1. We have audited the accompanying standalone
financial statements of HDFC Life Insurance
Company Limited (the "Company"), which
comprise the standalone balance sheet as at
31 March 2026, the standalone revenue account
(also called the "Policyholders' Account" or the
"Technical Account"), the standalone statement
of profit and loss account (also called the
"Shareholders' Account" or "Non-Technical
Account") and the standalone receipts and
payments account for the year then ended, and
notes to the standalone financial statements,
including a summary of significant accounting
policies and other explanatory information
(hereinafter referred to as the "standalone
financial statements").
In our opinion and to the best of our information
and according to the explanations given to us, the
aforesaid standalone financial statements give
the information required by the Insurance Act,
1938, as amended, the Insurance Regulatory and
Development Act, 1999, as amended, (the "IRDA
Act"), the Insurance Regulatory and Development
Authority (Actuarial, Finance and Investment
Functions of Insurers) Regulations, 2024, (the
"Regulations") including orders/directions/
circulars issued by Insurance Regulatory and
Development Authority of India ("IRDAI")and the
Companies Act, 2013, as amended, (the "Act")
to the extent applicable and in the manner
so required and give a true and fair view in
conformity with the accounting principles
generally accepted in India, of the state of affairs
of the Company as at 31 March 2026, of its net
surplus, its profit and its receipts and payments
for the year ended on that date, as applicable to
insurance companies.
Basis for opinion
2. We conducted our audit in accordance with the
Standards on Auditing ( "SAs") specified under
section 143(10) of the Act. Our responsibilities
under those SAs are further described in the
Auditor's Responsibilities for the Audit of the
Standalone Financial Statements section of our
report. We are independent of the Company in
accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India (the
"ICAI") together with the ethical requirements that
are relevant to our audit of the standalone financial
statements under the provisions of the Act, and
we have fulfilled our other ethical responsibilities
in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to
provide a basis for our opinion on the standalone
financial statements.
Key audit matters
3. Key audit matters are those matters that, in our
professional judgment, were of most significance
in our audit of the standalone financial
statements of the current period. These matters
were addressed in the context of our audit of the
standalone financial statements as a whole, and
in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Appropriateness of the Timing of Revenue Recognition in the proper period in accordance with applicable
guidelines/accounting standards
Refer Schedule 1 of the standalone financial statements and Schedule 16A, Note 02 to the Standalone Financial
Statements.
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Key Audit Matter
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How our audit has addressed the key audit matter
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During the year, the Company has recognised
premium revenue of ' 3,609,594 Lakh towards new
business (first year premium and single premium).
Out of the total revenue recognised, ' 2,642,211 Lakh
were recognised during the last quarter.
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In view of the significance of the matter, we performed
the following audit procedures in this area, among
others:
1) Understanding and evaluating the design and
implementation and testing the operating
effectiveness of key controls relating to recognition
of revenue including controls over cut off
procedures and timing of recognition and policy
issuance procedure.
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Key Audit Matter
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How our audit has addressed the key audit matter
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This area was considered a key audit matter because
of the concentration of revenue during the last
quarter of the financial year (including cut-off at the
balance sheet date). Due to the nature of the industry,
revenue is skewed towards the balance sheet date.
Hence, there is need to test the adequacy of the
control environment related to year end recognition of
revenue and perform cut off procedures to mitigate
inherent risk of misstatement related to timing of
revenue recognition.
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2) Testing on a sample basis, for policies issued
around the year-end procedures to confirm if
related procedural compliances with regard
to acceptability of the terms of policy were
completed before or after the year end to verify
appropriate accounting of revenue in accordance
with applicable guidelines/accounting standards
3) Testing on a sample basis, that policy sales of the
next financial year are not accounted for in the
current period.
4) Testing on a sample basis, the unallocated
premium to corroborate that there were no policies
where risk commenced prior to the date of the
balance sheet but revenue was not recognized.
5) Testing the manual accounting journal entries
relating to revenue on a sample basis so as to
identify unusual or irregular items. We agreed the
journal entries tested to supporting evidence.
6) Testing on a sample basis, cheques receipt with
the time stamp in case of products like Unit Linked
Insurance Plan to confirm the recognition of the
revenue is in correct accounting period.
7) Testing the automated control that the policy is
issued after the payment is received.
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Valuation and impairment determination of Investments (31 March 2026: INR ' 37,519,792, 31 March 2025: INR
' 33,628,153) (' in Lakh)
See schedule 8, 8A and 8B of the standalone financial statements and schedule 16A Note 06 on the accounting
policy.
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Key Audit Matter
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How our audit has addressed the key audit matter
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The Company's investment portfolio consists of
Policyholders investments (unit linked and non- linked)
and Shareholders investments. Total investment
portfolio represents around 99 % of the Company's
total assets as at 31 March 2026.
As prescribed by the IRDAI investments including
derivative instruments, should be made in accordance
with the Regulations and policies approved by Board
of Directors of the Company.
Investments in unit linked portfolio of INR 10,519,163
Lakh are valued based on observable inputs as
per their accounting policy and gains/losses are
recognized in revenue account. These unit linked
portfolio investments do not have risk of significant
misstatement. The valuation of unlisted or not
frequently traded investments involves management
judgement. Due to their significance to standalone
financial statements, the same is considered as key
audit matter.
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In view of the significance of the matter, we performed the
following audit procedures in this area, among others:
1) Obtaining an understanding of the Company's
process and controls over the valuation of
investments. The understanding was obtained
by performance of walkthroughs, which included
inspection of documents produced by the
Company and inquiries with those involved in the
pertinent process;
2) Understanding and evaluating the design and
implementation and operating effectiveness
of key controls over the valuation and
recording of impairment of investment process.
Assessed the Company's assessment and
approval of assumptions used for the valuation
and impairment of investments including key
authorization and data input controls thereof;
3) Ensured the appropriateness and reasonableness
of methodology, assumptions and judgements
used by management with reference to the
valuation and impairment of investments as per
the Company's Board approved valuation and
impairment policy. Obtained third party valuation
price reports as per the Company's policy as
relevant and understood such methodology to
conclude on the reasonableness.
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Key Audit Matter
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How our audit has addressed the key audit matter
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Investments in non-linked and shareholders portfolio of
INR 27,000,629 Lakh are valued as per their accounting
policy, based on which:
• the unrealized gains/ losses arising due to changes
in fair value of listed equity shares and mutual
fund units are recorded in the "Fair Value Change
Account" in the Balance Sheet; and
• debt securities and unlisted equity shares are
valued at historical cost.
Further, investments in the non-linked and
shareholders portfolio are assessed for impairment
as per the Company's Board approved investment
impairment policy which involves the Company's
judgement. There is increased economic stress on
account of external factors, which may impact the
valuation of these investments.
Accordingly, valuation of investments including
impairment of Investments was considered to be
one of the areas which required significant auditor
attention and was one of the matters of significance
in the standalone financial statements.
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4) Obtaining independent balance confirmations for
investments as at balance sheet date from the
custodians and depository participants appointed
by the Company to check the units of securities for
the purpose of valuation re-computation.
5) On a test check basis, recomputed valuation of
different class of investments to assess valuation
methodologies with reference to Investment
Regulations along with the Company's Board
approved valuation policy;
6) Examining movement and accounting in Fair Value
Change account for specific investments.
7) Obtaining written representations from the
Company on compliance of valuation of
investments with the regulations and adequacy of
impairment recorded for the year.
8) Tracing the presentation on the disclosure of
the impairment of investments in the financial
statements to the underlying impairment
assessment and management's estimates used
for recognition.
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Information Technology (IT) systems and controls related to financial reporting process.
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Key Audit Matter
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How our audit has addressed the key audit matter
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The Company is highly dependent on its Information
Technology (it) infrastructure comprising hardware,
software, multiple applications, automated interfaces
and controls in systems for recording, storing and
reporting of financial transactions.
The Company's key financial accounting and
reporting processes recording premium, commission,
benefits paid, investments amongst others are highly
dependent on IT systems including automated
controls, to process and record large volume of
transactions on daily basis. Consequently, there is a
high degree of reliance and dependency on such IT
systems for the financial reporting. Accordingly, there
exists a risk that deficiencies / gaps in the IT control
environment (including General IT Controls and
automated application controls) may result in a
significant misstatement in the financial statements.
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In view of the significance of the matter, we have
identified certain key IT systems ("in-scope" IT
systems) which have an impact on the financial
reporting process and the related controls testing as
a key audit matter, and have involved Information
Technology specialists to assess the key IT systems
and controls with respect to the financial statements:
1) Obtaining an understanding of the Company's
General IT Control (gitc) over key financial
accounting and reporting systems, and the in¬
scope IT systems;
2) Testing the design and implementation and testing
the operating effectiveness of key GITCs for in¬
scope IT systems, including;
o Logical access controls (e.g. segregation of
duties, role-based access, user provisioning and
de-provisioning),
o Periodic user access reviews and recertifications,
o Privilege access to applications, operating
systems and databases
o Password and authentication policies, and
o Program changes, including testing and
approvals of system changes in segregated
environments.
o IT operations, which include job scheduling,
monitoring and back and recovery
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Key Audit Matter
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How our audit has addressed the key audit matter
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Given the pervasive nature and criticality of the IT
environment to the preparation of the standalone
financial statements, we have identified the testing of
IT systems and the related control environment as a
key audit matter for the current year.
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3) Testing automated controls, system interfaces and
system generated reports, as applicable
4) Examining compensating controls and alternate
procedures, where deficiencies existed.
5) Understanding Cybersecurity Risk Management
Framework followed by the entity for information
assets, including information, applications systems,
databases, networks and data storage systems
6) Testing the design and operating effectiveness to
ensure that data backup is maintained on daily
basis and the same is available as prescribed
under regulatory requirements
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Other Information
4. The Company's Management and Board of
Directors are responsible for the other information.
The other information comprises the information
included in Management Discussion and Analysis,
Directors' report and management report but
does not include the financial statements and
auditors' report thereon. The Management
Discussion and Analysis, Directors' report and
management report are expected to be made
available to us after the date of this auditors'
report.
Our opinion on the standalone financial
statements does not cover the other information
and we will not express any form of assurance
conclusion thereon.
I n connection with our audit of the standalone
financial statements, our responsibility is to read
the other information identified above when it
becomes available and, in doing so, consider
whether the other information is materially
inconsistent with the standalone financial
statements or our knowledge obtained in the
audit, or otherwise appears to be materially
misstated.
When we read the Management Discussion and
Analysis, Directors' report and management
report, if we conclude that there is a material
misstatement therein, we are required to
communicate the matter to those charged
with governance and take appropriate action
as applicable under the relevant laws and
regulations.
Management's and Board of Directors'
Responsibilities for the Standalone Financial
Statements
5. The Company's Management and Board of
Directors are responsible for the matters stated
in Section 134(5) of the Act with respect to the
preparation of these standalone financial
statements that give a true and fair view of
the state of affairs, profit/loss and receipts and
payments of the Company in accordance with
the accounting principles generally accepted in
India including the provisions of the Insurance
Act, the IRDA Act, as amended the Regulations
including orders/ directions/ circulars issued
by IRDAI in this regard, and the Accounting
Standards specified under section 133 of the
Act, to the extent applicable. This responsibility
also includes maintenance of adequate
accounting records in accordance with the
provisions of the Act for safeguarding of 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 standalone financial statements that give
a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the standalone financial statements,
the Management and Board of Directors are
responsible for assessing the Company's ability
to continue as a going concern, disclosing, as
applicable, matters related to going concern
and using the going concern basis of accounting
unless Board of Directors either intends to
liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
The Board of Directors is also responsible for
overseeing the Company's financial reporting
process.
Auditors' responsibilities for the Audit of the
Standalone Financial Statements
6. Our objectives are to obtain reasonable
assurance about whether the standalone
financial statements as a whole are free from
material misstatement, whether due to fraud or
error, and to issue an auditor's report that includes
our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that
an audit conducted in accordance with the SAs
will always detect a material misstatement when
it exists. Misstatements can arise from fraud or
error and are considered material if, individually
or in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of these standalone
financial statements.
As part of an audit in accordance with SAs, we
exercise professional judgment and maintain
professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material
misstatement of the standalone financial
statements, whether due to fraud or error,
design and perform audit procedures
responsive to those risks, and obtain audit
evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk
of not detecting a material misstatement
resulting from fraud is higher than for one
resulting from error, as fraud may involve
collusion, forgery, intentional omissions,
misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the
circumstances. Under section 143(3)(i) of the
Act, we are also responsible for expressing
our opinion on whether the Company has
adequate internal financial controls with
reference to financial statements in place
and the operating effectiveness of such
controls.
• Evaluate the appropriateness of accounting
policies used and the reasonableness
of accounting estimates and related
disclosures made by the Management and
Board of Directors.
• Conclude on the appropriateness of the
Management and Board of Directors use
of the going concern basis of accounting
in preparation of standalone financial
statements and, based on the audit evidence
obtained, whether a material uncertainty
exists related to events or conditions that
may cast significant doubt on the Company's
ability to continue as a going concern. If we
conclude that a material uncertainty exists,
we are required to draw attention in our
auditor's report to the related disclosures
in the standalone financial statements or, if
such disclosures are inadequate, to modify
our opinion. Our conclusions are based on
the audit evidence obtained up to the date of
our auditor's report. However, future events
or conditions may cause the Company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure
and content of the standalone financial
statements, including the disclosures, and
whether the standalone financial statements
represent the underlying transactions
and events in a manner that achieves fair
presentation.
7. We communicate with those charged with
governance regarding, among other matters,
the planned scope and timing of the audit
and significant audit findings, including any
significant deficiencies in internal control that we
identify during our audit.
8. We also provide those charged with governance
with a statement that we have complied
with relevant ethical requirements regarding
independence, and to communicate with
them all relationships and other matters that
may reasonably be thought to bear on our
independence, and where applicable, related
safeguards.
9. From the matters communicated with those
charged with governance, we determine those
matters that were of most significance in the
audit of the standalone financial statements
of the current period and are therefore the key
audit matters. We describe these matters in our
auditor's report unless law or regulation precludes
public disclosure about the matter or when, in
extremely rare circumstances, we determine
that a matter should not be communicated in
our report because the adverse consequences
of doing so would reasonably be expected to
outweigh the public interest benefits of such
communication.
Other Matter
10. 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 31
March 2026 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 31 March 2026 has been duly certified
by the Appointed Actuary and in her opinion, the
assumptions for such valuation are in accordance
with the guidelines and norms issued by the IRDAI
and the Institute of Actuaries of India in concurrence
with the Authority. We have relied upon the
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, as contained in the standalone annual
financial results statements of the Company.
Our opinion is not modified in respect of this matter.
Report on Other Legal and RegulatoryRequirements
11. The report does not include a statement on the
matters specified on paragraphs 3 and 4 of the
Companies (Auditor's Report) Order, 2020 (the
"Order") issued by the Central Government of
India in terms of section 143(11) of the Act, since
in our opinion and according to the information
and explanations given to us, the said Order is
not applicable to the Company.
12. As required by the Regulations, we have issued a
separate certificate dated 16 April 2026 certifying
the matters specified in paragraphs 3 and 4 of
Part III of Schedule II read with regulation 3 of the
Regulations.
13. As required under the Regulations, read with
section 143(3) of the Act, 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 purposes of our audit.
b) In our opinion, proper books of account
as required by law have been kept by the
Company so far as it appears from our
examination of those books.
c) As the Company's financial accounting
system is centralized at Head Office, no
returns for the purposes of our audit are
prepared at the branches and other offices
of the Company.
d) The standalone balance sheet, the
standalone revenue account, the standalone
profit and loss account and the standalone
receipts and payments account dealt with
by this Report are in agreement with the
books of accounts.
e) 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 31 March 2026 has been
duly certified by the Appointed Actuary.
The Appointed Actuary has also certified
that, in her opinion, the assumptions for
such valuation are in accordance with the
IRDAI and the Institute of Actuaries of India in
concurrence with the Authority.
f) In our opinion and to the best of our
information and according to the
explanations given to us, investments
have been valued in accordance with the
provisions of the Insurance Act and the
Regulations and orders/directions/circulars
issued by the IRDAI in this behalf.
g) In our opinion and to the best of our
information and according to the
explanations given to us, the accounting
policies selected by the Company are
appropriate and are in compliance with
the Accounting Standards specified under
Section 133 of the Act, read with an to the
extent they are not inconsistent with the
accounting principles as prescribed in the
IRDAI Regulations and orders/ directions /
circulars issued by the IRDAI in this regard;
h) In our opinion and to the best of our
information and according to the
explanations given to us, the Standalone
Balance Sheet, the Standalone Revenue
Account, the Standalone Profit and Loss
Account and the Standalone Receipts and
Payments Account dealt with by this report
comply with the Accounting Standards
referred to in section 133 of the Act, to the
extent they are not inconsistent with the
accounting principles prescribed in the
Regulations and orders/directions issued by
IRDAI in this regard.
i) On the basis of the written representations
received from the directors taken on record
by the Board of Directors, none of the directors
are disqualified as on 31 March 2026, from
being appointed as a director in terms of
section 164 (2) of the Act.
j) With respect to the adequacy of the
internal financial controls with reference
to standalone financial statements of the
Company and the operating effectiveness
of such controls, refer to our separate report
in "Annexure A".
k) 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) Rules, 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 pending litigations as on 31
March 2026 on its financial position in its
standalone financial statements - Refer
Schedule 16(b)(1) and Schedule 16(b)(2)
to the standalone financial statements;
ii. The Company has made provision,
as required under the applicable law
or accounting standards, for material
foreseeable losses, if any, on long-term
contracts including derivative contracts
- Refer Schedule 16(b)(15) and Schedule
16(c) (1) to the standalone financial
statements;
iii. There are no amounts which were
required to be transferred to the Investor
Education and Protection Fund by the
Company.
iv. a. The management of the Company
has represented that, to the best
of its knowledge and belief, as
disclosed in the Schedule 16(c)
(21) to the standalone financial
statements, no funds have been
advanced or loaned or invested
(either from borrowed funds
or share premium or any other
sources or kind of funds) by
the Company to or in any other
person(s) or entity(ies), including
foreign entities ("Intermediaries"),
with the understanding, whether
recorded in writing or otherwise,
that the Intermediary shall directly
or indirectly lend or invest in other
persons or entities identified in
any manner whatsoever by or on
behalf of the Company ("Ultimate
Beneficiaries") or provide any
guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
b. The management of the Company
has represented that, to the best
of its knowledge and belief, as
disclosed in the Schedule 16(c)
(21) to the standalone financial
statements, no funds have been
received by the Company from any
person(s) or entity(ies), including
foreign entities ("Funding Parties"),
with the understanding, whether
recorded in writing or otherwise,
that the Company shall directly or
indirectly, lend or invest in other
persons or entities identified in any
manner whatsoever by or on behalf
of the Funding Parties ("Ultimate
Beneficiaries") or provide any
guarantee, security or the like on
behalf of the Ultimate Beneficiaries;
and
c. Based on audit procedures
that have been considered
reasonable and appropriate in the
circumstances performed, nothing
that has come to our notice that
has caused us to believe that the
representations under sub-clause
(a) and (b) of Rule 11(e), as provided
under (a) and (b) above, contain
any material misstatement.
v. The dividend declared and paid by
the Company during the year and is in
accordance with section 123 of the Act.
vi. Based on our examination which
included test checks, the Company
has used an accounting software for
maintaining its books of account which
has a feature of recording audit trail (edit
log) facility and the same has operated
throughout the year for all relevant
transactions recorded in the software.
Further, during the course of our audit,
we did not come across any instance
of audit trail feature being tampered
with. Additionally, the audit trail has
been preserved by the Company as per
the statutory requirements for record
retention.
Except for the financial year ended
31 March, 2024, where the audit trail
features was not enabled to certain
software and its database, the
Company has preserved the audit trail
in accordance with statutory record
retention requirements
14. With respect to the matter to be included in
the Auditor's Report under section 197(16) of
the Act, in our opinion and according to the
explanations given to us, the remuneration
paid by the Company to its directors during the
current year is in accordance with the provisions
of section 197 of the Act read with section 34A of
the Insurance Act,1938. The remuneration paid to
any director is not in excess of the limit laid down
under section 197 of the Act read with section
34A of the Insurance Act,1938. The Ministry of
Corporate Affairs has not prescribed other details
under section 197(16) which are required to be
commented upon by us. Refer note 16B (6) to the
Standalone Financial Statements.
For B S R & Co. LLP For G. M. Kapadia & Co.
Chartered Accountants Chartered Acbsp; Chartered Accountants
ICAI Firm Registration No:101248W/W-100022 ICAI Firm Registration No: 104767W
Kapil Goenka Atul Shah
Partner Partner
Membership No: 118189 Membership No: 039569
ICAI UDIN number: 26118189HNLKXT6891 ICAI UDIN number: 26039569IGYMVQ3776
Place: Mumbai Place: Mumbai
Date: 16 April, 2026 Date: 16 April, 2026<
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