Our responsibilities under those Standards 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 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 opinion.
3. Emphasis of Matter
We draw your attention to Note 45 of the standalone financial statements, as regards the management's assessment of the financial impact due to restrictions and conditions related to Covid-19 pandemic situation. Our opinion is not modified in respect of this matter.
4. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Report on the Audit of Standalone Ind AS Financial Statements1. Opinion
We have audited the accompanying standalone Financial statements of Dilip Buildcon Limited ("the Company”), which comprise the Balance Sheet as at 31st March 2021, the Statement of Profit and Loss (including Other
Comprehensive Income), the Cash Flow Statement and the Statement oF Changes in Equity For the year then ended and a summary oF significant accounting policies and other explanatory information (hereinafter referred to as 'standalone financial statements').
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 ('the Act') in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended of the state of affairs of the Company as at March 31, 2021, its profits, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
2. Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing, as prescribed under Section 143(10) of the Act.
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Sr.
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Key Audit Matter
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Auditors Response
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Revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognized when the recovery of such consideration is highly probable. The nature of these judgements results in being subject to management override.
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Tested the cut-offs for revenue recognized against such un-invoiced amounts and reviewed the process of such recognition.
Review for change of scope and impact of the same on estimated costs to complete the contracts
Perform analytical procedures for reasonableness of revenues disclosed by type of contracts.
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2
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Assessment of receivables (including unbilled receivables)
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Risk of material misstatement related to estimation of expected credit loss as a result of lack of precision in their measurement. The estimates depend on number of factors such as ageing, credit risks and the ability of the parties to make payment.
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We performed the following audit procedures:
Assessed the company basis for determining the model, internal controls based on which the Company determines the basis of provisioning, compliance with and consistently applying the accounting policies
Verification of subsequent receipts and post balance sheet events if any.
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3
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Physical Inventory verification at year end
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Risk of material misstatement due to not able to physically observe the stock count carried out by the management at year end.
As a result of restrictions and lockdown situation due to Covid-19, management was able to perform year end physical verification of inventory at certain locations, subsequent to the year end.
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We performed the following audit procedures:
We are not able to physically observe the verification of inventory that was carried out by the management. We have relied on the reports shared by the management for the locations where the physical inventory verification was conducted.
Consequently, we have performed alternative procedures (which include the reports of cyclical counts performed by the management during the year, roll forward procedures, checking the documentation with respect to purchase, consumption and sale of inventory if any) to audit the existence of Inventory as per the guidance provided in SA-501 "Audit Evidence Specific Consideration for Selected Items” and have obtained sufficient audit evidence.
We have also performed analytical procedures for reasonableness of the value of stock at year end.
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5. Other Information (Information other the standalone In connection with our audit of the standalone financial financial statements and Auditor's report thereon) statements, our responsibility is to read the other
information identified above when it becomes available The Company's Board of Directors is responsible for the and, in doing so, consider whether the other information other information. The other information comprises the is materially inconsistent with the standalone financial information included in the Management Discussion and statements or our knowledge obtained in the audit, or Analysis, Directors Report, Business Responsibility Report, otherwise appears to be materially misstated.
Corporate Governance and Shareholders Information, but
does not include the standalone financial statements and When we read the other information included in the above our auditor's report thereon. The Annual report is expected reports, if we conclude that there is material misstatement to be made available to us after the date of this auditor's therein, we are required to communicate the matter to report. those charged with governance and determine the actions
under the applicable laws and regulations.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
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Sr.
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Key Audit Matter
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Auditors Response
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1
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Revenue recognition and accounting for Construction contracts
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Significant accounting judgements including estimation of costs to complete, determining the stage of completion and the timing of revenue recognition.
For majority of its contracts, the Company recognizes revenue and profit on the stage of completion based on the proportion of contract costs incurred for the work performed to the balance sheet date, relative to the estimated costs on the contract at completion. The recognition of revenue and profit / loss therefore are based on estimates in relation to the estimated total costs of each contract.
At each reporting date, revenue is accrued for costs incurred against work performed in accordance with the contract for which invoice may not have been raised. Identification that such accrual will result into work that would be billable and recoverable when the work has not been acknowledged by the customer involves significant amount of judgement.
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We performed the following audit procedures:
Testing the design and implementation of internal controls including control over process for determining estimates used as evaluating whether they are operating effectively.
Testing related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.
Testing different sample of contracts for identification of performance obligations.
Reviewed the Company's process of collecting information supporting the basis for accrual of costs against work performed upto the cut off dates. Reviewed the design and operating effectiveness of management's key controls in collecting such data with respect of costs.
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As part of an audit in accordance with Standards on auditing, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
i) Identify and assess the risks of material misstatement of the standalone Ind AS 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.
ii) Obtain an understanding of internal financial controls 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.
iii) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
iv) 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 ability of the Company 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.
v) 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.
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.
6. Responsibility 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 standalone 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 accounting principles generally accepted in India, including the Ind AS accounting Standards specified under section 133 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 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 statement 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 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.
The Board of Directors are also responsible for overseeing the Company's financial reporting process.
7. 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 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 standalone financial statements.
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 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.
8. Report on Other Legal and Regulatory Requirements
i) As required by the Companies (Auditor's report) Order,
2016 ("the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A” a statement on the matters
specified in paragraphs 3 and 4 of the Order.
ii) As required by section 143 (3) of the Act, based on our audit 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 purpose 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, Statement of Profit and Loss (including other comprehensive income), the
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 standalone financial
statements comply with the Indian Accounting
Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015, as amended.
e) On the basis of written representations received from the directors of the Company as on March 31, 2021, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021, 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” to this report.
g) With respect to the other matters to be included in the Auditors 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 / provided 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, 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 standalone financial statements to the extent
determinable/ascertainable. - Refer Note 25 to the standalone financial statements.
ii. The Company does not have any long-term contracts including derivative contracts for
which there are any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2021.
For Mukund M. Chitale & Co . For MSG & Associates.
Chartered Accountants Chartered Accountants
Firm Registration No. 106655W Firm Registration No. 010254C
(S.M. Chitale) (Geeta Rajani)
Partner Partner
M. No. 111383 M. No. 076889
UDIN : 21111383AAAAIA9694 UDIN : 21076889AAAACC1535
Place: Mumbai Place: Bhopal
Date: 28.05.2021 Date: 28.05.2021
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