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Mindtree Ltd.

BSE: 532819 Sector: IT
NSE: MINDTREE ISIN Code: INE018I01017
BSE 00:00 | 24 Apr Mindtree Ltd
NSE 05:30 | 01 Jan Mindtree Ltd
OPEN 770.00
PREVIOUS CLOSE 764.90
VOLUME 42704
52-Week high 1061.80
52-Week low 652.50
P/E 20.62
Mkt Cap.(Rs cr) 12,848
Buy Price 776.00
Buy Qty 6.00
Sell Price 782.00
Sell Qty 1.00
OPEN 770.00
CLOSE 764.90
VOLUME 42704
52-Week high 1061.80
52-Week low 652.50
P/E 20.62
Mkt Cap.(Rs cr) 12,848
Buy Price 776.00
Buy Qty 6.00
Sell Price 782.00
Sell Qty 1.00

Mindtree Ltd. (MINDTREE) - Auditors Report


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Company auditors report

TO THE MEMBERS OF MINDTREE LIMITED

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of MINDTREE LIMITED("the Company") which comprise the Balance Sheet as at March 31 2019 and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificantaccounting policies and other explanatory information. In our opinion and tothe best of our information and according to the explanations given to us the aforesaidstandalone financial statements give the information required by the Companies Act 2013("the Act") in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and its profit total comprehensive incomeits cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing prescribed under section 143(10) of the Act (SAs). Ourresponsibilities 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 ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements 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.

Sr. No. Key Audit Matter Auditor's Response
1 Revenue Principal audit procedures performed
Revenue from rendering of services amounting to Rs 70215 Millions for year ended March 31 2019 (Refer Note 17 to the standalone financial statements) is recognised based on the application of the new revenue accounting standard (Ind AS 115- ‘Revenue from Contracts with Customers') which involves certain key judgments (Refer Note 2.1 (c)(i) to the standalone financial statements) relating to identification of distinct performance obligations determination of the transaction price of the identified performance obligation and the appropriateness of the basis used to measure revenue recognised over a period. We have performed the following procedures:
i. Evaluated the design and implementation of the relevant controls (automated and manual) over implementation of the new revenue accounting standard and from a sample of continuing and new contracts tested the operating effectiveness of such internal controls.
ii. Selected a sample of continuing and new contracts and performed the following procedures:
Read the agreements with the customers to identify the distinct performance obligations the transaction price and its allocation to the performance obligations in the contract and the classification of the contract for the basis of revenue recognition in accordance with Ind AS 115.
Compared and agreed these with the information and classification identified by the Company.
For time and material contracts verified the determination of revenue with the approved time sheets including customer acceptance where necessary.
For fixed maintenance contracts verified the period of the contract with the customer agreements and the determination of the amount of revenue. Verified if the revenue was recognised appropriately over the period of contract as services were being rendered and whether the revenue recognised was based on the estimate of the amount of consideration to which the Company is entitled in exchange for transferring the services.
Due to the large variety and complexity of judgements contractual terms significant are required to estimate the amount applied. If the actual amount differs from the amount applied or estimated amount this will have an impact on the accuracy of the revenue recognised in the current period. For fixed price contracts verified the measurement of revenue for the extent of delivery of performance obligations with the actual and estimated cost of efforts as per the time recording system and project budgets.
Verified a sample of credit notes raised subsequent to revenue being recognized for any net settlements to confirm revenue recognized during the period was appropriate.
Agreed the revenue as recognized with the underlying accounting records including the Company's revenue monitoring system.
The new accounting standard additionally requires disclosures (Refer Note 17 to the standalone financial statements) which involve information with regard to disaggregated revenue and periods over which the remaining performance obligation will be satisfied subsequent to the balance sheet date. iii. Tested the relevant controls in the Company's Information Technology ("IT") systems including change management and also the report logic the report parameters and consideration of the source data in the information produced / used by the Company from its IT systems.
iv. Verified the basis of preparation and tested for a sample the details considered in the various reports generated from the Company's IT systems to prepare the necessary revenue disaggregation and other disclosures required.
v. Performed analytical procedures as applicable for reasonableness of revenues disclosed by type and service offerings.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report for example BusinessResponsibility Report Director's Report Corporate Governance Report ManagementDiscussion and Analysis Risk Management Report etc. but does not include theconsolidated (including financial statements prepared in accordance with InternationalFinancial Reporting Standards as issued by the International Accounting Standards Board)and standalone financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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 financialstatements management is responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. Those Boardof Directors are also responsible for overseeing the Company'sfinancialreporting process.

Auditor's Responsibility 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 financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company 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 the 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's asa going concern. If we conclude that a material uncertainty exists we are required todraw attention in our auditor's report to the related disclosures in the standalonefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions 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 standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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.

Report on Other Legal and Regulatory Requirements

1. As required by section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income the Statement of Cash Flows and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account. d) In our opinion the aforesaid standalone financial statements comply withthe Ind AS prescribed under Section 133 of the Act. e) On the basis of the writtenrepresentations received from the directors as on March 31 2019 taken on record by theBoard of Directors none of the directors is disqualified as on March 31 2019 from beingappointed as a director in terms of Section 164 (2) of the Act. f) With respect to theadequacy of the internal financial controls over financial reporting of the Company andthe operating effectiveness of such controls refer to our separate Report in"Annexure A". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting. g) 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: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid/provided by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act. h) With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 as amended in our opinion and to the best of ourinformation and according to the explanations given to us: statements; i.TheCompanyhasdisclosedtheimpactofpendinglitigationsonitsfinancial positioninitsstandalonefinancial ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses; iii. There has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
V. Balaji
Bengaluru April 17 2019 Partner
(Membership No. 203685)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of 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 have audited the internal financial controls over financial reporting ofMINDTREELIMITED ("the Company") as of March 31 2019 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management isresponsibleforestablishingandmaintaininginternalfinancialcontrols based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India. 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 Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial

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 (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) 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 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 Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
V. Balaji
Bengaluru April 17 2019 Partner
(Membership No. 203685)

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)

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

(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of 3 opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets 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) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered conveyance deed/ approved buildingplan provided to us we report that the title deeds comprising all the immovableproperties of buildings which are freehold as at the balance sheet date are held in thename of the Company. In respect of immovable properties of land that have been taken onlease the lease agreements are in the name of the Company where the Company is thelessee in the agreement.

(ii) The Company does not have any inventory and hence reporting under clause (ii) ofthe Order is not applicable.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 186 of the Act in respect ofinvestments made. According to the information and explanations given to us the Companyhas not granted any loan or provided any guarantees and securities.

(v) According to the information and explanations given to us the Company has notaccepted any deposits during the year and does not have any unclaimed deposits.

(vi) Having regard to the nature of the Company's business/ activities reporting underclause (vi) of the Order with regard to cost records is not applicable.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Goods and Services TaxSales Tax Service Tax Customs Duty Excise Duty Value Added Tax Cess and othermaterial statutory dues applicable to it to the appropriate authorities. (b) Details ofdues of Income-tax Sales Tax Service Tax Customs Duty Excise Duty and Value Added Taxwhich have not been deposited as on March 31 2019 on account of disputes are given below:

Name of the statute Nature of dues Forum where dispute is pending Period to which the amount relates Amount (Rs in million)
AY 2002-03 to 2004-05 147.29*
Commissioner of Income Taxes AY 2007-08 and 2008-09 3.14**
(Appeals) AY 2010-11 5.65
Income-tax Act 1961 Income-tax AY 2013-14 and 2014-15 15.43
Income Tax Appellate Tribunal AY 2005-06 and 2007-08 27.92***
AY 2006-07 -****
Assessing Officer
AY 2008-09 and 2009-10 30.84#
Customs Excise and Service Tax July 2003 to May 2008 125.83##
The Finance Act 1994 Service tax Appellate Tribunal
Commissioner (Appeals)- LTU March 2008 to March 2009 0.68###
The Karnataka Sales Tax Act 1957 Value added tax Assistant Commissioner of Upto July 2004 0.29####
Commercial Taxes (Recovery)
The Central Sales Tax Act 1956 Sales tax Commissioner (Appeals) 2011-12 0.46
Maharashtra Value Added Tax Act 2002 Value added tax Joint Commissioner of Sales Tax 2013-14 0.17

* Net of Rs 177.47 Million adjusted against amount paid under protest and refunds. **Net of Rs 18.13 Million adjusted against refunds.

*** Net of Rs 33.18 Million adjusted against amount paid under protest and refunds.**** Net of Rs 57.67 Million adjusted against refunds.

# Net of Rs 307.35 Million adjusted against refunds.

## Net of Rs 30.03 Million adjusted against amount paid under protest.

### Net of Rs 0.12 Million adjusted against amount paid under protest. #### Net of Rs0.50 Million adjusted against amount paid under protest.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans to bank and government. There are noborrowings from financial institutions and the Company has not issued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable.

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

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Act for all transactions withthe related parties and the details of related party transactions have been disclosed inthe financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its subsidiaries or persons connected with them and henceprovisions of section 192 of the Act are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
V. Balaji
Bengaluru April 17 2019 Partner
(Membership No. 203685)