You are here » Home » Companies » Company Overview » IRB Infrastructure Developers Ltd

IRB Infrastructure Developers Ltd.

BSE: 532947 Sector: Infrastructure
NSE: IRB ISIN Code: INE821I01014
BSE 00:00 | 24 Sep 173.80 2.55
(1.49%)
OPEN

174.50

HIGH

176.40

LOW

171.65

NSE 00:00 | 24 Sep 173.95 2.80
(1.64%)
OPEN

172.05

HIGH

176.15

LOW

171.75

OPEN 174.50
PREVIOUS CLOSE 171.25
VOLUME 333484
52-Week high 189.50
52-Week low 97.75
P/E 34.21
Mkt Cap.(Rs cr) 6,108
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 174.50
CLOSE 171.25
VOLUME 333484
52-Week high 189.50
52-Week low 97.75
P/E 34.21
Mkt Cap.(Rs cr) 6,108
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IRB Infrastructure Developers Ltd. (IRB) - Auditors Report

Company auditors report

To the Members of

IRB Infrastructure Developers Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have jointly audited the standalone financial statements of IRB InfrastructureDevelopers Limited (“the Company”) which comprise the standalone balance sheetas at 31 March 2020 and the standalone statement of profit and loss (including othercomprehensive income) the standalone statement of changes in equity and the standalonestatement of cash flows for the year then ended and notes to the standalone financialstatements including a summary of the significant accounting policies and otherexplanatory information.

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 Companies Act 2013 (“Act”) in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 its profit and other comprehensiveloss changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our joint audit in accordance with the Standards on Auditing (SAs)specified under Section 143 (10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our joint audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion on the standalonefinancial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our joint audit of the standalone financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Description of Key Audit Matters

Measurement of construction Revenue (refer Note 3.04 3.05 21 and 38 to the standalonefinancial statements)

The Key Audit Matter How the matter was addressed in our joint audit
Revenue from construction contracts represents 91.87% of the total revenue from operations of the Company. Revenue from these contracts is recognised on satisfaction of performance obligation over time in accordance with the requirements of relevant accounting standards. Our audit procedures included:
• Obtaining an understanding and consideration of the appropriateness of the policies in respect of revenue recognition against the criteria in the accounting standards.
The Company has a number of construction contracts whose revenue recognition can be dependent on a high level of judgement over the percentage of completion. It is based on their best estimate of the costs to complete valuation of contractual variations claims and ability to deliver the contract within the contractual time limit. The execution of construction contracts also requires assessment of execution risk resulting from uncertainty related to COVID 19 pandemic.
• Evaluated the design and implementation and tested operating effectiveness of key controls (including IT controls) around the contract price estimation of costs to complete management's testing of these attributes.
• Understanding and documenting the contract and other related contractual provisions including contractually agreed deliverables termination rights penalties for delay etc to understand the nature and scope of the arrangements with the customer.
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 venture of the Company.
• assessing key judgements inherent in the estimation of significant construction contract projects. It includes comparing the stage-of-completion and costs to completion on significant projects using Lender's Engineer latest certificate.
The Company uses an input method based on costs incurred to measure progress of the projects. Under this approach the Company recognises revenue based on the costs incurred to date relative to the estimated total costs to complete the performance obligation. Profit is not recognised until the outcome of the contract is fairly certain.
• we assessed the estimated costs to complete variations in contract price and contract costs and sighted underlying invoices signed contracts/statements of work completed for all ongoing projects.
Revenue is a key performance indicator of the Company. Accordingly there can be a risk 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. • we understood and documented the Company's process for identifying related parties and recording related party transactions. We have also 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.
Revenues total estimated contract costs and profit recognition may deviate significantly from original estimates based on new knowledge about cost overruns and changes in project scope over the term of a construction contract. • we tested on test check basis sighted the approvals of the Audit Committee and Board of Directors for related party transactions.
• we tested samples of manual journals posted to revenue to identify unusual items.
• we checked adequacy of the disclosures made in note 38 to the Company's standalone financial statements are compliant with Ind AS -115.

Assessment of recoverability of investment in and loans/other receivables provided tosubsidiaries and joint ventures (refer Note 45 6 and 35 to the standalone financialstatements)

The Key Audit Matter How the matter was addressed in our joint audit
The Company has significant investments (including subdebt) in subsidiaries and has given loans to certain subsidiaries which carry out road and other infrastructure projects. The Company also has significant amount of investment in and amount receivable from a joint venture Recoverability of investment in subsidiaries / joint venture (including sub-debt)
Our audit procedures included:
• we have evaluated the design and implementation and tested the operating effectiveness of key controls placed around the impairment assessment process of the recoverability of the investments made and loans given including the estimation future cash flows forecasts the process by which they were produced and discount rates used.
The carrying amount of the investments (including subdebt) in subsidiaries and joint ventures held at cost less impairment as at 31 March 2020 is ' 61992.24 million . The loans to subsidiaries and other receivable from joint venture is ' 4365.50 million and ' 31152.47 million respectively as at 31 March 2020.
Recoverability of investment in subsidiaries (including subdebt) / joint venture • we have assessed Company's identification of CGU with reference to the guidance in the applicable accounting standards.
The Company has investments in subsidiaries and a joint venture which are considered to be associated with significant risk in respect of valuation of such investments. Changes in business environment could also have a significant impact on the valuation of these investments. These investments are carried at cost less any diminution in value of such investments. The investments are examined for impairment at each reporting date.
• assessed the net worth of subsidiaries / joint venture on the basis of latest available financial statements.
• We focused on the sensitivity in the difference between the estimated value and book values of the projects where change in assumptions could cause the carrying amount to exceed its estimated present value. We also assessed the historical accuracy of Company's estimates
These investments are unquoted and hence it is difficult to measure the realisable amount of these investments.
The Company performs an annual assessment of it investments in subsidiaries and joint venture 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. These variables used to determine the value in use are evolving especially in light of uncertainty related to the COVID 19 pandemic.
- Comparing the carrying amount of investments with the relevant subsidiaries/ joint venture balance sheet to identify their net assets being an approximation of their minimum recoverable amount. Instances where the net assets are in excess of their carrying amount and assessed are those subsidiaries have historically been profit-making.
These models use several key assumptions concerning estimates of future revenue growth concession period operations costs the discount rate and assessments of the status of the project and cost of complete balance work. - For 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.
The Company's assessment of the remaining ‘value in use' is judgemental because it is based on forecast results and uncertain outcomes. Further determining these estimates may be subject to a degree of Company bias. • We focused on key assumptions which were most sensitive to the recoverable value of the intangible asset. We also assessed the key assumptions were plausible and appropriate in the light of the current environment of the COVID 19 pandemic. We also assessed the historical accuracy of Company's estimates.
Recoverability of loans/advances to subsidiaries and other receivable from joint venture
The Company has extended loans to subsidiaries which are assessed for recoverability at each period end. Financial assets which include current loans to subsidiaries aggregated to ' 4365.50 million at 31 March 2020. The Company has a receivable of ' 31152.47 million as 31 March 2020 from a joint venture. We reviewed and assessed the work performed by management's external valuation experts including the valuation methodology and the key assumptions used. We also assessed the competence capabilities and objectivity of the experts used by the management in the process of evaluating impairment model. considered the adequacy of disclosures in respect of the investment in the subsidiaries / joint venture.
Due to the nature of the business in the infrastructure projects the Company is exposed to heightened risk in respect of the recoverability of the loans and advances granted to the aforementioned related parties. Recoverability of loans/advances to subsidiaries and other receivable from joint venture Our procedures included:
There is judgment involved on the recoverability of loans/advances and other receivables which rely on a number of infrastructure projects being completed as per the schedule timelines and generation of future cash flows. Evaluated the design and implementation and testing operating effectiveness of key internal controls placed around the impairment assessment process of the loans/advances to subsidiaries and other receivable from joint venture.
We examined the key controls in place for issuing new loans and evidenced the Board of Directors approval obtained.
We obtained Company's assessment of the recoverability of the loans/ advances and 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 which are sensitive to some of the claims to be settled with the customers.
We have held discussions with management as well as their legal teams on the admissibility and the likelihood of the claim settlement.
We tested on sample basis cash receipts received in relation to these loans/advances and other receivables during the year through to bank statement.
We have independently obtained confirmations to evaluate the completeness and existence of loans/advances and other receivables held by related parties as on 31 March 2020.
We have verified the classification and adequacy of disclosures of the loans/advances and other receivables.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

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

In connection with our joint audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin Section 134 (5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the state of affairs profit/lossand other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the standalone financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

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 joint 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. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone 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 Company to cease to continue 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 joint 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 joint audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' 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

1. As required by the Companies (Auditors' Report) Order 2016 (“the Order”)issued by the Central Government in terms of Section 143 (11) of the Act we give in the“Annexure A” a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) 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 bestof our knowledge and belief were necessary for the purposes of our joint audit;

b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c) the standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this report are in agreement with thebooks of account;

d) in our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act;

e) on the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164 (2) of the Act; and

f) with respect to the adequacy of the internal financial controls with reference tothe standalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in “Annexure B”.

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations as at 31 March 2020 onits financial position in its standalone financial statements - Refer Note 31 to thestandalone financial statements;

ii. the Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2020; and

iv. the disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these Standalone financial statements since they do not pertainto the financial year ended 31 March 2020;

(C) With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act:

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP For Gokhale & Sathe
Chartered Accountants Chartered Accountants
Firm Registration No: 101248W/W-100022 Firm's Registration No: 103264W
Aniruddha Godbole Jayant Gokhale
Partner Partner
Membership No: 104519 Membership No: 033767
UDIN: 20105149AAAADX1586 UDIN: 2033767AAAAAG9297
Mumbai Mumbai
18 June 2020 18 June 2020

Annexure A

to the Independent Auditors' Report - 31 March 2020

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended 31 March2020 we report the following:

(i) The Company neither owns any fixed assets nor has purchased any fixed assets duringthe year. Accordingly paragraph 3(i) of the Order is not applicable to the Company.

(ii) The inventory has been physically verified by the management at reasonableintervals during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material.

(iii) The Company has granted interest free unsecured loans to seventeen wholly ownedsubsidiary companies covered in the register maintained under Section 189 of theCompanies Act 2013 (“the Act”). The Company has not granted any loans securedor unsecured to firms limited liability partnerships or other parties covered in theregister maintained under Section 189 of the Act.

a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of opinion that the terms and conditions on which theunsecured loans have been granted to the subsidiary companies listed in the registermaintained under Section 189 of the Act were not prima facie prejudicial to the interestof the Company.

b) According to the information and explanations given to us and based on the auditprocedures conducted by us interest free unsecured loans granted to the subsidiarycompanies are repayable on demand. The borrowers have been regular in payment ofprincipal and interest if any as demanded. Also refer note 40(a) to the standalonefinancial statements in respect of unsecured loans given to certain erstwhile wholly ownedsubsidiaries being transferred to the IRB Infrastructure Trust.

c) There are no overdue amounts of more than 90 days in respect of the interest freeunsecured loans granted to the subsidiary companies.

(iv) In our opinion and according to the information and explanations given to us andbased on the audit procedures conducted by us the Company has complied with theprovisions of Section 185 and 186 of the Act with respect to interest free unsecuredloans granted guarantees provided and investments made by the Company. The Company hasnot given any security under Section 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148(1) of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not made a detailedexamination of the records.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Profession taxIncome-tax and other material statutory dues have been regularly deposited during the yearwith the appropriate authorities. The amounts deducted/accrued in the books of account inrespect of undisputed statutory dues including goods and service tax have generally beenregularly deposited during the year with the appropriate authorities though there havebeen significant delays in a few cases. As explained to us the Company did not have anydues on account of Employees' State Insurance Wealth tax duty of excise duty of customsand cess.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Profession tax Income-tax and Goods and Service Taxwere in arrears as at 31 March 2020 for a period of more than six months from the datethey became payable.

(b) According to the information and explanations given to us there are no dues ofIncome-tax and Goods and Service Tax as at 31 March 2020 which have not been depositedwith the appropriate authorities on account of any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to banks financial institutions anddebenture holders. The Company has availed moratorium on repayment of loans and interestthereon from banks and financial institutions based on the circular issued Reserve Bank ofIndia and accordingly repayment of dues from banks and financial institutions falling duehas not been considered for the moratorium period. The Company did not have anyoutstanding dues to government or debenture holders during the year.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments). In our opinionand according to the information and explanations given to us term loans taken wereapplied for the purpose for which they are raised.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or on the Company by its officers or employees noticedor reported during the year nor have we been informed of any such case by the management.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3 (xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3 (xv)of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP For Gokhale & Sathe
Chartered Accountants Chartered Accountants
Firm Registration No: 101248W/W-100022 Firm's Registration No: 103264W
Aniruddha Godbole Jayant Gokhale
Partner Partner
Membership No: 104519 Membership No: 033767
UDIN: 20105149AAAADX1586 UDIN: 2033767AAAAAG9297
Mumbai Mumbai
18 June 2020 18 June 2020

Annexure B

to the Independent Auditors' report on the standalone financial statements of IRBInfrastructure Developers Limited for the year ended 31 March 2020

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph 2A(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have jointly audited the internal financial controls with reference to thestandalone financial statements of IRB Infrastructure Developers Limited (“theCompany”) as of 31 March 2020 in conjunction with our joint audit of the standalonefinancial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to the standalone financial statements and such internalfinancial controls were operating effectively as at 31 March 2020 based on the internalfinancial controls with reference to standalone financial statements criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India (the “Guidance Note”).

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as “the Act”).

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our joint audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our joint audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to the standalone financial statements.

Meaning of Internal Financial controls with Reference to the Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial controls with Reference to the StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to standalone financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

For B S R & Co. LLP For Gokhale & Sathe
Chartered Accountants Chartered Accountants
Firm Registration No: 101248W/W-100022 Firm's Registration No: 103264W
Aniruddha Godbole Jayant Gokhale
Partner Partner
Membership No: 104519 Membership No: 033767
UDIN: 20105149AAAADX1586 UDIN: 2033767AAAAAG9297
Mumbai Mumbai
18 June 2020 18 June 2020

   

.