IndInfravit

IndInfravit Trust Auditor Reports

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Mar 26, 2025|12:00:00 AM

Interise Trust Share Price Auditors Report

Independent Auditors Report

The Unitholders of

Interise Trust (formerly IndInfravit Trust)

Report on the audit of the standalone financial statements

Opinion

We have audited the accompanying standalone financial statements of Interise Trust (formerly known as IndInfravit Trust) ("the InvIT" or "the Trust"), which comprise the Balance Sheet as at 31 March 2025, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Unitholders Equity and the Statement of Cash Flows for the year then ended, the Statement of Net Assets at fair value as at 31 March 2025, the Statement of Total Returns at fair value, and the Statement of Net Distributable Cash Flows ("NDCFs") for the year then ended, and notes to the standalone financial statements including a summary of material accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 as amended from time to time including any guidelines and circulars issued thereunder read with Securities Exchange Board of India (SEBI) Master Circular No.SEBI/HO/DDHSPoD-2/P/CIR/2024/44 dated 15 May 2024 (together referred to as the "SEBI InvIT Regulations") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards as defined in rule 2(1)(a) of the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, to the extent not inconsistent with SEBI InvIT Regulations, of the state of affairs of the Trust as at 31 March 2025, its profit, total comprehensive income, its cash flows, its changes in unitholders equity for the year ended 31 March 2025, its net assets at fair value as at 31 March 2025, its total returns at fair value and the net distributable cash flows for the year ended on that date.

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 ("ICAI"). 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 Trust in accordance with the Code of Ethics issued by the ICAI India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the SEBI InvIT Regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

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 31 March 2025. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sl. no. Key audit matter	Auditors response
1 Computation and disclosures as prescribed in the SEBI InvIT regulations relating to Statement of Net Assets and Statement of Total Returns at Fair Value	Our audit procedures included the following:
As per SEBI InvIT regulations, the Trust is required to disclose statement of net assets at fair value and statement of total returns at fair value. Fair value for each of the subsidiaries in which the Trust has investments as at 31 March 2025 is determined using the discounted cash flow model, involving significant management judgment in respect of various key assumptions such as future cash flows, revenue growth rates, traffic estimates, discount rates, inflation and other economic parameters, assessment of the extension in concession periods considered on account of target traffic subject to final approval from authorities and the expected outcome of the other matters under arbitration, etc. as outlined in Note 37(c) of the standalone financial statements.	- obtaining the valuation report of the independent valuer and assessing the appropriateness of the Trusts valuation methodology applied in determining the fair value.
There is an inherent risk in the computation of fair value due to the use of estimates and judgements mentioned above. Therefore, computation and disclosures of statement of net assets and total returns at fair value is considered as a Key Audit Matter.	- assessing the assumptions around the key drivers of the cash flow forecasts, discount rates, revenue projections based on the independent experts traffic study reports and the cost estimates considering the technical report provided by independent experts.
Refer 2.19 for the other accounting policy on statement of net assets at fair value and statement of total returns at fair value of the standalone financial statements.	- evaluating the objectivity, independence and competency of independent valuer and experts involved in the process.
	- assessing the reasonableness of the managements assessment of the expected extensions to the concession period including the matters under arbitration with reference to the terms of the concession agreements, the methodology followed by the entity and the legal advice obtained by the Management in respect of such matters, as applicable.
	- involving our specialists, to assess the reasonableness of the managements projections of revenue including traffic growth through the balance concession period considered and the cost estimates, the discount rate used in the valuation and the valuation methodology adopted by the Management to determine the fair value.
	- discussing / evaluating potential changes in key drivers as compared to previous year / actual performance for valuation with Investment Manager of the Trust in order to evaluate whether the inputs and assumptions used in the cash flow projections were appropriate, including the considerations due to current economic and market conditions.
	- performing sensitivity analysis of key assumptions to understand the scenarios in case of changes to key assumptions.
	- testing the arithmetical accuracy of the valuation model and the computation in the statement of net assets and total returns at fair value.
	- evaluating the appropriateness and adequacy of disclosures made by Management of the Investment Manager for compliance with the relevant requirements of the SEBI InvIT Regulations.
2 Impairment of investments and loans made by the Trust in subsidiaries.	Our audit procedures included the following: - assessing the appropriateness of the Trusts accounting policy on impairment of investments and loans and the process for determination of the recoverable value of these subsidiaries.
As at 31 March 2025, the Trust has Rs. 557,045.94 Lakhs of investments (non-current) and Rs. 787,478.80 Lakhs of loans to subsidiaries.
The Investment Manager of the Trust tests investments for impairment atleast annually or earlier if there is a trigger for assessing impairment.	- obtaining the valuation report of the independent valuer and assessing the appropriateness of the valuation methodology applied in determining the recoverable amount.
The Trusts evaluation of impairment of its investments and loans in subsidiaries is done by comparing the recoverable value (being the higher of value in use or fair value less costs to sell) as per Ind AS 36 "Impairment of Assets" and the carrying value of such investments and loans in the standalone financial statements.	- testing the controls over impairment assessment process, including those over the key assumptions and review of the valuation methodology.
The recoverable value for each of the subsidiaries are determined using the discounted cash flow model involving significant management judgment in respect of various key assumptions such as future cash flows, revenue growth rates, traffic estimates, discount rates, inflation and other economic parameters, assessment of the extension in concession periods considered on account of target traffic subject to final approval from authorities and the expected outcome of the other matters under arbitration, etc. as outlined in Note 37(c) of the standalone financial statements. These factors are considered in determining whether a diminution in the value of investments or the recoverability of loans is other than temporary in nature.	- assessing the assumptions used by the valuer around the key drivers of the cash flow forecasts, discount rates, revenue projections based on the independent experts traffic study reports and the cost estimates considering the technical report provided by independent experts.
	- evaluating the objectivity, independence and competency of independent valuer and experts involved in the process.
There is an inherent risk in the valuation of investment/ recoverability of loans, due to the use of estimates and judgements mentioned above.	- assessing the reasonableness of the managements assessment of the expected extensions to the concession period including the matters under arbitration with reference to the terms of the concession agreements, the methodology followed by the Trust and the legal advice obtained by the Management in respect of such matters, as applicable.
Therefore, impairment of investments in equity shares of subsidiaries / loans made to their recoverable amount is considered as a key audit matter.	- involving our specialists, to assess the reasonableness of the managements projections of revenue including traffic growth through the balance concession period considered and the cost estimates, the discount rate used in the valuation and the valuation methodology used by the Management to determine the fair value.
Refer note 2.9 for the material accounting policy on impairment of investments and note 4 for investments as at 31 March 2025. Also refer note 2.7.2 for the material accounting policy on financial asset and note 5 for loans to related parties as on 31 March 2025.	- discussing / evaluating potential changes in key drivers as compared to previous year / actual performance for valuation with Investment Manager in order to evaluate whether the inputs and assumptions used in the cash flow projections were appropriate, including the considerations due to current economic and market conditions.
	- performing sensitivity analysis of key assumptions to understand the scenarios in case of changes to key assumptions.
	- testing the arithmetical accuracy of the model and computation of the impairment loss, where applicable.
	- evaluating the appropriateness of the disclosures made in the standalone financial statements.
3 Allowance for credit loss on loans and interest thereon made by the Trust to its subsidiaries.	Our principal audit procedures performed include:
The trust has total outstanding loan receivable and interest thereon of Rs.11,76,105.59 Lakhs (corresponding allowance for expected credit loss amounts to Rs.2,58,943.70 Lakhs) as at 31 March 2025.	- assessing the appropriateness of the Trusts accounting policy by comparing the same with the applicable accounting standards.
The appropriate valuation of loan is dependent on a number of factors such as Maturity profile, payment terms, extent and ability of subsidiaries to make payment.	- testing the controls over the (1) development of methodology for allowance for credit losses, including consideration of credit losses, of the current and estimated future economic conditions (2) completeness and accuracy of information used in the estimation of probability of default and delay and (3) computation of allowance for credit losses.
The carrying value is adjusted with the allowance for credit losses amount calculated based on the above-mentioned factors, wherein estimates and judgments are involved considering the delay and default risk and hence it has been considered as a key audit matter.	- assessing the subsidiaries loan profile and economic environment applicable to these loan receivables , and evaluating the reasonableness of managements assessment of the expected future collections from the Project SPVs.
Refer 2.7 in material accounting policies on financial assets and note 5 and 9 for loans to related parties and interest thereon as on 31 March 2025.	- evaluating the approach applied by the Trust to identify lifetime expected credit losses and reasonableness of supportable information about expected recoveries in the future.
	- recomputing the expected credit loss allowance considering the above determined input data and comparing the amounts so recomputed with the amounts recorded by the management to determine if there were any material difference individually or in the aggregate.
	- evaluating the adequacy of the disclosures in the financial statements by mapping the same against the requirements of the applicable accounting standards.
4 Related party transactions and disclosures	Our audit procedures included the following:
The Trusts has undertaken transactions with its related parties in the normal course of business. These include providing loans to investee SPVs, earning interest on such loans, and other transactions with investee SPVs as disclosed in note 30 of the standalone financial statements.	- ensuring that the Trusts policies, processes and procedures in respect of identifying related parties, evaluating arms length, obtaining necessary approvals, recording and disclosure of related party transactions, including compliance of transactions and disclosures in accordance with SEBI InvIT regulations and related Ind AS.
We identified the accuracy and completeness of related party transactions and its disclosure as set out in respective notes to the standalone financial statements as a key audit matter considering the quantum and percentage of transactions in the balance sheet and statement of profit and loss account during the year ended 31 March 2025.	- reviewing minutes of the governing body of Trust in connection with transactions to assess authorization by the Board and whether the transactions are in the ordinary course of business at arms length and in accordance with the SEBI InvIT regulations.
	- testing, on a sample basis, related party transactions with the underlying contracts and other supporting documents to ensuring that the accounting of the transaction represents the arrangement between the parties and reflects the nature of transactions intended.
	- evaluating the appropriateness and adequacy of disclosures made by Management of the Investment Manager for compliance with the relevant requirements of the SEBI InvIT Regulations and the applicable accounting standards.

Information other than the standalone financial statements and auditors report thereon

The Board of Directors of Interise Investment Managers Limited (formerly LTIDPL IndvIT Services Limited) acting in its capacity as an Investment Manager of the Trust is responsible for the other information. The other information comprises the information included in the Annual Report of Investment Manager including annexures to Investment Managers Report and other information as required to be given by SEBI InvIT Regulations, but does not include the consolidated financial statements standalone financial statements and our auditors report thereon.

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 and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditors report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and the Board of Directors of Investment Manager for the standalone financial statements

The Board of Directors of the Investment Manager is responsible for the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and the changes in the unitholders equity, the net assets at fair value, the total returns at fair value and the net distributable cash flows of the Trust, in accordance with the requirements of the SEBI InvIT Regulations, and accounting principles generally accepted in India, including Ind AS to the extent not inconsistent with SEBI InvIT Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the SEBI InvIT Regulations for safeguarding of the assets of the Trust and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls for ensuring the accuracy and completeness of 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, the Management and the Board of Directors of the Investment Manager are responsible for assessing the Trusts ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors of the Investment Manager either intends to liquidate the Trust or to cease operations, or has no realistic alternative but to do so.

The Board of Directors of the Investment Manager is also responsible for overseeing the Trusts financial reporting process.

Auditors responsibility for the audit of the standalone financial statements

Our objectives are to obtain reasonable assurance 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 financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism 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 entitys internal controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and the Board of Directors of the Investment Manager.

• Conclude on the appropriateness of the Management and the Board of Directors of the Investment Managers 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 Trusts 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 Trust 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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

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 31 March 2025 and are therefore the key audit matters. We describe these matters in our 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 and as required by SEBI InvIT Regulations, 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 other comprehensive income) dealt with by this report are in agreement with the books of account of the Trust.

(c) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards as defined in rule 2(1)(a) of Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India, to the extent not inconsistent with SEBI InvIT regulations.

for SHARP & TANNAN	for DELOITTE HASKINS & SELLS
Chartered Accountants	Chartered Accountants
(Firms registration no. 003792S)	(Firms registration no. 008072S)
V. Viswanathan	R. Prasanna Venkatesh
Partner	Partner
Membership no. 215565	Membership no. 214045
UDIN: 25215565BMINJG7062	UDIN: 25214045BMNWHI8832
Place: Chennai	Place: Chennai
Date: 21 May 2025	Date: 21 May 2025

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