You are here » Home » Companies » Company Overview » Ashiana Housing Ltd

Ashiana Housing Ltd.

BSE: 523716 Sector: Infrastructure
NSE: ASHIANA ISIN Code: INE365D01021
BSE 10:06 | 10 May 118.10 -1.20
(-1.01%)
OPEN

119.35

HIGH

122.00

LOW

118.00

NSE 09:59 | 10 May 119.55 0.35
(0.29%)
OPEN

119.90

HIGH

121.55

LOW

118.45

OPEN 119.35
PREVIOUS CLOSE 119.30
VOLUME 1991
52-Week high 164.00
52-Week low 39.00
P/E 66.72
Mkt Cap.(Rs cr) 1,209
Buy Price 118.55
Buy Qty 4.00
Sell Price 119.30
Sell Qty 5.00
OPEN 119.35
CLOSE 119.30
VOLUME 1991
52-Week high 164.00
52-Week low 39.00
P/E 66.72
Mkt Cap.(Rs cr) 1,209
Buy Price 118.55
Buy Qty 4.00
Sell Price 119.30
Sell Qty 5.00

Ashiana Housing Ltd. (ASHIANA) - Auditors Report

Company auditors report

To the Members of Ashiana Housing Limited

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of AshianaHousing Limited (‘the Company') which comprise the Balance Sheet as at 31March 2020 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 andNotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 (‘Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (‘Ind AS') specified under section 133 ofthe Act of the state of affairs (financial position) of the Company as at 31st March2020 and loss (financial performance including other comprehensive income) its cashflows 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 thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (‘ICAI') together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Companies Act2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Revenue recognition (refer note 8.1 to the standalone financialstatements)

Key Audit Matter How the matter was addressed in our audit
Revenue from sale of residential units represents 96.54% of the total revenue from operations of the Company. Our audit procedures on Revenue recognition included the following:
Revenue is recognised upon transfer of control of residential units to customers for an amount that reflects the consideration which the Company expects to receive in exchange for those units. The trigger 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 possession ("deemed date of possession"). • Evaluating that the Company's revenue recognition accounting policies are in line with the applicable accounting standards and their application to the key customer contracts including consistent application;
• Sales cut-off procedures for determination of revenue in the correct reporting period;
• Scrutinising all the revenue journal entries raised throughout the reporting period and comparing details of a sample of these journals which met certain risk-based criteria with relevant underlying documentation;
• 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
Revenue recognition prior to completion of the project • 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.
Due to the Company's projects being spread across different regions 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. recording revenue without receipt of approval from authorities or its intimation to the customers) or understated (for example through improperly shifting revenues to a later period) in order to present consistent financial results. Since revenue recognition has direct impact on the Company's profitability the element of management bias is likely to be involved.
In addition we have the performed the following procedures:
• Discussing and challenging key management judgments in interpreting contractual terms including obtaining in house legal interpretations;
• 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;

Deferred Tax Assets (refer note 3.7 to the standalone financialstatements)

Key Audit Matter How the matter was addressed in our audit
The carrying amount of the deferred tax assets represents 0.87% of the Company's total assets. Our audit procedures included:
Recognition and measurement of deferred tax assets • Through discussions with management we understood the Company's process for recording deferred tax assets;
The Company has deferred tax assets in respect of brought forward losses and other temporary differences as set out in note 3.7. • We have obtained the approved business plans projected profitability statements for the existing projects and the future projects which are confirmed through definitive agreements;
The recognition of deferred tax assets involves judgment regarding the likelihood of the reasonable certainty of realisation of these assets in particular whether there will be taxable profits in future periods that support recognition of these assets. • We have performed sensitivity analysis and inquired into the basis of the projections for the reasonable certainty of utilisation of the brought forward business losses and therefore recognition of deferred tax assets; and
• We tested the underlying data for the key deferred tax and tax provision calculations.
Management records deferred tax assets in respect of carried forward business losses in cases where it is reasonably certain based on the projected profitability determined on the basis of approved business plans that sufficient taxable income will be available to absorb the carried forward business loss.

Assessment of impact of Corona Virus Disease (COVID-19)

Key Audit Matter How the matter was addressed in our audit
On account of prevalent financial economic and health crises caused due to global pandemic – COVID-19 having impacted the assumptions used for the continuity of operations. As a part of our audit we have carried out the following procedures:
• Obtained an understanding of the process and testing the operating effectiveness of internal controls and preparation of the cash flow forecast based on assumptions and inputs to the model used to estimate the future cash flows.
The Company has prepared cash flow projections and believes it has sufficient liquidity based on the available liquid cash and available credit facilities as disclosed in note 23 and the expected cash to be generated from operations to meet its financial obligations as they fall due for the following twelve months. • We assessed the assumptions around the key drivers of the cash flow forecasts including discount rates
• We compared the cash flow forecasts to approved budget and other relevant market and economic information as well as testing the underlying calculations.
Further the management has factored impact of COVID-19 on carrying value of the Assets and Liabilities. • We discussed the potential changes in key drivers as compared to previous year / actual performance with management and considering impact of COVID-19 in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable;
• We engaged expert to assess the assumption and methodology used by the management to determine the recoverable amount and also assessed the recoverable value headroom by performing sensitivity testing of key assumptions used.
• We tested the arithmetical accuracy of the models.
• We evaluated disclosures related to management assessment on impact of COVID-19 for the continuity of operations.

Information other than the Financial Statements and Auditor'sReport thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the standalone financial statements and our auditor'sreport thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements 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 principlesgenerally accepted in India including the Ind AS specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate implementation and maintenance of accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing thecompany's financial reporting process.

Auditor's Responsibilities for the Audit of Financial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.

As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has internal financial controls with reference to FinancialStatements in place and the operating effectiveness of such controls

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. 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) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("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 mattersspecified in the paragraph 3 and 4 of the order

2. As required by Section 143 (3) of the Act we report that:

(a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet the Statement of Profit and Loss (includingOther Comprehensive Income) Statement of change in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account

(d) in our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act;

(e) on the basis of the written representations received from thedirectors as on 31 March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2020 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B";

(g) with respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act

(h) with respect to the other matters to be included in theAuditor'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 accordingto the explanations given to us:

i. the Company has to the extent ascertainable disclosed the impactof pending litigations on its financial position in its financial statements – Referclause (e) of Note 12 to the financial statements;

ii. the Company does not have any material foreseeable losses on longterm contracts including derivative contracts which would impact its financial position;

iii. there has been a delay of 52 days in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company.

For VMSS & ASSOCIATES
Chartered Accountants
Firm Registration No. 328952E
Mahendra Jain
Place: New Delhi Partner
Date: 16th June 2020 Membership No. 413904

Annexure - A to the Auditors' Report

The Annexure referred to in Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended 31 March2020 we report that:

(i) (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us all theassets have not been physically verified by the management during the year but there is aregular program of physical verification of its property plant and equipment to cover allthe items of property plant and equipment in a phased manner which in our opinion isreasonable having regard to the size of the Company and the nature of its property plantand equipment. Pursuant to the program certain plant and Machinery were physicallyverified by the Management during the year. According to the information and explanationsgiven to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

(ii) According to the information and explanations given to us themanagement has conducted physical verification of inventory at reasonable intervals duringthe year which in our opinion is reasonable having regard to the size of the company andnature of its business. No material discrepancies were noticed on such verification.

(iii) The Company has not granted secured/unsecured loans to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (‘the Act').

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theCompanies Act 2013in respect of loans investments guarantees and securities made by thecompany.

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits within the meaning of Sections 73to 76 of the Companies Act 2013 Act and the Companies (Acceptance of Deposits) Rules2014 (as amended).

(vi) As certified by a Cost Accountant the company has maintained costrecords for the year under review as prescribed under sub-section (1) of Section 148 tothe extent applicable to the company. We have however not made a detailed examination ofsuch records.

(vii) (a) According to the records of the company the company isgenerally regular in depositing with appropriate authorities undisputed statutory duesincluding provident fund employees' state insurance income-tax Goods and ServiceTax duty of customs Cess and other material statutory dues as applicable and no suchstatutory dues were outstanding as at the last day of the financial year under review fora period of more than six months from the date they became payable.

(b) According to the information and explanations given to us thereare no dues of income-tax Goods and Service Tax duty of customs and cess as applicablewhich have not been deposited on account of any dispute except the following:

Name of the Statute Amount (Rs in Lakhs) Relating to the year Forum where dispute pending
Income Tax Act 1961 117.15 2015-16 Commissioner (Appeals)
Income Tax Act 1961 60.37 2016-17 Commissioner (Appeals)
Tamil Nadu VAT Act 2006 4.68 2016-17 Assistant Commissioner
Tamil Nadu VAT Act 2006 21.61 2015-16 Assistant Commissioner
Rajasthan Tax on Entry of Goods into Local Area Act 1999 10.23 2017-18 Deputy Commissioner (Appeals)

(viii) In our opinion and according to the information and explanationsgiven to us the company has not defaulted in repayment of loans or borrowing to financialinstitution bank Government or dues to debenture holders.

(ix) In our opinion and according to the information and explanationgiven to us the Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year under review. Further term loanshave been applied for the purposes for which those were raised.

(x) According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees have been noticed orreported during the year.

(xi) According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company.

(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act and the details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and onan overall examination of Balance Sheet of Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review and hence reporting requirements under clause3(xiv) are not applicable to the company and not commented upon.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him.

(xvi) In our opinion the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For VMSS & ASSOCIATES
Chartered Accountants
Firm Registration No. 328952E
Mahendra Jain
Place: New Delhi Partner
Date: 16th June 2020 Membership No. 413904

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Ashiana Housing Limited ("the Company") as of 31 March 2020in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For VMSS & ASSOCIATES
Chartered Accountants
Firm Registration No. 328952E
Mahendra Jain
Place: New Delhi Partner
Date: 16th June 2020 Membership No. 413904

.