DHFL PRAMERICA LIFE INSURANCE COMPANY LIMITED CIN : U66000HR2007PLC Audited Financial Statements For the year ended 31 st March, 2018

Transcription

1 DHFL PRAMERICA LIFE INSURANCE COMPANY LIMITED CIN : U66000HR2007PLC Audited Financial Statements For the year ended 31 st March, 2018

2 S. N. Dhawan & Co LLP J.C. Bhalla & Co. (Formerly S.N. Dhawan & Co.) Chartered Accountants Chartered Accountants B-17, Maharani Bagh 410, Ansal Bhawan New Delhi KG Marg, Connaught Place NewDelhi INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF DHFL PRAMERICA LIFE INSURANCE COMPANY LTD. Report on the Financial Statements We have audited the accompanying financial statements of DHFL PRAMERICA LIFE INSURANCE COMPANY LTD. which comprise the Balance Sheet as at March 31, 2018, the Revenue Account, the Profit and Loss Account and the Receipts and Payments Account for the year then ended (hereinafter referred to as Financial Statements ), and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( the Act ) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, as applicable to life insurance companies which includes the requirements of the Insurance Act, 1938 as amended by Insurance Laws (Amendment) Act, 2015, the Insurance Regulatory and Development Act, 1999, Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent applicable. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the aforementioned Acts and Regulations, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan Page 1 of 6

3 and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements are prepared in accordance with the Insurance Act, 1938 as amended by Insurance Laws (Amendment) Act, 2015, the Insurance Regulatory and Development Act, 1999, Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 and the Companies Act, 2013, to the extent applicable and give a true and fair view in conformity with the accounting principles generally accepted in India, as applicable to Insurance Companies: i. in the case the Balance Sheet, of the state of affairs of the Company as at March 31, 2018; ii. iii. iv. in the case of the Revenue Account, for the year ended on that date, there being no deficit after recognizing the contribution from the shareholders to the Profit & Loss Account; in the case of the Profit and Loss Account, of the profit for the year ended on that date; and in the case of the Receipts and Payments Account, of the receipts and payments for the year ended on that date. Other Matter The actuarial valuation of liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists as at March 31, 2018 is the responsibility of the Company s Appointed Actuary (the Appointed Actuary ). The actuarial valuation of these liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists as at March 31, 2018 has been duly certified by the Appointed Actuary and in his opinion, the assumptions for such valuation are in accordance with the guidelines and norms issued by the Insurance Regulatory Development Authority of India ( IRDAI / Authority ) and the Institute of Actuaries of India in concurrence with the Authority. We have relied upon Appointed Actuary s certificate in this regard for forming our opinion on the valuation of liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists in financial statements of the Company. Page 2 of 6

4 Report on Other Legal and Regulatory Requirements As required by Schedule C of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 and with Section 143(3) of the Companies Act, 2013, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of the audit; b) In our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books; c) As the Company s accounting system is centralized at head office, no returns for the purposes of our audit are prepared at the branches of the Company; d) The Balance Sheet, the Revenue Account, the Profit and Loss Account and Receipts and Payments Account dealt with by this report are in agreement with the books of account; e) On the basis of the written representations received from the directors as on 31 March 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2018, from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013; f) The investments have been valued in accordance with the provisions of the Insurance Act, 1938 as amended by Insurance Laws (Amendment) Act, 2015 and the Insurance Regulatory and Development Authority of India (Preparation of Financial Statements and Auditor s Report of Insurance Companies) Regulations, 2002 (the Regulations) and Orders / Directions issued by Insurance Regulatory and Development Authority of India in this behalf; g) The Accounting Policies selected by the Company are appropriate and are in compliance with Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent applicable and with Accounting Principles as prescribed in the Insurance Regulatory and Development Authority of India (Preparation of Financial Statements and Auditor s Report of Insurance Companies) Regulations, 2002 and Orders / Directions/Circulars issued by Insurance Regulatory and Development Authority of India in this behalf; h) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent applicable and with the accounting principles prescribed by the Regulations and orders/directions issued by the IRDAI in this behalf; i) We have reviewed the management report attached to the financial statements for the year ended March 31 st, 2018 and there is no apparent mistake or material inconsistencies with the financial statements; j) Based on the information and explanations received during the normal course of our audit, Management Representations and Compliance Certificates noted by the Audit and Compliance Committee, nothing has come to our attention which causes us to believe that Page 3 of 6

5 the Company has not complied with the terms and conditions of registration stipulated by IRDAI; k) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure A ; and. l) With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rule, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The company has disclosed the impact of the pending litigations on its financial position in its Financial Statements (Refer Schedule 16 II (a) to the Financial Statements). ii. The Company did not have any long term contracts including derivative contracts for which there were any foreseeable losses. iii. No amount was required to be transferred to the Investor Education and Protection fund by the Company. For S.N. Dhawan & Co. LLP (Formerly S.N. Dhawan & Co.) Chartered Accountants Firm s Registration No.: N/ N For J.C. Bhalla & Co. Chartered Accountants Firm s Registration No N sd/- sd/- Rajeev K. Saxena Rajesh Sethi Partner Partner Membership No.: Membership No.: Place: Mumbai Place: Mumbai Date : 26 April, 2018 Date : 26 April, 2018 Page 4 of 6

6 Annexure - A to the Auditors Report Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( the Act ) We have audited the internal financial controls over financial reporting of DHFL Pramerica Life Insurance Company Limited ( the Company ) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date. Management s Responsibility for Internal Financial Controls The Company s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ( ICAI ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, Auditors Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note ) issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company s internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Page 5 of 6

7 financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of Management and Directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company, has in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI. Other Matter The actuarial valuation of liabilities for life policies in force and policies where premium is discontinued is required to be certified by the Appointed Actuary as per the regulations, and has been relied upon by us, as mentioned under para other matter of our audit report on the financial statements for the year ended March 31, Accordingly, our opinion on the internal financial controls over financial reporting does not include reporting on the operating effectiveness of the management s internal controls over the valuation and accuracy of the aforesaid actuarial valuation. For S.N. Dhawan & Co. LLP (Formerly S.N. Dhawan & Co.) Chartered Accountants Firm s Registration No.: N/ N For J.C. Bhalla & Co. Chartered Accountants Firm s Registration No N sd/- sd/- Rajeev K. Saxena Rajesh Sethi Partner Partner Membership No.: Membership No.: Place: Mumbai Place: Mumbai Date : 26 April, 2018 Date : 26 April, 2018 Page 6 of 6

8 S. N. Dhawan & Co LLP J.C. Bhalla & Co. (Formerly S.N. Dhawan & Co.) Chartered Accountants Chartered Accountants B-17, Maharani Bagh 410, Ansal Bhawan New Delhi KG Marg, Connaught Place NewDelhi Independent Auditors Certificate in respect of provisions of paragraph 4 of Schedule C of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations 2002, ( the Regulations ) read with regulation 3 of the Regulations. 1. This Certificate is issued to comply with the provisions of paragraph 4 of Schedule C of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors report of Insurance Companies) Regulations 2002, ( the Regulations ) read with regulation 3 of the Regulations. Management Responsibility 2. Management of the Company is responsible for complying with the provisions of The Insurance Act, 1938 (the Insurance Act ), the Insurance Regulatory and Development Authority Act, 1999 (the IRDA Act ), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor s Report of Insurance Companies) Regulations, 2002 (the IRDA Financial Statements Regulations ), orders/directions issued by the Insurance Regulatory and Development Authority of India (the IRDAI ) which includes the preparation of the Management Report. This includes collecting, collating and validating data and designing, implementing and monitoring of internal controls suitable for ensuring compliance as aforesaid. Auditors' Responsibility 3. Pursuant to the regulations, it is our responsibility to certify the matters contained in paragraph 4 of Schedule C of the Regulations. We conducted our examination on test check basis in accordance with the Guidance Note on Reports or Certificates for Special Purposes issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India. 4. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. Opinion 5. In accordance with the information and explanations given to us and to the best of our knowledge and belief and based on our examination of the books of account and other records maintained by DHFL Pramerica Life Insurance Company Limited ( the Company ) for the year ended 31 March, 2018, we certify that: a) We have verified the Cash balances and Securities in relation to the Company s investments as at 31 March, 2018 by actual inspection or on the basis of certificates/ confirmations received from the Company/ Custodians appointed by the Company as the case may be. As at 31 March, 2018, the Company does not have any Loans, Reversions and Life Interests;

9 b) The Company is not a Trustee of any trust; and c) No part of the assets of the policyholders funds has been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 as amended by Insurance Laws (Amendment) Act, 2015, relating to the application and investments of the policyholders funds. Restrictions on Use 6. This certificate has been issued by us solely to comply with the requirements of the regulations mentioned in Para 1. It should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or any duty of care or for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing. For S.N. Dhawan & Co. LLP (Formerly S.N. Dhawan & Co.) Chartered Accountants Firm s Registration No.: N/ N For J.C. Bhalla & Co. Chartered Accountants Firm s Registration No N sd/- sd/- Rajeev K. Saxena Rajesh Sethi Partner Partner Membership No.: Membership No.: Place: Mumbai Place: Mumbai Date: 26 April, 2018 Date: 26 April, 2018

10 Independent Auditor s Certificate Certificate in accordance with the Clause B11(d) of Schedule I of the Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016 ( the Regulations ) 1. At the request of DHFL Pramerica Insurance Life Insurance Company Limited ( the Company ), we have performed the procedures stated in paragraph 2 below, for the purpose of issuing a certificate in connection with the Regulations, regarding the declaration of the Net Asset Value ( NAV ) of the schemes of the Company as at 31 March, In this connection, we have performed the following procedures: (a) Obtained representation from the management that the Company has declared 31 March, 2018 as a business day for accepting application forms and that it has declared NAV for 31 March, 2018; (b) Obtained the list of New business applications in respect of Unit linked products on 31 March, 2018 (together referred to as Application Forms ), from the management; (c) Selected samples of Application forms and verified whether: i) The applications received on Friday, 31 March, 2018, up to 3.00 p.m. have been appropriately stamped ; and the NAV of 31 March, 2018 is applied for such applications for the selected samples; and ii) The applications received on Friday, 31 March, 2018, after 3.00 p.m. have been appropriately stamped; and the NAV of 02 April, 2018 is applied for such applications for the selected samples. 3. The compliance with conditions stated in the circular is the responsibility of the Company s management. Our responsibility is to perform the above-mentioned procedures on the particulars and state our findings. We performed the above-mentioned procedures, in accordance with the Guidance Note on Audit Reports and Certificates for Special Purposes issued by the Institute of Chartered Accountants of India ( ICAI ). The above-mentioned procedures include examining evidence supporting the particulars on a test basis. Further, our scope of work did not involve us performing audit tests for the purposes of expressing an opinion on the fairness or accuracy of any of the financial information or the financial statements of the Company taken as a whole. We have not performed an audit, the objective of which would be the expression of an opinion on the financial statements, specified elements, accounts or items thereof, for the purpose of this certificate. Accordingly, we do not express such opinion. 4. Based on the procedures performed by us, as mentioned in paragraph 2 above, according to the information and explanations provided to us and representation by the Company s management, we confirm that: (a) The Company has declared 31 March, 2018 as a business day for accepting proposal forms; (b) The Company has declared NAV for 31 March, 2018; (c) The applications received on Friday, 31 March, 2018 up to 3.00 p.m. have been processed with the NAV of 31 March, 2018 (d) The application received on Friday, 31 March, 2018 after 3.00 p.m. have been processed with the NAV of the next business day i.e. 02 April, The concurrent auditors of the Company, M/s. Marrk & Associates, Chartered Accountants have issued a certificate dated 11 April, 2018 confirming the compliance with requirements of Clause B5 of the Regulations. We have read the certificate and found the same to be in order.

11 6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements 7. This certificate is issued at the request of the Company solely for use of the Company for inclusion in the annual accounts as per Clause B11 (d) of the Regulations and is not intended to be used or distributed for any other purpose. We have no responsibility to update this certificate for events and circumstances occurring after the date of this certificate. For S.N. Dhawan & Co. LLP (Formerly S.N. Dhawan & Co.) Chartered Accountants Firm s Registration No.: N/ N For J.C. Bhalla & Co. Chartered Accountants Firm s Registration No N sd/- sd/- Rajeev K. Saxena Rajesh Sethi Partner Partner Membership No.: Membership No.: Place: Mumbai Place: Mumbai Date : 26 April, 2018 Date : 26 April, 2018

12 DHFL PRAMERICA LIFE INSURANCE COMPANY LIMITED IRDAI REGISTRATION NO: 140; DATE OF REGISTRATION WITH IRDAI: JUNE 27, 2008 (All Amounts in Thousands of Indian Rupees, unless otherwise stated) MANAGEMENT REPORT FOR THE YEAR ENDED MARCH 31, 2018 In accordance with the provision of Insurance Regulatory Development Authority of India (IRDAI) (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 (Regulation) and circulars/guidelines issued by IRDAI thereafter, the following Management Report for the year ended March 31, 2018 is submitted : 1. The Company is carrying business on the basis of certificate of registration granted and duly renewed by IRDAI. 2. The Company has paid all dues payable to the statutory authorities except those under dispute or those disclosed under contingent liabilities. 3. The Indian and Foreign shareholding pattern of the Company during last financial year are in conformity with the statutory or regulatory requirements. 4. The Company has not directly or indirectly invested outside India the funds of the holders of policies issued in India. 5. The Company is maintaining the required solvency margins as undertaken to the Insurance Regulatory and Development Authority. 6. The Company certifies that the values of all the assets have been reviewed on the date of the Balance Sheet and that the assets set forth in the Balance Sheet are shown in the aggregate at amounts not exceeding their realisable or market value under the several headings - " Loans", " Investments", "Agents' balances", "Outstanding Premiums", "Interest, Dividends and Rents outstanding", "Interest, Dividends and Rents accruing but not due", "Amounts due from other persons or Bodies carrying on insurance business", " Sundry Debtors", " Bills Receivable", " Cash" and the several items specified under "Other Accounts".

13 7. No part of the life insurance fund has been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of 1938) as amended from time to time relating to the application and investment of the life insurance funds. 8. The Company recognises the risks associated with the life insurance business and manages the risk by adopting prudent policies commensurate with the needs of the life insurance business. The key risks affecting the operations of the Company are underwriting risks and investment risks. The underwriting risk is managed by the robust underwriting function and by further establishing reinsurance treaties with various reinsurance companies. All risks, which are above the pre-determined retention limits are automatically reinsured. The investment risk is managed by creating a portfolio of different asset classes and of varied maturities so as to spread the risk across a wide category of investee companies. The Company has constituted an Investment Committee, which acts as the policy making body for the investment operations. The Investment Committee lays down various internal policies and norms governing the functioning of the Investment Department. The Investment Committee periodically discusses the investment strategy, portfolio structures, performance of the portfolio and related issues. The investment policy is reviewed regularly in order to align the same with the Company's business plans. 9. The Company does not have operations in any other country other than India 10. Average claim settlement time from the date of receipt of complete documentation is detailed as under: Mortality Claims Average Settlement period for last 5 years Average Claim Settlement Time (in days) Individual Group Health Financial Year Individual Life Group Life Health

14 Details regarding Claims registered and not settled as on 31 st March 2018: Traditional Business Group Linked Period Business Individual Group Death Death Health Health Total No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. 30 Days , , , Days to 6 months , ,492 6 months to 1 year year 5 years years & above - - Total 7 17, , ,861 Details regarding Claims registered and not settled as on 31 st March 2017: Traditional Business Group Linked Business Individual Group Period Death Death Health Health Total No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. 30 Days , , Days to 6 months , , ,595 6 months to 1 year year 5 years years & above - - Total 6 6, , ,131

15 11. The value of investments as shown in Balance Sheet has been arrived as follows : Valuation - shareholders' investments and non-linked policyholders' investments Debt securities Debt securities including Government securities are considered as held to maturity and accordingly stated at cost, subject to accretion/amortization of discount/premium on a straight line basis over the period of maturity/holding. In case of other instruments like commercial papers, certificate of deposits, CBLO and Treasury bills, the difference between the redemption value and book value is accreted over the life of assets, on straight line basis. Investments in Fixed deposits and Reverse repo are carried at cost. Equity Shares, Exchange Traded funds (ETFs), Additional Tier 1 bonds and Mutual Funds Listed equity securities and Exchange Traded Funds are valued at fair value on the balance sheet date. For the purpose of arriving at the fair value, the Company has adopted National Stock exchange of India Limited (NSE) as its primary Exchange. In case where NSE price is not available on a valuation date, closing price of BSE (Secondary Exchange) is considered. Unlisted Equity Shares are valued at historical cost subject to provision for diminution Mutual Fund units as at Balance Sheet date are valued at previous day s net asset value per unit Investments in Units of Venture Funds are valued at latest available NAV. Additional tier I bonds are classified as equity and is being valued at market yields. Unrealized gains or losses arising due to change in fair value are recognized in the Balance sheet under Fair Value change account The company accesses, on each balance sheet date, occurrence of impairment on listed equity shares. Any impairment loss is recognized in the Revenue or Profit & Loss account not exceeding the difference of the fair value of the security and the weighted average cost. Any reversal of earlier recognized impairment loss is recognized in Revenue or Profit & Loss account.

16 Valuation - Linked Investments Government securities are valued at the rate obtained from CRISIL (Credit Rating Information Services of India Limited). Debt securities other than Government Securities are valued on the basis of Bond Valuer (CRISIL). Listed equity securities and Exchange Traded Funds (ETFs) are valued at fair value on the balance sheet date. For the purpose of arriving at the fair value, the Company has adopted National Stock exchange of India Limited (NSE) as its primary Exchange. In case where NSE price is not available on a valuation date closing price of BSE (Secondary Exchange) is considered. Mutual Fund units as at Balance Sheet date are valued at previous day s net asset value per unit. In case of other instruments like commercial papers, certificate of deposits, CBLO and Treasury bills, the difference between the redemption value and book value is accreted over the life of the assets, on a straight line basis and accordingly these instruments are valued at accreted cost. Investment in Fixed deposits and reverse repo are valued at cost. 12. The Company has invested its controlled funds only in rated securities, primarily in Central Government, Treasury Bills and securities and highly rated bonds/mutual funds. All Investments in Debt securities are made with the clear intent of being held to maturity. Accordingly, the Management is confident of the quality of the investments.

17 13. Schedule of payments, which have been made to the individuals, firms, companies and organisations in which Directors are interested. S.No Name of Director Entity in which Director is interested 1. Mr. Kapil Wadhawan Dewan Housing Finance Corporation Mr. Harshil Rajnikant Limited Mehta Interest as Amount of Relative Payment during Director the Financial Year Director 310, Mr. Kapil Wadhawan Mr. Suresh Mahalingam 3. Mr. Kapil Wadhawan Mr. Suresh Mahalingam Mr. Anoop Pabby Aadhar Housing Finance Limited (formerly known as DHFL Vysya Housing Finance Limited) Director 24,345 Avanse Financial Services Limited Director 10, Ms. Candace Jo Woods Prudential International Insurance Service Company, LLC Director The financial statements of DHFL Pramerica Life Insurance Company Limited and all information in this annual report are the responsibility of the Management and have been reviewed by the Audit Committee and approved by the Board of Directors. a) The financial statements have been prepared in accordance with generally accepted accounting standards, principles and policies have been followed with no material departures.

18 b) The financial statements have been prepared in accordance with the accounting policies adopted by the Management and stated therein and the same have been followed consistently. These financial statements contain some items which reflect the best estimates and judgments of the Management. Where alternative accounting methods exist, Management has chosen those it deems most appropriate in the circumstances to ensure the financial statements are presented fairly, in all material respects. The choice of estimates and judgments made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and the operating profit of the Company for the year. c) The Management of the Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the applicable provisions of the Insurance Act 1938 as amended from time to time and Companies Act 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) The financial statements have been prepared on a going concern basis. e) The Company has set up an internal audit system commensurate with the size and nature of the business and the same is operating effectively. For and on behalf of the Board of Directors sd/- sd/- sd/- Kapil Wadhawan Suresh Mahalingam James Wayne Weakely Chairman Director Director sd/- sd/- sd/- sd/- Anoop Pabby Ajay Chaturvedi Alok Mehrotra Mayank Goel MD & CEO Appointed Actuary Chief Financial Officer Company Secretary Date: April 26, 2018 Place: Mumbai

19 DHFL PRAMERICA LIFE INSURANCE CO. LTD. IRDAI REGISTRATION NO: 140; DATE OF REGISTRATION WITH IRDAI : JUNE 27, 2008 FORM A-RA REVENUE ACCOUNT FOR THE YEAR APRIL 1, 2017 To MARCH 31,2018 Policyholders Account (Technical Account) (All Amounts in Thousands of Indian Rupees) Particulars Schedule Individual Life Group Life Non Participating (Non-Linked) Group Health For the Year April 1, 2017 to March 31, 2018 Individual Health Participating Individual Life Individual Life Non Participating (Linked) Individual Pension Premiums earned - net (a) Premiums 1 5,482,828 10,857,677 19,496 28,634 1,150, ,690 12,314 18,444,591 (b) Reinsurance Ceded (25,442) (953,178) (4,291) (843) (1,361) (1,756) - (986,871) (c) Reinsurance Accepted ,457,386 9,904,499 15,205 27,791 1,149, ,934 12,314 17,457,720 Income from Investments (a) Interest, Dividends & Rent - Gross 603, ,169 1,044 1, , ,548 4,893 1,679,668 (b) Profit on sale/ redemption of investments 20,317 73, , ,287 18, ,189 (c) (Loss) on sale/ redemption of investments (41) (415) (7,334) (1,167) (8,957) (d) Transfer/ Gain on revaluation/change in fair value * (33,197) (7,281) (40,478) (e) Amortisation of discount/(premium) (10,804) (40,994) (147) (94) (3,690) (72) (8) (55,809) Total Other Income (a) Fees & Charges 2, ,108 Contribution from the Shareholders' Account 21, ,026 17, , ,379 Total ( A ) 6,095,458 10,771,417 16,128 31,008 1,294,574 1,257,864 27,371 19,493,820 Commission 2 401, , ,238 74,094 14, ,597 Operating Expenses related to Insurance Business 3 2,834,602 2,531,082 31,073 33, , ,653 29,833 6,246,266 Expenses in excess of Allowable Expense transferred to Shareholders Account [refer Note -16 II (aj)] (336,373) (1,268,270) (28,132) (28,376) (41,641) (12,353) (29,291) (1,744,436) Goods & Service Tax on Premium , ,407 Provision for doubtful debts Bad debts written off Provision (other than taxation) (a) For diminution in the value of investments( Net) (b) Others Total ( B ) 2,899,687 1,477,738 3,218 6, , , ,225,834 Benefits Paid (Net) 4 318,475 1,599, , , ,933 39,443 2,543,358 Interim Bonuses Paid Change in valuation of liability in respect of life policies: (a) Gross ** 2,880,440 4,739,541 9,339 22, , ,023 (15,865) 8,766,850 (b) (Amount ceded in Reinsurance ) (3,144) (488,208) (2,225) (493,577) (c) Amount accepted in Reinsurance Total ( C ) 3,195,771 5,851,070 7,237 24, , ,956 23,578 10,816,856 SURPLUS/ (DEFICIT) ( D ) = ( A ) - ( B ) - ( C ) - 3,442,609 5, ,848 3,451,130 Deficit at the beginning of the year SURPLUS /(DEFICIT) AVAILABLE FOR - 3,442,609 5, ,848 3,451,130 APPROPRIATION APPROPRIATIONS Transfer to Shareholders Account - 3,442,609 5, ,848 3,451,130 Transfer to Other Reserves Balance being Funds for Future Appropriations Total (D) - 3,442,609 5, ,848 3,451,130 The Total Surplus as mentioned below : (a) Interim Bonus Paid (b) Allocation of Bonus to Policyholders , ,566 ('c) Surplus shown in Revenue Account - 3,442,609 5, ,848 3,451,130 Total Surplus (a+b+c) - 3,442,609 5,673-80,791-2,848 3,531,921 * Represents the deemed realised gain as per norms specified by the Authority ** Represents Mathematical Reserve after considering allocation of Bonus As required by Section 40 B(4) of the Insurance Act, 1938 we certify that all expenses of management in respect of life insurance business in India by the Insurer have been fully debited to the Revenue Account as expenses. Schedules 1 to 16 referred to above and accompanying annexures form an integral part of the Financial Statements. As referred to in our report of even date. For S. N. Dhawan & Co. LLP For J C Bhalla & Co. For and on behalf of the Board of Directors (Formerly S. N. Dhawan & Co.) Chartered Accountants Chartered Accountants Firm Regn No N Firm Regn No N/N sd/- sd/- sd/- sd/- sd/- Rajeev K. Saxena Rajesh Sethi Kapil Wadhawan Suresh Mahalingam James Wayne Weakely Partner Partner Chairman Director Director Membership No.: Membership No.: sd/- sd/- Anoop Pabby Alok Mehrotra MD & CEO Chief Financial Officer Place: Mumbai Place: Mumbai sd/- sd/- Date: April 26, 2018 Date: April 26, 2018 Mayank Goel Ajay Chaturvedi Company Secretary Appointed Actuary

20 DHFL PRAMERICA LIFE INSURANCE CO. LTD. IRDAI REGISTRATION NO: 140; DATE OF REGISTRATION WITH IRDAI : JUNE 27, 2008 FORM A-RA REVENUE ACCOUNT FOR THE YEAR APRIL 1, 2016 TO MARCH 31,2017 Policyholders Account (Technical Account) (All Amounts in Thousands of Indian Rupees) Particulars Schedule Individual Life Group Life Non Participating (Non-Linked) Group Health For the Year April 1, 2016 to March 31, 2017 Individual Health Participating Individual Life Non Participating (Linked) Individual Life Individual Pension Premiums earned - net (a) Premiums 1 3,377,199 6,593,447 2,113 3, , ,371 15,555 11,421,028 (b) Reinsurance Ceded (21,243) (501,100) (252) (253) (1,436) (1,587) - (525,871) (c) Reinsurance Accepted ,355,956 6,092,347 1,861 2, , ,784 15,555 10,895,157 Income from Investments (a) Interest, Dividends & Rent - Gross 418, , ,198 91,539 4,907 1,159,583 (b) Profit on sale/ redemption of investments 11, , , ,592 21, ,253 (c) (Loss) on sale/ redemption of investments (5) (180) (26,158) (4,007) (30,350) (d) Transfer/ Gain on revaluation/change in fair value * ,062 7, ,649 (e) Amortisation of discount/(premium) (1,251) (16,242) (56) (31) (2,406) (42) (3) (20,031) Total Other Income (a) Fees & Charges 1, ,899 Contribution from the Shareholders' Account 491, , ,612 Total ( A ) 4,277,454 6,855,284 2,175 3, ,269 1,075,276 45,945 13,098,772 Commission 2 201,427 2, ,578 10, ,998 Operating Expenses related to Insurance Business 3 2,252,708 1,292,229 14,908 15, , ,448 15,293 4,115,200 Expenses in excess of Allowable Expense transferred to Shareholders Account [refer Note -16 II (aj)] (582,767) (330,133) (14,656) (14,897) (75,826) (23,488) (14,546) (1,056,313) Service Tax on Premium , ,287 Provision for doubtful debts Bad debts written off Provision (other than taxation) (a) For diminution in the value of investments( Net) (b) Others Total ( B ) 1,871, , , ,297 1,176 3,331,172 Benefits Paid (Net) 4 303, , , ,116 59,367 1,936,940 Interim Bonuses Paid Change in valuation of liability in respect of life policies: (a) Gross ** 2,102,318 3,233,027 1,847 1, , ,863 (16,814) 6,060,035 (b) (Amount ceded in Reinsurance ) - (58,668) (212) (58,880) (c) Amount accepted in Reinsurance Total ( C ) 2,406,086 4,066,746 1,785 2, , ,979 42,553 7,938,186 SURPLUS/ (DEFICIT) ( D ) = ( A ) - ( B ) - ( C ) - 1,823, ,681-2,216 1,829,414 Deficit at the beginning of the year SURPLUS /(DEFICIT) AVAILABLE FOR - 1,823, ,681-2,216 1,829,414 APPROPRIATION APPROPRIATIONS Transfer to Shareholders Account - 1,823, ,681-2,216 1,829,414 Transfer to Other Reserves Balance being Funds for Future Appropriations Total (D) - 1,823, ,681-2,216 1,829,414 The Total Surplus as mentioned below : (a) Interim Bonus Paid (b) Allocation of Bonus to Policyholders , ,156 ('c) Surplus shown in Revenue Account - 1,823, ,681-2,216 1,829,414 Total Surplus (a+b+c) - 1,823, ,928-2,216 1,887,661 * Represents the deemed realised gain as per norms specified by the Authority ** Represents Mathematical Reserve after considering allocation of Bonus As required by Section 40 B(4) of the Insurance Act, 1938 we certify that all expenses of management in respect of life insurance business in India by the Insurer have been fully debited to the Revenue Account as expenses. Schedules 1 to 16 referred to above and accompanying annexures form an integral part of the Financial Statements. The entire insurance business is conducted in relation to India and there are no assets and liabilities outside India. As referred to in our report of even date. For S. N. Dhawan & Co. LLP For J C Bhalla & Co. For and on behalf of the Board of Directors (Formerly S. N. Dhawan & Co.) Chartered Accountants Chartered Accountants Firm Regn No N Firm Regn No N/N sd/- sd/- sd/- sd/- sd/- Rajeev K. Saxena Rajesh Sethi Kapil Wadhawan Suresh Mahalingam James Wayne Weakely Partner Partner Chairman Director Director Membership No.: Membership No.: sd/- Anoop Pabby MD & CEO sd/- Alok Mehrotra Chief Financial Officer Place: Mumbai Place: Mumbai sd/- sd/- Date: April 26, 2018 Date: April 26, 2018 Mayank Goel Ajay Chaturvedi Company Secretary Appointed Actuary

21 FORM A-PL DHFL PRAMERICA LIFE INSURANCE CO. LTD. IRDAI REGISTRATION NO: 140; DATE OF REGISTRATION WITH IRDAI : JUNE 27, 2008 PROFIT AND LOSS ACCOUNT FOR THE PERIOD APRIL 1, 2017 TO March 31, 2018 Shareholders Account (Non-technical Account) (All Amounts in Thousands of Indian Rupees) Schedule Particulars For the Year April 1, 2017 to March 31, 2018 For the Year April 1, 2016 to March 31, 2017 Transfer from the Policyholders' Account (Technical Account) - Non Participating Individual Life Policies Non-Participating Group Life Policies 3,442,609 1,823,929 - Non-Participating Group Health Policies 5, Non-Participating Individual Health Policies Participating Individual Life - 2,681 - Non-Participating Individual Linked Policies Non-participating Pension Linked Policies 2,848 2,216 Income From Investments (a) Interest, Dividends & Rent - Gross 598, ,991 (b) Profit on sale/redemption of investments 120, ,959 (c) (Loss on sale/ redemption of investments) (3,362) (3,529) (d) Amortisation of discount/(premium) (35,655) (21,916) Other income - Fees and Charges - - Total ( A ) 4,131,591 2,836,919 Expenses other than those directly related to the insurance business Operating Expenses 3A 955, ,788 Expenses in excess of Allowable Expense transferred from Policyholders Account 1,744,436 1,056,313 Miscellaneous Expenditure (written off) - - Bad debts written off - - Provisions (other than taxation) (a) For diminution in the value of investments( Net) - - (b) Provision for doubtful debts - - (c) Others - - Contribution to the Policyholders Account (Technical Account) - Non-Participating Individual Life Policies 21, ,137 - Non Partcipating Group Life Policies Non Partcipating Group Health Policies Non Partcipating Individual Health Policies 2, Participating Individual Life 17, Non-participating Individual Linked Policies 174,674 75,475 - Non-participating Pension Linked Policies - - Total ( B ) 2,916,237 2,132,713 Profit/(Loss) before tax ( C )= ( A ) - ( B ) 1,215, ,206 Provision for Taxation - - (a) Current Tax Credit/(Charge) - - (b) Deferred Tax Credit /(Charge) (156,476) (90,667) Profit/ (loss) after tax 1,058, ,539 Appropriations (a) Balance at the beginning of the year (3,539,405) (4,152,944) (b) Interim dividends paid during the year - - (c) Proposed final dividend - - (d) Dividend distribution on tax - - (e) Transfer to/from reserves/ other accounts - - Profit/(Loss) carried forward to the Balance Sheet (2,480,527) (3,539,405) Earning Per Share (Basic and Diluted) (in Rs.) [Face Value Rs10 per share] Schedules 1 to 16 referred to above and accompanying annexures form an integral part of the Financial Statements. The entire insurance business is conducted in relation to India and there are no assets and liabilities outside India. As referred to in our report of even date. For S. N. Dhawan & Co. LLP For J C Bhalla & Co. For and on behalf of the Board of Directors (Formerly S. N. Dhawan & Co.) Chartered Accountants Chartered Accountants Firm Regn No N Firm Regn No N/N sd/- sd/- sd/- sd/- sd/- Kapil Wadhawan Suresh Mahalingam James Wayne Weakely Rajeev K. Saxena Rajesh Sethi Chairman Director Director Partner Partner Membership No.: Membership No.: sd/- Anoop Pabby MD & CEO Chief Financial Officer sd/- Alok Mehrotra sd/- sd/- Place: Mumbai Place: Mumbai Mayank Goel Ajay Chaturvedi Date: April 26, 2018 Date: April 26, 2018 Company Secretary Appointed Actuary

22 DHFL PRAMERICA LIFE INSURANCE CO. LTD. IRDAI REGISTRATION NO: 140; DATE OF REGISTRATION WITH IRDAI : JUNE 27, 2008 BALANCE SHEET AS AT MARCH 31, 2018 FORM A-BS (All Amounts in Thousands of Indian Rupees) Particulars SOURCES OF S Schedule As at March 31, 2018 As at March 31, 2017 SHAREHOLDERS S: Share Capital 5 3,740,619 3,740,619 Sub-Total 3,740,619 3,740,619 RESERVES AND SURPLUS 6 8,329,217 8,329,217 CREDIT/(DEBIT) FAIR VALUE CHANGE ACCOUNT (393,954) 156,277 Sub-Total 11,675,882 12,226,113 BORROWINGS POLICYHOLDERS S: CREDIT/ (DEBIT) FAIR VALUE CHANGE ACCOUNT 16,157 16,364 POLICY LIABILITIES - Non Participating Group Life Policies 13,026,380 8,775,047 - Non Participating Individual Life Policies 9,061,248 6,183,952 - Non Participating Group Health Policies 8,749 1,635 - Non Participating Individual Health Policies 24,644 1,897 - Participating Individual Life Policies 1,915,821 1,287,196 - Non-Participating Individual Life Linked Policies 19,413 19,100 - Non-Participating Individual Pension Linked Policies 2,732 24,058,987 2,768 16,271,595 INSURANCE RESERVES - - PROVISION FOR LINKED LIABILITIES Non-Participating Individual Life - Linked Liabilities 2,386,199 1,819,589 - Fair Value Change Account (Linked) 226, ,493 - Funds for Discontinued Policies: -Discontinued on account of Non Payment of Premium 223, ,285 Non-Participating Individual Pension - Linked Liabilities 124, ,834 - Fair Value Change Account (Linked) 21,771 2,982,134 29,052 2,496,253 Sub-Total 27,057,278 18,784,212 S FOR FUTURE APPROPRIATIONS - - TOTAL 38,733,160 31,010,325 APPLICATION OF S INVESTMENTS Shareholders Investments 8 8,932,049 7,834,198 Policyholders Investments 8A 23,784,739 16,163,759 ASSETS HELD TO COVER LINKED LIABILITIES 8B 2,982,134 2,496,253 LOANS 9 54,166 17,820 FIXED ASSETS , ,589 DEFERRED TAX ASSET 367, ,397 CURRENT ASSETS Cash and Bank Balances , ,814 Advances and Other Assets 12 2,638,538 1,830,763 Sub-Total (A) 3,499,031 2,450,577 CURRENT LIABILITIES 13 3,775,735 2,430,026 PROVISIONS ,114 90,647 Sub-Total (B) 3,910,849 2,520,673 NET CURRENT ASSETS (C) = (A) (B) (411,818) (70,096) MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) DEBIT BALANCE IN PROFIT AND LOSS ACCOUNT (SHAREHOLDERS ACCOUNT) 2,480,527 3,539,405 DEFICITS IN THE REVENUE ACCOUNT (POLICYHOLDER'S ACCOUNT) - - Total 38,733,160 31,010,325 Schedules 1 to 16 referred to above and accompanying annexures form an integral part of the Financial Statements. The entire insurance business is conducted in relation to India and there are no assets and liabilities outside India. As referred to in our report of even date. For S. N. Dhawan & Co. LLP For J C Bhalla & Co. For and on behalf of the Board of Directors (Formerly S. N. Dhawan & Co.) Chartered Accountants Chartered Accountants Firm Regn No N Firm Regn No N/N sd/- sd/- sd/- sd/- sd/- Rajeev K. Saxena Rajesh Sethi Kapil Wadhawan Suresh Mahalingam James Wayne Weakely Partner Partner Chairman Director Director Membership No.: Membership No.: sd/- sd/- Anoop Pabby Alok Mehrotra MD & CEO Chief Financial Officer sd/- sd/- Place: Mumbai Place: Mumbai Mayank Goel Ajay Chaturvedi Date: April 26, 2018 Date: April 26, 2018 Company Secretary Appointed Actuary