Page 141 - InterloopAnnualReport2020

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF INTERLOOP

LIMITED

S. No Key Audit Matter(s) How the Matter was addressed in audit
• Reviewed and checked the period considered for
depreciating right of use assets.
• Tested calculation of present value of liability and
right of use assets and its related finance cost and
depreciation charge for the period.

• We further tested the adjustments made in the
unconsolidated financial statements from initial
application of IFRS 16 as a part of the transition
process based on the differences identified.
We also assessed the adequacy and appropriateness
of unconsolidated financial statements presentation and
disclosures in accordance with the applicable financial
S. No Key Audit Matter(s) How the Matter was addressed in audit
2. Borrowings: (Refer notes 25 and 30 to the unconsolidated financial statements)
The Company has significant amounts of borrowings Our audit procedures included:
from Banks and other financial institutions amounting
to Rs. 21.577 billion, being 77% of total liabilities, as at • Review of loan agreements and facility letters to
reporting date. ascertain the terms and conditions of repayment,
rates of markup used and disclosed by management
Given the significant level of borrowings, finance for finance costs and to ensure that the borrowings
costs, significant gearing, the disclosure given by the have been approved at appropriate level.
management in unconsolidated financial statements and
compliance with • Verification of disbursement of loans and utilization
various loan covenants, this is considered to be a key on sample basis. Review of documents for charge
audit matter. registration with regulator- SECP.

• Verification of repayments made by the Company
during the year on sample basis to confirm that
repayments are being made on time and no default
has been made.
• Understating and assessing procedures designed
by management to comply with the debt covenants
and performing covenant tests on sample basis.

• Obtaining confirmation from Banks of the Company
to confirm balances, terms & conditions stated in
the facility offer letter and compliance thereof.

• Performing analytical procedures, recalculations
and other related procedures for verification of
finance costs.

• Ensuring that the outstanding liabilities have
been properly classified and related securities
and other terms are adequately disclosed in the
unconsolidated financial statements.

139