IRB Infrastructure Trust Auditor Reports

To the Unit holders of IRB Infrastructure Trust

Report on the Audit of the Standalone Financial Statements

Opinion

We have jointly audited the accompanying standalone financial statements of IRB Infrastructure Trust ("the Trust"), which comprise the Standalone Balance Sheet as at March 31, 2024, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), Standalone Statement of Changes in Unit Holders Equity, Standalone Statement of Cash Flows for the year then ended, Standalone Statement of Net Assets at Fair value as at March 31, 2024, Standalone Statement of Total Returns at Fair Value and Net Distributable cashflows (‘NDCF) of the Trust for the year then ended as an additional disclosure in accordance with the Securities and Exchange Board of India ("SEBI") Master Circular SEBI/ HO/DDHS-PoD-2/P/CIR/2023/115 dated July 06, 2023, as amended, ("the SEBI Circular") for the year ended March 31, 2024 and notes to the standalone financial statements, including material accounting policy information 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 SEBI (Infrastructure Investment Trusts) Regulations, 2014, as amended from time to time read with SEBI Circular, together known as ("InvIT Regulations") and give a true and fair view in conformity with the Indian Accounting Standards prescribed under rule 2(1)(a) of Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, to the extent not inconsistent with the InvIT Regulations, of the state of affairs of the Trust as at March 31, 2024, and profit (including other comprehensive income), changes in unit holders equity, its cash flows for the year ended on that date, its net asset assets at fair value as at March 31, 2024, its total returns at fair value and net distributable cashflows of the Trust for the year ended as on date and other financial information of the Trust for the year ended March 31, 2024.

Basis for Opinion

We conducted our joint 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 ICAI, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us 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 8 of the accompanying standalone financial statements, which describes the presentation of ‘Unit Capital as ‘Equity to comply with 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 current year. 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.

Sr. No Key Audit Matter	How the Key Audit Matters were addressed in our audit
1 The Trust has significant investments (including sub-debt) and has granted loans to its subsidiaries amounting to Rs. 69,752.19 million and Rs. 1,62,699.54 million respectively. The value of investments and loans in aggregate comprise of 95% of the balance sheet. (Refer note 4.1, 4.2 and 5.4 of the standalone financial statements).	Our audit procedures included:
The subsidiaries are licensed to collect toll from road infrastructure projects under concession arrangements with NHAI/HMDA under Toll-Operate- Transfer (TOT) and Build-Operate-Transfer (BOT) model.	1 Read the policy, evaluated the design and implementation and verified, on a test check basis the operating effectiveness of key controls placed around the impairment assessment process of the recoverability of the investments and loans.
The Trust performs an annual assessment of impairment for its investments 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 which requires management to make significant estimates and assumptions related to future revenue growth, concession period, operations costs, the discount rate and assessments of the status of the project and cost to complete balance work.	2. Assessed the net worth of subsidiaries on the basis of latest available financial statements. Further:
	– Compared the carrying amount of investments and loans with the relevant subsidiaries balance sheet to identify their net assets, being an approximation of their minimum recoverable amount. Where the net assets are in excess of their carrying amount, also assessed that those subsidiaries have historically been profit making.
	– For the investments and loans 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.
	3. Tested and verified some of the key assumptions such as future revenue growth, concession period, traffic growth which were most sensitive to the recoverable value of the investments and loans.
	4. Assessed the work performed by management as well as managements external valuation expert, including the valuation methodology and the key assumptions used. Also assessed the competence, capabilities and objectivity of the expert used by the management in the process of evaluating impairment models.
	5. Involved our internal valuation specialist, where appropriate, to evaluate the reasonability of the methodology, approach and key assumptions mainly weighted average cost of capital used in the valuation carried out for determining the fair value of respective subsidiaries.
2 The Trust has payable of Rs. 40,760.96 million as on March 31, 2024 to IRB Infrastructure Developers Limited ("Sponsor") on account of transfer of 9 project companies by the Sponsor (Refer note 10.2 of the standalone financial statements).	Our audit procedures included:
Pursuant to settlement of IRB Infrastructure Trust (‘Trust) by Sponsor, as a Private InvIT, the Trust has entered into Debt Novation Agreements (DNA). As per the terms of DNA, in consideration of assets taken over in 9 project companies, Trust has issued units and agreed to transfer to the Sponsor, the claim amounts when and to the extent the same are eventually received by project companies, on account of Sponsor claims.	1. Evaluated the design and implementation and testing operating effectiveness of key controls placed around the assessment process of the amount payable to Sponsor.
Such Sponsor claims are lodged after obtaining Commercial Operation Date by respective project companies. The amount realisable against claims has been estimated by the valuers based on the weighted average of probabilities of realisation of such claims.	2. Obtained Trusts assessment of the fair valuation of the deferred consideration payable. These projections are based on underlying infrastructure project cash flows which are sensitive to some of the claims to be settled with NHAI/HDMA.
Based on the fair value of liability as estimated by the valuers, a resultant impact in the value of liability has been recognised under the head ‘Loss of fair value measurement of other payables.	3. Assessed the work performed by management as well as managements external valuation expert, including the valuation methodology and the key assumptions used.
There is significant judgement involved on assessing fair value of these payables which is based on key assumptions such as timing of collection, the discount rate, and the probability of success in respect of the claims.	Further, also assessed the competence, capabilities and objectivity of the expert used by the management in the process of evaluating impairment models.
	4. Involved our internal valuation specialist, where appropriate, to evaluate the reasonability of the methodology, approach and discount rate used in the valuation carried out for determining the fair value of deferred consideration payable.
3 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:
The Trust 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 valuation of assets. Such fair valuation has been carried out by the independent valuer appointed by the Investment Manager of the Trust.	1. Obtained an understanding of regulatory requirements by reading the requirements of SEBI Regulations along with the relevant SEBI circulars, pursuant to which the Statements are prepared by the Investment Manager.
For the above purpose, fair value is determined by the management using discounted cash flow (‘DCF) valuation method which involves significant management judgement in respect of various estimates used as inputs such as determination of future cash flows, discount rates, revenue growth rates, inflation rates, tax rates, amongst others. The determination of fair value involves judgement due to inherent high estimation uncertainty in the underlying assumptions.	2. Obtained an understanding of the Trusts policies and procedures adopted by the Investment Manager for computation and disclosure of the Statements.
Considering the judgement 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 for the current year audit.	3. Assessed the work performed by management as well as managements external valuation expert, including the valuation methodology and the key assumptions used. Also assessed the competence, capabilities and objectivity of the expert used by the management in the process.
	4. Involved our internal valuation specialist, where appropriate, to evaluate the reasonability of the methodology, approach and discount rate used in the valuation carried out for determining the fair value.
	5. Tested arithmetic accuracy of cash flows projections and sensitivity analysis.
	6. Evaluated the appropriateness and adequacy of disclosures for compliance with the relevant requirements of SEBI regulations.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Board of Directors of the Investment Manager (the "Board") are responsible for the other information. The other information comprises 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 and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, 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.

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 the Investment Manager and Those Charged with Governance for the Standalone Financial Statements

The Board are responsible for the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in unit holders equity, cash flows of the Trust, net assets at fair value as at March 31, 2024, total returns at fair value, net distributable cashflows for the year ended as on date and other financial information in accordance with the requirement of InvIT Regulations; the Indian Accounting Standards (‘Ind AS) defined under Rule 2(1)(a) of the Companies (Indian Accounting Standards) Rules, 2015 , as amended, and other accounting principles generally accepted in India, to the extent not inconsistent with the InvIT Regulations. This responsibility also includes maintenance of adequate accounting records 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 judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement 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 Board 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 either intends to liquidate the Trust or to cease operations, or has no realistic alternative but to do so.

The Board are also responsible for overseeing the Trusts 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.

We give in "Annexure A" a detailed description of Auditors responsibilities for Audit of the Standalone Financial Statements.

Other Matter

The standalone financial statements of the Trust for the year ended March 31, 2023, were audited by Gokhale & Sathe, Chartered Accountants, one of the joint auditor of the Trust, whose report dated May 12, 2023 expressed an unmodified opinion on those statements. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

Based on our audit and as required by 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 Standalone Balance Sheet, wthe Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of changes in unit holders equity, the Standalone statement of cash Flow, Standalone net assets at fair value as at March 31, 2024, Standalone total returns at fair value and net distributable cashflows of the Trust for the year ended dealt with by this Report are in agreement with the books of account.

(c) In our opinion, the aforesaid standalone financial statements comply with the 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, to the extent not inconsistent with the InvIT Regulations.

For Gokhale & Sathe	For M S K A & Associates
Chartered Accountants	Chartered Accountants
ICAI Firm Registration No. 103264W	ICAI Firm Registration No. 105047W
CA Kaustubh Deshpande	Nitin Tiwari
Partner	Partner
Membership No.: 121011	Membership No.: 118894
UDIN: 24121011BKAAOM3465	UDIN: 24118894BKGQHD3520
Place: Mumbai	Place: Mumbai
Date: May 03, 2024	Date: May 03, 2024

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT ON EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF IRB INFRASTRUCTURE TRUST

Auditors Responsibilities for the Audit of the 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 whether the Trust has in place an adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

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

Conclude on the appropriateness of Boards 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 standalone 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.

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 joint 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 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.

For Gokhale & Sathe	For M S K A & Associates
Chartered Accountants	Chartered Accountants
ICAI Firm Registration No. 103264W	ICAI Firm Registration No. 105047W
CA Kaustubh Deshpande	Nitin Tiwari
Partner	Partner
Membership No.: 121011	Membership No.: 118894
UDIN: 24121011BKAAOM3465	UDIN: 24118894BKGQHD3520
Place: Mumbai	Place: Mumbai
Date: May 03, 2024	Date: May 03, 2024