Page 167 - Interloop Annual Report 2018-2019

INDEPENDENT AUDITOR’S INDEPENDENT AUDITOR’S

REPORT TO THE MEMBERS OF REPORT TO THE MEMBERS OF

INTERLOOP LIMITED INTERLOOP LIMITED

REPORT ON THE AUDIT OF CONSOLIDATED REPORT ON THE AUDIT OF CONSOLIDATED

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

Opinion How the Matter was addressed in
S. No Key Audit Matter(s)
We have audited the annexed consolidated financial statements of Interloop Limited and its subsidiary (the Group), which audit
comprise the consolidated statement of financial position as at June 30, 2019, and the consolidated statement of profit 39 and is therefore a fundamentally different • We reviewed and assessed the impact and disclosures
or loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the approach. Management is required to determine made in the consolidated financial statements with
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a the expected credit loss that may occur over regard to the effect of adoption of IFRS 9.
summary of significant accounting policies. either a 12-month period or the remaining life of
an asset, depending on the categorization of the
In our opinion, the annexed consolidated financial statements give a true and fair view of the consolidated financial position individual asset.
of the Group as at June 30, 2019 and its consolidated financial performance and its consolidated cash flows for the year then
ended in accordance with the approved accounting standards as applicable in Pakistan. In accordance with IFRS 9, the measurement of
ECL reflect a range of unbiased and probability-
Basis for Opinion weighted outcomes, time value of money,
reasonable and supportable information based
on the consideration of historical events,
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our current conditions and forecasts of future
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated economic conditions. The calculation of ECLs in
Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics accordance with IFRS 9 is therefore complex and
Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered involves a number of judgmental assumptions.
Accountants of Pakistan (the Code), and we have fulfilled our other ethical responsibilities in accordance with the Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We considered this as key audit matter due to
the significant amounts involved and significant
Key Audit Matters judgments made by management regarding the
matter.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a Adoption of IFRS 15 “Revenue from contracts with customers”:
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 2. (Refer notes 3.1 and 7.2 to the consolidated financial statements)

Following are the Key Audit Matter(s): The International Financial Reporting Standard We reviewed and understood the requirements of the IFRS
15 “Revenue from Contracts with Customers” 15. Our audit procedures included the following:
(IFRS 15) became applicable for the first time
How the Matter was addressed in for the preparation of the Company’s annual • Considering the appropriateness of revenue recognition
S. No Key Audit Matter(s) consolidated financial statements for the year policy, including recognition and classification criteria
audit ended June 30, 2019. for trade and other discounts and comparing it with the
applicable accounting standards.
1. Adoption of IFRS 9 “Financial instruments”: Under the aforesaid standard the revenue
(Refer notes 3.1 and 7.1 to the consolidated financial statements) from sale of goods is recognized when the • Testing the effectiveness of Company’s controls over the
Company satisfies its performance obligation classification of trade discounts and correct timing of
IFRS 9 ‘Financial Instruments’ is effective for the We reviewed and understood the requirements of the IFRS 9. by transferring the promised goods to customer revenue recognition.
Company for the first time during the current year Our audit procedures included the following: under the contract with customer.
and replaces the financial instruments standard • Reviewing a sample of contractual arrangement entered
IAS 39 ‘Financial Instruments: Recognition and • Considered the management’s process to assess Revenue from sale of goods is measured at into by the Company with its customers and checked
Measurement’. the impact of adoption of IFRS 9 on the Company’s transaction price net of trade discounts. the appropriateness of classification of trade discounts.
consolidated financial statements.
In relation to financial assets, IFRS 9 requires As a result of application of the aforesaid standard • Reviewing the adequacy of disclosure as required under
the recognition of expected credit losses (‘ECL’) • Reviewed the appropriateness of the assumptions used the management has performed extensive applicable financial reporting framework. 2018 - 19
rather than incurred credit losses under IAS
(future and historical), the methodology and policies
evaluation of its contractual arrangement with its .
Interloop Limited applied to assess the ECL in respect of consolidated customers, Annual Report
financial assets of the Company.

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