Tata Teleservices (Maharashtra) Limited
Report on the Audit of the Financial Statements
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, 2024, 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 material accounting policy information and other explanatory information.
2. In 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 31,2024, and total comprehensive loss (comprising of loss and other comprehensive income), changes in equity and its cash flows for the year then ended.
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.
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
|
Our audit procedures included controls testing and substantive
|
|
services given the complexity of the related IT systems
|
procedures covering, in particular:
|
|
(Refer notes 2.2(a), 2.2(b) and 26 to the financial statements.)
|
• Understanding and evaluating the relevant IT systems and
|
|
The Company's revenue from telecommunication
|
design of key controls including procedures on testing of IT
|
|
services is recorded through a complex automated
|
general controls by involving auditor's IT specialists.
|
|
information technology (IT) structure where the data
|
• Testing operating effectiveness of key controls over:
|
|
is processed through multiple systems, which requires
|
a) Capturing and recording of revenue transactions;
|
|
periodic reconciliation controls to ensure accuracy.
|
b) Authorization of rate changes and the input of this
|
|
There is an inherent risk around the accuracy of revenue
|
information to the billing systems;
|
|
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.
|
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 above procedures performed, we have not identified any significant exceptions in the accuracy of telecommunication services revenue recognized 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
|
|
( Refer notes 2.3(iv), 2.4(j), 9, 24, 33, 34, 35 and 44 on
|
surrounding litigation, regulatory and tax procedures and
|
|
Companies accounting policies with regard to provision
|
assessment of probable outflow;
|
|
and contingent liabilities.)
|
• Enquired with the relevant company personnel including
|
|
The Company has a significant number of litigations
|
the Company's tax and regulatory department heads to
|
|
related to regulatory, direct tax and indirect tax matters
|
understand significant matters under litigation;
|
|
which are under dispute with various authorities as more
|
• Obtaining and testing evidences to support the management's
|
|
fully described in Note 34 to the financial statements.
|
assessment and rationale for provisions made or disclosures
|
|
The Company exercises significant judgment to determine
|
of contingent liabilities including correspondence with
|
|
the possible outcome of these disputes and the necessity
|
external legal / tax consultants;
|
|
of recognising a provision or disclosing the same as a
|
• Evaluating independence, objectivity and competence of the
|
|
contingent liability against the same. The management's assessment is supported by advice obtained from external
|
management's external tax/ legal consultants;
• Reading external legal opinions obtained by management,
|
|
legal / tax consultants.
We considered this as a key audit matter as the eventual
|
where available;
• Reviewing the minutes of Board of Directors' meetings in
|
|
outcome of litigations is uncertain and the positions taken by the Management are based on the application
|
respect of discussions relating to litigations / legal matters;
|
|
of significant judgement and involves estimation. Any
|
• Considering external information sources such as media
|
|
unexpected adverse outcomes could significantly
|
reports to identify potential legal actions, wherever applicable;
|
|
impact the Company's financial performance and
|
• Obtaining confirmations, where appropriate, of relevant
|
|
financial position.
|
external 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
|
|
(Refer notes 1.3 and 2.3(vii) to the financial statements.)
|
of going concern basis of accounting.
|
|
The Company has significant accumulated losses and
|
• Reading the minutes of Board of Director meetings for future
|
|
has incurred losses during the current and earlier years.
|
business plans and their assessment on the Company's ability
|
|
The Company's net worth is fully eroded and the current
|
to meet its financial obligations in the foreseeable future.
|
|
liabilities exceed its current assets as at March 31, 2024.
|
• Obtained cash flow forecast prepared by the Company
|
|
These conditions raise a doubt regarding the Company's
|
for 12 months from the balance sheet date and evaluated
|
|
ability to continue as a going concern.
|
appropriateness of the assumptions underlying the same.
|
|
Key audit matter
|
How our audit addressed the key audit matter
|
|
However, the financial statements have been prepared
|
• Assessed the actions taken by the management against the
|
|
on a going concern basis in view of the financial
|
plans submitted during the previous year's going concern
|
|
support from the ultimate holding company and the
|
assessment.
|
|
management's plan to generate cash flows through
|
• Verifying the support letter obtained by the Company from
|
|
operations which would enable the Company to meet
|
its ultimate holding company indicating that it will take
|
|
its financial obligations as and when they fall due.
|
necessary actions to organize for any shortfall in liquidity in
|
|
We considered this to be a key audit matter because
|
Company that may arise to meet its financial obligations and
|
|
management's assessment is largely dependent on
|
timely repayment of debt during the period of 12 months
|
|
the support letter obtained from its ultimate holding
|
from the balance sheet date.
|
|
Company.
|
• Evaluation of the financial ability of the ultimate holding company to support the Company by reading its latest audited financial statements.
• 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 performed, 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 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 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 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) I n 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 except for the matters stated in paragraph 14(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).
(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 March 31, 2024, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2024, 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 maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 14(b) above on reporting under Section 143(3)(b) and paragraph 14(h)(vi) below on reporting under Rule 11(g) of the Rules.
(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 financial statements - Refer Note 9, 24, 33, 34, 35 and 44 to the financial statements;
ii. The Company has made provision as at March 31, 2024, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts - Refer Note 24 and 45 to the financial statements. The Company did not have any derivative contracts as at March 31, 2024.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31,2024.
iv. (a) The management has represented that,
to the best of its knowledge and belief, as disclosed in Note 50(v)(1) to the financial statements, 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;
(b) The management has represented that, to the best of its knowledge and belief, as disclosed in Note 50(v)(2) to the financial statements, 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; 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. Based on our examination, which included test checks, the Company uses a accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and that has operated throughout the year for all transactions, except that the audit trail is not maintained for changes made by certain users with specific access and for direct data changes. Further, during the course of performing our procedures, we did not notice any instance of the audit trail feature being tampered with in the accounting software. However, with respect to accounting software used for (i) payroll records, the service organisation auditor's report is available only for the period April 1 to December 31, 2023; and for (ii) revenue and receivable records, the audit trail feature was not enabled at the database level and accordingly the question of whether the audit trail operated throughout the year for all transactions or whether there was any instance of the audit trail feature been tampered with, does not arise.
15. The Company has not paid/ provided for managerial remuneration during the year ended March 31, 2024. Accordingly, reporting under section 197(16) of the Act is not applicable to the company.
|