We have jointly audited the accompanying standalone financial
statements of IRB Infrastructure Developers Limited (“the
Company”), which comprise the Balance Sheet as at March
31, 2025, and the Statement of Profit and Loss, including
Other Comprehensive Income, Statement of Changes in
Equity and Statement of Cash Flows for the year then ended,
and notes to the standalone financial statements, including
material accounting policy information 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
Companies Act, 2013 (“the Act’) in the manner so required
and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the
Act read with Companies (Indian Accounting Standards)
Rules, 2015, as amended (“Ind AS”) and other accounting
principles generally accepted in India, of the state of affairs of
the Company as at March 31,2025, and profit (including other
comprehensive income), changes in equity and its cash flows
for the year ended on that date.
Basis for Opinion
We conducted our joint audit of the standalone financial
statements 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 ‘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 (“ICAI”)
together with the ethical requirements that are relevant to our
joint 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 obtained by us 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 joint audit of the
standalone financial statements for the year ended March 31,
2025. These matters were addressed in the context of our
joint 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. We have determined the
matters described below to be the key audit matters to be
communicated in our report.
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Key Audit Matter
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How the Key Audit Matter was addressed in our joint audit
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Assessment of impairment of investment in subsidiaries,
recoverability of loans/advances to subsidiaries and joint ventures
and fair valuation of other receivable from joint venture (refer Note
4, 6 and 7 to the standalone financial statements)
A) The carrying amount of the investments (including sub-debt) in
subsidiaries held at cost less impairment as at March 31, 2025 is
' 33,183.62 million.
These investments are associated with significant risk in respect
of valuation. Changes in business environment could also
have a significant impact on the valuation. The investments are
carried at cost less any impairment in value of such investments.
These investments are unquoted and hence it is difficult to
measure the recoverable amount. The Company performs an
annual assessment of impairment for its investments at each
cash generating unit (CGU) level, to identify any indicators of
impairment. The recoverable amount of the CGUs which is based
on the higher of the value in use or fair value less costs to sell,
has been derived from discounted forecast cash flow models
which requires management to make significant estimates and
assumptions related to future revenue growth, concession period,
operations costs, the discount rate and assessments of the status
of the project and cost to complete balance work.
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A) Impairment of investment in subsidiaries.
Our audit procedures included:
1. Tvaluated the design and implementation and verified, on a test
check basis the operating effectiveness of key controls placed
around the impairment assessment process of the recoverability
of the investments made, including the estimation of future cash
flows forecasts, the process by which they were produced and
discount rates used.
2. Txamined the key controls in place for making investments in
subsidiaries and evidenced the Board of Directors approval
obtained.
3. Assessed the net worth of subsidiaries on the basis of latest
available financial statements. Further:
- Aompared the carrying amount of investments with the
relevant subsidiaries balance sheet to identify their net assets,
being an approximation of their minimum recoverable amount.
Where the net assets are in excess of their carrying amount,
also assessed that those subsidiaries have historically been
profit-making.
- Tor the investments where the carrying amount exceeded
the net asset value, comparing the carrying amount of the
investment with the expected value of the business based
discounted cash flow analysis.
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Key Audit Matter
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How the Key Audit Matter was addressed in our joint audit
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4.
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Tested and verified some of the key assumptions such as future
revenue growth, concession period, operations costs, the
discount rate and assessments of the status of the project and
cost to complete balance work, which were most sensitive to the
recoverable value of the investments.
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5.
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Assessed the work performed by management as well as
management's external valuation expert, including the valuation
methodology and the key assumptions used. Also assessed the
competence, capabilities and objectivity of the expert used by the
management in the process of evaluating impairment models.
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6.
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1 nvolved our internal valuation specialist, where appropriate, to
evaluate the reasonability of the methodology, approach and
assumptions used in the valuation carried out for determining the
carrying amount of investments.
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7.
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Verified that the disclosures made in the Company's standalone
financial statements in respect of the investment in the subsidiaries
are adequate.
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B) The Company has extended loans to subsidiaries and joint
ventures which are assessed for impairment at each year end.
Financial assets, which include loans to subsidiaries and joint
ventures aggregated to ' 12,883.48 million at March 31, 2025.
The Company also has other receivable of ' 38,460.77 million as
March 31, 2025 from a joint venture on account of transfer of 9
project companies to the said joint venture, which is measured at
fair value through profit and loss.
Due to the nature of the business in the infrastructure projects,
the Company is exposed to heightened risk in respect of the
impairment of the loans granted to the aforementioned related
parties and appropriateness of assumptions used in fair valuation
of other receivables due from the said joint venture.
There is a significant judgment and estimation uncertainty
involved in assessing the impairment of above loans made
to related parties, because it is dependent on number of
infrastructure projects being completed as per the schedule
timeline and generation of future cash flows.
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B) Recoverability of loans/advances to subsidiaries and joint
ventures and fair valuation of other receivable from joint venture
Our procedures included:
1. Evaluated the design and implementation and verified, on a test
check basis the operating effectiveness of key internal controls
placed around the impairment assessment process of the loans/
advances to subsidiaries and joint ventures and assumptions used
in fair valuation of other receivable from joint venture.
2. Examined the key controls in place for issuing new loans and
evidenced the Board of Directors approval obtained.
3. Assessed Group's identification of CGU with reference to the
guidance in the applicable accounting standards.
4. Assessed the net worth of subsidiaries and joint ventures based on
latest available financial statements along with assessing that those
subsidiaries/joint ventures have historically been profit-making and
are servicing the principal and interest schedule on timely basis.
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There is also an estimation uncertainty involved in determining
fair value of other receivables which rely on key assumptions
such as timing of collection, the discount rate, and the probability
of success in respect of the claims.
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5.
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Obtained Company's assessment of the impairment of the loans/
advances and fair valuation of other receivables, which includes
cash flow projections over the duration of the loans/advances
and other receivables. These projections are based on underlying
infrastructure project cash flows and claims to be settled with the
customers.
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6.
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Assessed the work performed by management as well as
management's external valuation expert, including the valuation
methodology and the key assumptions used. Further, also assessed
the competence, capabilities and objectivity of the expert used by
the management in the process of evaluating impairment models
and fair valuation, as appropriate.
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7.
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1 nvolved our internal valuation specialist, where appropriate, to
evaluate the reasonability of the methodology, approach and
assumptions used in the valuation.
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8.
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Obtained confirmations to evaluate the completeness and
existence of loans/advances to subsidiaries and joint ventures
and other receivables from joint venture as on March 31,2025.
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9.
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Verified the classification and adequacy of disclosures of the
loans/advances and other receivables.
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Key Audit Matter
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How the Key Audit Matter was addressed in our joint audit
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Measurement/ recognition of construction Revenue (refer Note 20
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Measurement of construction Revenue.
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to the standalone financial statements)
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Our audit procedures included:
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Revenue from construction contracts is recognized using percentage
of completion method (“POC”) as per the input method prescribed
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1.
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Evaluated the accounting policy for revenue recognition of the
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under Ind AS 115 - Revenue from contracts with customers (“Ind AS
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Company and assessed compliance of the policy in terms of
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115”) where performance obligations are satisfied over time.
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principles enunciated under Ind AS 115.
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It represents 65.94% of the total revenue from operations of the
Company.
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2.
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Evaluated the design and implementation and verified, on a test
check basis the operating effectiveness of key controls around the
contract price (including claims), estimation of costs to complete
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The Company has construction contracts whose revenue recognition
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and billings to customers and management's testing of these
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is dependent on a high level of judgement over the percentage of
completion. It is based on their best estimate of the costs to complete,
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attributes.
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valuation of contractual variations, litigating claims and ability to
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3.
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Obtained and verified on test check basis the contract and other
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deliver the contract within the contractual time limit.
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related contractual provisions including contractually agreed
deliverables, entitlement to variable considerations, termination
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The Company's current year revenue from construction contracts and
a significant amount of its expenses incurred, arise from transactions
with related parties. These related parties are principally subsidiaries
/joint ventures of the Company.
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4.
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rights, penalties for delay, etc. to understand the nature and scope
of the arrangements with the customer.
Assessed key judgements inherent in the estimation of significant
construction contract projects. It includes comparing the stage-of
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The Company uses an input method based on costs incurred to
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completion and costs to completion on significant projects using
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measure progress of the projects. Under this approach, the Company
recognises revenue based on the costs incurred to date relative to the
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Lender's Engineer latest certificate/Monthly Progress report.
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estimated total costs to complete the performance obligation. Profit is
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5.
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Assessed the estimated costs to complete, variations in contract
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not recognised until the outcome of the contract is fairly certain.
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price and contract costs and sighted underlying invoices, signed
contracts/ statements of work completed for ongoing projects.
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Revenue is a key performance indicator of the Company. Accordingly,
there can be a risk that the Company may influence the judgements
and estimates of revenue recognition in order to achieve performance
targets to meet market expectations or incentive links to performance
for reporting period.
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6.
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Obtained the Company's process for identifying related parties
and recording related party transactions. Assessed Company's
key controls in relation to the assessment and approval of related
party transactions and examined Company's disclosures in respect
of the transactions.
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Revenues, total estimated contract costs and profit recognition may
deviate significantly from original estimates based on new knowledge
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7.
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Verified on test check basis, the approvals of the Audit Committee
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about cost overruns and changes in scope/ term of a construction
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and Board of Directors for related party transactions.
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contract and outcome of litigations.
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8.
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Verified samples of manual journals posted to revenue to identify
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In view of above, the above matter has been identified as a key audit
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unusual items.
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matter.
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9.
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Obtained management policy with respect to recognition of
revenue in case of litigating matters.
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10. Reviewed the legal opinion obtained from the management
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to determine whether any adjustments on account of claims
recognised in the previous periods needs to be made.
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11
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Assessed the disclosures made by the management is in
compliance of Ind AS -115
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Fair Valuation of Investments in InvIT & Related Assets (refer Note
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Fair Valuation of Investments in InvIT & Related Assets
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4, 21 and 29 to the standalone financial statements)
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Our audit procedures included:
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With regulatory changes relating to operations of Infrastructure
Investment Trust, coupled with changes in business environment
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1.
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Discussed the changes in the regulatory/business environment
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and emerging business opportunities, the Company has aligned its
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and understood from the management the rationale for change in
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business model with respect to its investments in IRB Infrastructure
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the business model w.r.t. investment in InvIT & Related Assets.
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Trust and related assets (‘InvIT & Related Assets').
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2.
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Evaluated the appropriateness of management's assessment of
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Consequently, the Company assessed its eligible investments,
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the applicability of the criteria specified in Ind AS 28 read with Ind
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including interest in joint ventures meeting the required conditions
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AS 27 for measurement at FVTPL including technical accounting
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under Ind AS 28, “Investment in Joint ventures and Associates” read
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and other memos obtained by the management from external
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with Ind AS 27 “Separate Financial Statements” for measurement at
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experts.
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fair value through profit and loss account (“FVTPL”).
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3.
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Evaluated the design and implementation and verified, on a test
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Accordingly, on initial recognition, investments in InvIT & Related
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check basis the operating effectiveness of key internal controls
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Assets have been measured at FVTPL in accordance with Ind AS 109
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placed around the assessment process of valuation of investments
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which were previously measured at cost in accordance with Ind AS
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in InvIT & other assets.
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27. The one-time impact of reclassification and fair valuation has been
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4.
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Assessed the work performed by management as well as
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presented as ‘Exceptional items' in Statement of Profit and Loss.
Subsequent changes on the measurement of these investments at
fair value have been presented under ‘Revenue from Operations'.
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management's external valuation expert, including the valuation
methodology and the key assumptions used. Further, also
assessed the competence, capabilities and objectivity of the
expert used by the management in the process of valuations.
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In measuring these investments, valuation methods are used based
on inputs that are not directly observable from market information and
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5.
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1 nvolved our internal valuation specialist, where appropriate, to
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certain other unobservable inputs. The Management has also availed
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evaluate the reasonability of the methodology, approach and
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the services of an independent valuation expert in this regard.
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assumptions used in the valuations.
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Key Audit Matter
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How the Key Audit Matter was addressed in our joint audit
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The valuation of these assets is a focus area of our audit as it is
highly dependent on estimates (including various assumptions and
techniques used) which contain assumptions that are not observable
in the market.
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6. Assessed the adequacy of disclosures made by the Company in
the standalone financial statements.
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Given the inherent subjectivity and judgement involved in assessing
whether the criteria for measurement at FVTPL as per Ind AS 28 read
with Ind AS 27 is met, the estimation uncertainties involved in the
valuation of the above investments, materiality of amounts involved,
judgements involved in selecting the valuation basis, and use of
unobservable inputs, we determined this to be a key audit matter.
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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 report
thereon. The Annual Report is expected to be made available
to us after the date of this 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 joint 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
under SA 720 ‘The Auditor’s responsibilities Relating to Other
Information’.
Responsibilities of Management and Board of
Directors 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 of these standalone financial statements
that give a true and fair view of the financial position,
financial performance, changes in equity and cash flows of
the Company in accordance with the accounting principles
generally accepted in India, including the Accounting
Standards specified under section 133 of the Act. 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 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, the
Management and Board of Directors are 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 are 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.
We give in “Annexure A” a detailed description of
Auditor’s responsibilities for Audit of the Standalone
Financial Statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order,
2020 (“the Order”), issued by the Central Government
of India in terms of sub-section (11) of section 143 of the
Act, we give in “Annexure B” a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the
extent applicable.
2. As required by 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.
(c) The Balance Sheet, the Statement of Profit and
Loss including other comprehensive income, the
Statement of Changes in Equity and the Statement
of Cash Flow dealt with by this Report are in
agreement with the books of account.
(d) I n our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards
specified under Section 133 of the Act.
(e) On the basis of the written representations received
from the directors as on March 31, 2025 taken
on record by the Board of Directors, none of the
directors are disqualified as on March 31, 2025
from being appointed as a director in terms of
Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal
financial controls with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer to
our separate Report in “Annexure C”.
(g) 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, 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
standalone financial statements - Refer Note
31 to the standalone financial statements;
ii. The Company did not have any long¬
term contracts for which there were any
material foreseeable losses. The Company
has made provision, as required under the
applicable law or accounting standards, for
material foreseeable losses on derivative
contracts - Refer Note 48 to the standalone
financial statements;
iii. There has been no delay in transferring
amounts, 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 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(s) or entity(ies), including
foreign entities (“Intermediaries”), with
the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, 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 have been received
by the Company from any person(s) or
entity(ies), including foreign entities
(Funding Parties), with the understanding,
whether recorded in writing or otherwise,
as on the date of this audit report, that
the Company shall, 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 performed
that have been considered reasonable
and appropriate in the circumstances,
and according to the information and
explanations provided to us by the
Management in this regard 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 (vi)(a) and (vi)(b) above,
contain any material mis-statement.
v. The interim dividend declared and paid by the
Company during the year and until the date of
this audit report is in accordance with section
123 of the Companies Act 2013.
The interim dividend paid by the Company
during the year in respect of the same
during the course of our audit, we did not come
across any instance of audit trail feature being
tampered with. Additionally, the audit trail has
been preserved by the Company as per the
statutory requirements for record retention.
declared for the previous year is in accordance
with section 123 of the Companies Act 2013 to
the extent it applies to payment of dividend.
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,
3. I n our opinion, according to information, explanations
given to us, the remuneration paid by the Company to
its directors is within the limits laid prescribed under
Section 197 read with Schedule V of the Act and the
rules thereunder.
For Gokhale & Sathe For M S K A & Associates
Chartered Accountants Chartered Accountants
ICAI Firm Registration No.103264W ICAI Firm Registration No.105047W
Chinmaya Deval Siddharth Iyer
Membership No.: 148652 Membership No.: 116084
UDIN: 25148652BMKSLL4726 UDIN: 25116084BMNYBP6309
Mumbai Mumbai
Date: 19 May 2025 Date: 19 May 2025
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