India Grid Trust 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, 2024, the Statement
of Profit and Loss, including the statement of Other
Comprehensive Income, the Statement of Changes in Unit
Holders Equity and the Statement of Cash Flows for the year
then ended, the Statement of Net Assets at fair value as at
March 31,2024, the Statement of Total Returns at fair value,
the Statement of Net Distributable Cash Flows (NDCFs) of
the InvIT for the year then ended, and summary of material
accounting policies and other explanatory notes (hereafter
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
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 in conformity with the accounting principles
generally accepted in India, of the state of affairs of the InvIT
as at March 31,2024, its profit including other comprehensive
income its cash movements and its movement of the unit
holders funds for the year ended March 31, 2024, its net
assets at fair value as at March 31, 2024, its total returns at
fair value and the net distributable cash flows of the InvIT for
the year ended March 31,2024.

BASIS FOR OPINION

We conducted our audit of the standalone financial
statements in accordance with the Standards on Auditing
(SAs), issued by the Institute of Chartered Accountants of
India. Our responsibilities under those Standards are further
described in the Auditors Responsibilities for the Audit of
the Standalone Financial Statements 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 together with the ethical requirements that are relevant
to our audit of the financial statements under the provisions
of InvIT Regulations, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our audit opinion on the standalone financial statements.

EMPHASIS OF MATTER

We draw attention to note 12(e) of the standalone financial
statement which describes the presentation/classification
of "Unit Capital" as "Equity" instead of the applicable
requirements of Ind AS 32 - Financial Instruments:
Presentation, in order to comply with the relevant InvIT
regulations. Our opinion is not modified in respect of this
matter.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements for the financial year ended
March 31, 2024. These matters were addressed in the
context of our 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. For each
matter below, our description 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 be communicated in our report. We
have fulfilled the responsibilities described in the Auditors
responsibilities for the audit of the standalone financial
statements section of our report, including in relation to these
matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the
risks of material misstatement of the standalone financial
statements. The results of our audit procedures, including
the procedures performed to address the matters below,
provide the basis for our audit 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	Our audit procedures included, among others, the following:
(as described in notes 5,6,7 and 26 of the standalone financial statements)	• We obtained an understanding of the InvITs 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.
The InvIT has investments in subsidiaries and has granted loans to its subsidiaries which comprise of significant portion of total assets of the Trust.	• We obtained and read the valuation report of the InvITs independent valuation expert, and assessed the experts competence, capability and objectivity.
The subsidiaries are in the business of owning and maintaining transmission assets/ generation of solar power and have entered into Transmission Services Agreement ("TSA") with Long Term Transmission Customers ("LTTC") and Power Purchase Agreement ("PPA") with various National or Regional Intermediaries which are designated by the Government.	• We have engaged our valuation specialists to evaluate the appropriateness of valuation methodology applied in impairment testing and to test the key assumptions around expected long term growth parameters discount rates etc.
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 tested on sample basis that the tariff revenues considered in the respective valuation models are in agreement with TSAs / PPAs/ tariff orders.
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 managements judgment, in particular with reference to identification of forecast of future cash flows relating to the period covered by the respective subsidiarys transmission license/ solar power purchase agreement, debt equity ratio, cost of debt, cost of equity, residual value, etc.	• Discussed potential changes in key drivers as compared to previous year / actual performance with management to evaluate the inputs and assumptions used in the cash flow forecasts and performed key sensitivity analysis around the key assumptions used by the management.
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. The Companys significant portion of business is undertaken through long term engineering, procurement and construction contracts. Revenue from these contracts is recognised over a period of time in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers. Due to the nature of the contracts, revenue recognition involves usage of percentage of completion method which is determined based on proportion of contract costs incurred to date compared to estimated total contract costs, which involves significant judgments, identification of contractual obligations and the Companys rights to receive payments for performance completed till date, changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/ onerous obligations. Accuracy of revenues and onerous obligations, profits may deviate significantly on account of change in judgements and estimates.	• We tested completeness, arithmetical accuracy and validity of the data used in the calculations.
	• We read and assessed the disclosures included in the notes to the standalone financial statements.
	• Obtained Management Representation Letter as regards to fair valuation of these investments.

 

Key audit matters	How our audit addressed the key audit matter
Computation and disclosures relating to Statement of Net Assets at Fair Value and Statement of Total Returns at Fair Value as per InvIT regulations	Our audit procedures included, among others, the following:
(as described in Note 26 of the standalone financial statements)	• 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.
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.	• We discussed with the management and obtained an understating of the InvITs policy on the assessment of fair value and the assumptions used by the management, including design and implementation of controls and validation of management review controls. We have tested the operating effectiveness of these controls.
For the purpose of the above, fair value is determined by forecasting and discounting future cash flows.	• We obtained understating of the InvITs 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 and validation of management review controls. We have tested the operating effectiveness of these controls.
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 managements judgment, in particular with reference to identification of forecast of future cash flows relating to the period covered by the respective subsidiarys transmission license/ solar power purchase agreement, debt equity ratio, cost of debt, cost of equity, residual value, etc.	• We obtained and read the valuation reports of the InvITs independent valuation expert, and assessed the experts competence, capability and objectivity.
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 evaluated independent valuation experts methodology, assumptions and estimates used in the calculations.
	• We have engaged our valuation specialists to evaluate the appropriateness of valuation methodology applied in calculation of fair value of assets including the assumption used in valuation.
	• We tested on sample basis that the tariff revenues considered in the respective valuation models are in agreement with TSAs / PPAs/ tariff orders.
	• Discussed potential changes in key drivers as compared to previous year / actual performance with management to evaluate the inputs and assumptions used in the cash flow forecasts and performed key sensitivity analysis around the key assumptions used by the management.
	• We tested completeness, arithmetical accuracy and validity of the data used in the calculations.
	• Obtained Management Representation Letter as regards to fair valuation of these investments.
	• We read and assessed the disclosures included in the notes to the standalone financial statements.

OTHER INFORMATION

The Management of Indigrid Investment Managers
Limited (the "Investment Manager") 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

auditors report thereon. The Annual report is expected to be
made available to us after the date of auditors report.

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

In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
identified above when it becomes available and, in doing
so, consider whether such 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.

RESPONSIBILITIES OF MANAGEMENT FOR THE
STANDALONE FINANCIAL STATEMENTS

The Management of the Investment Manager (the
Management) is responsible for preparation of these
standalone financial statements that give a true and fair
view of the financial position as at March 31,2024, financial
performance including other comprehensive income, cash
flows and the movement of unit holders funds for the year
ended March 31, 2024, the net assets at fair value as at
March 31, 2024, the total returns at fair value of the InvIT
and the net distributable cash flows of the InvIT for the year
ending March 31,2024 in accordance with the requirements
of the InvIT regulations, Indian Accounting Standards (Ind
AS) as defined in Rule 2(1)(a) of the Companies (Indian
Accounting Standards) Rules, 2015 (as amended) and other
accounting principles generally accepted in India,. This
responsibility also includes the design, implementation and
maintenance of adequate controls, for ensuring the accuracy
and completeness of the accounting records, relevant to the
preparation and presentation of the standalone financial
statements 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,
management is responsible for assessing the ability of InvIT
to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless management either
intends to liquidate the InvIT or to cease operations, or has
no realistic alternative but to do so.

The Management is also responsible for overseeing the
InvITs financial reporting process.

AUDITORS 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 auditors report that includes our

opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these standalone
financial statements.

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

• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control.

• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
of the InvITs internal control.

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

• Conclude on the appropriateness of managements use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions
that may cast significant doubt on the InvITs ability
to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to
draw attention in our auditors report to the related
disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our auditors report. However, future
events or conditions may cause the InvIT to cease to
continue as a going concern.

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

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

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

From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements for the financial year ended March 31, 2024
and are therefore the key audit matters. We describe these
matters in our auditors report unless law or regulation
precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter
should not be communicated in our report because the
adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such
communication.

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 best of our knowledge and
belief were necessary for the purposes of our audit;

(b) The Balance Sheet, and the Statement of Profit and
Loss including the Statement of Other Comprehensive
Income, are in agreement with the books of account;

(c) In our opinion, the aforesaid standalone financial
statements comply with the 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;

(d) There were no amounts which were required to be
transferred to the Investor Education and Protection
Fund by the Trust.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Huzefa Ginwala

Partner

Membership Number: 111757

UDIN: 24111757BKENQM8497

Place of Signature: Pune

Date: May 24, 2024