MAHINDRA & MAHINDRA LTD. Consolidated Accounts 347 Report on the Audit of the Consolidated Financial Statements Opinion We have audited the consolidated financial statements of Mahindra & Mahindra Limited (hereinafter referred to as the “Holding Company”) and its subsidiaries (Holding Company and its subsidiaries together referred to as “the Group”), its associates and its joint ventures, which comprise the consolidated balance sheet as at 31 March 2025, and the consolidated statement of profit and loss (including other comprehensive income), consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”). In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate/consolidated financial statements of such subsidiaries, associates and joint ventures as were audited by the other auditors, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and joint ventures as at 31 March 2025, of its consolidated profit and other comprehensive income, consolidated changes in equity and consolidated cash flows for the year then ended. Basis for Opinion We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group, its associates and joint ventures in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in terms of the Code of Ethics issued by the Institute of Chartered Accountants of India and the relevant provisions of the Act, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence obtained by us along with the consideration of reports of the other auditors referred to in paragraph (a) of the “Other Matters” section below, is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment and based on the consideration of reports of other auditors on separate/ consolidated financial statements of components audited by them, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Impairment assessment of intangible assets under development in the Automotive Cash Generating Unit (CGU) See Note 2(h) to consolidated financial statements The key audit matter How the matter was addressed in our audit The Group has identified its Automotive business segment as a separate CGU (‘Auto CGU’). The Holding Company holds intangible assets under development and tests its Auto CGU for impairment at least annually. For the purpose of the impairment test, the Holding Company determines recoverable value of the Auto CGU which is the higher of Value In Use (VIU) or Fair Value Less Cost of Disposal (FVLCD). The recoverable value is dependent on certain assumptions and estimates of future performance and management’s plans for continuation of the projects. On discontinuing individual projects under development, an impairment loss relating to the specific project is recognised in the statement of profit and loss. Changes in business environment, including market or economic environment, geopolitical situations and general inflationary trends could have a significant impact on the valuation of the Auto CGU and management’s plan for specific projects under development. This annual impairment test is considered to be a key audit matter considering the significant judgements required in determining the key assumptions. Our audit procedures included: • T ested the design, implementation and operating effectiveness of key controls in respect of the Company’s impairment assessment process, including the approval of forecasts and valuation models; • I nvolved valuation specialists as applicable, to evaluate the appropriateness of the valuation models including assumptions such as the discount rates used in VIU calculations; • T ested the key VIU assumptions used in estimating future cash flows such as revenue, costs, inflation and growth rates by comparing these inputs with past performances, consistency with the Board of Director’s approved investment plans and knowledge of the industry; • E valuated past performance where relevant, and assessed historical accuracy of the forecast produced by management; and • Evaluated the stage of development of the intangible assets under development, judgments used for expected probable economic benefits and associated expenditures, management plans for continuation of projects and their assessment of feasibility of the projects. Independent Auditor’s Report to the Members of Mahindra & Mahindra Limited
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