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India Grid Trust.

BSE: 540565 Sector: Infrastructure
NSE: INDIGRID ISIN Code: INE219X23014
BSE 15:40 | 24 Jun 131.06 -0.71
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NSE 15:31 | 24 Jun 131.64 -0.30
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OPEN 132.00
PREVIOUS CLOSE 131.77
VOLUME 57834
52-Week high 144.00
52-Week low 95.13
P/E 8.55
Mkt Cap.(Rs cr) 9,177
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 132.00
CLOSE 131.77
VOLUME 57834
52-Week high 144.00
52-Week low 95.13
P/E 8.55
Mkt Cap.(Rs cr) 9,177
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 Unitholders' of India Grid Trust

Report on the Audit of the Standalone Ind AS

Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of India GridTrust ("the InvIT") comprising of the Balance Sheet as at March 31 2019 theStatement of Profit and Loss including other comprehensive income the Statement ofChanges in Unitholders' Equity and the Statement of Cash Flow for the year then ended andthe Statement of Net Assets at fair value as at March 31 2019 the Statement of TotalReturns at fair value and the Statement of Net Distributable Cash Flows (‘NDCFs') ofthe InvIT for the year then ended and a summary of significant accounting policies andother explanatory information ("the standalone Ind AS financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by 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 of the state ofaffairs of the InvIT as at March 312019 its profit including other comprehensive incomeits cash movements and its movement of the Unitholders'' funds for the year ended March31 2019 its net assets as at March 31 2019 its total returns and the net distributablecash flows of the InvIT for the year ended March 312019.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) issued by the Institute of Chartered Accountants ofIndia. Our responsibilities under those Standards are further described in the‘Auditor's Responsibilities for the Audit of the Standalone Ind AS FinancialStatements' section of our report. We are independent of the InvIT in accordance with the‘Code of Ethics' issued by the Institute of Chartered Accountants of India and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone Ind ASfinancial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how 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 Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
Impairment of investments in /loans to subsidiaries
(as described in note 16 of the standalone Ind AS financial statements)
During the current year impairment indicators were identified by the management on the investments in/loans given of ? 46577.64 Million (before impairment provision) to its subsidiaries which own and operate transmission assets. Our audit procedures included the following:
As a result an impairment assessment was required to be performed by the management by comparing the carrying value of these investments to their recoverable amount to determine whether an impairment needs to be recognised. • Assessed the management's valuation methodology applied in determining the recoverable amounts. In making this assessment we also evaluated the objectivity and independence of InvIT's independent valuer involved in the process.
For the purpose of the above impairment testing value in use has been determined by forecasting and discounting future cash flows. Furthermore the value in use is highly sensitive to changes in some of the inputs used e.g. the discounting rate (WACC) inflation rates tax rates etc. • Together with valuation specialists we assessed the valuation reports issued by the independent valuer engaged by management.
• We tested that the tariff revenues considered in the respective valuation models are in agreement with TSAs / tariff orders;
Further the determination of the recoverable amounts involved judgement due to inherent uncertainty in the assumptions supporting the recoverable amounts. • We assessed the assumptions around the key drivers of the cash flow forecasts discount rates and residual values;
• We also assessed the recoverable value headroom by performing sensitivity testing of key assumptions used;
Accordingly the impairment assessment of investments in/loans to subsidiaries was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. • We discussed changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the valuation models were appropriate;
• We tested the arithmetical accuracy of the models.
Classification of Unitholders' funds as equity We read/assessed the disclosures in the standalone Ind AS financial statements for compliance with the relevant accounting standards requirements.
(as described in note 16 of the standalone Ind AS 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. Our audit procedures included evaluating the requirements for classification of financial liability and equity under Ind AS 32 and evaluating the provisions of SEBI Circulars for classification/ presentation of Unitholders' funds in the financial statements of an Infrastructure Investment Trust.
However in accordance with SEBI Circulars No. CIR/IMD/DF/114/2016 dated 20-Oct- 2016 and No. CIR/IMD/DF/127/2016 dated 29-Nov-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 20-Oct-2016 dealing with the minimum disclosures for key financial statements. We assessed the disclosures in the standalone Ind AS financial statements for compliance with the relevant requirements of InvIT regulations.
Based on the above the classification of Unitholders' funds as equity involved considerable management judgement. Accordingly it is considered as a key audit matter.
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 16 of the standalone Ind AS financial statements)
Pursuant to SEBI Circular No. CIR/IMD/DF/114/2016 dated 20- Oct-2016 and No. CIR/IMD/DF/127/2016 dated 29-Nov-2016 issued under the InvIT Regulations India Grid Trust is required to disclose Statement of Net Assets at Fair Value and Statement of Total Returns at Fair Value 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 the following:
• 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 determination of fair value involves judgement due to inherent uncertainty in the underlying assumptions and it is highly sensitive to changes in some of the inputs used e.g. the discounting rate (WACC) inflation rates tax rates etc. • Assessed the appropriateness of the management's valuation methodology in determining the fair values. In making this assessment we also evaluated the objectivity and independence of InvIT's independent valuer involved in the process.
• Tested controls implemented by the management to determine inputs for fair valuation as well as assumptions used in the fair valuation.
The determination of the fair values involved judgement due to inherent uncertainty in the assumptions supporting the fair values. • Together with valuation specialists we reviewed the valuation reports issued by the independent valuer engaged by the management.
• Tested that the tariff revenues considered in the respective valuation models are in agreement with TSAs/tariff orders;
Accordingly the disclosure of fair values as per InvIT regulations was determined to be a key audit matter in our audit of the standalone Ind AS financial statements • Assessed the assumptions around the key drivers of the cash flow forecasts discount rates and residual values;
• Also assessed the headroom by performing sensitivity testing of key assumptions used;
• Discussed changes in key drivers as compared to previous year/actual performance with management in order to evaluate whether the inputs and assumptions used in the valuation models were appropriate;
• Tested the arithmetical accuracy of the models;
• Read/assessed the disclosures in the standalone Ind AS financial statements for compliance with the relevant requirements of InvIT regulations.

Other Information

Management of Sterlite Investment Managers Limited ("Investment Manager") isresponsible for the other information. The other information comprises the informationincluded in the Annual report but does not include the standalone Ind AS financialstatements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management for the Standalone Ind AS Financial Statements

The Management of the Investment Manager is responsible for the preparation of thesestandalone Ind AS financial statements that give a true and fair view of the financialposition as at March 31 2019 financial performance including other comprehensive incomecash movements and the movement of the Unitholders'' funds for the year ended March312019 the net assets as at March 312019 the total returns of the InvIT and the netdistributable cash flows of the InvIT in conformity with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) and/or anyaddendum thereto as defined in Rule 2(1)(a) of the Companies (Indian Accounting Standards)Rules 2015 as amended read with the InvIT Regulations. This responsibility includes thedesign implementation and maintenance of adequate controls for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements 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.

Management of the Investment Manager is also responsible for overseeing the financialreporting process of the InvIT.

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

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 Ind AS financial statements.

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

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial 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 entity's internal control.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe InvIT 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 standalone Ind AS financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the InvIT to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with Management regarding among other matters the planned scope andtiming of the audit and significant audit findings including any significant deficienciesin internal control that we identify during our audit.

We also provide Management with a statement that we have complied with relevant ethicalrequirements regarding independence and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards.

From the matters communicated with Management we determine those matters that were ofmost significance in the audit of the standalone Ind AS financial statements for thefinancial year ended March 312019 and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould 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 Ind AS financial statements comply withthe Accounting Standards (Ind AS) and/or any addendum thereto as defined in Rule 2(1 )(a)of the Companies (Indian Accounting Standards) Rules 2015 as amended.

For S R B C & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Amyn Jassani

Partner

Membership Number: 046447

Place: Mumbai

Date: April 24 2019