Page 177 - Kolte Patil AR 2019-20
P. 177

Sr. No.            Key Audit Matter                              Auditors’ Response
               1   Revenue recognition under Ind AS 115 – Revenue  Principal Audit Procedures
                   from Contracts with Customers – Revenue recognition   Our  audit  approach  consisted  testing  of  the  design  and  operating
                   in terms of appropriate accounting period and   effectiveness of the internal controls and substantive testing as follows:
                   completeness of revenue in respect of possessions
                   given to customers.                     •   Assessed the consistency of the accounting principles applied by
                                                               the Company to measure its revenue from sales of properties / flats
                   The Company recognises revenue primarily from the   with the applicable regulatory financial reporting framework.
                   sale of properties/flats (residential and commercial)
                   with revenue being recognised on possession given to  •  Evaluated the design, implementation and operational effectiveness
                   customers. Revenue recognition is a significant audit   of the relevant controls implemented by the Company to ensure
                   risk within the Company. There is a risk that Revenue   recognition of revenue in appropriate period and completeness of
                   may be mis-stated on account of recognition in wrong   the revenue recognition in the books of accounts. We carried out a
                   accounting period and completeness of the revenue.  combination of procedures involving enquiry and observation, re-
                                                               performance and inspection of evidence in respect of operation of
                   Refer Notes 2K and 27 to the Standalone Financial   these controls.
                                                           •   Tested completeness of total number of units sold and total amount
                                                               of revenue recognised by reconciling the possession report with the
                                                               books of accounts.
                                                           •   Selected samples of agreements with customers and for the samples
                                                               selected, performed the following procedures:
                                                               -  Read, analysed the Sale Agreement for the terms of the contract
                                                                  and verified the Agreement Value, Date of Agreement, Carpet
                                                                  Area and other relevant details.
                                                               -  Verified the possession declaration date is before year end date
                                                                  to ensure revenue is recorded in the appropriate period.
                                                           Verified the possession and key handover letter duly signed by both the
                                                           parties. Assessed the consistency of the accounting principles applied by
                                                           the Company to measure its revenue from sales of properties / flats with
                                                           the applicable regulatory financial reporting framework.

            INFORMATION OTHER THAN THE FINANCIAL               in doing so, place reliance on the work of the other auditors and
            STATEMENTS AND AUDITOR’S REPORT THEREON            consider whether the other information is materially inconsistent
            The  Parent’s  Board of  Directors is  responsible  for  the  other   with the consolidated financial statements or our knowledge
            information.  The  other  information  comprises  the  information   obtained during the course of our audit or otherwise appears to
            included in the Management Report and Chairman’s Statement,   be materially misstated. Other information so far as it relates to the
            but does not include the consolidated financial statements and our   subsidiaries, is traced from their financial statements audited by the
            auditor’s report thereon. The Management Report and Chairman’s   other auditors.
            Statement is expected to be made available to us after the date of   •    When we read the Management Report and Chairman’s
            this auditors’ report.                                 Statement, if we conclude that there is a material misstatement

            •    Our opinion on the consolidated financial statements does not   therein, we are required to communicate the matter to those
               cover the other information and we do not express any form of   charged with governance as required under SA 720  ‘The
               assurance conclusion thereon.                       Auditor’s responsibilities Relating to Other Information’.
            In connection with our audit of the consolidated financial   MANAGEMENT’S RESPONSIBILITY FOR THE
            statements, our responsibility is to read the other information,   CONSOLIDATED FINANCIAL STATEMENTS
            compare with the financial statements of the subsidiaries audited   The Parent’s Board of Directors is responsible for the matters stated
            by the other auditors, to the extent it relates to these entities and,
                                                               in section 134(5) of the Act with respect to the preparation of

                                                                                          Annual Report 2019-20 | 175
   172   173   174   175   176   177   178   179   180   181   182