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SBI Life Insurance Company Ltd.

BSE: 540719 Sector: Financials
NSE: SBILIFE ISIN Code: INE123W01016
BSE 00:00 | 26 May 754.30 24.05
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NSE 00:00 | 26 May 754.45 24.50
(3.36%)
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735.00

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756.00

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OPEN 734.40
PREVIOUS CLOSE 730.25
VOLUME 28742
52-Week high 1030.00
52-Week low 520.00
P/E 53.05
Mkt Cap.(Rs cr) 75,432
Buy Price 754.30
Buy Qty 296.00
Sell Price 754.00
Sell Qty 10.00
OPEN 734.40
CLOSE 730.25
VOLUME 28742
52-Week high 1030.00
52-Week low 520.00
P/E 53.05
Mkt Cap.(Rs cr) 75,432
Buy Price 754.30
Buy Qty 296.00
Sell Price 754.00
Sell Qty 10.00

SBI Life Insurance Company Ltd. (SBILIFE) - Auditors Report

Company auditors report

To the Members of SBI Life Insurance Company Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial statements of SBI LifeInsurance Company Limited ("the Company") which comprise the Balance Sheetas at March 31 2019 the related Revenue Account (also called the "Policyholders'Account" or the "Technical Account") the Profit and Loss Account (alsocalled the "Shareholders' Account" or "Non-Technical Account") and theReceipts and Payments Account for the year ended on that date and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredin accordance the Insurance Act the IRDAI Act the IRDAI Financial Statements Regulationsand the Act to the extent applicable and in the manner so required and give a true andfair view in conformity with accounting principles generally accepted in India asapplicable to Insurance companies:

i. in the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2019;

ii. in the case of the Revenue Account of the net surplus for the year ended on thatdate;

iii. in the case of the Profit and Loss Account of the profit for the year ended onthat date; and

iv. in the case of the Receipts and Payments Account of the Receipts and Payments forthe year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013("the act"). Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Valuation of Investments Key Audit Procedures
The Company's investment portfolio consists of Policyholders' investments (traditional and unit linked policy holders) and Shareholders investments. We assessed appropriateness of the pricing methodologies with reference to IRDAI Investment Regulations Financial Statement Regulations Company's internal investment and valuation policy;
Total investment portfolio of the Company (i.e. Assets under Management (AUM)) represents 99 per cent of the Company's total assets. • Assessed the process and tested the operating effectiveness of the key controls including the Company's review and approval of the estimates and assumptions used for the valuation including key authorisation and data input controls;
Investments are made and valued in accordance with the Insurance Act 1938 IRDAI (Investment) Regulations 2016 ("Investment Regulations") IRDAI (Preparation of Financial Statement Regulations) 2002 ("Financial Statement Regulations") Investment Policy of the Company and relevant Indian GAAPs. • Fair value is best evidenced by quoted market prices in an active market. Where quoted market prices are not available the quoted prices of similar products or valuation models with observable market based inputs are used to estimate fair value. The calculation of estimated fair value is based on market conditions at a specific point in time and may not be reflective of future fair values;
These valuation methods uses multiple observable market inputs including observable interest rates index levels credit spreads equity prices counterparty credit quality and corresponding market volatility levels etc. • For quoted investments the valuation was done in accordance with the independent pricing sources / market prices in an active market;
The portfolio of quoted investments is 26.04 per cent of the Company's AUM and the portfolio of investments that are valued primarily using observable inputs is 73.85 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 0.11 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. • For unquoted investments we critically evaluated the valuation assessment and resulting conclusions in order to determine the appropriateness of the valuations recorded with reference to the Company's valuation guidelines.
Information technology systems and controls (IT Controls) Key Audit Procedures
All insurance companies are highly dependent on technology due to the significant number of transactions that are processed daily. 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. • Sample testing of key control over IT systems having impact on financial accounting and reporting;
Our audit approach relies on automated controls and therefore procedures are designed to test control over IT systems segregation of duties interface and system application controls over key financial accounting and reporting systems. • Assessed the IT system processes for effectiveness of some of the key controls with respect to financial accounting and reporting records by sample testing; and
• Reviewed the report of independent information system auditors which has further confirmed the various system control measures adopted by the Company.
Contingent Liabilities and Litigations Key Audit Procedures
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. • 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 including opinion of our own team 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 Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. The otherinformation as identified above is expected to be made available to us after the date ofthis auditor's report. Our opinion on the standalone financial statements does not coverthe other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the Balance Sheet therelated Revenue Account the Profit and Loss Account and the Receipts and Payments Accountof the Company in accordance with accounting principles generally accepted in Indiaincluding the provisions of The Insurance Act 1938 as amended from time to time includingamendment brought by Insurance Laws (Amendment) Act 2015 (the "Insurance Act")the Insurance Regulatory and Development Authority Act 1999 (the "IRDA Act")the Insurance Regulatory and Development Authority (Preparation of Financial Statementsand Auditor's Report of Insurance Companies) Regulations 2002 (the "IRDAI FinancialStatements Regulations") orders/directions/circulars issued by the InsuranceRegulatory and Development Authority of India (the"IRDAI"/"Authority") in this regard and the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 further amended by Companies (Accounting Standards) Amendment Rules 2016.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. The Board of Directors are responsible for overseeingthe Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also: Identify and assess therisks of material misstatement of the standalone financial statements whether due tofraud or error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management. Conclude on theappropriateness of management's use of the going concern basis of accounting and based onthe audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the standalone financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

Evaluatetheoverallpresentationstructureandcontent of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the standalone financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Other Matter

The actuarial valuation of liabilities for life policies in force is the responsibilityof the Company's Appointed Actuary (the "Appointed Actuary"). The actuarialvaluation of these liabilities for life policies in force and for policies in respect ofwhich premium has been discontinued but liability exists as at March 31 2019 has beenduly certified by the Appointed Actuary and in his opinion the assumptions for suchvaluation are in accordance with the guidelines and norms issued by IRDAI and theInstitute of Actuaries of India in concurrence with the Authority. We have relied upon theAppointed Actuary's certificate in this regard for forming our opinion on the valuation ofliabilities for life policies in force and for policies in respect of which premium hasbeen discontinued but liability exists on financial statements of the Company.

Report on Other Legal and Regulatory Requirements

(i) As required by the IRDAI Financial Statements Regulations we have issued aseparate certificate dated April 25 2019 certifying the matters specified in paragraphs 3and 4 of Schedule C to the IRDAI Financial Statements Regulations.

(ii) As required under the IRDAI Financial Statements Regulations read with section143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion and to the best of our information and according to the explanationsgiven to us proper books of accounts as required by law have been kept by the Company sofar as appears from our examination of those books;

(c) the financial accounting systems of the Company are centralized and thereforeaccounting returns are not required to be submitted by branches and other offices;

(d) the Balance Sheet Revenue Account Profit and Loss Account and the Receipts andPayments Account dealt with by this Report are in agreement with the books of account;

(e) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 further amended by Companies (Accounting Standards) AmendmentRules 2016 and with the accounting principles as prescribed in the IRDAI FinancialStatements Regulations and orders / directions issued by IRDAI in this behalf;

(f) In our opinion and to the best of our information and according to the explanationsgiven to us investments have been valued in accordance with the provisions of theInsurance Act the Regulations and / or orders / directions issued by IRDAI in thisbehalf;

(g) On the basis of written representations received from the directors as on March31 2019 and taken on record by the Board of Directors none of the Directors aredisqualified as on March 31 2019 from being appointed as a director in terms of section164 (2) of the Act.

(h) With regard to the directions and sub-directions issued under section 143(5) of theAct by the Comptroller and Auditor General of India refer to Annexure ‘I' to thisreport.

(i) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer toAnnexure ‘II' to this report.

(j) With respect to the other matter to be included in the Auditor's Report inaccordance 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 explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

(k) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements – For details Refer Note 1 of Part C of Schedule16.

ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts Refer Note 33.of Part C of Schedule 16.

iii) There are no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company.

For G M J & Co. For P S D & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No.103429W Firm Regn. No.004501C
Sanjeev Maheshwari Thalendra Sharma
Partner Partner
Membership No. 038755 Membership No. 079236
Place: Mumbai
Date: April 25 2019

Independent Auditors' Certificate

[Referred to in paragraph of our Independent Auditor's Report on Other Legal andRegulatory Requirements forming part of the Independent Auditors' Report dated April 252019]

This certificate is issued in accordance with the terms of our engagement letter withSBI Life Insurance Company Limited (the "Company") wherein we are requested toissue certificate for compliance with the provisions of paragraphs 3 and 4 of Schedule Cof Insurance Regulatory and Development Authority (Preparation of Financial Statements andAuditor's Report of Insurance Companies) Regulations 2002 (the "Regulations")read with Regulation 3 of the Regulations.

Management's Responsibility:

The Company's Board of Directors is responsible for complying with the provisions ofThe Insurance Act 1938 as amended from time to time including amendment brought byInsurance Laws (Amendment) Act 2015 (the "Insurance Act") the InsuranceRegulatory and Development Authority Act 1999 (the "IRDA Act") theRegulations orders/directions/circulars issued by the Insurance Regulatory andDevelopment Authority of India (the "IRDAI"/Authority) which includes thepreparation of the Management Report. This includes collecting collating and validatingdata and designing implementing and monitoring of internal controls suitable for ensuringcompliance as aforesaid.

Auditor's Responsibility:

Pursuant to the requirements it is our responsibility to obtain reasonable assuranceand form an opinion based on our audit and examination of books and records as to whetherthe Company has complied with the matters contained in paragraphs 3 and 4 of Schedule C ofthe Regulations read with regulation 3 of the Regulations. We audited financial statementsof the Company as of and financial year ended March 31 2019 on which we issued anunmodified audit opinion vide our report dated April 25 2019. Our audits of thesefinancial statements were conducted in accordance with Standards on Auditing and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India (‘ICAI'). Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of materialmisstatement. Our audits were not planned and performed in connection with anytransactions to identify matters that may be of potential interest to third parties.

We conducted our examination in accordance with the Guidance Note on Audit Reports andCertificates for Special Purposes issued by the Institute of Chartered Accountants ofIndia (the ‘ICAI'). The Guidance Note requires that we comply with the independenceand other ethical requirements of the Code of Ethics issued by ICAI. We have complied withthe relevant applicable requirements of the Standard on Quality Control (‘SQC') 1Quality Control for Firms that Perform Audits and Reviews of Historical FinancialInformation and Other Assurance and Related Services engagements.

Opinion:

In accordance with the information and explanations given to us and to the best of ourknowledge and belief and based on our examination of the books of account and otherrecords maintained by SBI Life Insurance Company Limited (‘the Company') for theyear ended March 31 2019 we certify that:

1. We have reviewed the Management Report attached to the financial statements for theyear ended March 31 2019 and on the basis of our review there is no apparent mistake ormaterial inconsistencies with the financial statements;

2. Based on management representations and compliance certificates submitted to theBoard of Directors by the officers of the Company charged with compliance and the samebeing noted by the Board nothing has come to our attention that causes us to believe thatthe Company has not complied with the terms and conditions of registration stipulated byIRDAI;

3. We have verified the cash balances to the extent considered necessary andsecurities relating to the Company's loans and investments as at March 31 2019 by actualinspection or on the basis of certificates / confirmations received from the Custodianand/or Depository Participants appointed by the Company as the case may be. As at March31 2019 the Company does not have reversions and life interests;

4. The Company is not the trustee of any trust; and

5. No part of the assets of the policyholders' funds has been directly or indirectlyapplied in contravention to the provisions of the Insurance Act relating to theapplication and investments of the Policyholders' funds.

For G M J & Co. For P S D & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No.103429W Firm Regn. No.004501C
Sanjeev Maheshwari Thalendra Sharma
Partner Partner
Membership No. 038755 Membership No. 079236
Place: Mumbai
Date: April 25 2019

[Ref: Independent Auditor's Certificate in accordance with the Schedule I (B) (11) ofIRDAI (Investment) Regulations 2016 ("the Regulations")]

1. This certificate is issued in accordance with terms of our engagement letter withSBI Life Insurance Company Limited (the "Company") and Insurance Regulatory andDevelopment Authority of India (Investment) Regulations 2016 dated August 1 2016 (the"Regulations") wherein we are requested to issue certificate regardingapplicable Net Asset Value ("NAV") for applications received as at March 312019.

Management's responsibility:

2. The preparation and maintenance of all accounting and other relevant supportingrecords and documents is the responsibility of the management of the Company. Thisresponsibility includes the design implementation and maintenance of internal controlsrelevant to the applicability of NAV for applications received as at March 31 2019

3. The Company's management is responsible for complying with conditions stated in theRegulations.

Auditor's Responsibility:

4. Pursuant to the requirement of this certificate it is our responsibility to providereasonable assurance that and form an opinion on the conditions stated in the Regulations.

5. In this connection we have performed the following procedures:

a) Obtained representation from the management that the Company has declared March 312019 as a business day for accepting application forms and that it has declared NAV forMarch 31 2019;

b) Obtained the list of applications for New Business Renewal Premium Top-upSurrender Free – Look Cancellation Fund Switches Withdrawal and PartialWithdrawal in respect of Unit linked Products on March 31 2019 (together referred to as"Application Forms") from the Company;

c) Selected samples of Application Forms from the listing mentioned in paragraph 5(b)above and verified whether:

i. The applications received on Sunday March 31 2019 upto 3.00 p.m. have beenappropriately stamped; and the NAV of March 31 2019 is applied for such applications forthe selected samples; and

ii. The applications received on Sunday March 31 2019 after 3.00 p.m. hours havebeen appropriately stamped; and the NAV of next business day of financial year i.e. April1 2019 is applied for such applications for the selected samples.

d) We have read the certificate dated April 22 2019 of the concurrent auditors of theCompany M/s. Haribhakti and Co.LLP Chartered Accountants which has been furnished to uscertifying compliance with Regulation 5 of Schedule I(B).

6. We have examined the other relevant records of the Company to the extent necessaryfor the purpose of issuing this certificate and have conducted our examination inaccordance with the Guidance Note on Report or Certificates for Special Purposes (Revised2016) issued by the Institute of Chartered Accountants of India (the "ICAI").The Guidance Note requires that we comply with the independence and other ethicalrequirements of the Code of ethics issued by the ICAI.

7. We have complied with the relevant applicable requirements of the Standard onQuality Control (SQC) 1 Quality Control for Firms that Perform Audits and Reviews ofHistorical Financial Information and Other Assurance and Related Services engagements.

Opinion:

8. Based on the procedures performed by us as mentioned in paragraph 5 aboveaccording to the information and explanations provided to us and representation by theCompany's management we confirm that:

(a) The Company has declared March 31 2019 as a business day for accepting proposalforms;

(b) The Company has declared NAV for March 31 2019 on a basis consistent with itsaccounting policy as disclosed in its financial statements for the year ended March 312019

(c) The applications received on Sunday March 31 2019 upto 3.00 p.m. have beenstamped as such and that the NAV of March 31 2019 is applied for proposals received upto3.00 p.m.

(d) The applications received on Sunday March 31 2019 after 3.00 p.m. have beenstamped as such and that the NAV of next business day of financial year i.e. April 1 2019is applied for proposals received after 3.00 p.m.

9. This certificate is addressed to and provided to the Board of Directors of theCompany solely for inclusion in the annual accounts of the Company as per Schedule I (B)(11) of the Regulations and should not to be used by any other person or distributed forany other purpose. We have no responsibility to update this certificate for events andcircumstances occurring after the date of this certificate.

For G M J & Co. For P S D & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No.103429W Firm Regn. No.004501C
Sanjeev Maheshwari Thalendra Sharma
Partner Partner
Membership No. 038755 Membership No. 079236
Place: Mumbai
Date: April 25 2019

Annexure "I" forming part of Independent Auditor's Report

Report on Directions issued by Comptroller and Auditor General of India under section143 (5) of Companies Act.

1. The Company's financial processes are heavily reliant on IT systems with automatedprocesses and controls over the capturing valuing and recording of transactions. TheCompany has different IT systems in place for processing the accounting transactions suchas premium commission claims investments etc. All the transactions from these ITsystems flows into the accounting system which is used for preparation of financialstatements and other reporting purposes. There are no accounting entries which areprocessed outside the Accounting System.

2. The Company has not taken any loans thus restructuring of an existing loan or casesof waiver/write off of debts /loans/interest etc. made by a lender to the company due tothe company's inability to repay the loan is not applicable.

3. The Company has not received any funds for specific schemes from central / stateagencies thus proper accounting and utilisation of fund as per terms and conditions ofthe scheme is not applicable.

Report on Sub-directions issued by Comptroller and Auditor General of India undersection 143 (5) of Companies Act 2013 for the year 2018-19

4. All the securities purchased by the Company are held in dematerialized form withclear title of ownership. The custodian statement matches with the books of accounts ofthe Company.

5. The Company has adhered to the prescribed stop loss limits whenever applicable.

6. The Company has complied with IRDAI circular (No. IRDA/F&A/CIR/MISC/052/03/2018dated 27th March 2018) regarding exemption of reinsurance schemes in respect ofspecified schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY) from the previewof GST. As per the government approved PMJJBY scheme the Company did not charge GST fromits customers.

Annexure "II" forming part of Independent Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act").

We have audited the internal financial controls over financial reporting of SBI LifeInsurance Company Limited ("the Company") as of March 31 2019 in conjunctionwith 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

Other Matter

We report that the actuarial valuation of liabilities for life policies in force andpolicies where premium is discontinued but liability exists as at March 31 2019 has beencertified by the Appointed Actuary as per the regulations and has been relied upon by usas mentioned in para other matters of our audit report on the financial statements for theyear ended March 31 2019. Our opinion is not modified in respect of above matter.

For G M J & Co. For P S D & Associates
Chartered Accountants Chartered Accountants
Firm Regn. No.103429W Firm Regn. No.004501C
Sanjeev Maheshwari Thalendra Sharma
Partner Partner
Membership No. 038755 Membership No. 079236
Place: Mumbai
Date: April 25 2019