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Mindteck (India) Ltd.

BSE: 517344 Sector: IT
NSE: MINDTECK ISIN Code: INE110B01017
BSE 12:26 | 16 May 137.55 4.65
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136.80

HIGH

141.25

LOW

134.50

NSE 12:14 | 16 May 140.20 6.65
(4.98%)
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135.15

HIGH

141.45

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OPEN 136.80
PREVIOUS CLOSE 132.90
VOLUME 1135
52-Week high 294.60
52-Week low 49.00
P/E 46.31
Mkt Cap.(Rs cr) 354
Buy Price 138.35
Buy Qty 4.00
Sell Price 139.75
Sell Qty 4.00
OPEN 136.80
CLOSE 132.90
VOLUME 1135
52-Week high 294.60
52-Week low 49.00
P/E 46.31
Mkt Cap.(Rs cr) 354
Buy Price 138.35
Buy Qty 4.00
Sell Price 139.75
Sell Qty 4.00

Mindteck (India) Ltd. (MINDTECK) - Auditors Report

Company auditors report

To the Members of Mindteck (India) Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Mindteck (India)Limited ("the Company") which comprise the Balance Sheet as at March 31 2021the Statement of Profit and Loss including the statement of Other ComprehensiveIncome/(Loss) the Cash Flow Statement and the Statement of Changes in Equity for the yearthen ended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 its profitincluding other comprehensive income/(loss) its cash flows and the changes in equity forthe year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the 'Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.

Key audit matters How our audit addressed the key audit matter
Impairment of Investments in Subsidiaries (as described in Note 6 of the standalone financial statements)
As at March 31 2021 the carrying value of investment in subsidiaries in the standalone balance sheet amounts to Rs. 6724 lakhs net of impairment. Our audit procedures included the following amongst others:
The management assesses annually the existence of impairment indicators in respect of its investment in subsidiaries and such investments are subject to impairment test. • We understood the Company's process for identification of indicators for impairment and evaluated the Company's internal controls over its impairment assessment of investment in subsidiaries. We understood the key assumptions applied by the management such as revenue growth operating margins discount rates and terminal growth rates in determining impairment.
During the current year an impairment assessment was carried out by the Company by comparing the carrying value of these investments to their recoverable amount to determine whether an impairment was required to be recognized. • We have obtained the valuation assessment and report from the management's expert and assessed the key valuation assumptions and methodologies used by the management's expert in their valuation reports.
Forthe above impairment testing basis valuation conducted by an external valuation specialist ('management's expert') value in use has been determined by forecasting and discounting future cash flows which has been reviewed and approved by Audit Committee / Board of Directors of the Company. Furthermore the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. Further the determination of the recoverable amount of the investments involved significant judgment due to inherent uncertainty in the assumptions supporting the recoverable amount of these investments. • We have evaluated the competences capabilities and objectivity of the management's expert and obtained an understanding of the scope of work and the terms of engagement.
Accordingly the impairment of investments was determined to be a key audit matter in our audit of the standalone financial statements. • We also assessed the recoverable value by performing sensitivity testing of key assumptions used.
• We discussed potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable.
• We tested the arithmetical accuracy of the model.
• We also assessed the disclosures in the standalone financial statements for compliance with disclosure requirements under the accounting standards.
Contingencies in relation to tax litigations (as described in Note 34 of the standalone financial statements)
The Company is involved in various legal proceedings relating to taxes. As of March 31 2021 there is Rs. 463 lakhs disclosed as contingent liability in the standalone financial statements. In relation to these proceedings management assesses the impact of the eventual outcome on its standalone financial statements. Our audit procedures included the following amongst others:
The Company discloses contingencies for income tax pending litigations when it is probable that the taxation authority will accept the uncertain tax treatment in accordance with the requirements of Appendix C to Ind AS 12 on 'Uncertainty over Income tax treatment'. • We obtained an understanding and assessed the internal control environment relating to the identification recognition and measurement of provisions for disputes and disclosures of contingent liabilities in relation to taxes.
Since the aforesaid estimates require significant judgments by management based on the available information including that obtained from its tax advisors we identified it as a key audit matter in our audit of the standalone financial statements. • We obtained details of completed tax assessments demands issued by tax authorities orders/notices received in this regard from the management.
• We held discussions with management to understand their assessment of the quantification and likelihood of significant exposures and the provision required in accordance with the requirements of Appendix C to Ind AS 12 which is supported by assessment reports from management's expert.
• We obtained confirmation from management's expert on ongoing litigations along with risk assessment. We have evaluated the competences capabilities and objectivity of the management's expert and obtained an understanding of the scope of work and the terms of engagement.
• We involved our tax specialists to obtai n and evaluate management's assessment of the likely outcome and potential exposures arising from all significant contingencies and considered the requirements of any provisions and related disclosures.
• We also assessed the disclosures in the standalone financial statements for compliance with disclosure requirements under the accounting standards.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report and Corporate Governance Report butdoes not include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether such other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income/(loss) cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)0)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding iindependence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. 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 bestof 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 theCompany so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss including the Statement of OtherComprehensive Income/(Loss) the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

e. On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

f. With respect to the adequacy of the internal financial controls with reference tothese standalone financial statements and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2" to this report;

g. In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 34 to the standalonefinancial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses on long-term contracts including derivativecontracts - Refer Note 34 to the standalone financial statements; and

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

Annexure 1 to the Independent Auditor's Report of even date on the Standalone FinancialStatements of Mindteck (India) Limited Statement on the matters specified in paragraph 3and 4 of the Companies (Auditor's Report) Order 2016 ("the Order")

(i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

b. Property plant and equipment have been physically verified by the management duringthe year and no material discrepancies were identified on such verification.

c. According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment/investmentproperty are held in the name of the Company.

(ii) The Company's business does not involve inventories and accordingly therequirements under paragraph 3(ii) of the Order are not applicable to the Company.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 ("the Act"). Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given by themanagement the Company has complied with the provisions of section 185 and 186 of the Actin respect of grant of loans to directors including entities in which they are interestedand in respect of loans and advances given making investments and providing guaranteesand securities as applicable.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under Section 148(1) of the Act for the servicesof the Company.

(vii) a. Undisputed statutory dues including provident fund employees' stateinsurance income-tax duty of custom goods and services tax cess and other statutorydues have generally been regularly deposited with the appropriate authorities though therehas been slight delays in remittance of provident fund professional tax and goods andservices tax in few cases.

b. According to the information and explanations given by the management no undisputedamounts payable in respect of provident fund employees' state insurance income-tax dutyof customs goods and services tax cess and other statutory dues were outstanding at theyear end for a period of more than six months from the date they became payable.

c. According to the information and explanations given to us there are no dues ofincome-tax sales-tax service tax duty of customs duty of excise value added taxgoods and services tax and cess which have not been deposited on account of any disputeexcept the following:

Name of the Statute Nature of the Dues Disputed amount (Rs. in Lakhs) Amount paid/refund adjusted under protest (Rs. in Lakhs) Period to which the amount relates (Assessment Year) Forum where dispute is pending
82 82 2006-07 Commissioner of Income Tax (Appeals)/ Deputy Commissioner of Income Tax
Income Tax Act 1961 Income tax 34 - 2012-13 Commissioner of Income Tax (Appeals)
130 - 2016-17 Assistant Commissioner of Income Tax
283 - 2017-18 Assistant Commissioner of Income Tax
8 - 2018-19 Assistant Commissioner of Income Tax

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or government or dues to debenture holders.

(ix) According to the information and explanations given by the management the Companyhas not raised any money by the way of initial public offer/further public offer(including debt instruments) and term loans during the year. Hence reporting under clause3(ix) of the Order is not applicable to the Company.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the standalone financial statements and according to the information andexplanations given by the management we report that no fraud by the Company or no fraudon the Com pany by the officers and em ployees of the Company has been noticed or reportedduring the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theAct where applicable and the details have been disclosed in the notes to the standalonefinancial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

Annexure 2 to the Independent Auditor's Report of even date on the Standalone FinancialStatements of Mindteck (India) Limited

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to standalone financialstatements of Mindteck (India) Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing as specified under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both issued by ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to these standalone financial statements was established and maintained andif such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to these standalone financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto standalone financial statements included obtaining an understanding of internalfinancial controls with reference to these standalone financial statements assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to these standalone financial statements.

Meaning of Internal Financial Controls With Reference to these Standalone FinancialStatements

A company's internal financial controls with reference to these standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to these standalone financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to these StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tothese standalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to these standalone financial statements to future periods aresubject to the risk that the internal financial control with reference to these standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to these standalone financial statements and such internalfinancial controls with reference to these standalone financial statements were operatingeffectively as at March 312021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number:
101049W/E3 00004
per Rajeev Kumar
Partner
Membership Number: 213803
UDIN: 21213803AAAABY6528
Place: Bengaluru
Date : May 28 2021

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