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MT Educare Ltd.

BSE: 534312 Sector: Others
NSE: MTEDUCARE ISIN Code: INE472M01018
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OPEN 5.98
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VOLUME 8343
52-Week high 12.35
52-Week low 5.55
P/E
Mkt Cap.(Rs cr) 43
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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MT Educare Ltd. (MTEDUCARE) - Auditors Report

Company auditors report

To

The Members of MT Educare Limited

Report on the audit of Standalone Financial Statements

1. Qualified Opinion

We have audited the standalone financial statements of MT Educare Limited ("theCompany") which comprise the balance sheet as at 31 March 2022 and the statement ofprofit and loss (including other comprehensive income) the statement of changes in equityand the statement of cash flows for the year then ended and notes to the standalonefinancial statements including a summary of the significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 ("the Act") in themanner so required and give a true and fair view in conformity with the Indian AccountingStandards (Ind AS) prescribed under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India of the state of affairs of the Company as at 31 March 2022 and itsloss total comprehensive loss changes in equity and its cash flows for the year ended onthat date.

2. Basis for Qualified opinion

a) The Company have recognized net deferred tax assets of '6619.26 lakhs based on theestimate that sufficient taxable profits would be available in future years against whichdeferred tax asset can be utilized. In our opinion due to uncertainties arising out ofthe outbreak of COVID -19 and the existence of unutilized tax losses available it isuncertain that the Company would achieve sufficient taxable profits in future againstwhich deferred tax asset can be utilized. Accordingly we are unable to obtain sufficientappropriate audit evidence to corroborate the Management's assessment of recognition ofdeferred tax assets as at 31 March 2022. Had the deferred tax asset not been recognizedthe net loss for the year ended 31 March 2022 would have been higher by Rs.6619.26 lakhs.The Opinion on the statement for the year ended 31 March 2021 was also modified in respectof this matter.

b) The Company has loans trade receivables and other receivables of Rs.4436.49 Lakhs(net of provisions) from other parties having operations in the education sectoroutstanding as at 31 March 2022 which are overdue/ rescheduled. The management considersthat COVID-19 have disrupted the operations of parties in education sector and suchoutstandings have arisen primarily due to lockdowns. Even after withdrawal of lockdown itis facing difficulties in ramping the business and the management considers that it hasresulted in deferment of recovery process than envisaged but the same is considered asgood and recoverable. Accordingly owing to the aforementioned overdues/ reschedulementwe are unable to comment upon adjustments if any that may be required to the carryingvalue of the outstanding receivables and further provisions if any required and theconsequential impact on the accompanying standalone financial statements. The Opinion onthe statement for the year ended 31 March 2021 was also modified in respect of thismatter.

c) Note no. 17 in respect of non-provision of interest w.e.f. 1 October 2021 on loanfrom Bank and Financial Institution ("lenders") declared as Non-PerformingAssets (NPA) and which are under dispute with the lenders and also matter is pending foradmission in the National Company Law Tribunal (NCLT) by one of the lender. Had theinterest expenses been recognised the loss for the quarter and nine months ended wouldhave been higher by Rs.175.86 lakhs (excluding penal interest if any) as per the terms ofthe agreement

We conducted our audit in accordance with the Standards on Auditing (SAs) prescribedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the standalone financialstatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our qualified opinion.

3. 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 as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matter described in the Basis for Qualified Opinion section we havedetermined the matters described below to be the Key audit matters to be communicated inour report.

Sr.No. Key Audit Matter How the Key Audit Matter was addressed in our audit
1. Revenue Recognition (Note no 27 to the accompanying standalone financial statements Our audit procedures in respect of this are included:
Revenue is one of the key profit driver and is therefore susceptible to misstatement. Cut off is the key assertion in so far as revenue recognition is concerned. The revenue is also deferred for part of services which have not been rendered. i. Assessed the Company's revenue recognition policy prepared as per Ind aS 115 'Revenue from contracts with customers'.
Revenue from the sale of services and products is measured at the fair value of the consideration received or receivable net of discounts and taxes. ii. Understood evaluated and tested the key controls implemented by the Company in relation to revenue recognition and discounts.
Considering the significant risk and judgment involved in revenue recognition and estimating accruals relating to discounts recognised in relation to services provided during the year it was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. iii. Performed sample tests of individual service transaction and verified services invoices and other related documents of such samples. Further in respect of such samples checked that the revenue has been recognized as per the accounting policy.
iv. Performed cut off procedures on sample basis for revenue transactions made to ensure correctness of period of revenue recognition.
v. Tested the calculations related to discounts and other supporting documents on test check basis.
vi. Verified the relevant disclosures made in the standalone Ind AS financial statements in accordance with Ind As 115.

4. Material Uncertainty relating to Going Concern

The pandemic Covid-19 has caused an adverse impact on the business operations of theCompany and its financial health. The operations of the Company were affected for the yearended 31 March 2022. Further the Company has defaulted in its debt/ other obligations andmatter is pending with National Company Law Tribunal (NCLT) for admission by one of thelender. These indicate the existence of uncertainty that may cast doubt on the Company'sability to continue as a going concern. The appropriateness of assumption of going concernis dependent upon improvement in cash flows from normal operations in post COVID-19 andtimely monetization of assets.

Our opinion is not modified in respect of this matter.

5. Emphasis of Matter

We draw attention to

a) Note 48 to the Statement that states that the management has made an assessment ofthe impact of COVID-19 on the Company's operations financial performance and position asat and for the year ended 31 March 2022 and has concluded that there is no impact which isrequired to be recognized in the standalone financial statements. Accordingly noadjustments have been made to the financial statements. However the extent of the impactof the COVID-19 pandemic on the Company's standalone financial statements is dependentupon future developments.

b) Note 51 to the Statement relating to recoverability of long outstanding vocationaltrade receivables and unbilled receivables aggregating to Rs.1499.70 lakhs (net ofprovisions) outstanding as at 31 March 2022 which represent amounts recoverable forvarious Central and State Government/ Agencies projects in education/skill developmentsector. Based on internal assessment of the management which includes considering theprogress of the discussions with the relevant government parties past trends contractualrights and evidence of service delivery the management is of the view that the aforesaidreceivable balances (net of provision) outstanding as at 31 March 2022 are good andrecoverable.

c) Note 53 regarding invocation of pledged shares held by one of the promoter of theCompany by the lender on account of repayment defaults.

Our opinion is not modified in respect of these matters.

6. Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Report Director's reportetc but does not include the standalone financial statements and our auditor's reportthereon. The above reports are expected to be made available to us after the date of thisauditor's report.

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 financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Management Report Chairman's Statement Director's report etc if weconclude that there is a material misstatement therein we are required to communicate thematter to those charged with governance under SA 720 'The Auditor's responsibilitiesRelating to other Information'.

Management and Board of Directors' Responsibilities for the Standalone FinancialStatements

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 cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) prescribed under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding 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 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 the 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.

7. 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 standalone 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 control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a 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 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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.

8. Report on other Legal and Regulatory requirements

I. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act and onthe basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in the"Annexure A" a Statement on the matters specified in paragraphs 3 and 4 of theOrder.

II. As required by Section 143 (3) of the Act we report that:

a) We have sought and except for the matter described in the "Basis for QualifiedOpinion" paragraph above obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purposes of our audit;

b) Except for the effects/possible effects of the matter described in the "Basisfor Qualified Opinion" paragraph above in our opinion proper books of account asrequired by law have been kept by the Company so far as it appears from our examination ofthose books;

c) The balance sheet the statement of profit and loss (including other comprehensiveincome) the statement of cash flows and the statement of changes in equity dealt with bythis Report are in agreement with the books of account;

d) Except for the effects/possible effects of the matter described in the "Basisfor Qualified Opinion" paragraph above in our opinion the financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withread with Rule 7 of the Companies (Accounts) Rules 2014 as amended;

e) On the basis of written representations received from the directors of the Companyas on 31 March 2022 and taken on record by the Board of Directors none of the directorsis disqualified as on 31 March 2022 from being appointed as a director in terms of Section164(2) of the Act;

f) The matters described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.

g) 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"; and

h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended:

According to records of the Company examined by us and information and explanationsgiven to us the remuneration paid by the company to its directors is within the limitslaid prescribed under Section 197 of the Act and the rules thereunder;

i) 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. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements- Refer Note 35 to the Standalone financialstatements;

ii. The Company did not have any long-term contracts including derivative contractshaving any material foreseeable losses;

iii. Following are the instances of delay in transferring amounts required to betransferred to the investor Education and Protection Fund (lEPF) by the Company

Year Amount (Rs./Lakhs) Due date Transferred to lEPF on Delay in no. of days
F.Y.2013-2014 0.91 10 August 2021 07 September 2021 29
F.Y. 2013-2014 0.60 10 February 2022 23 March 2022 42

iv. (a) The management has represented that to the best of its knowledge and beliefas disclosed in Note 52(a) of notes to the accounts no funds have been advanced or loanedor invested (either from borrowed funds or share premium or any other sources or kind offunds) during the year by the Company to or in any other persons or entities includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries

(b) The management has represented that to the best of its knowledge and belief asdisclosed in Note 52(b) of the notes to the accounts no funds have been received by theCompany during the year from any persons or entities including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries; and

(c) Based on the information and details provided and other audit procedures followednothing has come to our notice that has caused us to believe that the representationsunder sub-clause iv(a) and (b) contain any material misstatement.

v. The Company has not declared or paid dividend during the year.

For MGB & Co LLP
Chartered Accountants
Firm Registration Number: 101169W/W-100035
Sanjay Kothari
Partner
Mumbai Membership Number 048215
19 May 2022 UDIN : 22048215AJGHAI6352

Annexure - A to the Independent Auditor's Report on Standalone Financial Statements -31 March 2022

(Referred to in our report of even date)

i.(a) A) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment and relevant detailsof right of use assets.

B) The Company has maintained proper records showing full particulars of Intangibleassets.

(b) As explained to us the property plant and equipment have been physically verifiedby the management in accordance with a phased program of verification which in ouropinion is reasonable considering the size of the Company and nature of its assets. Thefrequency of physical verification is reasonable and discrepancies noticed on suchverification were properly dealt in books.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(d) The Company has not revalued its Property Plant and Equipment (including Right toUse assets) and intangible assets during the year and hence clause (i)(d) of the Order isnot applicable.

(e) There are no proceedings initiated or pending against the Company for holding anybenami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder and hence clause 3(i)(e) of the Order is not applicable.

ii. (a) The Company is involved in the business of rendering services. Accordingly theprovisions stated in paragraph 3(ii) of the Order is not applicable to the Company.

(b) The Company has been sanctioned working capital limits in excess of five crorerupees in aggregate from banks on the basis of security of current assets and fixeddeposits. On the basis of examination of records quarterly statements in case of a bankhas not been submitted as the account has been treated as Non-Performing Asset (NPA) byone of the bank. Accordingly disclosure under this clause is not applicable.

iii (a) According to the information and explanations given to us the Company has notgranted loans secured or unsecured to companies firms Limited Liability Partnerships orany other parties during the year. The Company has not made investments providedguarantees and securities during the year. The aggregate amount of advances in the natureof loan given during the year and balance outstanding as at the balance sheet date is asunder for advances in the nature of loans given during the year:

(Rs./ Lakhs)
Guarantees Security Loans Advances in the nature of loan
Aggregate amount granted/ provided during the year
- Subsidiaries - - - 1252.50
- Others - - - 222.64
Balance outstanding as at the balance sheet date in such above cases - - -
- Subsidiaries - - - 947.24
- Others 222.64

(b) In our opinion the Company has not made investments given loans providedguarantee or securities during the year except advances in the nature of loans for whichthe terms and conditions are not prejudicial to the interest of the Company.

(c) The loans granted along with interest have been rescheduled or repayable on demandand is repaid as stipulated except as detailed below:

Name of the Entity Amount (Rs./Lakhs) Due date* Extent of delay Remarks
Sri Gayatrl Education Society 1215.25 31 March 2021 366 Principal
1215.25 31 March 2022 1
Aryan Foundation 251.17 31 March 2020 731
251.17 31 March 2021 366
251.17 31 March 2022 1
Sri Gayatri Education Society 590.61 31 March 2018 1462 Interest
874.98 31 March 2019 1097
974.87 31 March 2020 731
972.20 31 March 2021 366
Aryan Foundation 157.60 31 March 2019 1097
254.66 31 March 2020 731
239.57 31 March 2021 366

* Last day of the financial year has been considered as due date for the relevantfinancial year mentioned in the agreement.

(d) There is no overdue amount in respect of interest receivable and loans granted formore than 90 days except as stated below. The Company has taken necessary steps forrecovery of the said loans.

No of cases Principal amount overdue Interest overdue Total Overdue Remarks
2 1717.59 4064.50 5782.09 Unpaid

(e) On the basis of examination loan or advance in the nature of loan granted whichhas fallen due during the year and has been extended during the year as stated below. Nofresh loans are granted to settle the overdues of existing loans given to the sameparties.

Name of the parties Aggregate amount of overdues of existing loans extended Percentage of the aggregate to the total loans and advances granted (Including renewals) during the year Remarks
Zee Learn Education Society 400.00 12% Due date was 31
Mount Litera Education 400.00 12% December 2022 extended to 31 March 2025
Foundation
Gyanmala Public Education Trust 400.00 12%
Taleem Research Foundation 800.00 23%

f) The loans and advances in the nature of loans granted is repayable on demand. Theaggregate amount percentage thereof to the total loans granted and advances in the natureof loans aggregate amount of loans granted to Promoters related parties as defined inclause (76) of section 2 of the Companies Act 2013 is as under

Name of the Party All Parties Promoters Related Parties
Aggregate of Loans/ advances in the nature of loans
- Repayable on demand 4400.02 - 2734.94
Percentage of loans/ advances in the nature of loans to total loans 21.40%

-

13.30%

iv In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act in respect ofloan given investments made guarantees and securities provided.

v The Company has not accepted any deposits or amounts which are deemed to be depositsfrom the public within the directives issued by Reserve Bank of India and within themeaning of Sections 73 to 76 of the Act and the rules framed thereunder.

vi We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under Section 148(1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have however not made adetailed examination of such records with a view to determine whether they are accurate orcomplete.

vii According to the records of the Company examined by us and information andexplanations given to us:

a) Undisputed statutory dues including provident fund employees' state insuranceincome tax sales tax service tax goods and services tax duty of customs duty ofexcise value added tax cess and others as applicable have not been regularly depositedwith the appropriate authorities and there has been delays in large number of cases. Thereare no undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March2022 for a period of more than six months from the date they became payable exceptprofession tax Rs.0.82 lakhs for various years Rs.23.04 lakhs pertaining to tax deductedand source and Rs.162.86 lakhs pertaining to goods and service tax.

b) There are no amounts of any statutory dues which are yet to be deposited on accountof any dispute except as stated below:

Name of the Statute Nature of the Dues Amount (Rs./Lakhs) Period to which the amount relate Forum where dispute is pending
Income Tax Act 1961 Income Tax 71.90 F.Y. 2015-2016 Assessing Officer
Income Tax Act 1961 Income Tax 84.91 F.Y. 2016 - 2017 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 11.39 F.Y 2017-2018 Commissioner of Income Tax (Appeals)
MVAT Act 2002 Value added tax 50.90 F.Y. 2015 - 2016 Deputy Commissioner of Sales Tax
Finance Act 1994 Service tax 46.95 F.Y. 2013 - 2014 to F.Y. 2015- 2016 Joint Commissioner of Central Tax and Central Excise
Finance Act 1994 Service tax 92.32 F.Y. 2016 - 2017 to June 2017 Joint Commissioner of Central Tax and Central Excise
Finance Act 1994 Service tax 1512.46 F.Y. 2013 - 2014 to June 2017 Commissioner of Central Tax and Central Excise

viii According to the records of the Company examined by us and information andexplanations given to us the Company has not surrendered or disclosed any transactionspreviously unrecorded as income in the books of account in the tax assessments under theIncome Tax Act 1961 (43 of 1961) as income during the year.

ix (ai) According to the records of the Company examined by us and the information andexplanations given to us the Company has defaulted in repayment of loans or borrowings tobanks and financial institution as tabulated below and also refer note 17 and 21 of theStandalone Financial Statements :

Nature of borrowing including debt securities Name of lender* Amount not paid on due date (Rs./Lakhs) Whether principal or interest No. of days delay or unpaid Remarks if any
Term Loan Axis Bank Limited 321.90 Principal 232-366 days Unpaid
10.87 Interest 366 days Unpaid
122.37 Interest 183-424 days Unpaid
Overdraft 5.94 Overdraft 366 days Unpaid
24.54 Overdraft Overdrawn Unpaid
Term Loan Asset Care and 1472.26 Principal 239-548 Days Unpaid
Reconstruction 62.41 Interest 366 days Unpaid
Enterprise Limited# 117.82 Interest 183-366 Days Unpaid

* The Company has not provided interest of Rs.175.86 Lakhs for the period from01 October 2021 to 31 March 2022 as referred in para 2c 'Basis of Qualified Opinion'.

(aii) Delay on account of principal and interest repayment to bank and financialinstitution

Nature of borrowing Name of lender Amount not paid on due date (Rs./Lakhs) Whether principal or interest No. of days delay
Term Loan Asset Care and Reconstruction Enterprise Limited# 30.27 Interest 91 days
Term Loan Axis Bank Limited 928.10 Principal 232 days- 536 days

# Term Loan from Xander Finance Private Limited assigned to Asset Care andReconstruction Enterprise Limited

(b) According to the records of the Company examined by us and information andexplanations given to us the Company is not declared willful defaulter by any bank orfinancial institution or other lender.

(c) According to the information and explanations given to us and based on the auditprocedures performed by us the term loans were applied for the purpose for which theloans were obtained.

(d) In our opinion and according to the information and explanations given to us and onan overall examination of the Balance Sheet of the Company we report that funds raised onshort term basis have not been utilised for long term purposes.

(e) According to the records of the Company examined by us and information andexplanations given to us the Company has not taken any funds from entities to meetobligations of its subsidiaries and there are no joint ventures and associates.Accordingly the reporting under Clause 3(ix)(e) of the Order is not applicable to theCompany

(f) According to the records of the Company examined by us and information andexplanations given to us the Company has not raised any loans during the year on thepledge of securities held in its subsidiaries and there are no joint ventures andassociates. Accordingly the reporting under Clause 3(ix)(f) of the Order is notapplicable to the Company

x (a) In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments). Accordingly the reporting under Clause 3(x)(a) of the Orderis not applicable to the Company.

(b) According to the records of the Company examined by us and information andexplanations given to us the Company has not made any preferential allotment or privateplacement of shares or fully or partly or optionally convertible debentures during theyear. Accordingly the reporting under Clause 3(x)(b) of the Order is not applicable tothe Company.

xi (a) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or on the Company noticed or reported during the yearnor have been informed of any such case by the Management.

(b) No report under sub-section (12) of section 143 of the Act has been filed in FormADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules 2014 with theCentral Government during the year and upto the date of this report.

(c) According to the records of the Company examined by us and information andexplanations given to us there are no whistle blower complaints received during the year.

xii In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it. Henceclause (xii) (a) (b) and (c) of the Order are not applicable.

xiii 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 Sections 177 and 188 of the Act and details of such transactions havebeen disclosed in the standalone Ind AS financial statements as required by the applicableIndian Accounting Standards.

xiv (a) During the year Internal audit has been carried out internally by the Company.In our opinion and according to the information and explanations given to us the scopeand coverage is commensurate with the size of the Company and the nature of its business.

(b) The reports of the Internal Auditors for the period under audit were considered bythe statutory auditor.

xv According to the records of the Company examined by us and information andexplanations given to us the Company has not entered into non-cash transactions withdirectors or persons connected with him.

xvi (a) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934 hence clause (xvi) (a) and (b) of the Order are not applicable

(b) In our opinion the Company is not a core investment company and there is no coreinvestment company within the Group (as defined in the Core Investment Companies (ReserveBank) Directions 2016) and accordingly reporting under clause 3(xvi)(c) and (d) of theOrder is not applicable.

xvii According to the records of the Company examined by us and information andexplanations given to us the Company has incurred cash losses of '1312.64 lakhs duringthe current financial year and '327.88 lakhs in the immediately preceding financial year.

xviii There has been no resignation of statutory auditor during the year hence clause(xviii) of the Order is not applicable.

xix According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions the pandemic Covid-19 has caused an adverseimpact on the business operations of the Company and its financial health. The operationsof the Company were affected for the year ended 31 March 2022. Further the Company hasdefaulted in its debt/ other obligations and matter is pending with National Company LawTribunal (NCLT) for admission by one of the lender which causes us to believe thatmaterial uncertainty exists as on the date of the audit report that may cast doubt on theCompany's ability to meet its liabilities existing at the date of Balance Sheet as andwhen they fall due within a period of one year from the Balance Sheet date.

xx According to the records of the Company examined by us and information andexplanations given to us there are no unspent amounts at the year end and hence clause3xx(a) and 3xx(b) of the Order is not applicable to the Company.

For MGB & Co LLP
Chartered Accountants
Firm Registration Number: 101169W/W-100035
Sanjay Kothari
Partner
Mumbai Membership Number 048215
19 May 2022 UDIN : 22048215AJGHAI6352

Annexure - B to the Independent Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") as referred to in paragraph 8(II)(f)under "Report on other Legal and Regulatory requirements" of our report of evendate to the members of MT Educare Limited on the standalone financial statements for theyear ended 31 March 2022

We have audited the internal financial controls with reference to financial statementsof MT Educare Limited ("the Company") as of 31 March 2022 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 with reference to financial statementscriteria 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 (ICAI) (the"Guidance Note"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing issued by ICAI anddeemed to be prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial with reference tofinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto 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 financial statements.

Meaning of Internal Financial Controls over Financial Statements

A company's internal financial control with reference to financial statements 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 withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 with reference to financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Basis for qualified opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified in the Company's internal financialcontrols over financial reporting as at 31 March 2022:

The Company's internal financial control with regard to evaluation of the recognitionof deferred tax assets and recoverability of loans trade receivables and otherreceivables to other parties in compliance with the applicable Indian Accounting Standard(Ind AS) were not operating effectively due to the prevailing Covid-19 pandemic (as fullyexplained in the 'Basis for qualified opinion' of our main report) which could result inthe Company not providing for adjustments if any that may be required to be made and itsconsequential impact on the standalone financial statements.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

Qualified opinion

In our opinion to the best of our information and according to the explanations givento us except for the possible effects of the material weakness described in the 'Basisfor qualified opinion' paragraph above on the achievement of the objectives of the controlcriteria the Company has maintained in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as of 31 March 2022 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India. We have considered the material weaknessidentified and reported above in determining the nature timing and extent of audit testsapplied in our audit of the standalone financial statements of the Company as at and forthe year ended 31 March 2022 and the material weakness has affected our opinion on thestandalone financial statements of the Company and we have issued a Qualified opinion onthe standalone financial statements

For MGB & Co LLP
Chartered Accountants
Firm Registration Number: 101169W/W-100035
Sanjay Kothari
Partner
Mumbai Membership Number 048215
19 May 2022 UDIN : 22048215AJGHAI6352

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