementation. Further, the authority is having regular interactions with the insurance companies to discuss the matters relating to implementation of Ind AS.

Ind AS implementation (specifically Ind AS 117) will have major change in current accounting and reporting practice. The Ind AS implementation will also impact the business, operational, regulatory and IT systems. The roadmap/strategy for Ind AS implementation involves initial Gap and impact assessment to identify financial and other impacts, building the initial work plan and implementation roadmap, formulating accounting policies, system and process requirements and execution of implementation plan and monitoring.

As per the directions of Authority, the Company has constituted Steering Committee headed by President & CFO and members from cross-functional areas such as actuarial, investment, information technology. The Company has engaged knowledge partner for Ind AS GAP and impact assessment. The process of Ind AS GAP and impact assessment is in progress. The Knowledge partner has conducted various training session on different aspects of IFRS 17/Ind AS 117. Further, the concerned team members have also attended the IFRS 17 training session organised by Institute of Chartered Accountant of India (ICAI) and Institute of Actuaries of India (IAI).

41. Remuneration to Non-Executive Directors

No remuneration or commission is paid to Non-Executive Directors, other than the Sitting Fees for attending Board and/ or its Committee meetings. The amount of sitting fees paid to the Non-Executive Directors is disclosed in Profit and Loss (Shareholders) Account.

42. Foreign Exchange gain/(loss)

The amount of foreign exchange gain/(loss) included in the net profit or loss for the year ended March 31, 2023 is '' Nil (Previous year ended March 31, 2022''12 thousands).

45. Segment reporting

In accordance with the Accounting regulations read with Accounting Standard - 17 on "Segment reporting” notified under Section 133 of the Companies Act, 2013, read together with Paragraph 7 of the Company (Accounts) Rules, 2014, further amended by Companies (Accounting Standards) Amendment Rules, 2016, life insurance companies are required to prepare Segmental Revenue Account and Segmental Balance Sheet. The Company''s business is segmented into traditional -par business, non-par business and unit-linked business. Since the Company has conducted business only in India, the same is considered as one geographical segment. The accounting policies used in segmental reporting are same as those used in the preparation of the financial statements.

(a) Segmental Revenue Account

The methodology for determining segmental revenue and expenses adopted in the current year is described below:

Premium income, commission, investment income and profit or loss on sale or disposa l of investments is directly allocated to the respective segments to which they relate. Within the Non-Participating segment, investment income and profit or loss on sale or disposal of investments are directly allocated if a segregated investment portfolio is maintained. The remaining investment income and profit or loss on sale of investments is apportioned on the basis of the average policy liabilities in the individual business and the group business.

Operating expenses that are directly attributable and identifiable to the business segments are allocated on actual basis. Other operating expenses, which are not directly identifiable and attributable, are allocated after considering the following:

i. Cost centres identified by the Management

ii. Channels used for the business segments

iii. New business premium and renewal premium

iv. New lives added during the year

v. Total number of lives covered as at the end of the year

vi. New business sum assured

vii. Actuarial Liability

(b) Segmental Balance Sheet

Investments are effected from the respective funds and have been reflected accordingly. Fixed assets have been allocated to shareholders'' funds, net current assets have been directly allocated among shareholders, life business, pension business, group business, unit - linked business and variable insurance business segments. Other net current assets have been allocated to life business and pension business in the ratio of the respective policy liabilities as at the year end.

Within life business, certain assets and liabilities have been directly identified to the respective segments. Other assets and liabilities under Life business have been allocated in the ratio of the respective policy liabilities as at the year end.

---

Mar 31, 2022

1. Contingent Liabilities			'' (''000)
Sr.	Particulars
No		March 31, 2022	March 31, 2021
1	Partly paid-up investments	6,200,000	10,900,000
2	Claims, other than against policies, not acknowledged as debts by the Company (Refer Note 3)	9,956	9,956
3	Underwriting commitments outstanding (in respect of shares and securities)	-	-
4	Guarantees given by or on behalf of the Company	-	-
5	Statutory demands or liabilities in dispute, not provided (Refer Note 1)	-	-
6	Reinsurance obligations to the extent not provided for in accounts	-	-
7	Others: - Insurance claims disputed by the Company, to the extent not provided or reserved (Refer Note 3)	2,142,212	1,654,364
	- Directions issued by IRDAI under Section 34(1) of Insurance Act, 1938 (Refer Note 2)	2,752,948	3,871,020
	Total	11,105,116	16,435,340

Notes:

Note 1:

Show-cause notices issued by various Government Authorities are not considered as an obligation. When any order or notice

is raised by the authorities for which the Company is in appeal under adjudication, these are disclosed as contingent liability

except in cases where the probability of any financial outflow is remote.

Note 2:

(a) The IRDAI directions under Section 34 (1) of the Insurance Act, 1938 to refund allegedly excess commission paid to corporate agents to the members or the beneficiaries amounting to '' 2,752,948 thousands (Previous year ended March 31, 2021: '' 2,752,948 thousands) vide order No. IRDA/Life/ORD/Misc/083/03/2014 dated March 11, 2014 has been set aside by order dated January 29, 2020 made by the Securities Appellate Tribunal (SAT). The SAT has remitted the matter to IRDAI to recalculate the interest earned on advance premium collected. The IRDAI recalculation, if any, has not been received by the Company. IRDAI and SBI Life both, have challenged the order dated January 29, 2020 before the Hon’ble Supreme Court of India in Civil Appeal Nos. 254-255 of 2021 and Civil Appeal No. 2497-2498 of 2021 respectively, which is yet to be adjudicated upon.

(b) IRDAI has issued directions under Section 34(1) of the Insurance Act, 1938 to distribute the administrative charges paid to master policyholders amounting to '' 843,174 thousands vide its order no. IRDA/Life/ORD/MISC/228/10/2012 dated October 5, 2012 and order no. IRDA/Life/ ORD/MISC/009/01/2017 dated January 11, 2017. The Securities Appellate Tribunal (SAT) vide its order dated April 7, 2021 has dismissed the appeal filed by the Company against the IRDAI order. Subsequently, the Hon’ble Supreme Court vide its order dated September 22, 2021 has dismissed petition filed by the Company against the SAT order. During the year, the Company has made provision in the Profit and Loss Account (Shareholders’ Account) for refund of administrative charges paid to group master policy holders amounting to '' 843,174 thousands plus applicable interest as per IRDAI order dated January 11, 2017. Further, out of the provision amount, the Company has refunded '' 508,220 thousands along with interest of '' 198,869 thousands to the members of group insurance policy.

Note 3:

These cases pertain to litigation pending with various appellate forums/courts.

2. Pending Litigation

The Company’s pending litigations comprise of claims against the Company primarily by customers and proceedings pending with tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liability (refer Note 1 of Schedule 16 (C)) where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial results as at March 31, 2022.

5. Actuarial Assumptions

The assumptions used in valuation of liabilities are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with IRDAI.

The actuarial assumptions certified by the Appointed Actuary are as under:

a) In the actuarial valuation all the policies, which were in the books of the Company and where there is a liability as at March 31, 2022 have been taken into account.

The portfolio consists of Participating, Non-Participating and Linked segments.

‘ Participating’ segment is further classified into the following Lines of Businesses (LoBs): Individual - Life -Participating, Individual - Pension - Participating, Group - Pension - Participating and Individual - VIP - Participating.

‘ Non-Participating’ segment is further classified into the following LoBs: Individual - Life - Non-Participating, Individual - Pension - Non-Participating, Group Savings - Non-Participating, Group One Year Renewable Group Term Assurance (OYRGTA) - Non-Participating, Group Other - Non-Participating, Annuity - Non-Participating (Individual and Group), Health - Non-Participating (Individual and Group), and VIP - Non-Participating (Individual and Group).

‘Linked’ segment is further classified into the following LoBs: Individual - Life - Linked, Group - Linked and Individual - Pension - Linked.

b) For policies which are likely to get cancelled during their “free look period”, premium less stamp duty and medical expenses as per the policy contract need to be refunded. Adequate provision is provided for such policies.

c) The following parametric values are used to carry out the actuarial valuation:

For mortality assumption under life business ‘Indian Assured Lives (2012-2014) Ultimate Mortality table’ and under general annuity business ‘Indian Individual Annuitant’s Mortality Table (2012-15)’ has been used. For Morbidity assumption, the Morbidity Tables provided by re-insurers has been used with suitable adjustment.

The interest rate for valuation lies in the range of 5.50% to 6.00% per annum as shown in the table below. While allocating expenses for the current year, the entire policyholders’ expenses have been allocated product-wise.

For fully paid-up and reduced paid-up policies, fixed expenses are considered same as for single premium policies.

An inflation rate of 5.50% per annum (Previous year ended March 31, 2021: 5.50% per annum) has been assumed while estimating future expenses.

For participating products, the vested bonuses are those which were distributed by the Company consequent to the actuarial valuations carried out annually at the end of each financial year dated March 31, 2002 to March 31, 2022. Regarding bonus provisions for the current financial year and bonus provision for future years, the bonus rates have been assessed by carrying out Bonus Earning Capacity (BEC)/ asset share investigations and taking into consideration the policyholder’s reasonable expectations.

Margin for Adverse Deviation (MAD) has been provided, wherever applicable and required.

In addition to this, Incurred but Not Reported (IBNR) claims reserve is also provided wherever required.

The above parameters and the MAD provision have been observed to ensure prudence and are in accordance with the GN / APS issued by the Institute of Actuaries of India and in concurrence with the Regulations and circulars of IRDAI.

The Surplus emerged from Non-participating segment has been transferred to Profit & Loss Account for the year ended March 31, 2022 based on the recommendation of the Appointed Actuary and the necessary fund transfer will be made after the year end on the basis of Audited financials with required recommendations by the Appointed Actuary.

Funds for Future Appropriation

As at March 31, 2022, the Funds for Future Appropriation (FFA) in non-linked participating segments is '' 9,936,423 thousands (Previous year ended March 31, 2021''8,423,244 thousands).

There is no FFA under any other segment.

6. Cost of Guarantee

Provision of '' 1,281,766 thousands (Previous year ended March 31, 2021''3,031,450 thousands) has also been made for the cost of guarantee under Individual unit linked policies with guarantee.

Effective May 9, 2020 Mr. Mahesh Kumar Sharma was deputed from State Bank of India as the Managing Director and CEO of the Company. IRDAI has accorded its approval to this appointment.

The remuneration of Mr. Sanjeev Nautiyal and Mr. Arijit Basu for the year ended March 31, 2021 includes salary arrears of previous years pertaining to their tenure as MD & CEO of the Company. The salary arrears are in accordance with the wage revision by State Bank of India.

IRDAI (Obligations of insurers to rural and social sectors) Regulations, 2015 mandates the Company to cover 5% of the total business procured in the preceding financial year (in terms of lives) under the social sector and 20% of the policies written in the respective year under rural sector.

Operating Lease Arrangements (a) Assets taken on operating lease:

In accordance with Accounting Standard 19 on ‘Leases’, the details of leasing arrangements entered into by the Company are as under:

The Company has entered into agreements in the nature of lease or leave and licence with different lessors or licensors for residential premises, office premises and motor vehicles. These are in the nature of operating lease. Some of these lease arrangements contain provisions for renewal and escalation. There are no restrictions imposed by lease arrangements nor are there any options given to the Company to purchase the properties and the rent is not determined based on any contingency.

Assets given on operating lease:

The Company has entered into an agreement in the nature of leave and licence for leased out some portion of office premises. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency.

Earnings per share

In accordance with Accounting Standard 20 on ‘Earning per share’, basic earnings per share are calculated by dividing the net profit or loss in the shareholders’ account by the weighted average number of equity shares outstanding during the year.

a) Discount rate is based on benchmark rate available on Government Securities for the estimated term of the obligations.

b) The expected return on plan assets is based on market expectations at the beginning of the period, for returns over the entire life of the related obligation.

c) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

Employee Stock Option Scheme (“ESOS”)

The SBI Life Employee Stock Option Plan 2018 (‘ESOP 2018’) and SBI Life Employees Stock Option Scheme 2018 (‘the Scheme’ or ‘ESOS 2018’) has been approved by the shareholders of the Company in the Annual General Meeting (AGM) held on September 27, 2018 based on the recommendation of the Board Nomination & Remuneration Committee (‘NRC’) and Board of Directors (‘Board’) in their meetings held on August 31, 2018.

The maximum number of stock options granted to eligible employees in accordance with ESOP 2018 shall not exceed 30,000,000 shares. During any one year, no employee shall be granted Options equal to or exceeding 1% of the issued share capital of the Company at the time of Grant of Options unless an approval from the Shareholders is taken by way of special resolution in a General Meeting. Further, the maximum number of Options in aggregate granted to an employee under this Plan shall not exceed 10,000,000 Options. The Exercise Price shall be determined by the Board Nomination & Remuneration Committee in concurrence with the Board of Directors of the Company on the date the Options are granted and provided in the letter of grant.

The Scheme is directly administered by the Company and provides that eligible employees are granted options to subscribe to equity shares of the Company which vest in a graded manner. The vested options may be exercised within a specified period.

During the year ended March 31, 2022 the NRC in its meeting held on July 26, 2021 has approved the grant of the Employee Stock Options (‘Options’) under the provisions of ESOS 2018.

The Company had made 100% NPA provision of 7525,790 thousand in FY 2020 on account of default in interest and principal repayment of non-convertible debenture (NCDs) of DHFL. During the year ended March 31, 2022, the Company

is in receipt of 7 233,409 thousand, in the form of 7106,027 thousand as cash and 7127,382 thousand as NCDs of Piramal Capital & Housing Finance Limited as per resolution plan under Insolvency & Bankruptcy Code (IBC). Therefore, the Company has written-off balance investment receivable of 7292,381 thousand for NCDs of DHFL on settlement of claims as per the resolution plan.

22. Investment Properties - Real Estate Investment Trusts (REITs)

The investment in Real Estate Investment Trusts (REIT’s) of '' 3,951,151 thousands (Previous year ended March 31, 2021 '' 3,298,563 thousands) has been disclosed as part of the Investment Property in accordance with the IRDAI circular no. IRDAI/QR/F&I/INV/056/03/2016-17 dated March 14, 2017 and IRDAI (Investment) Regulations, 2016.

23. Forward Rate Agreement

The Company offers guaranteed products wherein the Policyholders are assured of a fixed rate of return for premiums to be received in future. These premiums are likely to be received over a longer tenure and the guaranteed rate of return is fixed at the beginning of the policy term. Any fall in interest rates would mean that each incremental investment of the Company would earn a lower rate of return. Accordingly, the Company manages the Interest Rate Risk in accordance with the IRDAI circular no. IRDA/F&I/ INV/CIR/138/06/2014 dated June 11, 2014 (‘the IRDAI circular on Interest Rate Derivatives’) and IRDAI Investment Master Circular issued in May 2017 which allows insurers to deal in rupee interest rate derivatives such as Forward Rate Agreements (“FRAs”), Interest Rate Swaps (“IRS”) and Exchange Traded Interest Rate Futures (“ IRF”).

The Company has in place a derivative policy approved by Board which covers various aspects that apply to the functioning of the derivative transactions undertaken to substantiate the hedge strategy to mitigate the interest rate risk, thereby managing the volatility of returns from future fixed income investments, due to variations in market interest rates.

During the year the Company has entered into Forward Rate Agreements (FRA) transactions, as part of its Hedging strategy, to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted by the IRDAI circular on Interest Rate Derivatives.

Forward Rate Agreement derivative contracts are over-the-counter (OTC) transactions wherein, the Company lock-in the yield on the government bond for the period till the maturity of the contract with an objective to lock in the price of an interest bearing security at a future date.

Derivatives (FRA) are undertaken by Company solely for the purpose of hedging interest rate risks on account of following forecasted transactions: a) Reinvestment of maturity proceeds of existing fixed income investments; b) Investment of interest income receivable; and c) Expected policy premium income receivable on insurance contracts which are already underwritten in Life, Pension & Annuity business.

B. Qualitative Disclosures on risk exposure in Fixed Income Derivatives:

Overview of business and processes:

a) Fixed Income Derivative Hedging instruments:

Derivatives are financial instruments whose characteristics are derived from the underlying assets, or from interest and exchange rates or indices. These include forward rate agreements, interest rate swaps and interest rate futures.

The Company during the financial year has entered into FRA derivative instrument to minimise exposure to fluctuations in interest rates on plan assets and liabilities. This hedge is carried in accordance with its established policies, strategy, objective and applicable regulations. The Company does not engage in derivative transactions for speculative purposes.

b) Derivative policy/process and Hedge effectiveness assessment:

The Company has well defined Board approved Derivative Policy and Process document setting out the strategic objectives, regulatory and operational framework and risks associated with interest rate derivatives along with having measurement, monitoring processes and controls thereof. The accounting policy has been clearly laid out for ensuring a process of periodic effectiveness assessment and accounting.

The Company has clearly identified roles and responsibilities to ensure independence and accountability through the investment decision, trade execution, to settlement, accounting and periodic reporting and audit of the Interest Rate Derivative exposures. The risk management framework for the Interest Rate Derivatives are monitored by the Risk Management Committee.

c) Scope and nature of risk identification, risk measurement, and risk monitoring:

The Derivative and related Policies as approved by the Board sets appropriate market limits such as sensitivity limits and value-at-risk limits for exposures in interest rate derivatives. All financial risks of the derivative portfolio are measured and monitored on periodic basis.

C. Quantitative disclosure on risk exposure in Forward Rate Agreement

A hedge is deemed effective, if it has a high statistical correlation between the change in value of the hedged item and the hedging instrument (FRA). Gains or losses arising from hedge ineffectiveness, if any, are recognised in the Revenue Account.

The tenure of the hedging instrument may be less than or equal to the tenure of underlying hedged asset/liability.

The exposure limit has been calculated on the basis of Credit equivalent amount using the Current Exposure Method (CEM) as detailed below:

25. Additional disclosure requirements as per Corporate Governance Guidelines

i. Quantitative and qualitative information on the insurer’s financial and operating ratios, namely, incurred claim, commission and expenses ratios:

Refer summary of financial statement and ratios.

ii. Actual solvency margin details vis-a-vis the required solvency margin

The actual solvency margin of the Company as on March 31, 2022 stands at 2.05 times (Previous year ended March 31, 2021: 2.15 times) as against regulatory requirement of 1.50. There has been no capital infusion after FY 2007- 08.

iii. Persistency ratio

The persistency ratio (13^th month) for regular premium and limited premium paying term policies of Individual segment for the year ended March 31, 2022 is 85.18% (Previous year ended March 31, 2021 is 85.39%) based on premium amount and 79.86% (Previous year ended March 31, 2021 is 78.97%) based on number of policies.

The persistency ratios are calculated as per IRDA/ACT/QR/GEN/21/02/2010 circular dated February 11, 2010 and IRDAI circular no. IRDAI/F&A/CIR/MISC/256/09/2021 dated September 30, 2021.The figures of comparative year have been restated in accordance with the IRDAI circular dated September 30, 2021.

Persistency ratios for the year ended March 31, 2022 and March 31, 2021 are calculated using policies issued in 1^st March to February 28, period of the relevant years.

iv. Financial performance including growth rate and current financial position of the insurer

Refer summary of financial statement and ratios.

v. A description of the risk management architecture

The Board has the ultimate responsibility for overseeing the management of risk within the Company. The Risk profile of the Company is reported to the Board by the Risk Management Committee of the Board (RMC-B) from time to time. The RMC-B is responsible for overseeing the Company’s risk management program and for ensuring that significant risks to the Company are reported to the Board on a timely basis and apprise the Board of the various risk management strategies being adopted. The Company’s Risk Appetite statement is reviewed by the Board so as to ensure that the business of the Company is carried out within the set risk limits.

The RMC-B is supported by Risk Management Committee of the Executives (RMC-E) and the Asset Liability Committee (ALCO). The RMC-E oversees the enterprise wide risk management activities and the ALCO monitors insurance and investment risk portfolio.

The Company has an Information Security Committee (ISC) which oversees all information and cyber security risks and its control. The Company has constituted a Data Governance Committee (DGC) to oversee formulation and implementation of data governance framework / policies / procedures in SBI Life.

The Company also has a Risk Event Monitoring Committee (REMC) which primarily oversees reputational risks and other significant external risks. Minutes of the REMC meetings are put up to RMC-E for information.

26. Age-wise analysis for policyholders’ - unclaimed amount

In accordance with IRDAI Master Circular on Unclaimed amounts of policyholders dated November 17, 2020, the Company maintains a single segregated fund to manage all unclaimed amounts. The amount is invested in money market instruments, liquid mutual funds and fixed deposits of scheduled banks.

The amount in the unclaimed fund has been disclosed in schedule 12 as “Assets held for unclaimed amount of policyholders” along with “Income accrued on unclaimed fund”. Investment income accruing to the fund is disclosed in the revenue account. Such investment income net of fund management charges is disclosed in schedule 4 “Benefits paid as “interest on unclaimed amounts”

33. Participation in Joint Lenders Forum formed under Reserve Bank of India (RBI) Guidelines

The Company has not participated in any Joint Lenders Forum formed under RBI guidelines for loan accounts which could turn into potential NPAs.

35. Long-term contracts

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provisions as required under any law/ accounting standard for material foreseeable losses on such long-term contracts including derivative contracts has been made in the financial statements.

For insurance contracts, actuarial valuation of liabilities for all the policies which were in the books of the Company and where there is a liability as at March 31, 2022 is done by the Appointed Actuary of the Company. The assumptions used in valuation of liabilities are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with IRDAI.

36. Interim dividend

The Board of Directors at its meeting held on March 22, 2022 has declared an Interim Dividend of '' 2 per share for the year ended March 31, 2022 (Previous year ended March 31, 2021: '' 2.5 per share). Accordingly, a provision of '' 2,000,741 thousands (Previous year ended March 31, 2021: '' 2,500,177 thousands) have been made towards interim dividend in the accounts for the year ended March 31, 2022.

38. Linked business

Financial statements, for each segregated fund of the linked businesses, is presented in ULIP Disclosures as require by the Master Circular. Segregated funds represent funds maintained in accounts to meet specific investment objectives of policyholders who bear the investment risk. Investment income/gains and losses generally accrue directly to the policyholders. The assets of each account are segregated and are not subject to claims that arise out of any other business of the insurer.

39. COVID-19 impact

In view of COVID-19 pandemic, the Company has assessed the overall impact of this pandemic on its business and financials, including valuation of assets, policy liabilities and solvency for the year ended March 31, 2022. Based on the evaluation, the Company have made an additional reserve amounting to '' 2,893,383 thousands towards COVID-19 pandemic and the same has been provided for as at 31/03/2022 in the actuarial policy liability. The Company will continue to closely monitor any future developments relating to COVID-19 which may have any impact on its business and financial position.

42. Segment Reporting

In accordance with the Accounting regulations read with Accounting Standard - 17 on “Segment reporting” notified under Section 133 of the Companies Act, 2013, read together with Paragraph 7 of the Company (Accounts) Rules, 2014, further amended by Companies (Accounting Standards) Amendment Rules, 2016, life insurance companies are required to prepare Segmental Revenue Account and Segmental Balance Sheet. The Company’s business is segmented into traditional -par business, non-par business and unit-linked business. Since the Company has conducted business only in India, the same is considered as one geographical segment. The accounting policies used in segmental reporting are same as those used in the preparation of the financial statements.

(a) Segmental Revenue Account

The methodology for determining segmental revenue and expenses adopted in the current year is described below:

Premium income, commission, investment income and profit or loss on sale or disposal of investments is directly allocated to the respective segments to which they relate. Within the Non-Participating segment, investment income and profit or loss on sale or disposal of investments are directly allocated if a segregated investment portfolio is maintained. The remaining investment income and profit or loss on sale of investments is apportioned on the basis of the average policy liabilities in the individual business and the group business.

Operating expenses that are directly attributable and identifiable to the business segments are allocated on actual basis. Other operating expenses, which are not directly identifiable and attributable, are allocated after considering the following:

i. Cost centres identified by the Management

ii. Channels used for the business segments

iii. New business premium and renewal premium

iv. New lives added during the year

v. Total number of lives covered as at the end of the year

vi. New business sum assured

vii. Actuarial Liability

(b) Segmental Balance Sheet

Investments are effected from the respective funds and have been reflected accordingly. Fixed assets have been allocated to shareholders’ funds, net current assets have been directly allocated among shareholders, life business, pension business, group business, unit - linked business and variable insurance business segments. Other net current assets have been allocated to life business and pension business in the ratio of the respective policy liabilities as at the year end.

Within life business, certain assets and liabilities have been directly identified to the respective segments. Other assets and liabilities under Life business have been allocated in the ratio of the respective policy liabilities as at the year end.

---

Mar 31, 2018

Notes:

Note 1:

Show cause notices issued by various Government Authorities are not considered as obligation. When any order or notice is raised by the authorities for which the Company is in appeal under adjudication, these are disclosed as contingent liability except in cases where the probability of any financial outflow is remote.

Note 2:

(a) IRDAI has issued directions under Section 34 (1) of the Insurance Act, 1938 to distribute the administrative charges paid to master policyholders amounting to Rs, 843,174 thousands (previous year ended March 31, 2017: Rs, 843,174 thousands) vide order no. IRDA/Life/ORD/Misc/228/10/2012 dated October 5, 2012. The Company had filed an appeal against the said order with the Ministry of Finance, Government of India, who remanded the case back to IRDAI on November 4, 2015. IRDAI issued further directions dated January 11, 2017 reiterating the directions issued on October 5, 2012. The Company has filed an appeal against the said directions/ orders with the Securities Appellate Tribunal.

(b) IRDAI has issued directions under section 34 (1) of the Insurance Act, 1938 to refund the excess commission paid to corporate agents to the members or the beneficiaries amounting to Rs, 2,752,948 thousands (previous year ended

March 31, 2017: Rs, 2,752,948 thousands) vide order no. IRDA/Life/ORD/Misc/083/03/2014 dated March 11, 2014. The Company has filed an appeal against the order with the Securities Appellate Tribunal.

Note 3:

Pursuant to IRDAI''s Master Circular on Unclaimed Amounts of Policyholders dated July 25, 2017, the Company is required to transfer all unclaimed amounts for a period of more than 10 years as on September 30 of every year to the Senior Citizens'' Welfare Fund (SCWF). During the year ended March 31, 2018, the Company has transferred an amount of '' 45 thousands to SCWF (previous year ended March 31, 2017 - Nil).

2. Pending Litigation

The Company''s pending litigations comprise of claims against the company primarily by customers and proceedings pending with tax authorities. The company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liability where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial results as at March 31, 2018.

3. Encumbrances on assets

The Assets of the company are free from any encumbrances as at March 31, 2018 except for:

a. Securities or cash deposited as margin for investment trade obligations of the company:

Note: Physical custody of the securities are with respective clearing houses, however company has a right on the contractual cash flows of these investments. These investments can be invoked by the clearing houses in case of any default by the Company in settlement of trades.

4. Capital commitments

Commitments made and outstanding for loans and investment as at March 31, 2018 is Rs, 2,994,887 thousands (previous year ended March 31, 2017: Rs,860,415 thousands). Estimated amount of contracts remaining to be executed on capital account, to the extent not provided for (net of advances) as at March 31, 2018 is Rs, 119,294 thousands (previous year ended March 31, 2017: Rs, 325,684 thousands).

5. Actuarial assumptions

The actuarial assumptions certified by the Appointed Actuary are as under:

a. In the actuarial valuation all the policies, which were in the books of the Company and where there is a liability as at March 31, 2018 have been taken into account. The portfolio consists of Participating, Non-Participating and Linked segments.

'' Participating'' segment is further classified in to the following Lines of Businesses (LoBs): Individual - Life

- Participating, Individual - Pension - Participating, Group - Pension - Participating and Individual - VIP -Participating.

'' Non-Participating'' segment is further classified in to the following LoBs: Individual - Life - Non-Participating, Individual - Pension - Non-Participating, Group Savings - Non-Participating, Group One Year Renewable Group Term Assurance (OYRGTA) - Non-Participating, Group Other - Non-Participating, Annuity - Non-Participating (Individual and Group), Health - Non-Participating (Individual and Group) and VIP - Non-Participating (Individual and Group).

'' Linked'' segment is further classified in to the following LoBs: Individual - Life - Linked, Group - Linked and Individual - Pension - Linked.

b. For policies which are likely to get cancelled during their "free look period", premium less stamp duty and medical expenses as per the policy contract need to be refunded. Adequate provision is kept for such policies.

c. The following parametric values are used to carry out the actuarial valuation:

For mortality assumption under life business ''Indian Assured Lives (2006-2008) Ultimate Mortality table'' and under general annuity business ''Mortality for Annuitants-LIC (a) (1996-98) Ultimate Rates'' has been used. For Morbidity assumption, the Morbidity Tables provided by re-insurer has been used with suitable adjustment.

For fully paid-up and reduced paid-up policies, fixed expenses are considered same as for single premium policies.

An inflation rate of 5.50% per annum (previous year ended March 31, 2017: 5.50% per annum) has been assumed while estimating future expenses.

For participating products, the vested bonuses are those which were distributed by the Company consequent to the actuarial valuations carried out annually at the end of each financial year dated March 31, 2002 to March 31, 2017. Regarding bonus provisions for the current financial year and bonus provision for future years, the bonus rates have been assessed by carrying out Bonus Earning Capacity (BEC)/ asset share investigations and taking into consideration the policyholder''s reasonable expectations.

Margin for Adverse Deviation (MAD) has been separately provided, wherever applicable and required.

In addition to this, Incurred but Not Reported (IBNR) claims reserve is also provided wherever required.

The above parameters and the MAD provision have been observed to ensure prudence and are in accordance with the GN / APS issued by the Institute of Actuaries of India and in concurrence with the Regulations and circulars of IRDAI.

The Surplus emerged from Non-participating segment has been transferred to Profit & Loss Account for the year ended March 31, 2018 based on the recommendation of the Appointed Actuary and the necessary fund transfer will be made after the year end on the basis of Audited financials with required recommendations by the Appointed Actuary.

Funds for Future Appropriation

As at March 31, 2018, the Funds for Future Appropriation (FFA) in non-linked participating segments is Rs, 1,934,792 thousands (previous year ended March 31, 2017 Rs, Nil).

In respect of Individual Unit Linked Policies, the Funds for Future Appropriation (FFA) is Rs, Nil as at March 31, 2018 (previous year ended March 31, 2017 Rs,Nil) since there are no such eligible policies.

6. Cost of guarantee

Provision ofRs, 4,674,759 thousands (previous year ended March 31, 2017 - Rs, 3,884,941 thousands) has also been made for the cost of guarantee under Individual unit linked policies with guarantee and provision of Rs, 11,580 thousands (previous year ended March 31, 2017 - Rs, 10,036 thousands) has also been made for the cost of guarantee under Group unit linked policies.

7. Policy liabilities

The non-linked policy liability after reinsurance of Rs, 555,558,990 thousands as on March 31, 2018 (previous year ended March 31, 2017: Rs, 483,237,575 thousands) includes the following non-unit reserve held for linked liabilities:

9. Benefit payable

Total Benefits payable (i.e. claims and annuities outstanding) as at March 31, 2018, aggregate to Rs, 2,349,655 thousands (previous year ended March 31, 2017: Rs, 1,648,212 thousands). The outstanding balance disclosed under Schedule 13 is net of unclaimed amount of Rs, 1,005,751 thousands (previous year ended March 31, 2017: Rs, 408,747 thousands).

Claims remain unpaid for greater than six months for want of necessary details.

ii. All the claims are paid or payable in India.

10. Investments

i. Investments have been made in accordance with the Insurance Act, 1938, and Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016, as amended from time to time.

ii. All investments of the Company are performing investments.

iv. As at March 31, 2018 the aggregate cost and market value of investments, which are valued at fair value was Rs, 548,235,113 thousands (previous year ended March 31, 2017: Rs, 422,194,766 thousands) and Rs, 590,183,365 thousands (previous year ended March 31, 2017: Rs, 468,723,837 thousands) respectively.

v. Equity shares lent under the Securities Lending and Borrowing scheme (SLB) continue to be recognized in the Balance Sheet as the Company retains all the associated risk and rewards of these securities. The Fair value of equity shares lent by the Company under SLB and outstanding as at March 31, 2018 is Rs, Nil (March 31, 2017 Rs, Nil). The equity shares lent during the year were from the unit linked portfolio.

2. The remuneration excludes leave encashment and leave travel allowance which would have been accrued in the books of or funded by State Bank of India.

3. Effective March 10, 2018 Mr. Sanjeev Nautiyal was deputed from State Bank of India as the Managing Director and CEO of the Company. IRDAI has accorded its approval to this appointment.

Note:

IRDAI (Obligations of insurers to rural and social sectors) Regulations, 2015 mandates the Company to cover 5% of the total business procured in the preceding financial year (in terms of lives) under the social sector and 20% of the policies written in the respective year under rural sector.

14. Investments of funds and assets pertaining to policyholders'' liabilities

a. Allocation of investments between policyholders'' funds and shareholders'' funds

Investments made out of the shareholders'' and policyholders'' funds are tracked from inception and income accordingly accounted for on the basis of records maintained. As and when necessary, transfers have been made from shareholders'' investments to policyholders'' investments. In respect of such transfers, the investment income is allocated from the date of transfer.

16. Operating lease arrangements

(a) Assets taken on operating lease:

I n accordance with Accounting Standard 19 on ''Leases'', the details of leasing arrangements entered into by the Company are as under:

The Company has entered into agreements in the nature of lease or leave and licence with different lessors or licensors for residential premises, office premises and motor vehicles. These are in the nature of operating lease. Some of these lease arrangements contain provisions for renewal and escalation. There are no restrictions imposed by lease arrangements nor are there any options given to the Company to purchase the properties and the rent is not determined based on any contingency.

(b) Assets given on operating lease:

The Company has entered into an agreement in the nature of leave and licence for leased out some portion of office premises. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency.

17. Earnings per share

In accordance with Accounting Standard 20 on ''Earning per share'', basic earnings per share are calculated by dividing the net profit or loss in the shareholders'' account by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

Notes:

a) Discount rate is based on benchmark rate available on Government Securities for the estimated term of the obligations.

b) The expected rate of return on plan assets is based on the average long-term rate of return expected on investments of the Fund during the estimated term of the obligations.

c) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

(ii) Provident Fund

The rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared for Employees'' Provident Fund by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Based on an actuarial valuation conducted by an independent actuary, there is no deficiency as at the Balance Sheet date.

Note: The figures in bracket, if any, indicates reversal of impairment loss earlier recognized in Revenue or Profit and Loss Account. Above provision/ reversal for diminution has been adjusted with fair value change account under policyholders'' fund and shareholders'' fund in the Balance Sheet.

22. Micro, Small and Medium Enterprises Development Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises.

23. Additional disclosure requirements as per Corporate Governance Guidelines

i. Quantitative and qualitative information on the insurer''s financial and operating ratios, namely, incurred claim, commission and expenses ratios:

Refer summary of financial statement and ratios.

ii. Actual solvency margin details vis-a-vis the required solvency margin

The actual solvency margin of the Company as on March 31, 2018 stands at 2.06 times (previous year ended March 31, 2017: 2.04 times) as against regulatory requirement of 1.50. There has been no capital infusion after FY 2007-08.

iii. Persistency ratio

The persistency ratio (13th month) including single premium and fully paid up policies for the year ended March 31, 2018 is 83.03% (previous year ended March 31, 2017 is 81.07%) based on premium amount and 73.90% (previous year ended March 31, 2017 is 73.34%) based on number of policies.

iv. Financial performance including growth rate and current financial position of the insurer

Refer summary of financial statement and ratios.

v. A description of the risk management architecture

The Board has the ultimate responsibility for overseeing the management of risk within the Company. The Risk profile of the Company is reported to the Board by the Risk Management Committee of the Board (RMC-B) from time to time. The RMC-B is responsible for overseeing the Company''s risk management program and for ensuring that significant risks to the Company are reported to the Board on a timely basis and apprise the Board of the various risk management strategies being adopted. The Company''s Risk Appetite statement is reviewed by the Board so as to ensure that the business of the Company is carried out within the set risk limits.

The RMC-B is supported by Risk Management Committee of the Executives (RMC-E) and the Asset Liability Committee (ALCO). The RMC-E oversees the operational risk activities and the ALCO monitors insurance and

investment risk portfolio. RMC-E is convened by Chief of Risk, Information and Cyber Security Management and consists of the Managing Director & Chief Executive Officer, Deputy Chief Executive Officer, President -Actuarial & Risk Management, Presidents - Marketing, President - Operations & IT, Appointed Actuary, President

- Business Strategy, Chief of HR & Management Services, Chief Audit Officer, Chief Financial Officer, Chief Operating Officer, Chief Information Officer and Chief Investments Officer. ALCO is chaired by Managing Director & Chief Executive Officer and consists of Deputy Chief Executive Officer, President - Actuarial & Risk Management, President - Business Strategy, Chief Financial Officer, Appointed Actuary, Head Pricing, Head Valuation, Head - ALM, Chief Investments Officer. ALCO is convened by the Appointed Actuary.

Chief of Risk, Information and Cyber Security Management is responsible and accountable for ensuring that a risk management program is established, implemented and maintained in accordance with Risk Management Policy so that risks are managed to an acceptable level. Chief of Risk, Information and Cyber Security Management reports to the MD & CEO of the Company, through the President - Actuarial & Risk Management and maintains functional relationships with all Departmental Risk Officers.

The Departmental / Regional Heads are responsible for the management of risk in their areas of control and guide the Risk Officers in their Department. Risk Officer in each Department / Branch is responsible for the identification, measurement, monitoring, and co-ordination of Risk Management activities in his / her Department and cascade the Risk Management initiatives within the team. Department risk limits are monitored through the functional / departmental risk appetite statements.

The Company has aligned its risk management practices with ISO 31000 standard on Risk Management and has been awarded a ''Statement of compliance'' in respect of the same by British Standards Institution (BSI). The Company''s Business Continuity and Information Security activities are certified to ISO 22301 (Standard on Business Continuity Management) and ISO 27001 (Standard on Information Security Management) respectively.

vii. Payments made to group entities from Policyholders Funds

Refer related party disclosure Point No 37.

viii. Any other matters, which have material impact on the insurer''s financial position

Nil

includes fees paid for quarterly limited review of financial statements

*In accordance with SEBI rules, the fees disclosed above has been reimbursed by the selling shareholders and hence does not reflect as charge in Company''s Profit and Loss account

24. Age-wise analysis for policyholders'' - unclaimed amount

In accordance with IRDAI Master Circular on Unclaimed amounts of policyholders dated July 25, 2017, the Company maintains a single segregated fund to manage all unclaimed amounts. The amount is invested in money market instruments, liquid mutual funds and fixed deposits of scheduled banks.

The amount in the unclaimed fund has been disclosed in schedule 12 as "Assets held for unclaimed amount of policyholders" along with "Income accrued on unclaimed fund". Investment income accruing to the fund is disclosed in the revenue account. Such investment income net of fund management charges is disclosed in schedule 4 "Benefits paid as "interest on unclaimed amounts".

i. As per IRDA guidelines, the details of the unclaimed amounts of the policyholders or insured''s are mentioned below:

* 36-120 months category includes amount of '' 8,271 thousands which is lying in Unclaimed Amounts for more than 120 months and is due for transfer to Senior Citizens'' Welfare Fund in accordance with IRDAI Master Circular (Unclaimed Amounts of Policyholders) dated July 25, 2017. The same has completed a period of 10 years post September 30, 2017 and is due for transfer to SCWF on or before March 01, 2019.

31. Participation in Joint Lenders Forum formed under Reserve Bank of India (RBI) Guidelines

The Company has not participated in any Joint Lenders Forum formed under RBI guidelines for loan accounts which could turn into potential NPAs.

33. Long term contracts

The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end the Company has reviewed and ensured that adequate provisions as required under any law/ accounting standard for material foreseeable losses on such long term contracts has been made in the financial statements.

For insurance contracts, actuarial valuation of liabilities for policies in force is done by the appointed actuary of the company. The assumptions used in valuation of liabilities for policies in force are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with IRDAI.

34. Interim Dividend

The Board at its meeting held on March 23, 2018 has declared an Interim Dividend of Rs, 2 per share. Accordingly, a provision of Rs, 2,407,153 thousands (including dividend distribution tax of Rs, 407,153 thousands) (previous year ended March 31, 2017: Rs, 1,805,365 including dividend distribution tax of Rs, 305,365 thousands) have been made towards interim dividend in the accounts for the year ended March 31, 2018.

B. Related parties and nature of relationship:

Sr. Nature of relationship Name of related party

No.

1 Holding Company State Bank of India

2 Joint Venture Partner BNP Paribas Cardif

3 Holding Company of Joint Venture Partner BNP Paribas

4 Fellow Subsidiaries SBI Capital Markets Ltd.

SBI DFHI Ltd.

SBI Funds Management Pvt. Ltd.

SBI CAPS Ventures Ltd.

SBI CAP Trustee Company Ltd.

SBI CAP (UK) Ltd.

SBI CAP (Singapore) Ltd.

SBI Cards & Payment Services Pvt. Ltd.

SBI Payment Services Pvt. Ltd.

SBI Global Factors Ltd.

SBICAP Securities Ltd.

SBI Pension Funds Pvt. Ltd.

SBI General Insurance Co. Ltd.

SBI Funds Management (International) Pvt. Ltd.

SBI Mutual Fund Trustee Company Pvt. Ltd.

SBI-SG Global Securities Services Pvt. Ltd.

State Bank of India (California)

SBI Canada Bank SBI (Mauritius) Ltd.

Commercial Bank of India Llc, Moscow PT Bank SBI Indonesia Nepal SBI Bank Ltd.

Bank SBI Botswana Ltd.

SBI Foundation

SBI Servicos Limitada, Brazil

SBI Infra Management Solutions Pvt Ltd

GE Capital Business Process Management Services Pvt.

Ltd.

State Bank of India (UK) Ltd

5 Significant Influence or Controlling SBI Life Insurance Company Limited Employee PF Trust ^Enterprise SBI Life Insurance Company Limited Employees Gratuity

Fund

6 Key Management Personnel Mr. Sanjeev Nautiyal - MD & CEO (inducted w.e.f.

10.03.2018)

Mr. Arijit Basu - MD & CEO (resigned w.e.f. 09.03.2018)

39. Segment reporting

In accordance with the Accounting regulations read with Accounting Standard - 17 on "Segment reporting" notified under Section 133 of the Companies Act, 2013, read together with Paragraph 7 of the Company (Accounts) Rules, 2014, further amended by Companies (Accounting Standards) Amendment Rules, 2016, life insurance companies are required to prepare Segmental Revenue Account and Segmental Balance Sheet. The Company''s business is segmented into traditional -par business, non-par business and unit-linked business. Since the Company has conducted business only in India, the same is considered as one geographical segment. The accounting policies used in segmental reporting are same as those used in the preparation of the financial statements.

(a) Segmental Revenue Account

The methodology for determining segmental revenue and expenses adopted in the current year is described below:

Premium income, commission, investment income and profit or loss on sale or disposal of investments is directly allocated to the respective segments to which they relate. Within the Non-Participating segment, investment income and profit or loss on sale or disposal of investments are directly allocated if a segregated investment portfolio is maintained. The remaining investment income and profit or loss on sale of investments is apportioned on the basis of the average policy liabilities in the individual business and the group business.

Operating expenses that are directly attributable and identifiable to the business segments are allocated on actual basis. Otheroperating expenses, which arenot directlyidentifiableand attributable, areal located after considering the following:

i. Cost centres identified by the Management

ii. Channels used for the business segments

iii. New business premium and renewal premium

iv. New lives added during the year

v. Total number of lives covered as at the end of the year

vi. New business sum assured

vii. Actuarial Liability

(b) Segmental Balance Sheet

I nvestments are effected from the respective funds and have been reflected accordingly. Fixed assets have been allocated to shareholders funds, net current assets have been directly allocated among shareholders, life business, pension business, group business, unit - linked business and variable insurance business segments. Other net current assets have been allocated to life business and pension business in the ratio of the respective policy liabilities as at the year end.

Within life business, certain assets and liabilities have been directly identified to the respective segments. Other assets and liabilities under Life business have been allocated in the ratio of the respective policy liabilities as at the year end.

Notes:-

(a) Expenses of Management = Operating Expenses Commission

(b) Policyholders'' Liabilities = Policy Liabilities Credit / (Debit) Fair Value Change Account Funds for Future Appropriation

Shareholders'' Funds = Share Capital Reserves and Surplus Credit / (Debit) Fair Value Change Account - Debit Balance in Profit and Loss Account Net Worth = Share Capital Reserves and Surplus Credit / ( Debit ) Fair Value Change Account - Debit Balance in Profit and Loss Account

(c) Capital Surplus = Share Capital Reserves and Surplus

Total Investments = Shareholders'' Investments Policyholders'' Investments

(d) Single Premium and Fully Paid-Up policies are not considered in above calculation. Group Business where persistency is measurable is included.

The ''Up to the Quarter'' Persistency Ratios are calculated using policies issued in March to February period of the relevant years.

(e) Single Premium and Fully Paid-Up policies are considered in above calculation. Group Business where persistency is measurable, is included. The ''Up to the Quarter'' Persistency Ratios are calculated using policies issued in March to February period of the relevant years.

---

Mar 31, 2017

Note 1:

Show cause notices issued by various Government Authorities are not considered as obligation. When demand notices are raised against such show cause notices and are disputed by the Company, these are classified as disputed obligations.

Note 2:

(a) IRDAI has issued directions under Section 34 (1) of the Insurance Act, 1938 to distribute the administrative charges paid to master policyholders amounting to '' 843,174 thousands (previous year ended March 31, 2016: Rs,843,174 thousands) vide order no. IRDA/Life/ORD/Misc/228/10/2012 dated October 5, 2012. The Company had filed an appeal against the said order with the Ministry of Finance, Government of India, who remanded the case back to IRDAI on November 4, 2015. IRDAI issued further directions dated January 11, 2017 reiterating the directions issued on October 5, 2012. The Company has filed an appeal against the said directions/ orders with the Securities Appellate Tribunal.

(b) IRDAI has issued directions under section 34 (1) of the Insurance Act, 1938 to refund the excess commission paid to corporate agents to the members or the beneficiaries amounting to Rs,2,752,948 thousands (previous year ended March 31, 2016: Rs,2,752,948 thousands) vide order no. IRDA/Life/ORD/Misc/083/03/2014 dated March 11, 2014. The Company has filed an appeal against the order with the Securities Appellate Tribunal.

2. Encumbrances on assets

The Assets of the company are free from any encumbrances as at March 31, 2017 except for:

3. Capital commitments

Commitments made and outstanding for loans and investment as at March 31, 2017 is Rs,860,415 thousands (previous year ended March 31, 2016: Rs,1,009,500 thousands). Estimated amount of contracts remaining to be executed on capital account, to the extent not provided for (net of advances) as at March 31, 2017 is Rs,325,684 thousands (previous year ended March 31, 2016: Rs,784,788 thousands).

4. Actuarial assumptions

The actuarial assumptions certified by the Appointed Actuary are as under:

a. In the actuarial valuation all the policies, which were in the books of the Company and where there is a liability as at March 31, 2017 have been taken into account. The portfolio consists of Participating, Non Participating and Unit-Linked segments.

''Participating'' segment is further classified in to the following Lines of Businesses (LoBs): Individual - Life - Participating, Individual - Pension - Participating, Group - Pension - Participating and Individual - VIP -Participating.

''Non-Participating'' segment is further classified in to the following LoBs: Individual - Life – Non Participating, Individual - Pension - Non-Participating, Group Savings - Non-Participating, Group One Year Renewable Group Term Assurance (OYRGTA) - Non-Participating, Group Other - Non-Participating, Annuity - Non-Participating (Individual and Group), Health - Non-Participating (Individual and Group), and VIP - Non-Participating (Individual and Group).

''Linked'' segment is further classified in to the following LoBs: Individual - Life - Linked, Group - Linked and Individual - Pension - Linked.

b. For policies which are likely to get cancelled during their "free look period", premium less stamp duty and medical expenses as per the policy contract need to be refunded. Adequate provision as at March 31, 2017 is kept for such policies.

c. The following parametric values are used to carry out the actuarial valuation:

For mortality assumption under life business ''Indian Assured Lives (2006-2008) Ultimate Mortality table'' and under general annuity business ''Mortality for Annuitants-LIC (1996-98) Ultimate Rates'' has been used. For Morbidity assumption, the Morbidity Tables provided by re-insurer has been used with suitable adjustment.

The interest rate for valuation lies in the range of 5.65% to 6.00% per annum as shown in the table below. While allocating expenses for the current year, the entire policyholders'' expenses have been allocated product-wise.

For fully paid-up and reduced paid-up policies, fixed expenses are considered same as for single premium policies.

An inflation rate of 5.50% per annum (previous year ended March 31, 2016: 5.50% per annum) has been assumed while estimating future expenses.

For participating products, the vested bonuses are those which were distributed by the Company consequent to the actuarial valuations carried out annually at the end of each financial year dated March 31, 2002 to March 31, 2016. Regarding bonus provisions for the current financial year and bonus provision for future years, the bonus rates have been assessed by carrying out Bonus Earning Capacity (BEC)/ asset share investigations and taking into consideration the policyholder''s reasonable expectations.

Margin for Adverse Deviation (MAD) has been separately provided, wherever applicable and required.

In addition to this, Incurred but Not Reported (IBNR) claims reserve is also provided wherever required.

The above parameters and the MAD provision have been observed to ensure prudence and are in accordance with the GN / APS issued by the Institute of Actuaries of India and in concurrence with the Regulations and circulars of IRDAI.

The Surplus emerged from Non-participating segment has been transferred to Profit & Loss Account for the year ended March 31, 2017 based on the recommendation of the Appointed Actuary and the necessary fund transfer will be made after the year end on the basis of Audited financials with required recommendations by the Appointed Actuary.

Funds for Future Appropriation

I n respect of Individual Unit Linked Policies, the Funds for Future Appropriation (FFA) is Nil as at 31^st March, 2017 since there are no such eligible policies (previous year ended March 31, 2016 - Rs,2,306 thousands).

5. Cost of guarantee

Provision of Rs,3,884,941 thousands (previous year ended March 31, 2016 - Rs,3,936,262 thousands) has also been made for the cost of guarantee under Individual unit linked policies with guarantee and provision of Rs,10,036 thousands (previous year ended March 31, 2016 - Rs,8,183 thousands) has also been made for the cost of guarantee under Group unit linked policies.

6. Policy liabilities

The non-linked policy liability after reinsurance of Rs,483,237,575 thousands as on March 31, 2017 (previous year ended March 31, 2016: Rs,396,341,699 thousands) includes the following non-unit reserve held for linked liabilities:

The total linked liabilities (excluding non-unit reserve) stands at Rs,445,730,325 thousands as on March 31, 2017 (previous year ended March 31, 2016: Rs,360,216,558 thousands).

8. Benefit payable

Total Benefits payable (i.e. claims and annuities outstanding) as at March 31, 2017, aggregate to Rs,1,648,212 thousands (previous year ended March 31, 2016: Rs,1,783,719 thousands). The outstanding balance disclosed under Schedule 13 is net of unclaimed amount of Rs,408,747 thousands (previous year ended March 31, 2016: Rs,164,717 thousands).

i. The claims settled and remaining unpaid for a period of more than 6 months on the Balance Sheet date (As certified by the Management).

Claims remain unpaid for greater than six months for want of necessary details.

ii. All the claims are paid or payable in India.

9. Investments

i. Investments have been made in accordance with the Insurance Act, 1938, and Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016, as amended from time to time.

ii. All investments of the Company are performing investments.

*No payments are overdue.

iv. As at March 31, 2017 the aggregate cost and market value of investments, which are valued at fair value was Rs,422,194,766 thousands (previous year ended March 31, 2016: Rs,329,500,809 thousands) and Rs,468,723,837 thousands (previous year ended March 31, 2016: Rs,355,920,479 thousands) respectively.

v. Equity shares lent under the Securities Lending and Borrowing scheme (SLB) continue to be recognized in the Balance Sheet as the Company retains all the associated risk and rewards of these securities. The Fair value of equity shares lent by the Company under SLB and outstanding as at March 31, 2017 is Rs,Nil (March 31, 2016 Rs,Nil). The equity shares lent during the year were from the unit linked portfolio.

1. The appointment and remuneration of managerial personnel is in accordance with the requirements of section 34A of the Insurance Act, 1938 and has been approved by the IRDAI.

2. The remuneration excludes leave encashment and leave travel allowance which would have been accrued in the books of or funded by State Bank of India.

3. Effective August 1, 2014 Mr. Arijit Basu is on deputation from State Bank of India as the Managing Director and CEO of the Company. IRDAI has accorded its approval to this appointment.

IRDAI (Obligations of insurers to rural and social sectors) Regulations, 2015 mandates the Company to cover 5% of the total business procured in the preceding financial year (in terms of lives) under the social sector.

13. Investments of funds and assets pertaining to policyholders'' liabilities a. Allocation of investments between policyholders'' funds and shareholders'' funds

Investments made out of the shareholders'' and policyholders'' funds are tracked from inception and income accordingly accounted for on the basis of records maintained. As and when necessary, transfers have been made from shareholders'' investments to policyholders'' investments. In respect of such transfers, the investment income is allocated from the date of transfer.

* including funds for future appropriation and fair value change account

14. Taxation

The Company carries on life insurance business and hence the provisions of Section 44 and the first schedule of Income Tax Act, 1961, are applicable for computation of profits and gains of its business. Provision for taxation for the year ended March 31, 2017 amounted to Rs,1,997,504 thousands (previous year ended March 31, 2016: Rs,1,660,281 thousands).

15. Operating lease commitments

(a) Assets taken on operating lease:

In accordance with Accounting Standard 19 on ''Leases'', the details of leasing arrangements entered into by the Company are as under:

The Company has entered into agreements in the nature of lease or leave and licence with different lessors or licensors for residential premises, office premises and motor vehicles. These are in the nature of operating lease. Some of these lease arrangements contain provisions for renewal and escalation. There are no restrictions imposed by lease arrangements nor are there any options given to the Company to purchase the properties and the rent is not determined based on any contingency.

(b) Assets given on operating lease:

The Company has entered into an agreement in the nature of leave and licence for leased out some portion of office premises. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency.

16. Earnings per share

In accordance with Accounting Standard 20 on ''Earning per share'', basic earnings per share are calculated by dividing the net profit or loss in the shareholders'' account by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(c) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

(iii) Provident Fund

The rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared for Employees'' Provident Fund by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Based on an actuarial valuation conducted by an independent actuary, there is no deficiency as at the Balance Sheet date.

Note: The figures in bracket, if any, indicates reversal of impairment loss earlier recognized in Revenue or Profit and Loss Account.

17. Micro, Small and Medium Enterprises Development Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises.

18. Additional disclosure requirements as per Corporate Governance Guidelines

i. Quantitative and qualitative information on the insurer''s financial and operating ratios, namely, incurred claim, commission and expenses ratios:

Refer summary of financial statement and ratios.

ii. Actual solvency margin details vis-a-vis the required solvency margin

The actual solvency margin of the Company as on March 31, 2017 stands at 2.04 times (previous year ended March 31, 2016: 2.12 times) as against regulatory requirement of 1.50. There has been no capital infusion after FY 2007-08.

iii. Persistency ratio

The persistency ratio (13^th month) for the year ended March 31, 2017 is 81.07% (previous year ended March 31, 2016 is 80.69%) based on premium amount and 73.34% (previous year ended March 31, 2016 is 72.69%) based on number of policies.

iv. Financial performance including growth rate and current financial position of the insurer

Refer summary of financial statement and ratios.

v. A description of the risk management architecture

The Board has the ultimate responsibility for overseeing the management of risk within the Company. The Risk profile of the Company is reported to the Board by the Risk Management Committee of the Board (RMC-B) from time to time. The RMC-B is responsible for overseeing the Company''s risk management program and for ensuring that significant risks to the Company are reported to the Board on a timely basis

and apprise the Board of the various risk management strategies being adopted. The Company''s Risk Appetite statement is reviewed by the Board so as to ensure that the business of the Company is carried out within the set risk limits.

The RMC-B is supported by Risk Management Committee of the Executives (RMC-E) and the Asset Liability Committee (ALCO). The RMC-E oversees the operational risk activities and the ALCO monitors insurance and investment risk portfolio. RMC-E is convened by Head-Risk Management & Fraud Monitoring and consists of the Managing Director & Chief Executive Officer, Deputy Chief Executive Officer, Executive Director - Actuarial & Risk Management, Executive Directors - Marketing, Executive Director - Operations

& IT, Appointed Actuary, Chief Officer - Business Strategy, Head - HR & Administration, Chief Audit Officer, Chief Financial Officer, Chief Operating Officer, Chief Information Officer, Chief Officer Investments. ALCO is chaired by Managing Director & Chief Executive Officer and consists of Deputy Chief Executive Officer, Executive Director - Actuarial & Risk Management, Head Pricing, Head Valuation, Head - ALM, Chief Officer- Business Strategy, Chief officer- Investments, Head Debt, Head Equity and Chief Financial Officer. ALCO is convened by the Appointed Actuary.

The Head - Risk Management & Fraud Monitoring is responsible and accountable for ensuring that a risk management program is established, implemented and maintained in accordance with Risk Management Policy so that risks are managed to an acceptable level. Head - Risk Management & Fraud Monitoring reports to the MD & CEO of the Company, through the Executive Director - Actuarial & Risk Management and maintains functional relationships with all Departmental Risk Officers.

The Departmental / Regional Heads are responsible for the management of risk in their areas of control and guide the Risk Officers in their Department. Risk Officer in each Department / Branch is responsible for the identification, measurement, monitoring and co-ordination of Risk Management activities in his / her Department and cascade the Risk Management initiatives within the team. Department risk limits are monitored through the functional / departmental risk appetite statements.

vii. Payments made to group entities from Policyholders Funds

Refer related party disclosure Point No 36.

viii. Any other matters, which have material impact on the insurer''s financial position

Nil

19. Contribution made by the shareholders'' to the policyholders'' account

The contribution of Rs,626,829 thousands (previous year ended March 31, 2016: Rs,930,685 thousands) made by the shareholders'' to the policyholders'' account is irreversible in nature, and shall not be recouped to the shareholder''s account at any point of time.

20. Foreign Exchange gain/ (loss)

The amount of foreign exchange gain/ (loss) in Revenue Account for the year ended March 31, 2017 is Rs,(1) thousand (previous year ended March 31, 2016: Rs,(1) thousands) and in Profit & Loss Account for the year ended March 31, 2017 is Rs,(5,245) thousand (previous year ended March 31, 2016: Rs,Nil).

21. Participation in Joint Lenders Forum formed under Reserve Bank of India (RBI) Guidelines

The Company has not participated in any Joint Lenders Forum formed under RBI guidelines for loan accounts which could turn into potential NPAs.

22. Interim Dividend

The Board at its meeting held on March 22, 2017 has declared an Interim Dividend of Rs,1.5 per share. Accordingly, a provision of Rs,1,805,365 thousands (including dividend distribution tax of Rs,305,365 thousands) (previous year ended March 31, 2016: Rs,1,444,292 including dividend distribution tax of Rs,244,292 thousands) have been made towards interim dividend in the accounts for the year ended March 31, 2017.

23. Corporate Social Responsibility

The Company has provided Rs,128,449 thousands (previous year ended March 31, 2016 Rs,99,431 thousands) towards Corporate Social Responsibility activities mentioned in Schedule VII of The Companies Act, 2013.

24. Disclosure on Specified Bank Notes (SBN)

In accordance with proviso (2) of sub-section (1) of Section 129 of Companies Act, 2013, the Company is not required to present its financial statements as per Schedule III of the Companies Act, 2013. Hence, the disclosure requirement regarding the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30, 2016 as envisaged in notification G.S.R. 308(E) dated March 30, 2017 is not applicable to the Company.

25. Segment reporting

In accordance with the Accounting regulations read with Accounting Standard - 17 on "Segment reporting" notified under Section 133 of the Companies Act, 2013, read together with Paragraph 7 of the Company (Accounts) Rules,

2014, further amended by Companies (Accounting Standards) Amendment Rules, 2016, life insurance companies are required to prepare Segmental Revenue Account and Segmental Balance Sheet. The Company''s business is segmented into traditional -par business, non-par business and unit-linked business. Since the Company has conducted business only in India, the same is considered as one geographical segment. The accounting policies used in segmental reporting are same as those used in the preparation of the financial statements.

(a) Segmental Revenue Account

The methodology for determining segmental revenue and expenses adopted in the current year is described below:

Premium income, commission, investment income and profit or loss on sale or disposal of investments is directly allocated to the respective segments to which they relate. Within the Non-Participating segment, investment income and profit or loss on sale or disposal of investments are directly allocated if a segregated investment portfolio is maintained. The remaining investment income and profit or loss on sale of investments is apportioned on the basis of the average policy liabilities in the individual business and the group business.

Operating expenses that are directly attributable and identifiable to the business segments are allocated on actual basis. Other operating expenses, which are not directly identifiable and attributable, are allocated after considering the following:

i. Cost centres identified by the Management

ii. Channels used for the business segments

iii. New business premium and renewal premium

iv. New lives added during the year

v. Total number of lives covered as at the end of the year

vi. New business sum assured

vii. Actuarial Liability

(b) Segmental Balance Sheet

Investments are effected from the respective funds and have been reflected accordingly. Fixed assets have been allocated to shareholders funds, net current assets have been directly allocated among shareholders, life business, pension business, group gratuity and unit - linked business segments. Other net current assets have been allocated to life business and pension business in the ratio of the respective policy liabilities as at the year end.

Within life business, certain assets and liabilities have been directly identified to the respective segments. Other assets and liabilities under Life business have been allocated in the ratio of the respective policy liabilities as at the year end.

---

Mar 31, 2016

Note 1:

(a) Show cause notices issued by various Government Authorities are not considered as obligation. When demand notices are raised against such show cause notices and are disputed by the Company, these are classified as disputed obligations.

(b) The statutory demands are against assessment/appellate orders received by the Company from the Tax Authorities. The Company has filed appeals against the said assessment/ appellate orders with the higher appellate authorities and has been advised by the experts that the grounds of appeal are well supported in law in view of which the Company does not expect a future liability.

Note 2:

IRDAI has issued directions under Section 34 (1) of the Insurance Act, 1938; to distribute the administrative charges paid to master policyholders vide order no. IRDA/ Life/ ORD/ Misc/ 228/ 10/ 2012 dated October 5, 2012 amounting to Rs, 843,174 thousands (previous year ended March 31, 2015: Rs, 843,174 thousands) and to refund the excess commission paid to corporate agents vide order no. IRDA/ Life/ ORD/ Misc/ 083/ 03/ 2014 dated March 11, 2014 amounting to Rs, 2,752,948 thousands (previous year ended March 31, 2015: Rs, 2,752,948 thousands) respectively to the members or the beneficiaries. The Company has filed appeals against the said directions/ orders with the Appellate Authorities [i.e. Ministry of Finance, Government of India and Securities Appellate Tribunal (SAT)].

3. Capital commitments

Commitments made and outstanding for loans and investment as at March 31, 2016 is Rs, 1,009,500 thousands (previous year ended March 31, 2015: Rs, 65,000 thousands). Estimated amount of contracts remaining to be executed on capital account, to the extent not provided for (net of advances) as at March 31, 2016 is Rs, 784,788 thousands (previous year ended March 31, 2015: Rs, 428,000 thousands).

4. Actuarial assumptions

The actuarial assumptions certified by the Appointed Actuary are as under:

a. In the actuarial valuation all the policies, which were in the books of the Company and where there is a liability as at March 31, 2016, have been taken into account. The portfolio consists of Participating, Non-Participating and Unit-Linked segments.

''Participating'' segment is further classified into the following Lines of Businesses (LoBs): Individual - Life - Participating, Individual - Pension - Participating, Group - Pension - Participating and Individual - VIP -Participating.

''Non-Participating'' segment is further classified into the following LoBs: Individual - Life - Non-Participating, Individual - Pension - Non-Participating, Group Savings - Non-Participating, Group One Year Renewable Group Term Assurance (OYRGTA) - Non-Participating, Group Other - Non-Participating, Annuity - Non-Participating (Individual and Group), Health - Non-Participating (Individual and Group), and VIP - Non-Participating (Individual and Group).

''Linked'' segment is further classified into the following LoBs: Individual - Life - Linked, Group - Linked and Individual - Pension - Linked.

b. For policies which are likely to get cancelled during their "free look period", premium less stamp duty and medical expenses as per the policy contract need to be refunded. Adequate provision as at March 31, 2016 is kept for such policies.

c. The following parametric values are used to carry out the actuarial valuation:

For mortality assumption under life business ''Indian Assured Lives (2006-2008) Ultimate Mortality table'' and under general annuity business ''Mortality for Annuitants-LIC (1996-98) Ultimate Rates'' has been used. For Morbidity assumption, the Morbidity Tables provided by re-insurer has been used with suitable adjustment.

The interest rate for valuation lies in the range of 5.65% to 6.05% per annum as shown in the table below. While allocating expenses for the current year, the entire policyholders'' expenses have been allocated product-wise.

An inflation rate of 5.50% per annum (previous year ended March 31, 2015: 5.75% per annum) has been assumed while estimating future expenses.

For participating products, the vested bonuses are those which were distributed by the Company consequent to the actuarial valuations carried out annually at the end of each financial year dated March 31, 2002 to March 31, 2015. Regarding bonus provisions for the current financial year and bonus provision for future years, the bonus rates have been assessed by carrying out Bonus Earning Capacity (BEC)/ asset share investigations and taking into consideration the policyholder''s reasonable expectations.

Margin for Adverse Deviation (MAD) has been separately provided, wherever applicable and required.

In addition to this, Incurred but Not Reported (IBNR) claims reserve is also provided wherever required.

The above parameters and the MAD provision have been observed to ensure prudence and are in accordance with the GN / APS issued by the Institute of Actuaries of India and in concurrence with the Regulations and circulars of IRDAI.

The Surplus emerged from Non-participating segment has been transferred to Profit & Loss Account for the year ended March 31, 2016 based on the recommendation of the Appointed Actuary and the necessary fund transfer will be made after the year end on the basis of Audited financials with required recommendations by the Appointed Actuary.

Funds for Future Appropriation

In respect of Individual Unit Linked Policies, in addition to Policy Liabilities an amount of '' 2,306 thousands (previous year ended March 31, 2015 - '' 14,626 thousands) is being kept as a separate item as Fund for Future Appropriation. This amount pertains to the policies satisfying following conditions, assuming that they may not be revived in future:

i. Policy is lapsed within first Policy Year

ii. Policy has not acquired surrender value

iii. Lapsed Policy under which units are still invested

The amount will be transferred to share holders only after the revival period for the policy expires.

5. Cost of guarantee

Provision of '' 3,936,262 thousands (previous year ended March 31, 2015 - '' 3,220,675 thousands) has also been made for the cost of guarantee under Individual unit linked policies with guarantee and provision of '' 8,183 thousands (previous year ended March 31, 2015 - '' 6,767 thousands) has also been made for the cost of guarantee under Group unit linked policies.

6. Policy liabilities

The non-linked policy liability after reinsurance of Rs, 396,341,699 thousands as on March 31, 2016 (previous year ended March 31, 2015: Rs, 328,603,573 thousands) includes the following non-unit reserve held for linked liabilities:

The total linked liabilities (excluding non-unit reserve) stands at Rs, 360,216,558 thousands as on March 31, 2016 (previous year ended March 31, 2015: Rs, 348,086,091 thousands).

8. Benefit payable

Total Benefits payable (i.e. claims and annuities outstanding) as at March 31, 2016 aggregate to Rs, 1,783,719 thousands (previous year ended March 31, 2015: Rs, 1,382,080 thousands). The outstanding balance disclosed under Schedule 13 is net of unclaimed amount Rs, 164,717 thousands (previous year ended March 31, 2015: Rs, Nil).

i. The claims settled and remaining unpaid for a period of more than 6 months on the Balance Sheet date (As certified by the Management).

Claims remain unpaid for greater than six months for want of necessary details.

ii. All the claims are paid or payable in India.

9. Investments

i. Investments have been made in accordance with the Insurance Act, 1938 and Insurance Regulatory and Development Authority (Investments) Regulations, 2000, as amended from time to time.

ii. All investments of the Company are performing investments.

* No payments are overdue.

iv. As at March 31, 2016 the aggregate cost and market value of investments, which are valued at fair value was Rs, 329,500,809 thousands (previous year ended March 31, 2015: Rs, 253,149,612 thousands) and Rs, 355,920,479 thousands (previous year ended March 31, 2015: Rs, 311,432,519 thousands) respectively.

v. Equity shares lent under the Securities Lending and Borrowing scheme (SLB) continue to be recognized in the Balance Sheet as the Company retains all the associated risk and rewards of these securities. The Fair value of equity shares lent by the Company under SLB and outstanding as at March 31, 2016 is Rs, Nil (March 31, 2015 Rs, Nil). The equity shares lent during the year were from the unit linked portfolio.

1. The appointment and remuneration of managerial personnel is in accordance with the requirements of section 34A of the Insurance Act, 1938 and has been approved by the IRDAI.

2. The remuneration excludes leave encashment and leave travel allowance which would have been accrued in the books of or funded by State Bank of India.

3. Effective August 1, 2014 Mr. Arijit Basu was deputed from State Bank of India as the Managing Director and CEO of the Company. IRDAI has accorded its approval to this appointment.

13. Investments of funds and assets pertaining to policyholders'' liabilities

a. Allocation of investments between policyholders'' funds and shareholders'' funds

Investments made out of the shareholders'' and policyholders'' funds are tracked from inception and income accordingly accounted for on the basis of records maintained. As and when necessary, transfers have been made from shareholders'' investments to policyholders'' investments. In respect of such transfers, the investment income is allocated from the date of transfer.

* including funds for future appropriation and fair value change account

14. Taxation

The Company carries on life insurance business and hence the provisions of Section 44 and the first schedule of Income Tax Act, 1961, are applicable for computation of profits and gains of its business. Provision for taxation for the year ended March 31, 2016 amounted to Rs, 1,660,281 thousands (previous year ended March 31, 2015: Rs, 1,236,564 thousands).

15. Operating lease commitments

(a) Assets taken on operating lease:

In accordance with Accounting Standard 19 on ''Leases'', the details of leasing arrangements entered into by the Company are as under:

The Company has entered into agreements in the nature of lease or leave and license with different lessors or licensors for residential premises, office premises and motor vehicles. These are in the nature of operating lease. Some of these lease arrangements contain provisions for renewal and escalation. There are no restrictions imposed by lease arrangements nor are there any options given to the Company to purchase the properties and the rent is not determined based on any contingency.

(b) Assets given on operating lease:

The Company has entered into an agreement in the nature of leave and licence for leased out some portion of office premises. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency.

16. Earnings per share

In accordance with Accounting Standard 20 on ''Earning per share'', basic earnings per share are calculated by dividing the net profit or loss in the shareholders'' account by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(a) Discount rate is based on benchmark rate available on Government Securities for the estimated term of the obligations.

(b) The expected rate of return on plan assets is based on the average long-term rate of return expected on investments of the Fund during the estimated term of the obligations.

(c) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

(iii) Provident Fund

The rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared for Employees'' Provident Fund by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Based on an actuarial valuation conducted by an independent actuary, there is no deficiency as at the Balance Sheet date.

Note: The figures in bracket, if any, indicates reversal of impairment loss earlier recognized in Revenue or Profit and Loss Account.

20. Provision for Standard assets for debt portfolio

In accordance with the ''Guidelines on Prudential norms for income recognition, Asset classification, Provisioning and other related matters in respect of Debt portfolio'' as specified by IRDAI vide the Master Circular dated December 11, 2013, provision for standard assets at 0.40% of the value of the asset amounting to Rs, 4,750 thousands (previous year Rs, Nil) has been recognized in the Revenue Account.

21. Micro, Small and Medium Enterprises Development Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises.

22. Additional disclosure requirements as per Corporate Governance Guidelines

i. Quantitative and qualitative information on the insurer''s financial and operating ratios, namely, incurred claim, commission and expenses ratios:

Refer summary of financial statement and ratios.

ii. Actual solvency margin details vis-a-vis the required solvency margin

The actual solvency margin of the Company as on March 31, 2016 stands at 2.12 times (previous year ended March 31, 2015: 2.16 times) as against regulatory requirement of 1.50. Further, there has been no capital infusion after FY 2007-08.

iii. Policy lapse ratio

The policy lapsed ratio (13th month) for the year ended March 31, 2016 is 22.96% (previous year ended March 31, 2015 is 26.40%) based on premium amount and 32.57% (previous year ended March 31, 2015 is 31.59%) based on number of policies. These ratios work out to 22.33% by premium and 30.06% by number of policies, if group business and rural business are excluded.

iv. Financial performance including growth rate and current financial position of the insurer Refer summary of financial statement and ratios.

v. A description of the risk management architecture

The Board has the ultimate responsibility for overseeing the management of risk within the Company. The Risk profile of the Company is reported to the Board by the Risk Management Committee of the Board (RMC-B) from time to time. The RMC-B is responsible for overseeing the Company''s risk management program and for ensuring that significant risks to the Company are reported to the Board on a timely basis and apprise the Board of the various risk management strategies being adopted. The Company''s Risk Appetite statement is reviewed by the Board so as to ensure that the business of the Company is carried out within the set risk limits.

The RMC-B is supported by Risk Management Committee of the Executives (RMC-E) and the Asset Liability Committee (ALCO). The RMC-E oversees the operational risk activities and the ALCO monitors insurance and investment risk portfolio. RMC-E is convened by Head-Risk Management & Fraud Monitoring and consists of the Managing Director & Chief Executive Officer, Deputy Chief Executive Officer, Executive Director - Actuarial & Risk Management, Executive Directors - Marketing, Executive Director - Operations & IT, Appointed Actuary, Chief Officer - Business Strategy, Head - HR & Administration, Chief Audit Officer, Chief Financial Officer, Chief Operating Officer, Chief Information Officer and Head - Sales Quality & CFIC. ALCO is chaired by Managing Director & Chief Executive Officer and consists of Deputy Chief Executive Officer, Executive Director - Actuarial & Risk Management, Head Pricing, Head Valuation, Head - ALM, Chief Officer - Business Strategy Investments, Head of Investments, Head Debt, Head Equity, Chief Financial Officer and Head Risk Management & Fraud Monitoring. ALCO is convened by the Appointed Actuary.

The Head - Risk Management & Fraud Monitoring is responsible and accountable for ensuring that a risk management program is established, implemented and maintained in accordance with Risk Management Policy so that risks are managed to an acceptable level. Head - Risk Management & Fraud Monitoring reports to the MD & CEO of the Company, through the Executive Director - Actuarial & Risk Management and maintains functional relationships with all Departmental Risk Officers.

The Departmental / Regional Heads are responsible for the management of risk in their areas of control and guide the Risk Officers in their Department. Risk Officer in each Department / Branch is responsible for the identification, measurement, monitoring, co-ordination of Risk Management activities in his / her Department and cascade the Risk Management initiatives within the team. Department risk limits are monitored through the functional / departmental risk appetite statements.

30. Interim Dividend

The Board at its meeting held on March 28, 2016 has declared an Interim Dividend of Rs, 1.20 per share. Accordingly, a provision of Rs, 1,444,292 thousands (including dividend distribution tax of Rs, 244,292 thousands) (previous year ended March 31, 2015: Rs, 1,439,929 including dividend distribution tax of Rs, 239,929 thousands) have been made towards interim dividend in the accounts for the year ended March 31, 2016.

Pursuant to Guidance Note on Accounting for Expenditure on Corporate Social Responsibility activities issued by Institute of Chartered Accountants of India, expenditure on Corporate Social Responsibility has been shown under Profit and Loss Account.

32. Change in Accounting Policy during the year

Effective this year, the Company has changed its method of providing depreciation on fixed assets from ''Written Down Value'' (WDV) Method to ''Straight Line'' Method (SLM) in respect of all assets other than information technology equipments, servers & networks and leasehold improvements, which are already being depreciated on SLM. Consequent to the change, the Company has reversed Rs, 227,236 thousands in the Revenue Account and Rs, 42,199 thousands in Profit and Loss Account representing the excess depreciation charged till March 31, 2015 with a corresponding increase in the net block of fixed assets. Due to aforesaid change, the depreciation for the current year is higher by Rs, 46,570 thousands in the Revenue Account and lower by Rs, 3,418 thousands in Profit and Loss Account.

35. ''Net receivable to Unit linked Funds'' in Schedule 8B Rs, 4,723,057 thousands as on March 31, 2016 (previous year ended March 31, 2015 Rs, 4,151,646 thousands) represents unitization pending for investment in Unit linked Funds.

The corresponding ''Receivable from Unit linked Funds'' Rs,2,050,708 thousands as on March 31, 2016 (previous year ended March 31, 2015 Rs,1,120,257 thousands) and ''Payable to Unit linked Fund'' Rs, 6,773,765 thousands as on March

31, 2016 (previous year ended March 31, 2015 Rs,5,271,903 thousands) has been reported in schedule 12 and schedule 13 respectively.

B. Related parties and nature of relationship:

Sr. Nature of relationship Name of related party

No.___

1. Holding Company State Bank of India

2. Joint Venture Partner BNP Paribas Cardif

3. Holding Company of Joint Venture Partner BNP Paribas

4. Fellow Subsidiaries State Bank of Bikaner & Jaipur

State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore SBI Capital Markets Ltd.

SBI DFHI Ltd.

SBI Funds Management (Pvt.) Ltd.

SBI CAPS Ventures Ltd.

SBI CAP Trustee Company Ltd.

SBI CAP (UK) Ltd.

SBI CAP (Singapore) Ltd.

SBI Cards & Payment Services Pvt. Ltd.

SBI Payment Services Pvt. Ltd.

SBI Global Factors Ltd.

SBICAP Securities Ltd.

SBI Pension Funds Pvt. Ltd.

SBI General Insurance Co. Ltd.

SBI Funds Management ( International) Pvt. Ltd.

SBI Mutual Fund Trustee Company Pvt. Ltd.

SBI-SG Global Securities Services Pvt. Ltd.

State Bank of India (California)

SBI Canada Bank SBI (Mauritius) Ltd.

Commercial Bank of India Llc, Moscow PT Bank SBI Indonesia Nepal SBI Bank Ltd.

Bank SBI Botswana Ltd.

SBI Foundation

SBI Servicos Limitada, Brazil

5. Significant Influence or Controlling Enterprise SBI Life Insurance Company Limited Employee PF Trust

SBI Life Insurance Company Limited Employees Gratuity Fund

6. Key Management Personnel Mr. Arijit Basu - Managing Director & CEO

(Inducted w.e.f. August 1, 2014)

38. Segment reporting

In accordance withthe Accounting regulations read with Accounting Standard - 17 on "Segment reporting" notified under Section 133 of the Companies Act, 2013, read together with Paragraph 7 of the Company (Accounts) Rules,

2014, life insurance companies are required to prepare Segmental Revenue Account and Segmental Balance Sheet. The Company''s business is segmented into traditional -par business, non-par business and unit-linked business. Since the Company has conducted business only in India, the same is considered as one geographical segment. The accounting policies used in segmental reporting are same as those used in the preparation of the financial statements.

(a) Segmental Revenue Account

The methodology for determining segmental revenue and expenses adopted in the current year is described below:

Premium income, commission, investment income and profit or loss on sale or disposal of investments is directly allocated to the respective segments to which they relate. Within the Non-Participating segment, investment income and profit or loss on sale or disposal of investments are directly allocated if a segregated investment portfolio is maintained. The remaining investment income and profit or loss on sale of investments are apportioned on the basis of the average policy liabilities in the individual business and the group business.

Operating expenses that are directly attributable and identifiable to the business segments are allocated on actual basis. Other operating expenses, which are not directly identifiable and attributable, are allocated after considering the following:

i. Channels used for the business segments

ii. Cost centres identified by the Management

iii. Gross premium, new business premium and renewal premium

iv. New lives added during the year

v. Total number of lives covered as at the end of the year

vi. Average number of employees in the Company

(b) Segmental Balance Sheet

Investments are effected from the respective funds and have been reflected accordingly. Fixed assets have been allocated to shareholders funds, net current assets have been directly allocated among shareholders, life business, pension business, group gratuity and unit - linked business segments. Other net current assets have been allocated to life business and pension business in the ratio of the respective policy liabilities as at the year end.

Within life business, certain assets and liabilities have been directly identified to the respective segments. Other assets and liabilities under Life business have been allocated in the ratio of the respective policy liabilities as at the year end.

# Net of reinsurance

@ Includes the effect of gains / losses on sale of investments Notes:-

(a) Total Funds under Policyholders'' Account = Credit / (Debit) Fair Value Change Account Policyholders'' Liabilities Insurance Reserves

(b) Yield on Policyholders'' Investments = Income from Policyholders'' Investments / Total Policyholders'' Investments

(c) Total Funds = Share Capital Reserves and Surplus Credit / (Debit) Fair Value Change Account - Debit Balance in Profit and Loss Account

(d) Yield on Shareholders'' Investments = Total Income under Shareholders'' Account / Total Shareholders'' Investments

(e) Yield on total investments = (Income from Policyholders'' Investments Total Income under Shareholders'' Account) / (Total Shareholders'' Investments Total Policyholders'' Investments)

(f) Net Worth = Share Capital Reserves and Surplus Credit / (Debit) Fair Value Change Account - Debit Balance in Profit and Loss Account

(g) Total Assets = Total Application of Funds - Debit Balance in Profit and Loss Account

Notes:-

(a) Expenses of Management = Operating Expenses Commission

(b) Policyholders'' Liabilities = Policy Liabilities Credit / (Debit) Fair Value Change Account Funds for Future Appropriation

Shareholders'' Funds = Share Capital Reserves and Surplus Credit / (Debit) Fair Value Change Account - Debit Balance in Profit and Loss Account

Net Worth = Share Capital Reserves and Surplus Credit / (Debit) Fair Value Change Account - Debit Balance in Profit and Loss Account

(c) Capital Surplus = Share Capital Reserves and Surplus

Total Investments = Shareholders'' Investments Policyholders'' Investments

(d) Persistency calculated on the data as at 31/03/2016

---

Mar 31, 2015

Note 1:

IRDAI has issued directions under Section 34 (1) of the Insurance Act, 1938, to distribute the administrative charges paid to master policyholders vide order no. IRDA/Life/ORD/Misc/228/10/2012 dated October 5, 2012 amounting to '' 843,174 thousands (previous year ended March 31, 2014: '' 843,174 thousands) and to refund the excess commission paid to corporate agents vide order no. IRDA/Life/ORD/Misc/083/03/2014 dated March 11, 2014 amounting to '' 2,752,948 thousands (previous year ended March 31, 2014: '' 2,752,948 thousands) respectively to the members or the beneficiaries. The Company has filed appeals against the said directions/orders with the Appellate Authorities [i.e. Ministry of Finance, Government of India and Securities Appellate Tribunal (SAT)].

2. Encumbrances on assets

There are no encumbrances on the assets of the Company, within and outside India, as at the Balance Sheet date.

3. Capital commitments

Commitments made and outstanding for loans and investment as at March 31, 2015 is '' 65,000 thousands (previous year ended March 31, 2014: '' NIL). Estimated amount of contracts remaining to be executed on capital account, to the extent not provided for (net of advances) as at March 31, 2015 is '' 428,000 thousands (previous year ended March 31, 2014: '' 19,715 thousands).

4. Actuarial assumptions

The actuarial assumptions certified by the Appointed Actuary are as under:

a. In the actuarial valuation all the policies, which were in the books of the Company and where there is a liability as at March 31, 2015, have been taken into account. The portfolio consists of Participating, Non-Participating and Unit-Linked segments.

''Participating'' segment is further classified in to the following Lines of Businesses (LoBs): Individual - Life - Participating, Individual - Pension - Participating, Group - Pension - Participating and Individual - VIP - Participating.

''Non-Participating'' segment is further classified in to the following LoBs: Individual - Life - Non-Participating, Individual

- Pension - Non-Participating, Group Savings - Non-Participating, Group One Year Renewable Group Term Assurance (OYRGTA) - Non-Participating, Group Other - Non-Participating, Annuity - Non-Participating (Individual and Group), Health - Non-Participating (Individual and Group), and Group - VIP - Non-Participating.

''Linked'' segment is further classified in to the following LoBs: Individual - Life - Linked, Group - Linked and Individual

- Pension - Linked.

b. For policies which are likely to cancel during their "free look period", premium less stamp duty and medical expenses as per the policy contract need to be refunded. Adequate provision as at March 31, 2015 is kept for such policies, taking into account the probability of "free look cancellation".

c. The following parametric values are used to carry out the actuarial valuation:

For mortality assumption under life business ''Indian Assured Lives (2006-2008) Ultimate Mortality table'' and under general annuity business ''Mortality for Annuitants-LIC (1996-98) Ultimate Rates'' has been used. For Morbidity assumption, the Morbidity Tables provided by re-insurer have been used.

An inflation rate of 5.75% per annum (previous year ended March 31, 2014: 5.75% per annum) has been assumed while estimating future expenses.

For participating products, the vested bonuses are those which were distributed by the Company consequent to the actuarial valuations carried out annually at the end of each financial year dated March 31, 2002 to March 31, 2014. Regarding bonus provisions for the current financial year and bonus provision for future years, the bonus rates have been assessed by carrying out Bonus Earning Capacity (BEC)/ asset share investigations and taking into consideration the policyholder''s reasonable expectations.

Margin for Adverse Deviation (MAD) has been separately provided, wherever applicable and required.

In addition to this, Incurred but Not Reported (IBNR) claims reserve is also provided for some of the individual and group products.

The above parameters and the MAD provision have been observed to ensure prudence and are in accordance with the GN / APS issued by the Institute of Actuaries of India and in concurrence with the Regulations and circulars of Insurance Regulatory and Development Authority of India.

The Surplus emerged from Non-participating segment has been transferred to Profit & Loss Account for the year ended March 31, 2015 based on the recommendation of the Appointed Actuary and the necessary fund transfer will be made after the year end on the basis of Audited financials with required recommendations by the Appointed Actuary.

Funds for Future Appropriation

In respect of Individual Unit Linked Policies, in addition to Policy Liabilities an amount of '' 14,626 thousands (previous year ended March 31, 2014 - Rs, 74,262 thousands) is being kept as a separate item as Fund for Future Appropriation. This amount pertains to the policies satisfying following conditions, assuming that they may not be revived in future:

i. Policy is lapsed within first Policy Year

ii. Policy has not acquired surrender value

iii. Policy under which units are still invested

The amount will be transferred to share holders only after the revival period for the policy expires.

5. Cost of guarantee

Provision of Rs, 3,220,675 thousands (previous year ended March 31, 2014 - Rs, 2,233,267 thousands) has also been made for the cost of guarantee under Individual unit linked policies with guarantee and provision of Rs, 6,767 thousands (previous year ended March 31, 2014 - Rs, 5,247 thousands) has also been made for the cost of guarantee under Group unit linked policies.

6. Policy liabilities

The non-linked policy liability of Rs, 328,603,573 thousands as on March 31, 2015 (previous year ended March 31, 2014: Rs, 267,950,403 thousands) includes the following non-unit reserve held for linked liabilities:

The total linked liabilities (excluding non-unit reserve) stands at Rs, 348,086,091 thousands as on March 31, 2015 (previous year ended March 31, 2014: Rs, 285,898,494 thousands).

8. Benefit payable

Total Benefits payable (i.e. claims and annuities outstanding) as at March 31, 2015 aggregate to Rs, 1,382,080 thousands (previous year ended March 31, 2014: Rs, 1,456,589 thousands). The outstanding balance disclosed under Schedule 13 is net of unclaimed amount Rs, 892,231 thousands (previous year ended March 31, 2014: Rs, 1,048,480 thousands).

i. The claims settled and remaining unpaid for a period of more than 6 months on the Balance Sheet date (As certified by the Management).

Claims remain unpaid for greater than six months for want of necessary details.

ii. All the claims are paid or payable in India.

9. Investments

i. Investments have been made in accordance with the Insurance Act, 1938 and Insurance Regulatory and Development Authority (Investments) Regulations, 2000, as amended from time to time.

ii. All investments of the Company are performing investments.

* No payments are overdue.

iv. As at March 31, 2015 the aggregate cost and market value of investments, which are valued at fair value was Rs, 253,149,612 thousands (previous year ended March 31, 2014: Rs, 242,253,334 thousands) and Rs, 311,432,519 thousands (previous year ended March 31, 2014: Rs, 279,860,602 thousands) respectively.

v. As at March 31, 2015, Government securities with face value of 1,000,000 thousands (previous year ended March 31, 2014: Rs, 1,300,000 thousands) has been kept with Clearing Corporation of India Limited in security guarantee fund towards margin requirements.

vi. As at March 31, 2015, fixed deposit with book value of Rs, 250,100 thousands (previous year ended March 31, 2014: Rs, 250,100 thousands) has been kept with bank towards margin requirement for equity trades at National Stock Exchange and Bombay Stock Exchange.

vii. Equity shares lent under the Securities Lending and Borrowing scheme (SLB) continue to be recognized in the Balance Sheet as the Company retains all the associated risk and rewards of these securities. The Fair value of equity shares lent by the Company under SLB and outstanding as at March 31, 2015 is Rs, NIL (March 31, 2014 Rs, Nil). The equity shares lent during the year were from the unit linked portfolio.

Notes:

1. The appointment and remuneration of managerial personnel is in accordance with the requirements of section 34A of the Insurance Act, 1938 and has been approved by the IRDAI.

2. The remuneration excludes leave encashment and leave travel allowance which would have been accrued in the books of or funded by State Bank of India.

3. Effective August 1, 2014 Mr. Arijit Basu was deputed from State Bank of India as the Managing Director and CEO of the Company. IRDAI has accorded its approval to this appointment.

10. Investments of funds and assets pertaining to policyholders'' liabilities

a. Allocation of investments between policyholders'' funds and shareholders'' funds

Investments made out of the shareholders'' and policyholders'' funds are tracked from inception and income accordingly accounted for on the basis of records maintained. As and when necessary, transfers have been made from shareholders'' investments to policyholders'' investments. In respect of such transfers, the investment income is allocated from the date of transfer.

* Including funds for future appropriation and fair value change account.

11. Taxation

The Company carries on life insurance business and hence the provisions of Section 44 and the first schedule of Income Tax Act, 1961, are applicable for computation of profits and gains of its business. Provision for taxation for the year ended March 31, 2015 amounted to '' 1,236,564 thousands (previous year ended March 31, 2014: '' 898,859 thousands).

12. Operating lease commitments

(a) Assets taken on operating lease:

In accordance with Accounting Standard 19 on ''Leases'', the details of leasing arrangements entered into by the Company are as under:

The Company has entered into agreements in the nature of lease or leave and licence with different lessors or licensors for residential premises, office premises and motor vehicles. These are in the nature of operating lease. Some of these lease arrangements contain provisions for renewal and escalation. There are no restrictions imposed by lease arrangements nor are there any options given to the Company to purchase the properties and the rent is not determined based on any contingency.

(b) Assets given on operating lease :

The Company has entered into an agreement in the nature of leave and licence for leasing out some portion of office premises. This is in the nature of operating lease and lease arrangement contains provisions for renewal. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency.

13. Earnings per share

In accordance with Accounting Standard 20 on ''Earning Per Share'', basic earnings per share are calculated by dividing the net profit or loss in the shareholders'' account by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

The rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared for Employees'' Provident Fund by the Government under para 60 of the Employees'' Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Based on an actuarial valuation conducted by an independent actuary, there is no deficiency as at the Balance Sheet date. The principal assumptions used by the actuary are as under:

Note: The figures in bracket, if any, indicates reversal of impairment loss earlier recognized in Revenue or Profit and Loss Account.

14. Micro, Small and Medium Enterprises Development Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises.

15. Additional disclosure requirements as per Corporate Governance Guidelines

a. Quantitative and qualitative information on the insurer''s financial and operating ratios, namely, incurred claim, commission and expenses ratios:

Refer summary of financial statement and ratios.

b. Actual solvency margin details vis-a-vis the required solvency margin

The actual solvency margin of the Company as on March 31, 2015 stands at 2.16 times (previous year ended March 31, 2014: 2.23 times) as against regulatory requirement of 1.50. Further, there has been no capital infusion after FY 2007-08.

c. Policy lapse ratio

The policy lapsed ratio (13^th month) for the year ended March 31, 2015 is 26.40% (previous year ending March 31, 2014 is 27.89%) based on premium amount and 31.59% (previous year ending March 31, 2014 is 34.41%) based on number of policies.

d. Financial performance including growth rate and current financial position of the insurer Refer summary of financial statement and ratios.

e. A description of the risk management architecture

The Board has the ultimate responsibility for overseeing the management of risk within the Company. The Risk profile of the Company is reported to the Board by the Risk Management Committee of the Board (RMC-B) from time to time. The RMC-B is responsible for overseeing the Company''s risk management program and for ensuring that significant risks to the Company are reported to the Board on a timely basis and apprise the Board of the various risk management strategies being adopted. The Company''s Risk Appetite statement is reviewed by the Board so as to ensure that the business of the Company is carried out within the set risk limits.

The RMC-B is supported by Risk Management Committee of the Executives (RMC-E) and the Asset Liability Committee (ALCO). The RMC-E and ALCO are separate bodies dealing with different risk areas. RMC-E is convened by Head-Risk Management & Fraud Monitoring and consists of the Managing Director & Chief Executive Officer, Deputy Chief Executive Officer, Executive Director - Actuarial & Risk Management, Executive Directors - Marketing, Executive Director

- Operations & IT, Appointed Actuary, Chief Officer - Business Strategy, Head - HR & Administration, Chief Audit Officer, Chief Financial Officer, Chief Operating Officer, Chief Information Officer and Head - Sales Quality & CFIC. ALCO is chaired by Managing Director & Chief Executive Officer and consists of Deputy Chief Executive Officer, Executive Director - Actuarial & Risk Management, Head Pricing, Head Valuation, Head - ALM, Chief Officer - Business Strategy Investments, Head of Investments, Head Debt, Head Equity, Chief Financial Officer and Head Risk Management & Fraud Monitoring. ALCO is convened by the Appointed Actuary.

The Head - Risk Management & Fraud Monitoring is responsible and accountable for ensuring that a risk management program is established, implemented and maintained in accordance with Risk Management Policy so that risks are managed to an acceptable level. Head - Risk Management & Fraud Monitoring will report to the MD & CEO of the Company, through Executive Director - Actuarial & Risk Management and maintain functional relationships with all the Departmental Risk Officers.

The Departmental / Regional Heads are responsible for the management of risk in their areas of control and guide the Risk Officers in their Department. Risk Officer in each Department / Branch is responsible for the identification, measurement, monitoring, co-ordination of Risk Management activities in his / her Department and cascade the Risk Management initiatives within the team. Department risk limits are monitored through the functional / departmental risk appetite statement.

16. Contribution made by the shareholders'' to the policyholders'' account

The contribution of Rs, 1,529,782 thousands (previous year ended 31st March 2014: Rs, 3,070,844 thousands) made by the shareholders'' to the policyholders'' account is irreversible in nature, and shall not be recouped to the shareholder''s account at any point of time.

17. Foreign Exchange gain/(loss)

The amount of foreign exchange gain/ (loss) in Revenue Account for the year ended March 31, 2015 is Rs, 18 thousands (previous year ended March 31, 2014 : Rs, 24 thousands).

18. Interim Dividend

The Board at its meeting held on March 27, 2015 has declared an Interim Dividend of Rs, 1.20 per share. Accordingly, a provision of Rs, 1,439,929 thousands (including dividend distribution tax of Rs, 239,929 thousands) (previous year ended March 31, 2014: Rs, 169,950 thousands) have been made towards interim dividend in the accounts for the year ended March 31, 2015.

19. Accounting treatment of depreciation as per Companies Act, 2013

The Clause 7 of ''Part C'' of ''Schedule II'' to Companies Act, 2013 requires the carrying amount of the assets as on April 1, 2014 to be depreciated over the remaining useful life of the assets and where the remaining useful life of an asset is nil, the carrying amount of the assets as on April 1, 2014 may be recognized in the opening balance of retained earnings. Pursuant to requirement of Companies Act, 2013, the Company has adopted useful life of assets as prescribed under ''Part C'' of ''Schedule II'' to the Companies Act, 2013 as against the earlier rate of depreciation which is as under.

Consequent to the above, the Company has charged net carrying value of assets amounting '' 23,593 thousands after retaining the residual value at '' 1/- to depreciation with a corresponding decrease in the net block of fixed assets where the remaining useful life of an asset is Nil as on April 1, 2014.

Further, the carrying amount of the assets as on April 1, 2014 is depreciated over the remaining useful life of the assets as mentioned above based on written down value method after considering residual value at the rate of 5% of gross value of an asset. Had the Company continued with the previously assessed useful lives and residual values, charge for depreciation for the year ended March 31, 2015 would have been lower by '' 4,858 thousands for the assets held at April 1, 2014.

20. Previous year figures regrouped

Previous year figures have been regrouped / reclassified / rearranged wherever necessary to make them comparable with current year''s presentation.

21. Corporate Social Responsibility

The Company has spent Rs, 81,167 thousands towards Corporate Social Responsibility activities mentioned in Schedule VII of The Companies Act, 2013.

22. Related party disclosures as per Accounting Standard 18

A. Related parties where control exists:

Sr. No. Nature of relationship Name of related party

1. Holding Company State Bank of India

B. Related parties and nature of relationship

Sr. No. Nature of relationship Name of related party

1. Holding Company State Bank of India

2. Joint Venture Partner BNP Paribas Cardif

3. Holding Company of Joint Venture Partner BNP Paribas

4. Fellow Subsidiaries State Bank of Bikaner & Jaipur

State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore SBI Capital Markets Ltd.

SBI DFHI Ltd.

SBI Funds Management (Pvt.) Ltd.

SBI CAPS Ventures Ltd.

SBI CAP Trustee Company Ltd.

SBI CAP (UK) Ltd.

SBI CAP (Singapore) Ltd.

SBI Cards & Payment Services Pvt. Ltd.

SBI Payment Services Pvt. Ltd.

SBI Global Factors Ltd.

SBICAP Securities Ltd.

SBI Pension Funds Pvt. Ltd.

SBI General Insurance Co. Ltd.

SBI Funds Management ( International) Pvt. Ltd.

SBI Mutual Fund Trustee Company Pvt. Ltd.

SBI-SG Global Securities Services Pvt. Ltd.

State Bank of India (California)

State Bank of India (Canada)

SBI (Mauritius) Ltd.

Commercial Bank of India Llc, Moscow PT Bank SBI Indonesia Nepal SBI Bank Ltd.

State Bank of India (Botswana) Ltd. (w.e.f. June 14, 2013)

5. Significant Influence or Controlling Enterprise SBI Life Insurance Company Limited Employee PF Trust

SBI Life Insurance Company Limited Employees Gratuity Fund

6. Key Management Personnel Mr. Atanu Sen - Managing Director & CEO

(upto July 31, 2014)

7. Key Management Personnel Mr. Arijit Basu - Managing Director & CEO (Inducted

w.e.f. August 1, 2014)

23. Segment reporting

In accordance with the Accounting regulations read with Accounting Standard - 17 on "Segment reporting" issued by the Institute of Chartered Accountants of India, life insurance companies are required to prepare Segmental Revenue Account and Segmental Balance Sheet. The Company''s business is segmented into traditional -par business, non-par business and unit-linked business. Since the Company has conducted business only in India, the same is considered as one geographical segment. The accounting policies used in segmental reporting are same as those used in the preparation of the financial statements.

(a) Segmental Revenue Account

The methodology for determining segmental revenue and expenses adopted in the current year is described below:

Premium income, commission, investment income and profit or loss on sale or disposal of investments is directly allocated to the respective segments to which they relate. Within the Non-Participating segment, investment income and profit or loss on sale or disposal of investments are directly allocated if a segregated investment portfolio is maintained. The remaining investment income and profit or loss on sale of investments are apportioned on the basis of the average policy liabilities in the individual business and the group business.

Operating expenses that are directly attributable and identifiable to the business segments are allocated on actual basis. Other operating expenses, which are not directly identifiable and attributable, are allocated after considering the following:

i. Channels used for the business segments

ii. Cost centres identified by the Management

iii. Gross premium, new business premium and renewal premium

iv. New lives added during the year

v. Total number of lives covered as at the end of the year

vi. Average number of employees in the Company

(b) Segmental Balance Sheet

Investments are effected from the respective funds and have been reflected accordingly. Fixed assets have been allocated to shareholders funds, net current assets have been directly allocated among shareholders, life business, pension business, group gratuity and unit - linked business segments. Other net current assets have been allocated to life business and pension business in the ratio of the respective policy liabilities as at the year end.

Within life business, certain assets and liabilities have been directly identified to the respective segments. Other assets and liabilities under Life business have been allocated in the ratio of the respective policy liabilities as at the year end.