We have audited the accompanying standalone financial
statements of Arihant Superstructures Limited ("the Company"),
which comprise the Balance sheet as at 31 March, 2025, the
Statement of Profit and Loss, including the statement of Other
Comprehensive Income, the Cash Flow Statement and the
Statement of Changes in Equity for the year then ended, and notes
to the standalone 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 standalone financial
statements give the information required by the Companies Act,
2013, as amended ("the Act") in the manner so required and
give a true and fair view in conformity with the Indian Accounting
Standards prescribed under section 1 33 of the Act read with
Companies (Indian Accounting Standards) Rules, 2015 as
amended and other accounting principles generally accepted in
India, of the state of affairs of the Company as at 31 March,
2025, its profit 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 of the standalone financial statements in
accordance with the Standards on Auditing (SAs), as 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 Standalone 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 Act 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 audit opinion on the standalone
financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
standalone financial statements for the financial year ended 31
March, 2025. 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.
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Key Audit Matter
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How the matter was addressed in our audit
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Revenue recognition :
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The Company follows Ind AS 115 "Revenue from contracts with
customers" for recognition of revenue from sale of commercial and
residential real estate. Depending on the terms of the customer
contract and applicable regulatory framework, revenue is
recognised either Over time based on the percentage of completion
method (when performance obligations are satisfied over time)
or at a point in time, typically upon handover of possession to
the customer.
This process involves significant judgment and estimation,
particularly in:
Identifying performance obligations under the contract,
Determining whether performance obligations are satisfied over
time or at a point in time and assessing the transfer of control of
the underlying asset to the customer,
Estimating the stage of completion for ongoing projects,
including estimation of costs incurred and costs to complete, and
Ensuring compliance with contractual and regulatory conditions
applicable to each project.
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Our audit procedures to assess revenue recognition included the
following:
- Obtained an understanding of the Company's revenue
recognition policies and evaluated their compliance with Ind
AS 115, including identification of performance obligations
and timing of revenue recognition (over time or at a point in
time).
- Evaluated the design and implementation, and tested the
operating effectiveness, of key internal controls over: Contract
approval and review, Project cost estimation, Milestone billing
and collection processes, Issuance of possession letters /
Occupancy Certificates and Recording of construction and
land costs attributable to projects.
- Reviewed a sample of customer contracts to assess
management's identification of performance obligations,
allocation of transaction price, and consistency in revenue
recognition method.
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Key Audit Matter
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How the matter was addressed in our audit
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Given the financial significance of revenue, the complexity of
underlying assumptions and estimates, and the geographic spread
of projects, we have considered revenue recognition as a key
audit matter.
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- For revenue recognised over time: Verified actual costs incurred
and assessed the reasonableness of management's estimated
total project costs. Recalculated the percentage of completion
and revenue recognised for selected projects, Compared
historical estimates with actual costs to evaluate the reliability
of the estimation process.
- For revenue recognised at a point in time: Inspected
documentation supporting the transfer of control, including
possession letters and Occupancy Certificates, Reviewed
instances where revenue was recognised before obtaining
possession documentation, and evaluated the legal enforce¬
ability of the right to payment.
- Performed site visits for selected projects to assess physical
progress and corroborate the reported status of completion.
- Verified costs capitalised as construction and land costs to
ensure they were directly attributable to respective projects and
appropriately recorded.
- Assessed the adequacy of disclosures made in the financial
statements regarding revenue recognition policies, significant
judgments and estimates, and performance obligations.
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Inventory Valuation :
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The Company's inventory primarily comprises completed
and ongoing real estate projects, unlaunched projects, and
development rights. These inventories are measured at the lower
of cost and net realizable value (NRV), in accordance with the
applicable financial reporting framework.
The assessment of NRV involves significant management judgment
and estimation, particularly in relation to prevailing market
conditions, estimated future selling prices, expected costs to
complete the projects, selling costs, and the anticipated timeline
for project commencement and completion. Changes in these
underlying assumptions could have a material impact on the
valuation of inventories.
Due to the materiality of the inventory balance and the high
degree of estimation uncertainty involved in assessing its NRV, we
considered this area to be a key audit matter.
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Our audit procedure/testing includes among others:
Evaluating the management's valuation methodology and
assessing the key estimates, data input and assumption adopted
in the valuation which includes comparing expected future
average selling price with available market data such as the
recently transacted price for similar properties located in the
nearby vicinity of each property development projects and sales
budget plan maintained by the company.
Verifying the NRV assessment and comparing the estimated
construction costs to complete each development with the
company's updated budgets.
Performing sensitivity analysis on key assumptions (such as selling
price and cost to complete) to assess the impact of possible
changes on the NRV.
We have tested the NRV of the inventories to carry value in the
books on a sample basis.
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Other Information
The Company's Management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the Company's annual
report, but does not include the standalone financial statements
and our auditors' report thereon.
Our opinion on the standalone 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 identified above
when it becomes available and, in doing so, consider whether
such 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 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 standalone financial statements that give a true and fair
view of the state of affairs (financial position), profit (financial
performance including Other Comprehensive Income), cash flows
and changes in equity of the Company in accordance with the
accounting principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under Section
1 33 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended. 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
accounting policies; making judgments and estimates that are
reasonable and prudent; and the 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 standalone financial statements that give a true
and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the standalone financial statements, the Company's
Management and Board of Directors are 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.
The Board of Directors are also responsible for overseeing the
company's financial reporting process.
Auditor's Responsibilities for the Audit of the
Standalone 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 auditors' 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
standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
Ý Identify and assess the risks of material misstatement of the
standalone 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.
Ý 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 Act, we
are also responsible for expressing our opinion on whether
the Company has adequate internal financial controls with
reference to standalone financial statements in place and the
operating effectiveness of such controls.
Ý Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
Ý 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 standalone 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.
Ý Evaluate the overall presentation, structure and content of the
standalone financial statements, including the disclosures,
and whether the standalone 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 Standalone 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 Standalone
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
for the financial year ended March 31, 2025 and are therefore
the key audit matters. We describe these matters in our auditors'
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 the Companies (Auditors' Report) Order,
2020 issued by the Central Government of 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 said order, to the
extent applicable.
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 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;
(c) The Balance Sheet, the Statement of Profit and Loss
including the Statement of Other Comprehensive Income,
the Cash Flow Statement and Statement of Changes in
Equity 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 1 33 of the Act, read with
Companies (Indian Accounting Standards) Rules, 2015,
as amended;
(e) On the basis of the written representations received
from the directors as on March 31, 2025, taken on
record by the Board of Directors, none of the directors
are disqualified as on March 31 , 2025, 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 with reference to these standalone financial
statements of the Company and the operating
effectiveness of such controls, refer to our separate
Report in "Annexure B" to this report;
(g) In our opinion, the managerial remuneration for the
year ended March 31, 2025 has been paid/provided
by the company to its directors in accordance with
the provisions of section 197 read with Schedule V to
the Act;
(h) With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 1 1 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 standalone
financial statements.
ii. The Company did not have any long-term contracts
including derivative contracts for which there can
be any material foreseeable losses.
iii. There were no amounts which were required to
be transferred to Investor Education and Protection
Fund by the Company
iv. (i) 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 sources or kind of funds) by the
company to or in any other person/entity,
including foreign entities ('Intermediaries'),
with the understanding, whether recorded
in writing or otherwise, that the Intermediary
has, 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;
(ii) The Management has represented that, to the
best of its knowledge and belief, no funds
have been received by the Company from any
person/entity, including foreign entities, with
the understanding, whether recorded in writing
or otherwise, as on the date of this audit report,
that the company has 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; and
(iii) Based on our audit procedures which we
have considered reasonable and appropriate
in the circumstances and according to the
information and explanations provided to us
by the Management in this regard, nothing
has come to the notice that has caused us
to believe that the representations made by
the Management under sub-clause (i) and (ii)
contain any material misstatement.
v. (i) The final dividend proposed in the previous
year, declared and paid by the Company
during the year is in accordance with section
123 of the Act, as applicable.
(ii) The Board of Directors of the Company have
proposed a dividend for the year which is
'subject to the approval of the members at the
ensuing Annual General Meeting. The amount
of dividend proposed is in accordance with
section 123 of the Act, as applicable.
vi. Based on our examination, which included test
checks, the Company has used accounting
software for maintaining its books of account for the
financial year ended March 31, 2025 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 the audit trail feature
being tampered with and the audit trail has been
preserved by the Company as per the statutory
requirements for records retention.
For Ummed Jain & Co.
Chartered Accountants
FRN: 119250W
CA U.M. Jain
Partner
Place: Navi Mumbai Membership Number: 070863
Date: 24th May, 2025 UDIN: 25070863BMLFQU5507
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