We have audited the accompanying Financial
statements of SBI Life Insurance Company Limited
("the Company"), which comprise the Balance Sheet as
at March 31, 2026, the related Revenue Account (also
called the "Policyholders' Account" or the "Technical
Account"), the Profit and Loss Account (also called the
"Shareholders' Account" or "Non-Technical Account") and
the Receipts and Payments Account (also called the "Cash
Flow Statement") for the year ended on that date, and a
summary of the significant accounting policies and other
explanatory information (hereinafter referred to as "the
financial statements"). In our opinion and to the best
of our information and according to the explanations
given to us, the aforesaid financial statements give the
information required in accordance with The Insurance
Act, 1938 (the "Insurance Act"), the Insurance Regulatory
and Development Authority Act, 1999 (the "IRDA Act"), The
Insurance Regulatory and Development Authority of India
(Actuarial, Finance and Investment Functions of Insurers)
Regulations, 2024 (the "IRDAI AFI Regulations"), orders/
directions/ circulars issued by the Insurance Regulatory
and Development Authority of India (the "IRDAI") and the
Companies Act, 2013 ("the Act"), to the extent applicable,
in the manner so required and give a true and fair view in
conformity with accounting principles generally accepted
in India, as applicable to Insurance companies:
(a) in the case of the Balance Sheet, of the state of
affairs of the Company as at March 31,2026;
(b) in the case of the Revenue Account, of the surplus
for the year ended on that date;
(c) in the case of the Profit and Loss Account, of the
profit for the year ended on that date; and
(d) i n the case of the Receipts and Payments Account,
of the Receipts and Payments for the year
ended on that date.
Basis for Opinion
We conducted our audit of the Financial Statements in
accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. Our responsibilities
under those Standards are further described in the
Auditor's Responsibilities for the Audit of the 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
(ICAI) together with the ethical requirements that are
relevant to our audit of the financial statements under
the provisions of the Act and the Rules made thereunder,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAI's Code
of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Key Audit Matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the financial statements of the current period.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the
matters described below to be the key audit matters to
be communicated in our report.
(a) Valuation of Investments (March 31, 2026:
4,87,16,262 Lakhs March 31, 2025: 4,48,03,858
lakhs)
(Refer Significant Accounting Policies in note
no.16 B (k) (Investments) and Schedule 8, 8A,
8B and 9 note no. 16 C (20 & 21) (Impairment of
investment assets) to the financial statements)
The Company's investment portfolio consists of
Policyholders' investments (traditional and unit
linked policy holders) and Shareholders investments.
Total investment portfolio of the Company (i.e.
Assets under Management (AUM)) represents 99.01
per cent of the Company's total assets.
Investments are made and valued in accordance with
the Insurance Act, 1938, the IRDAI AFI Regulations,
2024, Investment Policy of the Company and
relevant Indian GAAPs.
These valuation methods use multiple observable
market inputs, including observable interest rates,
credit spreads, equity prices, counterparty credit
quality, and corresponding market volatility levels etc.
The portfolio of quoted investments is 42.37 per
cent of the Company's AUM and the portfolio
of investments that are valued primarily using
observable inputs is 56.92 per cent of the Company's
AUM. We do not consider these investments to
be at a high risk of significant misstatement, or
to be subject to a significant level of judgement
because they comprise liquid, quoted investments.
However, due to their materiality in the context
of the financial statements as a whole, they are
considered to be one of the areas which had the
significant impact on our overall audit strategy.
The portfolio of unquoted investments is 0.30
per cent of the Company's AUM. The valuation
of unquoted investments involves judgement
depending on the observability of the inputs into the
valuation and further judgement in determining the
appropriate valuation methodology where external
pricing sources are either not readily available or
are unreliable.
Valuation of investments was considered to be
one of the areas which required significant auditor
attention and was one of the matters of most
significance in the financial statements due to the
materiality of total value of investments to the
financial statements.
Auditors' Responses
Principal Audit Procedures
Our audit procedures for this area included but were
not limited to the following:
• Obtained 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 discussion with those
involved in the pertinent process;
• Evaluated and tested the design,
implementation and operating effectiveness
of key controls over the valuation process,
including the Company's assessment and
approval of assumptions used for the valuation
including key authorisation and data input
controls thereof;
• Obtained independent external confirmations
for investments as at balance sheet date from
the Custodians and Depository Participants
appointed by the Company to confirm the
units of securities for the purpose of valuation
re-computation;
• On a test check basis, recomputed valuation
of different class of investments to assess
appropriateness of valuation methodologies
with reference to IRDAI Investment Regulations
along with the Company's Board approved
valuation policy;
• Examined movement and appropriateness of
accounting in Fair Value Change account for
specific investments.
• 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 written representations from
management on compliance of valuation of
investments with the regulations and adequacy
of impairment recorded for the year.
(b) Information Technology Systems and
Controls (IT Controls)
All insurance companies are highly dependent
on technology due to the significant number of
transactions that are processed on a daily basis.
A significant part of the Company's financial
processes is heavily reliant on IT systems with
automated processes and controls over the
capturing, valuing, and recording of transactions.
Thus, there exists a risk that gaps in the IT control
environment could result in the financial accounting
and reporting records being materially misstated.
The Company has separate software applications
for management of its various activities. Transfer of
data from / to these software's is critical for accurate
compilation of financial information. We have
identified 'IT systems and controls' as key audit
matter because of significant use of IT environment
and the scale and complexity of the IT architecture.
Auditors' Responses
Principal Audit Procedures
• We obtained an understanding of the
Company's IT environment and key changes
if any during the audit period that may be
relevant to the audit.
• We have reviewed the design and operating
effectiveness of key automated controls.
• We have reviewed the reconciliations between
the core operating systems and the accounting
software to mitigate the risk of incorrect data
flow to/from separate application software.
• We have also obtained management
representations wherever considered
necessary.
(c) Contingent Liabilities and Litigations
(Refer Significant Accounting Policies in
note no. 16 B (r) (Provisions and contingent
liabilities/assets) and note no. 16 C (1) to the
financial statements)
The Company has pending litigation matters with
various appellate authorities and at different forums.
The same involves judgements in accordance with
applicable Accounting Standards to determine the
final outcome of such open litigation matters.
The management with the help of its experts, as
needed, have made judgments relating to the
likelihood of an obligation arising and whether
there is a need to recognize a provision or disclose
a contingent liability. We therefore focused on
this area as a result of uncertainty and potential
material impact.
Auditors' Responses
Principal Audit Procedures
• We read the various regulatory
correspondences and related documents
pertaining to litigation cases and corroborated
them with our understanding of legal position
as per various statues;
• We obtained legal opinion sought by
management from the independent legal
counsel to review the sustainability of the
dispute. We discussed the status and potential
exposures in respect of significant litigation
with the company's internal legal team and
obtaining details regarding the progress of
various litigations including management views
on the likely outcome of each litigation and the
magnitude of potential exposure;
• The various litigation matters were reviewed
in order to assess the facts and circumstances
and to identify the potential exposures and to
satisfy ourselves that it is not probable that an
outflow of economic benefits will be required,
or in certain cases where the amount cannot be
estimated reliably, such obligation is disclosed
by the company as a contingent liability.
Information Other than the Financial
Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for
the preparation of the other information. The other
information comprises the information included in
the Management Discussion and Analysis, Directors'
Report including Annexures to Directors' Report,
Corporate Governance, but does not include the financial
statements and our auditor's report thereon. The other
information is expected to be made available to us after
the date of this auditor's report.
Our opinion on the financial statements does not cover
the other information and we will not express any form
of assurance conclusion thereon.
In connection with our audit of the 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 financial statements
or our knowledge obtained during the course of our
audit or otherwise appears to be materially misstated.
When we read the other information, if we conclude
that there is a material misstatement therein, we are
required to communicate the matter to those charged
with governance.
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 Act with
respect to the preparation of these financial statements
that give a true and fair view of the Balance Sheet, the
related Revenue Account, the Profit and Loss Account
and the Receipts and Payments Account of the Company
in accordance with accounting principles generally
accepted in India, including the provisions of The
Insurance Act as amended from time to time, the IRDA
Act, the IRDAI AFI Regulations, 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 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 the
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.
In preparing the financial statements, management
is 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 management either
intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing
the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance about
whether the 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 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 financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the 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 financial
controls 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 system 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 management.
• Conclude on the appropriateness of management's
use of the going concern basis of accounting 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 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 financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
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.
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.
From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the 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 Matters
(a) 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, 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 March 31, 2026 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 IRDAI
and the Institute of Actuaries of India ("IAI") in
concurrence with the Authority. Accordingly, 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
financial statements of the Company (Refer Note no.
5 of Schedule 16(C)).
(b) The financial statements of the Company for the
year ended March 31, 2025, were audited by K.
S. Aiyar & Co., one of the current joint auditors of the
Company jointly with A. John Morris & Co., who had
jointly expressed an unmodified opinion vide their
report dated April 24, 2025
Our opinion is not modified in respect of
the above matters.
Report on Other Legal and Regulatory
Requirements
1. As required by the IRDAI AFI Regulations, we have
issued a separate certificate dated April 22, 2026
certifying the matters specified in paragraphs 3 and
4 of Schedule II, Part III to the IRDAI AFI Regulations.
2. As required under section 143(5) of the Act, based
on our audit as aforesaid, we enclose herewith as
per Annexure I, a report on the directions including
additional directions issued by the Comptroller
and Auditor-General of India ('C&AG') action taken
thereon and its impact on the accounts and financial
statements of the company.
3. As required under the IRDAI AFI Regulations, read
with section 143(3) of the Act, we report that:
(a) We have obtained all the information and
explanations, which to the best of our
knowledge and belief were necessary for the
purpose of our audit and found the same to
be satisfactory;
(b) In our opinion and to the best of our information
and according to the explanations given to us,
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 are
prepared at the branches and other offices
of the Company;
(d) The Balance Sheet, the Revenue Account, the
Profit and Loss Account and the Receipts and
Payments Account dealt with by this Report are
in agreement with the books of account;
(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 March 31, 2026 has
been duly certified by the Appointed Actuary.
The Appointed Actuary has also certified that, in
his opinion, the assumptions for such valuation
are in accordance with the guidelines and norms
issued by 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,
the aforesaid financial statements comply with
the Accounting Standards specified under
section 133 of the Act, as amended, to the extent
not inconsistent with the accounting principles
prescribed in the IRDAI AFI Regulations and
orders/directions/circulars issued by IRDAI
in this regard;
(g) 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, the
Regulations and orders / directions issued by
IRDAI in this regard;
(h) 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 to the extent not inconsistent
with the accounting principles prescribed in the
IRDAI AFI Regulations and orders/directions/
circulars issued by IRDAI in this regard;
(i) On the basis of written representations received
from the directors and taken on record by the
Board of Directors, none of the Directors are
disqualified as on March 31, 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 financial
statements of the Company and the operating
effectiveness of such controls, refer to Annexure
'II' to this report;
(k) With respect to the other matter to be included
in the Auditor's Report in accordance with the
requirements of section 197(16) of the Act, as
amended in our opinion and to the best of our
information and according to the explanations
given to us, the remuneration paid by the
Company to its directors during the 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;
(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) 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 on its financial position
in its financial statements- Refer Note 1 & 2
of Part C of Schedule 16;
(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 if any, including derivative
contracts - Refer Note 35 of Part C
of Schedule 16;
(iii) There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund
by the Company during the year ended
March 31,2026;
(iv) (A) The management has represented
that, to the best of its knowledge
and belief, the Company have not
advanced or loaned or invested from
any kind of funds 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 has represented
that, to the best of its knowledge
and belief, the Company have not
received funds 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 Party
("Ultimate Beneficiaries") or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;
(C) Based on the audit procedures that
were considered reasonable and
appropriate in the circumstances,
nothing has come to our notice
that has caused us to believe
that the representations under
sub-clause (iv) (A) and (B) contain any
material mis-statement.
(v) The dividend declared or paid during the
year by the Company is in compliance with
section 123 of the Companies Act, 2013.
(vi) Proviso to Rule 3(1) of the Companies
(Accounts) Rules, 2014 requires the
Company to maintain books of account
using accounting software which
has a feature of recording audit trail
(edit log) facility.
Based on our review, we state that the Company
has used an accounting software for maintaining
its books of account which is equipped with
access controls and a fully functional audit trail
(edit log) feature, which was actively operational
throughout the year for capturing the audit
trail of all relevant transactions with respect to
Financial Statements.
The Company has implemented a database
activity monitoring (DAM) tool at database
level having centralised monitoring of
database activities which is an alternative way
of demonstrating Database level audit trail
through relying on activity logs generated
by the DAM solution instead of traditional
database auditing mechanisms (Audit Trail).
The audit trail, as stated above, has been
preserved by the Company as per the statutory
requirements for record retention.
For K.S. Aiyar & Co. For J Singh & Associates.
Chartered Accountants Chartered Accountants
Firm Registration No.: 100186W Firm Registration No: 110266W
Rajesh Joshi J. Singh
Partner Partner
Membership No: 038526 Membership No: 042023
UDIN: 26038526RURNYI6083 UDIN: 26042023WQLRGD4271
Date: April 22, 2026 Date: April 22, 2026
Place: Mumbai Place: Mumbai
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