Financial Year 2012-13 (27 MB) - The New India Assurance Co. Ltd.

Leadership and Beyond• Depreciation is provided at 50% of the applicable rates as above on additions made to fixed assets,which are put into use for less than six months.• No depreciation is provided on assets sold/ discarded/destroyed during the year.17. Intangible AssetsIntangible assets are stated at cost of acquisition less accumulated amortisation. The same is amortisedover a period of four years on straight line basis. Software development / acquisition costs, except thosewhich meet the recognition criteria as laid down in Accounting Standard 26 (AS 26), are charged to revenue.Any additions to already existing assets are amortised prospectively over the remaining residual life of theassets.18. Employee BenefitsEmployee benefits comprise of both defined contributions and defined benefit plans.Provident Fund is a defined contribution plan. Company’s contribution towards provident fund is charged tothe Profit and Loss Account and Revenue Accounts as applicable. Further Company has no further obligationbeyond the periodic contributions.Pension, Gratuity and Leave Encashment are defined benefit plans. The Company has incorporated a PensionTrust and Gratuity Trust. The Company’s liability towards pension, gratuity and leave encashment is accountedfor on the basis of an actuarial valuation done at the year end and is charged to revenue accounts and profitand loss account as applicable except in case of pension for the employee who joined from 1 st January, 2004which is defined contribution plan wherein contribution towards pension fund is charged to the Profit andLoss Account and Revenue Accounts as applicable. Further, Company has no further obligation beyond theperiodic contributions.All short term employee benefits are accounted on undiscounted basis during the accounting period basedon service rendered by the employees.19. Expenses of Management-Basis of ApportionmentExpenses of management including provision for bad and doubtful debts and exchange gain/loss, areapportioned to the revenue accounts on the basis of gross direct premium plus reinsurances accepted givingweightage of 75% for marine business and 100% each for fire and miscellaneous business.20. Income from Investments -Basis of ApportionmentInvestment Income (net of expenses) is apportioned between Shareholders’ Fund and Policyholders’ Fundin proportion to the balance of these funds at the beginning of the year.Investment income (net of expenses) belonging to Policyholders is further apportioned to Fire, Marine andMiscellaneous segments in proportion to respective technical reserves balance at the beginning of the year.Shareholders’ Funds for this purpose consist of Share Capital, General Reserves, Capital Reserves andForeign Currency Translation Reserve.Policyholders’ Funds consist of Technical Reserves i.e. Un-expired Risk Reserve plus Provisions forOutstanding Claims.ANNUAL REPORT187