1. We have audited standalone financial Charles (India) (‘the
which comprise the Sheet as at 025, the31 Statement of Profit Comprehensive Statement of
Cash Flow and Statement of Changes then ended, and financial accounting policy explanatory
2. In our opinion andur information and explanations given standalone
financial information required 2013the (‘)in theAct and give a true and with
Indian Accounting(‘Ind the AS)specified under read with the Standards) Rules,
015 and 2 principles generally state of affairs ofch 2025, and its loss comprehensive the
changes in that date.
3. We conducted our the Standards on section 0) 143(1 of the
responsibilities further describedAuditors Responsibilities Standalone Financial our
report. We are
Key Audit Matters Balance Standalone 2 4. and Key audit Loss s are
those(including Other matter ourthe professionalStandalone the significanceStandalone in
our financialEquity for statementsthe year of notes These matters wereto the
standalone ofincluding our auditmaterial of the information statements a whole, andand as
other in opinion. thereon, and we separate opinion on these to the best of o according 5.
We have determinedto the the to belowus, tothe beaforesaid the key communicated in
ourstatements give the other information included in the include the and our
auditors report thereon. Report is expected after the date of
| Key audit matters |
How our audit addressed the key audit matters |
| Impairment assessment of investments in and loans given to
subsidiaries |
Our audit procedures included, but were not limited to the
following: |
| Refer note 3.3 for Companys material accounting policy
information relating to impairment of assets and note 7 and 8 for details of investments
and loans and related disclosures. |
• Obtained an understanding of the managements
process for identification of possible impairment indicators for investments, significant
increase in credit risk for loans and managements process for impairment testing and
evaluated the design and tested the operating effectiveness of key internal financial
controls relating to such process; |
| As at 31 March 2025, the carrying values of Companys
investment in subsidiaries amounts to Rs. 4,046.14 million, and loans given to
subsidiaries amounts to Rs. 3,248.31 million, which together constitutes 49% of the total
assets of the Company. |
• Evaluated the accounting policies with respect to
impairment/credi t risk assessment and assessed its compliance with the requirements of
Ind AS 36 and Ind AS 109; |
| At each period end, the management evaluates whether any
impairment indicators exist in the carrying value of investments, in accordance with the
requirements of Ind AS 36, Impairment of Assets (‘Ind AS 36), and whether there
has been significant increase in credit risk in loans receivables in accordance with the
requirements of Ind AS 109, Financial Instruments (‘Ind AS 109). Investments
and loans where impairment indicators are identified or significant increase in credit
risk is noted, the management performs a detailed assessment to determine the
recoverability of such balances. |
• Compared the carrying value of investments to the net
assets of the underlying entity, to identify whether the net assets, being an
approximation of the minimum recoverable amount of such investee companies, were in excess
of their carrying amount; |
| This recoverability assessment is inherently subjective, due
to reliance on valuations of land parcels/properties held, cash flow projections of these
investee companies, expectations about future market or economic conditions and other
challenges. |
• Wherever the net assets of such investee companies
were lower than total carrying value of investments: |
| The above impairment test has not resulted in recognition of
any impairment or credit loss during the current year. |
• Obtained the impairment assessment working from the
management and tested the arithmetical accuracy of valuation model; |
| Considering the significance of aforesaid balances to the
overall financial statements and significant management judgments and assumptions involved
in impairment/credit risk assessment, this matter has been identified as a key audit
matter for the current year audit. |
• Involved independent auditors valuation expert
to assess the appropriateness of the valuation methodology and reasonableness of key
assumptions used by management s valuation experts for valuation of land
parcels/proper ties in these entities; |
|
• Assessed the competence, capabilities and objectivity
of management and auditors valuation expert; |
|
• Evaluated and challenged management s
assumptions used in the impairment assessment, particularly those related |
|
to guidance value for stamp duty and prevalent market rate,
past results and external factors, considering the evidence available to support these and
our understanding of the business; and |
|
• Performed independent sensitivity analysis for
reasonably possible changes in the key assumptions used to assesses the estimation
uncertainties involved and evaluate the sufficiency of available headroom between
recoverable amount and carrying amount; and |
|
• Assessed the appropriateness and adequacy of related
disclosures made in the standalone financial statements in accordance with applicable
accounting standards. |
| Accounting treatment of borrowings and compliance with
covenants |
Our audit procedures included, but were not limited to the
following: |
| Refer note 3.5 and 3.11 for Companys material
accounting policy information relating to borrowings and note 21 for details of borrowings
and related disclosures. |
• Evaluated the appropriateness of accounting policy for
borrowings in terms of principles enunciated under Ind AS, including Ind AS 109 and Ind AS
23; |
| As at 31 March 2025, borrowings comprise of Rupee Term Loans
(RTLs) amounting to Rs. 9,717.60 million and non convertible debentures (NCDs) amounting
to Rs. 734.17 million. |
• Evaluated the design and tested the operating
effectiveness of key internal financial controls in respect of accounting of borrowing
costs and compliance with covenants; |
| During the year, the Company has obtained RTLs for repaying
existing NCDs, capital expenditure, lending to a subsidiary and other related expenses.
Significant transaction costs were incurred and financial guarantees were provided by
related parties for raising such funds. Such transaction costs and guarantees were
accounted basis guidance given under Ind AS 109, Financial instruments (‘Ind AS
109). |
• Obtained and read the underlying borrowing and
guarantee agreements to understand the relevant terms and conditions such as tenure,
covenants, interest rate, guarantee, etc., to ensure appropriateness of the accounting
treatment; |
| The interest cost incurred on RTLs/NCDs, to the extent
directly attributable to the acquisition/construct ion for real estate projects undertaken
by the Company, has been capitalised in accordance with the principles of Ind AS 23,
Borrowing Costs (‘Ind AS 23). |
• Reviewed the amortisation schedules of borrowings and
performed recomputation based on the effective interest method as per Ind AS 109; |
| Also, as per the terms of the loan agreements and debenture
deeds, the Company is required to comply with certain debt covenants, including debt
coverage, ‘loan to value ratios and minimum threshold for Guarantors net
worth, that require management to perform a fair valuation of assets mortgaged as security
at end of each reporting period and requires reporting of the financial information of the
Guarantor. |
• Assessed that the borrowing cost capitalised during
the year is in accordance with the principles of Ind AS 23; |
| Considering the significance of borrowings, transaction costs
incurred, guarantees received and significant management judgments and assumptions
involved in estimation of fair value of assets used for debt covenant compliance testing,
this matter require significant audit efforts to determine appropriateness of accounting
treatment and related disclosure. |
• Verified compliance of debt covenants as specified in
loan agreements and debenture deeds and accuracy of quarterly returns or statements filed
by the Company with lenders by comparing with underlying books of accounts; |
| Accordingly, this matter has been identified as a key audit
matter in the current year audit. |
• Involved independent auditors valuation expert
to assist in evaluating the appropriateness of key assumptions such as future lease
rentals, capitalization rate and discount rate used by managements valuation experts
for fair valuation of mortgaged assets, for aforesaid debt covenant testing; |
|
• Assessed the competence, capabilities and objectivity
of management and auditors valuation expert; |
|
• Obtained the financial information of the Guarantor
from management to ensure that specific debt covenant in this respect is complied with;
and |
|
• Assessed the maturity profile of the borrowings to
evaluate the classification and evaluated the appropriateness and adequacy of related
disclosure made in the standalone financial statements in accordance with applicable
accounting standards. |
Our opinion on the statements does information will notand we of
assurance n.
In connection with financial statements, read the other when it becomes
consider whether materially the financial statements obtained in the be materially
7. The accompanying statements have Companys Board of
Companys Board of responsible for the 134(5) of the Act preparation andf standalone
financial true and fair view financial comprehensive and cash flows of with the Ind ASion
of the Act and generally accepted responsibility also adequate accounting with the
provisions safeguarding of the and preventing andfor other irregularities; comprises of
appropriatethe information accounting judgments Report, and but estimates
does not and prudent; and design, financial statements Annual maintenance of adequatel to
controls, that were be made available to us this ensuring the accuracyauditors report.
the accounting records, standalone preparationfinancial and standalonecover the financial
other true and fair view and any form misstatement, whether due thereo
our 8. Inaudit preparingof the standalone the statements,our
responsibility the Board is responsibleidentified above for assessings
abilityand, toin continuedoing so, as disclosing, as applicable, other information is
standalone going with ncern and using the co basisor ourof knowledge accounting Directors
otherwise eitherappears intends to Company or to cease . realistic alternative but
Annual Report, if we 9. is The amaterial Board ofmisstatement Directors overseeing to
Companys financial communicate the the process. with governance.
Management Auditors Responsibilitiesand Those the Standalone
Financial for the Statements
10. Our objectives are to standalone assurancefinancial about whether
financial statements as approved by the Directors. materialmisstatement, whether The
Directors or error, and are s reportto issue matters includes ourstated opinion section
. with a highrespect levelto ofthe presentationguarantee o that an audit accordance
statements withthatStandards give of alwaysdetect a material the financial
position, exists. Misstatements can including other errorchanges andin areequity
considered individually Company accordance or in the 133 reasonably under sect be
expected economicaccounting decisionsprinciples of basis in f these standalone India. o
This includes maintenance of 11. records As partin ofaccordance an audit in
Standardsof the Act on Auditing, for assets section0)of143(1 ofthe theCompany Act
we detecting professionalfrauds and judgment selection and application
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