We have audited the accompanying standalone financial statements of Ashiana Housing Limited ['the Company'), which comprise the Balance Sheet as at 31st March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flow for the year then ended, and Notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
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 ('Act') in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards ['Ind AS') specified under section 133 of the Act, of the state of affairs [financial position) of the Company as at March 31, 2024, and profit [financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
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 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 ['ICAI') together with the ethical requirements that are
relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial
statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements.
The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
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Revenue recognition (refer note 8.1 to the standalone financial statements)
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Key Audit Matter
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How the matter was addressed in our audit
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Revenue from sale of residential units represents 97.07% of the total
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Our audit procedures on Revenue recognition included the following:
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revenue from operations of the Company.
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•
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Evaluating that the Company's revenue recognition accounting
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Revenue is recognised upon transfer of control of residential units to
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policies are in line with the applicable accounting standards
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customers for an amount that reflects the consideration which the
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and their application to the key customer contracts including
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Company expects to receive in exchange for those units. The trigger
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consistent application;
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for revenue recognition is normally upon satisfaction of performance obligation and the control thereof is transferred from the company to the buyer upon possession or upon issuance of letter for offer of
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•
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Sales cut-off procedures for determination of revenue in the correct reporting period;
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possession ["deemed date of possession").
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Scrutinising all the revenue journal entries raised throughout
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Revenue recognition prior to completion of the project
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the reporting period and comparing details of a sample of these journals, which met certain risk-based criteria, with
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Due to the Company's projects being spread across different regions
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relevant underlying documentation;
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within the country and the competitive business environment, there is a risk that revenue could be overstated [for example, through premature revenue recognition i.e.
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•
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Conducting site visits during the year for selected projects to
understand the scope and nature of the projects and to assess the progress of the projects; and
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•
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Considered the adequacy of the disclosures in note 2.24 to the standalone financial statements in respect of the judgments taken in recognising revenue for residential units.
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Key Audit Matter
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How the matter was addressed in our audit
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recording revenue without receipt of approval from authorities or its
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In addition, we have the performed the following procedures:
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intimation to the customers) or understated (for example, through
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• Discussing and challenging key management judgments in
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improperly shifting revenues to a later period) in order to present
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interpreting contractual terms including obtaining inhouse
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consistent financial results. Since revenue recognition has direct
impact on the Company's profitability, the element of management
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legal interpretations;
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bias is likely to be involved.
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• Testing sample sales of units for projects with the underlying contracts, completion status and proceeds received from customers; and
• Identified and tested operating effectiveness of key controls
around approvals of contracts, milestone billing, intimation of possession letters / intimation of receipt of occupation certificate and controls over collection from customers;
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Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone 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 standalone 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 in the 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.
Responsibilities of Management and Those charged with Governance for the Standalone 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 state of affairs (financial position), profit or loss (financial performance including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of 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, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financial reporting process.
Auditor's Responsibilities for the Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone 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 Standards 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, 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 Standards on Auditing, we exercise professional judgment and maintain professional skepticism 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, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion
on whether the company has internal financial controls with
reference to Financial Statements 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 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 standalone 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 standalone 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
As required by the Companies [Auditor's Report] Order, 2020 ["the Order"] issued by the Central Government of India in terms of subsection [11] of section 143 of the Act, we give in the "Annexure A”, a
statement on the matters specified in the paragraph 3 and 4 of the Order to the extent applicable.
[A] As requird 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 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 paragraphs B[vi] below, on reporting under Rule 11[g] of the Companies [ Audit and Auditors] Rules, 2014, as amended;
c] The Balance Sheet, the Statement of Profit and Loss [including Other Comprehensive Income], Statement of change in Equity and the Cash Flow Statement 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 Indian Accounting Standards specified under Section 133 of the Act;
e] On the basis of the written representations received from the directors as on 31 March 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.
[B] 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, to the extent ascertainable, disclosed the impact of pending litigations on its financial position in its financial statements - Refer clause [d] and [e] of Note 12 to the financial statements;
ii. The Company does not have any material foreseeable losses on long term contracts including derivative contracts which would impact its financial position;
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 have been advanced or loaned or invested [either from borrowed funds or share premium or any other
(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 (a) and (b) above, contain any material misstatement.
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 of 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 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;
v. The Company has complied with section 123 of the Companies Act, 2013 in respect to declaration and payment of dividend during the year.
vi. Based on our examination which included test checks, except for the matters mentioned below, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Additionally, the audit trail has been preserved by the company as per the statutory requirements for record retention.
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Nature of exception noted
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Details of exception
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CRM Software did not have audit trail feature
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The CRM software use by the company for maintaining customer Ledgers did not have an audit trail feature enabled, consequently,
there was no audit trail maintained for transactions recorded with in this particular software for the whole year.
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Instances of accounting software maintained by a third
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The payroll management software used for maintenance of payroll
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party where we are unable to comment on the audit trail
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records of the Company is operated by a third party software service
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feature.
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provider. In the absence of any information on existence of audit trail (edit logs) for any direct changes made at the database level in that software, we are unable to comment on whether audit trail feature with respect to the database of the said software was enabled and operated throughout the year)
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(C) With respect to the other matters to be included in the For B CHHAWCHHARIA & CO
Auditor's Report in accordance with the requirements of Chartered Accountants
section 197(16) of the Act, as amended: Firm Registration No. 305123E
In our opinion and to the best of our information and according Abhishek Gupta
to the explanations given to us, the remuneration paid by the Partner
Company to its directors during the year is in accordance with Place: New Delhi Membership No. 529082
the provisions of section 197 of the Act Date: 28th May, 2024 UDIN-24529082BKCCBE5834
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