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India Grid Trust.

BSE: 540565 Sector: Infrastructure
NSE: INDIGRID ISIN Code: INE219X23014
BSE 00:00 | 03 Dec 143.94 0.29
(0.20%)
OPEN

144.70

HIGH

144.70

LOW

143.51

NSE 00:00 | 03 Dec 143.98 0.21
(0.15%)
OPEN

143.77

HIGH

144.95

LOW

142.31

OPEN 144.70
PREVIOUS CLOSE 143.65
VOLUME 54758
52-Week high 144.99
52-Week low 107.39
P/E 8.99
Mkt Cap.(Rs cr) 10,078
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 144.70
CLOSE 143.65
VOLUME 54758
52-Week high 144.99
52-Week low 107.39
P/E 8.99
Mkt Cap.(Rs cr) 10,078
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

India Grid Trust. (INDIGRID) - Auditors Report

Company auditors report

To the Unit holders of India Grid Trust

Report on the Audit of the Standalone Financial

Statements

Opinion

We have audited the accompanying standalone financial statements of India Grid Trust(the "InvIT") which comprise the Balance sheet as at March 31 2021 theStatement of Profit and Loss including the statement of Other Comprehensive Income theStatement of Changes in Unit Holders' Equity and the Statement of Cash Flow for the yearthen ended the Statement of Net Assets at fair value as at March 31 2021 the Statementof Total Returns at fair value the Statement of Net Distributable Cash Flows(‘NDCFs') of the InvIT for the year then ended and a summary of significantaccounting policies and other explanatory notes("the standalone financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Securities and Exchange Board of India (Infrastructure Investment Trusts)Regulations 2014 as amended including any guidelines and circulars issued thereunder (the"InvIT Regulations") in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India to the extent notinconsistent with InvIT regulations of the state of affairs of the InvIT as at March 312021 its profit including other comprehensive income its cash movements and its movementof the unit holders' funds for the year ended March 31 2021 its net assets at fair valueas at March 31 2021 its total returns at fair value and the net distributable cash flowsof the InvIT for the year ended March 312021.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) issued by the Institute of Chartered Accountants of India.Our responsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the InvIT in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the InvIT Regulations and we have fulfilled our ethical responsibilitiesin accordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 312021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.

Key audit matters How our audit addressed the key audit matter
Impairment of investments in subsidiaries and loans given to subsidiaries (as described in notes 456 and 22 of the standalone financial statements)
The InvIT has significant investments in subsidiaries and has granted loans to its subsidiaries amounting to Rs. 155522 million as at March 31 2021. The value of investments and loans in aggregate comprise 95% of total assets in the Balance Sheet. Our audit procedures included among others the following:
The subsidiaries are in the business of owning and maintaining transmission assets and have entered into Transmission Services Agreement ("TSA") with Long Term Transmission Customers ("LTTC"). • We obtained an understanding of the InvIT's process on assessment of impairment of investments in subsidiaries and loans to subsidiaries and the assumptions used by the management including design and implementation of controls validation of management review controls. We have tested the operating effectiveness of these controls.
At each reporting period end management assesses the existence of impairment indicators of investments in subsidiaries and loans given to subsidiaries. In case of existence of impairment indicators the investment and loan balances are subjected to impairment test where the fair value of the subsidiary is compared with the value of investments and loans given to such subsidiaries. • We obtained and read the valuation report of the InvIT's independent valuation expert and assessed the expert's competence capability and objectivity.
• We evaluated the independent valuation expert's methodology assumptions and estimates used in the calculations.
The processes and methodologies for assessing and determining the fair value of the subsidiary is based on complex assumptions that by their nature imply the use of the management's judgment in particular with reference to identification of forecast of future cash flows relating to the period covered by the respective subsidiary's transmission license debt equity ratio cost of debt cost of equity residual value etc. • We tested on sample basis that the tariff revenues considered in the respective valuation models are in agreement with TSAs / tariff orders.
• We tested completeness arithmetical accuracy and validity of the data used in the calculations.
• In performing the above procedures we involved valuation specialists to perform an independent review of methodology and key assumptions used in the valuation.
Considering the judgment involved in determination of fair values due to inherent uncertainty and complexity of the assumptions used in determination of fair values this is considered as a key audit matter. • We read and assessed the disclosures included in the notes to the standalone financial statements.
Classification of unit holders' funds as equity (as described in Note 22 of the standalone financial statements)
The InvIT is required to distribute to Unitholders not less than ninety percent of its net distributable cash flows for each financial year. Accordingly a portion of the unitholders' funds contains a contractual obligation of the Trust to pay to its Unitholders cash distributions. The Unitholders' funds could therefore have been classified as compound financial instrument which contains both equity and liability components in accordance with Ind AS 32 - Financial Instruments: Presentation. However in accordance with SEBI Circulars No. CIR/IMD/DF/114/2016 dated October 20 2016 and No. CIR/IMD/DF/127/2016 dated November 29 2016 ("SEBI Circulars") issued under the InvIT Regulations the unitholders' funds have been classified as equity in order to comply with the mandatory requirements of Section H of Annexure A to the SEBI Circular dated October 20 2016 dealing with the minimum disclosures for key financial statements. Our audit procedures included among others:
• We obtained and read the requirements for classification of financial liability and equity under Ind AS 32 and evaluated the provisions of SEBI Circulars for classification/ presentation of unit holders funds in the financial statements of an Infrastructure Investment Trust.
Considering the judgment required for classification of unit holders' funds as equity and liability this is considered as a key audit matter. • We read and assessed the disclosures included in the standalone financial statements for compliance with the relevant requirements of InvIT regulations.
Disclosures relating to Statement of Net Assets at Fair Value and Statement of Total Returns at Fair Value as per InvIT regulations (as described in Note 22 of the standalone financial statements)
The InvIT is required to disclose Statement of Net Assets at Fair Value and Statement of Total Returns at Fair Value pursuant to SEBI circulars issued under the InvIT regulations which requires fair valuation of the assets. Such fair valuation has been carried out by the independent valuer appointed by the InvIT. Our audit procedures included among others the following:
• We read the requirements of InvIT regulations for disclosures relating to Statement of Net Assets at Fair Value and Statement of Total Returns at Fair Value.
For the purpose of the above fair value is determined by forecasting and discounting future cash flows. The processes and methodologies for assessing and determining the fair value is based on complex assumptions that by their nature imply the use of the management's judgment in particular with reference to identification of forecast of future cash flows relating to the period covered by the respective subsidiary's transmission license debt equity ratio cost of debt cost of equity residual value etc. Considering the judgment involved in determination of fair values due to inherent uncertainty and complexity of the assumptions used in determination of fair values this is considered as a key audit matter. • We discussed with the management and obtained an understating of the InvIT's policy on the assessment of fair value and the assumptions used by the management including design and implementation of controls validation of management review controls. We have tested the operating effectiveness of these controls.
• We obtained understating of the InvIT's process for preparation statement of Net Assets at Fair Value and Statement of Total Returns at Fair Value as per InvIT regulations and the assumption used by the management including design and implementation of controls validation of management review controls. We have tested the operating effectiveness of these controls.
• We obtained and read the valuation report of the InvIT's independent valuation expert and assessed the expert's competence capability and objectivity.
• We evaluated independent valuation expert's methodology assumptions and estimates used in the calculations.
• We tested on sample basis that the tariff revenues considered in the respective valuation models are in agreement with TSAs / tariff orders.
• We tested completeness arithmetical accuracy and validity of the data used in the calculations.
• In performing the above procedures we used valuation specialists to perform an independent review of methodology and key assumptions used in the valuation.
• We read and assessed the disclosures included in the notes to the standalone financial statements.

Other Information

The Management of Indigrid Investment Managers Limited (formerly known as SterliteInvestment Managers Limited) (the "Investment Manager") is responsible for theother information. The other information comprises the information included in the Annualreport but does not include the standalone financial statements and our auditor's reportthereon. The Annual report is expected to be made available to us after the date ofauditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether such other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Annual report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibilities of Management for the Standalone Financial Statements

The Management of the Investment Manager (‘the Management') is responsible for thepreparation of these standalone financial statements that give a true and fair view of thefinancial position as at March 31 2021 financial performance including othercomprehensive income cash flows and the movement of the unit holders' funds for the yearended March 312021 the net assets at fair value as at March 31 2021 the total returnsat fair value of the InvIT and the net distributable cash flows of the InvIT for the yearending March 31 2021 in accordance with the requirements of the InvIT regulations; IndianAccounting Standards as defined in Rule 2(1)(a) of the Companies (Indian AccountingStandards) Rules 2015 (as amended) and other accounting principles generally accepted inIndia to the extent not inconsistent with InvIT regulations. This responsibility alsoincludes the design implementation and maintenance of adequate controls for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management is responsible forassessing the ability of the InvIT to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the InvIT or to cease operationsor has no realistic alternative but to do so.

The Management is also responsible for overseeing the InvIT's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances but not for the purposeof expressing an opinion on the effectiveness of the InvIT's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of the management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theInvIT's ability to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the InvIT to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

Based on our audit we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) The Balance Sheet and the Statement of Profit and Loss are in agreement with thebooks of account;

(c) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards (Ind AS) and/or any addendum thereto as defined in Rule 2(1)(a) ofthe Companies (Indian Accounting Standards) Rules 2015 as amended to the extent notinconsistent with InvIT Regulations.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Huzefa Ginwala

Partner

Membership Number: 111757

UDIN: 211 11757AAAACT2622

Place of Signature: Pune

Date: May 27 2021

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