|BSE: 532819||Sector: IT|
|NSE: MINDTREE||ISIN Code: INE018I01017|
|BSE 00:00 | 28 Sep||3184.30||
|NSE 00:00 | 28 Sep||3191.50||
|Mkt Cap.(Rs cr)||52,525|
|Mkt Cap.(Rs cr)||52525.03|
Mindtree Ltd. (MINDTREE) - Auditors Report
Company auditors report
To the Members of Mindtree Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of MindtreeLimited ("the Company") which comprise the Balance Sheet as at March 312022 and the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flows and the Statement of Changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended (''Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2022 and its profit total comprehensive income its cash flows and the changes inequity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent year. We have determined that there are no key audit matters to communicate in ourreport.
Information Other than the Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Message fromthe Chairman Message from the Chief Executive Officer & Managing Director Messagefrom the Chief Financial Officer Management Discussion and Analysis BusinessResponsibility Report Director's Report Corporate Governance Risk Management Report andGlobal Presence but does not include the consolidated financial statements (includingfinancial statements prepared in accordance with International Financial ReportingStandards as issued by the International Accounting Standards Board) standalone financialstatements and our auditor's report thereon which we obtained prior to the date of thisauditor's report and any other information which is expected to form part of the annualreport which is expected to be made available to us after that date.
Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.
If based on the work we have performed on the other informationthat we obtained prior to the date of this auditor's report we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibility for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current year 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 Section 143(3) of the Act based on our audit wereport that:
a) We have sought and obtained all the information and explanationswhich 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 beenkept 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 OtherComprehensive Income the Statement of Cash Flows and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements;
ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that to the best of it'sknowledge and belief no funds (which are material either
individually or in the aggregate) have been advanced or loaned orinvested (either from borrowed funds or share premium or any other sources or kind offunds) by the Company to or in any other person(s) or entity(ies) including foreignentities ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall directly or indirectly lend or invest in otherpersons or entities identified in any manner whatsoever by or on behalf of the Company("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries.
(b) The Management has represented that to the best of it's knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Company from any person(s) or entity(ies) including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall directly or indirectly lend or invest in other personsor entities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.
v. The final dividend proposed in the previous year declared and paidby the Company during the year is in accordance with section 123 of the Act asapplicable.
The interim dividend declared and paid by the company during the yearis in compliance with section 123 of the act.
As stated in note 13.1 to the standalone financial statements theBoard of Directors of the Company have proposed final dividend for the year which issubject to the approval of the members at the ensuing Annual General Meeting. The amountof dividend proposed is in accordance with section 123 of the Act as applicable.
2. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of Mindtree Limited ("the Company") as of March 31 2022 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 company's policies the safeguarding ofits 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.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2022 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)
In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that
(i) (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property
plant and equipment capital work-in-progress and relevant details ofright-of-use assets.
(B) The Company has maintained proper records showing full particularsof intangible assets
(b) The Company has a program of verification of property plant andequipment capital work-in-progress and right-of-use assets so to cover all the items in aphased manner over a period of 3 years which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. Pursuant to the program certainproperty plant and equipment were due for verification during the year and werephysically verified by the Management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.
(c) Based on our examination of the registered conveyance deed providedto us we report that the title deeds of all the immovable properties (other thanimmovable properties where the Company is the lessee and the lease agreements are dulyexecuted in favor of the Company) disclosed in the financial statements included inproperty plant and equipment and capital work-in progress are held in the name of theCompany as at the balance sheet date.
(d) The Company has not revalued any of its property plant andequipment (including right-of-use assets) and intangible assets during the year.
(e) No proceedings have been initiated during the year or are pendingagainst the Company as at March 31 2022 for holding any benami property under the BenamiTransactions (Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.
(ii) (a) The inventories were physically verified during the year bythe Management at reasonable intervals. In our opinion and according
to the information and explanations given to us the coverage andprocedure of such verification by the Management is appropriate having regard to the sizeof the Company and the nature of its operations. No discrepancies of ten percent or morein the aggregate for each class of inventories were noticed on such physical verificationof inventories when compared with books of account.
(b) According to the information and explanations given to us at anypoint of time of the year the Company has not been sanctioned any working capitalfacility from banks or financial institutions on the basis of security of current assetsand hence reporting under clause (ii)(b) of the Order is not applicable.
(iii) The Company has not provided any guarantee or security or grantedany loans or advances in the nature of loans secured or unsecured to companies firmsLimited Liability Partnerships or any other parties which were outstanding at any pointduring the year and hence reporting under clause (iii)(a) (b) (except to the extent itpertains to investments) (c) (d) (e) and (f) of the Order is not applicable.
With respect to clause (iii) (b) the investments made by the Companyare in our opinion primafacie not prejudicial to the Company's interest.
(iv) In our opinion and according to the information and explanationsgiven to us and based on the audit procedures performed the Company has complied with theprovisions of Section 186 of the Companies Act 2013 in respect of investments made.
According to information and explanation given to us the Company hasnot granted any loans or provided guarantees or securities that are covered under theprovisions of sections 185 of the Companies Act 2013.
(v) The Company has not accepted any deposit or amounts which aredeemed to be deposits. Hence reporting under clause (v) of the Order is not applicable.
(vi) Having regard to the nature of the Company's business /activities reporting under clause (vi) of the Order with regard to cost records is notapplicable.
(vii) (a) The Company has generally been regular in depositingundisputed statutory dues including Provident Fund Income-tax Goods
and Services Tax Sales Tax Service Tax Customs Duty Value AddedTax Cess and other material statutory dues applicable to it to the appropriateauthorities. We have been informed that the provisions of the Employees' State InsuranceAct 1948 and Excise Duty are not applicable to the Company.
There were no undisputed amounts payable in respect of Goods andService tax Provident Fund Income-tax Sales Tax Service Tax duty of Custom ValueAdded Tax cess and other material statutory dues in arrears as at March 31 2022 for aperiod of more than six months from the date they became payable.
(b) Details of statutory dues referred to in sub-clause (a) above whichhave not been deposited as on March 31 2022 on account of disputes are given below:
1. Net of Rs 319.50 million adjusted against refunds.
2. Net of Rs 28.48 million adjusted against refunds.
3. Net of Rs 4.70 million adjusted against refunds.
4. Net of Rs 234.45 million paid under protest and adjusted againstrefunds.
5. Net of Rs 18.13 million adjusted against refunds.
6. Net of Rs 15.43 million adjusted against refunds.
7. Net of Rs 57.67 million adjusted against refunds.
8. Net of Rs 30.03 million adjusted against amount paid under protest.
9. Net of Rs 0.12 million adjusted against amount paid under protest.
10. Net of Rs 0.50 million adjusted against amount paid under protest.
11. Includes interest and penalty if any to the extent included indemand order.
(viii) There were no transactions relating to previously unrecordedincome that were surrendered or disclosed as income in the tax assessments under theIncome Tax Act 1961 (43 of 1961) during the year.
(ix) (a) The Company has not taken any loans or other borrowings fromany lender. Hence reporting under clause (ix)(a) of the Order is not
applicable to the Company.
(b) The Company has not been declared wilful defaulter by any bank orfinancial institution or government or any government authority.
(c) The Company has not taken any term loan during the year and thereare no unutilised term loans at the beginning of the year and hence reporting underclause (ix)(c) of the Order is not applicable.
(d) On an overall examination of the financial statements of theCompany funds raised on short-term basis have prima facie not been used during the yearfor long-term purposes by the Company.
(e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries. The Company did not have any associate or jointventure during the year.
(f) The Company has not raised any loans during the year and hencereporting on clause (ix)(f) of the Order is not applicable.
(x) (a) The Company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments) during the
year and hence reporting under clause (x)(a) of the Order is notapplicable.
(b) During the year the Company has not made any preferential allotmentor private placement of shares or convertible debentures (fully or partly or optionally)and hence reporting under clause (x)(b) of the Order is not applicable to the Company.
(xi) (a) To the best of our knowledge no fraud by the Company and nomaterial fraud on the Company has been noticed or reported during the year.
(b) To the best of our knowledge no report under sub-section (12) ofsection 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13of Companies (Audit and Auditors) Rules 2014 with the Central Government during the yearand up to the date of this report.
(c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year (and up to the date of this report) and providedto us when performing our audit.
(xii) The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable.
(xiii) In our opinion the Company is in compliance with Section 177and 188 of the Companies Act where applicable for all transactions with the relatedparties and the details of related party transactions have been disclosed in the financialstatements etc. as required by the applicable accounting standards.
(xiv) (a) In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.
(b) We have considered the internal audit reports issued to the Companyduring the year and covering the period up to December 31 2021 and the draft of theinternal audit reports where issued after the balance sheet date covering the periodJanuary 1 2022 to March 31 2022 for the period under audit.
(xv) In our opinion during the year the Company has not entered intoany non-cash transactions with any of its directors or directors of it's holding companysubsidiary company associate company or persons connected with such directors and henceprovisions of section 192 of the Companies Act 2013 are not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934. Hence reporting under clause (xvi)(a) (b) and(c) of the Order is not applicable.
The Group does not have any Core investment Company (CIC) as part ofthe group and accordingly reporting under clause (xvi)(d) of the Order is not applicable.
(xvii) The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors of theCompany during the year.
(xix) On the basis of the financial ratios ageing and expected datesof realization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.
(xx) (a) There is no unspent CSR amount in respect of other thanongoing projects for the year requiring a transfer to a Fund specified in
Schedule VII to the Companies Act in compliance with the provision ofsub-section (5) of section 135 of the said Act. Accordingly reporting under clause(xx)(a) of the Order is not applicable for the year.
(b) In respect of ongoing projects the Company has transferred unspentCorporate Social Responsibility (CSR) amount to a Special account before the date of thisreport and within a period of 30 days from the end of the financial year in compliancewith the provision of section 135(6) of the Act.