We have audited the accompanying financial statements of ALPINE HOUSING DEVELOPMENT CORPORATION LIMITED (“the Company”), which comprise the Balance Sheet as at March 31,2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of significant accounting policies and other explanatory information (hereinafter referred to as the “financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2024 and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on Auditing (“SA”s) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“lC'AI”) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the 1C AI’s 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 financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the 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.
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Key audit matter
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How our audit addressed the key audit matter
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1. Revenue recognition for sale of residential units
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The Company applies Ind AS 115, Revenue from Contracts with Customers (Ind AS 115) for recognition of revenue from sale of residential units. Refer note 2.2 (c) -a to d and 25 to the financial statements for accounting policy and related disclosures.
Revenue is recognised upon transfer of control of residential units to customers for an amount which reflects the consideration the Company expects to receive in exchange for those units. The point of revenue recognition is normally based on the terms as included in the intimation for the handover of unit to the customer on completion of the project, and substantial collection is received. The Company recognises the revenue at a point in time upon handover/deemed handover of the residential units.
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Our audit procedures on revenue recognised from sale of
residential units included, but were not limited to the following:
• Evaluated the appropriateness of accounting policy for revenue recognition on sale of residential units in terms of principles clearly stated under Ind AS 115;
• Assessed the management evaluation of determining revenue recognition from sale of residential units at a point in time in accordance with the requirements under Ind AS 115;
• Obtained and understood the revenue recognition process, evaluated the design and performed test of controls over revenue recognition including determination of point of transfer of control and completion of performance obligations on a sample basis; and
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For contracts involving sale of residential units, the Company receives the consideration in accordance with the terms of the contract in proportion of the percentage of completion of such real estate project and represents payments made by customers to secure performance obligation of the Company under the contract enforceable by customers. The assessment of such consideration received from customers involves significant judgment in determining if the contracts with customers involves any financing element.
lnd AS 115 requires significant judgment in determining when ‘control’ of the residential units is transferred to the customer.
Considering the significance of management judgements and estimates involved and the materiality of amounts involved, aforementioned revenue recognition is identified as a key audit matter.
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• For samples selected during the year, verifying the underlying documents - contracts with customers, invoices raised and collections from the customers;
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2. Revenue recognition for contractual construction projects
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The Company recognises revenue over a period of time in accordance with lnd AS 115, Revenue from Contracts with Customers (lnd AS 115). Refer note 2.2(c)- a to d and 25 to the financial statements for accounting policy and related disclosures
The Company recognises revenue from construction contracts on the basis of stage of completion (input method) based on the proportion of contract costs incurred at reporting date, relating to the total estimated costs of the contract at completion. The recognition of revenue is therefore dependent on estimates in relation to total estimated costs of each such contract, which is subject to inherent uncertainty as it requires ascertainment of progress of the project, cost incurred till date and balance cost to be incurred to complete the project.
Significant judgments are also involved in determining when the underlying performance obligations are satisfied and also determining expected losses, when such losses become probable based on the expected total contract cost. Cost contingencies are included in these estimates to take into account specific risks of uncertainties or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and adjusted w'here appropriate.
Considering the significance of management judgements and estimates involved and the materiality of amounts involved, revenue recognition from construction contracts is identified as a key audit matter.
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Our audit procedures on revenue recognition for contractual
construction projects included, but were not limited to the
following:
• Evaluated the appropriateness of accounting policy on revenue recognition for contractual construction projects in terms of principles enunciated under IndAS 115;
• Evaluated the design and tested operating effectiveness of key controls around budgeting of project cost, approval of purchase orders, recording of actual cost, raising of invoices and estimating the cost to complete the project;
• Assessed management evaluation of determining revenue recognition for contractual construction projects over a period of time in accordance with the requirements of lnd AS 115;
• On a sample basis, tested costs incurred by examining underlying invoices and other applicable documents;
• For sample invoices raised during the year, verifying the underlying documents including invoices, work orders and customer acceptance;
• Compared actual cost with budgeted cost to determine percentage of completion of the project; and
• Assessed the adequacy of disclosures included in the standalone financial statements in compliance with the requirements of lnd AS 115.
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3. Revenue recognition for Sale of products
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The Company applies lnd AS 115, Revenue from Contracts w'ith Customers (lnd AS 115) for recognition of revenue from sale of products. Refer note 2.2 (c) -e and 25 to the financial statements for accounting policy and related disclosures.
Revenue is recognised upon transfer of control of products manufactured by the company to customers for an amount which reflects the consideration the company expects to receive in exchange for those products. The point of revenue recognition is normally upon transfer of control to the customer on delivery of product.
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Our audit procedures on revenue recognition for sale of products included, but were not limited to the following:
• Evaluation of company’s accounting policies for revenue recognition on sale of products manufactured, are in line with the applicable accounting standards;
• Evaluation of the design and implementation and testing the operating effectiveness of key controls around approvals of sale order received, invoice raised, intimation of delivery of product and controls over collection from customers;
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Considering the competitive business environment, there is a risk of revenue being overstated or understated in order to present consistent financial results. Since revenue recognition has direct impact on the company’s profitability, there is a possibility of the company being biased, hence this is considered as a key audit matter.
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• For samples selected verifying the underlying documents -Sale order, invoice raised, good received note authorised by the customer and the collections; and
• Cut-off procedures for recording of revenue in the relevant reporting period
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4. Assessing the recoverability of carrying value of Inventories.
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Refer note 2.2(e), 10, 27, 29 to the financial statements for accounting policies on inventories and related financial disclosures.
The inventories are carried at lower of cost and net realisable value (‘NRV’). The determination of the NRV involves estimates based on prevailing market conditions and taking into account the estimated future selling price, cost to complete projects and selling costs
Inventories on construction of residential flats comprising ongoing and completed projects, initiated but unlaunched projects and land stock, represents a significant portion of the company’s total assets. A project comprises multiple units, the construction of which is carried out over a number of years. The recognition of profit for sale of units, is therefore dependent on the estimate of future selling prices and construction costs.
Forecasts of future sales are dependent on market conditions, which can be difficult to predict and be influenced by political and economic factors.
Considering the significance of the amount of carrying value of inventories and the involvement of significant estimation, this considered as a key audit matter.
Considering the significance of the amount of carrying value of inventories and the involvement of significant estimation, this considered as a key audit matter.
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Our procedures in assessing the carrying value of the inventories but were not limited to the following:
• Evaluated the appropriateness of accounting policies with respect to inventories in terms of principles enunciated under applicable accounting standards.
• Evaluated the design and tested operation of internal controls related to testing NRV/ net recoverable value with carrying amount of inventory.
• Inquired with management to understand key assumptions used in determination of the N RV/ net recoverable value; and
• Obtained and tested the computation/ assessment of the NRV/ net recoverable value on a sample basis.
• Compared the NRV to recent sales in the project or to the estimated selling price;
• Assessing the company’s valuation methodology for the key estimates, data inputs and assumptions adopted in the valuation;
• Compared the estimated construction costs to complete each project with the Company’s updated budgets; and
• For land stock, on a sample basis, obtained the fair valuation reports or the published guidance values and reviewed the valuation methodology, key estimates and assumptions adopted in the valuation.
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Information Other than the Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible forthe other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance Report, and Shareholder information, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our 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.
Managements Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the 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, orthe override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)( I) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system 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 management.
• Conclude on the appropriateness of management’s 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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the 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 auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
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 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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on ourauditwereportthat:
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) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matters stated in the paragraph h (vii) below on reporting under Rule 11 (g).
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act
e) On the basis of the written representations received from the directors as on March 31,2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls overfinancial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its francial statements.
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either
individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (Intermediaries’), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf o f the Company (‘Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (‘Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement
v. The company has not declared or paid any divided during the year. Accordingly, reporting under Rule 11(f) of the Companies
(Audit and Auditors) R ules 2014 is not applicable.
vi. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the
paragraph 1 (b) above on reporting under Section 143(3)(b) and paragraph h (vii) below on reporting under Rule 11 (g).
vii. Based on our examination which included test checks, the company has used an accounting software for maintaining its
books of account which has a feature of recording audit trail facility. The audit trail (edit log) feature of Tally Prime software used by the company to maintain books of account did not operate during the period from April 1,2023 upto March 31,2024. As the Audit trail feature (edit log) was not enabled during the course of our audit we cannot comment on any instance of audit trail feature being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1,2023, reporting under Rule 11 (g) of the Companies (Audit and Auditor) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable forthe financial year ended March 31,2024.
2. As required by the Companies (Auditor’s Report) Order, 2020 (the ‘Order’) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B”a statement on the matters specified in paragraphs 3 and 4 of the Order.
For R V K S And Associates Chartered Accountants Firm Registration No. 008572S
Subbanarasimha H L Partner
Membership No.238159 UDIN:
Place: Bengaluru Date: May29,2024
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