We have audited the accompanying Standalone Financial Statements of Indian Renewable Energy DevelopmentAgency Limited ("the Company"),which comprise the Standalone Balance Sheet as at March 31, 2025, and theStandalone Statement of Profit and Loss (including Other Comprehensive income), Standalone Statement ofChanges in Equity and Standalone Statement of Cash Flows for the year then ended, and Notes to the StandaloneFinancial Statements, including a summary of material accounting policies and Other Explanatory informationprepared in accordance with the requirement of the Companies Act 2013 ( as amended) ( "the Act")' (hereinafterreferred to as "Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaidStandalone Financial Statements give the information required by the Act in the manner so required and givea true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and the accountingprinciples generally accepted in India, of the state of affairs of the Company as at March 31, 2025, and profitincluding comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditingspecified under section 143(10) of the Act ("SAs"). Our responsibilities under those Standards are furtherdescribed in the 'Auditor's Responsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued by the Institute ofChartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of theStandalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believethat the audit evidence obtained by us, is sufficient and appropriate to provide a basis for our audit opinion on theStandalone Financial Statements.
Emphasis of Matter
1. As described in Note 38 (40) to the Standalone Financial Statements, the company has classified certainLoans given aggregating to ' 1,202.21 crore required to be classified as stage III /Non-Performing Assets(NPA) as stage II / Standard in terms of interim order of Hon'ble High Court of Andhra Pradesh and Hon'bleHigh Court of Delhi. The statutory disclosures have been made accordingly. However, as a matter ofprudence, interest income on such accounts becoming NPA in terms of prudential norms of RBI has beenrecognized on collection basis and allowance for impairment loss has been made in accounts accordingly.
2. As described in Note 48 (B)(a) to the Standalone Financial Statements, As of 31 March 2024,the reported CRARof the Company was 20.11% .This calculation was based on a 50% risk weight assigned to commissionedrenewable energy infrastructure project assets financed by the Company that had reached their commercialoperations date (COD) and had been operational for over a year. However as per 31 March 2025, the companyhas applied a 100% risk weight to these assets. Accordingly, CRAR of corresponding period as at 31 March2024 has been restated to 15.51%.
Our opinion is not modified in respect of the above matters.
Key audit matters are those matters that, in our professional judgment, were of most significance in our auditof the Standalone Financial Statements for the current period. These matters were addressed in the context ofour audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters. We have considered the matters described below to be the Key AuditMatters for incorporation in our Report.
Sr. No.
Key Audit Matters
Auditor’s Response
1.
Impairment of Loan Assets - Expected Credit
Our Audit procedures based on which we arrived
loss
at the conclusion regarding reasonableness of
Financing is principal business of the Companyand disclosure of Loan assets at fair valueafter considering the provision for loss due to
the disclosures and accounting for Impairmentof Loan Assets -Expected Credit loss includesthe following:
impairment is most significant.
We have obtained an understanding of the
The Company follows a Board approvedmethodology wherein assessment forallowance is carried out by an external agencyfor impairment based on certain criterion /framework classifying the assets into various
guidelines as specified in Ind AS 109 "FinancialInstruments", various regulatory updates,guidance of ICAI and internal instructions andprocedures of the Company in respect of the ECLand adopted the following audit procedures:
stages depending upon credit risk and level of
Evaluation and testing of the key internal control
evidence of impairment.
mechanisms with respect to the loan assets
The measurement of an expected credit lossallowance (ECL) for financial assets measuredat amortized cost requires the use of complex
monitoring, assessment of the loan impairmentincluding testing of relevant data quality, andreview of the real data entered.
models and significant assumptions about future
Recoveries in the loan assets are verified to
economic conditions and credit behaviour (e.g.,
ascertain level of stress thereon and impact on
likelihood of customers defaulting and resulting
impairment allowance in Standalone Financial
losses) to estimate the Probabilities of Default
Statements.
(PD), Loss Given Default (LGD) and Exposure atDefault (EAD). These models and assumptionsare key driver to measure Impairment loss.
Verification / review of the documentation,operations / performance, valuation of availablesecurities and monitoring of the loan assets,
The Company makes significant judgments
especially large and stressed loan assets, to
while assessing ECL and the assumptions
ascertain any overdue, unsatisfactory conduct or
underlying the ECL are monitored and reviewed
weakness in any loan asset account.
on periodically basis.
The company avails services of third party for
The proper application of such assumptions
evaluation of ECL Components. The calculations
is material for statement of the Loan Assets.
in the study for impairment allowance carried
In view of the materiality of the amount of loan
out by third party are relied upon by us and test
assets in the Standalone Financial Statements,
checks are carried out for the same. The data
the loss due to impairment of loan assets has
shared with the third party is verified by us for
been considered as Key Audit Matter in our audit.
correctness of material components being
Refer Note no. 38 (19) (A) (ii) (a) to the
Standalone Financial Statements read withmaterial accounting policy No.3(xx)- 'FinancialInstruments')
submitted. Our audit procedure in the same arelimited in view of not sharing software accessused for study of such data considering theconfidentiality by such third party.
We also compared ECL with the provisioningas required by the applicable directions of theReserve Bank of India and ensured adequacy ofimpairment allowance accordingly.
2
Fair valuation of Derivative FinancialInstruments
To mitigate the Company's exposure to foreigncurrency risk and interest rate, non-Rupee cashflows are monitored and derivative contracts areentered for hedging purpose. The derivatives aremeasured at fair value as per Ind AS 109.
To qualify for hedge accounting, the hedgingrelationship must meet certain specifiedrequirements as per Ind AS. Hedge accountingresults in significant impact on StandaloneFinancial Statements together with complexityof its accounting/assumptions and numerousparameters therein for establishing hedgerelationship. Gain/Loss on these derivativesis recognised in other comprehensive incomeor profit and loss as provided by Ind AS. Themagnitude of such transactions is significant asper the operations of the company.
In view of facts of the matter we have identified itas a key audit matter.
(Refer Note No. 38 (29) to the Standalone Financial
Statement read with material accounting policyNo. 3(xx).
Our Audit procedures based on which we arrivedat conclusion regarding reasonableness ofthe disclosures and accounting for derivativesinclude the following:
-Verification of fair value of derivative interms of Ind AS 109, testing the accuracy andcompleteness of derivative transactions.
-Evaluation of management's key internalcontrols over classification, valuation, andvaluation models of derivative instruments.
-Obtaining details of various financial derivativescontracts as outstanding/pending for settlementas on 31st March, 2025.
-Discussing and understanding management'sperception and studying policy of the companyfor risk management.
-Verification of Mark To Market valuation reportfor outstanding derivatives deal as on 31st March2025 obtained by the company from externalvaluer.
-Verification of underlying assumptions inestimating the fair valuation arrived at for thosefinancial derivative contracts.
-Appropriateness of the valuation methodologiesapplied and testing the same on sample basis forthe derivative instruments.
Additionally, we verified the accounting of gain/loss on derivatives in the other comprehensiveincome or Profit & Loss Account.
Reviewed the appropriateness and adequacy ofdisclosures by the management as required interms of Ind AS 109.
3
Liability for Taxation
The company has material uncertain tax demandsin respect of matters under dispute whichinvolves significant judgement to determine thepossible outcome of these disputes.
Service Tax and Goods & Service Tax (GST)Authorities have raised certain issues and raiseddemands for several past periods, which arebeing contested by company at various forums.
Income Tax cases for FY 2013-14 and FY 2019-20are pending before the CIT (Appeals). Appropriateprovision and disclosure of consequentialliabilities is material to the presentation ofStandalone Financial Statements.
Our Audit procedures based on which wearrived at conclusion regarding reasonablenessof the disclosures and accounting for Liabilityfor Taxation include the following:
Our audit procedure includes review of variousorders passed by Assessing Officer on thesubject matter in dispute with Department ofIncome Tax. We undertook procedure to evaluatemanagement position on these uncertain taxpositions.
For other tax matters, the facts and the legalpronouncements were analyzed and reviewed.
We reviewed the appropriateness and adequacyof disclosures by the management as requiredin terms of Ind AS 37 "Provisions, ContingentLiabilities and Contingent Assets".
Possible outcome of these demands may besubstantial.
In view of this we have identified it as a key auditmatter.
Refer note 38 (16) (a) of the Standalone FinancialStatements.
The Company's Board of Directors is responsible for the other information. The other information comprises theinformation included in the Board's Report including Annexures to Directors' Report, Management Discussionand Analysis Report, but does not include the Standalone Financial Statements and our auditors' report thereon.The other information as stated above is expected to be made available to us after the date of this auditors' report.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not expressany form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the otherinformation identified above when it becomes available, and, in doing so, consider whether the other informationis materially inconsistent with the Standalone Financial Statements, or our knowledge obtained during the courseof our audit or otherwise appears to be materially misstated. When we read the other information as stated aboveand if we conclude that there is a material misstatement therein, we are required to communicate the matter tothose charged with governance and describe necessary actions required as per applicable laws and regulations.
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respectto the preparation of these Standalone Financial Statements that give a true and fair view of the state of affairs(financial position), Profit or Loss (financial performance including other comprehensive income), changes inequity and cash flows of the Company in accordance with the accounting principles generally accepted in India,including the Indian accounting Standards specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; making judgments and estimatesthat are reasonable and prudent; and design, implementation and maintenance of adequate internal financialcontrols, that were operating effectively 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 viewand are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of Directors of the company is responsible forassessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unless the Board of Directors either intends to liquidatethe company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is alsoresponsible for overseeing the company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an auditconducted in accordance with Standard on Auditing 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, theycould reasonably be expected to influence the economic decisions of users taken on the basis of these StandaloneFinancial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professionalscepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whetherdue to fraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances. Under section 143(3](i] of the Act, we are also responsible forexpressing our opinion on whether the Company has adequate internal financial controls system withreference 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 estimatesand related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions thatmay cast significant doubt on the ability of the company to continue as a going concern. If we conclude thata material uncertainty exists, we are required to draw attention in our audit report to the related disclosuresin the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our audit report. However, futureevents or conditions may cause the company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, includingthe disclosures, and whether the Standalone Financial Statements represent the underlying transactionsand events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or inaggregate, make it probable that economic decisions of a reasonably knowledgeable user of the StandaloneFinancial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work and (ii) to evaluate the effect of any identifiedmisstatements in the Standalone Financial Statements.
We communicate with those charged with governance of the Company regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal financial control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and other matters thatmay 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 ofmost significance in the audit of the Standalone Financial Statements of the current period and are therefore thekey audit matters. We describe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when, in extremely rare circumstances, we determine that a matter should notbe communicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
i. As per past practice, in respect of loan assets, the Company has provided Expected Credit Loss (ECL) asrequired under Ind AS 109 based on the ECL report submitted by an independent expert appointed by theCompany, which inter alia includes assumptions based on technical parameters / certain aspects.
ii. The audit of financial statements for the year ended March 31, 2024 was conducted by the predecessorstatutory auditor of company, who had expressed unqualified opinion on those financial statements videtheir report dated April 19, 2024.
1. As required by the Companies (Auditor's Report) Order, 2020 ('the Order'), issued by the Central Governmentof India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the "Annexure-A”,a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable and in
terms of sub-section (5) of section 143 of the Act, we give in the "Annexure-B” information in respect of thedirections issued by Comptroller and Auditor-General of India in respect of the company .
2. As required by section 143(3) of the act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far asit appears from our examination of those books and proper returns adequate for the purposes of ouraudit have been received from branches not visited by us;
c) The Standalone Balance sheet, the Standalone Statement of Profit & Loss including OtherComprehensive Income, Standalone Statement of Changes in Equity and the standalone statement ofCash Flows dealt with by this report are in agreement with the books of account;
d) In our opinion, the aforesaid Standalone Financial Statements comply with the accounting standardsspecified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) In terms of Notification no. G.S.R. 463 (E) dated 05th June 2015 issued by the Ministry of CorporateAffairs, provisions of Section 164(2) of the Act regarding disqualifications of the Directors, are notapplicable as it is a Government Company;
f) As per notification number G.S.R. 463 (E) dated 5th June, 2015 issued by Ministry of Corporate Affairs,
section 197 of the Act as regards the managerial remuneration is not applicable to the Company, sinceit is a Government Company.
g) With respect to the adequacy of the internal financial controls over financial reporting of the Companyand the operating effectiveness of such controls, refer to our separate report in "Annexure-C”.
h) With respect to the other matters to be included in the Auditor's report in accordance with rule 11 ofthe Companies (Audit and Auditors) Rules, 2014 ( 'Audit Rules') , in our opinion and to the best of ourinformation and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in itsStandalone Financial Statements - Refer Note 38 (16) to Standalone Financial Statements.
ii. The Company has made due provision as required under the applicable law or Indian AccountingStandards, for material foreseeable losses, if any, on long term contracts including derivativescontracts: - Refer note 38(19)(C) (II) (c) to the Standalone Financial Statements.
iii. There were no amounts which were required to be transferred to the Investor Education andProtection Fund by the Company.
iv. (a) The management has represented (Refer note 38(27)) that to the best of its knowledge and
belief , no funds have been advanced or loaned or invested ( either from borrowed funds orshare premium or any other sources or kind of funds ) by the company to or in any other personor entity, including foreign entity ("Intermediaries"), with the understanding, whether recordedin writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of the company("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the UltimateBeneficiaries;
(b) The management has represented (( Refer note 38(27)) that to the best of its knowledge andbelief , no funds have been received by the company from any person or entity, including foreignentity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise,that the company shall, directly or indirectly, lend or invest in other persons or entities identifiedin any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") orprovide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on audit procedure performed that have been considered reasonable and appropriatein the circumstances, nothing has come to our notice that has caused us to believe that therepresentations under sub clause (a) and (b) contain any material misstatement.
v. No dividend has been declared or paid during the year by the company.
vi. Based on our examination which included test checks, the company has used an accountingsoftware for maintaining its books of account for the financial year ended 31st March 2025, whichhas a feature of recording audit trail (edit log) facility and the same has operated throughoutthe year for all relevant transactions recorded in the software. Further, during the course ofour audit we did not come across any instance of audit trail feature being tampered with andthe management has represented that the audit trail feature cannot be disabled. Company haspreserved the Audit trail as per the statutory requirements for records retention.
Chartered Accountants
Firm's Registration Number: 009989N
Sd/-
CA Shiv Prakash Chaturvedi
Partner
Membership No. 085084
UDIN: 25085084BMMBWD6474
Date: 15.04.2025
Place: New Delhi