Opinion
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditor's Responsibilities for the Audit of the 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 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.
1. We have audited the accompanying financial statements of Tata Teleservices (Maharashtra) Limited ("the Company"), which comprise the Balance Sheet as at March 31,2023, and the Statement of Profit and Loss (including Other Comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
2. I n our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, of the state of affairs of the Company as at March 31, 2023, and total comprehensive loss (comprising of loss and other comprehensive income), changes in equity and its cash flows for the year then ended.
Key audit matters
4. Key audit matters are those matters that, in our professional judgement, 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 whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
|
Key audit matter
|
How our audit addressed the key audit matter
|
|
1. Accuracy of revenue recorded for telecommunication services given the complexity of the related IT systems
(Refer notes 2.3, 2.5 and 26 to the financial statements) The Company's revenue from telecommunication services is recorded through a complex automated information technology (IT) structure where the data is processed through multiple systems, which requires periodic reconciliation controls to ensure completeness and accuracy.
There is an inherent risk around the accuracy of revenue recorded given the complexity of billing, rating and other relevant support systems and the impact of changing pricing models to revenue recognition (tariff structures, discounts etc). Accordingly, we have determined this as a key audit matter.
|
Our audit procedures included controls testing and substantive procedures covering, in particular:
• Understanding and evaluating the relevant IT systems and design of key controls including procedures on testing of IT general controls by involving auditor's IT specialists.
• Testing operating effectiveness of key controls over:
a) Capturing and recording of revenue transactions;
b) Authorisation of rate changes and the input of this information to the billing systems;
c) Accuracy of calculation of amounts billed to customers;
• Testing the end-to-end reconciliation from rating and billing systems to the general ledger. We also performed procedures to test the computation of unearned income;
• Performing tests on the accuracy of customer bill generation on a sample basis;
Based on the procedures performed above, we have not identified any significant exceptions in the accuracy of telecommunication services revenue recognised during the year.
|
|
Key audit matter
|
How our audit addressed the key audit matter
|
|
2. Assessment of contingent liabilities and provisions
|
Our audit procedures included the following:
|
|
for litigations
|
• Testing design and operating effectiveness of key controls surrounding
|
|
(Refer note 2.15, 24, 33, 35 and 44 on Companies
|
litigation, regulatory and tax procedures and assessment of probable
|
|
accounting policies with regard to provision and
|
outflow;
|
|
contingent liabilities.)
|
• Enquired with the relevant company personnel including the
|
|
The Company has a significant number of litigations
|
Company's tax and regulatory department heads to understand
|
|
related to regulatory, direct tax and indirect tax matters
|
significant matters under litigation;
|
|
which are under dispute with various authorities
|
• Obtaining and testing evidences to support the management's
|
|
as more fully described in Note 34 to the financial
|
assessment and rationale for provisions made or disclosures of
|
|
statements.
|
contingent liabilities including correspondence with external legal/tax
|
|
The Company exercises significant judgement to
|
consultants;
|
|
determine the possible outcome of these disputes and
|
• Evaluating independence, objectivity and competence of the
|
|
the necessity of recognising a provision against the same. The management's assessment is supported by
|
management's external tax/legal consultants;
|
|
advice obtained from external legal/tax consultants. We considered this as a Key Audit Matter as the
|
• Reading external legal opinions obtained by management, where available;
|
|
eventual outcome of litigations is uncertain and the
|
• Reviewing the minutes of Board of Directors' meetings in respect of
|
|
positions taken by the Management are based on
|
discussions relating to litigations/legal matters;
|
|
the application of significant judgement and involves
|
• Considering external information sources such as media reports to
|
|
estimation. Any unexpected adverse outcomes
|
identify potential legal actions, wherever applicable;
|
|
could significantly impact the Company's financial
|
• Obtaining confirmations, where appropriate, of relevant external
|
|
performance and financial position.
|
legal consultants of the Company and enquiring with them on certain material litigation, as required;
• Testing that the adjustments arising on account of reassessment in estimates during the year are either due to changes that occurred in the circumstances on which estimate was based or as a result of more information or more experience gained during the current year;
• Assessing management's conclusions through understanding legal precedents in similar cases;
• For direct and indirect tax litigations, involving auditors' tax experts to understand the current status of tax litigations and evaluating changes in the disputes by reading external advice received by the Company;
• Assessing the appropriateness of the disclosures made in financial statements.
Based on the above procedures performed, we have not identified any
significant exceptions relating to disclosure of contingent liabilities and
accounting for provisions for litigations.
|
|
3. Assessment of Going Concern as a basis of
|
Our audit procedures included the following:
|
|
accounting:
|
• Obtaining management assessment of the appropriateness of Going
|
|
(Refer note 1.3 to the financial statements)
|
Concern basis of accounting.
|
|
The Company has significant accumulated losses and
|
• Reading the minutes of Board of Directors' meetings for future business
|
|
has incurred losses during the current and earlier
|
plans and their assessment on the Company's ability to meet its
|
|
years. The Company's net worth is fully eroded and
|
financial obligations in the foreseeable future.
|
|
the current liabilities exceed its current assets as
|
• Obtained cash flow forecast prepared by the Company for 12 months
|
|
at March 31, 2023. These conditions raise a doubt
|
from the balance sheet date and evaluated appropriateness of the
|
|
regarding the Company's ability to continue as a going
|
assumptions underlying the same.
|
| |
• Assessed the actions taken by the management against the plans
|
|
However, the financial statements have been prepared on a going concern basis in view of the financial
|
submitted during the previous year's going concern assessment.
|
|
support from the ultimate holding company and the
|
• Verifying the support letter obtained by the Company from its ultimate
|
|
management's plan to generate cash flows through
|
holding company indicating that it will take necessary actions to
|
|
operations which would enable the Company to meet
|
organise for any shortfall in liquidity in Company that may arise to meet
|
|
its financial obligations as and when they fall due. We considered this to be a key audit matter because
|
its financial obligations and timely repayment of debt during the period of 12 months from the balance sheet date.
|
|
management's assessment is largely dependent on
|
• Evaluation of the financial ability of the ultimate holding company to
|
|
the support letter obtained from its ultimate holding
|
support the Company by reading its latest audited financial statements.
|
|
Company.
|
• Verifying that the ultimate holding Company has supported the Company in the past when the need arose.
• Assessing the appropriateness of the disclosures made in the financial statements.
Based on the above procedures, the management assessment of going concern basis of accounting is appropriate.
|
Other Information
5. The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis Report, Directors Report, Corporate Governance Report, Business Responsibility and Sustainability Report included in Annual report but does not include the financial statements and our auditor's report thereon.
Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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 other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the financial statements
6. 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 financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act. 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 judgements 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 statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
7. In preparing the financial statements, management 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the financial statements
8. Our objectives are to obtain reasonable assurance about whether the 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 SAs 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 financial statements.
9. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the 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.
• Obtain an understanding of internal control 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 with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• 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 Company's ability 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 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.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
10. 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.
11. 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.
12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's 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.
Report on other legal and regulatory requirements
13. As required by the Companies (Auditor's Report) Order, 2020 ("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 B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. As required by Section 143(3) of the Act, 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 purposes 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, the 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on April 1, 2023, April 3, 2023, April 7, 2023, April 8, 2023 and April 12, 2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023, 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".
(g) 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 (as amended), 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 financial statements - Refer Note 33, 34 and 35 to the financial statements;
ii. The Company has made provision as at March 31, 2023, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note and 45 to the financial statements.
iii. There were no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31,2023.
iv. (a) The management has represented that,
to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 50(iv)(1) to the financial statements);
(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries (Refer Note 50(iv)(2) to the financial statements); and
(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The Company has not declared or paid any dividend during the year.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for
books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.
15. The Company has not paid/provided for managerial remuneration during the year ended March 31, 2023. Accordingly, reporting under Section 197(16) of the Act is not applicable to the Company.
|