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Mirch Technologies (India) Ltd.

BSE: 505336 Sector: Engineering
NSE: N.A. ISIN Code: INE098E01018
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NSE 05:30 | 01 Jan Mirch Technologies (India) Ltd
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OPEN 1.11
CLOSE 1.11
VOLUME 25
52-Week high 1.11
52-Week low 0.69
P/E 0.06
Mkt Cap.(Rs cr) 0
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mirch Technologies (India) Ltd. (MIRCHTECHNOLOGI) - Auditors Report

Company auditors report

To the Members of M/s Mirch Technologies (India) Limited.

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of M/s Mirch Technologies(India) Limited (the Company) which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss for the year then ended the Statement of Changes inEquity and the Statement of Cash Flows for the year the ended and a summary of significantaccounting policies and other explanatory information. In our opinion and to the best ofour information and according to the explanations given to us the aforesaid standalonefinancial statements give the information required by the Companies Act 2013 ("theAct") in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS") andother accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2019 the loss changes in equity and its cash flows for the yearended on that date.

Basis for opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). 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 issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code of

Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

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 of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter

1 Accuracy of recognition measurement presentation and disclosures of revenues andother related balances in view of adoption of Ind AS 115 "Revenue from Contracts withCustomers" (new revenue accounting standard) The application of the new revenueaccounting standard involves certain key judgements relating to identification of distinctperformance obligations determination of transaction price of the identified performanceobligations the appropriateness of the basis used to measure revenue recognized over aperiod. Additionally new revenue accounting standard contains disclosures which involvescollation of information in respect of disaggregated revenue and periods over which theremaining performance obligations will be satisfied subsequent to the balance sheet date.Refer to Notes 2.5 to the Standalone Financial Statements

Auditor's Response

Principal Audit Procedures We assessed the Company's process to identify the impact ofadoption of the new revenue accounting standard. Our audit approach consisted testing ofthe design and operating effectiveness of the internal controls and substantive testing asfollows :

• Evaluated the design of internal controls relating to implementation of the newrevenue accounting standard.

• Selected a sample of continuing and new contracts and tested the operatingeffectiveness of the internal control relating to identification of the distinctperformance obligations and determination of transaction price. We carried out acombination of procedures involving enquiry and observation re-performance and inspectionof evidence in respect of operation of these controls.

• Tested the relevant information technology systems' access and change managementcontrols relating to contracts and related information used in recording and disclosingrevenue in accordance with the new revenue accounting standard.

• Selected a sample of continuing and new contracts and performed the followingprocedures :

• Read analysed and identified the distinct performance obligations in thesecontracts

• Compared these performance obligations with that identified and recorded by theCompany

• Considered the terms of the contracts to determine the transaction priceincluding any variable consideration to verify the transaction price used to computerevenue and to test the basis of estimation of the variable consideration

• Samples in respect of revenue recorded for time and material contracts weretested using a combination of approved time sheets including customer acceptancessubsequent invoicing and historical trend of collections and disputes

• .Sample of revenues disaggregated by type and service offerings was tested withthe performance obligations specified in the underlying contracts

• .In respect of samples relating to fixed-price contracts progress towardssatisfaction of performance obligation used to compute recorded revenue was verified withactual and estimated efforts from the time recording and budgeting systems. We also testedthe access and change management controls relating to these systems

• Sample of revenues disaggregated by type and service offerings was tested withthe performance obligations specified in the underlying contracts

• Performed analytical procedures for reasonableness of revenues disclosed by typeand service offerings.

• We reviewed the collation of information and the logic of the report generatedfrom the budgeting system used to prepare the disclosure relating to the periods overwhich the remaining performance obligations will be satisfied subsequent to the balancesheet date.

2 Key Audit Matter

Accuracy of revenues and onerous obligations in respect of fixed-price contractsinvolves critical estimates Estimated effort is a critical estimate to determine revenuesand liability for onerous obligations. This estimate has a high inherent uncertainty as itrequires consideration of progress of the contract efforts incurred till date and effortsrequired to complete the remaining contract performance obligations. Refer Notes 2.5 tothe Standalone Financial Statements.

Auditor's Response

Principal Audit Procedures

Our audit approach was a combination of test of internal controls and substantiveprocedures which included the following :

• Evaluated the design of internal controls relating to recording of effortsincurred and estimation of efforts required to complete the performance obligations.

• Tested the access and application controls pertaining to time recordingallocation and budgeting systems which prevents unauthorised changes to recording ofefforts incurred.

• Selected a sample of contracts and through inspection of evidence of performanceof these controls tested the operating effectiveness of the internal controls relating toefforts incurred and estimated.

• Selected a sample of contracts and performed a retrospective review of effortsincurred with estimated efforts to identify significant variations and verify whetherthose variations have been considered in estimating the remaining efforts to complete thecontract.

• Reviewed a sample of contracts with unbilled revenues to identify possibledelays in achieving milestones which require change in estimated efforts to complete theremaining performance obligations.

• Performed analytical procedures and test of details for reasonableness ofincurred and estimated efforts.

3. Key Audit Matter

Evaluation of uncertain tax positions

The Company has material uncertain tax positions including matters under dispute whichinvolves significant judgment to determine the possible outcome of these disputes. ReferNotes 2.10 & 19 to the Standalone Financial Statements

Auditor's Response

Principal Audit Procedures

Obtained details of completed tax assessments and demands for the year ended March 312019 from management. We involved our internal experts to challenge the management'sunderlying assumptions in estimating the tax provision and the possible outcome of thedisputes. Our internal experts also considered legal precedence and other rulings inevaluating management's position on these uncertain tax positions.

Additionally we considered the effect of new information in respect of uncertain taxpositions as at April 1 2018 to evaluate whether any change was required to management'sposition on these uncertainties.

4 Key Audit Matter

Recoverability of Indirect tax receivables

As at March 31 2019 non-current assets in respect of withholding tax and othersincludes Cenvat recoverable amounting to Rs. Nil which are pending adjudication

Auditor's Response

Principal Audit Procedures

We have involved our internal experts to review the nature of the amounts recoverablethe sustainability and the likelihood of recoverability upon final resolution.

Information Other than the Standalone Financial Statements and Auditor's Report

Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude 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 ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe 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.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015. This responsibility also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the Company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of internal financialcontrol that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

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

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal

• 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)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such

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

• 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 independence 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the ‘Annexure A' a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the standalone financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) 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 in our opinionand to the best of our information and according to the explanations given to us: i. TheCompany does not have any pending litigations which would impact its financial position;ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company

For and on behalf of
U.S.Tanwar & Co.
Chartered Accountants
F.R. No.110810W
Sd/-
Place:-Mumbai (CA.U.S. Tanwar)
Date: 30-05-2019 Proprietor
ICAI M.No.030440

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1 under ‘Report on other legal and regulatoryrequirements' section of our report to the members of Mirch Technologies (India) Limitedof even date)

(1) In Respect of its fixed assets:

(a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets of the Company were physically verified in full by the managementduring the year. According to the information and explanations given to us and as examinedby us no material discrepancies were noticed on such verification

(c) According to the information and explanations given to us the records examined byus we report that the Company does not hold any freehold are held in the name of theCompany as at the balance sheet date. In respect of immovable properties of land andbuilding that have been taken on lease and disclosed as fixed assets in the financialstatements the lease agreements are in the name of the Company.

(2) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. According to theinformation and explanations given to us and as examined by us no material discrepancieswere noticed on such verification.

(3) According to information and explanation given to us the company has not grantedany loan secured or unsecured to companies firms limited liability partnerships orother parties covered in the register required under section 189 of the Companies Act2013. Accordingly paragraph 3 (iii) of the order is not applicable.

(4) In our opinion and according to information and explanation given to us thecompany has not granted any loans or provided any guarantees or given any security or madeany investments to which the provision of section 185 and 186 of the Companies Act 2013.Accordingly paragraph 3 (iv) of the order is not applicable.

(5) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits and accordingly paragraph 3 (v) of the order is notapplicable.

(6) The Central Government of India has not prescribed the maintenance of cost recordsunder sub-section (1) of section 148 of the Act for any of the activities of the companyand accordingly paragraph 3 (vi) of the order is not applicable.

(7) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax sales- tax service tax goods and service tax duty of customsduty of excise value added tax cess and other material statutory dues have beengenerally regularly deposited during the year by the company with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of provident fund employees' state insurance income-taxsales- tax service tax goods and service tax duty of customs duty of excise valueadded tax cess and other material statutory dues were in arrears as at March 31 2019 fora period of more than six months from the date they became payable except as per detailsbelow:

Name of the statute Nature if the Dues Amount(Rs.) Period to which Amount relates Due Date
Maharashtra Value Added Tax2002 Mumbai sales tax 30546/- Old Dues prior to 2002
Maharashtra Value Added Tax2002 Mumbai sales tax 16345/- Apr 05-Mar 05 21-04-2005
Central Sales Tax1956 Central Sales Tax 730249/- Old Dues prior to 2002 Old Dues prior to 2002
Maharashtra Value Added Tax2002 Vat 17055/- Oct 09 to Mar 10 21-04-2010

(7) (b) According to the information and explanations given to us and the records ofthe company examined by us there are no dues of income-tax sales- tax service taxgoods and service tax duty of customs duty of excise and value added tax which have notbeen deposited on account of any dispute.

(8) In our opinion and according to the information and explanations given to us thecompany has no outstanding dues to any financial institutions or banks or any governmentor any debenture holders during the year. Accordingly paragraph 3 (viii) of the order isnot applicable.

(9) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and has not taken any term loans during theyear. Accordingly paragraph 3 (ix) of the order is not applicable.

(10) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(11) No Managerial remuneration has been paid or provided.

(12) The Company is not a Nidhi Company and accordingly paragraph 3 (xii) of the orderis not applicable to the Company.

(13) According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of the Act. Where applicable the details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(14) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the order is not applicable.

(15) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the order is not applicable.

(16) According to the information and explanations given to us and based on ourexamination of the records of the company the company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For and on behalf of
U.S.Tanwar & Co.
Chartered Accountants
F.R. No.110810W
Sd/-
Place:-Mumbai (CA.U.S. Tanwar)
Date:30-05-2019 Proprietor
ICAI M.No.030440

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 (f) under ‘Report on other legal and regulatoryrequirements' section of our report to the Members of Mirch Technologies (India) Limitedof even date)

Report on the internal financial controls over financial reporting under clause (i) ofsub section 3 of section 143 of the Companies Act 2013 ("the Act") We haveaudited the internal financial controls over financial reporting of Mirch Technologies(India) Limited ("the Company") as at March 31 2019 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's responsibility for internal financial controls

The board of directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting 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 the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the standards on auditing prescribed under Section 143 (10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. Thosestandards and the guidance note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement in thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Company's internal financial control system over financial reporting.

Meaning of internal financial controls over financial reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (i) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (ii) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (iii) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management of override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and according to the information and explanations given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2019 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.

For and on behalf of
U.S.Tanwar & Co.
Chartered Accountants
F.R. No.110810W
Sd/-
(CA.U.S. Tanwar)
Place:-Mumbai Proprietor
Date:30-05-2019 ICAI M.No.030440

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