life insurance corporation of india share price Auditors report


To Life Insurance Corporation of India

Opinion

1 We have audited the accompanying standalone financial statements of Life Insurance Corporation of India ("the Corporation") which comprise the Balance Sheet as at March 31, 2021 for Life Insurance Business, Health Business, Pension Business, Capital Redemption

(including Annuity Certain), Annuity Business and Linked Business, the related Revenue Accounts (also called the "Policyholders Account" or the "Technical Account") for the Life Insurance Business, Health Business, Pension Business, Capital Redemption (including Annuity Certain), Annuity Business and Linked Business, the Profit and Loss Account (also called the "Shareholders Account" or the "Non - Technical Account") and Receipts and Payments Account (also called as the "Cash Flow Statement") for the year then ended, and notes to the standalone financial statements, including a summary of signific ant accounting policies and other explanatory information annexed thereto (hereafter referred to as "standalone financial statements"),in which are included the returns of 3 foreign branches (Mauritius, London and Fiji), audited by respective local auditors; 8 Divisional Offic es, 3 units of Pension & Group Schemes and 42 branches audited by us, 105 Divisional Offic es, 68 units of Pension & Group Schemes and 648 branches audited by other auditors appointed by the Corporation and unaudited returns in respect of 1352 branches certified by the Management.

2. 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 in accordance with the Life Insurance Corporation Act, 1956 ("the LIC Act"), the Insurance Act, 1938 ("the Insurance Act"), the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) ("the IRDA Act"), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 ("the Regulations") in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

i. In the case of the Balance Sheet, of the state of affairs of the Corporation including Life Insurance Business, Health Business,

Pension Business, Capital Redemption (including Annuity Certain), Annuity Business and Linked Business as at March 31, 2021; ii. In the case of the Revenue Accounts, Surplus of the Corporation including Life Insurance Business, Health Business, Pension

Business, Capital Redemption (including Annuity Certain), Annuity Business and Linked Business for the year ended March

31, 2021;

iii. In the case of the Profit and Loss Account, of the profit of the Corporation, for the year ended March 31, 2021; and iv. In the case of the Receipt and Payment Account, of the Receipts and Payments for the year ended March 31, 2021.

Basis for Opinion

3 We conducted our audit in accordance with the Standards on Auditing (SAs) issued by the Institute of Chartered Accountants of India (ICAI). Our responsibilities under those standards are further described in the auditors responsibilities for the audit of the standalone financial statements section of our report. We are independent of the Corporation in accordance with the Code of Ethics issued by the ICAI together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the LIC Act, Insurance Act; IRDA Act; Regulations and orders / circulars issued by Insurance Regulatory and Development Authority of India ("IRDA") and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on standalone financial statements.

Emphasis of Matter

4 We invite attention to: a Note No. B(15C)(VII) of Schedule 15A to the standalone financial statements regarding Liability on account of additional contribution of Rs. 11,124.66 crores, arisen due to fresh pension option to employees in financial year 2019-20, which is being amortised over a period of five years from financial year 2019-20 in accordance with the approval granted by IRDAI vide its letter no. 101/2/F&A-Life/ LIC/2018-19/208 dated 06-07-2020. Accordingly, an amount of Rs. 2,224.92 crores has been charged to Revenue Account for the year ended March 31, 2021, respectively and balance amount of Rs. 6,674.81 crores is to be amortised over the period upto March 31, 2024 b Note No. C(25) of Schedule 15A to the standalone financial statements regarding the uncertainties arising out of the outbreak of COVID-19 pandemic and assessment made by the management on its business and financial statements, including valuation of policy liabilities.

Our opinion is not modified in respect of these matters.

Other Information

5 The Corporations Board of Members is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditors report thereon. The annual report is expected to be made available to us after the date of this auditors report.

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

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained 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 will communicate the matter to those charged with governance.

Responsibilities of Management for Standalone Financial Statements

6 The Corporations Board of Members is responsible for the preparation of these standalone financial statements that give a true and fair view of the Balance Sheet, the related Revenue Account, the Profit and Loss Account and the Receipts and Payments Account of the Corporation in accordance with the accounting principles generally accepted in India, including the provisions of the LIC Act, the Insurance Act; the IRDA Act; Regulations and orders / circulars issued by the IRDA in this regard and the Accounting Standards specified under section 133 of the Companies Act, 2013, to the extent applicable.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the LIC Act, the Insurance Act; IRDA Act; Regulations and orders / circulars issued by the IRDA for safeguarding of the assets of the Corporation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effec tively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement 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, management is responsible for assessing the Corporations ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no realistic alternative but to do so.

Those Board of Members are also responsible for overseeing the Corporations financial reporting process.

Auditors Responsibilities for the Audit of the standalone Financial Statements

7 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 auditors 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.

8 As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: i. 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 suffic ient 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. ii. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. iv. 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 Corporations 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 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 auditors report. However, future events or conditions may cause the Corporation to cease to continue as a going concern. v. Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. vi. Obtain suffic ient appropriate audit evidence regarding the financial information of the divisions / branches / units to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of divisions / branches / units included in the standalone financial statements of which we are the independent auditors. For the other divisions / branches / units included in the standalone financial statements, which have been audited by other auditors, such other auditors or unaudited branches which have been certified by the Management, such Management, remains responsible for the direction, supervision and performance of the audits / certification carried out by them. We remain solely responsible for our audit opinion.

9 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 controls that we identify during our audit.

10 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.

Other Matter

11 We did not audit the financial statements / information of 105 Divisional Offic es (DO), 68 units of Pension & Group Schemes (P&GS) and 648 branches included in the standalone financial statements of the Corporation whose audited financial statements / information, as considered in the standalone financial statements / information have been audited by the divisional / branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of divisions / branches, is based solely on the report of such divisional / branch auditors.

12 We did not audit the financial statements / information of 1352 branches included in the standalone financial statements of the Corporation whose unaudited financial statements / financial information, as considered in the standalone financial statements / information of these branches have been certified by the Management and our opinion in so far as it relates to the amounts and disclosures included in respect of branches, is based solely on the such unaudited financial statements / financial information provided by the Management.

The information of total assets and total revenue in respect of the branches audited by other auditors and unaudited branches are not separately compiled as the divisions receive only trial balances of each branch which are consolidated at division level and thereafter at zonal level.

13 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, 2021 is the responsibility of the Corporations Appointed Actuary (‘the Appointed Actuary). The Appointed Actuary has duly certified 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, 2021 and in his opinion the assumptions for such valuation are in accordance with the guidelines and norms issued by the Insurance Regulatory Development and Authority of India and the Institute of Actuaries of India in concurrence with the Authority. We have relied upon the Appointed Actuarys Certificate in this regard for forming our opinion on the valuation of liabilities for life policies in force and for polices in respect of which premium has been discontinued but liability exists in the standalone financial statements of the Corporation.

Our opinion is not modified in respect of these matters. Report on Other Legal and Regulatory Requirements14 (i). As required under the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulation, 2002, we report that: a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit 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 bylawhave been maintained by the Corporation so faras it appears from our examination of those books; c. In our opinion proper returns of Divisional Offices and branches both audited and unauditedhave been received and found them adequate for the purpose of audit; d. The Balance sheet, Revenue account, Profit and Loss account and the ReceiptsandPaymentsby this report are in agreement with the books of account and returns; e. In our opinion and to the best of our information and according to the explanations given to us, the Investments have been valued in accordance with the provisions of the Insurance Act, Regulations and orders / directions issued by IRDA in this behalf; f. In our opinion and to the best of our information and according to the explanations given to us, the Accounting Policies adopted bytheCorporation areappropriate and areincompliance with the applicable Accounting Standardsspecified undersection 133 of the Companies Act, 2013, to the extent not inconsistent with the accounting principles prescribed in the IRDA Regulations and orders / directions / circulars issued by IRDA in this regard.

14 (ii). As required by the Regulations, we have issued a separate certificate dated une 29, 2021 certifying the matters specified in paragraphs 3 and 4 of Schedule C to the Regulations.

:or nell in o :or Price o
Chartered Accountants Chartered Accountants
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Shailesh Shah (Partner) A . R. Parthasarathy (Partner)
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Chartered Accountants Chartered Accountants
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V.B. Singh (Partner) Ashwin B. Morche (Partner)
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Chartered Accountants Chartered Accountants
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Vijit Baidmutha (Partner) Nabanita Ghosh (Partner)
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Chartered Accountants Chartered Accountants
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Parag Hangekar (Partner) Pawan K. Goel (Partner)
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Sushil Kumar Tulsyan (Partner) Surendranath Bharathi (Partner)
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CHARTERED ACCOUNTANTS
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Date: une 29, 2021