We have audited the accompanying financial statements of Star
Health And Allied Insurance Company Limited ("the Company"),
which comprise the Balance Sheet as at March 31,2025, the Revenue
Accounts, the Profit and Loss Account and the Receipts and Payments
Account for the year then ended, the schedules annexed there to
and notes to the financial statements, including a summary of the
significant accounting policies and other explanatory notes forming
part of the financial statements (herein after referred to as "Financial
Statements").
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements give
the information required by provisions of the Insurance Act, 1938,
as amended by the Insurance Laws (Amendment) Act, 2015 (the
"Insurance Act") read with Insurance Regulatory and Development
Authority Act, 1999 (the "IRDAI Act"), and other accounting principles
generally accepted in India, to the extent considered relevant and
appropriate for the purpose of these annual financial statements
and which are not inconsistent with the accounting principles as
prescribed in the Insurance Regulatory and Development Authority
of India (Actuarial, Finance and Investment Functions of Insurers)
Regulations, 2024 (the "IRDA Financial Statement Regulations") and
orders/ directions / circulars issued by the Insurance Regulatory and
Development Authority of India ("IRDAI"/ the "Authority"), to the
extent applicable and the Companies Act, 2013, as amended, ('the
Act') to the extent applicable and in the manner so required, and
give true and fair view in conformity with the accounting principles
generally accepted in India, as applicable to insurance companies:
i. i n the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2025;
ii. in the case of the Revenue Accounts, of the operating profit in
the Miscellaneous business for year ended on that date;
iii. in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
iv. i n the case of the Receipts and Payments Account, of the
receipts and payments for the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the financial statement 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 ("ICAI") together with the
ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Act and the Rules 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 on the financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant risks
identified by us that may lead to material misstatement (whether or
not due to fraud) and assessed by us as part of the audit procedures.
These matters included those which had the greatest effect on the
overall audit strategy, the allocation of resources in the audit and
directing the efforts of the engagement team.
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.
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Sr. No. Key Audit Matters
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Auditors' Response
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Information Technology Systems and Controls (IT Controls):
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1. The Company is highly dependent on its information
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The audit procedures performed by us included the following:
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technology ('IT') systems for
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We have involved our IT specialists in the assessment of IT
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carrying out its operations and due to the large volume
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systems and controls over financial reporting
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of transactions that are processed daily across multiple
IT systems, there exists a potential risk that gaps in the
IT control environment could result in the financial
accounting and reporting records being misstated.
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1 nvolved IT specialists as part of the audit for the purpose
of testing the IT general controls and application controls
(automated and semi-automated controls) to determine the
accuracy of the information produced by the Company's IT
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The controls implemented by the Company in its
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systems.;
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IT environment determine the integrity, accuracy,
completeness, and validity of the data that is processed
by the applications and is ultimately used for financial
reporting. These controls contribute to mitigating risk of
potential misstatements caused by fraud or error.
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•
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Obtained an understanding of the Company's IT applications,
databases and operating systems relevant to financial
reporting and the control environment, including an
understanding of the process, mapping of applications and
understanding financial risks posed by people-process and
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On account of the extensive use of IT systems across varied
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technology.
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phases of business, the testing with respect to general
computer controls of the IT systems used in financial
reporting was identified to be a key audit matter.
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Tested design and operating effectiveness of key controls over
user access management, change management, program
development, computer operations;
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Performed procedures for a selected group of key controls
over financial and reporting system to determine that these
controls remained unchanged during the year or were
changed following the standard change management
process.
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Tested key automated and manual business cycle controls
including testing of alternate procedures to assess risks that
would materially impact the financial statements.
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Claim settlement:
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2 • Claims are a significant expense for the Company
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Our audit procedures included the following:
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• Provisioning of Outstanding Claims including Claims
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We tested the design and operating effectiveness of controls
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Incurred but Not Reported (IBNR) and Incurred
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around the due and intimated claims recording process.
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but Not Enough Reported (IBNER) are significant
in magnitude and requires use of judgements and
estimates
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•
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Assessed and tested the operating effectiveness of key
controls relating to the claims handling process, including
controls over completeness and accuracy of the claim
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• With regards to the claims provision, the Company
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outstanding recorded.
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makes a provision for claims upon intimation, on
receipt of documents, communication from co¬
insurer leader in cases of incoming co-insurance
business etc. The estimates undergo a revision based
on further information and the settlement amount
could vary from the provision created
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•
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Tested on a sample basis, claims paid, and provision created
with payment proof, claim intimation documents and
communication from co-insurer leader in cases of incoming
co-insurance business, which are material to assess whether
claims are appropriately paid, estimated and recorded.
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• The estimate of the claim involves a high degree of
judgement
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Tested the arithmetical accuracy of computation of claims
provision performed by the Company.
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The actuarial valuation of liability in respect of Claims Incurred
but Not Reported (IBNR) and those Incurred but Not Enough
Reported (IBNER) is as certified by the Company's Appointed
Actuary and we have relied upon on the appointed actuary's
certificate in this regard.
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INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITORS' REPORT THEREON
The Company's Board of Directors is responsible for the other
information. The other information comprises the information
included in the Director's Report and Annexures there to but does
not include the Financial Statements and our Auditors' report thereon.
The other information is expected to be made available to us after the
date of this auditor's report thereon.
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 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.
If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
RESPONSIBILITY OF MANAGEMENT AND THOSE
CHARGED WITH GOVERNANCE FOR THE FINANCIAL
STATEMENTS
The Company's Board of Directors is responsible for the matters
stated in section 134(5) of the Act with respect to the preparation
of these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the
Company in accordance with the requirements of the Insurance
Act, the IRDAI Act, the IRDAI Financial Statements Regulations, the
Act and in accordance with the accounting principles generally
accepted in India, including the applicable Accounting Standards
specified under Section 133 of the Act read with relevant rules issued
thereunder. 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 financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the
company's financial reporting process.
AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an 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 financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the audit.
We also:
• I dentify 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
with reference to Financial Statements and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management's use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in our 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, 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.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements for the year
ended March 31, 2025 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 MATTER
Pursuant to IRDAI (Appointed Actuary) Regulations 2017, the actuarial
valuation of liabilities in respect of claims Incurred But Not Reported
("IBNR"), claims Incurred But Not Enough Reported ("IBNER") and
Premium Deficiency Reserve ("PDR") as at March 31,2025, has been
duly certified by the Appointed Actuary. They have also certified
that assumptions used for such valuation are appropriate and in
accordance with the guidelines and norms issued by the IRDAI and
the Institute of Actuaries of India in concurrence with the IRDAI.
Accordingly, we have relied upon the aforesaid certificate from
the Appointed Actuary while forming our opinion on the financial
statements of the Company.
Our opinion is not modified in respect of above matter.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
1. As required by the IRDA Financial Statements Regulations, we
have issued a separate certificate dated April 29, 2025 certifying
the matters specified in paragraphs 3 and 4 of Part III to the IRDAI
Financial Statements Regulations.
2. This Report does not include a statement on the matters specified
in paragraph 3 and 4 of the Companies (Auditor's Report) Order,
2016 ("the Order") issued by the Central Government of India
in terms of sub-section 11 of Section 143 of the Act, since in
our opinion and according to the information and explanations
given to us, the said Order is not applicable to the Company.
3. As required by IRDA Financial Statements Regulations, 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 purposes of our audit;
b. 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 except for the matters
stated in the paragraph k (vii) below on reporting under
Rule 11(g);
c. As the Company's financial accounting system is
centralized at Head Office, no returns for the purposes of
our audit are prepared at the branches of the Company;
d. The Balance Sheet, the Revenue Accounts, the Profit and
Loss Account, and the Receipts and Payments Account
dealt with by this Report are in agreement with the books
of account;
e. I n 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 IRDA Financial Statements Regulations
and / or orders / directions/circulars/guidelines issued by
the IRDAI in this behalf;
f. I n our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
financial statements dealt with by this report comply with
the Accounting Standards specified under Section 133 of
the Act to the extent they are not inconsistent with the
accounting principles prescribed in the IRDAI Financial
Statements Regulations and orders/directions issued by
IRDAI in this regard;
g. I n our opinion and to the best of our information and
according to the explanations given to us, the accounting
policies selected by the Company are appropriate and are
in compliance with the Accounting Standards specified
under Section 133 of the Act, to the extent they are not
inconsistent with the accounting principles prescribed in
the IRDAI Financial Statements Regulations and orders /
directions issued by the IRDAI in this behalf;
h. On the basis of the written representations received from
the directors as on March 31,2025, taken on records by the
Board of Directors, none of the directors is disqualified as
on March 31, 2025 from being appointed as a director in
terms of Section 164 (2) of the Act;
i. As required by the Companies (Amendment) Act, 2017, in
our opinion, according to information and explanations
given to us, the remuneration paid/ provided by the
Company to its directors during the year is within the
limits prescribed under section 197 of the Act read with
Section 34A of the Insurance Act, 1938;
j. With respect to the adequacy of the internal financial
controls with reference to financial statements of the
Company and the operating effectiveness of such
controls, refer to our separate Report in "Annexure A" to
this report. Our report expresses an unmodified opinion
on the existence of internal financial control with reference
to financial statements and its operating effectiveness in
the company.
k. With respect to the other matters to be included in
the Auditors' Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our
opinion and to the best of our information and according
to the explanations given to us:
i. The Company has disclosed the impact of pending
litigations on its financial position in its financial
statements - Refer Note 5.1.1 of Schedule 16 to the
financial statements;
ii. Liability for insurance contracts, is determined
by the Company's Actuary referred to in Other
Matter paragraph above, on which we have placed
reliance; and the Company did not have any other
long-term contracts including derivative contracts
for which there were any material foreseeable
losses - Refer Note 5.2.16 of Schedule 16 to the
financial statements;
iii. There are no amounts which are 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 entity ("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;
(c) Based on the 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 misstatement.
v. The Company has not declared or paid any dividend
during the year and accordingly no compliance
with respect to section 123 of the Act is required to
be followed.
vi. The reservation relating to the maintenance of
accounts and other matters connected therewith
are as stated in paragraph 3(b) above on reporting
under Section 143(3)(b) and paragraph 3(k)(vii)
below on reporting under Rule 11(g).
vii. Based on our examination, which included test
checks, the Company has used 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. Additionally, the audit trail of prior
year has been preserved by the Company as per the
statutory requirements for record retention, except
for SAP HANA where there is no SOC Type II report
available to provide us comfort as to whether the
Audit trail feature is available, enabled and preserved
throughout the year.
For M S K A & Associates For T R Chadha & Co LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration No: 105047W ICAI Firm Registration No: 006711N/N500028
Vaibhav Naik Sheshu Samudrala
Partner Partner
Membership No: 138302 Membership No: 235031
UDIN: 25138302BNUIEY1901 UDIN: 25235031BMNRBF8166
Chennai Chennai
April 29, 2025 April 29, 2025
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