Canara HSBC Life Insurance Company Ltd Auditor Reports

To

The Members of

Canara HSBC Life Insurance Company Limited

Report on the Audit of the Financial Statements

Opinion

1. We have audited the Financial Statements of Canara HSBC 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 “Technical Account”), the Profit and Loss Account (also called the “Shareholders Account” or “Non-Technical Account”) and the Receipts and Payments Account (also called “Cash Flow Statement”) for the year ended on that date and Notes to Accounts including summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as “the financial statements”).

2. In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial statements are prepared in accordance with the requirements of the Insurance Act, 1938, as amended by Insurance Laws (Amendment) Act, 2015 and Insurance (Amendment) Act, 2021 (the “Insurance Act”), read with Insurance Regulatory and Development Authority Act, 1999 (the “IRDA Act”), Insurance Regulatory and Development Authority (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 (“the Regulations”), orders/directions, circulars, guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) in this regard and in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act, 2013 (“the Act”) read with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules, 2021 to the extent applicable and in the manner so required, and give a true and fair view in conformity with the generally accepted accounting principles in India and the practices prevailing with in the Insurance Industry in India:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2026;

ii. In the case of the Revenue Account, of the surplus for the year ended March 31,2026;

iii. In the case of the Profit and Loss Account, of the profit for the year ended March 31,2026; and

iv. In the case of the Receipts and Payments Account, of the receipts and payments for the year ended March 31,2026.

Basis for Opinion

3. We conducted our audit 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 Auditors 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 together with the ethical requirements that are relevant to our audit of the 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

4. 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:

S. No Key Audit Matter	How the matter was addressed in our audit
1 Valuation of Investments: (AUM: March 31, 2026 - Rs. 46,11,815 Lakhs; March 31, 2025 - Rs. 41,16,641 Lakhs)	Our Audit Procedures included the following:
Investments are made and valued in accordance with the provisions of the Insurance Act, 1938, Insurance Regulatory and Development Authority (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 (“the Regulations”), Investment Policy of the Company and relevant Indian Generally Accepted Accounting Principles.	a. We have reviewed the compliances framework in place for compliance with requirements of IRDAI and Investment Policy with regard to investments.
The valuation methods used to value investments use multiple observable market inputs, including interest rates, equity prices, indices, etc.	b. We have assessed the design and operating effectiveness of internal controls around the investment function. This includes aspects relating to governance, monitoring, regulation, procurement / disposal, valuation, accounting and disclosure of investments.
Considering the materiality of such investments, we have considered investments as having significant impact on overall risk levels, controls and related audit procedures designed by us. Valuation of investments was considered as one of the areas of most significance to overall audit strategy.	c. We have conducted independent reconciliation of quantum of holdings of investments with the holdings confirmed by Custodians / third parties.
	d. We have reviewed the methodologies followed by the Company w.r.t valuation of investments and have validated the pricing sources.

 

2 Information Technology (IT):	We have carried out the following procedures to verify the effectiveness of IT controls:
The Companys financial accounting and reporting systems are highly dependent on the effective working of the operating and accounting system/s due to extensive volumes, variety and complexity of transactions. The company has separate software applications for management of its various activities. Transfer of data from / to these softwares is critical for accurate compilation of financial information.	• We have obtained an understanding of the Companys IT environment and key changes if any during the audit period that may be relevant to the audit.
We have identified IT systems and controls as key audit matter because of significant use of IT system and the scale and complexity of the IT architecture. Our audit outcome is dependent on the effective functioning of such operating and accounting system	• Our audit procedures included testing and reviewing the design and operating effectiveness of the key automated and manual business cycle controls and logic for system generated reports relevant to the audit by verifying the reports and other financial and non-financial information generated from the system on a test check basis.
	• 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.

Other Information

5. The Companys Board of Directors is responsible for the other information. The other information obtained at the date of this auditors report is management report but does not include the financial statements and our auditors report thereon.

6. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance on the conclusion thereon.

7. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

8. When we read the Other Information, if we conclude that there is a material misstatement therein, we are required to communicate the matters to those charged with governance.

Managements Responsibility for the Financial Statements

9. The Companys 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 financial position, financial performance, and cash flows of the Company in accordance with the Regulations, the provisions of Insurance Act, the IRDA Act, various circulars/guidelines issued by IRDAI and the accounting principles generally accepted in India, including the accounting standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 further amended by Companies (Accounting Standards) Amendment Rules, 2021 to the extent applicable and in the manner so required. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the applicable laws 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

10. In preparing the financial statements, the Board of Directors is responsible for assessing the Companys 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.

11. The Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

12. Our objective is 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 audit 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.

13. 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 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 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 managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors 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 auditors 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 as required under the regulations, the provisions of Insurance Act, the IRDA Act, various circulars/guidelines issued by IRDAI and accounting standards referred to under the Act, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

14. 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.

15. 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.

16. 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 auditors 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

17. The actuarial valuation of liabilities for life policies in force is the responsibility of the Companys Appointed Actuary (the Appointed Actuary). The actuarial valuation of these liabilities as at March 31, 2026 for policies in force and policies in respect of which premium has been discontinued but liability exists as at that date has been duly certified by the Appointed Actuary. The Appointed Actuary has certified to the Company that the assumptions for such valuations are in accordance with the guidelines and norms issued by the Insurance Regulatory and Development Authority of India (IRDAI) and the Institute of Actuaries of India in concurrence with the IRDAI. Accordingly, we have relied upon the Appointed Actuarys certificate in this regard for forming and our opinion in so far as it relates to the actuarial valuation is based solely on the certificate of the Appointed Actuary (Refer Note No. 7 of Schedule 16 (B) Significant Accounting Policies and Note 2 of Schedule 16 (C) Notes to Accounts).

18. We draw attention to schedule 16 (A) to the financial statements which states that consequent to dilution of shareholding of Canara Bank and Punjab National Bank pursuant to the Offer for Sale, the Company is no longer covered under Section 139(5) of the Companies Act, 2013. Consequently, directions & sub-directions issued by the Comptroller and Auditor-General of India under Section 143(5) of the Act are not applicable to the Company for the current year and, accordingly, no separate report is being issued in respect of matters arising from such directions.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

19. We have issued a separate Certificate, as required, certifying the matters specified in paragraph 3 and 4 of Part III of Schedule II of Chapter III of the Insurance Regulatory and Development Authority (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 (“the Regulations”).

20. Further to our comments in the certificate referred to in para 19 above, and, as required by the IRDA Act, the regulations issued under Section 114A of the Insurance Act and read with section 143 (3) of “the Act” we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and have found them 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 maintained by the Company so far as it appears from our examination of those books;

c) The Companys financial accounting system is centralized, accounting returns are not required to be submitted by the branches and other offices of the Company for the purposes of our audit;

d) The Balance Sheet, the Revenue Account, the Profit and Loss Account and the Receipts and Payments Account dealt in this Report are in agreement with the books of account;

e) The actuarial valuation of liabilities as at March 31, 2026 for policies in force and policies in respect of which premium has been discontinued but liability exists as at that date has been duly certified by the Appointed Actuary. The Appointed Actuary has certified to the Company that the assumptions for such valuations are in accordance with the guidelines and norms issued by the Insurance Regulatory and Development Authority of India (IRDAI) and the Institute of Actuaries of India in concurrence with the IRDAI.

f) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, the Revenue Account, the Profit and Loss Account and the Receipts and Payments Account dealt with by this report comply with the Accounting Standards referred to in Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 as amended and Companies (Accounting Standards) Amendment Rules, 2021) to the extent they are not inconsistent with the accounting principles prescribed in the Regulations and orders/directions issued by IRDAI in this regard; and

g) On the basis of written representations received from directors as on March 31, 2026 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2026, from being appointed as a director in terms of section 164 (2) of the Act.

h) The Investments of the Company have been valued in accordance with the provisions of the Insurance Act, Insurance Regulatory and Development Authority (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 (“the Regulations”), the Investment policy of the company and Master Circular on Actuarial, Finance and Investment Functions of Insurers issued by IRDAI, May 2024.

i) 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 referred under the section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 as amended and Companies (Accounting Standards) Amendment Rules, 2021), to the extent they are not inconsistent with the accounting principles prescribed in the provisions of Insurance Act, the IRDA Act, the regulations, various circulars/guidelines issued by IRDAI and amendments to these Acts, Regulations and Standards, from time to time;

j) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure 1”.

k) With respect to the other matters to be included in the Auditors 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, pursuant to Section 34A of the Insurance Act, 1938, the provisions of Section 197 of the Act are not applicable for the remuneration paid to the Managing Director of the Company.

• The Company has paid sitting fees to the independent directors which is in accordance with the provisions for section 197(5) of the Act. The Company has not paid any other remuneration to non-executive directors and independent directors.

l) With respect to other matters to be included in the Auditors 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:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements (Refer Note 1 and Note 42 of the Schedule 16 (C) Notes to Accounts);

ii. The Company is in the life insurance business where in long term contracts are entered into with the policyholders and the liability estimated by the Appointed Actuary for the same has been provided for by the Company (Refer Para 17 above).

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) the Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entity, including foreign entity (“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 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, no funds (which are material either individually or in the aggregate) have been received by the company from any person or entity, 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 by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material mis-statement.

v. a. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with the Section 123 of the Act.

b. The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.

vi. Based on our examination which included test checks, the Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Furthermore, the audit trail has been preserved by the Company in accordance with statutory requirements for record retention.

m) The Company being Insurance Company, the requirements of the Companies (Auditors Report) Order, 2020 issued by the Central Government of India in terms of Section 143(11) of the Companies Act, 2013, are not applicable to the Company. Our report therefore does not comment on this aspect.

n) In terms of reporting under Point 11 (d) of Annexure INV-I to Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, relating to applicable NAV or applications received on the last business day of the quarters, we confirm, that the company has complied with Point No. 5 of the said Annexure INV-I.

For Brahmayya & Co.	For Raj Har Gopal & Co.
Chartered Accountants	Chartered Accountants
(Registration No. 000513S)	(Registration No. 002074N)
(CA. C V Ramana Rao)	(CA. Gopal Krishan)
Partner	Partner
Membership Number: 018545	Membership Number: 081085
Place: New Delhi	Place: New Delhi
Date: 28.04.2026	Date: 28.04.2026
UDIN: 26018545IBSNGB7136	UDIN: 26081085FHUMNH2838

Annexure 1 to the Independent Auditors Report of even date

(Refer paragraph 20(j) under the heading “Report on Other Legal and Regulatory Requirements”)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of “the Act”.

1. We have audited the internal financial controls over financial reporting in financial statements of Canara HSBC Life Insurance Company Limited (“the Company”) as at March 31,2026 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

1. The Companys Board of Directors and management are responsible for establishing and maintaining internal financial controls based on, “the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (the “Act”) including the provisions of the Insurance Act, 1938 as amended (the “Insurance Act”), the Insurance Regulatory and Development Authority Act, 1999 (the “IRDA Act”), Insurance Regulatory and Development Authority of India ( Actuarial , Finance & Investment Functions of Insurers ) Regulations , 2024 (the “IRDAII Financial Statements Regulations”)IRDAI, circulars/ orders/ directions issued by the Insurance Regulatory and Development Authority of India (the “IRDAII”) in this regard.

Auditors Responsibility

2. Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting in financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“Guidance Note”) and the Standards on Auditing, issued by the Institute of Chartered Accountants of India and deemed to be prescribed under section 143(10) of “the Act”, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls, over financial reporting in financial statements was established and maintained and if such controls operated effectively in all material respects.

3. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting in financial statements and their operating effectiveness.

4. Our audit of internal financial controls over financial reporting in financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence, we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls over financial reporting in financial statements.

Meaning of Internal Financial Controls over Financial Reporting

6. A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financial reporting in financial statements including the possibility of collusion or improper management override of controls, material misstatements due to which an error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting in financial statements and such internal financial controls were operating effectively as at March 31, 2026 based on “the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India”.

Other Matter

9. We report that 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 March 31,2026 has been duly certified by the Appointed Actuary as per the Regulations, and has been relied upon by us as mentioned in Para 17 “Other Matters” of our Auditors Report on the financial statements for the year ended March 31,2026. Accordingly, our opinion on the internal financial controls over financial reporting does not include reporting on the operating effectiveness of the managements internal controls over the valuation and accuracy of the aforesaid actuarial valuation. Our opinion is not modified in respect of above matter.

For Brahmayya & Co.	For Raj Har Gopal & Co.
Chartered Accountants	Chartered Accountants
(Registration No. 000513S)	(Registration No. 002074N)
(CA. C V Ramana Rao)	(CA. Gopal Krishan)
Partner	Partner
Membership Number: 018545	Membership Number: 081085
Place: New Delhi	Place: New Delhi
Date: 28.04.2026	Date: 28.04.2026
UDIN: 26018545IBSNGB7136	UDIN: 26081085FHUMNH2838