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INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF INTERLOOP

LIMITED

S. No Key Audit Matter(s) How the Matter was addressed in audit
3. Capital expenditures (Refer notes 7.1, note 7.2 and note 9 to the consolidated financial statements)
The Group is investing significant amounts in its Our audit procedures in relation to capitalization of
operations and there is a number of areas where property, plant and equipment, amongst others included
management’s judgment impacts the carrying value the following:
of property, plant and equipment and its respective
depreciation profile. These include among others the • Understanding the design and implementation
decision to capitalize costs; and review of useful life of of management controls over capitalization and
the assets. performing tests of control over authorization of
capital expenditure and accuracy of its recording in
We focused on this area since the amounts the system.
have a significant impact on the financial position of the
Group and there is significant management judgment • Testing, on sample basis, the costs incurred on
required that has significant impact on the reporting of the projects with supporting documents and contracts.
financial position for the Group. Therefore, considered as
one of the key audit matters. • Assessing the nature of costs incurred for capital
projects through testing, on sample basis, of
amounts recorded and considering whether the
expenditure meets the criteria for capitalization as
per the accounting policy and applicable accounting
standards.

• Checked the reasonableness of management’s
assessment of categories of assets and working
of reclassification in categories of assets including
impact of reclassification on both cost of assets and
accumulated depreciation in each category.

• Inspecting supporting documents for the date of
capitalization when project was ready for its intended
use to assess whether depreciation commenced
and further capitalization of costs ceased from
that date and assessing the useful life assigned by
management including the calculation of related
depreciation.

Information Other than the Consolidated Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the (information included in the Director’s
report, but does not include the consolidated financial statements and auditor’s report thereon).

Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated 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 information; we are required to report that fact. We have nothing to report
in this regard.

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