Mac Charles(I)

Mac Charles (India) Ltd Auditor Reports

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May 6, 2026|05:30:00 AM

Mac Charles India Ltd Share Price Auditors Report

To the Members of Mac Limited

Report on the Audit Financial Statements

Opinion

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.

Basis for Opinion

3. We conducted our the Standards on section 0) 143(1 of the responsibilities further describedAuditors Responsibilities Standalone Financial our report. We are

Company in accordance Ethics issued by the Charles Accountants (India) (‘ICAI)togetherof India the ethical requirements our audit of the of statementsthe Standalone under the and the rules thereunder, fulfilled our other ethical accordance with these Code of Ethics. We the evidence we have obtained accompanying appropriate statements to provide a of Mac Limited Standalone

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

When we read the conclude that there therein, we are matter to those

Responsibilities of Charged with Standalone Financial

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.

Nam e of the statute	Nature of dues	Gross amount (Rs. in million)	Amount paid under protest (Rs. in million)	Period to which the amount relates	Forum where dispute is pending
Income tax Act, 1961	Income tax on certain disallowances*	31.6 5		Financial year 2017 - 18	Commissioner of Income Tax (Appeals) Bangalore
Central Goods and Services Act, 2017	Goods and services tax on certain transactions	54.0 0		Financial year 2017 -18 to 2019 -20	Karnataka High Court
Central Goods and Services Act, 2017	Goods and services tax on certain transactions*	16.0 4		Financial year 2020 -21	Assistant Commissioner of Central Tax

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

Mac Charles (India) Ltd Auditor Reports

Mac Charles India Ltd Share Price Auditors Report

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