ICICI Prudential Life Insurance Company Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTSOPINION
We have audited the accompanying Standalone Financial Statements of ICICI Prudential Life Insurance Company Limited (the “Company”), which comprise the Standalone Balance Sheet as at 31 March 2025, the Standalone Revenue Account (also called the “Policyholders' Account” or the “Technical Account”), the Standalone Profit and Loss Account (also called the “Shareholders' Account” or the “Non-Technical Account”) and the Standalone Receipts and Payments Account for the year then ended, and schedules annexed thereto, 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 Act”), the Insurance Regulatory and Development Authority of India Act, 1999 (the “IRDAI Act”), the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 (the “IRDAI Regulations”), the 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 the Accounting Standards specified under Section 133 of the Act read with the Companies (Accounting Standards) Rules, 2021, as amended (“Accounting Standards”) and other accounting principles generally accepted in India read with and which are not inconsistent with the accounting principles as prescribed in the IRDAI Regulations:
(a) In the case of Balance Sheet, of the state of affairs of the Company as at 31 March 2025;
(b) In the case of Revenue account, of the net 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) In 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 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 the rules thereunder, 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.
KEY AUDIT MATTERS
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 year. 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.
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We have determined the matters described below to be the key audit matters to be communicated in our report.
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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 complex 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 such as premium income, 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 as part of its operations, such that there exists a risk that gaps in the IT control environment could result in the financial accounting and reporting records being materially misstated.
Due to the pervasive nature, complexity and importance of the impact of the IT systems and related control environment on the Company’s financial statements, we have identified testing of such IT systems and related control environment as a key audit matter for the current year audit.
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We have involved our IT specialists in our assessment of the IT
systems and controls with respect to the standalone financial
statements, which included, but were not limited to the following:
• Obtained an understanding of the Company’s General IT Control (GITC) over key financial accounting and reporting systems, and supporting control systems (referred to as “inscope systems”);
• On the in-scope systems, we have tested the design and operating effectiveness of key IT general controls. This included evaluation of entity’s controls to ensure segregation of duties and access rights are based on duly approved requests, access for exit cases being revoked in a timely manner and access of all users being re-certified during the period of audit, evaluation of password policies. Further, controls related to program change were evaluated to verify whether the changes were approved, tested in an environment that was segregated from production and moved to production by appropriate users;
• Evaluated the design and tested the operating effectiveness for the audit period over the in-scope systems around system interfaces, reconciliations and system processing relevant to the audit of premium income, commission expense, benefits paid and investments, for evaluating completeness and accuracy;
• Evaluated policies and strategies adopted by the Company in relation to security of key information infrastructure, data and client information management and monitoring;
• Where deficiencies, if any, were identified, tested compensating controls or performed alternative procedures; and
• Obtained written representations from management on whether IT general controls and automated IT controls are designed and were operating effectively during the year.
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Valuation and impairment determination of Investments (31 March 2025: INR 30,399,361; 31 March 2024: INR 28,973,610) (INR in lakhs)
Refer Schedule 8,8A and 8B of the Standalone Financial Statements and refer schedule 16 note 2.12 on 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 98% of the Company’s total assets as at 31 March 2025.
Investments are valued in accordance with the Board approved investment policy framed by the Company as per the provisions of the Insurance Act, the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 and the applicable orders/ directions/ circulars issued by the IRDAI.
Investments in unit linked portfolio of INR 16,123,990 lakhs are valued based on observable inputs as per their accounting policy and gains/losses are recognized in Standalone Revenue Account. These unit linked portfolio investments do not represent higher risk of material misstatement however, are considered to be a key audit matter due to their materiality to the Standalone Financial Statements.
Investments in non-linked and shareholders portfolio of INR 14,275,371 lakhs are valued as per their accounting policy, based on which:
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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 the IRDAI Regulations along with the Company’s Board approved valuation policy;
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• the unrealized gains/losses arising due to changes in •
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Examined movement and appropriateness of accounting in
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fair value of listed equity shares and mutual fund units
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Fair Value Change account for specific investments. Further,
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are recorded in the “Fair Value Change Account” in the
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in case of revaluation done for investment properties,
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Standalone Balance Sheet; and
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examined the underlying valuation report for valuation
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• debt securities and unlisted equity shares are valued at
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for testing the reasonableness and also recomputed the
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historical cost.
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movement in “Revaluation reserve”.
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Further, investments in the non-linked and shareholders portfolio •
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Ensured the appropriateness and reasonableness of
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are assessed for impairment as per the Company's investment
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methodology, assumptions and judgements used by
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policy which involves significant management judgement. There
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management with reference to the valuation and impairment
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is increased economic stress on account of external factors,
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of investments as per the Company's Board approved
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which may impact the valuation of these investments.
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valuation and impairment policy. Obtained third party valuation price reports as per the Company's policy as
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Accordingly, valuation of investments (including impairment assessment) was considered to be one of the areas which
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relevant and understood such methodology to conclude on the reasonableness.
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required significant auditor attention and was one of the matter
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of most significance in the Standalone Financial Statements. •
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Obtained written representations from management on compliance of valuation of investments with the regulations and adequacy of impairment recorded for the year.
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INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the Standalone Financial Statements and our auditor's reports thereon. The Annual Report is expected to be made available to us after that date of auditor's 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.
In 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 Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE 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 and presentation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and receipts and payments of the Company in accordance with the Accounting Standards specified under Section 133 of the Act, read with the Companies (Accounting Standards) Rules, 2021, as amended, including the relevant provisions of the Insurance Act, the IRDAI Act and other accounting principles generally accepted in India read
with and which are not inconsistent with the accounting principles as prescribed in the IRDAI Regulations and the circulars/orders/directions issued by the IRDAI, 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 Board of Directors 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 the 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.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
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 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 specified under Section 143(10) of the Act, we exercise professional judgment and maintain professional skepticism 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 the 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 in the Standalone Financial Statements made by the Management.
• Conclude on the appropriateness of the Board of Director'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 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.
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 Standalone Financial Statements of the current year 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
The actuarial valuation of liabilities for life policies in force and policies in respect of which premium has been discontinued but liability exists as at 31 March 2025 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 2025 has been duly certified by the Appointed Actuary and in his opinion, the assumptions for such valuation are in accordance with the guidelines, norms and regulations issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI. 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 in the Standalone Financial Statements of the Company.
The audit of the Standalone Financial Statements for the year ended 31 March 2024 as included in the accompanying Standalone Financial Statements, were carried out and reported by Walker Chandiok & Co LLP, one of the current joint auditors of the Company, jointly with B S R & Co. LLP, who had jointly expressed an unmodified opinion vide their audit report dated 23 April 2024, and this report has been furnished to and relied upon by M. P. Chitale & Co, for the purpose of their joint audit of the Standalone Financial Statements.
Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the IRDAI Regulations, we have issued a separate certificate dated 15 April 2025 certifying the matters specified in paragraphs 3 and 4 of Part III of Schedule II to the IRDAI Regulations.
2. As required by the paragraphs 1 and 2 of Part III of Schedule II to the IRDAI Regulations read
with Section 143(3) of the Act, in our opinion and
according to the information and explanations give
to us, we report to the extent applicable that:
(i) 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 of accompanying Standalone Financial Statements;
(ii) 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;
(iii) As the Company's financial accounting system is centralized, no returns for the purpose of our audit are prepared at the branches and other offices of the Company;
(iv) The standalone balance sheet, the standalone revenue account, the standalone profit and loss account and the standalone receipts and payment account dealt with by this report are in agreement with the books of account;
(v) 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 2025 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 the IRDAI and the Institute of Actuaries of India in concurrence with the Authority;
(vi) In our opinion, the aforesaid Standalone Financial Statements comply with the applicable Accounting Standards specified under Section 133 of the Act and other accounting principles generally accepted in India read with and which are not inconsistent with the accounting principles prescribed in the IRDAI Regulations, the Insurance Act, the IRDAI Act and orders/ directions/ circulars issued by the IRDAI in this regard;
(vii) 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 IRDAI Regulations and orders/ directions/ circulars issued by the IRDAI in this regard;
(viii) 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 and 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;
(ix) On the basis of written representations received from the directors as on 31 March 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2025 from being appointed as a director in terms of Section 164(2) of the Act;
(x) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2025 and the operating effectiveness of such controls, refer to our separate report in “Annexure A”, wherein we have expressed an unmodified opinion; and
(xi) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:
(a) The Company has disclosed the impact of pending litigations as at 31 March 2025 on its financial position in its Standalone Financial Statements - Refer Schedule 16 note 3.2 to the Standalone Financial Statements;
(b) The Company has made provision as at 31 March 2025, 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 note 3.48 to the Standalone Financial Statements;
(c) 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 31 March 2025;
(d) (i) The management has represented that,
to the best of its knowledge and belief, 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 persons or entities, including foreign entities (“the Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether:
• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company; or
• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries (refer Schedule 16 note 3.53(a) to the Standalone Financial Statements).
(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), with
the understanding, whether recorded in writing or otherwise, that the Company shall, whether:
• directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party; or
• provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries (refer schedule 16 note 3.53(b) to the Standalone Financial Statements).
(iii) Based on such audit procedures as 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 (d) (i) and (ii) contain any material misstatement.
(e) The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
(f) Based on our examination which included test checks, the Company has used an accounting software for maintaining its books of account which, have 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. Furthermore, the audit trail has been preserved by the Company as per the statutory requirements for record retention.
3. With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of Section 197(16) of the Act, as amended, we report that managerial remuneration payable to the Company's Directors is governed by the provisions of Section 34A of the Insurance Act, 1938 and is approved by IRDAI. Accordingly, the provisions of Section 197 read with schedule V to the Act are not applicable, and hence reporting under Section 197(16) is not required. However, sitting fees paid to the Directors is in compliance with Section 197(5) of the Act.
For Walker Chandiok & Co LLP For M. P. Chitale & Co.
Chartered Accountants Chartered Accountants
ICAI Firm Registration No: 001076N/N500013 ICAI Firm Registration No: 101851W
Sudhir N. Pillai Murtuza Vajihi
Partner Partner
Membership No: 105782 Membership No: 112555
UDIN: 25105782BMLIBQ1332 UDIN: 25112555BMLYNB4059
Place: Mumbai Place: Mumbai
Date: 15 April 2025 Date: 15 April 2025
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